II 

111TH CONGRESS 

1ST SESSION S. 1099 

To provide comprehensive solutions for the health care system of the United 

States, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2009 

Mr. COBURN (for himself, Mr. BURR, Mr. BUNNING, Mr. CHAMBLISS, Mr. ALEXANDER, and Mr. INHOFE) introduced the following bill; which was read 

twice and referred to the Committee on Finance 

A BILL 

To provide comprehensive solutions for the health care 

system of the United States, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Patients’ Choice Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—INVESTING IN PREVENTION 

Sec. 101. Strategic approach to outcome-based prevention. 

Sec. 102. State grants for outcome-based prevention effort. 


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Sec. 103. Focusing the food stamp program on nutrition. 

Sec. 104. Immunizations. 

TITLE II—STATE-BASED HEALTH CARE EXCHANGES 

Sec. 201. State-based health care exchanges. 

Sec. 202. Requirements. 

Sec. 203. State Exchange incentives. 

TITLE III—FAIR TAX TREATMENT FOR ALL AMERICANS TO 

AFFORD HEALTH CARE 

Sec. 300. Reference. 

Subtitle A—Refundable and Advanceable Credit for Certain Health Insurance 

Coverage 

Sec. 301. Refundable and advanceable credit for certain health insurance coverage. 

Sec. 302. Requiring employer transparency about employee benefits. 

Sec. 303. Changes to existing tax preferences for medical coverage, etc., for individuals eligible for qualified health insurance credit. 

Subtitle B—Health Savings Accounts 

Sec. 311. Improvements to health savings accounts. 

Sec. 312. Exception to requirement for employers to make comparable health 

savings account contributions. 

TITLE IV—FAIRNESS FOR EVERY AMERICAN PATIENT 

Subtitle A—Medicaid Modernization 

Sec. 401. Medicaid modernization. 

Sec. 402. Outreach. 

Sec. 403. Transition rules; miscellaneous provisions. 

Subtitle B—Supplemental Health Care Assistance for Low-Income Families 

Sec. 411. Supplemental Health Care Assistance for Low-Income Families. 

TITLE V—FIXING MEDICARE FOR AMERICAN SENIORS 

Subtitle A—Increasing Programmatic Efficiency, Economy, and Accountability 

Sec. 501. Eliminating inefficiencies and increasing choice in Medicare Advantage. 

Sec. 502. Medicare Accountable Care Organization demonstration program. 

Sec. 503. Reducing government handouts to wealthier seniors. 

Sec. 504. Rewarding prevention. 

Sec. 505. Promoting healthcare provider transparency. 

Sec. 506. Availability of Medicare and Medicaid claims and patient encounter 

data. 

Subtitle B—Reducing Fraud and Abuse 

Sec. 511. Requiring the Secretary of Health and Human Services to change the 

Medicare beneficiary identifier used to identify Medicare beneficiaries under the Medicare program. 


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Sec. 512. Use of technology for real-time data review. 

Sec. 513. Detection of medicare fraud and abuse. 

Sec. 514. Edits on 855S Medicare enrollment application and exemption of 

pharmacists from surety bond requirement. 

Sec. 515. GAO study and report on effectiveness of surety bond requirements 

for suppliers of durable medical equipment in combating fraud. 

TITLE VI—ENDING LAWSUIT ABUSE 

Sec. 601. State grants to create health court solutions. 

TITLE VII—PROMOTING HEALTH INFORMATION TECHNOLOGY 

Subtitle A—Assisting the Development of Health Information Technology 

Sec. 701. Purpose. 

Sec. 702. Health record banking. 

Sec. 703. Application of Federal and State security and confidentiality standards. 

Subtitle B—Removing Barriers to the Use of Health Information Technology 

to Better Coordinate Health Care 

Sec. 711. Safe harbors to antikickback civil penalties and criminal penalties for 

provision of health information technology and training services. 

Sec. 712. Exception to limitation on certain physician referrals (under Stark) 

for provision of health information technology and training 

services to health care professionals. 

Sec. 713. Rules of construction regarding use of consortia. 

TITLE VIII—HEALTH CARE SERVICES COMMISSION 

Subtitle A—Establishment and General Duties 

Sec. 801. Establishment. 

Sec. 802. General authorities and duties. 

Sec. 803. Dissemination. 

Subtitle B—Forum for Quality and Effectiveness in Health Care 

Sec. 811. Establishment of office. 

Sec. 812. Membership. 

Sec. 813. Duties. 

Sec. 814. Adoption and enforcement of guidelines and standards. 

Sec. 815. Additional requirements. 

Subtitle C—General Provisions 

Sec. 821. Certain administrative authorities. 

Sec. 822. Funding. 

Sec. 823. Definitions. 

Subtitle D—Terminations and Transition 

Sec. 831. Termination of Agency for Healthcare Research and Quality. 

Sec. 832. Transition. 

Subtitle E—Independent Health Record Trust 


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Sec. 841. Short title. 

Sec. 842. Purpose. 

Sec. 843. Definitions. 

Sec. 844. Establishment, certification, and membership of Independent Health 

Record Trusts. 

Sec. 845. Duties of IHRT to IHRT participants. 

Sec. 846. Availability and use of information from records in IHRT consistent 

with privacy protections and agreements. 

Sec. 847. Voluntary nature of trust participation and information sharing. 

Sec. 848. Financing of activities. 

Sec. 849. Regulatory oversight. 

TITLE IX—MISCELLANEOUS 

Sec. 901. Health care choice for veterans. 

Sec. 902. Health care choice for Indians. 

Sec. 903. Termination of Federal Coordinating Council for Comparative Effectiveness Research. 

Sec. 904. HHS and GAO joint study and report on costs of the 5 medical conditions that have the greatest impact. 

1 TITLE I—INVESTING IN 

2 PREVENTION 

3 SEC. 101. STRATEGIC APPROACH TO OUTCOME-BASED PRE4 VENTION. 

5 (a) INTERAGENCY COORDINATING COMMITTEE.— 

6 (1) IN GENERAL.—The Secretary of Health and 

7 Human Services (referred to in this title as the 

8 ‘‘Secretary’’) shall convene an interagency coordi9 nating committee to develop a national strategic 

10 plan for prevention. The Secretary shall serve as the 

11 chairperson of the committee. 

12 (2) COMPOSITION.—In carrying out paragraph 

13 (1), the Secretary shall include the participation 

14 of— 

15 (A) the Director of the National Institutes 

16 of Health; 


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1 (B) the Director of the Centers for Disease 

2 Control and Prevention; 

3 (C) the Administrator of the Agency for 

4 Healthcare Research and Quality; 

5 (D) the Administrator of the Substance 

6 Abuse and Mental Health Services Administra7 tion; 

8 (E) the Administrator of the Health Re9 sources and Services Administration; 

10 (F) the Secretary of Agriculture; 

11 (G) the Director of the Centers for Medi12 care & Medicaid Services; 

13 (H) the Administrator of the Environ14 mental Protection Agency; 

15 (I) the Director of the Indian Health Serv16 ice; 

17 (J) the Administrator of the Administra18 tion on Aging; 

19 (K) the Secretary of Veterans Affairs; 

20 (L) the Secretary of Defense; 

21 (M) the Secretary of Education; and 

22 (N) the Secretary of Labor. 

23 (3) REPORT AND PLAN.—Not later than 1 year 

24 after the date of enactment of this Act, the Sec25 retary, acting through the coordinating committee 


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1 convened under paragraph (1), shall submit to Con2 gress a report concerning the recommendation of the 

3 committee for health promotion and disease preven4 tion activities. Such report shall include a specific 

5 strategic plan that shall include— 

6 (A) a list of national priorities on health 

7 promotion and disease prevention to address 

8 lifestyle behavior modification (smoking ces9 sation, proper nutrition, and appropriate exer10 cise) and the prevention measures for the 5 

11 leading disease killers in the United States; 

12 (B) specific science-based initiatives to 

13 achieve the measurable goals of Healthy People 

14 2010 regarding nutrition, exercise, and smoking 

15 cessation, and targeting the 5 leading disease 

16 killers in the United States; 

17 (C) specific plans for consolidating Federal 

18 health programs and Centers that exist to pro19 mote healthy behavior and reduce disease risk 

20 (including eliminating programs and offices de21 termined to be ineffective in meeting the pri22 ority goals of Healthy People 2010), that in23 clude transferring the nutrition guideline devel24 opment responsibility from the Secretary of AgVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 riculture to the Director of the Centers for Dis2 ease Control and Prevention; 

3 (D) specific plans to ensure that all Fed4 eral health care programs are fully coordinated 

5 with science-based prevention recommendations 

6 promulgated by the Director of the Centers for 

7 Disease Control and Prevention; 

8 (E) specific plans to ensure that all non9 Department of Health and Human Services 

10 prevention programs are based on the science11 based guidelines developed by the Centers for 

12 Disease Control and Prevention under subpara13 graph (D); and 

14 (F) a list of new non-Federal and non-gov15 ernment partners identified by the committee to 

16 build Federal capacity in health promotion and 

17 disease prevention efforts. 

18 (4) ANNUAL REQUEST TO GIVE TESTIMONY.— 

19 The Secretary shall annually request an opportunity 

20 to testify before Congress concerning the progress 

21 made by the United States in meeting the outcome22 based standards of Healthy People 2010 with re23 spect to disease prevention and measurable outcomes 

24 and effectiveness of Federal programs related to this 

25 goal. 


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1 (5) PERIODIC REVIEWS.—The Secretary shall 

2 conduct periodic reviews, not less than every 5 years, 

3 and grading of every Federal disease prevention and 

4 health promotion initiatives, programs, and agencies. 

5 Such reviews shall be evaluated based on effective6 ness in meeting metrics-based goals with an analysis 

7 posted on such agencies’ public Internet websites. 

8 (b) FEDERAL MESSAGING ON HEALTH PROMOTION

9 AND DISEASE PREVENTION.— 

10 (1) MEDIA CAMPAIGNS.— 

11 (A) IN GENERAL.—Not later than 1 year 

12 after the date of enactment of this Act, the Sec13 retary, acting through the Director of the Cen14 ters for Disease Control and Prevention, shall 

15 establish and implement a national science16 based media campaign on health promotion and 

17 disease prevention. 

18 (B) REQUIREMENTS OF CAMPAIGN.—The 

19 campaign implemented under subparagraph 

20 (A)— 

21 (i) shall be designed to address proper 

22 nutrition, regular exercise, smoking ces23 sation, obesity reduction, the 5 leading dis24 ease killers in the United States, and secVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 ondary prevention through disease screen2 ing promotion; 

3 (ii) shall be carried out through com4 petitively bid contracts awarded to entities 

5 providing for the professional production 

6 and design of such campaign; 

7 (iii) may include the use of television, 

8 radio, Internet, and other commercial mar9 keting venues and may be targeted to spe10 cific age groups based on peer-reviewed so11 cial research; 

12 (iv) shall not be duplicative of any 

13 other Federal efforts relating to health 

14 promotion and disease prevention; and 

15 (v) may include the use of humor and 

16 nationally recognized positive role models. 

17 (C) EVALUATION.—The Secretary shall en18 sure that the campaign implemented under sub19 paragraph (A) is subject to an independent 

20 evaluation every 2 years and shall report every 

21 2 years to Congress on the effectiveness of such 

22 campaigns towards meeting science-based 

23 metrics. 

24 (2) WEBSITE.—The Secretary, in consultation 

25 with private-sector experts, shall maintain or enter 


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1 into a contract to maintain an Internet website to 

2 provide science-based information on guidelines for 

3 nutrition, regular exercise, obesity reduction, smok4 ing cessation, and specific chronic disease preven5 tion. Such website shall be designed to provide infor6 mation to health care providers and consumers. 

7 (3) DISSEMINATION OF INFORMATION

8 THROUGH PROVIDERS.—The Secretary, acting 

9 through the Centers for Disease Control and Preven10 tion, shall develop and implement a plan for the dis11 semination of health promotion and disease preven12 tion information consistent with national priorities 

13 described in the strategic and implementing plan 

14 under subsection (a)(3)(A), to health care providers 

15 who participate in Federal programs, including pro16 grams administered by the Indian Health Service, 

17 the Department of Veterans Affairs, the Department 

18 of Defense, and the Health Resources and Services 

19 Administration, and the Medicare and Medicaid Pro20 grams. 

21 (4) PERSONALIZED PREVENTION PLANS.— 

22 (A) CONTRACT.—The Secretary, acting 

23 through the Director of the Centers for Disease 

24 Control and Prevention, shall enter into a con25 tract with a qualified entity for the development 


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1 and operation of a Federal Internet website 

2 personalized prevention plan tool. 

3 (B) USE.—The website developed under 

4 subparagraph (A) shall be designed to be used 

5 as a source of the most up-to-date scientific evi6 dence relating to disease prevention for use by 

7 individuals. Such website shall contain a compo8 nent that enables an individual to determine 

9 their disease risk (based on personal health and 

10 family history, BMI, and other relevant infor11 mation) relating to the 5 leading diseases in the 

12 United States, and obtain personalized sugges13 tions for preventing such diseases. 

14 (5) INTERNET PORTAL.—The Secretary shall 

15 establish an Internet portal for accessing risk-assess16 ment tools developed and maintained by private and 

17 academic entities. 

18 (6) PRIORITY FUNDING.—Funding for the ac19 tivities authorized under this section shall take pri20 ority over funding from the Centers for Disease Con21 trol and Prevention provided for grants to States 

22 and other entities for similar purposes and goals as 

23 provided for in this section. Not to exceed 

24 $500,000,000 shall be expended on the campaigns 

25 and activities required under this Act. 


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1 SEC. 102. STATE GRANTS FOR OUTCOME-BASED PREVEN2 TION EFFORT. 

3 (a) IN GENERAL.—If the Secretary determines that 

4 it is essential to meeting the national priorities described 

5 in the plan required under section 101(a)(3)(A), the Sec6 retary may award grants to States for the conduct of spe7 cific health promotion and disease prevention activities. 

8 (b) ELIGIBILITY.—To be eligible to receive a grant 

9 under subsection (a), a State shall submit to the Secretary 

10 an application at such time, in such manner, and con11 taining such information as the Secretary may require, in12 cluding a strategic plan that shall— 

13 (1) describe the specific health promotion and 

14 disease prevention activities to be carried out under 

15 this grant; 

16 (2) include a list of the barriers that exist with17 in the State to meeting specific goals of Healthy 

18 People 2010; 

19 (3) include targeted demographic indicators and 

20 measurable objectives with respect to health pro21 motion and disease prevention; 

22 (4) contain a set of process outcomes and mile23 stones, based on the process outcomes and mile24 stones developed by the Secretary, for measuring the 

25 effectiveness of activities carried out under the grant 

26 in the State; and 


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1 (5) outline the manner in which interventions to 

2 be carried out under this grant will reduce morbidity 

3 and mortality within the State over a 5-year period 

4 (or over a 10-year period, if the Secretary deter5 mines such period appropriate for adequately meas6 uring progress). 

7 (c) PROCESS OUTCOMES AND MILESTONES.— 

8 (1) IN GENERAL.—The Secretary shall develop 

9 process outcomes and milestones to be used to meas10 ure the effectiveness of activities carried out under 

11 a grant under this section by a State. 

12 (2) DETERMINATIONS.—If, beginning 2 years 

13 after the date on which a grant is awarded to a 

14 State under this section, the Secretary determines 

15 that the State is failing to make adequate progress 

16 in meeting the outcomes and milestones contained in 

17 the State plan under subsection (b)(4), the Secretary 

18 shall provide the State with technical assistance on 

19 how to make such progress. Such technical assist20 ance shall continue for a period of 2 years. 

21 (3) CONTINUED FAILURE TO MEET OBJEC22 TIVES.—If after the expiration of the 2-year period 

23 described in paragraph (2), the Secretary determines 

24 that the State is failing to make adequate progress 

25 in meeting the outcomes and milestones contained in 


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1 the State plan under subsection (b)(4) over a 5-year 

2 period, the Secretary shall terminate all funding to 

3 the State under a grant under this section. 

4 (d) REGIONAL ACTIVITIES.—A State may use an 

5 amount, not to exceed 15 percent of the total grant 

6 amount to such State, to carry out regional activities in 

7 conjunction with other States. 

8 (e) TARGETED ACTIVITIES.—A State may use grant 

9 funds to target specific populations within the State to 

10 achieve specific outcomes described in Healthy People 

11 2010. 

12 (f) INNOVATIVE INCENTIVE STRUCTURES.—The Sec13 retary may award grants to States for the purposes of de14 veloping innovative incentive structures to encourage indi15 viduals to adopt specific prevention behaviors such as re16 ducing their body mass index or for smoking cessation. 

17 (g) WELLNESS BONUSES.— 

18 (1) IN GENERAL.—The Secretary shall award 

19 wellness bonus payments to at least 5, but not more 

20 than 10, States that demonstrate the greatest 

21 progress in reducing disease rates and risk factors 

22 and increasing heathy behaviors. 

23 (2) REQUIREMENT.—To be eligible to receive a 

24 bonus payment under paragraph (1), a State shall 

25 demonstrate— 


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1 (A) the progress described in paragraph 

2 (1); and 

3 (B) that the State has met a specific floor 

4 for progress outlined in the science-based 

5 metrics of Healthy People 2010. 

6 (3) USE OF PAYMENTS.—Bonus payments 

7 under this subsection may only be used by a State 

8 for the purposes of health promotion and disease 

9 prevention. 

10 (4) FUNDING.—Out of funds appropriated to 

11 the Director of the Centers for Disease Control and 

12 Prevention for each fiscal year beginning with fiscal 

13 year 2010, the Director shall give priority to using 

14 $50,000,000 of such funds to make bonus payments 

15 under this subsection. 

16 (h) ADMINISTRATIVE EXPENSES.—A State may use 

17 not more than 5 percent of the amount of a grant under 

18 this section to carry out administrative activities. 

19 (i) STATE.—In this section, the term ‘‘State’’ means 

20 the 50 States, the District of Columbia, the Common21 wealth of Puerto Rico, Guam, Samoa, the United States 

22 Virgin Islands, and the Commonwealth of the Northern 

23 Mariana Islands. 

24 (j) AUTHORIZATION OF APPROPRIATIONS.—Funding 

25 for the activities authorized under this section shall take 


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1 priority over funding from the Centers for Disease Control 

2 and Prevention provided for grants to States and other 

3 entities for similar purposes and goals as provided for in 

4 this section, not to exceed $300,000,000 for each fiscal 

5 year. 

6 SEC. 103. FOCUSING THE FOOD STAMP PROGRAM ON NU7 TRITION. 

8 (a) COUNSELING BROCHURE.—The Director of the 

9 Centers for Disease Control and Prevention shall develop, 

10 and the Secretary of Agriculture shall distribute to each 

11 individual and family enrolled in the Food Stamp Program 

12 under the Food Stamp Act of 1977 (7 U.S.C. 2011 et 

13 seq.), a science-based nutrition counseling brochure. 

14 (b) LIMITATIONS ON FOOD STAMP PURCHASES.— 

15 (1) IN GENERAL.—Not later than 6 months 

16 after the date of enactment of this Act, the Sec17 retary of Agriculture shall, based on scientific, peer18 reviewed recommendations provided by a Commis19 sion that includes public health, medical, and nutri20 tion experts and the Director of the Centers for Dis21 ease Control and Prevention, develop lists of foods 

22 that do not meet science-based standards for proper 

23 nutrition and that may not be purchased under the 

24 food stamp program. Such list shall be updated on 

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1 based recommendations are applied to the food 

2 stamp program. 

3 (2) AUTOMATED ENFORCEMENT.—The Sec4 retary of Agriculture shall, through regulations, en5 sure that the limitations on food purchases under 

6 paragraph (1) is enforced through the food stamp 

7 program’s automated system. 

8 (3) IMPLEMENTATION.—The Secretary of Agri9 culture shall promulgate the regulations described in 

10 paragraph (2) by the date that is not later than 1 

11 year after the date of enactment of this section. 

12 SEC. 104. IMMUNIZATIONS. 

13 (a) PURCHASE OF VACCINES.—Notwithstanding any 

14 other provision of law, a State may use amounts provided 

15 under section 317 of the Public Health Service Act (42 

16 U.S.C. 247b) for immunization programs to purchase vac17 cines for use in health care provider offices and schools. 

18 (b) TECHNICAL ASSISTANCE AND REDUCTION IN

19 FUNDING.—If a State does not achieve a benchmark of 

20 80 percent coverage within the State for Centers for Dis21 ease Control and Prevention-recommended vaccines, the 

22 Director of the Centers shall provide technical assistance 

23 to the State for a period of 2 years. If after the expiration 

24 of such 2-year period the State continues to fail to achieve 

25 such benchmark, the Secretary shall reduce funding proVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 vided under section 317 of the Public Health Service Act 

2 to such State by 5 percent. 

3 (c) BONUS GRANT.—A State achieving a benchmark 

4 of 90 percent or greater coverage within the State for Cen5 ters for Disease Control and Prevention-recommended 

6 vaccines shall be eligible for a bonus grant from amounts 

7 appropriated under subsection (d). 

8 (d) AUTHORIZATION OF APPROPRIATIONS.—Out of 

9 funds appropriated to the Director of the Centers for Dis10 ease Control and Prevention for each fiscal year beginning 

11 with fiscal year 2010, there shall be made available to 

12 carry out this section, $50,000,000 for each fiscal year. 

13 (e) FUNDING FOR SECTION 317.—Section 317(j)(1) 

14 of the Public Health Service Act (42 U.S.C. 247b(j)(1)) 

15 is amended by striking ‘‘2005’’ and inserting ‘‘2012’’. 

16 TITLE II—STATE-BASED HEALTH 

17 CARE EXCHANGES 

18 SEC. 201. STATE-BASED HEALTH CARE EXCHANGES. 

19 (a) IN GENERAL.—The Secretary of Health and 

20 Human Services (referred to in this title as the ‘‘Sec21 retary’’) shall establish a process for the review of applica22 tions submitted by States for the establishment and imple23 mentation of State-based health care Exchanges (referred 

24 to in this title as a ‘‘State Exchange’’) and for the certifi25 cation of such Exchanges. The Secretary shall certify a 


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1 State Exchange if the Secretary determines that such Ex2 change meets the requirements of this title. 

3 (b) CONTINUED CERTIFICATION.—The certification 

4 of a State Exchange under subsection (a) shall remain in 

5 effect until the Secretary determines that the Exchange 

6 has failed to meet any of the requirements under this title. 

7 SEC. 202. REQUIREMENTS. 

8 (a) GENERAL REQUIREMENTS FOR CERTIFI9 CATION.—An application for certification under section 

10 201(a) shall demonstrate compliance with the following: 

11 (1) PURPOSE.—The primary purpose of a State 

12 Exchange shall be the facilitation of the individual 

13 purchase of innovative private health insurance and 

14 the creation of a market where private health plans 

15 compete for enrollees based on price and quality. 

16 (2) ADMINISTRATION.—A State shall ensure 

17 the operation of the State Exchange through direct 

18 contracts with the health insurance plans that are 

19 participating in the State Exchange or through a 

20 contract with a third party administrator for the op21 eration of the Exchange. 

22 (3) PLAN PARTICIPATION.—A State shall not 

23 restrict or otherwise limit the ability of a health in24 surance plan to participate in, and offer health in25 surance coverage through, the State Exchange, so 


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1 long as the health insurance issuers involved are 

2 duly licensed under State insurance laws applicable 

3 to all health insurance issuers in the State and oth4 erwise comply with the requirements of this title. 

5 (4) PREMIUMS.— 

6 (A) AMOUNT.—A State shall not determine 

7 premium or cost sharing amounts for health in8 surance coverage offered through the State Ex9 change. 

10 (B) COLLECTION METHOD.—A State shall 

11 ensure the existence of an effective and efficient 

12 method for the collection of premiums for 

13 health insurance coverage offered through the 

14 State Exchange. 

15 (b) BENEFIT PARITY WITH MEMBERS OF CON16 GRESS.—With respect to health insurance issuers offering 

17 health insurance coverage through the State Exchange, 

18 the State shall not impose any requirement that such 

19 issuers provide coverage that includes benefits different 

20 than requirements on plans offered to Members of Con21 gress under chapter 89 of title 5, United States Code. 

22 (c) FACILITATING UNIVERSAL COVERAGE FOR

23 AMERICANS.— 

24 (1) AUTOMATIC ENROLLMENT.—The State Ex25 change shall ensure that health insurance coverage 


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1 offered through the Exchange provides for the appli2 cation of uniform mechanisms that are designed to 

3 encourage and facilitate the enrollment of all eligible 

4 individuals in Exchange-based health insurance cov5 erage. Such mechanisms shall include automatic en6 rollment through various venues, which may include 

7 emergency rooms, the submission of State tax forms, 

8 places of employment in the State, and State depart9 ments of motor vehicles. 

10 (2) OTHER ENROLLMENT OPPORTUNITIES.— 

11 (A) IN GENERAL.—The State Exchange 

12 shall ensure that health insurance coverage of13 fered through the Exchange permits enrollment, 

14 and changes in enrollment, of individuals at the 

15 time such individuals become eligible individuals 

16 in the State. 

17 (B) ANNUAL OPEN ENROLLMENT PERI18 ODS.—The State Exchange shall ensure that 

19 health insurance coverage offered through the 

20 Exchange permits eligible individuals to annu21 ally change enrollment among the coverage of22 fered through the Exchange, subject to sub23 paragraph (A). 

24 (C) INCENTIVES FOR CONTINUOUS AN25 NUAL COVERAGE.—The State Exchange shall 


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1 include an incentive for eligible individuals to 

2 remain insured from plan year to plan year, 

3 and may include incentives such as State tax 

4 incentives or premium-based incentives. 

5 (3) GUARANTEED ACCESS FOR INDIVIDUALS.— 

6 The State Exchange shall ensure that, with respect 

7 to health insurance coverage offered through the Ex8 change, all eligible individuals are able to enroll in 

9 the coverage of their choice provided that such indi10 viduals agree to make applicable premium and cost 

11 sharing payments. 

12 (4) LIMITATION ON PRE-EXISTING CONDITION

13 EXCLUSIONS.—The State Exchange shall ensure 

14 that health insurance coverage offered through the 

15 Exchange meets the requirements of section 9801 of 

16 the Internal Revenue Code of 1986 in the same 

17 manner as if such coverage was a group health plan. 

18 (5) OPT-OUT.—Nothing in this title shall be 

19 construed to require that an individual be enrolled in 

20 health insurance coverage. 

21 (d) LIMITATION ON EXORBITANT PREMIUMS.— 

22 (1) ESTABLISHMENT OF MECHANISM.—With 

23 respect to health insurance coverage offered through 

24 the State Exchange, the Exchange shall establish a 

25 mechanisms to protect enrollees from the imposition 


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1 of excessive premiums, to reduce adverse selection, 

2 and to share risk. 

3 (2) MECHANISM OPTIONS.—The mechanisms 

4 referred to in paragraph (1) may include the fol5 lowing: 

6 (A) INDEPENDENT RISK ADJUSTMENT.— 

7 The implementation of risk-adjustment among 

8 health insurance coverage offered through the 

9 State Exchange through a contract entered into 

10 with a private, independent board. Such board 

11 shall include representation of health insurance 

12 issuers and State officials but shall be inde13 pendently controlled. The State Exchange shall 

14 ensure that risk-adjustment implemented under 

15 this subparagraph shall be based on a blend of 

16 patient diagnoses and estimated costs. 

17 (B) HEALTH SECURITY POOLS.—The es18 tablishment (or continued operation under sec19 tion 2745 of the Public Health Service Act) of 

20 a health security pool to guarantee high-risk in21 dividuals access to affordable, quality health 

22 care. 

23 (C) REINSURANCE.—The implementation 

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1 antee high-risk individuals access to affordable, 

2 quality health care. 

3 (e) MEDICAID AND SCHIP BENEFICIARIES.—The 

4 State Exchange shall include procedures to permit eligible 

5 individuals who are receiving (or who are eligible to re6 ceive) health care under title XIX or XXI of the Social 

7 Security Act to enroll in health insurance coverage offered 

8 through the Exchange. 

9 (f) DISSEMINATION OF COVERAGE INFORMATION.— 

10 The State Exchange shall ensure that each health insur11 ance issuer that provides health insurance coverage 

12 through the Exchange disseminate to eligible individuals 

13 and employers within the State information concerning 

14 health insurance coverage options, including the plans of15 fered and premiums and benefits for such plans. 

16 (g) REGIONAL OPTIONS.— 

17 (1) INTERSTATE COMPACTS.—Two or more 

18 States that establish a State Exchange may enter 

19 into interstate compacts providing for the regula20 tions of health insurance coverage offered within 

21 such States. 

22 (2) MODEL LEGISLATION.—States adopting 

23 model legislation as developed by the National Asso24 ciation of Insurance Commissioners shall be eligible 


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•S 1099 IS

1 to enter into an interstate compact as provided for 

2 in this section. 

3 (3) MULTI-STATE POOLING ARRANGEMENTS.— 

4 State Exchanges may implement a multi-state health 

5 care coverage pooling arrangement under this title. 

6 (h) ELIGIBLE INDIVIDUAL.—In this title, the term 

7 ‘‘eligible individual’’ means an individual who is— 

8 (1) a citizen or national of the United States or 

9 an alien lawfully admitted to the United States for 

10 permanent residence or otherwise residing in the 

11 United States under color of law; 

12 (2) a resident of the State involved; 

13 (3) not incarcerated; and 

14 (4) not eligible for coverage under parts A and 

15 B (or C) of the Medicare program under title XVIII 

16 of the Social Security Act. 

17 SEC. 203. STATE EXCHANGE INCENTIVES. 

18 (a) GRANTS.—The Secretary may award grants, pur19 suant to subsection (b), to States for the development, im20 plementation, and evaluation of certified State Exchanges 

21 and to provide more options and choice for individuals 

22 purchasing health insurance coverage. 

23 (b) ONE-TIME INCREASE IN MEDICAID PAYMENT.— 

24 In the case of a State awarded a grant to carry out this 

25 section, the total amount of the Federal payment deterVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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•S 1099 IS

1 mined for the State under section 1913 of the Social Secu2 rity Act (as amended by section 401) for fiscal year 2011 

3 shall be increased by an amount equal to 1 percent of the 

4 total amount of payments made to the State for fiscal year 

5 2010 under section 1903(a) of the Social Security Act (42 

6 U.S.C. 1396b(a)) for purposes of carrying out a grant 

7 awarded under this section. Amounts paid to a State pur8 suant to this subsection shall remain available until ex9 pended. 

10 TITLE III—FAIR TAX TREAT11 MENT FOR ALL AMERICANS 

12 TO AFFORD HEALTH CARE 

13 SEC. 300. REFERENCE. 

14 Except as otherwise expressly provided, whenever in 

15 this title an amendment or repeal is expressed in terms 

16 of an amendment to, or repeal of, a section or other provi17 sion, the reference shall be considered to be made to a 

18 section or other provision of the Internal Revenue Code 

19 of 1986. 


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•S 1099 IS

1 Subtitle A—Refundable and 

2 Advanceable Credit for Certain 

3 Health Insurance Coverage 

4 SEC. 301. REFUNDABLE AND ADVANCEABLE CREDIT FOR 

5 CERTAIN HEALTH INSURANCE COVERAGE. 

6 (a) ADVANCEABLE CREDIT.—Subpart A of part IV 

7 of subchapter A of chapter 1 (relating to nonrefundable 

8 personal credits) is amended by adding at the end the fol9 lowing new section: 

10 ‘‘SEC. 25E. QUALIFIED HEALTH INSURANCE CREDIT. 

11 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in12 dividual, there shall be allowed as a credit against the tax 

13 imposed by this chapter for the taxable year the sum of 

14 the monthly limitations determined under subsection (b) 

15 for the taxpayer and the taxpayer’s spouse and depend16 ents. 

17 ‘‘(b) MONTHLY LIMITATION.— 

18 ‘‘(1) IN GENERAL.—The monthly limitation for 

19 each month during the taxable year for an eligible 

individual is 1 20 ⁄12th of— 

21 ‘‘(A) the applicable adult amount, in the 

22 case that the eligible individual is the taxpayer 

23 or the taxpayer’s spouse, 


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•S 1099 IS

1 ‘‘(B) the applicable adult amount, in the 

2 case that the eligible individual is an adult de3 pendent, and 

4 ‘‘(C) the applicable child amount, in the 

5 case that the eligible individual is a child de6 pendent. 

7 ‘‘(2) LIMITATION ON AGGREGATE AMOUNT.— 

8 Notwithstanding paragraph (1), the aggregate 

9 monthly limitations for the taxpayer and the tax10 payer’s spouse and dependents for any month shall 

not exceed 1 11 ⁄12th of the applicable aggregate amount. 

12 ‘‘(3) NO CREDIT FOR INELIGIBLE MONTHS.— 

13 With respect to any individual, the monthly limita14 tion shall be zero for any month for which such indi15 vidual is not an eligible individual. 

16 ‘‘(4) APPLICABLE AMOUNT.— 

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

18 section— 

19 ‘‘(i) APPLICABLE ADULT AMOUNT.— 

20 The applicable adult amount is $2,290. 

21 ‘‘(ii) APPLICABLE CHILD AMOUNT.— 

22 The applicable child amount is $1,710. 

23 ‘‘(iii) APPLICABLE AGGREGATE

24 AMOUNT.—The applicable aggregate 

25 amount is $5,710. 


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•S 1099 IS

1 ‘‘(B) COST-OF-LIVING ADJUSTMENTS.— 

2 ‘‘(i) IN GENERAL.—In the case of any 

3 taxable year beginning in a calendar year 

4 after 2011, each dollar amount contained 

5 in subparagraph (A) shall be increased by 

6 an amount equal to such dollar amount 

7 multiplied by the blended cost-of-living ad8 justment. 

9 ‘‘(ii) BLENDED COST-OF-LIVING AD10 JUSTMENT.—For purposes of clause (i), 

11 the blended cost-of-living adjustment 

12 means one-half of the sum of— 

13 ‘‘(I) the cost-of-living adjustment 

14 determined under section 1(f)(3) for 

15 the calendar year in which the taxable 

16 year begins by substituting ‘calendar 

17 year 2010’ for ‘calendar year 1992’ in 

18 subparagraph (B) thereof, plus 

19 ‘‘(II) the cost-of-living adjust20 ment determined under section 

21 213(d)(10)(B)(ii) for the calendar 

22 year in which the taxable year begins 

23 by substituting ‘2010’ for ‘1996’ in 

24 subclause (II) thereof. 


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•S 1099 IS

1 ‘‘(iii) ROUNDING.—Any increase de2 termined under clause (i) shall be rounded 

3 to the nearest multiple of $10. 

4 ‘‘(C) REVENUE NEUTRALITY ADJUST5 MENTS.— 

6 ‘‘(i) IN GENERAL.—In the case of any 

7 taxable year beginning in a calendar year 

8 after 2011, each dollar amount contained 

9 in subparagraph (A), as adjusted under 

10 subparagraph (B), shall be further ad11 justed (if necessary) such that the aggre12 gate of such dollar amounts allowed as 

13 credits under this section for such taxable 

14 year equals but does not exceed the total 

15 increase in revenues in the Treasury re16 sulting from the amendments made by sec17 tions 303 and 401 of the Patients’ Choice 

18 Act for such taxable year as estimated by 

19 the Secretary. 

20 ‘‘(ii) DATE OF ADJUSTMENT.—The 

21 Secretary shall announce the adjustments 

22 for any taxable year under this subpara23 graph not later than the preceding October 

24 1. 


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•S 1099 IS

1 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—In 

2 the case of a taxable year to which section 26(a)(2) does 

3 not apply, the credit allowed under subsection (a) for the 

4 taxable year shall not exceed the excess of— 

5 ‘‘(1) the sum of the regular tax liability (as de6 fined in section 26(b)) plus the tax imposed by sec7 tion 55, over 

8 ‘‘(2) the sum of the credits allowable under this 

9 subpart (other than this section) and section 27 for 

10 the taxable year. 

11 ‘‘(d) EXCESS CREDIT REFUNDABLE TO CERTAIN

12 TAX-FAVORED ACCOUNTS.—If— 

13 ‘‘(1) the credit which would be allowable under 

14 subsection (a) if only qualified refund eligible health 

15 insurance were taken into account under this sec16 tion, exceeds 

17 ‘‘(2) the limitation imposed by section 26 or 

18 subsection (c) for the taxable year, 

19 such excess shall be paid by the Secretary into the des20 ignated account of the taxpayer. 

21 ‘‘(e) ELIGIBLE INDIVIDUAL.—For purposes of this 

22 section— 

23 ‘‘(1) IN GENERAL.—The term ‘eligible indi24 vidual’ means, with respect to any month, an indi25 vidual who— 


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•S 1099 IS

1 ‘‘(A) is the taxpayer, the taxpayer’s 

2 spouse, or the taxpayer’s dependent, and 

3 ‘‘(B) is covered under qualified health in4 surance as of the 1st day of such month. 

5 ‘‘(2) MEDICARE COVERAGE, MEDICAID DIS6 ABILITY COVERAGE, AND MILITARY COVERAGE.— 

7 The term ‘eligible individual’ shall not include any 

8 individual who for any month is— 

9 ‘‘(A) entitled to benefits under part A of 

10 title XVIII of the Social Security Act or en11 rolled under part B of such title, and the indi12 vidual is not a participant or beneficiary in a 

13 group health plan or large group health plan 

14 that is a primary plan (as defined in section 

15 1862(b)(2)(A) of such Act), 

16 ‘‘(B) enrolled by reason of disability in the 

17 program under title XIX of such Act, or 

18 ‘‘(C) entitled to benefits under chapter 55 

19 of title 10, United States Code, including under 

20 the TRICARE program (as defined in section 

21 1072(7) of such title). 

22 ‘‘(3) IDENTIFICATION REQUIREMENTS.—The 

23 term ‘eligible individual’ shall not include any indi24 vidual for any month unless the policy number asso25 ciated with the qualified health insurance and the 


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•S 1099 IS

1 TIN of each eligible individual covered under such 

2 health insurance for such month are included on the 

3 return of tax for the taxable year in which such 

4 month occurs. 

5 ‘‘(4) PRISONERS.—The term ‘eligible individual’ 

6 shall not include any individual for a month if, as 

7 of the first day of such month, such individual is im8 prisoned under Federal, State, or local authority. 

9 ‘‘(5) ALIENS.—The term ‘eligible individual’ 

10 shall not include any alien individual who is not a 

11 lawful permanent resident of the United States. 

12 ‘‘(f) HEALTH INSURANCE.—For purposes of this sec13 tion— 

14 ‘‘(1) QUALIFIED HEALTH INSURANCE.—The 

15 term ‘qualified health insurance’ means any insur16 ance constituting medical care which (as determined 

17 under regulations prescribed by the Secretary)— 

18 ‘‘(A) has a reasonable annual and lifetime 

19 benefit maximum, and 

20 ‘‘(B) provides coverage for inpatient and 

21 outpatient care, emergency benefits, and physi22 cian care. 

23 Such term does not include any insurance substan24 tially all of the coverage of which is coverage de25 scribed in section 223(c)(1)(B). 


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•S 1099 IS

1 ‘‘(2) QUALIFIED REFUND ELIGIBLE HEALTH

2 INSURANCE.—The term ‘qualified refund eligible 

3 health insurance’ means any qualified health insur4 ance which is coverage under a group health plan 

5 (as defined in section 5000(b)(1)). 

6 ‘‘(g) DESIGNATED ACCOUNTS.— 

7 ‘‘(1) DESIGNATED ACCOUNT.—For purposes of 

8 this section, the term ‘designated account’ means 

9 any specified account established and maintained by 

10 the provider of the taxpayer’s qualified refund eligi11 ble health insurance— 

12 ‘‘(A) which is designated by the taxpayer 

13 (in such form and manner as the Secretary may 

14 provide) on the return of tax for the taxable 

15 year, 

16 ‘‘(B) which, under the terms of the ac17 count, accepts the payment described in sub18 section (d) on behalf of the taxpayer, and 

19 ‘‘(C) which, under such terms, provides for 

20 the payment of expenses by the taxpayer or on 

21 behalf of such taxpayer by the trustee or custo22 dian of such account, including payment to 

23 such provider. 

24 ‘‘(2) SPECIFIED ACCOUNT.—For purposes of 

25 this paragraph, the term ‘specified account’ means— 


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•S 1099 IS

1 ‘‘(A) any health savings account under sec2 tion 223 or Archer MSA under section 220, or 

3 ‘‘(B) any health insurance reserve account. 

4 ‘‘(3) HEALTH INSURANCE RESERVE AC5 COUNT.—For purposes of this subsection, the term 

6 ‘health insurance reserve account’ means a trust cre7 ated or organized in the United States as a health 

8 insurance reserve account exclusively for the purpose 

9 of paying the qualified medical expenses (within the 

10 meaning of section 223(d)(2)) of the account bene11 ficiary (as defined in section 223(d)(3)), but only if 

12 the written governing instrument creating the trust 

13 meets the requirements described in subparagraphs 

14 (B), (C), (D), and (E) of section 223(d)(1). Rules 

15 similar to the rules under subsections (g) and (h) of 

16 section 408 shall apply for purposes of this subpara17 graph. 

18 ‘‘(4) TREATMENT OF PAYMENT.—Any payment 

19 under subsection (d) to a designated account shall 

20 not be taken into account with respect to any dollar 

21 limitation which applies with respect to contributions 

22 to such account (or to tax benefits with respect to 

23 such contributions). 

24 ‘‘(h) OTHER DEFINITIONS.—For purposes of this 

25 section— 


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•S 1099 IS

1 ‘‘(1) DEPENDENT.—The term ‘dependent’ has 

2 the meaning given such term by section 152 (deter3 mined without regard to subsections (b)(1), (b)(2), 

4 and (d)(1)(B) thereof). An individual who is a child 

5 to whom section 152(e) applies shall be treated as 

6 a dependent of the custodial parent for a coverage 

7 month unless the custodial and noncustodial parent 

8 provide otherwise. 

9 ‘‘(2) ADULT.—The term ‘adult’ means an indi10 vidual who is not a child. 

11 ‘‘(3) CHILD.—The term ‘child’ means a quali12 fying child (as defined in section 152(c)). 

13 ‘‘(i) SPECIAL RULES.— 

14 ‘‘(1) COORDINATION WITH MEDICAL DEDUC15 TION.—Any amount paid by a taxpayer for insur16 ance which is taken into account for purposes of de17 termining the credit allowable to the taxpayer under 

18 subsection (a) shall not be taken into account in 

19 computing the amount allowable to the taxpayer as 

20 a deduction under section 213(a) or 162(l). 

21 ‘‘(2) COORDINATION WITH HEALTH CARE TAX

22 CREDIT.—No credit shall be allowed under sub23 section (a) for any taxable year to any taxpayer and 

24 qualifying family members with respect to whom a 


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•S 1099 IS

1 credit under section 35 is allowed for such taxable 

2 year. 

3 ‘‘(3) DENIAL OF CREDIT TO DEPENDENTS.—No 

4 credit shall be allowed under this section to any indi5 vidual with respect to whom a deduction under sec6 tion 151 is allowable to another taxpayer for a tax7 able year beginning in the calendar year in which 

8 such individual’s taxable year begins. 

9 ‘‘(4) MARRIED COUPLES MUST FILE JOINT RE10 TURN.— 

11 ‘‘(A) IN GENERAL.—If the taxpayer is 

12 married at the close of the taxable year, the 

13 credit shall be allowed under subsection (a) only 

14 if the taxpayer and his spouse file a joint return 

15 for the taxable year. 

16 ‘‘(B) MARITAL STATUS; CERTAIN MARRIED

17 INDIVIDUALS LIVING APART.—Rules similar to 

18 the rules of paragraphs (3) and (4) of section 

19 21(e) shall apply for purposes of this para20 graph. 

21 ‘‘(5) VERIFICATION OF COVERAGE, ETC.—No 

22 credit shall be allowed under this section with re23 spect to any individual unless such individual’s cov24 erage (and such related information as the Secretary 


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•S 1099 IS

1 may require) is verified in such manner as the Sec2 retary may prescribe. 

3 ‘‘(6) INSURANCE WHICH COVERS OTHER INDI4 VIDUALS; TREATMENT OF PAYMENTS.—Rules similar 

5 to the rules of paragraphs (7) and (8) of section 

6 35(g) shall apply for purposes of this section. 

7 ‘‘(j) COORDINATION WITH ADVANCE PAYMENTS.— 

8 ‘‘(1) REDUCTION IN CREDIT FOR ADVANCE PAY9 MENTS.—With respect to any taxable year, the 

10 amount which would (but for this subsection) be al11 lowed as a credit to the taxpayer under subsection 

12 (a) shall be reduced (but not below zero) by the ag13 gregate amount paid on behalf of such taxpayer 

14 under section 7527A for months beginning in such 

15 taxable year. 

16 ‘‘(2) RECAPTURE OF EXCESS ADVANCE PAY17 MENTS.—If the aggregate amount paid on behalf of 

18 the taxpayer under section 7527A for months begin19 ning in the taxable year exceeds the sum of the 

20 monthly limitations determined under subsection (b) 

21 for the taxpayer and the taxpayer’s spouse and de22 pendents for such months, then the tax imposed by 

23 this chapter for such taxable year shall be increased 

24 by the sum of— 

25 ‘‘(A) such excess, plus 


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•S 1099 IS

1 ‘‘(B) interest on such excess determined at 

2 the underpayment rate established under sec3 tion 6621 for the period from the date of the 

4 payment under section 7527A to the date such 

5 excess is paid. 

6 For purposes of subparagraph (B), an equal part of 

7 the aggregate amount of the excess shall be deemed 

8 to be attributable to payments made under section 

9 7527A on the first day of each month beginning in 

10 such taxable year, unless the taxpayer establishes 

11 the date on which each such payment giving rise to 

12 such excess occurred, in which case subparagraph 

13 (B) shall be applied with respect to each date so es14 tablished. The Secretary may rescind or waive all or 

15 any portion of any amount imposed by reason of 

16 subparagraph (B) if such excess was not the result 

17 of the actions of the taxpayer.’’. 

18 (b) ADVANCE PAYMENT OF CREDIT.—Chapter 77 

19 (relating to miscellaneous provisions) is amended by in20 serting after section 7527 the following new section: 

21 ‘‘SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR QUALI22 FIED REFUND ELIGIBLE HEALTH INSUR23 ANCE. 

24 ‘‘(a) IN GENERAL.—The Secretary shall establish a 

25 program for making payments on behalf of individuals to 


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•S 1099 IS

1 providers of qualified refund eligible health insurance (as 

2 defined in section 25E(f)(2)) for such individuals. 

3 ‘‘(b) LIMITATION.—The Secretary may make pay4 ments under subsection (a) only to the extent that the Sec5 retary determines that the amount of such payments made 

6 on behalf of any taxpayer for any month does not exceed 

7 the sum of the monthly limitations determined under sec8 tion 25E(b) for the taxpayer and taxpayer’s spouse and 

9 dependents for such month.’’. 

10 (c) INFORMATION REPORTING.— 

11 (1) IN GENERAL.—Subpart B of part III of 

12 subchapter A of chapter 61 (relating to information 

13 concerning transactions with other persons) is 

14 amended by inserting after section 6050W the fol15 lowing new section: 

16 ‘‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR QUALI17 FIED REFUND ELIGIBLE HEALTH INSUR18 ANCE. 

19 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

20 who is entitled to receive payments for any month of any 

21 calendar year under section 7527A (relating to advance 

22 payment of credit for qualified refund eligible health insur23 ance) with respect to any individual shall, at such time 

24 as the Secretary may prescribe, make the return described 

25 in subsection (b) with respect to each such individual. 


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•S 1099 IS

1 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

2 is described in this subsection if such return— 

3 ‘‘(1) is in such form as the Secretary may pre4 scribe, and 

5 ‘‘(2) contains, with respect to each individual 

6 referred to in subsection (a)— 

7 ‘‘(A) the name, address, and TIN of each 

8 such individual, 

9 ‘‘(B) the months for which amounts pay10 ments under section 7527A were received, 

11 ‘‘(C) the amount of each such payment, 

12 ‘‘(D) the type of insurance coverage pro13 vided by such person with respect to such indi14 vidual and the policy number associated with 

15 such coverage, 

16 ‘‘(E) the name, address, and TIN of the 

17 spouse and each dependent covered under such 

18 coverage, and 

19 ‘‘(F) such other information as the Sec20 retary may prescribe. 

21 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID22 UALS WITH RESPECT TO WHOM INFORMATION IS RE23 QUIRED.—Every person required to make a return under 

24 subsection (a) shall furnish to each individual whose name 


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•S 1099 IS

1 is required to be set forth in such return a written state2 ment showing— 

3 ‘‘(1) the contact information of the person re4 quired to make such return, and 

5 ‘‘(2) the information required to be shown on 

6 the return with respect to such individual. 

7 The written statement required under the preceding sen8 tence shall be furnished on or before January 31 of the 

9 year following the calendar year for which the return 

10 under subsection (a) is required to be made. 

11 ‘‘(d) RETURNS WHICH WOULD BE REQUIRED TO BE

12 MADE BY 2 OR MORE PERSONS.—Except to the extent 

13 provided in regulations prescribed by the Secretary, in the 

14 case of any amount received by any person on behalf of 

15 another person, only the person first receiving such 

16 amount shall be required to make the return under sub17 section (a).’’. 

18 (2) ASSESSABLE PENALTIES.— 

19 (A) Subparagraph (B) of section 

20 6724(d)(1) (relating to definitions) is amended 

21 by striking ‘‘or’’ at the end of clause (xxii), by 

22 striking ‘‘and’’ at the end of clause (xxiii) and 

23 inserting ‘‘or’’, and by inserting after clause 

24 (xxiii) the following new clause: 


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•S 1099 IS

1 ‘‘(xxiv) section 6050X (relating to re2 turns relating to credit for qualified refund 

3 eligible health insurance), and’’. 

4 (B) Paragraph (2) of section 6724(d) is 

5 amended by striking ‘‘or’’ at the end of sub6 paragraph (EE), by striking the period at the 

7 end of subparagraph (FF) and inserting ‘‘, or’’ 

8 and by inserting after subparagraph (FF) the 

9 following new subparagraph: 

10 ‘‘(GG) section 6050X (relating to returns 

11 relating to credit for qualified refund eligible 

12 health insurance).’’. 

13 (d) CONFORMING AMENDMENTS.— 

14 (1) Paragraph (2) of section 1324(b) of title 

15 31, United States Code, is amended by inserting 

16 ‘‘25E,’’ before ‘‘35,’’. 

17 (2)(A) Section 24(b)(3)(B) is amended by in18 serting ‘‘, 25E,’’ after ‘‘25D’’. 

19 (B) Section 25(e)(1)(C)(ii) is amended by in20 serting ‘‘25E,’’ after ‘‘25D,’’. 

21 (C) Section 25B(g)(2) is amended by inserting 

22 ‘‘25E,’’ after ‘‘25D,’’. 

23 (D) Section 26(a)(1) is amended by inserting 

24 ‘‘25E,’’ after ‘‘25D,’’. 


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•S 1099 IS

1 (E) Section 30(c)(2)(B)(ii) is amended by in2 serting ‘‘25E,’’ after ‘‘25D,’’. 

3 (F) Section 30D(c)(2)(B)(ii) is amended by 

4 striking ‘‘and 25D’’ and inserting ‘‘, 25D, and 

5 25E’’. 

6 (G) Section 904(i) is amended by inserting 

7 ‘‘25E,’’ after ‘‘25B,’’. 

8 (H) Section 1400C(d)(2) is amended by insert9 ing ‘‘25E,’’ after ‘‘25D,’’. 

10 (3) The table of sections for subpart A of part 

11 IV of subchapter A of chapter 1 is amended by in12 serting after the item relating to section 25D the 

13 following new item: 

‘‘Sec. 25E. Qualified health insurance credit.’’. 

14 (4) The table of sections for chapter 77 is 

15 amended by inserting after the item relating to sec16 tion 7527 the following new item: 

‘‘Sec. 7527A. Advance payment of credit for qualified refund eligible health insurance.’’. 

17 (5) The table of sections for subpart B of part 

18 III of subchapter A of chapter 61 is amended by 

19 adding at the end the following new item: 

‘‘Sec. 6050X. Returns relating to credit for qualified refund eligible health insurance.’’. 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2010. 


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•S 1099 IS

1 SEC. 302. REQUIRING EMPLOYER TRANSPARENCY ABOUT 

2 EMPLOYEE BENEFITS. 

3 (a) IN GENERAL.—Section 6051(a) (relating to W– 

4 2 requirement) is amended by striking ‘‘and’’ at the end 

5 of paragraph (12), by striking the period at the end of 

6 paragraph (13) and inserting ‘‘, and’’ and by inserting 

7 after paragraph (13) the following new paragraph: 

8 ‘‘(14) the aggregate cost (within the meaning of 

9 section 4980B(f)(4)) for coverage of the employee 

10 under an accident or health plan which is excludable 

11 from the gross income of the employee under section 

12 106(a) (other than coverage under a health flexible 

13 spending arrangement).’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to statements for calendar years 

16 beginning after 2009. 

17 SEC. 303. CHANGES TO EXISTING TAX PREFERENCES FOR 

18 MEDICAL COVERAGE, ETC., FOR INDIVIDUALS 

19 ELIGIBLE FOR QUALIFIED HEALTH INSUR20 ANCE CREDIT. 

21 (a) EXCLUSION FOR CONTRIBUTIONS BY EMPLOYER

22 TO ACCIDENT AND HEALTH PLANS.— 

23 (1) IN GENERAL.—Section 106 (relating to con24 tributions by employer to accident and health plans) 

25 is amended by adding at the end the following new 

26 subsection: 


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•S 1099 IS

1 ‘‘(f) NO EXCLUSION FOR INDIVIDUALS ELIGIBLE

2 FOR QUALIFIED HEALTH INSURANCE CREDIT.—Sub3 section (a) shall not apply with respect to any employer4 provided coverage under an accident or health plan for any 

5 individual for any month unless such individual is de6 scribed in paragraph (2) or (5) of section 25E(e) for such 

7 month. The amount includible in gross income by reason 

8 of this subsection shall be determined under rules similar 

9 to the rules of section 4980B(f)(4).’’. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) Section 106(b)(1) is amended— 

12 (i) by inserting ‘‘gross income does 

13 not include’’ before ‘‘amounts contrib14 uted’’, and 

15 (ii) by striking ‘‘shall be treated as 

16 employer-provided coverage for medical ex17 penses under an accident or health plan’’. 

18 (B) Section 106(d)(1) is amended— 

19 (i) by inserting ‘‘gross income does 

20 not include’’ before ‘‘amounts contrib21 uted’’, and 

22 (ii) by striking ‘‘shall be treated as 

23 employer-provided coverage for medical ex24 penses under an accident or health plan’’. 


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•S 1099 IS

1 (b) AMOUNTS RECEIVED UNDER ACCIDENT AND

2 HEALTH PLANS.—Section 105 (relating to amounts re3 ceived under accident and health plans) is amended by 

4 adding at the end the following new subsection: 

5 ‘‘(f) NO EXCLUSION FOR INDIVIDUALS ELIGIBLE

6 FOR QUALIFIED HEALTH INSURANCE CREDIT.—Sub7 section (b) shall not apply with respect to any employer8 provided coverage under an accident or health plan for any 

9 individual for any month unless such individual is de10 scribed in paragraph (2) or (5) of section 25E(e) for such 

11 month.’’. 

12 (c) SPECIAL RULES FOR HEALTH INSURANCE COSTS

13 OF SELF-EMPLOYED INDIVIDUALS.—Subsection (l) of 

14 section 162 (relating to special rules for health insurance 

15 costs of self-employed individuals) is amended by adding 

16 at the end the following new paragraph: 

17 ‘‘(6) NO DEDUCTION TO INDIVIDUALS ELIGIBLE

18 FOR QUALIFIED HEALTH INSURANCE.—Paragraph 

19 (1) shall not apply for any individual for any month 

20 unless such individual is described in paragraph (2) 

21 or (5) of section 25E(e) for such month.’’. 

22 (d) EARNED INCOME CREDIT UNAFFECTED BY RE23 PEALED EXCLUSIONS.—Subparagraph (B) of section 

24 32(c)(2) is amended by redesignating clauses (v) and (vi) 


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1 as clauses (vi) and (vii), respectively, and by inserting 

2 after clause (iv) the following new clause: 

3 ‘‘(v) the earned income of an indi4 vidual shall be computed without regard to 

5 sections 105(f) and 106(f),’’. 

6 (e) MODIFICATION OF DEDUCTION FOR MEDICAL

7 EXPENSES.—Subsection (d) of section 213 is amended by 

8 adding at the end the following new paragraph: 

9 ‘‘(12) PREMIUMS FOR QUALIFIED HEALTH IN10 SURANCE.—The term ‘medical care’ does not include 

11 any amount paid as a premium for coverage of an 

12 eligible individual (as defined in section 25E(e)) 

13 under qualified health insurance (as defined in sec14 tion 25E(f)) for any month.’’. 

15 (f) REPORTING REQUIREMENT.—Subsection (a) of 

16 section 6051 is amended by striking ‘‘and’’ at the end of 

17 paragraph (12), by striking the period at the end of para18 graph (13) and inserting ‘‘and’’, and by inserting after 

19 paragraph (13) the following new paragraph: 

20 ‘‘(14) the total amount of employer-provided 

21 coverage under an accident or health plan which is 

22 includible in gross income by reason of sections 

23 105(f) and 106(f).’’. 

24 (g) RETIRED PUBLIC SAFETY OFFICERS.—Section 

25 402(l)(4)(D) is amended by adding at the end the folVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 lowing: ‘‘Such term shall not include any premium for cov2 erage by an accident or health insurance plan for any 

3 month unless such individual is described in paragraph (2) 

4 or (5) of section 25E(e) for such month.’’. 

5 (h) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2010. 

8 (i) NO INTENT TO ENCOURAGE STATE TAXATION OF

9 HEALTH BENEFITS.—No intent to encourage any State 

10 to treat health benefits as taxable income for the purpose 

11 of increasing State income taxes may be inferred from the 

12 provisions of, and amendments made by, this section. 

13 Subtitle B—Health Savings 

14 Accounts 

15 SEC. 311. IMPROVEMENTS TO HEALTH SAVINGS ACCOUNTS. 

16 (a) INCREASE IN MONTHLY CONTRIBUTION LIMIT.— 

17 (1) IN GENERAL.—Paragraph (2) of section 

18 223(b) (relating to limitations) is amended to read 

19 as follows: 

20 ‘‘(2) MONTHLY LIMITATION.— 

21 ‘‘(A) IN GENERAL.—In the case of an eligi22 ble individual who has coverage under a high 

23 deductible health plan, the monthly limitation 

for any month of such coverage is 1 24 ⁄12 of the 

25 sum of— 


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1 ‘‘(i) the greater of— 

2 ‘‘(I) the sum of the annual de3 ductible and the other annual out-of4 pocket expenses (other than for pre5 miums) required to be paid under the 

6 plan by the eligible individual for cov7 ered benefits, or 

8 ‘‘(II) in the case of an eligible in9 dividual who has— 

10 ‘‘(aa) self-only coverage 

11 under a high deductible health 

12 plan as of the first day of such 

13 month, $3,000, or 

14 ‘‘(bb) family coverage under 

15 a high deductible health plan as 

16 of the first day of such month, 

17 $5,950, and 

18 ‘‘(ii) in the case of an eligible indi19 vidual who has coverage under a qualified 

20 long-term care insurance contract (as de21 fined in section 7702B(b)), the lesser of— 

22 ‘‘(I) the annual premium for 

23 such coverage, or 

24 ‘‘(II) $1,000. 


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1 ‘‘(B) SPECIAL RULES RELATING TO OUT2 OF-POCKET EXPENSES.— 

3 ‘‘(i) REDUCTION FOR SEPARATE

4 PLAN.—The annual out-of-pocket expenses 

5 taken into account under subparagraph 

6 (A)(i)(I) with respect to any eligible indi7 vidual shall be reduced by any out-of-pock8 et expense payable under a separate plan 

9 covering the individual. 

10 ‘‘(ii) SECRETARIAL AUTHORITY.—The 

11 Secretary may by regulations provide that 

12 annual out-of-pocket expenses will not be 

13 taken into account under subparagraph 

14 (A)(i)(I) to the extent that there is only a 

15 remote likelihood that such amounts will 

16 be required to be paid.’’. 

17 (2) APPLICATION OF SPECIAL RULES FOR MAR18 RIED INDIVIDUALS.—Paragraph (5) of section 

19 223(b) (relating to limitations) is amended to read 

20 as follows: 

21 ‘‘(5) SPECIAL RULES FOR MARRIED INDIVID22 UALS.— 

23 ‘‘(A) IN GENERAL.—In the case of individ24 uals who are married to each other and who are 

25 both eligible individuals, the limitation under 


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1 paragraph (1) for each spouse shall be equal to 

2 the spouse’s applicable share of the combined 

3 marital limit. 

4 ‘‘(B) COMBINED MARITAL LIMIT.—For 

5 purposes of subparagraph (A), the combined 

6 marital limit is the excess (if any) of— 

7 ‘‘(i) the lesser of— 

8 ‘‘(I) subject to subparagraph (C), 

9 the sum of the limitations computed 

10 separately under paragraph (1) for 

11 each spouse (including any additional 

12 contribution amount under paragraph 

13 (3)), or 

14 ‘‘(II) the dollar amount in effect 

15 under subsection (c)(2)(A)(ii)(II), 

16 over 

17 ‘‘(ii) the aggregate amount paid to 

18 Archer MSAs of such spouses for the tax19 able year. 

20 ‘‘(C) SPECIAL RULE WHERE BOTH

21 SPOUSES HAVE FAMILY COVERAGE.—For pur22 poses of subparagraph (B)(i)(I), if either spouse 

23 has family coverage which covers both spouses, 

24 both spouses shall be treated as having only 

25 such coverage (and if both spouses each have 


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1 such coverage under different plans, shall be 

2 treated as having only family coverage with the 

3 plan with respect to which the lowest amount is 

4 determined under paragraph (2)(A)(i)(I)). 

5 ‘‘(D) APPLICABLE SHARE.—For purposes 

6 of subparagraph (A), a spouse’s applicable 

share is 1 7 ⁄2 of the combined marital limit unless 

8 both spouses agree on a different division. 

9 ‘‘(E) COUPLES NOT MARRIED ENTIRE

10 YEAR.—The Secretary shall prescribe rules for 

11 the application of this paragraph in the case of 

12 any taxable year for which the individuals were 

13 not married to each other during all months in14 cluded in the taxable year, including rules 

15 which allow individuals in appropriate cases to 

16 take into account coverage prior to marriage in 

17 computing the combined marital limit for pur18 poses of this paragraph.’’. 

19 (3) SELF-ONLY COVERAGE.—Paragraph (4) of 

20 section 223(c) (relating to definitions and special 

21 rules) is amended to read as follows: 

22 ‘‘(4) COVERAGE.— 

23 ‘‘(A) FAMILY COVERAGE.—The term ‘fam24 ily coverage’ means any coverage other than 

25 self-only coverage. 


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1 ‘‘(B) SELF-ONLY COVERAGE.—If more 

2 than 1 individual is covered by a high deduct3 ible health plan but only 1 of the individuals is 

4 an eligible individual, the coverage shall be 

5 treated as self-only coverage.’’. 

6 (4) CONFORMING AMENDMENTS.— 

7 (A) Section 223(b)(3)(A) is amended by 

8 striking ‘‘subparagraphs (A) and (B) of’’. 

9 (B) Section 223(c)(2)(A) is amended— 

10 (i) by striking ‘‘$1,000’’ in clause 

11 (i)(I) and inserting ‘‘$1,150’’, and 

12 (ii) by striking ‘‘$5,000’’ in clause 

13 (ii)(I) and inserting ‘‘$5,800’’. 

14 (C) Section 223(d)(1)(A)(ii)(I) is amended 

15 by striking ‘‘subsection (b)(2)(B)(ii)’’ and in16 serting ‘‘subsection (c)(2)(A)(ii)(II)’’. 

17 (D) Clause (ii) of section 223(c)(2)(D) is 

18 amended to read as follows: 

19 ‘‘(ii) CERTAIN ITEMS DISREGARDED

20 IN COMPUTING MONTHLY LIMITATION.— 

21 Such plan’s annual deductible, and such 

22 plan’s annual out-of-pocket limitation, for 

23 services provided outside of such network 

24 shall not be taken into account for pur25 poses of subsection (b)(2).’’ 


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1 (E) Subsection (g) of section 223 is 

2 amended to read as follows: 

3 ‘‘(g) COST-OF-LIVING ADJUSTMENTS.— 

4 ‘‘(1) IN GENERAL.—In the case of any taxable 

5 year beginning in a calendar year after 2009, each 

6 dollar amount contained in subsections (b)(2)(A) 

7 and (c)(2)(A) shall be increased by an amount equal 

8 to such dollar amount multiplied by the blended 

9 cost-of-living adjustment. 

10 ‘‘(2) BLENDED COST-OF-LIVING ADJUST11 MENT.—For purposes of paragraph (1), the blended 

12 cost-of-living adjustment means one-half of the sum 

13 of— 

14 ‘‘(A) the cost-of-living adjustment deter15 mined under section 1(f)(3) for the calendar 

16 year in which the taxable year begins by sub17 stituting ‘calendar year 2008’ for ‘calendar year 

18 1992’ in subparagraph (B) thereof, plus 

19 ‘‘(B) the cost-of-living adjustment deter20 mined under section 213(d)(10)(B)(ii) for the 

21 calendar year in which the taxable year begins 

22 by substituting ‘2008’ for ‘1996’ in subclause 

23 (II) thereof. 


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1 ‘‘(3) ROUNDING.—Any increase determined 

2 under paragraph (2) shall be rounded to the nearest 

3 multiple of $50.’’. 

4 (b) USE OF ACCOUNT FOR INDIVIDUAL HIGH DE5 DUCTIBLE HEALTH PLAN PREMIUMS.—Section 

6 223(d)(2)(C) (relating to exceptions) is amended by strik7 ing ‘‘or’’ at the end of clause (iii), by striking the period 

8 at the end of clause (iv) and inserting ‘‘, or’’, and by add9 ing at the end the following new clause: 

10 ‘‘(v) a high deductible health plan, but 

11 only if— 

12 ‘‘(I) the plan is not a group 

13 health plan (as defined in section 

14 5000(b)(1) without regard to section 

15 5000(d)), and 

16 ‘‘(II) the expenses are for cov17 erage for a month with respect to 

18 which the account beneficiary is an el19 igible individual by reason of the cov20 erage under the plan. 

21 For purposes of clause (v), an arrangement 

22 which constitutes individual health insurance 

23 shall not be treated as a group health plan, not24 withstanding that an employer or employee orVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 ganization negotiates the cost of benefits of 

2 such arrangement.’’. 

3 (c) SAFE HARBOR FOR ABSENCE OF MAINTENANCE

4 OF CHRONIC DISEASE.—Section 223(c)(2)(C) (safe har5 bor for absence of preventive care deductible) is amend6 ed— 

7 (1) by inserting ‘‘or maintenance of chronic dis8 ease, or both’’ after ‘‘the Secretary)’’, and 

9 (2) by inserting ‘‘OR MAINTENANCE OF CHRON10 IC DISEASE’’ in the heading after ‘‘PREVENTIVE

11 CARE’’. 

12 (d) CLARIFICATION OF TREATMENT OF CAPITATED

13 PRIMARY CARE PAYMENTS AS AMOUNTS PAID FOR MED14 ICAL CARE.—Section 213(d) (relating to definitions) is 

15 amended by adding at the end the following new para16 graph: 

17 ‘‘(12) TREATMENT OF CAPITATED PRIMARY

18 CARE PAYMENTS.—Capitated primary care payments 

19 shall be treated as amounts paid for medical care.’’. 

20 (e) SPECIAL RULE FOR INDIVIDUALS ELIGIBLE FOR

21 VETERANS OR INDIAN HEALTH BENEFITS.—Section 

22 223(c)(1) (defining eligible individual) is amended by add23 ing at the end the following new subparagraph: 

24 ‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI25 GIBLE FOR VETERANS OR INDIAN HEALTH BENVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 EFITS.—For purposes of subparagraph (A)(ii), 

2 an individual shall not be treated as covered 

3 under a health plan described in such subpara4 graph merely because the individual receives 

5 periodic hospital care or medical services under 

6 any law administered by the Secretary of Vet7 erans Affairs or the Bureau of Indian Affairs.’’. 

8 (f) CERTAIN PHYSICIAN FEES TO BE TREATED AS

9 MEDICAL CARE.— 

10 (1) IN GENERAL.—Section 213(d), is amended 

11 by adding at the end the following new paragraph: 

12 ‘‘(12) PRE-PAID PHYSICIAN FEES.—The term 

13 ‘medical care’ shall include amounts paid by patients 

14 to their primary physician in advance for the right 

15 to receive medical services on an as-needed basis.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by this section shall apply to taxable years beginning 

18 after the date of the enactment of this Act. 

19 (g) EFFECTIVE DATES.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendments made by this section 

22 shall apply to taxable years beginning after Decem23 ber 31, 2009. 

24 (2) CAPITATED PRIMARY CARE PAYMENTS.— 

25 The amendment made by subsection (d) shall apply 


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1 to amounts paid before, on, or after the date of the 

2 enactment of this Act. 

3 SEC. 312. EXCEPTION TO REQUIREMENT FOR EMPLOYERS 

4 TO MAKE COMPARABLE HEALTH SAVINGS AC5 COUNT CONTRIBUTIONS. 

6 (a) GREATER EMPLOYER-PROVIDED CONTRIBU7 TIONS TO HSAS FOR CHRONICALLY ILL EMPLOYEES

8 TREATED AS MEETING COMPARABILITY REQUIRE9 MENTS.—Subsection (b) of section 4980G (relating to fail10 ure of employer to make comparable health savings ac11 count contributions) is amended to read as follows: 

12 ‘‘(b) RULES AND REQUIREMENTS.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), rules and requirements similar to the 

15 rules and requirements of section 4980E shall apply 

16 for purposes of this section. 

17 ‘‘(2) TREATMENT OF EMPLOYER-PROVIDED

18 CONTRIBUTIONS TO HSAS FOR CHRONICALLY ILL

19 EMPLOYEES.—For purposes of this section— 

20 ‘‘(A) IN GENERAL.—Any contribution by 

21 an employer to a health savings account of an 

22 employee who is (or the spouse or any depend23 ent of the employee who is) a chronically ill in24 dividual in an amount which is greater than a 

25 contribution to a health savings account of a 


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1 comparable participating employee who is not a 

2 chronically ill individual shall not fail to be con3 sidered a comparable contribution. 

4 ‘‘(B) NONDISCRIMINATION REQUIRE5 MENT.—Subparagraph (A) shall not apply un6 less the excess employer contributions described 

7 in subparagraph (A) are the same for all chron8 ically ill individuals who are similarly situated. 

9 ‘‘(C) CHRONICALLY ILL INDIVIDUAL.—For 

10 purposes of this paragraph, the term ‘chron11 ically ill individual’ means any individual whose 

12 qualified medical expenses for any taxable year 

13 are more than 50 percent greater than the av14 erage qualified medical expenses of all employ15 ees of the employer for such year.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2009. 


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1 TITLE IV—FAIRNESS FOR EVERY 

2 AMERICAN PATIENT 

3 Subtitle A—Medicaid 

4 Modernization 

5 SEC. 401. MEDICAID MODERNIZATION. 

6 (a) IN GENERAL.—Effective January 1, 2011, title 

7 XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 

8 is amended to read as follows: 

9 ‘‘TITLE XIX—GRANTS TO STATES 

10 FOR MEDICAL ASSISTANCE 

11 PROGRAMS 

‘‘TABLE OF CONTENTS OF TITLE 

‘‘Sec. 1900. References to pre-modernized Medicaid provisions; continuity for 

commonwealths and territories. 

‘‘PART A—GRANTS TO STATES FOR ACUTE CARE FOR INDIVIDUALS WITH

DISABILITIES AND CERTAIN LOW-INCOME INDIVIDUALS

‘‘Sec. 1901. Purpose; Appropriation. 

‘‘Sec. 1902. Payments to States for acute care medical assistance. 

‘‘Sec. 1903. Definitions of eligible individuals and acute care medical assistance. 

‘‘Sec. 1904. State plan requirements for acute care medical assistance. 

‘‘Sec. 1905. Definitions. 

‘‘Sec. 1906. Enrollment of individuals under group health plans and other arrangements. 

‘‘Sec. 1907. Drug rebates. 

‘‘Sec. 1908. Managed care. 

‘‘Sec. 1909. Annual reports. 

‘‘PART B—GRANTS TO STATES FOR LONG-TERM CARE SERVICES AND

SUPPORTS

‘‘Sec. 1911. Purpose. 

‘‘Sec. 1912. State plan. 

‘‘Sec. 1913. State allotments. 

‘‘Sec. 1914. Use of grants. 

‘‘Sec. 1915. Administrative provisions. 

‘‘Sec. 1916. Definition of long-term care services and supports. 

‘‘Sec. 1917. Provision requirements for long-term care services and supports, 

including option for self-directed services and supports. 


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‘‘Sec. 1918. Treatment of income and resources for certain institutionalized 

spouses. 

‘‘Sec. 1919. Annual reports. 

‘‘PART C—GRANTS TO STATES FOR SURVEY AND CERTIFICATION OF

MEDICAL FACILITIES AND OTHER REQUIREMENTS

‘‘Sec. 1931. Authorization of appropriations. 

‘‘Sec. 1932. Application of certain requirements under pre-modernized Medicaid. 

‘‘PART D—GRANTS TO STATES FOR PROGRAM INTEGRITY

‘‘Sec. 1941. Authorization of appropriations. 

‘‘Sec. 1942. Application of certain requirements under pre-modernized Medicaid. 

‘‘PART E—GRANTS TO STATES FOR ADMINISTRATION

‘‘Sec. 1951. Authorization of appropriations; payments to states. 

‘‘Sec. 1952. Cost-sharing protections. 

‘‘Sec. 1953. Application of certain requirements under pre-modernized Medicaid. 

‘‘PART F—OTHER PROVISIONS

‘‘Sec. 1961. Application of certain requirements under pre-modernized Medicaid. 

1 ‘‘SEC. 1900. REFERENCES TO PRE-MODERNIZED MEDICAID 

2 PROVISIONS; CONTINUITY FOR COMMON3 WEALTHS AND TERRITORIES. 

4 ‘‘(a) IN GENERAL.—In this title, if a reference to this 

5 title or to a provision of this title is prefaced by the term 

6 ‘old’, such reference is to this title or a provision of this 

7 title as in effect on December 31, 2010. 

8 ‘‘(b) REGULATIONS.—The Secretary shall promul9 gate regulations to bring requirements imposed under an 

10 old provision of this title that applies under this title after 

11 December 31, 2010, into conformity with the policies em12 bodied in this title as in effect on and after January 1, 

13 2011. 


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1 ‘‘(c) CONTINUITY FOR COMMONWEALTHS AND TER2 RITORIES.—In the case of Puerto Rico, the United States 

3 Virgin Islands, Guam, the Northen Mariana Islands, and 

4 American Samoa, this title as in effect on and after Janu5 ary 1, 2011, shall not apply to such commonwealths and 

6 territories, and old title XIX shall apply to a Medicaid pro7 gram operated by such commonwealths or territories on 

8 and after that date. 

9 ‘‘PART A—GRANTS TO STATES FOR ACUTE CARE 

10 FOR INDIVIDUALS WITH DISABILITIES AND 

11 CERTAIN LOW-INCOME INDIVIDUALS 

12 ‘‘SEC. 1901. PURPOSE; APPROPRIATION. 

13 ‘‘(a) PURPOSE.—It is the purpose of this part to en14 able each State, as far as practicable under the conditions 

15 in the State, to provide acute care medical assistance to 

16 eligible individuals described in section 1903 whose income 

17 and resources are insufficient to meet the costs of nec18 essary medical services, and (2) rehabilitation and other 

19 services to help such individuals attain or retain capability 

20 for independence or self-care. 

21 ‘‘(b) APPROPRIATION.—For the purpose of making 

22 payments to States under this part, there is appropriated 

23 out of any money in the Treasury not otherwise appro24 priated, such sums as are necessary for fiscal year 2011 

25 and each fiscal year thereafter. 


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1 ‘‘SEC. 1902. PAYMENTS TO STATES FOR ACUTE CARE MED2 ICAL ASSISTANCE. 

3 ‘‘(a) IN GENERAL.—From the amounts appropriated 

4 under section 1901 for a fiscal year, the Secretary shall 

5 pay to each State which has a plan approved under this 

6 part, for each quarter, beginning with the quarter com7 mencing January 1, 2011, an amount equal to the Federal 

8 medical assistance percentage (as defined in section 

9 1905(b)) of the total amount expended during such quar10 ter as acute care medical assistance under the State plan 

11 under this part. 

12 ‘‘(b) ADMINISTRATIVE EXPENSES.—Each State with 

13 a plan approved under this part shall receive a payment 

14 determined in accordance with part E for administrative 

15 expenses incurred in carrying out the plan under this part 

16 and part B (if the State has a plan approved under that 

17 part). 

18 ‘‘SEC. 1903. DEFINITIONS OF ELIGIBLE INDIVIDUALS AND 

19 ACUTE CARE MEDICAL ASSISTANCE. 

20 ‘‘(a) ELIGIBLE INDIVIDUALS.— 

21 ‘‘(1) IN GENERAL.—In this part, the term ‘eli22 gible individual’ means an individual— 

23 ‘‘(A) who is— 

24 ‘‘(i) a blind or disabled individual; or 

25 ‘‘(ii) an individual described in para26 graph (2); and 


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1 ‘‘(B) who the State determines satisfies— 

2 ‘‘(i) the income and resources eligi3 bility requirements established by the State 

4 under the State plan under this part; and 

5 ‘‘(ii) such other requirements for as6 sistance as are imposed under this title, in7 cluding documentation of citizenship or 

8 status as a qualified alien under title IV of 

9 the Personal Responsibility and Work Op10 portunity Reconciliation Act of 1996. 

11 ‘‘(2) INDIVIDUALS DESCRIBED.—For purposes 

12 of paragraph (1)(A)(ii), the following individuals are 

13 described in this paragraph: 

14 ‘‘(A) A child in foster care under the re15 sponsibility of the State. 

16 ‘‘(B) A low-income woman with breast or 

17 cervical cancer described in old section 

18 1902(aa). 

19 ‘‘(C) Certain TB-infected individuals de20 scribed in old section 1902(z)(1). 

21 ‘‘(3) GRANDFATHERED INDIVIDUALS.—An indi22 vidual shall be an eligible individual under the State 

23 plan under this part if— 

24 ‘‘(A) the individual is described in para25 graph (1)(A); 


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1 ‘‘(B) the individual satisfies the docu2 mentation requirements referred to in para3 graph (1)(B)(ii); and 

4 ‘‘(C) the State would have provided med5 ical assistance under the State plan under old 

6 title XIX to the individual, but only so long as 

7 the individual continues to satisfy such old eligi8 bility requirements. 

9 ‘‘(4) CONCURRENT ELIGIBILITY FOR PART B.— 

10 An eligible individual under this part may be eligible 

11 under part B, but only if the individual satisfies the 

12 eligibility requirements of part B in addition to sat13 isfying the requirements for eligibility under this 

14 part. 

15 ‘‘(5) PRESUMPTIVE ELIGIBILITY FOR CERTAIN

16 BREAST OR CERVICAL CANCER PATIENTS.—Old sec17 tion 1920B (relating to presumptive eligibility for 

18 certain breast or cervical cancer patients) shall apply 

19 under this part. 

20 ‘‘(b) BENEFITS.—Subject to paragraph (3), in this 

21 part, the term ‘acute care medical assistance’ means the 

22 following: 

23 ‘‘(1) MANDATORY BENEFITS.—The care and 

24 services listed in paragraphs (1) through (5), (17), 

25 and (21) of old section 1905(a) (but, in the case of 


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1 paragraph (4)(A) of such section, without regard to 

2 any limitation based on age or services in an institu3 tion for mental diseases). 

4 ‘‘(2) OPTIONAL BENEFITS.—Any care or serv5 ices listed in a paragraph of old section 1905(a) 

6 (other than paragraph (16)). 

7 ‘‘(3) EXCEPTIONS.— 

8 ‘‘(A) CERTAIN SERVICES LIMITED TO PART

9 B.—Services described in paragraphs (15), 

10 (22), (23), (24), and (26) of old section 

11 1905(a) shall only be provided under the State 

12 plan under part B. 

13 ‘‘(B) LIMIT ON PROVISION OF LONG-TERM

14 CARE SERVICES AND SUPPORTS.—A care or 

15 service that the Secretary determines is a long16 term care service and support (including nurs17 ing facility services described in old section 

18 1905(a)(4)(A)) shall not be provided to an indi19 vidual under the State plan under this part for 

20 more than 30 days within any 12-month period. 

21 ‘‘(C) EXCLUSIONS.—Such term shall not 

22 include any payments with respect to care or 

23 services for any individual who is an inmate of 

24 a public institution or a patient in an institu25 tion for mental diseases (regardless of age). 


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1 ‘‘SEC. 1904. STATE PLAN REQUIREMENTS FOR ACUTE CARE 

2 MEDICAL ASSISTANCE. 

3 ‘‘(a) IN GENERAL.—In order to receive payments 

4 under this part, a State shall have an approved State plan 

5 for acute care medical assistance. For purposes of this 

6 part, such assistance includes payments for preventive 

7 care, primary care, diagnosis and treatment of acute and 

8 chronic health conditions, emergency care, diagnosis and 

9 treatment of mental illnesses and related conditions, and 

10 rehabilitation and other services to help eligible individuals 

11 attain or retain capability for independence or self-care. 

12 A State medical assistance plan shall include a descrip13 tion, consistent with the requirements of this part of— 

14 ‘‘(1) eligibility standards, including income and 

15 asset standards; 

16 ‘‘(2) benefits, including the amount, duration, 

17 and scope of covered items and services; 

18 ‘‘(3) strategies for improving access and quality 

19 of care; and 

20 ‘‘(4) methods of service delivery. 

21 ‘‘(b) PUBLIC AVAILABILITY OF STATE PLAN.—The 

22 State shall make available to the public the State plan 

23 under this part and any amendments submitted by the 

24 State to the plan. 

25 ‘‘(c) AMOUNT, DURATION, AND SCOPE.—The State 

26 plan shall provide that the acute care medical assistance 


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1 made available to any eligible individual shall not be less 

2 in amount, duration, or scope than the acute care medical 

3 assistance made available to any other eligible individual. 

4 ‘‘(d) APPLICATION OF CERTAIN PRE-MODERNIZED

5 MEDICAID REQUIREMENTS.— 

6 ‘‘(1) OLD STATE PLAN REQUIREMENTS.—The 

7 following provisions of old section 1902 shall apply 

8 to the State plans under this part: 

9 ‘‘(A) Old section 1902(a)(10)(C) (relating 

10 to certain eligibility and other requirements). 

11 ‘‘(B) Old section 1902(a)(10)(D) (relating 

12 to home health services). 

13 ‘‘(C) Old section 1902(a)(10)(G) (relating 

14 to nonapplication of certain supplemental secu15 rity income eligibility criteria). 

16 ‘‘(D) The subclauses in the flush matter 

17 following old section 1902(a)(10)(G) (relating 

18 to the provision of certain services) other than 

19 subclauses (V), (VII), (VIII), and (IX). 

20 ‘‘(E) Old section 1902(a)(17) (relating to 

21 reasonable standards for determining eligi22 bility). 

23 ‘‘(F) Old section 1902(a)(19) (relating to 

24 eligibility safeguards). 


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1 ‘‘(G) Old section 1902(a)(34) (relating to 

2 eligibility beginning with the third month prior 

3 to the month of application). 

4 ‘‘(H) Subparagraphs (A), (B), and (C) of 

5 old section 1902(a)(43) (relating to early and 

6 periodic screening, diagnostic, and treatment 

7 services). 

8 ‘‘(I) Old section 1902(a)(46)(A) (relating 

9 to compliance with section 1137 requirements). 

10 ‘‘(J) The fourth and sixth sentences of old 

11 section 1902(a) (relating to eligibility for cer12 tain individuals). 

13 ‘‘(2) OTHER OLD TITLE XIX REQUIREMENTS.— 

14 ‘‘(A) Old section 1902(e)(3) (relating to 

15 optional eligibility for certain disabled individ16 uals). 

17 ‘‘(B) Old section 1902(e)(9) (relating to 

18 optional respiratory care services). 

19 ‘‘(C) Old section 1902(f) (relating to eligi20 bility of certain aged, blind, or disabled individ21 uals). 

22 ‘‘(D) Old section 1902(m) (relating to eli23 gibility of certain aged or disabled individuals), 

24 other than paragraph (4). 


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1 ‘‘(E) Old section 1902(o) (relating to dis2 regard of certain supplemental security income 

3 benefits). 

4 ‘‘(F) Old section 1902(v) (relating to eligi5 bility determinations of blind or disabled indi6 viduals). 

7 ‘‘(e) OTHER REQUIREMENTS.—The State plan under 

8 this part shall— 

9 ‘‘(1) comply with the requirements of the other 

10 parts of this title; and 

11 ‘‘(2) provide that the State will make the con12 tributions specified under section 340A–1(e) of the 

13 Public Health Service Act . 

14 ‘‘SEC. 1905. DEFINITIONS. 

15 ‘‘(a) IN GENERAL.—The definitions specified in this 

16 section shall apply for purposes of this part and, to the 

17 extent applicable and consistent with the policy embodied 

18 in such part, parts B, C, D, E, and F. 

19 ‘‘(b) FEDERAL MEDICAL ASSISTANCE PERCENT20 AGE.—The term ‘Federal medical assistance percentage’ 

21 for any State shall be 100 percent less the State percent22 age; and the State percentage shall be that percentage 

23 which bears the same ratio to 45 percent as the square 

24 of the per capita income of such State bears to the square 

25 of the per capita income of the continental United States 


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1 (including Alaska) and Hawaii, except that the Federal 

2 medical assistance percentage shall in no case be less than 

3 50 percent or more than 83 percent. The Federal medical 

4 assistance percentage for any State shall be determined 

5 and promulgated in accordance with the provisions of sec6 tion 1101(a)(8)(B). 

7 ‘‘(c) APPLICATION OF CERTAIN PRE-MODERNIZED

8 MEDICAID PROVISIONS.—The following old provisions 

9 shall apply under this part: 

10 ‘‘(1) OLD SECTION 1905 PROVISIONS.—The fol11 lowing provisions of old section 1905: 

12 ‘‘(A) Old section 1905(d) (relating to the 

13 definition of an intermediate care facility for 

14 the mentally retarded). 

15 ‘‘(B) Old section 1905(e) (relating to the 

16 definition of physicians services). 

17 ‘‘(C) Old section 1905(f) (relating to the 

18 definition of nursing facility services). 

19 ‘‘(D) Old section 1905(g) (relating to the 

20 provision of chiropractors’ services). 

21 ‘‘(E) Old section 1905(j) (relating to State 

22 supplementary payments). 

23 ‘‘(F) Old section 1905(k) (relating to sup24 plemental security income benefits payable pur25 suant to section 211 of Public Law 93–66). 


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1 ‘‘(G) Old section 1905(l)(1) (relating to 

2 rural health clinic services). 

3 ‘‘(H) Old section 1905(o) (relating to hos4 pice care). 

5 ‘‘(I) Old section 1905(q) (relating to the 

6 definition of a qualified severely impaired indi7 vidual). 

8 ‘‘(J) Old section 1905(r) (relating to the 

9 definition of early and periodic screening, diag10 nostic, and treatment services). 

11 ‘‘(K) Old section 1905(s) (relating to the 

12 definition of a qualified disabled and working 

13 individual). 

14 ‘‘(L) Old section 1905(t) (relating to the 

15 definition of primary care case management 

16 services). 

17 ‘‘(M) Old section 1905(v) (relating to the 

18 definition of an employed individual with a 

19 medically improved disability). 

20 ‘‘(N) Paragraphs (1) and (3) of old section 

21 1905(w) (relating to the definition of an inde22 pendent foster care adolescent). 

23 ‘‘(O) Old section 1905(x) (relating to 

24 strategies, treatment, and services for individ25 uals with Sickle Cell Disease). 


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1 ‘‘(2) OTHER OLD PROVISIONS.— 

2 ‘‘(A) Old section 1903(m) (relating to the 

3 definition of a medicaid managed care organiza4 tion). 

5 ‘‘SEC. 1906. ENROLLMENT OF INDIVIDUALS UNDER GROUP 

6 HEALTH PLANS AND OTHER ARRANGEMENTS. 

7 ‘‘The following old provisions shall apply under this 

8 part: 

9 ‘‘(1) Old section 1906 (relating to enrollment of 

10 individuals under group health plans). 

11 ‘‘(2) Old section 1902(a)(70) (relating to State 

12 option to establish a non-emergency medical trans13 portation brokerage program). 

14 ‘‘(3) Paragraphs (2) and (11) of old section 

15 1902(e) (relating to eligibility for individuals en16 rolled with a group health plan or under a managed 

17 care arrangement during a minimum enrollment pe18 riod). 

19 ‘‘SEC. 1907. DRUG REBATES. 

20 ‘‘Old sections 1902(a)(54) and 1927 (relating to pay21 ment for covered outpatient drugs and rebates) shall apply 

22 under this part. 

23 ‘‘SEC. 1908. MANAGED CARE. 

24 ‘‘The following old provisions shall apply under this 

25 part: 


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1 ‘‘(1) Old section 1932 (relating to managed 

2 care), other than subsection (a)(2) of such section. 

3 ‘‘(2) Old section 1903(k) (relating to technical 

4 and actuarial assistance for States). 

5 ‘‘SEC. 1909. ANNUAL REPORTS. 

6 ‘‘(a) IN GENERAL.—Each State that receives pay7 ments under this part shall submit an annual report to 

8 the Secretary, in such form and manner as the Secretary 

9 shall specify. 

10 ‘‘(b) APPLICATION OF OLD EPSDT REPORTING RE11 QUIREMENTS.—Each annual report shall include the in12 formation required to be reported under old section 

13 1902(a)(43)(D)(iv). 

14 ‘‘PART B—GRANTS TO STATES FOR LONG-TERM 

15 CARE SERVICES AND SUPPORTS 

16 ‘‘SEC. 1911. PURPOSE. 

17 ‘‘(a) IN GENERAL.—The purpose of this part is to 

18 increase the flexibility of States in operating a system of 

19 long-term care services and supports designed to— 

20 ‘‘(1) provide assistance to needy families so that 

21 individuals with disabilities and low-income senior 

22 citizens may be served and supported in their own 

23 homes and communities; 

24 ‘‘(2) emphasize the independence and dignity of 

25 the person served by public programs; 


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1 ‘‘(3) end the institutional bias that existed 

2 under the Medicaid program prior to January 1, 

3 2011; 

4 ‘‘(4) provide stable and predictable funding for 

5 States as they rebalance their long-term care sys6 tems from institutions to communities; 

7 ‘‘(5) provide flexibility to States to adopt new 

8 and innovative service delivery methods; and 

9 ‘‘(6) promote independence and support activi10 ties that will enable individuals to return or main11 tain ties to the community, including through em12 ployment. 

13 ‘‘(b) NO INDIVIDUAL ENTITLEMENT.—No individual 

14 determined eligible for long-term care services and sup15 ports under this part shall be entitled to a specific service 

16 or type of delivery of service. 

17 ‘‘SEC. 1912. STATE PLAN. 

18 ‘‘(a) IN GENERAL.—In order to receive payments 

19 under this part, a State must have an approved State plan 

20 for long-term care services and supports. A State long 

21 term care services and supports plan shall include a de22 scription, consistent with the requirements of this part, 

23 of— 


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1 ‘‘(1) income and assets eligibility standards and 

2 spousal impoverishment protections consistent with 

3 subsection (b); 

4 ‘‘(2) the standardized assessments tools used to 

5 determine eligibility for specific long-term care serv6 ices and supports; 

7 ‘‘(3) the person-centered plans used to provide 

8 such services and supports; 

9 ‘‘(4) the proposed uses of funding, if applicable, 

10 to provide targeted methods to meet individual level 

11 of support needs including tiering (preventive, emer12 gency, low, medium, high); and 

13 ‘‘(5) the long-term care services and supports to 

14 be available under the plan based on individual as15 sessment of need in accordance with sections 1916 

16 and 1917. 

17 ‘‘(b) MINIMUM ELIGIBILITY STANDARDS.— 

18 ‘‘(1) POPULATIONS COVERED.—The State plan 

19 shall specify the disabled and elderly populations 

20 who are eligible for long-term care services and sup21 ports. 

22 ‘‘(2) NEEDS-BASED CRITERIA.—The plan shall 

23 include a description of the needs-based criteria the 

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1 cific services and supports available under the State 

2 plan. 

3 ‘‘(3) OTHER ELIGIBILITY REQUIREMENTS.— 

4 ‘‘(A) INCOME AND ASSETS.—A State may 

5 use different income and asset standards and 

6 methodologies for determining eligibility than 

7 those used for determining eligibility for acute 

8 care medical assistance under part A. A State 

9 may not make eligibility standards related to 

10 income, asset, and spousal impoverishment pro11 tection more restrictive than the Federal min12 imum requirements of December 31, 2008. 

13 ‘‘(B) APPLICATION OF SPOUSAL IMPOVER14 ISHMENT PROTECTIONS.—The State plan shall 

15 provide that the State shall comply with the re16 quirements of section 1918 (relating to spousal 

17 impoverishment protections). 

18 ‘‘(C) STATEWIDENESS.—The State plan 

19 shall provide that, except with respect to meth20 ods used for determining homestead exemp21 tions, the income and asset standards and 

22 methodologies shall be in effect in all political 

23 subdivisions of the State. 

24 ‘‘(4) TRANSITION ASSISTANCE.—The State plan 

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1 sistance for individuals who, on December 31, 2010, 

2 are enrolled under the State plan under old title 

3 XIX (or under a waiver of that plan) and receiving 

4 long-term care services or supports on that date. 

5 The State shall provide such assistance to individ6 uals who are and are not likely to be determined eli7 gible for long-term care services and supports under 

8 the State plan under this part, as in effect on Janu9 ary 1, 2011 (or the first day on which the State plan 

10 is in effect under this part). 

11 ‘‘(c) PAYMENT METHODOLOGIES TO PROVIDERS.— 

12 ‘‘(1) IN GENERAL.—The State plan shall de13 scribe the methodologies used to determine payments 

14 to providers. Such methodologies— 

15 ‘‘(A) may be varied to assist in 

16 transitioning from facilities-based to commu17 nity-based care; and 

18 ‘‘(B) shall not be subject to Secretarial ap19 proval. 

20 ‘‘(2) TRANSPARENCY.—The State plan shall 

21 provide that the State shall make publicly avail22 able— 

23 ‘‘(A) the payment methodologies applicable 

24 under the plan; and 


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1 ‘‘(B) the name of any provider that re2 ceives $1,000,000 or more in any 12-month pe3 riod and the actual amount paid to the provider 

4 during that period. 

5 ‘‘(d) COORDINATION OF EFFORT WITH OTHER RE6 LATED PUBLIC AND PRIVATE PROGRAMS.—The plan shall 

7 include a description of the State’s efforts to coordinate 

8 the delivery of services and supports under the plan with 

9 other related public and private programs that serve indi10 viduals with disabilities or aged populations that need or 

11 may be at risk of needing long term care. 

12 ‘‘(e) PUBLIC AVAILABILITY OF STATE PLAN.—The 

13 State shall make available to the public the State plan 

14 under this part and any amendments submitted by the 

15 State to the plan. 

16 ‘‘(f) APPLICATION OF OLD TITLE XIX REQUIRE17 MENTS.—The following old title XIX provisions shall 

18 apply to a State plan under this part: 

19 ‘‘(1) Subsections (a)(50) and (q) of old section 

20 1902 (relating to a monthly personal needs allow21 ance for certain institutionalized individuals and 

22 couples). 

23 ‘‘(2) Old section 1902(a)(67) (relating to pay24 ment for certain services furnished to a PACE pro25 gram eligible individual). 


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1 ‘‘(3) Paragraph (1) of old section 1902(r) (re2 lating to the post-eligibility treatment of income for 

3 certain individuals) and paragraph (2) of such sec4 tion (relating to methodologies for determining in5 come and resource eligibility for individuals, but only 

6 with respect to individuals who are eligible under 

7 this part on or after January 1, 2011). 

8 ‘‘(4) Old section 1905(i) (relating to the defini9 tion of an institution for mental diseases). 

10 ‘‘(g) OTHER REQUIREMENTS OF OTHER PARTS.— 

11 The State plan under this part shall— 

12 ‘‘(1) comply with the requirements of the other 

13 parts of this title; and 

14 ‘‘(2) provide that the State will make the con15 tributions specified under section 340A–1(e) of the 

16 Public Health Service Act. 

17 ‘‘SEC. 1913. STATE ALLOTMENTS. 

18 ‘‘(a) APPROPRIATION.—For the purpose of providing 

19 allotments to States under this section, there is appro20 priated out of any money in the Treasury not otherwise 

21 appropriated— 

22 ‘‘(1) for fiscal year 2011, $65,274,560,000; 

23 ‘‘(2) for fiscal year 2012, $67,885,540,000; 

24 ‘‘(3) for fiscal year 2013, $70,600,964,100; 

25 ‘‘(4) for fiscal year 2014, $73,425,000,000; 


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1 ‘‘(5) for fiscal year 2015, $76,362,000,000; 

2 ‘‘(6) for fiscal year 2016, $79,416,480,000; 

3 ‘‘(7) for fiscal year 2017, $82,593,140,000; 

4 ‘‘(8) for fiscal year 2018, $85,896,870,000; and 

5 ‘‘(9) for fiscal year 2019, $89,332,743,000. 

6 ‘‘(b) ALLOTMENTS TO 50 STATES AND THE DISTRICT

7 OF COLUMBIA.— 

8 ‘‘(1) FISCAL YEAR 2011 ALLOTMENTS.—Subject 

9 to subsection (e), the Secretary shall allot to each 

10 State with a long term care plan approved under 

11 this title an amount in fiscal year 2011 equal to the 

12 Federal expenditures made by the State for long13 term care as defined in section 1916 in fiscal year 

14 2008, increased by 8 percent. 

15 ‘‘(2) SUBSEQUENT FISCAL YEAR ALLOT16 MENTS.—For fiscal year 2012 and each subsequent 

17 fiscal year through fiscal year 2019, the allotment 

18 for a State under this section is equal to the allot19 ment for the State determined for the preceding fis20 cal year, increased by 4 percent. 

21 ‘‘(c) LIMITATION.— 

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), no other Federal funds are available 

24 under this title for expenditures incurred for long25 term care services and supports after December 31, 


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1 2010, except as provided under a State plan ap2 proved under this part. 

3 ‘‘(2) EXCEPTION.— 

4 ‘‘(A) IN GENERAL.—If a State does not 

5 have an approved State plan by October 1, 

6 2010, the Secretary may make payments equal 

7 to 85 percent of the State’s estimated quarterly 

8 allotment until June 30, 2011. 

9 ‘‘(B) FULL FUNDING.—A State shall re10 ceive 100 percent of its allotment for fiscal year 

11 2011 if the State has a plan approved under 

12 this part by June 30, 2011. 

13 ‘‘(d) MAINTENANCE OF EFFORT.—In order to qualify 

14 for the grant payable under this section, the State must 

15 demonstrate in each fiscal year that it made long-term 

16 care service and supports expenditures (including funding 

17 from local government sources) equal to the amount of 

18 not less than 95 percent of the nonfederal share amount 

19 spent in fiscal year 2009 under the State plan under old 

20 title XIX on long term care services and supports (as de21 fined in section 1916). Expenditures not made under this 

22 part shall not be recognized by the Secretary for purposes 

23 of this requirement. 

24 ‘‘(e) GRANTS REDUCED IF INSUFFICIENT APPRO25 PRIATIONS.— 


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1 ‘‘(1) IN GENERAL.—If the amount appropriated 

2 for fiscal year 2011 under subsection (a)(1) is less 

3 than the amount necessary to fund each State’s al4 lotment for that fiscal year, the Secretary shall re5 duce the allotment for each State for that fiscal year 

6 based on the applicable percentage determined for 

7 the State under paragraph (2). 

8 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

9 of paragraph (1), the applicable percentage deter10 mined with respect to a State is as follows: 

‘‘If the ratio of the State’s non-institutional 

spending to total long-term care spending 

for fiscal year 2009 is: 

The applicable 

percentage is: 

50 percent or greater ............................................. 100 

at least 46, but less than 50 percent ..................... 99 

at least 40, but less than 46 percent ..................... 98 

at least 36, but less than 40 .................................. 97 

at least 30, but less than 36 .................................. 96 

less than 30 percent ............................................... 95. 

11 ‘‘(f) ADMINISTRATIVE EXPENSES.— 

12 ‘‘(1) IN GENERAL.—Each State with a plan ap13 proved under this part shall receive a payment deter14 mined in accordance with amounts appropriated for 

15 part E for administrative expenses incurred in car16 rying out the plan under this part and part A. 

17 ‘‘(2) ASSESSMENT-RELATED COSTS.—Costs at18 tributable to providing an individualized needs-based 

19 assessment for purposes of identifying the long-term 

20 care services and supports to be provided under the 

21 State plan to an individual shall be considered a 


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1 long-term care service and support and shall not be 

2 treated as an administrative expense. 

3 ‘‘SEC. 1914. USE OF GRANTS. 

4 ‘‘(a) IN GENERAL.—A State shall use funds for long5 term care services and supports as defined in section 

6 1916. 

7 ‘‘(b) SELF-DIRECTION.—A State shall offer individ8 uals the opportunity to self-direct their long-term care 

9 services and supports. 

10 ‘‘SEC. 1915. ADMINISTRATIVE PROVISIONS. 

11 ‘‘(a) FUNDING ON A QUARTERLY BASIS.—The Sec12 retary shall make payments to States in equal amounts 

13 of a State’s annual allotment on a quarterly basis. Each 

14 quarterly payment shall remain available for use by the 

15 State for twelve succeeding fiscal year quarters. 

16 ‘‘(b) PUBLICATION.—The Secretary shall publish 

17 each State’s allotment— 

18 ‘‘(1) for fiscal year 2011 not later than Decem19 ber 15, 2009; and 

20 ‘‘(2) for each subsequent fiscal year, not later 

21 than December 15 of the calendar year preceding 

22 the calendar year in which the fiscal year begins. 

23 ‘‘SEC. 1916. DEFINITION OF LONG-TERM CARE SERVICES 

24 AND SUPPORTS. 

25 ‘‘(a) DEFINITION.— 


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1 ‘‘(1) IN GENERAL.—Subject to subsection (e), 

2 in this part, the term ‘long-term care services and 

3 supports’ means any of the services or supports 

4 specified in paragraphs (2) or (3) that may be pro5 vided in a nursing facility, an institution, a home, or 

6 other setting. 

7 ‘‘(2) SERVICES AND SUPPORTS DESCRIBED.— 

8 For purposes of paragraph (1), the services and sup9 ports described in this paragraph include assistive 

10 technology, adaptive equipment, remote monitoring 

11 equipment, case management for the aged, case 

12 management for individuals with disabilities, nursing 

13 home services, long-term rehabilitative services nec14 essary to restore functional abilities, services pro15 vided in intermediate care facilities for people with 

16 disabilities, habilitation services (including adult day 

17 care programs), community treatment teams for in18 dividuals with mental illness, home health services, 

19 services provided in an institution for mental dis20 ease, a Program of All-Inclusive Care for the Elderly 

21 (PACE), personal care (including personal assist22 ance services), recovery support including peer coun23 seling, supportive employment, training skills nec24 essary to assist the individual in achieving or main25 taining independence, training of family members inVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 cluding foster parents in supportive and behavioral 

2 modification skills, ongoing and periodic training to 

3 maintain life skills, transitional care including room 

4 and board not to exceed 60 days within a 12-month 

5 period. 

6 ‘‘(3) INCLUSION OF CERTAIN BENEFITS UNDER

7 OLD TITLE XIX.—Such services and supports may 

8 include any of the following services: 

9 ‘‘(A) Old section 1905(a)(15) (relating to 

10 services in an intermediate care facility for the 

11 mentally retarded). 

12 ‘‘(B) Services described in subsections 

13 (a)(16) and (h) of old section 1905, but without 

14 regard to any restriction on such services on 

15 the basis of age (relating to inpatient psy16 chiatric hospital services). 

17 ‘‘(C) Old section 1905(a)(22) (relating to 

18 home and community care (to the extent al19 lowed and as defined in old section 1929) for 

20 functionally disabled elderly individuals). 

21 ‘‘(D) Old section 1905(a)(23) (relating to 

22 community supported living arrangements serv23 ices (to the extent allowed and as defined in old 

24 section 1930)). 


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1 ‘‘(E) Subject to subsection (e), old section 

2 1905(a)(24) but without regard to any restric3 tion on furnishing services to patients or resi4 dents of facilities or institutions (relating to 

5 personal care services). 

6 ‘‘(F) Old sections 1905(a)(26) and 1934 

7 (relating to services furnished under a PACE 

8 program under old section 1934 to PACE pro9 gram eligible individuals enrolled under the pro10 gram under such old section). 

11 ‘‘(G) Old section 1915(c)(5) (relating to 

12 the definition of habilitation services). 

13 ‘‘(4) LIMITATION.—Long-term care services 

14 and supports cannot be used for services and admin15 istrative costs provided through the foster care (with 

16 the exception of training of foster care parents), 

17 child welfare, adult protective services, juvenile jus18 tice, public guardianship, or correctional systems. 

19 ‘‘(b) REHABILITATIVE CARE.—For purposes of reha20 bilitation due to acute care medical needs, a State may 

21 claim rehabilitative services provided in an institutional 

22 setting, nursing home, or as part of home health expendi23 tures as acute care benefits under the State plan under 

24 part A rather than under the State plan under this part 

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1 riod if such care is directly related to the onset of an acute 

2 care need. A State shall demonstrate the services were 

3 provided as a direct result of an acute care need. 

4 ‘‘(c) MANAGED CARE.—If a State provides long-term 

5 care services and supports through managed care, the 

6 State shall submit a methodology for determining the level 

7 of expenditures attributed to long term care for approval 

8 by the Secretary. 

9 ‘‘(d) APPLICATION OF PART A DEFINITIONS.—A def10 inition specified in section 1905 shall apply to the same 

11 term used in this part, unless the Secretary determines 

12 that the application of such definition would be incon13 sistent with the purpose of this part. 

14 ‘‘(e) EXCLUSION.—No payments shall be made under 

15 the State plan under this part with respect to long-term 

16 care supports and services provided for any individual who 

17 is an inmate of a public institution. Nothing in the pre18 ceding sentence shall be construed as precluding the provi19 sion of long-term care services and supports under the 

20 State plan under this part to an individual who is a pa21 tient in an institution for mental diseases. 


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1 ‘‘SEC. 1917. PROVISION REQUIREMENTS FOR LONG-TERM 

2 CARE SERVICES AND SUPPORT, INCLUDING 

3 OPTION FOR SELF-DIRECTED SERVICES AND 

4 SUPPORTS. 

5 ‘‘(a) REQUIREMENTS FOR THE PROVISION OF LONG6 TERM CARE SERVICES AND SUPPORTS.— 

7 ‘‘(1) IN GENERAL.—Subject to the succeeding 

8 provisions of this subsection, a State may provide 

9 through a State plan amendment for the provision 

10 of long-term care services and supports for individ11 uals eligible under the State plan under this part, 

12 subject to the following requirements: 

13 ‘‘(A) NEEDS-BASED CRITERIA FOR ELIGI14 BILITY FOR, AND RECEIPT OF, LONG-TERM

15 CARE SERVICES AND SUPPORTS.—The State es16 tablishes needs-based criteria for determining 

17 an individual’s eligibility under the State plan 

18 for medical assistance for such long-term care 

19 services and supports, and if the individual is 

20 eligible for such services and supports, the spe21 cific services and supports that will be available 

22 under the State plan to the individual. 

23 ‘‘(B) CRITERIA FOR INSTITUTIONALIZED

24 VERSUS NON-INSTITUTIONALIZED SERVICES.— 

25 In establishing needs-based criteria, the State 

26 may establish criteria for determining eligibility 


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1 for, and receipt of, services and supports pro2 vided in a facility or institution that are more 

3 stringent that the criteria established for eligi4 bility and receipt of services and supports in a 

5 non-facility or non-institutionalized setting. 

6 ‘‘(C) AUTHORITY TO LIMIT NUMBER OF

7 ELIGIBLE INDIVIDUALS.—A State may limit the 

8 number of individuals who are eligible for such 

9 services and supports and may establish waiting 

10 lists for the receipt of such services and sup11 ports. 

12 ‘‘(D) CRITERIA BASED ON INDIVIDUAL AS13 SESSMENT.— 

14 ‘‘(i) IN GENERAL.—The criteria estab15 lished by the State shall require an assess16 ment of an individual’s support needs and 

17 capabilities, and may take into account the 

18 inability of the individual to perform 2 or 

19 more activities of daily living (as defined in 

20 section 7702B(c)(2)(B) of the Internal 

21 Revenue Code of 1986) or the need for sig22 nificant assistance to perform such activi23 ties, and such other risk factors as the 

24 State determines to be appropriate. 


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1 ‘‘(ii) ADJUSTMENT AUTHORITY.—The 

2 State plan amendment provides the State 

3 with the option to modify the criteria es4 tablished under subparagraph (A) (without 

5 having to obtain prior approval from the 

6 Secretary) in the event that the enrollment 

7 of individuals eligible for services exceeds 

8 the projected enrollment, but only if— 

9 ‘‘(I) the State provides at least 

10 60 days notice to the Secretary and 

11 the public of the proposed modifica12 tion; 

13 ‘‘(II) the State deems an indi14 vidual receiving long-term care serv15 ices and supports on the basis of the 

16 most recent version of the criteria in 

17 effect prior to the effective date of the 

18 modification to be eligible for such 

19 services and supports for a period of 

20 at least 12 months beginning on the 

21 date the individual first received med22 ical assistance for such services and 

23 supports; and 

24 ‘‘(III) after the effective date of 

25 such modification, the State, at a 


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1 minimum, applies the criteria for de2 termining whether an individual re3 quires the level of care provided in a 

4 facility or institutionalized setting 

5 which applied under the State plan 

6 immediately prior to the application of 

7 the modified criteria. 

8 ‘‘(E) INDEPENDENT EVALUATION AND AS9 SESSMENT.— 

10 ‘‘(i) ELIGIBILITY DETERMINATION.— 

11 The State uses an independent evaluation 

12 for making the determinations described in 

13 subparagraph (A). 

14 ‘‘(ii) ASSESSMENT.—In the case of an 

15 individual who is determined to be eligible 

16 for long-term care services and supports, 

17 the State uses an independent assessment, 

18 based on the needs of the individual to— 

19 ‘‘(I) determine a necessary level 

20 of services and supports to be pro21 vided, consistent with an individual’s 

22 physical and mental capacity; 

23 ‘‘(II) prevent the provision of un24 necessary or inappropriate care; and 


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•S 1099 IS

1 ‘‘(III) establish an individualized 

2 care plan for the individual in accord3 ance with subparagraph (G). 

4 ‘‘(F) ASSESSMENT.—The independent as5 sessment required under subparagraph (E)(ii) 

6 shall include the following: 

7 ‘‘(i) An objective evaluation of an in8 dividual’s inability to perform 2 or more 

9 activities of daily living (as defined in sec10 tion 7702B(c)(2)(B) of the Internal Rev11 enue Code of 1986) or the need for signifi12 cant assistance to perform such activities. 

13 ‘‘(ii) A face-to-face evaluation of the 

14 individual by an individual trained in the 

15 assessment and evaluation of individuals 

16 whose physical or mental conditions trigger 

17 a potential need for long-term care services 

18 and supports. 

19 ‘‘(iii) Where appropriate, consultation 

20 with the individual’s family, spouse, guard21 ian, or other responsible individual. 

22 ‘‘(iv) Consultation with appropriate 

23 treating and consulting health and support 

24 professionals caring for the individual. 


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1 ‘‘(v) An examination of the individ2 ual’s relevant history, medical records, and 

3 care and support needs, guided by best 

4 practices and research on effective strate5 gies that result in improved health and 

6 quality of life outcomes. 

7 ‘‘(vi) An evaluation of the ability of 

8 the individual or the individual’s represent9 ative to self-direct the purchase of, or con10 trol the receipt of, such services and sup11 ports if the individual so elects. 

12 ‘‘(G) INDIVIDUALIZED CARE PLAN.— 

13 ‘‘(i) IN GENERAL.—In the case of an 

14 individual who is determined to be eligible 

15 for long-term care services and supports, 

16 the State uses the independent assessment 

17 required under subparagraph (E)(ii) to es18 tablish a written individualized care plan 

19 for the individual. 

20 ‘‘(ii) PLAN REQUIREMENTS.—The 

21 State ensures that the individualized care 

22 plan for an individual— 

23 ‘‘(I) is developed— 

24 ‘‘(aa) in consultation with 

25 the individual, the individual’s 


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•S 1099 IS

1 treating physician, health care or 

2 support professional, or other ap3 propriate individuals, as defined 

4 by the State, and, where appro5 priate the individual’s family, 

6 caregiver, or representative; and 

7 ‘‘(bb) taking into account 

8 the extent of, and need for, any 

9 family or other supports for the 

10 individual; 

11 ‘‘(II) identifies the long-term care 

12 services and supports to be furnished 

13 to the individual (or, if the individual 

14 elects to self-direct the purchase of, or 

15 control the receipt of, such services 

16 and supports, funded for the indi17 vidual); and 

18 ‘‘(III) is reviewed at least annu19 ally and as needed when there is a 

20 significant change in the individual’s 

21 circumstances. 

22 ‘‘(iii) STATE REQUIREMENT TO OFFER

23 ELECTION FOR SELF-DIRECTED SERVICES

24 AND SUPPORTS.— 


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1 ‘‘(I) INDIVIDUAL CHOICE.—The 

2 State shall allow an individual or the 

3 individual’s representative the oppor4 tunity to elect to receive self-directed 

5 long-term care services and supports 

6 in a manner which gives them the 

7 most control over such services and 

8 supports consistent with the individ9 ual’s abilities and the requirements of 

10 subclauses (II) and (III). 

11 ‘‘(II) SELF-DIRECTED.—The 

12 term ‘self-directed’ means, with re13 spect to the long-term care services 

14 and supports offered under the State 

15 plan amendment, such services and 

16 supports for the individual which are 

17 planned and purchased under the di18 rection and control of such individual 

19 or the individual’s authorized rep20 resentative, including the amount, du21 ration, scope, provider, and location of 

22 such services and supports, under the 

23 State plan consistent with the fol24 lowing requirements: 


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•S 1099 IS

1 ‘‘(aa) ASSESSMENT.—There 

2 is an assessment of the needs, ca3 pabilities, and preferences of the 

4 individual with respect to such 

5 services and supports. 

6 ‘‘(bb) SERVICE PLAN.— 

7 Based on such assessment, there 

8 is developed jointly with such in9 dividual or the individual’s au10 thorized representative a plan for 

11 such services and supports for 

12 such individual that is approved 

13 by the State and that satisfies 

14 the requirements of subclause 

15 (III). 

16 ‘‘(III) PLAN REQUIREMENTS.— 

17 For purposes of subclause (II)(bb), 

18 the requirements of this subclause are 

19 that the plan— 

20 ‘‘(aa) specifies those services 

21 and supports which the individual 

22 or the individual’s authorized 

23 representative would be respon24 sible for directing; 


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1 ‘‘(bb) identifies the methods 

2 by which the individual or the in3 dividual’s authorized representa4 tive will select, manage, and dis5 miss providers of such services 

6 and supports; 

7 ‘‘(cc) specifies the role of 

8 family members and others whose 

9 participation is sought by the in10 dividual or the individual’s au11 thorized representative with re12 spect to such services and sup13 ports; 

14 ‘‘(dd) is developed through a 

15 person-centered process that is 

16 directed by the individual or the 

17 individual’s authorized represent18 ative, builds upon the individual’s 

19 capacity to engage in activities 

20 that promote community life and 

21 that respects the individual’s 

22 preferences, choices, and abilities, 

23 and involves families, friends, 

24 and professionals as desired or 

25 required by the individual or the 


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•S 1099 IS

1 individual’s authorized represent2 ative; 

3 ‘‘(ee) includes appropriate 

4 risk management techniques that 

5 recognize the roles and sharing of 

6 responsibilities in obtaining serv7 ices and supports in a self-di8 rected manner and assure the ap9 propriateness of such plan based 

10 upon the resources and capabili11 ties of the individual or the indi12 vidual’s authorized representa13 tive; and 

14 ‘‘(ff) may include an individ15 ualized budget which identifies 

16 the dollar value of the services 

17 and supports under the control 

18 and direction of the individual or 

19 the individual’s authorized rep20 resentative. 

21 ‘‘(IV) BUDGET PROCESS.—With 

22 respect to individualized budgets de23 scribed in subclause (III)(ff), the 

24 State plan amendment— 


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1 ‘‘(aa) describes the method 

2 for calculating the dollar values 

3 in such budgets based on reliable 

4 costs and service utilization; 

5 ‘‘(bb) defines a process for 

6 making adjustments in such dol7 lar values to reflect changes in 

8 individual assessments and serv9 ice plans; and 

10 ‘‘(cc) provides a procedure 

11 to evaluate expenditures under 

12 such budgets. 

13 ‘‘(H) QUALITY ASSURANCE; CONFLICT OF

14 INTEREST STANDARDS.— 

15 ‘‘(i) QUALITY ASSURANCE.—The 

16 State ensures that the provision of long17 term care services and supports meets 

18 Federal and State guidelines for quality 

19 assurance. 

20 ‘‘(ii) CONFLICT OF INTEREST STAND21 ARDS.—The State establishes standards 

22 for the conduct of the independent evalua23 tion and the independent assessment to 

24 safeguard against conflicts of interest. 


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1 ‘‘(I) REDETERMINATIONS AND APPEALS.— 

2 The State allows for at least annual redeter3 minations of eligibility, and appeals in accord4 ance with the frequency of, and manner in 

5 which, redeterminations and appeals of eligi6 bility are made under the State plan. 

7 ‘‘(J) PRESUMPTIVE ELIGIBILITY FOR AS8 SESSMENT.—The State, at its option, elects to 

9 provide for a period of presumptive eligibility 

10 (not to exceed a period of 60 days) only for 

11 those individuals that the State has reason to 

12 believe may be eligible for long-term care serv13 ices and supports. Such presumptive eligibility 

14 shall be limited to medical assistance for car15 rying out the independent evaluation and as16 sessment under subparagraph (E) to determine 

17 an individual’s eligibility for such services and 

18 if the individual is so eligible, the specific long19 term care services and supports that the indi20 vidual will receive. 

21 ‘‘(2) DEFINITION OF INDIVIDUAL’S REP22 RESENTATIVE.—In this section, the term ‘individ23 ual’s representative’ means, with respect to an indi24 vidual, a parent, a family member, or a guardian of 

25 the individual, an advocate for the individual, or any 


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•S 1099 IS

1 other individual who is authorized to represent the 

2 individual. 

3 ‘‘(b) SELF-DIRECTED PERSONAL ASSISTANCE SERV4 ICES.—If a State includes personal care or personal assist5 ance services in the long-term care services and supports 

6 available under the State plan, the State shall comply with 

7 the requirements of old section 1915(j) in the case of an 

8 individual who elects to self-direct the receipt of such care 

9 or services. 

10 ‘‘SEC. 1918. TREATMENT OF INCOME AND RESOURCES FOR 

11 CERTAIN INSTITUTIONALIZED SPOUSES. 

12 ‘‘Old section 1924 (relating to treatment of income 

13 and resources for certain institutionalized spouses), other 

14 than paragraphs (2) and (4)(A) of subsection (a) of such 

15 section, shall apply under this part. 

16 ‘‘SEC. 1919. ANNUAL REPORTS. 

17 ‘‘(a) IN GENERAL.—Each State that receives pay18 ments under this part shall submit an annual report to 

19 the Secretary, in such form and manner as the Secretary 

20 shall specify. 

21 ‘‘(b) REQUIREMENTS.—The report shall include the 

22 following with respect to the most recent fiscal year ended: 

23 ‘‘(1) The number of individuals served under 

24 the plan. 


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•S 1099 IS

1 ‘‘(2) The number of individuals served by tier 

2 (preventive, emergency, low, medium, and high 

3 needs). 

4 ‘‘(3) The number of individuals known to the 

5 State on waiting list for services (if any) and type 

6 of disability (physical, developmental, mental health) 

7 or aged. 

8 ‘‘(4) Expenditures by service category. 

9 ‘‘PART C—GRANTS TO STATES FOR SURVEY AND 

10 CERTIFICATION OF MEDICAL FACILITIES 

11 AND OTHER REQUIREMENTS 

12 ‘‘SEC. 1931. AUTHORIZATION OF APPROPRIATIONS. 

13 ‘‘For the purpose of carrying our Federal activities 

14 and providing grants to States for expenses necessary to 

15 carry out this part, there is authorized to be appro16 priated— 

17 ‘‘(1) for fiscal year 2011, $300,000,000; and 

18 ‘‘(2) for each succeeding fiscal year, the amount 

19 authorized under this section for the preceding fiscal 

20 year, increased by 5 percent. 

21 ‘‘SEC. 1932. APPLICATION OF CERTAIN REQUIREMENTS 

22 UNDER PRE-MODERNIZED MEDICAID. 

23 ‘‘The following old provisions shall apply under this 

24 part: 


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1 ‘‘(1) Old section 1902(a)(9) (relating to health 

2 standards and applicable requirements for laboratory 

3 services). 

4 ‘‘(2) Old section 1902(a)(28) (relating to nurs5 ing facilities and nursing facility services). 

6 ‘‘(3) Old sections 1902(a)(29) and 1908 (relat7 ing to a State program for the licensing of adminis8 trators of nursing homes). 

9 ‘‘(4) Old section 1902(a)(33)(B) (relating to li10 censing health institutions). 

11 ‘‘(5) Old section 1902(d) (relating to medical or 

12 utilization review functions). 

13 ‘‘(6) Old section 1902(i) (relating to inter14 mediate care facilities for the mentally retarded). 

15 ‘‘(7) Old section 1902(y) (relating to psy16 chiatric hospitals). 

17 ‘‘(8) Paragraphs (2) and (6) of old section 

18 1903(g) (relating to the Secretarial requirement to 

19 conduct sample onsite surveys of private and public 

20 institutions and recertifications for the need for cer21 tain services). 

22 ‘‘(9) Old section 1903(q)(4)(B) (relating to the 

23 definition of a board and care facility). 


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1 ‘‘(10) Old section 1910 (relating to certification 

2 and approval of rural health clinics and intermediate 

3 care facilities for the mentally retarded). 

4 ‘‘(11) Old section 1911 (relating to Indian 

5 Health Service facilities). 

6 ‘‘(12) Old section 1913 (relating to hospital 

7 providers of nursing facility services). 

8 ‘‘(13) Old section 1919 (relating to require9 ments for nursing facilities). 

10 ‘‘PART D—GRANTS TO STATES FOR PROGRAM 

11 INTEGRITY 

12 ‘‘SEC. 1941. AUTHORIZATION OF APPROPRIATIONS. 

13 ‘‘(a) IN GENERAL.—For the purpose of carrying out 

14 Federal activities under this part and providing grants to 

15 States for expenses necessary to carry out this part, there 

16 is authorized to be appropriated— 

17 ‘‘(1) for fiscal year 2011, $100,000,000; and 

18 ‘‘(2) for each succeeding fiscal year, the amount 

19 authorized under this section for the preceding fiscal 

20 year, increased by 5 percent. 

21 ‘‘(b) AVAILABILITY; AUTHORITY FOR USE OF

22 FUNDS.— 

23 ‘‘(1) AVAILABILITY.—Amounts appropriated 

24 pursuant to subsection (a) shall remain available 

25 until expended. 


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•S 1099 IS

1 ‘‘(2) AUTHORITY FOR USE OF FUNDS FOR

2 TRANSPORTATION AND TRAVEL EXPENSES FOR

3 ATTENDEES AT EDUCATION, TRAINING, OR CON4 SULTATIVE ACTIVITIES.— 

5 ‘‘(A) IN GENERAL.—The Secretary may 

6 use amounts appropriated pursuant to sub7 section (a) to pay for transportation and the 

8 travel expenses, including per diem in lieu of 

9 subsistence, at rates authorized for employees 

10 of agencies under subchapter I of chapter 57 of 

11 title 5, United States Code, while away from 

12 their homes or regular places of business, of in13 dividuals described in subsection (b)(4) who at14 tend education, training, or consultative activi15 ties conducted under the authority of that sub16 section. 

17 ‘‘(B) PUBLIC DISCLOSURE.—The Secretary 

18 shall make available on a website of the Centers 

19 for Medicare & Medicaid Services that is acces20 sible to the public— 

21 ‘‘(i) the total amount of funds ex22 pended for each conference conducted 

23 under the authority of subsection (b)(4); 

24 and 


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•S 1099 IS

1 ‘‘(ii) the amount of funds expended 

2 for each such conference that were for 

3 transportation and for travel expenses. 

4 ‘‘(c) ANNUAL REPORT.—Not later than 180 days 

5 after the end of each fiscal year, the Secretary shall sub6 mit a report to Congress which identifies— 

7 ‘‘(1) the use of funds appropriated pursuant to 

8 subsection (a); and 

9 ‘‘(2) the effectiveness of the use of such funds. 

10 ‘‘SEC. 1942. APPLICATION OF CERTAIN REQUIREMENTS 

11 UNDER PRE-MODERNIZED MEDICAID. 

12 ‘‘The following old provisions shall apply under this 

13 part: 

14 ‘‘(1) Old subsections (a)(25) (other than sub15 paragraph (E)) and (g) of section 1902 and section 

16 1903(o) (relating to third party liability). 

17 ‘‘(2) Old section 1902(a)(30)(B) (relating to 

18 hospital, intermediate care facility for the mentally 

19 retarded, or hospital for mental diseases admission 

20 screening and review requirements). 

21 ‘‘(3) Old section 1902(a)(32) (relating to cer22 tain payment requirements). 

23 ‘‘(4) Old section 1902(a)(35) (relating to dis24 closing entities under section 1124). 


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•S 1099 IS

1 ‘‘(5) Old section 1902(a)(37) and the fifth sen2 tence (relating to claims payment procedures). 

3 ‘‘(6) Old section 1902(a)(44) (relating to pay4 ment for inpatient hospital services, services in an 

5 intermediate care facility for the mentally retarded, 

6 or inpatient mental hospital services). 

7 ‘‘(7) Old sections 1902(a)(45) and 1912 (relat8 ing to assignment of rights of payment). 

9 ‘‘(8) Old sections 1902(a)(49) and 1921 (relat10 ing to information and access to information con11 cerning sanctions taken by State licensing authori12 ties against health care practitioners and providers). 

13 ‘‘(9) Old sections 1902(a)(61) and 1903(q) (re14 lating to requirements for a medicaid fraud and 

15 abuse control unit). 

16 ‘‘(10) Old section 1902(a)(64) (relating to re17 ports from beneficiaries and others and data com18 pilation requirements concerning alleged instances of 

19 waste, fraud, and abuse). 

20 ‘‘(11) Old section 1902(a)(65) (relating to pro21 vider number and surety bond requirement for sup22 pliers of durable medical equipment). 

23 ‘‘(12) Old section 1902(a)(68) (relating to re24 quirements for certain entities). 


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1 ‘‘(13) Old sections 1902(a)(69) and 1936 (re2 lating to the Medicaid Integrity Program) other 

3 than paragraphs (1), (2)(A), and (3) of old section 

4 1936(e). 

5 ‘‘(14) Old section 1902(a)(70)(B)(iv) (relating 

6 to prohibitions on referrals and conflict of interest 

7 for certain brokers of non-emergency medical trans8 portation). 

9 ‘‘(15) Old sections 1902(a)(71) and 1940 (re10 lating to a required asset verification program). 

11 ‘‘(16) Old section 1902(p) (relating to exclusion 

12 of certain individuals or entities). 

13 ‘‘(17) Old section 1902(x) (relating to unique 

14 identifiers for physicians). 

15 ‘‘(18) Old section 1903(p) (relating to inter16 state collection of rights of support). 

17 ‘‘(19) Old section 1903(r)(2) (relating to re18 quirements for mechanized claims processing and in19 formation retrieval systems). 

20 ‘‘(20) Old section 1903(u) (relating to erro21 neous excess payments), other than clause (v) of 

22 paragraph (1)(D). 

23 ‘‘(21) Old section 1903(v) and the seventh sen24 tence of old section 1902(a) (relating to limitations 


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•S 1099 IS

1 on payments for services furnished to aliens), other 

2 than subparagraphs (A) and (B) of paragraph (4). 

3 ‘‘(22) Old section 1903(x) (relating to citizen4 ship documentation). 

5 ‘‘(23) Old section 1909 (relating to State false 

6 claims act requirements for increased State share of 

7 recoveries). 

8 ‘‘(24) Old section 1914 (relating to withholding 

9 of Federal share of payments for certain Medicare 

10 providers). 

11 ‘‘(25) Old section 1917 (relating to liens, ad12 justments and recoveries, and transfers of assets). 

13 ‘‘(26) Old section 1922 (relating to correction 

14 and reduction plans for intermediate care facilities 

15 for the mentally retarded). 

16 ‘‘PART E—GRANTS TO STATES FOR 

17 ADMINISTRATION 

18 ‘‘SEC. 1951. AUTHORIZATION OF APPROPRIATIONS; PAY19 MENTS TO STATES. 

20 ‘‘(a) IN GENERAL.—For the purpose of providing 

21 grants to States for administrative expenses necessary to 

22 carry out parts A and B, there is authorized to be appro23 priated— 

24 ‘‘(1) for fiscal year 2011, $7,000,000,000; and 


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•S 1099 IS

1 ‘‘(2) for each succeeding fiscal year, the amount 

2 authorized under this subsection for the preceding 

3 fiscal year, increased by 3 percent. 

4 ‘‘(b) PAYMENTS TO STATES.— 

5 ‘‘(1) IN GENERAL.—From the amount appro6 priated pursuant to subsection (a) for a fiscal year, 

7 the Secretary shall pay each State with approved 

8 plans under parts A and B for the fiscal year an 

9 amount equal to the product of the amount appro10 priated for the fiscal year and the ratio of the total 

11 amount of payments made to the State under para12 graphs (2) through (7) of section 1903(a) for fiscal 

13 year 2008 (as such section was in effect for that fis14 cal year) to the total amount of such payments made 

15 to all States for such fiscal year. 

16 ‘‘(2) PRO RATA ADJUSTMENT.—The Secretary 

17 shall make pro rata adjustments to the amounts de18 termined under paragraph (1) for a fiscal year as 

19 necessary so as to not exceed the amount appro20 priated pursuant to subsection (a) for the fiscal 

21 year. 

22 ‘‘SEC. 1952. COST-SHARING PROTECTIONS. 

23 ‘‘(a) IN GENERAL.—A State may impose cost-sharing 

24 for individuals provided acute care medical assistance 

25 under a State plan under part A or long-term care services 


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•S 1099 IS

1 and supports under a State plan under part B consistent 

2 with the following: 

3 ‘‘(1) The State may (in a uniform manner) re4 quire payment of monthly premiums or other cost5 sharing set on a sliding scale based on family in6 come. 

7 ‘‘(2) A premium or other cost-sharing require8 ment imposed under paragraph (1) may only apply 

9 to the extent that, in the case of an individual whose 

10 family income— 

11 ‘‘(A) exceeds 150 percent of the poverty 

12 line, the aggregate annual amount of such pre13 mium and other cost-sharing charges imposed 

14 under the plan does not exceed 5 percent of the 

15 individual’s annual income; and 

16 ‘‘(B) exceeds 250 percent of the poverty 

17 line, the aggregate annual amount of such pre18 mium and other cost-sharing charges do not ex19 ceed 7.5 percent of the individual’s annual in20 come. 

21 ‘‘(3) A State shall not require prepayment of 

22 any premium or cost-sharing imposed pursuant to 

23 paragraph (1) and shall not terminate eligibility of 

24 an individual under the State plan on the basis of 

25 failure to pay any such premium or cost-sharing 


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•S 1099 IS

1 until such failure continues for a period of at least 

2 60 days from the date on which the premium or 

3 cost-sharing became past due. The State may waive 

4 payment of any such premium or cost-sharing in any 

5 case where the State determines that requiring such 

6 payment would create an undue hardship. 

7 ‘‘(b) APPLICATION TO INSTITUTIONALIZED INDIVID8 UALS.—A State may impose cost-sharing consistent with 

9 subsection (a) to individuals who are patients in, or resi10 dents of, a medical institution or nursing facility except 

11 that rules relating to the post-eligibility treatment of in12 come (including a minium monthly personal needs allow13 ance) applicable to institutionalized individuals under old 

14 title XIX shall apply in the same manner to individuals 

15 eligible for long-term care services and supports under a 

16 State plan under part B. 

17 ‘‘(c) POVERTY LINE DEFINED.—In this section, the 

18 term ‘poverty line’ has the meaning given such term in 

19 section 673(2) of the Community Services Block Grant 

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

21 by such section. 

22 ‘‘SEC. 1953. APPLICATION OF CERTAIN REQUIREMENTS 

23 UNDER PRE-MODERNIZED MEDICAID. 

24 ‘‘The following old provisions shall apply to the State 

25 plans under this title: 


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1 ‘‘(1) OLD STATE PLAN REQUIREMENTS.— 

2 ‘‘(A) Old section 1902(a)(1) (relating to 

3 the requirement for plans to be in effect in all 

4 political subdivisions of the State). 

5 ‘‘(B) Old section 1902(a)(2) (relating to 

6 State financial participation). 

7 ‘‘(C) Old section 1902(a)(3) (relating to 

8 opportunity for a fair hearing). 

9 ‘‘(D) Old section 1902(a)(4) (relating to 

10 administration). 

11 ‘‘(E) Old section 1902(a)(5) (relating to 

12 designation of a single State agency). 

13 ‘‘(F) Old section 1902(a)(6) (relating to 

14 reporting requirements). 

15 ‘‘(G) Old section 1902(a)(7) (relating to 

16 restrictions on the use or disclosure of informa17 tion). 

18 ‘‘(H) Old section 1902(a)(8) (relating to 

19 applications for assistance). 

20 ‘‘(I) Old section 1902(a)(11) (relating to 

21 cooperative agreements with other State agen22 cies). 

23 ‘‘(J) Old section 1902(a)(12) (relating to 

24 determinations of blindness). 


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•S 1099 IS

1 ‘‘(K) Old section 1902(a)(13) (relating to 

2 determination of rates of payment for certain 

3 services), other than clause (iv) of subpara4 graph (A). 

5 ‘‘(L) Subsections (a)(15) and (bb) of old 

6 section 1902(a) (relating to payment for serv7 ices provided by rural health clinics and feder8 ally qualified health centers). 

9 ‘‘(M) Old section 1902(a)(16) (relating to 

10 furnishing services to individuals when absent 

11 from the State). 

12 ‘‘(N) Old section 1902(a)(22) (relating to 

13 certain administrative provisions). 

14 ‘‘(O) Paragraphs (23) and (25)(D) of old 

15 section 1902(a) (relating to any willing provider 

16 requirements). 

17 ‘‘(P) Old section 1902(a)(24) (relating to 

18 consultative services by other agencies). 

19 ‘‘(Q) Old section 1902(a)(26) (relating to 

20 review of need for inpatient mental hospital 

21 services and written plan of care requirements). 

22 ‘‘(R) Old section 1902(a)(27) (relating to 

23 provider record keeping requirements). 

24 ‘‘(S) Old section 1902(a)(30)(A) (relating 

25 to utilization review). 


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•S 1099 IS

1 ‘‘(T) Old section 1902(a)(31) (relating to 

2 written plan of care for services and review for 

3 intermediate care facility for the mentally re4 tarded services). 

5 ‘‘(U) Old section 1902(a)(33)(A) (relating 

6 to quality review requirements). 

7 ‘‘(V) Old section 1902(a)(36) (relating to 

8 public availability of facility surveys). 

9 ‘‘(W) Old section 1902(a)(38) (relating to 

10 the provision of information described in section 

11 1128(b)(9) by certain entities). 

12 ‘‘(X) Old section 1902(a)(39) (relating to 

13 the exclusion of certain entities). 

14 ‘‘(Y) Old section 1902(a)(40) (relating to 

15 requirement for uniform reporting systems). 

16 ‘‘(Z) Old section 1902(a)(41) (relating to 

17 notice to State medical licensing boards). 

18 ‘‘(AA) Old section 1902(a)(42) (relating to 

19 certain audit requirements). 

20 ‘‘(BB) Old section 1902(a)(48) (relating to 

21 eligibility cards). 

22 ‘‘(CC) Old section 1902(a)(55) (relating to 

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1 sistent with the policy embodied in the State 

2 plans under parts A and B). 

3 ‘‘(DD) Subsections (a)(56) and (s) of old 

4 section 1902 (relating to adjusted payments for 

5 certain inpatient hospital services). 

6 ‘‘(EE) Old section 1902(a)(59) (relating to 

7 maintenance of list of participating physicians). 

8 ‘‘(FF) The second sentence of old section 

9 1902 (relating to designation of certain State 

10 agencies). 

11 ‘‘(GG) Old section 1902(b) (relating to 

12 limitations on approval of plans). 

13 ‘‘(HH) Old section 1902(j) (relating to ap14 plication of requirements to American Samoa 

15 and the Northern Mariana Islands). 

16 ‘‘(2) OTHER OLD TITLE XIX REQUIREMENTS.— 

17 ‘‘(A) Old section 1903(b)(4) (relating to 

18 limitations on payments to enrollment brokers). 

19 ‘‘(B) Old section 1903(c) (relating to fur20 nishing of services included in a program or 

21 plan under part B or C of the Individuals with 

22 Disabilities Education Act). 

23 ‘‘(C) Old section 1903(d) (relating to pay24 ments). 


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1 ‘‘(D) Old section 1903(e) (relating to costs 

2 with respect to certain hospital services). 

3 ‘‘(E) Old section 1903(i) (relating to limi4 tations on payments). 

5 ‘‘(F) Old section 1903(r) (relating to re6 quirements for mechanized claims processing 

7 and information retrieval systems). 

8 ‘‘(G) Subsections (b)(5) and (w) of old sec9 tion 1903 (relating to limitations on payments 

10 related to provider taxes). 

11 ‘‘(H) Old section 1904 (relating to oper12 ation of State plans). 

13 ‘‘(I) Old sections 1902(a)(60) and 1908A 

14 (relating to medical child support). 

15 ‘‘(J) Paragraphs (32)(D) and (62) of old 

16 section 1902(a) and section 1928 (relating to 

17 program for distribution of pediatric vaccines). 

18 ‘‘PART F—OTHER PROVISIONS 

19 ‘‘SEC. 1961. APPLICATION OF CERTAIN REQUIREMENTS 

20 UNDER PRE-MODERNIZED MEDICAID. 

21 ‘‘The following old provisions shall apply under this 

22 part: 

23 ‘‘(1) The third sentence of old section 1902 (re24 lating to nonapplication of certain old provisions to 

25 a religious nonmedical health care institution). 


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1 ‘‘(2) Old section 1918 (relating to application of 

2 provisions of title II relating to subpoenas). 

3 ‘‘(3) Old section 1939 (relating to references to 

4 laws directly affecting the Medicaid program.’’. 

5 (b) REPEAL OF TITLE XXI.—Effective January 1, 

6 2011, title XXI of the Social Security Act (42 U.S.C. 

7 1397aa et seq.) is repealed. 

8 SEC. 402. OUTREACH. 

9 (a) AUTHORIZATION OF APPROPRIATIONS.—The fol10 lowing amounts are authorized to be appropriated to the 

11 Secretary of Health and Human Services: 

12 (1) For fiscal year 2009, $100,000,000 for the 

13 design and implementation of a public outreach cam14 paign to inform the public about the changes to the 

15 programs under such titles that take effect on Janu16 ary 1, 2011, as a result of the amendment made by 

17 section 401. 

18 (2) For each of fiscal years 2010 and 2011, 

19 $200,000,000 to carry out such public outreach 

20 campaign. 

21 (3) For fiscal year 2012, $50,000,000 to carry 

22 out such public outreach campaign. 

23 (b) AVAILABILITY.—Funds appropriated under sub24 section (a) shall remain available for expenditure through 

25 September 30, 2012. 


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1 (c) AUTHORITY FOR USE OF FUNDS.—The Secretary 

2 may use funds made available under paragraphs (2) and 

3 (3) of subsection (a) to award grants to, or enter into con4 tracts with, public or private entities, including States, 

5 local governments, schools, churches, and community 

6 groups. 

7 SEC. 403. TRANSITION RULES; MISCELLANEOUS PROVI8 SIONS. 

9 (a) IN GENERAL.— 

10 (1) Not later than June 30, 2010, a State that 

11 is one of the 50 States or the District of Columbia 

12 shall inform all individuals enrolled in a State plan 

13 under title XIX or XXI of the Social Security Act 

14 on such date (and any new enrollees after such date) 

15 of the changes to the programs under such titles 

16 that take effect on January 1, 2011, as a result of 

17 the amendment made by section 401. 

18 (2) No State that is one of the 50 States or the 

19 District of Columbia shall approve any applications 

20 for medical assistance or child health assistance 

21 under a State plan under title XIX or XXI (as in 

22 effect for fiscal year 2010) after December 31, 

23 2010. 

24 (b) SUBMISSION OF LEGISLATIVE PROPOSAL FOR

25 TECHNICAL AND CONFORMING AMENDMENTS.—Not later 


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1 than 6 months after the date of enactment of this Act, 

2 the Secretary of Health and Human Services shall submit 

3 to Congress a legislative proposal for such technical and 

4 conforming amendments as are necessary to carry out the 

5 amendments made by this Act. 

6 Subtitle B—Supplemental Health 

7 Care Assistance for Low-Income 

8 Families 

9 SEC. 411. SUPPLEMENTAL HEALTH CARE ASSISTANCE FOR 

10 LOW-INCOME FAMILIES. 

11 Part D of title III of the Public Health Service Act 

12 (42 U.S.C. 254b et seq.) is amended by adding at the end 

13 the following: 

14 ‘‘Subpart XI—Health Care Assistance to Low-Income 

15 Families 

16 ‘‘SEC. 340A–1. FINANCIAL ASSISTANCE TO LOW-INCOME 

17 FAMILIES. 

18 ‘‘(a) IN GENERAL.—The Secretary shall supplement 

19 the costs of private health insurance for eligible low-in20 come families through the distribution of supplemental 

21 debit cards to eligible families, which may be used to pay 

22 for costs associated with health care for the members of 

23 such eligible families and provide direct support to such 

24 families in accessing health care. 

25 ‘‘(b) ELIGIBILITY.— 


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1 ‘‘(1) ELIGIBLE FAMILIES.—To be eligible for fi2 nancial assistance under this section— 

3 ‘‘(A) a family shall— 

4 ‘‘(i) consist of 2 or more individuals 

5 living together who are related by mar6 riage, birth, adoption, or guardianship; 

7 ‘‘(ii) have a gross income that does 

8 not exceed 200 percent of the poverty line, 

9 as applicable to a family of the size in10 volved; and 

11 ‘‘(iii) include at least 1 individual who 

12 is a dependent under the age of 19; and 

13 ‘‘(B) no member of the family shall be cov14 ered by private health insurance. 

15 ‘‘(2) DETERMINATION OF GROSS INCOME.—The 

16 gross income of a family shall be determined by tak17 ing the sum of the income of each family member 

18 who is at least age 21 but not older than age 65, 

19 except that the income of any member of the family 

20 who qualifies for coverage under Medicaid Part A or 

21 B shall not be counted. 

22 ‘‘(3) LIMITATION ON INDIVIDUAL ELIGIBILITY; 

23 ASSISTANCE.— 

24 ‘‘(A) IN GENERAL.—No individual who is a 

25 member of an eligible family under paragraph 


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1 (1) is eligible to qualify separately for financial 

2 assistance under this section. 

3 ‘‘(B) ALIENS.—The Secretary shall ensure 

4 that financial assistance under this section is 

5 not provided for costs associated with health 

6 care for any member of an eligible family who 

7 is an alien individual who is not a lawful per8 manent resident of the United States. 

9 ‘‘(c) SUPPLEMENTAL DEBIT CARD FOR HEALTH

10 CARE EXPENDITURES.— 

11 ‘‘(1) IN GENERAL.—The Secretary shall issue 

12 to each eligible family that enrolls in the program in 

13 accordance with subsection (f) a supplemental debit 

14 card with a dollar-amount value, in accordance with 

15 subsection (d), that may be used to pay for quali16 fying health care expenses. 

17 ‘‘(2) USE OF THE DEBIT CARD.— 

18 ‘‘(A) QUALIFYING HEALTH CARE EX19 PENSES.—A supplemental debit card issued 

20 under this section may be used by members of 

21 the eligible family to pay for— 

22 ‘‘(i) the purchase of health care insur23 ance for any member of the family; 

24 ‘‘(ii) cost sharing expenses related to 

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1 ments, and coinsurance, for any member of 

2 the family; and 

3 ‘‘(iii) the direct purchase of health 

4 care services and supplies for any member 

5 of the family. 

6 ‘‘(B) GEOGRAPHIC RANGE.—Each supple7 mental debit card may be used to pay for quali8 fying health care expenses incurred anywhere in 

9 the 50 States or the District of Columbia. 

10 ‘‘(C) LIMITATIONS.—No supplemental 

11 debit card shall be used to make a payment for 

12 any cost— 

13 ‘‘(i) incurred prior to the determina14 tion of the family’s eligibility for assistance 

15 under this section; or 

16 ‘‘(ii) that is not a health-related ex17 pense. 

18 ‘‘(3) ROLLOVER OF UNUSED AMOUNTS.—Not 

19 more than one-quarter of the annual dollar amount 

20 of a supplemental debit card that is unexpended at 

21 the end of each 12-month period may rollover— 

22 ‘‘(A) to the family’s supplemental debit 

23 card for expenditure during the subsequent 12- 

24 month period, provided that the family to which 

25 the supplemental debit card was issued in the 


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1 previous 12-month period is eligible to receive a 

2 supplemental debit card in the subsequent 12- 

3 month period; or 

4 ‘‘(B) to the family’s health savings account 

5 (as defined in section 223(g)(2) of the Internal 

6 Revenue Code of 1986). 

7 ‘‘(4) MONTHLY STATEMENTS.—The Secretary 

8 shall issue a monthly statement to each family to 

9 which a supplemental debit card has been issued 

10 under this section, which shall state each payment 

11 made with the family’s supplemental debit card dur12 ing the month covered by the statement, the dollar 

13 amount of each such payment, and the provider to 

14 which each such payment was made. 

15 ‘‘(d) AMOUNT OF FINANCIAL ASSISTANCE.— 

16 ‘‘(1) AMOUNTS FOR CALENDAR YEAR 2011.— 

17 Subject to paragraph (5), the amount of financial 

18 assistance available to each eligible family during the 

19 calendar year 2011 shall be determined as follows: 

20 ‘‘(A) Each family whose annual income 

21 does not exceed 100 percent of the poverty 

22 level, as applicable to a family of the size in23 volved, shall receive $5,000. 

24 ‘‘(B) Each family whose annual income ex25 ceeds 100 percent, but does not exceed 200 perVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 cent, of the poverty level, as applicable to a 

2 family of the size involved, shall receive an 

3 amount as follows: 

4 ‘‘(i) For families whose annual income 

5 exceeds 100 percent but does not exceed 

6 120 percent, of the poverty level, $4,000. 

7 ‘‘(ii) For families whose annual in8 come exceeds 120 percent but does not ex9 ceed 140 percent, of the poverty level, 

10 $3,500. 

11 ‘‘(iii) For families whose annual in12 come exceeds 140 percent but does not ex13 ceed 160 percent, of the poverty level, 

14 $3,000. 

15 ‘‘(iv) For families whose annual in16 come exceeds 160 percent but does not ex17 ceed 180 percent, of the poverty level, 

18 $2,500. 

19 ‘‘(v) For families whose annual in20 come exceeds 180 percent but does not ex21 ceed 200 percent, of the poverty level, 

22 $2,000. 

23 ‘‘(2) ADDITIONAL AMOUNTS.—In addition to 

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1 graph (5), the following amounts shall be added to 

2 the supplemental debit cards of qualifying families: 

3 ‘‘(A) For each pregnancy during which a 

4 pregnant woman’s family is eligible for assist5 ance under this section, an additional amount 

6 of $1,000 shall be added to the family’s supple7 mental debit card, except that no family shall 

8 receive such additional $1,000 for any preg9 nancy for which the family received such 

10 amount in the previous 12-month period. 

11 ‘‘(B) For each member of an eligible fam12 ily who is less than 1 year old on any day with13 in the calendar year in which the family is eligi14 ble for assistance, an additional amount of 

15 $500 shall be added to the family’s supple16 mental debit card. 

17 ‘‘(3) COST OF LIVING ADJUSTMENTS.—In the 

18 case of any taxable year beginning in a calendar 

19 year after 2011, each dollar amount contained in 

20 paragraphs (1) and (2) shall be increased in the 

21 same manner as the dollar amounts specified in sec22 tion 25E(b)(3) of the Internal Revenue Code of 

23 1986 are increased by the blended cost-of-living ad24 justment determined under subsection (k)(2) of secVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00128 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 tion 25E of the Internal Revenue Code for the tax2 able year involved. 

3 ‘‘(4) STATE OPTION TO INCREASE AMOUNTS.— 

4 At the option of each State, amounts in excess of 

5 the annual dollar amounts under paragraphs (1) and 

6 (2) may be provided through the supplemental debit 

7 card to eligible families in that State, but no Federal 

8 funds shall be paid to any State for any amount pro9 vided in excess of such annual dollar amount. 

10 ‘‘(5) RISK ADJUSTMENT.—The Secretary may 

11 adjust the amount of financial assistance available to 

12 an eligible family for a calendar year under this sec13 tion based on age, health indicators, and other fac14 tors that represent distinct patterns of health care 

15 services utilization and costs. 

16 ‘‘(e) CONTRIBUTIONS OF STATES.— 

17 ‘‘(1) IN GENERAL.—As a condition for receiving 

18 Federal funds under Part A or Part B of Medicaid, 

19 each State shall contribute 50 percent of the total 

20 amount expended under the supplemental debit card 

21 program by the participating families that reside 

22 within the State during the time that the family re23 sides in that State. For purposes of this section, the 

24 residency of a family is determined by the residency 

25 the legally responsible head of the household. 


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1 ‘‘(2) PAYMENTS FROM STATES.— 

2 ‘‘(A) BILLING NOTIFICATION.— 

3 ‘‘(i) TIMING.—On June 30th and De4 cember 31st of each year, the Secretary 

5 shall send written notification to each 

6 State of that State’s 50 percent share of 

7 expenses, as described in paragraph (1), 

8 for the 6-month period ending on the last 

9 day of the month previous to such notifica10 tion. 

11 ‘‘(ii) CONTENTS.—Each such notifica12 tion to a State shall clearly state— 

13 ‘‘(I) the payment amount due 

14 from the State; 

15 ‘‘(II) the name of each individual 

16 for whom payment was made through 

17 the supplemental debit card program; 

18 ‘‘(III) the health care provider to 

19 whom each payment was made; 

20 ‘‘(IV) the amount of each pay21 ment; and 

22 ‘‘(V) any other information, as 

23 the Secretary requires. 

24 ‘‘(B) PAYMENTS.—Each State shall make 

25 a payment to the Secretary, in the amount 


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1 billed, not later than 30 days after the billing 

2 notification date, in accordance with subpara3 graph (A)(i). 

4 ‘‘(C) PENALTIES.—If a State fails to pay 

5 to the Secretary an amount required under sub6 paragraph (B), interest shall accrue on such 

7 amount at the rate provided under old section 

8 1903(d)(5) of the Social Security Act. The 

9 amount so owed and applicable interest shall be 

10 immediately offset against amounts otherwise 

11 payable to the State under this section, in ac12 cordance with the Federal Claims Collection Act 

13 of 1996 and applicable regulations. 

14 ‘‘(f) ENROLLMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall estab16 lish procedures and times for enrollment in the sup17 plemental debit card program. Open enrollment shall 

18 be available not less than 4 times per calendar year. 

19 ‘‘(2) TRANSITION OF INDIVIDUALS ENROLLED

20 IN MEDICAID OR THE STATE CHILDREN’S HEALTH

21 INSURANCE PROGRAM.— 

22 ‘‘(A) INFORMATION FROM THE STATES.— 

23 Each State shall— 

24 ‘‘(i) not later than June 30, 2010, in25 form all individuals then enrolled in MedVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00131 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 icaid or the State Children’s Health Insur2 ance Program (SCHIP), of the changes in 

3 effect beginning on January 1, 2011; and 

4 ‘‘(ii) not later than October 31, 2010, 

5 redetermine the eligibility of each indi6 vidual enrolled in Medicaid or SCHIP, 

7 other than those individuals who qualify 

8 for Medicaid or SCHIP as disabled, elder9 ly, or a special population, for the supple10 mental debit card program, according to 

11 the eligibility criteria under subsection (b). 

12 ‘‘(B) AUTOMATIC ENROLLMENT.—The 

13 Secretary shall provide for the automatic enroll14 ment in the supplemental debit card program of 

15 all individuals who are enrolled in Medicaid or 

16 SCHIP and who have been redetermined by a 

17 State under subparagraph (A) to be eligible for 

18 Medicaid or SCHIP. Any individual who is de19 termined by a State not to qualify for the sup20 plemental debit card program may retain cov21 erage under Medicaid or SCHIP until June 30, 

22 2011. 

23 ‘‘(3) ASSISTANCE WITH QUALIFIED HEALTH IN24 SURANCE CREDIT.—Each State shall, to the extent 

25 practicable, provide individuals residing within the 


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1 State with information regarding the qualified health 

2 insurance credit described in section 25E of the In3 ternal Revenue Code of 1986, including information 

4 regarding eligibility for, and how to claim, such 

5 credit. 

6 ‘‘(g) ADMINISTRATION.— 

7 ‘‘(1) NATIONAL SYSTEM.—The Secretary may 

8 enter into contracts or agreements with a State, a 

9 consortium of States, or a private entity, including 

10 a bank, enrollment broker, or similar entity, to es11 tablish and maintain a unified national system to 

12 support the processes and transactions necessary to 

13 administer this section. 

14 ‘‘(2) AUTOMATED SYSTEM.—The Secretary 

15 shall establish an automated means, such as an elec16 tronic benefit transfer system, by which the benefits 

17 under this section shall be transferred to eligible 

18 families. 

19 ‘‘(3) VERIFICATION OF APPLICANT INFORMA20 TION.—The Secretary may verify information pro21 vided by applicants with the appropriate Federal, 

22 State, and local agencies, including the Internal Rev23 enue Service, the Social Security Administration, the 

24 Department of Labor, and child support enforce25 ment agencies. 


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1 ‘‘(4) CHOICE COUNSELING.—The Secretary 

2 may enter into contracts or agreements with a State, 

3 a consortium of a State, or a private entity, includ4 ing an enrollment broker or community organization 

5 or other organization, to educate eligible families 

6 about their options and to assist in their enrollment 

7 in the supplemental debit card plan. 

8 ‘‘(5) APPEALS.—The Secretary shall establish 

9 an independent appeals process, to be administered 

10 by an entity separate from the entity that makes ini11 tial eligibility determinations, which shall be avail12 able to individuals who are denied benefits under the 

13 supplemental debit card program. 

14 ‘‘(6) RESOLUTION OF ERRORS.—The Secretary 

15 shall provide for a reconciliation process with the 

16 States to resolve any errors and adjudicate disputes 

17 due to incomplete or false information in a family’s 

18 application or in the billing process described in sub19 section (e). 

20 ‘‘(7) PENALTIES FOR FALSE INFORMATION.— 

21 Any person who provides false information to qualify 

22 for the supplemental debit card program shall pay a 

23 penalty in the amount of 110 percent of the amount 

24 of assistance paid on behalf of such person and all 

25 members of such person’s family. 


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1 ‘‘(h) IMPLEMENTATION PLAN.—Not later than 6 

2 months after the date of enactment of this section, the 

3 Secretary shall submit to Congress a plan for imple4 menting this program during fiscal years 2009–2012. 

5 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.— 

6 ‘‘(1) ADMINISTRATION OF THE SUPPLEMENTAL

7 DEBIT CARD PROGRAM.—To administer the program 

8 under this section, there are authorized to be appro9 priated— 

10 ‘‘(A) for fiscal year 2009, $300,000,000, 

11 for the design of a unified, national system of 

12 conducting the supplemental debit card pro13 gram; 

14 ‘‘(B) for fiscal year 2010, $1,000,000,000 

15 for start-up costs, including, contracting, hiring 

16 and training employees, and testing the pro17 gram; and 

18 ‘‘(C) for fiscal year 2011 and each subse19 quent fiscal year, $3,000,000,000. 

20 ‘‘(2) AUTHORIZATION OF BENEFITS UNDER

21 THE SUPPLEMENTAL DEBIT CARD PROGRAM.—To 

22 provide the supplemental debit card benefits de23 scribed in this section, there are authorized to be ap24 propriated— 


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1 ‘‘(A) for fiscal year 2011, 

2 $24,020,000,000; 

3 ‘‘(B) for fiscal year 2012, 

4 $25,220,000,000; 

5 ‘‘(C) for fiscal year 2013, 

6 $26,480,000,000; 

7 ‘‘(D) for fiscal year 2014, 

8 $27,810,000,000; and 

9 ‘‘(E) for fiscal year 2015, 

10 $29,200,000,000.’’. 

11 TITLE V—FIXING MEDICARE FOR 

12 AMERICAN SENIORS 

13 Subtitle A—Increasing Pro14 grammatic Efficiency, Economy, 

15 and Accountability 

16 SEC. 501. ELIMINATING INEFFICIENCIES AND INCREASING 

17 CHOICE IN MEDICARE ADVANTAGE. 

18 Part C of title XVIII of the Social Security Act is 

19 amended by adding at the end the following new section: 

20 ‘‘MEDICARE ADVANTAGE COMPETITIVE BIDDING

21 ‘‘SEC. 1860C–2. (a) COMPETITIVE BIDDING.— 

22 ‘‘(1) IN GENERAL.—In order to promote com23 petition among Medicare Advantage plans and to in24 crease the quality of care furnished under such 

25 plans, the Secretary shall establish and implement a 

26 competitive bidding mechanism under this part. 


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1 ‘‘(2) MECHANISM TO BEGIN IN 2011.—The 

2 mechanism established under paragraph (1) shall 

3 apply to all MA organizations and plans beginning 

4 in 2011. 

5 ‘‘(3) NO EFFECT ON PART D BENEFITS.—The 

6 mechanism established under paragraph (1) shall 

7 not affect the provisions of this part relating to ben8 efits under part D, including the bidding mechanism 

9 used for benefits under such part. 

10 ‘‘(b) RULES FOR COMPETITIVE BIDDING MECHA11 NISM.—Notwithstanding any other provision of this part, 

12 the following rules shall apply under the competitive bid13 ding mechanism established under subsection (a). 

14 ‘‘(1) BENCHMARK.—Benchmark amounts for 

15 an area for a year shall be established solely through 

16 the competitive bids of MA plans. The benchmark 

17 amount for each area for a year shall be the average 

18 bid of the plans in that area for that year. In estab19 lishing the benchmark for an area for a year under 

20 the preceding sentence, the Secretary shall exclude 

21 the highest and lowest bid for that area and year. 

22 The benchmark amount for an area for a year may 

23 not exceed the benchmark amount for that area and 

24 year that would have applied if this section had not 

25 been enacted. 


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1 ‘‘(2) BIDS.—The MA plan bid shall reflect the 

2 per capita payments that the MA plan will accept 

3 for providing a benefit package that is actuarially 

4 equivalent to 106 percent of the value of the original 

5 Medicare fee-for-service program option. MA plan 

6 bid submissions shall include data on plan average 

7 provider network contract rates compared to the 

8 rates under the original Medicare fee-for-service pro9 gram option for the top 5 most common claim sub10 missions per provider type. 

11 ‘‘(3) RISK ADJUSTMENT.—The benchmark 

12 under paragraph (1) and the MA plan bid shall be 

13 risk adjusted using the risk adjustment require14 ments under this part. 

15 ‘‘(4) BENEFICIARY PREMIUMS.—The MA 

16 monthly basic beneficiary premium for a beneficiary 

17 who enrolls in an MA plan whose plan bid is at or 

18 below the benchmark shall be zero and the bene19 ficiary shall receive the full difference (if any) be20 tween the bid and the benchmark in the form of ad21 ditional benefits or as a rebate on their premiums 

22 under this title. The MA monthly basic beneficiary 

23 premium for a beneficiary who enrolls in an MA 

24 plan whose plan bid is above the benchmark shall be 


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1 equal to the amount by which the bid exceeds the 

2 benchmark. 

3 ‘‘(5) BENCHMARK AMOUNTS FOR RURAL COUN4 TIES.—The Secretary may adjust the benchmark 

5 amount established under paragraph (1) for any 

6 rural county (as identified by the Secretary after 

7 consultation with the Secretary of Commerce) to en8 courage plan participation in such county. 

9 ‘‘(6) EXISTING REQUIREMENTS.—Requirements 

10 relating to licensure, quality, and beneficiary protec11 tions that would otherwise apply under this part 

12 shall apply under the competitive bidding mechanism 

13 established under subsection (a). 

14 ‘‘(c) WAIVER.—In order to implement the competitive 

15 bidding mechanism under established subsection (a), the 

16 Secretary may waive or modify requirements under this 

17 part.’’. 

18 SEC. 502. MEDICARE ACCOUNTABLE CARE ORGANIZATION 

19 DEMONSTRATION PROGRAM. 

20 (a) ESTABLISHMENT.— 

21 (1) IN GENERAL.—In order to promote innova22 tive care coordination and delivery that is cost-effec23 tive, the Secretary of Health and Human Services 

24 (in this section referred to as the ‘‘Secretary’’) shall 


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1 conduct a demonstration program under the Medi2 care program under which— 

3 (A) groups of providers meeting certain 

4 criteria may work together to manage and co5 ordinate care for Medicare fee-for-service bene6 ficiaries through an Accountable Care Organi7 zation (in this section referred to as an 

8 ‘‘ACO’’); and 

9 (B) providers in participating ACOs are el10 igible for bonuses based on performance. 

11 (2) MEDICARE FEE-FOR-SERVICE BENEFICIARY

12 DEFINED.—In this section, the term ‘‘Medicare fee13 for-service beneficiary’’ means an individual who is 

14 enrolled in the original medicare fee-for-service pro15 gram under parts A and B of title XVIII of the So16 cial Security Act and not enrolled in an MA plan 

17 under part C of such title. 

18 (b) ELIGIBLE ACOS.— 

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

20 the following provider groups are eligible to partici21 pate as ACOs under the demonstration program 

22 under this section: 

23 (A) Physicians in group practice arrange24 ments. 


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1 (B) Networks of individual physician prac2 tices. 

3 (C) Partnerships or joint venture arrange4 ments between hospitals and physicians. 

5 (D) Partnerships or joint ventures, which 

6 may include pharmacists providing medication 

7 therapy management. 

8 (E) Hospitals employing physicians. 

9 (F) Integrated delivery systems. 

10 (G) Community-based coalitions of pro11 viders. 

12 (2) REQUIREMENTS.—An ACO shall meet the 

13 following requirements: 

14 (A) The ACO shall have a formal legal 

15 structure that would allow the organization to 

16 receive and distribute bonuses to participating 

17 providers. 

18 (B) The ACO shall include the primary 

19 care providers of at least 5,000 Medicare fee20 for-service beneficiaries. 

21 (C) The ACO shall be willing to become 

22 accountable for the overall care of the Medicare 

23 fee-for-service beneficiaries. 

24 (D) The ACO shall provide the Secretary 

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1 cians participating in the ACO to support the 

2 beneficiary assignment, implementation of per3 formance measures, and the determination of 

4 bonus payments under the demonstration pro5 gram. 

6 (E) The ACO shall have in place contracts 

7 with a core group of key specialist physicians, 

8 a leadership and management structure, and 

9 processes to promote evidence-based medicine 

10 and to coordinate care. 

11 (c) ASSIGNMENT OF MEDICARE FEE-FOR-SERVICE

12 BENEFICIARIES.— 

13 (1) IN GENERAL.—Under the demonstration 

14 program under this section, each Medicare fee-for15 service Medicare beneficiary shall be automatically 

16 assigned to a primary care provider. Such assign17 ment shall be based on the physician from whom the 

18 beneficiary received the most primary care in the 

19 preceding year. 

20 (2) BENEFICIARIES MAY CONTINUE TO SEE

21 PROVIDERS OUTSIDE OF THE ACO.—Under the dem22 onstration program under this section, a Medicare 

23 fee-for-service Medicare beneficiary may continue to 

24 see providers in and outside of the ACO to which 

25 they have been assigned. 


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1 (d) BONUS PAYMENTS.— 

2 (1) IN GENERAL.—Under the demonstration 

3 program, Medicare payments shall continue to be 

4 made to providers under the original Medicare fee5 for-service program in the same manner as they 

6 would otherwise be made except that a participating 

7 ACO is eligible for bonuses if— 

8 (A) it meets certain quality performance 

9 measures; and 

10 (B) spending for their Medicare fee-for11 service beneficiaries meets the requirement 

12 under paragraph (3). 

13 (2) QUALITY.—Under the demonstration pro14 gram under this section, providers meet the require15 ment under paragraph (1)(A) if they generally follow 

16 consensus-based guidelines established by non-gov17 ernment professional medical societies. Patient satis18 faction and risk-adjusted outcomes shall be deter19 mined through an independent entity with medical 

20 expertise. 

21 (3) REQUIREMENT RELATING TO SPENDING.— 

22 (A) IN GENERAL.—An ACO shall only be 

23 eligible to receive a bonus payment if the aver24 age Medicare expenditures under the ACO for 

25 Medicare fee-for-service beneficiaries over a 


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1 two-year period is at least 2 percent below the 

2 average benchmark for the corresponding two3 year period. The benchmark for each ACO shall 

4 be set using the most recent three years of total 

5 per-beneficiary spending for Medicare fee-for6 service beneficiaries assigned to the ACO. Such 

7 benchmark shall be updated by the projected 

8 rate of growth in national per capita spending 

9 for the original medicare fee-for-service pro10 gram, as projected (using the most recent three 

11 years of data) by the Chief Actuary of the Cen12 ters for Medicare & Medicaid Services. 

13 (4) AMOUNT OF BONUS PAYMENTS.—The 

14 amount of the bonus payment to a participating 

15 ACO shall be one-half of the percentage point dif16 ference between the two-year average of their pa17 tients’ Medicare expenditures and 98 percent of the 

18 two-year average benchmark. The bonus amount, in 

19 dollars, shall be equal to the bonus share multiplied 

20 by the benchmark for the most recent year. 

21 (5) LIMITATION.—Bonus payments may only be 

22 made to an ACO if the primary care provider to 

23 which the Medicare fee-for-service beneficiary has 

24 been assigned under subsection (c) elects to partici25 pate in such ACO. 


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1 (e) WAIVER AUTHORITY.—The Secretary may waive 

2 such requirements of titles XI and XVIII of the Social 

3 Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as 

4 may be appropriate for the purpose of carrying out the 

5 demonstration program under this section. 

6 (f) REPORT.—Upon completion of the demonstration 

7 program under this section, the Secretary shall submit to 

8 Congress a report on the program together with such rec9 ommendations as the Secretary determines appropriate. 

10 SEC. 503. REDUCING GOVERNMENT HANDOUTS TO 

11 WEALTHIER SENIORS. 

12 (a) ELIMINATION OF ANNUAL INDEXING OF INCOME

13 THRESHOLDS FOR REDUCED PART B PREMIUM SUB14 SIDIES.— 

15 (1) IN GENERAL.—Paragraph (5) of section 

16 1839(i) of the Social Security Act (42 U.S.C. 

17 1395r(i)) is repealed. 

18 (2) EFFECTIVE DATE.—The repeal made by 

19 paragraph (1) shall apply to premiums for months 

20 beginning after December 2010. 

21 (b) INCOME-RELATED REDUCTION IN PART D PRE22 MIUM SUBSIDY.— 

23 (1) INCOME-RELATED REDUCTION IN PART D

24 PREMIUM SUBSIDY.— 


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1 (A) IN GENERAL.—Section 1860D–13(a) 

2 of the Social Security Act (42 U.S.C. 1395w– 

3 113(a)) is amended by adding at the end the 

4 following new paragraph: 

5 ‘‘(7) REDUCTION IN PREMIUM SUBSIDY BASED

6 ON INCOME.— 

7 ‘‘(A) IN GENERAL.—In the case of an indi8 vidual whose modified adjusted gross income 

9 exceeds the threshold amount applicable under 

10 paragraph (2) of section 1839(i) (including ap11 plication of paragraph (5) of such section) for 

12 the calendar year, the monthly amount of the 

13 premium subsidy applicable to the premium 

14 under this section for a month after December 

15 2010 shall be reduced (and the monthly bene16 ficiary premium shall be increased) by the 

17 monthly adjustment amount specified in sub18 paragraph (B). 

19 ‘‘(B) MONTHLY ADJUSTMENT AMOUNT.— 

20 The monthly adjustment amount specified in 

21 this subparagraph for an individual for a month 

22 in a year is equal to the product of— 

23 ‘‘(i) the quotient obtained by divid24 ing— 


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1 ‘‘(I) the applicable percentage de2 termined under paragraph (3)(C) of 

3 section 1839(i) (including application 

4 of paragraph (5) of such section) for 

5 the individual for the calendar year 

6 reduced by 25.5 percent; by 

7 ‘‘(II) 25.5 percent; and 

8 ‘‘(ii) the base beneficiary premium (as 

9 computed under paragraph (2)). 

10 ‘‘(C) MODIFIED ADJUSTED GROSS IN11 COME.—For purposes of this paragraph, the 

12 term ‘modified adjusted gross income’ has the 

13 meaning given such term in subparagraph (A) 

14 of section 1839(i)(4), determined for the tax15 able year applicable under subparagraphs (B) 

16 and (C) of such section. 

17 ‘‘(D) DETERMINATION BY COMMISSIONER

18 OF SOCIAL SECURITY.—The Commissioner of 

19 Social Security shall make any determination 

20 necessary to carry out the income-related reduc21 tion in premium subsidy under this paragraph. 

22 ‘‘(E) PROCEDURES TO ASSURE CORRECT

23 INCOME-RELATED REDUCTION IN PREMIUM

24 SUBSIDY.— 


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1 ‘‘(i) DISCLOSURE OF BASE BENE2 FICIARY PREMIUM.—Not later than Sep3 tember 15 of each year beginning with 

4 2010, the Secretary shall disclose to the 

5 Commissioner of Social Security the 

6 amount of the base beneficiary premium 

7 (as computed under paragraph (2)) for the 

8 purpose of carrying out the income-related 

9 reduction in premium subsidy under this 

10 paragraph with respect to the following 

11 year. 

12 ‘‘(ii) ADDITIONAL DISCLOSURE.—Not 

13 later than October 15 of each year begin14 ning with 2010, the Secretary shall dis15 close to the Commissioner of Social Secu16 rity the following information for the pur17 pose of carrying out the income-related re18 duction in premium subsidy under this 

19 paragraph with respect to the following 

20 year: 

21 ‘‘(I) The modified adjusted gross 

22 income threshold applicable under 

23 paragraph (2) of section 1839(i) (in24 cluding application of paragraph (5) 

25 of such section). 


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1 ‘‘(II) The applicable percentage 

2 determined under paragraph (3)(C) of 

3 section 1839(i) (including application 

4 of paragraph (5) of such section). 

5 ‘‘(III) The monthly adjustment 

6 amount specified in subparagraph 

7 (B). 

8 ‘‘(IV) Any other information the 

9 Commissioner of Social Security de10 termines necessary to carry out the 

11 income-related reduction in premium 

12 subsidy under this paragraph. 

13 ‘‘(F) RULE OF CONSTRUCTION.—The for14 mula used to determine the monthly adjustment 

15 amount specified under subparagraph (B) shall 

16 only be used for the purpose of determining 

17 such monthly adjustment amount under such 

18 subparagraph.’’. 

19 (B) COLLECTION OF MONTHLY ADJUST20 MENT AMOUNT.—Section 1860D–13(c) of the 

21 Social Security Act (42 U.S.C. 1395w–113(c)) 

22 is amended— 

23 (i) in paragraph (1), by striking ‘‘(2) 

24 and (3)’’ and inserting ‘‘(2), (3), and (4)’’; 

25 and 


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1 (ii) by adding at the end the following 

2 new paragraph: 

3 ‘‘(4) COLLECTION OF MONTHLY ADJUSTMENT

4 AMOUNT.— 

5 ‘‘(A) IN GENERAL.—Notwithstanding any 

6 provision of this subsection or section 

7 1854(d)(2), subject to subparagraph (B), the 

8 amount of the income-related reduction in pre9 mium subsidy for an individual for a month (as 

10 determined under subsection (a)(7)) shall be 

11 paid through withholding from benefit pay12 ments in the manner provided under section 

13 1840. 

14 ‘‘(B) AGREEMENTS.—In the case where 

15 the monthly benefit payments of an individual 

16 that are withheld under subparagraph (A) are 

17 insufficient to pay the amount described in such 

18 subparagraph, the Commissioner of Social Se19 curity shall enter into agreements with the Sec20 retary, the Director of the Office of Personnel 

21 Management, and the Railroad Retirement 

22 Board as necessary in order to allow other 

23 agencies to collect the amount described in sub24 paragraph (A) that was not withheld under 

25 such subparagraph.’’. 


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1 (2) CONFORMING AMENDMENTS.— 

2 (A) MEDICARE.—Part D of title XVIII of 

3 the Social Security Act (42 U.S.C. 1395w–101 

4 et seq.) is amended— 

5 (i) in section 1860D–13(a)(1)— 

6 (I) by redesignating subpara7 graph (F) as subparagraph (G); 

8 (II) in subparagraph (G), as re9 designated by subparagraph (A), by 

10 striking ‘‘(D) and (E)’’ and inserting 

11 ‘‘(D), (E), and (F)’’; and 

12 (III) by inserting after subpara13 graph (E) the following new subpara14 graph: 

15 ‘‘(F) INCREASE BASED ON INCOME.—The 

16 monthly beneficiary premium shall be increased 

17 pursuant to paragraph (7).’’; and 

18 (ii) in section 1860D–15(a)(1)(B), by 

19 striking ‘‘paragraph (1)(B)’’ and inserting 

20 ‘‘paragraphs (1)(B) and (1)(F)’’. 

21 (B) INTERNAL REVENUE CODE.—Section 

22 6103(l)(20) of the Internal Revenue Code of 

23 1986 (relating to disclosure of return informa24 tion to carry out Medicare part B premium sub25 sidy adjustment) is amended— 


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1 (i) in the heading, by striking ‘‘PART

2 B PREMIUM SUBSIDY ADJUSTMENT’’ and 

3 inserting ‘‘PARTS B AND D PREMIUM SUB4 SIDY ADJUSTMENTS’’; 

5 (ii) in subparagraph (A)— 

6 (I) in the matter preceding clause 

7 (i), by inserting ‘‘or 1860D–13(a)(7)’’ 

8 after ‘‘1839(i)’’; and 

9 (II) in clause (vii), by inserting 

10 after ‘‘subsection (i) of such section’’ 

11 the following: ‘‘or under section 

12 1860D–13(a)(7) of such Act’’; 

13 (iii) in subparagraph (B)— 

14 (I) by inserting ‘‘or such section 

15 1860D–13(a)(7)’’ before the period at 

16 the end; 

17 (II) as amended by clause (i), by 

18 inserting ‘‘or for the purpose of re19 solving tax payer appeals with respect 

20 to any such premium adjustment’’ be21 fore the period at the end; and 

22 (III) by adding at the end the 

23 following new sentence: ‘‘Officers, em24 ployees, and contractors of the Social 

25 Security Administration may disclose 


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1 such return information to officers, 

2 employees, and contractors of the De3 partment of Health and Human Serv4 ices, the Office of Personnel Manage5 ment, the Railroad Retirement Board, 

6 the Department of Justice, and the 

7 courts of the United States to the ex8 tent necessary to carry out the pur9 poses described in the preceding sen10 tence.’’; and 

11 (iv) by adding at the end the following 

12 new subparagraph: 

13 ‘‘(C) TIMING OF DISCLOSURE.—Return in14 formation shall be disclosed to officers, employ15 ees, and contractors of the Social Security Ad16 ministration under subparagraph (A) not later 

17 than the date that is 90 days prior to the date 

18 on which the taxpayer first becomes entitled to 

19 benefits under part A of title XVIII of the So20 cial Security Act or eligible to enroll for benefits 

21 under part B of such title.’’. 

22 SEC. 504. REWARDING PREVENTION. 

23 Section 1839 of the Social Security Act (42 U.S.C. 

24 1395r) is amended— 


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1 (1) in subsection (a)(2), by striking ‘‘and (i)’’ 

2 and inserting ‘‘(i), and (j)’’; and 

3 (2) by adding at the end the following new sub4 section: 

5 ‘‘(j)(1) With respect to the monthly premium amount 

6 for months after December 2010, the Secretary may ad7 just (under procedures established by the Secretary) the 

8 amount of such premium for an individual based on 

9 whether or not the individual participates in certain 

10 healthy behaviors, such as weight management, exercise, 

11 nutrition counseling, refraining from tobacco use, desig12 nating a health home, and other behaviors determined ap13 propriate by the Secretary. 

14 ‘‘(2) In making the adjustments under paragraph (1) 

15 for a month, the Secretary shall ensure that the total 

16 amount of premiums to be paid under this part for the 

17 month is equal to the total amount of premiums that 

18 would have been paid under this part for the month if 

19 no such adjustments had been made, as estimated by the 

20 Secretary.’’. 

21 SEC. 505. PROMOTING HEALTHCARE PROVIDER TRANS22 PARENCY. 

23 (a) TRANSPARENCY.—Title XVIII of the Social Secu24 rity Act is amended by adding at the end the following 

25 new section: 


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1 ‘‘PRICE TRANSPARENCY REQUIREMENTS

2 ‘‘SEC. 1899. (a) PRE-TREATMENT DISCLOSURE.—A 

3 provider of services (as defined in section 1861(u)) and 

4 a supplier (as defined in section 1861(d)) shall provide 

5 to each individual (regardless of whether or not the indi6 vidual is a beneficiary under this title) who is scheduled 

7 to receive a treatment (or to begin a course of treatment) 

8 that is not for an emergency medical condition the esti9 mated price that the provider of services or supplier will 

10 charge for the treatment (or course of treatment). Such 

11 price shall be determined at the time of scheduling. 

12 ‘‘(b) POST-TREATMENT DISCLOSURE.—A provider of 

13 services (as so defined) and a supplier (as so defined) shall 

14 include with any bill that includes the charges for a treat15 ment with respect to an individual (regardless of whether 

16 or not the individual is a beneficiary under this title), an 

17 itemized list of component charges for such treatment, in18 cluding charges for drugs and medical equipment involved, 

19 as determined at the time of billing. With respect to each 

20 item included on such list, the provider of services or sup21 plier shall include the price charged for the item.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall apply to providers of services and sup24 pliers on and after January 1, 2011. 


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1 SEC. 506. AVAILABILITY OF MEDICARE AND MEDICAID 

2 CLAIMS AND PATIENT ENCOUNTER DATA. 

3 (a) PUBLIC AVAILABILITY.—Not later than 1 year 

4 after the date of enactment of this Act (and annually 

5 thereafter), the Secretary of Health and Human Services 

6 (in this section referred to as the ‘‘Secretary’’), shall make 

7 available to the public (including through an Internet 

8 website) data on claims and patient encounters under ti9 tles XVIII and XIX of the Social Security Act during the 

10 preceding calendar year. Such data shall be appropriately 

11 disaggregated and patient deidentified, as determined nec12 essary by the Secretary in order to comply with the Fed13 eral regulations (concerning the privacy of individually 

14 identifiable health information) promulgated under section 

15 264(c) of the Health Insurance Portability and Account16 ability Act of 1996. 

17 (b) PROVISION OF DATA TO STATE EXCHANGES AND

18 HEALTH INSURANCE ISSUERS UNDER THE STATE EX19 CHANGE.—The Secretary shall submit such data directly 

20 to a State Exchange under title II and health insurance 

21 issuers under such Exchange (in a form and manner de22 termined appropriate by the Secretary). 

23 (c) MATCHING OF DATA.—The Secretary shall en24 sure that the total amount of claims under such titles dur25 ing the preceding year for which data is made available 

26 under subsection (a) is equal to the reported outlays from 


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1 the Federal government and the States under such titles 

2 during the preceding years. 

3 Subtitle B—Reducing Fraud and 

4 Abuse 

5 SEC. 511. REQUIRING THE SECRETARY OF HEALTH AND 

6 HUMAN SERVICES TO CHANGE THE MEDI7 CARE BENEFICIARY IDENTIFIER USED TO 

8 IDENTIFY MEDICARE BENEFICIARIES UNDER 

9 THE MEDICARE PROGRAM. 

10 (a) PROCEDURES.— 

11 (1) IN GENERAL.—Not later than 1 year after 

12 the date of enactment of this Act, in order to protect 

13 beneficiaries from identity theft, the Secretary of 

14 Health and Human Services (in this section referred 

15 to as the ‘‘Secretary’’) shall establish and implement 

16 procedures to change the Medicare beneficiary iden17 tifier used to identify individuals entitled to benefits 

18 under part A of title XVIII of the Social Security 

19 Act or enrolled under part B of such title so that 

20 such an individual’s social security account number 

21 is not used. Such procedures shall provide that the 

22 new Medicare beneficiary identifier includes biomet23 ric identification protections. 

24 (2) MAINTAINING EXISTING HICN STRUC25 TURE.—In order to minimize the impact of the 


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1 change under paragraph (1) on systems that com2 municate with Medicare beneficiary eligibility sys3 tems, the procedures under paragraph (1) shall pro4 vide that the new Medicare beneficiary identifier 

5 maintain the existing Health Insurance Claim Num6 ber structure. 

7 (3) PROTECTION AGAINST FRAUD.—The proce8 dures under paragraph (1) shall provide for a proc9 ess for changing the Medicare beneficiary identifier 

10 for an individual to a different identifier in the case 

11 of the discovery of fraud, including identity theft. 

12 (4) PHASE-IN AUTHORITY.— 

13 (A) IN GENERAL.—Subject to subpara14 graphs (B) and (C), the Secretary may phase in 

15 the change under paragraph (1) in such man16 ner as the Secretary determines appropriate. 

17 (B) LIMIT.—The phase-in period under 

18 subparagraph (A) shall not exceed 10 years. 

19 (C) NEWLY ENTITLED AND ENROLLED IN20 DIVIDUALS.—The Secretary shall ensure that 

21 the change under paragraph (1) is implemented 

22 not later than January 1, 2010, with respect to 

23 any individual who first becomes entitled to 

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1 cial Security Act or enrolled under part B of 

2 such title on or after such date. 

3 (b) EDUCATION AND OUTREACH.—The Secretary 

4 shall establish a program of education and outreach for 

5 individuals entitled to, or enrolled for, benefits under part 

6 A of title XVIII of the Social Security Act or enrolled 

7 under part B of such title, providers of services (as defined 

8 in subsection (u) of section 1861 of such Act (42 U.S.C. 

9 1395x)), and suppliers (as defined in subsection (d) of 

10 such section) on the change under paragraph (1). 

11 (c) DATA MATCHING.— 

12 (1) ACCESS TO CERTAIN INFORMATION.—Sec13 tion 205(r) of the Social Security Act (42 U.S.C. 

14 405(r)) is amended by adding at the end the fol15 lowing new paragraph: 

16 ‘‘(9)(A) The Commissioner of Social Security 

17 shall, upon the request of the Secretary— 

18 ‘‘(i) enter into an agreement with the Sec19 retary for the purpose of matching data in the 

20 system of records of the Commissioner with 

21 data in the system of records of the Secretary, 

22 so long as the requirements of subparagraphs 

23 (A) and (B) of paragraph (3) are met, in order 

24 to determine— 


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1 ‘‘(I) whether a beneficiary under the 

2 program under title XVIII, XIX, or XXI is 

3 dead, imprisoned, or otherwise not eligible 

4 for benefits under such program; and 

5 ‘‘(II) whether a provider of services or 

6 a supplier under the program under title 

7 XVIII, XIX, or XXI is dead, imprisoned, 

8 or otherwise not eligible to furnish or re9 ceive payment for furnishing items and 

10 services under such program; and 

11 ‘‘(ii) include in such agreement safeguards 

12 to assure the maintenance of the confidentiality 

13 of any information disclosed and procedures to 

14 permit the Secretary to use such information 

15 for the purpose described in clause (i). 

16 ‘‘(B) Information provided pursuant to an 

17 agreement under this paragraph shall be provided at 

18 such time, in such place, and in such manner as the 

19 Commissioner determines appropriate. 

20 ‘‘(C) Information provided pursuant to an 

21 agreement under this paragraph shall include infor22 mation regarding whether— 

23 ‘‘(i) the name (including the first name 

24 and any family name or surname), the date of 

25 birth (including the month, day, and year), and 


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1 social security number of an individual provided 

2 to the Commissioner match the information 

3 contained in the Commissioner’s records, and 

4 ‘‘(ii) such individual is shown on the 

5 records of the Commissioner as being de6 ceased.’’. 

7 (2) INVESTIGATION BASED ON CERTAIN INFOR8 MATION.—Title XI of the Social Security Act (42 

9 U.S.C. 1301 et seq.) is amended by inserting after 

10 section 1128F the following new section: 

11 ‘‘SEC. 1128G. ACCESS TO CERTAIN DATA AND INVESTIGA12 TION OF CLAIMS INVOLVING INDIVIDUALS 

13 WHO ARE NOT ELIGIBLE FOR BENEFITS OR 

14 ARE NOT ELIGIBLE PROVIDERS OF SERVICES 

15 OR SUPPLIERS. 

16 ‘‘(a) DATA AGREEMENT.—The Secretary shall enter 

17 into an agreement with the Commissioner of Social Secu18 rity pursuant to section 205(r)(9). 

19 ‘‘(b) INVESTIGATION OF CLAIMS INVOLVING CER20 TAIN INDIVIDUALS WHO ARE NOT ELIGIBLE FOR BENE21 FITS OR ARE NOT ELIGIBLE PROVIDERS OF SERVICES OR

22 SUPPLIERS.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall, in the 

24 case where a provider of services or a supplier under 

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1 mits a claim for payment for items or services fur2 nished to an individual who the Secretary deter3 mines, as a result of information provided pursuant 

4 to such agreement, is not eligible for benefits under 

5 such program, or where the Secretary determines, as 

6 a result of such information, that such provider of 

7 services or supplier is not eligible to furnish or re8 ceive payment for furnishing such items or services, 

9 conduct an investigation with respect to the provider 

10 of services or supplier. If the Secretary determines 

11 further action is appropriate, the Secretary shall 

12 refer the investigation to the Inspector General of 

13 the Department of Health and Human Services as 

14 soon as practicable. 

15 ‘‘(2) ASSESSMENT OF IMPLEMENTATION AND

16 EFFECTIVENESS BY THE OIG.—The Inspector Gen17 eral of the Department of Health and Human Serv18 ices shall test the implementation of the provisions 

19 of this section (including the implementation of the 

20 agreement under section 205(r)(9)) and conduct 

21 such period assessments of such implementation as 

22 the Inspector General determines necessary to deter23 mine the effectiveness of such implementation.’’. 


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1 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as may be 

3 necessary to carry out this section. 

4 SEC. 512. USE OF TECHNOLOGY FOR REAL-TIME DATA RE5 VIEW. 

6 Title XVIII of the Social Security Act, as amended 

7 by this Act, is amended by adding at the end the following 

8 new section: 

9 ‘‘USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW

10 ‘‘SEC. 1899A. (a) IN GENERAL.—The Secretary shall 

11 establish procedures for the use of technology (including 

12 front-end, pre-payment technology similar to that used by 

13 hedge funds, investment funds, and banks) to provide real14 time data analysis of claims for payment under this title 

15 to identify and investigate unusual billing or order prac16 tices under this title that could indicate fraud or abuse. 

17 ‘‘(b) COMPETITIVE BIDDING.—The procedures estab18 lished under subsection (a) shall ensure that the imple19 mentation of such technology is conducted through a com20 petitive bidding process.’’. 

21 SEC. 513. DETECTION OF MEDICARE FRAUD AND ABUSE. 

22 (a) IN GENERAL.—Section 1893 of the Social Secu23 rity Act (42 U.S.C. 1395ddd) is amended— 

24 (1) in subsection (b), by adding at the end the 

25 following new paragraph: 


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1 ‘‘(7) Implementation of fraud and abuse detec2 tion methods under subsection (i).’’; 

3 (2) in subsection (c), by adding at the end of 

4 the flush matter following paragraph (4), the fol5 lowing new sentence ‘‘In the case of an activity de6 scribed in subsection (b)(8), an entity shall only be 

7 eligible to enter into a contract under the Program 

8 to carry out the activity if the entity is selected 

9 through a competitive bidding process in accordance 

10 with subsection (i)(3).’’; and 

11 (3) by adding at the end the following new sub12 section: 

13 ‘‘(i) DETECTION OF MEDICARE FRAUD AND

14 ABUSE.— 

15 ‘‘(1) ESTABLISHMENT OF SYSTEM TO IDENTIFY

16 COUNTIES MOST VULNERABLE TO FRAUD.—Not 

17 later than 6 months after the date of enactment of 

18 this subsection, the Secretary shall establish a sys19 tem to identify the 50 counties most vulnerable to 

20 fraud with respect to items and services furnished by 

21 providers of services (other than hospitals and crit22 ical access hospitals) and suppliers based on the de23 gree of county-specific reimbursement and analysis 

24 of payment trends under this title. The Secretary 


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1 shall designate the counties identified under the pre2 ceding sentence as ‘high risk areas’. 

3 ‘‘(2) FRAUD AND ABUSE DETECTION.— 

4 ‘‘(A) INITIAL IMPLEMENTATION.—The 

5 Secretary shall establish procedures for the im6 plementation of fraud and abuse detection 

7 methods under this title with respect to items 

8 and services furnished by such providers of 

9 services and suppliers in high risk areas des10 ignated under paragraph (1) (and, beginning 

11 not later than 18 months after the date of en12 actment of this subsection, with respect to 

13 items and services furnished by such providers 

14 of services and suppliers in areas not so des15 ignated) including the following: 

16 ‘‘(i) Data analysis to establish prepay17 ment claim edits designed to target the 

18 claims for payment under this title for 

19 such items and services that are most like20 ly to be fraudulent. 

21 ‘‘(ii) Prepayment benefit integrity re22 views for claims for payment under this 

23 title for such items and services that are 

24 suspended as a result of such edits. 


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1 ‘‘(B) REQUIREMENT FOR PARTICIPA2 TION.—In no case may a provider of services or 

3 supplier who does not meet the requirements 

4 under subparagraph (A) participate in the pro5 gram under this title. 

6 ‘‘(C) EXPANDED IMPLEMENTATION.—Not 

7 later than 24 months after the date of enact8 ment of this subsection, the Secretary shall es9 tablish procedures for the implementation of 

10 such fraud and abuse detection methods under 

11 this title with respect to items and services fur12 nished by all providers of services and suppliers, 

13 including those not in high risk areas des14 ignated under paragraph (1). 

15 ‘‘(3) COMPETITIVE BIDDING.—In selecting enti16 ties to carry out this subsection, the Secretary shall 

17 use a competitive bidding process. 

18 ‘‘(4) REPORT TO CONGRESS.—The Secretary 

19 shall submit to Congress an annual report on the ef20 fectiveness of activities conducted under this sub21 section, including a description of any savings to the 

22 program under this title as a result of such activities 

23 and the overall administrative cost of such activities 

24 and a determination as to the amount of funding 

25 needed to carry out this subsection for subsequent 


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1 fiscal years, together with recommendations for such 

2 legislation and administrative action as the Sec3 retary determines appropriate.’’. 

4 (b) AUTHORIZATION OF APPROPRIATIONS.—To carry 

5 out the amendments made by this section, there are au6 thorized to be appropriated— 

7 (1) such sums as may be necessary, not to ex8 ceed $50,000,000, for each of fiscal years 2010 

9 through 2014; and 

10 (2) such sums as may be necessary, not to ex11 ceed an amount the Secretary determines appro12 priate in the most recent report submitted to Con13 gress under section 1893(j)(4) of the Social Security 

14 Act, as added by subsection (a), for each subsequent 

15 fiscal year. 

16 SEC. 514. EDITS ON 855S MEDICARE ENROLLMENT APPLI17 CATION AND EXEMPTION OF PHARMACISTS 

18 FROM SURETY BOND REQUIREMENT. 

19 (a) EDITS ON 855S MEDICARE ENROLLMENT APPLI20 CATION.—Section 1834(a) of the Social Security Act (42 

21 U.S.C. 1395m(a)) is amended by adding at the end the 

22 following new paragraphs: 

23 ‘‘(22) CONFIRMATION WITH NATIONAL SUP24 PLIER CLEARINGHOUSE PRIOR TO PAYMENT.— 


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1 ‘‘(A) IN GENERAL.—Not later than 1 year 

2 after the date of enactment of this paragraph, 

3 the Secretary shall establish procedures to re4 quire carriers, prior to paying a claim for pay5 ment for durable medical equipment, pros6 thetics, orthotics, and supplies under this title, 

7 to confirm with the National Supplier Clearing8 house— 

9 ‘‘(i) that the National Provider Identi10 fier of the physician or practitioner pre11 scribing or ordering the item or service is 

12 valid and active; 

13 ‘‘(ii) that the Medicare identification 

14 number of the supplier is valid and active; 

15 and 

16 ‘‘(iii) that the item or service for 

17 which the claim for payment is submitted 

18 was properly identified on the CMS–855S 

19 Medicare enrollment application. 

20 ‘‘(B) ONLINE DATABASE FOR IMPLEMEN21 TATION.—Not later than 18 months after the 

22 date of enactment of this paragraph, the Sec23 retary shall establish an online database similar 

24 to that used for the National Provider Identifier 

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1 riers, and the National Supplier Clearinghouse 

2 to view information on specialties and the types 

3 of items and services each supplier has indi4 cated on the CMS–855S Medicare enrollment 

5 application submitted by the supplier. 

6 ‘‘(C) NOTIFICATION OF CLAIM DENIAL

7 AND RESUBMISSION.—In the case where a claim 

8 for payment for durable medical equipment, 

9 prosthetics, orthotics, and supplies under this 

10 title is denied because the item or service fur11 nished does not correctly match up with the in12 formation on file with the National Supplier 

13 Clearinghouse— 

14 ‘‘(i) the National Supplier Clearing15 house shall— 

16 ‘‘(I) provide the supplier written 

17 notification of the reason for such de18 nial; and 

19 ‘‘(II) allow the supplier 60 days 

20 to provide the National Supplier 

21 Clearinghouse with appropriate certifi22 cation, licensing, or accreditation; and 

23 ‘‘(ii) the Secretary shall waive applica24 ble requirements relating to the time frame 

25 for the submission of claims for payment 


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1 under this title in order to permit the re2 submission of such claim if payment of 

3 such claim would otherwise be allowed 

4 under this title. 

5 ‘‘(D) IMPROVEMENTS TO MEDICARE EN6 ROLLMENT APPLICATION.—The Secretary shall 

7 establish procedures under which a prospective 

8 supplier of durable medical equipment, pros9 thetics, orthotics, and supplies under this title 

10 shall certify, as part of the CMS–855S Medi11 care enrollment application submitted by such 

12 supplier, under penalty of perjury, that the in13 formation provided by the supplier on such ap14 plication is accurate to the best of the supplier’s 

15 knowledge. 

16 ‘‘(23) TERMINATION OF PARTICIPATION FOR

17 SUBMISSION OF FRAUDULENT CLAIMS.—If the Sec18 retary finds that a supplier of durable medical 

19 equipment, prosthetics, orthotics, and supplies under 

20 this title has submitted fraudulent claims for pay21 ment under this title, the Secretary shall terminate 

22 the suppliers participation under this title. Not later 

23 than 1 year after the date of enactment of this para24 graph, the Secretary shall establish a process under 

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1 nated under the preceding sentence may appeal such 

2 termination and such appeal shall be resolved not 

3 later than 60 days after the date on which the ap4 peal was made.’’. 

5 (b) EXEMPTION OF PHARMACISTS FROM SURETY

6 BOND REQUIREMENT.—Section 1834(a)(16) of the Social 

7 Security Act (42 U.S.C. 1395m(a)(16)) is amended, in the 

8 second sentence, by inserting ‘‘and shall waive such re9 quirement in the case of a pharmacist’’ before the period 

10 at the end. 

11 SEC. 515. GAO STUDY AND REPORT ON EFFECTIVENESS OF 

12 SURETY BOND REQUIREMENTS FOR SUP13 PLIERS OF DURABLE MEDICAL EQUIPMENT 

14 IN COMBATING FRAUD. 

15 (a) STUDY.—The Comptroller General of the United 

16 States shall conduct a study on the effectiveness of the 

17 surety bond requirement under section 1834(a)(16) of the 

18 Social Security Act (42 U.S.C. 1395m(a)(16)) in com19 bating fraud. 

20 (b) REPORT.—Not later than 1 year after the date 

21 of enactment of this Act, the Comptroller General shall 

22 submit to Congress a report containing the results of the 

23 study conducted under subsection (a), together with rec24 ommendations for such legislation and administrative ac25 tion as the Comptroller General determines appropriate. 


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1 TITLE VI—ENDING LAWSUIT 

2 ABUSE 

3 SEC. 601. STATE GRANTS TO CREATE HEALTH COURT SOLU4 TIONS. 

5 Part P of title III of the Public Health Service Act 

6 (42 U.S.C. 280g et seq.) is amended by adding at the end 

7 the following: 

8 ‘‘SEC. 399R. STATE GRANTS TO CREATE HEALTH COURT SO9 LUTIONS. 

10 ‘‘(a) IN GENERAL.—The Secretary may award grants 

11 to States for the development, implementation, and eval12 uation of alternatives to current tort litigation that comply 

13 with this section, for the resolution of disputes concerning 

14 injuries allegedly caused by health care providers or health 

15 care organizations. 

16 ‘‘(b) CONDITIONS FOR DEMONSTRATION GRANTS.— 

17 ‘‘(1) APPLICATION.—To be eligible to receive a 

18 grant under this section, a State shall submit to the 

19 Secretary an application at such time, in such man20 ner, and containing such information as may be re21 quired by the Secretary. A grant shall be awarded 

22 under this section on such terms and conditions as 

23 the Secretary determines appropriate. 

24 ‘‘(2) STATE REQUIREMENTS.—To be eligible to 

25 receive a grant under this section, a State shall— 


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1 ‘‘(A) develop and implement an alternative 

2 to current tort litigation for resolving disputes 

3 over injuries allegedly caused by health care 

4 providers or health care organizations based on 

5 one or more of the models described in sub6 section (d); and 

7 ‘‘(B) implement policies that provide for a 

8 reduction in health care errors through the col9 lection and analysis by organizations that en10 gage in voluntary efforts to improve patient 

11 safety and the quality of health care delivery, of 

12 patient safety data related to disputes resolved 

13 under the alternatives under subparagraph (A). 

14 ‘‘(3) DEMONSTRATION OF EFFECTIVENESS.— 

15 To be eligible to receive a grant under subsection 

16 (a), a State shall demonstrate how the proposed al17 ternative to be implemented under paragraph (2)(A) 

18 will— 

19 ‘‘(A) make the medical liability system of 

20 the State more reliable through the prompt and 

21 fair resolution of disputes; 

22 ‘‘(B) encourage the early disclosure of 

23 health care errors; 

24 ‘‘(C) enhance patient safety; and 


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1 ‘‘(D) maintain access to medical liability 

2 insurance. 

3 ‘‘(4) SOURCES OF COMPENSATION.—To be eligi4 ble to receive a grant under subsection (a), a State 

5 shall identify the sources from, and methods by 

6 which, compensation would be paid for medical li7 ability claims resolved under the proposed alter8 native to current tort litigation implemented under 

9 paragraph (2)(A). Funding methods shall, to the ex10 tent practicable, provide financial incentives for ac11 tivities that improve patient safety. 

12 ‘‘(5) SCOPE.— 

13 ‘‘(A) IN GENERAL.—To be eligible to re14 ceive a grant under subsection (a), a State shall 

15 utilize the proposed alternative identified under 

16 paragraph (2)(A) for the resolution of all types 

17 of disputes concerning injuries allegedly caused 

18 by health care providers or health care organi19 zations. 

20 ‘‘(B) CURRENT STATE EFFORTS TO ESTAB21 LISH ALTERNATIVE TO TORT LITIGATION.— 

22 ‘‘(i) IN GENERAL.—Nothing in this 

23 section shall be construed to limit the ef24 forts that any State has made prior to the 


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1 date of enactment of this section to estab2 lish any alternative to tort litigation. 

3 ‘‘(ii) ALTERNATIVE FOR PRACTICE

4 AREAS OR INJURIES.—In the case of a 

5 State that has established an alternative to 

6 tort litigation for a certain area of health 

7 care practice or a category of injuries, the 

8 alternative selected as provided for in this 

9 section shall supplement not replace or in10 validate such established alternative unless 

11 the State intends otherwise. 

12 ‘‘(6) NOTIFICATION OF PATIENTS.—To be eligi13 ble to receive a grant under subsection (a), the State 

14 shall demonstrate how patients will be notified when 

15 they are receiving health care services that fall with16 in the scope of the alternative selected under this 

17 section by the State to current tort litigation. 

18 ‘‘(c) REPRESENTATION BY COUNSEL.—A State that 

19 receives a grant under this section may not preclude any 

20 party to a dispute that falls within the jurisdiction of the 

21 alternative to current tort litigation that is implemented 

22 under the grant from obtaining legal representation at any 

23 point during the consideration of the claim under such al24 ternative. 

25 ‘‘(d) MODELS.— 


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1 ‘‘(1) IN GENERAL.—The models in this section 

2 are the following: 

3 ‘‘(2) EXPERT PANEL REVIEW AND EARLY

4 OFFER GUIDELINES.— 

5 ‘‘(A) IN GENERAL.—A State may use 

6 amounts received under a grant under this sec7 tion to develop and implement an expert panel 

8 and early offer review system that meets the re9 quirements of this paragraph. 

10 ‘‘(B) ESTABLISHMENT OF PANEL.—Under 

11 the system under this paragraph, the State 

12 shall establish an expert panel to review any 

13 disputes concerning injuries allegedly caused by 

14 health care providers or health care organiza15 tions according to the guidelines described in 

16 this paragraph. 

17 ‘‘(C) COMPOSITION.— 

18 ‘‘(i) IN GENERAL.—An expert panel 

19 under this paragraph shall be composed of 

20 3 medical experts (either physicians or 

21 health care professionals) and 3 attorneys 

22 to be appointed by the head of the State 

23 agency responsible for health. 

24 ‘‘(ii) LICENSURE AND EXPERTISE.— 

25 Each physician or health care professional 


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1 appointed to an expert panel under clause 

2 (i) shall— 

3 ‘‘(I) be appropriately credentialed 

4 or licensed in the State in which the 

5 dispute takes place to deliver health 

6 care services; and 

7 ‘‘(II) typically treat the condi8 tion, make the diagnosis, or provide 

9 the type of treatment that is under re10 view. 

11 ‘‘(iii) INDEPENDENCE.— 

12 ‘‘(I) IN GENERAL.—Subject to 

13 subclause (II), each individual ap14 pointed to an expert panel under this 

15 paragraph shall— 

16 ‘‘(aa) not have a material 

17 familial, financial, or professional 

18 relationship with a party involved 

19 in the dispute reviewed by the 

20 panel; and 

21 ‘‘(bb) not otherwise have a 

22 conflict of interest with such a 

23 party. 

24 ‘‘(II) EXCEPTION.—Nothing in 

25 subclause (I) shall be construed to 


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1 prohibit an individual who has staff 

2 privileges at an institution where the 

3 treatment involved in the dispute was 

4 provided from serving as a member of 

5 an expert panel merely on the basis of 

6 such affiliation, if the affiliation is 

7 disclosed to the parties and neither 

8 party objects. 

9 ‘‘(iv) PRACTICING HEALTH CARE PRO10 FESSIONAL IN SAME FIELD.— 

11 ‘‘(I) IN GENERAL.—In a dispute 

12 before an expert panel that involves 

13 treatment, or the provision of items or 

14 services— 

15 ‘‘(aa) by a physician, the 

16 medical experts on the expert 

17 panel shall be practicing physi18 cians (allopathic or osteopathic) 

19 of the same or similar specialty 

20 as a physician who typically 

21 treats the condition, makes the 

22 diagnosis, or provides the type of 

23 treatment under review; or 

24 ‘‘(bb) by a health care pro25 fessional other than a physician, 


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1 at least two medical experts on 

2 the expert panel shall be prac3 ticing physicians (allopathic or 

4 osteopathic) of the same or simi5 lar specialty as the health care 

6 professional who typically treats 

7 the condition, makes the diag8 nosis, or provides the type of 

9 treatment under review, and, if 

10 determined appropriate by the 

11 State agency, the third medical 

12 expert shall be a practicing 

13 health care professional (other 

14 than such a physician) of such a 

15 same or similar specialty. 

16 ‘‘(II) PRACTICING DEFINED.—In 

17 this paragraph, the term ‘practicing’ 

18 means, with respect to an individual 

19 who is a physician or other health 

20 care professional, that the individual 

21 provides health care services to indi22 vidual patients on average at least 2 

23 days a week. 

24 ‘‘(v) PEDIATRIC EXPERTISE.—In the 

25 case of dispute relating to a child, at least 


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1 1 medical expert on the expert panel shall 

2 have expertise described in clause (iv)(I) in 

3 pediatrics. 

4 ‘‘(D) DETERMINATION.—After a review, 

5 an expert panel shall make a determination as 

6 to the liability of the parties involved and com7 pensation based on a schedule of compensation 

8 that is developed by the panel. Such a schedule 

9 shall at least include— 

10 ‘‘(i) payment for the net economic loss 

11 incurred by the patient, on a periodic 

12 basis, reduced by any payments received by 

13 the patient under— 

14 ‘‘(I) any health or accident insur15 ance; 

16 ‘‘(II) any wage or salary continu17 ation plan; or 

18 ‘‘(III) any disability income in19 surance; 

20 ‘‘(ii) payment for the non-economic 

21 damages incurred by the patient, if appro22 priate for the injury, based on a defined 

23 payment schedule developed by the State, 

24 in consultation with relevant experts and 

25 with the Secretary; 


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1 ‘‘(iii) reasonable attorney’s fees; and 

2 ‘‘(iv) regular updates of the schedule 

3 under clause (ii) as necessary. 

4 ‘‘(E) ACCEPTANCE.—If the parties to a 

5 dispute who come before an expert panel under 

6 this paragraph accept the determination of the 

7 expert panel concerning liability and compensa8 tion, such compensation shall be paid to the 

9 claimant and the claimant shall agree to forgo 

10 any further action against the health care pro11 viders or health care organizations involved. 

12 ‘‘(F) FAILURE TO ACCEPT.—If any party 

13 decides not to accept the expert panel’s deter14 mination under this paragraph, the State may 

15 choose whether to allow the panel to review the 

16 determination de novo, with deference, or to 

17 provide an opportunity for parties to reject the 

18 determination of the panel. 

19 ‘‘(G) REVIEW BY STATE COURT AFTER EX20 HAUSTION OF ADMINISTRATIVE REMEDIES.— 

21 ‘‘(i) RIGHT TO FILE.—If the State 

22 elects not to permit the expert panel under 

23 this paragraph to conduct its own reviews 

24 of determinations, or if the State elects to 

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1 isfied with the final decision of the panel 

2 after such a review, the party shall have 

3 the right to file a claim relating to the in4 jury involved in a State court of competent 

5 jurisdiction. 

6 ‘‘(ii) FORFEIT OF AWARDS.—Any 

7 party filing an action in a State court 

8 under clause (i) shall forfeit any compensa9 tion award made under subparagraph (C). 

10 ‘‘(iii) ADMISSIBILITY.—The deter11 minations of the expert panel pursuant to 

12 a review under subparagraph (C) shall be 

13 admissible into evidence in any State court 

14 proceeding under this subparagraph. 

15 ‘‘(3) ADMINISTRATIVE HEALTH CARE TRIBU16 NALS.— 

17 ‘‘(A) IN GENERAL.—A State may use 

18 amounts received under a grant under this sec19 tion to develop and implement an administra20 tive health care tribunal system under which 

21 the parties involved shall have the right to re22 quest a hearing to review any dispute con23 cerning injuries allegedly caused by health care 

24 providers or health care organizations before an 


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1 administrative health care tribunal established 

2 by the State involved. 

3 ‘‘(B) REQUIREMENTS.—In establishing an 

4 administrative health care tribunal under this 

5 paragraph, a State shall— 

6 ‘‘(i) ensure that such tribunals are 

7 presided over by special judges with health 

8 care expertise who meet applicable State 

9 standards for judges and who agree to pre10 side over such court voluntarily; 

11 ‘‘(ii) provide authority to such judges 

12 to make binding rulings, rendered in writ13 ten decisions, on standards of care, causa14 tion, compensation, and related issues with 

15 reliance on independent expert witnesses 

16 commissioned by the tribunal; 

17 ‘‘(iii) establish a legal standard for 

18 the tribunal that shall be the same as the 

19 standard that would apply in the State 

20 court of competent jurisdiction which 

21 would otherwise handle the claim; and 

22 ‘‘(iv) provide for an appeals process to 

23 allow for review of decisions by State 

24 courts. 


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1 ‘‘(C) DETERMINATION.—After a tribunal 

2 conducts a review under this paragraph, the tri3 bunal shall make a determination as to the li4 ability of the parties involved and the amount 

5 of compensation that should be paid based on 

6 a schedule of compensation developed by the 

7 tribunal. Such a schedule shall at a minimum 

8 include— 

9 ‘‘(i) payment for the net economic loss 

10 incurred by the patient, on a periodic 

11 basis, reduced by any payments received by 

12 the patient under— 

13 ‘‘(I) any health or accident insur14 ance; 

15 ‘‘(II) any wage or salary continu16 ation plan; or 

17 ‘‘(III) any disability income in18 surance; 

19 ‘‘(ii) payment for the non-economic 

20 damages incurred by the patient, if appro21 priate for the injury, based on a defined 

22 payment schedule developed by the State 

23 in consultation with relevant experts and 

24 with the Secretary; 

25 ‘‘(iii) reasonable attorney’s fees; and 


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1 ‘‘(iv) regular updates of the schedule 

2 under clause (ii) as necessary. 

3 ‘‘(D) REVIEW BY STATE COURT AFTER EX4 HAUSTION OF ADMINISTRATIVE REMEDIES.— 

5 ‘‘(i) RIGHT TO FILE.—Nothing in this 

6 paragraph shall be construed to prohibit 

7 any individual who is not satisfied with the 

8 determinations of a tribunal under this 

9 paragraph, from filing a claim for the in10 jury involved in a State court of competent 

11 jurisdiction. 

12 ‘‘(ii) FORFEIT OF AWARD.—Any party 

13 filing an action in a State court under 

14 clause (i) shall forfeit any compensation 

15 award made under subparagraph (C). 

16 ‘‘(iii) ADMISSIBILITY.—The deter17 minations of the tribunal under subpara18 graph (C) shall be admissible into evidence 

19 in any State court proceeding under this 

20 subparagraph. 

21 ‘‘(4) EXPERT PANEL REVIEW AND ADMINISTRA22 TIVE HEALTH CARE TRIBUNAL COMBINATION

23 MODEL.— 

24 ‘‘(A) IN GENERAL.—A State may use 

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1 tion to develop and implement an expert panel 

2 review and administrative health care tribunal 

3 combination system to review any dispute con4 cerning injuries allegedly caused by health care 

5 providers or health care organizations. Under 

6 such system, a dispute concerning injuries al7 legedly caused by health care providers or 

8 health care organizations shall proceed through 

9 the procedures described in this subparagraph 

10 prior to the submission of such dispute to a 

11 State court. 

12 ‘‘(B) GENERAL PROCEDURE.— 

13 ‘‘(i) ESTABLISHMENT OF EXPERT

14 PANEL.—Prior to submitting any dispute 

15 described in subparagraph (A) to an ad16 ministrative health care tribunal under the 

17 system established under this paragraph, 

18 the State shall establish an expert panel 

19 (in accordance with subparagraph (C)) to 

20 review the allegations involved in such dis21 pute. 

22 ‘‘(ii) REFERRAL TO TRIBUNAL.—If ei23 ther party to a dispute described in clause 

24 (i) fails to accept the determination of the 

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1 ferred to an administrative health care tri2 bunal (in accordance with subparagraph 

3 (D). 

4 ‘‘(C) EXPERT REVIEW PANEL.— 

5 ‘‘(i) IN GENERAL.—The provisions of 

6 paragraph (2) shall apply with respect to 

7 the establishment and operation of an ex8 pert review panel under this subparagraph, 

9 except that the subparagraphs (F) and (G) 

10 of such paragraph shall not apply. 

11 ‘‘(ii) FAILURE TO ACCEPT DETER12 MINATION OF PANEL.—If any party to a 

13 dispute before an expert panel under this 

14 subparagraph refuses to accept the panel’s 

15 determination, the dispute shall be referred 

16 to an administrative health care tribunal 

17 under subparagraph (D). 

18 ‘‘(D) ADMINISTRATIVE HEALTH CARE TRI19 BUNALS.— 

20 ‘‘(i) IN GENERAL.—Upon the failure 

21 of any party to accept the determination of 

22 an expert panel under subparagraph (C), 

23 the parties shall request a hearing con24 cerning the liability or compensation in25 volved by an administrative health care triVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00187 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 bunal established by the State involved 

2 under this subparagraph. 

3 ‘‘(ii) REQUIREMENTS.—The provisions 

4 of paragraph (3) shall apply with respect 

5 to the establishment and operation of an 

6 administrative health care tribunal under 

7 this subparagraph. 

8 ‘‘(iii) FORFEIT OF AWARDS.—Any 

9 party proceeding to the second step-admin10 istrative health care tribunal-under this 

11 model shall forfeit any compensation 

12 awarded by the expert panel. 

13 ‘‘(iv) ADMISSIBILITY.—The deter14 minations of the expert panel under sub15 paragraph (C) shall be admissible into evi16 dence in any administrative health care tri17 bunal proceeding under this subparagraph. 

18 ‘‘(E) RIGHT TO FILE.—Nothing in this 

19 paragraph shall be construed to prohibit any in20 dividual who is not satisfied with the deter21 mination of the tribunal (after having proceeded 

22 through both the expert panel under subpara23 graph (C) and the tribunal under subparagraph 

24 (D)) from filing a claim for the injury involved 

25 in a State court of competent jurisdiction. 


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1 ‘‘(F) ADMISSIBILITY.—The determinations 

2 of both the expert panel and the tribunal under 

3 this paragraph shall be admissible into evidence 

4 in any State court proceeding under this para5 graph. 

6 ‘‘(G) FORFEIT OF AWARDS.—Any party fil7 ing an action in State court under subpara8 graph (E) shall forfeit any compensation award 

9 made by both the expert panel and the adminis10 trative health care tribunal under this para11 graph. 

12 ‘‘(e) DEFINITIONS.—In this section: 

13 ‘‘(1) CURRENT TORT LITIGATION.—The term 

14 ‘current tort litigation’ means the tort litigation sys15 tem existing in the State on the date on which the 

16 State submits an application under subsection 

17 (b)(1), for the resolution of disputes concerning inju18 ries allegedly caused by health care providers or 

19 health care organizations. 

20 ‘‘(2) HEALTH CARE ORGANIZATION.—The term 

21 ‘health care organization’ means any individual or 

22 entity that is obligated to provide, pay for, or admin23 ister health benefits under any health plan. 

24 ‘‘(3) NET ECONOMIC LOSS.—The term ‘net eco25 nomic loss’ means— 


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1 ‘‘(A) reasonable expenses incurred for 

2 products, services and accommodations needed 

3 for health care, training and other remedial 

4 treatment and care of an injured individual; 

5 ‘‘(B) reasonable and appropriate expenses 

6 for rehabilitation treatment and occupational 

7 training; 

8 ‘‘(C) 100 percent of the loss of income 

9 from work that an injured individual would 

10 have performed if not injured, reduced by any 

11 income from substitute work actually per12 formed; and 

13 ‘‘(D) reasonable expenses incurred in ob14 taining ordinary and necessary services to re15 place services an injured individual would have 

16 performed for the benefit of the individual or 

17 the family of such individual if the individual 

18 had not been injured. 

19 ‘‘(4) NON-ECONOMIC DAMAGES.—The term 

20 ‘non-economic damages’ means losses for physical 

21 and emotional pain, suffering, inconvenience, phys22 ical impairment, mental anguish, disfigurement, loss 

23 of enjoyment of life, loss of society and companion24 ship, loss of consortium (other than loss of domestic 

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1 cuniary losses of any kind or nature, to the extent 

2 permitted under State law. 

3 ‘‘(f) FUNDING.— 

4 ‘‘(1) ONE-TIME INCREASE IN MEDICAID PAY5 MENT.—In the case of a State awarded a grant to 

6 carry out this section, the total amount of the Fed7 eral payment determined for the State under section 

8 1913 of the Social Security Act (as amended by sec9 tion 401) for fiscal year 2011 (in addition to the any 

10 increase applicable for that fiscal year under section 

11 203(b) but determined without regard to any such 

12 increase) shall be increased by an amount equal to 

13 1 percent of the total amount of payments made to 

14 the State for fiscal year 2010 under section 1903(a) 

15 of the Social Security Act (42 U.S.C. 1396b(a)) for 

16 purposes of carrying out a grant awarded under this 

17 section. Amounts paid to a State pursuant to this 

18 subsection shall remain available until expended. 

19 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

20 There are authorized to be appropriated for any fis21 cal year such sums as may be necessary for purposes 

22 of making payments to States pursuant to para23 graph (1).’’. 


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1 TITLE VII—PROMOTING HEALTH 

2 INFORMATION TECHNOLOGY 

3 Subtitle A—Assisting the Develop4 ment of Health Information 

5 Technology 

6 SEC. 701. PURPOSE. 

7 It is the purpose of this subtitle to promote the utili8 zation of health record banking by improving the coordina9 tion of health information through an infrastructure for 

10 the secure and authorized exchange and use of healthcare 

11 information. 

12 SEC. 702. HEALTH RECORD BANKING. 

13 (a) ESTABLISHMENT.—Not later than 1 year after 

14 the date of enactment of this Act, the Secretary of Health 

15 and Human Services shall promulgate regulations to pro16 vide for the certification and auditing of the banking of 

17 electronic medical records. 

18 (b) GENERAL RIGHTS.—An individual who has a 

19 health record contained in a health record bank shall 

20 maintain ownership over the health record and shall have 

21 the right to review the contents of the record. 

22 SEC. 703. APPLICATION OF FEDERAL AND STATE SECURITY 

23 AND CONFIDENTIALITY STANDARDS. 

24 (a) IN GENERAL.—Current Federal security and con25 fidentiality standards and State security and confidenVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00192 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 tiality laws shall apply to this subtitle until such time as 

2 Congress acts to amend such standards. 

3 (b) DEFINITIONS.—In this section: 

4 (1) CURRENT FEDERAL SECURITY AND CON5 FIDENTIALITY STANDARDS.—The term ‘‘current 

6 Federal security and confidentiality standards’’ 

7 means the Federal privacy standards established 

8 pursuant to section 264(c) of the Health Insurance 

9 Portability and Accountability Act of 1996 (42 

10 U.S.C. 1320d–2 note) and security standards estab11 lished under section 1173(d) of the Social Security 

12 Act (42 U.S.C. 1320d–2(d)). 

13 (2) STATE SECURITY AND CONFIDENTIALITY

14 LAWS.—The term ‘‘State security and confidentiality 

15 laws’’ means State laws and regulations relating to 

16 the privacy and confidentiality of individually identi17 fiable health information or to the security of such 

18 information. 

19 (3) STATE.—The term ‘‘State’’ has the mean20 ing given such term for purposes of title XI of the 

21 Social Security Act, as provided under section 

22 1101(a) of such Act (42 U.S.C. 1301(a)). 


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1 Subtitle B—Removing Barriers to 

2 the Use of Health Information 

3 Technology to Better Coordi4 nate Health Care 

5 SEC. 711. SAFE HARBORS TO ANTIKICKBACK CIVIL PEN6 ALTIES AND CRIMINAL PENALTIES FOR PRO7 VISION OF HEALTH INFORMATION TECH8 NOLOGY AND TRAINING SERVICES. 

9 (a) FOR CIVIL PENALTIES.—Section 1128A of the 

10 Social Security Act (42 U.S.C. 1320a–7a) is amended— 

11 (1) in subsection (b), by adding at the end the 

12 following new paragraph: 

13 ‘‘(4) For purposes of this subsection, inducements to 

14 reduce or limit services described in paragraph (1) shall 

15 not include the practical or other advantages resulting 

16 from health information technology or related installation, 

17 maintenance, support, or training services.’’; and 

18 (2) in subsection (i), by adding at the end the 

19 following new paragraph: 

20 ‘‘(8) The term ‘health information technology’ 

21 means hardware, software, license, right, intellectual 

22 property, equipment, or other information tech23 nology (including new versions, upgrades, and 

24 connectivity) designed or provided primarily for the 

25 electronic creation, maintenance, or exchange of 


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1 health information to better coordinate care or im2 prove health care quality, efficiency, or research.’’. 

3 (b) FOR CRIMINAL PENALTIES.—Section 1128B of 

4 such Act (42 U.S.C. 1320a–7b) is amended— 

5 (1) in subsection (b)(3)— 

6 (A) in subparagraph (G), by striking 

7 ‘‘and’’ at the end; 

8 (B) in the subparagraph (H) added by sec9 tion 237(d) of the Medicare Prescription Drug, 

10 Improvement, and Modernization Act of 2003 

11 (Public Law 108–173; 117 Stat. 2213)— 

12 (i) by moving such subparagraph 2 

13 ems to the left; and 

14 (ii) by striking the period at the end 

15 and inserting a semicolon; 

16 (C) in the subparagraph (H) added by sec17 tion 431(a) of such Act (117 Stat. 2287)— 

18 (i) by redesignating such subpara19 graph as subparagraph (I); 

20 (ii) by moving such subparagraph 2 

21 ems to the left; and 

22 (iii) by striking the period at the end 

23 and inserting ‘‘; and’’; and 

24 (D) by adding at the end the following new 

25 subparagraph: 


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1 ‘‘(J) any nonmonetary remuneration (in the 

2 form of health information technology, as defined in 

3 section 1128A(i)(8), or related installation, mainte4 nance, support or training services) made to a per5 son by a specified entity (as defined in subsection 

6 (g)) if— 

7 ‘‘(i) the provision of such remuneration is 

8 without an agreement between the parties or 

9 legal condition that— 

10 ‘‘(I) limits or restricts the use of the 

11 health information technology to services 

12 provided by the physician to individuals re13 ceiving services at the specified entity; 

14 ‘‘(II) limits or restricts the use of the 

15 health information technology in conjunc16 tion with other health information tech17 nology; or 

18 ‘‘(III) conditions the provision of such 

19 remuneration on the referral of patients or 

20 business to the specified entity; 

21 ‘‘(ii) such remuneration is arranged for in 

22 a written agreement that is signed by the par23 ties involved (or their representatives) and that 

24 specifies the remuneration solicited or received 

25 (or offered or paid) and states that the proviVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00196 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 sion of such remuneration is made for the pri2 mary purpose of better coordination of care or 

3 improvement of health quality, efficiency, or re4 search; and 

5 ‘‘(iii) the specified entity providing the re6 muneration (or a representative of such entity) 

7 has not taken any action to disable any basic 

8 feature of any hardware or software component 

9 of such remuneration that would permit inter10 operability.’’; and 

11 (2) by adding at the end the following new sub12 section: 

13 ‘‘(g) SPECIFIED ENTITY DEFINED.—For purposes of 

14 subsection (b)(3)(J), the term ‘specified entity’ means an 

15 entity that is a hospital, group practice, prescription drug 

16 plan sponsor, a Medicare Advantage organization, or any 

17 other such entity specified by the Secretary, considering 

18 the goals and objectives of this section, as well as the goals 

19 to better coordinate the delivery of health care and to pro20 mote the adoption and use of health information tech21 nology.’’. 

22 (c) EFFECTIVE DATE AND EFFECT ON STATE

23 LAWS.— 

24 (1) EFFECTIVE DATE.—The amendments made 

25 by subsections (a) and (b) shall take effect on the 


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1 date that is 120 days after the date of the enact2 ment of this Act. 

3 (2) PREEMPTION OF STATE LAWS.—No State 

4 (as defined in section 1101(a) of the Social Security 

5 Act (42 U.S.C. 1301(a)) for purposes of title XI of 

6 such Act) shall have in effect a State law that im7 poses a criminal or civil penalty for a transaction de8 scribed in section 1128A(b)(4) or section 

9 1128B(b)(3)(J) of such Act, as added by subsections 

10 (a)(1) and (b), respectively, if the conditions de11 scribed in the respective provision, with respect to 

12 such transaction, are met. 

13 (d) STUDY AND REPORT TO ASSESS EFFECT OF

14 SAFE HARBORS ON HEALTH SYSTEM.— 

15 (1) IN GENERAL.—The Secretary of Health and 

16 Human Services shall conduct a study to determine 

17 the impact of each of the safe harbors described in 

18 paragraph (3). In particular, the study shall examine 

19 the following: 

20 (A) The effectiveness of each safe harbor 

21 in increasing the adoption of health information 

22 technology. 

23 (B) The types of health information tech24 nology provided under each safe harbor. 


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1 (C) The extent to which the financial or 

2 other business relationships between providers 

3 under each safe harbor have changed as a re4 sult of the safe harbor in a way that adversely 

5 affects or benefits the health care system or 

6 choices available to consumers. 

7 (D) The impact of the adoption of health 

8 information technology on health care quality, 

9 cost, and access under each safe harbor. 

10 (2) REPORT.—Not later than 3 years after the 

11 effective date described in subsection (c)(1), the Sec12 retary of Health and Human Services shall submit 

13 to Congress a report on the study under paragraph 

14 (1). 

15 (3) SAFE HARBORS DESCRIBED.—For purposes 

16 of paragraphs (1) and (2), the safe harbors de17 scribed in this paragraph are— 

18 (A) the safe harbor under section 

19 1128A(b)(4) of such Act (42 U.S.C. 1320a– 

20 7a(b)(4)), as added by subsection (a)(1); and 

21 (B) the safe harbor under section 

22 1128B(b)(3)(J) of such Act (42 U.S.C. 1320a– 

23 7b(b)(3)(J)), as added by subsection (b). 


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1 SEC. 712. EXCEPTION TO LIMITATION ON CERTAIN PHYSI2 CIAN REFERRALS (UNDER STARK) FOR PRO3 VISION OF HEALTH INFORMATION TECH4 NOLOGY AND TRAINING SERVICES TO 

5 HEALTH CARE PROFESSIONALS. 

6 (a) IN GENERAL.—Section 1877(b) of the Social Se7 curity Act (42 U.S.C. 1395nn(b)) is amended by adding 

8 at the end the following new paragraph: 

9 ‘‘(6) INFORMATION TECHNOLOGY AND TRAIN10 ING SERVICES.— 

11 ‘‘(A) IN GENERAL.—Any nonmonetary re12 muneration (in the form of health information 

13 technology or related installation, maintenance, 

14 support or training services) made by a speci15 fied entity to a physician if— 

16 ‘‘(i) the provision of such remunera17 tion is without an agreement between the 

18 parties or legal condition that— 

19 ‘‘(I) limits or restricts the use of 

20 the health information technology to 

21 services provided by the physician to 

22 individuals receiving services at the 

23 specified entity; 

24 ‘‘(II) limits or restricts the use of 

25 the health information technology in 


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1 conjunction with other health informa2 tion technology; or 

3 ‘‘(III) conditions the provision of 

4 such remuneration on the referral of 

5 patients or business to the specified 

6 entity; 

7 ‘‘(ii) such remuneration is arranged 

8 for in a written agreement that is signed 

9 by the parties involved (or their represent10 atives) and that specifies the remuneration 

11 made and states that the provision of such 

12 remuneration is made for the primary pur13 pose of better coordination of care or im14 provement of health quality, efficiency, or 

15 research; and 

16 ‘‘(iii) the specified entity (or a rep17 resentative of such entity) has not taken 

18 any action to disable any basic feature of 

19 any hardware or software component of 

20 such remuneration that would permit 

21 interoperability. 

22 ‘‘(B) HEALTH INFORMATION TECHNOLOGY

23 DEFINED.—For purposes of this paragraph, the 

24 term ‘health information technology’ means 

25 hardware, software, license, right, intellectual 


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1 property, equipment, or other information tech2 nology (including new versions, upgrades, and 

3 connectivity) designed or provided primarily for 

4 the electronic creation, maintenance, or ex5 change of health information to better coordi6 nate care or improve health care quality, effi7 ciency, or research. 

8 ‘‘(C) SPECIFIED ENTITY DEFINED.—For 

9 purposes of this paragraph, the term ‘specified 

10 entity’ means an entity that is a hospital, group 

11 practice, prescription drug plan sponsor, a 

12 Medicare Advantage organization, or any other 

13 such entity specified by the Secretary, consid14 ering the goals and objectives of this section, as 

15 well as the goals to better coordinate the deliv16 ery of health care and to promote the adoption 

17 and use of health information technology.’’. 

18 (b) EFFECTIVE DATE; EFFECT ON STATE LAWS.— 

19 (1) EFFECTIVE DATE.—The amendment made 

20 by subsection (a) shall take effect on the date that 

21 is 120 days after the date of the enactment of this 

22 Act. 

23 (2) PREEMPTION OF STATE LAWS.—No State 

24 (as defined in section 1101(a) of the Social Security 

25 Act (42 U.S.C. 1301(a)) for purposes of title XI of 


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1 such Act) shall have in effect a State law that im2 poses a criminal or civil penalty for a transaction de3 scribed in section 1877(b)(6) of such Act, as added 

4 by subsection (a), if the conditions described in such 

5 section, with respect to such transaction, are met. 

6 (c) STUDY AND REPORT TO ASSESS EFFECT OF EX7 CEPTION ON HEALTH SYSTEM.— 

8 (1) IN GENERAL.—The Secretary of Health and 

9 Human Services shall conduct a study to determine 

10 the impact of the exception under section 1877(b)(6) 

11 of such Act (42 U.S.C. 1395nn(b)(6)), as added by 

12 subsection (a). In particular, the study shall examine 

13 the following: 

14 (A) The effectiveness of the exception in 

15 increasing the adoption of health information 

16 technology. 

17 (B) The types of health information tech18 nology provided under the exception. 

19 (C) The extent to which the financial or 

20 other business relationships between providers 

21 under the exception have changed as a result of 

22 the exception in a way that adversely affects or 

23 benefits the health care system or choices avail24 able to consumers. 


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1 (D) The impact of the adoption of health 

2 information technology on health care quality, 

3 cost, and access under the exception. 

4 (2) REPORT.—Not later than 3 years after the 

5 effective date described in subsection (b)(1), the Sec6 retary of Health and Human Services shall submit 

7 to Congress a report on the study under paragraph 

8 (1). 

9 SEC. 713. RULES OF CONSTRUCTION REGARDING USE OF 

10 CONSORTIA. 

11 (a) APPLICATION TO SAFE HARBOR FROM CRIMINAL

12 PENALTIES.—Section 1128B(b)(3) of the Social Security 

13 Act (42 U.S.C. 1320a–7b(b)(3)) is amended by adding 

14 after and below subparagraph (J), as added by section 

15 711(b)(1), the following: ‘‘For purposes of subparagraph 

16 (J), nothing in such subparagraph shall be construed as 

17 preventing a specified entity, consistent with the specific 

18 requirements of such subparagraph, from forming a con19 sortium composed of health care providers, payers, em20 ployers, and other interested entities to collectively pur21 chase and donate health information technology, or from 

22 offering health care providers a choice of health informa23 tion technology products in order to take into account the 

24 varying needs of such providers receiving such products.’’. 


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1 (b) APPLICATION TO STARK EXCEPTION.—Para2 graph (6) of section 1877(b) of the Social Security Act 

3 (42 U.S.C. 1395nn(b)), as added by section 712(a), is 

4 amended by adding at the end the following new subpara5 graph: 

6 ‘‘(D) RULE OF CONSTRUCTION.—For pur7 poses of subparagraph (A), nothing in such 

8 subparagraph shall be construed as preventing 

9 a specified entity, consistent with the specific 

10 requirements of such subparagraph, from— 

11 ‘‘(i) forming a consortium composed 

12 of health care providers, payers, employers, 

13 and other interested entities to collectively 

14 purchase and donate health information 

15 technology; or 

16 ‘‘(ii) offering health care providers a 

17 choice of health information technology 

18 products in order to take into account the 

19 varying needs of such providers receiving 

20 such products.’’. 


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1 TITLE VIII—HEALTH CARE 

2 SERVICES COMMISSION 

3 Subtitle A—Establishment and 

4 General Duties 

5 SEC. 801. ESTABLISHMENT. 

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

7 Health Care Services Commission (in this title, referred 

8 to as the ‘‘Commission’’) to be composed of 5 commis9 sioners (in this title referred to as the ‘‘Commissioners’’) 

10 to be appointed by the President by and with the advice 

11 and consent of the Senate. Not more than 3 of such Com12 missioners shall be members of the same political party, 

13 and in making appointments members of different political 

14 parties shall be appointed alternately as nearly as may be 

15 practicable. No Commissioner shall engage in any other 

16 business, vocation, or employment than that of serving as 

17 Commissioner. Each Commissioner shall hold office for a 

18 term of 5 years and until a successor is appointed and 

19 has qualified, except that— 

20 (1) such Commissioner shall not so continue to 

21 serve beyond the expiration of the next session of 

22 Congress subsequent to the expiration of said fixed 

23 term of office; 

24 (2) any Commissioner appointed to fill a va25 cancy occurring prior to the expiration of the term 


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1 for which a predecessor was appointed shall be ap2 pointed for the remainder of such term; and 

3 (3) the terms of office of the Commissioners 

4 first taking office after the date of the enactment of 

5 this Act shall expire as designated by the President 

6 at the time of nomination, 1 at the end of 1 year, 

7 1 at the end of 2 years, 1 at the end of 3 years, 1 

8 at the end of 4 years, and 1 at the end of 5 years, 

9 after the date of the enactment of this Act. 

10 (b) PURPOSE.—The purpose of the Commission is to 

11 enhance the quality, appropriateness, and effectiveness of 

12 health care services, and access to such services, through 

13 the establishment of a broad base of scientific research 

14 and through the promotion of improvements in clinical 

15 practice and in the organization, financing, and delivery 

16 of health care services. 

17 (c) APPOINTMENT OF CHAIRMAN.—The President 

18 shall, from among the Commissioners appointed under 

19 subsection (a), designate an individual to serve as the 

20 Chairman of the Commission. 

21 SEC. 802. GENERAL AUTHORITIES AND DUTIES. 

22 (a) IN GENERAL.—In carrying out section 801(b), 

23 the Commissioners shall conduct and support research, 

24 demonstration projects, evaluations, training, guideline de25 velopment, and the dissemination of information, on 


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1 health care services and on systems for the delivery of 

2 such services, including activities with respect to— 

3 (1) the effectiveness, efficiency, and quality of 

4 health care services; 

5 (2) the outcomes of health care services and 

6 procedures; 

7 (3) clinical practice, including primary care and 

8 practice-oriented research; 

9 (4) health care technologies, facilities, and 

10 equipment; 

11 (5) health care costs, productivity, and market 

12 forces; 

13 (6) health promotion and disease prevention; 

14 (7) health statistics and epidemiology; and 

15 (8) medical liability. 

16 (b) REQUIREMENTS WITH RESPECT TO RURAL

17 AREAS AND UNDERSERVED POPULATIONS.—In carrying 

18 out subsection (a), the Commissioners shall undertake and 

19 support research, demonstration projects, and evaluations 

20 with respect to— 

21 (1) the delivery of health care services in rural 

22 areas (including frontier areas); and 

23 (2) the health of low-income groups, minority 

24 groups, and the elderly. 


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1 SEC. 803. DISSEMINATION. 

2 (a) IN GENERAL.—The Commissioners shall— 

3 (1) promptly publish, make available, and oth4 erwise disseminate, in a form understandable and on 

5 as broad a basis as practicable so as to maximize its 

6 use, the results of research, demonstration projects, 

7 and evaluations conducted or supported under this 

8 title and the guidelines, standards, and review cri9 teria developed under this title; 

10 (2) promptly make available to the public data 

11 developed in such research, demonstration projects, 

12 and evaluations; and 

13 (3) as appropriate, provide technical assistance 

14 to State and local government and health agencies 

15 and conduct liaison activities to such agencies to fos16 ter dissemination. 

17 (b) PROHIBITION AGAINST RESTRICTIONS.—Except 

18 as provided in subsection (c), the Commissioners may not 

19 restrict the publication or dissemination of data from, or 

20 the results of, projects conducted or supported under this 

21 title. 

22 (c) LIMITATION ON USE OF CERTAIN INFORMA23 TION.—No information, if an establishment or person sup24 plying the information or described in it is identifiable, 

25 obtained in the course of activities undertaken or sup26 ported under this title may be used for any purpose other 


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1 than the purpose for which it was supplied unless such 

2 establishment or person has consented (as determined 

3 under regulations of the Secretary) to its use for such 

4 other purpose. Such information may not be published or 

5 released in other form if the person who supplied the infor6 mation or who is described in it is identifiable unless such 

7 person has consented (as determined under regulations of 

8 the Secretary) to its publication or release in other form. 

9 (d) CERTAIN INTERAGENCY AGREEMENT.—The 

10 Commissioners and the Director of the National Library 

11 of Medicine shall enter into an agreement providing for 

12 the implementation of subsection (a)(1). 

13 Subtitle B—Forum for Quality and 

14 Effectiveness in Health Care 

15 SEC. 811. ESTABLISHMENT OF OFFICE. 

16 There is established within the Commission an office 

17 to be known as the Office of the Forum for Quality and 

18 Effectiveness in Health Care. The office shall be headed 

19 by a director (referred to in this title as the ‘‘Director’’) 

20 who shall be appointed by the Commissioners. 

21 SEC. 812. MEMBERSHIP. 

22 (a) IN GENERAL.—The Office of the Forum for Qual23 ity and Effectiveness in Health Care shall be composed 

24 of 15 individuals nominated by private sector health care 


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1 organizations and appointed by the Commission and shall 

2 include representation from at least the following: 

3 (1) Health insurance industry. 

4 (2) Health care provider groups. 

5 (3) Non-profit organizations. 

6 (4) Rural health organizations. 

7 (b) TERMS.— 

8 (1) IN GENERAL.—Except as provided in para9 graph (2), members of the Office of the Forum for 

10 Quality and Effectiveness in Health Care shall serve 

11 for a term of 5 years. 

12 (2) STAGGERED ROTATION.—Of the members 

13 first appointed to the Office of the Forum for Qual14 ity and Effectiveness in Health Care, the Commis15 sion shall appoint 5 members to serve for a term of 

16 2 years, 5 members to serve for a term of 3 years, 

17 and 5 members to serve for a term of 4 years. 

18 (c) TREATMENT OF OTHER EMPLOYMENT.—Each 

19 member of the Office of the Forum for Quality and Effec20 tiveness in Health Care shall serve the Office independ21 ently from any other position of employment. 

22 SEC. 813. DUTIES. 

23 (a) ESTABLISHMENT OF FORUM PROGRAM.—The 

24 Commissioners, acting through the Director, shall estab25 lish a program to be known as the Forum for Quality and 


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1 Effectiveness in Health Care. For the purpose of pro2 moting transparency in price, quality, appropriateness, 

3 and effectiveness of health care, the Director, using the 

4 process set forth in section 814, shall arrange for the de5 velopment and periodic review and updating of standards 

6 of quality, performance measures, and medical review cri7 teria through which health care providers and other appro8 priate entities may assess or review the provision of health 

9 care and assure the quality of such care. 

10 (b) CERTAIN REQUIREMENTS.—Guidelines, stand11 ards, performance measures, and review criteria under 

12 subsection (a) shall— 

13 (1) be based on the best available research and 

14 professional judgment regarding the effectiveness 

15 and appropriateness of health care services and pro16 cedures; and 

17 (2) be presented in formats appropriate for use 

18 by physicians, health care practitioners, providers, 

19 medical educators, and medical review organizations 

20 and in formats appropriate for use by consumers of 

21 health care. 

22 (c) AUTHORITY FOR CONTRACTS.—In carrying out 

23 this subtitle, the Director may enter into contracts with 

24 public or nonprofit private entities. 


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1 (d) PUBLIC DISCLOSURE OF RECOMMENDATIONS.— 

2 For each fiscal year beginning with 2010, the Director 

3 shall make publicly available the following: 

4 (1) Quarterly reports for public comment that 

5 include proposed recommendations for guidelines, 

6 standards, performance measures, and review cri7 teria under subsection (a) and any updates to such 

8 guidelines, standards, performance measures, and 

9 review criteria. 

10 (2) After consideration of such comments, a 

11 final report that contains final recommendations for 

12 such guidelines, standards, performance measures, 

13 review criteria, and updates. 

14 (e) DATE CERTAIN FOR INITIAL GUIDELINES AND

15 STANDARDS.—The Commissioners, by not later than Jan16 uary 1, 2012, shall assure the development of an initial 

17 set of guidelines, standards, performance measures, and 

18 review criteria under subsection (a). 

19 SEC. 814. ADOPTION AND ENFORCEMENT OF GUIDELINES 

20 AND STANDARDS. 

21 (a) ADOPTION OF RECOMMENDATIONS OF FORUM

22 FOR QUALITY AND EFFECTIVENESS IN HEALTH CARE.— 

23 For each fiscal year, the Commissioners shall adopt the 

24 recommendations made for such year in the final report 

25 under subsection (d)(2) of section 813 for guidelines, 


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1 standards, performance measures, and review criteria de2 scribed in subsection (a) of such section. 

3 (b) ENFORCEMENT AUTHORITY.—The Commis4 sioners, in consultation with the Secretary of Health and 

5 Human Services, have the authority to make recommenda6 tions to the Secretary to enforce compliance of health care 

7 providers with the guidelines, standards, performance 

8 measures, and review criteria adopted under subsection 

9 (a). Such recommendations may include the following, 

10 with respect to a health care provider who is not in compli11 ance with such guidelines, standards, measures, and cri12 teria: 

13 (1) Exclusion from participation in Federal 

14 health care programs (as defined in section 

15 1128B(f) of the Social Security Act (42 U.S.C. 

16 1320a–7b(f))). 

17 (2) Imposition of a civil money penalty on such 

18 provider. 

19 SEC. 815. ADDITIONAL REQUIREMENTS. 

20 (a) PROGRAM AGENDA.—The Commissioners shall 

21 provide for an agenda for the development of the guide22 lines, standards, performance measures, and review cri23 teria described in section 813(a), including with respect 

24 to the standards, performance measures, and review cri25 teria, identifying specific aspects of health care for which 


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1 the standards, performance measures, and review criteria 

2 are to be developed and those that are to be given priority 

3 in the development of the standards, performance meas4 ures, and review criteria. 

5 Subtitle C—General Provisions 

6 SEC. 821. CERTAIN ADMINISTRATIVE AUTHORITIES. 

7 The Commissioners, in carrying out this title, may 

8 accept voluntary and uncompensated services. 

9 SEC. 822. FUNDING. 

10 For the purpose of carrying out this title, there are 

11 authorized to be appropriated such sums as may be nec12 essary for fiscal years 2010 through 2014. 

13 SEC. 823. DEFINITIONS. 

14 For purposes of this title: 

15 (1) The term ‘‘Commissioners’’ means the Com16 missioners of the Health Care Services Commission. 

17 (2) The term ‘‘Commission’’ means the Health 

18 Care Services Commission. 

19 (3) The term ‘‘Director’’ means the Director of 

20 the Office of the Forum for Quality and Effective21 ness in Health Care. 

22 (4) The term ‘‘Secretary’’ means the Secretary 

23 of Health and Human Services. 


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1 Subtitle D—Terminations and 

2 Transition 

3 SEC. 831. TERMINATION OF AGENCY FOR HEALTHCARE RE4 SEARCH AND QUALITY. 

5 As of the date of the enactment of this Act, the Agen6 cy for Healthcare Research and Quality is terminated, and 

7 title IX of the Public Health Service Act is repealed. 

8 SEC. 832. TRANSITION. 

9 All orders, grants, contracts, privileges, and other de10 terminations or actions of the Agency for Healthcare Re11 search and Quality that are effective as of the date before 

12 the date of the enactment of this Act, shall be transferred 

13 to the Secretary and shall continue in effect according to 

14 their terms unless changed pursuant to law. 

15 Subtitle E—Independent Health 

16 Record Trust 

17 SEC. 841. SHORT TITLE. 

18 This subtitle may be cited as the ‘‘Independent 

19 Health Record Trust Act of 2009’’. 

20 SEC. 842. PURPOSE. 

21 It is the purpose of this subtitle to provide for the 

22 establishment of a nationwide health information tech23 nology network that— 

24 (1) improves health care quality, reduces med25 ical errors, increases the efficiency of care, and adVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00216 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 vances the delivery of appropriate, evidence-based 

2 health care services; 

3 (2) promotes wellness, disease prevention, and 

4 the management of chronic illnesses by increasing 

5 the availability and transparency of information re6 lated to the health care needs of an individual; 

7 (3) ensures that appropriate information nec8 essary to make medical decisions is available in a us9 able form at the time and in the location that the 

10 medical service involved is provided; 

11 (4) produces greater value for health care ex12 penditures by reducing health care costs that result 

13 from inefficiency, medical errors, inappropriate care, 

14 and incomplete information; 

15 (5) promotes a more effective marketplace, 

16 greater competition, greater systems analysis, in17 creased choice, enhanced quality, and improved out18 comes in health care services; 

19 (6) improves the coordination of information 

20 and the provision of such services through an effec21 tive infrastructure for the secure and authorized ex22 change and use of health information; and 

23 (7) ensures that the health information privacy, 

24 security, and confidentiality of individually identifi25 able health information is protected. 


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1 SEC. 843. DEFINITIONS. 

2 In this subtitle: 

3 (1) ACCESS.—The term ‘‘access’’ means, with 

4 respect to an electronic health record, entering infor5 mation into such account as well as retrieving infor6 mation from such account. 

7 (2) ACCOUNT.—The term ‘‘account’’ means an 

8 electronic health record of an individual contained in 

9 an independent health record trust. 

10 (3) AFFIRMATIVE CONSENT.—The term ‘‘af11 firmative consent’’ means, with respect to an elec12 tronic health record of an individual contained in an 

13 IHRT, express consent given by the individual for 

14 the use of such record in response to a clear and 

15 conspicuous request for such consent or at the indi16 vidual’s own initiative. 

17 (4) AUTHORIZED EHR DATA USER.—The term 

18 ‘‘authorized EHR data user’’ means, with respect to 

19 an electronic health record of an IHRT participant 

20 contained as part of an IHRT, any entity (other 

21 than the participant) authorized (in the form of af22 firmative consent) by the participant to access the 

23 electronic health record. 

24 (5) CONFIDENTIALITY.—The term ‘‘confiden25 tiality’’ means, with respect to individually identifi26 able health information of an individual, the obligaVerDate Nov 24 2008 21:49 May 29, 2009 Jkt 079200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6201 E:\BILLS\S1099.IS S1099

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1 tion of those who receive such information to respect 

2 the health information privacy of the individual. 

3 (6) ELECTRONIC HEALTH RECORD.—The term 

4 ‘‘electronic health record’’ means a longitudinal col5 lection of information concerning a single individual, 

6 including medical records and personal health infor7 mation, that is stored electronically. 

8 (7) HEALTH INFORMATION PRIVACY.—The 

9 term ‘‘health information privacy’’ means, with re10 spect to individually identifiable health information 

11 of an individual, the right of such individual to con12 trol the acquisition, uses, or disclosures of such in13 formation. 

14 (8) HEALTH PLAN.—The term ‘‘health plan’’ 

15 means a group health plan (as defined in section 

16 2208(1) of the Public Health Service Act (42 U.S.C. 

17 300bb–8(1))) as well as a plan that offers health in18 surance coverage in the individual market. 

19 (9) HIPAA PRIVACY REGULATIONS.—The term 

20 ‘‘HIPAA privacy regulations’’ means the regulations 

21 promulgated under section 264(c) of the Health In22 surance Portability and Accountability Act of 1996 

23 (42 U.S.C. 1320d–2 note). 

24 (10) INDEPENDENT HEALTH RECORD TRUST; 

25 IHRT.—The terms ‘‘independent health record trust’’ 


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1 and ‘‘IHRT’’ mean a legal arrangement under the 

2 administration of an IHRT operator that meets the 

3 requirements of this subtitle with respect to elec4 tronic health records of individuals participating in 

5 the trust or IHRT. 

6 (11) IHRT OPERATOR.—The term ‘‘IHRT op7 erator’’ means, with respect to an IHRT, the organi8 zation that is responsible for the administration and 

9 operation of the IHRT in accordance with this sub10 title. 

11 (12) IHRT PARTICIPANT.—The term ‘‘IHRT 

12 participant’’ means, with respect to an IHRT, an in13 dividual who has a participation agreement in effect 

14 with respect to the maintenance of the individual’s 

15 electronic health record by the IHRT. 

16 (13) INDIVIDUALLY IDENTIFIABLE HEALTH IN17 FORMATION.—The term ‘‘individually identifiable 

18 health information’’ has the meaning given such 

19 term in section 1171(6) of the Social Security Act 

20 (42 U.S.C. 1320d(6)). 

21 (14) SECURITY.—The term ‘‘security’’ means, 

22 with respect to individually identifiable health infor23 mation of an individual, the physical, technological, 

24 or administrative safeguards or tools used to protect 


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1 such information from unwarranted access or disclo2 sure. 

3 SEC. 844. ESTABLISHMENT, CERTIFICATION, AND MEMBER4 SHIP OF INDEPENDENT HEALTH RECORD 

5 TRUSTS. 

6 (a) ESTABLISHMENT.—Not later than one year after 

7 the date of the enactment of this Act, the Federal Trade 

8 Commission, in consultation with the National Committee 

9 on Vital and Health Statistics, shall prescribe standards 

10 for the establishment, certification, operation, and inter11 operability of IHRTs to carry out the purposes described 

12 in section 842 in accordance with the provisions of this 

13 subtitle. 

14 (b) CERTIFICATION.— 

15 (1) CERTIFICATION BY FTC.—The Federal 

16 Trade Commission shall provide for the certification 

17 of IHRTs. No IHRT may be certified unless the 

18 IHRT is determined to meet the standards for cer19 tification established under subsection (a). 

20 (2) DECERTIFICATION.—The Federal Trade 

21 Commission shall establish a process for the revoca22 tion of certification of an IHRT under this section 

23 in the case that the IHRT violates the standards es24 tablished under subsection (a). 

25 (c) MEMBERSHIP.— 


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1 (1) IN GENERAL.—To be eligible to be a partic2 ipant in an IHRT, an individual shall— 

3 (A) submit to the IHRT information as re4 quired by the IHRT to establish an electronic 

5 health record with the IHRT; and 

6 (B) enter into a privacy protection agree7 ment described in section 846(b)(1) with the 

8 IHRT. 

9 The process to determine eligibility of an individual 

10 under this subsection shall allow for the establish11 ment by such individual of an electronic health 

12 record as expeditiously as possible if such individual 

13 is determined so eligible. 

14 (2) NO LIMITATION ON MEMBERSHIP.—Nothing 

15 in this subsection shall be construed to permit an 

16 IHRT to restrict membership, including on the basis 

17 of health condition. 

18 SEC. 845. DUTIES OF IHRT TO IHRT PARTICIPANTS. 

19 (a) FIDUCIARY DUTY OF IHRT; PENALTIES FOR

20 VIOLATIONS OF FIDUCIARY DUTY.— 

21 (1) FIDUCIARY DUTY.—With respect to the 

22 electronic health record of an IHRT participant 

23 maintained by an IHRT, the IHRT shall have a fi24 duciary duty to act for the benefit and in the inter25 ests of such participant and of the IHRT as a whole. 


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1 Such duty shall include obtaining the affirmative 

2 consent of such participant prior to the release of in3 formation in such participant’s electronic health 

4 record in accordance with the requirements of this 

5 subtitle. 

6 (2) PENALTIES.—If the IHRT knowingly or 

7 recklessly breaches the fiduciary duty described in 

8 paragraph (1), the IHRT shall be subject to the fol9 lowing penalties: 

10 (A) Loss of certification of the IHRT. 

11 (B) A fine that is not in excess of $50,000. 

12 (C) A term of imprisonment for the indi13 viduals involved of not more than 5 years. 

14 (b) ELECTRONIC HEALTH RECORD DEEMED TO BE

15 HELD IN TRUST BY IHRT.—With respect to an indi16 vidual, an electronic health record maintained by an IHRT 

17 shall be deemed to be held in trust by the IHRT for the 

18 benefit of the individual and the IHRT shall have no legal 

19 or equitable interest in such electronic health record. 

20 SEC. 846. AVAILABILITY AND USE OF INFORMATION FROM 

21 RECORDS IN IHRT CONSISTENT WITH PRI22 VACY PROTECTIONS AND AGREEMENTS. 

23 (a) PROTECTED ELECTRONIC HEALTH RECORDS

24 USE AND ACCESS.— 


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1 (1) GENERAL RIGHTS REGARDING USES OF IN2 FORMATION.— 

3 (A) IN GENERAL.—With respect to the 

4 electronic health record of an IHRT participant 

5 maintained by an IHRT, subject to paragraph 

6 (2)(C), primary uses and secondary uses (de7 scribed in subparagraphs (B) and (C), respec8 tively) of information within such record (other 

9 than by such participant) shall be permitted 

10 only upon the authorization of such use, prior 

11 to such use, by such participant. 

12 (B) PRIMARY USES.—For purposes of sub13 paragraph (A) and with respect to an electronic 

14 health record of an individual, a primary use is 

15 a use for purposes of the individual’s self-care 

16 or care by health care professionals. 

17 (C) SECONDARY USES.—For purposes of 

18 subparagraph (B) and with respect to an elec19 tronic health record of an individual, a sec20 ondary use is any use not described in subpara21 graph (B) and includes a use for purposes of 

22 public health research or other related activi23 ties. Additional authorization is required for a 

24 secondary use extending beyond the original 

25 purpose of the secondary use authorized by the 


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1 IHRT participant involved. Nothing in this 

2 paragraph shall be construed as requiring au3 thorization for every secondary use that is with4 in the authorized original purpose. 

5 (2) RULES FOR PRIMARY USE OF RECORDS FOR

6 HEALTH CARE PURPOSES.—With respect to the elec7 tronic health record of an IHRT participant (or 

8 specified parts of such electronic health record) 

9 maintained by an IHRT standards for access to 

10 such record shall provide for the following: 

11 (A) ACCESS BY IHRT PARTICIPANTS TO

12 THEIR ELECTRONIC HEALTH RECORDS.— 

13 (i) OWNERSHIP.—The participant 

14 maintains ownership over the entire elec15 tronic health record (and all portions of 

16 such record) and shall have the right to 

17 electronically access and review the con18 tents of the entire record (and any portion 

19 of such record) at any time, in accordance 

20 with this subparagraph. 

21 (ii) ADDITION OF PERSONAL INFOR22 MATION.—The participant may add per23 sonal health information to the health 

24 record of that participant, except that such 

25 participant shall not alter information that 


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1 is entered into the electronic health record 

2 by any authorized EHR data user. Such 

3 participant shall have the right to propose 

4 an amendment to information that is en5 tered by an authorized EHR data user 

6 pursuant to standards prescribed by the 

7 Federal Trade Commission for purposes of 

8 amending such information. 

9 (iii) IDENTIFICATION OF INFORMA10 TION ENTERED BY PARTICIPANT.—Any ad11 ditions or amendments made by the partic12 ipant to the health record shall be identi13 fied and disclosed within such record as 

14 being made by such participant. 

15 (B) ACCESS BY ENTITIES OTHER THAN

16 IHRT PARTICIPANT.— 

17 (i) AUTHORIZED ACCESS ONLY.—Ex18 cept as provided under subparagraph (C) 

19 and paragraph (4), access to the electronic 

20 health record (or any portion of the 

21 record)— 

22 (I) may be made only by author23 ized EHR data users and only to such 

24 portions of the record as specified by 

25 the participant; and 


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1 (II) may be limited by the partic2 ipant for purposes of entering infor3 mation into such record, retrieving in4 formation from such record, or both. 

5 (ii) IDENTIFICATION OF ENTITY THAT

6 ENTERS INFORMATION.—Any information 

7 that is added by an authorized EHR data 

8 user to the health record shall be identified 

9 and disclosed within such record as being 

10 made by such user. 

11 (iii) SATISFACTION OF HIPAA PRIVACY

12 REGULATIONS.—In the case of a record of 

13 a covered entity (as defined for purposes of 

14 HIPAA privacy regulations), with respect 

15 to an individual, if such individual is an 

16 IHRT participant with an independent 

17 health record trust and such covered entity 

18 is an authorized EHR data user, the re19 quirement under the HIPAA privacy regu20 lations for such entity to provide the 

21 record to the participant shall be deemed 

22 met if such entity, without charge to the 

23 IHRT or the participant— 

24 (I) forwards to the trust an ap25 propriately formatted electronic copy 


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1 of the record (and updates to such 

2 records) for inclusion in the electronic 

3 health record of the participant main4 tained by the trust; 

5 (II) enters such record into the 

6 electronic health record of the partici7 pant so maintained; or 

8 (III) otherwise makes such 

9 record available for electronic access 

10 by the IHRT or the individual in a 

11 manner that permits such record to 

12 be included in the account of the indi13 vidual contained in the IHRT. 

14 (iv) NOTIFICATION OF SENSITIVE IN15 FORMATION.—Any information, with re16 spect to the participant, that is sensitive 

17 information, as specified by the Federal 

18 Trade Commission, shall not be forwarded 

19 or entered by an authorized EHR data 

20 user into the electronic health record of the 

21 participant maintained by the trust unless 

22 the user certifies that the participant has 

23 been notified of such information. 

24 (C) DEEMED AUTHORIZATION FOR ACCESS

25 FOR EMERGENCY HEALTH CARE.— 


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1 (i) FINDINGS.—Congress finds that— 

2 (I) given the size and nature of 

3 visits to emergency departments in 

4 the United States, readily available 

5 health information could make the dif6 ference between life and death; and 

7 (II) because of the case mix and 

8 volume of patients treated, emergency 

9 departments are well positioned to 

10 provide information for public health 

11 surveillance, community risk assess12 ment, research, education, training, 

13 quality improvement, and other uses. 

14 (ii) USE OF INFORMATION.—With re15 spect to the electronic health record of an 

16 IHRT participant (or specified parts of 

17 such electronic health record) maintained 

18 by an IHRT, the participant shall be 

19 deemed as providing authorization (in the 

20 form of affirmative consent) for health 

21 care providers to access, in connection with 

22 providing emergency care services to the 

23 participant, a limited, authenticated infor24 mation set concerning the participant for 

25 emergency response purposes, unless the 


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1 participant specifies that such information 

2 set (or any portion of such information 

3 set) may not be so accessed. Such limited 

4 information set may include information— 

5 (I) patient identification data, as 

6 determined appropriate by the partici7 pant; 

8 (II) provider identification that 

9 includes the use of unique provider 

10 identifiers; 

11 (III) payment information; 

12 (IV) information related to the 

13 individual’s vitals, allergies, and medi14 cation history; 

15 (V) information related to exist16 ing chronic problems and active clin17 ical conditions of the participant; and 

18 (VI) information concerning 

19 physical examinations, procedures, re20 sults, and diagnosis data. 

21 (3) RULES FOR SECONDARY USES OF RECORDS

22 FOR RESEARCH AND OTHER PURPOSES.— 

23 (A) IN GENERAL.—With respect to the 

24 electronic health record of an IHRT participant 

25 (or specified parts of such electronic health 


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1 record) maintained by an IHRT, the IHRT 

2 may sell such record (or specified parts of such 

3 record) only if— 

4 (i) the transfer is authorized by the 

5 participant pursuant to an agreement be6 tween the participant and the IHRT and is 

7 in accordance with the privacy protection 

8 agreement described in subsection (b)(1) 

9 entered into between such participant and 

10 such IHRT; 

11 (ii) such agreement includes param12 eters with respect to the disclosure of in13 formation involved and a process for the 

14 authorization of the further disclosure of 

15 information in such record; 

16 (iii) the information involved is to be 

17 used for research or other activities only as 

18 provided for in the agreement; 

19 (iv) the recipient of the information 

20 provides assurances that the information 

21 will not be further transferred or reused in 

22 violation of such agreement; and 

23 (v) the transfer otherwise meets the 

24 requirements and standards prescribed by 

25 the Federal Trade Commission. 


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1 (B) TREATMENT OF PUBLIC HEALTH RE2 PORTING.—Nothing in this paragraph shall be 

3 construed as prohibiting or limiting the use of 

4 health care information of an individual, includ5 ing an individual who is an IHRT participant, 

6 for public health reporting (or other research) 

7 purposes prior to the inclusion of such informa8 tion in an electronic health record maintained 

9 by an IHRT. 

10 (4) LAW ENFORCEMENT CLARIFICATION.— 

11 Nothing in this subtitle shall prevent an IHRT from 

12 disclosing information contained in an electronic 

13 health record maintained by the IHRT when re14 quired for purposes of a lawful investigation or offi15 cial proceeding inquiring into a violation of, or fail16 ure to comply with, any criminal or civil statute or 

17 any regulation, rule, or order issued pursuant to 

18 such a statute. 

19 (5) RULE OF CONSTRUCTION.—Nothing in this 

20 section shall be construed to require a health care 

21 provider that does not utilize electronic methods or 

22 appropriate levels of health information technology 

23 on the date of the enactment of this Act to adopt 

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1 ment for participation or compliance under this sub2 title. 

3 (b) PRIVACY PROTECTION AGREEMENT; TREATMENT

4 OF STATE PRIVACY AND SECURITY LAWS.— 

5 (1) PRIVACY PROTECTION AGREEMENT.—A pri6 vacy protection agreement described in this sub7 section is an agreement, with respect to an electronic 

8 health record of an IHRT participant to be main9 tained by an independent health record trust, be10 tween the participant and the trust— 

11 (A) that is consistent with the standards 

12 described in subsection (a)(2); 

13 (B) under which the participant specifies 

14 the portions of the record that may be accessed, 

15 under what circumstances such portions may be 

16 accessed, any authorizations for indicated au17 thorized EHR data users to access information 

18 contained in the record, and the purposes for 

19 which the information (or portions of the infor20 mation) in the record may be used; 

21 (C) which provides a process for the au22 thorization of the transfer of information con23 tained in the record to a third party, including 

24 for the sale of such information for purposes of 

25 research, by an authorized EHR data user and 


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1 reuse of such information by such third party, 

2 including a provision requiring that such trans3 fer and reuse is not in violation of any privacy 

4 or transfer restrictions placed by the partici5 pant on the independent health record of such 

6 participant; and 

7 (D) under which the trust provides assur8 ances that the trust will not transfer, disclose, 

9 or provide access to the record (or any portion 

10 of the record) in violation of the parameters es11 tablished in the agreement or to any person or 

12 entity who has not agreed to use and transfer 

13 such record (or portion of such record) in ac14 cordance with such agreement. 

15 (2) TREATMENT OF STATE LAWS.— 

16 (A) IN GENERAL.—Except as provided 

17 under subparagraph (B), the provisions of a 

18 privacy protection agreement entered into be19 tween an IHRT and an IHRT participant shall 

20 preempt any provision of State law (or any 

21 State regulation) relating to the privacy and 

22 confidentiality of individually identifiable health 

23 information or to the security of such health in24 formation. 


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1 (B) EXCEPTION FOR PRIVILEGED INFOR2 MATION.—The provisions of a privacy protec3 tion agreement shall not preempt any provision 

4 of State law (or any State regulation) that rec5 ognizes privileged communications between phy6 sicians, health care practitioners, and patients 

7 of such physicians or health care practitioners, 

8 respectively. 

9 (C) STATE DEFINED.—For purposes of 

10 this section, the term ‘‘State’’ has the meaning 

11 given such term when used in title XI of the 

12 Social Security Act, as provided under section 

13 1101(a) of such Act (42 U.S.C. 1301(a)). 

14 SEC. 847. VOLUNTARY NATURE OF TRUST PARTICIPATION 

15 AND INFORMATION SHARING. 

16 (a) IN GENERAL.—Participation in an independent 

17 health record trust, or authorizing access to information 

18 from such a trust, is voluntary. No employer, health insur19 ance issuer, group health plan, health care provider, or 

20 other person may require, as a condition of employment, 

21 issuance of a health insurance policy, coverage under a 

22 group health plan, the provision of health care services, 

23 payment for such services, or otherwise, that an individual 

24 participate in, or authorize access to information from, an 

25 independent health record trust. 


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1 (b) ENFORCEMENT.—The penalties provided for in 

2 subsection (a) of section 1177 of the Social Security Act 

3 (42 U.S.C. 1320d–6) shall apply to a violation of sub4 section (a) in the same manner as such penalties apply 

5 to a person in violation of subsection (a) of such section. 

6 SEC. 848. FINANCING OF ACTIVITIES. 

7 (a) IN GENERAL.—Except as provided in subsection 

8 (b), an IHRT may generate revenue to pay for the oper9 ations of the IHRT through— 

10 (1) charging IHRT participants account fees 

11 for use of the trust; 

12 (2) charging authorized EHR data users for ac13 cessing electronic health records maintained in the 

14 trust; 

15 (3) the sale of information contained in the 

16 trust (as provided for in section 846(a)(3)(A)); and 

17 (4) any other activity determined appropriate 

18 by the Federal Trade Commission. 

19 (b) PROHIBITION AGAINST ACCESS FEES FOR

20 HEALTH CARE PROVIDERS.—For purposes of providing 

21 incentives to health care providers to access information 

22 maintained in an IHRT, as authorized by the IHRT par23 ticipants involved, the IHRT may not charge a fee for 

24 services specified by the IHRT. Such services shall include 

25 the transmittal of information from a health care provider 


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1 to be included in an independent electronic health record 

2 maintained by the IHRT (or permitting such provider to 

3 input such information into the record), including the 

4 transmission of or access to information described in sec5 tion 846(a)(2)(C)(ii) by appropriate emergency respond6 ers. 

7 (c) REQUIRED DISCLOSURES.—The sources and 

8 amounts of revenue derived under subsection (a) for the 

9 operations of an IHRT shall be fully disclosed to each 

10 IHRT participant of such IHRT and to the public. 

11 (d) TREATMENT OF INCOME.—For purposes of the 

12 Internal Revenue Code of 1986, any revenue described in 

13 subsection (a) shall not be included in gross income of any 

14 IHRT, IHRT participant, or authorized EHR data user. 

15 SEC. 849. REGULATORY OVERSIGHT. 

16 (a) IN GENERAL.—In carrying out this subtitle, the 

17 Federal Trade Commission shall promulgate regulations 

18 for independent health record trusts. 

19 (b) ESTABLISHMENT OF INTERAGENCY STEERING

20 COMMITTEE.— 

21 (1) IN GENERAL.—The Secretary of Health and 

22 Human Services shall establish an Interagency 

23 Steering Committee in accordance with this sub24 section. 


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1 (2) CHAIRPERSON.—The Secretary of Health 

2 and Human Services shall serve as the chairperson 

3 of the Interagency Steering Committee. 

4 (3) MEMBERSHIP.—The members of the Inter5 agency Steering Committee shall consist of the At6 torney General, the Chairperson of the Federal 

7 Trade Commission, the Chairperson for the National 

8 Committee for Vital and Health Statistics, a rep9 resentative of the Federal Reserve, and other Fed10 eral officials determined appropriate by the Sec11 retary of Health and Human Services. 

12 (4) DUTIES.—The Interagency Steering Com13 mittee shall coordinate the implementation of this 

14 title, including the implementation of policies de15 scribed in subsection (d) based upon the rec16 ommendations provided under such subsection, and 

17 regulations promulgated under this subtitle. 

18 (c) FEDERAL ADVISORY COMMITTEE.— 

19 (1) IN GENERAL.—The National Committee for 

20 Vital and Health Statistics shall serve as an advisory 

21 committee for the IHRTs. The membership of such 

22 advisory committee shall include a representative 

23 from the Federal Trade Commission and the chair24 person of the Interagency Steering Committee. Not 

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1 sist of representatives of nongovernment entities, at 

2 least one of whom shall be a representative from an 

3 organization representing health care consumers. 

4 (2) DUTIES.—The National Committee for 

5 Vital and Health Statistics shall issue periodic re6 ports and review policies concerning IHRTs based 

7 on each of the following factors: 

8 (A) Privacy and security policies. 

9 (B) Economic progress. 

10 (C) Interoperability standards. 

11 (d) POLICIES RECOMMENDED BY FEDERAL TRADE

12 COMMISSION.—The Federal Trade Commission, in con13 sultation with the National Committee for Vital and 

14 Health Statistics, shall recommend policies to— 

15 (1) provide assistance to encourage the growth 

16 of independent health record trusts; 

17 (2) track economic progress as it pertains to 

18 operators of independent health records trusts and 

19 individuals receiving nontaxable income with respect 

20 to accounts; 

21 (3) conduct public education activities regarding 

22 the creation and usage of the independent health 

23 records trusts; 

24 (4) establish standards for the interoperability 

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1 formation contained in such record may be shared 

2 between the trust involved, the participant, and au3 thorized EHR data users, including for the stand4 ardized collection and transmission of individual 

5 health records (or portions of such records) to au6 thorized EHR data users through a common inter7 face and for the portability of such records among 

8 independent health record trusts; and 

9 (5) carry out any other activities determined 

10 appropriate by the Federal Trade Commission. 

11 (e) REGULATIONS PROMULGATED BY FEDERAL

12 TRADE COMMISSION.—The Federal Trade Commission 

13 shall promulgate regulations based on, at a minimum, the 

14 following factors: 

15 (1) Requiring that an IHRT participant, who 

16 has an electronic health record that is maintained by 

17 an IHRT, be notified of a security breech with re18 spect to such record, and any corrective action taken 

19 on behalf of the participant. 

20 (2) Requiring that information sent to, or re21 ceived from, an IHRT that has been designated as 

22 high-risk should be authenticated through the use of 

23 methods such as the periodic changing of passwords, 

24 the use of biometrics, the use of tokens or other 

25 technology as determined appropriate by the council. 


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1 (3) Requiring a delay in releasing sensitive 

2 health care test results and other similar informa3 tion to patients directly in order to give physicians 

4 time to contact the patient. 

5 (4) Recommendations for entities operating 

6 IHRTs, including requiring analysis of the potential 

7 risk of health transaction security breeches based on 

8 set criteria. 

9 (5) The conduct of audits of IHRTs to ensure 

10 that they are in compliance with the requirements 

11 and standards established under this subtitle. 

12 (6) Disclosure to IHRT participants of the 

13 means by which such trusts are financed, including 

14 revenue from the sale of patient data. 

15 (7) Prevention of certification of an entity seek16 ing independent heath record trust certification 

17 based on— 

18 (A) the potential for conflicts between the 

19 interests of such entity and the security of the 

20 health information involved; and 

21 (B) the involvement of the entity in any 

22 activity that is contrary to the best interests of 

23 a patient. 

24 (8) Prevention of the use of revenue sources 

25 that are contrary to a patient’s interests. 


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1 (9) Public disclosure of audits in a manner 

2 similar to financial audits required for publicly trad3 ed stock companies. 

4 (10) Requiring notification to a participating 

5 entity that the information contained in such record 

6 may not be representative of the complete or accu7 rate electronic health record of such account holder. 

8 (f) COMPLIANCE REPORT.—Not later than 1 year 

9 after the date of the enactment of this Act, and annually 

10 thereafter, the Commission shall submit to the Committee 

11 on Health, Education, Labor, and Pensions and the Com12 mittee on Finance of the Senate and the Committee on 

13 Energy and Commerce and the Committee on Ways and 

14 Means of the House of Representatives, a report on com15 pliance by and progress of independent health record 

16 trusts with this subtitle. Such report shall describe the fol17 lowing: 

18 (1) The number of complaints submitted about 

19 independent health record trusts, which shall be di20 vided by complaints related to security breaches, and 

21 complaints not related to security breaches, and may 

22 include other categories as the Interagency Steering 

23 Committee established under subsection (b) deter24 mines appropriate. 


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1 (2) The number of enforcement actions under2 taken by the Commission against independent health 

3 record trusts in response to complaints under para4 graph (1), which shall be divided by enforcement ac5 tions related to security breaches and enforcement 

6 actions not related to security breaches and may in7 clude other categories as the Interagency Steering 

8 Committee established under subsection (b) deter9 mines appropriate. 

10 (3) The economic progress of the individual 

11 owner or institution operator as achieved through 

12 independent health record trust usage and existing 

13 barriers to such usage. 

14 (4) The progress in security auditing as pro15 vided for by the Interagency Steering Committee 

16 council under subsection (b). 

17 (5) The other core responsibilities of the Com18 mission as described in subsection (a). 

19 (g) INTERAGENCY MEMORANDUM OF UNDER20 STANDING.—The Interagency Steering Committee shall 

21 ensure, through the execution of an interagency memo22 randum of understanding, that— 

23 (1) regulations, rulings, and interpretations 

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1 sibility under this subtitle are administered so as to 

2 have the same effect at all times; and 

3 (2) the memorandum provides for the coordina4 tion of policies related to enforcing the same require5 ments through such officials in order to have coordi6 nated enforcement strategy that avoids duplication 

7 of enforcement efforts and assigns priorities in en8 forcement. 

9 TITLE IX—MISCELLANEOUS 

10 SEC. 901. HEALTH CARE CHOICE FOR VETERANS. 

11 Beginning not later than 2 years after the date of 

12 the enactment of this Act, the Secretary of Veterans Af13 fairs may— 

14 (1) permit veterans, and survivors and depend15 ents of veterans, who are eligible for health care and 

16 services under the laws administered by the Sec17 retary to receive such care and services through such 

18 non-Department of Veterans Affairs providers and 

19 facilities as the Secretary may approve for purposes 

20 of this section; and 

21 (2) pursuant to such procedures as the Sec22 retary of Veteran Affairs shall prescribe for purposes 

23 of this section, make payments to such providers 

24 and facilities for the provision of such care and serv25 ices to veterans, and such survivors and dependents, 


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1 at such rates as the Secretary may specify in such 

2 procedures and in such manner so that the Sec3 retary ensures that the aggregate payments made by 

4 the Secretary to such providers and facilities do not 

5 exceed the aggregate amounts which the Secretary 

6 would have paid for such care and services if this 

7 section had not been enacted. 

8 SEC. 902. HEALTH CARE CHOICE FOR INDIANS. 

9 (a) IN GENERAL.—Beginning not later than 2 years 

10 after the date of enactment of this Act, the Secretary of 

11 Health and Human Services shall— 

12 (1) permit Indians who are eligible for health 

13 care and services under a health care program oper14 ated or financed by the Indian Health Service or by 

15 an Indian Tribe, Tribal Organization, or Urban In16 dian Organization (and any such other individuals 

17 who are so eligible as the Secretary may specify), to 

18 receive such care and services through such non- In19 dian Health Service, Indian Tribe, Tribal Organiza20 tion, or Urban Indian Organization providers and 

21 facilities as the Secretary shall approve for purposes 

22 of this section; and 

23 (2) pursuant to such procedures as the Sec24 retary of Health and Human Services shall prescribe 

25 for purposes of this section, make payments to such 


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1 providers and facilities for the provision of such care 

2 and services to Indians and individuals described in 

3 paragraph (1), at such rates as the Secretary shall 

4 specify in such procedures and in such manner so 

5 that the Secretary ensures that the aggregate pay6 ments made by the Secretary to such providers and 

7 facilities do not exceed the aggregate amounts which 

8 the Secretary would have paid for such care and 

9 services if this section had not been enacted. 

10 (b) DEFINITIONS.—In this section, the terms ‘‘In11 dian’’, ‘‘Indian Health Program’’, ‘‘Indian Tribe’’, ‘‘Tribal 

12 Organization’’, and ‘‘Urban Indian Organization’’ have 

13 the meanings given those terms in section 4 of the Indian 

14 Health Care Improvement Act. 

15 SEC. 903. TERMINATION OF FEDERAL COORDINATING 

16 COUNCIL FOR COMPARATIVE EFFECTIVE17 NESS RESEARCH. 

18 The Federal Coordinating Council for Comparative 

19 Effectiveness Research is hereby terminated and section 

20 804 of the American Recovery and Reinvestment Act of 

21 2009 establishing and funding such Council is hereby re22 pealed. 


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1 SEC. 904. HHS AND GAO JOINT STUDY AND REPORT ON 

2 COSTS OF THE 5 MEDICAL CONDITIONS THAT 

3 HAVE THE GREATEST IMPACT. 

4 (a) STUDY.—The Secretary of Health and Human 

5 Services (in this section referred to as the ‘‘Secretary’’) 

6 and the Comptroller General of the United States (in this 

7 section referred to as the ‘‘Comptroller General’’) shall 

8 jointly conduct a study on the costs of the top 5 medical 

9 conditions facing the public which have the greatest im10 pact in terms of morbidity, mortality, and financial cost. 

11 Such study shall include— 

12 (1) current estimates as well as a ‘‘generational 

13 score’’ to capture the financial cost and health toll 

14 certain medical conditions will inflict on the baby 

15 boomer generation and on other individuals; and 

16 (2) a careful review of certain medical condi17 tions, including heart disease, obesity, diabetes, 

18 stroke, cancer, Alzheimers, and other medical condi19 tions the Secretary and Comptroller General deter20 mine appropriate. 

21 (b) REPORT.—Not later than 1 year after the date 

22 of enactment of this Act, the Secretary and the Comp23 troller General shall jointly submit to Congress a report 

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1 lation and administrative action as the Secretary and the 

2 Comptroller General determine appropriate. 

3 (c) TARGETING OF PREVENTION AND WELLNESS EF4 FORTS.—The Secretary shall target prevention and 

5 wellness efforts conducted under the provisions of and 

6 amendments made by this Act in order to combat medical 

7 conditions identified in the report submitted under sub8 section (b), including such medical conditions identified as 

9 the top 5 medical conditions facing the public which have 

10 the greatest impact in terms of morbidity, mortality, and 

11 financial cost as of or after the date of enactment of this 

12 Act. 

Æ 


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