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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4872 Reported in House (RH)]

                                                 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Reconciliation Act of 2010''.

SEC. 2. TABLE OF CONTENTS.

    The table of divisions is as follows:

   DIVISION I--HOUSE COMMITTEE ON WAYS AND MEANS: HEALTH CARE REFORM

DIVISION II--HOUSE COMMITTEE ON EDUCATION AND LABOR: HEALTH CARE REFORM

  DIVISION III--HOUSE COMMITTEE ON EDUCATION AND LABOR: INVESTING IN 
                               EDUCATION

      DIVISION I--COMMITTEE ON WAYS AND MEANS: HEALTH CARE REFORM

SEC. 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, AND SUBTITLES.

    (a) Short Title.--This division may be cited as the ``America's 
Affordable Health Choices Act of 2009''.
    (b) Table of Subdivisions, Titles, and Subtitles.--This division is 
divided into subdivisions, titles, 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
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

             SUBDIVISION A--AFFORDABLE HEALTH CARE CHOICES

SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; GENERAL 
              DEFINITIONS.

    (a) Purpose.--
            (1) In general.--The purpose of this subdivision is to 
        provide affordable, quality health care for all Americans and 
        reduce the growth in health care spending.
            (2) Building on current system.--This subdivision achieves 
        this purpose by building on what works in today's health care 
        system, while repairing the aspects that are broken.
            (3) Insurance reforms.--This subdivision--
                    (A) enacts strong insurance market reforms;
                    (B) creates a new Health Insurance Exchange, with a 
                public health insurance option alongside private plans;
                    (C) includes sliding scale affordability credits; 
                and
                    (D) initiates shared responsibility among workers, 
                employers, and the government;
        so that all Americans have coverage of essential health 
        benefits.
            (4) Health delivery reform.--This subdivision institutes 
        health delivery system reforms both to increase quality and to 
        reduce growth in health spending so that health care becomes 
        more affordable for businesses, families, and government.
    (b) Table of Contents of Subdivision.--The 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.
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

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.
                   Part 3--Parity in Health Benefits

Sec. 461. Certain health related benefits applicable to spouses and 
                            dependents extended to eligible 
                            beneficiaries.
    (c) General Definitions.--Except as otherwise provided, in this 
subdivision:
            (1) Acceptable coverage.--The term ``acceptable coverage'' 
        has the meaning given such term in section 202(d)(2).
            (2) Basic plan.--The term ``basic plan'' has the meaning 
        given such term in section 203(c).
            (3) Commissioner.--The term ``Commissioner'' means the 
        Health Choices Commissioner established under section 141.
            (4) Cost-sharing.--The term ``cost-sharing'' includes 
        deductibles, coinsurance, copayments, and similar charges but 
        does not include premiums or any network payment differential 
        for covered services or spending for non-covered services.
            (5) Dependent.--The term ``dependent'' has the meaning 
        given such term by the Commissioner and includes a spouse.
            (6) Employment-based health plan.--The term ``employment-
        based health plan''--
                    (A) means a group health plan (as defined in 
                section 733(a)(1) of the Employee Retirement Income 
                Security Act of 1974); and
                    (B) includes such a plan that is the following:
                            (i) Federal, state, and tribal governmental 
                        plans.--A governmental plan (as defined in 
                        section 3(32) of the Employee Retirement Income 
                        Security Act of 1974), including a health 
                        benefits plan offered under chapter 89 of title 
                        5, United States Code.
                            (ii) Church plans.--A church plan (as 
                        defined in section 3(33) of the Employee 
                        Retirement Income Security Act of 1974).
            (7) Enhanced plan.--The term ``enhanced plan'' has the 
        meaning given such term in section 203(c).
            (8) Essential benefits package.--The term ``essential 
        benefits package'' is defined in section 122(a).
            (9) Family.--The term ``family'' means an individual and 
        includes the individual's dependents.
            (10) Federal poverty level; fpl.--The terms ``Federal 
        poverty level'' and ``FPL'' have the meaning given the term 
        ``poverty line'' in section 673(2) of the Community Services 
        Block Grant Act (42 U.S.C. 9902(2)), including any revision 
        required by such section.
            (11) Health benefits plan.--The terms ``health benefits 
        plan'' means health insurance coverage and an employment-based 
        health plan and includes the public health insurance option.
            (12) Health insurance coverage; health insurance issuer.--
        The terms ``health insurance coverage'' and ``health insurance 
        issuer'' have the meanings given such terms in section 2791 of 
        the Public Health Service Act.
            (13) Health insurance exchange.--The term ``Health 
        Insurance Exchange'' means the Health Insurance Exchange 
        established under section 201.
            (14) Medicaid.--The term ``Medicaid'' means a State plan 
        under title XIX of the Social Security Act (whether or not the 
        plan is operating under a waiver under section 1115 of such 
        Act).
            (15) Medicare.--The term ``Medicare'' means the health 
        insurance programs under title XVIII of the Social Security 
        Act.
            (16) Plan sponsor.--The term ``plan sponsor'' has the 
        meaning given such term in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974.
            (17) Plan year.--The term ``plan year'' means--
                    (A) with respect to an employment-based health 
                plan, a plan year as specified under such plan; or
                    (B) with respect to a health benefits plan other 
                than an employment-based health plan, a 12-month period 
                as specified by the Commissioner.
            (18) Premium plan; premium-plus plan.--The terms ``premium 
        plan'' and ``premium-plus plan'' have the meanings given such 
        terms in section 203(c).
            (19) QHBP offering entity.--The terms ``QHBP offering 
        entity'' means, with respect to a health benefits plan that 
        is--
                    (A) a group health plan (as defined, subject to 
                subsection (d), in section 733(a)(1) of the Employee 
                Retirement Income Security Act of 1974), the plan 
                sponsor in relation to such group health plan, except 
                that, in the case of a plan maintained jointly by 1 or 
                more employers and 1 or more employee organizations and 
                with respect to which an employer is the primary source 
                of financing, such term means such employer;
                    (B) health insurance coverage, the health insurance 
                issuer offering the coverage;
                    (C) the public health insurance option, the 
                Secretary of Health and Human Services;
                    (D) a non-Federal governmental plan (as defined in 
                section 2791(d) of the Public Health Service Act), the 
                State or political subdivision of a State (or agency or 
                instrumentality of such State or subdivision) which 
                establishes or maintains such plan; or
                    (E) a Federal governmental plan (as defined in 
                section 2791(d) of the Public Health Service Act), the 
                appropriate Federal official.
            (20) Qualified health benefits plan.--The term ``qualified 
        health benefits plan'' means a health benefits plan that meets 
        the requirements for such a plan under title I and includes the 
        public health insurance option.
            (21) Public health insurance option.--The term ``public 
        health insurance option'' means the public health insurance 
        option as provided under subtitle B of title II.
            (22) Service area; premium rating area.--The terms 
        ``service area'' and ``premium rating area'' mean with respect 
        to health insurance coverage--
                    (A) offered other than through the Health Insurance 
                Exchange, such an area as established by the QHBP 
                offering entity of such coverage in accordance with 
                applicable State law; and
                    (B) offered through the Health Insurance Exchange, 
                such an area as established by such entity in 
                accordance with applicable State law and applicable 
                rules of the Commissioner for Exchange-participating 
                health benefits plans.
            (23) State.--The term ``State'' means the 50 States and the 
        District of Columbia.
            (24) State medicaid agency.--The term ``State Medicaid 
        agency'' means, with respect to a Medicaid plan, the single 
        State agency responsible for administering such plan under 
        title XIX of the Social Security Act.
            (25) Y1, y2, etc..--The terms ``Y1'' , ``Y2'', ``Y3'', 
        ``Y4'', ``Y5'', and similar subsequently numbered terms, mean 
        2013 and subsequent years, respectively.

 TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                     Subtitle A--General Standards

SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.

    (a) Purpose.--The purpose of this title is to establish standards 
to ensure that new health insurance coverage and employment-based 
health plans that are offered meet standards guaranteeing access to 
affordable coverage, essential benefits, and other consumer 
protections.
    (b) Requirements for Qualified Health Benefits Plans.--On or after 
the first day of Y1, a health benefits plan shall not be a qualified 
health benefits plan under this subdivision unless the plan meets the 
applicable requirements of the following subtitles for the type of plan 
and plan year involved:
            (1) Subtitle B (relating to affordable coverage).
            (2) Subtitle C (relating to essential benefits).
            (3) Subtitle D (relating to consumer protection).
    (c) Terminology.--In this subdivision:
            (1) Enrollment in employment-based health plans.--An 
        individual shall be treated as being ``enrolled'' in an 
        employment-based health plan if the individual is a participant 
        or beneficiary (as such terms are defined in section 3(7) and 
        3(8), respectively, of the Employee Retirement Income Security 
        Act of 1974) in such plan.
            (2) Individual and group health insurance coverage.--The 
        terms ``individual health insurance coverage'' and ``group 
        health insurance coverage'' mean health insurance coverage 
        offered in the individual market or large or small group 
        market, respectively, as defined in section 2791 of the Public 
        Health Service Act.

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

    (a) Grandfathered Health Insurance Coverage Defined.--Subject to 
the succeeding provisions of this section, for purposes of establishing 
acceptable coverage under this subdivision, the term ``grandfathered 
health insurance coverage'' means individual health insurance coverage 
that is offered and in force and effect before the first day of Y1 if 
the following conditions are met:
            (1) Limitation on new enrollment.--
                    (A) In general.--Except as provided in this 
                paragraph, the individual health insurance issuer 
                offering such coverage does not enroll any individual 
                in such coverage if the first effective date of 
                coverage is on or after the first day of Y1.
                    (B) Dependent coverage permitted.--Subparagraph (A) 
                shall not affect the subsequent enrollment of a 
                dependent of an individual who is covered as of such 
                first day.
            (2) Limitation on changes in terms or conditions.--Subject 
        to paragraph (3) and except as required by law, the issuer does 
        not change any of its terms or conditions, including benefits 
        and cost-sharing, from those in effect as of the day before the 
        first day of Y1.
            (3) Restrictions on premium increases.--The issuer cannot 
        vary the percentage increase in the premium for a risk group of 
        enrollees in specific grandfathered health insurance coverage 
        without changing the premium for all enrollees in the same risk 
        group at the same rate, as specified by the Commissioner.
    (b) Grace Period for Current Employment-based Health Plans.--
            (1) Grace period.--
                    (A) In general.--The Commissioner shall establish a 
                grace period whereby, for plan years beginning after 
                the end of the 5-year period beginning with Y1, an 
                employment-based health plan in operation as of the day 
                before the first day of Y1 must meet the same 
                requirements as apply to a qualified health benefits 
                plan under section 101, including the essential benefit 
                package requirement under section 121.
                    (B) Exception for limited benefits plans.--
                Subparagraph (A) shall not apply to an employment-based 
                health plan in which the coverage consists only of one 
                or more of the following:
                            (i) Any coverage described in section 
                        3001(a)(1)(B)(ii)(IV) of division B of the 
                        American Recovery and Reinvestment Act of 2009 
                        (PL 111-5).
                            (ii) Excepted benefits (as defined in 
                        section 733(c) of the Employee Retirement 
                        Income Security Act of 1974), including 
                        coverage under a specified disease or illness 
                        policy described in paragraph (3)(A) of such 
                        section.
                            (iii) Such other limited benefits as the 
                        Commissioner may specify.
                In no case shall an employment-based health plan in 
                which the coverage consists only of one or more of the 
                coverage or benefits described in clauses (i) through 
                (iii) be treated as acceptable coverage under this 
                subdivision
            (2) Transitional treatment as acceptable coverage.--During 
        the grace period specified in paragraph (1)(A), an employment-
        based health plan that is described in such paragraph shall be 
        treated as acceptable coverage under this subdivision.
    (c) Limitation on Individual Health Insurance Coverage.--
            (1) In general.--Individual health insurance coverage that 
        is not grandfathered health insurance coverage under subsection 
        (a) may only be offered on or after the first day of Y1 as an 
        Exchange-participating health benefits plan.
            (2) Separate, excepted coverage permitted.--Excepted 
        benefits (as defined in section 2791(c) of the Public Health 
        Service Act) are not included within the definition of health 
        insurance coverage. Nothing in paragraph (1) shall prevent the 
        offering, other than through the Health Insurance Exchange, of 
        excepted benefits so long as it is offered and priced 
        separately from health insurance coverage.

    Subtitle B--Standards Guaranteeing Access to Affordable Coverage

SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.

    A qualified health benefits plan may not impose any pre-existing 
condition exclusion (as defined in section 2701(b)(1)(A) of the Public 
Health Service Act) or otherwise impose any limit or condition on the 
coverage under the plan with respect to an individual or dependent 
based on any health status-related factors (as defined in section 
2791(d)(9) of the Public Health Service Act) in relation to the 
individual or dependent.

SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.

    The requirements of sections 2711 (other than subsections (c) and 
(e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and 
subsection (e)) of the Public Health Service Act, relating to 
guaranteed availability and renewability of health insurance coverage, 
shall apply to individuals and employers in all individual and group 
health insurance coverage, whether offered to individuals or employers 
through the Health Insurance Exchange, through any employment-based 
health plan, or otherwise, in the same manner as such sections apply to 
employers and health insurance coverage offered in the small group 
market, except that such section 2712(b)(1) shall apply only if, before 
nonrenewal or discontinuation of coverage, the issuer has provided the 
enrollee with notice of non-payment of premiums and there is a grace 
period during which the enrollees has an opportunity to correct such 
nonpayment. Rescissions of such coverage shall be prohibited except in 
cases of fraud as defined in sections 2712(b)(2) of such Act.

SEC. 113. INSURANCE RATING RULES.

    (a) In General.--The premium rate charged for an insured qualified 
health benefits plan may not vary except as follows:
            (1) Limited age variation permitted.--By age (within such 
        age categories as the Commissioner shall specify) so long as 
        the ratio of the highest such premium to the lowest such 
        premium does not exceed the ratio of 2 to 1.
            (2) By area.--By premium rating area (as permitted by State 
        insurance regulators or, in the case of Exchange-participating 
        health benefits plans, as specified by the Commissioner in 
        consultation with such regulators).
            (3) By family enrollment.--By family enrollment (such as 
        variations within categories and compositions of families) so 
        long as the ratio of the premium for family enrollment (or 
        enrollments) to the premium for individual enrollment is 
        uniform, as specified under State law and consistent with rules 
        of the Commissioner.
    (b) Study and Reports.--
            (1) Study.--The Commissioner, in coordination with the 
        Secretary of Health and Human Services and the Secretary of 
        Labor, shall conduct a study of the large group insured and 
        self-insured employer health care markets. Such study shall 
        examine the following:
                    (A) The types of employers by key characteristics, 
                including size, that purchase insured products versus 
                those that self-insure.
                    (B) The similarities and differences between 
                typical insured and self-insured health plans.
                    (C) The financial solvency and capital reserve 
                levels of employers that self-insure by employer size.
                    (D) The risk of self-insured employers not being 
                able to pay obligations or otherwise becoming 
                financially insolvent.
                    (E) The extent to which rating rules are likely to 
                cause adverse selection in the large group market or to 
                encourage small and mid size employers to self-insure
            (2) Reports.--Not later than 18 months after the date of 
        the enactment of this Act, the Commissioner shall submit to 
        Congress and the applicable agencies a report on the study 
        conducted under paragraph (1). Such report shall include any 
        recommendations the Commissioner deems appropriate to ensure 
        that the law does not provide incentives for small and mid-size 
        employers to self-insure or create adverse selection in the 
        risk pools of large group insurers and self-insured employers. 
        Not later than 18 months after the first day of Y1, the 
        Commissioner shall submit to Congress and the applicable 
        agencies an updated report on such study, including updates on 
        such recommendations.

SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND 
              SUBSTANCE ABUSE DISORDER BENEFITS.

    (a) Nondiscrimination in Benefits.--A qualified health benefits 
plan shall comply with standards established by the Commissioner to 
prohibit discrimination in health benefits or benefit structures for 
qualifying health benefits plans, building from sections 702 of 
Employee Retirement Income Security Act of 1974, 2702 of the Public 
Health Service Act, and section 9802 of the Internal Revenue Code of 
1986.
    (b) Parity in Mental Health and Substance Abuse Disorder 
Benefits.--To the extent such provisions are not superceded by or 
inconsistent with subtitle C, the provisions of section 2705 (other 
than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public 
Health Service Act shall apply to a qualified health benefits plan, 
regardless of whether it is offered in the individual or group market, 
in the same manner as such provisions apply to health insurance 
coverage offered in the large group market.

SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

    (a) In General.--A qualified health benefits plan that uses a 
provider network for items and services shall meet such standards 
respecting provider networks as the Commissioner may establish to 
assure the adequacy of such networks in ensuring enrollee access to 
such items and services and transparency in the cost-sharing 
differentials between in-network coverage and out-of-network coverage.
    (b) Provider Network Defined.--In this subdivision, the term 
``provider network'' means the providers with respect to which covered 
benefits, treatments, and services are available under a health 
benefits plan.

SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

    (a) In General.--A qualified health benefits plan shall meet a 
medical loss ratio as defined by the Commissioner. For any plan year in 
which the qualified health benefits plan does not meet such medical 
loss ratio, QHBP offering entity shall provide in a manner specified by 
the Commissioner for rebates to enrollees of payment sufficient to meet 
such loss ratio.
    (b) Building on Interim Rules.--In implementing subsection (a), the 
Commissioner shall build on the definition and methodology developed by 
the Secretary of Health and Human Services under the amendments made by 
section 161 for determining how to calculate the medical loss ratio. 
Such methodology shall be set at the highest level medical loss ratio 
possible that is designed to ensure adequate participation by QHBP 
offering entities, competition in the health insurance market in and 
out of the Health Insurance Exchange, and value for consumers so that 
their premiums are used for services.

    Subtitle C--Standards Guaranteeing Access to Essential Benefits

SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

    (a) In General.--A qualified health benefits plan shall provide 
coverage that at least meets the benefit standards adopted under 
section 124 for the essential benefits package described in section 122 
for the plan year involved.
    (b) Choice of Coverage.--
            (1) Non-exchange-participating health benefits plans.--In 
        the case of a qualified health benefits plan that is not an 
        Exchange-participating health benefits plan, such plan may 
        offer such coverage in addition to the essential benefits 
        package as the QHBP offering entity may specify.
            (2) Exchange-participating health benefits plans.--In the 
        case of an Exchange-participating health benefits plan, such 
        plan is required under section 203 to provide specified levels 
        of benefits and, in the case of a plan offering a premium-plus 
        level of benefits, provide additional benefits.
            (3) Continuation of offering of separate excepted benefits 
        coverage.--Nothing in this subdivision shall be construed as 
        affecting the offering of health benefits in the form of 
        excepted benefits (described in section 102(b)(1)(B)(ii)) if 
        such benefits are offered under a separate policy, contract, or 
        certificate of insurance.
    (c) No Restrictions on Coverage Unrelated to Clinical 
Appropriateness.--A qualified health benefits plan may not impose any 
restriction (other than cost-sharing) unrelated to clinical 
appropriateness on the coverage of the health care items and services.

SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

    (a) In General.--In this subdivision, the term ``essential benefits 
package'' means health benefits coverage, consistent with standards 
adopted under section 124 to ensure the provision of quality health 
care and financial security, that--
            (1) provides payment for the items and services described 
        in subsection (b) in accordance with generally accepted 
        standards of medical or other appropriate clinical or 
        professional practice;
            (2) limits cost-sharing for such covered health care items 
        and services in accordance with such benefit standards, 
        consistent with subsection (c);
            (3) does not impose any annual or lifetime limit on the 
        coverage of covered health care items and services;
            (4) complies with section 115(a) (relating to network 
        adequacy); and
            (5) is equivalent, as certified by Office of the Actuary of 
        the Centers for Medicare & Medicaid Services, to the average 
        prevailing employer-sponsored coverage.
    (b) Minimum Services to Be Covered.--The items and services 
described in this subsection are the following:
            (1) Hospitalization.
            (2) Outpatient hospital and outpatient clinic services, 
        including emergency department services.
            (3) Professional services of physicians and other health 
        professionals.
            (4) Such services, equipment, and supplies incident to the 
        services of a physician's or a health professional's delivery 
        of care in institutional settings, physician offices, patients' 
        homes or place of residence, or other settings, as appropriate.
            (5) Prescription drugs.
            (6) Rehabilitative and habilitative services.
            (7) Mental health and substance use disorder services.
            (8) Preventive services, including those services 
        recommended with a grade of A or B by the Task Force on 
        Clinical Preventive Services and those vaccines recommended for 
        use by the Director of the Centers for Disease Control and 
        Prevention.
            (9) Maternity care.
            (10) Well baby and well child care and oral health, vision, 
        and hearing services, equipment, and supplies at least for 
        children under 21 years of age.
    (c) Requirements Relating to Cost-sharing and Minimum Actuarial 
Value.--
            (1) No cost-sharing for preventive services.--There shall 
        be no cost-sharing under the essential benefits package for 
        preventive items and services (as specified under the benefit 
        standards), including well baby and well child care.
            (2) Annual limitation.--
                    (A) Annual limitation.--The cost-sharing incurred 
                under the essential benefits package with respect to an 
                individual (or family) for a year does not exceed the 
                applicable level specified in subparagraph (B).
                    (B) Applicable level.--The applicable level 
                specified in this subparagraph for Y1 is $5,000 for an 
                individual and $10,000 for a family. Such levels shall 
                be increased (rounded to the nearest $100) for each 
                subsequent year by the annual percentage increase in 
                the Consumer Price Index (United States city average) 
                applicable to such year.
                    (C) Use of copayments.--In establishing cost-
                sharing levels for basic, enhanced, and premium plans 
                under this subsection, the Secretary shall, to the 
                maximum extent possible, use only copayments and not 
                coinsurance.
            (3) Minimum actuarial value.--
                    (A) In general.--The cost-sharing under the 
                essential benefits package shall be designed to provide 
                a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 
                approximately 70 percent of the full actuarial value of 
                the benefits provided under the reference benefits 
                package described in subparagraph (B).
                    (B) Reference benefits package described.--The 
                reference benefits package described in this 
                subparagraph is the essential benefits package if there 
                were no cost-sharing imposed.

SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

    (a) Establishment.--
            (1) In general.--There is established a private-public 
        advisory committee which shall be a panel of medical and other 
        experts to be known as the Health Benefits Advisory Committee 
        to recommend covered benefits and essential, enhanced, and 
        premium plans.
            (2) Chair.--The Surgeon General shall be a member and the 
        chair of the Health Benefits Advisory Committee.
            (3) Membership.--The Health Benefits Advisory Committee 
        shall be composed of the following members, in addition to the 
        Surgeon General:
                    (A) 9 members who are not Federal employees or 
                officers and who are appointed by the President.
                    (B) 9 members who are not Federal employees or 
                officers and who are appointed by the Comptroller 
                General of the United States in a manner similar to the 
                manner in which the Comptroller General appoints 
                members to the Medicare Payment Advisory Commission 
                under section 1805(c) of the Social Security Act.
                    (C) Such even number of members (not to exceed 8) 
                who are Federal employees and officers, as the 
                President may appoint.
        Such initial appointments shall be made not later than 60 days 
        after the date of the enactment of this Act.
            (4) Terms.--Each member of the Health Benefits Advisory 
        Committee shall serve a 3-year term on the Committee, except 
        that the terms of the initial members shall be adjusted in 
        order to provide for a staggered term of appointment for all 
        such members.
            (5) Participation.--The membership of the Health Benefits 
        Advisory Committee shall at least reflect providers, consumer 
        representatives, employers, labor, health insurance issuers, 
        experts in health care financing and delivery, experts in 
        racial and ethnic disparities, experts in care for those with 
        disabilities, representatives of relevant governmental 
        agencies. and at least one practicing physician or other health 
        professional and an expert on children's health and shall 
        represent a balance among various sectors of the health care 
        system so that no single sector unduly influences the 
        recommendations of such Committee.
    (b) Duties.--
            (1) Recommendations on benefit standards.--The Health 
        Benefits Advisory Committee shall recommend to the Secretary of 
        Health and Human Services (in this subtitle referred to as the 
        ``Secretary'') benefit standards (as defined in paragraph (4)), 
        and periodic updates to such standards. In developing such 
        recommendations, the Committee shall take into account 
        innovation in health care and consider how such standards could 
        reduce health disparities.
            (2) Deadline.--The Health Benefits Advisory Committee shall 
        recommend initial benefit standards to the Secretary not later 
        than 1 year after the date of the enactment of this Act.
            (3) Public input.--The Health Benefits Advisory Committee 
        shall allow for public input as a part of developing 
        recommendations under this subsection.
            (4) Benefit standards defined.--In this subtitle, the term 
        ``benefit standards'' means standards respecting--
                    (A) the essential benefits package described in 
                section 122, including categories of covered 
                treatments, items and services within benefit classes, 
                and cost-sharing; and
                    (B) the cost-sharing levels for enhanced plans and 
                premium plans (as provided under section 203(c)) 
                consistent with paragraph (5).
            (5) Levels of cost-sharing for enhanced and premium 
        plans.--
                    (A) Enhanced plan.--The level of cost-sharing for 
                enhanced plans shall be designed so that such plans 
                have benefits that are actuarially equivalent to 
                approximately 85 percent of the actuarial value of the 
                benefits provided under the reference benefits package 
                described in section 122(c)(3)(B).
                    (B) Premium plan.--The level of cost-sharing for 
                premium plans shall be designed so that such plans have 
                benefits that are actuarially equivalent to 
                approximately 95 percent of the actuarial value of the 
                benefits provided under the reference benefits package 
                described in section 122(c)(3)(B).
    (c) Operations.--
            (1) Per diem pay.--Each member of the Health Benefits 
        Advisory Committee shall receive travel expenses, including per 
        diem in accordance with applicable provisions under subchapter 
        I of chapter 57 of title 5, United States Code, and shall 
        otherwise serve without additional pay.
            (2) Members not treated as federal employees.--Members of 
        the Health Benefits Advisory Committee shall not be considered 
        employees of the Federal government solely by reason of any 
        service on the Committee.
            (3) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.), other than section 14, shall apply to the 
        Health Benefits Advisory Committee.
    (d) Publication.--The Secretary shall provide for publication in 
the Federal Register and the posting on the Internet website of the 
Department of Health and Human Services of all recommendations made by 
the Health Benefits Advisory Committee under this section.

SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT 
              STANDARDS.

    (a) Process for Adoption of Recommendations.--
            (1) Review of recommended standards.--Not later than 45 
        days after the date of receipt of benefit standards recommended 
        under section 123 (including such standards as modified under 
        paragraph (2)(B)), the Secretary shall review such standards 
        and shall determine whether to propose adoption of such 
        standards as a package.
            (2) Determination to adopt standards.--If the Secretary 
        determines--
                    (A) to propose adoption of benefit standards so 
                recommended as a package, the Secretary shall, by 
                regulation under section 553 of title 5, United States 
                Code, propose adoption such standards; or
                    (B) not to propose adoption of such standards as a 
                package, the Secretary shall notify the Health Benefits 
                Advisory Committee in writing of such determination and 
                the reasons for not proposing the adoption of such 
                recommendation and provide the Committee with a further 
                opportunity to modify its previous recommendations and 
                submit new recommendations to the Secretary on a timely 
                basis.
            (3) Contingency.--If, because of the application of 
        paragraph (2)(B), the Secretary would otherwise be unable to 
        propose initial adoption of such recommended standards by the 
        deadline specified in subsection (b)(1), the Secretary shall, 
        by regulation under section 553 of title 5, United States Code, 
        propose adoption of initial benefit standards by such deadline.
            (4) Publication.--The Secretary shall provide for 
        publication in the Federal Register of all determinations made 
        by the Secretary under this subsection.
    (b) Adoption of Standards.--
            (1) Initial standards.--Not later than 18 months after the 
        date of the enactment of this Act, the Secretary shall, through 
        the rulemaking process consistent with subsection (a), adopt an 
        initial set of benefit standards.
            (2) Periodic updating standards.--Under subsection (a), the 
        Secretary shall provide for the periodic updating of the 
        benefit standards previously adopted under this section.
            (3) Requirement.--The Secretary may not adopt any benefit 
        standards for an essential benefits package or for level of 
        cost-sharing that are inconsistent with the requirements for 
        such a package or level under sections 122 and 123(b)(5).

              Subtitle D--Additional Consumer Protections

SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.

    The Commissioner shall establish uniform marketing standards that 
all insured QHBP offering entities shall meet.

SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.

    (a) In General.--A QHBP offering entity shall provide for timely 
grievance and appeals mechanisms that the Commissioner shall establish.
    (b) Internal Claims and Appeals Process.--Under a qualified health 
benefits plan the QHBP offering entity shall provide an internal claims 
and appeals process that initially incorporates the claims and appeals 
procedures (including urgent claims) set forth at section 2560.503-1 of 
title 29, Code of Federal Regulations, as published on November 21, 
2000 (65 Fed. Reg. 70246) and shall update such process in accordance 
with any standards that the Commissioner may establish.
    (c) External Review Process.--
            (1) In general.--The Commissioner shall establish an 
        external review process (including procedures for expedited 
        reviews of urgent claims) that provides for an impartial, 
        independent, and de novo review of denied claims under this 
        subdivision.
            (2) Requiring fair grievance and appeals mechanisms.--A 
        determination made, with respect to a qualified health benefits 
        plan offered by a QHBP offering entity, under the external 
        review process established under this subsection shall be 
        binding on the plan and the entity.
    (d) Construction.--Nothing in this section shall be construed as 
affecting the availability of judicial review under State law for 
adverse decisions under subsection (b) or (c), subject to section 151.

SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

    (a) Accurate and Timely Disclosure.--
            (1) In general.--A qualified health benefits plan shall 
        comply with standards established by the Commissioner for the 
        accurate and timely disclosure of plan documents, plan terms 
        and conditions, claims payment policies and practices, periodic 
        financial disclosure, data on enrollment, data on 
        disenrollment, data on the number of claims denials, data on 
        rating practices, information on cost-sharing and payments with 
        respect to any out-of-network coverage, and other information 
        as determined appropriate by the Commissioner. The Commissioner 
        shall require that such disclosure be provided in plain 
        language.
            (2) Plain language.--In this subsection, the term ``plain 
        language'' means language that the intended audience, including 
        individuals with limited English proficiency, can readily 
        understand and use because that language is clean, concise, 
        well-organized, and follows other best practices of plain 
        language writing.
            (3) Guidance.--The Commissioner shall develop and issue 
        guidance on best practices of plain language writing.
    (b) Contracting Reimbursement.--A qualified health benefits plan 
shall comply with standards established by the Commissioner to ensure 
transparency to each health care provider relating to reimbursement 
arrangements between such plan and such provider.
    (c) Advance Notice of Plan Changes.--A change in a qualified health 
benefits plan shall not be made without such reasonable and timely 
advance notice to enrollees of such change.

SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED 
              THROUGH THE HEALTH INSURANCE EXCHANGE.

    The requirements of the previous provisions of this subtitle shall 
apply to qualified health benefits plans that are not being offered 
through the Health Insurance Exchange only to the extent specified by 
the Commissioner.

SEC. 135. TIMELY PAYMENT OF CLAIMS.

    A QHBP offering entity shall comply with the requirements of 
section 1857(f) of the Social Security Act with respect to a qualified 
health benefits plan it offers in the same manner an Medicare Advantage 
organization is required to comply with such requirements with respect 
to a Medicare Advantage plan it offers under part C of Medicare.

SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF 
              BENEFITS.

    The Commissioner shall establish standards for the coordination and 
subrogation of benefits and reimbursement of payments in cases 
involving individuals and multiple plan coverage.

SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.

    A QHBP offering entity is required to comply with standards for 
electronic financial and administrative transactions under section 
1173A of the Social Security Act, added by section 163(a).

                         Subtitle E--Governance

SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.

    (a) In General.--There is hereby established, as an independent 
agency in the executive branch of the Government, a Health Choices 
Administration (in this subdivision referred to as the 
``Administration'').
    (b) Commissioner.--
            (1) In general.--The Administration shall be headed by a 
        Health Choices Commissioner (in this subdivision referred to as 
        the ``Commissioner'') who shall be appointed by the President, 
        by and with the advice and consent of the Senate.
            (2) Compensation; etc.--The provisions of paragraphs (2), 
        (5), and (7) of subsection (a) (relating to compensation, 
        terms, general powers, rulemaking, and delegation) of section 
        702 of the Social Security Act (42 U.S.C. 902) shall apply to 
        the Commissioner and the Administration in the same manner as 
        such provisions apply to the Commissioner of Social Security 
        and the Social Security Administration.

SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.

    (a) Duties.--The Commissioner is responsible for carrying out the 
following functions under this subdivision:
            (1) Qualified plan standards.--The establishment of 
        qualified health benefits plan standards under this title, 
        including the enforcement of such standards in coordination 
        with State insurance regulators and the Secretaries of Labor 
        and the Treasury.
            (2) Health insurance exchange.--The establishment and 
        operation of a Health Insurance Exchange under subtitle A of 
        title II.
            (3) Individual affordability credits.--The administration 
        of individual affordability credits under subtitle C of title 
        II, including determination of eligibility for such credits.
            (4) Additional functions.--Such additional functions as may 
        be specified in this subdivision.
    (b) Promoting Accountability.--
            (1) In general.--The Commissioner shall undertake 
        activities in accordance with this subtitle to promote 
        accountability of QHBP offering entities in meeting Federal 
        health insurance requirements, regardless of whether such 
        accountability is with respect to qualified health benefits 
        plans offered through the Health Insurance Exchange or outside 
        of such Exchange.
            (2) Compliance examination and audits.--
                    (A) In general.--The commissioner shall, in 
                coordination with States, conduct audits of qualified 
                health benefits plan compliance with Federal 
                requirements.   Such audits may include random 
                compliance audits and targeted audits in response to 
                complaints or other suspected non-compliance.
                    (B) Recoupment of costs in connection with 
                examination and audits.--The Commissioner is authorized 
                to recoup from qualified health benefits plans 
                reimbursement for the costs of such examinations and 
                audit of such QHBP offering entities.
    (c) Data Collection.--The Commissioner shall collect data for 
purposes of carrying out the Commissioner's duties, including for 
purposes of promoting quality and value, protecting consumers, and 
addressing disparities in health and health care and may share such 
data with the Secretary of Health and Human Services.
    (d) Sanctions Authority.--
            (1) In general.--In the case that the Commissioner 
        determines that a QHBP offering entity violates a requirement 
        of this title, the Commissioner may, in coordination with State 
        insurance regulators and the Secretary of Labor, provide, in 
        addition to any other remedies authorized by law, for any of 
        the remedies described in paragraph (2).
            (2) Remedies.--The remedies described in this paragraph, 
        with respect to a qualified health benefits plan offered by a 
        QHBP offering entity, are--
                    (A) civil money penalties of not more than the 
                amount that would be applicable under similar 
                circumstances for similar violations under section 
                1857(g) of the Social Security Act;
                    (B) suspension of enrollment of individuals under 
                such plan after the date the Commissioner notifies the 
                entity of a determination under paragraph (1) and until 
                the Commissioner is satisfied that the basis for such 
                determination has been corrected and is not likely to 
                recur;
                    (C) in the case of an Exchange-participating health 
                benefits plan, suspension of payment to the entity 
                under the Health Insurance Exchange for individuals 
                enrolled in such plan after the date the Commissioner 
                notifies the entity of a determination under paragraph 
                (1) and until the Secretary is satisfied that the basis 
                for such determination has been corrected and is not 
                likely to recur; or
                    (D) working with State insurance regulators to 
                terminate plans for repeated failure by the offering 
                entity to meet the requirements of this title.
    (e) Standard Definitions of Insurance and Medical Terms.--The 
Commissioner shall provide for the development of standards for the 
definitions of terms used in health insurance coverage, including 
insurance-related terms.
    (f) Efficiency in Administration.--The Commissioner shall issue 
regulations for the effective and efficient administration of the 
Health Insurance Exchange and affordability credits under subtitle C, 
including, with respect to the determination of eligibility for 
affordability credits, the use of personnel who are employed in 
accordance with the requirements of title 5, United States Code, to 
carry out the duties of the Commissioner or, in the case of sections 
208 and 241(b)(2), the use of State personnel who are employed in 
accordance with standards prescribed by the Office of Personnel 
Management pursuant to section 208 of the Intergovernmental Personnel 
Act of 1970 (42 U.S.C. 4728).

SEC. 143. CONSULTATION AND COORDINATION.

    (a) Consultation.--In carrying out the Commissioner's duties under 
this subdivision, the Commissioner, as appropriate, shall consult with 
at least with the following:
            (1) The National Association of Insurance Commissioners, 
        State attorneys general, and State insurance regulators, 
        including concerning the standards for insured qualified health 
        benefits plans under this title and enforcement of such 
        standards.
            (2) Appropriate State agencies, specifically concerning the 
        administration of individual affordability credits under 
        subtitle C of title II and the offering of Exchange-
        participating health benefits plans, to Medicaid eligible 
        individuals under subtitle A of such title.
            (3) Other appropriate Federal agencies.
            (4) Indian tribes and tribal organizations.
            (5) The National Association of Insurance Commissioners for 
        purposes of using model guidelines established by such 
        association for purposes of subtitles B and D.
    (b) Coordination.--
            (1) In general.--In carrying out the functions of the 
        Commissioner, including with respect to the enforcement of the 
        provisions of this subdivision, the Commissioner shall work in 
        coordination with existing Federal and State entities to the 
        maximum extent feasible consistent with this subdivision and in 
        a manner that prevents conflicts of interest in duties and 
        ensures effective enforcement.
            (2) Uniform standards.--The Commissioner, in coordination 
        with such entities, shall seek to achieve uniform standards 
        that adequately protect consumers in a manner that does not 
        unreasonably affect employers and insurers.

SEC. 144. HEALTH INSURANCE OMBUDSMAN.

    (a) In General.--The Commissioner shall appoint within the Health 
Choices Administration a Qualified Health Benefits Plan Ombudsman who 
shall have expertise and experience in the fields of health care and 
education of (and assistance to) individuals.
    (b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in 
a linguistically appropriate manner--
            (1) receive complaints, grievances, and requests for 
        information submitted by individuals;
            (2) provide assistance with respect to complaints, 
        grievances, and requests referred to in paragraph (1), 
        including--
                    (A) helping individuals determine the relevant 
                information needed to seek an appeal of a decision or 
                determination;
                    (B) assistance to such individuals with any 
                problems arising from disenrollment from such a plan;
                    (C) assistance to such individuals in choosing a 
                qualified health benefits plan in which to enroll; and
                    (D) assistance to such individuals in presenting 
                information under subtitle C (relating to affordability 
                credits); and
            (3) submit annual reports to Congress and the Commissioner 
        that describe the activities of the Ombudsman and that include 
        such recommendations for improvement in the administration of 
        this subdivision as the Ombudsman determines appropriate. The 
        Ombudsman shall not serve as an advocate for any increases in 
        payments or new coverage of services, but may identify issues 
        and problems in payment or coverage policies.

       Subtitle F--Relation to Other Requirements; Miscellaneous

SEC. 151. RELATION TO OTHER REQUIREMENTS.

    (a) Coverage Not Offered Through Exchange.--
            (1) In general.--In the case of health insurance coverage 
        not offered through the Health Insurance Exchange (whether or 
        not offered in connection with an employment-based health 
        plan), and in the case of employment-based health plans, the 
        requirements of this title do not supercede any requirements 
        applicable under titles XXII and XXVII of the Public Health 
        Service Act, parts 6 and 7 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974, or State law, 
        except insofar as such requirements prevent the application of 
        a requirement of this subdivision, as determined by the 
        Commissioner.
            (2) Construction.--Nothing in paragraph (1) shall be 
        construed as affecting the application of section 514 of the 
        Employee Retirement Income Security Act of 1974.
    (b) Coverage Offered Through Exchange.--
            (1) In general.--In the case of health insurance coverage 
        offered through the Health Insurance Exchange--
                    (A) the requirements of this title do not supercede 
                any requirements (including requirements relating to 
                genetic information nondiscrimination and mental 
                health) applicable under title XXVII of the Public 
                Health Service Act or under State law, except insofar 
                as such requirements prevent the application of a 
                requirement of this subdivision, as determined by the 
                Commissioner; and
                    (B) individual rights and remedies under State laws 
                shall apply.
            (2) Construction.--In the case of coverage described in 
        paragraph (1), nothing in such paragraph shall be construed as 
        preventing the application of rights and remedies under State 
        laws with respect to any requirement referred to in paragraph 
        (1)(A).

SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.

    (a) In General.--Except as otherwise explicitly permitted by this 
division and by subsequent regulations consistent with this division, 
all health care and related services (including insurance coverage and 
public health activities) covered by this division shall be provided 
without regard to personal characteristics extraneous to the provision 
of high quality health care or related services.
    (b) Implementation.--To implement the requirement set forth in 
subsection (a), the Secretary of Health and Human Services shall, not 
later than 18 months after the date of the enactment of this Act, 
promulgate such regulations as are necessary or appropriate to insure 
that all health care and related services (including insurance coverage 
and public health activities) covered by this division are provided 
(whether directly or through contractual, licensing, or other 
arrangements) without regard to personal characteristics extraneous to 
the provision of high quality health care or related services.

SEC. 153. WHISTLEBLOWER PROTECTION.

    (a) Retaliation Prohibited.--No employer may discharge any employee 
or otherwise discriminate against any employee with respect to his 
compensation, terms, conditions, or other privileges of employment 
because the employee (or any person acting pursuant to a request of the 
employee)--
            (1) provided, caused to be provided, or is about to provide 
        or cause to be provided to the employer, the Federal 
        Government, or the attorney general of a State information 
        relating to any violation of, or any act or omission the 
        employee reasonably believes to be a violation of any provision 
        of this division or any order, rule, or regulation promulgated 
        under this division;
            (2) testified or is about to testify in a proceeding 
        concerning such violation;
            (3) assisted or participated or is about to assist or 
        participate in such a proceeding; or
            (4) objected to, or refused to participate in, any 
        activity, policy, practice, or assigned task that the employee 
        (or other such person) reasonably believed to be in violation 
        of any provision of this division or any order, rule, or 
        regulation promulgated under this division.
    (b) Enforcement Action.--An employee covered by this section who 
alleges discrimination by an employer in violation of subsection (a) 
may bring an action governed by the rules, procedures, legal burdens of 
proof, and remedies set forth in section 40(b) of the Consumer Product 
Safety Act (15 U.S.C. 2087(b)).
    (c) Employer Defined.--As used in this section, the term 
``employer'' means any person (including one or more individuals, 
partnerships, associations, corporations, trusts, professional 
membership organization including a certification, disciplinary, or 
other professional body, unincorporated organizations, nongovernmental 
organizations, or trustees) engaged in profit or nonprofit business or 
industry whose activities are governed by this division, and any agent, 
contractor, subcontractor, grantee, or consultant of such person.
    (d) Rule of Construction.--The rule of construction set forth in 
section 20109(h) of title 49, United States Code, shall also apply to 
this section.

SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

    Nothing in this subdivision shall be construed to alter of 
supercede any statutory or other obligation to engage in collective 
bargaining over the terms and conditions of employment related to 
health care.

SEC. 155. SEVERABILITY.

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

                     Subtitle G--Early Investments

SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

    (a) Group Health Insurance Coverage.--Title XXVII of the Public 
Health Service Act is amended by inserting after section 2713 the 
following new section:

``SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

    ``(a) In General.--Each health insurance issuer that offers health 
insurance coverage in the small or large group market shall provide 
that for any plan year in which the coverage has a medical loss ratio 
below a level specified by the Secretary, the issuer shall provide in a 
manner specified by the Secretary for rebates to enrollees of payment 
sufficient to meet such loss ratio. Such methodology shall be set at 
the highest level medical loss ratio possible that is designed to 
ensure adequate participation by issuers, competition in the health 
insurance market, and value for consumers so that their premiums are 
used for services.
    ``(b) Uniform Definitions.--The Secretary shall establish a uniform 
definition of medical loss ratio and methodology for determining how to 
calculate the medical loss ratio. Such methodology shall be designed to 
take into account the special circumstances of smaller plans, different 
types of plans, and newer plans.''.
    (b) Individual Health Insurance Coverage.--Such title is further 
amended by inserting after section 2753 the following new section:

``SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

    ``The provisions of section 2714 shall apply to health insurance 
coverage offered in the individual market in the same manner as such 
provisions apply to health insurance coverage offered in the small or 
large group market.''.
    (c) Immediate Implementation.--The amendments made by this section 
shall apply in the group and individual market for plan years beginning 
on or after January 1, 2011.

SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.

    (a) Clarification Regarding Application of Guaranteed Renewability 
of Individual Health Insurance Coverage.--Section 2742 of the Public 
Health Service Act (42 U.S.C. 300gg-42) is amended--
            (1) in its heading, by inserting ``and continuation in 
        force, including prohibition of rescission,'' after 
        ``guaranteed renewability''; and
            (2) in subsection (a), by inserting ``, including without 
        rescission,'' after ``continue in force''.
    (b) Secretarial Guidance Regarding Rescissions.--Section 2742 of 
such Act (42 U.S.C. 300gg-42) is amended by adding at the end the 
following:
    ``(f) Rescission.--A health insurance issuer may rescind health 
insurance coverage only upon clear and convincing evidence of fraud 
described in subsection (b)(2). The Secretary, no later than July 1, 
2010, shall issue guidance implementing this requirement, including 
procedures for independent, external third party review.''.
    (c) Opportunity for Independent, External Third Party Review in 
Certain Cases.--Subpart 1 of part B of title XXVII of such Act (42 
U.S.C. 300gg-41 et seq.) is amended by adding at the end the following:

``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW 
              IN CASES OF RESCISSION.

    ``(a) Notice and Review Right.--If a health insurance issuer 
determines to rescind health insurance coverage for an individual in 
the individual market, before such rescission may take effect the 
issuer shall provide the individual with notice of such proposed 
rescission and an opportunity for a review of such determination by an 
independent, external third party under procedures specified by the 
Secretary under section 2742(f).
    ``(b) Independent Determination.--If the individual requests such 
review by an independent, external third party of a rescission of 
health insurance coverage, the coverage shall remain in effect until 
such third party determines that the coverage may be rescinded under 
the guidance issued by the Secretary under section 2742(f).''.
    (d) Effective Date.--The amendments made by this section shall 
apply on and after October 1, 2010, with respect to health insurance 
coverage issued before, on, or after such date.

SEC. 163. ADMINISTRATIVE SIMPLIFICATION.

    (a) Standardizing Electronic Administrative Transactions.--
            (1) In general.--Part C of title XI of the Social Security 
        Act (42 U.S.C. 1320d et seq.) is amended by inserting after 
        section 1173 the following new section:

``SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

    ``(a) Standards for Financial and Administrative Transactions.--
            ``(1) In general.--The Secretary shall adopt and regularly 
        update standards consistent with the goals described in 
        paragraph (2).
            ``(2) Goals for financial and administrative 
        transactions.--The goals for standards under paragraph (1) are 
        that such standards shall--
                    ``(A) be unique with no conflicting or redundant 
                standards;
                    ``(B) be authoritative, permitting no additions or 
                constraints for electronic transactions, including 
                companion guides;
                    ``(C) be comprehensive, efficient and robust, 
                requiring minimal augmentation by paper transactions or 
                clarification by further communications;
                    ``(D) enable the real-time (or near real-time) 
                determination of an individual's financial 
                responsibility at the point of service and, to the 
                extent possible, prior to service, including whether 
                the individual is eligible for a specific service with 
                a specific physician at a specific facility, which may 
                include utilization of a machine-readable health plan 
                beneficiary identification card;
                    ``(E) enable, where feasible, near real-time 
                adjudication of claims;
                    ``(F) provide for timely acknowledgment, response, 
                and status reporting applicable to any electronic 
                transaction deemed appropriate by the Secretary;
                    ``(G) describe all data elements (such as reason 
                and remark codes) in unambiguous terms, not permit 
                optional fields, require that data elements be either 
                required or conditioned upon set values in other 
                fields, and prohibit additional conditions; and
                    ``(H) harmonize all common data elements across 
                administrative and clinical transaction standards.
            ``(3) Time for adoption.--Not later than 2 years after the 
        date of implementation of the X12 Version 5010 transaction 
        standards implemented under this part, the Secretary shall 
        adopt standards under this section.
            ``(4) Requirements for specific standards.--The standards 
        under this section shall be developed, adopted, and enforced so 
        as to--
                    ``(A) clarify, refine, complete, and expand, as 
                needed, the standards required under section 1173;
                    ``(B) require paper versions of standardized 
                transactions to comply with the same standards as to 
                data content such that a fully compliant, equivalent 
                electronic transaction can be populated from the data 
                from a paper version;
                    ``(C) enable electronic funds transfers, in order 
                to allow automated reconciliation with the related 
                health care payment and remittance advice;
                    ``(D) require timely and transparent claim and 
                denial management processes, including tracking, 
                adjudication, and appeal processing ;
                    ``(E) require the use of a standard electronic 
                transaction with which health care providers may 
                quickly and efficiently enroll with a health plan to 
                conduct the other electronic transactions provided for 
                in this part; and
                    ``(F) provide for other requirements relating to 
                administrative simplification as identified by the 
                Secretary, in consultation with stakeholders.
            ``(5) Building on existing standards.--In developing the 
        standards under this section, the Secretary shall build upon 
        existing and planned standards.
            ``(6) Implementation and enforcement.--Not later than 6 
        months after the date of the enactment of this section, the 
        Secretary shall submit to the appropriate committees of 
        Congress a plan for the implementation and enforcement, by not 
        later than 5 years after such date of enactment, of the 
        standards under this section. Such plan shall include--
                    ``(A) a process and timeframe with milestones for 
                developing the complete set of standards;
                    ``(B) an expedited upgrade program for continually 
                developing and approving additions and modifications to 
                the standards as often as annually to improve their 
                quality and extend their functionality to meet evolving 
                requirements in health care;
                    ``(C) programs to provide incentives for, and ease 
                the burden of, implementation for certain health care 
                providers, with special consideration given to such 
                providers serving rural or underserved areas and ensure 
                coordination with standards, implementation 
                specifications, and certification criteria being 
                adopted under the HITECH Act;
                    ``(D) programs to provide incentives for, and ease 
                the burden of, health care providers who volunteer to 
                participate in the process of setting standards for 
                electronic transactions;
                    ``(E) an estimate of total funds needed to ensure 
                timely completion of the implementation plan; and
                    ``(F) an enforcement process that includes timely 
                investigation of complaints, random audits to ensure 
                compliance, civil monetary and programmatic penalties 
                for non-compliance consistent with existing laws and 
                regulations, and a fair and reasonable appeals process 
                building off of enforcement provisions under this part.
    ``(b) Limitations on Use of Data.--Nothing in this section shall be 
construed to permit the use of information collected under this section 
in a manner that would adversely affect any individual.
    ``(c) Protection of Data.--The Secretary shall ensure (through the 
promulgation of regulations or otherwise) that all data collected 
pursuant to subsection (a) are--
            ``(1) used and disclosed in a manner that meets the HIPAA 
        privacy and security law (as defined in section 3009(a)(2) of 
        the Public Health Service Act), including any privacy or 
        security standard adopted under section 3004 of such Act; and
            ``(2) protected from all inappropriate internal use by any 
        entity that collects, stores, or receives the data, including 
        use of such data in determinations of eligibility (or continued 
        eligibility) in health plans, and from other inappropriate 
        uses, as defined by the Secretary.''.
            (2) Definitions.--Section 1171 of such Act (42 U.S.C. 
        1320d) is amended--
                    (A) in paragraph (7), by striking ``with reference 
                to'' and all that follows and inserting ``with 
                reference to a transaction or data element of health 
                information in section 1173 means implementation 
                specifications, certification criteria, operating 
                rules, messaging formats, codes, and code sets adopted 
                or established by the Secretary for the electronic 
                exchange and use of information''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(9) Operating rules.--The term `operating rules' means 
        business rules for using and processing transactions. Operating 
        rules should address the following:
                    ``(A) Requirements for data content using available 
                and established national standards.
                    ``(B) Infrastructure requirements that establish 
                best practices for streamlining data flow to yield 
                timely execution of transactions.
                    ``(C) Policies defining the transaction related 
                rights and responsibilities for entities that are 
                transmitting or receiving data.''.
            (3) Conforming amendment.--Section 1179(a) of such Act (42 
        U.S.C. 1320d-8(a)) is amended, in the matter before paragraph 
        (1)--
                    (A) by inserting ``on behalf of an individual'' 
                after ``1978)''; and
                    (B) by inserting ``on behalf of an individual'' 
                after ``for a financial institution'' and
    (b) Standards for Claims Attachments and Coordination of Benefits 
.--
            (1) Standard for health claims attachments.--Not later than 
        1 year after the date of the enactment of this Act, the 
        Secretary of Health and Human Services shall promulgate a final 
        rule to establish a standard for health claims attachment 
        transaction described in section 1173(a)(2)(B) of the Social 
        Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of 
        benefits.
            (2) Revision in processing payment transactions by 
        financial institutions.--
                    (A) In general.--Section 1179 of the Social 
                Security Act (42 U.S.C. 1320d-8) is amended, in the 
                matter before paragraph (1)--
                            (i) by striking ``or is engaged'' and 
                        inserting ``and is engaged''; and
                            (ii) by inserting ``(other than as a 
                        business associate for a covered entity)'' 
                        after ``for a financial institution''.
                    (B) Effective date.--The amendments made by 
                paragraph (1) shall apply to transactions occurring on 
                or after such date (not later than 6 months after the 
                date of the enactment of this Act) as the Secretary of 
                Health and Human Services shall specify.

SEC. 164. REINSURANCE PROGRAM FOR RETIREES.

    (a) Establishment.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall establish a temporary reinsurance program (in 
        this section referred to as the ``reinsurance program'') to 
        provide reimbursement to assist participating employment-based 
        plans with the cost of providing health benefits to retirees 
        and to eligible spouses, surviving spouses and dependents of 
        such retirees.
            (2) Definitions.--For purposes of this section:
                    (A) The term ``eligible employment-based plan'' 
                means a group health benefits plan that--
                            (i) is maintained by one or more employers, 
                        former employers or employee associations, or a 
                        voluntary employees' beneficiary association, 
                        or a committee or board of individuals 
                        appointed to administer such plan, and
                            (ii) provides health benefits to retirees.
                    (B) The term ``health benefits'' means medical, 
                surgical, hospital, prescription drug, and such other 
                benefits as shall be determined by the Secretary, 
                whether self-funded or delivered through the purchase 
                of insurance or otherwise.
                    (C) The term ``participating employment-based 
                plan'' means an eligible employment-based plan that is 
                participating in the reinsurance program.
                    (D) The term ``retiree'' means, with respect to a 
                participating employment-benefit plan, an individual 
                who--
                            (i) is 55 years of age or older;
                            (ii) is not eligible for coverage under 
                        title XVIII of the Social Security Act; and
                            (iii) is not an active employee of an 
                        employer maintaining the plan or of any 
                        employer that makes or has made substantial 
                        contributions to fund such plan.
                    (E) The term ``Secretary'' means Secretary of 
                Health and Human Services.
    (b) Participation.--To be eligible to participate in the 
reinsurance program, an eligible employment-based plan shall submit to 
the Secretary an application for participation in the program, at such 
time, in such manner, and containing such information as the Secretary 
shall require.
    (c) Payment.--
            (1) Submission of claims.--
                    (A) In general.--Under the reinsurance program, a 
                participating employment-based plan shall submit claims 
                for reimbursement to the Secretary which shall contain 
                documentation of the actual costs of the items and 
                services for which each claim is being submitted.
                    (B) Basis for claims.--Each claim submitted under 
                subparagraph (A) shall be based on the actual amount 
                expended by the participating employment-based plan 
                involved within the plan year for the appropriate 
                employment based health benefits provided to a retiree 
                or to the spouse, surviving spouse, or dependent of a 
                retiree. In determining the amount of any claim for 
                purposes of this subsection, the participating 
                employment-based plan shall take into account any 
                negotiated price concessions (such as discounts, direct 
                or indirect subsidies, rebates, and direct or indirect 
                remunerations) obtained by such plan with respect to 
                such health benefits. For purposes of calculating the 
                amount of any claim, the costs paid by the retiree or 
                by the spouse, surviving spouse, or dependent of the 
                retiree in the form of deductibles, co-payments, and 
                co-insurance shall be included along with the amounts 
                paid by the participating employment-based plan.
            (2) Program payments and limit.--If the Secretary 
        determines that a participating employment-based plan has 
        submitted a valid claim under paragraph (1), the Secretary 
        shall reimburse such plan for 80 percent of that portion of the 
        costs attributable to such claim that exceeds $15,000, but is 
        less than $90,000. Such amounts shall be adjusted each year 
        based on the percentage increase in the medical care component 
        of the Consumer Price Index (rounded to the nearest multiple of 
        $1,000) for the year involved.
            (3) Use of payments.--Amounts paid to a participating 
        employment-based plan under this subsection shall be used to 
        lower the costs borne directly by the participants and 
        beneficiaries for health benefits provided under such plan in 
        the form of premiums, co-payments, deductibles, co-insurance, 
        or other out-of-pocket costs. Such payments shall not be used 
        to reduce the costs of an employer maintaining the 
        participating employment-based plan. The Secretary shall 
        develop a mechanism to monitor the appropriate use of such 
        payments by such plans.
            (4) Appeals and program protections.--The Secretary shall 
        establish--
                    (A) an appeals process to permit participating 
                employment-based plans to appeal a determination of the 
                Secretary with respect to claims submitted under this 
                section; and
                    (B) procedures to protect against fraud, waste, and 
                abuse under the program.
            (5) Audits.--The Secretary shall conduct annual audits of 
        claims data submitted by participating employment-based plans 
        under this section to ensure that they are in compliance with 
        the requirements of this section.
    (d) Retiree Reserve Trust Fund.--
            (1) Establishment.--
                    (A) In general.--There is established in the 
                Treasury of the United States a trust fund to be known 
                as the ``Retiree Reserve Trust Fund'' (referred to in 
                this section as the ``Trust Fund''), that shall consist 
                of such amounts as may be appropriated or credited to 
                the Trust Fund as provided for in this subsection to 
                enable the Secretary to carry out the reinsurance 
                program. Such amounts shall remain available until 
                expended.
                    (B) Funding.--There are hereby appropriated to the 
                Trust Fund, out of any moneys in the Treasury not 
                otherwise appropriated, an amount requested by the 
                Secretary as necessary to carry out this section, 
                except that the total of all such amounts requested 
                shall not exceed $10,000,000,000.
                    (C) Appropriations from the trust fund.--
                            (i) In general.--Amounts in the Trust Fund 
                        are appropriated to provide funding to carry 
                        out the reinsurance program and shall be used 
                        to carry out such program.
                            (ii) Budgetary implications.--Amounts 
                        appropriated under clause (i), and outlays 
                        flowing from such appropriations, shall not be 
                        taken into account for purposes of any budget 
                        enforcement procedures including allocations 
                        under section 302(a) and (b) of the Balanced 
                        Budget and Emergency Deficit Control Act and 
                        budget resolutions for fiscal years during 
                        which appropriations are made from the Trust 
                        Fund.
                            (iii) Limitation to available funds.--The 
                        Secretary has the authority to stop taking 
                        applications for participation in the program 
                        or take such other steps in reducing 
                        expenditures under the reinsurance program in 
                        order to ensure that expenditures under the 
                        reinsurance program do not exceed the funds 
                        available under this subsection.

       TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                 Subtitle A--Health Insurance Exchange

SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF 
              DUTIES; DEFINITIONS.

    (a) Establishment.--There is established within the Health Choices 
Administration and under the direction of the Commissioner a Health 
Insurance Exchange in order to facilitate access of individuals and 
employers, through a transparent process, to a variety of choices of 
affordable, quality health insurance coverage, including a public 
health insurance option.
    (b) Outline of Duties of Commissioner.--In accordance with this 
subtitle and in coordination with appropriate Federal and State 
officials as provided under section 143(b), the Commissioner shall--
            (1) under section 204 establish standards for, accept bids 
        from, and negotiate and enter into contracts with, QHBP 
        offering entities for the offering of health benefits plans 
        through the Health Insurance Exchange, with different levels of 
        benefits required under section 203, and including with respect 
        to oversight and enforcement;
            (2) under section 205 facilitate outreach and enrollment in 
        such plans of Exchange-eligible individuals and employers 
        described in section 202; and
            (3) conduct such activities related to the Health Insurance 
        Exchange as required, including establishment of a risk pooling 
        mechanism under section 206 and consumer protections under 
        subtitle D of title I.
    (c) Exchange-participating Health Benefits Plan Defined.--In this 
subdivision, the term ``Exchange-participating health benefits plan'' 
means a qualified health benefits plan that is offered through the 
Health Insurance Exchange.

SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

    (a) Access to Coverage.--In accordance with this section, all 
individuals are eligible to obtain coverage through enrollment in an 
Exchange-participating health benefits plan offered through the Health 
Insurance Exchange unless such individuals are enrolled in another 
qualified health benefits plan or other acceptable coverage.
    (b) Definitions.--In this subdivision:
            (1) Exchange-eligible individual.--The term ``Exchange-
        eligible individual'' means an individual who is eligible under 
        this section to be enrolled through the Health Insurance 
        Exchange in an Exchange-participating health benefits plan and, 
        with respect to family coverage, includes dependents of such 
        individual.
            (2) Exchange-eligible employer.--The term ``Exchange-
        eligible employer'' means an employer that is eligible under 
        this section to enroll through the Health Insurance Exchange 
        employees of the employer (and their dependents) in Exchange-
        eligible health benefits plans.
            (3) Employment-related definitions.--The terms 
        ``employer'', ``employee'', ``full-time employee'', and ``part-
        time employee'' have the meanings given such terms by the 
        Commissioner for purposes of this subdivision.
    (c) Transition.--Individuals and employers shall only be eligible 
to enroll or participate in the Health Insurance Exchange in accordance 
with the following transition schedule:
            (1) First year.--In Y1 (as defined in section 100(c))--
                    (A) individuals described in subsection (d)(1), 
                including individuals described in paragraphs (3) and 
                (4) of subsection (d); and
                    (B) smallest employers described in subsection 
                (e)(1).
            (2) Second year.--In Y2--
                    (A) individuals and employers described in 
                paragraph (1); and
                    (B) smaller employers described in subsection 
                (e)(2).
            (3) Third and subsequent years.--In Y3 and subsequent 
        years--
                    (A) individuals and employers described in 
                paragraph (2); and
                    (B) larger employers as permitted by the 
                Commissioner under subsection (e)(3).
    (d) Individuals.--
            (1) Individual described.--Subject to the succeeding 
        provisions of this subsection, an individual described in this 
        paragraph is an individual who--
                    (A) is not enrolled in coverage described in 
                subparagraphs (C) through (F) of paragraph (2); and
                    (B) is not enrolled in coverage as a full-time 
                employee (or as a dependent of such an employee) under 
                a group health plan if the coverage and an employer 
                contribution under the plan meet the requirements of 
                section 312.
        For purposes of subparagraph (B), in the case of an individual 
        who is self-employed, who has at least 1 employee, and who 
        meets the requirements of section 312, such individual shall be 
        deemed a full-time employee described in such subparagraph.
            (2) Acceptable coverage.--For purposes of this subdivision, 
        the term ``acceptable coverage'' means any of the following:
                    (A) Qualified health benefits plan coverage.--
                Coverage under a qualified health benefits plan.
                    (B) Grandfathered health insurance coverage; 
                coverage under current group health plan.--Coverage 
                under a grandfathered health insurance coverage (as 
                defined in subsection (a) of section 102) or under a 
                current group health plan (described in subsection (b) 
                of such section).
                    (C) Medicare.--Coverage under part A of title XVIII 
                of the Social Security Act.
                    (D) Medicaid.--Coverage for medical assistance 
                under title XIX of the Social Security Act, excluding 
                such coverage that is only available because of the 
                application of subsection (u), (z), or (aa) of section 
                1902 of such Act
                    (E) Members of the armed forces and dependents 
                (including tricare).--Coverage under chapter 55 of 
                title 10, United States Code, including similar 
                coverage furnished under section 1781 of title 38 of 
                such Code.
                    (F) VA.--Coverage under the veteran's health care 
                program under chapter 17 of title 38, United States 
                Code, but only if the coverage for the individual 
                involved is determined by the Commissioner in 
                coordination with the Secretary of Treasury to be not 
                less than a level specified by the Commissioner and 
                Secretary of Veteran's Affairs, in coordination with 
                the Secretary of Treasury, based on the individual's 
                priority for services as provided under section 1705(a) 
                of such title.
                    (G) Other coverage.--Such other health benefits 
                coverage, such as a State health benefits risk pool, as 
                the Commissioner, in coordination with the Secretary of 
                the Treasury, recognizes for purposes of this 
                paragraph.
        The Commissioner shall make determinations under this paragraph 
        in coordination with the Secretary of the Treasury.
            (3) Treatment of certain non-traditional medicaid eligible 
        individuals.--An individual who is a non-traditional Medicaid 
        eligible individual (as defined in section 205(e)(4)(C)) in a 
        State may be an Exchange-eligible individual if the individual 
        was enrolled in a qualified health benefits plan, grandfathered 
        health insurance coverage, or current group health plan during 
        the 6 months before the individual became a non-traditional 
        Medicaid eligible individual. During the period in which such 
        an individual has chosen to enroll in an Exchange-participating 
        health benefits plan, the individual is not also eligible for 
        medical assistance under Medicaid.
            (4) Continuing eligibility permitted.--
                    (A) In general.--Except as provided in subparagraph 
                (B), once an individual qualifies as an Exchange-
                eligible individual under this subsection (including as 
                an employee or dependent of an employee of an Exchange-
                eligible employer) and enrolls under an Exchange-
                participating health benefits plan through the Health 
                Insurance Exchange, the individual shall continue to be 
                treated as an Exchange-eligible individual until the 
                individual is no longer enrolled with an Exchange-
                participating health benefits plan.
                    (B) Exceptions.--
                            (i) In general.--Subparagraph (A) shall not 
                        apply to an individual once the individual 
                        becomes eligible for coverage--
                                    (I) under part A of the Medicare 
                                program;
                                    (II) under the Medicaid program as 
                                a Medicaid eligible individual, except 
                                as permitted under paragraph (3) or 
                                clause (ii); or
                                    (III) in such other circumstances 
                                as the Commissioner may provide.
                            (ii) Transition period.--In the case 
                        described in clause (i)(II), the Commissioner 
                        shall permit the individual to continue 
                        treatment under subparagraph (A) until such 
                        limited time as the Commissioner determines it 
                        is administratively feasible, consistent with 
                        minimizing disruption in the individual's 
                        access to health care.
    (e) Employers.--
            (1) Smallest employer.--Subject to paragraph (4), smallest 
        employers described in this paragraph are employers with 10 or 
        fewer employees.
            (2) Smaller employers.--Subject to paragraph (4), smaller 
        employers described in this paragraph are employers that are 
        not smallest employers described in paragraph (1) and have 20 
        or fewer employees.
            (3) Larger employers.--
                    (A) In general.--Beginning with Y3, the 
                Commissioner may permit employers not described in 
                paragraph (1) or (2) to be Exchange-eligible employers.
                    (B) Phase-in.--In applying subparagraph (A), the 
                Commissioner may phase-in the application of such 
                subparagraph based on the number of full-time employees 
                of an employer and such other considerations as the 
                Commissioner deems appropriate.
            (4) Continuing eligibility.--Once an employer is permitted 
        to be an Exchange-eligible employer under this subsection and 
        enrolls employees through the Health Insurance Exchange, the 
        employer shall continue to be treated as an Exchange-eligible 
        employer for each subsequent plan year regardless of the number 
        of employees involved unless and until the employer meets the 
        requirement of section 311(a) through paragraph (1) of such 
        section by offering a group health plan and not through 
        offering an Exchange-participating health benefits plan.
            (5) Employer participation and contributions.--
                    (A) Satisfaction of employer responsibility.--For 
                any year in which an employer is an Exchange-eligible 
                employer, such employer may meet the requirements of 
                section 312 with respect to employees of such employer 
                by offering such employees the option of enrolling with 
                Exchange-participating health benefits plans through 
                the Health Insurance Exchange consistent with the 
                provisions of subtitle B of title III.
                    (B) Employee choice.--Any employee offered 
                Exchange-participating health benefits plans by the 
                employer of such employee under subparagraph (A) may 
                choose coverage under any such plan. That choice 
                includes, with respect to family coverage, coverage of 
                the dependents of such employee.
            (6) Affiliated groups.--Any employer which is part of a 
        group of employers who are treated as a single employer under 
        subsection (b), (c), (m), or (o) of section 414 of the Internal 
        Revenue Code of 1986 shall be treated, for purposes of this 
        subtitle, as a single employer.
            (7) Other counting rules.--The Commissioner shall establish 
        rules relating to how employees are counted for purposes of 
        carrying out this subsection.
    (f) Special Situation Authority.--The Commissioner shall have the 
authority to establish such rules as may be necessary to deal with 
special situations with regard to uninsured individuals and employers 
participating as Exchange-eligible individuals and employers, such as 
transition periods for individuals and employers who gain, or lose, 
Exchange-eligible participation status, and to establish grace periods 
for premium payment.
    (g) Surveys of Individuals and Employers.--The Commissioner shall 
provide for periodic surveys of Exchange-eligible individuals and 
employers concerning satisfaction of such individuals and employers 
with the Health Insurance Exchange and Exchange-participating health 
benefits plans.
    (h) Exchange Access Study.--
            (1) In general.--The Commissioner shall conduct a study of 
        access to the Health Insurance Exchange for individuals and for 
        employers, including individuals and employers who are not 
        eligible and enrolled in Exchange-participating health benefits 
        plans. The goal of the study is to determine if there are 
        significant groups and types of individuals and employers who 
        are not Exchange eligible individuals or employers, but who 
        would have improved benefits and affordability if made eligible 
        for coverage in the Exchange.
            (2) Items included in study.--Such study also shall 
        examine--
                    (A) the terms, conditions, and affordability of 
                group health coverage offered by employers and QHBP 
                offering entities outside of the Exchange compared to 
                Exchange-participating health benefits plans; and
                    (B) the affordability-test standard for access of 
                certain employed individuals to coverage in the Health 
                Insurance Exchange.
            (3) Report.--Not later than January 1 of Y3, in Y6, and 
        thereafter, the Commissioner shall submit to Congress on the 
        study conducted under this subsection and shall include in such 
        report recommendations regarding changes in standards for 
        Exchange eligibility for individuals and employers.

SEC. 203. BENEFITS PACKAGE LEVELS.

    (a) In General.--The Commissioner shall specify the benefits to be 
made available under Exchange-participating health benefits plans 
during each plan year, consistent with subtitle C of title I and this 
section.
    (b) Limitation on Health Benefits Plans Offered by Offering 
Entities.--The Commissioner may not enter into a contract with a QHBP 
offering entity under section 204(c) for the offering of an Exchange-
participating health benefits plan in a service area unless the 
following requirements are met:
            (1) Required offering of basic plan.--The entity offers 
        only one basic plan for such service area.
            (2) Optional offering of enhanced plan.--If and only if the 
        entity offers a basic plan for such service area, the entity 
        may offer one enhanced plan for such area.
            (3) Optional offering of premium plan.--If and only if the 
        entity offers an enhanced plan for such service area, the 
        entity may offer one premium plan for such area.
            (4) Optional offering of premium-plus plans.--If and only 
        if the entity offers a premium plan for such service area, the 
        entity may offer one or more premium-plus plans for such area.
All such plans may be offered under a single contract with the 
Commissioner.
    (c) Specification of Benefit Levels for Plans.--
            (1) In general.--The Commissioner shall establish the 
        following standards consistent with this subsection and title 
        I:
                    (A) Basic, enhanced, and premium plans.--Standards 
                for 3 levels of Exchange-participating health benefits 
                plans: basic, enhanced, and premium (in this 
                subdivision referred to as a ``basic plan'', ``enhanced 
                plan'', and ``premium plan'', respectively).
                    (B) Premium-plus plan benefits.--Standards for 
                additional benefits that may be offered, consistent 
                with this subsection and subtitle C of title I, under a 
                premium plan (such a plan with additional benefits 
                referred to in this subdivision as a ``premium-plus 
                plan'') .
            (2) Basic plan.--
                    (A) In general.--A basic plan shall offer the 
                essential benefits package required under title I for a 
                qualified health benefits plan.
                    (B) Tiered cost-sharing for affordable credit 
                eligible individuals.--In the case of an affordable 
                credit eligible individual (as defined in section 
                242(a)(1)) enrolled in an Exchange-participating health 
                benefits plan, the benefits under a basic plan are 
                modified to provide for the reduced cost-sharing for 
                the income tier applicable to the individual under 
                section 244(c).
            (3) Enhanced plan.--An enhanced plan shall offer, in 
        addition to the level of benefits under the basic plan, a lower 
        level of cost-sharing as provided under title I consistent with 
        section 123(b)(5)(A).
            (4) Premium plan.--A premium plan shall offer, in addition 
        to the level of benefits under the basic plan, a lower level of 
        cost-sharing as provided under title I consistent with section 
        123(b)(5)(B).
            (5) Premium-plus plan.--A premium-plus plan is a premium 
        plan that also provides additional benefits, such as adult oral 
        health and vision care, approved by the Commissioner. The 
        portion of the premium that is attributable to such additional 
        benefits shall be separately specified.
            (6) Range of permissible variation in cost-sharing.--The 
        Commissioner shall establish a permissible range of variation 
        of cost-sharing for each basic, enhanced, and premium plan, 
        except with respect to any benefit for which there is no cost-
        sharing permitted under the essential benefits package. Such 
        variation shall permit a variation of not more than plus (or 
        minus) 10 percent in cost-sharing with respect to each benefit 
        category specified under section 122.
    (d) Treatment of State Benefit Mandates.--Insofar as a State 
requires a health insurance issuer offering health insurance coverage 
to include benefits beyond the essential benefits package, such 
requirement shall continue to apply to an Exchange-participating health 
benefits plan, if the State has entered into an arrangement 
satisfactory to the Commissioner to reimburse the Commissioner for the 
amount of any net increase in affordability premium credits under 
subtitle C as a result of an increase in premium in basic plans as a 
result of application of such requirement.

SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH 
              BENEFITS PLANS.

    (a) Contracting Duties.--In carrying out section 201(b)(1) and 
consistent with this subtitle:
            (1) Offering entity and plan standards.--The Commissioner 
        shall--
                    (A) establish standards necessary to implement the 
                requirements of this title and title I for--
                            (i) QHBP offering entities for the offering 
                        of an Exchange-participating health benefits 
                        plan; and
                            (ii) for Exchange-participating health 
                        benefits plans; and
                    (B) certify QHBP offering entities and qualified 
                health benefits plans as meeting such standards and 
                requirements of this title and title I for purposes of 
                this subtitle.
            (2) Soliciting and negotiating bids; contracts.--The 
        Commissioner shall--
                    (A) solicit bids from QHBP offering entities for 
                the offering of Exchange-participating health benefits 
                plans;
                    (B) based upon a review of such bids, negotiate 
                with such entities for the offering of such plans; and
                    (C) enter into contracts with such entities for the 
                offering of such plans through the Health Insurance 
                Exchange under terms (consistent with this title) 
                negotiated between the Commissioner and such entities.
            (3) FAR not applicable.--The provisions of the Federal 
        Acquisition Regulation shall not apply to contracts between the 
        Commissioner and QHBP offering entities for the offering of 
        Exchange-participating health benefits plans under this title.
    (b) Standards for QHBP Offering Entities to Offer Exchange-
participating Health Benefits Plans.--The standards established under 
subsection (a)(1)(A) shall require that, in order for a QHBP offering 
entity to offer an Exchange-participating health benefits plan, the 
entity must meet the following requirements:
            (1) Licensed.--The entity shall be licensed to offer health 
        insurance coverage under State law for each State in which it 
        is offering such coverage.
            (2) Data reporting.--The entity shall provide for the 
        reporting of such information as the Commissioner may specify, 
        including information necessary to administer the risk pooling 
        mechanism described in section 206(b) and information to 
        address disparities in health and health care.
            (3) Implementing affordability credits.--The entity shall 
        provide for implementation of the affordability credits 
        provided for enrollees under subtitle C, including the 
        reduction in cost-sharing under section 244(c).
            (4) Enrollment.--The entity shall accept all enrollments 
        under this subtitle, subject to such exceptions (such as 
        capacity limitations) in accordance with the requirements under 
        title I for a qualified health benefits plan. The entity shall 
        notify the Commissioner if the entity projects or anticipates 
        reaching such a capacity limitation that would result in a 
        limitation in enrollment.
            (5) Risk pooling participation.--The entity shall 
        participate in such risk pooling mechanism as the Commissioner 
        establishes under section 206(b).
            (6) Essential community providers.--With respect to the 
        basic plan offered by the entity, the entity shall contract for 
        outpatient services with covered entities (as defined in 
        section 340B(a)(4) of the Public Health Service Act, as in 
        effect as of July 1, 2009). The Commissioner shall specify the 
        extent to which and manner in which the previous sentence shall 
        apply in the case of a basic plan with respect to which the 
        Commissioner determines provides substantially all benefits 
        through a health maintenance organization, as defined in 
        section 2791(b)(3) of the Public Health Service Act.
            (7) Culturally and linguistically appropriate services and 
        communications.--The entity shall provide for culturally and 
        linguistically appropriate communication and health services.
            (8) Additional requirements.--The entity shall comply with 
        other applicable requirements of this title, as specified by 
        the Commissioner, which shall include standards regarding 
        billing and collection practices for premiums and related grace 
        periods and which may include standards to ensure that the 
        entity does not use coercive practices to force providers not 
        to contract with other entities offering coverage through the 
        Health Insurance Exchange.
    (c) Contracts.--
            (1) Bid application.--To be eligible to enter into a 
        contract under this section, a QHBP offering entity shall 
        submit to the Commissioner a bid at such time, in such manner, 
        and containing such information as the Commissioner may 
        require.
            (2) Term.--Each contract with a QHBP offering entity under 
        this section shall be for a term of not less than one year, but 
        may be made automatically renewable from term to term in the 
        absence of notice of termination by either party.
            (3) Enforcement of network adequacy.--In the case of a 
        health benefits plan of a QHBP offering entity that uses a 
        provider network, the contract under this section with the 
        entity shall provide that if--
                    (A) the Commissioner determines that such provider 
                network does not meet such standards as the 
                Commissioner shall establish under section 115; and
                    (B) an individual enrolled in such plan receives an 
                item or service from a provider that is not within such 
                network;
        then any cost-sharing for such item or service shall be equal 
        to the amount of such cost-sharing that would be imposed if 
        such item or service was furnished by a provider within such 
        network.
            (4) Oversight and enforcement responsibilities.--The 
        Commissioner shall establish processes, in coordination with 
        State insurance regulators, to oversee, monitor, and enforce 
        applicable requirements of this title with respect to QHBP 
        offering entities offering Exchange-participating health 
        benefits plans and such plans, including the marketing of such 
        plans. Such processes shall include the following:
                    (A) Grievance and complaint mechanisms.--The 
                Commissioner shall establish, in coordination with 
                State insurance regulators, a process under which 
                Exchange-eligible individuals and employers may file 
                complaints concerning violations of such standards.
                    (B) Enforcement.--In carrying out authorities under 
                this subdivision relating to the Health Insurance 
                Exchange, the Commissioner may impose one or more of 
                the intermediate sanctions described in section 142(c).
                    (C) Termination.--
                            (i) In general.--The Commissioner may 
                        terminate a contract with a QHBP offering 
                        entity under this section for the offering of 
                        an Exchange-participating health benefits plan 
                        if such entity fails to comply with the 
                        applicable requirements of this title. Any 
                        determination by the Commissioner to terminate 
                        a contract shall be made in accordance with 
                        formal investigation and compliance procedures 
                        established by the Commissioner under which--
                                    (I) the Commissioner provides the 
                                entity with the reasonable opportunity 
                                to develop and implement a corrective 
                                action plan to correct the deficiencies 
                                that were the basis of the 
                                Commissioner's determination; and
                                    (II) the Commissioner provides the 
                                entity with reasonable notice and 
                                opportunity for hearing (including the 
                                right to appeal an initial decision) 
                                before terminating the contract.
                            (ii) Exception for imminent and serious 
                        risk to health.--Clause (i) shall not apply if 
                        the Commissioner determines that a delay in 
                        termination, resulting from compliance with the 
                        procedures specified in such clause prior to 
                        termination, would pose an imminent and serious 
                        risk to the health of individuals enrolled 
                        under the qualified health benefits plan of the 
                        QHBP offering entity.
                    (D) Construction.--Nothing in this subsection shall 
                be construed as preventing the application of other 
                sanctions under subtitle E of title I with respect to 
                an entity for a violation of such a requirement.

SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND 
              EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.

    (a) In General.--
            (1) Outreach.--The Commissioner shall conduct outreach 
        activities consistent with subsection (c), including through 
        use of appropriate entities as described in paragraph (4) of 
        such subsection, to inform and educate individuals and 
        employers about the Health Insurance Exchange and Exchange-
        participating health benefits plan options. Such outreach shall 
        include outreach specific to vulnerable populations, such as 
        children, individuals with disabilities, individuals with 
        mental illness, and individuals with other cognitive 
        impairments.
            (2) Eligibility.--The Commissioner shall make timely 
        determinations of whether individuals and employers are 
        Exchange-eligible individuals and employers (as defined in 
        section 202).
            (3) Enrollment.--The Commissioner shall establish and carry 
        out an enrollment process for Exchange-eligible individuals and 
        employers, including at community locations, in accordance with 
        subsection (b).
    (b) Enrollment Process.--
            (1) In general.--The Commissioner shall establish a process 
        consistent with this title for enrollments in Exchange-
        participating health benefits plans. Such process shall provide 
        for enrollment through means such as the mail, by telephone, 
        electronically, and in person.
            (2) Enrollment periods.--
                    (A) Open enrollment period.--The Commissioner shall 
                establish an annual open enrollment period during which 
                an Exchange-eligible individual or employer may elect 
                to enroll in an Exchange-participating health benefits 
                plan for the following plan year and an enrollment 
                period for affordability credits under subtitle C. Such 
                periods shall be during September through November of 
                each year, or such other time that would maximize 
                timeliness of income verification for purposes of such 
                subtitle. The open enrollment period shall not be less 
                than 30 days.
                    (B) Special enrollment.--The Commissioner shall 
                also provide for special enrollment periods to take 
                into account special circumstances of individuals and 
                employers, such as an individual who--
                            (i) loses acceptable coverage;
                            (ii) experiences a change in marital or 
                        other dependent status;
                            (iii) moves outside the service area of the 
                        Exchange-participating health benefits plan in 
                        which the individual is enrolled; or
                            (iv) experiences a significant change in 
                        income.
                    (C) Enrollment information.--The Commissioner shall 
                provide for the broad dissemination of information to 
                prospective enrollees on the enrollment process, 
                including before each open enrollment period. In 
                carrying out the previous sentence, the Commissioner 
                may work with other appropriate entities to facilitate 
                such provision of information.
            (3) Automatic enrollment for non-medicaid eligible 
        individuals.--
                    (A) In general.--The Commissioner shall provide for 
                a process under which individuals who are Exchange-
                eligible individuals described in subparagraph (B) are 
                automatically enrolled under an appropriate Exchange-
                participating health benefits plan. Such process may 
                involve a random assignment or some other form of 
                assignment that takes into account the health care 
                providers used by the individual involved or such other 
                relevant factors as the Commissioner may specify.
                    (B) Subsidized individuals described.--An 
                individual described in this subparagraph is an 
                Exchange-eligible individual who is either of the 
                following:
                            (i) Affordability credit eligible 
                        individuals.--The individual--
                                    (I) has applied for, and been 
                                determined eligible for, affordability 
                                credits under subtitle C;
                                    (II) has not opted out from 
                                receiving such affordability credit; 
                                and
                                    (III) does not otherwise enroll in 
                                another Exchange-participating health 
                                benefits plan.
                            (ii) Individuals enrolled in a terminated 
                        plan.--The individual is enrolled in an 
                        Exchange-participating health benefits plan 
                        that is terminated (during or at the end of a 
                        plan year) and who does not otherwise enroll in 
                        another Exchange-participating health benefits 
                        plan.
            (4) Direct payment of premiums to plans.--Under the 
        enrollment process, individuals enrolled in an Exchange-
        participating health benefits plan shall pay such plans 
        directly, and not through the Commissioner or the Health 
        Insurance Exchange.
    (c) Coverage Information and Assistance.--
            (1) Coverage information.--The Commissioner shall provide 
        for the broad dissemination of information on Exchange-
        participating health benefits plans offered under this title. 
        Such information shall be provided in a comparative manner, and 
        shall include information on benefits, premiums, cost-sharing, 
        quality, provider networks, and consumer satisfaction.
            (2) Consumer assistance with choice.--To provide assistance 
        to Exchange-eligible individuals and employers, the 
        Commissioner shall--
                    (A) provide for the operation of a toll-free 
                telephone hotline to respond to requests for assistance 
                and maintain an Internet website through which 
                individuals may obtain information on coverage under 
                Exchange-participating health benefits plans and file 
                complaints;
                    (B) develop and disseminate information to 
                Exchange-eligible enrollees on their rights and 
                responsibilities;
                    (C) assist Exchange-eligible individuals in 
                selecting Exchange-participating health benefits plans 
                and obtaining benefits through such plans; and
                    (D) ensure that the Internet website described in 
                subparagraph (A) and the information described in 
                subparagraph (B) is developed using plain language (as 
                defined in section 133(a)(2)).
            (3) Use of other entities.--In carrying out this 
        subsection, the Commissioner may work with other appropriate 
        entities to facilitate the dissemination of information under 
        this subsection and to provide assistance as described in 
        paragraph (2).
    (d) Special Duties Related to Medicaid and CHIP.--
            (1) Coverage for certain newborns.--
                    (A) In general.--In the case of a child born in the 
                United States who at the time of birth is not otherwise 
                covered under acceptable coverage, for the period of 
                time beginning on the date of birth and ending on the 
                date the child otherwise is covered under acceptable 
                coverage (or, if earlier, the end of the month in which 
                the 60-day period, beginning on the date of birth, 
                ends), the child shall be deemed--
                            (i) to be a non-traditional Medicaid 
                        eligible individual (as defined in subsection 
                        (e)(5)) for purposes of this subdivision and 
                        Medicaid; and
                            (ii) to have elected to enroll in Medicaid 
                        through the application of paragraph (3).
                    (B) Extended treatment as traditional medicaid 
                eligible individual.--In the case of a child described 
                in subparagraph (A) who at the end of the period 
                referred to in such subparagraph is not otherwise 
                covered under acceptable coverage, the child shall be 
                deemed (until such time as the child obtains such 
                coverage or the State otherwise makes a determination 
                of the child's eligibility for medical assistance under 
                its Medicaid plan pursuant to section 1943(c)(1) of the 
                Social Security Act) to be a traditional Medicaid 
                eligible individual described in section 1902(l)(1)(B) 
                of such Act.
            (2) CHIP transition.--A child who, as of the day before the 
        first day of Y1, is eligible for child health assistance under 
        title XXI of the Social Security Act (including a child 
        receiving coverage under an arrangement described in section 
        2101(a)(2) of such Act) is deemed as of such first day to be an 
        Exchange-eligible individual unless the individual is a 
        traditional Medicaid eligible individual as of such day.
            (3) Automatic enrollment of medicaid eligible individuals 
        into medicaid.--The Commissioner shall provide for a process 
        under which an individual who is described in section 202(d)(3) 
        and has not elected to enroll in an Exchange-participating 
        health benefits plan is automatically enrolled under Medicaid.
            (4) Notifications.--The Commissioner shall notify each 
        State in Y1 and for purposes of section 1902(gg)(1) of the 
        Social Security Act (as added by section 1703(a)) whether the 
        Health Insurance Exchange can support enrollment of children 
        described in paragraph (2) in such State in such year.
    (e) Medicaid Coverage for Medicaid Eligible Individuals.--
            (1) In general.--
                    (A) Choice for limited exchange-eligible 
                individuals.--As part of the enrollment process under 
                subsection (b), the Commissioner shall provide the 
                option, in the case of an Exchange-eligible individual 
                described in section 202(d)(3), for the individual to 
                elect to enroll under Medicaid instead of under an 
                Exchange-participating health benefits plan. Such an 
                individual may change such election during an 
                enrollment period under subsection (b)(2).
                    (B) Medicaid enrollment obligation.--An Exchange 
                eligible individual may apply, in the manner described 
                in section 241(b)(1), for a determination of whether 
                the individual is a Medicaid-eligible individual. If 
                the individual is determined to be so eligible, the 
                Commissioner, through the Medicaid memorandum of 
                understanding, shall provide for the enrollment of the 
                individual under the State Medicaid plan in accordance 
                with the Medicaid memorandum of understanding under 
                paragraph (4). In the case of such an enrollment, the 
                State shall provide for the same periodic 
                redetermination of eligibility under Medicaid as would 
                otherwise apply if the individual had directly applied 
                for medical assistance to the State Medicaid agency.
            (2) Non-traditional medicaid eligible individuals.--In the 
        case of a non-traditional Medicaid eligible individual 
        described in section 202(d)(3) who elects to enroll under 
        Medicaid under paragraph (1)(A), the Commissioner shall provide 
        for the enrollment of the individual under the State Medicaid 
        plan in accordance with the Medicaid memorandum of 
        understanding under paragraph (4).
            (3) Coordinated enrollment with state through memorandum of 
        understanding.--The Commissioner, in consultation with the 
        Secretary of Health and Human Services, shall enter into a 
        memorandum of understanding with each State (each in this 
        subdivision referred to as a ``Medicaid memorandum of 
        understanding'') with respect to coordinating enrollment of 
        individuals in Exchange-participating health benefits plans and 
        under the State's Medicaid program consistent with this section 
        and to otherwise coordinate the implementation of the 
        provisions of this subdivision with respect to the Medicaid 
        program. Such memorandum shall permit the exchange of 
        information consistent with the limitations described in 
        section 1902(a)(7) of the Social Security Act. Nothing in this 
        section shall be construed as permitting such memorandum to 
        modify or vitiate any requirement of a State Medicaid plan.
            (4) Medicaid eligible individuals.--For purposes of this 
        subdivision:
                    (A) Medicaid eligible individual.--The term 
                ``Medicaid eligible individual'' means an individual 
                who is eligible for medical assistance under Medicaid.
                    (B) Traditional medicaid eligible individual.--The 
                term ``traditional Medicaid eligible individual'' means 
                a Medicaid eligible individual other than an individual 
                who is--
                            (i) a Medicaid eligible individual by 
                        reason of the application of subclause (VIII) 
                        of section 1902(a)(10)(A)(i) of the Social 
                        Security Act; or
                            (ii) a childless adult not described in 
                        section 1902(a)(10)(A) or (C) of such Act (as 
                        in effect as of the day before the date of the 
                        enactment of this Act).
                    (C) Non-traditional medicaid eligible individual.--
                The term ``non-traditional Medicaid eligible 
                individual'' means a Medicaid eligible individual who 
                is not a traditional Medicaid eligible individual.
    (f) Effective Culturally and Linguistically Appropriate 
Communication.--In carrying out this section, the Commissioner shall 
establish effective methods for communicating in plain language and a 
culturally and linguistically appropriate manner.

SEC. 206. OTHER FUNCTIONS.

    (a) Coordination of Affordability Credits.--The Commissioner shall 
coordinate the distribution of affordability premium and cost-sharing 
credits under subtitle C to QHBP offering entities offering Exchange-
participating health benefits plans.
    (b) Coordination of Risk Pooling.--The Commissioner shall establish 
a mechanism whereby there is an adjustment made of the premium amounts 
payable among QHBP offering entities offering Exchange-participating 
health benefits plans of premiums collected for such plans that takes 
into account (in a manner specified by the Commissioner) the 
differences in the risk characteristics of individuals and employers 
enrolled under the different Exchange-participating health benefits 
plans offered by such entities so as to minimize the impact of adverse 
selection of enrollees among the plans offered by such entities.
    (c) Special Inspector General for the Health Insurance Exchange.--
            (1) Establishment; appointment.--There is hereby 
        established the Office of the Special Inspector General for the 
        Health Insurance Exchange, to be headed by a Special Inspector 
        General for the Health Insurance Exchange (in this subsection 
        referred to as the ``Special Inspector General'') to be 
        appointed by the President, by and with the advice and consent 
        of the Senate. The nomination of an individual as Special 
        Inspector General shall be made as soon as practicable after 
        the establishment of the program under this subtitle.
            (2) Duties.--The Special Inspector General shall--
                    (A) conduct, supervise, and coordinate audits, 
                evaluations and investigations of the Health Insurance 
                Exchange to protect the integrity of the Health 
                Insurance Exchange, as well as the health and welfare 
                of participants in the Exchange;
                    (B) report both to the Commissioner and to the 
                Congress regarding program and management problems and 
                recommendations to correct them;
                    (C) have other duties (described in paragraphs (2) 
                and (3) of section 121 of division A of Public Law 110-
                343) in relation to the duties described in the 
                previous subparagraphs; and
                    (D) have the authorities provided in section 6 of 
                the Inspector General Act of 1978 in carrying out 
                duties under this paragraph.
            (3) Application of other special inspector general 
        provisions.--The provisions of subsections (b) (other than 
        paragraphs (1) and (3)), (d) (other than paragraph (1)), and 
        (e) of section 121 of division A of the Emergency Economic 
        Stabilization Act of 2009 (Public Law 110-343) shall apply to 
        the Special Inspector General under this subsection in the same 
        manner as such provisions apply to the Special Inspector 
        General under such section.
            (4) Reports.--Not later than one year after the 
        confirmation of the Special Inspector General, and annually 
        thereafter, the Special Inspector General shall submit to the 
        appropriate committees of Congress a report summarizing the 
        activities of the Special Inspector General during the one year 
        period ending on the date such report is submitted.
            (5) Termination.--The Office of the Special Inspector 
        General shall terminate five years after the date of the 
        enactment of this Act.

SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.

    (a) Establishment of Health Insurance Exchange Trust Fund.--There 
is created within the Treasury of the United States a trust fund to be 
known as the ``Health Insurance Exchange Trust Fund'' (in this section 
referred to as the ``Trust Fund''), consisting of such amounts as may 
be appropriated or credited to the Trust Fund under this section or any 
other provision of law.
    (b) Payments From Trust Fund.--The Commissioner shall pay from time 
to time from the Trust Fund such amounts as the Commissioner determines 
are necessary to make payments to operate the Health Insurance 
Exchange, including payments under subtitle C (relating to 
affordability credits).
    (c) Transfers to Trust Fund.--
            (1) Dedicated payments.--There is hereby appropriated to 
        the Trust Fund amounts equivalent to the following:
                    (A) Taxes on individuals not obtaining acceptable 
                coverage.--The amounts received in the Treasury under 
                section 59B of the Internal Revenue Code of 1986 
                (relating to requirement of health insurance coverage 
                for individuals).
                    (B) Employment taxes on employers not providing 
                acceptable coverage.--The amounts received in the 
                Treasury under section 3111(c) of the Internal Revenue 
                Code of 1986 (relating to employers electing to not 
                provide health benefits).
                    (C) Excise tax on failures to meet certain health 
                coverage requirements.--The amounts received in the 
                Treasury under section 4980H(b) (relating to excise tax 
                with respect to failure to meet health coverage 
                participation requirements).
            (2) Appropriations to cover government contributions.--
        There are hereby appropriated, out of any moneys in the 
        Treasury not otherwise appropriated, to the Trust Fund, an 
        amount equivalent to the amount of payments made from the Trust 
        Fund under subsection (b) plus such amounts as are necessary 
        reduced by the amounts deposited under paragraph (1).
    (d) Application of Certain Rules.--Rules similar to the rules of 
subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall 
apply with respect to the Trust Fund.

SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.

    (a) In General.--If--
            (1) a State (or group of States, subject to the approval of 
        the Commissioner) applies to the Commissioner for approval of a 
        State-based Health Insurance Exchange to operate in the State 
        (or group of States); and
            (2) the Commissioner approves such State-based Health 
        Insurance Exchange,
then, subject to subsections (c) and (d), the State-based Health 
Insurance Exchange shall operate, instead of the Health Insurance 
Exchange, with respect to such State (or group of States). The 
Commissioner shall approve a State-based Health Insurance Exchange if 
it meets the requirements for approval under subsection (b).
    (b) Requirements for Approval.--The Commissioner may not approve a 
State-based Health Insurance Exchange under this section unless the 
following requirements are met:
            (1) The State-based Health Insurance Exchange must 
        demonstrate the capacity to and provide assurances satisfactory 
        to the Commissioner that the State-based Health Insurance 
        Exchange will carry out the functions specified for the Health 
        Insurance Exchange in the State (or States) involved, 
        including--
                    (A) negotiating and contracting with QHBP offering 
                entities for the offering of Exchange-participating 
                health benefits plan, which satisfy the standards and 
                requirements of this title and title I;
                    (B) enrolling Exchange-eligible individuals and 
                employers in such State in such plans;
                    (C) the establishment of sufficient local offices 
                to meet the needs of Exchange-eligible individuals and 
                employers;
                    (D) administering affordability credits under 
                subtitle B using the same methodologies (and at least 
                the same income verification methods) as would 
                otherwise apply under such subtitle and at a cost to 
                the Federal Government which does exceed the cost to 
                the Federal Government if this section did not apply; 
                and
                    (E) enforcement activities consistent with federal 
                requirements.
            (2) There is no more than one Health Insurance Exchange 
        operating with respect to any one State.
            (3) The State provides assurances satisfactory to the 
        Commissioner that approval of such an Exchange will not result 
        in any net increase in expenditures to the Federal Government.
            (4) The State provides for reporting of such information as 
        the Commissioner determines and assurances satisfactory to the 
        Commissioner that it will vigorously enforce violations of 
        applicable requirements.
            (5) Such other requirements as the Commissioner may 
        specify.
    (c) Ceasing Operation.--
            (1) In general.--A State-based Health Insurance Exchange 
        may, at the option of each State involved, and only after 
        providing timely and reasonable notice to the Commissioner, 
        cease operation as such an Exchange, in which case the Health 
        Insurance Exchange shall operate, instead of such State-based 
        Health Insurance Exchange, with respect to such State (or 
        States).
            (2) Termination; health insurance exchange resumption of 
        functions.--The Commissioner may terminate the approval (for 
        some or all functions) of a State-based Health Insurance 
        Exchange under this section if the Commissioner determines that 
        such Exchange no longer meets the requirements of subsection 
        (b) or is no longer capable of carrying out such functions in 
        accordance with the requirements of this subtitle. In lieu of 
        terminating such approval, the Commissioner may temporarily 
        assume some or all functions of the State-based Health 
        Insurance Exchange until such time as the Commissioner 
        determines the State-based Health Insurance Exchange meets such 
        requirements of subsection (b) and is capable of carrying out 
        such functions in accordance with the requirements of this 
        subtitle.
            (3) Effectiveness.--The ceasing or termination of a State-
        based Health Insurance Exchange under this subsection shall be 
        effective in such time and manner as the Commissioner shall 
        specify.
    (d) Retention of Authority.--
            (1) Authority retained.--Enforcement authorities of the 
        Commissioner shall be retained by the Commissioner.
            (2) Discretion to retain additional authority.--The 
        Commissioner may specify functions of the Health Insurance 
        Exchange that--
                    (A) may not be performed by a State-based Health 
                Insurance Exchange under this section; or
                    (B) may be performed by the Commissioner and by 
                such a State-based Health Insurance Exchange.
    (e) References.--In the case of a State-based Health Insurance 
Exchange, except as the Commissioner may otherwise specify under 
subsection (d), any references in this subtitle to the Health Insurance 
Exchange or to the Commissioner in the area in which the State-based 
Health Insurance Exchange operates shall be deemed a reference to the 
State-based Health Insurance Exchange and the head of such Exchange, 
respectively.
    (f) Funding.--In the case of a State-based Health Insurance 
Exchange, there shall be assistance provided for the operation of such 
Exchange in the form of a matching grant with a State share of 
expenditures required.

               Subtitle B--Public Health Insurance Option

SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE 
              OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.

    (a) Establishment.--For years beginning with Y1, the Secretary of 
Health and Human Services (in this subtitle referred to as the 
``Secretary'') shall provide for the offering of an Exchange-
participating health benefits plan (in this subdivision referred to as 
the ``public health insurance option'') that ensures choice, 
competition, and stability of affordable, high quality coverage 
throughout the United States in accordance with this subtitle. In 
designing the option, the Secretary's primary responsibility is to 
create a low-cost plan without compromising quality or access to care.
    (b) Offering as an Exchange-participating Health Benefits Plan.--
            (1) Exclusive to the exchange.--The public health insurance 
        option shall only be made available through the Health 
        Insurance Exchange.
            (2) Ensuring a level playing field.--Consistent with this 
        subtitle, the public health insurance option shall comply with 
        requirements that are applicable under this title to an 
        Exchange-participating health benefits plan, including 
        requirements related to benefits, benefit levels, provider 
        networks, notices, consumer protections, and cost sharing.
            (3) Provision of benefit levels.--The public health 
        insurance option--
                    (A) shall offer basic, enhanced, and premium plans; 
                and
                    (B) may offer premium-plus plans.
    (c) Administrative Contracting.--The Secretary may enter into 
contracts for the purpose of performing administrative functions 
(including functions described in subsection (a)(4) of section 1874A of 
the Social Security Act) with respect to the public health insurance 
option in the same manner as the Secretary may enter into contracts 
under subsection (a)(1) of such section. The Secretary has the same 
authority with respect to the public health insurance option as the 
Secretary has under subsections (a)(1) and (b) of section 1874A of the 
Social Security Act with respect to title XVIII of such Act. Contracts 
under this subsection shall not involve the transfer of insurance risk 
to such entity.
    (d) Ombudsman.--The Secretary shall establish an office of the 
ombudsman for the public health insurance option which shall have 
duties with respect to the public health insurance option similar to 
the duties of the Medicare Beneficiary Ombudsman under section 
1808(c)(2) of the Social Security Act.
    (e) Data Collection.--The Secretary shall collect such data as may 
be required to establish premiums and payment rates for the public 
health insurance option and for other purposes under this subtitle, 
including to improve quality and to reduce racial, ethnic, and other 
disparities in health and health care.
    (f) Treatment of Public Health Insurance Option.--With respect to 
the public health insurance option, the Secretary shall be treated as a 
QHBP offering entity offering an Exchange-participating health benefits 
plan.
    (g) Access to Federal Courts.--The provisions of Medicare (and 
related provisions of title II of the Social Security Act) relating to 
access of Medicare beneficiaries to Federal courts for the enforcement 
of rights under Medicare, including with respect to amounts in 
controversy, shall apply to the public health insurance option and 
individuals enrolled under such option under this title in the same 
manner as such provisions apply to Medicare and Medicare beneficiaries.

SEC. 222. PREMIUMS AND FINANCING.

    (a) Establishment of Premiums.--
            (1) In general.--The Secretary shall establish 
        geographically-adjusted premium rates for the public health 
        insurance option in a manner--
                    (A) that complies with the premium rules 
                established by the Commissioner under section 113 for 
                Exchange-participating health benefit plans; and
                    (B) at a level sufficient to fully finance the 
                costs of--
                            (i) health benefits provided by the public 
                        health insurance option; and
                            (ii) administrative costs related to 
                        operating the public health insurance option.
            (2) Contingency margin.--In establishing premium rates 
        under paragraph (1), the Secretary shall include an appropriate 
        amount for a contingency margin.
    (b) Account.--
            (1) Establishment.--There is established in the Treasury of 
        the United States an Account for the receipts and disbursements 
        attributable to the operation of the public health insurance 
        option, including the start-up funding under paragraph (2). 
        Section 1854(g) of the Social Security Act shall apply to 
        receipts described in the previous sentence in the same manner 
        as such section applies to payments or premiums described in 
        such section.
            (2) Start-up funding.--
                    (A) In general.--In order to provide for the 
                establishment of the public health insurance option 
                there is hereby appropriated to the Secretary, out of 
                any funds in the Treasury not otherwise appropriated, 
                $2,000,000,000. In order to provide for initial claims 
                reserves before the collection of premiums, there is 
                hereby appropriated to the Secretary, out of any funds 
                in the Treasury not otherwise appropriated, such sums 
                as necessary to cover 90 days worth of claims reserves 
                based on projected enrollment.
                    (B) Amortization of start-up funding.--The 
                Secretary shall provide for the repayment of the 
                startup funding provided under subparagraph (A) to the 
                Treasury in an amortized manner over the 10-year period 
                beginning with Y1.
                    (C) Limitation on funding.--Nothing in this section 
                shall be construed as authorizing any additional 
                appropriations to the Account, other than such amounts 
                as are otherwise provided with respect to other 
                Exchange-participating health benefits plans.

SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.

    (a) Rates Established by Secretary.--
            (1) In general.--The Secretary shall establish payment 
        rates for the public health insurance option for services and 
        health care providers consistent with this section and may 
        change such payment rates in accordance with section 224.
            (2) Initial payment rules.--
                    (A) In general.--Except as provided in subparagraph 
                (B) and subsection (b)(1), during Y1, Y2, and Y3, the 
                Secretary shall base the payment rates under this 
                section for services and providers described in 
                paragraph (1) on the payment rates for similar services 
                and providers under parts A and B of Medicare.
                    (B) Exceptions.--
                            (i) Practitioners' services.--Payment rates 
                        for practitioners' services otherwise 
                        established under the fee schedule under 
                        section 1848 of the Social Security Act shall 
                        be applied without regard to the provisions 
                        under subsection (f) of such section and the 
                        update under subsection (d)(4) under such 
                        section for a year as applied under this 
                        paragraph shall be not less than 1 percent.
                            (ii) Adjustments.--The Secretary may 
                        determine the extent to which Medicare 
                        adjustments applicable to base payment rates 
                        under parts A and B of Medicare shall apply 
                        under this subtitle.
            (3) For new services.--The Secretary shall modify payment 
        rates described in paragraph (2) in order to accommodate 
        payments for services, such as well-child visits, that are not 
        otherwise covered under Medicare.
            (4) Prescription drugs.--Payment rates under this section 
        for prescription drugs that are not paid for under part A or 
        part B of Medicare shall be at rates negotiated by the 
        Secretary.
    (b) Incentives for Participating Providers.--
            (1) Initial incentive period.--
                    (A) In general.--The Secretary shall provide, in 
                the case of services described in subparagraph (B) 
                furnished during Y1, Y2, and Y3, for payment rates that 
                are 5 percent greater than the rates established under 
                subsection (a).
                    (B) Services described.--The services described in 
                this subparagraph are items and professional services, 
                under the public health insurance option by a physician 
                or other health care practitioner who participates in 
                both Medicare and the public health insurance option.
                    (C) Special rules.--A pediatrician and any other 
                health care practitioner who is a type of practitioner 
                that does not typically participate in Medicare (as 
                determined by the Secretary) shall also be eligible for 
                the increased payment rates under subparagraph (A).
            (2) Subsequent periods.-- Beginning with Y4 and for 
        subsequent years, the Secretary shall continue to use an 
        administrative process to set such rates in order to promote 
        payment accuracy, to ensure adequate beneficiary access to 
        providers, and to promote affordability and the efficient 
        delivery of medical care consistent with section 221(a). Such 
        rates shall not be set at levels expected to increase overall 
        medical costs under the option beyond what would be expected if 
        the process under subsection (a)(2) and paragraph (1) of this 
        subsection were continued.
            (3) Establishment of a provider network.--Health care 
        providers participating under Medicare are participating 
        providers in the public health insurance option unless they opt 
        out in a process established by the Secretary.
    (c) Administrative Process for Setting Rates.--Chapter 5 of title 
5, United States Code shall apply to the process for the initial 
establishment of payment rates under this section but not to the 
specific methodology for establishing such rates or the calculation of 
such rates.
    (d) Construction.--Nothing in this subtitle shall be construed as 
limiting the Secretary's authority to correct for payments that are 
excessive or deficient, taking into account the provisions of section 
221(a) and the amounts paid for similar health care providers and 
services under other Exchange-participating health benefits plans.
    (e) Construction.--Nothing in this subtitle shall be construed as 
affecting the authority of the Secretary to establish payment rates, 
including payments to provide for the more efficient delivery of 
services, such as the initiatives provided for under section 224.
    (f) Limitations on Review.--There shall be no administrative or 
judicial review of a payment rate or methodology established under this 
section or under section 224.

SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.

    (a) In General.--For plan years beginning with Y1, the Secretary 
may utilize innovative payment mechanisms and policies to determine 
payments for items and services under the public health insurance 
option. The payment mechanisms and policies under this section may 
include patient-centered medical home and other care management 
payments, accountable care organizations, value-based purchasing, 
bundling of services, differential payment rates, performance or 
utilization based payments, partial capitation, and direct contracting 
with providers.
    (b) Requirements for Innovative Payments.--The Secretary shall 
design and implement the payment mechanisms and policies under this 
section in a manner that--
            (1) seeks to--
                    (A) improve health outcomes;
                    (B) reduce health disparities (including racial, 
                ethnic, and other disparities);
                    (C) provide efficient and affordable care;
                    (D) address geographic variation in the provision 
                of health services; or
                    (E) prevent or manage chronic illness; and
            (2) promotes care that is integrated, patient-centered, 
        quality, and efficient.
    (c) Encouraging the Use of High Value Services.--To the extent 
allowed by the benefit standards applied to all Exchange-participating 
health benefits plans, the public health insurance option may modify 
cost sharing and payment rates to encourage the use of services that 
promote health and value.
    (d) Non-uniformity Permitted.--Nothing in this subtitle shall 
prevent the Secretary from varying payments based on different payment 
structure models (such as accountable care organizations and medical 
homes) under the public health insurance option for different 
geographic areas.

SEC. 225. PROVIDER PARTICIPATION.

    (a) In General.--The Secretary shall establish conditions of 
participation for health care providers under the public health 
insurance option.
    (b) Licensure or Certification.--The Secretary shall not allow a 
health care provider to participate in the public health insurance 
option unless such provider is appropriately licensed or certified 
under State law.
    (c) Payment Terms for Providers.--
            (1) Physicians.--The Secretary shall provide for the annual 
        participation of physicians under the public health insurance 
        option, for which payment may be made for services furnished 
        during the year, in one of 2 classes:
                    (A) Preferred physicians.--Those physicians who 
                agree to accept the payment rate established under 
                section 223 (without regard to cost-sharing) as the 
                payment in full.
                    (B) Participating, non-preferred physicians.--Those 
                physicians who agree not to impose charges (in relation 
                to the payment rate described in section 223 for such 
                physicians) that exceed the ratio permitted under 
                section 1848(g)(2)(C) of the Social Security Act.
            (2) Other providers.--The Secretary shall provide for the 
        participation (on an annual or other basis specified by the 
        Secretary) of health care providers (other than physicians) 
        under the public health insurance option under which payment 
        shall only be available if the provider agrees to accept the 
        payment rate established under section 223 (without regard to 
        cost-sharing) as the payment in full.
    (d) Exclusion of Certain Providers.--The Secretary shall exclude 
from participation under the public health insurance option a health 
care provider that is excluded from participation in a Federal health 
care program (as defined in section 1128B(f) of the Social Security 
Act).

SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.

    Provisions of law (other than criminal law provisions) identified 
by the Secretary by regulation, in consultation with the Inspector 
General of the Department of Health and Human Services, that impose 
sanctions with respect to waste, fraud, and abuse under Medicare, such 
as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to 
the public health insurance option.

              Subtitle C--Individual Affordability Credits

SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.

    (a) In General.--Subject to the succeeding provisions of this 
subtitle, in the case of an affordable credit eligible individual 
enrolled in an Exchange-participating health benefits plan--
            (1) the individual shall be eligible for, in accordance 
        with this subtitle, affordability credits consisting of--
                    (A) an affordability premium credit under section 
                243 to be applied against the premium for the Exchange-
                participating health benefits plan in which the 
                individual is enrolled; and
                    (B) an affordability cost-sharing credit under 
                section 244 to be applied as a reduction of the cost-
                sharing otherwise applicable to such plan; and
            (2) the Commissioner shall pay the QHBP offering entity 
        that offers such plan from the Health Insurance Exchange Trust 
        Fund the aggregate amount of affordability credits for all 
        affordable credit eligible individuals enrolled in such plan.
    (b) Application.--
            (1) In general.--An Exchange eligible individual may apply 
        to the Commissioner through the Health Insurance Exchange or 
        through another entity under an arrangement made with the 
        Commissioner, in a form and manner specified by the 
        Commissioner. The Commissioner through the Health Insurance 
        Exchange or through another public entity under an arrangement 
        made with the Commissioner shall make a determination as to 
        eligibility of an individual for affordability credits under 
        this subtitle. The Commissioner shall establish a process 
        whereby, on the basis of information otherwise available, 
        individuals may be deemed to be affordable credit eligible 
        individuals. In carrying this subtitle, the Commissioner shall 
        establish effective methods that ensure that individuals with 
        limited English proficiency are able to apply for affordability 
        credits.
            (2) Use of state medicaid agencies.--If the Commissioner 
        determines that a State Medicaid agency has the capacity to 
        make a determination of eligibility for affordability credits 
        under this subtitle and under the same standards as used by the 
        Commissioner, under the Medicaid memorandum of understanding 
        (as defined in section 205(c)(4))--
                    (A) the State Medicaid agency is authorized to 
                conduct such determinations for any Exchange-eligible 
                individual who requests such a determination; and
                    (B) the Commissioner shall reimburse the State 
                Medicaid agency for the costs of conducting such 
                determinations.
            (3) Medicaid screen and enroll obligation.--In the case of 
        an application made under paragraph (1), there shall be a 
        determination of whether the individual is a Medicaid-eligible 
        individual. If the individual is determined to be so eligible, 
        the Commissioner, through the Medicaid memorandum of 
        understanding, shall provide for the enrollment of the 
        individual under the State Medicaid plan in accordance with the 
        Medicaid memorandum of understanding. In the case of such an 
        enrollment, the State shall provide for the same periodic 
        redetermination of eligibility under Medicaid as would 
        otherwise apply if the individual had directly applied for 
        medical assistance to the State Medicaid agency.
    (c) Use of Affordability Credits.--
            (1) In general.--In Y1 and Y2 an affordable credit eligible 
        individual may use an affordability credit only with respect to 
        a basic plan.
            (2) Flexibility in plan enrollment authorized.--Beginning 
        with Y3, the Commissioner shall establish a process to allow an 
        affordability credit to be used for enrollees in enhanced or 
        premium plans. In the case of an affordable credit eligible 
        individual who enrolls in an enhanced or premium plan, the 
        individual shall be responsible for any difference between the 
        premium for such plan and the affordability credit amount 
        otherwise applicable if the individual had enrolled in a basic 
        plan.
    (d) Access to Data.--In carrying out this subtitle, the 
Commissioner shall request from the Secretary of the Treasury 
consistent with section 6103 of the Internal Revenue Code of 1986 such 
information as may be required to carry out this subtitle.
    (e) No Cash Rebates.--In no case shall an affordable credit 
eligible individual receive any cash payment as a result of the 
application of this subtitle.

SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

    (a) Definition.--
            (1) In general.--For purposes of this subdivision, the term 
        ``affordable credit eligible individual'' means, subject to 
        subsection (b), an individual who is lawfully present in a 
        State in the United States (other than as a nonimmigrant 
        described in a subparagraph (excluding subparagraphs (K), (T), 
        (U), and (V)) of section 101(a)(15) of the Immigration and 
        Nationality Act)--
                    (A) who is enrolled under an Exchange-participating 
                health benefits plan and is not enrolled under such 
                plan as an employee (or dependent of an employee) 
                through an employer qualified health benefits plan that 
                meets the requirements of section 312;
                    (B) with family income below 400 percent of the 
                Federal poverty level for a family of the size 
                involved; and
                    (C) who is not a Medicaid eligible individual, 
                other than an individual described in section 202(d)(3) 
                or an individual during a transition period under 
                section 202(d)(4)(B)(ii).
            (2) Treatment of family.--Except as the Commissioner may 
        otherwise provide, members of the same family who are 
        affordable credit eligible individuals shall be treated as a 
        single affordable credit individual eligible for the applicable 
        credit for such a family under this subtitle.
    (b) Limitations on Employee and Dependent Disqualification.--
            (1) In general.--Subject to paragraph (2), the term 
        ``affordable credit eligible individual'' does not include a 
        full-time employee of an employer if the employer offers the 
        employee coverage (for the employee and dependents) as a full-
        time employee under a group health plan if the coverage and 
        employer contribution under the plan meet the requirements of 
        section 312.
            (2) Exceptions.--
                    (A) For certain family circumstances.--The 
                Commissioner shall establish such exceptions and 
                special rules in the case described in paragraph (1) as 
                may be appropriate in the case of a divorced or 
                separated individual or such a dependent of an employee 
                who would otherwise be an affordable credit eligible 
                individual.
                    (B) For unaffordable employer coverage.--Beginning 
                in Y2, in the case of full-time employees for which the 
                cost of the employee premium for coverage under a group 
                health plan would exceed 11 percent of current family 
                income (determined by the Commissioner on the basis of 
                verifiable documentation and without regard to section 
                245), paragraph (1) shall not apply.
    (c) Income Defined.--
            (1) In general.--In this title, the term ``income'' means 
        modified adjusted gross income (as defined in section 59B of 
        the Internal Revenue Code of 1986).
            (2) Study of income disregards.--The Commissioner shall 
        conduct a study that examines the application of income 
        disregards for purposes of this subtitle. Not later than the 
        first day of Y2, the Commissioner shall submit to Congress a 
        report on such study and shall include such recommendations as 
        the Commissioner determines appropriate.
    (d) Clarification of Treatment of Affordability Credits.--
Affordability credits under this subtitle shall not be treated, for 
purposes of title IV of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, to be a benefit provided under 
section 403 of such title.

SEC. 243. AFFORDABILITY PREMIUM CREDIT.

    (a) In General.--The affordability premium credit under this 
section for an affordable credit eligible individual enrolled in an 
Exchange-participating health benefits plan is in an amount equal to 
the amount (if any) by which the premium for the plan (or, if less, the 
reference premium amount specified in subsection (c)), exceeds the 
affordable premium amount specified in subsection (b) for the 
individual.
    (b) Affordable Premium Amount.--
            (1) In general.--The affordable premium amount specified in 
        this subsection for an individual for monthly premium in a plan 
        year shall be equal to \1/12 \ of the product of--
                    (A) the premium percentage limit specified in 
                paragraph (2) for the individual based upon the 
                individual's family income for the plan year; and
                    (B) the individual's family income for such plan 
                year.
            (2) Premium percentage limits based on table.--The 
        Commissioner shall establish premium percentage limits so that 
        for individuals whose family income is within an income tier 
        specified in the table in subsection (d) such percentage limits 
        shall increase, on a sliding scale in a linear manner, from the 
        initial premium percentage to the final premium percentage 
        specified in such table for such income tier.
    (c) Reference Premium Amount.--The reference premium amount 
specified in this subsection for a plan year for an individual in a 
premium rating area is equal to the average premium for the 3 basic 
plans in the area for the plan year with the lowest premium levels. In 
computing such amount the Commissioner may exclude plans with extremely 
limited enrollments.
    (d) Table of Premium Percentage Limits and Actuarial Value 
Percentages Based on Income Tier.--
            (1) In general.--For purposes of this subtitle, the table 
        specified in this subsection is as follows:

 
   In the case of family income
 (expressed as a percent of FPL)      The initial premium         The final premium        The actuarial value
within the following income tier:       percentage is--            percentage is--           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%
 

            (2) Special rules.--For purposes of applying the table 
        under paragraph (1)--
                    (A) For lowest level of income.--In the case of an 
                individual with income that does not exceed 133 percent 
                of FPL, the individual shall be considered to have 
                income that is 133% of FPL.
                    (B) Application of higher actuarial value 
                percentage at tier transition points.--If two actuarial 
                value percentages may be determined with respect to an 
                individual, the actuarial value percentage shall be the 
                higher of such percentages.

SEC. 244. AFFORDABILITY COST-SHARING CREDIT.

    (a) In General.--The affordability cost-sharing credit under this 
section for an affordable credit eligible individual enrolled in an 
Exchange-participating health benefits plan is in the form of the cost-
sharing reduction described in subsection (b) provided under this 
section for the income tier in which the individual is classified based 
on the individual's family income.
    (b) Cost-sharing Reductions.--The Commissioner shall specify a 
reduction in cost-sharing amounts and the annual limitation on cost-
sharing specified in section 122(c)(2)(B) under a basic plan for each 
income tier specified in the table under section 243(d), with respect 
to a year, in a manner so that, as estimated by the Commissioner, the 
actuarial value of the coverage with such reduced cost-sharing amounts 
(and the reduced annual cost-sharing limit) is equal to the actuarial 
value percentage (specified in the table under section 243(d) for the 
income tier involved) of the full actuarial value if there were no 
cost-sharing imposed under the plan.
    (c) Determination and Payment of Cost-sharing Affordability 
Credit.--In the case of an affordable credit eligible individual in a 
tier enrolled in an Exchange-participating health benefits plan offered 
by a QHBP offering entity, the Commissioner shall provide for payment 
to the offering entity of an amount equivalent to the increased 
actuarial value of the benefits under the plan provided under section 
203(c)(2)(B) resulting from the reduction in cost-sharing described in 
subsection (b).

SEC. 245. INCOME DETERMINATIONS.

    (a) In General.--In applying this subtitle for an affordability 
credit for an individual for a plan year, the individual's income shall 
be the income (as defined in section 242(c)) for the individual for the 
most recent taxable year (as determined in accordance with rules of the 
Commissioner). The Federal poverty level applied shall be such level in 
effect as of the date of the application.
    (b) Program Integrity; Income Verification Procedures.--
            (1) Program integrity.--The Commissioner shall take such 
        steps as may be appropriate to ensure the accuracy of 
        determinations and redeterminations under this subtitle.
            (2) Income verification.--
                    (A) In general.--Upon an initial application of an 
                individual for an affordability credit under this 
                subtitle (or in applying section 242(b)) or upon an 
                application for a change in the affordability credit 
                based upon a significant change in family income 
                described in subparagraph (A)--
                            (i) the Commissioner shall request from the 
                        Secretary of the Treasury the disclosure to the 
                        Commissioner of such information as may be 
                        permitted to verify the information contained 
                        in such application; and
                            (ii) the Commissioner shall use the 
                        information so disclosed to verify such 
                        information.
                    (B) Alternative procedures.--The Commissioner shall 
                establish procedures for the verification of income for 
                purposes of this subtitle if no income tax return is 
                available for the most recent completed tax year.
    (c) Special Rules.--
            (1) Changes in income as a percent of fpl.--In the case 
        that an individual's income (expressed as a percentage of the 
        Federal poverty level for a family of the size involved) for a 
        plan year is expected (in a manner specified by the 
        Commissioner) to be significantly different from the income (as 
        so expressed) used under subsection (a), the Commissioner shall 
        establish rules requiring an individual to report, consistent 
        with the mechanism established under paragraph (2), significant 
        changes in such income (including a significant change in 
        family composition) to the Commissioner and requiring the 
        substitution of such income for the income otherwise 
        applicable.
            (2) Reporting of significant changes in income.--The 
        Commissioner shall establish rules under which an individual 
        determined to be an affordable credit eligible individual would 
        be required to inform the Commissioner when there is a 
        significant change in the family income of the individual 
        (expressed as a percentage of the FPL for a family of the size 
        involved) and of the information regarding such change. Such 
        mechanism shall provide for guidelines that specify the 
        circumstances that qualify as a significant change, the 
        verifiable information required to document such a change, and 
        the process for submission of such information. If the 
        Commissioner receives new information from an individual 
        regarding the family income of the individual, the Commissioner 
        shall provide for a redetermination of the individual's 
        eligibility to be an affordable credit eligible individual.
            (3) Transition for chip.--In the case of a child described 
        in section 202(d)(2), the Commissioner shall establish rules 
        under which the family income of the child is deemed to be no 
        greater than the family income of the child as most recently 
        determined before Y1 by the State under title XXI of the Social 
        Security Act.
            (4) Study of geographic variation in application of fpl.--
        The Commissioner shall examine the feasibility and implication 
        of adjusting the application of the Federal poverty level under 
        this subtitle for different geographic areas so as to reflect 
        the variations in cost-of-living among different areas within 
        the United States. If the Commissioner determines that an 
        adjustment is feasible, the study should include a methodology 
        to make such an adjustment. Not later than the first day of Y2, 
        the Commissioner shall submit to Congress a report on such 
        study and shall include such recommendations as the 
        Commissioner determines appropriate.
    (d) Penalties for Misrepresentation.--In the case of an individual 
intentionally misrepresents family income or the individual fails 
(without regard to intent) to disclose to the Commissioner a 
significant change in family income under subsection (c) in a manner 
that results in the individual becoming an affordable credit eligible 
individual when the individual is not or in the amount of the 
affordability credit exceeding the correct amount--
            (1) the individual is liable for repayment of the amount of 
        the improper affordability credit; ;and
            (2) in the case of such an intentional misrepresentation or 
        other egregious circumstances specified by the Commissioner, 
        the Commissioner may impose an additional penalty.

SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

    Nothing in this subtitle shall allow Federal payments for 
affordability credits on behalf of individuals who are not lawfully 
present in the United States.

                    TITLE III--SHARED RESPONSIBILITY

                 Subtitle A--Individual Responsibility

SEC. 301. INDIVIDUAL RESPONSIBILITY.

    For an individual's responsibility to obtain acceptable coverage, 
see section 59B of the Internal Revenue Code of 1986 (as added by 
section 401 of this division).

                  Subtitle B--Employer Responsibility

           PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS

SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    An employer meets the requirements of this section if such employer 
does all of the following:
            (1) Offer of coverage.--The employer offers each employee 
        individual and family coverage under a qualified health 
        benefits plan (or under a current employment-based health plan 
        (within the meaning of section 102(b))) in accordance with 
        section 312.
            (2) Contribution towards coverage.--If an employee accepts 
        such offer of coverage, the employer makes timely contributions 
        towards such coverage in accordance with section 312.
            (3) Contribution in lieu of coverage.--Beginning with Y2, 
        if an employee declines such offer but otherwise obtains 
        coverage in an Exchange-participating health benefits plan 
        (other than by reason of being covered by family coverage as a 
        spouse or dependent of the primary insured), the employer shall 
        make a timely contribution to the Health Insurance Exchange 
        with respect to each such employee in accordance with section 
        313.

SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND 
              DEPENDENT COVERAGE.

    (a) In General.--An employer meets the requirements of this section 
with respect to an employee if the following requirements are met:
            (1) Offering of coverage.--The employer offers the coverage 
        described in section 311(1) either through an Exchange-
        participating health benefits plan or other than through such a 
        plan.
            (2) Employer required contribution.--The employer timely 
        pays to the issuer of such coverage an amount not less than the 
        employer required contribution specified in subsection (b) for 
        such coverage.
            (3) Provision of information.--The employer provides the 
        Health Choices Commissioner, the Secretary of Labor, the 
        Secretary of Health and Human Services, and the Secretary of 
        the Treasury, as applicable, with such information as the 
        Commissioner may require to ascertain compliance with the 
        requirements of this section.
            (4) Autoenrollment of employees.--The employer provides for 
        autoenrollment of the employee in accordance with subsection 
        (c).
    (b) Reduction of Employee Premiums Through Minimum Employer 
Contribution.--
            (1) Full-time employees.--The minimum employer contribution 
        described in this subsection for coverage of a full-time 
        employee (and, if any, the employee's spouse and qualifying 
        children (as defined in section 152(c) of the Internal Revenue 
        Code of 1986) under a qualified health benefits plan (or 
        current employment-based health plan) is equal to--
                    (A) in case of individual coverage, not less than 
                72.5 percent of the applicable premium (as defined in 
                section 4980B(f)(4) of such Code, subject to paragraph 
                (2)) of the lowest cost plan offered by the employer 
                that is a qualified health benefits plan (or is such 
                current employment-based health plan); and
                    (B) in the case of family coverage which includes 
                coverage of such spouse and children, not less 65 
                percent of such applicable premium of such lowest cost 
                plan.
            (2) Applicable premium for exchange coverage.--In this 
        subtitle, the amount of the applicable premium of the lowest 
        cost plan with respect to coverage of an employee under an 
        Exchange-participating health benefits plan is the reference 
        premium amount under section 243(c) for individual coverage 
        (or, if elected, family coverage) for the premium rating area 
        in which the individual or family resides.
            (3) Minimum employer contribution for employees other than 
        full-time employees.--In the case of coverage for an employee 
        who is not a full-time employee, the amount of the minimum 
        employer contribution under this subsection shall be a 
        proportion (as determined in accordance with rules of the 
        Health Choices Commissioner, the Secretary of Labor, the 
        Secretary of Health and Human Services, and the Secretary of 
        the Treasury, as applicable) of the minimum employer 
        contribution under this subsection with respect to a full-time 
        employee that reflects the proportion of--
                    (A) the average weekly hours of employment of the 
                employee by the employer, to
                    (B) the minimum weekly hours specified by the 
                Commissioner for an employee to be a full-time 
                employee.
            (4) Salary reductions not treated as employer 
        contributions.--For purposes of this section, any contribution 
        on behalf of an employee with respect to which there is a 
        corresponding reduction in the compensation of the employee 
        shall not be treated as an amount paid by the employer.
    (c) Automatic Enrollment for Employer Sponsored Health Benefits.--
            (1) In general.--The requirement of this subsection with 
        respect to an employer and an employee is that the employer 
        automatically enroll such employee into the employment-based 
        health benefits plan for individual coverage under the plan 
        option with the lowest applicable employee premium.
            (2) Opt-out.--In no case may an employer automatically 
        enroll an employee in a plan under paragraph (1) if such 
        employee makes an affirmative election to opt out of such plan 
        or to elect coverage under an employment-based health benefits 
        plan offered by such employer. An employer shall provide an 
        employee with a 30-day period to make such an affirmative 
        election before the employer may automatically enroll the 
        employee in such a plan.
            (3) Notice requirements.--
                    (A) In general.--Each employer described in 
                paragraph (1) who automatically enrolls an employee 
                into a plan as described in such paragraph shall 
                provide the employees, within a reasonable period 
                before the beginning of each plan year (or, in the case 
                of new employees, within a reasonable period before the 
                end of the enrollment period for such a new employee), 
                written notice of the employees' rights and obligations 
                relating to the automatic enrollment requirement under 
                such paragraph. Such notice must be comprehensive and 
                understood by the average employee to whom the 
                automatic enrollment requirement applies.
                    (B) Inclusion of specific information.--The written 
                notice under subparagraph (A) must explain an 
                employee's right to opt out of being automatically 
                enrolled in a plan and in the case that more than one 
                level of benefits or employee premium level is offered 
                by the employer involved, the notice must explain which 
                level of benefits and employee premium level the 
                employee will be automatically enrolled in the absence 
                of an affirmative election by the employee.

SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.

    (a) In General.--A contribution is made in accordance with this 
section with respect to an employee if such contribution is equal to an 
amount equal to 8 percent of the average wages paid by the employer 
during the period of enrollment (determined by taking into account all 
employees of the employer and in such manner as the Commissioner 
provides, including rules providing for the appropriate aggregation of 
related employers). Any such contribution--
            (1) shall be paid to the Health Choices Commissioner for 
        deposit into the Health Insurance Exchange Trust Fund, and
            (2) shall not be applied against the premium of the 
        employee under the Exchange-participating health benefits plan 
        in which the employee is enrolled.
    (b) Special Rules for Small Employers.--
            (1) In general.--In the case of any employer who is a small 
        employer for any calendar year, subsection (a) shall be applied 
        by substituting the applicable percentage determined in 
        accordance with the following table for ``8 percent'':

If the annual payroll of such employer   The applicable percentage is:
 for the preceding calendar year:
  Does not exceed $250,000.............  0 percent
  Exceeds $250,000, but does not exceed  2 percent
   $300,000.
  Exceeds $300,000, but does not exceed  4 percent
   $350,000.
  Exceeds $350,000, but does not exceed  6 percent
   $400,000.
 

            (2) Small employer.--For purposes of this subsection, the 
        term ``small employer'' means any employer for any calendar 
        year if the annual payroll of such employer for the preceding 
        calendar year does not exceed $400,000.
            (3) Annual payroll.--For purposes of this paragraph, the 
        term ``annual payroll'' means, with respect to any employer for 
        any calendar year, the aggregate wages paid by the employer 
        during such calendar year.
            (4) Aggregation rules.--Related employers and predecessors 
        shall be treated as a single employer for purposes of this 
        subsection.

SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.

    The Health Choices Commissioner (in coordination with the Secretary 
of Labor, the Secretary of Health and Human Services, and the Secretary 
of the Treasury) shall have authority to set standards for determining 
whether employers or insurers are undertaking any actions to affect the 
risk pool within the Health Insurance Exchange by inducing individuals 
to decline coverage under a qualified health benefits plan (or current 
employment-based health plan (within the meaning of section 102(b)) 
offered by the employer and instead to enroll in an Exchange-
participating health benefits plan. An employer violating such 
standards shall be treated as not meeting the requirements of this 
section.

   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.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the end the 
following new part:

     ``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH 
              COVERAGE PARTICIPATION REQUIREMENTS.

    ``(a) In General.--An employer may make an election with the 
Secretary to be subject to the health coverage participation 
requirements.
    ``(b) Time and Manner.--An election under subsection (a) may be 
made at such time and in such form and manner as the Secretary may 
prescribe.

``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.

    ``(a) In General.--If an employer makes an election to the 
Secretary under section 801--
            ``(1) such election shall be treated as the establishment 
        and maintenance of a group health plan (as defined in section 
        733(a)) for purposes of this title, subject to section 151 of 
        the America's Affordable Health Choices Act of 2009, and
            ``(2) the health coverage participation requirements shall 
        be deemed to be included as terms and conditions of such plan.
    ``(b) Periodic Investigations to Discover Noncompliance.--The 
Secretary shall regularly audit a representative sampling of employers 
and group health plans and conduct investigations and other activities 
under section 504 with respect to such sampling of plans so as to 
discover noncompliance with the health coverage participation 
requirements in connection with such plans. The Secretary shall 
communicate findings of noncompliance made by the Secretary under this 
subsection to the Secretary of the Treasury and the Health Choices 
Commissioner. The Secretary shall take such timely enforcement action 
as appropriate to achieve compliance.

``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    ``For purposes of this part, the term `health coverage 
participation requirements' means the requirements of part 1 of 
subtitle B of title III of subdivision A of America's Affordable Health 
Choices Act of 2009 (as in effect on the date of the enactment of such 
Act).

``SEC. 804. RULES FOR APPLYING REQUIREMENTS.

    ``(a) Affiliated Groups.--In the case of any employer which is part 
of a group of employers who are treated as a single employer under 
subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue 
Code of 1986, the election under section 801 shall be made by such 
employer as the Secretary may provide. Any such election, once made, 
shall apply to all members of such group.
    ``(b) Separate Elections.--Under regulations prescribed by the 
Secretary, separate elections may be made under section 801 with 
respect to--
            ``(1) separate lines of business, and
            ``(2) full-time employees and employees who are not full-
        time employees.

``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL 
              NONCOMPLIANCE.

    ``The Secretary may terminate the election of any employer under 
section 801 if the Secretary (in coordination with the Health Choices 
Commissioner) determines that such employer is in substantial 
noncompliance with the health coverage participation requirements and 
shall refer any such determination to the Secretary of the Treasury as 
appropriate.

``SEC. 806. REGULATIONS.

    ``The Secretary may promulgate such regulations as may be necessary 
or appropriate to carry out the provisions of this part, in accordance 
with section 324(a) of the America's Affordable Health Choices Act of 
2009. The Secretary may promulgate any interim final rules as the 
Secretary determines are appropriate to carry out this part.''.
    (b) Enforcement of Health Coverage Participation Requirements.--
Section 502 of such Act (29 U.S.C. 1132) is amended--
            (1) in subsection (a)(6), by striking ``paragraph'' and all 
        that follows through ``subsection (c)'' and inserting 
        ``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of 
        subsection (c)''; and
            (2) in subsection (c), by redesignating the second 
        paragraph (10) as paragraph (12) and by inserting after the 
        first paragraph (10) the following new paragraph:
            ``(11) Health coverage participation requirements.--
                    ``(A) Civil penalties.--In the case of any employer 
                who fails (during any period with respect to which an 
                election under section 801(a) is in effect) to satisfy 
                the health coverage participation requirements with 
                respect to any employee, the Secretary may assess a 
                civil penalty against the employer of $100 for each day 
                in the period beginning on the date such failure first 
                occurs and ending on the date such failure is 
                corrected.
                    ``(B) Health coverage participation requirements.--
                For purposes of this paragraph, the term `health 
                coverage participation requirements' has the meaning 
                provided in section 803.
                    ``(C) Limitations on amount of penalty.--
                            ``(i) Penalty not to apply where failure 
                        not discovered exercising reasonable 
                        diligence.--No penalty shall be assessed under 
                        subparagraph (A) with respect to any failure 
                        during any period for which it is established 
                        to the satisfaction of the Secretary that the 
                        employer did not know, or exercising reasonable 
                        diligence would not have known, that such 
                        failure existed.
                            ``(ii) Penalty not to apply to failures 
                        corrected within 30 days.--No penalty shall be 
                        assessed under subparagraph (A) with respect to 
                        any failure if--
                                    ``(I) such failure was due to 
                                reasonable cause and not to willful 
                                neglect, and
                                    ``(II) such failure is corrected 
                                during the 30-day period beginning on 
                                the 1st date that the employer knew, or 
                                exercising reasonable diligence would 
                                have known, that such failure existed.
                            ``(iii) Overall limitation for 
                        unintentional failures.--In the case of 
                        failures which are due to reasonable cause and 
                        not to willful neglect, the penalty assessed 
                        under subparagraph (A) for failures during any 
                        1-year period shall not exceed the amount equal 
                        to the lesser of--
                                    ``(I) 10 percent of the aggregate 
                                amount paid or incurred by the employer 
                                (or predecessor employer) during the 
                                preceding 1-year period for group 
                                health plans, or
                                    ``(II) $500,000.
                    ``(D) Advance notification of failure prior to 
                assessment.--Before a reasonable time prior to the 
                assessment of any penalty under this paragraph with 
                respect to any failure by an employer, the Secretary 
                shall inform the employer in writing of such failure 
                and shall provide the employer information regarding 
                efforts and procedures which may be undertaken by the 
                employer to correct such failure.
                    ``(E) Coordination with excise tax.--Under 
                regulations prescribed in accordance with section 324 
                of the America's Affordable Health Choices Act of 2009, 
                the Secretary and the Secretary of the Treasury shall 
                coordinate the assessment of penalties under this 
                section in connection with failures to satisfy health 
                coverage participation requirements with the imposition 
                of excise taxes on such failures under section 4980H(b) 
                of the Internal Revenue Code of 1986 so as to avoid 
                duplication of penalties with respect to such failures.
                    ``(F) Deposit of penalty collected.--Any amount of 
                penalty collected under this paragraph shall be 
                deposited as miscellaneous receipts in the Treasury of 
                the United States.''.
    (c) Clerical Amendments.--The table of contents in section 1 of 
such Act is amended by inserting after the 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.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS 
              UNDER THE INTERNAL REVENUE CODE OF 1986.

    (a) Failure to Elect, or Substantially Comply With, Health Coverage 
Participation Requirements.--For employment tax on employers who fail 
to elect, or substantially comply with, the health coverage 
participation requirements described in part 1, see section 3111(c) of 
the Internal Revenue Code of 1986 (as added by section 412 of this 
division).
    (b) Other Failures.--For excise tax on other failures of electing 
employers to comply with such requirements, see section 4980H of the 
Internal Revenue Code of 1986 (as added by section 411 of this 
division).

SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS 
              UNDER THE PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Part C of title XXVII of the Public Health Service 
Act is amended by adding at the end the following new section:

``SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    ``(a) Election of Employer to Be Subject to National Health 
Coverage Participation Requirements.--
            ``(1) In general.--An employer may make an election with 
        the Secretary to be subject to the health coverage 
        participation requirements.
            ``(2) Time and manner.--An election under paragraph (1) may 
        be made at such time and in such form and manner as the 
        Secretary may prescribe.
    ``(b) Treatment of Coverage Resulting From Election.--
            ``(1) In general.--If an employer makes an election to the 
        Secretary under subsection (a)--
                    ``(A) such election shall be treated as the 
                establishment and maintenance of a group health plan 
                for purposes of this title, subject to section 151 of 
                the America's Affordable Health Choices Act of 2009, 
                and
                    ``(B) the health coverage participation 
                requirements shall be deemed to be included as terms 
                and conditions of such plan.
            ``(2) Periodic investigations to determine compliance with 
        health coverage participation requirements.--The Secretary 
        shall regularly audit a representative sampling of employers 
        and conduct investigations and other activities with respect to 
        such sampling of employers so as to discover noncompliance with 
        the health coverage participation requirements in connection 
        with such employers (during any period with respect to which an 
        election under subsection (a) is in effect). The Secretary 
        shall communicate findings of noncompliance made by the 
        Secretary under this subsection to the Secretary of the 
        Treasury and the Health Choices Commissioner. The Secretary 
        shall take such timely enforcement action as appropriate to 
        achieve compliance.
    ``(c) Health Coverage Participation Requirements.--For purposes of 
this section, the term `health coverage participation requirements' 
means the requirements of part 1 of subtitle B of title III of 
subdivision A of the America's Affordable Health Choices Act of 2009 
(as in effect on the date of the enactment of this section).
    ``(d) Separate Elections.--Under regulations prescribed by the 
Secretary, separate elections may be made under subsection (a) with 
respect to full-time employees and employees who are not full-time 
employees.
    ``(e) Termination of Election in Cases of Substantial 
Noncompliance.--The Secretary may terminate the election of any 
employer under subsection (a) if the Secretary (in coordination with 
the Health Choices Commissioner) determines that such employer is in 
substantial noncompliance with the health coverage participation 
requirements and shall refer any such determination to the Secretary of 
the Treasury as appropriate.
    ``(f) Enforcement of Health Coverage Participation Requirements.--
            ``(1) Civil penalties.--In the case of any employer who 
        fails (during any period with respect to which the election 
        under subsection (a) is in effect) to satisfy the health 
        coverage participation requirements with respect to any 
        employee, the Secretary may assess a civil penalty against the 
        employer of $100 for each day in the period beginning on the 
        date such failure first occurs and ending on the date such 
        failure is corrected.
            ``(2) Limitations on amount of penalty.--
                    ``(A) Penalty not to apply where failure not 
                discovered exercising reasonable diligence.--No penalty 
                shall be assessed under paragraph (1) with respect to 
                any failure during any period for which it is 
                established to the satisfaction of the Secretary that 
                the employer did not know, or exercising reasonable 
                diligence would not have known, that such failure 
                existed.
                    ``(B) Penalty not to apply to failures corrected 
                within 30 days.--No penalty shall be assessed under 
                paragraph (1) with respect to any failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Overall limitation for unintentional 
                failures.--In the case of failures which are due to 
                reasonable cause and not to willful neglect, the 
                penalty assessed under paragraph (1) for failures 
                during any 1-year period shall not exceed the amount 
                equal to the lesser of--
                            ``(i) 10 percent of the aggregate amount 
                        paid or incurred by the employer (or 
                        predecessor employer) during the preceding 
                        taxable year for group health plans, or
                            ``(ii) $500,000.
            ``(3) Advance notification of failure prior to 
        assessment.--Before a reasonable time prior to the assessment 
        of any penalty under paragraph (1) with respect to any failure 
        by an employer, the Secretary shall inform the employer in 
        writing of such failure and shall provide the employer 
        information regarding efforts and procedures which may be 
        undertaken by the employer to correct such failure.
            ``(4) Actions to enforce assessments.--The Secretary may 
        bring a civil action in any District Court of the United States 
        to collect any civil penalty under this subsection.
            ``(5) Coordination with excise tax.--Under regulations 
        prescribed in accordance with section 324 of the America's 
        Affordable Health Choices Act of 2009, the Secretary and the 
        Secretary of the Treasury shall coordinate the assessment of 
        penalties under paragraph (1) in connection with failures to 
        satisfy health coverage participation requirements with the 
        imposition of excise taxes on such failures under section 
        4980H(b) of the Internal Revenue Code of 1986 so as to avoid 
        duplication of penalties with respect to such failures.
            ``(6) Deposit of penalty collected.--Any amount of penalty 
        collected under this subsection shall be deposited as 
        miscellaneous receipts in the Treasury of the United States.
    ``(g) Regulations.--The Secretary may promulgate such regulations 
as may be necessary or appropriate to carry out the provisions of this 
section, in accordance with section 324(a) of the America's Affordable 
Health Choices Act of 2009. The Secretary may promulgate any interim 
final rules as the Secretary determines are appropriate to carry out 
this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to periods beginning after December 31, 2012.

SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    (a) Assuring Coordination.--The officers consisting of the 
Secretary of Labor, the Secretary of the Treasury, the Secretary of 
Health and Human Services, and the Health Choices Commissioner shall 
ensure, through the execution of an interagency memorandum of 
understanding among such officers, that--
            (1) regulations, rulings, and interpretations issued by 
        such officers relating to the same matter over which two or 
        more of such officers have responsibility under subpart B of 
        part 6 of subtitle B of title I of the Employee Retirement 
        Income Security Act of 1974, section 4980H of the Internal 
        Revenue Code of 1986, and section 2793 of the Public Health 
        Service Act are administered so as to have the same effect at 
        all times; and
            (2) coordination of policies relating to enforcing the same 
        requirements through such officers in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.
    (b) Multiemployer Plans.--In the case of a group health plan that 
is a multiemployer plan (as defined in section 3(37) of the Employee 
Retirement Income Security Act of 1974), the regulations prescribed in 
accordance with subsection (a) by the officers referred to in 
subsection (a) shall provide for the application of the health coverage 
participation requirements to the plan sponsor and contributing 
sponsors of such plan.

         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.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

                 ``PART VIII--HEALTH CARE RELATED TAXES

    ``subpart a. tax on individuals without acceptable health care 
                               coverage.

``Subpart A--Tax on Individuals Without Acceptable Health Care Coverage

``Sec. 59B. Tax on individuals without acceptable health care coverage.

``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

    ``(a) Tax Imposed.--In the case of any individual who does not meet 
the requirements of subsection (d) at any time during the taxable year, 
there is hereby imposed a tax equal to 2.5 percent of the excess of--
            ``(1) the taxpayer's modified adjusted gross income for the 
        taxable year, over
            ``(2) the amount of gross income specified in section 
        6012(a)(1) with respect to the taxpayer.
    ``(b) Limitations.--
            ``(1) Tax limited to average premium.--
                    ``(A) In general.--The tax imposed under subsection 
                (a) with respect to any taxpayer for any taxable year 
                shall not exceed the applicable national average 
                premium for such taxable year.
                    ``(B) Applicable national average premium.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the `applicable national 
                        average premium' means, with respect to any 
                        taxable year, the average premium (as 
                        determined by the Secretary, in coordination 
                        with the Health Choices Commissioner) for self-
                        only coverage under a basic plan which is 
                        offered in a Health Insurance Exchange for the 
                        calendar year in which such taxable year 
                        begins.
                            ``(ii) Failure to provide coverage for more 
                        than one individual.--In the case of any 
                        taxpayer who fails to meet the requirements of 
                        subsection (e) with respect to more than one 
                        individual during the taxable year, clause (i) 
                        shall be applied by substituting `family 
                        coverage' for `self-only coverage'.
            ``(2) Proration for part year failures.--The tax imposed 
        under subsection (a) with respect to any taxpayer for any 
        taxable year shall not exceed the amount which bears the same 
        ratio to the amount of tax so imposed (determined without 
        regard to this paragraph and after application of paragraph 
        (1)) as--
                    ``(A) the aggregate periods during such taxable 
                year for which such individual failed to meet the 
                requirements of subsection (d), bears to
                    ``(B) the entire taxable year.
    ``(c) Exceptions.--
            ``(1) Dependents.--Subsection (a) shall not apply to any 
        individual for any taxable year if a deduction is allowable 
        under section 151 with respect to such individual to another 
        taxpayer for any taxable year beginning in the same calendar 
        year as such taxable year.
            ``(2) Nonresident aliens.--Subsection (a) shall not apply 
        to any individual who is a nonresident alien.
            ``(3) Individuals residing outside united states.--Any 
        qualified individual (as defined in section 911(d)) (and any 
        qualifying child residing with such individual) shall be 
        treated for purposes of this section as covered by acceptable 
        coverage during the period described in subparagraph (A) or (B) 
        of section 911(d)(1), whichever is applicable.
            ``(4) Individuals residing in possessions of the united 
        states.--Any individual who is a bona fide resident of any 
        possession of the United States (as determined under section 
        937(a)) for any taxable year (and any qualifying child residing 
        with such individual) shall be treated for purposes of this 
        section as covered by acceptable coverage during such taxable 
        year.
            ``(5) Religious conscience exemption.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to any individual (and any qualifying child residing 
                with such individual) for any period if such individual 
                has in effect an exemption which certifies that such 
                individual is a member of a recognized religious sect 
                or division thereof described in section 1402(g)(1) and 
                an adherent of established tenets or teachings of such 
                sect or division as described in such section.
                    ``(B) Exemption.--An application for the exemption 
                described in subparagraph (A) shall be filed with the 
                Secretary at such time and in such form and manner as 
                the Secretary may prescribe. Any such exemption granted 
                by the Secretary shall be effective for such period as 
                the Secretary determines appropriate.
    ``(d) Acceptable Coverage Requirement.--
            ``(1) In general.--The requirements of this subsection are 
        met with respect to any individual for any period if such 
        individual (and each qualifying child of such individual) is 
        covered by acceptable coverage at all times during such period.
            ``(2) Acceptable coverage.--For purposes of this section, 
        the term `acceptable coverage' means any of the following:
                    ``(A) Qualified health benefits plan coverage.--
                Coverage under a qualified health benefits plan (as 
                defined in section 100(c) of the America's Affordable 
                Health Choices Act of 2009).
                    ``(B) Grandfathered health insurance coverage; 
                coverage under grandfathered employment-based health 
                plan.--Coverage under a grandfathered health insurance 
                coverage (as defined in subsection (a) of section 102 
                of the America's Affordable Health Choices Act of 2009) 
                or under a current employment-based health plan (within 
                the meaning of subsection (b) of such section).
                    ``(C) Medicare.--Coverage under part A of title 
                XVIII of the Social Security Act.
                    ``(D) Medicaid.--Coverage for medical assistance 
                under title XIX of the Social Security Act.
                    ``(E) Members of the armed forces and dependents 
                (including tricare).--Coverage under chapter 55 of 
                title 10, United States Code, including similar 
                coverage furnished under section 1781 of title 38 of 
                such Code.
                    ``(F) VA.--Coverage under the veteran's health care 
                program under chapter 17 of title 38, United States 
                Code, but only if the coverage for the individual 
                involved is determined by the Secretary in coordination 
                with the Health Choices Commissioner to be not less 
                than the level specified by the Secretary of the 
                Treasury, in coordination with the Secretary of 
                Veteran's Affairs and the Health Choices Commissioner, 
                based on the individual's priority for services as 
                provided under section 1705(a) of such title.
                    ``(G) Other coverage.--Such other health benefits 
                coverage as the Secretary, in coordination with the 
                Health Choices Commissioner, recognizes for purposes of 
                this subsection.
    ``(e) Other Definitions and Special Rules.--
            ``(1) Qualifying child.--For purposes of this section, the 
        term `qualifying child' has the meaning given such term by 
        section 152(c). With respect to any period during which health 
        coverage for a child must be provided by an individual pursuant 
        to a child support order, such child shall be treated as a 
        qualifying child of such individual (and not as a qualifying 
        child of any other individual).
            ``(2) Basic plan.--For purposes of this section, the term 
        `basic plan' has the meaning given such term under section 
        100(c) of the America's Affordable Health Choices Act of 2009.
            ``(3) Health insurance exchange.--For purposes of this 
        section, the term `Health Insurance Exchange' has the meaning 
        given such term under section 100(c) of the America's 
        Affordable Health Choices Act of 2009, including any State-
        based health insurance exchange approved for operation under 
        section 208 of such Act.
            ``(4) Family coverage.--For purposes of this section, the 
        term `family coverage' means any coverage other than self-only 
        coverage.
            ``(5) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to section 911, and
                    ``(B) increased by the amount of interest received 
                or accrued by the taxpayer during the taxable year 
                which is exempt from tax.
            ``(6) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance 
(developed in coordination with the Health Choices Commissioner) which 
provide--
            ``(1) exemption from the tax imposed under subsection (a) 
        in cases of de minimis lapses of acceptable coverage, and
            ``(2) a process for applying for a waiver of the 
        application of subsection (a) in cases of hardship.''.
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code is amended by inserting after section 
        6050W the following new section:

``SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.

    ``(a) Requirement of Reporting.--Every person who provides 
acceptable coverage (as defined in section 59B(d)) to any individual 
during any calendar year shall, at such time as the Secretary may 
prescribe, make the return described in subsection (b) with respect to 
such individual.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of the primary 
                insured and the name of each other individual obtaining 
                coverage under the policy,
                    ``(B) the period for which each such individual was 
                provided with the coverage referred to in subsection 
                (a), and
                    ``(C) such other information as the Secretary may 
                require.
    ``(c) Statements to Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each primary insured whose name 
is required to be set forth in such return a written statement 
showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such individual.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(d) Coverage Provided by Governmental Units.--In the case of 
coverage provided by any governmental unit or any agency or 
instrumentality thereof, the officer or employee who enters into the 
agreement to provide such coverage (or the person appropriately 
designated for purposes of this section) shall make the returns and 
statements required by this section.''.
            (2) Penalty for failure to file.--
                    (A) Return.--Subparagraph (B) of section 6724(d)(1) 
                of such Code is amended by striking ``or'' at the end 
                of clause (xxii), by striking ``and'' at the end of 
                clause (xxiii) and inserting ``or'', and by adding at 
                the end the following new clause:
                            ``(xxiv) section 6050X (relating to returns 
                        relating to health insurance coverage), and''.
                    (B) Statement.--Paragraph (2) of section 6724(d) of 
                such Code is amended by striking ``or'' at the end of 
                subparagraph (EE), by striking the period at the end of 
                subparagraph (FF) and inserting ``, or'', and by 
                inserting after subparagraph (FF) the following new 
                subparagraph:
                    ``(GG) section 6050X (relating to returns relating 
                to health insurance coverage).''.
    (c) Return Requirement.--Subsection (a) of section 6012 of such 
Code is amended by inserting after paragraph (9) the following new 
paragraph:
            ``(10) Every individual to whom section 59B(a) applies and 
        who fails to meet the requirements of section 59B(d) with 
        respect to such individual or any qualifying child (as defined 
        in section 152(c)) of such individual.''.
    (d) Clerical Amendments.--
            (1) The table of parts for subchapter A of chapter 1 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new item:

               ``Part VIII. Health Care Related Taxes.''.

            (2) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 is amended by adding at the end the 
        following new item:

``Sec. 6050X. Returns relating to health insurance coverage.''.
    (e) Section 15 Not to Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (f) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2012.
            (2) Returns.--The amendments made by subsection (b) shall 
        apply to calendar years beginning after December 31, 2012.

                    PART 2--EMPLOYER RESPONSIBILITY

SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    ``(a) Election of Employer Responsibility to Provide Health 
Coverage.--
            ``(1) In general.--Subsection (b) shall apply to any 
        employer with respect to whom an election under paragraph (2) 
        is in effect.
            ``(2) Time and manner.--An employer may make an election 
        under this paragraph at such time and in such form and manner 
        as the Secretary may prescribe.
            ``(3) Affiliated groups.--In the case of any employer which 
        is part of a group of employers who are treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414, 
        the election under paragraph (2) shall be made by such person 
        as the Secretary may provide. Any such election, once made, 
        shall apply to all members of such group.
            ``(4) Separate elections.--Under regulations prescribed by 
        the Secretary, separate elections may be made under paragraph 
        (2) with respect to--
                    ``(A) separate lines of business, and
                    ``(B) full-time employees and employees who are not 
                full-time employees.
            ``(5) Termination of election in cases of substantial 
        noncompliance.--The Secretary may terminate the election of any 
        employer under paragraph (2) if the Secretary (in coordination 
        with the Health Choices Commissioner) determines that such 
        employer is in substantial noncompliance with the health 
        coverage participation requirements.
    ``(b) Excise Tax With Respect to Failure to Meet Health Coverage 
Participation Requirements.--
            ``(1) In general.--In the case of any employer who fails 
        (during any period with respect to which the election under 
        subsection (a) is in effect) to satisfy the health coverage 
        participation requirements with respect to any employee to whom 
        such election applies, there is hereby imposed on each such 
        failure with respect to each such employee a tax of $100 for 
        each day in the period beginning on the date such failure first 
        occurs and ending on the date such failure is corrected.
            ``(2) Limitations on amount of tax.--
                    ``(A) Tax not to apply where failure not discovered 
                exercising reasonable diligence.--No tax shall be 
                imposed by paragraph (1) on any failure during any 
                period for which it is established to the satisfaction 
                of the Secretary that the employer neither knew, nor 
                exercising reasonable diligence would have known, that 
                such failure existed.
                    ``(B) Tax not to apply to failures corrected within 
                30 days.--No tax shall be imposed by paragraph (1) on 
                any failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Overall limitation for unintentional 
                failures.--In the case of failures which are due to 
                reasonable cause and not to willful neglect, the tax 
                imposed by subsection (a) for failures during the 
                taxable year of the employer shall not exceed the 
                amount equal to the lesser of--
                            ``(i) 10 percent of the aggregate amount 
                        paid or incurred by the employer (or 
                        predecessor employer) during the preceding 
                        taxable year for employment-based health plans, 
                        or
                            ``(ii) $500,000.
                    ``(D) Coordination with other enforcement 
                provisions.--The tax imposed under paragraph (1) with 
                respect to any failure shall be reduced (but not below 
                zero) by the amount of any civil penalty collected 
                under section 502(c)(11) of the Employee Retirement 
                Income Security Act of 1974 or section 2793(g) of the 
                Public Health Service Act with respect to such failure.
    ``(c) Health Coverage Participation Requirements.--For purposes of 
this section, the term `health coverage participation requirements' 
means the requirements of part I of subtitle B of title III of the 
America's Affordable Health Choices Act of 2009 (as in effect on the 
date of the enactment of this section).''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:

``Sec. 4980H. Election with respect to health coverage participation 
                            requirements.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.

    (a) In General.--Section 3111 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (c) as subsection (d) and by 
inserting after subsection (b) the following new subsection:
    ``(c) Employers Electing to Not Provide Health Benefits.--
            ``(1) In general.--In addition to other taxes, there is 
        hereby imposed on every nonelecting employer an excise tax, 
        with respect to having individuals in his employ, equal to 8 
        percent of the wages (as defined in section 3121(a)) paid by 
        him with respect to employment (as defined in section 3121(b)).
            ``(2) Special rules for small employers.--
                    ``(A) In general.--In the case of any employer who 
                is small employer for any calendar year, paragraph (1) 
                shall be applied by substituting the applicable 
                percentage determined in accordance with the following 
                table for `8 percent':

``If the annual payroll of such          The applicable percentage is:
 employer for the preceding calendar
 year:
  Does not exceed $250,000.............  0 percent
  Exceeds $250,000, but does not exceed  2 percent
   $300,000.
  Exceeds $300,000, but does not exceed  4 percent
   $350,000.
  Exceeds $350,000, but does not exceed  6 percent
   $400,000.
 

                    ``(B) Small employer.--For purposes of this 
                paragraph, the term `small employer' means any employer 
                for any calendar year if the annual payroll of such 
                employer for the preceding calendar year does not 
                exceed $400,000.
                    ``(C) Annual payroll.--For purposes of this 
                paragraph, the term `annual payroll' means, with 
                respect to any employer for any calendar year, the 
                aggregate wages (as defined in section 3121(a)) paid by 
                him with respect to employment (as defined in section 
                3121(b)) during such calendar year.
            ``(3) Nonelecting employer.--For purposes of paragraph (1), 
        the term `nonelecting employer' means any employer for any 
        period with respect to which such employer does not have an 
        election under section 4980H(a) in effect.
            ``(4) Special rule for separate elections.--In the case of 
        an employer who makes a separate election described in section 
        4980H(a)(4) for any period, paragraph (1) shall be applied for 
        such period by taking into account only the wages paid to 
        employees who are not subject to such election.
            ``(5) Aggregation; predecessors.--For purposes of this 
        subsection--
                    ``(A) all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                shall be treated as 1 employer, and
                    ``(B) any reference to any person shall be treated 
                as including a reference to any predecessor of such 
                person.''.
    (b) Definitions.--Section 3121 of such Code is amended by adding at 
the end the following new subsection:
    ``(aa) Special Rules for Tax on Employers Electing Not to Provide 
Health Benefits.--For purposes of section 3111(c)--
            ``(1) Paragraphs (1), (5), and (19) of subsection (b) shall 
        not apply.
            ``(2) Paragraph (7) of subsection (b) shall apply by 
        treating all services as not covered by the retirement systems 
        referred to in subparagraphs (C) and (F) thereof.
            ``(3) Subsection (e) shall not apply and the term `State' 
        shall include the District of Columbia.''.
    (c) Conforming Amendment.--Subsection (d) of section 3111 of such 
Code, as redesignated by this section, is amended by striking ``this 
section'' and inserting ``subsections (a) and (b)''.
    (d) Application to Railroads.--
            (1) In general.--Section 3221 of such Code is amended by 
        redesignating subsection (c) as subsection (d) and by inserting 
        after subsection (b) the following new subsection:
    ``(c) Employers Electing to Not Provide Health Benefits.--
            ``(1) In general.--In addition to other taxes, there is 
        hereby imposed on every nonelecting employer an excise tax, 
        with respect to having individuals in his employ, equal to 8 
        percent of the compensation paid during any calendar year by 
        such employer for services rendered to such employer.
            ``(2) Exception for small employers.--Rules similar to the 
        rules of section 3111(c)(2) shall apply for purposes of this 
        subsection.
            ``(3) Nonelecting employer.--For purposes of paragraph (1), 
        the term `nonelecting employer' means any employer for any 
        period with respect to which such employer does not have an 
        election under section 4980H(a) in effect.
            ``(4) Special rule for separate elections.--In the case of 
        an employer who makes a separate election described in section 
        4980H(a)(4) for any period, subsection (a) shall be applied for 
        such period by taking into account only the wages paid to 
        employees who are not subject to such election.''.
            (2) Definitions.--Subsection (e) of section 3231 of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(13) Special rules for tax on employers electing not to 
        provide health benefits.--For purposes of section 3221(c)--
                    ``(A) Paragraph (1) shall be applied without regard 
                to the third sentence thereof.
                    ``(B) Paragraph (2) shall not apply.''.
            (3) Conforming amendment.--Subsection (d) of section 3221 
        of such Code, as redesignated by this section, is amended by 
        striking ``subsections (a) and (b), see section 3231(e)(2)'' 
        and inserting ``this section, see paragraphs (2) and (13)(B) of 
        section 3231(e)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

Subtitle B--Credit for Small Business Employee Health Coverage Expenses

SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.

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

``SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of a 
qualified small employer, the small business employee health coverage 
credit determined under this section for the taxable year is an amount 
equal to the applicable percentage of the qualified employee health 
coverage expenses of such employer for such taxable year.
    ``(b) Applicable Percentage.--
            ``(1) In general.--For purposes of this section, the 
        applicable percentage is 50 percent.
            ``(2) Phaseout based on average compensation of 
        employees.--In the case of an employer whose average annual 
        employee compensation for the taxable year exceeds $20,000, the 
        percentage specified in paragraph (1) shall be reduced by a 
        number of percentage points which bears the same ratio to 50 as 
        such excess bears to $20,000.
    ``(c) Limitations.--
            ``(1) Phaseout based on employer size.--In the case of an 
        employer who employs more than 10 qualified employees during 
        the taxable year, the credit determined under subsection (a) 
        shall be reduced by an amount which bears the same ratio to the 
        amount of such credit (determined without regard to this 
        paragraph and after the application of the other provisions of 
        this section) as--
                    ``(A) the excess of--
                            ``(i) the number of qualified employees 
                        employed by the employer during the taxable 
                        year, over
                            ``(ii) 10, bears to
                    ``(B) 15.
            ``(2) Credit not allowed with respect to certain highly 
        compensated employees.--No credit shall be allowed under 
        subsection (a) with respect to qualified employee health 
        coverage expenses paid or incurred with respect to any employee 
        for any taxable year if the aggregate compensation paid by the 
        employer to such employee during such taxable year exceeds 
        $80,000.
    ``(d) Qualified Employee Health Coverage Expenses.--For purposes of 
this section--
            ``(1) In general.--The term `qualified employee health 
        coverage expenses' means, with respect to any employer for any 
        taxable year, the aggregate amount paid or incurred by such 
        employer during such taxable year for coverage of any qualified 
        employee of the employer (including any family coverage which 
        covers such employee) under qualified health coverage.
            ``(2) Qualified health coverage.--The term `qualified 
        health coverage' means acceptable coverage (as defined in 
        section 59B(d)) which--
                    ``(A) is provided pursuant to an election under 
                section 4980H(a), and
                    ``(B) satisfies the requirements referred to in 
                section 4980H(c).
    ``(e) Other Definitions.--For purposes of this section--
            ``(1) Qualified small employer.--For purposes of this 
        section, the term `qualified small employer' means any employer 
        for any taxable year if--
                    ``(A) the number of qualified employees employed by 
                such employer during the taxable year does not exceed 
                25, and
                    ``(B) the average annual employee compensation of 
                such employer for such taxable year does not exceed the 
                sum of the dollar amounts in effect under subsection 
                (b)(2).
            ``(2) Qualified employee.--The term `qualified employee' 
        means any employee of an employer for any taxable year of the 
        employer if such employee received at least $5,000 of 
        compensation from such employer for services performed in the 
        trade or business of such employer during such taxable year.
            ``(3) Average annual employee compensation.--The term 
        `average annual employee compensation' means, with respect to 
        any employer for any taxable year, the average amount of 
        compensation paid by such employer to qualified employees of 
        such employer during such taxable year.
            ``(4) Compensation.--The term `compensation' has the 
        meaning given such term in section 408(p)(6)(A).
            ``(5) Family coverage.--The term `family coverage' means 
        any coverage other than self-only coverage.
    ``(f) Special Rules.--For purposes of this section--
            ``(1) Special rule for partnerships and self-employed.--In 
        the case of a partnership (or a trade or business carried on by 
        an individual) which has one or more qualified employees 
        (determined without regard to this paragraph) with respect to 
        whom the election under 4980H(a) applies, each partner (or, in 
        the case of a trade or business carried on by an individual, 
        such individual) shall be treated as an employee.
            ``(2) Aggregation rule.--All persons treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        shall be treated as 1 employer.
            ``(3) Denial of double benefit.--Any deduction otherwise 
        allowable with respect to amounts paid or incurred for health 
        insurance coverage to which subsection (a) applies shall be 
        reduced by the amount of the credit determined under this 
        section.
            ``(4) Inflation adjustment.--In the case of any taxable 
        year beginning after 2013, each of the dollar amounts in 
        subsections (b)(2), (c)(2), and (e)(2) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost of living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins determined by substituting 
                `calendar year 2012' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any increase determined under this paragraph is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.''.
    (b) Credit to Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code (relating to general business credit) is 
amended by striking ``plus'' at the end of paragraph (34), by striking 
the period at the end of paragraph (35) and inserting ``, plus'' , and 
by adding at the end the following new paragraph:
            ``(36) in the case of a qualified small employer (as 
        defined in section 45R(e)), the small business employee health 
        coverage credit determined under section 45R(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45Q the following new 
item:

``Sec. 45R. Small business employee health coverage credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

    Subtitle C--Disclosures to Carry Out Health Insurance Exchange 
                               Subsidies

SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

    (a) In General.--Subsection (l) of section 6103 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(21) Disclosure of return information to carry out health 
        insurance exchange subsidies.--
                    ``(A) In general.--The Secretary, upon written 
                request from the Health Choices Commissioner or the 
                head of a State-based health insurance exchange 
                approved for operation under section 208 of the 
                America's Affordable Health Choices Act of 2009, shall 
                disclose to officers and employees of the Health 
                Choices Administration or such State-based health 
                insurance exchange, as the case may be, return 
                information of any taxpayer whose income is relevant in 
                determining any affordability credit described in 
                subtitle C of title II of the America's Affordable 
                Health Choices Act of 2009. Such return information 
                shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the modified adjusted gross income 
                        of such taxpayer (as defined in section 
                        59B(e)(5)),
                            ``(iv) the number of dependents of the 
                        taxpayer,
                            ``(v) such other information as is 
                        prescribed by the Secretary by regulation as 
                        might indicate whether the taxpayer is eligible 
                        for such affordability credits (and the amount 
                        thereof), and
                            ``(vi) the taxable year with respect to 
                        which the preceding information relates or, if 
                        applicable, the fact that such information is 
                        not available.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Health Choices Administration or such State-
                based health insurance exchange, as the case may be, 
                only for the purposes of, and to the extent necessary 
                in, establishing and verifying the appropriate amount 
                of any affordability credit described in subtitle C of 
                title II of the America's Affordable Health Choices Act 
                of 2009 and providing for the repayment of any such 
                credit which was in excess of such appropriate 
                amount.''.
    (b) Procedures and Recordkeeping Related to Disclosures.--Paragraph 
(4) of section 6103(p) of such Code is amended--
            (1) by inserting ``, or any entity described in subsection 
        (l)(21),'' after ``or (20)'' in the matter preceding 
        subparagraph (A),
            (2) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (o)(1)(A),'' in subparagraph (F)(ii), and
            (3) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (20),'' both places it appears in the 
        matter after subparagraph (F).
    (c) Unauthorized Disclosure or Inspection.--Paragraph (2) of 
section 7213(a) of such Code is amended by striking ``or (20)'' and 
inserting ``(20), or (21)''.

                  Subtitle D--Other Revenue Provisions

                       PART 1--GENERAL PROVISIONS

SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    (a) In General.--Part VIII of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986, as added by this title, is amended by 
adding at the end the following new subpart:

           ``Subpart B--Surcharge on High Income Individuals

``Sec. 59C. Surcharge on high income individuals.

``SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    ``(a) General Rule.--In the case of a taxpayer other than a 
corporation, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to--
            ``(1) 1 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $350,000 but does not exceed 
        $500,000,
            ``(2) 1.5 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $500,000 but does not exceed 
        $1,000,000, and
            ``(3) 5.4 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $1,000,000.
    ``(b) Taxpayers Not Making a Joint Return.--In the case of any 
taxpayer other than a taxpayer making a joint return under section 6013 
or a surviving spouse (as defined in section 2(a)), subsection (a) 
shall be applied by substituting for each of the dollar amounts therein 
(after any increase determined under subsection (e)) a dollar amount 
equal to--
            ``(1) 50 percent of the dollar amount so in effect in the 
        case of a married individual filing a separate return, and
            ``(2) 80 percent of the dollar amount so in effect in any 
        other case.
    ``(c) Adjustments Based on Federal Health Reform Savings.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        the case of any taxable year beginning after December 31, 2012, 
        subsection (a) shall be applied--
                    ``(A) by substituting `2 percent' for `1 percent', 
                and
                    ``(B) by substituting `3 percent' for `1.5 
                percent'.
            ``(2) Adjustments based on excess federal health reform 
        savings.--
                    ``(A) Exception if federal health reform savings 
                significantly exceeds base amount.--If the excess 
                Federal health reform savings is more than 
                $150,000,000,000 but not more than $175,000,000,000, 
                paragraph (1) shall not apply.
                    ``(B) Further adjustment for additional federal 
                health reform savings.--If the excess Federal health 
                reform savings is more than $175,000,000,000, 
                paragraphs (1) and (2) of subsection (a) (and paragraph 
                (1) of this subsection) shall not apply to any taxable 
                year beginning after December 31, 2012.
                    ``(C) Excess federal health reform savings.--For 
                purposes of this subsection, the term `excess Federal 
                health reform savings' means the excess of--
                            ``(i) the Federal health reform savings, 
                        over
                            ``(ii) $525,000,000,000.
                    ``(D) Federal health reform savings.--The term 
                `Federal health reform savings' means the sum of the 
                amounts described in subparagraphs (A) and (B) of 
                paragraph (3).
            ``(3) Determination of federal health reform savings.--Not 
        later than December 1, 2012, the Director of the Office of 
        Management and Budget shall--
                    ``(A) determine, on the basis of the study 
                conducted under paragraph (4), the aggregate reductions 
                in Federal expenditures which have been achieved as a 
                result of the provisions of, and amendments made by, 
                subdivision B of the America's Affordable Health 
                Choices Act of 2009 during the period beginning on 
                October 1, 2009, and ending with the latest date with 
                respect to which the Director has sufficient data to 
                make such determination, and
                    ``(B) estimate, on the basis of such study and the 
                determination under subparagraph (A), the aggregate 
                reductions in Federal expenditures which will be 
                achieved as a result of such provisions and amendments 
                during so much of the period beginning with fiscal year 
                2010 and ending with fiscal year 2019 as is not taken 
                into account under subparagraph (A).
            ``(4) Study of federal health reform savings.--The Director 
        of the Office of Management and Budget shall conduct a study of 
        the reductions in Federal expenditures during fiscal years 2010 
        through 2019 which are attributable to the provisions of, and 
        amendments made by, subdivision B of the America's Affordable 
        Health Choices Act of 2009. The Director shall complete such 
        study not later than December 1, 2012.
            ``(5) Reductions in federal expenditures determined without 
        regard to program investments.--For purposes of paragraphs (3) 
        and (4), reductions in Federal expenditures shall be determined 
        without regard to section 1121 of the America's Affordable 
        Health Choices Act of 2009 and other program investments under 
        subdivision B thereof.
    ``(d) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income reduced by any deduction (not taken into account in determining 
adjusted gross income) allowed for investment interest (as defined in 
section 163(d)). In the case of an estate or trust, adjusted gross 
income shall be determined as provided in section 67(e).
    ``(e) Inflation Adjustments.--
            ``(1) In general.--In the case of taxable years beginning 
        after 2011, the dollar amounts in subsection (a) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                2010' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $5,000, such amount shall be rounded 
        to the next lowest multiple of $5,000.
    ``(f) Special Rules.--
            ``(1) Nonresident alien.--In the case of a nonresident 
        alien individual, only amounts taken into account in connection 
        with the tax imposed under section 871(b) shall be taken into 
        account under this section.
            ``(2) Citizens and residents living abroad.--The dollar 
        amounts in effect under subsection (a) (after the application 
        of subsections (b) and (e)) shall be decreased by the excess 
        of--
                    ``(A) the amounts excluded from the taxpayer's 
                gross income under section 911, over
                    ``(B) the amounts of any deductions or exclusions 
                disallowed under section 911(d)(6) with respect to the 
                amounts described in subparagraph (A).
            ``(3) Charitable trusts.--Subsection (a) shall not apply to 
        a trust all the unexpired interests in which are devoted to one 
        or more of the purposes described in section 170(c)(2)(B).
            ``(4) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.''.
    (b) Clerical Amendment.--The table of subparts for part VIII of 
subchapter A of chapter 1 of such Code, as added by this title, is 
amended by inserting after the item relating to subpart A the following 
new item:

         ``subpart b. surcharge on high income individuals.''.

    (c) Section 15 Not to Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 442. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED 
              DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Such term shall include an amount paid for medicine or a drug only if 
such medicine or drug is a prescribed drug or is insulin.''.
    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such 
Code is amended by adding at the end the following: ``Such term shall 
include an amount paid for medicine or a drug only if such medicine or 
drug is a prescribed drug or is insulin.''.
    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of such Code is amended by adding at the end 
the following new subsection:
    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs 
and Insulin.--For purposes of this section and section 105, 
reimbursement for expenses incurred for a medicine or a drug shall be 
treated as a reimbursement for medical expenses only if such medicine 
or drug is a prescribed drug or is insulin.''.
    (d) Effective Dates.--The amendment made by this section shall 
apply to expenses incurred after December 31, 2009.

SEC. 443. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) of the 
Internal Revenue Code of 1986 are each amended by striking ``December 
31, 2010'' and inserting ``December 31, 2019''.
    (b) Transition.--Subsection (f) of section 864 of such Code is 
amended by striking paragraph (7).

                  PART 2--PREVENTION OF TAX AVOIDANCE

SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE 
              PAYMENTS.

    (a) In General.--Section 894 of the Internal Revenue Code of 1986 
(relating to income affected by treaty) is amended by adding at the end 
the following new subsection:
    ``(d) Limitation on Treaty Benefits for Certain Deductible 
Payments.--
            ``(1) In general.--In the case of any deductible related-
        party payment, any withholding tax imposed under chapter 3 (and 
        any tax imposed under subpart A or B of this part) with respect 
        to such payment may not be reduced under any treaty of the 
        United States unless any such withholding tax would be reduced 
        under a treaty of the United States if such payment were made 
        directly to the foreign parent corporation.
            ``(2) Deductible related-party payment.--For purposes of 
        this subsection, the term `deductible related-party payment' 
        means any payment made, directly or indirectly, by any person 
        to any other person if the payment is allowable as a deduction 
        under this chapter and both persons are members of the same 
        foreign controlled group of entities.
            ``(3) Foreign controlled group of entities.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `foreign controlled 
                group of entities' means a controlled group of entities 
                the common parent of which is a foreign corporation.
                    ``(B) Controlled group of entities.--The term 
                `controlled group of entities' means a controlled group 
                of corporations as defined in section 1563(a)(1), 
                except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears therein, and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and (b)(2) 
                        of section 1563.
                A partnership or any other entity (other than a 
                corporation) shall be treated as a member of a 
                controlled group of entities if such entity is 
                controlled (within the meaning of section 954(d)(3)) by 
                members of such group (including any entity treated as 
                a member of such group by reason of this sentence).
            ``(4) Foreign parent corporation.--For purposes of this 
        subsection, the term `foreign parent corporation' means, with 
        respect to any deductible related-party payment, the common 
        parent of the foreign controlled group of entities referred to 
        in paragraph (3)(A).
            ``(5) Regulations.--The Secretary may prescribe such 
        regulations or other guidance as are necessary or appropriate 
        to carry out the purposes of this subsection, including 
        regulations or other guidance which provide for--
                    ``(A) the treatment of two or more persons as 
                members of a foreign controlled group of entities if 
                such persons would be the common parent of such group 
                if treated as one corporation, and
                    ``(B) the treatment of any member of a foreign 
                controlled group of entities as the common parent of 
                such group if such treatment is appropriate taking into 
                account the economic relationships among such 
                entities.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to payments made after the date of the enactment of this Act.

SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

    (a) In General.--Section 7701 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (o) as subsection (p) and by 
inserting after subsection (n) the following new subsection:
    ``(o) Clarification of Economic Substance Doctrine.--
            ``(1) Application of doctrine.--In the case of any 
        transaction to which the economic substance doctrine is 
        relevant, such transaction shall be treated as having economic 
        substance only if--
                    ``(A) the transaction changes in a meaningful way 
                (apart from Federal income tax effects) the taxpayer's 
                economic position, and
                    ``(B) the taxpayer has a substantial purpose (apart 
                from Federal income tax effects) for entering into such 
                transaction.
            ``(2) Special rule where taxpayer relies on profit 
        potential.--
                    ``(A) In general.--The potential for profit of a 
                transaction shall be taken into account in determining 
                whether the requirements of subparagraphs (A) and (B) 
                of paragraph (1) are met with respect to the 
                transaction only if the present value of the reasonably 
                expected pre-tax profit from the transaction is 
                substantial in relation to the present value of the 
                expected net tax benefits that would be allowed if the 
                transaction were respected.
                    ``(B) Treatment of fees and foreign taxes.--Fees 
                and other transaction expenses and foreign taxes shall 
                be taken into account as expenses in determining pre-
                tax profit under subparagraph (A).
            ``(3) State and local tax benefits.--For purposes of 
        paragraph (1), any State or local income tax effect which is 
        related to a Federal income tax effect shall be treated in the 
        same manner as a Federal income tax effect.
            ``(4) Financial accounting benefits.--For purposes of 
        paragraph (1)(B), achieving a financial accounting benefit 
        shall not be taken into account as a purpose for entering into 
        a transaction if the origin of such financial accounting 
        benefit is a reduction of Federal income tax.
            ``(5) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Economic substance doctrine.--The term 
                `economic substance doctrine' means the common law 
                doctrine under which tax benefits under subtitle A with 
                respect to a transaction are not allowable if the 
                transaction does not have economic substance or lacks a 
                business purpose.
                    ``(B) Exception for personal transactions of 
                individuals.--In the case of an individual, paragraph 
                (1) shall apply only to transactions entered into in 
                connection with a trade or business or an activity 
                engaged in for the production of income.
                    ``(C) Other common law doctrines not affected.--
                Except as specifically provided in this subsection, the 
                provisions of this subsection shall not be construed as 
                altering or supplanting any other rule of law, and the 
                requirements of this subsection shall be construed as 
                being in addition to any such other rule of law.
                    ``(D) Determination of application of doctrine not 
                affected.--The determination of whether the economic 
                substance doctrine is relevant to a transaction (or 
                series of transactions) shall be made in the same 
                manner as if this subsection had never been enacted.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after the date of the enactment of 
this Act.

SEC. 453. PENALTIES FOR UNDERPAYMENTS.

    (a) Penalty for Underpayments Attributable to Transactions Lacking 
Economic Substance.--
            (1) In general.--Subsection (b) of section 6662 of the 
        Internal Revenue Code of 1986 is amended by inserting after 
        paragraph (5) the following new paragraph:
            ``(6) Any disallowance of claimed tax benefits by reason of 
        a transaction lacking economic substance (within the meaning of 
        section 7701(o)) or failing to meet the requirements of any 
        similar rule of law.''.
            (2) Increased penalty for nondisclosed transactions.--
        Section 6662 of such Code is amended by adding at the end the 
        following new subsection:
    ``(i) Increase in Penalty in Case of Nondisclosed Noneconomic 
Substance Transactions.--
            ``(1) In general.--In the case of any portion of an 
        underpayment which is attributable to one or more nondisclosed 
        noneconomic substance transactions, subsection (a) shall be 
        applied with respect to such portion by substituting `40 
        percent' for `20 percent'.
            ``(2) Nondisclosed noneconomic substance transactions.--For 
        purposes of this subsection, the term `nondisclosed noneconomic 
        substance transaction' means any portion of a transaction 
        described in subsection (b)(6) with respect to which the 
        relevant facts affecting the tax treatment are not adequately 
        disclosed in the return nor in a statement attached to the 
        return.
            ``(3) Special rule for amended returns.--Except as provided 
        in regulations, in no event shall any amendment or supplement 
        to a return of tax be taken into account for purposes of this 
        subsection if the amendment or supplement is filed after the 
        earlier of the date the taxpayer is first contacted by the 
        Secretary regarding the examination of the return or such other 
        date as is specified by the Secretary.''.
            (3) Conforming amendment.--Subparagraph (B) of section 
        6662A(e)(2) of such Code is amended--
                    (A) by striking ``section 6662(h)'' and inserting 
                ``subsections (h) or (i) of section 6662'', and
                    (B) by striking ``gross valuation misstatement 
                penalty'' in the heading and inserting ``certain 
                increased underpayment penalties''.
    (b) Reasonable Cause Exception Not Applicable to Noneconomic 
Substance Transactions, Tax Shelters, and Certain Large or Publicly 
Traded Persons.--Subsection (c) of section 6664 of such Code is 
amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively,
            (2) by striking ``paragraph (2)'' in paragraph (4)(A), as 
        so redesignated, and inserting ``paragraph (3)'', and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Exception.--Paragraph (1) shall not apply to--
                    ``(A) to any portion of an underpayment which is 
                attributable to one or more tax shelters (as defined in 
                section 6662(d)(2)(C)) or transactions described in 
                section 6662(b)(6), and
                    ``(B) to any taxpayer if such taxpayer is a 
                specified person (as defined in section 
                6662(d)(2)(D)(ii)).''.
    (c) Application of Penalty for Erroneous Claim for Refund or Credit 
to Noneconomic Substance Transactions.--Section 6676 of such Code is 
amended by redesignating subsection (c) as subsection (d) and inserting 
after subsection (b) the following new subsection:
    ``(c) Noneconomic Substance Transactions Treated as Lacking 
Reasonable Basis.--For purposes of this section, any excessive amount 
which is attributable to any transaction described in section 
6662(b)(6) shall not be treated as having a reasonable basis.''.
    (d) Special Understatement Reduction Rule for Certain Large or 
Publicly Traded Persons.--
            (1) In general.--Paragraph (2) of section 6662(d) of such 
        Code is amended by adding at the end the following new 
        subparagraph:
                    ``(D) Special reduction rule for certain large or 
                publicly traded persons.--
                            ``(i) In general.--In the case of any 
                        specified person--
                                    ``(I) subparagraph (B) shall not 
                                apply, and
                                    ``(II) the amount of the 
                                understatement under subparagraph (A) 
                                shall be reduced by that portion of the 
                                understatement which is attributable to 
                                any item with respect to which the 
                                taxpayer has a reasonable belief that 
                                the tax treatment of such item by the 
                                taxpayer is more likely than not the 
                                proper tax treatment of such item.
                            ``(ii) Specified person.--For purposes of 
                        this subparagraph, the term `specified person' 
                        means--
                                    ``(I) any person required to file 
                                periodic or other reports under section 
                                13 of the Securities Exchange Act of 
                                1934, and
                                    ``(II) any corporation with gross 
                                receipts in excess of $100,000,000 for 
                                the taxable year involved.
                        All persons treated as a single employer under 
                        section 52(a) shall be treated as one person 
                        for purposes of subclause (II).''.
            (2) Conforming amendment.--Subparagraph (C) of section 
        6662(d)(2) of such Code is amended by striking ``Subparagraph 
        (B)'' and inserting ``Subparagraphs (B) and (D)(i)(II)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after the date of the enactment of 
this Act.

                   PART 3--PARITY IN HEALTH BENEFITS

SEC. 461. CERTAIN HEALTH RELATED BENEFITS APPLICABLE TO SPOUSES AND 
              DEPENDENTS EXTENDED TO ELIGIBLE BENEFICIARIES.

    (a) Application of Accident and Health Plans to Eligible 
Beneficiaries.--
            (1) Exclusion of contributions.--Section 106 of the 
        Internal Revenue Code of 1986, as amended by section 442, 
        (relating to contributions by employer to accident and health 
        plans) is amended by adding at the end the following new 
        subsection:
    ``(g) Coverage Provided for Eligible Beneficiaries of Employees.--
            ``(1) In general.--Subsection (a) shall apply with respect 
        to any eligible beneficiary of the employee.
            ``(2) Eligible beneficiary.--For purposes of this 
        subsection, the term `eligible beneficiary' means any 
        individual who is eligible to receive benefits or coverage 
        under an accident or health plan.''.
            (2) Exclusion of amounts expended for medical care.--The 
        first sentence of section 105(b) of such Code (relating to 
        amounts expended for medical care) is amended--
                    (A) by striking ``and his dependents'' and 
                inserting ``his dependents'', and
                    (B) by inserting before the period the following: 
                ``and any eligible beneficiary (within the meaning of 
                section 106(f)) with respect to the taxpayer''.
            (3) Payroll taxes.--
                    (A) Section 3121(a)(2) of such Code is amended--
                            (i) by striking ``or any of his 
                        dependents'' in the matter preceding 
                        subparagraph (A) and inserting ``, any of his 
                        dependents, or any eligible beneficiary (within 
                        the meaning of section 106(g)) with respect to 
                        the employee'',
                            (ii) by striking ``or any of his 
                        dependents,'' in subparagraph (A) and inserting 
                        ``, any of his dependents, or any eligible 
                        beneficiary (within the meaning of section 
                        106(g)) with respect to the employee,'', and
                            (iii) by striking ``and their dependents'' 
                        both places it appears and inserting ``and such 
                        employees' dependents and eligible 
                        beneficiaries (within the meaning of section 
                        106(g))''.
                    (B) Section 3231(e)(1) of such Code is amended--
                            (i) by striking ``or any of his 
                        dependents'' and inserting ``, any of his 
                        dependents, or any eligible beneficiary (within 
                        the meaning of section 106(g)) with respect to 
                        the employee,'', and
                            (ii) by striking ``and their dependents'' 
                        both places it appears and inserting ``and such 
                        employees' dependents and eligible 
                        beneficiaries (within the meaning of section 
                        106(g))''.
                    (C) Section 3306(b)(2) of such Code is amended--
                            (i) by striking ``or any of his 
                        dependents'' in the matter preceding 
                        subparagraph (A) and inserting ``, any of his 
                        dependents, or any eligible beneficiary (within 
                        the meaning of section 106(g)) with respect to 
                        the employee,'',
                            (ii) by striking ``or any of his 
                        dependents'' in subparagraph (A) and inserting 
                        ``, any of his dependents, or any eligible 
                        beneficiary (within the meaning of section 
                        106(g)) with respect to the employee'', and
                            (iii) by striking ``and their dependents'' 
                        both places it appears and inserting ``and such 
                        employees' dependents and eligible 
                        beneficiaries (within the meaning of section 
                        106(g))''.
                    (D) Section 3401(a) of such Code is amended by 
                striking ``or'' at the end of paragraph (22), by 
                striking the period at the end of paragraph (23) and 
                inserting ``; or'', and by inserting after paragraph 
                (23) the following new paragraph:
            ``(24) for any payment made to or for the benefit of an 
        employee or any eligible beneficiary (within the meaning of 
        section 106(g)) if at the time of such payment it is reasonable 
        to believe that the employee will be able to exclude such 
        payment from income under section 106 or under section 105 by 
        reference in section 105(b) to section 106(g).''.
    (b) Expansion of Dependency for Purposes of Deduction for Health 
Insurance Costs of Self-employed Individuals.--
            (1) In general.--Paragraph (1) of section 162(l) of the 
        Internal Revenue Code of 1986 (relating to special rules for 
        health insurance costs of self-employed individuals) is amended 
        to read as follows:
            ``(1) Allowance of deduction.--In the case of a taxpayer 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to the amount paid during the taxable year for 
        insurance which constitutes medical care for--
                    ``(A) the taxpayer,
                    ``(B) the taxpayer's spouse,
                    ``(C) the taxpayer's dependents, and
                    ``(D) any individual who--
                            ``(i) satisfies the age requirements of 
                        section 152(c)(3)(A),
                            ``(ii) bears a relationship to the taxpayer 
                        described in section 152(d)(2)(H), and
                            ``(iii) meets the requirements of section 
                        152(d)(1)(C), and
                    ``(E) one individual who--
                            ``(i) does not satisfy the age requirements 
                        of section 152(c)(3)(A),
                            ``(ii) bears a relationship to the taxpayer 
                        described in section 152(d)(2)(H),
                            ``(iii) meets the requirements of section 
                        152(d)(1)(D), and
                            ``(iv) is not the spouse of the taxpayer 
                        and does not bear any relationship to the 
                        taxpayer described in subparagraphs (A) through 
                        (G) of section 152(d)(2).''.
            (2) Conforming amendment.--Subparagraph (B) of section 
        162(l)(2) of such Code is amended by inserting ``, any 
        dependent, or individual described in subparagraph (D) or (E) 
        of paragraph (1) with respect to'' after ``spouse''.
    (c) Extension to Eligible Beneficiaries of Sick and Accident 
Benefits Provided to Members of a Voluntary Employees' Beneficiary 
Association and Their Dependents.--Section 501(c)(9) of the Internal 
Revenue Code of 1986 (relating to list of exempt organizations) is 
amended by adding at the end the following new sentence: ``For purposes 
of providing for the payment of sick and accident benefits to members 
of such an association and their dependents, the term `dependents' 
shall include any individual who is an eligible beneficiary (within the 
meaning of section 106(f)), as determined under the terms of a medical 
benefit, health insurance, or other program under which members and 
their dependents are entitled to sick and accident benefits.''.
    (d) Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--The Secretary of Treasury shall issue guidance of 
general applicability providing that medical expenses that otherwise 
qualify--
            (1) for reimbursement from a flexible spending arrangement 
        under regulations in effect on the date of the enactment of 
        this Act may be reimbursed from an employee's flexible spending 
        arrangement, notwithstanding the fact that such expenses are 
        attributable to any individual who is not the employee's spouse 
        or dependent (within the meaning of section 105(b) of the 
        Internal Revenue Code of 1986) but is an eligible beneficiary 
        (within the meaning of section 106(f) of such Code) under the 
        flexible spending arrangement with respect to the employee, and
            (2) for reimbursement from a health reimbursement 
        arrangement under regulations in effect on the date of the 
        enactment of this Act may be reimbursed from an employee's 
        health reimbursement arrangement, notwithstanding the fact that 
        such expenses are attributable to an individual who is not a 
        spouse or dependent (within the meaning of section 105(b) of 
        such Code) but is an eligible beneficiary (within the meaning 
        of section 106(f) of such Code) under the health reimbursement 
        arrangement with respect to the employee.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

           SUBDIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION.

    The table of contents for this subdivision is as follows:

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

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.
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.
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.
                     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.
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

Sec. 1701. Eligibility for individuals with income below 133\1/3\ 
                            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.
              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.

                  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.

    (a) In General.--Section 1888(e)(4)(E)(ii) of the Social Security 
Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) by redesignating subclause (IV) as subclause (VI); and
            (3) by inserting after subclause (III) the following new 
        subclauses:
                                    ``(IV) for each of fiscal years 
                                2004 through 2009, the rate computed 
                                for the previous fiscal year increased 
                                by the skilled nursing facility market 
                                basket percentage change for the fiscal 
                                year involved;
                                    ``(V) for fiscal year 2010, the 
                                rate computed for the previous fiscal 
                                year; and''.
    (b) Delayed Effective Date.--Section 1888(e)(4)(E)(ii)(V) of the 
Social Security Act, as inserted by subsection (a)(3), shall not apply 
to payment for days before January 1, 2010.

SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.

    (a) In General.--Section 1886(j)(3)(C) of the Social Security Act 
(42 U.S.C. 1395ww(j)(3)(C)) is amended by striking ``and 2009'' and 
inserting ``through 2010''.
    (b) Delayed Effective Date.--The amendment made by subsection (a) 
shall not apply to payment units occurring before January 1, 2010.

SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATES THAT DO NOT ALREADY INCORPORATE SUCH 
              IMPROVEMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
            (1) in clause (iii)--
                    (A) by striking ``(iii) For purposes of this 
                subparagraph,'' and inserting ``(iii)(I) For purposes 
                of this subparagraph, subject to the productivity 
                adjustment described in subclause (II),''; and
                    (B) by adding at the end the following new 
                subclause:
    ``(II) The productivity adjustment described in this subclause, 
with respect to an increase or change for a fiscal year or year or cost 
reporting period, or other annual period, is a productivity offset 
equal to the percentage change in the 10-year moving average of annual 
economy-wide private nonfarm business multi-factor productivity (as 
recently published before the promulgation of such increase for the 
year or period involved). Except as otherwise provided, any reference 
to the increase described in this clause shall be a reference to the 
percentage increase described in subclause (I) minus the percentage 
change under this subclause.'';
            (2) in the first sentence of clause (viii)(I), by inserting 
        ``(but not below zero)'' after ``shall be reduced''; and
            (3) in the first sentence of clause (ix)(I)--
                    (A) by inserting ``(determined without regard to 
                clause (iii)(II)'' after ``clause (i)'' the second time 
                it appears; and
                    (B) by inserting ``(but not below zero)'' after 
                ``reduced''.
    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of such Act 
(42 U.S.C. 1395yy(e)(5))(B) is amended by inserting ``subject to the 
productivity adjustment described in section 1886(b)(3)(B)(iii)(II)'' 
after ``as calculated by the Secretary''.
    (c) Long Term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraph:
            ``(3) Productivity adjustment.--In implementing the system 
        described in paragraph (1) for discharges occurring during the 
        rate year ending in 2010 or any subsequent rate year for a 
        hospital, to the extent that an annual percentage increase 
        factor applies to a base rate for such discharges for the 
        hospital, such factor shall be subject to the productivity 
        adjustment described in subsection (b)(3)(B)(iii)(II).''.
    (d) Inpatient Rehabilitation Facilities.--The second sentence of 
section 1886(j)(3)(C) of the Social Security Act (42 U.S.C. 
1395ww(j)(3)(C)) is amended by inserting ``(subject to the productivity 
adjustment described in subsection (b)(3)(B)(iii)(II))'' after 
``appropriate percentage increase''.
    (e) Psychiatric Hospitals.--Section 1886 of the Social Security Act 
(42 U.S.C. 1395ww) is amended by adding at the end the following new 
subsection:
    ``(o) Prospective Payment for Psychiatric Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by 
        psychiatric hospitals (as described in clause (i) of subsection 
        (d)(1)(B) and psychiatric units (as described in the matter 
        following clause (v) of such subsection), see section 124 of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 1999.
            ``(2) Productivity adjustment.--In implementing the system 
        described in paragraph (1) for discharges occurring during the 
        rate year ending in 2011 or any subsequent rate year for a 
        psychiatric hospital or unit described in such paragraph, to 
        the extent that an annual percentage increase factor applies to 
        a base rate for such discharges for the hospital or unit, 
        respectively, such factor shall be subject to the productivity 
        adjustment described in subsection (b)(3)(B)(iii)(II).''.
    (f) Hospice Care.--Subclause (VII) of section 1814(i)(1)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395f(i)(1)(C)(ii)) is amended by 
inserting after ``the market basket percentage increase'' the 
following: ``(which is subject to the productivity adjustment described 
in section 1886(b)(3)(B)(iii)(II))''.
    (g) Effective Date.--The amendments made by subsections (a), (b), 
(d), and (f) shall apply to annual increases effected for fiscal years 
beginning with fiscal year 2010.

                PART 2--OTHER MEDICARE PART A PROVISIONS

SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.

    (a) Change in Recalibration Factor.--
            (1) Analysis.--The Secretary of Health and Human Services 
        shall conduct, using calendar year 2006 claims data, an initial 
        analysis comparing total payments under title XVIII of the 
        Social Security Act for skilled nursing facility services under 
        the RUG-53 and under the RUG-44 classification systems.
            (2) Adjustment in recalibration factor.--Based on the 
        initial analysis under paragraph (1), the Secretary shall 
        adjust the case mix indexes under section 1888(e)(4)(G)(i) of 
        the Social Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for 
        fiscal year 2010 by the appropriate recalibration factor as 
        proposed in the proposed rule for Medicare skilled nursing 
        facilities issued by such Secretary on May 12, 2009 (74 Federal 
        Register 22214 et seq.).
    (b) Change in Payment for Nontherapy Ancillary (NTA) Services and 
Therapy Services.--
            (1) Changes under current snf classification system.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary of Health and Human Services shall, under the 
                system for payment of skilled nursing facility services 
                under section 1888(e) of the Social Security Act (42 
                U.S.C. 1395yy(e)), increase payment by 10 percent for 
                non-therapy ancillary services (as specified by the 
                Secretary in the notice issued on November 27, 1998 (63 
                Federal Register 65561 et seq.)) and shall decrease 
                payment for the therapy case mix component of such 
                rates by 5.5 percent.
                    (B) Effective date.--The changes in payment 
                described in subparagraph (A) shall apply for days on 
                or after January 1, 2010, and until the Secretary 
                implements an alternative case mix classification 
                system for payment of skilled nursing facility services 
                under section 1888(e) of the Social Security Act (42 
                U.S.C. 1395yy(e)).
                    (C) Implementation.--Notwithstanding any other 
                provision of law, the Secretary may implement by 
                program instruction or otherwise the provisions of this 
                paragraph.
            (2) Changes under a future snf case mix classification 
        system.--
                    (A) Analysis.--
                            (i) In general.--The Secretary of Health 
                        and Human Services shall analyze payments for 
                        non-therapy ancillary services under a future 
                        skilled nursing facility classification system 
                        to ensure the accuracy of payment for non-
                        therapy ancillary services. Such analysis shall 
                        consider use of appropriate predictors which 
                        may include age, physical and mental status, 
                        ability to perform activities of daily living, 
                        prior nursing home stay, diagnoses, broad RUG 
                        category, and a proxy for length of stay.
                            (ii) Application.--Such analysis shall be 
                        conducted in a manner such that the future 
                        skilled nursing facility classification system 
                        is implemented to apply to services furnished 
                        during a fiscal year beginning with fiscal year 
                        2011.
                    (B) Consultation.--In conducting the analysis under 
                subparagraph (A), the Secretary shall consult with 
                interested parties, including the Medicare Payment 
                Advisory Commission and other interested stakeholders, 
                to identify appropriate predictors of nontherapy 
                ancillary costs.
                    (C) Rulemaking.--The Secretary shall include the 
                result of the analysis under subparagraph (A) in the 
                fiscal year 2011 rulemaking cycle for purposes of 
                implementation beginning for such fiscal year.
                    (D) Implementation.--Subject to subparagraph (E) 
                and consistent with subparagraph (A)(ii), the Secretary 
                shall implement changes to payments for non-therapy 
                ancillary services (which shall include a separate rate 
                component for non-therapy ancillary services and may 
                include use of a model that predicts payment amounts 
                applicable for non-therapy ancillary services) under 
                such future skilled nursing facility services 
                classification system as the Secretary determines 
                appropriate based on the analysis conducted pursuant to 
                subparagraph (A).
                    (E) Budget neutrality.--The Secretary shall 
                implement changes described in subparagraph (D) in a 
                manner such that the estimated expenditures under such 
                future skilled nursing facility services classification 
                system for a fiscal year beginning with fiscal year 
                2011 with such changes would be equal to the estimated 
                expenditures that would otherwise occur under title 
                XVIII of the Social Security Act under such future 
                skilled nursing facility services classification system 
                for such year without such changes.
    (c) Outlier Policy for NTA and Therapy.--Section 1888(e) of the 
Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at the 
end the following new paragraph:
            ``(13) Outliers for nta and therapy.--
                    ``(A) In general.--With respect to outliers because 
                of unusual variations in the type or amount of 
                medically necessary care, beginning with October 1, 
                2010, the Secretary--
                            ``(i) shall provide for an addition or 
                        adjustment to the payment amount otherwise made 
                        under this section with respect to non-therapy 
                        ancillary services in the case of such 
                        outliers; and
                            ``(ii) may provide for such an addition or 
                        adjustment to the payment amount otherwise made 
                        under this section with respect to therapy 
                        services in the case of such outliers.
                    ``(B) Outliers based on aggregate costs.--Outlier 
                adjustments or additional payments described in 
                subparagraph (A) shall be based on aggregate costs 
                during a stay in a skilled nursing facility and not on 
                the number of days in such stay.
                    ``(C) Budget neutrality.--The Secretary shall 
                reduce estimated payments that would otherwise be made 
                under the prospective payment system under this 
                subsection with respect to a fiscal year by 2 percent. 
                The total amount of the additional payments or payment 
                adjustments for outliers made under this paragraph with 
                respect to a fiscal year may not exceed 2 percent of 
                the total payments projected or estimated to be made 
                based on the prospective payment system under this 
                subsection for the fiscal year.''.
    (d) Conforming Amendments.--Section 1888(e)(8) of such Act (42 
U.S.C. 1395yy(e)(8)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``and'' before ``adjustments''; and
                    (B) by inserting ``, and adjustment under section 
                1111(b) of the America's Affordable Health Choices Act 
                of 2009'' before the semicolon at the end;
            (2) in subparagraph (B), by striking ``and'';
            (3) in subparagraph (C), by striking the period and 
        inserting ``; and''; and
            (4) by adding at the end the following new subparagraph:
                    ``(D) the establishment of outliers under paragraph 
                (13).''.

SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUSTMENTS IN RESPONSE TO 
              COVERAGE EXPANSION.

    (a) DSH Report.--
            (1) In general.--Not later than January 1, 2016, the 
        Secretary of Health and Human Services shall submit to Congress 
        a report on Medicare DSH taking into account the impact of the 
        health care reforms carried out under subdivision A in reducing 
        the number of uninsured individuals. The report shall include 
        recommendations relating to the following:
                    (A) The appropriate amount, targeting, and 
                distribution of Medicare DSH to compensate for higher 
                Medicare costs associated with serving low-income 
                beneficiaries (taking into account variations in the 
                empirical justification for Medicare DSH attributable 
                to hospital characteristics, including bed size), 
                consistent with the original intent of Medicare DSH.
                    (B) The appropriate amount, targeting, and 
                distribution of Medicare DSH to hospitals given their 
                continued uncompensated care costs, to the extent such 
                costs remain.
            (2) Coordination with medicaid dsh report.--The Secretary 
        shall coordinate the report under this subsection with the 
        report on Medicaid DSH under section 1704(a).
    (b) Payment Adjustments in Response to Coverage Expansion.--
            (1) In general.--If there is a significant decrease in the 
        national rate of uninsurance as a result of this division (as 
        determined under paragraph (2)(A)), then the Secretary of 
        Health and Human Services shall, beginning in fiscal year 2017, 
        implement the following adjustments to Medicare DSH:
                    (A) In lieu of the amount of Medicare DSH payment 
                that would otherwise be made under section 
                1886(d)(5)(F) of the Social Security Act, the amount of 
                Medicare DSH payment shall be an amount based on the 
                recommendations of the report under subsection 
                (a)(1)(A) and shall take into account variations in the 
                empirical justification for Medicare DSH attributable 
                to hospital characteristics, including bed size.
                    (B) Subject to paragraph (3), make an additional 
                payment to a hospital by an amount that is estimated 
                based on the amount of uncompensated care provided by 
                the hospital based on criteria for uncompensated care 
                as determined by the Secretary, which shall exclude bad 
                debt.
            (2) Significant decrease in national rate of uninsurance as 
        a result of this division.--For purposes of this subsection--
                    (A) In general.--There is a ``significant decrease 
                in the national rate of uninsurance as a result of this 
                division'' if there is a decrease in the national rate 
                of uninsurance (as defined in subparagraph (B)) from 
                2012 to 2014 that exceeds 8 percentage points.
                    (B) National rate of uninsurance defined.--The term 
                ``national rate of uninsurance'' means, for a year, 
                such rate for the under-65 population for the year as 
                determined and published by the Bureau of the Census in 
                its Current Population Survey in or about September of 
                the succeeding year.
            (3) Uncompensated care increase.--
                    (A) Computation of dsh savings.--For each fiscal 
                year (beginning with fiscal year 2017), the Secretary 
                shall estimate the aggregate reduction in the amount of 
                Medicare DSH payment that would be expected to result 
                from the adjustment under paragraph (1)(A).
                    (B) Structure of payment increase.--The Secretary 
                shall compute the additional payment to a hospital as 
                described in paragraph (1)(B) for a fiscal year in 
                accordance with a formula established by the Secretary 
                that provides that--
                            (i) the estimated aggregate amount of such 
                        increase for the fiscal year does not exceed 50 
                        percent of the aggregate reduction in Medicare 
                        DSH estimated by the Secretary for such fiscal 
                        year; and
                            (ii) hospitals with higher levels of 
                        uncompensated care receive a greater increase.
    (c) Medicare DSH.--In this section, the term ``Medicare DSH'' means 
adjustments in payments under section 1886(d)(5)(F) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital 
services furnished by disproportionate share hospitals.

SEC. 1113. EXTENSION OF HOSPICE REGULATION MORATORIUM.

    Section 4301(a) of division B of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5) is amended--
            (1) by striking ``October 1, 2009'' and inserting ``October 
        1, 2010''; and
            (2) by striking ``for fiscal year 2009'' and inserting 
        ``for fiscal years 2009 and 2010''.

                Subtitle B--Provisions Related to Part B

                      PART 1--PHYSICIANS' SERVICES

SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

    (a) Transitional Update for 2010.--Section 1848(d) of the Social 
Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the end the 
following new paragraph:
            ``(10) Update for 2010.--The update to the single 
        conversion factor established in paragraph (1)(C) for 2010 
        shall be the percentage increase in the MEI (as defined in 
        section 1842(i)(3)) for that year.''.
    (b) Rebasing SGR Using 2009; Limitation on Cumulative Adjustment 
Period.--Section 1848(d)(4) of such Act (42 U.S.C. 1395w-4(d)(4)) is 
amended--
            (1) in subparagraph (B), by striking ``subparagraph (D)'' 
        and inserting ``subparagraphs (D) and (G)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Rebasing using 2009 for future update 
                adjustments.--In determining the update adjustment 
                factor under subparagraph (B) for 2011 and subsequent 
                years--
                            ``(i) the allowed expenditures for 2009 
                        shall be equal to the amount of the actual 
                        expenditures for physicians' services during 
                        2009; and
                            ``(ii) the reference in subparagraph 
                        (B)(ii)(I) to `April 1, 1996' shall be treated 
                        as a reference to `January 1, 2009 (or, if 
                        later, the first day of the fifth year before 
                        the year involved)'.''.
    (c) Limitation on Physicians' Services Included in Target Growth 
Rate Computation to Services Covered Under Physician Fee Schedule.--
Effective for services furnished on or after January 1, 2009, section 
1848(f)(4)(A) of such Act is amended by striking ``(such as clinical'' 
and all that follows through ``in a physician's office'' and inserting 
``for which payment under this part is made under the fee schedule 
under this section, for services for practitioners described in section 
1842(b)(18)(C) on a basis related to such fee schedule, or for services 
described in section 1861(p) (other than such services when furnished 
in the facility of a provider of services)''.
    (d) Establishment of Separate Target Growth Rates for Categories of 
Services.--
            (1) Establishment of service categories.--Subsection (j) of 
        section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is 
        amended by adding at the end the following new paragraph:
            ``(5) Service categories.--For services furnished on or 
        after January 1, 2009, each of the following categories of 
        physicians' services (as defined in paragraph (3)) shall be 
        treated as a separate `service category':
                    ``(A) Evaluation and management services that are 
                procedure codes (for services covered under this title) 
                for--
                            ``(i) services in the category designated 
                        Evaluation and Management in the Health Care 
                        Common Procedure Coding System (established by 
                        the Secretary under subsection (c)(5) as of 
                        December 31, 2009, and as subsequently modified 
                        by the Secretary); and
                            ``(ii) preventive services (as defined in 
                        section 1861(iii)) for which payment is made 
                        under this section.
                    ``(B) All other services not described in 
                subparagraph (A).
        Service categories established under this paragraph shall apply 
        without regard to the specialty of the physician furnishing the 
        service.''.
            (2) Establishment of separate conversion factors for each 
        service category.--Subsection (d)(1) of section 1848 of the 
        Social Security Act (42 U.S.C. 1395w-4) is amended--
                    (A) in subparagraph (A)--
                            (i) by designating the sentence beginning 
                        ``The conversion factor'' as clause (i) with 
                        the heading ``Application of single conversion 
                        factor.--'' and with appropriate indentation;
                            (ii) by striking ``The conversion factor'' 
                        and inserting ``Subject to clause (ii), the 
                        conversion factor''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(ii) Application of multiple conversion 
                        factors beginning with 2011.--
                                    ``(I) In general.--In applying 
                                clause (i) for years beginning with 
                                2011, separate conversion factors shall 
                                be established for each service 
                                category of physicians' services (as 
                                defined in subsection (j)(5)) and any 
                                reference in this section to a 
                                conversion factor for such years shall 
                                be deemed to be a reference to the 
                                conversion factor for each of such 
                                categories.
                                    ``(II) Initial conversion 
                                factors.--Such factors for 2011 shall 
                                be based upon the single conversion 
                                factor for the previous year multiplied 
                                by the update established under 
                                paragraph (11) for such category for 
                                2011.
                                    ``(III) Updating of conversion 
                                factors.--Such factor for a service 
                                category for a subsequent year shall be 
                                based upon the conversion factor for 
                                such category for the previous year and 
                                adjusted by the update established for 
                                such category under paragraph (11) for 
                                the year involved.''; and
                    (B) in subparagraph (D), by striking ``other 
                physicians' services'' and inserting ``for physicians' 
                services described in the service category described in 
                subsection (j)(5)(B)''.
            (3) Establishing updates for conversion factors for service 
        categories.--Section 1848(d) of the Social Security Act (42 
        U.S.C. 1395w-4(d)), as amended by subsection (a), is amended--
                    (A) in paragraph (4)(C)(iii), by striking ``The 
                allowed'' and inserting ``Subject to paragraph (11)(B), 
                the allowed''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(11) Updates for service categories beginning with 
        2011.--
                    ``(A) In general.--In applying paragraph (4) for a 
                year beginning with 2011, the following rules apply:
                            ``(i) Application of separate update 
                        adjustments for each service category.--
                        Pursuant to paragraph (1)(A)(ii)(I), the update 
                        shall be made to the conversion factor for each 
                        service category (as defined in subsection 
                        (j)(5)) based upon an update adjustment factor 
                        for the respective category and year and the 
                        update adjustment factor shall be computed, for 
                        a year, separately for each service category.
                            ``(ii) Computation of allowed and actual 
                        expenditures based on service categories.--In 
                        computing the prior year adjustment component 
                        and the cumulative adjustment component under 
                        clauses (i) and (ii) of paragraph (4)(B), the 
                        following rules apply:
                                    ``(I) Application based on service 
                                categories.--The allowed expenditures 
                                and actual expenditures shall be the 
                                allowed and actual expenditures for the 
                                service category, as determined under 
                                subparagraph (B).
                                    ``(II) Application of category 
                                specific target growth rate.--The 
                                growth rate applied under clause 
                                (ii)(II) of such paragraph shall be the 
                                target growth rate for the service 
                                category involved under subsection 
                                (f)(5).
                    ``(B) Determination of allowed expenditures.--In 
                applying paragraph (4) for a year beginning with 2010, 
                notwithstanding subparagraph (C)(iii) of such 
                paragraph, the allowed expenditures for a service 
                category for a year is an amount computed by the 
                Secretary as follows:
                            ``(i) For 2010.--For 2010:
                                    ``(I) Total 2009 actual 
                                expenditures for all services included 
                                in sgr computation for each service 
                                category.--Compute total actual 
                                expenditures for physicians' services 
                                (as defined in subsection (f)(4)(A)) 
                                for 2009 for each service category.
                                    ``(II) Increase by growth rate to 
                                obtain 2010 allowed expenditures for 
                                service category.--Compute allowed 
                                expenditures for the service category 
                                for 2010 by increasing the allowed 
                                expenditures for the service category 
                                for 2009 computed under subclause (I) 
                                by the target growth rate for such 
                                service category under subsection (f) 
                                for 2010.
                            ``(ii) For subsequent years.--For a 
                        subsequent year, take the amount of allowed 
                        expenditures for such category for the 
                        preceding year (under clause (i) or this 
                        clause) and increase it by the target growth 
                        rate determined under subsection (f) for such 
                        category and year.''.
            (4) Application of separate target growth rates for each 
        category.--
                    (A) In general.--Section 1848(f) of the Social 
                Security Act (42 U.S.C. 1395w-4(f)) is amended by 
                adding at the end the following new paragraph:
            ``(5) Application of separate target growth rates for each 
        service category beginning with 2010.--The target growth rate 
        for a year beginning with 2010 shall be computed and applied 
        separately under this subsection for each service category (as 
        defined in subsection (j)(5)) and shall be computed using the 
        same method for computing the target growth rate except that 
        the factor described in paragraph (2)(C) for--
                    ``(A) the service category described in subsection 
                (j)(5)(A) shall be increased by 0.02; and
                    ``(B) the service category described in subsection 
                (j)(5)(B) shall be increased by 0.01.''.
                    (B) Use of target growth rates.--Section 1848 of 
                such Act is further amended--
                            (i) in subsection (d)--
                                    (I) in paragraph (1)(E)(ii), by 
                                inserting ``or target'' after 
                                ``sustainable''; and
                                    (II) in paragraph (4)(B)(ii)(II), 
                                by inserting ``or target'' after 
                                ``sustainable''; and
                            (ii) in the heading of subsection (f), by 
                        inserting ``and Target Growth Rate'' after 
                        ``Sustainable Growth Rate'';
                            (iii) in subsection (f)(1)--
                                    (I) by striking ``and'' at the end 
                                of subparagraph (A);
                                    (II) in subparagraph (B), by 
                                inserting ``before 2010'' after ``each 
                                succeeding year'' and by striking the 
                                period at the end and inserting ``; 
                                and''; and
                                    (III) by adding at the end the 
                                following new subparagraph:
                    ``(C) November 1 of each succeeding year the target 
                growth rate for such succeeding year and each of the 2 
                preceding years.''; and
                            (iv) in subsection (f)(2), in the matter 
                        before subparagraph (A), by inserting after 
                        ``beginning with 2000'' the following: ``and 
                        ending with 2009''.
    (e) Application to Accountable Care Organization Pilot Program.--In 
applying the target growth rate under subsections (d) and (f) of 
section 1848 of the Social Security Act to services furnished by a 
practitioner to beneficiaries who are attributable to an accountable 
care organization under the pilot program provided under section 1866D 
of such Act, the Secretary of Health and Human Services shall develop, 
not later than January 1, 2012, for application beginning with 2012, a 
method that--
            (1) allows each such organization to have its own 
        expenditure targets and updates for such practitioners, with 
        respect to beneficiaries who are attributable to that 
        organization, that are consistent with the methodologies 
        described in such subsection (f); and
            (2) provides that the target growth rate applicable to 
        other physicians shall not apply to such physicians to the 
        extent that the physicians' services are furnished through the 
        accountable care organization.
In applying paragraph (1), the Secretary of Health and Human Services 
may apply the difference in the update under such paragraph on a claim-
by-claim or lump sum basis and such a payment shall be taken into 
account under the pilot program.

SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new 
subparagraphs:
                    ``(K) Potentially misvalued codes.--
                            ``(i) In general.--The Secretary shall--
                                    ``(I) periodically identify 
                                services as being potentially misvalued 
                                using criteria specified in clause 
                                (ii); and
                                    ``(II) review and make appropriate 
                                adjustments to the relative values 
                                established under this paragraph for 
                                services identified as being 
                                potentially misvalued under subclause 
                                (I).
                            ``(ii) Identification of potentially 
                        misvalued codes.--For purposes of identifying 
                        potentially misvalued services pursuant to 
                        clause (i)(I), the Secretary shall examine (as 
                        the Secretary determines to be appropriate) 
                        codes (and families of codes as appropriate) 
                        for which there has been the fastest growth; 
                        codes (and families of codes as appropriate) 
                        that have experienced substantial changes in 
                        practice expenses; codes for new technologies 
                        or services within an appropriate period (such 
                        as three years) after the relative values are 
                        initially established for such codes; multiple 
                        codes that are frequently billed in conjunction 
                        with furnishing a single service; codes with 
                        low relative values, particularly those that 
                        are often billed multiple times for a single 
                        treatment; codes which have not been subject to 
                        review since the implementation of the RBRVS 
                        (the so-called `Harvard-valued codes'); and 
                        such other codes determined to be appropriate 
                        by the Secretary.
                            ``(iii) Review and adjustments.--
                                    ``(I) The Secretary may use 
                                existing processes to receive 
                                recommendations on the review and 
                                appropriate adjustment of potentially 
                                misvalued services described clause 
                                (i)(II).
                                    ``(II) The Secretary may conduct 
                                surveys, other data collection 
                                activities, studies, or other analyses 
                                as the Secretary determines to be 
                                appropriate to facilitate the review 
                                and appropriate adjustment described in 
                                clause (i)(II).
                                    ``(III) The Secretary may use 
                                analytic contractors to identify and 
                                analyze services identified under 
                                clause (i)(I), conduct surveys or 
                                collect data, and make recommendations 
                                on the review and appropriate 
                                adjustment of services described in 
                                clause (i)(II).
                                    ``(IV) The Secretary may coordinate 
                                the review and appropriate adjustment 
                                described in clause (i)(II) with the 
                                periodic review described in 
                                subparagraph (B).
                                    ``(V) As part of the review and 
                                adjustment described in clause (i)(II), 
                                including with respect to codes with 
                                low relative values described in clause 
                                (ii), the Secretary may make 
                                appropriate coding revisions (including 
                                using existing processes for 
                                consideration of coding changes) which 
                                may include consolidation of individual 
                                services into bundled codes for payment 
                                under the fee schedule under subsection 
                                (b).
                                    ``(VI) The provisions of 
                                subparagraph (B)(ii)(II) shall apply to 
                                adjustments to relative value units 
                                made pursuant to this subparagraph in 
                                the same manner as such provisions 
                                apply to adjustments under subparagraph 
                                (B)(ii)(II).
                    ``(L) Validating relative value units.--
                            ``(i) In general.--The Secretary shall 
                        establish a process to validate relative value 
                        units under the fee schedule under subsection 
                        (b).
                            ``(ii) Components and elements of work.--
                        The process described in clause (i) may include 
                        validation of work elements (such as time, 
                        mental effort and professional judgment, 
                        technical skill and physical effort, and stress 
                        due to risk) involved with furnishing a service 
                        and may include validation of the pre, post, 
                        and intra-service components of work.
                            ``(iii) Scope of codes.--The validation of 
                        work relative value units shall include a 
                        sampling of codes for services that is the same 
                        as the codes listed under subparagraph (K)(ii)
                            ``(iv) Methods.--The Secretary may conduct 
                        the validation under this subparagraph using 
                        methods described in subclauses (I) through (V) 
                        of subparagraph (K)(iii) as the Secretary 
                        determines to be appropriate.
                            ``(v) Adjustments.--The Secretary shall 
                        make appropriate adjustments to the work 
                        relative value units under the fee schedule 
                        under subsection (b). The provisions of 
                        subparagraph (B)(ii)(II) shall apply to 
                        adjustments to relative value units made 
                        pursuant to this subparagraph in the same 
                        manner as such provisions apply to adjustments 
                        under subparagraph (B)(ii)(II).''.
    (b) Implementation.--
            (1) Funding.--For purposes of carrying out the provisions 
        of subparagraphs (K) and (L) of 1848(c)(2) of the Social 
        Security Act, as added by subsection (a), in addition to funds 
        otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services for the Center for Medicare & 
        Medicaid Services Program Management Account $20,000,000 for 
        fiscal year 2010 and each subsequent fiscal year. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            (2) Administration.--
                    (A) Chapter 35 of title 44, United States Code and 
                the provisions of the Federal Advisory Committee Act (5 
                U.S.C. App.) shall not apply to this section or the 
                amendment made by this section.
                    (B) Notwithstanding any other provision of law, the 
                Secretary may implement subparagraphs (K) and (L) of 
                1848(c)(2) of the Social Security Act, as added by 
                subsection (a), by program instruction or otherwise.
                    (C) Section 4505(d) of the Balanced Budget Act of 
                1997 is repealed.
                    (D) Except for provisions related to 
                confidentiality of information, the provisions of the 
                Federal Acquisition Regulation shall not apply to this 
                section or the amendment made by this section.
            (3) Focusing cms resources on potentially overvalued 
        codes.--Section 1868(a) of the Social Security Act (42 
        1395ee(a)) is repealed.

SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

    Section 1833 of the Social Security Act (42 U.S.C. 1395l) is 
amended by adding at the end the following new subsection:
    ``(x) Incentive Payments for Efficient Areas.--
            ``(1) In general.--In the case of services furnished under 
        the physician fee schedule under section 1848 on or after 
        January 1, 2011, and before January 1, 2013, by a supplier that 
        is paid under such fee schedule in an efficient area (as 
        identified under paragraph (2)), in addition to the amount of 
        payment that would otherwise be made for such services under 
        this part, there also shall be paid (on a monthly or quarterly 
        basis) an amount equal to 5 percent of the payment amount for 
        the services under this part.
            ``(2) Identification of efficient areas.--
                    ``(A) In general.--Based upon available data, the 
                Secretary shall identify those counties or equivalent 
                areas in the United States in the lowest fifth 
                percentile of utilization based on per capita spending 
                under this part and part A for services provided in the 
                most recent year for which data are available as of the 
                date of the enactment of this subsection, as 
                standardized to eliminate the effect of geographic 
                adjustments in payment rates.
                    ``(B) Identification of counties where service is 
                furnished..--For purposes of paying the additional 
                amount specified in paragraph (1), if the Secretary 
                uses the 5-digit postal ZIP Code where the service is 
                furnished, the dominant county of the postal ZIP Code 
                (as determined by the United States Postal Service, or 
                otherwise) shall be used to determine whether the 
                postal ZIP Code is in a county described in 
                subparagraph (A).
                    ``(C) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                1878, or otherwise, respecting--
                            ``(i) the identification of a county or 
                        other area under subparagraph (A); or
                            ``(ii) the assignment of a postal ZIP Code 
                        to a county or other area under subparagraph 
                        (B).
                    ``(D) Publication of list of counties; posting on 
                website.--With respect to a year for which a county or 
                area is identified under this paragraph, the Secretary 
                shall identify such counties or areas as part of the 
                proposed and final rule to implement the physician fee 
                schedule under section 1848 for the applicable year. 
                The Secretary shall post the list of counties 
                identified under this paragraph on the Internet website 
                of the Centers for Medicare & Medicaid Services.''.

SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY REPORTING INITIATIVE 
              (PQRI).

    (a) Feedback.--Section 1848(m)(5) of the Social Security Act (42 
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Feedback.--The Secretary shall provide timely 
                feedback to eligible professionals on the performance 
                of the eligible professional with respect to 
                satisfactorily submitting data on quality measures 
                under this subsection.''.
    (b) Appeals.--Such section is further amended--
            (1) in subparagraph (E), by striking ``There shall be'' and 
        inserting ``Subject to subparagraph (I), there shall be''; and
            (2) by adding at the end the following new subparagraph:
                    ``(I) Informal appeals process.--Notwithstanding 
                subparagraph (E), by not later than January 1, 2011, 
                the Secretary shall establish and have in place an 
                informal process for eligible professionals to appeal 
                the determination that an eligible professional did not 
                satisfactorily submit data on quality measures under 
                this subsection.''.
    (c) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of such Act is amended by adding at the end the 
following new paragraph:
            ``(7) Integration of physician quality reporting and ehr 
        reporting.--Not later than January 1, 2012, the Secretary shall 
        develop a plan to integrate clinical reporting on quality 
        measures under this subsection with reporting requirements 
        under subsection (o) relating to the meaningful use of 
        electronic health records. Such integration shall consist of 
        the following:
                    ``(A) The development of measures, the reporting of 
                which would both demonstrate--
                            ``(i) meaningful use of an electronic 
                        health record for purposes of subsection (o); 
                        and
                            ``(ii) clinical quality of care furnished 
                        to an individual.
                    ``(B) The collection of health data to identify 
                deficiencies in the quality and coordination of care 
                for individuals eligible for benefits under this part.
                    ``(C) Such other activities as specified by the 
                Secretary.''.
    (d) Extension of Incentive Payments.--Section 1848(m)(1) of such 
Act (42 U.S.C. 1395w-4(m)(1)) is amended--
            (1) in subparagraph (A), by striking ``2010'' and inserting 
        ``2012''; and
            (2) in subparagraph (B)(ii), by striking ``2009 and 2010'' 
        and inserting ``for each of the years 2009 through 2012''.

SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

    (a) In General.--Section 1848(e) of the Social Security Act (42 
U.S.C.1395w-4(e)) is amended by adding at the end the following new 
paragraph:
            ``(6) Transition to use of msas as fee schedule areas in 
        california.--
                    ``(A) In general.--
                            ``(i) Revision.--Subject to clause (ii) and 
                        notwithstanding the previous provisions of this 
                        subsection, for services furnished on or after 
                        January 1, 2011, the Secretary shall revise the 
                        fee schedule areas used for payment under this 
                        section applicable to the State of California 
                        using the Metropolitan Statistical Area (MSA) 
                        iterative Geographic Adjustment Factor 
                        methodology as follows:
                                    ``(I) The Secretary shall configure 
                                the physician fee schedule areas using 
                                the Core-Based Statistical Areas-
                                Metropolitan Statistical Areas (each in 
                                this paragraph referred to as an 
                                `MSA'), as defined by the Director of 
                                the Office of Management and Budget, as 
                                the basis for the fee schedule areas. 
                                The Secretary shall employ an iterative 
                                process to transition fee schedule 
                                areas. First, the Secretary shall list 
                                all MSAs within the State by Geographic 
                                Adjustment Factor described in 
                                paragraph (2) (in this paragraph 
                                referred to as a `GAF') in descending 
                                order. In the first iteration, the 
                                Secretary shall compare the GAF of the 
                                highest cost MSA in the State to the 
                                weighted-average GAF of the group of 
                                remaining MSAs in the State. If the 
                                ratio of the GAF of the highest cost 
                                MSA to the weighted-average GAF of the 
                                rest of State is 1.05 or greater then 
                                the highest cost MSA becomes a separate 
                                fee schedule area.
                                    ``(II) In the next iteration, the 
                                Secretary shall compare the MSA of the 
                                second-highest GAF to the weighted-
                                average GAF of the group of remaining 
                                MSAs. If the ratio of the second-
                                highest MSA's GAF to the weighted-
                                average of the remaining lower cost 
                                MSAs is 1.05 or greater, the second-
                                highest MSA becomes a separate fee 
                                schedule area. The iterative process 
                                continues until the ratio of the GAF of 
                                the highest-cost remaining MSA to the 
                                weighted-average of the remaining 
                                lower-cost MSAs is less than 1.05, and 
                                the remaining group of lower cost MSAs 
                                form a single fee schedule area, If two 
                                MSAs have identical GAFs, they shall be 
                                combined in the iterative comparison.
                            ``(ii) Transition.--For services furnished 
                        on or after January 1, 2011, and before January 
                        1, 2016, in the State of California, after 
                        calculating the work, practice expense, and 
                        malpractice geographic indices described in 
                        clauses (i), (ii), and (iii) of paragraph 
                        (1)(A) that would otherwise apply through 
                        application of this paragraph, the Secretary 
                        shall increase any such index to the county-
                        based fee schedule area value on December 31, 
                        2009, if such index would otherwise be less 
                        than the value on January 1, 2010.
                    ``(B) Subsequent revisions.--
                            ``(i) Periodic review and adjustments in 
                        fee schedule areas.--Subsequent to the process 
                        outlined in paragraph (1)(C), not less often 
                        than every three years, the Secretary shall 
                        review and update the California Rest-of-State 
                        fee schedule area using MSAs as defined by the 
                        Director of the Office of Management and Budget 
                        and the iterative methodology described in 
                        subparagraph (A)(i).
                            ``(ii) Link with geographic index data 
                        revision.--The revision described in clause (i) 
                        shall be made effective concurrently with the 
                        application of the periodic review of the 
                        adjustment factors required under paragraph 
                        (1)(C) for California for 2012 and subsequent 
                        periods. Upon request, the Secretary shall make 
                        available to the public any county-level or MSA 
                        derived data used to calculate the geographic 
                        practice cost index.
                    ``(C) References to fee schedule areas.--Effective 
                for services furnished on or after January 1, 2010, for 
                the State of California, any reference in this section 
                to a fee schedule area shall be deemed a reference to 
                an MSA in the State.''.
    (b) Conforming Amendment to Definition of Fee Schedule Area.--
Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w(j)(2)) 
is amended by striking ``The term'' and inserting ``Except as provided 
in subsection (e)(6)(C), the term''.

                     PART 2--MARKET BASKET UPDATES

SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATES THAT DO NOT ALREADY INCORPORATE SUCH 
              IMPROVEMENTS.

    (a) Outpatient Hospitals.--
            (1) In general.--The first sentence of section 
        1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C. 
        1395l(t)(3)(C)(iv)) is amended--
                    (A) by inserting ``(which is subject to the 
                productivity adjustment described in subclause (II) of 
                such section)'' after ``1886(b)(3)(B)(iii)''; and
                    (B) by inserting ``(but not below 0)'' after 
                ``reduced''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to increase factors for services furnished in years 
        beginning with 2010.
    (b) Ambulance Services.--Section 1834(l)(3)(B) of such Act (42 
U.S.C. 1395m(l)(3)(B))) is amended by inserting before the period at 
the end the following: ``and, in the case of years beginning with 2010, 
subject to the productivity adjustment described in section 
1886(b)(3)(B)(iii)(II)''.
    (c) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
such Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
            (1) by redesignating clause (v) as clause (vi); and
            (2) by inserting after clause (iv) the following new 
        clause:
    ``(v) In implementing the system described in clause (i), for 
services furnished during 2010 or any subsequent year, to the extent 
that an annual percentage change factor applies, such factor shall be 
subject to the productivity adjustment described in section 
1886(b)(3)(B)(iii)(II).''.
    (d) Laboratory Services.--Section 1833(h)(2)(A) of such Act (42 
U.S.C. 1395l(h)(2)(A)) is amended--
            (1) in clause (i), by striking ``for each of the years 2009 
        through 2013'' and inserting ``for 2009''; and
            (2) clause (ii)--
                    (A) by striking ``and'' at the end of subclause 
                (III);
                    (B) by striking the period at the end of subclause 
                (IV) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
            ``(V) the annual adjustment in the fee schedules determined 
        under clause (i) for years beginning with 2010 shall be subject 
        to the productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II).''.
    (e) Certain Durable Medical Equipment.--Section 1834(a)(14) of such 
Act (42 U.S.C. 1395m(a)(14)) is amended--
            (1) in subparagraph (K), by inserting before the semicolon 
        at the end the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)'';
            (2) in subparagraph (L)(i), by inserting after ``June 
        2013,'' the following: ``subject to the productivity adjustment 
        described in section 1886(b)(3)(B)(iii)(II),'';
            (3) in subparagraph (L)(ii), by inserting after ``June 
        2013'' the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)''; and
            (4) in subparagraph (M), by inserting before the period at 
        the end the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)''.

                        PART 3--OTHER PROVISIONS

SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.

    (a) In General.--Section 1834(a)(7)(A)(iii) of the Social Security 
Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is amended--
            (1) in the heading, by inserting ``certain complex 
        rehabilitative'' after ``option for''; and
            (2) by striking ``power-driven wheelchair'' and inserting 
        ``complex rehabilitative power-driven wheelchair recognized by 
        the Secretary as classified within group 3 or higher''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2011, and shall apply to power-driven 
wheelchairs furnished on or after such date. Such amendments shall not 
apply to contracts entered into under section 1847 of the Social 
Security Act (42 U.S.C. 1395w-3) pursuant to a bid submitted under such 
section before October 1, 2010, under subsection (a)(1)(B)(i)(I) of 
such section.

SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.

     Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 142 of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275), is amended by striking, the first place it appears, ``January 1, 
2010'' and inserting ``January 1, 2012''.

SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.

    Not later than 12 months after the date of enactment of this Act, 
the Medicare Payment Advisory Commission shall submit to Congress a 
report on the following:
            (1) The scope of coverage for home infusion therapy in the 
        fee-for-service Medicare program under title XVIII of the 
        Social Security Act, Medicare Advantage under part C of such 
        title, the veteran's health care program under chapter 17 of 
        title 38, United States Code, and among private payers, 
        including an analysis of the scope of services provided by home 
        infusion therapy providers to their patients in such programs.
            (2) The benefits and costs of providing such coverage under 
        the Medicare program, including a calculation of the potential 
        savings achieved through avoided or shortened hospital and 
        nursing home stays as a result of Medicare coverage of home 
        infusion therapy.
            (3) An assessment of sources of data on the costs of home 
        infusion therapy that might be used to construct payment 
        mechanisms in the Medicare program.
            (4) Recommendations, if any, on the structure of a payment 
        system under the Medicare program for home infusion therapy, 
        including an analysis of the payment methodologies used under 
        Medicare Advantage plans and private health plans for the 
        provision of home infusion therapy and their applicability to 
        the Medicare program.

SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS (ASCS) TO SUBMIT COST 
              DATA AND OTHER DATA.

    (a) Cost Reporting.--
            (1) In general.--Section 1833(i) of the Social Security Act 
        (42 U.S.C. 1395l(i)) is amended by adding at the end the 
        following new paragraph:
    ``(8) The Secretary shall require, as a condition of the agreement 
described in section 1832(a)(2)(F)(i), the submission of such cost 
report as the Secretary may specify, taking into account the 
requirements for such reports under section 1815 in the case of a 
hospital.''.
            (2) Development of cost report.--Not later than 3 years 
        after the date of the enactment of this Act, the Secretary of 
        Health and Human Services shall develop a cost report form for 
        use under section 1833(i)(8) of the Social Security Act, as 
        added by paragraph (1).
            (3) Audit requirement.--The Secretary shall provide for 
        periodic auditing of cost reports submitted under section 
        1833(i)(8) of the Social Security Act, as added by paragraph 
        (1).
            (4) Effective date.--The amendment made by paragraph (1) 
        shall apply to agreements applicable to cost reporting periods 
        beginning 18 months after the date the Secretary develops the 
        cost report form under paragraph (2).
    (b) Additional Data on Quality.--
            (1) In general.--Section 1833(i)(7) of such Act (42 U.S.C. 
        1395l(i)(7)) is amended--
                    (A) in subparagraph (B), by inserting ``subject to 
                subparagraph (C),'' after ``may otherwise provide,''; 
                and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(C) Under subparagraph (B) the Secretary shall require the 
reporting of such additional data relating to quality of services 
furnished in an ambulatory surgical facility, including data on health 
care associated infections, as the Secretary may specify.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall to reporting for years beginning with 2012.

SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended by adding at the end the following new paragraph:
            ``(18) Authorization of adjustment for cancer hospitals.--
                    ``(A) Study.--The Secretary shall conduct a study 
                to determine if, under the system under this 
                subsection, costs incurred by hospitals described in 
                section 1886(d)(1)(B)(v) with respect to ambulatory 
                payment classification groups exceed those costs 
                incurred by other hospitals furnishing services under 
                this subsection (as determined appropriate by the 
                Secretary).
                    ``(B) Authorization of adjustment.--Insofar as the 
                Secretary determines under subparagraph (A) that costs 
                incurred by hospitals described in section 
                1886(d)(1)(B)(v) exceed those costs incurred by other 
                hospitals furnishing services under this subsection, 
                the Secretary shall provide for an appropriate 
                adjustment under paragraph (2)(E) to reflect those 
                higher costs effective for services furnished on or 
                after January 1, 2011.''.

SEC. 1146. MEDICARE IMPROVEMENT FUND.

    Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)(A)) is amended to read as follows:
                    ``(A) the period beginning with fiscal year 2011 
                and ending with fiscal year 2019, $8,000,000,000; 
                and''.

SEC. 1147. PAYMENT FOR IMAGING SERVICES.

    (a) Adjustment in Practice Expense to Reflect Higher Presumed 
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w) 
is amended--
            (1) in subsection (b)(4)--
                    (A) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``this paragraph''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Adjustment in practice expense to reflect 
                higher presumed utilization.--In computing the number 
                of practice expense relative value units under 
                subsection (c)(2)(C)(ii) with respect to advanced 
                diagnostic imaging services (as defined in section 
                1834(e)(1)(B)) , the Secretary shall adjust such number 
                of units so it reflects a 75 percent (rather than 50 
                percent) presumed rate of utilization of imaging 
                equipment.''; and
            (2) in subsection (c)(2)(B)(v)(II), by inserting ``and 
        other provisions'' after ``OPD payment cap''.
    (b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848(b)(4) of such 
Act is further amended by adding at the end the following new 
subparagraph:
                    ``(D) Adjustment in technical component discount on 
                single-session imaging involving consecutive body 
                parts.--The Secretary shall increase the reduction in 
                expenditures attributable to the multiple procedure 
                payment reduction applicable to the technical component 
                for imaging under the final rule published by the 
                Secretary in the Federal Register on November 21, 2005 
                (part 405 of title 42, Code of Federal Regulations) 
                from 25 percent to 50 percent.''.
    (c) Effective Date.--Except as otherwise provided, this section, 
and the amendments made by this section, shall apply to services 
furnished on or after January 1, 2011.

SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.

    (a) Waiver of Surety Bond Requirement.--Section 1834(a)(16) of the 
Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by adding at 
the end the following: ``The requirement for a surety bond described in 
subparagraph (B) shall not apply in the case of a pharmacy (i) that has 
been enrolled under section 1866(j) as a supplier of durable medical 
equipment, prosthetics, orthotics, and supplies and has been issued 
(which may include renewal of) a provider number (as described in the 
first sentence of this paragraph) for at least 5 years, and (ii) for 
which a final adverse action (as defined in section 424.57(a) of title 
42, Code of Federal Regulations) has never been imposed.''.
    (b) Ensuring Supply of Oxygen Equipment .--
            (1) In general.--Section 1834(a)(5)(F) of the Social 
        Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                    (A) in clause (ii), by striking ``After the'' and 
                inserting ``Except as provided in clause (iii), after 
                the''; and
                    (B) by adding at the end the following new clause:
                            ``(iii) Continuation of supply.--In the 
                        case of a supplier furnishing such equipment to 
                        an individual under this subsection as of the 
                        27th month of the 36 months described in clause 
                        (i), the supplier furnishing such equipment as 
                        of such month shall continue to furnish such 
                        equipment to such individual (either directly 
                        or though arrangements with other suppliers of 
                        such equipment) during any subsequent period of 
                        medical need for the remainder of the 
                        reasonable useful lifetime of the equipment, as 
                        determined by the Secretary, regardless of the 
                        location of the individual, unless another 
                        supplier has accepted responsibility for 
                        continuing to furnish such equipment during the 
                        remainder of such period.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as of the date of the enactment of this Act 
        and shall apply to the furnishing of equipment to individuals 
        for whom the 27th month of a continuous period of use of oxygen 
        equipment described in section 1834(a)(5)(F) of the Social 
        Security Act occurs on or after July 1, 2010.
    (c) Treatment of Current Accreditation Applications.--Section 
1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is amended--
            (1) in clause (i)--
                    (A) by striking ``clause (ii)'' and inserting 
                ``clauses (ii) and (iii)''; and
                    (B) by striking ``and'' at the end;
            (2) by striking the period at the end of clause (ii)(II) 
        and by inserting ``; and'';
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) the requirement for accreditation 
                        described in clause (i) shall not apply for 
                        purposes of supplying diabetic testing 
                        supplies, canes, and crutches in the case of a 
                        pharmacy that is enrolled under section 1866(j) 
                        as a supplier of durable medical equipment, 
                        prosthetics, orthotics, and supplies.''; and
            (4) by adding after and below clause (iii) the following:
                ``Any supplier that has submitted an application for 
                accreditation before August 1, 2009, shall be deemed as 
                meeting applicable standards and accreditation 
                requirement under this subparagraph until such time as 
                the independent accreditation organization takes action 
                on the supplier's application.''.
    (d) Restoring 36-month Oxygen Rental Period in Case of Supplier 
Bankruptcy for Certain Individuals.--Section 1834(a)(5)(F) of such Act 
(42 U.S.C. 1395m(a)(5)(F)), as amended by subsection (b), is further 
amended by adding at the end the following new clause:
                            ``(iv) Exception for bankruptcy.--If a 
                        supplier who furnishes oxygen and oxygen 
                        equipment to an individual is declared bankrupt 
                        and its assets are liquidated and at the time 
                        of such declaration and liquidation more than 
                        24 months of rental payments have been made, 
                        such individual may begin a new 36-month rental 
                        period under this subparagraph with another 
                        supplier of oxygen.''.

SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.

    (a) In General.--The Medicare Payment Advisory Commission shall 
conduct a study regarding bone mass measurement, including computed 
tomography, duel-energy x-ray absorptriometry, and vertebral fracture 
assessment. The study shall focus on the following:
            (1) An assessment of the adequacy of Medicare payment rates 
        for such services, taking into account costs of acquiring the 
        necessary equipment, professional work time, and practice 
        expense costs.
            (2) The impact of Medicare payment changes since 2006 on 
        beneficiary access to bone mass measurement benefits in general 
        and in rural and minority communities specifically.
            (3) A review of the clinically appropriate and recommended 
        use among Medicare beneficiaries and how usage rates among such 
        beneficiaries compares to such recommendations.
            (4) In conjunction with the findings under (3), 
        recommendations, if necessary, regarding methods for reaching 
        appropriate use of bone mass measurement studies among Medicare 
        beneficiaries.
    (b) Report.--The Commission shall submit a report to the Congress, 
not later than 9 months after the date of the enactment of this Act, 
containing a description of the results of the study conducted under 
subsection (a) and the conclusions and recommendations, if any, 
regarding each of the issues described in paragraphs (1), (2) (3) and 
(4) of such subsection.

        Subtitle C--Provisions Related to Medicare Parts A and B

SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.

    (a) Hospitals.--
            (1) In general.--Section 1886 of the Social Security Act 
        (42 U.S.C. 1395ww), as amended by section 1103(a), is amended 
        by adding at the end the following new subsection:
    ``(p) Adjustment to Hospital Payments for Excess Readmissions.--
            ``(1) In general.--With respect to payment for discharges 
        from an applicable hospital (as defined in paragraph (5)(C)) 
        occurring during a fiscal year beginning on or after October 1, 
        2011, in order to account for excess readmissions in the 
        hospital, the Secretary shall reduce the payments that would 
        otherwise be made to such hospital under subsection (d) (or 
        section 1814(b)(3), as the case may be) for such a discharge by 
        an amount equal to the product of--
                    ``(A) the base operating DRG payment amount (as 
                defined in paragraph (2)) for the discharge; and
                    ``(B) the adjustment factor (described in paragraph 
                (3)(A)) for the hospital for the fiscal year.
            ``(2) Base operating drg payment amount.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for purposes of this subsection, the 
                term `base operating DRG payment amount' means, with 
                respect to a hospital for a fiscal year, the payment 
                amount that would otherwise be made under subsection 
                (d) for a discharge if this subsection did not apply, 
                reduced by any portion of such amount that is 
                attributable to payments under subparagraphs (B) and 
                (F) of paragraph (5).
                    ``(B) Adjustments.--For purposes of subparagraph 
                (A), in the case of a hospital that is paid under 
                section 1814(b)(3), the term `base operating DRG 
                payment amount' means the payment amount under such 
                section.
            ``(3) Adjustment factor.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the adjustment factor under this paragraph for an 
                applicable hospital for a fiscal year is equal to the 
                greater of--
                            ``(i) the ratio described in subparagraph 
                        (B) for the hospital for the applicable period 
                        (as defined in paragraph (5)(D)) for such 
                        fiscal year; or
                            ``(ii) the floor adjustment factor 
                        specified in subparagraph (C).
                    ``(B) Ratio.--The ratio described in this 
                subparagraph for a hospital for an applicable period is 
                equal to 1 minus the ratio of--
                            ``(i) the aggregate payments for excess 
                        readmissions (as defined in paragraph (4)(A)) 
                        with respect to an applicable hospital for the 
                        applicable period; and
                            ``(ii) the aggregate payments for all 
                        discharges (as defined in paragraph (4)(B)) 
                        with respect to such applicable hospital for 
                        such applicable period.
                    ``(C) Floor adjustment factor.--For purposes of 
                subparagraph (A), the floor adjustment factor specified 
                in this subparagraph for--
                            ``(i) fiscal year 2012 is 0.99;
                            ``(ii) fiscal year 2013 is 0.98;
                            ``(iii) fiscal year 2014 is 0.97; or
                            ``(iv) a subsequent fiscal year is 0.95.
            ``(4) Aggregate payments, excess readmission ratio 
        defined.--For purposes of this subsection:
                    ``(A) Aggregate payments for excess readmissions.--
                The term `aggregate payments for excess readmissions' 
                means, for a hospital for a fiscal year, the sum, for 
                applicable conditions (as defined in paragraph (5)(A)), 
                of the product, for each applicable condition, of--
                            ``(i) the base operating DRG payment amount 
                        for such hospital for such fiscal year for such 
                        condition;
                            ``(ii) the number of admissions for such 
                        condition for such hospital for such fiscal 
                        year; and
                            ``(iii) the excess readmissions ratio (as 
                        defined in subparagraph (C)) for such hospital 
                        for the applicable period for such fiscal year 
                        minus 1.
                    ``(B) Aggregate payments for all discharges.--The 
                term `aggregate payments for all discharges' means, for 
                a hospital for a fiscal year, the sum of the base 
                operating DRG payment amounts for all discharges for 
                all conditions from such hospital for such fiscal year.
                    ``(C) Excess readmission ratio.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the term `excess readmissions ratio' 
                        means, with respect to an applicable condition 
                        for a hospital for an applicable period, the 
                        ratio (but not less than 1.0) of--
                                    ``(I) the risk adjusted 
                                readmissions based on actual 
                                readmissions, as determined consistent 
                                with a readmission measure methodology 
                                that has been endorsed under paragraph 
                                (5)(A)(ii)(I), for an applicable 
                                hospital for such condition with 
                                respect to the applicable period; to
                                    ``(II) the risk adjusted expected 
                                readmissions (as determined consistent 
                                with such a methodology) for such 
                                hospital for such condition with 
                                respect to such applicable period.
                            ``(ii) Exclusion of certain readmissions.--
                        For purposes of clause (i), with respect to a 
                        hospital, excess readmissions shall not include 
                        readmissions for an applicable condition for 
                        which there are fewer than a minimum number (as 
                        determined by the Secretary) of discharges for 
                        such applicable condition for the applicable 
                        period and such hospital.
                            ``(iii) Adjustment.--In order to promote a 
                        reduction over time in the overall rate of 
                        readmissions for applicable conditions, the 
                        Secretary may provide, beginning with 
                        discharges for fiscal year 2014, for the 
                        determination of the excess readmissions ratio 
                        under subparagraph (C) to be based on a ranking 
                        of hospitals by readmission ratios (from lower 
                        to higher readmission ratios) normalized to a 
                        benchmark that is lower than the 50th 
                        percentile.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) Applicable condition.--The term `applicable 
                condition' means, subject to subparagraph (B), a 
                condition or procedure selected by the Secretary among 
                conditions and procedures for which--
                            ``(i) readmissions (as defined in 
                        subparagraph (E)) that represent conditions or 
                        procedures that are high volume or high 
                        expenditures under this title (or other 
                        criteria specified by the Secretary); and
                            ``(ii) measures of such readmissions--
                                    ``(I) have been endorsed by the 
                                entity with a contract under section 
                                1890(a); and
                                    ``(II) such endorsed measures have 
                                appropriate exclusions for readmissions 
                                that are unrelated to the prior 
                                discharge (such as a planned 
                                readmission or transfer to another 
                                applicable hospital).
                    ``(B) Expansion of applicable conditions.--
                Beginning with fiscal year 2013, the Secretary shall 
                expand the applicable conditions beyond the 3 
                conditions for which measures have been endorsed as 
                described in subparagraph (A)(ii)(I) as of the date of 
                the enactment of this subsection to the additional 4 
                conditions that have been so identified by the Medicare 
                Payment Advisory Commission in its report to Congress 
                in June 2007 and to other conditions and procedures 
                which may include an all-condition measure of 
                readmissions, as determined appropriate by the 
                Secretary. In expanding such applicable conditions, the 
                Secretary shall seek the endorsement described in 
                subparagraph (A)(ii)(I) but may apply such measures 
                without such an endorsement.
                    ``(C) Applicable hospital.--The term `applicable 
                hospital' means a subsection (d) hospital or a hospital 
                that is paid under section 1814(b)(3).
                    ``(D) Applicable period.--The term `applicable 
                period' means, with respect to a fiscal year, such 
                period as the Secretary shall specify for purposes of 
                determining excess readmissions.
                    ``(E) Readmission.--The term `readmission' means, 
                in the case of an individual who is discharged from an 
                applicable hospital, the admission of the individual to 
                the same or another applicable hospital within a time 
                period specified by the Secretary from the date of such 
                discharge. Insofar as the discharge relates to an 
                applicable condition for which there is an endorsed 
                measure described in subparagraph (A)(ii)(I), such time 
                period (such as 30 days) shall be consistent with the 
                time period specified for such measure.
            ``(6) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the determination of base operating DRG 
                payment amounts;
                    ``(B) the methodology for determining the 
                adjustment factor under paragraph (3), including excess 
                readmissions ratio under paragraph (4)(C), aggregate 
                payments for excess readmissions under paragraph 
                (4)(A), and aggregate payments for all discharges under 
                paragraph (4)(B), and applicable periods and applicable 
                conditions under paragraph (5);
                    ``(C) the measures of readmissions as described in 
                paragraph (5)(A)(ii); and
                    ``(D) the determination of a targeted hospital 
                under paragraph (8)(B)(i), the increase in payment 
                under paragraph (8)(B)(ii), the aggregate cap under 
                paragraph (8)(C)(i), the hospital-specific limit under 
                paragraph (8)(C)(ii), and the form of payment made by 
                the Secretary under paragraph (8)(D).
            ``(7) Monitoring inappropriate changes in admissions 
        practices.--The Secretary shall monitor the activities of 
        applicable hospitals to determine if such hospitals have taken 
        steps to avoid patients at risk in order to reduce the 
        likelihood of increasing readmissions for applicable 
        conditions. If the Secretary determines that such a hospital 
        has taken such a step, after notice to the hospital and 
        opportunity for the hospital to undertake action to alleviate 
        such steps, the Secretary may impose an appropriate sanction.
            ``(8) Assistance to certain hospitals.--
                    ``(A) In general.--For purposes of providing funds 
                to applicable hospitals to take steps described in 
                subparagraph (E) to address factors that may impact 
                readmissions of individuals who are discharged from 
                such a hospital, for fiscal years beginning on or after 
                October 1, 2011, the Secretary shall make a payment 
                adjustment for a hospital described in subparagraph 
                (B), with respect to each such fiscal year, by a 
                percent estimated by the Secretary to be consistent 
                with subparagraph (C).
                    ``(B) Targeted hospitals.--Subparagraph (A) shall 
                apply to an applicable hospital that--
                            ``(i) received (or, in the case of an 
                        1814(b)(3) hospital, otherwise would have been 
                        eligible to receive) $10,000,000 or more in 
                        disproportionate share payments using the 
                        latest available data as estimated by the 
                        Secretary; and
                            ``(ii) provides assurances satisfactory to 
                        the Secretary that the increase in payment 
                        under this paragraph shall be used for purposes 
                        described in subparagraph (E).
                    ``(C) Caps.--
                            ``(i) Aggregate cap.--The aggregate amount 
                        of the payment adjustment under this paragraph 
                        for a fiscal year shall not exceed 5 percent of 
                        the estimated difference in the spending that 
                        would occur for such fiscal year with and 
                        without application of the adjustment factor 
                        described in paragraph (3) and applied pursuant 
                        to paragraph (1).
                            ``(ii) Hospital-specific limit.--The 
                        aggregate amount of the payment adjustment for 
                        a hospital under this paragraph shall not 
                        exceed the estimated difference in spending 
                        that would occur for such fiscal year for such 
                        hospital with and without application of the 
                        adjustment factor described in paragraph (3) 
                        and applied pursuant to paragraph (1).
                    ``(D) Form of payment.--The Secretary may make the 
                additional payments under this paragraph on a lump sum 
                basis, a periodic basis, a claim by claim basis, or 
                otherwise.
                    ``(E) Use of additional payment.--Funding under 
                this paragraph shall be used by targeted hospitals for 
                transitional care activities designed to address the 
                patient noncompliance issues that result in higher than 
                normal readmission rates, such as one or more of the 
                following:
                            ``(i) Providing care coordination services 
                        to assist in transitions from the targeted 
                        hospital to other settings.
                            ``(ii) Hiring translators and interpreters.
                            ``(iii) Increasing services offered by 
                        discharge planners.
                            ``(iv) Ensuring that individuals receive a 
                        summary of care and medication orders upon 
                        discharge.
                            ``(v) Developing a quality improvement plan 
                        to assess and remedy preventable readmission 
                        rates.
                            ``(vi) Assigning discharged individuals to 
                        a medical home.
                            ``(vii) Doing other activities as 
                        determined appropriate by the Secretary.
                    ``(F) GAO report on use of funds.--Not later than 3 
                years after the date on which funds are first made 
                available under this paragraph, the Comptroller General 
                of the United States shall submit to Congress a report 
                on the use of such funds.
                    ``(G) Disproportionate share hospital payment.--In 
                this paragraph, the term `disproportionate share 
                hospital payment' means an additional payment amount 
                under subsection (d)(5)(F).''.
    (b) Application to Critical Access Hospitals.--Section 1814(l) of 
the Social Security Act (42 U.S.C. 1395f(l)) is amended--
            (1) in paragraph (5)--
                    (A) by striking ``and'' at the end of subparagraph 
                (C);
                    (B) by striking the period at the end of 
                subparagraph (D) and inserting ``; and'';
                    (C) by inserting at the end the following new 
                subparagraph:
            ``(E) the methodology for determining the adjustment factor 
        under paragraph (5), including the determination of aggregate 
        payments for actual and expected readmissions, applicable 
        periods, applicable conditions and measures of readmissions.''; 
        and
                    (D) by redesignating such paragraph as paragraph 
                (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
    ``(5) The adjustment factor described in section 1886(p)(3) shall 
apply to payments with respect to a critical access hospital with 
respect to a cost reporting period beginning in fiscal year 2012 and 
each subsequent fiscal year (after application of paragraph (4) of this 
subsection) in a manner similar to the manner in which such section 
applies with respect to a fiscal year to an applicable hospital as 
described in section 1886(p)(2).''.
    (c) Post Acute Care Providers.--
            (1) Interim policy.--
                    (A) In general.--With respect to a readmission to 
                an applicable hospital or a critical access hospital 
                (as described in section 1814(l) of the Social Security 
                Act) from a post acute care provider (as defined in 
                paragraph (3)) and such a readmission is not governed 
                by section 412.531 of title 42, Code of Federal 
                Regulations, if the claim submitted by such a post-
                acute care provider under title XVIII of the Social 
                Security Act indicates that the individual was 
                readmitted to a hospital from such a post-acute care 
                provider or admitted from home and under the care of a 
                home health agency within 30 days of an initial 
                discharge from an applicable hospital or critical 
                access hospital, the payment under such title on such 
                claim shall be the applicable percent specified in 
                subparagraph (B) of the payment that would otherwise be 
                made under the respective payment system under such 
                title for such post-acute care provider if this 
                subsection did not apply.
                    (B) Applicable percent defined.--For purposes of 
                subparagraph (A), the applicable percent is--
                            (i) for fiscal or rate year 2012 is 0.996;
                            (ii) for fiscal or rate year 2013 is 0.993; 
                        and
                            (iii) for fiscal or rate year 2014 is 0.99.
                    (C) Effective date.--Subparagraph (1) shall apply 
                to discharges or services furnished (as the case may be 
                with respect to the applicable post acute care 
                provider) on or after the first day of the fiscal year 
                or rate year, beginning on or after October 1, 2011, 
                with respect to the applicable post acute care 
                provider.
            (2) Development and application of performance measures.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall develop appropriate measures of 
                readmission rates for post acute care providers. The 
                Secretary shall seek endorsement of such measures by 
                the entity with a contract under section 1890(a) of the 
                Social Security Act but may adopt and apply such 
                measures under this paragraph without such an 
                endorsement. The Secretary shall expand such measures 
                in a manner similar to the manner in which applicable 
                conditions are expanded under paragraph (5)(B) of 
                section 1886(p) of the Social Security Act, as added by 
                subsection (a).
                    (B) Implementation.--The Secretary shall apply, on 
                or after October 1, 2014, with respect to post acute 
                care providers, policies similar to the policies 
                applied with respect to applicable hospitals and 
                critical access hospitals under the amendments made by 
                subsection (a). The provisions of paragraph (1) shall 
                apply with respect to any period on or after October 1, 
                2014, and before such application date described in the 
                previous sentence in the same manner as such provisions 
                apply with respect to fiscal or rate year 2014.
                    (C) Monitoring and penalties.--The provisions of 
                paragraph (7) of such section 1886(p) shall apply to 
                providers under this paragraph in the same manner as 
                they apply to hospitals under such section.
            (3) Definitions.--For purposes of this subsection:
                    (A) Post acute care provider.--The term ``post 
                acute care provider'' means--
                            (i) a skilled nursing facility (as defined 
                        in section 1819(a) of the Social Security Act);
                            (ii) an inpatient rehabilitation facility 
                        (described in section 1886(h)(1)(A) of such 
                        Act);
                            (iii) a home health agency (as defined in 
                        section 1861(o) of such Act); and
                            (iv) a long term care hospital (as defined 
                        in section 1861(ccc) of such Act).
                    (B) Other terms .--The terms ``applicable 
                condition'', ``applicable hospital'', and 
                ``readmission'' have the meanings given such terms in 
                section 1886(p)(5) of the Social Security Act, as added 
                by subsection (a)(1).
    (d) Physicians.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study to determine how the readmissions policy 
        described in the previous subsections could be applied to 
        physicians.
            (2) Considerations.--In conducting the study, the Secretary 
        shall consider approaches such as--
                    (A) creating a new code (or codes) and payment 
                amount (or amounts) under the fee schedule in section 
                1848 of the Social Security Act (in a budget neutral 
                manner) for services furnished by an appropriate 
                physician who sees an individual within the first week 
                after discharge from a hospital or critical access 
                hospital;
                    (B) developing measures of rates of readmission for 
                individuals treated by physicians;
                    (C) applying a payment reduction for physicians who 
                treat the patient during the initial admission that 
                results in a readmission; and
                    (D) methods for attributing payments or payment 
                reductions to the appropriate physician or physicians.
            (3) Report.--The Secretary shall issue a public report on 
        such study not later than the date that is one year after the 
        date of the enactment of this Act.
    (e) Funding.--For purposes of carrying out the provisions of this 
section, in addition to funds otherwise available, out of any funds in 
the Treasury not otherwise appropriated, there are appropriated to the 
Secretary of Health and Human Services for the Center for Medicare & 
Medicaid Services Program Management Account $25,000,000 for each 
fiscal year beginning with 2010. Amounts appropriated under this 
subsection for a fiscal year shall be available until expended.

SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING 
              PILOT PROGRAM.

    (a) Plan.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a detailed plan to reform payment for post acute care 
        (PAC) services under the Medicare program under title XVIII of 
        the Social Security Act (in this section referred to as the 
        ``Medicare program)''. The goals of such payment reform are 
        to--
                    (A) improve the coordination, quality, and 
                efficiency of such services; and
                    (B) improve outcomes for individuals such as 
                reducing the need for readmission to hospitals from 
                providers of such services.
            (2) Bundling post acute services.--The plan described in 
        paragraph (1) shall include detailed specifications for a 
        bundled payment for post acute services (in this section 
        referred to as the ``post acute care bundle''), and may include 
        other approaches determined appropriate by the Secretary.
            (3) Post acute services.--For purposes of this section, the 
        term ``post acute services'' means services for which payment 
        may be made under the Medicare program that are furnished by 
        skilled nursing facilities, inpatient rehabilitation 
        facilities, long term care hospitals, hospital based outpatient 
        rehabilitation facilities and home health agencies to an 
        individual after discharge of such individual from a hospital, 
        and such other services determined appropriate by the 
        Secretary.
    (b) Details.--The plan described in subsection (a)(1) shall include 
consideration of the following issues:
            (1) The nature of payments under a post acute care bundle, 
        including the type of provider or entity to whom payment should 
        be made, the scope of activities and services included in the 
        bundle, whether payment for physicians' services should be 
        included in the bundle, and the period covered by the bundle.
            (2) Whether the payment should be consolidated with the 
        payment under the inpatient prospective system under section 
        1886 of the Social Security Act (in this section referred to as 
        MS-DRGs) or a separate payment should be established for such 
        bundle, and if a separate payment is established, whether it 
        should be made only upon use of post acute care services or for 
        every discharge.
            (3) Whether the bundle should be applied across all 
        categories of providers of inpatient services (including 
        critical access hospitals) and post acute care services or 
        whether it should be limited to certain categories of 
        providers, services, or discharges, such as high volume or high 
        cost MS-DRGs.
            (4) The extent to which payment rates could be established 
        to achieve offsets for efficiencies that could be expected to 
        be achieved with a bundle payment, whether such rates should be 
        established on a national basis or for different geographic 
        areas, should vary according to discharge, case mix, outliers, 
        and geographic differences in wages or other appropriate 
        adjustments, and how to update such rates.
            (5) The nature of protections needed for individuals under 
        a system of bundled payments to ensure that individuals receive 
        quality care, are furnished the level and amount of services 
        needed as determined by an appropriate assessment instrument, 
        are offered choice of provider, and the extent to which 
        transitional care services would improve quality of care for 
        individuals and the functioning of a bundled post-acute system.
            (6) The nature of relationships that may be required 
        between hospitals and providers of post acute care services to 
        facilitate bundled payments, including the application of 
        gainsharing, anti-referral, anti-kickback, and anti-trust laws.
            (7) Quality measures that would be appropriate for 
        reporting by hospitals and post acute providers (such as 
        measures that assess changes in functional status and quality 
        measures appropriate for each type of post acute services 
        provider including how the reporting of such quality measures 
        could be coordinated with other reporting of such quality 
        measures by such providers otherwise required).
            (8) How cost-sharing for a post acute care bundle should be 
        treated relative to current rules for cost-sharing for 
        inpatient hospital, home health, skilled nursing facility, and 
        other services.
            (9) How other programmatic issues should be treated in a 
        post acute care bundle, including rules specific to various 
        types of post-acute providers such as the post-acute transfer 
        policy, three-day hospital stay to qualify for services 
        furnished by skilled nursing facilities, and the coordination 
        of payments and care under the Medicare program and the 
        Medicaid program.
            (10) Such other issues as the Secretary deems appropriate.
    (c) Consultations and Analysis.--
            (1) Consultation with stakeholders.--In developing the plan 
        under subsection (a)(1), the Secretary shall consult with 
        relevant stakeholders and shall consider experience with such 
        research studies and demonstrations that the Secretary 
        determines appropriate.
            (2) Analysis and data collection.--In developing such plan, 
        the Secretary shall--
                    (A) analyze the issues described in subsection (b) 
                and other issues that the Secretary determines 
                appropriate;
                    (B) analyze the impacts (including geographic 
                impacts) of post acute service reform approaches, 
                including bundling of such services on individuals, 
                hospitals, post acute care providers, and physicians;
                    (C) use existing data (such as data submitted on 
                claims) and collect such data as the Secretary 
                determines are appropriate to develop such plan 
                required in this section; and
                    (D) if patient functional status measures are 
                appropriate for the analysis, to the extent practical, 
                build upon the CARE tool being developed pursuant to 
                section 5008 of the Deficit Reduction Act of 2005.
    (d) Administration.--
            (1) Funding.--For purposes of carrying out the provisions 
        of this section, in addition to funds otherwise available, out 
        of any funds in the Treasury not otherwise appropriated, there 
        are appropriated to the Secretary for the Center for Medicare & 
        Medicaid Services Program Management Account $15,000,000 for 
        each of the fiscal years 2010 through 2012. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            (2) Expedited data collection.--Chapter 35 of title 44, 
        United States Code shall not apply to this section.
    (e) Public Reports.--
            (1) Interim reports.--The Secretary shall issue interim 
        public reports on a periodic basis on the plan described in 
        subsection (a)(1), the issues described in subsection (b), and 
        impact analyses as the Secretary determines appropriate.
            (2) Final report.--Not later than the date that is 3 years 
        after the date of the enactment of this Act, the Secretary 
        shall issue a final public report on such plan, including 
        analysis of issues described in subsection (b) and impact 
        analyses.
    (f) Conversion of Acute Care Episode Demonstration to Pilot Program 
and Expansion to Include Post Acute Services.--
            (1) In general.--Part E of title XVIII of the Social 
        Security Act is amended by inserting after section 1866C the 
        following new section:

 ``conversion of acute care episode demonstration to pilot program and 
                expansion to include post acute services

    ``Sec. 1866D.  (a) Conversion and Expansion.--
            ``(1) In general.--By not later than January 1, 2011, the 
        Secretary shall, for the purpose of promoting the use of 
        bundled payments to promote efficient and high quality delivery 
        of care--
                    ``(A) convert the acute care episode demonstration 
                program conducted under section 1866C to a pilot 
                program; and
                    ``(B) subject to subsection (c), expand such 
                program as so converted to include post acute services 
                and such other services the Secretary determines to be 
                appropriate, which may include transitional services.
            ``(2) Bundled payment structures.--
                    ``(A) In general.--In carrying out paragraph (1), 
                the Secretary may apply bundled payments with respect 
                to--
                            ``(i) hospitals and physicians;
                            ``(ii) hospitals and post-acute care 
                        providers;
                            ``(iii) hospitals, physicians, and post-
                        acute care providers; or
                            ``(iv) combinations of post-acute 
                        providers.
                    ``(B) Further application.--
                            ``(i) In general.--In carrying out 
                        paragraph (1), the Secretary shall apply 
                        bundled payments in a manner so as to include 
                        collaborative care networks and continuing care 
                        hospitals.
                            ``(ii) Collaborative care network 
                        defined.--For purposes of this subparagraph, 
                        the term `collaborative care network' means a 
                        consortium of health care providers that 
                        provides a comprehensive range of coordinated 
                        and integrated health care services to low-
                        income patient populations (including the 
                        uninsured) which may include coordinated and 
                        comprehensive care by safety net providers to 
                        reduce any unnecessary use of items and 
                        services furnished in emergency departments, 
                        manage chronic conditions, improve quality and 
                        efficiency of care, increase preventive 
                        services, and promote adherence to post-acute 
                        and follow-up care plans.
                            ``(iii) Continuing care hospital defined.--
                        For purposes of this subparagraph, the term 
                        `continuing care hospital' means an entity that 
                        has demonstrated the ability to meet patient 
                        care and patient safety standards and that 
                        provides under common management the medical 
                        and rehabilitation services provided in 
                        inpatient rehabilitation hospitals and units 
                        (as defined in section 1886(d)(1)(B)(ii)), 
                        long-term care hospitals (as defined in section 
                        1886(d)(1)(B)(iv)(I)), and skilled nursing 
                        facilities (as defined in section 1819(a)) that 
                        are located in a hospital described in section 
                        1886(d).
    ``(b) Scope.--The pilot program under subsection (a) may include 
additional geographic areas and additional conditions which account for 
significant program spending, as defined by the Secretary. Nothing in 
this subsection shall be construed as limiting the number of hospital 
and physician groups or the number of hospital and post-acute provider 
groups that may participate in the pilot program.
    ``(c) Limitation.--The Secretary shall only expand the pilot 
program under subsection (a) if the Secretary finds that--
            ``(1) the demonstration program under section 1866C and 
        pilot program under this section maintain or increase the 
        quality of care received by individuals enrolled under this 
        title; and
            ``(2) such demonstration program and pilot program reduce 
        program expenditures and, based on the certification under 
        subsection (d), that the expansion of such pilot program would 
        result in estimated spending that would be less than what 
        spending would otherwise be in the absence of this section.
    ``(d) Certification.--For purposes of subsection (c), the Chief 
Actuary of the Centers for Medicare & Medicaid Services shall certify 
whether expansion of the pilot program under this section would result 
in estimated spending that would be less than what spending would 
otherwise be in the absence of this section.
    ``(e) Voluntary Participation.--Nothing in this paragraph shall be 
construed as requiring the participation of an entity in the pilot 
program under this section.
    ``(f) Evaluation on Cost and Quality of Care.--The Secretary shall 
conduct an evaluation of the pilot program under subsection (a) to 
study the effect of such program on costs and quality of care. The 
findings of such evaluation shall be included in the final report 
required under section 1152(e)(2) of America's Affordable Health 
Choices Act of 2009.
    ``(g) Study of Additional Bundling and Episode-based Payment for 
Physicians' Services.--
            ``(1) In general.--The Secretary shall provide for a study 
        of and development of a plan for testing additional ways to 
        increase bundling of payments for physicians in connection with 
        an episode of care, such as in connection with outpatient 
        hospital services or services rendered in physicians' offices, 
        other than those provided under the pilot program.
            ``(2) Application.--The Secretary may implement such a plan 
        through a demonstration program.''.
            (2) Conforming amendment.--Section 1866C(b) of the Social 
        Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking 
        ``The Secretary'' and inserting ``Subject to section 1866D, the 
        Secretary''.

SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.

    Section 1895(b)(3)(B)(ii) of the Social Security Act (42 U.S.C. 
1395fff(b)(3)(B)(ii)) is amended--
            (1) in subclause (IV), by striking ``and'';
            (2) by redesignating subclause (V) as subclause (VII); and
            (3) by inserting after subclause (IV) the following new 
        subclauses:
                                    ``(V) 2007, 2008, and 2009, subject 
                                to clause (v), the home health market 
                                basket percentage increase;
                                    ``(VI) 2010, subject to clause (v), 
                                0 percent; and''.

SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (a) Acceleration of Adjustment for Case Mix Changes.--Section 
1895(b)(3)(B) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B)) 
is amended--
            (1) in clause (iv), by striking ``Insofar as'' and 
        inserting ``Subject to clause (vi), insofar as''; and
            (2) by adding at the end the following new clause:
                            ``(vi) Special rule for case mix changes 
                        for 2011.--
                                    ``(I) In general.--With respect to 
                                the case mix adjustments established in 
                                section 484.220(a) of title 42, Code of 
                                Federal Regulations, the Secretary 
                                shall apply, in 2010, the adjustment 
                                established in paragraph (3) of such 
                                section for 2011, in addition to 
                                applying the adjustment established in 
                                paragraph (2) for 2010.
                                    ``(II) Construction.--Nothing in 
                                this clause shall be construed as 
                                limiting the amount of adjustment for 
                                case mix for 2010 or 2011 if more 
                                recent data indicate an appropriate 
                                adjustment that is greater than the 
                                amount established in the section 
                                described in subclause (I).''.
    (b) Rebasing Home Health Prospective Payment Amount.--Section 
1895(b)(3)(A) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) 
is amended--
            (1) in clause (i)--
                    (A) in subclause (III), by inserting ``and before 
                2011'' after ``after the period described in subclause 
                (II)''; and
                    (B) by inserting after subclause (III) the 
                following new subclauses:
                                    ``(IV) Subject to clause (iii)(I), 
                                for 2011, such amount (or amounts) 
                                shall be adjusted by a uniform 
                                percentage determined to be appropriate 
                                by the Secretary based on analysis of 
                                factors such as changes in the average 
                                number and types of visits in an 
                                episode, the change in intensity of 
                                visits in an episode, growth in cost 
                                per episode, and other factors that the 
                                Secretary considers to be relevant.
                                    ``(V) Subject to clause (iii)(II), 
                                for a year after 2011, such a amount 
                                (or amounts) shall be equal to the 
                                amount (or amounts) determined under 
                                this clause for the previous year, 
                                updated under subparagraph (B).''; and
            (2) by adding at the end the following new clause:
                            ``(iii) Special rule in case of inability 
                        to effect timely rebasing.--
                                    ``(I) Application of proxy amount 
                                for 2011.--If the Secretary is not able 
                                to compute the amount (or amounts) 
                                under clause (i)(IV) so as to permit, 
                                on a timely basis, the application of 
                                such clause for 2011, the Secretary 
                                shall substitute for such amount (or 
                                amounts) 95 percent of the amount (or 
                                amounts) that would otherwise be 
                                specified under clause (i)(III) if it 
                                applied for 2011.
                                    ``(II) Adjustment for subsequent 
                                years based on data.--If the Secretary 
                                applies subclause (I), the Secretary 
                                before July 1, 2011, shall compare the 
                                amount (or amounts) applied under such 
                                subclause with the amount (or amounts) 
                                that should have been applied under 
                                clause (i)(IV). The Secretary shall 
                                decrease or increase the prospective 
                                payment amount (or amounts) under 
                                clause (i)(V) for 2012 (or, at the 
                                Secretary's discretion, over a period 
                                of several years beginning with 2012) 
                                by the amount (if any) by which the 
                                amount (or amounts) applied under 
                                subclause (I) is greater or less, 
                                respectively, than the amount (or 
                                amounts) that should have been applied 
                                under clause (i)(IV).''.

SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATE FOR HOME HEALTH SERVICES.

    (a) In General.--Section 1895(b)(3)(B) of the Social Security Act 
(42 U.S.C. 1395fff(b)(3)(B)) is amended--
            (1) in clause (iii), by inserting ``(including being 
        subject to the productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II))'' after ``in the same manner''; and
            (2) in clause (v)(I), by inserting ``(but not below 0)'' 
        after ``reduced''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to home health market basket percentage increases for years 
beginning with 2010.

SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE PROHIBITION ON 
              CERTAIN PHYSICIAN REFERRALS MADE TO HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';
            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) the hospital meets the requirements described 
                in subsection (i)(1).'';
            (3) by amending subsection (f) to read as follows:
    ``(f) Reporting and Disclosure Requirements.--
            ``(1) In general.--Each entity providing covered items or 
        services for which payment may be made under this title shall 
        provide the Secretary with the information concerning the 
        entity's ownership, investment, and compensation arrangements, 
        including--
                    ``(A) the covered items and services provided by 
                the entity, and
                    ``(B) the names and unique physician identification 
                numbers of all physicians with an ownership or 
                investment interest (as described in subsection 
                (a)(2)(A)), or with a compensation arrangement (as 
                described in subsection (a)(2)(B)), in the entity, or 
                whose immediate relatives have such an ownership or 
                investment interest or who have such a compensation 
                relationship with the entity.
        Such information shall be provided in such form, manner, and at 
        such times as the Secretary shall specify. The requirement of 
        this subsection shall not apply to designated health services 
        provided outside the United States or to entities which the 
        Secretary determines provide services for which payment may be 
        made under this title very infrequently.
            ``(2) Requirements for hospitals with physician ownership 
        or investment.--In the case of a hospital that meets the 
        requirements described in subsection (i)(1), the hospital 
        shall--
                    ``(A) submit to the Secretary an initial report, 
                and periodic updates at a frequency determined by the 
                Secretary, containing a detailed description of the 
                identity of each physician owner and physician investor 
                and any other owners or investors of the hospital;
                    ``(B) require that any referring physician owner or 
                investor discloses to the individual being referred, by 
                a time that permits the individual to make a meaningful 
                decision regarding the receipt of services, as 
                determined by the Secretary, the ownership or 
                investment interest, as applicable, of such referring 
                physician in the hospital; and
                    ``(C) disclose the fact that the hospital is 
                partially or wholly owned by one or more physicians or 
                has one or more physician investors--
                            ``(i) on any public website for the 
                        hospital; and
                            ``(ii) in any public advertising for the 
                        hospital.
        The information to be reported or disclosed under this 
        paragraph shall be provided in such form, manner, and at such 
        times as the Secretary shall specify. The requirements of this 
        paragraph shall not apply to designated health services 
        furnished outside the United States or to entities which the 
        Secretary determines provide services for which payment may be 
        made under this title very infrequently.
            ``(3) Publication of information.--The Secretary shall 
        publish, and periodically update, the information submitted by 
        hospitals under paragraph (2)(A) on the public Internet website 
        of the Centers for Medicare & Medicaid Services.'';
            (4) by amending subsection (g)(5) to read as follows:
            ``(5) Failure to report or disclose information.--
                    ``(A) Reporting.--Any person who is required, but 
                fails, to meet a reporting requirement of paragraphs 
                (1) and (2)(A) of subsection (f) is subject to a civil 
                money penalty of not more than $10,000 for each day for 
                which reporting is required to have been made.
                    ``(B) Disclosure.--Any physician who is required, 
                but fails, to meet a disclosure requirement of 
                subsection (f)(2)(B) or a hospital that is required, 
                but fails, to meet a disclosure requirement of 
                subsection (f)(2)(C) is subject to a civil money 
                penalty of not more than $10,000 for each case in which 
                disclosure is required to have been made.
                    ``(C) Application.--The provisions of section 1128A 
                (other than the first sentence of subsection (a) and 
                other than subsection (b)) shall apply to a civil money 
                penalty under subparagraphs (A) and (B) in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).''; and
            (5) by adding at the end the following new subsection:
    ``(i) Requirements to Qualify for Rural Provider and Hospital 
Ownership Exceptions to Self-referral Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph are as 
        follows:
                    ``(A) Provider agreement.--The hospital had--
                            ``(i) physician ownership or investment on 
                        January 1, 2009; and
                            ``(ii) a provider agreement under section 
                        1866 in effect on such date.
                    ``(B) Prohibition on physician ownership or 
                investment.--The percentage of the total value of the 
                ownership or investment interests held in the hospital, 
                or in an entity whose assets include the hospital, by 
                physician owners or investors in the aggregate does not 
                exceed such percentage as of the date of enactment of 
                this subsection.
                    ``(C) Prohibition on expansion of facility 
                capacity.--Except as provided in paragraph (2), the 
                number of operating rooms, procedure rooms, or beds of 
                the hospital at any time on or after the date of the 
                enactment of this subsection are no greater than the 
                number of operating rooms, procedure rooms, or beds, 
                respectively, as of such date.
                    ``(D) Ensuring bona fide ownership and 
                investment.--
                            ``(i) Any ownership or investment interests 
                        that the hospital offers to a physician are not 
                        offered on more favorable terms than the terms 
                        offered to a person who is not in a position to 
                        refer patients or otherwise generate business 
                        for the hospital.
                            ``(ii) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        provide loans or financing for any physician 
                        owner or investor in the hospital.
                            ``(iii) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        guarantee a loan, make a payment toward a loan, 
                        or otherwise subsidize a loan, for any 
                        physician owner or investor or group of 
                        physician owners or investors that is related 
                        to acquiring any ownership or investment 
                        interest in the hospital.
                            ``(iv) Ownership or investment returns are 
                        distributed to each owner or investor in the 
                        hospital in an amount that is directly 
                        proportional to the ownership or investment 
                        interest of such owner or investor in the 
                        hospital.
                            ``(v) The investment interest of the owner 
                        or investor is directly proportional to the 
                        owner's or investor's capital contributions 
                        made at the time the ownership or investment 
                        interest is obtained.
                            ``(vi) Physician owners and investors do 
                        not receive, directly or indirectly, any 
                        guaranteed receipt of or right to purchase 
                        other business interests related to the 
                        hospital, including the purchase or lease of 
                        any property under the control of other owners 
                        or investors in the hospital or located near 
                        the premises of the hospital.
                            ``(vii) The hospital does not offer a 
                        physician owner or investor the opportunity to 
                        purchase or lease any property under the 
                        control of the hospital or any other owner or 
                        investor in the hospital on more favorable 
                        terms than the terms offered to a person that 
                        is not a physician owner or investor.
                            ``(viii) The hospital does not condition 
                        any physician ownership or investment interests 
                        either directly or indirectly on the physician 
                        owner or investor making or influencing 
                        referrals to the hospital or otherwise 
                        generating business for the hospital.
                    ``(E) Patient safety.--In the case of a hospital 
                that does not offer emergency services, the hospital 
                has the capacity to--
                            ``(i) provide assessment and initial 
                        treatment for medical emergencies; and
                            ``(ii) if the hospital lacks additional 
                        capabilities required to treat the emergency 
                        involved, refer and transfer the patient with 
                        the medical emergency to a hospital with the 
                        required capability.
                    ``(F) Limitation on application to certain 
                converted facilities.--The hospital was not converted 
                from an ambulatory surgical center to a hospital on or 
                after the date of enactment of this subsection.
            ``(2) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                            ``(i) Establishment.--The Secretary shall 
                        establish and implement a process under which a 
                        hospital may apply for an exception from the 
                        requirement under paragraph (1)(C).
                            ``(ii) Opportunity for community input.--
                        The process under clause (i) shall provide 
                        persons and entities in the community in which 
                        the hospital applying for an exception is 
                        located with the opportunity to provide input 
                        with respect to the application.
                            ``(iii) Timing for implementation.--The 
                        Secretary shall implement the process under 
                        clause (i) on the date that is one month after 
                        the promulgation of regulations described in 
                        clause (iv).
                            ``(iv) Regulations.--Not later than the 
                        first day of the month beginning 18 months 
                        after the date of the enactment of this 
                        subsection, the Secretary shall promulgate 
                        regulations to carry out the process under 
                        clause (i). The Secretary may issue such 
                        regulations as interim final regulations.
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit a hospital to apply for 
                an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (D), a hospital granted an 
                        exception under the process described in 
                        subparagraph (A) may increase the number of 
                        operating rooms, procedure rooms, or beds of 
                        the hospital above the baseline number of 
                        operating rooms, procedure rooms, or beds, 
                        respectively, of the hospital (or, if the 
                        hospital has been granted a previous exception 
                        under this paragraph, above the number of 
                        operating rooms, procedure rooms, or beds, 
                        respectively, of the hospital after the 
                        application of the most recent increase under 
                        such an exception).
                            ``(ii) 100 percent increase limitation.--
                        The Secretary shall not permit an increase in 
                        the number of operating rooms, procedure rooms, 
                        or beds of a hospital under clause (i) to the 
                        extent such increase would result in the number 
                        of operating rooms, procedure rooms, or beds of 
                        the hospital exceeding 200 percent of the 
                        baseline number of operating rooms, procedure 
                        rooms, or beds of the hospital.
                            ``(iii) Baseline number of operating rooms, 
                        procedure rooms, or beds.--In this paragraph, 
                        the term `baseline number of operating rooms, 
                        procedure rooms, or beds' means the number of 
                        operating rooms, procedure rooms, or beds of a 
                        hospital as of the date of enactment of this 
                        subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, or beds of a hospital 
                pursuant to this paragraph may only occur in facilities 
                on the main campus of the hospital.
                    ``(E) Conditions for approval of an increase in 
                facility capacity.--The Secretary may grant an 
                exception under the process described in subparagraph 
                (A) only to a hospital--
                            ``(i) that is located in a county in which 
                        the percentage increase in the population 
                        during the most recent 5-year period for which 
                        data are available is estimated to be at least 
                        150 percent of the percentage increase in the 
                        population growth of the State in which the 
                        hospital is located during that period, as 
                        estimated by Bureau of the Census and available 
                        to the Secretary;
                            ``(ii) whose annual percent of total 
                        inpatient admissions that represent inpatient 
                        admissions under the program under title XIX is 
                        estimated to be equal to or greater than the 
                        average percent with respect to such admissions 
                        for all hospitals located in the county in 
                        which the hospital is located;
                            ``(iii) that does not discriminate against 
                        beneficiaries of Federal health care programs 
                        and does not permit physicians practicing at 
                        the hospital to discriminate against such 
                        beneficiaries;
                            ``(iv) that is located in a State in which 
                        the average bed capacity in the State is 
                        estimated to be less than the national average 
                        bed capacity;
                            ``(v) that has an average bed occupancy 
                        rate that is estimated to be greater than the 
                        average bed occupancy rate in the State in 
                        which the hospital is located; and
                            ``(vi) that meets other conditions as 
                        determined by the Secretary.
                    ``(F) Procedure rooms.--In this subsection, the 
                term `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are furnished, but such term shall not 
                include emergency rooms or departments (except for 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are furnished).
                    ``(G) Publication of final decisions.--Not later 
                than 120 days after receiving a complete application 
                under this paragraph, the Secretary shall publish on 
                the public Internet website of the Centers for Medicare 
                & Medicaid Services the final decision with respect to 
                such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the exception process 
                under this paragraph, including the establishment of 
                such process, and any determination made under such 
                process.
            ``(3) Physician owner or investor defined.--For purposes of 
        this subsection and subsection (f)(2), the term `physician 
        owner or investor' means a physician (or an immediate family 
        member of such physician) with a direct or an indirect 
        ownership or investment interest in the hospital.
            ``(4) Patient safety requirement.--In the case of a 
        hospital to which the requirements of paragraph (1) apply, 
        insofar as the hospital admits a patient and does not have any 
        physician available on the premises 24 hours per day, 7 days 
        per week, before admitting the patient--
                    ``(A) the hospital shall disclose such fact to the 
                patient; and
                    ``(B) following such disclosure, the hospital shall 
                receive from the patient a signed acknowledgment that 
                the patient understands such fact.
            ``(5) Clarification.--Nothing in this subsection shall be 
        construed as preventing the Secretary from terminating a 
        hospital's provider agreement if the hospital is not in 
        compliance with regulations pursuant to section 1866.''.
    (b) Verifying Compliance.--The Secretary of Health and Human 
Services shall establish policies and procedures to verify compliance 
with the requirements described in subsections (i)(1) and (i)(4) of 
section 1877 of the Social Security Act, as added by subsection (a)(5). 
The Secretary may use unannounced site reviews of hospitals and audits 
to verify compliance with such requirements.
    (c) Implementation.--
            (1) Funding.--For purposes of carrying out the amendments 
        made by subsection (a) and the provisions of subsection (b), in 
        addition to funds otherwise available, out of any funds in the 
        Treasury not otherwise appropriated there are appropriated to 
        the Secretary of Health and Human Services for the Centers for 
        Medicare & Medicaid Services Program Management Account 
        $5,000,000 for each fiscal year beginning with fiscal year 
        2010. Amounts appropriated under this paragraph for a fiscal 
        year shall be available until expended.
            (2) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to the amendments made by subsection (a) 
        and the provisions of subsection (b).

SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC ADJUSTMENT FACTORS 
              UNDER MEDICARE.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into a contract with the Institute of Medicine of the National 
Academy of Science to conduct a comprehensive empirical study, and 
provide recommendations as appropriate, on the accuracy of the 
geographic adjustment factors established under sections 1848(e) and 
1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395w-4(e), 
11395ww(d)(3)).
    (b) Matters Included.--Such study shall include an evaluation and 
assessment of the following with respect to such adjustment factors:
            (1) Empirical validity of the adjustment factors.
            (2) Methodology used to determine the adjustment factors.
            (3) Measures used for the adjustment factors, taking into 
        account--
                    (A) timeliness of data and frequency of revisions 
                to such data;
                    (B) sources of data and the degree to which such 
                data are representative of costs; and
                    (C) operational costs of providers who participate 
                in Medicare.
    (c) Evaluation.--Such study shall, within the context of the United 
States health care marketplace, evaluate and consider the following:
            (1) The effect of the adjustment factors on the level and 
        distribution of the health care workforce and resources, 
        including--
                    (A) recruitment and retention that takes into 
                account workforce mobility between urban and rural 
                areas;
                    (B) ability of hospitals and other facilities to 
                maintain an adequate and skilled workforce; and
                    (C) patient access to providers and needed medical 
                technologies.
            (2) The effect of the adjustment factors on population 
        health and quality of care.
            (3) The effect of the adjustment factors on the ability of 
        providers to furnish efficient, high value care.
    (d) Report.--The contract under subsection (a) shall provide for 
the Institute of Medicine to submit, not later than one year after the 
date of the enactment of this Act, to the Secretary and the Congress a 
report containing results and recommendations of the study conducted 
under this section.
    (e) Funding.--There are authorized to be appropriated to carry out 
this section such sums as may be necessary.

SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO ADDRESS GEOGRAPHIC 
              INEQUITIES.

    (a) Revision of Medicare Payment Systems.--Taking into account the 
recommendations described in the report under section 1157, and 
notwithstanding the geographic adjustments that would otherwise apply 
under section 1848(e) and section 1886(d)(3)(E) of the Social Security 
Act ((42 U.S.C. 1395w-4, 1395ww(d)), the Secretary of Health and Human 
Services shall include in proposed rules applicable to the rulemaking 
cycle for payment systems for physicians' services and inpatient 
hospital services under sections 1848 and section 1886(d) of such Act, 
respectively, proposals (as the Secretary determines to be appropriate) 
to revise the geographic adjustment factors used in such systems. Such 
proposals' rules shall be contained in the next rulemaking cycle 
following the submission to the Secretary of the report described in 
section 1157.
    (b) Payment Adjustments.--
            (1) Funding for improvements.--The Secretary shall use 
        funds as provided under subsection (c) in making changes to the 
        geographic adjustment factors pursuant to subsection (a). In 
        making such changes to such geographic adjustment factors, the 
        Secretary shall ensure that the estimated increased 
        expenditures resulting from such changes does not exceed the 
        amounts provided under subsection (c).
            (2) Ensuring fairness.--In carrying out this subsection, 
        the Secretary shall not reduce the geographic adjustment below 
        the factor that applied for such payment system in the payment 
        year before such changes.
    (c) Funding.--Amounts in the Medicare Improvement Fund under 
section 1898, as amended by section 1146, shall be available to the 
Secretary to make changes to the geographic adjustments factors as 
described in subsections (a) and (b) with respect to services furnished 
before January 1, 2014.   No more than one-half of such amounts shall 
be available with respect to services furnished in any one payment 
year.

SEC. 1159. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC VARIATION IN 
              HEALTH CARE SPENDING AND PROMOTING HIGH-VALUE HEALTH 
              CARE.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into an agreement with the Institutes of Medicine of the National 
Academies (referred to in this section as the ``Institute'') to conduct 
a study on geographic variation in per capita health care spending 
among both the Medicare and privately insured populations. Such study 
shall include each of the following:
            (1) An evaluation of the extent and range of such variation 
        using various units of geographic measurement.
            (2) The extent to which geographic variation can be 
        attributed to differences in input prices, practice patterns, 
        access to medical services, supply of medical services, socio-
        economic factors, and provider organizational models.
            (3) The extent to which variations in spending are 
        correlated with patient access to care, distribution of health 
        care resources, and consensus-based measures of health care 
        quality.
            (4) The extent to which variation can be attributed to 
        physician and practitioner discretion in making treatment 
        decisions, and the degree to which discretionary treatment 
        decisions are made that could be characterized as different 
        from the best available medical evidence.
            (5) An assessment of the degree to which variation cannot 
        be explained by empirical evidence.
            (6) Other factors the Institute deems appropriate.
    (b) Recommendations.--Taking into account the findings under 
subsection (a), the Institute shall recommend strategies for addressing 
variation in per capita spending by promoting high-value care (as 
defined in subsection (e)). In making such recommendations, the 
Institute shall consider each of the following:
            (1) Measurement and reporting on quality and population 
        health.
            (2) Reducing fragmented and duplicative care.
            (3) Promoting the practice of evidence-based medicine.
            (4) Empowering patients to make value-based care decisions.
            (5) Leveraging the use of health information technology.
            (6) The role of financial and other incentives.
            (7) Other topics the Institute deems appropriate.
    (c) Specific Considerations.--In making the recommendations under 
subsection (b), the Institute shall specifically address whether 
payment systems under title XVIII of the Social Security Act for 
physicians and hospitals should be further modified to incentivize 
high-value care. In so doing, the Institute shall consider the adoption 
of a value index based on a composite of appropriate measures of 
quality and cost that would adjust provider payments on a regional or 
provider-level basis. If the Institute finds that application of such a 
value index would significantly incentivize providers to furnish high-
value care, it shall make specific recommendations on how such an index 
would be designed and implemented. In so doing, it should identify 
specific measures of quality and cost appropriate for use in such an 
index, and include a thorough analysis (including on a geographic 
basis) of how payments and spending under such title would be affected 
by such an index.
    (d) Report.-- Not later than three years after the date of the 
enactment of this Act, the Institute shall submit to Congress a report 
containing findings and recommendations of the study conducted under 
this section.
    (e) High-value Care Defined.--For purposes of this section, the 
term ``high-value care'' means the efficient delivery of high quality, 
evidence-based, patient-centered care.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as are necessary to carry out this section. Such 
sums are authorized to remain available until expended.

                 Subtitle D--Medicare Advantage Reforms

                   PART 1--PAYMENT AND ADMINISTRATION

SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-SERVICE COSTS.

    Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is 
amended--
            (1) in subsection (j)(1)(A)--
                    (A) by striking ``beginning with 2007'' and 
                inserting ``for 2007, 2008, 2009, and 2010''; and
                    (B) by inserting after ``(k)(1)'' the following: 
                ``, or, beginning with 2011, \1/12\ of the blended 
                benchmark amount determined under subsection (n)(1)''; 
                and
            (2) by adding at the end the following new subsection:
    ``(n) Determination of Blended Benchmark Amount.--
            ``(1) In general.--For purposes of subsection (j), subject 
        to paragraphs (3) and (4), the term `blended benchmark amount' 
        means for an area--
                    ``(A) for 2011 the sum of--
                            ``(i) \2/3\ of the applicable amount (as 
                        defined in subsection (k)) for the area and 
                        year; and
                            ``(ii) \1/3\ of the amount specified in 
                        paragraph (2) for the area and year;
                    ``(B) for 2012 the sum of--
                            ``(i) \1/3\ of the applicable amount for 
                        the area and year; and
                            ``(ii) \2/3\ of the amount specified in 
                        paragraph (2) for the area and year; and
                    ``(C) for a subsequent year the amount specified in 
                paragraph (2) for the area and year.
            ``(2) Specified amount.--The amount specified in this 
        paragraph for an area and year is the amount specified in 
        subsection (c)(1)(D)(i) for the area and year adjusted (in a 
        manner specified by the Secretary) to take into account the 
        phase-out in the indirect costs of medical education from 
        capitation rates described in subsection (k)(4).
            ``(3) Fee-for-service payment floor.--In no case shall the 
        blended benchmark amount for an area and year be less than the 
        amount specified in paragraph (2).
            ``(4) Exception for pace plans.--This subsection shall not 
        apply to payments to a PACE program under section 1894.''.

SEC. 1162. QUALITY BONUS PAYMENTS.

    (a) In General.--Section 1853 of the Social Security Act (42 U.S.C. 
1395w-23), as amended by section 1161, is amended--
            (1) in subsection (j), by inserting ``subject to subsection 
        (o),'' after ``For purposes of this part,''; and
            (2) by adding at the end the following new subsection:
    ``(o) Quality Based Payment Adjustment.--
            ``(1) In general.--In the case of a qualifying plan in a 
        qualifying county with respect to a year beginning with 2011, 
        the blended benchmark amount under subsection (n)(1) shall be 
        increased--
                    ``(A) for 2011, by 2.6 percent;
                    ``(B) for 2012, by 5.3 percent; and
                    ``(C) for a subsequent year, by 8.0 percent.
            ``(2) Qualifying plan and qualifying county defined.--For 
        purposes of this subsection:
                    ``(A) Qualifying plan.--The term `qualifying plan' 
                means, for a year and subject to paragraph (4), a plan 
                that, in a preceding year specified by the Secretary, 
                had a quality ranking (based on the quality ranking 
                system established by the Centers for Medicare & 
                Medicaid Services for Medicare Advantage plans) of 4 
                stars or higher.
                    ``(B) Qualifying county.--The term `qualifying 
                county' means, for a year, a county--
                            ``(i) that ranked within the lowest 
                        quartile of counties in the amount specified in 
                        subsection (n)(2) for the year specified by the 
                        Secretary under subparagraph (A); and
                            ``(ii) for which, as of June of such 
                        specified year, of the Medicare Advantage 
                        eligible individuals residing in the county--
                                    ``(I) at least 50 percent of such 
                                individuals were enrolled in Medicare 
                                Advantage plans; and
                                    ``(II) of the residents so enrolled 
                                at least 50 percent of such individuals 
                                were enrolled in such plans with a 
                                quality ranking (based on the quality 
                                ranking system established by the 
                                Centers for Medicare & Medicaid 
                                Services for Medicare Advantage plans) 
                                of 4 stars or higher.
            ``(3) Notification.--The Secretary, in the annual 
        announcement required under subsection (b)(1)(B) in 2010 and 
        each succeeding year, shall notify the Medicare Advantage 
        organization that is offering a qualifying plan in a qualifying 
        county of such identification for the year. The Secretary shall 
        provide for publication on the website for the Medicare program 
        of the information described in the previous sentence.
            ``(4) Authority to disqualify deficient plans.--The 
        Secretary may determine that a Medicare Advantage plan is not a 
        qualifying plan if the Secretary has identified deficiencies in 
        the plan's compliance with rules for Medicare Advantage plans 
        under this part.''.

SEC. 1163. EXTENSION OF SECRETARIAL CODING INTENSITY ADJUSTMENT 
              AUTHORITY.

    Section 1853(a)(1)(C)(ii) of the Social Security Act (42 U.S.C. 
1395w-23(a)(1)(C)(ii) is amended--
            (1) in the matter before subclause (I), by striking 
        ``through 2010'' and inserting ``and each subsequent year''; 
        and
            (2) in subclause (II)--
                    (A) by inserting ``periodically'' before ``conduct 
                an analysis'';
                    (B) by inserting ``on a timely basis'' after ``are 
                incorporated''; and
                    (C) by striking ``only for 2008, 2009, and 2010'' 
                and inserting ``for 2008 and subsequent years''.

SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) 2 Week Processing Period for Annual Enrollment Period (AEP).--
Paragraph (3)(B) of section 1851(e) of the Social Security Act (42 
U.S.C. 1395w-21(e)) is amended--
            (1) by striking ``and'' at the end of clause (iii);
            (2) in clause (iv)--
                    (A) by striking ``and succeeding years'' and 
                inserting ``, 2008, 2009, and 2010''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(v) with respect to 2011 and succeeding 
                        years, the period beginning on November 1 and 
                        ending on December 15 of the year before such 
                        year.''.
    (b) Elimination of 3-month Additional Open Enrollment Period 
(OEP).--Effective for plan years beginning with 2011, paragraph (2) of 
such section is amended by striking subparagraph (C).

SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)) is amended--
            (1) in clause (ii), by striking ``January 1, 2010'' and 
        inserting ``January 1, 2012''; and
            (2) in clause (iii), by striking ``the service area for the 
        year'' and inserting ``the portion of the plan's service area 
        for the year that is within the service area of a reasonable 
        cost reimbursement contract''.

SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYER GROUP PLANS.

    (a) In General.--The first sentence of paragraph (2) of section 
1857(i) of the Social Security Act (42 U.S.C. 1395w-27(i)) is amended 
by inserting before the period at the end the following: ``, but only 
if 90 percent of the Medicare Advantage eligible individuals enrolled 
under such plan reside in a county in which the MA organization offers 
an MA local plan''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply for plan years beginning on or after January 1, 2011, and shall 
not apply to plans which were in effect as of December 31, 2010.

SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

    (a) Report to Congress.--Not later than 1 year after the date of 
the enactment of this Act, the Secretary of Health and Human Services 
shall submit to Congress a report that evaluates the adequacy of the 
risk adjustment system under section 1853(a)(1)(C) of the Social 
Security Act (42 U.S.C. 1395-23(a)(1)(C)) in predicting costs for 
beneficiaries with chronic or co-morbid conditions, beneficiaries 
dually-eligible for Medicare and Medicaid, and non-Medicaid eligible 
low-income beneficiaries; and the need and feasibility of including 
further gradations of diseases or conditions and multiple years of 
beneficiary data.
    (b) Improvements to Risk Adjustment.--Not later than January 1, 
2012, the Secretary shall implement necessary improvements to the risk 
adjustment system under section 1853(a)(1)(C) of the Social Security 
Act (42 U.S.C. 1395-23(a)(1)(C)), taking into account the evaluation 
under subsection (a).

SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND.

    (a) In General.--Section 1858 of the Social Security Act (42 U.S.C. 
1395w-27a) is amended by striking subsection (e).
    (b) Transition.--Any amount contained in the MA Regional Plan 
Stabilization Fund as of the date of the enactment of this Act shall be 
transferred to the Federal Supplementary Medical Insurance Trust Fund.

             PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD

SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES.

    (a) In General.--Section 1852(a)(1) of the Social Security Act (42 
U.S.C. 1395w-22(a)(1)) is amended--
            (1) in subparagraph (A), by inserting before the period at 
        the end the following: ``with cost-sharing that is no greater 
        (and may be less) than the cost-sharing that would otherwise be 
        imposed under such program option'';
            (2) in subparagraph (B)(i), by striking ``or an actuarially 
        equivalent level of cost-sharing as determined in this part''; 
        and
            (3) by amending clause (ii) of subparagraph (B) to read as 
        follows:
                            ``(ii) Permitting use of flat copayment or 
                        per diem rate.--Nothing in clause (i) shall be 
                        construed as prohibiting a Medicare Advantage 
                        plan from using a flat copayment or per diem 
                        rate, in lieu of the cost-sharing that would be 
                        imposed under part A or B, so long as the 
                        amount of the cost-sharing imposed does not 
                        exceed the amount of the cost-sharing that 
                        would be imposed under the respective part if 
                        the individual were not enrolled in a plan 
                        under this part.''.
    (b) Limitation for Dual Eligibles and Qualified Medicare 
Beneficiaries.--Section 1852(a)(7) of such Act is amended to read as 
follows:
            ``(7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of a individual 
        who is a full-benefit dual eligible individual (as defined in 
        section 1935(c)(6)) or a qualified medicare beneficiary (as 
        defined in section 1905(p)(1)) who is enrolled in a Medicare 
        Advantage plan, the plan may not impose cost-sharing that 
        exceeds the amount of cost-sharing that would be permitted with 
        respect to the individual under this title and title XIX if the 
        individual were not enrolled with such plan.''.
    (c) Effective Dates.--
            (1) The amendments made by subsection (a) shall apply to 
        plan years beginning on or after January 1, 2011.
            (2) The amendments made by subsection (b) shall apply to 
        plan years beginning on or after January 1, 2011.

SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH 
              ENROLLMENT SUSPENSION.

    Section 1851(e)(4) of the Social Security Act (42 U.S.C. 
1395w(e)(4)) is amended--
            (1) in subparagraph (C), by striking at the end ``or'';
            (2) in subparagraph (D)--
                    (A) by inserting ``, taking into account the health 
                or well-being of the individual'' before the period; 
                and
                    (B) by redesignating such subparagraph as 
                subparagraph (E); and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) the individual is enrolled in an MA plan and 
                enrollment in the plan is suspended under paragraph 
                (2)(B) or (3)(C) of section 1857(g) because of a 
                failure of the plan to meet applicable requirements; 
                or''.

SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE 
              COSTS.

    (a) Disclosure of Medical Loss Ratios and Other Expense Data.--
Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as 
previously amended by this subtitle, is amended by adding at the end 
the following new subsection:
    ``(p) Publication of Medical Loss Ratios and Other Cost-related 
Information.--
            ``(1) In general.--The Secretary shall publish, not later 
        than November 1 of each year (beginning with 2011), for each MA 
        plan contract, the medical loss ratio of the plan in the 
        previous year.
            ``(2) Submission of data.--
                    ``(A) In general.--Each MA organization shall 
                submit to the Secretary, in a form and manner specified 
                by the Secretary, data necessary for the Secretary to 
                publish the medical loss ratio on a timely basis.
                    ``(B) Data for 2010 and 2011.--The data submitted 
                under subparagraph (A) for 2010 and for 2011 shall be 
                consistent in content with the data reported as part of 
                the MA plan bid in June 2009 for 2010.
                    ``(C) Use of standardized elements and 
                definitions.--The data to be submitted under 
                subparagraph (A) relating to medical loss ratio for a 
                year, beginning with 2012, shall be submitted based on 
                the standardized elements and definitions developed 
                under paragraph (3).
            ``(3) Development of data reporting standards.--
                    ``(A) In general.--The Secretary shall develop and 
                implement standardized data elements and definitions 
                for reporting under this subsection, for contract years 
                beginning with 2012, of data necessary for the 
                calculation of the medical loss ratio for MA plans. Not 
                later than December 31, 2010, the Secretary shall 
                publish a report describing the elements and 
                definitions so developed.
                    ``(B) Consultation.--The Secretary shall consult 
                with the Health Choices Commissioner, representatives 
                of MA organizations, experts on health plan accounting 
                systems, and representatives of the National 
                Association of Insurance Commissioners, in the 
                development of such data elements and definitions.
            ``(4) Medical loss ratio to be defined.--For purposes of 
        this part, the term `medical loss ratio' has the meaning given 
        such term by the Secretary, taking into account the meaning 
        given such term by the Health Choices Commissioner under 
        section 116 of the America's Affordable Health Choices Act of 
        2009.''.
    (b) Minimum Medical Loss Ratio.--Section 1857(e) of the Social 
Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end 
the following new paragraph:
            ``(4) Requirement for minimum medical loss ratio.--If the 
        Secretary determines for a contract year (beginning with 2014) 
        that an MA plan has failed to have a medical loss ratio (as 
        defined in section 1851(p)(4)) of at least .85--
                    ``(A) the Secretary shall require the Medicare 
                Advantage organization offering the plan to give 
                enrollees a rebate (in the second succeeding contract 
                year) of premiums under this part (or part B or part D, 
                if applicable) by such amount as would provide for a 
                benefits ratio of at least .85;
                    ``(B) for 3 consecutive contract years, the 
                Secretary shall not permit the enrollment of new 
                enrollees under the plan for coverage during the second 
                succeeding contract year; and
                    ``(C) the Secretary shall terminate the plan 
                contract if the plan fails to have such a medical loss 
                ratio for 5 consecutive contract years.''.

SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

    (a) For Part C Payments Risk Adjustment.--Section 1857(d)(1) of the 
Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by inserting 
after ``section 1858(c))'' the following: ``, and data submitted with 
respect to risk adjustment under section 1853(a)(3)''.
    (b) Enforcement of Audits and Deficiencies.--
            (1) In general.--Section 1857(e) of such Act, as amended by 
        section 1173, is amended by adding at the end the following new 
        paragraph:
            ``(5) Enforcement of audits and deficiencies.--
                    ``(A) Information in contract.--The Secretary shall 
                require that each contract with an MA organization 
                under this section shall include terms that inform the 
                organization of the provisions in subsection (d).
                    ``(B) Enforcement authority.--The Secretary is 
                authorized, in connection with conducting audits and 
                other activities under subsection (d), to take such 
                actions, including pursuit of financial recoveries, 
                necessary to address deficiencies identified in such 
                audits or other activities.''.
            (2) Application under part d.--For provision applying the 
        amendment made by paragraph (1) to prescription drug plans 
        under part D, see section 1860D-12(b)(3)(D) of the Social 
        Security Act.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to 
audits and activities conducted for contract years beginning on or 
after January 1, 2011.

SEC. 1175. AUTHORITY TO DENY PLAN BIDS.

    (a) In General.--Section 1854(a)(5) of the Social Security Act (42 
U.S.C. 1395w-24(a)(5)) is amended by adding at the end the following 
new subparagraph:
                    ``(C) Rejection of bids.--Nothing in this section 
                shall be construed as requiring the Secretary to accept 
                any or every bid by an MA organization under this 
                subsection.''.
    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42 
U.S.C. 1395w-111(d)) is amended by adding at the end the following new 
paragraph:
            ``(3) Rejection of bids.--Paragraph (5)(C) of section 
        1854(a) shall apply with respect to bids under this section in 
        the same manner as it applies to bids by an MA organization 
        under such section.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bids for contract years beginning on or after January 1, 2011.

                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.

    Section 1859(f)(4) of the Social Security Act (42 U.S.C. 1395w-
28(f)(4)) is amended by adding at the end the following new 
subparagraph:
                    ``(C) The plan does not enroll an individual on or 
                after January 1, 2011, other than during an annual, 
                coordinated open enrollment period or when at the time 
                of the diagnosis of the disease or condition that 
                qualifies the individual as an individual described in 
                subsection (b)(6)(B)(iii).''.

SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT 
              ENROLLMENT.

    (a) In General.--Section 1859(f)(1) of the Social Security Act (42 
U.S.C. 1395w-28(f)(1)) is amended by striking ``January 1, 2011'' and 
inserting ``January 1, 2013 (or January 1, 2016, in the case of a plan 
described in section 1177(b)(1) of the America's Affordable Health 
Choices Act of 2009)''.
    (b) Grandfathering of Certain Plans.--
            (1) Plans described.--For purposes of section 1859(f)(1) of 
        the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan 
        described in this paragraph is a plan that had a contract with 
        a State that had a State program to operate an integrated 
        Medicaid-Medicare program that had been approved by the Centers 
        for Medicare & Medicaid Services as of January 1, 2004.
            (2) Analysis; report.--The Secretary of Health and Human 
        Services shall provide, through a contract with an independent 
        health services evaluation organization, for an analysis of the 
        plans described in paragraph (1) with regard to the impact of 
        such plans on cost, quality of care, patient satisfaction, and 
        other subjects as specified by the Secretary. Not later than 
        December 31, 2011, the Secretary shall submit to Congress a 
        report on such analysis and shall include in such report such 
        recommendations with regard to the treatment of such plans as 
        the Secretary deems appropriate.

              Subtitle E--Improvements to Medicare Part D

SEC. 1181. ELIMINATION OF COVERAGE GAP.

    (a) In General.--Section 1860D-2(b) of such Act (42 U.S.C. 1395w-
102(b)) is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
        inserting ``paragraphs (4) and (7)'';
            (2) in paragraph (4)(B)(i), by inserting ``subject to 
        paragraph (7)'' after ``purposes of this part''; and
            (3) by adding at the end the following new paragraph:
            ``(7) Phased-in elimination of coverage gap.--
                    ``(A) In general.--For each year beginning with 
                2011, the Secretary shall consistent with this 
                paragraph progressively increase the initial coverage 
                limit (described in subsection (b)(3)) and decrease the 
                annual out-of-pocket threshold from the amounts 
                otherwise computed until there is a continuation of 
                coverage from the initial coverage limit for 
                expenditures incurred through the total amount of 
                expenditures at which benefits are available under 
                paragraph (4).
                    ``(B) Increase in initial coverage limit.--For a 
                year beginning with 2011, the initial coverage limit 
                otherwise computed without regard to this paragraph 
                shall be increased by \1/2\ of the cumulative phase-in 
                percentage (as defined in subparagraph (D)(ii) for the 
                year) times the out-of-pocket gap amount (as defined in 
                subparagraph (E)) for the year.
                    ``(C) Decrease in annual out-of-pocket threshold.--
                For a year beginning with 2011, the annual out-of-
                pocket threshold otherwise computed without regard to 
                this paragraph shall be decreased by \1/2\ of the 
                cumulative phase-in percentage of the out-of-pocket gap 
                amount for the year multiplied by 1.75.
                    ``(D) Phase-in.--For purposes of this paragraph:
                            ``(i) Annual phase-in percentage.--The term 
                        `annual phase-in percentage' means--
                                    ``(I) for 2011, 13 percent;
                                    ``(II) for 2012, 2013, 2014, and 
                                2015, 5 percent;
                                    ``(III) for 2016 through 2018, 7.5 
                                percent; and
                                    ``(IV) for 2019 and each subsequent 
                                year, 10 percent.
                            ``(ii) Cumulative phase-in percentage.--The 
                        term `cumulative phase-in percentage' means for 
                        a year the sum of the annual phase-in 
                        percentage for the year and the annual phase-in 
                        percentages for each previous year beginning 
                        with 2011, but in no case more than 100 
                        percent.
                    ``(E) Out-of-pocket gap amount.--For purposes of 
                this paragraph, the term `out-of-pocket gap amount' 
                means for a year the amount by which--
                            ``(i) the annual out-of-pocket threshold 
                        specified in paragraph (4)(B) for the year (as 
                        determined as if this paragraph did not apply), 
                        exceeds
                            ``(ii) the sum of--
                                    ``(I) the annual deductible under 
                                paragraph (1) for the year; and
                                    ``(II) \1/4\ of the amount by which 
                                the initial coverage limit under 
                                paragraph (3) for the year (as 
                                determined as if this paragraph did not 
                                apply) exceeds such annual 
                                deductible.''.
    (b) Requiring Drug Manufacturers to Provide Drug Rebates for Full-
benefit Dual Eligibles.--
            (1) In general.--Section 1860D-2 of the Social Security Act 
        (42 U.S.C. 1396r-8) is amended--
                    (A) in subsection (e)(1), in the matter before 
                subparagraph (A), by inserting ``and subsection (f)'' 
                after ``this subsection''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Prescription Drug Rebate Agreement for Full-benefit Dual 
Eligible Individuals.--
            ``(1) In general.--In this part, the term `covered part D 
        drug' does not include any drug or biologic that is 
        manufactured by a manufacturer that has not entered into and 
        have in effect a rebate agreement described in paragraph (2).
            ``(2) Rebate agreement.--A rebate agreement under this 
        subsection shall require the manufacturer to provide to the 
        Secretary a rebate for each rebate period (as defined in 
        paragraph (6)(B)) ending after December 31, 2010, in the amount 
        specified in paragraph (3) for any covered part D drug of the 
        manufacturer dispensed after December 31, 2010, to any full-
        benefit dual eligible individual (as defined in paragraph 
        (6)(A)) for which payment was made by a PDP sponsor under part 
        D or a MA organization under part C for such period. Such 
        rebate shall be paid by the manufacturer to the Secretary not 
        later than 30 days after the date of receipt of the information 
        described in section 1860D-12(b)(7), including as such section 
        is applied under section 1857(f)(3).
            ``(3) Rebate for full-benefit dual eligible medicare drug 
        plan enrollees.--
                    ``(A) In general.--The amount of the rebate 
                specified under this paragraph for a manufacturer for a 
                rebate period, with respect to each dosage form and 
                strength of any covered part D drug provided by such 
                manufacturer and dispensed to a full-benefit dual 
                eligible individual, shall be equal to the product of--
                            ``(i) the total number of units of such 
                        dosage form and strength of the drug so 
                        provided and dispensed for which payment was 
                        made by a PDP sponsor under part D or a MA 
                        organization under part C for the rebate period 
                        (as reported under section 1860D-12(b)(7), 
                        including as such section is applied under 
                        section 1857(f)(3)); and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the Medicaid rebate amount 
                                (as defined in subparagraph (B)) for 
                                such form, strength, and period, 
                                exceeds
                                    ``(II) the average Medicare drug 
                                program full-benefit dual eligible 
                                rebate amount (as defined in 
                                subparagraph (C)) for such form, 
                                strength, and period.
                    ``(B) Medicaid rebate amount.--For purposes of this 
                paragraph, the term `Medicaid rebate amount' means, 
                with respect to each dosage form and strength of a 
                covered part D drug provided by the manufacturer for a 
                rebate period--
                            ``(i) in the case of a single source drug 
                        or an innovator multiple source drug, the 
                        amount specified in paragraph (1)(A)(ii) of 
                        section 1927(b) plus the amount, if any, 
                        specified in paragraph (2)(A)(ii) of such 
                        section, for such form, strength, and period; 
                        or
                            ``(ii) in the case of any other covered 
                        outpatient drug, the amount specified in 
                        paragraph (3)(A)(i) of such section for such 
                        form, strength, and period.
                    ``(C) Average medicare drug program full-benefit 
                dual eligible rebate amount.--For purposes of this 
                subsection, the term `average Medicare drug program 
                full-benefit dual eligible rebate amount' means, with 
                respect to each dosage form and strength of a covered 
                part D drug provided by a manufacturer for a rebate 
                period, the sum, for all PDP sponsors under part D and 
                MA organizations administering a MA-PD plan under part 
                C, of--
                            ``(i) the product, for each such sponsor or 
                        organization, of--
                                    ``(I) the sum of all rebates, 
                                discounts, or other price concessions 
                                (not taking into account any rebate 
                                provided under paragraph (2) for such 
                                dosage form and strength of the drug 
                                dispensed, calculated on a per-unit 
                                basis, but only to the extent that any 
                                such rebate, discount, or other price 
                                concession applies equally to drugs 
                                dispensed to full-benefit dual eligible 
                                Medicare drug plan enrollees and drugs 
                                dispensed to PDP and MA-PD enrollees 
                                who are not full-benefit dual eligible 
                                individuals; and
                                    ``(II) the number of the units of 
                                such dosage and strength of the drug 
                                dispensed during the rebate period to 
                                full-benefit dual eligible individuals 
                                enrolled in the prescription drug plans 
                                administered by the PDP sponsor or the 
                                MA-PD plans administered by the MA-PD 
                                organization; divided by
                            ``(ii) the total number of units of such 
                        dosage and strength of the drug dispensed 
                        during the rebate period to full-benefit dual 
                        eligible individuals enrolled in all 
                        prescription drug plans administered by PDP 
                        sponsors and all MA-PD plans administered by 
                        MA-PD organizations.
            ``(4) Length of agreement.--The provisions of paragraph (4) 
        of section 1927(b) (other than clauses (iv) and (v) of 
        subparagraph (B)) shall apply to rebate agreements under this 
        subsection in the same manner as such paragraph applies to a 
        rebate agreement under such section.
            ``(5) Other terms and conditions.--The Secretary shall 
        establish other terms and conditions of the rebate agreement 
        under this subsection, including terms and conditions related 
        to compliance, that are consistent with this subsection.
            ``(6) Definitions.--In this subsection and section 1860D-
        12(b)(7):
                    ``(A) Full-benefit dual eligible individual.--The 
                term `full-benefit dual eligible individual' has the 
                meaning given such term in section 1935(c)(6).
                    ``(B) Rebate period.--The term `rebate period' has 
                the meaning given such term in section 1927(k)(8).''.
            (2) Reporting requirement for the determination and payment 
        of rebates by manufactures related to rebate for full-benefit 
        dual eligible medicare drug plan enrollees.--
                    (A) Requirements for pdp sponsors.--Section 1860D-
                12(b) of the Social Security Act (42 U.S.C. 1395w-
                112(b)) is amended by adding at the end the following 
                new paragraph:
            ``(7) Reporting requirement for the determination and 
        payment of rebates by manufacturers related to rebate for full-
        benefit dual eligible medicare drug plan enrollees.--
                    ``(A) In general.--For purposes of the rebate under 
                section 1860D-2(f) for contract years beginning on or 
                after January 1, 2011, each contract entered into with 
                a PDP sponsor under this part with respect to a 
                prescription drug plan shall require that the sponsor 
                comply with subparagraphs (B) and (C).
                    ``(B) Report form and contents.--Not later than 60 
                days after the end of each rebate period (as defined in 
                section 1860D-2(f)(6)(B)) within such a contract year 
                to which such section applies, a PDP sponsor of a 
                prescription drug plan under this part shall report to 
                each manufacturer--
                            ``(i) information (by National Drug Code 
                        number) on the total number of units of each 
                        dosage, form, and strength of each drug of such 
                        manufacturer dispensed to full-benefit dual 
                        eligible Medicare drug plan enrollees under any 
                        prescription drug plan operated by the PDP 
                        sponsor during the rebate period;
                            ``(ii) information on the price discounts, 
                        price concessions, and rebates for such drugs 
                        for such form, strength, and period;
                            ``(iii) information on the extent to which 
                        such price discounts, price concessions, and 
                        rebates apply equally to full-benefit dual 
                        eligible Medicare drug plan enrollees and PDP 
                        enrollees who are not full-benefit dual 
                        eligible Medicare drug plan enrollees; and
                            ``(iv) any additional information that the 
                        Secretary determines is necessary to enable the 
                        Secretary to calculate the average Medicare 
                        drug program full-benefit dual eligible rebate 
                        amount (as defined in paragraph (3)(C) of such 
                        section), and to determine the amount of the 
                        rebate required under this section, for such 
                        form, strength, and period.
                Such report shall be in a form consistent with a 
                standard reporting format established by the Secretary.
                    ``(C) Submission to secretary.--Each PDP sponsor 
                shall promptly transmit a copy of the information 
                reported under subparagraph (B) to the Secretary for 
                the purpose of audit oversight and evaluation.
                    ``(D) Confidentiality of information.--The 
                provisions of subparagraph (D) of section 1927(b)(3), 
                relating to confidentiality of information, shall apply 
                to information reported by PDP sponsors under this 
                paragraph in the same manner that such provisions apply 
                to information disclosed by manufacturers or 
                wholesalers under such section, except--
                            ``(i) that any reference to `this section' 
                        in clause (i) of such subparagraph shall be 
                        treated as being a reference to this section;
                            ``(ii) the reference to the Director of the 
                        Congressional Budget Office in clause (iii) of 
                        such subparagraph shall be treated as including 
                        a reference to the Medicare Payment Advisory 
                        Commission; and
                            ``(iii) clause (iv) of such subparagraph 
                        shall not apply.
                    ``(E) Oversight.--Information reported under this 
                paragraph may be used by the Inspector General of the 
                Department of Health and Human Services for the 
                statutorily authorized purposes of audit, 
                investigation, and evaluations.
                    ``(F) Penalties for failure to provide timely 
                information and provision of false information.--In the 
                case of a PDP sponsor--
                            ``(i) that fails to provide information 
                        required under subparagraph (B) on a timely 
                        basis, the sponsor is subject to a civil money 
                        penalty in the amount of $10,000 for each day 
                        in which such information has not been 
                        provided; or
                            ``(ii) that knowingly (as defined in 
                        section 1128A(i)) provides false information 
                        under such subparagraph, the sponsor is subject 
                        to a civil money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information.
                Such civil money penalties are in addition to other 
                penalties as may be prescribed by law. The provisions 
                of section 1128A (other than subsections (a) and (b)) 
                shall apply to a civil money penalty under this 
                subparagraph in the same manner as such provisions 
                apply to a penalty or proceeding under section 
                1128A(a).''.
                    (B) Application to ma organizations.--Section 
                1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-
                27(f)(3)) is amended by adding at the end the 
                following:
                    ``(D) Reporting requirement related to rebate for 
                full-benefit dual eligible medicare drug plan 
                enrollees.--Section 1860D-12(b)(7).''.
            (3) Deposit of rebates into medicare prescription drug 
        account.--Section 1860D-16(c) of such Act (42 U.S.C. 1395w-
        116(c)) is amended by adding at the end the following new 
        paragraph:
            ``(6) Rebate for full-benefit dual eligible medicare drug 
        plan enrollees.--Amounts paid under a rebate agreement under 
        section 1860D-2(f) shall be deposited into the Account and 
        shall be used to pay for all or part of the gradual elimination 
        of the coverage gap under section 1860D-2(b)(7).''.

SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN ORIGINAL COVERAGE GAP.

    Section 1860D-2 of the Social Security Act (42 U.S.C. 1395w-102), 
as amended by section 1181, is amended--
            (1) in subsection (b)(4)(C)(ii), by inserting ``subject to 
        subsection (g)(2)(C),'' after ``(ii)'';
            (2) in subsection (e)(1), in the matter before subparagraph 
        (A), by striking ``subsection (f)'' and inserting ``subsections 
        (f) and (g)'' after ``this subsection''; and
            (3) by adding at the end the following new subsection:
    ``(g) Requirement for Manufacturer Discount Agreement for Certain 
Qualifying Drugs.--
            ``(1) In general.--In this part, the term `covered part D 
        drug' does not include any drug or biologic that is 
        manufactured by a manufacturer that has not entered into and 
        have in effect for all qualifying drugs (as defined in 
        paragraph (5)(A)) a discount agreement described in paragraph 
        (2).
            ``(2) Discount agreement.--
                    ``(A) Periodic discounts.--A discount agreement 
                under this paragraph shall require the manufacturer 
                involved to provide, to each PDP sponsor with respect 
                to a prescription drug plan or each MA organization 
                with respect to each MA-PD plan, a discount in an 
                amount specified in paragraph (3) for qualifying drugs 
                (as defined in paragraph (5)(A)) of the manufacturer 
                dispensed to a qualifying enrollee after December 31, 
                2010, insofar as the individual is in the original gap 
                in coverage (as defined in paragraph (5)(E)).
                    ``(B) Discount agreement.--Insofar as not 
                inconsistent with this subsection, the Secretary shall 
                establish terms and conditions of such agreement, 
                including terms and conditions relating to compliance, 
                similar to the terms and conditions for rebate 
                agreements under paragraphs (2), (3), and (4) of 
                section 1927(b), except that--
                            ``(i) discounts shall be applied under this 
                        subsection to prescription drug plans and MA-PD 
                        plans instead of State plans under title XIX;
                            ``(ii) PDP sponsors and MA organizations 
                        shall be responsible, instead of States, for 
                        provision of necessary utilization information 
                        to drug manufacturers; and
                            ``(iii) sponsors and MA organizations shall 
                        be responsible for reporting information on 
                        drug-component negotiated price, instead of 
                        other manufacturer prices.
                    ``(C) Counting discount toward true out-of-pocket 
                costs.--Under the discount agreement, in applying 
                subsection (b)(4), with regard to subparagraph (C)(i) 
                of such subsection, if a qualified enrollee purchases 
                the qualified drug insofar as the enrollee is in an 
                actual gap of coverage (as defined in paragraph 
                (5)(D)), the amount of the discount under the agreement 
                shall be treated and counted as costs incurred by the 
                plan enrollee.
            ``(3) Discount amount.--The amount of the discount 
        specified in this paragraph for a discount period for a plan is 
        equal to 50 percent of the amount of the drug-component 
        negotiated price (as defined in paragraph (5)(C)) for 
        qualifying drugs for the period involved.
            ``(4) Additional terms.--In the case of a discount provided 
        under this subsection with respect to a prescription drug plan 
        offered by a PDP sponsor or an MA-PD plan offered by an MA 
        organization, if a qualified enrollee purchases the qualified 
        drug--
                    ``(A) insofar as the enrollee is in an actual gap 
                of coverage (as defined in paragraph (5)(D)), the 
                sponsor or plan shall provide the discount to the 
                enrollee at the time the enrollee pays for the drug; 
                and
                    ``(B) insofar as the enrollee is in the portion of 
                the original gap in coverage (as defined in paragraph 
                (5)(E)) that is not in the actual gap in coverage, the 
                discount shall not be applied against the negotiated 
                price (as defined in subsection (d)(1)(B)) for the 
                purpose of calculating the beneficiary payment.
            ``(5) Definitions.--In this subsection:
                    ``(A) Qualifying drug.--The term `qualifying drug' 
                means, with respect to a prescription drug plan or MA-
                PD plan, a drug or biological product that--
                            ``(i)(I) is a drug produced or distributed 
                        under an original new drug application approved 
                        by the Food and Drug Administration, including 
                        a drug product marketed by any cross-licensed 
                        producers or distributors operating under the 
                        new drug application;
                            ``(II) is a drug that was originally 
                        marketed under an original new drug application 
                        approved by the Food and Drug Administration; 
                        or
                            ``(III) is a biological product as approved 
                        under Section 351(a) of the Public Health 
                        Services Act;
                            ``(ii) is covered under the formulary of 
                        the plan; and
                            ``(iii) is dispensed to an individual who 
                        is in the original gap in coverage.
                    ``(B) Qualifying enrollee.--The term `qualifying 
                enrollee' means an individual enrolled in a 
                prescription drug plan or MA-PD plan other than such an 
                individual who is a subsidy-eligible individual (as 
                defined in section 1860D-14(a)(3)).
                    ``(C) Drug-component negotiated price.--The term 
                `drug-component negotiated price' means, with respect 
                to a qualifying drug, the negotiated price (as defined 
                in subsection (d)(1)(B)), as determined without regard 
                to any dispensing fee, of the drug under the 
                prescription drug plan or MA-PD plan involved.
                    ``(D) Actual gap in coverage.--The term `actual gap 
                in coverage' means the gap in prescription drug 
                coverage that occurs between the initial coverage limit 
                (as modified under subparagraph (B) of subsection 
                (b)(7)) and the annual out-of-pocket threshold (as 
                modified under subparagraph (C) of such subsection).
                    ``(E) Original gap in coverage.--The term `original 
                in gap coverage' means the gap in prescription drug 
                coverage that would occur between the initial coverage 
                limit (described in subsection (b)(3)) and the out-of-
                pocket threshold (as defined in subsection (b)(4))(B) 
                if subsection (b)(7) did not apply.''.

SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMISSION OF CLAIMS BY 
              PHARMACIES LOCATED IN OR CONTRACTING WITH LONG-TERM CARE 
              FACILITIES.

    (a) Part D Submission.--Section 1860D-12(b) of the Social Security 
Act (42 U.S.C. 1395w-112(b)), as amended by section 172(a)(1) of Public 
Law 110-275, is amended by striking paragraph (5) and redesignating 
paragraph (6) and paragraph (7), as added by section 1181(b)(2), as 
paragraph (5) and paragraph (6), respectively.
    (b) Submission to MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act (42 U.S.C. 1395w-27(f)(3)), as added by section 171(b) of 
Public Law 110-275 and amended by section 172(a)(2) of such Public Law 
and section 1181 of this division, is amended by striking subparagraph 
(B) and redesignating subparagraphs (C) and (D) as subparagraphs (B) 
and (C) respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply for contract years beginning with 2010.

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.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``such costs shall be treated as 
                incurred only if'' and inserting ``subject to clause 
                (iii), such costs shall be treated as incurred only 
                if'';
                    (B) by striking ``, under section 1860D-14, or 
                under a State Pharmaceutical Assistance Program''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) such costs shall be treated as 
                        incurred and shall not be considered to be 
                        reimbursed under clause (ii) if such costs are 
                        borne or paid--
                                    ``(I) under section 1860D-14;
                                    ``(II) under a State Pharmaceutical 
                                Assistance Program;
                                    ``(III) by the Indian Health 
                                Service, an Indian tribe or tribal 
                                organization, or an urban Indian 
                                organization (as defined in section 4 
                                of the Indian Health Care Improvement 
                                Act); or
                                    ``(IV) under an AIDS Drug 
                                Assistance Program under part B of 
                                title XXVI of the Public Health Service 
                                Act.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to costs incurred on or after January 1, 2011.

SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLLMENT FOR FORMULARY 
              CHANGES THAT ADVERSELY IMPACT AN ENROLLEE.

    (a) In General.--Section 1860D-1(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-101(b)(3)) is amended by adding at the end the 
following new subparagraph:
                    ``(F) Change in formulary resulting in increase in 
                cost-sharing.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of an individual 
                        enrolled in a prescription drug plan (or MA-PD 
                        plan) who has been prescribed and is using a 
                        covered part D drug while so enrolled, if the 
                        formulary of the plan is materially changed 
                        (other than at the end of a contract year) so 
                        to reduce the coverage (or increase the cost-
                        sharing) of the drug under the plan.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply in the case that a drug is removed from 
                        the formulary of a plan because of a recall or 
                        withdrawal of the drug issued by the Food and 
                        Drug Administration, because the drug is 
                        replaced with a generic drug that is a 
                        therapeutic equivalent, or because of 
                        utilization management applied to--
                                    ``(I) a drug whose labeling 
                                includes a boxed warning required by 
                                the Food and Drug Administration under 
                                section 210.57(c)(1) of title 21, Code 
                                of Federal Regulations (or a successor 
                                regulation); or
                                    ``(II) a drug required under 
                                subsection (c)(2) of section 505-1 of 
                                the Federal Food, Drug, and Cosmetic 
                                Act to have a Risk Evaluation and 
                                Management Strategy that includes 
                                elements under subsection (f) of such 
                                section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to contract years beginning on or after January 1, 2011.

             Subtitle F--Medicare Rural Access Protections

SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. .

     (a) Additional Telehealth Site.--
            (1) In general.--Paragraph (4)(C)(ii) of section 1834(m) of 
        the Social Security Act (42 U.S.C. 1395m(m)) is amended by 
        adding at the end the following new subclause:
                                    ``(IX) A renal dialysis facility.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2011.
    (b) Telehealth Advisory Committee.--
            (1) Establishment.--Section 1868 of the Social Security Act 
        (42 U.S.C. 1395ee) is amended--
                    (A) in the heading, by adding at the end the 
                following: ``telehealth advisory committee''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Telehealth Advisory Committee.--
            ``(1) In general.--The Secretary shall appoint a Telehealth 
        Advisory Committee (in this subsection referred to as the 
        `Advisory Committee') to make recommendations to the Secretary 
        on policies of the Centers for Medicare & Medicaid Services 
        regarding telehealth services as established under section 
        1834(m), including the appropriate addition or deletion of 
        services (and HCPCS codes) to those specified in paragraphs 
        (4)(F)(i) and (4)(F)(ii) of such section and for authorized 
        payment under paragraph (1) of such section.
            ``(2) Membership; terms.--
                    ``(A) Membership.--
                            ``(i) In general.--The Advisory Committee 
                        shall be composed of 9 members, to be appointed 
                        by the Secretary, of whom--
                                    ``(I) 5 shall be practicing 
                                physicians;
                                    ``(II) 2 shall be practicing non-
                                physician health care practitioners; 
                                and
                                    ``(III) 2 shall be administrators 
                                of telehealth programs.
                            ``(ii) Requirements for appointing 
                        members.--In appointing members of the Advisory 
                        Committee, the Secretary shall--
                                    ``(I) ensure that each member has 
                                prior experience with the practice of 
                                telemedicine or telehealth;
                                    ``(II) give preference to 
                                individuals who are currently providing 
                                telemedicine or telehealth services or 
                                who are involved in telemedicine or 
                                telehealth programs;
                                    ``(III) ensure that the membership 
                                of the Advisory Committee represents a 
                                balance of specialties and geographic 
                                regions; and
                                    ``(IV) take into account the 
                                recommendations of stakeholders.
                    ``(B) Terms.--The members of the Advisory Committee 
                shall serve for such term as the Secretary may specify.
                    ``(C) Conflicts of interest.--An advisory committee 
                member may not participate with respect to a particular 
                matter considered in an advisory committee meeting if 
                such member (or an immediate family member of such 
                member) has a financial interest that could be affected 
                by the advice given to the Secretary with respect to 
                such matter.
            ``(3) Meetings.--The Advisory Committee shall meet twice 
        each calendar year and at such other times as the Secretary may 
        provide.
            ``(4) Permanent committee.--Section 14 of the Federal 
        Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
        Advisory Committee.''
            (2) Following recommendations.--Section 1834(m)(4)(F) of 
        such Act (42 U.S.C. 1395m(m)(4)(F)) is amended by adding at the 
        end the following new clause:
                            ``(iii) Recommendations of the telehealth 
                        advisory committee.--In making determinations 
                        under clauses (i) and (ii), the Secretary shall 
                        take into account the recommendations of the 
                        Telehealth Advisory Committee (established 
                        under section 1868(c)) when adding or deleting 
                        services (and HCPCS codes) and in establishing 
                        policies of the Centers for Medicare & Medicaid 
                        Services regarding the delivery of telehealth 
                        services. If the Secretary does not implement 
                        such a recommendation, the Secretary shall 
                        publish in the Federal Register a statement 
                        regarding the reason such recommendation was 
                        not implemented.''
            (3) Waiver of administrative limitation.--The Secretary of 
        Health and Human Services shall establish the Telehealth 
        Advisory Committee under the amendment made by paragraph (1) 
        notwithstanding any limitation that may apply to the number of 
        advisory committees that may be established (within the 
        Department of Health and Human Services or otherwise).
    (c) Credentialing Telemedicine Practitioners.--Section 1834(m) of 
such Act (42 U.S.C. 1395m(m)) is amended by adding at the end the 
following new paragraph:
            ``(5) Hospital credentialing of telemedicine 
        practitioners.--A telemedicine practitioner that is 
        credentialed by a hospital in compliance with the Joint 
        Commission Standards for Telemedicine shall be considered in 
        compliance with conditions of participation and reimbursement 
        credentialing requirements under this title for telemedicine 
        services.''.

SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

     Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ```2010'' 
                and inserting ``2012''; and
                    (B) in the second sentence, by striking ``or 2009'' 
                and inserting ``, 2009, 2010, or 2011''; and
            (2) in subclause (III), by striking ``January 1, 2010'' and 
        inserting ``January 1, 2012''.

SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.

    Subsection (a) of section 106 of division B of the Tax Relief and 
Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section 
117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110-173) and section 124 of the Medicare Improvements for Patients 
and Providers Act of 2008 (Public Law 110-275), is amended by striking 
``September 30, 2009'' and inserting ``September 30, 2011''.

SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)) is amended by striking ``before January 1, 2010'' and 
inserting ``before January 1, 2012''.

SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
              PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), and section 136 of the Medicare Improvements for Patients and 
Providers Act of 1008 (Public Law 110-275), is amended by striking 
``and 2009'' and inserting ``2009, 2010, and 2011''.

SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

    (a) In General.--Section 1834(l)(13) of the Social Security Act (42 
U.S.C. 1395m(l)(13)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``before January 1, 2010'' and inserting ``before 
                January 1, 2012''; and
                    (B) in each of clauses (i) and (ii), by striking 
                ``before January 1, 2010'' and inserting ``before 
                January 1, 2012''.
    (b) Air Ambulance Improvements.--Section 146(b)(1) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275) is amended by striking ``ending on December 31, 2009'' and 
inserting ``ending on December 31, 2011''.

              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.

    (a) Application of Highest Level Permitted Under LIS to All Subsidy 
Eligible Individuals.--
            (1) In general.--Section 1860D-14(a)(1) of the Social 
        Security Act (42 U.S.C. 1395w-114(a)(1)) is amended in the 
        matter before subparagraph (A), by inserting ``(or, beginning 
        with 2012, paragraph (3)(E))'' after ``paragraph (3)(D)''.
            (2) Annual increase in lis resource test.--Section 1860D-
        14(a)(3)(E)(i) of such Act (42 U.S.C. 1395w-114(a)(3)(E)(i)) is 
        amended--
                    (A) by striking ``and'' at the end of subclause 
                (I);
                    (B) in subclause (II), by inserting ``(before 
                2012)'' after ``subsequent year'';
                    (C) by striking the period at the end of subclause 
                (II) and inserting a semicolon;
                    (D) by inserting after subclause (II) the following 
                new subclauses:
                                    ``(III) for 2012, $17,000 (or 
                                $34,000 in the case of the combined 
                                value of the individual's assets or 
                                resources and the assets or resources 
                                of the individual's spouse); and
                                    ``(IV) for a subsequent year, the 
                                dollar amounts specified in this 
                                subclause (or subclause (III)) for the 
                                previous year increased by the annual 
                                percentage increase in the consumer 
                                price index (all items; U.S. city 
                                average) as of September of such 
                                previous year.''; and
                    (E) in the last sentence, by inserting ``or (IV)'' 
                after ``subclause (II)''.
            (3) Application of lis test under medicare savings 
        program.--Section 1905(p)(1)(C) of such Act (42 U.S.C. 
        1396d(p)(1)(C)) is amended--
                    (A) by striking ``effective beginning with January 
                1, 2010'' and inserting ``effective for the period 
                beginning with January 1, 2010, and ending with 
                December 31, 2011''; and
                    (B) by inserting before the period at the end the 
                following: ``or, effective beginning with January 1, 
                2012, whose resources (as so determined) do not exceed 
                the maximum resource level applied for the year under 
                subparagraph (E) of section 1860D-14(a)(3) (determined 
                without regard to the life insurance policy exclusion 
                provided under subparagraph (G) of such section) 
                applicable to an individual or to the individual and 
                the individual's spouse (as the case may be)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to eligibility determinations for income-related subsidies and 
medicare cost-sharing furnished for periods beginning on or after 
January 1, 2012.

SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-
              INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.

    (a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
            (1) by striking ``Institutionalized individuals.--In'' and 
        inserting ``Elimination of cost-sharing for certain full-
        benefit dual eligible individuals.--
                                    ``(I) Institutionalized 
                                individuals.--In''; and
            (2) by adding at the end the following new subclause:
                                    ``(II) Certain other individuals.--
                                In the case of an individual who is a 
                                full-benefit dual eligible individual 
                                and with respect to whom there has been 
                                a determination that but for the 
                                provision of home and community based 
                                care (whether under section 1915, 1932, 
                                or under a waiver under section 1115) 
                                the individual would require the level 
                                of care provided in a hospital or a 
                                nursing facility or intermediate care 
                                facility for the mentally retarded the 
                                cost of which could be reimbursed under 
                                the State plan under title XIX, the 
                                elimination of any beneficiary 
                                coinsurance described in section 1860D-
                                2(b)(2) (for all amounts through the 
                                total amount of expenditures at which 
                                benefits are available under section 
                                1860D-2(b)(4)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to drugs dispensed on or after January 1, 2011.

SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.

    (a) Administrative Verification of Income and Resources Under the 
Low-income Subsidy Program.--
            (1) In general.--Clause (iii) of section 1860D-14(a)(3)(E) 
        of the Social Security Act (42 U.S.C. 1395w-114(a)(3)(E)) is 
        amended to read as follows:
                            ``(iii) Certification of income and 
                        resources.--For purposes of applying this 
                        section--
                                    ``(I) an individual shall be 
                                permitted to apply on the basis of 
                                self-certification of income and 
                                resources; and
                                    ``(II) matters attested to in the 
                                application shall be subject to 
                                appropriate methods of verification 
                                without the need of the individual to 
                                provide additional documentation, 
                                except in extraordinary situations as 
                                determined by the Commissioner.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply beginning January 1, 2010.
    (b) 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.--For provision authorizing disclosure 
of return information to facilitate identification of individuals 
likely to be ineligible for low-income subsidies under Medicare 
prescription drug program, see section 1801.

SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIMBURSEMENTS FOR 
              RETROACTIVE LOW INCOME SUBSIDY ENROLLMENT.

    (a) In General.--In the case of a retroactive LIS enrollment 
beneficiary who is enrolled under a prescription drug plan under part D 
of title XVIII of the Social Security Act (or an MA-PD plan under part 
C of such title), the beneficiary (or any eligible third party) is 
entitled to reimbursement by the plan for covered drug costs incurred 
by the beneficiary during the retroactive coverage period of the 
beneficiary in accordance with subsection (b) and in the case of such a 
beneficiary described in subsection (c)(4)(A)(i), such reimbursement 
shall be made automatically by the plan upon receipt of appropriate 
notice the beneficiary is eligible for assistance described in such 
subsection (c)(4)(A)(i) without further information required to be 
filed with the plan by the beneficiary.
    (b) Administrative Requirements Relating to Reimbursements.--
            (1) Line-item description.--Each reimbursement made by a 
        prescription drug plan or MA-PD plan under subsection (a) shall 
        include a line-item description of the items for which the 
        reimbursement is made.
            (2) Timing of reimbursements.--A prescription drug plan or 
        MA-PD plan must make a reimbursement under subsection (a) to a 
        retroactive LIS enrollment beneficiary, with respect to a 
        claim, not later than 45 days after--
                    (A) in the case of a beneficiary described in 
                subsection (c)(4)(A)(i), the date on which the plan 
                receives notice from the Secretary that the beneficiary 
                is eligible for assistance described in such 
                subsection; or
                    (B) in the case of a beneficiary described in 
                subsection (c)(4)(A)(ii), the date on which the 
                beneficiary files the claim with the plan.
            (3) Reporting requirement.--For each month beginning with 
        January 2011, each prescription drug plan and each MA-PD plan 
        shall report to the Secretary the following:
                    (A) The number of claims the plan has readjudicated 
                during the month due to a beneficiary becoming 
                retroactively eligible for subsidies available under 
                section 1860D-14 of the Social Security Act.
                    (B) The total value of the readjudicated claim 
                amount for the month.
                    (C) The Medicare Health Insurance Claims Number of 
                beneficiaries for whom claims were readjudicated.
                    (D) For the claims described in subparagraphs (A) 
                and (B), an attestation to the Administrator of the 
                Centers for Medicare & Medicaid Services of the total 
                amount of reimbursement the plan has provided to 
                beneficiaries for premiums and cost-sharing that the 
                beneficiary overpaid for which the plan received 
                payment from the Centers for Medicare & Medicaid 
                Services.
    (c) Definitions.--For purposes of this section:
            (1) Covered drug costs.--The term ``covered drug costs'' 
        means, with respect to a retroactive LIS enrollment beneficiary 
        enrolled under a prescription drug plan under part D of title 
        XVIII of the Social Security Act (or an MA-PD plan under part C 
        of such title), the amount by which--
                    (A) the costs incurred by such beneficiary during 
                the retroactive coverage period of the beneficiary for 
                covered part D drugs, premiums, and cost-sharing under 
                such title; exceeds
                    (B) such costs that would have been incurred by 
                such beneficiary during such period if the beneficiary 
                had been both enrolled in the plan and recognized by 
                such plan as qualified during such period for the low 
                income subsidy under section 1860D-14 of the Social 
                Security Act to which the individual is entitled.
            (2) Eligible third party.--The term ``eligible third 
        party'' means, with respect to a retroactive LIS enrollment 
        beneficiary, an organization or other third party that is owed 
        payment on behalf of such beneficiary for covered drug costs 
        incurred by such beneficiary during the retroactive coverage 
        period of such beneficiary.
            (3) Retroactive coverage period.--The term ``retroactive 
        coverage period'' means--
                    (A) with respect to a retroactive LIS enrollment 
                beneficiary described in paragraph (4)(A)(i), the 
                period--
                            (i) beginning on the effective date of the 
                        assistance described in such paragraph for 
                        which the individual is eligible; and
                            (ii) ending on the date the plan 
                        effectuates the status of such individual as so 
                        eligible; and
                    (B) with respect to a retroactive LIS enrollment 
                beneficiary described in paragraph (4)(A)(ii), the 
                period--
                            (i) beginning on the date the individual is 
                        both entitled to benefits under part A, or 
                        enrolled under part B, of title XVIII of the 
                        Social Security Act and eligible for medical 
                        assistance under a State plan under title XIX 
                        of such Act; and
                            (ii) ending on the date the plan 
                        effectuates the status of such individual as a 
                        full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act).
            (4) Retroactive lis enrollment beneficiary.--
                    (A) In general.--The term ``retroactive LIS 
                enrollment beneficiary'' means an individual who--
                            (i) is enrolled in a prescription drug plan 
                        under part D of title XVIII of the Social 
                        Security Act (or an MA-PD plan under part C of 
                        such title) and subsequently becomes eligible 
                        as a full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act), an 
                        individual receiving a low-income subsidy under 
                        section 1860D-14 of such Act, an individual 
                        receiving assistance under the Medicare Savings 
                        Program implemented under clauses (i), (iii), 
                        and (iv) of section 1902(a)(10)(E) of such Act, 
                        or an individual receiving assistance under the 
                        supplemental security income program under 
                        section 1611 of such Act; or
                            (ii) subject to subparagraph (B)(i), is a 
                        full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act) who 
                        is automatically enrolled in such a plan under 
                        section 1860D-1(b)(1)(C) of such Act.
                    (B) Exception for beneficiaries enrolled in rfp 
                plan.--
                            (i) In general.--In no case shall an 
                        individual described in subparagraph (A)(ii) 
                        include an individual who is enrolled, pursuant 
                        to a RFP contract described in clause (ii), in 
                        a prescription drug plan offered by the sponsor 
                        of such plan awarded such contract.
                            (ii) RFP contract described.--The RFP 
                        contract described in this section is a 
                        contract entered into between the Secretary and 
                        a sponsor of a prescription drug plan pursuant 
                        to the Centers for Medicare & Medicaid 
                        Services' request for proposals issued on 
                        February 17, 2009, relating to Medicare part D 
                        retroactive coverage for certain low income 
                        beneficiaries, or a similar subsequent request 
                        for proposals.

SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.

    (a) In General.--Section 1860D-1(b)(1)(C) of the Social Security 
Act (42 U.S.C. 1395w-101(b)(1)(C)) is amended by adding after ``PDP 
region'' the following: ``or through use of an intelligent assignment 
process that is designed to maximize the access of such individual to 
necessary prescription drugs while minimizing costs to such individual 
and to the program under this part to the greatest extent possible. In 
the case the Secretary enrolls such individuals through use of an 
intelligent assignment process, such process shall take into account 
the extent to which prescription drugs necessary for the individual are 
covered in the case of a PDP sponsor of a prescription drug plan that 
uses a formulary, the use of prior authorization or other restrictions 
on access to coverage of such prescription drugs by such a sponsor, and 
the overall quality of a prescription drug plan as measured by quality 
ratings established by the Secretary''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect for contract years beginning with 2012.

SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC ENROLLMENT PROCESS 
              FOR CERTAIN SUBSIDY ELIGIBLE INDIVIDUALS.

    (a) Special Enrollment Period.--Section 1860D-1(b)(3)(D) of the 
Social Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended to read 
as follows:
                    ``(D) Subsidy eligible individuals.--In the case of 
                an individual (as determined by the Secretary) who is 
                determined under subparagraph (B) of section 1860D-
                14(a)(3) to be a subsidy eligible individual.''.
    (b) Automatic Enrollment.--Section 1860D-1(b)(1) of the Social 
Security Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at the 
end the following new subparagraph:
                    ``(D) Special rule for subsidy eligible 
                individuals.--The process established under 
                subparagraph (A) shall include, in the case of an 
                individual described in section 1860D-1(b)(3)(D) who 
                fails to enroll in a prescription drug plan or an MA-PD 
                plan during the special enrollment established under 
                such section applicable to such individual, the 
                application of the assignment process described in 
                subparagraph (C) to such individual in the same manner 
                as such assignment process applies to a part D eligible 
                individual described in such subparagraph (C). Nothing 
                in the previous sentence shall prevent an individual 
                described in such sentence from declining enrollment in 
                a plan determined appropriate by the Secretary (or in 
                the program under this part) or from changing such 
                enrollment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to subsidy determinations made for months beginning with January 
2011.

SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO REBATE IN CALCULATION OF 
              LOW INCOME SUBSIDY BENCHMARK.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by 
inserting before the period the following: ``before the application of 
the monthly rebate computed under section 1854(b)(1)(C)(i) for that 
plan and year involved''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to subsidy determinations made for months beginning with January 
2011.

                Subtitle B--Reducing Health Disparities

SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.

    (a) Ensuring Effective Communication by the Centers for Medicare & 
Medicaid Services.--
            (1) Study on medicare payments for language services.--The 
        Secretary of Health and Human Services shall conduct a study 
        that examines the extent to which Medicare service providers 
        utilize, offer, or make available language services for 
        beneficiaries who are limited English proficient and ways that 
        Medicare should develop payment systems for language services.
            (2) Analyses.--The study shall include an analysis of each 
        of the following:
                    (A) How to develop and structure appropriate 
                payment systems for language services for all Medicare 
                service providers.
                    (B) The feasibility of adopting a payment 
                methodology for on-site interpreters, including 
                interpreters who work as independent contractors and 
                interpreters who work for agencies that provide on-site 
                interpretation, pursuant to which such interpreters 
                could directly bill Medicare for services provided in 
                support of physician office services for an LEP 
                Medicare patient.
                    (C) The feasibility of Medicare contracting 
                directly with agencies that provide off-site 
                interpretation including telephonic and video 
                interpretation pursuant to which such contractors could 
                directly bill Medicare for the services provided in 
                support of physician office services for an LEP 
                Medicare patient.
                    (D) The feasibility of modifying the existing 
                Medicare resource-based relative value scale (RBRVS) by 
                using adjustments (such as multipliers or add-ons) when 
                a patient is LEP.
                    (E) How each of options described in a previous 
                paragraph would be funded and how such funding would 
                affect physician payments, a physician's practice, and 
                beneficiary cost-sharing.
                    (F) The extent to which providers under parts A and 
                B of title XVIII of the Social Security Act, MA 
                organizations offering Medicare Advantage plans under 
                part C of such title and PDP sponsors of a prescription 
                drug plan under part D of such title utilize, offer, or 
                make available language services for beneficiaries with 
                limited English proficiency.
                    (G) The nature and type of language services 
                provided by States under title XIX of the Social 
                Security Act and the extent to which such services 
                could be utilized by beneficiaries and providers under 
                title XVIII of such Act.
            (3) Variation in payment system described.--The payment 
        systems described in paragraph (2)(A) may allow variations 
        based upon types of service providers, available delivery 
        methods, and costs for providing language services including 
        such factors as--
                    (A) the type of language services provided (such as 
                provision of health care or health care related 
                services directly in a non-English language by a 
                bilingual provider or use of an interpreter);
                    (B) type of interpretation services provided (such 
                as in-person, telephonic, video interpretation);
                    (C) the methods and costs of providing language 
                services (including the costs of providing language 
                services with internal staff or through contract with 
                external independent contractors or agencies, or both);
                    (D) providing services for languages not frequently 
                encountered in the United States; and
                    (E) providing services in rural areas.
            (4) Report.--The Secretary shall submit a report on the 
        study conducted under subsection (a) to appropriate committees 
        of Congress not later than 12 months after the date of the 
        enactment of this Act.
            (5) Exemption from paperwork reduction act.--Chapter 35 of 
        title 44, United States Code (commonly known as the ``Paperwork 
        Reduction Act'' ), shall not apply for purposes of carrying out 
        this subsection.
            (6) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection such sums as 
        are necessary.
    (b) Health Plans.--Section 1857(g)(1) of the Social Security Act 
(42 U.S.C. 1395w-27(g)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (F);
            (2) by adding ``or'' at the end of subparagraph (G); and
            (3) by inserting after subparagraph (G) the following new 
        subparagraph:
                    ``(H) fails substantially to provide language 
                services to limited English proficient beneficiaries 
                enrolled in the plan that are required under law;''.

SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR MEDICARE BENEFICIARIES 
              WITH LIMITED ENGLISH PROFICIENCY BY PROVIDING 
              REIMBURSEMENT FOR CULTURALLY AND LINGUISTICALLY 
              APPROPRIATE SERVICES.

    (a) In General.--Not later than 6 months after the date of the 
completion of the study described in section 1221(a), the Secretary, 
acting through the Centers for Medicare & Medicaid Services, shall 
carry out a demonstration program under which the Secretary shall award 
not fewer than 24 3-year grants to eligible Medicare service providers 
(as described in subsection (b)(1)) to improve effective communication 
between such providers and Medicare beneficiaries who are living in 
communities where racial and ethnic minorities, including populations 
that face language barriers, are underserved with respect to such 
services. In designing and carrying out the demonstration the Secretary 
shall take into consideration the results of the study conducted under 
section 1221(a) and adjust, as appropriate, the distribution of grants 
so as to better target Medicare beneficiaries who are in the greatest 
need of language services. The Secretary shall not authorize a grant 
larger than $500,000 over three years for any grantee.
    (b) Eligibility; Priority.--
            (1) Eligibility.--To be eligible to receive a grant under 
        subsection (a) an entity shall--
                    (A) be--
                            (i) a provider of services under part A of 
                        title XVIII of the Social Security Act;
                            (ii) a service provider under part B of 
                        such title;
                            (iii) a part C organization offering a 
                        Medicare part C plan under part C of such 
                        title; or
                            (iv) a PDP sponsor of a prescription drug 
                        plan under part D of such title; and
                    (B) prepare and submit to the Secretary an 
                application, at such time, in such manner, and 
                accompanied by such additional information as the 
                Secretary may require.
            (2) Priority.--
                    (A) Distribution.--To the extent feasible, in 
                awarding grants under this section, the Secretary shall 
                award--
                            (i) at least 6 grants to providers of 
                        services described in paragraph (1)(A)(i);
                            (ii) at least 6 grants to service providers 
                        described in paragraph (1)(A)(ii);
                            (iii) at least 6 grants to organizations 
                        described in paragraph (1)(A)(iii); and
                            (iv) at least 6 grants to sponsors 
                        described in paragraph (1)(A)(iv).
                    (B) For community organizations.--The Secretary 
                shall give priority to applicants that have developed 
                partnerships with community organizations or with 
                agencies with experience in language access.
                    (C) Variation in grantees.--The Secretary shall 
                also ensure that the grantees under this section 
                represent, among other factors, variations in--
                            (i) different types of language services 
                        provided and of service providers and 
                        organizations under parts A through D of title 
                        XVIII of the Social Security Act;
                            (ii) languages needed and their frequency 
                        of use;
                            (iii) urban and rural settings;
                            (iv) at least two geographic regions, as 
                        defined by the Secretary; and
                            (v) at least two large metropolitan 
                        statistical areas with diverse populations.
    (c) Use of Funds.--
            (1) In general.--A grantee shall use grant funds received 
        under this section to pay for the provision of competent 
        language services to Medicare beneficiaries who are limited 
        English proficient. Competent interpreter services may be 
        provided through on-site interpretation, telephonic 
        interpretation, or video interpretation or direct provision of 
        health care or health care related services by a bilingual 
        health care provider. A grantee may use bilingual providers, 
        staff, or contract interpreters. A grantee may use grant funds 
        to pay for competent translation services. A grantee may use up 
        to 10 percent of the grant funds to pay for administrative 
        costs associated with the provision of competent language 
        services and for reporting required under subsection (e).
            (2) Organizations.--Grantees that are part C organizations 
        or PDP sponsors must ensure that their network providers 
        receive at least 50 percent of the grant funds to pay for the 
        provision of competent language services to Medicare 
        beneficiaries who are limited English proficient, including 
        physicians and pharmacies.
            (3) Determination of payments for language services.--
        Payments to grantees shall be calculated based on the estimated 
        numbers of limited English proficient Medicare beneficiaries in 
        a grantee's service area utilizing--
                    (A) data on the numbers of limited English 
                proficient individuals who speak English less than 
                ``very well'' from the most recently available data 
                from the Bureau of the Census or other State-based 
                study the Secretary determines likely to yield accurate 
                data regarding the number of such individuals served by 
                the grantee; or
                    (B) the grantee's own data if the grantee routinely 
                collects data on Medicare beneficiaries' primary 
                language in a manner determined by the Secretary to 
                yield accurate data and such data shows greater numbers 
                of limited English proficient individuals than the data 
                listed in subparagraph (A).
            (4) Limitations.--
                    (A) Reporting.--Payments shall only be provided 
                under this section to grantees that report their costs 
                of providing language services as required under 
                subsection (e) and may be modified annually at the 
                discretion of the Secretary. If a grantee fails to 
                provide the reports under such section for the first 
                year of a grant, the Secretary may terminate the grant 
                and solicit applications from new grantees to 
                participate in the subsequent two years of the 
                demonstration program.
                    (B) Type of services.--
                            (i) In general.--Subject to clause (ii), 
                        payments shall be provided under this section 
                        only to grantees that utilize competent 
                        bilingual staff or competent interpreter or 
                        translation services which--
                                    (I) if the grantee operates in a 
                                State that has statewide health care 
                                interpreter standards, meet the State 
                                standards currently in effect; or
                                    (II) if the grantee operates in a 
                                State that does not have statewide 
                                health care interpreter standards, 
                                utilizes competent interpreters who 
                                follow the National Council on 
                                Interpreting in Health Care's Code of 
                                Ethics and Standards of Practice.
                            (ii) Exemptions.--The requirements of 
                        clause (i) shall not apply--
                                    (I) in the case of a Medicare 
                                beneficiary who is limited English 
                                proficient (who has been informed in 
                                the beneficiary's primary language of 
                                the availability of free interpreter 
                                and translation services) and who 
                                requests the use of family, friends, or 
                                other persons untrained in 
                                interpretation or translation and the 
                                grantee documents the request in the 
                                beneficiary's record; and
                                    (II) in the case of a medical 
                                emergency where the delay directly 
                                associated with obtaining a competent 
                                interpreter or translation services 
                                would jeopardize the health of the 
                                patient.
                        Nothing in clause (ii)(II) shall be construed 
                        to exempt emergency rooms or similar entities 
                        that regularly provide health care services in 
                        medical emergencies from having in place 
                        systems to provide competent interpreter and 
                        translation services without undue delay.
    (d) Assurances.--Grantees under this section shall--
            (1) ensure that appropriate clinical and support staff 
        receive ongoing education and training in linguistically 
        appropriate service delivery;
            (2) ensure the linguistic competence of bilingual 
        providers;
            (3) offer and provide appropriate language services at no 
        additional charge to each patient with limited English 
        proficiency at all points of contact, in a timely manner during 
        all hours of operation;
            (4) notify Medicare beneficiaries of their right to receive 
        language services in their primary language;
            (5) post signage in the languages of the commonly 
        encountered group or groups present in the service area of the 
        organization; and
            (6) ensure that--
                    (A) primary language data are collected for 
                recipients of language services; and
                    (B) consistent with the privacy protections 
                provided under the regulations promulgated pursuant to 
                section 264(c) of the Health Insurance Portability and 
                Accountability Act of 1996 (42 U.S.C. 1320d-2 note), if 
                the recipient of language services is a minor or is 
                incapacitated, the primary language of the parent or 
                legal guardian is collected and utilized.
    (e) Reporting Requirements.--Grantees under this section shall 
provide the Secretary with reports at the conclusion of the each year 
of a grant under this section. Each report shall include at least the 
following information:
            (1) The number of Medicare beneficiaries to whom language 
        services are provided.
            (2) The languages of those Medicare beneficiaries.
            (3) The types of language services provided (such as 
        provision of services directly in non-English language by a 
        bilingual health care provider or use of an interpreter).
            (4) Type of interpretation (such as in-person, telephonic, 
        or video interpretation).
            (5) The methods of providing language services (such as 
        staff or contract with external independent contractors or 
        agencies).
            (6) The length of time for each interpretation encounter.
            (7) The costs of providing language services (which may be 
        actual or estimated, as determined by the Secretary).
    (f) No Cost Sharing.--Limited English proficient Medicare 
beneficiaries shall not have to pay cost-sharing or co-pays for 
language services provided through this demonstration program.
    (g) Evaluation and Report.--The Secretary shall conduct an 
evaluation of the demonstration program under this section and shall 
submit to the appropriate committees of Congress a report not later 
than 1 year after the completion of the program. The report shall 
include the following:
            (1) An analysis of the patient outcomes and costs of 
        furnishing care to the limited English proficient Medicare 
        beneficiaries participating in the project as compared to such 
        outcomes and costs for limited English proficient Medicare 
        beneficiaries not participating.
            (2) The effect of delivering culturally and linguistically 
        appropriate services on beneficiary access to care, utilization 
        of services, efficiency and cost-effectiveness of health care 
        delivery, patient satisfaction, and select health outcomes.
            (3) Recommendations, if any, regarding the extension of 
        such project to the entire Medicare program.
    (h) General Provisions.--Nothing in this section shall be construed 
to limit otherwise existing obligations of recipients of Federal 
financial assistance under title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000(d) et seq.) or any other statute.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $16,000,000 for each fiscal year 
of the demonstration program.

SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into an arrangement with the Institute of Medicine under which 
the Institute will prepare and publish, not later than 3 years after 
the date of the enactment of this Act, a report on the impact of 
language access services on the health and health care of limited 
English proficient populations.
    (b) Contents.--Such report shall include--
            (1) recommendations on the development and implementation 
        of policies and practices by health care organizations and 
        providers for limited English proficient patient populations;
            (2) a description of the effect of providing language 
        access services on quality of health care and access to care 
        and reduced medical error; and
            (3) a description of the costs associated with or savings 
        related to provision of language access services.

SEC. 1224. DEFINITIONS.

    In this subtitle:
            (1) Bilingual.--The term ``bilingual'' with respect to an 
        individual means a person who has sufficient degree of 
        proficiency in two languages and can ensure effective 
        communication can occur in both languages.
            (2) Competent interpreter services.--The term ``competent 
        interpreter services'' means a trans-language rendition of a 
        spoken message in which the interpreter comprehends the source 
        language and can speak comprehensively in the target language 
        to convey the meaning intended in the source language. The 
        interpreter knows health and health-related terminology and 
        provides accurate interpretations by choosing equivalent 
        expressions that convey the best matching and meaning to the 
        source language and captures, to the greatest possible extent, 
        all nuances intended in the source message.
            (3) Competent translation services.--The term ``competent 
        translation services'' means a trans-language rendition of a 
        written document in which the translator comprehends the source 
        language and can write comprehensively in the target language 
        to convey the meaning intended in the source language. The 
        translator knows health and health-related terminology and 
        provides accurate translations by choosing equivalent 
        expressions that convey the best matching and meaning to the 
        source language and captures, to the greatest possible extent, 
        all nuances intended in the source document.
            (4) Effective communication.--The term ``effective 
        communication'' means an exchange of information between the 
        provider of health care or health care-related services and the 
        limited English proficient recipient of such services that 
        enables limited English proficient individuals to access, 
        understand, and benefit from health care or health care-related 
        services.
            (5) Interpreting/interpretation.--The terms 
        ``interpreting'' and ``interpretation'' mean the transmission 
        of a spoken message from one language into another, faithfully, 
        accurately, and objectively.
            (6) Health care services.--The term ``health care 
        services'' means services that address physical as well as 
        mental health conditions in all care settings.
            (7) Health care-related services.--The term ``health care-
        related services'' means human or social services programs or 
        activities that provide access, referrals or links to health 
        care.
            (8) Language access.--The term ``language access'' means 
        the provision of language services to an LEP individual 
        designed to enhance that individual's access to, understanding 
        of or benefit from health care or health care-related services.
            (9) Language services.--The term ``language services'' 
        means provision of health care services directly in a non-
        English language, interpretation, translation, and non-English 
        signage.
            (10) Limited english proficient.--The term ``limited 
        English proficient'' or ``LEP'' with respect to an individual 
        means an individual who speaks a primary language other than 
        English and who cannot speak, read, write or understand the 
        English language at a level that permits the individual to 
        effectively communicate with clinical or nonclinical staff at 
        an entity providing health care or health care related 
        services.
            (11) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual entitled to benefits under 
        part A of title XVIII of the Social Security Act or enrolled 
        under part B of such title.
            (12) Medicare program.--The term ``Medicare program'' means 
        the programs under parts A through D of title XVIII of the 
        Social Security Act.
            (13) Service provider.--The term ``service provider'' 
        includes all suppliers, providers of services, or entities 
        under contract to provide coverage, items or services under any 
        part of title XVIII of the Social Security Act.

                 Subtitle C--Miscellaneous Improvements

SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.

     Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 141 of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275), is amended 
by striking ``December 31, 2009'' and inserting ``December 31, 2011''.

SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS FOR 
              KIDNEY TRANSPLANT PATIENTS AND OTHER RENAL DIALYSIS 
              PROVISIONS.

    (a) Provision of Appropriate Coverage of Immunosuppressive Drugs 
Under the Medicare Program for Kidney Transplant Recipients.--
            (1) Continued entitlement to immunosuppressive drugs.--
                    (A) Kidney transplant recipients.--Section 
                226A(b)(2) of the Social Security Act (42 U.S.C. 426-
                1(b)(2)) is amended by inserting ``(except for coverage 
                of immunosuppressive drugs under section 
                1861(s)(2)(J))'' before ``, with the thirty-sixth 
                month''.
                    (B) Application.--Section 1836 of such Act (42 
                U.S.C. 1395o) is amended--
                            (i) by striking ``Every individual who'' 
                        and inserting ``(a) In General.--Every 
                        individual who''; and
                            (ii) by adding at the end the following new 
                        subsection:
    ``(b) Special Rules Applicable to Individuals Only Eligible for 
Coverage of Immunosuppressive Drugs.--
            ``(1) In general.--In the case of an individual whose 
        eligibility for benefits under this title has ended on or after 
        January 1, 2012, except for the coverage of immunosuppressive 
        drugs by reason of section 226A(b)(2), the following rules 
        shall apply:
                    ``(A) The individual shall be deemed to be enrolled 
                under this part for purposes of receiving coverage of 
                such drugs.
                    ``(B) The individual shall be responsible for 
                providing for payment of the portion of the premium 
                under section 1839 which is not covered under the 
                Medicare savings program (as defined in section 
                1144(c)(7)) in order to receive such coverage.
                    ``(C) The provision of such drugs shall be subject 
                to the application of--
                            ``(i) the deductible under section 1833(b); 
                        and
                            ``(ii) the coinsurance amount applicable 
                        for such drugs (as determined under this part).
                    ``(D) If the individual is an inpatient of a 
                hospital or other entity, the individual is entitled to 
                receive coverage of such drugs under this part.
            ``(2) Establishment of procedures in order to implement 
        coverage.--The Secretary shall establish procedures for--
                    ``(A) identifying individuals that are entitled to 
                coverage of immunosuppressive drugs by reason of 
                section 226A(b)(2); and
                    ``(B) distinguishing such individuals from 
                individuals that are enrolled under this part for the 
                complete package of benefits under this part.''.
                    (C) Technical amendment to correct duplicate 
                subsection designation.--Subsection (c) of section 226A 
                of such Act (42 U.S.C. 426-1), as added by section 
                201(a)(3)(D)(ii) of the Social Security Independence 
                and Program Improvements Act of 1994 (Public Law 103-
                296; 108 Stat. 1497), is redesignated as subsection 
                (d).
            (2) Extension of secondary payer requirements for esrd 
        beneficiaries.--Section 1862(b)(1)(C) of such Act (42 U.S.C. 
        1395y(b)(1)(C)) is amended by adding at the end the following 
        new sentence: ``With regard to immunosuppressive drugs 
        furnished on or after the date of the enactment of the 
        America's Affordable Health Choices Act of 2009, this 
        subparagraph shall be applied without regard to any time 
        limitation.''.
    (b) Medicare Coverage for ESRD Patients.--Section 1881 of such Act 
is further amended--
            (1) in subsection (b)(14)(B)(iii), by inserting ``, 
        including oral drugs that are not the oral equivalent of an 
        intravenous drug (such as oral phosphate binders and 
        calcimimetics),'' after ``other drugs and biologicals'';
            (2) in subsection (b)(14)(E)(ii)--
                    (A) in the first sentence--
                            (i) by striking ``a one-time election to be 
                        excluded from the phase-in'' and inserting ``an 
                        election, with respect to 2011, 2012, or 2013, 
                        to be excluded from the phase-in (or the 
                        remainder of the phase-in)''; and
                            (ii) by adding before the period at the end 
                        the following: ``for such year and for each 
                        subsequent year during the phase-in described 
                        in clause (i)''; and
                    (B) in the second sentence--
                            (i) by striking ``January 1, 2011'' and 
                        inserting ``the first date of such year''; and
                            (ii) by inserting ``and at a time'' after 
                        ``form and manner''; and
            (3) in subsection (h)(4)(E), by striking ``lesser'' and 
        inserting ``greater''.

SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.

    (a) Medicare.--
            (1) In general.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x) is amended--
                    (A) in subsection (s)(2)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (DD);
                            (ii) by adding ``and'' at the end of 
                        subparagraph (EE); and
                            (iii) by adding at the end the following 
                        new subparagraph:
            ``(FF) advance care planning consultation (as defined in 
        subsection (hhh)(1));''; and
                    (B) by adding at the end the following new 
                subsection:

                  ``Advance Care Planning Consultation

    ``(hhh)(1) Subject to paragraphs (3) and (4), the term `advance 
care planning consultation' means a consultation between the individual 
and a practitioner described in paragraph (2) regarding advance care 
planning, if, subject to paragraph (3), the individual involved has not 
had such a consultation within the last 5 years. Such consultation 
shall include the following:
            ``(A) An explanation by the practitioner of advance care 
        planning, including key questions and considerations, important 
        steps, and suggested people to talk to.
            ``(B) An explanation by the practitioner of advance 
        directives, including living wills and durable powers of 
        attorney, and their uses.
            ``(C) An explanation by the practitioner of the role and 
        responsibilities of a health care proxy.
            ``(D) The provision by the practitioner of a list of 
        national and State-specific resources to assist consumers and 
        their families with advance care planning, including the 
        national toll-free hotline, the advance care planning 
        clearinghouses, and State legal service organizations 
        (including those funded through the Older Americans Act of 
        1965).
            ``(E) An explanation by the practitioner of the continuum 
        of end-of-life services and supports available, including 
        palliative care and hospice, and benefits for such services and 
        supports that are available under this title.
            ``(F)(i) Subject to clause (ii), an explanation of orders 
        regarding life sustaining treatment or similar orders, which 
        shall include--
                    ``(I) the reasons why the development of such an 
                order is beneficial to the individual and the 
                individual's family and the reasons why such an order 
                should be updated periodically as the health of the 
                individual changes;
                    ``(II) the information needed for an individual or 
                legal surrogate to make informed decisions regarding 
                the completion of such an order; and
                    ``(III) the identification of resources that an 
                individual may use to determine the requirements of the 
                State in which such individual resides so that the 
                treatment wishes of that individual will be carried out 
                if the individual is unable to communicate those 
                wishes, including requirements regarding the 
                designation of a surrogate decisionmaker (also known as 
                a health care proxy).
            ``(ii) The Secretary shall limit the requirement for 
        explanations under clause (i) to consultations furnished in a 
        State--
                    ``(I) in which all legal barriers have been 
                addressed for enabling orders for life sustaining 
                treatment to constitute a set of medical orders 
                respected across all care settings; and
                    ``(II) that has in effect a program for orders for 
                life sustaining treatment described in clause (iii).
            ``(iii) A program for orders for life sustaining treatment 
        for a States described in this clause is a program that--
                    ``(I) ensures such orders are standardized and 
                uniquely identifiable throughout the State;
                    ``(II) distributes or makes accessible such orders 
                to physicians and other health professionals that 
                (acting within the scope of the professional's 
                authority under State law) may sign orders for life 
                sustaining treatment;
                    ``(III) provides training for health care 
                professionals across the continuum of care about the 
                goals and use of orders for life sustaining treatment; 
                and
                    ``(IV) is guided by a coalition of stakeholders 
                includes representatives from emergency medical 
                services, emergency department physicians or nurses, 
                state long-term care association, state medical 
                association, state surveyors, agency responsible for 
                senior services, state department of health, state 
                hospital association, home health association, state 
                bar association, and state hospice association.
    ``(2) A practitioner described in this paragraph is--
            ``(A) a physician (as defined in subsection (r)(1)); and
            ``(B) a nurse practitioner or physician assistant who has 
        the authority under State law to sign orders for life 
        sustaining treatments.
    ``(3)(A) An initial preventive physical examination under 
subsection (WW), including any related discussion during such 
examination, shall not be considered an advance care planning 
consultation for purposes of applying the 5-year limitation under 
paragraph (1).
    ``(B) An advance care planning consultation with respect to an 
individual may be conducted more frequently than provided under 
paragraph (1) if there is a significant change in the health condition 
of the individual, including diagnosis of a chronic, progressive, life-
limiting disease, a life-threatening or terminal diagnosis or life-
threatening injury, or upon admission to a skilled nursing facility, a 
long-term care facility (as defined by the Secretary), or a hospice 
program.
    ``(4) A consultation under this subsection may include the 
formulation of an order regarding life sustaining treatment or a 
similar order.
    ``(5)(A) For purposes of this section, the term `order regarding 
life sustaining treatment' means, with respect to an individual, an 
actionable medical order relating to the treatment of that individual 
that--
            ``(i) is signed and dated by a physician (as defined in 
        subsection (r)(1)) or another health care professional (as 
        specified by the Secretary and who is acting within the scope 
        of the professional's authority under State law in signing such 
        an order, including a nurse practitioner or physician 
        assistant) and is in a form that permits it to stay with the 
        individual and be followed by health care professionals and 
        providers across the continuum of care;
            ``(ii) effectively communicates the individual's 
        preferences regarding life sustaining treatment, including an 
        indication of the treatment and care desired by the individual;
            ``(iii) is uniquely identifiable and standardized within a 
        given locality, region, or State (as identified by the 
        Secretary); and
            ``(iv) may incorporate any advance directive (as defined in 
        section 1866(f)(3)) if executed by the individual.
    ``(B) The level of treatment indicated under subparagraph (A)(ii) 
may range from an indication for full treatment to an indication to 
limit some or all or specified interventions. Such indicated levels of 
treatment may include indications respecting, among other items--
            ``(i) the intensity of medical intervention if the patient 
        is pulse less, apneic, or has serious cardiac or pulmonary 
        problems;
            ``(ii) the individual's desire regarding transfer to a 
        hospital or remaining at the current care setting;
            ``(iii) the use of antibiotics; and
            ``(iv) the use of artificially administered nutrition and 
        hydration.''.
            (2) Payment.--Section 1848(j)(3) of such Act (42 U.S.C. 
        1395w-4(j)(3)) is amended by inserting ``(2)(FF),'' after 
        ``(2)(EE),''.
            (3) Frequency limitation.--Section 1862(a) of such Act (42 
        U.S.C. 1395y(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (N), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (O) by striking the 
                        semicolon at the end and inserting ``, and''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(P) in the case of advance care planning 
                consultations (as defined in section 1861(hhh)(1)), 
                which are performed more frequently than is covered 
                under such section;''; and
                    (B) in paragraph (7), by striking ``or (K)'' and 
                inserting ``(K), or (P)''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to consultations furnished on or after January 1, 
        2011.
    (b) Expansion of Physician Quality Reporting Initiative for End of 
Life Care.--
            (1) Physician's quality reporting initiative.--Section 
        1848(k)(2) of the Social Security Act (42 U.S.C. 1395w-4(k)(2)) 
        is amended by adding at the end the following new subparagraph:
                    ``(E) Physician's quality reporting initiative.--
                            ``(i) In general.--For purposes of 
                        reporting data on quality measures for covered 
                        professional services furnished during 2011 and 
                        any subsequent year, to the extent that 
                        measures are available, the Secretary shall 
                        include quality measures on end of life care 
                        and advanced care planning that have been 
                        adopted or endorsed by a consensus-based 
                        organization, if appropriate. Such measures 
                        shall measure both the creation of and 
                        adherence to orders for life-sustaining 
                        treatment.
                            ``(ii) Proposed set of measures.--The 
                        Secretary shall publish in the Federal Register 
                        proposed quality measures on end of life care 
                        and advanced care planning that the Secretary 
                        determines are described in subparagraph (A) 
                        and would be appropriate for eligible 
                        professionals to use to submit data to the 
                        Secretary. The Secretary shall provide for a 
                        period of public comment on such set of 
                        measures before finalizing such proposed 
                        measures.''.
    (c) Inclusion of Information in Medicare & You Handbook.--
            (1) Medicare & you handbook.--
                    (A) In general.--Not later than 1 year after the 
                date of the enactment of this Act, the Secretary of 
                Health and Human Services shall update the online 
                version of the Medicare & You Handbook to include the 
                following:
                            (i) An explanation of advance care planning 
                        and advance directives, including--
                                    (I) living wills;
                                    (II) durable power of attorney;
                                    (III) orders of life-sustaining 
                                treatment; and
                                    (IV) health care proxies.
                            (ii) A description of Federal and State 
                        resources available to assist individuals and 
                        their families with advance care planning and 
                        advance directives, including--
                                    (I) available State legal service 
                                organizations to assist individuals 
                                with advance care planning, including 
                                those organizations that receive 
                                funding pursuant to the Older Americans 
                                Act of 1965 (42 U.S.C. 93001 et seq.);
                                    (II) website links or addresses for 
                                State-specific advance directive forms; 
                                and
                                    (III) any additional information, 
                                as determined by the Secretary.
                    (B) Update of paper and subsequent versions.--The 
                Secretary shall include the information described in 
                subparagraph (A) in all paper and electronic versions 
                of the Medicare & You Handbook that are published on or 
                after the date that is 1 year after the date of the 
                enactment of this Act.

SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND WAIVER OF LIMITED 
              ENROLLMENT PENALTY FOR TRICARE BENEFICIARIES.

    (a) Part B Special Enrollment Period.--
            (1) In general.--Section 1837 of the Social Security Act 
        (42 U.S.C. 1395p) is amended by adding at the end the following 
        new subsection:
    ``(l)(1) In the case of any individual who is a covered beneficiary 
(as defined in section 1072(5) of title 10, United States Code) at the 
time the individual is entitled to hospital insurance benefits under 
part A under section 226(b) or section 226A and who is eligible to 
enroll but who has elected not to enroll (or to be deemed enrolled) 
during the individual's initial enrollment period, there shall be a 
special enrollment period described in paragraph (2).
    ``(2) The special enrollment period described in this paragraph, 
with respect to an individual, is the 12-month period beginning on the 
day after the last day of the initial enrollment period of the 
individual or, if later, the 12-month period beginning with the month 
the individual is notified of enrollment under this section.
    ``(3) In the case of an individual who enrolls during the special 
enrollment period provided under paragraph (1), the coverage period 
under this part shall begin on the first day of the month in which the 
individual enrolls or, at the option of the individual, on the first 
day of the second month following the last month of the individual's 
initial enrollment period.
    ``(4) The Secretary of Defense shall establish a method for 
identifying individuals described in paragraph (1) and providing notice 
to them of their eligibility for enrollment during the special 
enrollment period described in paragraph (2).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to elections made on or after the date of the 
        enactment of this Act.
    (b) Waiver of Increase of Premium.--
            (1) In general.--Section 1839(b) of the Social Security Act 
        (42 U.S.C. 1395r(b)) is amended by striking ``section 
        1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of 
        section 1837''.
            (2) Effective date.--
                    (A) In general.--The amendment made by paragraph 
                (1) shall apply with respect to elections made on or 
                after the date of the enactment of this Act.
                    (B) Rebates for certain disabled and esrd 
                beneficiaries.--
                            (i) In general.--With respect to premiums 
                        for months on or after January 2005 and before 
                        the month of the enactment of this Act, no 
                        increase in the premium shall be effected for a 
                        month in the case of any individual who is a 
                        covered beneficiary (as defined in section 
                        1072(5) of title 10, United States Code) at the 
                        time the individual is entitled to hospital 
                        insurance benefits under part A of title XVIII 
                        of the Social Security Act under section 226(b) 
                        or 226A of such Act, and who is eligible to 
                        enroll, but who has elected not to enroll (or 
                        to be deemed enrolled), during the individual's 
                        initial enrollment period, and who enrolls 
                        under this part within the 12-month period that 
                        begins on the first day of the month after the 
                        month of notification of entitlement under this 
                        part.
                            (ii) Consultation with department of 
                        defense.--The Secretary of Health and Human 
                        Services shall consult with the Secretary of 
                        Defense in identifying individuals described in 
                        this paragraph.
                            (iii) Rebates.--The Secretary of Health and 
                        Human Services shall establish a method for 
                        providing rebates of premium increases paid for 
                        months on or after January 1, 2005, and before 
                        the month of the enactment of this Act for 
                        which a penalty was applied and collected.

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.

    (a) In General.--Section 1839(i)(4)(C)(ii)(II) of the Social 
Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) is amended by inserting 
``sale of primary residence,'' after ``divorce of such individual,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to premiums and payments for years beginning with 2011.

SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PATIENT DECISIONS AIDS.

    (a) In General.--The Secretary of Health and Human Services shall 
establish a shared decision making demonstration program (in this 
subsection referred to as the ``program'') under the Medicare program 
using patient decision aids to meet the objective of improving the 
understanding by Medicare beneficiaries of their medical treatment 
options, as compared to comparable Medicare beneficiaries who do not 
participate in a shared decision making process using patient decision 
aids.
    (b) Sites.--
            (1) Enrollment.--The Secretary shall enroll in the program 
        not more than 30 eligible providers who have experience in 
        implementing, and have invested in the necessary infrastructure 
        to implement, shared decision making using patient decision 
        aids.
            (2) Application.--An eligible provider seeking to 
        participate in the program shall submit to the Secretary an 
        application at such time and containing such information as the 
        Secretary may require.
            (3) Preference.--In enrolling eligible providers in the 
        program, the Secretary shall give preference to eligible 
        providers that--
                    (A) have documented experience in using patient 
                decision aids for the conditions identified by the 
                Secretary and in using shared decision making;
                    (B) have the necessary information technology 
                infrastructure to collect the information required by 
                the Secretary for reporting purposes; and
                    (C) are trained in how to use patient decision aids 
                and shared decision making.
    (c) Follow-up Counseling Visit.--
            (1) In general.--An eligible provider participating in the 
        program shall routinely schedule Medicare beneficiaries for a 
        counseling visit after the viewing of such a patient decision 
        aid to answer any questions the beneficiary may have with 
        respect to the medical care of the condition involved and to 
        assist the beneficiary in thinking through how their 
        preferences and concerns relate to their medical care.
            (2) Payment for follow-up counseling visit.--The Secretary 
        shall establish procedures for making payments for such 
        counseling visits provided to Medicare beneficiaries under the 
        program. Such procedures shall provide for the establishment--
                    (A) of a code (or codes) to represent such 
                services; and
                    (B) of a single payment amount for such service 
                that includes the professional time of the health care 
                provider and a portion of the reasonable costs of the 
                infrastructure of the eligible provider such as would 
                be made under the applicable payment systems to that 
                provider for similar covered services.
    (d) Costs of Aids.--An eligible provider participating in the 
program shall be responsible for the costs of selecting, purchasing, 
and incorporating such patient decision aids into the provider's 
practice, and reporting data on quality and outcome measures under the 
program.
    (e) Funding.--The Secretary shall provide for the transfer from the 
Federal Supplementary Medical Insurance Trust Fund established under 
section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds 
as are necessary for the costs of carrying out the program.
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq. 
and 1395 et seq.) as may be necessary for the purpose of carrying out 
the program.
    (g) Report.--Not later than 12 months after the date of completion 
of the program, the Secretary shall submit to Congress a report on such 
program, together with recommendations for such legislation and 
administrative action as the Secretary determines to be appropriate. 
The final report shall include an evaluation of the impact of the use 
of the program on health quality, utilization of health care services, 
and on improving the quality of life of such beneficiaries.
    (h) Definitions.--In this section:
            (1) Eligible provider.--The term ``eligible provider'' 
        means the following:
                    (A) A primary care practice.
                    (B) A specialty practice.
                    (C) A multispecialty group practice.
                    (D) A hospital.
                    (E) A rural health clinic.
                    (F) A Federally qualified health center (as defined 
                in section 1861(aa)(4) of the Social Security Act (42 
                U.S.C. 1395x(aa)(4)).
                    (G) An integrated delivery system.
                    (H) A State cooperative entity that includes the 
                State government and at least one other health care 
                provider which is set up for the purpose of testing 
                shared decision making and patient decision aids.
            (2) Patient decision aid.--The term ``patient decision 
        aid'' means an educational tool (such as the Internet, a video, 
        or a pamphlet) that helps patients (or, if appropriate, the 
        family caregiver of the patient) understand and communicate 
        their beliefs and preferences related to their treatment 
        options, and to decide with their health care provider what 
        treatments are best for them based on their treatment options, 
        scientific evidence, circumstances, beliefs, and preferences.
            (3) Shared decision making.--The term ``shared decision 
        making'' means a collaborative process between patient and 
        clinician that engages the patient in decision making, provides 
        patients with information about trade-offs among treatment 
        options, and facilitates the incorporation of patient 
        preferences and values into the medical plan.

    TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND 
                            COORDINATED CARE

SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

    Title XVIII of the Social Security Act is amended by inserting 
after section 1866D, as added by section 1152(f) of this division, the 
following new section:

             ``accountable care organization pilot program

    ``Sec. 1866E.  (a) In General.--The Secretary shall conduct a pilot 
program (in this section referred to as the `pilot program') to test 
different payment incentive models, including (to the extent 
practicable) the specific payment incentive models described in 
subsection (c), designed to reduce the growth of expenditures and 
improve health outcomes in the provision of items and services under 
this title to applicable beneficiaries (as defined in subsection (d)) 
by qualifying accountable care organizations (as defined in subsection 
(b)(1)) in order to--
            ``(1) promote accountability for a patient population and 
        coordinate items and services under parts A and B;
            ``(2) encourage investment in infrastructure and redesigned 
        care processes for high quality and efficient service delivery; 
        and
            ``(3) reward physician practices and other physician 
        organizational models for the provision of high quality and 
        efficient health care services.
    ``(b) Qualifying Accountable Care Organizations (ACOs).--
            ``(1) Qualifying aco defined.--In this section:
                    ``(A) In general.--The terms `qualifying 
                accountable care organization' and `qualifying ACO' 
                mean a group of physicians or other physician 
                organizational model (as defined in subparagraph (D)) 
                that--
                            ``(i) is organized at least in part for the 
                        purpose of providing physicians' services; and
                            ``(ii) meets such criteria as the Secretary 
                        determines to be appropriate to participate in 
                        the pilot program, including the criteria 
                        specified in paragraph (2).
                    ``(B) Inclusion of other providers.--Nothing in 
                this subsection shall be construed as preventing a 
                qualifying ACO from including a hospital or any other 
                provider of services or supplier furnishing items or 
                services for which payment may be made under this title 
                that is affiliated with the ACO under an arrangement 
                structured so that such provider or supplier 
                participates in the pilot program and shares in any 
                incentive payments under the pilot program.
                    ``(C) Physician.--The term `physician' includes, 
                except as the Secretary may otherwise provide, any 
                individual who furnishes services for which payment may 
                be made as physicians' services.
                    ``(D) Other physician organizational model.--The 
                term `other physician organization model' means, with 
                respect to a qualifying ACO any model of organization 
                under which physicians enter into agreements with other 
                providers for the purposes of participation in the 
                pilot program in order to provide high quality and 
                efficient health care services and share in any 
                incentive payments under such program
                    ``(E) Other services.--Nothing in this paragraph 
                shall be construed as preventing a qualifying ACO from 
                furnishing items or services, for which payment may not 
                be made under this title, for purposes of achieving 
                performance goals under the pilot program.
            ``(2) Qualifying criteria.--The following are criteria 
        described in this paragraph for an organized group of 
        physicians to be a qualifying ACO:
                    ``(A) The group has a legal structure that would 
                allow the group to receive and distribute incentive 
                payments under this section.
                    ``(B) The group includes a sufficient number of 
                primary care physicians (regardless of specialty) for 
                the applicable beneficiaries for whose care the group 
                is accountable (as determined by the Secretary).
                    ``(C) The group reports on quality measures in such 
                form, manner, and frequency as specified by the 
                Secretary (which may be for the group, for providers of 
                services and suppliers, or both).
                    ``(D) The group reports to the Secretary (in a 
                form, manner and frequency as specified by the 
                Secretary) such data as the Secretary determines 
                appropriate to monitor and evaluate the pilot program.
                    ``(E) The group provides notice to applicable 
                beneficiaries regarding the pilot program (as 
                determined appropriate by the Secretary).
                    ``(F) The group contributes to a best practices 
                network or website, that shall be maintained by the 
                Secretary for the purpose of sharing strategies on 
                quality improvement, care coordination, and efficiency 
                that the groups believe are effective.
                    ``(G) The group utilizes patient-centered processes 
                of care, including those that emphasize patient and 
                caregiver involvement in planning and monitoring of 
                ongoing care management plan.
                    ``(H) The group meets other criteria determined to 
                be appropriate by the Secretary.
    ``(c) Specific Payment Incentive Models.--The specific payment 
incentive models described in this subsection are the following:
            ``(1) Performance target model.--Under the performance 
        target model under this paragraph (in this paragraph referred 
        to as the `performance target model'):
                    ``(A) In general.--A qualifying ACO qualifies to 
                receive an incentive payment if expenditures for 
                applicable beneficiaries are less than a target 
                spending level or a target rate of growth. The 
                incentive payment shall be made only if savings are 
                greater than would result from normal variation in 
                expenditures for items and services covered under parts 
                A and B.
                    ``(B) Computation of performance target.--
                            ``(i) In general.--The Secretary shall 
                        establish a performance target for each 
                        qualifying ACO comprised of a base amount 
                        (described in clause (ii)) increased to the 
                        current year by an adjustment factor (described 
                        in clause (iii)). Such a target may be 
                        established on a per capita basis, as the 
                        Secretary determines to be appropriate.
                            ``(ii) Base amount.--For purposes of clause 
                        (i), the base amount in this subparagraph is 
                        equal to the average total payments (or allowed 
                        charges) under parts A and B (and may include 
                        part D, if the Secretary determines 
                        appropriate) for applicable beneficiaries for 
                        whom the qualifying ACO furnishes items and 
                        services in a base period determined by the 
                        Secretary. Such base amount may be determined 
                        on a per capita basis.
                            ``(iii) Adjustment factor.--For purposes of 
                        clause (i), the adjustment factor in this 
                        clause may equal an annual per capita amount 
                        that reflects changes in expenditures from the 
                        period of the base amount to the current year 
                        that would represent an appropriate performance 
                        target for applicable beneficiaries (as 
                        determined by the Secretary). Such adjustment 
                        factor may be determined as an amount or rate, 
                        may be determined on a national, regional, 
                        local, or organization-specific basis, and may 
                        be determined on a per capita basis. Such 
                        adjustment factor also may be adjusted for risk 
                        as determined appropriate by the Secretary.
                            ``(iv) Rebasing.--Under this model the 
                        Secretary shall periodically rebase the base 
                        expenditure amount described in clause (ii).
                    ``(C) Meeting target.--
                            ``(i) In general.--Subject to clause (ii), 
                        a qualifying ACO that meet or exceeds annual 
                        quality and performance targets for a year 
                        shall receive an incentive payment for such 
                        year equal to a portion (as determined 
                        appropriate by the Secretary) of the amount by 
                        which payments under this title for such year 
                        relative are estimated to be below the 
                        performance target for such year, as determined 
                        by the Secretary. The Secretary may establish a 
                        cap on incentive payments for a year for a 
                        qualifying ACO.
                            ``(ii) Limitation.-- The Secretary shall 
                        limit incentive payments to each qualifying ACO 
                        under this paragraph as necessary to ensure 
                        that the aggregate expenditures with respect to 
                        applicable beneficiaries for such ACOs under 
                        this title (inclusive of incentive payments 
                        described in this subparagraph) do not exceed 
                        the amount that the Secretary estimates would 
                        be expended for such ACO for such beneficiaries 
                        if the pilot program under this section were 
                        not implemented.
                    ``(D) Reporting and other requirements.--In 
                carrying out such model, the Secretary may (as the 
                Secretary determines to be appropriate) incorporate 
                reporting requirements, incentive payments, and 
                penalties related to the physician quality reporting 
                initiative (PQRI), electronic prescribing, electronic 
                health records, and other similar initiatives under 
                section 1848, and may use alternative criteria than 
                would otherwise apply under such section for 
                determining whether to make such payments. The 
                incentive payments described in this subparagraph shall 
                not be included in the limit described in subparagraph 
                (C)(ii) or in the performance target model described in 
                this paragraph.
            ``(2) Partial capitation model.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                partial capitation model described in this paragraph 
                (in this paragraph referred to as a `partial capitation 
                model') is a model in which a qualifying ACO would be 
                at financial risk for some, but not all, of the items 
                and services covered under parts A and B, such as at 
                risk for some or all physicians' services or all items 
                and services under part B. The Secretary may limit a 
                partial capitation model to ACOs that are highly 
                integrated systems of care and to ACOs capable of 
                bearing risk, as determined to be appropriate by the 
                Secretary.
                    ``(B) No additional program expenditures.--Payments 
                to a qualifying ACO for applicable beneficiaries for a 
                year under the partial capitation model shall be 
                established in a manner that does not result in 
                spending more for such ACO for such beneficiaries than 
                would otherwise be expended for such ACO for such 
                beneficiaries for such year if the pilot program were 
                not implemented, as estimated by the Secretary.
            ``(3) Other payment models.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may develop other payment models that meet 
                the goals of this pilot program to improve quality and 
                efficiency.
                    ``(B) No additional program expenditures.--
                Subparagraph (B) of paragraph (2) shall apply to a 
                payment model under subparagraph (A) in a similar 
                manner as such subparagraph (B) applies to the payment 
                model under paragraph (2).
    ``(d) Applicable Beneficiaries.--
            ``(1) In general.--In this section, the term `applicable 
        beneficiary' means, with respect to a qualifying ACO, an 
        individual who--
                    ``(A) is enrolled under part B and entitled to 
                benefits under part A;
                    ``(B) is not enrolled in a Medicare Advantage plan 
                under part C or a PACE program under section 1894; and
                    ``(C) meets such other criteria as the Secretary 
                determines appropriate, which may include criteria 
                relating to frequency of contact with physicians in the 
                ACO
            ``(2) Following applicable beneficiaries.--The Secretary 
        may monitor data on expenditures and quality of services under 
        this title after an applicable beneficiary discontinues 
        receiving services under this title through a qualifying ACO.
    ``(e) Implementation.--
            ``(1) Starting date.--The pilot program shall begin no 
        later than January 1, 2012. An agreement with a qualifying ACO 
        under the pilot program may cover a multi-year period of 
        between 3 and 5 years.
            ``(2) Waiver.--The Secretary may waive such provisions of 
        this title (including section 1877) and title XI in the manner 
        the Secretary determines necessary in order implement the pilot 
        program.
            ``(3) Performance results reports.--The Secretary shall 
        report performance results to qualifying ACOs under the pilot 
        program at least annually.
            ``(4) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the elements, parameters, scope, and duration 
                of the pilot program;
                    ``(B) the selection of qualifying ACOs for the 
                pilot program;
                    ``(C) the establishment of targets, measurement of 
                performance, determinations with respect to whether 
                savings have been achieved and the amount of savings;
                    ``(D) determinations regarding whether, to whom, 
                and in what amounts incentive payments are paid; and
                    ``(E) decisions about the extension of the program 
                under subsection (g), expansion of the program under 
                subsection (h) or extensions under subsection (i).
            ``(5) Administration.--Chapter 35 of title 44, United 
        States Code shall not apply to this section.
    ``(f) Evaluation; Monitoring.--
            ``(1) In general.--The Secretary shall evaluate the payment 
        incentive model for each qualifying ACO under the pilot program 
        to assess impacts on beneficiaries, providers of services, 
        suppliers and the program under this title. The Secretary shall 
        make such evaluation publicly available within 60 days of the 
        date of completion of such report.
            ``(2) Monitoring.--The Inspector General of the Department 
        of Health and Human Services shall provide for monitoring of 
        the operation of ACOs under the pilot program with regard to 
        violations of section 1877 (popularly known as the `Stark 
        law').
    ``(g) Extension of Pilot Agreement With Successful Organizations.--
            ``(1) Reports to congress.--Not later than 2 years after 
        the date the first agreement is entered into under this 
        section, and biennially thereafter for six years, the Secretary 
        shall submit to Congress and make publicly available a report 
        on the use of authorities under the pilot program. Each report 
        shall address the impact of the use of those authorities on 
        expenditures, access, and quality under this title.
            ``(2) Extension.--Subject to the report provided under 
        paragraph (1), with respect to a qualifying ACO, the Secretary 
        may extend the duration of the agreement for such ACO under the 
        pilot program as the Secretary determines appropriate if--
                    ``(A) the ACO receives incentive payments with 
                respect to any of the first 4 years of the pilot 
                agreement and is consistently meeting quality standards 
                or
                    ``(B) the ACO is consistently exceeding quality 
                standards and is not increasing spending under the 
                program.
            ``(3) Termination.--The Secretary may terminate an 
        agreement with a qualifying ACO under the pilot program if such 
        ACO did not receive incentive payments or consistently failed 
        to meet quality standards in any of the first 3 years under the 
        program.
    ``(h) Expansion to Additional ACOs.--
            ``(1) Testing and refinement of payment incentive models.--
        Subject to the evaluation described in subsection (f), the 
        Secretary may enter into agreements under the pilot program 
        with additional qualifying ACOs to further test and refine 
        payment incentive models with respect to qualifying ACOs.
            ``(2) Expanding use of successful models to program 
        implementation.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may issue regulations to implement, on a 
                permanent basis, 1 or more models if, and to the extent 
                that, such models are beneficial to the program under 
                this title, as determined by the Secretary.
                    ``(B) Certification.--The Chief Actuary of the 
                Centers for Medicare & Medicaid Services shall certify 
                that 1 or more of such models described in subparagraph 
                (A) would result in estimated spending that would be 
                less than what spending would otherwise be estimated to 
                be in the absence of such expansion.
    ``(i) Treatment of Physician Group Practice Demonstration.--
            ``(1) Extension.--The Secretary may enter in to an 
        agreement with a qualifying ACO under the demonstration under 
        section 1866A, subject to rebasing and other modifications 
        deemed appropriate by the Secretary, until the pilot program 
        under this section is operational.
            ``(2) Transition.--For purposes of extension of an 
        agreement with a qualifying ACO under subsection (g)(2), the 
        Secretary shall treat receipt of an incentive payment for a 
        year by an organization under the physician group practice 
        demonstration pursuant to section 1866A as a year for which an 
        incentive payment is made under such subsection, as long as 
        such practice group practice organization meets the criteria 
        under subsection (b)(2).
    ``(j) Additional Provisions.--
            ``(1) Authority for separate incentive arrangements.--The 
        Secretary may create separate incentive arrangements (including 
        using multiple years of data, varying thresholds, varying 
        shared savings amounts, and varying shared savings limits) for 
        different categories of qualifying ACOs to reflect natural 
        variations in data availability, variation in average annual 
        attributable expenditures, program integrity, and other matters 
        the Secretary deems appropriate.
            ``(2) Encouragement of participation of smaller 
        organizations.--In order to encourage the participation of 
        smaller accountable care organizations under the pilot program, 
        the Secretary may limit a qualifying ACO's exposure to high 
        cost patients under the program.
            ``(3) Involvement in private payer arrangements.--Nothing 
        in this section shall be construed as preventing qualifying 
        ACOs participating in the pilot program from negotiating 
        similar contracts with private payers.
            ``(4) Antidiscrimination limitation.--The Secretary shall 
        not enter into an agreement with an entity to provide health 
        care items or services under the pilot program, or with an 
        entity to administer the program, unless such entity guarantees 
        that it will not deny, limit, or condition the coverage or 
        provision of benefits under the program, for individuals 
        eligible to be enrolled under such program, based on any health 
        status-related factor described in section 2702(a)(1) of the 
        Public Health Service Act.
            ``(5) Construction.--Nothing in this section shall be 
        construed to compel or require an organization to use an 
        organization-specific target growth rate for an accountable 
        care organization under this section for purposes of section 
        1848.
            ``(6) Funding.--For purposes of administering and carrying 
        out the pilot program, other than for payments for items and 
        services furnished under this title and incentive payments 
        under subsection (c)(1), in addition to funds otherwise 
        appropriated, there are appropriated to the Secretary for the 
        Center for Medicare & Medicaid Services Program Management 
        Account $25,000,000 for each of fiscal years 2010 through 2014 
        and $20,000,000 for fiscal year 2015. Amounts appropriated 
        under this paragraph for a fiscal year shall be available until 
        expended.''.

SEC. 1302. MEDICAL HOME PILOT PROGRAM.

    (a) In General.--Title XVIII of the Social Security Act is amended 
by inserting after section 1866E, as inserted by section 1301, the 
following new section:

                      ``medical home pilot program

    ``Sec. 1866F.  (a) Establishment and Medical Home Models.--
            ``(1) Establishment of pilot program.--The Secretary shall 
        establish a medical home pilot program (in this section 
        referred to as the `pilot program') for the purpose of 
        evaluating the feasibility and advisability of reimbursing 
        qualified patient-centered medical homes for furnishing medical 
        home services (as defined under subsection (b)(1)) to high need 
        beneficiaries (as defined in subsection (d)(1)(C)) and to 
        targeted high need beneficiaries (as defined in subsection 
        (c)(1)(C)).
            ``(2) Scope.--Subject to subsection (g), the pilot program 
        shall include urban, rural, and underserved areas.
            ``(3) Models of medical homes in the pilot program.--The 
        pilot program shall evaluate each of the following medical home 
        models:
                    ``(A) Independent patient-centered medical home 
                model.--Independent patient-centered medical home model 
                under subsection (c).
                    ``(B) Community-based medical home model.--
                Community-based medical home model under subsection 
                (d).
            ``(4) Participation of nurse practitioners and physician 
        assistants.--
                    ``(A) Nothing in this section shall be construed as 
                preventing a nurse practitioner from leading a patient 
                centered medical home so long as--
                            ``(i) all the requirements of this section 
                        are met; and
                            ``(ii) the nurse practitioner is acting 
                        consistently with State law.
                    ``(B) Nothing in this section shall be construed as 
                preventing a physician assistant from participating in 
                a patient centered medical home so long as--
                            ``(i) all the requirements of this section 
                        are met; and
                            ``(ii) the physician assistant is acting 
                        consistently with State law.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Patient-centered medical home services.--The term 
        `patient-centered medical home services' means services that--
                    ``(A) provide beneficiaries with direct and ongoing 
                access to a primary care or principal care by a 
                physician or nurse practitioner who accepts 
                responsibility for providing first contact, continuous 
                and comprehensive care to such beneficiary;
                    ``(B) coordinate the care provided to a beneficiary 
                by a team of individuals at the practice level across 
                office, institutional and home settings led by a 
                primary care or principal care physician or nurse 
                practitioner, as needed and appropriate;
                    ``(C) provide for all the patient's health care 
                needs or take responsibility for appropriately 
                arranging care with other qualified providers for all 
                stages of life;
                    ``(D) provide continuous access to care and 
                communication with participating beneficiaries;
                    ``(E) provide support for patient self-management, 
                proactive and regular patient monitoring, support for 
                family caregivers, use patient-centered processes, and 
                coordination with community resources;
                    ``(F) integrate readily accessible, clinically 
                useful information on participating patients that 
                enables the practice to treat such patients 
                comprehensively and systematically; and
                    ``(G) implement evidence-based guidelines and apply 
                such guidelines to the identified needs of 
                beneficiaries over time and with the intensity needed 
                by such beneficiaries.
            ``(2) Primary care.--The term `primary care' means health 
        care that is provided by a physician, nurse practitioner, or 
        physician assistant who practices in the field of family 
        medicine, general internal medicine, geriatric medicine, or 
        pediatric medicine.
            ``(3) Principal care.--The term `principal care' means 
        integrated, accessible health care that is provided by a 
        physician who is a medical subspecialist that addresses the 
        majority of the personal health care needs of patients with 
        chronic conditions requiring the subspecialist's expertise, and 
        for whom the subspecialist assumes care management.
    ``(c) Independent Patient-centered Medical Home Model.--
            ``(1) In general.--
                    ``(A) Payment authority.--Under the independent 
                patient-centered medical home model under this 
                subsection, the Secretary shall make payments for 
                medical home services furnished by an independent 
                patient-centered medical home (as defined in 
                subparagraph (B)) pursuant to paragraph (3)(B) for a 
                targeted high need beneficiaries (as defined in 
                subparagraph (C)).
                    ``(B) Independent patient-centered medical home 
                defined.--In this section, the term `independent 
                patient-centered medical home' means a physician-
                directed or nurse-practitioner-directed practice that 
                is qualified under paragraph (2) as--
                            ``(i) providing beneficiaries with patient-
                        centered medical home services; and
                            ``(ii) meets such other requirements as the 
                        Secretary may specify.
                    ``(C) Targeted high need beneficiary defined.--For 
                purposes of this subsection, the term `targeted high 
                need beneficiary' means a high need beneficiary who, 
                based on a risk score as specified by the Secretary, is 
                generally within the upper 50th percentile of Medicare 
                beneficiaries.
                    ``(D) Beneficiary election to participate.--The 
                Secretary shall determine an appropriate method of 
                ensuring that beneficiaries have agreed to participate 
                in the pilot program.
                    ``(E) Implementation.--The pilot program under this 
                subsection shall begin no later than 6 months after the 
                date of the enactment of this section.
            ``(2) standard setting and qualification process for 
        patient-centered medical homes.--The Secretary shall review 
        alternative models for standard setting and qualification, and 
        shall establish a process--
                    ``(A) to establish standards to enable medical 
                practices to qualify as patient-centered medical homes; 
                and
                    ``(B) to initially provide for the review and 
                certification of medical practices as meeting such 
                standards.
            ``(3)  Payment.--
                    ``(A) Establishment of methodology.--The Secretary 
                shall establish a methodology for the payment for 
                medical home services furnished by independent patient-
                centered medical homes. Under such methodology, the 
                Secretary shall adjust payments to medical homes based 
                on beneficiary risk scores to ensure that higher 
                payments are made for higher risk beneficiaries.
                    ``(B) Per beneficiary per month payments.--Under 
                such payment methodology, the Secretary shall pay 
                independent patient-centered medical homes a monthly 
                fee for each targeted high need beneficiary who 
                consents to receive medical home services through such 
                medical home.
                    ``(C) Prospective payment.--The fee under 
                subparagraph (B) shall be paid on a prospective basis.
                    ``(D) Amount of payment.--In determining the amount 
                of such fee, the Secretary shall consider the 
                following:
                            ``(i) The clinical work and practice 
                        expenses involved in providing the medical home 
                        services provided by the independent patient-
                        centered medical home (such as providing 
                        increased access, care coordination, population 
                        disease management, and teaching self-care 
                        skills for managing chronic illnesses) for 
                        which payment is not made under this title as 
                        of the date of the enactment of this section.
                            ``(ii) Allow for differential payments 
                        based on capabilities of the independent 
                        patient-centered medical home.
                            ``(iii) Use appropriate risk-adjustment in 
                        determining the amount of the per beneficiary 
                        per month payment under this paragraph in a 
                        manner that ensures that higher payments are 
                        made for higher risk beneficiaries.
            ``(4) Encouraging participation of variety of practices.--
        The pilot program under this subsection shall be designed to 
        include the participation of physicians in practices with fewer 
        than 10 full-time equivalent physicians, as well as physicians 
        in larger practices, particularly in underserved and rural 
        areas, as well as federally qualified community health centers, 
        and rural health centers.
            ``(5) No duplication in pilot participation.--A physician 
        in a group practice that participates in the accountable care 
        organization pilot program under section 1866D shall not be 
        eligible to participate in the pilot program under this 
        subsection, unless the pilot program under this section has 
        been implemented on a permanent basis under subsection (e)(3).
    ``(d) Community-based Medical Home Model.--
            ``(1) In general.--
                    ``(A) Authority for payments.--Under the community-
                based medical home model under this subsection (in this 
                section referred to as the `CBMH model'), the Secretary 
                shall make payments for the furnishing of medical home 
                services by a community-based medical home (as defined 
                in subparagraph (B)) pursuant to paragraph (5)(B) for 
                high need beneficiaries.
                    ``(B) Community-based medical home defined.--In 
                this section, the term `community-based medical home' 
                means a nonprofit community-based or State-based 
                organization that is certified under paragraph (2) as 
                meeting the following requirements:
                            ``(i) The organization provides 
                        beneficiaries with medical home services.
                            ``(ii) The organization provides medical 
                        home services under the supervision of and in 
                        close collaboration with the primary care or 
                        principal care physician, nurse practitioner, 
                        or physician assistant designated by the 
                        beneficiary as his or her community-based 
                        medical home provider.
                            ``(iii) The organization employs community 
                        health workers, including nurses or other non-
                        physician practitioners, lay health workers, or 
                        other persons as determined appropriate by the 
                        Secretary, that assist the primary or principal 
                        care physician, nurse practitioner, or 
                        physician assistant in chronic care management 
                        activities such as teaching self-care skills 
                        for managing chronic illnesses, transitional 
                        care services, care plan setting, medication 
                        therapy management services for patients with 
                        multiple chronic diseases, or help 
                        beneficiaries access the health care and 
                        community-based resources in their local 
                        geographic area.
                            ``(iv) The organization meets such other 
                        requirements as the Secretary may specify.
                    ``(C) High need beneficiary.--In this section, the 
                term `high need beneficiary' means an individual who 
                requires regular medical monitoring, advising, or 
                treatment.
            ``(2) Qualification process for community-based medical 
        homes.--The Secretary shall establish a process--
                    ``(A) for the initial qualification of community-
                based or State-based organizations as community-based 
                medical homes; and
                    ``(B) to provide for the review and qualification 
                of such community-based and State-based organizations 
                pursuant to criteria established by the Secretary.
            ``(3) Duration.--The pilot program for community-based 
        medical homes under this subsection shall start no later than 2 
        years after the date of the enactment of this section. Each 
        demonstration site under the pilot program shall operate for a 
        period of up to 5 years after the initial implementation phase, 
        without regard to the receipt of a initial implementation 
        funding under subsection (i).
            ``(4) Preference.--In selecting sites for the CBMH model, 
        the Secretary may give preference to--
                    ``(A) applications from geographic areas that 
                propose to coordinate health care services for 
                chronically ill beneficiaries across a variety of 
                health care settings, such as primary care physician 
                practices with fewer than 10 physicians, specialty 
                physicians, nurse practitioner practices, Federally 
                qualified health centers, rural health clinics, and 
                other settings;
                    ``(B) applications that include other payors that 
                furnish medical home services for chronically ill 
                patients covered by such payors; and
                    ``(C) applications from States that propose to use 
                the medical home model to coordinate health care 
                services for individuals enrolled under this title, 
                individuals enrolled under title XIX, and full-benefit 
                dual eligible individuals (as defined in section 
                1935(c)(6)) with chronic diseases across a variety of 
                health care settings.
            ``(5)  Payments.--
                    ``(A) Establishment of methodology.--The Secretary 
                shall establish a methodology for the payment for 
                medical home services furnished under the CBMH model.
                    ``(B) Per beneficiary per month payments.--Under 
                such payment methodology, the Secretary shall make two 
                separate monthly payments for each high need 
                beneficiary who consents to receive medical home 
                services through such medical home, as follows:
                            ``(i) Payment to community-based 
                        organization.--One monthly payment to a 
                        community-based or State-based organization.
                            ``(ii) Payment to primary or principal care 
                        practice.--One monthly payment to the primary 
                        or principal care practice for such 
                        beneficiary.
                    ``(C) Prospective payment.--The payments under 
                subparagraph (B) shall be paid on a prospective basis.
                    ``(D) Amount of payment.--In determining the amount 
                of such payment, the Secretary shall consider the 
                following:
                            ``(i) The clinical work and practice 
                        expenses involved in providing the medical home 
                        services provided by the community-based 
                        medical home (such as providing increased 
                        access, care coordination, care plan setting, 
                        population disease management, and teaching 
                        self-care skills for managing chronic 
                        illnesses) for which payment is not made under 
                        this title as of the date of the enactment of 
                        this section.
                            ``(ii) Use appropriate risk-adjustment in 
                        determining the amount of the per beneficiary 
                        per month payment under this paragraph.
            ``(6) Initial implementation funding.--The Secretary may 
        make available initial implementation funding to a community 
        based or State-based organization or a State that is 
        participating in the pilot program under this subsection. Such 
        organization shall provide the Secretary with a detailed 
        implementation plan that includes how such funds will be used.
    ``(e) Expansion of Program.--
            ``(1) Evaluation of cost and quality.--The Secretary shall 
        evaluate the pilot program to determine--
                    ``(A) the extent to which medical homes result in--
                            ``(i) improvement in the quality and 
                        coordination of health care services, 
                        particularly with regard to the care of complex 
                        patients;
                            ``(ii) improvement in reducing health 
                        disparities;
                            ``(iii) reductions in preventable 
                        hospitalizations;
                            ``(iv) prevention of readmissions;
                            ``(v) reductions in emergency room visits;
                            ``(vi) improvement in health outcomes, 
                        including patient functional status where 
                        applicable;
                            ``(vii) improvement in patient 
                        satisfaction;
                            ``(viii) improved efficiency of care such 
                        as reducing duplicative diagnostic tests and 
                        laboratory tests; and
                            ``(ix) reductions in health care 
                        expenditures; and
                    ``(B) the feasability and advisability of 
                reimbursing medical homes for medical home services 
                under this title on a permanent basis.
            ``(2) Report.--Not later than 60 days after the date of 
        completion of the evaluation under paragraph (1), the Secretary 
        shall submit to Congress and make available to the public a 
        report on the findings of the evaluation under paragraph (1).
            ``(3) Expansion of program.--
                    ``(A) In general.--Subject to the results of the 
                evaluation under paragraph (1) and subparagraph (B), 
                the Secretary may issue regulations to implement, on a 
                permanent basis, one or more models, if, and to the 
                extent that such model or models, are beneficial to the 
                program under this title, including that such 
                implementation will improve quality of care, as 
                determined by the Secretary.
                    ``(B) Certification requirement.--The Secretary may 
                not issue such regulations unless the Chief Actuary of 
                the Centers for Medicare & Medicaid Services certifies 
                that the expansion of the components of the pilot 
                program described in subparagraph (A) would result in 
                estimated spending under this title that would be no 
                more than the level of spending that the Secretary 
                estimates would otherwise be spent under this title in 
                the absence of such expansion.
    ``(f) Administrative Provisions.--
            ``(1) No duplication in payments.--During any month, the 
        Secretary may not make payments under this section under more 
        than one model or through more than one medical home under any 
        model for the furnishing of medical home services to an 
        individual.
            ``(2) No effect on payment for evaluation and management 
        services.--Payments made under this section are in addition to, 
        and have no effect on the amount of, payment for evaluation and 
        management services made under this title
            ``(3) Administration.--Chapter 35 of title 44, United 
        States Code shall not apply to this section.
    ``(g) Funding.--
            ``(1) Operational costs.--For purposes of administering and 
        carrying out the pilot program (including the design, 
        implementation, technical assistance for and evaluation of such 
        program), in addition to funds otherwise available, there shall 
        be transferred from the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 to the Secretary for the Centers 
        for Medicare & Medicaid Services Program Management Account 
        $6,000,000 for each of fiscal years 2010 through 2014. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            ``(2) Patient-centered medical home services.--In addition 
        to funds otherwise available, there shall be available to the 
        Secretary for the Centers for Medicare & Medicaid Services, 
        from the Federal Supplementary Medical Insurance Trust Fund 
        under section 1841--
                    ``(A) $200,000,000 for each of fiscal years 2010 
                through 2014 for payments for medical home services 
                under subsection (c)(3); and
                    ``(B) $125,000,000 for each of fiscal years 2012 
                through 2016, for payments under subsection (d)(5).
        Amounts available under this paragraph for a fiscal year shall 
        be available until expended.
            ``(3) Initial implementation.--In addition to funds 
        otherwise available, there shall be available to the Secretary 
        for the Centers for Medicare & Medicaid Services, from the 
        Federal Supplementary Medical Insurance Trust Fund under 
        section 1841, $2,500,000 for each of fiscal years 2010 through 
        2012, under subsection (d)(6). Amounts available under this 
        paragraph for a fiscal year shall be available until expended.
    ``(h) Treatment of TRHCA Medicare Medical Home Demonstration 
Funding.--
            ``(1) In addition to funds otherwise available for payment 
        of medical home services under subsection (c)(3), there shall 
        also be available the amount provided in subsection (g) of 
        section 204 of division B of the Tax Relief and Health Care Act 
        of 2006 (42 U.S.C. 1395b-1 note).
            ``(2) Notwithstanding section 1302(c) of the America's 
        Affordable Health Choices Act of 2009, in addition to funds 
        provided in paragraph (1) and subsection (g)(2)(A), the funding 
        for medical home services that would otherwise have been 
        available if such section 204 medical home demonstration had 
        been implemented (without regard to subsection (g) of such 
        section) shall be available to the independent patient-centered 
        medical home model described in subsection (c).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after the date of the enactment of this 
Act.
    (c) Conforming Repeal.--Section 204 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395b-1 note), as amended by 
section 133(a)(2) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275), is repealed.

SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY CARE SERVICES.

    (a) In General.--Section 1833 of the Social Security Act is amended 
by inserting after subsection (o) the following new subsection:
    ``(p) Primary Care Payment Incentives.--
            ``(1) In general.--In the case of primary care services (as 
        defined in paragraph (2)) furnished on or after January 1, 
        2011, by a primary care practitioner (as defined in paragraph 
        (3)) for which amounts are payable under section 1848, in 
        addition to the amount otherwise paid under this part there 
        shall also be paid to the practitioner (or to an employer or 
        facility in the cases described in clause (A) of section 
        1842(b)(6)) (on a monthly or quarterly basis) from the Federal 
        Supplementary Medical Insurance Trust Fund an amount equal 5 
        percent (or 10 percent if the practitioner predominately 
        furnishes such services in an area that is designated (under 
        section 332(a)(1)(A) of the Public Health Service Act) as a 
        primary care health professional shortage area.
            ``(2) Primary care services defined.--In this subsection, 
        the term `primary care services'--
                    ``(A) means services which are evaluation and 
                management services as defined in section 
                1848(j)(5)(A); and
                    ``(B) includes services furnished by another health 
                care professional that would be described in 
                subparagraph (A) if furnished by a physician.
            ``(3) Primary care practitioner defined.--In this 
        subsection, the term `primary care practitioner'--
                    ``(A) means a physician or other health care 
                practitioner (including a nurse practitioner) who--
                            ``(i) specializes in family medicine, 
                        general internal medicine, general pediatrics, 
                        geriatrics, or obstetrics and gynecology; and
                            ``(ii) has allowed charges for primary care 
                        services that account for at least 50 percent 
                        of the physician's or practitioner's total 
                        allowed charges under section 1848, as 
                        determined by the Secretary for the most recent 
                        period for which data are available; and
                    ``(B) includes a physician assistant who is under 
                the supervision of a physician described in 
                subparagraph (A).
            ``(4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise, respecting--
                    ``(A) any determination or designation under this 
                subsection;
                    ``(B) the identification of services as primary 
                care services under this subsection; and
                    ``(C) the identification of a practitioner as a 
                primary care practitioner under this subsection.
            ``(5) Coordination with other payments.--
                    ``(A) With other primary care incentives.--The 
                provisions of this subsection shall not be taken into 
                account in applying subsections (m) and (u) and any 
                payment under such subsections shall not be taken into 
                account in computing payments under this subsection.
                    ``(B) With quality incentives.--Payments under this 
                subsection shall not be taken into account in 
                determining the amounts that would otherwise be paid 
                under this part for purposes of section 
                1834(g)(2)(B).''.
    (b) Conforming Amendments.--
            (1) Section 1833(m) of such Act (42 U.S.C. 1395l(m)) is 
        amended by redesignating paragraph (4) as paragraph (5) and by 
        inserting after paragraph (3) the following new paragraph:
    ``(4) The provisions of this subsection shall not be taken into 
account in applying subsections (m) or (u) and any payment under such 
subsections shall not be taken into account in computing payments under 
this subsection.''.
            (2) Section 1848(m)(5)(B) of such Act (42 U.S.C. 1395w-
        4(m)(5)(B)) is amended by inserting ``, (p),'' after ``(m)''.
            (3) Section 1848(o)(1)(B)(iv) of such Act (42 U.S.C. 1395w-
        4(o)(1)(B)(iv)) is amended by inserting ``primary care'' before 
        ``health professional shortage area''.

SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CERTIFIED NURSE-MIDWIVES.

    (a) In General.--Section 1833(a)(1)(K) of the Social Security Act 
(42 U.S.C.1395l(a)(1)(K)) is amended by striking ``(but in no event'' 
and all that follows through ``performed by a physician)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2011.

SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR PREVENTIVE SERVICES.

    (a) Medicare Covered Preventive Services Defined.--Section 1861 of 
the Social Security Act (42 U.S.C. 1395x), as amended by section 
1233(a)(1)(B), is amended by adding at the end the following new 
subsection:

                 ``Medicare Covered Preventive Services

    ``(iii)(1) Subject to the succeeding provisions of this subsection, 
the term `Medicare covered preventive services' means the following:
            ``(A) Prostate cancer screening tests (as defined in 
        subsection (oo)).
            ``(B) Colorectal cancer screening tests (as defined in 
        subsection (pp).
            ``(C) Diabetes outpatient self-management training services 
        (as defined in subsection (qq)).
            ``(D) Screening for glaucoma for certain individuals (as 
        described in subsection (s)(2)(U)).
            ``(E) Medical nutrition therapy services for certain 
        individuals (as described in subsection (s)(2)(V)).
            ``(F) An initial preventive physical examination (as 
        defined in subsection (ww)).
            ``(G) Cardiovascular screening blood tests (as defined in 
        subsection (xx)(1)).
            ``(H) Diabetes screening tests (as defined in subsection 
        (yy)).
            ``(I) Ultrasound screening for abdominal aortic aneurysm 
        for certain individuals (as described in subsection 
        (s)(2)(AA)).
            ``(J) Pneumococcal and influenza vaccines and their 
        administration (as described in subsection (s)(10)(A)) and 
        hepatitis B vaccine and its administration for certain 
        individuals (as described in subsection (s)(10)(B)).
            ``(K) Screening mammography (as defined in subsection 
        (jj)).
            ``(L) Screening pap smear and screening pelvic exam (as 
        defined in subsection (nn)).
            ``(M) Bone mass measurement (as defined in subsection 
        (rr)).
            ``(N) Kidney disease education services (as defined in 
        subsection (ggg)).
            ``(O) Additional preventive services (as defined in 
        subsection (ddd)).
    ``(2) With respect to specific Medicare covered preventive 
services, the limitations and conditions described in the provisions 
referenced in paragraph (1) with respect to such services shall 
apply.''.
    (b) Payment and Elimination of Cost-sharing.--
            (1) In general.--
                    (A) In general.--Section 1833(a) of the Social 
                Security Act (42 U.S.C. 1395l(a)) is amended by adding 
                after and below paragraph (9) the following:
``With respect to Medicare covered preventive services, in any case in 
which the payment rate otherwise provided under this part is computed 
as a percent of less than 100 percent of an actual charge, fee schedule 
rate, or other rate, such percentage shall be increased to 100 
percent.''.
                    (B) Application to sigmoidoscopies and 
                colonoscopies.--Section 1834(d) of such Act (42 U.S.C. 
                1395m(d)) is amended--
                            (i) in paragraph (2)(C), by amending clause 
                        (ii) to read as follows:
                            ``(ii) No coinsurance.--In the case of a 
                        beneficiary who receives services described in 
                        clause (i), there shall be no coinsurance 
                        applied.''; and
                            (ii) in paragraph (3)(C), by amending 
                        clause (ii) to read as follows:
                            ``(ii) No coinsurance.--In the case of a 
                        beneficiary who receives services described in 
                        clause (i), there shall be no coinsurance 
                        applied.''.
            (2) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``screening 
                mammography (as defined in section 1861(jj)) and 
                diagnostic mammography'' and inserting ``diagnostic 
                mammograms and Medicare covered preventive services (as 
                defined in section 1861(iii)(1))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                            (i) in subparagraph (F), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (G), by adding ``and'' 
                        at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(H) with respect to additional preventive 
                services (as defined in section 1861(ddd)) furnished by 
                an outpatient department of a hospital, the amount 
                determined under paragraph (1)(W);''.
            (3) Waiver of application of deductible for all preventive 
        services.--The first sentence of section 1833(b) of the Social 
        Security Act (42 U.S.C. 1395l(b)) is amended--
                    (A) in clause (1), by striking ``items and services 
                described in section 1861(s)(10)(A)'' and inserting 
                ``Medicare covered preventive services (as defined in 
                section 1861(iii))'';
                    (B) by inserting ``and'' before ``(4)''; and
                    (C) by striking clauses (5) through (8).
            (4) Application to providers of services.--Section 
        1866(a)(2)(A)(ii) of such Act (42 U.S.C. 1395cc(a)(2)(A)(ii)) 
        is amended by inserting ``other than for Medicare covered 
        preventive services and'' after ``for such items and services 
        (''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2011.

SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL CANCER SCREENING TESTS 
              REGARDLESS OF CODING, SUBSEQUENT DIAGNOSIS, OR ANCILLARY 
              TISSUE REMOVAL.

    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l(b)), as amended by section 1305(b), is further amended--
            (1) in subsection (a), in the sentence added by section 
        1305(b)(1)(A), by inserting ``(including services described in 
        the last sentence of section 1833(b))'' after ``preventive 
        services''; and
            (2) in subsection (b), by adding at the end the following 
        new sentence: ``Clause (1) of the first sentence of this 
        subsection shall apply with respect to a colorectal cancer 
        screening test regardless of the code that is billed for the 
        establishment of a diagnosis as a result of the test, or for 
        the removal of tissue or other matter or other procedure that 
        is furnished in connection with, as a result of, and in the 
        same clinical encounter as, the screening test.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERVICES FROM COVERAGE 
              UNDER THE MEDICARE SKILLED NURSING FACILITY PROSPECTIVE 
              PAYMENT SYSTEM AND CONSOLIDATED PAYMENT.

    (a) In General.--Section 1888(e)(2)(A)(ii) of the Social Security 
Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``clinical 
social worker services,'' after ``qualified psychologist services,''.
    (b) Conforming Amendment.--Section 1861(hh)(2) of the Social 
Security Act (42 U.S.C. 1395x(hh)(2)) is amended by striking ``and 
other than services furnished to an inpatient of a skilled nursing 
facility which the facility is required to provide as a requirement for 
participation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after July 1, 2010.

SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND 
              MENTAL HEALTH COUNSELOR SERVICES.

    (a) Coverage of Marriage and Family Therapist Services.--
            (1) Coverage of services.--Section 1861(s)(2) of the Social 
        Security Act (42 U.S.C. 1395x(s)(2)), as amended by section 
        1235, is amended--
                    (A) in subparagraph (EE), by striking ``and'' at 
                the end;
                    (B) in subparagraph (FF), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(GG) marriage and family therapist services (as 
                defined in subsection (jjj));''.
            (2) Definition.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x), as amended by sections 1233 and 1305, is 
        amended by adding at the end the following new subsection:

                ``Marriage and Family Therapist Services

    ``(jjj)(1) The term `marriage and family therapist services' means 
services performed by a marriage and family therapist (as defined in 
paragraph (2)) for the diagnosis and treatment of mental illnesses, 
which the marriage and family therapist is legally authorized to 
perform under State law (or the State regulatory mechanism provided by 
State law) of the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as incident to a 
physician's professional service, but only if no facility or other 
provider charges or is paid any amounts with respect to the furnishing 
of such services.
    ``(2) The term `marriage and family therapist' means an individual 
who--
            ``(A) possesses a master's or doctoral degree which 
        qualifies for licensure or certification as a marriage and 
        family therapist pursuant to State law;
            ``(B) after obtaining such degree has performed at least 2 
        years of clinical supervised experience in marriage and family 
        therapy; and
            ``(C) is licensed or certified as a marriage and family 
        therapist in the State in which marriage and family therapist 
        services are performed.''.
            (3) Provision for payment under part b.--Section 
        1832(a)(2)(B) of the Social Security Act (42 U.S.C. 
        1395k(a)(2)(B)) is amended by adding at the end the following 
        new clause:
                            ``(v) marriage and family therapist 
                        services;''.
            (4) Amount of payment.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                            (i) by striking ``and'' before ``(W)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (X) with respect 
                        to marriage and family therapist services under 
                        section 1861(s)(2)(GG), the amounts paid shall 
                        be 80 percent of the lesser of the actual 
                        charge for the services or 75 percent of the 
                        amount determined for payment of a psychologist 
                        under clause (L)''.
                    (B) Development of criteria with respect to 
                consultation with a health care professional.--The 
                Secretary of Health and Human Services shall, taking 
                into consideration concerns for patient 
                confidentiality, develop criteria with respect to 
                payment for marriage and family therapist services for 
                which payment may be made directly to the marriage and 
                family therapist under part B of title XVIII of the 
                Social Security Act (42 U.S.C. 1395j et seq.) under 
                which such a therapist must agree to consult with a 
                patient's attending or primary care physician or nurse 
                practitioner in accordance with such criteria.
            (5) Exclusion of marriage and family therapist services 
        from skilled nursing facility prospective payment system.--
        Section 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
        1395yy(e)(2)(A)(ii)), as amended by section 1307(a), is amended 
        by inserting ``marriage and family therapist services (as 
        defined in subsection (jjj)(1)),'' after ``clinical social 
        worker services,''.
            (6) Coverage of marriage and family therapist services 
        provided in rural health clinics and federally qualified health 
        centers.--Section 1861(aa)(1)(B) of the Social Security Act (42 
        U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a 
        clinical social worker (as defined in subsection (hh)(1)),'' 
        and inserting ``, by a clinical social worker (as defined in 
        subsection (hh)(1)), or by a marriage and family therapist (as 
        defined in subsection (jjj)(2)),''.
            (7) Inclusion of marriage and family therapists as 
        practitioners for assignment of claims.--Section 1842(b)(18)(C) 
        of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)) is 
        amended by adding at the end the following new clause:
            ``(vii) A marriage and family therapist (as defined in 
        section 1861(jjj)(2)).''.
    (b) Coverage of Mental Health Counselor Services.--
            (1) Coverage of services.--Section 1861(s)(2) of the Social 
        Security Act (42 U.S.C. 1395x(s)(2)), as previously amended, is 
        further amended--
                    (A) in subparagraph (FF), by striking ``and'' at 
                the end;
                    (B) in subparagraph (GG), by inserting ``and'' at 
                the end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(HH) mental health counselor services (as defined in 
        subsection (kkk)(1));''.
            (2) Definition.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x), as previously amended, is amended by adding 
        at the end the following new subsection:

                   ``Mental Health Counselor Services

    ``(kkk)(1) The term `mental health counselor services' means 
services performed by a mental health counselor (as defined in 
paragraph (2)) for the diagnosis and treatment of mental illnesses 
which the mental health counselor is legally authorized to perform 
under State law (or the State regulatory mechanism provided by the 
State law) of the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as incident to a 
physician's professional service, but only if no facility or other 
provider charges or is paid any amounts with respect to the furnishing 
of such services.
    ``(2) The term `mental health counselor' means an individual who--
            ``(A) possesses a master's or doctor's degree which 
        qualifies the individual for licensure or certification for the 
        practice of mental health counseling in the State in which the 
        services are performed;
            ``(B) after obtaining such a degree has performed at least 
        2 years of supervised mental health counselor practice; and
            ``(C) is licensed or certified as a mental health counselor 
        or professional counselor by the State in which the services 
        are performed.''.
            (3) Provision for payment under part b.--Section 
        1832(a)(2)(B) of the Social Security Act (42 U.S.C. 
        1395k(a)(2)(B)), as amended by subsection (a)(3), is further 
        amended--
                    (A) by striking ``and'' at the end of clause (iv);
                    (B) by adding ``and'' at the end of clause (v); and
                    (C) by adding at the end the following new clause:
                            ``(vi) mental health counselor services;''.
            (4) Amount of payment.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                subsection (a), is further amended--
                            (i) by striking ``and'' before ``(X)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (Y), with 
                        respect to mental health counselor services 
                        under section 1861(s)(2)(HH), the amounts paid 
                        shall be 80 percent of the lesser of the actual 
                        charge for the services or 75 percent of the 
                        amount determined for payment of a psychologist 
                        under clause (L)''.
                    (B) Development of criteria with respect to 
                consultation with a physician.--The Secretary of Health 
                and Human Services shall, taking into consideration 
                concerns for patient confidentiality, develop criteria 
                with respect to payment for mental health counselor 
                services for which payment may be made directly to the 
                mental health counselor under part B of title XVIII of 
                the Social Security Act (42 U.S.C. 1395j et seq.) under 
                which such a counselor must agree to consult with a 
                patient's attending or primary care physician in 
                accordance with such criteria.
            (5) Exclusion of mental health counselor services from 
        skilled nursing facility prospective payment system.--Section 
        1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
        1395yy(e)(2)(A)(ii)), as amended by section 1307(a) and 
        subsection (a), is amended by inserting ``mental health 
        counselor services (as defined in section 1861(kkk)(1)),'' 
        after ``marriage and family therapist services (as defined in 
        subsection (jjj)(1)),''.
            (6) Coverage of mental health counselor services provided 
        in rural health clinics and federally qualified health 
        centers.--Section 1861(aa)(1)(B) of the Social Security Act (42 
        U.S.C. 1395x(aa)(1)(B)), as amended by subsection (a), is 
        amended by striking ``or by a marriage and family therapist (as 
        defined in subsection (jjj)(2)),'' and inserting ``by a 
        marriage and family therapist (as defined in subsection 
        (jjj)(2)), or a mental health counselor (as defined in 
        subsection (kkk)(2)),''.
            (7) Inclusion of mental health counselors as practitioners 
        for assignment of claims.--Section 1842(b)(18)(C) of the Social 
        Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by 
        subsection (a)(7), is amended by adding at the end the 
        following new clause:
            ``(viii) A mental health counselor (as defined in section 
        1861(kkk)(2)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2011''.

SEC. 1310. EXPANDING ACCESS TO VACCINES.

    (a) In General.--Paragraph (10) of section 1861(s) of the Social 
Security Act (42 U.S.C. 1395w(s)) is amended to read as follows:
            ``(10) federally recommended vaccines (as defined in 
        subsection (lll)) and their respective administration;''.
    (b) Federally Recommended Vaccines Defined.--Section 1861 of such 
Act is further amended by adding at the end the following new 
subsection:

                    ``Federally Recommended Vaccines

    ``(lll) The term `federally recommended vaccine' means an approved 
vaccine recommended by the Advisory Committee on Immunization Practices 
(an advisory committee established by the Secretary, acting through the 
Director of the Centers for Disease Control and Prevention).''.
    (c) Conforming Amendments.--
            (1) Section 1833 of such Act (42 U.S.C. 1395l) is amended, 
        in each of subsections (a)(1)(B), (a)(2)(G), and (a)(3)(A), by 
        striking ``1861(s)(10)(A)'' and inserting ``1861(s)(10)'' each 
        place it appears.
            (2) Section 1842(o)(1)(A)(iv) of such Act (42 U.S.C. 
        1395u(o)(1)(A)(iv)) is amended--
                    (A) by striking ``subparagraph (A) or (B) of''; and
                    (B) by inserting before the period the following: 
                ``and before January 1, 2011, and influenza vaccines 
                furnished on or after January 1, 2011''.
            (3) Section 1847A(c)(6) of such Act (42 U.S.C. 1395w-
        3a(c)(6)) is amended by striking subparagraph (G) and inserting 
        the following:
                    ``(G) Implementation.--Chapter 35 of title 44, 
                United States Code shall not apply to manufacturer 
                provision of information pursuant to section 
                1927(b)(3)(A)(iii) for purposes of implementation of 
                this section.''.
            (4) Section 1860D-2(e)(1) of such Act (42 U.S.C. 1395w-
        102(e)(1)) is amended by striking ``such term includes a 
        vaccine'' and all that follows through ``its administration) 
        and''.
            (5) Section 1861(ww)(2)(A) of such Act (42 U.S.C. 
        1395x(ww)(2)(A))) is amended by striking ``Pneumococcal, 
        influenza, and hepatitis B vaccine and administration'' and 
        inserting ``Federally recommended vaccines (as defined in 
        subsection (lll)) and their respective administration''.
            (6) Section 1861(iii)(1) of such Act, as added by section 
        1305(a), is amended by amending subparagraph (J) to read as 
        follows:
            ``(J) Federally recommended vaccines (as defined in 
        subsection (lll)) and their respective administration.''.
            (7) Section 1927(b)(3)(A)(iii) of such Act (42 U.S.C. 
        1396r-8(b)(3)(A)(iii)) is amended, in the matter following 
        subclause (III), by inserting ``(A)(iv) (including influenza 
        vaccines furnished on or after January 1, 2011),'' after 
        ``described in subparagraph''
    (d) Effective Dates.--The amendments made by--
            (1) this section (other than by subsection (c)(7)) shall 
        apply to vaccines administered on or after January 1, 2011; and
            (2) by subsection (c)(7) shall apply to calendar quarters 
        beginning on or after January 1, 2010.

SEC. 1311. EXPANSION OF MEDICARE-COVERED PREVENTIVE SERVICES AT 
              FEDERALLY QUALIFIED HEALTH CENTERS.

     Section 1861(aa)(3)(A) of the Social Security Act (42 U.S.C. 1395w 
(aa)(3)(A)) is amended to read as follows:               
                    ``(A) services of the type described subparagraphs 
                (A) through (C) of paragraph (1) and services described 
                in section 1861(iii); and''.

                           TITLE IV--QUALITY

             Subtitle A--Comparative Effectiveness Research

SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.

    (a) In General.--Title XI of the Social Security Act is amended by 
adding at the end the following new part:

              ``Part D--Comparative Effectiveness Research

                  ``comparative effectiveness research

    ``Sec. 1181.  (a) Center for Comparative Effectiveness Research 
Established.--
            ``(1) In general.--The Secretary shall establish within the 
        Agency for Healthcare Research and Quality a Center for 
        Comparative Effectiveness Research (in this section referred to 
        as the `Center') to conduct, support, and synthesize research 
        (including research conducted or supported under section 1013 
        of the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003) with respect to the outcomes, 
        effectiveness, and appropriateness of health care services and 
        procedures in order to identify the manner in which diseases, 
        disorders, and other health conditions can most effectively and 
        appropriately be prevented, diagnosed, treated, and managed 
        clinically.
            ``(2) Duties.--The Center shall--
                    ``(A) conduct, support, and synthesize research 
                relevant to the comparative effectiveness of the full 
                spectrum of health care items, services and systems, 
                including pharmaceuticals, medical devices, medical and 
                surgical procedures, and other medical interventions;
                    ``(B) conduct and support systematic reviews of 
                clinical research, including original research 
                conducted subsequent to the date of the enactment of 
                this section;
                    ``(C) continuously develop rigorous scientific 
                methodologies for conducting comparative effectiveness 
                studies, and use such methodologies appropriately;
                    ``(D) submit to the Comparative Effectiveness 
                Research Commission, the Secretary, and Congress 
                appropriate relevant reports described in subsection 
                (d)(2); and
                    ``(E) encourage, as appropriate, the development 
                and use of clinical registries and the development of 
                clinical effectiveness research data networks from 
                electronic health records, post marketing drug and 
                medical device surveillance efforts, and other forms of 
                electronic health data.
            ``(3) Powers.--
                    ``(A) Obtaining official data.--The Center may 
                secure directly from any department or agency of the 
                United States information necessary to enable it to 
                carry out this section. Upon request of the Center, the 
                head of that department or agency shall furnish that 
                information to the Center on an agreed upon schedule.
                    ``(B) Data collection.--In order to carry out its 
                functions, the Center shall--
                            ``(i) utilize existing information, both 
                        published and unpublished, where possible, 
                        collected and assessed either by its own staff 
                        or under other arrangements made in accordance 
                        with this section,
                            ``(ii) carry out, or award grants or 
                        contracts for, original research and 
                        experimentation, where existing information is 
                        inadequate, and
                            ``(iii) adopt procedures allowing any 
                        interested party to submit information for the 
                        use by the Center and Commission under 
                        subsection (b) in making reports and 
                        recommendations.
                    ``(C) Access of gao to information.--The 
                Comptroller General shall have unrestricted access to 
                all deliberations, records, and nonproprietary data of 
                the Center and Commission under subsection (b), 
                immediately upon request.
                    ``(D) Periodic audit.--The Center and Commission 
                under subsection (b) shall be subject to periodic audit 
                by the Comptroller General.
    ``(b) Oversight by Comparative Effectiveness Research Commission.--
            ``(1) In general.--The Secretary shall establish an 
        independent Comparative Effectiveness Research Commission (in 
        this section referred to as the `Commission') to oversee and 
        evaluate the activities carried out by the Center under 
        subsection (a), subject to the authority of the Secretary, to 
        ensure such activities result in highly credible research and 
        information resulting from such research.
            ``(2) Duties.--The Commission shall--
                    ``(A) determine national priorities for research 
                described in subsection (a) and in making such 
                determinations consult with a broad array of public and 
                private stakeholders, including patients and health 
                care providers and payers;
                    ``(B) monitor the appropriateness of use of the 
                CERTF described in subsection (g) with respect to the 
                timely production of comparative effectiveness research 
                determined to be a national priority under subparagraph 
                (A);
                    ``(C) identify highly credible research methods and 
                standards of evidence for such research to be 
                considered by the Center;
                    ``(D) review the methodologies developed by the 
                center under subsection (a)(2)(C);
                    ``(E) not later than one year after the date of the 
                enactment of this section, enter into an arrangement 
                under which the Institute of Medicine of the National 
                Academy of Sciences shall conduct an evaluation and 
                report on standards of evidence for such research;
                    ``(F) support forums to increase stakeholder 
                awareness and permit stakeholder feedback on the 
                efforts of the Center to advance methods and standards 
                that promote highly credible research;
                    ``(G) make recommendations for policies that would 
                allow for public access of data produced under this 
                section, in accordance with appropriate privacy and 
                proprietary practices, while ensuring that the 
                information produced through such data is timely and 
                credible;
                    ``(H) appoint a clinical perspective advisory panel 
                for each research priority determined under 
                subparagraph (A), which shall consult with patients and 
                advise the Center on research questions, methods, and 
                evidence gaps in terms of clinical outcomes for the 
                specific research inquiry to be examined with respect 
                to such priority to ensure that the information 
                produced from such research is clinically relevant to 
                decisions made by clinicians and patients at the point 
                of care;
                    ``(I) make recommendations for the priority for 
                periodic reviews of previous comparative effectiveness 
                research and studies conducted by the Center under 
                subsection (a);
                    ``(J) routinely review processes of the Center with 
                respect to such research to confirm that the 
                information produced by such research is objective, 
                credible, consistent with standards of evidence 
                established under this section, and developed through a 
                transparent process that includes consultations with 
                appropriate stakeholders; and
                    ``(K) make recommendations to the center for the 
                broad dissemination of the findings of research 
                conducted and supported under this section that enables 
                clinicians, patients, consumers, and payers to make 
                more informed health care decisions that improve 
                quality and value.
            ``(3) Composition of commission.--
                    ``(A) In general.--The members of the Commission 
                shall consist of--
                            ``(i) the Director of the Agency for 
                        Healthcare Research and Quality;
                            ``(ii) the Chief Medical Officer of the 
                        Centers for Medicare & Medicaid Services; and
                            ``(iii) 15 additional members who shall 
                        represent broad constituencies of stakeholders 
                        including clinicians, patients, researchers, 
                        third-party payers, consumers of Federal and 
                        State beneficiary programs.
                Of such members, at least 9 shall be practicing 
                physicians, health care practitioners, consumers, or 
                patients.
                    ``(B) Qualifications.--
                            ``(i) Diverse representation of 
                        perspectives.--The members of the Commission 
                        shall represent a broad range of perspectives 
                        and shall collectively have experience in the 
                        following areas:
                                    ``(I) Epidemiology.
                                    ``(II) Health services research.
                                    ``(III) Bioethics.
                                    ``(IV) Decision sciences.
                                    ``(V) Health disparities.
                                    ``(VI) Economics.
                            ``(ii) Diverse representation of health 
                        care community.--At least one member shall 
                        represent each of the following health care 
                        communities:
                                    ``(I) Patients.
                                    ``(II) Health care consumers.
                                    ``(III) Practicing Physicians, 
                                including surgeons.
                                    ``(IV) Other health care 
                                practitioners engaged in clinical care.
                                    ``(V) Employers.
                                    ``(VI) Public payers.
                                    ``(VII) Insurance plans.
                                    ``(VIII) Clinical researchers who 
                                conduct research on behalf of 
                                pharmaceutical or device manufacturers.
                    ``(C) Limitation.--No more than 3 of the Members of 
                the Commission may be representatives of pharmaceutical 
                or device manufacturers and such representatives shall 
                be clinical researchers described under subparagraph 
                (B)(ii)(VIII).
            ``(4) Appointment.--
                    ``(A) In general.--The Secretary shall appoint the 
                members of the Commission.
                    ``(B) Consultation.--In considering candidates for 
                appointment to the Commission, the Secretary may 
                consult with the Government Accountability Office and 
                the Institute of Medicine of the National Academy of 
                Sciences.
            ``(5) Chairman; vice chairman.--The Secretary shall 
        designate a member of the Commission, at the time of 
        appointment of the member, as Chairman and a member as Vice 
        Chairman for that term of appointment, except that in the case 
        of vacancy of the Chairmanship or Vice Chairmanship, the 
        Secretary may designate another member for the remainder of 
        that member's term. The Chairman shall serve as an ex officio 
        member of the National Advisory Council of the Agency for 
        Health Care Research and Quality under section 931(c)(3)(B) of 
        the Public Health Service Act.
            ``(6) Terms.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each member of the Commission shall 
                be appointed for a term of 4 years.
                    ``(B) Terms of initial appointees.--Of the members 
                first appointed--
                            ``(i) 8 shall be appointed for a term of 4 
                        years; and
                            ``(ii) 7 shall be appointed for a term of 3 
                        years.
            ``(7) Coordination.--To enhance effectiveness and 
        coordination, the Secretary is encouraged, to the greatest 
        extent possible, to seek coordination between the Commission 
        and the National Advisory Council of the Agency for Healthcare 
        Research and Quality.
            ``(8) Conflicts of interest.--
                    ``(A) In general.--In appointing the members of the 
                Commission or a clinical perspective advisory panel 
                described in paragraph (2)(H), the Secretary or the 
                Commission, respectively, shall take into consideration 
                any financial interest (as defined in subparagraph 
                (D)), consistent with this paragraph, and develop a 
                plan for managing any identified conflicts.
                    ``(B) Evaluation and criteria.--When considering an 
                appointment to the Commission or a clinical perspective 
                advisory panel described paragraph (2)(H) the Secretary 
                or the Commission shall review the expertise of the 
                individual and the financial disclosure report filed by 
                the individual pursuant to the Ethics in Government Act 
                of 1978 for each individual under consideration for the 
                appointment, so as to reduce the likelihood that an 
                appointed individual will later require a written 
                determination as referred to in section 208(b)(1) of 
                title 18, United States Code, a written certification 
                as referred to in section 208(b)(3) of title 18, United 
                States Code, or a waiver as referred to in subparagraph 
                (D)(iii) for service on the Commission at a meeting of 
                the Commission.
                    ``(C) Disclosures; prohibitions on participation; 
                waivers.--
                            ``(i) Disclosure of financial interest.--
                        Prior to a meeting of the Commission or a 
                        clinical perspective advisory panel described 
                        in paragraph (2)(H) regarding a `particular 
                        matter' (as that term is used in section 208 of 
                        title 18, United States Code), each member of 
                        the Commission or the clinical perspective 
                        advisory panel who is a full-time Government 
                        employee or special Government employee shall 
                        disclose to the Secretary financial interests 
                        in accordance with subsection (b) of such 
                        section 208.
                            ``(ii) Prohibitions on participation.--
                        Except as provided under clause (iii), a member 
                        of the Commission or a clinical perspective 
                        advisory panel described in paragraph (2)(H) 
                        may not participate with respect to a 
                        particular matter considered in meeting of the 
                        Commission or the clinical perspective advisory 
                        panel if such member (or an immediate family 
                        member of such member) has a financial interest 
                        that could be affected by the advice given to 
                        the Secretary with respect to such matter, 
                        excluding interests exempted in regulations 
                        issued by the Director of the Office of 
                        Government Ethics as too remote or 
                        inconsequential to affect the integrity of the 
                        services of the Government officers or 
                        employees to which such regulations apply.
                            ``(iii) Waiver.--If the Secretary 
                        determines it necessary to afford the 
                        Commission or a clinical perspective advisory 
                        panel described in paragraph 2(H) essential 
                        expertise, the Secretary may grant a waiver of 
                        the prohibition in clause (ii) to permit a 
                        member described in such subparagraph to--
                                    ``(I) participate as a non-voting 
                                member with respect to a particular 
                                matter considered in a Commission or a 
                                clinical perspective advisory panel 
                                meeting; or
                                    ``(II) participate as a voting 
                                member with respect to a particular 
                                matter considered in a Commission or a 
                                clinical perspective advisory panel 
                                meeting.
                            ``(iv) Limitation on waivers and other 
                        exceptions.--
                                    ``(I) Determination of allowable 
                                exceptions for the commission.--The 
                                number of waivers granted to members of 
                                the Commission cannot exceed one-half 
                                of the total number of members for the 
                                Commission.
                                    ``(II) Prohibition on voting status 
                                on clinical perspective advisory 
                                panels.--No voting member of any 
                                clinical perspective advisory panel 
                                shall be in receipt of a waiver. No 
                                more than two nonvoting members of any 
                                clinical perspective advisory panel 
                                shall receive a waiver.
                    ``(D) Financial interest defined.--For purposes of 
                this paragraph, the term `financial interest' means a 
                financial interest under section 208(a) of title 18, 
                United States Code.
            ``(9) Compensation.--While serving on the business of the 
        Commission (including travel time), a member of the Commission 
        shall be entitled to compensation at the per diem equivalent of 
        the rate provided for level IV of the Executive Schedule under 
        section 5315 of title 5, United States Code; and while so 
        serving away from home and the member's regular place of 
        business, a member may be allowed travel expenses, as 
        authorized by the Director of the Commission.
            ``(10) Availability of reports.--The Commission shall 
        transmit to the Secretary a copy of each report submitted under 
        this subsection and shall make such reports available to the 
        public.
            ``(11) Director and staff; experts and consultants.--
        Subject to such review as the Secretary deems necessary to 
        assure the efficient administration of the Commission, the 
        Commission may--
                    ``(A) appoint an Executive Director (subject to the 
                approval of the Secretary) and such other personnel as 
                Federal employees under section 2105 of title 5, United 
                States Code, as may be necessary to carry out its 
                duties (without regard to the provisions of title 5, 
                United States Code, governing appointments in the 
                competitive service);
                    ``(B) seek such assistance and support as may be 
                required in the performance of its duties from 
                appropriate Federal departments and agencies;
                    ``(C) enter into contracts or make other 
                arrangements, as may be necessary for the conduct of 
                the work of the Commission (without regard to section 
                3709 of the Revised Statutes (41 U.S.C. 5));
                    ``(D) make advance, progress, and other payments 
                which relate to the work of the Commission;
                    ``(E) provide transportation and subsistence for 
                persons serving without compensation; and
                    ``(F) prescribe such rules and regulations as it 
                deems necessary with respect to the internal 
                organization and operation of the Commission.
    ``(c) Research Requirements.--Any research conducted, supported, or 
synthesized under this section shall meet the following requirements:
            ``(1) Ensuring transparency, credibility, and access.--
                    ``(A) The establishment of the agenda and conduct 
                of the research shall be insulated from inappropriate 
                political or stakeholder influence.
                    ``(B) Methods of conducting such research shall be 
                scientifically based.
                    ``(C) All aspects of the prioritization of 
                research, conduct of the research, and development of 
                conclusions based on the research shall be transparent 
                to all stakeholders.
                    ``(D) The process and methods for conducting such 
                research shall be publicly documented and available to 
                all stakeholders.
                    ``(E) Throughout the process of such research, the 
                Center shall provide opportunities for all stakeholders 
                involved to review and provide public comment on the 
                methods and findings of such research.
            ``(2) Use of clinical perspective advisory panels.--The 
        research shall meet a national research priority determined 
        under subsection (b)(2)(A) and shall consider advice given to 
        the Center by the clinical perspective advisory panel for the 
        national research priority.
            ``(3) Stakeholder input.--
                    ``(A) In general.--The Commission shall consult 
                with patients, health care providers, health care 
                consumer representatives, and other appropriate 
                stakeholders with an interest in the research through a 
                transparent process recommended by the Commission.
                    ``(B) Specific areas of consultation.--Consultation 
                shall include where deemed appropriate by the 
                Commission--
                            ``(i) recommending research priorities and 
                        questions;
                            ``(ii) recommending research methodologies; 
                        and
                            ``(iii) advising on and assisting with 
                        efforts to disseminate research findings.
                    ``(C) Ombudsman.--The Secretary shall designate a 
                patient ombudsman. The ombudsman shall--
                            ``(i) serve as an available point of 
                        contact for any patients with an interest in 
                        proposed comparative effectiveness studies by 
                        the Center; and
                            ``(ii) ensure that any comments from 
                        patients regarding proposed comparative 
                        effectiveness studies are reviewed by the 
                        Commission.
            ``(4) Taking into account potential differences.--Research 
        shall--
                    ``(A) be designed, as appropriate, to take into 
                account the potential for differences in the 
                effectiveness of health care items and services used 
                with various subpopulations such as racial and ethnic 
                minorities, women, different age groups (including 
                children, adolescents, adults, and seniors), and 
                individuals with different comorbidities; and--
                    ``(B) seek, as feasible and appropriate, to include 
                members of such subpopulations as subjects in the 
                research.
    ``(d) Public Access to Comparative Effectiveness Information.--
            ``(1) In general.--Not later than 90 days after receipt by 
        the Center or Commission, as applicable, of a relevant report 
        described in paragraph (2) made by the Center, Commission, or 
        clinical perspective advisory panel under this section, 
        appropriate information contained in such report shall be 
        posted on the official public Internet site of the Center and 
        of the Commission, as applicable.
            ``(2) Relevant reports described.--For purposes of this 
        section, a relevant report is each of the following submitted 
        by the Center or a grantee or contractor of the Center:
                    ``(A) Any interim or progress reports as deemed 
                appropriate by the Secretary.
                    ``(B) Stakeholder comments.
                    ``(C) A final report.
    ``(e) Dissemination and Incorporation of Comparative Effectiveness 
Information.--
            ``(1) Dissemination.--The Center shall provide for the 
        dissemination of appropriate findings produced by research 
        supported, conducted, or synthesized under this section to 
        health care providers, patients, vendors of health information 
        technology focused on clinical decision support, appropriate 
        professional associations, and Federal and private health 
        plans, and other relevant stakeholders. In disseminating such 
        findings the Center shall--
                    ``(A) convey findings of research so that they are 
                comprehensible and useful to patients and providers in 
                making health care decisions;
                    ``(B) discuss findings and other considerations 
                specific to certain sub-populations, risk factors, and 
                comorbidities as appropriate;
                    ``(C) include considerations such as limitations of 
                research and what further research may be needed, as 
                appropriate;
                    ``(D) not include any data that the dissemination 
                of which would violate the privacy of research 
                participants or violate any confidentiality agreements 
                made with respect to the use of data under this 
                section; and
                    ``(E) assist the users of health information 
                technology focused on clinical decision support to 
                promote the timely incorporation of such findings into 
                clinical practices and promote the ease of use of such 
                incorporation.
            ``(2) Dissemination protocols and strategies.--The Center 
        shall develop protocols and strategies for the appropriate 
        dissemination of research findings in order to ensure effective 
        communication of findings and the use and incorporation of such 
        findings into relevant activities for the purpose of informing 
        higher quality and more effective and efficient decisions 
        regarding medical items and services. In developing and 
        adopting such protocols and strategies, the Center shall 
        consult with stakeholders concerning the types of dissemination 
        that will be most useful to the end users of information and 
        may provide for the utilization of multiple formats for 
        conveying findings to different audiences, including 
        dissemination to individuals with limited English proficiency.
    ``(f) Reports to Congress.--
            ``(1) Annual reports.--Beginning not later than one year 
        after the date of the enactment of this section, the Director 
        of the Agency of Healthcare Research and Quality and the 
        Commission shall submit to Congress an annual report on the 
        activities of the Center and the Commission, as well as the 
        research, conducted under this section. Each such report shall 
        include a discussion of the Center's compliance with subsection 
        (c)(4)(B), including any reasons for lack of compliance with 
        such subsection.
            ``(2) Recommendation for fair share per capita amount for 
        all-payer financing.--Beginning not later than December 31, 
        2011, the Secretary shall submit to Congress an annual 
        recommendation for a fair share per capita amount described in 
        subsection (c)(1) of section 9511 of the Internal Revenue Code 
        of 1986 for purposes of funding the CERTF under such section.
            ``(3) Analysis and review.--Not later than December 31, 
        2013, the Secretary, in consultation with the Commission, shall 
        submit to Congress a report on all activities conducted or 
        supported under this section as of such date. Such report shall 
        include an evaluation of the overall costs of such activities 
        and an analysis of the backlog of any research proposals 
        approved by the Commission but not funded.
    ``(g) Funding of Comparative Effectiveness Research.--For fiscal 
year 2010 and each subsequent fiscal year, amounts in the Comparative 
Effectiveness Research Trust Fund (referred to in this section as the 
`CERTF') under section 9511 of the Internal Revenue Code of 1986 shall 
be available, without the need for further appropriations and without 
fiscal year limitation, to the Secretary to carry out this section.
    ``(h) Construction.--Nothing in this section shall be construed to 
permit the Commission or the Center to mandate coverage, reimbursement, 
or other policies for any public or private payer.''.
    (b) Comparative Effectiveness Research Trust Fund; Financing for 
the Trust Fund.--For provision establishing a Comparative Effectiveness 
Research Trust Fund and financing such Trust Fund, see section 1802.

                 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.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
            ``(1) Disclosure.--A facility (as defined in paragraph 
        (7)(B)) shall have the information described in paragraph (3) 
        available--
                    ``(A) during the period beginning on the date of 
                the enactment of this subsection and ending on the date 
                such information is made available to the public under 
                section 1411(b) of the America's Affordable Health 
                Choices Act of 2009, for submission to the Secretary, 
                the Inspector General of the Department of Health and 
                Human Services, the State in which the facility is 
                located, and the State long-term care ombudsman in the 
                case where the Secretary, the Inspector General, the 
                State, or the State long-term care ombudsman requests 
                such information; and
                    ``(B) beginning on the effective date of the final 
                regulations promulgated under paragraph (4)(A), for 
                reporting such information in accordance with such 
                final regulations.
        Nothing in subparagraph (A) shall be construed as authorizing a 
        facility to dispose of or delete information described in such 
        subparagraph after the effective date of the final regulations 
        promulgated under paragraph (4)(A).
            ``(2) Public availability of information.--During the 
        period described in paragraph (1)(A), a facility shall--
                    ``(A) make the information described in paragraph 
                (3) available to the public upon request and update 
                such information as may be necessary to reflect changes 
                in such information; and
                    ``(B) post a notice of the availability of such 
                information in the lobby of the facility in a prominent 
                manner.
            ``(3) Information described.--
                    ``(A) In general.--The following information is 
                described in this paragraph:
                            ``(i) The information described in 
                        subsections (a) and (b), subject to 
                        subparagraph (C).
                            ``(ii) The identity of and information on--
                                    ``(I) each member of the governing 
                                body of the facility, including the 
                                name, title, and period of service of 
                                each such member;
                                    ``(II) each person or entity who is 
                                an officer, director, member, partner, 
                                trustee, or managing employee of the 
                                facility, including the name, title, 
                                and date of start of service of each 
                                such person or entity; and
                                    ``(III) each person or entity who 
                                is an additional disclosable party of 
                                the facility.
                            ``(iii) The organizational structure of 
                        each person and entity described in subclauses 
                        (II) and (III) of clause (ii) and a description 
                        of the relationship of each such person or 
                        entity to the facility and to one another.
                    ``(B) Special rule where information is already 
                reported or submitted.--To the extent that information 
                reported by a facility to the Internal Revenue Service 
                on Form 990, information submitted by a facility to the 
                Securities and Exchange Commission, or information 
                otherwise submitted to the Secretary or any other 
                Federal agency contains the information described in 
                clauses (i), (ii), or (iii) of subparagraph (A), the 
                Secretary may allow, to the extent practicable, such 
                Form or such information to meet the requirements of 
                paragraph (1) and to be submitted in a manner specified 
                by the Secretary.
                    ``(C) Special rule.--In applying subparagraph 
                (A)(i)--
                            ``(i) with respect to subsections (a) and 
                        (b), `ownership or control interest' shall 
                        include direct or indirect interests, including 
                        such interests in intermediate entities; and
                            ``(ii) subsection (a)(3)(A)(ii) shall 
                        include the owner of a whole or part interest 
                        in any mortgage, deed of trust, note, or other 
                        obligation secured, in whole or in part, by the 
                        entity or any of the property or assets 
                        thereof, if the interest is equal to or exceeds 
                        5 percent of the total property or assets of 
                        the entirety.
            ``(4) Reporting.--
                    ``(A) In general.--Not later than the date that is 
                2 years after the date of the enactment of this 
                subsection, the Secretary shall promulgate regulations 
                requiring, effective on the date that is 90 days after 
                the date on which such final regulations are published 
                in the Federal Register, a facility to report the 
                information described in paragraph (3) to the Secretary 
                in a standardized format, and such other regulations as 
                are necessary to carry out this subsection. Such final 
                regulations shall ensure that the facility certifies, 
                as a condition of participation and payment under the 
                program under title XVIII or XIX, that the information 
                reported by the facility in accordance with such final 
                regulations is accurate and current.
                    ``(B) Guidance.--The Secretary shall provide 
                guidance and technical assistance to States on how to 
                adopt the standardized format under subparagraph (A).
            ``(5) No effect on existing reporting requirements.--
        Nothing in this subsection shall reduce, diminish, or alter any 
        reporting requirement for a facility that is in effect as of 
        the date of the enactment of this subsection.
            ``(6) Definitions.--In this subsection:
                    ``(A) Additional disclosable party.--The term 
                `additional disclosable party' means, with respect to a 
                facility, any person or entity who--
                            ``(i) exercises operational, financial, or 
                        managerial control over the facility or a part 
                        thereof, or provides policies or procedures for 
                        any of the operations of the facility, or 
                        provides financial or cash management services 
                        to the facility;
                            ``(ii) leases or subleases real property to 
                        the facility, or owns a whole or part interest 
                        equal to or exceeding 5 percent of the total 
                        value of such real property;
                            ``(iii) lends funds or provides a financial 
                        guarantee to the facility in an amount which is 
                        equal to or exceeds $50,000; or
                            ``(iv) provides management or 
                        administrative services, clinical consulting 
                        services, or accounting or financial services 
                        to the facility.
                    ``(B) Facility.--The term `facility' means a 
                disclosing entity which is--
                            ``(i) a skilled nursing facility (as 
                        defined in section 1819(a)); or
                            ``(ii) a nursing facility (as defined in 
                        section 1919(a)).
                    ``(C) Managing employee.--The term `managing 
                employee' means, with respect to a facility, an 
                individual (including a general manager, business 
                manager, administrator, director, or consultant) who 
                directly or indirectly manages, advises, or supervises 
                any element of the practices, finances, or operations 
                of the facility.
                    ``(D) Organizational structure.--The term 
                `organizational structure' means, in the case of--
                            ``(i) a corporation, the officers, 
                        directors, and shareholders of the corporation 
                        who have an ownership interest in the 
                        corporation which is equal to or exceeds 5 
                        percent;
                            ``(ii) a limited liability company, the 
                        members and managers of the limited liability 
                        company (including, as applicable, what 
                        percentage each member and manager has of the 
                        ownership interest in the limited liability 
                        company);
                            ``(iii) a general partnership, the partners 
                        of the general partnership;
                            ``(iv) a limited partnership, the general 
                        partners and any limited partners of the 
                        limited partnership who have an ownership 
                        interest in the limited partnership which is 
                        equal to or exceeds 10 percent;
                            ``(v) a trust, the trustees of the trust;
                            ``(vi) an individual, contact information 
                        for the individual; and
                            ``(vii) any other person or entity, such 
                        information as the Secretary determines 
                        appropriate.''.
    (b) Public Availability of Information.--
            (1) In general.--Not later than the date that is 1 year 
        after the date on which the final regulations promulgated under 
        section 1124(c)(4)(A) of the Social Security Act, as added by 
        subsection (a), are published in the Federal Register, the 
        information reported in accordance with such final regulations 
        shall be made available to the public in accordance with 
        procedures established by the Secretary.
            (2) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).
    (c) Conforming Amendments.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by 
        striking subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking 
        subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).

SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

    (a) Effective Compliance and Ethics Programs.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        section 1411(c)(1), is amended by adding at the end the 
        following new subparagraph:
                    ``(C) Compliance and ethics programs.--
                            ``(i) Requirement.--On or after the date 
                        that is 36 months after the date of the 
                        enactment of this subparagraph, a skilled 
                        nursing facility shall, with respect to the 
                        entity that operates the facility (in this 
                        subparagraph referred to as the `operating 
                        organization' or `organization'), have in 
                        operation a compliance and ethics program that 
                        is effective in preventing and detecting 
                        criminal, civil, and administrative violations 
                        under this Act and in promoting quality of care 
                        consistent with regulations developed under 
                        clause (ii).
                            ``(ii) Development of regulations.--
                                    ``(I) In general.--Not later than 
                                the date that is 2 years after such 
                                date of the enactment, the Secretary, 
                                in consultation with the Inspector 
                                General of the Department of Health and 
                                Human Services, shall promulgate 
                                regulations for an effective compliance 
                                and ethics program for operating 
                                organizations, which may include a 
                                model compliance program.
                                    ``(II) Design of regulations.--Such 
                                regulations with respect to specific 
                                elements or formality of a program may 
                                vary with the size of the organization, 
                                such that larger organizations should 
                                have a more formal and rigorous program 
                                and include established written 
                                policies defining the standards and 
                                procedures to be followed by its 
                                employees. Such requirements shall 
                                specifically apply to the corporate 
                                level management of multi-unit nursing 
                                home chains.
                                    ``(III) Evaluation.--Not later than 
                                3 years after the date of promulgation 
                                of regulations under this clause, the 
                                Secretary shall complete an evaluation 
                                of the compliance and ethics programs 
                                required to be established under this 
                                subparagraph. Such evaluation shall 
                                determine if such programs led to 
                                changes in deficiency citations, 
                                changes in quality performance, or 
                                changes in other metrics of resident 
                                quality of care. The Secretary shall 
                                submit to Congress a report on such 
                                evaluation and shall include in such 
                                report such recommendations regarding 
                                changes in the requirements for such 
                                programs as the Secretary determines 
                                appropriate.
                            ``(iii) Requirements for compliance and 
                        ethics programs.--In this subparagraph, the 
                        term `compliance and ethics program' means, 
                        with respect to a skilled nursing facility, a 
                        program of the operating organization that--
                                    ``(I) has been reasonably designed, 
                                implemented, and enforced so that it 
                                generally will be effective in 
                                preventing and detecting criminal, 
                                civil, and administrative violations 
                                under this Act and in promoting quality 
                                of care; and
                                    ``(II) includes at least the 
                                required components specified in clause 
                                (iv).
                            ``(iv) Required components of program.--The 
                        required components of a compliance and ethics 
                        program of an organization are the following:
                                    ``(I) The organization must have 
                                established compliance standards and 
                                procedures to be followed by its 
                                employees, contractors, and other 
                                agents that are reasonably capable of 
                                reducing the prospect of criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(II) Specific individuals within 
                                high-level personnel of the 
                                organization must have been assigned 
                                overall responsibility to oversee 
                                compliance with such standards and 
                                procedures and have sufficient 
                                resources and authority to assure such 
                                compliance.
                                    ``(III) The organization must have 
                                used due care not to delegate 
                                substantial discretionary authority to 
                                individuals whom the organization knew, 
                                or should have known through the 
                                exercise of due diligence, had a 
                                propensity to engage in criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(IV) The organization must have 
                                taken steps to communicate effectively 
                                its standards and procedures to all 
                                employees and other agents, such as by 
                                requiring participation in training 
                                programs or by disseminating 
                                publications that explain in a 
                                practical manner what is required.
                                    ``(V) The organization must have 
                                taken reasonable steps to achieve 
                                compliance with its standards, such as 
                                by utilizing monitoring and auditing 
                                systems reasonably designed to detect 
                                criminal, civil, and administrative 
                                violations under this Act by its 
                                employees and other agents and by 
                                having in place and publicizing a 
                                reporting system whereby employees and 
                                other agents could report violations by 
                                others within the organization without 
                                fear of retribution.
                                    ``(VI) The standards must have been 
                                consistently enforced through 
                                appropriate disciplinary mechanisms, 
                                including, as appropriate, discipline 
                                of individuals responsible for the 
                                failure to detect an offense.
                                    ``(VII) After an offense has been 
                                detected, the organization must have 
                                taken all reasonable steps to respond 
                                appropriately to the offense and to 
                                prevent further similar offenses, 
                                including repayment of any funds to 
                                which it was not entitled and any 
                                necessary modification to its program 
                                to prevent and detect criminal, civil, 
                                and administrative violations under 
                                this Act.
                                    ``(VIII) The organization must 
                                periodically undertake reassessment of 
                                its compliance program to identify 
                                changes necessary to reflect changes 
                                within the organization and its 
                                facilities.
                            ``(v) Coordination.--The provisions of this 
                        subparagraph shall apply with respect to a 
                        skilled nursing facility in lieu of section 
                        1874(d).''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
        1411(c)(2), is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Compliance and ethics program.--
                            ``(i) Requirement.--On or after the date 
                        that is 36 months after the date of the 
                        enactment of this subparagraph, a nursing 
                        facility shall, with respect to the entity that 
                        operates the facility (in this subparagraph 
                        referred to as the `operating organization' or 
                        `organization'), have in operation a compliance 
                        and ethics program that is effective in 
                        preventing and detecting criminal, civil, and 
                        administrative violations under this Act and in 
                        promoting quality of care consistent with 
                        regulations developed under clause (ii).
                            ``(ii) Development of regulations.--
                                    ``(I) In general.--Not later than 
                                the date that is 2 years after such 
                                date of the enactment, the Secretary, 
                                in consultation with the Inspector 
                                General of the Department of Health and 
                                Human Services, shall develop 
                                regulations for an effective compliance 
                                and ethics program for operating 
                                organizations, which may include a 
                                model compliance program.
                                    ``(II) Design of regulations.--Such 
                                regulations with respect to specific 
                                elements or formality of a program may 
                                vary with the size of the organization, 
                                such that larger organizations should 
                                have a more formal and rigorous program 
                                and include established written 
                                policies defining the standards and 
                                procedures to be followed by its 
                                employees. Such requirements may 
                                specifically apply to the corporate 
                                level management of multi-unit nursing 
                                home chains.
                                    ``(III) Evaluation.--Not later than 
                                3 years after the date of promulgation 
                                of regulations under this clause the 
                                Secretary shall complete an evaluation 
                                of the compliance and ethics programs 
                                required to be established under this 
                                subparagraph. Such evaluation shall 
                                determine if such programs led to 
                                changes in deficiency citations, 
                                changes in quality performance, or 
                                changes in other metrics of resident 
                                quality of care. The Secretary shall 
                                submit to Congress a report on such 
                                evaluation and shall include in such 
                                report such recommendations regarding 
                                changes in the requirements for such 
                                programs as the Secretary determines 
                                appropriate.
                            ``(iii) Requirements for compliance and 
                        ethics programs.--In this subparagraph, the 
                        term `compliance and ethics program' means, 
                        with respect to a nursing facility, a program 
                        of the operating organization that--
                                    ``(I) has been reasonably designed, 
                                implemented, and enforced so that it 
                                generally will be effective in 
                                preventing and detecting criminal, 
                                civil, and administrative violations 
                                under this Act and in promoting quality 
                                of care; and
                                    ``(II) includes at least the 
                                required components specified in clause 
                                (iv).
                            ``(iv) Required components of program.--The 
                        required components of a compliance and ethics 
                        program of an organization are the following:
                                    ``(I) The organization must have 
                                established compliance standards and 
                                procedures to be followed by its 
                                employees and other agents that are 
                                reasonably capable of reducing the 
                                prospect of criminal, civil, and 
                                administrative violations under this 
                                Act.
                                    ``(II) Specific individuals within 
                                high-level personnel of the 
                                organization must have been assigned 
                                overall responsibility to oversee 
                                compliance with such standards and 
                                procedures and has sufficient resources 
                                and authority to assure such 
                                compliance.
                                    ``(III) The organization must have 
                                used due care not to delegate 
                                substantial discretionary authority to 
                                individuals whom the organization knew, 
                                or should have known through the 
                                exercise of due diligence, had a 
                                propensity to engage in criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(IV) The organization must have 
                                taken steps to communicate effectively 
                                its standards and procedures to all 
                                employees and other agents, such as by 
                                requiring participation in training 
                                programs or by disseminating 
                                publications that explain in a 
                                practical manner what is required.
                                    ``(V) The organization must have 
                                taken reasonable steps to achieve 
                                compliance with its standards, such as 
                                by utilizing monitoring and auditing 
                                systems reasonably designed to detect 
                                criminal, civil, and administrative 
                                violations under this Act by its 
                                employees and other agents and by 
                                having in place and publicizing a 
                                reporting system whereby employees and 
                                other agents could report violations by 
                                others within the organization without 
                                fear of retribution.
                                    ``(VI) The standards must have been 
                                consistently enforced through 
                                appropriate disciplinary mechanisms, 
                                including, as appropriate, discipline 
                                of individuals responsible for the 
                                failure to detect an offense.
                                    ``(VII) After an offense has been 
                                detected, the organization must have 
                                taken all reasonable steps to respond 
                                appropriately to the offense and to 
                                prevent further similar offenses, 
                                including repayment of any funds to 
                                which it was not entitled and any 
                                necessary modification to its program 
                                to prevent and detect criminal, civil, 
                                and administrative violations under 
                                this Act.
                                    ``(VIII) The organization must 
                                periodically undertake reassessment of 
                                its compliance program to identify 
                                changes necessary to reflect changes 
                                within the organization and its 
                                facilities.
                            ``(v) Coordination.--The provisions of this 
                        subparagraph shall apply with respect to a 
                        nursing facility in lieu of section 
                        1902(a)(77).''.
    (b) Quality Assurance and Performance Improvement Program.--
            (1) Skilled nursing facilities.--Section 1819(b)(1)(B) of 
        the Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                    (A) by striking ``assurance'' and inserting 
                ``assurance and quality assurance and performance 
                improvement program'';
                    (B) by designating the matter beginning with ``A 
                skilled nursing facility'' as a clause (i) with the 
                heading ``In general.--'' and the appropriate 
                indentation;
                    (C) in clause (i) (as so designated by subparagraph 
                (B)), by redesignating clauses (i) and (ii) as 
                subclauses (I) and (II), respectively; and
                    (D) by adding at the end the following new clause:
                            ``(ii) Quality assurance and performance 
                        improvement program.--
                                    ``(I) In general.--Not later than 
                                December 31, 2011, the Secretary shall 
                                establish and implement a quality 
                                assurance and performance improvement 
                                program (in this clause referred to as 
                                the `QAPI program') for skilled nursing 
                                facilities, including multi-unit chains 
                                of such facilities. Under the QAPI 
                                program, the Secretary shall establish 
                                standards relating to such facilities 
                                and provide technical assistance to 
                                such facilities on the development of 
                                best practices in order to meet such 
                                standards. Not later than 1 year after 
                                the date on which the regulations are 
                                promulgated under subclause (II), a 
                                skilled nursing facility must submit to 
                                the Secretary a plan for the facility 
                                to meet such standards and implement 
                                such best practices, including how to 
                                coordinate the implementation of such 
                                plan with quality assessment and 
                                assurance activities conducted under 
                                clause (i).
                                    ``(II) Regulations.--The Secretary 
                                shall promulgate regulations to carry 
                                out this clause.''.
            (2) Nursing facilities.--Section 1919(b)(1)(B) of the 
        Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                    (A) by striking ``assurance'' and inserting 
                ``assurance and quality assurance and performance 
                improvement program'';
                    (B) by designating the matter beginning with ``A 
                nursing facility'' as a clause (i) with the heading 
                ``In general.--'' and the appropriate indentation; and
                    (C) by adding at the end the following new clause:
                            ``(ii) Quality assurance and performance 
                        improvement program.--
                                    ``(I) In general.--Not later than 
                                December 31, 2011, the Secretary shall 
                                establish and implement a quality 
                                assurance and performance improvement 
                                program (in this clause referred to as 
                                the `QAPI program') for nursing 
                                facilities, including multi-unit chains 
                                of such facilities. Under the QAPI 
                                program, the Secretary shall establish 
                                standards relating to such facilities 
                                and provide technical assistance to 
                                such facilities on the development of 
                                best practices in order to meet such 
                                standards. Not later than 1 year after 
                                the date on which the regulations are 
                                promulgated under subclause (II), a 
                                nursing facility must submit to the 
                                Secretary a plan for the facility to 
                                meet such standards and implement such 
                                best practices, including how to 
                                coordinate the implementation of such 
                                plan with quality assessment and 
                                assurance activities conducted under 
                                clause (i).
                                    ``(II) Regulations.--The Secretary 
                                shall promulgate regulations to carry 
                                out this clause.''.
            (3) Proposal to revise quality assurance and performance 
        improvement programs.--The Secretary shall include in the 
        proposed rule published under section 1888(e) of the Social 
        Security Act (42 U.S.C. 1395yy(e)(5)(A)) for the subsequent 
        fiscal year to the extent otherwise authorized under section 
        1819(b)(1)(B) or 1819(d)(1)(C) of the Social Security Act or 
        other statutory or regulatory authority, one or more proposals 
        for skilled nursing facilities to modify and strengthen quality 
        assurance and performance improvement programs in such 
        facilities. At the time of publication of such proposed rule 
        and to the extent otherwise authorized under section 
        1919(b)(1)(B) or 1919(d)(1)(C) of such Act or other regulatory 
        authority.
            (4) Facility plan.--Not later than 1 year after the date on 
        which the regulations are promulgated under subclause (II) of 
        clause (ii) of sections 1819(b)(1)(B) and 1919(b)(1)(B) of the 
        Social Security Act, as added by paragraphs (1) and (2), a 
        skilled nursing facility and a nursing facility must submit to 
        the Secretary a plan for the facility to meet the standards 
        under such regulations and implement such best practices, 
        including how to coordinate the implementation of such plan 
        with quality assessment and assurance activities conducted 
        under clause (i) of such sections.
    (c) GAO Study on Nursing Facility Undercapitalization.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study that examines the following:
                    (A) The extent to which corporations that own or 
                operate large numbers of nursing facilities, taking 
                into account ownership type (including private equity 
                and control interests), are undercapitalizing such 
                facilities.
                    (B) The effects of such undercapitalization on 
                quality of care, including staffing and food costs, at 
                such facilities.
                    (C) Options to address such undercapitalization, 
                such as requirements relating to surety bonds, 
                liability insurance, or minimum capitalization.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1).
            (3) Nursing facility.--In this subsection, the term 
        ``nursing facility'' includes a skilled nursing facility.

SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819 of the Social Security Act 
        (42 U.S.C. 1395i-3) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Information that is reported to the 
                        Secretary under section 1124(c)(4).
                            ``(ii) Information on the `Special Focus 
                        Facility program' (or a successor program) 
                        established by the Centers for Medicare and 
                        Medicaid Services, according to procedures 
                        established by the Secretary. Such procedures 
                        shall provide for the inclusion of information 
                        with respect to, and the names and locations 
                        of, those facilities that, since the previous 
                        quarter--
                                    ``(I) were newly enrolled in the 
                                program;
                                    ``(II) are enrolled in the program 
                                and have failed to significantly 
                                improve;
                                    ``(III) are enrolled in the program 
                                and have significantly improved;
                                    ``(IV) have graduated from the 
                                program; and
                                    ``(V) have closed voluntarily or no 
                                longer participate under this title.
                            ``(iii) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under subsection 
                        (b)(8)(C), including information on staffing 
                        turnover and tenure, in a format that is 
                        clearly understandable to consumers of long-
                        term care services and allows such consumers to 
                        compare differences in staffing between 
                        facilities and State and national averages for 
                        the facilities. Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as a plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(iv) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(v) The standardized complaint form 
                        developed under subsection (f)(8), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(vi) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(vii) The number of adjudicated instances 
                        of criminal violations by employees of a 
                        nursing facility--
                                    ``(I) that were committed inside 
                                the facility;
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed inside of the facility that 
                                were the violations or crimes of abuse, 
                                neglect, and exploitation, criminal 
                                sexual abuse, or other violations or 
                                crimes that resulted in serious bodily 
                                injury; and
                                    ``(III) the number of civil 
                                monetary penalties levied against the 
                                facility, employees, contractors, and 
                                other agents.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) and (A)(iii) is included on 
                        such website (or a successor website) not later 
                        than the date on which the requirements under 
                        section 1124(c)(4) and subsection (b)(8)(C)(ii) 
                        are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups; and
                            ``(iv) any other representatives of 
                        programs or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1819(g)(5) of the Social 
                Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a skilled nursing 
                facility (including any enforcement actions taken by 
                the State) to the Secretary not later than the date on 
                which the State sends such information to the facility. 
                The Secretary shall use the information submitted under 
                the preceding sentence to update the information 
                provided on the Nursing Home Compare Medicare website 
                as expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1819(f) of 
        such Act is amended by adding at the end the following new 
        paragraph:
            ``(8) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for skilled nursing facilities that the 
                Secretary has identified as having substantially failed 
                to meet applicable requirement of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less than once every 6 months.''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919 of the Social Security Act 
        (42 U.S.C. 1396r) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under subsection 
                        (b)(8)(C)(ii), including information on 
                        staffing turnover and tenure, in a format that 
                        is clearly understandable to consumers of long-
                        term care services and allows such consumers to 
                        compare differences in staffing between 
                        facilities and State and national averages for 
                        the facilities. Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(ii) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(iii) The standardized complaint form 
                        developed under subsection (f)(10), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(iv) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(v) The number of adjudicated instances 
                        of criminal violations by employees of a 
                        nursing facility--
                                    ``(I) that were committed inside of 
                                the facility; and
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed outside of the facility, that 
                                were the violations or crimes that 
                                resulted in the serious bodily injury 
                                of an elder.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) and (A)(iii) is included on 
                        such website (or a successor website) not later 
                        than the date on which the requirements under 
                        section 1124(c)(4) and subsection (b)(8)(C)(ii) 
                        are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups;
                            ``(iv) skilled nursing facility employees 
                        and their representatives; and
                            ``(v) any other representatives of programs 
                        or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1919(g)(5) of the Social 
                Security Act (42 U.S.C. 1396r(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided 
                on the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1919(f) of 
        such Act is amended by adding at the end of the following new 
        paragraph:
            ``(10) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for nursing facilities that the Secretary 
                has identified as having substantially failed to meet 
                applicable requirements of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less often than once every 6 months.''.
    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        sections 1411 and 1412, is amended by adding at the end the 
        following new subparagraph:
                    ``(D) Availability of survey, certification, and 
                complaint investigation reports.--A skilled nursing 
                facility must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by sections 
        1411 and 1412, is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Availability of survey, certification, and 
                complaint investigation reports.--A nursing facility 
                must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect 1 year after the date of the enactment of 
        this Act.
    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
            (1) Guidance.--The Secretary of Health and Human Services 
        (in this subtitle referred to as the ``Secretary'') shall 
        provide guidance to States on how States can establish 
        electronic links to Form 2567 State inspection reports (or a 
        successor form), complaint investigation reports, and a 
        facility's plan of correction or other response to such Form 
        2567 State inspection reports (or a successor form) on the 
        Internet website of the State that provides information on 
        skilled nursing facilities and nursing facilities and the 
        Secretary shall, if possible, include such information on 
        Nursing Home Compare.
            (2) Requirement.--Section 1902(a)(9) of the Social Security 
        Act (42 U.S.C. 1396a(a)(9)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the semicolon at the end of 
                subparagraph (C) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) that the State maintain a consumer-oriented 
                website providing useful information to consumers 
                regarding all skilled nursing facilities and all 
                nursing facilities in the State, including for each 
                facility, Form 2567 State inspection reports (or a 
                successor form), complaint investigation reports, the 
                facility's plan of correction, and such other 
                information that the State or the Secretary considers 
                useful in assisting the public to assess the quality of 
                long term care options and the quality of care provided 
                by individual facilities;''.
            (3) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).

SEC. 1414. REPORTING OF EXPENDITURES.

    Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is 
amended by adding at the end the following new subsection:
    ``(f) Reporting of Direct Care Expenditures.--
            ``(1) In general.--For cost reports submitted under this 
        title for cost reporting periods beginning on or after the date 
        that is 3 years after the date of the enactment of this 
        subsection, skilled nursing facilities shall separately report 
        expenditures for wages and benefits for direct care staff 
        (breaking out (at a minimum) registered nurses, licensed 
        professional nurses, certified nurse assistants, and other 
        medical and therapy staff).
            ``(2) Modification of form.--The Secretary, in consultation 
        with private sector accountants experienced with skilled 
        nursing facility cost reports, shall redesign such reports to 
        meet the requirement of paragraph (1) not later than 1 year 
        after the date of the enactment of this subsection.
            ``(3) Categorization by functional accounts.--Not later 
        than 30 months after the date of the enactment of this 
        subsection, the Secretary, working in consultation with the 
        Medicare Payment Advisory Commission, the Inspector General of 
        the Department of Health and Human Services, and other expert 
        parties the Secretary determines appropriate, shall take the 
        expenditures listed on cost reports, as modified under 
        paragraph (1), submitted by skilled nursing facilities and 
        categorize such expenditures, regardless of any source of 
        payment for such expenditures, for each skilled nursing 
        facility into the following functional accounts on an annual 
        basis:
                    ``(A) Spending on direct care services (including 
                nursing, therapy, and medical services).
                    ``(B) Spending on indirect care (including 
                housekeeping and dietary services).
                    ``(C) Capital assets (including building and land 
                costs).
                    ``(D) Administrative services costs.
            ``(4) Availability of information submitted.--The Secretary 
        shall establish procedures to make information on expenditures 
        submitted under this subsection readily available to interested 
        parties upon request, subject to such requirements as the 
        Secretary may specify under the procedures established under 
        this paragraph.''.

SEC. 1415. STANDARDIZED COMPLAINT FORM.

    (a) Skilled Nursing Facilities.--
            (1) Development by the secretary.--Section 1819(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)), as amended by 
        section 1413(a)(3), is amended by adding at the end the 
        following new paragraph:
            ``(9) Standardized complaint form.--The Secretary shall 
        develop a standardized complaint form for use by a resident (or 
        a person acting on the resident's behalf) in filing a complaint 
        with a State survey and certification agency and a State long-
        term care ombudsman program with respect to a skilled nursing 
        facility.''.
            (2) State requirements.--Section 1819(e) of the Social 
        Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the 
        end the following new paragraph:
            ``(6) Complaint processes and whistle-blower protection.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under subsection 
                (f)(9) available upon request to--
                            ``(i) a resident of a skilled nursing 
                        facility;
                            ``(ii) any person acting on the resident's 
                        behalf; and
                            ``(iii) any person who works at a skilled 
                        nursing facility or is a representative of such 
                        a worker.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that a resident, the legal representative of a 
                resident of a skilled nursing facility, or other 
                responsible party is not retaliated against if the 
                resident, legal representative, or responsible party 
                has complained, in good faith, about the quality of 
                care or other issues relating to the skilled nursing 
                facility, that the legal representative of a resident 
                of a skilled nursing facility or other responsible 
                party is not denied access to such resident or 
                otherwise retaliated against if such representative 
                party has complained, in good faith, about the quality 
                of care provided by the facility or other issues 
                relating to the facility, and that a person who works 
                at a skilled nursing facility is not retaliated against 
                if the worker has complained, in good faith, about 
                quality of care or services or an issue relating to the 
                quality of care or services provided at the facility, 
                whether the resident, legal representative, other 
                responsible party, or worker used the form developed 
                under subsection (f)(9) or some other method for 
                submitting the complaint. Such complaint resolution 
                process shall include--
                            ``(i) procedures to assure accurate 
                        tracking of complaints received, including 
                        notification to the complainant that a 
                        complaint has been received;
                            ``(ii) procedures to determine the likely 
                        severity of a complaint and for the 
                        investigation of the complaint;
                            ``(iii) deadlines for responding to a 
                        complaint and for notifying the complainant of 
                        the outcome of the investigation; and
                            ``(iv) procedures to ensure that the 
                        identity of the complainant will be kept 
                        confidential.
                    ``(C) Whistleblower protection.--
                            ``(i) Prohibition against retaliation.--No 
                        person who works at a skilled nursing facility 
                        may be penalized, discriminated, or retaliated 
                        against with respect to any aspect of 
                        employment, including discharge, promotion, 
                        compensation, terms, conditions, or privileges 
                        of employment, or have a contract for services 
                        terminated, because the person (or anyone 
                        acting at the person's request) complained, in 
                        good faith, about the quality of care or 
                        services provided by a nursing facility or 
                        about other issues relating to quality of care 
                        or services, whether using the form developed 
                        under subsection (f)(9) or some other method 
                        for submitting the complaint.
                            ``(ii) Retaliatory reporting.--A skilled 
                        nursing facility may not file a complaint or a 
                        report against a person who works (or has 
                        worked at the facility with the appropriate 
                        State professional disciplinary agency because 
                        the person (or anyone acting at the person's 
                        request) complained in good faith, as described 
                        in clause (i).
                            ``(iii) Commencement of action.--Any person 
                        who believes the person has been penalized, 
                        discriminated , or retaliated against or had a 
                        contract for services terminated in violation 
                        of clause (i) or against whom a complaint has 
                        been filed in violation of clause (ii) may 
                        bring an action at law or equity in the 
                        appropriate district court of the United 
                        States, which shall have jurisdiction over such 
                        action without regard to the amount in 
                        controversy or the citizenship of the parties, 
                        and which shall have jurisdiction to grant 
                        complete relief, including, but not limited to, 
                        injunctive relief (such as reinstatement, 
                        compensatory damages (which may include 
                        reimbursement of lost wages, compensation, and 
                        benefits), costs of litigation (including 
                        reasonable attorney and expert witness fees), 
                        exemplary damages where appropriate, and such 
                        other relief as the court deems just and 
                        proper.
                            ``(iv) Rights not waivable.--The rights 
                        protected by this paragraph may not be 
                        diminished by contract or other agreement, and 
                        nothing in this paragraph shall be construed to 
                        diminish any greater or additional protection 
                        provided by Federal or State law or by contract 
                        or other agreement.
                            ``(v) Requirement to post notice of 
                        employee rights.--Each skilled nursing facility 
                        shall post conspicuously in an appropriate 
                        location a sign (in a form specified by the 
                        Secretary) specifying the rights of persons 
                        under this paragraph and including a statement 
                        that an employee may file a complaint with the 
                        Secretary against a skilled nursing facility 
                        that violates the provisions of this paragraph 
                        and information with respect to the manner of 
                        filing such a complaint.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a resident 
                of a skilled nursing facility (or a person acting on 
                the resident's behalf) from submitting a complaint in a 
                manner or format other than by using the standardized 
                complaint form developed under subsection (f)(9) 
                (including submitting a complaint orally).
                    ``(E) Good faith defined.--For purposes of this 
                paragraph, an individual shall be deemed to be acting 
                in good faith with respect to the filing of a complaint 
                if the individual reasonably believes--
                            ``(i) the information reported or disclosed 
                        in the complaint is true; and
                            ``(ii) the violation of this title has 
                        occurred or may occur in relation to such 
                        information.''.
    (b) Nursing Facilities.--
            (1) Development by the secretary.--Section 1919(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)), as amended by 
        section 1413(b), is amended by adding at the end the following 
        new paragraph:
            ``(11) Standardized complaint form.--The Secretary shall 
        develop a standardized complaint form for use by a resident (or 
        a person acting on the resident's behalf) in filing a complaint 
        with a State survey and certification agency and a State long-
        term care ombudsman program with respect to a nursing 
        facility.''.
            (2) State requirements.--Section 1919(e) of the Social 
        Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the 
        end the following new paragraph:
            ``(8) Complaint processes and whistleblower protection.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under subsection 
                (f)(11) available upon request to--
                            ``(i) a resident of a nursing facility;
                            ``(ii) any person acting on the resident's 
                        behalf; and
                            ``(iii) any person who works at a nursing 
                        facility or a representative of such a worker.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that a resident, the legal representative of a 
                resident of a nursing facility, or other responsible 
                party is not retaliated against if the resident, legal 
                representative, or responsible party has complained, in 
                good faith, about the quality of care or other issues 
                relating to the nursing facility, that the legal 
                representative of a resident of a nursing facility or 
                other responsible party is not denied access to such 
                resident or otherwise retaliated against if such 
                representative party has complained, in good faith, 
                about the quality of care provided by the facility or 
                other issues relating to the facility, and that a 
                person who works at a nursing facility is not 
                retaliated against if the worker has complained, in 
                good faith, about quality of care or services or an 
                issue relating to the quality of care or services 
                provided at the facility, whether the resident, legal 
                representative, other responsible party, or worker used 
                the form developed under subsection (f)(11) or some 
                other method for submitting the complaint. Such 
                complaint resolution process shall include--
                            ``(i) procedures to assure accurate 
                        tracking of complaints received, including 
                        notification to the complainant that a 
                        complaint has been received;
                            ``(ii) procedures to determine the likely 
                        severity of a complaint and for the 
                        investigation of the complaint;
                            ``(iii) deadlines for responding to a 
                        complaint and for notifying the complainant of 
                        the outcome of the investigation; and
                            ``(iv) procedures to ensure that the 
                        identity of the complainant will be kept 
                        confidential.
                    ``(C) Whistleblower protection.--
                            ``(i) Prohibition against retaliation.--No 
                        person who works at a nursing facility may be 
                        penalized, discriminated, or retaliated against 
                        with respect to any aspect of employment, 
                        including discharge, promotion, compensation, 
                        terms, conditions, or privileges of employment, 
                        or have a contract for services terminated, 
                        because the person (or anyone acting at the 
                        person's request) complained, in good faith, 
                        about the quality of care or services provided 
                        by a nursing facility or about other issues 
                        relating to quality of care or services, 
                        whether using the form developed under 
                        subsection (f)(11) or some other method for 
                        submitting the complaint.
                            ``(ii) Retaliatory reporting.--A nursing 
                        facility may not file a complaint or a report 
                        against a person who works (or has worked at 
                        the facility with the appropriate State 
                        professional disciplinary agency because the 
                        person (or anyone acting at the person's 
                        request) complained in good faith, as described 
                        in clause (i).
                            ``(iii) Commencement of action.--Any person 
                        who believes the person has been penalized, 
                        discriminated, or retaliated against or had a 
                        contract for services terminated in violation 
                        of clause (i) or against whom a complaint has 
                        been filed in violation of clause (ii) may 
                        bring an action at law or equity in the 
                        appropriate district court of the United 
                        States, which shall have jurisdiction over such 
                        action without regard to the amount in 
                        controversy or the citizenship of the parties, 
                        and which shall have jurisdiction to grant 
                        complete relief, including, but not limited to, 
                        injunctive relief (such as reinstatement, 
                        compensatory damages (which may include 
                        reimbursement of lost wages, compensation, and 
                        benefits), costs of litigation (including 
                        reasonable attorney and expert witness fees), 
                        exemplary damages where appropriate, and such 
                        other relief as the court deems just and 
                        proper.
                            ``(iv) Rights not waivable.--The rights 
                        protected by this paragraph may not be 
                        diminished by contract or other agreement, and 
                        nothing in this paragraph shall be construed to 
                        diminish any greater or additional protection 
                        provided by Federal or State law or by contract 
                        or other agreement.
                            ``(v) Requirement to post notice of 
                        employee rights.--Each nursing facility shall 
                        post conspicuously in an appropriate location a 
                        sign (in a form specified by the Secretary) 
                        specifying the rights of persons under this 
                        paragraph and including a statement that an 
                        employee may file a complaint with the 
                        Secretary against a nursing facility that 
                        violates the provisions of this paragraph and 
                        information with respect to the manner of 
                        filing such a complaint.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a resident 
                of a nursing facility (or a person acting on the 
                resident's behalf) from submitting a complaint in a 
                manner or format other than by using the standardized 
                complaint form developed under subsection (f)(11) 
                (including submitting a complaint orally).
                    ``(E) Good faith defined.--For purposes of this 
                paragraph, an individual shall be deemed to be acting 
                in good faith with respect to the filing of a complaint 
                if the individual reasonably believes--
                            ``(i) the information reported or disclosed 
                        in the complaint is true; and
                            ``(ii) the violation of this title has 
                        occurred or may occur in relation to such 
                        information.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.

    (a) Skilled Nursing Facilities.--Section 1819(b)(8) of the Social 
Security Act (42 U.S.C. 1395i-3(b)(8)) is amended by adding at the end 
the following new subparagraph:
                    ``(C) Submission of staffing information based on 
                payroll data in a uniform format.--Beginning not later 
                than 2 years after the date of the enactment of this 
                subparagraph, and after consulting with State long-term 
                care ombudsman programs, consumer advocacy groups, 
                provider stakeholder groups, employees and their 
                representatives, and other parties the Secretary deems 
                appropriate, the Secretary shall require a skilled 
                nursing facility to electronically submit to the 
                Secretary direct care staffing information (including 
                information with respect to agency and contract staff) 
                based on payroll and other verifiable and auditable 
                data in a uniform format (according to specifications 
                established by the Secretary in consultation with such 
                programs, groups, and parties). Such specifications 
                shall require that the information submitted under the 
                preceding sentence--
                            ``(i) specify the category of work a 
                        certified employee performs (such as whether 
                        the employee is a registered nurse, licensed 
                        practical nurse, licensed vocational nurse, 
                        certified nursing assistant, therapist, or 
                        other medical personnel);
                            ``(ii) include resident census data and 
                        information on resident case mix;
                            ``(iii) include a regular reporting 
                        schedule; and
                            ``(iv) include information on employee 
                        turnover and tenure and on the hours of care 
                        provided by each category of certified 
                        employees referenced in clause (i) per resident 
                        per day.
                Nothing in this subparagraph shall be construed as 
                preventing the Secretary from requiring submission of 
                such information with respect to specific categories, 
                such as nursing staff, before other categories of 
                certified employees. Information under this 
                subparagraph with respect to agency and contract staff 
                shall be kept separate from information on employee 
                staffing.''.
    (b) Nursing Facilities.--Section 1919(b)(8) of the Social Security 
Act (42 U.S.C. 1396r(b)(8)) is amended by adding at the end the 
following new subparagraph:
                    ``(C) Submission of staffing information based on 
                payroll data in a uniform format.--Beginning not later 
                than 2 years after the date of the enactment of this 
                subparagraph, and after consulting with State long-term 
                care ombudsman programs, consumer advocacy groups, 
                provider stakeholder groups, employees and their 
                representatives, and other parties the Secretary deems 
                appropriate, the Secretary shall require a nursing 
                facility to electronically submit to the Secretary 
                direct care staffing information (including information 
                with respect to agency and contract staff) based on 
                payroll and other verifiable and auditable data in a 
                uniform format (according to specifications established 
                by the Secretary in consultation with such programs, 
                groups, and parties). Such specifications shall require 
                that the information submitted under the preceding 
                sentence--
                            ``(i) specify the category of work a 
                        certified employee performs (such as whether 
                        the employee is a registered nurse, licensed 
                        practical nurse, licensed vocational nurse, 
                        certified nursing assistant, therapist, or 
                        other medical personnel);
                            ``(ii) include resident census data and 
                        information on resident case mix;
                            ``(iii) include a regular reporting 
                        schedule; and
                            ``(iv) include information on employee 
                        turnover and tenure and on the hours of care 
                        provided by each category of certified 
                        employees referenced in clause (i) per resident 
                        per day.
                Nothing in this subparagraph shall be construed as 
                preventing the Secretary from requiring submission of 
                such information with respect to specific categories, 
                such as nursing staff, before other categories of 
                certified employees. Information under this 
                subparagraph with respect to agency and contract staff 
                shall be kept separate from information on employee 
                staffing.''.

                     PART 2--TARGETING ENFORCEMENT

SEC. 1421. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended to 
        read as follows:
                            ``(ii) Authority with respect to civil 
                        money penalties.--
                                    ``(I) Amount.--The Secretary may 
                                impose a civil money penalty in the 
                                applicable per instance or per day 
                                amount (as defined in subclause (II) 
                                and (III)) for each day or instance, 
                                respectively, of noncompliance (as 
                                determined appropriate by the 
                                Secretary).
                                    ``(II) Applicable per instance 
                                amount.--In this clause, the term 
                                `applicable per instance amount' 
                                means--
                                            ``(aa) in the case where 
                                        the deficiency is found to be a 
                                        direct proximate cause of death 
                                        of a resident of the facility, 
                                        an amount not to exceed 
                                        $100,000.
                                            ``(bb) in each case of a 
                                        deficiency where the facility 
                                        is cited for actual harm or 
                                        immediate jeopardy, an amount 
                                        not less than $3,050 and not 
                                        more than $25,000; and
                                            ``(cc) in each case of any 
                                        other deficiency, an amount not 
                                        less than $250 and not to 
                                        exceed $3050.
                                    ``(III) Applicable per day 
                                amount.--In this clause, the term 
                                `applicable per day amount' means--
                                            ``(aa) in each case of a 
                                        deficiency where the facility 
                                        is cited for actual harm or 
                                        immediate jeopardy, an amount 
                                        not less than $3,050 and not 
                                        more than $25,000 and
                                            ``(bb) in each case of any 
                                        other deficiency, an amount not 
                                        less than $250 and not to 
                                        exceed $3,050.
                                    ``(IV) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclauses (V) and (VI), in 
                                the case where a facility self-reports 
                                and promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(V) Prohibition on reduction for 
                                certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary 
                                        may not reduce under subclause 
                                        (IV) the amount of a penalty if 
                                        the deficiency is a repeat 
                                        deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary 
                                        may not reduce under subclause 
                                        (IV) the amount of a penalty if 
                                        the penalty is imposed for a 
                                        deficiency described in 
                                        subclause (II)(aa) or (III)(aa) 
                                        and the actual harm or 
                                        widespread harm immediately 
                                        jeopardizes the health or 
                                        safety of a resident or 
                                        residents of the facility, or 
                                        if the penalty is imposed for a 
                                        deficiency described in 
                                        subclause (II)(bb).
                                    ``(VI) Limitation on aggregate 
                                reductions.--The aggregate reduction in 
                                a penalty under subclause (IV) may not 
                                exceed 35 percent on the basis of self-
                                reporting, on the basis of a waiver or 
                                an appeal (as provided for under 
                                regulations under section 488.436 of 
                                title 42, Code of Federal Regulations), 
                                or on the basis of both.
                                    ``(VII) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary--
                                            ``(aa) subject to item 
                                        (cc), shall, not later than 30 
                                        days after the date of 
                                        imposition of the penalty, 
                                        provide the opportunity for the 
                                        facility to participate in an 
                                        independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty, but such opportunity 
                                        shall not affect the 
                                        responsibility of the State 
                                        survey agency for making final 
                                        recommendations for such 
                                        penalties;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, shall not 
                                        impose a penalty for any day 
                                        during the period beginning on 
                                        the initial day of the 
                                        imposition of the penalty and 
                                        ending on the day on which the 
                                        informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities under quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management, and other 
                                        activities approved by the 
                                        Secretary).
                                    ``(VIII) Procedure.--The provisions 
                                of section 1128A (other than 
                                subsections (a) and (b) and except to 
                                the extent that such provisions require 
                                a hearing prior to the imposition of a 
                                civil money penalty) shall apply to a 
                                civil money penalty under this clause 
                                in the same manner as such provisions 
                                apply to a penalty or proceeding under 
                                section 1128A(a).''.
            (2) Conforming amendment.--The second sentence of section 
        1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5)) 
        is amended by inserting ``(ii),''after ``(i),''.
    (b) Nursing Facilities.--
            (1) Penalties imposed by the state.--
                    (A) In general.--Section 1919(h)(2) of the Social 
                Security Act (42 U.S.C. 1396r(h)(2)) is amended--
                            (i) in subparagraph (A)(ii), by striking 
                        the first sentence and inserting the following: 
                        ``A civil money penalty in accordance with 
                        subparagraph (G).''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(G) Civil money penalties.--
                            ``(i) In general.--The State may impose a 
                        civil money penalty under subparagraph (A)(ii) 
                        in the applicable per instance or per day 
                        amount (as defined in subclause (II) and (III)) 
                        for each day or instance, respectively, of 
                        noncompliance (as determined appropriate by the 
                        Secretary).
                            ``(ii) Applicable per instance amount.--In 
                        this subparagraph, the term `applicable per 
                        instance amount' means--
                                    ``(I) in the case where the 
                                deficiency is found to be a direct 
                                proximate cause of death of a resident 
                                of the facility, an amount not to 
                                exceed $100,000.
                                    ``(II) in each case of a deficiency 
                                where the facility is cited for actual 
                                harm or immediate jeopardy, an amount 
                                not less than $3,050 and not more than 
                                $25,000; and
                                    ``(III) in each case of any other 
                                deficiency, an amount not less than 
                                $250 and not to exceed $3050.
                            ``(iii) Applicable per day amount.--In this 
                        subparagraph, the term `applicable per day 
                        amount' means--
                                    ``(I) in each case of a deficiency 
                                where the facility is cited for actual 
                                harm or immediate jeopardy, an amount 
                                not less than $3,050 and not more than 
                                $25,000 and
                                    ``(II) in each case of any other 
                                deficiency, an amount not less than 
                                $250 and not to exceed $3,050.
                            ``(iv) Reduction of civil money penalties 
                        in certain circumstances.--Subject to clauses 
                        (v) and (vi), in the case where a facility 
                        self-reports and promptly corrects a deficiency 
                        for which a penalty was imposed under 
                        subparagraph (A)(ii) not later than 10 calendar 
                        days after the date of such imposition, the 
                        State may reduce the amount of the penalty 
                        imposed by not more than 50 percent.
                            ``(v) Prohibition on reduction for certain 
                        deficiencies.--
                                    ``(I) Repeat deficiencies.--The 
                                State may not reduce under clause (iv) 
                                the amount of a penalty if the State 
                                had reduced a penalty imposed on the 
                                facility in the preceding year under 
                                such clause with respect to a repeat 
                                deficiency.
                                    ``(II) Certain other 
                                deficiencies.--The State may not reduce 
                                under clause (iv) the amount of a 
                                penalty if the penalty is imposed for a 
                                deficiency described in clause (ii)(II) 
                                or (iii)(I) and the actual harm or 
                                widespread harm that immediately 
                                jeopardizes the health or safety of a 
                                resident or residents of the facility, 
                                or if the penalty is imposed for a 
                                deficiency described in clause (ii)(I).
                                    ``(III) Limitation on aggregate 
                                reductions.--The aggregate reduction in 
                                a penalty under clause (iv) may not 
                                exceed 35 percent on the basis of self-
                                reporting, on the basis of a waiver or 
                                an appeal (as provided for under 
                                regulations under section 488.436 of 
                                title 42, Code of Federal Regulations), 
                                or on the basis of both.
                            ``(vi) Collection of civil money 
                        penalties.--In the case of a civil money 
                        penalty imposed under subparagraph (A)(ii), the 
                        State--
                                    ``(I) subject to subclause (III), 
                                shall, not later than 30 days after the 
                                date of imposition of the penalty, 
                                provide the opportunity for the 
                                facility to participate in an 
                                independent informal dispute resolution 
                                process which generates a written 
                                record prior to the collection of such 
                                penalty, but such opportunity shall not 
                                affect the responsibility of the State 
                                survey agency for making final 
                                recommendations for such penalties;
                                    ``(II) in the case where the 
                                penalty is imposed for each day of 
                                noncompliance, shall not impose a 
                                penalty for any day during the period 
                                beginning on the initial day of the 
                                imposition of the penalty and ending on 
                                the day on which the informal dispute 
                                resolution process under subclause (I) 
                                is completed;
                                    ``(III) may provide for the 
                                collection of such civil money penalty 
                                and the placement of such amounts 
                                collected in an escrow account under 
                                the direction of the State on the 
                                earlier of the date on which the 
                                informal dispute resolution process 
                                under subclause (I) is completed or the 
                                date that is 90 days after the date of 
                                the imposition of the penalty;
                                    ``(IV) may provide that such 
                                amounts collected are kept in such 
                                account pending the resolution of any 
                                subsequent appeals;
                                    ``(V) in the case where the 
                                facility successfully appeals the 
                                penalty, may provide for the return of 
                                such amounts collected (plus interest) 
                                to the facility; and
                                    ``(VI) in the case where all such 
                                appeals are unsuccessful, may provide 
                                that such funds collected shall be used 
                                for the purposes described in the 
                                second sentence of subparagraph 
                                (A)(ii).''.
                    (B) Conforming amendment.--The second sentence of 
                section 1919(h)(2)(A)(ii) of the Social Security Act 
                (42 U.S.C. 1396r(h)(2)(A)(ii)) is amended by inserting 
                before the period at the end the following: ``, and 
                some portion of such funds may be used to support 
                activities that benefit residents, including assistance 
                to support and protect residents of a facility that 
                closes (voluntarily or involuntarily) or is decertified 
                (including offsetting costs of relocating residents to 
                home and community-based settings or another facility), 
                projects that support resident and family councils and 
                other consumer involvement in assuring quality care in 
                facilities, and facility improvement initiatives 
                approved by the Secretary (including joint training of 
                facility staff and surveyors, providing technical 
                assistance to facilities under quality assurance 
                programs, the appointment of temporary management, and 
                other activities approved by the Secretary)''.
            (2) Penalties imposed by the secretary.--
                    (A) In general.--Section 1919(h)(3)(C)(ii) of the 
                Social Security Act (42 U.S.C. 1396r(h)(3)(C)) is 
                amended to read as follows:
                            ``(ii) Authority with respect to civil 
                        money penalties.--
                                    ``(I) Amount.--Subject to subclause 
                                (II), the Secretary may impose a civil 
                                money penalty in an amount not to 
                                exceed $10,000 for each day or each 
                                instance of noncompliance (as 
                                determined appropriate by the 
                                Secretary).
                                    ``(II) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibition on reduction 
                                for repeat deficiencies.--The Secretary 
                                may not reduce the amount of a penalty 
                                under subclause (II) if the Secretary 
                                had reduced a penalty imposed on the 
                                facility in the preceding year under 
                                such subclause with respect to a repeat 
                                deficiency.
                                    ``(IV) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary--
                                            ``(aa) subject to item 
                                        (bb), shall, not later than 30 
                                        days after the date of 
                                        imposition of the penalty, 
                                        provide the opportunity for the 
                                        facility to participate in an 
                                        independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, shall not 
                                        impose a penalty for any day 
                                        during the period beginning on 
                                        the initial day of the 
                                        imposition of the penalty and 
                                        ending on the day on which the 
                                        informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities under quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management, and other 
                                        activities approved by the 
                                        Secretary).
                                    ``(V) Procedure.--The provisions of 
                                section 1128A (other than subsections 
                                (a) and (b) and except to the extent 
                                that such provisions require a hearing 
                                prior to the imposition of a civil 
                                money penalty) shall apply to a civil 
                                money penalty under this clause in the 
                                same manner as such provisions apply to 
                                a penalty or proceeding under section 
                                1128A(a).''.
                    (B) Conforming amendment.--Section 1919(h)(8) of 
                the Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is 
                amended by inserting ``and in paragraph (3)(C)(ii)'' 
                after ``paragraph (2)(A)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary, in consultation with the 
        Inspector General of the Department of Health and Human 
        Services, shall establish a pilot program (in this section 
        referred to as the ``pilot program'') to develop, test, and 
        implement use of an independent monitor to oversee interstate 
        and large intrastate chains of skilled nursing facilities and 
        nursing facilities.
            (2) Selection.--The Secretary shall select chains of 
        skilled nursing facilities and nursing facilities described in 
        paragraph (1) to participate in the pilot program from among 
        those chains that submit an application to the Secretary at 
        such time, in such manner, and containing such information as 
        the Secretary may require.
            (3) Duration.--The Secretary shall conduct the pilot 
        program for a two-year period.
            (4) Implementation.--The Secretary shall implement the 
        pilot program not later than one year after the date of the 
        enactment of this Act.
    (b) Requirements.--The Secretary shall evaluate chains selected to 
participate in the pilot program based on criteria selected by the 
Secretary, including where evidence suggests that one or more 
facilities of the chain are experiencing serious safety and quality of 
care problems. Such criteria may include the evaluation of a chain that 
includes one or more facilities participating in the ``Special Focus 
Facility'' program (or a successor program) or one or more facilities 
with a record of repeated serious safety and quality of care 
deficiencies.
    (c) Responsibilities of the Independent Monitor.--An independent 
monitor that enters into a contract with the Secretary to participate 
in the conduct of such program shall--
            (1) conduct periodic reviews and prepare root-cause quality 
        and deficiency analyses of a chain to assess if facilities of 
        the chain are in compliance with State and Federal laws and 
        regulations applicable to the facilities;
            (2) undertake sustained oversight of the chain, whether 
        publicly or privately held, to involve the owners of the chain 
        and the principal business partners of such owners in 
        facilitating compliance by facilities of the chain with State 
        and Federal laws and regulations applicable to the facilities;
            (3) analyze the management structure, distribution of 
        expenditures, and nurse staffing levels of facilities of the 
        chain in relation to resident census, staff turnover rates, and 
        tenure;
            (4) report findings and recommendations with respect to 
        such reviews, analyses, and oversight to the chain and 
        facilities of the chain, to the Secretary and to relevant 
        States; and
            (5) publish the results of such reviews, analyses, and 
        oversight.
    (d) Implementation of Recommendations.--
            (1) Receipt of finding by chain.--Not later than 10 days 
        after receipt of a finding of an independent monitor under 
        subsection (c)(4), a chain participating in the pilot program 
        shall submit to the independent monitor a report--
                    (A) outlining corrective actions the chain will 
                take to implement the recommendations in such report; 
                or
                    (B) indicating that the chain will not implement 
                such recommendations and why it will not do so.
            (2) Receipt of report by independent monitor.--Not later 
        than 10 days after the date of receipt of a report submitted by 
        a chain under paragraph (1), an independent monitor shall 
        finalize its recommendations and submit a report to the chain 
        and facilities of the chain, the Secretary, and the State (or 
        States) involved, as appropriate, containing such final 
        recommendations.
    (e) Cost of Appointment.--A chain shall be responsible for a 
portion of the costs associated with the appointment of independent 
monitors under the pilot program. The chain shall pay such portion to 
the Secretary (in an amount and in accordance with procedures 
established by the Secretary).
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary for the purpose of carrying out 
the pilot program.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
            (1) Facility.--The term ``facility'' means a skilled 
        nursing facility or a nursing facility.
            (2) Nursing facility.--The term ``nursing facility'' has 
        the meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, acting through the Assistant 
        Secretary for Planning and Evaluation.
            (4) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) 
        of the Social Security Act (42 U.S.C. 1395(a)).
    (i) Evaluation and Report.--
            (1) Evaluation.--The Inspector General of the Department of 
        Health and Human Services shall evaluate the pilot program. 
        Such evaluation shall--
                    (A) determine whether the independent monitor 
                program should be established on a permanent basis; and
                    (B) if the Inspector General determines that the 
                independent monitor program should be established on a 
                permanent basis, recommend appropriate procedures and 
                mechanisms for such establishment.
            (2) Report.--Not later than 180 days after the completion 
        of the pilot program, the Inspector General shall submit to 
        Congress and the Secretary a report containing the results of 
        the evaluation conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Inspector General determines appropriate.

SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(c) of the Social Security Act 
        (42 U.S.C. 1395i-3(c)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Notification of facility closure.--
                    ``(A) In general.--Any individual who is the 
                administrator of a skilled nursing facility must--
                            ``(i) submit to the Secretary, the State 
                        long-term care ombudsman, residents of the 
                        facility, and the legal representatives of such 
                        residents or other responsible parties, written 
                        notification of an impending closure--
                                    ``(I) subject to subclause (II), 
                                not later than the date that is 60 days 
                                prior to the date of such closure; and
                                    ``(II) in the case of a facility 
                                where the Secretary terminates the 
                                facility's participation under this 
                                title, not later than the date that the 
                                Secretary determines appropriate;
                            ``(ii) ensure that the facility does not 
                        admit any new residents on or after the date on 
                        which such written notification is submitted; 
                        and
                            ``(iii) include in the notice a plan for 
                        the transfer and adequate relocation of the 
                        residents of the facility by a specified date 
                        prior to closure that has been approved by the 
                        State, including assurances that the residents 
                        will be transferred to the most appropriate 
                        facility or other setting in terms of quality, 
                        services, and location, taking into 
                        consideration the needs and best interests of 
                        each resident.
                    ``(B) Relocation.--
                            ``(i) In general.--The State shall ensure 
                        that, before a facility closes, all residents 
                        of the facility have been successfully 
                        relocated to another facility or an alternative 
                        home and community-based setting.
                            ``(ii) Continuation of payments until 
                        residents relocated.--The Secretary may, as the 
                        Secretary determines appropriate, continue to 
                        make payments under this title with respect to 
                        residents of a facility that has submitted a 
                        notification under subparagraph (A) during the 
                        period beginning on the date such notification 
                        is submitted and ending on the date on which 
                        the resident is successfully relocated.''.
            (2) Conforming amendments.--Section 1819(h)(4) of the 
        Social Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
                    (A) in the first sentence, by striking ``the 
                Secretary shall terminate'' and inserting ``the 
                Secretary, subject to subsection (c)(7), shall 
                terminate''; and
                    (B) in the second sentence, by striking 
                ``subsection (c)(2)'' and inserting ``paragraphs (2) 
                and (7) of subsection (c)''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919(c) of the Social Security Act 
        (42 U.S.C. 1396r(c)) is amended by adding at the end the 
        following new paragraph:
            ``(9) Notification of facility closure.--
                    ``(A) In general.--Any individual who is an 
                administrator of a nursing facility must--
                            ``(i) submit to the Secretary, the State 
                        long-term care ombudsman, residents of the 
                        facility, and the legal representatives of such 
                        residents or other responsible parties, written 
                        notification of an impending closure--
                                    ``(I) subject to subclause (II), 
                                not later than the date that is 60 days 
                                prior to the date of such closure; and
                                    ``(II) in the case of a facility 
                                where the Secretary terminates the 
                                facility's participation under this 
                                title, not later than the date that the 
                                Secretary determines appropriate;
                            ``(ii) ensure that the facility does not 
                        admit any new residents on or after the date on 
                        which such written notification is submitted; 
                        and
                            ``(iii) include in the notice a plan for 
                        the transfer and adequate relocation of the 
                        residents of the facility by a specified date 
                        prior to closure that has been approved by the 
                        State, including assurances that the residents 
                        will be transferred to the most appropriate 
                        facility or other setting in terms of quality, 
                        services, and location, taking into 
                        consideration the needs and best interests of 
                        each resident.
                    ``(B) Relocation.--
                            ``(i) In general.--The State shall ensure 
                        that, before a facility closes, all residents 
                        of the facility have been successfully 
                        relocated to another facility or an alternative 
                        home and community-based setting.
                            ``(ii) Continuation of payments until 
                        residents relocated.--The Secretary may, as the 
                        Secretary determines appropriate, continue to 
                        make payments under this title with respect to 
                        residents of a facility that has submitted a 
                        notification under subparagraph (A) during the 
                        period beginning on the date such notification 
                        is submitted and ending on the date on which 
                        the resident is successfully relocated.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

                    PART 3--IMPROVING STAFF TRAINING

SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--Section 1819(f)(2)(A)(i)(I) of the 
Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by 
inserting ``(including, in the case of initial training and, if the 
Secretary determines appropriate, in the case of ongoing training, 
dementia management training and resident abuse prevention training)'' 
after ``curriculum''.
    (b) Nursing Facilities.--Section 1919(f)(2)(A)(i)(I) of the Social 
Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by inserting 
``(including, in the case of initial training and, if the Secretary 
determines appropriate, in the case of ongoing training, dementia 
management training and resident abuse prevention training)'' after 
``curriculum''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED FOR CERTIFIED NURSE 
              AIDES AND SUPERVISORY STAFF.

    (a) Study.--
            (1) In general.--The Secretary shall conduct a study on the 
        content of training for certified nurse aides and supervisory 
        staff of skilled nursing facilities and nursing facilities. The 
        study shall include an analysis of the following:
                    (A) Whether the number of initial training hours 
                for certified nurse aides required under sections 
                1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) of the 
                Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(II); 
                1396r(f)(2)(A)(i)(II)) should be increased from 75 and, 
                if so, what the required number of initial training 
                hours should be, including any recommendations for the 
                content of such training (including training related to 
                dementia).
                    (B) Whether requirements for ongoing training under 
                such sections 1819(f)(2)(A)(i)(II) and 
                1919(f)(2)(A)(i)(II) should be increased from 12 hours 
                per year, including any recommendations for the content 
                of such training.
            (2) Consultation.--In conducting the analysis under 
        paragraph (1)(A), the Secretary shall consult with States that, 
        as of the date of the enactment of this Act, require more than 
        75 hours of training for certified nurse aides.
            (3) Definitions.--In this section:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services, acting through 
                the Assistant Secretary for Planning and Evaluation.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395(a)).
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

                    Subtitle C--Quality Measurements

SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR QUALITY 
              IMPROVEMENT.

    Title XI of the Social Security Act, as amended by section 1401(a), 
is further amended by adding at the end the following new part:

                     ``Part E--Quality Improvement

   ``establishment of national priorities for performance improvement

    ``Sec. 1191.  (a) Establishment of National Priorities by the 
Secretary.--The Secretary shall establish and periodically update, not 
less frequently than triennially, national priorities for performance 
improvement.
    ``(b) Recommendations for National Priorities.--In establishing and 
updating national priorities under subsection (a), the Secretary shall 
solicit and consider recommendations from multiple outside 
stakeholders.
    ``(c) Considerations in Setting National Priorities.--With respect 
to such priorities, the Secretary shall ensure that priority is given 
to areas in the delivery of health care services in the United States 
that--
            ``(1) contribute to a large burden of disease, including 
        those that address the health care provided to patients with 
        prevalent, high-cost chronic diseases;
            ``(2) have the greatest potential to decrease morbidity and 
        mortality in this country, including those that are designed to 
        eliminate harm to patients;
            ``(3) have the greatest potential for improving the 
        performance, affordability, and patient-centeredness of health 
        care, including those due to variations in care;
            ``(4) address health disparities across groups and areas; 
        and
            ``(5) have the potential for rapid improvement due to 
        existing evidence, standards of care or other reasons.
    ``(d) Definitions.--In this part:
            ``(1) Consensus-based entity.--The term `consensus-based 
        entity' means an entity with a contract with the Secretary 
        under section 1890.
            ``(2) Quality measure.--The term `quality measure' means a 
        national consensus standard for measuring the performance and 
        improvement of population health, or of institutional providers 
        of services, physicians, and other health care practitioners in 
        the delivery of health care services.
    ``(e) Funding.--
            ``(1) In general.--The Secretary shall provide for the 
        transfer, from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 (in such proportion as the 
        Secretary determines appropriate), of $2,000,000, for the 
        activities under this section for each of the fiscal years 2010 
        through 2014.
            ``(2) Authorization of appropriations.--For purposes of 
        carrying out the provisions of this section, in addition to 
        funds otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services $2,000,000 for each of the fiscal 
        years 2010 through 2014.''.

SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; GAO EVALUATION OF DATA 
              COLLECTION PROCESS FOR QUALITY MEASUREMENT.

    Part E of title XI of the Social Security Act, as added by section 
1441, is amended by adding at the end the following new sections:

``SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.

    ``(a) Agreements With Qualified Entities.--
            ``(1) In general.--The Secretary shall enter into 
        agreements with qualified entities to develop quality measures 
        for the delivery of health care services in the United States.
            ``(2) Form of agreements.--The Secretary may carry out 
        paragraph (1) by contract, grant, or otherwise.
            ``(3) Recommendations of consensus-based entity.--In 
        carrying out this section, the Secretary shall--
                    ``(A) seek public input; and
                    ``(B) take into consideration recommendations of 
                the consensus-based entity with a contract with the 
                Secretary under section 1890(a).
    ``(b) Determination of Areas Where Quality Measures Are Required.--
Consistent with the national priorities established under this part and 
with the programs administered by the Centers for Medicare & Medicaid 
Services and in consultation with other relevant Federal agencies, the 
Secretary shall determine areas in which quality measures for assessing 
health care services in the United States are needed.
    ``(c) Development of Quality Measures.--
            ``(1) Patient-centered and population-based measures.--
        Quality measures developed under agreements under subsection 
        (a) shall be designed--
                    ``(A) to assess outcomes and functional status of 
                patients;
                    ``(B) to assess the continuity and coordination of 
                care and care transitions for patients across providers 
                and health care settings, including end of life care;
                    ``(C) to assess patient experience and patient 
                engagement;
                    ``(D) to assess the safety, effectiveness, and 
                timeliness of care;
                    ``(E) to assess health disparities including those 
                associated with individual race, ethnicity, age, 
                gender, place of residence or language;
                    ``(F) to assess the efficiency and resource use in 
                the provision of care;
                    ``(G) to the extent feasible, to be collected as 
                part of health information technologies supporting 
                better delivery of health care services;
                    ``(H) to be available free of charge to users for 
                the use of such measures; and
                    ``(I) to assess delivery of health care services to 
                individuals regardless of age.
            ``(2) Availability of measures.--The Secretary shall make 
        quality measures developed under this section available to the 
        public.
            ``(3) Testing of proposed measures.--The Secretary may use 
        amounts made available under subsection (f) to fund the testing 
        of proposed quality measures by qualified entities. Testing 
        funded under this paragraph shall include testing of the 
        feasibility and usability of proposed measures.
            ``(4) Updating of endorsed measures.--The Secretary may use 
        amounts made available under subsection (f) to fund the 
        updating (and testing, if applicable) by consensus-based 
        entities of quality measures that have been previously endorsed 
        by such an entity as new evidence is developed, in a manner 
        consistent with section 1890(b)(3).
    ``(d) Qualified Entities.--Before entering into agreements with a 
qualified entity, the Secretary shall ensure that the entity is a 
public, nonprofit or academic institution with technical expertise in 
the area of health quality measurement.
    ``(e) Application for Grant.--A grant may be made under this 
section only if an application for the grant is submitted to the 
Secretary and the application is in such form, is made in such manner, 
and contains such agreements, assurances, and information as the 
Secretary determines to be necessary to carry out this section.
    ``(f) Funding.--
            ``(1) In general.--The Secretary shall provide for the 
        transfer, from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 (in such proportion as the 
        Secretary determines appropriate), of $25,000,000, to the 
        Secretary for purposes of carrying out this section for each of 
        the fiscal years 2010 through 2014.
            ``(2) Authorization of appropriations.--For purposes of 
        carrying out the provisions of this section, in addition to 
        funds otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services $25,000,000 for each of the fiscal 
        years 2010 through 2014.

``SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROCESS FOR QUALITY 
              MEASUREMENT.

    ``(a) GAO Evaluations.--The Comptroller General of the United 
States shall conduct periodic evaluations of the implementation of the 
data collection processes for quality measures used by the Secretary.
    ``(b) Considerations.--In carrying out the evaluation under 
subsection (a), the Comptroller General shall determine--
            ``(1) whether the system for the collection of data for 
        quality measures provides for validation of data as relevant 
        and scientifically credible;
            ``(2) whether data collection efforts under the system use 
        the most efficient and cost-effective means in a manner that 
        minimizes administrative burden on persons required to collect 
        data and that adequately protects the privacy of patients' 
        personal health information and provides data security;
            ``(3) whether standards under the system provide for an 
        appropriate opportunity for physicians and other clinicians and 
        institutional providers of services to review and correct 
        findings; and
            ``(4) the extent to which quality measures are consistent 
        with section 1192(c)(1) or result in direct or indirect costs 
        to users of such measures.
    ``(c) Report.--The Comptroller General shall submit reports to 
Congress and to the Secretary containing a description of the findings 
and conclusions of the results of each such evaluation.''.

SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT INTO SELECTION OF 
              QUALITY MEASURES.

    Section 1808 of the Social Security Act (42 U.S.C. 1395b-9) is 
amended by adding at the end the following new subsection:
    ``(d) Multi-stakeholder Pre-rulemaking Input Into Selection of 
Quality Measures.--
            ``(1) List of measures.--Not later than December 1 before 
        each year (beginning with 2011), the Secretary shall make 
        public a list of measures being considered for selection for 
        quality measurement by the Secretary in rulemaking with respect 
        to payment systems under this title beginning in the payment 
        year beginning in such year and for payment systems beginning 
        in the calendar year following such year, as the case may be.
            ``(2) Consultation on selection of endorsed quality 
        measures.--A consensus-based entity that has entered into a 
        contract under section 1890 shall, as part of such contract, 
        convene multi-stakeholder groups to provide recommendations on 
        the selection of individual or composite quality measures, for 
        use in reporting performance information to the public or for 
        use in public health care programs.
            ``(3) Multi-stakeholder input.--Not later than February 1 
        of each year (beginning with 2011), the consensus-based entity 
        described in paragraph (2) shall transmit to the Secretary the 
        recommendations of multi-stakeholder groups provided under 
        paragraph (2). Such recommendations shall be included in the 
        transmissions the consensus-based entity makes to the Secretary 
        under the contract provided for under section 1890.
            ``(4) Requirement for transparency in process.--
                    ``(A) In general.--In convening multi-stakeholder 
                groups under paragraph (2) with respect to the 
                selection of quality measures, the consensus-based 
                entity described in such paragraph shall provide for an 
                open and transparent process for the activities 
                conducted pursuant to such convening.
                    ``(B) Selection of organizations participating in 
                multi-stakeholder groups.--The process under paragraph 
                (2) shall ensure that the selection of representatives 
                of multi-stakeholder groups includes provision for 
                public nominations for, and the opportunity for public 
                comment on, such selection.
            ``(5) Use of input.--The respective proposed rule shall 
        contain a summary of the recommendations made by the multi-
        stakeholder groups under paragraph (2), as well as other 
        comments received regarding the proposed measures, and the 
        extent to which such proposed rule follows such recommendations 
        and the rationale for not following such recommendations.
            ``(6) Multi-stakeholder groups.--For purposes of this 
        subsection, the term `multi-stakeholder groups' means, with 
        respect to a quality measure, a voluntary collaborative of 
        organizations representing persons interested in or affected by 
        the use of such quality measure, such as the following:
                    ``(A) Hospitals and other institutional providers.
                    ``(B) Physicians.
                    ``(C) Health care quality alliances.
                    ``(D) Nurses and other health care practitioners.
                    ``(E) Health plans.
                    ``(F) Patient advocates and consumer groups.
                    ``(G) Employers.
                    ``(H) Public and private purchasers of health care 
                items and services.
                    ``(I) Labor organizations.
                    ``(J) Relevant departments or agencies of the 
                United States.
                    ``(K) Biopharmaceutical companies and manufacturers 
                of medical devices.
                    ``(L) Licensing, credentialing, and accrediting 
                bodies.
            ``(7) Funding.--
                    ``(A) In general.--The Secretary shall provide for 
                the transfer, from the Federal Hospital Insurance Trust 
                Fund under section 1817 and the Federal Supplementary 
                Medical Insurance Trust Fund under section 1841 (in 
                such proportion as the Secretary determines 
                appropriate), of $1,000,000, to the Secretary for 
                purposes of carrying out this subsection for each of 
                the fiscal years 2010 through 2014.
                    ``(B) Authorization of appropriations.--For 
                purposes of carrying out the provisions of this 
                subsection, in addition to funds otherwise available, 
                out of any funds in the Treasury not otherwise 
                appropriated, there are appropriated to the Secretary 
                of Health and Human Services $1,000,000 for each of the 
                fiscal years 2010 through 2014.''.

SEC. 1444. APPLICATION OF QUALITY MEASURES.

    (a) Inpatient Hospital Services.--Section 1886(b)(3)(B) of such Act 
(42 U.S.C. 1395ww(b)(3)(B)) is amended by adding at the end the 
following new clause:
    ``(x)(I) Subject to subclause (II), for purposes of reporting data 
on quality measures for inpatient hospital services furnished during 
fiscal year 2012 and each subsequent fiscal year, the quality measures 
specified under clause (viii) shall be measures selected by the 
Secretary from measures that have been endorsed by the entity with a 
contract with the Secretary under section 1890(a).
    ``(II) In the case of a specified area or medical topic determined 
appropriate by the Secretary for which a feasible and practical quality 
measure has not been endorsed by the entity with a contract under 
section 1890(a), the Secretary may specify a measure that is not so 
endorsed as long as due consideration is given to measures that have 
been endorsed or adopted by a consensus organization identified by the 
Secretary. The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (b) Outpatient Hospital Services.--Section 1833(t)(17) of such Act 
(42 U.S.C. 1395l(t)(17)) is amended by adding at the end the following 
new subparagraph:
                    ``(F) Use of endorsed quality measures.--The 
                provisions of clause (x) of section 1886(b)(3)(C) shall 
                apply to quality measures for covered OPD services 
                under this paragraph in the same manner as such 
                provisions apply to quality measures for inpatient 
                hospital services.''.
    (c) Physicians' Services.--Section 1848(k)(2)(C)(ii) of such Act 
(42 U.S.C. 1395w-4(k)(2)(C)(ii)) is amended by adding at the end the 
following: ``The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (d) Renal Dialysis Services.--Section 1881(h)(2)(B)(ii) of such Act 
(42 U.S.C. 1395rr(h)(2)(B)(ii)) is amended by adding at the end the 
following: ``The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (e) Endorsement of Standards.--Section 1890(b)(2) of the Social 
Security Act (42 U.S.C. 1395aaa(b)(2)) is amended by adding after and 
below subparagraph (B) the following:
        ``If the entity does not endorse a measure, such entity shall 
        explain the reasons and provide suggestions about changes to 
        such measure that might make it a potentially endorsable 
        measure.''.
    (f) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall apply to quality measures applied for 
payment years beginning with 2012 or fiscal year 2012, as the case may 
be.

SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.

    Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) 
is amended by striking ``for each of fiscal years 2009 through 2012'' 
and inserting ``for fiscal year 2009, and $12,000,000 for each of the 
fiscal years 2010 through 2012''

           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.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by section 1631(a), is further amended 
by inserting after section 1128G the following new section:

``SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS' FINANCIAL RELATIONSHIPS 
              WITH MANUFACTURERS AND DISTRIBUTORS OF COVERED DRUGS, 
              DEVICES, BIOLOGICALS, OR MEDICAL SUPPLIES UNDER MEDICARE, 
              MEDICAID, OR CHIP AND WITH ENTITIES THAT BILL FOR 
              SERVICES UNDER MEDICARE.

    ``(a) Reporting of Payments or Other Transfers of Value.--
            ``(1) In general.--Except as provided in this subsection, 
        not later than March 31, 2011 and annually thereafter, each 
        applicable manufacturer or distributor that provides a payment 
        or other transfer of value to a covered recipient, or to an 
        entity or individual at the request of or designated on behalf 
        of a covered recipient, shall submit to the Secretary, in such 
        electronic form as the Secretary shall require, the following 
        information with respect to the preceding calendar year:
                    ``(A) With respect to the covered recipient, the 
                recipient's name, business address, physician 
                specialty, and national provider identifier.
                    ``(B) With respect to the payment or other transfer 
                of value, other than a drug sample--
                            ``(i) its value and date;
                            ``(ii) the name of the related drug, 
                        device, or supply, if available; and
                            ``(iii) a description of its form, 
                        indicated (as appropriate for all that apply) 
                        as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form (as defined 
                                by the Secretary).
                    ``(C) With respect to a drug sample, the name, 
                number, date, and dosage units of the sample.
            ``(2) Aggregate reporting.--Information submitted by an 
        applicable manufacturer or distributor under paragraph (1) 
        shall include the aggregate amount of all payments or other 
        transfers of value provided by the manufacturer or distributor 
        to covered recipients (and to entities or individuals at the 
        request of or designated on behalf of a covered recipient) 
        during the year involved, including all payments and transfers 
        of value regardless of whether such payments or transfer of 
        value were individually disclosed.
            ``(3) Special rule for certain payments or other transfers 
        of value.--In the case where an applicable manufacturer or 
        distributor provides a payment or other transfer of value to an 
        entity or individual at the request of or designated on behalf 
        of a covered recipient, the manufacturer or distributor shall 
        disclose that payment or other transfer of value under the name 
        of the covered recipient.
            ``(4) Delayed reporting for payments made pursuant to 
        product development agreements.--In the case of a payment or 
        other transfer of value made to a covered recipient by an 
        applicable manufacturer or distributor pursuant to a product 
        development agreement for services furnished in connection with 
        the development of a new drug, device, biological, or medical 
        supply, the applicable manufacturer or distributor may report 
        the value and recipient of such payment or other transfer of 
        value in the first reporting period under this subsection in 
        the next reporting deadline after the earlier of the following:
                    ``(A) The date of the approval or clearance of the 
                covered drug, device, biological, or medical supply by 
                the Food and Drug Administration.
                    ``(B) Two calendar years after the date such 
                payment or other transfer of value was made.
            ``(5) Delayed reporting for payments made pursuant to 
        clinical investigations.--In the case of a payment or other 
        transfer of value made to a covered recipient by an applicable 
        manufacturer or distributor in connection with a clinical 
        investigation regarding a new drug, device, biological, or 
        medical supply, the applicable manufacturer or distributor may 
        report as required under this section in the next reporting 
        period under this subsection after the earlier of the 
        following:
                    ``(A) The date that the clinical investigation is 
                registered on the website maintained by the National 
                Institutes of Health pursuant to section 671 of the 
                Food and Drug Administration Amendments Act of 2007.
                    ``(B) Two calendar years after the date such 
                payment or other transfer of value was made.
            ``(6) Confidentiality.--Information described in paragraph 
        (4) or (5) shall be considered confidential and shall not be 
        subject to disclosure under section 552 of title 5, United 
        States Code, or any other similar Federal, State, or local law, 
        until or after the date on which the information is made 
        available to the public under such paragraph.
    ``(b) Reporting of Ownership Interest by Physicians in Hospitals 
and Other Entities That Bill Medicare.--Not later than March 31 of each 
year (beginning with 2011), each hospital or other health care entity 
(not including a Medicare Advantage organization) that bills the 
Secretary under part A or part B of title XVIII for services shall 
report on the ownership shares (other than ownership shares described 
in section 1877(c)) of each physician who, directly or indirectly, owns 
an interest in the entity. In this subsection, the term `physician' 
includes a physician's immediate family members (as defined for 
purposes of section 1877(a)).
    ``(c) Public Availability.--
            ``(1) In general.--The Secretary shall establish procedures 
        to ensure that, not later than September 30, 2011, and on June 
        30 of each year beginning thereafter, the information submitted 
        under subsections (a) and (b), other than information regard 
        drug samples, with respect to the preceding calendar year is 
        made available through an Internet website that--
                    ``(A) is searchable and is in a format that is 
                clear and understandable;
                    ``(B) contains information that is presented by the 
                name of the applicable manufacturer or distributor, the 
                name of the covered recipient, the business address of 
                the covered recipient, the specialty (if applicable) of 
                the covered recipient, the value of the payment or 
                other transfer of value, the date on which the payment 
                or other transfer of value was provided to the covered 
                recipient, the form of the payment or other transfer of 
                value, indicated (as appropriate) under subsection 
                (a)(1)(B)(ii), the nature of the payment or other 
                transfer of value, indicated (as appropriate) under 
                subsection (a)(1)(B)(iii), and the name of the covered 
                drug, device, biological, or medical supply, as 
                applicable;
                    ``(C) contains information that is able to be 
                easily aggregated and downloaded;
                    ``(D) contains a description of any enforcement 
                actions taken to carry out this section, including any 
                penalties imposed under subsection (d), during the 
                preceding year;
                    ``(E) contains background information on industry-
                physician relationships;
                    ``(F) in the case of information submitted with 
                respect to a payment or other transfer of value 
                described in subsection (a)(5), lists such information 
                separately from the other information submitted under 
                subsection (a) and designates such separately listed 
                information as funding for clinical research;
                    ``(G) contains any other information the Secretary 
                determines would be helpful to the average consumer; 
                and
                    ``(H) provides the covered recipient an opportunity 
                to submit corrections to the information made available 
                to the public with respect to the covered recipient.
            ``(2) Accuracy of reporting.--The accuracy of the 
        information that is submitted under subsections (a) and (b) and 
        made available under paragraph (1) shall be the responsibility 
        of the applicable manufacturer or distributor of a covered 
        drug, device, biological, or medical supply reporting under 
        subsection (a) or hospital or other health care entity 
        reporting physician ownership under subsection (b). The 
        Secretary shall establish procedures to ensure that the covered 
        recipient is provided with an opportunity to submit corrections 
        to the manufacturer, distributor, hospital, or other entity 
        reporting under subsection (a) or (b) with regard to 
        information made public with respect to the covered recipient 
        and, under such procedures, the corrections shall be 
        transmitted to the Secretary.
            ``(3) Special rule for drug samples.--Information relating 
        to drug samples provided under subsection (a) shall not be made 
        available to the public by the Secretary but may be made 
        available outside the Department of Health and Human Services 
        by the Secretary for research or legitimate business purposes 
        pursuant to data use agreements.
            ``(4) Special rule for national provider identifiers.--
        Information relating to national provider identifiers provided 
        under subsection (a) shall not be made available to the public 
        by the Secretary but may be made available outside the 
        Department of Health and Human Services by the Secretary for 
        research or legitimate business purposes pursuant to data use 
        agreements.
    ``(d) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), 
                except as provided in paragraph (2), any applicable 
                manufacturer or distributor that fails to submit 
                information required under subsection (a) in a timely 
                manner in accordance with regulations promulgated to 
                carry out such subsection, and any hospital or other 
                entity that fails to submit information required under 
                subsection (b) in a timely manner in accordance with 
                regulations promulgated to carry out such subsection 
                shall be subject to a civil money penalty of not less 
                than $1,000, but not more than $10,000, for each 
                payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                distributor or other entity shall not exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or distributor that knowingly 
                fails to submit information required under subsection 
                (a) in a timely manner in accordance with regulations 
                promulgated to carry out such subsection and any 
                hospital or other entity that fails to submit 
                information required under subsection (b) in a timely 
                manner in accordance with regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall 
                be imposed and collected in the same manner as civil 
                money penalties under subsection (a) of section 1128A 
                are imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) or (b) by an applicable manufacturer, 
                distributor, or entity shall not exceed $1,000,000, or, 
                if greater, 0.1 percentage of the total annual revenues 
                of the manufacturer, distributor, or entity.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.
            ``(4) Enforcement through state attorneys general.--The 
        attorney general of a State, after providing notice to the 
        Secretary of an intent to proceed under this paragraph in a 
        specific case and providing the Secretary with an opportunity 
        to bring an action under this subsection and the Secretary 
        declining such opportunity, may proceed under this subsection 
        against a manufacturer or distributor in the State.
    ``(e) Annual Report to Congress.--Not later than April 1 of each 
year beginning with 2011, the Secretary shall submit to Congress a 
report that includes the following:
            ``(1) The information submitted under this section during 
        the preceding year, aggregated for each applicable manufacturer 
        or distributor of a covered drug, device, biological, or 
        medical supply that submitted such information during such 
        year.
            ``(2) A description of any enforcement actions taken to 
        carry out this section, including any penalties imposed under 
        subsection (d), during the preceding year.
    ``(f) Definitions.--In this section:
            ``(1) Applicable manufacturer; applicable distributor.--The 
        term `applicable manufacturer' means a manufacturer of a 
        covered drug, device, biological, or medical supply, and the 
        term `applicable distributor' means a distributor of a covered 
        drug, device, or medical supply.
            ``(2) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving one or more human 
        subjects, or materials derived from human subjects, in which a 
        drug or device is administered, dispensed, or used.
            ``(3) Covered drug, device, biological, or medical 
        supply.--The term `covered' means, with respect to a drug, 
        device, biological, or medical supply, such a drug, device, 
        biological, or medical supply for which payment is available 
        under title XVIII or a State plan under title XIX or XXI (or a 
        waiver of such a plan).
            ``(4) Covered recipient.--The term `covered recipient' 
        means the following:
                    ``(A) A physician.
                    ``(B) A physician group practice.
                    ``(C) Any other prescriber of a covered drug, 
                device, biological, or medical supply.
                    ``(D) A pharmacy or pharmacist.
                    ``(E) A health insurance issuer, group health plan, 
                or other entity offering a health benefits plan, 
                including any employee of such an issuer, plan, or 
                entity.
                    ``(F) A pharmacy benefit manager, including any 
                employee of such a manager.
                    ``(G) A hospital.
                    ``(H) A medical school.
                    ``(I) A sponsor of a continuing medical education 
                program.
                    ``(J) A patient advocacy or disease specific group.
                    ``(K) A organization of health care professionals.
                    ``(L) A biomedical researcher.
                    ``(M) A group purchasing organization.
            ``(5) Distributor of a covered drug, device, or medical 
        supply.--The term `distributor of a covered drug, device, or 
        medical supply' means any entity which is engaged in the 
        marketing or distribution of a covered drug, device, or medical 
        supply (or any subsidiary of or entity affiliated with such 
        entity), but does not include a wholesale pharmaceutical 
        distributor.
            ``(6) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(7) Knowingly.--The term `knowingly' has the meaning 
        given such term in section 3729(b) of title 31, United States 
        Code.
            ``(8) Manufacturer of a covered drug, device, biological, 
        or medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which 
        is engaged in the production, preparation, propagation, 
        compounding, conversion, processing, marketing, or distribution 
        of a covered drug, device, biological, or medical supply (or 
        any subsidiary of or entity affiliated with such entity).
            ``(9) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value for or of any of the following:
                            ``(i) Gift, food, or entertainment.
                            ``(ii) Travel or trip.
                            ``(iii) Honoraria.
                            ``(iv) Research funding or grant.
                            ``(v) Education or conference funding.
                            ``(vi) Consulting fees.
                            ``(vii) Ownership or investment interest 
                        and royalties or license fee.
                    ``(B) Inclusions.--Subject to subparagraph (C), the 
                term `payment or other transfer of value' includes any 
                compensation, gift, honorarium, speaking fee, 
                consulting fee, travel, services, dividend, profit 
                distribution, stock or stock option grant, or any 
                ownership or investment interest held by a physician in 
                a manufacturer (excluding a dividend or other profit 
                distribution from, or ownership or investment interest 
                in, a publicly traded security or mutual fund (as 
                described in section 1877(c))).
                    ``(C) Exclusions.--The term `payment or other 
                transfer of value' does not include the following:
                            ``(i) Any payment or other transfer of 
                        value provided by an applicable manufacturer or 
                        distributor to a covered recipient where the 
                        amount transferred to, requested by, or 
                        designated on behalf of the covered recipient 
                        does not exceed $5.
                            ``(ii) The loan of a covered device for a 
                        short-term trial period, not to exceed 90 days, 
                        to permit evaluation of the covered device by 
                        the covered recipient.
                            ``(iii) Items or services provided under a 
                        contractual warranty, including the replacement 
                        of a covered device, where the terms of the 
                        warranty are set forth in the purchase or lease 
                        agreement for the covered device.
                            ``(iv) A transfer of anything of value to a 
                        covered recipient when the covered recipient is 
                        a patient and not acting in the professional 
                        capacity of a covered recipient.
                            ``(v) In-kind items used for the provision 
                        of charity care.
                            ``(vi) A dividend or other profit 
                        distribution from, or ownership or investment 
                        interest in, a publicly traded security and 
                        mutual fund (as described in section 1877(c)).
                            ``(vii) Compensation paid by a manufacturer 
                        or distributor of a covered drug, device, 
                        biological, or medical supply to a covered 
                        recipient who is directly employed by and works 
                        solely for such manufacturer or distributor.
                            ``(viii) Any discount or cash rebate.
            ``(10) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r). For purposes of this 
        section, such term does not include a physician who is an 
        employee of the applicable manufacturer that is required to 
        submit information under subsection (a).
    ``(g) Annual Reports to States.--Not later than April 1 of each 
year beginning with 2011, the Secretary shall submit to States a report 
that includes a summary of the information submitted under subsections 
(a) and (d) during the preceding year with respect to covered 
recipients or other hospitals and entities in the State.
    ``(h) Relation to State Laws.--
            ``(1) In general.--Effective on January 1, 2011, subject to 
        paragraph (2), the provisions of this section shall preempt any 
        law or regulation of a State or of a political subdivision of a 
        State that requires an applicable manufacturer and applicable 
        distributor (as such terms are defined in subsection (f)) to 
        disclose or report, in any format, the type of information 
        (described in subsection (a)) regarding a payment or other 
        transfer of value provided by the manufacturer to a covered 
        recipient (as so defined).
            ``(2) No preemption of additional requirements.--Paragraph 
        (1) shall not preempt any law or regulation of a State or of a 
        political subdivision of a State that requires any of the 
        following:
                    ``(A) The disclosure or reporting of information 
                not of the type required to be disclosed or reported 
                under this section.
                    ``(B) The disclosure or reporting, in any format, 
                of the type of information required to be disclosed or 
                reported under this section to a Federal, State, or 
                local governmental agency for public health 
                surveillance, investigation, or other public health 
                purposes or health oversight purposes.
                    ``(C) The discovery or admissibility of information 
                described in this section in a criminal, civil, or 
                administrative proceeding.''.
    (b) Availability of Information From the Disclosure of Financial 
Relationship Report (DFRR).--The Secretary of Health and Human Services 
shall submit to Congress a report on the full results of the Disclosure 
of Physician Financial Relationships surveys required pursuant to 
section 5006 of the Deficit Reduction Act of 2005. Such report shall be 
submitted to Congress not later than the date that is 6 months after 
the date such surveys are collected and shall be made publicly 
available on an Internet website of the Department of Health and Human 
Services.

   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.

    (a) In General.--Title XI of the Social Security Act is amended by 
inserting after section 1138 the following section:

``SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND 
              AMBULATORY SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED 
              INFECTIONS.

    ``(a) Reporting Requirement.--
            ``(1) In general.--The Secretary shall provide that a 
        hospital (as defined in subsection (g)) or ambulatory surgical 
        center meeting the requirements of titles XVIII or XIX may 
        participate in the programs established under such titles 
        (pursuant to the applicable provisions of law, including 
        sections 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in 
        accordance with this section, the hospital or center reports 
        such information on health care-associated infections that 
        develop in the hospital or center (and such demographic 
        information associated with such infections) as the Secretary 
        specifies.
            ``(2) Reporting protocols.-- Such information shall be 
        reported in accordance with reporting protocols established by 
        the Secretary through the Director of the Centers for Disease 
        Control and Prevention (in this section referred to as the 
        `CDC') and to the National Healthcare Safety Network of the CDC 
        or under such another reporting system of such Centers as 
        determined appropriate by the Secretary in consultation with 
        such Director.
            ``(3) Coordination with hit.--The Secretary, through the 
        Director of the CDC and the Office of the National Coordinator 
        for Health Information Technology, shall ensure that the 
        transmission of information under this subsection is 
        coordinated with systems established under the HITECH Act, 
        where appropriate.
            ``(4) Procedures to ensure the validity of information.--
        The Secretary shall establish procedures regarding the validity 
        of the information submitted under this subsection in order to 
        ensure that such information is appropriately compared across 
        hospitals and centers. Such procedures shall address failures 
        to report as well as errors in reporting.
            ``(5) Implementation.--Not later than 1 year after the date 
        of enactment of this section, the Secretary, through the 
        Director of CDC, shall promulgate regulations to carry out this 
        section.
    ``(b) Public Posting of Information.--The Secretary shall promptly 
post, on the official public Internet site of the Department of Health 
and Human Services, the information reported under subsection (a). Such 
information shall be set forth in a manner that allows for the 
comparison of information on health care-associated infections--
            ``(1) among hospitals and ambulatory surgical centers; and
            ``(2) by demographic information.
    ``(c) Annual Report to Congress.--On an annual basis the Secretary 
shall submit to the Congress a report that summarizes each of the 
following:
            ``(1) The number and types of health care-associated 
        infections reported under subsection (a) in hospitals and 
        ambulatory surgical centers during such year.
            ``(2) Factors that contribute to the occurrence of such 
        infections, including health care worker immunization rates.
            ``(3) Based on the most recent information available to the 
        Secretary on the composition of the professional staff of 
        hospitals and ambulatory surgical centers, the number of 
        certified infection control professionals on the staff of 
        hospitals and ambulatory surgical centers.
            ``(4) The total increases or decreases in health care costs 
        that resulted from increases or decreases in the rates of 
        occurrence of each such type of infection during such year.
            ``(5) Recommendations, in coordination with the Center for 
        Quality Improvement established under section 931 of the Public 
        Health Service Act, for best practices to eliminate the rates 
        of occurrence of each such type of infection in hospitals and 
        ambulatory surgical centers.
    ``(d) Non-preemption of State Laws.--Nothing in this section shall 
be construed as preempting or otherwise affecting any provision of 
State law relating to the disclosure of information on health care-
associated infections or patient safety procedures for a hospital or 
ambulatory surgical center.
    ``(e) Health Care-associated Infection.--For purposes of this 
section:
            ``(1) In general.--The term `health care-associated 
        infection' means an infection that develops in a patient who 
        has received care in any institutional setting where health 
        care is delivered and is related to receiving health care.
            ``(2) Related to receiving health care.--The term `related 
        to receiving health care', with respect to an infection, means 
        that the infection was not incubating or present at the time 
        health care was provided.
    ``(f) Application to Critical Access Hospitals.--For purposes of 
this section, the term `hospital' includes a critical access hospital, 
as defined in section 1861(mm)(1).''.
    (b) Effective Date.--With respect to section 1138A of the Social 
Security Act (as inserted by subsection (a) of this section), the 
requirement under such section that hospitals and ambulatory surgical 
centers submit reports takes effect on such date (not later than 2 
years after the date of the enactment of this Act) as the Secretary of 
Health and Human Services shall specify. In order to meet such 
deadline, the Secretary may implement such section through guidance or 
other instructions.
    (c) GAO Report.--Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to Congress a report on the program established under 
section 1138A of the Social Security Act, as inserted by subsection 
(a). Such report shall include an analysis of the appropriateness of 
the types of information required for submission, compliance with 
reporting requirements, the success of the validity procedures 
established, and any conflict or overlap between the reporting required 
under such section and any other reporting systems mandated by either 
the States or the Federal Government.
    (d) Report on Additional Data.--Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Health and Human 
Services shall submit to the Congress a report on the appropriateness 
of expanding the requirements under such section to include additional 
information (such as health care worker immunization rates), in order 
to improve health care quality and patient safety.

              TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION

SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (3) in paragraph (7)(E), by inserting ``and paragraph (8)'' 
        after ``this paragraph''; and
            (4) by adding at the end the following new paragraph:
            ``(8) Additional redistribution of unused residency 
        positions.--
                    ``(A) Reductions in limit based on unused 
                positions.--
                            ``(i) Programs subject to reduction.--If a 
                        hospital's reference resident level (specified 
                        in clause (ii)) is less than the otherwise 
                        applicable resident limit (as defined in 
                        subparagraph (C)(ii)), effective for portions 
                        of cost reporting periods occurring on or after 
                        July 1, 2011, the otherwise applicable resident 
                        limit shall be reduced by 90 percent of the 
                        difference between such otherwise applicable 
                        resident limit and such reference resident 
                        level.
                            ``(ii) Reference resident level.--
                                    ``(I) In general.--Except as 
                                otherwise provided in a subsequent 
                                subclause, the reference resident level 
                                specified in this clause for a hospital 
                                is the highest resident level for any 
                                of the 3 most recent cost reporting 
                                periods (ending before the date of the 
                                enactment of this paragraph) of the 
                                hospital for which a cost report has 
                                been settled (or, if not, submitted 
                                (subject to audit)), as determined by 
                                the Secretary.
                                    ``(II) Use of most recent 
                                accounting period to recognize 
                                expansion of existing programs.--If a 
                                hospital submits a timely request to 
                                increase its resident level due to an 
                                expansion, or planned expansion, of an 
                                existing residency training program 
                                that is not reflected on the most 
                                recent settled or submitted cost 
                                report, after audit and subject to the 
                                discretion of the Secretary, subject to 
                                subclause (IV), the reference resident 
                                level for such hospital is the resident 
                                level that includes the additional 
                                residents attributable to such 
                                expansion or establishment, as 
                                determined by the Secretary. The 
                                Secretary is authorized to determine an 
                                alternative reference resident level 
                                for a hospital that submitted to the 
                                Secretary a timely request, before the 
                                start of the 2009-2010 academic year, 
                                for an increase in its reference 
                                resident level due to a planned 
                                expansion.
                                    ``(III) Special provider 
                                agreement.--In the case of a hospital 
                                described in paragraph (4)(H)(v), the 
                                reference resident level specified in 
                                this clause is the limitation 
                                applicable under subclause (I) of such 
                                paragraph.
                                    ``(IV) Previous redistribution.--
                                The reference resident level specified 
                                in this clause for a hospital shall be 
                                increased to the extent required to 
                                take into account an increase in 
                                resident positions made available to 
                                the hospital under paragraph (7)(B) 
                                that are not otherwise taken into 
                                account under a previous subclause.
                            ``(iii) Affiliation.--The provisions of 
                        clause (i) shall be applied to hospitals which 
                        are members of the same affiliated group (as 
                        defined by the Secretary under paragraph 
                        (4)(H)(ii)) and to the extent the hospitals can 
                        demonstrate that they are filling any 
                        additional  resident slots allocated to other 
                        hospitals through an affiliation agreement, the 
                        Secretary shall adjust the determination of 
                        available slots accordingly, or which the 
                        Secretary otherwise has permitted the resident 
                        positions (under section 402 of the Social 
                        Security Amendments of 1967) to be aggregated 
                        for purposes of applying the resident position 
                        limitations under this subsection.
                    ``(B) Redistribution.--
                            ``(i) In general.--The Secretary shall 
                        increase the otherwise applicable resident 
                        limit for each qualifying hospital that submits 
                        an application under this subparagraph by such 
                        number as the Secretary may approve for 
                        portions of cost reporting periods occurring on 
                        or after July 1, 2011. The estimated aggregate 
                        number of increases in the otherwise applicable 
                        resident limit under this subparagraph may not 
                        exceed the Secretary's estimate of the 
                        aggregate reduction in such limits attributable 
                        to subparagraph (A).
                            ``(ii) Requirements for qualifying 
                        hospitals.--A hospital is not a qualifying 
                        hospital for purposes of this paragraph unless 
                        the following requirements are met:
                                    ``(I) Maintenance of primary care 
                                resident level.--The hospital maintains 
                                the number of primary care residents at 
                                a level that is not less than the base 
                                level of primary care residents 
                                increased by the number of additional 
                                primary care resident positions 
                                provided to the hospital under this 
                                subparagraph. For purposes of this 
                                subparagraph, the `base level of 
                                primary care residents' for a hospital 
                                is the level of such residents as of a 
                                base period (specified by the 
                                Secretary), determined without regard 
                                to whether such positions were in 
                                excess of the otherwise applicable 
                                resident limit for such period but 
                                taking into account the application of 
                                subclauses (II) and (III) of 
                                subparagraph (A)(ii).
                                    ``(II) Dedicated assignment of 
                                additional resident positions to 
                                primary care.--The hospital assigns all 
                                such additional resident positions for 
                                primary care residents.
                                    ``(III) Accreditation.--The 
                                hospital's residency programs in 
                                primary care are fully accredited or, 
                                in the case of a residency training 
                                program not in operation as of the base 
                                year, the hospital is actively applying 
                                for such accreditation for the program 
                                for such additional resident positions 
                                (as determined by the Secretary).
                            ``(iii) Considerations in redistribution.--
                        In determining for which qualifying hospitals 
                        the increase in the otherwise applicable 
                        resident limit is provided under this 
                        subparagraph, the Secretary shall take into 
                        account the demonstrated likelihood of the 
                        hospital filling the positions within the first 
                        3 cost reporting periods beginning on or after 
                        July 1, 2011, made available under this 
                        subparagraph, as determined by the Secretary.
                            ``(iv) Priority for certain hospitals.--In 
                        determining for which qualifying hospitals the 
                        increase in the otherwise applicable resident 
                        limit is provided under this subparagraph, the 
                        Secretary shall distribute the increase to 
                        qualifying hospitals based on the following 
                        criteria:
                                    ``(I) The Secretary shall give 
                                preference to hospitals that had a 
                                reduction in resident training 
                                positions under subparagraph (A).
                                    ``(II) The Secretary shall give 
                                preference to hospitals with 3-year 
                                primary care residency training 
                                programs, such as family practice and 
                                general internal medicine.
                                    ``(III) The Secretary shall give 
                                preference to hospitals insofar as they 
                                have in effect formal arrangements (as 
                                determined by the Secretary) that place 
                                greater emphasis upon training in 
                                Federally qualified health centers, 
                                rural health clinics, and other 
                                nonprovider settings, and to hospitals 
                                that receive additional payments under 
                                subsection (d)(5)(F) and emphasize 
                                training in an outpatient department.
                                    ``(IV) The Secretary shall give 
                                preference to hospitals with a number 
                                of positions (as of July 1, 2009) in 
                                excess of the otherwise applicable 
                                resident limit for such period.
                                    ``(V) The Secretary shall give 
                                preference to hospitals that place 
                                greater emphasis upon training in a 
                                health professional shortage area 
                                (designated under section 332 of the 
                                Public Health Service Act) or a health 
                                professional needs area (designated 
                                under section 2211 of such Act).
                                    ``(VI) The Secretary shall give 
                                preference to hospitals in States that 
                                have low resident-to-population ratios 
                                (including a greater preference for 
                                those States with lower resident-to-
                                population ratios).
                            ``(v) Limitation.--In no case shall more 
                        than 20 full-time equivalent additional 
                        residency positions be made available under 
                        this subparagraph with respect to any hospital.
                            ``(vi) Application of per resident amounts 
                        for primary care.--With respect to additional 
                        residency positions in a hospital attributable 
                        to the increase provided under this 
                        subparagraph, the approved FTE resident amounts 
                        are deemed to be equal to the hospital per 
                        resident amounts for primary care and 
                        nonprimary care computed under paragraph (2)(D) 
                        for that hospital.
                            ``(vii) Distribution.--The Secretary shall 
                        distribute the increase in resident training 
                        positions to qualifying hospitals under this 
                        subparagraph not later than July 1, 2011.
                    ``(C) Resident level and limit defined.--In this 
                paragraph:
                            ``(i) The term `resident level' has the 
                        meaning given such term in paragraph (7)(C)(i).
                            ``(ii) The term `otherwise applicable 
                        resident limit' means, with respect to a 
                        hospital, the limit otherwise applicable under 
                        subparagraphs (F)(i) and (H) of paragraph (4) 
                        on the resident level for the hospital 
                        determined without regard to this paragraph but 
                        taking into account paragraph (7)(A).
                    ``(D) Maintenance of primary care resident level.--
                In carrying out this paragraph, the Secretary shall 
                require hospitals that receive additional resident 
                positions under subparagraph (B)--
                            ``(i) to maintain records, and periodically 
                        report to the Secretary, on the number of 
                        primary care residents in its residency 
                        training programs; and
                            ``(ii) as a condition of payment for a cost 
                        reporting period under this subsection for such 
                        positions, to maintain the level of such 
                        positions at not less than the sum of--
                                    ``(I) the base level of primary 
                                care resident positions (as determined 
                                under subparagraph (B)(ii)(I)) before 
                                receiving such additional positions; 
                                and
                                    ``(II) the number of such 
                                additional positions.''.
    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the third 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming provision.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
    ``(x) For discharges occurring on or after July 1, 2011, insofar as 
an additional payment amount under this subparagraph is attributable to 
resident positions distributed to a hospital under subsection 
(h)(8)(B), the indirect teaching adjustment factor shall be computed in 
the same manner as provided under clause (ii) with respect to such 
resident positions.''.
    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that 
follows and inserting ``paragraphs (7) and (8) of subsection (h) of 
section 1886 of the Social Security Act.''.

SEC. 1502. INCREASING TRAINING IN NONPROVIDER SETTINGS.

    (a) Direct GME.--Section 1886(h)(4)(E) of the Social Security Act 
(42 U.S.C. 1395ww(h)) is amended--
            (1) by designating the first sentence as a clause (i) with 
        the heading ``In general.--'' and appropriate indentation;
            (2) by striking ``shall be counted and that all the time'' 
        and inserting ``shall be counted and that--
                                    ``(I) effective for cost reporting 
                                periods beginning before July 1, 2009, 
                                all the time'';
            (3) in subclause (I), as inserted by paragraph (1), by 
        striking the period at the end and inserting ``; and''; and
                    (A) by inserting after subclause (I), as so 
                inserted, the following:
                                    ``(II) effective for cost reporting 
                                periods beginning on or after July 1, 
                                2009, all the time so spent by a 
                                resident shall be counted towards the 
                                determination of full-time equivalency, 
                                without regard to the setting in which 
                                the activities are performed, if the 
                                hospital incurs the costs of the 
                                stipends and fringe benefits of the 
                                resident during the time the resident 
                                spends in that setting.
                        Any hospital claiming under this subparagraph 
                        for time spent in a nonprovider setting shall 
                        maintain and make available to the Secretary 
                        records regarding the amount of such time and 
                        such amount in comparison with amounts of such 
                        time in such base year as the Secretary shall 
                        specify.''.
    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
            (1) by striking ``(iv) Effective for discharges occurring 
        on or after October 1, 1997'' and inserting ``(iv)(I) Effective 
        for discharges occurring on or after October 1, 1997, and 
        before July 1, 2009''; and
            (2) by inserting after subclause (I), as inserted by 
        paragraph (1), the following new subclause:
            ``(II) Effective for discharges occurring on or after July 
        1, 2009, all the time spent by an intern or resident in patient 
        care activities at an entity in a nonprovider setting shall be 
        counted towards the determination of full-time equivalency if 
        the hospital incurs the costs of the stipends and fringe 
        benefits of the intern or resident during the time the intern 
        or resident spends in that setting.''.
    (c) OIG Study on Impact on Training.--The Inspector General of the 
Department of Health and Human Services shall analyze the data 
collected by the Secretary of Health and Human Services from the 
records made available to the Secretary under section 1886(h)(4)(E) of 
the Social Security Act, as amended by subsection (a), in order to 
assess the extent to which there is an increase in time spent by 
medical residents in training in nonprovider settings as a result of 
the amendments made by this section. Not later than 4 years after the 
date of the enactment of this Act, the Inspector General shall submit a 
report to Congress on such analysis and assessment.
    (d) Demonstration Project for Approved Teaching Health Centers.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a demonstration project under which an approved 
        teaching health center (as defined in paragraph (3)) would be 
        eligible for payment under subsections (h) and (k) of section 
        1886 of the Social Security Act (42 U.S.C. 1395ww) of amounts 
        for its own direct costs of graduate medical education 
        activities for primary care residents, as well as for the 
        direct costs of graduate medical education activities of its 
        contracting hospital for such residents, in a manner similar to 
        the manner in which such payments would be made to a hospital 
        if the hospital were to operate such a program.
            (2) Conditions.--Under the demonstration project--
                    (A) an approved teaching health center shall 
                contract with an accredited teaching hospital to carry 
                out the inpatient responsibilities of the primary care 
                residency program of the hospital involved and is 
                responsible for payment to the hospital for the 
                hospital's costs of the salary and fringe benefits for 
                residents in the program;
                    (B) the number of primary care residents of the 
                center shall not count against the contracting 
                hospital's resident limit; and
                    (C) the contracting hospital shall agree not to 
                diminish the number of residents in its primary care 
                residency training program.
            (3) Approved teaching health center defined.--In this 
        subsection, the term ``approved teaching health center'' means 
        a nonprovider setting, such as a Federally qualified health 
        center or rural health clinic (as defined in section 1861(aa) 
        of the Social Security Act), that develops and operates an 
        accredited primary care residency program for which funding 
        would be available if it were operated by a hospital.

SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) Direct GME.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(E), as amended by section 1502(a)--
                    (A) in clause (i), by striking ``Such rules'' and 
                inserting ``Subject to clause (ii), such rules''; and
                    (B) by adding at the end the following new clause:
                            ``(ii) Treatment of certain nonprovider and 
                        didactic activities.--Such rules shall provide 
                        that all time spent by an intern or resident in 
                        an approved medical residency training program 
                        in a nonprovider setting that is primarily 
                        engaged in furnishing patient care (as defined 
                        in paragraph (5)(K)) in nonpatient care 
                        activities, such as didactic conferences and 
                        seminars, but not including research not 
                        associated with the treatment or diagnosis of a 
                        particular patient, as such time and activities 
                        are defined by the Secretary, shall be counted 
                        toward the determination of full-time 
                        equivalency.'';
            (2) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(I) Treatment of certain time in approved medical 
                residency training programing.--In determining the 
                hospital's number of full-time equivalent residents for 
                purposes of this subsection, all the time that is spent 
                by an intern or resident in an approved medical 
                residency training program on vacation, sick leave, or 
                other approved leave, as such time is defined by the 
                Secretary, and that does not prolong the total time the 
                resident is participating in the approved program 
                beyond the normal duration of the program shall be 
                counted toward the determination of full-time 
                equivalency.''; and
            (3) in paragraph (5), by adding at the end the following 
        new subparagraph:
                    ``(K) Nonprovider setting that is primarily engaged 
                in furnishing patient care.--The term `nonprovider 
                setting that is primarily engaged in furnishing patient 
                care' means a nonprovider setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)), as amended by section 1501(b), is amended by 
adding at the end the following new clause:
    ``(xi)(I) The provisions of subparagraph (I) of subsection (h)(4) 
shall apply under this subparagraph in the same manner as they apply 
under such subsection.
    ``(II) In determining the hospital's number of full-time equivalent 
residents for purposes of this subparagraph, all the time spent by an 
intern or resident in an approved medical residency training program in 
nonpatient care activities, such as didactic conferences and seminars, 
as such time and activities are defined by the Secretary, that occurs 
in the hospital shall be counted toward the determination of full-time 
equivalency if the hospital--
            ``(aa) is recognized as a subsection (d) hospital;
            ``(bb) is recognized as a subsection (d) Puerto Rico 
        hospital;
            ``(cc) is reimbursed under a reimbursement system 
        authorized under section 1814(b)(3); or
            ``(dd) is a provider-based hospital outpatient department.
    ``(III) In determining the hospital's number of full-time 
equivalent residents for purposes of this subparagraph, all the time 
spent by an intern or resident in an approved medical residency 
training program in research activities that are not associated with 
the treatment or diagnosis of a particular patient, as such time and 
activities are defined by the Secretary, shall not be counted toward 
the determination of full-time equivalency.''.
    (c) Effective Dates; Application.--
            (1) In general.--Except as otherwise provided, the 
        Secretary of Health and Human Services shall implement the 
        amendments made by this section in a manner so as to apply to 
        cost reporting periods beginning on or after January 1, 1983.
            (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social 
        Security Act, as added by subsection (a)(1)(B), shall apply to 
        cost reporting periods beginning on or after July 1, 2008.
            (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social 
        Security Act, as added by subsection (b), shall apply to cost 
        reporting periods beginning on or after October 1, 2001. Such 
        section, as so added, shall not give rise to any inference on 
        how the law in effect prior to such date should be interpreted.
            (4) Application.--The amendments made by this section shall 
        not be applied in a manner that requires reopening of any 
        settled hospital cost reports as to which there is not a 
        jurisdictionally proper appeal pending as of the date of the 
        enactment of this Act on the issue of payment for indirect 
        costs of medical education under section 1886(d)(5)(B) of the 
        Social Security Act or for direct graduate medical education 
        costs under section 1886(h) of such Act.

SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
              HOSPITALS.

    (a) Direct GME.--Section 1886(h)(4)(H) of the Social Security Act 
(42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clause:
                            ``(vi) Redistribution of residency slots 
                        after a hospital closes.--
                                    ``(I) In general.--The Secretary 
                                shall, by regulation, establish a 
                                process consistent with subclauses (II) 
                                and (III) under which, in the case 
                                where a hospital (other than a hospital 
                                described in clause (v)) with an 
                                approved medical residency program in a 
                                State closes on or after the date that 
                                is 2 years before the date of the 
                                enactment of this clause, the Secretary 
                                shall increase the otherwise applicable 
                                resident limit under this paragraph for 
                                other hospitals in the State in 
                                accordance with this clause.
                                    ``(II) Process for hospitals in 
                                certain areas.--In determining for 
                                which hospitals the increase in the 
                                otherwise applicable resident limit 
                                described in subclause (I) is provided, 
                                the Secretary shall establish a process 
                                to provide for such increase to one or 
                                more hospitals located in the State. 
                                Such process shall take into 
                                consideration the recommendations 
                                submitted to the Secretary by the 
                                senior health official (as designated 
                                by the chief executive officer of such 
                                State) if such recommendations are 
                                submitted not later than 180 days after 
                                the date of the hospital closure 
                                involved (or, in the case of a hospital 
                                that closed after the date that is 2 
                                years before the date of the enactment 
                                of this clause, 180 days after such 
                                date of enactment).
                                    ``(III) Limitation.--The estimated 
                                aggregate number of increases in the 
                                otherwise applicable resident limits 
                                for hospitals under this clause shall 
                                be equal to the estimated number of 
                                resident positions in the approved 
                                medical residency programs that closed 
                                on or after the date described in 
                                subclause (I).''.
    (b) No Effect on Temporary FTE Cap Adjustments.--The amendments 
made by this section shall not effect any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act) and 
shall not affect the application of section 1886(h)(4)(H)(v) of the 
Social Security Act.
    (c) Conforming Amendments.--
            (1) Section 422(b)(2) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003 (Public Law 108-
        173), as amended by section 1501(c), is amended by striking 
        ``(7) and'' and inserting ``(4)(H)(vi), (7), and''.
            (2) Section 1886(h)(7)(E) of the Social Security Act (42 
        U.S.C. 1395ww(h)(7)(E)) is amended by inserting ``or under 
        paragraph (4)(H)(vi)'' after ``under this paragraph''.

SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED MEDICAL RESIDENCY 
              TRAINING.

    (a) Specification of Goals for Approved Medical Residency Training 
Programs.--Section 1886(h)(1) of the Social Security Act (42 U.S.C. 
1395ww(h)(1)) is amended--
            (1) by designating the matter beginning with 
        ``Notwithstanding'' as a subparagraph (A) with the heading ``In 
        general.--'' and with appropriate indentation; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Goals and accountability for approved medical 
                residency training programs.--The goals of medical 
                residency training programs are to foster a physician 
                workforce so that physicians are trained to be able to 
                do the following:
                            ``(i) Work effectively in various health 
                        care delivery settings, such as nonprovider 
                        settings.
                            ``(ii) Coordinate patient care within and 
                        across settings relevant to their specialties.
                            ``(iii) Understand the relevant cost and 
                        value of various diagnostic and treatment 
                        options.
                            ``(iv) Work in inter-professional teams and 
                        multi-disciplinary team-based models in 
                        provider and nonprovider settings to enhance 
                        safety and improve quality of patient care.
                            ``(v) Be knowledgeable in methods of 
                        identifying systematic errors in health care 
                        delivery and in implementing systematic 
                        solutions in case of such errors, including 
                        experience and participation in continuous 
                        quality improvement projects to improve health 
                        outcomes of the population the physicians 
                        serve.
                            ``(vi) Be meaningful EHR users (as 
                        determined under section 1848(o)(2)) in the 
                        delivery of care and in improving the quality 
                        of the health of the community and the 
                        individuals that the hospital serves.''
    (b) GAO Study on Evaluation of Training Programs.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to evaluate the extent to which 
        medical residency training programs--
                    (A) are meeting the goals described in section 
                1886(h)(1)(B) of the Social Security Act, as added by 
                subsection (a), in a range of residency programs, 
                including primary care and other specialties; and
                    (B) have the appropriate faculty expertise to teach 
                the topics required to achieve such goals.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on such study and shall include in such 
        report recommendations as to how medical residency training 
        programs could be further encouraged to meet such goals through 
        means such as--
                    (A) development of curriculum requirements; and
                    (B) assessment of the accreditation processes of 
                the Accreditation Council for Graduate Medical 
                Education and the American Osteopathic Association and 
                effectiveness of those processes in accrediting medical 
                residency programs that meet the goals referred to in 
                paragraph (1)(A).

                      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.

    (a) In General.--Section 1817(k) of the Social Security Act (42 
U.S.C. 1395i(k)) is amended--
            (1) by adding at the end the following new paragraph:
            ``(7) Additional funding.--In addition to the funds 
        otherwise appropriated to the Account from the Trust Fund under 
        paragraphs (3) and (4) and for purposes described in paragraphs 
        (3)(C) and (4)(A), there are hereby appropriated an additional 
        $100,000,000 to such Account from such Trust Fund for each 
        fiscal year beginning with 2011. The funds appropriated under 
        this paragraph shall be allocated in the same proportion as the 
        total funding appropriated with respect to paragraphs (3)(A) 
        and (4)(A) was allocated with respect to fiscal year 2010, and 
        shall be available without further appropriation until 
        expended.''.
            (2) in paragraph (4)(A)--
                    (A) by inserting ``for activities described in 
                paragraph (3)(C) and'' after ``necessary''; and
                    (B) by inserting ``until expended'' after 
                ``appropriation''.
    (b) Flexibility in Pursuing Fraud and Abuse.--Section 1893(a) of 
the Social Security Act (42 U.S.C. 1395ddd(a)) is amended by inserting 
``, or otherwise,'' after ``entities''.

           Subtitle B--Enhanced Penalties for Fraud and Abuse

SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS ON PROVIDER OR 
              SUPPLIER ENROLLMENT APPLICATIONS.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)) is amended--
            (1) in paragraph (1)(D), by striking all that follows ``in 
        which the person was excluded'' and inserting ``under Federal 
        law from the Federal health care program under which the claim 
        was made, or'';
            (2) by striking ``or'' at the end of paragraph (6);
            (3) in paragraph (7), by inserting at the end ``or'';
            (4) by inserting after paragraph (7) the following new 
        paragraph:
            ``(8) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material fact in 
        any application, agreement, bid, or contract to participate or 
        enroll as a provider of services or supplier under a Federal 
        health care program, including managed care organizations under 
        title XIX, Medicare Advantage organizations under part C of 
        title XVIII, prescription drug plan sponsors under part D of 
        title XVIII, and entities that apply to participate as 
        providers of services or suppliers in such managed care 
        organizations and such plans;'';
            (5) in the matter following paragraph (8), as inserted by 
        paragraph (4), by striking ``or in cases under paragraph (7), 
        $50,000 for each such act)'' and inserting ``in cases under 
        paragraph (7), $50,000 for each such act, or in cases under 
        paragraph (8), $50,000 for each false statement, omission, or 
        misrepresentation of a material fact)''; and
            (6) in the second sentence, by striking ``for a lawful 
        purpose)'' and inserting ``for a lawful purpose, or in cases 
        under paragraph (8), an assessment of not more than 3 times the 
        amount claimed as the result of the false statement, omission, 
        or misrepresentation of material fact claimed by a provider of 
        services or supplier whose application to participate contained 
        such false statement, omission, or misrepresentation)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to acts committed on or after January 1, 2010.

SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF FALSE STATEMENTS 
              MATERIAL TO A FALSE CLAIM.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by section 1611, is further amended--
            (1) in paragraph (7), by striking ``or'' at the end;
            (2) in paragraph (8), by inserting ``or'' at the end; and
            (3) by inserting after paragraph (8), the following new 
        paragraph:
            ``(9) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to a false or fraudulent 
        claim for payment for items and services furnished under a 
        Federal health care program;''; and
            (4) in the matter following paragraph (9), as inserted by 
        paragraph (3)--
                    (A) by striking ``or in cases under paragraph (8)'' 
                and inserting ``in cases under paragraph (8)''; and
                    (B) by striking ``a material fact)'' and inserting 
                ``a material fact, in cases under paragraph (9), 
                $50,000 for each false record or statement)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to acts committed on or after January 1, 2010.

SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPECTIONS.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by sections 1611 and 1612, is further 
amended--
            (1) in paragraph (8), by striking ``or'' at the end;
            (2) in paragraph (9), by inserting ``or'' at the end;
            (3) by inserting after paragraph (9) the following new 
        paragraph:
            ``(10) fails to grant timely access, upon reasonable 
        request (as defined by the Secretary in regulations), to the 
        Inspector General of the Department of Health and Human 
        Services, for the purpose of audits, investigations, 
        evaluations, or other statutory functions of the Inspector 
        General of the Department of Health and Human Services;''; and
            (4) in the matter following paragraph (10), as inserted by 
        paragraph (3), by inserting ``, or in cases under paragraph 
        (10), $15,000 for each day of the failure described in such 
        paragraph'' after ``false record or statement''.
    (b) Ensuring Timely Inspections Relating to Contracts With MA 
Organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 1395w-
27(d)(2)) is amended--
            (1) in subparagraph (A), by inserting ``timely'' before 
        ``inspect''; and
            (2) in subparagraph (B), by inserting ``timely'' before 
        ``audit and inspect''.
    (c) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.

    (a) Medicare.--Part A of title XVIII of the Social Security Act is 
amended by inserting after section 1819 the following new section:

``SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE CARE.

    ``(a) In General.--If the Secretary determines on the basis of a 
survey or otherwise, that a hospice program that is certified for 
participation under this title has demonstrated a substandard quality 
of care and failed to meet such other requirements as the Secretary may 
find necessary in the interest of the health and safety of the 
individuals who are provided care and services by the agency or 
organization involved and determines--
            ``(1) that the deficiencies involved immediately jeopardize 
        the health and safety of the individuals to whom the program 
        furnishes items and services, the Secretary shall take 
        immediate action to remove the jeopardy and correct the 
        deficiencies through the remedy specified in subsection 
        (b)(2)(A)(iii) or terminate the certification of the program, 
        and may provide, in addition, for 1 or more of the other 
        remedies described in subsection (b)(2)(A); or
            ``(2) that the deficiencies involved do not immediately 
        jeopardize the health and safety of the individuals to whom the 
        program furnishes items and services, the Secretary may--
                    ``(A) impose intermediate sanctions developed 
                pursuant to subsection (b), in lieu of terminating the 
                certification of the program; and
                    ``(B) if, after such a period of intermediate 
                sanctions, the program is still not in compliance with 
                such requirements, the Secretary shall terminate the 
                certification of the program.
        If the Secretary determines that a hospice program that is 
        certified for participation under this title is in compliance 
        with such requirements but, as of a previous period, was not in 
        compliance with such requirements, the Secretary may provide 
        for a civil money penalty under subsection (b)(2)(A)(i) for the 
        days in which it finds that the program was not in compliance 
        with such requirements.
    ``(b) Intermediate Sanctions.--
            ``(1) Development and implementation.--The Secretary shall 
        develop and implement, by not later than July 1, 2012--
                    ``(A) a range of intermediate sanctions to apply to 
                hospice programs under the conditions described in 
                subsection (a), and
                    ``(B) appropriate procedures for appealing 
                determinations relating to the imposition of such 
                sanctions.
            ``(2) Specified sanctions.--
                    ``(A) In general.--The intermediate sanctions 
                developed under paragraph (1) may include--
                            ``(i) civil money penalties in an amount 
                        not to exceed $10,000 for each day of 
                        noncompliance or, in the case of a per instance 
                        penalty applied by the Secretary, not to exceed 
                        $25,000,
                            ``(ii) denial of all or part of the 
                        payments to which a hospice program would 
                        otherwise be entitled under this title with 
                        respect to items and services furnished by a 
                        hospice program on or after the date on which 
                        the Secretary determines that intermediate 
                        sanctions should be imposed pursuant to 
                        subsection (a)(2),
                            ``(iii) the appointment of temporary 
                        management to oversee the operation of the 
                        hospice program and to protect and assure the 
                        health and safety of the individuals under the 
                        care of the program while improvements are 
                        made,
                            ``(iv) corrective action plans, and
                            ``(v) in-service training for staff.
                The provisions of section 1128A (other than subsections 
                (a) and (b)) shall apply to a civil money penalty under 
                clause (i) in the same manner as such provisions apply 
                to a penalty or proceeding under section 1128A(a). The 
                temporary management under clause (iii) shall not be 
                terminated until the Secretary has determined that the 
                program has the management capability to ensure 
                continued compliance with all requirements referred to 
                in that clause.
                    ``(B) Clarification.--The sanctions specified in 
                subparagraph (A) are in addition to sanctions otherwise 
                available under State or Federal law and shall not be 
                construed as limiting other remedies, including any 
                remedy available to an individual at common law.
                    ``(C) Commencement of payment.--A denial of payment 
                under subparagraph (A)(ii) shall terminate when the 
                Secretary determines that the hospice program no longer 
                demonstrates a substandard quality of care and meets 
                such other requirements as the Secretary may find 
                necessary in the interest of the health and safety of 
                the individuals who are provided care and services by 
                the agency or organization involved.
            ``(3) Secretarial authority.--The Secretary shall develop 
        and implement, by not later than July 1, 2011, specific 
        procedures with respect to the conditions under which each of 
        the intermediate sanctions developed under paragraph (1) is to 
        be applied, including the amount of any fines and the severity 
        of each of these sanctions. Such procedures shall be designed 
        so as to minimize the time between identification of 
        deficiencies and imposition of these sanctions and shall 
        provide for the imposition of incrementally more severe fines 
        for repeated or uncorrected deficiencies.''.
    (b) Application to Medicaid.--Section 1905(o) of the Social 
Security Act (42 U.S.C. 1396d(o)) is amended by adding at the end the 
following new paragraph:
    ``(4) The provisions of section 1819A shall apply to a hospice 
program providing hospice care under this title in the same manner as 
such provisions apply to a hospice program providing hospice care under 
title XVIII.''.
    (c) Application to CHIP.--Title XXI of the Social Security Act is 
amended by adding at the end the following new section:

``SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE.

    ``The provisions of section 1819A shall apply to a hospice program 
providing hospice care under this title in the same manner such 
provisions apply to a hospice program providing hospice care under 
title XVIII.''.

SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EXCLUDED FROM PROGRAM 
              PARTICIPATION.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by the previous sections, is further 
amended--
            (1) by striking ``or'' at the end of paragraph (9);
            (2) by inserting ``or'' at the end of paragraph (10);
            (3) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) orders or prescribes an item or service, including 
        without limitation home health care, diagnostic and clinical 
        lab tests, prescription drugs, durable medical equipment, 
        ambulance services, physical or occupational therapy, or any 
        other item or service, during a period when the person has been 
        excluded from participation in a Federal health care program, 
        and the person knows or should know that a claim for such item 
        or service will be presented to such a program;''; and
            (4) in the matter following paragraph (11), as inserted by 
        paragraph (2), by striking ``$15,000 for each day of the 
        failure described in such paragraph'' and inserting ``$15,000 
        for each day of the failure described in such paragraph, or in 
        cases under paragraph (11), $50,000 for each order or 
        prescription for an item or service by an excluded 
        individual''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF FALSE INFORMATION BY 
              MEDICARE ADVANTAGE AND PART D PLANS.

    (a) In General.--Section 1857(g)(2)(A) of the Social Security Act 
(42 U.S.C. 1395w--27(g)(2)(A)) is amended by inserting ``except with 
respect to a determination under subparagraph (E), an assessment of not 
more than 3 times the amount claimed by such plan or plan sponsor based 
upon the misrepresentation or falsified information involved,'' after 
``for each such determination,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVANTAGE AND PART D 
              MARKETING VIOLATIONS.

    (a) In General.--Section 1857(g)(1) of the Social Security Act (42 
U.S.C. 1395w--27(g)(1)), as amended by section 1221(b), is amended--
            (1) in subparagraph (G), by striking ``or'' at the end;
            (2) by inserting after subparagraph (H) the following new 
        subparagraphs:
                    ``(I) except as provided under subparagraph (C) or 
                (D) of section 1860D-1(b)(1), enrolls an individual in 
                any plan under this part without the prior consent of 
                the individual or the designee of the individual;
                    ``(J) transfers an individual enrolled under this 
                part from one plan to another without the prior consent 
                of the individual or the designee of the individual or 
                solely for the purpose of earning a commission;
                    ``(K) fails to comply with marketing restrictions 
                described in subsections (h) and (j) of section 1851 or 
                applicable implementing regulations or guidance; or
                    ``(L) employs or contracts with any individual or 
                entity who engages in the conduct described in 
                subparagraphs (A) through (K) of this paragraph;''; and
            (3) by adding at the end the following new sentence: ``The 
        Secretary may provide, in addition to any other remedies 
        authorized by law, for any of the remedies described in 
        paragraph (2), if the Secretary determines that any employee or 
        agent of such organization, or any provider or supplier who 
        contracts with such organization, has engaged in any conduct 
        described in subparagraphs (A) through (L) of this paragraph.''
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF PROGRAM AUDITS.

    (a) In General.--Section 1128(b)(2) of the Social Security Act (42 
U.S.C. 1320a-7(b)(2)) is amended--
            (1) in the heading, by inserting ``or audit'' after 
        ``investigation''; and
            (2) by striking ``investigation into'' and all that follows 
        through the period and inserting ``investigation or audit 
        related to--''
                            ``(i) any offense described in paragraph 
                        (1) or in subsection (a); or
                            ``(ii) the use of funds received, directly 
                        or indirectly, from any Federal health care 
                        program (as defined in section 1128B(f)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM 
              PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS.

    (a) In General.--Section 1128(c) of the Social Security Act, as 
previously amended by this subdivision, is further amended--
            (1) in the heading, by striking ``and Period'' and 
        inserting ``Period, and Effect''; and
            (2) by adding at the end the following new paragraph:
    ``(4)(A) For purposes of this Act, subject to subparagraph (C), the 
effect of exclusion is that no payment may be made by any Federal 
health care program (as defined in section 1128B(f)) with respect to 
any item or service furnished--
            ``(i) by an excluded individual or entity; or
            ``(ii) at the medical direction or on the prescription of a 
        physician or other authorized individual when the person 
        submitting a claim for such item or service knew or had reason 
        to know of the exclusion of such individual.
    ``(B) For purposes of this section and sections 1128A and 1128B, 
subject to subparagraph (C), an item or service has been furnished by 
an individual or entity if the individual or entity directly or 
indirectly provided, ordered, manufactured, distributed, prescribed, or 
otherwise supplied the item or service regardless of how the item or 
service was paid for by a Federal health care program or to whom such 
payment was made.
    ``(C)(i) Payment may be made under a Federal health care program 
for emergency items or services (not including items or services 
furnished in an emergency room of a hospital) furnished by an excluded 
individual or entity, or at the medical direction or on the 
prescription of an excluded physician or other authorized individual 
during the period of such individual's exclusion.
    ``(ii) In the case that an individual eligible for benefits under 
title XVIII or XIX submits a claim for payment for items or services 
furnished by an excluded individual or entity, and such individual 
eligible for such benefits did not know or have reason to know that 
such excluded individual or entity was so excluded, then, 
notwithstanding such exclusion, payment shall be made for such items or 
services. In such case the Secretary shall notify such individual 
eligible for such benefits of the exclusion of the individual or entity 
furnishing the items or services. Payment shall not be made for items 
or services furnished by an excluded individual or entity to an 
individual eligible for such benefits after a reasonable time (as 
determined by the Secretary in regulations) after the Secretary has 
notified the individual eligible for such benefits of the exclusion of 
the individual or entity furnishing the items or services.
    ``(iii) In the case that a claim for payment for items or services 
furnished by an excluded individual or entity is submitted by an 
individual or entity other than an individual eligible for benefits 
under title XVIII or XIX or the excluded individual or entity, and the 
Secretary determines that the individual or entity that submitted the 
claim took reasonable steps to learn of the exclusion and reasonably 
relied upon inaccurate or misleading information from the relevant 
Federal health care program or its contractor, the Secretary may waive 
repayment of the amount paid in violation of the exclusion to the 
individual or entity that submitted the claim for the items or services 
furnished by the excluded individual or entity. If a Federal health 
care program contractor provided inaccurate or misleading information 
that resulted in the waiver of an overpayment under this clause, the 
Secretary shall take appropriate action to recover the improperly paid 
amount from the contractor.''.

         Subtitle C--Enhanced Program and Provider Protections

SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by inserting after section 1128F the following 
new section:

``SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PROTECTIONS IN THE 
              MEDICARE, MEDICAID, AND CHIP PROGRAMS.

    ``(a) Certain Authorized Screening, Enhanced Oversight Periods, and 
Enrollment Moratoria.--
            ``(1) In general.--For periods beginning after January 1, 
        2011, in the case that the Secretary determines there is a 
        significant risk of fraudulent activity (as determined by the 
        Secretary based on relevant complaints, reports, referrals by 
        law enforcement or other sources, data analysis, trending 
        information, or claims submissions by providers of services and 
        suppliers) with respect to a category of provider of services 
        or supplier of items or services, including a category within a 
        geographic area, under title XVIII, XIX, or XXI, the Secretary 
        may impose any of the following requirements with respect to a 
        provider of services or a supplier (whether such provider or 
        supplier is initially enrolling in the program or is renewing 
        such enrollment):
                    ``(A) Screening under paragraph (2).
                    ``(B) Enhanced oversight periods under paragraph 
                (3).
                    ``(C) Enrollment moratoria under paragraph (4).
        In applying this subsection for purposes of title XIX and XXI 
        the Secretary may require a State to carry out the provisions 
        of this subsection as a requirement of the State plan under 
        title XIX or the child health plan under title XXI. Actions 
        taken and determinations made under this subsection shall not 
        be subject to review by a judicial tribunal.
            ``(2) Screening.--For purposes of paragraph (1), the 
        Secretary shall establish procedures under which screening is 
        conducted with respect to providers of services and suppliers 
        described in such paragraph. Such screening may include--
                    ``(A) licensing board checks;
                    ``(B) screening against the list of individuals and 
                entities excluded from the program under title XVIII, 
                XIX, or XXI;
                    ``(C) the excluded provider list system;
                    ``(D) background checks; and
                    ``(E) unannounced pre-enrollment or other site 
                visits.
            ``(3) Enhanced oversight period.--For purposes of paragraph 
        (1), the Secretary shall establish procedures to provide for a 
        period of not less than 30 days and not more than 365 days 
        during which providers of services and suppliers described in 
        such paragraph, as the Secretary determines appropriate, would 
        be subject to enhanced oversight, such as required or 
        unannounced (or required and unannounced) site visits or 
        inspections, prepayment review, enhanced review of claims, and 
        such other actions as specified by the Secretary, under the 
        programs under titles XVIII, XIX, and XXI. Under such 
        procedures, the Secretary may extend such period for more than 
        365 days if the Secretary determines that after the initial 
        period such additional period of oversight is necessary.
            ``(4) Moratorium on enrollment of providers and 
        suppliers.--For purposes of paragraph (1), the Secretary, based 
        upon a finding of a risk of serious ongoing fraud within a 
        program under title XVIII, XIX, or XXI, may impose a moratorium 
        on the enrollment of providers of services and suppliers within 
        a category of providers of services and suppliers (including a 
        category within a specific geographic area) under such title. 
        Such a moratorium may only be imposed if the Secretary makes a 
        determination that the moratorium would not adversely impact 
        access of individuals to care under such program.
            ``(5) Clarification.--Nothing in this subsection shall be 
        interpreted to preclude or limit the ability of a State to 
        engage in provider screening or enhanced provider oversight 
        activities beyond those required by the Secretary.''.
    (b) Conforming Amendments.--
            (1) Medicaid.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (23), by inserting before the 
                semicolon at the end the following: ``or by a person to 
                whom or entity to which a moratorium under section 
                1128G(a)(4) is applied during the period of such 
                moratorium'';
                    (B) in paragraph (72); by striking at the end 
                ``and'';
                    (C) in paragraph (73), by striking the period at 
                the end and inserting ``; and''; and
                    (D) by adding after paragraph (73) the following 
                new paragraph:
            ``(74) provide that the State will enforce any 
        determination made by the Secretary under subsection (a) of 
        section 1128G (relating to a significant risk of fraudulent 
        activity with respect to a category of provider or supplier 
        described in such subsection (a) through use of the appropriate 
        procedures described in such subsection (a)), and that the 
        State will carry out any activities as required by the 
        Secretary for purposes of such subsection (a).''.
            (2) CHIP.--Section 2102 of such Act (42 U.S.C. 1397bb) is 
        amended by adding at the end the following new subsection:
    ``(d) Program Integrity.--A State child health plan shall include a 
description of the procedures to be used by the State--
            ``(1) to enforce any determination made by the Secretary 
        under subsection (a) of section 1128G (relating to a 
        significant risk of fraudulent activity with respect to a 
        category of provider or supplier described in such subsection 
        through use of the appropriate procedures described in such 
        subsection); and
            ``(2) to carry out any activities as required by the 
        Secretary for purposes of such subsection.''.
            (3) Medicare.--Section 1866(j) of such Act (42 U.S.C. 
        1395cc(j)) is amended by adding at the end the following new 
        paragraph:
            ``(3) Program integrity.--The provisions of section 
        1128G(a) apply to enrollments and renewals of enrollments of 
        providers of services and suppliers under this title.''.

SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP PROGRAM DISCLOSURE 
              REQUIREMENTS RELATING TO PREVIOUS AFFILIATIONS.

    (a) In General.--Section 1128G of the Social Security Act, as 
inserted by section 1631, is amended by adding at the end the following 
new subsection:
    ``(b) Enhanced Program Disclosure Requirements.--
            ``(1) Disclosure.--A provider of services or supplier who 
        submits on or after July 1, 2011, an application for enrollment 
        and renewing enrollment in a program under title XVIII, XIX, or 
        XXI shall disclose (in a form and manner determined by the 
        Secretary) any current affiliation or affiliation within the 
        previous 10-year period with a provider of services or supplier 
        that has uncollected debt or with a person or entity that has 
        been suspended or excluded under such program, subject to a 
        payment suspension, or has had its billing privileges revoked.
            ``(2) Enhanced safeguards.--If the Secretary determines 
        that such previous affiliation of such provider or supplier 
        poses a risk of fraud, waste, or abuse, the Secretary may apply 
        such enhanced safeguards as the Secretary determines necessary 
        to reduce such risk associated with such provider or supplier 
        enrolling or participating in the program under title XVIII, 
        XIX, or XXI. Such safeguards may include enhanced oversight, 
        such as enhanced screening of claims, required or unannounced 
        (or required and unannounced) site visits or inspections, 
        additional information reporting requirements, and conditioning 
        such enrollment on the provision of a surety bond.
            ``(3) Authority to deny participation.--If the Secretary 
        determines that there has been at least one such affiliation 
        and that such affiliation or affiliations, as applicable, of 
        such provider or supplier poses a serious risk of fraud, waste, 
        or abuse, the Secretary may deny the application of such 
        provider or supplier.''.
    (b) Conforming Amendments.--
            (1) Medicaid.--Paragraph (74) of section 1902(a) of such 
        Act (42 U.S.C. 1396a(a)), as added by section 1631(b)(1), is 
        amended--
                    (A) by inserting ``or subsection (b) of such 
                section (relating to disclosure requirements)'' before 
                ``, and that the State''; and
                    (B) by inserting before the period the following: 
                ``and apply any enhanced safeguards, with respect to a 
                provider or supplier described in such subsection (b), 
                as the Secretary determines necessary under such 
                subsection (b)''.
            (2) CHIP.--Subsection (d) of section 2102 of such Act (42 
        U.S.C. 1397bb), as added by section 1631(b)(2), is amended--
                    (A) in paragraph (1), by striking at the end 
                ``and'';
                    (B) in paragraph (2) by striking the period at the 
                end and inserting ``; and''' and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) to enforce any determination made by the Secretary 
        under subsection (b) of section 1128G (relating to disclosure 
        requirements) and to apply any enhanced safeguards, with 
        respect to a provider or supplier described in such subsection, 
        as the Secretary determines necessary under such subsection.''.

SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER FOR CERTAIN 
              EVALUATION AND MANAGEMENT SERVICES.

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as 
amended by section 4101 of the HITECH Act (Public Law 111-5), is 
amended by adding at the end the following new subsection:
    ``(p) Payment Modifier for Certain Evaluation and Management 
Services.--The Secretary shall establish a payment modifier under the 
fee schedule under this section for evaluation and management services 
(as specified in section 1842(b)(16)(B)(ii)) that result in the 
ordering of additional services (such as lab tests), the prescription 
of drugs, the furnishing or ordering of durable medical equipment in 
order to enable better monitoring of claims for payment for such 
additional services under this title, or the ordering, furnishing, or 
prescribing of other items and services determined by the Secretary to 
pose a high risk of waste, fraud, and abuse. The Secretary may require 
providers of services or suppliers to report such modifier in claims 
submitted for payment.''.

SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICARE INTEGRITY 
              PROGRAM.

    (a) In General.--Section 1893(c) of the Social Security Act (42 
U.S.C. 1395ddd(c)) is amended--
            (1) in paragraph (3), by striking at the end ``and'';
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) for the contract year beginning in 2011 and each 
        subsequent contract year, the entity provides assurances to the 
        satisfaction of the Secretary that the entity will conduct 
        periodic evaluations of the effectiveness of the activities 
        carried out by such entity under the Program and will submit to 
        the Secretary an annual report on such activities; and''.
    (b) Reference to Medicaid Integrity Program.--For a similar 
provision with respect to the Medicaid Integrity Program, see section 
1752.

SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE 
              WASTE, FRAUD, AND ABUSE.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
42 U.S.C. 1395kk) is amended by adding at the end the following new 
subsection:
    ``(e) Compliance Programs for Providers of Services and 
Suppliers.--
            ``(1) In general.--The Secretary may disenroll a provider 
        of services or a supplier (other than a physician or a skilled 
        nursing facility) under this title (or may impose any civil 
        monetary penalty or other intermediate sanction under paragraph 
        (4)) if such provider of services or supplier fails to, subject 
        to paragraph (5), establish a compliance program that contains 
        the core elements established under paragraph (2).
            ``(2) Establishment of core elements.--The Secretary, in 
        consultation with the Inspector General of the Department of 
        Health and Human Services, shall establish core elements for a 
        compliance program under paragraph (1). Such elements may 
        include written policies, procedures, and standards of conduct, 
        a designated compliance officer and a compliance committee; 
        effective training and education pertaining to fraud, waste, 
        and abuse for the organization's employees and contractors; a 
        confidential or anonymous mechanism, such as a hotline, to 
        receive compliance questions and reports of fraud, waste, or 
        abuse; disciplinary guidelines for enforcement of standards; 
        internal monitoring and auditing procedures, including 
        monitoring and auditing of contractors; procedures for ensuring 
        prompt responses to detected offenses and development of 
        corrective action initiatives, including responses to potential 
        offenses; and procedures to return all identified overpayments 
        to the programs under this title, title XIX, and title XXI.
            ``(3) Timeline for implementation.--The Secretary shall 
        determine a timeline for the establishment of the core elements 
        under paragraph (2) and the date on which a provider of 
        services and suppliers (other than physicians) shall be 
        required to have established such a program for purposes of 
        this subsection.
            ``(4) CMS enforcement authority.--The Administrator for the 
        Centers of Medicare & Medicaid Services shall have the 
        authority to determine whether a provider of services or 
        supplier described in subparagraph (3) has met the requirement 
        of this subsection and to impose a civil monetary penalty not 
        to exceed $50,000 for each violation. The Secretary may also 
        impose other intermediate sanctions, including corrective 
        action plans and additional monitoring in the case of a 
        violation of this subsection.
            ``(5) Pilot program.--The Secretary may conduct a pilot 
        program on the application of this subsection with respect to a 
        category of providers of services or suppliers (other than 
        physicians) that the Secretary determines to be a category 
        which is at high risk for waste, fraud, and abuse before 
        implementing the requirements of this subsection to all 
        providers of services and suppliers described in paragraph 
        (3).''.
    (b) Reference to Similar Medicaid Provision.--For a similar 
provision with respect to the Medicaid program under title XIX of the 
Social Security Act, see section 1753.

SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
              NOT MORE THAN 12 MONTHS.

    (a) Purpose.--In general, the 36-month period currently allowed for 
claims filing under parts A, B, C, and, D of title XVIII of the Social 
Security Act presents opportunities for fraud schemes in which 
processing patterns of the Centers for Medicare & Medicaid Services can 
be observed and exploited. Narrowing the window for claims processing 
will not overburden providers and will reduce fraud and abuse.
    (b) Reducing Maximum Period for Submission.--
            (1) Part a.--Section 1814(a) of the Social Security Act (42 
        U.S.C. 1395f(a)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows and inserting 
                ``period of 1 calendar year from which such services 
                are furnished; and''; and
                    (B) by adding at the end the following new 
                sentence: ``In applying paragraph (1), the Secretary 
                may specify exceptions to the 1 calendar year period 
                specified in such paragraph.''.
            (2) Part b.--Section 1835(a) of such Act (42 U.S.C. 
        1395n(a)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows and inserting 
                ``period of 1 calendar year from which such services 
                are furnished; and''; and
                    (B) by adding at the end the following new 
                sentence: ``In applying paragraph (1), the Secretary 
                may specify exceptions to the 1 calendar year period 
                specified in such paragraph.''.
            (3) Parts c and d.--Section 1857(d) of such Act is amended 
        by adding at the end the following new paragraph:
            ``(7) Period for submission of claims.--The contract shall 
        require an MA organization or PDP sponsor to require any 
        provider of services under contract with, in partnership with, 
        or affiliated with such organization or sponsor to ensure that, 
        with respect to items and services furnished by such provider 
        to an enrollee of such organization, written request, signed by 
        such enrollee, except in cases in which the Secretary finds it 
        impracticable for the enrollee to do so, is filed for payment 
        for such items and services in such form, in such manner, and 
        by such person or persons as the Secretary may by regulation 
        prescribe, no later than the close of the 1 calendar year 
        period after such items and services are furnished. In applying 
        the previous sentence, the Secretary may specify exceptions to 
        the 1 calendar year period specified.''.
    (c) Effective Date.--The amendments made by subsection (b) shall be 
effective for items and services furnished on or after January 1, 2011.

SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL EQUIPMENT OR HOME 
              HEALTH SERVICES REQUIRED TO BE MEDICARE ENROLLED 
              PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42 
U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and 
inserting ``physician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B)''.
    (b) Home Health Services.--
            (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C. 
        1395(a)(2)) is amended in the matter preceding subparagraph (A) 
        by inserting ``in the case of services described in 
        subparagraph (C), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' before 
        ``or, in the case of services''.
            (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
        1395n(a)(2)) is amended in the matter preceding subparagraph 
        (A) by inserting ``, or in the case of services described in 
        subparagraph (A), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' after 
        ``a physician''.
    (c) Discretion to Expand Application.--The Secretary may extend the 
requirement applied by the amendments made by subsections (a) and (b) 
to durable medical equipment and home health services (relating to 
requiring certifications and written orders to be made by enrolled 
physicians and health professions) to other categories of items or 
services under this title, including covered part D drugs as defined in 
section 1860D-2(e), if the Secretary determines that such application 
would help to reduce the risk of waste, fraud, and abuse with respect 
to such other categories under title XVIII of the Social Security Act.
    (d) Effective Date.--The amendments made by this section shall 
apply to written orders and certifications made on or after July 1, 
2010.

SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
              REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social 
Security Act, is amended by adding at the end the following new 
paragraph
    ``(10) The Secretary may disenroll, for a period of not more than 
one year for each act, a physician or supplier under section 1866(j) if 
such physician or supplier fails to maintain and, upon request of the 
Secretary, provide access to documentation relating to written orders 
or requests for payment for durable medical equipment, certifications 
for home health services, or referrals for other items or services 
written or ordered by such physician or supplier under this title, as 
specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42 
U.S.C. 1395cc), is amended--
            (1) in subparagraph (U), by striking at the end ``and'';
            (2) in subparagraph (V), by striking the period at the end 
        and adding ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(W) maintain and, upon request of the Secretary, 
                provide access to documentation relating to written 
                orders or requests for payment for durable medical 
                equipment, certifications for home health services, or 
                referrals for other items or services written or 
                ordered by the provider under this title, as specified 
                by the Secretary.''.
    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting 
``, ordering, referring for furnishing, or certifying the need for'' 
after ``furnishing''.
    (d) Effective Date.--The amendments made by this section shall 
apply to orders, certifications, and referrals made on or after January 
1, 2010.

SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
              PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH 
              SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
            (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                    (A) by striking ``and such services'' and inserting 
                ``such services''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and, in the case of a certification or 
                recertification made by a physician after January 1, 
                2010, prior to making such certification the physician 
                must document that the physician has had a face-to-face 
                encounter (including through use of telehealth and 
                other than with respect to encounters that are incident 
                to services involved) with the individual during the 6-
                month period preceding such certification, or other 
                reasonable timeframe as determined by the Secretary''.
            (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
        Act is amended--
                    (A) by striking ``and'' before ``(iii)''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and (iv) in the case of a certification 
                or recertification after January 1, 2010, prior to 
                making such certification the physician must document 
                that the physician has had a face-to-face encounter 
                (including through use of telehealth and other than 
                with respect to encounters that are incident to 
                services involved) with the individual during the 6-
                month period preceding such certification or 
                recertification, or other reasonable timeframe as 
                determined by the Secretary''.
    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) 
is amended by adding before the period at the end the following: ``and 
shall require that such an order be written pursuant to the physician 
documenting that the physician has had a face-to-face encounter 
(including through use of telehealth and other than with respect to 
encounters that are incident to services involved) with the individual 
involved during the 6-month period preceding such written order, or 
other reasonable timeframe as determined by the Secretary''.
    (c) Application to Other Areas Under Medicare.--The Secretary may 
apply the face-to-face encounter requirement described in the 
amendments made by subsections (a) and (b) to other items and services 
for which payment is provided under title XVIII of the Social Security 
Act based upon a finding that such an decision would reduce the risk of 
waste, fraud, or abuse.
    (d) Application to Medicaid and CHIP.--The requirements pursuant to 
the amendments made by subsections (a) and (b) shall apply in the case 
of physicians making certifications for home health services under 
title XIX or XXI of the Social Security Act, in the same manner and to 
the same extent as such requirements apply in the case of physicians 
making such certifications under title XVIII of such Act.

SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AUTHORITY TO PROGRAM 
              EXCLUSION INVESTIGATIONS.

    (a) In General.--Section 1128(f) of the Social Security Act (42 
U.S.C. 1320a-7(f)) is amended by adding at the end the following new 
paragraph:
    ``(4) The provisions of subsections (d) and (e) of section 205 
shall apply with respect to this section to the same extent as they are 
applicable with respect to title II. The Secretary may delegate the 
authority granted by section 205(d) (as made applicable to this 
section) to the Inspector General of the Department of Health and Human 
Services or the Administrator of the Centers for Medicare & Medicaid 
Services for purposes of any investigation under this section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to investigations beginning on or after January 1, 2010.

SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND MEDICAID OVERPAYMENTS.

    Section 1128G of the Social Security Act, as inserted by section 
1631 and amended by section 1632, is further amended by adding at the 
end the following new subsection:
    ``(c) Reports on and Repayment of Overpayments Identified Through 
Internal Audits and Reviews.--
            ``(1) Reporting and returning overpayments.--If a person 
        knows of an overpayment, the person must--
                    ``(A) report and return the overpayment to the 
                Secretary, the State, an intermediary, a carrier, or a 
                contractor, as appropriate, at the correct address, and
                    ``(B) notify the Secretary, the State, 
                intermediary, carrier, or contractor to whom the 
                overpayment was returned in writing of the reason for 
                the overpayment.
            ``(2) Timing.--An overpayment must be reported and returned 
        under paragraph (1)(A) by not later than the date that is 60 
        days after the date the person knows of the overpayment.
        Any known overpayment retained later than the applicable date 
        specified in this paragraph creates an obligation as defined in 
        section 3729(b)(3) of title 31 of the United States Code.
            ``(3) Clarification.--Repayment of any overpayments (or 
        refunding by withholding of future payments) by a provider of 
        services or supplier does not otherwise limit the provider or 
        supplier's potential liability for administrative obligations 
        such as applicable interests, fines, and specialties or civil 
        or criminal sanctions involving the same claim if it is 
        determined later that the reason for the overpayment was 
        related to fraud by the provider or supplier or the employees 
        or agents of such provider or supplier.
            ``(4) Definitions.--In this subsection:
                    ``(A) Knows.--The term `knows' has the meaning 
                given the terms `knowing' and `knowingly' in section 
                3729(b) of title 31 of the United States Code.
                    ``(B) Overpayment.--The term ``overpayment'' means 
                any finally determined funds that a person receives or 
                retains under title XVIII, XIX, or XXI to which the 
                person, after applicable reconciliation, is not 
                entitled under such title.
                    ``(C) Person.--The term `person' means a provider 
                of services, supplier, Medicaid managed care 
                organization (as defined in section 1903(m)(1)(A)), 
                Medicare Advantage organization (as defined in section 
                1859(a)(1)), or PDP sponsor (as defined in section 
                1860D-41(a)(13)), but excluding a beneficiary.''.

SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIVERS FOR OIG EXCLUSIONS 
              TO BENEFICIARIES OF ANY FEDERAL HEALTH CARE PROGRAM.

    Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 
1128A(i)(5)) of that program''.

SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL DIALYSIS FACILITIES.

    Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is 
amended by adding at the end the following new paragraph:
    ``(15) For purposes of evaluating or auditing payments made to 
renal dialysis facilities for items and services under this section 
under paragraph (1), each such renal dialysis facility, upon the 
request of the Secretary, shall provide to the Secretary access to 
information relating to any ownership or compensation arrangement 
between such facility and the medical director of such facility or 
between such facility and any physician.''.

SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICARE.

    (a) Medicare.--Section 1866(j)(1) of the Social Security Act (42 
U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Billing agents and clearinghouses required to 
                be registered under medicare.--Any agent, 
                clearinghouse, or other alternate payee that submits 
                claims on behalf of a health care provider must be 
                registered with the Secretary in a form and manner 
                specified by the Secretary.''.
    (b) Medicaid.--For a similar provision with respect to the Medicaid 
program under title XIX of the Social Security Act, see section 1759.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to claims submitted on or after January 1, 2012.

SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO FALSE CLAIMS ACT 
              AMENDMENTS.

    Section 1128A of the Social Security Act, as amended by sections 
1611, 1612, 1613, and 1615, is further amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``to an officer, 
                employee, or agent of the United States, or of any 
                department or agency thereof, or of any State agency 
                (as defined in subsection (i)(1))'';
                    (B) in paragraph (4)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``participating in a program 
                        under title XVIII or a State health care 
                        program'' and inserting ``participating in a 
                        Federal health care program (as defined in 
                        section 1128B(f))''; and
                            (ii) in subparagraph (A), by striking 
                        ``title XVIII or a State health care program'' 
                        and inserting ``a Federal health care program 
                        (as defined in section 1128B(f))'';
                    (C) by striking ``or'' at the end of paragraph 
                (10);
                    (D) by inserting after paragraph (11) the following 
                new paragraphs:
            ``(12) conspires to commit a violation of this section; or
            ``(13) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to an obligation to pay or 
        transmit money or property to a Federal health care program, or 
        knowingly conceals or knowingly and improperly avoids or 
        decreases an obligation to pay or transmit money or property to 
        a Federal health care program;''; and
                    (E) in the matter following paragraph (13), as 
                inserted by subparagraph (D)--
                            (i) by striking ``or'' before ``in cases 
                        under paragraph (11)''; and
                            (ii) by inserting ``, in cases under 
                        paragraph (12), $50,000 for any violation 
                        described in this section committed in 
                        furtherance of the conspiracy involved; or in 
                        cases under paragraph (13), $50,000 for each 
                        false record or statement, or concealment, 
                        avoidance, or decrease'' after ``by an excluded 
                        individual''; and
                    (F) in the second sentence, by striking ``such 
                false statement, omission, or misrepresentation)'' and 
                inserting ``such false statement or misrepresentation, 
                in cases under paragraph (12), an assessment of not 
                more than 3 times the total amount that would otherwise 
                apply for any violation described in this section 
                committed in furtherance of the conspiracy involved, or 
                in cases under paragraph (13), an assessment of not 
                more than 3 times the total amount of the obligation to 
                which the false record or statement was material or 
                that was avoided or decreased)''.
            (2) in subsection (c)(1), by striking ``six years'' and 
        inserting ``10 years''; and
            (3) in subsection (i)--
                    (A) by amending paragraph (2) to read as follows:
            ``(2) The term `claim' means any application, request, or 
        demand, whether under contract, or otherwise, for money or 
        property for items and services under a Federal health care 
        program (as defined in section 1128B(f)), whether or not the 
        United States or a State agency has title to the money or 
        property, that--
                    ``(A) is presented or caused to be presented to an 
                officer, employee, or agent of the United States, or of 
                any department or agency thereof, or of any State 
                agency (as defined in subsection (i)(1)); or
                    ``(B) is made to a contractor, grantee, or other 
                recipient if the money or property is to be spent or 
                used on the Federal health care program's behalf or to 
                advance a Federal health care program interest, and if 
                the Federal health care program--
                            ``(i) provides or has provided any portion 
                        of the money or property requested or demanded; 
                        or
                            ``(ii) will reimburse such contractor, 
                        grantee, or other recipient for any portion of 
                        the money or property which is requested or 
                        demanded.'';
                    (B) by amending paragraph (3) to read as follows:
            ``(3) The term `item or service' means, without limitation, 
        any medical, social, management, administrative, or other item 
        or service used in connection with or directly or indirectly 
        related to a Federal health care program.'';
                    (C) in paragraph (6)--
                            (i) in subparagraph (C), by striking at the 
                        end ``or'';
                            (ii) in the first subparagraph (D), by 
                        striking at the end the period and inserting 
                        ``; or''; and
                            (iii) by redesignating the second 
                        subparagraph (D) as a subparagraph (E);
                    (D) by amending paragraph (7) to read as follows:
            ``(7) The terms `knowing', `knowingly', and `should know' 
        mean that a person, with respect to information--
                    ``(A) has actual knowledge of the information;
                    ``(B) acts in deliberate ignorance of the truth or 
                falsity of the information; or
                    ``(C) acts in reckless disregard of the truth or 
                falsity of the information;
        and require no proof of specific intent to defraud.''; and
                    (E) by adding at the end the following new 
                paragraphs:
            ``(8) The term `obligation' means an established duty, 
        whether or not fixed, arising from an express or implied 
        contractual, grantor-grantee, or licensor-licensee 
        relationship, from a fee-based or similar relationship, from 
        statute or regulation, or from the retention of any 
        overpayment.
            ``(9) The term `material' means having a natural tendency 
        to influence, or be capable of influencing, the payment or 
        receipt of money or property.''.

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

SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDENTIFY FRAUD, WASTE, 
              AND ABUSE.

    Section 1128G of the Social Security Act, as added by section 1631 
and amended by sections 1632 and 1641, is further amended by adding at 
the end the following new subsection;
    ``(d) Access to Information Necessary to Identify Fraud, Waste, and 
Abuse.--For purposes of law enforcement activity, and to the extent 
consistent with applicable disclosure, privacy, and security laws, 
including the Health Insurance Portability and Accountability Act of 
1996 and the Privacy Act of 1974, and subject to any information 
systems security requirements enacted by law or otherwise required by 
the Secretary, the Attorney General shall have access, facilitation by 
the Inspector General of the Department of Health and Human Services, 
to claims and payment data relating to titles XVIII and XIX, in 
consultation with the Centers for Medicare & Medicaid Services or the 
owner of such data.''.

SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
              AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER 
              DATA BANK.

    (a) In General.--To eliminate duplication between the Healthcare 
Integrity and Protection Data Bank (HIPDB) established under section 
1128E of the Social Security Act and the National Practitioner Data 
Bank (NPBD) established under the Health Care Quality Improvement Act 
of 1986, section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) 
is amended--
            (1) in subsection (a), by striking ``Not later than'' and 
        inserting ``Subject to subsection (h), not later than'';
            (2) in the first sentence of subsection (d)(2), by striking 
        ``(other than with respect to requests by Federal agencies)''; 
        and
            (3) by adding at the end the following new subsection:
    ``(h) Sunset of the Healthcare Integrity and Protection Data Bank; 
Transition Process.--Effective upon the enactment of this subsection, 
the Secretary shall implement a process to eliminate duplication 
between the Healthcare Integrity and Protection Data Bank (in this 
subsection referred to as the `HIPDB' established pursuant to 
subsection (a) and the National Practitioner Data Bank (in this 
subsection referred to as the `NPDB') as implemented under the Health 
Care Quality Improvement Act of 1986 and section 1921 of this Act, 
including systems testing necessary to ensure that information formerly 
collected in the HIPDB will be accessible through the NPDB, and other 
activities necessary to eliminate duplication between the two data 
banks. Upon the completion of such process, notwithstanding any other 
provision of law, the Secretary shall cease the operation of the HIPDB 
and shall collect information required to be reported under the 
preceding provisions of this section in the NPDB. Except as otherwise 
provided in this subsection, the provisions of subsections (a) through 
(g) shall continue to apply with respect to the reporting of (or 
failure to report), access to, and other treatment of the information 
specified in this section.''.
    (b) Elimination of the Responsibility of the HHS Office of the 
Inspector General.--Section 1128C(a)(1) of the Social Security Act (42 
U.S.C. 1320a-7c(a)(1)) is amended--
            (1) in subparagraph (C), by adding at the end ``and'';
            (2) in subparagraph (D), by striking at the end ``, and'' 
        and inserting a period; and
            (3) by striking subparagraph (E).
    (c) Special Provision for Access to the National Practitioner Data 
Bank by the Department of Veterans Affairs.--
            (1) In general.--Notwithstanding any other provision of 
        law, during the one year period that begins on the effective 
        date specified in subsection (e)(1), the information described 
        in paragraph (2) shall be available from the National 
        Practitioner Data Bank (described in section 1921 of the Social 
        Security Act) to the Secretary of Veterans Affairs without 
        charge.
            (2) Information described.--For purposes of paragraph (1), 
        the information described in this paragraph is the information 
        that would, but for the amendments made by this section, have 
        been available to the Secretary of Veterans Affairs from the 
        Healthcare Integrity and Protection Data Bank.
    (d) Funding.--Notwithstanding any provisions of this division, 
sections 1128E(d)(2) and 1817(k)(3) of the Social Security Act, or any 
other provision of law, there shall be available for carrying out the 
transition process under section 1128E(h) of the Social Security Act 
over the period required to complete such process, and for operation of 
the National Practitioner Data Bank until such process is completed, 
without fiscal year limitation--
            (1) any fees collected pursuant to section 1128E(d)(2) of 
        such Act; and
            (2) such additional amounts as necessary, from 
        appropriations available to the Secretary and to the Office of 
        the Inspector General of the Department of Health and Human 
        Services under clauses (i) and (ii), respectively, of section 
        1817(k)(3)(A) of such Act, for costs of such activities during 
        the first 12 months following the date of the enactment of this 
        Act.
    (e) Effective Date.--The amendments made--
            (1) by subsection (a)(2) shall take effect on the first day 
        after the Secretary of Health and Human Services certifies that 
        the process implemented pursuant to section 1128E(h) of the 
        Social Security Act (as added by subsection (a)(3)) is 
        complete; and
            (2) by subsection (b) shall take effect on the earlier of 
        the date specified in paragraph (1) or the first day of the 
        second succeeding fiscal year after the fiscal year during 
        which this Act is enacted.

SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECURITY STANDARDS.

    The provisions of sections 262(a) and 264 of the Health Insurance 
Portability and Accountability Act of 1996 (and standards promulgated 
pursuant to such sections) and the Privacy Act of 1974 shall apply with 
respect to the provisions of this subtitle and amendments made by this 
subtitle.

                      TITLE VII--MEDICAID AND CHIP

                 Subtitle A--Medicaid and Health Reform

SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME BELOW 133\1/3\ 
              PERCENT OF THE FEDERAL POVERTY LEVEL.

    (a) Eligibility for Non-traditional Individuals With Income Below 
133 Percent of the Federal Poverty Level.--
            (1) In general.--Section 1902(a)(10)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396b(a)(10)(A)(i) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by adding ``or'' at the end of subclause (VII); 
                and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VIII) who are under 65 years of 
                                age, who are not described in a 
                                previous subclause of this clause, and 
                                who are in families whose income 
                                (determined using methodologies and 
                                procedures specified by the Secretary 
                                in consultation with the Health Choices 
                                Commissioner) does not exceed 133\1/3\ 
                                percent of the income official poverty 
                                line (as defined by the Office of 
                                Management and Budget, and revised 
                                annually in accordance with section 
                                673(2) of the Omnibus Budget 
                                Reconciliation Act of 1981) applicable 
                                to a family of the size involved;''.
            (2) 100% fmap for non-traditional medicaid eligible 
        individuals.--Section 1905 of such Act (42 U.S.C. 1396d) is 
        amended--
                    (A) in the third sentence of subsection (b) by 
                inserting before the period at the end the following: 
                ``and with respect to amounts described in subsection 
                (y)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(y) Additional Expenditures Subject to 100% FMAP.--For purposes 
of section 1905(b), the amounts described in this subsection are the 
following:
            ``(1) Amounts expended for medical assistance for 
        individuals described in subclause (VIII) of section 
        1902(a)(10)(A)(i).''.
            (3) Construction.--Nothing in this subsection shall be 
        construed as not providing for coverage under subclause (VIII) 
        of section 1902(a)(10)(A)(i) of the Social Security Act, as 
        added by paragraph (1) of, and an increased FMAP under the 
        amendment made by paragraph (2) for, an individual who has been 
        provided medical assistance under title XIX of the Act under a 
        demonstration waiver approved under section 1115 of such Act or 
        with State funds.
            (4) Conforming amendment.--Section 1903(f)(4) of the Social 
        Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting 
        ``1902(a)(10)(A)(i)(VIII),'' after ``1902(a)(10)(A)(i)(VII),''.
    (b) Eligibility for Traditional Medicaid Eligible Individuals With 
Income Not Exceeding 133\1/3\ Percent of the Federal Poverty Level.--
            (1) In general.--Section 1902(a)(10)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396b(a)(10)(A)(i)), as amended by 
        subsection (a), is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VII);
                    (B) by adding ``or'' at the end of subclause 
                (VIII); and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(IX) who are under 65 years of 
                                age, who would be eligible for medical 
                                assistance under the State plan under 
                                one of subclauses (I) through (VII) 
                                (based on the income standards, 
                                methodologies, and procedures in effect 
                                as of June 16, 2009) but for income and 
                                who are in families whose income does 
                                not exceed 133\1/3\ percent of the 
                                income official poverty line (as 
                                defined by the Office of Management and 
                                Budget, and revised annually in 
                                accordance with section 673(2) of the 
                                Omnibus Budget Reconciliation Act of 
                                1981) applicable to a family of the 
                                size involved;''.
            (2) 100% fmap for certain traditional medicaid eligible 
        individuals.--Section 1905(y) of such Act (42 U.S.C. 1396d(b)), 
        as added by subsection (a)(2)(B), is amended by inserting ``or 
        (IX)'' after ``(VIII)''.
            (3) Construction.--Nothing in this subsection shall be 
        construed as not providing for coverage under subclause (IX) of 
        section 1902(a)(10)(A)(i) of the Social Security Act, as added 
        by paragraph (1) of, and an increased FMAP under the amendment 
        made by paragraph (2) for, an individual who has been provided 
        medical assistance under title XIX of the Act under a 
        demonstration waiver approved under section 1115 of such Act or 
        with State funds.
            (4) Conforming amendment.--Section 1903(f)(4) of the Social 
        Security Act (42 U.S.C. 1396b(f)(4)), as amended by subsection 
        (a)(4), is amended by inserting ``1902(a)(10)(A)(i)(IX),'' 
        after ``1902(a)(10)(A)(i)(VIII),''.
    (c) 100% Matching Rate for Temporary Coverage of Certain 
Newborns.--Section 1905(y) of such Act, as added by subsection 
(a)(2)(B), is amended--
            (1) in paragraph (1), by inserting before the period at the 
        end the following: ``, and who is not provided medical 
        assistance under section 1943(b)(2) of this title or section 
        205(d)(1)(B) of the America's Affordable Health Choices Act of 
        2009''; and
            (2) by adding at the end the following:
            ``(2) Amounts expended for medical assistance for children 
        described in section 203(d)(1)(A) of the America's Affordable 
        Health Choices Act of 2009 during the time period specified in 
        such section.''.
    (d) Network Adequacy.--Section 1932(a)(2) of the Social Security 
Act (42 U.S.C. 1396u-2(a)(2)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Enrollment of non-traditional medicaid 
                eligibles.--A State may not require under paragraph (1) 
                the enrollment in a managed care entity of an 
                individual described in section 1902(a)(10)(A)(i)(VIII) 
                unless the State demonstrates, to the satisfaction of 
                the Secretary, that the entity, through its provider 
                network and other arrangements, has the capacity to 
                meet the health, mental health, and substance abuse 
                needs of such individuals.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the first day of Y1, and shall apply with respect to items 
and services furnished on or after such date.

SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CERTAIN MEDICAID ELIGIBLE 
              INDIVIDUALS.

    (a) In General.--Title XIX of the Social Security Act is amended by 
adding at the end the following new section:

    ``requirements and special rules for certain medicaid eligible 
                              individuals

    ``Sec. 1943.  (a) Coordination With NHI Exchange Through Memorandum 
of Understanding.--
            ``(1) In general.--The State shall enter into a Medicaid 
        memorandum of understanding described in section 204(e)(4) of 
        the America's Affordable Health Choices Act of 2009 with the 
        Health Choices Commissioner, acting in consultation with the 
        Secretary, with respect to coordinating the implementation of 
        the provisions of subdivision A of such Act with the State plan 
        under this title in order to ensure the enrollment of Medicaid 
        eligible individuals in acceptable coverage. Nothing in this 
        section shall be construed as permitting such memorandum to 
        modify or vitiate any requirement of a State plan under this 
        title.
            ``(2) Enrollment of exchange-referred individuals.--
                    ``(A) Non-traditional individuals.--Pursuant to 
                such memorandum the State shall accept without further 
                determination the enrollment under this title of an 
                individual determined by the Commissioner to be a non-
                traditional Medicaid eligible individual. The State 
                shall not do any redeterminations of eligibility for 
                such individuals unless the periodicity of such 
                redeterminations is consistent with the periodicity for 
                redeterminations by the Commissioner of eligibility for 
                affordability credits under subtitle C of title II of 
                subdivision A of the America's Affordable Health 
                Choices Act of 2009, as specified under such 
                memorandum.
                    ``(B) Traditional individuals.--
                            ``(i) Regular enrollment option.--Pursuant 
                        to such memorandum, insofar as the memorandum 
                        has selected the option described in section 
                        205(e)(3)(A) of the America's Affordable Health 
                        Choices Act of 2009, the State shall accept 
                        without further determination the enrollment 
                        under this title of an individual determined by 
                        the Commissioner to be a traditional Medicaid 
                        eligible individual. The State may do 
                        redeterminations of eligibility of such 
                        individual consistent with such section and the 
                        memorandum.
                            ``(ii) Presumptive eligibility option.--
                        Pursuant to such memorandum, insofar as the 
                        memorandum has selected the option described in 
                        section 205(e)(3)(B) of the America's 
                        Affordable Health Choices Act of 2009, the 
                        State shall provide for making medical 
                        assistance available during the presumptive 
                        eligibility period and shall, upon application 
                        of the individual for medical assistance under 
                        this title, promptly make a determination (and 
                        subsequent redeterminations) of eligibility in 
                        the same manner as if the individual had 
                        applied directly to the State for such 
                        assistance except that the State shall use the 
                        income-related information used by the 
                        Commissioner and provided to the State under 
                        the memorandum in making the presumptive 
                        eligibility determination to the maximum extent 
                        feasible.
            ``(3) Determinations of eligibility for affordability 
        credits.--If the Commissioner determines that a State Medicaid 
        agency has the capacity to make determinations of eligibility 
        for affordability credits under subtitle C of title II of 
        subdivision A of the America's Affordable Health Choices Act of 
        2009, under such memorandum--
                    ``(A) the State Medicaid agency shall conduct such 
                determinations for any Exchange-eligible individual who 
                requests such a determination;
                    ``(B) in the case that a State Medicaid agency 
                determines that an Exchange-eligible individual is not 
                eligible for affordability credits, the agency shall 
                forward the information on the basis of which such 
                determination was made to the Commissioner; and
                    ``(C) the Commissioner shall reimburse the State 
                Medicaid agency for the costs of conducting such 
                determinations. 
    ``(b) Treatment of Certain Newborns.--
            ``(1) In general.--In the case of a child who is deemed 
        under section 205(d)(1) of the America's Affordable Health 
        Choices Act of 2009 to be a non-traditional Medicaid eligible 
        individual and enrolled under this title pursuant to such 
        section, the State shall provide for a determination, by not 
        later than the end of the period referred to in subparagraph 
        (A) of such section, of the child's eligibility for medical 
        assistance under this title.
            ``(2) Extended treatment as traditional medicaid eligible 
        individual.--In accordance with subparagraph (B) of section 
        205(d)(1) of the America's Affordable Health Choices Act of 
        2009, in the case of a child described in subparagraph (A) of 
        such section who at the end of the period referred to in such 
        subparagraph is not otherwise covered under acceptable 
        coverage, the child shall be deemed (until such time as the 
        child obtains such coverage or the State otherwise makes a 
        determination of the child's eligibility for medical assistance 
        under its plan under this title pursuant to paragraph (1)) to 
        be a traditional Medicaid eligible individual described in 
        section 1902(l)(1)(B).
    ``(c) Definitions .--In this section:
            ``(1) Medicaid eligible individuals.--In this section, the 
        terms `Medicaid eligible individual', `traditional Medicaid 
        eligible individual', and `non-traditional Medicaid eligible 
        individual' have the meanings given such terms in section 
        205(e)(5) of the America's Affordable Health Choices Act of 
        2009.
            ``(2) Memorandum.--The term `memorandum' means a Medicaid 
        memorandum of understanding under section 205(e)(4) of the 
        America's Affordable Health Choices Act of 2009.
            ``(3) Y1.--The term `Y1' has the meaning given such term in 
        section 100(c) of the America's Affordable Health Choices Act 
        of 2009.''.
    (b) Conforming Amendments to Error Rate.--
            (1) Section 1903(u)(1)(D) of the Social Security Act (42 
        U.S.C. 1396b(u)(1)(D)) is amended by adding at the end the 
        following new clause:
    ``(vi) In determining the amount of erroneous excess payments, 
there shall not be included any erroneous payments made that are 
attributable to an error in an eligibility determination under subtitle 
C of title II of subdivision A of the America's Affordable Health 
Choices Act of 2009.''.
            (2) Section 2105(c)(11) of such Act (42 U.S.C. 
        1397ee(c)(11)) is amended by adding at the end the following 
        new sentence: ``Clause (vi) of section 1903(u)(1)(D) shall 
        apply with respect to the application of such requirements 
        under this title and title XIX.''.

SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.

    (a) CHIP Maintenance of Effort.--Section 1902 of the Social 
Security Act (42 U.S.C. 1396a) is amended--
            (1) in subsection (a), as amended by section 
        1631(b)(1)(D)--
                    (A) by striking ``and'' at the end of paragraph 
                (72);
                    (B) by striking the period at the end of paragraph 
                (73) and inserting ``; and''; and
                    (C) by inserting after paragraph (74) the following 
                new paragraph:
            ``(75) provide for maintenance of effort under the State 
        child health plan under title XXI in accordance with subsection 
        (gg).''; and
            (2) by adding at the end the following new subsection:
    ``(gg) CHIP Maintenance of Effort Requirement.--
            ``(1) In general.--Subject to paragraph (2), as a condition 
        of its State plan under this title under subsection (a)(75) and 
        receipt of any Federal financial assistance under section 
        1903(a) for calendar quarters beginning after the date of the 
        enactment of this subsection and before CHIP MOE termination 
        date specified in paragraph (3), a State shall not have in 
        effect eligibility standards, methodologies, or procedures 
        under its State child health plan under title XXI (including 
        any waiver under such title or under section 1115 that is 
        permitted to continue effect) that are more restrictive than 
        the eligibility standards, methodologies, or procedures, 
        respectively, under such plan (or waiver) as in effect on June 
        16, 2009.
            ``(2) Limitation.--Paragraph (1) shall not be construed as 
        preventing a State from imposing a limitation described in 
        section 2110(b)(5)(C)(i)(II) for a fiscal year in order to 
        limit expenditures under its State child health plan under 
        title XXI to those for which Federal financial participation is 
        available under section 2105 for the fiscal year.
            ``(3) CHIP moe termination date.--In paragraph (1), the 
        `CHIP MOE termination date' for a State is the date that is the 
        first day of Y1 (as defined in section 100(c) of the America's 
        Affordable Health Choices Act of 2009) or, if later, the first 
        day after such date that both of the following determinations 
        have been made:
                    ``(A) The Health Choices Commissioner has 
                determined that the Health Insurance Exchange has the 
                capacity to support the participation of CHIP enrollees 
                who are Exchange-eligible individuals (as defined in 
                section 202(b) of the America's Affordable Health 
                Choices Act of 2009),
                    ``(B) The Secretary has determined that such 
                Exchange, the State, and employers have procedures in 
                effect to ensure the timely transition without 
                interruption of coverage of CHIP enrollees from 
                assistance under title XXI to acceptable coverage (as 
                defined for purposes of such Act).
        In this paragraph, the term `CHIP enrollee' means a targeted 
        low-income child or (if the State has elected the option under 
        section 2112, a targeted low-income pregnant woman) who is or 
        otherwise would be (but for acceptable coverage) eligible for 
        child health assistance or pregnancy-related assistance, 
        respectively, under the State child health plan referred to in 
        paragraph (1).''.
    (b) Medicaid Maintenance of Effort; Simplifying and Coordinating 
Eligibility Rules Between Exchange and Medicaid.--
            (1) In general.--Section 1903 of such Act (42 U.S.C. 1396b) 
        is amended by adding at the end the following new subsection:
    ``(aa) Maintenance of Medicaid Effort; Simplifying and Coordinating 
Eligibility Rules Between Health Insurance Exchange and Medicaid.--
            ``(1) Maintenance of effort.--A State is not eligible for 
        payment under subsection (a) for a calendar quarter beginning 
        after the date of the enactment of this subsection if 
        eligibility standards, methodologies, or procedures under its 
        plan under this title (including any waiver under this title or 
        under section 1115 that is permitted to continue effect) that 
        are more restrictive than the eligibility standards, 
        methodologies, or procedures, respectively, under such plan (or 
        waiver) as in effect on June 16, 2009. The Secretary shall 
        extend such a waiver (including the availability of Federal 
        financial participation under such waiver) for such period as 
        may be required for a State to meet the requirement of the 
        previous sentence.
            ``(2) Removal of asset test for certain eligibility 
        categories.--
                    ``(A) In general.--A State is not eligible for 
                payment under subsection (a) for a calendar quarter 
                beginning on or after the first day of Y1 (as defined 
                in section 100(c) of the America's Affordable Health 
                Choices Act of 2009), if the State applies any asset or 
                resource test in determining (or redetermining) 
                eligibility of any individual on or after such first 
                day under any of the following:
                            ``(i) Subclause (I), (III), (IV), or (VI) 
                        of section 1902(a)(10)(A)(i).
                            ``(ii) Subclause (II), (IX), (XIV) or 
                        (XVII) of section 1902(a)(10)(A)(ii).
                            ``(iii) Section 1931(b).
                    ``(B) Overriding contrary provisions; references.--
                The provisions of this title that prevent the waiver of 
                an asset or resource test described in subparagraph (A) 
                are hereby waived.
                    ``(C) References.--Any reference to a provision 
                described in a provision in subparagraph (A) shall be 
                deemed to be a reference to such provision as modified 
                through the application of subparagraphs (A) and 
                (B).''.
            (2) Conforming amendments.--(A) Section 1902(a)(10)(A) of 
        such Act (42 U.S.C. 1396a(a)(10)(A)) is amended, in the matter 
        before clause (i), by inserting ``subject to section 
        1903(aa)(2),'' after ``(A)''.
            (B) Section 1931(b)(2) of such Act (42 U.S.C. 1396u-
        1(b)(1)) is amended by inserting ``subject to section 
        1903(aa)(2)'' after ``and (3)''.
    (c) Standards for Benchmark Packages.--Section 1937(b) of such Act 
(42 U.S.C. 1396u-7(b)) is amended--
            (1) in paragraph (1), by inserting ``subject to paragraph 
        (5)''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Minimum standards.--Effective January 1, 2013, any 
        benchmark benefit package (or benchmark equivalent coverage 
        under paragraph (2)) must meet the minimum benefits and cost-
        sharing standards of a basic plan offered through the Health 
        Insurance Exchange.''.

SEC. 1704. REDUCTION IN MEDICAID DSH.

    (a) Report.--
            (1) In general.--Not later than January 1, 2016, the 
        Secretary of Health and Human Services (in this title referred 
        to as the ``Secretary'') shall submit to Congress a report 
        concerning the extent to which, based upon the impact of the 
        health care reforms carried out under subdivision A in reducing 
        the number of uninsured individuals, there is a continued role 
        for Medicaid DSH. In preparing the report, the Secretary shall 
        consult with community-based health care networks serving low-
        income beneficiaries.
            (2) Matters to be included.--The report shall include the 
        following:
                    (A) Recommendations.--Recommendations regarding--
                            (i) the appropriate targeting of Medicaid 
                        DSH within States; and
                            (ii) the distribution of Medicaid DSH among 
                        the States.
                    (B) Specification of dsh health reform 
                methodology.--The DSH Health Reform methodology 
                described in paragraph (2) of subsection (b) for 
                purposes of implementing the requirements of such 
                subsection.
            (3) Coordination with medicare dsh report.--The Secretary 
        shall coordinate the report under this subsection with the 
        report on Medicare DSH under section 1112.
            (4) Medicaid dsh.--In this section, the term ``Medicaid 
        DSH'' means adjustments in payments under section 1923 of the 
        Social Security Act for inpatient hospital services furnished 
        by disproportionate share hospitals.
    (b) Medicaid DSH Reductions.--
            (1) In general.--The Secretary shall reduce Medicaid DSH so 
        as to reduce total Federal payments to all States for such 
        purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000 
        in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.
            (2) DSH health reform methodology.--The Secretary shall 
        carry out paragraph (1) through use of a DSH Health Reform 
        methodology issued by the Secretary that imposes the largest 
        percentage reductions on the States that--
                    (A) have the lowest percentages of uninsured 
                individuals (determined on the basis of audited 
                hospital cost reports) during the most recent year for 
                which such data are available; or
                    (B) do not target their DSH payments on--
                            (i) hospitals with high volumes of Medicaid 
                        inpatients (as defined in section 1923(b)(1)(A) 
                        of the Social Security Act (42 U.S.C. 1396r-
                        4(b)(1)(A)); and
                            (ii) hospitals that have high levels of 
                        uncompensated care (excluding bad debt).
            (3) DSH allotment publications.--
                    (A) In general.--Not later than the publication 
                deadline specified in subparagraph (B), the Secretary 
                shall publish in the Federal Register a notice 
                specifying the DSH allotment to each State under 
                1923(f) of the Social Security Act for the respective 
                fiscal year specified in such subparagraph, consistent 
                with the application of the DSH Health Reform 
                methodology described in paragraph (2).
                    (B) Publication deadline.--The publication deadline 
                specified in this subparagraph is--
                            (i) January 1, 2016, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2017;
                            (ii) January 1, 2017, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2018; and
                            (iii) January 1, 2018, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2019.
    (c) Conforming Amendments.--
            (1) Section 1923(f) of the Social Security Act (42 U.S.C. 
        1396r-4(f)) is amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (8); and
                    (B) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) Special rule for fiscal years 2017, 2018, and 2019.--
                    ``(A) Fiscal year 2017.--Notwithstanding paragraph 
                (2), the total DSH allotments for all States for--
                            ``(i) fiscal year 2017, shall be the total 
                        DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $1,500,000,000;
                            ``(ii) fiscal year 2018, shall be the total 
                        DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $2,500,000,000; and
                            ``(iii) fiscal year 2019, shall be the 
                        total DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $6,000,000,000.''.
            (2) Section 1923(b)(4) of such Act (42 U.S.C. 1396r-
        4(b)(4)) is amended by adding before the period the following: 
        ``or to affect the authority of the Secretary to issue and 
        implement the DSH Health Reform methodology under section 
        1704(b)(2) of the America's Health Choices Act of 2009''.
    (d) Disproportionate Share Hospitals (DSH) and Essential Access 
Hospital (EAH) Non-Discrimination.--
            (1) In general.--Section 1923(d) of the Social Security Act 
        (42 U.S.C. 1396r-4) is amended by adding at the end the 
        following new paragraph:
            ``(4) No hospital may be defined or deemed as a 
        disproportionate share hospital, or as an essential access 
        hospital (for purposes of subsection (f)(6)(A)(iv), under a 
        State plan under this title or subsection (b) of this section 
        (including any waiver under section 1115) unless the hospital--
                    ``(A) provides services to beneficiaries under this 
                title without discrimination on the ground of race, 
                color, national origin, creed, source of payment, 
                status as a beneficiary under this title, or any other 
                ground unrelated to such beneficiary's need for the 
                services or the availability of the needed services in 
                the hospital; and
                    ``(B) makes arrangements for, and accepts, 
                reimbursement under this title for services provided to 
                eligible beneficiaries under this title.''.
            (2) Effective date.--The amendment made by subsection (a) 
        shall be apply to expenditures made on or after July 1, 2010.

SEC. 1705. EXPANDED OUTSTATIONING.

    (a) In General.--Section 1902(a)(55) of the Social Security Act (42 
U.S.C. 1396a(a)(55)) is amended by striking ``under subsection 
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 
(a)(10)(A)(ii)(IX)'' and inserting ``(including receipt and processing 
of applications of individuals for affordability credits under subtitle 
C of title II of subdivision A of the America's Affordable Health 
Choices Act of 2009 pursuant to a Medicaid memorandum of understanding 
under section 1943(a)(1))''.
    (b) Effective Date.--
            (1) Except as provided in paragraph (2), the amendment made 
        by subsection (a) shall apply to services furnished on or after 
        July 1, 2010, without regard to whether or not final 
        regulations to carry out such amendment have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirement imposed 
        by the amendment made by this section, the State plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

                         Subtitle B--Prevention

SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERVICES.

    (a) Coverage.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by section 1701(a)(2)(B), is amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``and (D) preventive services described 
                in subsection (z)''; and
            (2) by adding at the end the following new subsection:
    ``(z) Preventive Services.--The preventive services described in 
this subsection are services not otherwise described in subsection (a) 
or (r) that the Secretary determines are--
            ``(1)(A) recommended with a grade of A or B by the Task 
        Force for Clinical Preventive Services; or
            ``(B) vaccines recommended for use as appropriate by the 
        Director of the Centers for Disease Control and Prevention; and
            ``(2) appropriate for individuals entitled to medical 
        assistance under this title.''.
    (b) Conforming Amendment.--Section 1928 of such Act (42 U.S.C. 
1396s) is amended--
            (1) in subsection (c)(2)(B)(i), by striking ``the advisory 
        committee referred to in subsection (e)'' and inserting ``the 
        Director of the Centers for Disease Control and Prevention'';
            (2) in subsection (e), by striking ``Advisory Committee'' 
        and all that follows and inserting ``Director of the Centers 
        for Disease Control and Prevention.''; and
            (3) by striking subsection (g).
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after July 1, 2010, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirements imposed 
        by the amendments made by this section, the State plan shall 
        not be regarded as failing to comply with the requirements of 
        such title solely on the basis of its failure to meet these 
        additional requirements before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1712. TOBACCO CESSATION.

    (a) Dropping Tobacco Cessation Exclusion From Covered Outpatient 
Drugs.--Section 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
8(d)(2)) is amended--
            (1) by striking subparagraph (E);
            (2) in subparagraph (G), by inserting before the period at 
        the end the following: ``, except agents approved by the Food 
        and Drug Administration for purposes of promoting, and when 
        used to promote, tobacco cessation''; and
            (3) by redesignating subparagraphs (F) through (K) as 
        subparagraphs (E) through (J), respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to drugs and services furnished on or after January 1, 2010.

SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITATION SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by sections 1701(a)(2) and 1711(a), is amended--
            (1) in subsection (a)--
                    (A) in paragraph (27), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (28) as paragraph 
                (29); and
                    (C) by inserting after paragraph (27) the following 
                new paragraph:
            ``(28) nurse home visitation services (as defined in 
        subsection (aa)); and''; and
            (2) by adding at the end the following new subsection:
    ``(aa) The term `nurse home visitation services' means home visits 
by trained nurses to families with a first-time pregnant woman, or a 
child (under 2 years of age), who is eligible for medical assistance 
under this title, but only, to the extent determined by the Secretary 
based upon evidence, that such services are effective in one or more of 
the following:
            ``(1) Improving maternal or child health and pregnancy 
        outcomes or increasing birth intervals between pregnancies.
            ``(2) Reducing the incidence of child abuse, neglect, and 
        injury, improving family stability (including reduction in the 
        incidence of intimate partner violence), or reducing maternal 
        and child involvement in the criminal justice system.
            ``(3) Increasing economic self-sufficiency, employment 
        advancement, school-readiness, and educational achievement, or 
        reducing dependence on public assistance.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.
    (c) Construction.--Nothing in the amendments made by this section 
shall be construed as affecting the ability of a State under title XIX 
or XXI of the Social Security Act to provide nurse home visitation 
services as part of another class of items and services falling within 
the definition of medical assistance or child health assistance under 
the respective title, or as an administrative expenditure for which 
payment is made under section 1903(a) or 2105(a) of such Act, 
respectively, on or after the date of the enactment of this Act.

SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (a) Coverage as Optional Categorically Needy Group.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                    (A) in subclause (XVIII), by striking ``or'' at the 
                end;
                    (B) in subclause (XIX), by adding ``or'' at the 
                end; and
                    (C) by adding at the end the following new 
                subclause:
            ``(XX) who are described in subsection (hh) (relating to 
        individuals who meet certain income standards);''.
            (2) Group described.--Section 1902 of such Act (42 U.S.C. 
        1396a), as amended by section 1703, is amended by adding at the 
        end the following new subsection:
    ``(hh)(1) Individuals described in this subsection are 
individuals--
                    ``(A) whose income does not exceed an income 
                eligibility level established by the State that does 
                not exceed the highest income eligibility level 
                established under the State plan under this title (or 
                under its State child health plan under title XXI) for 
                pregnant women; and
                    ``(B) who are not pregnant.
            ``(2) At the option of a State, individuals described in 
        this subsection may include individuals who, had individuals 
        applied on or before January 1, 2007, would have been made 
        eligible pursuant to the standards and processes imposed by 
        that State for benefits described in clause (XV) of the matter 
        following subparagraph (G) of section subsection (a)(10) 
        pursuant to a waiver granted under section 1115.
            ``(3) At the option of a State, for purposes of subsection 
        (a)(17)(B), in determining eligibility for services under this 
        subsection, the State may consider only the income of the 
        applicant or recipient.''.
            (3) Limitation on benefits.--Section 1902(a)(10) of such 
        Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following 
        subparagraph (G)--
                    (A) by striking ``and (XIV)'' and inserting 
                ``(XIV)''; and
                    (B) by inserting ``, and (XV) the medical 
                assistance made available to an individual described in 
                subsection (hh) shall be limited to family planning 
                services and supplies described in section 
                1905(a)(4)(C) including medical diagnosis and treatment 
                services that are provided pursuant to a family 
                planning service in a family planning setting'' after 
                ``cervical cancer''.
            (4) Conforming amendments.--Section 1905(a) of such Act (42 
        U.S.C. 1396d(a)), as amended by section 1731(c), is amended in 
        the matter preceding paragraph (1)--
                    (A) in clause (xiii), by striking ``or'' at the 
                end;
                    (B) in clause (xiv), by adding ``or'' at the end; 
                and
                    (C) by inserting after clause (xiv) the following:
                            ``(xv) individuals described in section 
                        1902(hh),''.
    (b) Presumptive Eligibility.--
            (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended by inserting after section 
        1920B the following:

         ``presumptive eligibility for family planning services

    ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(hh) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(hh), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Presumptive eligibility period.--The term 
        `presumptive eligibility period' means, with respect to an 
        individual described in subsection (a), the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(hh); and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                            ``(ii) in the case of such an individual 
                        who does not file an application by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(2) Qualified entity.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                            ``(i) is eligible for payments under a 
                        State plan approved under this title; and
                            ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities in order to prevent fraud and abuse.
    ``(c) Administration.--
            ``(1) In general.--The State agency shall provide qualified 
        entities with--
                    ``(A) such forms as are necessary for an 
                application to be made by an individual described in 
                subsection (a) for medical assistance under the State 
                plan; and
                    ``(B) information on how to assist such individuals 
                in completing and filing such forms.
            ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection (a) is presumptively eligible for 
        medical assistance under a State plan shall--
                    ``(A) notify the State agency of the determination 
                within 5 working days after the date on which 
                determination is made; and
                    ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance is required to be made by not later than the 
                last day of the month following the month during which 
                the determination is made.
            ``(3) Application for medical assistance.--In the case of 
        an individual described in subsection (a) who is determined by 
        a qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance by not later than the last day of the month 
        following the month during which the determination is made.
    ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
            ``(1) is furnished to an individual described in subsection 
        (a)--
                    ``(A) during a presumptive eligibility period;
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)) is amended by inserting before 
                the semicolon at the end the following: ``and provide 
                for making medical assistance available to individuals 
                described in subsection (a) of section 1920C during a 
                presumptive eligibility period in accordance with such 
                section''.
                    (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
                1396b(u)(1)(D)(v)) is amended--
                            (i) by striking ``or for'' and inserting 
                        ``for''; and
                            (ii) by inserting before the period the 
                        following: ``, or for medical assistance 
                        provided to an individual described in 
                        subsection (a) of section 1920C during a 
                        presumptive eligibility period under such 
                        section''.
    (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)) is amended by adding at the end the following:
            ``(5) Coverage of family planning services and supplies.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark-
        equivalent coverage under this section unless such coverage 
        includes for any individual described in section 1905(a)(4)(C), 
        medical assistance for family planning services and supplies in 
        accordance with such section.''.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

                           Subtitle C--Access

SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS.

    (a) In General.--
            (1) Fee-for-service payments.--Section 1902(a)(13) of the 
        Social Security Act (42 U.S.C. 1396b(a)(13)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A);
                    (B) by adding ``and'' at the end of subparagraph 
                (B); and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) payment for primary care services (as defined 
                in section 1848(j)(5)(A), but applied without regard to 
                clause (ii) thereof) furnished by physicians (or for 
                services furnished by other health care professionals 
                that would be primary care services under such section 
                if furnished by a physician) at a rate not less than 80 
                percent of the payment rate applicable to such services 
                and physicians or professionals (as the case may be) 
                under part B of title XVIII for services furnished in 
                2010, 90 percent of such rate for services and 
                physicians (or professionals) furnished in 2011, and 
                100 percent of such payment rate for services and 
                physicians (or professionals) furnished in 2012 or a 
                subsequent year;''.
            (2) Under medicaid managed care plans.--Section 1923(f) of 
        such Act (42 U.S.C. 1396u-2(f)) is amended--
                    (A) in the heading, by adding at the end the 
                following: ``; Adequacy of Payment for Primary Care 
                Services''; and
                    (B) by inserting before the period at the end the 
                following: ``and, in the case of primary care services 
                described in section 1902(a)(13)(C), consistent with 
                the minimum payment rates specified in such section 
                (regardless of the manner in which such payments are 
                made, including in the form of capitation or partial 
                capitation)''.
    (b) Increase in Payment Using 100% FMAP.--Section 1905(y), as added 
by section 1701(a)(2)(B) and as amended by section 1701(c)(2), is 
amended by adding at the end the following:
            ``(3)(A) The portion of the amounts expended for medical 
        assistance for services described in section 1902(a)(13)(C) 
        furnished on or after January 1, 2010, that is attributable to 
        the amount by which the minimum payment rate required under 
        such section (or, by application, section 1932(f)) exceeds the 
        payment rate applicable to such services under the State plan 
        as of June 16, 2009.
            ``(B) Subparagraphs (A) shall not be construed as 
        preventing the payment of Federal financial participation based 
        on the Federal medical assistance percentage for amounts in 
        excess of those specified under such subparagraphs.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.

SEC. 1722. MEDICAL HOME PILOT PROGRAM.

    (a) In General.--The Secretary of Health and Human Services shall 
establish under this section a medical home pilot program under which a 
State may apply to the Secretary for approval of a medical home pilot 
project described in subsection (b) (in this section referred to as a 
``pilot project'') for the application of the medical home concept 
under title XIX of the Social Security Act. The pilot program shall 
operate for a period of up to 5 years.
    (b) Pilot Project Described.--
            (1) In general.--A pilot project is a project that applies 
        one or more of the medical home models described in section 
        1866E(a)(3) of the Social Security Act (as inserted by section 
        1302(a)) or such other model as the Secretary may approve, to 
        high need beneficiaries (including medically fragile children 
        and high-risk pregnant women) who are eligible for medical 
        assistance under title XIX of the Social Security Act. The 
        Secretary shall provide for appropriate coordination of the 
        pilot program under this section with the medical home pilot 
        program under section 1866E of such Act.
            (2) Limitation.--A pilot project shall be for a duration of 
        not more than 5 years.
    (c) Additional Incentives.--In the case of a pilot project, the 
Secretary may--
            (1) waive the requirements of section 1902(a)(1) of the 
        Social Security Act (relating to statewideness) and section 
        1902(a)(10)(B) of such Act (relating to comparability); and
            (2) increase to up to 90 percent (for the first 2 years of 
        the pilot program) or 75 percent (for the next 3 years) the 
        matching percentage for administrative expenditures (such as 
        those for community care workers).
    (d) Medically Fragile Children.--In the case of a model involving 
medically fragile children, the model shall ensure that the patient-
centered medical home services received by each child, in addition to 
fulfilling the requirements under 1866E(b)(1) of the Social Security 
Act, provide for continuous involvement and education of the parent or 
caregiver and for assistance to the child in obtaining necessary 
transitional care if a child's enrollment ceases for any reason.
    (e) Evaluation; Report.--
            (1) Evaluation.--The Secretary, using the criteria 
        described in section 1866E(g)(1) of the Social Security Act (as 
        inserted by section 1123), shall conduct an evaluation of the 
        pilot program under this section.
            (2) Report.--Not later than 60 days after the date of 
        completion of the evaluation under paragraph (1), the Secretary 
        shall submit to Congress and make available to the public a 
        report on the findings of the evaluation under such paragraph.
    (f) Funding.--The additional Federal financial participation 
resulting from the implementation of the pilot program under this 
section may not exceed in the aggregate $1,235,000,000 over the 5-year 
period of the program.

SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.

    (a) In General.--Section 1903(a)(2)(E) of the Social Security Act 
(42 U.S.C. 1396b(a)(2)), as added by section 201(b)(2)(A) of the 
Children's Health Insurance Program Reauthorization Act of 2009 (Public 
Law 111-3), is amended by inserting ``and other individuals'' after 
``children of families''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payment for translation or interpretation services furnished 
on or after January 1, 2010.

SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by section 1713(a), is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraph (29) as paragraph 
                (30);
                    (B) in paragraph (28), by striking at the end 
                ``and''; and
                    (C) by inserting after paragraph (28) the following 
                new paragraph:
            ``(29) freestanding birth center services (as defined in 
        subsection (l)(3)(A)) and other ambulatory services that are 
        offered by a freestanding birth center (as defined in 
        subsection (l)(3)(B)) and that are otherwise included in the 
        plan; and''; and
            (2) in subsection (l), by adding at the end the following 
        new paragraph:
    ``(3)(A) The term `freestanding birth center services' means 
services furnished to an individual at a freestanding birth center (as 
defined in subparagraph (B)), including by a licensed birth attendant 
(as defined in subparagraph (C)) at such center.
    ``(B) The term `freestanding birth center' means a health 
facility--
            ``(i) that is not a hospital; and
            ``(ii) where childbirth is planned to occur away from the 
        pregnant woman's residence.
    ``(C) The term `licensed birth attendant' means an individual who 
is licensed or registered by the State involved to provide health care 
at childbirth and who provides such care within the scope of practice 
under which the individual is legally authorized to perform such care 
under State law (or the State regulatory mechanism provided by State 
law), regardless of whether the individual is under the supervision of, 
or associated with, a physician or other health care provider. Nothing 
in this subparagraph shall be construed as changing State law 
requirements applicable to a licensed birth attendant.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after the date of the 
enactment of this Act.

SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER THE VACCINES FOR 
              CHILDREN PROGRAM.

    Section 1928(b)(2)(A)(iii)(I) of the Social Security Act (42 U.S.C. 
1396s(b)(2)(A)(iii)(I)) is amended--
            (1) by striking ``or a rural health clinic'' and inserting 
        ``, a rural health clinic''; and
            (2) by inserting ``or a public health clinic,'' after 
        ```1905(l)(1)),''.

                          Subtitle D--Coverage

SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-INCOME HIV-INFECTED 
              INDIVIDUALS.

    (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396a), as amended by section 1714(a)(1), is amended--
            (1) in subsection (a)(10)(A)(ii)--
                    (A) by striking ``or'' at the end of subclause 
                (XIX);
                    (B) by adding ``or'' at the end of subclause (XX); 
                and
                    (C) by adding at the end the following:
            ``(XXI) who are described in subsection (ii) (relating to 
        HIV-infected individuals);''; and
            (2) by adding at the end, as amended by sections 1703 and 
        1714(a), the following:
    ``(ii) individuals described in this subsection are individuals not 
described in subsection (a)(10)(A)(i)--
            ``(1) who have HIV infection;
            ``(2) whose income (as determined under the State plan 
        under this title with respect to disabled individuals) does not 
        exceed the maximum amount of income a disabled individual 
        described in subsection (a)(10)(A)(i) may have and obtain 
        medical assistance under the plan; and
            ``(3) whose resources (as determined under the State plan 
        under this title with respect to disabled individuals) do not 
        exceed the maximum amount of resources a disabled individual 
        described in subsection (a)(10)(A)(i) may have and obtain 
        medical assistance under the plan.''.
    (b) Enhanced Match.--The first sentence of section 1905(b) of such 
Act (42 U.S.C. 1396d(b)) is amended by striking ``section 
1902(a)(10)(A)(ii)(XVIII)'' and inserting ``subclause (XVIII) or (XX) 
of section 1902(a)(10)(A)(ii)''.
    (c) Conforming Amendments.--Section 1905(a) of such Act (42 U.S.C. 
1396d(a)) is amended, in the matter preceding paragraph (1)--
            (1) by striking ``or'' at the end of clause (xii);
            (2) by adding ``or'' at the end of clause (xiii); and
            (3) by inserting after clause (xiii) the following:
                            ``(xiv) individuals described in section 
                        1902(ii),''.
    (d) Exemption From Funding Limitation for Territories.--Section 
1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is amended by 
adding at the end the following:
            ``(5) Disregarding medical assistance for optional low-
        income hiv-infected individuals.--The limitations under 
        subsection (f) and the previous provisions of this subsection 
        shall not apply to amounts expended for medical assistance for 
        individuals described in section 1902(ii) who are only eligible 
        for such assistance on the basis of section 
        1902(a)(10)(A)(ii)(XX).''.
    (e) Effective Date; Sunset.--The amendments made by this section 
shall apply to expenditures for calendar quarters beginning on or after 
the date of the enactment of this Act, and before January 1, 2013, 
without regard to whether or not final regulations to carry out such 
amendments have been promulgated by such date.

SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSISTANCE (TMA).

    Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 
U.S.C. 1396a(e)(1)(B), 1396r-6(f)), as amended by section 5004(a)(1) of 
the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), 
are each amended by striking ``December 31, 2010'' and inserting 
``December 31, 2012''.

SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COVERAGE UNDER CERTAIN 
              CHIP PROGRAMS.

    (a) In General.--Section 2102(b) of the Social Security Act (42 
U.S.C. 1397bb(b)) is amended by adding at the end the following new 
paragraph:
            ``(6) Requirement for 12-month continuous eligibility.--In 
        the case of a State child health plan that provides child 
        health assistance under this title through a means other than 
        described in section 2101(a)(2), the plan shall provide for 
        implementation under this title of the 12-month continuous 
        eligibility option described in section 1902(e)(12) for 
        targeted low-income children whose family income is below 200 
        percent of the poverty line.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to determinations (and redeterminations) of eligibility made on 
or after January 1, 2010.

                         Subtitle E--Financing

SEC. 1741. PAYMENTS TO PHARMACISTS.

    (a) Pharmacy Reimbursement Limits.--
            (1) In general.--Section 1927(e) of the Social Security Act 
        (42 U.S.C. 1396r-8(e)) is amended--
                    (A) by striking paragraph (5) and inserting the 
                following:
            ``(5) Use of amp in upper payment limits.--The Secretary 
        shall calculate the Federal upper reimbursement limit 
        established under paragraph (4) as 130 percent of the weighted 
        average (determined on the basis of manufacturer utilization) 
        of monthly average manufacturer prices.''.
            (2) Definition of amp.--Section 1927(k)(1)(B) of such Act 
        (42 U.S.C. 1396r-8(k)(1)(B)) is amended--
                    (B) in the heading, by striking ``extended to 
                wholesalers'' and inserting ``and other payments''; and
                    (C) by striking ``regard to'' and all that follows 
                through the period and inserting the following: 
                ``regard to--
                            ``(i) customary prompt pay discounts 
                        extended to wholesalers;
                            ``(ii) bona fide service fees paid by 
                        manufacturers;
                            ``(iii) reimbursement by manufacturers for 
                        recalled, damaged, expired, or otherwise 
                        unsalable returned goods, including 
                        reimbursement for the cost of the goods and any 
                        reimbursement of costs associated with return 
                        goods handling and processing, reverse 
                        logistics, and drug destruction;
                            ``(iv) sales directly to, or rebates, 
                        discounts, or other price concessions provided 
                        to, pharmacy benefit managers, managed care 
                        organizations, health maintenance 
                        organizations, insurers, mail order pharmacies 
                        that are not open to all members of the public, 
                        or long term care providers, provided that 
                        these rebates, discounts, or price concessions 
                        are not passed through to retail pharmacies;
                            ``(v) sales directly to, or rebates, 
                        discounts, or other price concessions provided 
                        to, hospitals, clinics, and physicians, unless 
                        the drug is an inhalation, infusion, or 
                        injectable drug, or unless the Secretary 
                        determines, as allowed for in Agency 
                        administrative procedures, that it is necessary 
                        to include such sales, rebates, discounts, and 
                        price concessions in order to obtain an 
                        accurate AMP for the drug. Such a determination 
                        shall not be subject to judicial review; or
                            ``(vi) rebates, discounts, and other price 
                        concessions required to be provided under 
                        agreements under subsections (f) and (g) of 
                        section 1860D-2(f).''.
            (3) Manufacturer reporting requirements.--Section 
        1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                    (A) in subparagraph (A), by adding at the end the 
                following new clause:
                            ``(iv) not later than 30 days after the 
                        last day of each month of a rebate period under 
                        the agreement, on the manufacturer's total 
                        number of units that are used to calculate the 
                        monthly average manufacturer price for each 
                        covered outpatient drug.''.
            (4) Authority to promulgate regulation.--The Secretary of 
        Health and Human Services may promulgate regulations to clarify 
        the requirements for upper payment limits and for the 
        determination of the average manufacturer price in an expedited 
        manner. Such regulations may become effective on an interim 
        final basis, pending opportunity for public comment.
            (5) Pharmacy reimbursements through december 31, 2010.--The 
        specific upper limit under section 447.332 of title 42, Code of 
        Federal Regulations (as in effect on December 31, 2006) 
        applicable to payments made by a State for multiple source 
        drugs under a State Medicaid plan shall continue to apply 
        through December 31, 2010, for purposes of the availability of 
        Federal financial participation for such payments.
    (b) Disclosure of Price Information to the Public.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i), in the matter preceding 
                subclause (I), by inserting ``month of a'' after 
                ``each''; and
                    (B) in the last sentence, by striking ``and 
                shall,'' and all that follows through the period; and
            (2) in subparagraph (D)(v), by inserting ``weighted'' 
        before ``average manufacturer prices''.

SEC. 1742. PRESCRIPTION DRUG REBATES.

    (a) Additional Rebate for New Formulations of Existing Drugs.--
            (1) In general.--Section 1927(c)(2) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(C) Treatment of new formulations.--In the case 
                of a drug that is a line extension of a single source 
                drug or an innovator multiple source drug that is an 
                oral solid dosage form, the rebate obligation with 
                respect to such drug under this section shall be the 
                amount computed under this section for such new drug 
                or, if greater, the product of--
                            ``(i) the average manufacturer price of the 
                        line extension of a single source drug or an 
                        innovator multiple source drug that is an oral 
                        solid dosage form;
                            ``(ii) the highest additional rebate 
                        (calculated as a percentage of average 
                        manufacturer price) under this section for any 
                        strength of the original single source drug or 
                        innovator multiple source drug; and
                            ``(iii) the total number of units of each 
                        dosage form and strength of the line extension 
                        product paid for under the State plan in the 
                        rebate period (as reported by the State).
                In this subparagraph, the term `line extension' means, 
                with respect to a drug, an extended release formulation 
                of the drug.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to drugs dispensed after December 31, 2009.
    (b) Increase Minimum Rebate Percentage for Single Source Drugs.--
Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r-
8(c)(1)(B)(i)) is amended--
            (1) in subclause (IV), by striking ``and'' at the end;
            (2) in subclause (V)--
                    (A) by inserting ``and before January 1, 2010'' 
                after ``December 31, 1995,''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new subclause:
                                    ``(VI) after December 31, 2009, is 
                                22.1 percent.''.

SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF 
              MEDICAID MANAGED CARE ORGANIZATIONS.

    (a) In General.--Section 1903(m)(2)(A) of the Social Security Act 
(42 U.S.C. 1396b(m)(2)(A)) is amended--
            (1) in clause (xi), by striking ``and'' at the end;
            (2) in clause (xii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(xiii) such contract provides that the entity shall 
        report to the State such information, on such timely and 
        periodic basis as specified by the Secretary, as the State may 
        require in order to include, in the information submitted by 
        the State to a manufacturer under section 1927(b)(2)(A), 
        information on covered outpatient drugs dispensed to 
        individuals eligible for medical assistance who are enrolled 
        with the entity and for which the entity is responsible for 
        coverage of such drugs under this subsection.''.
    (b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C. 
1396r-8) is amended----
            (1) in the first sentence of subsection (b)(1)(A), by 
        inserting before the period at the end the following: ``, 
        including such drugs dispensed to individuals enrolled with a 
        medicaid managed care organization if the organization is 
        responsible for coverage of such drugs'';
            (2) in subsection (b)(2), by adding at the end the 
        following new subparagraph:
                    ``(C) Reporting on mmco drugs.--On a quarterly 
                basis, each State shall report to the Secretary the 
                total amount of rebates in dollars received from 
                pharmacy manufacturers for drugs provided to 
                individuals enrolled with Medicaid managed care 
                organizations that contract under section 1903(m).''; 
                and
            (3) in subsection (j)--
                    (A) in the heading by striking ``Exemption'' and 
                inserting ``Special Rules''; and
                    (B) in paragraph (1), by striking ``not''.
    (c) Effective Date.--The amendments made by this section take 
effect on July 1, 2010, and shall apply to drugs dispensed on or after 
such date, without regard to whether or not final regulations to carry 
out such amendments have been promulgated by such date.

SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDUCATION.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by sections 1701(a)(2), 1711(a), and 1713(a), is 
amended by adding at the end the following new subsection:
    ``(bb) Payment for Graduate Medical Education.--
            ``(1) In general.--The term `medical assistance' includes 
        payment for costs of graduate medical education consistent with 
        this subsection, whether provided in or outside of a hospital.
            ``(2) Submission of information.--For purposes of paragraph 
        (1) and section 1902(a)(13)(A)(v), payment for such costs is 
        not consistent with this subsection unless--
                    ``(A) the State submits to the Secretary, in a 
                timely manner and on an annual basis specified by the 
                Secretary, information on total payments for graduate 
                medical education and how such payments are being used 
                for graduate medical education, including--
                            ``(i) the institutions and programs 
                        eligible for receiving the funding;
                            ``(ii) the manner in which such payments 
                        are calculated;
                            ``(iii) the types and fields of education 
                        being supported;
                            ``(iv) the workforce or other goals to 
                        which the funding is being applied;
                            ``(v) State progress in meeting such goals; 
                        and
                            ``(vi) such other information as the 
                        Secretary determines will assist in carrying 
                        out paragraphs (3) and (4); and
                    ``(B) such expenditures are made consistent with 
                such goals and requirements as are established under 
                paragraph (4).
            ``(3) Review of information.--The Secretary shall make the 
        information submitted under paragraph (2) available to the 
        Advisory Committee on Health Workforce Evaluation and 
        Assessment (established under section 2261 of the Public Health 
        Service Act). The Secretary and the Advisory Committee shall 
        independently review the information submitted under paragraph 
        (2), taking into account State and local workforce needs.
            ``(4) Specification of goals and requirements.--The 
        Secretary shall specify by rule, initially published by not 
        later than December 31, 2011--
                    ``(A) program goals for the use of funds described 
                in paragraph (1), taking into account recommendations 
                of the such Advisory Committee and the goals for 
                approved medical residency training programs described 
                in section 1886(h)(1)(B); and
                    ``(B) requirements for use of such funds consistent 
                with such goals.
        Such rule may be effective on an interim basis pending revision 
        after an opportunity for public comment.''.
    (b) Conforming Amendment.--Section 1902(a)(13)(A) of such Act (42 
U.S.C. 1396a(a)(13)(A)) is amended--
            (1) by striking ``and'' at the end of clause (iii);
            (2) by striking ``; and'' and inserting ``, and''; and
            (3) by adding at the end the following new clause:
                            ``(v) in the case of hospitals and at the 
                        option of a State, such rates may include, to 
                        the extent consistent with section 1905(bb), 
                        payment for graduate medical education; and''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act. Nothing in this 
section shall be construed as affecting payments made before such date 
under a State plan under title XIX of the Social Security Act for 
graduate medical education.

                  Subtitle F--Waste, Fraud, and Abuse

SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS.

    (a) Medicaid Non-Payment for Certain Health Care-Acquired 
Conditions.--Section 1903(i) of the Social Security Act (42 U.S.C. 
1396b(i)) is amended--
            (1) by striking ``or'' at the end of paragraph (23);
            (2) by striking the period at the end of paragraph (24) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (24) the following new 
        paragraph:
            ``(25) with respect to amounts expended for services 
        related to the presence of a condition that could be identified 
        by a secondary diagnostic code described in section 
        1886(d)(4)(D)(iv) and for any health care acquired condition 
        determined as a non-covered service under title XVIII.''.
    (b) Application to CHIP.--Section 2107(e)(1)(G) of such Act (42 
U.S.C. 1397gg(e)(1)(G)) is amended by striking ``and (17)'' and 
inserting ``(17), and (25)''.
    (c) Permission To Include Additional Health Care-Acquired 
Conditions.--Nothing in this section shall prevent a State from 
including additional health care-acquired conditions for non-payment in 
its Medicaid program under title XIX of the Social Security Act.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges occurring on or after January 1, 2010.

SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICAID INTEGRITY 
              PROGRAM.

    Section 1936(c)(2)) of the Social Security Act (42 U.S.C. 1396u-
7(c)(2)) is amended--
            (1) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (2) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) For the contract year beginning in 2011 and 
                each subsequent contract year, the entity provides 
                assurances to the satisfaction of the Secretary that 
                the entity will conduct periodic evaluations of the 
                effectiveness of the activities carried out by such 
                entity under the Program and will submit to the 
                Secretary an annual report on such activities.''.

SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE 
              WASTE, FRAUD, AND ABUSE.

    Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as 
amended by sections 1631(b)(1) and 1703, is further amended--
            (1) in paragraph (74), by striking at the end ``and'';
            (2) in paragraph (75), by striking at the end the period 
        and inserting ``; and''; and
            (3) by inserting after paragraph (75) the following new 
        paragraph:
            ``(76) provide that any provider or supplier (other than a 
        physician or nursing facility) providing services under such 
        plan shall, subject to paragraph (5) of section 1874(d), 
        establish a compliance program described in paragraph (1) of 
        such section in accordance with such section.''.

SEC. 1754. OVERPAYMENTS.

    (a) In General.--Section 1903(d)(2)(C) of the Social Security Act 
(42 U.S.C. 1396b(d)(2)(C)) is amended by inserting ``(or 1 year in the 
case of overpayments due to fraud)'' after ``60 days''.
    (b) Effective Date.--In the case overpayments discovered on or 
after the date of the enactment of this Act.

SEC. 1755. MANAGED CARE ORGANIZATIONS.

    (a) Minimum Medical Loss Ratio.--
            (1) Medicaid.--Section 1903(m)(2)(A) of the Social Security 
        Act (42 U.S.C. 1396b(m)(2)(A)), as amended by section 
        1743(a)(3), is amended--
                    (A) by striking ``and'' at the end of clause (xii);
                    (B) by striking the period at the end of clause 
                (xiii) and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
            ``(xiv) such contract has a medical loss ratio, as 
        determined in accordance with a methodology specified by the 
        Secretary that is a percentage (not less than 85 percent) as 
        specified by the Secretary.''.
            (2) CHIP.--Section 2107(e)(1) of such Act (42 U.S.C. 
        1397gg(e)(1)) is amended--
                    (A) by redesignating subparagraphs (H) through (L) 
                as subparagraphs (I) through (M); and
                    (B) by inserting after subparagraph (G) the 
                following new subparagraph:
                    ``(H) Section 1903(m)(2)(A)(xiv) (relating to 
                application of minimum loss ratios), with respect to 
                comparable contracts under this title.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to contracts entered into or renewed on or after 
        July 1, 2010.
    (b) Patient Encounter Data.--
            (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
        Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by 
        inserting ``and for the provision of such data to the State at 
        a frequency and level of detail to be specified by the 
        Secretary'' after ``patients''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to contract years beginning on or 
        after January 1, 2010.

SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID AND 
              CHIP IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN OR 
              CHILD HEALTH PLAN.

    (a) State Plan Requirement.--Section 1902(a)(39) of the Social 
Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting 
after ``1128A,'' the following: ``terminate the participation of any 
individual or entity in such program if (subject to such exceptions are 
permitted with respect to exclusion under sections 1128(b)(3)(C) and 
1128(d)(3)(B)) participation of such individual or entity is terminated 
under title XVIII, any other State plan under this title, or any child 
health plan under title XXI,''.
    (b) Application to CHIP.--Section 2107(e)(1)(A) of such Act (42 
U.S.C. 1397gg(e)(1)(A)) is amended by inserting before the period at 
the end the following: ``and section 1902(a)(39) (relating to exclusion 
and termination of participation)''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after January 1, 2011, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act or a child health 
        plan under title XXI of such Act which the Secretary of Health 
        and Human Services determines requires State legislation (other 
        than legislation appropriating funds) in order for the plan to 
        meet the additional requirement imposed by the amendments made 
        by this section, the State plan or child health plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATION RELATING TO 
              CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    (a) State Plan Requirement.--Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703, and 
1753, is further amended--
            (1) in paragraph (75), by striking at the end ``and'';
            (2) in paragraph (76), by striking at the end the period 
        and inserting ``; and''; and
            (3) by inserting after paragraph (76) the following new 
        paragraph:
            ``(77) provide that the State agency described in paragraph 
        (9) exclude, with respect to a period, any individual or entity 
        from participation in the program under the State plan if such 
        individual or entity owns, controls, or manages an entity that 
        (or if such entity is owned, controlled, or managed by an 
        individual or entity that)--
                    ``(A) has unpaid overpayments under this title 
                during such period determined by the Secretary or the 
                State agency to be delinquent;
                    ``(B) is suspended or excluded from participation 
                under or whose participation is terminated under this 
                title during such period; or
                    ``(C) is affiliated with an individual or entity 
                that has been suspended or excluded from participation 
                under this title or whose participation is terminated 
                under this title during such period.''.
    (b) Child Health Plan Requirement.--Section 2107(e)(1)(A) of such 
Act (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is 
amended by striking ``section 1902(a)(39)'' and inserting ``sections 
1902(a)(39) and 1902(a)(77)''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after January 1, 2011, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act or a child health 
        plan under title XXI of such Act which the Secretary of Health 
        and Human Services determines requires State legislation (other 
        than legislation appropriating funds) in order for the plan to 
        meet the additional requirement imposed by the amendments made 
        by this section, the State plan or child health plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
              MMIS TO DETECT FRAUD AND ABUSE.

    Section 1903(r)(1)(F) of the Social Security Act (42 U.S.C. 
1396b(r)(1)(F)) is amended by inserting after ``necessary'' the 
following: ``and including, for data submitted to the Secretary on or 
after July 1, 2010, data elements from the automated data system that 
the Secretary determines to be necessary for detection of waste, fraud, 
and abuse''.

SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703, 1753, 
and 1757, is further amended--
            (1) in paragraph (76); by striking at the end ``and'';
            (2) in paragraph (77), by striking the period at the end 
        and inserting ``and''; and
            (3) by inserting after paragraph (77) the following new 
        paragraph:
            ``(78) provide that any agent, clearinghouse, or other 
        alternate payee that submits claims on behalf of a health care 
        provider must register with the State and the Secretary in a 
        form and manner specified by the Secretary under section 
        1866(j)(1)(D).''.
    (b) Denial of Payment.--Section 1903(i) of such Act (42 U.S.C. 
1396b(i)), as amended by section 1753, is amended--
            (1) by striking ``or'' at the end of paragraph (24);
            (2) by striking the period at the end of paragraph (25) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (25) the following new 
        paragraph:
            ``(26) with respect to any amount paid to a billing agent, 
        clearinghouse, or other alternate payee that is not registered 
        with the State and the Secretary as required under section 
        1902(a)(78).''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to claims submitted on or 
        after January 1, 2012, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirement imposed 
        by the amendments made by this section, the State plan or child 
        health plan shall not be regarded as failing to comply with the 
        requirements of such title solely on the basis of its failure 
        to meet this additional requirement before the first day of the 
        first calendar quarter beginning after the close of the first 
        regular session of the State legislature that begins after the 
        date of the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RELATED MISCONDUCT.

    (a) In General.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)), as previously amended is amended--
            (1) by striking ``or'' at the end of paragraph (25);
            (2) by striking the period at the end of paragraph (26) and 
        inserting a semicolon; and
            (3) by inserting after paragraph (26) the following new 
        paragraphs:
            ``(27) with respect to any amount expended--
                    ``(A) on litigation in which a court imposes 
                sanctions on the State, its employees, or its counsel 
                for litigation-related misconduct; or
                    ``(B) to reimburse (or otherwise compensate) a 
                managed care entity for payment of legal expenses 
                associated with any action in which a court imposes 
                sanctions on the managed care entity for litigation-
                related misconduct.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts expended on or after January 1, 2010.

              Subtitle G--Puerto Rico and the Territories

SEC. 1771. PUERTO RICO AND TERRITORIES.

    (a) Increase in Cap.--
            (1) In general.--Section 1108(g) of the Social Security Act 
        (42 U.S.C. 1308(g)) is amended--
                    (A) in paragraph (4) by striking ``and (3)'' and by 
                inserting ``(3), (6), and (7)''; and
                    (B) by inserting after paragraph (5), as added by 
                section 1731(d), the following new paragraph:
            ``(6) Fiscal years 2011 through 2019.--The amounts 
        otherwise determined under this subsection for Puerto Rico, the 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa for fiscal year 2011 and each succeeding fiscal 
        year through fiscal year 2019 shall be increased by the 
        percentage specified under section 1771(c) of the America's 
        Affordable Health Choices Act of 2009 for purposes of this 
        paragraph of the amounts otherwise determined under this 
        section (without regard to this paragraph).
            ``(7) Fiscal year 2020 and subsequent fiscal years.--The 
        amounts otherwise determined under this subsection for Puerto 
        Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
        and American Samoa for fiscal year 2020 and each succeeding 
        fiscal year shall be the amount provided in paragraph (6) or 
        this paragraph for the preceding fiscal year for the respective 
        territory increased by the percentage increase referred to in 
        paragraph (1)(B), rounded to the nearest $10,000 (or $100,000 
        in the case of Puerto Rico).''.
            (2) Coordination with arra.--Section 5001(d) of the 
        American Recovery and Reinvestment Act of 2009 shall not apply 
        during any period for which section 1108(g)(6) of the Social 
        Security Act, as added by paragraph (1), applies.
    (b) Increase in FMAP.--
            (1) In general.--Section 1905(b)(2) of the Social Security 
        Act (42 U.S.C. 1396d(b)(2)) is amended by striking ``50 per 
        centum'' and inserting ``for fiscal years 2011 through 2019, 
        the percentage specified under section 1771(c) of the America's 
        Affordable Health Choices Act of 2009 for purposes of this 
        clause for such fiscal year and for subsequent fiscal years the 
        percentage so specified for fiscal year 2019''.
            (2) Effective date.--The amendment made by subsection (a) 
        shall apply to items and services furnished on or after October 
        1, 2010.
    (c) Specification of Percentages.--The Secretary of Health and 
Human Services shall specify, before January 1, 2011, the percentages 
to be applied under section 1108(g)(6) of the Social Security Act, as 
added by subsection (a)(1), and under section 1905(b)(2) of such Act, 
as amended by subsection (b)(1), in a manner so that for the period 
beginning with 2011 and ending with 2019 the total estimated additional 
Federal expenditures resulting from the application of such percentages 
will be equal to $10,350,000,000.

                       Subtitle H--Miscellaneous

SEC. 1781. TECHNICAL CORRECTIONS.

    (a) Technical Correction to Section 1144 of the Social Security 
Act.--The first sentence of section 1144(c)(3) of the Social Security 
Act (42 U.S.C. 1320b--14(c)(3)) is amended--
            (1) by striking ``transmittal''; and
            (2) by inserting before the period the following: ``as 
        specified in section 1935(a)(4)''.
    (b) Clarifying Amendment to Section 1935 of the Social Security 
Act.--Section 1935(a)(4) of the Social Security Act (42 U.S.C. 1396u--
5(a)(4)), as amended by section 113(b) of Public Law 110-275, is 
amended--
            (1) by striking the second sentence;
            (2) by redesignating the first sentence as a subparagraph 
        (A) with appropriate indentation and with the following 
        heading: ``In general'';
            (3) by adding at the end the following subparagraphs:
                    ``(B) Furnishing medical assistance with reasonable 
                promptness.--For the purpose of a State's obligation 
                under section 1902(a)(8) to furnish medical assistance 
                with reasonable promptness, the date of the electronic 
                transmission of low-income subsidy program data, as 
                described in section 1144(c), from the Commissioner of 
                Social Security to the State Medicaid Agency, shall 
                constitute the date of filing of such application for 
                benefits under the Medicare Savings Program.
                    ``(C) Determining availability of medical 
                assistance.--For the purpose of determining when 
                medical assistance will be made available, the State 
                shall consider the date of the individual's application 
                for the low income subsidy program to constitute the 
                date of filing for benefits under the Medicare Savings 
                Program.''.
    (c) Effective Date Relating to Medicaid Agency Consideration of 
Low-income Subsidy Application and Data Transmittal.--The amendments 
made by subsections (a) and (b) shall be effective as if included in 
the enactment of section 113(b) of Public Law 110-275.
    (d) Technical Correction to Section 605 of CHIPRA.--Section 605 of 
the Children's Health Insurance Program Reauthorization Act of 2009 
(Public Law 111-3) is amended by striking ``legal residents'' and 
inserting ``lawfully residing in the United States''.
    (e) Technical Correction to Section 1905 of the Social Security 
Act.--Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) 
is amended by inserting ``or the care and services themselves, or 
both'' before ``(if provided in or after''.
    (f) Clarifying Amendment to Section 1115 of the Social Security 
Act.--Section 1115(a) of the Social Security Act (42 U.S.C. 1315(a)) is 
amended by adding at the end the following: ``If an experimental, 
pilot, or demonstration project that relates to title XIX is approved 
pursuant to any part of this subsection, such project shall be treated 
as part of the State plan, all medical assistance provided on behalf of 
any individuals affected by such project shall be medical assistance 
provided under the State plan, and all provisions of this Act not 
explicitly waived in approving such project shall remain fully 
applicable to all individuals receiving benefits under the State 
plan.''.

SEC. 1782. EXTENSION OF QI PROGRAM.

    (a) In General.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is amended--
            (1) by striking ``sections 1933 and'' and by inserting 
        ``section''; and
            (2) by striking ``December 2010'' and inserting ``December 
        2012''.
    (b) Elimination of Funding Limitation.--
            (1) In general.--Section 1933 of such Act (42 U.S.C. 1396u-
        3) is amended--
                    (A) in subsection (a), by striking ``who are 
                selected to receive such assistance under subsection 
                (b)'';
                    (B) by striking subsections (b), (c), (e), and (g);
                    (C) in subsection (d), by striking ``furnished in a 
                State'' and all that follows and inserting ``the 
                Federal medical assistance percentage shall be equal to 
                100 percent.''; and
                    (D) by redesignating subsections (d) and (f) as 
                subsections (b) and (c), respectively.
            (2) Conforming amendment.--Section 1905(b) of such Act (42 
        U.S.C. 1396d(b)) is amended by striking ``1933(d)'' and 
        inserting ``1933(b)''.
            (3) Effective date.--The amendments made by paragraph (1) 
        shall take effect on January 1, 2011.

                 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.

    (a) In General.--Paragraph (19) of section 6103(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(19) Disclosures to facilitate identification of 
        individuals likely to be ineligible for low-income subsidies 
        under medicare prescription drug program to assist social 
        security administration's outreach to eligible individuals.--
                    ``(A) In general.--Upon written request from the 
                Commissioner of Social Security, the following return 
                information (including such information disclosed to 
                the Social Security Administration under paragraph (1) 
                or (5)) shall be disclosed to officers and employees of 
                the Social Security Administration, with respect to any 
                taxpayer identified by the Commissioner of Social 
                Security--
                            ``(i) return information for the applicable 
                        year from returns with respect to wages (as 
                        defined in section 3121(a) or 3401(a)) and 
                        payments of retirement income (as described in 
                        paragraph (1) of this subsection),
                            ``(ii) unearned income information and 
                        income information of the taxpayer from 
                        partnerships, trusts, estates, and subchapter S 
                        corporations for the applicable year,
                            ``(iii) if the individual filed an income 
                        tax return for the applicable year, the filing 
                        status, number of dependents, income from 
                        farming, and income from self-employment, on 
                        such return,
                            ``(iv) if the individual is a married 
                        individual filing a separate return for the 
                        applicable year, the social security number (if 
                        reasonably available) of the spouse on such 
                        return,
                            ``(v) if the individual files a joint 
                        return for the applicable year, the social 
                        security number, unearned income information, 
                        and income information from partnerships, 
                        trusts, estates, and subchapter S corporations 
                        of the individual's spouse on such return, and
                            ``(vi) such other return information 
                        relating to the individual (or the individual's 
                        spouse in the case of a joint return) as is 
                        prescribed by the Secretary by regulation as 
                        might indicate that the individual is likely to 
                        be ineligible for a low-income prescription 
                        drug subsidy under section 1860D-14 of the 
                        Social Security Act.
                    ``(B) Applicable year.--For the purposes of this 
                paragraph, the term `applicable year' means the most 
                recent taxable year for which information is available 
                in the Internal Revenue Service's taxpayer information 
                records.
                    ``(C) Restriction on individuals for whom 
                disclosure may be requested.--The Commissioner of 
                Social Security shall request information under this 
                paragraph only with respect to--
                            ``(i) individuals the Social Security 
                        Administration has identified, using all other 
                        reasonably available information, as likely to 
                        be eligible for a low-income prescription drug 
                        subsidy under section 1860D-14 of the Social 
                        Security Act and who have not applied for such 
                        subsidy, and
                            ``(ii) any individual the Social Security 
                        Administration has identified as a spouse of an 
                        individual described in clause (i).
                    ``(D) Restriction on use of disclosed 
                information.--Return information disclosed under this 
                paragraph may be used only by officers and employees of 
                the Social Security Administration solely for purposes 
                of identifying individuals likely to be ineligible for 
                a low-income prescription drug subsidy under section 
                1860D-14 of the Social Security Act for use in outreach 
                efforts under section 1144 of the Social Security 
                Act.''.
    (b) Safeguards.--Paragraph (4) of section 6103(p) of such Code is 
amended--
            (1) by striking ``(19),'' each place it appears, and
            (2) by striking ``or (17)'' each place it appears and 
        inserting ``(17), or (19)''.
    (c) Conforming Amendment.--Paragraph (3) of section 6103(a) of such 
Code is amended by striking ``(19),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date which is 12 months after the 
date of the enactment of this Act.

SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND; FINANCING FOR 
              TRUST FUND.

    (a) Establishment of Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to trust fund code) is amended 
        by adding at the end the following new section:

``SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Health Care 
Comparative Effectiveness Research Trust Fund' (hereinafter in this 
section referred to as the `CERTF'), consisting of such amounts as may 
be appropriated or credited to such Trust Fund as provided in this 
section and section 9602(b).
    ``(b) Transfers to Fund.--There are hereby appropriated to the 
Trust Fund the following:
            ``(1) For fiscal year 2010, $90,000,000.
            ``(2) For fiscal year 2011, $100,000,000.
            ``(3) For fiscal year 2012, $110,000,000.
            ``(4) For each fiscal year beginning with fiscal year 
        2013--
                    ``(A) an amount equivalent to the net revenues 
                received in the Treasury from the fees imposed under 
                subchapter B of chapter 34 (relating to fees on health 
                insurance and self-insured plans) for such fiscal year; 
                and
                    ``(B) subject to subsection (c)(2), amounts 
                determined by the Secretary of Health and Human 
                Services to be equivalent to the fair share per capita 
                amount computed under subsection (c)(1) for the fiscal 
                year multiplied by the average number of individuals 
                entitled to benefits under part A, or enrolled under 
                part B, of title XVIII of the Social Security Act 
                during such fiscal year.
The amounts appropriated under paragraphs (1), (2), (3), and (4)(B) 
shall be transferred from the Federal Hospital Insurance Trust Fund and 
from the Federal Supplementary Medical Insurance Trust Fund 
(established under section 1841 of such Act), and from the Medicare 
Prescription Drug Account within such Trust Fund, in proportion (as 
estimated by the Secretary) to the total expenditures during such 
fiscal year that are made under title XVIII of such Act from the 
respective trust fund or account.
    ``(c) Fair Share Per Capita Amount.--
            ``(1) Computation.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                fair share per capita amount under this paragraph for a 
                fiscal year (beginning with fiscal year 2013) is an 
                amount computed by the Secretary of Health and Human 
                Services for such fiscal year that, when applied under 
                this section and subchapter B of chapter 34 of the 
                Internal Revenue Code of 1986, will result in revenues 
                to the CERTF of $375,000,000 for the fiscal year.
                    ``(B) Alternative computation.--
                            ``(i) In general.--If the Secretary is 
                        unable to compute the fair share per capita 
                        amount under subparagraph (A) for a fiscal 
                        year, the fair share per capita amount under 
                        this paragraph for the fiscal year shall be the 
                        default amount determined under clause (ii) for 
                        the fiscal year.
                            ``(ii) Default amount.--The default amount 
                        under this clause for--
                                    ``(I) fiscal year 2013 is equal to 
                                $2; or
                                    ``(II) a subsequent year is equal 
                                to the default amount under this clause 
                                for the preceding fiscal year increased 
                                by the annual percentage increase in 
                                the medical care component of the 
                                consumer price index (United States 
                                city average) for the 12-month period 
                                ending with April of the preceding 
                                fiscal year.
                        Any amount determined under subclause (II) 
                        shall be rounded to the nearest penny.
            ``(2) Limitation on medicare funding.--In no case shall the 
        amount transferred under subsection (b)(4)(B) for any fiscal 
        year exceed $90,000,000.
    ``(d) Expenditures From Fund.--
            ``(1) In general.--Subject to paragraph (2), amounts in the 
        CERTF are available, without the need for further 
        appropriations and without fiscal year limitation, to the 
        Secretary of Health and Human Services for carrying out section 
        1181 of the Social Security Act.
            ``(2) Allocation for commission.--Not less than the 
        following amounts in the CERTF for a fiscal year shall be 
        available to carry out the activities of the Comparative 
        Effectiveness Research Commission established under section 
        1181(b) of the Social Security Act for such fiscal year:
                    ``(A) For fiscal year 2010, $7,000,000.
                    ``(B) For fiscal year 2011, $9,000,000.
                    ``(C) For each fiscal year beginning with 2012, 
                $10,000,000.
        Nothing in this paragraph shall be construed as preventing 
        additional amounts in the CERTF from being made available to 
        the Comparative Effectiveness Research Commission for such 
        activities.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary based on the 
excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.''.
            (2) Clerical amendment.--The table of sections for such 
        subchapter A is amended by adding at the end thereof the 
        following new item:

``Sec. 9511. Health Care Comparative Effectiveness Research Trust 
                            Fund.''.
    (b) Financing for Fund From Fees on Insured and Self-Insured Health 
Plans.--
            (1) General rule.--Chapter 34 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subchapter:

         ``Subchapter B--Insured and Self-Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Self-insured health plans.
``Sec. 4377. Definitions and special rules.

``SEC. 4375. HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year a fee equal to the fair 
share per capita amount determined under section 9511(c)(1) multiplied 
by the average number of lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall 
be paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section:
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `specified health insurance policy' means any 
        accident or health insurance policy issued with respect to 
        individuals residing in the United States.
            ``(2) Exemption for certain policies.--The term `specified 
        health insurance policy' does not include any insurance if 
        substantially all of its coverage is of excepted benefits 
        described in section 9832(c).
            ``(3) Treatment of prepaid health coverage arrangements.--
                    ``(A) In general.--In the case of any arrangement 
                described in subparagraph (B)--
                            ``(i) such arrangement shall be treated as 
                        a specified health insurance policy, and
                            ``(ii) the person referred to in such 
                        subparagraph shall be treated as the issuer.
                    ``(B) Description of arrangements.--An arrangement 
                is described in this subparagraph if under such 
                arrangement fixed payments or premiums are received as 
                consideration for any person's agreement to provide or 
                arrange for the provision of accident or health 
                coverage to residents of the United States, regardless 
                of how such coverage is provided or arranged to be 
                provided.

``SEC. 4376. SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-
insured health plan for each plan year, there is hereby imposed a fee 
equal to the fair share per capita amount determined under section 
9511(c)(1) multiplied by the average number of lives covered under the 
plan.
    ``(b) Liability for Fee.--
            ``(1) In general.--The fee imposed by subsection (a) shall 
        be paid by the plan sponsor.
            ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
        `plan sponsor' means--
                    ``(A) the employer in the case of a plan 
                established or maintained by a single employer,
                    ``(B) the employee organization in the case of a 
                plan established or maintained by an employee 
                organization,
                    ``(C) in the case of--
                            ``(i) a plan established or maintained by 2 
                        or more employers or jointly by 1 or more 
                        employers and 1 or more employee organizations,
                            ``(ii) a multiple employer welfare 
                        arrangement, or
                            ``(iii) a voluntary employees' beneficiary 
                        association described in section 501(c)(9),
                the association, committee, joint board of trustees, or 
                other similar group of representatives of the parties 
                who establish or maintain the plan, or
                    ``(D) the cooperative or association described in 
                subsection (c)(2)(F) in the case of a plan established 
                or maintained by such a cooperative or association.
    ``(c) Applicable Self-Insured Health Plan.--For purposes of this 
section, the term `applicable self-insured health plan' means any plan 
for providing accident or health coverage if--
            ``(1) any portion of such coverage is provided other than 
        through an insurance policy, and
            ``(2) such plan is established or maintained--
                    ``(A) by one or more employers for the benefit of 
                their employees or former employees,
                    ``(B) by one or more employee organizations for the 
                benefit of their members or former members,
                    ``(C) jointly by 1 or more employers and 1 or more 
                employee organizations for the benefit of employees or 
                former employees,
                    ``(D) by a voluntary employees' beneficiary 
                association described in section 501(c)(9),
                    ``(E) by any organization described in section 
                501(c)(6), or
                    ``(F) in the case of a plan not described in the 
                preceding subparagraphs, by a multiple employer welfare 
                arrangement (as defined in section 3(40) of Employee 
                Retirement Income Security Act of 1974), a rural 
                electric cooperative (as defined in section 
                3(40)(B)(iv) of such Act), or a rural telephone 
                cooperative association (as defined in section 
                3(40)(B)(v) of such Act).

``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Accident and health coverage.--The term `accident and 
        health coverage' means any coverage which, if provided by an 
        insurance policy, would cause such policy to be a specified 
        health insurance policy (as defined in section 4375(c)).
            ``(2) Insurance policy.--The term `insurance policy' means 
        any policy or other instrument whereby a contract of insurance 
        is issued, renewed, or extended.
            ``(3) United states.--The term `United States' includes any 
        possession of the United States.
    ``(b) Treatment of Governmental Entities.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) the term `person' includes any governmental 
                entity, and
                    ``(B) notwithstanding any other law or rule of law, 
                governmental entities shall not be exempt from the fees 
                imposed by this subchapter except as provided in 
                paragraph (2).
            ``(2) Treatment of exempt governmental programs.--In the 
        case of an exempt governmental program, no fee shall be imposed 
        under section 4375 or section 4376 on any covered life under 
        such program.
            ``(3) Exempt governmental program defined.--For purposes of 
        this subchapter, the term `exempt governmental program' means--
                    ``(A) any insurance program established under title 
                XVIII of the Social Security Act,
                    ``(B) the medical assistance program established by 
                title XIX or XXI of the Social Security Act,
                    ``(C) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to individuals (or the spouses and dependents 
                thereof) by reason of such individuals being--
                            ``(i) members of the Armed Forces of the 
                        United States, or
                            ``(ii) veterans, and
                    ``(D) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to members of Indian tribes (as defined in 
                section 4(d) of the Indian Health Care Improvement 
                Act).
    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''.
            (2) Clerical amendments.--
                    (A) Chapter 34 of such Code is amended by striking 
                the chapter heading and inserting the following:

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

         ``subchapter b. insured and self-insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

                    (B) The table of chapters for subtitle D of such 
                Code is amended by striking the item relating to 
                chapter 34 and inserting the following new item:

          ``Chapter 34--Taxes on Certain Insurance Policies''.

            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to policies and plans for portions of 
        policy or plan years beginning on or after October 1, 2012.

                   TITLE IX--MISCELLANEOUS PROVISIONS

SEC. 1901. REPEAL OF TRIGGER PROVISION.

    Subtitle A of title VIII of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173) is 
repealed and the provisions of law amended by such subtitle are 
restored as if such subtitle had never been enacted.

SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM.

    Section 1860C-1 of the Social Security Act (42 U.S.C. 1395w-29), as 
added by section 241(a) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (Public Law 108-173), is repealed.

SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109-171) is amended by inserting 
``(or September 30, 2011, in the case of a demonstration project in 
operation as of October 1, 2008)'' after ``December 31, 2009''.
    (b) Funding.--
            (1) In general.--Subsection (f)(1) of such section is 
        amended by inserting ``and for fiscal year 2010, $1,600,000,'' 
        after ``$6,000,000,''.
            (2) Availability.--Subsection (f)(2) of such section is 
        amended by striking ``2010'' and inserting ``2014 or until 
        expended''.
    (c) Reports.--
            (1) Quality improvement and savings.--Subsection (e)(3) of 
        such section is amended by striking ``December 1, 2008'' and 
        inserting ``March 31, 2011''.
            (2) Final report.--Subsection (e)(4) of such section is 
        amended by striking ``May 1, 2010'' and inserting ``March 31, 
        2013''.

SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITATION PROGRAMS FOR 
              FAMILIES WITH YOUNG CHILDREN AND FAMILIES EXPECTING 
              CHILDREN.

    Part B of title IV of the Social Security Act (42 U.S.C. 621-629i) 
is amended by adding at the end the following:

       ``Subpart 3--Support for Quality Home Visitation Programs

``SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES WITH YOUNG CHILDREN 
              AND FAMILIES EXPECTING CHILDREN.

    ``(a) Purpose.--The purpose of this section is to improve the well-
being, health, and development of children by enabling the 
establishment and expansion of high quality programs providing 
voluntary home visitation for families with young children and families 
expecting children.
    ``(b) Grant Application.--A State that desires to receive a grant 
under this section shall submit to the Secretary for approval, at such 
time and in such manner as the Secretary may require, an application 
for the grant that includes the following:
            ``(1) Description of home visitation programs.--A 
        description of the high quality programs of home visitation for 
        families with young children and families expecting children 
        that will be supported by a grant made to the State under this 
        section, the outcomes the programs are intended to achieve, and 
        the evidence supporting the effectiveness of the programs.
            ``(2) Results of needs assessment.--The results of a 
        statewide needs assessment that describes--
                    ``(A) the number, quality, and capacity of home 
                visitation programs for families with young children 
                and families expecting children in the State;
                    ``(B) the number and types of families who are 
                receiving services under the programs;
                    ``(C) the sources and amount of funding provided to 
                the programs;
                    ``(D) the gaps in home visitation in the State, 
                including identification of communities that are in 
                high need of the services; and
                    ``(E) training and technical assistance activities 
                designed to achieve or support the goals of the 
                programs.
            ``(3) Assurances.--Assurances from the State that--
                    ``(A) in supporting home visitation programs using 
                funds provided under this section, the State shall 
                identify and prioritize serving communities that are in 
                high need of such services, especially communities with 
                a high proportion of low-income families or a high 
                incidence of child maltreatment;
                    ``(B) the State will reserve 5 percent of the grant 
                funds for training and technical assistance to the home 
                visitation programs using such funds;
                    ``(C) in supporting home visitation programs using 
                funds provided under this section, the State will 
                promote coordination and collaboration with other home 
                visitation programs (including programs funded under 
                title XIX) and with other child and family services, 
                health services, income supports, and other related 
                assistance;
                    ``(D) home visitation programs supported using such 
                funds will, when appropriate, provide referrals to 
                other programs serving children and families; and
                    ``(E) the State will comply with subsection (i), 
                and cooperate with any evaluation conducted under 
                subsection (j).
            ``(4) Other information.--Such other information as the 
        Secretary may require.
    ``(c) Allotments.--
            ``(1) Indian tribes.--From the amount reserved under 
        subsection (l)(2) for a fiscal year, the Secretary shall allot 
        to each Indian tribe that meets the requirement of subsection 
        (d), if applicable, for the fiscal year the amount that bears 
        the same ratio to the amount so reserved as the number of 
        children in the Indian tribe whose families have income that 
        does not exceed 200 percent of the poverty line bears to the 
        total number of children in such Indian tribes whose families 
        have income that does not exceed 200 percent of the poverty 
        line.
            ``(2) States and territories.--From the amount appropriated 
        under subsection (m) for a fiscal year that remains after 
        making the reservations required by subsection (l), the 
        Secretary shall allot to each State that is not an Indian tribe 
        and that meets the requirement of subsection (d), if 
        applicable, for the fiscal year the amount that bears the same 
        ratio to the remainder of the amount so appropriated as the 
        number of children in the State whose families have income that 
        does not exceed 200 percent of the poverty line bears to the 
        total number of children in such States whose families have 
        income that does not exceed 200 percent of the poverty line.
            ``(3) Reallotments.--The amount of any allotment to a State 
        under a paragraph of this subsection for any fiscal year that 
        the State certifies to the Secretary will not be expended by 
        the State pursuant to this section shall be available for 
        reallotment using the allotment methodology specified in that 
        paragraph. Any amount so reallotted to a State is deemed part 
        of the allotment of the State under this subsection.
    ``(d) Maintenance of Effort.--Beginning with fiscal year 2011, a 
State meets the requirement of this subsection for a fiscal year if the 
Secretary finds that the aggregate expenditures by the State from State 
and local sources for programs of home visitation for families with 
young children and families expecting children for the then preceding 
fiscal year was not less than 100 percent of such aggregate 
expenditures for the then 2nd preceding fiscal year.
    ``(e) Payment of Grant.--
            ``(1) In general.--The Secretary shall make a grant to each 
        State that meets the requirements of subsections (b) and (d), 
        if applicable, for a fiscal year for which funds are 
        appropriated under subsection (m), in an amount equal to the 
        reimbursable percentage of the eligible expenditures of the 
        State for the fiscal year, but not more than the amount 
        allotted to the State under subsection (c) for the fiscal year.
            ``(2) Reimbursable percentage defined.--In paragraph (1), 
        the term `reimbursable percentage' means, with respect to a 
        fiscal year--
                    ``(A) 85 percent, in the case of fiscal year 2010;
                    ``(B) 80 percent, in the case of fiscal year 2011; 
                or
                    ``(C) 75 percent, in the case of fiscal year 2012 
                and any succeeding fiscal year.
    ``(f) Eligible Expenditures.--
            ``(1) In general.--In this section, the term `eligible 
        expenditures'--
                    ``(A) means expenditures to provide voluntary home 
                visitation for as many families with young children 
                (under the age of school entry) and families expecting 
                children as practicable, through the implementation or 
                expansion of high quality home visitation programs 
                that--
                            ``(i) adhere to clear evidence-based models 
                        of home visitation that have demonstrated 
                        positive effects on important program-
                        determined child and parenting outcomes, such 
                        as reducing abuse and neglect and improving 
                        child health and development;
                            ``(ii) employ well-trained and competent 
                        staff, maintain high quality supervision, 
                        provide for ongoing training and professional 
                        development, and show strong organizational 
                        capacity to implement such a program;
                            ``(iii) establish appropriate linkages and 
                        referrals to other community resources and 
                        supports;
                            ``(iv) monitor fidelity of program 
                        implementation to ensure that services are 
                        delivered according to the specified model; and
                            ``(v) provide parents with--
                                    ``(I) knowledge of age-appropriate 
                                child development in cognitive, 
                                language, social, emotional, and motor 
                                domains (including knowledge of second 
                                language acquisition, in the case of 
                                English language learners);
                                    ``(II) knowledge of realistic 
                                expectations of age-appropriate child 
                                behaviors;
                                    ``(III) knowledge of health and 
                                wellness issues for children and 
                                parents;
                                    ``(IV) modeling, consulting, and 
                                coaching on parenting practices;
                                    ``(V) skills to interact with their 
                                child to enhance age-appropriate 
                                development;
                                    ``(VI) skills to recognize and seek 
                                help for issues related to health, 
                                developmental delays, and social, 
                                emotional, and behavioral skills; and
                                    ``(VII) activities designed to help 
                                parents become full partners in the 
                                education of their children;
                    ``(B) includes expenditures for training, technical 
                assistance, and evaluations related to the programs; 
                and
                    ``(C) does not include any expenditure with respect 
                to which a State has submitted a claim for payment 
                under any other provision of Federal law.
            ``(2) Priority funding for programs with strongest 
        evidence.--
                    ``(A) In general.--The expenditures, described in 
                paragraph (1), of a State for a fiscal year that are 
                attributable to the cost of programs that do not adhere 
                to a model of home visitation with the strongest 
                evidence of effectiveness shall not be considered 
                eligible expenditures for the fiscal year to the extent 
                that the total of the expenditures exceeds the 
                applicable percentage for the fiscal year of the 
                allotment of the State under subsection (c) for the 
                fiscal year.
                    ``(B) Applicable percentage defined.--In 
                subparagraph (A), the term `applicable percentage' 
                means, with respect to a fiscal year--
                            ``(i) 60 percent for fiscal year 2010;
                            ``(ii) 55 percent for fiscal year 2011;
                            ``(iii) 50 percent for fiscal year 2012;
                            ``(iv) 45 percent for fiscal year 2013; or
                            ``(v) 40 percent for fiscal year 2014.
    ``(g) No Use of Other Federal Funds for State Match.--A State to 
which a grant is made under this section may not expend any Federal 
funds to meet the State share of the cost of an eligible expenditure 
for which the State receives a payment under this section.
    ``(h) Waiver Authority.--
            ``(1) In general.--The Secretary may waive or modify the 
        application of any provision of this section, other than 
        subsection (b) or (f), to an Indian tribe if the failure to do 
        so would impose an undue burden on the Indian tribe.
            ``(2) Special rule.--An Indian tribe is deemed to meet the 
        requirement of subsection (d) for purposes of subsections (c) 
        and (e) if--
                    ``(A) the Secretary waives the requirement; or
                    ``(B) the Secretary modifies the requirement, and 
                the Indian tribe meets the modified requirement.
    ``(i) State Reports.--Each State to which a grant is made under 
this section shall submit to the Secretary an annual report on the 
progress made by the State in addressing the purposes of this section. 
Each such report shall include a description of--
            ``(1) the services delivered by the programs that received 
        funds from the grant;
            ``(2) the characteristics of each such program, including 
        information on the service model used by the program and the 
        performance of the program;
            ``(3) the characteristics of the providers of services 
        through the program, including staff qualifications, work 
        experience, and demographic characteristics;
            ``(4) the characteristics of the recipients of services 
        provided through the program, including the number of the 
        recipients, the demographic characteristics of the recipients, 
        and family retention;
            ``(5) the annual cost of implementing the program, 
        including the cost per family served under the program;
            ``(6) the outcomes experienced by recipients of services 
        through the program;
            ``(7) the training and technical assistance provided to aid 
        implementation of the program, and how the training and 
        technical assistance contributed to the outcomes achieved 
        through the program;
            ``(8) the indicators and methods used to monitor whether 
        the program is being implemented as designed; and
            ``(9) other information as determined necessary by the 
        Secretary.
    ``(j) Evaluation.--
            ``(1) In general.--The Secretary shall, by grant or 
        contract, provide for the conduct of an independent evaluation 
        of the effectiveness of home visitation programs receiving 
        funds provided under this section, which shall examine the 
        following:
                    ``(A) The effect of home visitation programs on 
                child and parent outcomes, including child 
                maltreatment, child health and development, school 
                readiness, and links to community services.
                    ``(B) The effectiveness of home visitation programs 
                on different populations, including the extent to which 
                the ability of programs to improve outcomes varies 
                across programs and populations.
            ``(2) Reports to the congress.--
                    ``(A) Interim report.--Within 3 years after the 
                date of the enactment of this section, the Secretary 
                shall submit to the Congress an interim report on the 
                evaluation conducted pursuant to paragraph (1).
                    ``(B) Final report.--Within 5 years after the date 
                of the enactment of this section, the Secretary shall 
                submit to the Congress a final report on the evaluation 
                conducted pursuant to paragraph (1).
    ``(k) Annual Reports to the Congress.--The Secretary shall submit 
annually to the Congress a report on the activities carried out using 
funds made available under this section, which shall include a 
description of the following:
            ``(1) The high need communities targeted by States for 
        programs carried out under this section.
            ``(2) The service delivery models used in the programs 
        receiving funds provided under this section.
            ``(3) The characteristics of the programs, including--
                    ``(A) the qualifications and demographic 
                characteristics of program staff; and
                    ``(B) recipient characteristics including the 
                number of families served, the demographic 
                characteristics of the families served, and family 
                retention and duration of services.
            ``(4) The outcomes reported by the programs.
            ``(5) The research-based instruction, materials, and 
        activities being used in the activities funded under the grant.
            ``(6) The training and technical activities, including on-
        going professional development, provided to the programs.
            ``(7) The annual costs of implementing the programs, 
        including the cost per family served under the programs.
            ``(8) The indicators and methods used by States to monitor 
        whether the programs are being been implemented as designed.
    ``(l) Reservations of Funds.--From the amounts appropriated for a 
fiscal year under subsection (m), the Secretary shall reserve--
            ``(1) an amount equal to 5 percent of the amounts to pay 
        the cost of the evaluation provided for in subsection (j), and 
        the provision to States of training and technical assistance, 
        including the dissemination of best practices in early 
        childhood home visitation; and
            ``(2) after making the reservation required by paragraph 
        (1), an amount equal to 3 percent of the amount so 
        appropriated, to pay for grants to Indian tribes under this 
        section.
    ``(m) Appropriations.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there is appropriated to the 
Secretary to carry out this section--
            ``(1) $50,000,000 for fiscal year 2010;
            ``(2) $100,000,000 for fiscal year 2011;
            ``(3) $150,000,000 for fiscal year 2012;
            ``(4) $200,000,000 for fiscal year 2013; and
            ``(5) $250,000,000 for fiscal year 2014.
    ``(n) Indian Tribes Treated as States.--In this section, paragraphs 
(4), (5), and (6) of section 431(a) shall apply.''.

SEC. 1905. IMPROVED COORDINATION AND PROTECTION FOR DUAL ELIGIBLES.

    Title XI of the Social Security Act is amended by inserting after 
section 1150 the following new section:

       ``improved coordination and protection for dual eligibles

    ``Sec. 1150A.  (a) In General.--The Secretary shall provide, 
through an identifiable office or program within the Centers for 
Medicare & Medicaid Services, for a focused effort to provide for 
improved coordination between Medicare and Medicaid and protection in 
the case of dual eligibles (as defined in subsection (e)). The office 
or program shall--
            ``(1) review Medicare and Medicaid policies related to 
        enrollment, benefits, service delivery, payment, and grievance 
        and appeals processes under parts A and B of title XVIII, under 
        the Medicare Advantage program under part C of such title, and 
        under title XIX;
            ``(2) identify areas of such policies where better 
        coordination and protection could improve care and costs; and
            ``(3) issue guidance to States regarding improving such 
        coordination and protection.
    ``(b) Elements.--The improved coordination and protection under 
this section shall include efforts--
            ``(1) to simplify access of dual eligibles to benefits and 
        services under Medicare and Medicaid;
            ``(2) to improve care continuity for dual eligibles and 
        ensure safe and effective care transitions;
            ``(3) to harmonize regulatory conflicts between Medicare 
        and Medicaid rules with regard to dual eligibles; and
            ``(4) to improve total cost and quality performance under 
        Medicare and Medicaid for dual eligibles.
    ``(c) Responsibilities.--In carrying out this section, the 
Secretary shall provide for the following:
            ``(1) An examination of Medicare and Medicaid payment 
        systems to develop strategies to foster more integrated and 
        higher quality care.
            ``(2) Development of methods to facilitate access to post-
        acute and community-based services and to identify actions that 
        could lead to better coordination of community-based care.
            ``(3) A study of enrollment of dual eligibles in the 
        Medicare Savings Program (as defined in section 1144(c)(7)), 
        under Medicaid, and in the low-income subsidy program under 
        section 1860D-14 to identify methods to more efficiently and 
        effectively reach and enroll dual eligibles.
            ``(4) An assessment of communication strategies for dual 
        eligibles to determine whether additional informational 
        materials or outreach is needed, including an assessment of the 
        Medicare website, 1-800-MEDICARE, and the Medicare handbook.
            ``(5) Research and evaluation of areas where service 
        utilization, quality, and access to cost sharing protection 
        could be improved and an assessment of factors related to 
        enrollee satisfaction with services and care delivery.
            ``(6) Collection (and making available to the public) of 
        data and a database that describe the eligibility, benefit and 
        cost-sharing assistance available to dual eligibles by State.
            ``(7) Monitoring total combined Medicare and Medicaid 
        program costs in serving dual eligibles and making 
        recommendations for optimizing total quality and cost 
        performance across both programs.
            ``(8) Coordination of activities relating to Medicare 
        Advantage plans under 1859(b)(6)(B)(ii) and Medicaid.
    ``(d) Periodic Reports.--Not later than 1 year after the date of 
the enactment of this section and every 3 years thereafter the 
Secretary shall submit to Congress a report on progress in activities 
conducted under this section.
    ``(e) Definitions.--In this section:
            ``(1) Dual eligible.--The term `dual eligible' means an 
        individual who is dually eligible for benefits under title 
        XVIII, and medical assistance under title XIX, including such 
        individuals who are eligible for benefits under the Medicare 
        Savings Program (as defined in section 1144(c)(7)).
            ``(2) Medicare; medicaid.--The terms `Medicare' and 
        `Medicaid' mean the programs under titles XVIII and XIX, 
        respectively.''.

SEC. 1906. ASSESSMENT OF MEDICARE COST-INTENSIVE DISEASES AND 
              CONDITIONS.

    (a) Initial Assessment.--
            (1) In general.--The Administrator of the Centers for 
        Medicare & Medicaid Services shall conduct an assessment of the 
        diseases and conditions that are the most cost-intensive for 
        the Medicare program. The assessment shall inform research 
        priorities within the Department of Health and Human Services 
        in order improve the prevention, or treatment or cure, of such 
        diseases and conditions.
            (2) Report.-- Not later than January 1, 2011, the 
        Administrator shall submit to the Secretary of Health and Human 
        Services a report on such assessment and the Secretary shall 
        transmit such report to the Congress.
    (b) Updates of Assessment.--Not later than January 1, 2013, and 
biennially thereafter, the Administrator of the Centers for Medicare & 
Medicaid Services shall review and update the assessment described in 
subsection (a) and make such recommendations to the Secretary on 
changes in research priorities referred to in such subsection as may be 
appropriate. The Secretary shall submit to the Congress a report on 
such recommendations.
    (c) Medicare Cost-Intensive Research Fund.--There is established in 
the Treasury of the United States a Fund to be known as the Medicare 
Cost-Intensive Research Fund (in this subsection referred to as the 
``Fund''), consisting of such amounts as may be appropriated or 
credited to such Fund for research priorities identified as a result of 
the assessments conducted under this section.

         SUBDIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

SEC. 2001. TABLE OF CONTENTS; REFERENCES.

    (a) Table of Contents.--The table of contents of 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.
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

        ``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.
    (b) References.--Except as otherwise specified, whenever in this 
subdivision an amendment is expressed in terms of an amendment to a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of the Public Health Service Act 
(42 U.S.C. 201 et seq.).

SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

    (a) Establishment of Funds.--
            (1) In general.--There is established a fund to be known as 
        the ``Public Health Investment Fund'' (referred to in this 
        section as the ``Fund'').
            (2) Funding.--
                    (A) There shall be deposited into the Fund--
                            (i) for fiscal year 2010, $4,600,000,000;
                            (ii) for fiscal year 2011, $5,600,000,000;
                            (iii) for fiscal year 2012, $6,900,000,000;
                            (iv) for fiscal year 2013, $7,800,000,000;
                            (v) for fiscal year 2014, $9,000,000,000;
                            (vi) for fiscal year 2015, $9,400,000,000;
                            (vii) for fiscal year 2016, 
                        $10,100,000,000;
                            (viii) for fiscal year 2017, 
                        $10,800,000,000;
                            (ix) for fiscal year 2018, $11,800,000,000; 
                        and
                            (x) for fiscal year 2019, $12,700,000,000.
                    (B) Amounts deposited into the Fund shall be 
                derived from general revenues of the Treasury.
    (b) Authorization of Appropriations From the Fund.--
            (1) New funding.--
                    (A) In general.--Amounts in the Fund are authorized 
                to be appropriated by the Committees on Appropriations 
                of the House of Representatives and the Senate for 
                carrying out activities under designated public health 
                provisions.
                    (B) Designated provisions.--For purposes of this 
                paragraph, the term ``designated public health 
                provisions'' means the provisions for which amounts are 
                authorized to be appropriated under section 330(s), 
                338(c), 338H-1, 799C, 872, or 3111 of the Public Health 
                Service Act, as added by this subdivision.
            (2) Baseline funding.--
                    (A) In general.--Amounts in the Fund are authorized 
                to be appropriated (as described in paragraph (1)) for 
                a fiscal year only if (excluding any amounts in or 
                appropriated from the Fund)--
                            (i) the amounts specified in subparagraph 
                        (B) for the fiscal year involved are equal to 
                        or greater than the amounts specified in 
                        subparagraph (B) for fiscal year 2008; and
                            (ii) the amounts appropriated, out of the 
                        general fund of the Treasury, to the Prevention 
                        and Wellness Trust under section 3111 of the 
                        Public Health Service Act, as added by this 
                        subdivision, for the fiscal year involved are 
                        equal to or greater than the funds--
                                    (I) appropriated under the heading 
                                ``Prevention and Wellness Fund'' in 
                                title VIII of division A of the 
                                American Recovery and Reinvestment Act 
                                of 2009 (Public Law 111-5); and
                                    (II) allocated by the second 
                                proviso under such heading for 
                                evidence-based clinical and community-
                                based prevention and wellness 
                                strategies.
                    (B) Amounts specified.--The amounts specified in 
                this subparagraph, with respect to a fiscal year, are 
                the amounts appropriated for the following:
                            (i) Community health centers (including 
                        funds appropriated under the authority of 
                        section 330 of the Public Health Service Act 
                        (42 U.S.C. 254b)).
                            (ii) The National Health Service Corps 
                        Program (including funds appropriated under the 
                        authority of section 338 of such Act (42 U.S.C. 
                        254k)).
                            (iii) The National Health Service Corps 
                        Scholarship and Loan Repayment Programs 
                        (including funds appropriated under the 
                        authority of section 338H of such Act (42 
                        U.S.C. 254q)).
                            (iv) Primary care loan funds (including 
                        funds appropriated for schools of medicine or 
                        osteopathic medicine under the authority of 
                        section 735(f) of such Act (42 U.S.C. 
                        292y(f))).
                            (v) Primary care education programs 
                        (including funds appropriated under the 
                        authority of sections 736, 740, 741, and 747 of 
                        such Act (42 U.S.C. 293, 293d, and 293k)).
                            (vi) Sections 761 and 770 of such Act (42 
                        U.S.C. 294n and 295e).
                            (vii) Nursing workforce development 
                        (including funds appropriated under the 
                        authority of title VIII of such Act (42 U.S.C. 
                        296 et seq.)).
                            (viii) The National Center for Health 
                        Statistics (including funds appropriated under 
                        the authority of sections 304, 306, 307, and 
                        308 of such Act (42 U.S.C. 242b, 242k, 242l, 
                        and 242m)).
                            (ix) The Agency for Healthcare Research and 
                        Quality (including funds appropriated under the 
                        authority of title IX of such Act (42 U.S.C. 
                        299 et seq.)).
            (3) Budgetary implications.--Amounts appropriated under 
        this section, and outlays flowing from such appropriations, 
        shall not be taken into account for purposes of any budget 
        enforcement procedures including allocations under section 
        302(a) and (b) of the Balanced Budget and Emergency Deficit 
        Control Act and budget resolutions for fiscal years during 
        which appropriations are made from the Fund.

                   TITLE I--COMMUNITY HEALTH CENTERS

SEC. 2101. INCREASED FUNDING.

    Section 330 of the Public Health Service Act (42 U.S.C. 254b) is 
amended--
            (1) in subsection (r)(1)--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting at the end the following:
                    ``(F) Such sums as may be necessary for each of 
                fiscal years 2013 and 2019.''; and
            (2) by inserting after subsection (r) the following:
    ``(s) Additional Funding.--For the purpose of carrying out this 
section, in addition to any other amounts authorized to be appropriated 
for such purpose, there are authorized to be appropriated, out of any 
monies in the Public Health Investment Fund, the following:
            ``(1) For fiscal year 2010, $1,000,000,000.
            ``(2) For fiscal year 2011, $1,500,000,000.
            ``(3) For fiscal year 2012, $2,500,000,000.
            ``(4) For fiscal year 2013, $3,000,000,000.
            ``(5) For fiscal year 2014, $4,000,000,000.
            ``(6) For fiscal year 2015, $4,400,000,000.
            ``(7) For fiscal year 2016, $4,800,000,000.
            ``(8) For fiscal year 2017, $5,300,000,000.
            ``(9) For fiscal year 2018, $5,900,000,000.
            ``(10) For fiscal year 2019, $6,400,000,000.''.

                          TITLE II--WORKFORCE

                   Subtitle A--Primary Care Workforce

                 PART 1--NATIONAL HEALTH SERVICE CORPS

SEC. 2201. NATIONAL HEALTH SERVICE CORPS.

    (a) Fulfillment of Obligated Service Requirement Through Half-Time 
Service.--
            (1) Waivers.--Subsection (i) of section 331 (42 U.S.C. 
        254d) is amended--
                    (A) in paragraph (1), by striking ``In carrying out 
                subpart III'' and all that follows through the period 
                and inserting ``In carrying out subpart III, the 
                Secretary may, in accordance with this subsection, 
                issue waivers to individuals who have entered into a 
                contract for obligated service under the Scholarship 
                Program or the Loan Repayment Program under which the 
                individuals are authorized to satisfy the requirement 
                of obligated service through providing clinical 
                practice that is half-time.'';
                    (B) in paragraph (2)--
                            (i) in subparagraphs (A)(ii) and (B), by 
                        striking ``less than full time'' each place it 
                        appears and inserting ``half time'';
                            (ii) in subparagraphs (C) and (F), by 
                        striking ``less than full-time service'' each 
                        place it appears and inserting ``half-time 
                        service''; and
                            (iii) by amending subparagraphs (D) and (E) 
                        to read as follows:
            ``(D) the entity and the Corps member agree in writing that 
        the Corps member will perform half-time clinical practice;
            ``(E) the Corps member agrees in writing to fulfill all of 
        the service obligations under section 338C through half-time 
        clinical practice and either--
                    ``(i) double the period of obligated service; or
                    ``(ii) in the case of contracts entered into under 
                section 338B, accept a minimum service obligation of 2 
                years with an award amount equal to 50 percent of the 
                amount that would otherwise be payable for full-time 
                service; and''; and
                    (C) in paragraph (3), by striking ``In evaluating a 
                demonstration project described in paragraph (1)'' and 
                inserting ``In evaluating waivers issued under 
                paragraph (1)''.
            (2) Definitions.--Subsection (j) of section 331 (42 U.S.C. 
        254d) is amended by adding at the end the following:
            ``(5) The terms `full time' and `full-time' mean a minimum 
        of 40 hours per week in a clinical practice, for a minimum of 
        45 weeks per year.
            ``(6) The terms `half time' and `half-time' mean a minimum 
        of 20 hours per week (not to exceed 39 hours per week) in a 
        clinical practice, for a minimum of 45 weeks per year.''.
    (b) Reappointment to National Advisory Council.--Section 337(b)(1) 
(42 U.S.C. 254j(b)(1)) is amended by striking ``Members may not be 
reappointed to the Council.''.
    (c) Loan Repayment Amount.--Section 338B(g)(2)(A) is amended (42 
U.S.C. 254l-1(g)(2)(A)) by striking ``$35,000'' and inserting 
``$50,000, plus, beginning with fiscal year 2012, an amount determined 
by the Secretary on an annual basis to reflect inflation,''.
    (d) Treatment of Teaching as Obligated Service.--Subsection (a) of 
section 338C (42 U.S.C. 254m) is amended by adding at the end the 
following: ``The Secretary may treat teaching as clinical practice for 
up to 20 percent of such period of obligated service.''.

SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.

    (a) National Health Service Corps Program.--Section 338 (42 U.S.C. 
254k) is amended--
            (1) in subsection (a), by striking ``2012'' and inserting 
        ``2019''; and
            (2) by adding at the end the following:
    ``(c) For the purpose of carrying out this subpart, in addition to 
any other amounts authorized to be appropriated for such purpose, there 
are authorized to be appropriated, out of any monies in the Public 
Health Investment Fund, the following:
            ``(1) $63,000,000 for fiscal year 2010.
            ``(2) $66,000,000 for fiscal year 2011.
            ``(3) $70,000,000 for fiscal year 2012.
            ``(4) $73,000,000 for fiscal year 2013.
            ``(5) $77,000,000 for fiscal year 2014.
            ``(6) $81,000,000 for fiscal year 2015.
            ``(7) $85,000,000 for fiscal year 2016.
            ``(8) $89,000,000 for fiscal year 2017.
            ``(9) $94,000,000 for fiscal year 2018.
            ``(10) $98,000,000 for fiscal year 2019.''.
    (b) Scholarship and Loan Repayment Programs.--Subpart III of part D 
of title III of the Public Health Service Act (42 U.S.C. 254l et seq.) 
is amended--
            (1) in section 338H(a)--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) for fiscal years 2013 and 2019, such sums as may be 
        necessary.''; and
            (2) by inserting after section 338H the following:

``SEC. 338H-1. ADDITIONAL FUNDING.

    ``For the purpose of carrying out this subpart, in addition to any 
other amounts authorized to be appropriated for such purpose, there are 
authorized to be appropriated, out of any monies in the Public Health 
Investment Fund, the following:
            ``(1) $254,000,000 for fiscal year 2010.
            ``(2) $266,000,000 for fiscal year 2011.
            ``(3) $278,000,000 for fiscal year 2012.
            ``(4) $292,000,000 for fiscal year 2013.
            ``(5) $306,000,000 for fiscal year 2014.
            ``(6) $321,000,000 for fiscal year 2015.
            ``(7) $337,000,000 for fiscal year 2016.
            ``(8) $354,000,000 for fiscal year 2017.
            ``(9) $372,000,000 for fiscal year 2018.
            ``(10) $391,000,000 for fiscal year 2019.''.

            PART 2--PROMOTION OF PRIMARY CARE AND DENTISTRY

SEC. 2211. FRONTLINE HEALTH PROVIDERS.

    Part D of title III (42 U.S.C. 254b et seq.) is amended by adding 
at the end the following:

             ``Subpart XI--Health Professional Needs Areas

``SEC. 340H. IN GENERAL.

    ``(a) Program.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall establish a 
program, to be known as the Frontline Health Providers Loan Repayment 
Program, to address unmet health care needs in health professional 
needs areas through loan repayments under section 340I.
    ``(b) Designation of Health Professional Needs Areas.--
            ``(1) In general.--In this subpart, the term `health 
        professional needs area' means an area, population, or facility 
        that is designated by the Secretary in accordance with 
        paragraph (2).
            ``(2) Designation.--To be designated by the Secretary as a 
        health professional needs area under this subpart:
                    ``(A) In the case of an area, the area must be a 
                rational area for the delivery of health services.
                    ``(B) The area, population, or facility must have, 
                in one or more health disciplines, specialties, or 
                subspecialties for the population served, as determined 
                by the Secretary--
                            ``(i) insufficient capacity of health 
                        professionals; or
                            ``(ii) high needs for health services.
                    ``(C) With respect to the delivery of primary 
                health services, the area, population, or facility must 
                not include a health professional shortage area (as 
                designated under section 332), except that the area, 
                population, or facility may include such a health 
                professional shortage area to which no member of the 
                National Health Service Corps is currently assigned.
    ``(c) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1) hold a degree in a course of study or program 
        (approved by the Secretary) from a school defined in section 
        799B(1)(A) (other than a school of public health);
            ``(2) hold a degree in a course of study or program 
        (approved by the Secretary) from a school or program defined in 
        subparagraph (C), (D), or (E)(4) of section 799B(1), as 
        designated by the Secretary;
            ``(3) be enrolled as a full-time student--
                    ``(A) in a school or program defined in 
                subparagraph (C), (D), or (E)(4) of section 799B(1), as 
                designated by the Secretary, or a school described in 
                paragraph (1); and
                    ``(B) in the final year of a course of study or 
                program, offered by such school or program and approved 
                by the Secretary, leading to a degree in a discipline 
                referred to in subparagraph (A) (other than a graduate 
                degree in public health), (C), (D), or (E)(4) of 
                section 799B(1);
            ``(4) be a practitioner described in section 1842(b)(18)(C) 
        or 1848(k)(3)(B)(iii) or (iv) of the Social Security Act; or
            ``(5) be a practitioner in the field of respiratory 
        therapy, medical technology, or radiologic technology.
    ``(d) Definition.--In this subpart, the term `primary health 
services' has the meaning given to such term in section 331(a)(3)(D).

``SEC. 340I. LOAN REPAYMENTS.

    ``(a) Loan Repayments.--The Secretary, acting through the 
Administrator of the Health Resources and Services Administration, 
shall enter into contracts with individuals under which--
            ``(1) the individual agrees--
                    ``(A) to serve as a full-time primary health 
                services provider or as a full-time or part-time 
                provider of other health services for a period of time 
                equal to 2 years or such longer period as the 
                individual may agree to;
                    ``(B) to serve in a health professional needs area 
                in a health discipline, specialty, or a subspecialty 
                for which the area, population, or facility is 
                designated as a health professional needs area under 
                section 340H; and
                    ``(C) in the case of an individual described in 
                subsection 340H(c)(3) who is in the final year of study 
                and who has accepted employment as primary health 
                services provider or provider of other health services 
                in accordance with subparagraphs (A) and (B), to 
                complete the education or training and maintain an 
                acceptable level of academic standing (as determined by 
                the educational institution offering the course of 
                study or training); and
            ``(2) the Secretary agrees to pay, for each year of such 
        service, an amount on the principal and interest of the 
        undergraduate or graduate educational loans (or both) of the 
        individual that is not more than 50 percent of the average 
        award made under the National Health Service Corps Loan 
        Repayment Program under subpart III in that year.
    ``(b) Practice Setting.--A contract entered into under this section 
shall allow the individual receiving the loan repayment to satisfy the 
service requirement described in subsection (a)(1) through employment 
in a solo or group practice, a clinic, an accredited public or private 
nonprofit hospital, or any other health care entity, as deemed 
appropriate by the Secretary.
    ``(c) Application of Certain Provisions.--The provisions of subpart 
III of part D shall, except as inconsistent with this section, apply to 
the loan repayment program under this subpart in the same manner and to 
the same extent as such provisions apply to the National Health Service 
Corps Loan Repayment Program established under section 338B.
    ``(d) Insufficient Number of Applicants.--If there are an 
insufficient number of applicants for loan repayments under this 
section to obligate all appropriated funds, the Secretary shall 
transfer the unobligated funds to the National Health Service Corps for 
the purpose of--
            ``(1) recruitment of sufficient applicants for the National 
        Health Service Corps for the following year; or
            ``(2) making additional loan repayments under section 338B 
        if there is an excess number of qualified applicants for loan 
        repayments under such section.

``SEC. 340J. REPORT.

    ``The Secretary shall submit to the Congress an annual report on 
the program carried out under this subpart.

``SEC. 340K. ALLOCATION.

    ``Of the amount of funds obligated under this subpart each fiscal 
year for loan repayments--
            ``(1) 90 percent shall be for physicians and other health 
        professionals providing primary health services; and
            ``(2) 10 percent shall be for health professionals not 
        described in paragraph (1).''.

SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.

    (a) Loan Provisions.--Section 722 (42 U.S.C. 292r) is amended by 
striking subsection (e) and inserting the following:
    ``(e) Rate of Interest.--Such loans shall bear interest, on the 
unpaid balance of the loan, computed only for periods for which the 
loan is repayable, at the rate of 2 percentage points less than the 
applicable rate of interest described in section 427A(l)(1) of the 
Higher Education Act of 1965 per year.''.
    (b) Medical Schools and Primary Health Care.--Subsection (a) of 
section 723 (42 U.S.C. 292s) is amended--
            (1) in paragraph (1), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) to practice in such care for 10 years 
                (including residency training in primary health care) 
                or through the date on which the loan is repaid in 
                full, whichever occurs first.''; and
            (2) by striking paragraph (3) and inserting the following:
            ``(3) Noncompliance by student.--If an individual fails to 
        comply with an agreement entered into pursuant to paragraph 
        (1), such agreement shall provide that the total interest to be 
        paid on the loan, over the course of the loan period, shall 
        equal the total amount of interest that would have been 
        incurred by the individual if, from the outset of the loan, the 
        loan was repayable at the rate of interest described in section 
        427A(l)(1) of the Higher Education Act of 1965 per year instead 
        of the rate of interest described in section 722(e).''.
    (c) Student Loan Guidelines.--
            (1) In general.--Section 735 (42 U.S.C. 292y) is amended--
                    (A) by redesignating subsection (f) as subsection 
                (g); and
                    (B) by inserting after subsection (e) the 
                following:
    ``(f) Determination of Financial Need.--The Secretary--
            ``(1) may require, or authorize a school or other entity to 
        require, the submission of financial information to determine 
        the financial resources available to any individual seeking 
        assistance under this subpart; and
            ``(2) shall take into account the extent to which such 
        individual is financially independent in determining whether to 
        require or authorize the submission of such information 
        regarding such individual's family members.''.
            (2) Revised guidelines.--The Secretary of Health and Human 
        Services shall--
                    (A) strike the second sentence of section 57.206(b) 
                of title 42, Code of Federal Regulations; and
                    (B) make such other revisions to guidelines and 
                regulations in effect as of the date of the enactment 
                of this Act as may be necessary for consistency with 
                the amendments made by paragraph (1).

SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, 
              GENERAL PEDIATRICS, GERIATRICS, AND PHYSICIAN 
              ASSISTANTSHIP.

    Section 747 (42 U.S.C. 293k) is amended--
            (1) by amending the section heading to read as follows: 
        ``primary care training and enhancement'';
            (2) by redesignating subsection (e) as subsection (f); and
            (3) by striking subsections (a) through (d) and inserting 
        the following:
    ``(a) Program.--The Secretary shall establish a primary care 
training and capacity building program consisting of awarding grants 
and contracts under subsections (b) and (c).
    ``(b) Support and Development of Primary Care Training Programs.--
            ``(1) In general.--The Secretary shall make grants to, or 
        enter into contracts with, eligible entities--
                    ``(A) to plan, develop, operate, or participate in 
                an accredited professional training program, including 
                an accredited residency or internship program, in the 
                field of family medicine, general internal medicine, 
                general pediatrics, or geriatrics for medical students, 
                interns, residents, or practicing physicians;
                    ``(B) to provide financial assistance in the form 
                of traineeships and fellowships to medical students, 
                interns, residents, or practicing physicians, who are 
                participants in any such program, and who plan to 
                specialize or work in family medicine, general internal 
                medicine, general pediatrics, or geriatrics;
                    ``(C) to plan, develop, operate, or participate in 
                an accredited program for the training of physicians 
                who plan to teach in family medicine, general internal 
                medicine, general pediatrics, or geriatrics training 
                programs including in community-based settings;
                    ``(D) to provide financial assistance in the form 
                of traineeships and fellowships to practicing 
                physicians who are participants in any such programs 
                and who plan to teach in a family medicine, general 
                internal medicine, general pediatrics, or geriatrics 
                training program; and
                    ``(E) to plan, develop, operate, or participate in 
                an accredited program for physician assistant 
                education, and for the training of individuals who plan 
                to teach in programs to provide such training.
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under paragraph (1), an entity shall be--
                    ``(A) an accredited school of medicine or 
                osteopathic medicine, public or nonprofit private 
                hospital, or physician assistant training program;
                    ``(B) a public or private nonprofit entity; or
                    ``(C) a consortium of 2 or more entities described 
                in subparagraphs (A) and (B).
    ``(c) Capacity Building in Primary Care.--
            ``(1) In general.--The Secretary shall make grants to or 
        enter into contracts with eligible entities to establish, 
        maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                the specialties of family medicine, general internal 
                medicine, general pediatrics, or geriatrics; or
                    ``(B) programs that improve clinical teaching in 
                such specialties.
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under paragraph (1), an entity shall be an accredited school of 
        medicine or osteopathic medicine.
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of health care professionals who 
        provide primary care.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) A high rate of placing graduates in practice settings 
        having the principal focus of serving in underserved areas or 
        populations experiencing health disparities (including serving 
        patients eligible for medical assistance under title XIX of the 
        Social Security Act or for child health assistance under title 
        XXI of such Act or those with special health care needs).
            ``(4) Supporting teaching programs that address the health 
        care needs of vulnerable populations.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definition.--In this section, the term `health disparities' 
has the meaning given the term in section 3171.''.

SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

    Title VII (42 U.S.C. 292 et seq.) is amended--
            (1) by redesignating section 748 as 749A; and
            (2) by inserting after section 747 the following:

``SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

    ``(a) Program.--The Secretary shall establish a program for the 
training of medical residents in community-based settings consisting of 
awarding grants or contracts under this section.
    ``(b) Development and Operation of Community-Based Programs.--The 
Secretary shall make grants to, or enter into contracts with, eligible 
entities--
            ``(1) to plan and develop a new primary care residency 
        training program, which may include--
                    ``(A) planning and developing curricula;
                    ``(B) recruiting and training residents and 
                faculty; and
                    ``(C) other activities designated to result in 
                accreditation of such a program; or
            ``(2) to operate or participate in an established primary 
        care residency training program, which may include--
                    ``(A) planning and developing curricula;
                    ``(B) recruitment and training of residents; and
                    ``(C) retention of faculty.
    ``(c) Eligible Entity.--To be eligible to receive a grant or 
contract under subsection (b), an entity shall--
            ``(1) be designated as a recipient of payment for the 
        direct costs of medical education under section 1886(k) of the 
        Social Security Act;
            ``(2) be designated as an approved teaching health center 
        under section 1502(d) of the America's Affordable Health 
        Choices Act of 2009 and continuing to participate in the 
        demonstration project under such section; or
            ``(3) be an applicant for designation described in 
        paragraph (1) or (2) and have demonstrated to the Secretary 
        appropriate involvement of an accredited teaching hospital to 
        carry out the inpatient responsibilities associated with a 
        primary care residency training program.
    ``(d) Preferences.--In awarding grants and contracts under 
paragraph (1) or (2) of subsection (b), the Secretary shall give 
preference to entities that--
            ``(1) support teaching programs that address the health 
        care needs of vulnerable populations; or
            ``(2) are a Federally qualified health center (as defined 
        in section 1861(aa)(4) of the Social Security Act) or a rural 
        health clinic (as defined in section 1861(aa)(2) of such Act).
    ``(e) Additional Preferences for Established Programs.--In awarding 
grants and contracts under subsection (b)(2), the Secretary shall give 
preference to entities that have a demonstrated record of training--
            ``(1) a high or significantly improved percentage of health 
        care professionals who provide primary care;
            ``(2) individuals who are from underrepresented minority 
        groups or disadvantaged backgrounds; or
            ``(3) individuals who practice in settings having the 
        principal focus of serving underserved areas or populations 
        experiencing health disparities (including serving patients 
        eligible for medical assistance under title XIX of the Social 
        Security Act or for child health assistance under title XXI of 
        such Act or those with special health care needs).
    ``(f) Period of Awards.--
            ``(1) In general.--The period of a grant or contract under 
        this section--
                    ``(A) shall not exceed 2 years for awards under 
                subsection (b)(1); and
                    ``(B) shall not exceed 5 years for awards under 
                subsection (b)(2).
            ``(2) Special rules.--
                    ``(A) An award of a grant or contract under 
                subsection (b)(1) shall not be renewed.
                    ``(B) The period of a grant or contract awarded to 
                an entity under subsection (b)(2) shall not overlap 
                with the period of any grant or contact awarded to the 
                same entity under subsection (b)(1).
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(h) Definitions.--In this section:
            ``(1) Primary care residency training program.--The term 
        `primary care residency training program' means an approved 
        medical residency training program described in section 
        1886(h)(5)(A) of the Social Security Act that is--
                    ``(A) in the case of entities seeking awards under 
                subsection (b)(1), actively applying to be accredited 
                by the Accreditation Council for Graduate Medical 
                Education; or
                    ``(B) in the case of entities seeking awards under 
                subsection (b)(2), so accredited.
            ``(2) Health disparities.--The term `health disparities' 
        has the meaning given the term in section 3171.''.

SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS 
              AND DENTAL HYGIENISTS.

    Title VII (42 U.S.C. 292 et seq.) is amended--
            (1) in section 791(a)(1), by striking ``747 and 750'' and 
        inserting ``747, 749, and 750''; and
            (2) by inserting after section 748, as added, the 
        following:

``SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS 
              AND DENTAL HYGIENISTS.

    ``(a) Program.--The Secretary shall establish a dental medicine 
training program consisting of awarding grants and contracts under this 
section.
    ``(b) Support and Development of Dental Training Programs.--The 
Secretary shall make grants to, or enter into contracts with, eligible 
entities--
            ``(1) to plan, develop, operate, or participate in an 
        accredited professional training program for oral health 
        professionals;
            ``(2) to provide financial assistance to oral health 
        professionals who are in need thereof, who are participants in 
        any such program, and who plan to work in general, pediatric, 
        or public heath dentistry, or dental hygiene;
            ``(3) to plan, develop, operate, or participate in a 
        program for the training of oral health professionals who plan 
        to teach in general, pediatric, or public health dentistry, or 
        dental hygiene;
            ``(4) to provide financial assistance in the form of 
        traineeships and fellowships to oral health professionals who 
        plan to teach in general, pediatric, or public health dentistry 
        or dental hygiene;
            ``(5) to establish, maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                the specialties of general, pediatric, or public health 
                dentistry; or
                    ``(B) programs that improve clinical teaching in 
                such specialties;
            ``(6) to plan, develop, operate, or participate in 
        predoctoral and postdoctoral training in general, pediatric, or 
        public health dentistry programs, or training for dental 
        hygienists;
            ``(7) to plan, develop, operate, or participate in a loan 
        repayment program for full-time faculty in a program of 
        general, pediatric, or public health dentistry; and
            ``(8) to provide technical assistance to pediatric dental 
        training programs in developing and implementing instruction 
        regarding the oral health status, dental care needs, and risk-
        based clinical disease management of all pediatric populations 
        with an emphasis on underserved children.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited school of dentistry, training program 
        in dental hygiene, or public or nonprofit private hospital;
            ``(2) a training program in dental hygiene at an accredited 
        institution of higher education;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of--
                    ``(A) 2 or more of the entities described in 
                paragraphs (1) through (3); and
                    ``(B) an accredited school of public health.
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of oral health professionals who 
        practice general, pediatric, or public health dentistry.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) A high rate of placing graduates in practice settings 
        having the principal focus of serving in underserved areas or 
        populations experiencing health disparities (including serving 
        patients eligible for medical assistance under title XIX of the 
        Social Security Act or for child health assistance under title 
        XXI of such Act or those with special health care needs).
            ``(4) Supporting teaching programs that address the dental 
        needs of vulnerable populations.
            ``(5) Providing instruction regarding the oral health 
        status, dental care needs, and risk-based clinical disease 
        management of all pediatric populations with an emphasis on 
        underserved children.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definition.--In this section:
            ``(1) The term `health disparities' has the meaning given 
        the term in section 3171.
            ``(2) The term `oral health professional' means an 
        individual training or practicing--
                    ``(A) in general dentistry, pediatric dentistry, 
                public health dentistry, or dental hygiene; or
                    ``(B) another dental medicine specialty, as deemed 
                appropriate by the Secretary.''.

SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Part F of title VII (42 U.S.C. 295j et seq.) is 
amended by adding at the end the following:

``SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

    ``(a) Promotion of Primary Care and Dentistry.--For the purpose of 
carrying out subpart XI of part D of title III and sections 723, 747, 
748, and 749, in addition to any other amounts authorized to be 
appropriated for such purpose, there is authorized to be appropriated, 
out of any monies in the Public Health Investment Fund, the following:
            ``(1) $240,000,000 for fiscal year 2010.
            ``(2) $253,000,000 for fiscal year 2011.
            ``(3) $265,000,000 for fiscal year 2012.
            ``(4) $278,000,000 for fiscal year 2013.
            ``(5) $292,000,000 for fiscal year 2014.
            ``(6) $307,000,000 for fiscal year 2015.
            ``(7) $322,000,000 for fiscal year 2016.
            ``(8) $338,000,000 for fiscal year 2017.
            ``(9) $355,000,000 for fiscal year 2018.
            ``(10) $373,000,000 for fiscal year 2019.''.
    (b) Existing Authorizations of Appropriations.--
            (1) Section 735.--Paragraph (1) of section 735(g), as so 
        redesignated, is amended by inserting ``and such sums as may be 
        necessary for subsequent years through fiscal year 2019'' 
        before the period at the end.
            (2) Section 747.--Subsection (f), as so redesignated, of 
        section 747 (42 U.S.C. 293k) is amended by striking ``2002'' 
        and inserting ``2019''.

                     Subtitle B--Nursing Workforce

SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) Definitions.--Section 801 (42 U.S.C. 296 et seq.) is amended--
            (1) in paragraph (1), by inserting ``nurse-managed health 
        centers'' after ``nursing centers,''; and
            (2) by adding at the end the following:
            ``(16) Nurse-managed health center.--The term `nurse-
        managed health center' means a nurse-practice arrangement, 
        managed by advanced practice nurses, that provides primary care 
        or wellness services to underserved or vulnerable populations 
        and is associated with an accredited school of nursing, 
        Federally qualified health center, or independent nonprofit 
        health or social services agency.''.
    (a) Grants for Health Professions Education.--Title VIII (42 U.S.C. 
296 et seq.) is amended by striking section 807.
    (b) Advanced Education Nursing Grants.--Section 811(f) (42 U.S.C. 
296j(f)) is amended--
            (1) by striking paragraph (2);
            (2) by redesignating paragraph (3) as paragraph (2); and
            (3) in paragraph (2), as so redesignated, by striking 
        ``that agrees'' and all that follows through the end and 
        inserting: ``that agrees to expend the award--
                    ``(A) to train advanced education nurses who will 
                practice in health professional shortage areas 
                designated under section 332; or
                    ``(B) to increase diversity among advanced 
                education nurses.''.
    (c) Nurse Education, Practice, and Retention Grants.--Section 831 
(42 U.S.C. 296p) is amended--
            (1) in subsection (b), by amending paragraph (3) to read as 
        follows:
            ``(3) providing coordinated care, quality care, and other 
        skills needed to practice nursing;''; and
            (2) by striking subsection (e) and redesignating 
        subsections (f) through (h) as subsections (e) through (g), 
        respectively.
    (d) Student Loans.--Subsection (a) of section 836 (42 U.S.C. 297b) 
is amended--
            (1) by striking ``$2,500'' and inserting ``$3,300'';
            (2) by striking ``$4,000'' and inserting ``$5,200'';
            (3) by striking ``$13,000'' and inserting ``$17,000''; and
            (4) by adding at the end the following: ``Beginning with 
        fiscal year 2012, the dollar amounts specified in this 
        subsection shall be adjusted by an amount determined by the 
        Secretary on an annual basis to reflect inflation.''.
    (e) Loan Repayment.--Section 846 (42 U.S.C. 297n) is amended--
            (1) in subsection (a), by amending paragraph (3) to read as 
        follows:
            ``(3) who enters into an agreement with the Secretary to 
        serve for a period of not less than 2 years--
                    ``(A) as a nurse at a health care facility with a 
                critical shortage of nurses; or
                    ``(B) as a faculty member at an accredited school 
                of nursing;''; and
            (2) in subsection (g)(1), by striking ``to provide health 
        services'' each place it appears and inserting ``to provide 
        health services or serve as a faculty member''.
    (f) Nurse Faculty Loan Program.--Paragraph (2) of section 846A(c) 
(42 U.S.C. 297n-1(c)) is amended by striking ``$30,000'' and all that 
follows through the semicolon and inserting ``$35,000, plus, beginning 
with fiscal year 2012, an amount determined by the Secretary on an 
annual basis to reflect inflation;''.
    (g) Public Service Announcements.--Title VIII (42 U.S.C. 296 et 
seq.) is amended by striking part H.
    (h) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296 
et seq.) is amended--
            (1) by redesignating section 810 (relating to prohibition 
        against discrimination by schools on the basis of sex) as 
        section 809 and moving such section so that it follows section 
        808;
            (2) in sections 835, 836, 838, 840, and 842, by striking 
        the term ``this subpart'' each place it appears and inserting 
        ``this part'';
            (3) in section 836(h), by striking the last sentence;
            (4) in section 836, by redesignating subsection (l) as 
        subsection (k);
            (5) in section 839, by striking ``839'' and all that 
        follows through ``(a)'' and inserting ``839. (a)'';
            (6) in section 835(b), by striking ``841'' each place it 
        appears and inserting ``871'';
            (7) by redesignating section 841 as section 871, moving 
        part F to the end of the title, and redesignating such part as 
        part H;
            (8) in part G--
                    (A) by redesignating section 845 as section 851; 
                and
                    (B) by redesignating part G as part F; and
            (9) in part I--
                    (A) by redesignating section 855 as section 861; 
                and
                    (B) by redesignating part I as part G.
    (i) Funding.--
            (1) In general.--Part H, as redesignated, of title VIII is 
        amended by adding at the end the following:

``SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

    ``For the purpose of carrying out this title, in addition to any 
other amounts authorized to be appropriated for such purpose, there are 
authorized to be appropriated, out of any monies in the Public Health 
Investment Fund, the following:
            ``(1) $115,000,000 for fiscal year 2010.
            ``(2) $122,000,000 for fiscal year 2011.
            ``(3) $127,000,000 for fiscal year 2012.
            ``(4) $134,000,000 for fiscal year 2013.
            ``(5) $140,000,000 for fiscal year 2014.
            ``(6) $147,000,000 for fiscal year 2015.
            ``(7) $154,000,000 for fiscal year 2016.
            ``(8) $162,000,000 for fiscal year 2017.
            ``(9) $170,000,000 for fiscal year 2018.
            ``(10) $179,000,000 for fiscal year 2019.''.
            (2) Existing authorizations of appropriations.--
                    (A) Sections 831, 846, 846a, and 861.--Sections 
                831(g) (as so redesignated), 846(i)(1) (42 U.S.C. 
                297n(i)(1)), 846A(f) (42 U.S.C. 297n-1(f)), and 861(e) 
                (as so redesignated) are amended by striking ``2007'' 
                each place it appears and inserting ``2019''.
                    (B) Section 871.--Section 871, as so redesignated, 
                is amended to read as follows:

``SEC. 871. FUNDING.

    ``For the purpose of carrying out parts B, C, and D (subject to 
section 845(g)), there are authorized to be appropriated such sums as 
may be necessary for each fiscal year through fiscal year 2019.''.

                  Subtitle C--Public Health Workforce

SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.

    Part D of title III (42 U.S.C. 254b et seq.), as amended by section 
2211, is amended by adding at the end the following:

                 ``Subpart XII--Public Health Workforce

``SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.

    ``(a) Establishment.--There is established, within the Service, the 
Public Health Workforce Corps (in this subpart referred to as the 
`Corps'), for the purpose of ensuring an adequate supply of public 
health professionals throughout the Nation. The Corps shall consist 
of--
            ``(1) such officers of the Regular and Reserve Corps of the 
        Service as the Secretary may designate; and
            ``(2) such civilian employees of the United States as the 
        Secretary may appoint.
    ``(b) Administration.--Except as provided in subsection (c), the 
Secretary shall carry out this subpart acting through the Administrator 
of the Health Resources and Services Administration.
    ``(c) Placement and Assignment.--The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention, shall 
develop a methodology for placing and assigning Corps participants as 
public health professionals. Such methodology may allow for placing and 
assigning such participants in State, local, and tribal health 
departments and Federally qualified health centers (as defined in 
section 1861(aa)(4) of the Social Security Act).
    ``(d) Application of Certain Provisions.--The provisions of subpart 
II shall, except as inconsistent with this subpart, apply to the Public 
Health Workforce Corps in the same manner and to the same extent as 
such provisions apply to the National Health Service Corps established 
under section 331.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the programs carried out under this subpart.

``SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Scholarship Program (referred to in this section as 
the `Program') for the purpose described in section 340L(a).
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1)(A) be accepted for enrollment, or be enrolled, as a 
        full-time or part-time student in a course of study or program 
        (approved by the Secretary) at an accredited graduate school or 
        program of public health; or
            ``(B) have demonstrated expertise in public health and be 
        accepted for enrollment, or be enrolled, as a full-time or 
        part-time student in a course of study or program (approved by 
        the Secretary) at--
                    ``(i) an accredited graduate school or program of 
                nursing; health administration, management, or policy; 
                preventive medicine; laboratory science; veterinary 
                medicine; or dental medicine; or
                    ``(ii) another accredited graduate school or 
                program, as deemed appropriate by Secretary;
            ``(2) be eligible for, or hold, an appointment as a 
        commissioned officer in the Regular or Reserve Corps of the 
        Service or be eligible for selection for civilian service in 
        the Corps; and
            ``(3) sign and submit to the Secretary a written contract 
        (described in subsection (c)) to serve full-time as a public 
        health professional, upon the completion of the course of study 
        or program involved, for the period of obligated service 
        described in subsection (c)(2)(E).
    ``(c) Contract.--The written contract between the Secretary and an 
individual under subsection (b)(3) shall contain--
            ``(1) an agreement on the part of the Secretary that the 
        Secretary will--
                    ``(A) provide the individual with a scholarship for 
                a period of years (not to exceed 4 academic years) 
                during which the individual shall pursue an approved 
                course of study or program to prepare the individual to 
                serve in the public health workforce; and
                    ``(B) accept (subject to the availability of 
                appropriated funds) the individual into the Corps;
            ``(2) an agreement on the part of the individual that the 
        individual will--
                    ``(A) accept provision of such scholarship to the 
                individual;
                    ``(B) maintain full-time or part-time enrollment in 
                the approved course of study or program described in 
                subsection (b)(1) until the individual completes that 
                course of study or program;
                    ``(C) while enrolled in the approved course of 
                study or program, maintain an acceptable level of 
                academic standing (as determined by the educational 
                institution offering such course of study or program);
                    ``(D) if applicable, complete a residency or 
                internship; and
                    ``(E) serve full-time as a public health 
                professional for a period of time equal to the greater 
                of--
                            ``(i) 1 year for each academic year for 
                        which the individual was provided a scholarship 
                        under the Program; or
                            ``(ii) 2 years; and
            ``(3) an agreement by both parties as to the nature and 
        extent of the scholarship assistance, which may include--
                    ``(A) payment of reasonable educational expenses of 
                the individual, including tuition, fees, books, 
                equipment, and laboratory expenses; and
                    ``(B) payment of a stipend of not more than $1,269 
                (plus, beginning with fiscal year 2011, an amount 
                determined by the Secretary on an annual basis to 
                reflect inflation) per month for each month of the 
                academic year involved, with the dollar amount of such 
                a stipend determined by the Secretary taking into 
                consideration whether the individual is enrolled full-
                time or part-time.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III shall, except as inconsistent with this subpart, apply to the 
scholarship program under this section in the same manner and to the 
same extent as such provisions apply to the National Health Service 
Corps Scholarship Program established under section 338A.

``SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as 
the `Program') for the purpose described in section 340L(a).
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1)(A) have a graduate degree from an accredited school 
        or program of public health;
            ``(B) have demonstrated expertise in public health and have 
        a graduate degree in a course of study or program (approved by 
        the Secretary) from--
                    ``(i) an accredited school or program of nursing; 
                health administration, management, or policy; 
                preventive medicine; laboratory science; veterinary 
                medicine; or dental medicine; or
                    ``(ii) another accredited school or program 
                approved by the Secretary; or
            ``(C) be enrolled as a full-time or part-time student in 
        the final year of a course of study or program (approved by the 
        Secretary) offered by a school or program described in 
        subparagraph (A) or (B), leading to a graduate degree;
            ``(2) be eligible for, or hold, an appointment as a 
        commissioned officer in the Regular or Reserve Corps of the 
        Service or be eligible for selection for civilian service in 
        the Corps;
            ``(3) if applicable, complete a residency or internship; 
        and
            ``(4) sign and submit to the Secretary a written contract 
        (described in subsection (c)) to serve full-time as a public 
        health professional for the period of obligated service 
        described in subsection (c)(2).
    ``(c) Contract.--The written contract between the Secretary and an 
individual under subsection (b)(4) shall contain--
            ``(1) an agreement by the Secretary to repay on behalf of 
        the individual loans incurred by the individual in the pursuit 
        of the relevant public health workforce educational degree in 
        accordance with the terms of the contract;
            ``(2) an agreement by the individual to serve full-time as 
        a public health professional for a period of time equal to 2 
        years or such longer period as the individual may agree to; and
            ``(3) in the case of an individual described in subsection 
        (b)(1)(C) who is in the final year of study and who has 
        accepted employment as a public health professional, in 
        accordance with subsection 340L(c), an agreement on the part of 
        the individual to complete the education or training, maintain 
        an acceptable level of academic standing (as determined by the 
        educational institution offering the course of study or 
        training), and serve the period of obligated service described 
        in paragraph (2).
    ``(d) Payments.--
            ``(1) In general.--A loan repayment provided for an 
        individual under a written contract under the Program shall 
        consist of payment, in accordance with paragraph (2), on behalf 
        of the individual of the principal, interest, and related 
        expenses on government and commercial loans received by the 
        individual regarding the undergraduate or graduate education of 
        the individual (or both), which loans were made for reasonable 
        educational expenses, including tuition, fees, books, 
        equipment, and laboratory expenses, incurred by the individual.
            ``(2) Payments for years served.--
                    ``(A) In general.--For each year of obligated 
                service that an individual contracts to serve under 
                subsection (c), the Secretary may pay up to $35,000 
                (plus, beginning with fiscal year 2012, an amount 
                determined by the Secretary on an annual basis to 
                reflect inflation) on behalf of the individual for 
                loans described in paragraph (1).
                    ``(B) Repayment schedule.--Any arrangement made by 
                the Secretary for the making of loan repayments in 
                accordance with this subsection shall provide that any 
                repayments for a year of obligated service shall be 
                made no later than the end of the fiscal year in which 
                the individual completes such year of service.
    ``(e) Application of Certain Provisions.--The provisions of subpart 
III shall, except as inconsistent with this subpart, apply to the loan 
repayment program under this section in the same manner and to the same 
extent as such provisions apply to the National Health Service Corps 
Loan Repayment Program established under section 338B.''.

SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.

    Section 765 (42 U.S.C. 295) is amended to read as follows:

``SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.

    ``(a) Program.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration and in consultation 
with the Director of the Centers for Disease Control and Prevention, 
shall establish a public health workforce training and enhancement 
program consisting of awarding grants and contracts under subsection 
(b).
    ``(b) Grants and Contracts.--The Secretary shall award grants and 
contracts to eligible entities--
            ``(1) to plan, develop, operate, or participate in, an 
        accredited professional training program in the field of public 
        health (including such a program in nursing; health 
        administration, management, or policy; preventive medicine; 
        laboratory science; veterinary medicine; or dental medicine) 
        for members of the public health workforce including mid-career 
        professionals;
            ``(2) to provide financial assistance in the form of 
        traineeships and fellowships to students who are participants 
        in any such program and who plan to specialize or work in the 
        field of public health;
            ``(3) to plan, develop, operate, or participate in a 
        program for the training of public health professionals who 
        plan to teach in any program described in paragraph (1); and
            ``(4) to provide financial assistance in the form of 
        traineeships and fellowships to public health professionals who 
        are participants in any program described in paragraph (1) and 
        who plan to teach in the field of public health, including 
        nursing; health administration, management, or policy; 
        preventive medicine; laboratory science; veterinary medicine; 
        or dental medicine.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited health professions school, including an 
        accredited graduate school or program of public health; 
        nursing; health administration, management, or policy; 
        preventive medicine; laboratory science; veterinary medicine; 
        or dental medicine;
            ``(2) a State, local, or tribal health department;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of public health professionals who 
        serve in underserved communities.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) Training individuals in public health specialties 
        experiencing a significant shortage of public health 
        professionals (as determined by the Secretary).
            ``(4) Training the greatest percentage, or significantly 
        improving the percentage, of public health professionals 
        serving in the Federal Government or a State, local, or tribal 
        government.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.

    Section 766 (42 U.S.C. 295a) is amended--
            (1) in subsection (b)(1), by striking ``in furtherance of 
        the goals established by the Secretary for the year 2000'' and 
        inserting ``in furtherance of the goals established by the 
        Secretary in the national prevention and wellness strategy 
        under section 3121''; and
            (2) by adding at the end the following:
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
              PROGRAM.

    Section 768 (42 U.S.C. 295c) is amended to read as follows:

``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
              PROGRAM.

    ``(a) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration and in consultation 
with the Director of the Centers for Disease Control and Prevention, 
shall award grants to, or enter into contracts with, eligible entities 
to provide training to graduate medical residents in preventive 
medicine specialties.
    ``(b) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited school of public health or school of 
        medicine or osteopathic medicine;
            ``(2) an accredited public or private hospital;
            ``(3) a State, local, or tribal health department; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(c) Use of Funds.--Amounts received under a grant or contract 
under this section shall be used to--
            ``(1) plan, develop (including the development of 
        curricula), operate, or participate in an accredited residency 
        or internship program in preventive medicine or public health;
            ``(2) defray the costs of practicum experiences, as 
        required in such a program; and
            ``(3) establish, maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                preventive medicine and public health; or
                    ``(B) programs that improve clinical teaching in 
                preventive medicine and public health.
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 799C, as added by section 2216 of this 
division, is amended by adding at the end the following:
    ``(b) Public Health Workforce.--For the purpose of carrying out 
subpart XII of part D of title III and sections 765, 766, and 768, in 
addition to any other amounts authorized to be appropriated for such 
purpose, there are authorized to be appropriated, out of any monies in 
the Public Health Investment Fund, the following:
            ``(1) $51,000,000 for fiscal year 2010.
            ``(2) $54,000,000 for fiscal year 2011.
            ``(3) $57,000,000 for fiscal year 2012.
            ``(4) $59,000,000 for fiscal year 2013.
            ``(5) $62,000,000 for fiscal year 2014.
            ``(6) $65,000,000 for fiscal year 2015.
            ``(7) $68,000,000 for fiscal year 2016.
            ``(8) $72,000,000 for fiscal year 2017.
            ``(9) $75,000,000 for fiscal year 2018.
            ``(10) $79,000,000 for fiscal year 2019.''.
    (b) Existing Authorization of Appropriations.--Subpart (a) of 
section 770 (42 U.S.C. 295e) is amended by striking ``2002'' and 
inserting ``2019''.

     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.

    Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) is amended by 
striking ``not more than $20,000'' and all that follows through the end 
of the paragraph and inserting: ``not more than $35,000 (plus, 
beginning with fiscal year 2012, an amount determined by the Secretary 
on an annual basis to reflect inflation) of the principal and interest 
of the educational loans of such individuals.''

SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.

    Subsection (b) of section 821 (42 U.S.C. 296m) is amended--
            (1) in the heading, by striking ``Guidance'' and inserting 
        ``Consultation''; and
            (2) by striking ``shall take into consideration'' and all 
        that follows through ``consult with nursing associations'' and 
        inserting ``shall, as appropriate, consult with nursing 
        associations''.

SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.

    Title VII (42 U.S.C. 292 et seq.) is amended by inserting after 
section 739 the following:

``SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY 
              PROGRAMS.

    ``The Secretary shall, to the extent practicable, coordinate the 
activities carried out under this part and section 821 in order to 
enhance the effectiveness of such activities and avoid duplication of 
effort.''.

              PART 2--INTERDISCIPLINARY TRAINING PROGRAMS

SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY TRAINING FOR HEALTH CARE 
              PROFESSIONALS.

    Section 741 (42 U.S.C. 293e) is amended--
            (1) in the section heading, by striking ``Grants for Health 
        Professions Education'' and inserting ``Cultural and Linguistic 
        Competency Training for Health Care Professionals'';
            (2) by redesignating subsection (b) as subsection (h); and
            (3) by striking subsection (a) and inserting the following:
    ``(a) Program.--The Secretary shall establish a cultural and 
linguistic competency training program for health care professionals, 
including nurse professionals, consisting of awarding grants and 
contracts under subsection (b).
    ``(b) Cultural and Linguistic Competency Training.--The Secretary 
shall award grants and contracts to eligible entities--
            ``(1) to test, develop, and evaluate models of cultural and 
        linguistic competency training (including continuing education) 
        for health professionals; and
            ``(2) to implement cultural and linguistic competency 
        training programs for health professionals developed under 
        paragraph (1) or otherwise.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (b), an entity shall be--
            ``(1) an accredited health professions school or program;
            ``(2) an academic health center;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preference.--In awarding grants and contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Addressing, or partnering with an entity with 
        experience addressing, the cultural and linguistic competency 
        needs of the population to be served through the grant or 
        contract.
            ``(2) Addressing health disparities.
            ``(3) Placing health professionals in regions experiencing 
        significant changes in the cultural and linguistic demographics 
        of populations, including communities along the United States-
        Mexico border.
            ``(4) Carrying out activities described in subsection (b) 
        with respect to more than one health profession discipline, 
        specialty, or subspecialty.
    ``(e) Consultation.--The Secretary shall carry out this section in 
consultation with the heads of appropriate health agencies and offices 
in the Department of Health and Human Services, including the Office of 
Minority Health.
    ``(f) Definition.--In this section, the term `health disparities' 
has the meaning given to the term in section 3171.
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

    Part D of title VII (42 U.S.C. 294 et seq.) is amended by adding at 
the end the following:

``SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

    ``(a) Program.--The Secretary shall establish an innovations in 
interdisciplinary care training program consisting of awarding grants 
and contracts under subsection (b).
    ``(b) Training Programs.--The Secretary shall award grants to, or 
enter into contracts with, eligible entities--
            ``(1) to test, develop, and evaluate health professional 
        training programs (including continuing education) designed to 
        promote--
                    ``(A) the delivery of health services through 
                interdisciplinary and team-based models, which may 
                include patient-centered medical home models, 
                medication therapy management models, and models 
                integrating physical, mental, or oral health services; 
                and
                    ``(B) coordination of the delivery of health care 
                within and across settings, including health care 
                institutions, community-based settings, and the 
                patient's home; and
            ``(2) to implement such training programs developed under 
        paragraph (1) or otherwise.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (b), an entity shall be--
            ``(1) an accredited health professions school or program;
            ``(2) an academic health center;
            ``(3) a public or private nonprofit entity (including an 
        area health education center or a geriatric education center); 
        or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preferences.--In awarding grants and contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        increasing the percentage, of health professionals who serve in 
        underserved communities.
            ``(2) Broad interdisciplinary team-based collaborations.
            ``(3) Addressing health disparities.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definitions.--In this section:
            ``(1) The term `health disparities' has the meaning given 
        the term in section 3171.
            ``(2) The term `interdisciplinary' means collaboration 
        across health professions and specialties, which may include 
        public health, nursing, allied health, and appropriate medical 
        specialties.''.

     PART 3--ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND 
                               ASSESSMENT

SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

    Subpart 1 of part E of title VII (42 U.S.C. 294n et seq.) is 
amended by adding at the end the following:

``SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

    ``(a) Advisory Committee.--The Secretary, acting through the 
Assistant Secretary for Health, shall establish a permanent advisory 
committee to be known as the Advisory Committee on Health Workforce 
Evaluation and Assessment (referred to in this section as the `Advisory 
Committee').
    ``(b) Responsibilities.--The Advisory Committee shall--
            ``(1) not later than 1 year after the date of the 
        establishment of the Advisory Committee, submit recommendations 
        to the Secretary on--
                    ``(A) classifications of the health workforce to 
                ensure consistency of data collection on the health 
                workforce; and
                    ``(B) based on such classifications, standardized 
                methodologies and procedures to enumerate the health 
                workforce;
            ``(2) not later than 2 years after the date of the 
        establishment of the Advisory Committee, submit recommendations 
        to the Secretary on--
                    ``(A) the supply, diversity, and geographic 
                distribution of the health workforce;
                    ``(B) the retention of the health workforce to 
                ensure quality and adequacy of such workforce; and
                    ``(C) policies to carry out the recommendations 
                made pursuant to subparagraphs (A) and (B); and
            ``(3) not later than 4 years after the date of the 
        establishment of the Advisory Committee, and every 2 years 
        thereafter, submit updated recommendations to the Secretary 
        under paragraphs (1) and (2).
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Advisory Committee, including coordinating and supporting the 
dissemination of the recommendations of the Advisory Committee.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Secretary shall appoint 15 
        members to serve on the Advisory Committee.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Advisory Committee for a term of 3 years 
                and may reappoint such members, but the Secretary may 
                not appoint any member to serve more than a total of 6 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to the 
                Advisory Committee under paragraph (1)--
                            ``(i) 5 shall be appointed for a term of 1 
                        year;
                            ``(ii) 5 shall be appointed for a term of 2 
                        years; and
                            ``(iii) 5 shall be appointed for a term of 
                        3 years.
            ``(3) Qualifications.--Members of the Advisory Committee 
        shall be appointed from among individuals who possess expertise 
        in at least one of the following areas:
                    ``(A) Conducting and interpreting health workforce 
                market analysis, including health care labor workforce 
                analysis.
                    ``(B) Conducting and interpreting health finance 
                and economics research.
                    ``(C) Delivering and administering health care 
                services.
                    ``(D) Delivering and administering health workforce 
                education and training.
            ``(4) Representation.--In appointing members of the 
        Advisory Committee, the Secretary shall--
                    ``(A) include no less than one representative of 
                each of--
                            ``(i) health professionals within the 
                        health workforce;
                            ``(ii) health care patients and consumers;
                            ``(iii) employers;
                            ``(iv) labor unions; and
                            ``(v) third-party health payors; and
                    ``(B) ensure that--
                            ``(i) all areas of expertise described in 
                        paragraph (3) are represented;
                            ``(ii) the members of the Advisory 
                        Committee include members who, collectively, 
                        have significant experience working with--
                                    ``(I) populations in urban and 
                                federally designated rural and 
                                nonmetropolitan areas; and
                                    ``(II) populations who are 
                                underrepresented in the health 
                                professions, including underrepresented 
                                minority groups; and
                            ``(iii) individuals who are directly 
                        involved in health professions education or 
                        practice do not constitute a majority of the 
                        members of the Advisory Committee.
            ``(5) Disclosure and conflicts of interest.--Members of the 
        Advisory Committee shall not be considered employees of the 
        Federal Government by reason of service on the Advisory 
        Committee, except members of the Advisory Committee shall be 
        considered to be special Government employees within the 
        meaning of section 107 of the Ethics in Government Act of 1978 
        (5 U.S.C. App.) and section 208 of title 18, United States 
        Code, for the purposes of disclosure and management of 
        conflicts of interest under those sections.
            ``(6) No pay; receipt of travel expenses.--Members of the 
        Advisory Committee shall not receive any pay for service on the 
        Committee, but may receive travel expenses, including a per 
        diem, in accordance with applicable provisions of subchapter I 
        of chapter 57 of title 5, United States Code.
    ``(e) Consultation.--In carrying out this section, the Secretary 
shall consult with the Secretary of Education and the Secretary of 
Labor.
    ``(f) Collaboration.--The Advisory Committee shall collaborate with 
the advisory bodies at the Health Resources and Services 
Administration, the National Advisory Council (as authorized in section 
337), the Advisory Committee on Training in Primary Care Medicine and 
Dentistry (as authorized in section 749A), the Advisory Committee on 
Interdisciplinary, Community-Based Linkages (as authorized in section 
756), the Advisory Council on Graduate Medical Education (as authorized 
in section 762), and the National Advisory Council on Nurse Education 
and Practice (as authorized in section 851).
    ``(g) FACA.--The Federal Advisory Committee Act (5 U.S.C. App.) 
except for section 14 of such Act shall apply to the Advisory Committee 
under this section only to the extent that the provisions of such Act 
do not conflict with the requirements of this section.
    ``(h) Report.--The Secretary shall submit to the Congress an annual 
report on the activities of the Advisory Committee.
    ``(i) Definition.--In this section, the term `health workforce' 
includes all health care providers with direct patient care and support 
responsibilities, including physicians, nurses, physician assistants, 
pharmacists, oral health professionals (as defined in section 749(f)), 
allied health professionals, mental and behavioral professionals, and 
public health professionals (including veterinarians engaged in public 
health practice).''.

                  PART 4--HEALTH WORKFORCE ASSESSMENT

SEC. 2271. HEALTH WORKFORCE ASSESSMENT.

    (a) In General.--Section 761 (42 U.S.C. 294n) is amended--
            (1) by redesignating subsection (c) as subsection (e); and
            (2) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) In General.--The Secretary shall, based upon the 
classifications and standardized methodologies and procedures developed 
by the Advisory Committee on Health Workforce Evaluation and Assessment 
under section 764(b)--
            ``(1) collect data on the health workforce (as defined in 
        section 764(i)), disaggregated by field, discipline, and 
        specialty, with respect to--
                    ``(A) the supply (including retention) of health 
                professionals relative to the demand for such 
                professionals;
                    ``(B) the diversity of health professionals 
                (including with respect to race, ethnic background, and 
                gender); and
                    ``(C) the geographic distribution of health 
                professionals; and
            ``(2) collect such data on individuals participating in the 
        programs authorized by subtitles A, B, and C and part 1 of 
        subtitle D of title II of subdivision C of the America's 
        Affordable Health Choices Act of 2009.
    ``(b) Grants and Contracts for Health Workforce Analysis.--
            ``(1) In general.--The Secretary may award grants or 
        contracts to eligible entities to carry out subsection (a).
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under this subsection, an entity shall be--
                    ``(A) an accredited health professions school or 
                program;
                    ``(B) an academic health center;
                    ``(C) a State, local, or tribal government;
                    ``(D) a public or private entity; or
                    ``(E) a consortium of 2 or more entities described 
                in subparagraphs (A) through (D).
    ``(c) Collaboration and Data Sharing.--The Secretary shall 
collaborate with Federal departments and agencies, health professions 
organizations (including health professions education organizations), 
and professional medical societies for the purpose of carrying out 
subsection (a).
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the data collected under subsection (a).''.
    (b) Period Before Completion of National Strategy.--Pending 
completion of the classifications and standardized methodologies and 
procedures developed by the Advisory Committee on Health Workforce 
Evaluation and Assessment under section 764(b) of the Public Health 
Service Act, as added by section 2261, the Secretary of Health and 
Human Services, acting through the Administrator of the Health 
Resources and Services Administration and in consultation with such 
Advisory Committee, may make a judgment about the classifications, 
methodologies, and procedures to be used for collection of data under 
section 761(a) of the Public Health Service Act, as amended by this 
section.

                PART 5--AUTHORIZATION OF APPROPRIATIONS

SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 799C, as added by section 2216 of this 
division, is amended by adding at the end the following:
    ``(c) Health Professions Training for Diversity.--For the purpose 
of carrying out sections 736, 737, 738, 739, and 739A, in addition to 
any other amounts authorized to be appropriated for such purpose, there 
are authorized to be appropriated, out of any monies in the Public 
Health Investment Fund, the following:
            ``(1) $90,000,000 for fiscal year 2010.
            ``(2) $97,000,000 for fiscal year 2011.
            ``(3) $100,000,000 for fiscal year 2012.
            ``(4) $104,000,000 for fiscal year 2013.
            ``(5) $110,000,000 for fiscal year 2014.
            ``(6) $116,000,000 for fiscal year 2015.
            ``(7) $121,000,000 for fiscal year 2016.
            ``(8) $127,000,000 for fiscal year 2017.
            ``(9) $133,000,000 for fiscal year 2018.
            ``(10) $140,000,000 for fiscal year 2019.
    ``(d) Interdisciplinary Training Programs, Advisory Committee on 
Health Workforce Evaluation and Assessment, and Health Workforce 
Assessment.--For the purpose of carrying out sections 741, 759, 761, 
and 764, in addition to any other amounts authorized to be appropriated 
for such purpose, there are authorized to be appropriated, out of any 
monies in the Public Health Investment Fund, the following:
            ``(1) $91,000,000 for fiscal year 2010.
            ``(2) $97,000,000 for fiscal year 2011.
            ``(3) $101,000,000 for fiscal year 2012.
            ``(4) $105,000,000 for fiscal year 2013.
            ``(5) $111,000,000 for fiscal year 2014.
            ``(6) $117,000,000 for fiscal year 2015.
            ``(7) $122,000,000 for fiscal year 2016.
            ``(8) $129,000,000 for fiscal year 2017.
            ``(9) $135,000,000 for fiscal year 2018.
            ``(10) $141,000,000 for fiscal year 2019.''.
    (b) Existing Authorizations of Appropriations.--
            (1) Section 736.--Paragraph (1) of section 736(h) (42 
        U.S.C. 293(h)) is amended by striking ``2002'' and inserting 
        ``2019''.
            (2) Sections 737, 738, and 739.--Subsections (a), (b), and 
        (c) of section 740 are amended by striking ``2002'' each place 
        it appears and inserting ``2019''.
            (3) Section 741.--Subsection (h), as so redesignated, of 
        section 741 is amended--
                    (A) by striking ``and'' after ``fiscal year 
                2003,''; and
                    (B) by inserting ``, and such sums as may be 
                necessary for subsequent fiscal years through the end 
                of fiscal year 2019'' before the period at the end.
            (4) Section 761.--Subsection (e)(1), as so redesignated, of 
        section 761 is amended by striking ``2002'' and inserting 
        ``2019''.

                   TITLE III--PREVENTION AND WELLNESS

SEC. 2301. PREVENTION AND WELLNESS.

    (a) In General.--The Public Health Service Act (42 U.S.C. 201 et 
seq.) is amended by adding at the end the following:

                 ``TITLE XXXI--PREVENTION AND WELLNESS

              ``Subtitle A--Prevention and Wellness Trust

``SEC. 3111. PREVENTION AND WELLNESS TRUST.

    ``(a) Deposits Into Trust.--There is established a Prevention and 
Wellness Trust. There are authorized to be appropriated to the Trust--
            ``(1) amounts described in section 2002(b)(2)(ii) of the 
        America's Affordable Health Choices Act of 2009 for each fiscal 
        year; and
            ``(2) in addition, out of any monies in the Public Health 
        Investment Fund--
                    ``(A) for fiscal year 2010, $2,400,000,000;
                    ``(B) for fiscal year 2011, $2,800,000,000;
                    ``(C) for fiscal year 2012, $3,100,000,000;
                    ``(D) for fiscal year 2013, $3,400,000,000;
                    ``(E) for fiscal year 2014, $3,500,000,000;
                    ``(F) for fiscal year 2015, $3,600,000,000;
                    ``(G) for fiscal year 2016, $3,700,000,000;
                    ``(H) for fiscal year 2017, $3,900,000,000;
                    ``(I) for fiscal year 2018, $4,300,000,000; and
                    ``(J) for fiscal year 2019, $4,600,000,000.
    ``(b) Availability of Funds.--Amounts in the Prevention and 
Wellness Trust shall be available, as provided in advance in 
appropriation Acts, for carrying out this title.
    ``(c) Allocation.--Of the amounts authorized to be appropriated in 
subsection (a)(2), there are authorized to be appropriated--
            ``(1) for carrying out subtitle C (Prevention Task Forces), 
        $35,000,000 for each of fiscal years 2010 through 2019;
            ``(2) for carrying out subtitle D (Prevention and Wellness 
        Research)--
                    ``(A) for fiscal year 2010, $100,000,000;
                    ``(B) for fiscal year 2011, $150,000,000;
                    ``(C) for fiscal year 2012, $200,000,000;
                    ``(D) for fiscal year 2013, $250,000,000;
                    ``(E) for fiscal year 2014, $300,000,000;
                    ``(F) for fiscal year 2015, $315,000,000;
                    ``(G) for fiscal year 2016, $331,000,000;
                    ``(H) for fiscal year 2017, $347,000,000;
                    ``(I) for fiscal year 2018, $364,000,000; and
                    ``(J) for fiscal year 2019, $383,000,000.
            ``(3) for carrying out subtitle E (Delivery of Community 
        Preventive and Wellness Services)--
                    ``(A) for fiscal year 2010, $1,100,000,000;
                    ``(B) for fiscal year 2011, $1,300,000,000;
                    ``(C) for fiscal year 2012, $1,400,000,000;
                    ``(D) for fiscal year 2013, $1,600,000,000;
                    ``(E) for fiscal year 2014, $1,700,000,000;
                    ``(F) for fiscal year 2015, $1,800,000,000;
                    ``(G) for fiscal year 2016, $1,900,000,000;
                    ``(H) for fiscal year 2017, $2,000,000,000;
                    ``(I) for fiscal year 2018, $2,100,000,000; and
                    ``(J) for fiscal year 2019, $2,300,000,000.
            ``(4) for carrying out section 3161 (Core Public Health 
        Infrastructure and Activities for State and Local Health 
        Departments)--
                    ``(A) for fiscal year 2010, $800,000,000;
                    ``(B) for fiscal year 2011, $1,000,000,000;
                    ``(C) for fiscal year 2012, $1,100,000,000;
                    ``(D) for fiscal year 2013, $1,200,000,000;
                    ``(E) for fiscal year 2014, $1,300,000,000;
                    ``(F) for fiscal year 2015, $1,400,000,000;
                    ``(G) for fiscal year 2016, $1,500,000,000;
                    ``(H) for fiscal year 2017, $1,600,000,000;
                    ``(I) for fiscal year 2018, $1,800,000,000; and
                    ``(J) for fiscal year 2019, $1,900,000,000; and
            ``(5) for carrying out section 3162 (Core Public Health 
        Infrastructure and Activities for CDC), $400,000,000 for each 
        of fiscal years 2010 through 2019.

        ``Subtitle B--National Prevention and Wellness Strategy

``SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRATEGY.

    ``(a) In General.--The Secretary shall submit to the Congress 
within one year after the date of the enactment of this section, and at 
least every 2 years thereafter, a national strategy that is designed to 
improve the Nation's health through evidence-based clinical and 
community prevention and wellness activities (in this section referred 
to as `prevention and wellness activities'), including core public 
health infrastructure improvement activities.
    ``(b) Contents.--The strategy under subsection (a) shall include 
each of the following:
            ``(1) Identification of specific national goals and 
        objectives in prevention and wellness activities that take into 
        account appropriate public health measures and standards, 
        including departmental measures and standards (including 
        Healthy People and National Public Health Performance 
        Standards).
            ``(2) Establishment of national priorities for prevention 
        and wellness, taking into account unmet prevention and wellness 
        needs.
            ``(3) Establishment of national priorities for research on 
        prevention and wellness, taking into account unanswered 
        research questions on prevention and wellness.
            ``(4) Identification of health disparities in prevention 
        and wellness.
            ``(5) A plan for addressing and implementing paragraphs (1) 
        through (4).
    ``(c) Consultation.--In developing or revising the strategy under 
subsection (a), the Secretary shall consult with the following:
            ``(1) The heads of appropriate health agencies and offices 
        in the Department, including the Office of the Surgeon General 
        of the Public Health Service, the Office of Minority Health, 
        and the Office on Women's Health.
            ``(2) As appropriate, the heads of other Federal 
        departments and agencies whose programs have a significant 
        impact upon health (as determined by the Secretary).
            ``(3) As appropriate, nonprofit and for-profit entities.
            ``(4) The Association of State and Territorial Health 
        Officials and the National Association of County and City 
        Health Officials.

                  ``Subtitle C--Prevention Task Forces

``SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERVICES.

    ``(a) In General.--The Secretary, acting through the Director of 
the Agency for Healthcare Research and Quality, shall establish a 
permanent task force to be known as the Task Force on Clinical 
Preventive Services (in this section referred to as the `Task Force').
    ``(b) Responsibilities.--The Task Force shall--
            ``(1) identify clinical preventive services for review;
            ``(2) review the scientific evidence related to the 
        benefits, effectiveness, appropriateness, and costs of clinical 
        preventive services identified under paragraph (1) for the 
        purpose of developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(3) as appropriate, take into account health disparities 
        in developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(4) identify gaps in clinical preventive services 
        research and evaluation and recommend priority areas for such 
        research and evaluation;
            ``(5) as appropriate, consult with the clinical prevention 
        stakeholders board in accordance with subsection (f);
            ``(6) as appropriate, consult with the Task Force on 
        Community Preventive Services established under section 3132; 
        and
            ``(7) as appropriate, in carrying out this section, 
        consider the national strategy under section 3121.
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Task Force shall be 
        composed of 30 members, appointed by the Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Task Force for a term of 6 years and may 
                reappoint such members, but the Secretary may not 
                appoint any member to serve more than a total of 12 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to 
                serve on the Task Force after the enactment of this 
                title--
                            ``(i) 10 shall be appointed for a term of 2 
                        years;
                            ``(ii) 10 shall be appointed for a term of 
                        4 years; and
                            ``(iii) 10 shall be appointed for a term of 
                        6 years.
            ``(3) Qualifications.--Members of the Task Force shall be 
        appointed from among individuals who possess expertise in at 
        least one of the following areas:
                    ``(A) Health promotion and disease prevention.
                    ``(B) Evaluation of research and systematic 
                evidence reviews.
                    ``(C) Application of systematic evidence reviews to 
                clinical decisionmaking or health policy.
                    ``(D) Clinical primary care in child and adolescent 
                health.
                    ``(E) Clinical primary care in adult health, 
                including women's health.
                    ``(F) Clinical primary care in geriatrics.
                    ``(G) Clinical counseling and behavioral services 
                for primary care patients.
            ``(4) Representation.--In appointing members of the Task 
        Force, the Secretary shall ensure that--
                    ``(A) all areas of expertise described in paragraph 
                (3) are represented; and
                    ``(B) the members of the Task Force include 
                practitioners who, collectively, have significant 
                experience treating racially and ethnically diverse 
                populations.
    ``(e) Subgroups.--As appropriate to maximize efficiency, the Task 
Force may delegate authority for conducting reviews and making 
recommendations to subgroups consisting of Task Force members, subject 
to final approval by the Task Force.
    ``(f) Clinical Prevention Stakeholders Board.--
            ``(1) In general.--The Task Force shall convene a clinical 
        prevention stakeholders board composed of representatives of 
        appropriate public and private entities with an interest in 
        clinical preventive services to advise the Task Force on 
        developing, updating, publishing, and disseminating evidence-
        based recommendations on the use of clinical preventive 
        services.
            ``(2) Membership.--The members of the clinical prevention 
        stakeholders board shall include representatives of the 
        following:
                    ``(A) Health care consumers and patient groups.
                    ``(B) Providers of clinical preventive services, 
                including community-based providers.
                    ``(C) Federal departments and agencies, including--
                            ``(i) appropriate health agencies and 
                        offices in the Department, including the Office 
                        of the Surgeon General of the Public Health 
                        Service, the Office of Minority Health, and the 
                        Office on Women's Health; and
                            ``(ii) as appropriate, other Federal 
                        departments and agencies whose programs have a 
                        significant impact upon health (as determined 
                        by the Secretary).
                    ``(D) Private health care payors.
            ``(3) Responsibilities.--In accordance with subsection 
        (b)(5), the clinical prevention stakeholders board shall--
                    ``(A) recommend clinical preventive services for 
                review by the Task Force;
                    ``(B) suggest scientific evidence for consideration 
                by the Task Force related to reviews undertaken by the 
                Task Force;
                    ``(C) provide feedback regarding draft 
                recommendations by the Task Force; and
                    ``(D) assist with efforts regarding dissemination 
                of recommendations by the Director of the Agency for 
                Healthcare Research and Quality.
    ``(g) Disclosure and Conflicts of Interest.--Members of the Task 
Force or the clinical prevention stakeholders board shall not be 
considered employees of the Federal Government by reason of service on 
the Task Force, except members of the Task Force shall be considered to 
be special Government employees within the meaning of section 107 of 
the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of 
title 18, United States Code, for the purposes of disclosure and 
management of conflicts of interest under those sections.
    ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task 
Force or the clinical prevention stakeholders board shall not receive 
any pay for service on the Task Force, but may receive travel expenses, 
including a per diem, in accordance with applicable provisions of 
subchapter I of chapter 57 of title 5, United States Code.
    ``(i) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) except for section 14 of such Act shall apply to the Task 
Force to the extent that the provisions of such Act do not conflict 
with the provisions of this title.
    ``(j) Report.--The Secretary shall submit to the Congress an annual 
report on the Task Force, including with respect to gaps identified and 
recommendations made under subsection (b)(4).

``SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE SERVICES.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall establish a 
permanent task force to be known as the Task Force on Community 
Preventive Services (in this section referred to as the `Task Force').
    ``(b) Responsibilities.--The Task Force shall--
            ``(1) identify community preventive services for review;
            ``(2) review the scientific evidence related to the 
        benefits, effectiveness, appropriateness, and costs of 
        community preventive services identified under paragraph (1) 
        for the purpose of developing, updating, publishing, and 
        disseminating evidence-based recommendations on the use of such 
        services;
            ``(3) as appropriate, take into account health disparities 
        in developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(4) identify gaps in community preventive services 
        research and evaluation and recommend priority areas for such 
        research and evaluation;
            ``(5) as appropriate, consult with the community prevention 
        stakeholders board in accordance with subsection (f);
            ``(6) as appropriate, consult with the Task Force on 
        Clinical Preventive Services established under section 3131; 
        and
            ``(7) as appropriate, in carrying out this section, 
        consider the national strategy under section 3121.
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Task Force shall be 
        composed of 30 members, appointed by the Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Task Force for a term of 6 years and may 
                reappoint such members, but the Secretary may not 
                appoint any member to serve more than a total of 12 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to 
                serve on the Task Force after the enactment of this 
                section--
                            ``(i) 10 shall be appointed for a term of 2 
                        years;
                            ``(ii) 10 shall be appointed for a term of 
                        4 years; and
                            ``(iii) 10 shall be appointed for a term of 
                        6 years.
            ``(3) Qualifications.--Members of the Task Force shall be 
        appointed from among individuals who possess expertise in at 
        least one of the following areas:
                    ``(A) Public health.
                    ``(B) Evaluation of research and systematic 
                evidence reviews.
                    ``(C) Disciplines relevant to community preventive 
                services, including health promotion; disease 
                prevention; chronic disease; worksite health; 
                qualitative and quantitative analysis; and health 
                economics, policy, law, and statistics.
            ``(4) Representation.--In appointing members of the Task 
        Force, the Secretary--
                    ``(A) shall ensure that all areas of expertise 
                described in paragraph (3) are represented;
                    ``(B) shall ensure that such members include 
                sufficient representatives of each of--
                            ``(i) State health officers;
                            ``(ii) local health officers;
                            ``(iii) health care practitioners; and
                            ``(iv) public health practitioners; and
                    ``(C) shall appoint individuals who, collectively, 
                have significant experience working with racially and 
                ethnically diverse populations.
    ``(e) Subgroups.--As appropriate to maximize efficiency, the Task 
Force may delegate authority for conducting reviews and making 
recommendations to subgroups consisting of Task Force members, subject 
to final approval by the Task Force.
    ``(f) Community Prevention Stakeholders Board.--
            ``(1) In general.--The Task Force shall convene a community 
        prevention stakeholders board composed of representatives of 
        appropriate public and private entities with an interest in 
        community preventive services to advise the Task Force on 
        developing, updating, publishing, and disseminating evidence-
        based recommendations on the use of community preventive 
        services.
            ``(2) Membership.--The members of the community prevention 
        stakeholders board shall include representatives of the 
        following:
                    ``(A) Health care consumers and patient groups.
                    ``(B) Providers of community preventive services, 
                including community-based providers.
                    ``(C) Federal departments and agencies, including--
                            ``(i) appropriate health agencies and 
                        offices in the Department, including the Office 
                        of the Surgeon General of the Public Health 
                        Service, the Office of Minority Health, and the 
                        Office on Women's Health; and
                            ``(ii) as appropriate, other Federal 
                        departments and agencies whose programs have a 
                        significant impact upon health (as determined 
                        by the Secretary).
                    ``(D) Private health care payors.
            ``(3) Responsibilities.--In accordance with subsection 
        (b)(5), the community prevention stakeholders board shall--
                    ``(A) recommend community preventive services for 
                review by the Task Force;
                    ``(B) suggest scientific evidence for consideration 
                by the Task Force related to reviews undertaken by the 
                Task Force;
                    ``(C) provide feedback regarding draft 
                recommendations by the Task Force; and
                    ``(D) assist with efforts regarding dissemination 
                of recommendations by the Director of the Centers for 
                Disease Control and Prevention.
    ``(g) Disclosure and Conflicts of Interest.--Members of the Task 
Force or the community prevention stakeholders board shall not be 
considered employees of the Federal Government by reason of service on 
the Task Force, except members of the Task Force shall be considered to 
be special Government employees within the meaning of section 107 of 
the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of 
title 18, United States Code, for the purposes of disclosure and 
management of conflicts of interest under those sections.
    ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task 
Force or the community prevention stakeholders board shall not receive 
any pay for service on the Task Force, but may receive travel expenses, 
including a per diem, in accordance with applicable provisions of 
subchapter I of chapter 57 of title 5, United States Code.
    ``(i) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) except for section 14 of such Act shall apply to the Task 
Force to the extent that the provisions of such Act do not conflict 
with the provisions of this title.
    ``(j) Report.--The Secretary shall submit to the Congress an annual 
report on the Task Force, including with respect to gaps identified and 
recommendations made under subsection (b)(4).

             ``Subtitle D--Prevention and Wellness Research

``SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIVITY COORDINATION.

    ``In conducting or supporting research on prevention and wellness, 
the Director of the Centers for Disease Control and Prevention, the 
Director of the National Institutes of Health, and the heads of other 
agencies within the Department of Health and Human Services conducting 
or supporting such research, shall take into consideration the national 
strategy under section 3121 and the recommendations of the Task Force 
on Clinical Preventive Services under section 3131 and the Task Force 
on Community Preventive Services under section 3132.

``SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCH GRANTS.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall conduct, or award 
grants to eligible entities to conduct, research in priority areas 
identified by the Secretary in the national strategy under section 3121 
or by the Task Force on Community Preventive Services as required by 
section 3132.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall be--
            ``(1) a State, local, or tribal department of health;
            ``(2) a public or private nonprofit entity; or
            ``(3) a consortium of 2 or more entities described in 
        paragraphs (1) and (2).
    ``(c) Report.--The Secretary shall submit to the Congress an annual 
report on the program of research under this section.

  ``Subtitle E--Delivery of Community Prevention and Wellness Services

``SEC. 3151. COMMUNITY PREVENTION AND WELLNESS SERVICES GRANTS.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall establish a 
program for the delivery of community preventive and wellness services 
consisting of awarding grants to eligible entities--
            ``(1) to provide evidence-based, community preventive and 
        wellness services in priority areas identified by the Secretary 
        in the national strategy under section 3121; or
            ``(2) to plan such services.
    ``(b) Eligibility.--
            ``(1) Definition.--To be eligible for a grant under this 
        section, an entity shall be--
                    ``(A) a State, local, or tribal department of 
                health;
                    ``(B) a public or private entity; or
                    ``(C) a consortium of--
                            ``(i) 2 or more entities described in 
                        subparagraph (A) or (B); and
                            ``(ii) a community partnership representing 
                        a Health Empowerment Zone.
            ``(2) Health empowerment zone.--In this subsection, the 
        term `Health Empowerment Zone' means an area--
                    ``(A) in which multiple community preventive and 
                wellness services are implemented in order to address 
                one or more health disparities, including those 
                identified by the Secretary in the national strategy 
                under section 3121; and
                    ``(B) which is represented by a community 
                partnership that demonstrates community support and 
                coordination with State, local, or tribal health 
                departments and includes--
                            ``(i) a broad cross section of 
                        stakeholders;
                            ``(ii) residents of the community; and
                            ``(iii) representatives of entities that 
                        have a history of working within and serving 
                        the community.
    ``(c) Preferences.--In awarding grants under this section, the 
Secretary shall give preference to entities that--
            ``(1) will address one or more goals or objectives 
        identified by the Secretary in the national strategy under 
        section 3121;
            ``(2) will address significant health disparities, 
        including those identified by the Secretary in the national 
        strategy under section 3121;
            ``(3) will address unmet community prevention needs and 
        avoids duplication of effort;
            ``(4) have been demonstrated to be effective in communities 
        comparable to the proposed target community;
            ``(5) will contribute to the evidence base for community 
        preventive and wellness services;
            ``(6) demonstrate that the community preventive services to 
        be funded will be sustainable; and
            ``(7) demonstrate coordination or collaboration across 
        governmental and nongovernmental partners.
    ``(d) Health Disparities.--Of the funds awarded under this section 
for a fiscal year, the Secretary shall award not less than 50 percent 
for planning or implementing community preventive and wellness services 
whose primary purpose is to achieve a measurable reduction in one or 
more health disparities, including those identified by the Secretary in 
the national strategy under section 3121.
    ``(e) Emphasis on Recommended Services.--For fiscal year 2013 and 
subsequent fiscal years, the Secretary shall award grants under this 
section only for planning or implementing services recommended by the 
Task Force on Community Preventive Services under section 3122 or 
deemed effective based on a review of comparable rigor (as determined 
by the Director of the Centers for Disease Control and Prevention).
    ``(f) Prohibited Uses of Funds.--An entity that receives a grant 
under this section may not use funds provided through the grant--
            ``(1) to build or acquire real property or for 
        construction; or
            ``(2) for services or planning to the extent that payment 
        has been made, or can reasonably be expected to be made--
                    ``(A) under any insurance policy;
                    ``(B) under any Federal or State health benefits 
                program (including titles XIX and XXI of the Social 
                Security Act); or
                    ``(C) by an entity which provides health services 
                on a prepaid basis.
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program of grants awarded under this section.
    ``(h) Definitions.--In this section, the term `evidence-based' 
means that methodologically sound research has demonstrated a 
beneficial health effect, in the judgment of the Director of the 
Centers for Disease Control and Prevention.

            ``Subtitle F--Core Public Health Infrastructure

``SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR STATE, LOCAL, AND 
              TRIBAL HEALTH DEPARTMENTS.

    ``(a) Program.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention shall establish a core 
public health infrastructure program consisting of awarding grants 
under subsection (b).
    ``(b) Grants.--
            ``(1) Award.--For the purpose of addressing core public 
        health infrastructure needs, the Secretary--
                    ``(A) shall award a grant to each State health 
                department; and
                    ``(B) may award grants on a competitive basis to 
                State, local, or tribal health departments.
            ``(2) Allocation.--Of the total amount of funds awarded as 
        grants under this subsection for a fiscal year--
                    ``(A) not less than 50 percent shall be for grants 
                to State health departments under paragraph (1)(A); and
                    ``(B) not less than 30 percent shall be for grants 
                to State, local, or tribal health departments under 
                paragraph (1)(B).
    ``(c) Use of Funds.--The Secretary may award a grant to an entity 
under subsection (b)(1) only if the entity agrees to use the grant to 
address core public health infrastructure needs, including those 
identified in the accreditation process under subsection (g).
    ``(d) Formula Grants to State Health Departments.--In making grants 
under subsection (b)(1)(A), the Secretary shall award funds to each 
State health department in accordance with--
            ``(1) a formula based on population size; burden of 
        preventable disease and disability; and core public health 
        infrastructure gaps, including those identified in the 
        accreditation process under subsection (g); and
            ``(2) application requirements established by the 
        Secretary, including a requirement that the State submit a plan 
        that demonstrates to the satisfaction of the Secretary that the 
        State's health department will--
                    ``(A) address its highest priority core public 
                health infrastructure needs; and
                    ``(B) as appropriate, allocate funds to local 
                health departments within the State.
    ``(e) Competitive Grants to State, Local, and Tribal Health 
Departments.--In making grants under subsection (b)(1)(B), the 
Secretary shall give priority to applicants demonstrating core public 
health infrastructure needs identified in the accreditation process 
under subsection (g).
    ``(f) Maintenance of Effort.--The Secretary may award a grant to an 
entity under subsection (b) only if the entity demonstrates to the 
satisfaction of the Secretary that--
            ``(1) funds received through the grant will be expended 
        only to supplement, and not supplant, non-Federal and Federal 
        funds otherwise available to the entity for the purpose of 
        addressing core public health infrastructure needs; and
            ``(2) with respect to activities for which the grant is 
        awarded, the entity will maintain expenditures of non-Federal 
        amounts for such activities at a level not less than the level 
        of such expenditures maintained by the entity for the fiscal 
        year preceding the fiscal year for which the entity receives 
        the grant.
    ``(g) Establishment of a Public Health Accreditation Program.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall--
                    ``(A) develop, and periodically review and update, 
                standards for voluntary accreditation of State, local, 
                or tribal health departments and public health 
                laboratories for the purpose of advancing the quality 
                and performance of such departments and laboratories; 
                and
                    ``(B) implement a program to accredit such health 
                departments and laboratories in accordance with such 
                standards.
            ``(2) Cooperative agreement.--The Secretary may enter into 
        a cooperative agreement with a private nonprofit entity to 
        carry out paragraph (1).
    ``(h) Report.--The Secretary shall submit to the Congress an annual 
report on progress being made to accredit entities under subsection 
(g), including--
            ``(1) a strategy, including goals and objectives, for 
        accrediting entities under subsection (g) and achieving the 
        purpose described in subsection (g)(1); and
            ``(2) identification of gaps in research related to core 
        public health infrastructure and recommendations of priority 
        areas for such research.

``SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND ACTIVITIES FOR CDC.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall expand and 
improve the core public health infrastructure and activities of the 
Centers for Disease Control and Prevention to address unmet and 
emerging public health needs.
    ``(b) Report.--The Secretary shall submit to the Congress an annual 
report on the activities funded through this section.

                    ``Subtitle G--General Provisions

``SEC. 3171. DEFINITIONS.

    ``In this title:
            ``(1) The term `core public health infrastructure' includes 
        workforce capacity and competency; laboratory systems; health 
        information, health information systems, and health information 
        analysis; communications; financing; other relevant components 
        of organizational capacity; and other related activities.
            ``(2) The terms `Department' and `departmental' refer to 
        the Department of Health and Human Services.
            ``(3) The term `health disparities' includes health and 
        health care disparities and means population-specific 
        differences in the presence of disease, health outcomes, or 
        access to health care. For purposes of the preceding sentence, 
        a population may be delineated by race, ethnicity, geographic 
        setting, or other population or subpopulation determined 
        appropriate by the Secretary.
            ``(4) The term `tribal' refers to an Indian tribe, a Tribal 
        organization, or an Urban Indian organization, as such terms 
        are defined in section 4 of the Indian Health Care Improvement 
        Act.''.
    (b) Transition Provisions Applicable to Task Forces.--
            (1) Functions, personnel, assets, liabilities, and 
        administrative actions.--All functions, personnel, assets, and 
        liabilities of, and administrative actions applicable to, the 
        Preventive Services Task Force convened under section 915(a) of 
        the Public Health Service Act and the Task Force on Community 
        Preventive Services (as such section and Task Forces were in 
        existence on the day before the date of the enactment of this 
        Act) shall be transferred to the Task Force on Clinical 
        Preventive Services and the Task Force on Community Preventive 
        Services, respectively, established under sections 3121 and 
        3122 of the Public Health Service Act, as added by subsection 
        (a).
            (2) Recommendations.--All recommendations of the Preventive 
        Services Task Force and the Task Force on Community Preventive 
        Services, as in existence on the day before the date of the 
        enactment of this Act, shall be considered to be 
        recommendations of the Task Force on Clinical Preventive 
        Services and the Task Force on Community Preventive Services, 
        respectively, established under sections 3121 and 3122 of the 
        Public Health Service Act, as added by subsection (a).
            (3) Members already serving.--
                    (A) Initial members.--The Secretary of Health and 
                Human Services may select those individuals already 
                serving on the Preventive Services Task Force and the 
                Task Force on Community Preventive Services, as in 
                existence on the day before the date of the enactment 
                of this Act, to be among the first members appointed to 
                the Task Force on Clinical Preventive Services and the 
                Task Force on Community Preventive Services, 
                respectively, under sections 3121 and 3122 of the 
                Public Health Service Act, as added by subsection (a).
                    (B) Calculation of total service.--In calculating 
                the total years of service of a member of a task force 
                for purposes of section 3131(d)(2)(A) or 3132(d)(2)(A) 
                of the Public Health Service Act, as added by 
                subsection (a), the Secretary of Health and Human 
                Services shall not include any period of service by the 
                member on the Preventive Services Task Force or the 
                Task Force on Community Preventive Services, 
                respectively, as in existence on the day before the 
                date of the enactment of this Act.
    (c) Period Before Completion of National Strategy.--Pending 
completion of the national strategy under section 3121 of the Public 
Health Service Act, as added by subsection (a), the Secretary of Health 
and Human Services, acting through the relevant agency head, may make a 
judgment about how the strategy will address an issue and rely on such 
judgment in carrying out any provision of subtitle C, D, E, or F of 
title XXXI of such Act, as added by subsection (a), that requires the 
Secretary--
            (1) to take into consideration such strategy;
            (2) to conduct or support research or provide services in 
        priority areas identified in such strategy; or
            (3) to take any other action in reliance on such strategy.
    (d) Conforming Amendments.--
            (1) Paragraph (61) of section 3(b) of the Indian Health 
        Care Improvement Act (25 U.S.C. 1602) is amended by striking 
        ``United States Preventive Services Task Force'' and inserting 
        ``Task Force on Clinical Preventive Services''.
            (2) Section 126 of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (Appendix F of 
        Public Law 106-554) is amended by striking ``United States 
        Preventive Services Task Force'' each place it appears and 
        inserting ``Task Force on Clinical Preventive Services''.
            (3) Paragraph (7) of section 317D of the Public Health 
        Service Act (42 U.S.C. 247b-5) is amended by striking ``United 
        States Preventive Services Task Force'' each place it appears 
        and inserting ``Task Force on Clinical Preventive Services''.
            (4) Section 915 of the Public Health Service Act (42 U.S.C. 
        299b-4) is amended by striking subsection (a).
            (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and 
        (ddd)(1)(B) of section 1861 of the Social Security Act (42 
        U.S.C. 1395x) are amended by striking ``United States 
        Preventive Services Task Force'' each place it appears and 
        inserting ``Task Force on Clinical Preventive Services''.

                   TITLE IV--QUALITY AND SURVEILLANCE

SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH 
              CARE.

    (a) In General.--Title IX of the Public Health Service Act (42 
U.S.C. 299 et seq.) is amended--
            (1) by redesignating part D as part E;
            (2) by redesignating sections 931 through 938 as sections 
        941 through 948, respectively;
            (3) in section 938(1), by striking ``931'' and inserting 
        ``941''; and
            (4) by inserting after part C the following:

 ``PART D--IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH 
                                  CARE

``SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

    ``(a) In General.--There is established the Center for Quality 
Improvement (referred to in this part as the `Center'), to be headed by 
the Director.
    ``(b) Prioritization.--
            ``(1) In general.--The Director shall prioritize areas for 
        the identification, development, evaluation, and implementation 
        of best practices (including innovative methodologies and 
        strategies) for quality improvement activities in the delivery 
        of health care services (in this section referred to as `best 
        practices').
            ``(2) Considerations.--In prioritizing areas under 
        paragraph (1), the Director shall consider--
                    ``(A) the priorities established under section 1191 
                of the Social Security Act; and
                    ``(B) the key health indicators identified by the 
                Assistant Secretary for Health Information under 
                section 1709.
    ``(c) Other Responsibilities.--The Director, acting directly or by 
awarding a grant or contract to an eligible entity, shall--
            ``(1) identify existing best practices under subsection 
        (e);
            ``(2) develop new best practices under subsection (f);
            ``(3) evaluate best practices under subsection (g);
            ``(4) implement best practices under subsection (h);
            ``(5) ensure that best practices are identified, developed, 
        evaluated, and implemented under this section consistent with 
        standards adopted by the Secretary under section 3004 for 
        health information technology used in the collection and 
        reporting of quality information (including for purposes of the 
        demonstration of meaningful use of certified electronic health 
        record (EHR) technology by physicians and hospitals under the 
        Medicare program (under sections 1848(o)(2) and 1886(n)(3), 
        respectively, of the Social Security Act)); and
            ``(6) provide for dissemination of information and 
        reporting under subsections (i) and (j).
    ``(d) Eligibility.--To be eligible for a grant or contract under 
subsection (c), an entity shall--
            ``(1) be a nonprofit entity;
            ``(2) agree to work with a variety of institutional health 
        care providers, physicians, nurses, and other health care 
        practitioners; and
            ``(3) if the entity is not the organization holding a 
        contract under section 1153 of the Social Security Act for the 
        area to be served, agree to cooperate with and avoid 
        duplication of the activities of such organization.
    ``(e) Identifying Existing Best Practices.--The Secretary shall 
identify best practices that are--
            ``(1) currently utilized by health care providers 
        (including hospitals, physician and other clinician practices, 
        community cooperatives, and other health care entities) that 
        deliver consistently high-quality, efficient health care 
        services; and
            ``(2) easily adapted for use by other health care providers 
        and for use across a variety of health care settings.
    ``(f) Developing New Best Practices.--The Secretary shall develop 
best practices that are--
            ``(1) based on a review of existing scientific evidence;
            ``(2) sufficiently detailed for implementation and 
        incorporation into the workflow of health care providers; and
            ``(3) designed to be easily adapted for use by health care 
        providers across a variety of health care settings.
    ``(g) Evaluation of Best Practices.--The Director shall evaluate 
best practices identified or developed under this section. Such 
evaluation--
            ``(1) shall include determinations of which best 
        practices--
                    ``(A) most reliably and effectively achieve 
                significant progress in improving the quality of 
                patient care; and
                    ``(B) are easily adapted for use by health care 
                providers across a variety of health care settings;
            ``(2) shall include regular review, updating, and 
        improvement of such best practices; and
            ``(3) may include in-depth case studies or empirical 
        assessments of health care providers (including hospitals, 
        physician and other clinician practices, community 
        cooperatives, and other health care entities) and simulations 
        of such best practices for determinations under paragraph (1).
    ``(h) Implementation of Best Practices.--
            ``(1) In general.--The Director shall enter into voluntary 
        arrangements with health care providers (including hospitals 
        and other health facilities and health practitioners) in a 
        State or region to implement best practices identified or 
        developed under this section. Such implementation--
                    ``(A) may include forming collaborative multi-
                institutional teams; and
                    ``(B) shall include an evaluation of the best 
                practices being implemented, including the measurement 
                of patient outcomes before, during, and after 
                implementation of such best practices.
            ``(2) Preferences.--In carrying out this subsection, the 
        Director shall give priority to health care providers 
        implementing best practices that--
                    ``(A) have the greatest impact on patient outcomes 
                and satisfaction;
                    ``(B) are the most easily adapted for use by health 
                care providers across a variety of health care 
                settings;
                    ``(C) promote coordination of health care 
                practitioners across the continuum of care; and
                    ``(D) engage patients and their families in 
                improving patient care and outcomes.
    ``(i) Public Dissemination of Information.--The Director shall 
provide for the public dissemination of information with respect to 
best practices and activities under this section. Such information 
shall be made available in appropriate formats and languages to reflect 
the varying needs of consumers and diverse levels of health literacy.
    ``(j) Report.--
            ``(1) In general.--The Director shall submit an annual 
        report to the Congress and the Secretary on activities under 
        this section.
            ``(2) Content.--Each report under paragraph (1) shall 
        include--
                    ``(A) information on activities conducted pursuant 
                to grants and contracts awarded;
                    ``(B) summary data on patient outcomes before, 
                during, and after implementation of best practices; and
                    ``(C) recommendations on the adaptability of best 
                practices for use by health providers.''.
    (b) Initial Quality Improvement Activities and Initiatives To Be 
Implemented.--Until the Director of the Agency for Healthcare Research 
and Quality has established initial priorities under section 931(b) of 
the Public Health Service Act, as added by subsection (a), the Director 
shall, for purposes of such section, prioritize the following:
            (1) Health care-associated infections.--Reducing health 
        care-associated infections, including infections in nursing 
        homes and outpatient settings.
            (2) Surgery.--Increasing hospital and outpatient 
        perioperative patient safety, including reducing surgical-site 
        infections and surgical errors (such as wrong-site surgery and 
        retained foreign bodies).
            (3) Emergency room.--Improving care in hospital emergency 
        rooms, including through the use of principles of efficiency of 
        design and delivery to improve patient flow.
            (4) Obstetrics.--Improving the provision of obstetrical and 
        neonatal care, including the identification of interventions 
        that are effective in reducing the risk of preterm and 
        premature labor and the implementation of best practices for 
        labor and delivery care.

SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

    (a) Establishment.--Title XVII (42 U.S.C. 300u et seq.) is 
amended--
            (1) by redesignating sections 1709 and 1710 as sections 
        1710 and 1711, respectively; and
            (2) by inserting after section 1708 the following:

``SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

    ``(a) In General.--There is established within the Department an 
Assistant Secretary for Health Information (in this section referred to 
as the `Assistant Secretary'), to be appointed by the Secretary.
    ``(b) Responsibilities.--The Assistant Secretary shall--
            ``(1) ensure the collection, collation, reporting, and 
        publishing of information (including full and complete 
        statistics) on key health indicators regarding the Nation's 
        health and the performance of the Nation's health care;
            ``(2) facilitate and coordinate the collection, collation, 
        reporting, and publishing of information regarding the Nation's 
        health and the performance of the Nation's health care (other 
        than information described in paragraph (1));
            ``(3)(A) develop standards for the collection of data 
        regarding the Nation's health and the performance of the 
        Nation's health care; and
            ``(B) in carrying out subparagraph (A)--
                    ``(i) ensure appropriate specificity and 
                standardization for data collection at the national, 
                regional, State, and local levels;
                    ``(ii) include standards, as appropriate, for the 
                collection of accurate data on health and health care 
                by race, ethnicity, primary language, sex, sexual 
                orientation, gender identity, disability, socioeconomic 
                status, rural, urban, or other geographic setting, and 
                any other population or subpopulation determined 
                appropriate by the Secretary;
                    ``(iii) ensure, with respect to data on race and 
                ethnicity, consistency with the 1997 Office of 
                Management and Budget Standards for Maintaining, 
                Collecting and Presenting Federal Data on Race and 
                Ethnicity (or any successor standards); and
                    ``(iv) in consultation with the Director of the 
                Office of Minority Health, and the Director of the 
                Office of Civil Rights, of the Department, develop 
                standards for the collection of data on health and 
                health care with respect to data on primary language;
            ``(4) provide support to Federal departments and agencies 
        whose programs have a significant impact upon health (as 
        determined by the Secretary) for the collection and collation 
        of information described in paragraphs (1) and (2);
            ``(5) ensure the sharing of information described in 
        paragraphs (1) and (2) among the agencies of the Department;
            ``(6) facilitate the sharing of information described in 
        paragraphs (1) and (2) by Federal departments and agencies 
        whose programs have a significant impact upon health (as 
        determined by the Secretary);
            ``(7) identify gaps in information described in paragraphs 
        (1) and (2) and the appropriate agency or entity to address 
        such gaps;
            ``(8) facilitate and coordinate identification and 
        monitoring by the agencies of the Department of health 
        disparities to inform program and policy efforts to reduce such 
        disparities, including facilitating and funding analyses 
        conducted in cooperation with the Social Security 
        Administration, the Bureau of the Census, and other appropriate 
        agencies and entities;
            ``(9) consistent with privacy, proprietary, and other 
        appropriate safeguards, facilitate public accessibility of 
        datasets (such as de-identified Medicare datasets or publicly 
        available data on key health indicators) by means of the 
        Internet; and
            ``(10) award grants or contracts for the collection and 
        collation of information described in paragraphs (1) and (2) 
        (including through statewide surveys that provide standardized 
        information).
    ``(c) Key Health Indicators.--
            ``(1) In general.--In carrying out subsection (b)(1), the 
        Assistant Secretary shall--
                    ``(A) identify, and reassess at least once every 3 
                years, key health indicators described in such 
                subsection;
                    ``(B) publish statistics on such key health 
                indicators for the public--
                            ``(i) not less than annually; and
                            ``(ii) on a supplemental basis whenever 
                        warranted by--
                                    ``(I) the rate of change for a key 
                                health indicator; or
                                    ``(II) the need to inform policy 
                                regarding the Nation's health and the 
                                performance of the Nation's health 
                                care; and
                    ``(C) ensure consistency with the national strategy 
                developed by the Secretary under section 3121 and 
                consideration of the indicators specified in the 
                reports under sections 308, 903(a)(6), and 913(b)(2).
            ``(2) Release of key health indicators.--The regulations, 
        rules, processes, and procedures of the Office of Management 
        and Budget governing the review, release, and dissemination of 
        key health indicators shall be the same as the regulations, 
        rules, processes, and procedures of the Office of Management 
        and Budget governing the review, release, and dissemination of 
        Principal Federal Economic Indicators (or equivalent 
        statistical data) by the Bureau of Labor Statistics.
    ``(d) Coordination.--In carrying out this section, the Assistant 
Secretary shall coordinate with--
            ``(1) public and private entities that collect and 
        disseminate information on health and health care, including 
        foundations; and
            ``(2) the head of the Office of the National Coordinator 
        for Health Information Technology to ensure optimal use of 
        health information technology.
    ``(e) Request for Information From Other Departments and 
Agencies.--Consistent with applicable law, the Assistant Secretary may 
secure directly from any Federal department or agency information 
necessary to enable the Assistant Secretary to carry out this section.
    ``(f) Report.--
            ``(1) Submission.--The Assistant Secretary shall submit to 
        the Secretary and the Congress an annual report containing--
                    ``(A) a description of national, regional, or State 
                changes in health or health care, as reflected by the 
                key health indicators identified under subsection 
                (c)(1);
                    ``(B) a description of gaps in the collection, 
                collation, reporting, and publishing of information 
                regarding the Nation's health and the performance of 
                the Nation's health care;
                    ``(C) recommendations for addressing such gaps and 
                identification of the appropriate agency within the 
                Department or other entity to address such gaps;
                    ``(D) a description of analyses of health 
                disparities, including the results of completed 
                analyses, the status of ongoing longitudinal studies, 
                and proposed or planned research; and
                    ``(E) a plan for actions to be taken by the 
                Assistant Secretary to address gaps described in 
                subparagraph (B).
            ``(2) Consideration.--In preparing a report under paragraph 
        (1), the Assistant Secretary shall take into consideration the 
        findings and conclusions in the reports under sections 308, 
        903(a)(6), and 913(b)(2).
    ``(g) Proprietary and Privacy Protections.--Nothing in this section 
shall be construed to affect applicable proprietary or privacy 
protections.
    ``(h) Consultation.--In carrying out this section, the Assistant 
Secretary shall consult with--
            ``(1) the heads of appropriate health agencies and offices 
        in the Department, including the Office of the Surgeon General 
        of the Public Health Service, the Office of Minority Health, 
        and the Office on Women's Health; and
            ``(2) as appropriate, the heads of other Federal 
        departments and agencies whose programs have a significant 
        impact upon health (as determined by the Secretary).
    ``(i) Definition.--In this section:
            ``(1) The terms `agency' and `agencies' include an 
        epidemiology center established under section 214 of the Indian 
        Health Care Improvement Act.
            ``(2) The term `Department' means the Department of Health 
        and Human Services.
            ``(3) The term `health disparities' has the meaning given 
        to such term in section 3171.''.
    (b) Other Coordination Responsibilities.--Title III (42 U.S.C. 241 
et seq.) is amended--
            (1) in paragraphs (1) and (2) of section 304(c) (42 U.S.C. 
        242b(c)), by inserting ``, acting through the Assistant 
        Secretary for Health Information,'' after ``The Secretary'' 
        each place it appears; and
            (2) in section 306(j) (42 U.S.C. 242k(j)), by inserting ``, 
        acting through the Assistant Secretary for Health 
        Information,'' after ``of this section, the Secretary''.

SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

    Section 799C, as added and amended, is further amended by adding at 
the end the following:
    ``(e) Quality and Surveillance.--For the purpose of carrying out 
part D of title IX and section 1709, in addition to any other amounts 
authorized to be appropriated for such purpose, there is authorized to 
be appropriated, out of any monies in the Public Health Investment 
Fund, $300,000,000 for each of fiscal years 2010 through 2014 and 
$330,000,000 for each of fiscal years 2015 through 2019.''.

                       TITLE V--OTHER PROVISIONS

        Subtitle A--Drug Discount for Rural and Other Hospitals

SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) (42 U.S.C. 256b(a)(4)) is amended by adding at the 
end the following:
                    ``(M) A children's hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(iii) of the Social Security Act which 
                would meet the requirements of subparagraph (L), 
                including the disproportionate share adjustment 
                percentage requirement under subparagraph (L)(ii), if 
                the hospital were a subsection (d) hospital as defined 
                in section 1886(d)(1)(B) of the Social Security Act.
                    ``(N) An entity that is a critical access hospital 
                (as determined under section 1820(c)(2) of the Social 
                Security Act).
                    ``(O) An entity receiving funds under title V of 
                the Social Security Act (relating to maternal and child 
                health) for the provision of health services.
                    ``(P) An entity receiving funds under subpart I of 
                part B of title XIX of the Public Health Service Act 
                (relating to comprehensive mental health services) for 
                the provision of community mental health services.
                    ``(Q) An entity receiving funds under subpart II of 
                such part B (relating to the prevention and treatment 
                of substance abuse) for the provision of treatment 
                services for substance abuse.
                    ``(R) An entity that is a Medicare-dependent, small 
                rural hospital (as defined in section 1886(d)(5)(G)(iv) 
                of the Social Security Act).
                    ``(S) An entity that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
                    ``(T) An entity that is classified as a rural 
                referral center under section 1886(d)(5)(C) of the 
                Social Security Act.''.
    (b) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
(42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (4)(L)--
                    (A) by adding ``and'' at the end of clause (i);
                    (B) by striking ``; and'' at the end of clause (ii) 
                and inserting a period; and
                    (C) by striking clause (iii);
            (2) in paragraph (5), by redesignating subparagraphs (C) 
        and (D) as subparagraphs (D) and (E), respectively, and by 
        inserting after subparagraph (B) the following:
                    ``(C) Prohibiting use of group purchasing 
                arrangements.--
                            ``(i) A hospital described in subparagraph 
                        (L), (M), (N), (R), (S), or (T) of paragraph 
                        (4) shall not obtain covered outpatient drugs 
                        through a group purchasing organization or 
                        other group purchasing arrangement, except as 
                        permitted or provided pursuant to clause (ii).
                            ``(ii) The Secretary shall establish 
                        reasonable exceptions to the requirement of 
                        clause (i)--
                                    ``(I) with respect to a covered 
                                outpatient drug that is unavailable to 
                                be purchased through the program under 
                                this section due to a drug shortage 
                                problem, manufacturer noncompliance, or 
                                any other reason beyond the hospital's 
                                control;
                                    ``(II) to facilitate generic 
                                substitution when a generic covered 
                                outpatient drug is available at a lower 
                                price; and
                                    ``(III) to reduce in other ways the 
                                administrative burdens of managing both 
                                inventories of drugs obtained under 
                                this section and not under this 
                                section, if such exception does not 
                                create a duplicate discount problem in 
                                violation of subparagraph (A) or a 
                                diversion problem in violation of 
                                subparagraph (B).''.

SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

    (a) In General.--Section 340B (42 U.S.C. 256b) is amended--
            (1) in subsection (b)--
                    (A) by striking ``In this section, the terms'' and 
                inserting the following: ``In this section:
            ``(1) In general.--The terms''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Covered drug.--The term `covered drug'--
                    ``(A) means a covered outpatient drug (as defined 
                in section 1927(k)(2) of the Social Security Act); and
                    ``(B) includes, notwithstanding the section 
                1927(k)(3)(A) of such Act, a drug used in connection 
                with an inpatient or outpatient service provided by a 
                hospital described in subparagraph (L), (M), (N), (R), 
                (S), or (T) of subsection (a)(4) that is enrolled to 
                participate in the drug discount program under this 
                section.''; and
            (2) in paragraphs (5), (7), and (9) of subsection (a), by 
        striking ``outpatient'' each place it appears.
    (b) Medicaid Credits on Inpatient Drugs.--Subsection (c) of section 
340B (42 U.S.C. 256b(c)) is amended to read as follows:
    ``(c) Medicaid Credits on Inpatient Drugs.--
            ``(1) In general.--For the cost reporting period covered by 
        the most recently filed Medicare cost report under title XVIII 
        of the Social Security Act, a hospital described in 
        subparagraph (L), (M), (N), (R), (S), or (T) of subsection 
        (a)(4) and enrolled to participate in the drug discount program 
        under this section shall provide to each State under its plan 
        under title XIX of such Act--
                    ``(A) a credit on the estimated annual costs to 
                such hospital of single source and innovator multiple 
                source drugs provided to Medicaid beneficiaries for 
                inpatient use; and
                    ``(B) a credit on the estimated annual costs to 
                such hospital of noninnovator multiple source drugs 
                provided to Medicaid beneficiaries for inpatient use.
            ``(2) Amount of credits.--
                    ``(A) Single source and innovator multiple source 
                drugs.--For purposes of paragraph (1)(A)--
                            ``(i) the credit under such paragraph shall 
                        be equal to the product of--
                                    ``(I) the annual value of single 
                                source and innovator multiple source 
                                drugs purchased under this section by 
                                the hospital based on the drugs' 
                                average manufacturer price;
                                    ``(II) the estimated percentage of 
                                the hospital's drug purchases 
                                attributable to Medicaid beneficiaries 
                                for inpatient use; and
                                    ``(III) the minimum rebate 
                                percentage described in section 
                                1927(c)(1)(B) of the Social Security 
                                Act;
                            ``(ii) the reference in clause (i)(I) to 
                        the annual value of single source and innovator 
                        multiple source drugs purchased under this 
                        section by the hospital based on the drugs' 
                        average manufacturer price shall be equal to 
                        the sum of--
                                    ``(I) the annual quantity of each 
                                single source and innovator multiple 
                                source drug purchased during the cost 
                                reporting period, multiplied by
                                    ``(II) the average manufacturer 
                                price for that drug;
                            ``(iii) the reference in clause (i)(II) to 
                        the estimated percentage of the hospital's drug 
                        purchases attributable to Medicaid 
                        beneficiaries for inpatient use; shall be equal 
                        to--
                                    ``(I) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report, divided by
                                    ``(II) total drug charges reported 
                                on the cost report; and
                            ``(iv) the terms `single source drug' and 
                        `innovator multiple source drug' have the 
                        meanings given such terms in section 1927(k)(7) 
                        of the Social Security Act.
                    ``(B) Noninnovator multiple source drugs.--For 
                purposes of paragraph (1)(B)--
                            ``(i) the credit under such paragraph shall 
                        be equal to the product of--
                                    ``(I) the annual value of 
                                noninnovator multiple source drugs 
                                purchased under this section by the 
                                hospital based on the drugs' average 
                                manufacturer price;
                                    ``(II) the estimated percentage of 
                                the hospital's drug purchases 
                                attributable to Medicaid beneficiaries 
                                for inpatient use; and
                                    ``(III) the applicable percentage 
                                as defined in section 1927(c)(3)(B) of 
                                the Social Security Act;
                            ``(ii) the reference in clause (i)(I) to 
                        the annual value of noninnovator multiple 
                        source drugs purchased under this section by 
                        the hospital based on the drugs' average 
                        manufacturer price shall be equal to the sum 
                        of--
                                    ``(I) the annual quantity of each 
                                noninnovator multiple source drug 
                                purchased during the cost reporting 
                                period, multiplied by
                                    ``(II) the average manufacturer 
                                price for that drug;
                            ``(iii) the reference in clause (i)(II) to 
                        the estimated percentage of the hospital's drug 
                        purchases attributable to Medicaid 
                        beneficiaries for inpatient use shall be equal 
                        to--
                                    ``(I) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report, divided by
                                    ``(II) total drug charges reported 
                                on the cost report; and
                            ``(iv) the term `noninnovator multiple 
                        source drug' has the meaning given such term in 
                        section 1927(k)(7) of the Social Security Act.
            ``(3) Calculation of credits.--
                    ``(A) In general.--Each State calculates credits 
                under paragraph (1) and informs hospitals of amount 
                under section 1927(a)(5)(D) of the Social Security Act.
                    ``(B) Hospital provision of information.--Not later 
                than 30 days after the date of the filing of the 
                hospital's most recently filed Medicare cost report, 
                the hospital shall provide the State with the 
                information described in paragraphs (2)(A)(ii) and 
                (2)(B)(ii). With respect to each drug purchased during 
                the cost reporting period, the hospital shall provide 
                the dosage form, strength, package size, date of 
                purchase and the number of units purchased.
            ``(4) Payment deadline.--The credits provided by a hospital 
        under paragraph (1) shall be paid within 60 days after 
        receiving the information specified in paragraph (3)(A).
            ``(5) Opt out.--A hospital shall not be required to provide 
        the Medicaid credit required under paragraph (1) if it can 
        demonstrate to the State that it will lose reimbursement under 
        the State plan resulting from the extension of discounts to 
        inpatient drugs under subsection (b)(2) and that the loss of 
        reimbursement will exceed the amount of the credit otherwise 
        owed by the hospital.
            ``(6) Offset against medical assistance.--Amounts received 
        by a State under this subsection in any quarter shall be 
        considered to be a reduction in the amount expended under the 
        State plan in the quarter for medical assistance for purposes 
        of section 1903(a)(1) of the Social Security Act.''.
    (c) Conforming Amendments.--Section 1927 of the Social Security Act 
(42 U.S.C. 1396r-8) is amended--
            (1) in subsection (a)(5)(A), by striking ``covered 
        outpatient drugs'' and inserting ``covered drugs (as defined in 
        section 340B(b)(2) of the Public Health Service Act)'';
            (2) in subsection (a)(5), by striking subparagraph (D) and 
        inserting the following:
                    ``(D) State responsibility for calculating hospital 
                credits.--The State shall calculate the credits owed by 
                the hospital under paragraph (1) of section 340B(c) of 
                the Public Health Service Act and provide the hospital 
                with both the amounts and an explanation of how it 
                calculated the credits. In performing the calculations 
                specified in paragraphs (2)(A)(ii) and (2)(B)(ii) of 
                such section, the State shall use the average 
                manufacturer price applicable to the calendar quarter 
                in which the drug was purchased by the hospital.''; and
            (3) in subsection (k)(1)--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraphs (B) and (D)''; and
                    (B) by adding at the end the following:
                    ``(D) Calculation for covered drugs.--With respect 
                to a covered drug (as defined in section 340B(b)(2) of 
                the Public Health Service Act), the average 
                manufacturer price shall be determined in accordance 
                with subparagraph (A) except that, in the event a 
                covered drug is not distributed to the retail pharmacy 
                class of trade, it shall mean the average price paid to 
                the manufacturer for the drug in the United States by 
                wholesalers for drugs distributed to the acute care 
                class of trade, after deducting customary prompt pay 
                discounts.''.

SEC. 2503. EFFECTIVE DATE.

    (a) In General.--The amendments made by this subtitle shall take 
effect on July 1, 2010, and shall apply to drugs dispensed on or after 
such date.
    (b) Effectiveness.--The amendments made by this subtitle shall be 
effective, and shall be taken into account in determining whether a 
manufacturer is deemed to meet the requirements of section 340B(a) of 
the Public Health Service Act (42 U.S.C. 256b(a)) and of section 
1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)), 
notwithstanding any other provision of law.

                Subtitle B--School-Based Health Clinics

SEC. 2511. SCHOOL-BASED HEALTH CLINICS.

    (a) In General.--Part Q of title III (42 U.S.C. 280h et seq.) is 
amended by adding at the end the following:

``SEC. 399Z-1. SCHOOL-BASED HEALTH CLINICS.

    ``(a) Program.--The Secretary shall establish a school-based health 
clinic program consisting of awarding grants to eligible entities to 
support the operation of school-based health clinics (referred to in 
this section as `SBHCs').
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
            ``(1) be an SBHC (as defined in subsection (l)(4)); and
            ``(2) submit an application at such time, in such manner, 
        and containing such information as the Secretary may require, 
        including at a minimum--
                    ``(A) evidence that the applicant meets all 
                criteria necessary to be designated as an SBHC;
                    ``(B) evidence of local need for the services to be 
                provided by the SBHC;
                    ``(C) an assurance that--
                            ``(i) SBHC services will be provided in 
                        accordance with Federal, State, and local laws 
                        governing--
                                    ``(I) obtaining parental or 
                                guardian consent; and
                                    ``(II) patient privacy and student 
                                records, including section 264 of the 
                                Health Insurance Portability and 
                                Accountability Act of 1996 and section 
                                444 of the General Education Provisions 
                                Act;
                            ``(ii) the SBHC has established and 
                        maintains collaborative relationships with 
                        other health care providers in the catchment 
                        area of the SBHC;
                            ``(iii) the SBHC will provide on-site 
                        access during the academic day when school is 
                        in session and has an established network of 
                        support and access to services with backup 
                        health providers when the school or SBHC is 
                        closed;
                            ``(iv) the SBHC will be integrated into the 
                        school environment and will coordinate health 
                        services with appropriate school personnel and 
                        other community providers co-located at the 
                        school; and
                            ``(v) the SBHC sponsoring facility assumes 
                        all responsibility for the SBHC administration, 
                        operations, and oversight; and
                    ``(D) such other information as the Secretary may 
                require.
    ``(c) Use of Funds.--Funds awarded under a grant under this section 
may be used for--
            ``(1) providing training related to the provision of 
        comprehensive primary health services and additional health 
        services;
            ``(2) the management and operation of SBHC programs; and
            ``(3) the payment of salaries for health professionals and 
        other appropriate SBHC personnel.
    ``(d) Consideration of Need.--In determining the amount of a grant 
under this section, the Secretary shall take into consideration--
            ``(1) the financial need of the SBHC;
            ``(2) State, local, or other sources of funding provided to 
        the SBHC; and
            ``(3) other factors as determined appropriate by the 
        Secretary.
    ``(e) Preferences.--In awarding grants under this section, the 
Secretary shall give preference to SBHCs that have a demonstrated 
record of service to the following:
            ``(1) A high percentage of medically underserved children 
        and adolescents.
            ``(2) Communities or populations in which children and 
        adolescents have difficulty accessing health and mental health 
        services.
            ``(3) Communities with high percentages of children and 
        adolescents who are uninsured, underinsured, or eligible for 
        medical assistance under Federal or State health benefits 
        programs (including titles XIX and XXI of the Social Security 
        Act).
    ``(f) Matching Requirement.--The Secretary may award a grant to an 
SBHC only if the SBHC agrees to provide, from non-Federal sources, an 
amount equal to 20 percent of the amount of the grant (which may be 
provided in cash or in kind) to carry out the activities supported by 
the grant.
    ``(g) Supplement, Not Supplant.--The Secretary may award a grant to 
an SBHC under this section only if the SBHC demonstrates to the 
satisfaction of the Secretary that funds received through the grant 
will be expended only to supplement, and not supplant, non-Federal and 
Federal funds otherwise available to the SBHC for operation of the SBHC 
(including each activity described in paragraph (1) or (2) of 
subsection (c)).
    ``(h) Payor of Last Resort.--The Secretary may award a grant to an 
SBHC under this section only if the SBHC demonstrates to the 
satisfaction of the Secretary that funds received through the grant 
will not be expended for any activity to the extent that payment has 
been made, or can reasonably be expected to be made--
            ``(1) under any insurance policy;
            ``(2) under any Federal or State health benefits program 
        (including titles XIX and XXI of the Social Security Act); or
            ``(3) by an entity which provides health services on a 
        prepaid basis.
    ``(i) Regulations Regarding Reimbursement for Health Services.--The 
Secretary shall issue regulations regarding the reimbursement for 
health services provided by SBHCs to individuals eligible to receive 
such services through the program under this section, including 
reimbursement under any insurance policy or any Federal or State health 
benefits program (including titles XIX and XXI of the Social Security 
Act).
    ``(j) Technical Assistance.--The Secretary shall provide (either 
directly or by grant or contract) technical and other assistance to 
SBHCs to assist such SBHCs to meet the requirements of this section. 
Such assistance may include fiscal and program management assistance, 
training in fiscal and program management, operational and 
administrative support, and the provision of information to the SBHCs 
of the variety of resources available under this title and how those 
resources can be best used to meet the health needs of the communities 
served by the SBHCs.
    ``(k) Evaluation; Report.--The Secretary shall--
            ``(1) develop and implement a plan for evaluating SBHCs and 
        monitoring quality performances under the awards made under 
        this section; and
            ``(2) submit to the Congress on an annual basis a report on 
        the program under this section.
    ``(l) Definitions.--In this section:
            ``(1) Comprehensive primary health services.--The term 
        `comprehensive primary health services' means the core services 
        offered by SBHCs, which shall include the following:
                    ``(A) Physical.--Comprehensive health assessments, 
                diagnosis, and treatment of minor, acute, and chronic 
                medical conditions and referrals to, and follow-up for, 
                specialty care.
                    ``(B) Mental health.--Mental health assessments, 
                crisis intervention, counseling, treatment, and 
                referral to a continuum of services including emergency 
                psychiatric care, community support programs, inpatient 
                care, and outpatient programs.
                    ``(C) Optional services.--Additional services, 
                which may include oral health, social, and age-
                appropriate health education services, including 
                nutritional counseling.
            ``(2) Medically underserved children and adolescents.--The 
        term `medically underserved children and adolescents' means a 
        population of children and adolescents who are residents of an 
        area designated by the Secretary as an area with a shortage of 
        personal health services and health infrastructure for such 
        children and adolescents.
            ``(3) School-based health clinic.--The term `school-based 
        health clinic' means a health clinic that--
                    ``(A) is located in, or is adjacent to, a school 
                facility of a local educational agency;
                    ``(B) is organized through school, community, and 
                health provider relationships;
                    ``(C) is administered by a sponsoring facility; and
                    ``(D) provides, at a minimum, comprehensive primary 
                health services during school hours to children and 
                adolescents by health professionals in accordance with 
                State and local laws and regulations, established 
                standards, and community practice.
            ``(4) Sponsoring facility.--The term `sponsoring facility' 
        is--
                    ``(A) a hospital;
                    ``(B) a public health department;
                    ``(C) a community health center;
                    ``(D) a nonprofit health care agency;
                    ``(E) a local educational agency; or
                    ``(F) a program administered by the Indian Health 
                Service or the Bureau of Indian Affairs or operated by 
                an Indian tribe or a tribal organization under the 
                Indian Self-Determination and Education Assistance Act, 
                a Native Hawaiian entity, or an urban Indian program 
                under title V of the Indian Health Care Improvement 
                Act.
    ``(m) Authorization of Appropriations.--For purposes of carrying 
out this section, there are authorized to be appropriated $50,000,000 
for fiscal year 2010 and such sums as may be necessary for each of the 
fiscal years 2011 through 2014.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall begin awarding grants under section 399Z-1 of the Public Health 
Service Act, as added by subsection (b), not later than July 1, 2010, 
without regard to whether or not final regulations have been issued 
under section 399Z-1(h) of such Act.

              Subtitle C--National Medical Device Registry

SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY.

    (a) Registry.--
            (1) In general.--Section 519 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 360i) is amended--
                    (A) by redesignating subsection (g) as subsection 
                (h); and
                    (B) by inserting after subsection (f) the 
                following:

                   ``National Medical Device Registry

    ``(g)(1) The Secretary shall establish a national medical device 
registry (in this subsection referred to as the `registry') to 
facilitate analysis of postmarket safety and outcomes data on each 
device that--
            ``(A) is or has been used in or on a patient; and
            ``(B) is--
                    ``(i) a class III device; or
                    ``(ii) a class II device that is implantable, life-
                supporting, or life-sustaining.
    ``(2) In developing the registry, the Secretary shall, in 
consultation with the Commissioner of Food and Drugs, the Administrator 
of the Centers for Medicare & Medicaid Services, the head of the Office 
of the National Coordinator for Health Information Technology, and the 
Secretary of Veterans Affairs, determine the best methods for--
            ``(A) including in the registry, in a manner consistent 
        with subsection (f), appropriate information to identify each 
        device described in paragraph (1) by type, model, and serial 
        number or other unique identifier;
            ``(B) validating methods for analyzing patient safety and 
        outcomes data from multiple sources and for linking such data 
        with the information included in the registry as described in 
        subparagraph (A), including, to the extent feasible, use of--
                    ``(i) data provided to the Secretary under other 
                provisions of this chapter; and
                    ``(ii) information from public and private sources 
                identified under paragraph (3);
            ``(C) integrating the activities described in this 
        subsection with--
                    ``(i) activities under paragraph (3) of section 
                505(k) (relating to active postmarket risk 
                identification);
                    ``(ii) activities under paragraph (4) of section 
                505(k) (relating to advanced analysis of drug safety 
                data); and
                    ``(iii) other postmarket device surveillance 
                activities of the Secretary authorized by this chapter; 
                and
            ``(D) providing public access to the data and analysis 
        collected or developed through the registry in a manner and 
        form that protects patient privacy and proprietary information 
        and is comprehensive, useful, and not misleading to patients, 
        physicians, and scientists.
    ``(3)(A) To facilitate analyses of postmarket safety and patient 
outcomes for devices described in paragraph (1), the Secretary shall, 
in collaboration with public, academic, and private entities, develop 
methods to--
                    ``(i) obtain access to disparate sources of patient 
                safety and outcomes data, including--
                            ``(I) Federal health-related electronic 
                        data (such as data from the Medicare program 
                        under title XVIII of the Social Security Act or 
                        from the health systems of the Department of 
                        Veterans Affairs);
                            ``(II) private sector health-related 
                        electronic data (such as pharmaceutical 
                        purchase data and health insurance claims 
                        data); and
                            ``(III) other data as the Secretary deems 
                        necessary to permit postmarket assessment of 
                        device safety and effectiveness; and
                    ``(ii) link data obtained under clause (i) with 
                information in the registry.
    ``(B) In this paragraph, the term `data' refers to information 
respecting a device described in paragraph (1), including claims data, 
patient survey data, standardized analytic files that allow for the 
pooling and analysis of data from disparate data environments, 
electronic health records, and any other data deemed appropriate by the 
Secretary.
    ``(4) Not later than 36 months after the date of the enactment of 
this subsection, the Secretary shall promulgate regulations for 
establishment and operation of the registry under paragraph (1). Such 
regulations--
            ``(A)(i) in the case of devices that are described in 
        paragraph (1) and sold on or after the date of the enactment of 
        this subsection, shall require manufacturers of such devices to 
        submit information to the registry, including, for each such 
        device, the type, model, and serial number or, if required 
        under subsection (f), other unique device identifier; and
            ``(ii) in the case of devices that are described in 
        paragraph (1) and sold before such date, may require 
        manufacturers of such devices to submit such information to the 
        registry, if deemed necessary by the Secretary to protect the 
        public health;
            ``(B) shall establish procedures--
                    ``(i) to permit linkage of information submitted 
                pursuant to subparagraph (A) with patient safety and 
                outcomes data obtained under paragraph (3); and
                    ``(ii) to permit analyses of linked data;
            ``(C) may require device manufacturers to submit such other 
        information as is necessary to facilitate postmarket 
        assessments of device safety and effectiveness and notification 
        of device risks;
            ``(D) shall establish requirements for regular and timely 
        reports to the Secretary, which shall be included in the 
        registry, concerning adverse event trends, adverse event 
        patterns, incidence and prevalence of adverse events, and other 
        information the Secretary determines appropriate, which may 
        include data on comparative safety and outcomes trends; and
            ``(E) shall establish procedures to permit public access to 
        the information in the registry in a manner and form that 
        protects patient privacy and proprietary information and is 
        comprehensive, useful, and not misleading to patients, 
        physicians, and scientists.
    ``(5) To carry out this subsection, there are authorized to be 
appropriated such sums as may be necessary for fiscal years 2010 and 
2011.''.
            (2) Effective date.--The Secretary of Health and Human 
        Services shall establish and begin implementation of the 
        registry under section 519(g) of the Federal Food, Drug, and 
        Cosmetic Act, as added by paragraph (1), by not later than the 
        date that is 36 months after the date of the enactment of this 
        Act, without regard to whether or not final regulations to 
        establish and operate the registry have been promulgated by 
        such date.
            (3) Conforming amendment.--Section 303(f)(1)(B)(ii) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        333(f)(1)(B)(ii)) is amended by striking ``519(g)'' and 
        inserting ``519(h)''.
    (b) Electronic Exchange and Use in Certified Electronic Health 
Records of Unique Device Identifiers.--
            (1) Recommendations.--The HIT Policy Committee established 
        under section 3002 of the Public Health Service Act (42 U.S.C. 
        300jj-12) shall recommend to the head of the Office of the 
        National Coordinator for Health Information Technology 
        standards, implementation specifications, and certification 
        criteria for the electronic exchange and use in certified 
        electronic health records of a unique device identifier for 
        each device described in section 519(g)(1) of the Federal Food, 
        Drug, and Cosmetic Act, as added by subsection (a).
            (2) Standards, implementation criteria, and certification 
        criteria.--The Secretary of the Health Human Services, acting 
        through the head of the Office of the National Coordinator for 
        Health Information Technology, shall adopt standards, 
        implementation specifications, and certification criteria for 
        the electronic exchange and use in certified electronic health 
        records of a unique device identifier for each device described 
        in paragraph (1), if such an identifier is required by section 
        519(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        360i(f)) for the device.

 Subtitle D--Grants for Comprehensive Programs To Provide Education to 
                Nurses and Create a Pipeline to Nursing

SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.

    (a) Purposes.--It is the purpose of this section to authorize 
grants to--
            (1) address the projected shortage of nurses by funding 
        comprehensive programs to create a career ladder to nursing 
        (including Certified Nurse Assistants, Licensed Practical 
        Nurses, Licensed Vocational Nurses, and Registered Nurses) for 
        incumbent ancillary health care workers;
            (2) increase the capacity for educating nurses by 
        increasing both nurse faculty and clinical opportunities 
        through collaborative programs between staff nurse 
        organizations, health care providers, and accredited schools of 
        nursing; and
            (3) provide training programs through education and 
        training organizations jointly administered by health care 
        providers and health care labor organizations or other 
        organizations representing staff nurses and frontline health 
        care workers, working in collaboration with accredited schools 
        of nursing and academic institutions.
    (b) Grants.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Labor (referred to in this 
section as the ``Secretary'') shall establish a partnership grant 
program to award grants to eligible entities to carry out comprehensive 
programs to provide education to nurses and create a pipeline to 
nursing for incumbent ancillary health care workers who wish to advance 
their careers, and to otherwise carry out the purposes of this section.
    (c) Eligibility.--To be eligible for a grant under this section, an 
entity shall be--
            (1) a health care entity that is jointly administered by a 
        health care employer and a labor union representing the health 
        care employees of the employer and that carries out activities 
        using labor management training funds as provided for under 
        section 302(c)(6) of the Labor Management Relations Act, 1947 
        (29 U.S.C. 186(c)(6));
            (2) an entity that operates a training program that is 
        jointly administered by--
                    (A) one or more health care providers or 
                facilities, or a trade association of health care 
                providers; and
                    (B) one or more organizations which represent the 
                interests of direct care health care workers or staff 
                nurses and in which the direct care health care workers 
                or staff nurses have direct input as to the leadership 
                of the organization;
            (3) a State training partnership program that consists of 
        nonprofit organizations that include equal participation from 
        industry, including public or private employers, and labor 
        organizations including joint labor-management training 
        programs, and which may include representatives from local 
        governments, worker investment agency one-stop career centers, 
        community-based organizations, community colleges, and 
        accredited schools of nursing; or
            (4) a school of nursing (as defined in section 801 of the 
        Public Health Service Act (42 U.S.C. 296)).
    (d) Additional Requirements for Health Care Employer Described in 
Subsection (c).--To be eligible for a grant under this section, a 
health care employer described in subsection (c) shall demonstrate that 
it--
            (1) has an established program within their facility to 
        encourage the retention of existing nurses;
            (2) provides wages and benefits to its nurses that are 
        competitive for its market or that have been collectively 
        bargained with a labor organization; and
            (3) supports programs funded under this section through 1 
        or more of the following:
                    (A) The provision of paid leave time and continued 
                health coverage to incumbent health care workers to 
                allow their participation in nursing career ladder 
                programs, including certified nurse assistants, 
                licensed practical nurses, licensed vocational nurses, 
                and registered nurses.
                    (B) Contributions to a joint labor-management 
                training fund which administers the program involved.
                    (C) The provision of paid release time, incentive 
                compensation, or continued health coverage to staff 
                nurses who desire to work full- or part-time in a 
                faculty position.
                    (D) The provision of paid release time for staff 
                nurses to enable them to obtain a bachelor of science 
                in nursing degree, other advanced nursing degrees, 
                specialty training, or certification program.
                    (E) The payment of tuition assistance which is 
                managed by a joint labor-management training fund or 
                other jointly administered program.
    (e) Other Requirements.--
            (1) Matching requirement.--
                    (A) In general.--The Secretary may not make a grant 
                under this section unless the applicant involved 
                agrees, with respect to the costs to be incurred by the 
                applicant in carrying out the program under the grant, 
                to make available non-Federal contributions (in cash or 
                in kind under subparagraph (B)) toward such costs in an 
                amount equal to not less than $1 for each $1 of Federal 
                funds provided in the grant. Such contributions may be 
                made directly or through donations from public or 
                private entities, or may be provided through the cash 
                equivalent of paid release time provided to incumbent 
                worker students.
                    (B) Determination of amount of non-federal 
                contribution.--Non-Federal contributions required in 
                subparagraph (A) may be in cash or in kind (including 
                paid release time), fairly evaluated, including 
                equipment or services (and excluding indirect or 
                overhead costs). Amounts provided by the Federal 
                Government, or services assisted or subsidized to any 
                significant extent by the Federal Government, may not 
                be included in determining the amount of such non-
                Federal contributions.
            (2) Required collaboration.--Entities carrying out or 
        overseeing programs carried out with assistance provided under 
        this section shall demonstrate collaboration with accredited 
        schools of nursing which may include community colleges and 
        other academic institutions providing associate, bachelor's, or 
        advanced nursing degree programs or specialty training or 
        certification programs.
    (f) Use of Funds.--Amounts awarded to an entity under a grant under 
this section shall be used for the following:
            (1) To carry out programs that provide education and 
        training to establish nursing career ladders to educate 
        incumbent health care workers to become nurses (including 
        certified nurse assistants, licensed practical nurses, licensed 
        vocational nurses, and registered nurses). Such programs shall 
        include one or more of the following:
                    (A) Preparing incumbent workers to return to the 
                classroom through English -as-a-second language 
                education, GED education, pre-college counseling, 
                college preparation classes, and support with entry 
                level college classes that are a prerequisite to 
                nursing.
                    (B) Providing tuition assistance with preference 
                for dedicated cohort classes in community colleges, 
                universities, accredited schools of nursing with 
                supportive services including tutoring and counseling.
                    (C) Providing assistance in preparing for and 
                meeting all nursing licensure tests and requirements.
                    (D) Carrying out orientation and mentorship 
                programs that assist newly graduated nurses in 
                adjusting to working at the bedside to ensure their 
                retention postgraduation, and ongoing programs to 
                support nurse retention.
                    (E) Providing stipends for release time and 
                continued health care coverage to enable incumbent 
                health care workers to participate in these programs.
            (2) To carry out programs that assist nurses in obtaining 
        advanced degrees and completing specialty training or 
        certification programs and to establish incentives for nurses 
        to assume nurse faculty positions on a part-time or full-time 
        basis. Such programs shall include one or more of the 
        following:
                    (A) Increasing the pool of nurses with advanced 
                degrees who are interested in teaching by funding 
                programs that enable incumbent nurses to return to 
                school.
                    (B) Establishing incentives for advanced degree 
                bedside nurses who wish to teach in nursing programs so 
                they can obtain a leave from their bedside position to 
                assume a full- or part-time position as adjunct or 
                full-time faculty without the loss of salary or 
                benefits.
                    (C) Collaboration with accredited schools of 
                nursing which may include community colleges and other 
                academic institutions providing associate, bachelor's, 
                or advanced nursing degree programs, or specialty 
                training or certification programs, for nurses to carry 
                out innovative nursing programs which meet the needs of 
                bedside nursing and health care providers.
    (g) Preference.--In awarding grants under this section the 
Secretary shall give preference to programs that--
            (1) provide for improving nurse retention;
            (2) provide for improving the diversity of the new nurse 
        graduates to reflect changes in the demographics of the patient 
        population;
            (3) provide for improving the quality of nursing education 
        to improve patient care and safety;
            (4) have demonstrated success in upgrading incumbent health 
        care workers to become nurses or which have established 
        effective programs or pilots to increase nurse faculty; or
            (5) are modeled after or affiliated with such programs 
        described in paragraph (4).
    (h) Evaluation.--
            (1) Program evaluations.--An entity that receives a grant 
        under this section shall annually evaluate, and submit to the 
        Secretary a report on, the activities carried out under the 
        grant and the outcomes of such activities. Such outcomes may 
        include--
                    (A) an increased number of incumbent workers 
                entering an accredited school of nursing and in the 
                pipeline for nursing programs;
                    (B) an increasing number of graduating nurses and 
                improved nurse graduation and licensure rates;
                    (C) improved nurse retention;
                    (D) an increase in the number of staff nurses at 
                the health care facility involved;
                    (E) an increase in the number of nurses with 
                advanced degrees in nursing;
                    (F) an increase in the number of nurse faculty;
                    (G) improved measures of patient quality (which may 
                include staffing ratios of nurses, patient satisfaction 
                rates, patient safety measures); and
                    (H) an increase in the diversity of new nurse 
                graduates relative to the patient population.
            (2) General report.--Not later than 2 years after the date 
        of the enactment of this Act, and annually thereafter, the 
        Secretary of Labor shall, using data and information from the 
        reports received under paragraph (1), submit to the Congress a 
        report concerning the overall effectiveness of the grant 
        program carried out under this section.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

 Subtitle E--States Failing To Adhere to Certain Employment Obligations

SEC. 2541. LIMITATION ON FEDERAL FUNDS.

    A State is eligible for Federal funds under the provisions of the 
Public Health Service Act (42 U.S.C. 201 et seq.) only if the State--
            (1) agrees to be subject in its capacity as an employer to 
        each obligation under subdivision A of this division and the 
        amendments made by such subdivision applicable to persons in 
        their capacity as an employer; and
            (2) assures that all political subdivisions in the State 
        will do the same.

   DIVISION II--COMMITTEE ON EDUCATION AND LABOR: HEALTH CARE REFORM

SECTION 1. SHORT TITLE; TABLE OF SUBDIVISIONS, TITLES, AND SUBTITLES.

    (a) Table of Subdivisions, Titles, and Subtitles.--This division is 
divided into subdivisions, titles, 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

                 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

           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

   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

    (b) Short Title.--This division may be cited as the ``America's 
Affordable Health Choices Act of 2009''.

             SUBDIVISION A--AFFORDABLE HEALTH CARE CHOICES

SEC. 100. PURPOSE; TABLE OF CONTENTS OF SUBDIVISION; GENERAL 
              DEFINITIONS.

    (a) Purpose.--
            (1) In general.--The purpose of this subdivision is to 
        provide affordable, quality health care for all Americans and 
        reduce the growth in health care spending.
            (2) Building on current system.--This subdivision achieves 
        this purpose by building on what works in today's health care 
        system, while repairing the aspects that are broken.
            (3) Insurance reforms.--This subdivision--
                    (A) enacts strong insurance market reforms;
                    (B) creates a new Health Insurance Exchange, with a 
                public health insurance option alongside private plans;
                    (C) includes sliding scale affordability credits; 
                and
                    (D) initiates shared responsibility among workers, 
                employers, and the government;
        so that all Americans have coverage of essential health 
        benefits.
            (4) Health delivery reform.--This subdivision institutes 
        health delivery system reforms both to increase quality and to 
        reduce growth in health spending so that health care becomes 
        more affordable for businesses, families, and government.
    (b) Table of Contents of Subdivision.--The 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.
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.
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.
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.
    (c) General Definitions.--Except as otherwise provided, in this 
subdivision:
            (1) Acceptable coverage.--The term ``acceptable coverage'' 
        has the meaning given such term in section 202(d)(2).
            (2) Basic plan.--The term ``basic plan'' has the meaning 
        given such term in section 203(c).
            (3) Commissioner.--The term ``Commissioner'' means the 
        Health Choices Commissioner established under section 141.
            (4) Cost-sharing.--The term ``cost-sharing'' includes 
        deductibles, coinsurance, copayments, and similar charges but 
        does not include premiums or any network payment differential 
        for covered services or spending for non-covered services.
            (5) Dependent.--The term ``dependent'' has the meaning 
        given such term by the Commissioner and includes a spouse.
            (6) Employment-based health plan.--The term ``employment-
        based health plan''--
                    (A) means a group health plan (as defined in 
                section 733(a)(1) of the Employee Retirement Income 
                Security Act of 1974);
                    (B) includes such a plan that is the following:
                            (i) Federal, state, and tribal governmental 
                        plans.--A governmental plan (as defined in 
                        section 3(32) of the Employee Retirement Income 
                        Security Act of 1974), including a health 
                        benefits plan offered under chapter 89 of title 
                        5, United States Code; or
                            (ii) Church plans.--A church plan (as 
                        defined in section 3(33) of the Employee 
                        Retirement Income Security Act of 1974); and
                    (C) excludes coverage described in section 
                202(d)(2)(E) (relating to TRICARE).
            (7) Enhanced plan.--The term ``enhanced plan'' has the 
        meaning given such term in section 203(c).
            (8) Essential benefits package.--The term ``essential 
        benefits package'' is defined in section 122(a).
            (9) Family.--The term ``family'' means an individual and 
        includes the individual's dependents.
            (10) Federal poverty level; fpl.--The terms ``Federal 
        poverty level'' and ``FPL'' have the meaning given the term 
        ``poverty line'' in section 673(2) of the Community Services 
        Block Grant Act (42 U.S.C. 9902(2)), including any revision 
        required by such section.
            (11) Health benefits plan.--The terms ``health benefits 
        plan'' means health insurance coverage and an employment-based 
        health plan and includes the public health insurance option.
            (12) Health insurance coverage; health insurance issuer.--
        The terms ``health insurance coverage'' and ``health insurance 
        issuer'' have the meanings given such terms in section 2791 of 
        the Public Health Service Act.
            (13) Health insurance exchange.--The term ``Health 
        Insurance Exchange'' means the Health Insurance Exchange 
        established under section 201.
            (14) Medicaid.--The term ``Medicaid'' means a State plan 
        under title XIX of the Social Security Act (whether or not the 
        plan is operating under a waiver under section 1115 of such 
        Act).
            (15) Medicare.--The term ``Medicare'' means the health 
        insurance programs under title XVIII of the Social Security 
        Act.
            (16) Plan sponsor.--The term ``plan sponsor'' has the 
        meaning given such term in section 3(16)(B) of the Employee 
        Retirement Income Security Act of 1974.
            (17) Plan year.--The term ``plan year'' means--
                    (A) with respect to an employment-based health 
                plan, a plan year as specified under such plan; or
                    (B) with respect to a health benefits plan other 
                than an employment-based health plan, a 12-month period 
                as specified by the Commissioner.
            (18) Premium plan; premium-plus plan.--The terms ``premium 
        plan'' and ``premium-plus plan'' have the meanings given such 
        terms in section 203(c).
            (19) QHBP offering entity.--The terms ``QHBP offering 
        entity'' means, with respect to a health benefits plan that 
        is--
                    (A) a group health plan (as defined, subject to 
                subsection (d), in section 733(a)(1) of the Employee 
                Retirement Income Security Act of 1974), the plan 
                sponsor in relation to such group health plan, except 
                that, in the case of a plan maintained jointly by 1 or 
                more employers and 1 or more employee organizations and 
                with respect to which an employer is the primary source 
                of financing, such term means such employer;
                    (B) health insurance coverage, the health insurance 
                issuer offering the coverage;
                    (C) the public health insurance option, the 
                Secretary of Health and Human Services;
                    (D) a non-Federal governmental plan (as defined in 
                section 2791(d) of the Public Health Service Act), the 
                State or political subdivision of a State (or agency or 
                instrumentality of such State or subdivision) which 
                establishes or maintains such plan; or
                    (E) a Federal governmental plan (as defined in 
                section 2791(d) of the Public Health Service Act), the 
                appropriate Federal official.
            (20) Qualified health benefits plan.--The term ``qualified 
        health benefits plan'' means a health benefits plan that meets 
        the requirements for such a plan under title I and includes the 
        public health insurance option.
            (21) Public health insurance option.--The term ``public 
        health insurance option'' means the public health insurance 
        option as provided under subtitle B of title II.
            (22) Service area; premium rating area.--The terms 
        ``service area'' and ``premium rating area'' mean with respect 
        to health insurance coverage--
                    (A) offered other than through the Health Insurance 
                Exchange, such an area as established by the QHBP 
                offering entity of such coverage in accordance with 
                applicable State law; and
                    (B) offered through the Health Insurance Exchange, 
                such an area as established by such entity in 
                accordance with applicable State law and applicable 
                rules of the Commissioner for Exchange-participating 
                health benefits plans.
            (23) State.--The term ``State'' means the 50 States and the 
        District of Columbia.
            (24) State medicaid agency.--The term ``State Medicaid 
        agency'' means, with respect to a Medicaid plan, the single 
        State agency responsible for administering such plan under 
        title XIX of the Social Security Act.
            (25) Y1, y2, etc..--The terms ``Y1'' , ``Y2'', ``Y3'', 
        ``Y4'', ``Y5'', and similar subsequently numbered terms, mean 
        2013 and subsequent years, respectively.
            (26) Employee premium.--The term ``employee premium'' does 
        not include a collectively bargained premium in the case of a 
        group health plan (as defined in section 733(a)(1) of the 
        Employee Retirement Income Security Act of 1974) that is a 
        multiemployer plan (as defined in section 3(37) of such Act).

 TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS

                     Subtitle A--General Standards

SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.

    (a) Purpose.--The purpose of this title is to establish standards 
to ensure that new health insurance coverage and employment-based 
health plans that are offered meet standards guaranteeing access to 
affordable coverage, essential benefits, and other consumer 
protections.
    (b) Requirements for Qualified Health Benefits Plans.--On or after 
the first day of Y1, a health benefits plan shall not be a qualified 
health benefits plan under this subdivision unless the plan meets the 
applicable requirements of the following subtitles for the type of plan 
and plan year involved:
            (1) Subtitle B (relating to affordable coverage).
            (2) Subtitle C (relating to essential benefits).
            (3) Subtitle D (relating to consumer protection).
    (c) Terminology.--In this subdivision:
            (1) Enrollment in employment-based health plans.--An 
        individual shall be treated as being ``enrolled'' in an 
        employment-based health plan if the individual is a participant 
        or beneficiary (as such terms are defined in section 3(7) and 
        3(8), respectively, of the Employee Retirement Income Security 
        Act of 1974) in such plan.
            (2) Individual and group health insurance coverage.--The 
        terms ``individual health insurance coverage'' and ``group 
        health insurance coverage'' mean health insurance coverage 
        offered in the individual market or large or small group 
        market, respectively, as defined in section 2791 of the Public 
        Health Service Act.
    (d) Sense of Congress on Health Care Needs of United States 
Territories.--It is the sense of the Congress that the reforms made by 
H.R. 3200, as introduced, must be strengthened to meaningfully address 
the health care needs of residents of American Samoa, the Commonwealth 
of the Northern Mariana Islands, Guam, Puerto Rico, and the United 
States Virgin Islands and Congress is committed to working with the 
representatives of these territories to ensure that residents of these 
territories have access to high-quality and affordable health care in 
such a way that best serves their unique needs.

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

    (a) Grandfathered Health Insurance Coverage Defined.--Subject to 
the succeeding provisions of this section, for purposes of establishing 
acceptable coverage under this subdivision, the term ``grandfathered 
health insurance coverage'' means individual health insurance coverage 
that is offered and in force and effect before the first day of Y1 if 
the following conditions are met:
            (1) Limitation on new enrollment.--
                    (A) In general.--Except as provided in this 
                paragraph, the individual health insurance issuer 
                offering such coverage does not enroll any individual 
                in such coverage if the first effective date of 
                coverage is on or after the first day of Y1.
                    (B) Dependent coverage permitted.--Subparagraph (A) 
                shall not affect the subsequent enrollment of a 
                dependent of an individual who is covered as of such 
                first day.
            (2) Limitation on changes in terms or conditions.--Subject 
        to paragraph (3) and except as required by law, the issuer does 
        not change any of its terms or conditions, including benefits 
        and cost-sharing, from those in effect as of the day before the 
        first day of Y1.
            (3) Restrictions on premium increases.--The issuer cannot 
        vary the percentage increase in the premium for a risk group of 
        enrollees in specific grandfathered health insurance coverage 
        without changing the premium for all enrollees in the same risk 
        group at the same rate, as specified by the Commissioner.
    (b) Grace Period for Current Employment-based Health Plans.--
            (1) Grace period.--
                    (A) In general.--The Commissioner shall establish a 
                grace period whereby, for plan years beginning after 
                the end of the 5-year period beginning with Y1, an 
                employment-based health plan in operation as of the day 
                before the first day of Y1 must meet the same 
                requirements as apply to a qualified health benefits 
                plan under section 101, including the essential benefit 
                package requirement under section 121.
                    (B) Exception for limited benefits plans.--
                Subparagraph (A) shall not apply to an employment-based 
                health plan in which the coverage consists only of one 
                or more of the following:
                            (i) Any coverage described in section 
                        3001(a)(1)(B)(ii)(IV) of division B of the 
                        American Recovery and Reinvestment Act of 2009 
                        (PL 111-5).
                            (ii) Excepted benefits (as defined in 
                        section 733(c) of the Employee Retirement 
                        Income Security Act of 1974), including 
                        coverage under a specified disease or illness 
                        policy described in paragraph (3)(A) of such 
                        section.
                            (iii) Such other limited benefits as the 
                        Commissioner may specify.
                In no case shall an employment-based health plan in 
                which the coverage consists only of one or more of the 
                coverage or benefits described in clauses (i) through 
                (iii) be treated as acceptable coverage under this 
                subdivision
            (2) Transitional treatment as acceptable coverage.--During 
        the grace period specified in paragraph (1)(A), an employment-
        based health plan that is described in such paragraph shall be 
        treated as acceptable coverage under this subdivision.
            (3) Exception for consumer-directed health plans and 
        arrangements.--In the case of a group health plan which 
        consists of a consumer-directed health plan or arrangement 
        (including a high deductible health plan, within the meaning of 
        section 223(c)(2) of the Internal Revenue Code of 1986), such 
        group health plan shall be treated as acceptable coverage under 
        a current group health plan for purposes of this subdivision.
    (c) Limitation on Individual Health Insurance Coverage.--
            (1) In general.--Individual health insurance coverage that 
        is not grandfathered health insurance coverage under subsection 
        (a) may only be offered on or after the first day of Y1 as an 
        Exchange-participating health benefits plan.
            (2) Separate, excepted coverage permitted.--Excepted 
        benefits (as defined in section 2791(c) of the Public Health 
        Service Act) are not included within the definition of health 
        insurance coverage. Nothing in paragraph (1) shall prevent the 
        offering, other than through the Health Insurance Exchange, of 
        excepted benefits so long as it is offered and priced 
        separately from health insurance coverage.

    Subtitle B--Standards Guaranteeing Access to Affordable Coverage

SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.

    A qualified health benefits plan may not impose any pre-existing 
condition exclusion (as defined in section 2701(b)(1)(A) of the Public 
Health Service Act) or otherwise impose any limit or condition on the 
coverage under the plan with respect to an individual or dependent 
based on any health status-related factors (as defined in section 
2791(d)(9) of the Public Health Service Act) in relation to the 
individual or dependent.

SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.

    The requirements of sections 2711 (other than subsections (c) and 
(e)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and 
subsection (e)) of the Public Health Service Act, relating to 
guaranteed availability and renewability of health insurance coverage, 
shall apply to individuals and employers in all individual and group 
health insurance coverage, whether offered to individuals or employers 
through the Health Insurance Exchange, through any employment-based 
health plan, or otherwise, in the same manner as such sections apply to 
employers and health insurance coverage offered in the small group 
market, except that such section 2712(b)(1) shall apply only if, before 
nonrenewal or discontinuation of coverage, the issuer has provided the 
enrollee with notice of non-payment of premiums and there is a grace 
period during which the enrollees has an opportunity to correct such 
nonpayment. Rescissions of such coverage shall be prohibited except in 
cases of fraud as defined in sections 2712(b)(2) of such Act.

SEC. 113. INSURANCE RATING RULES.

    (a) In General.--The premium rate charged for an insured qualified 
health benefits plan may not vary except as follows:
            (1) Limited age variation permitted.--By age (within such 
        age categories as the Commissioner shall specify) so long as 
        the ratio of the highest such premium to the lowest such 
        premium does not exceed the ratio of 2 to 1.
            (2) By area.--By premium rating area (as permitted by State 
        insurance regulators or, in the case of Exchange-participating 
        health benefits plans, as specified by the Commissioner in 
        consultation with such regulators).
            (3) By family enrollment.--By family enrollment (such as 
        variations within categories and compositions of families) so 
        long as the ratio of the premium for family enrollment (or 
        enrollments) to the premium for individual enrollment is 
        uniform, as specified under State law and consistent with rules 
        of the Commissioner.
    (b) Study and Reports.--
            (1) Study.--The Commissioner, in coordination with the 
        Secretary of Health and Human Services and the Secretary of 
        Labor, shall conduct a study of the large group insured and 
        self-insured employer health care markets. Such study shall 
        examine the following:
                    (A) The types of employers by key characteristics, 
                including size, that purchase insured products versus 
                those that self-insure.
                    (B) The similarities and differences between 
                typical insured and self-insured health plans.
                    (C) The financial solvency and capital reserve 
                levels of employers that self-insure by employer size.
                    (D) The risk of self-insured employers not being 
                able to pay obligations or otherwise becoming 
                financially insolvent.
                    (E) The extent to which rating rules are likely to 
                cause adverse selection in the large group market or to 
                encourage small and mid size employers to self-insure
            (2) Reports.--Not later than 18 months after the date of 
        the enactment of this Act, the Commissioner shall submit to 
        Congress and the applicable agencies a report on the study 
        conducted under paragraph (1). Such report shall include any 
        recommendations the Commissioner deems appropriate to ensure 
        that the law does not provide incentives for small and mid-size 
        employers to self-insure or create adverse selection in the 
        risk pools of large group insurers and self-insured employers. 
        Not later than 18 months after the first day of Y1, the 
        Commissioner shall submit to Congress and the applicable 
        agencies an updated report on such study, including updates on 
        such recommendations.

SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND 
              SUBSTANCE ABUSE DISORDER BENEFITS.

    (a) Nondiscrimination in Benefits.--A qualified health benefits 
plan shall comply with standards established by the Commissioner to 
prohibit discrimination in health benefits or benefit structures for 
qualified health benefits plans, building from sections 702 of Employee 
Retirement Income Security Act of 1974, 2702 of the Public Health 
Service Act, and section 9802 of the Internal Revenue Code of 1986.
    (b) Parity in Mental Health and Substance Abuse Disorder 
Benefits.--To the extent such provisions are not superceded by or 
inconsistent with subtitle C, the provisions of section 2705 (other 
than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public 
Health Service Act shall apply to a qualified health benefits plan, 
regardless of whether it is offered in the individual or group market, 
in the same manner as such provisions apply to health insurance 
coverage offered in the large group market.

SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

    (a) In General.--A qualified health benefits plan that uses a 
provider network for items and services shall meet such standards 
respecting provider networks as the Commissioner may establish to 
assure the adequacy of such networks in ensuring enrollee access to 
such items and services and transparency in the cost-sharing 
differentials between in-network coverage and out-of-network coverage.
    (b) Internet Access to Information.--A qualified health benefits 
plan that uses a provider network shall provide a current listing of 
all providers in its network on its website and such data shall be 
available on the Health Insurance Exchange website as a `click through' 
from the basic information on that plan. The Commissioner shall also 
establish an on-line system whereby an individual may select by name 
any medical provider (as defined by the Commissioner) and be informed 
of the plan or plans with which that provider is contracting.
    (c) Provider Network Defined.--In this subdivision, the term 
``provider network'' means the providers with respect to which covered 
benefits, treatments, and services are available under a health 
benefits plan.

SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

    The QHBP offering entity shall provide that for any plan year in 
which a qualified health benefits plan that the entity offers has a 
medical loss ratio (expressed as a percentage) that is less than a 
percentage (not less than 85 percent) specified by the Commissioner, 
the QHBP offering entity offering such plan shall provide for rebates 
to enrollees of payment sufficient to meet such loss ratio. The 
Commissioner shall establish a uniform definition of medical loss ratio 
and methodology for determining how to calculate the medical loss 
ratio. Such methodology shall be designed to take into account the 
special circumstances of smaller and newer plans.

SEC. 117. CONSISTENCY OF COSTS AND COVERAGE UNDER QUALIFIED HEALTH 
              BENEFITS PLANS DURING PLAN YEAR.

    In the case of health insurance coverage offered under a qualified 
health benefits plan, the coverage and cost of coverage may not be 
changed during the course of a plan year except to increase coverage to 
the enrollee or to lower costs to the enrollee.

    Subtitle C--Standards Guaranteeing Access to Essential Benefits

SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

    (a) In General.--A qualified health benefits plan shall provide 
coverage that at least meets the benefit standards adopted under 
section 124 for the essential benefits package described in section 122 
for the plan year involved.
    (b) Choice of Coverage.--
            (1) Non-exchange-participating health benefits plans.--In 
        the case of a qualified health benefits plan that is not an 
        Exchange-participating health benefits plan, such plan may 
        offer such coverage in addition to the essential benefits 
        package as the QHBP offering entity may specify.
            (2) Exchange-participating health benefits plans.--In the 
        case of an Exchange-participating health benefits plan, such 
        plan is required under section 203 to provide specified levels 
        of benefits and, in the case of a plan offering a premium-plus 
        level of benefits, provide additional benefits.
            (3) Continuation of offering of separate excepted benefits 
        coverage.--Nothing in this subdivision shall be construed as 
        affecting the offering of health benefits in the form of 
        excepted benefits (described in section 102(b)(1)(B)(ii)) if 
        such benefits are offered under a separate policy, contract, or 
        certificate of insurance.
    (c) No Restrictions on Coverage Unrelated to Clinical 
Appropriateness.--A qualified health benefits plan may not impose any 
restriction (other than cost-sharing) unrelated to clinical 
appropriateness on the coverage of the health care items and services.

SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

    (a) In General.--In this subdivision, the term ``essential benefits 
package'' means health benefits coverage, consistent with standards 
adopted under section 124 to ensure the provision of quality health 
care and financial security, that--
            (1) provides payment for the items and services described 
        in subsection (b) in accordance with generally accepted 
        standards of medical or other appropriate clinical or 
        professional practice;
            (2) limits cost-sharing for such covered health care items 
        and services in accordance with such benefit standards, 
        consistent with subsection (c);
            (3) does not impose any annual or lifetime limit on the 
        coverage of covered health care items and services;
            (4) complies with section 115(a) (relating to network 
        adequacy); and
            (5) is equivalent, as certified by Office of the Actuary of 
        the Centers for Medicare & Medicaid Services, to the average 
        prevailing employer-sponsored coverage.
    (b) Minimum Services to Be Covered.--The items and services 
described in this subsection are the following:
            (1) Hospitalization.
            (2) Outpatient hospital and outpatient clinic services, 
        including emergency department services.
            (3) Professional services of physicians and other health 
        professionals.
            (4) Such services, equipment, and supplies incident to the 
        services of a physician's or a health professional's delivery 
        of care in institutional settings, physician offices, patients' 
        homes or place of residence, or other settings, as appropriate.
            (5) Prescription drugs.
            (6) Rehabilitative and habilitative services.
            (7) Mental health and substance use disorder services.
            (8) Preventive services, including those services 
        recommended with a grade of A or B by the Task Force on 
        Clinical Preventive Services and including mental health and 
        substance abuse services recommended by the Task Force on 
        Clinical Preventive Services and those mental health and 
        substance abuse services with compelling research or evidence, 
        including Screening, Brief Intervention and Referral to 
        Treatment (SBIRT), and those vaccines recommended for use by 
        the Director of the Centers for Disease Control and Prevention.
            (9) Maternity care.
            (10) Well baby and well child care and early and periodic 
        screening, diagnostic, and treatment services (as defined in 
        section 1905(r) of the Social Security Act) at least for 
        children under 21 years of age.
            (11) Durable medical equipment, prosthetics, orthotics and 
        related supplies.
    (c) Requirements Relating to Cost-sharing and Minimum Actuarial 
Value.--
            (1) No cost-sharing for preventive services.--There shall 
        be no cost-sharing under the essential benefits package for 
        preventive items and services (as specified under the benefit 
        standards), including well baby and well child care.
            (2) Annual limitation.--
                    (A) Annual limitation.--The cost-sharing incurred 
                under the essential benefits package with respect to an 
                individual (or family) for a year does not exceed the 
                applicable level specified in subparagraph (B).
                    (B) Applicable level.--The applicable level 
                specified in this subparagraph for Y1 is $5,000 for an 
                individual and $10,000 for a family. Such levels shall 
                be increased (rounded to the nearest $100) for each 
                subsequent year by the annual percentage increase in 
                the Consumer Price Index (United States city average) 
                applicable to such year.
                    (C) Use of copayments.--In establishing cost-
                sharing levels for basic, enhanced, and premium plans 
                under this subsection, the Secretary shall, to the 
                maximum extent possible, use only copayments and not 
                coinsurance.
            (3) Minimum actuarial value.--
                    (A) In general.--The cost-sharing under the 
                essential benefits package shall be designed to provide 
                a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 
                approximately 70 percent of the full actuarial value of 
                the benefits provided under the reference benefits 
                package described in subparagraph (B).
                    (B) Reference benefits package described.--The 
                reference benefits package described in this 
                subparagraph is the essential benefits package if there 
                were no cost-sharing imposed.

SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.

    (a) Establishment.--
            (1) In general.--There is established a private-public 
        advisory committee which shall be a panel of medical and other 
        experts to be known as the Health Benefits Advisory Committee 
        to recommend covered benefits and essential, enhanced, and 
        premium plans.
            (2) Chair.--The Surgeon General shall be a member and the 
        chair of the Health Benefits Advisory Committee.
            (3) Membership.--The Health Benefits Advisory Committee 
        shall be composed of the following members, in addition to the 
        Surgeon General:
                    (A) 9 members who are not Federal employees or 
                officers and who are appointed by the President.
                    (B) 9 members who are not Federal employees or 
                officers and who are appointed by the Comptroller 
                General of the United States in a manner similar to the 
                manner in which the Comptroller General appoints 
                members to the Medicare Payment Advisory Commission 
                under section 1805(c) of the Social Security Act.
                    (C) Such even number of members (not to exceed 8) 
                who are Federal employees and officers, as the 
                President may appoint.
        The membership of the Committee shall include one or more 
        experts in scientific evidence and clinical practice of 
        integrative health care services. Such initial appointments 
        shall be made not later than 60 days after the date of the 
        enactment of this Act.
            (4) Terms.--Each member of the Health Benefits Advisory 
        Committee shall serve a 3-year term on the Committee, except 
        that the terms of the initial members shall be adjusted in 
        order to provide for a staggered term of appointment for all 
        such members.
            (5) Participation.--The membership of the Health Benefits 
        Advisory Committee shall at least reflect providers, employers, 
        labor, health insurance issuers, experts in health care 
        financing and delivery, experts in racial and ethnic 
        disparities, experts in care for those with disabilities, 
        representatives of relevant governmental agencies. and at least 
        one practicing physician or other health professional and an 
        expert on children's health and shall represent a balance among 
        various sectors of the health care system so that no single 
        sector unduly influences the recommendations of such Committee. 
        The membership of the Committee shall also include educated 
        patients, consumer advocates, or both, who shall include 
        persons who represent individuals affected by a specific 
        disease or medical condition, are knowledgeable about the 
        health care system, and have received training regarding 
        health, medical, and scientific matters.
    (b) Duties.--
            (1) Recommendations on benefit standards.--The Health 
        Benefits Advisory Committee shall recommend to the Secretary of 
        Health and Human Services (in this subtitle referred to as the 
        ``Secretary'') benefit standards (as defined in paragraph (4)), 
        and periodic updates to such standards. In developing such 
        recommendations, the Committee shall--
                    (A) take into account innovation in health care,
                    (B) consider how such standards could reduce health 
                disparities,
                    (C) take into account integrative health care 
                services, and
                    (D) take into account typical multiemployer plan 
                benefit structures and the impact of the essential 
                benefit package on such plans.
            (2) Deadline.--The Health Benefits Advisory Committee shall 
        recommend initial benefit standards to the Secretary not later 
        than 1 year after the date of the enactment of this Act.
            (3) State input.--The Health Benefits Advisory Committee 
        shall examine the health coverage laws and benefits of each 
        State in developing recommendations under this subsection and 
        may incorporate such coverage and benefits as the Committee 
        determines to be appropriate and consistent with this division. 
        The Health Benefits Advisory Committee shall also seek input 
        from the States and consider recommendations on how to ensure 
        that the quality of health coverage does not decline in any 
        State.
            (4) Public input.--The Health Benefits Advisory Committee 
        shall allow for public input as a part of developing 
        recommendations under this subsection.
            (5) Benefit standards defined.--In this subtitle, the term 
        ``benefit standards'' means standards respecting--
                    (A) the essential benefits package described in 
                section 122, including categories of covered 
                treatments, items and services within benefit classes, 
                and cost-sharing; and
                    (B) the cost-sharing levels for enhanced plans and 
                premium plans (as provided under section 203(c)) 
                consistent with paragraph (5).
            (6) Levels of cost-sharing for enhanced and premium 
        plans.--
                    (A) Enhanced plan.--The level of cost-sharing for 
                enhanced plans shall be designed so that such plans 
                have benefits that are actuarially equivalent to 
                approximately 85 percent of the actuarial value of the 
                benefits provided under the reference benefits package 
                described in section 122(c)(3)(B).
                    (B) Premium plan.--The level of cost-sharing for 
                premium plans shall be designed so that such plans have 
                benefits that are actuarially equivalent to 
                approximately 95 percent of the actuarial value of the 
                benefits provided under the reference benefits package 
                described in section 122(c)(3)(B).
            (7) Recommendations of integrative health care services 
        task force.--
                    (A) Inclusion in committee's recommendations.--The 
                Health Benefits Advisory Committee shall include in its 
                recommendations under paragraph (1) the recommendations 
                made by the Integrative Health Care Services Task Force 
                established under subparagraph (B).
                    (B) Establishment of task force.--The Health 
                Benefits Advisory Committee shall establish an 
                Integrative Health Care Services Task Force. Such Task 
                Force shall consist of 5 experts with expertise in 
                research in, and practice of, integrative health care. 
                Such experts shall be appointed by the Committee from 
                among experts nominated by the Secretary, in 
                consultation with the National Center for Complementary 
                and Alternative Medicine at the National Institutes of 
                Health. The duty of the Task Force shall be to make 
                recommendations to the Committee on evidence-based, 
                clinically effective, and safe integrative care 
                services.
    (c) Operations.--
            (1) Per diem pay.--Each member of the Health Benefits 
        Advisory Committee shall receive travel expenses, including per 
        diem in accordance with applicable provisions under subchapter 
        I of chapter 57 of title 5, United States Code, and shall 
        otherwise serve without additional pay.
            (2) Members not treated as federal employees.--Members of 
        the Health Benefits Advisory Committee shall not be considered 
        employees of the Federal government solely by reason of any 
        service on the Committee.
            (3) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.), other than section 14, shall apply to the 
        Health Benefits Advisory Committee.
    (d) Publication.--The Secretary shall provide for publication in 
the Federal Register and the posting on the Internet website of the 
Department of Health and Human Services of all recommendations made by 
the Health Benefits Advisory Committee under this section.

SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT 
              STANDARDS.

    (a) Process for Adoption of Recommendations.--
            (1) Review of recommended standards.--Not later than 45 
        days after the date of receipt of benefit standards recommended 
        under section 123 (including such standards as modified under 
        paragraph (2)(B)), the Secretary shall review such standards 
        and shall determine whether to propose adoption of such 
        standards as a package.
            (2) Determination to adopt standards.--If the Secretary 
        determines--
                    (A) to propose adoption of benefit standards so 
                recommended as a package, the Secretary shall, by 
                regulation under section 553 of title 5, United States 
                Code, propose adoption such standards; or
                    (B) not to propose adoption of such standards as a 
                package, the Secretary shall notify the Health Benefits 
                Advisory Committee in writing of such determination and 
                the reasons for not proposing the adoption of such 
                recommendation and provide the Committee with a further 
                opportunity to modify its previous recommendations and 
                submit new recommendations to the Secretary on a timely 
                basis.
            (3) Contingency.--If, because of the application of 
        paragraph (2)(B), the Secretary would otherwise be unable to 
        propose initial adoption of such recommended standards by the 
        deadline specified in subsection (b)(1), the Secretary shall, 
        by regulation under section 553 of title 5, United States Code, 
        propose adoption of initial benefit standards by such deadline.
            (4) Publication.--The Secretary shall provide for 
        publication in the Federal Register of all determinations made 
        by the Secretary under this subsection.
    (b) Adoption of Standards.--
            (1) Initial standards.--Not later than 18 months after the 
        date of the enactment of this Act, the Secretary shall, through 
        the rulemaking process consistent with subsection (a), adopt an 
        initial set of benefit standards.
            (2) Periodic updating standards.--Under subsection (a), the 
        Secretary shall provide for the periodic updating of the 
        benefit standards previously adopted under this section.
            (3) Requirement.--The Secretary may not adopt any benefit 
        standards for an essential benefits package or for level of 
        cost-sharing that are inconsistent with the requirements for 
        such a package or level under sections 122 and 123(b)(5).

SEC. 125. PROHIBITION OF DISCRIMINATION IN HEALTH CARE SERVICES BASED 
              ON RELIGIOUS OR SPIRITUAL CONTENT.

    Neither the Commissioner nor any health insurance issuer offering 
health insurance coverage through the Exchange shall discriminate in 
approving or covering a health care service on the basis of its 
religious or spiritual content if expenditures for such a health care 
service are allowable as a deduction under 213(d) of the Internal 
Revenue Code of 1986, as in effect on January 1, 2009.

              Subtitle D--Additional Consumer Protections

SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.

    The Commissioner shall establish uniform marketing standards that 
all insured QHBP offering entities shall meet.

SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.

    (a) In General.--A QHBP offering entity shall provide for timely 
grievance and appeals mechanisms that the Commissioner shall establish.
    (b) Internal Claims and Appeals Process.--Under a qualified health 
benefits plan the QHBP offering entity shall provide an internal claims 
and appeals process that initially incorporates the claims and appeals 
procedures (including urgent claims) set forth at section 2560.503-1 of 
title 29, Code of Federal Regulations, as published on November 21, 
2000 (65 Fed. Reg. 70246) and shall update such process in accordance 
with any standards that the Commissioner may establish.
    (c) External Review Process.--
            (1) In general.--The Commissioner shall establish an 
        external review process (including procedures for expedited 
        reviews of urgent claims) that provides for an impartial, 
        independent, and de novo review of denied claims under this 
        subdivision.
            (2) Requiring fair grievance and appeals mechanisms.--A 
        determination made, with respect to a qualified health benefits 
        plan offered by a QHBP offering entity, under the external 
        review process established under this subsection shall be 
        binding on the plan and the entity.
    (d) Construction.--Nothing in this section shall be construed as 
affecting the availability of judicial review under State law for 
adverse decisions under subsection (b) or (c), subject to section 151.

SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.

    (a) Accurate and Timely Disclosure.--
            (1) In general.--A qualified health benefits plan shall 
        comply with standards established by the Commissioner for the 
        accurate and timely disclosure of plan documents, plan terms 
        and conditions, claims payment policies and practices, periodic 
        financial disclosure, data on enrollment, data on 
        disenrollment, data on the number of claims denials, data on 
        rating practices, information on cost-sharing and payments with 
        respect to any out-of-network coverage, and other information 
        as determined appropriate by the Commissioner. The Commissioner 
        shall require that such disclosure be provided in plain 
        language.
            (2) Plain language.--In this subsection, the term ``plain 
        language'' means language that the intended audience, including 
        individuals with limited English proficiency, can readily 
        understand and use because that language is clean, concise, 
        well-organized, and follows other best practices of plain 
        language writing.
            (3) Guidance.--The Commissioner shall develop and issue 
        guidance on best practices of plain language writing.
    (b) Contracting Reimbursement.--A qualified health benefits plan 
shall comply with standards established by the Commissioner to ensure 
transparency to each health care provider relating to reimbursement 
arrangements between such plan and such provider.
    (c) Advance Notice of Plan Changes.--A change in a qualified health 
benefits plan shall not be made without such reasonable and timely 
advance notice to enrollees of such change.
    (d) Identification of Providers Trained and Accredited in 
Integrative Medicine.--A qualified health benefit plan shall include in 
the disclosure required under subsection (a) identification to 
enrollees of any providers of services under the plan that are trained 
and accredited in integrative health medicine.

SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED 
              THROUGH THE HEALTH INSURANCE EXCHANGE.

    The requirements of the previous provisions of this subtitle shall 
apply to qualified health benefits plans that are not being offered 
through the Health Insurance Exchange only to the extent specified by 
the Commissioner.

SEC. 135. TIMELY PAYMENT OF CLAIMS.

    A QHBP offering entity shall comply with the requirements of 
section 1857(f) of the Social Security Act with respect to a qualified 
health benefits plan it offers in the same manner an Medicare Advantage 
organization is required to comply with such requirements with respect 
to a Medicare Advantage plan it offers under part C of Medicare.

SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF 
              BENEFITS.

    The Commissioner shall establish standards for the coordination and 
subrogation of benefits and reimbursement of payments in cases 
involving individuals and multiple plan coverage.

SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.

    A QHBP offering entity is required to comply with standards for 
electronic financial and administrative transactions under section 
1173A of the Social Security Act, added by section 163(a).

SEC. 138. RECORDS RELATIVE TO PRESCRIPTION INFORMATION.

    (a) In General.--A qualified health benefits plan shall ensure that 
its records relative to prescription information containing patient 
identifiable and prescriber-identifiable data are maintained in 
accordance with this section.''
    (b) Requirements.--
            (1) In general.--Records described in subsection (a) may 
        not be licensed, transferred, used, or sold by any pharmacy 
        benefits manager, insurance company, electronic transmission 
        intermediary, retail, mail order, or Internet pharmacy or other 
        similar entity, for any commercial purpose, except for the 
        limited purposes of--
                    (A) pharmacy reimbursement;
                    (B) formulary compliance;
                    (C) care management;
                    (D) utilization review by a health care provider, 
                the patient's insurance provider or the agent of 
                either;
                    (E) health care research; or
                    (F) as otherwise provided by law.
            (2) Commercial purpose.--For purposes of paragraph (1), the 
        term ``commercial purpose'' includes, but is not limited to, 
        advertising, marketing, promotion, or any activity that could 
        be used to influence sales or market share of a pharmaceutical 
        product, influence or evaluate the prescribing behavior of an 
        individual health care professional, or evaluate the 
        effectiveness of a professional pharmaceutical detailing sales 
        force.
    (c) Construction.--
            (1) Permitted practices.--Nothing in this section shall 
        prohibit--
                    (A) the dispensing of prescription medications to a 
                patient or to the patient's authorized representative;
                    (B) the transmission of prescription information 
                between an authorized prescriber and a licensed 
                pharmacy;
                    (C) the transfer of prescription information 
                between licensed pharmacies;
                    (D) the transfer of prescription records that may 
                occur in the event a pharmacy ownership is changed or 
                transferred;
                    (E) care management educational communications 
                provided to a patient about the patient's health 
                condition, adherence to a prescribed course of therapy, 
                or other information about the drug being dispensed, 
                treatment options, or clinical trials.
            (2) De-identified data.--Nothing in this section shall 
        prohibit the collection, use, transfer, or sale of patient and 
        prescriber de-identified data by zip code, geographic region, 
        or medical specialty for commercial purposes.

                         Subtitle E--Governance

SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.

    (a) In General.--There is hereby established, as an independent 
agency in the executive branch of the Government, a Health Choices 
Administration (in this subdivision referred to as the 
``Administration'').
    (b) Commissioner.--
            (1) In general.--The Administration shall be headed by a 
        Health Choices Commissioner (in this subdivision referred to as 
        the ``Commissioner'') who shall be appointed by the President, 
        by and with the advice and consent of the Senate.
            (2) Compensation; etc.--The provisions of paragraphs (2), 
        (5) and (7) of subsection (a) (relating to compensation, terms, 
        general powers, rulemaking, and delegation) of section 702 of 
        the Social Security Act (42 U.S.C. 902) shall apply to the 
        Commissioner and the Administration in the same manner as such 
        provisions apply to the Commissioner of Social Security and the 
        Social Security Administration.

SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.

    (a) Duties.--The Commissioner is responsible for carrying out the 
following functions under this subdivision:
            (1) Qualified plan standards.--The establishment of 
        qualified health benefits plan standards under this title, 
        including the enforcement of such standards in coordination 
        with State insurance regulators and the Secretaries of Labor 
        and the Treasury.
            (2) Health insurance exchange.--The establishment and 
        operation of a Health Insurance Exchange under subtitle A of 
        title II.
            (3) Individual affordability credits.--The administration 
        of individual affordability credits under subtitle C of title 
        II, including determination of eligibility for such credits.
            (4) Additional functions.--Such additional functions as may 
        be specified in this subdivision.
    (b) Promoting Accountability.--
            (1) In general.--The Commissioner shall undertake 
        activities in accordance with this subtitle to promote 
        accountability of QHBP offering entities in meeting Federal 
        health insurance requirements, regardless of whether such 
        accountability is with respect to qualified health benefits 
        plans offered through the Health Insurance Exchange or outside 
        of such Exchange.
            (2) Compliance examination and audits.--
                    (A) In general.--The commissioner shall, in 
                coordination with States, conduct audits of qualified 
                health benefits plan compliance with Federal 
                requirements.   Such audits may include random 
                compliance audits and targeted audits in response to 
                complaints or other suspected non-compliance.
                    (B) Recoupment of costs in connection with 
                examination and audits.--The Commissioner is authorized 
                to recoup from qualified health benefits plans 
                reimbursement for the costs of such examinations and 
                audit of such QHBP offering entities.
    (c) Data Collection.--The Commissioner shall collect data for 
purposes of carrying out the Commissioner's duties, including for 
purposes of promoting quality and value, protecting consumers, and 
addressing disparities in health and health care and may share such 
data with the Secretary of Health and Human Services.
    (d) Sanctions Authority.--
            (1) In general.--In the case that the Commissioner 
        determines that a QHBP offering entity violates a requirement 
        of this title, the Commissioner may, in coordination with State 
        insurance regulators and the Secretary of Labor, provide, in 
        addition to any other remedies authorized by law, for any of 
        the remedies described in paragraph (2).
            (2) Remedies.--The remedies described in this paragraph, 
        with respect to a qualified health benefits plan offered by a 
        QHBP offering entity, are--
                    (A) civil money penalties of not more than the 
                amount that would be applicable under similar 
                circumstances for similar violations under section 
                1857(g) of the Social Security Act;
                    (B) suspension of enrollment of individuals under 
                such plan after the date the Commissioner notifies the 
                entity of a determination under paragraph (1) and until 
                the Commissioner is satisfied that the basis for such 
                determination has been corrected and is not likely to 
                recur;
                    (C) in the case of an Exchange-participating health 
                benefits plan, suspension of payment to the entity 
                under the Health Insurance Exchange for individuals 
                enrolled in such plan after the date the Commissioner 
                notifies the entity of a determination under paragraph 
                (1) and until the Secretary is satisfied that the basis 
                for such determination has been corrected and is not 
                likely to recur; or
                    (D) working with State insurance regulators to 
                terminate plans for repeated failure by the offering 
                entity to meet the requirements of this title.
    (e) Standard Definitions of Insurance and Medical Terms.--The 
Commissioner shall provide for the development of standards for the 
definitions of terms used in health insurance coverage, including 
insurance-related terms.
    (f) Efficiency in Administration.--The Commissioner shall issue 
regulations for the effective and efficient administration of the 
Health Insurance Exchange and affordability credits under subtitle C, 
including, with respect to the determination of eligibility for 
affordability credits, the use of personnel who are employed in 
accordance with the requirements of title 5, United States Code, to 
carry out the duties of the Commissioner or, in the case of sections 
208 and 241(b)(2), the use of State personnel who are employed in 
accordance with standards prescribed by the Office of Personnel 
Management pursuant to section 208 of the Intergovernmental Personnel 
Act of 1970 (42 U.S.C. 4728).

SEC. 143. CONSULTATION AND COORDINATION.

    (a) Consultation.--In carrying out the Commissioner's duties under 
this subdivision, the Commissioner, as appropriate, shall consult with 
at least with the following:
            (1) The National Association of Insurance Commissioners, 
        State attorneys general, and State insurance regulators, 
        including concerning the standards for insured qualified health 
        benefits plans under this title and enforcement of such 
        standards.
            (2) Appropriate State agencies, specifically concerning the 
        administration of individual affordability credits under 
        subtitle C of title II and the offering of Exchange-
        participating health benefits plans, to Medicaid eligible 
        individuals under subtitle A of such title.
            (3) Other appropriate Federal agencies.
            (4) Indian tribes and tribal organizations.
            (5) The National Association of Insurance Commissioners for 
        purposes of using model guidelines established by such 
        association for purposes of subtitles B and D.
    (b) Coordination.--
            (1) In general.--In carrying out the functions of the 
        Commissioner, including with respect to the enforcement of the 
        provisions of this subdivision, the Commissioner shall work in 
        coordination with existing Federal and State entities to the 
        maximum extent feasible consistent with this subdivision and in 
        a manner that prevents conflicts of interest in duties and 
        ensures effective enforcement.
            (2) Uniform standards.--The Commissioner, in coordination 
        with such entities, shall seek to achieve uniform standards 
        that adequately protect consumers in a manner that does not 
        unreasonably affect employers and insurers.

SEC. 144. HEALTH INSURANCE OMBUDSMAN.

    (a) In General.--The Commissioner shall appoint within the Health 
Choices Administration a Qualified Health Benefits Plan Ombudsman who 
shall have expertise and experience in the fields of health care and 
education of (and assistance to) individuals.
    (b) Duties.--The Qualified Health Benefits Plan Ombudsman shall, in 
a linguistically appropriate manner--
            (1) receive complaints, grievances, and requests for 
        information submitted by individuals;
            (2) provide assistance with respect to complaints, 
        grievances, and requests referred to in paragraph (1), 
        including--
                    (A) helping individuals determine the relevant 
                information needed to seek an appeal of a decision or 
                determination;
                    (B) assistance to such individuals with any 
                problems arising from disenrollment from such a plan;
                    (C) assistance to such individuals in choosing a 
                qualified health benefits plan in which to enroll; and
                    (D) assistance to such individuals in presenting 
                information under subtitle C (relating to affordability 
                credits);
            (3) consult with educated patients and consumer advocates 
        (described in section 123(a)(5)); and
            (4) submit annual reports to Congress and the Commissioner 
        that describe the activities of the Ombudsman and that include 
        such recommendations for improvement in the administration of 
        this subdivision as the Ombudsman determines appropriate. The 
        Ombudsman shall not serve as an advocate for any increases in 
        payments or new coverage of services, but may identify issues 
        and problems in payment or coverage policies.

       Subtitle F--Relation to Other Requirements; Miscellaneous

SEC. 151. RELATION TO OTHER REQUIREMENTS.

    (a) Coverage Not Offered Through Exchange.--
            (1) In general.--In the case of health insurance coverage 
        not offered through the Health Insurance Exchange (whether or 
        not offered in connection with an employment-based health 
        plan), and in the case of employment-based health plans, the 
        requirements of this title do not supercede any requirements 
        applicable under titles XXII and XXVII of the Public Health 
        Service Act, parts 6 and 7 of subtitle B of title I of the 
        Employee Retirement Income Security Act of 1974, or State law, 
        except insofar as such requirements prevent the application of 
        a requirement of this subdivision, as determined by the 
        Commissioner.
            (2) Construction.--Nothing in paragraph (1) shall be 
        construed as affecting the application of section 514 of the 
        Employee Retirement Income Security Act of 1974.
    (b) Coverage Offered Through Exchange.--
            (1) In general.--In the case of health insurance coverage 
        offered through the Health Insurance Exchange--
                    (A) the requirements of this title do not supercede 
                any requirements (including requirements relating to 
                genetic information nondiscrimination and mental 
                health) applicable under title XXVII of the Public 
                Health Service Act or under State law, except insofar 
                as such requirements prevent the application of a 
                requirement of this subdivision, as determined by the 
                Commissioner; and
                    (B) individual rights and remedies under State laws 
                shall apply.
            (2) Construction.--In the case of coverage described in 
        paragraph (1), nothing in such paragraph shall be construed as 
        preventing the application of rights and remedies under State 
        laws with respect to any requirement referred to in paragraph 
        (1)(A).

SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.

    (a) In General.--Except as otherwise explicitly permitted by this 
division and by subsequent regulations consistent with this division, 
all health care and related services (including insurance coverage and 
public health activities) covered by this division shall be provided 
without regard to personal characteristics extraneous to the provision 
of high quality health care or related services.
    (b) Implementation.--To implement the requirement set forth in 
subsection (a), the Secretary of Health and Human Services shall, not 
later than 18 months after the date of the enactment of this Act, 
promulgate such regulations as are necessary or appropriate to insure 
that all health care and related services (including insurance coverage 
and public health activities) covered by this division are provided 
(whether directly or through contractual, licensing, or other 
arrangements) without regard to personal characteristics extraneous to 
the provision of high quality health care or related services.

SEC. 153. WHISTLEBLOWER PROTECTION.

    (a) Retaliation Prohibited.--No employer may discharge any employee 
or otherwise discriminate against any employee with respect to his 
compensation, terms, conditions, or other privileges of employment 
because the employee (or any person acting pursuant to a request of the 
employee)--
            (1) provided, caused to be provided, or is about to provide 
        or cause to be provided to the employer, the Federal 
        Government, or the attorney general of a State information 
        relating to any violation of, or any act or omission the 
        employee reasonably believes to be a violation of any provision 
        of this division or any order, rule, or regulation promulgated 
        under this division;
            (2) testified or is about to testify in a proceeding 
        concerning such violation;
            (3) assisted or participated or is about to assist or 
        participate in such a proceeding; or
            (4) objected to, or refused to participate in, any 
        activity, policy, practice, or assigned task that the employee 
        (or other such person) reasonably believed to be in violation 
        of any provision of this division or any order, rule, or 
        regulation promulgated under this division.
    (b) Enforcement Action.--An employee covered by this section who 
alleges discrimination by an employer in violation of subsection (a) 
may bring an action governed by the rules, procedures, legal burdens of 
proof, and remedies set forth in section 40(b) of the Consumer Product 
Safety Act (15 U.S.C. 2087(b)).
    (c) Employer Defined.--As used in this section, the term 
``employer'' means any person (including one or more individuals, 
partnerships, associations, corporations, trusts, professional 
membership organization including a certification, disciplinary, or 
other professional body, unincorporated organizations, nongovernmental 
organizations, or trustees) engaged in profit or nonprofit business or 
industry whose activities are governed by this division, and any agent, 
contractor, subcontractor, grantee, or consultant of such person.
    (d) Rule of Construction.--The rule of construction set forth in 
section 20109(h) of title 49, United States Code, shall also apply to 
this section.

SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.

    Nothing in this subdivision shall be construed to alter or 
supercede any statutory or other obligation to engage in collective 
bargaining over the terms and conditions of employment related to 
health care.

SEC. 155. SEVERABILITY.

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

SEC. 156. RULE OF CONSTRUCTION REGARDING HAWAII PREPAID HEALTH CARE 
              ACT.

    (a) In General.--Subject to this section--
            (1) nothing in this subdivision (or an amendment made by 
        this subdivision) shall be construed to modify or limit the 
        application of the exemption for the Hawaii Prepaid Health Care 
        Act (Haw. Rev. Stat. Sec. Sec.  393-1 et seq.) as provided for 
        under section 514(b)(5) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1144(b)(5)), and such exemption 
        shall also apply with respect to the provisions of this 
        subdivision, and
            (2) for purposes of this subdivision (and the amendments 
        made by this subdivision), coverage provided pursuant to the 
        Hawaii Prepaid Health Care Act shall be treated as a qualified 
        health benefits plan providing acceptable coverage so long as 
        the Secretary of Labor determines that such coverage for 
        employees (taking into account the benefits and the cost to 
        employees for such benefits) is substantially equivalent to or 
        greater than the coverage provided for employees pursuant to 
        the essential benefits package.
    (b) Coordination With State Law of Hawaii.--The Commissioner shall, 
based on ongoing consultation with the appropriate officials of the 
State of Hawaii, make adjustments to rules and regulations of the 
Commissioner under this subdivision as may be necessary, as determined 
by the Commissioner, to most effectively coordinate the provisions of 
this subdivision with the provisions of the Hawaii Prepaid Health Care 
Act, taking into account any changes made from time to time to the 
Hawaii Prepaid Health Care Act and related laws of such State.

SEC. 157. INCREASING MEANINGFUL USE OF ELECTRONIC HEALTH RECORDS.

    (a) Study.--The Commissioner shall conduct a study on methods that 
QHBP offering entities can use to encourage increased meaningful use of 
electronic health records by health care providers, including--
            (1) qualified health benefits plans offering higher 
        reimbursement rates for such meaningful use; and
            (2) promoting the use by health care providers of low-cost 
        available electronic health record software packages, such as 
        software made available to health care providers by the 
        Veterans Administration.
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Commissioner shall submit to the Congress a report 
containing--
            (1) the results of the study under subsection (a); and
            (2) recommendations concerning whether qualified health 
        benefits plans should increase reimbursement rates to health 
        care providers to increase meaningful use of electronic health 
        records by such providers.
    (c) Requirements.--
            (1) In general.--Not later than one year after the date the 
        report is submitted to the Congress under subsection (b), if, 
        under subsection (b)(2), the Commissioner recommends increased 
        reimbursement rates, the Commissioner shall require that 
        qualified health benefits plans increase reimbursement rates 
        for health care providers that show meaningful use of 
        electronic health records.
            (2) Cost limitation.--An increase in rates under paragraph 
        (1) shall not result in any increase in affordability premium 
        or cost-sharing credits under subtitle C of title II of this 
        subdivision.

SEC. 158. PRIVATE RIGHT OF CONTRACT WITH HEALTH CARE PROVIDERS.

    Nothing in this division shall be construed to preclude any 
participant or beneficiary in a group health plan from entering into 
any contract or arrangement for health care with any health care 
provider.

                     Subtitle G--Early Investments

SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

    (a) Group Health Insurance Coverage.--Title XXVII of the Public 
Health Service Act is amended by inserting after section 2713 the 
following new section:

``SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

    ``(a) In General.--Each health insurance issuer that offers health 
insurance coverage in the small or large group market shall provide 
that for any plan year in which the coverage has a medical loss ratio 
below a level specified by the Secretary, the issuer shall provide in a 
manner specified by the Secretary for rebates to enrollees of payment 
sufficient to meet such loss ratio. Such methodology shall be set at 
the highest level medical loss ratio possible that is designed to 
ensure adequate participation by issuers, competition in the health 
insurance market, and value for consumers so that their premiums are 
used for services.
    ``(b) Uniform Definitions.--The Secretary shall establish a uniform 
definition of medical loss ratio and methodology for determining how to 
calculate the medical loss ratio. Such methodology shall be designed to 
take into account the special circumstances of smaller plans, different 
types of plans, and newer plans.''.
    (b) Individual Health Insurance Coverage.--Such title is further 
amended by inserting after section 2753 the following new section:

``SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

    ``The provisions of section 2714 shall apply to health insurance 
coverage offered in the individual market in the same manner as such 
provisions apply to health insurance coverage offered in the small or 
large group market.''.
    (c) Immediate Implementation.--The amendments made by this section 
shall apply in the group and individual market for plan years beginning 
on or after January 1, 2011.

SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.

    (a) Clarification Regarding Application of Guaranteed Renewability 
of Individual Health Insurance Coverage.--Section 2742 of the Public 
Health Service Act (42 U.S.C. 300gg-42) is amended--
            (1) in its heading, by inserting ``and continuation in 
        force, including prohibition of rescission,'' after 
        ``guaranteed renewability''; and
            (2) in subsection (a), by inserting ``, including without 
        rescission,'' after ``continue in force''.
    (b) Secretarial Guidance Regarding Rescissions.--Section 2742 of 
such Act (42 U.S.C. 300gg-42) is amended by adding at the end the 
following:
    ``(f) Rescission.--A health insurance issuer may rescind health 
insurance coverage only upon clear and convincing evidence of fraud 
described in subsection (b)(2). The Secretary, no later than July 1, 
2010, shall issue guidance implementing this requirement, including 
procedures for independent, external third party review.''.
    (c) Opportunity for Independent, External Third Party Review in 
Certain Cases.--Subpart 1 of part B of title XXVII of such Act (42 
U.S.C. 300gg-41 et seq.) is amended by adding at the end the following:

``SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW 
              IN CASES OF RESCISSION.

    ``(a) Notice and Review Right.--If a health insurance issuer 
determines to rescind health insurance coverage for an individual in 
the individual market, before such rescission may take effect the 
issuer shall provide the individual with notice of such proposed 
rescission and an opportunity for a review of such determination by an 
independent, external third party under procedures specified by the 
Secretary under section 2742(f).
    ``(b) Independent Determination.--If the individual requests such 
review by an independent, external third party of a rescission of 
health insurance coverage, the coverage shall remain in effect until 
such third party determines that the coverage may be rescinded under 
the guidance issued by the Secretary under section 2742(f).''.
    (d) Effective Date.--The amendments made by this section shall 
apply on and after October 1, 2010, with respect to health insurance 
coverage issued before, on, or after such date.

SEC. 163. ADMINISTRATIVE SIMPLIFICATION.

    (a) Standardizing Electronic Administrative Transactions.--
            (1) In general.--Part C of title XI of the Social Security 
        Act (42 U.S.C. 1320d et seq.) is amended by inserting after 
        section 1173 the following new section:

``SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

    ``(a) Standards for Financial and Administrative Transactions.--
            ``(1) In general.--The Secretary shall adopt and regularly 
        update standards consistent with the goals described in 
        paragraph (2).
            ``(2) Goals for financial and administrative 
        transactions.--The goals for standards under paragraph (1) are 
        that such standards shall--
                    ``(A) be unique with no conflicting or redundant 
                standards;
                    ``(B) be authoritative, permitting no additions or 
                constraints for electronic transactions, including 
                companion guides;
                    ``(C) be comprehensive, efficient and robust, 
                requiring minimal augmentation by paper transactions or 
                clarification by further communications;
                    ``(D) enable the real-time (or near real-time) 
                determination of an individual's financial 
                responsibility at the point of service and, to the 
                extent possible, prior to service, including whether 
                the individual is eligible for a specific service with 
                a specific physician at a specific facility, which may 
                include utilization of a machine-readable health plan 
                beneficiary identification card;
                    ``(E) enable, where feasible, near real-time 
                adjudication of claims;
                    ``(F) provide for timely acknowledgment, response, 
                and status reporting applicable to any electronic 
                transaction deemed appropriate by the Secretary;
                    ``(G) describe all data elements (such as reason 
                and remark codes) in unambiguous terms, not permit 
                optional fields, require that data elements be either 
                required or conditioned upon set values in other 
                fields, and prohibit additional conditions; and
                    ``(H) harmonize all common data elements across 
                administrative and clinical transaction standards.
            ``(3) Time for adoption.--Not later than 2 years after the 
        date of implementation of the X12 Version 5010 transaction 
        standards implemented under this part, the Secretary shall 
        adopt standards under this section.
            ``(4) Requirements for specific standards.--The standards 
        under this section shall be developed, adopted and enforced so 
        as to--
                    ``(A) clarify, refine, complete, and expand, as 
                needed, the standards required under section 1173;
                    ``(B) require paper versions of standardized 
                transactions to comply with the same standards as to 
                data content such that a fully compliant, equivalent 
                electronic transaction can be populated from the data 
                from a paper version;
                    ``(C) enable electronic funds transfers, in order 
                to allow automated reconciliation with the related 
                health care payment and remittance advice;
                    ``(D) require timely and transparent claim and 
                denial management processes, including tracking, 
                adjudication, and appeal processing;
                    ``(E) require the use of a standard electronic 
                transaction with which health care providers may 
                quickly and efficiently enroll with a health plan to 
                conduct the other electronic transactions provided for 
                in this part; and
                    ``(F) provide for other requirements relating to 
                administrative simplification as identified by the 
                Secretary, in consultation with stakeholders.
            ``(5) Building on existing standards.--In developing the 
        standards under this section, the Secretary shall build upon 
        existing and planned standards.
            ``(6) Implementation and enforcement.--Not later than 6 
        months after the date of the enactment of this section, the 
        Secretary shall submit to the appropriate committees of 
        Congress a plan for the implementation and enforcement, by not 
        later than 5 years after such date of enactment, of the 
        standards under this section. Such plan shall include--
                    ``(A) a process and timeframe with milestones for 
                developing the complete set of standards;
                    ``(B) an expedited upgrade program for continually 
                developing and approving additions and modifications to 
                the standards as often as annually to improve their 
                quality and extend their functionality to meet evolving 
                requirements in health care;
                    ``(C) programs to provide incentives for, and ease 
                the burden of, implementation for certain health care 
                providers, with special consideration given to such 
                providers serving rural or underserved areas and ensure 
                coordination with standards, implementation 
                specifications, and certification criteria being 
                adopted under the HITECH Act;
                    ``(D) programs to provide incentives for, and ease 
                the burden of, health care providers who volunteer to 
                participate in the process of setting standards for 
                electronic transactions;
                    ``(E) an estimate of total funds needed to ensure 
                timely completion of the implementation plan; and
                    ``(F) an enforcement process that includes timely 
                investigation of complaints, random audits to ensure 
                compliance, civil monetary and programmatic penalties 
                for non-compliance consistent with existing laws and 
                regulations, and a fair and reasonable appeals process 
                building off of enforcement provisions under this part.
    ``(b) Limitations on Use of Data.--Nothing in this section shall be 
construed to permit the use of information collected under this section 
in a manner that would adversely affect any individual.
    ``(c) Protection of Data.--The Secretary shall ensure (through the 
promulgation of regulations or otherwise) that all data collected 
pursuant to subsection (a) are--
            ``(1) used and disclosed in a manner that meets the HIPAA 
        privacy and security law (as defined in section 3009(a)(2) of 
        the Public Health Service Act), including any privacy or 
        security standard adopted under section 3004 of such Act; and
            ``(2) protected from all inappropriate internal use by any 
        entity that collects, stores, or receives the data, including 
        use of such data in determinations of eligibility (or continued 
        eligibility) in health plans, and from other inappropriate 
        uses, as defined by the Secretary.''.
            (2) Definitions.--Section 1171 of such Act (42 U.S.C. 
        1320d) is amended--
                    (A) in paragraph (7), by striking ``with reference 
                to'' and all that follows and inserting ``with 
                reference to a transaction or data element of health 
                information in section 1173 means implementation 
                specifications, certification criteria, operating 
                rules, messaging formats, codes, and code sets adopted 
                or established by the Secretary for the electronic 
                exchange and use of information''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(9) Operating rules.--The term `operating rules' means 
        business rules for using and processing transactions. Operating 
        rules should address the following:
                    ``(A) Requirements for data content using available 
                and established national standards.
                    ``(B) Infrastructure requirements that establish 
                best practices for streamlining data flow to yield 
                timely execution of transactions.
                    ``(C) Policies defining the transaction related 
                rights and responsibilities for entities that are 
                transmitting or receiving data.''.
            (3) Conforming amendment.--Section 1179(a) of such Act (42 
        U.S.C. 1320d-8(a)) is amended, in the matter before paragraph 
        (1)--
                    (A) by inserting ``on behalf of an individual'' 
                after ``1978)''; and
                    (B) by inserting ``on behalf of an individual'' 
                after ``for a financial institution.''
    (b) Standards for Claims Attachments and Coordination of Benefits 
.--
            (1) Standard for health claims attachments.--Not later than 
        1 year after the date of the enactment of this Act, the 
        Secretary of Health and Human Services shall promulgate a final 
        rule to establish a standard for health claims attachment 
        transaction described in section 1173(a)(2)(B) of the Social 
        Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of 
        benefits.
            (2) Revision in processing payment transactions by 
        financial institutions.--
                    (A) In general.--Section 1179 of the Social 
                Security Act (42 U.S.C. 1320d-8) is amended, in the 
                matter before paragraph (1)--
                            (i) by striking ``or is engaged'' and 
                        inserting ``and is engaged''; and
                            (ii) by inserting ``(other than as a 
                        business associate for a covered entity)'' 
                        after ``for a financial institution''.
                    (B) Effective date.--The amendments made by 
                paragraph (1) shall apply to transactions occurring on 
                or after such date (not later than 6 months after the 
                date of the enactment of this Act) as the Secretary of 
                Health and Human Services shall specify.

SEC. 164. REINSURANCE PROGRAM FOR RETIREES.

    (a) Establishment.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall establish a temporary reinsurance program (in 
        this section referred to as the ``reinsurance program'') to 
        provide reimbursement to assist participating employment-based 
        plans with the cost of providing health benefits to retirees 
        and to eligible spouses, surviving spouses and dependents of 
        such retirees.
            (2) Definitions.--For purposes of this section:
                    (A) The term ``eligible employment-based plan'' 
                means a group health benefits plan that--
                            (i) is maintained by one or more employers, 
                        former employers or employee associations, or a 
                        voluntary employees' beneficiary association, 
                        or a committee or board of individuals 
                        appointed to administer such plan, and
                            (ii) provides health benefits to retirees.
                    (B) The term ``health benefits'' means medical, 
                surgical, hospital, prescription drug, and such other 
                benefits as shall be determined by the Secretary, 
                whether self-funded or delivered through the purchase 
                of insurance or otherwise.
                    (C) The term ``participating employment-based 
                plan'' means an eligible employment-based plan that is 
                participating in the reinsurance program.
                    (D) The term ``retiree'' means, with respect to a 
                participating employment-benefit plan, an individual 
                who--
                            (i) is 55 years of age or older;
                            (ii) is not eligible for coverage under 
                        title XVIII of the Social Security Act; and
                            (iii) is not an active employee of an 
                        employer maintaining the plan or of any 
                        employer that makes or has made substantial 
                        contributions to fund such plan.
                    (E) The term ``Secretary'' means Secretary of 
                Health and Human Services.
    (b) Participation.--To be eligible to participate in the 
reinsurance program, an eligible employment-based plan shall submit to 
the Secretary an application for participation in the program, at such 
time, in such manner, and containing such information as the Secretary 
shall require.
    (c) Payment.--
            (1) Submission of claims.--
                    (A) In general.--Under the reinsurance program, a 
                participating employment-based plan shall submit claims 
                for reimbursement to the Secretary which shall contain 
                documentation of the actual costs of the items and 
                services for which each claim is being submitted.
                    (B) Basis for claims.--Each claim submitted under 
                subparagraph (A) shall be based on the actual amount 
                expended by the participating employment-based plan 
                involved within the plan year for the appropriate 
                employment based health benefits provided to a retiree 
                or to the spouse, surviving spouse, or dependent of a 
                retiree. In determining the amount of any claim for 
                purposes of this subsection, the participating 
                employment-based plan shall take into account any 
                negotiated price concessions (such as discounts, direct 
                or indirect subsidies, rebates, and direct or indirect 
                remunerations) obtained by such plan with respect to 
                such health benefits. For purposes of calculating the 
                amount of any claim, the costs paid by the retiree or 
                by the spouse, surviving spouse, or dependent of the 
                retiree in the form of deductibles, co-payments, and 
                co-insurance shall be included along with the amounts 
                paid by the participating employment-based plan.
            (2) Program payments and limit.--If the Secretary 
        determines that a participating employment-based plan has 
        submitted a valid claim under paragraph (1), the Secretary 
        shall reimburse such plan for 80 percent of that portion of the 
        costs attributable to such claim that exceeds $15,000, but is 
        less than $90,000. Such amounts shall be adjusted each year 
        based on the percentage increase in the medical care component 
        of the Consumer Price Index (rounded to the nearest multiple of 
        $1,000) for the year involved.
            (3) Use of payments.--Amounts paid to a participating 
        employment-based plan under this subsection shall be used to 
        lower the costs borne directly by the participants and 
        beneficiaries for health benefits provided under such plan in 
        the form of premiums, co-payments, deductibles, co-insurance, 
        or other out-of-pocket costs. Such payments shall not be used 
        to reduce the costs of an employer maintaining the 
        participating employment-based plan. The Secretary shall 
        develop a mechanism to monitor the appropriate use of such 
        payments by such plans.
            (4) Appeals and program protections.--The Secretary shall 
        establish--
                    (A) an appeals process to permit participating 
                employment-based plans to appeal a determination of the 
                Secretary with respect to claims submitted under this 
                section; and
                    (B) procedures to protect against fraud, waste, and 
                abuse under the program.
            (5) Audits.--The Secretary shall conduct annual audits of 
        claims data submitted by participating employment-based plans 
        under this section to ensure that they are in compliance with 
        the requirements of this section.
    (d) Retiree Reserve Trust Fund.--
            (1) Establishment.--
                    (A) In general.--There is established in the 
                Treasury of the United States a trust fund to be known 
                as the ``Retiree Reserve Trust Fund'' (referred to in 
                this section as the ``Trust Fund''), that shall consist 
                of such amounts as may be appropriated or credited to 
                the Trust Fund as provided for in this subsection to 
                enable the Secretary to carry out the reinsurance 
                program. Such amounts shall remain available until 
                expended.
                    (B) Funding.--There are hereby appropriated to the 
                Trust Fund, out of any moneys in the Treasury not 
                otherwise appropriated, an amount requested by the 
                Secretary as necessary to carry out this section, 
                except that the total of all such amounts requested 
                shall not exceed $10,000,000,000.
                    (C) Appropriations from the trust fund.--
                            (i) In general.--Amounts in the Trust Fund 
                        are appropriated to provide funding to carry 
                        out the reinsurance program and shall be used 
                        to carry out such program.
                            (ii) Budgetary implications.--Amounts 
                        appropriated under clause (i), and outlays 
                        flowing from such appropriations, shall not be 
                        taken into account for purposes of any budget 
                        enforcement procedures including allocations 
                        under section 302(a) and (b) of the Balanced 
                        Budget and Emergency Deficit Control Act and 
                        budget resolutions for fiscal years during 
                        which appropriations are made from the Trust 
                        Fund.
                            (iii) Limitation to available funds.--The 
                        Secretary has the authority to stop taking 
                        applications for participation in the program 
                        or take such other steps in reducing 
                        expenditures under the reinsurance program in 
                        order to ensure that expenditures under the 
                        reinsurance program do not exceed the funds 
                        available under this subsection.

SEC. 165. PROHIBITION AGAINST POST-RETIREMENT REDUCTIONS OF RETIREE 
              HEALTH BENEFITS BY GROUP HEALTH PLANS.

    (a) In General.--Part 7 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by inserting after 
section 714 the following new section:

``SEC. 715. PROTECTION AGAINST POST-RETIREMENT REDUCTION OF RETIREE 
              HEALTH BENEFITS.

    ``(a) In General.--Every group health plan shall contain a 
provision which expressly bars the plan, or any fiduciary of the plan, 
from reducing the benefits provided under the plan to a retired 
participant, or beneficiary of such participant, if such reduction 
affects the benefits provided to the participant or beneficiary as of 
the date the participant retired for purposes of the plan and such 
reduction occurs after the participant's retirement unless such 
reduction is also made with respect to active participants.
    ``(b) No Reduction.--Notwithstanding that a group health plan 
described in subsection (a) may contain a provision reserving the 
general power to amend or terminate the plan or a provision 
specifically authorizing the plan to make post-retirement reductions in 
retiree health benefits, it shall be prohibited for any group health 
plan, whether through amendment or otherwise, to reduce the benefits 
provided to a retired participant or his or her beneficiary under the 
terms of the plan if such reduction of benefits occurs after the date 
the participant retired for purposes of the plan and reduces benefits 
that were provided to the participant, or his or her beneficiary, as of 
the date the participant retired unless such reduction is also made 
with respect to active participants.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
such Act is amended by inserting after the item relating to section 714 
the following new item:

``Sec. 715. Protection against post-retirement reduction of retiree 
                            health benefits.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 166. LIMITATIONS ON PREEXISTING CONDITION EXCLUSIONS IN GROUP 
              HEALTH PLANS IN ADVANCE OF APPLICABILITY OF NEW 
              PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Reduction in look-back period.--Section 701(a)(1) of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1181(a)(1)) is amended by striking ``6-month period'' and 
        inserting ``30-day period''.
            (2) Reduction in permitted preexisting condition limitation 
        period.--Section 701(a)(2) of such Act (29 U.S.C. 1181(a)(2)) 
        is amended by striking ``12 months'' and inserting ``3 
        months'', and by striking ``18 months'' and inserting ``9 
        months''.
            (3) Inapplicability of interim limitations upon 
        applicability of total prohibition of exclusion.--Section 701 
        of such Act shall cease to be effective in the case of any 
        group health plan as of the date on which such plan becomes 
        subject to the requirements of section 111 of this division 
        (relating to prohibiting preexisting condition exclusions).
    (b) Effective Date.--
            (1) In general.--Except as provided in subparagraph (B), 
        the amendments made by paragraphs (1) and (2) of subsection (a) 
        shall apply with respect to group health plans for plan years 
        beginning after the end of the 6th calendar month following the 
        date of the enactment of this Act.
            (2) Special rule for collective bargaining agreements.--In 
        the case of a group health plan maintained pursuant to one or 
        more collective bargaining agreements between employee 
        representatives and one or more employers ratified before the 
        date of the enactment of this Act, the amendments made by 
        paragraphs (1) and (2) of subsection (a) shall not apply to 
        plan years beginning before the earlier of--
                    (A) the date on which the last of the collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of the enactment of this Act), 
                or
                    (B) 3 years after the date of the enactment of this 
                Act.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by the amendments made by paragraphs (1) and (2) of 
        subsection (a) shall not be treated as a termination of such 
        collective bargaining agreement.

SEC. 167. EXTENSION OF COBRA CONTINUATION COVERAGE.

    (a) Extension of Current Periods of Continuation Coverage.--
            (1) In general.--In the case of any individual who is, 
        under a COBRA continuation coverage provision, covered under 
        COBRA continuation coverage on or after the date of the 
        enactment of this Act, the required period of any such coverage 
        which has not subsequently terminated under the terms of such 
        provision for any reason other than the expiration of a period 
        of a specified number of months shall, notwithstanding such 
        provision and subject to subsection (b), extend to the earlier 
        of the date on which such individual becomes eligible for 
        coverage under an employment-based health plan or the date on 
        which such individual becomes eligible for health insurance 
        coverage through the Health Insurance Exchange (or a State-
        based Health Insurance Exchange operating in a State or group 
        of States).
            (2) Notice.--As soon as practicable after the date of the 
        enactment of this Act, the Secretary of Labor, in consultation 
        with the Secretary of the Treasury and the Secretary of Health 
        and Human Services, shall, in consultation with administrators 
        of the group health plans (or other entities) that provide or 
        administer the COBRA continuation coverage involved, provide 
        rules setting forth the form and manner in which prompt notice 
        to individuals of the continued availability of COBRA 
        continuation coverage to such individuals under paragraph (1).
    (b) Continued Effect of Other Terminating Events.--Notwithstanding 
subsection (a), any required period of COBRA continuation coverage 
which is extended under such subsection shall terminate upon the 
occurrence, prior to the date of termination otherwise provided in such 
subsection, of any terminating event specified in the applicable 
continuation coverage provision other than the expiration of a period 
of a specified number of months.
    (c) Access to State Health Benefits Risk Pools.--This section shall 
supersede any provision of the law of a State or political subdivision 
thereof to the extent that such provision has the effect of limiting or 
precluding access by a qualified beneficiary whose COBRA continuation 
coverage has been extended under this section to a State health 
benefits risk pool recognized by the Commissioner for purposes of this 
section solely by reason of the extension of such coverage beyond the 
date on which such coverage otherwise would have expired.
    (d) Definitions.--For purposes of this section--
            (1) COBRA continuation coverage.--The term ``COBRA 
        continuation coverage'' means continuation coverage provided 
        pursuant to part 6 of subtitle B of title I of the Employee 
        Retirement Income Security Act of 1974 (other than under 
        section 609), title XXII of the Public Health Service Act, 
        section 4980B of the Internal Revenue Code of 1986 (other than 
        subsection (f)(1) of such section insofar as it relates to 
        pediatric vaccines), or section 905a of title 5, United States 
        Code, or under a State program that provides comparable 
        continuation coverage. Such term does not include coverage 
        under a health flexible spending arrangement under a cafeteria 
        plan within the meaning of section 125 of the Internal Revenue 
        Code of 1986.
            (2) COBRA continuation provision.--The term ``COBRA 
        continuation provision'' means the provisions of law described 
        in paragraph (1).

       TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

                 Subtitle A--Health Insurance Exchange

SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF 
              DUTIES; DEFINITIONS.

    (a) Establishment.--There is established within the Health Choices 
Administration and under the direction of the Commissioner a Health 
Insurance Exchange in order to facilitate access of individuals and 
employers, through a transparent process, to a variety of choices of 
affordable, quality health insurance coverage, including a public 
health insurance option.
    (b) Outline of Duties of Commissioner.--In accordance with this 
subtitle and in coordination with appropriate Federal and State 
officials as provided under section 143(b), the Commissioner shall--
            (1) under section 204 establish standards for, accept bids 
        from, and negotiate and enter into contracts with, QHBP 
        offering entities for the offering of health benefits plans 
        through the Health Insurance Exchange, with different levels of 
        benefits required under section 203, and including with respect 
        to oversight and enforcement;
            (2) under section 205 facilitate outreach and enrollment in 
        such plans of Exchange-eligible individuals and employers 
        described in section 202; and
            (3) conduct such activities related to the Health Insurance 
        Exchange as required, including establishment of a risk pooling 
        mechanism under section 206 and consumer protections under 
        subtitle D of title I.
    (c) Exchange-participating Health Benefits Plan Defined.--In this 
subdivision, the term ``Exchange-participating health benefits plan'' 
means a qualified health benefits plan that is offered through the 
Health Insurance Exchange.

SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

    (a) Access to Coverage.--In accordance with this section, all 
individuals are eligible to obtain coverage through enrollment in an 
Exchange-participating health benefits plan offered through the Health 
Insurance Exchange unless such individuals are enrolled in another 
qualified health benefits plan or other acceptable coverage.
    (b) Definitions.--In this subdivision:
            (1) Exchange-eligible individual.--The term ``Exchange-
        eligible individual'' means an individual who is eligible under 
        this section to be enrolled through the Health Insurance 
        Exchange in an Exchange-participating health benefits plan and, 
        with respect to family coverage, includes dependents of such 
        individual.
            (2) Exchange-eligible employer.--The term ``Exchange-
        eligible employer'' means an employer that is eligible under 
        this section to enroll through the Health Insurance Exchange 
        employees of the employer (and their dependents) in Exchange-
        eligible health benefits plans.
            (3) Employment-related definitions.--The terms 
        ``employer'', ``employee'', ``full-time employee'', and ``part-
        time employee'' have the meanings given such terms by the 
        Commissioner for purposes of this subdivision.
    (c) Transition.--Individuals and employers shall only be eligible 
to enroll or participate in the Health Insurance Exchange in accordance 
with the following transition schedule:
            (1) First year.--In Y1 (as defined in section 100(c))--
                    (A) individuals described in subsection (d)(1), 
                including individuals described in paragraphs (3), (4), 
                and (5) of subsection (d); and
                    (B) smallest employers described in subsection 
                (e)(1).
            (2) Second year.--In Y2--
                    (A) individuals and employers described in 
                paragraph (1); and
                    (B) smaller employers described in subsection 
                (e)(2).
            (3)  Third year.--In Y3--
                    (A) individuals and employers described in 
                paragraph (2);
                    (B) larger employers described in subsection 
                (e)(3); and
                    (C) largest employers as permitted by the 
                Commissioner under subsection (e)(4).
            (4) Fourth and subsequent years.--In Y4 and subsequent 
        years--
                    (A) individuals and employers described in 
                paragraph (3); and
                    (B) largest employers as permitted by the 
                Commissioner under subsection (e)(4).
    (d) Individuals.--
            (1) Individual described.--Subject to the succeeding 
        provisions of this subsection, an individual described in this 
        paragraph is an individual who--
                    (A) is not enrolled in coverage described in 
                subparagraphs (C) through (F) of paragraph (2); and
                    (B) is not enrolled in coverage as a full-time 
                employee (or as a dependent of such an employee) under 
                a group health plan if the coverage and an employer 
                contribution under the plan meet the requirements of 
                section 312.
        For purposes of subparagraph (B), in the case of an individual 
        who is self-employed, who has at least 1 employee, and who 
        meets the requirements of section 312, such individual shall be 
        deemed a full-time employee described in such subparagraph.
            (2) Acceptable coverage.--For purposes of this subdivision, 
        the term ``acceptable coverage'' means any of the following:
                    (A) Qualified health benefits plan coverage.--
                Coverage under a qualified health benefits plan.
                    (B) Grandfathered health insurance coverage; 
                coverage under current group health plan.--Coverage 
                under a grandfathered health insurance coverage (as 
                defined in subsection (a) of section 102) or under a 
                current group health plan (described in subsection (b) 
                of such section).
                    (C) Medicare.--Coverage under part A of title XVIII 
                of the Social Security Act.
                    (D) Medicaid.--Coverage for medical assistance 
                under title XIX of the Social Security Act, excluding 
                such coverage that is only available because of the 
                application of subsection (u), (z), or (aa) of section 
                1902 of such Act
                    (E) Members of the armed forces and dependents 
                (including tricare).--Coverage under chapter 55 of 
                title 10, United States Code, including similar 
                coverage furnished under section 1781 of title 38 of 
                such Code.
                    (F) VA.--Coverage under the veteran's health care 
                program under chapter 17 of title 38, United States 
                Code, but only if the coverage for the individual 
                involved is determined by the Commissioner in 
                coordination with the Secretary of Treasury to be not 
                less than a level specified by the Commissioner and 
                Secretary of Veteran's Affairs, in coordination with 
                the Secretary of Treasury, based on the individual's 
                priority for services as provided under section 1705(a) 
                of such title.
                    (G) Other coverage.--Such other health benefits 
                coverage, such as a State health benefits risk pool, as 
                the Commissioner, in coordination with the Secretary of 
                the Treasury, recognizes for purposes of this 
                paragraph.
        The Commissioner shall make determinations under this paragraph 
        in coordination with the Secretary of the Treasury.
            (3) Treatment of certain non-traditional medicaid eligible 
        individuals.--An individual who is a non-traditional Medicaid 
        eligible individual (as defined in section 205(e)(4)(C)) in a 
        State may be an Exchange-eligible individual if the individual 
        was enrolled in a qualified health benefits plan, grandfathered 
        health insurance coverage, or current group health plan during 
        the 6 months before the individual became a non-traditional 
        Medicaid eligible individual. During the period in which such 
        an individual has chosen to enroll in an Exchange-participating 
        health benefits plan, the individual is not also eligible for 
        medical assistance under Medicaid.
            (4) Continuing eligibility permitted.--
                    (A) In general.--Except as provided in subparagraph 
                (B), once an individual qualifies as an Exchange-
                eligible individual under this subsection (including as 
                an employee or dependent of an employee of an Exchange-
                eligible employer) and enrolls under an Exchange-
                participating health benefits plan through the Health 
                Insurance Exchange, the individual shall continue to be 
                treated as an Exchange-eligible individual until the 
                individual is no longer enrolled with an Exchange-
                participating health benefits plan.
                    (B) Exceptions.--
                            (i) In general.--Subparagraph (A) shall not 
                        apply to an individual once the individual 
                        becomes eligible for coverage--
                                    (I) under part A of the Medicare 
                                program;
                                    (II) under the Medicaid program as 
                                a Medicaid eligible individual, except 
                                as permitted under paragraph (3) or 
                                clause (ii); or
                                    (III) in such other circumstances 
                                as the Commissioner may provide.
                            (ii) Transition period.--In the case 
                        described in clause (i)(II), the Commissioner 
                        shall permit the individual to continue 
                        treatment under subparagraph (A) until such 
                        limited time as the Commissioner determines it 
                        is administratively feasible, consistent with 
                        minimizing disruption in the individual's 
                        access to health care.
            (5) Adversely affected retiree health benefits group 
        participants and beneficiaries.--
                    (A) In general.--Beginning in Y1, an individual who 
                is a participant or beneficiary in an adversely 
                affected retiree health benefits group who does not 
                have coverage described in paragraph (2)(C) is an 
                Exchange eligible individual, whether or not such an 
                individual has other acceptable coverage.
                    (B) Adversely affected retiree health benefit group 
                defined.--In this paragraph, the term ``adversely 
                affected retiree health benefits group'' means the 
                retired participants and their beneficiaries of a group 
                health plan that cancelled or substantially reduced the 
                amount, type, level, or form of health benefit or 
                option provided prior January 1, 2008.
    (e) Employers.--
            (1)  Smallest employers.--Subject to paragraph (5), 
        smallest employers described in this paragraph are employers 
        with 15 or fewer employees.
            (2) Smaller employers.--Subject to paragraph (5), smaller 
        employers described in this paragraph are employers that are 
        not smallest employers described in paragraph (1) and that have 
        25 or fewer employees.
            (3) Larger employers.--Subject to paragraph (5), larger 
        employers described in this paragraph are employers that are 
        not smallest employers described in paragraph (1) or smaller 
        employers described in paragraph (2) and that have 50 or fewer 
        employees.
            (4) Largest employers.--
                    (A) In general.--Beginning with Y3, the 
                Commissioner may permit employers not described in 
                paragraphs (1) (2), or (3) to be Exchange-eligible 
                employers.
                    (B) Phase-in.--In applying subparagraph (A), the 
                Commissioner may phase-in the application of such 
                subparagraph based on the number of full-time employees 
                of an employer and such other considerations as the 
                Commissioner deems appropriate.
            (5) Continuing eligibility.--Once an employer is permitted 
        to be an Exchange-eligible employer under this subsection and 
        enrolls employees through the Health Insurance Exchange, the 
        employer shall continue to be treated as an Exchange-eligible 
        employer for each subsequent plan year regardless of the number 
        of employees involved unless and until the employer meets the 
        requirement of section 311(a) through paragraph (1) of such 
        section by offering a group health plan and not through 
        offering Exchange-participating health benefits plan.
            (6) Employer participation and contributions.--
                    (A) Satisfaction of employer responsibility.--For 
                any year in which an employer is an Exchange-eligible 
                employer, such employer may meet the requirements of 
                section 312 with respect to employees of such employer 
                by offering such employees the option of enrolling with 
                Exchange-participating health benefits plans through 
                the Health Insurance Exchange consistent with the 
                provisions of subtitle B of title III.
                    (B) Employee choice.--Any employee offered 
                Exchange-participating health benefits plans by the 
                employer of such employee under subparagraph (A) may 
                choose coverage under any such plan. That choice 
                includes, with respect to family coverage, coverage of 
                the dependents of such employee.
            (7) Affiliated groups.--Any employer which is part of a 
        group of employers who are treated as a single employer under 
        subsection (b), (c), (m), or (o) of section 414 of the Internal 
        Revenue Code of 1986 shall be treated, for purposes of this 
        subtitle, as a single employer.
            (8) Other counting rules.--The Commissioner shall establish 
        rules relating to how employees are counted for purposes of 
        carrying out this subsection.
            (9) Treatment of multiemployer plans.--The plan sponsor of 
        a group health plan (as defined in section 733(a) of the 
        Employee Retirement Income Security Act of 1974) that is 
        multiemployer plan (as defined in section 3(37) of such Act) 
        may obtain health insurance coverage with respect to 
        participants in the plan through the Exchange to the same 
        extent as an employer not described in paragraph (1) or (2) is 
        permitted by the Commissioner to obtain health insurance 
        coverage through the Exchange as an Exchange-eligible employer
    (f) Special Situation Authority.--The Commissioner shall have the 
authority to establish such rules as may be necessary to deal with 
special situations with regard to uninsured individuals and employers 
participating as Exchange-eligible individuals and employers, such as 
transition periods for individuals and employers who gain, or lose, 
Exchange-eligible participation status, and to establish grace periods 
for premium payment.
    (g) Surveys of Individuals and Employers.--The Commissioner shall 
provide for periodic surveys of Exchange-eligible individuals and 
employers concerning satisfaction of such individuals and employers 
with the Health Insurance Exchange and Exchange-participating health 
benefits plans.
    (h) Exchange Access Study.--
            (1) In general.--The Commissioner shall conduct a study of 
        access to the Health Insurance Exchange for individuals and for 
        employers, including individuals and employers who are not 
        eligible and enrolled in Exchange-participating health benefits 
        plans. The goal of the study is to determine if there are 
        significant groups and types of individuals and employers who 
        are not Exchange eligible individuals or employers, but who 
        would have improved benefits and affordability if made eligible 
        for coverage in the Exchange.
            (2) Items included in study.--Such study also shall 
        examine--
                    (A) the terms, conditions, and affordability of 
                group health coverage offered by employers and QHBP 
                offering entities outside of the Exchange compared to 
                Exchange-participating health benefits plans; and
                    (B) the affordability-test standard for access of 
                certain employed individuals to coverage in the Health 
                Insurance Exchange.
            (3) Report.--Not later than January 1 of Y3, in Y6, and 
        thereafter, the Commissioner shall submit to Congress on the 
        study conducted under this subsection and shall include in such 
        report recommendations regarding changes in standards for 
        Exchange eligibility for individuals and employers.

SEC. 203. BENEFITS PACKAGE LEVELS.

    (a) In General.--The Commissioner shall specify the benefits to be 
made available under Exchange-participating health benefits plans 
during each plan year, consistent with subtitle C of title I and this 
section.
    (b) Limitation on Health Benefits Plans Offered by Offering 
Entities.--The Commissioner may not enter into a contract with a QHBP 
offering entity under section 204(c) for the offering of an Exchange-
participating health benefits plan in a service area unless the 
following requirements are met:
            (1) Required offering of basic plan.--The entity offers 
        only one basic plan for such service area.
            (2) Optional offering of enhanced plan.--If and only if the 
        entity offers a basic plan for such service area, the entity 
        may offer one enhanced plan for such area.
            (3) Optional offering of premium plan.--If and only if the 
        entity offers an enhanced plan for such service area, the 
        entity may offer one premium plan for such area.
            (4) Optional offering of premium-plus plans.--If and only 
        if the entity offers a premium plan for such service area, the 
        entity may offer one or more premium-plus plans for such area.
All such plans may be offered under a single contract with the 
Commissioner.
    (c) Specification of Benefit Levels for Plans.--
            (1) In general.--The Commissioner shall establish the 
        following standards consistent with this subsection and title 
        I:
                    (A) Basic, enhanced, and premium plans.--Standards 
                for 3 levels of Exchange-participating health benefits 
                plans: basic, enhanced, and premium (in this 
                subdivision referred to as a ``basic plan'', ``enhanced 
                plan'', and ``premium plan'', respectively).
                    (B) Premium-plus plan benefits.--Standards for 
                additional benefits that may be offered, consistent 
                with this subsection and subtitle C of title I, under a 
                premium plan (such a plan with additional benefits 
                referred to in this subdivision as a ``premium-plus 
                plan'') .
            (2) Basic plan.--
                    (A) In general.--A basic plan shall offer the 
                essential benefits package required under title I for a 
                qualified health benefits plan.
                    (B) Tiered cost-sharing for affordable credit 
                eligible individuals.--In the case of an affordable 
                credit eligible individual (as defined in section 
                242(a)(1)) enrolled in an Exchange-participating health 
                benefits plan, the benefits under a basic plan are 
                modified to provide for the reduced cost-sharing for 
                the income tier applicable to the individual under 
                section 244(c).
            (3) Enhanced plan.--A enhanced plan shall offer, in 
        addition to the level of benefits under the basic plan, a lower 
        level of cost-sharing as provided under title I consistent with 
        section 123(b)(5)(A).
            (4) Premium plan.--A premium plan shall offer, in addition 
        to the level of benefits under the basic plan, a lower level of 
        cost-sharing as provided under title I consistent with section 
        123(b)(5)(B).
            (5) Premium-plus plan.--A premium-plus plan is a premium 
        plan that also provides additional benefits, such as adult oral 
        health and vision care, approved by the Commissioner. The 
        portion of the premium that is attributable to such additional 
        benefits shall be separately specified.
            (6) Range of permissible variation in cost-sharing.--The 
        Commissioner shall establish a permissible range of variation 
        of cost-sharing for each basic, enhanced, and premium plan, 
        except with respect to any benefit for which there is no cost-
        sharing permitted under the essential benefits package. Such 
        variation shall permit a variation of not more than plus (or 
        minus) 10 percent in cost-sharing with respect to each benefit 
        category specified under section 122.
    (d) Treatment of State Benefit Mandates.--Insofar as a State 
requires a health insurance issuer offering health insurance coverage 
to include benefits beyond the essential benefits package, such 
requirement shall continue to apply to an Exchange-participating health 
benefits plan, if the State has entered into an arrangement 
satisfactory to the Commissioner to reimburse the Commissioner for the 
amount of any net increase in affordability premium credits under 
subtitle C as a result of an increase in premium in basic plans as a 
result of application of such requirement.

SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH 
              BENEFITS PLANS.

    (a) Contracting Duties.--In carrying out section 201(b)(1) and 
consistent with this subtitle:
            (1) Offering entity and plan standards.--The Commissioner 
        shall--
                    (A) establish standards necessary to implement the 
                requirements of this title and title I for--
                            (i) QHBP offering entities for the offering 
                        of an Exchange-participating health benefits 
                        plan; and
                            (ii) for Exchange-participating health 
                        benefits plans; and
                    (B) certify QHBP offering entities and qualified 
                health benefits plans as meeting such standards and 
                requirements of this title and title I for purposes of 
                this subtitle.
            (2) Soliciting and negotiating bids; contracts.--The 
        Commissioner shall--
                    (A) solicit bids from QHBP offering entities for 
                the offering of Exchange-participating health benefits 
                plans;
                    (B) based upon a review of such bids, negotiate 
                with such entities for the offering of such plans; and
                    (C) enter into contracts with such entities for the 
                offering of such plans through the Health Insurance 
                Exchange under terms (consistent with this title) 
                negotiated between the Commissioner and such entities.
            (3) FAR not applicable.--The provisions of the Federal 
        Acquisition Regulation shall not apply to contracts between the 
        Commissioner and QHBP offering entities for the offering of 
        Exchange-participating health benefits plans under this title.
    (b) Standards for QHBP Offering Entities to Offer Exchange-
participating Health Benefits Plans.--The standards established under 
subsection (a)(1)(A) shall require that, in order for a QHBP offering 
entity to offer an Exchange-participating health benefits plan, the 
entity must meet the following requirements:
            (1) Licensed.--The entity shall be licensed to offer health 
        insurance coverage under State law for each State in which it 
        is offering such coverage.
            (2) Data reporting.--The entity shall provide for the 
        reporting of such information as the Commissioner may specify, 
        including information necessary to administer the risk pooling 
        mechanism described in section 206(b) and information to 
        address disparities in health and health care.
            (3) Implementing affordability credits.--The entity shall 
        provide for implementation of the affordability credits 
        provided for enrollees under subtitle C, including the 
        reduction in cost-sharing under section 244(c).
            (4) Enrollment.--The entity shall accept all enrollments 
        under this subtitle, subject to such exceptions (such as 
        capacity limitations) in accordance with the requirements under 
        title I for a qualified health benefits plan. The entity shall 
        notify the Commissioner if the entity projects or anticipates 
        reaching such a capacity limitation that would result in a 
        limitation in enrollment.
            (5) Risk pooling participation.--The entity shall 
        participate in such risk pooling mechanism as the Commissioner 
        establishes under section 206(b).
            (6) Essential community providers.--With respect to the 
        basic plan offered by the entity, the entity shall contract for 
        outpatient services with covered entities (as defined in 
        section 340B(a)(4) of the Public Health Service Act, as in 
        effect as of July 1, 2009). The Commissioner shall specify the 
        extent to which and manner in which the previous sentence shall 
        apply in the case of a basic plan with respect to which the 
        Commissioner determines provides substantially all benefits 
        through a health maintenance organization, as defined in 
        section 2791(b)(3) of the Public Health Service Act.
            (7) Culturally and linguistically appropriate services and 
        communications.--The entity shall provide for culturally and 
        linguistically appropriate communication and health services.
            (8) Additional requirements.--The entity shall comply with 
        other applicable requirements of this title, as specified by 
        the Commissioner, which shall include standards regarding 
        billing and collection practices for premiums and related grace 
        periods and which may include standards to ensure that the 
        entity does not use coercive practices to force providers not 
        to contract with other entities offering coverage through the 
        Health Insurance Exchange.
    (c) Contracts.--
            (1) Bid application.--To be eligible to enter into a 
        contract under this section, a QHBP offering entity shall 
        submit to the Commissioner a bid at such time, in such manner, 
        and containing such information as the Commissioner may 
        require.
            (2) Term.--Each contract with a QHBP offering entity under 
        this section shall be for a term of not less than one year, but 
        may be made automatically renewable from term to term in the 
        absence of notice of termination by either party.
            (3) Enforcement of network adequacy.--In the case of a 
        health benefits plan of a QHBP offering entity that uses a 
        provider network, the contract under this section with the 
        entity shall provide that if--
                    (A) the Commissioner determines that such provider 
                network does not meet such standards as the 
                Commissioner shall establish under section 115; and
                    (B) an individual enrolled in such plan receives an 
                item or service from a provider that is not within such 
                network;
        then any cost-sharing for such item or service shall be equal 
        to the amount of such cost-sharing that would be imposed if 
        such item or service was furnished by a provider within such 
        network.
            (4) Oversight and enforcement responsibilities.--The 
        Commissioner shall establish processes, in coordination with 
        State insurance regulators, to oversee, monitor, and enforce 
        applicable requirements of this title with respect to QHBP 
        offering entities offering Exchange-participating health 
        benefits plans and such plans, including the marketing of such 
        plans. Such processes shall include the following:
                    (A) Grievance and complaint mechanisms.--The 
                Commissioner shall establish, in coordination with 
                State insurance regulators, a process under which 
                Exchange-eligible individuals and employers may file 
                complaints concerning violations of such standards.
                    (B) Enforcement.--In carrying out authorities under 
                this subdivision relating to the Health Insurance 
                Exchange, the Commissioner may impose one or more of 
                the intermediate sanctions described in section 142(c).
                    (C) Termination.--
                            (i) In general.--The Commissioner may 
                        terminate a contract with a QHBP offering 
                        entity under this section for the offering of 
                        an Exchange-participating health benefits plan 
                        if such entity fails to comply with the 
                        applicable requirements of this title. Any 
                        determination by the Commissioner to terminate 
                        a contract shall be made in accordance with 
                        formal investigation and compliance procedures 
                        established by the Commissioner under which--
                                    (I) the Commissioner provides the 
                                entity with the reasonable opportunity 
                                to develop and implement a corrective 
                                action plan to correct the deficiencies 
                                that were the basis of the 
                                Commissioner's determination; and
                                    (II) the Commissioner provides the 
                                entity with reasonable notice and 
                                opportunity for hearing (including the 
                                right to appeal an initial decision) 
                                before terminating the contract.
                            (ii) Exception for imminent and serious 
                        risk to health.--Clause (i) shall not apply if 
                        the Commissioner determines that a delay in 
                        termination, resulting from compliance with the 
                        procedures specified in such clause prior to 
                        termination, would pose an imminent and serious 
                        risk to the health of individuals enrolled 
                        under the qualified health benefits plan of the 
                        QHBP offering entity.
                    (D) Construction.--Nothing in this subsection shall 
                be construed as preventing the application of other 
                sanctions under subtitle E of title I with respect to 
                an entity for a violation of such a requirement.

SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND 
              EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.

    (a) In General.--
            (1) Outreach.--The Commissioner shall conduct outreach 
        activities consistent with subsection (c), including through 
        use of appropriate entities as described in paragraph (4) of 
        such subsection, to inform and educate individuals and 
        employers about the Health Insurance Exchange and Exchange-
        participating health benefits plan options. Such outreach shall 
        include outreach specific to vulnerable populations, such as 
        children, individuals with disabilities, individuals with 
        mental illness, and individuals with other cognitive 
        impairments.
            (2) Eligibility.--The Commissioner shall make timely 
        determinations of whether individuals and employers are 
        Exchange-eligible individuals and employers (as defined in 
        section 202).
            (3) Enrollment.--The Commissioner shall establish and carry 
        out an enrollment process for Exchange-eligible individuals and 
        employers, including at community locations, in accordance with 
        subsection (b).
    (b) Enrollment Process.--
            (1) In general.--The Commissioner shall establish a process 
        consistent with this title for enrollments in Exchange-
        participating health benefits plans. Such process shall provide 
        for enrollment through means such as the mail, by telephone, 
        electronically, and in person.
            (2) Enrollment periods.--
                    (A) Open enrollment period.--The Commissioner shall 
                establish an annual open enrollment period during which 
                an Exchange-eligible individual or employer may elect 
                to enroll in an Exchange-participating health benefits 
                plan for the following plan year and an enrollment 
                period for affordability credits under subtitle C. Such 
                periods shall be during September through November of 
                each year, or such other time that would maximize 
                timeliness of income verification for purposes of such 
                subtitle. The open enrollment period shall not be less 
                than 30 days.
                    (B) Special enrollment.--The Commissioner shall 
                also provide for special enrollment periods to take 
                into account special circumstances of individuals and 
                employers, such as an individual who--
                            (i) loses acceptable coverage;
                            (ii) experiences a change in marital or 
                        other dependent status;
                            (iii) moves outside the service area of the 
                        Exchange-participating health benefits plan in 
                        which the individual is enrolled; or
                            (iv) experiences a significant change in 
                        income.
                    (C) Enrollment information.--The Commissioner shall 
                provide for the broad dissemination of information to 
                prospective enrollees on the enrollment process, 
                including before each open enrollment period. In 
                carrying out the previous sentence, the Commissioner 
                may work with other appropriate entities to facilitate 
                such provision of information.
            (3) Automatic enrollment for non-medicaid eligible 
        individuals.--
                    (A) In general.--The Commissioner shall provide for 
                a process under which individuals who are Exchange-
                eligible individuals described in subparagraph (B) are 
                automatically enrolled under an appropriate Exchange-
                participating health benefits plan. Such process may 
                involve a random assignment or some other form of 
                assignment that takes into account the health care 
                providers used by the individual involved or such other 
                relevant factors as the Commissioner may specify.
                    (B) Subsidized individuals described.--An 
                individual described in this subparagraph is an 
                Exchange-eligible individual who is either of the 
                following:
                            (i) Affordability credit eligible 
                        individuals.--The individual--
                                    (I) has applied for, and been 
                                determined eligible for, affordability 
                                credits under subtitle C;
                                    (II) has not opted out from 
                                receiving such affordability credit; 
                                and
                                    (III) does not otherwise enroll in 
                                another Exchange-participating health 
                                benefits plan.
                            (ii) Individuals enrolled in a terminated 
                        plan.--The individual is enrolled in an 
                        Exchange-participating health benefits plan 
                        that is terminated (during or at the end of a 
                        plan year) and who does not otherwise enroll in 
                        another Exchange-participating health benefits 
                        plan.
            (4) Direct payment of premiums to plans.--Under the 
        enrollment process, individuals enrolled in an Exchange-
        participating health benefits plan shall pay such plans 
        directly, and not through the Commissioner or the Health 
        Insurance Exchange.
    (c) Coverage Information and Assistance.--
            (1) Coverage information.--The Commissioner shall provide 
        for the broad dissemination of information on Exchange-
        participating health benefits plans offered under this title. 
        Such information shall be provided in a comparative manner, and 
        shall include information on benefits, premiums, cost-sharing, 
        quality, provider networks, and consumer satisfaction.
            (2) Consumer assistance with choice.--To provide assistance 
        to Exchange-eligible individuals and employers, the 
        Commissioner shall--
                    (A) provide for the operation of a toll-free 
                telephone hotline to respond to requests for assistance 
                and maintain an Internet website through which 
                individuals may obtain information on coverage under 
                Exchange-participating health benefits plans and file 
                complaints;
                    (B) develop and disseminate information to 
                Exchange-eligible enrollees on their rights and 
                responsibilities;
                    (C) assist Exchange-eligible individuals in 
                selecting Exchange-participating health benefits plans 
                and obtaining benefits through such plans; and
                    (D) ensure that the Internet website described in 
                subparagraph (A) and the information described in 
                subparagraph (B) is developed using plain language (as 
                defined in section 133(a)(2)).
            (3) Use of other entities.--In carrying out this 
        subsection, the Commissioner may work with other appropriate 
        entities to facilitate the dissemination of information under 
        this subsection and to provide assistance as described in 
        paragraph (2).
    (d) Special Duties Related to Medicaid and CHIP.--
            (1) Coverage for certain newborns.--
                    (A) In general.--In the case of a child born in the 
                United States who at the time of birth is not otherwise 
                covered under acceptable coverage, for the period of 
                time beginning on the date of birth and ending on the 
                date the child otherwise is covered under acceptable 
                coverage (or, if earlier, the end of the month in which 
                the 60-day period, beginning on the date of birth, 
                ends), the child shall be deemed--
                            (i) to be a non-traditional Medicaid 
                        eligible individual (as defined in subsection 
                        (e)(5)) for purposes of this subdivision and 
                        Medicaid; and
                            (ii) to have elected to enroll in Medicaid 
                        through the application of paragraph (3).
                    (B) Extended treatment as traditional medicaid 
                eligible individual.--In the case of a child described 
                in subparagraph (A) who at the end of the period 
                referred to in such subparagraph is not otherwise 
                covered under acceptable coverage, the child shall be 
                deemed (until such time as the child obtains such 
                coverage or the State otherwise makes a determination 
                of the child's eligibility for medical assistance under 
                its Medicaid plan pursuant to section 1943(c)(1) of the 
                Social Security Act) to be a traditional Medicaid 
                eligible individual described in section 1902(l)(1)(B) 
                of such Act.
            (2) CHIP transition.--A child who, as of the day before the 
        first day of Y1, is eligible for child health assistance under 
        title XXI of the Social Security Act (including a child 
        receiving coverage under an arrangement described in section 
        2101(a)(2) of such Act) is deemed as of such first day to be an 
        Exchange-eligible individual unless the individual is a 
        traditional Medicaid eligible individual as of such day.
            (3) Automatic enrollment of medicaid eligible individuals 
        into medicaid.--The Commissioner shall provide for a process 
        under which an individual who is described in section 202(d)(3) 
        and has not elected to enroll in an Exchange-participating 
        health benefits plan is automatically enrolled under Medicaid.
            (4) Notifications.--The Commissioner shall notify each 
        State in Y1 and for purposes of section 1902(gg)(1) of the 
        Social Security Act (as added by section 1703(a)) whether the 
        Health Insurance Exchange can support enrollment of children 
        described in paragraph (2) in such State in such year.
    (e) Medicaid Coverage for Medicaid Eligible Individuals.--
            (1) In general.--
                    (A) Choice for limited exchange-eligible 
                individuals.--As part of the enrollment process under 
                subsection (b), the Commissioner shall provide the 
                option, in the case of an Exchange-eligible individual 
                described in section 202(d)(3), for the individual to 
                elect to enroll under Medicaid instead of under an 
                Exchange-participating health benefits plan. Such an 
                individual may change such election during an 
                enrollment period under subsection (b)(2).
                    (B) Medicaid enrollment obligation.--An Exchange 
                eligible individual may apply, in the manner described 
                in section 241(b)(1), for a determination of whether 
                the individual is a Medicaid-eligible individual. If 
                the individual is determined to be so eligible, the 
                Commissioner, through the Medicaid memorandum of 
                understanding, shall provide for the enrollment of the 
                individual under the State Medicaid plan in accordance 
                with the Medicaid memorandum of understanding under 
                paragraph (4). In the case of such an enrollment, the 
                State shall provide for the same periodic 
                redetermination of eligibility under Medicaid as would 
                otherwise apply if the individual had directly applied 
                for medical assistance to the State Medicaid agency.
            (2) Non-traditional medicaid eligible individuals.--In the 
        case of a non-traditional Medicaid eligible individual 
        described in section 202(d)(3) who elects to enroll under 
        Medicaid under paragraph (1)(A), the Commissioner shall provide 
        for the enrollment of the individual under the State Medicaid 
        plan in accordance with the Medicaid memorandum of 
        understanding under paragraph (4).
            (3) Coordinated enrollment with state through memorandum of 
        understanding.--The Commissioner, in consultation with the 
        Secretary of Health and Human Services, shall enter into a 
        memorandum of understanding with each State (each in this 
        subdivision referred to as a ``Medicaid memorandum of 
        understanding'') with respect to coordinating enrollment of 
        individuals in Exchange-participating health benefits plans and 
        under the State's Medicaid program consistent with this section 
        and to otherwise coordinate the implementation of the 
        provisions of this subdivision with respect to the Medicaid 
        program. Such memorandum shall permit the exchange of 
        information consistent with the limitations described in 
        section 1902(a)(7) of the Social Security Act. Nothing in this 
        section shall be construed as permitting such memorandum to 
        modify or vitiate any requirement of a State Medicaid plan.
            (4) Medicaid eligible individuals.--For purposes of this 
        subdivision:
                    (A) Medicaid eligible individual.--The term 
                ``Medicaid eligible individual'' means an individual 
                who is eligible for medical assistance under Medicaid.
                    (B) Traditional medicaid eligible individual.--The 
                term ``traditional Medicaid eligible individual'' means 
                a Medicaid eligible individual other than an individual 
                who is--
                            (i) a Medicaid eligible individual by 
                        reason of the application of subclause (VIII) 
                        of section 1902(a)(10)(A)(i) of the Social 
                        Security Act; or
                            (ii) a childless adult not described in 
                        section 1902(a)(10)(A) or (C) of such Act (as 
                        in effect as of the day before the date of the 
                        enactment of this Act).
                    (C) Non-traditional medicaid eligible individual.--
                The term ``non-traditional Medicaid eligible 
                individual'' means a Medicaid eligible individual who 
                is not a traditional Medicaid eligible individual.
    (f) Effective Culturally and Linguistically Appropriate 
Communication.--In carrying out this section, the Commissioner shall 
establish effective methods for communicating in plain language and a 
culturally and linguistically appropriate manner.

SEC. 206. OTHER FUNCTIONS.

    (a) Coordination of Affordability Credits.--The Commissioner shall 
coordinate the distribution of affordability premium and cost-sharing 
credits under subtitle C to QHBP offering entities offering Exchange-
participating health benefits plans.
    (b) Coordination of Risk Pooling.--The Commissioner shall establish 
a mechanism whereby there is an adjustment made of the premium amounts 
payable among QHBP offering entities offering Exchange-participating 
health benefits plans of premiums collected for such plans that takes 
into account (in a manner specified by the Commissioner) the 
differences in the risk characteristics of individuals and employers 
enrolled under the different Exchange-participating health benefits 
plans offered by such entities so as to minimize the impact of adverse 
selection of enrollees among the plans offered by such entities.
    (c) Special Inspector General for the Health Insurance Exchange.--
            (1) Establishment; appointment.--There is hereby 
        established the Office of the Special Inspector General for the 
        Health Insurance Exchange, to be headed by a Special Inspector 
        General for the Health Insurance Exchange (in this subsection 
        referred to as the ``Special Inspector General'') to be 
        appointed by the President, by and with the advice and consent 
        of the Senate. The nomination of an individual as Special 
        Inspector General shall be made as soon as practicable after 
        the establishment of the program under this subtitle.
            (2) Duties.--The Special Inspector General shall--
                    (A) conduct, supervise, and coordinate audits, 
                evaluations and investigations of the Health Insurance 
                Exchange to protect the integrity of the Health 
                Insurance Exchange, as well as the health and welfare 
                of participants in the Exchange;
                    (B) report both to the Commissioner and to the 
                Congress regarding program and management problems and 
                recommendations to correct them;
                    (C) have other duties (described in paragraphs (2) 
                and (3) of section 121 of division A of Public Law 110-
                343) in relation to the duties described in the 
                previous subparagraphs; and
                    (D) have the authorities provided in section 6 of 
                the Inspector General Act of 1978 in carrying out 
                duties under this paragraph.
            (3) Application of other special inspector general 
        provisions.--The provisions of subsections (b) (other than 
        paragraphs (1) and (3)), (d) (other than paragraph (1)), and 
        (e) of section 121 of division A of the Emergency Economic 
        Stabilization Act of 2009 (Public Law 110-343) shall apply to 
        the Special Inspector General under this subsection in the same 
        manner as such provisions apply to the Special Inspector 
        General under such section.
            (4) Reports.--Not later than one year after the 
        confirmation of the Special Inspector General, and annually 
        thereafter, the Special Inspector General shall submit to the 
        appropriate committees of Congress a report summarizing the 
        activities of the Special Inspector General during the one year 
        period ending on the date such report is submitted.
            (5) Termination.--The Office of the Special Inspector 
        General shall terminate five years after the date of the 
        enactment of this Act.
    (d)  Assistance for Small Employers.--
            (1) In general.--The Commissioner, in consultation with the 
        Small Business Administration, shall establish and carry out a 
        program to provide to small employers counseling and technical 
        assistance with respect to the provision of health insurance to 
        employees of such employers through the Health Insurance 
        Exchange.
            (2) Duties.--The program established under paragraph (1) 
        shall include the following services:
                    (A) Educational activities to increase awareness of 
                the Health Insurance Exchange and available small 
                employer health plan options.
                    (B) Distribution of information to small employers 
                with respect to the enrollment and selection process 
                for health plans available under the Health Insurance 
                Exchange, including standardized comparative 
                information on the health plans available under the 
                Health Insurance Exchange.
                    (C) Distribution of information to small employers 
                with respect to available affordability credits or 
                other financial assistance.
                    (D) Referrals to appropriate entities of complaints 
                and questions relating to the Health Insurance 
                Exchange.
                    (E) Enrollment and plan selection assistance for 
                employers with respect to the Health Insurance 
                Exchange.
                    (F) Responses to questions relating to the Health 
                Insurance Exchange and the program established under 
                paragraph (1).
            (3) Authority to provide services directly or by 
        contract.--The Commissioner may provide services under 
        paragraph (2) directly or by contract with nonprofit entities 
        that the Commissioner determines capable of carrying out such 
        services.
            (4) Small employer defined.--In this subsection, the term 
        ``small employer'' means an employer with less than 100 
        employees.

SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.

    (a) Establishment of Health Insurance Exchange Trust Fund.--There 
is created within the Treasury of the United States a trust fund to be 
known as the ``Health Insurance Exchange Trust Fund'' (in this section 
referred to as the ``Trust Fund''), consisting of such amounts as may 
be appropriated or credited to the Trust Fund under this section or any 
other provision of law.
    (b) Payments From Trust Fund.--The Commissioner shall pay from time 
to time from the Trust Fund such amounts as the Commissioner determines 
are necessary to make payments to operate the Health Insurance 
Exchange, including payments under subtitle C (relating to 
affordability credits).
    (c) Transfers to Trust Fund.--
            (1) Dedicated payments.--There is hereby appropriated to 
        the Trust Fund amounts equivalent to the following:
                    (A) Taxes on individuals not obtaining acceptable 
                coverage.--The amounts received in the Treasury under 
                section 59B of the Internal Revenue Code of 1986 
                (relating to requirement of health insurance coverage 
                for individuals).
                    (B) Employment taxes on employers not providing 
                acceptable coverage.--The amounts received in the 
                Treasury under section 3111(c) of the Internal Revenue 
                Code of 1986 (relating to employers electing to not 
                provide health benefits).
                    (C) Excise tax on failures to meet certain health 
                coverage requirements.--The amounts received in the 
                Treasury under section 4980H(b) (relating to excise tax 
                with respect to failure to meet health coverage 
                participation requirements).
            (2) Appropriations to cover government contributions.--
        There are hereby appropriated, out of any moneys in the 
        Treasury not otherwise appropriated, to the Trust Fund, an 
        amount equivalent to the amount of payments made from the Trust 
        Fund under subsection (b) plus such amounts as are necessary 
        reduced by the amounts deposited under paragraph (1).
    (d) Application of Certain Rules.--Rules similar to the rules of 
subchapter B of chapter 98 of the Internal Revenue Code of 1986 shall 
apply with respect to the Trust Fund.

SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.

    (a) In General.--If--
            (1) a State (or group of States, subject to the approval of 
        the Commissioner) applies to the Commissioner for approval of a 
        State-based Health Insurance Exchange to operate in the State 
        (or group of States); and
            (2) the Commissioner approves such State-based Health 
        Insurance Exchange,
then, subject to subsections (c) and (d), the State-based Health 
Insurance Exchange shall operate, instead of the Health Insurance 
Exchange, with respect to such State (or group of States). The 
Commissioner shall approve a State-based Health Insurance Exchange if 
it meets the requirements for approval under subsection (b).
    (b) Requirements for Approval.--The Commissioner may not approve a 
State-based Health Insurance Exchange under this section unless the 
following requirements are met:
            (1) The State-based Health Insurance Exchange must 
        demonstrate the capacity to and provide assurances satisfactory 
        to the Commissioner that the State-based Health Insurance 
        Exchange will carry out the functions specified for the Health 
        Insurance Exchange in the State (or States) involved, 
        including--
                    (A) negotiating and contracting with QHBP offering 
                entities for the offering of Exchange-participating 
                health benefits plan, which satisfy the standards and 
                requirements of this title and title I;
                    (B) enrolling Exchange-eligible individuals and 
                employers in such State in such plans;
                    (C) the establishment of sufficient local offices 
                to meet the needs of Exchange-eligible individuals and 
                employers;
                    (D) administering affordability credits under 
                subtitle B using the same methodologies (and at least 
                the same income verification methods) as would 
                otherwise apply under such subtitle and at a cost to 
                the Federal Government which does exceed the cost to 
                the Federal Government if this section did not apply; 
                and
                    (E) enforcement activities consistent with federal 
                requirements.
            (2) There is no more than one Health Insurance Exchange 
        operating with respect to any one State.
            (3) The State provides assurances satisfactory to the 
        Commissioner that approval of such an Exchange will not result 
        in any net increase in expenditures to the Federal Government.
            (4) The State provides for reporting of such information as 
        the Commissioner determines and assurances satisfactory to the 
        Commissioner that it will vigorously enforce violations of 
        applicable requirements.
            (5) Such other requirements as the Commissioner may 
        specify.
    (c) Ceasing Operation.--
            (1) In general.--A State-based Health Insurance Exchange 
        may, at the option of each State involved, and only after 
        providing timely and reasonable notice to the Commissioner, 
        cease operation as such an Exchange, in which case the Health 
        Insurance Exchange shall operate, instead of such State-based 
        Health Insurance Exchange, with respect to such State (or 
        States).
            (2) Termination; health insurance exchange resumption of 
        functions.--The Commissioner may terminate the approval (for 
        some or all functions) of a State-based Health Insurance 
        Exchange under this section if the Commissioner determines that 
        such Exchange no longer meets the requirements of subsection 
        (b) or is no longer capable of carrying out such functions in 
        accordance with the requirements of this subtitle. In lieu of 
        terminating such approval, the Commissioner may temporarily 
        assume some or all functions of the State-based Health 
        Insurance Exchange until such time as the Commissioner 
        determines the State-based Health Insurance Exchange meets such 
        requirements of subsection (b) and is capable of carrying out 
        such functions in accordance with the requirements of this 
        subtitle.
            (3) Effectiveness.--The ceasing or termination of a State-
        based Health Insurance Exchange under this subsection shall be 
        effective in such time and manner as the Commissioner shall 
        specify.
    (d) Retention of Authority.--
            (1) Authority retained.--Enforcement authorities of the 
        Commissioner shall be retained by the Commissioner.
            (2) Discretion to retain additional authority.--The 
        Commissioner may specify functions of the Health Insurance 
        Exchange that--
                    (A) may not be performed by a State-based Health 
                Insurance Exchange under this section; or
                    (B) may be performed by the Commissioner and by 
                such a State-based Health Insurance Exchange.
    (e) References.--In the case of a State-based Health Insurance 
Exchange, except as the Commissioner may otherwise specify under 
subsection (d), any references in this subtitle to the Health Insurance 
Exchange or to the Commissioner in the area in which the State-based 
Health Insurance Exchange operates shall be deemed a reference to the 
State-based Health Insurance Exchange and the head of such Exchange, 
respectively.
    (f) Funding.--In the case of a State-based Health Insurance 
Exchange, there shall be assistance provided for the operation of such 
Exchange in the form of a matching grant with a State share of 
expenditures required.

SEC. 209. PARTICIPATION OF SMALL EMPLOYER BENEFIT ARRANGEMENTS.

    (a) In General.--The Commissioner may enter into contracts with 
small employer benefit arrangements to provide consumer information, 
outreach, and assistance in the enrollment of small employers (and 
their employees) who are members of such an arrangement under Exchange 
participating health benefits plans.
    (b) Small Employer Benefit Arrangement Defined.--In this section, 
the term ``small employer benefit arrangement'' means a not-for-profit 
agricultural or other cooperative that--
            (1) consists solely of its members and is operated for the 
        primary purpose of providing affordable employee benefits to 
        its members;
            (2) only has as members small employers in the same 
        industry or line of business;
            (3) has no member that has more than a 5 percent voting 
        interest in the cooperative; and
            (4) is governed by a board of directors elected by its 
        members.

               Subtitle B--Public Health Insurance Option

SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE 
              OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.

    (a) Establishment.--For years beginning with Y1, the Secretary of 
Health and Human Services (in this subtitle referred to as the 
``Secretary'') shall provide for the offering of an Exchange-
participating health benefits plan (in this subdivision referred to as 
the ``public health insurance option'') that ensures choice, 
competition, and stability of affordable, high quality coverage 
throughout the United States in accordance with this subtitle. In 
designing the option, the Secretary's primary responsibility is to 
create a low-cost plan without compromising quality or access to care.
    (b) Offering as an Exchange-participating Health Benefits Plan.--
            (1) Exclusive to the exchange.--The public health insurance 
        option shall only be made available through the Health 
        Insurance Exchange.
            (2) Ensuring a level playing field.--Consistent with this 
        subtitle, the public health insurance option shall comply with 
        requirements that are applicable under this title to an 
        Exchange-participating health benefits plan, including 
        requirements related to benefits, benefit levels, provider 
        networks, notices, consumer protections, and cost sharing.
            (3) Provision of benefit levels.--The public health 
        insurance option--
                    (A) shall offer basic, enhanced, and premium plans; 
                and
                    (B) may offer premium-plus plans.
    (c) Administrative Contracting.--The Secretary may enter into 
contracts for the purpose of performing administrative functions 
(including functions described in subsection (a)(4) of section 1874A of 
the Social Security Act) with respect to the public health insurance 
option in the same manner as the Secretary may enter into contracts 
under subsection (a)(1) of such section. The Secretary has the same 
authority with respect to the public health insurance option as the 
Secretary has under subsections (a)(1) and (b) of section 1874A of the 
Social Security Act with respect to title XVIII of such Act. Contracts 
under this subsection shall not involve the transfer of insurance risk 
to such entity.
    (d) Ombudsman.--The Secretary shall establish an office of the 
ombudsman for the public health insurance option which shall have 
duties with respect to the public health insurance option similar to 
the duties of the Medicare Beneficiary Ombudsman under section 
1808(c)(2) of the Social Security Act.
    (e) Data Collection.--The Secretary shall collect such data as may 
be required to establish premiums and payment rates for the public 
health insurance option and for other purposes under this subtitle, 
including to improve quality and to reduce disparities in health and 
health care based on race, ethnicity, primary language, sex, sexual 
orientation, gender identity, disability, socioeconomic status, rural, 
urban, or other geographic setting, and any other population or 
subpopulation as determined appropriate by the Secretary, but only if 
the data collection is conducted on a voluntary basis and consistent 
with the standards, including privacy protections, established pursuant 
to section 1709 of the Public Health Service Act.
    (f) Treatment of Public Health Insurance Option.--With respect to 
the public health insurance option, the Secretary shall be treated as a 
QHBP offering entity offering an Exchange-participating health benefits 
plan.
    (g) Access to Federal Courts.--The provisions of Medicare (and 
related provisions of title II of the Social Security Act) relating to 
access of Medicare beneficiaries to Federal courts for the enforcement 
of rights under Medicare, including with respect to amounts in 
controversy, shall apply to the public health insurance option and 
individuals enrolled under such option under this title in the same 
manner as such provisions apply to Medicare and Medicare beneficiaries.

SEC. 222. PREMIUMS AND FINANCING.

    (a) Establishment of Premiums.--
            (1) In general.--The Secretary shall establish 
        geographically-adjusted premium rates for the public health 
        insurance option in a manner--
                    (A) that complies with the premium rules 
                established by the Commissioner under section 113 for 
                Exchange-participating health benefit plans; and
                    (B) at a level sufficient to fully finance the 
                costs of--
                            (i) health benefits provided by the public 
                        health insurance option; and
                            (ii) administrative costs related to 
                        operating the public health insurance option.
            (2) Contingency margin.--In establishing premium rates 
        under paragraph (1), the Secretary shall include an appropriate 
        amount for a contingency margin.
    (b) Account.--
            (1) Establishment.--There is established in the Treasury of 
        the United States an Account for the receipts and disbursements 
        attributable to the operation of the public health insurance 
        option, including the start-up funding under paragraph (2). 
        Section 1854(g) of the Social Security Act shall apply to 
        receipts described in the previous sentence in the same manner 
        as such section applies to payments or premiums described in 
        such section.
            (2) Start-up funding.--
                    (A) In general.--In order to provide for the 
                establishment of the public health insurance option 
                there is hereby appropriated to the Secretary, out of 
                any funds in the Treasury not otherwise appropriated, 
                $2,000,000,000. In order to provide for initial claims 
                reserves before the collection of premiums, there is 
                hereby appropriated to the Secretary, out of any funds 
                in the Treasury not otherwise appropriated, such sums 
                as necessary to cover 90 days worth of claims reserves 
                based on projected enrollment.
                    (B) Amortization of start-up funding.--The 
                Secretary shall provide for the repayment of the 
                startup funding provided under subparagraph (A) to the 
                Treasury in an amortized manner over the 10-year period 
                beginning with Y1.
                    (C) Limitation on funding.--Nothing in this section 
                shall be construed as authorizing any additional 
                appropriations to the Account, other than such amounts 
                as are otherwise provided with respect to other 
                Exchange-participating health benefits plans.

SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.

    (a) Rates Established by Secretary.--
            (1) In general.--The Secretary shall establish payment 
        rates for the public health insurance option for services and 
        health care providers consistent with this section and may 
        change such payment rates in accordance with section 224.
            (2) Initial payment rules.--
                    (A) In general.--Except as provided in subparagraph 
                (B) and subsection (b)(1), during Y1, Y2, and Y3, the 
                Secretary shall base the payment rates under this 
                section for services and providers described in 
                paragraph (1) on the payment rates for similar services 
                and providers under parts A and B of Medicare.
                    (B) Exceptions.--
                            (i) Practitioners' services.--Payment rates 
                        for practitioners' services otherwise 
                        established under the fee schedule under 
                        section 1848 of the Social Security Act shall 
                        be applied without regard to the provisions 
                        under subsection (f) of such section and the 
                        update under subsection (d)(4) under such 
                        section for a year as applied under this 
                        paragraph shall be not less than 1 percent.
                            (ii) Adjustments.--The Secretary may 
                        determine the extent to which Medicare 
                        adjustments applicable to base payment rates 
                        under parts A and B of Medicare shall apply 
                        under this subtitle.
            (3) For new services.--The Secretary shall modify payment 
        rates described in paragraph (2) in order to accommodate 
        payments for services, such as well-child visits, that are not 
        otherwise covered under Medicare.
            (4) Prescription drugs.--Payment rates under this section 
        for prescription drugs that are not paid for under part A or 
        part B of Medicare shall be at rates negotiated by the 
        Secretary.
    (b) Incentives for Participating Providers.--
            (1) Initial incentive period.--
                    (A) In general.--The Secretary shall provide, in 
                the case of services described in subparagraph (B) 
                furnished during Y1, Y2, and Y3, for payment rates that 
                are 5 percent greater than the rates established under 
                subsection (a).
                    (B) Services described.--The services described in 
                this subparagraph are items and professional services, 
                under the public health insurance option by a physician 
                or other health care practitioner who participates in 
                both Medicare and the public health insurance option.
                    (C) Special rules.--A pediatrician and any other 
                health care practitioner who is a type of practitioner 
                that does not typically participate in Medicare (as 
                determined by the Secretary) shall also be eligible for 
                the increased payment rates under subparagraph (A).
            (2) Subsequent periods.--Beginning with Y4 and for 
        subsequent years, the Secretary shall continue to use an 
        administrative process to set such rates in order to promote 
        payment accuracy, to ensure adequate beneficiary access to 
        providers, and to promote affordability and the efficient 
        delivery of medical care consistent with section 221(a). Such 
        rates shall not be set at levels expected to increase overall 
        medical costs under the option beyond what would be expected if 
        the process under subsection (a)(2) and paragraph (1) of this 
        subsection were continued.
            (3) Establishment of a provider network.--Health care 
        providers participating under Medicare are participating 
        providers in the public health insurance option unless they opt 
        out in a process established by the Secretary.
    (c) Administrative Process for Setting Rates.--Chapter 5 of title 
5, United States Code shall apply to the process for the initial 
establishment of payment rates under this section but not to the 
specific methodology for establishing such rates or the calculation of 
such rates.
    (d) Construction.--Nothing in this subtitle shall be construed as 
limiting the Secretary's authority to correct for payments that are 
excessive or deficient, taking into account the provisions of section 
221(a) and the amounts paid for similar health care providers and 
services under other Exchange-participating health benefits plans.
    (e) Construction.--Nothing in this subtitle shall be construed as 
affecting the authority of the Secretary to establish payment rates, 
including payments to provide for the more efficient delivery of 
services, such as the initiatives provided for under section 224.
    (f) Limitations on Review.--There shall be no administrative or 
judicial review of a payment rate or methodology established under this 
section or under section 224.

SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.

    (a) In General.--For plan years beginning with Y1, the Secretary 
may utilize innovative payment mechanisms and policies to determine 
payments for items and services under the public health insurance 
option. The payment mechanisms and policies under this section may 
include patient-centered medical home and other care management 
payments, accountable care organizations, value-based purchasing, 
bundling of services, differential payment rates, performance or 
utilization based payments, partial capitation, and direct contracting 
with providers.
    (b) Requirements for Innovative Payments.--The Secretary shall 
design and implement the payment mechanisms and policies under this 
section in a manner that--
            (1) seeks to--
                    (A) improve health outcomes;
                    (B) reduce health disparities (including racial, 
                ethnic, and other disparities);
                    (C) provide efficient and affordable care;
                    (D) address geographic variation in the provision 
                of health services; or
                    (E) prevent or manage chronic illness; and
            (2) promotes care that is integrated, patient-centered, 
        quality, and efficient.
    (c) Encouraging the Use of High Value Services.--To the extent 
allowed by the benefit standards applied to all Exchange-participating 
health benefits plans, the public health insurance option may modify 
cost sharing and payment rates to encourage the use of services that 
promote health and value.
    (d) Non-uniformity Permitted.--Nothing in this subtitle shall 
prevent the Secretary from varying payments based on different payment 
structure models (such as accountable care organizations and medical 
homes) under the public health insurance option for different 
geographic areas.

SEC. 225. PROVIDER PARTICIPATION.

    (a) In General.--The Secretary shall establish conditions of 
participation for health care providers under the public health 
insurance option.
    (b) Licensure or Certification.--The Secretary shall not allow a 
health care provider to participate in the public health insurance 
option unless such provider is appropriately licensed, certified, or 
otherwise permitted to practice under State law.
    (c) Payment Terms for Providers.--
            (1) Physicians.--The Secretary shall provide for the annual 
        participation of physicians under the public health insurance 
        option, for which payment may be made for services furnished 
        during the year, in one of 2 classes:
                    (A) Preferred physicians.--Those physicians who 
                agree to accept the payment rate established under 
                section 223 (without regard to cost-sharing) as the 
                payment in full.
                    (B) Participating, non-preferred physicians.--Those 
                physicians who agree not to impose charges (in relation 
                to the payment rate described in section 223 for such 
                physicians) that exceed the ratio permitted under 
                section 1848(g)(2)(C) of the Social Security Act.
            (2) Other providers.--The Secretary shall provide for the 
        participation (on an annual or other basis specified by the 
        Secretary) of health care providers (other than physicians) 
        under the public health insurance option under which payment 
        shall only be available if the provider agrees to accept the 
        payment rate established under section 223 (without regard to 
        cost-sharing) as the payment in full.
    (d) Exclusion of Certain Providers.--The Secretary shall exclude 
from participation under the public health insurance option a health 
care provider that is excluded from participation in a Federal health 
care program (as defined in section 1128B(f) of the Social Security 
Act).

SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.

    Provisions of law (other than criminal law provisions) identified 
by the Secretary by regulation, in consultation with the Inspector 
General of the Department of Health and Human Services, that impose 
sanctions with respect to waste, fraud, and abuse under Medicare, such 
as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to 
the public health insurance option.

SEC. 227. SENSE OF THE HOUSE REGARDING ENROLLMENT OF MEMBERS IN THE 
              PUBLIC OPTION.

    It is the sense of the House of Representatives that Members who 
vote in favor of the establishment of a public, Federal Government run 
health insurance option, and senior members of the President's 
administration, are urged to forgo their right to participate in the 
Federal Employees Health Benefits Program (FEHBP) and agree to enroll 
under that public option.

              Subtitle C--Individual Affordability Credits

SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.

    (a) In General.--Subject to the succeeding provisions of this 
subtitle, in the case of an affordable credit eligible individual 
enrolled in an Exchange-participating health benefits plan--
            (1) the individual shall be eligible for, in accordance 
        with this subtitle, affordability credits consisting of--
                    (A) an affordability premium credit under section 
                243 to be applied against the premium for the Exchange-
                participating health benefits plan in which the 
                individual is enrolled; and
                    (B) an affordability cost-sharing credit under 
                section 244 to be applied as a reduction of the cost-
                sharing otherwise applicable to such plan; and
            (2) the Commissioner shall pay the QHBP offering entity 
        that offers such plan from the Health Insurance Exchange Trust 
        Fund the aggregate amount of affordability credits for all 
        affordable credit eligible individuals enrolled in such plan.
    (b) Application.--
            (1) In general.--An Exchange eligible individual may apply 
        to the Commissioner through the Health Insurance Exchange or 
        through another entity under an arrangement made with the 
        Commissioner, in a form and manner specified by the 
        Commissioner. The Commissioner through the Health Insurance 
        Exchange or through another public entity under an arrangement 
        made with the Commissioner shall make a determination as to 
        eligibility of an individual for affordability credits under 
        this subtitle. The Commissioner shall establish a process 
        whereby, on the basis of information otherwise available, 
        individuals may be deemed to be affordable credit eligible 
        individuals. In carrying this subtitle, the Commissioner shall 
        establish effective methods that ensure that individuals with 
        limited English proficiency are able to apply for affordability 
        credits.
            (2) Use of state medicaid agencies.--If the Commissioner 
        determines that a State Medicaid agency has the capacity to 
        make a determination of eligibility for affordability credits 
        under this subtitle and under the same standards as used by the 
        Commissioner, under the Medicaid memorandum of understanding 
        (as defined in section 205(c)(4))--
                    (A) the State Medicaid agency is authorized to 
                conduct such determinations for any Exchange-eligible 
                individual who requests such a determination; and
                    (B) the Commissioner shall reimburse the State 
                Medicaid agency for the costs of conducting such 
                determinations.
            (3) Medicaid screen and enroll obligation.--In the case of 
        an application made under paragraph (1), there shall be a 
        determination of whether the individual is a Medicaid-eligible 
        individual. If the individual is determined to be so eligible, 
        the Commissioner, through the Medicaid memorandum of 
        understanding, shall provide for the enrollment of the 
        individual under the State Medicaid plan in accordance with the 
        Medicaid memorandum of understanding. In the case of such an 
        enrollment, the State shall provide for the same periodic 
        redetermination of eligibility under Medicaid as would 
        otherwise apply if the individual had directly applied for 
        medical assistance to the State Medicaid agency.
    (c) Use of Affordability Credits.--
            (1) In general.--In Y1 and Y2 an affordable credit eligible 
        individual may use an affordability credit only with respect to 
        a basic plan.
            (2) Flexibility in plan enrollment authorized.--Beginning 
        with Y3, the Commissioner shall establish a process to allow an 
        affordability credit to be used for enrollees in enhanced or 
        premium plans. In the case of an affordable credit eligible 
        individual who enrolls in an enhanced or premium plan, the 
        individual shall be responsible for any difference between the 
        premium for such plan and the affordable credit amount 
        otherwise applicable if the individual had enrolled in a basic 
        plan.
    (d) Access to Data.--In carrying out this subtitle, the 
Commissioner shall request from the Secretary of the Treasury 
consistent with section 6103 of the Internal Revenue Code of 1986 such 
information as may be required to carry out this subtitle.
    (e) No Cash Rebates.--In no case shall an affordable credit 
eligible individual receive any cash payment as a result of the 
application of this subtitle.

SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

    (a) Definition.--
            (1) In general.--For purposes of this subdivision, the term 
        ``affordable credit eligible individual'' means, subject to 
        subsection (b), an individual who is lawfully present in a 
        State in the United States (other than as a nonimmigrant 
        described in a subparagraph (excluding subparagraphs (K), (T), 
        (U), and (V)) of section 101(a)(15) of the Immigration and 
        Nationality Act)--
                    (A) who is enrolled under an Exchange-participating 
                health benefits plan and is not enrolled under such 
                plan as an employee (or dependent of an employee) 
                through an employer qualified health benefits plan that 
                meets the requirements of section 312;
                    (B) with family income below 400 percent of the 
                Federal poverty level for a family of the size 
                involved; and
                    (C) who is not a Medicaid eligible individual, 
                other than an individual described in section 202(d)(3) 
                or an individual during a transition period under 
                section 202(d)(4)(B)(ii).
            (2) Treatment of family.--Except as the Commissioner may 
        otherwise provide, members of the same family who are 
        affordable credit eligible individuals shall be treated as a 
        single affordable credit individual eligible for the applicable 
        credit for such a family under this subtitle.
    (b) Limitations on Employee and Dependent Disqualification.--
            (1) In general.--Subject to paragraph (2), the term 
        ``affordable credit eligible individual'' does not include a 
        full-time employee of an employer if the employer offers the 
        employee coverage (for the employee and dependents) as a full-
        time employee under a group health plan if the coverage and 
        employer contribution under the plan meet the requirements of 
        section 312.
            (2) Exceptions.--
                    (A) For certain family circumstances.--The 
                Commissioner shall establish such exceptions and 
                special rules in the case described in paragraph (1) as 
                may be appropriate in the case of a divorced or 
                separated individual or such a dependent of an employee 
                who would otherwise be an affordable credit eligible 
                individual.
                    (B) For unaffordable employer coverage.--For years 
                beginning with Y2, in the case of full-time employees 
                for which the cost of the employee premium (plus, to 
                the extent specified by the Commissioner, out-of-pocket 
                cost-sharing for such year or the preceding year) for 
                coverage under a group health plan would exceed 11 
                percent of current family income (determined by the 
                Commissioner on the basis of verifiable documentation 
                and without regard to section 245), paragraph (1) shall 
                not apply.
    (c) Income Defined.--
            (1) In general.--In this title, the term ``income'' means 
        modified adjusted gross income (as defined in section 59B of 
        the Internal Revenue Code of 1986).
            (2) Study of income disregards.--The Commissioner shall 
        conduct a study that examines the application of income 
        disregards for purposes of this subtitle. Not later than the 
        first day of Y2, the Commissioner shall submit to Congress a 
        report on such study and shall include such recommendations as 
        the Commissioner determines appropriate.
    (d) Clarification of Treatment of Affordability Credits.--
Affordability credits under this subtitle shall not be treated, for 
purposes of title IV of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996, to be a benefit provided under 
section 403 of such title.

SEC. 243. AFFORDABLE PREMIUM CREDIT.

    (a) In General.--The affordability premium credit under this 
section for an affordable credit eligible individual enrolled in an 
Exchange-participating health benefits plan is in an amount equal to 
the amount (if any) by which the premium for the plan (or, if less, the 
reference premium amount specified in subsection (c)), exceeds the 
affordable premium amount specified in subsection (b) for the 
individual.
    (b) Affordable Premium Amount.--
            (1) In general.--The affordable premium amount specified in 
        this subsection for an individual for monthly premium in a plan 
        year shall be equal to \1/12\ of the product of--
                    (A) the premium percentage limit specified in 
                paragraph (2) for the individual based upon the 
                individual's family income for the plan year; and
                    (B) the individual's family income for such plan 
                year.
            (2) Premium percentage limits based on table.--The 
        Commissioner shall establish premium percentage limits so that 
        for individuals whose family income is within an income tier 
        specified in the table in subsection (d) such percentage limits 
        shall increase, on a sliding scale in a linear manner, from the 
        initial premium percentage to the final premium percentage 
        specified in such table for such income tier.
    (c) Reference Premium Amount.--The reference premium amount 
specified in this subsection for a plan year for an individual in a 
premium rating area is equal to the average premium for the 3 basic 
plans in the area for the plan year with the lowest premium levels. In 
computing such amount the Commissioner may exclude plans with extremely 
limited enrollments.
    (d) Table of Premium Percentage Limits and Actuarial Value 
Percentages Based on Income Tier.--
            (1) In general.--For purposes of this subtitle, the table 
        specified in this subsection is as follows:

 
   In the case of family income
 (expressed as a percent of FPL)      The initial premium         The final premium        The actuarial value
within the following income tier:       percentage is--            percentage is--           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%
 

            (2) Special rules.--For purposes of applying the table 
        under paragraph (1)--
                    (A) For lowest level of income.--In the case of an 
                individual with income that does not exceed 133 percent 
                of FPL, the individual shall be considered to have 
                income that is 133% of FPL.
                    (B) Application of higher actuarial value 
                percentage at tier transition points.--If two actuarial 
                value percentages may be determined with respect to an 
                individual, the actuarial value percentage shall be the 
                higher of such percentages.

SEC. 244. AFFORDABILITY COST-SHARING CREDIT.

    (a) In General.--The affordability cost-sharing credit under this 
section for an affordable credit eligible individual enrolled in an 
Exchange-participating health benefits plan is in the form of the cost-
sharing reduction described in subsection (b) provided under this 
section for the income tier in which the individual is classified based 
on the individual's family income.
    (b) Cost-sharing Reductions.--The Commissioner shall specify a 
reduction in cost-sharing amounts and the annual limitation on cost-
sharing specified in section 122(c)(2)(B) under a basic plan for each 
income tier specified in the table under section 243(d), with respect 
to a year, in a manner so that, as estimated by the Commissioner, the 
actuarial value of the coverage with such reduced cost-sharing amounts 
(and the reduced annual cost-sharing limit) is equal to the actuarial 
value percentage (specified in the table under section 243(d) for the 
income tier involved) of the full actuarial value if there were no 
cost-sharing imposed under the plan.
    (c) Determination and Payment of Cost-sharing Affordability 
Credit.--In the case of an affordable credit eligible individual in a 
tier enrolled in an Exchange-participating health benefits plan offered 
by a QHBP offering entity, the Commissioner shall provide for payment 
to the offering entity of an amount equivalent to the increased 
actuarial value of the benefits under the plan provided under section 
203(c)(2)(B) resulting from the reduction in cost-sharing described in 
subsection (b).

SEC. 245. INCOME DETERMINATIONS.

    (a) In General.--In applying this subtitle for an affordability 
credit for an individual for a plan year, the individual's income shall 
be the income (as defined in section 242(c)) for the individual for the 
most recent taxable year (as determined in accordance with rules of the 
Commissioner). The Federal poverty level applied shall be such level in 
effect as of the date of the application.
    (b) Program Integrity; Income Verification Procedures.--
            (1) Program integrity.--The Commissioner shall take such 
        steps as may be appropriate to ensure the accuracy of 
        determinations and redeterminations under this subtitle.
            (2) Income verification.--
                    (A) In general.--Upon an initial application of an 
                individual for an affordability credit under this 
                subtitle (or in applying section 242(b)) or upon an 
                application for a change in the affordability credit 
                based upon a significant change in family income 
                described in subparagraph (A)--
                            (i) the Commissioner shall request from the 
                        Secretary of the Treasury the disclosure to the 
                        Commissioner of such information as may be 
                        permitted to verify the information contained 
                        in such application; and
                            (ii) the Commissioner shall use the 
                        information so disclosed to verify such 
                        information.
                    (B) Alternative procedures.--The Commissioner shall 
                establish procedures for the verification of income for 
                purposes of this subtitle if no income tax return is 
                available for the most recent completed tax year.
    (c) Special Rules.--
            (1) Changes in income as a percent of fpl.--In the case 
        that an individual's income (expressed as a percentage of the 
        Federal poverty level for a family of the size involved) for a 
        plan year is expected (in a manner specified by the 
        Commissioner) to be significantly different from the income (as 
        so expressed) used under subsection (a), the Commissioner shall 
        establish rules requiring an individual to report, consistent 
        with the mechanism established under paragraph (2), significant 
        changes in such income (including a significant change in 
        family composition) to the Commissioner and requiring the 
        substitution of such income for the income otherwise 
        applicable.
            (2) Reporting of significant changes in income.--The 
        Commissioner shall establish rules under which an individual 
        determined to be an affordable credit eligible individual would 
        be required to inform the Commissioner when there is a 
        significant change in the family income of the individual 
        (expressed as a percentage of the FPL for a family of the size 
        involved) and of the information regarding such change. Such 
        mechanism shall provide for guidelines that specify the 
        circumstances that qualify as a significant change, the 
        verifiable information required to document such a change, and 
        the process for submission of such information. If the 
        Commissioner receives new information from an individual 
        regarding the family income of the individual, the Commissioner 
        shall provide for a redetermination of the individual's 
        eligibility to be an affordable credit eligible individual.
            (3) Transition for chip.--In the case of a child described 
        in section 202(d)(2), the Commissioner shall establish rules 
        under which the family income of the child is deemed to be no 
        greater than the family income of the child as most recently 
        determined before Y1 by the State under title XXI of the Social 
        Security Act.
            (4) Study of geographic variation in application of fpl.--
        The Commissioner shall examine the feasibility and implication 
        of adjusting the application of the Federal poverty level under 
        this subtitle for different geographic areas so as to reflect 
        the variations in cost-of-living among different areas within 
        the United States. If the Commissioner determines that an 
        adjustment is feasible, the study should include a methodology 
        to make such an adjustment. Not later than the first day of Y2, 
        the Commissioner shall submit to Congress a report on such 
        study and shall include such recommendations as the 
        Commissioner determines appropriate.
    (d) Penalties for Misrepresentation.--In the case of an individual 
intentionally misrepresents family income or the individual fails 
(without regard to intent) to disclose to the Commissioner a 
significant change in family income under subsection (c) in a manner 
that results in the individual becoming an affordable credit eligible 
individual when the individual is not or in the amount of the 
affordability credit exceeding the correct amount--
            (1) the individual is liable for repayment of the amount of 
        the improper affordability credit; ;and
            (2) in the case of such an intentional misrepresentation or 
        other egregious circumstances specified by the Commissioner, 
        the Commissioner may impose an additional penalty.

SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.

    Nothing in this subtitle shall allow Federal payments for 
affordability credits on behalf of individuals who are not lawfully 
present in the United States.

                      Subtitle D--State Innovation

SEC. 251. WAIVER OF ERISA LIMITATION; APPLICATION INSTEAD OF STATE 
              SINGLE PAYER SYSTEM.

    (a) In General.--A State may request from the Secretary, and the 
Secretary must grant except under extraordinary circumstances, a waiver 
of application of section 514 of the Employee Retirement Income 
Security Act of 1974 with respect to a state single payer system 
enacted into law by such State that would be structured and operate in 
a manner consistent with this subtitle. The Secretary shall provide for 
the revocation of any waiver granted under this section upon a 
determination made by the Secretary that the requirements of the 
preceding sentence are no longer being met.
    (b) Effect of Waiver.--During any period for which a waiver under 
subsection (a) is in effect--
            (1) the provisions of section 514 of the Employee 
        Retirement Income Security Act of 1974 shall not apply with 
        respect to the State single payer system; and
            (2) the State single payer system shall operate in the 
        State instead of the public health insurance option or the 
        National Health Exchange.
    (c) Construction.--Nothing in this subtitle shall be construed to 
limit or otherwise affect the transfer and allocation under this 
division of funds to States with single payer systems.

SEC. 252. REQUIREMENTS.

    A State single payer system shall--
            (1) ) provide benefits that meet or exceed the standards of 
        coverage and quality of care set forth in this division; and
            (2) ensure that the cost to the Federal Government 
        resulting from the waiver granted under section 261 is neither 
        substantially greater nor substantially less than would have 
        been the case in the absence of such waiver, except that:
                    (A) the State may seek and benefit from planning 
                and start-up funds with respect to the system; and
                    (B) nothing in this paragraph shall be construed to 
                preclude allowance for normal variations in population 
                demographics, health status, and other factors 
                exogenous to the health care system that may affect 
                differences in costs.

SEC. 253. DEFINITIONS.

    (a) State Single Payer System.--The term ``State single payer 
system'' means, in connection with a State, a non-profit program of the 
State for providing health care--
            (1) in which a single agency of the State is responsible 
        for financing health care benefits for all residents of the 
        State and for the administration or supervision of the 
        administration of the program;
            (2) under which private insurance duplicating the benefits 
        provided in the single payer program is prohibited;
            (3) which provides comprehensive health benefits to all 
        residents of the State, and provides measures to assure free 
        choice of providers for covered services, to promote quality, 
        and to help resolve complaints and disputes between consumers 
        and providers; and
            (4) under which participation by health maintenance 
        organizations is limited to non-profit health maintenance 
        organizations that own their own delivery facilities and employ 
        physicians on salary, and funding is limited to services that 
        the health maintenance organizations actually deliver; and
            (5) which may be maintained by such State together one or 
        more other States in a geographic region.
    (b) Secretary.--The term ``Secretary'' means the Secretary of 
Labor, acting in consultation with the Secretary of Health and Human 
Services.

                    TITLE III--SHARED RESPONSIBILITY

                 Subtitle A--Individual Responsibility

SEC. 301. INDIVIDUAL RESPONSIBILITY.

    For an individual's responsibility to obtain acceptable coverage, 
see section 59B of the Internal Revenue Code of 1986 (as added by 
section 401 of this division).

                  Subtitle B--Employer Responsibility

           PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS

SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    (a) In General.--An employer meets the requirements of this section 
if such employer does all of the following:
            (1) Offer of coverage.--The employer offers each employee 
        individual and family coverage under a qualified health 
        benefits plan (or under a current employment-based health plan 
        (within the meaning of section 102(b))) in accordance with 
        section 312.
            (2) Contribution towards coverage.--If an employee accepts 
        such offer of coverage, the employer makes timely contributions 
        towards such coverage in accordance with section 312.
            (3) Contribution in lieu of coverage.--Beginning with Y2, 
        if an employee declines such offer but otherwise obtains 
        coverage in an Exchange-participating health benefits plan 
        (other than by reason of being covered by family coverage as a 
        spouse or dependent of the primary insured), the employer shall 
        make a timely contribution to the Health Insurance Exchange 
        with respect to each such employee in accordance with section 
        313.
    (b)  Hardship Exemption.--Notwithstanding any other provision of 
this part, an employer may, in a form and manner which shall be 
prescribed by the Secretary, apply to the Secretary for a waiver from 
the health coverage participation requirements of this part for any 2-
year period. The Secretary shall grant the waiver within 30 days after 
submission of the application if the application reasonably 
demonstrates to the Secretary that meeting the requirements of this 
part would result in job losses that would negatively impact the 
employer or the community in which the employer is located.

SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND 
              DEPENDENT COVERAGE.

    (a) In General.--An employer meets the requirements of this section 
with respect to an employee if the following requirements are met:
            (1) Offering of coverage.--The employer offers the coverage 
        described in section 311(1) either through an Exchange-
        participating health benefits plan or other than through such a 
        plan.
            (2) Employer required contribution.--The employer timely 
        pays to the issuer of such coverage an amount not less than the 
        employer required contribution specified in subsection (b) for 
        such coverage.
            (3) Provision of information.--The employer provides the 
        Health Choices Commissioner, the Secretary of Labor, the 
        Secretary of Health and Human Services, and the Secretary of 
        the Treasury, as applicable, with such information as the 
        Commissioner may require to ascertain compliance with the 
        requirements of this section.
            (4) Autoenrollment of employees.--The employer provides for 
        autoenrollment of the employee in accordance with subsection 
        (c).
    (b) Reduction of Employee Premiums Through Minimum Employer 
Contribution.--
            (1) Full-time employees.--The minimum employer contribution 
        described in this subsection for coverage of a full-time 
        employee (and, if any, the employee's spouse and qualifying 
        children (as defined in section 152(c) of the Internal Revenue 
        Code of 1986) under a qualified health benefits plan (or 
        current employment-based health plan) is equal to--
                    (A) in case of individual coverage, not less than 
                72.5 percent of the applicable premium (as defined in 
                section 4980B(f)(4) of such Code, subject to paragraph 
                (2)) of the lowest cost plan offered by the employer 
                that is a qualified health benefits plan (or is such 
                current employment-based health plan); and
                    (B) in the case of family coverage which includes 
                coverage of such spouse and children, not less 65 
                percent of such applicable premium of such lowest cost 
                plan.
            (2) Applicable premium for exchange coverage.--In this 
        subtitle, the amount of the applicable premium of the lowest 
        cost plan with respect to coverage of an employee under an 
        Exchange-participating health benefits plan is the reference 
        premium amount under section 243(c) for individual coverage 
        (or, if elected, family coverage) for the premium rating area 
        in which the individual or family resides.
            (3) Minimum employer contribution for employees other than 
        full-time employees.--In the case of coverage for an employee 
        who is not a full-time employee, the amount of the minimum 
        employer contribution under this subsection shall be a 
        proportion (as determined in accordance with rules of the 
        Health Choices Commissioner, the Secretary of Labor, the 
        Secretary of Health and Human Services, and the Secretary of 
        the Treasury, as applicable) of the minimum employer 
        contribution under this subsection with respect to a full-time 
        employee that reflects the proportion of--
                    (A) the average weekly hours of employment of the 
                employee by the employer, to
                    (B) the minimum weekly hours specified by the 
                Commissioner for an employee to be a full-time 
                employee.
            (4) Salary reductions not treated as employer 
        contributions.--For purposes of this section, any contribution 
        on behalf of an employee with respect to which there is a 
        corresponding reduction in the compensation of the employee 
        shall not be treated as an amount paid by the employer.
    (c) Automatic Enrollment for Employer Sponsored Health Benefits.--
            (1) In general.--The requirement of this subsection with 
        respect to an employer and an employee is that the employer 
        automatically enrolls such employee into the employment-based 
        health benefits plan for individual coverage under the plan 
        option with the lowest applicable employee premium.
            (2) Opt-out.--In no case may an employer automatically 
        enroll an employee in a plan under paragraph (1) if such 
        employee makes an affirmative election to opt out of such plan 
        or to elect coverage under an employment-based health benefits 
        plan offered by such employer. An employer shall provide an 
        employee with a 30-day period to make such an affirmative 
        election before the employer may automatically enroll the 
        employee in such a plan.
            (3) Notice requirements.--
                    (A) In general.--Each employer described in 
                paragraph (1) who automatically enrolls an employee 
                into a plan as described in such paragraph shall 
                provide the employees, within a reasonable period 
                before the beginning of each plan year (or, in the case 
                of new employees, within a reasonable period before the 
                end of the enrollment period for such a new employee), 
                written notice of the employees' rights and obligations 
                relating to the automatic enrollment requirement under 
                such paragraph. Such notice must be comprehensive and 
                understood by the average employee to whom the 
                automatic enrollment requirement applies.
                    (B) Inclusion of specific information.--The written 
                notice under subparagraph (A) must explain an 
                employee's right to opt out of being automatically 
                enrolled in a plan and in the case that more than one 
                level of benefits or employee premium level is offered 
                by the employer involved, the notice must explain which 
                level of benefits and employee premium level the 
                employee will be automatically enrolled in the absence 
                of an affirmative election by the employee.

SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.

    (a) In General.--A contribution is made in accordance with this 
section with respect to an employee if such contribution is equal to an 
amount equal to 8 percent of the average wages paid by the employer 
during the period of enrollment (determined by taking into account all 
employees of the employer and in such manner as the Commissioner 
provides, including rules providing for the appropriate aggregation of 
related employers). Any such contribution--
            (1) shall be paid to the Health Choices Commissioner for 
        deposit into the Health Insurance Exchange Trust Fund, and
            (2) shall not be applied against the premium of the 
        employee under the Exchange-participating health benefits plan 
        in which the employee is enrolled.
    (b) Special Rules for Small Employers.--
            (1) In general.--In the case of any employer who is a small 
        employer for any calendar year, subsection (a) shall be applied 
        by substituting the applicable percentage determined in 
        accordance with the following table for ``8 percent'':

If the annual payroll of such employer   The applicable percentage is:
 for the preceding calendar year:
  Does not exceed $250,000.............  0 percent
  Exceeds $250,000, but does not exceed  2 percent
   $300,000.
  Exceeds $300,000, but does not exceed  4 percent
   $350,000.
  Exceeds $350,000, but does not exceed  6 percent
   $400,000.
 

            (2) Small employer.--For purposes of this subsection, the 
        term ``small employer'' means any employer for any calendar 
        year if the annual payroll of such employer for the preceding 
        calendar year does not exceed $400,000.
            (3) Annual payroll.--For purposes of this paragraph, the 
        term ``annual payroll'' means, with respect to any employer for 
        any calendar year, the aggregate wages paid by the employer 
        during such calendar year.
            (4) Aggregation rules.--Related employers and predecessors 
        shall be treated as a single employer for purposes of this 
        subsection.

SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.

    The Health Choices Commissioner (in coordination with the Secretary 
of Labor, the Secretary of Health and Human Services, and the Secretary 
of the Treasury) shall have authority to set standards for determining 
whether employers or insurers are undertaking any actions to affect the 
risk pool within the Health Insurance Exchange by inducing individuals 
to decline coverage under a qualified health benefits plan (or current 
employment-based health plan (within the meaning of section 102(b)) 
offered by the employer and instead to enroll in an Exchange-
participating health benefits plan. An employer violating such 
standards shall be treated as not meeting the requirements of this 
section.

   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.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the end the 
following new part:

     ``PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS

``SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH 
              COVERAGE PARTICIPATION REQUIREMENTS.

    ``(a) In General.--An employer may make an election with the 
Secretary to be subject to the health coverage participation 
requirements.
    ``(b) Time and Manner.--An election under subsection (a) may be 
made at such time and in such form and manner as the Secretary may 
prescribe.

``SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.

    ``(a) In General.--If an employer makes an election to the 
Secretary under section 801--
            ``(1) such election shall be treated as the establishment 
        and maintenance of a group health plan (as defined in section 
        733(a)) for purposes of this title, subject to section 151 of 
        the America's Affordable Health Choices Act of 2009, and
            ``(2) the health coverage participation requirements shall 
        be deemed to be included as terms and conditions of such plan.
    ``(b) Periodic Investigations to Discover Noncompliance.--The 
Secretary shall regularly audit a representative sampling of employers 
and group health plans and conduct investigations and other activities 
under section 504 with respect to such sampling of plans so as to 
discover noncompliance with the health coverage participation 
requirements in connection with such plans. The Secretary shall 
communicate findings of noncompliance made by the Secretary under this 
subsection to the Secretary of the Treasury and the Health Choices 
Commissioner. The Secretary shall take such timely enforcement action 
as appropriate to achieve compliance.
    ``(c) Recordkeeping.--To facilitate the audits described in 
subsection (b), the Secretary shall promulgate recordkeeping 
requirements for employers to account for both employees of the 
employer and individuals whom the employer has not treated as employees 
of the employer but with whom the employer, in the course of the trade 
or business in which the employer is engaged, has engaged for the 
performance of labor or services.

``SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    ``For purposes of this part, the term `health coverage 
participation requirements' means the requirements of part 1 of 
subtitle B of title III of subdivision A of America's Affordable Health 
Choices Act of 2009 (as in effect on the date of the enactment of such 
Act).

``SEC. 804. RULES FOR APPLYING REQUIREMENTS.

    ``(a) Affiliated Groups.--In the case of any employer which is part 
of a group of employers who are treated as a single employer under 
subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue 
Code of 1986, the election under section 801 shall be made by such 
employer as the Secretary may provide. Any such election, once made, 
shall apply to all members of such group.
    ``(b) Separate Elections.--Under regulations prescribed by the 
Secretary, separate elections may be made under section 801 with 
respect to--
            ``(1) separate lines of business, and
            ``(2) full-time employees and employees who are not full-
        time employees.

``SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL 
              NONCOMPLIANCE.

    ``The Secretary may terminate the election of any employer under 
section 801 if the Secretary (in coordination with the Health Choices 
Commissioner) determines that such employer is in substantial 
noncompliance with the health coverage participation requirements and 
shall refer any such determination to the Secretary of the Treasury as 
appropriate.

``SEC. 806. REGULATIONS.

    ``The Secretary may promulgate such regulations as may be necessary 
or appropriate to carry out the provisions of this part, in accordance 
with section 324(a) of the America's Affordable Health Choices Act of 
2009. The Secretary may promulgate any interim final rules as the 
Secretary determines are appropriate to carry out this part.''.
    (b) Enforcement of Health Coverage Participation Requirements.--
Section 502 of such Act (29 U.S.C. 1132) is amended--
            (1) in subsection (a)(6), by striking ``paragraph'' and all 
        that follows through ``subsection (c)'' and inserting 
        ``paragraph (2), (4), (5), (6), (7), (8), (9), (10), or (11) of 
        subsection (c)''; and
            (2) in subsection (c), by redesignating the second 
        paragraph (10) as paragraph (12) and by inserting after the 
        first paragraph (10) the following new paragraph:
            ``(11) Health coverage participation requirements.--
                    ``(A) Civil penalties.--In the case of any employer 
                who fails (during any period with respect to which an 
                election under section 801(a) is in effect) to satisfy 
                the health coverage participation requirements with 
                respect to any employee, the Secretary may assess a 
                civil penalty against the employer of $100 for each day 
                in the period beginning on the date such failure first 
                occurs and ending on the date such failure is 
                corrected.
                    ``(B) Health coverage participation requirements.--
                For purposes of this paragraph, the term `health 
                coverage participation requirements' has the meaning 
                provided in section 803.
                    ``(C) Limitations on amount of penalty.--
                            ``(i) Penalty not to apply where failure 
                        not discovered exercising reasonable 
                        diligence.--No penalty shall be assessed under 
                        subparagraph (A) with respect to any failure 
                        during any period for which it is established 
                        to the satisfaction of the Secretary that the 
                        employer did not know, or exercising reasonable 
                        diligence would not have known, that such 
                        failure existed.
                            ``(ii) Penalty not to apply to failures 
                        corrected within 30 days.--No penalty shall be 
                        assessed under subparagraph (A) with respect to 
                        any failure if--
                                    ``(I) such failure was due to 
                                reasonable cause and not to willful 
                                neglect, and
                                    ``(II) such failure is corrected 
                                during the 30-day period beginning on 
                                the 1st date that the employer knew, or 
                                exercising reasonable diligence would 
                                have known, that such failure existed.
                            ``(iii) Overall limitation for 
                        unintentional failures.--In the case of 
                        failures which are due to reasonable cause and 
                        not to willful neglect, the penalty assessed 
                        under subparagraph (A) for failures during any 
                        1-year period shall not exceed the amount equal 
                        to the lesser of--
                                    ``(I) 10 percent of the aggregate 
                                amount paid or incurred by the employer 
                                (or predecessor employer) during the 
                                preceding 1-year period for group 
                                health plans, or
                                    ``(II) $500,000.
                    ``(D) Advance notification of failure prior to 
                assessment.--Before a reasonable time prior to the 
                assessment of any penalty under this paragraph with 
                respect to any failure by an employer, the Secretary 
                shall inform the employer in writing of such failure 
                and shall provide the employer information regarding 
                efforts and procedures which may be undertaken by the 
                employer to correct such failure.
                    ``(E) Coordination with excise tax.--Under 
                regulations prescribed in accordance with section 324 
                of the America's Affordable Health Choices Act of 2009, 
                the Secretary and the Secretary of the Treasury shall 
                coordinate the assessment of penalties under this 
                section in connection with failures to satisfy health 
                coverage participation requirements with the imposition 
                of excise taxes on such failures under section 4980H(b) 
                of the Internal Revenue Code of 1986 so as to avoid 
                duplication of penalties with respect to such failures.
                    ``(F) Deposit of penalty collected.--Any amount of 
                penalty collected under this paragraph shall be 
                deposited as miscellaneous receipts in the Treasury of 
                the United States.''.
    (c) Clerical Amendments.--The table of contents in section 1 of 
such Act is amended by inserting after the 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. ''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS 
              UNDER THE INTERNAL REVENUE CODE OF 1986.

    (a) Failure To Elect, or Substantially Comply With, Health Coverage 
Participation Requirements.--For employment tax on employers who fail 
to elect, or substantially comply with, the health coverage 
participation requirements described in part 1, see section 3111(c) of 
the Internal Revenue Code of 1986 (as added by section 412 of this 
division).
    (b) Other Failures.--For excise tax on other failures of electing 
employers to comply with such requirements, see section 4980H of the 
Internal Revenue Code of 1986 (as added by section 411 of this 
division).

SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS 
              UNDER THE PUBLIC HEALTH SERVICE ACT.

    (a) In General.--Part C of title XXVII of the Public Health Service 
Act is amended by adding at the end the following new section:

``SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

    ``(a) Election of Employer To Be Subject to National Health 
Coverage Participation Requirements.--
            ``(1) In general.--An employer may make an election with 
        the Secretary to be subject to the health coverage 
        participation requirements.
            ``(2) Time and manner.--An election under paragraph (1) may 
        be made at such time and in such form and manner as the 
        Secretary may prescribe.
    ``(b) Treatment of Coverage Resulting From Election.--
            ``(1) In general.--If an employer makes an election to the 
        Secretary under subsection (a)--
                    ``(A) such election shall be treated as the 
                establishment and maintenance of a group health plan 
                for purposes of this title, subject to section 151 of 
                the America's Affordable Health Choices Act of 2009, 
                and
                    ``(B) the health coverage participation 
                requirements shall be deemed to be included as terms 
                and conditions of such plan.
            ``(2) Periodic investigations to determine compliance with 
        health coverage participation requirements.--The Secretary 
        shall regularly audit a representative sampling of employers 
        and conduct investigations and other activities with respect to 
        such sampling of employers so as to discover noncompliance with 
        the health coverage participation requirements in connection 
        with such employers (during any period with respect to which an 
        election under subsection (a) is in effect). The Secretary 
        shall communicate findings of noncompliance made by the 
        Secretary under this subsection to the Secretary of the 
        Treasury and the Health Choices Commissioner. The Secretary 
        shall take such timely enforcement action as appropriate to 
        achieve compliance.
    ``(c) Health Coverage Participation Requirements.--For purposes of 
this section, the term `health coverage participation requirements' 
means the requirements of part 1 of subtitle B of title III of 
subdivision A of the America's Affordable Health Choices Act of 2009 
(as in effect on the date of the enactment of this section).
    ``(d) Separate Elections.--Under regulations prescribed by the 
Secretary, separate elections may be made under subsection (a) with 
respect to full-time employees and employees who are not full-time 
employees.
    ``(e) Termination of Election in Cases of Substantial 
Noncompliance.--The Secretary may terminate the election of any 
employer under subsection (a) if the Secretary (in coordination with 
the Health Choices Commissioner) determines that such employer is in 
substantial noncompliance with the health coverage participation 
requirements and shall refer any such determination to the Secretary of 
the Treasury as appropriate.
    ``(f) Enforcement of Health Coverage Participation Requirements.--
            ``(1) Civil penalties.--In the case of any employer who 
        fails (during any period with respect to which the election 
        under subsection (a) is in effect) to satisfy the health 
        coverage participation requirements with respect to any 
        employee, the Secretary may assess a civil penalty against the 
        employer of $100 for each day in the period beginning on the 
        date such failure first occurs and ending on the date such 
        failure is corrected.
            ``(2) Limitations on amount of penalty.--
                    ``(A) Penalty not to apply where failure not 
                discovered exercising reasonable diligence.--No penalty 
                shall be assessed under paragraph (1) with respect to 
                any failure during any period for which it is 
                established to the satisfaction of the Secretary that 
                the employer did not know, or exercising reasonable 
                diligence would not have known, that such failure 
                existed.
                    ``(B) Penalty not to apply to failures corrected 
                within 30 days.--No penalty shall be assessed under 
                paragraph (1) with respect to any failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Overall limitation for unintentional 
                failures.--In the case of failures which are due to 
                reasonable cause and not to willful neglect, the 
                penalty assessed under paragraph (1) for failures 
                during any 1-year period shall not exceed the amount 
                equal to the lesser of--
                            ``(i) 10 percent of the aggregate amount 
                        paid or incurred by the employer (or 
                        predecessor employer) during the preceding 
                        taxable year for group health plans, or
                            ``(ii) $500,000.
            ``(3) Advance notification of failure prior to 
        assessment.--Before a reasonable time prior to the assessment 
        of any penalty under paragraph (1) with respect to any failure 
        by an employer, the Secretary shall inform the employer in 
        writing of such failure and shall provide the employer 
        information regarding efforts and procedures which may be 
        undertaken by the employer to correct such failure.
            ``(4) Actions to enforce assessments.--The Secretary may 
        bring a civil action in any District Court of the United States 
        to collect any civil penalty under this subsection.
            ``(5) Coordination with excise tax.--Under regulations 
        prescribed in accordance with section 324 of the America's 
        Affordable Health Choices Act of 2009, the Secretary and the 
        Secretary of the Treasury shall coordinate the assessment of 
        penalties under paragraph (1) in connection with failures to 
        satisfy health coverage participation requirements with the 
        imposition of excise taxes on such failures under section 
        4980H(b) of the Internal Revenue Code of 1986 so as to avoid 
        duplication of penalties with respect to such failures.
            ``(6) Deposit of penalty collected.--Any amount of penalty 
        collected under this subsection shall be deposited as 
        miscellaneous receipts in the Treasury of the United States.
    ``(g) Regulations.--The Secretary may promulgate such regulations 
as may be necessary or appropriate to carry out the provisions of this 
section, in accordance with section 324(a) of the America's Affordable 
Health Choices Act of 2009. The Secretary may promulgate any interim 
final rules as the Secretary determines are appropriate to carry out 
this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to periods beginning after December 31, 2012.

SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    (a) Assuring Coordination.--The officers consisting of the 
Secretary of Labor, the Secretary of the Treasury, the Secretary of 
Health and Human Services, and the Health Choices Commissioner shall 
ensure, through the execution of an interagency memorandum of 
understanding among such officers, that--
            (1) regulations, rulings, and interpretations issued by 
        such officers relating to the same matter over which two or 
        more of such officers have responsibility under subpart B of 
        part 6 of subtitle B of title I of the Employee Retirement 
        Income Security Act of 1974, section 4980H of the Internal 
        Revenue Code of 1986, and section 2793 of the Public Health 
        Service Act are administered so as to have the same effect at 
        all times; and
            (2) coordination of policies relating to enforcing the same 
        requirements through such officers in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.
    (b) Multiemployer Plans.--In the case of a group health plan that 
is a multiemployer plan (as defined in section 3(37) of the Employee 
Retirement Income Security Act of 1974), the regulations prescribed in 
accordance with subsection (a) by the officers referred to in 
subsection (a) shall provide for the application of the health coverage 
participation requirements to the plan sponsor and contributing 
sponsors of such plan.

         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.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

                 ``PART VIII--HEALTH CARE RELATED TAXES

    ``subpart a. tax on individuals without acceptable health care 
                               coverage.

``Subpart A--Tax on Individuals Without Acceptable Health Care Coverage

``Sec. ?59B.?Tax on individuals without acceptable health care 
                            coverage.

``SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

    ``(a) Tax Imposed.--In the case of any individual who does not meet 
the requirements of subsection (d) at any time during the taxable year, 
there is hereby imposed a tax equal to 2.5 percent of the excess of--
            ``(1) the taxpayer's modified adjusted gross income for the 
        taxable year, over
            ``(2) the amount of gross income specified in section 
        6012(a)(1) with respect to the taxpayer.
    ``(b) Limitations.--
            ``(1) Tax limited to average premium.--
                    ``(A) In general.--The tax imposed under subsection 
                (a) with respect to any taxpayer for any taxable year 
                shall not exceed the applicable national average 
                premium for such taxable year.
                    ``(B) Applicable national average premium.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the `applicable national 
                        average premium' means, with respect to any 
                        taxable year, the average premium (as 
                        determined by the Secretary, in coordination 
                        with the Health Choices Commissioner) for self-
                        only coverage under a basic plan which is 
                        offered in a Health Insurance Exchange for the 
                        calendar year in which such taxable year 
                        begins.
                            ``(ii) Failure to provide coverage for more 
                        than one individual.--In the case of any 
                        taxpayer who fails to meet the requirements of 
                        subsection (e) with respect to more than one 
                        individual during the taxable year, clause (i) 
                        shall be applied by substituting `family 
                        coverage' for `self-only coverage'.
            ``(2) Proration for part year failures.--The tax imposed 
        under subsection (a) with respect to any taxpayer for any 
        taxable year shall not exceed the amount which bears the same 
        ratio to the amount of tax so imposed (determined without 
        regard to this paragraph and after application of paragraph 
        (1)) as--
                    ``(A) the aggregate periods during such taxable 
                year for which such individual failed to meet the 
                requirements of subsection (d), bears to
                    ``(B) the entire taxable year.
    ``(c) Exceptions.--
            ``(1) Dependents.--Subsection (a) shall not apply to any 
        individual for any taxable year if a deduction is allowable 
        under section 151 with respect to such individual to another 
        taxpayer for any taxable year beginning in the same calendar 
        year as such taxable year.
            ``(2) Nonresident aliens.--Subsection (a) shall not apply 
        to any individual who is a nonresident alien.
            ``(3) Individuals residing outside united states.--Any 
        qualified individual (as defined in section 911(d)) (and any 
        qualifying child residing with such individual) shall be 
        treated for purposes of this section as covered by acceptable 
        coverage during the period described in subparagraph (A) or (B) 
        of section 911(d)(1), whichever is applicable.
            ``(4) Individuals residing in possessions of the united 
        states.--Any individual who is a bona fide resident of any 
        possession of the United States (as determined under section 
        937(a)) for any taxable year (and any qualifying child residing 
        with such individual) shall be treated for purposes of this 
        section as covered by acceptable coverage during such taxable 
        year.
            ``(5) Religious conscience exemption.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to any individual (and any qualifying child residing 
                with such individual) for any period if such individual 
                has in effect an exemption which certifies that such 
                individual is a member of a recognized religious sect 
                or division thereof described in section 1402(g)(1) and 
                an adherent of established tenets or teachings of such 
                sect or division as described in such section.
                    ``(B) Exemption.--An application for the exemption 
                described in subparagraph (A) shall be filed with the 
                Secretary at such time and in such form and manner as 
                the Secretary may prescribe. Any such exemption granted 
                by the Secretary shall be effective for such period as 
                the Secretary determines appropriate.
    ``(d) Acceptable Coverage Requirement.--
            ``(1) In general.--The requirements of this subsection are 
        met with respect to any individual for any period if such 
        individual (and each qualifying child of such individual) is 
        covered by acceptable coverage at all times during such period.
            ``(2) Acceptable coverage.--For purposes of this section, 
        the term `acceptable coverage' means any of the following:
                    ``(A) Qualified health benefits plan coverage.--
                Coverage under a qualified health benefits plan (as 
                defined in section 100(c) of the America's Affordable 
                Health Choices Act of 2009).
                    ``(B) Grandfathered health insurance coverage; 
                coverage under grandfathered employment-based health 
                plan.--Coverage under a grandfathered health insurance 
                coverage (as defined in subsection (a) of section 102 
                of the America's Affordable Health Choices Act of 2009) 
                or under a current employment-based health plan (within 
                the meaning of subsection (b) of such section).
                    ``(C) Medicare.--Coverage under part A of title 
                XVIII of the Social Security Act.
                    ``(D) Medicaid.--Coverage for medical assistance 
                under title XIX of the Social Security Act.
                    ``(E) Members of the armed forces and dependents 
                (including tricare).--Coverage under chapter 55 of 
                title 10, United States Code, including similar 
                coverage furnished under section 1781 of title 38 of 
                such Code.
                    ``(F) VA.--Coverage under the veteran's health care 
                program under chapter 17 of title 38, United States 
                Code, but only if the coverage for the individual 
                involved is determined by the Secretary in coordination 
                with the Health Choices Commissioner to be not less 
                than the level specified by the Secretary of the 
                Treasury, in coordination with the Secretary of 
                Veteran's Affairs and the Health Choices Commissioner, 
                based on the individual's priority for services as 
                provided under section 1705(a) of such title.
                    ``(G) Other coverage.--Such other health benefits 
                coverage as the Secretary, in coordination with the 
                Health Choices Commissioner, recognizes for purposes of 
                this subsection.
    ``(e) Other Definitions and Special Rules.--
            ``(1) Qualifying child.--For purposes of this section, the 
        term `qualifying child' has the meaning given such term by 
        section 152(c).
            ``(2) Basic plan.--For purposes of this section, the term 
        `basic plan' has the meaning given such term under section 
        100(c) of the America's Affordable Health Choices Act of 2009.
            ``(3) Health insurance exchange.--For purposes of this 
        section, the term `Health Insurance Exchange' has the meaning 
        given such term under section 100(c) of the America's 
        Affordable Health Choices Act of 2009, including any State-
        based health insurance exchange approved for operation under 
        section 208 of such Act.
            ``(4) Family coverage.--For purposes of this section, the 
        term `family coverage' means any coverage other than self-only 
        coverage.
            ``(5) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to section 911, and
                    ``(B) increased by the amount of interest received 
                or accrued by the taxpayer during the taxable year 
                which is exempt from tax.
            ``(6) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance 
(developed in coordination with the Health Choices Commissioner) which 
provide--
            ``(1) exemption from the tax imposed under subsection (a) 
        in cases of de minimis lapses of acceptable coverage, and
            ``(2) a process for applying for a waiver of the 
        application of subsection (a) in cases of hardship.''.
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code is amended by inserting after section 
        6050W the following new section:

``SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.

    ``(a) Requirement of Reporting.--Every person who provides 
acceptable coverage (as defined in section 59B(d)) to any individual 
during any calendar year shall, at such time as the Secretary may 
prescribe, make the return described in subsection (b) with respect to 
such individual.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of the primary 
                insured and the name of each other individual obtaining 
                coverage under the policy,
                    ``(B) the period for which each such individual was 
                provided with the coverage referred to in subsection 
                (a), and
                    ``(C) such other information as the Secretary may 
                require.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each primary insured whose name 
is required to be set forth in such return a written statement 
showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such individual.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(d) Coverage Provided by Governmental Units.--In the case of 
coverage provided by any governmental unit or any agency or 
instrumentality thereof, the officer or employee who enters into the 
agreement to provide such coverage (or the person appropriately 
designated for purposes of this section) shall make the returns and 
statements required by this section.''.
            (2) Penalty for failure to file.--
                    (A) Return.--Subparagraph (B) of section 6724(d)(1) 
                of such Code is amended by striking ``or'' at the end 
                of clause (xxii), by striking ``and'' at the end of 
                clause (xxiii) and inserting ``or'', and by adding at 
                the end the following new clause:
                            ``(xxiv) section 6050X (relating to returns 
                        relating to health insurance coverage), and''.
                    (B) Statement.--Paragraph (2) of section 6724(d) of 
                such Code is amended by striking ``or'' at the end of 
                subparagraph (EE), by striking the period at the end of 
                subparagraph (FF) and inserting ``, or'', and by 
                inserting after subparagraph (FF) the following new 
                subparagraph:
                    ``(GG) section 6050X (relating to returns relating 
                to health insurance coverage).''.
    (c) Return Requirement.--Subsection (a) of section 6012 of such 
Code is amended by inserting after paragraph (9) the following new 
paragraph:
            ``(10) Every individual to whom section 59B(a) applies and 
        who fails to meet the requirements of section 59B(d) with 
        respect to such individual or any qualifying child (as defined 
        in section 152(c)) of such individual.''.
    (d) Clerical Amendments.--
            (1) The table of parts for subchapter A of chapter 1 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new item:

               ``Part VIII. Health Care Related Taxes.''.

            (2) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 is amended by adding at the end the 
        following new item:

``Sec. ?6050X.?Returns relating to health insurance coverage.''.
    (e) Section 15 Not To Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (f) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2012.
            (2) Returns.--The amendments made by subsection (b) shall 
        apply to calendar years beginning after December 31, 2012.

                    PART 2--EMPLOYER RESPONSIBILITY

SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION 
              REQUIREMENTS.

    ``(a) Election of Employer Responsibility To Provide Health 
Coverage.--
            ``(1) In general.--Subsection (b) shall apply to any 
        employer with respect to whom an election under paragraph (2) 
        is in effect.
            ``(2) Time and manner.--An employer may make an election 
        under this paragraph at such time and in such form and manner 
        as the Secretary may prescribe.
            ``(3) Affiliated groups.--In the case of any employer which 
        is part of a group of employers who are treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414, 
        the election under paragraph (2) shall be made by such person 
        as the Secretary may provide. Any such election, once made, 
        shall apply to all members of such group.
            ``(4) Separate elections.--Under regulations prescribed by 
        the Secretary, separate elections may be made under paragraph 
        (2) with respect to--
                    ``(A) separate lines of business, and
                    ``(B) full-time employees and employees who are not 
                full-time employees.
            ``(5) Termination of election in cases of substantial 
        noncompliance.--The Secretary may terminate the election of any 
        employer under paragraph (2) if the Secretary (in coordination 
        with the Health Choices Commissioner) determines that such 
        employer is in substantial noncompliance with the health 
        coverage participation requirements.
    ``(b) Excise Tax With Respect to Failure To Meet Health Coverage 
Participation Requirements.--
            ``(1) In general.--In the case of any employer who fails 
        (during any period with respect to which the election under 
        subsection (a) is in effect) to satisfy the health coverage 
        participation requirements with respect to any employee to whom 
        such election applies, there is hereby imposed on each such 
        failure with respect to each such employee a tax of $100 for 
        each day in the period beginning on the date such failure first 
        occurs and ending on the date such failure is corrected.
            ``(2) Limitations on amount of tax.--
                    ``(A) Tax not to apply where failure not discovered 
                exercising reasonable diligence.--No tax shall be 
                imposed by paragraph (1) on any failure during any 
                period for which it is established to the satisfaction 
                of the Secretary that the employer neither knew, nor 
                exercising reasonable diligence would have known, that 
                such failure existed.
                    ``(B) Tax not to apply to failures corrected within 
                30 days.--No tax shall be imposed by paragraph (1) on 
                any failure if--
                            ``(i) such failure was due to reasonable 
                        cause and not to willful neglect, and
                            ``(ii) such failure is corrected during the 
                        30-day period beginning on the 1st date that 
                        the employer knew, or exercising reasonable 
                        diligence would have known, that such failure 
                        existed.
                    ``(C) Overall limitation for unintentional 
                failures.--In the case of failures which are due to 
                reasonable cause and not to willful neglect, the tax 
                imposed by subsection (a) for failures during the 
                taxable year of the employer shall not exceed the 
                amount equal to the lesser of--
                            ``(i) 10 percent of the aggregate amount 
                        paid or incurred by the employer (or 
                        predecessor employer) during the preceding 
                        taxable year for employment-based health plans, 
                        or
                            ``(ii) $500,000.
                    ``(D) Coordination with other enforcement 
                provisions.--The tax imposed under paragraph (1) with 
                respect to any failure shall be reduced (but not below 
                zero) by the amount of any civil penalty collected 
                under section 502(c)(11) of the Employee Retirement 
                Income Security Act of 1974 or section 2793(g) of the 
                Public Health Service Act with respect to such failure.
    ``(c) Health Coverage Participation Requirements.--For purposes of 
this section, the term `health coverage participation requirements' 
means the requirements of part I of subtitle B of title III of the 
America's Affordable Health Choices Act of 2009 (as in effect on the 
date of the enactment of this section).''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:

``Sec. ?4980H.?Election to satisfy health coverage participation 
                            requirements.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.

    (a) In General.--Section 3111 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (c) as subsection (d) and by 
inserting after subsection (b) the following new subsection:
    ``(c) Employers Electing to Not Provide Health Benefits.--
            ``(1) In general.--In addition to other taxes, there is 
        hereby imposed on every nonelecting employer an excise tax, 
        with respect to having individuals in his employ, equal to 8 
        percent of the wages (as defined in section 3121(a)) paid by 
        him with respect to employment (as defined in section 3121(b)).
            ``(2) Special rules for small employers.--
                    ``(A) In general.--In the case of any employer who 
                is small employer for any calendar year, paragraph (1) 
                shall be applied by substituting the applicable 
                percentage determined in accordance with the following 
                table for `8 percent':

``If the annual payroll of such          The applicable percentage is:
 employer for the preceding calendar
 year:
  Does not exceed $250,000.............  0 percent
  Exceeds $250,000, but does not exceed  2 percent
   $300,000.
  Exceeds $300,000, but does not exceed  4 percent
   $350,000.
  Exceeds $350,000, but does not exceed  6 percent
   $400,000.
 

                    ``(B) Small employer.--For purposes of this 
                paragraph, the term `small employer' means any employer 
                for any calendar year if the annual payroll of such 
                employer for the preceding calendar year does not 
                exceed $400,000.
                    ``(C) Annual payroll.--For purposes of this 
                paragraph, the term `annual payroll' means, with 
                respect to any employer for any calendar year, the 
                aggregate wages (as defined in section 3121(a)) paid by 
                him with respect to employment (as defined in section 
                3121(b)) during such calendar year.
            ``(3) Nonelecting employer.--For purposes of paragraph (1), 
        the term `nonelecting employer' means any employer for any 
        period with respect to which such employer does not have an 
        election under section 4980H(a) in effect.
            ``(4) Special rule for separate elections.--In the case of 
        an employer who makes a separate election described in section 
        4980H(a)(4) for any period, paragraph (1) shall be applied for 
        such period by taking into account only the wages paid to 
        employees who are not subject to such election.
            ``(5) Aggregation; predecessors.--For purposes of this 
        subsection--
                    ``(A) all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                shall be treated as 1 employer, and
                    ``(B) any reference to any person shall be treated 
                as including a reference to any predecessor of such 
                person.''.
    (b) Definitions.--Section 3121 of such Code is amended by adding at 
the end the following new subsection:
    ``(aa) Special Rules for Tax on Employers Electing Not To Provide 
Health Benefits.--For purposes of section 3111(c)--
            ``(1) Paragraphs (1), (5), and (19) of subsection (b) shall 
        not apply.
            ``(2) Paragraph (7) of subsection (b) shall apply by 
        treating all services as not covered by the retirement systems 
        referred to in subparagraphs (C) and (F) thereof.
            ``(3) Subsection (e) shall not apply and the term `State' 
        shall include the District of Columbia.''.
    (c) Conforming Amendment.--Subsection (d) of section 3111 of such 
Code, as redesignated by this section, is amended by striking ``this 
section'' and inserting ``subsections (a) and (b)''.
    (d) Application to Railroads.--
            (1) In general.--Section 3221 of such Code is amended by 
        redesignating subsection (c) as subsection (d) and by inserting 
        after subsection (b) the following new subsection:
    ``(c) Employers Electing to Not Provide Health Benefits.--
            ``(1) In general.--In addition to other taxes, there is 
        hereby imposed on every nonelecting employer an excise tax, 
        with respect to having individuals in his employ, equal to 8 
        percent of the compensation paid during any calendar year by 
        such employer for services rendered to such employer.
            ``(2) Exception for small employers.--Rules similar to the 
        rules of section 3111(c)(2) shall apply for purposes of this 
        subsection.
            ``(3) Nonelecting employer.--For purposes of paragraph (1), 
        the term `nonelecting employer' means any employer for any 
        period with respect to which such employer does not have an 
        election under section 4980H(a) in effect.
            ``(4) Special rule for separate elections.--In the case of 
        an employer who makes a separate election described in section 
        4980H(a)(4) for any period, subsection (a) shall be applied for 
        such period by taking into account only the wages paid to 
        employees who are not subject to such election.''.
            (2) Definitions.--Subsection (e) of section 3231 of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(13) Special rules for tax on employers electing not to 
        provide health benefits.--For purposes of section 3221(c)--
                    ``(A) Paragraph (1) shall be applied without regard 
                to the third sentence thereof.
                    ``(B) Paragraph (2) shall not apply.''.
            (3) Conforming amendment.--Subsection (d) of section 3221 
        of such Code, as redesignated by this section, is amended by 
        striking ``subsections (a) and (b), see section 3231(e)(2)'' 
        and inserting ``this section, see paragraphs (2) and (13)(B) of 
        section 3231(e)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to periods beginning after December 31, 2012.

Subtitle B--Credit for Small Business Employee Health Coverage Expenses

SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.

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

``SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of a 
qualified small employer, the small business employee health coverage 
credit determined under this section for the taxable year is an amount 
equal to the applicable percentage of the qualified employee health 
coverage expenses of such employer for such taxable year.
    ``(b) Applicable Percentage.--
            ``(1) In general.--For purposes of this section, the 
        applicable percentage is 50 percent.
            ``(2) Phaseout based on average compensation of 
        employees.--In the case of an employer whose average annual 
        employee compensation for the taxable year exceeds $20,000, the 
        percentage specified in paragraph (1) shall be reduced by a 
        number of percentage points which bears the same ratio to 50 as 
        such excess bears to $20,000.
    ``(c) Limitations.--
            ``(1) Phaseout based on employer size.--In the case of an 
        employer who employs more than 10 qualified employees during 
        the taxable year, the credit determined under subsection (a) 
        shall be reduced by an amount which bears the same ratio to the 
        amount of such credit (determined without regard to this 
        paragraph and after the application of the other provisions of 
        this section) as--
                    ``(A) the excess of--
                            ``(i) the number of qualified employees 
                        employed by the employer during the taxable 
                        year, over
                            ``(ii) 10, bears to
                    ``(B) 15.
            ``(2) Credit not allowed with respect to certain highly 
        compensated employees.--No credit shall be allowed under 
        subsection (a) with respect to qualified employee health 
        coverage expenses paid or incurred with respect to any employee 
        for any taxable year if the aggregate compensation paid by the 
        employer to such employee during such taxable year exceeds 
        $80,000.
    ``(d) Qualified Employee Health Coverage Expenses.--For purposes of 
this section--
            ``(1) In general.--The term `qualified employee health 
        coverage expenses' means, with respect to any employer for any 
        taxable year, the aggregate amount paid or incurred by such 
        employer during such taxable year for coverage of any qualified 
        employee of the employer (including any family coverage which 
        covers such employee) under qualified health coverage.
            ``(2) Qualified health coverage.--The term `qualified 
        health coverage' means acceptable coverage (as defined in 
        section 59B(d)) which--
                    ``(A) is provided pursuant to an election under 
                section 4980H(a), and
                    ``(B) satisfies the requirements referred to in 
                section 4980H(c).
    ``(e) Other Definitions.--For purposes of this section--
            ``(1) Qualified small employer.--For purposes of this 
        section, the term `qualified small employer' means any employer 
        for any taxable year if--
                    ``(A) the number of qualified employees employed by 
                such employer during the taxable year does not exceed 
                25, and
                    ``(B) the average annual employee compensation of 
                such employer for such taxable year does not exceed the 
                sum of the dollar amounts in effect under subsection 
                (b)(2).
            ``(2) Qualified employee.--The term `qualified employee' 
        means any employee of an employer for any taxable year of the 
        employer if such employee received at least $5,000 of 
        compensation from such employer during such taxable year.
            ``(3) Average annual employee compensation.--The term 
        `average annual employee compensation' means, with respect to 
        any employer for any taxable year, the average amount of 
        compensation paid by such employer to qualified employees of 
        such employer during such taxable year.
            ``(4) Compensation.--The term `compensation' has the 
        meaning given such term in section 408(p)(6)(A).
            ``(5) Family coverage.--The term `family coverage' means 
        any coverage other than self-only coverage.
    ``(f) Special Rules.--For purposes of this section--
            ``(1) Special rule for partnerships and self-employed.--In 
        the case of a partnership (or a trade or business carried on by 
        an individual) which has one or more qualified employees 
        (determined without regard to this paragraph) with respect to 
        whom the election under 4980H(a) applies, each partner (or, in 
        the case of a trade or business carried on by an individual, 
        such individual) shall be treated as an employee.
            ``(2) Aggregation rule.--All persons treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        shall be treated as 1 employer.
            ``(3) Denial of double benefit.--Any deduction otherwise 
        allowable with respect to amounts paid or incurred for health 
        insurance coverage to which subsection (a) applies shall be 
        reduced by the amount of the credit determined under this 
        section.
            ``(4) Inflation adjustment.--In the case of any taxable 
        year beginning after 2013, each of the dollar amounts in 
        subsections (b)(2), (c)(2), and (e)(2) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost of living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins determined by substituting 
                `calendar year 2012' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any increase determined under this paragraph is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code (relating to general business credit) is 
amended by striking ``plus'' at the end of paragraph (34), by striking 
the period at the end of paragraph (35) and inserting ``, plus'', and 
by adding at the end the following new paragraph:
            ``(36) in the case of a qualified small employer (as 
        defined in section 45R(e)), the small business employee health 
        coverage credit determined under section 45R(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45Q the following new 
item:

``Sec. ?45R.?Small business employee health coverage credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

    Subtitle C--Disclosures To Carry Out Health Insurance Exchange 
                               Subsidies

SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

    (a) In General.--Subsection (l) of section 6103 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(21) Disclosure of return information to carry out health 
        insurance exchange subsidies.--
                    ``(A) In general.--The Secretary, upon written 
                request from the Health Choices Commissioner or the 
                head of a State-based health insurance exchange 
                approved for operation under section 208 of the 
                America's Affordable Health Choices Act of 2009, shall 
                disclose to officers and employees of the Health 
                Choices Administration or such State-based health 
                insurance exchange, as the case may be, return 
                information of any taxpayer whose income is relevant in 
                determining any affordability credit described in 
                subtitle C of title II of the America's Affordable 
                Health Choices Act of 2009. Such return information 
                shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the modified adjusted gross income 
                        of such taxpayer (as defined in section 
                        59B(e)(5)),
                            ``(iv) the number of dependents of the 
                        taxpayer,
                            ``(v) such other information as is 
                        prescribed by the Secretary by regulation as 
                        might indicate whether the taxpayer is eligible 
                        for such affordability credits (and the amount 
                        thereof), and
                            ``(vi) the taxable year with respect to 
                        which the preceding information relates or, if 
                        applicable, the fact that such information is 
                        not available.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Health Choices Administration or such State-
                based health insurance exchange, as the case may be, 
                only for the purposes of, and to the extent necessary 
                in, establishing and verifying the appropriate amount 
                of any affordability credit described in subtitle C of 
                title II of the America's Affordable Health Choices Act 
                of 2009 and providing for the repayment of any such 
                credit which was in excess of such appropriate 
                amount.''.
    (b) Procedures and Recordkeeping Related to Disclosures.--Paragraph 
(4) of section 6103(p) of such Code is amended--
            (1) by inserting ``, or any entity described in subsection 
        (l)(21),'' after ``or (20)'' in the matter preceding 
        subparagraph (A),
            (2) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
            (3) by inserting ``or any entity described in subsection 
        (l)(21),'' after ``or (20)'' both places it appears in the 
        matter after subparagraph (F).
    (c) Unauthorized Disclosure or Inspection.--Paragraph (2) of 
section 7213(a) of such Code is amended by striking ``or (20)'' and 
inserting ``(20), or (21)''.

                  Subtitle D--Other Revenue Provisions

                       PART 1--GENERAL PROVISIONS

SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    (a) In General.--Part VIII of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986, as added by this title, is amended by 
adding at the end the following new subpart:

           ``Subpart B--Surcharge on High Income Individuals

``Sec. ?59C.?Surcharge on high income individuals.

``SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

    ``(a) General Rule.--In the case of a taxpayer other than a 
corporation, there is hereby imposed (in addition to any other tax 
imposed by this subtitle) a tax equal to--
            ``(1) 1 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $350,000 but does not exceed 
        $500,000,
            ``(2) 1.5 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $500,000 but does not exceed 
        $1,000,000, and
            ``(3) 5.4 percent of so much of the modified adjusted gross 
        income of the taxpayer as exceeds $1,000,000.
    ``(b) Taxpayers Not Making a Joint Return.--In the case of any 
taxpayer other than a taxpayer making a joint return under section 6013 
or a surviving spouse (as defined in section 2(a)), subsection (a) 
shall be applied by substituting for each of the dollar amounts therein 
(after any increase determined under subsection (e)) a dollar amount 
equal to--
            ``(1) 50 percent of the dollar amount so in effect in the 
        case of a married individual filing a separate return, and
            ``(2) 80 percent of the dollar amount so in effect in any 
        other case.
    ``(c) Adjustments Based on Federal Health Reform Savings.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        the case of any taxable year beginning after December 31, 2012, 
        subsection (a) shall be applied--
                    ``(A) by substituting `2 percent' for `1 percent', 
                and
                    ``(B) by substituting `3 percent' for `1.5 
                percent'.
            ``(2) Adjustments based on excess federal health reform 
        savings.--
                    ``(A) Exception if federal health reform savings 
                significantly exceeds base amount.--If the excess 
                Federal health reform savings is more than 
                $150,000,000,000 but not more than $175,000,000,000, 
                paragraph (1) shall not apply.
                    ``(B) Further adjustment for additional federal 
                health reform savings.--If the excess Federal health 
                reform savings is more than $175,000,000,000, 
                paragraphs (1) and (2) of subsection (a) (and paragraph 
                (1) of this subsection) shall not apply to any taxable 
                year beginning after December 31, 2012.
                    ``(C) Excess federal health reform savings.--For 
                purposes of this subsection, the term `excess Federal 
                health reform savings' means the excess of--
                            ``(i) the Federal health reform savings, 
                        over
                            ``(ii) $525,000,000,000.
                    ``(D) Federal health reform savings.--The term 
                `Federal health reform savings' means the sum of the 
                amounts described in subparagraphs (A) and (B) of 
                paragraph (3).
            ``(3) Determination of federal health reform savings.--Not 
        later than December 1, 2012, the Director of the Office of 
        Management and Budget shall--
                    ``(A) determine, on the basis of the study 
                conducted under paragraph (4), the aggregate reductions 
                in Federal expenditures which have been achieved as a 
                result of the provisions of, and amendments made by, 
                subdivision B of the America's Affordable Health 
                Choices Act of 2009 during the period beginning on 
                October 1, 2009, and ending with the latest date with 
                respect to which the Director has sufficient data to 
                make such determination, and
                    ``(B) estimate, on the basis of such study and the 
                determination under subparagraph (A), the aggregate 
                reductions in Federal expenditures which will be 
                achieved as a result of such provisions and amendments 
                during so much of the period beginning with fiscal year 
                2010 and ending with fiscal year 2019 as is not taken 
                into account under subparagraph (A).
            ``(4) Study of federal health reform savings.--The Director 
        of the Office of Management and Budget shall conduct a study of 
        the reductions in Federal expenditures during fiscal years 2010 
        through 2019 which are attributable to the provisions of, and 
        amendments made by, subdivision B of the America's Affordable 
        Health Choices Act of 2009. The Director shall complete such 
        study not later than December 1, 2012.
            ``(5) Reductions in federal expenditures determined without 
        regard to program investments.--For purposes of paragraphs (3) 
        and (4), reductions in Federal expenditures shall be determined 
        without regard to section 1121 of the America's Affordable 
        Health Choices Act of 2009 and other program investments under 
        subdivision B thereof.
    ``(d) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income reduced by any deduction allowed for investment interest (as 
defined in section 163(d)). In the case of an estate or trust, adjusted 
gross income shall be determined as provided in section 67(e).
    ``(e) Inflation Adjustments.--
            ``(1) In general.--In the case of taxable years beginning 
        after 2011, the dollar amounts in subsection (a) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                2010' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $5,000, such amount shall be rounded 
        to the next lowest multiple of $5,000.
    ``(f) Special Rules.--
            ``(1) Nonresident alien.--In the case of a nonresident 
        alien individual, only amounts taken into account in connection 
        with the tax imposed under section 871(b) shall be taken into 
        account under this section.
            ``(2) Citizens and residents living abroad.--The dollar 
        amounts in effect under subsection (a) (after the application 
        of subsections (b) and (e)) shall be decreased by the excess 
        of--
                    ``(A) the amounts excluded from the taxpayer's 
                gross income under section 911, over
                    ``(B) the amounts of any deductions or exclusions 
                disallowed under section 911(d)(6) with respect to the 
                amounts described in subparagraph (A).
            ``(3) Charitable trusts.--Subsection (a) shall not apply to 
        a trust all the unexpired interests in which are devoted to one 
        or more of the purposes described in section 170(c)(2)(B).
            ``(4) Not treated as tax imposed by this chapter for 
        certain purposes.--The tax imposed under this section shall not 
        be treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit under this chapter or for 
        purposes of section 55.''.
    (b) Clerical Amendment.--The table of subparts for part VIII of 
subchapter A of chapter 1 of such Code, as added by this title, is 
amended by inserting after the item relating to subpart A the following 
new item:

         ``subpart b. surcharge on high income individuals.''.

    (c) Section 15 Not To Apply.--The amendment made by subsection (a) 
shall not be treated as a change in a rate of tax for purposes of 
section 15 of the Internal Revenue Code of 1986.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2010.

SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) of the 
Internal Revenue Code of 1986 are each amended by striking ``December 
31, 2010'' and inserting ``December 31, 2019''.
    (b) Transition.--Subsection (f) of section 864 of such Code is 
amended by striking paragraph (7).

                  PART 2--PREVENTION OF TAX AVOIDANCE

SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE 
              PAYMENTS.

    (a) In General.--Section 894 of the Internal Revenue Code of 1986 
(relating to income affected by treaty) is amended by adding at the end 
the following new subsection:
    ``(d) Limitation on Treaty Benefits for Certain Deductible 
Payments.--
            ``(1) In general.--In the case of any deductible related-
        party payment, any withholding tax imposed under chapter 3 (and 
        any tax imposed under subpart A or B of this part) with respect 
        to such payment may not be reduced under any treaty of the 
        United States unless any such withholding tax would be reduced 
        under a treaty of the United States if such payment were made 
        directly to the foreign parent corporation.
            ``(2) Deductible related-party payment.--For purposes of 
        this subsection, the term `deductible related-party payment' 
        means any payment made, directly or indirectly, by any person 
        to any other person if the payment is allowable as a deduction 
        under this chapter and both persons are members of the same 
        foreign controlled group of entities.
            ``(3) Foreign controlled group of entities.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `foreign controlled 
                group of entities' means a controlled group of entities 
                the common parent of which is a foreign corporation.
                    ``(B) Controlled group of entities.--The term 
                `controlled group of entities' means a controlled group 
                of corporations as defined in section 1563(a)(1), 
                except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears therein, and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and (b)(2) 
                        of section 1563.
                A partnership or any other entity (other than a 
                corporation) shall be treated as a member of a 
                controlled group of entities if such entity is 
                controlled (within the meaning of section 954(d)(3)) by 
                members of such group (including any entity treated as 
                a member of such group by reason of this sentence).
            ``(4) Foreign parent corporation.--For purposes of this 
        subsection, the term `foreign parent corporation' means, with 
        respect to any deductible related-party payment, the common 
        parent of the foreign controlled group of entities referred to 
        in paragraph (3)(A).
            ``(5) Regulations.--The Secretary may prescribe such 
        regulations or other guidance as are necessary or appropriate 
        to carry out the purposes of this subsection, including 
        regulations or other guidance which provide for--
                    ``(A) the treatment of two or more persons as 
                members of a foreign controlled group of entities if 
                such persons would be the common parent of such group 
                if treated as one corporation, and
                    ``(B) the treatment of any member of a foreign 
                controlled group of entities as the common parent of 
                such group if such treatment is appropriate taking into 
                account the economic relationships among such 
                entities.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to payments made after the date of the enactment of this Act.

SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

    (a) In General.--Section 7701 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (o) as subsection (p) and by 
inserting after subsection (n) the following new subsection:
    ``(o) Clarification of Economic Substance Doctrine.--
            ``(1) Application of doctrine.--In the case of any 
        transaction to which the economic substance doctrine is 
        relevant, such transaction shall be treated as having economic 
        substance only if--
                    ``(A) the transaction changes in a meaningful way 
                (apart from Federal income tax effects) the taxpayer's 
                economic position, and
                    ``(B) the taxpayer has a substantial purpose (apart 
                from Federal income tax effects) for entering into such 
                transaction.
            ``(2) Special rule where taxpayer relies on profit 
        potential.--
                    ``(A) In general.--The potential for profit of a 
                transaction shall be taken into account in determining 
                whether the requirements of subparagraphs (A) and (B) 
                of paragraph (1) are met with respect to the 
                transaction only if the present value of the reasonably 
                expected pre-tax profit from the transaction is 
                substantial in relation to the present value of the 
                expected net tax benefits that would be allowed if the 
                transaction were respected.
                    ``(B) Treatment of fees and foreign taxes.--Fees 
                and other transaction expenses and foreign taxes shall 
                be taken into account as expenses in determining pre-
                tax profit under subparagraph (A).
            ``(3) State and local tax benefits.--For purposes of 
        paragraph (1), any State or local income tax effect which is 
        related to a Federal income tax effect shall be treated in the 
        same manner as a Federal income tax effect.
            ``(4) Financial accounting benefits.--For purposes of 
        paragraph (1)(B), achieving a financial accounting benefit 
        shall not be taken into account as a purpose for entering into 
        a transaction if the origin of such financial accounting 
        benefit is a reduction of Federal income tax.
            ``(5) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Economic substance doctrine.--The term 
                `economic substance doctrine' means the common law 
                doctrine under which tax benefits under subtitle A with 
                respect to a transaction are not allowable if the 
                transaction does not have economic substance or lacks a 
                business purpose.
                    ``(B) Exception for personal transactions of 
                individuals.--In the case of an individual, paragraph 
                (1) shall apply only to transactions entered into in 
                connection with a trade or business or an activity 
                engaged in for the production of income.
                    ``(C) Other common law doctrines not affected.--
                Except as specifically provided in this subsection, the 
                provisions of this subsection shall not be construed as 
                altering or supplanting any other rule of law, and the 
                requirements of this subsection shall be construed as 
                being in addition to any such other rule of law.
                    ``(D) Determination of application of doctrine not 
                affected.--The determination of whether the economic 
                substance doctrine is relevant to a transaction (or 
                series of transactions) shall be made in the same 
                manner as if this subsection had never been enacted.
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after the date of the enactment of 
this Act.

SEC. 453. PENALTIES FOR UNDERPAYMENTS.

    (a) Penalty for Underpayments Attributable to Transactions Lacking 
Economic Substance.--
            (1) In general.--Subsection (b) of section 6662 of the 
        Internal Revenue Code of 1986 is amended by inserting after 
        paragraph (5) the following new paragraph:
            ``(6) Any disallowance of claimed tax benefits by reason of 
        a transaction lacking economic substance (within the meaning of 
        section 7701(o)) or failing to meet the requirements of any 
        similar rule of law.''.
            (2) Increased penalty for nondisclosed transactions.--
        Section 6662 of such Code is amended by adding at the end the 
        following new subsection:
    ``(i) Increase in Penalty in Case of Nondisclosed Noneconomic 
Substance Transactions.--
            ``(1) In general.--In the case of any portion of an 
        underpayment which is attributable to one or more nondisclosed 
        noneconomic substance transactions, subsection (a) shall be 
        applied with respect to such portion by substituting `40 
        percent' for `20 percent'.
            ``(2) Nondisclosed noneconomic substance transactions.--For 
        purposes of this subsection, the term `nondisclosed noneconomic 
        substance transaction' means any portion of a transaction 
        described in subsection (b)(6) with respect to which the 
        relevant facts affecting the tax treatment are not adequately 
        disclosed in the return nor in a statement attached to the 
        return.
            ``(3) Special rule for amended returns.--Except as provided 
        in regulations, in no event shall any amendment or supplement 
        to a return of tax be taken into account for purposes of this 
        subsection if the amendment or supplement is filed after the 
        earlier of the date the taxpayer is first contacted by the 
        Secretary regarding the examination of the return or such other 
        date as is specified by the Secretary.''.
            (3) Conforming amendment.--Subparagraph (B) of section 
        6662A(e)(2) of such Code is amended--
                    (A) by striking ``section 6662(h)'' and inserting 
                ``subsections (h) or (i) of section 6662'', and
                    (B) by striking ``gross valuation misstatement 
                penalty'' in the heading and inserting ``certain 
                increased underpayment penalties''.
    (b) Reasonable Cause Exception Not Applicable to Noneconomic 
Substance Transactions, Tax Shelters, and Certain Large or Publicly 
Traded Persons.--Subsection (c) of section 6664 of such Code is 
amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively,
            (2) by striking ``paragraph (2)'' in paragraph (4), as so 
        redesignated, and inserting ``paragraph (3)'', and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Exception.--Paragraph (1) shall not apply to--
                    ``(A) to any portion of an underpayment which is 
                attributable to one or more tax shelters (as defined in 
                section 6662(d)(2)(C)) or transactions described in 
                section 6662(b)(6), and
                    ``(B) to any taxpayer if such taxpayer is a 
                specified person (as defined in section 
                6662(d)(2)(D)(ii)).''.
    (c) Application of Penalty for Erroneous Claim for Refund or Credit 
to Noneconomic Substance Transactions.--Section 6676 of such Code is 
amended by redesignating subsection (c) as subsection (d) and inserting 
after subsection (b) the following new subsection:
    ``(c) Noneconomic Substance Transactions Treated as Lacking 
Reasonable Basis.--For purposes of this section, any excessive amount 
which is attributable to any transaction described in section 
6662(b)(6) shall not be treated as having a reasonable basis.''.
    (d) Special Understatement Reduction Rule for Certain Large or 
Publicly Traded Persons.--
            (1) In general.--Paragraph (2) of section 6662(d) of such 
        Code is amended by adding at the end the following new 
        subparagraph:
                    ``(D) Special reduction rule for certain large or 
                publicly traded persons.--
                            ``(i) In general.--In the case of any 
                        specified person--
                                    ``(I) subparagraph (B) shall not 
                                apply, and
                                    ``(II) the amount of the 
                                understatement under subparagraph (A) 
                                shall be reduced by that portion of the 
                                understatement which is attributable to 
                                any item with respect to which the 
                                taxpayer has a reasonable belief that 
                                the tax treatment of such item by the 
                                taxpayer is more likely than not the 
                                proper tax treatment of such item.
                            ``(ii) Specified person.--For purposes of 
                        this subparagraph, the term `specified person' 
                        means--
                                    ``(I) any person required to file 
                                periodic or other reports under section 
                                13 of the Securities Exchange Act of 
                                1934, and
                                    ``(II) any corporation with gross 
                                receipts in excess of $100,000,000 for 
                                the taxable year involved.
                        All persons treated as a single employer under 
                        section 52(a) shall be treated as one person 
                        for purposes of subclause (II).''.
            (2) Conforming amendment.--Subparagraph (C) of section 
        6662(d)(2) of such Code is amended by striking ``Subparagraph 
        (B)'' and inserting ``Subparagraphs (B) and (D)(i)(II)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after the date of the enactment of 
this Act.

           SUBDIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS

SEC. 1001. TABLE OF CONTENTS OF SUBDIVISION.

    The table of contents for this subdivision is as follows:

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.
        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

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.
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.
   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.
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 133\1/3\ 
                            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.
              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.

                  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.

    (a) In General.--Section 1888(e)(4)(E)(ii) of the Social Security 
Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) by redesignating subclause (IV) as subclause (VI); and
            (3) by inserting after subclause (III) the following new 
        subclauses:
                                    ``(IV) for each of fiscal years 
                                2004 through 2009, the rate computed 
                                for the previous fiscal year increased 
                                by the skilled nursing facility market 
                                basket percentage change for the fiscal 
                                year involved;
                                    ``(V) for fiscal year 2010, the 
                                rate computed for the previous fiscal 
                                year; and''.
    (b) Delayed Effective Date.--Section 1888(e)(4)(E)(ii)(V) of the 
Social Security Act, as inserted by subsection (a)(3), shall not apply 
to payment for days before January 1, 2010.

SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.

    (a) In General.--Section 1886(j)(3)(C) of the Social Security Act 
(42 U.S.C. 1395ww(j)(3)(C)) is amended by striking ``and 2009'' and 
inserting ``through 2010''.
    (b) Delayed Effective Date.--The amendment made by subsection (a) 
shall not apply to payment units occurring before January 1, 2010.

SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATES THAT DO NOT ALREADY INCORPORATE SUCH 
              IMPROVEMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
            (1) in clause (iii)--
                    (A) by striking ``(iii) For purposes of this 
                subparagraph,'' and inserting ``(iii)(I) For purposes 
                of this subparagraph, subject to the productivity 
                adjustment described in subclause (II),''; and
                    (B) by adding at the end the following new 
                subclause:
    ``(II) The productivity adjustment described in this subclause, 
with respect to an increase or change for a fiscal year or year or cost 
reporting period, or other annual period, is a productivity offset 
equal to the percentage change in the 10-year moving average of annual 
economy-wide private nonfarm business multi-factor productivity (as 
recently published before the promulgation of such increase for the 
year or period involved). Except as otherwise provided, any reference 
to the increase described in this clause shall be a reference to the 
percentage increase described in subclause (I) minus the percentage 
change under this subclause.'';
            (2) in the first sentence of clause (viii)(I), by inserting 
        ``(but not below zero)'' after ``shall be reduced''; and
            (3) in the first sentence of clause (ix)(I)--
                    (A) by inserting ``(determined without regard to 
                clause (iii)(II)'' after ``clause (i)'' the second time 
                it appears; and
                    (B) by inserting ``(but not below zero)'' after 
                ``reduced''.
    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of such Act 
(42 U.S.C. 1395yy(e)(5)(B)) is amended by inserting ``subject to the 
productivity adjustment described in section 1886(b)(3)(B)(iii)(II)'' 
after ``as calculated by the Secretary''.
    (c) Long-Term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraph:
            ``(3) Productivity adjustment.--In implementing the system 
        described in paragraph (1) for discharges occurring during the 
        rate year ending in 2010 or any subsequent rate year for a 
        hospital, to the extent that an annual percentage increase 
        factor applies to a base rate for such discharges for the 
        hospital, such factor shall be subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II).''.
    (d) Inpatient Rehabilitation Facilities.--The second sentence of 
section 1886(j)(3)(C) of the Social Security Act (42 U.S.C. 
1395ww(j)(3)(C)) is amended by inserting ``(subject to the productivity 
adjustment described in section 1886(b)(3)(B)(iii)(II))'' after 
``appropriate percentage increase''.
    (e) Psychiatric Hospitals.--Section 1886 of the Social Security Act 
(42 U.S.C. 1395ww) is amended by adding at the end the following new 
subsection:
    ``(o) Prospective Payment for Psychiatric Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by 
        psychiatric hospitals (as described in clause (i) of subsection 
        (d)(1)(B)) and psychiatric units (as described in the matter 
        following clause (v) of such subsection), see section 124 of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 1999.
            ``(2) Productivity adjustment.--In implementing the system 
        described in paragraph (1) for discharges occurring during the 
        rate year ending in 2011 or any subsequent rate year for a 
        psychiatric hospital or unit described in such paragraph, to 
        the extent that an annual percentage increase factor applies to 
        a base rate for such discharges for the hospital or unit, 
        respectively, such factor shall be subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II).''.
    (f) Hospice Care.--Subclause (VII) of section 1814(i)(1)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395f(i)(1)(C)(ii)) is amended by 
inserting after ``the market basket percentage increase'' the 
following: ``(which is subject to the productivity adjustment described 
in section 1886(b)(3)(B)(iii)(II))''.
    (g) Effective Date.--The amendments made by subsections (a), (b), 
(d), and (f) shall apply to annual increases effected for fiscal years 
beginning with fiscal year 2010.

                PART 2--OTHER MEDICARE PART A PROVISIONS

SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.

    (a) Change in Recalibration Factor.--
            (1) Analysis.--The Secretary of Health and Human Services 
        shall conduct, using calendar year 2006 claims data, an initial 
        analysis comparing total payments under title XVIII of the 
        Social Security Act for skilled nursing facility services under 
        the RUG-53 and under the RUG-44 classification systems.
            (2) Adjustment in recalibration factor.--Based on the 
        initial analysis under paragraph (1), the Secretary shall 
        adjust the case mix indexes under section 1888(e)(4)(G)(i) of 
        the Social Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for 
        fiscal year 2010 by the appropriate recalibration factor as 
        proposed in the proposed rule for Medicare skilled nursing 
        facilities issued by such Secretary on May 12, 2009 (74 Federal 
        Register 22214 et seq.).
    (b) Change in Payment for Nontherapy Ancillary (NTA) Services and 
Therapy Services.--
            (1) Changes under current snf classification system.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary of Health and Human Services shall, under the 
                system for payment of skilled nursing facility services 
                under section 1888(e) of the Social Security Act (42 
                U.S.C. 1395yy(e)), increase payment by 10 percent for 
                non-therapy ancillary services (as specified by the 
                Secretary in the notice issued on November 27, 1998 (63 
                Federal Register 65561 et seq.)) and shall decrease 
                payment for the therapy case mix component of such 
                rates by 5.5 percent.
                    (B) Effective date.--The changes in payment 
                described in subparagraph (A) shall apply for days on 
                or after January 1, 2010, and until the Secretary 
                implements an alternative case mix classification 
                system for payment of skilled nursing facility services 
                under section 1888(e) of the Social Security Act (42 
                U.S.C. 1395yy(e)).
                    (C) Implementation.--Notwithstanding any other 
                provision of law, the Secretary may implement by 
                program instruction or otherwise the provisions of this 
                paragraph.
            (2) Changes under a future snf case mix classification 
        system.--
                    (A) Analysis.--
                            (i) In general.--The Secretary of Health 
                        and Human Services shall analyze payments for 
                        non-therapy ancillary services under a future 
                        skilled nursing facility classification system 
                        to ensure the accuracy of payment for non-
                        therapy ancillary services. Such analysis shall 
                        consider use of appropriate indicators which 
                        may include age, physical and mental status, 
                        ability to perform activities of daily living, 
                        prior nursing home stay, broad RUG category, 
                        and a proxy for length of stay.
                            (ii) Application.--Such analysis shall be 
                        conducted in a manner such that the future 
                        skilled nursing facility classification system 
                        is implemented to apply to services furnished 
                        during a fiscal year beginning with fiscal year 
                        2011.
                    (B) Consultation.--In conducting the analysis under 
                subparagraph (A), the Secretary shall consult with 
                interested parties, including the Medicare Payment 
                Advisory Commission and other interested stakeholders, 
                to identify appropriate predictors of nontherapy 
                ancillary costs.
                    (C) Rulemaking.--The Secretary shall include the 
                result of the analysis under subparagraph (A) in the 
                fiscal year 2011 rulemaking cycle for purposes of 
                implementation beginning for such fiscal year.
                    (D) Implementation.--Subject to subparagraph (E) 
                and consistent with subparagraph (A)(ii), the Secretary 
                shall implement changes to payments for non-therapy 
                ancillary services (which may include a separate rate 
                component for non-therapy ancillary services and may 
                include use of a model that predicts payment amounts 
                applicable for non-therapy ancillary services) under 
                such future skilled nursing facility services 
                classification system as the Secretary determines 
                appropriate based on the analysis conducted pursuant to 
                subparagraph (A).
                    (E) Budget neutrality.--The Secretary shall 
                implement changes described in subparagraph (D) in a 
                manner such that the estimated expenditures under such 
                future skilled nursing facility services classification 
                system for a fiscal year beginning with fiscal year 
                2011 with such changes would be equal to the estimated 
                expenditures that would otherwise occur under title 
                XVIII of the Social Security Act under such future 
                skilled nursing facility services classification system 
                for such year without such changes.
    (c) Outlier Policy for NTA and Therapy.--Section 1888(e) of the 
Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at the 
end the following new paragraph:
            ``(13) Outliers for nta and therapy.--
                    ``(A) In general.--With respect to outliers because 
                of unusual variations in the type or amount of 
                medically necessary care, beginning with October 1, 
                2010, the Secretary--
                            ``(i) shall provide for an addition or 
                        adjustment to the payment amount otherwise made 
                        under this section with respect to non-therapy 
                        ancillary services in the case of such 
                        outliers; and
                            ``(ii) may provide for such an addition or 
                        adjustment to the payment amount otherwise made 
                        under this section with respect to therapy 
                        services in the case of such outliers.
                    ``(B) Outliers based on aggregate costs.--Outlier 
                adjustments or additional payments described in 
                subparagraph (A) shall be based on aggregate costs 
                during a stay in a skilled nursing facility and not on 
                the number of days in such stay.
                    ``(C) Budget neutrality.--The Secretary shall 
                reduce estimated payments that would otherwise be made 
                under the prospective payment system under this 
                subsection with respect to a fiscal year by 2 percent. 
                The total amount of the additional payments or payment 
                adjustments for outliers made under this paragraph with 
                respect to a fiscal year may not exceed 2 percent of 
                the total payments projected or estimated to be made 
                based on the prospective payment system under this 
                subsection for the fiscal year.''.
    (d) Conforming Amendments.--Section 1888(e)(8) of such Act (42 
U.S.C. 1395yy(e)(8)) is amended--
            (1) in subparagraph (A), by inserting ``and adjustment 
        under section 1111(b) of the America's Affordable Health 
        Choices Act of 2009;
            (2) in subparagraph (B), by striking ``and'';
            (3) in subparagraph (C), by striking the period and 
        inserting ``; and''; and
            (4) by adding at the end the following new subparagraph:
                    ``(D) the establishment of outliers under paragraph 
                (13).''.

SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUSTMENTS IN RESPONSE TO 
              COVERAGE EXPANSION.

    (a) DSH Report.--
            (1) In general.--Not later than January 1, 2016, the 
        Secretary of Health and Human Services shall submit to Congress 
        a report on Medicare DSH taking into account the impact of the 
        health care reforms carried out under subdivision A in reducing 
        the number of uninsured individuals. The report shall include 
        recommendations relating to the following:
                    (A) The appropriate amount, targeting, and 
                distribution of Medicare DSH to compensate for higher 
                Medicare costs associated with serving low-income 
                beneficiaries (taking into account variations in the 
                empirical justification for Medicare DSH attributable 
                to hospital characteristics, including bed size), 
                consistent with the original intent of Medicare DSH.
                    (B) The appropriate amount, targeting, and 
                distribution of Medicare DSH to hospitals given their 
                continued uncompensated care costs, to the extent such 
                costs remain.
            (2) Coordination with medicaid dsh report.--The Secretary 
        shall coordinate the report under this subsection with the 
        report on Medicaid DSH under section 1704(a).
    (b) Payment Adjustments in Response to Coverage Expansion.--
            (1) In general.--If there is a significant decrease in the 
        national rate of uninsurance as a result of this division (as 
        determined under paragraph (2)(A)), then the Secretary of 
        Health and Human Services shall, beginning in fiscal year 2017, 
        implement the following adjustments to Medicare DSH:
                    (A) The amount of Medicare DSH shall be adjusted 
                based on the recommendations of the report under 
                subsection (a)(1)(A) and shall take into account 
                variations in the empirical justification for Medicare 
                DSH attributable to hospital characteristics, including 
                bed size.
                    (B) Subject to paragraph (3), increase Medicare DSH 
                for a hospital by an additional amount that is based on 
                the amount of uncompensated care provided by the 
                hospital based on criteria for uncompensated care as 
                determined by the Secretary, which shall exclude bad 
                debt.
            (2) Significant decrease in national rate of uninsurance as 
        a result of this division.--For purposes of this subsection--
                    (A) In general.--There is a ``significant decrease 
                in the national rate of uninsurance as a result of this 
                division'' if there is a decrease in the national rate 
                of uninsurance (as defined in subparagraph (B)) from 
                2012 to 2014 that exceeds 8 percentage points.
                    (B) National rate of uninsurance defined.--The term 
                ``national rate of uninsurance'' means, for a year, 
                such rate for the under-65 population for the year as 
                determined and published by the Bureau of the Census in 
                its Current Population Survey in or about September of 
                the succeeding year.
            (3) Uncompensated care increase.--
                    (A) Computation of dsh savings.--For each fiscal 
                year (beginning with fiscal year 2017), the Secretary 
                shall estimate the aggregate reduction in Medicare DSH 
                that will result from the adjustment under paragraph 
                (1)(A).
                    (B) Structure of payment increase.--The Secretary 
                shall compute the increase in Medicare DSH under 
                paragraph (1)(B) for a fiscal year in accordance with a 
                formula established by the Secretary that provides 
                that--
                            (i) the aggregate amount of such increase 
                        for the fiscal year does not exceed 50 percent 
                        of the aggregate reduction in Medicare DSH 
                        estimated by the Secretary for such fiscal 
                        year; and
                            (ii) hospitals with higher levels of 
                        uncompensated care receive a greater increase.
    (c) Medicare DSH.--In this section, the term ``Medicare DSH'' means 
adjustments in payments under section 1886(d)(5)(F) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital 
services furnished by disproportionate share hospitals.

                Subtitle B--Provisions Related to Part B

                      PART 1--PHYSICIANS' SERVICES

SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

    (a) Transitional Update for 2010.--Section 1848(d) of the Social 
Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the end the 
following new paragraph:
            ``(10) Update for 2010.--The update to the single 
        conversion factor established in paragraph (1)(C) for 2010 
        shall be the percentage increase in the MEI (as defined in 
        section 1842(i)(3)) for that year.''.
    (b) Rebasing SGR Using 2009; Limitation on Cumulative Adjustment 
Period.--Section 1848(d)(4) of such Act (42 U.S.C. 1395w-4(d)(4)) is 
amended--
            (1) in subparagraph (B), by striking ``subparagraph (D)'' 
        and inserting ``subparagraphs (D) and (G)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Rebasing using 2009 for future update 
                adjustments.--In determining the update adjustment 
                factor under subparagraph (B) for 2011 and subsequent 
                years--
                            ``(i) the allowed expenditures for 2009 
                        shall be equal to the amount of the actual 
                        expenditures for physicians' services during 
                        2009; and
                            ``(ii) the reference in subparagraph 
                        (B)(ii)(I) to `April 1, 1996' shall be treated 
                        as a reference to `January 1, 2009 (or, if 
                        later, the first day of the fifth year before 
                        the year involved)'.''.
    (c) Limitation on Physicians' Services Included in Target Growth 
Rate Computation to Services Covered Under Physician Fee Schedule.--
Effective for services furnished on or after January 1, 2009, section 
1848(f)(4)(A) of such Act is amended striking ``(such as clinical'' and 
all that follows through ``in a physician's office'' and inserting 
``for which payment under this part is made under the fee schedule 
under this section, for services for practitioners described in section 
1842(b)(18)(C) on a basis related to such fee schedule, or for services 
described in section 1861(p) (other than such services when furnished 
in the facility of a provider of services)''.
    (d) Establishment of Separate Target Growth Rates for Categories of 
Services.--
            (1) Establishment of service categories.--Subsection (j) of 
        section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is 
        amended by adding at the end the following new paragraph:
            ``(5) Service categories.--For services furnished on or 
        after January 1, 2009, each of the following categories of 
        physicians' services (as defined in paragraph (3)) shall be 
        treated as a separate `service category':
                    ``(A) Evaluation and management services that are 
                procedure codes (for services covered under this title) 
                for--
                            ``(i) services in the category designated 
                        Evaluation and Management in the Health Care 
                        Common Procedure Coding System (established by 
                        the Secretary under subsection (c)(5) as of 
                        December 31, 2009, and as subsequently modified 
                        by the Secretary); and
                            ``(ii) preventive services (as defined in 
                        section 1861(iii)) for which payment is made 
                        under this section.
                    ``(B) All other services not described in 
                subparagraph (A).
        Service categories established under this paragraph shall apply 
        without regard to the specialty of the physician furnishing the 
        service.''.
            (2) Establishment of separate conversion factors for each 
        service category.--Subsection (d)(1) of section 1848 of the 
        Social Security Act (42 U.S.C. 1395w-4) is amended--
                    (A) in subparagraph (A)--
                            (i) by designating the sentence beginning 
                        ``The conversion factor'' as clause (i) with 
                        the heading ``Application of single conversion 
                        factor.--'' and with appropriate indentation;
                            (ii) by striking ``The conversion factor'' 
                        and inserting ``Subject to clause (ii), the 
                        conversion factor''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(ii) Application of multiple conversion 
                        factors beginning with 2011.--
                                    ``(I) In general.--In applying 
                                clause (i) for years beginning with 
                                2011, separate conversion factors shall 
                                be established for each service 
                                category of physicians' services (as 
                                defined in subsection (j)(5)) and any 
                                reference in this section to a 
                                conversion factor for such years shall 
                                be deemed to be a reference to the 
                                conversion factor for each of such 
                                categories.
                                    ``(II) Initial conversion 
                                factors.--Such factors for 2011 shall 
                                be based upon the single conversion 
                                factor for the previous year multiplied 
                                by the update established under 
                                paragraph (11) for such category for 
                                2011.
                                    ``(III) Updating of conversion 
                                factors.--Such factor for a service 
                                category for a subsequent year shall be 
                                based upon the conversion factor for 
                                such category for the previous year and 
                                adjusted by the update established for 
                                such category under paragraph (11) for 
                                the year involved.''; and
                    (B) in subparagraph (D), by striking ``other 
                physicians' services'' and inserting ``for physicians' 
                services described in the service category described in 
                subsection (j)(5)(B)''.
            (3) Establishing updates for conversion factors for service 
        categories.--Section 1848(d) of the Social Security Act (42 
        U.S.C. 1395w-4(d)), as amended by subsection (a), is amended--
                    (A) in paragraph (4)(C)(iii), by striking ``The 
                allowed'' and inserting ``Subject to paragraph (11)(B), 
                the allowed''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(11) Updates for service categories beginning with 
        2011.--
                    ``(A) In general.--In applying paragraph (4) for a 
                year beginning with 2011, the following rules apply:
                            ``(i) Application of separate update 
                        adjustments for each service category.--
                        Pursuant to paragraph (1)(A)(ii)(I), the update 
                        shall be made to the conversion factor for each 
                        service category (as defined in subsection 
                        (j)(5)) based upon an update adjustment factor 
                        for the respective category and year and the 
                        update adjustment factor shall be computed, for 
                        a year, separately for each service category.
                            ``(ii) Computation of allowed and actual 
                        expenditures based on service categories.--In 
                        computing the prior year adjustment component 
                        and the cumulative adjustment component under 
                        clauses (i) and (ii) of paragraph (4)(B), the 
                        following rules apply:
                                    ``(I) Application based on service 
                                categories.--The allowed expenditures 
                                and actual expenditures shall be the 
                                allowed and actual expenditures for the 
                                service category, as determined under 
                                subparagraph (B).
                                    ``(II) Application of category 
                                specific target growth rate.--The 
                                growth rate applied under clause 
                                (ii)(II) of such paragraph shall be the 
                                target growth rate for the service 
                                category involved under subsection 
                                (f)(5).
                    ``(B) Determination of allowed expenditures.--In 
                applying paragraph (4) for a year beginning with 2010, 
                notwithstanding subparagraph (C)(iii) of such 
                paragraph, the allowed expenditures for a service 
                category for a year is an amount computed by the 
                Secretary as follows:
                            ``(i) For 2010.--For 2010:
                                    ``(I) Total 2009 actual 
                                expenditures for all services included 
                                in sgr computation for each service 
                                category.--Compute total actual 
                                expenditures for physicians' services 
                                (as defined in subsection (f)(4)(A)) 
                                for 2009 for each service category.
                                    ``(II) Increase by growth rate to 
                                obtain 2010 allowed expenditures for 
                                service category.--Compute allowed 
                                expenditures for the service category 
                                for 2010 by increasing the allowed 
                                expenditures for the service category 
                                for 2009 computed under subclause (I) 
                                by the target growth rate for such 
                                service category under subsection (f) 
                                for 2010.
                            ``(ii) For subsequent years.--For a 
                        subsequent year, take the amount of allowed 
                        expenditures for such category for the 
                        preceding year (under clause (i) or this 
                        clause) and increase it by the target growth 
                        rate determined under subsection (f) for such 
                        category and year.''.
            (4) Application of separate target growth rates for each 
        category.--
                    (A) In general.--Section 1848(f) of the Social 
                Security Act (42 U.S.C. 1395w-4(f)) is amended by 
                adding at the end the following new paragraph:
            ``(5) Application of separate target growth rates for each 
        service category beginning with 2010.--The target growth rate 
        for a year beginning with 2010 shall be computed and applied 
        separately under this subsection for each service category (as 
        defined in subsection (j)(5)) and shall be computed using the 
        same method for computing the target growth rate except that 
        the factor described in paragraph (2)(C) for--
                    ``(A) the service category described in subsection 
                (j)(5)(A) shall be increased by 0.02; and
                    ``(B) the service category described in subsection 
                (j)(5)(B) shall be increased by 0.01.''.
                    (B) Use of target growth rates.--Section 1848 of 
                such Act is further amended--
                            (i) in subsection (d)--
                                    (I) in paragraph (1)(E)(ii), by 
                                inserting ``or target'' after 
                                ``sustainable''; and
                                    (II) in paragraph (4)(B)(ii)(II), 
                                by inserting ``or target'' after 
                                ``sustainable''; and
                            (ii) in the heading of subsection (f), by 
                        inserting ``and Target Growth Rate'' after 
                        ``Sustainable Growth Rate'';
                            (iii) in subsection (f)(1)--
                                    (I) by striking ``and'' at the end 
                                of subparagraph (A);
                                    (II) in subparagraph (B), by 
                                inserting ``before 2010'' after ``each 
                                succeeding year'' and by striking the 
                                period at the end and inserting ``; 
                                and''; and
                                    (III) by adding at the end the 
                                following new subparagraph:
                    ``(C) November 1 of each succeeding year the target 
                growth rate for such succeeding year and each of the 2 
                preceding years.''; and
                            (iv) in subsection (f)(2), in the matter 
                        before subparagraph (A), by inserting after 
                        ``beginning with 2000'' the following: ``and 
                        ending with 2009''.
    (e) Application to Accountable Care Organization Pilot Program.--In 
applying the target growth rate under subsections (d) and (f) of 
section 1848 of the Social Security Act to services furnished by a 
practitioner to beneficiaries who are attributable to an accountable 
care organization under the pilot program provided under section 1866D 
of such Act, the Secretary of Health and Human Services shall develop, 
not later than January 1, 2012, for application beginning with 2012, a 
method that--
            (1) allows each such organization to have its own 
        expenditure targets and updates for such practitioners, with 
        respect to beneficiaries who are attributable to that 
        organization, that are consistent with the methodologies 
        described in such subsection (f); and
            (2) provides that the target growth rate applicable to 
        other physicians shall not apply to such physicians to the 
        extent that the physicians' services are furnished through the 
        accountable care organization.
In applying paragraph (1), the Secretary of Health and Human Services 
may apply the difference in the update under such paragraph on a claim-
by-claim or lump sum basis and such a payment shall be taken into 
account under the pilot program.

SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(c)(2) of the Social Security Act (42 
U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new 
subparagraphs:
                    ``(K) Potentially misvalued codes.--
                            ``(i) In general.--The Secretary shall--
                                    ``(I) periodically identify 
                                services as being potentially misvalued 
                                using criteria specified in clause 
                                (ii); and
                                    ``(II) review and make appropriate 
                                adjustments to the relative values 
                                established under this paragraph for 
                                services identified as being 
                                potentially misvalued under subclause 
                                (I).
                            ``(ii) Identification of potentially 
                        misvalued codes.--For purposes of identifying 
                        potentially misvalued services pursuant to 
                        clause (i)(I), the Secretary shall examine (as 
                        the Secretary determines to be appropriate) 
                        codes (and families of codes as appropriate) 
                        for which there has been the fastest growth; 
                        codes (and families of codes as appropriate) 
                        that have experienced substantial changes in 
                        practice expenses; codes for new technologies 
                        or services within an appropriate period (such 
                        as three years) after the relative values are 
                        initially established for such codes; multiple 
                        codes that are frequently billed in conjunction 
                        with furnishing a single service; codes with 
                        low relative values, particularly those that 
                        are often billed multiple times for a single 
                        treatment; codes which have not been subject to 
                        review since the implementation of the RBRVS 
                        (the so-called `Harvard-valued codes'); and 
                        such other codes determined to be appropriate 
                        by the Secretary.
                            ``(iii) Review and adjustments.--
                                    ``(I) The Secretary may use 
                                existing processes to receive 
                                recommendations on the review and 
                                appropriate adjustment of potentially 
                                misvalued services described clause 
                                (i)(II).
                                    ``(II) The Secretary may conduct 
                                surveys, other data collection 
                                activities, studies, or other analyses 
                                as the Secretary determines to be 
                                appropriate to facilitate the review 
                                and appropriate adjustment described in 
                                clause (i)(II).
                                    ``(III) The Secretary may use 
                                analytic contractors to identify and 
                                analyze services identified under 
                                clause (i)(I), conduct surveys or 
                                collect data, and make recommendations 
                                on the review and appropriate 
                                adjustment of services described in 
                                clause (i)(II).
                                    ``(IV) The Secretary may coordinate 
                                the review and appropriate adjustment 
                                described in clause (i)(II) with the 
                                periodic review described in 
                                subparagraph (B).
                                    ``(V) As part of the review and 
                                adjustment described in clause (i)(II), 
                                including with respect to codes with 
                                low relative values described in clause 
                                (ii), the Secretary may make 
                                appropriate coding revisions (including 
                                using existing processes for 
                                consideration of coding changes) which 
                                may include consolidation of individual 
                                services into bundled codes for payment 
                                under the fee schedule under subsection 
                                (b).
                                    ``(VI) The provisions of 
                                subparagraph (B)(ii)(II) shall apply to 
                                adjustments to relative value units 
                                made pursuant to this subparagraph in 
                                the same manner as such provisions 
                                apply to adjustments under subparagraph 
                                (B)(ii)(II).
                    ``(L) Validating relative value units.--
                            ``(i) In general.--The Secretary shall 
                        establish a process to validate relative value 
                        units under the fee schedule under subsection 
                        (b).
                            ``(ii) Components and elements of work.--
                        The process described in clause (i) may include 
                        validation of work elements (such as time, 
                        mental effort and professional judgment, 
                        technical skill and physical effort, and stress 
                        due to risk) involved with furnishing a service 
                        and may include validation of the pre, post, 
                        and intra-service components of work.
                            ``(iii) Scope of codes.--The validation of 
                        work relative value units shall include a 
                        sampling of codes for services that is the same 
                        as the codes listed under subparagraph (K)(ii).
                            ``(iv) Methods.--The Secretary may conduct 
                        the validation under this subparagraph using 
                        methods described in subclauses (I) through (V) 
                        of subparagraph (K)(iii) as the Secretary 
                        determines to be appropriate.
                            ``(v) Adjustments.--The Secretary shall 
                        make appropriate adjustments to the work 
                        relative value units under the fee schedule 
                        under subsection (b). The provisions of 
                        subparagraph (B)(ii)(II) shall apply to 
                        adjustments to relative value units made 
                        pursuant to this subparagraph in the same 
                        manner as such provisions apply to adjustments 
                        under subparagraph (B)(ii)(II).''.
    (b) Implementation.--
            (1) Funding.--For purposes of carrying out the provisions 
        of subparagraphs (K) and (L) of 1848(c)(2) of the Social 
        Security Act, as added by subsection (a), in addition to funds 
        otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services for the Center for Medicare & 
        Medicaid Services Program Management Account $20,000,000 for 
        fiscal year 2010 and each subsequent fiscal year. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            (2) Administration.--
                    (A) Chapter 35 of title 44, United States Code and 
                the provisions of the Federal Advisory Committee Act (5 
                U.S.C. App.) shall not apply to this section or the 
                amendment made by this section.
                    (B) Notwithstanding any other provision of law, the 
                Secretary may implement subparagraphs (K) and (L) of 
                1848(c)(2) of the Social Security Act, as added by 
                subsection (a), by program instruction or otherwise.
                    (C) Section 4505(d) of the Balanced Budget Act of 
                1997 is repealed.
                    (D) Except for provisions related to 
                confidentiality of information, the provisions of the 
                Federal Acquisition Regulation shall not apply to this 
                section or the amendment made by this section.
            (3) Focusing cms resources on potentially overvalued 
        codes.--Section 1868(a) of the Social Security Act (42 U.S.C. 
        1395ee(a)) is repealed.

SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

    Section 1833 of the Social Security Act (42 U.S.C. 1395l) is 
amended by adding at the end the following new subsection:
    ``(x) Incentive Payments for Efficient Areas.--
            ``(1) In general.--In the case of services furnished under 
        the physician fee schedule under section 1848 on or after 
        January 1, 2011, and before January 1, 2013, by a supplier that 
        is paid under such fee schedule in an efficient area (as 
        identified under paragraph (2)), in addition to the amount of 
        payment that would otherwise be made for such services under 
        this part, there also shall be paid (on a monthly or quarterly 
        basis) an amount equal to 5 percent of the payment amount for 
        the services under this part.
            ``(2) Identification of efficient areas.--
                    ``(A) In general.--Based upon available data, the 
                Secretary shall identify those counties or equivalent 
                areas in the United States in the lowest fifth 
                percentile of utilization based on per capita spending 
                under this part and part A for services provided in the 
                most recent year for which data are available as of the 
                date of the enactment of this subsection, as 
                standardized to eliminate the effect of geographic 
                adjustments in payment rates.
                    ``(B) Identification of counties where service is 
                furnished.--For purposes of paying the additional 
                amount specified in paragraph (1), if the Secretary 
                uses the 5-digit postal ZIP Code where the service is 
                furnished, the dominant county of the postal ZIP Code 
                (as determined by the United States Postal Service, or 
                otherwise) shall be used to determine whether the 
                postal ZIP Code is in a county described in 
                subparagraph (A).
                    ``(C) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                1878, or otherwise, respecting--
                            ``(i) the identification of a county or 
                        other area under subparagraph (A); or
                            ``(ii) the assignment of a postal ZIP Code 
                        to a county or other area under subparagraph 
                        (B).
                    ``(D) Publication of list of counties; posting on 
                website.--With respect to a year for which a county or 
                area is identified under this paragraph, the Secretary 
                shall identify such counties or areas as part of the 
                proposed and final rule to implement the physician fee 
                schedule under section 1848 for the applicable year. 
                The Secretary shall post the list of counties 
                identified under this paragraph on the Internet website 
                of the Centers for Medicare & Medicaid Services.''.

SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY REPORTING INITIATIVE 
              (PQRI).

    (a) Feedback.--Section 1848(m)(5) of the Social Security Act (42 
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Feedback.--The Secretary shall provide timely 
                feedback to eligible professionals on the performance 
                of the eligible professional with respect to 
                satisfactorily submitting data on quality measures 
                under this subsection.''.
    (b) Appeals.--Such section is further amended--
            (1) in subparagraph (E), by striking ``There shall be'' and 
        inserting ``Subject to subparagraph (I), there shall be''; and
            (2) by adding at the end the following new subparagraph:
                    ``(I) Informal appeals process.--Notwithstanding 
                subparagraph (E), by not later than January 1, 2011, 
                the Secretary shall establish and have in place an 
                informal process for eligible professionals to appeal 
                the determination that an eligible professional did not 
                satisfactorily submit data on quality measures under 
                this subsection.''.
    (c) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of such Act is amended by adding at the end the 
following new paragraph:
            ``(7) Integration of physician quality reporting and ehr 
        reporting.--Not later than January 1, 2012, the Secretary shall 
        develop a plan to integrate clinical reporting on quality 
        measures under this subsection with reporting requirements 
        under subsection (o) relating to the meaningful use of 
        electronic health records. Such integration shall consist of 
        the following:
                    ``(A) The development of measures, the reporting of 
                which would both demonstrate--
                            ``(i) meaningful use of an electronic 
                        health record for purposes of subsection (o); 
                        and
                            ``(ii) clinical quality of care furnished 
                        to an individual.
                    ``(B) The collection of health data to identify 
                deficiencies in the quality and coordination of care 
                for individuals eligible for benefits under this part.
                    ``(C) Such other activities as specified by the 
                Secretary.''.
    (d) Extension of Incentive Payments.--Section 1848(m)(1) of such 
Act (42 U.S.C. 1395w-4(m)(1)) is amended--
            (1) in subparagraph (A), by striking ``2010'' and inserting 
        ``2012''; and
            (2) in subparagraph (B)(ii), by striking ``2009 and 2010'' 
        and inserting ``for each of the years 2009 through 2012''.

SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.

    (a) In General.--Section 1848(e) of the Social Security Act (42 
U.S.C.1395w-4(e)) is amended by adding at the end the following new 
paragraph:
            ``(6) Transition to use of msas as fee schedule areas in 
        california.--
                    ``(A) In general.--
                            ``(i) Revision.--Subject to clause (ii) and 
                        notwithstanding the previous provisions of this 
                        subsection, for services furnished on or after 
                        January 1, 2011, the Secretary shall revise the 
                        fee schedule areas used for payment under this 
                        section applicable to the State of California 
                        using the Metropolitan Statistical Area (MSA) 
                        iterative Geographic Adjustment Factor 
                        methodology as follows:
                                    ``(I) The Secretary shall configure 
                                the physician fee schedule areas using 
                                the Core-Based Statistical Areas-
                                Metropolitan Statistical Areas (each in 
                                this paragraph referred to as an 
                                `MSA'), as defined by the Director of 
                                the Office of Management and Budget, as 
                                the basis for the fee schedule areas. 
                                The Secretary shall employ an iterative 
                                process to transition fee schedule 
                                areas. First, the Secretary shall list 
                                all MSAs within the State by Geographic 
                                Adjustment Factor described in 
                                paragraph (2) (in this paragraph 
                                referred to as a `GAF') in descending 
                                order. In the first iteration, the 
                                Secretary shall compare the GAF of the 
                                highest cost MSA in the State to the 
                                weighted-average GAF of the group of 
                                remaining MSAs in the State. If the 
                                ratio of the GAF of the highest cost 
                                MSA to the weighted-average GAF of the 
                                rest of State is 1.05 or greater then 
                                the highest cost MSA becomes a separate 
                                fee schedule area.
                                    ``(II) In the next iteration, the 
                                Secretary shall compare the MSA of the 
                                second-highest GAF to the weighted-
                                average GAF of the group of remaining 
                                MSAs. If the ratio of the second-
                                highest MSA's GAF to the weighted-
                                average of the remaining lower cost 
                                MSAs is 1.05 or greater, the second-
                                highest MSA becomes a separate fee 
                                schedule area. The iterative process 
                                continues until the ratio of the GAF of 
                                the highest-cost remaining MSA to the 
                                weighted-average of the remaining 
                                lower-cost MSAs is less than 1.05, and 
                                the remaining group of lower cost MSAs 
                                form a single fee schedule area, If two 
                                MSAs have identical GAFs, they shall be 
                                combined in the iterative comparison.
                            ``(ii) Transition.--For services furnished 
                        on or after January 1, 2011, and before January 
                        1, 2016, in the State of California, after 
                        calculating the work, practice expense, and 
                        malpractice geographic indices described in 
                        clauses (i), (ii), and (iii) of paragraph 
                        (1)(A) that would otherwise apply through 
                        application of this paragraph, the Secretary 
                        shall increase any such index to the county-
                        based fee schedule area value on December 31, 
                        2009, if such index would otherwise be less 
                        than the value on January 1, 2010.
                    ``(B) Subsequent revisions.--
                            ``(i) Periodic review and adjustments in 
                        fee schedule areas.--Subsequent to the process 
                        outlined in paragraph (1)(C), not less often 
                        than every three years, the Secretary shall 
                        review and update the California Rest-of-State 
                        fee schedule area using MSAs as defined by the 
                        Director of the Office of Management and Budget 
                        and the iterative methodology described in 
                        subparagraph (A)(i).
                            ``(ii) Link with geographic index data 
                        revision.--The revision described in clause (i) 
                        shall be made effective concurrently with the 
                        application of the periodic review of the 
                        adjustment factors required under paragraph 
                        (1)(C) for California for 2012 and subsequent 
                        periods. Upon request, the Secretary shall make 
                        available to the public any county-level or MSA 
                        derived data used to calculate the geographic 
                        practice cost index.
                    ``(C) References to fee schedule areas.--Effective 
                for services furnished on or after January 1, 2010, for 
                the State of California, any reference in this section 
                to a fee schedule area shall be deemed a reference to 
                an MSA in the State.''.
    (b) Conforming Amendment to Definition of Fee Schedule Area.--
Section 1848(j)(2) of the Social Security Act (42 U.S.C. 1395w(j)(2)) 
is amended by striking ``The term'' and inserting ``Except as provided 
in subsection (e)(6)(C), the term''.

                     PART 2--MARKET BASKET UPDATES

SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATES THAT DO NOT ALREADY INCORPORATE SUCH 
              IMPROVEMENTS.

    (a) Outpatient Hospitals.--
            (1) In general.--The first sentence of section 
        1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C. 
        1395l(t)(3)(C)(iv)) is amended--
                    (A) by inserting ``(which is subject to the 
                productivity adjustment described in subclause (II) of 
                such section)'' after ``1886(b)(3)(B)(iii)''; and
                    (B) by inserting ``(but not below 0)'' after 
                ``reduced''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to increase factors for services furnished in years 
        beginning with 2010.
    (b) Ambulance Services.--Section 1834(l)(3)(B) of such Act (42 
U.S.C. 1395m(l)(3)(B))) is amended by inserting before the period at 
the end the following: ``and, in the case of years beginning with 2010, 
subject to the productivity adjustment described in section 
1886(b)(3)(B)(iii)(II)''.
    (c) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
such Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
            (1) by redesignating clause (v) as clause (vi); and
            (2) by inserting after clause (iv) the following new 
        clause:
    ``(v) In implementing the system described in clause (i), for 
services furnished during 2010 or any subsequent year, to the extent 
that an annual percentage change factor applies, such factor shall be 
subject to the productivity adjustment described in section 
1886(b)(3)(B)(iii)(II).''.
    (d) Laboratory Services.--Section 1833(h)(2)(A) of such Act (42 
U.S.C. 1395l(h)(2)(A)) is amended--
            (1) in clause (i), by striking ``for each of years 2009 
        through 2013'' and inserting ``for 2009''; and
            (2) clause (ii)--
                    (A) by striking ``and'' at the end of subclause 
                (III);
                    (B) by striking the period at the end of subclause 
                (IV) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
            ``(V) the annual adjustment in the fee schedules determined 
        under clause (i) for years beginning with 2010 shall be subject 
        to the productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II).''.
    (e) Certain Durable Medical Equipment.--Section 1834(a)(14) of such 
Act (42 U.S.C. 1395m(a)(14)) is amended--
            (1) in subparagraph (K), by inserting before the semicolon 
        at the end the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)'';
            (2) in subparagraph (L)(i), by inserting after ``June 
        2013,'' the following: ``subject to the productivity adjustment 
        described in section 1886(b)(3)(B)(iii)(II),'';
            (3) in subparagraph (L)(ii), by inserting after ``June 
        2013'' the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)''; and
            (4) in subparagraph (M), by inserting before the period at 
        the end the following: ``, subject to the productivity 
        adjustment described in section 1886(b)(3)(B)(iii)(II)''.

                        PART 3--OTHER PROVISIONS

SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.

    (a) In General.--Section 1834(a)(7)(A)(iii) of the Social Security 
Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is amended--
            (1) in the heading, by inserting ``certain complex 
        rehabilitative'' after ``option for''; and
            (2) by striking ``power-driven wheelchair'' and inserting 
        ``complex rehabilitative power-driven wheelchair recognized by 
        the Secretary as classified within group 3 or higher''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2011, and shall apply to power-driven 
wheelchairs furnished on or after such date. Such amendments shall not 
apply to contracts entered into under section 1847 of the Social 
Security Act (42 U.S.C. 1395w-3) pursuant to a bid submitted under such 
section before October 1, 2010, under subsection (a)(1)(B)(i)(I) of 
such section.

SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.

    Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 142 of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275), is amended by striking, the first place it appears, ``January 1, 
2010'' and inserting ``January 1, 2012''.

SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.

    Not later than 12 months after the date of enactment of this Act, 
the Medicare Payment Advisory Commission shall submit to Congress a 
report on the following:
            (1) The scope of coverage for home infusion therapy in the 
        fee-for-service Medicare program under title XVIII of the 
        Social Security Act, Medicare Advantage under part C of such 
        title, the veteran's health care program under chapter 17 of 
        title 38, United States Code, and among private payers, 
        including an analysis of the scope of services provided by home 
        infusion therapy providers to their patients in such programs.
            (2) The benefits and costs of providing such coverage under 
        the Medicare program, including a calculation of the potential 
        savings achieved through avoided or shortened hospital and 
        nursing home stays as a result of Medicare coverage of home 
        infusion therapy.
            (3) An assessment of sources of data on the costs of home 
        infusion therapy that might be used to construct payment 
        mechanisms in the Medicare program.
            (4) Recommendations, if any, on the structure of a payment 
        system under the Medicare program for home infusion therapy, 
        including an analysis of the payment methodologies used under 
        Medicare Advantage plans and private health plans for the 
        provision of home infusion therapy and their applicability to 
        the Medicare program.

SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS (ASCS) TO SUBMIT COST 
              DATA AND OTHER DATA.

    (a) Cost Reporting.--
            (1) In general.--Section 1833(i) of the Social Security Act 
        (42 U.S.C. 1395l(i)) is amended by adding at the end the 
        following new paragraph:
    ``(8) The Secretary shall require, as a condition of the agreement 
described in section 1832(a)(2)(F)(i), the submission of such cost 
report as the Secretary may specify, taking into account the 
requirements for such reports under section 1815 in the case of a 
hospital.''.
            (2) Development of cost report.--Not later than 3 years 
        after the date of the enactment of this Act, the Secretary of 
        Health and Human Services shall develop a cost report form for 
        use under section 1833(i)(8) of the Social Security Act, as 
        added by paragraph (1).
            (3) Audit requirement.--The Secretary shall provide for 
        periodic auditing of cost reports submitted under section 
        1833(i)(8) of the Social Security Act, as added by paragraph 
        (1).
            (4) Effective date.--The amendment made by paragraph (1) 
        shall apply to agreements applicable to cost reporting periods 
        beginning 18 months after the date the Secretary develops the 
        cost report form under paragraph (2).
    (b) Additional Data on Quality.--
            (1) In general.--Section 1833(i)(7) of such Act (42 U.S.C. 
        1395l(i)(7)) is amended--
                    (A) in subparagraph (B), by inserting ``subject to 
                subparagraph (C),'' after ``may otherwise provide,''; 
                and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(C) Under subparagraph (B) the Secretary shall require the 
reporting of such additional data relating to quality of services 
furnished in an ambulatory surgical facility, including data on health 
care associated infections, as the Secretary may specify.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall to reporting for years beginning with 2012.

SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended by adding at the end the following new paragraph:
            ``(18) Authorization of adjustment for cancer hospitals.--
                    ``(A) Study.--The Secretary shall conduct a study 
                to determine if, under the system under this 
                subsection, costs incurred by hospitals described in 
                section 1886(d)(1)(B)(v) with respect to ambulatory 
                payment classification groups exceed those costs 
                incurred by other hospitals furnishing services under 
                this subsection (as determined appropriate by the 
                Secretary).
                    ``(B) Authorization of adjustment.--Insofar as the 
                Secretary determines under subparagraph (A) that costs 
                incurred by hospitals described in section 
                1886(d)(1)(B)(v) exceed those costs incurred by other 
                hospitals furnishing services under this subsection, 
                the Secretary shall provide for an appropriate 
                adjustment under paragraph (2)(E) to reflect those 
                higher costs effective for services furnished on or 
                after January 1, 2011.''.

SEC. 1146. MEDICARE IMPROVEMENT FUND.

    Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 
1395iii(b)(1)(A)) is amended to read as follows:
                    ``(A) the period beginning with fiscal year 2011 
                and ending with fiscal year 2019, $8,000,000,000; 
                and''.

SEC. 1147. PAYMENT FOR IMAGING SERVICES.

    (a) Adjustment in Practice Expense to Reflect Higher Presumed 
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w) 
is amended--
            (1) in subsection (b)(4)--
                    (A) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``this paragraph''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Adjustment in practice expense to reflect 
                higher presumed utilization.--In computing the number 
                of practice expense relative value units under 
                subsection (c)(2)(C)(ii) with respect to advanced 
                diagnostic imaging services (as defined in section 
                1834(e)(1)(B)), the Secretary shall adjust such number 
                of units so it reflects a 75 percent (rather than 50 
                percent) presumed rate of utilization of imaging 
                equipment.''; and
            (2) in subsection (c)(2)(B)(v)(II), by inserting ``and 
        other provisions'' after ``OPD payment cap''.
    (b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848(b)(4) of such 
Act is further amended by adding at the end the following new 
subparagraph:
                    ``(D) Adjustment in technical component discount on 
                single-session imaging involving consecutive body 
                parts.--The Secretary shall increase the reduction in 
                expenditures attributable to the multiple procedure 
                payment reduction applicable to the technical component 
                for imaging under the final rule published by the 
                Secretary in the Federal Register on November 21, 2005 
                (part 405 of title 42, Code of Federal Regulations) 
                from 25 percent to 50 percent.''.
    (c) Effective Date.--Except as otherwise provided, this section, 
and the amendments made by this section, shall apply to services 
furnished on or after January 1, 2011.

SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.

    (a) Waiver of Surety Bond Requirement.--Section 1834(a)(16) of the 
Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by adding at 
the end the following: ``The requirement for a surety bond described in 
subparagraph (B) shall not apply in the case of a pharmacy (i) that has 
been enrolled under section 1866(j) as a supplier of durable medical 
equipment, prosthetics, orthotics, and supplies and has been issued 
(which may include renewal of) a provider number (as described in the 
first sentence of this paragraph) for at least 5 years, and (ii) for 
which a final adverse action (as defined in section 424.57(a) of title 
42, Code of Federal Regulations) has never been imposed.''.
    (b) Ensuring Supply of Oxygen Equipment.--
            (1) In general.--Section 1834(a)(5)(F) of the Social 
        Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                    (A) in clause (ii), by striking ``After the'' and 
                inserting ``Except as provided in clause (iii), after 
                the''; and
                    (B) by adding at the end the following new clause:
                            ``(iii) Continuation of supply.--In the 
                        case of a supplier furnishing such equipment to 
                        an individual under this subsection as of the 
                        27th month of the 36 months described in clause 
                        (i), the supplier furnishing such equipment as 
                        of such month shall continue to furnish such 
                        equipment to such individual (either directly 
                        or though arrangements with other suppliers of 
                        such equipment) during any subsequent period of 
                        medical need for the remainder of the 
                        reasonable useful lifetime of the equipment, as 
                        determined by the Secretary, regardless of the 
                        location of the individual, unless another 
                        supplier has accepted responsibility for 
                        continuing to furnish such equipment during the 
                        remainder of such period.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as of the date of the enactment of this Act 
        and shall apply to the furnishing of equipment to individuals 
        for whom the 27th month of a continuous period of use of oxygen 
        equipment described in section 1834(a)(5)(F) of the Social 
        Security Act occurs on or after July 1, 2010.
    (c) Treatment of Current Accreditation Applications.--Section 
1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is amended--
            (1) in clause (i)--
                    (A) by striking ``clause (ii)'' and inserting 
                ``clauses (ii) and (iii)''; and
                    (B) by striking ``and'' at the end;
            (2) by striking the period at the end of clause (ii)(II) 
        and by inserting ``; and''; and
            (3) by adding at the end the following:
                            ``(iii) the requirement for accreditation 
                        described in clause (i) shall not apply for 
                        purposes of supplying diabetic testing 
                        supplies, canes, and crutches in the case of a 
                        pharmacy that is enrolled under section 1866(j) 
                        as a supplier of durable medical equipment, 
                        prosthetics, orthotics, and supplies.
                Any supplier that has submitted an application for 
                accreditation before August 1, 2009, shall be deemed as 
                meeting applicable standards and accreditation 
                requirement under this subparagraph until such time as 
                the independent accreditation organization takes action 
                on the supplier's application.''.
    (d) Restoring 36-Month Oxygen Rental Period in Case of Supplier 
Bankruptcy for Certain Individuals.--Section 1834(a)(5)(F) of such Act 
(42 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end the 
following new clause:
                            ``(iii) Exception for bankruptcy.--If a 
                        supplier of oxygen to an individual is declared 
                        bankrupt and its assets are liquidated and at 
                        the time of such declaration and liquidation 
                        more than 24 months of rental payments have 
                        been made, the individual may begin under this 
                        subparagraph a new 36-month rental period with 
                        another supplier of oxygen.''.

SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.

    (a) In General.--The Medicare Payment Advisory Commission shall 
conduct a study regarding bone mass measurement, including computed 
tomography, duel-energy x-ray absorptriometry, and vertebral fracture 
assessment. The study shall focus on the following:
            (1) An assessment of the adequacy of Medicare payment rates 
        for such services, taking into account costs of acquiring the 
        necessary equipment, professional work time, and practice 
        expense costs.
            (2) The impact of Medicare payment changes since 2006 on 
        beneficiary access to bone mass measurement benefits in general 
        and in rural and minority communities specifically.
            (3) A review of the clinically appropriate and recommended 
        use among Medicare beneficiaries and how usage rates among such 
        beneficiaries compares to such recommendations.
            (4) In conjunction with the findings under (3), 
        recommendations, if necessary, regarding methods for reaching 
        appropriate use of bone mass measurement studies among Medicare 
        beneficiaries.
    (b) Report.--The Commission shall submit a report to the Congress, 
not later than 9 months after the date of the enactment of this Act, 
containing a description of the results of the study conducted under 
subsection (a) and the conclusions and recommendations, if any, 
regarding each of the issues described in paragraphs (1), (2), (3), and 
(4) of such subsection.

        Subtitle C--Provisions Related to Medicare Parts A and B

SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.

    (a) Hospitals.--
            (1) In general.--Section 1886 of the Social Security Act 
        (42 U.S.C. 1395ww), as amended by section 1103(a), is amended 
        by adding at the end the following new subsection:
    ``(p) Adjustment to Hospital Payments for Excess Readmissions.--
            ``(1) In general.--With respect to payment for discharges 
        from an applicable hospital (as defined in paragraph (5)(C)) 
        occurring during a fiscal year beginning on or after October 1, 
        2011, in order to account for excess readmissions in the 
        hospital, the Secretary shall reduce the payments that would 
        otherwise be made to such hospital under subsection (d) (or 
        section 1814(b)(3), as the case may be) for such a discharge by 
        an amount equal to the product of--
                    ``(A) the base operating DRG payment amount (as 
                defined in paragraph (2)) for the discharge; and
                    ``(B) the adjustment factor (described in paragraph 
                (3)(A)) for the hospital for the fiscal year.
            ``(2) Base operating drg payment amount.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for purposes of this subsection, the 
                term `base operating DRG payment amount' means, with 
                respect to a hospital for a fiscal year, the payment 
                amount that would otherwise be made under subsection 
                (d) for a discharge if this subsection did not apply, 
                reduced by any portion of such amount that is 
                attributable to payments under subparagraphs (B) and 
                (F) of paragraph (5).
                    ``(B) Adjustments.--For purposes of subparagraph 
                (A), in the case of a hospital that is paid under 
                section 1814(b)(3), the term `base operating DRG 
                payment amount' means the payment amount under such 
                section.
            ``(3) Adjustment factor.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the adjustment factor under this paragraph for an 
                applicable hospital for a fiscal year is equal to the 
                greater of--
                            ``(i) the ratio described in subparagraph 
                        (B) for the hospital for the applicable period 
                        (as defined in paragraph (5)(D)) for such 
                        fiscal year; or
                            ``(ii) the floor adjustment factor 
                        specified in subparagraph (C).
                    ``(B) Ratio.--The ratio described in this 
                subparagraph for a hospital for an applicable period is 
                equal to 1 minus the ratio of--
                            ``(i) the aggregate payments for excess 
                        readmissions (as defined in paragraph (4)(A)) 
                        with respect to an applicable hospital for the 
                        applicable period; and
                            ``(ii) the aggregate payments for all 
                        discharges (as defined in paragraph (4)(B)) 
                        with respect to such applicable hospital for 
                        such applicable period.
                    ``(C) Floor adjustment factor.--For purposes of 
                subparagraph (A), the floor adjustment factor specified 
                in this subparagraph for--
                            ``(i) fiscal year 2012 is 0.99;
                            ``(ii) fiscal year 2013 is 0.98;
                            ``(iii) fiscal year 2014 is 0.97; or
                            ``(iv) a subsequent fiscal year is 0.95.
            ``(4) Aggregate payments, excess readmission ratio 
        defined.--For purposes of this subsection:
                    ``(A) Aggregate payments for excess readmissions.--
                The term `aggregate payments for excess readmissions' 
                means, for a hospital for a fiscal year, the sum, for 
                applicable conditions (as defined in paragraph (5)(A)), 
                of the product, for each applicable condition, of--
                            ``(i) the base operating DRG payment amount 
                        for such hospital for such fiscal year for such 
                        condition;
                            ``(ii) the number of admissions for such 
                        condition for such hospital for such fiscal 
                        year; and
                            ``(iii) the excess readmissions ratio (as 
                        defined in subparagraph (C)) for such hospital 
                        for the applicable period for such fiscal year 
                        minus 1.
                    ``(B) Aggregate payments for all discharges.--The 
                term `aggregate payments for all discharges' means, for 
                a hospital for a fiscal year, the sum of the base 
                operating DRG payment amounts for all discharges for 
                all conditions from such hospital for such fiscal year.
                    ``(C) Excess readmission ratio.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the term `excess readmissions ratio' 
                        means, with respect to an applicable condition 
                        for a hospital for an applicable period, the 
                        ratio (but not less than 1.0) of--
                                    ``(I) the risk adjusted 
                                readmissions based on actual 
                                readmissions, as determined consistent 
                                with a readmission measure methodology 
                                that has been endorsed under paragraph 
                                (5)(A)(ii)(I), for an applicable 
                                hospital for such condition with 
                                respect to the applicable period; to
                                    ``(II) the risk adjusted expected 
                                readmissions (as determined consistent 
                                with such a methodology) for such 
                                hospital for such condition with 
                                respect to such applicable period.
                            ``(ii) Exclusion of certain readmissions.--
                        For purposes of clause (i), with respect to a 
                        hospital, excess readmissions shall not include 
                        readmissions for an applicable condition for 
                        which there are fewer than a minimum number (as 
                        determined by the Secretary) of discharges for 
                        such applicable condition for the applicable 
                        period and such hospital.
                            ``(iii) Adjustment.--In order to promote a 
                        reduction over time in the overall rate of 
                        readmissions for applicable conditions, the 
                        Secretary may provide, beginning with 
                        discharges for fiscal year 2014, for the 
                        determination of the excess readmissions ratio 
                        under subparagraph (C) to be based on a ranking 
                        of hospitals by readmission ratios (from lower 
                        to higher readmission ratios) normalized to a 
                        benchmark that is lower than the 50th 
                        percentile.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) Applicable condition.--The term `applicable 
                condition' means, subject to subparagraph (B), a 
                condition or procedure selected by the Secretary among 
                conditions and procedures for which--
                            ``(i) readmissions (as defined in 
                        subparagraph (E)) that represent conditions or 
                        procedures that are high volume or high 
                        expenditures under this title (or other 
                        criteria specified by the Secretary); and
                            ``(ii) measures of such readmissions--
                                    ``(I) have been endorsed by the 
                                entity with a contract under section 
                                1890(a); and
                                    ``(II) such endorsed measures have 
                                appropriate exclusions for readmissions 
                                that are unrelated to the prior 
                                discharge (such as a planned 
                                readmission or transfer to another 
                                applicable hospital).
                    ``(B) Expansion of applicable conditions.--
                Beginning with fiscal year 2013, the Secretary shall 
                expand the applicable conditions beyond the 3 
                conditions for which measures have been endorsed as 
                described in subparagraph (A)(ii)(I) as of the date of 
                the enactment of this subsection to the additional 4 
                conditions that have been so identified by the Medicare 
                Payment Advisory Commission in its report to Congress 
                in June 2007 and to other conditions and procedures 
                which may include an all-condition measure of 
                readmissions, as determined appropriate by the 
                Secretary. In expanding such applicable conditions, the 
                Secretary shall seek the endorsement described in 
                subparagraph (A)(ii)(I) but may apply such measures 
                without such an endorsement.
                    ``(C) Applicable hospital.--The term `applicable 
                hospital' means a subsection (d) hospital or a hospital 
                that is paid under section 1814(b)(3).
                    ``(D) Applicable period.--The term `applicable 
                period' means, with respect to a fiscal year, such 
                period as the Secretary shall specify for purposes of 
                determining excess readmissions.
                    ``(E) Readmission.--The term `readmission' means, 
                in the case of an individual who is discharged from an 
                applicable hospital, the admission of the individual to 
                the same or another applicable hospital within a time 
                period specified by the Secretary from the date of such 
                discharge. Insofar as the discharge relates to an 
                applicable condition for which there is an endorsed 
                measure described in subparagraph (A)(ii)(I), such time 
                period (such as 30 days) shall be consistent with the 
                time period specified for such measure.
            ``(6) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the determination of base operating DRG 
                payment amounts;
                    ``(B) the methodology for determining the 
                adjustment factor under paragraph (3), including excess 
                readmissions ratio under paragraph (4)(C), aggregate 
                payments for excess readmissions under paragraph 
                (4)(A), and aggregate payments for all discharges under 
                paragraph (4)(B), and applicable periods and applicable 
                conditions under paragraph (5);
                    ``(C) the measures of readmissions as described in 
                paragraph (5)(A)(ii); and
                    ``(D) the determination of a targeted hospital 
                under paragraph (8)(B)(i), the increase in payment 
                under paragraph (8)(B)(ii), the aggregate cap under 
                paragraph (8)(C)(i), the hospital-specific limit under 
                paragraph (8)(C)(ii), and the form of payment made by 
                the Secretary under paragraph (8)(D).
            ``(7) Monitoring inappropriate changes in admissions 
        practices.--The Secretary shall monitor the activities of 
        applicable hospitals to determine if such hospitals have taken 
        steps to avoid patients at risk in order to reduce the 
        likelihood of increasing readmissions for applicable 
        conditions. If the Secretary determines that such a hospital 
        has taken such a step, after notice to the hospital and 
        opportunity for the hospital to undertake action to alleviate 
        such steps, the Secretary may impose an appropriate sanction.
            ``(8) Assistance to certain hospitals.--
                    ``(A) In general.--For purposes of providing funds 
                to applicable hospitals to take steps described in 
                subparagraph (E) to address factors that may impact 
                readmissions of individuals who are discharged from 
                such a hospital, for fiscal years beginning on or after 
                October 1, 2011, the Secretary shall make a payment 
                adjustment for a hospital described in subparagraph 
                (B), with respect to each such fiscal year, by a 
                percent estimated by the Secretary to be consistent 
                with subparagraph (C).
                    ``(B) Targeted hospitals.--Subparagraph (A) shall 
                apply to an applicable hospital that--
                            ``(i) received (or, in the case of an 
                        1814(b)(3) hospital, otherwise would have been 
                        eligible to receive) $10,000,000 or more in 
                        disproportionate share payments using the 
                        latest available data as estimated by the 
                        Secretary; and
                            ``(ii) provides assurances satisfactory to 
                        the Secretary that the increase in payment 
                        under this paragraph shall be used for purposes 
                        described in subparagraph (E).
                    ``(C) Caps.--
                            ``(i) Aggregate cap.--The aggregate amount 
                        of the payment adjustment under this paragraph 
                        for a fiscal year shall not exceed 5 percent of 
                        the estimated difference in the spending that 
                        would occur for such fiscal year with and 
                        without application of the adjustment factor 
                        described in paragraph (3) and applied pursuant 
                        to paragraph (1).
                            ``(ii) Hospital-specific limit.--The 
                        aggregate amount of the payment adjustment for 
                        a hospital under this paragraph shall not 
                        exceed the estimated difference in spending 
                        that would occur for such fiscal year for such 
                        hospital with and without application of the 
                        adjustment factor described in paragraph (3) 
                        and applied pursuant to paragraph (1).
                    ``(D) Form of payment.--The Secretary may make the 
                additional payments under this paragraph on a lump sum 
                basis, a periodic basis, a claim by claim basis, or 
                otherwise.
                    ``(E) Use of additional payment.--Funding under 
                this paragraph shall be used by targeted hospitals for 
                transitional care activities designed to address the 
                patient noncompliance issues that result in higher than 
                normal readmission rates, such as one or more of the 
                following:
                            ``(i) Providing care coordination services 
                        to assist in transitions from the targeted 
                        hospital to other settings.
                            ``(ii) Hiring translators and interpreters.
                            ``(iii) Increasing services offered by 
                        discharge planners.
                            ``(iv) Ensuring that individuals receive a 
                        summary of care and medication orders upon 
                        discharge.
                            ``(v) Developing a quality improvement plan 
                        to assess and remedy preventable readmission 
                        rates.
                            ``(vi) Assigning discharged individuals to 
                        a medical home.
                            ``(vii) Doing other activities as 
                        determined appropriate by the Secretary.
                    ``(F) GAO report on use of funds.--Not later than 3 
                years after the date on which funds are first made 
                available under this paragraph, the Comptroller General 
                of the United States shall submit to Congress a report 
                on the use of such funds.
                    ``(G) Disproportionate share hospital payment.--In 
                this paragraph, the term `disproportionate share 
                hospital payment' means an additional payment amount 
                under subsection (d)(5)(F).''.
    (b) Application to Critical Access Hospitals.--Section 1814(l) of 
the Social Security Act (42 U.S.C. 1395f(l)) is amended--
            (1) in paragraph (5)--
                    (A) by striking ``and'' at the end of subparagraph 
                (C);
                    (B) by striking the period at the end of 
                subparagraph (D) and inserting ``; and'';
                    (C) by inserting at the end the following new 
                subparagraph:
            ``(E) The methodology for determining the adjustment factor 
        under paragraph (5), including the determination of aggregate 
        payments for actual and expected readmissions, applicable 
        periods, applicable conditions and measures of readmissions.''; 
        and
                    (D) by redesignating such paragraph as paragraph 
                (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
    ``(5) The adjustment factor described in section 1886(p)(3) shall 
apply to payments with respect to a critical access hospital with 
respect to a cost reporting period beginning in fiscal year 2012 and 
each subsequent fiscal year (after application of paragraph (4) of this 
subsection) in a manner similar to the manner in which such section 
applies with respect to a fiscal year to an applicable hospital as 
described in section 1886(p)(2).''.
    (c) Post Acute Care Providers.--
            (1) Interim policy.--
                    (A) In general.--With respect to a readmission to 
                an applicable hospital or a critical access hospital 
                (as described in section 1814(l) of the Social Security 
                Act) from a post acute care provider (as defined in 
                paragraph (3)) and such a readmission is not governed 
                by section 412.531 of title 42, Code of Federal 
                Regulations, if the claim submitted by such a post-
                acute care provider under title XVIII of the Social 
                Security Act indicates that the individual was 
                readmitted to a hospital from such a post-acute care 
                provider or admitted from home and under the care of a 
                home health agency within 30 days of an initial 
                discharge from an applicable hospital or critical 
                access hospital, the payment under such title on such 
                claim shall be the applicable percent specified in 
                subparagraph (B) of the payment that would otherwise be 
                made under the respective payment system under such 
                title for such post-acute care provider if this 
                subsection did not apply.
                    (B) Applicable percent defined.--For purposes of 
                subparagraph (A), the applicable percent is--
                            (i) for fiscal or rate year 2012 is 0.996;
                            (ii) for fiscal or rate year 2013 is 0.993; 
                        and
                            (iii) for fiscal or rate year 2014 is 0.99.
                    (C) Effective date.--Subparagraph (1) shall apply 
                to discharges or services furnished (as the case may be 
                with respect to the applicable post acute care 
                provider) on or after the first day of the fiscal year 
                or rate year, beginning on or after October 1, 2011, 
                with respect to the applicable post acute care 
                provider.
            (2) Development and application of performance measures.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall develop appropriate measures of 
                readmission rates for post acute care providers. The 
                Secretary shall seek endorsement of such measures by 
                the entity with a contract under section 1890(a) of the 
                Social Security Act but may adopt and apply such 
                measures under this paragraph without such an 
                endorsement. The Secretary shall expand such measures 
                in a manner similar to the manner in which applicable 
                conditions are expanded under paragraph (5)(B) of 
                section 1886(p) of the Social Security Act, as added by 
                subsection (a).
                    (B) Implementation.--The Secretary shall apply, on 
                or after October 1, 2014, with respect to post acute 
                care providers, policies similar to the policies 
                applied with respect to applicable hospitals and 
                critical access hospitals under the amendments made by 
                subsection (a). The provisions of paragraph (1) shall 
                apply with respect to any period on or after October 1, 
                2014, and before such application date described in the 
                previous sentence in the same manner as such provisions 
                apply with respect to fiscal or rate year 2014.
                    (C) Monitoring and penalties.--The provisions of 
                paragraph (7) of such section 1886(p) shall apply to 
                providers under this paragraph in the same manner as 
                they apply to hospitals under such section.
            (3) Definitions.--For purposes of this subsection:
                    (A) Post acute care provider.--The term ``post 
                acute care provider'' means--
                            (i) a skilled nursing facility (as defined 
                        in section 1819(a) of the Social Security Act);
                            (ii) an inpatient rehabilitation facility 
                        (described in section 1886(h)(1)(A) of such 
                        Act);
                            (iii) a home health agency (as defined in 
                        section 1861(o) of such Act); and
                            (iv) a long term care hospital (as defined 
                        in section 1861(ccc) of such Act).
                    (B) Other terms.--The terms ``applicable 
                condition'', ``applicable hospital'', and 
                ``readmission'' have the meanings given such terms in 
                section 1886(p)(5) of the Social Security Act, as added 
                by subsection (a)(1).
    (d) Physicians.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study to determine how the readmissions policy 
        described in the previous subsections could be applied to 
        physicians.
            (2) Considerations.--In conducting the study, the Secretary 
        shall consider approaches such as--
                    (A) creating a new code (or codes) and payment 
                amount (or amounts) under the fee schedule in section 
                1848 of the Social Security Act (in a budget neutral 
                manner) for services furnished by an appropriate 
                physician who sees an individual within the first week 
                after discharge from a hospital or critical access 
                hospital;
                    (B) developing measures of rates of readmission for 
                individuals treated by physicians;
                    (C) applying a payment reduction for physicians who 
                treat the patient during the initial admission that 
                results in a readmission; and
                    (D) methods for attributing payments or payment 
                reductions to the appropriate physician or physicians.
            (3) Report.--The Secretary shall issue a public report on 
        such study not later than the date that is one year after the 
        date of the enactment of this Act.
    (e) Funding.--For purposes of carrying out the provisions of this 
section, in addition to funds otherwise available, out of any funds in 
the Treasury not otherwise appropriated, there are appropriated to the 
Secretary of Health and Human Services for the Center for Medicare & 
Medicaid Services Program Management Account $25,000,000 for each 
fiscal year beginning with 2010. Amounts appropriated under this 
subsection for a fiscal year shall be available until expended.

SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING 
              PILOT PROGRAM.

    (a) Plan.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        develop a detailed plan to reform payment for post acute care 
        (PAC) services under the Medicare program under title XVIII of 
        the Social Security Act (in this section referred to as the 
        ``Medicare program)''. The goals of such payment reform are 
        to--
                    (A) improve the coordination, quality, and 
                efficiency of such services; and
                    (B) improve outcomes for individuals such as 
                reducing the need for readmission to hospitals from 
                providers of such services.
            (2) Bundling post acute services.--The plan described in 
        paragraph (1) shall include detailed specifications for a 
        bundled payment for post acute services (in this section 
        referred to as the ``post acute care bundle''), and may include 
        other approaches determined appropriate by the Secretary.
            (3) Post acute services.--For purposes of this section, the 
        term ``post acute services'' means services for which payment 
        may be made under the Medicare program that are furnished by 
        skilled nursing facilities, inpatient rehabilitation 
        facilities, long term care hospitals, hospital based outpatient 
        rehabilitation facilities and home health agencies to an 
        individual after discharge of such individual from a hospital, 
        and such other services determined appropriate by the 
        Secretary.
    (b) Details.--The plan described in subsection (a)(1) shall include 
consideration of the following issues:
            (1) The nature of payments under a post acute care bundle, 
        including the type of provider or entity to whom payment should 
        be made, the scope of activities and services included in the 
        bundle, whether payment for physicians' services should be 
        included in the bundle, and the period covered by the bundle.
            (2) Whether the payment should be consolidated with the 
        payment under the inpatient prospective system under section 
        1886 of the Social Security Act (in this section referred to as 
        MS-DRGs) or a separate payment should be established for such 
        bundle, and if a separate payment is established, whether it 
        should be made only upon use of post acute care services or for 
        every discharge.
            (3) Whether the bundle should be applied across all 
        categories of providers of inpatient services (including 
        critical access hospitals) and post acute care services or 
        whether it should be limited to certain categories of 
        providers, services, or discharges, such as high volume or high 
        cost MS-DRGs.
            (4) The extent to which payment rates could be established 
        to achieve offsets for efficiencies that could be expected to 
        be achieved with a bundle payment, whether such rates should be 
        established on a national basis or for different geographic 
        areas, should vary according to discharge, case mix, outliers, 
        and geographic differences in wages or other appropriate 
        adjustments, and how to update such rates.
            (5) The nature of protections needed for individuals under 
        a system of bundled payments to ensure that individuals receive 
        quality care, are furnished the level and amount of services 
        needed as determined by an appropriate assessment instrument, 
        are offered choice of provider, and the extent to which 
        transitional care services would improve quality of care for 
        individuals and the functioning of a bundled post-acute system.
            (6) The nature of relationships that may be required 
        between hospitals and providers of post acute care services to 
        facilitate bundled payments, including the application of 
        gainsharing, anti-referral, anti-kickback, and anti-trust laws.
            (7) Quality measures that would be appropriate for 
        reporting by hospitals and post acute providers (such as 
        measures that assess changes in functional status and quality 
        measures appropriate for each type of post acute services 
        provider including how the reporting of such quality measures 
        could be coordinated with other reporting of such quality 
        measures by such providers otherwise required).
            (8) How cost-sharing for a post acute care bundle should be 
        treated relative to current rules for cost-sharing for 
        inpatient hospital, home health, skilled nursing facility, and 
        other services.
            (9) How other programmatic issues should be treated in a 
        post acute care bundle, including rules specific to various 
        types of post-acute providers such as the post-acute transfer 
        policy, three-day hospital stay to qualify for services 
        furnished by skilled nursing facilities, and the coordination 
        of payments and care under the Medicare program and the 
        Medicaid program.
            (10) Such other issues as the Secretary deems appropriate.
    (c) Consultations and Analysis.--
            (1) Consultation with stakeholders.--In developing the plan 
        under subsection (a)(1), the Secretary shall consult with 
        relevant stakeholders and shall consider experience with such 
        research studies and demonstrations that the Secretary 
        determines appropriate.
            (2) Analysis and data collection.--In developing such plan, 
        the Secretary shall--
                    (A) analyze the issues described in subsection (b) 
                and other issues that the Secretary determines 
                appropriate;
                    (B) analyze the impacts (including geographic 
                impacts) of post acute service reform approaches, 
                including bundling of such services on individuals, 
                hospitals, post acute care providers, and physicians;
                    (C) use existing data (such as data submitted on 
                claims) and collect such data as the Secretary 
                determines are appropriate to develop such plan 
                required in this section; and
                    (D) if patient functional status measures are 
                appropriate for the analysis, to the extent practical, 
                build upon the CARE tool being developed pursuant to 
                section 5008 of the Deficit Reduction Act of 2005.
    (d) Administration.--
            (1) Funding.--For purposes of carrying out the provisions 
        of this section, in addition to funds otherwise available, out 
        of any funds in the Treasury not otherwise appropriated, there 
        are appropriated to the Secretary for the Center for Medicare & 
        Medicaid Services Program Management Account $15,000,000 for 
        each of the fiscal years 2010 through 2012. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            (2) Expedited data collection.--Chapter 35 of title 44, 
        United States Code shall not apply to this section.
    (e) Public Reports.--
            (1) Interim reports.--The Secretary shall issue interim 
        public reports on a periodic basis on the plan described in 
        subsection (a)(1), the issues described in subsection (b), and 
        impact analyses as the Secretary determines appropriate.
            (2) Final report.--Not later than the date that is 3 years 
        after the date of the enactment of this Act, the Secretary 
        shall issue a final public report on such plan, including 
        analysis of issues described in subsection (b) and impact 
        analyses.
    (f) Conversion of Acute Care Episode Demonstration to Pilot Program 
and Expansion To Include Post Acute Services.--
            (1) In general.--Part E of title XVIII of the Social 
        Security Act is amended by inserting after section 1866C the 
        following new section:

``SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT 
              PROGRAM AND EXPANSION TO INCLUDE POST ACUTE SERVICES.

    ``(a) In General.--By not later than January 1, 2011, the Secretary 
shall, for the purpose of promoting the use of bundled payments to 
promote efficient and high quality delivery of care--
            ``(1) convert the acute care episode demonstration program 
        conducted under section 1866C to a pilot program; and
            ``(2) subject to subsection (c), expand such program as so 
        converted to include post acute services and such other 
        services the Secretary determines to be appropriate, which may 
        include transitional services.
    ``(b) Scope.--The pilot program under subsection (a) may include 
additional geographic areas and additional conditions which account for 
significant program spending, as defined by the Secretary. Nothing in 
this subsection shall be construed as limiting the number of hospital 
and physician groups or the number of hospital and post-acute provider 
groups that may participate in the pilot program.
    ``(c) Limitation.--The Secretary shall only expand the pilot 
program under subsection (a)(2) if the Secretary finds that--
            ``(1) the demonstration program under section 1866C and 
        pilot program under this section maintain or increase the 
        quality of care received by individuals enrolled under this 
        title; and
            ``(2) such demonstration program and pilot program reduce 
        program expenditures and, based on the certification under 
        subsection (d), that the expansion of such pilot program would 
        result in estimated spending that would be less than what 
        spending would otherwise be in the absence of this section.
    ``(d) Certification.--For purposes of subsection (c), the Chief 
Actuary of the Centers for Medicare & Medicaid Services shall certify 
whether expansion of the pilot program under this section would result 
in estimated spending that would be less than what spending would 
otherwise be in the absence of this section.
    ``(e) Voluntary Participation.--Nothing in this paragraph shall be 
construed as requiring the participation of an entity in the pilot 
program under this section.''.
            (2) Conforming amendment.--Section 1866C(b) of the Social 
        Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking 
        ``The Secretary'' and inserting ``Subject to section 1866D, the 
        Secretary''.

SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.

    Section 1895(b)(3)(B)(ii) of the Social Security Act (42 U.S.C. 
1395fff(b)(3)(B)(ii)) is amended--
            (1) in subclause (IV), by striking ``and'';
            (2) by redesignating subclause (V) as subclause (VII); and
            (3) by inserting after subclause (IV) the following new 
        subclauses:
                                    ``(V) 2007, 2008, and 2009, subject 
                                to clause (v), the home health market 
                                basket percentage increase;
                                    ``(VI) 2010, subject to clause (v), 
                                0 percent; and''.

SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (a) Acceleration of Adjustment for Case Mix Changes.--Section 
1895(b)(3)(B) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B)) 
is amended--
            (1) in clause (iv), by striking ``Insofar as'' and 
        inserting ``Subject to clause (vi), insofar as''; and
            (2) by adding at the end the following new clause:
                            ``(vi) Special rule for case mix changes 
                        for 2011.--
                                    ``(I) In general.--With respect to 
                                the case mix adjustments established in 
                                section 484.220(a) of title 42, Code of 
                                Federal Regulations, the Secretary 
                                shall apply, in 2010, the adjustment 
                                established in paragraph (3) of such 
                                section for 2011, in addition to 
                                applying the adjustment established in 
                                paragraph (2) for 2010.
                                    ``(II) Construction.--Nothing in 
                                this clause shall be construed as 
                                limiting the amount of adjustment for 
                                case mix for 2010 or 2011 if more 
                                recent data indicate an appropriate 
                                adjustment that is greater than the 
                                amount established in the section 
                                described in subclause (I).''.
    (b) Rebasing Home Health Prospective Payment Amount.--Section 
1895(b)(3)(A) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A)) 
is amended--
            (1) in clause (i)--
                    (A) in subclause (III), by inserting ``and before 
                2011'' after ``after the period described in subclause 
                (II)''; and
                    (B) by inserting after subclause (III) the 
                following new subclauses:
                                    ``(IV) Subject to clause (iii)(I), 
                                for 2011, such amount (or amounts) 
                                shall be adjusted by a uniform 
                                percentage determined to be appropriate 
                                by the Secretary based on analysis of 
                                factors such as changes in the average 
                                number and types of visits in an 
                                episode, the change in intensity of 
                                visits in an episode, growth in cost 
                                per episode, and other factors that the 
                                Secretary considers to be relevant.
                                    ``(V) Subject to clause (iii)(II), 
                                for a year after 2011, such a amount 
                                (or amounts) shall be equal to the 
                                amount (or amounts) determined under 
                                this clause for the previous year, 
                                updated under subparagraph (B).''; and
            (2) by adding at the end the following new clause:
                            ``(iii) Special rule in case of inability 
                        to effect timely rebasing.--
                                    ``(I) Application of proxy amount 
                                for 2011.--If the Secretary is not able 
                                to compute the amount (or amounts) 
                                under clause (i)(IV) so as to permit, 
                                on a timely basis, the application of 
                                such clause for 2011, the Secretary 
                                shall substitute for such amount (or 
                                amounts) 95 percent of the amount (or 
                                amounts) that would otherwise be 
                                specified under clause (i)(III) if it 
                                applied for 2011.
                                    ``(II) Adjustment for subsequent 
                                years based on data.--If the Secretary 
                                applies subclause (I), the Secretary 
                                before July 1, 2011, shall compare the 
                                amount (or amounts) applied under such 
                                subclause with the amount (or amounts) 
                                that should have been applied under 
                                clause (i)(IV). The Secretary shall 
                                decrease or increase the prospective 
                                payment amount (or amounts) under 
                                clause (i)(V) for 2012 (or, at the 
                                Secretary's discretion, over a period 
                                of several years beginning with 2012) 
                                by the amount (if any) by which the 
                                amount (or amounts) applied under 
                                subclause (I) is greater or less, 
                                respectively, than the amount (or 
                                amounts) that should have been applied 
                                under clause (i)(IV).''.

SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET 
              UPDATE FOR HOME HEALTH SERVICES.

    (a) In General.--Section 1895(b)(3)(B) of the Social Security Act 
(42 U.S.C. 1395fff(b)(3)(B)) is amended--
            (1) in clause (iii), by inserting ``(including being 
        subject to the productivity adjustment described in section 
        1886(b)(3)(B)(iii)(II))'' after ``in the same manner''; and
            (2) in clause (v)(I), by inserting ``(but not below 0)'' 
        after ``reduced''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to home health market basket percentage increases for years 
beginning with 2010.

SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE PROHIBITION ON 
              CERTAIN PHYSICIAN REFERRALS MADE TO HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';
            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) the hospital meets the requirements described 
                in subsection (i)(1).'';
            (3) by amending subsection (f) to read as follows:
    ``(f) Reporting and Disclosure Requirements.--
            ``(1) In general.--Each entity providing covered items or 
        services for which payment may be made under this title shall 
        provide the Secretary with the information concerning the 
        entity's ownership, investment, and compensation arrangements, 
        including--
                    ``(A) the covered items and services provided by 
                the entity, and
                    ``(B) the names and unique physician identification 
                numbers of all physicians with an ownership or 
                investment interest (as described in subsection 
                (a)(2)(A)), or with a compensation arrangement (as 
                described in subsection (a)(2)(B)), in the entity, or 
                whose immediate relatives have such an ownership or 
                investment interest or who have such a compensation 
                relationship with the entity.
        Such information shall be provided in such form, manner, and at 
        such times as the Secretary shall specify. The requirement of 
        this subsection shall not apply to designated health services 
        provided outside the United States or to entities which the 
        Secretary determines provide services for which payment may be 
        made under this title very infrequently.
            ``(2) Requirements for hospitals with physician ownership 
        or investment.--In the case of a hospital that meets the 
        requirements described in subsection (i)(1), the hospital 
        shall--
                    ``(A) submit to the Secretary an initial report, 
                and periodic updates at a frequency determined by the 
                Secretary, containing a detailed description of the 
                identity of each physician owner and physician investor 
                and any other owners or investors of the hospital;
                    ``(B) require that any referring physician owner or 
                investor discloses to the individual being referred, by 
                a time that permits the individual to make a meaningful 
                decision regarding the receipt of services, as 
                determined by the Secretary, the ownership or 
                investment interest, as applicable, of such referring 
                physician in the hospital; and
                    ``(C) disclose the fact that the hospital is 
                partially or wholly owned by one or more physicians or 
                has one or more physician investors--
                            ``(i) on any public website for the 
                        hospital; and
                            ``(ii) in any public advertising for the 
                        hospital.
        The information to be reported or disclosed under this 
        paragraph shall be provided in such form, manner, and at such 
        times as the Secretary shall specify. The requirements of this 
        paragraph shall not apply to designated health services 
        furnished outside the United States or to entities which the 
        Secretary determines provide services for which payment may be 
        made under this title very infrequently.
            ``(3) Publication of information.--The Secretary shall 
        publish, and periodically update, the information submitted by 
        hospitals under paragraph (2)(A) on the public Internet website 
        of the Centers for Medicare & Medicaid Services.'';
            (4) by amending subsection (g)(5) to read as follows:
            ``(5) Failure to report or disclose information.--
                    ``(A) Reporting.--Any person who is required, but 
                fails, to meet a reporting requirement of paragraphs 
                (1) and (2)(A) of subsection (f) is subject to a civil 
                money penalty of not more than $10,000 for each day for 
                which reporting is required to have been made.
                    ``(B) Disclosure.--Any physician who is required, 
                but fails, to meet a disclosure requirement of 
                subsection (f)(2)(B) or a hospital that is required, 
                but fails, to meet a disclosure requirement of 
                subsection (f)(2)(C) is subject to a civil money 
                penalty of not more than $10,000 for each case in which 
                disclosure is required to have been made.
                    ``(C) Application.--The provisions of section 1128A 
                (other than the first sentence of subsection (a) and 
                other than subsection (b)) shall apply to a civil money 
                penalty under subparagraphs (A) and (B) in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).''; and
            (5) by adding at the end the following new subsection:
    ``(i) Requirements To Qualify for Rural Provider and Hospital 
Ownership Exceptions to Self-referral Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph are as 
        follows:
                    ``(A) Provider agreement.--The hospital had--
                            ``(i) physician ownership or investment on 
                        January 1, 2009; and
                            ``(ii) a provider agreement under section 
                        1866 in effect on such date.
                    ``(B) Prohibition on physician ownership or 
                investment.--The percentage of the total value of the 
                ownership or investment interests held in the hospital, 
                or in an entity whose assets include the hospital, by 
                physician owners or investors in the aggregate does not 
                exceed such percentage as of the date of enactment of 
                this subsection.
                    ``(C) Prohibition on expansion of facility 
                capacity.--Except as provided in paragraph (2), the 
                number of operating rooms, procedure rooms, or beds of 
                the hospital at any time on or after the date of the 
                enactment of this subsection are no greater than the 
                number of operating rooms, procedure rooms, or beds, 
                respectively, as of such date.
                    ``(D) Ensuring bona fide ownership and 
                investment.--
                            ``(i) Any ownership or investment interests 
                        that the hospital offers to a physician are not 
                        offered on more favorable terms than the terms 
                        offered to a person who is not in a position to 
                        refer patients or otherwise generate business 
                        for the hospital.
                            ``(ii) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        provide loans or financing for any physician 
                        owner or investor in the hospital.
                            ``(iii) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        guarantee a loan, make a payment toward a loan, 
                        or otherwise subsidize a loan, for any 
                        physician owner or investor or group of 
                        physician owners or investors that is related 
                        to acquiring any ownership or investment 
                        interest in the hospital.
                            ``(iv) Ownership or investment returns are 
                        distributed to each owner or investor in the 
                        hospital in an amount that is directly 
                        proportional to the ownership or investment 
                        interest of such owner or investor in the 
                        hospital.
                            ``(v) The investment interest of the owner 
                        or investor is directly proportional to the 
                        owner's or investor's capital contributions 
                        made at the time the ownership or investment 
                        interest is obtained.
                            ``(vi) Physician owners and investors do 
                        not receive, directly or indirectly, any 
                        guaranteed receipt of or right to purchase 
                        other business interests related to the 
                        hospital, including the purchase or lease of 
                        any property under the control of other owners 
                        or investors in the hospital or located near 
                        the premises of the hospital.
                            ``(vii) The hospital does not offer a 
                        physician owner or investor the opportunity to 
                        purchase or lease any property under the 
                        control of the hospital or any other owner or 
                        investor in the hospital on more favorable 
                        terms than the terms offered to a person that 
                        is not a physician owner or investor.
                            ``(viii) The hospital does not condition 
                        any physician ownership or investment interests 
                        either directly or indirectly on the physician 
                        owner or investor making or influencing 
                        referrals to the hospital or otherwise 
                        generating business for the hospital.
                    ``(E) Patient safety.--In the case of a hospital 
                that does not offer emergency services, the hospital 
                has the capacity to--
                            ``(i) provide assessment and initial 
                        treatment for medical emergencies; and
                            ``(ii) if the hospital lacks additional 
                        capabilities required to treat the emergency 
                        involved, refer and transfer the patient with 
                        the medical emergency to a hospital with the 
                        required capability.
                    ``(F) Limitation on application to certain 
                converted facilities.--The hospital was not converted 
                from an ambulatory surgical center to a hospital on or 
                after the date of enactment of this subsection.
            ``(2) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                            ``(i) Establishment.--The Secretary shall 
                        establish and implement a process under which a 
                        hospital may apply for an exception from the 
                        requirement under paragraph (1)(C).
                            ``(ii) Opportunity for community input.--
                        The process under clause (i) shall provide 
                        persons and entities in the community in which 
                        the hospital applying for an exception is 
                        located with the opportunity to provide input 
                        with respect to the application.
                            ``(iii) Timing for implementation.--The 
                        Secretary shall implement the process under 
                        clause (i) on the date that is one month after 
                        the promulgation of regulations described in 
                        clause (iv).
                            ``(iv) Regulations.--Not later than the 
                        first day of the month beginning 18 months 
                        after the date of the enactment of this 
                        subsection, the Secretary shall promulgate 
                        regulations to carry out the process under 
                        clause (i). The Secretary may issue such 
                        regulations as interim final regulations.
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit a hospital to apply for 
                an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (D), a hospital granted an 
                        exception under the process described in 
                        subparagraph (A) may increase the number of 
                        operating rooms, procedure rooms, or beds of 
                        the hospital above the baseline number of 
                        operating rooms, procedure rooms, or beds, 
                        respectively, of the hospital (or, if the 
                        hospital has been granted a previous exception 
                        under this paragraph, above the number of 
                        operating rooms, procedure rooms, or beds, 
                        respectively, of the hospital after the 
                        application of the most recent increase under 
                        such an exception).
                            ``(ii) 100 percent increase limitation.--
                        The Secretary shall not permit an increase in 
                        the number of operating rooms, procedure rooms, 
                        or beds of a hospital under clause (i) to the 
                        extent such increase would result in the number 
                        of operating rooms, procedure rooms, or beds of 
                        the hospital exceeding 200 percent of the 
                        baseline number of operating rooms, procedure 
                        rooms, or beds of the hospital.
                            ``(iii) Baseline number of operating rooms, 
                        procedure rooms, or beds.--In this paragraph, 
                        the term `baseline number of operating rooms, 
                        procedure rooms, or beds' means the number of 
                        operating rooms, procedure rooms, or beds of a 
                        hospital as of the date of enactment of this 
                        subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, or beds of a hospital 
                pursuant to this paragraph may only occur in facilities 
                on the main campus of the hospital.
                    ``(E) Conditions for approval of an increase in 
                facility capacity.--The Secretary may grant an 
                exception under the process described in subparagraph 
                (A) only to a hospital--
                            ``(i) that is located in a county in which 
                        the percentage increase in the population 
                        during the most recent 5-year period for which 
                        data are available is estimated to be at least 
                        150 percent of the percentage increase in the 
                        population growth of the State in which the 
                        hospital is located during that period, as 
                        estimated by Bureau of the Census and available 
                        to the Secretary;
                            ``(ii) whose annual percent of total 
                        inpatient admissions that represent inpatient 
                        admissions under the program under title XIX is 
                        estimated to be equal to or greater than the 
                        average percent with respect to such admissions 
                        for all hospitals located in the county in 
                        which the hospital is located;
                            ``(iii) that does not discriminate against 
                        beneficiaries of Federal health care programs 
                        and does not permit physicians practicing at 
                        the hospital to discriminate against such 
                        beneficiaries;
                            ``(iv) that is located in a State in which 
                        the average bed capacity in the State is 
                        estimated to be less than the national average 
                        bed capacity;
                            ``(v) that has an average bed occupancy 
                        rate that is estimated to be greater than the 
                        average bed occupancy rate in the State in 
                        which the hospital is located; and
                            ``(vi) that meets other conditions as 
                        determined by the Secretary.
                    ``(F) Procedure rooms.--In this subsection, the 
                term `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are furnished, but such term shall not 
                include emergency rooms or departments (except for 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are furnished).
                    ``(G) Publication of final decisions.--Not later 
                than 120 days after receiving a complete application 
                under this paragraph, the Secretary shall publish on 
                the public Internet website of the Centers for Medicare 
                & Medicaid Services the final decision with respect to 
                such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the exception process 
                under this paragraph, including the establishment of 
                such process, and any determination made under such 
                process.
            ``(3) Physician owner or investor defined.--For purposes of 
        this subsection and subsection (f)(2), the term `physician 
        owner or investor' means a physician (or an immediate family 
        member of such physician) with a direct or an indirect 
        ownership or investment interest in the hospital.
            ``(4) Patient safety requirement.--In the case of a 
        hospital to which the requirements of paragraph (1) apply, 
        insofar as the hospital admits a patient and does not have any 
        physician available on the premises 24 hours per day, 7 days 
        per week, before admitting the patient--
                    ``(A) the hospital shall disclose such fact to the 
                patient; and
                    ``(B) following such disclosure, the hospital shall 
                receive from the patient a signed acknowledgment that 
                the patient understands such fact.
            ``(5) Clarification.--Nothing in this subsection shall be 
        construed as preventing the Secretary from terminating a 
        hospital's provider agreement if the hospital is not in 
        compliance with regulations pursuant to section 1866.''.
    (b) Verifying Compliance.--The Secretary of Health and Human 
Services shall establish policies and procedures to verify compliance 
with the requirements described in subsections (i)(1) and (i)(4) of 
section 1877 of the Social Security Act, as added by subsection (a)(5). 
The Secretary may use unannounced site reviews of hospitals and audits 
to verify compliance with such requirements.
    (c) Implementation.--
            (1) Funding.--For purposes of carrying out the amendments 
        made by subsection (a) and the provisions of subsection (b), in 
        addition to funds otherwise available, out of any funds in the 
        Treasury not otherwise appropriated there are appropriated to 
        the Secretary of Health and Human Services for the Centers for 
        Medicare & Medicaid Services Program Management Account 
        $5,000,000 for each fiscal year beginning with fiscal year 
        2010. Amounts appropriated under this paragraph for a fiscal 
        year shall be available until expended.
            (2) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to the amendments made by subsection (a) 
        and the provisions of subsection (b).

SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC ADJUSTMENT FACTORS 
              UNDER MEDICARE.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into a contract with the Institute of Medicine of the National 
Academy of Science to conduct a comprehensive empirical study, and 
provide recommendations as appropriate, on the accuracy of the 
geographic adjustment factors established under sections 1848(e) and 
1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395w-4(e), 
11395ww(d)(3)).
    (b) Matters Included.--Such study shall include an evaluation and 
assessment of the following with respect to such adjustment factors:
            (1) Empirical validity of the adjustment factors.
            (2) Methodology used to determine the adjustment factors.
            (3) Measures used for the adjustment factors, taking into 
        account--
                    (A) timeliness of data and frequency of revisions 
                to such data;
                    (B) sources of data and the degree to which such 
                data are representative of costs; and
                    (C) operational costs of providers who participate 
                in Medicare.
    (c) Evaluation.--Such study shall, within the context of the United 
States health care marketplace, evaluate and consider the following:
            (1) The effect of the adjustment factors on the level and 
        distribution of the health care workforce and resources, 
        including--
                    (A) recruitment and retention that takes into 
                account workforce mobility between urban and rural 
                areas;
                    (B) ability of hospitals and other facilities to 
                maintain an adequate and skilled workforce; and
                    (C) patient access to providers and needed medical 
                technologies.
            (2) The effect of the adjustment factors on population 
        health and quality of care.
            (3) The effect of the adjustment factors on the ability of 
        providers to furnish efficient, high value care.
    (d) Report.--The contract under subsection (a) shall provide for 
the Institute of Medicine to submit, not later than one year after the 
date of the enactment of this Act, to the Secretary and the Congress a 
report containing results and recommendations of the study conducted 
under this section.
    (e) Funding.--There are authorized to be appropriated to carry out 
this section such sums as may be necessary.

SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO ADDRESS GEOGRAPHIC 
              INEQUITIES.

    (a) In General.--The Secretary of Health and Human Services, taking 
into account the recommendations made in the report under section 
1157(d), shall include in the proposed rules published to implement 
changes to payment systems for physicians and hospitals under sections 
1848(e) and 1886(d)(3)(E), respectively, of the Social Security Act, 
proposals to revise geographic adjustment factors for such payment 
systems for services furnished under the Medicare program. Such 
proposed rules shall be published in the rulemaking period immediately 
following submission of the report under section 1157(d).
    (b) Payment Adjustments.--
            (1) Funding for improvements.--In making any changes to the 
        geographic adjustment factors in accordance with subsection 
        (a), the Secretary shall use funds made available for such 
        purposes under subsection (c).
            (2) Ensuring fairness.--In carrying out this subsection, 
        the Secretary shall not change payment rates to be less than 
        they would have been had this section not been enacted.
    (c) Funding.--Amounts in the Medicare Improvement Fund under 
section 1898 of the Social Security Act (42 U.S.C. 1395iii), as amended 
by section 1146, shall be available to the Secretary to make changes to 
the geographic adjustments factors established under sections 1848(e) 
and 1886(d)(3)(E) of the Social Security Act. For such purpose, such 
funds shall be available for expenditure for services furnished before 
January 1, 2014, and shall not exceed the total amounts available under 
such Fund for such period. No more than one-half of such amounts shall 
be available for expenditure for services furnished in any one payment 
year.

                 Subtitle D--Medicare Advantage Reforms

                   PART 1--PAYMENT AND ADMINISTRATION

SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-SERVICE COSTS.

    Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is 
amended--
            (1) in subsection (j)(1)(A)--
                    (A) by striking ``beginning with 2007'' and 
                inserting ``for 2007, 2008, 2009, and 2010''; and
                    (B) by inserting after ``(k)(1)'' the following: 
                ``, or, beginning with 2011, \1/12\ of the blended 
                benchmark amount determined under subsection (n)(1)''; 
                and
            (2) by adding at the end the following new subsection:
    ``(n) Determination of Blended Benchmark Amount.--
            ``(1) In general.--For purposes of subsection (j), subject 
        to paragraphs (3) and (4), the term `blended benchmark amount' 
        means for an area--
                    ``(A) for 2011 the sum of--
                            ``(i) \2/3\ of the applicable amount (as 
                        defined in subsection (k)) for the area and 
                        year; and
                            ``(ii) \1/3\ of the amount specified in 
                        paragraph (2) for the area and year;
                    ``(B) for 2012 the sum of--
                            ``(i) \1/3\ of the applicable amount for 
                        the area and year; and
                            ``(ii) \2/3\ of the amount specified in 
                        paragraph (2) for the area and year; and
                    ``(C) for a subsequent year the amount specified in 
                paragraph (2) for the area and year.
            ``(2) Specified amount.--The amount specified in this 
        paragraph for an area and year is the amount specified in 
        subsection (c)(1)(D)(i) for the area and year adjusted (in a 
        manner specified by the Secretary) to take into account the 
        phase-out in the indirect costs of medical education from 
        capitation rates described in subsection (k)(4).
            ``(3) Fee-for-service payment floor.--In no case shall the 
        blended benchmark amount for an area and year be less than the 
        amount specified in paragraph (2).
            ``(4) Exception for pace plans.--This subsection shall not 
        apply to payments to a PACE program under section 1894.''.

SEC. 1162. QUALITY BONUS PAYMENTS.

    (a) In General.--Section 1853 of the Social Security Act (42 U.S.C. 
1395w-23), as amended by section 1161, is amended--
            (1) in subsection (j), by inserting ``subject to subsection 
        (o),'' after ``For purposes of this part''; and
            (2) by adding at the end the following new subsection:
    ``(o) Quality Based Payment Adjustment.--
            ``(1) High quality plan adjustment.--For years beginning 
        with 2011, in the case of a Medicare Advantage plan that is 
        identified (under paragraph (3)(E)(ii)) as a high quality MA 
        plan with respect to the year, the blended benchmark amount 
        under subsection (n)(1) shall be increased--
                    ``(A) for 2011, by 1.0 percent;
                    ``(B) for 2012, by 2.0 percent; and
                    ``(C) for a subsequent year, by 3.0 percent.
            ``(2) Improved quality plan adjustment.--For years 
        beginning with 2011, in the case of a Medicare Advantage plan 
        that is identified (under paragraph (3)(E)(iii)) as an improved 
        quality MA plan with respect to the year, blended benchmark 
        amount under subsection (n)(1) shall be increased--
                    ``(A) for 2011, by 0.33 percent;
                    ``(B) for 2012, by 0.66 percent; and
                    ``(C) for a subsequent year, by 1.0 percent.
            ``(3) Determinations of quality.--
                    ``(A) Quality performance.--The Secretary shall 
                provide for the computation of a quality performance 
                score for each Medicare Advantage plan to be applied 
                for each year beginning with 2010.
                    ``(B) Computation of score.--
                            ``(i) For years before 2014.--For years 
                        before 2014, the quality performance score for 
                        a Medicare Advantage plan shall be computed 
                        based on a blend (as designated by the 
                        Secretary) of the plan's performance on--
                                    ``(I) HEDIS effectiveness of care 
                                quality measures;
                                    ``(II) CAHPS quality measures; and
                                    ``(III) such other measures of 
                                clinical quality as the Secretary may 
                                specify.
                        Such measures shall be risk-adjusted as the 
                        Secretary deems appropriate.
                            ``(ii) Establishment of outcome-based 
                        measures.--By not later than for 2013 the 
                        Secretary shall implement reporting 
                        requirements for quality under this section on 
                        measures selected under clause (iii) that 
                        reflect the outcomes of care experienced by 
                        individuals enrolled in Medicare Advantage 
                        plans (in addition to measures described in 
                        clause (i)). Such measures may include--
                                    ``(I) measures of rates of 
                                admission and readmission to a 
                                hospital;
                                    ``(II) measures of prevention 
                                quality, such as those established by 
                                the Agency for Healthcare Research and 
                                Quality (that include hospital 
                                admission rates for specified 
                                conditions);
                                    ``(III) measures of patient 
                                mortality and morbidity following 
                                surgery;
                                    ``(IV) measures of health 
                                functioning (such as limitations on 
                                activities of daily living) and 
                                survival for patients with chronic 
                                diseases;
                                    ``(V) measures of patient safety; 
                                and
                                    ``(VI) other measure of outcomes 
                                and patient quality of life as 
                                determined by the Secretary.
                        Such measures shall be risk-adjusted as the 
                        Secretary deems appropriate. In determining the 
                        quality measures to be used under this clause, 
                        the Secretary shall take into consideration the 
                        recommendations of the Medicare Payment 
                        Advisory Commission in its report to Congress 
                        under section 168 of the Medicare Improvements 
                        for Patients and Providers Act of 2008 (Public 
                        Law 110-275) and shall provide preference to 
                        measures collected on and comparable to 
                        measures used in measuring quality under parts 
                        A and B.
                            ``(iii) Rules for selection of measures.--
                        The Secretary shall select measures for 
                        purposes of clause (ii) consistent with the 
                        following:
                                    ``(I) The Secretary shall provide 
                                preference to clinical quality measures 
                                that have been endorsed by the entity 
                                with a contract with the Secretary 
                                under section 1890(a).
                                    ``(II) Prior to any measure being 
                                selected under this clause, the 
                                Secretary shall publish in the Federal 
                                Register such measure and provide for a 
                                period of public comment on such 
                                measure.
                            ``(iv) Transitional use of blend.--For 
                        payments for 2014 and 2015, the Secretary may 
                        compute the quality performance score for a 
                        Medicare Advantage plan based on a blend of the 
                        measures specified in clause (i) and the 
                        measures described in clause (ii) and selected 
                        under clause (iii).
                            ``(v) Use of quality outcomes measures.--
                        For payments beginning with 2016, the 
                        preponderance of measures used under this 
                        paragraph shall be quality outcomes measures 
                        described in clause (ii) and selected under 
                        clause (iii).
                    ``(C) Data used in computing score.--Such score for 
                application for--
                            ``(i) payments in 2011 shall be based on 
                        quality performance data for plans for 2009; 
                        and
                            ``(ii) payments in 2012 and a subsequent 
                        year shall be based on quality performance data 
                        for plans for the second preceding year.
                    ``(D) Reporting of data.--Each Medicare Advantage 
                organization shall provide for the reporting to the 
                Secretary of quality performance data described in 
                subparagraph (B) (in order to determine a quality 
                performance score under this paragraph) in such time 
                and manner as the Secretary shall specify.
                    ``(E) Ranking of plans.--
                            ``(i) Initial ranking.--Based on the 
                        quality performance score described in 
                        subparagraph (B) achieved with respect to a 
                        year, the Secretary shall rank plan 
                        performance--
                                    ``(I) from highest to lowest based 
                                on absolute scores; and
                                    ``(II) from highest to lowest based 
                                on percentage improvement in the score 
                                for the plan from the previous year.
                        A plan which does not report quality 
                        performance data under subparagraph (D) shall 
                        be counted, for purposes of such ranking, as 
                        having the lowest plan performance and lowest 
                        percentage improvement.
                            ``(ii) Identification of high quality plans 
                        in top quintile based on projected 
                        enrollment.--The Secretary shall, based on the 
                        scores for each plan under clause (i)(I) and 
                        the Secretary's projected enrollment for each 
                        plan and subject to clause (iv), identify those 
                        Medicare Advantage plans with the highest score 
                        that, based upon projected enrollment, are 
                        projected to include in the aggregate 20 
                        percent of the total projected enrollment for 
                        the year. For purposes of this subsection, a 
                        plan so identified shall be referred to in this 
                        subsection as a `high quality MA plan'.
                            ``(iii) Identification of improved quality 
                        plans in top quintile based on projected 
                        enrollment.--The Secretary shall, based on the 
                        percentage improvement score for each plan 
                        under clause (i)(II) and the Secretary's 
                        projected enrollment for each plan and subject 
                        to clause (iv), identify those Medicare 
                        Advantage plans with the greatest percentage 
                        improvement score that, based upon projected 
                        enrollment, are projected to include in the 
                        aggregate 20 percent of the total projected 
                        enrollment for the year. For purposes of this 
                        subsection, a plan so identified that is not a 
                        high quality plan for the year shall be 
                        referred to in this subsection as an `improved 
                        quality MA plan'.
                            ``(iv) Authority to disqualify certain 
                        plans.--In applying clauses (ii) and (iii), the 
                        Secretary may determine not to identify a 
                        Medicare Advantage plan if the Secretary has 
                        identified deficiencies in the plan's 
                        compliance with rules for such plans under this 
                        part.
                    ``(F) Notification.--The Secretary, in the annual 
                announcement required under subsection (b)(1)(B) in 
                2011 and each succeeding year, shall notify the 
                Medicare Advantage organization that is offering a high 
                quality plan or an improved quality plan of such 
                identification for the year and the quality performance 
                payment adjustment for such plan for the year. The 
                Secretary shall provide for publication on the website 
                for the Medicare program of the information described 
                in the previous sentence.''.

SEC. 1163. EXTENSION OF SECRETARIAL CODING INTENSITY ADJUSTMENT 
              AUTHORITY.

    Section 1853(a)(1)(C)(ii) of the Social Security Act (42 U.S.C. 
1395w-23(a)(1)(C)(ii)) is amended--
            (1) in the matter before subclause (I), by striking 
        ``through 2010'' and inserting ``and each subsequent year''; 
        and
            (2) in subclause (II)--
                    (A) by inserting ``periodically'' before ``conduct 
                an analysis'';
                    (B) by inserting ``on a timely basis'' after ``are 
                incorporated''; and
                    (C) by striking ``only for 2008, 2009, and 2010'' 
                and inserting ``for 2008 and subsequent years''.

SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) 2 Week Processing Period for Annual Enrollment Period (AEP).--
Paragraph (3)(B) of section 1851(e) of the Social Security Act (42 
U.S.C. 1395w-21(e)) is amended--
            (1) by striking ``and'' at the end of clause (iii);
            (2) in clause (iv)--
                    (A) by striking ``and succeeding years'' and 
                inserting ``, 2008, 2009, and 2010''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(v) with respect to 2011 and succeeding 
                        years, the period beginning on November 1 and 
                        ending on December 15 of the year before such 
                        year.''.
    (b) Elimination of 3-month Additional Open Enrollment Period 
(OEP).--Effective for plan years beginning with 2011, paragraph (2) of 
such section is amended by striking subparagraph (C).

SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)) is amended--
            (1) in clause (ii), by striking ``January 1, 2010'' and 
        inserting ``January 1, 2012''; and
            (2) in clause (iii), by striking ``the service area for the 
        year'' and inserting ``the portion of the plan's service area 
        for the year that is within the service area of a reasonable 
        cost reimbursement contract''.

SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYER GROUP PLANS.

    (a) In General.--The first sentence of paragraph (2) of section 
1857(i) of the Social Security Act (42 U.S.C. 1395w-27(i)) is amended 
by inserting before the period at the end the following: ``, but only 
if 90 percent of the Medicare Advantage eligible individuals enrolled 
under such plan reside in a county in which the MA organization offers 
an MA local plan''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply for plan years beginning on or after January 1, 2011, and shall 
not apply to plans which were in effect as of December 31, 2010.

SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.

    (a) Report to Congress.--Not later than 1 year after the date of 
the enactment of this Act, the Secretary of Health and Human Services 
shall submit to Congress a report that evaluates the adequacy of the 
risk adjustment system under section 1853(a)(1)(C) of the Social 
Security Act (42 U.S.C. 1395-23(a)(1)(C)) in predicting costs for 
beneficiaries with chronic or co-morbid conditions, beneficiaries 
dually-eligible for Medicare and Medicaid, and non-Medicaid eligible 
low-income beneficiaries; and the need and feasibility of including 
further gradations of diseases or conditions and multiple years of 
beneficiary data.
    (b) Improvements to Risk Adjustment.--Not later than January 1, 
2012, the Secretary shall implement necessary improvements to the risk 
adjustment system under section 1853(a)(1)(C) of the Social Security 
Act (42 U.S.C. 1395-23(a)(1)(C)), taking into account the evaluation 
under subsection (a).

SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND.

    (a) In General.--Section 1858 of the Social Security Act (42 U.S.C. 
1395w-27a) is amended by striking subsection (e).
    (b) Transition.--Any amount contained in the MA Regional Plan 
Stabilization Fund as of the date of the enactment of this Act shall be 
transferred to the Federal Supplementary Medical Insurance Trust Fund.

             PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD

SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES.

    (a) In General.--Section 1852(a)(1) of the Social Security Act (42 
U.S.C. 1395w-22(a)(1)) is amended--
            (1) in subparagraph (A), by inserting before the period at 
        the end the following: ``with cost-sharing that is no greater 
        (and may be less) than the cost-sharing that would otherwise be 
        imposed under such program option'';
            (2) in subparagraph (B)(i), by striking ``or an actuarially 
        equivalent level of cost-sharing as determined in this part''; 
        and
            (3) by amending clause (ii) of subparagraph (B) to read as 
        follows:
                            ``(ii) Permitting use of flat copayment or 
                        per diem rate.--Nothing in clause (i) shall be 
                        construed as prohibiting a Medicare Advantage 
                        plan from using a flat copayment or per diem 
                        rate, in lieu of the cost-sharing that would be 
                        imposed under part A or B, so long as the 
                        amount of the cost-sharing imposed does not 
                        exceed the amount of the cost-sharing that 
                        would be imposed under the respective part if 
                        the individual were not enrolled in a plan 
                        under this part.''.
    (b) Limitation for Dual Eligibles and Qualified Medicare 
Beneficiaries.--Section 1852(a) of such Act is amended by adding at the 
end the following new paragraph:
            ``(7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of a individual 
        who is a full-benefit dual eligible individual (as defined in 
        section 1935(c)(6)) or a qualified medicare beneficiary (as 
        defined in section 1905(p)(1)) who is enrolled in a Medicare 
        Advantage plan, the plan may not impose cost-sharing that 
        exceeds the amount of cost-sharing that would be permitted with 
        respect to the individual under this title and title XIX if the 
        individual were not enrolled with such plan.''.
    (c) Effective Dates.--
            (1) The amendments made by subsection (a) shall apply to 
        plan years beginning on or after January 1, 2011.
            (2) The amendments made by subsection (b) shall apply to 
        plan years beginning on or after January 1, 2011.

SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH 
              ENROLLMENT SUSPENSION.

    Section 1851(e)(4) of the Social Security Act (42 U.S.C. 
1395w(e)(4)) is amended--
            (1) in subparagraph (C), by striking at the end ``or'';
            (2) in subparagraph (D)--
                    (A) by inserting ``, taking into account the health 
                or well-being of the individual'' before the period; 
                and
                    (B) by redesignating such subparagraph as 
                subparagraph (E); and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) the individual is enrolled in an MA plan and 
                enrollment in the plan is suspended under paragraph 
                (2)(B) or (3)(C) of section 1857(g) because of a 
                failure of the plan to meet applicable requirements; 
                or''.

SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE 
              COSTS.

    (a) Disclosure of Medical Loss Ratios and Other Expense Data.--
Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as 
previously amended by this subtitle, is amended by adding at the end 
the following new subsection:
    ``(p) Publication of Medical Loss Ratios and Other Cost-related 
Information.--
            ``(1) In general.--The Secretary shall publish, not later 
        than November 1 of each year (beginning with 2011), for each MA 
        plan contract, the medical loss ratio of the plan in the 
        previous year.
            ``(2) Submission of data.--
                    ``(A) In general.--Each MA organization shall 
                submit to the Secretary, in a form and manner specified 
                by the Secretary, data necessary for the Secretary to 
                publish the medical loss ratio on a timely basis.
                    ``(B) Data for 2010 and 2011.--The data submitted 
                under subparagraph (A) for 2010 and for 2011 shall be 
                consistent in content with the data reported as part of 
                the MA plan bid in June 2009 for 2010.
                    ``(C) Use of standardized elements and 
                definitions.--The data to be submitted under 
                subparagraph (A) relating to medical loss ratio for a 
                year, beginning with 2012, shall be submitted based on 
                the standardized elements and definitions developed 
                under paragraph (3).
            ``(3) Development of data reporting standards.--
                    ``(A) In general.--The Secretary shall develop and 
                implement standardized data elements and definitions 
                for reporting under this subsection, for contract years 
                beginning with 2012, of data necessary for the 
                calculation of the medical loss ratio for MA plans. Not 
                later than December 31, 2010, the Secretary shall 
                publish a report describing the elements and 
                definitions so developed.
                    ``(B) Consultation.--The Secretary shall consult 
                with the Health Choices Commissioner, representatives 
                of MA organizations, experts on health plan accounting 
                systems, and representatives of the National 
                Association of Insurance Commissioners, in the 
                development of such data elements and definitions.
            ``(4) Medical loss ratio to be defined.--For purposes of 
        this part, the term `medical loss ratio' has the meaning given 
        such term by the Secretary, taking into account the meaning 
        given such term by the Health Choices Commissioner under 
        section 116 of the America's Affordable Health Choices Act of 
        2009.''.
    (b) Minimum Medical Loss Ratio.--Section 1857(e) of the Social 
Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the end 
the following new paragraph:
            ``(4) Requirement for minimum medical loss ratio.--If the 
        Secretary determines for a contract year (beginning with 2014) 
        that an MA plan has failed to have a medical loss ratio (as 
        defined in section 1851(p)(4)) of at least .85--
                    ``(A) the Secretary shall require the Medicare 
                Advantage organization offering the plan to give 
                enrollees a rebate (in the second succeeding contract 
                year) of premiums under this part (or part B or part D, 
                if applicable) by such amount as would provide for a 
                benefits ratio of at least .85;
                    ``(B) for 3 consecutive contract years, the 
                Secretary shall not permit the enrollment of new 
                enrollees under the plan for coverage during the second 
                succeeding contract year; and
                    ``(C) the Secretary shall terminate the plan 
                contract if the plan fails to have such a medical loss 
                ratio for 5 consecutive contract years.''.

SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

    (a) For Part C Payments Risk Adjustment.--Section 1857(d)(1) of the 
Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by inserting 
after ``section 1858(c))'' the following: ``, and data submitted with 
respect to risk adjustment under section 1853(a)(3)''.
    (b) Enforcement of Audits and Deficiencies.--
            (1) In general.--Section 1857(e) of such Act, as amended by 
        section 1173, is amended by adding at the end the following new 
        paragraph:
            ``(5) Enforcement of audits and deficiencies.--
                    ``(A) Information in contract.--The Secretary shall 
                require that each contract with an MA organization 
                under this section shall include terms that inform the 
                organization of the provisions in subsection (d).
                    ``(B) Enforcement authority.--The Secretary is 
                authorized, in connection with conducting audits and 
                other activities under subsection (d), to take such 
                actions, including pursuit of financial recoveries, 
                necessary to address deficiencies identified in such 
                audits or other activities.''.
            (2) Application under part d.--For provision applying the 
        amendment made by paragraph (1) to prescription drug plans 
        under part D, see section 1860D-12(b)(3)(D) of the Social 
        Security Act.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to 
audits and activities conducted for contract years beginning on or 
after January 1, 2011.

SEC. 1175. AUTHORITY TO DENY PLAN BIDS.

    (a) In General.--Section 1854(a)(5) of the Social Security Act (42 
U.S.C. 1395w-24(a)(5)) is amended by adding at the end the following 
new subparagraph:
                    ``(C) Rejection of bids.--Nothing in this section 
                shall be construed as requiring the Secretary to accept 
                any or every bid by an MA organization under this 
                subsection.''.
    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42 
U.S.C. 1395w-111(d)) is amended by adding at the end the following new 
paragraph:
            ``(3) Rejection of bids.--Paragraph (5)(C) of section 
        1854(a) shall apply with respect to bids under this section in 
        the same manner as it applies to bids by an MA organization 
        under such section.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bids for contract years beginning on or after January 1, 2011.

                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.

    Section 1859(f)(4) of the Social Security Act (42 U.S.C. 1395w-
28(f)(4)) is amended by adding at the end the following new 
subparagraph:
                    ``(C) The plan does not enroll an individual on or 
                after January 1, 2011, other than during an annual, 
                coordinated open enrollment period or when at the time 
                of the diagnosis of the disease or condition that 
                qualifies the individual as an individual described in 
                subsection (b)(6)(B)(iii).''.

SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT 
              ENROLLMENT.

    (a) In General.--Section 1859(f)(1) of the Social Security Act (42 
U.S.C. 1395w-28(f)(1)) is amended by striking ``January 1, 2011'' and 
inserting ``January 1, 2013 (or January 1, 2016, in the case of a plan 
described in section 1177(b)(1) of the America's Affordable Health 
Choices Act of 2009)''.
    (b) Grandfathering of Certain Plans.--
            (1) Plans described.--For purposes of section 1859(f)(1) of 
        the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan 
        described in this paragraph is a plan that had a contract with 
        a State that had a State program to operate an integrated 
        Medicaid-Medicare program that had been approved by the Centers 
        for Medicare & Medicaid Services as of January 1, 2004.
            (2) Analysis; report.--The Secretary of Health and Human 
        Services shall provide, through a contract with an independent 
        health services evaluation organization, for an analysis of the 
        plans described in paragraph (1) with regard to the impact of 
        such plans on cost, quality of care, patient satisfaction, and 
        other subjects as specified by the Secretary. Not later than 
        December 31, 2011, the Secretary shall submit to Congress a 
        report on such analysis and shall include in such report such 
        recommendations with regard to the treatment of such plans as 
        the Secretary deems appropriate.

              Subtitle E--Improvements to Medicare Part D

SEC. 1181. ELIMINATION OF COVERAGE GAP.

    (a) In General.--Section 1860D-2(b) of such Act (42 U.S.C. 1395w-
102(b)) is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
        inserting ``paragraphs (4) and (7)'';
            (2) in paragraph (4)(B)(i), by inserting ``subject to 
        paragraph (7)'' after ``purposes of this part''; and
            (3) by adding at the end the following new paragraph:
            ``(7) Phased-in elimination of coverage gap.--
                    ``(A) In general.--For each year beginning with 
                2011, the Secretary shall consistent with this 
                paragraph progressively increase the initial coverage 
                limit (described in subsection (b)(3)) and decrease the 
                annual out-of-pocket threshold from the amounts 
                otherwise computed until there is a continuation of 
                coverage from the initial coverage limit for 
                expenditures incurred through the total amount of 
                expenditures at which benefits are available under 
                paragraph (4).
                    ``(B) Increase in initial coverage limit.--For a 
                year beginning with 2011, the initial coverage limit 
                otherwise computed without regard to this paragraph 
                shall be increased by \1/2\ of the cumulative phase-in 
                percentage (as defined in subparagraph (D)(ii) for the 
                year) times the out-of-pocket gap amount (as defined in 
                subparagraph (E)) for the year.
                    ``(C) Decrease in annual out-of-pocket threshold.--
                For a year beginning with 2011, the annual out-of-
                pocket threshold otherwise computed without regard to 
                this paragraph shall be decreased by \1/2\ of the 
                cumulative phase-in percentage of the out-of-pocket gap 
                amount for the year multiplied by 1.75.
                    ``(D) Phase-in.--For purposes of this paragraph:
                            ``(i) Annual phase-in percentage.--The term 
                        `annual phase-in percentage' means--
                                    ``(I) for 2011, 13 percent;
                                    ``(II) for 2012, 2013, 2014, and 
                                2015, 5 percent;
                                    ``(III) for 2016 through 2018, 7.5 
                                percent; and
                                    ``(IV) for 2019 and each subsequent 
                                year, 10 percent.
                            ``(ii) Cumulative phase-in percentage.--The 
                        term `cumulative phase-in percentage' means for 
                        a year the sum of the annual phase-in 
                        percentage for the year and the annual phase-in 
                        percentages for each previous year beginning 
                        with 2011, but in no case more than 100 
                        percent.
                    ``(E) Out-of-pocket gap amount.--For purposes of 
                this paragraph, the term `out-of-pocket gap amount' 
                means for a year the amount by which--
                            ``(i) the annual out-of-pocket threshold 
                        specified in paragraph (4)(B) for the year (as 
                        determined as if this paragraph did not apply), 
                        exceeds
                            ``(ii) the sum of--
                                    ``(I) the annual deductible under 
                                paragraph (1) for the year; and
                                    ``(II) \1/4\ of the amount by which 
                                the initial coverage limit under 
                                paragraph (3) for the year (as 
                                determined as if this paragraph did not 
                                apply) exceeds such annual 
                                deductible.''.
    (b) Requiring Drug Manufacturers To Provide Drug Rebates for Full-
Benefit Dual Eligibles.--
            (1) In general.--Section 1860D-2 of the Social Security Act 
        (42 U.S.C. 1396r-8) is amended--
                    (A) in subsection (e)(1), in the matter before 
                subparagraph (A), by inserting ``and subsection (f)'' 
                after ``this subsection''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Prescription Drug Rebate Agreement for Full-Benefit Dual 
Eligible Individuals.--
            ``(1) In general.--In this part, the term `covered part D 
        drug' does not include any drug or biologic that is 
        manufactured by a manufacturer that has not entered into and 
        have in effect a rebate agreement described in paragraph (2).
            ``(2) Rebate agreement.--A rebate agreement under this 
        subsection shall require the manufacturer to provide to the 
        Secretary a rebate for each rebate period (as defined in 
        paragraph (6)(B)) ending after December 31, 2010, in the amount 
        specified in paragraph (3) for any covered part D drug of the 
        manufacturer dispensed after December 31, 2010, to any full-
        benefit dual eligible individual (as defined in paragraph 
        (6)(A)) for which payment was made by a PDP sponsor under part 
        D or a MA organization under part C for such period. Such 
        rebate shall be paid by the manufacturer to the Secretary not 
        later than 30 days after the date of receipt of the information 
        described in section 1860D-12(b)(7), including as such section 
        is applied under section 1857(f)(3).
            ``(3) Rebate for full-benefit dual eligible medicare drug 
        plan enrollees.--
                    ``(A) In general.--The amount of the rebate 
                specified under this paragraph for a manufacturer for a 
                rebate period, with respect to each dosage form and 
                strength of any covered part D drug provided by such 
                manufacturer and dispensed to a full-benefit dual 
                eligible individual, shall be equal to the product of--
                            ``(i) the total number of units of such 
                        dosage form and strength of the drug so 
                        provided and dispensed for which payment was 
                        made by a PDP sponsor under part D or a MA 
                        organization under part C for the rebate period 
                        (as reported under section 1860D-12(b)(7), 
                        including as such section is applied under 
                        section 1857(f)(3)); and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the Medicaid rebate amount 
                                (as defined in subparagraph (B)) for 
                                such form, strength, and period, 
                                exceeds
                                    ``(II) the average Medicare drug 
                                program full-benefit dual eligible 
                                rebate amount (as defined in 
                                subparagraph (C)) for such form, 
                                strength, and period.
                    ``(B) Medicaid rebate amount.--For purposes of this 
                paragraph, the term `Medicaid rebate amount' means, 
                with respect to each dosage form and strength of a 
                covered part D drug provided by the manufacturer for a 
                rebate period--
                            ``(i) in the case of a single source drug 
                        or an innovator multiple source drug, the 
                        amount specified in paragraph (1)(A)(ii) of 
                        section 1927(b) plus the amount, if any, 
                        specified in paragraph (2)(A)(ii) of such 
                        section, for such form, strength, and period; 
                        or
                            ``(ii) in the case of any other covered 
                        outpatient drug, the amount specified in 
                        paragraph (3)(A)(i) of such section for such 
                        form, strength, and period.
                    ``(C) Average medicare drug program full-benefit 
                dual eligible rebate amount.--For purposes of this 
                subsection, the term `average Medicare drug program 
                full-benefit dual eligible rebate amount' means, with 
                respect to each dosage form and strength of a covered 
                part D drug provided by a manufacturer for a rebate 
                period, the sum, for all PDP sponsors under part D and 
                MA organizations administering a MA-PD plan under part 
                C, of--
                            ``(i) the product, for each such sponsor or 
                        organization, of--
                                    ``(I) the sum of all rebates, 
                                discounts, or other price concessions 
                                (not taking into account any rebate 
                                provided under paragraph (2) for such 
                                dosage form and strength of the drug 
                                dispensed, calculated on a per-unit 
                                basis, but only to the extent that any 
                                such rebate, discount, or other price 
                                concession applies equally to drugs 
                                dispensed to full-benefit dual eligible 
                                Medicare drug plan enrollees and drugs 
                                dispensed to PDP and MA-PD enrollees 
                                who are not full-benefit dual eligible 
                                individuals; and
                                    ``(II) the number of the units of 
                                such dosage and strength of the drug 
                                dispensed during the rebate period to 
                                full-benefit dual eligible individuals 
                                enrolled in the prescription drug plans 
                                administered by the PDP sponsor or the 
                                MA-PD plans administered by the MA-PD 
                                organization; divided by
                            ``(ii) the total number of units of such 
                        dosage and strength of the drug dispensed 
                        during the rebate period to full-benefit dual 
                        eligible individuals enrolled in all 
                        prescription drug plans administered by PDP 
                        sponsors and all MA-PD plans administered by 
                        MA-PD organizations.
            ``(4) Length of agreement.--The provisions of paragraph (4) 
        of section 1927(b) (other than clauses (iv) and (v) of 
        subparagraph (B)) shall apply to rebate agreements under this 
        subsection in the same manner as such paragraph applies to a 
        rebate agreement under such section.
            ``(5) Other terms and conditions.--The Secretary shall 
        establish other terms and conditions of the rebate agreement 
        under this subsection, including terms and conditions related 
        to compliance, that are consistent with this subsection.
            ``(6) Definitions.--In this subsection and section 1860D-
        12(b)(7):
                    ``(A) Full-benefit dual eligible individual.--The 
                term `full-benefit dual eligible individual' has the 
                meaning given such term in section 1935(c)(6).
                    ``(B) Rebate period.--The term `rebate period' has 
                the meaning given such term in section 1927(k)(8).''.
            (2) Reporting requirement for the determination and payment 
        of rebates by manufactures related to rebate for full-benefit 
        dual eligible medicare drug plan enrollees.--
                    (A) Requirements for pdp sponsors.--Section 1860D-
                12(b) of the Social Security Act (42 U.S.C. 1395w-
                112(b)) is amended by adding at the end the following 
                new paragraph:
            ``(7) Reporting requirement for the determination and 
        payment of rebates by manufacturers related to rebate for full-
        benefit dual eligible medicare drug plan enrollees.--
                    ``(A) In general.--For purposes of the rebate under 
                section 1860D-2(f) for contract years beginning on or 
                after January 1, 2011, each contract entered into with 
                a PDP sponsor under this part with respect to a 
                prescription drug plan shall require that the sponsor 
                comply with subparagraphs (B) and (C).
                    ``(B) Report form and contents.--Not later than 60 
                days after the end of each rebate period (as defined in 
                section 1860D-2(f)(6)(B)) within such a contract year 
                to which such section applies, a PDP sponsor of a 
                prescription drug plan under this part shall report to 
                each manufacturer--
                            ``(i) information (by National Drug Code 
                        number) on the total number of units of each 
                        dosage, form, and strength of each drug of such 
                        manufacturer dispensed to full-benefit dual 
                        eligible Medicare drug plan enrollees under any 
                        prescription drug plan operated by the PDP 
                        sponsor during the rebate period;
                            ``(ii) information on the price discounts, 
                        price concessions, and rebates for such drugs 
                        for such form, strength, and period;
                            ``(iii) information on the extent to which 
                        such price discounts, price concessions, and 
                        rebates apply equally to full-benefit dual 
                        eligible Medicare drug plan enrollees and PDP 
                        enrollees who are not full-benefit dual 
                        eligible Medicare drug plan enrollees; and
                            ``(iv) any additional information that the 
                        Secretary determines is necessary to enable the 
                        Secretary to calculate the average Medicare 
                        drug program full-benefit dual eligible rebate 
                        amount (as defined in paragraph (3)(C) of such 
                        section), and to determine the amount of the 
                        rebate required under this section, for such 
                        form, strength, and period.
                Such report shall be in a form consistent with a 
                standard reporting format established by the Secretary.
                    ``(C) Submission to secretary.--Each PDP sponsor 
                shall promptly transmit a copy of the information 
                reported under subparagraph (B) to the Secretary for 
                the purpose of audit oversight and evaluation.
                    ``(D) Confidentiality of information.--The 
                provisions of subparagraph (D) of section 1927(b)(3), 
                relating to confidentiality of information, shall apply 
                to information reported by PDP sponsors under this 
                paragraph in the same manner that such provisions apply 
                to information disclosed by manufacturers or 
                wholesalers under such section, except--
                            ``(i) that any reference to `this section' 
                        in clause (i) of such subparagraph shall be 
                        treated as being a reference to this section;
                            ``(ii) the reference to the Director of the 
                        Congressional Budget Office in clause (iii) of 
                        such subparagraph shall be treated as including 
                        a reference to the Medicare Payment Advisory 
                        Commission; and
                            ``(iii) clause (iv) of such subparagraph 
                        shall not apply.
                    ``(E) Oversight.--Information reported under this 
                paragraph may be used by the Inspector General of the 
                Department of Health and Human Services for the 
                statutorily authorized purposes of audit, 
                investigation, and evaluations.
                    ``(F) Penalties for failure to provide timely 
                information and provision of false information.--In the 
                case of a PDP sponsor--
                            ``(i) that fails to provide information 
                        required under subparagraph (B) on a timely 
                        basis, the sponsor is subject to a civil money 
                        penalty in the amount of $10,000 for each day 
                        in which such information has not been 
                        provided; or
                            ``(ii) that knowingly (as defined in 
                        section 1128A(i)) provides false information 
                        under such subparagraph, the sponsor is subject 
                        to a civil money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information.
                Such civil money penalties are in addition to other 
                penalties as may be prescribed by law. The provisions 
                of section 1128A (other than subsections (a) and (b)) 
                shall apply to a civil money penalty under this 
                subparagraph in the same manner as such provisions 
                apply to a penalty or proceeding under section 
                1128A(a).''.
                    (B) Application to ma organizations.--Section 
                1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-
                27(f)(3)) is amended by adding at the end the 
                following:
                    ``(D) Reporting requirement related to rebate for 
                full-benefit dual eligible medicare drug plan 
                enrollees.--Section 1860D-12(b)(7).''.
            (3) Deposit of rebates into medicare prescription drug 
        account.--Section 1860D-16(c) of such Act (42 U.S.C. 1395w-
        116(c)) is amended by adding at the end the following new 
        paragraph:
            ``(6) Rebate for full-benefit dual eligible medicare drug 
        plan enrollees.--Amounts paid under a rebate agreement under 
        section 1860D-2(f) shall be deposited into the Account and 
        shall be used to pay for all or part of the gradual elimination 
        of the coverage gap under section 1860D-2(b)(7).''.

SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN ORIGINAL COVERAGE GAP.

    Section 1860D-2 of the Social Security Act (42 U.S.C. 1395w-102), 
as amended by section 1181(a), is amended--
            (1) in subsection (b)(4)(C)(ii), by inserting ``subject to 
        subsection (g)(2)(C),'' after ``(ii)'';
            (2) in subsection (e)(1), in the matter before subparagraph 
        (A), by striking ``subsection (f)'' and inserting ``subsections 
        (f) and (g)'' after ``this subsection''; and
            (3) by adding at the end the following new subsection:
    ``(g) Requirement for Manufacturer Discount Agreement for Certain 
Qualifying Drugs.--
            ``(1) In general.--In this part, the term `covered part D 
        drug' does not include any drug or biologic that is 
        manufactured by a manufacturer that has not entered into and 
        have in effect for all qualifying drugs (as defined in 
        paragraph (5)(A)) a discount agreement described in paragraph 
        (2).
            ``(2) Discount agreement.--
                    ``(A) Periodic discounts.--A discount agreement 
                under this paragraph shall require the manufacturer 
                involved to provide, to each PDP sponsor with respect 
                to a prescription drug plan or each MA organization 
                with respect to each MA-PD plan, a discount in an 
                amount specified in paragraph (3) for qualifying drugs 
                (as defined in paragraph (5)(A)) of the manufacturer 
                dispensed to a qualifying enrollee after December 31, 
                2010, insofar as the individual is in the original gap 
                in coverage (as defined in paragraph (5)(E)).
                    ``(B) Discount agreement.--Insofar as not 
                inconsistent with this subsection, the Secretary shall 
                establish terms and conditions of such agreement, 
                including terms and conditions relating to compliance, 
                similar to the terms and conditions for rebate 
                agreements under paragraphs (2), (3), and (4) of 
                section 1927(b), except that--
                            ``(i) discounts shall be applied under this 
                        subsection to prescription drug plans and MA-PD 
                        plans instead of State plans under title XIX;
                            ``(ii) PDP sponsors and MA organizations 
                        shall be responsible, instead of States, for 
                        provision of necessary utilization information 
                        to drug manufacturers; and
                            ``(iii) sponsors and MA organizations shall 
                        be responsible for reporting information on 
                        drug-component negotiated price, instead of 
                        other manufacturer prices.
                    ``(C) Counting discount toward true out-of-pocket 
                costs.--Under the discount agreement, in applying 
                subsection (b)(4), with regard to subparagraph (C)(i) 
                of such subsection, if a qualified enrollee purchases 
                the qualified drug insofar as the enrollee is in an 
                actual gap of coverage (as defined in paragraph 
                (5)(D)), the amount of the discount under the agreement 
                shall be treated and counted as costs incurred by the 
                plan enrollee.
            ``(3) Discount amount.--The amount of the discount 
        specified in this paragraph for a discount period for a plan is 
        equal to 50 percent of the amount of the drug-component 
        negotiated price (as defined in paragraph (5)(C)) for 
        qualifying drugs for the period involved.
            ``(4) Additional terms.--In the case of a discount provided 
        under this subsection with respect to a prescription drug plan 
        offered by a PDP sponsor or an MA-PD plan offered by an MA 
        organization, if a qualified enrollee purchases the qualified 
        drug--
                    ``(A) insofar as the enrollee is in an actual gap 
                of coverage (as defined in paragraph (5)(D)), the 
                sponsor or plan shall provide the discount to the 
                enrollee at the time the enrollee pays for the drug; 
                and
                    ``(B) insofar as the enrollee is in the portion of 
                the original gap in coverage (as defined in paragraph 
                (5)(E)) that is not in the actual gap in coverage, the 
                discount shall not be applied against the negotiated 
                price (as defined in subsection (d)(1)(B)) for the 
                purpose of calculating the beneficiary payment.
            ``(5) Definitions.--In this subsection:
                    ``(A) Qualifying drug.--The term `qualifying drug' 
                means, with respect to a prescription drug plan or MA-
                PD plan, a drug or biological product that--
                            ``(i)(I) is a drug produced or distributed 
                        under an original new drug application approved 
                        by the Food and Drug Administration, including 
                        a drug product marketed by any cross-licensed 
                        producers or distributors operating under the 
                        new drug application;
                            ``(II) is a drug that was originally 
                        marketed under an original new drug application 
                        approved by the Food and Drug Administration; 
                        or
                            ``(III) is a biological product as approved 
                        under Section 351(a) of the Public Health 
                        Services Act;
                            ``(ii) is covered under the formulary of 
                        the plan; and
                            ``(iii) is dispensed to an individual who 
                        is in the original gap in coverage.
                    ``(B) Qualifying enrollee.--The term `qualifying 
                enrollee' means an individual enrolled in a 
                prescription drug plan or MA-PD plan other than such an 
                individual who is a subsidy-eligible individual (as 
                defined in section 1860D-14(a)(3)).
                    ``(C) Drug-component negotiated price.--The term 
                `drug-component negotiated price' means, with respect 
                to a qualifying drug, the negotiated price (as defined 
                in subsection (d)(1)(B)), as determined without regard 
                to any dispensing fee, of the drug under the 
                prescription drug plan or MA-PD plan involved.
                    ``(D) Actual gap in coverage.--The term `actual gap 
                in coverage' means the gap in prescription drug 
                coverage that occurs between the initial coverage limit 
                (as modified under subparagraph (B) of subsection 
                (b)(7)) and the annual out-of-pocket threshold (as 
                modified under subparagraph (C) of such subsection).
                    ``(E) Original gap in coverage.--The term `original 
                in gap coverage' means the gap in prescription drug 
                coverage that would occur between the initial coverage 
                limit (described in subsection (b)(3)) and the out-of-
                pocket threshold (as defined in subsection (b)(4))(B) 
                if subsection (b)(7) did not apply.''.

SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMISSION OF CLAIMS BY 
              PHARMACIES LOCATED IN OR CONTRACTING WITH LONG-TERM CARE 
              FACILITIES.

    (a) Part D Submission.--Section 1860D-12(b) of the Social Security 
Act (42 U.S.C. 1395w-112(b)), as amended by section 172(a)(1) of Public 
Law 110-275, is amended by striking paragraph (5) and redesignating 
paragraph (6) and paragraph (7), as added by section 1181(b)(2), as 
paragraph (5) and paragraph (6), respectively.
    (b) Submission to MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act (42 U.S.C. 1395w-27(f)(3)), as added by section 171(b) of 
Public Law 110-275 and amended by section 172(a)(2) of such Public Law, 
is amended by striking subparagraph (B) and redesignating subparagraph 
(C) as subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply for contract years beginning with 2010.

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.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security 
Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``such costs shall be treated as 
                incurred only if'' and inserting ``subject to clause 
                (iii), such costs shall be treated as incurred only 
                if'';
                    (B) by striking ``, under section 1860D-14, or 
                under a State Pharmaceutical Assistance Program''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) such costs shall be treated as 
                        incurred and shall not be considered to be 
                        reimbursed under clause (ii) if such costs are 
                        borne or paid--
                                    ``(I) under section 1860D-14;
                                    ``(II) under a State Pharmaceutical 
                                Assistance Program;
                                    ``(III) by the Indian Health 
                                Service, an Indian tribe or tribal 
                                organization, or an urban Indian 
                                organization (as defined in section 4 
                                of the Indian Health Care Improvement 
                                Act); or
                                    ``(IV) under an AIDS Drug 
                                Assistance Program under part B of 
                                title XXVI of the Public Health Service 
                                Act.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to costs incurred on or after January 1, 2011.

SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLLMENT FOR FORMULARY 
              CHANGES THAT ADVERSELY IMPACT AN ENROLLEE.

    (a) In General.--Section 1860D-1(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-101(b)(3)) is amended by adding at the end the 
following new subparagraph:
                    ``(F) Change in formulary resulting in increase in 
                cost-sharing.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of an individual 
                        enrolled in a prescription drug plan (or MA-PD 
                        plan) who has been prescribed and is using a 
                        covered part D drug while so enrolled, if the 
                        formulary of the plan is materially changed 
                        (other than at the end of a contract year) so 
                        to reduce the coverage (or increase the cost-
                        sharing) of the drug under the plan.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply in the case that a drug is removed from 
                        the formulary of a plan because of a recall or 
                        withdrawal of the drug issued by the Food and 
                        Drug Administration, because the drug is 
                        replaced with a generic drug that is a 
                        therapeutic equivalent, or because of 
                        utilization management applied to--
                                    ``(I) a drug whose labeling 
                                includes a boxed warning required by 
                                the Food and Drug Administration under 
                                section 210.57(c)(1) of title 21, Code 
                                of Federal Regulations (or a successor 
                                regulation); or
                                    ``(II) a drug required under 
                                subsection (c)(2) of section 505-1 of 
                                the Federal Food, Drug, and Cosmetic 
                                Act to have a Risk Evaluation and 
                                Management Strategy that includes 
                                elements under subsection (f) of such 
                                section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to contract years beginning on or after January 1, 2011.

             Subtitle F--Medicare Rural Access Protections

SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS.

    (a) Additional Telehealth Site.--
            (1) In general.--Paragraph (4)(C)(ii) of section 1834(m) of 
        the Social Security Act (42 U.S.C. 1395m(m)) is amended by 
        adding at the end the following new subclause:
                                    ``(IX) A renal dialysis facility.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2011.
    (b) Telehealth Advisory Committee.--
            (1) Establishment.--Section 1868 of the Social Security Act 
        (42 U.S.C. 1395ee) is amended--
                    (A) in the heading, by adding at the end the 
                following: ``telehealth advisory committee''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Telehealth Advisory Committee.--
            ``(1) In general.--The Secretary shall appoint a Telehealth 
        Advisory Committee (in this subsection referred to as the 
        `Advisory Committee') to make recommendations to the Secretary 
        on policies of the Centers for Medicare & Medicaid Services 
        regarding telehealth services as established under section 
        1834(m), including the appropriate addition or deletion of 
        services (and HCPCS codes) to those specified in paragraphs 
        (4)(F)(i) and (4)(F)(ii) of such section and for authorized 
        payment under paragraph (1) of such section.
            ``(2) Membership; terms.--
                    ``(A) Membership.--
                            ``(i) In general.--The Advisory Committee 
                        shall be composed of 9 members, to be appointed 
                        by the Secretary, of whom--
                                    ``(I) 5 shall be practicing 
                                physicians;
                                    ``(II) 2 shall be practicing non-
                                physician health care practitioners; 
                                and
                                    ``(III) 2 shall be administrators 
                                of telehealth programs.
                            ``(ii) Requirements for appointing 
                        members.--In appointing members of the Advisory 
                        Committee, the Secretary shall--
                                    ``(I) ensure that each member has 
                                prior experience with the practice of 
                                telemedicine or telehealth;
                                    ``(II) give preference to 
                                individuals who are currently providing 
                                telemedicine or telehealth services or 
                                who are involved in telemedicine or 
                                telehealth programs;
                                    ``(III) ensure that the membership 
                                of the Advisory Committee represents a 
                                balance of specialties and geographic 
                                regions; and
                                    ``(IV) take into account the 
                                recommendations of stakeholders.
                    ``(B) Terms.--The members of the Advisory Committee 
                shall serve for such term as the Secretary may specify.
                    ``(C) Conflicts of interest.--An advisory committee 
                member may not participate with respect to a particular 
                matter considered in an advisory committee meeting if 
                such member (or an immediate family member of such 
                member) has a financial interest that could be affected 
                by the advice given to the Secretary with respect to 
                such matter.
            ``(3) Meetings.--The Advisory Committee shall meet twice 
        each calendar year and at such other times as the Secretary may 
        provide.
            ``(4) Permanent committee.--Section 14 of the Federal 
        Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
        Advisory Committee.''
            (2) Following recommendations.--Section 1834(m)(4)(F) of 
        such Act (42 U.S.C. 1395m(m)(4)(F)) is amended by adding at the 
        end the following new clause:
                            ``(iii) Recommendations of the telehealth 
                        advisory committee.--In making determinations 
                        under clauses (i) and (ii), the Secretary shall 
                        take into account the recommendations of the 
                        Telehealth Advisory Committee (established 
                        under section 1868(c)) when adding or deleting 
                        services (and HCPCS codes) and in establishing 
                        policies of the Centers for Medicare & Medicaid 
                        Services regarding the delivery of telehealth 
                        services. If the Secretary does not implement 
                        such a recommendation, the Secretary shall 
                        publish in the Federal Register a statement 
                        regarding the reason such recommendation was 
                        not implemented.''
            (3) Waiver of administrative limitation.--The Secretary of 
        Health and Human Services shall establish the Telehealth 
        Advisory Committee under the amendment made by paragraph (1) 
        notwithstanding any limitation that may apply to the number of 
        advisory committees that may be established (within the 
        Department of Health and Human Services or otherwise).

SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ```2010''and 
                inserting ``2012''; and
                    (B) in the second sentence, by striking ``or 2009'' 
                and inserting ``, 2009, 2010, or 2011''; and
            (2) in subclause (III), by striking ``January 1, 2010'' and 
        inserting ``January 1, 2012''.

SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.

    Subsection (a) of section 106 of division B of the Tax Relief and 
Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section 
117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110-173) and section 124 of the Medicare Improvements for Patients 
and Providers Act of 2008 (Public Law 110-275), is amended by striking 
``September 30, 2009'' and inserting ``September 30, 2011''.

SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)) is amended by striking ``before January 1, 2010'' and 
inserting ``before January 1, 2012''.

SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
              PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), and section 136 of the Medicare Improvements for Patients and 
Providers Act of 1008 (Public Law 110-275), is amended by striking 
``and 2009'' and inserting ``2009, 2010, and 2011''.

SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

    (a) In General.--Section 1834(l)(13) of the Social Security Act (42 
U.S.C. 1395m(l)(13)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``before January 1, 2010'' and inserting ``before 
                January 1, 2012''; and
                    (B) in each of clauses (i) and (ii), by striking 
                ``before January 1, 2010'' and inserting ``before 
                January 1, 2012''.
    (b) Air Ambulance Improvements.--Section 146(b)(1) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275) is amended by striking ``ending on December 31, 2009'' and 
inserting ``ending on December 31, 2011''.

               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.

    (a) Application of Highest Level Permitted Under LIS to All Subsidy 
Eligible Individuals.--
            (1) In general.--Section 1860D-14(a)(1) of the Social 
        Security Act (42 U.S.C. 1395w-114(a)(1)) is amended in the 
        matter before subparagraph (A), by inserting ``(or, beginning 
        with 2012, paragraph (3)(E))'' after ``paragraph (3)(D)''.
            (2) Annual increase in lis resource test.--Section 1860D-
        14(a)(3)(E)(i) of such Act (42 U.S.C. 1395w-114(a)(3)(E)(i)) is 
        amended--
                    (A) by striking ``and'' at the end of subclause 
                (I);
                    (B) in subclause (II), by inserting ``(before 
                2012)'' after ``subsequent year'';
                    (C) by striking the period at the end of subclause 
                (II) and inserting a semicolon;
                    (D) by inserting after subclause (II) the following 
                new subclauses:
                                    ``(III) for 2012, $17,000 (or 
                                $34,000 in the case of the combined 
                                value of the individual's assets or 
                                resources and the assets or resources 
                                of the individual's spouse); and
                                    ``(IV) for a subsequent year, the 
                                dollar amounts specified in this 
                                subclause (or subclause (III)) for the 
                                previous year increased by the annual 
                                percentage increase in the consumer 
                                price index (all items; U.S. city 
                                average) as of September of such 
                                previous year.''; and
                    (E) in the last sentence, by inserting ``or (IV)'' 
                after ``subclause (II)''.
            (3) Application of lis test under medicare savings 
        program.--Section 1905(p)(1)(C) of such Act (42 U.S.C. 
        1396d(p)(1)(C)) is amended--
                    (A) by striking ``effective beginning with January 
                1, 2010'' and inserting ``effective for the period 
                beginning with January 1, 2010, and ending with 
                December 31, 2011''; and
                    (B) by inserting before the period at the end the 
                following: ``or, effective beginning with January 1, 
                2012, whose resources (as so determined) do not exceed 
                the maximum resource level applied for the year under 
                subparagraph (E) of section 1860D-14(a)(3) (determined 
                without regard to the life insurance policy exclusion 
                provided under subparagraph (G) of such section) 
                applicable to an individual or to the individual and 
                the individual's spouse (as the case may be)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to eligibility determinations for income-related subsidies and 
medicare cost-sharing furnished for periods beginning on or after 
January 1, 2012.

SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-
              INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.

    (a) In General.--Section 1860D-14(a)(1)(D)(i) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
            (1) by striking ``Institutionalized individuals.--In'' and 
        inserting ``Elimination of cost-sharing for certain full-
        benefit dual eligible individuals.--
                                    ``(I) Institutionalized 
                                individuals.--In''; and
            (2) by adding at the end the following new subclause:
                                    ``(II) Certain other individuals.--
                                In the case of an individual who is a 
                                full-benefit dual eligible individual 
                                and with respect to whom there has been 
                                a determination that but for the 
                                provision of home and community based 
                                care (whether under section 1915, 1932, 
                                or under a waiver under section 1115) 
                                the individual would require the level 
                                of care provided in a hospital or a 
                                nursing facility or intermediate care 
                                facility for the mentally retarded the 
                                cost of which could be reimbursed under 
                                the State plan under title XIX, the 
                                elimination of any beneficiary 
                                coinsurance described in section 1860D-
                                2(b)(2) (for all amounts through the 
                                total amount of expenditures at which 
                                benefits are available under section 
                                1860D-2(b)(4)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to drugs dispensed on or after January 1, 2011.

SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.

    (a) Administrative Verification of Income and Resources Under the 
Low-income Subsidy Program.--
            (1) In general.--Clause (iii) of section 1860D-14(a)(3)(E) 
        of the Social Security Act (42 U.S.C. 1395w-114(a)(3)(E)) is 
        amended to read as follows:
                            ``(iii) Certification of income and 
                        resources.--For purposes of applying this 
                        section--
                                    ``(I) an individual shall be 
                                permitted to apply on the basis of 
                                self-certification of income and 
                                resources; and
                                    ``(II) matters attested to in the 
                                application shall be subject to 
                                appropriate methods of verification 
                                without the need of the individual to 
                                provide additional documentation, 
                                except in extraordinary situations as 
                                determined by the Commissioner.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply beginning January 1, 2010.
    (b) 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.--For provision authorizing disclosure 
of return information to facilitate identification of individuals 
likely to be ineligible for low-income subsidies under Medicare 
prescription drug program, see section 1801.

SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIMBURSEMENTS FOR 
              RETROACTIVE LOW INCOME SUBSIDY ENROLLMENT.

    (a) In General.--In the case of a retroactive LIS enrollment 
beneficiary who is enrolled under a prescription drug plan under part D 
of title XVIII of the Social Security Act (or an MA-PD plan under part 
C of such title), the beneficiary (or any eligible third party) is 
entitled to reimbursement by the plan for covered drug costs incurred 
by the beneficiary during the retroactive coverage period of the 
beneficiary in accordance with subsection (b) and in the case of such a 
beneficiary described in subsection (c)(4)(A)(i), such reimbursement 
shall be made automatically by the plan upon receipt of appropriate 
notice the beneficiary is eligible for assistance described in such 
subsection (c)(4)(A)(i) without further information required to be 
filed with the plan by the beneficiary.
    (b) Administrative Requirements Relating to Reimbursements.--
            (1) Line-item description.--Each reimbursement made by a 
        prescription drug plan or MA-PD plan under subsection (a) shall 
        include a line-item description of the items for which the 
        reimbursement is made.
            (2) Timing of reimbursements.--A prescription drug plan or 
        MA-PD plan must make a reimbursement under subsection (a) to a 
        retroactive LIS enrollment beneficiary, with respect to a 
        claim, not later than 45 days after--
                    (A) in the case of a beneficiary described in 
                subsection (c)(4)(A)(i), the date on which the plan 
                receives notice from the Secretary that the beneficiary 
                is eligible for assistance described in such 
                subsection; or
                    (B) in the case of a beneficiary described in 
                subsection (c)(4)(A)(ii), the date on which the 
                beneficiary files the claim with the plan.
            (3) Reporting requirement.--For each month beginning with 
        January 2011, each prescription drug plan and each MA-PD plan 
        shall report to the Secretary the following:
                    (A) The number of claims the plan has readjudicated 
                during the month due to a beneficiary becoming 
                retroactively eligible for subsidies available under 
                section 1860D-14 of the Social Security Act.
                    (B) The total value of the readjudicated claim 
                amount for the month.
                    (C) The Medicare Health Insurance Claims Number of 
                beneficiaries for whom claims were readjudicated.
                    (D) For the claims described in subparagraphs (A) 
                and (B), an attestation to the Administrator of the 
                Centers for Medicare & Medicaid Services of the total 
                amount of reimbursement the plan has provided to 
                beneficiaries for premiums and cost-sharing that the 
                beneficiary overpaid for which the plan received 
                payment from the Centers for Medicare & Medicaid 
                Services.
    (c) Definitions.--For purposes of this section:
            (1) Covered drug costs.--The term ``covered drug costs'' 
        means, with respect to a retroactive LIS enrollment beneficiary 
        enrolled under a prescription drug plan under part D of title 
        XVIII of the Social Security Act (or an MA-PD plan under part C 
        of such title), the amount by which--
                    (A) the costs incurred by such beneficiary during 
                the retroactive coverage period of the beneficiary for 
                covered part D drugs, premiums, and cost-sharing under 
                such title; exceeds
                    (B) such costs that would have been incurred by 
                such beneficiary during such period if the beneficiary 
                had been both enrolled in the plan and recognized by 
                such plan as qualified during such period for the low 
                income subsidy under section 1860D-14 of the Social 
                Security Act to which the individual is entitled.
            (2) Eligible third party.--The term ``eligible third 
        party'' means, with respect to a retroactive LIS enrollment 
        beneficiary, an organization or other third party that is owed 
        payment on behalf of such beneficiary for covered drug costs 
        incurred by such beneficiary during the retroactive coverage 
        period of such beneficiary.
            (3) Retroactive coverage period.--The term ``retroactive 
        coverage period'' means--
                    (A) with respect to a retroactive LIS enrollment 
                beneficiary described in paragraph (4)(A)(i), the 
                period--
                            (i) beginning on the effective date of the 
                        assistance described in such paragraph for 
                        which the individual is eligible; and
                            (ii) ending on the date the plan 
                        effectuates the status of such individual as so 
                        eligible; and
                    (B) with respect to a retroactive LIS enrollment 
                beneficiary described in paragraph (4)(A)(ii), the 
                period--
                            (i) beginning on the date the individual is 
                        both entitled to benefits under part A, or 
                        enrolled under part B, of title XVIII of the 
                        Social Security Act and eligible for medical 
                        assistance under a State plan under title XIX 
                        of such Act; and
                            (ii) ending on the date the plan 
                        effectuates the status of such individual as a 
                        full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act).
            (4) Retroactive lis enrollment beneficiary.--
                    (A) In general.--The term ``retroactive LIS 
                enrollment beneficiary'' means an individual who--
                            (i) is enrolled in a prescription drug plan 
                        under part D of title XVIII of the Social 
                        Security Act (or an MA-PD plan under part C of 
                        such title) and subsequently becomes eligible 
                        as a full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act), an 
                        individual receiving a low-income subsidy under 
                        section 1860D-14 of such Act, an individual 
                        receiving assistance under the Medicare Savings 
                        Program implemented under clauses (i), (iii), 
                        and (iv) of section 1902(a)(10)(E) of such Act, 
                        or an individual receiving assistance under the 
                        supplemental security income program under 
                        section 1611 of such Act; or
                            (ii) subject to subparagraph (B)(i), is a 
                        full-benefit dual eligible individual (as 
                        defined in section 1935(c)(6) of such Act) who 
                        is automatically enrolled in such a plan under 
                        section 1860D-1(b)(1)(C) of such Act.
                    (B) Exception for beneficiaries enrolled in rfp 
                plan.--
                            (i) In general.--In no case shall an 
                        individual described in subparagraph (A)(ii) 
                        include an individual who is enrolled, pursuant 
                        to a RFP contract described in clause (ii), in 
                        a prescription drug plan offered by the sponsor 
                        of such plan awarded such contract.
                            (ii) RFP contract described.--The RFP 
                        contract described in this section is a 
                        contract entered into between the Secretary and 
                        a sponsor of a prescription drug plan pursuant 
                        to the Centers for Medicare & Medicaid 
                        Services' request for proposals issued on 
                        February 17, 2009, relating to Medicare part D 
                        retroactive coverage for certain low income 
                        beneficiaries, or a similar subsequent request 
                        for proposals.

SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.

    (a) In General.--Section 1860D-1(b)(1)(C) of the Social Security 
Act (42 U.S.C. 1395w-101(b)(1)(C)) is amended by adding after ``PDP 
region'' the following: ``or through use of an intelligent assignment 
process that is designed to maximize the access of such individual to 
necessary prescription drugs while minimizing costs to such individual 
and to the program under this part to the greatest extent possible. In 
the case the Secretary enrolls such individuals through use of an 
intelligent assignment process, such process shall take into account 
the extent to which prescription drugs necessary for the individual are 
covered in the case of a PDP sponsor of a prescription drug plan that 
uses a formulary, the use of prior authorization or other restrictions 
on access to coverage of such prescription drugs by such a sponsor, and 
the overall quality of a prescription drug plan as measured by quality 
ratings established by the Secretary.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect for contract years beginning with 2012.

SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC ENROLLMENT PROCESS 
              FOR CERTAIN SUBSIDY ELIGIBLE INDIVIDUALS.

    (a) Special Enrollment Period.--Section 1860D-1(b)(3)(D) of the 
Social Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended to read 
as follows:
                    ``(D) Subsidy eligible individuals.--In the case of 
                an individual (as determined by the Secretary) who is 
                determined under subparagraph (B) of section 1860D-
                14(a)(3) to be a subsidy eligible individual.''.
    (b) Automatic Enrollment.--Section 1860D-1(b)(1) of the Social 
Security Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at the 
end the following new subparagraph:
                    ``(D) Special rule for subsidy eligible 
                individuals.--The process established under 
                subparagraph (A) shall include, in the case of an 
                individual described in section 1860D-1(b)(3)(D) who 
                fails to enroll in a prescription drug plan or an MA-PD 
                plan during the special enrollment established under 
                such section applicable to such individual, the 
                application of the assignment process described in 
                subparagraph (C) to such individual in the same manner 
                as such assignment process applies to a part D eligible 
                individual described in such subparagraph (C). Nothing 
                in the previous sentence shall prevent an individual 
                described in such sentence from declining enrollment in 
                a plan determined appropriate by the Secretary (or in 
                the program under this part) or from changing such 
                enrollment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to subsidy determinations made for months beginning with January 
2011.

SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO REBATE IN CALCULATION OF 
              LOW INCOME SUBSIDY BENCHMARK.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by 
inserting before the period the following: ``before the application of 
the monthly rebate computed under section 1854(b)(1)(C)(i) for that 
plan and year involved''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to subsidy determinations made for months beginning with January 
2011.

                Subtitle B--Reducing Health Disparities

SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.

    (a) Ensuring Effective Communication by the Centers for Medicare & 
Medicaid Services.--
            (1) Study on medicare payments for language services.--The 
        Secretary of Health and Human Services shall conduct a study 
        that examines the extent to which Medicare service providers 
        utilize, offer, or make available language services for 
        beneficiaries who are limited English proficient and ways that 
        Medicare should develop payment systems for language services.
            (2) Analyses.--The study shall include an analysis of each 
        of the following:
                    (A) How to develop and structure appropriate 
                payment systems for language services for all Medicare 
                service providers.
                    (B) The feasibility of adopting a payment 
                methodology for on-site interpreters, including 
                interpreters who work as independent contractors and 
                interpreters who work for agencies that provide on-site 
                interpretation, pursuant to which such interpreters 
                could directly bill Medicare for services provided in 
                support of physician office services for an LEP 
                Medicare patient.
                    (C) The feasibility of Medicare contracting 
                directly with agencies that provide off-site 
                interpretation including telephonic and video 
                interpretation pursuant to which such contractors could 
                directly bill Medicare for the services provided in 
                support of physician office services for an LEP 
                Medicare patient.
                    (D) The feasibility of modifying the existing 
                Medicare resource-based relative value scale (RBRVS) by 
                using adjustments (such as multipliers or add-ons) when 
                a patient is LEP.
                    (E) How each of options described in a previous 
                paragraph would be funded and how such funding would 
                affect physician payments, a physician's practice, and 
                beneficiary cost-sharing.
                    (F) The extent to which providers under parts A and 
                B of title XVIII of the Social Security Act, MA 
                organizations offering Medicare Advantage plans under 
                part C of such title and PDP sponsors of a prescription 
                drug plan under part D of such title utilize, offer, or 
                make available language services for beneficiaries with 
                limited English proficiency.
                    (G) The nature and type of language services 
                provided by States under title XIX of the Social 
                Security Act and the extent to which such services 
                could be utilized by beneficiaries and providers under 
                title XVIII of such Act.
            (3) Variation in payment system described.--The payment 
        systems described in paragraph (2)(A) may allow variations 
        based upon types of service providers, available delivery 
        methods, and costs for providing language services including 
        such factors as--
                    (A) the type of language services provided (such as 
                provision of health care or health care related 
                services directly in a non-English language by a 
                bilingual provider or use of an interpreter);
                    (B) type of interpretation services provided (such 
                as in-person, telephonic, video interpretation);
                    (C) the methods and costs of providing language 
                services (including the costs of providing language 
                services with internal staff or through contract with 
                external independent contractors or agencies, or both);
                    (D) providing services for languages not frequently 
                encountered in the United States; and
                    (E) providing services in rural areas.
            (4) Report.--The Secretary shall submit a report on the 
        study conducted under subsection (a) to appropriate committees 
        of Congress not later than 12 months after the date of the 
        enactment of this Act.
            (5) Exemption from paperwork reduction act.--Chapter 35 of 
        title 44, United States Code (commonly known as the ``Paperwork 
        Reduction Act''), shall not apply for purposes of carrying out 
        this subsection.
            (6) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection such sums as 
        are necessary.
    (b) Health Plans.--Section 1857(g)(1) of the Social Security Act 
(42 U.S.C. 1395w-27(g)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (F);
            (2) by adding ``or'' at the end of subparagraph (G); and
            (3) by inserting after subparagraph (G) the following new 
        subparagraph:
                    ``(H) fails substantially to provide language 
                services to limited English proficient beneficiaries 
                enrolled in the plan that are required under law;''.

SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR MEDICARE BENEFICIARIES 
              WITH LIMITED ENGLISH PROFICIENCY BY PROVIDING 
              REIMBURSEMENT FOR CULTURALLY AND LINGUISTICALLY 
              APPROPRIATE SERVICES.

    (a) In General.--Not later than 6 months after the date of the 
completion of the study described in section 1221(a), the Secretary, 
acting through the Centers for Medicare & Medicaid Services, shall 
carry out a demonstration program under which the Secretary shall award 
not fewer than 24 3-year grants to eligible Medicare service providers 
(as described in subsection (b)(1)) to improve effective communication 
between such providers and Medicare beneficiaries who are living in 
communities where racial and ethnic minorities, including populations 
that face language barriers, are underserved with respect to such 
services. In designing and carrying out the demonstration the Secretary 
shall take into consideration the results of the study conducted under 
section 1221(a) and adjust, as appropriate, the distribution of grants 
so as to better target Medicare beneficiaries who are in the greatest 
need of language services. The Secretary shall not authorize a grant 
larger than $500,000 over three years for any grantee.
    (b) Eligibility; Priority.--
            (1) Eligibility.--To be eligible to receive a grant under 
        subsection (a) an entity shall--
                    (A) be--
                            (i) a provider of services under part A of 
                        title XVIII of the Social Security Act;
                            (ii) a service provider under part B of 
                        such title;
                            (iii) a part C organization offering a 
                        Medicare part C plan under part C of such 
                        title; or
                            (iv) a PDP sponsor of a prescription drug 
                        plan under part D of such title; and
                    (B) prepare and submit to the Secretary an 
                application, at such time, in such manner, and 
                accompanied by such additional information as the 
                Secretary may require.
            (2) Priority.--
                    (A) Distribution.--To the extent feasible, in 
                awarding grants under this section, the Secretary shall 
                award--
                            (i) at least 6 grants to providers of 
                        services described in paragraph (1)(A)(i);
                            (ii) at least 6 grants to service providers 
                        described in paragraph (1)(A)(ii);
                            (iii) at least 6 grants to organizations 
                        described in paragraph (1)(A)(iii); and
                            (iv) at least 6 grants to sponsors 
                        described in paragraph (1)(A)(iv).
                    (B) For community organizations.--The Secretary 
                shall give priority to applicants that have developed 
                partnerships with community organizations or with 
                agencies with experience in language access.
                    (C) Variation in grantees.--The Secretary shall 
                also ensure that the grantees under this section 
                represent, among other factors, variations in--
                            (i) different types of language services 
                        provided and of service providers and 
                        organizations under parts A through D of title 
                        XVIII of the Social Security Act;
                            (ii) languages needed and their frequency 
                        of use;
                            (iii) urban and rural settings;
                            (iv) at least two geographic regions, as 
                        defined by the Secretary; and
                            (v) at least two large metropolitan 
                        statistical areas with diverse populations.
    (c) Use of Funds.--
            (1) In general.--A grantee shall use grant funds received 
        under this section to pay for the provision of competent 
        language services to Medicare beneficiaries who are limited 
        English proficient. Competent interpreter services may be 
        provided through on-site interpretation, telephonic 
        interpretation, or video interpretation or direct provision of 
        health care or health care related services by a bilingual 
        health care provider. A grantee may use bilingual providers, 
        staff, or contract interpreters. A grantee may use grant funds 
        to pay for competent translation services. A grantee may use up 
        to 10 percent of the grant funds to pay for administrative 
        costs associated with the provision of competent language 
        services and for reporting required under subsection (e).
            (2) Organizations.--Grantees that are part C organizations 
        or PDP sponsors must ensure that their network providers 
        receive at least 50 percent of the grant funds to pay for the 
        provision of competent language services to Medicare 
        beneficiaries who are limited English proficient, including 
        physicians and pharmacies.
            (3) Determination of payments for language services.--
        Payments to grantees shall be calculated based on the estimated 
        numbers of limited English proficient Medicare beneficiaries in 
        a grantee's service area utilizing--
                    (A) data on the numbers of limited English 
                proficient individuals who speak English less than 
                ``very well'' from the most recently available data 
                from the Bureau of the Census or other State-based 
                study the Secretary determines likely to yield accurate 
                data regarding the number of such individuals served by 
                the grantee; or
                    (B) the grantee's own data if the grantee routinely 
                collects data on Medicare beneficiaries' primary 
                language in a manner determined by the Secretary to 
                yield accurate data and such data shows greater numbers 
                of limited English proficient individuals than the data 
                listed in subparagraph (A).
            (4) Limitations.--
                    (A) Reporting.--Payments shall only be provided 
                under this section to grantees that report their costs 
                of providing language services as required under 
                subsection (e) and may be modified annually at the 
                discretion of the Secretary. If a grantee fails to 
                provide the reports under such section for the first 
                year of a grant, the Secretary may terminate the grant 
                and solicit applications from new grantees to 
                participate in the subsequent two years of the 
                demonstration program.
                    (B) Type of services.--
                            (i) In general.--Subject to clause (ii), 
                        payments shall be provided under this section 
                        only to grantees that utilize competent 
                        bilingual staff or competent interpreter or 
                        translation services which--
                                    (I) if the grantee operates in a 
                                State that has statewide health care 
                                interpreter standards, meet the State 
                                standards currently in effect; or
                                    (II) if the grantee operates in a 
                                State that does not have statewide 
                                health care interpreter standards, 
                                utilizes competent interpreters who 
                                follow the National Council on 
                                Interpreting in Health Care's Code of 
                                Ethics and Standards of Practice.
                            (ii) Exemptions.--The requirements of 
                        clause (i) shall not apply--
                                    (I) in the case of a Medicare 
                                beneficiary who is limited English 
                                proficient (who has been informed in 
                                the beneficiary's primary language of 
                                the availability of free interpreter 
                                and translation services) and who 
                                requests the use of family, friends, or 
                                other persons untrained in 
                                interpretation or translation and the 
                                grantee documents the request in the 
                                beneficiary's record; and
                                    (II) in the case of a medical 
                                emergency where the delay directly 
                                associated with obtaining a competent 
                                interpreter or translation services 
                                would jeopardize the health of the 
                                patient.
                        Nothing in clause (ii)(II) shall be construed 
                        to exempt emergency rooms or similar entities 
                        that regularly provide health care services in 
                        medical emergencies from having in place 
                        systems to provide competent interpreter and 
                        translation services without undue delay.
    (d) Assurances.--Grantees under this section shall--
            (1) ensure that appropriate clinical and support staff 
        receive ongoing education and training in linguistically 
        appropriate service delivery;
            (2) ensure the linguistic competence of bilingual 
        providers;
            (3) offer and provide appropriate language services at no 
        additional charge to each patient with limited English 
        proficiency at all points of contact, in a timely manner during 
        all hours of operation;
            (4) notify Medicare beneficiaries of their right to receive 
        language services in their primary language;
            (5) post signage in the languages of the commonly 
        encountered group or groups present in the service area of the 
        organization; and
            (6) ensure that--
                    (A) primary language data are collected for 
                recipients of language services; and
                    (B) consistent with the privacy protections 
                provided under the regulations promulgated pursuant to 
                section 264(c) of the Health Insurance Portability and 
                Accountability Act of 1996 (42 U.S.C. 1320d-2 note), if 
                the recipient of language services is a minor or is 
                incapacitated, the primary language of the parent or 
                legal guardian is collected and utilized.
    (e) Reporting Requirements.--Grantees under this section shall 
provide the Secretary with reports at the conclusion of the each year 
of a grant under this section. Each report shall include at least the 
following information:
            (1) The number of Medicare beneficiaries to whom language 
        services are provided.
            (2) The languages of those Medicare beneficiaries.
            (3) The types of language services provided (such as 
        provision of services directly in non-English language by a 
        bilingual health care provider or use of an interpreter).
            (4) Type of interpretation (such as in-person, telephonic, 
        or video interpretation).
            (5) The methods of providing language services (such as 
        staff or contract with external independent contractors or 
        agencies).
            (6) The length of time for each interpretation encounter.
            (7) The costs of providing language services (which may be 
        actual or estimated, as determined by the Secretary).
    (f) No Cost Sharing.--Limited English proficient Medicare 
beneficiaries shall not have to pay cost-sharing or co-pays for 
language services provided through this demonstration program.
    (g) Evaluation and Report.--The Secretary shall conduct an 
evaluation of the demonstration program under this section and shall 
submit to the appropriate committees of Congress a report not later 
than 1 year after the completion of the program. The report shall 
include the following:
            (1) An analysis of the patient outcomes and costs of 
        furnishing care to the limited English proficient Medicare 
        beneficiaries participating in the project as compared to such 
        outcomes and costs for limited English proficient Medicare 
        beneficiaries not participating.
            (2) The effect of delivering culturally and linguistically 
        appropriate services on beneficiary access to care, utilization 
        of services, efficiency and cost-effectiveness of health care 
        delivery, patient satisfaction, and select health outcomes.
            (3) Recommendations, if any, regarding the extension of 
        such project to the entire Medicare program.
    (h) General Provisions.--Nothing in this section shall be construed 
to limit otherwise existing obligations of recipients of Federal 
financial assistance under title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000(d) et seq.) or any other statute.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $16,000,000 for each fiscal year 
of the demonstration program.

SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
enter into an arrangement with the Institute of Medicine under which 
the Institute will prepare and publish, not later than 3 years after 
the date of the enactment of this Act, a report on the impact of 
language access services on the health and health care of limited 
English proficient populations.
    (b) Contents.--Such report shall include--
            (1) recommendations on the development and implementation 
        of policies and practices by health care organizations and 
        providers for limited English proficient patient populations;
            (2) a description of the effect of providing language 
        access services on quality of health care and access to care 
        and reduced medical error; and
            (3) a description of the costs associated with or savings 
        related to provision of language access services.

SEC. 1224. DEFINITIONS.

    In this subtitle:
            (1) Bilingual.--The term ``bilingual'' with respect to an 
        individual means a person who has sufficient degree of 
        proficiency in two languages and can ensure effective 
        communication can occur in both languages.
            (2) Competent interpreter services.--The term ``competent 
        interpreter services'' means a trans-language rendition of a 
        spoken message in which the interpreter comprehends the source 
        language and can speak comprehensively in the target language 
        to convey the meaning intended in the source language. The 
        interpreter knows health and health-related terminology and 
        provides accurate interpretations by choosing equivalent 
        expressions that convey the best matching and meaning to the 
        source language and captures, to the greatest possible extent, 
        all nuances intended in the source message.
            (3) Competent translation services.--The term ``competent 
        translation services'' means a trans-language rendition of a 
        written document in which the translator comprehends the source 
        language and can write comprehensively in the target language 
        to convey the meaning intended in the source language. The 
        translator knows health and health-related terminology and 
        provides accurate translations by choosing equivalent 
        expressions that convey the best matching and meaning to the 
        source language and captures, to the greatest possible extent, 
        all nuances intended in the source document.
            (4) Effective communication.--The term ``effective 
        communication'' means an exchange of information between the 
        provider of health care or health care-related services and the 
        limited English proficient recipient of such services that 
        enables limited English proficient individuals to access, 
        understand, and benefit from health care or health care-related 
        services.
            (5) Interpreting/interpretation.--The terms 
        ``interpreting'' and ``interpretation'' mean the transmission 
        of a spoken message from one language into another, faithfully, 
        accurately, and objectively.
            (6) Health care services.--The term ``health care 
        services'' means services that address physical as well as 
        mental health conditions in all care settings.
            (7) Health care-related services.--The term ``health care-
        related services'' means human or social services programs or 
        activities that provide access, referrals or links to health 
        care.
            (8) Language access.--The term ``language access'' means 
        the provision of language services to an LEP individual 
        designed to enhance that individual's access to, understanding 
        of or benefit from health care or health care-related services.
            (9) Language services.--The term ``language services'' 
        means provision of health care services directly in a non-
        English language, interpretation, translation, and non-English 
        signage.
            (10) Limited english proficient.--The term ``limited 
        English proficient'' or ``LEP'' with respect to an individual 
        means an individual who speaks a primary language other than 
        English and who cannot speak, read, write or understand the 
        English language at a level that permits the individual to 
        effectively communicate with clinical or nonclinical staff at 
        an entity providing health care or health care related 
        services.
            (11) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual entitled to benefits under 
        part A of title XVIII of the Social Security Act or enrolled 
        under part B of such title.
            (12) Medicare program.--The term ``Medicare program'' means 
        the programs under parts A through D of title XVIII of the 
        Social Security Act.
            (13) Service provider.--The term ``service provider'' 
        includes all suppliers, providers of services, or entities 
        under contract to provide coverage, items or services under any 
        part of title XVIII of the Social Security Act.

                 Subtitle C--Miscellaneous Improvements

SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 141 of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275), is amended 
by striking ``December 31, 2009'' and inserting ``December 31, 2011''.

SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS FOR 
              KIDNEY TRANSPLANT PATIENTS AND OTHER RENAL DIALYSIS 
              PROVISIONS.

    (a) Provision of Appropriate Coverage of Immunosuppressive Drugs 
Under the Medicare Program for Kidney Transplant Recipients.--
            (1) Continued entitlement to immunosuppressive drugs.--
                    (A) Kidney transplant recipients.--Section 
                226A(b)(2) of the Social Security Act (42 U.S.C. 426-
                1(b)(2)) is amended by inserting ``(except for coverage 
                of immunosuppressive drugs under section 
                1861(s)(2)(J))'' before ``, with the thirty-sixth 
                month''.
                    (B) Application.--Section 1836 of such Act (42 
                U.S.C. 1395o) is amended--
                            (i) by striking ``Every individual who'' 
                        and inserting ``(a) In General.--Every 
                        individual who''; and
                            (ii) by adding at the end the following new 
                        subsection:
    ``(b) Special Rules Applicable to Individuals Only Eligible for 
Coverage of Immunosuppressive Drugs.--
            ``(1) In general.--In the case of an individual whose 
        eligibility for benefits under this title has ended on or after 
        January 1, 2012, except for the coverage of immunosuppressive 
        drugs by reason of section 226A(b)(2), the following rules 
        shall apply:
                    ``(A) The individual shall be deemed to be enrolled 
                under this part for purposes of receiving coverage of 
                such drugs.
                    ``(B) The individual shall be responsible for 
                providing for payment of the portion of the premium 
                under section 1839 which is not covered under the 
                Medicare savings program (as defined in section 
                1144(c)(7)) in order to receive such coverage.
                    ``(C) The provision of such drugs shall be subject 
                to the application of--
                            ``(i) the deductible under section 1833(b); 
                        and
                            ``(ii) the coinsurance amount applicable 
                        for such drugs (as determined under this part).
                    ``(D) If the individual is an inpatient of a 
                hospital or other entity, the individual is entitled to 
                receive coverage of such drugs under this part.
            ``(2) Establishment of procedures in order to implement 
        coverage.--The Secretary shall establish procedures for--
                    ``(A) identifying individuals that are entitled to 
                coverage of immunosuppressive drugs by reason of 
                section 226A(b)(2); and
                    ``(B) distinguishing such individuals from 
                individuals that are enrolled under this part for the 
                complete package of benefits under this part.''.
                    (C) Technical amendment to correct duplicate 
                subsection designation.--Subsection (d) of section 226A 
                of such Act (42 U.S.C. 426-1), as added by section 
                201(a)(3)(D)(ii) of the Social Security Independence 
                and Program Improvements Act of 1994 (Public Law 103-
                296; 108 Stat. 1497), is redesignated as subsection 
                (d).
            (2) Extension of secondary payer requirements for esrd 
        beneficiaries.--Section 1862(b)(1)(C) of such Act (42 U.S.C. 
        1395y(b)(1)(C)) is amended by adding at the end the following 
        new sentence: ``With regard to immunosuppressive drugs 
        furnished on or after the date of the enactment of the 
        America's Affordable Health Choices Act of 2009, this 
        subparagraph shall be applied without regard to any time 
        limitation.''.
    (b) Medicare Coverage for ESRD Patients.--Section 1881 of such Act 
is further amended--
            (1) in subsection (b)(14)(B)(iii), by inserting ``, 
        including oral drugs that are not the oral equivalent of an 
        intravenous drug (such as oral phosphate binders and 
        calcimimetics),'' after ``other drugs and biologicals'';
            (2) in subsection (b)(14)(E)(ii)--
                    (A) in the first sentence--
                            (i) by striking ``a one-time election to be 
                        excluded from the phase-in'' and inserting ``an 
                        election, with respect to 2011, 2012, or 2013, 
                        to be excluded from the phase-in (or the 
                        remainder of the phase-in)''; and
                            (ii) by adding at the end the following: 
                        ``for such year and for each subsequent year 
                        during the phase-in described in clause (i)''; 
                        and
                    (B) in the second sentence--
                            (i) by striking ``January 1, 2011'' and 
                        inserting ``the first date of such year''; and
                            (ii) by inserting ``and at a time'' after 
                        ``form and manner''; and
            (3) in subsection (h)(4)(E), by striking ``lesser'' and 
        inserting ``greater''.

SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.

    (a) Medicare.--
            (1) In general.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x) is amended--
                    (A) in subsection (s)(2)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (DD);
                            (ii) by adding ``and'' at the end of 
                        subparagraph (EE); and
                            (iii) by adding at the end the following 
                        new subparagraph:
            ``(FF) advance care planning consultation (as defined in 
        subsection (hhh)(1));''; and
                    (B) by adding at the end the following new 
                subsection:

                  ``Advance Care Planning Consultation

    ``(hhh)(1) Subject to paragraphs (3) and (4), the term `advance 
care planning consultation' means a consultation between the individual 
and a practitioner described in paragraph (2) regarding advance care 
planning, if, subject to paragraph (3), the individual involved has not 
had such a consultation within the last 5 years. Such consultation 
shall include the following:
            ``(A) An explanation by the practitioner of advance care 
        planning, including key questions and considerations, important 
        steps, and suggested people to talk to.
            ``(B) An explanation by the practitioner of advance 
        directives, including living wills and durable powers of 
        attorney, and their uses.
            ``(C) An explanation by the practitioner of the role and 
        responsibilities of a health care proxy.
            ``(D) The provision by the practitioner of a list of 
        national and State-specific resources to assist consumers and 
        their families with advance care planning, including the 
        national toll-free hotline, the advance care planning 
        clearinghouses, and State legal service organizations 
        (including those funded through the Older Americans Act of 
        1965).
            ``(E) An explanation by the practitioner of the continuum 
        of end-of-life services and supports available, including 
        palliative care and hospice, and benefits for such services and 
        supports that are available under this title.
            ``(F)(i) Subject to clause (ii), an explanation of orders 
        regarding life sustaining treatment or similar orders, which 
        shall include--
                    ``(I) the reasons why the development of such an 
                order is beneficial to the individual and the 
                individual's family and the reasons why such an order 
                should be updated periodically as the health of the 
                individual changes;
                    ``(II) the information needed for an individual or 
                legal surrogate to make informed decisions regarding 
                the completion of such an order; and
                    ``(III) the identification of resources that an 
                individual may use to determine the requirements of the 
                State in which such individual resides so that the 
                treatment wishes of that individual will be carried out 
                if the individual is unable to communicate those 
                wishes, including requirements regarding the 
                designation of a surrogate decisionmaker (also known as 
                a health care proxy).
            ``(ii) The Secretary shall limit the requirement for 
        explanations under clause (i) to consultations furnished in a 
        State--
                    ``(I) in which all legal barriers have been 
                addressed for enabling orders for life sustaining 
                treatment to constitute a set of medical orders 
                respected across all care settings; and
                    ``(II) that has in effect a program for orders for 
                life sustaining treatment described in clause (iii).
            ``(iii) A program for orders for life sustaining treatment 
        for a States described in this clause is a program that--
                    ``(I) ensures such orders are standardized and 
                uniquely identifiable throughout the State;
                    ``(II) distributes or makes accessible such orders 
                to physicians and other health professionals that 
                (acting within the scope of the professional's 
                authority under State law) may sign orders for life 
                sustaining treatment;
                    ``(III) provides training for health care 
                professionals across the continuum of care about the 
                goals and use of orders for life sustaining treatment; 
                and
                    ``(IV) is guided by a coalition of stakeholders 
                includes representatives from emergency medical 
                services, emergency department physicians or nurses, 
                state long-term care association, state medical 
                association, state surveyors, agency responsible for 
                senior services, state department of health, state 
                hospital association, home health association, state 
                bar association, and state hospice association.
    ``(2) A practitioner described in this paragraph is--
            ``(A) a physician (as defined in subsection (r)(1)); and
            ``(B) a nurse practitioner or physician's assistant who has 
        the authority under State law to sign orders for life 
        sustaining treatments.
    ``(3)(A) An initial preventive physical examination under 
subsection (WW), including any related discussion during such 
examination, shall not be considered an advance care planning 
consultation for purposes of applying the 5-year limitation under 
paragraph (1).
    ``(B) An advance care planning consultation with respect to an 
individual may be conducted more frequently than provided under 
paragraph (1) if there is a significant change in the health condition 
of the individual, including diagnosis of a chronic, progressive, life-
limiting disease, a life-threatening or terminal diagnosis or life-
threatening injury, or upon admission to a skilled nursing facility, a 
long-term care facility (as defined by the Secretary), or a hospice 
program.
    ``(4) A consultation under this subsection may include the 
formulation of an order regarding life sustaining treatment or a 
similar order.
    ``(5)(A) For purposes of this section, the term `order regarding 
life sustaining treatment' means, with respect to an individual, an 
actionable medical order relating to the treatment of that individual 
that--
            ``(i) is signed and dated by a physician (as defined in 
        subsection (r)(1)) or another health care professional (as 
        specified by the Secretary and who is acting within the scope 
        of the professional's authority under State law in signing such 
        an order, including a nurse practitioner or physician 
        assistant) and is in a form that permits it to stay with the 
        individual and be followed by health care professionals and 
        providers across the continuum of care;
            ``(ii) effectively communicates the individual's 
        preferences regarding life sustaining treatment, including an 
        indication of the treatment and care desired by the individual;
            ``(iii) is uniquely identifiable and standardized within a 
        given locality, region, or State (as identified by the 
        Secretary); and
            ``(iv) may incorporate any advance directive (as defined in 
        section 1866(f)(3)) if executed by the individual.
    ``(B) The level of treatment indicated under subparagraph (A)(ii) 
may range from an indication for full treatment to an indication to 
limit some or all or specified interventions. Such indicated levels of 
treatment may include indications respecting, among other items--
            ``(i) the intensity of medical intervention if the patient 
        is pulse less, apneic, or has serious cardiac or pulmonary 
        problems;
            ``(ii) the individual's desire regarding transfer to a 
        hospital or remaining at the current care setting;
            ``(iii) the use of antibiotics; and
            ``(iv) the use of artificially administered nutrition and 
        hydration.''.
            (2) Payment.--Section 1848(j)(3) of such Act (42 U.S.C. 
        1395w-4(j)(3)) is amended by inserting ``(2)(FF),'' after 
        ``(2)(EE),''.
            (3) Frequency limitation.--Section 1862(a) of such Act (42 
        U.S.C. 1395y(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (N), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (O) by striking the 
                        semicolon at the end and inserting ``, and''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(P) in the case of advance care planning 
                consultations (as defined in section 1861(hhh)(1)), 
                which are performed more frequently than is covered 
                under such section;''; and
                    (B) in paragraph (7), by striking ``or (K)'' and 
                inserting ``(K), or (P)''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to consultations furnished on or after January 1, 
        2011.
    (b) Expansion of Physician Quality Reporting Initiative for End of 
Life Care.--
            (1) Physician's quality reporting initiative.--Section 
        1848(k)(2) of the Social Security Act (42 U.S.C. 1395w-4(k)(2)) 
        is amended by adding at the end the following new paragraphs:
            ``(3) Physician's quality reporting initiative.--
                    ``(A) In general.--For purposes of reporting data 
                on quality measures for covered professional services 
                furnished during 2011 and any subsequent year, to the 
                extent that measures are available, the Secretary shall 
                include quality measures on end of life care and 
                advanced care planning that have been adopted or 
                endorsed by a consensus-based organization, if 
                appropriate. Such measures shall measure both the 
                creation of and adherence to orders for life-sustaining 
                treatment.
                    ``(B) Proposed set of measures.--The Secretary 
                shall publish in the Federal Register proposed quality 
                measures on end of life care and advanced care planning 
                that the Secretary determines are described in 
                subparagraph (A) and would be appropriate for eligible 
                professionals to use to submit data to the Secretary. 
                The Secretary shall provide for a period of public 
                comment on such set of measures before finalizing such 
                proposed measures.''.
    (c) Inclusion of Information in Medicare & You Handbook.--
            (1) Medicare & you handbook.--
                    (A) In general.--Not later than 1 year after the 
                date of the enactment of this Act, the Secretary of 
                Health and Human Services shall update the online 
                version of the Medicare & You Handbook to include the 
                following:
                            (i) An explanation of advance care planning 
                        and advance directives, including--
                                    (I) living wills;
                                    (II) durable power of attorney;
                                    (III) orders of life-sustaining 
                                treatment; and
                                    (IV) health care proxies.
                            (ii) A description of Federal and State 
                        resources available to assist individuals and 
                        their families with advance care planning and 
                        advance directives, including--
                                    (I) available State legal service 
                                organizations to assist individuals 
                                with advance care planning, including 
                                those organizations that receive 
                                funding pursuant to the Older Americans 
                                Act of 1965 (42 U.S.C. 93001 et seq.);
                                    (II) website links or addresses for 
                                State-specific advance directive forms; 
                                and
                                    (III) any additional information, 
                                as determined by the Secretary.
                    (B) Update of paper and subsequent versions.--The 
                Secretary shall include the information described in 
                subparagraph (A) in all paper and electronic versions 
                of the Medicare & You Handbook that are published on or 
                after the date that is 1 year after the date of the 
                enactment of this Act.

SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND WAIVER OF LIMITED 
              ENROLLMENT PENALTY FOR TRICARE BENEFICIARIES.

    (a) Part B Special Enrollment Period.--
            (1) In general.--Section 1837 of the Social Security Act 
        (42 U.S.C. 1395p) is amended by adding at the end the following 
        new subsection:
    ``(l)(1) In the case of any individual who is a covered beneficiary 
(as defined in section 1072(5) of title 10, United States Code) at the 
time the individual is entitled to hospital insurance benefits under 
part A under section 226(b) or section 226A and who is eligible to 
enroll but who has elected not to enroll (or to be deemed enrolled) 
during the individual's initial enrollment period, there shall be a 
special enrollment period described in paragraph (2).
    ``(2) The special enrollment period described in this paragraph, 
with respect to an individual, is the 12-month period beginning on the 
day after the last day of the initial enrollment period of the 
individual or, if later, the 12-month period beginning with the month 
the individual is notified of enrollment under this section.
    ``(3) In the case of an individual who enrolls during the special 
enrollment period provided under paragraph (1), the coverage period 
under this part shall begin on the first day of the month in which the 
individual enrolls or, at the option of the individual, on the first 
day of the second month following the last month of the individual's 
initial enrollment period.
    ``(4) The Secretary of Defense shall establish a method for 
identifying individuals described in paragraph (1) and providing notice 
to them of their eligibility for enrollment during the special 
enrollment period described in paragraph (2).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to elections made on or after the date of the 
        enactment of this Act.
    (b) Waiver of Increase of Premium.--
            (1) In general.--Section 1839(b) of the Social Security Act 
        (42 U.S.C. 1395r(b)) is amended by striking ``section 
        1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of 
        section 1837''.
            (2) Effective date.--
                    (A) In general.--The amendment made by paragraph 
                (1) shall apply with respect to elections made on or 
                after the date of the enactment of this Act.
                    (B) Rebates for certain disabled and esrd 
                beneficiaries.--
                            (i) In general.--With respect to premiums 
                        for months on or after January 2005 and before 
                        the month of the enactment of this Act, no 
                        increase in the premium shall be effected for a 
                        month in the case of any individual who is a 
                        covered beneficiary (as defined in section 
                        1072(5) of title 10, United States Code) at the 
                        time the individual is entitled to hospital 
                        insurance benefits under part A of title XVIII 
                        of the Social Security Act under section 226(b) 
                        or 226A of such Act, and who is eligible to 
                        enroll, but who has elected not to enroll (or 
                        to be deemed enrolled), during the individual's 
                        initial enrollment period, and who enrolls 
                        under this part within the 12-month period that 
                        begins on the first day of the month after the 
                        month of notification of entitlement under this 
                        part.
                            (ii) Consultation with department of 
                        defense.--The Secretary of Health and Human 
                        Services shall consult with the Secretary of 
                        Defense in identifying individuals described in 
                        this paragraph.
                            (iii) Rebates.--The Secretary of Health and 
                        Human Services shall establish a method for 
                        providing rebates of premium increases paid for 
                        months on or after January 1, 2005, and before 
                        the month of the enactment of this Act for 
                        which a penalty was applied and collected.

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.

    (a) In General.--Section 1839(i)(4)(C)(ii)(II) of the Social 
Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) is amended by inserting 
``sale of primary residence,'' after ``divorce of such individual,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to premiums and payments for years beginning with 2011.

SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PATIENT DECISIONS AIDS.

    (a) In General.--The Secretary of Health and Human Services shall 
establish a shared decision making demonstration program (in this 
subsection referred to as the ``program'') under the Medicare program 
using patient decision aids to meet the objective of improving the 
understanding by Medicare beneficiaries of their medical treatment 
options, as compared to comparable Medicare beneficiaries who do not 
participate in a shared decision making process using patient decision 
aids.
    (b) Sites.--
            (1) Enrollment.--The Secretary shall enroll in the program 
        not more than 30 eligible providers who have experience in 
        implementing, and have invested in the necessary infrastructure 
        to implement, shared decision making using patient decision 
        aids.
            (2) Application.--An eligible provider seeking to 
        participate in the program shall submit to the Secretary an 
        application at such time and containing such information as the 
        Secretary may require.
            (3) Preference.--In enrolling eligible providers in the 
        program, the Secretary shall give preference to eligible 
        providers that--
                    (A) have documented experience in using patient 
                decision aids for the conditions identified by the 
                Secretary and in using shared decision making;
                    (B) have the necessary information technology 
                infrastructure to collect the information required by 
                the Secretary for reporting purposes; and
                    (C) are trained in how to use patient decision aids 
                and shared decision making.
    (c) Follow-up Counseling Visit.--
            (1) In general.--An eligible provider participating in the 
        program shall routinely schedule Medicare beneficiaries for a 
        counseling visit after the viewing of such a patient decision 
        aid to answer any questions the beneficiary may have with 
        respect to the medical care of the condition involved and to 
        assist the beneficiary in thinking through how their 
        preferences and concerns relate to their medical care.
            (2) Payment for follow-up counseling visit.--The Secretary 
        shall establish procedures for making payments for such 
        counseling visits provided to Medicare beneficiaries under the 
        program. Such procedures shall provide for the establishment--
                    (A) of a code (or codes) to represent such 
                services; and
                    (B) of a single payment amount for such service 
                that includes the professional time of the health care 
                provider and a portion of the reasonable costs of the 
                infrastructure of the eligible provider such as would 
                be made under the applicable payment systems to that 
                provider for similar covered services.
    (d) Costs of Aids.--An eligible provider participating in the 
program shall be responsible for the costs of selecting, purchasing, 
and incorporating such patient decision aids into the provider's 
practice, and reporting data on quality and outcome measures under the 
program.
    (e) Funding.--The Secretary shall provide for the transfer from the 
Federal Supplementary Medical Insurance Trust Fund established under 
section 1841 of the Social Security Act (42 U.S.C. 1395t) of such funds 
as are necessary for the costs of carrying out the program.
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq. 
and 1395 et seq.) as may be necessary for the purpose of carrying out 
the program.
    (g) Report.--Not later than 12 months after the date of completion 
of the program, the Secretary shall submit to Congress a report on such 
program, together with recommendations for such legislation and 
administrative action as the Secretary determines to be appropriate. 
The final report shall include an evaluation of the impact of the use 
of the program on health quality, utilization of health care services, 
and on improving the quality of life of such beneficiaries.
    (h) Definitions.--In this section:
            (1) Eligible provider.--The term ``eligible provider'' 
        means the following:
                    (A) A primary care practice.
                    (B) A specialty practice.
                    (C) A multispecialty group practice.
                    (D) A hospital.
                    (E) A rural health clinic.
                    (F) A federally qualified health center (as defined 
                in section 1861(aa)(4) of the Social Security Act (42 
                U.S.C. 1395x(aa)(4)).
                    (G) An integrated delivery system.
                    (H) A State cooperative entity that includes the 
                State government and at least one other health care 
                provider which is set up for the purpose of testing 
                shared decision making and patient decision aids.
            (2) Patient decision aid.--The term ``patient decision 
        aid'' means an educational tool (such as the Internet, a video, 
        or a pamphlet) that helps patients (or, if appropriate, the 
        family caregiver of the patient) understand and communicate 
        their beliefs and preferences related to their treatment 
        options, and to decide with their health care provider what 
        treatments are best for them based on their treatment options, 
        scientific evidence, circumstances, beliefs, and preferences.
            (3) Shared decision making.--The term ``shared decision 
        making'' means a collaborative process between patient and 
        clinician that engages the patient in decision making, provides 
        patients with information about trade-offs among treatment 
        options, and facilitates the incorporation of patient 
        preferences and values into the medical plan.

     TITLE K--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND 
                            COORDINATED CARE

SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM.

    Title XVIII of the Social Security Act is amended by inserting 
after section 1866C the following new section:

             ``accountable care organization pilot program

    ``Sec. 1866D.  (a) In General.--The Secretary shall conduct a pilot 
program (in this section referred to as the `pilot program') to test 
different payment incentive models, including (to the extent 
practicable) the specific payment incentive models described in 
subsection (c), designed to reduce the growth of expenditures and 
improve health outcomes in the provision of items and services under 
this title to applicable beneficiaries (as defined in subsection (d)) 
by qualifying accountable care organizations (as defined in subsection 
(b)(1)) in order to--
            ``(1) promote accountability for a patient population and 
        coordinate items and services under parts A and B;
            ``(2) encourage investment in infrastructure and redesigned 
        care processes for high quality and efficient service delivery; 
        and
            ``(3) reward physician practices and other physician 
        organizational models for the provision of high quality and 
        efficient health care services.
    ``(b) Qualifying Accountable Care Organizations (ACOs).--
            ``(1) Qualifying aco defined.--In this section:
                    ``(A) In general.--The terms `qualifying 
                accountable care organization' and `qualifying ACO' 
                mean a group of physicians or other physician 
                organizational model (as defined in subparagraph (D)) 
                that--
                            ``(i) is organized at least in part for the 
                        purpose of providing physicians' services; and
                            ``(ii) meets such criteria as the Secretary 
                        determines to be appropriate to participate in 
                        the pilot program, including the criteria 
                        specified in paragraph (2).
                    ``(B) Inclusion of other providers.--Nothing in 
                this subsection shall be construed as preventing a 
                qualifying ACO from including a hospital or any other 
                provider of services or supplier furnishing items or 
                services for which payment may be made under this title 
                that is affiliated with the ACO under an arrangement 
                structured so that such provider or supplier 
                participates in the pilot program and shares in any 
                incentive payments under the pilot program.
                    ``(C) Physician.--The term `physician' includes, 
                except as the Secretary may otherwise provide, any 
                individual who furnishes services for which payment may 
                be made as physicians' services.
                    ``(D) Other physician organizational model.--The 
                term `other physician organization model' means, with 
                respect to a qualifying ACO any model of organization 
                under which physicians enter into agreements with other 
                providers for the purposes of participation in the 
                pilot program in order to provide high quality and 
                efficient health care services and share in any 
                incentive payments under such program.
                    ``(E) Other services.--Nothing in this paragraph 
                shall be construed as preventing a qualifying ACO from 
                furnishing items or services, for which payment may not 
                be made under this title, for purposes of achieving 
                performance goals under the pilot program.
            ``(2) Qualifying criteria.--The following are criteria 
        described in this paragraph for an organized group of 
        physicians to be a qualifying ACO:
                    ``(A) The group has a legal structure that would 
                allow the group to receive and distribute incentive 
                payments under this section.
                    ``(B) The group includes a sufficient number of 
                primary care physicians for the applicable 
                beneficiaries for whose care the group is accountable 
                (as determined by the Secretary).
                    ``(C) The group reports on quality measures in such 
                form, manner, and frequency as specified by the 
                Secretary (which may be for the group, for providers of 
                services and suppliers, or both).
                    ``(D) The group reports to the Secretary (in a 
                form, manner and frequency as specified by the 
                Secretary) such data as the Secretary determines 
                appropriate to monitor and evaluate the pilot program.
                    ``(E) The group provides notice to applicable 
                beneficiaries regarding the pilot program (as 
                determined appropriate by the Secretary).
                    ``(F) The group contributes to a best practices 
                network or website, that shall be maintained by the 
                Secretary for the purpose of sharing strategies on 
                quality improvement, care coordination, and efficiency 
                that the groups believe are effective.
                    ``(G) The group utilizes patient-centered processes 
                of care, including those that emphasize patient and 
                caregiver involvement in planning and monitoring of 
                ongoing care management plan.
                    ``(H) The group meets other criteria determined to 
                be appropriate by the Secretary.
    ``(c) Specific Payment Incentive Models.--The specific payment 
incentive models described in this subsection are the following:
            ``(1) Performance target model.--Under the performance 
        target model under this paragraph (in this paragraph referred 
        to as the `performance target model'):
                    ``(A) In general.--A qualifying ACO qualifies to 
                receive an incentive payment if expenditures for 
                applicable beneficiaries are less than a target 
                spending level or a target rate of growth. The 
                incentive payment shall be made only if savings are 
                greater than would result from normal variation in 
                expenditures for items and services covered under parts 
                A and B.
                    ``(B) Computation of performance target.--
                            ``(i) In general.--The Secretary shall 
                        establish a performance target for each 
                        qualifying ACO comprised of a base amount 
                        (described in clause (ii)) increased to the 
                        current year by an adjustment factor (described 
                        in clause (iii)). Such a target may be 
                        established on a per capita basis, as the 
                        Secretary determines to be appropriate.
                            ``(ii) Base amount.--For purposes of clause 
                        (i), the base amount in this subparagraph is 
                        equal to the average total payments (or allowed 
                        charges) under parts A and B (and may include 
                        part D, if the Secretary determines 
                        appropriate) for applicable beneficiaries for 
                        whom the qualifying ACO furnishes items and 
                        services in a base period determined by the 
                        Secretary. Such base amount may be determined 
                        on a per capita basis.
                            ``(iii) Adjustment factor.--For purposes of 
                        clause (i), the adjustment factor in this 
                        clause may equal an annual per capita amount 
                        that reflects changes in expenditures from the 
                        period of the base amount to the current year 
                        that would represent an appropriate performance 
                        target for applicable beneficiaries (as 
                        determined by the Secretary). Such adjustment 
                        factor may be determined as an amount or rate, 
                        may be determined on a national, regional, 
                        local, or organization-specific basis, and may 
                        be determined on a per capita basis. Such 
                        adjustment factor also may be adjusted for risk 
                        as determined appropriate by the Secretary.
                            ``(iv) Rebasing.--Under this model the 
                        Secretary shall periodically rebase the base 
                        expenditure amount described in clause (ii).
                    ``(C) Meeting target.--
                            ``(i) In general.--Subject to clause (ii), 
                        a qualifying ACO that meet or exceeds annual 
                        quality and performance targets for a year 
                        shall receive an incentive payment for such 
                        year equal to a portion (as determined 
                        appropriate by the Secretary) of the amount by 
                        which payments under this title for such year 
                        relative are estimated to be below the 
                        performance target for such year, as determined 
                        by the Secretary. The Secretary may establish a 
                        cap on incentive payments for a year for a 
                        qualifying ACO.
                            ``(ii) Limitation.--The Secretary shall 
                        limit incentive payments to each qualifying ACO 
                        under this paragraph as necessary to ensure 
                        that the aggregate expenditures with respect to 
                        applicable beneficiaries for such ACOs under 
                        this title (inclusive of incentive payments 
                        described in this subparagraph) do not exceed 
                        the amount that the Secretary estimates would 
                        be expended for such ACO for such beneficiaries 
                        if the pilot program under this section were 
                        not implemented.
                    ``(D) Reporting and other requirements.--In 
                carrying out such model, the Secretary may (as the 
                Secretary determines to be appropriate) incorporate 
                reporting requirements, incentive payments, and 
                penalties related to the physician quality reporting 
                initiative (PQRI), electronic prescribing, electronic 
                health records, and other similar initiatives under 
                section 1848, and may use alternative criteria than 
                would otherwise apply under such section for 
                determining whether to make such payments. The 
                incentive payments described in this subparagraph shall 
                not be included in the limit described in subparagraph 
                (C)(ii) or in the performance target model described in 
                this paragraph.
            ``(2) Partial capitation model.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                partial capitation model described in this paragraph 
                (in this paragraph referred to as a `partial capitation 
                model') is a model in which a qualifying ACO would be 
                at financial risk for some, but not all, of the items 
                and services covered under parts A and B, such as at 
                risk for some or all physicians' services or all items 
                and services under part B. The Secretary may limit a 
                partial capitation model to ACOs that are highly 
                integrated systems of care and to ACOs capable of 
                bearing risk, as determined to be appropriate by the 
                Secretary.
                    ``(B) No additional program expenditures.--Payments 
                to a qualifying ACO for applicable beneficiaries for a 
                year under the partial capitation model shall be 
                established in a manner that does not result in 
                spending more for such ACO for such beneficiaries than 
                would otherwise be expended for such ACO for such 
                beneficiaries for such year if the pilot program were 
                not implemented, as estimated by the Secretary.
            ``(3) Other payment models.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may develop other payment models that meet 
                the goals of this pilot program to improve quality and 
                efficiency.
                    ``(B) No additional program expenditures.--
                Subparagraph (B) of paragraph (2) shall apply to a 
                payment model under subparagraph (A) in a similar 
                manner as such subparagraph (B) applies to the payment 
                model under paragraph (2).
    ``(d) Applicable Beneficiaries.--
            ``(1) In general.--In this section, the term `applicable 
        beneficiary' means, with respect to a qualifying ACO, an 
        individual who--
                    ``(A) is enrolled under part B and entitled to 
                benefits under part A;
                    ``(B) is not enrolled in a Medicare Advantage plan 
                under part C or a PACE program under section 1894; and
                    ``(C) meets such other criteria as the Secretary 
                determines appropriate, which may include criteria 
                relating to frequency of contact with physicians in the 
                ACO.
            ``(2) Following applicable beneficiaries.--The Secretary 
        may monitor data on expenditures and quality of services under 
        this title after an applicable beneficiary discontinues 
        receiving services under this title through a qualifying ACO.
    ``(e) Implementation.--
            ``(1) Starting date.--The pilot program shall begin no 
        later than January 1, 2012. An agreement with a qualifying ACO 
        under the pilot program may cover a multi-year period of 
        between 3 and 5 years.
            ``(2) Waiver.--The Secretary may waive such provisions of 
        this title (including section 1877) and title XI in the manner 
        the Secretary determines necessary in order implement the pilot 
        program.
            ``(3) Performance results reports.--The Secretary shall 
        report performance results to qualifying ACOs under the pilot 
        program at least annually.
            ``(4) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the elements, parameters, scope, and duration 
                of the pilot program;
                    ``(B) the selection of qualifying ACOs for the 
                pilot program;
                    ``(C) the establishment of targets, measurement of 
                performance, determinations with respect to whether 
                savings have been achieved and the amount of savings;
                    ``(D) determinations regarding whether, to whom, 
                and in what amounts incentive payments are paid; and
                    ``(E) decisions about the extension of the program 
                under subsection (g), expansion of the program under 
                subsection (h) or extensions under subsection (i).
            ``(5) Administration.--Chapter 35 of title 44, United 
        States Code shall not apply to this section.
    ``(f) Evaluation; Monitoring.--
            ``(1) In general.--The Secretary shall evaluate the payment 
        incentive model for each qualifying ACO under the pilot program 
        to assess impacts on beneficiaries, providers of services, 
        suppliers and the program under this title. The Secretary shall 
        make such evaluation publicly available within 60 days of the 
        date of completion of such report.
            ``(2) Monitoring.--The Inspector General of the Department 
        of Health and Human Services shall provide for monitoring of 
        the operation of ACOs under the pilot program with regard to 
        violations of section 1877 (popularly known as the `Stark 
        law').
    ``(g) Extension of Pilot Agreement With Successful Organizations.--
            ``(1) Reports to congress.--Not later than 2 years after 
        the date the first agreement is entered into under this 
        section, and biennially thereafter for six years, the Secretary 
        shall submit to Congress and make publicly available a report 
        on the use of authorities under the pilot program. Each report 
        shall address the impact of the use of those authorities on 
        expenditures, access, and quality under this title.
            ``(2) Extension.--Subject to the report provided under 
        paragraph (1), with respect to a qualifying ACO, the Secretary 
        may extend the duration of the agreement for such ACO under the 
        pilot program as the Secretary determines appropriate if--
                    ``(A) the ACO receives incentive payments with 
                respect to any of the first 4 years of the pilot 
                agreement and is consistently meeting quality 
                standards; or
                    ``(B) the ACO is consistently exceeding quality 
                standards and is not increasing spending under the 
                program.
            ``(3) Termination.--The Secretary may terminate an 
        agreement with a qualifying ACO under the pilot program if such 
        ACO did not receive incentive payments or consistently failed 
        to meet quality standards in any of the first 3 years under the 
        program.
    ``(h) Expansion to Additional ACOs.--
            ``(1) Testing and refinement of payment incentive models.--
        Subject to the evaluation described in subsection (f), the 
        Secretary may enter into agreements under the pilot program 
        with additional qualifying ACOs to further test and refine 
        payment incentive models with respect to qualifying ACOs.
            ``(2) Expanding use of successful models to program 
        implementation.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may issue regulations to implement, on a 
                permanent basis, 1 or more models if, and to the extent 
                that, such models are beneficial to the program under 
                this title, as determined by the Secretary.
                    ``(B) Certification.--The Chief Actuary of the 
                Centers for Medicare & Medicaid Services shall certify 
                that 1 or more of such models described in subparagraph 
                (A) would result in estimated spending that would be 
                less than what spending would otherwise be estimated to 
                be in the absence of such expansion.
    ``(i) Treatment of Physician Group Practice Demonstration.--
            ``(1) Extension.--The Secretary may enter in to an 
        agreement with a qualifying ACO under the demonstration under 
        section 1866A, subject to rebasing and other modifications 
        deemed appropriate by the Secretary, until the pilot program 
        under this section is operational.
            ``(2) Transition.--For purposes of extension of an 
        agreement with a qualifying ACO under subsection (g)(2), the 
        Secretary shall treat receipt of an incentive payment for a 
        year by an organization under the physician group practice 
        demonstration pursuant to section 1866A as a year for which an 
        incentive payment is made under such subsection, as long as 
        such practice group practice organization meets the criteria 
        under subsection (b)(2).
    ``(j) Additional Provisions.--
            ``(1) Authority for separate incentive arrangements.--The 
        Secretary may create separate incentive arrangements (including 
        using multiple years of data, varying thresholds, varying 
        shared savings amounts, and varying shared savings limits) for 
        different categories of qualifying ACOs to reflect natural 
        variations in data availability, variation in average annual 
        attributable expenditures, program integrity, and other matters 
        the Secretary deems appropriate.
            ``(2) Encouragement of participation of smaller 
        organizations.--In order to encourage the participation of 
        smaller accountable care organizations under the pilot program, 
        the Secretary may limit a qualifying ACO's exposure to high 
        cost patients under the program.
            ``(3) Involvement in private payer arrangements.--Nothing 
        in this section shall be construed as preventing qualifying 
        ACOs participating in the pilot program from negotiating 
        similar contracts with private payers.
            ``(4) Antidiscrimination limitation.--The Secretary shall 
        not enter into an agreement with an entity to provide health 
        care items or services under the pilot program, or with an 
        entity to administer the program, unless such entity guarantees 
        that it will not deny, limit, or condition the coverage or 
        provision of benefits under the program, for individuals 
        eligible to be enrolled under such program, based on any health 
        status-related factor described in section 2702(a)(1) of the 
        Public Health Service Act.
            ``(5) Construction.--Nothing in this section shall be 
        construed to compel or require an organization to use an 
        organization-specific target growth rate for an accountable 
        care organization under this section for purposes of section 
        1848.
            ``(6) Funding.--For purposes of administering and carrying 
        out the pilot program, other than for payments for items and 
        services furnished under this title and incentive payments 
        under subsection (c)(1), in addition to funds otherwise 
        appropriated, there are appropriated to the Secretary for the 
        Center for Medicare & Medicaid Services Program Management 
        Account $25,000,000 for each of fiscal years 2010 through 2014 
        and $20,000,000 for fiscal year 2015. Amounts appropriated 
        under this paragraph for a fiscal year shall be available until 
        expended.''.

SEC. 1302. MEDICAL HOME PILOT PROGRAM.

    (a) In General.--Title XVIII of the Social Security Act is amended 
by inserting after section 1866D, as inserted by section 1301, the 
following new section:

                      ``medical home pilot program

    ``Sec. 1866E.  (a) Establishment and Medical Home Models.--
            ``(1) Establishment of pilot program.--The Secretary shall 
        establish a medical home pilot program (in this section 
        referred to as the `pilot program') for the purpose of 
        evaluating the feasibility and advisability of reimbursing 
        qualified patient-centered medical homes for furnishing medical 
        home services (as defined under subsection (b)(1)) to high need 
        beneficiaries (as defined in subsection (d)(1)(C)) and to 
        targeted high need beneficiaries (as defined in subsection 
        (c)(1)(C)).
            ``(2) Scope.--Subject to subsection (g), the pilot program 
        shall include urban, rural, and underserved areas.
            ``(3) Models of medical homes in the pilot program.--The 
        pilot program shall evaluate each of the following medical home 
        models:
                    ``(A) Independent patient-centered medical home 
                model.--Independent patient-centered medical home model 
                under subsection (c).
                    ``(B) Community-based medical home model.--
                Community-based medical home model under subsection 
                (d).
            ``(4) Participation of nurse practitioners and physician 
        assistants.--
                    ``(A) Nothing in this section shall be construed as 
                preventing a nurse practitioner from leading a patient 
                centered medical home so long as--
                            ``(i) all the requirements of this section 
                        are met; and
                            ``(ii) the nurse practitioner is acting 
                        consistently with State law.
                    ``(B) Nothing in this section shall be construed as 
                preventing a physician assistant from participating in 
                a patient centered medical home so long as--
                            ``(i) all the requirements of this section 
                        are met; and
                            ``(ii) the physician assistant is acting 
                        consistently with State law.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Patient-centered medical home services.--The term 
        `patient-centered medical home services' means services that--
                    ``(A) provide beneficiaries with direct and ongoing 
                access to a primary care or principal care by a 
                physician or nurse practitioner who accepts 
                responsibility for providing first contact, continuous 
                and comprehensive care to such beneficiary;
                    ``(B) coordinate the care provided to a beneficiary 
                by a team of individuals at the practice level across 
                office, institutional and home settings led by a 
                primary care or principal care physician or nurse 
                practitioner, as needed and appropriate;
                    ``(C) provide for all the patient's health care 
                needs or take responsibility for appropriately 
                arranging care with other qualified providers for all 
                stages of life;
                    ``(D) provide continuous access to care and 
                communication with participating beneficiaries;
                    ``(E) provide support for patient self-management, 
                proactive and regular patient monitoring, support for 
                family caregivers, use patient-centered processes, and 
                coordination with community resources;
                    ``(F) integrate readily accessible, clinically 
                useful information on participating patients that 
                enables the practice to treat such patients 
                comprehensively and systematically; and
                    ``(G) implement evidence-based guidelines and apply 
                such guidelines to the identified needs of 
                beneficiaries over time and with the intensity needed 
                by such beneficiaries.
            ``(2) Primary care.--The term `primary care' means health 
        care that is provided by a physician or nurse practitioner who 
        practices in the field of family medicine, general internal 
        medicine, geriatric medicine, or pediatric medicine.
            ``(3) Principal care.--The term `principal care' means 
        integrated, accessible health care that is provided by a 
        physician who is a medical subspecialist that addresses the 
        majority of the personal health care needs of patients with 
        chronic conditions requiring the subspecialist's expertise, and 
        for whom the subspecialist assumes care management.
    ``(c) Independent Patient-Centered Medical Home Model.--
            ``(1) In general.--
                    ``(A) Payment authority.--Under the independent 
                patient-centered medical home model under this 
                subsection, the Secretary shall make payments for 
                medical home services furnished by an independent 
                patient-centered medical home (as defined in 
                subparagraph (B)) pursuant to paragraph (3)(B) for a 
                targeted high need beneficiaries (as defined in 
                subparagraph (C)).
                    ``(B) Independent patient-centered medical home 
                defined.--In this section, the term `independent 
                patient-centered medical home' means a physician-
                directed or nurse-practitioner-directed practice that 
                is qualified under paragraph (2) as--
                            ``(i) providing beneficiaries with patient-
                        centered medical home services; and
                            ``(ii) meets such other requirements as the 
                        Secretary may specify.
                    ``(C) Targeted high need beneficiary defined.--For 
                purposes of this subsection, the term `targeted high 
                need beneficiary' means a high need beneficiary who, 
                based on a risk score as specified by the Secretary, is 
                generally within the upper 50th percentile of Medicare 
                beneficiaries.
                    ``(D) Beneficiary election to participate.--The 
                Secretary shall determine an appropriate method of 
                ensuring that beneficiaries have agreed to participate 
                in the pilot program.
                    ``(E) Implementation.--The pilot program under this 
                subsection shall begin no later than 6 months after the 
                date of the enactment of this section.
            ``(2) standard setting and qualification process for 
        patient-centered medical homes.--The Secretary shall review 
        alternative models for standard setting and qualification, and 
        shall establish a process--
                    ``(A) to establish standards to enable medical 
                practices to qualify as patient-centered medical homes; 
                and
                    ``(B) to initially provide for the review and 
                certification of medical practices as meeting such 
                standards.
            ``(3)  Payment.--
                    ``(A) Establishment of methodology.--The Secretary 
                shall establish a methodology for the payment for 
                medical home services furnished by independent patient-
                centered medical homes. Under such methodology, the 
                Secretary shall adjust payments to medical homes based 
                on beneficiary risk scores to ensure that higher 
                payments are made for higher risk beneficiaries.
                    ``(B) Per beneficiary per month payments.--Under 
                such payment methodology, the Secretary shall pay 
                independent patient-centered medical homes a monthly 
                fee for each targeted high need beneficiary who 
                consents to receive medical home services through such 
                medical home.
                    ``(C) Prospective payment.--The fee under 
                subparagraph (B) shall be paid on a prospective basis.
                    ``(D) Amount of payment.--In determining the amount 
                of such fee, the Secretary shall consider the 
                following:
                            ``(i) The clinical work and practice 
                        expenses involved in providing the medical home 
                        services provided by the independent patient-
                        centered medical home (such as providing 
                        increased access, care coordination, population 
                        disease management, and teaching self-care 
                        skills for managing chronic illnesses) for 
                        which payment is not made under this title as 
                        of the date of the enactment of this section.
                            ``(ii) Allow for differential payments 
                        based on capabilities of the independent 
                        patient-centered medical home.
                            ``(iii) Use appropriate risk-adjustment in 
                        determining the amount of the per beneficiary 
                        per month payment under this paragraph in a 
                        manner that ensures that higher payments are 
                        made for higher risk beneficiaries.
            ``(4) Encouraging participation of variety of practices.--
        The pilot program under this subsection shall be designed to 
        include the participation of physicians in practices with fewer 
        than 10 full-time equivalent physicians, as well as physicians 
        in larger practices, particularly in underserved and rural 
        areas, as well as federally qualified community health centers, 
        and rural health centers.
            ``(5) No duplication in pilot participation.--A physician 
        in a group practice that participates in the accountable care 
        organization pilot program under section 1866D shall not be 
        eligible to participate in the pilot program under this 
        subsection, unless the pilot program under this section has 
        been implemented on a permanent basis under subsection (e)(3).
    ``(d) Community-Based Medical Home Model.--
            ``(1) In general.--
                    ``(A) Authority for payments.--Under the community-
                based medical home model under this subsection (in this 
                section referred to as the `CBMH model'), the Secretary 
                shall make payments for the furnishing of medical home 
                services by a community-based medical home (as defined 
                in subparagraph (B)) pursuant to paragraph (5)(B) for 
                high need beneficiaries.
                    ``(B) Community-based medical home defined.--In 
                this section, the term `community-based medical home' 
                means a nonprofit community-based or State-based 
                organization that is certified under paragraph (2) as 
                meeting the following requirements:
                            ``(i) The organization provides 
                        beneficiaries with medical home services.
                            ``(ii) The organization provides medical 
                        home services under the supervision of and in 
                        close collaboration with the primary care or 
                        principal care physician or nurse practitioner 
                        designated by the beneficiary as his or her 
                        community-based medical home provider.
                            ``(iii) The organization employs community 
                        health workers, including nurses or other non-
                        physician practitioners, lay health workers, or 
                        other persons as determined appropriate by the 
                        Secretary, that assist the primary or principal 
                        care physician or nurse practitioner in chronic 
                        care management activities such as teaching 
                        self-care skills for managing chronic 
                        illnesses, transitional care services, care 
                        plan setting, medication therapy management 
                        services for patients with multiple chronic 
                        diseases, or help beneficiaries access the 
                        health care and community-based resources in 
                        their local geographic area.
                            ``(iv) The organization meets such other 
                        requirements as the Secretary may specify.
                    ``(C) High need beneficiary.--In this section, the 
                term `high need beneficiary' means an individual who 
                requires regular medical monitoring, advising, or 
                treatment.
            ``(2) Qualification process for community-based medical 
        homes.--The Secretary shall establish a process--
                    ``(A) for the initial qualification of community-
                based or State-based organizations as community-based 
                medical homes; and
                    ``(B) to provide for the review and qualification 
                of such community-based and State-based organizations 
                pursuant to criteria established by the Secretary.
            ``(3) Duration.--The pilot program for community-based 
        medical homes under this subsection shall start no later than 2 
        years after the date of the enactment of this section. Each 
        demonstration site under the pilot program shall operate for a 
        period of up to 5 years after the initial implementation phase, 
        without regard to the receipt of a initial implementation 
        funding under subsection (i).
            ``(4) Preference.--In selecting sites for the CBMH model, 
        the Secretary may give preference to--
                    ``(A) applications from geographic areas that 
                propose to coordinate health care services for 
                chronically ill beneficiaries across a variety of 
                health care settings, such as primary care physician 
                practices with fewer than 10 physicians, specialty 
                physicians, nurse practitioner practices, Federally 
                qualified health centers, rural health clinics, and 
                other settings;
                    ``(B) applications that include other payors that 
                furnish medical home services for chronically ill 
                patients covered by such payors; and
                    ``(C) applications from States that propose to use 
                the medical home model to coordinate health care 
                services for individuals enrolled under this title, 
                individuals enrolled under title XIX, and full-benefit 
                dual eligible individuals (as defined in section 
                1935(c)(6)) with chronic diseases across a variety of 
                health care settings.
            ``(5)  Payments.--
                    ``(A) Establishment of methodology.--The Secretary 
                shall establish a methodology for the payment for 
                medical home services furnished under the CBMH model.
                    ``(B) Per beneficiary per month payments.--Under 
                such payment methodology, the Secretary shall make two 
                separate monthly payments for each high need 
                beneficiary who consents to receive medical home 
                services through such medical home, as follows:
                            ``(i) Payment to community-based 
                        organization.--One monthly payment to a 
                        community-based or State-based organization.
                            ``(ii) Payment to primary or principal care 
                        practice.--One monthly payment to the primary 
                        or principal care practice for such 
                        beneficiary.
                    ``(C) Prospective payment.--The payments under 
                subparagraph (B) shall be paid on a prospective basis.
                    ``(D) Amount of payment.--In determining the amount 
                of such payment, the Secretary shall consider the 
                following:
                            ``(i) The clinical work and practice 
                        expenses involved in providing the medical home 
                        services provided by the community-based 
                        medical home (such as providing increased 
                        access, care coordination, care plan setting, 
                        population disease management, and teaching 
                        self-care skills for managing chronic 
                        illnesses) for which payment is not made under 
                        this title as of the date of the enactment of 
                        this section.
                            ``(ii) Use appropriate risk-adjustment in 
                        determining the amount of the per beneficiary 
                        per month payment under this paragraph.
            ``(6) Initial implementation funding.--The Secretary may 
        make available initial implementation funding to a community 
        based or State-based organization or a State that is 
        participating in the pilot program under this subsection. Such 
        organization shall provide the Secretary with a detailed 
        implementation plan that includes how such funds will be used.
    ``(e) Expansion of Program.--
            ``(1) Evaluation of cost and quality.--The Secretary shall 
        evaluate the pilot program to determine--
                    ``(A) the extent to which medical homes result in--
                            ``(i) improvement in the quality and 
                        coordination of health care services, 
                        particularly with regard to the care of complex 
                        patients;
                            ``(ii) improvement in reducing health 
                        disparities;
                            ``(iii) reductions in preventable 
                        hospitalizations;
                            ``(iv) prevention of readmissions;
                            ``(v) reductions in emergency room visits;
                            ``(vi) improvement in health outcomes, 
                        including patient functional status where 
                        applicable;
                            ``(vii) improvement in patient 
                        satisfaction;
                            ``(viii) improved efficiency of care such 
                        as reducing duplicative diagnostic tests and 
                        laboratory tests; and
                            ``(ix) reductions in health care 
                        expenditures; and
                    ``(B) the feasability and advisability of 
                reimbursing medical homes for medical home services 
                under this title on a permanent basis.
            ``(2) Report.--Not later than 60 days after the date of 
        completion of the evaluation under paragraph (1), the Secretary 
        shall submit to Congress and make available to the public a 
        report on the findings of the evaluation under paragraph (1).
            ``(3) Expansion of program.--
                    ``(A) In general.--Subject to the results of the 
                evaluation under paragraph (1) and subparagraph (B), 
                the Secretary may issue regulations to implement, on a 
                permanent basis, one or more models, if, and to the 
                extent that such model or models, are beneficial to the 
                program under this title, including that such 
                implementation will improve quality of care, as 
                determined by the Secretary.
                    ``(B) Certification requirement.--The Secretary may 
                not issue such regulations unless the Chief Actuary of 
                the Centers for Medicare & Medicaid Services certifies 
                that the expansion of the components of the pilot 
                program described in subparagraph (A) would result in 
                estimated spending under this title that would be no 
                more than the level of spending that the Secretary 
                estimates would otherwise be spent under this title in 
                the absence of such expansion.
    ``(f) Administrative Provisions.--
            ``(1) No duplication in payments.--During any month, the 
        Secretary may not make payments under this section under more 
        than one model or through more than one medical home under any 
        model for the furnishing of medical home services to an 
        individual.
            ``(2) No effect on payment for evaluation and management 
        services.--Payments made under this section are in addition to, 
        and have no effect on the amount of, payment for evaluation and 
        management services made under this title.
            ``(3) Administration.--Chapter 35 of title 44, United 
        States Code shall not apply to this section.
    ``(g) Funding.--
            ``(1) Operational costs.--For purposes of administering and 
        carrying out the pilot program (including the design, 
        implementation, technical assistance for and evaluation of such 
        program), in addition to funds otherwise available, there shall 
        be transferred from the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 to the Secretary for the Centers 
        for Medicare & Medicaid Services Program Management Account 
        $6,000,000 for each of fiscal years 2010 through 2014. Amounts 
        appropriated under this paragraph for a fiscal year shall be 
        available until expended.
            ``(2) Patient-centered medical home services.--In addition 
        to funds otherwise available, there shall be available to the 
        Secretary for the Centers for Medicare & Medicaid Services, 
        from the Federal Supplementary Medical Insurance Trust Fund 
        under section 1841--
                    ``(A) $200,000,000 for each of fiscal years 2010 
                through 2014 for payments for medical home services 
                under subsection (c)(3); and
                    ``(B) $125,000,000 for each of fiscal years 2012 
                through 2016, for payments under subsection (d)(5).
        Amounts available under this paragraph for a fiscal year shall 
        be available until expended.
            ``(3) Initial implementation.--In addition to funds 
        otherwise available, there shall be available to the Secretary 
        for the Centers for Medicare & Medicaid Services, from the 
        Federal Supplementary Medical Insurance Trust Fund under 
        section 1841, $2,500,000 for each of fiscal years 2010 through 
        2012, under subsection (d)(6). Amounts available under this 
        paragraph for a fiscal year shall be available until expended.
    ``(h) Treatment of TRHCA Medicare Medical Home Demonstration 
Funding.--
            ``(1) In addition to funds otherwise available for payment 
        of medical home services under subsection (c)(3), there shall 
        also be available the amount provided in subsection (g) of 
        section 204 of division B of the Tax Relief and Health Care Act 
        of 2006 (42 U.S.C. 1395b-1 note).
            ``(2) Notwithstanding section 1302(c) of the America's 
        Affordable Health Choices Act of 2009, in addition to funds 
        provided in paragraph (1) and subsection (g)(2)(A), the funding 
        for medical home services that would otherwise have been 
        available if such section 204 medical home demonstration had 
        been implemented (without regard to subsection (g) of such 
        section) shall be available to the independent patient-centered 
        medical home model described in subsection (c).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after the date of the enactment of this 
Act.
    (c) Conforming Repeal.--Section 204 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395b-1 note), as amended by 
section 133(a)(2) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275), is repealed.

SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY CARE SERVICES.

    (a) In General.--Section 1833 of the Social Security Act is amended 
by inserting after subsection (o) the following new subsection:
    ``(p) Primary Care Payment Incentives.--
            ``(1) In general.--In the case of primary care services (as 
        defined in paragraph (2)) furnished on or after January 1, 
        2011, by a primary care practitioner (as defined in paragraph 
        (3)) for which amounts are payable under section 1848, in 
        addition to the amount otherwise paid under this part there 
        shall also be paid to the practitioner (or to an employer or 
        facility in the cases described in clause (A) of section 
        1842(b)(6)) (on a monthly or quarterly basis) from the Federal 
        Supplementary Medical Insurance Trust Fund an amount equal 5 
        percent (or 10 percent if the practitioner predominately 
        furnishes such services in an area that is designated (under 
        section 332(a)(1)(A) of the Public Health Service Act) as a 
        primary care health professional shortage area.
            ``(2) Primary care services defined.--In this subsection, 
        the term `primary care services'--
                    ``(A) means services which are evaluation and 
                management services as defined in section 
                1848(j)(5)(A); and
                    ``(B) includes services furnished by another health 
                care professional that would be described in 
                subparagraph (A) if furnished by a physician.
            ``(3) Primary care practitioner defined.--In this 
        subsection, the term `primary care practitioner'--
                    ``(A) means a physician or other health care 
                practitioner (including a nurse practitioner) who--
                            ``(i) specializes in family medicine, 
                        general internal medicine, general pediatrics, 
                        geriatrics, or obstetrics and gynecology; and
                            ``(ii) has allowed charges for primary care 
                        services that account for at least 50 percent 
                        of the physician's or practitioner's total 
                        allowed charges under section 1848, as 
                        determined by the Secretary for the most recent 
                        period for which data are available; and
                    ``(B) includes a physician assistant who is under 
                the supervision of a practitioner described in 
                subparagraph (A).
            ``(4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise, respecting--
                    ``(A) any determination or designation under this 
                subsection;
                    ``(B) the identification of services as primary 
                care services under this subsection; and
                    ``(C) the identification of a practitioner as a 
                primary care practitioner under this subsection.
            ``(5) Coordination with other payments.--
                    ``(A) With other primary care incentives.--The 
                provisions of this subsection shall not be taken into 
                account in applying subsections (m) and (u) and any 
                payment under such subsections shall not be taken into 
                account in computing payments under this subsection.
                    ``(B) With quality incentives.--Payments under this 
                subsection shall not be taken into account in 
                determining the amounts that would otherwise be paid 
                under this part for purposes of section 
                1834(g)(2)(B).''.
    (b) Conforming Amendments.--
            (1) Section 1833 of such Act (42 U.S.C. 1395l(m)) is 
        amended by redesignating paragraph (4) as paragraph (5) and by 
        inserting after paragraph (3) the following new paragraph:
    ``(4) The provisions of this subsection shall not be taken into 
account in applying subsections (m) or (u) and any payment under such 
subsections shall not be taken into account in computing payments under 
this subsection.''.
            (2) Section 1848(m)(5)(B) of such Act (42 U.S.C. 1395w-
        4(m)(5)(B)) is amended by inserting ``, (p),'' after ``(m)''.
            (3) Section 1848(o)(1)(B)(iv) of such Act (42 U.S.C. 1395w-
        4(o)(1)(B)(iv)) is amended by inserting ``primary care'' before 
        ``health professional shortage area''.

SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CERTIFIED NURSE-MIDWIVES.

    (a) In General.--Section 1833(a)(1)(K) of the Social Security Act 
(42 U.S.C.1395l(a)(1)(K)) is amended by striking ``(but in no event'' 
and all that follows through ``performed by a physician)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2011.

SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR PREVENTIVE SERVICES.

    (a) Medicare Covered Preventive Services Defined.--Section 1861 of 
the Social Security Act (42 U.S.C. 1395x), as amended by section 
1235(a)(2), is amended by adding at the end the following new 
subsection:

                 ``Medicare Covered Preventive Services

    ``(iii)(1) Subject to the succeeding provisions of this subsection, 
the term `Medicare covered preventive services' means the following:
            ``(A) Prostate cancer screening tests (as defined in 
        subsection (oo)).
            ``(B) Colorectal cancer screening tests (as defined in 
        subsection (pp) and when applicable as described in section 
        1305).
            ``(C) Diabetes outpatient self-management training services 
        (as defined in subsection (qq)).
            ``(D) Screening for glaucoma for certain individuals (as 
        described in subsection (s)(2)(U)).
            ``(E) Medical nutrition therapy services for certain 
        individuals (as described in subsection (s)(2)(V)).
            ``(F) An initial preventive physical examination (as 
        defined in subsection (ww)).
            ``(G) Cardiovascular screening blood tests (as defined in 
        subsection (xx)(1)).
            ``(H) Diabetes screening tests (as defined in subsection 
        (yy)).
            ``(I) Ultrasound screening for abdominal aortic aneurysm 
        for certain individuals (as described in described in 
        subsection (s)(2)(AA)).
            ``(J) Pneumococcal and influenza vaccines and their 
        administration (as described in subsection (s)(10)(A)) and 
        hepatitis B vaccine and its administration for certain 
        individuals (as described in subsection (s)(10)(B)).
            ``(K) Screening mammography (as defined in subsection 
        (jj)).
            ``(L) Screening pap smear and screening pelvic exam (as 
        defined in subsection (nn)).
            ``(M) Bone mass measurement (as defined in subsection 
        (rr)).
            ``(N) Kidney disease education services (as defined in 
        subsection (ggg)).
            ``(O) Additional preventive services (as defined in 
        subsection (ddd)).
    ``(2) With respect to specific Medicare covered preventive 
services, the limitations and conditions described in the provisions 
referenced in paragraph (1) with respect to such services shall 
apply.''.
    (b) Payment and Elimination of Cost-sharing.--
            (1) In general.--
                    (A) In general.--Section 1833(a) of the Social 
                Security Act (42 U.S.C. 1395l(a)) is amended by adding 
                after and below paragraph (9) the following:
``With respect to Medicare covered preventive services, in any case in 
which the payment rate otherwise provided under this part is computed 
as a percent of less than 100 percent of an actual charge, fee schedule 
rate, or other rate, such percentage shall be increased to 100 
percent.''.
                    (B) Application to sigmoidoscopies and 
                colonoscopies.--Section 1834(d) of such Act (42 U.S.C. 
                1395m(d)) is amended--
                            (i) in paragraph (2)(C), by amending clause 
                        (ii) to read as follows:
                            ``(ii) No coinsurance.--In the case of a 
                        beneficiary who receives services described in 
                        clause (i), there shall be no coinsurance 
                        applied.''; and
                            (ii) in paragraph (3)(C), by amending 
                        clause (ii) to read as follows:
                            ``(ii) No coinsurance.--In the case of a 
                        beneficiary who receives services described in 
                        clause (i), there shall be no coinsurance 
                        applied.''.
            (2) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``screening 
                mammography (as defined in section 1861(jj)) and 
                diagnostic mammography'' and inserting ``diagnostic 
                mammograms and Medicare covered preventive services (as 
                defined in section 1861(iii)(1))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                            (i) in subparagraph (F), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (G)(ii), by adding 
                        ``and'' at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(H) with respect to additional preventive 
                services (as defined in section 1861(ddd)) furnished by 
                an outpatient department of a hospital, the amount 
                determined under paragraph (1)(W);''.
            (3) Waiver of application of deductible for all preventive 
        services.--The first sentence of section 1833(b) of the Social 
        Security Act (42 U.S.C. 1395l(b)) is amended--
                    (A) in clause (1), by striking ``items and services 
                described in section 1861(s)(10)(A)'' and inserting 
                ``Medicare covered preventive services (as defined in 
                section 1861(iii))'';
                    (B) by inserting ``and'' before ``(4)''; and
                    (C) by striking clauses (5) through (8).
            (4) Application to providers of services.--Section 
        1866(a)(2)(A)(ii) of such Act (42 U.S.C. 1395cc(a)(2)(A)(ii)) 
        is amended by inserting ``other than for Medicare covered 
        preventive services and'' after ``for such items and services 
        (''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2011.

SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL CANCER SCREENING TESTS 
              REGARDLESS OF CODING, SUBSEQUENT DIAGNOSIS, OR ANCILLARY 
              TISSUE REMOVAL.

    (a) In General.--Section 1833(b) of the Social Security Act (42 
U.S.C. 1395l(b)), as amended by section 1305(b)(3), is amended by 
adding at the end the following new sentence: ``Clause (1) of the first 
sentence of this subsection shall apply with respect to a colorectal 
cancer screening test regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or for the 
removal of tissue or other matter or other procedure that is furnished 
in connection with, as a result of, and in the same clinical encounter 
as, the screening test.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERVICES FROM COVERAGE 
              UNDER THE MEDICARE SKILLED NURSING FACILITY PROSPECTIVE 
              PAYMENT SYSTEM AND CONSOLIDATED PAYMENT.

    (a) In General.--Section 1888(e)(2)(A)(ii) of the Social Security 
Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``clinical 
social worker services,'' after ``qualified psychologist services,''.
    (b) Conforming Amendment.--Section 1861(hh)(2) of the Social 
Security Act (42 U.S.C. 1395x(hh)(2)) is amended by striking ``and 
other than services furnished to an inpatient of a skilled nursing 
facility which the facility is required to provide as a requirement for 
participation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after July 1, 2010.

SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND 
              MENTAL HEALTH COUNSELOR SERVICES.

    (a) Coverage of Marriage and Family Therapist Services.--
            (1) Coverage of services.--Section 1861(s)(2) of the Social 
        Security Act (42 U.S.C. 1395x(s)(2)), as amended by section 
        1235, is amended--
                    (A) in subparagraph (EE), by striking ``and'' at 
                the end;
                    (B) in subparagraph (FF), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(GG) marriage and family therapist services (as 
                defined in subsection (jjj));''.
            (2) Definition.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x), as amended by sections 1235 and 1305, is 
        amended by adding at the end the following new subsection:

                ``Marriage and Family Therapist Services

    ``(jjj)(1) The term `marriage and family therapist services' means 
services performed by a marriage and family therapist (as defined in 
paragraph (2)) for the diagnosis and treatment of mental illnesses, 
which the marriage and family therapist is legally authorized to 
perform under State law (or the State regulatory mechanism provided by 
State law) of the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as incident to a 
physician's professional service, but only if no facility or other 
provider charges or is paid any amounts with respect to the furnishing 
of such services.
    ``(2) The term `marriage and family therapist' means an individual 
who--
            ``(A) possesses a master's or doctoral degree which 
        qualifies for licensure or certification as a marriage and 
        family therapist pursuant to State law;
            ``(B) after obtaining such degree has performed at least 2 
        years of clinical supervised experience in marriage and family 
        therapy; and
            ``(C) is licensed or certified as a marriage and family 
        therapist in the State in which marriage and family therapist 
        services are performed.''.
            (3) Provision for payment under part b.--Section 
        1832(a)(2)(B) of the Social Security Act (42 U.S.C. 
        1395k(a)(2)(B)) is amended by adding at the end the following 
        new clause:
                            ``(v) marriage and family therapist 
                        services;''.
            (4) Amount of payment.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                            (i) by striking ``and'' before ``(W)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (X) with respect 
                        to marriage and family therapist services under 
                        section 1861(s)(2)(GG), the amounts paid shall 
                        be 80 percent of the lesser of the actual 
                        charge for the services or 75 percent of the 
                        amount determined for payment of a psychologist 
                        under clause (L)''.
                    (B) Development of criteria with respect to 
                consultation with a health care professional.--The 
                Secretary of Health and Human Services shall, taking 
                into consideration concerns for patient 
                confidentiality, develop criteria with respect to 
                payment for marriage and family therapist services for 
                which payment may be made directly to the marriage and 
                family therapist under part B of title XVIII of the 
                Social Security Act (42 U.S.C. 1395j et seq.) under 
                which such a therapist must agree to consult with a 
                patient's attending or primary care physician or nurse 
                practitioner in accordance with such criteria.
            (5) Exclusion of marriage and family therapist services 
        from skilled nursing facility prospective payment system.--
        Section 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
        1395yy(e)(2)(A)(ii)), as amended by section 1307(a), is amended 
        by inserting ``marriage and family therapist services (as 
        defined in subsection (jjj)(1)),'' after ``clinical social 
        worker services,''.
            (6) Coverage of marriage and family therapist services 
        provided in rural health clinics and federally qualified health 
        centers.--Section 1861(aa)(1)(B) of the Social Security Act (42 
        U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a 
        clinical social worker (as defined in subsection (hh)(1)),'' 
        and inserting ``, by a clinical social worker (as defined in 
        subsection (hh)(1)), or by a marriage and family therapist (as 
        defined in subsection (jjj)(2)),''.
            (7) Inclusion of marriage and family therapists as 
        practitioners for assignment of claims.--Section 1842(b)(18)(C) 
        of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)) is 
        amended by adding at the end the following new clause:
            ``(vii) A marriage and family therapist (as defined in 
        section 1861(jjj)(2)).''.
    (b) Coverage of Mental Health Counselor Services.--
            (1) Coverage of services.--Section 1861(s)(2) of the Social 
        Security Act (42 U.S.C. 1395x(s)(2)), as previously amended, is 
        further amended--
                    (A) in subparagraph (FF), by striking ``and'' at 
                the end;
                    (B) in subparagraph (GG), by inserting ``and'' at 
                the end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(HH) mental health counselor services (as defined in 
        subsection (kkk)(1));''.
            (2) Definition.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x), as previously amended, is amended by adding 
        at the end the following new subsection:

                   ``Mental Health Counselor Services

    ``(kkk)(1) The term `mental health counselor services' means 
services performed by a mental health counselor (as defined in 
paragraph (2)) for the diagnosis and treatment of mental illnesses 
which the mental health counselor is legally authorized to perform 
under State law (or the State regulatory mechanism provided by the 
State law) of the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as incident to a 
physician's professional service, but only if no facility or other 
provider charges or is paid any amounts with respect to the furnishing 
of such services.
    ``(2) The term `mental health counselor' means an individual who--
            ``(A) possesses a master's or doctor's degree which 
        qualifies the individual for licensure or certification for the 
        practice of mental health counseling in the State in which the 
        services are performed;
            ``(B) after obtaining such a degree has performed at least 
        2 years of supervised mental health counselor practice; and
            ``(C) is licensed or certified as a mental health counselor 
        or professional counselor by the State in which the services 
        are performed.''.
            (3) Provision for payment under part b.--Section 
        1832(a)(2)(B) of the Social Security Act (42 U.S.C. 
        1395k(a)(2)(B)), as amended by subsection (a)(3), is further 
        amended--
                    (A) by striking ``and'' at the end of clause (iv);
                    (B) by adding ``and'' at the end of clause (v); and
                    (C) by adding at the end the following new clause:
                            ``(vi) mental health counselor services;''.
            (4) Amount of payment.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                subsection (a), is further amended--
                            (i) by striking ``and''before ``(X)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (Y), with 
                        respect to mental health counselor services 
                        under section 1861(s)(2)(HH), the amounts paid 
                        shall be 80 percent of the lesser of the actual 
                        charge for the services or 75 percent of the 
                        amount determined for payment of a psychologist 
                        under clause (L)''.
                    (B) Development of criteria with respect to 
                consultation with a physician.--The Secretary of Health 
                and Human Services shall, taking into consideration 
                concerns for patient confidentiality, develop criteria 
                with respect to payment for mental health counselor 
                services for which payment may be made directly to the 
                mental health counselor under part B of title XVIII of 
                the Social Security Act (42 U.S.C. 1395j et seq.) under 
                which such a counselor must agree to consult with a 
                patient's attending or primary care physician in 
                accordance with such criteria.
            (5) Exclusion of mental health counselor services from 
        skilled nursing facility prospective payment system.--Section 
        1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 
        1395yy(e)(2)(A)(ii)), as amended by section 1307(a) and 
        subsection (a), is amended by inserting ``mental health 
        counselor services (as defined in section 1861(kkk)(1)),'' 
        after ``marriage and family therapist services (as defined in 
        subsection (jjj)(1)),''.
            (6) Coverage of mental health counselor services provided 
        in rural health clinics and federally qualified health 
        centers.--Section 1861(aa)(1)(B) of the Social Security Act (42 
        U.S.C. 1395x(aa)(1)(B)), as amended by subsection (a), is 
        amended by striking ``or by a marriage and family therapist (as 
        defined in subsection (jjj)(2)),'' and inserting ``by a 
        marriage and family therapist (as defined in subsection 
        (jjj)(2)), or a mental health counselor (as defined in 
        subsection (kkk)(2)),''.
            (7) Inclusion of mental health counselors as practitioners 
        for assignment of claims.--Section 1842(b)(18)(C) of the Social 
        Security Act (42 U.S.C. 1395u(b)(18)(C)), as amended by 
        subsection (a)(7), is amended by adding at the end the 
        following new clause:
            ``(viii) A mental health counselor (as defined in section 
        1861(kkk)(2)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2011.

SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2011''.

SEC. 1310. EXPANDING ACCESS TO VACCINES.

    (a) In General.--Paragraph (10) of section 1861(s) of the Social 
Security Act (42 U.S.C. 1395w(s)) is amended to read as follows:
            ``(10) federally recommended vaccines (as defined in 
        subsection (lll)) and their respective administration;''.
    (b) Federally Recommended Vaccines Defined.--Section 1861 of such 
Act is further amended by adding at the end the following new 
subsection:

                    ``Federally Recommended Vaccines

    ``(lll) The term `federally recommended vaccine' means an approved 
vaccine recommended by the Advisory Committee on Immunization Practices 
(an advisory committee established by the Secretary, acting through the 
Director of the Centers for Disease Control and Prevention).''.
    (c) Conforming Amendments.--
            (1) Section 1833 of such Act (42 U.S.C. 1395l) is amended, 
        in each of subsections (a)(1)(B), (a)(2)(G), (a)(3)(A), and 
        (b)(1) (as amended by section 1305(b)), by striking 
        ``1861(s)(10)(A)'' or ``1861(s)(10)(B)'' and inserting 
        ``1861(s)(10)'' each place it appears.
            (2) Section 1842(o)(1)(A)(iv) of such Act (42 U.S.C. 
        1395u(o)(1)(A)(iv)) is amended--
                    (A) by striking ``subparagraph (A) or (B) of''; and
                    (B) by inserting before the period the following: 
                ``and before January 1, 2011, and influenza vaccines 
                furnished on or after January 1, 2011''.
            (3) Section 1847A(c)(6) of such Act (42 U.S.C. 1395w-
        3a(c)(6)) is amended by striking subparagraph (G) and inserting 
        the following:
                    ``(G) Implementation.--Chapter 35 of title 44, 
                United States Code shall not apply to manufacturer 
                provision of information pursuant to section 
                1927(b)(3)(A)(iii) for purposes of implementation of 
                this section.''.
            (4) Section 1860D-2(e)(1)(B) of such Act (42 U.S.C. 1395w-
        102(e)(1)(B)) is amended by striking ``such term includes a 
        vaccine'' and all that follows through ``its administration) 
        and''.
            (5) Section 1861(ww)(2)(A) of such Act (42 U.S.C. 
        1395x(ww)(2)(A))) is amended by striking ``Pneumococcal, 
        influenza, and hepatitis B and administration'' and inserting 
        ``Federally recommended vaccines (as defined in subsection 
        (lll)) and their respective administration''.
            (6) Section 1861(iii)(1) of such Act, as added by section 
        1305(a), is amended by amending subparagraph (J) to read as 
        follows:
            ``(J) Federally recommended vaccines (as defined in 
        subsection (lll)) and their respective administration.''.
            (7) Section 1927(b)(3)(A)(iii) of such Act (42 U.S.C. 
        1396r-8(b)(3)(A)(iii)) is amended, in the matter following 
        subclause (III), by inserting ``(A)(iv) (including influenza 
        vaccines furnished on or after January 1, 2011),'' after 
        ``described in subparagraph.''
    (d) Effective Dates.--The amendments made by--
            (1) this section (other than by subsection (c)(7)) shall 
        apply to vaccines administered on or after January 1, 2011; and
            (2) by subsection (c)(7) shall apply to calendar quarters 
        beginning on or after January 1, 2010.

                            TITLE L--QUALITY

             Subtitle A--Comparative Effectiveness Research

SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.

    (a) In General.--title XI of the Social Security Act is amended by 
adding at the end the following new part:

              ``Part D--Comparative Effectiveness Research

                  ``comparative effectiveness research

    ``Sec. 1181.  (a) Center for Comparative Effectiveness Research 
Established.--
            ``(1) In general.--The Secretary shall establish within the 
        Agency for Healthcare Research and Quality a Center for 
        Comparative Effectiveness Research (in this section referred to 
        as the `Center') to conduct, support, and synthesize research 
        (including research conducted or supported under section 1013 
        of the Medicare Prescription Drug, Improvement, and 
        Modernization Act of 2003) with respect to the outcomes, 
        effectiveness, and appropriateness of health care services and 
        procedures in order to identify the manner in which diseases, 
        disorders, and other health conditions can most effectively and 
        appropriately be prevented, diagnosed, treated, and managed 
        clinically.
            ``(2) Duties.--The Center shall--
                    ``(A) conduct, support, and synthesize research 
                relevant to the comparative effectiveness of the full 
                spectrum of health care items, services and systems, 
                including pharmaceuticals, medical devices, medical and 
                surgical procedures, and other medical interventions;
                    ``(B) conduct and support systematic reviews of 
                clinical research, including original research 
                conducted subsequent to the date of the enactment of 
                this section;
                    ``(C) continuously develop rigorous scientific 
                methodologies for conducting comparative effectiveness 
                studies, and use such methodologies appropriately;
                    ``(D) submit to the Comparative Effectiveness 
                Research Commission, the Secretary, and Congress 
                appropriate relevant reports described in subsection 
                (d)(2); and
                    ``(E) encourage, as appropriate, the development 
                and use of clinical registries and the development of 
                clinical effectiveness research data networks from 
                electronic health records, post marketing drug and 
                medical device surveillance efforts, and other forms of 
                electronic health data.
            ``(3) Powers.--
                    ``(A) Obtaining official data.--The Center may 
                secure directly from any department or agency of the 
                United States information necessary to enable it to 
                carry out this section. Upon request of the Center, the 
                head of that department or agency shall furnish that 
                information to the Center on an agreed upon schedule.
                    ``(B) Data collection.--In order to carry out its 
                functions, the Center shall--
                            ``(i) utilize existing information, both 
                        published and unpublished, where possible, 
                        collected and assessed either by its own staff 
                        or under other arrangements made in accordance 
                        with this section,
                            ``(ii) carry out, or award grants or 
                        contracts for, original research and 
                        experimentation, where existing information is 
                        inadequate, and
                            ``(iii) adopt procedures allowing any 
                        interested party to submit information for the 
                        use by the Center and Commission under 
                        subsection (b) in making reports and 
                        recommendations.
                    ``(C) Access of gao to information.--The 
                Comptroller General shall have unrestricted access to 
                all deliberations, records, and nonproprietary data of 
                the Center and Commission under subsection (b), 
                immediately upon request.
                    ``(D) Periodic audit.--The Center and Commission 
                under subsection (b) shall be subject to periodic audit 
                by the Comptroller General.
    ``(b) Oversight by Comparative Effectiveness Research Commission.--
            ``(1) In general.--The Secretary shall establish an 
        independent Comparative Effectiveness Research Commission (in 
        this section referred to as the `Commission') to oversee and 
        evaluate the activities carried out by the Center under 
        subsection (a), subject to the authority of the Secretary, to 
        ensure such activities result in highly credible research and 
        information resulting from such research.
            ``(2) Duties.--The Commission shall--
                    ``(A) determine national priorities for research 
                described in subsection (a) and in making such 
                determinations consult with a broad array of public and 
                private stakeholders, including patients and health 
                care providers and payers;
                    ``(B) monitor the appropriateness of use of the 
                CERTF described in subsection (g) with respect to the 
                timely production of comparative effectiveness research 
                determined to be a national priority under subparagraph 
                (A);
                    ``(C) identify highly credible research methods and 
                standards of evidence for such research to be 
                considered by the Center;
                    ``(D) review the methodologies developed by the 
                center under subsection (a)(2)(C);
                    ``(E) not later than one year after the date of the 
                enactment of this section, enter into an arrangement 
                under which the Institute of Medicine of the National 
                Academy of Sciences shall conduct an evaluation and 
                report on standards of evidence for such research;
                    ``(F) support forums to increase stakeholder 
                awareness and permit stakeholder feedback on the 
                efforts of the Center to advance methods and standards 
                that promote highly credible research;
                    ``(G) make recommendations for policies that would 
                allow for public access of data produced under this 
                section, in accordance with appropriate privacy and 
                proprietary practices, while ensuring that the 
                information produced through such data is timely and 
                credible;
                    ``(H) appoint a clinical perspective advisory panel 
                for each research priority determined under 
                subparagraph (A), which shall consult with patients and 
                advise the Center on research questions, methods, and 
                evidence gaps in terms of clinical outcomes for the 
                specific research inquiry to be examined with respect 
                to such priority to ensure that the information 
                produced from such research is clinically relevant to 
                decisions made by clinicians and patients at the point 
                of care;
                    ``(I) make recommendations for the priority for 
                periodic reviews of previous comparative effectiveness 
                research and studies conducted by the Center under 
                subsection (a);
                    ``(J) routinely review processes of the Center with 
                respect to such research to confirm that the 
                information produced by such research is objective, 
                credible, consistent with standards of evidence 
                established under this section, and developed through a 
                transparent process that includes consultations with 
                appropriate stakeholders; and
                    ``(K) make recommendations to the center for the 
                broad dissemination of the findings of research 
                conducted and supported under this section that enables 
                clinicians, patients, consumers, and payers to make 
                more informed health care decisions that improve 
                quality and value.
            ``(3) Composition of commission.--
                    ``(A) In general.--The members of the Commission 
                shall consist of--
                            ``(i) the Director of the Agency for 
                        Healthcare Research and Quality;
                            ``(ii) the Chief Medical Officer of the 
                        Centers for Medicare & Medicaid Services; and
                            ``(iii) 15 additional members who shall 
                        represent broad constituencies of stakeholders 
                        including clinicians, patients, researchers, 
                        third-party payers, consumers of Federal and 
                        State beneficiary programs.
                Of such members, at least 9 shall be practicing 
                physicians, health care practitioners, consumers, or 
                patients.
                    ``(B) Qualifications.--
                            ``(i) Diverse representation of 
                        perspectives.--The members of the Commission 
                        shall represent a broad range of perspectives 
                        and shall collectively have experience in the 
                        following areas:
                                    ``(I) Epidemiology.
                                    ``(II) Health services research.
                                    ``(III) Bioethics.
                                    ``(IV) Decision sciences.
                                    ``(V) Health disparities.
                                    ``(VI) Economics.
                            ``(ii) Diverse representation of health 
                        care community.--At least one member shall 
                        represent each of the following health care 
                        communities:
                                    ``(I) Patients.
                                    ``(II) Health care consumers.
                                    ``(III) Practicing Physicians, 
                                including surgeons.
                                    ``(IV) Other health care 
                                practitioners engaged in clinical care.
                                    ``(V) Employers.
                                    ``(VI) Public payers.
                                    ``(VII) Insurance plans.
                                    ``(VIII) Clinical researchers who 
                                conduct research on behalf of 
                                pharmaceutical or device manufacturers.
                    ``(C) Limitation.--No more than 3 of the Members of 
                the Commission may be representatives of pharmaceutical 
                or device manufacturers and such representatives shall 
                be clinical researchers described under subparagraph 
                (B)(ii)(VIII).
            ``(4) Appointment.--
                    ``(A) In general.--The Secretary shall appoint the 
                members of the Commission.
                    ``(B) Consultation.--In considering candidates for 
                appointment to the Commission, the Secretary may 
                consult with the Government Accountability Office and 
                the Institute of Medicine of the National Academy of 
                Sciences.
            ``(5) Chairman; vice chairman.--The Secretary shall 
        designate a member of the Commission, at the time of 
        appointment of the member, as Chairman and a member as Vice 
        Chairman for that term of appointment, except that in the case 
        of vacancy of the Chairmanship or Vice Chairmanship, the 
        Secretary may designate another member for the remainder of 
        that member's term. The Chairman shall serve as an ex officio 
        member of the National Advisory Council of the Agency for 
        Health Care Research and Quality under section 931(c)(3)(B) of 
        the Public Health Service Act.
            ``(6) Terms.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each member of the Commission shall 
                be appointed for a term of 4 years.
                    ``(B) Terms of initial appointees.--Of the members 
                first appointed--
                            ``(i) 8 shall be appointed for a term of 4 
                        years; and
                            ``(ii) 7 shall be appointed for a term of 3 
                        years.
            ``(7) Coordination.--To enhance effectiveness and 
        coordination, the Secretary is encouraged, to the greatest 
        extent possible, to seek coordination between the Commission 
        and the National Advisory Council of the Agency for Healthcare 
        Research and Quality.
            ``(8) Conflicts of interest.--
                    ``(A) In general.--In appointing the members of the 
                Commission or a clinical perspective advisory panel 
                described in paragraph (2)(H), the Secretary or the 
                Commission, respectively, shall take into consideration 
                any financial interest (as defined in subparagraph 
                (D)), consistent with this paragraph, and develop a 
                plan for managing any identified conflicts.
                    ``(B) Evaluation and criteria.--When considering an 
                appointment to the Commission or a clinical perspective 
                advisory panel described paragraph (2)(H) the Secretary 
                or the Commission shall review the expertise of the 
                individual and the financial disclosure report filed by 
                the individual pursuant to the Ethics in Government Act 
                of 1978 for each individual under consideration for the 
                appointment, so as to reduce the likelihood that an 
                appointed individual will later require a written 
                determination as referred to in section 208(b)(1) of 
                title 18, United States Code, a written certification 
                as referred to in section 208(b)(3) of title 18, United 
                States Code, or a waiver as referred to in subparagraph 
                (D)(iii) for service on the Commission at a meeting of 
                the Commission.
                    ``(C) Disclosures; prohibitions on participation; 
                waivers.--
                            ``(i) Disclosure of financial interest.--
                        Prior to a meeting of the Commission or a 
                        clinical perspective advisory panel described 
                        in paragraph (2)(H) regarding a `particular 
                        matter' (as that term is used in section 208 of 
                        title 18, United States Code), each member of 
                        the Commission or the clinical perspective 
                        advisory panel who is a full-time Government 
                        employee or special Government employee shall 
                        disclose to the Secretary financial interests 
                        in accordance with subsection (b) of such 
                        section 208.
                            ``(ii) Prohibitions on participation.--
                        Except as provided under clause (iii), a member 
                        of the Commission or a clinical perspective 
                        advisory panel described in paragraph (2)(H) 
                        may not participate with respect to a 
                        particular matter considered in meeting of the 
                        Commission or the clinical perspective advisory 
                        panel if such member (or an immediate family 
                        member of such member) has a financial interest 
                        that could be affected by the advice given to 
                        the Secretary with respect to such matter, 
                        excluding interests exempted in regulations 
                        issued by the Director of the Office of 
                        Government Ethics as too remote or 
                        inconsequential to affect the integrity of the 
                        services of the Government officers or 
                        employees to which such regulations apply.
                            ``(iii) Waiver.--If the Secretary 
                        determines it necessary to afford the 
                        Commission or a clinical perspective advisory 
                        panel described in paragraph 2(H) essential 
                        expertise, the Secretary may grant a waiver of 
                        the prohibition in clause (ii) to permit a 
                        member described in such subparagraph to--
                                    ``(I) participate as a non-voting 
                                member with respect to a particular 
                                matter considered in a Commission or a 
                                clinical perspective advisory panel 
                                meeting; or
                                    ``(II) participate as a voting 
                                member with respect to a particular 
                                matter considered in a Commission or a 
                                clinical perspective advisory panel 
                                meeting.
                            ``(iv) Limitation on waivers and other 
                        exceptions.--
                                    ``(I) Determination of allowable 
                                exceptions for the commission.--The 
                                number of waivers granted to members of 
                                the Commission cannot exceed one-half 
                                of the total number of members for the 
                                Commission.
                                    ``(II) Prohibition on voting status 
                                on clinical perspective advisory 
                                panels.--No voting member of any 
                                clinical perspective advisory panel 
                                shall be in receipt of a waiver. No 
                                more than two nonvoting members of any 
                                clinical perspective advisory panel 
                                shall receive a waiver.
                    ``(D) Financial interest defined.--For purposes of 
                this paragraph, the term `financial interest' means a 
                financial interest under section 208(a) of title 18, 
                United States Code.
            ``(9) Compensation.--While serving on the business of the 
        Commission (including travel time), a member of the Commission 
        shall be entitled to compensation at the per diem equivalent of 
        the rate provided for level IV of the Executive Schedule under 
        section 5315 of title 5, United States Code; and while so 
        serving away from home and the member's regular place of 
        business, a member may be allowed travel expenses, as 
        authorized by the Director of the Commission.
            ``(10) Availability of reports.--The Commission shall 
        transmit to the Secretary a copy of each report submitted under 
        this subsection and shall make such reports available to the 
        public.
            ``(11) Director and staff; experts and consultants.--
        Subject to such review as the Secretary deems necessary to 
        assure the efficient administration of the Commission, the 
        Commission may--
                    ``(A) appoint an Executive Director (subject to the 
                approval of the Secretary) and such other personnel as 
                Federal employees under section 2105 of title 5, United 
                States Code, as may be necessary to carry out its 
                duties (without regard to the provisions of title 5, 
                United States Code, governing appointments in the 
                competitive service);
                    ``(B) seek such assistance and support as may be 
                required in the performance of its duties from 
                appropriate Federal departments and agencies;
                    ``(C) enter into contracts or make other 
                arrangements, as may be necessary for the conduct of 
                the work of the Commission (without regard to section 
                3709 of the Revised Statutes (41 U.S.C. 5));
                    ``(D) make advance, progress, and other payments 
                which relate to the work of the Commission;
                    ``(E) provide transportation and subsistence for 
                persons serving without compensation; and
                    ``(F) prescribe such rules and regulations as it 
                deems necessary with respect to the internal 
                organization and operation of the Commission.
    ``(c) Research Requirements.--Any research conducted, supported, or 
synthesized under this section shall meet the following requirements:
            ``(1) Ensuring transparency, credibility, and access.--
                    ``(A) The establishment of the agenda and conduct 
                of the research shall be insulated from inappropriate 
                political or stakeholder influence.
                    ``(B) Methods of conducting such research shall be 
                scientifically based.
                    ``(C) All aspects of the prioritization of 
                research, conduct of the research, and development of 
                conclusions based on the research shall be transparent 
                to all stakeholders.
                    ``(D) The process and methods for conducting such 
                research shall be publicly documented and available to 
                all stakeholders.
                    ``(E) Throughout the process of such research, the 
                Center shall provide opportunities for all stakeholders 
                involved to review and provide public comment on the 
                methods and findings of such research.
            ``(2) Use of clinical perspective advisory panels.--The 
        research shall meet a national research priority determined 
        under subsection (b)(2)(A) and shall consider advice given to 
        the Center by the clinical perspective advisory panel for the 
        national research priority.
            ``(3) Stakeholder input.--
                    ``(A) In general.--The Commission shall consult 
                with patients, health care providers, health care 
                consumer representatives, and other appropriate 
                stakeholders with an interest in the research through a 
                transparent process recommended by the Commission.
                    ``(B) Specific areas of consultation.--Consultation 
                shall include where deemed appropriate by the 
                Commission--
                            ``(i) recommending research priorities and 
                        questions;
                            ``(ii) recommending research methodologies; 
                        and
                            ``(iii) advising on and assisting with 
                        efforts to disseminate research findings.
                    ``(C) Ombudsman.--The Secretary shall designate a 
                patient ombudsman. The ombudsman shall--
                            ``(i) serve as an available point of 
                        contact for any patients with an interest in 
                        proposed comparative effectiveness studies by 
                        the Center; and
                            ``(ii) ensure that any comments from 
                        patients regarding proposed comparative 
                        effectiveness studies are reviewed by the 
                        Commission.
            ``(4) Taking into account potential differences.--Research 
        shall--
                    ``(A) be designed, as appropriate, to take into 
                account the potential for differences in the 
                effectiveness of health care items and services used 
                with various subpopulations such as racial and ethnic 
                minorities, women, different age groups (including 
                children, adolescents, adults, and seniors), and 
                individuals with different comorbidities; and
                    ``(B) seek, as feasible and appropriate, to include 
                members of such subpopulations as subjects in the 
                research.
    ``(d) Public Access to Comparative Effectiveness Information.--
            ``(1) In general.--Not later than 90 days after receipt by 
        the Center or Commission, as applicable, of a relevant report 
        described in paragraph (2) made by the Center, Commission, or 
        clinical perspective advisory panel under this section, 
        appropriate information contained in such report shall be 
        posted on the official public Internet site of the Center and 
        of the Commission, as applicable.
            ``(2) Relevant reports described.--For purposes of this 
        section, a relevant report is each of the following submitted 
        by the Center or a grantee or contractor of the Center:
                    ``(A) Any interim or progress reports as deemed 
                appropriate by the Secretary.
                    ``(B) Stakeholder comments.
                    ``(C) A final report.
    ``(e) Dissemination and Incorporation of Comparative Effectiveness 
Information.--
            ``(1) Dissemination.--The Center shall provide for the 
        dissemination of appropriate findings produced by research 
        supported, conducted, or synthesized under this section to 
        health care providers, patients, vendors of health information 
        technology focused on clinical decision support, appropriate 
        professional associations, and Federal and private health 
        plans, and other relevant stakeholders. In disseminating such 
        findings the Center shall--
                    ``(A) convey findings of research so that they are 
                comprehensible and useful to patients and providers in 
                making health care decisions;
                    ``(B) discuss findings and other considerations 
                specific to certain sub-populations, risk factors, and 
                comorbidities as appropriate;
                    ``(C) include considerations such as limitations of 
                research and what further research may be needed, as 
                appropriate;
                    ``(D) not include any data that the dissemination 
                of which would violate the privacy of research 
                participants or violate any confidentiality agreements 
                made with respect to the use of data under this 
                section; and
                    ``(E) assist the users of health information 
                technology focused on clinical decision support to 
                promote the timely incorporation of such findings into 
                clinical practices and promote the ease of use of such 
                incorporation.
            ``(2) Dissemination protocols and strategies.--The Center 
        shall develop protocols and strategies for the appropriate 
        dissemination of research findings in order to ensure effective 
        communication of findings and the use and incorporation of such 
        findings into relevant activities for the purpose of informing 
        higher quality and more effective and efficient decisions 
        regarding medical items and services. In developing and 
        adopting such protocols and strategies, the Center shall 
        consult with stakeholders concerning the types of dissemination 
        that will be most useful to the end users of information and 
        may provide for the utilization of multiple formats for 
        conveying findings to different audiences, including 
        dissemination to individuals with limited English proficiency.
    ``(f) Reports to Congress.--
            ``(1) Annual reports.--Beginning not later than one year 
        after the date of the enactment of this section, the Director 
        of the Agency of Healthcare Research and Quality and the 
        Commission shall submit to Congress an annual report on the 
        activities of the Center and the Commission, as well as the 
        research, conducted under this section. Each such report shall 
        include a discussion of the Center's compliance with subsection 
        (c)(B)(4), including any reasons for lack of compliance with 
        such subsection.
            ``(2) Recommendation for fair share per capita amount for 
        all-payer financing.--Beginning not later than December 31, 
        2011, the Secretary shall submit to Congress an annual 
        recommendation for a fair share per capita amount described in 
        subsection (c)(1) of section 9511 of the Internal Revenue Code 
        of 1986 for purposes of funding the CERTF under such section.
            ``(3) Analysis and review.--Not later than December 31, 
        2013, the Secretary, in consultation with the Commission, shall 
        submit to Congress a report on all activities conducted or 
        supported under this section as of such date. Such report shall 
        include an evaluation of the overall costs of such activities 
        and an analysis of the backlog of any research proposals 
        approved by the Commission but not funded.
    ``(g) Funding of Comparative Effectiveness Research.--For fiscal 
year 2010 and each subsequent fiscal year, amounts in the Comparative 
Effectiveness Research Trust Fund (referred to in this section as the 
`CERTF') under section 9511 of the Internal Revenue Code of 1986 shall 
be available, without the need for further appropriations and without 
fiscal year limitation, to the Secretary to carry out this section.
    ``(h) Construction.--Nothing in this section shall be construed to 
permit the Commission or the Center to mandate coverage, reimbursement, 
or other policies for any public or private payer.''.
    (b) Comparative Effectiveness Research Trust Fund; Financing for 
the Trust Fund.--For provision establishing a Comparative Effectiveness 
Research Trust Fund and financing such Trust Fund, see section 1802.

                 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.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
            ``(1) Disclosure.--A facility (as defined in paragraph 
        (7)(B)) shall have the information described in paragraph (3) 
        available--
                    ``(A) during the period beginning on the date of 
                the enactment of this subsection and ending on the date 
                such information is made available to the public under 
                section 1411(b) of the America's Affordable Health 
                Choices Act of 2009, for submission to the Secretary, 
                the Inspector General of the Department of Health and 
                Human Services, the State in which the facility is 
                located, and the State long-term care ombudsman in the 
                case where the Secretary, the Inspector General, the 
                State, or the State long-term care ombudsman requests 
                such information; and
                    ``(B) beginning on the effective date of the final 
                regulations promulgated under paragraph (4)(A), for 
                reporting such information in accordance with such 
                final regulations.
        Nothing in subparagraph (A) shall be construed as authorizing a 
        facility to dispose of or delete information described in such 
        subparagraph after the effective date of the final regulations 
        promulgated under paragraph (4)(A).
            ``(2) Public availability of information.--During the 
        period described in paragraph (1)(A), a facility shall--
                    ``(A) make the information described in paragraph 
                (3) available to the public upon request and update 
                such information as may be necessary to reflect changes 
                in such information; and
                    ``(B) post a notice of the availability of such 
                information in the lobby of the facility in a prominent 
                manner.
            ``(3) Information described.--
                    ``(A) In general.--The following information is 
                described in this paragraph:
                            ``(i) The information described in 
                        subsections (a) and (b), subject to 
                        subparagraph (C).
                            ``(ii) The identity of and information on--
                                    ``(I) each member of the governing 
                                body of the facility, including the 
                                name, title, and period of service of 
                                each such member;
                                    ``(II) each person or entity who is 
                                an officer, director, member, partner, 
                                trustee, or managing employee of the 
                                facility, including the name, title, 
                                and date of start of service of each 
                                such person or entity; and
                                    ``(III) each person or entity who 
                                is an additional disclosable party of 
                                the facility.
                            ``(iii) The organizational structure of 
                        each person and entity described in subclauses 
                        (II) and (III) of clause (ii) and a description 
                        of the relationship of each such person or 
                        entity to the facility and to one another.
                    ``(B) Special rule where information is already 
                reported or submitted.--To the extent that information 
                reported by a facility to the Internal Revenue Service 
                on Form 990, information submitted by a facility to the 
                Securities and Exchange Commission, or information 
                otherwise submitted to the Secretary or any other 
                Federal agency contains the information described in 
                clauses (i), (ii), or (iii) of subparagraph (A), the 
                Secretary may allow, to the extent practicable, such 
                Form or such information to meet the requirements of 
                paragraph (1) and to be submitted in a manner specified 
                by the Secretary.
                    ``(C) Special rule.--In applying subparagraph 
                (A)(i)--
                            ``(i) with respect to subsections (a) and 
                        (b), `ownership or control interest' shall 
                        include direct or indirect interests, including 
                        such interests in intermediate entities; and
                            ``(ii) subsection (a)(3)(A)(ii) shall 
                        include the owner of a whole or part interest 
                        in any mortgage, deed of trust, note, or other 
                        obligation secured, in whole or in part, by the 
                        entity or any of the property or assets 
                        thereof, if the interest is equal to or exceeds 
                        5 percent of the total property or assets of 
                        the entirety.
            ``(4) Reporting.--
                    ``(A) In general.--Not later than the date that is 
                2 years after the date of the enactment of this 
                subsection, the Secretary shall promulgate regulations 
                requiring, effective on the date that is 90 days after 
                the date on which such final regulations are published 
                in the Federal Register, a facility to report the 
                information described in paragraph (3) to the Secretary 
                in a standardized format, and such other regulations as 
                are necessary to carry out this subsection. Such final 
                regulations shall ensure that the facility certifies, 
                as a condition of participation and payment under the 
                program under title XVIII or XIX, that the information 
                reported by the facility in accordance with such final 
                regulations is accurate and current.
                    ``(B) Guidance.--The Secretary shall provide 
                guidance and technical assistance to States on how to 
                adopt the standardized format under subparagraph (A).
            ``(5) No effect on existing reporting requirements.--
        Nothing in this subsection shall reduce, diminish, or alter any 
        reporting requirement for a facility that is in effect as of 
        the date of the enactment of this subsection.
            ``(6) Definitions.--In this subsection:
                    ``(A) Additional disclosable party.--The term 
                `additional disclosable party' means, with respect to a 
                facility, any person or entity who--
                            ``(i) exercises operational, financial, or 
                        managerial control over the facility or a part 
                        thereof, or provides policies or procedures for 
                        any of the operations of the facility, or 
                        provides financial or cash management services 
                        to the facility;
                            ``(ii) leases or subleases real property to 
                        the facility, or owns a whole or part interest 
                        equal to or exceeding 5 percent of the total 
                        value of such real property;
                            ``(iii) lends funds or provides a financial 
                        guarantee to the facility in an amount which is 
                        equal to or exceeds $50,000; or
                            ``(iv) provides management or 
                        administrative services, clinical consulting 
                        services, or accounting or financial services 
                        to the facility.
                    ``(B) Facility.--The term `facility' means a 
                disclosing entity which is--
                            ``(i) a skilled nursing facility (as 
                        defined in section 1819(a)); or
                            ``(ii) a nursing facility (as defined in 
                        section 1919(a)).
                    ``(C) Managing employee.--The term `managing 
                employee' means, with respect to a facility, an 
                individual (including a general manager, business 
                manager, administrator, director, or consultant) who 
                directly or indirectly manages, advises, or supervises 
                any element of the practices, finances, or operations 
                of the facility.
                    ``(D) Organizational structure.--The term 
                `organizational structure' means, in the case of--
                            ``(i) a corporation, the officers, 
                        directors, and shareholders of the corporation 
                        who have an ownership interest in the 
                        corporation which is equal to or exceeds 5 
                        percent;
                            ``(ii) a limited liability company, the 
                        members and managers of the limited liability 
                        company (including, as applicable, what 
                        percentage each member and manager has of the 
                        ownership interest in the limited liability 
                        company);
                            ``(iii) a general partnership, the partners 
                        of the general partnership;
                            ``(iv) a limited partnership, the general 
                        partners and any limited partners of the 
                        limited partnership who have an ownership 
                        interest in the limited partnership which is 
                        equal to or exceeds 10 percent;
                            ``(v) a trust, the trustees of the trust;
                            ``(vi) an individual, contact information 
                        for the individual; and
                            ``(vii) any other person or entity, such 
                        information as the Secretary determines 
                        appropriate.''.
    (b) Public Availability of Information.--
            (1) In general.--Not later than the date that is 1 year 
        after the date on which the final regulations promulgated under 
        section 1124(c)(4)(A) of the Social Security Act, as added by 
        subsection (a), are published in the Federal Register, the 
        information reported in accordance with such final regulations 
        shall be made available to the public in accordance with 
        procedures established by the Secretary.
            (2) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).
    (c) Conforming Amendments.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)) is amended by 
        striking subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking 
        subparagraph (B) and redesignating subparagraph (C) as 
        subparagraph (B).

SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

    (a) Effective Compliance and Ethics Programs.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        section 1411(c)(1), is amended by adding at the end the 
        following new subparagraph:
                    ``(C) Compliance and ethics programs.--
                            ``(i) Requirement.--On or after the date 
                        that is 36 months after the date of the 
                        enactment of this subparagraph, a skilled 
                        nursing facility shall, with respect to the 
                        entity that operates the facility (in this 
                        subparagraph referred to as the `operating 
                        organization' or `organization'), have in 
                        operation a compliance and ethics program that 
                        is effective in preventing and detecting 
                        criminal, civil, and administrative violations 
                        under this Act and in promoting quality of care 
                        consistent with regulations developed under 
                        clause (ii).
                            ``(ii) Development of regulations.--
                                    ``(I) In general.--Not later than 
                                the date that is 2 years after such 
                                date of the enactment, the Secretary, 
                                in consultation with the Inspector 
                                General of the Department of Health and 
                                Human Services, shall promulgate 
                                regulations for an effective compliance 
                                and ethics program for operating 
                                organizations, which may include a 
                                model compliance program.
                                    ``(II) Design of regulations.--Such 
                                regulations with respect to specific 
                                elements or formality of a program may 
                                vary with the size of the organization, 
                                such that larger organizations should 
                                have a more formal and rigorous program 
                                and include established written 
                                policies defining the standards and 
                                procedures to be followed by its 
                                employees. Such requirements shall 
                                specifically apply to the corporate 
                                level management of multi-unit nursing 
                                home chains.
                                    ``(III) Evaluation.--Not later than 
                                3 years after the date of promulgation 
                                of regulations under this clause, the 
                                Secretary shall complete an evaluation 
                                of the compliance and ethics programs 
                                required to be established under this 
                                subparagraph. Such evaluation shall 
                                determine if such programs led to 
                                changes in deficiency citations, 
                                changes in quality performance, or 
                                changes in other metrics of resident 
                                quality of care. The Secretary shall 
                                submit to Congress a report on such 
                                evaluation and shall include in such 
                                report such recommendations regarding 
                                changes in the requirements for such 
                                programs as the Secretary determines 
                                appropriate.
                            ``(iii) Requirements for compliance and 
                        ethics programs.--In this subparagraph, the 
                        term `compliance and ethics program' means, 
                        with respect to a skilled nursing facility, a 
                        program of the operating organization that--
                                    ``(I) has been reasonably designed, 
                                implemented, and enforced so that it 
                                generally will be effective in 
                                preventing and detecting criminal, 
                                civil, and administrative violations 
                                under this Act and in promoting quality 
                                of care; and
                                    ``(II) includes at least the 
                                required components specified in clause 
                                (iv).
                            ``(iv) Required components of program.--The 
                        required components of a compliance and ethics 
                        program of an organization are the following:
                                    ``(I) The organization must have 
                                established compliance standards and 
                                procedures to be followed by its 
                                employees, contractors, and other 
                                agents that are reasonably capable of 
                                reducing the prospect of criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(II) Specific individuals within 
                                high-level personnel of the 
                                organization must have been assigned 
                                overall responsibility to oversee 
                                compliance with such standards and 
                                procedures and have sufficient 
                                resources and authority to assure such 
                                compliance.
                                    ``(III) The organization must have 
                                used due care not to delegate 
                                substantial discretionary authority to 
                                individuals whom the organization knew, 
                                or should have known through the 
                                exercise of due diligence, had a 
                                propensity to engage in criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(IV) The organization must have 
                                taken steps to communicate effectively 
                                its standards and procedures to all 
                                employees and other agents, such as by 
                                requiring participation in training 
                                programs or by disseminating 
                                publications that explain in a 
                                practical manner what is required.
                                    ``(V) The organization must have 
                                taken reasonable steps to achieve 
                                compliance with its standards, such as 
                                by utilizing monitoring and auditing 
                                systems reasonably designed to detect 
                                criminal, civil, and administrative 
                                violations under this Act by its 
                                employees and other agents and by 
                                having in place and publicizing a 
                                reporting system whereby employees and 
                                other agents could report violations by 
                                others within the organization without 
                                fear of retribution.
                                    ``(VI) The standards must have been 
                                consistently enforced through 
                                appropriate disciplinary mechanisms, 
                                including, as appropriate, discipline 
                                of individuals responsible for the 
                                failure to detect an offense.
                                    ``(VII) After an offense has been 
                                detected, the organization must have 
                                taken all reasonable steps to respond 
                                appropriately to the offense and to 
                                prevent further similar offenses, 
                                including repayment of any funds to 
                                which it was not entitled and any 
                                necessary modification to its program 
                                to prevent and detect criminal, civil, 
                                and administrative violations under 
                                this Act.
                                    ``(VIII) The organization must 
                                periodically undertake reassessment of 
                                its compliance program to identify 
                                changes necessary to reflect changes 
                                within the organization and its 
                                facilities.
                            ``(v) Coordination.--The provisions of this 
                        subparagraph shall apply with respect to a 
                        skilled nursing facility in lieu of section 
                        1874(d).''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
        1411(c)(2), is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Compliance and ethics program.--
                            ``(i) Requirement.--On or after the date 
                        that is 36 months after the date of the 
                        enactment of this subparagraph, a nursing 
                        facility shall, with respect to the entity that 
                        operates the facility (in this subparagraph 
                        referred to as the `operating organization' or 
                        `organization'), have in operation a compliance 
                        and ethics program that is effective in 
                        preventing and detecting criminal, civil, and 
                        administrative violations under this Act and in 
                        promoting quality of care consistent with 
                        regulations developed under clause (ii).
                            ``(ii) Development of regulations.--
                                    ``(I) In general.--Not later than 
                                the date that is 2 years after such 
                                date of the enactment, the Secretary, 
                                in consultation with the Inspector 
                                General of the Department of Health and 
                                Human Services, shall develop 
                                regulations for an effective compliance 
                                and ethics program for operating 
                                organizations, which may include a 
                                model compliance program.
                                    ``(II) Design of regulations.--Such 
                                regulations with respect to specific 
                                elements or formality of a program may 
                                vary with the size of the organization, 
                                such that larger organizations should 
                                have a more formal and rigorous program 
                                and include established written 
                                policies defining the standards and 
                                procedures to be followed by its 
                                employees. Such requirements may 
                                specifically apply to the corporate 
                                level management of multi-unit nursing 
                                home chains.
                                    ``(III) Evaluation.--Not later than 
                                3 years after the date of promulgation 
                                of regulations under this clause the 
                                Secretary shall complete an evaluation 
                                of the compliance and ethics programs 
                                required to be established under this 
                                subparagraph. Such evaluation shall 
                                determine if such programs led to 
                                changes in deficiency citations, 
                                changes in quality performance, or 
                                changes in other metrics of resident 
                                quality of care. The Secretary shall 
                                submit to Congress a report on such 
                                evaluation and shall include in such 
                                report such recommendations regarding 
                                changes in the requirements for such 
                                programs as the Secretary determines 
                                appropriate.
                            ``(iii) Requirements for compliance and 
                        ethics programs.--In this subparagraph, the 
                        term `compliance and ethics program' means, 
                        with respect to a nursing facility, a program 
                        of the operating organization that--
                                    ``(I) has been reasonably designed, 
                                implemented, and enforced so that it 
                                generally will be effective in 
                                preventing and detecting criminal, 
                                civil, and administrative violations 
                                under this Act and in promoting quality 
                                of care; and
                                    ``(II) includes at least the 
                                required components specified in clause 
                                (iv).
                            ``(iv) Required components of program.--The 
                        required components of a compliance and ethics 
                        program of an organization are the following:
                                    ``(I) The organization must have 
                                established compliance standards and 
                                procedures to be followed by its 
                                employees and other agents that are 
                                reasonably capable of reducing the 
                                prospect of criminal, civil, and 
                                administrative violations under this 
                                Act.
                                    ``(II) Specific individuals within 
                                high-level personnel of the 
                                organization must have been assigned 
                                overall responsibility to oversee 
                                compliance with such standards and 
                                procedures and has sufficient resources 
                                and authority to assure such 
                                compliance.
                                    ``(III) The organization must have 
                                used due care not to delegate 
                                substantial discretionary authority to 
                                individuals whom the organization knew, 
                                or should have known through the 
                                exercise of due diligence, had a 
                                propensity to engage in criminal, 
                                civil, and administrative violations 
                                under this Act.
                                    ``(IV) The organization must have 
                                taken steps to communicate effectively 
                                its standards and procedures to all 
                                employees and other agents, such as by 
                                requiring participation in training 
                                programs or by disseminating 
                                publications that explain in a 
                                practical manner what is required.
                                    ``(V) The organization must have 
                                taken reasonable steps to achieve 
                                compliance with its standards, such as 
                                by utilizing monitoring and auditing 
                                systems reasonably designed to detect 
                                criminal, civil, and administrative 
                                violations under this Act by its 
                                employees and other agents and by 
                                having in place and publicizing a 
                                reporting system whereby employees and 
                                other agents could report violations by 
                                others within the organization without 
                                fear of retribution.
                                    ``(VI) The standards must have been 
                                consistently enforced through 
                                appropriate disciplinary mechanisms, 
                                including, as appropriate, discipline 
                                of individuals responsible for the 
                                failure to detect an offense.
                                    ``(VII) After an offense has been 
                                detected, the organization must have 
                                taken all reasonable steps to respond 
                                appropriately to the offense and to 
                                prevent further similar offenses, 
                                including repayment of any funds to 
                                which it was not entitled and any 
                                necessary modification to its program 
                                to prevent and detect criminal, civil, 
                                and administrative violations under 
                                this Act.
                                    ``(VIII) The organization must 
                                periodically undertake reassessment of 
                                its compliance program to identify 
                                changes necessary to reflect changes 
                                within the organization and its 
                                facilities.
                            ``(v) Coordination.--The provisions of this 
                        subparagraph shall apply with respect to a 
                        nursing facility in lieu of section 
                        1902(a)(77).''.
    (b) Quality Assurance and Performance Improvement Program.--
            (1) Skilled nursing facilities.--Section 1819(b)(1)(B) of 
        the Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                    (A) by striking ``assurance'' and inserting 
                ``assurance and quality assurance and performance 
                improvement program'';
                    (B) by designating the matter beginning with ``A 
                nursing facility'' as a clause (i) with the heading 
                ``In general.--'' and the appropriate indentation; and
                    (C) by adding at the end the following new clause:
                            ``(ii) Quality assurance and performance 
                        improvement program.--
                                    ``(I) In general.--Not later than 
                                December 31, 2011, the Secretary shall 
                                establish and implement a quality 
                                assurance and performance improvement 
                                program (in this clause referred to as 
                                the `QAPI program') for skilled nursing 
                                facilities, including multi-unit chains 
                                of such facilities. Under the QAPI 
                                program, the Secretary shall establish 
                                standards relating to such facilities 
                                and provide technical assistance to 
                                such facilities on the development of 
                                best practices in order to meet such 
                                standards. Not later than 1 year after 
                                the date on which the regulations are 
                                promulgated under subclause (II), a 
                                skilled nursing facility must submit to 
                                the Secretary a plan for the facility 
                                to meet such standards and implement 
                                such best practices, including how to 
                                coordinate the implementation of such 
                                plan with quality assessment and 
                                assurance activities conducted under 
                                clause (i).
                                    ``(II) Regulations.--The Secretary 
                                shall promulgate regulations to carry 
                                out this clause.''.
            (2) Nursing facilities.--Section 1919(b)(1)(B) of the 
        Social Security Act (42 U.S.C. 1396r(b)(1)(B)) is amended--
                    (A) by striking ``assurance'' and inserting 
                ``assurance and quality assurance and performance 
                improvement program'';
                    (B) by designating the matter beginning with ``A 
                nursing facility'' as a clause (i) with the heading 
                ``In general.--'' and the appropriate indentation; and
                    (C) by adding at the end the following new clause:
                            ``(ii) Quality assurance and performance 
                        improvement program.--
                                    ``(I) In general.--Not later than 
                                December 31, 2011, the Secretary shall 
                                establish and implement a quality 
                                assurance and performance improvement 
                                program (in this clause referred to as 
                                the `QAPI program') for nursing 
                                facilities, including multi-unit chains 
                                of such facilities. Under the QAPI 
                                program, the Secretary shall establish 
                                standards relating to such facilities 
                                and provide technical assistance to 
                                such facilities on the development of 
                                best practices in order to meet such 
                                standards. Not later than 1 year after 
                                the date on which the regulations are 
                                promulgated under subclause (II), a 
                                nursing facility must submit to the 
                                Secretary a plan for the facility to 
                                meet such standards and implement such 
                                best practices, including how to 
                                coordinate the implementation of such 
                                plan with quality assessment and 
                                assurance activities conducted under 
                                clause (i).
                                    ``(II) Regulations.--The Secretary 
                                shall promulgate regulations to carry 
                                out this clause.''.
            (3) Proposal to revise quality assurance and performance 
        improvement programs.--The Secretary shall include in the 
        proposed rule published under section 1888(e) of the Social 
        Security Act (42 U.S.C. 1395yy(e)(5)(A)) for the subsequent 
        fiscal year to the extent otherwise authorized under section 
        1819(b)(1)(B) or 1819(d)(1)(C) of the Social Security Act or 
        other statutory or regulatory authority, one or more proposals 
        for skilled nursing facilities to modify and strengthen quality 
        assurance and performance improvement programs in such 
        facilities. At the time of publication of such proposed rule 
        and to the extent otherwise authorized under section 
        1919(b)(1)(B) or 1919(d)(1)(C) of such Act or other regulatory 
        authority.
            (4) Facility plan.--Not later than 1 year after the date on 
        which the regulations are promulgated under subclause (II) of 
        clause (ii) of sections 1819(b)(1)(B) and 1919(b)(1)(B) of the 
        Social Security Act, as added by paragraphs (1) and (2), a 
        skilled nursing facility and a nursing facility must submit to 
        the Secretary a plan for the facility to meet the standards 
        under such regulations and implement such best practices, 
        including how to coordinate the implementation of such plan 
        with quality assessment and assurance activities conducted 
        under clause (i) of such sections.
    (c) GAO Study on Nursing Facility Undercapitalization.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study that examines the following:
                    (A) The extent to which corporations that own or 
                operate large numbers of nursing facilities, taking 
                into account ownership type (including private equity 
                and control interests), are undercapitalizing such 
                facilities.
                    (B) The effects of such undercapitalization on 
                quality of care, including staffing and food costs, at 
                such facilities.
                    (C) Options to address such undercapitalization, 
                such as requirements relating to surety bonds, 
                liability insurance, or minimum capitalization.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on the study conducted under paragraph (1).
            (3) Nursing facility.--In this subsection, the term 
        ``nursing facility'' includes a skilled nursing facility.

SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819 of the Social Security Act 
        (42 U.S.C. 1395i-3) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Information that is reported to the 
                        Secretary under section 1124(c)(4).
                            ``(ii) Information on the `Special Focus 
                        Facility program' (or a successor program) 
                        established by the Centers for Medicare and 
                        Medicaid Services, according to procedures 
                        established by the Secretary. Such procedures 
                        shall provide for the inclusion of information 
                        with respect to, and the names and locations 
                        of, those facilities that, since the previous 
                        quarter--
                                    ``(I) were newly enrolled in the 
                                program;
                                    ``(II) are enrolled in the program 
                                and have failed to significantly 
                                improve;
                                    ``(III) are enrolled in the program 
                                and have significantly improved;
                                    ``(IV) have graduated from the 
                                program; and
                                    ``(V) have closed voluntarily or no 
                                longer participate under this title.
                            ``(iii) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under subsection 
                        (b)(8)(C), including information on staffing 
                        turnover and tenure, in a format that is 
                        clearly understandable to consumers of long-
                        term care services and allows such consumers to 
                        compare differences in staffing between 
                        facilities and State and national averages for 
                        the facilities. Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as a plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(iv) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(v) The standardized complaint form 
                        developed under subsection (f)(8), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(vi) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(vii) The number of adjudicated instances 
                        of criminal violations by employees of a 
                        nursing facility--
                                    ``(I) that were committed inside 
                                the facility;
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed inside of the facility that 
                                were the violations or crimes of abuse, 
                                neglect, and exploitation, criminal 
                                sexual abuse, or other violations or 
                                crimes that resulted in serious bodily 
                                injury; and
                                    ``(III) the number of civil 
                                monetary penalties levied against the 
                                facility, employees, contractors, and 
                                other agents.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) and (A)(iii) is included on 
                        such website (or a successor website) not later 
                        than the date on which the requirements under 
                        section 1124(c)(4) and subsection (b)(8)(C)(ii) 
                        are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups; and
                            ``(iv) any other representatives of 
                        programs or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1819(g)(5) of the Social 
                Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a skilled nursing 
                facility (including any enforcement actions taken by 
                the State) to the Secretary not later than the date on 
                which the State sends such information to the facility. 
                The Secretary shall use the information submitted under 
                the preceding sentence to update the information 
                provided on the Nursing Home Compare Medicare website 
                as expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1819(f) of 
        such Act is amended by adding at the end the following new 
        paragraph:
            ``(8) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for skilled nursing facilities that the 
                Secretary has identified as having substantially failed 
                to meet applicable requirement of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less than once every 6 months.''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919 of the Social Security Act 
        (42 U.S.C. 1396r) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:
    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, 
                as part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, easily 
                accessible, readily understandable to consumers of 
                long-term care services, and searchable:
                            ``(i) Staffing data for each facility 
                        (including resident census data and data on the 
                        hours of care provided per resident per day) 
                        based on data submitted under subsection 
                        (b)(8)(C)(ii), including information on 
                        staffing turnover and tenure, in a format that 
                        is clearly understandable to consumers of long-
                        term care services and allows such consumers to 
                        compare differences in staffing between 
                        facilities and State and national averages for 
                        the facilities. Such format shall include--
                                    ``(I) concise explanations of how 
                                to interpret the data (such as plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of 
                                staff (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                            ``(ii) Links to State Internet websites 
                        with information regarding State survey and 
                        certification programs, links to Form 2567 
                        State inspection reports (or a successor form) 
                        on such websites, information to guide 
                        consumers in how to interpret and understand 
                        such reports, and the facility plan of 
                        correction or other response to such report.
                            ``(iii) The standardized complaint form 
                        developed under subsection (f)(10), including 
                        explanatory material on what complaint forms 
                        are, how they are used, and how to file a 
                        complaint with the State survey and 
                        certification program and the State long-term 
                        care ombudsman program.
                            ``(iv) Summary information on the number, 
                        type, severity, and outcome of substantiated 
                        complaints.
                            ``(v) The number of adjudicated instances 
                        of criminal violations by employees of a 
                        nursing facility--
                                    ``(I) that were committed inside of 
                                the facility; and
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed outside of the facility, that 
                                were the violations or crimes that 
                                resulted in the serious bodily injury 
                                of an elder.
                    ``(B) Deadline for provision of information.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall ensure that 
                        the information described in subparagraph (A) 
                        is included on such website (or a successor 
                        website) not later than 1 year after the date 
                        of the enactment of this subsection.
                            ``(ii) Exception.--The Secretary shall 
                        ensure that the information described in 
                        subparagraph (A)(i) and (A)(iii) is included on 
                        such website (or a successor website) not later 
                        than the date on which the requirements under 
                        section 1124(c)(4) and subsection (b)(8)(C)(ii) 
                        are implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general.--The Secretary shall establish a 
                process--
                            ``(i) to review the accuracy, clarity of 
                        presentation, timeliness, and comprehensiveness 
                        of information reported on such website as of 
                        the day before the date of the enactment of 
                        this subsection; and
                            ``(ii) not later than 1 year after the date 
                        of the enactment of this subsection, to modify 
                        or revamp such website in accordance with the 
                        review conducted under clause (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                            ``(i) State long-term care ombudsman 
                        programs;
                            ``(ii) consumer advocacy groups;
                            ``(iii) provider stakeholder groups;
                            ``(iv) skilled nursing facility employees 
                        and their representatives; and
                            ``(v) any other representatives of programs 
                        or groups the Secretary determines 
                        appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1919(g)(5) of the Social 
                Security Act (42 U.S.C. 1396r(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided 
                on the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall take effect 1 year after the date of 
                the enactment of this Act.
            (3) Special focus facility program.--Section 1919(f) of 
        such Act is amended by adding at the end of the following new 
        paragraph:
            ``(10) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for nursing facilities that the Secretary 
                has identified as having substantially failed to meet 
                applicable requirements of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less often than once every 6 months.''.
    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        sections 1411 and 1412, is amended by adding at the end the 
        following new subparagraph:
                    ``(D) Availability of survey, certification, and 
                complaint investigation reports.--A skilled nursing 
                facility must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by sections 
        1411 and 1412, is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Availability of survey, certification, and 
                complaint investigation reports.--A nursing facility 
                must--
                            ``(i) have reports with respect to any 
                        surveys, certifications, and complaint 
                        investigations made respecting the facility 
                        during the 3 preceding years available for any 
                        individual to review upon request; and
                            ``(ii) post notice of the availability of 
                        such reports in areas of the facility that are 
                        prominent and accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect 1 year after the date of the enactment of 
        this Act.
    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
            (1) Guidance.--The Secretary of Health and Human Services 
        (in this subtitle referred to as the ``Secretary'') shall 
        provide guidance to States on how States can establish 
        electronic links to Form 2567 State inspection reports (or a 
        successor form), complaint investigation reports, and a 
        facility's plan of correction or other response to such Form 
        2567 State inspection reports (or a successor form) on the 
        Internet website of the State that provides information on 
        skilled nursing facilities and nursing facilities and the 
        Secretary shall, if possible, include such information on 
        Nursing Home Compare.
            (2) Requirement.--Section 1902(a)(9) of the Social Security 
        Act (42 U.S.C. 1396a(a)(9)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the semicolon at the end of 
                subparagraph (C) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) that the State maintain a consumer-oriented 
                website providing useful information to consumers 
                regarding all skilled nursing facilities and all 
                nursing facilities in the State, including for each 
                facility, Form 2567 State inspection reports (or a 
                successor form), complaint investigation reports, the 
                facility's plan of correction, and such other 
                information that the State or the Secretary considers 
                useful in assisting the public to assess the quality of 
                long term care options and the quality of care provided 
                by individual facilities;''.
            (3) Definitions.--In this subsection:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).

SEC. 1414. REPORTING OF EXPENDITURES.

    Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is 
amended by adding at the end the following new subsection:
    ``(f) Reporting of Direct Care Expenditures.--
            ``(1) In general.--For cost reports submitted under this 
        title for cost reporting periods beginning on or after the date 
        that is 3 years after the date of the enactment of this 
        subsection, skilled nursing facilities shall separately report 
        expenditures for wages and benefits for direct care staff 
        (breaking out (at a minimum) registered nurses, licensed 
        professional nurses, certified nurse assistants, and other 
        medical and therapy staff).
            ``(2) Modification of form.--The Secretary, in consultation 
        with private sector accountants experienced with skilled 
        nursing facility cost reports, shall redesign such reports to 
        meet the requirement of paragraph (1) not later than 1 year 
        after the date of the enactment of this subsection.
            ``(3) Categorization by functional accounts.--Not later 
        than 30 months after the date of the enactment of this 
        subsection, the Secretary, working in consultation with the 
        Medicare Payment Advisory Commission, the Inspector General of 
        the Department of Health and Human Services, and other expert 
        parties the Secretary determines appropriate, shall take the 
        expenditures listed on cost reports, as modified under 
        paragraph (1), submitted by skilled nursing facilities and 
        categorize such expenditures, regardless of any source of 
        payment for such expenditures, for each skilled nursing 
        facility into the following functional accounts on an annual 
        basis:
                    ``(A) Spending on direct care services (including 
                nursing, therapy, and medical services).
                    ``(B) Spending on indirect care (including 
                housekeeping and dietary services).
                    ``(C) Capital assets (including building and land 
                costs).
                    ``(D) Administrative services costs.
            ``(4) Availability of information submitted.--The Secretary 
        shall establish procedures to make information on expenditures 
        submitted under this subsection readily available to interested 
        parties upon request, subject to such requirements as the 
        Secretary may specify under the procedures established under 
        this paragraph.''.

SEC. 1415. STANDARDIZED COMPLAINT FORM.

    (a) Skilled Nursing Facilities.--
            (1) Development by the secretary.--Section 1819(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)), as amended by 
        section 1413(a)(3), is amended by adding at the end the 
        following new paragraph:
            ``(9) Standardized complaint form.--The Secretary shall 
        develop a standardized complaint form for use by a resident (or 
        a person acting on the resident's behalf) in filing a complaint 
        with a State survey and certification agency and a State long-
        term care ombudsman program with respect to a skilled nursing 
        facility.''.
            (2) State requirements.--Section 1819(e) of the Social 
        Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the 
        end the following new paragraph:
            ``(6) Complaint processes and whistle-blower protection.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under subsection 
                (f)(9) available upon request to--
                            ``(i) a resident of a skilled nursing 
                        facility;
                            ``(ii) any person acting on the resident's 
                        behalf; and
                            ``(iii) any person who works at a skilled 
                        nursing facility or is a representative of such 
                        a worker.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that a resident, the legal representative of a 
                resident of a skilled nursing facility, or other 
                responsible party is not retaliated against if the 
                resident, legal representative, or responsible party 
                has complained, in good faith, about the quality of 
                care or other issues relating to the skilled nursing 
                facility, that the legal representative of a resident 
                of a skilled nursing facility or other responsible 
                party is not denied access to such resident or 
                otherwise retaliated against if such representative 
                party has complained, in good faith, about the quality 
                of care provided by the facility or other issues 
                relating to the facility, and that a person who works 
                at a skilled nursing facility is not retaliated against 
                if the worker has complained, in good faith, about 
                quality of care or services or an issue relating to the 
                quality of care or services provided at the facility, 
                whether the resident, legal representative, other 
                responsible party, or worker used the form developed 
                under subsection (f)(9) or some other method for 
                submitting the complaint. Such complaint resolution 
                process shall include--
                            ``(i) procedures to assure accurate 
                        tracking of complaints received, including 
                        notification to the complainant that a 
                        complaint has been received;
                            ``(ii) procedures to determine the likely 
                        severity of a complaint and for the 
                        investigation of the complaint;
                            ``(iii) deadlines for responding to a 
                        complaint and for notifying the complainant of 
                        the outcome of the investigation; and
                            ``(iv) procedures to ensure that the 
                        identity of the complainant will be kept 
                        confidential.
                    ``(C) Whistleblower protection.--
                            ``(i) Prohibition against retaliation.--No 
                        person who works at a skilled nursing facility 
                        may be penalized, discriminated, or retaliated 
                        against with respect to any aspect of 
                        employment, including discharge, promotion, 
                        compensation, terms, conditions, or privileges 
                        of employment, or have a contract for services 
                        terminated, because the person (or anyone 
                        acting at the person's request) complained, in 
                        good faith, about the quality of care or 
                        services provided by a nursing facility or 
                        about other issues relating to quality of care 
                        or services, whether using the form developed 
                        under subsection (f)(9) or some other method 
                        for submitting the complaint.
                            ``(ii) Retaliatory reporting.--A skilled 
                        nursing facility may not file a complaint or a 
                        report against a person who works (or has 
                        worked at the facility with the appropriate 
                        State professional disciplinary agency because 
                        the person (or anyone acting at the person's 
                        request) complained in good faith, as described 
                        in clause (i).
                            ``(iii) Commencement of action.--Any person 
                        who believes the person has been penalized, 
                        discriminated, or retaliated against or had a 
                        contract for services terminated in violation 
                        of clause (i) or against whom a complaint has 
                        been filed in violation of clause (ii) may 
                        bring an action at law or equity in the 
                        appropriate district court of the United 
                        States, which shall have jurisdiction over such 
                        action without regard to the amount in 
                        controversy or the citizenship of the parties, 
                        and which shall have jurisdiction to grant 
                        complete relief, including, but not limited to, 
                        injunctive relief (such as reinstatement, 
                        compensatory damages (which may include 
                        reimbursement of lost wages, compensation, and 
                        benefits), costs of litigation (including 
                        reasonable attorney and expert witness fees), 
                        exemplary damages where appropriate, and such 
                        other relief as the court deems just and 
                        proper.
                            ``(iv) Rights not waivable.--The rights 
                        protected by this paragraph may not be 
                        diminished by contract or other agreement, and 
                        nothing in this paragraph shall be construed to 
                        diminish any greater or additional protection 
                        provided by Federal or State law or by contract 
                        or other agreement.
                            ``(v) Requirement to post notice of 
                        employee rights.--Each skilled nursing facility 
                        shall post conspicuously in an appropriate 
                        location a sign (in a form specified by the 
                        Secretary) specifying the rights of persons 
                        under this paragraph and including a statement 
                        that an employee may file a complaint with the 
                        Secretary against a skilled nursing facility 
                        that violates the provisions of this paragraph 
                        and information with respect to the manner of 
                        filing such a complaint.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a resident 
                of a skilled nursing facility (or a person acting on 
                the resident's behalf) from submitting a complaint in a 
                manner or format other than by using the standardized 
                complaint form developed under subsection (f)(9) 
                (including submitting a complaint orally).
                    ``(E) Good faith defined.--For purposes of this 
                paragraph, an individual shall be deemed to be acting 
                in good faith with respect to the filing of a complaint 
                if the individual reasonably believes--
                            ``(i) the information reported or disclosed 
                        in the complaint is true; and
                            ``(ii) the violation of this title has 
                        occurred or may occur in relation to such 
                        information.''.
    (b) Nursing Facilities.--
            (1) Development by the secretary.--Section 1919(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)), as amended by 
        section 1413(b), is amended by adding at the end the following 
        new paragraph:
            ``(11) Standardized complaint form.--The Secretary shall 
        develop a standardized complaint form for use by a resident (or 
        a person acting on the resident's behalf) in filing a complaint 
        with a State survey and certification agency and a State long-
        term care ombudsman program with respect to a nursing 
        facility.''.
            (2) State requirements.--Section 1919(e) of the Social 
        Security Act (42 U.S.C. 1395i-3(e)) is amended by adding at the 
        end the following new paragraph:
            ``(8) Complaint processes and whistleblower protection.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under subsection 
                (f)(11) available upon request to--
                            ``(i) a resident of a nursing facility;
                            ``(ii) any person acting on the resident's 
                        behalf; and
                            ``(iii) any person who works at a nursing 
                        facility or a representative of such a worker.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that a resident, the legal representative of a 
                resident of a nursing facility, or other responsible 
                party is not retaliated against if the resident, legal 
                representative, or responsible party has complained, in 
                good faith, about the quality of care or other issues 
                relating to the nursing facility, that the legal 
                representative of a resident of a nursing facility or 
                other responsible party is not denied access to such 
                resident or otherwise retaliated against if such 
                representative party has complained, in good faith, 
                about the quality of care provided by the facility or 
                other issues relating to the facility, and that a 
                person who works at a nursing facility is not 
                retaliated against if the worker has complained, in 
                good faith, about quality of care or services or an 
                issue relating to the quality of care or services 
                provided at the facility, whether the resident, legal 
                representative, other responsible party, or worker used 
                the form developed under subsection (f)(11) or some 
                other method for submitting the complaint. Such 
                complaint resolution process shall include--
                            ``(i) procedures to assure accurate 
                        tracking of complaints received, including 
                        notification to the complainant that a 
                        complaint has been received;
                            ``(ii) procedures to determine the likely 
                        severity of a complaint and for the 
                        investigation of the complaint;
                            ``(iii) deadlines for responding to a 
                        complaint and for notifying the complainant of 
                        the outcome of the investigation; and
                            ``(iv) procedures to ensure that the 
                        identity of the complainant will be kept 
                        confidential.
                    ``(C) Whistleblower protection.--
                            ``(i) Prohibition against retaliation.--No 
                        person who works at a nursing facility may be 
                        penalized, discriminated, or retaliated against 
                        with respect to any aspect of employment, 
                        including discharge, promotion, compensation, 
                        terms, conditions, or privileges of employment, 
                        or have a contract for services terminated, 
                        because the person (or anyone acting at the 
                        person's request) complained, in good faith, 
                        about the quality of care or services provided 
                        by a nursing facility or about other issues 
                        relating to quality of care or services, 
                        whether using the form developed under 
                        subsection (f)(11) or some other method for 
                        submitting the complaint.
                            ``(ii) Retaliatory reporting.--A nursing 
                        facility may not file a complaint or a report 
                        against a person who works (or has worked at 
                        the facility with the appropriate State 
                        professional disciplinary agency because the 
                        person (or anyone acting at the person's 
                        request) complained in good faith, as described 
                        in clause (i).
                            ``(iii) Commencement of action.--Any person 
                        who believes the person has been penalized, 
                        discriminated, or retaliated against or had a 
                        contract for services terminated in violation 
                        of clause (i) or against whom a complaint has 
                        been filed in violation of clause (ii) may 
                        bring an action at law or equity in the 
                        appropriate district court of the United 
                        States, which shall have jurisdiction over such 
                        action without regard to the amount in 
                        controversy or the citizenship of the parties, 
                        and which shall have jurisdiction to grant 
                        complete relief, including, but not limited to, 
                        injunctive relief (such as reinstatement, 
                        compensatory damages (which may include 
                        reimbursement of lost wages, compensation, and 
                        benefits), costs of litigation (including 
                        reasonable attorney and expert witness fees), 
                        exemplary damages where appropriate, and such 
                        other relief as the court deems just and 
                        proper.
                            ``(iv) Rights not waivable.--The rights 
                        protected by this paragraph may not be 
                        diminished by contract or other agreement, and 
                        nothing in this paragraph shall be construed to 
                        diminish any greater or additional protection 
                        provided by Federal or State law or by contract 
                        or other agreement.
                            ``(v) Requirement to post notice of 
                        employee rights.--Each nursing facility shall 
                        post conspicuously in an appropriate location a 
                        sign (in a form specified by the Secretary) 
                        specifying the rights of persons under this 
                        paragraph and including a statement that an 
                        employee may file a complaint with the 
                        Secretary against a nursing facility that 
                        violates the provisions of this paragraph and 
                        information with respect to the manner of 
                        filing such a complaint.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a resident 
                of a nursing facility (or a person acting on the 
                resident's behalf) from submitting a complaint in a 
                manner or format other than by using the standardized 
                complaint form developed under subsection (f)(11) 
                (including submitting a complaint orally).
                    ``(E) Good faith defined.--For purposes of this 
                paragraph, an individual shall be deemed to be acting 
                in good faith with respect to the filing of a complaint 
                if the individual reasonably believes--
                            ``(i) the information reported or disclosed 
                        in the complaint is true; and
                            ``(ii) the violation of this title has 
                        occurred or may occur in relation to such 
                        information.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.

    (a) Skilled Nursing Facilities.--Section 1819(b)(8) of the Social 
Security Act (42 U.S.C. 1395i-3(b)(8)) is amended by adding at the end 
the following new subparagraph:
                    ``(C) Submission of staffing information based on 
                payroll data in a uniform format.--Beginning not later 
                than 2 years after the date of the enactment of this 
                subparagraph, and after consulting with State long-term 
                care ombudsman programs, consumer advocacy groups, 
                provider stakeholder groups, employees and their 
                representatives, and other parties the Secretary deems 
                appropriate, the Secretary shall require a skilled 
                nursing facility to electronically submit to the 
                Secretary direct care staffing information (including 
                information with respect to agency and contract staff) 
                based on payroll and other verifiable and auditable 
                data in a uniform format (according to specifications 
                established by the Secretary in consultation with such 
                programs, groups, and parties). Such specifications 
                shall require that the information submitted under the 
                preceding sentence--
                            ``(i) specify the category of work a 
                        certified employee performs (such as whether 
                        the employee is a registered nurse, licensed 
                        practical nurse, licensed vocational nurse, 
                        certified nursing assistant, therapist, or 
                        other medical personnel);
                            ``(ii) include resident census data and 
                        information on resident case mix;
                            ``(iii) include a regular reporting 
                        schedule; and
                            ``(iv) include information on employee 
                        turnover and tenure and on the hours of care 
                        provided by each category of certified 
                        employees referenced in clause (i) per resident 
                        per day.
                Nothing in this subparagraph shall be construed as 
                preventing the Secretary from requiring submission of 
                such information with respect to specific categories, 
                such as nursing staff, before other categories of 
                certified employees. Information under this 
                subparagraph with respect to agency and contract staff 
                shall be kept separate from information on employee 
                staffing.''.
    (b) Nursing Facilities.--Section 1919(b)(8) of the Social Security 
Act (42 U.S.C. 1396r(b)(8)) is amended by adding at the end the 
following new subparagraph:
                    ``(C) Submission of staffing information based on 
                payroll data in a uniform format.--Beginning not later 
                than 2 years after the date of the enactment of this 
                subparagraph, and after consulting with State long-term 
                care ombudsman programs, consumer advocacy groups, 
                provider stakeholder groups, employees and their 
                representatives, and other parties the Secretary deems 
                appropriate, the Secretary shall require a nursing 
                facility to electronically submit to the Secretary 
                direct care staffing information (including information 
                with respect to agency and contract staff) based on 
                payroll and other verifiable and auditable data in a 
                uniform format (according to specifications established 
                by the Secretary in consultation with such programs, 
                groups, and parties). Such specifications shall require 
                that the information submitted under the preceding 
                sentence--
                            ``(i) specify the category of work a 
                        certified employee performs (such as whether 
                        the employee is a registered nurse, licensed 
                        practical nurse, licensed vocational nurse, 
                        certified nursing assistant, therapist, or 
                        other medical personnel);
                            ``(ii) include resident census data and 
                        information on resident case mix;
                            ``(iii) include a regular reporting 
                        schedule; and
                            ``(iv) include information on employee 
                        turnover and tenure and on the hours of care 
                        provided by each category of certified 
                        employees referenced in clause (i) per resident 
                        per day.
                Nothing in this subparagraph shall be construed as 
                preventing the Secretary from requiring submission of 
                such information with respect to specific categories, 
                such as nursing staff, before other categories of 
                certified employees. Information under this 
                subparagraph with respect to agency and contract staff 
                shall be kept separate from information on employee 
                staffing.''.

                     PART 2--TARGETING ENFORCEMENT

SEC. 1421. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended to 
        read as follows:
                            ``(ii) Authority with respect to civil 
                        money penalties.--
                                    ``(I) Amount.--The Secretary may 
                                impose a civil money penalty in the 
                                applicable per instance or per day 
                                amount (as defined in subclause (II) 
                                and (III)) for each day or instance, 
                                respectively, of noncompliance (as 
                                determined appropriate by the 
                                Secretary).
                                    ``(II) Applicable per instance 
                                amount.--In this clause, the term 
                                `applicable per instance amount' 
                                means--
                                            ``(aa) in the case where 
                                        the deficiency is found to be a 
                                        direct proximate cause of death 
                                        of a resident of the facility, 
                                        an amount not to exceed 
                                        $100,000;
                                            ``(bb) in each case of a 
                                        deficiency where the facility 
                                        is cited for actual harm or 
                                        immediate jeopardy, an amount 
                                        not less than $3,050 and not 
                                        more than $25,000; and
                                            ``(cc) in each case of any 
                                        other deficiency, an amount not 
                                        less than $250 and not to 
                                        exceed $3050.
                                    ``(III) Applicable per day 
                                amount.--In this clause, the term 
                                `applicable per day amount' means--
                                            ``(aa) in each case of a 
                                        deficiency where the facility 
                                        is cited for actual harm or 
                                        immediate jeopardy, an amount 
                                        not less than $3,050 and not 
                                        more than $25,000; and
                                            ``(bb) in each case of any 
                                        other deficiency, an amount not 
                                        less than $250 and not to 
                                        exceed $3,050.
                                    ``(IV) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclauses (V) and (VI), in 
                                the case where a facility self-reports 
                                and promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(V) Prohibition on reduction for 
                                certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary 
                                        may not reduce under subclause 
                                        (IV) the amount of a penalty if 
                                        the deficiency is a repeat 
                                        deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary 
                                        may not reduce under subclause 
                                        (IV) the amount of a penalty if 
                                        the penalty is imposed for a 
                                        deficiency described in 
                                        subclause (II)(aa) or (III)(aa) 
                                        and the actual harm or 
                                        widespread harm immediately 
                                        jeopardizes the health or 
                                        safety of a resident or 
                                        residents of the facility, or 
                                        if the penalty is imposed for a 
                                        deficiency described in 
                                        subclause (II)(bb).
                                    ``(VI) Limitation on aggregate 
                                reductions.--The aggregate reduction in 
                                a penalty under subclause (IV) may not 
                                exceed 35 percent on the basis of self-
                                reporting, on the basis of a waiver or 
                                an appeal (as provided for under 
                                regulations under section 488.436 of 
                                title 42, Code of Federal Regulations), 
                                or on the basis of both.
                                    ``(VII) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary--
                                            ``(aa) subject to item 
                                        (cc), shall, not later than 30 
                                        days after the date of 
                                        imposition of the penalty, 
                                        provide the opportunity for the 
                                        facility to participate in an 
                                        independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty, but such opportunity 
                                        shall not affect the 
                                        responsibility of the State 
                                        survey agency for making final 
                                        recommendations for such 
                                        penalties;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, shall not 
                                        impose a penalty for any day 
                                        during the period beginning on 
                                        the initial day of the 
                                        imposition of the penalty and 
                                        ending on the day on which the 
                                        informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities under quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management, and other 
                                        activities approved by the 
                                        Secretary).
                                    ``(VIII) Procedure.--The provisions 
                                of section 1128A (other than 
                                subsections (a) and (b) and except to 
                                the extent that such provisions require 
                                a hearing prior to the imposition of a 
                                civil money penalty) shall apply to a 
                                civil money penalty under this clause 
                                in the same manner as such provisions 
                                apply to a penalty or proceeding under 
                                section 1128A(a).''.
            (2) Conforming amendment.--The second sentence of section 
        1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5)) 
        is amended by inserting ``(ii),'' after ``(i),''.
    (b) Nursing Facilities.--
            (1) Penalties imposed by the state.--
                    (A) In general.--Section 1919(h)(2) of the Social 
                Security Act (42 U.S.C. 1396r(h)(2)) is amended--
                            (i) in subparagraph (A)(ii), by striking 
                        the first sentence and inserting the following: 
                        ``A civil money penalty in accordance with 
                        subparagraph (G).''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(G) Civil money penalties.--
                            ``(i) In general.--The State may impose a 
                        civil money penalty under subparagraph (A)(ii) 
                        in the applicable per instance or per day 
                        amount (as defined in subclause (II) and (III)) 
                        for each day or instance, respectively, of 
                        noncompliance (as determined appropriate by the 
                        Secretary).
                            ``(ii) Applicable per instance amount.--In 
                        this subparagraph, the term `applicable per 
                        instance amount' means--
                                    ``(I) in the case where the 
                                deficiency is found to be a direct 
                                proximate cause of death of a resident 
                                of the facility, an amount not to 
                                exceed $100,000;
                                    ``(II) in each case of a deficiency 
                                where the facility is cited for actual 
                                harm or immediate jeopardy, an amount 
                                not less than $3,050 and not more than 
                                $25,000; and
                                    ``(III) in each case of any other 
                                deficiency, an amount not less than 
                                $250 and not to exceed $3,050.
                            ``(iii) Applicable per day amount.--In this 
                        subparagraph, the term `applicable per day 
                        amount' means--
                                    ``(I) in each case of a deficiency 
                                where the facility is cited for actual 
                                harm or immediate jeopardy, an amount 
                                not less than $3,050 and not more than 
                                $25,000; and
                                    ``(II) in each case of any other 
                                deficiency, an amount not less than 
                                $250 and not to exceed $3,050.
                            ``(iv) Reduction of civil money penalties 
                        in certain circumstances.--Subject to clauses 
                        (v) and (vi), in the case where a facility 
                        self-reports and promptly corrects a deficiency 
                        for which a penalty was imposed under 
                        subparagraph (A)(ii) not later than 10 calendar 
                        days after the date of such imposition, the 
                        State may reduce the amount of the penalty 
                        imposed by not more than 50 percent.
                            ``(v) Prohibition on reduction for certain 
                        deficiencies.--
                                    ``(I) Repeat deficiencies.--The 
                                State may not reduce under clause (iv) 
                                the amount of a penalty if the State 
                                had reduced a penalty imposed on the 
                                facility in the preceding year under 
                                such clause with respect to a repeat 
                                deficiency.
                                    ``(II) Certain other 
                                deficiencies.--The State may not reduce 
                                under clause (iv) the amount of a 
                                penalty if the penalty is imposed for a 
                                deficiency described in clause (ii)(II) 
                                or (iii)(I) and the actual harm or 
                                widespread harm that immediately 
                                jeopardizes the health or safety of a 
                                resident or residents of the facility, 
                                or if the penalty is imposed for a 
                                deficiency described in clause (ii)(I).
                                    ``(III) Limitation on aggregate 
                                reductions.--The aggregate reduction in 
                                a penalty under clause (iv) may not 
                                exceed 35 percent on the basis of self-
                                reporting, on the basis of a waiver or 
                                an appeal (as provided for under 
                                regulations under section 488.436 of 
                                title 42, Code of Federal Regulations), 
                                or on the basis of both.
                            ``(iv) Collection of civil money 
                        penalties.--In the case of a civil money 
                        penalty imposed under subparagraph (A)(ii), the 
                        State--
                                    ``(I) subject to subclause (III), 
                                shall, not later than 30 days after the 
                                date of imposition of the penalty, 
                                provide the opportunity for the 
                                facility to participate in an 
                                independent informal dispute resolution 
                                process which generates a written 
                                record prior to the collection of such 
                                penalty, but such opportunity shall not 
                                affect the responsibility of the State 
                                survey agency for making final 
                                recommendations for such penalties;
                                    ``(II) in the case where the 
                                penalty is imposed for each day of 
                                noncompliance, shall not impose a 
                                penalty for any day during the period 
                                beginning on the initial day of the 
                                imposition of the penalty and ending on 
                                the day on which the informal dispute 
                                resolution process under subclause (I) 
                                is completed;
                                    ``(III) may provide for the 
                                collection of such civil money penalty 
                                and the placement of such amounts 
                                collected in an escrow account under 
                                the direction of the State on the 
                                earlier of the date on which the 
                                informal dispute resolution process 
                                under subclause (I) is completed or the 
                                date that is 90 days after the date of 
                                the imposition of the penalty;
                                    ``(IV) may provide that such 
                                amounts collected are kept in such 
                                account pending the resolution of any 
                                subsequent appeals;
                                    ``(V) in the case where the 
                                facility successfully appeals the 
                                penalty, may provide for the return of 
                                such amounts collected (plus interest) 
                                to the facility; and
                                    ``(VI) in the case where all such 
                                appeals are unsuccessful, may provide 
                                that such funds collected shall be used 
                                for the purposes described in the 
                                second sentence of subparagraph 
                                (A)(ii).''.
                    (B) Conforming amendment.--The second sentence of 
                section 1919(h)(2)(A)(ii) of the Social Security Act 
                (42 U.S.C. 1396r(h)(2)(A)(ii)) is amended by inserting 
                before the period at the end the following: ``, and 
                some portion of such funds may be used to support 
                activities that benefit residents, including assistance 
                to support and protect residents of a facility that 
                closes (voluntarily or involuntarily) or is decertified 
                (including offsetting costs of relocating residents to 
                home and community-based settings or another facility), 
                projects that support resident and family councils and 
                other consumer involvement in assuring quality care in 
                facilities, and facility improvement initiatives 
                approved by the Secretary (including joint training of 
                facility staff and surveyors, providing technical 
                assistance to facilities under quality assurance 
                programs, the appointment of temporary management, and 
                other activities approved by the Secretary)''.
            (2) Penalties imposed by the secretary.--
                    (A) In general.--Section 1919(h)(3)(C)(ii) of the 
                Social Security Act (42 U.S.C. 1396r(h)(3)(C)) is 
                amended to read as follows:
                            ``(ii) Authority with respect to civil 
                        money penalties.--
                                    ``(I) Amount.--Subject to subclause 
                                (II), the Secretary may impose a civil 
                                money penalty in an amount not to 
                                exceed $10,000 for each day or each 
                                instance of noncompliance (as 
                                determined appropriate by the 
                                Secretary).
                                    ``(II) Reduction of civil money 
                                penalties in certain circumstances.--
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for 
                                which a penalty was imposed under this 
                                clause not later than 10 calendar days 
                                after the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibition on reduction 
                                for repeat deficiencies.--The Secretary 
                                may not reduce the amount of a penalty 
                                under subclause (II) if the Secretary 
                                had reduced a penalty imposed on the 
                                facility in the preceding year under 
                                such subclause with respect to a repeat 
                                deficiency.
                                    ``(IV) Collection of civil money 
                                penalties.--In the case of a civil 
                                money penalty imposed under this 
                                clause, the Secretary--
                                            ``(aa) subject to item 
                                        (bb), shall, not later than 30 
                                        days after the date of 
                                        imposition of the penalty, 
                                        provide the opportunity for the 
                                        facility to participate in an 
                                        independent informal dispute 
                                        resolution process which 
                                        generates a written record 
                                        prior to the collection of such 
                                        penalty;
                                            ``(bb) in the case where 
                                        the penalty is imposed for each 
                                        day of noncompliance, shall not 
                                        impose a penalty for any day 
                                        during the period beginning on 
                                        the initial day of the 
                                        imposition of the penalty and 
                                        ending on the day on which the 
                                        informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on 
                                        which the informal dispute 
                                        resolution process under item 
                                        (aa) is completed or the date 
                                        that is 90 days after the date 
                                        of the imposition of the 
                                        penalty;
                                            ``(dd) may provide that 
                                        such amounts collected are kept 
                                        in such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where 
                                        the facility successfully 
                                        appeals the penalty, may 
                                        provide for the return of such 
                                        amounts collected (plus 
                                        interest) to the facility; and
                                            ``(ff) in the case where 
                                        all such appeals are 
                                        unsuccessful, may provide that 
                                        some portion of such amounts 
                                        collected may be used to 
                                        support activities that benefit 
                                        residents, including assistance 
                                        to support and protect 
                                        residents of a facility that 
                                        closes (voluntarily or 
                                        involuntarily) or is 
                                        decertified (including 
                                        offsetting costs of relocating 
                                        residents to home and 
                                        community-based settings or 
                                        another facility), projects 
                                        that support resident and 
                                        family councils and other 
                                        consumer involvement in 
                                        assuring quality care in 
                                        facilities, and facility 
                                        improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities under quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management, and other 
                                        activities approved by the 
                                        Secretary).
                                    ``(V) Procedure.--The provisions of 
                                section 1128A (other than subsections 
                                (a) and (b) and except to the extent 
                                that such provisions require a hearing 
                                prior to the imposition of a civil 
                                money penalty) shall apply to a civil 
                                money penalty under this clause in the 
                                same manner as such provisions apply to 
                                a penalty or proceeding under section 
                                1128A(a).''.
                    (B) Conforming amendment.--Section 1919(h)(8) of 
                the Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is 
                amended by inserting ``and in paragraph (3)(C)(ii)'' 
                after ``paragraph (2)(A)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary, in consultation with the 
        Inspector General of the Department of Health and Human 
        Services, shall establish a pilot program (in this section 
        referred to as the ``pilot program'') to develop, test, and 
        implement use of an independent monitor to oversee interstate 
        and large intrastate chains of skilled nursing facilities and 
        nursing facilities.
            (2) Selection.--The Secretary shall select chains of 
        skilled nursing facilities and nursing facilities described in 
        paragraph (1) to participate in the pilot program from among 
        those chains that submit an application to the Secretary at 
        such time, in such manner, and containing such information as 
        the Secretary may require.
            (3) Duration.--The Secretary shall conduct the pilot 
        program for a two-year period.
            (4) Implementation.--The Secretary shall implement the 
        pilot program not later than one year after the date of the 
        enactment of this Act.
    (b) Requirements.--The Secretary shall evaluate chains selected to 
participate in the pilot program based on criteria selected by the 
Secretary, including where evidence suggests that one or more 
facilities of the chain are experiencing serious safety and quality of 
care problems. Such criteria may include the evaluation of a chain that 
includes one or more facilities participating in the ``Special Focus 
Facility'' program (or a successor program) or one or more facilities 
with a record of repeated serious safety and quality of care 
deficiencies.
    (c) Responsibilities of the Independent Monitor.--An independent 
monitor that enters into a contract with the Secretary to participate 
in the conduct of such program shall--
            (1) conduct periodic reviews and prepare root-cause quality 
        and deficiency analyses of a chain to assess if facilities of 
        the chain are in compliance with State and Federal laws and 
        regulations applicable to the facilities;
            (2) undertake sustained oversight of the chain, whether 
        publicly or privately held, to involve the owners of the chain 
        and the principal business partners of such owners in 
        facilitating compliance by facilities of the chain with State 
        and Federal laws and regulations applicable to the facilities;
            (3) analyze the management structure, distribution of 
        expenditures, and nurse staffing levels of facilities of the 
        chain in relation to resident census, staff turnover rates, and 
        tenure;
            (4) report findings and recommendations with respect to 
        such reviews, analyses, and oversight to the chain and 
        facilities of the chain, to the Secretary and to relevant 
        States; and
            (5) publish the results of such reviews, analyses, and 
        oversight.
    (d) Implementation of Recommendations.--
            (1) Receipt of finding by chain.--Not later than 10 days 
        after receipt of a finding of an independent monitor under 
        subsection (c)(4), a chain participating in the pilot program 
        shall submit to the independent monitor a report--
                    (A) outlining corrective actions the chain will 
                take to implement the recommendations in such report; 
                or
                    (B) indicating that the chain will not implement 
                such recommendations and why it will not do so.
            (2) Receipt of report by independent monitor.--Not later 
        than 10 days after the date of receipt of a report submitted by 
        a chain under paragraph (1), an independent monitor shall 
        finalize its recommendations and submit a report to the chain 
        and facilities of the chain, the Secretary, and the State (or 
        States) involved, as appropriate, containing such final 
        recommendations.
    (e) Cost of Appointment.--A chain shall be responsible for a 
portion of the costs associated with the appointment of independent 
monitors under the pilot program. The chain shall pay such portion to 
the Secretary (in an amount and in accordance with procedures 
established by the Secretary).
    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary for the purpose of carrying out 
the pilot program.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
            (1) Facility.--The term ``facility'' means a skilled 
        nursing facility or a nursing facility.
            (2) Nursing facility.--The term ``nursing facility'' has 
        the meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, acting through the Assistant 
        Secretary for Planning and Evaluation.
            (4) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) 
        of the Social Security Act (42 U.S.C. 1395(a)).
    (i) Evaluation and Report.--
            (1) Evaluation.--The Inspector General of the Department of 
        Health and Human Services shall evaluate the pilot program. 
        Such evaluation shall--
                    (A) determine whether the independent monitor 
                program should be established on a permanent basis; and
                    (B) if the Inspector General determines that the 
                independent monitor program should be established on a 
                permanent basis, recommend appropriate procedures and 
                mechanisms for such establishment.
            (2) Report.--Not later than 180 days after the completion 
        of the pilot program, the Inspector General shall submit to 
        Congress and the Secretary a report containing the results of 
        the evaluation conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Inspector General determines appropriate.

SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(c) of the Social Security Act 
        (42 U.S.C. 1395i-3(c)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Notification of facility closure.--
                    ``(A) In general.--Any individual who is the 
                administrator of a skilled nursing facility must--
                            ``(i) submit to the Secretary, the State 
                        long-term care ombudsman, residents of the 
                        facility, and the legal representatives of such 
                        residents or other responsible parties, written 
                        notification of an impending closure--
                                    ``(I) subject to subclause (II), 
                                not later than the date that is 60 days 
                                prior to the date of such closure; and
                                    ``(II) in the case of a facility 
                                where the Secretary terminates the 
                                facility's participation under this 
                                title, not later than the date that the 
                                Secretary determines appropriate;
                            ``(ii) ensure that the facility does not 
                        admit any new residents on or after the date on 
                        which such written notification is submitted; 
                        and
                            ``(iii) include in the notice a plan for 
                        the transfer and adequate relocation of the 
                        residents of the facility by a specified date 
                        prior to closure that has been approved by the 
                        State, including assurances that the residents 
                        will be transferred to the most appropriate 
                        facility or other setting in terms of quality, 
                        services, and location, taking into 
                        consideration the needs and best interests of 
                        each resident.
                    ``(B) Relocation.--
                            ``(i) In general.--The State shall ensure 
                        that, before a facility closes, all residents 
                        of the facility have been successfully 
                        relocated to another facility or an alternative 
                        home and community-based setting.
                            ``(ii) Continuation of payments until 
                        residents relocated.--The Secretary may, as the 
                        Secretary determines appropriate, continue to 
                        make payments under this title with respect to 
                        residents of a facility that has submitted a 
                        notification under subparagraph (A) during the 
                        period beginning on the date such notification 
                        is submitted and ending on the date on which 
                        the resident is successfully relocated.''.
            (2) Conforming amendments.--Section 1819(h)(4) of the 
        Social Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
                    (A) in the first sentence, by striking ``the 
                Secretary shall terminate'' and inserting ``the 
                Secretary, subject to subsection (c)(7), shall 
                terminate''; and
                    (B) in the second sentence, by striking 
                ``subsection (c)(2)'' and inserting ``paragraphs (2) 
                and (7) of subsection (c)''.
    (b) Nursing Facilities.--
            (1) In general.--Section 1919(c) of the Social Security Act 
        (42 U.S.C. 1396r(c)) is amended by adding at the end the 
        following new paragraph:
            ``(9) Notification of facility closure.--
                    ``(A) In general.--Any individual who is an 
                administrator of a nursing facility must--
                            ``(i) submit to the Secretary, the State 
                        long-term care ombudsman, residents of the 
                        facility, and the legal representatives of such 
                        residents or other responsible parties, written 
                        notification of an impending closure--
                                    ``(I) subject to subclause (II), 
                                not later than the date that is 60 days 
                                prior to the date of such closure; and
                                    ``(II) in the case of a facility 
                                where the Secretary terminates the 
                                facility's participation under this 
                                title, not later than the date that the 
                                Secretary determines appropriate;
                            ``(ii) ensure that the facility does not 
                        admit any new residents on or after the date on 
                        which such written notification is submitted; 
                        and
                            ``(iii) include in the notice a plan for 
                        the transfer and adequate relocation of the 
                        residents of the facility by a specified date 
                        prior to closure that has been approved by the 
                        State, including assurances that the residents 
                        will be transferred to the most appropriate 
                        facility or other setting in terms of quality, 
                        services, and location, taking into 
                        consideration the needs and best interests of 
                        each resident.
                    ``(B) Relocation.--
                            ``(i) In general.--The State shall ensure 
                        that, before a facility closes, all residents 
                        of the facility have been successfully 
                        relocated to another facility or an alternative 
                        home and community-based setting.
                            ``(ii) Continuation of payments until 
                        residents relocated.--The Secretary may, as the 
                        Secretary determines appropriate, continue to 
                        make payments under this title with respect to 
                        residents of a facility that has submitted a 
                        notification under subparagraph (A) during the 
                        period beginning on the date such notification 
                        is submitted and ending on the date on which 
                        the resident is successfully relocated.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

                    PART 3--IMPROVING STAFF TRAINING

SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--Section 1819(f)(2)(A)(i)(I) of the 
Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by 
inserting ``(including, in the case of initial training and, if the 
Secretary determines appropriate, in the case of ongoing training, 
dementia management training and resident abuse prevention training)'' 
after ``curriculum''.
    (b) Nursing Facilities.--Section 1919(f)(2)(A)(i)(I) of the Social 
Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by inserting 
``(including, in the case of initial training and, if the Secretary 
determines appropriate, in the case of ongoing training, dementia 
management training and resident abuse prevention training)'' after 
``curriculum''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED FOR CERTIFIED NURSE 
              AIDES AND SUPERVISORY STAFF.

    (a) Study.--
            (1) In general.--The Secretary shall conduct a study on the 
        content of training for certified nurse aides and supervisory 
        staff of skilled nursing facilities and nursing facilities. The 
        study shall include an analysis of the following:
                    (A) Whether the number of initial training hours 
                for certified nurse aides required under sections 
                1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) of the 
                Social Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(II); 
                1396r(f)(2)(A)(i)(II)) should be increased from 75 and, 
                if so, what the required number of initial training 
                hours should be, including any recommendations for the 
                content of such training (including training related to 
                dementia).
                    (B) Whether requirements for ongoing training under 
                such sections 1819(f)(2)(A)(i)(II) and 
                1919(f)(2)(A)(i)(II) should be increased from 12 hours 
                per year, including any recommendations for the content 
                of such training.
            (2) Consultation.--In conducting the analysis under 
        paragraph (1)(A), the Secretary shall consult with States that, 
        as of the date of the enactment of this Act, require more than 
        75 hours of training for certified nurse aides.
            (3) Definitions.--In this section:
                    (A) Nursing facility.--The term ``nursing 
                facility'' has the meaning given such term in section 
                1919(a) of the Social Security Act (42 U.S.C. 
                1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services, acting through 
                the Assistant Secretary for Planning and Evaluation.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395(a)).
    (b) Report.--Not later than 2 years after the date of the enactment 
of this Act, the Secretary shall submit to Congress a report containing 
the results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

                    Subtitle C--Quality Measurements

SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR QUALITY 
              IMPROVEMENT.

    Title XI of the Social Security Act, as amended by section 1401(a), 
is further amended by adding at the end the following new part:

                     ``Part E--Quality Improvement

   ``establishment of national priorities for performance improvement

    ``Sec. 1191.  (a) Establishment of National Priorities by the 
Secretary.--The Secretary shall establish and periodically update, not 
less frequently than triennially, national priorities for performance 
improvement.
    ``(b) Recommendations for National Priorities.--In establishing and 
updating national priorities under subsection (a), the Secretary shall 
solicit and consider recommendations from multiple outside 
stakeholders.
    ``(c) Considerations in Setting National Priorities.--With respect 
to such priorities, the Secretary shall ensure that priority is given 
to areas in the delivery of health care services in the United States 
that--
            ``(1) contribute to a large burden of disease, including 
        those that address the health care provided to patients with 
        prevalent, high-cost chronic diseases;
            ``(2) have the greatest potential to decrease morbidity and 
        mortality in this country, including those that are designed to 
        eliminate harm to patients;
            ``(3) have the greatest potential for improving the 
        performance, affordability, and patient-centeredness of health 
        care, including those due to variations in care;
            ``(4) address health disparities across groups and areas; 
        and
            ``(5) have the potential for rapid improvement due to 
        existing evidence, standards of care or other reasons.
    ``(d) Definitions.--In this part:
            ``(1) Consensus-based entity.--The term `consensus-based 
        entity' means an entity with a contract with the Secretary 
        under section 1890.
            ``(2) Quality measure.--The term `quality measure' means a 
        national consensus standard for measuring the performance and 
        improvement of population health, or of institutional providers 
        of services, physicians, and other health care practitioners in 
        the delivery of health care services.
    ``(e) Funding.--
            ``(1) In general.--The Secretary shall provide for the 
        transfer, from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 (in such proportion as the 
        Secretary determines appropriate), of $2,000,000, for the 
        activities under this section for each of the fiscal years 2010 
        through 2014.
            ``(2) Authorization of appropriations.--For purposes of 
        carrying out the provisions of this section, in addition to 
        funds otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services $2,000,000 for each of the fiscal 
        years 2010 through 2014.''.

SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; GAO EVALUATION OF DATA 
              COLLECTION PROCESS FOR QUALITY MEASUREMENT.

    Part E of title XI of the Social Security Act, as added by section 
1441, is amended by adding at the end the following new sections:

``SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.

    ``(a) Agreements With Qualified Entities.--
            ``(1) In general.--The Secretary shall enter into 
        agreements with qualified entities to develop quality measures 
        for the delivery of health care services in the United States.
            ``(2) Form of agreements.--The Secretary may carry out 
        paragraph (1) by contract, grant, or otherwise.
            ``(3) Recommendations of consensus-based entity.--In 
        carrying out this section, the Secretary shall--
                    ``(A) seek public input; and
                    ``(B) take into consideration recommendations of 
                the consensus-based entity with a contract with the 
                Secretary under section 1890(a).
    ``(b) Determination of Areas Where Quality Measures Are Required.--
Consistent with the national priorities established under this part and 
with the programs administered by the Centers for Medicare & Medicaid 
Services and in consultation with other relevant Federal agencies, the 
Secretary shall determine areas in which quality measures for assessing 
health care services in the United States are needed.
    ``(c) Development of Quality Measures.--
            ``(1) Patient-centered and population-based measures.--
        Quality measures developed under agreements under subsection 
        (a) shall be designed--
                    ``(A) to assess outcomes and functional status of 
                patients;
                    ``(B) to assess the continuity and coordination of 
                care and care transitions for patients across providers 
                and health care settings, including end of life care;
                    ``(C) to assess patient experience and patient 
                engagement;
                    ``(D) to assess the safety, effectiveness, and 
                timeliness of care;
                    ``(E) to assess health disparities including those 
                associated with individual race, ethnicity, age, 
                gender, place of residence or language;
                    ``(F) to assess the efficiency and resource use in 
                the provision of care;
                    ``(G) to the extent feasible, to be collected as 
                part of health information technologies supporting 
                better delivery of health care services;
                    ``(H) to be available free of charge to users for 
                the use of such measures; and
                    ``(I) to assess delivery of health care services to 
                individuals regardless of age.
            ``(2) Availability of measures.--The Secretary shall make 
        quality measures developed under this section available to the 
        public.
            ``(3) Testing of proposed measures.--The Secretary may use 
        amounts made available under subsection (f) to fund the testing 
        of proposed quality measures by qualified entities. Testing 
        funded under this paragraph shall include testing of the 
        feasibility and usability of proposed measures.
            ``(4) Updating of endorsed measures.--The Secretary may use 
        amounts made available under subsection (f) to fund the 
        updating (and testing, if applicable) by consensus-based 
        entities of quality measures that have been previously endorsed 
        by such an entity as new evidence is developed, in a manner 
        consistent with section 1890(b)(3).
    ``(d) Qualified Entities.--Before entering into agreements with a 
qualified entity, the Secretary shall ensure that the entity is a 
public, nonprofit or academic institution with technical expertise in 
the area of health quality measurement.
    ``(e) Application for Grant.--A grant may be made under this 
section only if an application for the grant is submitted to the 
Secretary and the application is in such form, is made in such manner, 
and contains such agreements, assurances, and information as the 
Secretary determines to be necessary to carry out this section.
    ``(f) Funding.--
            ``(1) In general.--The Secretary shall provide for the 
        transfer, from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 (in such proportion as the 
        Secretary determines appropriate), of $25,000,000, to the 
        Secretary for purposes of carrying out this section for each of 
        the fiscal years 2010 through 2014.
            ``(2) Authorization of appropriations.--For purposes of 
        carrying out the provisions of this section, in addition to 
        funds otherwise available, out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary 
        of Health and Human Services $25,000,000 for each of the fiscal 
        years 2010 through 2014.

``SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROCESS FOR QUALITY 
              MEASUREMENT.

    ``(a) GAO Evaluations.--The Comptroller General of the United 
States shall conduct periodic evaluations of the implementation of the 
data collection processes for quality measures used by the Secretary.
    ``(b) Considerations.--In carrying out the evaluation under 
subsection (a), the Comptroller General shall determine--
            ``(1) whether the system for the collection of data for 
        quality measures provides for validation of data as relevant 
        and scientifically credible;
            ``(2) whether data collection efforts under the system use 
        the most efficient and cost-effective means in a manner that 
        minimizes administrative burden on persons required to collect 
        data and that adequately protects the privacy of patients' 
        personal health information and provides data security;
            ``(3) whether standards under the system provide for an 
        appropriate opportunity for physicians and other clinicians and 
        institutional providers of services to review and correct 
        findings; and
            ``(4) the extent to which quality measures are consistent 
        with section 1192(c)(1) or result in direct or indirect costs 
        to users of such measures.
    ``(c) Report.--The Comptroller General shall submit reports to 
Congress and to the Secretary containing a description of the findings 
and conclusions of the results of each such evaluation.''.

SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT INTO SELECTION OF 
              QUALITY MEASURES.

    Section 1808 of the Social Security Act (42 U.S.C. 1395b-9) is 
amended by adding at the end the following new subsection:
    ``(d) Multi-stakeholder Pre-rulemaking Input Into Selection of 
Quality Measures.--
            ``(1) List of measures.--Not later than December 1 before 
        each year (beginning with 2011), the Secretary shall make 
        public a list of measures being considered for selection for 
        quality measurement by the Secretary in rulemaking with respect 
        to payment systems under this title beginning in the payment 
        year beginning in such year and for payment systems beginning 
        in the calendar year following such year, as the case may be.
            ``(2) Consultation on selection of endorsed quality 
        measures.--A consensus-based entity that has entered into a 
        contract under section 1890 shall, as part of such contract, 
        convene multi-stakeholder groups to provide recommendations on 
        the selection of individual or composite quality measures, for 
        use in reporting performance information to the public or for 
        use in public health care programs.
            ``(3) Multi-stakeholder input.--Not later than February 1 
        of each year (beginning with 2011), the consensus-based entity 
        described in paragraph (2) shall transmit to the Secretary the 
        recommendations of multi-stakeholder groups provided under 
        paragraph (2). Such recommendations shall be included in the 
        transmissions the consensus-based entity makes to the Secretary 
        under the contract provided for under section 1890.
            ``(4) Requirement for transparency in process.--
                    ``(A) In general.--In convening multi-stakeholder 
                groups under paragraph (2) with respect to the 
                selection of quality measures, the consensus-based 
                entity described in such paragraph shall provide for an 
                open and transparent process for the activities 
                conducted pursuant to such convening.
                    ``(B) Selection of organizations participating in 
                multi-stakeholder groups.--The process under paragraph 
                (2) shall ensure that the selection of representatives 
                of multi-stakeholder groups includes provision for 
                public nominations for, and the opportunity for public 
                comment on, such selection.
            ``(5) Use of input.--The respective proposed rule shall 
        contain a summary of the recommendations made by the multi-
        stakeholder groups under paragraph (2), as well as other 
        comments received regarding the proposed measures, and the 
        extent to which such proposed rule follows such recommendations 
        and the rationale for not following such recommendations.
            ``(6) Multi-stakeholder groups.--For purposes of this 
        subsection, the term `multi-stakeholder groups' means, with 
        respect to a quality measure, a voluntary collaborative of 
        organizations representing persons interested in or affected by 
        the use of such quality measure, such as the following:
                    ``(A) Hospitals and other institutional providers.
                    ``(B) Physicians.
                    ``(C) Health care quality alliances.
                    ``(D) Nurses and other health care practitioners.
                    ``(E) Health plans.
                    ``(F) Patient advocates and consumer groups.
                    ``(G) Employers.
                    ``(H) Public and private purchasers of health care 
                items and services.
                    ``(I) Labor organizations.
                    ``(J) Relevant departments or agencies of the 
                United States.
                    ``(K) Biopharmaceutical companies and manufacturers 
                of medical devices.
                    ``(L) Licensing, credentialing, and accrediting 
                bodies.
            ``(7) Funding.--
                    ``(A) In general.--The Secretary shall provide for 
                the transfer, from the Federal Hospital Insurance Trust 
                Fund under section 1817 and the Federal Supplementary 
                Medical Insurance Trust Fund under section 1841 (in 
                such proportion as the Secretary determines 
                appropriate), of $1,000,000, to the Secretary for 
                purposes of carrying out this subsection for each of 
                the fiscal years 2010 through 2014.
                    ``(B) Authorization of appropriations.--For 
                purposes of carrying out the provisions of this 
                subsection, in addition to funds otherwise available, 
                out of any funds in the Treasury not otherwise 
                appropriated, there are appropriated to the Secretary 
                of Health and Human Services $1,000,000 for each of the 
                fiscal years 2010 through 2014.''.

SEC. 1444. APPLICATION OF QUALITY MEASURES.

    (a) Inpatient Hospital Services.--Section 1886(b)(3)(B) of such Act 
(42 U.S.C. 1395ww(b)(3)(B)) is amended by adding at the end the 
following new clause:
    ``(x)(I) Subject to subclause (II), for purposes of reporting data 
on quality measures for inpatient hospital services furnished during 
fiscal year 2012 and each subsequent fiscal year, the quality measures 
specified under clause (viii) shall be measures selected by the 
Secretary from measures that have been endorsed by the entity with a 
contract with the Secretary under section 1890(a).
    ``(II) In the case of a specified area or medical topic determined 
appropriate by the Secretary for which a feasible and practical quality 
measure has not been endorsed by the entity with a contract under 
section 1890(a), the Secretary may specify a measure that is not so 
endorsed as long as due consideration is given to measures that have 
been endorsed or adopted by a consensus organization identified by the 
Secretary. The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (b) Outpatient Hospital Services.--Section 1833(t)(17) of such Act 
(42 U.S.C. 1395l(t)(17)) is amended by adding at the end the following 
new subparagraph:
                    ``(F) Use of endorsed quality measures.--The 
                provisions of clause (x) of section 1886(b)(3)(C) shall 
                apply to quality measures for covered OPD services 
                under this paragraph in the same manner as such 
                provisions apply to quality measures for inpatient 
                hospital services.''.
    (c) Physicians' Services.--Section 1848(k)(2)(C)(ii) of such Act 
(42 U.S.C. 1395w-4(k)(2)(C)(ii)) is amended by adding at the end the 
following: ``The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (d) Renal Dialysis Services.--Section 1881(h)(2)(B)(ii) of such Act 
(42 U.S.C. 1395rr(h)(2)(B)(ii)) is amended by adding at the end the 
following: ``The Secretary shall submit such a non-endorsed measure to 
the entity for consideration for endorsement. If the entity considers 
but does not endorse such a measure and if the Secretary does not 
phase-out use of such measure, the Secretary shall include the 
rationale for continued use of such a measure in rulemaking.''.
    (e) Endorsement of Standards.--Section 1890(b)(2) of the Social 
Security Act (42 U.S.C. 1395aaa(b)(2)) is amended by adding after and 
below subparagraph (B) the following:
        ```If the entity does not endorse a measure, such entity shall 
        explain the reasons and provide suggestions about changes to 
        such measure that might make it a potentially endorsable 
        measure.'''.
    (f) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall apply to quality measures applied for 
payment years beginning with 2012 or fiscal year 2012, as the case may 
be.

SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.

    Section 1890(d) of the Social Security Act (42 U.S.C. 1395aaa(d)) 
is amended by striking ``for each of fiscal years 2009 through 2012'' 
and inserting ``for fiscal year 2009, and $12,000,000 for each of the 
fiscal years 2010 through 2012.''

           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.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by section 1631(a), is further amended 
by inserting after section 1128G the following new section:

``SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS' FINANCIAL RELATIONSHIPS 
              WITH MANUFACTURERS AND DISTRIBUTORS OF COVERED DRUGS, 
              DEVICES, BIOLOGICALS, OR MEDICAL SUPPLIES UNDER MEDICARE, 
              MEDICAID, OR CHIP AND WITH ENTITIES THAT BILL FOR 
              SERVICES UNDER MEDICARE.

    ``(a) Reporting of Payments or Other Transfers of Value.--
            ``(1) In general.--Except as provided in this subsection, 
        not later than March 31, 2011, and annually thereafter, each 
        applicable manufacturer or distributor that provides a payment 
        or other transfer of value to a covered recipient, or to an 
        entity or individual at the request of or designated on behalf 
        of a covered recipient, shall submit to the Secretary, in such 
        electronic form as the Secretary shall require, the following 
        information with respect to the preceding calendar year:
                    ``(A) With respect to the covered recipient, the 
                recipient's name, business address, physician 
                specialty, and national provider identifier.
                    ``(B) With respect to the payment or other transfer 
                of value, other than a drug sample--
                            ``(i) its value and date;
                            ``(ii) the name of the related drug, 
                        device, or supply, if available; and
                            ``(iii) a description of its form, 
                        indicated (as appropriate for all that apply) 
                        as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form (as defined 
                                by the Secretary).
                    ``(C) With respect to a drug sample, the name, 
                number, date, and dosage units of the sample.
            ``(2) Aggregate reporting.--Information submitted by an 
        applicable manufacturer or distributor under paragraph (1) 
        shall include the aggregate amount of all payments or other 
        transfers of value provided by the manufacturer or distributor 
        to covered recipients (and to entities or individuals at the 
        request of or designated on behalf of a covered recipient) 
        during the year involved, including all payments and transfers 
        of value regardless of whether such payments or transfer of 
        value were individually disclosed.
            ``(3) Special rule for certain payments or other transfers 
        of value.--In the case where an applicable manufacturer or 
        distributor provides a payment or other transfer of value to an 
        entity or individual at the request of or designated on behalf 
        of a covered recipient, the manufacturer or distributor shall 
        disclose that payment or other transfer of value under the name 
        of the covered recipient.
            ``(4) Delayed reporting for payments made pursuant to 
        product development agreements.--In the case of a payment or 
        other transfer of value made to a covered recipient by an 
        applicable manufacturer or distributor pursuant to a product 
        development agreement for services furnished in connection with 
        the development of a new drug, device, biological, or medical 
        supply, the applicable manufacturer or distributor may report 
        the value and recipient of such payment or other transfer of 
        value in the first reporting period under this subsection in 
        the next reporting deadline after the earlier of the following:
                    ``(A) The date of the approval or clearance of the 
                covered drug, device, biological, or medical supply by 
                the Food and Drug Administration.
                    ``(B) Two calendar years after the date such 
                payment or other transfer of value was made.
            ``(5) Delayed reporting for payments made pursuant to 
        clinical investigations.--In the case of a payment or other 
        transfer of value made to a covered recipient by an applicable 
        manufacturer or distributor in connection with a clinical 
        investigation regarding a new drug, device, biological, or 
        medical supply, the applicable manufacturer or distributor may 
        report as required under this section in the next reporting 
        period under this subsection after the earlier of the 
        following:
                    ``(A) The date that the clinical investigation is 
                registered on the website maintained by the National 
                Institutes of Health pursuant to section 671 of the 
                Food and Drug Administration Amendments Act of 2007.
                    ``(B) Two calendar years after the date such 
                payment or other transfer of value was made.
            ``(6) Confidentiality.--Information described in paragraph 
        (4) or (5) shall be considered confidential and shall not be 
        subject to disclosure under section 552 of title 5, United 
        States Code, or any other similar Federal, State, or local law, 
        until or after the date on which the information is made 
        available to the public under such paragraph.
    ``(b) Reporting of Ownership Interest by Physicians in Hospitals 
and Other Entities That Bill Medicare.--Not later than March 31 of each 
year (beginning with 2011), each hospital or other health care entity 
(not including a Medicare Advantage organization) that bills the 
Secretary under part A or part B of title XVIII for services shall 
report on the ownership shares (other than ownership shares described 
in section 1877(c)) of each physician who, directly or indirectly, owns 
an interest in the entity. In this subsection, the term `physician' 
includes a physician's immediate family members (as defined for 
purposes of section 1877(a)).
    ``(c) Public Availability.--
            ``(1) In general.--The Secretary shall establish procedures 
        to ensure that, not later than September 30, 2011, and on June 
        30 of each year beginning thereafter, the information submitted 
        under subsections (a) and (b), other than information regard 
        drug samples, with respect to the preceding calendar year is 
        made available through an Internet website that--
                    ``(A) is searchable and is in a format that is 
                clear and understandable;
                    ``(B) contains information that is presented by the 
                name of the applicable manufacturer or distributor, the 
                name of the covered recipient, the business address of 
                the covered recipient, the specialty (if applicable) of 
                the covered recipient, the value of the payment or 
                other transfer of value, the date on which the payment 
                or other transfer of value was provided to the covered 
                recipient, the form of the payment or other transfer of 
                value, indicated (as appropriate) under subsection 
                (a)(1)(B)(ii), the nature of the payment or other 
                transfer of value, indicated (as appropriate) under 
                subsection (a)(1)(B)(iii), and the name of the covered 
                drug, device, biological, or medical supply, as 
                applicable;
                    ``(C) contains information that is able to be 
                easily aggregated and downloaded;
                    ``(D) contains a description of any enforcement 
                actions taken to carry out this section, including any 
                penalties imposed under subsection (d), during the 
                preceding year;
                    ``(E) contains background information on industry-
                physician relationships;
                    ``(F) in the case of information submitted with 
                respect to a payment or other transfer of value 
                described in subsection (a)(5), lists such information 
                separately from the other information submitted under 
                subsection (a) and designates such separately listed 
                information as funding for clinical research;
                    ``(G) contains any other information the Secretary 
                determines would be helpful to the average consumer; 
                and
                    ``(H) provides the covered recipient an opportunity 
                to submit corrections to the information made available 
                to the public with respect to the covered recipient.
            ``(2) Accuracy of reporting.--The accuracy of the 
        information that is submitted under subsections (a) and (b) and 
        made available under paragraph (1) shall be the responsibility 
        of the applicable manufacturer or distributor of a covered 
        drug, device, biological, or medical supply reporting under 
        subsection (a) or hospital or other health care entity 
        reporting physician ownership under subsection (b). The 
        Secretary shall establish procedures to ensure that the covered 
        recipient is provided with an opportunity to submit corrections 
        to the manufacturer, distributor, hospital, or other entity 
        reporting under subsection (a) or (b) with regard to 
        information made public with respect to the covered recipient 
        and, under such procedures, the corrections shall be 
        transmitted to the Secretary.
            ``(3) Special rule for drug samples.--Information relating 
        to drug samples provided under subsection (a) shall not be made 
        available to the public by the Secretary but may be made 
        available outside the Department of Health and Human Services 
        by the Secretary for research or legitimate business purposes 
        pursuant to data use agreements.
            ``(4) Special rule for national provider identifiers.--
        Information relating to national provider identifiers provided 
        under subsection (a) shall not be made available to the public 
        by the Secretary but may be made available outside the 
        Department of Health and Human Services by the Secretary for 
        research or legitimate business purposes pursuant to data use 
        agreements.
    ``(d) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), 
                except as provided in paragraph (2), any applicable 
                manufacturer or distributor that fails to submit 
                information required under subsection (a) in a timely 
                manner in accordance with regulations promulgated to 
                carry out such subsection, and any hospital or other 
                entity that fails to submit information required under 
                subsection (b) in a timely manner in accordance with 
                regulations promulgated to carry out such subsection 
                shall be subject to a civil money penalty of not less 
                than $1,000, but not more than $10,000, for each 
                payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                distributor or other entity shall not exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or distributor that knowingly 
                fails to submit information required under subsection 
                (a) in a timely manner in accordance with regulations 
                promulgated to carry out such subsection and any 
                hospital or other entity that fails to submit 
                information required under subsection (b) in a timely 
                manner in accordance with regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall 
                be imposed and collected in the same manner as civil 
                money penalties under subsection (a) of section 1128A 
                are imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) or (b) by an applicable manufacturer, 
                distributor, or entity shall not exceed $1,000,000, or, 
                if greater, 0.1 percentage of the total annual revenues 
                of the manufacturer, distributor, or entity.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.
            ``(4) Enforcement through state attorneys general.--The 
        attorney general of a State, after providing notice to the 
        Secretary of an intent to proceed under this paragraph in a 
        specific case and providing the Secretary with an opportunity 
        to bring an action under this subsection and the Secretary 
        declining such opportunity, may proceed under this subsection 
        against a manufacturer or distributor in the State.
    ``(e) Annual Report to Congress.--Not later than April 1 of each 
year beginning with 2011, the Secretary shall submit to Congress a 
report that includes the following:
            ``(1) The information submitted under this section during 
        the preceding year, aggregated for each applicable manufacturer 
        or distributor of a covered drug, device, biological, or 
        medical supply that submitted such information during such 
        year.
            ``(2) A description of any enforcement actions taken to 
        carry out this section, including any penalties imposed under 
        subsection (d), during the preceding year.
    ``(f) Definitions.--In this section:
            ``(1) Applicable manufacturer; applicable distributor.--The 
        term `applicable manufacturer' means a manufacturer of a 
        covered drug, device, biological, or medical supply, and the 
        term `applicable distributor' means a distributor of a covered 
        drug, device, or medical supply.
            ``(2) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving one or more human 
        subjects, or materials derived from human subjects, in which a 
        drug or device is administered, dispensed, or used.
            ``(3) Covered drug, device, biological, or medical 
        supply.--The term `covered' means, with respect to a drug, 
        device, biological, or medical supply, such a drug, device, 
        biological, or medical supply for which payment is available 
        under title XVIII or a State plan under title XIX or XXI (or a 
        waiver of such a plan).
            ``(4) Covered recipient.--The term `covered recipient' 
        means the following:
                    ``(A) A physician.
                    ``(B) A physician group practice.
                    ``(C) Any other prescriber of a covered drug, 
                device, biological, or medical supply.
                    ``(D) A pharmacy or pharmacist.
                    ``(E) A health insurance issuer, group health plan, 
                or other entity offering a health benefits plan, 
                including any employee of such an issuer, plan, or 
                entity.
                    ``(F) A pharmacy benefit manager, including any 
                employee of such a manager.
                    ``(G) A hospital.
                    ``(H) A medical school.
                    ``(I) A sponsor of a continuing medical education 
                program.
                    ``(J) A patient advocacy or disease specific group.
                    ``(K) A organization of health care professionals.
                    ``(L) A biomedical researcher.
                    ``(M) A group purchasing organization.
            ``(5) Distributor of a covered drug, device, or medical 
        supply.--The term `distributor of a covered drug, device, or 
        medical supply' means any entity which is engaged in the 
        marketing or distribution of a covered drug, device, or medical 
        supply (or any subsidiary of or entity affiliated with such 
        entity), but does not include a wholesale pharmaceutical 
        distributor.
            ``(6) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(7) Knowingly.--The term `knowingly' has the meaning 
        given such term in section 3729(b) of title 31, United States 
        Code.
            ``(8) Manufacturer of a covered drug, device, biological, 
        or medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which 
        is engaged in the production, preparation, propagation, 
        compounding, conversion, processing, marketing, or distribution 
        of a covered drug, device, biological, or medical supply (or 
        any subsidiary of or entity affiliated with such entity).
            ``(9) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value for or of any of the following:
                            ``(i) Gift, food, or entertainment.
                            ``(ii) Travel or trip.
                            ``(iii) Honoraria.
                            ``(iv) Research funding or grant.
                            ``(v) Education or conference funding.
                            ``(vi) Consulting fees.
                            ``(vii) Ownership or investment interest 
                        and royalties or license fee.
                    ``(B) Inclusions.--Subject to subparagraph (C), the 
                term `payment or other transfer of value' includes any 
                compensation, gift, honorarium, speaking fee, 
                consulting fee, travel, services, dividend, profit 
                distribution, stock or stock option grant, or any 
                ownership or investment interest held by a physician in 
                a manufacturer (excluding a dividend or other profit 
                distribution from, or ownership or investment interest 
                in, a publicly traded security or mutual fund (as 
                described in section 1877(c))).
                    ``(C) Exclusions.--The term `payment or other 
                transfer of value' does not include the following:
                            ``(i) Any payment or other transfer of 
                        value provided by an applicable manufacturer or 
                        distributor to a covered recipient where the 
                        amount transferred to, requested by, or 
                        designated on behalf of the covered recipient 
                        does not exceed $5.
                            ``(ii) The loan of a covered device for a 
                        short-term trial period, not to exceed 90 days, 
                        to permit evaluation of the covered device by 
                        the covered recipient.
                            ``(iii) Items or services provided under a 
                        contractual warranty, including the replacement 
                        of a covered device, where the terms of the 
                        warranty are set forth in the purchase or lease 
                        agreement for the covered device.
                            ``(iv) A transfer of anything of value to a 
                        covered recipient when the covered recipient is 
                        a patient and not acting in the professional 
                        capacity of a covered recipient.
                            ``(v) In-kind items used for the provision 
                        of charity care.
                            ``(vi) A dividend or other profit 
                        distribution from, or ownership or investment 
                        interest in, a publicly traded security and 
                        mutual fund (as described in section 1877(c)).
                            ``(vii) Compensation paid by a manufacturer 
                        or distributor of a covered drug, device, 
                        biological, or medical supply to a covered 
                        recipient who is directly employed by and works 
                        solely for such manufacturer or distributor.
                            ``(viii) Any discount or cash rebate.
            ``(10) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r). For purposes of this 
        section, such term does not include a physician who is an 
        employee of the applicable manufacturer that is required to 
        submit information under subsection (a).
    ``(g) Annual Reports to States.--Not later than April 1 of each 
year beginning with 2011, the Secretary shall submit to States a report 
that includes a summary of the information submitted under subsections 
(a) and (d) during the preceding year with respect to covered 
recipients or other hospitals and entities in the State.
    ``(h) Relation to State Laws.--
            ``(1) In general.--Effective on January 1, 2011, subject to 
        paragraph (2), the provisions of this section shall preempt any 
        law or regulation of a State or of a political subdivision of a 
        State that requires an applicable manufacturer and applicable 
        distributor (as such terms are defined in subsection (f)) to 
        disclose or report, in any format, the type of information 
        (described in subsection (a)) regarding a payment or other 
        transfer of value provided by the manufacturer to a covered 
        recipient (as so defined).
            ``(2) No preemption of additional requirements.--Paragraph 
        (1) shall not preempt any law or regulation of a State or of a 
        political subdivision of a State that requires any of the 
        following:
                    ``(A) The disclosure or reporting of information 
                not of the type required to be disclosed or reported 
                under this section.
                    ``(B) The disclosure or reporting, in any format, 
                of the type of information required to be disclosed or 
                reported under this section to a Federal, State, or 
                local governmental agency for public health 
                surveillance, investigation, or other public health 
                purposes or health oversight purposes.
                    ``(C) The discovery or admissibility of information 
                described in this section in a criminal, civil, or 
                administrative proceeding.''.
    (b) Availability of Information From the Disclosure of Financial 
Relationship Report (DFRR).--The Secretary of Health and Human Services 
shall submit to Congress a report on the full results of the Disclosure 
of Physician Financial Relationships surveys required pursuant to 
section 5006 of the Deficit Reduction Act of 2005. Such report shall be 
submitted to Congress not later than the date that is 6 months after 
the date such surveys are collected and shall be made publicly 
available on an Internet website of the Department of Health and Human 
Services.

   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.

    (a) In General.--Title XI of the Social Security Act is amended by 
inserting after section 1138 the following section:

``SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY HOSPITALS AND 
              AMBULATORY SURGICAL CENTERS ON HEALTH CARE-ASSOCIATED 
              INFECTIONS.

    ``(a) Reporting Requirement.--
            ``(1) In general.--The Secretary shall provide that a 
        hospital (as defined in subsection (g)) or ambulatory surgical 
        center meeting the requirements of titles XVIII or XIX may 
        participate in the programs established under such titles 
        (pursuant to the applicable provisions of law, including 
        sections 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in 
        accordance with this section, the hospital or center reports 
        such information on health care-associated infections that 
        develop in the hospital or center (and such demographic 
        information associated with such infections) as the Secretary 
        specifies.
            ``(2) Reporting protocols.--Such information shall be 
        reported in accordance with reporting protocols established by 
        the Secretary through the Director of the Centers for Disease 
        Control and Prevention (in this section referred to as the 
        `CDC') and to the National Healthcare Safety Network of the CDC 
        or under such another reporting system of such Centers as 
        determined appropriate by the Secretary in consultation with 
        such Director.
            ``(3) Coordination with hit.--The Secretary, through the 
        Director of the CDC and the Office of the National Coordinator 
        for Health Information Technology, shall ensure that the 
        transmission of information under this subsection is 
        coordinated with systems established under the HITECH Act, 
        where appropriate.
            ``(4) Procedures to ensure the validity of information.--
        The Secretary shall establish procedures regarding the validity 
        of the information submitted under this subsection in order to 
        ensure that such information is appropriately compared across 
        hospitals and centers. Such procedures shall address failures 
        to report as well as errors in reporting.
            ``(5) Implementation.--Not later than 1 year after the date 
        of enactment of this section, the Secretary, through the 
        Director of CDC, shall promulgate regulations to carry out this 
        section.
    ``(b) Public Posting of Information.--The Secretary shall promptly 
post, on the official public Internet site of the Department of Health 
and Human Services, the information reported under subsection (a). Such 
information shall be set forth in a manner that allows for the 
comparison of information on health care-associated infections--
            ``(1) among hospitals and ambulatory surgical centers; and
            ``(2) by demographic information.
    ``(c) Annual Report to Congress.--On an annual basis the Secretary 
shall submit to the Congress a report that summarizes each of the 
following:
            ``(1) The number and types of health care-associated 
        infections reported under subsection (a) in hospitals and 
        ambulatory surgical centers during such year.
            ``(2) Factors that contribute to the occurrence of such 
        infections, including health care worker immunization rates.
            ``(3) Based on the most recent information available to the 
        Secretary on the composition of the professional staff of 
        hospitals and ambulatory surgical centers, the number of 
        certified infection control professionals on the staff of 
        hospitals and ambulatory surgical centers.
            ``(4) The total increases or decreases in health care costs 
        that resulted from increases or decreases in the rates of 
        occurrence of each such type of infection during such year.
            ``(5) Recommendations, in coordination with the Center for 
        Quality Improvement established under section 931 of the Public 
        Health Service Act, for best practices to eliminate the rates 
        of occurrence of each such type of infection in hospitals and 
        ambulatory surgical centers.
    ``(d) Non-preemption of State Laws.--Nothing in this section shall 
be construed as preempting or otherwise affecting any provision of 
State law relating to the disclosure of information on health care-
associated infections or patient safety procedures for a hospital or 
ambulatory surgical center.
    ``(e) Health Care-associated Infection.--For purposes of this 
section:
            ``(1) In general.--The term `health care-associated 
        infection' means an infection that develops in a patient who 
        has received care in any institutional setting where health 
        care is delivered and is related to receiving health care.
            ``(2) Related to receiving health care.--The term `related 
        to receiving health care', with respect to an infection, means 
        that the infection was not incubating or present at the time 
        health care was provided.
    ``(f) Application to Critical Access Hospitals.--For purposes of 
this section, the term `hospital' includes a critical access hospital, 
as defined in section 1861(mm)(1).''.
    (b) Effective Date.--With respect to section 1138A of the Social 
Security Act (as inserted by subsection (a) of this section), the 
requirement under such section that hospitals and ambulatory surgical 
centers submit reports takes effect on such date (not later than 2 
years after the date of the enactment of this Act) as the Secretary of 
Health and Human Services shall specify. In order to meet such 
deadline, the Secretary may implement such section through guidance or 
other instructions.
    (c) GAO Report.--Not later than 18 months after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to Congress a report on the program established under 
section 1138A of the Social Security Act, as inserted by subsection 
(a). Such report shall include an analysis of the appropriateness of 
the types of information required for submission, compliance with 
reporting requirements, the success of the validity procedures 
established, and any conflict or overlap between the reporting required 
under such section and any other reporting systems mandated by either 
the States or the Federal Government.
    (d) Report on Additional Data.--Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Health and Human 
Services shall submit to the Congress a report on the appropriateness 
of expanding the requirements under such section to include additional 
information (such as health care worker immunization rates), in order 
to improve health care quality and patient safety.

              TITLE M--MEDICARE GRADUATE MEDICAL EDUCATION

SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (3) in paragraph (7)(E), by inserting ``and paragraph (8)'' 
        after ``this paragraph''; and
            (4) by adding at the end the following new paragraph:
            ``(8) Additional redistribution of unused residency 
        positions.--
                    ``(A) Reductions in limit based on unused 
                positions.--
                            ``(i) Programs subject to reduction.--If a 
                        hospital's reference resident level (specified 
                        in clause (ii)) is less than the otherwise 
                        applicable resident limit (as defined in 
                        subparagraph (C)(ii)), effective for portions 
                        of cost reporting periods occurring on or after 
                        July 1, 2011, the otherwise applicable resident 
                        limit shall be reduced by 90 percent of the 
                        difference between such otherwise applicable 
                        resident limit and such reference resident 
                        level.
                            ``(ii) Reference resident level.--
                                    ``(I) In general.--Except as 
                                otherwise provided in a subsequent 
                                subclause, the reference resident level 
                                specified in this clause for a hospital 
                                is the highest resident level for any 
                                of the 3 most recent cost reporting 
                                periods (ending before the date of the 
                                enactment of this paragraph) of the 
                                hospital for which a cost report has 
                                been settled (or, if not, submitted 
                                (subject to audit)), as determined by 
                                the Secretary.
                                    ``(II) Use of most recent 
                                accounting period to recognize 
                                expansion of existing programs.--If a 
                                hospital submits a timely request to 
                                increase its resident level due to an 
                                expansion, or planned expansion, of an 
                                existing residency training program 
                                that is not reflected on the most 
                                recent settled or submitted cost 
                                report, after audit and subject to the 
                                discretion of the Secretary, subject to 
                                subclause (IV), the reference resident 
                                level for such hospital is the resident 
                                level that includes the additional 
                                residents attributable to such 
                                expansion or establishment, as 
                                determined by the Secretary. The 
                                Secretary is authorized to determine an 
                                alternative reference resident level 
                                for a hospital that submitted to the 
                                Secretary a timely request, before the 
                                start of the 2009-2010 academic year, 
                                for an increase in its reference 
                                resident level due to a planned 
                                expansion.
                                    ``(III) Special provider 
                                agreement.--In the case of a hospital 
                                described in paragraph (4)(H)(v), the 
                                reference resident level specified in 
                                this clause is the limitation 
                                applicable under subclause (I) of such 
                                paragraph.
                                    ``(IV) Previous redistribution.--
                                The reference resident level specified 
                                in this clause for a hospital shall be 
                                increased to the extent required to 
                                take into account an increase in 
                                resident positions made available to 
                                the hospital under paragraph (7)(B) 
                                that are not otherwise taken into 
                                account under a previous subclause.
                            ``(iii) Affiliation.--The provisions of 
                        clause (i) shall be applied to hospitals which 
                        are members of the same affiliated group (as 
                        defined by the Secretary under paragraph 
                        (4)(H)(ii)) and to the extent the hospitals can 
                        demonstrate that they are filling any 
                        additional  resident slots allocated to other 
                        hospitals through an affiliation agreement, the 
                        Secretary shall adjust the determination of 
                        available slots accordingly, or which the 
                        Secretary otherwise has permitted the resident 
                        positions (under section 402 of the Social 
                        Security Amendments of 1967) to be aggregated 
                        for purposes of applying the resident position 
                        limitations under this subsection.
                    ``(B) Redistribution.--
                            ``(i) In general.--The Secretary shall 
                        increase the otherwise applicable resident 
                        limit for each qualifying hospital that submits 
                        an application under this subparagraph by such 
                        number as the Secretary may approve for 
                        portions of cost reporting periods occurring on 
                        or after July 1, 2011. The estimated aggregate 
                        number of increases in the otherwise applicable 
                        resident limit under this subparagraph may not 
                        exceed the Secretary's estimate of the 
                        aggregate reduction in such limits attributable 
                        to subparagraph (A).
                            ``(ii) Requirements for qualifying 
                        hospitals.--A hospital is not a qualifying 
                        hospital for purposes of this paragraph unless 
                        the following requirements are met:
                                    ``(I) Maintenance of primary care 
                                resident level.--The hospital maintains 
                                the number of primary care residents at 
                                a level that is not less than the base 
                                level of primary care residents 
                                increased by the number of additional 
                                primary care resident positions 
                                provided to the hospital under this 
                                subparagraph. For purposes of this 
                                subparagraph, the `base level of 
                                primary care residents' for a hospital 
                                is the level of such residents as of a 
                                base period (specified by the 
                                Secretary), determined without regard 
                                to whether such positions were in 
                                excess of the otherwise applicable 
                                resident limit for such period but 
                                taking into account the application of 
                                subclauses (II) and (III) of 
                                subparagraph (A)(ii).
                                    ``(II) Dedicated assignment of 
                                additional resident positions to 
                                primary care.--The hospital assigns all 
                                such additional resident positions for 
                                primary care residents.
                                    ``(III) Accreditation.--The 
                                hospital's residency programs in 
                                primary care are fully accredited or, 
                                in the case of a residency training 
                                program not in operation as of the base 
                                year, the hospital is actively applying 
                                for such accreditation for the program 
                                for such additional resident positions 
                                (as determined by the Secretary).
                            ``(iii) Considerations in redistribution.--
                        In determining for which qualifying hospitals 
                        the increase in the otherwise applicable 
                        resident limit is provided under this 
                        subparagraph, the Secretary shall take into 
                        account the demonstrated likelihood of the 
                        hospital filling the positions within the first 
                        3 cost reporting periods beginning on or after 
                        July 1, 2011, made available under this 
                        subparagraph, as determined by the Secretary.
                            ``(iv) Priority for certain hospitals.--In 
                        determining for which qualifying hospitals the 
                        increase in the otherwise applicable resident 
                        limit is provided under this subparagraph, the 
                        Secretary shall distribute the increase to 
                        qualifying hospitals based on the following 
                        criteria:
                                    ``(I) The Secretary shall give 
                                preference to hospitals that had a 
                                reduction in resident training 
                                positions under subparagraph (A).
                                    ``(II) The Secretary shall give 
                                preference to hospitals with 3-year 
                                primary care residency training 
                                programs, such as family practice and 
                                general internal medicine.
                                    ``(III) The Secretary shall give 
                                preference to hospitals insofar as they 
                                have in effect formal arrangements (as 
                                determined by the Secretary) that place 
                                greater emphasis upon training in 
                                Federally qualified health centers, 
                                rural health clinics, and other 
                                nonprovider settings, and to hospitals 
                                that receive additional payments under 
                                subsection (d)(5)(F) and emphasize 
                                training in an outpatient department.
                                    ``(IV) The Secretary shall give 
                                preference to hospitals with a number 
                                of positions (as of July 1, 2009) in 
                                excess of the otherwise applicable 
                                resident limit for such period.
                                    ``(V) The Secretary shall give 
                                preference to hospitals that place 
                                greater emphasis upon training in a 
                                health professional shortage area 
                                (designated under section 332 of the 
                                Public Health Service Act) or a health 
                                professional needs area (designated 
                                under section 2211 of such Act).
                                    ``(VI) The Secretary shall give 
                                preference to hospitals in States that 
                                have low resident-to-population ratios 
                                (including a greater preference for 
                                those States with lower resident-to-
                                population ratios).
                            ``(v) Limitation.--In no case shall more 
                        than 20 full-time equivalent additional 
                        residency positions be made available under 
                        this subparagraph with respect to any hospital.
                            ``(vi) Application of per resident amounts 
                        for primary care.--With respect to additional 
                        residency positions in a hospital attributable 
                        to the increase provided under this 
                        subparagraph, the approved FTE resident amounts 
                        are deemed to be equal to the hospital per 
                        resident amounts for primary care and 
                        nonprimary care computed under paragraph (2)(D) 
                        for that hospital.
                            ``(vi) Distribution.--The Secretary shall 
                        distribute the increase in resident training 
                        positions to qualifying hospitals under this 
                        subparagraph not later than July 1, 2011.
                    ``(C) Resident level and limit defined.--In this 
                paragraph:
                            ``(i) The term `resident level' has the 
                        meaning given such term in paragraph (7)(C)(i).
                            ``(ii) The term `otherwise applicable 
                        resident limit' means, with respect to a 
                        hospital, the limit otherwise applicable under 
                        subparagraphs (F)(i) and (H) of paragraph (4) 
                        on the resident level for the hospital 
                        determined without regard to this paragraph but 
                        taking into account paragraph (7)(A).
                    ``(D) Maintenance of primary care resident level.--
                In carrying out this paragraph, the Secretary shall 
                require hospitals that receive additional resident 
                positions under subparagraph (B)--
                            ``(i) to maintain records, and periodically 
                        report to the Secretary, on the number of 
                        primary care residents in its residency 
                        training programs; and
                            ``(ii) as a condition of payment for a cost 
                        reporting period under this subsection for such 
                        positions, to maintain the level of such 
                        positions at not less than the sum of--
                                    ``(I) the base level of primary 
                                care resident positions (as determined 
                                under subparagraph (B)(ii)(I)) before 
                                receiving such additional positions; 
                                and
                                    ``(II) the number of such 
                                additional positions.''.
    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming provision.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
    ``(x) For discharges occurring on or after July 1, 2011, insofar as 
an additional payment amount under this subparagraph is attributable to 
resident positions distributed to a hospital under subsection 
(h)(8)(B), the indirect teaching adjustment factor shall be computed in 
the same manner as provided under clause (ii) with respect to such 
resident positions.''.
    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173) is amended by striking ``section 1886(h)(7)'' and all that 
follows and inserting ``paragraphs (7) and (8) of subsection (h) of 
section 1886 of the Social Security Act''.

SEC. 1502. INCREASING TRAINING IN NONPROVIDER SETTINGS.

    (a) Direct GME.--Section 1886(h)(4)(E) of the Social Security Act 
(42 U.S.C. 1395ww(h)) is amended--
            (1) by designating the first sentence as a clause (i) with 
        the heading ``In general'' and appropriate indentation;
            (2) by striking ``shall be counted and that all the time'' 
        and inserting ``shall be counted and that--
                                    ``(I) effective for cost reporting 
                                periods beginning before July 1, 2009, 
                                all the time'';
            (3) in subclause (I), as inserted by paragraph (1), by 
        striking the period at the end and inserting ``; and''; and
                    (A) by inserting after subclause (I), as so 
                inserted, the following:
                                    ``(II) effective for cost reporting 
                                periods beginning on or after July 1, 
                                2009, all the time so spent by a 
                                resident shall be counted towards the 
                                determination of full-time equivalency, 
                                without regard to the setting in which 
                                the activities are performed, if the 
                                hospital incurs the costs of the 
                                stipends and fringe benefits of the 
                                resident during the time the resident 
                                spends in that setting.
                        Any hospital claiming under this subparagraph 
                        for time spent in a nonprovider setting shall 
                        maintain and make available to the Secretary 
                        records regarding the amount of such time and 
                        such amount in comparison with amounts of such 
                        time in such base year as the Secretary shall 
                        specify.''.
    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(iv)) is amended--
            (1) by striking ``(iv) Effective for discharges occurring 
        on or after October 1, 1997'' and inserting ``(iv)(I) Effective 
        for discharges occurring on or after October 1, 1997, and 
        before July 1, 2009''; and
            (2) by inserting after subclause (I), as inserted by 
        paragraph (1), the following new subclause:
            ``(II) Effective for discharges occurring on or after July 
        1, 2009, all the time spent by an intern or resident in patient 
        care activities at an entity in a nonprovider setting shall be 
        counted towards the determination of full-time equivalency if 
        the hospital incurs the costs of the stipends and fringe 
        benefits of the intern or resident during the time the intern 
        or resident spends in that setting.''.
    (c) OIG Study on Impact on Training.--The Inspector General of the 
Department of Health and Human Services shall analyze the data 
collected by the Secretary of Health and Human Services from the 
records made available to the Secretary under section 1886(h)(4)(E) of 
the Social Security Act, as amended by subsection (a), in order to 
assess the extent to which there is an increase in time spent by 
medical residents in training in nonprovider settings as a result of 
the amendments made by this section. Not later than 4 years after the 
date of the enactment of this Act, the Inspector General shall submit a 
report to Congress on such analysis and assessment.
    (d) Demonstration Project for Approved Teaching Health Centers.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a demonstration project under which an approved 
        teaching health center (as defined in paragraph (3)) would be 
        eligible for payment under subsections (h) and (k) of section 
        1886 of the Social Security Act (42 U.S.C. 1395ww) of amounts 
        for its own direct costs of graduate medical education 
        activities for primary care residents, as well as for the 
        direct costs of graduate medical education activities of its 
        contracting hospital for such residents, in a manner similar to 
        the manner in which such payments would be made to a hospital 
        if the hospital were to operate such a program.
            (2) Conditions.--Under the demonstration project--
                    (A) an approved teaching health center shall 
                contract with an accredited teaching hospital to carry 
                out the inpatient responsibilities of the primary care 
                residency program of the hospital involved and is 
                responsible for payment to the hospital for the 
                hospital's costs of the salary and fringe benefits for 
                residents in the program;
                    (B) the number of primary care residents of the 
                center shall not count against the contracting 
                hospital's resident limit; and
                    (C) the contracting hospital shall agree not to 
                diminish the number of residents in its primary care 
                residency training program.
            (3) Approved teaching health center defined.--In this 
        subsection, the term ``approved teaching health center'' means 
        a nonprovider setting, such as a Federally qualified health 
        center or rural health clinic (as defined in section 1861(aa) 
        of the Social Security Act), that develops and operates an 
        accredited primary care residency program for which funding 
        would be available if it were operated by a hospital.

SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
              ACTIVITIES AND OTHER ACTIVITIES.

    (a) Direct GME.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(E), as amended by section 1502(a)--
                    (A) in clause (i), by striking ``Such rules'' and 
                inserting ``Subject to clause (ii), such rules''; and
                    (B) by adding at the end the following new clause:
                            ``(ii) Treatment of certain nonprovider and 
                        didactic activities.--Such rules shall provide 
                        that all time spent by an intern or resident in 
                        an approved medical residency training program 
                        in a nonprovider setting that is primarily 
                        engaged in furnishing patient care (as defined 
                        in paragraph (5)(K)) in nonpatient care 
                        activities, such as didactic conferences and 
                        seminars, but not including research not 
                        associated with the treatment or diagnosis of a 
                        particular patient, as such time and activities 
                        are defined by the Secretary, shall be counted 
                        toward the determination of full-time 
                        equivalency.'';
            (2) in paragraph (4), by adding at the end the following 
        new subparagraph:
                    ``(I) In determining the hospital's number of full-
                time equivalent residents for purposes of this 
                subsection, all the time that is spent by an intern or 
                resident in an approved medical residency training 
                program on vacation, sick leave, or other approved 
                leave, as such time is defined by the Secretary, and 
                that does not prolong the total time the resident is 
                participating in the approved program beyond the normal 
                duration of the program shall be counted toward the 
                determination of full-time equivalency.''; and
            (3) in paragraph (5), by adding at the end the following 
        new subparagraph:
                    ``(K) Nonprovider setting that is primarily engaged 
                in furnishing patient care.--The term `nonprovider 
                setting that is primarily engaged in furnishing patient 
                care' means a nonprovider setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.
    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)), as amended by section 1501(b), is amended by 
adding at the end the following new clause:
    ``(xi)(I) The provisions of subparagraph (I) of subsection (h)(4) 
shall apply under this subparagraph in the same manner as they apply 
under such subsection.
    ``(II) In determining the hospital's number of full-time equivalent 
residents for purposes of this subparagraph, all the time spent by an 
intern or resident in an approved medical residency training program in 
nonpatient care activities, such as didactic conferences and seminars, 
as such time and activities are defined by the Secretary, that occurs 
in the hospital shall be counted toward the determination of full-time 
equivalency if the hospital--
            ``(aa) is recognized as a subsection (d) hospital;
            ``(bb) is recognized as a subsection (d) Puerto Rico 
        hospital;
            ``(cc) is reimbursed under a reimbursement system 
        authorized under section 1814(b)(3); or
            ``(dd) is a provider-based hospital outpatient department.
    ``(III) In determining the hospital's number of full-time 
equivalent residents for purposes of this subparagraph, all the time 
spent by an intern or resident in an approved medical residency 
training program in research activities that are not associated with 
the treatment or diagnosis of a particular patient, as such time and 
activities are defined by the Secretary, shall not be counted toward 
the determination of full-time equivalency.''.
    (c) Effective Dates; Application.--
            (1) In general.--Except as otherwise provided, the 
        Secretary of Health and Human Services shall implement the 
        amendments made by this section in a manner so as to apply to 
        cost reporting periods beginning on or after January 1, 1983.
            (2) Direct gme.--Section 1886(h)(4)(E)(ii) of the Social 
        Security Act, as added by subsection (a)(1)(B), shall apply to 
        cost reporting periods beginning on or after July 1, 2008.
            (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social 
        Security Act, as added by subsection (b), shall apply to cost 
        reporting periods beginning on or after October 1, 2001. Such 
        section, as so added, shall not give rise to any inference on 
        how the law in effect prior to such date should be interpreted.
            (4) Application.--The amendments made by this section shall 
        not be applied in a manner that requires reopening of any 
        settled hospital cost reports as to which there is not a 
        jurisdictionally proper appeal pending as of the date of the 
        enactment of this Act on the issue of payment for indirect 
        costs of medical education under section 1886(d)(5)(B) of the 
        Social Security Act or for direct graduate medical education 
        costs under section 1886(h) of such Act.

SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED 
              HOSPITALS.

    (a) Direct GME.--Section 1886(h)(4)(H) of the Social Security Act 
(42 U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clause:
                            ``(vi) Redistribution of residency slots 
                        after a hospital closes.--
                                    ``(I) In general.--The Secretary 
                                shall, by regulation, establish a 
                                process consistent with subclauses (II) 
                                and (III) under which, in the case 
                                where a hospital (other than a hospital 
                                described in clause (v)) with an 
                                approved medical residency program in a 
                                State closes on or after the date that 
                                is 2 years before the date of the 
                                enactment of this clause, the Secretary 
                                shall increase the otherwise applicable 
                                resident limit under this paragraph for 
                                other hospitals in the State in 
                                accordance with this clause.
                                    ``(II) Process for hospitals in 
                                certain areas.--In determining for 
                                which hospitals the increase in the 
                                otherwise applicable resident limit 
                                described in subclause (I) is provided, 
                                the Secretary shall establish a process 
                                to provide for such increase to one or 
                                more hospitals located in the State. 
                                Such process shall take into 
                                consideration the recommendations 
                                submitted to the Secretary by the 
                                senior health official (as designated 
                                by the chief executive officer of such 
                                State) if such recommendations are 
                                submitted not later than 180 days after 
                                the date of the hospital closure 
                                involved (or, in the case of a hospital 
                                that closed after the date that is 2 
                                years before the date of the enactment 
                                of this clause, 180 days after such 
                                date of enactment).
                                    ``(III) Limitation.--The estimated 
                                aggregate number of increases in the 
                                otherwise applicable resident limits 
                                for hospitals under this clause shall 
                                be equal to the estimated number of 
                                resident positions in the approved 
                                medical residency programs that closed 
                                on or after the date described in 
                                subclause (I).''.
    (b) No Effect on Temporary FTE Cap Adjustments.--The amendments 
made by this section shall not effect any temporary adjustment to a 
hospital's FTE cap under section 413.79(h) of title 42, Code of Federal 
Regulations (as in effect on the date of enactment of this Act) and 
shall not affect the application of section 1886(h)(4)(H)(v) of the 
Social Security Act.
    (c) Conforming Amendments.--
            (1) Section 422(b)(2) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003 (Public Law 108-
        173), as amended by section 1501(c), is amended by striking 
        ``(7) and'' and inserting ``(4)(H)(vi), (7), and''.
            (2) Section 1886(h)(7)(E) of the Social Security Act (42 
        U.S.C. 1395ww(h)(7)(E)) is amended by inserting ``or under 
        paragraph (4)(H)(vi)'' after ``under this paragraph''.

SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED MEDICAL RESIDENCY 
              TRAINING.

    (a) Specification of Goals for Approved Medical Residency Training 
Programs.--Section 1886(h)(1) of the Social Security Act (42 U.S.C. 
1395ww(h)(1)) is amended--
            (1) by designating the matter beginning with 
        ``Notwithstanding'' as a subparagraph (A) with the heading ``In 
        general.--'' and with appropriate indentation; and
            (2) by adding at the end the following new paragraph:
                    ``(B) Goals and accountability for approved medical 
                residency training programs.--The goals of medical 
                residency training programs are to foster a physician 
                workforce so that physicians are trained to be able to 
                do the following:
                            ``(i) Work effectively in various health 
                        care delivery settings, such as nonprovider 
                        settings.
                            ``(ii) Coordinate patient care within and 
                        across settings relevant to their specialties.
                            ``(iii) Understand the relevant cost and 
                        value of various diagnostic and treatment 
                        options.
                            ``(iv) Work in inter-professional teams and 
                        multi-disciplinary team-based models in 
                        provider and nonprovider settings to enhance 
                        safety and improve quality of patient care.
                            ``(v) Be knowledgeable in methods of 
                        identifying systematic errors in health care 
                        delivery and in implementing systematic 
                        solutions in case of such errors, including 
                        experience and participation in continuous 
                        quality improvement projects to improve health 
                        outcomes of the population the physicians 
                        serve.
                            ``(vi) Be meaningful EHR users (as 
                        determined under section 1848(o)(2)) in the 
                        delivery of care and in improving the quality 
                        of the health of the community and the 
                        individuals that the hospital serves.''
    (b) GAO Study on Evaluation of Training Programs.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study to evaluate the extent to which 
        medical residency training programs--
                    (A) are meeting the goals described in section 
                1886(h)(1)(B) of the Social Security Act, as added by 
                subsection (a), in a range of residency programs, 
                including primary care and other specialties; and
                    (B) have the appropriate faculty expertise to teach 
                the topics required to achieve such goals.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        Congress a report on such study and shall include in such 
        report recommendations as to how medical residency training 
        programs could be further encouraged to meet such goals through 
        means such as--
                    (A) development of curriculum requirements; and
                    (B) assessment of the accreditation processes of 
                the Accreditation Council for Graduate Medical 
                Education and the American Osteopathic Association and 
                effectiveness of those processes in accrediting medical 
                residency programs that meet the goals referred to in 
                paragraph (1)(A).

                       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.

    (a) In General.--Section 1817(k) of the Social Security Act (42 
U.S.C. 1395i(k)) is amended--
            (1) by adding at the end the following new paragraph:
            ``(7) Additional funding.--In addition to the funds 
        otherwise appropriated to the Account from the Trust Fund under 
        paragraphs (3) and (4) and for purposes described in paragraphs 
        (3)(C) and (4)(A), there are hereby appropriated an additional 
        $100,000,000 to such Account from such Trust Fund for each 
        fiscal year beginning with 2011. The funds appropriated under 
        this paragraph shall be allocated in the same proportion as the 
        total funding appropriated with respect to paragraphs (3)(A) 
        and (4)(A) was allocated with respect to fiscal year 2010, and 
        shall be available without further appropriation until 
        expended.''.
            (2) in paragraph (4)(A)--
                    (A) by inserting ``for activities described in 
                paragraph (3)(C) and'' after ``necessary''; and
                    (B) by inserting ``until expended'' after 
                ``appropriation''.
    (b) Flexibility in Pursuing Fraud and Abuse.--Section 1893(a) of 
the Social Security Act (42 U.S.C. 1395ddd(a)) is amended by inserting 
``, or otherwise,'' after ``entities''.

           Subtitle B--Enhanced Penalties for Fraud and Abuse

SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS ON PROVIDER OR 
              SUPPLIER ENROLLMENT APPLICATIONS.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)) is amended--
            (1) in paragraph (1)(D), by striking all that follows ``in 
        which the person was excluded'' and inserting ``under Federal 
        law from the Federal health care program under which the claim 
        was made, or'';
            (2) by striking ``or'' at the end of paragraph (6);
            (3) in paragraph (7), by inserting at the end ``or'';
            (4) by inserting after paragraph (7) the following new 
        paragraph:
            ``(8) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material fact in 
        any application, agreement, bid, or contract to participate or 
        enroll as a provider of services or supplier under a Federal 
        health care program, including managed care organizations under 
        title XIX, Medicare Advantage organizations under part C of 
        title XVIII, prescription drug plan sponsors under part D of 
        title XVIII, and entities that apply to participate as 
        providers of services or suppliers in such managed care 
        organizations and such plans;'';
            (5) in the matter following paragraph (8), as inserted by 
        paragraph (4), by striking ``or in cases under paragraph (7), 
        $50,000 for each such act)'' and inserting ``in cases under 
        paragraph (7), $50,000 for each such act, or in cases under 
        paragraph (8), $50,000 for each false statement, omission, or 
        misrepresentation of a material fact)''; and
            (6) in the second sentence, by striking ``for a lawful 
        purpose)'' and inserting ``for a lawful purpose, or in cases 
        under paragraph (8), an assessment of not more than 3 times the 
        amount claimed as the result of the false statement, omission, 
        or misrepresentation of material fact claimed by a provider of 
        services or supplier whose application to participate contained 
        such false statement, omission, or misrepresentation)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to acts committed on or after January 1, 2010.

SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF FALSE STATEMENTS 
              MATERIAL TO A FALSE CLAIM.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by section 1611, is further amended--
            (1) in paragraph (7), by striking ``or'' at the end;
            (2) in paragraph (8), by inserting ``or'' at the end; and
            (3) by inserting after paragraph (8), the following new 
        paragraph:
            ``(9) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to a false or fraudulent 
        claim for payment for items and services furnished under a 
        Federal health care program;''; and
            (4) in the matter following paragraph (9), as inserted by 
        paragraph (3)--
                    (A) by striking ``or in cases under paragraph (8)'' 
                and inserting ``in cases under paragraph (8)''; and
                    (B) by striking ``a material fact)'' and inserting 
                ``a material fact, in cases under paragraph (9), 
                $50,000 for each false record or statement)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to acts committed on or after January 1, 2010.

SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPECTIONS.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by sections 1611 and 1612, is further 
amended--
            (1) in paragraph (8), by striking ``or'' at the end;
            (2) in paragraph (9), by inserting ``or'' at the end;
            (3) by inserting after paragraph (9) the following new 
        paragraph:
            ``(10) fails to grant timely access, upon reasonable 
        request (as defined by the Secretary in regulations), to the 
        Inspector General of the Department of Health and Human 
        Services, for the purpose of audits, investigations, 
        evaluations, or other statutory functions of the Inspector 
        General of the Department of Health and Human Services;''; and
            (4) in the matter following paragraph (10), as inserted by 
        paragraph (3)--
                    (A) by striking ``or'' after ``$50,000 for each 
                such act,''; and
                    (B) by inserting ``, or in cases under paragraph 
                (10), $15,000 for each day of the failure described in 
                such paragraph'' after ``false record or statement''.
    (b) Ensuring Timely Inspections Relating to Contracts With MA 
Organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 1395w-
27(d)(2)) is amended--
            (1) in subparagraph (A), by inserting ``timely'' before 
        ``inspect''; and
            (2) in subparagraph (B), by inserting ``timely'' before 
        ``audit and inspect''.
    (c) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.

    (a) Medicare.--Part A of title XVIII of the Social Security Act is 
amended by inserting after section 1819 the following new section:

``SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE CARE.

    ``(a) In General.--If the Secretary determines on the basis of a 
survey or otherwise, that a hospice program that is certified for 
participation under this title has demonstrated a substandard quality 
of care and failed to meet such other requirements as the Secretary may 
find necessary in the interest of the health and safety of the 
individuals who are provided care and services by the agency or 
organization involved and determines--
            ``(1) that the deficiencies involved immediately jeopardize 
        the health and safety of the individuals to whom the program 
        furnishes items and services, the Secretary shall take 
        immediate action to remove the jeopardy and correct the 
        deficiencies through the remedy specified in subsection 
        (b)(2)(A)(iii) or terminate the certification of the program, 
        and may provide, in addition, for 1 or more of the other 
        remedies described in subsection (b)(2)(A); or
            ``(2) that the deficiencies involved do not immediately 
        jeopardize the health and safety of the individuals to whom the 
        program furnishes items and services, the Secretary may--
                    ``(A) impose intermediate sanctions developed 
                pursuant to subsection (b), in lieu of terminating the 
                certification of the program; and
                    ``(B) if, after such a period of intermediate 
                sanctions, the program is still not in compliance with 
                such requirements, the Secretary shall terminate the 
                certification of the program.
        If the Secretary determines that a hospice program that is 
        certified for participation under this title is in compliance 
        with such requirements but, as of a previous period, was not in 
        compliance with such requirements, the Secretary may provide 
        for a civil money penalty under subsection (b)(2)(A)(i) for the 
        days in which it finds that the program was not in compliance 
        with such requirements.
    ``(b) Intermediate Sanctions.--
            ``(1) Development and implementation.--The Secretary shall 
        develop and implement, by not later than July 1, 2012--
                    ``(A) a range of intermediate sanctions to apply to 
                hospice programs under the conditions described in 
                subsection (a), and
                    ``(B) appropriate procedures for appealing 
                determinations relating to the imposition of such 
                sanctions.
            ``(2) Specified sanctions.--
                    ``(A) In general.--The intermediate sanctions 
                developed under paragraph (1) may include--
                            ``(i) civil money penalties in an amount 
                        not to exceed $10,000 for each day of 
                        noncompliance or, in the case of a per instance 
                        penalty applied by the Secretary, not to exceed 
                        $25,000,
                            ``(ii) denial of all or part of the 
                        payments to which a hospice program would 
                        otherwise be entitled under this title with 
                        respect to items and services furnished by a 
                        hospice program on or after the date on which 
                        the Secretary determines that intermediate 
                        sanctions should be imposed pursuant to 
                        subsection (a)(2),
                            ``(iii) the appointment of temporary 
                        management to oversee the operation of the 
                        hospice program and to protect and assure the 
                        health and safety of the individuals under the 
                        care of the program while improvements are 
                        made,
                            ``(iv) corrective action plans, and
                            ``(v) in-service training for staff.
                The provisions of section 1128A (other than subsections 
                (a) and (b)) shall apply to a civil money penalty under 
                clause (i) in the same manner as such provisions apply 
                to a penalty or proceeding under section 1128A(a). The 
                temporary management under clause (iii) shall not be 
                terminated until the Secretary has determined that the 
                program has the management capability to ensure 
                continued compliance with all requirements referred to 
                in that clause.
                    ``(B) Clarification.--The sanctions specified in 
                subparagraph (A) are in addition to sanctions otherwise 
                available under State or Federal law and shall not be 
                construed as limiting other remedies, including any 
                remedy available to an individual at common law.
                    ``(C) Commencement of payment.--A denial of payment 
                under subparagraph (A)(ii) shall terminate when the 
                Secretary determines that the hospice program no longer 
                demonstrates a substandard quality of care and meets 
                such other requirements as the Secretary may find 
                necessary in the interest of the health and safety of 
                the individuals who are provided care and services by 
                the agency or organization involved.
            ``(3) Secretarial authority.--The Secretary shall develop 
        and implement, by not later than July 1, 2011, specific 
        procedures with respect to the conditions under which each of 
        the intermediate sanctions developed under paragraph (1) is to 
        be applied, including the amount of any fines and the severity 
        of each of these sanctions. Such procedures shall be designed 
        so as to minimize the time between identification of 
        deficiencies and imposition of these sanctions and shall 
        provide for the imposition of incrementally more severe fines 
        for repeated or uncorrected deficiencies.''.
    (b) Application to Medicaid.--Section 1905(o) of the Social 
Security Act (42 U.S.C. 1396d(o)) is amended by adding at the end the 
following new paragraph:
    ``(4) The provisions of section 1819A shall apply to a hospice 
program providing hospice care under this title in the same manner as 
such provisions apply to a hospice program providing hospice care under 
title XVIII.''.
    (c) Application to CHIP.--Title XXI of the Social Security Act is 
amended by adding at the end the following new section:

``SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE.

    ``The provisions of section 1819A shall apply to a hospice program 
providing hospice care under this title in the same manner such 
provisions apply to a hospice program providing hospice care under 
title XVIII.''.

SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EXCLUDED FROM PROGRAM 
              PARTICIPATION.

    (a) In General.--Section 1128A(a) of the Social Security Act (42 
U.S.C. 1320a-7a(a)), as amended by the previous sections, is further 
amended--
            (1) by striking ``or'' at the end of paragraph (9);
            (2) by inserting ``or'' at the end of paragraph (10);
            (3) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) orders or prescribes an item or service, including 
        without limitation home health care, diagnostic and clinical 
        lab tests, prescription drugs, durable medical equipment, 
        ambulance services, physical or occupational therapy, or any 
        other item or service, during a period when the person has been 
        excluded from participation in a Federal health care program, 
        and the person knows or should know that a claim for such item 
        or service will be presented to such a program;''; and
            (4) in the matter following paragraph (11), as inserted by 
        paragraph (2), by striking ``$15,000 for each day of the 
        failure described in such paragraph'' and inserting ``$15,000 
        for each day of the failure described in such paragraph, or in 
        cases under paragraph (11), $50,000 for each order or 
        prescription for an item or service by an excluded 
        individual''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF FALSE INFORMATION BY 
              MEDICARE ADVANTAGE AND PART D PLANS.

    (a) In General.--Section 1857(g)(2)(A) of the Social Security Act 
(42 U.S.C. 1395w-27(g)(2)(A)) is amended by inserting ``except with 
respect to a determination under subparagraph (E), an assessment of not 
more than 3 times the amount claimed by such plan or plan sponsor based 
upon the misrepresentation or falsified information involved,'' after 
``for each such determination,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVANTAGE AND PART D 
              MARKETING VIOLATIONS.

    (a) In General.--Section 1857(g)(1) of the Social Security Act (42 
U.S.C. 1395w-27(g)(1)), as amended by section 1221(b), is amended--
            (1) in subparagraph (G), by striking ``or'' at the end;
            (2) by inserting after subparagraph (H) the following new 
        subparagraphs:
                    ``(I) except as provided under subparagraph (C) or 
                (D) of section 1860D-1(b)(1), enrolls an individual in 
                any plan under this part without the prior consent of 
                the individual or the designee of the individual;
                    ``(J) transfers an individual enrolled under this 
                part from one plan to another without the prior consent 
                of the individual or the designee of the individual or 
                solely for the purpose of earning a commission;
                    ``(K) fails to comply with marketing restrictions 
                described in subsections (h) and (j) of section 1851 or 
                applicable implementing regulations or guidance; or
                    ``(L) employs or contracts with any individual or 
                entity who engages in the conduct described in 
                subparagraphs (A) through (K) of this paragraph;''; and
            (3) by adding at the end the following new sentence: ``The 
        Secretary may provide, in addition to any other remedies 
        authorized by law, for any of the remedies described in 
        paragraph (2), if the Secretary determines that any employee or 
        agent of such organization, or any provider or supplier who 
        contracts with such organization, has engaged in any conduct 
        described in subparagraphs (A) through (L) of this paragraph.''
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF PROGRAM AUDITS.

    (a) In General.--Section 1128(b)(2) of the Social Security Act (42 
U.S.C. 1320a-7(b)(2)) is amended--
            (1) in the heading, by inserting ``or audit'' after 
        ``investigation''; and
            (2) by striking ``investigation into'' and all that follows 
        through the period and inserting ``investigation or audit 
        related to--''
                            ``(i) any offense described in paragraph 
                        (1) or in subsection (a); or
                            ``(ii) the use of funds received, directly 
                        or indirectly, from any Federal health care 
                        program (as defined in section 1128B(f)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to violations committed on or after January 1, 2010.

SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM 
              PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS.

    (a) In General.--Section 1128(c) of the Social Security Act, as 
previously amended by this subdivision, is further amended--
            (1) in the heading, by striking ``and Period'' and 
        inserting ``, Period, and Effect''; and
            (2) by adding at the end the following new paragraph:
            ``(4)(A) For purposes of this Act, subject to subparagraph 
        (C), the effect of exclusion is that no payment may be made by 
        any Federal health care program (as defined in section 
        1128B(f)) with respect to any item or service furnished--
                    ``(i) by an excluded individual or entity; or
                    ``(ii) at the medical direction or on the 
                prescription of a physician or other authorized 
                individual when the person submitting a claim for such 
                item or service knew or had reason to know of the 
                exclusion of such individual.
            ``(B) For purposes of this section and sections 1128A and 
        1128B, subject to subparagraph (C), an item or service has been 
        furnished by an individual or entity if the individual or 
        entity directly or indirectly provided, ordered, manufactured, 
        distributed, prescribed, or otherwise supplied the item or 
        service regardless of how the item or service was paid for by a 
        Federal health care program or to whom such payment was made.
            ``(C)(i) Payment may be made under a Federal health care 
        program for emergency items or services (not including items or 
        services furnished in an emergency room of a hospital) 
        furnished by an excluded individual or entity, or at the 
        medical direction or on the prescription of an excluded 
        physician or other authorized individual during the period of 
        such individual's exclusion.
            ``(ii) In the case that an individual eligible for benefits 
        under title XVIII or XIX submits a claim for payment for items 
        or services furnished by an excluded individual or entity, and 
        such individual eligible for such benefits did not know or have 
        reason to know that such excluded individual or entity was so 
        excluded, then, notwithstanding such exclusion, payment shall 
        be made for such items or services. In such case the Secretary 
        shall notify such individual eligible for such benefits of the 
        exclusion of the individual or entity furnishing the items or 
        services. Payment shall not be made for items or services 
        furnished by an excluded individual or entity to an individual 
        eligible for such benefits after a reasonable time (as 
        determined by the Secretary in regulations) after the Secretary 
        has notified the individual eligible for such benefits of the 
        exclusion of the individual or entity furnishing the items or 
        services.
            ``(iii) In the case that a claim for payment for items or 
        services furnished by an excluded individual or entity is 
        submitted by an individual or entity other than an individual 
        eligible for benefits under title XVIII or XIX or the excluded 
        individual or entity, and the Secretary determines that the 
        individual or entity that submitted the claim took reasonable 
        steps to learn of the exclusion and reasonably relied upon 
        inaccurate or misleading information from the relevant Federal 
        health care program or its contractor, the Secretary may waive 
        repayment of the amount paid in violation of the exclusion to 
        the individual or entity that submitted the claim for the items 
        or services furnished by the excluded individual or entity. If 
        a Federal health care program contractor provided inaccurate or 
        misleading information that resulted in the waiver of an 
        overpayment under this clause, the Secretary shall take 
        appropriate action to recover the improperly paid amount from 
        the contractor.''.

         Subtitle C--Enhanced Program and Provider Protections

SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AUTHORITY.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by inserting after section 1128F the following 
new section:

``SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PROTECTIONS IN THE 
              MEDICARE, MEDICAID, AND CHIP PROGRAMS.

    ``(a) Certain Authorized Screening, Enhanced Oversight Periods, and 
Enrollment Moratoria.--
            ``(1) In general.--For periods beginning after January 1, 
        2011, in the case that the Secretary determines there is a 
        significant risk of fraudulent activity (as determined by the 
        Secretary based on relevant complaints, reports, referrals by 
        law enforcement or other sources, data analysis, trending 
        information, or claims submissions by providers of services and 
        suppliers) with respect to a category of provider of services 
        or supplier of items or services, including a category within a 
        geographic area, under title XVIII, XIX, or XXI, the Secretary 
        may impose any of the following requirements with respect to a 
        provider of services or a supplier (whether such provider or 
        supplier is initially enrolling in the program or is renewing 
        such enrollment):
                    ``(A) Screening under paragraph (2).
                    ``(B) Enhanced oversight periods under paragraph 
                (3).
                    ``(C) Enrollment moratoria under paragraph (4).
        In applying this subsection for purposes of title XIX and XXI 
        the Secretary may require a State to carry out the provisions 
        of this subsection as a requirement of the State plan under 
        title XIX or the child health plan under title XXI. Actions 
        taken and determinations made under this subsection shall not 
        be subject to review by a judicial tribunal.
            ``(2) Screening.--For purposes of paragraph (1), the 
        Secretary shall establish procedures under which screening is 
        conducted with respect to providers of services and suppliers 
        described in such paragraph. Such screening may include--
                    ``(A) licensing board checks;
                    ``(B) screening against the list of individuals and 
                entities excluded from the program under title XVIII, 
                XIX, or XXI;
                    ``(C) the excluded provider list system;
                    ``(D) background checks; and
                    ``(E) unannounced pre-enrollment or other site 
                visits.
            ``(3) Enhanced oversight period.--For purposes of paragraph 
        (1), the Secretary shall establish procedures to provide for a 
        period of not less than 30 days and not more than 365 days 
        during which providers of services and suppliers described in 
        such paragraph, as the Secretary determines appropriate, would 
        be subject to enhanced oversight, such as required or 
        unannounced (or required and unannounced) site visits or 
        inspections, prepayment review, enhanced review of claims, and 
        such other actions as specified by the Secretary, under the 
        programs under titles XVIII, XIX, and XXI. Under such 
        procedures, the Secretary may extend such period for more than 
        365 days if the Secretary determines that after the initial 
        period such additional period of oversight is necessary.
            ``(4) Moratorium on enrollment of providers and 
        suppliers.--For purposes of paragraph (1), the Secretary, based 
        upon a finding of a risk of serious ongoing fraud within a 
        program under title XVIII, XIX, or XXI, may impose a moratorium 
        on the enrollment of providers of services and suppliers within 
        a category of providers of services and suppliers (including a 
        category within a specific geographic area) under such title. 
        Such a moratorium may only be imposed if the Secretary makes a 
        determination that the moratorium would not adversely impact 
        access of individuals to care under such program.
            ``(5) Clarification.--Nothing in this subsection shall be 
        interpreted to preclude or limit the ability of a State to 
        engage in provider screening or enhanced provider oversight 
        activities beyond those required by the Secretary.''.
    (b) Conforming Amendments.--
            (1) Medicaid.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (23), by inserting before the 
                semicolon at the end the following: ``or by a person to 
                whom or entity to which a moratorium under section 
                1128G(a)(4) is applied during the period of such 
                moratorium'';
                    (B) in paragraph (72); by striking at the end 
                ``and'';
                    (C) in paragraph (73), by striking the period at 
                the end and inserting ``and''; and
                    (D) by adding after paragraph (73) the following 
                new paragraph:
            ``(74) provide that the State will enforce any 
        determination made by the Secretary under subsection (a) of 
        section 1128G (relating to a significant risk of fraudulent 
        activity with respect to a category of provider or supplier 
        described in such subsection (a) through use of the appropriate 
        procedures described in such subsection (a)), and that the 
        State will carry out any activities as required by the 
        Secretary for purposes of such subsection (a).''.
            (2) CHIP.--Section 2102 of such Act (42 U.S.C. 1397bb) is 
        amended by adding at the end the following new subsection:
    ``(d) Program Integrity.--A State child health plan shall include a 
description of the procedures to be used by the State--
            ``(1) to enforce any determination made by the Secretary 
        under subsection (a) of section 1128G (relating to a 
        significant risk of fraudulent activity with respect to a 
        category of provider or supplier described in such subsection 
        through use of the appropriate procedures described in such 
        subsection); and
            ``(2) to carry out any activities as required by the 
        Secretary for purposes of such subsection.''.
            (3) Medicare.--Section 1866(j) of such Act (42 U.S.C. 
        1395cc(j)) is amended by adding at the end the following new 
        paragraph:
            ``(3) Program integrity.--The provisions of section 
        1128G(a) apply to enrollments and renewals of enrollments of 
        providers of services and suppliers under this title.''.

SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP PROGRAM DISCLOSURE 
              REQUIREMENTS RELATING TO PREVIOUS AFFILIATIONS.

    (a) In General.--Section 1128G of the Social Security Act, as 
inserted by section 1631, is amended by adding at the end the following 
new subsection:
    ``(b) Enhanced Program Disclosure Requirements.--
            ``(1) Disclosure.--A provider of services or supplier who 
        submits on or after July 1, 2011, an application for enrollment 
        and renewing enrollment in a program under title XVIII, XIX, or 
        XXI shall disclose (in a form and manner determined by the 
        Secretary) any current affiliation or affiliation within the 
        previous 10-year period with a provider of services or supplier 
        that has uncollected debt or with a person or entity that has 
        been suspended or excluded under such program, subject to a 
        payment suspension, or has had its billing privileges revoked.
            ``(2) Enhanced safeguards.--If the Secretary determines 
        that such previous affiliation of such provider or supplier 
        poses a risk of fraud, waste, or abuse, the Secretary may apply 
        such enhanced safeguards as the Secretary determines necessary 
        to reduce such risk associated with such provider or supplier 
        enrolling or participating in the program under title XVIII, 
        XIX, or XXI. Such safeguards may include enhanced oversight, 
        such as enhanced screening of claims, required or unannounced 
        (or required and unannounced) site visits or inspections, 
        additional information reporting requirements, and conditioning 
        such enrollment on the provision of a surety bond.
            ``(3) Authority to deny participation.--If the Secretary 
        determines that there has been at least one such affiliation 
        and that such affiliation or affiliations, as applicable, of 
        such provider or supplier poses a serious risk of fraud, waste, 
        or abuse, the Secretary may deny the application of such 
        provider or supplier.''.
    (b) Conforming Amendments.--
            (1) Medicaid.--Paragraph (74) of section 1902(a) of such 
        Act (42 U.S.C. 1396a(a)), as added by section 1631(b)(1), is 
        amended--
                    (A) by inserting ``or subsection (b) of such 
                section (relating to disclosure requirements)'' before 
                ``, and that the State''; and
                    (B) by inserting before the period the following: 
                ``and apply any enhanced safeguards, with respect to a 
                provider or supplier described in such subsection (b), 
                as the Secretary determines necessary under such 
                subsection (b)''.
            (2) CHIP.--Subsection (d) of section 2102 of such Act (42 
        U.S.C. 1397bb), as added by section 1631(b)(2), is amended--
                    (A) in paragraph (1), by striking at the end 
                ``and'';
                    (B) in paragraph (2) by striking the period at the 
                end and inserting ``; and'' and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) to enforce any determination made by the Secretary 
        under subsection (b) of section 1128G (relating to disclosure 
        requirements) and to apply any enhanced safeguards, with 
        respect to a provider or supplier described in such subsection, 
        as the Secretary determines necessary under such subsection.''.

SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER FOR CERTAIN 
              EVALUATION AND MANAGEMENT SERVICES.

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4), as 
amended by section 4101 of the HITECH Act (Public Law 111-5), is 
amended by adding at the end the following new subsection:
    ``(p) Payment Modifier for Certain Evaluation and Management 
Services.--The Secretary shall establish a payment modifier under the 
fee schedule under this section for evaluation and management services 
(as specified in section 1842(b)(16)(B)(ii)) that result in the 
ordering of additional services (such as lab tests), the prescription 
of drugs, the furnishing or ordering of durable medical equipment in 
order to enable better monitoring of claims for payment for such 
additional services under this title, or the ordering, furnishing, or 
prescribing of other items and services determined by the Secretary to 
pose a high risk of waste, fraud, and abuse. The Secretary may require 
providers of services or suppliers to report such modifier in claims 
submitted for payment.''.

SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICARE INTEGRITY 
              PROGRAM.

    (a) In General.--Section 1893(c) of the Social Security Act (42 
U.S.C. 1395ddd(c)) is amended--
            (1) in paragraph (3), by striking at the end ``and'';
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) for the contract year beginning in 2011 and each 
        subsequent contract year, the entity provides assurances to the 
        satisfaction of the Secretary that the entity will conduct 
        periodic evaluations of the effectiveness of the activities 
        carried out by such entity under the Program and will submit to 
        the Secretary an annual report on such activities; and''.
    (b) Reference to Medicaid Integrity Program.--For a similar 
provision with respect to the Medicaid Integrity Program, see section 
1752.

SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE 
              WASTE, FRAUD, AND ABUSE.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
42 U.S.C. 1395kk) is amended by adding at the end the following new 
subsection:
    ``(d) Compliance Programs for Providers of Services and 
Suppliers.--
            ``(1) In general.--The Secretary may disenroll a provider 
        of services or a supplier (other than a physician or a skilled 
        nursing facility) under this title (or may impose any civil 
        monetary penalty or other intermediate sanction under paragraph 
        (4)) if such provider of services or supplier fails to, subject 
        to paragraph (5), establish a compliance program that contains 
        the core elements established under paragraph (2).
            ``(2) Establishment of core elements.--The Secretary, in 
        consultation with the Inspector General of the Department of 
        Health and Human Services, shall establish core elements for a 
        compliance program under paragraph (1). Such elements may 
        include written policies, procedures, and standards of conduct, 
        a designated compliance officer and a compliance committee; 
        effective training and education pertaining to fraud, waste, 
        and abuse for the organization's employees and contractors; a 
        confidential or anonymous mechanism, such as a hotline, to 
        receive compliance questions and reports of fraud, waste, or 
        abuse; disciplinary guidelines for enforcement of standards; 
        internal monitoring and auditing procedures, including 
        monitoring and auditing of contractors; procedures for ensuring 
        prompt responses to detected offenses and development of 
        corrective action initiatives, including responses to potential 
        offenses; and procedures to return all identified overpayments 
        to the programs under this title, title XIX, and title XXI.
            ``(3) Timeline for implementation.--The Secretary shall 
        determine a timeline for the establishment of the core elements 
        under paragraph (2) and the date on which a provider of 
        services and suppliers (other than physicians) shall be 
        required to have established such a program for purposes of 
        this subsection.
            ``(4) CMS enforcement authority.--The Administrator for the 
        Centers of Medicare & Medicaid Services shall have the 
        authority to determine whether a provider of services or 
        supplier described in subparagraph (3) has met the requirement 
        of this subsection and to impose a civil monetary penalty not 
        to exceed $50,000 for each violation. The Secretary may also 
        impose other intermediate sanctions, including corrective 
        action plans and additional monitoring in the case of a 
        violation of this subsection.
            ``(5) Pilot program.--The Secretary may conduct a pilot 
        program on the application of this subsection with respect to a 
        category of providers of services or suppliers (other than 
        physicians) that the Secretary determines to be a category 
        which is at high risk for waste, fraud, and abuse before 
        implementing the requirements of this subsection to all 
        providers of services and suppliers described in paragraph 
        (3).''.
    (b) Reference to Similar Medicaid Provision.--For a similar 
provision with respect to the Medicaid program under title XIX of the 
Social Security Act, see section 1753.

SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
              NOT MORE THAN 12 MONTHS.

    (a) Purpose.--In general, the 36-month period currently allowed for 
claims filing under parts A, B, C, and, D of title XVIII of the Social 
Security Act presents opportunities for fraud schemes in which 
processing patterns of the Centers for Medicare & Medicaid Services can 
be observed and exploited. Narrowing the window for claims processing 
will not overburden providers and will reduce fraud and abuse.
    (b) Reducing Maximum Period for Submission.--
            (1) Part a.--Section 1814(a) of the Social Security Act (42 
        U.S.C. 1395f(a)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows and inserting 
                ``period of 1 calendar year from which such services 
                are furnished; and''; and
                    (B) by adding at the end the following new 
                sentence: ``In applying paragraph (1), the Secretary 
                may specify exceptions to the 1 calendar year period 
                specified in such paragraph.''.
            (2) Part b.--Section 1835(a) of such Act (42 U.S.C. 
        1395n(a)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows and inserting 
                ``period of 1 calendar year from which such services 
                are furnished; and''; and
                    (B) by adding at the end the following new 
                sentence: ``In applying paragraph (1), the Secretary 
                may specify exceptions to the 1 calendar year period 
                specified in such paragraph.''.
            (3) Parts c and d.--Section 1857(d) of such Act is amended 
        by adding at the end the following new paragraph:
            ``(7) Period for submission of claims.--The contract shall 
        require an MA organization or PDP sponsor to require any 
        provider of services under contract with, in partnership with, 
        or affiliated with such organization or sponsor to ensure that, 
        with respect to items and services furnished by such provider 
        to an enrollee of such organization, written request, signed by 
        such enrollee, except in cases in which the Secretary finds it 
        impracticable for the enrollee to do so, is filed for payment 
        for such items and services in such form, in such manner, and 
        by such person or persons as the Secretary may by regulation 
        prescribe, no later than the close of the 1 calendar year 
        period after such items and services are furnished. In applying 
        the previous sentence, the Secretary may specify exceptions to 
        the 1 calendar year period specified.''.
    (c) Effective Date.--The amendments made by subsection (b) shall be 
effective for items and services furnished on or after January 1, 2011.

SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL EQUIPMENT OR HOME 
              HEALTH SERVICES REQUIRED TO BE MEDICARE ENROLLED 
              PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42 
U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and 
inserting ``physician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B)''.
    (b) Home Health Services.--
            (1) Part a.--Section 1814(a)(2) of such Act (42 U.S.C. 
        1395(a)(2)) is amended in the matter preceding subparagraph (A) 
        by inserting ``in the case of services described in 
        subparagraph (C), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' before 
        ``or, in the case of services''.
            (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
        1395n(a)(2)) is amended in the matter preceding subparagraph 
        (A) by inserting ``, or in the case of services described in 
        subparagraph (A), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' after 
        ``a physician''.
    (c) Discretion To Expand Application.--The Secretary may extend the 
requirement applied by the amendments made by subsections (a) and (b) 
to durable medical equipment and home health services (relating to 
requiring certifications and written orders to be made by enrolled 
physicians and health professions) to other categories of items or 
services under this title, including covered part D drugs as defined in 
section 1860D-2(e), if the Secretary determines that such application 
would help to reduce the risk of waste, fraud, and abuse with respect 
to such other categories under title XVIII of the Social Security Act.
    (d) Effective Date.--The amendments made by this section shall 
apply to written orders and certifications made on or after July 1, 
2010.

SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
              REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social 
Security Act, as amended by section 1635, is further amended by adding 
at the end the following new paragraph:
    ``(10) The Secretary may disenroll, for a period of not more than 
one year for each act, a physician or supplier under section 1866(j) if 
such physician or supplier fails to maintain and, upon request of the 
Secretary, provide access to documentation relating to written orders 
or requests for payment for durable medical equipment, certifications 
for home health services, or referrals for other items or services 
written or ordered by such physician or supplier under this title, as 
specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42 
U.S.C. 1395cc), as amended by section 1635, is further amended--
            (1) in subparagraph (V), by striking at the end ``and'';
            (2) in subparagraph (W), by striking the period at the end 
        and adding ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(X) maintain and, upon request of the Secretary, 
                provide access to documentation relating to written 
                orders or requests for payment for durable medical 
                equipment, certifications for home health services, or 
                referrals for other items or services written or 
                ordered by the provider under this title, as specified 
                by the Secretary.''.
    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting 
``, ordering, referring for furnishing, or certifying the need for'' 
after ``furnishing''.
    (d) Effective Date.--The amendments made by this section shall 
apply to orders, certifications, and referrals made on or after January 
1, 2010.

SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
              PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH 
              SERVICES OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
            (1) Part a.--Section 1814(a)(2)(C) of such Act is amended--
                    (A) by striking ``and such services'' and inserting 
                ``such services''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and, in the case of a certification or 
                recertification made by a physician after January 1, 
                2010, prior to making such certification the physician 
                must document that the physician has had a face-to-face 
                encounter (including through use of telehealth and 
                other than with respect to encounters that are incident 
                to services involved) with the individual during the 6-
                month period preceding such certification, or other 
                reasonable timeframe as determined by the Secretary''.
            (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
        Act is amended--
                    (A) by striking ``and'' before ``(iii)''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and (iv) in the case of a certification 
                or recertification after January 1, 2010, prior to 
                making such certification the physician must document 
                that the physician has had a face-to-face encounter 
                (including through use of telehealth and other than 
                with respect to encounters that are incident to 
                services involved) with the individual during the 6-
                month period preceding such certification or 
                recertification, or other reasonable timeframe as 
                determined by the Secretary''.
    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) 
is amended by adding at the end the following: ``and shall require that 
such an order be written pursuant to the physician documenting that the 
physician has had a face-to-face encounter (including through use of 
telehealth and other than with respect to encounters that are incident 
to services involved) with the individual involved during the 6-month 
period preceding such written order, or other reasonable timeframe as 
determined by the Secretary''.
    (c) Application to Other Areas Under Medicare.--The Secretary may 
apply the face-to-face encounter requirement described in the 
amendments made by subsections (a) and (b) to other items and services 
for which payment is provided under title XVIII of the Social Security 
Act based upon a finding that such an decision would reduce the risk of 
waste, fraud, or abuse.
    (d) Application to Medicaid and CHIP.--The requirements pursuant to 
the amendments made by subsections (a) and (b) shall apply in the case 
of physicians making certifications for home health services under 
title XIX or XXI of the Social Security Act, in the same manner and to 
the same extent as such requirements apply in the case of physicians 
making such certifications under title XVIII of such Act.

SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AUTHORITY TO PROGRAM 
              EXCLUSION INVESTIGATIONS.

    (a) In General.--Section 1128(f) of the Social Security Act (42 
U.S.C. 1320a-7(f)) is amended by adding at the end the following new 
paragraph:
    ``(4) The provisions of subsections (d) and (e) of section 205 
shall apply with respect to this section to the same extent as they are 
applicable with respect to title II. The Secretary may delegate the 
authority granted by section 205(d) (as made applicable to this 
section) to the Inspector General of the Department of Health and Human 
Services or the Administrator of the Centers for Medicare & Medicaid 
Services for purposes of any investigation under this section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to investigations beginning on or after January 1, 2010.

SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND MEDICAID OVERPAYMENTS.

    Section 1128G of the Social Security Act, as inserted by section 
1631 and amended by section 1632, is further amended by adding at the 
end the following new subsection:
    ``(c) Reports on and Repayment of Overpayments Identified Through 
Internal Audits and Reviews.--
            ``(1) Reporting and returning overpayments.--If a person 
        knows of an overpayment, the person must--
                    ``(A) report and return the overpayment to the 
                Secretary, the State, an intermediary, a carrier, or a 
                contractor, as appropriate, at the correct address, and
                    ``(B) notify the Secretary, the State, 
                intermediary, carrier, or contractor to whom the 
                overpayment was returned in writing of the reason for 
                the overpayment.
            ``(2) Timing.--An overpayment must be reported and returned 
        under paragraph (1)(A) by not later than the date that is 60 
        days after the date the person knows of the overpayment.
        Any known overpayment retained later than the applicable date 
        specified in this paragraph creates an obligation as defined in 
        section 3729(b)(3) of title 31 of the United States Code.
            ``(3) Clarification.--Repayment of any overpayments (or 
        refunding by withholding of future payments) by a provider of 
        services or supplier does not otherwise limit the provider or 
        supplier's potential liability for administrative obligations 
        such as applicable interests, fines, and specialties or civil 
        or criminal sanctions involving the same claim if it is 
        determined later that the reason for the overpayment was 
        related to fraud by the provider or supplier or the employees 
        or agents of such provider or supplier.
            ``(4) Definitions.--In this subsection:
                    ``(A) Knows.--The term `knows' has the meaning 
                given the terms `knowing' and `knowingly' in section 
                3729(b) of title 31 of the United States Code.
                    ``(B) Overpayment.--The term ``overpayment'' means 
                any finally determined funds that a person receives or 
                retains under title XVIII, XIX, or XXI to which the 
                person, after applicable reconciliation, is not 
                entitled under such title.
                    ``(C) Person.--The term `person' means a provider 
                of services, supplier, Medicaid managed care 
                organization (as defined in section 1903(m)(1)(A)), 
                Medicare Advantage organization (as defined in section 
                1859(a)(1)), or PDP sponsor (as defined in section 
                1860D-41(a)(13)), but excluding a beneficiary.''.

SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIVERS FOR OIG EXCLUSIONS 
              TO BENEFICIARIES OF ANY FEDERAL HEALTH CARE PROGRAM.

    Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 
1128A(i)(5)) of that program''.

SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL DIALYSIS FACILITIES.

    Section 1881(b) of the Social Security Act (42 U.S.C. 1395rr(b)) is 
amended by adding at the end the following new paragraph:
    ``(15) For purposes of evaluating or auditing payments made to 
renal dialysis facilities for items and services under this section 
under paragraph (1), each such renal dialysis facility, upon the 
request of the Secretary, shall provide to the Secretary access to 
information relating to any ownership or compensation arrangement 
between such facility and the medical director of such facility or 
between such facility and any physician.''.

SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICARE.

    (a) Medicare.--Section 1866(j)(1) of the Social Security Act (42 
U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Billing agents and clearinghouses required to 
                be register under medicare.--Any agent, clearinghouse, 
                or other alternate payee that submits claims on behalf 
                of a health care provider must be registered with the 
                Secretary in a form and manner specified by the 
                Secretary.''.
    (b) Medicaid.--For a similar provision with respect to the Medicaid 
program under title XIX of the Social Security Act, see section 1759.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to claims submitted on or after January 1, 2012.

SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO FALSE CLAIMS ACT 
              AMENDMENTS.

    Section 1128A of the Social Security Act, as amended by sections 
1611, 1612, 1613, and 1615, is further amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``to an officer, 
                employee, or agent of the United States, or of any 
                department or agency thereof, or of any State agency 
                (as defined in subsection (i)(1))'';
                    (B) in paragraph (4)--
                            (i) by striking ``participating in a 
                        program under title XVIII or a State health 
                        care program'' and inserting ``participating in 
                        a Federal health care program (as defined in 
                        section 1128B(f))''; and
                            (ii) in subparagraph (A), by striking 
                        ``title XVIII or a State health care program'' 
                        and inserting ``a Federal health care program 
                        (as defined in section 1128B(f))'';
                    (C) by striking ``or'' at the end of paragraph 
                (10);
                    (D) by inserting after paragraph (11) the following 
                new paragraphs:
            ``(12) conspires to commit a violation of this section; or
            ``(13) knowingly makes, uses, or causes to be made or used, 
        a false record or statement material to an obligation to pay or 
        transmit money or property to a Federal health care program, or 
        knowingly conceals or knowingly and improperly avoids or 
        decreases an obligation to pay or transmit money or property to 
        a Federal health care program;''; and
                    (E) in the matter following paragraph (13), as 
                inserted by subparagraph (D), by striking ``or in cases 
                under paragraph (11), $50,000 for each such violation'' 
                and inserting ``in cases under paragraph (11), $50,000 
                for each such violation, in cases under paragraph (12), 
                $50,000 for any violation described in this section 
                committed in furtherance of the conspiracy involved; or 
                in cases under paragraph (13), $50,000 for each false 
                record or statement, or concealment, avoidance, or 
                decrease''; and
                    (F) in the second sentence, by striking ``such 
                false statement or misrepresentation)'' and inserting 
                ``such false statement or misrepresentation, in cases 
                under paragraph (12), an assessment of not more than 3 
                times the total amount that would otherwise apply for 
                any violation described in this section committed in 
                furtherance of the conspiracy involved, or in cases 
                under paragraph (13), an assessment of not more than 3 
                times the total amount of the obligation to which the 
                false record or statement was material or that was 
                avoided or decreased)''.
            (2) in subsection (c)(1), by striking ``six years'' and 
        inserting ``10 years''; and
            (3) in subsection (i)--
                    (A) by amending paragraph (2) to read as follows:
            ``(2) The term ``claim'' means any application, request, or 
        demand, whether under contract, or otherwise, for money or 
        property for items and services under a Federal health care 
        program (as defined in section 1128B(f)), whether or not the 
        United States or a State agency has title to the money or 
        property, that--
                    ``(A) is presented or caused to be presented to an 
                officer, employee, or agent of the United States, or of 
                any department or agency thereof, or of any State 
                agency (as defined in subsection (i)(1)); or
                    ``(B) is made to a contractor, grantee, or other 
                recipient if the money or property is to be spent or 
                used on the Federal health care program's behalf or to 
                advance a Federal health care program interest, and if 
                the Federal health care program--
                            ``(i) provides or has provided any portion 
                        of the money or property requested or demanded; 
                        or
                            ``(ii) will reimburse such contractor, 
                        grantee, or other recipient for any portion of 
                        the money or property which is requested or 
                        demanded.'';
                    (B) by amending paragraph (3) to read as follows:
            ``(3) The term `item or service' means, without limitation, 
        any medical, social, management, administrative, or other item 
        or service used in connection with or directly or indirectly 
        related to a Federal health care program.'';
                    (C) in paragraph (6)--
                            (i) in subparagraph (C), by striking at the 
                        end ``or'';
                            (ii) in the first subparagraph (D), by 
                        striking at the end the period and inserting 
                        ``; or''; and
                            (iii) by redesignating the second 
                        subparagraph (D) as a subparagraph (E);
                    (D) by amending paragraph (7) to read as follows:
            ``(7) The terms `knowing', `knowingly', and `should know' 
        mean that a person, with respect to information--
                    ``(A) has actual knowledge of the information;
                    ``(B) acts in deliberate ignorance of the truth or 
                falsity of the information; or
                    ``(C) acts in reckless disregard of the truth or 
                falsity of the information;
        and require no proof of specific intent to defraud.''; and
                    (E) by adding at the end the following new 
                paragraphs:
            ``(8) The term `obligation' means an established duty, 
        whether or not fixed, arising from an express or implied 
        contractual, grantor-grantee, or licensor-licensee 
        relationship, from a fee-based or similar relationship, from 
        statute or regulation, or from the retention of any 
        overpayment.
            ``(9) The term `material' means having a natural tendency 
        to influence, or be capable of influencing, the payment or 
        receipt of money or property.''.

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

SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDENTIFY FRAUD, WASTE, 
              AND ABUSE.

    Section 1128G of the Social Security Act, as added by section 1631 
and amended by sections 1632 and 1641, is further amended by adding at 
the end the following new subsection;
    ``(d) Access to Information Necessary To Identify Fraud, Waste, and 
Abuse.--For purposes of law enforcement activity, and to the extent 
consistent with applicable disclosure, privacy, and security laws, 
including the Health Insurance Portability and Accountability Act of 
1996 and the Privacy Act of 1974, and subject to any information 
systems security requirements enacted by law or otherwise required by 
the Secretary, the Attorney General shall have access, facilitation by 
the Inspector General of the Department of Health and Human Services, 
to claims and payment data relating to titles XVIII and XIX, in 
consultation with the Centers for Medicare & Medicaid Services or the 
owner of such data.''.

SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
              AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER 
              DATA BANK.

    (a) In General.--To eliminate duplication between the Healthcare 
Integrity and Protection Data Bank (HIPDB) established under section 
1128E of the Social Security Act and the National Practitioner Data 
Bank (NPBD) established under the Health Care Quality Improvement Act 
of 1986, section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) 
is amended--
            (1) in subsection (a), by striking ``Not later than'' and 
        inserting ``Subject to subsection (h), not later than'';
            (2) in the first sentence of subsection (d)(2), by striking 
        ``(other than with respect to requests by Federal agencies)''; 
        and
            (3) by adding at the end the following new subsection:
    ``(h) Sunset of the Healthcare Integrity and Protection Data Bank; 
Transition Process.--Effective upon the enactment of this subsection, 
the Secretary shall implement a process to eliminate duplication 
between the Healthcare Integrity and Protection Data Bank (in this 
subsection referred to as the `HIPDB' established pursuant to 
subsection (a) and the National Practitioner Data Bank (in this 
subsection referred to as the `NPDB') as implemented under the Health 
Care Quality Improvement Act of 1986 and section 1921 of this Act, 
including systems testing necessary to ensure that information formerly 
collected in the HIPDB will be accessible through the NPDB, and other 
activities necessary to eliminate duplication between the two data 
banks. Upon the completion of such process, notwithstanding any other 
provision of law, the Secretary shall cease the operation of the HIPDB 
and shall collect information required to be reported under the 
preceding provisions of this section in the NPDB. Except as otherwise 
provided in this subsection, the provisions of subsections (a) through 
(g) shall continue to apply with respect to the reporting of (or 
failure to report), access to, and other treatment of the information 
specified in this section.''.
    (b) Elimination of the Responsibility of the HHS Office of the 
Inspector General.--Section 1128C(a)(1) of the Social Security Act (42 
U.S.C. 1320a-7c(a)(1)) is amended--
            (1) in subparagraph (C), by adding at the end ``and'';
            (2) in subparagraph (D), by striking at the end ``, and'' 
        and inserting a period; and
            (3) by striking subparagraph (E).
    (c) Special Provision for Access to the National Practitioner Data 
Bank by the Department of Veterans Affairs.--
            (1) In general.--Notwithstanding any other provision of 
        law, during the one year period that begins on the effective 
        date specified in subsection (e)(1), the information described 
        in paragraph (2) shall be available from the National 
        Practitioner Data Bank (described in section 1921 of the Social 
        Security Act) to the Secretary of Veterans Affairs without 
        charge.
            (2) Information described.--For purposes of paragraph (1), 
        the information described in this paragraph is the information 
        that would, but for the amendments made by this section, have 
        been available to the Secretary of Veterans Affairs from the 
        Healthcare Integrity and Protection Data Bank.
    (d) Funding.--Notwithstanding any provisions of this Act, sections 
1128E(d)(2) and 1817(k)(3) of the Social Security Act, or any other 
provision of law, there shall be available for carrying out the 
transition process under section 1128E(h) of the Social Security Act 
over the period required to complete such process, and for operation of 
the National Practitioner Data Bank until such process is completed, 
without fiscal year limitation--
            (1) any fees collected pursuant to section 1128E(d)(2) of 
        such Act; and
            (2) such additional amounts as necessary, from 
        appropriations available to the Secretary and to the Office of 
        the Inspector General of the Department of Health and Human 
        Services under clauses (i) and (ii), respectively, of section 
        1817(k)(3)(A) of such Act, for costs of such activities during 
        the first 12 months following the date of the enactment of this 
        Act.
    (e) Effective Date.--The amendments made--
            (1) by subsection (a)(2) shall take effect on the first day 
        after the Secretary of Health and Human Services certifies that 
        the process implemented pursuant to section 1128E(h) of the 
        Social Security Act (as added by subsection (a)(3)) is 
        complete; and
            (2) by subsection (b) shall take effect on the earlier of 
        the date specified in paragraph (1) or the first day of the 
        second succeeding fiscal year after the fiscal year during 
        which this Act is enacted.

SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECURITY STANDARDS.

    The provisions of sections 262(a) and 264 of the Health Insurance 
Portability and Accountability Act of 1996 (and standards promulgated 
pursuant to such sections) and the Privacy Act of 1974 shall apply with 
respect to the provisions of this subtitle and amendments made by this 
subtitle.

                       TITLE O--MEDICAID AND CHIP

                 Subtitle A--Medicaid and Health Reform

SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME BELOW 133\1/3\ 
              PERCENT OF THE FEDERAL POVERTY LEVEL.

    (a) Eligibility for Non-traditional Individuals With Income Below 
133 Percent of the Federal Poverty Level.--
            (1) In general.--Section 1902(a)(10)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396b(a)(10)(A)(i) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by adding ``or'' at the end of subclause (VII); 
                and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VIII) who are under 65 years of 
                                age, who are not described in a 
                                previous subclause of this clause, and 
                                who are in families whose income 
                                (determined using methodologies and 
                                procedures specified by the Secretary 
                                in consultation with the Health Choices 
                                Commissioner) does not exceed 133\1/3\ 
                                percent of the income official poverty 
                                line (as defined by the Office of 
                                Management and Budget, and revised 
                                annually in accordance with section 
                                673(2) of the Omnibus Budget 
                                Reconciliation Act of 1981) applicable 
                                to a family of the size involved;''.
            (2) 100% fmap for non-traditional medicaid eligible 
        individuals.--Section 1905 of such Act (42 U.S.C. 1396d) is 
        amended--
                    (A) in the third sentence of subsection (b) by 
                inserting before the period at the end the following: 
                ``and with respect to amounts described in subsection 
                (y)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(y) Additional Expenditures Subject to 100% FMAP.--For purposes 
of section 1905(b), the amounts described in this subsection are the 
following:
            ``(1) Amounts expended for medical assistance for 
        individuals described in subclause (VIII) of section 
        1902(a)(10)(A)(i).''.
            (3) Construction.--Nothing in this subsection shall be 
        construed as not providing for coverage under subclause (VIII) 
        of section 1902(a)(10)(A)(i) of the Social Security Act, as 
        added by paragraph (1) of, and an increased FMAP under the 
        amendment made by paragraph (2) for, an individual who has been 
        provided medical assistance under title XIX of the Act under a 
        demonstration waiver approved under section 1115 of such Act or 
        with State funds.
            (4) Conforming amendment.--Section 1903(f)(4) of the Social 
        Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting 
        ``1902(a)(10)(A)(i)(VIII),'' after ``1902(a)(10)(A)(i)(VII),''.
    (b) Eligibility for Traditional Medicaid Eligible Individuals With 
Income Not Exceeding 133\1/3\ Percent of the Federal Poverty Level.--
            (1) In general.--Section 1902(a)(10)(A)(i) of the Social 
        Security Act (42 U.S.C. 1396b(a)(10)(A)(i)), as amended by 
        subsection (a), is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VII);
                    (B) by adding ``or'' at the end of subclause 
                (VIII); and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(IX) who are under 65 years of 
                                age, who would be eligible for medical 
                                assistance under the State plan under 
                                one of subclauses (I) through (VII) 
                                (based on the income standards, 
                                methodologies, and procedures in effect 
                                as of June 16, 2009) but for income and 
                                who are in families whose income does 
                                not exceed 133\1/3\ percent of the 
                                income official poverty line (as 
                                defined by the Office of Management and 
                                Budget, and revised annually in 
                                accordance with section 673(2) of the 
                                Omnibus Budget Reconciliation Act of 
                                1981) applicable to a family of the 
                                size involved;''.
            (2) 100% fmap for certain traditional medicaid eligible 
        individuals.--Section 1905(y) of such Act (42 U.S.C. 1396d(b)), 
        as added by subsection (a)(2)(B), is amended by inserting ``or 
        (IX)'' after ``(VIII)''.
            (3) Construction.--Nothing in this subsection shall be 
        construed as not providing for coverage under subclause (IX) of 
        section 1902(a)(10)(A)(i) of the Social Security Act, as added 
        by paragraph (1) of, and an increased FMAP under the amendment 
        made by paragraph (2) for, an individual who has been provided 
        medical assistance under title XIX of the Act under a 
        demonstration waiver approved under section 1115 of such Act or 
        with State funds.
            (4) Conforming amendment.--Section 1903(f)(4) of the Social 
        Security Act (42 U.S.C. 1396b(f)(4)), as amended by subsection 
        (a)(4), is amended by inserting ``1902(a)(10)(A)(i)(IX),'' 
        after ``1902(a)(10)(A)(i)(VIII),''.
    (c) 100% Matching Rate for Temporary Coverage of Certain 
Newborns.--Section 1905(y) of such Act, as added by subsection 
(a)(2)(B), is amended--
            (1) in paragraph (1), by inserting before the period at the 
        end the following: ``, and who is not provided medical 
        assistance under section 1943(b)(2) of this title or section 
        205(d)(1)(B) of the America's Affordable Health Choices Act of 
        2009''; and
            (2) by adding at the end the following:
            ``(2) Amounts expended for medical assistance for children 
        described in section 203(d)(1)(A) of the America's Affordable 
        Health Choices Act of 2009 during the time period specified in 
        such section.''.
    (d) Network Adequacy.--Section 1932(a)(2) of the Social Security 
Act (42 U.S.C. 1396u-2(a)(2)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Enrollment of non-traditional medicaid 
                eligibles.--A State may not require under paragraph (1) 
                the enrollment in a managed care entity of an 
                individual described in section 1902(a)(10)(A)(i)(VIII) 
                unless the State demonstrates, to the satisfaction of 
                the Secretary, that the entity, through its provider 
                network and other arrangements, has the capacity to 
                meet the health, mental health, and substance abuse 
                needs of such individuals.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the first day of Y1, and shall apply with respect to items 
and services furnished on or after such date.

SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CERTAIN MEDICAID ELIGIBLE 
              INDIVIDUALS.

    (a) In General.--Title XIX of the Social Security Act is amended by 
adding at the end the following new section:

    ``requirements and special rules for certain medicaid eligible 
                              individuals

    ``Sec. 1943.  (a) Coordination With NHI Exchange Through Memorandum 
of Understanding.--
            ``(1) In general.--The State shall enter into a Medicaid 
        memorandum of understanding described in section 204(e)(4) of 
        the America's Affordable Health Choices Act of 2009 with the 
        Health Choices Commissioner, acting in consultation with the 
        Secretary, with respect to coordinating the implementation of 
        the provisions of subdivision A of such Act with the State plan 
        under this title in order to ensure the enrollment of Medicaid 
        eligible individuals in acceptable coverage. Nothing in this 
        section shall be construed as permitting such memorandum to 
        modify or vitiate any requirement of a State plan under this 
        title.
            ``(2) Enrollment of exchange-referred individuals.--
                    ``(A) Non-traditional individuals.--Pursuant to 
                such memorandum the State shall accept without further 
                determination the enrollment under this title of an 
                individual determined by the Commissioner to be a non-
                traditional Medicaid eligible individual. The State 
                shall not do any redeterminations of eligibility for 
                such individuals unless the periodicity of such 
                redeterminations is consistent with the periodicity for 
                redeterminations by the Commissioner of eligibility for 
                affordability credits under subtitle C of title II of 
                subdivision A of the America's Affordable Health 
                Choices Act of 2009, as specified under such 
                memorandum.
                    ``(B) Traditional individuals.--
                            ``(i) Regular enrollment option.--Pursuant 
                        to such memorandum, insofar as the memorandum 
                        has selected the option described in section 
                        205(e)(3)(A) of the America's Affordable Health 
                        Choices Act of 2009, the State shall accept 
                        without further determination the enrollment 
                        under this title of an individual determined by 
                        the Commissioner to be a traditional Medicaid 
                        eligible individual. The State may do 
                        redeterminations of eligibility of such 
                        individual consistent with such section and the 
                        memorandum.
                            ``(ii) Presumptive eligibility option.--
                        Pursuant to such memorandum, insofar as the 
                        memorandum has selected the option described in 
                        section 205(e)(3)(B) of the America's 
                        Affordable Health Choices Act of 2009, the 
                        State shall provide for making medical 
                        assistance available during the presumptive 
                        eligibility period and shall, upon application 
                        of the individual for medical assistance under 
                        this title, promptly make a determination (and 
                        subsequent redeterminations) of eligibility in 
                        the same manner as if the individual had 
                        applied directly to the State for such 
                        assistance except that the State shall use the 
                        income-related information used by the 
                        Commissioner and provided to the State under 
                        the memorandum in making the presumptive 
                        eligibility determination to the maximum extent 
                        feasible.
            ``(3) Determinations of eligibility for affordability 
        credits.--If the Commissioner determines that a State Medicaid 
        agency has the capacity to make determinations of eligibility 
        for affordability credits under subtitle C of title II of 
        subdivision A of the America's Affordable Health Choices Act of 
        2009, under such memorandum--
                    ``(A) the State Medicaid agency shall conduct such 
                determinations for any Exchange-eligible individual who 
                requests such a determination;
                    ``(B) in the case that a State Medicaid agency 
                determines that an Exchange-eligible individual is not 
                eligible for affordability credits, the agency shall 
                forward the information on the basis of which such 
                determination was made to the Commissioner; and
                    ``(C) the Commissioner shall reimburse the State 
                Medicaid agency for the costs of conducting such 
                determinations. 
    ``(b) Treatment of Certain Newborns.--
            ``(1) In general.--In the case of a child who is deemed 
        under section 205(d)(1) of the America's Affordable Health 
        Choices Act of 2009 to be a non-traditional Medicaid eligible 
        individual and enrolled under this title pursuant to such 
        section, the State shall provide for a determination, by not 
        later than the end of the period referred to in subparagraph 
        (A) of such section, of the child's eligibility for medical 
        assistance under this title.
            ``(2) Extended treatment as traditional medicaid eligible 
        individual.--In accordance with subparagraph (B) of section 
        205(d)(1) of the America's Affordable Health Choices Act of 
        2009, in the case of a child described in subparagraph (A) of 
        such section who at the end of the period referred to in such 
        subparagraph is not otherwise covered under acceptable 
        coverage, the child shall be deemed (until such time as the 
        child obtains such coverage or the State otherwise makes a 
        determination of the child's eligibility for medical assistance 
        under its plan under this title pursuant to paragraph (1)) to 
        be a traditional Medicaid eligible individual described in 
        section 1902(l)(1)(B).
    ``(c) Definitions .--In this section:
            ``(1) Medicaid eligible individuals.--In this section, the 
        terms `Medicaid eligible individual', `traditional Medicaid 
        eligible individual', and `non-traditional Medicaid eligible 
        individual' have the meanings given such terms in section 
        205(e)(5) of the America's Affordable Health Choices Act of 
        2009.
            ``(2) Memorandum.--The term `memorandum' means a Medicaid 
        memorandum of understanding under section 205(e)(4) of the 
        America's Affordable Health Choices Act of 2009.
            ``(3) Y1.--The term `Y1' has the meaning given such term in 
        section 100(c) of the America's Affordable Health Choices Act 
        of 2009.''.
    (b) Conforming Amendments to Error Rate.--
            (1) Section 1903(u)(1)(D) of the Social Security Act (42 
        U.S.C. 1396b(u)(1)(D)) is amended by adding at the end the 
        following new clause:
    ``(vi) In determining the amount of erroneous excess payments, 
there shall not be included any erroneous payments made that are 
attributable to an error in an eligibility determination under subtitle 
C of title II of subdivision A of the America's Affordable Health 
Choices Act of 2009.''.
            (2) Section 2105(c)(11) of such Act (42 U.S.C. 
        1397ee(c)(11)) is amended by adding at the end the following 
        new sentence: ``Clause (vi) of section 1903(u)(1)(D) shall 
        apply with respect to the application of such requirements 
        under this title and title XIX.''.

SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.

    (a) CHIP Maintenance of Effort.--Section 1902 of the Social 
Security Act (42 U.S.C. 1396a) is amended--
            (1) in subsection (a), as amended by section 
        1631(b)(1)(D)--
                    (A) by striking ``and'' at the end of paragraph 
                (72);
                    (B) by striking the period at the end of paragraph 
                (73) and inserting ``; and''; and
                    (C) by inserting after paragraph (74) the following 
                new paragraph:
            ``(75) provide for maintenance of effort under the State 
        child health plan under title XXI in accordance with subsection 
        (gg).''; and
            (2) by adding at the end the following new subsection:
    ``(gg) CHIP Maintenance of Effort Requirement.--
            ``(1) In general.--Subject to paragraph (2), as a condition 
        of its State plan under this title under subsection (a)(75) and 
        receipt of any Federal financial assistance under section 
        1903(a) for calendar quarters beginning after the date of the 
        enactment of this subsection and before CHIP MOE termination 
        date specified in paragraph (3), a State shall not have in 
        effect eligibility standards, methodologies, or procedures 
        under its State child health plan under title XXI (including 
        any waiver under such title or under section 1115 that is 
        permitted to continue effect) that are more restrictive than 
        the eligibility standards, methodologies, or procedures, 
        respectively, under such plan (or waiver) as in effect on June 
        16, 2009.
            ``(2) Limitation.--Paragraph (1) shall not be construed as 
        preventing a State from imposing a limitation described in 
        section 2110(b)(5)(C)(i)(II) for a fiscal year in order to 
        limit expenditures under its State child health plan under 
        title XXI to those for which Federal financial participation is 
        available under section 2105 for the fiscal year.
            ``(3) CHIP moe termination date.--In paragraph (1), the 
        `CHIP MOE termination date' for a State is the date that is the 
        first day of Y1 (as defined in section 100(c) of the America's 
        Affordable Health Choices Act of 2009) or, if later, the first 
        day after such date that both of the following determinations 
        have been made:
                    ``(A) The Health Choices Commissioner has 
                determined that the Health Insurance Exchange has the 
                capacity to support the participation of CHIP enrollees 
                who are Exchange-eligible individuals (as defined in 
                section 202(b) of the America's Affordable Health 
                Choices Act of 2009),
                    ``(B) The Secretary has determined that such 
                Exchange, the State, and employers have procedures in 
                effect to ensure the timely transition without 
                interruption of coverage of CHIP enrollees from 
                assistance under title XXI to acceptable coverage (as 
                defined for purposes of such Act).
        In this paragraph, the term `CHIP enrollee' means a targeted 
        low-income child or (if the State has elected the option under 
        section 2112, a targeted low-income pregnant woman) who is or 
        otherwise would be (but for acceptable coverage) eligible for 
        child health assistance or pregnancy-related assistance, 
        respectively, under the State child health plan referred to in 
        paragraph (1).''.
    (b) Medicaid Maintenance of Effort; Simplifying and Coordinating 
Eligibility Rules Between Exchange and Medicaid.--
            (1) In general.--Section 1903 of such Act (42 U.S.C. 1396b) 
        is amended by adding at the end the following new subsection:
    ``(aa) Maintenance of Medicaid Effort; Simplifying and Coordinating 
Eligibility Rules Between Health Insurance Exchange and Medicaid.--
            ``(1) Maintenance of effort.--A State is not eligible for 
        payment under subsection (a) for a calendar quarter beginning 
        after the date of the enactment of this subsection if 
        eligibility standards, methodologies, or procedures under its 
        plan under this title (including any waiver under this title or 
        under section 1115 that is permitted to continue effect) that 
        are more restrictive than the eligibility standards, 
        methodologies, or procedures, respectively, under such plan (or 
        waiver) as in effect on June 16, 2009. The Secretary shall 
        extend such a waiver (including the availability of Federal 
        financial participation under such waiver) for such period as 
        may be required for a State to meet the requirement of the 
        previous sentence.
            ``(2) Removal of asset test for certain eligibility 
        categories.--
                    ``(A) In general.--A State is not eligible for 
                payment under subsection (a) for a calendar quarter 
                beginning on or after the first day of Y1 (as defined 
                in section 100(c) of the America's Affordable Health 
                Choices Act of 2009), if the State applies any asset or 
                resource test in determining (or redetermining) 
                eligibility of any individual on or after such first 
                day under any of the following:
                            ``(i) Subclause (I), (III), (IV), or (VI) 
                        of section 1902(a)(10)(A)(i).
                            ``(ii) Subclause (II), (IX), (XIV) or 
                        (XVII) of section 1902(a)(10)(A)(ii).
                            ``(iii) Section 1931(b).
                    ``(B) Overriding contrary provisions; references.--
                The provisions of this title that prevent the waiver of 
                an asset or resource test described in subparagraph (A) 
                are hereby waived.
                    ``(C) References.--Any reference to a provision 
                described in a provision in subparagraph (A) shall be 
                deemed to be a reference to such provision as modified 
                through the application of subparagraphs (A) and 
                (B).''.
            (2) Conforming amendments.--(A) Section 1902(a)(10)(A) of 
        such Act (42 U.S.C. 1396a(a)(10)(A)) is amended, in the matter 
        before clause (i), by inserting ``subject to section 
        1903(aa)(2),'' after ``(A)''.
            (B) Section 1931(b)(2) of such Act (42 U.S.C. 1396u-
        1(b)(1)) is amended by inserting ``subject to section 
        1903(aa)(2)'' after ``and (3)''.
    (c) Standards for Benchmark Packages.--Section 1937(b) of such Act 
(42 U.S.C. 1396u-7(b)) is amended--
            (1) in paragraph (1), by inserting ``subject to paragraph 
        (5)''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Minimum standards.--Effective January 1, 2013, any 
        benchmark benefit package (or benchmark equivalent coverage 
        under paragraph (2)) must meet the minimum benefits and cost-
        sharing standards of a basic plan offered through the Health 
        Insurance Exchange.''.

SEC. 1704. REDUCTION IN MEDICAID DSH.

    (a) Report.--
            (1) In general.--Not later than January 1, 2016, the 
        Secretary of Health and Human Services (in this title referred 
        to as the ``Secretary'') shall submit to Congress a report 
        concerning the extent to which, based upon the impact of the 
        health care reforms carried out under subdivision A in reducing 
        the number of uninsured individuals, there is a continued role 
        for Medicaid DSH. In preparing the report, the Secretary shall 
        consult with community-based health care networks serving low-
        income beneficiaries.
            (2) Matters to be included.--The report shall include the 
        following:
                    (A) Recommendations.--Recommendations regarding--
                            (i) the appropriate targeting of Medicaid 
                        DSH within States; and
                            (ii) the distribution of Medicaid DSH among 
                        the States.
                    (B) Specification of dsh health reform 
                methodology.--The DSH Health Reform methodology 
                described in paragraph (2) of subsection (b) for 
                purposes of implementing the requirements of such 
                subsection.
            (3) Coordination with medicare dsh report.--The Secretary 
        shall coordinate the report under this subsection with the 
        report on Medicare DSH under section 1112.
            (4) Medicaid dsh.--In this section, the term ``Medicaid 
        DSH'' means adjustments in payments under section 1923 of the 
        Social Security Act for inpatient hospital services furnished 
        by disproportionate share hospitals.
    (b) Medicaid DSH Reductions.--
            (1) In general.--The Secretary shall reduce Medicaid DSH so 
        as to reduce total Federal payments to all States for such 
        purpose by $1,500,000,000 in fiscal year 2017, $2,500,000,000 
        in fiscal year 2018, and $6,000,000,000 in fiscal year 2019.
            (2) DSH health reform methodology.--The Secretary shall 
        carry out paragraph (1) through use of a DSH Health Reform 
        methodology issued by the Secretary that imposes the largest 
        percentage reductions on the States that--
                    (A) have the lowest percentages of uninsured 
                individuals (determined on the basis of audited 
                hospital cost reports) during the most recent year for 
                which such data are available; or
                    (B) do not target their DSH payments on--
                            (i) hospitals with high volumes of Medicaid 
                        inpatients (as defined in section 1923(b)(1)(A) 
                        of the Social Security Act (42 U.S.C. 1396r-
                        4(b)(1)(A)); and
                            (ii) hospitals that have high levels of 
                        uncompensated care (excluding bad debt).
            (3) DSH allotment publications.--
                    (A) In general.--Not later than the publication 
                deadline specified in subparagraph (B), the Secretary 
                shall publish in the Federal Register a notice 
                specifying the DSH allotment to each State under 
                1923(f) of the Social Security Act for the respective 
                fiscal year specified in such subparagraph, consistent 
                with the application of the DSH Health Reform 
                methodology described in paragraph (2).
                    (B) Publication deadline.--The publication deadline 
                specified in this subparagraph is--
                            (i) January 1, 2016, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2017;
                            (ii) January 1, 2017, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2018; and
                            (iii) January 1, 2018, with respect to DSH 
                        allotments described in subparagraph (A) for 
                        fiscal year 2019.
    (c) Conforming Amendments.--
            (1) Section 1923(f) of the Social Security Act (42 U.S.C. 
        1396r-4(f)) is amended--
                    (A) by redesignating paragraph (7) as paragraph 
                (8); and
                    (B) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) Special rule for fiscal years 2017, 2018, and 2019.--
                    ``(A) Fiscal year 2017.--Notwithstanding paragraph 
                (2), the total DSH allotments for all States for--
                            ``(i) fiscal year 2017, shall be the total 
                        DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $1,500,000,000;
                            ``(ii) fiscal year 2018, shall be the total 
                        DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $2,500,000,000; and
                            ``(iii) fiscal year 2019, shall be the 
                        total DSH allotments that would otherwise be 
                        determined under this subsection for such 
                        fiscal year decreased by $6,000,000,000.''.
            (2) Section 1923(b)(4) of such Act (42 U.S.C. 1396r-
        4(b)(4)) is amended by adding before the period the following: 
        ``or to affect the authority of the Secretary to issue and 
        implement the DSH Health Reform methodology under section 
        1704(b)(2) of the America's Health Choices Act of 2009''.
    (d) Disproportionate Share Hospitals (DSH) and Essential Access 
Hospital (EAH) Non-Discrimination.--
            (1) In general.--Section 1923(d) of the Social Security Act 
        (42 U.S.C. 1396r-4) is amended by adding at the end the 
        following new paragraph:
            ``(4) No hospital may be defined or deemed as a 
        disproportionate share hospital, or as an essential access 
        hospital (for purposes of subsection (f)(6)(A)(iv), under a 
        State plan under this title or subsection (b) of this section 
        (including any waiver under section 1115) unless the hospital--
                    ``(A) provides services to beneficiaries under this 
                title without discrimination on the ground of race, 
                color, national origin, creed, source of payment, 
                status as a beneficiary under this title, or any other 
                ground unrelated to such beneficiary's need for the 
                services or the availability of the needed services in 
                the hospital; and
                    ``(B) makes arrangements for, and accepts, 
                reimbursement under this title for services provided to 
                eligible beneficiaries under this title.''.
            (2) Effective date.--The amendment made by subsection (a) 
        shall be apply to expenditures made on or after July 1, 2010.

SEC. 1705. EXPANDED OUTSTATIONING.

    (a) In General.--Section 1902(a)(55) of the Social Security Act (42 
U.S.C. 1396a(a)(55)) is amended by striking ``under subsection 
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 
(a)(10)(A)(ii)(IX)'' and inserting ``(including receipt and processing 
of applications of individuals for affordability credits under subtitle 
C of title II of subdivision A of the America's Affordable Health 
Choices Act of 2009 pursuant to a Medicaid memorandum of understanding 
under section 1943(a)(1))''.
    (b) Effective Date.--
            (1) Except as provided in paragraph (2), the amendment made 
        by subsection (a) shall apply to services furnished on or after 
        July 1, 2010, without regard to whether or not final 
        regulations to carry out such amendment have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirement imposed 
        by the amendment made by this section, the State plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

                         Subtitle B--Prevention

SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERVICES.

    (a) Coverage.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by section 1701(a)(2)(B), is amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``and (D) preventive services described 
                in subsection (z)''; and
            (2) by adding at the end the following new subsection:
    ``(z) Preventive Services.--The preventive services described in 
this subsection are services not otherwise described in subsection (a) 
or (r) that the Secretary determines are--
            ``(1)(A) recommended with a grade of A or B by the Task 
        Force for Clinical Preventive Services; or
            ``(B) vaccines recommended for use as appropriate by the 
        Director of the Centers for Disease Control and Prevention; and
            ``(2) appropriate for individuals entitled to medical 
        assistance under this title.''.
    (b) Conforming Amendment.--Section 1928 of such Act (42 U.S.C. 
1396s) is amended--
            (1) in subsection (c)(2)(B)(i), by striking ``the advisory 
        committee referred to in subsection (e)'' and inserting ``the 
        Director of the Centers for Disease Control and Prevention'';
            (2) in subsection (e), by striking ``Advisory Committee'' 
        and all that follows and inserting ``Director of the Centers 
        for Disease Control and Prevention.''; and
            (3) by striking subsection (g).
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after July 1, 2010, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirements imposed 
        by the amendments made by this section, the State plan shall 
        not be regarded as failing to comply with the requirements of 
        such title solely on the basis of its failure to meet these 
        additional requirements before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1712. TOBACCO CESSATION.

    (a) Dropping Tobacco Cessation Exclusion From Covered Outpatient 
Drugs.--Section 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-
8(d)(2)) is amended--
            (1) by striking subparagraph (E);
            (2) in subparagraph (G), by inserting before the period at 
        the end the following: ``, except agents approved by the Food 
        and Drug Administration for purposes of promoting, and when 
        used to promote, tobacco cessation''; and
            (3) by redesignating subparagraphs (F) through (K) as 
        subparagraphs (E) through (J), respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to drugs and services furnished on or after January 1, 2010.

SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITATION SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by sections 1701(a)(2) and 1711(a), is amended--
            (1) in subsection (a)--
                    (A) in paragraph (27), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (28) as paragraph 
                (29); and
                    (C) by inserting after paragraph (27) the following 
                new paragraph:
            ``(28) nurse home visitation services (as defined in 
        subsection (aa)); and''; and
            (2) by adding at the end the following new subsection:
    ``(aa) The term `nurse home visitation services' means home visits 
by trained nurses to families with a first-time pregnant woman, or a 
child (under 2 years of age), who is eligible for medical assistance 
under this title, but only, to the extent determined by the Secretary 
based upon evidence, that such services are effective in one or more of 
the following:
            ``(1) Improving maternal or child health and pregnancy 
        outcomes or increasing birth intervals between pregnancies.
            ``(2) Reducing the incidence of child abuse, neglect, and 
        injury, improving family stability (including reduction in the 
        incidence of intimate partner violence), or reducing maternal 
        and child involvement in the criminal justice system.
            ``(3) Increasing economic self-sufficiency, employment 
        advancement, school-readiness, and educational achievement, or 
        reducing dependence on public assistance.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.
    (c) Construction.--Nothing in the amendments made by this section 
shall be construed as affecting the ability of a State under title XIX 
or XXI of the Social Security Act to provide nurse home visitation 
services as part of another class of items and services falling within 
the definition of medical assistance or child health assistance under 
the respective title, or as an administrative expenditure for which 
payment is made under section 1903(a) or 2105(a) of such Act, 
respectively, on or after the date of the enactment of this Act.

SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (a) Coverage as Optional Categorically Needy Group.--
            (1) In general.--Section 1902(a)(10)(A)(ii) of the Social 
        Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
                    (A) in subclause (XVIII), by striking ``or'' at the 
                end;
                    (B) in subclause (XIX), by adding ``or'' at the 
                end; and
                    (C) by adding at the end the following new 
                subclause:
            ``(XX) who are described in subsection (hh) (relating to 
        individuals who meet certain income standards);''.
            (2) Group described.--Section 1902 of such Act (42 U.S.C. 
        1396a), as amended by section 1703, is amended by adding at the 
        end the following new subsection:
    ``(hh)(1) Individuals described in this subsection are 
individuals--
                    ``(A) whose income does not exceed an income 
                eligibility level established by the State that does 
                not exceed the highest income eligibility level 
                established under the State plan under this title (or 
                under its State child health plan under title XXI) for 
                pregnant women; and
                    ``(B) who are not pregnant.
            ``(2) At the option of a State, individuals described in 
        this subsection may include individuals who, had individuals 
        applied on or before January 1, 2007, would have been made 
        eligible pursuant to the standards and processes imposed by 
        that State for benefits described in clause (XV) of the matter 
        following subparagraph (G) of section subsection (a)(10) 
        pursuant to a waiver granted under section 1115.
            ``(3) At the option of a State, for purposes of subsection 
        (a)(17)(B), in determining eligibility for services under this 
        subsection, the State may consider only the income of the 
        applicant or recipient.''.
            (3) Limitation on benefits.--Section 1902(a)(10) of such 
        Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following 
        subparagraph (G)--
                    (A) by striking ``and (XIV)'' and inserting 
                ``(XIV)''; and
                    (B) by inserting ``, and (XV) the medical 
                assistance made available to an individual described in 
                subsection (hh) shall be limited to family planning 
                services and supplies described in section 
                1905(a)(4)(C) including medical diagnosis and treatment 
                services that are provided pursuant to a family 
                planning service in a family planning setting'' after 
                ``cervical cancer''.
            (4) Conforming amendments.--Section 1905(a) of such Act (42 
        U.S.C. 1396d(a)), as amended by section 1731(c), is amended in 
        the matter preceding paragraph (1)--
                    (A) in clause (xiii), by striking ``or'' at the 
                end;
                    (B) in clause (xiv), by adding ``or'' at the end; 
                and
                    (C) by inserting after clause (xiv) the following:
                            ``(xv) individuals described in section 
                        1902(hh),''.
    (b) Presumptive Eligibility.--
            (1) In general.--Title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) is amended by inserting after section 
        1920B the following:

         ``presumptive eligibility for family planning services

    ``Sec. 1920C.  (a) State Option.--State plan approved under section 
1902 may provide for making medical assistance available to an 
individual described in section 1902(hh) (relating to individuals who 
meet certain income eligibility standard) during a presumptive 
eligibility period. In the case of an individual described in section 
1902(hh), such medical assistance shall be limited to family planning 
services and supplies described in 1905(a)(4)(C) and, at the State's 
option, medical diagnosis and treatment services that are provided in 
conjunction with a family planning service in a family planning 
setting.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Presumptive eligibility period.--The term 
        `presumptive eligibility period' means, with respect to an 
        individual described in subsection (a), the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(hh); and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                            ``(ii) in the case of such an individual 
                        who does not file an application by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(2) Qualified entity.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                            ``(i) is eligible for payments under a 
                        State plan approved under this title; and
                            ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                    ``(B) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities in order to prevent fraud and abuse.
    ``(c) Administration.--
            ``(1) In general.--The State agency shall provide qualified 
        entities with--
                    ``(A) such forms as are necessary for an 
                application to be made by an individual described in 
                subsection (a) for medical assistance under the State 
                plan; and
                    ``(B) information on how to assist such individuals 
                in completing and filing such forms.
            ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection (a) is presumptively eligible for 
        medical assistance under a State plan shall--
                    ``(A) notify the State agency of the determination 
                within 5 working days after the date on which 
                determination is made; and
                    ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance is required to be made by not later than the 
                last day of the month following the month during which 
                the determination is made.
            ``(3) Application for medical assistance.--In the case of 
        an individual described in subsection (a) who is determined by 
        a qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance by not later than the last day of the month 
        following the month during which the determination is made.
    ``(d) Payment.--Notwithstanding any other provision of law, medical 
assistance that--
            ``(1) is furnished to an individual described in subsection 
        (a)--
                    ``(A) during a presumptive eligibility period;
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)) is amended by inserting before 
                the semicolon at the end the following: ``and provide 
                for making medical assistance available to individuals 
                described in subsection (a) of section 1920C during a 
                presumptive eligibility period in accordance with such 
                section''.
                    (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 
                1396b(u)(1)(D)(v)) is amended--
                            (i) by striking ``or for'' and inserting 
                        ``for''; and
                            (ii) by inserting before the period the 
                        following: ``, or for medical assistance 
                        provided to an individual described in 
                        subsection (a) of section 1920C during a 
                        presumptive eligibility period under such 
                        section''.
    (c) Clarification of Coverage of Family Planning Services and 
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)) is amended by adding at the end the following:
            ``(5) Coverage of family planning services and supplies.--
        Notwithstanding the previous provisions of this section, a 
        State may not provide for medical assistance through enrollment 
        of an individual with benchmark coverage or benchmark-
        equivalent coverage under this section unless such coverage 
        includes for any individual described in section 1905(a)(4)(C), 
        medical assistance for family planning services and supplies in 
        accordance with such section.''.
    (d) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and shall apply to 
items and services furnished on or after such date.

                           Subtitle C--Access

SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS.

    (a) In General.--
            (1) Fee-for-service payments.--Section 1902(a)(13) of the 
        Social Security Act (42 U.S.C. 1396b(a)(13)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A);
                    (B) by adding ``and'' at the end of subparagraph 
                (B); and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) payment for primary care services (as defined 
                in section 1848(j)(5)(A), but applied without regard to 
                clause (ii) thereof) furnished by physicians (or for 
                services furnished by other health care professionals 
                that would be primary care services under such section 
                if furnished by a physician) at a rate not less than 80 
                percent of the payment rate applicable to such services 
                and physicians or professionals (as the case may be) 
                under part B of title XVIII for services furnished in 
                2010, 90 percent of such rate for services and 
                physicians (or professionals) furnished in 2011, and 
                100 percent of such payment rate for services and 
                physicians (or professionals) furnished in 2012 or a 
                subsequent year;''.
            (2) Under medicaid managed care plans.--Section 1923(f) of 
        such Act (42 U.S.C. 1396u-2(f)) is amended--
                    (A) in the heading, by adding at the end the 
                following: ``; Adequacy of Payment for Primary Care 
                Services''; and
                    (B) by inserting before the period at the end the 
                following: ``and, in the case of primary care services 
                described in section 1902(a)(13)(C), consistent with 
                the minimum payment rates specified in such section 
                (regardless of the manner in which such payments are 
                made, including in the form of capitation or partial 
                capitation)''.
    (b) Increase in Payment Using 100% FMAP.--Section 1905(y), as added 
by section 1701(a)(2)(B) and as amended by section 1701(c)(2), is 
amended by adding at the end the following:
            ``(3)(A) The portion of the amounts expended for medical 
        assistance for services described in section 1902(a)(13)(C) 
        furnished on or after January 1, 2010, that is attributable to 
        the amount by which the minimum payment rate required under 
        such section (or, by application, section 1932(f)) exceeds the 
        payment rate applicable to such services under the State plan 
        as of June 16, 2009.
            ``(B) Subparagraphs (A) shall not be construed as 
        preventing the payment of Federal financial participation based 
        on the Federal medical assistance percentage for amounts in 
        excess of those specified under such subparagraphs.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2010.

SEC. 1722. MEDICAL HOME PILOT PROGRAM.

    (a) In General.--The Secretary of Health and Human Services shall 
establish under this section a medical home pilot program under which a 
State may apply to the Secretary for approval of a medical home pilot 
project described in subsection (b) (in this section referred to as a 
``pilot project'') for the application of the medical home concept 
under title XIX of the Social Security Act. The pilot program shall 
operate for a period of up to 5 years.
    (b) Pilot Project Described.--
            (1) In general.--A pilot project is a project that applies 
        one or more of the medical home models described in section 
        1866E(a)(3) of the Social Security Act (as inserted by section 
        1302(a)) or such other model as the Secretary may approve, to 
        high need beneficiaries (including medically fragile children 
        and high-risk pregnant women) who are eligible for medical 
        assistance under title XIX of the Social Security Act. The 
        Secretary shall provide for appropriate coordination of the 
        pilot program under this section with the medical home pilot 
        program under section 1866E of such Act.
            (2) Limitation.--A pilot project shall be for a duration of 
        not more than 5 years.
    (c) Additional Incentives.--In the case of a pilot project, the 
Secretary may--
            (1) waive the requirements of section 1902(a)(1) of the 
        Social Security Act (relating to statewideness) and section 
        1902(a)(10)(B) of such Act (relating to comparability); and
            (2) increase to up to 90 percent (for the first 2 years of 
        the pilot program) or 75 percent (for the next 3 years) the 
        matching percentage for administrative expenditures (such as 
        those for community care workers).
    (d) Medically Fragile Children.--In the case of a model involving 
medically fragile children, the model shall ensure that the patient-
centered medical home services received by each child, in addition to 
fulfilling the requirements under 1866E(b)(1) of the Social Security 
Act, provide for continuous involvement and education of the parent or 
caregiver and for assistance to the child in obtaining necessary 
transitional care if a child's enrollment ceases for any reason.
    (e) Evaluation; Report.--
            (1) Evaluation.--The Secretary, using the criteria 
        described in section 1866E(g)(1) of the Social Security Act (as 
        inserted by section 1123), shall conduct an evaluation of the 
        pilot program under this section.
            (2) Report.--Not later than 60 days after the date of 
        completion of the evaluation under paragraph (1), the Secretary 
        shall submit to Congress and make available to the public a 
        report on the findings of the evaluation under such paragraph.
    (f) Funding.--The additional Federal financial participation 
resulting from the implementation of the pilot program under this 
section may not exceed in the aggregate $1,235,000,000 over the 5-year 
period of the program.

SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.

    (a) In General.--Section 1903(a)(2)(E) of the Social Security Act 
(42 U.S.C. 1396b(a)(2)), as added by section 201(b)(2)(A) of the 
Children's Health Insurance Program Reauthorization Act of 2009 (Public 
Law 111-3), is amended by inserting ``and other individuals'' after 
``children of families''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payment for translation or interpretation services furnished 
on or after January 1, 2010.

SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by section 1713(a), is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraph (29) as paragraph 
                (30);
                    (B) in paragraph (28), by striking at the end 
                ``and''; and
                    (C) by inserting after paragraph (28) the following 
                new paragraph:
            ``(29) freestanding birth center services (as defined in 
        subsection (l)(3)(A)) and other ambulatory services that are 
        offered by a freestanding birth center (as defined in 
        subsection (l)(3)(B)) and that are otherwise included in the 
        plan; and''; and
            (2) in subsection (l), by adding at the end the following 
        new paragraph:
    ``(3)(A) The term `freestanding birth center services' means 
services furnished to an individual at a freestanding birth center (as 
defined in subparagraph (B)), including by a licensed birth attendant 
(as defined in subparagraph (C)) at such center.
    ``(B) The term `freestanding birth center' means a health 
facility--
            ``(i) that is not a hospital; and
            ``(ii) where childbirth is planned to occur away from the 
        pregnant woman's residence.
    ``(C) The term `licensed birth attendant' means an individual who 
is licensed or registered by the State involved to provide health care 
at childbirth and who provides such care within the scope of practice 
under which the individual is legally authorized to perform such care 
under State law (or the State regulatory mechanism provided by State 
law), regardless of whether the individual is under the supervision of, 
or associated with, a physician or other health care provider. Nothing 
in this subparagraph shall be construed as changing State law 
requirements applicable to a licensed birth attendant.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after the date of the 
enactment of this Act.

SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER THE VACCINES FOR 
              CHILDREN PROGRAM.

    Section 1928(b)(2)(A)(iii)(I) of the Social Security Act (42 U.S.C. 
1396s(b)(2)(A)(iii)(I)) is amended--
            (1) by striking ``or a rural health clinic'' and inserting 
        ``, a rural health clinic''; and
            (2) by inserting ``or a public health clinic,'' after 
        ```1905(l)(1)),''.

                          Subtitle D--Coverage

SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-INCOME HIV-INFECTED 
              INDIVIDUALS.

    (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396a), as amended by section 1714(a)(1), is amended--
            (1) in subsection (a)(10)(A)(ii)--
                    (A) by striking ``or'' at the end of subclause 
                (XIX);
                    (B) by adding ``or'' at the end of subclause (XX); 
                and
                    (C) by adding at the end the following:
            ``(XXI) who are described in subsection (ii) (relating to 
        HIV-infected individuals);''; and
            (2) by adding at the end, as amended by sections 1703 and 
        1714(a), the following:
    ``(ii) individuals described in this subsection are individuals not 
described in subsection (a)(10)(A)(i)--
            ``(1) who have HIV infection;
            ``(2) whose income (as determined under the State plan 
        under this title with respect to disabled individuals) does not 
        exceed the maximum amount of income a disabled individual 
        described in subsection (a)(10)(A)(i) may have and obtain 
        medical assistance under the plan; and
            ``(3) whose resources (as determined under the State plan 
        under this title with respect to disabled individuals) do not 
        exceed the maximum amount of resources a disabled individual 
        described in subsection (a)(10)(A)(i) may have and obtain 
        medical assistance under the plan.''.
    (b) Enhanced Match.--The first sentence of section 1905(b) of such 
Act (42 U.S.C. 1396d(b)) is amended by striking ``section 
1902(a)(10)(A)(ii)(XVIII)'' and inserting ``subclause (XVIII) or (XX) 
of section 1902(a)(10)(A)(ii)''.
    (c) Conforming Amendments.--Section 1905(a) of such Act (42 U.S.C. 
1396d(a)) is amended, in the matter preceding paragraph (1)--
            (1) by striking ``or'' at the end of clause (xii);
            (2) by adding ``or'' at the end of clause (xiii); and
            (3) by inserting after clause (xiii) the following:
                            ``(xiv) individuals described in section 
                        1902(ii),''.
    (d) Exemption From Funding Limitation for Territories.--Section 
1108(g) of the Social Security Act (42 U.S.C. 1308(g)) is amended by 
adding at the end the following:
            ``(5) Disregarding medical assistance for optional low-
        income hiv-infected individuals.--The limitations under 
        subsection (f) and the previous provisions of this subsection 
        shall not apply to amounts expended for medical assistance for 
        individuals described in section 1902(ii) who are only eligible 
        for such assistance on the basis of section 
        1902(a)(10)(A)(ii)(XX).''.
    (e) Effective Date; Sunset.--The amendments made by this section 
shall apply to expenditures for calendar quarters beginning on or after 
the date of the enactment of this Act, and before January 1, 2013, 
without regard to whether or not final regulations to carry out such 
amendments have been promulgated by such date.

SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSISTANCE (TMA).

    Sections 1902(e)(1)(B) and 1925(f) of the Social Security Act (42 
U.S.C. 1396a(e)(1)(B), 1396r-6(f)), as amended by section 5004(a)(1) of 
the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), 
are each amended by striking ``December 31, 2010'' and inserting 
``December 31, 2012''.

SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COVERAGE UNDER CERTAIN 
              CHIP PROGRAMS.

    (a) In General.--Section 2102(b) of the Social Security Act (42 
U.S.C. 1397bb(b)) is amended by adding at the end the following new 
paragraph:
            ``(6) Requirement for 12-month continuous eligibility.--In 
        the case of a State child health plan that provides child 
        health assistance under this title through a means other than 
        described in section 2101(a)(2), the plan shall provide for 
        implementation under this title of the 12-month continuous 
        eligibility option described in section 1902(e)(12) for 
        targeted low-income children whose family income is below 200 
        percent of the poverty line.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to determinations (and redeterminations) of eligibility made on 
or after January 1, 2010.

                         Subtitle E--Financing

SEC. 1741. PAYMENTS TO PHARMACISTS.

    (a) Pharmacy Reimbursement Limits.--
            (1) In general.--Section 1927(e) of the Social Security Act 
        (42 U.S.C. 1396r-8(e)) is amended--
                    (A) by striking paragraph (5) and inserting the 
                following:
            ``(5) Use of amp in upper payment limits.--The Secretary 
        shall calculate the Federal upper reimbursement limit 
        established under paragraph (4) as 130 percent of the weighted 
        average (determined on the basis of manufacturer utilization) 
        of monthly average manufacturer prices.''.
            (2) Definition of amp.--Section 1927(k)(1)(B) of such Act 
        (42 U.S.C. 1396r-8(k)(1)(B)) is amended--
                    (B) in the heading, by striking ``extended to 
                wholesalers'' and inserting ``and other payments''; and
                    (C) by striking ``regard to'' and all that follows 
                through the period and inserting the following: 
                ``regard to--
                            ``(i) customary prompt pay discounts 
                        extended to wholesalers;
                            ``(ii) bona fide service fees paid by 
                        manufacturers;
                            ``(iii) reimbursement by manufacturers for 
                        recalled, damaged, expired, or otherwise 
                        unsalable returned goods, including 
                        reimbursement for the cost of the goods and any 
                        reimbursement of costs associated with return 
                        goods handling and processing, reverse 
                        logistics, and drug destruction;
                            ``(iv) sales directly to, or rebates, 
                        discounts, or other price concessions provided 
                        to, pharmacy benefit managers, managed care 
                        organizations, health maintenance 
                        organizations, insurers, mail order pharmacies 
                        that are not open to all members of the public, 
                        or long term care providers, provided that 
                        these rebates, discounts, or price concessions 
                        are not passed through to retail pharmacies;
                            ``(v) sales directly to, or rebates, 
                        discounts, or other price concessions provided 
                        to, hospitals, clinics, and physicians, unless 
                        the drug is an inhalation, infusion, or 
                        injectable drug, or unless the Secretary 
                        determines, as allowed for in Agency 
                        administrative procedures, that it is necessary 
                        to include such sales, rebates, discounts, and 
                        price concessions in order to obtain an 
                        accurate AMP for the drug. Such a determination 
                        shall not be subject to judicial review; or
                            ``(vi) rebates, discounts, and other price 
                        concessions required to be provided under 
                        agreements under subsections (f) and (g) of 
                        section 1860D-2(f).''.
            (3) Manufacturer reporting requirements.--Section 
        1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
                    (A) in subparagraph (A), by adding at the end the 
                following new clause:
                            ``(iv) not later than 30 days after the 
                        last day of each month of a rebate period under 
                        the agreement, on the manufacturer's total 
                        number of units that are used to calculate the 
                        monthly average manufacturer price for each 
                        covered outpatient drug.''.
            (4) Authority to promulgate regulation.--The Secretary of 
        Health and Human Services may promulgate regulations to clarify 
        the requirements for upper payment limits and for the 
        determination of the average manufacturer price in an expedited 
        manner. Such regulations may become effective on an interim 
        final basis, pending opportunity for public comment.
            (5) Pharmacy reimbursements through december 31, 2010.--The 
        specific upper limit under section 447.332 of title 42, Code of 
        Federal Regulations (as in effect on December 31, 2006) 
        applicable to payments made by a State for multiple source 
        drugs under a State Medicaid plan shall continue to apply 
        through December 31, 2010, for purposes of the availability of 
        Federal financial participation for such payments.
    (b) Disclosure of Price Information to the Public.--Section 
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i), in the matter preceding 
                subclause (I), by inserting ``month of a'' after 
                ``each''; and
                    (B) in the last sentence, by striking ``and 
                shall,'' and all that follows through the period; and
            (2) in subparagraph (D)(v), by inserting ``weighted'' 
        before ``average manufacturer prices''.

SEC. 1742. PRESCRIPTION DRUG REBATES.

    (a) Additional Rebate for New Formulations of Existing Drugs.--
            (1) In general.--Section 1927(c)(2) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end 
        the following new subparagraph:
                    ``(C) Treatment of new formulations.--In the case 
                of a drug that is a line extension of a single source 
                drug or an innovator multiple source drug that is an 
                oral solid dosage form, the rebate obligation with 
                respect to such drug under this section shall be the 
                amount computed under this section for such new drug 
                or, if greater, the product of--
                            ``(i) the average manufacturer price of the 
                        line extension of a single source drug or an 
                        innovator multiple source drug that is an oral 
                        solid dosage form;
                            ``(ii) the highest additional rebate 
                        (calculated as a percentage of average 
                        manufacturer price) under this section for any 
                        strength of the original single source drug or 
                        innovator multiple source drug; and
                            ``(iii) the total number of units of each 
                        dosage form and strength of the line extension 
                        product paid for under the State plan in the 
                        rebate period (as reported by the State).
                In this subparagraph, the term `line extension' means, 
                with respect to a drug, an extended release formulation 
                of the drug.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to drugs dispensed after December 31, 2009.
    (b) Increase Minimum Rebate Percentage for Single Source Drugs.--
Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 1396r-
8(c)(1)(B)(i)) is amended--
            (1) in subclause (IV), by striking ``and'' at the end;
            (2) in subclause (V)--
                    (A) by inserting ``and before January 1, 2010'' 
                after ``December 31, 1995,''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new subclause:
                                    ``(VI) after December 31, 2009, is 
                                22.1 percent.''.

SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DISCOUNTS TO ENROLLEES OF 
              MEDICAID MANAGED CARE ORGANIZATIONS.

    (a) In General.--Section 1903(m)(2)(A) of the Social Security Act 
(42 U.S.C. 1396b(m)(2)(A)) is amended--
            (1) in clause (xi), by striking ``and'' at the end;
            (2) in clause (xii), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(xiii) such contract provides that the entity shall 
        report to the State such information, on such timely and 
        periodic basis as specified by the Secretary, as the State may 
        require in order to include, in the information submitted by 
        the State to a manufacturer under section 1927(b)(2)(A), 
        information on covered outpatient drugs dispensed to 
        individuals eligible for medical assistance who are enrolled 
        with the entity and for which the entity is responsible for 
        coverage of such drugs under this subsection.''.
    (b) Conforming Amendments.--Section 1927 of such Act (42 U.S.C. 
1396r-8) is amended----
            (1) in the first sentence of subsection (b)(1)(A), by 
        inserting before the period at the end the following: ``, 
        including such drugs dispensed to individuals enrolled with a 
        medicaid managed care organization if the organization is 
        responsible for coverage of such drugs'';
            (2) in subsection (b)(2), by adding at the end the 
        following new subparagraph:
                    ``(C) Reporting on mmco drugs.--On a quarterly 
                basis, each State shall report to the Secretary the 
                total amount of rebates in dollars received from 
                pharmacy manufacturers for drugs provided to 
                individuals enrolled with Medicaid managed care 
                organizations that contract under section 1903(m).''; 
                and
            (3) in subsection (j)--
                    (A) in the heading by striking ``Exemption'' and 
                inserting ``Special Rules''; and
                    (B) in paragraph (1), by striking ``not''.
    (c) Effective Date.--The amendments made by this section take 
effect on July 1, 2010, and shall apply to drugs dispensed on or after 
such date, without regard to whether or not final regulations to carry 
out such amendments have been promulgated by such date.

SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDUCATION.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by sections 1701(a)(2), 1711(a), and 1713(a), is 
amended by adding at the end the following new subsection:
    ``(bb) Payment for Graduate Medical Education.--
            ``(1) In general.--The term `medical assistance' includes 
        payment for costs of graduate medical education consistent with 
        this subsection, whether provided in or outside of a hospital.
            ``(2) Submission of information.--For purposes of paragraph 
        (1) and section 1902(a)(13)(A)(v), payment for such costs is 
        not consistent with this subsection unless--
                    ``(A) the State submits to the Secretary, in a 
                timely manner and on an annual basis specified by the 
                Secretary, information on total payments for graduate 
                medical education and how such payments are being used 
                for graduate medical education, including--
                            ``(i) the institutions and programs 
                        eligible for receiving the funding;
                            ``(ii) the manner in which such payments 
                        are calculated;
                            ``(iii) the types and fields of education 
                        being supported;
                            ``(iv) the workforce or other goals to 
                        which the funding is being applied;
                            ``(v) State progress in meeting such goals; 
                        and
                            ``(vi) such other information as the 
                        Secretary determines will assist in carrying 
                        out paragraphs (3) and (4); and
                    ``(B) such expenditures are made consistent with 
                such goals and requirements as are established under 
                paragraph (4).
            ``(3) Review of information.--The Secretary shall make the 
        information submitted under paragraph (2) available to the 
        Advisory Committee on Health Workforce Evaluation and 
        Assessment (established under section 2261 of the Public Health 
        Service Act). The Secretary and the Advisory Committee shall 
        independently review the information submitted under paragraph 
        (2), taking into account State and local workforce needs.
            ``(4) Specification of goals and requirements.--The 
        Secretary shall specify by rule, initially published by not 
        later than December 31, 2011--
                    ``(A) program goals for the use of funds described 
                in paragraph (1), taking into account recommendations 
                of the such Advisory Committee and the goals for 
                approved medical residency training programs described 
                in section 1886(h)(1)(B); and
                    ``(B) requirements for use of such funds consistent 
                with such goals.
        Such rule may be effective on an interim basis pending revision 
        after an opportunity for public comment.''.
    (b) Conforming Amendment.--Section 1902(a)(13)(A) of such Act (42 
U.S.C. 1396a(a)(13)(A)) is amended--
            (1) by striking ``and'' at the end of clause (iii);
            (2) by striking ``; and'' and inserting ``, and''; and
            (3) by adding at the end the following new clause:
                            ``(v) in the case of hospitals and at the 
                        option of a State, such rates may include, to 
                        the extent consistent with section 1905(bb), 
                        payment for graduate medical education; and''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act. Nothing in this 
section shall be construed as affecting payments made before such date 
under a State plan under title XIX of the Social Security Act for 
graduate medical education.

                  Subtitle F--Waste, Fraud, and Abuse

SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS.

    (a) Medicaid Non-Payment for Certain Health Care-Acquired 
Conditions.--Section 1903(i) of the Social Security Act (42 U.S.C. 
1396b(i)) is amended--
            (1) by striking ``or'' at the end of paragraph (23);
            (2) by striking the period at the end of paragraph (24) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (24) the following new 
        paragraph:
            ``(25) with respect to amounts expended for services 
        related to the presence of a condition that could be identified 
        by a secondary diagnostic code described in section 
        1886(d)(4)(D)(iv) and for any health care acquired condition 
        determined as a non-covered service under title XVIII.''.
    (b) Application to CHIP.--Section 2107(e)(1)(G) of such Act (42 
U.S.C. 1397gg(e)(1)(G)) is amended by striking ``and (17)'' and 
inserting ``(17), and (25)''.
    (c) Permission To Include Additional Health Care-Acquired 
Conditions.--Nothing in this section shall prevent a State from 
including additional health care-acquired conditions for non-payment in 
its Medicaid program under title XIX of the Social Security Act.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges occurring on or after January 1, 2010.

SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER MEDICAID INTEGRITY 
              PROGRAM.

    Section 1936(c)(2)) of the Social Security Act (42 U.S.C. 1396u-
7(c)(2)) is amended--
            (1) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (2) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) For the contract year beginning in 2011 and 
                each subsequent contract year, the entity provides 
                assurances to the satisfaction of the Secretary that 
                the entity will conduct periodic evaluations of the 
                effectiveness of the activities carried out by such 
                entity under the Program and will submit to the 
                Secretary an annual report on such activities.''.

SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT PROGRAMS TO REDUCE 
              WASTE, FRAUD, AND ABUSE.

    Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as 
amended by sections 1631(b)(1) and 1703, is further amended--
            (1) in paragraph (74), by striking at the end ``and'';
            (2) in paragraph (75), by striking at the end the period 
        and inserting ``; and''; and
            (3) by inserting after paragraph (75) the following new 
        paragraph:
            ``(76) provide that any provider or supplier (other than a 
        physician or nursing facility) providing services under such 
        plan shall, subject to paragraph (5) of section 1874(d), 
        establish a compliance program described in paragraph (1) of 
        such section in accordance with such section.''.

SEC. 1754. OVERPAYMENTS.

    (a) In General.--Section 1903(d)(2)(C) of the Social Security Act 
(42 U.S.C. 1396b(d)(2)(C)) is amended by inserting ``(or 1 year in the 
case of overpayments due to fraud)'' after ``60 days''.
    (b) Effective Date.--In the case overpayments discovered on or 
after the date of the enactment of this Act.

SEC. 1755. MANAGED CARE ORGANIZATIONS.

    (a) Minimum Medical Loss Ratio.--
            (1) Medicaid.--Section 1903(m)(2)(A) of the Social Security 
        Act (42 U.S.C. 1396b(m)(2)(A)), as amended by section 
        1743(a)(3), is amended--
                    (A) by striking ``and'' at the end of clause (xii);
                    (B) by striking the period at the end of clause 
                (xiii) and inserting ``; and''; and
                    (C) by adding at the end the following new clause:
            ``(xiv) such contract has a medical loss ratio, as 
        determined in accordance with a methodology specified by the 
        Secretary that is a percentage (not less than 85 percent) as 
        specified by the Secretary.''.
            (2) CHIP.--Section 2107(e)(1) of such Act (42 U.S.C. 
        1397gg(e)(1)) is amended--
                    (A) by redesignating subparagraphs (H) through (L) 
                as subparagraphs (I) through (M); and
                    (B) by inserting after subparagraph (G) the 
                following new subparagraph:
                    ``(H) Section 1903(m)(2)(A)(xiv) (relating to 
                application of minimum loss ratios), with respect to 
                comparable contracts under this title.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to contracts entered into or renewed on or after 
        July 1, 2010.
    (b) Patient Encounter Data.--
            (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
        Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by 
        inserting ``and for the provision of such data to the State at 
        a frequency and level of detail to be specified by the 
        Secretary'' after ``patients''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to contract years beginning on or 
        after January 1, 2010.

SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID AND 
              CHIP IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN OR 
              CHILD HEALTH PLAN.

    (a) State Plan Requirement.--Section 1902(a)(39) of the Social 
Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting 
after ``1128A,'' the following: ``terminate the participation of any 
individual or entity in such program if (subject to such exceptions are 
permitted with respect to exclusion under sections 1128(b)(3)(C) and 
1128(d)(3)(B)) participation of such individual or entity is terminated 
under title XVIII, any other State plan under this title, or any child 
health plan under title XXI,''.
    (b) Application to CHIP.--Section 2107(e)(1)(A) of such Act (42 
U.S.C. 1397gg(e)(1)(A)) is amended by inserting before the period at 
the end the following: ``and section 1902(a)(39) (relating to exclusion 
and termination of participation)''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after January 1, 2011, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act or a child health 
        plan under title XXI of such Act which the Secretary of Health 
        and Human Services determines requires State legislation (other 
        than legislation appropriating funds) in order for the plan to 
        meet the additional requirement imposed by the amendments made 
        by this section, the State plan or child health plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATION RELATING TO 
              CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    (a) State Plan Requirement.--Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703, and 
1753, is further amended--
            (1) in paragraph (75), by striking at the end ``and'';
            (2) in paragraph (76), by striking at the end the period 
        and inserting ``; and''; and
            (3) by inserting after paragraph (76) the following new 
        paragraph:
            ``(77) provide that the State agency described in paragraph 
        (9) exclude, with respect to a period, any individual or entity 
        from participation in the program under the State plan if such 
        individual or entity owns, controls, or manages an entity that 
        (or if such entity is owned, controlled, or managed by an 
        individual or entity that)--
                    ``(A) has unpaid overpayments under this title 
                during such period determined by the Secretary or the 
                State agency to be delinquent;
                    ``(B) is suspended or excluded from participation 
                under or whose participation is terminated under this 
                title during such period; or
                    ``(C) is affiliated with an individual or entity 
                that has been suspended or excluded from participation 
                under this title or whose participation is terminated 
                under this title during such period.''.
    (b) Child Health Plan Requirement.--Section 2107(e)(1)(A) of such 
Act (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is 
amended by striking ``section 1902(a)(39)'' and inserting ``sections 
1902(a)(39) and 1902(a)(77)''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to services furnished on or 
        after January 1, 2011, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act or a child health 
        plan under title XXI of such Act which the Secretary of Health 
        and Human Services determines requires State legislation (other 
        than legislation appropriating funds) in order for the plan to 
        meet the additional requirement imposed by the amendments made 
        by this section, the State plan or child health plan shall not 
        be regarded as failing to comply with the requirements of such 
        title solely on the basis of its failure to meet this 
        additional requirement before the first day of the first 
        calendar quarter beginning after the close of the first regular 
        session of the State legislature that begins after the date of 
        the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
              MMIS TO DETECT FRAUD AND ABUSE.

    Section 1903(r)(1)(F) of the Social Security Act (42 U.S.C. 
1396b(r)(1)(F)) is amended by inserting after ``necessary'' the 
following: ``and including, for data submitted to the Secretary on or 
after July 1, 2010, data elements from the automated data system that 
the Secretary determines to be necessary for detection of waste, fraud, 
and abuse''.

SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
              REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703, 1753, 
and 1757, is further amended--
            (1) in paragraph (76); by striking at the end ``and'';
            (2) in paragraph (77), by striking the period at the end 
        and inserting ``and''; and
            (3) by inserting after paragraph (77) the following new 
        paragraph:
            ``(78) provide that any agent, clearinghouse, or other 
        alternate payee that submits claims on behalf of a health care 
        provider must register with the State and the Secretary in a 
        form and manner specified by the Secretary under section 
        1866(j)(1)(D).''.
    (b) Denial of Payment.--Section 1903(i) of such Act (42 U.S.C. 
1396b(i)), as amended by section 1753, is amended--
            (1) by striking ``or'' at the end of paragraph (24);
            (2) by striking the period at the end of paragraph (25) and 
        inserting ``; or''; and
            (3) by inserting after paragraph (25) the following new 
        paragraph:
            ``(26) with respect to any amount paid to a billing agent, 
        clearinghouse, or other alternate payee that is not registered 
        with the State and the Secretary as required under section 
        1902(a)(78).''.
    (c) Effective Date.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to claims submitted on or 
        after January 1, 2012, without regard to whether or not final 
        regulations to carry out such amendments have been promulgated 
        by such date.
            (2) In the case of a State plan for medical assistance 
        under title XIX of the Social Security Act which the Secretary 
        of Health and Human Services determines requires State 
        legislation (other than legislation appropriating funds) in 
        order for the plan to meet the additional requirement imposed 
        by the amendments made by this section, the State plan or child 
        health plan shall not be regarded as failing to comply with the 
        requirements of such title solely on the basis of its failure 
        to meet this additional requirement before the first day of the 
        first calendar quarter beginning after the close of the first 
        regular session of the State legislature that begins after the 
        date of the enactment of this Act. For purposes of the previous 
        sentence, in the case of a State that has a 2-year legislative 
        session, each year of such session shall be deemed to be a 
        separate regular session of the State legislature.

SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RELATED MISCONDUCT.

    (a) In General.--Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)), as previously amended is amended--
            (1) by striking ``or'' at the end of paragraph (25);
            (2) by striking the period at the end of paragraph (26) and 
        inserting a semicolon; and
            (3) by inserting after paragraph (26) the following new 
        paragraphs:
            ``(27) with respect to any amount expended--
                    ``(A) on litigation in which a court imposes 
                sanctions on the State, its employees, or its counsel 
                for litigation-related misconduct; or
                    ``(B) to reimburse (or otherwise compensate) a 
                managed care entity for payment of legal expenses 
                associated with any action in which a court imposes 
                sanctions on the managed care entity for litigation-
                related misconduct.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts expended on or after January 1, 2010.

              Subtitle G--Puerto Rico and the Territories

SEC. 1771. PUERTO RICO AND TERRITORIES.

    (a) Increase in Cap.--
            (1) In general.--Section 1108(g) of the Social Security Act 
        (42 U.S.C. 1308(g)) is amended--
                    (A) in paragraph (4) by striking ``and (3)'' and by 
                inserting ``(3), (6), and (7)''; and
                    (B) by inserting after paragraph (5), as added by 
                section 1731(d), the following new paragraph:
            ``(6) Fiscal years 2011 through 2019.--The amounts 
        otherwise determined under this subsection for Puerto Rico, the 
        Virgin Islands, Guam, the Northern Mariana Islands, and 
        American Samoa for fiscal year 2011 and each succeeding fiscal 
        year through fiscal year 2019 shall be increased by the 
        percentage specified under section 1771(c) of the America's 
        Affordable Health Choices Act of 2009 for purposes of this 
        paragraph of the amounts otherwise determined under this 
        section (without regard to this paragraph).
            ``(7) Fiscal year 2020 and subsequent fiscal years.--The 
        amounts otherwise determined under this subsection for Puerto 
        Rico, the Virgin Islands, Guam, the Northern Mariana Islands, 
        and American Samoa for fiscal year 2020 and each succeeding 
        fiscal year shall be the amount provided in paragraph (6) or 
        this paragraph for the preceding fiscal year for the respective 
        territory increased by the percentage increase referred to in 
        paragraph (1)(B), rounded to the nearest $10,000 (or $100,000 
        in the case of Puerto Rico).''.
            (2) Coordination with arra.--Section 5001(d) of the 
        American Recovery and Reinvestment Act of 2009 shall not apply 
        during any period for which section 1108(g)(6) of the Social 
        Security Act, as added by paragraph (1), applies.
    (b) Increase in FMAP.--
            (1) In general.--Section 1905(b)(2) of the Social Security 
        Act (42 U.S.C. 1396d(b)(2)) is amended by striking ``50 per 
        centum'' and inserting ``for fiscal years 2011 through 2019, 
        the percentage specified under section 1771(c) of the America's 
        Affordable Health Choices Act of 2009 for purposes of this 
        clause for such fiscal year and for subsequent fiscal years the 
        percentage so specified for fiscal year 2019''.
            (2) Effective date.--The amendment made by subsection (a) 
        shall apply to items and services furnished on or after October 
        1, 2010.
    (c) Specification of Percentages.--The Secretary of Health and 
Human Services shall specify, before January 1, 2011, the percentages 
to be applied under section 1108(g)(6) of the Social Security Act, as 
added by subsection (a)(1), and under section 1905(b)(2) of such Act, 
as amended by subsection (b)(1), in a manner so that for the period 
beginning with 2011 and ending with 2019 the total estimated additional 
Federal expenditures resulting from the application of such percentages 
will be equal to $10,350,000,000.

                       Subtitle H--Miscellaneous

SEC. 1781. TECHNICAL CORRECTIONS.

    (a) Technical Correction to Section 1144 of the Social Security 
Act.--The first sentence of section 1144(c)(3) of the Social Security 
Act (42 U.S.C. 1320b--14(c)(3)) is amended--
            (1) by striking ``transmittal''; and
            (2) by inserting before the period the following: ``as 
        specified in section 1935(a)(4)''.
    (b) Clarifying Amendment to Section 1935 of the Social Security 
Act.--Section 1935(a)(4) of the Social Security Act (42 U.S.C. 1396u--
5(a)(4)), as amended by section 113(b) of Public Law 110-275, is 
amended--
            (1) by striking the second sentence;
            (2) by redesignating the first sentence as a subparagraph 
        (A) with appropriate indentation and with the following 
        heading: ``In general'';
            (3) by adding at the end the following subparagraphs:
                    ``(B) Furnishing medical assistance with reasonable 
                promptness.--For the purpose of a State's obligation 
                under section 1902(a)(8) to furnish medical assistance 
                with reasonable promptness, the date of the electronic 
                transmission of low-income subsidy program data, as 
                described in section 1144(c), from the Commissioner of 
                Social Security to the State Medicaid Agency, shall 
                constitute the date of filing of such application for 
                benefits under the Medicare Savings Program.
                    ``(C) Determining availability of medical 
                assistance.--For the purpose of determining when 
                medical assistance will be made available, the State 
                shall consider the date of the individual's application 
                for the low income subsidy program to constitute the 
                date of filing for benefits under the Medicare Savings 
                Program.''.
    (c) Effective Date Relating to Medicaid Agency Consideration of 
Low-income Subsidy Application and Data Transmittal.--The amendments 
made by subsections (a) and (b) shall be effective as if included in 
the enactment of section 113(b) of Public Law 110-275.
    (d) Technical Correction to Section 605 of CHIPRA.--Section 605 of 
the Children's Health Insurance Program Reauthorization Act of 2009 
(Public Law 111-3) is amended by striking ``legal residents'' and 
inserting ``lawfully residing in the United States''.
    (e) Technical Correction to Section 1905 of the Social Security 
Act.--Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) 
is amended by inserting ``or the care and services themselves, or 
both'' before ``(if provided in or after''.
    (f) Clarifying Amendment to Section 1115 of the Social Security 
Act.--Section 1115(a) of the Social Security Act (42 U.S.C. 1315(a)) is 
amended by adding at the end the following: ``If an experimental, 
pilot, or demonstration project that relates to title XIX is approved 
pursuant to any part of this subsection, such project shall be treated 
as part of the State plan, all medical assistance provided on behalf of 
any individuals affected by such project shall be medical assistance 
provided under the State plan, and all provisions of this Act not 
explicitly waived in approving such project shall remain fully 
applicable to all individuals receiving benefits under the State 
plan.''.

SEC. 1782. EXTENSION OF QI PROGRAM.

    (a) In General.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is amended--
            (1) by striking ``sections 1933 and'' and by inserting 
        ``section''; and
            (2) by striking ``December 2010'' and inserting ``December 
        2012''.
    (b) Elimination of Funding Limitation.--
            (1) In general.--Section 1933 of such Act (42 U.S.C. 1396u-
        3) is amended--
                    (A) in subsection (a), by striking ``who are 
                selected to receive such assistance under subsection 
                (b)'';
                    (B) by striking subsections (b), (c), (e), and (g);
                    (C) in subsection (d), by striking ``furnished in a 
                State'' and all that follows and inserting ``the 
                Federal medical assistance percentage shall be equal to 
                100 percent.''; and
                    (D) by redesignating subsections (d) and (f) as 
                subsections (b) and (c), respectively.
            (2) Conforming amendment.--Section 1905(b) of such Act (42 
        U.S.C. 1396d(b)) is amended by striking ``1933(d)'' and 
        inserting ``1933(b)''.
            (3) Effective date.--The amendments made by paragraph (1) 
        shall take effect on January 1, 2011.

                  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.

    (a) In General.--Paragraph (19) of section 6103(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(19) Disclosures to facilitate identification of 
        individuals likely to be ineligible for low-income subsidies 
        under medicare prescription drug program to assist social 
        security administration's outreach to eligible individuals.--
                    ``(A) In general.--Upon written request from the 
                Commissioner of Social Security, the following return 
                information (including such information disclosed to 
                the Social Security Administration under paragraph (1) 
                or (5)) shall be disclosed to officers and employees of 
                the Social Security Administration, with respect to any 
                taxpayer identified by the Commissioner of Social 
                Security--
                            ``(i) return information for the applicable 
                        year from returns with respect to wages (as 
                        defined in section 3121(a) or 3401(a)) and 
                        payments of retirement income (as described in 
                        paragraph (1) of this subsection),
                            ``(ii) unearned income information and 
                        income information of the taxpayer from 
                        partnerships, trusts, estates, and subchapter S 
                        corporations for the applicable year,
                            ``(iii) if the individual filed an income 
                        tax return for the applicable year, the filing 
                        status, number of dependents, income from 
                        farming, and income from self-employment, on 
                        such return,
                            ``(iv) if the individual is a married 
                        individual filing a separate return for the 
                        applicable year, the social security number (if 
                        reasonably available) of the spouse on such 
                        return,
                            ``(v) if the individual files a joint 
                        return for the applicable year, the social 
                        security number, unearned income information, 
                        and income information from partnerships, 
                        trusts, estates, and subchapter S corporations 
                        of the individual's spouse on such return, and
                            ``(vi) such other return information 
                        relating to the individual (or the individual's 
                        spouse in the case of a joint return) as is 
                        prescribed by the Secretary by regulation as 
                        might indicate that the individual is likely to 
                        be ineligible for a low-income prescription 
                        drug subsidy under section 1860D-14 of the 
                        Social Security Act.
                    ``(B) Applicable year.--For the purposes of this 
                paragraph, the term `applicable year' means the most 
                recent taxable year for which information is available 
                in the Internal Revenue Service's taxpayer information 
                records.
                    ``(C) Restriction on individuals for whom 
                disclosure may be requested.--The Commissioner of 
                Social Security shall request information under this 
                paragraph only with respect to--
                            ``(i) individuals the Social Security 
                        Administration has identified, using all other 
                        reasonably available information, as likely to 
                        be eligible for a low-income prescription drug 
                        subsidy under section 1860D-14 of the Social 
                        Security Act and who have not applied for such 
                        subsidy, and
                            ``(ii) any individual the Social Security 
                        Administration has identified as a spouse of an 
                        individual described in clause (i).
                    ``(D) Restriction on use of disclosed 
                information.--Return information disclosed under this 
                paragraph may be used only by officers and employees of 
                the Social Security Administration solely for purposes 
                of identifying individuals likely to be ineligible for 
                a low-income prescription drug subsidy under section 
                1860D-14 of the Social Security Act for use in outreach 
                efforts under section 1144 of the Social Security 
                Act.''.
    (b) Safeguards.--Paragraph (4) of section 6103(p) of such Code is 
amended--
            (1) by striking ``(l)(19)'' each place it appears, and
            (2) by striking ``or (17)'' each place it appears and 
        inserting ``(17), or (19)''.
    (c) Conforming Amendment.--Paragraph (3) of section 6103(a) of such 
Code is amended by striking ``(19),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date which is 12 months after the 
date of the enactment of this Act.

SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND; FINANCING FOR 
              TRUST FUND.

    (a) Establishment of Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to trust fund code) is amended 
        by adding at the end the following new section:

``SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Health Care 
Comparative Effectiveness Research Trust Fund' (hereinafter in this 
section referred to as the `CERTF'), consisting of such amounts as may 
be appropriated or credited to such Trust Fund as provided in this 
section and section 9602(b).
    ``(b) Transfers to Fund.--There are hereby appropriated to the 
Trust Fund the following:
            ``(1) For fiscal year 2010, $90,000,000.
            ``(2) For fiscal year 2011, $100,000,000.
            ``(3) For fiscal year 2012, $110,000,000.
            ``(4) For each fiscal year beginning with fiscal year 
        2013--
                    ``(A) an amount equivalent to the net revenues 
                received in the Treasury from the fees imposed under 
                subchapter B of chapter 34 (relating to fees on health 
                insurance and self-insured plans) for such fiscal year; 
                and
                    ``(B) subject to subsection (c)(2), amounts 
                determined by the Secretary of Health and Human 
                Services to be equivalent to the fair share per capita 
                amount computed under subsection (c)(1) for the fiscal 
                year multiplied by the average number of individuals 
                entitled to benefits under part A, or enrolled under 
                part B, of title XVIII of the Social Security Act 
                during such fiscal year.
The amounts appropriated under paragraphs (1), (2), (3), and (4)(B) 
shall be transferred from the Federal Hospital Insurance Trust Fund and 
from the Federal Supplementary Medical Insurance Trust Fund 
(established under section 1841 of such Act), and from the Medicare 
Prescription Drug Account within such Trust Fund, in proportion (as 
estimated by the Secretary) to the total expenditures during such 
fiscal year that are made under title XVIII of such Act from the 
respective trust fund or account.
    ``(c) Fair Share Per Capita Amount.--
            ``(1) Computation.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                fair share per capita amount under this paragraph for a 
                fiscal year (beginning with fiscal year 2013) is an 
                amount computed by the Secretary of Health and Human 
                Services for such fiscal year that, when applied under 
                this section and subchapter B of chapter 34 of the 
                Internal Revenue Code of 1986, will result in revenues 
                to the CERTF of $375,000,000 for the fiscal year.
                    ``(B) Alternative computation.--
                            ``(i) In general.--If the Secretary is 
                        unable to compute the fair share per capita 
                        amount under subparagraph (A) for a fiscal 
                        year, the fair share per capita amount under 
                        this paragraph for the fiscal year shall be the 
                        default amount determined under clause (ii) for 
                        the fiscal year.
                            ``(ii) Default amount.--The default amount 
                        under this clause for--
                                    ``(I) fiscal year 2013 is equal to 
                                $2; or
                                    ``(II) a subsequent year is equal 
                                to the default amount under this clause 
                                for the preceding fiscal year increased 
                                by the annual percentage increase in 
                                the medical care component of the 
                                consumer price index (United States 
                                city average) for the 12-month period 
                                ending with April of the preceding 
                                fiscal year.
                        Any amount determined under subclause (II) 
                        shall be rounded to the nearest penny.
            ``(2) Limitation on medicare funding.--In no case shall the 
        amount transferred under subsection (b)(4)(B) for any fiscal 
        year exceed $90,000,000.
    ``(d) Expenditures From Fund.--
            ``(1) In general.--Subject to paragraph (2), amounts in the 
        CERTF are available, without the need for further 
        appropriations and without fiscal year limitation, to the 
        Secretary of Health and Human Services for carrying out section 
        1181 of the Social Security Act.
            ``(2) Allocation for commission.--Not less than the 
        following amounts in the CERTF for a fiscal year shall be 
        available to carry out the activities of the Comparative 
        Effectiveness Research Commission established under section 
        1181(b) of the Social Security Act for such fiscal year:
                    ``(A) For fiscal year 2010, $7,000,000.
                    ``(B) For fiscal year 2011, $9,000,000.
                    ``(C) For each fiscal year beginning with 2012, 
                $10,000,000.
        Nothing in this paragraph shall be construed as preventing 
        additional amounts in the CERTF from being made available to 
        the Comparative Effectiveness Research Commission for such 
        activities.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary based on the 
excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.''.
            (2) Clerical amendment.--The table of sections for such 
        subchapter A is amended by adding at the end thereof the 
        following new item:

``Sec. 9511. Health Care Comparative Effectiveness Research Trust 
                            Fund.''.
    (b) Financing for Fund From Fees on Insured and Self-Insured Health 
Plans.--
            (1) General rule.--Chapter 34 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subchapter:

         ``Subchapter B--Insured and Self-Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Self-insured health plans.
``Sec. 4377. Definitions and special rules.

``SEC. 4375. HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year a fee equal to the fair 
share per capita amount determined under section 9511(c)(1) multiplied 
by the average number of lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall 
be paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section:
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `specified health insurance policy' means any 
        accident or health insurance policy issued with respect to 
        individuals residing in the United States.
            ``(2) Exemption for certain policies.--The term `specified 
        health insurance policy' does not include any insurance if 
        substantially all of its coverage is of excepted benefits 
        described in section 9832(c).
            ``(3) Treatment of prepaid health coverage arrangements.--
                    ``(A) In general.--In the case of any arrangement 
                described in subparagraph (B)--
                            ``(i) such arrangement shall be treated as 
                        a specified health insurance policy, and
                            ``(ii) the person referred to in such 
                        subparagraph shall be treated as the issuer.
                    ``(B) Description of arrangements.--An arrangement 
                is described in this subparagraph if under such 
                arrangement fixed payments or premiums are received as 
                consideration for any person's agreement to provide or 
                arrange for the provision of accident or health 
                coverage to residents of the United States, regardless 
                of how such coverage is provided or arranged to be 
                provided.

``SEC. 4376. SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-
insured health plan for each plan year, there is hereby imposed a fee 
equal to the fair share per capita amount determined under section 
9511(c)(1) multiplied by the average number of lives covered under the 
plan.
    ``(b) Liability for Fee.--
            ``(1) In general.--The fee imposed by subsection (a) shall 
        be paid by the plan sponsor.
            ``(2) Plan sponsor.--For purposes of paragraph (1) the term 
        `plan sponsor' means--
                    ``(A) the employer in the case of a plan 
                established or maintained by a single employer,
                    ``(B) the employee organization in the case of a 
                plan established or maintained by an employee 
                organization,
                    ``(C) in the case of--
                            ``(i) a plan established or maintained by 2 
                        or more employers or jointly by 1 or more 
                        employers and 1 or more employee organizations,
                            ``(ii) a multiple employer welfare 
                        arrangement, or
                            ``(iii) a voluntary employees' beneficiary 
                        association described in section 501(c)(9),
                the association, committee, joint board of trustees, or 
                other similar group of representatives of the parties 
                who establish or maintain the plan, or
                    ``(D) the cooperative or association described in 
                subsection (c)(2)(F) in the case of a plan established 
                or maintained by such a cooperative or association.
    ``(c) Applicable Self-Insured Health Plan.--For purposes of this 
section, the term `applicable self-insured health plan' means any plan 
for providing accident or health coverage if--
            ``(1) any portion of such coverage is provided other than 
        through an insurance policy, and
            ``(2) such plan is established or maintained--
                    ``(A) by one or more employers for the benefit of 
                their employees or former employees,
                    ``(B) by one or more employee organizations for the 
                benefit of their members or former members,
                    ``(C) jointly by 1 or more employers and 1 or more 
                employee organizations for the benefit of employees or 
                former employees,
                    ``(D) by a voluntary employees' beneficiary 
                association described in section 501(c)(9),
                    ``(E) by any organization described in section 
                501(c)(6), or
                    ``(F) in the case of a plan not described in the 
                preceding subparagraphs, by a multiple employer welfare 
                arrangement (as defined in section 3(40) of Employee 
                Retirement Income Security Act of 1974), a rural 
                electric cooperative (as defined in section 
                3(40)(B)(iv) of such Act), or a rural telephone 
                cooperative association (as defined in section 
                3(40)(B)(v) of such Act).

``SEC. 4377. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Accident and health coverage.--The term `accident and 
        health coverage' means any coverage which, if provided by an 
        insurance policy, would cause such policy to be a specified 
        health insurance policy (as defined in section 4375(c)).
            ``(2) Insurance policy.--The term `insurance policy' means 
        any policy or other instrument whereby a contract of insurance 
        is issued, renewed, or extended.
            ``(3) United states.--The term `United States' includes any 
        possession of the United States.
    ``(b) Treatment of Governmental Entities.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) the term `person' includes any governmental 
                entity, and
                    ``(B) notwithstanding any other law or rule of law, 
                governmental entities shall not be exempt from the fees 
                imposed by this subchapter except as provided in 
                paragraph (2).
            ``(2) Treatment of exempt governmental programs.--In the 
        case of an exempt governmental program, no fee shall be imposed 
        under section 4375 or section 4376 on any covered life under 
        such program.
            ``(3) Exempt governmental program defined.--For purposes of 
        this subchapter, the term `exempt governmental program' means--
                    ``(A) any insurance program established under title 
                XVIII of the Social Security Act,
                    ``(B) the medical assistance program established by 
                title XIX or XXI of the Social Security Act,
                    ``(C) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to individuals (or the spouses and dependents 
                thereof) by reason of such individuals being--
                            ``(i) members of the Armed Forces of the 
                        United States, or
                            ``(ii) veterans, and
                    ``(D) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to members of Indian tribes (as defined in 
                section 4(d) of the Indian Health Care Improvement 
                Act).
    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''.
            (2) Clerical amendments.--
                    (A) Chapter 34 of such Code is amended by striking 
                the chapter heading and inserting the following:

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

         ``subchapter b. insured and self-insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

                    (B) The table of chapters for subtitle D of such 
                Code is amended by striking the item relating to 
                chapter 34 and inserting the following new item:

          ``Chapter 34--Taxes on Certain Insurance Policies''.

            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to policies and plans for portions of 
        policy or plan years beginning on or after October 1, 2012.

                   TITLE Q--MISCELLANEOUS PROVISIONS

SEC. 1901. REPEAL OF TRIGGER PROVISION.

    Subtitle A of title VIII of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173) is 
repealed and the provisions of law amended by such subtitle are 
restored as if such subtitle had never been enacted.

SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT (CCA) PROGRAM.

    Section 1860C-1 of the Social Security Act (42 U.S.C. 1395w-29), as 
added by section 241(a) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (Public Law 108-173), is repealed.

SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109-171) is amended by inserting 
``(or September 30, 2011, in the case of a demonstration project in 
operation as of October 1, 2008)'' after ``December 31, 2009''.
    (b) Funding.--
            (1) In general.--Subsection (f)(1) of such section is 
        amended by inserting ``and for fiscal year 2010, $1,600,000,'' 
        after ``$6,000,000,''.
            (2) Availability.--Subsection (f)(2) of such section is 
        amended by striking ``2010'' and inserting ``2014 or until 
        expended''.
    (c) Reports.--
            (1) Quality improvement and savings.--Subsection (e)(3) of 
        such section is amended by striking ``December 1, 2008'' and 
        inserting ``March 31, 2011''.
            (2) Final report.--Subsection (e)(4) of such section is 
        amended by striking ``May 1, 2010'' and inserting ``March 31, 
        2013''.

SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITATION PROGRAMS FOR 
              FAMILIES WITH YOUNG CHILDREN AND FAMILIES EXPECTING 
              CHILDREN.

    Part B of title IV of the Social Security Act (42 U.S.C. 621-629i) 
is amended by adding at the end the following:

       ``Subpart 3--Support for Quality Home Visitation Programs

``SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES WITH YOUNG CHILDREN 
              AND FAMILIES EXPECTING CHILDREN.

    ``(a) Purpose.--The purpose of this section is to improve the well-
being, health, and development of children by enabling the 
establishment and expansion of high quality programs providing 
voluntary home visitation for families with young children and families 
expecting children.
    ``(b) Grant Application.--A State that desires to receive a grant 
under this section shall submit to the Secretary for approval, at such 
time and in such manner as the Secretary may require, an application 
for the grant that includes the following:
            ``(1) Description of home visitation programs.--A 
        description of the high quality programs of home visitation for 
        families with young children and families expecting children 
        that will be supported by a grant made to the State under this 
        section, the outcomes the programs are intended to achieve, and 
        the evidence supporting the effectiveness of the programs.
            ``(2) Results of needs assessment.--The results of a 
        statewide needs assessment that describes--
                    ``(A) the number, quality, and capacity of home 
                visitation programs for families with young children 
                and families expecting children in the State;
                    ``(B) the number and types of families who are 
                receiving services under the programs;
                    ``(C) the sources and amount of funding provided to 
                the programs;
                    ``(D) the gaps in home visitation in the State, 
                including identification of communities that are in 
                high need of the services; and
                    ``(E) training and technical assistance activities 
                designed to achieve or support the goals of the 
                programs.
            ``(3) Assurances.--Assurances from the State that--
                    ``(A) in supporting home visitation programs using 
                funds provided under this section, the State shall 
                identify and prioritize serving communities that are in 
                high need of such services, especially communities with 
                a high proportion of low-income families or a high 
                incidence of child maltreatment;
                    ``(B) the State will reserve 5 percent of the grant 
                funds for training and technical assistance to the home 
                visitation programs using such funds;
                    ``(C) in supporting home visitation programs using 
                funds provided under this section, the State will 
                promote coordination and collaboration with other home 
                visitation programs (including programs funded under 
                title XIX) and with other child and family services, 
                health services, income supports, and other related 
                assistance;
                    ``(D) home visitation programs supported using such 
                funds will, when appropriate, provide referrals to 
                other programs serving children and families; and
                    ``(E) the State will comply with subsection (i), 
                and cooperate with any evaluation conducted under 
                subsection (j).
            ``(4) Other information.--Such other information as the 
        Secretary may require.
    ``(c) Allotments.--
            ``(1) Indian tribes.--From the amount reserved under 
        subsection (l)(2) for a fiscal year, the Secretary shall allot 
        to each Indian tribe that meets the requirement of subsection 
        (d), if applicable, for the fiscal year the amount that bears 
        the same ratio to the amount so reserved as the number of 
        children in the Indian tribe whose families have income that 
        does not exceed 200 percent of the poverty line bears to the 
        total number of children in such Indian tribes whose families 
        have income that does not exceed 200 percent of the poverty 
        line.
            ``(2) States and territories.--From the amount appropriated 
        under subsection (m) for a fiscal year that remains after 
        making the reservations required by subsection (l), the 
        Secretary shall allot to each State that is not an Indian tribe 
        and that meets the requirement of subsection (d), if 
        applicable, for the fiscal year the amount that bears the same 
        ratio to the remainder of the amount so appropriated as the 
        number of children in the State whose families have income that 
        does not exceed 200 percent of the poverty line bears to the 
        total number of children in such States whose families have 
        income that does not exceed 200 percent of the poverty line.
            ``(3) Reallotments.--The amount of any allotment to a State 
        under a paragraph of this subsection for any fiscal year that 
        the State certifies to the Secretary will not be expended by 
        the State pursuant to this section shall be available for 
        reallotment using the allotment methodology specified in that 
        paragraph. Any amount so reallotted to a State is deemed part 
        of the allotment of the State under this subsection.
    ``(d) Maintenance of Effort.--Beginning with fiscal year 2011, a 
State meets the requirement of this subsection for a fiscal year if the 
Secretary finds that the aggregate expenditures by the State from State 
and local sources for programs of home visitation for families with 
young children and families expecting children for the then preceding 
fiscal year was not less than 100 percent of such aggregate 
expenditures for the then 2nd preceding fiscal year.
    ``(e) Payment of Grant.--
            ``(1) In general.--The Secretary shall make a grant to each 
        State that meets the requirements of subsections (b) and (d), 
        if applicable, for a fiscal year for which funds are 
        appropriated under subsection (m), in an amount equal to the 
        reimbursable percentage of the eligible expenditures of the 
        State for the fiscal year, but not more than the amount 
        allotted to the State under subsection (c) for the fiscal year.
            ``(2) Reimbursable percentage defined.--In paragraph (1), 
        the term `reimbursable percentage' means, with respect to a 
        fiscal year--
                    ``(A) 85 percent, in the case of fiscal year 2010;
                    ``(B) 80 percent, in the case of fiscal year 2011; 
                or
                    ``(C) 75 percent, in the case of fiscal year 2012 
                and any succeeding fiscal year.
    ``(f) Eligible Expenditures.--
            ``(1) In general.--In this section, the term `eligible 
        expenditures'--
                    ``(A) means expenditures to provide voluntary home 
                visitation for as many families with young children 
                (under the age of school entry) and families expecting 
                children as practicable, through the implementation or 
                expansion of high quality home visitation programs 
                that--
                            ``(i) adhere to clear evidence-based models 
                        of home visitation that have demonstrated 
                        positive effects on important program-
                        determined child and parenting outcomes, such 
                        as reducing abuse and neglect and improving 
                        child health and development;
                            ``(ii) employ well-trained and competent 
                        staff, maintain high quality supervision, 
                        provide for ongoing training and professional 
                        development, and show strong organizational 
                        capacity to implement such a program;
                            ``(iii) establish appropriate linkages and 
                        referrals to other community resources and 
                        supports;
                            ``(iv) monitor fidelity of program 
                        implementation to ensure that services are 
                        delivered according to the specified model; and
                            ``(v) provide parents with--
                                    ``(I) knowledge of age-appropriate 
                                child development in cognitive, 
                                language, social, emotional, and motor 
                                domains (including knowledge of second 
                                language acquisition, in the case of 
                                English language learners);
                                    ``(II) knowledge of realistic 
                                expectations of age-appropriate child 
                                behaviors;
                                    ``(III) knowledge of health and 
                                wellness issues for children and 
                                parents;
                                    ``(IV) modeling, consulting, and 
                                coaching on parenting practices;
                                    ``(V) skills to interact with their 
                                child to enhance age-appropriate 
                                development;
                                    ``(VI) skills to recognize and seek 
                                help for issues related to health, 
                                developmental delays, and social, 
                                emotional, and behavioral skills; and
                                    ``(VII) activities designed to help 
                                parents become full partners in the 
                                education of their children;
                    ``(B) includes expenditures for training, technical 
                assistance, and evaluations related to the programs; 
                and
                    ``(C) does not include any expenditure with respect 
                to which a State has submitted a claim for payment 
                under any other provision of Federal law.
            ``(2) Priority funding for programs with strongest 
        evidence.--
                    ``(A) In general.--The expenditures, described in 
                paragraph (1), of a State for a fiscal year that are 
                attributable to the cost of programs that do not adhere 
                to a model of home visitation with the strongest 
                evidence of effectiveness shall not be considered 
                eligible expenditures for the fiscal year to the extent 
                that the total of the expenditures exceeds the 
                applicable percentage for the fiscal year of the 
                allotment of the State under subsection (c) for the 
                fiscal year.
                    ``(B) Applicable percentage defined.--In 
                subparagraph (A), the term `applicable percentage' 
                means, with respect to a fiscal year--
                            ``(i) 60 percent for fiscal year 2010;
                            ``(ii) 55 percent for fiscal year 2011;
                            ``(iii) 50 percent for fiscal year 2012;
                            ``(iv) 45 percent for fiscal year 2013; or
                            ``(v) 40 percent for fiscal year 2014.
    ``(g) No Use of Other Federal Funds for State Match.--A State to 
which a grant is made under this section may not expend any Federal 
funds to meet the State share of the cost of an eligible expenditure 
for which the State receives a payment under this section.
    ``(h) Waiver Authority.--
            ``(1) In general.--The Secretary may waive or modify the 
        application of any provision of this section, other than 
        subsection (b) or (f), to an Indian tribe if the failure to do 
        so would impose an undue burden on the Indian tribe.
            ``(2) Special rule.--An Indian tribe is deemed to meet the 
        requirement of subsection (d) for purposes of subsections (c) 
        and (e) if--
                    ``(A) the Secretary waives the requirement; or
                    ``(B) the Secretary modifies the requirement, and 
                the Indian tribe meets the modified requirement.
    ``(i) State Reports.--Each State to which a grant is made under 
this section shall submit to the Secretary an annual report on the 
progress made by the State in addressing the purposes of this section. 
Each such report shall include a description of--
            ``(1) the services delivered by the programs that received 
        funds from the grant;
            ``(2) the characteristics of each such program, including 
        information on the service model used by the program and the 
        performance of the program;
            ``(3) the characteristics of the providers of services 
        through the program, including staff qualifications, work 
        experience, and demographic characteristics;
            ``(4) the characteristics of the recipients of services 
        provided through the program, including the number of the 
        recipients, the demographic characteristics of the recipients, 
        and family retention;
            ``(5) the annual cost of implementing the program, 
        including the cost per family served under the program;
            ``(6) the outcomes experienced by recipients of services 
        through the program;
            ``(7) the training and technical assistance provided to aid 
        implementation of the program, and how the training and 
        technical assistance contributed to the outcomes achieved 
        through the program;
            ``(8) the indicators and methods used to monitor whether 
        the program is being implemented as designed; and
            ``(9) other information as determined necessary by the 
        Secretary.
    ``(j) Evaluation.--
            ``(1) In general.--The Secretary shall, by grant or 
        contract, provide for the conduct of an independent evaluation 
        of the effectiveness of home visitation programs receiving 
        funds provided under this section, which shall examine the 
        following:
                    ``(A) The effect of home visitation programs on 
                child and parent outcomes, including child 
                maltreatment, child health and development, school 
                readiness, and links to community services.
                    ``(B) The effectiveness of home visitation programs 
                on different populations, including the extent to which 
                the ability of programs to improve outcomes varies 
                across programs and populations.
            ``(2) Reports to the congress.--
                    ``(A) Interim report.--Within 3 years after the 
                date of the enactment of this section, the Secretary 
                shall submit to the Congress an interim report on the 
                evaluation conducted pursuant to paragraph (1).
                    ``(B) Final report.--Within 5 years after the date 
                of the enactment of this section, the Secretary shall 
                submit to the Congress a final report on the evaluation 
                conducted pursuant to paragraph (1).
    ``(k) Annual Reports to the Congress.--The Secretary shall submit 
annually to the Congress a report on the activities carried out using 
funds made available under this section, which shall include a 
description of the following:
            ``(1) The high need communities targeted by States for 
        programs carried out under this section.
            ``(2) The service delivery models used in the programs 
        receiving funds provided under this section.
            ``(3) The characteristics of the programs, including--
                    ``(A) the qualifications and demographic 
                characteristics of program staff; and
                    ``(B) recipient characteristics including the 
                number of families served, the demographic 
                characteristics of the families served, and family 
                retention and duration of services.
            ``(4) The outcomes reported by the programs.
            ``(5) The research-based instruction, materials, and 
        activities being used in the activities funded under the grant.
            ``(6) The training and technical activities, including on-
        going professional development, provided to the programs.
            ``(7) The annual costs of implementing the programs, 
        including the cost per family served under the programs.
            ``(8) The indicators and methods used by States to monitor 
        whether the programs are being been implemented as designed.
    ``(l) Reservations of Funds.--From the amounts appropriated for a 
fiscal year under subsection (m), the Secretary shall reserve--
            ``(1) an amount equal to 5 percent of the amounts to pay 
        the cost of the evaluation provided for in subsection (j), and 
        the provision to States of training and technical assistance, 
        including the dissemination of best practices in early 
        childhood home visitation; and
            ``(2) after making the reservation required by paragraph 
        (1), an amount equal to 3 percent of the amount so 
        appropriated, to pay for grants to Indian tribes under this 
        section.
    ``(m) Appropriations.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there is appropriated to the 
Secretary to carry out this section--
            ``(1) $50,000,000 for fiscal year 2010;
            ``(2) $100,000,000 for fiscal year 2011;
            ``(3) $150,000,000 for fiscal year 2012;
            ``(4) $200,000,000 for fiscal year 2013; and
            ``(5) $250,000,000 for fiscal year 2014.
    ``(n) Indian Tribes Treated as States.--In this section, paragraphs 
(4), (5), and (6) of section 431(a) shall apply.''.

SEC. 1905. IMPROVED COORDINATION AND PROTECTION FOR DUAL ELIGIBLES.

    Title XI of the Social Security Act is amended by inserting after 
section 1150 the following new section:

       ``improved coordination and protection for dual eligibles

    ``Sec. 1150A.  (a) In General.--The Secretary shall provide, 
through an identifiable office or program within the Centers for 
Medicare & Medicaid Services, for a focused effort to provide for 
improved coordination between Medicare and Medicaid and protection in 
the case of dual eligibles (as defined in subsection (e)). The office 
or program shall--
            ``(1) review Medicare and Medicaid policies related to 
        enrollment, benefits, service delivery, payment, and grievance 
        and appeals processes under parts A and B of title XVIII, under 
        the Medicare Advantage program under part C of such title, and 
        under title XIX;
            ``(2) identify areas of such policies where better 
        coordination and protection could improve care and costs; and
            ``(3) issue guidance to States regarding improving such 
        coordination and protection.
    ``(b) Elements.--The improved coordination and protection under 
this section shall include efforts--
            ``(1) to simplify access of dual eligibles to benefits and 
        services under Medicare and Medicaid;
            ``(2) to improve care continuity for dual eligibles and 
        ensure safe and effective care transitions;
            ``(3) to harmonize regulatory conflicts between Medicare 
        and Medicaid rules with regard to dual eligibles; and
            ``(4) to improve total cost and quality performance under 
        Medicare and Medicaid for dual eligibles.
    ``(c) Responsibilities.--In carrying out this section, the 
Secretary shall provide for the following:
            ``(1) An examination of Medicare and Medicaid payment 
        systems to develop strategies to foster more integrated and 
        higher quality care.
            ``(2) Development of methods to facilitate access to post-
        acute and community-based services and to identify actions that 
        could lead to better coordination of community-based care.
            ``(3) A study of enrollment of dual eligibles in the 
        Medicare Savings Program (as defined in section 1144(c)(7)), 
        under Medicaid, and in the low-income subsidy program under 
        section 1860D-14 to identify methods to more efficiently and 
        effectively reach and enroll dual eligibles.
            ``(4) An assessment of communication strategies for dual 
        eligibles to determine whether additional informational 
        materials or outreach is needed, including an assessment of the 
        Medicare website, 1-800-MEDICARE, and the Medicare handbook.
            ``(5) Research and evaluation of areas where service 
        utilization, quality, and access to cost sharing protection 
        could be improved and an assessment of factors related to 
        enrollee satisfaction with services and care delivery.
            ``(6) Collection (and making available to the public) of 
        data and a database that describe the eligibility, benefit and 
        cost-sharing assistance available to dual eligibles by State.
            ``(7) Monitoring total combined Medicare and Medicaid 
        program costs in serving dual eligibles and making 
        recommendations for optimizing total quality and cost 
        performance across both programs.
            ``(8) Coordination of activities relating to Medicare 
        Advantage plans under 1859(b)(6)(B)(ii) and Medicaid.
    ``(d) Periodic Reports.--Not later than 1 year after the date of 
the enactment of this section and every 3 years thereafter the 
Secretary shall submit to Congress a report on progress in activities 
conducted under this section.
    ``(e) Definitions.--In this section:
            ``(1) Dual eligible.--The term `dual eligible' means an 
        individual who is dually eligible for benefits under title 
        XVIII, and medical assistance under title XIX, including such 
        individuals who are eligible for benefits under the Medicare 
        Savings Program (as defined in section 1144(c)(7)).
            ``(2) Medicare; medicaid.--The terms `Medicare' and 
        `Medicaid' mean the programs under titles XVIII and XIX, 
        respectively.''.

         SUBDIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT

SEC. 2001. TABLE OF CONTENTS; REFERENCES.

    (a) Table of Contents.--The table of contents of 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

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.
   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.
    (b) References.--Except as otherwise specified, whenever in this 
subdivision an amendment is expressed in terms of an amendment to a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of the Public Health Service Act 
(42 U.S.C. 201 et seq.).

SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

    (a) Establishment of Funds.--
            (1) In general.--There is established a fund to be known as 
        the ``Public Health Investment Fund'' (referred to in this 
        section as the ``Fund'').
            (2) Funding.--
                    (A) There shall be deposited into the Fund--
                            (i) for fiscal year 2010, $4,600,000,000;
                            (ii) for fiscal year 2011, $5,600,000,000;
                            (iii) for fiscal year 2012, $6,900,000,000;
                            (iv) for fiscal year 2013, $7,800,000,000;
                            (v) for fiscal year 2014, $9,000,000,000;
                            (vi) for fiscal year 2015, $9,400,000,000;
                            (vii) for fiscal year 2016, 
                        $10,100,000,000;
                            (viii) for fiscal year 2017, 
                        $10,800,000,000;
                            (ix) for fiscal year 2018, $11,800,000,000; 
                        and
                            (x) for fiscal year 2019, $12,700,000,000.
                    (B) Amounts deposited into the Fund shall be 
                derived from general revenues of the Treasury.
    (b) Authorization of Appropriations From the Fund.--
            (1) New funding.--
                    (A) In general.--Amounts in the Fund are authorized 
                to be appropriated by the Committees on Appropriations 
                of the House of Representatives and the Senate for 
                carrying out activities under designated public health 
                provisions.
                    (B) Designated provisions.--For purposes of this 
                paragraph, the term ``designated public health 
                provisions'' means the provisions for which amounts are 
                authorized to be appropriated under section 330(s), 
                338(c), 338H-1, 799C, 872, or 3111 of the Public Health 
                Service Act, as added by this subdivision.
            (2) Baseline funding.--
                    (A) In general.--Amounts in the Fund are authorized 
                to be appropriated (as described in paragraph (1)) for 
                a fiscal year only if (excluding any amounts in or 
                appropriated from the Fund)--
                            (i) the amounts specified in subparagraph 
                        (B) for the fiscal year involved are equal to 
                        or greater than the amounts specified in 
                        subparagraph (B) for fiscal year 2008; and
                            (ii) the amounts appropriated, out of the 
                        general fund of the Treasury, to the Prevention 
                        and Wellness Trust under section 3111 of the 
                        Public Health Service Act, as added by this 
                        subdivision, for the fiscal year involved are 
                        equal to or greater than the funds--
                                    (I) appropriated under the heading 
                                ``Prevention and Wellness Fund'' in 
                                title VIII of division A of the 
                                American Recovery and Reinvestment Act 
                                of 2009 (Public Law 111-5); and
                                    (II) allocated by the second 
                                proviso under such heading for 
                                evidence-based clinical and community-
                                based prevention and wellness 
                                strategies.
                    (B) Amounts specified.--The amounts specified in 
                this subparagraph, with respect to a fiscal year, are 
                the amounts appropriated for the following:
                            (i) Community health centers (including 
                        funds appropriated under the authority of 
                        section 330 of the Public Health Service Act 
                        (42 U.S.C. 254b)).
                            (ii) The National Health Service Corps 
                        Program (including funds appropriated under the 
                        authority of section 338 of such Act (42 U.S.C. 
                        254k)).
                            (iii) The National Health Service Corps 
                        Scholarship and Loan Repayment Programs 
                        (including funds appropriated under the 
                        authority of section 338H of such Act (42 
                        U.S.C. 254q)).
                            (iv) Primary care loan funds (including 
                        funds appropriated for schools of medicine or 
                        osteopathic medicine under the authority of 
                        section 735(f) of such Act (42 U.S.C. 
                        292y(f))).
                            (v) Primary care education programs 
                        (including funds appropriated under the 
                        authority of sections 736, 740, 741, and 747 of 
                        such Act (42 U.S.C. 293, 293d, and 293k)).
                            (vi) Sections 761 and 770 of such Act (42 
                        U.S.C. 294n and 295e).
                            (vii) Nursing workforce development 
                        (including funds appropriated under the 
                        authority of title VIII of such Act (42 U.S.C. 
                        296 et seq.)).
                            (viii) The National Center for Health 
                        Statistics (including funds appropriated under 
                        the authority of sections 304, 306, 307, and 
                        308 of such Act (42 U.S.C. 242b, 242k, 242l, 
                        and 242m)).
                            (ix) The Agency for Healthcare Research and 
                        Quality (including funds appropriated under the 
                        authority of title IX of such Act (42 U.S.C. 
                        299 et seq.)).
            (3) Budgetary implications.--Amounts appropriated under 
        this section, and outlays flowing from such appropriations, 
        shall not be taken into account for purposes of any budget 
        enforcement procedures including allocations under section 
        302(a) and (b) of the Balanced Budget and Emergency Deficit 
        Control Act and budget resolutions for fiscal years during 
        which appropriations are made from the Fund.

                   TITLE I--COMMUNITY HEALTH CENTERS

SEC. 2101. INCREASED FUNDING.

    Section 330 of the Public Health Service Act (42 U.S.C. 254b) is 
amended--
            (1) in subsection (r)(1)--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting at the end the following:
                    ``(F) Such sums as may be necessary for each of 
                fiscal years 2013 and 2019.''; and
            (2) by inserting after subsection (r) the following:
    ``(s) Additional Funding.--For the purpose of carrying out this 
section, in addition to any other amounts authorized to be appropriated 
for such purpose, there are authorized to be appropriated, out of any 
monies in the Public Health Investment Fund, the following:
            ``(1) For fiscal year 2010, $1,000,000,000.
            ``(2) For fiscal year 2011, $1,500,000,000.
            ``(3) For fiscal year 2012, $2,500,000,000.
            ``(4) For fiscal year 2013, $3,000,000,000.
            ``(5) For fiscal year 2014, $4,000,000,000.
            ``(6) For fiscal year 2015, $4,400,000,000.
            ``(7) For fiscal year 2016, $4,800,000,000.
            ``(8) For fiscal year 2017, $5,300,000,000.
            ``(9) For fiscal year 2018, $5,900,000,000.
            ``(10) For fiscal year 2019, $6,400,000,000.''.

                          TITLE II--WORKFORCE

                   Subtitle A--Primary Care Workforce

                 PART 1--NATIONAL HEALTH SERVICE CORPS

SEC. 2201. NATIONAL HEALTH SERVICE CORPS.

    (a) Fulfillment of Obligated Service Requirement Through Half-Time 
Service.--
            (1) Waivers.--Subsection (i) of section 331 (42 U.S.C. 
        254d) is amended--
                    (A) in paragraph (1), by striking ``In carrying out 
                subpart III'' and all that follows through the period 
                and inserting ``In carrying out subpart III, the 
                Secretary may, in accordance with this subsection, 
                issue waivers to individuals who have entered into a 
                contract for obligated service under the Scholarship 
                Program or the Loan Repayment Program under which the 
                individuals are authorized to satisfy the requirement 
                of obligated service through providing clinical 
                practice that is half-time.'';
                    (B) in paragraph (2)--
                            (i) in subparagraphs (A)(ii) and (B), by 
                        striking ``less than full time'' each place it 
                        appears and inserting ``half time'';
                            (ii) in subparagraphs (C) and (F), by 
                        striking ``less than full-time service'' each 
                        place it appears and inserting ``half-time 
                        service''; and
                            (iii) by amending subparagraphs (D) and (E) 
                        to read as follows:
            ``(D) the entity and the Corps member agree in writing that 
        the Corps member will perform half-time clinical practice;
            ``(E) the Corps member agrees in writing to fulfill all of 
        the service obligations under section 338C through half-time 
        clinical practice and either--
                    ``(i) double the period of obligated service; or
                    ``(ii) in the case of contracts entered into under 
                section 338B, accept a minimum service obligation of 2 
                years with an award amount equal to 50 percent of the 
                amount that would otherwise be payable for full-time 
                service; and''; and
                    (C) in paragraph (3), by striking ``In evaluating a 
                demonstration project described in paragraph (1)'' and 
                inserting ``In evaluating waivers issued under 
                paragraph (1)''.
            (2) Definitions.--Subsection (j) of section 331 (42 U.S.C. 
        254d) is amended by adding at the end the following:
            ``(5) The terms `full time' and `full-time' mean a minimum 
        of 40 hours per week in a clinical practice, for a minimum of 
        45 weeks per year.
            ``(6) The terms `half time' and `half-time' mean a minimum 
        of 20 hours per week (not to exceed 39 hours per week) in a 
        clinical practice, for a minimum of 45 weeks per year.''.
    (b) Reappointment to National Advisory Council.--Section 337(b)(1) 
(42 U.S.C. 254j(b)(1)) is amended by striking ``Members may not be 
reappointed to the Council.''.
    (c) Loan Repayment Amount.--Section 338B(g)(2)(A) is amended (42 
U.S.C. 254l-1(g)(2)(A)) by striking ``$35,000'' and inserting 
``$50,000, plus, beginning with fiscal year 2012, an amount determined 
by the Secretary on an annual basis to reflect inflation,''.
    (d) Treatment of Teaching as Obligated Service.--Subsection (a) of 
section 338C (42 U.S.C. 254m) is amended by adding at the end the 
following: ``The Secretary may treat teaching as clinical practice for 
up to 20 percent of such period of obligated service.''.

SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.

    (a) National Health Service Corps Program.--Section 338 (42 U.S.C. 
254k) is amended--
            (1) in subsection (a), by striking ``2012'' and inserting 
        ``2019''; and
            (2) by adding at the end the following:
    ``(c) For the purpose of carrying out this subpart, in addition to 
any other amounts authorized to be appropriated for such purpose, there 
are authorized to be appropriated, out of any monies in the Public 
Health Investment Fund, the following:
            ``(1) $63,000,000 for fiscal year 2010.
            ``(2) $66,000,000 for fiscal year 2011.
            ``(3) $70,000,000 for fiscal year 2012.
            ``(4) $73,000,000 for fiscal year 2013.
            ``(5) $77,000,000 for fiscal year 2014.
            ``(6) $81,000,000 for fiscal year 2015.
            ``(7) $85,000,000 for fiscal year 2016.
            ``(8) $89,000,000 for fiscal year 2017.
            ``(9) $94,000,000 for fiscal year 2018.
            ``(10) $98,000,000 for fiscal year 2019.''.
    (b) Scholarship and Loan Repayment Programs.--Subpart III of part D 
of title III of the Public Health Service Act (42 U.S.C. 254l et seq.) 
is amended--
            (1) in section 338H(a)--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) for fiscal years 2013 and 2019, such sums as may be 
        necessary.''; and
            (2) by inserting after section 338H the following:

``SEC. 338H-1. ADDITIONAL FUNDING.

    ``For the purpose of carrying out this subpart, in addition to any 
other amounts authorized to be appropriated for such purpose, there are 
authorized to be appropriated, out of any monies in the Public Health 
Investment Fund, the following:
            ``(1) $254,000,000 for fiscal year 2010.
            ``(2) $266,000,000 for fiscal year 2011.
            ``(3) $278,000,000 for fiscal year 2012.
            ``(4) $292,000,000 for fiscal year 2013.
            ``(5) $306,000,000 for fiscal year 2014.
            ``(6) $321,000,000 for fiscal year 2015.
            ``(7) $337,000,000 for fiscal year 2016.
            ``(8) $354,000,000 for fiscal year 2017.
            ``(9) $372,000,000 for fiscal year 2018.
            ``(10) $391,000,000 for fiscal year 2019.''.

            PART 2--PROMOTION OF PRIMARY CARE AND DENTISTRY

SEC. 2211. FRONTLINE HEALTH PROVIDERS.

    Part D of title III (42 U.S.C. 254b et seq.) is amended by adding 
at the end the following:

             ``Subpart XI--Health Professional Needs Areas

``SEC. 340H. IN GENERAL.

    ``(a) Program.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration, shall establish a 
program, to be known as the Frontline Health Providers Loan Repayment 
Program, to address unmet health care needs in health professional 
needs areas through loan repayments under section 340I.
    ``(b) Designation of Health Professional Needs Areas.--
            ``(1) In general.--In this subpart, the term `health 
        professional needs area' means an area, population, or facility 
        that is designated by the Secretary in accordance with 
        paragraph (2).
            ``(2) Designation.--To be designated by the Secretary as a 
        health professional needs area under this subpart:
                    ``(A) In the case of an area, the area must be a 
                rational area for the delivery of health services.
                    ``(B) The area, population, or facility must have, 
                in one or more health disciplines, specialties, or 
                subspecialties for the population served, as determined 
                by the Secretary--
                            ``(i) insufficient capacity of health 
                        professionals; or
                            ``(ii) high needs for health services.
                    ``(C) With respect to the delivery of primary 
                health services, the area, population, or facility must 
                not include a health professional shortage area (as 
                designated under section 332), except that the area, 
                population, or facility may include such a health 
                professional shortage area to which no member of the 
                National Health Service Corps is currently assigned.
    ``(c) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1) hold a degree in a course of study or program 
        (approved by the Secretary) from a school defined in section 
        799B(1)(A) (other than a school of public health);
            ``(2) hold a degree in a course of study or program 
        (approved by the Secretary) from a school or program defined in 
        subparagraph (C), (D), or (E)(4) of section 799B(1), as 
        designated by the Secretary;
            ``(3) be enrolled as a full-time student--
                    ``(A) in a school or program defined in 
                subparagraph (C), (D), or (E)(4) of section 799B(1), as 
                designated by the Secretary, or a school described in 
                paragraph (1); and
                    ``(B) in the final year of a course of study or 
                program, offered by such school or program and approved 
                by the Secretary, leading to a degree in a discipline 
                referred to in subparagraph (A) (other than a graduate 
                degree in public health), (C), (D), or (E)(4) of 
                section 799B(1);
            ``(4) be a practitioner described in section 1842(b)(18)(C) 
        or 1848(k)(3)(B)(iii) or (iv) of the Social Security Act; or
            ``(5) be a practitioner in the field of respiratory 
        therapy, medical technology, or radiologic technology.
    ``(d) Definition.--In this subpart, the term `primary health 
services' has the meaning given to such term in section 331(a)(3)(D).

``SEC. 340I. LOAN REPAYMENTS.

    ``(a) Loan Repayments.--The Secretary, acting through the 
Administrator of the Health Resources and Services Administration, 
shall enter into contracts with individuals under which--
            ``(1) the individual agrees--
                    ``(A) to serve as a full-time primary health 
                services provider or as a full-time or part-time 
                provider of other health services for a period of time 
                equal to 2 years or such longer period as the 
                individual may agree to;
                    ``(B) to serve in a health professional needs area 
                in a health discipline, specialty, or a subspecialty 
                for which the area, population, or facility is 
                designated as a health professional needs area under 
                section 340H; and
                    ``(C) in the case of an individual described in 
                subsection 340H(c)(3) who is in the final year of study 
                and who has accepted employment as primary health 
                services provider or provider of other health services 
                in accordance with subparagraphs (A) and (B), to 
                complete the education or training and maintain an 
                acceptable level of academic standing (as determined by 
                the educational institution offering the course of 
                study or training); and
            ``(2) the Secretary agrees to pay, for each year of such 
        service, an amount on the principal and interest of the 
        undergraduate or graduate educational loans (or both) of the 
        individual that is not more than 50 percent of the average 
        award made under the National Health Service Corps Loan 
        Repayment Program under subpart III in that year.
    ``(b) Practice Setting.--A contract entered into under this section 
shall allow the individual receiving the loan repayment to satisfy the 
service requirement described in subsection (a)(1) through employment 
in a solo or group practice, a clinic, an accredited public or private 
nonprofit hospital, or any other health care entity, as deemed 
appropriate by the Secretary.
    ``(c) Application of Certain Provisions.--The provisions of subpart 
III of part D shall, except as inconsistent with this section, apply to 
the loan repayment program under this subpart in the same manner and to 
the same extent as such provisions apply to the National Health Service 
Corps Loan Repayment Program established under section 338B.
    ``(d) Insufficient Number of Applicants.--If there are an 
insufficient number of applicants for loan repayments under this 
section to obligate all appropriated funds, the Secretary shall 
transfer the unobligated funds to the National Health Service Corps for 
the purpose of--
            ``(1) recruitment of sufficient applicants for the National 
        Health Service Corps for the following year; or
            ``(2) making additional loan repayments under section 338B 
        if there is an excess number of qualified applicants for loan 
        repayments under such section.

``SEC. 340J. REPORT.

    ``The Secretary shall submit to the Congress an annual report on 
the program carried out under this subpart.

``SEC. 340K. ALLOCATION.

    ``Of the amount of funds obligated under this subpart each fiscal 
year for loan repayments--
            ``(1) 90 percent shall be for physicians and other health 
        professionals providing primary health services; and
            ``(2) 10 percent shall be for health professionals not 
        described in paragraph (1).''.

SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.

    (a) Loan Provisions.--Section 722 (42 U.S.C. 292r) is amended by 
striking subsection (e) and inserting the following:
    ``(e) Rate of Interest.--Such loans shall bear interest, on the 
unpaid balance of the loan, computed only for periods for which the 
loan is repayable, at the rate of 2 percentage points less than the 
applicable rate of interest described in section 427A(l)(1) of the 
Higher Education Act of 1965 per year.''.
    (b) Medical Schools and Primary Health Care.--Subsection (a) of 
section 723 (42 U.S.C. 292s) is amended--
            (1) in paragraph (1), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) to practice in such care for 10 years 
                (including residency training in primary health care) 
                or through the date on which the loan is repaid in 
                full, whichever occurs first.''; and
            (2) by striking paragraph (3) and inserting the following:
            ``(3) Noncompliance by student.--If an individual fails to 
        comply with an agreement entered into pursuant to paragraph 
        (1), such agreement shall provide that the total interest to be 
        paid on the loan, over the course of the loan period, shall 
        equal the total amount of interest that would have been 
        incurred by the individual if, from the outset of the loan, the 
        loan was repayable at the rate of interest described in section 
        427A(l)(1) of the Higher Education Act of 1965 per year instead 
        of the rate of interest described in section 722(e).''.
    (c) Student Loan Guidelines.--
            (1) In general.--Section 735 (42 U.S.C. 292y) is amended--
                    (A) by redesignating subsection (f) as subsection 
                (g); and
                    (B) by inserting after subsection (e) the 
                following:
    ``(f) Determination of Financial Need.--The Secretary--
            ``(1) may require, or authorize a school or other entity to 
        require, the submission of financial information to determine 
        the financial resources available to any individual seeking 
        assistance under this subpart; and
            ``(2) shall take into account the extent to which such 
        individual is financially independent in determining whether to 
        require or authorize the submission of such information 
        regarding such individual's family members.''.
            (2) Revised guidelines.--The Secretary of Health and Human 
        Services shall--
                    (A) strike the second sentence of section 57.206(b) 
                of title 42, Code of Federal Regulations; and
                    (B) make such other revisions to guidelines and 
                regulations in effect as of the date of the enactment 
                of this Act as may be necessary for consistency with 
                the amendments made by paragraph (1).

SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDICINE, 
              GENERAL PEDIATRICS, GERIATRICS, AND PHYSICIAN 
              ASSISTANTSHIP.

    Section 747 (42 U.S.C. 293k) is amended--
            (1) by amending the section heading to read as follows: 
        ``primary care training and enhancement'';
            (2) by redesignating subsection (e) as subsection (f); and
            (3) by striking subsections (a) through (d) and inserting 
        the following:
    ``(a) Program.--The Secretary shall establish a primary care 
training and capacity building program consisting of awarding grants 
and contracts under subsections (b) and (c).
    ``(b) Support and Development of Primary Care Training Programs.--
            ``(1) In general.--The Secretary shall make grants to, or 
        enter into contracts with, eligible entities--
                    ``(A) to plan, develop, operate, or participate in 
                an accredited professional training program, including 
                an accredited residency or internship program, in the 
                field of family medicine, general internal medicine, 
                general pediatrics, or geriatrics for medical students, 
                interns, residents, or practicing physicians;
                    ``(B) to provide financial assistance in the form 
                of traineeships and fellowships to medical students, 
                interns, residents, or practicing physicians, who are 
                participants in any such program, and who plan to 
                specialize or work in family medicine, general internal 
                medicine, general pediatrics, or geriatrics;
                    ``(C) to plan, develop, operate, or participate in 
                an accredited program for the training of physicians 
                who plan to teach in family medicine, general internal 
                medicine, general pediatrics, or geriatrics training 
                programs including in community-based settings;
                    ``(D) to provide financial assistance in the form 
                of traineeships and fellowships to practicing 
                physicians who are participants in any such programs 
                and who plan to teach in a family medicine, general 
                internal medicine, general pediatrics, or geriatrics 
                training program; and
                    ``(E) to plan, develop, operate, or participate in 
                an accredited program for physician assistant 
                education, and for the training of individuals who plan 
                to teach in programs to provide such training.
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under paragraph (1), an entity shall be--
                    ``(A) an accredited school of medicine or 
                osteopathic medicine, public or nonprofit private 
                hospital, or physician assistant training program;
                    ``(B) a public or private nonprofit entity; or
                    ``(C) a consortium of 2 or more entities described 
                in subparagraphs (A) and (B).
    ``(c) Capacity Building in Primary Care.--
            ``(1) In general.--The Secretary shall make grants to or 
        enter into contracts with eligible entities to establish, 
        maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                the specialties of family medicine, general internal 
                medicine, general pediatrics, or geriatrics; or
                    ``(B) programs that improve clinical teaching in 
                such specialties.
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under paragraph (1), an entity shall be an accredited school of 
        medicine or osteopathic medicine.
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of health care professionals who 
        provide primary care.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) A high rate of placing graduates in practice settings 
        having the principal focus of serving in underserved areas or 
        populations experiencing health disparities (including serving 
        patients eligible for medical assistance under title XIX of the 
        Social Security Act or for child health assistance under title 
        XXI of such Act or those with special health care needs).
            ``(4) Supporting teaching programs that address the health 
        care needs of vulnerable populations.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definition.--In this section, the term `health disparities' 
has the meaning given the term in section 3171.''.

SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

    Title VII (42 U.S.C. 292 et seq.) is amended--
            (1) by redesignating section 748 as 749A; and
            (2) by inserting after section 747 the following:

``SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMUNITY-BASED SETTINGS.

    ``(a) Program.--The Secretary shall establish a program for the 
training of medical residents in community-based settings consisting of 
awarding grants or contracts under this section.
    ``(b) Development and Operation of Community-Based Programs.--The 
Secretary shall make grants to, or enter into contracts with, eligible 
entities--
            ``(1) to plan and develop a new primary care residency 
        training program, which may include--
                    ``(A) planning and developing curricula;
                    ``(B) recruiting and training residents and 
                faculty; and
                    ``(C) other activities designated to result in 
                accreditation of such a program; or
            ``(2) to operate or participate in an established primary 
        care residency training program, which may include--
                    ``(A) planning and developing curricula;
                    ``(B) recruitment and training of residents; and
                    ``(C) retention of faculty.
    ``(c) Eligible Entity.--To be eligible to receive a grant or 
contract under subsection (b), an entity shall--
            ``(1) be designated as a recipient of payment for the 
        direct costs of medical education under section 1886(k) of the 
        Social Security Act;
            ``(2) be designated as an approved teaching health center 
        under section 1502(d) of the America's Affordable Health 
        Choices Act of 2009 and continuing to participate in the 
        demonstration project under such section; or
            ``(3) be an applicant for designation described in 
        paragraph (1) or (2) and have demonstrated to the Secretary 
        appropriate involvement of an accredited teaching hospital to 
        carry out the inpatient responsibilities associated with a 
        primary care residency training program.
    ``(d) Preferences.--In awarding grants and contracts under 
paragraph (1) or (2) of subsection (b), the Secretary shall give 
preference to entities that--
            ``(1) support teaching programs that address the health 
        care needs of vulnerable populations; or
            ``(2) are a Federally qualified health center (as defined 
        in section 1861(aa)(4) of the Social Security Act) or a rural 
        health clinic (as defined in section 1861(aa)(2) of such Act).
    ``(e) Additional Preferences for Established Programs.--In awarding 
grants and contracts under subsection (b)(2), the Secretary shall give 
preference to entities that have a demonstrated record of training--
            ``(1) a high or significantly improved percentage of health 
        care professionals who provide primary care;
            ``(2) individuals who are from underrepresented minority 
        groups or disadvantaged backgrounds; or
            ``(3) individuals who practice in settings having the 
        principal focus of serving underserved areas or populations 
        experiencing health disparities (including serving patients 
        eligible for medical assistance under title XIX of the Social 
        Security Act or for child health assistance under title XXI of 
        such Act or those with special health care needs).
    ``(f) Period of Awards.--
            ``(1) In general.--The period of a grant or contract under 
        this section--
                    ``(A) shall not exceed 2 years for awards under 
                subsection (b)(1); and
                    ``(B) shall not exceed 5 years for awards under 
                subsection (b)(2).
            ``(2) Special rules.--
                    ``(A) An award of a grant or contract under 
                subsection (b)(1) shall not be renewed.
                    ``(B) The period of a grant or contract awarded to 
                an entity under subsection (b)(2) shall not overlap 
                with the period of any grant or contact awarded to the 
                same entity under subsection (b)(1).
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(h) Definitions.--In this section:
            ``(1) Primary care residency training program.--The term 
        `primary care residency training program' means an approved 
        medical residency training program described in section 
        1886(h)(5)(A) of the Social Security Act that is--
                    ``(A) in the case of entities seeking awards under 
                subsection (b)(1), actively applying to be accredited 
                by the Accreditation Council for Graduate Medical 
                Education; or
                    ``(B) in the case of entities seeking awards under 
                subsection (b)(2), so accredited.
            ``(2) Health disparities.--The term `health disparities' 
        has the meaning given the term in section 3171.''.

SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS 
              AND DENTAL HYGIENISTS.

    Title VII (42 U.S.C. 292 et seq.) is amended--
            (1) in section 791(a)(1), by striking ``747 and 750'' and 
        inserting ``747, 749, and 750''; and
            (2) by inserting after section 748, as added, the 
        following:

``SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTS 
              AND DENTAL HYGIENISTS.

    ``(a) Program.--The Secretary shall establish a dental medicine 
training program consisting of awarding grants and contracts under this 
section.
    ``(b) Support and Development of Dental Training Programs.--The 
Secretary shall make grants to, or enter into contracts with, eligible 
entities--
            ``(1) to plan, develop, operate, or participate in an 
        accredited professional training program for oral health 
        professionals;
            ``(2) to provide financial assistance to oral health 
        professionals who are in need thereof, who are participants in 
        any such program, and who plan to work in general, pediatric, 
        or public heath dentistry, or dental hygiene;
            ``(3) to plan, develop, operate, or participate in a 
        program for the training of oral health professionals who plan 
        to teach in general, pediatric, or public health dentistry, or 
        dental hygiene;
            ``(4) to provide financial assistance in the form of 
        traineeships and fellowships to oral health professionals who 
        plan to teach in general, pediatric, or public health dentistry 
        or dental hygiene;
            ``(5) to establish, maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                the specialties of general, pediatric, or public health 
                dentistry; or
                    ``(B) programs that improve clinical teaching in 
                such specialties;
            ``(6) to plan, develop, operate, or participate in 
        predoctoral and postdoctoral training in general, pediatric, or 
        public health dentistry programs, or training for dental 
        hygienists;
            ``(7) to plan, develop, operate, or participate in a loan 
        repayment program for full-time faculty in a program of 
        general, pediatric, or public health dentistry; and
            ``(8) to provide technical assistance to pediatric dental 
        training programs in developing and implementing instruction 
        regarding the oral health status, dental care needs, and risk-
        based clinical disease management of all pediatric populations 
        with an emphasis on underserved children.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited school of dentistry, training program 
        in dental hygiene, or public or nonprofit private hospital;
            ``(2) a training program in dental hygiene at an accredited 
        institution of higher education;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of--
                    ``(A) 2 or more of the entities described in 
                paragraphs (1) through (3); and
                    ``(B) an accredited school of public health.
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of oral health professionals who 
        practice general, pediatric, or public health dentistry.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) A high rate of placing graduates in practice settings 
        having the principal focus of serving in underserved areas or 
        populations experiencing health disparities (including serving 
        patients eligible for medical assistance under title XIX of the 
        Social Security Act or for child health assistance under title 
        XXI of such Act or those with special health care needs).
            ``(4) Supporting teaching programs that address the dental 
        needs of vulnerable populations.
            ``(5) Providing instruction regarding the oral health 
        status, dental care needs, and risk-based clinical disease 
        management of all pediatric populations with an emphasis on 
        underserved children.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definition.--In this section:
            ``(1) The term `health disparities' has the meaning given 
        the term in section 3171.
            ``(2) The term `oral health professional' means an 
        individual training or practicing--
                    ``(A) in general dentistry, pediatric dentistry, 
                public health dentistry, or dental hygiene; or
                    ``(B) another dental medicine specialty, as deemed 
                appropriate by the Secretary.''.

SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Part F of title VII (42 U.S.C. 295j et seq.) is 
amended by adding at the end the following:

``SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

    ``(a) Promotion of Primary Care and Dentistry.--For the purpose of 
carrying out subpart XI of part D of title III and sections 723, 747, 
748, and 749, in addition to any other amounts authorized to be 
appropriated for such purpose, there is authorized to be appropriated, 
out of any monies in the Public Health Investment Fund, the following:
            ``(1) $240,000,000 for fiscal year 2010.
            ``(2) $253,000,000 for fiscal year 2011.
            ``(3) $265,000,000 for fiscal year 2012.
            ``(4) $278,000,000 for fiscal year 2013.
            ``(5) $292,000,000 for fiscal year 2014.
            ``(6) $307,000,000 for fiscal year 2015.
            ``(7) $322,000,000 for fiscal year 2016.
            ``(8) $338,000,000 for fiscal year 2017.
            ``(9) $355,000,000 for fiscal year 2018.
            ``(10) $373,000,000 for fiscal year 2019.''.
    (b) Existing Authorizations of Appropriations.--
            (1) Section 735.--Paragraph (1) of section 735(g), as so 
        redesignated, is amended by inserting ``and such sums as may be 
        necessary for subsequent years through fiscal year 2019'' 
        before the period at the end.
            (2) Section 747.--Subsection (f), as so redesignated, of 
        section 747 (42 U.S.C. 293k) is amended by striking ``2002'' 
        and inserting ``2019''.

                     Subtitle B--Nursing Workforce

SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) Definitions.--Section 801 (42 U.S.C. 296 et seq.) is amended--
            (1) in paragraph (1), by inserting ``nurse-managed health 
        centers'' after ``nursing centers,''; and
            (2) by adding at the end the following:
            ``(16) Nurse-managed health center.--The term `nurse-
        managed health center' means a nurse-practice arrangement, 
        managed by advanced practice nurses, that provides primary care 
        or wellness services to underserved or vulnerable populations 
        and is associated with an accredited school of nursing, 
        Federally qualified health center, or independent nonprofit 
        health or social services agency.''.
    (a) Grants for Health Professions Education.--Title VIII (42 U.S.C. 
296 et seq.) is amended by striking section 807.
    (b) Advanced Education Nursing Grants.--Section 811(f) (42 U.S.C. 
296j(f)) is amended--
            (1) by striking paragraph (2);
            (2) by redesignating paragraph (3) as paragraph (2); and
            (3) in paragraph (2), as so redesignated, by striking 
        ``that agrees'' and all that follows through the end and 
        inserting: ``that agrees to expend the award--
                    ``(A) to train advanced education nurses who will 
                practice in health professional shortage areas 
                designated under section 332; or
                    ``(B) to increase diversity among advanced 
                education nurses.''.
    (c) Nurse Education, Practice, and Retention Grants.--Section 831 
(42 U.S.C. 296p) is amended--
            (1) in subsection (b), by amending paragraph (3) to read as 
        follows:
            ``(3) providing coordinated care, quality care, and other 
        skills needed to practice nursing;''; and
            (2) by striking subsection (e) and redesignating 
        subsections (f) through (h) as subsections (e) through (g), 
        respectively.
    (d) Student Loans.--Subsection (a) of section 836 (42 U.S.C. 297b) 
is amended--
            (1) by striking ``$2,500'' and inserting ``$3,300'';
            (2) by striking ``$4,000'' and inserting ``$5,200'';
            (3) by striking ``$13,000'' and inserting ``$17,000''; and
            (4) by adding at the end the following: ``Beginning with 
        fiscal year 2012, the dollar amounts specified in this 
        subsection shall be adjusted by an amount determined by the 
        Secretary on an annual basis to reflect inflation.''.
    (e) Loan Repayment.--Section 846 (42 U.S.C. 297n) is amended--
            (1) in subsection (a), by amending paragraph (3) to read as 
        follows:
            ``(3) who enters into an agreement with the Secretary to 
        serve for a period of not less than 2 years--
                    ``(A) as a nurse at a health care facility with a 
                critical shortage of nurses; or
                    ``(B) as a faculty member at an accredited school 
                of nursing;''; and
            (2) in subsection (g)(1), by striking ``to provide health 
        services'' each place it appears and inserting ``to provide 
        health services or serve as a faculty member''.
    (f) Nurse Faculty Loan Program.--Paragraph (2) of section 846A(c) 
(42 U.S.C. 297n-1(c)) is amended by striking ``$30,000'' and all that 
follows through the semicolon and inserting ``$35,000, plus, beginning 
with fiscal year 2012, an amount determined by the Secretary on an 
annual basis to reflect inflation;''.
    (g) Public Service Announcements.--Title VIII (42 U.S.C. 296 et 
seq.) is amended by striking part H.
    (h) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296 
et seq.) is amended--
            (1) by redesignating section 810 (relating to prohibition 
        against discrimination by schools on the basis of sex) as 
        section 809 and moving such section so that it follows section 
        808;
            (2) in sections 835, 836, 838, 840, and 842, by striking 
        the term ``this subpart'' each place it appears and inserting 
        ``this part'';
            (3) in section 836(h), by striking the last sentence;
            (4) in section 836, by redesignating subsection (l) as 
        subsection (k);
            (5) in section 839, by striking ``839'' and all that 
        follows through ``(a)'' and inserting ``839. (a)'';
            (6) in section 835(b), by striking ``841'' each place it 
        appears and inserting ``871'';
            (7) by redesignating section 841 as section 871, moving 
        part F to the end of the title, and redesignating such part as 
        part H;
            (8) in part G--
                    (A) by redesignating section 845 as section 851; 
                and
                    (B) by redesignating part G as part F; and
            (9) in part I--
                    (A) by redesignating section 855 as section 861; 
                and
                    (B) by redesignating part I as part G.
    (i) Funding.--
            (1) In general.--Part H, as redesignated, of title VIII is 
        amended by adding at the end the following:

``SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVESTMENT FUND.

    ``For the purpose of carrying out this title, in addition to any 
other amounts authorized to be appropriated for such purpose, there are 
authorized to be appropriated, out of any monies in the Public Health 
Investment Fund, the following:
            ``(1) $115,000,000 for fiscal year 2010.
            ``(2) $122,000,000 for fiscal year 2011.
            ``(3) $127,000,000 for fiscal year 2012.
            ``(4) $134,000,000 for fiscal year 2013.
            ``(5) $140,000,000 for fiscal year 2014.
            ``(6) $147,000,000 for fiscal year 2015.
            ``(7) $154,000,000 for fiscal year 2016.
            ``(8) $162,000,000 for fiscal year 2017.
            ``(9) $170,000,000 for fiscal year 2018.
            ``(10) $179,000,000 for fiscal year 2019.''.
            (2) Existing authorizations of appropriations.--
                    (A) Sections 831, 846, 846a, and 861.--Sections 
                831(g) (as so redesignated), 846(i)(1) (42 U.S.C. 
                297n(i)(1)), 846A(f) (42 U.S.C. 297n-1(f)), and 861(e) 
                (as so redesignated) are amended by striking ``2007'' 
                each place it appears and inserting ``2019''.
                    (B) Section 871.--Section 871, as so redesignated, 
                is amended to read as follows:

``SEC. 871. FUNDING.

    ``For the purpose of carrying out parts B, C, and D (subject to 
section 845(g)), there are authorized to be appropriated such sums as 
may be necessary for each fiscal year through fiscal year 2019.''.

                  Subtitle C--Public Health Workforce

SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.

    Part D of title III (42 U.S.C. 254b et seq.), as amended by section 
2211, is amended by adding at the end the following:

                 ``Subpart XII--Public Health Workforce

``SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.

    ``(a) Establishment.--There is established, within the Service, the 
Public Health Workforce Corps (in this subpart referred to as the 
`Corps'), for the purpose of ensuring an adequate supply of public 
health professionals throughout the Nation. The Corps shall consist 
of--
            ``(1) such officers of the Regular and Reserve Corps of the 
        Service as the Secretary may designate; and
            ``(2) such civilian employees of the United States as the 
        Secretary may appoint.
    ``(b) Administration.--Except as provided in subsection (c), the 
Secretary shall carry out this subpart acting through the Administrator 
of the Health Resources and Services Administration.
    ``(c) Placement and Assignment.--The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention, shall 
develop a methodology for placing and assigning Corps participants as 
public health professionals. Such methodology may allow for placing and 
assigning such participants in State, local, and tribal health 
departments and Federally qualified health centers (as defined in 
section 1861(aa)(4) of the Social Security Act).
    ``(d) Application of Certain Provisions.--The provisions of subpart 
II shall, except as inconsistent with this subpart, apply to the Public 
Health Workforce Corps in the same manner and to the same extent as 
such provisions apply to the National Health Service Corps established 
under section 331.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the programs carried out under this subpart.

``SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Scholarship Program (referred to in this section as 
the `Program') for the purpose described in section 340L(a).
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1)(A) be accepted for enrollment, or be enrolled, as a 
        full-time or part-time student in a course of study or program 
        (approved by the Secretary) at an accredited graduate school or 
        program of public health; or
            ``(B) have demonstrated expertise in public health and be 
        accepted for enrollment, or be enrolled, as a full-time or 
        part-time student in a course of study or program (approved by 
        the Secretary) at--
                    ``(i) an accredited graduate school or program of 
                nursing; health administration, management, or policy; 
                preventive medicine; laboratory science; veterinary 
                medicine; or dental medicine; or
                    ``(ii) another accredited graduate school or 
                program, as deemed appropriate by Secretary;
            ``(2) be eligible for, or hold, an appointment as a 
        commissioned officer in the Regular or Reserve Corps of the 
        Service or be eligible for selection for civilian service in 
        the Corps; and
            ``(3) sign and submit to the Secretary a written contract 
        (described in subsection (c)) to serve full-time as a public 
        health professional, upon the completion of the course of study 
        or program involved, for the period of obligated service 
        described in subsection (c)(2)(E).
    ``(c) Contract.--The written contract between the Secretary and an 
individual under subsection (b)(3) shall contain--
            ``(1) an agreement on the part of the Secretary that the 
        Secretary will--
                    ``(A) provide the individual with a scholarship for 
                a period of years (not to exceed 4 academic years) 
                during which the individual shall pursue an approved 
                course of study or program to prepare the individual to 
                serve in the public health workforce; and
                    ``(B) accept (subject to the availability of 
                appropriated funds) the individual into the Corps;
            ``(2) an agreement on the part of the individual that the 
        individual will--
                    ``(A) accept provision of such scholarship to the 
                individual;
                    ``(B) maintain full-time or part-time enrollment in 
                the approved course of study or program described in 
                subsection (b)(1) until the individual completes that 
                course of study or program;
                    ``(C) while enrolled in the approved course of 
                study or program, maintain an acceptable level of 
                academic standing (as determined by the educational 
                institution offering such course of study or program);
                    ``(D) if applicable, complete a residency or 
                internship; and
                    ``(E) serve full-time as a public health 
                professional for a period of time equal to the greater 
                of--
                            ``(i) 1 year for each academic year for 
                        which the individual was provided a scholarship 
                        under the Program; or
                            ``(ii) 2 years; and
            ``(3) an agreement by both parties as to the nature and 
        extent of the scholarship assistance, which may include--
                    ``(A) payment of reasonable educational expenses of 
                the individual, including tuition, fees, books, 
                equipment, and laboratory expenses; and
                    ``(B) payment of a stipend of not more than $1,269 
                (plus, beginning with fiscal year 2011, an amount 
                determined by the Secretary on an annual basis to 
                reflect inflation) per month for each month of the 
                academic year involved, with the dollar amount of such 
                a stipend determined by the Secretary taking into 
                consideration whether the individual is enrolled full-
                time or part-time.
    ``(d) Application of Certain Provisions.--The provisions of subpart 
III shall, except as inconsistent with this subpart, apply to the 
scholarship program under this section in the same manner and to the 
same extent as such provisions apply to the National Health Service 
Corps Scholarship Program established under section 338A.

``SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as 
the `Program') for the purpose described in section 340L(a).
    ``(b) Eligibility.--To be eligible to participate in the Program, 
an individual shall--
            ``(1)(A) have a graduate degree from an accredited school 
        or program of public health;
            ``(B) have demonstrated expertise in public health and have 
        a graduate degree in a course of study or program (approved by 
        the Secretary) from--
                    ``(i) an accredited school or program of nursing; 
                health administration, management, or policy; 
                preventive medicine; laboratory science; veterinary 
                medicine; or dental medicine; or
                    ``(ii) another accredited school or program 
                approved by the Secretary; or
            ``(C) be enrolled as a full-time or part-time student in 
        the final year of a course of study or program (approved by the 
        Secretary) offered by a school or program described in 
        subparagraph (A) or (B), leading to a graduate degree;
            ``(2) be eligible for, or hold, an appointment as a 
        commissioned officer in the Regular or Reserve Corps of the 
        Service or be eligible for selection for civilian service in 
        the Corps;
            ``(3) if applicable, complete a residency or internship; 
        and
            ``(4) sign and submit to the Secretary a written contract 
        (described in subsection (c)) to serve full-time as a public 
        health professional for the period of obligated service 
        described in subsection (c)(2).
    ``(c) Contract.--The written contract between the Secretary and an 
individual under subsection (b)(4) shall contain--
            ``(1) an agreement by the Secretary to repay on behalf of 
        the individual loans incurred by the individual in the pursuit 
        of the relevant public health workforce educational degree in 
        accordance with the terms of the contract;
            ``(2) an agreement by the individual to serve full-time as 
        a public health professional for a period of time equal to 2 
        years or such longer period as the individual may agree to; and
            ``(3) in the case of an individual described in subsection 
        (b)(1)(C) who is in the final year of study and who has 
        accepted employment as a public health professional, in 
        accordance with subsection 340L(c), an agreement on the part of 
        the individual to complete the education or training, maintain 
        an acceptable level of academic standing (as determined by the 
        educational institution offering the course of study or 
        training), and serve the period of obligated service described 
        in paragraph (2).
    ``(d) Payments.--
            ``(1) In general.--A loan repayment provided for an 
        individual under a written contract under the Program shall 
        consist of payment, in accordance with paragraph (2), on behalf 
        of the individual of the principal, interest, and related 
        expenses on government and commercial loans received by the 
        individual regarding the undergraduate or graduate education of 
        the individual (or both), which loans were made for reasonable 
        educational expenses, including tuition, fees, books, 
        equipment, and laboratory expenses, incurred by the individual.
            ``(2) Payments for years served.--
                    ``(A) In general.--For each year of obligated 
                service that an individual contracts to serve under 
                subsection (c), the Secretary may pay up to $35,000 
                (plus, beginning with fiscal year 2012, an amount 
                determined by the Secretary on an annual basis to 
                reflect inflation) on behalf of the individual for 
                loans described in paragraph (1).
                    ``(B) Repayment schedule.--Any arrangement made by 
                the Secretary for the making of loan repayments in 
                accordance with this subsection shall provide that any 
                repayments for a year of obligated service shall be 
                made no later than the end of the fiscal year in which 
                the individual completes such year of service.
    ``(e) Application of Certain Provisions.--The provisions of subpart 
III shall, except as inconsistent with this subpart, apply to the loan 
repayment program under this section in the same manner and to the same 
extent as such provisions apply to the National Health Service Corps 
Loan Repayment Program established under section 338B.''.

SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.

    Section 765 (42 U.S.C. 295) is amended to read as follows:

``SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.

    ``(a) Program.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration and in consultation 
with the Director of the Centers for Disease Control and Prevention, 
shall establish a public health workforce training and enhancement 
program consisting of awarding grants and contracts under subsection 
(b).
    ``(b) Grants and Contracts.--The Secretary shall award grants and 
contracts to eligible entities--
            ``(1) to plan, develop, operate, or participate in, an 
        accredited professional training program in the field of public 
        health (including such a program in nursing; health 
        administration, management, or policy; preventive medicine; 
        laboratory science; veterinary medicine; or dental medicine) 
        for members of the public health workforce including mid-career 
        professionals;
            ``(2) to provide financial assistance in the form of 
        traineeships and fellowships to students who are participants 
        in any such program and who plan to specialize or work in the 
        field of public health;
            ``(3) to plan, develop, operate, or participate in a 
        program for the training of public health professionals who 
        plan to teach in any program described in paragraph (1); and
            ``(4) to provide financial assistance in the form of 
        traineeships and fellowships to public health professionals who 
        are participants in any program described in paragraph (1) and 
        who plan to teach in the field of public health, including 
        nursing; health administration, management, or policy; 
        preventive medicine; laboratory science; veterinary medicine; 
        or dental medicine.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited health professions school, including an 
        accredited graduate school or program of public health; 
        nursing; health administration, management, or policy; 
        preventive medicine; laboratory science; veterinary medicine; 
        or dental medicine;
            ``(2) a State, local, or tribal health department;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preference.--In awarding grants or contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        improving the percentage, of public health professionals who 
        serve in underserved communities.
            ``(2) Training individuals who are from underrepresented 
        minority groups or disadvantaged backgrounds.
            ``(3) Training individuals in public health specialties 
        experiencing a significant shortage of public health 
        professionals (as determined by the Secretary).
            ``(4) Training the greatest percentage, or significantly 
        improving the percentage, of public health professionals 
        serving in the Federal Government or a State, local, or tribal 
        government.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.

    Section 766 (42 U.S.C. 295a) is amended--
            (1) in subsection (b)(1), by striking ``in furtherance of 
        the goals established by the Secretary for the year 2000'' and 
        inserting ``in furtherance of the goals established by the 
        Secretary in the national prevention and wellness strategy 
        under section 3121''; and
            (2) by adding at the end the following:
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
              PROGRAM.

    Section 768 (42 U.S.C. 295c) is amended to read as follows:

``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
              PROGRAM.

    ``(a) Grants.--The Secretary, acting through the Administrator of 
the Health Resources and Services Administration and in consultation 
with the Director of the Centers for Disease Control and Prevention, 
shall award grants to, or enter into contracts with, eligible entities 
to provide training to graduate medical residents in preventive 
medicine specialties.
    ``(b) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited school of public health or school of 
        medicine or osteopathic medicine;
            ``(2) an accredited public or private hospital;
            ``(3) a State, local, or tribal health department; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(c) Use of Funds.--Amounts received under a grant or contract 
under this section shall be used to--
            ``(1) plan, develop (including the development of 
        curricula), operate, or participate in an accredited residency 
        or internship program in preventive medicine or public health;
            ``(2) defray the costs of practicum experiences, as 
        required in such a program; and
            ``(3) establish, maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                preventive medicine and public health; or
                    ``(B) programs that improve clinical teaching in 
                preventive medicine and public health.
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 799C, as added by section 2216 of this 
division, is amended by adding at the end the following:
    ``(b) Public Health Workforce.--For the purpose of carrying out 
subpart XII of part D of title III and sections 765, 766, and 768, in 
addition to any other amounts authorized to be appropriated for such 
purpose, there are authorized to be appropriated, out of any monies in 
the Public Health Investment Fund, the following:
            ``(1) $51,000,000 for fiscal year 2010.
            ``(2) $54,000,000 for fiscal year 2011.
            ``(3) $57,000,000 for fiscal year 2012.
            ``(4) $59,000,000 for fiscal year 2013.
            ``(5) $62,000,000 for fiscal year 2014.
            ``(6) $65,000,000 for fiscal year 2015.
            ``(7) $68,000,000 for fiscal year 2016.
            ``(8) $72,000,000 for fiscal year 2017.
            ``(9) $75,000,000 for fiscal year 2018.
            ``(10) $79,000,000 for fiscal year 2019.''.
    (b) Existing Authorization of Appropriations.--Subpart (a) of 
section 770 (42 U.S.C. 295e) is amended by striking ``2002'' and 
inserting ``2019''.

     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.

    Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) is amended by 
striking ``not more than $20,000'' and all that follows through the end 
of the paragraph and inserting: ``not more than $35,000 (plus, 
beginning with fiscal year 2012, an amount determined by the Secretary 
on an annual basis to reflect inflation) of the principal and interest 
of the educational loans of such individuals.''

SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.

    Subsection (b) of section 821 (42 U.S.C. 296m) is amended--
            (1) in the heading, by striking ``Guidance'' and inserting 
        ``Consultation''; and
            (2) by striking ``shall take into consideration'' and all 
        that follows through ``consult with nursing associations'' and 
        inserting ``shall, as appropriate, consult with nursing 
        associations''.

SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY PROGRAMS.

    Title VII (42 U.S.C. 292 et seq.) is amended by inserting after 
section 739 the following:

``SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL COMPETENCY 
              PROGRAMS.

    ``The Secretary shall, to the extent practicable, coordinate the 
activities carried out under this part and section 821 in order to 
enhance the effectiveness of such activities and avoid duplication of 
effort.''.

              PART 2--INTERDISCIPLINARY TRAINING PROGRAMS

SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY TRAINING FOR HEALTH CARE 
              PROFESSIONALS.

    Section 741 (42 U.S.C. 293e) is amended--
            (1) in the section heading, by striking ``Grants for Health 
        Professions Education'' and inserting ``Cultural and Linguistic 
        Competency Training for Health Care Professionals'';
            (2) by redesignating subsection (b) as subsection (h); and
            (3) by striking subsection (a) and inserting the following:
    ``(a) Program.--The Secretary shall establish a cultural and 
linguistic competency training program for health care professionals, 
including nurse professionals, consisting of awarding grants and 
contracts under subsection (b).
    ``(b) Cultural and Linguistic Competency Training.--The Secretary 
shall award grants and contracts to eligible entities--
            ``(1) to test, develop, and evaluate models of cultural and 
        linguistic competency training (including continuing education) 
        for health professionals; and
            ``(2) to implement cultural and linguistic competency 
        training programs for health professionals developed under 
        paragraph (1) or otherwise.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (b), an entity shall be--
            ``(1) an accredited health professions school or program;
            ``(2) an academic health center;
            ``(3) a public or private nonprofit entity; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preference.--In awarding grants and contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Addressing, or partnering with an entity with 
        experience addressing, the cultural and linguistic competency 
        needs of the population to be served through the grant or 
        contract.
            ``(2) Addressing health disparities.
            ``(3) Placing health professionals in regions experiencing 
        significant changes in the cultural and linguistic demographics 
        of populations, including communities along the United States-
        Mexico border.
            ``(4) Carrying out activities described in subsection (b) 
        with respect to more than one health profession discipline, 
        specialty, or subspecialty.
    ``(e) Consultation.--The Secretary shall carry out this section in 
consultation with the heads of appropriate health agencies and offices 
in the Department of Health and Human Services, including the Office of 
Minority Health.
    ``(f) Definition.--In this section, the term `health disparities' 
has the meaning given to the term in section 3171.
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.

SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

    Part D of title VII (42 U.S.C. 294 et seq.) is amended by adding at 
the end the following:

``SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE TRAINING.

    ``(a) Program.--The Secretary shall establish an innovations in 
interdisciplinary care training program consisting of awarding grants 
and contracts under subsection (b).
    ``(b) Training Programs.--The Secretary shall award grants to, or 
enter into contracts with, eligible entities--
            ``(1) to test, develop, and evaluate health professional 
        training programs (including continuing education) designed to 
        promote--
                    ``(A) the delivery of health services through 
                interdisciplinary and team-based models, which may 
                include patient-centered medical home models, 
                medication therapy management models, and models 
                integrating physical, mental, or oral health services; 
                and
                    ``(B) coordination of the delivery of health care 
                within and across settings, including health care 
                institutions, community-based settings, and the 
                patient's home; and
            ``(2) to implement such training programs developed under 
        paragraph (1) or otherwise.
    ``(c) Eligibility.--To be eligible for a grant or contract under 
subsection (b), an entity shall be--
            ``(1) an accredited health professions school or program;
            ``(2) an academic health center;
            ``(3) a public or private nonprofit entity (including an 
        area health education center or a geriatric education center); 
        or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).
    ``(d) Preferences.--In awarding grants and contracts under this 
section, the Secretary shall give preference to entities that have a 
demonstrated record of the following:
            ``(1) Training the greatest percentage, or significantly 
        increasing the percentage, of health professionals who serve in 
        underserved communities.
            ``(2) Broad interdisciplinary team-based collaborations.
            ``(3) Addressing health disparities.
    ``(e) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.
    ``(f) Definitions.--In this section:
            ``(1) The term `health disparities' has the meaning given 
        the term in section 3171.
            ``(2) The term `interdisciplinary' means collaboration 
        across health professions and specialties, which may include 
        public health, nursing, allied health, and appropriate medical 
        specialties.''.

     PART 3--ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND 
                               ASSESSMENT

SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

    Subpart 1 of part E of title VII (42 U.S.C. 294n et seq.) is 
amended by adding at the end the following:

``SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESSMENT.

    ``(a) Advisory Committee.--The Secretary, acting through the 
Assistant Secretary for Health, shall establish a permanent advisory 
committee to be known as the Advisory Committee on Health Workforce 
Evaluation and Assessment (referred to in this section as the `Advisory 
Committee').
    ``(b) Responsibilities.--The Advisory Committee shall--
            ``(1) not later than 1 year after the date of the 
        establishment of the Advisory Committee, submit recommendations 
        to the Secretary on--
                    ``(A) classifications of the health workforce to 
                ensure consistency of data collection on the health 
                workforce; and
                    ``(B) based on such classifications, standardized 
                methodologies and procedures to enumerate the health 
                workforce;
            ``(2) not later than 2 years after the date of the 
        establishment of the Advisory Committee, submit recommendations 
        to the Secretary on--
                    ``(A) the supply, diversity, and geographic 
                distribution of the health workforce;
                    ``(B) the retention of the health workforce to 
                ensure quality and adequacy of such workforce; and
                    ``(C) policies to carry out the recommendations 
                made pursuant to subparagraphs (A) and (B); and
            ``(3) not later than 4 years after the date of the 
        establishment of the Advisory Committee, and every 2 years 
        thereafter, submit updated recommendations to the Secretary 
        under paragraphs (1) and (2).
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Advisory Committee, including coordinating and supporting the 
dissemination of the recommendations of the Advisory Committee.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Secretary shall appoint 15 
        members to serve on the Advisory Committee.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Advisory Committee for a term of 3 years 
                and may reappoint such members, but the Secretary may 
                not appoint any member to serve more than a total of 6 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to the 
                Advisory Committee under paragraph (1)--
                            ``(i) 5 shall be appointed for a term of 1 
                        year;
                            ``(ii) 5 shall be appointed for a term of 2 
                        years; and
                            ``(iii) 5 shall be appointed for a term of 
                        3 years.
            ``(3) Qualifications.--Members of the Advisory Committee 
        shall be appointed from among individuals who possess expertise 
        in at least one of the following areas:
                    ``(A) Conducting and interpreting health workforce 
                market analysis, including health care labor workforce 
                analysis.
                    ``(B) Conducting and interpreting health finance 
                and economics research.
                    ``(C) Delivering and administering health care 
                services.
                    ``(D) Delivering and administering health workforce 
                education and training.
            ``(4) Representation.--In appointing members of the 
        Advisory Committee, the Secretary shall--
                    ``(A) include no less than one representative of 
                each of--
                            ``(i) health professionals within the 
                        health workforce;
                            ``(ii) health care patients and consumers;
                            ``(iii) employers;
                            ``(iv) labor unions; and
                            ``(v) third-party health payors; and
                    ``(B) ensure that--
                            ``(i) all areas of expertise described in 
                        paragraph (3) are represented;
                            ``(ii) the members of the Advisory 
                        Committee include members who, collectively, 
                        have significant experience working with--
                                    ``(I) populations in urban and 
                                federally designated rural and 
                                nonmetropolitan areas; and
                                    ``(II) populations who are 
                                underrepresented in the health 
                                professions, including underrepresented 
                                minority groups; and
                            ``(iii) individuals who are directly 
                        involved in health professions education or 
                        practice do not constitute a majority of the 
                        members of the Advisory Committee.
            ``(5) Disclosure and conflicts of interest.--Members of the 
        Advisory Committee shall not be considered employees of the 
        Federal Government by reason of service on the Advisory 
        Committee, except members of the Advisory Committee shall be 
        considered to be special Government employees within the 
        meaning of section 107 of the Ethics in Government Act of 1978 
        (5 U.S.C. App.) and section 208 of title 18, United States 
        Code, for the purposes of disclosure and management of 
        conflicts of interest under those sections.
            ``(6) No pay; receipt of travel expenses.--Members of the 
        Advisory Committee shall not receive any pay for service on the 
        Committee, but may receive travel expenses, including a per 
        diem, in accordance with applicable provisions of subchapter I 
        of chapter 57 of title 5, United States Code.
    ``(e) Consultation.--In carrying out this section, the Secretary 
shall consult with the Secretary of Education and the Secretary of 
Labor.
    ``(f) Collaboration.--The Advisory Committee shall collaborate with 
the advisory bodies at the Health Resources and Services 
Administration, the National Advisory Council (as authorized in section 
337), the Advisory Committee on Training in Primary Care Medicine and 
Dentistry (as authorized in section 749A), the Advisory Committee on 
Interdisciplinary, Community-Based Linkages (as authorized in section 
756), the Advisory Council on Graduate Medical Education (as authorized 
in section 762), and the National Advisory Council on Nurse Education 
and Practice (as authorized in section 851).
    ``(g) FACA.--The Federal Advisory Committee Act (5 U.S.C. App.) 
except for section 14 of such Act shall apply to the Advisory Committee 
under this section only to the extent that the provisions of such Act 
do not conflict with the requirements of this section.
    ``(h) Report.--The Secretary shall submit to the Congress an annual 
report on the activities of the Advisory Committee.
    ``(i) Definition.--In this section, the term `health workforce' 
includes all health care providers with direct patient care and support 
responsibilities, including physicians, nurses, physician assistants, 
pharmacists, oral health professionals (as defined in section 749(f)), 
allied health professionals, mental and behavioral professionals, and 
public health professionals (including veterinarians engaged in public 
health practice).''.

                  PART 4--HEALTH WORKFORCE ASSESSMENT

SEC. 2271. HEALTH WORKFORCE ASSESSMENT.

    (a) In General.--Section 761 (42 U.S.C. 294n) is amended--
            (1) by redesignating subsection (c) as subsection (e); and
            (2) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) In General.--The Secretary shall, based upon the 
classifications and standardized methodologies and procedures developed 
by the Advisory Committee on Health Workforce Evaluation and Assessment 
under section 764(b)--
            ``(1) collect data on the health workforce (as defined in 
        section 764(i)), disaggregated by field, discipline, and 
        specialty, with respect to--
                    ``(A) the supply (including retention) of health 
                professionals relative to the demand for such 
                professionals;
                    ``(B) the diversity of health professionals 
                (including with respect to race, ethnic background, and 
                gender); and
                    ``(C) the geographic distribution of health 
                professionals; and
            ``(2) collect such data on individuals participating in the 
        programs authorized by subtitles A, B, and C and part 1 of 
        subtitle D of title II of subdivision C of the America's 
        Affordable Health Choices Act of 2009.
    ``(b) Grants and Contracts for Health Workforce Analysis.--
            ``(1) In general.--The Secretary may award grants or 
        contracts to eligible entities to carry out subsection (a).
            ``(2) Eligibility.--To be eligible for a grant or contract 
        under this subsection, an entity shall be--
                    ``(A) an accredited health professions school or 
                program;
                    ``(B) an academic health center;
                    ``(C) a State, local, or tribal government;
                    ``(D) a public or private entity; or
                    ``(E) a consortium of 2 or more entities described 
                in subparagraphs (A) through (D).
    ``(c) Collaboration and Data Sharing.--The Secretary shall 
collaborate with Federal departments and agencies, health professions 
organizations (including health professions education organizations), 
and professional medical societies for the purpose of carrying out 
subsection (a).
    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the data collected under subsection (a).''.
    (b) Period Before Completion of National Strategy.--Pending 
completion of the classifications and standardized methodologies and 
procedures developed by the Advisory Committee on Health Workforce 
Evaluation and Assessment under section 764(b) of the Public Health 
Service Act, as added by section 2261, the Secretary of Health and 
Human Services, acting through the Administrator of the Health 
Resources and Services Administration and in consultation with such 
Advisory Committee, may make a judgment about the classifications, 
methodologies, and procedures to be used for collection of data under 
section 761(a) of the Public Health Service Act, as amended by this 
section.

                PART 5--AUTHORIZATION OF APPROPRIATIONS

SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Section 799C, as added by section 2216 of this 
division, is amended by adding at the end the following:
    ``(c) Health Professions Training for Diversity.--For the purpose 
of carrying out sections 736, 737, 738, 739, and 739A, in addition to 
any other amounts authorized to be appropriated for such purpose, there 
are authorized to be appropriated, out of any monies in the Public 
Health Investment Fund, the following:
            ``(1) $90,000,000 for fiscal year 2010.
            ``(2) $97,000,000 for fiscal year 2011.
            ``(3) $100,000,000 for fiscal year 2012.
            ``(4) $104,000,000 for fiscal year 2013.
            ``(5) $110,000,000 for fiscal year 2014.
            ``(6) $116,000,000 for fiscal year 2015.
            ``(7) $121,000,000 for fiscal year 2016.
            ``(8) $127,000,000 for fiscal year 2017.
            ``(9) $133,000,000 for fiscal year 2018.
            ``(10) $140,000,000 for fiscal year 2019.
    ``(d) Interdisciplinary Training Programs, Advisory Committee on 
Health Workforce Evaluation and Assessment, and Health Workforce 
Assessment.--For the purpose of carrying out sections 741, 759, 761, 
and 764, in addition to any other amounts authorized to be appropriated 
for such purpose, there are authorized to be appropriated, out of any 
monies in the Public Health Investment Fund, the following:
            ``(1) $91,000,000 for fiscal year 2010.
            ``(2) $97,000,000 for fiscal year 2011.
            ``(3) $101,000,000 for fiscal year 2012.
            ``(4) $105,000,000 for fiscal year 2013.
            ``(5) $111,000,000 for fiscal year 2014.
            ``(6) $117,000,000 for fiscal year 2015.
            ``(7) $122,000,000 for fiscal year 2016.
            ``(8) $129,000,000 for fiscal year 2017.
            ``(9) $135,000,000 for fiscal year 2018.
            ``(10) $141,000,000 for fiscal year 2019.''.
    (b) Existing Authorizations of Appropriations.--
            (1) Section 736.--Paragraph (1) of section 736(h) (42 
        U.S.C. 293(h)) is amended by striking ``2002'' and inserting 
        ``2019''.
            (2) Sections 737, 738, and 739.--Subsections (a), (b), and 
        (c) of section 740 are amended by striking ``2002'' each place 
        it appears and inserting ``2019''.
            (3) Section 741.--Subsection (h), as so redesignated, of 
        section 741 is amended--
                    (A) by striking ``and'' after ``fiscal year 
                2003,''; and
                    (B) by inserting ``, and such sums as may be 
                necessary for subsequent fiscal years through the end 
                of fiscal year 2019'' before the period at the end.
            (4) Section 761.--Subsection (e)(1), as so redesignated, of 
        section 761 is amended by striking ``2002'' and inserting 
        ``2019''.

                   TITLE III--PREVENTION AND WELLNESS

SEC. 2301. PREVENTION AND WELLNESS.

    (a) In General.--The Public Health Service Act (42 U.S.C. 201 et 
seq.) is amended by adding at the end the following:

                 ``TITLE XXXI--PREVENTION AND WELLNESS

              ``Subtitle A--Prevention and Wellness Trust

``SEC. 3111. PREVENTION AND WELLNESS TRUST.

    ``(a) Deposits Into Trust.--There is established a Prevention and 
Wellness Trust. There are authorized to be appropriated to the Trust--
            ``(1) amounts described in section 2002(b)(2)(ii) of the 
        America's Affordable Health Choices Act of 2009 for each fiscal 
        year; and
            ``(2) in addition, out of any monies in the Public Health 
        Investment Fund--
                    ``(A) for fiscal year 2010, $2,400,000,000;
                    ``(B) for fiscal year 2011, $2,800,000,000;
                    ``(C) for fiscal year 2012, $3,100,000,000;
                    ``(D) for fiscal year 2013, $3,400,000,000;
                    ``(E) for fiscal year 2014, $3,500,000,000;
                    ``(F) for fiscal year 2015, $3,600,000,000;
                    ``(G) for fiscal year 2016, $3,700,000,000;
                    ``(H) for fiscal year 2017, $3,900,000,000;
                    ``(I) for fiscal year 2018, $4,300,000,000; and
                    ``(J) for fiscal year 2019, $4,600,000,000.
    ``(b) Availability of Funds.--Amounts in the Prevention and 
Wellness Trust shall be available, as provided in advance in 
appropriation Acts, for carrying out this title.
    ``(c) Allocation.--Of the amounts authorized to be appropriated in 
subsection (a)(2), there are authorized to be appropriated--
            ``(1) for carrying out subtitle C (Prevention Task Forces), 
        $35,000,000 for each of fiscal years 2010 through 2019;
            ``(2) for carrying out subtitle D (Prevention and Wellness 
        Research)--
                    ``(A) for fiscal year 2010, $100,000,000;
                    ``(B) for fiscal year 2011, $150,000,000;
                    ``(C) for fiscal year 2012, $200,000,000;
                    ``(D) for fiscal year 2013, $250,000,000;
                    ``(E) for fiscal year 2014, $300,000,000;
                    ``(F) for fiscal year 2015, $315,000,000;
                    ``(G) for fiscal year 2016, $331,000,000;
                    ``(H) for fiscal year 2017, $347,000,000;
                    ``(I) for fiscal year 2018, $364,000,000; and
                    ``(J) for fiscal year 2019, $383,000,000.
            ``(3) for carrying out subtitle E (Delivery of Community 
        Preventive and Wellness Services)--
                    ``(A) for fiscal year 2010, $1,100,000,000;
                    ``(B) for fiscal year 2011, $1,300,000,000;
                    ``(C) for fiscal year 2012, $1,400,000,000;
                    ``(D) for fiscal year 2013, $1,600,000,000;
                    ``(E) for fiscal year 2014, $1,700,000,000;
                    ``(F) for fiscal year 2015, $1,800,000,000;
                    ``(G) for fiscal year 2016, $1,900,000,000;
                    ``(H) for fiscal year 2017, $2,000,000,000;
                    ``(I) for fiscal year 2018, $2,100,000,000; and
                    ``(J) for fiscal year 2019, $2,300,000,000.
            ``(4) for carrying out section 3161 (Core Public Health 
        Infrastructure and Activities for State and Local Health 
        Departments)--
                    ``(A) for fiscal year 2010, $800,000,000;
                    ``(B) for fiscal year 2011, $1,000,000,000;
                    ``(C) for fiscal year 2012, $1,100,000,000;
                    ``(D) for fiscal year 2013, $1,200,000,000;
                    ``(E) for fiscal year 2014, $1,300,000,000;
                    ``(F) for fiscal year 2015, $1,400,000,000;
                    ``(G) for fiscal year 2016, $1,500,000,000;
                    ``(H) for fiscal year 2017, $1,600,000,000;
                    ``(I) for fiscal year 2018, $1,800,000,000; and
                    ``(J) for fiscal year 2019, $1,900,000,000; and
            ``(5) for carrying out section 3162 (Core Public Health 
        Infrastructure and Activities for CDC), $400,000,000 for each 
        of fiscal years 2010 through 2019.

        ``Subtitle B--National Prevention and Wellness Strategy

``SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRATEGY.

    ``(a) In General.--The Secretary shall submit to the Congress 
within one year after the date of the enactment of this section, and at 
least every 2 years thereafter, a national strategy that is designed to 
improve the Nation's health through evidence-based clinical and 
community prevention and wellness activities (in this section referred 
to as `prevention and wellness activities'), including core public 
health infrastructure improvement activities.
    ``(b) Contents.--The strategy under subsection (a) shall include 
each of the following:
            ``(1) Identification of specific national goals and 
        objectives in prevention and wellness activities that take into 
        account appropriate public health measures and standards, 
        including departmental measures and standards (including 
        Healthy People and National Public Health Performance 
        Standards).
            ``(2) Establishment of national priorities for prevention 
        and wellness, taking into account unmet prevention and wellness 
        needs.
            ``(3) Establishment of national priorities for research on 
        prevention and wellness, taking into account unanswered 
        research questions on prevention and wellness.
            ``(4) Identification of health disparities in prevention 
        and wellness.
            ``(5) A plan for addressing and implementing paragraphs (1) 
        through (4).
    ``(c) Consultation.--In developing or revising the strategy under 
subsection (a), the Secretary shall consult with the following:
            ``(1) The heads of appropriate health agencies and offices 
        in the Department, including the Office of the Surgeon General 
        of the Public Health Service, the Office of Minority Health, 
        and the Office on Women's Health.
            ``(2) As appropriate, the heads of other Federal 
        departments and agencies whose programs have a significant 
        impact upon health (as determined by the Secretary).
            ``(3) As appropriate, nonprofit and for-profit entities.
            ``(4) The Association of State and Territorial Health 
        Officials and the National Association of County and City 
        Health Officials.

                  ``Subtitle C--Prevention Task Forces

``SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERVICES.

    ``(a) In General.--The Secretary, acting through the Director of 
the Agency for Healthcare Research and Quality, shall establish a 
permanent task force to be known as the Task Force on Clinical 
Preventive Services (in this section referred to as the `Task Force').
    ``(b) Responsibilities.--The Task Force shall--
            ``(1) identify clinical preventive services for review;
            ``(2) review the scientific evidence related to the 
        benefits, effectiveness, appropriateness, and costs of clinical 
        preventive services identified under paragraph (1) for the 
        purpose of developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(3) as appropriate, take into account health disparities 
        in developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(4) identify gaps in clinical preventive services 
        research and evaluation and recommend priority areas for such 
        research and evaluation;
            ``(5) as appropriate, consult with the clinical prevention 
        stakeholders board in accordance with subsection (f);
            ``(6) as appropriate, consult with the Task Force on 
        Community Preventive Services established under section 3132; 
        and
            ``(7) as appropriate, in carrying out this section, 
        consider the national strategy under section 3121.
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Task Force shall be 
        composed of 30 members, appointed by the Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Task Force for a term of 6 years and may 
                reappoint such members, but the Secretary may not 
                appoint any member to serve more than a total of 12 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to 
                serve on the Task Force after the enactment of this 
                title--
                            ``(i) 10 shall be appointed for a term of 2 
                        years;
                            ``(ii) 10 shall be appointed for a term of 
                        4 years; and
                            ``(iii) 10 shall be appointed for a term of 
                        6 years.
            ``(3) Qualifications.--Members of the Task Force shall be 
        appointed from among individuals who possess expertise in at 
        least one of the following areas:
                    ``(A) Health promotion and disease prevention.
                    ``(B) Evaluation of research and systematic 
                evidence reviews.
                    ``(C) Application of systematic evidence reviews to 
                clinical decisionmaking or health policy.
                    ``(D) Clinical primary care in child and adolescent 
                health.
                    ``(E) Clinical primary care in adult health, 
                including women's health.
                    ``(F) Clinical primary care in geriatrics.
                    ``(G) Clinical counseling and behavioral services 
                for primary care patients.
            ``(4) Representation.--In appointing members of the Task 
        Force, the Secretary shall ensure that--
                    ``(A) all areas of expertise described in paragraph 
                (3) are represented; and
                    ``(B) the members of the Task Force include 
                practitioners who, collectively, have significant 
                experience treating racially and ethnically diverse 
                populations.
    ``(e) Subgroups.--As appropriate to maximize efficiency, the Task 
Force may delegate authority for conducting reviews and making 
recommendations to subgroups consisting of Task Force members, subject 
to final approval by the Task Force.
    ``(f) Clinical Prevention Stakeholders Board.--
            ``(1) In general.--The Task Force shall convene a clinical 
        prevention stakeholders board composed of representatives of 
        appropriate public and private entities with an interest in 
        clinical preventive services to advise the Task Force on 
        developing, updating, publishing, and disseminating evidence-
        based recommendations on the use of clinical preventive 
        services.
            ``(2) Membership.--The members of the clinical prevention 
        stakeholders board shall include representatives of the 
        following:
                    ``(A) Health care consumers and patient groups.
                    ``(B) Providers of clinical preventive services, 
                including community-based providers.
                    ``(C) Federal departments and agencies, including--
                            ``(i) appropriate health agencies and 
                        offices in the Department, including the Office 
                        of the Surgeon General of the Public Health 
                        Service, the Office of Minority Health, and the 
                        Office on Women's Health; and
                            ``(ii) as appropriate, other Federal 
                        departments and agencies whose programs have a 
                        significant impact upon health (as determined 
                        by the Secretary).
                    ``(D) Private health care payors.
            ``(3) Responsibilities.--In accordance with subsection 
        (b)(5), the clinical prevention stakeholders board shall--
                    ``(A) recommend clinical preventive services for 
                review by the Task Force;
                    ``(B) suggest scientific evidence for consideration 
                by the Task Force related to reviews undertaken by the 
                Task Force;
                    ``(C) provide feedback regarding draft 
                recommendations by the Task Force; and
                    ``(D) assist with efforts regarding dissemination 
                of recommendations by the Director of the Agency for 
                Healthcare Research and Quality.
    ``(g) Disclosure and Conflicts of Interest.--Members of the Task 
Force or the clinical prevention stakeholders board shall not be 
considered employees of the Federal Government by reason of service on 
the Task Force, except members of the Task Force shall be considered to 
be special Government employees within the meaning of section 107 of 
the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of 
title 18, United States Code, for the purposes of disclosure and 
management of conflicts of interest under those sections.
    ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task 
Force or the clinical prevention stakeholders board shall not receive 
any pay for service on the Task Force, but may receive travel expenses, 
including a per diem, in accordance with applicable provisions of 
subchapter I of chapter 57 of title 5, United States Code.
    ``(i) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) except for section 14 of such Act shall apply to the Task 
Force to the extent that the provisions of such Act do not conflict 
with the provisions of this title.
    ``(j) Report.--The Secretary shall submit to the Congress an annual 
report on the Task Force, including with respect to gaps identified and 
recommendations made under subsection (b)(4).

``SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE SERVICES.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall establish a 
permanent task force to be known as the Task Force on Community 
Preventive Services (in this section referred to as the `Task Force').
    ``(b) Responsibilities.--The Task Force shall--
            ``(1) identify community preventive services for review;
            ``(2) review the scientific evidence related to the 
        benefits, effectiveness, appropriateness, and costs of 
        community preventive services identified under paragraph (1) 
        for the purpose of developing, updating, publishing, and 
        disseminating evidence-based recommendations on the use of such 
        services;
            ``(3) as appropriate, take into account health disparities 
        in developing, updating, publishing, and disseminating 
        evidence-based recommendations on the use of such services;
            ``(4) identify gaps in community preventive services 
        research and evaluation and recommend priority areas for such 
        research and evaluation;
            ``(5) as appropriate, consult with the community prevention 
        stakeholders board in accordance with subsection (f);
            ``(6) as appropriate, consult with the Task Force on 
        Clinical Preventive Services established under section 3131; 
        and
            ``(7) as appropriate, in carrying out this section, 
        consider the national strategy under section 3121.
    ``(c) Role of Agency.--The Secretary shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force.
    ``(d) Membership.--
            ``(1) Number; appointment.--The Task Force shall be 
        composed of 30 members, appointed by the Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The Secretary shall appoint 
                members of the Task Force for a term of 6 years and may 
                reappoint such members, but the Secretary may not 
                appoint any member to serve more than a total of 12 
                years.
                    ``(B) Staggered terms.--Notwithstanding 
                subparagraph (A), of the members first appointed to 
                serve on the Task Force after the enactment of this 
                section--
                            ``(i) 10 shall be appointed for a term of 2 
                        years;
                            ``(ii) 10 shall be appointed for a term of 
                        4 years; and
                            ``(iii) 10 shall be appointed for a term of 
                        6 years.
            ``(3) Qualifications.--Members of the Task Force shall be 
        appointed from among individuals who possess expertise in at 
        least one of the following areas:
                    ``(A) Public health.
                    ``(B) Evaluation of research and systematic 
                evidence reviews.
                    ``(C) Disciplines relevant to community preventive 
                services, including health promotion; disease 
                prevention; chronic disease; worksite health; 
                qualitative and quantitative analysis; and health 
                economics, policy, law, and statistics.
            ``(4) Representation.--In appointing members of the Task 
        Force, the Secretary--
                    ``(A) shall ensure that all areas of expertise 
                described in paragraph (3) are represented;
                    ``(B) shall ensure that such members include 
                sufficient representatives of each of--
                            ``(i) State health officers;
                            ``(ii) local health officers;
                            ``(iii) health care practitioners; and
                            ``(iv) public health practitioners; and
                    ``(C) shall appoint individuals who, collectively, 
                have significant experience working with racially and 
                ethnically diverse populations.
    ``(e) Subgroups.--As appropriate to maximize efficiency, the Task 
Force may delegate authority for conducting reviews and making 
recommendations to subgroups consisting of Task Force members, subject 
to final approval by the Task Force.
    ``(f) Community Prevention Stakeholders Board.--
            ``(1) In general.--The Task Force shall convene a community 
        prevention stakeholders board composed of representatives of 
        appropriate public and private entities with an interest in 
        community preventive services to advise the Task Force on 
        developing, updating, publishing, and disseminating evidence-
        based recommendations on the use of community preventive 
        services.
            ``(2) Membership.--The members of the community prevention 
        stakeholders board shall include representatives of the 
        following:
                    ``(A) Health care consumers and patient groups.
                    ``(B) Providers of community preventive services, 
                including community-based providers.
                    ``(C) Federal departments and agencies, including--
                            ``(i) appropriate health agencies and 
                        offices in the Department, including the Office 
                        of the Surgeon General of the Public Health 
                        Service, the Office of Minority Health, and the 
                        Office on Women's Health; and
                            ``(ii) as appropriate, other Federal 
                        departments and agencies whose programs have a 
                        significant impact upon health (as determined 
                        by the Secretary).
                    ``(D) Private health care payors.
            ``(3) Responsibilities.--In accordance with subsection 
        (b)(5), the community prevention stakeholders board shall--
                    ``(A) recommend community preventive services for 
                review by the Task Force;
                    ``(B) suggest scientific evidence for consideration 
                by the Task Force related to reviews undertaken by the 
                Task Force;
                    ``(C) provide feedback regarding draft 
                recommendations by the Task Force; and
                    ``(D) assist with efforts regarding dissemination 
                of recommendations by the Director of the Centers for 
                Disease Control and Prevention.
    ``(g) Disclosure and Conflicts of Interest.--Members of the Task 
Force or the community prevention stakeholders board shall not be 
considered employees of the Federal Government by reason of service on 
the Task Force, except members of the Task Force shall be considered to 
be special Government employees within the meaning of section 107 of 
the Ethics in Government Act of 1978 (5 U.S.C. App.) and section 208 of 
title 18, United States Code, for the purposes of disclosure and 
management of conflicts of interest under those sections.
    ``(h) No Pay; Receipt of Travel Expenses.--Members of the Task 
Force or the community prevention stakeholders board shall not receive 
any pay for service on the Task Force, but may receive travel expenses, 
including a per diem, in accordance with applicable provisions of 
subchapter I of chapter 57 of title 5, United States Code.
    ``(i) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) except for section 14 of such Act shall apply to the Task 
Force to the extent that the provisions of such Act do not conflict 
with the provisions of this title.
    ``(j) Report.--The Secretary shall submit to the Congress an annual 
report on the Task Force, including with respect to gaps identified and 
recommendations made under subsection (b)(4).

             ``Subtitle D--Prevention and Wellness Research

``SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIVITY COORDINATION.

    ``In conducting or supporting research on prevention and wellness, 
the Director of the Centers for Disease Control and Prevention, the 
Director of the National Institutes of Health, and the heads of other 
agencies within the Department of Health and Human Services conducting 
or supporting such research, shall take into consideration the national 
strategy under section 3121 and the recommendations of the Task Force 
on Clinical Preventive Services under section 3131 and the Task Force 
on Community Preventive Services under section 3132.

``SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCH GRANTS.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall conduct, or award 
grants to eligible entities to conduct, research in priority areas 
identified by the Secretary in the national strategy under section 3121 
or by the Task Force on Community Preventive Services as required by 
section 3132.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall be--
            ``(1) a State, local, or tribal department of health;
            ``(2) a public or private nonprofit entity; or
            ``(3) a consortium of 2 or more entities described in 
        paragraphs (1) and (2).
    ``(c) Report.--The Secretary shall submit to the Congress an annual 
report on the program of research under this section.

  ``Subtitle E--Delivery of Community Prevention and Wellness Services

``SEC. 3151. COMMUNITY PREVENTION AND WELLNESS SERVICES GRANTS.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall establish a 
program for the delivery of community preventive and wellness services 
consisting of awarding grants to eligible entities--
            ``(1) to provide evidence-based, community preventive and 
        wellness services in priority areas identified by the Secretary 
        in the national strategy under section 3121; or
            ``(2) to plan such services.
    ``(b) Eligibility.--
            ``(1) Definition.--To be eligible for a grant under this 
        section, an entity shall be--
                    ``(A) a State, local, or tribal department of 
                health;
                    ``(B) a public or private entity; or
                    ``(C) a consortium of--
                            ``(i) 2 or more entities described in 
                        subparagraph (A) or (B); and
                            ``(ii) a community partnership representing 
                        a Health Empowerment Zone.
            ``(2) Health empowerment zone.--In this subsection, the 
        term `Health Empowerment Zone' means an area--
                    ``(A) in which multiple community preventive and 
                wellness services are implemented in order to address 
                one or more health disparities, including those 
                identified by the Secretary in the national strategy 
                under section 3121; and
                    ``(B) which is represented by a community 
                partnership that demonstrates community support and 
                coordination with State, local, or tribal health 
                departments and includes--
                            ``(i) a broad cross section of 
                        stakeholders;
                            ``(ii) residents of the community; and
                            ``(iii) representatives of entities that 
                        have a history of working within and serving 
                        the community.
    ``(c) Preferences.--In awarding grants under this section, the 
Secretary shall give preference to entities that--
            ``(1) will address one or more goals or objectives 
        identified by the Secretary in the national strategy under 
        section 3121;
            ``(2) will address significant health disparities, 
        including those identified by the Secretary in the national 
        strategy under section 3121;
            ``(3) will address unmet community prevention needs and 
        avoids duplication of effort;
            ``(4) have been demonstrated to be effective in communities 
        comparable to the proposed target community;
            ``(5) will contribute to the evidence base for community 
        preventive and wellness services;
            ``(6) demonstrate that the community preventive services to 
        be funded will be sustainable; and
            ``(7) demonstrate coordination or collaboration across 
        governmental and nongovernmental partners.
    ``(d) Health Disparities.--Of the funds awarded under this section 
for a fiscal year, the Secretary shall award not less than 50 percent 
for planning or implementing community preventive and wellness services 
whose primary purpose is to achieve a measurable reduction in one or 
more health disparities, including those identified by the Secretary in 
the national strategy under section 3121.
    ``(e) Emphasis on Recommended Services.--For fiscal year 2013 and 
subsequent fiscal years, the Secretary shall award grants under this 
section only for planning or implementing services recommended by the 
Task Force on Community Preventive Services under section 3122 or 
deemed effective based on a review of comparable rigor (as determined 
by the Director of the Centers for Disease Control and Prevention).
    ``(f) Prohibited Uses of Funds.--An entity that receives a grant 
under this section may not use funds provided through the grant--
            ``(1) to build or acquire real property or for 
        construction; or
            ``(2) for services or planning to the extent that payment 
        has been made, or can reasonably be expected to be made--
                    ``(A) under any insurance policy;
                    ``(B) under any Federal or State health benefits 
                program (including titles XIX and XXI of the Social 
                Security Act); or
                    ``(C) by an entity which provides health services 
                on a prepaid basis.
    ``(g) Report.--The Secretary shall submit to the Congress an annual 
report on the program of grants awarded under this section.
    ``(h) Definitions.--In this section, the term `evidence-based' 
means that methodologically sound research has demonstrated a 
beneficial health effect, in the judgment of the Director of the 
Centers for Disease Control and Prevention.

            ``Subtitle F--Core Public Health Infrastructure

``SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR STATE, LOCAL, AND 
              TRIBAL HEALTH DEPARTMENTS.

    ``(a) Program.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention shall establish a core 
public health infrastructure program consisting of awarding grants 
under subsection (b).
    ``(b) Grants.--
            ``(1) Award.--For the purpose of addressing core public 
        health infrastructure needs, the Secretary--
                    ``(A) shall award a grant to each State health 
                department; and
                    ``(B) may award grants on a competitive basis to 
                State, local, or tribal health departments.
            ``(2) Allocation.--Of the total amount of funds awarded as 
        grants under this subsection for a fiscal year--
                    ``(A) not less than 50 percent shall be for grants 
                to State health departments under paragraph (1)(A); and
                    ``(B) not less than 30 percent shall be for grants 
                to State, local, or tribal health departments under 
                paragraph (1)(B).
    ``(c) Use of Funds.--The Secretary may award a grant to an entity 
under subsection (b)(1) only if the entity agrees to use the grant to 
address core public health infrastructure needs, including those 
identified in the accreditation process under subsection (g).
    ``(d) Formula Grants to State Health Departments.--In making grants 
under subsection (b)(1)(A), the Secretary shall award funds to each 
State health department in accordance with--
            ``(1) a formula based on population size; burden of 
        preventable disease and disability; and core public health 
        infrastructure gaps, including those identified in the 
        accreditation process under subsection (g); and
            ``(2) application requirements established by the 
        Secretary, including a requirement that the State submit a plan 
        that demonstrates to the satisfaction of the Secretary that the 
        State's health department will--
                    ``(A) address its highest priority core public 
                health infrastructure needs; and
                    ``(B) as appropriate, allocate funds to local 
                health departments within the State.
    ``(e) Competitive Grants to State, Local, and Tribal Health 
Departments.--In making grants under subsection (b)(1)(B), the 
Secretary shall give priority to applicants demonstrating core public 
health infrastructure needs identified in the accreditation process 
under subsection (g).
    ``(f) Maintenance of Effort.--The Secretary may award a grant to an 
entity under subsection (b) only if the entity demonstrates to the 
satisfaction of the Secretary that--
            ``(1) funds received through the grant will be expended 
        only to supplement, and not supplant, non-Federal and Federal 
        funds otherwise available to the entity for the purpose of 
        addressing core public health infrastructure needs; and
            ``(2) with respect to activities for which the grant is 
        awarded, the entity will maintain expenditures of non-Federal 
        amounts for such activities at a level not less than the level 
        of such expenditures maintained by the entity for the fiscal 
        year preceding the fiscal year for which the entity receives 
        the grant.
    ``(g) Establishment of a Public Health Accreditation Program.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall--
                    ``(A) develop, and periodically review and update, 
                standards for voluntary accreditation of State, local, 
                or tribal health departments and public health 
                laboratories for the purpose of advancing the quality 
                and performance of such departments and laboratories; 
                and
                    ``(B) implement a program to accredit such health 
                departments and laboratories in accordance with such 
                standards.
            ``(2) Cooperative agreement.--The Secretary may enter into 
        a cooperative agreement with a private nonprofit entity to 
        carry out paragraph (1).
    ``(h) Report.--The Secretary shall submit to the Congress an annual 
report on progress being made to accredit entities under subsection 
(g), including--
            ``(1) a strategy, including goals and objectives, for 
        accrediting entities under subsection (g) and achieving the 
        purpose described in subsection (g)(1); and
            ``(2) identification of gaps in research related to core 
        public health infrastructure and recommendations of priority 
        areas for such research.

``SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND ACTIVITIES FOR CDC.

    ``(a) In General.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention, shall expand and 
improve the core public health infrastructure and activities of the 
Centers for Disease Control and Prevention to address unmet and 
emerging public health needs.
    ``(b) Report.--The Secretary shall submit to the Congress an annual 
report on the activities funded through this section.

                    ``Subtitle G--General Provisions

``SEC. 3171. DEFINITIONS.

    ``In this title:
            ``(1) The term `core public health infrastructure' includes 
        workforce capacity and competency; laboratory systems; health 
        information, health information systems, and health information 
        analysis; communications; financing; other relevant components 
        of organizational capacity; and other related activities.
            ``(2) The terms `Department' and `departmental' refer to 
        the Department of Health and Human Services.
            ``(3) The term `health disparities' includes health and 
        health care disparities and means population-specific 
        differences in the presence of disease, health outcomes, or 
        access to health care. For purposes of the preceding sentence, 
        a population may be delineated by race, ethnicity, geographic 
        setting, or other population or subpopulation determined 
        appropriate by the Secretary.
            ``(4) The term `tribal' refers to an Indian tribe, a Tribal 
        organization, or an Urban Indian organization, as such terms 
        are defined in section 4 of the Indian Health Care Improvement 
        Act.''.
    (b) Transition Provisions Applicable to Task Forces.--
            (1) Functions, personnel, assets, liabilities, and 
        administrative actions.--All functions, personnel, assets, and 
        liabilities of, and administrative actions applicable to, the 
        Preventive Services Task Force convened under section 915(a) of 
        the Public Health Service Act and the Task Force on Community 
        Preventive Services (as such section and Task Forces were in 
        existence on the day before the date of the enactment of this 
        Act) shall be transferred to the Task Force on Clinical 
        Preventive Services and the Task Force on Community Preventive 
        Services, respectively, established under sections 3121 and 
        3122 of the Public Health Service Act, as added by subsection 
        (a).
            (2) Recommendations.--All recommendations of the Preventive 
        Services Task Force and the Task Force on Community Preventive 
        Services, as in existence on the day before the date of the 
        enactment of this Act, shall be considered to be 
        recommendations of the Task Force on Clinical Preventive 
        Services and the Task Force on Community Preventive Services, 
        respectively, established under sections 3121 and 3122 of the 
        Public Health Service Act, as added by subsection (a).
            (3) Members already serving.--
                    (A) Initial members.--The Secretary of Health and 
                Human Services may select those individuals already 
                serving on the Preventive Services Task Force and the 
                Task Force on Community Preventive Services, as in 
                existence on the day before the date of the enactment 
                of this Act, to be among the first members appointed to 
                the Task Force on Clinical Preventive Services and the 
                Task Force on Community Preventive Services, 
                respectively, under sections 3121 and 3122 of the 
                Public Health Service Act, as added by subsection (a).
                    (B) Calculation of total service.--In calculating 
                the total years of service of a member of a task force 
                for purposes of section 3131(d)(2)(A) or 3132(d)(2)(A) 
                of the Public Health Service Act, as added by 
                subsection (a), the Secretary of Health and Human 
                Services shall not include any period of service by the 
                member on the Preventive Services Task Force or the 
                Task Force on Community Preventive Services, 
                respectively, as in existence on the day before the 
                date of the enactment of this Act.
    (c) Period Before Completion of National Strategy.--Pending 
completion of the national strategy under section 3121 of the Public 
Health Service Act, as added by subsection (a), the Secretary of Health 
and Human Services, acting through the relevant agency head, may make a 
judgment about how the strategy will address an issue and rely on such 
judgment in carrying out any provision of subtitle C, D, E, or F of 
title XXXI of such Act, as added by subsection (a), that requires the 
Secretary--
            (1) to take into consideration such strategy;
            (2) to conduct or support research or provide services in 
        priority areas identified in such strategy; or
            (3) to take any other action in reliance on such strategy.
    (d) Conforming Amendments.--
            (1) Paragraph (61) of section 3(b) of the Indian Health 
        Care Improvement Act (25 U.S.C. 1602) is amended by striking 
        ``United States Preventive Services Task Force'' and inserting 
        ``Task Force on Clinical Preventive Services''.
            (2) Section 126 of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (Appendix F of 
        Public Law 106-554) is amended by striking ``United States 
        Preventive Services Task Force'' each place it appears and 
        inserting ``Task Force on Clinical Preventive Services''.
            (3) Paragraph (7) of section 317D of the Public Health 
        Service Act (42 U.S.C. 247b-5) is amended by striking ``United 
        States Preventive Services Task Force'' each place it appears 
        and inserting ``Task Force on Clinical Preventive Services''.
            (4) Section 915 of the Public Health Service Act (42 U.S.C. 
        299b-4) is amended by striking subsection (a).
            (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and 
        (ddd)(1)(B) of section 1861 of the Social Security Act (42 
        U.S.C. 1395x) are amended by striking ``United States 
        Preventive Services Task Force'' each place it appears and 
        inserting ``Task Force on Clinical Preventive Services''.

                   TITLE IV--QUALITY AND SURVEILLANCE

SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH 
              CARE.

    (a) In General.--Title IX of the Public Health Service Act (42 
U.S.C. 299 et seq.) is amended--
            (1) by redesignating part D as part E;
            (2) by redesignating sections 931 through 938 as sections 
        941 through 948, respectively;
            (3) in section 938(1), by striking ``931'' and inserting 
        ``941''; and
            (4) by inserting after part C the following:

 ``PART D--IMPLEMENTATION OF BEST PRACTICES IN THE DELIVERY OF HEALTH 
                                  CARE

``SEC. 931. CENTER FOR QUALITY IMPROVEMENT.

    ``(a) In General.--There is established the Center for Quality 
Improvement (referred to in this part as the `Center'), to be headed by 
the Director.
    ``(b) Prioritization.--
            ``(1) In general.--The Director shall prioritize areas for 
        the identification, development, evaluation, and implementation 
        of best practices (including innovative methodologies and 
        strategies) for quality improvement activities in the delivery 
        of health care services (in this section referred to as `best 
        practices').
            ``(2) Considerations.--In prioritizing areas under 
        paragraph (1), the Director shall consider--
                    ``(A) the priorities established under section 1191 
                of the Social Security Act; and
                    ``(B) the key health indicators identified by the 
                Assistant Secretary for Health Information under 
                section 1709.
    ``(c) Other Responsibilities.--The Director, acting directly or by 
awarding a grant or contract to an eligible entity, shall--
            ``(1) identify existing best practices under subsection 
        (e);
            ``(2) develop new best practices under subsection (f);
            ``(3) evaluate best practices under subsection (g);
            ``(4) implement best practices under subsection (h);
            ``(5) ensure that best practices are identified, developed, 
        evaluated, and implemented under this section consistent with 
        standards adopted by the Secretary under section 3004 for 
        health information technology used in the collection and 
        reporting of quality information (including for purposes of the 
        demonstration of meaningful use of certified electronic health 
        record (EHR) technology by physicians and hospitals under the 
        Medicare program (under sections 1848(o)(2) and 1886(n)(3), 
        respectively, of the Social Security Act)); and
            ``(6) provide for dissemination of information and 
        reporting under subsections (i) and (j).
    ``(d) Eligibility.--To be eligible for a grant or contract under 
subsection (c), an entity shall--
            ``(1) be a nonprofit entity;
            ``(2) agree to work with a variety of institutional health 
        care providers, physicians, nurses, and other health care 
        practitioners; and
            ``(3) if the entity is not the organization holding a 
        contract under section 1153 of the Social Security Act for the 
        area to be served, agree to cooperate with and avoid 
        duplication of the activities of such organization.
    ``(e) Identifying Existing Best Practices.--The Secretary shall 
identify best practices that are--
            ``(1) currently utilized by health care providers 
        (including hospitals, physician and other clinician practices, 
        community cooperatives, and other health care entities) that 
        deliver consistently high-quality, efficient health care 
        services; and
            ``(2) easily adapted for use by other health care providers 
        and for use across a variety of health care settings.
    ``(f) Developing New Best Practices.--The Secretary shall develop 
best practices that are--
            ``(1) based on a review of existing scientific evidence;
            ``(2) sufficiently detailed for implementation and 
        incorporation into the workflow of health care providers; and
            ``(3) designed to be easily adapted for use by health care 
        providers across a variety of health care settings.
    ``(g) Evaluation of Best Practices.--The Director shall evaluate 
best practices identified or developed under this section. Such 
evaluation--
            ``(1) shall include determinations of which best 
        practices--
                    ``(A) most reliably and effectively achieve 
                significant progress in improving the quality of 
                patient care; and
                    ``(B) are easily adapted for use by health care 
                providers across a variety of health care settings;
            ``(2) shall include regular review, updating, and 
        improvement of such best practices; and
            ``(3) may include in-depth case studies or empirical 
        assessments of health care providers (including hospitals, 
        physician and other clinician practices, community 
        cooperatives, and other health care entities) and simulations 
        of such best practices for determinations under paragraph (1).
    ``(h) Implementation of Best Practices.--
            ``(1) In general.--The Director shall enter into voluntary 
        arrangements with health care providers (including hospitals 
        and other health facilities and health practitioners) in a 
        State or region to implement best practices identified or 
        developed under this section. Such implementation--
                    ``(A) may include forming collaborative multi-
                institutional teams; and
                    ``(B) shall include an evaluation of the best 
                practices being implemented, including the measurement 
                of patient outcomes before, during, and after 
                implementation of such best practices.
            ``(2) Preferences.--In carrying out this subsection, the 
        Director shall give priority to health care providers 
        implementing best practices that--
                    ``(A) have the greatest impact on patient outcomes 
                and satisfaction;
                    ``(B) are the most easily adapted for use by health 
                care providers across a variety of health care 
                settings;
                    ``(C) promote coordination of health care 
                practitioners across the continuum of care; and
                    ``(D) engage patients and their families in 
                improving patient care and outcomes.
    ``(i) Public Dissemination of Information.--The Director shall 
provide for the public dissemination of information with respect to 
best practices and activities under this section. Such information 
shall be made available in appropriate formats and languages to reflect 
the varying needs of consumers and diverse levels of health literacy.
    ``(j) Report.--
            ``(1) In general.--The Director shall submit an annual 
        report to the Congress and the Secretary on activities under 
        this section.
            ``(2) Content.--Each report under paragraph (1) shall 
        include--
                    ``(A) information on activities conducted pursuant 
                to grants and contracts awarded;
                    ``(B) summary data on patient outcomes before, 
                during, and after implementation of best practices; and
                    ``(C) recommendations on the adaptability of best 
                practices for use by health providers.''.
    (b) Initial Quality Improvement Activities and Initiatives To Be 
Implemented.--Until the Director of the Agency for Healthcare Research 
and Quality has established initial priorities under section 931(b) of 
the Public Health Service Act, as added by subsection (a), the Director 
shall, for purposes of such section, prioritize the following:
            (1) Health care-associated infections.--Reducing health 
        care-associated infections, including infections in nursing 
        homes and outpatient settings.
            (2) Surgery.--Increasing hospital and outpatient 
        perioperative patient safety, including reducing surgical-site 
        infections and surgical errors (such as wrong-site surgery and 
        retained foreign bodies).
            (3) Emergency room.--Improving care in hospital emergency 
        rooms, including through the use of principles of efficiency of 
        design and delivery to improve patient flow.
            (4) Obstetrics.--Improving the provision of obstetrical and 
        neonatal care, including the identification of interventions 
        that are effective in reducing the risk of preterm and 
        premature labor and the implementation of best practices for 
        labor and delivery care.

SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

    (a) Establishment.--Title XVII (42 U.S.C. 300u et seq.) is 
amended--
            (1) by redesignating sections 1709 and 1710 as sections 
        1710 and 1711, respectively; and
            (2) by inserting after section 1708 the following:

``SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMATION.

    ``(a) In General.--There is established within the Department an 
Assistant Secretary for Health Information (in this section referred to 
as the `Assistant Secretary'), to be appointed by the Secretary.
    ``(b) Responsibilities.--The Assistant Secretary shall--
            ``(1) ensure the collection, collation, reporting, and 
        publishing of information (including full and complete 
        statistics) on key health indicators regarding the Nation's 
        health and the performance of the Nation's health care;
            ``(2) facilitate and coordinate the collection, collation, 
        reporting, and publishing of information regarding the Nation's 
        health and the performance of the Nation's health care (other 
        than information described in paragraph (1));
            ``(3)(A) develop standards for the collection of data 
        regarding the Nation's health and the performance of the 
        Nation's health care; and
            ``(B) in carrying out subparagraph (A)--
                    ``(i) ensure appropriate specificity and 
                standardization for data collection at the national, 
                regional, State, and local levels;
                    ``(ii) include standards, as appropriate, for the 
                collection of accurate data on health and health care 
                by race, ethnicity, primary language, sex, sexual 
                orientation, gender identity, disability, socioeconomic 
                status, rural, urban, or other geographic setting, and 
                any other population or subpopulation determined 
                appropriate by the Secretary;
                    ``(iii) ensure, with respect to data on race and 
                ethnicity, consistency with the 1997 Office of 
                Management and Budget Standards for Maintaining, 
                Collecting and Presenting Federal Data on Race and 
                Ethnicity (or any successor standards); and
                    ``(iv) in consultation with the Director of the 
                Office of Minority Health, and the Director of the 
                Office of Civil Rights, of the Department, develop 
                standards for the collection of data on health and 
                health care with respect to data on primary language;
            ``(4) provide support to Federal departments and agencies 
        whose programs have a significant impact upon health (as 
        determined by the Secretary) for the collection and collation 
        of information described in paragraphs (1) and (2);
            ``(5) ensure the sharing of information described in 
        paragraphs (1) and (2) among the agencies of the Department;
            ``(6) facilitate the sharing of information described in 
        paragraphs (1) and (2) by Federal departments and agencies 
        whose programs have a significant impact upon health (as 
        determined by the Secretary);
            ``(7) identify gaps in information described in paragraphs 
        (1) and (2) and the appropriate agency or entity to address 
        such gaps;
            ``(8) facilitate and coordinate identification and 
        monitoring by the agencies of the Department of health 
        disparities to inform program and policy efforts to reduce such 
        disparities, including facilitating and funding analyses 
        conducted in cooperation with the Social Security 
        Administration, the Bureau of the Census, and other appropriate 
        agencies and entities;
            ``(9) consistent with privacy, proprietary, and other 
        appropriate safeguards, facilitate public accessibility of 
        datasets (such as de-identified Medicare datasets or publicly 
        available data on key health indicators) by means of the 
        Internet; and
            ``(10) award grants or contracts for the collection and 
        collation of information described in paragraphs (1) and (2) 
        (including through statewide surveys that provide standardized 
        information).
    ``(c) Key Health Indicators.--
            ``(1) In general.--In carrying out subsection (b)(1), the 
        Assistant Secretary shall--
                    ``(A) identify, and reassess at least once every 3 
                years, key health indicators described in such 
                subsection;
                    ``(B) publish statistics on such key health 
                indicators for the public--
                            ``(i) not less than annually; and
                            ``(ii) on a supplemental basis whenever 
                        warranted by--
                                    ``(I) the rate of change for a key 
                                health indicator; or
                                    ``(II) the need to inform policy 
                                regarding the Nation's health and the 
                                performance of the Nation's health 
                                care; and
                    ``(C) ensure consistency with the national strategy 
                developed by the Secretary under section 3121 and 
                consideration of the indicators specified in the 
                reports under sections 308, 903(a)(6), and 913(b)(2).
            ``(2) Release of key health indicators.--The regulations, 
        rules, processes, and procedures of the Office of Management 
        and Budget governing the review, release, and dissemination of 
        key health indicators shall be the same as the regulations, 
        rules, processes, and procedures of the Office of Management 
        and Budget governing the review, release, and dissemination of 
        Principal Federal Economic Indicators (or equivalent 
        statistical data) by the Bureau of Labor Statistics.
    ``(d) Coordination.--In carrying out this section, the Assistant 
Secretary shall coordinate with--
            ``(1) public and private entities that collect and 
        disseminate information on health and health care, including 
        foundations; and
            ``(2) the head of the Office of the National Coordinator 
        for Health Information Technology to ensure optimal use of 
        health information technology.
    ``(e) Request for Information From Other Departments and 
Agencies.--Consistent with applicable law, the Assistant Secretary may 
secure directly from any Federal department or agency information 
necessary to enable the Assistant Secretary to carry out this section.
    ``(f) Report.--
            ``(1) Submission.--The Assistant Secretary shall submit to 
        the Secretary and the Congress an annual report containing--
                    ``(A) a description of national, regional, or State 
                changes in health or health care, as reflected by the 
                key health indicators identified under subsection 
                (c)(1);
                    ``(B) a description of gaps in the collection, 
                collation, reporting, and publishing of information 
                regarding the Nation's health and the performance of 
                the Nation's health care;
                    ``(C) recommendations for addressing such gaps and 
                identification of the appropriate agency within the 
                Department or other entity to address such gaps;
                    ``(D) a description of analyses of health 
                disparities, including the results of completed 
                analyses, the status of ongoing longitudinal studies, 
                and proposed or planned research; and
                    ``(E) a plan for actions to be taken by the 
                Assistant Secretary to address gaps described in 
                subparagraph (B).
            ``(2) Consideration.--In preparing a report under paragraph 
        (1), the Assistant Secretary shall take into consideration the 
        findings and conclusions in the reports under sections 308, 
        903(a)(6), and 913(b)(2).
    ``(g) Proprietary and Privacy Protections.--Nothing in this section 
shall be construed to affect applicable proprietary or privacy 
protections.
    ``(h) Consultation.--In carrying out this section, the Assistant 
Secretary shall consult with--
            ``(1) the heads of appropriate health agencies and offices 
        in the Department, including the Office of the Surgeon General 
        of the Public Health Service, the Office of Minority Health, 
        and the Office on Women's Health; and
            ``(2) as appropriate, the heads of other Federal 
        departments and agencies whose programs have a significant 
        impact upon health (as determined by the Secretary).
    ``(i) Definition.--In this section:
            ``(1) The terms `agency' and `agencies' include an 
        epidemiology center established under section 214 of the Indian 
        Health Care Improvement Act.
            ``(2) The term `Department' means the Department of Health 
        and Human Services.
            ``(3) The term `health disparities' has the meaning given 
        to such term in section 3171.''.
    (b) Other Coordination Responsibilities.--Title III (42 U.S.C. 241 
et seq.) is amended--
            (1) in paragraphs (1) and (2) of section 304(c) (42 U.S.C. 
        242b(c)), by inserting ``, acting through the Assistant 
        Secretary for Health Information,'' after ``The Secretary'' 
        each place it appears; and
            (2) in section 306(j) (42 U.S.C. 242k(j)), by inserting ``, 
        acting through the Assistant Secretary for Health 
        Information,'' after ``of this section, the Secretary''.

SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

    Section 799C, as added and amended, is further amended by adding at 
the end the following:
    ``(e) Quality and Surveillance.--For the purpose of carrying out 
part D of title IX and section 1709, in addition to any other amounts 
authorized to be appropriated for such purpose, there is authorized to 
be appropriated, out of any monies in the Public Health Investment 
Fund, $300,000,000 for each of fiscal years 2010 through 2014 and 
$330,000,000 for each of fiscal years 2015 through 2019.''.

                       TITLE V--OTHER PROVISIONS

        Subtitle A--Drug Discount for Rural and Other Hospitals

SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) (42 U.S.C. 256b(a)(4)) is amended by adding at the 
end the following:
                    ``(M) A children's hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(iii) of the Social Security Act which 
                would meet the requirements of subparagraph (L), 
                including the disproportionate share adjustment 
                percentage requirement under subparagraph (L)(ii), if 
                the hospital were a subsection (d) hospital as defined 
                in section 1886(d)(1)(B) of the Social Security Act.
                    ``(N) An entity that is a critical access hospital 
                (as determined under section 1820(c)(2) of the Social 
                Security Act).
                    ``(O) An entity receiving funds under title V of 
                the Social Security Act (relating to maternal and child 
                health) for the provision of health services.
                    ``(P) An entity receiving funds under subpart I of 
                part B of title XIX of the Public Health Service Act 
                (relating to comprehensive mental health services) for 
                the provision of community mental health services.
                    ``(Q) An entity receiving funds under subpart II of 
                such part B (relating to the prevention and treatment 
                of substance abuse) for the provision of treatment 
                services for substance abuse.
                    ``(R) An entity that is a Medicare-dependent, small 
                rural hospital (as defined in section 1886(d)(5)(G)(iv) 
                of the Social Security Act).
                    ``(S) An entity that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
                    ``(T) An entity that is classified as a rural 
                referral center under section 1886(d)(5)(C) of the 
                Social Security Act.''.
    (b) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
(42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (4)(L)--
                    (A) by adding ``and'' at the end of clause (i);
                    (B) by striking ``; and'' at the end of clause (ii) 
                and inserting a period; and
                    (C) by striking clause (iii);
            (2) in paragraph (5), by redesignating subparagraphs (C) 
        and (D) as subparagraphs (D) and (E), respectively, and by 
        inserting after subparagraph (B) the following:
                    ``(C) Prohibiting use of group purchasing 
                arrangements.--
                            ``(i) A hospital described in subparagraph 
                        (L), (M), (N), (R), (S), or (T) of paragraph 
                        (4) shall not obtain covered outpatient drugs 
                        through a group purchasing organization or 
                        other group purchasing arrangement, except as 
                        permitted or provided pursuant to clause (ii).
                            ``(ii) The Secretary shall establish 
                        reasonable exceptions to the requirement of 
                        clause (i)--
                                    ``(I) with respect to a covered 
                                outpatient drug that is unavailable to 
                                be purchased through the program under 
                                this section due to a drug shortage 
                                problem, manufacturer noncompliance, or 
                                any other reason beyond the hospital's 
                                control;
                                    ``(II) to facilitate generic 
                                substitution when a generic covered 
                                outpatient drug is available at a lower 
                                price; and
                                    ``(III) to reduce in other ways the 
                                administrative burdens of managing both 
                                inventories of drugs obtained under 
                                this section and not under this 
                                section, if such exception does not 
                                create a duplicate discount problem in 
                                violation of subparagraph (A) or a 
                                diversion problem in violation of 
                                subparagraph (B).''.

SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

    (a) In General.--Section 340B (42 U.S.C. 256b) is amended--
            (1) in subsection (b)--
                    (A) by striking ``In this section, the terms'' and 
                inserting the following: ``In this section:
            ``(1) In general.--The terms''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Covered drug.--The term `covered drug'--
                    ``(A) means a covered outpatient drug (as defined 
                in section 1927(k)(2) of the Social Security Act); and
                    ``(B) includes, notwithstanding the section 
                1927(k)(3)(A) of such Act, a drug used in connection 
                with an inpatient or outpatient service provided by a 
                hospital described in subparagraph (L), (M), (N), (R), 
                (S), or (T) of subsection (a)(4) that is enrolled to 
                participate in the drug discount program under this 
                section.''; and
            (2) in paragraphs (5), (7), and (9) of subsection (a), by 
        striking ``outpatient'' each place it appears.
    (b) Medicaid Credits on Inpatient Drugs.--Subsection (c) of section 
340B (42 U.S.C. 256b(c)) is amended to read as follows:
    ``(c) Medicaid Credits on Inpatient Drugs.--
            ``(1) In general.--For the cost reporting period covered by 
        the most recently filed Medicare cost report under title XVIII 
        of the Social Security Act, a hospital described in 
        subparagraph (L), (M), (N), (R), (S), or (T) of subsection 
        (a)(4) and enrolled to participate in the drug discount program 
        under this section shall provide to each State under its plan 
        under title XIX of such Act--
                    ``(A) a credit on the estimated annual costs to 
                such hospital of single source and innovator multiple 
                source drugs provided to Medicaid beneficiaries for 
                inpatient use; and
                    ``(B) a credit on the estimated annual costs to 
                such hospital of noninnovator multiple source drugs 
                provided to Medicaid beneficiaries for inpatient use.
            ``(2) Amount of credits.--
                    ``(A) Single source and innovator multiple source 
                drugs.--For purposes of paragraph (1)(A)--
                            ``(i) the credit under such paragraph shall 
                        be equal to the product of--
                                    ``(I) the annual value of single 
                                source and innovator multiple source 
                                drugs purchased under this section by 
                                the hospital based on the drugs' 
                                average manufacturer price;
                                    ``(II) the estimated percentage of 
                                the hospital's drug purchases 
                                attributable to Medicaid beneficiaries 
                                for inpatient use; and
                                    ``(III) the minimum rebate 
                                percentage described in section 
                                1927(c)(1)(B) of the Social Security 
                                Act;
                            ``(ii) the reference in clause (i)(I) to 
                        the annual value of single source and innovator 
                        multiple source drugs purchased under this 
                        section by the hospital based on the drugs' 
                        average manufacturer price shall be equal to 
                        the sum of--
                                    ``(I) the annual quantity of each 
                                single source and innovator multiple 
                                source drug purchased during the cost 
                                reporting period, multiplied by
                                    ``(II) the average manufacturer 
                                price for that drug;
                            ``(iii) the reference in clause (i)(II) to 
                        the estimated percentage of the hospital's drug 
                        purchases attributable to Medicaid 
                        beneficiaries for inpatient use; shall be equal 
                        to--
                                    ``(I) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report, divided by
                                    ``(II) total drug charges reported 
                                on the cost report; and
                            ``(iv) the terms `single source drug' and 
                        `innovator multiple source drug' have the 
                        meanings given such terms in section 1927(k)(7) 
                        of the Social Security Act.
                    ``(B) Noninnovator multiple source drugs.--For 
                purposes of paragraph (1)(B)--
                            ``(i) the credit under such paragraph shall 
                        be equal to the product of--
                                    ``(I) the annual value of 
                                noninnovator multiple source drugs 
                                purchased under this section by the 
                                hospital based on the drugs' average 
                                manufacturer price;
                                    ``(II) the estimated percentage of 
                                the hospital's drug purchases 
                                attributable to Medicaid beneficiaries 
                                for inpatient use; and
                                    ``(III) the applicable percentage 
                                as defined in section 1927(c)(3)(B) of 
                                the Social Security Act;
                            ``(ii) the reference in clause (i)(I) to 
                        the annual value of noninnovator multiple 
                        source drugs purchased under this section by 
                        the hospital based on the drugs' average 
                        manufacturer price shall be equal to the sum 
                        of--
                                    ``(I) the annual quantity of each 
                                noninnovator multiple source drug 
                                purchased during the cost reporting 
                                period, multiplied by
                                    ``(II) the average manufacturer 
                                price for that drug;
                            ``(iii) the reference in clause (i)(II) to 
                        the estimated percentage of the hospital's drug 
                        purchases attributable to Medicaid 
                        beneficiaries for inpatient use shall be equal 
                        to--
                                    ``(I) the Medicaid inpatient drug 
                                charges as reported on the hospital's 
                                most recently filed Medicare cost 
                                report, divided by
                                    ``(II) total drug charges reported 
                                on the cost report; and
                            ``(iv) the term `noninnovator multiple 
                        source drug' has the meaning given such term in 
                        section 1927(k)(7) of the Social Security Act.
            ``(3) Calculation of credits.--
                    ``(A) In general.--Each State calculates credits 
                under paragraph (1) and informs hospitals of amount 
                under section 1927(a)(5)(D) of the Social Security Act.
                    ``(B) Hospital provision of information.--Not later 
                than 30 days after the date of the filing of the 
                hospital's most recently filed Medicare cost report, 
                the hospital shall provide the State with the 
                information described in paragraphs (2)(A)(ii) and 
                (2)(B)(ii). With respect to each drug purchased during 
                the cost reporting period, the hospital shall provide 
                the dosage form, strength, package size, date of 
                purchase and the number of units purchased.
            ``(4) Payment deadline.--The credits provided by a hospital 
        under paragraph (1) shall be paid within 60 days after 
        receiving the information specified in paragraph (3)(A).
            ``(5) Opt out.--A hospital shall not be required to provide 
        the Medicaid credit required under paragraph (1) if it can 
        demonstrate to the State that it will lose reimbursement under 
        the State plan resulting from the extension of discounts to 
        inpatient drugs under subsection (b)(2) and that the loss of 
        reimbursement will exceed the amount of the credit otherwise 
        owed by the hospital.
            ``(6) Offset against medical assistance.--Amounts received 
        by a State under this subsection in any quarter shall be 
        considered to be a reduction in the amount expended under the 
        State plan in the quarter for medical assistance for purposes 
        of section 1903(a)(1) of the Social Security Act.''.
    (c) Conforming Amendments.--Section 1927 of the Social Security Act 
(42 U.S.C. 1396r-8) is amended--
            (1) in subsection (a)(5)(A), by striking ``covered 
        outpatient drugs'' and inserting ``covered drugs (as defined in 
        section 340B(b)(2) of the Public Health Service Act)'';
            (2) in subsection (a)(5), by striking subparagraph (D) and 
        inserting the following:
                    ``(D) State responsibility for calculating hospital 
                credits.--The State shall calculate the credits owed by 
                the hospital under paragraph (1) of section 340B(c) of 
                the Public Health Service Act and provide the hospital 
                with both the amounts and an explanation of how it 
                calculated the credits. In performing the calculations 
                specified in paragraphs (2)(A)(ii) and (2)(B)(ii) of 
                such section, the State shall use the average 
                manufacturer price applicable to the calendar quarter 
                in which the drug was purchased by the hospital.''; and
            (3) in subsection (k)(1)--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraphs (B) and (D)''; and
                    (B) by adding at the end the following:
                    ``(D) Calculation for covered drugs.--With respect 
                to a covered drug (as defined in section 340B(b)(2) of 
                the Public Health Service Act), the average 
                manufacturer price shall be determined in accordance 
                with subparagraph (A) except that, in the event a 
                covered drug is not distributed to the retail pharmacy 
                class of trade, it shall mean the average price paid to 
                the manufacturer for the drug in the United States by 
                wholesalers for drugs distributed to the acute care 
                class of trade, after deducting customary prompt pay 
                discounts.''.

SEC. 2503. EFFECTIVE DATE.

    (a) In General.--The amendments made by this subtitle shall take 
effect on July 1, 2010, and shall apply to drugs dispensed on or after 
such date.
    (b) Effectiveness.--The amendments made by this subtitle shall be 
effective, and shall be taken into account in determining whether a 
manufacturer is deemed to meet the requirements of section 340B(a) of 
the Public Health Service Act (42 U.S.C. 256b(a)) and of section 
1927(a)(5) of the Social Security Act (42 U.S.C. 1396r-8(a)(5)), 
notwithstanding any other provision of law.

                Subtitle B--School-Based Health Clinics

SEC. 2511. SCHOOL-BASED HEALTH CLINICS.

    (a) In General.--Part Q of title III (42 U.S.C. 280h et seq.) is 
amended by adding at the end the following:

``SEC. 399Z-1. SCHOOL-BASED HEALTH CLINICS.

    ``(a) Program.--The Secretary shall establish a school-based health 
clinic program consisting of awarding grants to eligible entities to 
support the operation of school-based health clinics (referred to in 
this section as `SBHCs').
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
            ``(1) be an SBHC (as defined in subsection (l)(4)); and
            ``(2) submit an application at such time, in such manner, 
        and containing such information as the Secretary may require, 
        including at a minimum--
                    ``(A) evidence that the applicant meets all 
                criteria necessary to be designated as an SBHC;
                    ``(B) evidence of local need for the services to be 
                provided by the SBHC;
                    ``(C) an assurance that--
                            ``(i) SBHC services will be provided in 
                        accordance with Federal, State, and local laws 
                        governing--
                                    ``(I) obtaining parental or 
                                guardian consent; and
                                    ``(II) patient privacy and student 
                                records, including section 264 of the 
                                Health Insurance Portability and 
                                Accountability Act of 1996 and section 
                                444 of the General Education Provisions 
                                Act;
                            ``(ii) the SBHC has established and 
                        maintains collaborative relationships with 
                        other health care providers in the catchment 
                        area of the SBHC;
                            ``(iii) the SBHC will provide on-site 
                        access during the academic day when school is 
                        in session and has an established network of 
                        support and access to services with backup 
                        health providers when the school or SBHC is 
                        closed;
                            ``(iv) the SBHC will be integrated into the 
                        school environment and will coordinate health 
                        services with appropriate school personnel and 
                        other community providers co-located at the 
                        school; and
                            ``(v) the SBHC sponsoring facility assumes 
                        all responsibility for the SBHC administration, 
                        operations, and oversight; and
                    ``(D) such other information as the Secretary may 
                require.
    ``(c) Use of Funds.--Funds awarded under a grant under this section 
may be used for--
            ``(1) providing training related to the provision of 
        comprehensive primary health services and additional health 
        services;
            ``(2) the management and operation of SBHC programs; and
            ``(3) the payment of salaries for health professionals and 
        other appropriate SBHC personnel.
    ``(d) Consideration of Need.--In determining the amount of a grant 
under this section, the Secretary shall take into consideration--
            ``(1) the financial need of the SBHC;
            ``(2) State, local, or other sources of funding provided to 
        the SBHC; and
            ``(3) other factors as determined appropriate by the 
        Secretary.
    ``(e) Preferences.--In awarding grants under this section, the 
Secretary shall give preference to SBHCs that have a demonstrated 
record of service to the following:
            ``(1) A high percentage of medically underserved children 
        and adolescents.
            ``(2) Communities or populations in which children and 
        adolescents have difficulty accessing health and mental health 
        services.
            ``(3) Communities with high percentages of children and 
        adolescents who are uninsured, underinsured, or eligible for 
        medical assistance under Federal or State health benefits 
        programs (including titles XIX and XXI of the Social Security 
        Act).
    ``(f) Matching Requirement.--The Secretary may award a grant to an 
SBHC only if the SBHC agrees to provide, from non-Federal sources, an 
amount equal to 20 percent of the amount of the grant (which may be 
provided in cash or in kind) to carry out the activities supported by 
the grant.
    ``(g) Supplement, Not Supplant.--The Secretary may award a grant to 
an SBHC under this section only if the SBHC demonstrates to the 
satisfaction of the Secretary that funds received through the grant 
will be expended only to supplement, and not supplant, non-Federal and 
Federal funds otherwise available to the SBHC for operation of the SBHC 
(including each activity described in paragraph (1) or (2) of 
subsection (c)).
    ``(h) Payor of Last Resort.--The Secretary may award a grant to an 
SBHC under this section only if the SBHC demonstrates to the 
satisfaction of the Secretary that funds received through the grant 
will not be expended for any activity to the extent that payment has 
been made, or can reasonably be expected to be made--
            ``(1) under any insurance policy;
            ``(2) under any Federal or State health benefits program 
        (including titles XIX and XXI of the Social Security Act); or
            ``(3) by an entity which provides health services on a 
        prepaid basis.
    ``(i) Regulations Regarding Reimbursement for Health Services.--The 
Secretary shall issue regulations regarding the reimbursement for 
health services provided by SBHCs to individuals eligible to receive 
such services through the program under this section, including 
reimbursement under any insurance policy or any Federal or State health 
benefits program (including titles XIX and XXI of the Social Security 
Act).
    ``(j) Technical Assistance.--The Secretary shall provide (either 
directly or by grant or contract) technical and other assistance to 
SBHCs to assist such SBHCs to meet the requirements of this section. 
Such assistance may include fiscal and program management assistance, 
training in fiscal and program management, operational and 
administrative support, and the provision of information to the SBHCs 
of the variety of resources available under this title and how those 
resources can be best used to meet the health needs of the communities 
served by the SBHCs.
    ``(k) Evaluation; Report.--The Secretary shall--
            ``(1) develop and implement a plan for evaluating SBHCs and 
        monitoring quality performances under the awards made under 
        this section; and
            ``(2) submit to the Congress on an annual basis a report on 
        the program under this section.
    ``(l) Definitions.--In this section:
            ``(1) Comprehensive primary health services.--The term 
        `comprehensive primary health services' means the core services 
        offered by SBHCs, which shall include the following:
                    ``(A) Physical.--Comprehensive health assessments, 
                diagnosis, and treatment of minor, acute, and chronic 
                medical conditions and referrals to, and follow-up for, 
                specialty care.
                    ``(B) Mental health.--Mental health assessments, 
                crisis intervention, counseling, treatment, and 
                referral to a continuum of services including emergency 
                psychiatric care, community support programs, inpatient 
                care, and outpatient programs.
                    ``(C) Optional services.--Additional services, 
                which may include oral health, social, and age-
                appropriate health education services, including 
                nutritional counseling.
            ``(2) Medically underserved children and adolescents.--The 
        term `medically underserved children and adolescents' means a 
        population of children and adolescents who are residents of an 
        area designated by the Secretary as an area with a shortage of 
        personal health services and health infrastructure for such 
        children and adolescents.
            ``(3) School-based health clinic.--The term `school-based 
        health clinic' means a health clinic that--
                    ``(A) is located in, or is adjacent to, a school 
                facility of a local educational agency;
                    ``(B) is organized through school, community, and 
                health provider relationships;
                    ``(C) is administered by a sponsoring facility; and
                    ``(D) provides, at a minimum, comprehensive primary 
                health services during school hours to children and 
                adolescents by health professionals in accordance with 
                State and local laws and regulations, established 
                standards, and community practice.
            ``(4) Sponsoring facility.--The term `sponsoring facility' 
        is--
                    ``(A) a hospital;
                    ``(B) a public health department;
                    ``(C) a community health center;
                    ``(D) a nonprofit health care agency;
                    ``(E) a local educational agency; or
                    ``(F) a program administered by the Indian Health 
                Service or the Bureau of Indian Affairs or operated by 
                an Indian tribe or a tribal organization under the 
                Indian Self-Determination and Education Assistance Act, 
                a Native Hawaiian entity, or an urban Indian program 
                under title V of the Indian Health Care Improvement 
                Act.
    ``(m) Authorization of Appropriations.--For purposes of carrying 
out this section, there are authorized to be appropriated $50,000,000 
for fiscal year 2010 and such sums as may be necessary for each of the 
fiscal years 2011 through 2014.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall begin awarding grants under section 399Z-1 of the Public Health 
Service Act, as added by subsection (b), not later than July 1, 2010, 
without regard to whether or not final regulations have been issued 
under section 399Z-1(h) of such Act.

              Subtitle C--National Medical Device Registry

SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY.

    (a) Registry.--
            (1) In general.--Section 519 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 360i) is amended--
                    (A) by redesignating subsection (g) as subsection 
                (h); and
                    (B) by inserting after subsection (f) the 
                following:

                   ``National Medical Device Registry

    ``(g)(1) The Secretary shall establish a national medical device 
registry (in this subsection referred to as the `registry') to 
facilitate analysis of postmarket safety and outcomes data on each 
device that--
            ``(A) is or has been used in or on a patient; and
            ``(B) is--
                    ``(i) a class III device; or
                    ``(ii) a class II device that is implantable, life-
                supporting, or life-sustaining.
    ``(2) In developing the registry, the Secretary shall, in 
consultation with the Commissioner of Food and Drugs, the Administrator 
of the Centers for Medicare & Medicaid Services, the head of the Office 
of the National Coordinator for Health Information Technology, and the 
Secretary of Veterans Affairs, determine the best methods for--
            ``(A) including in the registry, in a manner consistent 
        with subsection (f), appropriate information to identify each 
        device described in paragraph (1) by type, model, and serial 
        number or other unique identifier;
            ``(B) validating methods for analyzing patient safety and 
        outcomes data from multiple sources and for linking such data 
        with the information included in the registry as described in 
        subparagraph (A), including, to the extent feasible, use of--
                    ``(i) data provided to the Secretary under other 
                provisions of this chapter; and
                    ``(ii) information from public and private sources 
                identified under paragraph (3);
            ``(C) integrating the activities described in this 
        subsection with--
                    ``(i) activities under paragraph (3) of section 
                505(k) (relating to active postmarket risk 
                identification);
                    ``(ii) activities under paragraph (4) of section 
                505(k) (relating to advanced analysis of drug safety 
                data); and
                    ``(iii) other postmarket device surveillance 
                activities of the Secretary authorized by this chapter; 
                and
            ``(D) providing public access to the data and analysis 
        collected or developed through the registry in a manner and 
        form that protects patient privacy and proprietary information 
        and is comprehensive, useful, and not misleading to patients, 
        physicians, and scientists.
    ``(3)(A) To facilitate analyses of postmarket safety and patient 
outcomes for devices described in paragraph (1), the Secretary shall, 
in collaboration with public, academic, and private entities, develop 
methods to--
                    ``(i) obtain access to disparate sources of patient 
                safety and outcomes data, including--
                            ``(I) Federal health-related electronic 
                        data (such as data from the Medicare program 
                        under title XVIII of the Social Security Act or 
                        from the health systems of the Department of 
                        Veterans Affairs);
                            ``(II) private sector health-related 
                        electronic data (such as pharmaceutical 
                        purchase data and health insurance claims 
                        data); and
                            ``(III) other data as the Secretary deems 
                        necessary to permit postmarket assessment of 
                        device safety and effectiveness; and
                    ``(ii) link data obtained under clause (i) with 
                information in the registry.
    ``(B) In this paragraph, the term `data' refers to information 
respecting a device described in paragraph (1), including claims data, 
patient survey data, standardized analytic files that allow for the 
pooling and analysis of data from disparate data environments, 
electronic health records, and any other data deemed appropriate by the 
Secretary.
    ``(4) Not later than 36 months after the date of the enactment of 
this subsection, the Secretary shall promulgate regulations for 
establishment and operation of the registry under paragraph (1). Such 
regulations--
            ``(A)(i) in the case of devices that are described in 
        paragraph (1) and sold on or after the date of the enactment of 
        this subsection, shall require manufacturers of such devices to 
        submit information to the registry, including, for each such 
        device, the type, model, and serial number or, if required 
        under subsection (f), other unique device identifier; and
            ``(ii) in the case of devices that are described in 
        paragraph (1) and sold before such date, may require 
        manufacturers of such devices to submit such information to the 
        registry, if deemed necessary by the Secretary to protect the 
        public health;
            ``(B) shall establish procedures--
                    ``(i) to permit linkage of information submitted 
                pursuant to subparagraph (A) with patient safety and 
                outcomes data obtained under paragraph (3); and
                    ``(ii) to permit analyses of linked data;
            ``(C) may require device manufacturers to submit such other 
        information as is necessary to facilitate postmarket 
        assessments of device safety and effectiveness and notification 
        of device risks;
            ``(D) shall establish requirements for regular and timely 
        reports to the Secretary, which shall be included in the 
        registry, concerning adverse event trends, adverse event 
        patterns, incidence and prevalence of adverse events, and other 
        information the Secretary determines appropriate, which may 
        include data on comparative safety and outcomes trends; and
            ``(E) shall establish procedures to permit public access to 
        the information in the registry in a manner and form that 
        protects patient privacy and proprietary information and is 
        comprehensive, useful, and not misleading to patients, 
        physicians, and scientists.
    ``(5) To carry out this subsection, there are authorized to be 
appropriated such sums as may be necessary for fiscal years 2010 and 
2011.''.
            (2) Effective date.--The Secretary of Health and Human 
        Services shall establish and begin implementation of the 
        registry under section 519(g) of the Federal Food, Drug, and 
        Cosmetic Act, as added by paragraph (1), by not later than the 
        date that is 36 months after the date of the enactment of this 
        Act, without regard to whether or not final regulations to 
        establish and operate the registry have been promulgated by 
        such date.
            (3) Conforming amendment.--Section 303(f)(1)(B)(ii) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        333(f)(1)(B)(ii)) is amended by striking ``519(g)'' and 
        inserting ``519(h)''.
    (b) Electronic Exchange and Use in Certified Electronic Health 
Records of Unique Device Identifiers.--
            (1) Recommendations.--The HIT Policy Committee established 
        under section 3002 of the Public Health Service Act (42 U.S.C. 
        300jj-12) shall recommend to the head of the Office of the 
        National Coordinator for Health Information Technology 
        standards, implementation specifications, and certification 
        criteria for the electronic exchange and use in certified 
        electronic health records of a unique device identifier for 
        each device described in section 519(g)(1) of the Federal Food, 
        Drug, and Cosmetic Act, as added by subsection (a).
            (2) Standards, implementation criteria, and certification 
        criteria.--The Secretary of the Health Human Services, acting 
        through the head of the Office of the National Coordinator for 
        Health Information Technology, shall adopt standards, 
        implementation specifications, and certification criteria for 
        the electronic exchange and use in certified electronic health 
        records of a unique device identifier for each device described 
        in paragraph (1), if such an identifier is required by section 
        519(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        360i(f)) for the device.

 Subtitle D--Grants for Comprehensive Programs to Provide Education to 
                Nurses and Create a Pipeline to Nursing

SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.

    (a) Purposes.--It is the purpose of this section to authorize 
grants to--
            (1) address the projected shortage of nurses by funding 
        comprehensive programs to create a career ladder to nursing 
        (including Certified Nurse Assistants, Licensed Practical 
        Nurses, Licensed Vocational Nurses, and Registered Nurses) for 
        incumbent ancillary health care workers;
            (2) increase the capacity for educating nurses by 
        increasing both nurse faculty and clinical opportunities 
        through collaborative programs between staff nurse 
        organizations, health care providers, and accredited schools of 
        nursing; and
            (3) provide training programs through education and 
        training organizations jointly administered by health care 
        providers and health care labor organizations or other 
        organizations representing staff nurses and frontline health 
        care workers, working in collaboration with accredited schools 
        of nursing and academic institutions.
    (b) Grants.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Labor (referred to in this 
section as the ``Secretary'') shall establish a partnership grant 
program to award grants to eligible entities to carry out comprehensive 
programs to provide education to nurses and create a pipeline to 
nursing for incumbent ancillary health care workers who wish to advance 
their careers, and to otherwise carry out the purposes of this section.
    (c) Eligibility.--To be eligible for a grant under this section, an 
entity shall be--
            (1) a health care entity that is jointly administered by a 
        health care employer and a labor union representing the health 
        care employees of the employer and that carries out activities 
        using labor management training funds as provided for under 
        section 302(c)(6) of the Labor Management Relations Act, 1947 
        (29 U.S.C. 186(c)(6));
            (2) an entity that operates a training program that is 
        jointly administered by--
                    (A) one or more health care providers or 
                facilities, or a trade association of health care 
                providers; and
                    (B) one or more organizations which represent the 
                interests of direct care health care workers or staff 
                nurses and in which the direct care health care workers 
                or staff nurses have direct input as to the leadership 
                of the organization;
            (3) a State training partnership program that consists of 
        nonprofit organizations that include equal participation from 
        industry, including public or private employers, and labor 
        organizations including joint labor-management training 
        programs, and which may include representatives from local 
        governments, worker investment agency one-stop career centers, 
        community-based organizations, community colleges, and 
        accredited schools of nursing; or
            (4) a school of nursing (as defined in section 801 of the 
        Public Health Service Act (42 U.S.C. 296)).
    (d) Additional Requirements for Health Care Employer Described in 
Subsection (c).--To be eligible for a grant under this section, a 
health care employer described in subsection (c) shall demonstrate that 
it--
            (1) has an established program within their facility to 
        encourage the retention of existing nurses;
            (2) provides wages and benefits to its nurses that are 
        competitive for its market or that have been collectively 
        bargained with a labor organization; and
            (3) supports programs funded under this section through 1 
        or more of the following:
                    (A) The provision of paid leave time and continued 
                health coverage to incumbent health care workers to 
                allow their participation in nursing career ladder 
                programs, including certified nurse assistants, 
                licensed practical nurses, licensed vocational nurses, 
                and registered nurses.
                    (B) Contributions to a joint labor-management 
                training fund which administers the program involved.
                    (C) The provision of paid release time, incentive 
                compensation, or continued health coverage to staff 
                nurses who desire to work full- or part-time in a 
                faculty position.
                    (D) The provision of paid release time for staff 
                nurses to enable them to obtain a bachelor of science 
                in nursing degree, other advanced nursing degrees, 
                specialty training, or certification program.
                    (E) The payment of tuition assistance which is 
                managed by a joint labor-management training fund or 
                other jointly administered program.
    (e) Other Requirements.--
            (1) Matching requirement.--
                    (A) In general.--The Secretary may not make a grant 
                under this section unless the applicant involved 
                agrees, with respect to the costs to be incurred by the 
                applicant in carrying out the program under the grant, 
                to make available non-Federal contributions (in cash or 
                in kind under subparagraph (B)) toward such costs in an 
                amount equal to not less than $1 for each $1 of Federal 
                funds provided in the grant. Such contributions may be 
                made directly or through donations from public or 
                private entities, or may be provided through the cash 
                equivalent of paid release time provided to incumbent 
                worker students.
                    (B) Determination of amount of non-federal 
                contribution.--Non-Federal contributions required in 
                subparagraph (A) may be in cash or in kind (including 
                paid release time), fairly evaluated, including 
                equipment or services (and excluding indirect or 
                overhead costs). Amounts provided by the Federal 
                Government, or services assisted or subsidized to any 
                significant extent by the Federal Government, may not 
                be included in determining the amount of such non-
                Federal contributions.
            (2) Required collaboration.--Entities carrying out or 
        overseeing programs carried out with assistance provided under 
        this section shall demonstrate collaboration with accredited 
        schools of nursing which may include community colleges and 
        other academic institutions providing associate, bachelor's, or 
        advanced nursing degree programs or specialty training or 
        certification programs.
    (f) Use of Funds.--Amounts awarded to an entity under a grant under 
this section shall be used for the following:
            (1) To carry out programs that provide education and 
        training to establish nursing career ladders to educate 
        incumbent health care workers to become nurses (including 
        certified nurse assistants, licensed practical nurses, licensed 
        vocational nurses, and registered nurses). Such programs shall 
        include one or more of the following:
                    (A) Preparing incumbent workers to return to the 
                classroom through English -as-a-second language 
                education, GED education, pre-college counseling, 
                college preparation classes, and support with entry 
                level college classes that are a prerequisite to 
                nursing.
                    (B) Providing tuition assistance with preference 
                for dedicated cohort classes in community colleges, 
                universities, accredited schools of nursing with 
                supportive services including tutoring and counseling.
                    (C) Providing assistance in preparing for and 
                meeting all nursing licensure tests and requirements.
                    (D) Carrying out orientation and mentorship 
                programs that assist newly graduated nurses in 
                adjusting to working at the bedside to ensure their 
                retention postgraduation, and ongoing programs to 
                support nurse retention.
                    (E) Providing stipends for release time and 
                continued health care coverage to enable incumbent 
                health care workers to participate in these programs.
            (2) To carry out programs that assist nurses in obtaining 
        advanced degrees and completing specialty training or 
        certification programs and to establish incentives for nurses 
        to assume nurse faculty positions on a part-time or full-time 
        basis. Such programs shall include one or more of the 
        following:
                    (A) Increasing the pool of nurses with advanced 
                degrees who are interested in teaching by funding 
                programs that enable incumbent nurses to return to 
                school.
                    (B) Establishing incentives for advanced degree 
                bedside nurses who wish to teach in nursing programs so 
                they can obtain a leave from their bedside position to 
                assume a full- or part-time position as adjunct or 
                full-time faculty without the loss of salary or 
                benefits.
                    (C) Collaboration with accredited schools of 
                nursing which may include community colleges and other 
                academic institutions providing associate, bachelor's, 
                or advanced nursing degree programs, or specialty 
                training or certification programs, for nurses to carry 
                out innovative nursing programs which meet the needs of 
                bedside nursing and health care providers.
    (g) Preference.--In awarding grants under this section the 
Secretary shall give preference to programs that--
            (1) provide for improving nurse retention;
            (2) provide for improving the diversity of the new nurse 
        graduates to reflect changes in the demographics of the patient 
        population;
            (3) provide for improving the quality of nursing education 
        to improve patient care and safety;
            (4) have demonstrated success in upgrading incumbent health 
        care workers to become nurses or which have established 
        effective programs or pilots to increase nurse faculty; or
            (5) are modeled after or affiliated with such programs 
        described in paragraph (4).
    (h) Evaluation.--
            (1) Program evaluations.--An entity that receives a grant 
        under this section shall annually evaluate, and submit to the 
        Secretary a report on, the activities carried out under the 
        grant and the outcomes of such activities. Such outcomes may 
        include--
                    (A) an increased number of incumbent workers 
                entering an accredited school of nursing and in the 
                pipeline for nursing programs;
                    (B) an increasing number of graduating nurses and 
                improved nurse graduation and licensure rates;
                    (C) improved nurse retention;
                    (D) an increase in the number of staff nurses at 
                the health care facility involved;
                    (E) an increase in the number of nurses with 
                advanced degrees in nursing;
                    (F) an increase in the number of nurse faculty;
                    (G) improved measures of patient quality (which may 
                include staffing ratios of nurses, patient satisfaction 
                rates, patient safety measures); and
                    (H) an increase in the diversity of new nurse 
                graduates relative to the patient population.
            (2) General report.--Not later than 2 years after the date 
        of the enactment of this Act, and annually thereafter, the 
        Secretary of Labor shall, using data and information from the 
        reports received under paragraph (1), submit to the Congress a 
        report concerning the overall effectiveness of the grant 
        program carried out under this section.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

 Subtitle E--States Failing To Adhere to Certain Employment Obligations

SEC. 2541. LIMITATION ON FEDERAL FUNDS.

    A State is eligible for Federal funds under the provisions of the 
Public Health Service Act (42 U.S.C. 201 et seq.) only if the State--
            (1) agrees to be subject in its capacity as an employer to 
        each obligation under subdivision A of this division and the 
        amendments made by such subdivision applicable to persons in 
        their capacity as an employer; and
            (2) assures that all political subdivisions in the State 
        will do the same.

   Subtitle F--Standards for Accessibility to Medical Equipment for 
                     Individuals With Disabilities.

SEC. 2541. ACCESS FOR INDIVIDUALS WITH DISABILITIES.

    Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) 
is amended by adding at the end of the following:

``SEC. 510. STANDARDS FOR ACCESSIBILITY OF MEDICAL DIAGNOSTIC 
              EQUIPMENT.

    ``(a) Standards.--Not later than 9 months after the date of 
enactment of the America's Affordable Health Choices Act of 2009, the 
Architectural and Transportation Barriers Compliance Board shall issue 
guidelines setting forth the minimum technical criteria for medical 
diagnostic equipment used in (or in conjunction with) physician's 
offices, clinics, emergency rooms, hospitals, and other medical 
settings. The guidelines shall ensure that such equipment is accessible 
to, and usable by, individuals with disabilities, including provisions 
to ensure independent entry to, use of, and exit from the equipment by 
such individuals to the maximum extent possible.
    ``(b) Medical Diagnostic Equipment Covered.--The guidelines issued 
under subsection (a) for medical diagnostic equipment shall apply to 
equipment that includes examination tables, examination chairs 
(including chairs used for eye examinations or procedures, and dental 
examinations or procedures), weight scales, mammography equipment, x-
ray machines, and other equipment commonly used for diagnostic or 
examination purposes by health professionals.
    ``(c) Interim Standards.--Until the date on which final regulations 
are issued under subsection (d), purchases of examination tables, 
weight scales, and mammography equipment and used in (or in conjunction 
with) medical settings described in subsection (a), shall adhere to the 
following interim accessibility requirements:
            ``(1) Examination tables shall be height-adjustable between 
        a range of at least 18 inches to 37 inches.
            ``(2) Weight scales shall be capable of weighing 
        individuals who remain seated in a wheelchair or other personal 
        mobility aid.
            ``(3) Mammography machines and equipment shall be capable 
        of being used by individuals in a standing, seated, or 
        recumbent position, including individuals who remain seated in 
        a wheelchair or other personal mobility aid.
    ``(d) Regulations.--Not later than 6 months after the date of the 
issuance of the guidelines under subsection (a), each appropriate 
Federal agency authorized to promulgate regulations under this Act or 
under the Americans with Disabilities Act shall--
            ``(1) prescribe regulations in an accessible format as 
        necessary to carry out the provisions of such Act and section 
        504 of this Act that include accessibility standards that are 
        consistent with the guidelines issued under subsection (a); and
            ``(2) ensure that health care providers and health care 
        plans covered by the America's Affordable Health Choices Act of 
        2009 meet the requirements of the Americans with Disabilities 
        Act and section 504, including provisions ensuring that 
        individuals with disabilities receive equal access to all 
        aspects of the health care delivery system.
    ``(e) Review and Amend.--The Architectural and Transportation 
Barriers Compliance Board shall periodically review and, as 
appropriate, amend the guidelines as prescribed under subsection (a). 
Not later than 6 months after the date of the issuance of such revised 
guidelines, revised regulations consistent with such guidelines shall 
be promulgated in an accessible format by the appropriate Federal 
agencies described in subsection (d).''.

                    Subtitle G--Other Grant Programs

SEC. 2551. REDUCING STUDENT-TO-SCHOOL NURSE RATIOS.

    (a) Demonstration Grants.--
            (1) In general.--The Secretary of Education, in 
        consultation with the Secretary of Health and Human Services 
        and the Director of the Centers for Disease Control and 
        Prevention, may make demonstration grants to eligible local 
        education agencies for the purpose of reducing the student-to-
        school nurse ratio in public elementary and secondary schools.
            (2) Special consideration.--In awarding grants under this 
        section, the Secretary of Education shall give special 
        consideration to applications submitted by high-need local 
        educational agencies that demonstrate the greatest need for new 
        or additional nursing services among children in the public 
        elementary and secondary schools served by the agency, in part 
        by providing information on current ratios of students to 
        school nurses.
            (3) Matching funds.--The Secretary of Education may require 
        recipients of grants under this subsection to provide matching 
        funds from non-Federal sources, and shall permit the recipients 
        to match funds in whole or in part with in-kind contributions.
    (b) Report.--Not later than 24 months after the date on which 
assistance is first made available to local educational agencies under 
this section, the Secretary of Education shall submit to the Congress a 
report on the results of the demonstration grant program carried out 
under this section, including an evaluation of the effectiveness of the 
program in improving the student-to-school nurse ratios described in 
subsection (a) and an evaluation of the impact of any resulting 
enhanced health of students on learning.
    (c) Definitions.--For purposes of this section:
            (1) The terms ``elementary school'', ``local educational 
        agency'', and ``secondary school'' have the meanings given to 
        those terms in section 9101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 7801).
            (2) The term ``eligible local educational agency'' means a 
        local educational agency in which the student-to-school nurse 
        ratio in the public elementary and secondary schools served by 
        the agency is 750 or more students to every school nurse.
            (3) The term ``high-need local educational agency'' means a 
        local educational agency--
                    (A) that serves not fewer than 10,000 children from 
                families with incomes below the poverty line; or
                    (B) for which not less than 20 percent of the 
                children served by the agency are from families with 
                incomes below the poverty line.
            (4) The term ``nurse'' means a licensed nurse, as defined 
        under State law.
    (d) Authorization of Appropriations.--To carry out this section, 
there are authorized to be appropriated such sums as may be necessary 
for each of the fiscal years 2010 through 2014.

SEC. 2552. WELLNESS PROGRAM GRANTS.

    (a) Allowance of Grant.--
            (1) In general.--For purposes of this section, the 
        Secretary of Labor shall award wellness grants as determined 
        under this section. Wellness program grants shall be awarded to 
        qualified employers for any plan year in an amount equal to 50 
        percent of the costs paid or incurred by the employer in 
        connection with a qualified wellness program during the plan 
        year. For purposes of the preceding sentence, in the case of 
        any qualified wellness program offered as part of an 
        employment-based health plan, only costs attributable to the 
        qualified wellness program and not to the health plan, or 
        health insurance coverage offered in connection with such a 
        plan, may be taken into account.
            (2) Limitation.--The amount of the grant allowed under 
        paragraph (1) for any plan year shall not exceed the sum of--
                    (A) the product of $200 and the number of employees 
                of the employer not in excess of 200 employees; plus
                    (B) the product of $100 and the number of employees 
                of the employer in excess of 200 employees.
        The wellness grants awarded to an employer under this section 
        shall be for up to 3 years and shall not exceed $50,000.
    (b) Qualified Wellness Program.--For purposes of this section:
            (1) Qualified wellness program.--The term ``qualified 
        wellness program'' means a program that --
                    (A) includes any 3 wellness components described in 
                subsection (c); and
                    (B) is be certified by the Secretary of Labor, in 
                coordination with the Health Choices Commissioner and 
                the Director of the Center for Disease Control and 
                Prevention, as a qualified wellness program under this 
                section.
            (2) Programs must be consistent with research and best 
        practices.--
                    (A) In general.--The Secretary of Labor shall not 
                certify a program as a qualified wellness program 
                unless the program--
                            (i) is newly established or in existence on 
                        the date of enactment of this Act but not yet 
                        meeting the requirements of this section;
                            (ii) is consistent with evidenced-based 
                        researched and best practices, as identified by 
                        persons with expertise in employer health 
                        promotion and wellness programs;
                            (iii) includes multiple, evidenced-based 
                        strategies which are based on the existing and 
                        emerging research and careful scientific 
                        reviews, including the Guide to Community 
                        Preventative Services, the Guide to Clinical 
                        Preventative Services, and the National 
                        Registry for Effective Programs, and
                            (iv) includes strategies which focus on 
                        prevention and support for employee populations 
                        at risk of poor health outcomes.
                    (B) Periodic updating and review.--The Secretary of 
                Labor, in consultation with other appropriate agencies 
                shall establish procedures for periodic review, 
                evaluation, and update of the programs under this 
                subsection.
            (3) Health literacy/accessibility.--The Secretary of Labor 
        shall, as part of the certification process:--
                    (A) ensure that employers make the programs 
                culturally competent. physically and programmatically 
                accessible (including for individuals with 
                disabilities), and appropriate to the health literacy 
                needs of the employees covered by the programs;
                    (B) require a health literacy component to provide 
                special assistance and materials to employees with low 
                literacy skills, limited English and from under-served 
                populations; and
                    (C) require the Secretary of Labor, in consultation 
                with Secretary of Health and Human Services, to compile 
                and disseminate to employer health plans info on model 
                health literacy curricula, instructional programs, and 
                effective intervention strategies.
    (c) Wellness Program Components.--For purposes of this section, the 
wellness program components described in this subsection are the 
following:
            (1) Health awareness component.--A health awareness 
        component which provides for the following:
                    (A) Health education.--The dissemination of health 
                information which addresses the specific needs and 
                health risks of employees.
                    (B) Health screenings.--The opportunity for 
                periodic screenings for health problems and referrals 
                for appropriate follow up measures.
            (2) Employee engagement component.--An employee engagement 
        component which provides for the active engagement of employees 
        in worksite wellness programs through worksite assessments and 
        program planning, onsite delivery, evaluation, and improvement 
        efforts.
            (3) Behavioral change component.--A behavioral change 
        component which provides for altering employee lifestyles to 
        encourage healthy living through counseling, seminars, on-line 
        programs, or self-help materials which provide technical 
        assistance and problem solving skills. such component may 
        include programs relating to--
                    (A) tobacco use;
                    (B) obesity;
                    (C) stress management;
                    (D) physical fitness;
                    (E) nutrition;
                    (F) substance abuse;
                    (G) depression; and
                    (H) mental health promotion (including anxiety).
            (4) Supportive environment component.--A supportive 
        environment component which includes the following:
                    (A) On-site policies.--Policies and services at the 
                worksite which promote a healthy lifestyle, including 
                policies relating to--
                            (i) tobacco use at the worksite;
                            (ii) the nutrition of food available at the 
                        worksite through cafeterias and vending 
                        options;
                            (iii) minimizing stress and promoting 
                        positive mental health in the workplace; and
                            (iv) the encouragement of physical activity 
                        before, during, and after work hours.
    (d) Participation Requirement.--No grant shall be allowed under 
subsection (a) unless the Secretary of Labor in consultation with other 
appropriate agencies, certifies, as a part of any certification 
described in subsection (b), that each wellness program component of 
the qualified wellness program--
            (1) shall be available to all employees of the employer;
            (2) shall not mandate participation by employees; and
            (3) shall not require participation by individual employees 
        as a condition to obtain a premium discount, rebate, deductible 
        reduction, or other financial reward.
    (e) Privacy Protections.--Any employee health information collected 
through participation in an employer wellness program shall be 
confidential and available only to appropriately trained health 
professions as defined by the Secretary of Labor. Employers or 
employees of the employer sponsoring a wellness program shall have no 
access to employee health data. All entities offering employer-
sponsored wellness programs shall be considered ``business associates'' 
pursuant to the American Reinvestment and Recovery Act and must comply 
with privacy protections restricting the release of personal medical 
information.
    (f) Definitions and Special Rules.--For purposes of this section:
            (1) Qualified employer.--The term ``qualified employer'' 
        means an employer that offers a qualified health benefits plan 
        to every employee (including each employee required to be 
        offered coverage under a qualified health benefits plan under 
        subtitle B of title III of subdivision A), and meets the health 
        coverage participation requirements as defined in section 312.
            (2) Certain costs not included.--Costs paid or incurred by 
        an employer for food or health insurance shall not be taken 
        into account under subsection (a).
    (g) Outreach.--
            (1) In general.--The Secretary of the Labor, in conjunction 
        with other appropriate agencies and members of the business 
        community, shall institute an outreach program to inform 
        businesses about the availability of the wellness program grant 
        as well as to educate businesses on how to develop programs 
        according to recognized and promising practices and on how to 
        measure the success of implemented programs.
    (h) Effective Date.--This section shall take effect on January 1, 
2013.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 2553. HEALTH PROFESSIONS TRAINING FOR DIVERSITY PROGRAMS.

    Section 171 of the Workforce Investment Act of 1998 (29 U.S.C. 
2916) is amended by adding at the end the following:
    ``(f) Health Professions Training for Diversity Program.--
            ``(1) In general.--The Secretary shall make available 20 
        grants of no more than $1,000,000 annually to nonprofit 
        organizations for the purposes of providing workforce 
        development training program for those who are currently 
        employed in the health care workforce.
            ``(2) Eligibility.--For the purposes of providing 
        assistance and services under the program established in this 
        subsection, grants are to be awarded to Area Health Education 
        Centers or similar nonprofit organizations involved in the 
        development and implementation of health care workforce 
        development programs and that--
                    ``(A) have a formal affiliation with a hospital or 
                community health center, and institution of higher 
                education as defined by section 101 of the Higher 
                Education Act of 1965;
                    ``(B) have a history of providing program services 
                to minority populations; and
                    ``(C) provide workforce development programs to 
                low-income persons, veterans, or urban and rural 
                underserved communities.''.

        Subtitle H--Long-term Care and Family Caregiver Support

SEC. 2561. LONG-TERM CARE AND FAMILY CAREGIVER SUPPORT.

    (a) Amendments to the Older Americans Act of 1965.--
            (1) Promotion of direct care workforce.--Section 202(b)(1) 
        of the Older Americans Act of 1965 (42 U.S.C. 3012(b)(1)) is 
        amended by inserting before the semicolon the following: ``, 
        and, in carrying out the purposes of this paragraph, shall make 
        recommendations to other Federal entities regarding appropriate 
        and effective means of identifying, promoting, and implementing 
        investments in the direct care workforce necessary to meet the 
        growing demand for long-term health services and supports and 
        assisting States in developing a comprehensive state workforce 
        development plans with respect to such workforce including 
        efforts to systematically assess, track, and report on 
        workforce adequacy and capacity''.
            (2) Personal care attendant workforce advisory panel.--
        Section 202 of such Act (42 U.S.C. 3012) is amended by adding 
        at the end the following new subsection:
    ``(g)(1) The Assistant Secretary shall establish a Personal Care 
Attendant Workforce Advisory Panel and pilot program to improve working 
conditions and training for long term care workers, including home 
health aides, certified nurse aides, and personal care attendants.
    ``(2) The Panel shall include representatives from--
            ``(A) relevant health care agencies and facilities 
        (including personal or home care agencies, home health care 
        agencies, nursing homes and residential care facilities);
            ``(B) the disability community;
            ``(C) the nursing community;
            ``(D) direct care workers (which may include unions and 
        national organizations);
            ``(E) older individuals and family caregivers;
            ``(F) State and federal health care entities; and
            ``(G) experts in workforce development and adult learning.
    ``(3) Within one year after the establishment of the Panel, the 
Panel shall submit a report to the Assistant Secretary articulating 
core competencies for eligible personal or home care aides necessary to 
successfully provide long-term services and supports to eligible 
consumers, as well as recommended training curricula and resources.
    ``(4) Within 180 days after receipt by the Assistant Secretary of 
the report under paragraph (3), the Assistant Secretary shall establish 
a 3-year demonstration program in 4 states to pilot and evaluate the 
effectiveness of the competencies articulated by the Panel and the 
training curricula and training methods recommended by the Panel.
    ``(5) Not later than 1 year after the completion of the 
demonstration program under paragraph (4), the Assistant Secretary 
shall submit to each House of the Congress a report containing the 
results of the evaluations by the Assistant Secretary pursuant to 
paragraph (4), together with such recommendations for legislation or 
administrative action as the Assistant Secretary determines 
appropriate.''.
    (b) Authorization of Additional Appropriations for the Family 
Caregiver Support Program Under the Older Americans Act of 1965.--
Section 303(e)(2) of the Older Americans Act of 1965 (42 U.S.C. 
3023(e)(2)) is amended by striking ``$173,000,000'' and all that 
follows through ``2011'', and inserting ``and $250,000,000 for each of 
the fiscal years 2010, 2011, and 2012''.
    (c) Authorization of Additional Appropriations for the National 
Clearinghouse for Long-Term Care Information.--There is authorized to 
be appropriated $10,000,000 for each of the fiscal years 2010, 2011, 
and 2012 for the operation of the National Clearinghouse for Long-Term 
Care Information established by the Secretary of Health and Human 
Services under section 6021(d) of Public Law 109-171.

                      Subtitle I--Online Resources

SEC. 2571. WEB SITE ON HEALTH CARE LABOR MARKET AND RELATED EDUCATIONAL 
              AND TRAINING OPPORTUNITIES.

    (a) In General.--The Secretary of Labor, in consultation with the 
National Center for Health Workforce Analysis, shall establish and 
maintain a Web site to serve as a comprehensive source of information, 
searchable by workforce region, on the health care labor market and 
related educational and training opportunities.
    (b) Contents.--The Web site maintained under this section shall 
include the following:
            (1) Information on the types of jobs that are currently or 
        are projected to be in high demand in the health care field, 
        including--
                    (A) salary information; and
                    (B) training requirements, such as requirements for 
                educational credentials, licensure, or certification.
            (2) Information on training and educational opportunities 
        within each region for the type jobs described in paragraph 
        (1), including by--
                    (A) type of provider or program (such as public, 
                private nonprofit, or private for-profit);
                    (B) duration;
                    (C) cost (such as tuition, fees, books, laboratory 
                expenses, and other mandatory costs);
                    (D) performance outcomes (such as graduation rates, 
                job placement, average salary, job retention, and wage 
                progression);
                    (E) Federal financial aid participation;
                    (F) average graduate loan debt;
                    (G) student loan default rates;
                    (H) average institutional grant aid provided;
                    (I) Federal and State accreditation information; 
                and
                    (J) other information determined by the Secretary.
            (3) A mechanism for searching and comparing training and 
        educational options for specific health care occupations to 
        facilitate informed career and education choices.
            (4) Financial aid information, including with respect to 
        loan forgiveness, loan cancellation, loan repayment, stipends, 
        scholarships, and grants or other assistance authorized by this 
        division or other Federal or State programs.
    (c) Public Accessibility.--The Web site maintained under this 
section shall--
            (1) be publicly accessible;
            (2) be user friendly and convey information in a manner 
        that is easily understandable; and
            (3) be in English and the second most prevalent language 
        spoken based on the latest Census information.

SEC. 2572. ONLINE HEALTH WORKFORCE TRAINING PROGRAMS.

    Section 171 of the Workforce Investment Act of 1998 (29 U.S.C. 
2916) (as amended by section 2553) is further amended by adding at the 
end the following:
    ``(g) Online Health Workforce Training Program.--
            ``(1) Grant program.--
                    ``(A) In general.--The Secretary shall award 
                National Health Workforce Online Training Grants on a 
                competitive basis to eligible entities to enable such 
                entities to carry out training for individuals to 
                attain or advance in health care occupations. An entity 
                may leverage such grant with other Federal, State, 
                local, and private resources, in order to expand the 
                participation of businesses, employees, and individuals 
                in such training programs.
                    ``(B) Eligibility.--In order to receive a grant 
                under the program established under this paragraph--
                            ``(i) an entity shall be an educational 
                        institution, community-based organization, non-
                        profit organization, workforce investment 
                        board, or local or county government; and
                            ``(ii) an entity shall provide online 
                        workforce training for individuals seeking to 
                        attain or advance in health care occupations, 
                        including nursing, nursing assistants, 
                        dentistry, pharmacy, health care management and 
                        administration, public health, health 
                        information systems analysis, medical 
                        assistants, and other health care practitioner 
                        and support occupations.
                    ``(C) Priority.--Priority in awarding grants under 
                this paragraph shall be given to entities that--
                            ``(i) have demonstrated experience in 
                        implementing and operating online worker skills 
                        training and education programs;
                            ``(ii) have demonstrated experience 
                        coordinating activities, where appropriate, 
                        with the workforce investment system; and
                            ``(iii) conduct training for occupations 
                        with national or local shortages.
                    ``(D) Data collection.--Grantees under this 
                paragraph shall collect and report information on--
                            ``(i) the number of participants;
                            ``(ii) the services received by the 
                        participants;
                            ``(iii) program completion rates;
                            ``(iv) factors determined as significantly 
                        interfering with program participation or 
                        completion;
                            ``(v) the rate of job placement; and
                            ``(vi) other information as determined as 
                        needed by the Secretary.
                    ``(E) Outreach.--Grantees under this paragraph 
                shall conduct outreach activities to disseminate 
                information about their program and results to 
                workforce investment boards, local governments, 
                educational institutions, and other workforce training 
                organizations.
                    ``(F) Performance levels.--The Secretary shall 
                establish indicators of performance that will be used 
                to evaluate the performance of grantees under this 
                paragraph in carrying out the activities described in 
                this paragraph. The Secretary shall negotiate and reach 
                agreement with each grantee regarding the levels of 
                performance expected to be achieved by the grantee on 
                the indicators of performance.
                    ``(G) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary to carry 
                out this subsection $50,000,000 for fiscal years 2011 
                through 2020.
            ``(2) Online health professions training program 
        clearinghouse.--
                    ``(A) Description of grant.--The Secretary shall 
                award one grant to an eligible postsecondary 
                educational institution to provide the services 
                described in this paragraph.
                    ``(B) Eligibility.--To be eligible to receive a 
                grant under this paragraph, a postsecondary educational 
                institution shall--
                            ``(i) have demonstrated the ability to 
                        disseminate research on best practices for 
                        implementing workforce investment programs; and
                            ``(ii) be a national leader in producing 
                        cutting-edge research on technology related to 
                        workforce investment systems under subtitle B.
                    ``(C) Services.--The postsecondary educational 
                institution that receives a grant under this paragraph 
                shall use such grant--
                            ``(i) to provide technical assistance to 
                        entities that receive grants under paragraph 
                        (1);
                            ``(ii) to collect and nationally 
                        disseminate the data gathered by entities that 
                        receive grants under paragraph (1); and
                            ``(iii) to disseminate the best practices 
                        identified by the National Health Workforce 
                        Online Training Grant Program to other 
                        workforce training organizations.
                    ``(D) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary to carry 
                out this subsection $1,000,000 for fiscal years 2011 
                through 2020.''.

  DIVISION III--HOUSE COMMITTEE ON EDUCATION AND LABOR: INVESTING IN 
                               EDUCATION

SECTION 1. SHORT TITLE.

    This division may be cited as the ``Student Aid and Fiscal 
Responsibility Act of 2009''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
              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.
 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.

SEC. 3. REFERENCES.

    Except as otherwise expressly provided, whenever in this division 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Higher 
Education Act of 1965 (20 U.S.C. 1001 et seq.).

              TITLE I--INVESTING IN STUDENTS AND FAMILIES

          Subtitle A--Increasing College Access and Completion

SEC. 101. FEDERAL PELL GRANTS.

    (a) Amount of Grants.--Section 401(b) (20 U.S.C. 1070a(b)) is 
amended--
            (1) by amending paragraph (2)(A) to read as follows:
                    ``(A) The amount of the Federal Pell Grant for a 
                student eligible under this part shall be--
                            ``(i) the maximum Federal Pell Grant, as 
                        specified in the last enacted appropriation Act 
                        applicable to that award year, plus
                            ``(ii) the amount of the increase 
                        calculated under paragraph (8)(B) for that 
                        year, less
                            ``(iii) an amount equal to the amount 
                        determined to be the expected family 
                        contribution with respect to that student for 
                        that year.''; and
            (2) by amending paragraph (8), as amended by the Higher 
        Education Opportunity Act (Public Law 110-315), to read as 
        follows:
            ``(8) Additional funds.--
                    ``(A) In general.--There are authorized to be 
                appropriated, and there are appropriated, to carry out 
                subparagraph (B) of this paragraph (in addition to any 
                other amounts appropriated to carry out this section 
                and out of any money in the Treasury not otherwise 
                appropriated) the following amounts--
                            ``(i) $2,030,000,000 for fiscal year 2008;
                            ``(ii) $2,733,000,000 for fiscal year 2009; 
                        and
                            ``(iii) such sums as may be necessary for 
                        fiscal year 2010 and each subsequent fiscal 
                        year to provide the amount of increase of the 
                        maximum Federal Pell Grant required by clauses 
                        (ii) and (iii) of subparagraph (B).
                    ``(B) Increase in federal pell grants.--The amounts 
                made available pursuant to subparagraph (A) shall be 
                used to increase the amount of the maximum Federal Pell 
                Grant for which a student shall be eligible during an 
                award year, as specified in the last enacted 
                appropriation Act applicable to that award year, by--
                            ``(i) $490 for each of the award years 
                        2008-2009 and 2009-2010;
                            ``(ii) $690 for the award year 2010-2011; 
                        and
                            ``(iii) the amount determined under 
                        subparagraph (C) for each succeeding award 
                        year.
                    ``(C) Inflation-adjusted amounts.--
                            ``(i) Award year 2011-2012.--For award year 
                        2011-2012, the amount determined under this 
                        subparagraph for purposes of subparagraph 
                        (B)(iii) shall be equal to--
                                    ``(I) $5,550 or the total maximum 
                                Federal Pell Grant for the preceding 
                                award year (as determined under clause 
                                (iv)(II)), whichever is greater, 
                                increased by a percentage equal to the 
                                annual adjustment percentage for award 
                                year 2011-2012; reduced by
                                    ``(II) $4,860 or the maximum 
                                Federal Pell Grant for which a student 
                                was eligible for the preceding award 
                                year, as specified in the last enacted 
                                appropriation Act applicable to that 
                                year, whichever is greater; and
                                    ``(III) rounded to the nearest $5.
                            ``(ii) Subsequent award years.--For award 
                        year 2012-2013 and each of the subsequent award 
                        years, the amount determined under this 
                        subparagraph for purposes of subparagraph 
                        (B)(iii) shall be equal to--
                                    ``(I) the total maximum Federal 
                                Pell Grant for the preceding award year 
                                (as determined under clause (iv)(II)), 
                                increased by a percentage equal to the 
                                annual adjustment percentage for the 
                                award year for which the amount under 
                                this subparagraph is being determined; 
                                reduced by
                                    ``(II) $4,860 or the maximum 
                                Federal Pell Grant for which a student 
                                was eligible for the preceding award 
                                year, as specified in the last enacted 
                                appropriation Act applicable to that 
                                year, whichever is greater; and
                                    ``(III) rounded to the nearest $5.
                            ``(iii) Limitation on decreases.--
                        Notwithstanding clauses (i) and (ii), if the 
                        amount determined under clause (i) or (ii) for 
                        an award year is less than the amount 
                        determined under this paragraph for the 
                        preceding award year, the amount determined 
                        under such clause for such award year shall be 
                        the amount determined under this paragraph for 
                        the preceding award year.
                            ``(iv) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) the term `annual adjustment 
                                percentage' as it applies to an award 
                                year is equal to the sum of--
                                            ``(aa) the estimated 
                                        percentage change in the 
                                        Consumer Price Index (as 
                                        determined by the Secretary, 
                                        using the definition in section 
                                        478(f)) for the most recent 
                                        calendar year ending prior to 
                                        the beginning of that award 
                                        year; and
                                            ``(bb) one percentage 
                                        point; and
                                    ``(II) the term `total maximum 
                                Federal Pell Grant' as it applies to a 
                                preceding award year is equal to the 
                                sum of--
                                            ``(aa) the maximum Federal 
                                        Pell Grant for which a student 
                                        is eligible during an award 
                                        year, as specified in the last 
                                        enacted appropriation Act 
                                        applicable to that preceding 
                                        award year; and
                                            ``(bb) the amount of the 
                                        increase in the maximum Federal 
                                        Pell Grant required by this 
                                        paragraph for that preceding 
                                        award year.
                    ``(D) Program requirements and operations otherwise 
                unaffected.--Except as provided in subparagraphs (B) 
                and (C), nothing in this paragraph shall be construed 
                to alter the requirements and operations of the Federal 
                Pell Grant Program as authorized under this section, or 
                to authorize the imposition of additional requirements 
                or operations for the determination and allocation of 
                Federal Pell Grants under this section.
                    ``(E) Availability of funds.--The amounts made 
                available by subparagraph (A) for any fiscal year shall 
                be available beginning on October 1 of that fiscal 
                year, and shall remain available through September 30 
                of the succeeding fiscal year.''.
    (b) Conforming Amendments.--Title IV (20 U.S.C. 1070 et seq.) is 
further amended--
            (1) in section 401(b)(6), as amended by the Higher 
        Education Opportunity Act (Public Law 110-315), by striking 
        ``the grant level specified in the appropriate Appropriation 
        Act for this subpart for such year'' and inserting ``the 
        Federal Pell Grant amount, determined under paragraph (2)(A), 
        for which a student is eligible during such award year'';
            (2) in section 402D(d)(1), by striking ``exceed the maximum 
        appropriated Pell Grant'' and inserting ``exceed the Federal 
        Pell Grant amount, determined under section 401(b)(2)(A), for 
        which a student is eligible'';
            (3) in section 435(a)(5)(A)(i)(I), by striking ``one-half 
        the maximum Federal Pell Grant award for which a student would 
        be eligible'' and inserting ``one-half the Federal Pell Grant 
        amount, determined under section 401(b)(2)(A), for which a 
        student would be eligible'';
            (4) in section 483(e)(3)(ii), by striking ``based on the 
        maximum Federal Pell Grant award at the time of application'' 
        and inserting ``based on the Federal Pell Grant amount, 
        determined under section 401(b)(2)(A), for which a student is 
        eligible at the time of application'';
            (5) in section 485E(b)(1)(A), by striking ``of such 
        students' potential eligibility for a maximum Federal Pell 
        Grant under subpart 1 of part A'' and inserting ``of such 
        students' potential eligibility for the Federal Pell Grant 
        amount, determined under section 401(b)(2)(A), for which the 
        student would be eligible''; and
            (6) in section 894(f)(2)(C)(ii)(I), by striking ``the 
        maximum Federal Pell Grant for each award year'' and inserting 
        ``the Federal Pell Grant amount, determined under section 
        401(b)(2)(A), for which a student may be eligible for each 
        award year''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
of this section shall take effect on July 1, 2010.

SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVATION FUND.

    (a) Header.--Part E of title VII (20 U.S.C. 1141 et seq.) is 
amended by striking the header of such part and inserting the 
following:

       ``PART E--COLLEGE ACCESS AND COMPLETION INNOVATION FUND''.

    (b) Purpose.--Part E of title VII (20 U.S.C. 1141 et seq.) is 
further amended by inserting before section 781 the following:

``SEC. 780. PURPOSES.

    ``The purposes of this part are--
            ``(1) to promote innovation in postsecondary education 
        practices and policies by institutions of higher education, 
        States, and nonprofit organizations to improve student success, 
        completion, and post-completion employment, particularly for 
        students from groups that are underrepresented in postsecondary 
        education; and
            ``(2) to assist States in developing longitudinal data 
        systems, common metrics, and reporting systems to enhance the 
        quality and availability of information about student success, 
        completion, and post-completion employment.''.
    (c) Authorization and Appropriation.--Section 781(a) (20 U.S.C. 
1141(a)) is amended to read as follows:
    ``(a) Authorization and Appropriation.--
            ``(1) In general.--There are authorized to be appropriated, 
        and there are appropriated, to carry out this part (in addition 
        to any other amounts appropriated to carry out this part and 
        out of any money in the Treasury not otherwise appropriated), 
        $600,000,000 for each of the fiscal years 2010 through 2014.
            ``(2) Allocations.--Of the amount appropriated for any 
        fiscal year under paragraph (1)--
                    ``(A) 25 percent shall be made available to carry 
                out section 781;
                    ``(B) 50 percent shall be made available to carry 
                out section 782;
                    ``(C) 23 percent shall be made available to carry 
                out section 783; and
                    ``(D) 2 percent shall be made available to carry 
                out section 784.''.
    (d) State Grants and Grants to Eligible Entities.--Part E of title 
VII (20 U.S.C. 1141 et seq.) is further amended by adding at the end 
the following:

``SEC. 782. STATE INNOVATION COMPLETION GRANTS.

    ``(a) Program Authorization.--From the amount appropriated under 
section 781(a)(2)(B) to carry out this section, the Secretary shall 
award grants to States on a competitive basis to promote student 
persistence in, and completion of, postsecondary education.
    ``(b) Federal Share; Non-Federal Share.--
            ``(1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be equal to \2/3\ of the 
        costs of the activities and services described in subsection 
        (d)(1) that are carried out under the grant.
            ``(2) Non-federal share.--The amount of the non-Federal 
        share under this section shall be equal to \1/3\ of the costs 
        of the activities and services described in subsection (d)(1). 
        The non-Federal share may be in cash or in kind, and may be 
        provided from State resources, contributions from private 
        organizations, or both.
            ``(3) Supplement, not supplant.--The Federal and non-
        Federal shares required by this paragraph shall be used to 
        supplement, and not supplant, State and private resources that 
        would otherwise be expended to carry out activities and 
        services to promote student persistence in and completion of 
        postsecondary education.
    ``(c) Application and Selection.--
            ``(1) Application requirements.--For each fiscal year for 
        which a State desires to receive a grant under this section, 
        the State agency with jurisdiction over higher education, or 
        another agency designated by the Governor or chief executive of 
        the State to administer the grant program under this section, 
        shall submit an application to the Secretary at such time, in 
        such manner, and containing such information as the Secretary 
        may require. Such application shall include--
                    ``(A) a description of the State's capacity to 
                administer the grant under this section;
                    ``(B) a description of the State's plans for using 
                the grant funds for activities described in subsection 
                (d)(1), including plans for how the State will make 
                special efforts to provide benefits to students in the 
                State who are from groups that are underrepresented in 
                postsecondary education;
                    ``(C) a description of how the State will provide 
                for the non-Federal share from State resources, private 
                contributions, or both;
                    ``(D) a description of--
                            ``(i) the administrative system that the 
                        State has in place to administer the activities 
                        and services described in subsection (d)(1); or
                            ``(ii) the plan to develop such 
                        administrative system;
                    ``(E) a description of the data system the State 
                has or will have in place to measure the performance 
                and progress toward the State's goals included in the 
                Access and Completion Plan submitted, or that will be 
                submitted, under paragraph (2)(A); and
                    ``(F) the assurances under paragraph (2).
            ``(2) State assurances.--The assurances required in 
        paragraph (1)(F) shall include an assurance of each of the 
        following:
                    ``(A) That the State will submit, not later than 
                July 1, 2011, an Access and Completion Plan to increase 
                the State's rate of persistence in and completion of 
                postsecondary education. Such plan shall include--
                            ``(i) the State's annual and long-term 
                        quantifiable goals with respect to--
                                    ``(I) the rates of postsecondary 
                                enrollment, persistence, and 
                                completion, disaggregated by income, 
                                race, ethnicity, sex, disability, and 
                                age of students;
                                    ``(II) closing gaps in enrollment, 
                                persistence, and completion rates for 
                                students from groups that are 
                                underrepresented in postsecondary 
                                education;
                                    ``(III) targeting education and 
                                training programs to address labor 
                                market needs in the State, as such 
                                needs are determined by the State, or 
                                the State in coordination with the 
                                State public employment service, the 
                                State workforce investment board, or 
                                industry or sector partnerships in the 
                                State; and
                                    ``(IV) improving coordination 
                                between two-year and four-year 
                                institutions of higher education in the 
                                State, including supporting 
                                comprehensive articulation agreements 
                                between such institutions; and
                            ``(ii) the State's plan to develop an 
                        interoperable statewide longitudinal data 
                        system that--
                                    ``(I) can be linked to other data 
                                systems, as applicable, including 
                                elementary and secondary education and 
                                workforce data systems;
                                    ``(II) will collect, maintain, 
                                disaggregate (by institution, income, 
                                race, ethnicity, sex, disability, and 
                                age of students), and analyze 
                                postsecondary education and workforce 
                                information, including--
                                            ``(aa) postsecondary 
                                        education enrollment, 
                                        persistence, and completion 
                                        information;
                                            ``(bb) post-completion 
                                        employment outcomes of students 
                                        who enrolled in postsecondary 
                                        programs and training programs 
                                        offered by eligible training 
                                        providers under the Workforce 
                                        Investment Act of 1998 (29 
                                        U.S.C. 2801 et seq.);
                                            ``(cc) postsecondary 
                                        education and employment 
                                        outcomes of students who move 
                                        out of the State; and
                                            ``(dd) postsecondary 
                                        instructional workforce 
                                        information; and
                                    ``(III) makes the information 
                                described in subclause (I) available to 
                                the general public in a manner that is 
                                transparent and user-friendly.
                    ``(B) That the State has a comprehensive planning 
                or policy formulation process with respect to 
                increasing postsecondary enrollment, persistence, and 
                completion that--
                            ``(i) encourages coordination between the 
                        State administration of grants under this 
                        section and similar State programs;
                            ``(ii) encourages State policies that are 
                        designed to improve rates of enrollment and 
                        persistence in, and completion of, 
                        postsecondary education for all categories of 
                        institutions of higher education described in 
                        section 132(d) in the State;
                            ``(iii) considers the postsecondary 
                        education needs of students from groups that 
                        are underrepresented in postsecondary 
                        education;
                            ``(iv) considers the resources of public 
                        and private institutions of higher education, 
                        organizations, and agencies within the State 
                        that are capable of providing access to 
                        postsecondary education opportunities within 
                        the State; and
                            ``(v) provides for direct, equitable, and 
                        active participation in the comprehensive 
                        planning or policy formulation process or 
                        processes, through membership on State planning 
                        commissions, State advisory councils, or other 
                        State entities established by the State and 
                        consistent with State law, by representatives 
                        of--
                                    ``(I) institutions of higher 
                                education, including at least one 
                                member from a junior or community 
                                college (as defined in section 312(f));
                                    ``(II) students;
                                    ``(III) other providers of 
                                postsecondary education services 
                                (including organizations providing 
                                access to such services);
                                    ``(IV) the general public in the 
                                State; and
                                    ``(V) postsecondary education 
                                faculty members, including at least one 
                                faculty member whose primary 
                                responsibilities are teaching and 
                                scholarship.
                    ``(C) That the State will incorporate policies and 
                practices that, through the activities funded under 
                this section, are determined to be effective in 
                improving rates of postsecondary education enrollment, 
                persistence, and completion into the future 
                postsecondary education policies and practices of the 
                State to ensure that the benefits achieved through the 
                activities funded under this section continue beyond 
                the period of the grant.
                    ``(D) That the State will participate in the 
                evaluation required under section 784.
            ``(3) Subgrants to nonprofit organizations.--A State 
        receiving a payment under this section may elect to make a 
        subgrant to one or more nonprofit organizations in the State, 
        including agencies with agreements with the Secretary under 
        subsections (b) and (c) of section 428 on the date of the 
        enactment of the Student Aid and Fiscal Responsibility Act of 
        2009, or a partnership of such organizations, to carry out 
        activities and services described in subsection (d)(1), if the 
        nonprofit organization or partnership--
                    ``(A) was in existence on the day before the date 
                of the enactment of the Student Aid and Fiscal 
                Responsibility Act of 2009; and
                    ``(B) as of such day, was participating in 
                activities and services related to promoting 
                persistence in, and completion of, postsecondary 
                education, such as the activities and services 
                described in subsection (d)(1).
            ``(4) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to States that enter into a 
        partnership with one of the following entities to carry out the 
        activities and services described in subsection (d)(1):
                    ``(A) A philanthropic organization, as such term is 
                defined in section 781(i)(1).
                    ``(B) An agency with an agreement with the 
                Secretary under subsections (b) and (c) of section 428 
                on the date of the enactment of Student Aid and Fiscal 
                Responsibility Act of 2009.
    ``(d) Uses of Funds.--
            ``(1) Authorized uses.--A State receiving a grant under 
        this section shall use the grant funds to--
                    ``(A) provide programs in such State that increase 
                persistence in, and completion of, postsecondary 
                education, which may include--
                            ``(i) assisting institutions of higher 
                        education in providing financial literacy, 
                        education, and counseling to enrolled students;
                            ``(ii) assisting students enrolled in an 
                        institution of higher education to reduce the 
                        amount of loan debt incurred by such students;
                            ``(iii) providing grants to students 
                        described in section 415A(a)(1), in accordance 
                        with the terms of that section; and
                            ``(iv) carrying out the activities 
                        described in section 415E(a); and
                    ``(B) support the development and implementation of 
                a statewide longitudinal data system, as described in 
                subsection (c)(2)(A)(ii).
            ``(2) Prohibited uses.--Funds made available under this 
        section shall not be used to promote any lender's loans.
            ``(3) Restrictions on use of funds.--A State--
                    ``(A) shall use not less than \1/3\ of the sum of 
                the Federal and non-Federal share used for paragraph 
                (1)(A) on activities that benefit students enrolled in 
                junior or community colleges (as defined in section 
                312(f)), two-year public institutions, or two-year 
                programs of instruction at four-year public 
                institutions;
                    ``(B) may use not more than 10 percent of the sum 
                of the Federal and non-Federal share under this section 
                for activities described in paragraph (1)(B); and
                    ``(C) may use not more than 6 percent of the sum of 
                the Federal and non-Federal share under this section 
                for administrative purposes relating to the grant under 
                this section.
    ``(e) Annual Report.--Each State receiving a grant under this 
section shall submit to the Secretary an annual report on--
            ``(1) the activities and services described in subsection 
        (d)(1) that are carried out with such grant;
            ``(2) the effectiveness of such activities and services in 
        increasing postsecondary persistence and completion, as 
        determined by measurable progress in achieving the State's 
        goals for persistence and completion described in the Access 
        and Completion Plan submitted by the State under subsection 
        (c)(2)(A), if such plan has been submitted; and
            ``(3) any other information or assessments the Secretary 
        may require.
    ``(f) Definitions.--In this section:
            ``(1) Industry or sector partnership.--The term `industry 
        or sector partnership' means a workforce collaborative that 
        organizes key stakeholders in a targeted industry cluster into 
        a working group that focuses on the human capital needs of a 
        targeted industry cluster and that includes, at the appropriate 
        stage of development of the partnership--
                    ``(A) representatives of multiple firms or 
                employers (including workers) in a targeted industry 
                cluster, including small- and medium-sized employers 
                when practicable;
                    ``(B) 1 or more representatives of State labor 
                organizations, central labor coalitions, or other labor 
                organizations;
                    ``(C) 1 or more representatives of local workforce 
                investment boards;
                    ``(D) 1 or more representatives of postsecondary 
                educational institutions or other training providers; 
                and
                    ``(E) 1 or more representatives of State workforce 
                agencies or other entities providing employment 
                services.
            ``(2) State public employment service.--The term `State 
        public employment service' has the meaning given such term in 
        section 502(a)(9) of the Student Aid and Fiscal Responsibility 
        Act of 2009.
            ``(3) State workforce investment board; local workforce 
        investment board.--The terms `State workforce investment board' 
        and `local workforce investment board' have the meanings given 
        such terms in section 502(a)(10) of the Student Aid and Fiscal 
        Responsibility Act of 2009.

``SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLETION NATIONAL 
              ACTIVITIES.

    ``(a) Programs Authorized.--From the amount appropriated under 
section 781(a)(2)(C) to carry out this section, the Secretary shall 
award grants, on a competitive basis, to eligible entities in 
accordance with this section to conduct innovative programs that 
advance knowledge about, and adoption of, policies and practices that 
increase the number of individuals with postsecondary degrees or 
certificates.
    ``(b) Eligible Entities.--The Secretary is authorized to award 
grants under subsection (a) to--
            ``(1) institutions of higher education;
            ``(2) States;
            ``(3) nonprofit organizations with demonstrated experience 
        in the operation of programs to increase postsecondary 
        completion;
            ``(4) philanthropic organizations (as such term is defined 
        in section 781(i)(1));
            ``(5) entities receiving a grant under chapter 1 of subpart 
        2 of part A of title IV; and
            ``(6) consortia of any of the entities described in 
        paragraphs (1) through (5).
    ``(c) Innovation Grants.--
            ``(1) Minimum award.--A grant awarded under subsection (a) 
        shall be not less than $1,000,000.
            ``(2) Grants uses.--The Secretary's authority to award 
        grants under subsection (a) includes--
                    ``(A) the authority to award to an eligible entity 
                a grant in an amount equal to all or part of the amount 
                of funds received by such entity from philanthropic 
                organizations (as such term is defined in section 
                781(i)(1)) to conduct innovative programs that advance 
                knowledge about, and adoption of, policies and 
                practices that increase the number of individuals with 
                postsecondary degrees or certificates; and
                    ``(B) the authority to award an eligible entity a 
                grant to develop 2-year programs that provide 
                supplemental grant or loan benefits to students that--
                            ``(i) are designed to improve student 
                        outcomes, including degree completion, 
                        graduation without student loan debt, and post-
                        completion employment;
                            ``(ii) are in addition to the student 
                        financial aid available under title IV of this 
                        Act; and
                            ``(iii) do not result in the reduction of 
                        the amount of that aid or any other student 
                        financial aid for which a student is otherwise 
                        eligible under Federal law.
            ``(3) Application.--To be eligible to receive a grant under 
        subsection (a), an eligible entity shall submit an application 
        at such time, in such manner, and containing such information 
        as the Secretary shall require.
            ``(4) Priorities.--In awarding grants under subsection (a), 
        the Secretary shall give priority to applications that--
                    ``(A) are from an eligible entity with demonstrated 
                experience in serving students from groups that are 
                underrepresented in postsecondary education, including 
                institutions of higher education that are eligible for 
                assistance under title III or V, or are from a 
                consortium that includes an eligible entity with such 
                experience;
                    ``(B) are from an eligible entity that is a public 
                institution of higher education that does not 
                predominantly provide an educational program for which 
                it awards a bachelor's degree (or an equivalent 
                degree), or from a consortium that includes at least 
                one such institution;
                    ``(C) include activities to increase degree or 
                certificate completion in the fields of science, 
                technology, engineering, and mathematics, including 
                preparation for, or entry into, postbaccaluareate 
                study, especially for women and other groups of 
                students who are underrepresented in such fields;
                    ``(D) are from an eligible entity that is a 
                philanthropic organization with the primary purpose of 
                providing scholarships and support services to students 
                from groups that are underrepresented in postsecondary 
                education, or are from a consortium that includes such 
                an organization; or
                    ``(E) are from an eligible entity that encourages 
                partnerships between institutions of higher education 
                with high degree-completion rates and institutions of 
                higher education with low degree-completion rates from 
                the same category of institutions described in section 
                132(d) to facilitate the sharing of information 
                relating to, and the implementation of, best practices 
                for increasing postsecondary completion.
            ``(5) Technical assistance.--The Secretary may reserve up 
        to $5,000,000 per year to award grants and contracts to provide 
        technical assistance to eligible entities receiving a grant 
        under subsection (a), including technical assistance on the 
        evaluation conducted in accordance with section 784 and 
        establishing networks of eligible entities receiving grants 
        under such subsection.
    ``(d) Reports.--
            ``(1) Annual reports by entities.--Each eligible entity 
        receiving a grant under subsection (a) shall submit to the 
        Secretary an annual report on--
                    ``(A) the effectiveness of the program carried out 
                with such grant in increasing postsecondary completion, 
                as determined by measurable progress in achieving the 
                goals of the program, as described in the application 
                for such grant; and
                    ``(B) any other information or assessments the 
                Secretary may require.
            ``(2) Annual report to congress.--The Secretary shall 
        submit to the authorizing committees an annual report on grants 
        awarded under subsection (a), including--
                    ``(A) the amount awarded to each eligible entity 
                receiving a grant under such subsection; and
                    ``(B) a description of the activities conducted by 
                each such eligible entity.

``SEC. 784. EVALUATION.

    ``From the amount appropriated under section 781(a)(2)(D), the 
Director of the Institute of Education Sciences shall evaluate the 
programs funded under this part. Not later than January 30, 2016, the 
Director shall issue a final report on such evaluation to the 
authorizing committees and the Secretary, and shall make such report 
available to the public.

``SEC. 785. VETERANS RESOURCE OFFICER GRANTS.

    ``(a) Program Authorized.--The Secretary shall award grants, on a 
competitive basis, to eligible institutions of higher education to hire 
a Veterans Resource Officer to increase the college completion rates 
for veterans enrolled at such institutions.
    ``(b) Definitions.--In this section:
            ``(1) Eligible institution of higher education.--The term 
        `eligible institution of higher education' means an institution 
        of higher education that has an enrollment of at least 100 
        full-time equivalent students who are veterans.
            ``(2) Full-time equivalent students.--The term `full-time 
        equivalent students' has the meaning given such term in section 
        312(e).
            ``(3) Veteran.--The term `veteran' has the meaning give 
        such term in section 480(c).
    ``(c) Application.--To be eligible to receive a grant under this 
section, an eligible institution of higher education shall submit an 
application at such time, in such manner, and containing such 
information as the Secretary shall require.
    ``(d) Uses of Funds.--
            ``(1) In general.--An eligible institution of higher 
        education receiving a grant under this section shall use such 
        grant to hire 1 or 2 Veterans Resource Officers (in the case of 
        an institution that has an enrollment of at least 200 full-time 
        equivalent students who are veterans) to serve in the office of 
        campus programs, or a similar office, at such institution and 
        carry out the activities described in paragraph (2).
            ``(2) Activities.--A Veterans Resource Officer shall carry 
        out activities at an eligible institution of higher education 
        to help increase the completion rates for veterans enrolled at 
        such institution, which shall include the following activities:
                    ``(A) Serving as a link between student veterans 
                and the staff of the institution.
                    ``(B) Serving as a link between student veterans 
                and local facilities of the Department of Veterans 
                Affairs.
                    ``(C) Organizing and advising student veterans 
                organization.
                    ``(D) Organizing veterans oriented group functions 
                and events.
                    ``(E) Maintaining newsletters and listserves to 
                distribute news and information to all student 
                veterans.
                    ``(F) Organizing new student veterans campus 
                orientation.
                    ``(G) Ensuring that the Department of Veterans 
                Affairs certifying official at such institution is 
                properly trained.
            ``(3) Priority.--To the extent practicable, each 
        institution described in paragraph (1) shall give priority to 
        hiring a veteran to serve as a Veterans Resource Officer.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2010 and each succeeding fiscal year.''.

SEC. 103. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES 
              AND OTHER MINORITY-SERVING INSTITUTIONS.

    Section 371 (20 U.S.C. 1067q) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``section 502'' 
                and inserting ``section 502(a)'';
                    (B) in paragraph (3), by striking ``section 316'' 
                and inserting ``section 316(b)'';
                    (C) in paragraph (5), by striking ``in subsection 
                (c)'' and inserting ``in section 318(b)'';
                    (D) in paragraph (6), by striking ``in subsection 
                (c)'' and inserting ``in section 320(b)''; and
                    (E) in paragraph (7), by striking ``in subsection 
                (c)'' and inserting ``in section 319(b)'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(A), by striking 
                ``$255,000,000'' and all that follows and inserting 
                ``$255,000,000 for each of the fiscal years 2008 
                through 2019.''; and
                    (B) by amending paragraph (2)(B) to read as 
                follows:
                    ``(B) Stem and articulation programs.--From the 
                amount made available for allocation under this 
                subparagraph by subparagraph (A)(i) for any fiscal 
                year--
                            ``(i) 90 percent shall be available for 
                        Hispanic-serving institutions for activities 
                        described in sections 503 and 513, with a 
                        priority given to applications that propose--
                                    ``(I) to increase the number of 
                                Hispanic and other low-income students 
                                attaining degrees in the fields of 
                                science, technology, engineering, or 
                                mathematics; and
                                    ``(II) to develop model transfer 
                                and articulation agreements between 2-
                                year Hispanic-serving institutions and 
                                4-year institutions in such fields; and
                            ``(ii) 10 percent shall be available for 
                        grants under section 355.'';
                    (C) in paragraph (2)(C)(ii), by striking ``and 
                shall be available for a competitive'' and all that 
                follows and inserting ``and shall be made available as 
                grants under section 318 and allotted among such 
                institutions under section 318(e), treating such 
                amount, plus the amount appropriated for such fiscal 
                year in a regular or supplemental appropriation Act to 
                carry out section 318, as the amount appropriated to 
                carry out section 318 for purposes of allotments under 
                section 318(e)''; and
                    (D) in paragraph (2)(D)--
                            (i) in clause (iii), by striking ``for 
                        activities described in section 311(c)'' and 
                        inserting ``and shall be made available as 
                        grants under section 320, treating such 
                        $5,000,000 as part of the amount appropriated 
                        for such fiscal year in a regular or 
                        supplemental appropriation Act to carry out 
                        such section and using such $5,000,000 for 
                        purposes described in subsection (c) of such 
                        section''; and
                            (ii) in clause (iv), by striking 
                        ``described in subsection (a)(7)--'' and all 
                        that follows and inserting ``and shall be made 
                        available as grants under section 319, treating 
                        such $5,000,000 as part of the amount 
                        appropriated for such fiscal year in a regular 
                        or supplemental appropriation Act to carry out 
                        such section and using such $5,000,000 for 
                        purposes described in subsection (c) of such 
                        section''; and
            (3) by striking subsection (c).

SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION.

    There are authorized to be appropriated, and there are 
appropriated, to carry out part N of title VIII of the Higher Education 
Act of 1965 (20 U.S.C. 1161n) (in addition to any other amounts 
appropriated to carry out such part and out of any money in the 
Treasury not otherwise appropriated), $10,000,000 for fiscal year 2010.

SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS ACTIVATED FOR DUTY.

    (a) In General.--Section 484B(b)(2) (20 U.S.C. 1091b(b)(2)) is 
amended by adding at the end the following:
                    ``(F) Tuition relief for students called to 
                military service.--
                            ``(i) Waiver of repayment by students 
                        called to military service.--In addition to the 
                        waivers authorized by subparagraphs (D) and 
                        (E), the Secretary shall waive the amounts that 
                        students are required to return under this 
                        section if the withdrawals on which the returns 
                        are based are withdrawals necessitated by 
                        reason of service in the uniformed services.
                            ``(ii) Loan forgiveness authorized.--
                        Whenever a student's withdrawal from an 
                        institution of higher education is necessitated 
                        by reason of service in the uniformed services, 
                        the Secretary shall, with respect to the 
                        payment period or period of enrollment for 
                        which such student did not receive academic 
                        credit as a result of such withdrawal, carry 
                        out a program--
                                    ``(I) through the holder of the 
                                loan, to assume the obligation to 
                                repay--
                                            ``(aa) the outstanding 
                                        principal and accrued interest 
                                        on any loan assistance awarded 
                                        to the student under part B 
                                        (including to a parent on 
                                        behalf of the student under 
                                        section 428B) for such payment 
                                        period or period of enrollment; 
                                        minus
                                            ``(bb) any amount of such 
                                        loan assistance returned by the 
                                        institution in accordance with 
                                        paragraph (1) of this 
                                        subsection for such payment 
                                        period or period of enrollment; 
                                        and
                                    ``(II) to cancel--
                                            ``(aa) the outstanding 
                                        principal and accrued interest 
                                        on the loan assistance awarded 
                                        to the student under part D or 
                                        E (including a Federal Direct 
                                        PLUS loan awarded to a parent 
                                        on behalf of the student) for 
                                        such payment period or period 
                                        of enrollment; minus
                                            ``(bb) any amount of such 
                                        loan assistance returned by the 
                                        institution in accordance with 
                                        paragraph (1) of this 
                                        subsection for such payment 
                                        period or period of enrollment.
                            ``(iii) Reimbursement for cancellation of 
                        perkins loans.--The Secretary shall pay to each 
                        institution for each fiscal year an amount 
                        equal to the aggregate of the amounts of 
                        Federal Perkins loans in such institutions's 
                        student loan fund which are cancelled pursuant 
                        to clause (iii)(II) for such fiscal year, minus 
                        an amount equal to the aggregate of the amounts 
                        of any such loans so canceled which were made 
                        from Federal capital contributions to its 
                        student loan fund provided by the Secretary 
                        under section 468. None of the funds 
                        appropriated pursuant to section 461(b) shall 
                        be available for payments pursuant to this 
                        paragraph. To the extent feasible, the 
                        Secretary shall pay the amounts for which any 
                        institution qualifies under this paragraph not 
                        later than 3 months after the institution files 
                        an institutional application for campus-based 
                        funds.
                            ``(iv) Loan eligibility and limits for 
                        students.--Any amounts that are returned by an 
                        institution in accordance with paragraph (1), 
                        or forgiven or waived by the Secretary under 
                        this subparagraph, with respect to a payment 
                        period or period of enrollment for which a 
                        student did not receive academic credit as a 
                        result of withdrawal necessitated by reason of 
                        service in the uniformed services, shall not be 
                        included in the calculation of the student's 
                        annual or aggregate loan limits for assistance 
                        under this title, or otherwise affect the 
                        student's eligibility for grants or loans under 
                        this title.
                            ``(v) Definition.--In this subparagraph, 
                        the term `service in the uniformed services' 
                        has the meaning given such term in section 
                        484C(a).''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect for periods of service in the uniformed services 
        beginning after the date of the enactment of this Act.
            (2) Definition.--In this paragraph, the term ``period of 
        service in the uniformed services'' means the period beginning 
        30 days prior to the date a student is required to report to 
        service in the uniformed services (as defined in section 
        484C(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1091c(a)) and ending when such student returns from such 
        service.

SEC. 106. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

    (a) Veterans Educational Equity Supplemental Grant Program.--
Subpart 1 of part A of title IV (20 U.S.C. 1070a et seq.) is amended by 
adding at the end the following:

``SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL GRANT PROGRAM.

    ``(a) Veterans Educational Equity Supplemental Grants Authorized.--
The Secretary shall award a grant to each eligible student, in an 
amount determined in accordance with subsection (c), to assist such 
student with paying the cost of tuition incurred by the student for a 
program of education at an institution of higher education.
    ``(b) Definitions.--In this section--
            ``(1) Eligible student.--The term `eligible student' means 
        a student who--
                    ``(A) is a covered individual, as such term is 
                defined in section 3311(b) of title 38, United States 
                Code;
                    ``(B) is enrolled at an institution of higher 
                education that--
                            ``(i) is not a public institution of higher 
                        education; and
                            ``(ii) is located in a State with a zero, 
                        or very low, maximum tuition charge per credit 
                        hour compared to the maximum tuition charge per 
                        credit hour in all other States, as determined 
                        by the Secretary of Veterans Affairs (based on 
                        the determinations of maximum tuition charged 
                        per credit hour in each State for the purposes 
                        of chapter 33 of title 38, United States Code); 
                        and
                    ``(C) is eligible for educational assistance for an 
                academic year, and will receive an amount of such 
                assistance for such year for fees charged the 
                individual that is less than the maximum amount of such 
                assistance available for fees charged for such year in 
                such State.
            ``(2) Educational assistance.--The term `educational 
        assistance' means the amount of educational assistance from the 
        Secretary of Veterans Affairs an eligible student receives or 
        will receive under section 3313(c)(1)(A) of title 38, United 
        States Code, or a similar amount of such assistance under 
        paragraphs (2) through (7) of such section 3313(c).
    ``(c) Grant Amount.--A grant to an eligible student under this 
section be equal to an amount that is--
            ``(1) the maximum amount of educational assistance for fees 
        charged that the eligible student would receive, in accordance 
        with section 3313(c) of title 38, United States Code, if such 
        student attended the public institution of higher education in 
        the State in which the eligible student is enrolled that has 
        the highest fees charged to an individual for a year in such 
        State (as determined by the Secretary of Veterans Affairs for 
        the purposes of chapter 33 of such title 38), less
            ``(2) the educational assistance the eligible student will 
        receive, in accordance with such section, for fees charged to 
        the student for such year at the institution of higher 
        education at which the student is enrolled.
    ``(d) Uses of Funds.--An eligible student who receives a grant 
under this section shall use such grant to pay tuition incurred by the 
student for a program of education at an institution of higher 
education.
    ``(e) Notification.--The Secretary, in coordination with Secretary 
of Veterans Affairs, shall establish a system of notification to ensure 
the timely delivery to each eligible student of--
            ``(1) educational assistance received by the student; and
            ``(2) grants awarded to the student under this section.
    ``(f) Authorization and Appropriation.--There are authorized to be 
appropriated, and there are appropriated, such sums as may be necessary 
to carry out this section (in addition to any other amounts 
appropriated to carry out this section and out of any money in the 
Treasury not otherwise appropriated).''.
    (b) Conforming Amendment.--The header for subpart 1 of part A of 
title IV (20 U.S.C. 1070a et seq.) is amended by inserting ``; Veterans 
Educational Equity Supplemental Grants'' after ``Pell Grants''.

         Subtitle B--Student Financial Aid Form Simplification

SEC. 121. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this subtitle, amendments made by 
this subtitle shall be effective with respect to determinations of need 
for assistance under title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) for award years beginning on or after July 1, 
2011.

SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS.

    (a) Amount of Need.--Section 471 (20 U.S.C. 1087kk) is amended--
            (1) by striking ``Except'' and inserting the following:
    ``(a) In General.--Except'';
            (2) by inserting ``and subject to subsection (b)'' after 
        ``therein''; and
            (3) by adding at the end the following:
    ``(b) Asset Cap for Need-based Aid.--Notwithstanding any other 
provision of this title, a student shall not be eligible to receive a 
Federal Pell Grant, a Federal Direct Stafford Loan, or work assistance 
under this title if--
            ``(1) in the case of a dependent student, the combined net 
        assets of the student and the student's parents are equal to an 
        amount greater than $150,000 (or a successor amount prescribed 
        by the Secretary under section 478(c)); or
            ``(2) in the case of an independent student, the net assets 
        of the student (and the student's spouse, if applicable) are 
        equal to an amount greater than $150,000 (or a successor amount 
        prescribed by the Secretary under section 478(c)).''.
    (b) Data Elements.--Section 474(b) (20 U.S.C. 1087nn(b)) is 
amended--
            (1) by striking paragraph (4); and
            (2) by redesignating paragraphs (5), (6), and (7) as 
        paragraphs (4), (5), and (6), respectively.
    (c) Dependent Students.--Section 475 (20 U.S.C. 1087oo) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``adjusted''; and
                            (ii) by inserting ``and'' after the 
                        semicolon;
                    (B) in paragraph (2), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (3);
            (2) in subsection (b)--
                    (A) in the header, by striking ``Adjusted'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``adjusted'';
                    (C) by striking paragraph (1);
                    (D) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively;
                    (E) in paragraph (1) (as redesignated by 
                subparagraph (D) of this paragraph), by striking 
                ``adjusted''; and
                    (F) in paragraph (2) (as redesignated by 
                subparagraph (D) of this paragraph), by striking 
                ``paragraph (2)'' and inserting ``paragraph (1)'';
            (3) by repealing subsection (d);
            (4) in subsection (e)--
                    (A) by striking ``The adjusted available'' and 
                inserting ``The available'';
                    (B) by striking ``to as `AAI')'' and inserting ``to 
                as `AI')'';
                    (C) by striking ``From Adjusted Available Income 
                (AAI)'' and inserting ``From Available Income (AI)''; 
                and
                    (D) in the table--
                            (i) by striking ``If AAI'' and inserting 
                        ``If AI''; and
                            (ii) by striking ``of AAI'' each place it 
                        appears and inserting ``of AI'';
            (5) in subsection (f)--
                    (A) by striking ``and assets'' each place it 
                appears;
                    (B) in paragraph (2)(B), by striking ``or assets''; 
                and
                    (C) in paragraph (3)--
                            (i) by striking ``are taken into'' and 
                        inserting ``is taken into''; and
                            (ii) by striking ``adjusted'';
            (6) in subsection (g)(6), by striking ``exceeds the sum 
        of'' and all that follows and inserting ``exceeds the parents' 
        total income (as defined in section 480)'';
            (7) by repealing subsection (h); and
            (8) in subsection (i), by striking ``adjusted'' each place 
        it appears.
    (d) Family Contribution for Independent Students Without Dependents 
Other Than a Spouse.--Section 476 (20 U.S.C. 1087pp) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1);
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively;
                    (C) in paragraph (1) (as redesignated by 
                subparagraph (B)), by striking ``the sum resulting 
                under paragraph (1)'' and inserting ``the family's 
                contribution from available income (determined in 
                accordance with subsection (b))''; and
                    (D) in paragraph (2)(A) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (2)'' and 
                inserting ``paragraph (1)'';
            (2) by repealing subsection (c); and
            (3) in subsection (d)--
                    (A) by striking ``and assets''; and
                    (B) by striking ``or assets''.
    (e) Family Contribution for Independent Students With Dependents 
Other Than a Spouse.--Section 477 (20 U.S.C. 1087qq) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1);
                    (B) by redesignating paragraphs (2), (3), and (4) 
                as paragraphs (1), (2), and (3), respectively;
                    (C) in paragraph (1) (as redesignated by 
                subparagraph (B)), by striking ``such adjusted 
                available income'' and inserting ``the family's 
                available income (determined in accordance with 
                subsection (b))'';
                    (D) in paragraph (2) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (2)'' and 
                inserting ``paragraph (1)''; and
                    (E) in paragraph (3)(A) (as redesignated by 
                subparagraph (B)), by striking ``paragraph (3)'' and 
                inserting ``paragraph (2)'';
            (2) by repealing subsection (c); and
            (3) in subsection (d)--
                    (A) by striking ``The adjusted available'' and 
                inserting ``The available'';
                    (B) by striking ``to as `AAI')'' and inserting ``to 
                as `AI')'';
                    (C) by striking ``From Adjusted Available Income 
                (AAI)'' and inserting ``From Available Income (AI)''; 
                and
                    (D) in the table--
                            (i) by striking ``If AAI'' and inserting 
                        ``If AI''; and
                            (ii) by striking ``of AAI'' each place it 
                        appears and inserting ``of AI''; and
                    (E) in subsection (e)--
                            (i) by striking ``and assets''; and
                            (ii) by striking ``or assets''.
    (f) Regulations; Updated Tables.--Section 478 (20 U.S.C. 1087rr) is 
amended--
            (1) in subsection (a), by inserting ``or amounts, as the 
        case may be,'' after ``tables'' each place the term appears;
            (2) by amending subsection (c) to read as follows:
    ``(c) Asset Cap for Need-based Aid.--For each award year after 
award year 2011-2012, the Secretary shall publish in the Federal 
Register a revised net asset cap for the purposes of section 471(b). 
Such revised cap shall be determined by increasing the dollar amount in 
such section by a percentage equal to the estimated percentage change 
in the Consumer Price Index (as determined by the Secretary) between 
December 2010 and the December preceding the beginning of such award 
year, and rounding the result to the nearest $5.'';
            (3) by repealing subsection (d); and
            (4) in subsection (e), by striking ``adjusted'' both places 
        it appears.

SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY.

    (a) Definition of Untaxed Income and Benefits.--Section 480(b)(1) 
(20 U.S.C. 1087vv(b)(1)), as amended by the Higher Education 
Opportunity Act (Public Law 110-315), is amended--
            (1) by striking subparagraphs (A), (B), (C), (E), (F), and 
        (I);
            (2) by redesignating subparagraphs (D), (G), and (H) as 
        subparagraphs (A), (B), and (C), respectively;
            (3) in subparagraph (B) (as redesignated by paragraph (2)), 
        by inserting ``and'' after the semicolon; and
            (4) in subparagraph (C) (as redesignated by paragraph (2)), 
        by striking ``; and'' and inserting a period.
    (b) Definition of Assets.--Section 480(f)(2) (20 U.S.C. 
1087vv(f)(2)) is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(D) an employee pension benefit plan (as defined 
                in section 3(2) of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1002(2))).''.
    (c) Financial Administrator Discretion.--Section 479A(b) (20 U.S.C. 
1087tt) is amended in the subsection heading, by striking ``to 
Assets''.
    (d) Suspension of Eligibility for Drug-related Offenses.--Section 
484(r)(1) (20 U.S.C. 1091(r)(1)) is amended to read as follows:
            ``(1) In general.--A student who is convicted of any 
        offense under any Federal or State law involving the sale of a 
        controlled substance for conduct that occurred during a period 
        of enrollment for which the student was receiving any grant, 
        loan, or work assistance under this title shall not be eligible 
        to receive any grant, loan, or work assistance under this title 
        from the date of that conviction for the period of time 
        specified in the following subparagraphs:
                    ``(A) For a first offense, the period of 
                ineligibility shall be 2 years.
                    ``(B) For a second offense, the period of 
                ineligibility shall be indefinite.''.

                     TITLE II--STUDENT LOAN REFORM

                    Subtitle A--Stafford Loan Reform

SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIATIONS.

    Section 421 (20 U.S.C. 1071) is amended--
            (1) in subsection (b), in the matter following paragraph 
        (6), by inserting ``, except that no sums may be expended after 
        June 30, 2010, with respect to loans under this part for which 
        the first disbursement would be made after such date'' after 
        ``expended''; and
            (2) by adding at the end the following new subsection:
    ``(d) Termination of Authority To Make or Insure New Loans.--
Notwithstanding paragraphs (1) through (6) of subsection (b) or any 
other provision of law--
            ``(1) no new loans (including consolidation loans) may be 
        made or insured under this part after June 30, 2010; and
            ``(2) no funds are authorized to be appropriated, or may be 
        expended, under this Act or any other Act to make or insure 
        loans under this part (including consolidation loans) for which 
        the first disbursement would be made after June 30, 2010,
except as expressly authorized by an Act of Congress enacted after the 
date of enactment of Student Aid and Fiscal Responsibility Act of 
2009.''.

SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PROGRAM.

    Section 424(a) (20 U.S.C. 1074(a)) is amended by striking 
``September 30, 1976,'' and all that follows and inserting ``September 
30, 1976, for each of the succeeding fiscal years ending prior to 
October 1, 2009, and for the period from October 1, 2009, to June 30, 
2010, for loans first disbursed on or before June 30, 2010.''.

SEC. 203. APPLICABLE INTEREST RATES.

    Section 427A(l) (20 U.S.C. 1077a(l)) is amended--
            (1) in paragraph (1), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (2) in paragraph (2), by inserting ``and before July 1, 
        2010,'' after ``July 1, 2006,'';
            (3) in paragraph (3), by inserting ``and that was disbursed 
        before July 1, 2010,'' after ``July 1, 2006,''; and
            (4) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``July 1, 2012'' and inserting ``July 1, 
                2010''; and
                    (B) by repealing subparagraphs (D) and (E).

SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

    (a) Higher Education Act of 1965.--Section 428 (20 U.S.C. 1078) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting ``for which the first 
                disbursement is made before July 1, 2010, and'' after 
                ``eligible institution''; and
                    (B) in paragraph (5), by striking ``September 30, 
                2014,'' and all that follows through the period and 
                inserting ``June 30, 2010.'';
            (2) in subsection (b)(1)--
                    (A) in subparagraph (G)(ii), by inserting ``and 
                before July 1, 2010,'' after ``July 1, 2006,''; and
                    (B) in subparagraph (H)(ii), by inserting ``and 
                that are first disbursed before July 1, 2010,'' after 
                ``July 1, 2006,'';
            (3) in subsection (f)(1)(A)(ii)--
                    (A) by striking ``during fiscal years beginning''; 
                and
                    (B) by inserting ``and first disbursed before July 
                1, 2010,'' after ``October 1, 2003,''; and
            (4) in subsection (j)(1), by inserting ``, before July 1, 
        2010,'' after ``section 435(d)(1)(D) of this Act shall''.
    (b) College Cost Reduction and Access Act.--Section 303 of the 
College Cost Reduction and Access Act (Public Law 110-84) is repealed.

SEC. 205. FEDERAL PLUS LOANS.

    Section 428B(a)(1) (20 U.S.C. 1078-2(a)(1)) is amended by striking 
``A graduate'' and inserting ``Prior to July 1, 2010, a graduate''.

SEC. 206. FEDERAL CONSOLIDATION LOAN.

    (a) Amendments.--Section 428C (20 U.S.C. 1078-3) is amended--
            (1) in subsection (a)--
                    (A) by amending paragraph (3)(B)(i)(V) to read as 
                follows:
                            ``(V) an individual who has a consolidation 
                        loan under this section and does not have a 
                        consolidation loan under section 455(g) may 
                        obtain a subsequent consolidation loan under 
                        section 455(g).''; and
                    (B) in paragraph (4)(A), by inserting ``, and first 
                disbursed before July 1, 2010'' after ``under this 
                part'';
            (2) in subsection (b)--
                    (A) in paragraph (1)(E), by inserting before the 
                semicolon ``, and before July 1, 2010''; and
                    (B) in paragraph (5), by striking ``In the event 
                that'' and inserting ``If, before July 1, 2010,'';
            (3) in subsection (c)(1)--
                    (A) in subparagraph (A)(ii), by inserting ``and 
                that is disbursed before July 1, 2010,'' after 
                ``2006,''; and
                    (B) in subparagraph (C), by inserting ``and first 
                disbursed before July 1, 2010,'' after ``1994,''; and
            (4) in subsection (e), by striking ``September 30, 2014.'' 
        and inserting ``June 30, 2010. No loan may be made under this 
        section for which the first disbursement would be on or after 
        July 1, 2010.''.
    (b) Effective Date.--The amendments made by subsection (a)(1)(A) 
shall be effective at the close of June 30, 2010.

SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.

    Section 428H (20 U.S.C. 1078-8) is amended--
            (1) in subsection (a), by inserting ``that are first 
        disbursed before July 1, 2010,'' after ``under this part'';
            (2) in subsection (b)--
                    (A) by striking ``Any student'' and inserting 
                ``Prior to July 1, 2010, any student''; and
                    (B) by inserting ``for which the first disbursement 
                is made before such date'' after ``unsubsidized Federal 
                Stafford Loan''; and
            (3) in subsection (h), by inserting ``and that are first 
        disbursed before July 1, 2010,'' after ``July 1, 2006,''.

SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.

    Section 428L(b)(2)(A) (20 U.S.C. 1078-12(b)(2)(A)) is amended--
            (1) by amending clause (i) to read as follows:
                            ``(i) subject to clause (ii)--
                                    ``(I) a loan made, insured, or 
                                guaranteed under this part, and that is 
                                first disbursed before July 1, 2010; or
                                    ``(II) a loan made under part D or 
                                part E; and''; and
            (2) in clause (ii)--
                    (A) by striking ``428C or 455(g)'' and inserting 
                ``428C, that is disbursed before July 1, 2010, or 
                section 455(g)''; and
                    (B) in subclause (II), by inserting ``for which the 
                first disbursement is made before July 1, 2010,'' after 
                ``or 428H''.

SEC. 209. SPECIAL ALLOWANCES.

    Section 438 (20 U.S.C. 1087-1) is amended--
            (1) in subsection (b)(2)(I)--
                    (A) in the header, by inserting ``, and before july 
                1, 2010'' after ``2000'';
                    (B) in clause (i), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (C) in clause (ii)(II), by inserting ``and before 
                July 1, 2010,'' after ``2006,'';
                    (D) in clause (iii), by inserting ``and before July 
                1, 2010,'' after ``2000,'';
                    (E) in clause (iv), by inserting ``and that is 
                disbursed before July 1, 2010,'' after ``2000,'';
                    (F) in clause (v)(I), by inserting ``and before 
                July 1, 2010,'' after ``2006,''; and
                    (G) in clause (vi)--
                            (i) in the header, by inserting ``, and 
                        before july 1, 2010'' after ``2007''; and
                            (ii) in the matter preceding subclause (I), 
                        by inserting ``and before July 1, 2010,'' after 
                        ``2007,'';
            (2) in subsection (c)--
                    (A) in paragraph (2)(B)--
                            (i) in clause (iii), by inserting ``and'' 
                        after the semicolon;
                            (ii) in clause (iv), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (v); and
                    (B) in paragraph (6), by inserting ``and first 
                disbursed before July 1, 2010,'' after ``1992,''; and
            (3) in subsection (d)(2)(B), by inserting ``, and before 
        July 1, 2010'' after ``2007''.

SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION.

    (a) Revised Calculation Rule.--Section 438(b)(2)(I) of the Higher 
Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(I)) is amended by adding 
at the end the following new clause:
                            ``(vii) Revised calculation rule to reflect 
                        financial market conditions.--
                                    ``(I) Calculation based on libor.--
                                For the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, in computing the 
                                special allowance paid pursuant to this 
                                subsection with respect to loans 
                                described in subclause (II), clause 
                                (i)(I) of this subparagraph shall be 
                                applied by substituting `of the 1-month 
                                London Inter Bank Offered Rate (LIBOR) 
                                for United States dollars in effect for 
                                each of the days in such quarter as 
                                compiled and released by the British 
                                Bankers Association' for `of the quotes 
                                of the 3-month commercial paper 
                                (financial) rates in effect for each of 
                                the days in such quarter as reported by 
                                the Federal Reserve in Publication H-15 
                                (or its successor) for such 3-month 
                                period'.
                                    ``(II) Loans eligible for libor-
                                based calculation.--The special 
                                allowance paid pursuant to this 
                                subsection shall be calculated as 
                                described in subclause (I) with respect 
                                to special allowance payments for the 
                                3-month period ending December 31, 
                                2009, and each succeeding 3-month 
                                period, on loans for which the first 
                                disbursement is made--
                                            ``(aa) on or after the date 
                                        of enactment of the Student Aid 
                                        and Fiscal Responsibility Act 
                                        of 2009, and before July 1, 
                                        2010; and
                                            ``(bb) on or after January 
                                        1, 2000, and before the date of 
                                        enactment of the Student Aid 
                                        and Fiscal Responsibility Act 
                                        of 2009, if, not later than the 
                                        last day of the second full 
                                        fiscal quarter after the date 
                                        of enactment of such Act, the 
                                        holder of the loan 
                                        affirmatively and permanently 
                                        waives all contractual, 
                                        statutory or other legal rights 
                                        to a special allowance paid 
                                        pursuant to this subsection 
                                        that is calculated using the 
                                        formula in effect at the time 
                                        the loans were first disbursed.
                                    ``(III) Terms of waiver.--A waiver 
                                pursuant to subclause (II)(bb) shall--
                                            ``(aa) be applicable to all 
                                        loans described in such 
                                        subclause that are held under 
                                        any lender identification 
                                        number associated with the 
                                        holder (pursuant to section 
                                        487B); and
                                            ``(bb) apply with respect 
                                        to all future calculations of 
                                        the special allowance on loans 
                                        described in such subclause 
                                        that are held on the date of 
                                        such waiver or that are 
                                        acquired by the holder after 
                                        such date.
                                    ``(IV) Participant's yield.--For 
                                the calendar quarter beginning on 
                                October 1, 2009, and each subsequent 
                                calendar quarter, the Secretary's 
                                participant yield in any loan for which 
                                the first disbursement is made on or 
                                after January 1, 2000, and before 
                                October 1, 2009, and that is held by a 
                                lender that has sold any participation 
                                interest in such loan to the Secretary 
                                shall be determined by using the LIBOR-
                                based rate described in subclause (I) 
                                as the substitute rate (for the 
                                commercial paper rate) referred to in 
                                the participation agreement between the 
                                Secretary and such lender.'';
    (b) Conforming Amendment.--Section 438(b)(2)(I) (20 U.S.C. 1087-
1(b)(2)(I)) is further amended--
            (1) in clause (i)(II), by striking ``such average bond 
        equivalent rate'' and inserting ``the rate determined under 
        subclause (I)''; and
            (2) in clause (v)(III) by striking ``(iv), and (vi)'' and 
        inserting ``(iv), (vi), and (vii)''.

SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITUTIONS LOCATED OUTSIDE 
              THE UNITED STATES.

    (a) Loans for Students Attending Institutions Located Outside the 
United States.--Section 452 (20 U.S.C. 1087b) is amended by adding at 
the end the following:
    ``(d) Institutions Located Outside the United States.--Loan funds 
for students (and parents of students) attending institutions located 
outside the United States shall be disbursed through a financial 
institution located in the United States and designated by the 
Secretary to serve as the agent of such institutions with respect to 
the receipt of the disbursements of such loan funds and the transfer of 
such funds to such institutions. To be eligible to receive funds under 
this part, an otherwise eligible institution located outside the United 
States shall make arrangements, subject to regulations by the 
Secretary, with the agent designated by the Secretary under this 
subsection to receive funds under this part.''.
    (b) Conforming Amendments.--
            (1) Amendments.--Section 102 (20 U.S.C. 1002), as amended 
        by section 102 of the Higher Education Opportunity Act (Public 
        Law 110-315) and section 101 of Public Law 111-39, is amended--
                    (A) by striking ``part B'' each place it appears 
                and inserting ``part D'';
                    (B) in subsection (a)(1)(C), by inserting ``, 
                consistent with the requirements of section 452(d)'' 
                before the period at the end; and
                    (C) in subsection (a)(2)(A)--
                            (i) in the matter preceding clause (i), by 
                        striking ``made, insured, or guaranteed'' and 
                        inserting ``made''; and
                            (ii) in clause (iii)--
                                    (I) in subclause (III), by striking 
                                ``only Federal Stafford'' and all that 
                                follows through ``section 428B'' and 
                                inserting ``only Federal Direct 
                                Stafford Loans under section 
                                455(a)(2)(A), Federal Direct 
                                Unsubsidized Stafford Loans under 
                                section 455(a)(2)(D), or Federal Direct 
                                PLUS Loans under section 
                                455(a)(2)(B)''; and
                                    (II) in subclause (V), by striking 
                                ``a Federal Stafford'' and all that 
                                follows through ``section 428B'' and 
                                inserting ``a Federal Direct Stafford 
                                Loan under section 455(a)(2)(A), a 
                                Federal Direct Unsubsidized Stafford 
                                Loan under section 455(a)(2)(D), or a 
                                Federal Direct PLUS Loan under section 
                                455(a)(2)(B)''.
            (2) Effective date.--The amendments made by subparagraph 
        (C) of paragraph (1) shall be effective on July 1, 2010, as if 
        enacted as part of section 102(a)(1) of the Higher Education 
        Opportunity Act (Public Law 110-315).

SEC. 212. AGREEMENTS WITH INSTITUTIONS.

    Section 454 (20 U.S.C. 1087d) is amended--
            (1) in subsection (a), by striking paragraph (4) and 
        redesignating the succeeding paragraphs accordingly; and
            (2) in subsection (b)(2), by striking ``(5), (6), and (7)'' 
        and inserting ``(5), and (6)''.

SEC. 213. TERMS AND CONDITIONS OF LOANS.

    (a) Amendments.--Section 455 (20 U.S.C. 1087e) is amended--
            (1) in subsection (a)(1), by inserting ``, and first 
        disbursed on June 30, 2010,'' before ``under sections 428''; 
        and
            (2) in subsection (g)--
                    (A) by inserting ``, including any loan made under 
                part B and first disbursed before July 1, 2010'' after 
                ``section 428C(a)(4)''; and
                    (B) by striking the third sentence.
    (b) Effective Date.--The amendment made by subsection (a)(1) shall 
apply with respect to loans first disbursed under part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) on or after 
July 1, 2010.

SEC. 214. CONTRACTS.

    Section 456 (20 U.S.C. 1087f) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in the header, by striking ``In 
                        general'' and inserting ``Awarding of 
                        contracts'';
                            (ii) by striking ``The Secretary'' and 
                        inserting the following:
                    ``(A) In general.--The Secretary''; and
                            (iii) by adding at the end the following:
                    ``(B) Awarding contracts for servicing loans.--The 
                Secretary shall, if practicable, award multiple 
                contracts, through a competitive bidding process, to 
                entities, including eligible not-for-profit servicers, 
                to service loans originated under this part. The 
                competitive bidding process shall take into account 
                price, servicing capacity, and capability, and may take 
                into account the capacity and capability to provide 
                default aversion activities and outreach services.
                    ``(C) Job retention incentive payment.--(i) In a 
                contract with an entity under subparagraph (B) for the 
                servicing of loans, the Secretary shall provide a job 
                retention incentive payment, in an amount and manner 
                determined by the Secretary, if such entity agrees to 
                give priority for hiring for positions created as a 
                result of such a contract to those geographical 
                locations at which the entity performed student loan 
                origination or servicing activities under the Federal 
                Family Education Loan Program as of the date of 
                enactment of the Student Aid and Fiscal Responsibility 
                Act of 2009.
                    ``(ii) In determining the allocation of loans to be 
                serviced by an entity awarded such a contract, the 
                Secretary shall consider the retention of highly 
                qualified employees of such entity a positive factor in 
                determining such allocation.'';
                    (B) in paragraph (2)--
                            (i) in the first sentence, by inserting ``, 
                        including eligible not-for-profit servicers,'' 
                        after ``The entities'';
                            (ii) by amending the third sentence to read 
                        as follows: ``The entities with which the 
                        Secretary may enter into such contracts shall 
                        include, where practicable, agencies with 
                        agreements with the Secretary under sections 
                        428(b) and (c) on the date of the enactment of 
                        the Student Aid and Fiscal Responsibility Act 
                        of 2009, and eligible not-for-profit servicers, 
                        if such agencies or servicers meet the 
                        qualifications as determined by the Secretary 
                        under this subsection and if those agencies or 
                        servicers have such experience and demonstrated 
                        effectiveness.''; and
                            (iii) by striking the last sentence and 
                        inserting the following: ``In awarding 
                        contracts to such State agencies, and such 
                        eligible not-for-profit servicers, the 
                        Secretary shall, to the extent practicable and 
                        consistent with the purposes of this part, give 
                        special consideration to State agencies and 
                        such servicers with a history of high quality 
                        performance and demonstrated integrity in 
                        conducting operations with institutions of 
                        higher education and the Secretary.'';
                    (C) by redesignating paragraph (3) as paragraph 
                (4), and by inserting in such paragraph ``, or of any 
                eligible not-for-profit servicer to enter into an 
                agreement for the purposes of this section as a member 
                of a consortium of such entities'' before the period at 
                the end; and
                    (D) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) Servicing by eligible not-for-profit servicers.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, in each State where one or 
                more eligible not-for-profit servicer has its principal 
                place of business, the Secretary shall contract with 
                each such servicer to service loans originated under 
                this part on behalf of borrowers attending institutions 
                located within such State, provided that the servicer 
                demonstrates that it meets the standards for servicing 
                Federal assets and providing quality service and agrees 
                to service the loans at a competitive market rate, as 
                determined by the Secretary. In determining such a 
                competitive market rate, the Secretary may take into 
                account the volume of loans serviced by the servicer. 
                Contracts awarded under this paragraph shall be subject 
                to the same requirements for quality, performance, and 
                accountability as contracts awarded under paragraph (2) 
                for similar activities.
                    ``(B) Allocations.--(i) One servicer.--In the case 
                of a State with only one eligible not-for-profit 
                servicer with a contract described in subparagraph (A), 
                the Secretary shall, at a minimum, allocate to such 
                servicer, on an annual basis and subject to such 
                contract, the servicing rights for the lesser of--
                            ``(I) the loans of 100,000 borrowers 
                        (including borrowers who borrowed loans in a 
                        prior year that were serviced by the servicer) 
                        attending institutions located within the 
                        State; or
                            ``(II) the loans of all the borrowers 
                        attending institutions located within the 
                        State.
                    ``(ii) Multiple servicers.--In the case of a State 
                with more than one eligible not-for-profit servicer 
                with a contract described in subparagraph (A), the 
                Secretary shall, at a minimum, allocate to each such 
                servicer, on an annual basis and subject to such 
                contract, the servicing rights for the lesser of--
                            ``(I) the loans of 100,000 borrowers 
                        (including borrowers who borrowed loans in a 
                        prior year that were serviced by the servicer) 
                        attending institutions located within the 
                        State; or
                            ``(II) an equal share of the loans of all 
                        borrowers attending institutions located within 
                        the State, except the Secretary shall adjust 
                        such shares as necessary to ensure that the 
                        loans of any single borrower remain with a 
                        single servicer.
                    ``(iii) Additional allocation.--The Secretary may 
                allocate additional servicing rights to an eligible 
                not-for-profit servicer based on the performance of 
                such servicer, as determined by the Secretary, 
                including performance in the areas of customer service 
                and default aversion.
                    ``(C) Multiple loans.--Notwithstanding the 
                allocations required by subparagraph (B), the Secretary 
                may transfer loans among servicers who are awarded 
                contracts to service loans pursuant to this section to 
                ensure that the loans of any single borrower remain 
                with a single servicer.''; and
            (2) by adding at the end the following:
    ``(c) Report to Congress.--Not later than 3 years after the date of 
the enactment of the Student Aid and Fiscal Responsibility Act of 2009, 
the Secretary shall prepare and submit to the authorizing committees, a 
report evaluating the performance of all eligible not-for-profit 
servicers awarded a contract under this section to service loans 
originated under this part. Such report shall give consideration to--
            ``(1) customer satisfaction of borrowers and institutions 
        with respect to the loan servicing provided by the servicers;
            ``(2) compliance with applicable regulations by the 
        servicers; and
            ``(3) the effectiveness of default aversion activities, and 
        outreach services (if any), provided by the servicers.
    ``(d) Definitions.--In this section:
            ``(1) Default aversion activities.--The term `default 
        aversion activities' means activities that are directly related 
        to providing collection assistance to the Secretary on a 
        delinquent loan, prior to the loan being legally in a default 
        status, including due diligence activities required pursuant to 
        regulations.
            ``(2) Eligible not-for-profit servicer.--
                    ``(A) In general.--The term `eligible not-for-
                profit servicer' means an entity that, on the date of 
                enactment of the Student Aid and Fiscal Responsibility 
                Act of 2009--
                            ``(i) meets the definition of an eligible 
                        not-for-profit holder under section 435(p), 
                        except that such term does not include eligible 
                        lenders described in paragraph (1)(D) of such 
                        section;
                            ``(ii) notwithstanding clause (i), is the 
                        sole beneficial owner of a loan for which the 
                        special allowance rate is calculated under 
                        section 438(b)(2)(I)(vi)(II) because the loan 
                        is held by an eligible lender trustee that is 
                        an eligible not-for-profit holder as defined 
                        under section 435(p)(1)(D); or
                            ``(iii) is an affiliated entity of an 
                        eligible not-for-profit servicer described in 
                        clause (i) or (ii) that--
                                    ``(I) directly employs, or will 
                                directly employ (on or before the date 
                                the entity begins servicing loans under 
                                a contract awarded by the Secretary 
                                pursuant to subsection (a)(3)(A)), the 
                                majority of individuals who perform 
                                student loan servicing functions; and
                                    ``(II) on such date of enactment, 
                                was performing, or had entered into a 
                                contract with a third party servicer 
                                (as such term is defined in section 
                                481(c)) who was performing, student 
                                loan servicing functions for loans made 
                                under part B of this title.
                    ``(B) Affiliated entity.--For the purposes of 
                subparagraph (A), the term `affiliated entity' means an 
                entity contracted to perform services for an eligible 
                not-for-profit servicer that--
                            ``(i) is a nonprofit entity or is wholly 
                        owned by a nonprofit entity; and
                            ``(ii) is not owned or controlled, in whole 
                        or in part, by--
                                    ``(I) a for-profit entity; or
                                    ``(II) an entity having its 
                                principal place of business in another 
                                State.
            ``(3) Outreach services.--The term `outreach services' 
        means programs offered to students and families, including 
        programs delivered in coordination with institutions of higher 
        education that--
                    ``(A) encourage--
                            ``(i) students to attend and complete a 
                        degree or certification program at an 
                        institution of higher education; and
                            ``(ii) students and families to obtain 
                        financial aid, but minimize the borrowing of 
                        education loans; and
                    ``(B) deliver financial literacy and counseling 
                tools.''.

SEC. 215. INTEREST RATES.

    Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended by adding at 
the end the following new subparagraph:
                    ``(E) Reduced rates for undergraduate fdsl on and 
                after july 1, 2012.--Notwithstanding the preceding 
                paragraphs of this subsection and subparagraph (A) of 
                this paragraph, for Federal Direct Stafford Loans made 
                to undergraduate students for which the first 
                disbursement is made on or after July 1, 2012, the 
                applicable rate of interest shall, during any 12-month 
                period beginning on July 1 and ending on June 30, be 
                determined on the preceding June 1 and be equal to--
                            ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to such June 1; plus
                            ``(ii) 2.5 percent,
                except that such rate shall not exceed 6.8 percent.''.

                    Subtitle B--Perkins Loan Reform

SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND CONDITIONS.

    Part D of title IV (20 U.S.C. 1087a et seq.) is amended by 
inserting after section 455 the following new section:

``SEC. 455A. FEDERAL DIRECT PERKINS LOANS.

    ``(a) Designation of Loans.--Loans made to borrowers under this 
section shall be known as `Federal Direct Perkins Loans'.
    ``(b) In General.--It is the purpose of this section to authorize 
loans to be awarded by institutions of higher education through 
agreements established under section 463(f). Unless otherwise specified 
in this section, all terms and conditions and other requirements 
applicable to Federal Direct Unsubsidized Stafford loans established 
under section 455(a)(2)(D) shall apply to loans made pursuant to this 
section.
    ``(c) Eligible Borrowers.--Any student meeting the requirements for 
student eligibility under section 464(b) (including graduate and 
professional students as defined in regulations promulgated by the 
Secretary) shall be eligible to borrow a Federal Direct Perkins Loan, 
provided the student attends an eligible institution with an agreement 
with the Secretary under section 463(f), and the institution uses its 
authority under that agreement to award the student a loan.
    ``(d) Loan Limits.--The annual and aggregate limits for loans under 
this section shall be the same as those established under section 464, 
and aggregate limits shall include loans made by institutions under 
agreements under section 463(a).
    ``(e) Applicable Rates of Interest.--Loans made pursuant to this 
section shall bear interest, on the unpaid balance of the loan, at the 
rate of 5 percent per year.''.

SEC. 222. AUTHORIZATION OF APPROPRIATIONS.

    Section 461 (20 U.S.C. 1087aa) is amended--
            (1) in subsection (a), by inserting ``, before July 1, 
        2010,'' after ``The Secretary shall'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1) For the purpose'' and 
                        inserting ``For the purpose''; and
                            (ii) by striking ``and for each of the five 
                        succeeding fiscal years''; and
                    (B) by striking paragraph (2); and
            (3) by striking subsection (c).

SEC. 223. ALLOCATION OF FUNDS.

    Section 462 (20 U.S.C. 1087bb) is amended--
            (1) in subsection (a)(1), by striking ``From'' and 
        inserting ``For any fiscal year before fiscal year 2010, 
        from''; and
            (2) in subsection (i)(1), by striking ``for any fiscal 
        year,'' and inserting ``for any fiscal year before fiscal year 
        2010,''.

SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

    Part E of title IV is further amended by inserting after section 
462 (20 U.S.C. 1087bb) the following:

``SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to allocate, among eligible and participating 
        institutions (as such terms are defined in this section), the 
        authority to make Federal Direct Perkins Loans under section 
        455A with a portion of the annual loan authority described in 
        subsection (b); and
            ``(2) to make funds available, in accordance with section 
        452, to each participating institution from a portion of the 
        annual loan authority described in subsection (b), in an amount 
        not to exceed the sum of an institution's allocation of funds 
        under subparagraphs (A), (B), and (C) of subsection (b)(1) to 
        enable each such institution to make Federal Direct Perkins 
        Loans to eligible students at the institution.
    ``(b) Available Direct Perkins Annual Loan Authority.--
            ``(1) Availability and allocations.--There are hereby made 
        available, from funds made available for loans made under part 
        D, not to exceed $6,000,000,000 of annual loan authority for 
        award year 2010-2011 and each succeeding award year, to be 
        allocated as follows:
                    ``(A) The Secretary shall allocate not more than 
                \1/2\ of such funds for each award year by allocating 
                to each participating institution an amount equal to 
                the adjusted self-help need amount of the institution, 
                as determined in accordance with subsection (c) for 
                such award year.
                    ``(B) The Secretary shall allocate not more than 
                \1/4\ of such funds for each award year by allocating 
                to each participating institution an amount equal to 
                the low tuition incentive amount of the institution, as 
                determined in accordance with subsection (d).
                    ``(C) The Secretary shall allocate not more than 
                \1/4\ of such funds for each award year by allocating 
                to each participating institution an amount which bears 
                the same ratio to the funds allocated under this 
                subparagraph as the ratio determined in accordance with 
                subsection (e) for the calculation of the Federal Pell 
                Grant and degree recipient amount of the institution.
            ``(2) No funds to non-participating institutions.--The 
        Secretary shall not make funds available under this subsection 
        to any eligible institution that is not a participating 
        institution. The adjusted self-help need amount (determined in 
        accordance with subsection (c)) of an eligible institution that 
        is not a participating institution shall not be made available 
        to any other institution.
    ``(c) Adjusted Self-help Need Amount.--For the purposes of 
subsection (b)(1)(A), the Secretary shall calculate the adjusted self-
help need amount of each eligible institution for an award year as 
follows:
            ``(1) Use of base self-help need amounts.--
                    ``(A) In general.--Except as provided in paragraphs 
                (2), (3), and (4), the adjusted self-help need amount 
                of each eligible institution shall be the institution's 
                base self-help need amount, which is the sum of--
                            ``(i) the self-help need of the 
                        institution's eligible undergraduate students 
                        for such award year; and
                            ``(ii) the self-help need of the 
                        institution's eligible graduate and 
                        professional students for such award year.
                    ``(B) Undergraduate student self-help need.--To 
                determine the self-help need of an institution's 
                eligible undergraduate students, the Secretary shall 
                determine the sum of each eligible undergraduate 
                student's average cost of attendance for the second 
                preceding award year less each such student's expected 
                family contribution (computed in accordance with part 
                F) for the second preceding award year, except that, 
                for each such eligible undergraduate student, the 
                amount computed by such subtraction shall not be less 
                than zero or more than the lesser of--
                            ``(i) 25 percent of the average cost of 
                        attendance with respect to such eligible 
                        student; or
                            ``(ii) $5,500.
                    ``(C) Graduate and professional student self-help 
                need.--To determine the self-help need of an 
                institution's eligible graduate and professional 
                students, the Secretary shall determine the sum of each 
                eligible graduate and professional student's average 
                cost of attendance for the second preceding award year 
                less each such student's expected family contribution 
                (computed in accordance with part F) for such second 
                preceding award year, except that, for each such 
                eligible graduate and professional student, the amount 
                computed by such subtraction shall not be less than 
                zero or more than $8,000.
            ``(2) Ratable reduction adjustments.--If the sum of the 
        base self-help need amounts of all eligible institutions for an 
        award year as determined under paragraph (1) exceeds \1/2\ of 
        the annual loan authority under subsection (b) for such award 
        year, the Secretary shall ratably reduce the base self-help 
        need amounts of all eligible institutions until the sum of such 
        amounts is equal to the amount that is \1/2\ of the annual loan 
        authority under subsection (b).
            ``(3) Required minimum amount.--Notwithstanding paragraph 
        (2), the adjusted self-help need amount of each eligible 
        institution shall not be less than the average of the 
        institution's total principal amount of loans made under this 
        part for each of the 5 most recent award years.
            ``(4) Additional adjustments.--If the Secretary determines 
        that a ratable reduction under paragraph (2) results in the 
        adjusted self-help need amount of any eligible institution 
        being reduced below the minimum amount required under paragraph 
        (3), the Secretary shall--
                    ``(A) for each institution for which the minimum 
                amount under paragraph (3) is not satisfied, increase 
                the adjusted self-help need amount to the amount of the 
                required minimum under such subparagraph; and
                    ``(B) ratably reduce the adjusted self-help need 
                amounts of all eligible institutions not described in 
                subparagraph (A) until the sum of the adjusted self-
                help need amounts of all eligible institutions is equal 
                to the amount that is \1/2\ of the annual loan 
                authority under subsection (b).
    ``(d) Low Tuition Incentive Amount.--
            ``(1) In general.--For purposes of subsection (b)(1)(B), 
        the Secretary shall determine the low tuition incentive amount 
        for each participating institution for each award year, by 
        calculating for each such institution the sum of--
                    ``(A) the total amount, if any (but not less than 
                zero), by which--
                            ``(i) the average tuition and required fees 
                        for the institution's sector for the second 
                        preceding award year; exceeds
                            ``(ii) the tuition and required fees for 
                        the second preceding award year for each 
                        undergraduate and graduate student attending 
                        the institution who had financial need (as 
                        determined under part F); plus
                    ``(B) the total amount, if any (but not less than 
                zero), by which--
                            ``(i) the total amount for the second 
                        preceding award year of non-Federal grant aid 
                        provided to meet the financial need of all 
                        undergraduate students attending the 
                        institution (as determined without regard to 
                        financial aid not received under this title); 
                        exceeds
                            ``(ii) the total amount for the second 
                        preceding award year, if any, by which--
                                    ``(I) the tuition and required fees 
                                of each such student with such 
                                financial need; exceeds
                                    ``(II) the average tuition and 
                                required fees for the institution's 
                                sector.
            ``(2) Ratable reduction.--If the sum of the low tuition 
        incentive amounts of all participating institutions for an 
        award year as determined under paragraph (1) exceeds \1/4\ of 
        the annual loan authority under subsection (b) for such award 
        year, the Secretary shall ratably reduce the low tuition 
        incentive amounts of all participating institutions until the 
        sum of such amounts is equal to the amount that is \1/4\ of the 
        annual loan authority under subsection (b).
    ``(e) Federal Pell Grant and Degree Recipient Amount.--For purposes 
of subsection (b)(1)(C), the Secretary shall determine the Federal Pell 
Grant and degree recipient amount for each participating institution 
for each award year, by calculating for each such institution the ratio 
of--
            ``(1) the number of students who, during the most recent 
        year for which data are available, obtained an associate's 
        degree or other postsecondary degree from such participating 
        institution and, prior to obtaining such degree, received a 
        Federal Pell Grant for attendance at any institution of higher 
        education; to
            ``(2) the sum of the number of students who, during the 
        most recent year for which data are available, obtained an 
        associate's degree or other postsecondary degree from each 
        participating institution and, prior to obtaining such degree, 
        received a Federal Pell Grant for attendance at any institution 
        of higher education.
    ``(f) Definitions.--As used in this section:
            ``(1) Annual loan authority.--The term `annual loan 
        authority' means the total original principal amount of loans 
        that may be allocated and made available for an award year to 
        make Federal Direct Perkins Loans under section 455A.
            ``(2) Average cost of attendance.--
                    ``(A) In general.--The term `average cost of 
                attendance' means the average of the attendance costs 
                for undergraduate students and for graduate and 
                professional students, respectively, for the second 
                preceding award year which shall include--
                            ``(i) tuition and required fees determined 
                        in accordance with subparagraph (B);
                            ``(ii) standard living expenses determined 
                        in accordance with subparagraph (C); and
                            ``(iii) books and supplies determined in 
                        accordance with subparagraph (D).
                    ``(B) Tuition and required fees.--The average 
                undergraduate and graduate and professional tuition and 
                required fees described in subparagraph (A)(i) shall be 
                computed on the basis of information reported by the 
                institution to the Secretary, which shall include--
                            ``(i) total revenue received by the 
                        institution from undergraduate and graduate and 
                        professional students, respectively, for 
                        tuition and required fees for the second 
                        preceding award year; and
                            ``(ii) the institution's full-time 
                        equivalent enrollment of undergraduate and 
                        graduate and professional students, 
                        respectively, for such second preceding award 
                        year.
                    ``(C) Standard living expenses.--The standard 
                living expense described in subparagraph (A)(ii) is 
                equal to the allowance, determined by an institution, 
                for room and board costs incurred by a student, as 
                computed in accordance with part F for the second 
                preceding award year.
                    ``(D) Books and supplies.--The allowance for books 
                and supplies described in subparagraph (A)(iii) is 
                equal to the allowance, determined by an institution, 
                for books, supplies, transportation, and miscellaneous 
                personal expenses, including a reasonable allowance for 
                the documented rental or purchase of a personal 
                computer, as computed in accordance with part F for the 
                second preceding award year.
            ``(3) Average tuition and required fees for the 
        institution's sector.--The term `average tuition and required 
        fees for the institution's sector' shall be determined by the 
        Secretary for each of the categories described in section 
        132(d).
            ``(4) Eligible institution.--The term `eligible 
        institution' means an institution of higher education that 
        participates in the Federal Direct Stafford Loan Program.
            ``(5) Participating institution.--The term `participating 
        institution' means an institution of higher education that has 
        an agreement under section 463(f).
            ``(6) Sector.--The term `sector' means each of the 
        categories described in section 132(d).''.

SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

    (a) Amendments.--Section 463 (20 U.S.C. 1087cc) is amended--
            (1) in subsection (a)--
                    (A) in the heading, by inserting ``for Loans Made 
                Before July 1, 2010'' after ``Agreements'';
                    (B) in paragraph (3)(A), by inserting ``before July 
                1, 2010'' after ``students'';
                    (C) in paragraph (4), by striking ``thereon--'' and 
                all that follows and inserting ``thereon, if the 
                institution has failed to maintain an acceptable 
                collection record with respect to such loan, as 
                determined by the Secretary in accordance with criteria 
                established by regulation, the Secretary may require 
                the institution to assign such note or agreement to the 
                Secretary, without recompense;''; and
                    (D) in paragraph (5), by striking ``and the 
                Secretary shall apportion'' and all that follows 
                through ``in accordance with section 462'' and 
                inserting ``and the Secretary shall return a portion of 
                funds from loan repayments to the institution as 
                specified in section 466(b)'';
            (2) by amending subsection (b) to read as follows:
    ``(b) Administrative Expenses.--An institution that has entered 
into an agreement under subsection (a) shall be entitled, for each 
fiscal year during which it services student loans from a student loan 
fund established under such agreement, to a payment in lieu of 
reimbursement for its expenses in servicing student loans made before 
July 1, 2010. Such payment shall be equal to 0.50 percent of the 
outstanding principal and interest balance of such loans being serviced 
by the institution as of September 30 of each fiscal year.''; and
            (3) by adding at the end the following:
    ``(f) Contents of Agreements for Loans Made on or After July 1, 
2010.--An agreement with any institution of higher education that 
elects to participate in the Federal Direct Perkins Loan program under 
section 455A shall provide--
            ``(1) for the establishment and maintenance of a Direct 
        Perkins Loan program at the institution under which the 
        institution shall use loan authority allocated under section 
        462A to make loans to eligible students attending the 
        institution;
            ``(2) that the institution, unless otherwise specified in 
        this subsection, shall operate the program consistent with the 
        requirements of agreements established under section 454;
            ``(3) that the institution will pay matching funds, 
        quarterly, in an amount agreed to by the institution and the 
        Secretary, to an escrow account approved by the Secretary, for 
        the purpose of providing loan benefits to borrowers;
            ``(4) that if the institution fails to meet the 
        requirements of paragraph (3), the Secretary shall suspend or 
        terminate the institution's eligibility to make Federal Direct 
        Perkins Loans under section 455A until such time as the 
        Secretary determines, in accordance with section 498, that the 
        institution has met the requirements of such paragraph; and
            ``(5) that if the institution ceases to be an eligible 
        institution within the meaning of section 435(a) by reason of 
        having a cohort default rate that exceeds the threshold 
        percentage specified paragraph (2) of such section, the 
        Secretary shall suspend or terminate the institution's 
        eligibility to make Federal Direct Perkins Loans under section 
        455A unless and until the institution would qualify for a 
        resumption of eligible institution status under such 
        section.''.
    (b) Effective Date.--The amendments made by paragraph (2) of 
subsection (a) shall take effect on October 1, 2010.

SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.

    Section 463A (20 U.S.C. 1087cc-1) is amended--
            (1) in subsection (a), by striking ``Each institution'' and 
        inserting ``For loans made before July 1, 2010, each 
        institution''; and
            (2) in subsection (b), by striking ``Each institution'' and 
        inserting ``For loans made before July 1, 2010, each 
        institution''.

SEC. 227. TERMS OF LOANS.

    (a) Section 464 (20 U.S.C. 1087dd) is amended--
            (1) in subsection (a)(1), by striking ``section 463'' and 
        inserting ``section 463(a)'';
            (2) in subsection (b)(1), by inserting ``made before July 
        1, 2010,'' after ``A loan'';
            (3) in subsection (c)--
                    (A) in paragraph (1), by inserting ``made before 
                July 1, 2010,'' after ``a loan'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by inserting 
                        ``made before July 1, 2010,'' after ``any 
                        loan''; and
                            (ii) in subparagraph (B), by inserting 
                        ``made before July 1, 2010,'' after ``any 
                        loan'';
                    (C) in paragraph (3)(B), by inserting ``for a loan 
                made before July 1, 2010,'' after ``during the 
                repayment period'';
                    (D) in paragraph (4), by inserting ``before July 1, 
                2010,'' after ``for a loan made'';
                    (E) in paragraph (5), by striking ``The 
                institution'' and inserting ``For loans made before 
                July 1, 2010, the institution''; and
                    (F) in paragraph (6), by inserting ``made before 
                July 1, 2010,'' after ``of loans'';
            (4) in subsection (d), by inserting ``made before July 1, 
        2010,'' before ``from the student loan fund'';
            (5) in subsection (e), by inserting ``with respect to loans 
        made before July 1, 2010, and'' before ``as documented in 
        accordance with paragraph (2),'';
            (6) by repealing subsection (f);
            (7) in subsection (g)(1), by inserting ``and before July 1, 
        2010,'' after ``January 1, 1986,'';
            (8) in subsection (h)--
                    (A) in paragraph (1)(A) by inserting ``before July 
                1, 2010,'' after ``made under this part''; and
                    (B) in paragraph (2), by inserting ``before July 1, 
                2010,'' after ``under this part''; and
            (9) in subsection (j)(1), by inserting ``before July 1, 
        2010,'' after ``under this part''.

SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

    (a) Section 465 (20 U.S.C. 1087ee) is amended--
            (1) in subsection (a), by inserting ``and before July 1, 
        2010,'' after ``June 30, 1972,''; and
            (2) by amending subsection (b) to read as follows:
    ``(b) Reimbursement for Cancellations.--
            ``(1) Assigned loans.--In the case of loans made under this 
        part before July 1, 2010, and that are assigned to the 
        Secretary, the Secretary shall, from amounts repaid each 
        quarter on assigned Perkins Loans made before July 1, 2010, pay 
        to each institution for each quarter an amount equal to--
                    ``(A) the aggregate of the amounts of loans from 
                its student loan fund that are canceled pursuant to 
                this section for such quarter, minus
                    ``(B) an amount equal to the aggregate of the 
                amounts of any such loans so canceled that were made 
                from Federal capital contributions to its student loan 
                fund.
            ``(2) Retained loans.--In the case of loans made under this 
        part before July 1, 2010, and that are retained by the 
        institution for servicing, the institution shall deduct from 
        loan repayments owed to the Secretary under section 466, an 
        amount equal to--
                    ``(A) the aggregate of the amounts of loans from 
                its student loan fund that are canceled pursuant to 
                this section for such quarter, minus
                    ``(B) an amount equal to the aggregate of the 
                amounts of any such loans so canceled that were made 
                from Federal capital contributions to its student loan 
                fund.''.
    (b) Section 466 (20 U.S.C. 1087ff) is amended to read as follows:

``SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

    ``(a) Capital Distribution.--Beginning July 1, 2010, there shall be 
a capital distribution of the balance of the student loan fund 
established under this part by each institution of higher education as 
follows:
            ``(1) For the quarter beginning July 1, 2010, the Secretary 
        shall first be paid, no later than September 30, 2010, an 
        amount that bears the same ratio to the cash balance in such 
        fund at the close of June 30, 2010, as the total amount of the 
        Federal capital contributions to such fund by the Secretary 
        under this part bears to--
                    ``(A) the sum of such Federal contributions and the 
                institution's capital contributions to such fund, less
                    ``(B) an amount equal to--
                            ``(i) the institution's outstanding 
                        administrative costs as calculated under 
                        section 463(b),
                            ``(ii) outstanding charges assessed under 
                        section 464(c)(1)(H), and
                            ``(iii) outstanding loan cancellation costs 
                        incurred under section 465.
            ``(2) At the end of each quarter subsequent to the quarter 
        ending September 30, 2010, the Secretary shall first be paid an 
        amount that bears the same ratio to the cash balance in such 
        fund at the close of the preceding quarter, as the total amount 
        of the Federal capital contributions to such fund by the 
        Secretary under this part bears to--
                    ``(A) the sum of such Federal contributions and the 
                institution's capital contributions to such fund, less
                    ``(B) an amount equal to--
                            ``(i) the institution's administrative 
                        costs incurred for that quarter as calculated 
                        under section 463(b),
                            ``(ii) charges assessed for that quarter 
                        under section 464(c)(1)(H), and
                            ``(iii) loan cancellation costs incurred 
                        for that quarter under section 465.
            ``(3)(A) The Secretary shall calculate the amounts due to 
        the Secretary under paragraph (1) (adjusted in accordance with 
        subparagraph (B), as appropriate) and paragraph (2) and shall 
        promptly inform the institution of such calculated amounts.
            ``(B) In the event that, prior to the date of enactment of 
        the Student Aid and Fiscal Responsibility Act of 2009, an 
        institution made a short-term, interest-free loan to the 
        institution's student loan fund established under this part in 
        anticipation of collections or receipt of Federal capital 
        contributions, and the institution demonstrates to the 
        Secretary, on or before June 30, 2010, that such loan will 
        still be outstanding after June 30, 2010, the Secretary shall 
        subtract the amount of such outstanding loan from the cash 
        balance of the institution's student loan fund that is used to 
        calculate the amount due to the Secretary under paragraph (1). 
        An adjustment of an amount due to the Secretary under this 
        subparagraph shall be made by the Secretary on a case-by-case 
        basis.
            ``(4) Any remaining balance at the end of a quarter after a 
        payment under paragraph (1) or (2) shall be retained by the 
        institution for use at its discretion. Any balance so retained 
        shall be withdrawn from the student loan fund and shall not be 
        counted in calculating amounts owed to the Secretary for 
        subsequent quarters.
            ``(5) Each institution shall make the quarterly payments to 
        the Secretary described in paragraph (2) until all outstanding 
        Federal Perkins Loans at that institution have been assigned to 
        the Secretary and there are no funds remaining in the 
        institution's student loan fund.
            ``(6) In the event that the institution's administrative 
        costs, charges, and cancellation costs described in paragraph 
        (2) for a quarter exceed the amount owed to the Secretary under 
        paragraphs (1) and (2) for that quarter, no payment shall be 
        due to the Secretary from the institution for that quarter and 
        the Secretary shall pay the institution, from funds realized 
        from the collection of assigned Federal Perkins Loans made 
        before July 1, 2010, an amount that, when combined with the 
        amount retained by the institution under paragraphs (1) and 
        (2), equals the full amount of such administrative costs, 
        charges, and cancellation costs.
    ``(b) Assignment of Outstanding Loans.--Beginning July 1, 2010, an 
institution of higher education may assign all outstanding loans made 
under this part before July 1, 2010, to the Secretary, consistent with 
the requirements of section 463(a)(5). In collecting loans so assigned, 
the Secretary shall pay an institution an amount that constitutes the 
same fraction of such collections as the fraction of the cash balance 
that the institution retains under subsection (a)(2), but determining 
such fraction without regard to subparagraph (B)(i) of such 
subsection.''.

SEC. 229. IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.

    (a) Amendments.--Section 487(d) (20 U.S.C. 1094(d)) is amended--
            (1) in paragraph (1)(E), by striking ``July 1, 2011'' and 
        inserting ``July 1, 2012'';
            (2) in paragraph (1)(F)--
                    (A) by redesignating clauses (iii), (iv), and (v) 
                as clauses (iv), (v), and (vi), respectively; and
                    (B) by inserting after clause (ii) the following 
                new clause:
                            ``(iii) for the period beginning July 1, 
                        2010, and ending July 1, 2012, the amount of 
                        funds the institution received from loans 
                        disbursed under section 455A;'';.
            (3) in paragraph (2)(A), by striking ``two consecutive'' 
        and inserting ``three consecutive''; and
            (4) in paragraph (2)(B)--
                    (A) by striking ``any institutional fiscal year'' 
                and inserting ``two consecutive institutional fiscal 
                years'';
                    (B) by striking ``the two institutional fiscal 
                years after the institutional fiscal year'' and 
                inserting ``the institutional fiscal year after the 
                second consecutive institutional fiscal year''; and
                    (C) by striking ``two consecutive'' in clause (ii) 
                of such paragraph and inserting ``three consecutive''.
    (b) Temporary Effect.--The amendments made by paragraphs (3) and 
(4) of subsection (a)--
            (1) shall take effect on the date of enactment of this Act; 
        and
            (2) shall cease to be effective on July 1, 2012.

SEC. 230. ADMINISTRATIVE EXPENSES.

    Section 489(a) (20 U.S.C. 1096(a)) is amended--
            (1) in the second sentence, by striking ``or under part E 
        of this title''; and
            (2) in the third sentence--
                    (A) by inserting ``and'' after ``subpart 3 of part 
                A,''; and
                    (B) by striking ``compensation of students,'' and 
                all that follows through the period and inserting 
                ``compensation of students.''.

            TITLE III--MODERNIZATION, RENOVATION, AND REPAIR

             Subtitle A--Elementary and Secondary Education

SEC. 301. DEFINITIONS.

    In this subtitle:
            (1) The term ``Bureau-funded school'' has the meaning given 
        such term in section 1141 of the Education Amendments of 1978 
        (25 U.S.C. 2021).
            (2) The term ``charter school'' has the meaning given such 
        term in section 5210 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7221i).
            (3) The term ``CHPS Criteria'' means the green building 
        rating program developed by the Collaborative for High 
        Performance Schools.
            (4) The term ``Energy Star'' means the Energy Star program 
        of the United States Department of Energy and the United States 
        Environmental Protection Agency.
            (5) The term ``Green Globes'' means the Green Building 
        Initiative environmental design and rating system referred to 
        as Green Globes.
            (6) The term ``LEED Green Building Rating System'' means 
        the United States Green Building Council Leadership in Energy 
        and Environmental Design green building rating standard 
        referred to as LEED Green Building Rating System.
            (7) The term ``local educational agency''--
                    (A) has the meaning given such term in section 9101 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7801);
                    (B) includes any public charter school that 
                constitutes a local educational agency under State law; 
                and
                    (C) includes the Recovery School District of 
                Louisiana.
            (8) The term ``outlying area''--
                    (A) means the United States Virgin Islands, Guam, 
                American Samoa, and the Commonwealth of the Northern 
                Mariana Islands; and
                    (B) includes the Republic of Palau.
            (9) The term ``public school facilities'' means existing 
        public elementary or secondary school facilities, including 
        public charter school facilities and other existing facilities 
        planned for adaptive reuse as public charter school facilities.
            (10) The term ``Secretary'' means the Secretary of 
        Education.
            (11) The term ``State'' means each of the 50 States, the 
        District of Columbia, and the Commonwealth of Puerto Rico.

 CHAPTER 1--GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF PUBLIC 
                           SCHOOL FACILITIES

SEC. 311. PURPOSE.

    Grants under this chapter shall be for the purpose of modernizing, 
renovating, or repairing public school facilities (including early 
learning facilities, as appropriate), based on the need of the 
facilities for such improvements, to ensure that public school 
facilities are safe, healthy, high-performing, and technologically up-
to-date.

SEC. 312. ALLOCATION OF FUNDS.

    (a) Reservation.--
            (1) In general.--From the amount appropriated to carry out 
        this chapter for each fiscal year pursuant to section 345(a), 
        the Secretary shall reserve 2 percent of such amount, 
        consistent with the purpose described in section 311--
                    (A) to provide assistance to the outlying areas; 
                and
                    (B) for payments to the Secretary of the Interior 
                to provide assistance to Bureau-funded schools.
            (2) Use of reserved funds.--In each fiscal year, the amount 
        reserved under paragraph (1) shall be divided between the uses 
        described in subparagraphs (A) and (B) of such paragraph in the 
        same proportion as the amount reserved under section 1121(a) of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        6331(a)) is divided between the uses described in paragraphs 
        (1) and (2) of such section 1121(a) in such fiscal year.
            (3) Distressed areas and natural disasters.--From the 
        amount appropriated to carry out this chapter for each fiscal 
        year pursuant to section 345(a), the Secretary shall reserve 5 
        percent of such amount for grants to--
                    (A) local educational agencies serving geographic 
                areas with significant economic distress, to be used 
                consistent with the purpose described in section 311 
                and the allowable uses of funds described in section 
                313; and
                    (B) local educational agencies serving geographic 
                areas recovering from a natural disaster, to be used 
                consistent with the purpose described in section 321 
                and the allowable uses of funds described in section 
                323.
    (b) Allocation to States.--
            (1) State-by-state allocation.--Of the amount appropriated 
        to carry out this chapter for each fiscal year pursuant to 
        section 345(a), and not reserved under subsection (a), each 
        State shall be allocated an amount in proportion to the amount 
        received by all local educational agencies in the State under 
        part A of title I of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6311 et seq.) for the previous fiscal year 
        relative to the total amount received by all local educational 
        agencies in every State under such part for such fiscal year.
            (2) State administration.--A State may reserve up to 1 
        percent of its allocation under paragraph (1) to carry out its 
        responsibilities under this chapter, which include--
                    (A) providing technical assistance to local 
                educational agencies;
                    (B) developing an online, publicly searchable 
                database that includes an inventory of public school 
                facilities in the State, including for each such 
                facility, its design, condition, modernization, 
                renovation and repair needs, utilization, energy use, 
                and carbon footprint; and
                    (C) creating voluntary guidelines for high-
                performing school buildings, including guidelines 
                concerning the following:
                            (i) Site location, storm water management, 
                        outdoor surfaces, outdoor lighting, and 
                        transportation, including public transit and 
                        pedestrian and bicycle accessability.
                            (ii) Outdoor water systems, landscaping to 
                        minimize water use, including elimination of 
                        irrigation systems for landscaping, and indoor 
                        water use reduction.
                            (iii) Energy efficiency (including minimum 
                        and superior standards, such as for heating, 
                        ventilation, and air conditioning systems), use 
                        of alternative energy sources, commissioning, 
                        and training.
                            (iv) Use of durable, sustainable materials 
                        and waste reduction.
                            (v) Indoor environmental quality, such as 
                        day lighting in classrooms, lighting quality, 
                        indoor air quality (including with reference to 
                        reducing the incidence and effects of asthma 
                        and other respiratory illnesses), acoustics, 
                        and thermal comfort.
                            (vi) Operations and management, such as use 
                        of energy-efficient equipment, indoor 
                        environmental management plan, maintenance 
                        plan, and pest management.
            (3) Grants to local educational agencies.--From the amount 
        allocated to a State under paragraph (1), each eligible local 
        educational agency in the State shall receive an amount in 
        proportion to the amount received by such local educational 
        agency under part A of title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6311 et seq.) for the previous 
        fiscal year relative to the total amount received by all local 
        educational agencies in the State under such part for such 
        fiscal year, except that no local educational agency that 
        received funds under such part for such fiscal year shall 
        receive a grant of less than $5,000 in any fiscal year under 
        this chapter.
            (4) Special rule.--Section 1122(c)(3) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6332(c)(3)) shall 
        not apply to paragraph (1) or (3).
    (c) Special Rules.--
            (1) Distributions by secretary.--The Secretary shall make 
        and distribute the reservations and allocations described in 
        subsections (a) and (b) not later than 120 days after an 
        appropriation of funds for this chapter is made.
            (2) Distributions by states.--A State shall make and 
        distribute the allocations described in subsection (b)(3) 
        within 90 days of receiving such funds from the Secretary.

SEC. 313. ALLOWABLE USES OF FUNDS.

    A local educational agency receiving a grant under this chapter 
shall use the grant for modernization, renovation, or repair of public 
school facilities (including early learning facilities, as 
appropriate), including--
            (1) repair, replacement, or installation of roofs, 
        including extensive, intensive or semi-intensive green roofs, 
        electrical wiring, water supply and plumbing systems, sewage 
        systems, storm water runoff systems, lighting systems, building 
        envelope, windows, ceilings, flooring, or doors, including 
        security doors;
            (2) repair, replacement, or installation of heating, 
        ventilation, or air conditioning systems, including insulation, 
        and conducting indoor air quality assessments;
            (3) compliance with fire, health, seismic, and safety 
        codes, including professional installation of fire and life 
        safety alarms, and modernizations, renovations, and repairs 
        that ensure that schools are prepared for emergencies, such as 
        improving building infrastructure to accommodate security 
        measures and installing or upgrading technology to ensure that 
        schools are able to respond to emergencies such as acts of 
        terrorism, campus violence, and natural disasters;
            (4) retrofitting necessary to increase the energy 
        efficiency and water efficiency of public school facilities;
            (5) modifications necessary to make facilities accessible 
        in compliance with the Americans with Disabilities Act of 1990 
        (42 U.S.C. 12101 et seq.) and section 504 of the Rehabilitation 
        Act of 1973 (29 U.S.C. 794);
            (6) abatement, removal, or interim controls of asbestos, 
        polychlorinated biphenyls, mold, mildew, lead-based hazards, 
        including lead-based paint hazards, or a proven carcinogen;
            (7) measures designed to reduce or eliminate human exposure 
        to classroom noise and environmental noise pollution;
            (8) modernization, renovation, or repair necessary to 
        reduce the consumption of coal, electricity, land, natural gas, 
        oil, or water;
            (9) installation or upgrading of educational technology 
        infrastructure;
            (10) modernization, renovation, or repair of science and 
        engineering laboratories, libraries, and career and technical 
        education facilities, and improvements to building 
        infrastructure to accommodate bicycle and pedestrian access;
            (11) installation or upgrading of renewable energy 
        generation and heating systems, including solar, photovoltaic, 
        wind, biomass (including wood pellet and woody biomass), waste-
        to-energy, and solar-thermal and geothermal systems, and for 
        energy audits;
            (12) measures designed to reduce or eliminate human 
        exposure to airborne particles such as dust, sand, and pollens;
            (13) creating greenhouses, gardens (including trees), and 
        other facilities for environmental, scientific, or other 
        educational purposes, or to produce energy savings;
            (14) modernizing, renovating, or repairing physical 
        education facilities for students, including upgrading or 
        installing recreational structures made from post-consumer 
        recovered materials in accordance with the comprehensive 
        procurement guidelines prepared by the Administrator of the 
        Environmental Protection Agency under section 6002(e) of the 
        Solid Waste Disposal Act (42 U.S.C. 6962(e));
            (15) other modernization, renovation, or repair of public 
        school facilities to--
                    (A) improve teachers' ability to teach and 
                students' ability to learn;
                    (B) ensure the health and safety of students and 
                staff;
                    (C) make them more energy efficient; or
                    (D) reduce class size; and
            (16) required environmental remediation related to 
        modernization, renovation, or repair described in paragraphs 
        (1) through (15).

SEC. 314. PRIORITY PROJECTS.

    In selecting a project under section 313, a local educational 
agency may give priority to projects involving the abatement, removal, 
or interim controls of asbestos, polychlorinated biphenyls, mold, 
mildew, lead-based hazards, including lead-based paint hazards, or a 
proven carcinogen.

 CHAPTER 2--SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND ALABAMA

SEC. 321. PURPOSE.

    Grants under this chapter shall be for the purpose of modernizing, 
renovating, repairing, or constructing public school facilities, 
including, where applicable, early learning facilities, based on the 
need for such improvements or construction, to ensure that public 
school facilities are safe, healthy, high-performing, and 
technologically up-to-date.

SEC. 322. ALLOCATION TO LOCAL EDUCATIONAL AGENCIES.

    (a) In General.--Of the amount appropriated to carry out this 
chapter for each fiscal year pursuant to section 345(b), the Secretary 
shall allocate to local educational agencies in Louisiana, Mississippi, 
and Alabama an amount equal to the infrastructure damage inflicted on 
public school facilities in each such district by Hurricane Katrina or 
Hurricane Rita in 2005 relative to the total of such infrastructure 
damage so inflicted in all such districts, combined.
    (b) Distribution by Secretary.--The Secretary shall determine and 
distribute the allocations described in subsection (a) not later than 
120 days after an appropriation of funds for this chapter is made.

SEC. 323. ALLOWABLE USES OF FUNDS.

    A local educational agency receiving a grant under this chapter 
shall use the grant for one or more of the activities described in 
section 313, except that an agency receiving a grant under this chapter 
also may use the grant for the construction of new public school 
facilities.

                     CHAPTER 3--GENERAL PROVISIONS

SEC. 331. IMPERMISSIBLE USES OF FUNDS.

    No funds received under this subtitle may be used for--
            (1) payment of maintenance costs, including routine repairs 
        classified as current expenditures under State or local law;
            (2) stadiums or other facilities primarily used for 
        athletic contests or exhibitions or other events for which 
        admission is charged to the general public;
            (3) improvement or construction of facilities the purpose 
        of which is not the education of children, including central 
        office administration or operations or logistical support 
        facilities; or
            (4) purchasing carbon offsets.

SEC. 332. SUPPLEMENT, NOT SUPPLANT.

    A local educational agency receiving a grant under this subtitle 
shall use such Federal funds only to supplement and not supplant the 
amount of funds that would, in the absence of such Federal funds, be 
available for modernization, renovation, repair, and construction of 
public school facilities.

SEC. 333. PROHIBITION REGARDING STATE AID.

    A State shall not take into consideration payments under this 
subtitle in determining the eligibility of any local educational agency 
in that State for State aid, or the amount of State aid, with respect 
to free public education of children.

SEC. 334. MAINTENANCE OF EFFORT.

    (a) In General.--A local educational agency may receive a grant 
under this subtitle for any fiscal year only if either the combined 
fiscal effort per student or the aggregate expenditures of the agency 
and the State involved with respect to the provision of free public 
education by the agency for the preceding fiscal year was not less than 
90 percent of the combined fiscal effort or aggregate expenditures for 
the second preceding fiscal year.
    (b) Reduction in Case of Failure To Meet Maintenance of Effort 
Requirement.--
            (1) In general.--The State educational agency shall reduce 
        the amount of a local educational agency's grant in any fiscal 
        year in the exact proportion by which a local educational 
        agency fails to meet the requirement of subsection (a) by 
        falling below 90 percent of both the combined fiscal effort per 
        student and aggregate expenditures (using the measure most 
        favorable to the local agency).
            (2) Special rule.--No such lesser amount shall be used for 
        computing the effort required under subsection (a) for 
        subsequent years.
    (c) Waiver.--The Secretary shall waive the requirements of this 
section if the Secretary determines that a waiver would be equitable 
due to--
            (1) exceptional or uncontrollable circumstances, such as a 
        natural disaster; or
            (2) a precipitous decline in the financial resources of the 
        local educational agency.

SEC. 335. SPECIAL RULE ON CONTRACTING.

    Each local educational agency receiving a grant under this subtitle 
shall ensure that, if the agency carries out modernization, renovation, 
repair, or construction through a contract, the process for any such 
contract ensures the maximum number of qualified bidders, including 
local, small, minority, and women- and veteran-owned businesses, 
through full and open competition.

SEC. 336. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS.

    (a) In General.--None of the funds appropriated or otherwise made 
available by this subtitle may be used for a project for the 
modernization, renovation, repair, or construction of a public school 
facility unless all of the iron, steel, and manufactured goods used in 
the project are produced in the United States.
    (b) Exceptions.--Subsection (a) shall not apply in any case or 
category of cases in which the Secretary finds that--
            (1) applying subsection (a) would be inconsistent with the 
        public interest;
            (2) iron, steel, and the relevant manufactured goods are 
        not produced in the United States in sufficient and reasonably 
        available quantities and of a satisfactory quality; or
            (3) inclusion of iron, steel, and manufactured goods 
        produced in the United States will increase the cost of the 
        overall project by more than 25 percent.
    (c) Publication of Justification.--If the Secretary determines that 
it is necessary to waive the application of subsection (a) based on a 
finding under subsection (b), the Secretary shall publish in the 
Federal Register a detailed written justification of the determination.
    (d) Construction.--This section shall be applied in a manner 
consistent with United States obligations under international 
agreements.

SEC. 337. LABOR STANDARDS.

    The grant programs under this subtitle are applicable programs (as 
that term is defined in section 400 of the General Education Provisions 
Act (20 U.S.C. 1221)) subject to section 439 of such Act (20 U.S.C. 
1232b).

SEC. 338. CHARTER SCHOOLS.

    (a) In General.--A local educational agency receiving an allocation 
under this subtitle shall reserve an amount of that allocation for 
charter schools within its jurisdiction for modernization, renovation, 
repair, and construction of charter school facilities.
    (b) Determination of Reserved Amount.--The amount to be reserved by 
a local educational agency under subsection (a) shall be determined 
based on the combined percentage of students counted under section 
1113(a)(5) of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6313(a)(5)) in the schools of the agency who--
            (1) are enrolled in charter schools; and
            (2) the local educational agency, in consultation with the 
        authorized public chartering agency, expects to be enrolled, 
        during the year with respect to which the reservation is made, 
        in charter schools that are scheduled to commence operation 
        during such year.
    (c) School Share.--Individual charter schools shall receive a share 
of the amount reserved under subsection (a) based on the need of each 
school for modernization, renovation, repair, or construction, as 
determined by the local educational agency in consultation with charter 
school administrators.
    (d) Excess Funds.--After the consultation described in subsection 
(c), if the local educational agency determines that the amount of 
funds reserved under subsection (a) exceeds the modernization, 
renovation, repair, and construction needs of charter schools within 
the local educational agency's jurisdiction, the agency may use the 
excess funds for other public school facility modernization, 
renovation, repair, or construction consistent with this subtitle and 
is not required to carry over such funds to the following fiscal year 
for use for charter schools.

SEC. 339. GREEN SCHOOLS.

    (a) In General.--Of the funds appropriated for a given fiscal year 
and made available to a local educational agency to carry out this 
subtitle, the local educational agency shall use not less than the 
applicable percentage (described in subsection (b)) of such funds for 
public school modernization, renovation, repair, or construction that 
are certified, verified, or consistent with any applicable provisions 
of--
            (1) the LEED Green Building Rating System;
            (2) Energy Star;
            (3) the CHPS Criteria;
            (4) Green Globes; or
            (5) an equivalent program adopted by the State, or another 
        jurisdiction with authority over the local educational agency, 
        that includes a verifiable method to demonstrate compliance 
        with such program.
    (b) Applicable Percentages.--The applicable percentage described in 
subsection (a) is--
            (1) for funds appropriated in fiscal year 2010, 50 percent; 
        and
            (2) for funds appropriated in fiscal year 2011, 75 percent.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a local educational agency from using 
sustainable, domestic hardwood lumber as ascertained through the forest 
inventory and analysis program of the Forest Service of the Department 
of Agriculture under the Forest and Rangeland Renewable Resources 
Research Act of 1978 (16 U.S.C. 1641 et seq.) for public school 
modernization, renovation, repairs, or construction.
    (d) Technical Assistance.--The Secretary, in consultation with the 
Secretary of Energy and the Administrator of the Environmental 
Protection Agency, shall provide outreach and technical assistance to 
States and local educational agencies concerning the best practices in 
school modernization, renovation, repair, and construction, including 
those related to student academic achievement, student and staff 
health, energy efficiency, and environmental protection.

SEC. 340. REPORTING.

    (a) Reports by Local Educational Agencies.--Local educational 
agencies receiving a grant under this subtitle shall annually compile a 
report describing the projects for which such funds were used, 
including--
            (1) the number and identity of public schools in the 
        agency, including the number of charter schools, and for each 
        school, the total number of students, and the number of 
        students counted under section 1113(a)(5) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6313(a)(5));
            (2) the total amount of funds received by the local 
        educational agency under this subtitle, and for each public 
        school in the agency, including each charter school, the amount 
        of such funds expended, and the types of modernization, 
        renovation, repair, or construction projects for which such 
        funds were used;
            (3) the number of students impacted by such projects, 
        including the number of students so impacted who are counted 
        under section 1113(a)(5) of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6313(a)(5));
            (4) the number of public schools in the agency with a 
        metro-centric locale code of 41, 42, or 43 as determined by the 
        National Center for Education Statistics and the percentage of 
        funds received by the agency under chapter 1 or chapter 2 of 
        this subtitle that were used for projects at such schools;
            (5) the number of public schools in the agency that are 
        eligible for schoolwide programs under section 1114 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 6314) 
        and the percentage of funds received by the agency under 
        chapter 1 or chapter 2 of this subtitle that were used for 
        projects at such schools;
            (6) for each project--
                    (A) the cost;
                    (B) the standard described in section 339(a) with 
                which the use of the funds complied or, if the use of 
                funds did not comply with a standard described in 
                section 339(a), the reason such funds were not able to 
                be used in compliance with such standards and the 
                agency's efforts to use such funds in an 
                environmentally sound manner; and
                    (C) any demonstrable or expected benefits as a 
                result of the project (such as energy savings, improved 
                indoor environmental quality, student and staff health, 
                including the reduction of the incidence and effects of 
                asthma and other respiratory illnesses, and improved 
                climate for teaching and learning); and
            (7) the total number and amount of contracts awarded, and 
        the number and amount of contracts awarded to local, small, 
        minority, women, and veteran-owned businesses.
    (b) Availability of Reports.--A local educational agency shall--
            (1) submit the report described in subsection (a) to the 
        State educational agency, which shall compile such information 
        and report it annually to the Secretary; and
            (2) make the report described in subsection (a) publicly 
        available, including on the agency's website.
    (c) Reports by Secretary.--Not later than March 31 of each fiscal 
year, the Secretary shall submit to the Committee on Education and 
Labor of the House of Representatives and the Committee on Health, 
Education, Labor and Pensions of the Senate, and make available on the 
Department of Education's website, a report on grants made under this 
subtitle, including the information from the reports described in 
subsection (b)(1).

SEC. 341. SPECIAL RULES.

    Notwithstanding any other provision of this subtitle, none of the 
funds authorized by this subtitle may be--
            (1) used to employ workers in violation of section 274A of 
        the Immigration and Nationality Act (8 U.S.C. 1324a); or
            (2) distributed to a local educational agency that does not 
        have a policy that requires a criminal background check on all 
        employees of the agency.

SEC. 342. PROMOTION OF EMPLOYMENT EXPERIENCES.

    The Secretary of Education, in consultation with the Secretary of 
Labor, shall work with recipients of funds under this subtitle to 
promote appropriate opportunities to gain employment experience working 
on modernization, renovation, repair, and construction projects funded 
under this subtitle for--
            (1) participants in a YouthBuild program (as defined in 
        section 173A of the Workforce Investment Act of 1998 (29 U.S.C. 
        2918a));
            (2) individuals enrolled in the Job Corps program carried 
        out under subtitle C of title I of the Workforce Investment Act 
        of 1998 (29 U.S.C. 2881 et seq.);
            (3) individuals enrolled in a junior or community college 
        (as defined in section 312(f) of the Higher Education Act of 
        1965 (20 U.S.C. 1088(f))) certificate or degree program 
        relating to projects described in section 339(a); and
            (4) participants in preapprenticeship programs that have 
        direct linkages with apprenticeship programs that are 
        registered with the Department of Labor or a State 
        Apprenticeship Agency under the National Apprenticeship Act of 
        1937 (29 U.S.C. 50 et seq.).

SEC. 343. ADVISORY COUNCIL ON GREEN, HIGH-PERFORMING PUBLIC SCHOOL 
              FACILITIES.

    (a) Establishment of Advisory Council.--The Secretary shall 
establish an advisory council to be known as the ``Advisory Council on 
Green, High-Performing Public School Facilities'' (in this section 
referred to as the ``Advisory Council'') which shall be composed of--
            (1) appropriate officials from the Department of Education;
            (2) representatives of the academic, architectural, 
        business, education, engineering, environmental, labor, and 
        scientific communities; and
            (3) such other representatives as the Secretary deems 
        appropriate.
    (b) Duties of Advisory Council.--
            (1) Advisory duties.--The Advisory Council shall advise the 
        Secretary on the impact of green, high-performing schools, on--
                    (A) teaching and learning;
                    (B) health;
                    (C) energy costs;
                    (D) environmental impact; and
                    (E) other areas that the Secretary and the Advisory 
                Council deem appropriate.
            (2) Other duties.--The Advisory Council shall assist the 
        Secretary in--
                    (A) making recommendations on Federal policies to 
                increase the number of green, high-performing schools;
                    (B) identifying Federal policies that are barriers 
                to helping States and local educational agencies make 
                green, high-performing schools;
                    (C) providing technical assistance and outreach to 
                States and local educational agencies under section 
                339(d); and
                    (D) providing the Secretary such other assistance 
                as the Secretary deems appropriate.
    (c) Consultation.--In carrying out its duties under subsection (b), 
the Advisory Council shall consult with the Chair of the Council on 
Environmental Quality and the heads of appropriate Federal agencies, 
including the Secretary of Commerce, the Secretary of Energy, the 
Secretary of Health and Human Services, the Secretary of Labor, the 
Administrator of the Environmental Protection Agency, and the 
Administrator of the General Services Administration (through the 
Office of Federal High-Performance Green Buildings).

SEC. 344. EDUCATION REGARDING PROJECTS.

    A local educational agency receiving funds under this subtitle may 
encourage schools at which projects are undertaken with such funds to 
educate students about the project, including, as appropriate, the 
functioning of the project and its environmental, energy, 
sustainability, and other benefits.

SEC. 345. AVAILABILITY OF FUNDS.

    (a) Chapter 1.--There are authorized to be appropriated, and there 
are appropriated, to carry out chapter 1 of this subtitle (in addition 
to any other amounts appropriated to carry out such chapter and out of 
any money in the Treasury not otherwise appropriated), $2,020,000,000 
for each of fiscal years 2010 and 2011.
    (b) Chapter 2.--There are authorized to be appropriated, and there 
are appropriated, to carry out chapter 2 of this subtitle (in addition 
to any other amounts appropriated to carry out such chapter and out of 
any money in the Treasury not otherwise appropriated), $30,000,000 for 
each of fiscal years 2010 and 2011.
    (c) Prohibition on Earmarks.--None of the funds appropriated under 
this section may be used for a Congressional earmark as defined in 
clause 9(d) of rule XXI of the Rules of the House of Representatives.

                      Subtitle B--Higher Education

SEC. 351. FEDERAL ASSISTANCE FOR COMMUNITY COLLEGE MODERNIZATION AND 
              CONSTRUCTION.

    (a) In General.--
            (1) Grant program.--From the amounts made available under 
        subsection (i), the Secretary shall award grants to States for 
        the purposes of constructing new community college facilities 
        and modernizing, renovating, and repairing existing community 
        college facilities. Grants awarded under this section shall be 
        used by a State for one or more of the following:
                    (A) To reduce financing costs of loans for new 
                construction, modernization, renovation, or repair 
                projects at community colleges (such as paying interest 
                or points on such loans).
                    (B) To provide matching funds for a community 
                college capital campaign to attract private donations 
                of funds for new construction, modernization, 
                renovation, or repair projects at the community 
                college.
                    (C) To capitalize a revolving loan fund to finance 
                new construction, modernization, renovation, and repair 
                projects at community colleges.
            (2) Allocation.--
                    (A) Determination of available amount.--The 
                Secretary shall determine the amount available for 
                allocation to each State by determining the amount 
                equal to the total number of students in the State who 
                are enrolled in community colleges and who are pursuing 
                a degree or certificate that is not a bachelor's, 
                master's, professional, or other advanced degree, 
                relative to the total number of such students in all 
                States, combined.
                    (B) Allocation.--The Secretary shall allocate to 
                each State selected by the Secretary to receive a grant 
                under this section an amount equal to the amount 
                determined to be available for allocation to such State 
                under subparagraph (A), less any portion of that amount 
                that is subject to a limitation under paragraph (3).
                    (C) Reallocation.--Amounts not allocated under this 
                section to a State because--
                            (i) the State did not submit an application 
                        under subsection (b);
                            (ii) the State submitted an application 
                        that the Secretary determined did not meet the 
                        requirements of such subsection; or
                            (iii) the State is subject to a limitation 
                        under paragraph (3) that prevents the State 
                        from using a portion of the allocation,
                shall be proportionately reallocated under this 
                paragraph to the States that are not described in 
                clause (i), (ii), or (iii) of this subparagraph.
            (3) Grant amount limitations.--A grant awarded to a State 
        under this section--
                    (A) to reduce financing costs of loans for new 
                construction, modernization, renovation, or repair 
                projects at community colleges under paragraph (1)(A) 
                shall be for an amount that is not more than 25 percent 
                of the total principal amount of the loans for which 
                financing costs are being reduced; and
                    (B) to provide matching funds for a community 
                college capital campaign under paragraph (1)(B) shall 
                be for an amount that is not more than 25 percent of 
                the total amount of the private donations of funds 
                raised through such campaign over the duration of such 
                campaign, as such duration is determined by the State 
                in the application submitted under subsection (b).
            (4) Supplement, not supplant.--Funds made available under 
        this section shall be used to supplement, and not supplant, 
        other Federal, State, and local funds that would otherwise be 
        expended to construct new community college facilities or 
        modernize, renovate, or repair existing community college 
        facilities.
    (b) Application.--A State that desires to receive a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information and assurances as the 
Secretary may require. Such application shall include a certification 
by the State that the funds provided under this section for the 
construction of new community college facilities and the modernization, 
renovation, and repair of existing community college facilities will 
improve instruction at such colleges and will improve the ability of 
such colleges to educate and train students to meet the workforce needs 
of employers in the State.
    (c) Use of Funds by Community Colleges.--
            (1) Permissible uses of funds.--Funds made available to 
        community colleges through a loan described in subsection 
        (a)(1)(A), a capital campaign described in subsection 
        (a)(1)(B), or a loan from a revolving loan fund described in 
        subsection (a)(1)(C) shall be used only for the construction, 
        modernization, renovation, or repair of community college 
        facilities that are primarily used for instruction, research, 
        or student housing, which may include any of the following:
                    (A) Repair, replacement, or installation of roofs, 
                including extensive, intensive, or semi-intensive green 
                roofs, electrical wiring, water supply and plumbing 
                systems, sewage systems, storm water runoff systems, 
                lighting systems, building envelope, windows, ceilings, 
                flooring, or doors, including security doors.
                    (B) Repair, replacement, or installation of 
                heating, ventilation, or air conditioning systems, 
                including insulation, and conducting indoor air quality 
                assessments.
                    (C) Compliance with fire, health, seismic, and 
                safety codes, including professional installation of 
                fire and life safety alarms, and modernizations, 
                renovations, and repairs that ensure that the community 
                college's facilities are prepared for emergencies, such 
                as improving building infrastructure to accommodate 
                security measures and installing or upgrading 
                technology to ensure that the community college is able 
                to respond to emergencies such as acts of terrorism, 
                campus violence, and natural disasters.
                    (D) Retrofitting necessary to increase the energy 
                efficiency of the community college's facilities.
                    (E) Modifications necessary to make facilities 
                accessible in compliance with the Americans with 
                Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and 
                section 504 of the Rehabilitation Act of 1973 (29 
                U.S.C. 794).
                    (F) Abatement, removal, or interim controls of 
                asbestos, polychlorinated biphenyls, mold, mildew, or 
                lead-based hazards, including lead-based paint hazards 
                from the community college's facilities.
                    (G) Modernization, renovation, or repair necessary 
                to reduce the consumption of coal, electricity, land, 
                natural gas, oil, or water.
                    (H) Modernization, renovation, and repair relating 
                to improving science and engineering laboratories, 
                libraries, or instructional facilities.
                    (I) Installation or upgrading of educational 
                technology infrastructure.
                    (J) Installation or upgrading of renewable energy 
                generation and heating systems, including solar, 
                photovoltaic, wind, biomass (including wood pellet and 
                woody biomass), waste-to-energy, solar-thermal and 
                geothermal systems, and energy audits.
                    (K) Other modernization, renovation, or repair 
                projects that are primarily for instruction, research, 
                or student housing.
                    (L) Required environmental remediation related to 
                modernization, renovation, or repair described in 
                subparagraphs (A) through (K).
            (2) Green school requirement.--A community college 
        receiving assistance through a loan described in subsection 
        (a)(1)(A), a capital campaign described in subsection 
        (a)(1)(B), or a loan from a revolving loan fund described in 
        subsection (a)(1)(C) shall use not less than 50 percent of such 
        assistance to carry out projects for construction, 
        modernization, renovation, or repair that are certified, 
        verified, or consistent with the applicable provisions of--
                    (A) the LEED Green Building Rating System;
                    (B) Energy Star;
                    (C) the CHPS Criteria, as applicable;
                    (D) Green Globes; or
                    (E) an equivalent program adopted by the State or 
                the State higher education agency that includes a 
                verifiable method to demonstrate compliance with such 
                program.
            (3) Prohibited uses of funds.--
                    (A) In general.--No funds awarded under this 
                section may be used for--
                            (i) payment of maintenance costs;
                            (ii) construction, modernization, 
                        renovation, or repair of stadiums or other 
                        facilities primarily used for athletic contests 
                        or exhibitions or other events for which 
                        admission is charged to the general public; or
                            (iii) construction, modernization, 
                        renovation, or repair of facilities--
                                    (I) used for sectarian instruction, 
                                religious worship, or a school or 
                                department of divinity; or
                                    (II) in which a substantial portion 
                                of the functions of the facilities are 
                                subsumed in a religious mission.
                    (B) Four-year institutions.--No funds awarded to a 
                four-year public institution of higher education under 
                this section may be used for any facility, service, or 
                program of the institution that is not available to 
                students who are pursuing a degree or certificate that 
                is not a bachelor's, master's, professional, or other 
                advanced degree.
    (d) Application of GEPA.--The grant program authorized in this 
section is an applicable program (as that term is defined in section 
400 of the General Education Provisions Act (20 U.S.C. 1221)) subject 
to section 439 of such Act (20 U.S.C. 1232b). The Secretary shall, 
notwithstanding section 437 of such Act (20 U.S.C. 1232) and section 
553 of title 5, United States Code, establish such program rules as may 
be necessary to implement such grant program by notice in the Federal 
Register.
    (e) Concurrent Funding.--Funds made available under this section 
shall not be used to assist any community college that receives funding 
for the construction, modernization, renovation, and repair of 
facilities under any other program under this division, the Higher 
Education Act of 1965, or the American Recovery and Reinvestment Act of 
2009.
    (f) Reports by the States.--Each State that receives a grant under 
this section shall, not later than September 30, 2012, and annually 
thereafter for each fiscal year in which the State expends funds 
received under this section, submit to the Secretary a report that 
includes--
            (1) a description the projects for which the grant funding 
        was, or will be, used;
            (2) a list of the community colleges that have received, or 
        will receive, assistance from the grant through a loan 
        described in subsection (a)(1)(A), a capital campaign described 
        in subsection (a)(1)(B), or a loan from a revolving loan fund 
        described in subsection (a)(1)(C); and
            (3) a description of the amount and nature of the 
        assistance provided to each such college.
    (g) Report by the Secretary.--The Secretary shall submit to the 
authorizing committees (as defined in section 103 of the Higher 
Education Act of 1965) an annual report on the grants made under this 
section, including the information described in subsection (f).
    (h) Definitions.--
            (1) Community college.--As used in this section, the term 
        ``community college'' means--
                    (A) a junior or community college, as such term is 
                defined in section 312(f) of the Higher Education Act 
                of 1965 (20 U.S.C. 1085(f)); or
                    (B) a four-year public institution of higher 
                education (as defined in section 101 of the Higher 
                Education Act of 1965) that awards a significant number 
                of degrees and certificates that are not--
                            (i) bachelor's degrees (or an equivalent); 
                        or
                            (ii) master's, professional, or other 
                        advanced degrees.
            (2) CHPS criteria.--The term ``CHPS Criteria'' means the 
        green building rating program developed by the Collaborative 
        for High Performance Schools.
            (3) Energy star.--The term ``Energy Star'' means the Energy 
        Star program of the United States Department of Energy and the 
        United States Environmental Protection Agency.
            (4) Green globes.--The term ``Green Globes'' means the 
        Green Building Initiative environmental design and rating 
        system referred to as Green Globes.
            (5) Leed green building rating system.--The term ``LEED 
        Green Building Rating System'' means the United States Green 
        Building Council Leadership in Energy and Environmental Design 
        green building rating standard referred to as the LEED Green 
        Building Rating System.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (7) State.--The term ``State'' has the meaning given such 
        term in section 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003).
    (i) Availability of Funds.--There are authorized to be 
appropriated, and there are appropriated, to carry out this section (in 
addition to any other amounts appropriated to carry out this section 
and out of any money in the Treasury not otherwise appropriated), 
$2,500,000,000 for fiscal year 2011, which shall remain available until 
expended.

                TITLE IV--EARLY LEARNING CHALLENGE FUND

SEC. 401. PURPOSE.

    The purpose of this title is to provide grants on a competitive 
basis to States for the following:
            (1) To promote standards reform of State early learning 
        programs serving children from birth through age 5 in order to 
        support the healthy development and improve the school 
        readiness outcomes of young children.
            (2) To establish a high standard of quality in early 
        learning programs that integrates appropriate early learning 
        and development standards across early learning settings.
            (3) To fund and implement quality initiatives that improve 
        the skills and effectiveness of early learning providers, and 
        improve the quality of existing early learning programs, in 
        order to increase the number of disadvantaged children who 
        participate in comprehensive and high-quality early learning 
        programs.
            (4) To ensure that a greater number of disadvantaged 
        children enter kindergarten with the cognitive, social, 
        emotional, and physical skills and abilities needed to be 
        successful in school.
            (5) To increase parents' abilities to access comprehensive 
        and high quality early learning programs across settings for 
        their children.

SEC. 402. PROGRAMS AUTHORIZED.

    (a) Quality Pathways Grants.--The Secretary shall use funds made 
available to carry out this title for a fiscal year to award grants on 
a competitive basis to States in accordance with section 403.
    (b) Development Grants.--The Secretary shall use funds made 
available to carry out this title for a fiscal year to award grants in 
accordance with section 404 on a competitive basis to States that 
demonstrate a commitment to establishing a system of early learning 
that will include the components described in section 403(c)(3) but are 
not--
            (1) eligible to be awarded a grant under subsection (a); or
            (2) are not awarded such a grant after application.
    (c) Reservations of Federal Funds.--
            (1) Research, evaluation, and administration.--From the 
        amount made available to carry out this title for a fiscal 
        year, the Secretary--
                    (A) shall reserve up to 2 percent jointly to 
                administer this title with the Secretary of Health and 
                Human Services; and
                    (B) shall reserve up to 3 percent to carry out 
                activities under section 405.
            (2) Tribal school readiness planning demonstration.--After 
        making the reservations under paragraph (1), the Secretary 
        shall reserve 0.25 percent for a competitive grant program for 
        Indian tribes to develop and implement school readiness plans 
        that--
                    (A) are coordinated with local educational agencies 
                serving children who are members of the tribe; and
                    (B) include American Indian and Alaska Native Head 
                Start and Early Head Start programs, tribal child care 
                programs, Indian Health Service programs, and other 
                tribal programs serving children.
            (3) Quality pathways grants.--
                    (A) In general.--From the amount made available to 
                carry out this title for a fiscal year and not reserved 
                under paragraph (1) or (2), the Secretary shall reserve 
                a percent (which shall be not greater than 65 percent 
                for fiscal years 2010 through 2012 and not greater than 
                85 percent for fiscal year 2013 and each succeeding 
                fiscal year) determined under subparagraph (B) to carry 
                out subsection (a).
                    (B) Determination of amount.--In determining the 
                amount to reserve under subparagraph (A), the 
                Secretary, consistent with section 403(e), shall take 
                into account the following:
                            (i) The total number of States determined 
                        by the Secretary to qualify for receipt of a 
                        grant under this title for the year.
                            (ii) The number of children under age 5 
                        from low-income families in each State with an 
                        approved application under section 403 for the 
                        year.
                    (C) Reallocation.--For fiscal year 2013 and 
                subsequent fiscal years, the Secretary may reallocate 
                funds allocated for development grants under subsection 
                (b) for the purpose of providing additional grants 
                under subsection (a), if the Secretary determines that 
                there is an insufficient number of applications that 
                meet the requirements for a grant under subsection (b).
    (d) State Applications.--In applying for a grant under this title, 
a State--
            (1) shall designate a State-level entity for administration 
        of the grant;
            (2) shall coordinate proposed activities with the State 
        Advisory Council on Early Childhood Education and Care 
        (established pursuant to section 642B(b)(1)(A) of the Head 
        Start Act (42 U.S.C. 9837b(b)(1)(A))) and shall incorporate 
        plans and recommendations from such Council in the application, 
        where applicable; and
            (3) otherwise shall submit the application to the Secretary 
        at such time, in such manner, and containing such information 
        as the Secretary may reasonably require.
    (e) Priority in Awarding Grants.--In awarding grants under this 
title, the Secretary shall give priority to States--
            (1) whose applications contain assurances that the State 
        will use, in part, funds reserved under section 658G of the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858e) for activities described in section 403(f);
            (2) that will commit to dedicating a significant increase, 
        in comparison to recent fiscal years, in State expenditures on 
        early learning programs and services; and
            (3) that demonstrate efforts to build public-private 
        partnerships designed to accomplish the purposes of this title.
    (f) Maintenance of Effort.--
            (1) In general.--With respect to each period for which a 
        State is awarded a grant under this title, the aggregate 
        expenditures by the State and its political subdivisions on 
        early learning programs and services shall be not less than the 
        level of the expenditures for such programs and services by the 
        State and its political subdivisions for fiscal year 2006.
            (2) State expenditures.--For purposes of paragraph (1), 
        expenditures by the State on early learning programs and 
        services shall include, at a minimum, the following:
                    (A) State matching and maintenance of effort funds 
                for the Child Care and Development Block Grant Act of 
                1990 (42 U.S.C. 9858 et seq.).
                    (B) State matching funds for the State Advisory 
                Council on Early Childhood Education and Care 
                (established pursuant to section 642B(b)(1)(A) of the 
                Head Start Act (42 U.S.C. 9837b(b)(1)(A))).
                    (C) State expenditures on public pre-kindergarten, 
                Head Start (including Early Head Start), and other 
                State early learning programs and services dedicated to 
                children (including State expenditures under part C of 
                the Individuals with Disabilities Education Act (20 
                U.S.C. 1431 et seq.)).
    (g) Prohibitions on Use of Funds.--Funds under this title may not 
be used for any of the following:
            (1) Assessments that provide rewards or sanctions for 
        individual children or teachers.
            (2) A single assessment used as the primary or sole method 
        for assessing program effectiveness.
            (3) Evaluating children other than for--
                    (A) improving instruction or classroom environment;
                    (B) targeting professional development;
                    (C) determining the need for health, mental health, 
                disability, or family support services;
                    (D) informing the quality improvement process at 
                the State level;
                    (E) program evaluation for the purposes of program 
                improvement and parent information; or
                    (F) research conducted as part of the national 
                evaluation required by section 405(2).
    (h) Federal Administration.--
            (1) In general.--With respect to this title, the Secretary 
        shall bear responsibility for obligating and disbursing funds 
        and ensuring compliance with applicable laws and administrative 
        requirements, subject to paragraph (2).
            (2) Interagency agreement.--The Secretary of Education and 
        the Secretary of Health and Human Services shall jointly 
        administer this title on such terms as such secretaries shall 
        set forth in an interagency agreement.

SEC. 403. QUALITY PATHWAYS GRANTS.

    (a) Grant Period.--Grants under section 402(a)--
            (1) may be awarded for a period not to exceed 5 years; and
            (2) may be renewed, subject to approval by the Secretary, 
        and based on the State's progress in--
                    (A) increasing the percentage of disadvantaged 
                children in each age group (infants, toddlers, and 
                preschoolers) who participate in high-quality early 
                learning programs;
                    (B) increasing the number of high-quality early 
                learning programs in low-income communities;
                    (C) implementing an early learning system that 
                includes the components described in subsection (c)(3); 
                and
                    (D) incorporating the findings and recommendations 
                reported by the commission established under section 
                405(1) into the State system of early learning.
    (b) Matching Requirement.--
            (1) In general.--Subject to subsection (g), to be eligible 
        to receive a grant under section 402(a), a State shall 
        contribute to the activities assisted under the grant non-
        Federal matching funds in an amount equal to not less than the 
        applicable percent of the amount of the grant.
            (2) Applicable percent.--For purposes of paragraph (1), the 
        applicable percent means--
                    (A) 10 percent in the first fiscal year of the 
                grant;
                    (B) 10 percent in the second fiscal year of the 
                grant;
                    (C) 15 percent in the third fiscal year of the 
                grant; and
                    (D) 20 percent in the fourth fiscal year of the 
                grant and subsequent fiscal years.
            (3) Non-federal funds.--A State may use the following to 
        satisfy the requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (4) Private contributions.--Private contributions made as 
        part of public-private partnerships to increase the number of 
        low-income children in high-quality early learning programs in 
        a State may be used by the State to satisfy the requirement of 
        paragraph (1).
            (5) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State that has submitted an 
        application for a grant under section 402(a) if the State 
        demonstrates a need for such waiver or reduction due to extreme 
        financial hardship, as defined by the Secretary by regulation.
    (c) State Applications.--In order to be considered for a grant 
under section 402(a), a State's application under section 402(d) shall 
include the following:
            (1) A description of how the State will use the grant to 
        implement quality initiatives to improve early learning 
        programs serving disadvantaged children from birth to age 5 to 
        lead to a greater percentage of such children participating in 
        higher quality early learning programs.
            (2) A description of the goals and benchmarks the State 
        will establish to lead to a greater percentage of disadvantaged 
        children participating in higher quality early learning 
        programs to improve school readiness outcomes, including an 
        established baseline of the number of disadvantaged children in 
        high-quality early learning programs.
            (3) A description of how the State will implement a 
        governance structure and a system of early learning programs 
        and services that includes the following components:
                    (A) Not later than 12 months after receiving notice 
                of an award of the grant, complete State early learning 
                and development standards that include social and 
                emotional, cognitive, and physical development domains, 
                and approaches to learning that are developmentally 
                appropriate (including culturally and linguistically 
                appropriate) for all children.
                    (B) A process to ensure that State early learning 
                and development standards are integrated into the 
                instructional and programmatic practices of early 
                learning programs and services, including services 
                provided to children under section 619 and part C of 
                the Individuals with Disabilities Education Act (20 
                U.S.C. 1419, 1431 et seq.).
                    (C) A program rating system that builds on 
                licensing requirements, as appropriate, and other State 
                regulatory standards and that--
                            (i) is designed to improve quality and 
                        effectiveness across different types of early 
                        learning settings;
                            (ii) integrates evidence-based program 
                        quality standards that reflect standard levels 
                        of quality and has progressively higher levels 
                        of program quality;
                            (iii) integrates the State's early learning 
                        and development standards for the purpose of 
                        improving instructional and programmatic 
                        practices;
                            (iv) addresses quality and effective 
                        inclusion of children with disabilities or 
                        developmental delays across different types of 
                        early learning settings;
                            (v) addresses staff qualifications and 
                        professional development;
                            (vi) provides financial incentives and 
                        other supports to help programs meet and 
                        sustain higher levels of quality;
                            (vii) includes mechanisms for evaluating 
                        how programs are meeting those standards and 
                        progressively higher levels of quality; and
                            (viii) includes a mechanism for public 
                        awareness and understanding of the program 
                        rating system, including rating levels of 
                        individual programs.
                    (D) A system of program review and monitoring that 
                is designed to rate providers using the system 
                described in subparagraph (C) and to assess and improve 
                programmatic practices, instructional practices, and 
                classroom environment.
                    (E) A process to support early learning programs 
                integrating instructional and programmatic practices 
                that--
                            (i) include developmentally appropriate 
                        (including culturally and linguistically 
                        appropriate), ongoing, classroom-based 
                        instructional assessments for each domain of 
                        child development and learning (including 
                        social and emotional, cognitive, and physical 
                        development domains and approaches to learning) 
                        to guide and improve instructional practice, 
                        professional development of staff, and 
                        services; and
                            (ii) are aligned with the curricula used in 
                        the early learning program and with the State 
                        early learning and development standards or the 
                        Head Start Child Outcomes Framework (as 
                        described in the Head Start Act), as 
                        applicable.
                    (F) Minimum preservice early childhood development 
                and education training requirements for providers in 
                early learning programs.
                    (G) A comprehensive plan for supporting the 
                professional preparation and the ongoing professional 
                development of an effective, well-compensated early 
                learning workforce, which plan includes training and 
                education that is sustained, intensive, and classroom-
                focused and leads toward a credential or degree and is 
                tied to improved compensation.
                    (H) An outreach strategy to promote understanding 
                by parents and families of--
                            (i) how to support their child's early 
                        development and learning;
                            (ii) the State's program rating system, as 
                        described in subparagraph (C); and
                            (iii) the rating of the program in which 
                        their child is enrolled.
                    (I) A coordinated system to facilitate screening, 
                referral, and provision of services related to health, 
                mental health, disability, and family support for 
                children participating in early learning programs.
                    (J) A process for evaluating school readiness in 
                children that reflects all of the major domains of 
                development, and that is used to guide practice and 
                improve early learning programs.
                    (K) A coordinated data infrastructure that 
                facilitates--
                            (i) uniform data collection about the 
                        quality of early learning programs, essential 
                        information about the children and families 
                        that participate in such programs, and the 
                        qualifications and compensation of the early 
                        learning workforce in such programs; and
                            (ii) alignment and interoperability between 
                        the data system for early learning programs for 
                        children and data systems for elementary and 
                        secondary education.
            (4) A description of how the funds provided under the grant 
        will be targeted to prioritize increasing the number and 
        percentage of low-income children in high-quality early 
        learning programs, including children--
                    (A) in each age group (infants, toddlers, and 
                preschoolers);
                    (B) with developmental delays and disabilities;
                    (C) with limited English proficiency; and
                    (D) living in rural areas.
            (5) An assurance that the grant will be used to improve the 
        quality of early learning programs across a range of types of 
        settings and providers of such programs.
            (6) A description of the steps the State will take to make 
        progress toward including all center-based child care programs, 
        family child care programs, State-funded prekindergarten, Head 
        Start programs, and other early learning programs, such as 
        those funded under title I of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6301 et seq.) or receiving 
        funds under section 619 or part C of the Individuals with 
        Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.) in 
        the State program rating system described in paragraph (3)(C).
            (7) An assurance that the State, not later than 18 months 
        after receiving notice of an award of the grant, will conduct 
        an analysis of the alignment of the State's early learning and 
        development standards with--
                    (A) appropriate academic content standards for 
                grades kindergarten through 3; and
                    (B) elements of program quality standards for early 
                learning programs.
            (8) An assurance that the grant will be used only to 
        supplement, and not to supplant, Federal, State, and local 
        funds otherwise available to support existing early learning 
        programs and services.
            (9) A description of any disparity by age group (infants, 
        toddlers, and preschoolers) of available high-quality early 
        learning programs in low-income communities and the steps the 
        State will take to decrease such disparity, if applicable.
            (10) A description of how the State early learning and 
        development standards will address the needs of children with 
        limited English proficiency, including by incorporating 
        benchmarks related to English language development.
            (11) A description of how the State's professional 
        development plan will prepare the early learning workforce to 
        support the early learning needs of children with limited 
        English proficiency.
            (12) A description of how the State will improve 
        interagency collaboration and coordinate the purposes of this 
        title with the activities funded under--
                    (A) section 658G of the Child Care and Development 
                Block Grant Act of 1990 (42 U.S.C. 9858e);
                    (B) section 619 and part C of the Individuals with 
                Disabilities Education Act (20 U.S.C. 1419, 1431 et 
                seq.);
                    (C) title I of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 6301 et seq.);
                    (D) State-funded pre-kindergarten programs (where 
                applicable);
                    (E) Head Start programs; and
                    (F) other early childhood programs and services.
            (13) A description of how the State's early learning 
        policies, including child care policies, facilitate access to 
        high-quality early learning programs for children from low-
        income families.
            (14) An assurance that the State will continue to 
        participate in part C of the Individuals with Disabilities 
        Education Act (20 U.S.C. 1431 et seq.) for the duration of the 
        grant.
    (d) Criteria Used in Awarding Grants.--In awarding grants under 
section 402(a), the Secretary shall evaluate the applications, and 
award grants under such section on a competitive basis, based on--
            (1) the quality of the application submitted pursuant to 
        section 402(d);
            (2) the priority factors described in section 402(e);
            (3) evidence of significant progress in establishing a 
        system of early learning for children that includes the 
        components described in subsection (c)(3); and
            (4) the State's capacity to fully complete implementation 
        of such a system.
    (e) Criterion Used in Determining Amount of Award.--In determining 
the amount to award a State under section 402(a), the Secretary shall 
take into account--
            (1) the proportion of children under age 5 from low-income 
        families in the State relative to such proportion in other 
        States; and
            (2) the State plan and capacity to implement the criteria 
        described in paragraphs (3) and (4) of subsection (d).
    (f) State Uses of Funds.--
            (1) In general.--A State receiving a grant under section 
        402(a) shall use the grant as follows:
                    (A) Not less than 65 percent of the grant amount 
                shall be used for two or more of the following 
                activities to improve the quality of early learning 
                programs serving disadvantaged children:
                            (i) Initiatives that improve the 
                        credentials of early learning providers and are 
                        tied to increased compensation.
                            (ii) Initiatives that help early learning 
                        programs meet and sustain higher program 
                        quality standards, such as--
                                    (I) improving the ratio of early 
                                learning provider to children in early 
                                learning settings;
                                    (II) reducing group size;
                                    (III) improving the qualifications 
                                of early learning providers; and
                                    (IV) supporting effective education 
                                and training for early learning 
                                providers.
                            (iii) Implementing classroom observation 
                        assessments and data-driven decisions (which 
                        may include implementation of a research-based 
                        prevention and intervention framework designed 
                        to build social competence and prevent 
                        challenging behaviors) tied to activities that 
                        improve instructional practices, programmatic 
                        practices, or classroom environment and promote 
                        school readiness.
                            (iv) Providing financial incentives to 
                        early learning programs--
                                    (I) for undertaking quality 
                                improvements that promote healthy 
                                development and school readiness; and
                                    (II) maintaining quality 
                                improvements that promote healthy 
                                development and school readiness.
                            (v) Integrating State early learning and 
                        development standards into instructional and 
                        programmatic practices in early learning 
                        programs.
                            (vi) Providing high-quality, sustained, 
                        intensive, and classroom-focused professional 
                        development that improves the knowledge and 
                        skills of early learning providers, including 
                        professional development related to meeting the 
                        needs of diverse populations.
                            (vii) Building the capacity of early 
                        learning programs and communities to promote 
                        the understanding of parents and families of 
                        the State's early learning system and the 
                        rating of the program in which their child is 
                        enrolled and to encourage the active 
                        involvement and engagement of parents and 
                        families in the learning and development of 
                        their children.
                            (viii) Building the capacity of early 
                        learning programs and communities to facilitate 
                        screening, referral, and provision of services 
                        related to health, mental health, disability, 
                        and family support for children participating 
                        in early learning programs.
                            (ix) Other innovative activities, proposed 
                        by the State and approved in advance by the 
                        Secretary that are--
                                    (I) based on successful practices;
                                    (II) designed to improve the 
                                quality of early learning programs and 
                                services; and
                                    (III) advance the system components 
                                described in subsection (c)(3).
                    (B) The remainder of the grant amount may be used 
                for one or more of the following:
                            (i) Implementation or enhancement of the 
                        State's data system described in subsection 
                        (c)(3)(K), including interoperability across 
                        agencies serving children, and unique child and 
                        program identifiers.
                            (ii) Enhancement of the State's oversight 
                        system for early learning programs, including 
                        the implementation of a program rating system.
                            (iii) The development and implementation of 
                        measures of school readiness of children that 
                        reflect all of the major domains of child 
                        development and that inform the quality 
                        improvement process.
            (2) Priority.--A State receiving a grant under section 
        402(a) shall use the grant so as to prioritize improving the 
        quality of early learning programs serving children from low-
        income families.
    (g) Special Rule.--
            (1) In general.--Beginning with the second fiscal year of a 
        grant under section 402(a), a State with respect to which the 
        Secretary certifies that the State has made sufficient progress 
        in implementing the requirements of the grant may apply to the 
        Secretary to reserve up to 25 percent of the amount of the 
        grant to expand access for children from low-income families to 
        the highest quality early learning programs that offer full-day 
        services, except that the State must agree to contribute for 
        such purpose non-Federal matching funds in an amount equal to 
        not less than 20 percent of the amount reserved under this 
        subsection. One-half of such non-Federal matching funds may be 
        provided by a private entity.
            (2) Non-federal funds.--A State may use the following to 
        satisfy the matching requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (3) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State under paragraph (1) if 
        the State demonstrates a need for such waiver or reduction due 
        to extreme financial hardship, as defined by the Secretary by 
        regulation.
    (h) Improvement Plan.--If the Secretary determines that a State 
receiving a grant under section 402(a) is encountering barriers to 
reaching goals described in subsection (c)(2), the State shall develop 
a plan for improvement in consultation with, and subject to approval 
by, the Secretary.

SEC. 404. DEVELOPMENT GRANTS.

    (a) Grant Period.--Grants under section 402(b) may be awarded for a 
period not to exceed 3 years, and may not be renewed.
    (b) State Uses of Funds.--
            (1) In general.--A State receiving a grant under section 
        402(b) shall use the grant to undertake activities to develop 
        the early learning system components described in section 
        403(c)(3) and that will allow a State to become eligible and 
        competitive for a grant described in section 402(a).
            (2) Priority.--A State receiving a grant under section 
        402(b) shall use the grant so as to prioritize improving the 
        quality of early learning programs serving low-income children.
    (c) Matching Requirement.--
            (1) In general.--To be eligible to receive a grant under 
        section 402(b), a State shall contribute to the activities 
        assisted under the grant non-Federal matching funds in an 
        amount equal to not less than the applicable percent of the 
        amount of the grant.
            (2) Applicable percent.--For purposes of paragraph (1), the 
        applicable percent means--
                    (A) 20 percent in the first fiscal year of the 
                grant;
                    (B) 25 percent in the second fiscal year of the 
                grant; and
                    (C) 30 percent in the third fiscal year of the 
                grant.
            (3) Non-federal funds.--A State may use the following to 
        satisfy the requirement of paragraph (1):
                    (A) Cash.
                    (B) In-kind contributions for the acquisition, 
                construction, or improvement of early learning program 
                facilities serving disadvantaged children.
                    (C) Technical assistance related to subparagraph 
                (B).
            (4) Private contributions.--Private contributions made as 
        part of public-private partnerships to increase the number of 
        low-income children in high-quality early learning programs in 
        a State may be used by the State to satisfy the requirement of 
        paragraph (1).
            (5) Financial hardship waiver.--The Secretary may waive or 
        reduce the non-Federal share of a State that has submitted an 
        application for a grant under section 402(b) if the State 
        demonstrates a need for such waiver or reduction due to extreme 
        financial hardship, as defined by the Secretary by regulation.

SEC. 405. RESEARCH AND EVALUATION.

    From funds reserved under section 402(c)(1), the Secretary of 
Education and the Secretary of Health and Human Services, acting 
jointly, shall carry out the following activities:
            (1) Establishing a national commission whose duties shall 
        include--
                    (A) reviewing the status of State and Federal early 
                learning program quality standards and early learning 
                and development standards;
                    (B) recommending benchmarks for program quality 
                standards and early learning and development standards, 
                including taking into consideration the school 
                readiness needs of children with limited English 
                proficiency; and
                    (C) reporting to the Secretaries of Education and 
                Health and Human Services not later than 2 years after 
                the date of the enactment of this Act on the 
                commission's findings and recommendations.
            (2) Conducting a national evaluation of the grants made 
        under this title through the Institute of Education Science in 
        collaboration with the appropriate research divisions within 
        the Department of Health and Human Services.
            (3) Supporting a research collaborative among the Institute 
        of Education Sciences, the National Institute of Child Health 
        and Human Development, the Office of Planning, Research, and 
        Evaluation within the Administration for Children and Families 
        in the Department of Health and Human Services, and, as 
        appropriate, other Federal entities to support research on 
        early learning that can inform improved State and other 
        standards and licensing requirements and improved child 
        outcomes, which collaborative shall--
                    (A) biennially prepare and publish for public 
                comment a detailed research plan;
                    (B) support early learning research activities that 
                could include determining--
                            (i) the characteristics of early learning 
                        programs that produce positive developmental 
                        outcomes for children;
                            (ii) the effects of program quality 
                        standards on child outcomes;
                            (iii) the relationships between specific 
                        interventions and types of child and family 
                        outcomes;
                            (iv) the effectiveness of early learning 
                        provider training in raising program quality 
                        and improving child outcomes;
                            (v) the effectiveness of professional 
                        development strategies in raising program 
                        quality and improving child outcomes; and
                            (vi) how to improve the school readiness 
                        outcomes of children with limited English 
                        proficiency, special needs, and homeless 
                        children, including evaluation of professional 
                        development programs for working with such 
                        children; and
                    (C) disseminate relevant research findings and best 
                practices.
            (4) Evaluating barriers to improving the quality of early 
        learning programs serving low-income children, including 
        evaluating barriers to successful interagency collaboration and 
        coordination, by conducting a review of the statewide strategic 
        reports developed by the State Advisory Councils on Early Care 
        and Education and other relevant reports, reporting the 
        findings of such review to Congress, and disseminating relevant 
        research findings and best practices.

SEC. 406. REPORTING REQUIREMENTS.

    (a) Reports to Congress.--For each year in which funding is 
provided under this title, the Secretary shall submit an annual report 
to the Committee on Education and Labor of the House of Representatives 
and the Committee on Health, Education, Labor and Pensions of the 
Senate on the activities carried out under this title, including, at a 
minimum, information on the following:
            (1) The activities undertaken by States to increase the 
        availability of high-quality early learning programs.
            (2) The number of children in high-quality early learning 
        programs, and the change from the prior year, disaggregated by 
        State, age, and race.
            (3) The number of early learning providers enrolled, with 
        assistance from funds under this title, in a program to obtain 
        a credential or degree in early childhood education and the 
        settings in which such providers work.
            (4) A summary of State progress in implementing a system of 
        early learning with the components described in section 
        403(c)(3).
            (5) A summary of the research activities being conducted 
        under section 405 and the findings of such research.
    (b) Reports to Secretary.--Each State that receives a grant under 
this title shall submit to the Secretary an annual report that 
includes, at a minimum, information on the activities carried out by 
the State under this title, including the following:
            (1) The progress on fully implementing and integrating into 
        a system of early learning each of the components described in 
        section 403(c)(3).
            (2) The State's progress in meeting its goals for 
        increasing the number of disadvantaged children participating 
        in high-quality early learning programs, disaggregated by child 
        age.
            (3) The number and percentage of disadvantaged children 
        participating in early learning programs at each level of 
        quality, disaggregated by race, family income, child age, 
        disability, and limited English proficiency status.
            (4) The number of providers participating in the State 
        quality rating system, disaggregated by setting, rating, and 
        the number of high-quality providers available in low-income 
        communities.
            (5) Information on how the funds provided under this title 
        were used to increase the availability of high-quality early 
        learning programs for each age group, disaggregated by race and 
        limited English proficient status, to the maximum extent 
        practicable.
            (6) Information on professional development and training 
        expenditures, including--
                    (A) the number of early learning providers engaged 
                in such activities; and
                    (B) the number of early learning providers enrolled 
                in programs to obtain a credential or degree in early 
                childhood education, disaggregated by the type of 
                credential and degree.
            (7) The change in the number and percentage of early 
        learning providers with appropriate credentials or degrees in 
        early childhood education, including the change in compensation 
        given to such providers, in comparison to the prior fiscal 
        year, disaggregated by early learning setting and the type of 
        credential or degree.
            (8) In the case of a State receiving a grant under section 
        402(a), the percentage of children receiving assistance under 
        the Child Care and Development Block Grant Act of 1990 (42 
        U.S.C. 9858 et seq.) who participate in the highest quality 
        early learning programs, disaggregated by program setting and 
        child age.
            (9) Barriers to expanding access to high-quality early 
        learning programs for disadvantaged children.

SEC. 407. CONSTRUCTION.

    Nothing in this title--
            (1) shall be construed to require a child to participate in 
        an early learning program; or
            (2) shall be used to deny entry to kindergarten for any 
        individual if the individual is legally eligible, as defined by 
        State or local law.

SEC. 408. DEFINITIONS.

    For purposes of this title:
            (1) Child.--The term ``child'' refers to an individual from 
        birth through the day the individual enters kindergarten.
            (2) Disadvantaged.--The term ``disadvantaged'', when used 
        with respect to a child, means a child whose family income is 
        described in section 658P(4)(B) of the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)).
            (3) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 637 of the Head Start Act 
        (42 U.S.C. 9832).
            (4) Limited english proficient.--The term ``limited English 
        proficient'' has the meaning given such term in section 637 of 
        the Head Start Act (42 U.S.C. 9832).
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (6) State.--The term ``State'' has the meaning given such 
        term in section 9101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7801).

SEC. 409. AVAILABILITY OF FUNDS.

    There are authorized to be appropriated, and there are 
appropriated, to carry out this title (in addition to any other amounts 
appropriated to carry out this title and out of any money in the 
Treasury not otherwise appropriated) $1,000,000,000 for each of fiscal 
years 2010 through 2017.

                TITLE V--AMERICAN GRADUATION INITIATIVE

SEC. 501. AUTHORIZATION AND APPROPRIATION.

    (a) Authorization and Appropriation.--There are authorized to be 
appropriated, and there are appropriated, to carry out this title (in 
addition to any other amounts appropriated to carry out this title and 
out of any money in the Treasury not otherwise appropriated), 
$730,000,000 for each of the fiscal years 2010 through 2013, and 
$680,000,000 for each of the fiscal years 2014 through 2019.
    (b) Allocations.--Of the amount appropriated under subsection (a)--
            (1) $630,000,000 shall be made available for each of the 
        fiscal years 2010 through 2013 to carry out section 503;
            (2) $630,000,000 shall be made available for each of the 
        fiscal years 2014 through 2019 to carry out section 504;
            (3) $50,000,000 shall be made available for each of the 
        fiscal years 2010 through 2019 to carry out subsection (a) of 
        section 505; and
            (4) $50,000,000 shall be made available for each of the 
        fiscal years 2010 through 2013 to carry out subsections (b) and 
        (c) of section 505.
    (c) Responsibility.--
            (1) In general.--With respect to sections 503 and 504, the 
        Secretary of Education shall bear the responsibility for 
        obligating and disbursing funds under such sections and 
        ensuring compliance with applicable law and administrative 
        requirements, subject to paragraph (2).
            (2) Interagency agreement.--The Secretary of Education and 
        the Secretary of Labor shall jointly administer sections 503 
        and 504 on such terms as such Secretaries shall set forth in an 
        interagency agreement.

SEC. 502. DEFINITIONS; GRANT PRIORITY.

    (a) Definitions.--In this title:
            (1) Area career and technical education school.--The term 
        ``area career and technical education school'' has the meaning 
        given such term in section 3 of the Carl D. Perkins Career and 
        Technical Education Act of 2006 (20 U.S.C. 2302).
            (2) Community college.--The term ``community college'' 
        means a public institution of higher education at which the 
        highest degree that is predominantly awarded to students is an 
        associate's degree.
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) a community college or community college 
                district;
                    (B) an area career and technical education school;
                    (C) a public four-year institution of higher 
                education that--
                            (i) offers two-year degrees;
                            (ii) will use funds provided under this 
                        section for activities at the certificate and 
                        associate degree levels; and
                            (iii) is not reasonably close, as 
                        determined by the Secretary, to a community 
                        college;
                    (D) a public four-year institution of higher 
                education that is in partnership with an eligible 
                entity described in subparagraph (A), (B), or (C);
                    (E) a State that--
                            (i) is in compliance with section 137 of 
                        the Higher Education Act of 1965 (20 U.S.C. 
                        1015f);
                            (ii) has an articulation agreement pursuant 
                        to section 486A of such Act (20 U.S.C. 1093a); 
                        and
                            (iii) is in partnership with an eligible 
                        entity described in subparagraph (A), (B), (C), 
                        or (D); or
                    (F) a consortium of at least 2 entities described 
                in subparagraphs (A) through (E).
            (4) Industry or sector partnership.--The term ``industry or 
        sector partnership'' has the meaning given such term in section 
        782(f) of the Higher Education Act of 1965.
            (5) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            (6) Philanthropic organization.--The term ``philanthropic 
        organization'' has the meaning given such term in section 
        781(i) of the Higher Education Act of 1965 (20 U.S.C. 1141(i)).
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (8) State.--The term ``State'' has the meaning given such 
        term in section 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003).
            (9) State public employment service.--The term ``State 
        public employment service'' refers to a State public employment 
        service established under the Wagner-Peyser Act (29 U.S.C. 49 
        et seq.).
            (10) State workforce investment board; local workforce 
        investment board.--The terms ``State workforce investment 
        board'' and ``local workforce investment board'' refer to a 
        State workforce investment board established under section 111 
        of the Workforce Investment Act (29 U.S.C. 2821) and a local 
        workforce investment board established under section 117 of 
        such Act (29 U.S.C. 2832), respectively.
            (11) Supportive services.--The term ``supportive services'' 
        has the meaning given such term in section 101(46) of the 
        Workforce Investment Act of 1998 (29 U.S.C. 2801(46)).
    (b) Grant Priority.--In addition to any grant priorities 
established under any other provision of this title, the Secretary, in 
awarding grants under this title, shall give priority to applications 
focused on serving low-income, nontraditional students who do not have 
a bachelor's degree, and who have one or more of the following 
characteristics:
            (1) Are the first generation in their family to attend 
        college.
            (2) Have delayed enrollment in college.
            (3) Have dependents.
            (4) Are independent students.
            (5) Work at least 25 hours per week.
            (6) Are out-of-school youth without a high school diploma.

SEC. 503. GRANTS TO ELIGIBLE ENTITIES FOR COMMUNITY COLLEGE REFORM.

    (a) Program Authorization.--
            (1) Grants authorized.--
                    (A) In general.--Subject to paragraph (2), from the 
                amount appropriated to carry out this section, the 
                Secretary, in coordination with the Secretary of Labor, 
                shall award grants to eligible entities, on a 
                competitive basis, to establish and support programs 
                described in subparagraph (B) at eligible entities 
                described in subparagraphs (A) through (D) of section 
                502(a)(3).
                    (B) Programs.--The programs to be established and 
                supported with grants under subparagraph (A) (and 
                carried out through activities described in subsection 
                (f)) shall be programs--
                            (i) that are--
                                    (I) innovative programs; or
                                    (II) programs of demonstrated 
                                effectiveness, based on the evaluations 
                                of similar programs funded by the 
                                Department of Education or the 
                                Department of Labor, or other research 
                                of similar programs; and
                            (ii) that lead to the completion of a 
                        postsecondary degree, certificate, or industry-
                        recognized credential leading to a skilled 
                        occupation in a high-demand industry.
            (2) Limitation.--For each fiscal year for which funds are 
        appropriated to carry out this section, the aggregate amount of 
        the grants awarded to eligible entities that are States, or 
        consortia that include a State, shall be not more than 50 
        percent of the total amount appropriated under section 
        501(b)(1) for such fiscal year.
            (3) Prohibition.--The Secretary shall not award a grant to 
        an eligible entity for the same activities that are being 
        supported by other Federal funds.
    (b) Grant Duration and Amount.--
            (1) Duration.--A grant under this section shall be awarded 
        to an eligible entity for a 4-year period, except that if the 
        Secretary determines that the eligible entity has not made 
        demonstrable progress in achieving the benchmarks developed 
        pursuant to subsection (g) by the end of the third year of such 
        grant period, no further grant funds shall be made available to 
        the entity after the date of such determination.
            (2) Amount.--The minimum amount of a total grant award 
        under this section over the 4-year period of the award shall be 
        $750,000.
    (c) Priority.--In awarding grants under this section, the Secretary 
shall give priority to eligible entities that--
            (1) enter into partnerships with--
                    (A) philanthropic or research organizations with 
                expertise in meeting the goals of this section;
                    (B) businesses or industry or sector partnerships 
                that--
                            (i) design and implement programs described 
                        in subsection (a)(1)(B);
                            (ii) pay a portion of the costs of such 
                        programs; and
                            (iii) agree to collaborate with one or more 
                        eligible entities to hire individuals who have 
                        completed a particular postsecondary degree, 
                        certificate, or credential program; or
                    (C) labor organizations that provide technical 
                expertise for occupationally specific education 
                necessary for an industry-recognized credential leading 
                to a skilled occupation in a high-demand industry; or
            (2) are institutions of higher education eligible for 
        assistance under title III or V of the Higher Education Act of 
        1965, or consortia that include such an institution.
    (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
            (1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be not greater than \1/2\ 
        of the costs of the programs, services, and policies described 
        in subsection (f) that are carried out under the grant.
            (2) Non-federal share.--
                    (A) In general.--The amount of the non-Federal 
                share under this section for a fiscal year shall be not 
                less than \1/2\ of the costs of the programs, services, 
                and policies described in subsection (f) that are 
                carried out under the grant. The non-Federal share may 
                be in cash or in kind, and may be provided from State 
                resources, local resources, contributions from private 
                organizations, or a combination thereof.
                    (B) Financial hardship waiver.--The Secretary may 
                waive or reduce the non-Federal share of an eligible 
                entity that has submitted an application under this 
                section if the entity demonstrates a need for such 
                waiver or reduction due to extreme financial hardship, 
                as defined by the Secretary by regulation.
            (3) Supplement, not supplant.--The Federal and non-Federal 
        shares required by this section shall be used to supplement, 
        and not supplant, State and private resources that would 
        otherwise be expended to establish and support programs 
        described in subsection (a)(1)(B) at eligible entities.
    (e) Application.--An eligible entity seeking to receive a grant 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require. Such application shall describe the programs under 
subsection (a)(1)(B) that the eligible entity will carry out using the 
grant funds, (including the programs, services, and policies under 
subsection (f)), including--
            (1) the goals of such programs, services, and policies;
            (2) how the eligible entity will allocate grant funds for 
        such programs, services, and policies;
            (3) how such programs, services, and policies, and the 
        resources of the eligible entity, will enable the eligible 
        entity to meet the benchmarks developed pursuant to subsection 
        (g), and how the eligible entity will track and report the 
        entity's progress in reaching such benchmarks;
            (4) how the eligible entity will use such programs, 
        services, and policies to establish quantifiable targets for 
        improving graduation rates and employment-related outcomes;
            (5) how the eligible entity will serve high-need 
        populations through such programs, services, and policies;
            (6) how the eligible entity will partner with industry or 
        sector partnerships in the State, the State public employment 
        service, and State or local workforce investment boards in 
        carrying out such programs, services, and policies;
            (7) an assurance that the eligible entity will share 
        information with the Learning and Earning Research Center 
        established under section 505(b), once such Center is 
        established;
            (8) an assurance that the eligible entity will participate 
        in the evaluation of such programs, services, and policies 
        under subsection (i); and
            (9) the potential for such programs, services, and policies 
        to be replicated at other institutions of higher education.
    (f) Uses of Funds.--An eligible entity receiving a grant under this 
section shall use the grant funds to carry out the programs described 
in subsection (a)(1)(B), which shall include at least 2 of the 
following activities:
            (1) Developing and implementing policies and programs to 
        expand opportunities for students at eligible entities 
        described in subparagraphs (A) through (D) of section 502(a)(3) 
        to earn bachelor's degrees by--
                    (A) facilitating the transfer of academic credits 
                between institutions of higher education, including the 
                transfer of academic credits for courses in the same 
                field of study; and
                    (B) expanding articulation agreements and 
                guaranteed transfer agreements between such 
                institutions, including through common course numbering 
                and general core curriculum.
            (2) Expanding, enhancing, or creating academic programs or 
        training programs, which shall be carried out with industry or 
        sector partnerships or in partnership with employers and may 
        include other relevant partners, that provide relevant job-
        skill training (including apprenticeships and worksite learning 
        and training opportunities) for skilled occupations in high-
        demand industries.
            (3) Providing student support services, including--
                    (A) intensive career and academic advising;
                    (B) labor market information and job counseling; 
                and
                    (C) transitional job support, supportive services, 
                or assistance in connecting students with community 
                resources.
            (4) Creating workforce programs that provide a sequence of 
        education and occupational training that leads to industry-
        recognized credentials, including programs that--
                    (A) blend basic skills and occupational training 
                that lead to industry-recognized credentials;
                    (B) integrate developmental education curricula and 
                instruction with for-credit coursework toward degree or 
                certificate pathways; or
                    (C) advance individuals on a career path toward 
                high-wage occupations in high-demand industries.
            (5) Building or enhancing linkages, including the 
        development of dual enrollment programs and early college high 
        schools, between--
                    (A) secondary education or adult education programs 
                (including programs established under the Carl D. 
                Perkins Career and Technical Education Act of 2006 and 
                title II of the Workforce Investment Act of 1998 (29 
                U.S.C. 9201 et seq.)); and
                    (B) eligible entities described in subparagraphs 
                (A) through (D) of section 502(a)(3).
            (6) Implementing other innovative programs, services, and 
        policies designed to--
                    (A) increase postsecondary degree, certificate, and 
                industry-recognized credential completion rates, 
                particularly with respect to groups underrepresented in 
                higher education, at eligible entities described in 
                subparagraphs (A) through (D) of section 502(a)(3); and
                    (B) increase the provision of training for students 
                to enter skilled occupations in high-demand industries.
            (7) Improving the timeliness of the process for creating 
        degree, certificate, and industry-recognized credential 
        programs at eligible entities described in subparagraphs (A) 
        through (D) of section 502(a)(3) that--
                    (A) reflect and respond to regional labor market 
                developments and trends;
                    (B) effectively address the workforce needs of 
                employers in the State; and
                    (C) are designed in consultation with such 
                employers.
    (g) Benchmarks.--
            (1) In general.--Each eligible entity receiving a grant 
        under this section shall develop quantifiable benchmarks on the 
        following indicators (where applicable), to be approved by the 
        Secretary:
                    (A) Closing gaps in enrollment and completion rates 
                for--
                            (i) groups underrepresented in higher 
                        education; and
                            (ii) groups of students enrolled at the 
                        eligible entity (or at an institution of higher 
                        education under the jurisdiction of the 
                        eligible entity, in the case of an entity that 
                        is not an institution) who have the lowest 
                        enrollment and completion rates.
                    (B) Addressing local and regional workforce needs.
                    (C) Establishing articulation agreements between 
                two-year and four-year public institutions of higher 
                education within a State.
                    (D) Improving comprehensive employment and 
                educational outcomes for postsecondary education and 
                training programs, including--
                            (i) student persistence from one academic 
                        year to the following academic year;
                            (ii) the number of credits students earn 
                        toward a certificate or an associate's degree;
                            (iii) the number of students in 
                        developmental education courses who 
                        subsequently enroll in credit bearing 
                        coursework;
                            (iv) transfer of general education credits 
                        between institutions of higher education, as 
                        applicable;
                            (v) completion of industry-recognized 
                        credentials or associate's degrees to work in 
                        skilled occupations in high-demand industries;
                            (vi) transfers to four-year institutions of 
                        higher education; and
                            (vii) job placement related to skills 
                        training or associate's degree completion.
            (2) Report.--The eligible entity receiving such a grant 
        shall annually measure and report to the Secretary the progress 
        of the entity in achieving the benchmarks developed pursuant to 
        paragraph (1).
    (h) Provision of Transfer of Credit Information in Community 
College Course Schedules.--To the maximum extent practicable, each 
community college receiving a grant under this section shall include in 
each electronic and printed publication of the college's course 
schedule, in a manner of the college's choosing, for each course listed 
in the college's course schedule, whether such course is transferable 
for credit toward the completion of a 4-year baccalaureate degree at a 
public institution of higher education in the State in which the 
college is located.
    (i) Evaluation.--The Secretary shall allocate not more than two 
percent of the funds appropriated under section 501(b)(1) to the 
Institute of Education Sciences to conduct evaluations, ending not 
later than January 30, 2014, that--
            (1) assess the effectiveness of the grant programs carried 
        out by each eligible entity receiving such a grant in--
                    (A) improving postsecondary education completion 
                rates (disaggregated by age, race, ethnicity, sex, 
                income, and disability);
                    (B) improving employment-related outcomes for 
                students served by such programs;
                    (C) serving high-need populations; and
                    (D) building or enhancing working partnerships with 
                the State public employment service or State or local 
                workforce investment boards; and
            (2) include any other information or assessments the 
        Secretary may require.
    (j) Report.--The Secretary shall submit to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Education and Labor of the House of Representatives an annual report on 
grants awarded under this section, including--
            (1) the amount awarded to each eligible entity under this 
        section;
            (2) a description of the activities conducted by each 
        eligible entity receiving a grant under this section; and
            (3) a summary of the results of the evaluations submitted 
        to the Secretary under subsection (i) and the progress each 
        eligible entity made toward achieving the benchmarks developed 
        under subsection (g).

SEC. 504. GRANTS TO ELIGIBLE STATES FOR COMMUNITY COLLEGE PROGRAMS.

    (a) Program Authorization.--From the amount appropriated to carry 
out this section, the Secretary, in coordination with the Secretary of 
Labor, shall award grants to eligible States, on a competitive basis, 
to implement the systematic reform of community colleges located in the 
State by carrying out programs, services, and policies that 
demonstrated effectiveness under the evaluation described in section 
503(i).
    (b) Eligible State.--In this section, the term ``eligible State'' 
means a State that demonstrates to the Secretary in the application 
submitted pursuant to subsection (e) that the State--
            (1) has a plan under section 782 of the Higher Education 
        Act of 1965 to increase the State's rate of persistence in and 
        completion of postsecondary education that takes into 
        consideration and involves community colleges located in such 
        State;
            (2) has a statewide longitudinal data system that includes 
        data with respect to community colleges;
            (3) has an articulation agreement pursuant to section 486A 
        of the Higher Education Act of 1965 (20 U.S.C. 1093a);
            (4) is in compliance with section 137 of such Act (20 
        U.S.C. 1015f); and
            (5) meets any other requirements the Secretary may require.
    (c) Grant Duration; Renewal.--A grant awarded under this section 
shall be awarded to an eligible State for a 6-year period, except that 
if the Secretary determines that the eligible State has not made 
demonstrable progress in achieving the benchmarks developed pursuant to 
subsection (g) by the end of the third year of the grant period, no 
further grant funds shall be made available to the entity after the 
date of such determination.
    (d) Federal and Non-Federal Share; Supplement, Not Supplant.--
            (1) Federal share.--The amount of the Federal share under 
        this section for a fiscal year shall be not greater than \1/2\ 
        of the costs of the reform described in subsection (f) that is 
        carried out with the grant.
            (2) Non-federal share.--
                    (A) In general.--The amount of the Non-Federal 
                share under this section for a fiscal year shall be not 
                less than \1/2\ of the costs of the reform described in 
                subsection (f) that is carried out with the grant. The 
                non-Federal share may be in cash or in kind, and may be 
                provided from State resources, local resources, 
                contributions from private organizations, or a 
                combination thereof.
                    (B) Financial hardship waiver.--The Secretary may 
                waive or reduce the non-Federal share of an eligible 
                State that has submitted an application under this 
                section if the State demonstrates a need for such 
                waiver or reduction due to extreme financial hardship, 
                as defined by the Secretary by regulation.
            (3) Supplement, not supplant.--The Federal and non-Federal 
        share required by this section shall be used to supplement, and 
        not supplant, State and private resources that would otherwise 
        be expended to carry out the systematic reform of community 
        colleges in a State.
    (e) Application.--An eligible State desiring to receive a grant 
under this section shall submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary 
may require. Such application shall describe the programs, service, and 
policies to be used by the State to achieve the systematic reform 
described in subsection (f), including--
            (1) the goals of such programs, services, and policies;
            (2) how the State will allocate grant funds to carry out 
        such programs, services, and policies, including identifying 
        any State or private entity that will administer such programs, 
        services, and policies;
            (3) how such programs, services, and policies will enable 
        the State to--
                    (A) meet the benchmarks developed pursuant to 
                subsection (g), and how the State will track and report 
                the State's progress in reaching such benchmarks; and
                    (B) benefit students attending all community 
                colleges within the State;
            (4) how the State will use such programs, services, and 
        policies to establish quantifiable targets for improving 
        graduation rates and employment-related outcomes;
            (5) how the State will serve high-need populations through 
        such programs, services, and policies;
            (6) how the State will partner with the State public 
        employment service and State or local workforce investment 
        boards in carrying out such programs, services, and policies;
            (7) how the State will evaluate such programs, services, 
        and policies, which may include participation in national 
        evaluations; and
            (8) how the State will involve community colleges and 
        community college faculty in the planning, implementation, and 
        evaluation of such programs, services, and policies.
    (f) Uses of Funds.--An eligible State receiving a grant under this 
section shall use the grant funds to implement the systematic reform of 
community colleges located in the State by carrying out programs, 
services, and policies that the Secretary has determined to have 
demonstrated effectiveness based on the results of the evaluation 
described in section 503(i). States shall allocate not less than 90 
percent of such grant funds to community colleges within the State.
    (g) Benchmarks.--
            (1) In general.--Each eligible State receiving a grant 
        under this section shall, in consultation with the Secretary, 
        develop quantifiable benchmarks on the indicators identified in 
        section 503(f)(1).
            (2) Progress.--An eligible State receiving such a grant 
        shall annually measure and report to the Secretary progress in 
        achieving the benchmarks developed pursuant to paragraph (1).
    (h) Report.--
            (1) Reports to the secretary.--Each eligible State 
        receiving a grant under this section shall annually submit to 
        the Secretary and the Secretary of Labor a report on such 
        grant, including--
                    (A) a description of the systematic reform carried 
                out by the State using such grant; and
                    (B) the outcome of such reform, including the 
                State's progress in achieving the benchmarks developed 
                under subsection (g).
            (2) Reports to congress.--Not later than 6 months after the 
        end of the grant period, the Secretary shall submit to the 
        Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Education and Labor of the House of 
        Representatives a summary of the reports submitted under 
        paragraph (1) with respect to such grant period.
    (i) Sense of Congress.--It is the sense of Congress that--
            (1) community colleges play an important role in preparing 
        and training students seeking to enter the workforce;
            (2) it is vital that all States have access to the 
        resources and assistance needed to compete for grants 
        authorized under this section; and
            (3) in executing the grant program authorized under this 
        section, the Secretary will make available any and all 
        assistance, guidance, and support to States seeking to compete 
        for grants authorized under this section and will work to 
        ensure that such grants are distributed in a fair and equitable 
        manner.

SEC. 505. NATIONAL ACTIVITIES.

    (a) Open Online Education.--From the amount appropriated to carry 
out this section, the Secretary is authorized to make competitive 
grants to, or enter into contracts with, institutions of higher 
education, philanthropic organizations, and other appropriate entities 
to develop, evaluate, and disseminate freely-available high-quality 
online training, high school courses, and postsecondary education 
courses. Entities receiving funds under this subsection shall ensure 
that electronic and information technology activities meet the access 
standards established under section 508 of the Rehabilitation Act of 
1973 (29 U.S.C. 794d).
    (b) Learning and Earning Research Center.--
            (1) In general.--From the amount appropriated to carry out 
        this section, the Director of the Institute of Education 
        Sciences is authorized to award a grant to, or enter into a 
        contract with, an organization with demonstrated expertise in 
        the research and evaluation of community colleges to establish 
        and operate the Learning and Earning Research Center (in this 
        section referred to as the ``Center'').
            (2) Grant term.--The grant or contract awarded under this 
        section shall be awarded for a period of not more than 4 years.
            (3) Board.--The Center shall have an independent advisory 
        board of 9 individuals who--
                    (A) are appointed by the Secretary, based on 
                recommendations from the organization receiving the 
                grant or contract under this section; and
                    (B) who have demonstrated expertise in--
                            (i) data collection;
                            (ii) data analysis; and
                            (iii) econometrics, postsecondary 
                        education, and workforce development research.
            (4) Center activities.--The Center shall--
                    (A) develop--
                            (i) peer-reviewed metrics to help consumers 
                        make sound education and training choices, and 
                        to help students, workers, schools, businesses, 
                        researchers, and policymakers assess the 
                        effectiveness of community colleges, and 
                        courses of study at such colleges, in meeting 
                        education and employment objectives and serving 
                        groups that are underrepresented in 
                        postsecondary education;
                            (ii) common metrics and data elements to 
                        measure the education and employment outcomes 
                        of students attending community colleges;
                    (B) coordinate with the Institute of Education 
                Sciences and States receiving a grant under subsection 
                (c) to develop--
                            (i) standardized data elements, 
                        definitions, and data-sharing protocols to make 
                        it possible for data systems related to 
                        postsecondary education to be linked and 
                        interoperable, and for best practices to be 
                        shared among States;
                            (ii) standards and processes for 
                        facilitating sharing of data in a manner that 
                        safeguards student privacy; and
                    (C) develop and make widely available materials 
                analyzing best practices and research on successful 
                postsecondary education and training efforts;
                    (D) make the data and metrics developed pursuant to 
                subparagraph (A) available to the public in a 
                transparent, user-friendly format that is accessible to 
                individuals with disabilities; and
                    (E) consult with representatives from States with 
                respect to the activities of the Center.
    (c) State Systems.--
            (1) In general.--From the amount appropriated to carry out 
        this section, the Secretary is authorized to award grants to 
        States or consortia of States to establish cooperative 
        agreements to develop, implement, and expand interoperable 
        statewide longitudinal data systems that--
                    (A) collect, maintain, disaggregate (by 
                institution, income, race, ethnicity, sex, disability, 
                and age), and analyze student data from community 
                colleges, including data on the programs of study and 
                education and employment outcomes for particular 
                students, tracked over time; and
                    (B) can be linked to other data systems, as 
                applicable, including elementary and secondary 
                education and workforce data systems.
            (2) Supplement, not supplant.--Funds appropriated to carry 
        out this subsection shall be used to supplement, and not 
        supplant, other Federal and State resources that would 
        otherwise be expended to carry out statewide longitudinal data 
        systems, including funding appropriated for State Longitudinal 
        Data Systems in the American Recovery and Reinvestment Act of 
        2009 (Public Law 111-5; 123 Stat. 115).
            (3) Privacy and access to data.--
                    (A) In general.--Each State or consortia that 
                receives a grant under this subsection or any other 
                provision of this division shall implement measures 
                to--
                            (i) ensure that the statewide longitudinal 
                        data system under this subsection and any other 
                        data system the State or consortia is operating 
                        for the purposes of this division meet the 
                        requirements of section 444 of the General 
                        Education Provisions Act (20 U.S.C. 1232g) 
                        (commonly known as the ``Family Educational 
                        Rights and Privacy Act of 1974'');
                            (ii) limit the use of information in any 
                        such data system by governmental agencies in 
                        the State, including State agencies, State 
                        educational authorities, local educational 
                        agencies, community colleges, and institutions 
                        of higher education, to education and workforce 
                        related activities under this division or 
                        education and workforce related activities 
                        otherwise permitted by Federal or State law;
                            (iii) prohibit the disclosure of personally 
                        identifiable information except as permitted 
                        under section 444 of the General Education 
                        Provisions Act and any additional limitations 
                        set forth in State law;
                            (iv) keep an accurate accounting of the 
                        date, nature, and purpose of each disclosure of 
                        personally identifiable information in any such 
                        data system, a description of the information 
                        disclosed, and the name and address of the 
                        person, agency, institution, or entity to whom 
                        the disclosure is made, which accounting shall 
                        be made available on request to parents of any 
                        student whose information has been disclosed;
                            (v) notwithstanding section 444 of the 
                        General Education Provisions Act, require any 
                        non-governmental party obtaining personally 
                        identifiable information to sign a data use 
                        agreement prior to disclosure that--
                                    (I) prohibits the party from 
                                further disclosing the information;
                                    (II) prohibits the party from using 
                                the information for any purpose other 
                                than the purpose specified in the 
                                agreement; and
                                    (III) requires the party to destroy 
                                the information when the purpose for 
                                which the disclosure was made is 
                                accomplished;
                            (vi) maintain adequate security measures to 
                        ensure the confidentiality and integrity of any 
                        such data system, such as protecting a student 
                        record from identification by a unique 
                        identifier;
                            (vii) where rights are provided to parents 
                        under this clause, provide those rights to the 
                        student instead of the parent if the student 
                        has reached the age of 18 or is enrolled in a 
                        postsecondary educational institution; and
                            (viii) ensure adequate enforcement of the 
                        requirements of this paragraph.
                    (B) Use of unique identifiers.--It shall be 
                unlawful for any Federal, State, or local governmental 
                agency to--
                            (i) use the unique identifiers employed in 
                        such data systems for any purpose other than as 
                        authorized by Federal or State law; or
                            (ii) deny any individual any right, 
                        benefit, or privilege provided by law because 
                        of such individual's refusal to disclose the 
                        individual's unique identifier.
    (d) Report.--The Secretary shall submit to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Education and Labor of the House of Representatives an annual report on 
the amounts awarded to entities receiving grants or contracts under 
this section, and the activities carried out by such entities under 
such grants and contracts.
                                                 Union Calendar No. 256

111th CONGRESS

  2d Session

                               H. R. 4872

_______________________________________________________________________

                                 A BILL

To provide for reconciliation pursuant to section 202 of the concurrent 
             resolution on the budget for fiscal year 2010.

_______________________________________________________________________

                             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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