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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1783 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1783

        To provide 10 steps to transform health care in America.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 12, 2007

   Mr. Enzi introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
        To provide 10 steps to transform health care in America.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Ten Steps to 
Transform Health Care in America Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
             TITLE I--AFFORDABLE HEALTH INSURANCE COVERAGE

Subtitle A--Individual Coverage Responsibility and Availability of Core 
                              Plan Options

Sec. 101. Coverage responsibility.
Sec. 102. Qualified core plans.
Sec. 103. Qualified core compatible plans.
Sec. 104. Certification.
Sec. 105. State-based risk adjustments.
Sec. 106. Relation to self-insured plans.
Sec. 107. State flexibility and enforcement.
    Subtitle B--Standard Deduction for Health Insurance and Related 
                               Provisions

Sec. 121. Amendment of 1986 Code.
Sec. 122. Standard deduction for health insurance.
Sec. 123. Changes to existing tax preferences for medical coverage and 
                            costs for individuals eligible for standard 
                            deduction for health insurance.
Sec. 124. Exclusion of standard deduction for health insurance from 
                            employment taxes.
Sec. 125. Information reporting.
Sec. 126. Reduction of phaseout for earned income credit.
  Subtitle C--Health Insurance Tax Credit for the Purchase of Health 
                               Insurance

             Part I--Refundable Health Insurance Tax Credit

Sec. 131. Refundable credit for health insurance coverage.
Sec. 132. Advance payment of credit for purchasers of qualified health 
                            insurance.
Sec. 133. Designation of health insurance status required by 
                            individuals on Federal income tax returns.
                   Subtitle D--Education and Outreach

Sec. 141. Notice to taxpayers of availability of standard deduction for 
                            health insurance and refundable health 
                            insurance credit.
Sec. 142. Optional enrollment and outreach.
  TITLE II--INCREASING INSURANCE MARKET PORTABILITY AND AFFORDABILITY

          Subtitle A--Merging and Improving Insurance Markets

Sec. 201. Development of merged and improved State insurance market 
                            standards.
Sec. 202. Modifications relating to self-funded group health plans.
Sec. 203. Legislative proposals.
Sec. 204. Enforcement.
     Subtitle B--Reduction in Premium Variation and Health Status 
                             Discrimination

Sec. 211. Development of standards for reduction in premium variation 
                            and health status discrimination among 
                            enrollees.
Sec. 212. Enforcement.
   Subtitle C--Enhanced Marketplace Pooling and Related Market Rating

                   Part I--Enhanced Marketplace Pools

Sec. 245. Rules governing enhanced marketplace pools.
Sec. 246. Cooperation between Federal and State authorities.
Sec. 247. Effective date and transitional and other rules.
                         Part II--Market Relief

Sec. 251. Market relief.
         Part III--Harmonization of Health Insurance Standards

Sec. 261. Health Insurance Standards Harmonization.
     TITLE III--AFFORDABLE ACCESS TO HEALTH CARE FOR ALL AMERICANS

 Subtitle A--Improving the Quality of Health Care by More Effectively 
                  Using Health Information Technology

Sec. 300. Short title.
    subpart a--improving the interoperability of health information 
                               technology
subpart b--facilitating the widespread adoption of interoperable health 
                         information technology
Sec. 305. Facilitating the widespread adoption of interoperable health 
            subpart c--improving the quality of health care
Sec. 311. Consensus process for the adoption of quality measures for 
                            use in the nationwide interoperable health 
                    subpart d--privacy and securityinfrastructure.
Sec. 321. Privacy subpart e--miscellaneous provisions
Sec. 331. GAO study.
Sec. 332. Health information technology resource center.
Sec. 333. Facilitating the provision of telehealth services across 
                            State lines.
     Part II--Making Health Care More Accessible for All Americans

Sec. 341. Reauthorization of certain telehealth programs.
Sec. 342. Quality improvement activities.
Sec. 343. Sense of the senate regarding physician payments under 
                            medicare.
         Subtitle B--Increasing Access to Physicians and Nurses

Sec. 351. Reauthorization of programs and miscellaneous amendments.
Sec. 352. Nurse workforce enhancement.
Sec. 353. Visas for registered nurses.
Sec. 354. MedPAC study and report on the impact of payment caps for IME 
                            and GME.
             Subtitle C--Increasing Access to Primary Care

Sec. 361. Reauthorization of the community health center programs.
Sec. 362. Reauthorization of loan repayment programs of the National 
                            Health Service Corps.
Sec. 363. Clarification of authority for convenient care clinics to 
                            participate in Medicaid and SCHIP.
                     Subtitle D--Rural Health Care

Sec. 371. Reathorization of rural health care programs.
                       Subtitle E--Long Term Care

Sec. 381. Sense of the Senate.
Sec. 382. Living wills.
Sec. 383. Increasing Senior Choice and Access to Community-Based Long 
                            Term Care.
             Subtitle F--Fair and Reliable Medical Justice

Sec. 391. Short title.
Sec. 392. Purposes.
Sec. 393. State demonstration programs to evaluate alternatives to 
                            current medical tort litigation.

SEC. 2. PURPOSES.

    It is the purpose of this Act to--
            (1) eliminate unfair tax treatment of health insurance 
        thereby expanding choices, coverage, and control over health 
        care for all Americans;
            (2) increase affordable options for working families to 
        purchase health insurance through a standard tax deduction;
            (3) ensure that affordable health insurance is available to 
        low-income individuals through the provision of a refundable, 
        advanceable, assignable tax-based subsidy;
            (4) provide cross-State pooling to reduce health care costs 
        and increase accessibility for small business owners, unions, 
        associations, and their workers, members, and families;
            (5) blend the individual and group health insurance markets 
        to extend important Health Insurance Portability and 
        Accountability Act portability protections to the individual 
        market so that insurance security can better move with an 
        individual from job to job;
            (6) emphasize preventive health care and help individuals 
        with chronic diseases better manage their health so America 
        will finally have health care and not sick care;
            (7) give individuals the choice to convert the value of 
        Medicaid and SCHIP program benefits into private health 
        insurance, putting Americans in control of their health care, 
        not the Federal government;
            (8) save lives and money by better coordinating health 
        information technology to improve health care delivery;
            (9) increase access to primary care in rural and frontier 
        areas by helping future providers and nurses pay for their 
        education, and giving seniors more options to receive care in 
        their homes and communities; and
            (10) decrease the sky-rocketing cost of health care by 
        restoring reliability in our medical justice system through 
        State-based solutions.

SEC. 3. DEFINITIONS.

    Except as otherwise provided, in this Act:
            (1) Adult individual.--The term ``adult individual'' means 
        an individual who--
                    (A) is--
                            (i) age 19 or older;
                            (ii) a resident of a State;
                            (iii)(I) a United States citizen; or
                            (II) an alien with permanent residence; and
                            (iv) not a dependent child; and
                    (B) in the case of an incarcerated individual, such 
                an individual who is incarcerated for less than 1 
                month.
            (2) Alien with permanent residence.--The term ``alien with 
        permanent residence'' has the meaning given the term 
        ``qualified alien'' in section 431 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1641).
            (3) Applicable state law.--The term ``applicable State 
        law'' means the health insurance and related laws and 
        regulations of a State.
            (4) Dependent child.--The term ``dependent child'' has the 
        meaning given the term ``qualifying child'' in section 152(c) 
        of the Internal Revenue Code of 1986.
            (5) Health insurance issuer.--The term ``health insurance 
        issuer'' means an insurance company, insurance service, or 
        insurance organization (including a health maintenance 
        organization, as defined in paragraph (6)) which is licensed to 
        engage in the business of insurance in a State and which is 
        subject to State law which regulates insurance (within the 
        meaning of section 514(b)(2) of the Employee Retirement Income 
        Security Act of 1974).
            (6) Health maintenance organization.--The term ``health 
        maintenance organization'' means--
                    (A) a federally qualified health maintenance 
                organization (as defined in section 1301(a) of the 
                Public Health Service Act);
                    (B) an organization recognized under State law as a 
                health maintenance organization; or
                    (C) a similar organization regulated under State 
                law for solvency in the same manner and to the same 
                extent as such a health maintenance organization.
            (7) Qualified core compatible plan.--The term ``qualified 
        core compatible plan'' means a compatible qualified core plan 
        that meets the requirements of section 103.
            (8) Qualified core plan.--The term ``qualified core plan'' 
        means a qualified core plan described under section 102.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, unless expressly provided for 
        otherwise in this Act.
            (10) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, American 
        Samoa, Guam, the Commonwealth of the Northern Mariana Islands, 
        and other territories of the United States.
            (11) State of residence.--The term ``State of residence'', 
        with respect to an individual, means the State in which the 
        individual has primary residence.

             TITLE I--AFFORDABLE HEALTH INSURANCE COVERAGE

Subtitle A--Individual Coverage Responsibility and Availability of Core 
                              Plan Options

SEC. 101. COVERAGE RESPONSIBILITY.

    (a) Individual Responsibility.--
            (1) Adult individuals.--Not later than 3 years after the 
        date of enactment of this Act, each adult individual shall be 
        encouraged to enroll in a qualified health plan that meets at 
        least the requirements applied under section 224(d)(2) of the 
        Internal Revenue Code of 1986.
            (2) Dependent children.--Each adult individual enrolled in 
        a health plan described in paragraph (1) shall have the 
        responsibility to enroll (or provide evidence of enrollment of) 
        each dependent child of the adult individual in such a health 
        plan, or in a Federal or State governmental health coverage 
        program for which such dependent child is eligible and which 
        does not otherwise qualify as a health plan for purposes of 
        paragraph (1).
            (3) Determinations of enrollment.--An individual may 
        demonstrate compliance with this subsection through--
                    (A) proof of enrollment of such individual and 
                dependent children of such individual (if any) provided 
                on the individual Federal tax return of the individual 
                pursuant to regulations developed by the Secretary of 
                the Treasury; or
                    (B) proof of such enrollment obtained pursuant to 
                automatic enrollment as provided for in subsection (d).
    (b) Eligibility for Health Insurance Assistance.--Subject to this 
subsection and subsection (c), an individual and such dependent 
children of such individual who is enrolled in a health plan described 
in subsection (a)(1) shall be eligible to elect to receive--
            (1) a standard Federal income tax deduction for health 
        insurance; or
            (2) an income-based tax credit subsidy.
    (c) Encouragement.--Each State shall determine appropriate 
mechanisms, which may not include revocation or ineligibility for 
coverage under a qualified core plan or qualified core compatible plan, 
to encourage each adult individual to demonstrate coverage under a 
health plan described in subsection (a)(1) for such individual and 
compliance by such individual with the terms of paragraph (2) with 
respect to any dependent children of such individual.
    (d) Automatic Enrollment.--
            (1) In general.--Each State shall implement mechanisms to 
        automatically enroll an uninsured individual for health 
        coverage if--
                    (A) such individual presents for treatment to a 
                licensed health care facility or provider without 
                health coverage under a health plan described in 
                subsection (a)(1) or otherwise under a Federal or State 
                government health coverage program; or
                    (B) such individual designates the lack of such 
                coverage on the Federal tax return filed by such 
                individual.
            (2) Type of plan.--The mechanisms implemented under 
        paragraph (1) shall ensure that an individual is automatically 
        enrolled, on a randomized basis, in a qualified core plan 
        offered in the State of residence of the individual, or in any 
        Federal or State government health program if the individual is 
        eligible for such enrollment.
            (3) Coordination.--The Secretary shall coordinate with the 
        Secretary of the Treasury and the State insurance commissioners 
        to develop procedures for providing notification to relevant 
        entities regarding individuals who have indicated a lack of 
        health coverage on Federal tax returns, or who have presented 
        to a licensed healthcare entity or provider as provided for in 
        paragraph (1)(A).

SEC. 102. QUALIFIED CORE PLANS.

    (a) Offering of Coverage.--Each health insurance issuer offering 
health insurance coverage in a State shall offer at least one certified 
qualified core plan to individuals residing in that State and shall 
market such plans in a manner that is substantially similar to the 
manner in which such issuer markets coverage or other health insurance 
plans such issuer offers in the State. If a State determines that a 
health insurance issuer is failing to offer (or market) such coverage 
in the State as provided for in this subsection, the State shall not 
license such issuer to offer health insurance coverage in such State 
(or revoke any existing license of such issuer effective upon the 
expiration of the subsequent plan year).
    (b) Certification.--Each State shall certify a plan as a qualified 
core plan if the plan meets the requirements of subsection (c).
    (c) Requirements.--
            (1) In general.--To be certified as a qualified core plan, 
        the plan shall--
                    (A) provide coverage for benefits, items, or 
                services as required by the State;
                    (B) provide coverage for basic preventive items or 
                services, as the State may define such items or 
                services, in accordance with paragraph (2);
                    (C) provide coverage for medical self-management 
                and for items or services needed for such self-
                management, as the State may define such items or 
                services;
                    (D) require payment of the applicable standard 
                premium for coverage under the plan (as determined in 
                accordance with subsection (d));
                    (E) adhere to the cost sharing limitations 
                prescribed under subsection (e);
                    (F) provide for the submission of data as required 
                under subsection (f); and
                    (G) comply with any other requirements applicable 
                under State law.
            (2) Basic preventive items or services.--The basic 
        preventive items or services for which coverage shall be 
        provided under a qualified core plan shall be determined--
                    (A) pursuant to applicable State law; or
                    (B) if no such State law is in effect, based on 
                standards and guidelines issued by the Secretary (in 
                consultation with the National Association of Insurance 
                Commissioners).
    (d) Standard Premium Amount.--
            (1) In general.--Except as provided for in this subsection, 
        the standard premium for coverage under a qualified core plan 
        for the initial plan year following the date on which the 
        requirement under section 101(a) applies shall be--
                    (A) $2,500 for individual coverage; and
                    (B) $5,000 for family coverage.
            (2) CPI adjustment.--Each of the amounts provided for under 
        paragraph (1) shall be annually increased, beginning in the 
        second plan year following the date on which the requirement 
        under section 101(a) applies, by the percentage increase in the 
        Consumer Price Index for the previous plan year. As used in the 
        preceding sentence, the term ``Consumer Price Index'' means the 
        last Consumer Price Index for all-urban consumers published by 
        the Department of Labor.
    (e) Cost Sharing Limitations.--
            (1) In general.--A qualified core plan shall comply with 
        the following cost sharing limitations:
                    (A) Deductibles.--The amount of any deductible 
                shall not exceed $2,500 for a plan year.
                    (B) Copayments.--The amount of any copayments shall 
                not exceed 20 percent.
                    (C) Annual limits.--The annual limit on cost 
                sharing payment shall not exceed $5,000.
            (2) Adjustment for inflation.--Each of the amounts provided 
        for under paragraph (1) shall be annually increased, beginning 
        in the second plan year following the date on which the 
        requirement under section 101(a) applies, by the percentage 
        increase in the Consumer Price Index for the previous plan 
        year. As used in the preceding sentence, the term ``Consumer 
        Price Index'' means the last Consumer Price Index for all-urban 
        consumers published by the Department of Labor.
            (3) No application of cost sharing for prevention and 
        medical self-management.--A qualified core plan may not impose 
        cost sharing requirements on--
                    (A) basic preventive items or services; or
                    (B) medical self-management items or services.
            (4) Decertification.--A State shall suspend or revoke the 
        certification of any qualified core plan if the State 
        determines that any policy or procedure implemented with 
        respect to the plan has the effect, or likely effect, of 
        materially altering the overall level of cost sharing 
        obligations that may be required of enrollees under the plan. 
        Notwithstanding the previous sentence, an individual covered 
        under such a plan may continue coverage under such plan through 
        the expiration of the current plan year, or if such expiration 
        date is less than 6 months from the date of decertification, 
        for an additional plan year.
    (f) Actuarial Value Data and Application.--
            (1) In general.--A health insurance issuer shall annually 
        submit to the State insurance commissioner and the Secretary a 
        determination as to the aggregate actuarial value of each 
        qualified core plan and qualified core compatible plan offered 
        by the issuer in the State. In developing and submitting such 
        data, the issuer shall utilize actuarial standards established 
        by the National Association of Insurance Commissioners.
            (2) Publication and submission to secretary.--A State 
        insurance commissioner shall--
                    (A) compile all data received under paragraph (1) 
                with respect to the State;
                    (B) publish such data in a manner that enables 
                individuals in the State to use such data in making 
                health insurance decisions; and
                    (C) submit such data in report form to the 
                Secretary.
            (3) Use of data.--
                    (A) In general.--The Secretary shall, using the 
                data provided under paragraph (2)(C), annually publish 
                a national standard qualified core plan actuarial value 
                (referred to as the ``National actuarial value'').
                    (B) Qualified core compatible plans.--For 
                provisions relating to the use of the National 
                actuarial value with respect to qualified core 
                compatible plans, see section 103(c)(1)(D).
            (4) Suspension or revocation of certification.--The State 
        shall suspend or revoke the certification of any qualified core 
        plan or qualified core compatible plan, upon the expiration of 
        the subsequent plan year, for which a health insurance issuer 
        has failed to submit data as required under paragraph (1).
    (g) Application to State Law.--Unless provided otherwise in this 
Act, nothing in this Act shall be construed to preempt State laws 
relating to health insurance, including State benefit mandate laws, 
consumer protection requirements, solvency and related fiscal 
requirements for qualified core plans.
    (h) Market Availability Study.--
            (1) Assessment.--Prior to the implementation of regulations 
        relating to the certification of qualified core plans under 
        this Act, the Secretary, in consultation with the National 
        Association of Insurance Commissioners, shall conduct an 
        assessment of the effect of the application of the National 
        actuarial value as a requirement for certification of qualified 
        core compatible plans under section103(c)(1)(D), including the 
        effect of such application on the affordability of qualified 
        core compatible plans, the entry of health insurance issuers 
        into the qualified core plan and qualified core compatible plan 
        market, and on health insurance market access, affordability, 
        and competition.
            (2) Report.--The Secretary shall submit to Congress a 
        report concerning the results of the assessment conducted under 
        paragraph (1).

SEC. 103. QUALIFIED CORE COMPATIBLE PLANS.

    (a) Offering of Coverage.--A health insurance issuer offering 
health insurance coverage in a State may offer one or more certified 
qualified core compatible plans to individuals residing in that State.
    (b) Certification.--Each State shall certify a plan as a qualified 
core compatible plan if the plan meets the requirements of subsection 
(c).
    (c) Requirements.--
            (1) In general.--To be certified as a qualified core 
        compatible plan, the plan shall--
                    (A) provide coverage for benefits, items, or 
                services as required by the State;
                    (B) provide coverage for basic preventive items or 
                services;
                    (C) provide coverage for medical self-management 
                and for items or services needed for such self-
                management, as the State may define such items or 
                services;
                    (D) have an actuarial value that is not less than 
                the national standard actuarial value determined under 
                section 102(f)(3)(A); and
                    (E) comply with any other requirements imposed by 
                the State.
            (2) Basic preventive items or services.--The basic 
        preventive items or services for which coverage shall be 
        provided under a qualified core compatible plan shall be 
        determined is the same manner as provided for under section 
        102(c)(2).
            (3) Premiums and cost sharing.--Except as provided in this 
        Act, premium and cost sharing requirements applicable to 
        qualified core compatible plans shall be determined in 
        accordance with applicable State law.
    (d) Application of State Law.--Unless specifically provided 
otherwise in this Act, nothing in this Act shall be construed to 
preempt State laws relating to health insurance, including State 
benefit mandate laws, consumer protection requirements, and solvency 
and related fiscal requirements for qualified core compatible plans.

SEC. 104. CERTIFICATION.

    (a) In General.--A health insurance issuer shall submit an 
application to the State insurance commissioner for the certification 
of a health plan as a qualified core plan or a qualified core 
compatible plan for purposes of offering coverage under such plan in 
the State.
    (b) Regulations.--The Secretary, in consultation with the National 
Association of Insurance Commissioners, shall promulgate regulations 
that provide standards and procedures for the certification, and 
suspension or revocation of the certification, of qualified core plans 
and qualified core compatible plans to ensure that such plans comply, 
and maintain such compliance, with the requirements and standards 
applicable to such plans under this title.

SEC. 105. STATE-BASED RISK ADJUSTMENTS.

    (a) In General.--The State shall seek to lessen such material risk 
selection as may occur among qualified core plans, qualified compatible 
core plans, and other licensed health insurance products (not including 
self-insured plans) through the application of State risk adjustment 
requirements that are certified by the Secretary as meeting standards 
established by the Secretary (in consultation with the National 
Association of Insurance Commissioners).
    (b) Assessment and Report.--
            (1) In general.--Prior to the development of standards 
        under subsection (a), the Secretary, in consultation with the 
        National Association of Insurance Commissioners, shall conduct 
        an assessment of--
                    (A) the degree of the actual or actuarially 
                anticipated material adverse selection among qualified 
                core plans, qualified core compatible plans, and other 
                insured health plans; and
                    (B) the comparative efficiency of State risk 
                adjustment requirement options to minimize such 
                hazards.
            (2) Report.--The Secretary shall submit a report to 
        Congress concerning the results of the assessment conducted 
        under paragraph (1). Such report shall include such 
        recommendations as the Secretary may include for additional or 
        future legislation to adjust the standards developed under 
        subsection (a) if the Secretary determines that such 
        legislation is reasonably necessary to provide for the 
        effective application of the requirements of subsection (a).

SEC. 106. RELATION TO SELF-INSURED PLANS.

    (a) In General.--An individual who is enrolled in health care 
coverage under a self-insured health plan (as defined for purposes of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
seq.)) shall be deemed to be in compliance with the requirements of 
section 101(a), and other than as expressly provided for otherwise in 
this Act, current law with respect to such plans shall remain in 
effect.
    (b) Demonstration of Actuarial Value.--The health insurance issuer 
of a plan described in subsection (a), shall submit to the Secretary of 
Labor evidence demonstrating that the coverage alternative involved 
meets the requirements of such subsection.
    (c) Certification Process.--Certification, or suspension or 
revocation of certification, of health plans under this section shall 
be administered by the Secretary of Labor in consultation with the 
State insurance commissioner.

SEC. 107. STATE FLEXIBILITY AND ENFORCEMENT.

    (a) In General.--
            (1) State authority.--Subject to subsection (d), each State 
        shall require that health insurance issuers that issue, sell, 
        renew, or offer health insurance coverage in the State meet the 
        requirements established under this subtitle with respect to 
        such issuers and with respect to qualified core plans and 
        qualified core compatible plans.
            (2) Failure to implement requirements.--In the case of a 
        State that fails to substantially implement and enforce the 
        requirements set forth in this subtitle with respect to health 
        insurance issuers in the State, the Secretary shall implement 
        and enforce the requirements of this subtitle under subsection 
        (c) insofar as they relate to the issuance, sale, renewal, and 
        offering of qualified core plans and qualified core compatible 
        plans in such State.
    (b) Procedure.--
            (1) Presumption.--
                    (A) In general.--Subject to the succeeding 
                provisions of this subsection, a State is presumed to 
                be implementing and enforcing this subtitle if, by not 
                later than the date that is 6 months after the date of 
                enactment of this Act, the chief executive officer of 
                the State--
                            (i) notifies the Secretary that the State 
                        has enacted or intends to enact (by not later 
                        than January 1, 2009, or July 1, 2009 in the 
                        case of a State described in subparagraph 
                        (B)(ii)) any necessary legislation to provide 
                        for the implementation and enforcement of such 
                        subtitle; and
                            (ii) provides the Secretary with such 
                        information as the Secretary may require to 
                        review the legislation and its implementation 
                        (or proposed implementation) under this 
                        subsection.
                    (B) Delay permitted for certain states.--
                            (i) Effect of delay.--In the case of a 
                        State described in clause (ii) that provides 
                        notice under subparagraph (A)(i), for the 
                        presumption to continue on and after July 1, 
                        2009, the chief executive officer of the State 
                        by April 1, 2009--
                                    (I) must notify the Secretary that 
                                the State has enacted any necessary 
                                legislation to provide for the 
                                implementation and enforcement of this 
                                subtitle as of July 1, 2009; and
                                    (II) must provide the Secretary 
                                with such information as the Secretary 
                                may require to review the legislation 
                                and its implementation (or proposed 
                                implementation) under this subsection.
                            (ii) States described.--A State described 
                        in this clause is a State that has a 
                        legislature that does not meet within the 12-
                        month period beginning on the date of enactment 
                        of this Act.
                    (C) Continued application.--In order for a State to 
                continue to be presumed to be implementing and 
                enforcing the requirements of this subtitle, the State 
                shall provide the Secretary every 3 years with 
                information described in subparagraph (A)(ii) or 
                (B)(i)(II) (as the case may be).
            (2) Notice.--If the Secretary finds, after review of 
        information provided under paragraph (1) and in consultation 
        with the chief executive officer of the State and the insurance 
        commissioner of the State, that the State is not implementing 
        and enforcing the requirements of this subtitle, the 
        Secretary--
                    (A) shall notify the State of--
                            (i) such preliminary determination, and
                            (ii) the consequences under paragraph (3) 
                        of a failure to carry out such implementation 
                        and enforcement; and
                    (B) shall permit the State a reasonable opportunity 
                in which to modify State law in a manner so that may be 
                acceptable implementation and enforcement.
            (3) Final determination.--If, after providing notice and 
        opportunity under paragraph (2), the Secretary finds that the 
        State is not implementing or enforcing the requirements of this 
        subtitle, the Secretary shall notify the State of such fact and 
        that the Secretary shall be responsible for enforcing such 
        requirements in the State.
            (4) Future adoption of mechanisms.--If a State, after the 
        Secretary makes a notification described in paragraph (3), 
        submits the notice and information described in paragraph (1), 
        unless the Secretary makes a finding described in paragraph (3) 
        within the 90-day period beginning on the date of submission of 
        the notice and information, the mechanism shall be considered 
        to be an acceptable alternative mechanism for purposes of this 
        section, effective 90 days after the end of such period, 
        subject to the second sentence of paragraph (1).
    (c) Secretarial Enforcement Authority.--
            (1) Limitation.--The provisions of this subsection shall 
        apply with respect to the enforcement of a provision (or 
        provisions) of this subtitle only--
                    (A) as provided under subsection (a)(2); and
                    (B) with respect to health insurance issuers and 
                qualified core plans and qualified core compatible 
                plans.
            (2) Imposition of penalties.--In the cases described in 
        paragraph (1):
                    (A) In general.--Subject to the succeeding 
                provisions of this subsection, any health insurance 
                issuer that fails to comply with a provision of this 
                subtitle applicable to such issuer with respect to a 
                qualified core plan or qualified core compatible plan 
                is subject to a civil money penalty under this 
                subsection.
                    (B) Amount of penalty.--
                            (i) In general.--The maximum amount of 
                        penalty imposed under this paragraph is $100 
                        for each day for each individual with respect 
                        to which such a failure occurs.
                            (ii) Considerations in imposition.--In 
                        determining the amount of any penalty to be 
                        assessed under this paragraph, the Secretary 
                        shall take into account the previous record of 
                        compliance of the issuer being assessed with 
                        the applicable provisions of this subtitle and 
                        the gravity of the violation.
                            (iii) Limitations.--
                                    (I) Penalty not to apply where 
                                failure not discovered exercising 
                                reasonable diligence.--No civil money 
                                penalty shall be imposed under this 
                                paragraph on any failure during any 
                                period for which it is established to 
                                the satisfaction of the Secretary that 
                                none of the entities against whom the 
                                penalty would be imposed knew, or 
                                exercising reasonable diligence would 
                                have known, that such failure existed.
                                    (II) Penalty not to apply to 
                                failures corrected within 30 days.--No 
                                civil money penalty shall be imposed 
                                under this paragraph on any failure if 
                                such failure was due to reasonable 
                                cause and not to willful neglect, and 
                                such failure is corrected during the 
                                30-day period beginning on the first 
                                day any of the entities against whom 
                                the penalty would be imposed knew, or 
                                exercising reasonable diligence would 
                                have known, that such failure existed.
                    (C) Administrative review.--
                            (i) Opportunity for hearing.--The entity 
                        assessed shall be afforded an opportunity for 
                        hearing by the Secretary upon request made 
                        within 30 days after the date of the issuance 
                        of a notice of assessment. In such hearing the 
                        decision shall be made on the record pursuant 
                        to section 554 of title 5, United States Code. 
                        If no hearing is requested, the assessment 
                        shall constitute a final and unappealable 
                        order.
                            (ii) Hearing procedure.--If a hearing is 
                        requested, the initial agency decision shall be 
                        made by an administrative law judge, and such 
                        decision shall become the final order unless 
                        the Secretary modifies or vacates the decision. 
                        Notice of intent to modify or vacate the 
                        decision of the administrative law judge shall 
                        be issued to the parties within 30 days after 
                        the date of the decision of the judge. A final 
                        order which takes effect under this paragraph 
                        shall be subject to review only as provided 
                        under subparagraph (D).
                    (D) Judicial review.--
                            (i) Filing of action for review.--Any 
                        entity against whom an order imposing a civil 
                        money penalty has been entered after an agency 
                        hearing under this paragraph may obtain review 
                        by the United States district court for any 
                        district in which such entity is located or the 
                        United States District Court for the District 
                        of Columbia by filing a notice of appeal in 
                        such court within 30 days from the date of such 
                        order, and simultaneously sending a copy of 
                        such notice by registered mail to the 
                        Secretary.
                            (ii) Certification of administrative 
                        record.--The Secretary shall promptly certify 
                        and file in such court the record upon which 
                        the penalty was imposed.
                            (iii) Standard for review.--The findings of 
                        the Secretary shall be set aside only if found 
                        to be unsupported by substantial evidence as 
                        provided by section 706(2)(E) of title 5, 
                        United States Code.
                            (iv) Appeal.--Any final decision, order, or 
                        judgment of the district court concerning such 
                        review shall be subject to appeal as provided 
                        in chapter 83 of title 28 of such Code.
                    (E) Failure to pay assessment; maintenance of 
                action.--
                            (i) Failure to pay assessment.--If any 
                        entity fails to pay an assessment after it has 
                        become a final and unappealable order, or after 
                        the court has entered final judgment in favor 
                        of the Secretary, the Secretary shall refer the 
                        matter to the Attorney General who shall 
                        recover the amount assessed by action in the 
                        appropriate United States district court.
                            (ii) Nonreviewability.--In such action the 
                        validity and appropriateness of the final order 
                        imposing the penalty shall not be subject to 
                        review.
                    (F) Payment of penalties.--Except as otherwise 
                provided, penalties collected under this paragraph 
                shall be paid to the Secretary (or other officer) 
                imposing the penalty and shall be available without 
                appropriation and until expended for the purpose of 
                enforcing the provisions with respect to which the 
                penalty was imposed.
    (d) Preemption.--
            (1) In general.--Subject to subsection (b), nothing in this 
        subtitle shall be construed to prevent a State from 
        establishing, implementing, or continuing in effect standards 
        and requirements unless such standards and requirements prevent 
        the application of a requirement of this subtitle.
            (2) Rules of construction.--Except as otherwise provided 
        for in this Act, nothing in this subtitle shall be construed to 
        affect or modify the provisions of section 514 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1144).

    Subtitle B--Standard Deduction for Health Insurance and Related 
                               Provisions

SEC. 121. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Internal 
Revenue Code of 1986.

SEC. 122. STANDARD DEDUCTION FOR HEALTH INSURANCE.

    (a) In General.--Part VII of subchapter B of chapter 1 (relating to 
additional itemized deductions for individuals) is amended by 
redesignating section 224 as section 225 and by inserting after section 
223 the following new section:

``SEC. 224. STANDARD DEDUCTION FOR HEALTH INSURANCE.

    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction to the taxpayer for the taxable year the 
standard deduction for health insurance.
    ``(b) Standard Deduction for Health Insurance.--For purposes of 
this section--
            ``(1) In general.--The term `standard deduction for health 
        insurance' means the sum of the amounts determined under 
        paragraph (2) with respect to each individual for whom the 
        taxpayer is allowed a deduction under section 151 (relating to 
        allowance of deduction for personal exemptions) for the taxable 
        year.
            ``(2) Allowance for each individual.--The amount determined 
        under this paragraph with respect to any individual is the sum 
        of the monthly limitations for months during the taxable year 
        that the individual is an eligible individual.
            ``(3) Monthly limitation.--
                    ``(A) In general.--The monthly limitation for any 
                month is 1/12 of $7,500.
                    ``(B) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of taxable 
                        years beginning in calendar years after the 
                        first calendar year to which this section 
                        applies, the $7,500 amount under subparagraph 
                        (A) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                such taxable year begins, determined by 
                                substituting `the calendar year 
                                preceding the first calendar year to 
                                which section 224 applies' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--If any increase under 
                        clause (i) is not a multiple of $50, such 
                        increase shall be rounded to the nearest 
                        multiple of $50.
    ``(c) Limitations and Special Rules Relating to Standard 
Deduction.--For purposes of this section--
            ``(1) Only 2 eligible individuals taken into account.--A 
        taxpayer shall not take into account more than 2 eligible 
        individuals for any month in computing the standard deduction 
        for health insurance for purposes of subsection (a).
            ``(2) Special rule for married individuals filing 
        separately.--In the case of a married individual who files a 
        separate return for the taxable year, the deduction allowed 
        under subsection (a) shall be equal to one-half of the amount 
        which would otherwise be determined under subsection (a) if 
        such individual filed a joint return for the taxable year.
            ``(3) Denial of deduction to dependents.--No deduction 
        shall be allowed under this section to any individual with 
        respect to whom a deduction under section 151 is allowable to 
        another taxpayer for a taxable year beginning in the calendar 
        year in which such individual's taxable year begins.
            ``(4) Coordination with other health tax incentives.--
                    ``(A) Denial of deduction if health insurance costs 
                credit allowed.--No deduction shall be allowed under 
                this section to any taxpayer if a credit is allowed to 
                the taxpayer under section 35 or 36 for the taxable 
                year.
                    ``(B) Reduction for insurance purchased with msa or 
                hsa funds.--The amount allowed as a deduction under 
                subsection (a) for the taxable year shall be reduced by 
                the aggregate amount--
                            ``(i) paid during the taxable year from an 
                        Archer MSA to which section 220(d)(2)(B)(ii) 
                        (other than subclause (II) thereof) applies, 
                        and
                            ``(ii) paid during the taxable year from a 
                        health savings account to which section 
                        223(d)(2)(C) (other than clause (ii) thereof) 
                        applies.
            ``(5) Special rule for divorced parents, etc.--
        Notwithstanding subsection (b)(1), an individual who is a child 
        may be taken into account on the return of the parent other 
        than the parent for whom a deduction with respect to the child 
        is allowed under section 151 for a taxable year beginning in a 
        calendar year if--
                    ``(A) the parent for whom the deduction under 
                section 151 is allowed for a taxable year beginning in 
                such calendar year signs a written declaration (in such 
                manner and form as the Secretary may by regulations 
                prescribe) that such parent will not claim the 
                deduction allowable under this section with respect to 
                the child for taxable years beginning in such calendar 
                year, and
                    ``(B) the parent for whom the deduction under 
                section 151 is not allowed attaches such written 
                declaration to the parent's return for the taxable year 
                beginning in such calendar year.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, an individual who is 
                covered under a qualified health plan as of the 1st day 
                of such month.
                    ``(B) Coverage under medicare, medicaid, or schip 
                and grandfathered employer coverage.--The term 
                `eligible individual' shall not include any individual 
                who for any month is--
                            ``(i) entitled to benefits under part A of 
                        title XVIII of the Social Security Act or 
                        enrolled under part B of such title,
                            ``(ii) enrolled in the program under title 
                        XIX or XXI of such Act (other than under 
                        section 1928 of such Act), or
                            ``(iii) receiving benefits (other than 
                        under continuation coverage under section 
                        4980B) which constitute medical care from an 
                        employer--
                                    ``(I) from whom such individual is 
                                separated from service at the time of 
                                receipt of such benefits, and
                                    ``(II) after such separation, if 
                                such benefits began before January 1, 
                                2010,
                unless such individual is also covered by a qualified 
                health plan as of the 1st day of such month.
                    ``(C) Identification requirements.--The term 
                `eligible individual' shall not include any individual 
                for any month unless the policy number associated with 
                coverage under the qualified health plan and the TIN of 
                each eligible individual covered under such coverage 
                for such month is included on the return for the 
                taxable year in which such month occurs.
            ``(2) Qualified health plan.--
                    ``(A) In general.--The term `qualified health plan' 
                means a health plan (within the meaning of section 
                223(c)(2), without regard to subparagraph (A)(i) 
                thereof) which, under regulations prescribed by the 
                Secretary, meets the following requirements:
                            ``(i) The plan has a reasonable annual or 
                        lifetime benefit maximum.
                            ``(ii) The plan has coverage for inpatient 
                        and outpatient care, emergency benefits, and 
                        physician care.
                            ``(iii) No pre-existing condition 
                        limitations are imposed with respect to any 
                        eligible individual.
                            ``(iv) The plan has coverage which 
                        meaningfully limits individual economic 
                        exposure to extraordinary medical expenses
                    ``(B) Exclusion of certain plans.--The term 
                `qualified health plan' does not include--
                            ``(i) a health plan if substantially all of 
                        its coverage is coverage described in section 
                        223(c)(1)(B),
                            ``(ii) any program or benefits referred to 
                        in clause (i), (ii), or (iii) of paragraph 
                        (1)(B), and
                            ``(iii) a medicare supplemental policy (as 
                        defined in section 1882 of the Social Security 
                        Act).
    ``(e) Regulations.--The Secretary may prescribe such regulations as 
may be necessary to carry out this section.''.
    (b) Deduction Allowed Whether or Not Individual Itemizes Other 
Deductions.--Subsection (a) of section 62 is amended by inserting 
before the last sentence at the end the following new paragraph:
            ``(22) Standard deduction for health insurance.--The 
        deduction allowed by section 224.''.
    (c) Election to Take Health Insurance Costs Credit.--Section 35(g) 
(relating to special rules for credit for health insurance costs of 
eligible individuals) is amended by redesignating paragraph (9) as 
paragraph (10) and by inserting after paragraph (8) the following new 
paragraph:
            ``(9) Election not to claim credit.--This section shall not 
        apply to a taxpayer for any taxable year if such taxpayer 
        elects to have this section not apply for such taxable year.''.
    (d) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 is amended by striking the item relating to 
section 224 and adding at the end the following new items:

``Sec. 224. Standard deduction for health insurance.
``Sec. 225. Cross reference.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

SEC. 123. CHANGES TO EXISTING TAX PREFERENCES FOR MEDICAL COVERAGE AND 
              COSTS FOR INDIVIDUALS ELIGIBLE FOR STANDARD DEDUCTION FOR 
              HEALTH INSURANCE.

    (a) Deduction for Medical, Dental, etc., Expenses.--Section 213 
(relating to medical, dental, etc., expenses) is amended by adding at 
the end the following new subsection:
    ``(f) Termination of Deduction for Individuals Not Covered by 
Medicare, Medicaid, SCHIP, or Grandfathered Employer Plans.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        deduction shall be allowed under subsection (a) for any taxable 
        year with respect to which a deduction under section 224 is 
        allowable.
            ``(2) Exception for individuals covered by medicare, 
        medicaid, schip, or grandfathered employer plans.--Paragraph 
        (1) shall not apply to an individual for any taxable year if 
        such individual is not an eligible individual (as defined in 
        section 224(d)(1)) for any month during such taxable year by 
        reason of coverage described in section 224(d)(1)(B).''.
    (b) Exclusion for Contributions by Employer to Accident and Health 
Plans.--
            (1) In general.--Section 106 (relating to contributions by 
        employer to accident and health plans) is amended by adding at 
        the end the following new subsection:
    ``(f) Subsections (a) and (c) Apply Only to Individuals Covered by 
Medicare, Medicaid, SCHIP, or Grandfathered Employer Plans.--
            ``(1) In general.--Except as provided in paragraph (2), 
        subsections (a) and (c) shall not apply for any taxable year 
        with respect to which a deduction under section 224 is 
        allowable.
            ``(2) Exception for individuals covered by medicare, 
        medicaid, schip, or grandfathered employer plans.--Paragraph 
        (1) shall not apply to an individual for any taxable year if 
        such individual is not an eligible individual (as defined in 
        section 224(d)(1)) for any month during such taxable year by 
        reason of coverage described in section 224(d)(1)(B).''.
            (2) Conforming amendments.--
                    (A) Section 106(b)(1) is amended--
                            (i) by inserting ``gross income does not 
                        include'' before ``amounts contributed'', and
                            (ii) by striking ``shall be treated as 
                        employer-provided coverage for medical expenses 
                        under an accident or health plan''.
                    (B) Section 106(d)(1) is amended--
                            (i) by inserting ``gross income does not 
                        include'' before ``amounts contributed'', and
                            (ii) by striking ``shall be treated as 
                        employer-provided coverage for medical expenses 
                        under an accident or health plan''.
    (c) Amounts Received Under Accident and Health Plans.--
            (1) In general.--Section 105 (relating to amounts received 
        under accident and health plans) is amended by adding at the 
        end the following new subsection:
    ``(j) Section Only To Apply to Individuals Covered by Medicare, 
Medicaid, SCHIP, or Grandfathered Employer Plans.--
            ``(1) In general.--Except as provided in paragraph (2), 
        subsection (b) shall not apply for any taxable year with 
        respect to which a deduction under section 224 is allowable.
            ``(2) Exception for individuals covered by medicare, 
        medicaid, schip, or grandfathered employer plans.--Paragraph 
        (1) shall not apply to an individual for any taxable year if 
        such individual is not an eligible individual (as defined in 
        section 224(d)(1)) for any month during such taxable year by 
        reason of coverage described in section 224(d)(1)(B).''.
    (d) Termination of Deduction for Health Insurance Costs of Self-
Employed Individuals.--Subsection (l) of section 162 (relating to 
special rules for health insurance costs of self-employed individuals) 
is amended by adding at the end the following new paragraph:
            ``(6) Termination.--This subsection shall not apply to 
        taxable years with respect to which a deduction under section 
        224 is allowable.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

SEC. 124. EXCLUSION OF STANDARD DEDUCTION FOR HEALTH INSURANCE FROM 
              EMPLOYMENT TAXES.

    (a) In General.--Chapter 25 (relating to general provisions 
relating to employment taxes) is amended by adding at the end the 
following new section:

``SEC. 3511. EXCLUSION OF STANDARD DEDUCTION FROM EMPLOYMENT TAXES.

    ``(a) In General.--For purposes of chapters 21, 22, and 23, each of 
the following amounts for any period (determined without regard to this 
section) shall be reduced by the portion of the standard deduction for 
health insurance (as defined in section 224) allocable to the period:
            ``(1) The amount of wages determined under section 3121(a).
            ``(2) The amount of compensation determined under section 
        3231(e).
            ``(3) The amount of wages determined under section 3306(b).
    ``(b) Determination of Standard Deduction Allocable to a Period.--
For purposes of subsection (a)--
            ``(1) In general.--The determination of the portion of the 
        standard deduction for health insurance allocable to a period 
        shall be made on the basis of a qualified certificate of 
        eligible coverage furnished by the employee to the employer.
            ``(2) Qualified certificate of eligible coverage.--The term 
        `qualified certificate of eligible coverage' means a statement 
        of eligibility for the deduction allowable under section 224 
        which contains such information, is in such form, and is 
        provided at such times, as the Secretary may prescribe.
            ``(3) Only 1 certificate in effect at a time.--Except as 
        provided by the Secretary, an employee may have only 1 
        qualified certificate of eligible coverage in effect for any 
        period.
            ``(4) Election.--An employee may elect not to have this 
        section apply for any period for purposes of chapter 21 or 22.
    ``(c) Reconciliation of Erroneous Payments To Be Made at Employee 
Level.--
            ``(1) In general.--If the application of this subsection 
        results in an incorrect amount being treated as wages or 
        compensation for purposes of chapter 21, 22, or 23, whichever 
        is applicable, with respect to any employee for 1 or more 
        periods ending within a taxable year of the employee--
                    ``(A) in the case of an aggregate overpayment of 
                the taxes imposed by any such chapter for all such 
                periods, there shall be allowed as a credit against the 
                tax imposed by chapter 1 for such taxable year on such 
                employee an amount equal to the amount of such 
                overpayment, and
                    ``(B) in the case of an aggregate underpayment of 
                the taxes imposed by any such chapter for all such 
                periods, the employee shall be liable for payment of 
                the entire amount of such underpayment.
            ``(2) Credits treated as refundable.--For purposes of this 
        title, any credit determined under paragraph (1)(A) or 
        subsection (d)(2) shall be treated as if it were a credit 
        allowed under subpart C of part IV of subchapter A of chapter 
        1.
            ``(3) Rules for reporting and collection of tax.--Any tax 
        required to be paid by an employee under paragraph (1)(B) shall 
        be included with the employee's return of Federal income tax 
        for the taxable year.
            ``(4) Secretarial authority.--The Secretary shall prescribe 
        such rules as may be necessary to carry out the provisions of 
        this subsection.
    ``(d) Phase in.--
            ``(1) In general.--In the case of the first 3 calendar 
        years to which this section applies, subsection (a) shall apply 
        to wages and compensation of an employee only for purposes of 
        section 3101, 3201, 3211, or 3301, whichever is applicable.
            ``(2) Credit.--In the case of any taxable year beginning in 
        a calendar year to which paragraph (1) applies, there shall be 
        allowed as a credit against the tax imposed by chapter 1 for 
        such taxable year on an employee an amount equal to the excess 
        of--
                    ``(A) the tax imposed under section 3111 or 3231, 
                whichever is applicable, on the wages of the employee 
                for the part of such calendar year in such taxable 
                year, over
                    ``(B) the tax which would have been imposed under 
                section 3111 or 3231, whichever is applicable, on the 
                wages of the employee for the part of such calendar 
                year in such taxable year if subsection (a) had applied 
                for purposes of section 3111 or 3231.''.
    (b) Self-Employment Income.--Section 1402 (defining net earnings 
from self-employment) is amended by adding at the end the following:
    ``(l) Standard Deduction for Health Insurance.--For purposes of 
this chapter--
            ``(1) In general.--The self-employment income of a taxpayer 
        for any period (determined without regard to this subsection) 
        shall be reduced by the excess (if any) of--
                    ``(A) the portion of the standard deduction for 
                health insurance (as defined in section 224) allocable 
                to the period, over
                    ``(B) the amount of any reduction in wages or 
                compensation for such period under section 3511.
            ``(2) Determination of standard deduction allocable to a 
        period.--For purposes of paragraph (1), the portion of the 
        standard deduction allocable to any period shall be determined 
        in a manner similar to the manner under section 3511.''.
    (c) Conforming Amendments.--
            (1) Section 3121(a)(2) is amended by inserting ``which is 
        excludable from gross income under section 105 or 106'' after 
        ``such payment)''.
            (2) Subsection (a) of section 209 of the Social Security 
        Act (42 U.S.C. 409) is amended by striking ``or'' at the end of 
        paragraph (18), by striking the period at the end of paragraph 
        (19) and inserting ``; or'', and by inserting after paragraph 
        (19) the following new paragraph:
            ``(20) any amount excluded from wages under section 3511(a) 
        of the Internal Revenue Code of 1986 (relating to exclusion of 
        standard deduction from employment taxes).''.
            (3) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``, or the credit under section 3511(c)(2) 
        of such Code'' before the period at the end.
            (4) Section 209(k)(2) of the Social Security Act is amended 
        by redesignating subparagraphs (C) and (D) as subparagraphs (D) 
        and (E), respectively, and by inserting after subparagraph (B) 
        the following new subparagraph:
            ``(C) by disregarding the exclusion from wages in 
        subsection (a)(20),''.
            (5) The table of sections for chapter 25 is amended by 
        adding at the end the following new item:

``Sec. 3511. Exclusion of standard deduction from employment taxes.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to remuneration 
        paid or accrued for periods on or after the first day of the 
        first calendar year in which occurs the first date on which the 
        requirement of section 101(a) of this Act applies.
            (2) Reconciliation and self-employed.--Sections 3511(c) and 
        (d)(2) of the Internal Revenue Code of 1986 (as added by 
        subsection (a)), and the amendments made by subsection (b), 
        shall apply to taxable years beginning on or after the first 
        day described in paragraph (1).

SEC. 125. INFORMATION REPORTING.

    (a) Health Plan Providers.--Subpart B of part III of subchapter A 
of chapter 61 (relating to information concerning transactions with 
other persons) is amended by adding at the end the following new 
section:

``SEC. 6050W. COVERAGE UNDER QUALIFIED HEALTH PLAN.

    ``(a) In General.--Every person providing coverage under a 
qualified health plan (as defined in section 224(d)(2)) during a 
calendar year shall, on or before January 31 of the succeeding year, 
make a return described in subsection (b) with respect to each 
individual who is covered by such person under a qualified health plan 
for any month during the calendar year.
    ``(b) Return.--A return is described in this subsection if such 
return--
            ``(1) is in such form as the Secretary prescribes, and
            ``(2) contains--
                    ``(A) the name of the person providing coverage 
                under the qualified health plan,
                    ``(B) the name, address, and TIN of the individual 
                covered by the plan,
                    ``(C) if such individual is the owner of the policy 
                under which such plan is provided, the name, address, 
                and TIN of each other individual covered by such policy 
                and the relationship of each such individual to such 
                owner, and
                    ``(D) the specific months of the year for which 
                each individual referred to in subparagraph (B) is, as 
                of the first day of each such month, covered by such 
                plan.
    ``(c) Statement To Be Furnished With Respect to Whom Information Is 
Required.--Every person required to make a return under subsection (a) 
shall furnish to each individual whose name is required to be set forth 
in such return under subsection (b)(2)(A) a written statement showing--
            ``(1) the name, address, and phone number of the 
        information contact of the person required to make such return, 
        and
            ``(2) the information described in subsection (b)(2).
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) was required to be 
made.''.
    (b) Employers.--Subsection (a) of section 6051 (relating to 
requirement for employers to provide W-2 information) is amended by 
striking ``and'' at the end of paragraph (12), by striking the period 
at the end of paragraph (13) and inserting ``, and'', and by inserting 
after paragraph (13) the following new paragraph:
            ``(14) the value (determined under section 4980B(f)(4)) of 
        employer-provided coverage for each month under an accident or 
        health plan and the category of such coverage for purposes of 
        section 6116.''.
    (c) Application to Retirees.--Subsection (a) of section 6051 is 
amended by adding at the end the following: ``In the case of a retiree, 
this section shall (to the extent established by the Secretary by 
regulation) apply only with respect to paragraph (14).''.
    (d) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of such Code 
        (relating to definitions) is amended by redesignating clauses 
        (xv) through (xx) as clauses (xvi) through (xxi), respectively, 
        and by inserting after clause (xi) the following new clause:
                            ``(xv) section 6050W (relating to returns 
                        relating to payments for qualified health 
                        insurance),''.
            (2) Paragraph (2) of section 6724(d) of such Code is 
        amended by striking the period at the end of subparagraph (CC) 
        and inserting ``, or'' and by adding at the end the following 
        new subparagraph:
                    ``(DD) section 6050W(d) (relating to returns 
                relating to payments for qualified health 
                insurance).''.
    (e) Clerical Amendment.--The table of sections for such subpart B 
is amended by adding at the end the following new item:

``Sec. 6050W. Coverage under qualified health plan.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

SEC. 126. REDUCTION OF PHASEOUT FOR EARNED INCOME CREDIT.

    (a) In General.--Paragraph (1) of section 32(b) (relating to 
percentages) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``15.98'' and inserting ``15'', and
                    (B) by striking ``21.06'' and inserting ``15'',
            (2) in subparagraph (B)--
                    (A) by striking ``15.98'' and inserting ``15'', and
                    (B) by striking ``20.22'' and inserting ``15'', and
            (3) in subparagraph (C)--
                    (A) by striking ``15.98'' and inserting ``15'', and
                    (B) by striking ``17.68'' and inserting ``15''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to taxable years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

  Subtitle C--Health Insurance Tax Credit for the Purchase of Health 
                               Insurance

             PART I--REFUNDABLE HEALTH INSURANCE TAX CREDIT

SEC. 131. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle an amount 
equal to the health insurance credit amount of the taxpayer for the 
taxable year.
    ``(b) Health Insurance Credit Amount.--For purposes of this 
section--
            ``(1) In general.--The term `health insurance credit 
        amount' means, with respect to any taxable year, the lesser 
        of--
                    ``(A) the sum of the amounts determined under 
                paragraph (2) with respect to each individual for whom 
                the taxpayer is allowed a deduction under section 151 
                (relating to allowance of deduction for personal 
                exemptions) for the taxable year, or
                    ``(B) an amount equal to twice the individual 
                annual limit in effect for the taxable year under 
                paragraph (3).
            ``(2) Allowance for each individual.--The amount determined 
        under this paragraph with respect to any individual is the sum 
        of the monthly limitations for coverage months of the 
        individual occurring during the taxable year.
            ``(3) Monthly limitation.--
                    ``(A) In general.--The monthly limitation for any 
                month is 1/12 of the individual annual limit for the 
                taxable year.
                    ``(B) Individual annual limit.--The individual 
                annual limit is $2,500.
                    ``(C) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of taxable 
                        years beginning in calendar years after the 
                        first calendar year to which this section 
                        applies, the $2,500 amount under subparagraph 
                        (B) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                such taxable year begins, determined by 
                                substituting `the calendar year 
                                preceding the first calendar year to 
                                which section 36 applies' for `calendar 
                                year 1992' in subparagraph (B) thereof.
                            ``(ii) Rounding.--If any increase under 
                        clause (i) is not a multiple of $50, such 
                        increase shall be rounded to the nearest 
                        multiple of $50.
            ``(4) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an individual, any month if--
                            ``(i) as of the first day of such month 
                        such individual is covered by qualified health 
                        insurance, and
                            ``(ii) the premium for coverage under such 
                        insurance for such month is paid by the 
                        taxpayer.
                    ``(B) Exception for employer-subsidized coverage.--
                If an individual is eligible to participate for any 
                month in any subsidized health plan maintained by any 
                employer of the taxpayer or the taxpayer's spouse, such 
                month shall not be treated as a coverage month with 
                respect to the individual.
                    ``(C) Exception for certain governmental 
                coverage.--The term `coverage month' shall not include 
                any month with respect to an individual if for such 
                month the individual is--
                            ``(i) entitled to benefits under part A of 
                        title XVIII of the Social Security Act or 
                        enrolled under part B of such title,
                            ``(ii) enrolled in the program under title 
                        XIX or XXI of such Act (other than under 
                        section 1928 of such Act), unless the 
                        individual has elected under such program to be 
                        enrolled for coverage under qualified health 
                        insurance for the month in lieu of coverage 
                        under such program, or
                            ``(iii) is entitled to any benefit under--
                                    ``(I) chapter 55 of title 10, 
                                United States Code,
                                    ``(II) chapter 17 of title 38, 
                                United States Code, or
                                    ``(III) any medical care program 
                                under the Indian Health Care 
                                Improvement Act.
                    ``(D) Prisoners.--The term `coverage month' shall 
                not include any month with respect to an individual if 
                for such month the individual is imprisoned under 
                Federal, State, or local authority for a period of at 
                least 1 month.
                    ``(E) Insufficient presence in united states.--The 
                term `coverage month' shall not include any month 
                during a taxable year with respect to an individual if 
                such individual is present in the United States on 
                fewer than 183 days during such year (determined in 
                accordance with section 7701(b)(7)).
    ``(c) Limitations.--
            ``(1) Phaseout of credit based on adjusted gross income.--
                    ``(A) In general.--If the taxpayer's modified 
                adjusted gross income exceeds the applicable threshold 
                amount for any taxable year, the amount allowed as a 
                credit under subsection (a) (determined without regard 
                to this paragraph) shall be reduced (but not below 
                zero) by the amount which bears the same ratio to such 
                amount as such excess bears to an amount equal to the 
                difference between the applicable threshold amount and 
                300 percent of the applicable threshold amount.
                    ``(B) Applicable threshold amount.--For purposes of 
                subparagraph (A), the applicable threshold amount for a 
                taxable year shall be determined in accordance with the 
                following table:

 
         ``If the number of personal exemptions is:                 The applicable  threshold  amount is:
 
1..........................................................      $10,210
2..........................................................      $13,690
3..........................................................      $17,170
4 or more..................................................      $20,650
 

                    ``(C) Personal exemptions.--For purposes of 
                subparagraph (B), the number of personal exemptions of 
                a taxpayer is equal to the number of individuals for 
                whom the taxpayer is allowed a deduction under section 
                151 (relating to allowance of deduction for personal 
                exemptions) for the taxable year.
                    ``(D) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of taxable 
                        years beginning in calendar years after the 
                        first calendar year to which this section 
                        applies, each of the dollar amounts in the 
                        table under subparagraph (B) shall be increased 
                        by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                such taxable year begins, determined by 
                                substituting `the calendar year 
                                preceding the first calendar year to 
                                which section 36 applies' for `calendar 
                                year 1992' in subparagraph (B) thereof.
                            ``(ii) Rounding.--If any increase under 
                        clause (i) is not a multiple of $50, such 
                        increase shall be rounded to the nearest 
                        multiple of $50.
                    ``(E) Modified adjusted gross income.--The term 
                `modified adjusted gross income' means adjusted gross 
                income determined--
                            ``(i) without regard to sections 911, 931, 
                        and 933, and
                            ``(ii) after application of sections 86, 
                        135, 137, 219, 221, and 469.
            ``(2) Identification requirements.--No credit shall be 
        allowed under subsection (a) for any coverage month with 
        respect to an individual unless the policy number associated 
        with coverage under the qualified health plan and the TIN of 
        the individual covered under such coverage for such month is 
        included on the return for the taxable year in which such month 
        occurs.
    ``(d) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' means coverage under--
            ``(1) a qualified core plan certified under section 102 of 
        the Ten Steps to Transform Health Care in America Act , and
            ``(2) any plan certified under section 103 of such Act as a 
        qualified core compatible plan with respect to a qualified core 
        plan.
    ``(e) Archer MSA and Health Savings Account Contributions.--
            ``(1) In general.--If a deduction would (but for paragraph 
        (2)) be allowed under section 220 or 223 to the taxpayer for a 
        payment for the taxable year to the Archer MSA or health 
        savings account of an individual established in connection with 
        qualified health insurance, subsection (a) shall be applied by 
        treating such payment as a payment for qualified health 
        insurance for such individual.
            ``(2) Denial of double benefit.--No deduction shall be 
        allowed under section 220 or 223 for that portion of the 
        payments otherwise allowable as a deduction under section 220 
        or 223 for the taxable year which is equal to the amount of 
        credit allowed for such taxable year by reason of this 
        subsection.
    ``(f) Special Rules.--For purposes of this section--
            ``(1) Married couples must file joint return.--If the 
        taxpayer is married at the close of the taxable year, the 
        credit shall be allowed under subsection (a) only if the 
        taxpayer and the taxpayer's spouse file a joint return for the 
        taxable year.
            ``(2) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(3) Denial of double benefit.--No credit shall be allowed 
        under subsection (a) if the credit under section 35 is allowed 
        and no credit shall be allowed under 35 if a credit is allowed 
        under this section.
            ``(4) Special rule for divorced parents, etc.--A rule 
        similar to the rule of section 224(c)(5) shall apply for 
        purposes of this section.
            ``(5) Election not to claim credit.--This section shall not 
        apply to a taxpayer for any taxable year if such taxpayer 
        elects to have this section not apply for such taxable year.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 36 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

``Sec. 36. Refundable credit for health insurance coverage.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

SEC. 132. ADVANCE PAYMENT OF CREDIT FOR PURCHASERS OF QUALIFIED HEALTH 
              INSURANCE.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 
(relating to miscellaneous provisions) is amended by adding at the end 
the following new section:

``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR PURCHASERS OF QUALIFIED 
              HEALTH INSURANCE.

    ``(a) General Rule.--In the case of an eligible individual, the 
Secretary shall make payments to the provider of such individual's 
qualified health insurance equal to such individual's qualified health 
insurance credit advance amount with respect to such provider.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual--
            ``(1) who purchases qualified health insurance (as defined 
        in section 36(d)), and
            ``(2) for whom a qualified health insurance credit 
        eligibility certificate is in effect.
    ``(c) Qualified Health Insurance Credit Eligibility Certificate.--
For purposes of this section, a qualified health insurance credit 
eligibility certificate is a statement furnished by an individual to 
the Secretary which--
            ``(1) certifies that the individual will be eligible to 
        receive the credit provided by section 36 for the taxable year,
            ``(2) estimates the amount of such credit for such taxable 
        year, and
            ``(3) provides such other information as the Secretary may 
        require for purposes of this section.
    ``(d) Qualified Health Insurance Credit Advance Amount.--For 
purposes of this section, the term `qualified health insurance credit 
advance amount' means, with respect to any provider of qualified health 
insurance, the lesser of--
            ``(1) the Secretary's estimate of the amount of credit 
        allowable under section 36 to the individual for the taxable 
        year which is attributable to the insurance provided to the 
        individual by such provider, or
            ``(2) the aggregate premiums with respect to such insurance 
        for months occurring during such taxable year.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

``Sec. 7529. Advance payment of credit for purchasers of qualified 
                            health insurance.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the first 
calendar year in which occurs the first date on which the requirement 
of section 101(a) of this Act applies.

SEC. 133. DESIGNATION OF HEALTH INSURANCE STATUS REQUIRED BY 
              INDIVIDUALS ON FEDERAL INCOME TAX RETURNS.

    (a) In General.--Subchapter B of chapter 61 of the Internal Revenue 
Code of 1986 (relating to miscellaneous provisions involving 
information and returns) is amended by redesignating section 6116 as 
section 6117 and by inserting after section 6115 the following new 
section:

``SEC. 6116. DESIGNATION OF HEALTH INSURANCE STATUS REQUIRED BY 
              INDIVIDUALS ON FEDERAL INCOME TAX RETURNS.

    ``(a) General Rule.--In the case of an individual, if a taxpayer is 
required to file a return of tax imposed by chapter 1 for such taxable 
year, the taxpayer shall include with such return the designation 
described in subsection (b) with respect to the taxpayer and the spouse 
or any dependent of the taxpayer with respect to whom a deduction under 
section 151 is allowed to the taxpayer for the taxable year.
    ``(b) Designation.--
            ``(1) In general.--The taxpayer shall designate with 
        respect to each individual described in subsection (a) which of 
        the following categories of health insurance coverage is 
        applicable to the individual as of the close of the taxable 
        year for which the return is being filed:
                    ``(A) Coverage under a qualified health plan (as 
                defined in section 224(d)(2).
                    ``(B) Coverage under qualified health insurance (as 
                defined in section 36(d)).
                    ``(C) Coverage under an employer-sponsored health 
                plan which is licensed and regulated by the State in 
                which the individual resides.
                    ``(D) Coverage under an employer-sponsored, self-
                insured health plan which meets the requirements of the 
                Employee Retirement Income Security Act of 1974 and any 
                other applicable law.
                    ``(E) Coverage described in clause (i), (ii), or 
                (iii) of section 224(d)(1)(B) (relating to coverage 
                under medicare, medicaid, schip or grandfathered 
                employer coverage).
                    ``(F) Coverage not described in any of the 
                preceding subparagraphs.
                    ``(G) No coverage.
            ``(2) Form and manner.--The Secretary shall prescribe the 
        form and manner of making the designation under this 
        section.''.
    (b) Conforming Amendments.--The table of sections for subchapter B 
of chapter 61 of such Code is amended by striking the item relating to 
section 6116 and inserting the following new items:

``Sec. 6116. Designation of health insurance status required by 
                            individuals on Federal income tax returns.
``Sec. 6117. Cross reference.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning in--
            (1) the calendar year preceding the first calendar year in 
        which occurs the first date on which the requirement of section 
        101(a) of this Act applies, and
            (2) any calendar year following the calendar year described 
        in paragraph (1).

                   Subtitle D--Education and Outreach

SEC. 141. NOTICE TO TAXPAYERS OF AVAILABILITY OF STANDARD DEDUCTION FOR 
              HEALTH INSURANCE AND REFUNDABLE HEALTH INSURANCE CREDIT.

    The Secretary of the Treasury or the Secretary's delegate shall 
ensure that--
            (1) any instructions booklet accompanying an individual 
        Federal income tax return form (including forms 1040, 1040A, 
        1040EZ, and any similar or successor forms) , and
            (2) any other publication, announcement, or website that 
        the Secretary or the Secretary's delegate considers 
        appropriate,
shall include, in clear language, in conspicuous print, and in a 
conspicuous place, information with respect to the availability of the 
standard deduction for health insurance or the health insurance tax 
credit for individuals enrolled in qualified core health plans and 
qualified core compatible plans certified as meeting the requirements 
of this Act. The requirement of this section shall apply with respect 
to booklets, publications, announcements, or information on websites 
made available on and after the date that is 1 year before the first 
date on which the coverage requirement under section 101(a) of this Act 
becomes effective.

SEC. 142. OPTIONAL ENROLLMENT AND OUTREACH.

    (a) Option for Medicaid or SCHIP Eligible Individuals To Enroll in 
a Qualified Core Plan.--The Secretary of Health and Human Services, in 
consultation with the Secretary of the Treasury and the States, shall 
establish a process for permitting an individual who is eligible for 
medical assistance under a State plan or waiver under title XIX of the 
Social Security Act, or for child health assistance or other health 
benefits coverage under a State child health plan or waiver under title 
XXI of such Act, to elect to enroll (or in the case of an individual 
who is a child under age 18, for the individual's family to elect to be 
enrolled) in a qualified core plan offered in the State of residence of 
the individual in lieu of being enrolled in such State plan or waiver 
for the year. The process established pursuant to this subsection 
shall--
            (1) allow for such an election to be made on an annual 
        basis;
            (2) require the State of residence of the individual to 
        notify the Secretary of Health and Human Services and the 
        Secretary of the Treasury of the actuarial value of the 
        benefits and cost-sharing protection that would have been 
        provided to the individual under the State plan or waiver under 
        title XIX or XXI of the Social Security Act for the year;
            (3) allow for an increase in the refundable credit 
        established under section 36 of the Internal Revenue Code of 
        1986 for the year in an amount equal to the actuarial value 
        determined for purposes of paragraph (2); and
            (4) require, as a condition of the continued approval of 
        such State plans or waivers, for the Secretary of Health and 
        Human Services to reduce the amount to be paid to the State of 
        residence of the individual under section 1903(a) or 2105(a) of 
        the Social Security Act (as appropriate) for each calendar 
        quarter occurring during the year for which such credit applies 
        by an amount equal to \1/4\ of the State share of the amount 
        described in paragraph (3).
    (b) Additional Outreach.--
            (1) Establishment of outreach program.--Not later than 1 
        year after the date of enactment of this Act. the Secretary of 
        Health and Human Services, in consultation with the Secretary 
        of the Treasury, the States, and representatives of community 
        health centers, hospitals, and other health care providers, 
        shall establish a program under which the Secretary of Health 
        and Human Services shall provide access to informational 
        materials regarding the standard deduction for health insurance 
        established under section 224 of the Internal Revenue Code of 
        1986 and the refundable credit established under section 36 of 
        such Code, including State-specific contact information for 
        more detailed information and assistance, through health care 
        providers and a national Internet website that meets the 
        requirements of paragraph (1).
            (2) Targeting of health care providers that serve the 
        uninsured and the under insured.--The program established under 
        paragraph (1) shall give priority to disseminating such 
        information through those health care providers that primarily 
        serve uninsured or under insured individuals.
            (3) National information website.--For purposes of 
        paragraph (1), the requirements of this subparagraph are that 
        the Secretary of Health and Human Services establishes a one-
        stop website that provides information on the standard 
        deduction for health insurance established under section 224 of 
        the Internal Revenue Code of 1986 and the health insurance tax 
        credit established under section 36 of Code. The website 
        shall--
                    (A) include significant timelines for action, a 
                general description of enrollment processes, and links 
                to State insurance commissioners' sites, which approve 
                qualified core plans and shall provide a portal for 
                comparison of such plans with respect to each State; 
                and
                    (B) provide such information in a manner that--
                            (i) is concise, clear, and easy to 
                        understand;
                            (ii) allows the information to be accessed 
                        in a downloadable format;
                            (iii) provides appropriate links or 
                        contacts for further information; and
                            (iv) allows for use by providers in order 
                        to inform consumers at the point of delivery of 
                        health care items and services.

  TITLE II--INCREASING INSURANCE MARKET PORTABILITY AND AFFORDABILITY

          Subtitle A--Merging and Improving Insurance Markets

SEC. 201. DEVELOPMENT OF MERGED AND IMPROVED STATE INSURANCE MARKET 
              STANDARDS.

    (a) In General.--The Secretary, in consultation with State 
insurance commissioners and the National Association of Insurance 
Commissioners, shall promulgate regulations providing for the 
establishment in each State of a single market for all health plans 
(other than self-funded plans or Federal or State governmental health 
coverage programs) offered in each State.
    (b) Requirements.--The regulations promulgated under subsection (a) 
shall, with respect to each State, require--
            (1) that State health insurance laws applicable to the 
        small group market in the State be modified, except as provided 
        for otherwise in this Act, to apply to all health plans offered 
        in the State regardless of whether such plans are being 
        purchased for the coverage of individuals or for groups;
            (2) that the provisions of part A of title XXVII of the 
        Public Health Service Act (42 U.S.C. 300gg et seq.) (relating 
        to group market rules) shall apply to all health plans offered 
        in the State, subject to such modification as may be necessary 
        to clarify and effectuate the application of such rules to all 
        such health plans;
            (3) that the provisions of part B of title XXVII of the 
        Public Health Service Act (42 U.S.C. 300gg-41 et seq.) 
        (relating to individual market rules), and any other provisions 
        or definitions within such title XXVII that apply independent 
        standards to individual insurance markets or that relate to the 
        relationship between such markets and group markets, shall be 
        superseded by the provisions of this Act and shall have no 
        force or effect; and
            (4) that each health plan offered in the State fully comply 
        with all standards provided for in this subsection, and that 
        such standards, if not provided for otherwise in this Act, 
        shall include requirements that each health plan--
                    (A) must accept for enrollment under such plan 
                every eligible individual who applies for enrollment 
                during the period in which the individual first becomes 
                eligible to enroll in such plan and may not place any 
                restriction which is inconsistent with section 2702 or 
                2711 of the Public Health Service Act (42 U.S.C. 300gg-
                1 and 300gg-11) on an eligible individual enrolling in 
                such plan;
                    (B) must renew or continue in force coverage under 
                such plan at the option of the enrollee in accordance 
                with section 2712 of such Act (42 U.S.C. 300gg-12);
                    (C) must ensure that there is no re-underwriting of 
                such plan; and
                    (D) must comply with the portability requirements 
                of section 2701 of such Act (42 U.S.C. 300gg);
            (5) that the State comply with the regulations promulgated 
        under section 211(d) with respect to reducing the effect of 
        such material risk selection as may occur among health plans 
        (including self-insured plans) through the establishment of 
        State-based risk adjustment requirements.

SEC. 202. MODIFICATIONS RELATING TO SELF-FUNDED GROUP HEALTH PLANS.

    (a) ERISA.--Section 734 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1191c) is amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
    ``(a) In General.--The Secretary''; and
            (2) by adding at the end the following:
    ``(b) Modification Relating to the Elimination of the Individual 
Markets.--
            ``(1) In general.--The Secretary shall promulgate 
        regulations, or modify existing regulations, under this part as 
        the Secretary determines necessary to reflect changes in State 
        law pursuant to the Ten Steps to Transform Health Care in 
        America Act (and the amendments made by that Act) with respect 
        to the treatment of individual State health insurance markets 
        and to ensure the continued application of this part to self-
        funded group health plans notwithstanding such changes.
            ``(2) Clarifications.--The regulations or modification 
        promulgated under paragraph (1) shall not be construed as 
        otherwise materially altering the provisions of this part as 
        such provisions apply to self-funded group health plans. 
        Nothing in this subsection shall be construed to preempt the 
        application of State insurance laws with respect to State 
        regulated health insurance products.''.
    (b) Internal Revenue Code.--Section 9833 of the Internal Revenue 
Code of 1986 is amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
    ``(a) In General.--The Secretary''; and
            (2) by adding at the end the following:
    ``(b) Modification Relating to the Elimination of the Individual 
Markets.--
            ``(1) In general.--The Secretary shall promulgate 
        regulations, or modify existing regulations, under this chapter 
        as the Secretary determines necessary to reflect changes in 
        State law pursuant to the Ten Steps to Transform Health Care in 
        America Act (and the amendments made by that Act) with respect 
        to the treatment of individual State health insurance markets 
        and to ensure the continued application of this part to self-
        funded group health plans notwithstanding such changes.
            ``(2) Clarifications.--The regulations or modification 
        promulgated under paragraph (1) shall not be construed as 
        otherwise materially altering the provisions of this part as 
        such provisions apply to self-funded group health plans. 
        Nothing in this subsection shall be construed to preempt the 
        application of State insurance laws with respect to State 
        regulated health insurance products.''.

SEC. 203. LEGISLATIVE PROPOSALS.

    Not later than 1 year after the date of enactment of this Act, and 
every 3 years thereafter, the Secretary of Health and Human Services, 
the Secretary of Labor, and the Secretary or the Treasury, in 
consultation with the National Association of Insurance Commissioners, 
shall jointly conduct a review of the effect of this subtitle (and the 
regulations promulgated thereunder) on health insurance access and 
affordability, particularly for individuals with chronic illness or 
catastrophic medical expenses, and on market competition, and shall 
submit a report concerning such review to the appropriate committees of 
Congress that contains proposals for such amendments as each such 
Secretary may determine would substantially improve the effectiveness 
and the implementation of this subtitle.

SEC. 204. ENFORCEMENT.

    The provisions of section 106 shall apply with respect to the 
implementation and enforcement of the requirements of this subtitle in 
the same manner as such provisions apply to subtitle A of title I.

     Subtitle B--Reduction in Premium Variation and Health Status 
                             Discrimination

SEC. 211. DEVELOPMENT OF STANDARDS FOR REDUCTION IN PREMIUM VARIATION 
              AND HEALTH STATUS DISCRIMINATION AMONG ENROLLEES.

    (a) In General.--The Secretary, in consultation with State 
insurance commissioners and the National Association of Insurance 
Commissioners, shall promulgate regulations providing for the 
application by each State in the health insurance market of such State 
of improved standards regarding the range of allowable premium 
variation for enrollees.
    (b) Requirements.--The regulations promulgated under subsection (a) 
shall, with respect to each State, require--
            (1) that for qualified core plans offered in the State--
                    (A) no premium variation based on health status or 
                any other factor shall be permitted; and
                    (B) the standard premium amount shall be the same 
                for all enrollees;
            (2) that for compatible qualified core plans offered in the 
        State--
                    (A) no premium variation based on health status 
                shall be permitted; and
                    (B) rating variation based on enrollee age shall be 
                the only permitted rating factor so long as the total 
                variation in premium rates charged by an issuer for 
                coverage under such plan shall not be greater than a 
                factor of 2:1; and
            (3) that for all other health insurance products offered in 
        the State--
                    (A) no premium variation based on health status 
                shall be permitted; and
                    (B) except as otherwise provided in this paragraph, 
                premium variation shall be permitted as determined by 
                State law, subject to the application of small group 
                market rules to all insured health plan in a State 
                pursuant to section 201(a) and (b).
    (c) State Rating Discretion Otherwise Permitted.--Except as 
provided for in subsection (b), nothing in this section shall be 
construed to preempt the State application of such health insurance 
premium rating factors as a State may determine appropriate.
    (d) State-Based Risk Adjustments.--
            (1) In general.--The regulations promulgated under 
        subsection (a) and otherwise promulgated under this subtitle 
        shall require the State to establish risk adjustment 
        requirements to reduce the effect of such material risk 
        selection as may occur among qualified core plans, qualified 
        core compatible plans, and other health plans in a State (not 
        including self-insured plans) through the application of State 
        risk adjustment requirements that are certified by the 
        Secretary, pursuant to such regulations, as meeting standards 
        established by the Secretary (in consultation with the National 
        Association of Insurance Commissioners).
            (2) Assessment and report on state-based risk adjustment.--
                    (A) In general.--Prior to the promulgation of 
                standards under paragraph (1), the Secretary, in 
                consultation with the National Association of Insurance 
                Commissioners, shall conduct an assessment of--
                            (i) the degree of significant actual or 
                        actuarially anticipated material adverse 
                        selection among qualified core plans, qualified 
                        core compatible plans, and other insured health 
                        plans in a State; and
                            (ii) the comparative effectiveness of State 
                        risk adjustment requirement options or 
                        mechanisms to reduce the effect of such adverse 
                        selection.
                    (B) Report.--The Secretary shall submit a report to 
                Congress concerning the results of the assessment 
                conducted under subparagraph (A). Such report may 
                include recommendations by the Secretary for additional 
                or future legislation to adjust the standards developed 
                under paragraph (1) if the Secretary determines that 
                such legislation is reasonably necessary to materially 
                improve the effective application of State-based risk 
                adjustment requirements pursuant to paragraph (1).
    (e) Study and Report on Premium Rating.--
            (1) Study.--The Secretary, in consultation with the 
        National Association of Insurance Commissioners, shall conduct 
        ongoing reviews of the effect modification of State health 
        insurance premium rating rules under this section will have, or 
        has had, on health insurance affordability, access, and market 
        competition in the insurance market in the States and on a 
        national basis.
            (2) Reports.--Not later than 1 year after the date of 
        enactment of this Act, and every 2 years thereafter, the 
        Secretary shall submit to the appropriate committees of 
        Congress a report concerning the study conducted under 
        paragraph (1), which may, as the Secretary may determine, 
        include recommendations concerning proposed modifications and 
        adjustments with respect to State premium rating rules.

SEC. 212. ENFORCEMENT.

    The provisions of section 106 shall apply with respect to the 
implementation and enforcement of the requirements of this subtitle in 
the same manner as such provisions apply to subtitle A of title I.

   Subtitle C--Enhanced Marketplace Pooling and Related Market Rating

                   PART I--ENHANCED MARKETPLACE POOLS

SEC. 245. RULES GOVERNING ENHANCED MARKETPLACE POOLS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding after part 7 the 
following new part:

          ``PART 8--RULES GOVERNING ENHANCED MARKETPLACE POOLS

``SEC. 801. SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--For purposes of this part, the term `small 
business health plan' means a fully insured group health plan whose 
sponsor is (or is deemed under this part to be) described in subsection 
(b).
    ``(b) Sponsorship.--The sponsor of a group health plan is described 
in this subsection if such sponsor--
            ``(1) is organized and maintained in good faith, with a 
        constitution and bylaws specifically stating its purpose and 
        providing for periodic meetings on at least an annual basis, as 
        a bona fide trade association, a bona fide industry association 
        (including a rural electric cooperative association or a rural 
        telephone cooperative association), a bona fide professional 
        association, or a bona fide chamber of commerce (or similar 
        bona fide business association, including a corporation or 
        similar organization that operates on a cooperative basis 
        (within the meaning of section 1381 of the Internal Revenue 
        Code of 1986)), for substantial purposes other than that of 
        obtaining medical care;
            ``(2) is established as a permanent entity which receives 
        the active support of its members and requires for membership 
        payment on a periodic basis of dues or payments necessary to 
        maintain eligibility for membership;
            ``(3) does not condition membership, such dues or payments, 
        or coverage under the plan on the basis of health status-
        related factors with respect to the employees of its members 
        (or affiliated members), or the dependents of such employees, 
        and does not condition such dues or payments on the basis of 
        group health plan participation; and
            ``(4) does not condition membership on the basis of a 
        minimum group size.
Any sponsor consisting of an association of entities which meet the 
requirements of paragraphs (1), (2), (3), and (4) shall be deemed to be 
a sponsor described in this subsection.

``SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZATIONS.

    ``(a) In General.--The Secretary, not later than 1 year after the 
date of enactment of this part, shall promulgate regulations that apply 
the rules and standards of this part, as necessary, to circumstances in 
which a pooling entity other (hereinafter `Alternative Market Pooling 
Organizations') is not made up principally of employers and their 
employees, or not a professional organization or such small business 
health plan entity identified in section 801.
    ``(b) Adaption of Standards.--In developing and promulgating 
regulations pursuant to subsection (a), the Secretary, in consultation 
with the Secretary of Health and Human Services, small business health 
plans, small and large employers, large and small insurance issuers, 
consumer representatives, and state insurance commissioners, shall--
            ``(1) adapt the standards of this part, to the maximum 
        degree practicable, to assure balanced and comparable oversight 
        standards for both small business health plans and alternative 
        market pooling organizations;
            ``(2) permit the participation as alternative market 
        pooling organizations unions, churches and other faith-based 
        organizations, or other organizations composed of individuals 
        and groups which may have little or no association with 
        employment, provided however, that such alternative market 
        pooling organizations meet, and continue meeting on an ongoing 
        basis, to satisfy standards, rules, and requirements materially 
        equivalent to those set forth in this part with respect to 
        small business health plans;
            ``(3) conduct periodic verification of such compliance by 
        alternative market pooling organizations, in consultation with 
        the Secretary of Health and Human Services and the National 
        Association of Insurance Commissioners, except that such 
        periodic verification shall not materially impede market entry 
        or participation as pooling entities comparable to that of 
        small business health plans; and
            ``(4) assure that consistent, clear, and regularly 
        monitored standards are applied with respect to alternative 
        market pooling organizations to avert material risk-selection 
        within or among the composition of such organizations;
            ``(5) the expedited and deemed certification procedures 
        provided in section 805(d) shall not apply to alternative 
        market pooling organizations until sooner of the promulgation 
        of regulations under this subsection or the expiration of one 
        year following enactment of this Act; and
            ``(6) make such other appropriate adjustments to the 
        requirements of this part as the Secretary may reasonably deem 
        appropriate to fit the circumstances of an individual 
        alternative market pooling organization or category of such 
        organization, including but not limited to the application of 
        the membership payment requirements of section 801(b)(2) to 
        alternative market pooling organizations composed primarily of 
        church- or faith-based membership.

``SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

    ``(a) In General.--Not later than 6 months after the date of 
enactment of this part, the applicable authority shall prescribe by 
interim final rule a procedure under which the applicable authority 
shall certify small business health plans which apply for certification 
as meeting the requirements of this part.
    ``(b) Requirements Applicable to Certified Plans.--A small business 
health plan with respect to which certification under this part is in 
effect shall meet the applicable requirements of this part, effective 
on the date of certification (or, if later, on the date on which the 
plan is to commence operations).
    ``(c) Requirements for Continued Certification.--The applicable 
authority may provide by regulation for continued certification of 
small business health plans under this part. Such regulation shall 
provide for the revocation of a certification if the applicable 
authority finds that the small business health plan involved is failing 
to comply with the requirements of this part.
    ``(d) Expedited and Deemed Certification.--
            ``(1) In general.--If the Secretary fails to act on an 
        application for certification under this section within 90 days 
        of receipt of such application, the applying small business 
        health plan shall be deemed certified until such time as the 
        Secretary may deny for cause the application for certification.
            ``(2) Civil penalty.--The Secretary may assess a civil 
        penalty against the board of trustees and plan sponsor (jointly 
        and severally) of a small business health plan that is deemed 
        certified under paragraph (1) of up to $500,000 in the event 
        the Secretary determines that the application for certification 
        of such small business health plan was willfully or with gross 
        negligence incomplete or inaccurate.

``SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

    ``(a) Sponsor.--The requirements of this subsection are met with 
respect to a small business health plan if the sponsor has met (or is 
deemed under this part to have met) the requirements of section 801(b) 
for a continuous period of not less than 3 years ending with the date 
of the application for certification under this part.
    ``(b) Board of Trustees.--The requirements of this subsection are 
met with respect to a small business health plan if the following 
requirements are met:
            ``(1) Fiscal control.--The plan is operated, pursuant to a 
        plan document, by a board of trustees which pursuant to a trust 
        agreement has complete fiscal control over the plan and which 
        is responsible for all operations of the plan.
            ``(2) Rules of operation and financial controls.--The board 
        of trustees has in effect rules of operation and financial 
        controls, based on a 3-year plan of operation, adequate to 
        carry out the terms of the plan and to meet all requirements of 
        this title applicable to the plan.
            ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                    ``(A) Board membership.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), the members of the 
                        board of trustees are individuals selected from 
                        individuals who are the owners, officers, 
                        directors, or employees of the participating 
                        employers or who are partners in the 
                        participating employers and actively 
                        participate in the business.
                            ``(ii) Limitation.--
                                    ``(I) General rule.--Except as 
                                provided in subclauses (II) and (III), 
                                no such member is an owner, officer, 
                                director, or employee of, or partner 
                                in, a contract administrator or other 
                                service provider to the plan.
                                    ``(II) Limited exception for 
                                providers of services solely on behalf 
                                of the sponsor.--Officers or employees 
                                of a sponsor which is a service 
                                provider (other than a contract 
                                administrator) to the plan may be 
                                members of the board if they constitute 
                                not more than 25 percent of the 
                                membership of the board and they do not 
                                provide services to the plan other than 
                                on behalf of the sponsor.
                                    ``(III) Treatment of providers of 
                                medical care.--In the case of a sponsor 
                                which is an association whose 
                                membership consists primarily of 
                                providers of medical care, subclause 
                                (I) shall not apply in the case of any 
                                service provider described in subclause 
                                (I) who is a provider of medical care 
                                under the plan.
                            ``(iii) Certain plans excluded.--Clause (i) 
                        shall not apply to a small business health plan 
                        which is in existence on the date of the 
                        enactment of the Health Insurance Marketplace 
                        Modernization and Affordability Act of 2007.
                    ``(B) Sole authority.--The board has sole authority 
                under the plan to approve applications for 
                participation in the plan and to contract with 
                insurers.
    ``(c) Treatment of Franchises.--In the case of a group health plan 
which is established and maintained by a franchiser for a franchisor or 
for its franchisees--
            ``(1) the requirements of subsection (a) and section 801(a) 
        shall be deemed met if such requirements would otherwise be met 
        if the franchisor were deemed to be the sponsor referred to in 
        section 801(b) and each franchisee were deemed to be a member 
        (of the sponsor) referred to in section 801(b); and
            ``(2) the requirements of section 804(a)(1) shall be deemed 
        met.
For purposes of this subsection the terms `franchisor' and `franchisee' 
shall have the meanings given such terms for purposes of sections 
436.2(a) through 436.2(c) of title 16, Code of Federal Regulations 
(including any such amendments to such regulation after the date of 
enactment of this part).

``SEC. 805. PARTICIPATION AND COVERAGE REQUIREMENTS.

    ``(a) Covered Employers and Individuals.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan--
            ``(1) each participating employer must be--
                    ``(A) a member of the sponsor;
                    ``(B) the sponsor; or
                    ``(C) an affiliated member of the sponsor, except 
                that, in the case of a sponsor which is a professional 
                association or other individual-based association, if 
                at least one of the officers, directors, or employees 
                of an employer, or at least one of the individuals who 
                are partners in an employer and who actively 
                participates in the business, is a member or such an 
                affiliated member of the sponsor, participating 
                employers may also include such employer; and
            ``(2) all individuals commencing coverage under the plan 
        after certification under this part must be--
                    ``(A) active or retired owners (including self-
                employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or
                    ``(B) the dependents of individuals described in 
                subparagraph (A).
    ``(b) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to a small business health plan if, 
under the terms of the plan, no participating employer may provide 
health insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.
    ``(c) Prohibition of Discrimination Against Employers and Employees 
Eligible To Participate.--The requirements of this subsection are met 
with respect to a small business health plan if--
            ``(1) under the terms of the plan, all employers meeting 
        the preceding requirements of this section are eligible to 
        qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;
            ``(2) information regarding all coverage options available 
        under the plan is made readily available to any employer 
        eligible to participate; and
            ``(3) the applicable requirements of sections 701, 702, and 
        703 are met with respect to the plan.

``SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
              RATES, AND BENEFIT OPTIONS.

    ``(a) In General.--The requirements of this section are met with 
respect to a small business health plan if the following requirements 
are met:
            ``(1) Contents of governing instruments.--
                    ``(A) In general.--The instruments governing the 
                plan include a written instrument, meeting the 
                requirements of an instrument required under section 
                402(a)(1), which--
                            ``(i) provides that the board of trustees 
                        serves as the named fiduciary required for 
                        plans under section 402(a)(1) and serves in the 
                        capacity of a plan administrator (referred to 
                        in section 3(16)(A)); and
                            ``(ii) provides that the sponsor of the 
                        plan is to serve as plan sponsor (referred to 
                        in section 3(16)(B)).
                    ``(B) Description of material provisions.--The 
                terms of the health insurance coverage (including the 
                terms of any individual certificates that may be 
                offered to individuals in connection with such 
                coverage) describe the material benefit and rating, and 
                other provisions set forth in this section and such 
                material provisions are included in the summary plan 
                description.
            ``(2) Contribution rates must be nondiscriminatory.--
                    ``(A) In general.--The contribution rates for any 
                participating small employer shall not vary on the 
                basis of any health status-related factor in relation 
                to employees of such employer or their beneficiaries 
                and shall not vary on the basis of the type of business 
                or industry in which such employer is engaged, subject 
                to subparagraph (B) and the terms of this title.
                    ``(B) Effect of title.--Nothing in this title or 
                any other provision of law shall be construed to 
                preclude a health insurance issuer offering health 
                insurance coverage in connection with a small business 
                health plan that meets the requirements of this part, 
                and at the request of such small business health plan, 
                from--
                            ``(i) setting contribution rates for the 
                        small business health plan based on the claims 
                        experience of the small business health plan so 
                        long as any variation in such rates for 
                        participating small employers complies with the 
                        requirements of clause (ii), except that small 
                        business health plans shall not be subject, in 
                        non-adopting states, to subparagraphs (A)(ii) 
                        and (C) of section 2912(a)(2) of the Public 
                        Health Service Act, and in adopting states, to 
                        any State law that would have the effect of 
                        imposing requirements as outlined in such 
                        subparagraphs (A)(ii) and (C); or
                            ``(ii) varying contribution rates for 
                        participating small employers in a small 
                        business health plan in a State to the extent 
                        that such rates could vary using the same 
                        methodology employed in such State for 
                        regulating small group premium rates, subject 
                        to the terms of part I of subtitle A of title 
                        XXIX of the Public Health Service Act (relating 
                        to rating requirements), as added by title II 
                        of the Health Insurance Marketplace 
                        Modernization and Affordability Act of 2007.
            ``(3) Exceptions regarding self-employed and large 
        employers.--
                    ``(A) Self employed.--
                            ``(i) In general.--Small business health 
                        plans with participating employers who are 
                        self-employed individuals (and their 
                        dependents) shall enroll such self-employed 
                        participating employers in accordance with 
                        rating rules that do not violate the rating 
                        rules for self-employed individuals in the 
                        State in which such self-employed participating 
                        employers are located.
                            ``(ii) Guarantee issue.--Small business 
                        health plans with participating employers who 
                        are self-employed individuals (and their 
                        dependents) may decline to guarantee issue to 
                        such participating employers in States in which 
                        guarantee issue is not otherwise required for 
                        the self-employed in that State.
                    ``(B) Large employers.--Small business health plans 
                with participating employers that are larger than small 
                employers (as defined in section 808(a)(10)) shall 
                enroll such large participating employers in accordance 
                with rating rules that do not violate the rating rules 
                for large employers in the State in which such large 
                participating employers are located.
            ``(4) Regulatory requirements.--Such other requirements as 
        the applicable authority determines are necessary to carry out 
        the purposes of this part, which shall be prescribed by the 
        applicable authority by regulation.
    ``(b) Ability of Small Business Health Plans To Design Benefit 
Options.--Nothing in this part or any provision of State law (as 
defined in section 514(c)(1)) shall be construed to preclude a small 
business health plan or a health insurance issuer offering health 
insurance coverage in connection with a small business health plan from 
exercising its sole discretion in selecting the specific benefits and 
services consisting of medical care to be included as benefits under 
such plan or coverage, except that such benefits and services must meet 
the terms and specifications of part II of subtitle A of title XXIX of 
the Public Health Service Act (relating to lower cost plans), as added 
by title II of the Health Insurance Marketplace Modernization and 
Affordability Act of 2007.
    ``(c) Domicile and Non-Domicile States.--
            ``(1) Domicile state.--Coverage shall be issued to a small 
        business health plan in the State in which the sponsor's 
        principal place of business is located.
            ``(2) Non-domicile states.--With respect to a State (other 
        than the domicile State) in which participating employers of a 
        small business health plan are located but in which the insurer 
        of the small business health plan in the domicile State is not 
        yet licensed, the following shall apply:
                    ``(A) Temporary preemption.--If, upon the 
                expiration of the 90-day period following the 
                submission of a licensure application by such insurer 
                (that includes a certified copy of an approved 
                licensure application as submitted by such insurer in 
                the domicile State) to such State, such State has not 
                approved or denied such application, such State's 
                health insurance licensure laws shall be temporarily 
                preempted and the insurer shall be permitted to operate 
                in such State, subject to the following terms:
                            ``(i) Application of non-domicile state 
                        law.--Except with respect to licensure and with 
                        respect to the terms of subtitle A of title 
                        XXIX of the Public Health Service Act (relating 
                        to rating and benefits as added by the Health 
                        Insurance Marketplace Modernization and 
                        Affordability Act of 2007), the laws and 
                        authority of the non-domicile State shall 
                        remain in full force and effect.
                            ``(ii) Revocation of preemption.--The 
                        preemption of a non-domicile State's health 
                        insurance licensure laws pursuant to this 
                        subparagraph, shall be terminated upon the 
                        occurrence of either of the following:
                                    ``(I) Approval or denial of 
                                application.--The approval of denial of 
                                an insurer's licensure application, 
                                following the laws and regulations of 
                                the non-domicile State with respect to 
                                licensure.
                                    ``(II) Determination of material 
                                violation.--A determination by a non-
                                domicile State that an insurer 
                                operating in a non-domicile State 
                                pursuant to the preemption provided for 
                                in this subparagraph is in material 
                                violation of the insurance laws (other 
                                than licensure and with respect to the 
                                terms of subtitle A of title XXIX of 
                                the Public Health Service Act (relating 
                                to rating and benefits added by the 
                                Health Insurance Marketplace 
                                Modernization and Affordability Act of 
                                2007)) of such State.
                    ``(B) No prohibition on promotion.--Nothing in this 
                paragraph shall be construed to prohibit a small 
                business health plan or an insurer from promoting 
                coverage prior to the expiration of the 90-day period 
                provided for in subparagraph (A), except that no 
                enrollment or collection of contributions shall occur 
                before the expiration of such 90-day period.
                    ``(C) Licensure.--Except with respect to the 
                application of the temporary preemption provision of 
                this paragraph, nothing in this part shall be construed 
                to limit the requirement that insurers issuing coverage 
                to small business health plans shall be licensed in 
                each State in which the small business health plans 
                operate.
                    ``(D) Servicing by licensed insurers.--
                Notwithstanding subparagraph (C), the requirements of 
                this subsection may also be satisfied if the 
                participating employers of a small business health plan 
                are serviced by a licensed insurer in that State, even 
                where such insurer is not the insurer of such small 
                business health plan in the State in which such small 
                business health plan is domiciled.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

    ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), a small business health plan shall pay to the 
applicable authority at the time of filing an application for 
certification under this part a filing fee in the amount of $5,000, 
which shall be available in the case of the Secretary, to the extent 
provided in appropriation Acts, for the sole purpose of administering 
the certification procedures applicable with respect to small business 
health plans.
    ``(b) Information To Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority by 
regulation, at least the following information:
            ``(1) Identifying information.--The names and addresses 
        of--
                    ``(A) the sponsor; and
                    ``(B) the members of the board of trustees of the 
                plan.
            ``(2) States in which plan intends to do business.--The 
        States in which participants and beneficiaries under the plan 
        are to be located and the number of them expected to be located 
        in each such State.
            ``(3) Bonding requirements.--Evidence provided by the board 
        of trustees that the bonding requirements of section 412 will 
        be met as of the date of the application or (if later) 
        commencement of operations.
            ``(4) Plan documents.--A copy of the documents governing 
        the plan (including any bylaws and trust agreements), the 
        summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.
            ``(5) Agreements with service providers.--A copy of any 
        agreements between the plan, health insurance issuer, and 
        contract administrators and other service providers.
    ``(c) Filing Notice of Certification With States.--A certification 
granted under this part to a small business health plan shall not be 
effective unless written notice of such certification is filed with the 
applicable State authority of each State in which the small business 
health plans operate.
    ``(d) Notice of Material Changes.--In the case of any small 
business health plan certified under this part, descriptions of 
material changes in any information which was required to be submitted 
with the application for the certification under this part shall be 
filed in such form and manner as shall be prescribed by the applicable 
authority by regulation. The applicable authority may require by 
regulation prior notice of material changes with respect to specified 
matters which might serve as the basis for suspension or revocation of 
the certification.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

    ``A small business health plan which is or has been certified under 
this part may terminate (upon or at any time after cessation of 
accruals in benefit liabilities) only if the board of trustees, not 
less than 60 days before the proposed termination date--
            ``(1) provides to the participants and beneficiaries a 
        written notice of intent to terminate stating that such 
        termination is intended and the proposed termination date;
            ``(2) develops a plan for winding up the affairs of the 
        plan in connection with such termination in a manner which will 
        result in timely payment of all benefits for which the plan is 
        obligated; and
            ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form and 
manner as may be prescribed by the applicable authority by regulation.

``SEC. 809. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.

    ``The Secretary shall, through promulgation and implementation of 
such regulations as the Secretary may reasonably determine necessary or 
appropriate, and in consultation with a balanced spectrum of effected 
entities and persons, modify the implementation and application of this 
part to accommodate with minimum disruption such changes to State or 
Federal law provided in this part and the Ten Steps to Transform Health 
Care in America Act (and the amendments made by such Act) or in 
regulations issued thereto.

``SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION.

    ``(a) Definitions.--For purposes of this part--
            ``(1) Affiliated member.--The term `affiliated member' 
        means, in connection with a sponsor--
                    ``(A) a person who is otherwise eligible to be a 
                member of the sponsor but who elects an affiliated 
                status with the sponsor, or
                    ``(B) in the case of a sponsor with members which 
                consist of associations, a person who is a member or 
                employee of any such association and elects an 
                affiliated status with the sponsor.
            ``(2) Applicable authority.--The term `applicable 
        authority' means the Secretary of Labor, except that, in 
        connection with any exercise of the Secretary's authority with 
        respect to which the Secretary is required under section 506(d) 
        to consult with a State, such term means the Secretary, in 
        consultation with such State.
            ``(3) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.
            ``(4) Group health plan.--The term `group health plan' has 
        the meaning provided in section 733(a)(1) (after applying 
        subsection (b) of this section).
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1), except that such term shall not include excepted 
        benefits (as defined in section 733(c)).
            ``(6) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided in section 733(b)(2).
            ``(7) Individual market.--
                    ``(A) In general.--The term `individual market' 
                means the market for health insurance coverage offered 
                to individuals other than in connection with a group 
                health plan.
                    ``(B) Treatment of very small groups.--
                            ``(i) In general.--Subject to clause (ii), 
                        such term includes coverage offered in 
                        connection with a group health plan that has 
                        fewer than 2 participants as current employees 
                        or participants described in section 732(d)(3) 
                        on the first day of the plan year.
                            ``(ii) State exception.--Clause (i) shall 
                        not apply in the case of health insurance 
                        coverage offered in a State if such State 
                        regulates the coverage described in such clause 
                        in the same manner and to the same extent as 
                        coverage in the small group market (as defined 
                        in section 2791(e)(5) of the Public Health 
                        Service Act) is regulated by such State.
            ``(8) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
            ``(9) Participating employer.--The term `participating 
        employer' means, in connection with a small business health 
        plan, any employer, if any individual who is an employee of 
        such employer, a partner in such employer, or a self-employed 
        individual who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or was 
        covered under such plan in connection with the status of such 
        individual as such an employee, partner, or self-employed 
        individual in relation to the plan.
            ``(10) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a plan 
        year, a small employer as defined in section 2791(e)(4).
            ``(11) Trade association and professional association.--The 
        terms `trade association' and `professional association' mean 
        an entity that meets the requirements of section 1.501(c)(6)-1 
        of title 26, Code of Federal Regulations (as in effect on the 
        date of enactment of this Act).
    ``(b) Rule of Construction.--For purposes of determining whether a 
plan, fund, or program is an employee welfare benefit plan which is a 
small business health plan, and for purposes of applying this title in 
connection with such plan, fund, or program so determined to be such an 
employee welfare benefit plan--
            ``(1) in the case of a partnership, the term `employer' (as 
        defined in section 3(5)) includes the partnership in relation 
        to the partners, and the term `employee' (as defined in section 
        3(6)) includes any partner in relation to the partnership; and
            ``(2) in the case of a self-employed individual, the term 
        `employer' (as defined in section 3(5)) and the term `employee' 
        (as defined in section 3(6)) shall include such individual.
    ``(c) Renewal.--Notwithstanding any provision of law to the 
contrary, a participating employer in a small business health plan 
shall not be deemed to be a plan sponsor in applying requirements 
relating to coverage renewal.
    ``(d) Health Savings Accounts.--Nothing in this part shall be 
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation 
of section 223(c)(2) of the Internal Revenue Code of 1986.''.
    (b) Conforming Amendments to Preemption Rules.--
            (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
        amended by adding at the end the following new subparagraph:
    ``(E) The preceding subparagraphs of this paragraph do not apply 
with respect to any State law in the case of a small business health 
plan which is certified under part 8.''.
            (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
                    (A) in subsection (b)(4), by striking ``Subsection 
                (a)'' and inserting ``Subsections (a) and (d)'';
                    (B) in subsection (b)(5), by striking ``subsection 
                (a)'' in subparagraph (A) and inserting ``subsection 
                (a) of this section and subsections (a)(2)(B) and (b) 
                of section 805'', and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) of this 
                section or subsection (a)(2)(B) or (b) of section 
                805'';
                    (C) by redesignating subsection (d) as subsection 
                (e); and
                    (D) by inserting after subsection (c) the following 
                new subsection:
    ``(d)(1) Except as provided in subsection (b)(4), the provisions of 
this title shall supersede any and all State laws insofar as they may 
now or hereafter preclude a health insurance issuer from offering 
health insurance coverage in connection with a small business health 
plan which is certified under part 8.
    ``(2) In any case in which health insurance coverage of any policy 
type is offered under a small business health plan certified under part 
8 to a participating employer operating in such State, the provisions 
of this title shall supersede any and all laws of such State insofar as 
they may establish rating and benefit requirements that would otherwise 
apply to such coverage, provided the requirements of subtitle A of 
title XXIX of the Public Health Service Act (as added by title II of 
the Health Insurance Marketplace Modernization and Affordability Act of 
2007) (concerning health plan rating and benefits) are met.''.
    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new sentence: 
``Such term also includes a person serving as the sponsor of a small 
business health plan under part 8.''.
    (d) Savings Clause.--Section 731(c) of such Act is amended by 
inserting ``or part 8'' after ``this part''.
    (e) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 is amended by inserting 
after the item relating to section 734 the following new items:

         ``Part 8--Rules Governing Small Business Health Plans

``801. Small business health plans.
``802. Alternative market pooling organizations.
``803. Certification of small business health plans.
``804. Requirements relating to sponsors and boards of trustees.
``805. Participation and coverage requirements.
``806. Other requirements relating to plan documents, contribution 
                            rates, and benefit options.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Implementation and application authority by Secretary.
``810. Definitions and rules of construction.''.

SEC. 246. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following new 
subsection:
    ``(d) Consultation With States With Respect to Small Business 
Health Plans.--
            ``(1) Agreements with states.--The Secretary shall consult 
        with the State recognized under paragraph (2) with respect to a 
        small business health plan regarding the exercise of--
                    ``(A) the Secretary's authority under sections 502 
                and 504 to enforce the requirements for certification 
                under part 8; and
                    ``(B) the Secretary's authority to certify small 
                business health plans under part 8 in accordance with 
                regulations of the Secretary applicable to 
                certification under part 8.
            ``(2) Recognition of domicile state.--In carrying out 
        paragraph (1), the Secretary shall ensure that only one State 
        will be recognized, with respect to any particular small 
        business health plan, as the State with which consultation is 
        required. In carrying out this paragraph such State shall be 
        the domicile State, as defined in section 805(c).''.

SEC. 247. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by this subtitle shall 
take effect 12 months after the date of the enactment of this Act. The 
Secretary of Labor shall first issue all regulations necessary to carry 
out the amendments made by this subtitle within 6 months after the date 
of the enactment of this Act.
    (b) Treatment of Certain Existing Health Benefits Programs.--
            (1) In general.--In any case in which, as of the date of 
        the enactment of this Act, an arrangement is maintained in a 
        State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 808(a)(2) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this subtitle)) by the arrangement of an application 
        for certification of the arrangement under part 8 of subtitle B 
        of title I of such Act--
                    (A) such arrangement shall be deemed to be a group 
                health plan for purposes of title I of such Act;
                    (B) the requirements of sections 801(a) and 803(a) 
                of the Employee Retirement Income Security Act of 1974 
                shall be deemed met with respect to such arrangement;
                    (C) the requirements of section 803(b) of such Act 
                shall be deemed met, if the arrangement is operated by 
                a board of trustees which has control over the 
                arrangement;
                    (D) the requirements of section 804(a) of such Act 
                shall be deemed met with respect to such arrangement; 
                and
                    (E) the arrangement may be certified by any 
                applicable authority with respect to its operations in 
                any State only if it operates in such State on the date 
                of certification.
        The provisions of this subsection shall cease to apply with 
        respect to any such arrangement at such time after the date of 
        the enactment of this Act as the applicable requirements of 
        this subsection are not met with respect to such arrangement or 
        at such time that the arrangement provides coverage to 
        participants and beneficiaries in any State other than the 
        States in which coverage is provided on such date of enactment.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 808 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``small business health plan'' shall be deemed a 
        reference to an arrangement referred to in this subsection.

                         PART II--MARKET RELIEF

SEC. 251. MARKET RELIEF.

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

     ``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

``SEC. 2901. GENERAL INSURANCE DEFINITIONS.

    ``In this title, the terms `health insurance coverage', `health 
insurance issuer', `group health plan', and `individual health 
insurance' shall have the meanings given such terms in section 2791.

``SEC. 2902. IMPLEMENTATION AND APPLICATION AUTHORITY BY SECRETARY.

    ``The Secretary shall, through promulgation and implementation of 
such regulations as the Secretary may reasonably determine necessary or 
appropriate, and in consultation with a balanced spectrum of effected 
entities and persons, modify the implementation and application of this 
title to accommodate with minimum disruption such changes to State or 
Federal law provided in this title and the Ten Steps to Transform 
Health Care in America Act (and the amendments made by such Act) or in 
regulations issued thereto.

                      ``Subtitle A--Market Relief

                     ``PART I--RATING REQUIREMENTS

``SEC. 2911. DEFINITIONS.

    ``In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that, with respect to the small group market, has enacted 
        small group rating rules that meet the minimum standards set 
        forth in section 2912(a)(1) or, as applicable, transitional 
        small group rating rules set forth in section 2912(b).
            ``(2) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the insurance 
        laws of such State.
            ``(3) Base premium rate.--The term `base premium rate' 
        means, for each class of business with respect to a rating 
        period, the lowest premium rate charged or that could have been 
        charged under a rating system for that class of business by the 
        small employer carrier to small employers with similar case 
        characteristics for health benefit plans with the same or 
        similar coverage
            ``(4) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a State and 
        that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or, as applicable, 
                transitional small group rating rules in a State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer small group health insurance coverage in that 
                State consistent with the Model Small Group Rating 
                Rules, and provides with such notice a copy of any 
                insurance policy that it intends to offer in the State, 
                its most recent annual and quarterly financial reports, 
                and any other information required to be filed with the 
                insurance department of the State (or other State 
                agency); and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the Model Small Group Rating Rules and an 
                affirmation that such Rules are included in the terms 
                of such contract.
            ``(5) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the small 
        group health insurance market, except that such term shall not 
        include excepted benefits (as defined in section 2791(c)).
            ``(6) Index rate.--The term `index rate' means for each 
        class of business with respect to the rating period for small 
        employers with similar case characteristics, the arithmetic 
        average of the applicable base premium rate and the 
        corresponding highest premium rate.
            ``(7)  Model small group rating rules.--The term ` Model 
        Small Group Rating Rules' means the rules set forth in section 
        2912(a)(2).
            ``(8) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(9) Small group insurance market.--The term `small group 
        insurance market' shall have the meaning given the term `small 
        group market' in section 2791(e)(5).
            ``(10) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.
            ``(11) Variation limits.--
                    ``(A) Composite variation limit.--
                            ``(i) In general.--The term `composite 
                        variation limit' means the total variation in 
                        premium rates charged by a health insurance 
                        issuer in the small group market as permitted 
                        under applicable State law based on the 
                        following factors or case characteristics:
                                    ``(I) Age.
                                    ``(II) Duration of coverage.
                                    ``(III) Claims experience.
                                    ``(IV) Health status.
                            ``(ii) Use of factors.--With respect to the 
                        use of the factors described in clause (i) in 
                        setting premium rates, a health insurance 
                        issuer shall use one or both of the factors 
                        described in subclauses (I) or (IV) of such 
                        clause and may use the factors described in 
                        subclauses (II) or (III) of such clause.
                    ``(B) Total variation limit.--The term `total 
                variation limit' means the total variation in premium 
                rates charged by a health insurance issuer in the small 
                group market as permitted under applicable State law 
                based on all factors and case characteristics (as 
                described in section 2912(a)(1)).

``SEC. 2912. RATING RULES.

    ``(a) Establishment of Minimum Standards for Premium Variations and 
Model Small Group Rating Rules.--Not later than 6 months after the date 
of enactment of this title, the Secretary shall promulgate regulations 
establishing the following Minimum Standards and Model Small Group 
Rating Rules:
            ``(1) Minimum standards for premium variations.--
                    ``(A) Composite variation limit.--The composite 
                variation limit shall not be less than 3:1.
                    ``(B) Total variation limit.--The total variation 
                limit shall not be less than 5:1.
                    ``(C) Prohibition on use of certain case 
                characteristics.--For purposes of this paragraph, in 
                calculating the total variation limit, the State shall 
                not use case characteristics other than those used in 
                calculating the composite variation limit and industry, 
                geographic area, group size, participation rate, class 
                of business, and participation in wellness programs.
            ``(2) Model small group rating rules.--The following apply 
        to an eligible insurer in a non-adopting State:
                    ``(A) Premium rates.--Premium rates for small group 
                health benefit plans to which this title applies shall 
                comply with the following provisions relating to 
                premiums, except as provided for under subsection (b):
                            ``(i) Variation in premium rates.--The plan 
                        may not vary premium rates by more than the 
                        minimum standards provided for under paragraph 
                        (1).
                            ``(ii) Index rate.--The index rate for a 
                        rating period for any class of business shall 
                        not exceed the index rate for any other class 
                        of business by more than 20 percent, excluding 
                        those classes of business related to 
                        association groups under this title.
                            ``(iii) Class of businesses.--With respect 
                        to a class of business, the premium rates 
                        charged during a rating period to small 
                        employers with similar case characteristics for 
                        the same or similar coverage or the rates that 
                        could be charged to such employers under the 
                        rating system for that class of business, shall 
                        not vary from the index rate by more than 25 
                        percent of the index rate under clause (ii).
                            ``(iv) Increases for new rating periods.--
                        The percentage increase in the premium rate 
                        charged to a small employer for a new rating 
                        period may not exceed the sum of the following:
                                    ``(I) The percentage change in the 
                                new business premium rate measured from 
                                the first day of the prior rating 
                                period to the first day of the new 
                                rating period. In the case of a health 
                                benefit plan into which the small 
                                employer carrier is no longer enrolling 
                                new small employers, the small employer 
                                carrier shall use the percentage change 
                                in the base premium rate, except that 
                                such change shall not exceed, on a 
                                percentage basis, the change in the new 
                                business premium rate for the most 
                                similar health benefit plan into which 
                                the small employer carrier is actively 
                                enrolling new small employers.
                                    ``(II) Any adjustment, not to 
                                exceed 15 percent annually and adjusted 
                                pro rata for rating periods of less 
                                then 1 year, due to the claim 
                                experience, health status or duration 
                                of coverage of the employees or 
                                dependents of the small employer as 
                                determined from the small employer 
                                carrier's rate manual for the class of 
                                business involved.
                                    ``(III) Any adjustment due to 
                                change in coverage or change in the 
                                case characteristics of the small 
                                employer as determined from the small 
                                employer carrier's rate manual for the 
                                class of business.
                            ``(v) Uniform application of adjustments.--
                        Adjustments in premium rates for claim 
                        experience, health status, or duration of 
                        coverage shall not be charged to individual 
                        employees or dependents. Any such adjustment 
                        shall be applied uniformly to the rates charged 
                        for all employees and dependents of the small 
                        employer.
                            ``(vi) Prohibition on use of certain case 
                        characteristic.--A small employer carrier shall 
                        not utilize case characteristics, other than 
                        those permitted under paragraph (1)(C), without 
                        the prior approval of the applicable State 
                        authority.
                            ``(vii) Consistent application of 
                        factors.--Small employer carriers shall apply 
                        rating factors, including case characteristics, 
                        consistently with respect to all small 
                        employers in a class of business. Rating 
                        factors shall produce premiums for identical 
                        groups which differ only by the amounts 
                        attributable to plan design and do not reflect 
                        differences due to the nature of the groups 
                        assumed to select particular health benefit 
                        plans.
                            ``(viii) Treatment of plans as having same 
                        rating period.--A small employer carrier shall 
                        treat all health benefit plans issued or 
                        renewed in the same calendar month as having 
                        the same rating period.
                            ``(ix) Require compliance.--Premium rates 
                        for small business health benefit plans shall 
                        comply with the requirements of this subsection 
                        notwithstanding any assessments paid or payable 
                        by a small employer carrier as required by a 
                        State's small employer carrier reinsurance 
                        program.
                    ``(B) Establishment of separate class of 
                business.--Subject to subparagraph (C), a small 
                employer carrier may establish a separate class of 
                business only to reflect substantial differences in 
                expected claims experience or administrative costs 
                related to the following:
                            ``(i) The small employer carrier uses more 
                        than one type of system for the marketing and 
                        sale of health benefit plans to small 
                        employers.
                            ``(ii) The small employer carrier has 
                        acquired a class of business from another small 
                        employer carrier.
                            ``(iii) The small employer carrier provides 
                        coverage to one or more association groups that 
                        meet the requirements of this title.
                    ``(C) Limitation.--A small employer carrier may 
                establish up to 9 separate classes of business under 
                subparagraph (B), excluding those classes of business 
                related to association groups under this title.
                    ``(D) Limitation on transfers.--A small employer 
                carrier shall not transfer a small employer 
                involuntarily into or out of a class of business. A 
                small employer carrier shall not offer to transfer a 
                small employer into or out of a class of business 
                unless such offer is made to transfer all small 
                employers in the class of business without regard to 
                case characteristics, claim experience, health status 
                or duration of coverage since issue.
    ``(b) Transitional Model Small Group Rating Rules.--
            ``(1) In general.--Not later than 6 months after the date 
        of enactment of this title and to the extent necessary to 
        provide for a graduated transition to the minimum standards for 
        premium variation as provided for in subsection (a)(1), the 
        Secretary, in consultation with the National Association of 
        Insurance Commissioners (NAIC), shall promulgate State-specific 
        transitional small group rating rules in accordance with this 
        subsection, which shall be applicable with respect to non-
        adopting States and eligible insurers operating in such States 
        for a period of not to exceed 3 years from the date of the 
        promulgation of the minimum standards for premium variation 
        pursuant to subsection (a).
            ``(2) Compliance with transitional model small group rating 
        rules.--During the transition period described in paragraph 
        (1), a State that, on the date of enactment of this title, has 
        in effect a small group rating rules methodology that allows 
        for a variation that is less than the variation provided for 
        under subsection (a)(1) (concerning minimum standards for 
        premium variation), shall be deemed to be an adopting State if 
        the State complies with the transitional small group rating 
        rules as promulgated by the Secretary pursuant to paragraph 
        (1).
            ``(3) Transitioning of old business.--
                    ``(A) In general.--In developing the transitional 
                small group rating rules under paragraph (1), the 
                Secretary shall, after consultation with the National 
                Association of Insurance Commissioners and 
                representatives of insurers operating in the small 
                group health insurance market in non-adopting States, 
                promulgate special transition standards with respect to 
                independent rating classes for old and new business, to 
                the extent reasonably necessary to protect health 
                insurance consumers and to ensure a stable and fair 
                transition for old and new market entrants.
                    ``(B) Period for operation of independent rating 
                classes.--In developing the special transition 
                standards pursuant to subparagraph (A), the Secretary 
                shall permit a carrier in a non-adopting State, at its 
                option, to maintain independent rating classes for old 
                and new business for a period of up to 5 years, with 
                the commencement of such 5-year period to begin at such 
                time, but not later than the date that is 3 years after 
                the date of enactment of this title, as the carrier 
                offers a book of business meeting the minimum standards 
                for premium variation provided for in subsection (a)(1) 
                or the transitional small group rating rules under 
                paragraph (1).
            ``(4) Other transitional authority.--In developing the 
        transitional small group rating rules under paragraph (1), the 
        Secretary shall provide for the application of the transitional 
        small group rating rules in transition States as the Secretary 
        may determine necessary for a an effective transition.
    ``(c) Market Re-Entry.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a health insurance issuer that has voluntarily withdrawn 
        from providing coverage in the small group market prior to the 
        date of enactment of the Health Insurance Marketplace 
        Modernization and Affordability Act of 2007 shall not be 
        excluded from re-entering such market on a date that is more 
        than 180 days after such date of enactment.
            ``(2) Termination.--The provision of this subsection shall 
        terminate on the date that is 24 months after the date of 
        enactment of the Health Insurance Marketplace Modernization and 
        Affordability Act of 2007.

``SEC. 2913. APPLICATION AND PREEMPTION.

    ``(a) Superseding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws of a non-adopting State insofar as such State laws 
        (whether enacted prior to or after the date of enactment of 
        this subtitle) relate to rating in the small group insurance 
        market as applied to an eligible insurer, or small group health 
        insurance coverage issued by an eligible insurer, including 
        with respect to coverage issued to a small employer through a 
        small business health plan, in a State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State insofar as such State 
        laws (whether enacted prior to or after the date of enactment 
        of this subtitle)--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing small group health insurance 
                coverage consistent with the Model Small Group Rating 
                Rules or transitional model small group rating rules; 
                or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing small group 
                health insurance coverage consistent with the Model 
                Small Group Rating Rules or transitional model small 
                group rating rules.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting states.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers that offer small group health insurance 
        coverage in a nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law in a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Model Small Group Rating Rules or 
        transitional model small group rating rules.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974.
            ``(5) Preemption limited to rating.--Subsection (a) shall 
        not preempt any State law that does not have a reference to or 
        a connection with State rating rules that would otherwise apply 
        to eligible insurers.
    ``(c) Effective Date.--This section shall apply, at the election of 
the eligible insurer, beginning in the first plan year or the first 
calendar year following the issuance of the final rules by the 
Secretary under the Model Small Group Rating Rules or, as applicable, 
the Transitional Model Small Group Rating Rules, but in no event 
earlier than the date that is 12 months after the date of enactment of 
this title.

``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2913.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2915. ONGOING REVIEW.

    ``Not later than 5 years after the date on which the Model Small 
Group Rating Rules are issued under this part, and every 5 years 
thereafter, the Secretary, in consultation with the National 
Association of Insurance Commissioners, shall prepare and submit to the 
appropriate committees of Congress a report that assesses the effect of 
the Model Small Group Rating Rules on access, cost, and market 
functioning in the small group market. Such report may, if the 
Secretary, in consultation with the National Association of Insurance 
Commissioners, determines such is appropriate for improving access, 
costs, and market functioning, contain legislative proposals for 
recommended modification to such Model Small Group Rating Rules.

                      ``PART II--AFFORDABLE PLANS

``SEC. 2921. DEFINITIONS.

    ``In this part:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that has enacted a law providing that small group, 
        individual, and large group health insurers in such State may 
        offer and sell products in accordance with the List of Required 
        Benefits and the Terms of Application as provided for in 
        section 2922(b)
            ``(2) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a nonadopting 
        State and that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the List of 
                Required Benefits and Terms of Application in a 
                nonadopting State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other applicable State agency), 
                not later than 30 days prior to the offering of 
                coverage described in this subparagraph, that the 
                issuer intends to offer health insurance coverage in 
                that State consistent with the List of Required 
                Benefits and Terms of Application, and provides with 
                such notice a copy of any insurance policy that it 
                intends to offer in the State, its most recent annual 
                and quarterly financial reports, and any other 
                information required to be filed with the insurance 
                department of the State (or other State agency) by the 
                Secretary in regulations; and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such group 
                health coverage) and filed with the State pursuant to 
                subparagraph (B), a description in the insurer's 
                contract of the List of Required Benefits and a 
                description of the Terms of Application, including a 
                description of the benefits to be provided, and that 
                adherence to such standards is included as a term of 
                such contract.
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the small 
        group, individual, or large group health insurance markets, 
        including with respect to small business health plans, except 
        that such term shall not include excepted benefits (as defined 
        in section 2791(c)).
            ``(4) List of required benefits.--The term `List of 
        Required Benefits' means the List issued under section 2922(a).
            ``(5) Nonadopting state.--The term `nonadopting State' 
        means a State that is not an adopting State.
            ``(6) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.
            ``(7) State provider freedom of choice law.--The term 
        `State Provider Freedom of Choice Law' means a State law 
        requiring that a health insurance issuer, with respect to 
        health insurance coverage, not discriminate with respect to 
        participation, reimbursement, or indemnification as to any 
        provider who is acting within the scope of the provider's 
        license or certification under applicable State law.
            ``(8) Terms of application.--The term `Terms of 
        Application' means terms provided under section 2922(a).

``SEC. 2922. OFFERING AFFORDABLE PLANS.

    ``(a) List of Required Benefits.--Not later than 3 months after the 
date of enactment of this title, the Secretary, in consultation with 
the National Association of Insurance Commissioners, shall issue by 
interim final rule a list (to be known as the `List of Required 
Benefits') of covered benefits, services, or categories of providers 
that are required to be provided by health insurance issuers, in each 
of the small group, individual, and large group markets, in at least 26 
States as a result of the application of State covered benefit, 
service, and category of provider mandate laws. With respect to plans 
sold to or through small business health plans, the List of Required 
Benefits applicable to the small group market shall apply.
    ``(b) Terms of Application.--
            ``(1) State with mandates.--With respect to a State that 
        has a covered benefit, service, or category of provider mandate 
        in effect that is covered under the List of Required Benefits 
        under subsection (a), such State mandate shall, subject to 
        paragraph (3) (concerning uniform application), apply to a 
        coverage plan or plan in, as applicable, the small group, 
        individual, or large group market or through a small business 
        health plan in such State.
            ``(2) States without mandates.--With respect to a State 
        that does not have a covered benefit, service, or category of 
        provider mandate in effect that is covered under the List of 
        Required Benefits under subsection (a), such mandate shall not 
        apply, as applicable, to a coverage plan or plan in the small 
        group, individual, or large group market or through a small 
        business health plan in such State.
            ``(3) Uniform application of laws.--
                    ``(A) In general.--With respect to a State 
                described in paragraph (1), in applying a covered 
                benefit, service, or category of provider mandate that 
                is on the List of Required Benefits under subsection 
                (a) the State shall permit a coverage plan or plan 
                offered in the small group, individual, or large group 
                market or through a small business health plan in such 
                State to apply such benefit, service, or category of 
                provider coverage in a manner consistent with the 
                manner in which such coverage is applied under one of 
                the three most heavily subscribed national health plans 
                offered under the Federal Employee Health Benefits 
                Program under chapter 89 of title 5, United States Code 
                (as determined by the Secretary in consultation with 
                the Director of the Office of Personnel Management), 
                and consistent with the Publication of Benefit 
                Applications under subsection (c). In the event a 
                covered benefit, service, or category of provider 
                appearing in the List of Required Benefits is not 
                offered in one of the three most heavily subscribed 
                national health plans offered under the Federal 
                Employees Health Benefits Program, such covered 
                benefit, service, or category of provider requirement 
                shall be applied in a manner consistent with the manner 
                in which such coverage is offered in the remaining most 
                heavily subscribed plan of the remaining Federal 
                Employees Health Benefits Program plans, as determined 
                by the Secretary, in consultation with the Director of 
                the Office of Personnel Management.
                    ``(B) Exception regarding state provider freedom of 
                choice laws.--Notwithstanding subparagraph (A), in the 
                event a category of provider mandate is included in the 
                List of Covered Benefits, any State Provider Freedom of 
                Choice Law (as defined in section 2921(7)) that is in 
                effect in any State in which such category of provider 
                mandate is in effect shall not be preempted, with 
                respect to that category of provider, by this part.
    ``(c) Publication of Benefit Applications.--Not later than 3 months 
after the date of enactment of this title, and on the first day of 
every calendar year thereafter, the Secretary, in consultation with the 
Director of the Office of Personnel Management, shall publish in the 
Federal Register a description of such covered benefits, services, and 
categories of providers covered in that calendar year by each of the 
three most heavily subscribed nationally available Federal Employee 
Health Benefits Plan options which are also included on the List of 
Required Benefits.
    ``(d) Effective Dates.--
            ``(1) Small business health plans.--With respect to health 
        insurance provided to participating employers of small business 
        health plans, the requirements of this part (concerning lower 
        cost plans) shall apply beginning on the date that is 12 months 
        after the date of enactment of this title.
            ``(2) Non-association coverage.--With respect to health 
        insurance provided to groups or individuals other than 
        participating employers of small business health plans, the 
        requirements of this part shall apply beginning on the date 
        that is 15 months after the date of enactment of this title.
    ``(e) Updating of List of Required Benefits.--Not later than 2 
years after the date on which the list of required benefits is issued 
under subsection (a), and every 2 years thereafter, the Secretary, in 
consultation with the National Association of Insurance Commissioners, 
shall update the list based on changes in the laws and regulations of 
the States. The Secretary shall issue the updated list by regulation, 
and such updated list shall be effective upon the first plan year 
following the issuance of such regulation.

``SEC. 2923. APPLICATION AND PREEMPTION.

    ``(a) Superceding of State Law.--
            ``(1) In general.--This part shall supersede any and all 
        State laws insofar as such laws relate to mandates relating to 
        covered benefits, services, or categories of provider in the 
        health insurance market as applied to an eligible insurer, or 
        health insurance coverage issued by an eligible insurer, 
        including with respect to coverage issued to a small business 
        health plan, in a nonadopting State.
            ``(2) Nonadopting states.--This part shall supersede any 
        and all State laws of a nonadopting State (whether enacted 
        prior to or after the date of enactment of this title) insofar 
        as such laws--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing health insurance coverage 
                consistent with the Benefit Choice Standards, as 
                provided for in section 2922(a); or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing health 
                insurance coverage consistent with the Benefit Choice 
                Standards.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers who offer health insurance coverage in a 
        nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law of a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the Benefit Choice Standards.
            ``(4) No effect on preemption.--In no case shall this part 
        be construed to limit or affect in any manner the preemptive 
        scope of sections 502 and 514 of the Employee Retirement Income 
        Security Act of 1974. In no case shall this part be construed 
        to create any cause of action under Federal or State law or 
        enlarge or affect any remedy available under the Employee 
        Retirement Income Security Act of 1974.
            ``(5) Preemption limited to benefits.--Subsection (a) shall 
        not preempt any State law that does not have a reference to or 
        a connection with State mandates regarding covered benefits, 
        services, or categories of providers that would otherwise apply 
        to eligible insurers.

``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The courts of the United States shall have 
exclusive jurisdiction over civil actions involving the interpretation 
of this part.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2923.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2925. RULES OF CONSTRUCTION.

    ``(a) In General.--Notwithstanding any other provision of Federal 
or State law, a health insurance issuer in an adopting State or an 
eligible insurer in a non-adopting State may amend its existing 
policies to be consistent with the terms of this subtitle (concerning 
rating and benefits).
    ``(b) Health Savings Accounts.--Nothing in this subtitle shall be 
construed to create any mandates for coverage of benefits for HSA-
qualified health plans that would require reimbursements in violation 
of section 223(c)(2) of the Internal Revenue Code of 1986.''.

         PART III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

SEC. 261. HEALTH INSURANCE STANDARDS HARMONIZATION.

    Title XXIX of the Public Health Service Act (as added by section 
201) is amended by adding at the end the following:

                 ``Subtitle B--Standards Harmonization

``SEC. 2931. DEFINITIONS.

    ``In this subtitle:
            ``(1) Adopting state.--The term `adopting State' means a 
        State that has enacted the harmonized standards adopted under 
        this subtitle in their entirety and as the exclusive laws of 
        the State that relate to the harmonized standards.
            ``(2) Eligible insurer.--The term `eligible insurer' means 
        a health insurance issuer that is licensed in a nonadopting 
        State and that--
                    ``(A) notifies the Secretary, not later than 30 
                days prior to the offering of coverage described in 
                this subparagraph, that the issuer intends to offer 
                health insurance coverage consistent with the 
                harmonized standards in a nonadopting State;
                    ``(B) notifies the insurance department of a 
                nonadopting State (or other State agency), not later 
                than 30 days prior to the offering of coverage 
                described in this subparagraph, that the issuer intends 
                to offer health insurance coverage in that State 
                consistent with the harmonized standards published 
                pursuant to section 2933(d), and provides with such 
                notice a copy of any insurance policy that it intends 
                to offer in the State, its most recent annual and 
                quarterly financial reports, and any other information 
                required to be filed with the insurance department of 
                the State (or other State agency) by the Secretary in 
                regulations; and
                    ``(C) includes in the terms of the health insurance 
                coverage offered in nonadopting States (including in 
                the terms of any individual certificates that may be 
                offered to individuals in connection with such health 
                coverage) and filed with the State pursuant to 
                subparagraph (B), a description of the harmonized 
                standards published pursuant to section 2933(g)(2) and 
                an affirmation that such standards are a term of the 
                contract.
            ``(3) Harmonized standards.--The term `harmonized 
        standards' means the standards certified by the Secretary under 
        section 2933(d).
            ``(4) Health insurance coverage.--The term `health 
        insurance coverage' means any coverage issued in the health 
        insurance market, except that such term shall not include 
        excepted benefits (as defined in section 2791(c).
            ``(5) Nonadopting state.--The term `nonadopting State' 
        means a State that fails to enact, within 18 months of the date 
        on which the Secretary certifies the harmonized standards under 
        this subtitle, the harmonized standards in their entirety and 
        as the exclusive laws of the State that relate to the 
        harmonized standards.
            ``(6) State law.--The term `State law' means all laws, 
        decisions, rules, regulations, or other State actions 
        (including actions by a State agency) having the effect of law, 
        of any State.

``SEC. 2932. HARMONIZED STANDARDS.

    ``(a) Board.--
            ``(1) Establishment.--Not later than 3 months after the 
        date of enactment of this title, the Secretary, in consultation 
        with the NAIC, shall establish the Health Insurance Consensus 
        Standards Board (referred to in this subtitle as the `Board') 
        to develop recommendations that harmonize inconsistent State 
        health insurance laws in accordance with the procedures 
        described in subsection (b).
            ``(2) Composition.--
                    ``(A) In general.--The Board shall be composed of 
                the following voting members to be appointed by the 
                Secretary after considering the recommendations of 
                professional organizations representing the entities 
                and constituencies described in this paragraph:
                            ``(i) Four State insurance commissioners as 
                        recommended by the National Association of 
                        Insurance Commissioners, of which 2 shall be 
                        Democrats and 2 shall be Republicans, and of 
                        which one shall be designated as the 
                        chairperson and one shall be designated as the 
                        vice chairperson.
                            ``(ii) Four representatives of State 
                        government, two of which shall be governors of 
                        States and two of which shall be State 
                        legislators, and two of which shall be 
                        Democrats and two of which shall be 
                        Republicans.
                            ``(iii) Four representatives of health 
                        insurers, of which one shall represent insurers 
                        that offer coverage in the small group market, 
                        one shall represent insurers that offer 
                        coverage in the large group market, one shall 
                        represent insurers that offer coverage in the 
                        individual market, and one shall represent 
                        carriers operating in a regional market.
                            ``(iv) Two representatives of insurance 
                        agents and brokers.
                            ``(v) Two independent representatives of 
                        the American Academy of Actuaries who have 
                        familiarity with the actuarial methods 
                        applicable to health insurance.
                    ``(B) Ex officio member.--A representative of the 
                Secretary shall serve as an ex officio member of the 
                Board.
            ``(3) Advisory panel.--The Secretary shall establish an 
        advisory panel to provide advice to the Board, and shall 
        appoint its members after considering the recommendations of 
        professional organizations representing the entities and 
        constituencies identified in this paragraph:
                    ``(A) Two representatives of small business health 
                plans.
                    ``(B) Two representatives of employers, of which 
                one shall represent small employers and one shall 
                represent large employers.
                    ``(C) Two representatives of consumer 
                organizations.
                    ``(D) Two representatives of health care providers.
            ``(4) Qualifications.--The membership of the Board shall 
        include individuals with national recognition for their 
        expertise in health finance and economics, actuarial science, 
        health plans, providers of health services, and other related 
        fields, who provide a mix of different professionals, broad 
        geographic representation, and a balance between urban and 
        rural representatives.
            ``(5) Ethical disclosure.--The Secretary shall establish a 
        system for public disclosure by members of the Board of 
        financial and other potential conflicts of interest relating to 
        such members. Members of the Board shall be treated as 
        employees of Congress for purposes of applying title I of the 
        Ethics in Government Act of 1978 (Public Law 95-521).
            ``(6) Director and staff.--Subject to such review as the 
        Secretary deems necessary to assure the efficient 
        administration of the Board, the chair and vice-chair of the 
        Board may--
                    ``(A) employ and fix the compensation of an 
                Executive Director (subject to the approval of the 
                Comptroller General) and such other personnel as may be 
                necessary to carry out its duties (without regard to 
                the provisions of title 5, United States Code, 
                governing appointments in the competitive service);
                    ``(B) seek such assistance and support as may be 
                required in the performance of its duties from 
                appropriate Federal departments and agencies;
                    ``(C) enter into contracts or make other 
                arrangements, as may be necessary for the conduct of 
                the work of the Board (without regard to section 3709 
                of the Revised Statutes (41 U.S.C. 5));
                    ``(D) make advance, progress, and other payments 
                which relate to the work of the Board;
                    ``(E) provide transportation and subsistence for 
                persons serving without compensation; and
                    ``(F) prescribe such rules as it deems necessary 
                with respect to the internal organization and operation 
                of the Board.
            ``(7) Terms.--The members of the Board shall serve for the 
        duration of the Board. Vacancies in the Board shall be filled 
        as needed in a manner consistent with the composition described 
        in paragraph (2).
    ``(b) Development of Harmonized Standards.--
            ``(1) In general.--In accordance with the process described 
        in subsection (c), the Board shall identify and recommend 
        nationally harmonized standards for each of the following 
        process categories:
                    ``(A) Form filing and rate filing.--Form and rate 
                filing standards shall be established which promote 
                speed to market and include the following defined areas 
                for States that require such filings:
                            ``(i) Procedures for form and rate filing 
                        pursuant to a streamlined administrative filing 
                        process.
                            ``(ii) Timeframes for filings to be 
                        reviewed by a State if review is required 
                        before they are deemed approved.
                            ``(iii) Timeframes for an eligible insurer 
                        to respond to State requests following its 
                        review.
                            ``(iv) A process for an eligible insurer to 
                        self-certify.
                            ``(v) State development of form and rate 
                        filing templates that include only non-
                        preempted State law and Federal law 
                        requirements for eligible insurers with timely 
                        updates.
                            ``(vi) Procedures for the resubmission of 
                        forms and rates.
                            ``(vii) Disapproval rationale of a form or 
                        rate filing based on material omissions or 
                        violations of non-preempted State law or 
                        Federal law with violations cited and 
                        explained.
                            ``(viii) For States that may require a 
                        hearing, a rationale for hearings based on 
                        violations of non-preempted State law or 
                        insurer requests.
                    ``(B) Market conduct review.--Market conduct review 
                standards shall be developed which provide for the 
                following:
                            ``(i) Mandatory participation in national 
                        databases.
                            ``(ii) The confidentiality of examination 
                        materials.
                            ``(iii) The identification of the State 
                        agency with primary responsibility for 
                        examinations.
                            ``(iv) Consultation and verification of 
                        complaint data with the eligible insurer prior 
                        to State actions.
                            ``(v) Consistency of reporting requirements 
                        with the recordkeeping and administrative 
                        practices of the eligible insurer.
                            ``(vi) Examinations that seek to correct 
                        material errors and harmful business practices 
                        rather than infrequent errors.
                            ``(vii) Transparency and publishing of the 
                        State's examination standards.
                            ``(viii) Coordination of market conduct 
                        analysis.
                            ``(ix) Coordination and nonduplication 
                        between State examinations of the same eligible 
                        insurer.
                            ``(x) Rationale and protocols to be met 
                        before a full examination is conducted.
                            ``(xi) Requirements on examiners prior to 
                        beginning examinations such as budget planning 
                        and work plans.
                            ``(xii) Consideration of methods to limit 
                        examiners' fees such as caps, competitive 
                        bidding, or other alternatives.
                            ``(xiii) Reasonable fines and penalties for 
                        material errors and harmful business practices.
                    ``(C) Prompt payment of claims.--The Board shall 
                establish prompt payment standards for eligible 
                insurers based on standards similar to those applicable 
                to the Social Security Act as set forth in section 
                1842(c)(2) of such Act (42 U.S.C. 1395u(c)(2)). Such 
                prompt payment standards shall be consistent with the 
                timing and notice requirements of the claims procedure 
                rules to be specified under subparagraph (D), and shall 
                include appropriate exceptions such as for fraud, 
                nonpayment of premiums, or late submission of claims.
                    ``(D) Internal review.--The Board shall establish 
                standards for claims procedures for eligible insurers 
                that are consistent with the requirements relating to 
                initial claims for benefits and appeals of claims for 
                benefits under the Employee Retirement Income Security 
                Act of 1974 as set forth in section 503 of such Act (29 
                U.S.C. 1133) and the regulations thereunder.
            ``(2) Recommendations.--The Board shall recommend 
        harmonized standards for each element of the categories 
        described in subparagraph (A) through (D) of paragraph (1) 
        within each such market. Notwithstanding the previous sentence, 
        the Board shall not recommend any harmonized standards that 
        disrupt, expand, or duplicate the benefit, service, or provider 
        mandate standards provided in the Benefit Choice Standards 
        pursuant to section 2922(a).
    ``(c) Process for Identifying Harmonized Standards.--
            ``(1) In general.--The Board shall develop recommendations 
        to harmonize inconsistent State insurance laws with respect to 
        each of the process categories described in subparagraphs (A) 
        through (D) of subsection (b)(1).
            ``(2) Requirements.--In adopting standards under this 
        section, the Board shall consider the following:
                    ``(A) Any model acts or regulations of the National 
                Association of Insurance Commissioners in each of the 
                process categories described in subparagraphs (A) 
                through (D) of subsection (b)(1).
                    ``(B) Substantially similar standards followed by a 
                plurality of States, as reflected in existing State 
                laws, relating to the specific process categories 
                described in subparagraphs (A) through (D) of 
                subsection (b)(1).
                    ``(C) Any Federal law requirement related to 
                specific process categories described in subparagraphs 
                (A) through (D) of subsection (b)(1).
                    ``(D) In the case of the adoption of any standard 
                that differs substantially from those referred to in 
                subparagraphs (A), (B), or (C), the Board shall provide 
                evidence to the Secretary that such standard is 
                necessary to protect health insurance consumers or 
                promote speed to market or administrative efficiency.
                    ``(E) The criteria specified in clauses (i) through 
                (iii) of subsection (d)(2)(B).
    ``(d) Recommendations and Certification by Secretary.--
            ``(1) Recommendations.--Not later than 18 months after the 
        date on which all members of the Board are selected under 
        subsection (a), the Board shall recommend to the Secretary the 
        certification of the harmonized standards identified pursuant 
        to subsection (c).
            ``(2) Certification.--
                    ``(A) In general.--Not later than 120 days after 
                receipt of the Board's recommendations under paragraph 
                (1), the Secretary shall certify the recommended 
                harmonized standards as provided for in subparagraph 
                (B), and issue such standards in the form of an interim 
                final regulation.
                    ``(B) Certification process.--The Secretary shall 
                establish a process for certifying the recommended 
                harmonized standard, by category, as recommended by the 
                Board under this section. Such process shall--
                            ``(i) ensure that the certified standards 
                        for a particular process area achieve 
                        regulatory harmonization with respect to health 
                        plans on a national basis;
                            ``(ii) ensure that the approved standards 
                        are the minimum necessary, with regard to 
                        substance and quantity of requirements, to 
                        protect health insurance consumers and maintain 
                        a competitive regulatory environment; and
                            ``(iii) ensure that the approved standards 
                        will not limit the range of group health plan 
                        designs and insurance products, such as 
                        catastrophic coverage only plans, health 
                        savings accounts, and health maintenance 
                        organizations, that might otherwise be 
                        available to consumers.
            ``(3) Application and effective date.--The standards 
        certified by the Secretary under paragraph (2) shall apply and 
        become effective on the date that is 18 months after the date 
        on which the Secretary certifies the harmonized standards.
    ``(e) Termination.--The Board shall terminate and be dissolved 
after making the recommendations to the Secretary pursuant to 
subsection (d)(1).
    ``(f) Ongoing Review.--Not earlier than 3 years after the 
termination of the Board under subsection (e), and not earlier than 
every 3 years thereafter, the Secretary, in consultation with the 
National Association of Insurance Commissioners and the entities and 
constituencies represented on the Board and the Advisory Panel, shall 
prepare and submit to the appropriate committees of Congress a report 
that assesses the effect of the harmonized standards applied under this 
section on access, cost, and health insurance market functioning. The 
Secretary may, based on such report and applying the process 
established for certification under subsection (d)(2)(B), in 
consultation with the National Association of Insurance Commissioners 
and the entities and constituencies represented on the Board and the 
Advisory Panel, update the harmonized standards through notice and 
comment rulemaking.
    ``(g) Publication.--
            ``(1) Listing.--The Secretary shall maintain an up to date 
        listing of all harmonized standards certified under this 
        section on the Internet website of the Department of Health and 
        Human Services.
            ``(2) Sample contract language.--The Secretary shall 
        publish on the Internet website of the Department of Health and 
        Human Services sample contract language that incorporates the 
        harmonized standards certified under this section, which may be 
        used by insurers seeking to qualify as an eligible insurer. The 
        types of harmonized standards that shall be included in sample 
        contract language are the standards that are relevant to the 
        contractual bargain between the insurer and insured.
    ``(h) State Adoption and Enforcement.--Not later than 18 months 
after the certification by the Secretary of harmonized standards under 
this section, the States may adopt such harmonized standards (and 
become an adopting State) and, in which case, shall enforce the 
harmonized standards pursuant to State law.

``SEC. 2933. APPLICATION AND PREEMPTION.

    ``(a) Superceding of State Law.--
            ``(1) In general.--The harmonized standards certified under 
        this subtitle and applied as provided for in section 
        2933(d)(3), shall supersede any and all State laws of a non-
        adopting State insofar as such State laws relate to the areas 
        of harmonized standards as applied to an eligible insurer, or 
        health insurance coverage issued by a eligible insurer, 
        including with respect to coverage issued to a small business 
        health plan, in a nonadopting State.
            ``(2) Nonadopting states.--This subtitle shall supersede 
        any and all State laws of a nonadopting State (whether enacted 
        prior to or after the date of enactment of this title) insofar 
        as they may--
                    ``(A) prohibit an eligible insurer from offering, 
                marketing, or implementing health insurance coverage 
                consistent with the harmonized standards; or
                    ``(B) have the effect of retaliating against or 
                otherwise punishing in any respect an eligible insurer 
                for offering, marketing, or implementing health 
                insurance coverage consistent with the harmonized 
                standards under this subtitle.
    ``(b) Savings Clause and Construction.--
            ``(1) Nonapplication to adopting states.--Subsection (a) 
        shall not apply with respect to adopting States.
            ``(2) Nonapplication to certain insurers.--Subsection (a) 
        shall not apply with respect to insurers that do not qualify as 
        eligible insurers who offer health insurance coverage in a 
        nonadopting State.
            ``(3) Nonapplication where obtaining relief under state 
        law.--Subsection (a)(1) shall not supercede any State law of a 
        nonadopting State to the extent necessary to permit individuals 
        or the insurance department of the State (or other State 
        agency) to obtain relief under State law to require an eligible 
        insurer to comply with the harmonized standards under this 
        subtitle.
            ``(4) No effect on preemption.--In no case shall this 
        subtitle be construed to limit or affect in any manner the 
        preemptive scope of sections 502 and 514 of the Employee 
        Retirement Income Security Act of 1974. In no case shall this 
        subtitle be construed to create any cause of action under 
        Federal or State law or enlarge or affect any remedy available 
        under the Employee Retirement Income Security Act of 1974.
    ``(c) Effective Date.--This section shall apply beginning on the 
date that is 18 months after the date on harmonized standards are 
certified by the Secretary under this subtitle.

``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.

    ``(a) In General.--The district courts of the United States shall 
have exclusive jurisdiction over civil actions involving the 
interpretation of this subtitle.
    ``(b) Actions.--An eligible insurer may bring an action in the 
district courts of the United States for injunctive or other equitable 
relief against any officials or agents of a nonadopting State in 
connection with any conduct or action, or proposed conduct or action, 
by such officials or agents which violates, or which would if 
undertaken violate, section 2933.
    ``(c) Direct Filing in Court of Appeals.--At the election of the 
eligible insurer, an action may be brought under subsection (b) 
directly in the United States Court of Appeals for the circuit in which 
the nonadopting State is located by the filing of a petition for review 
in such Court.
    ``(d) Expedited Review.--
            ``(1) District court.--In the case of an action brought in 
        a district court of the United States under subsection (b), 
        such court shall complete such action, including the issuance 
        of a judgment, prior to the end of the 120-day period beginning 
        on the date on which such action is filed, unless all parties 
        to such proceeding agree to an extension of such period.
            ``(2) Court of appeals.--In the case of an action brought 
        directly in a United States Court of Appeal under subsection 
        (c), or in the case of an appeal of an action brought in a 
        district court under subsection (b), such Court shall complete 
        all action on the petition, including the issuance of a 
        judgment, prior to the end of the 60-day period beginning on 
        the date on which such petition is filed with the Court, unless 
        all parties to such proceeding agree to an extension of such 
        period.
    ``(e) Standard of Review.--A court in an action filed under this 
section, shall render a judgment based on a review of the merits of all 
questions presented in such action and shall not defer to any conduct 
or action, or proposed conduct or action, of a nonadopting State.

``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS; RULE OF CONSTRUCTION.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this subtitle.
    ``(b) Health Savings Accounts.--Nothing in this subtitle shall be 
construed to create any mandates for coverage of any benefits below the 
deductible levels set for any health savings account-qualified health 
plan pursuant to section 223 of the Internal Revenue Code of 1986.''.

     TITLE III--AFFORDABLE ACCESS TO HEALTH CARE FOR ALL AMERICANS

 Subtitle A--Improving the Quality of Health Care by More Effectively 
                  Using Health Information Technology

SEC. 300. SHORT TITLE.

    This subtitle may be cited as the ``Wired for Health Care Quality 
Act''.

                 PART I--HEALTH INFORMATION TECHNOLOGY

    Subpart A--Improving the Interoperability of Health Information 
                               Technology

SEC. 301. IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY.

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

         ``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY

``SEC. 3001. DEFINITIONS; REFERENCE.

    ``(a) In General.--In this title:
            ``(1) Community.--The term `Community' means the American 
        Health Information Community established under section 3004.
            ``(2) Health care provider.--The term `health care 
        provider' means a hospital, skilled nursing facility, home 
        health entity, health care clinic, federally qualified health 
        center, group practice (as defined in section 1877(h)(4) of the 
        Social Security Act), a pharmacist, a pharmacy, a laboratory, a 
        physician (as defined in section 1861(r) of the Social Security 
        Act), a practitioner (as defined in section 1842(b)(18)(CC) of 
        the Social Security Act), a health facility operated by or 
        pursuant to a contract with the Indian Health Service, a rural 
        health clinic, and any other category of facility or clinician 
        determined appropriate by the Secretary.
            ``(3) Health information.--The term `health information' 
        has the meaning given such term in section 1171(4) of the 
        Social Security Act.
            ``(4) Health insurance plan.--
                    ``(A) In general.--The term `health insurance plan' 
                means--
                            ``(i) a health insurance issuer (as defined 
                        in section 2791(b)(2));
                            ``(ii) a group health plan (as defined in 
                        section 2791(a)(1)); and
                            ``(iii) a health maintenance organization 
                        (as defined in section 2791(b)(3)); or
                            ``(iv) a safety net health plan.
                    ``(B) Safety net health plan.--The term `safety net 
                health plan' means a managed care organization, as 
                defined in section 1932(a)(1)(B)(i) of the Social 
                Security Act--
                            ``(i) that is exempt from or not subject to 
                        Federal income tax, or that is owned by an 
                        entity or entities exempt from or not subject 
                        to Federal income tax; and
                            ``(ii) for which not less than 75 percent 
                        of the enrolled population receives benefits 
                        under a Federal health care program (as defined 
                        in section 1128B(f)(1) of the Social Security 
                        Act) or a health care plan or program which is 
                        funded, in whole or in part, by a State (other 
                        than a program for government employees).
                    ``(C) References.--All references in this title to 
                `health plan' shall be deemed to be references to 
                `health insurance plan'.
            ``(5) Individually identifiable health information.--The 
        term `individually identifiable health information' has the 
        meaning given such term in section 1171 of the Social Security 
        Act.
            ``(6) Laboratory.--The term `laboratory' has the meaning 
        given such term in section 353.
            ``(7) National coordinator.--The term `National 
        Coordinator' means the National Coordinator of Health 
        Information Technology appointed pursuant to section 3002.
            ``(8) Partnership.--The term `Partnership' means the 
        Partnership for Health Care Improvement established under 
        section 3003.
            ``(9) Qualified health information technology.--The term 
        `qualified health information technology' means a computerized 
        system (including hardware and software) that--
                    ``(A) protects the privacy and security of health 
                information;
                    ``(B) maintains and provides permitted access to 
                health information in an electronic format;
                    ``(C) with respect to individually identifiable 
                health information maintained in a designated record 
                set, preserves an audit trail of each individual that 
                has gained access to such record set;
                    ``(D) incorporates decision support to reduce 
                medical errors and enhance health care quality;
                    ``(E) complies with the standards adopted by the 
                Federal Government under section 3003;
                    ``(F) has the ability to transmit and exchange 
                information to other health information technology 
                systems and, to the extent feasible, public health 
                information technology systems; and
                    ``(G) allows for the reporting of quality measures 
                adopted under section 3010.
            ``(10) State.--The term `State' means each of the several 
        States, the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
    ``(b) References to Social Security Act.--Any reference in this 
section to the Social Security Act shall be deemed to be a reference to 
such Act as in effect on the date of enactment of this title.

``SEC. 3002. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION 
              TECHNOLOGY.

    ``(a) Establishment.--There is established within the office of the 
Secretary, the Office of the National Coordinator of Health Information 
Technology. The National Coordinator shall be appointed by the 
Secretary in consultation with the President, and shall report directly 
to the Secretary.
    ``(b) Purpose.--The Office of the National Coordinator shall be 
responsible for--
            ``(1) ensuring that key health information technology 
        initiatives are coordinated across programs of the Department 
        of Health and Human Services;
            ``(2) ensuring that health information technology policies 
        and programs of the Department of Health and Human Services are 
        coordinated with such policies and programs of other relevant 
        Federal agencies (including Federal commissions and advisory 
        committees) with a goal of avoiding duplication of efforts and 
        of helping to ensure that each agency undertakes activities 
        primarily within the areas of its greatest expertise and 
        technical capability;
            ``(3) reviewing Federal health information technology 
        investments to ensure that Federal health information 
        technology programs are meeting the objectives of the strategic 
        plan published by the Office of the National Coordinator of 
        Health Information Technology to establish a nationwide 
        interoperable health information technology infrastructure;
            ``(4) providing comments and advice regarding specific 
        Federal health information technology programs, at the request 
        of Office of Management and Budget; and
            ``(5) enhancing the use of health information technology to 
        improve the quality of health care in the prevention and 
        management of chronic disease and to address population health.
    ``(c) Role With Community and the Partnership.--The Office of the 
National Coordinator shall--
            ``(1) serve as an ex officio member of the Community, and 
        act as a liaison between the Federal Government and the 
        Community;
            ``(2) serve as an ex officio member of the Partnership and 
        act as a liaison between the Federal Government and the 
        Partnership; and
            ``(3) serve as a liaison between the Partnership and the 
        Community.
    ``(d) Reports and Website.--The Office of the National Coordinator 
shall--
            ``(1) develop and publish a strategic plan for implementing 
        a nationwide interoperable health information technology 
        infrastructure;
            ``(2) maintain and frequently update an Internet website 
        that--
                    ``(A) publishes the schedule for the assessment of 
                standards for significant use cases;
                    ``(B) publishes the recommendations of the 
                Community;
                    ``(C) publishes the recommendations of the 
                Partnership;
                    ``(D) publishes quality measures;
                    ``(E) identifies sources of funds that will be made 
                available to facilitate the purchase of, or enhance the 
                utilization of, health information technology systems, 
                either through grants or technical assistance; and
                    ``(F) publishes a plan for a transition of any 
                functions of the Office of the National Coordinator 
                that should be continued after September 30, 2014;
            ``(3) prepare a report on the lessons learned from major 
        public and private health care systems that have implemented 
        health information technology systems, including an explanation 
        of whether the systems and practices developed by such systems 
        may be applicable to and usable in whole or in part by other 
        health care providers; and
            ``(4) assess the impact of health information technology in 
        communities with health disparities and identify practices to 
        increase the adoption of such technology by health care 
        providers in such communities.
    ``(e) Rule of Construction.--Nothing in this section shall be 
construed as requiring the duplication of Federal efforts with respect 
to the establishment of the Office of the National Coordinator for 
Health Information Technology, regardless of whether such efforts are 
carried out before or after the date of the enactment of this title.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $5,000,000 for each of fiscal 
years 2008 and 2009.
    ``(g) Sunset.--The provisions of this section shall not apply after 
September 30, 2014.

``SEC. 3003. PARTNERSHIP FOR HEALTH CARE IMPROVEMENT-STANDARDS AND 
              TECHNOLOGY.

    ``(a) Establishment.--
            ``(1) In general.--There is established a public-private 
        Partnership for Health Care Improvement to--
                    ``(A) provide advice to the Secretary and the 
                Nation and recommend specific actions to achieve a 
                nationwide interoperable health information technology 
                infrastructure;
                    ``(B) make recommendations concerning standards, 
                implementation specifications, and certification 
                criteria for the electronic exchange of health 
                information (including for the reporting of quality 
                data under section 3010) for adoption by the Federal 
                Government and voluntary adoption by private entities;
                    ``(C) serve as a forum for the participation of a 
                broad range of stakeholders with specific technical 
                expertise in the development of standards, 
                implementation specifications, and certification 
                criteria to provide input on the effective 
                implementation of health information technology 
                systems; and
                    ``(D) develop and maintain an Internet website 
                that--
                            ``(i) publishes established governance 
                        rules (including a subsequent appointment 
                        process);
                            ``(ii) publishes a business plan;
                            ``(iii) publishes meeting notices at least 
                        14 days prior to each meeting;
                            ``(iv) publishes meeting agendas at least 7 
                        days prior to each meeting; and
                            ``(v) publishes meeting materials at least 
                        3 days prior to each meeting.
            ``(2) Limitation.--The Partnership shall not meet or take 
        any action until an advisory committee charter has been filed 
        with the Secretary and with the appropriate committees of the 
        Senate and House of Representatives for the Community described 
        in section 3004.
    ``(b) Membership.--
            ``(1) Appointments.--
                    ``(A) In general.--The Partnership shall be 
                composed of members to be appointed as follows:
                            ``(i) 2 members shall be appointed by the 
                        Secretary.
                            ``(ii) 1 member shall be appointed by the 
                        majority leader of the Senate.
                            ``(iii) 1 member shall be appointed by the 
                        minority leader of the Senate.
                            ``(iv) 1 member shall be appointed by the 
                        Speaker of the House of Representatives.
                            ``(v) 1 member shall be appointed by the 
                        minority leader of the House of 
                        Representatives.
                            ``(vi) Seven members shall be appointed by 
                        the Comptroller General of whom--
                                    ``(I) one member shall be a 
                                representative of consumer or patient 
                                organizations;
                                    ``(II) one member shall be a 
                                representative of organizations with 
                                expertise in privacy;
                                    ``(III) one member shall be a 
                                representative of organizations with 
                                expertise in security;
                                    ``(IV) one member shall be a 
                                representative of health care 
                                providers;
                                    ``(V) one member shall be a 
                                representative of health plans or other 
                                third party payers;
                                    ``(VI) one member shall be a 
                                representative of information 
                                technology vendors; and
                                    ``(VII) one member shall be a 
                                representative of purchasers or 
                                employers.
                    ``(B) National coordinator.--The National 
                Coordinator shall be a member of the Partnership and 
                act as a liaison among the Partnership, the community, 
                and the Federal Government.
            ``(2) Chairperson and vice chairperson.--The Partnership 
        shall designate one member to serve as the chairperson and one 
        member to serve as the vice chairperson of the Partnership.
            ``(3) Participation.--In appointing members under paragraph 
        (1)(A), and in developing the procedures for conducting the 
        activities of the Partnership, the Partnership shall ensure a 
        balance among various sectors of the health care system so that 
        no single sector unduly influences the recommendations of the 
        Partnership.
            ``(4) Terms.--Members appointed under paragraph (1)(A) 
        shall serve for 3 year terms, except that any member appointed 
        to fill a vacancy for an unexpired term shall be appointed for 
        the remainder of such term. A member may serve for not to 
        exceed 180 days after the expiration of such member's term or 
        until a successor has been appointed.
            ``(5) Outside involvement.--The Partnership shall ensure an 
        adequate opportunity for the participation of outside advisors, 
        including individuals with expertise in--
                    ``(A) health information privacy;
                    ``(B) health information security;
                    ``(C) health care quality and patient safety, 
                including individuals with expertise in utilizing 
                health information technology to improve health care 
                quality and patient safety;
                    ``(D) medical and clinical research data exchange; 
                and
                    ``(E) developing health information technology 
                standards and new health information technology.
            ``(6) Quorum.--Two-thirds of the members of the Partnership 
        shall constitute a quorum for the purpose of conducting votes.
    ``(c) Standards and Implementation Specifications.--
            ``(1) Schedule.--Not later than 90 days after the date of 
        enactment of this title, the Partnership shall develop a 
        schedule for the assessment of standards and implementation 
        specifications under this section. The Partnership shall update 
        such schedule annually. The Secretary shall publish such 
        schedule in the Federal Register and on the Internet website of 
        the Department of Health and Human Services.
            ``(2) First year recommendations.--Consistent with the 
        schedule published under paragraph (1) and not later than 1 
        year after date of enactment of this title, the Partnership 
        shall recommend, and the Secretary shall review, such standards 
        and implementation specifications.
            ``(3) Ongoing recommendations.--The Partnership shall 
        review and modify, as appropriate but at least annually, 
        adopted standards and implementation specifications and 
        continue to recommend additional standards and implementation 
        specifications, consistent with the schedule published pursuant 
        to paragraph (1). The Secretary shall review such modifications 
        and recommendations.
            ``(4) Recognition of private entities.--The Partnership, in 
        consultation with the Secretary, may recognize a private entity 
        or entities for the purpose of developing and updating 
        standards and implementation specifications to achieve uniform 
        and consistent implementation of the standards adopted by the 
        President under this title. Such entity or entities shall make 
        recommendations to the Partnership consistent with this 
        section.
            ``(5) Publication.--All recommendations made by the 
        Partnership pursuant to this section shall be published in the 
        Federal Register and on the Internet website of the Office of 
        the National Coordinator.
            ``(6) Pilot testing.--The Secretary may conduct, or 
        recognize a private entity or entities to conduct, a pilot 
        project to test the standards and implementation specifications 
        developed under this section in order to provide for the 
        efficient implementation of the standards and implementation 
        specifications described in this subsection prior to issuing 
        such recommendations.
            ``(7) Public input.--The Partnership shall conduct open 
        public meetings and develop a process to allow for public 
        comment on the schedule and recommendations described in this 
        section. Such process shall ensure that such comments will be 
        submitted within 30 days of the publication of a recommendation 
        under this section.
            ``(8) Federal action.--Not later than 90 days after the 
        issuance of a recommendation from the Partnership under this 
        subsection, the Secretary, the Secretary of Veterans Affairs, 
        and the Secretary of Defense, in collaboration with 
        representatives of other relevant Federal agencies as 
        determined appropriate by the President, shall jointly review 
        such recommendation. If appropriate, the President shall 
        provide for the adoption by the Federal Government of any 
        standard or implementation specification contained in such 
        recommendation. Such determination shall be published in the 
        Federal Register and on the Internet website of the Office of 
        the National Coordinator within 30 days after such 
        determination is made.
            ``(9) Consistency.--The standards and implementation 
        specifications described in this subsection shall be consistent 
        with the standards for information transactions and data 
        elements developed pursuant to the regulations promulgated 
        under section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996.
    ``(d) Certification.--
            ``(1) Developing criteria.--The Partnership, in 
        consultation with the Secretary, may recognize a private entity 
        or entities for the purpose of developing and recommending to 
        the Partnership criteria to certify that appropriate categories 
        of health information technology products that claim to be in 
        compliance with applicable standards and implementation 
        specifications adopted under this title have established such 
        compliance.
            ``(2) Adoption of criteria.--The Secretary, based upon the 
        recommendations of the Partnership, shall review, and if 
        appropriate, adopt such criteria.
            ``(3) Conducting certification.--The Secretary may 
        recognize a private entity or entities to conduct the 
        certifications described under paragraph (1) using the criteria 
        adopted by the Secretary under this subsection.
    ``(e) Rule of Construction.--Nothing in this section shall be 
construed as disrupting existing activities described in subsection (c) 
or (d).
    ``(f) Requirement To Consider Recommendations.--In carrying out the 
activities described in subsections (c) and (d), the Partnership shall 
adopt and integrate the recommendations of the Community that are 
adopted by the Secretary.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $2,000,000 for each of the 
fiscal years 2008 and 2009.

``SEC. 3004. AMERICAN HEALTH INFORMATION COMMUNITY--POLICIES.

    ``(a) Establishment.--There is established a committee to be known 
as the American Health Information Community. The Community shall--
            ``(1) provide advice to the Secretary and the heads of any 
        relevant Federal agencies concerning the policy considerations 
        related to health information technology;
            ``(2) not later than 1 year after the date of enactment of 
        this title, and annually thereafter, make recommendations 
        concerning a policy framework for the development and adoption 
        of a nationwide interoperable health information technology 
        infrastructure;
            ``(3) not later than 1 year after the date of enactment of 
        this title, and annually thereafter, make recommendation 
        concerning national policies for adoption by the Federal 
        Government, and voluntary adoption by private entities, to 
        support the widespread adoption of health information 
        technology, including--
                    ``(A) the protection of individually identifiable 
                health information, including policies concerning the 
                individual's ability to control the acquisition, uses, 
                and disclosures of individually identifiable health 
                information;
                    ``(B) methods to protect individually identifiable 
                health information from improper use and disclosures 
                and methods to notify patients if their individually 
                identifiable health information is wrongfully 
                disclosed;
                    ``(C) methods to facilitate secure access to such 
                individual's individually identifiable health 
                information;
                    ``(D) the appropriate uses of a nationwide health 
                information network including--
                            ``(i) the collection of quality data and 
                        public reporting;
                            ``(ii) biosurveillance and public health;
                            ``(iii) medical and clinical research; and
                            ``(iv) drug safety;
                    ``(E) fostering the public understanding of health 
                information technology;
                    ``(F) strategies to enhance the use of health 
                information technology in preventing and managing 
                chronic disease;
                    ``(G) policies to incorporate the input of 
                employees of health care providers in the design and 
                implementation of health information technology 
                systems; and
                    ``(H) other policies determined to be necessary by 
                the Community; and
            ``(4) serve as a forum for the participation of a broad 
        range of stakeholders to provide input on improving the 
        effective implementation of health information technology 
        systems.
    ``(b) Publication.--All recommendations made by the Community 
pursuant to this section shall be published in the Federal Register and 
on the Internet website of the National Coordinator. The Secretary 
shall review all recommendations and determine which recommendations 
shall be endorsed by the Federal Government and such determination 
shall be published on the Internet website of the Office of the 
National Coordinator within 30 days after the date on which such 
endorsement is made.
    ``(c) Membership.--
            ``(1) In general.--The Community shall be composed of 
        members to be appointed as follows:
                    ``(A) 3 members shall be appointed by the 
                Secretary, 1 of whom shall be a representative from the 
                Department of Health and Human Services.
                    ``(B) 1 member shall be appointed by the Secretary 
                of Veterans Affairs who shall represent the Department 
                of Veterans Affairs.
                    ``(C) 1 member shall be appointed by the Secretary 
                of Defense who shall represent the Department of 
                Defense.
                    ``(D) 1 member shall be appointed by the majority 
                leader of the Senate.
                    ``(E) 1 member shall be appointed by the minority 
                leader of the Senate.
                    ``(F) 1 member shall be appointed by the Speaker of 
                the House of Representatives.
                    ``(G) 1 member shall be appointed by the minority 
                leader of the House of Representatives.
                    ``(H) Nine members shall be appointed by the 
                Comptroller General of whom--
                            ``(i) one member shall be advocates for 
                        patients or consumers;
                            ``(ii) one member shall represent health 
                        care providers;
                            ``(iii) one member shall be from a labor 
                        organization representing health care workers;
                            ``(iv) one member shall have expertise in 
                        privacy and security;
                            ``(v) one member shall have expertise in 
                        improving the health of vulnerable populations;
                            ``(vi) one member shall represent health 
                        plans or other third party payers;
                            ``(vii) one member shall represent 
                        information technology vendors;
                            ``(viii) one member shall represent 
                        purchasers or employers; and
                            ``(ix) one member shall have expertise in 
                        health care quality measurement and reporting.
            ``(2) Chairperson and vice chairperson.--The Community 
        shall designate one member to serve as the chairperson and one 
        member to serve as the vice chairperson of the Community.
            ``(3) National coordinator.--The National Coordinator shall 
        be a member of the Community and act as a liaison among the 
        Community, the partnership, and the Federal Government.
            ``(4) Participation.--The members of the Community 
        appointed under paragraph (1) shall represent a balance among 
        various sectors of the health care system so that no single 
        sector unduly influences the recommendations of the Community.
            ``(5) Terms.--
                    ``(A) In general.--The terms of members of the 
                Community shall be for 3 years except that the 
                Comptroller General shall designate staggered terms for 
                the members first appointed.
                    ``(B) Vacancies.--Any member appointed to fill a 
                vacancy in the membership of the Community that occurs 
                prior to the expiration of the term for which the 
                member's predecessor was appointed shall be appointed 
                only for the remainder of that term. A member may serve 
                after the expiration of that member's term until a 
                successor has been appointed. A vacancy in the 
                Community shall be filled in the manner in which the 
                original appointment was made.
            ``(6) Outside involvement.--The Community shall ensure an 
        adequate opportunity for the participation of outside advisors, 
        including individuals with expertise in--
                    ``(A) health information privacy and security;
                    ``(B) improving the health of vulnerable 
                populations;
                    ``(C) health care quality and patient safety, 
                including individuals with expertise in measurement and 
                the use of health information technology to capture 
                data to improve health care quality and patient safety;
                    ``(D) ethics;
                    ``(E) medical and clinical research data exchange; 
                and
                    ``(F) developing health information technology 
                standards and new health information technology.
            ``(7) Quorum.--Ten members of the Community shall 
        constitute a quorum for purposes of voting, but a lesser number 
        of members may meet and hold hearings.
    ``(d) Federal Agencies.--
            ``(1) Staff of other federal agencies.--Upon the request of 
        the Community, the head of any Federal agency may detail, 
        without reimbursement, any of the personnel of such agency to 
        the Community to assist in carrying out the duties of the 
        Community. Any such detail shall not interrupt or otherwise 
        affect the civil service status or privileges of the Federal 
        employee involved.
            ``(2) Technical assistance.--Upon the request of the 
        Community, the head of a Federal agency shall provide such 
        technical assistance to the Community as the Community 
        determines to be necessary to carry out its duties.
            ``(3) Other resources.--The Community shall have reasonable 
        access to materials, resources, statistical data, and other 
        information from the Library of Congress and agencies and 
        elected representatives of the executive and legislative 
        branches of the Federal Government. The chairperson or vice 
        chairperson of the Community shall make requests for such 
        access in writing when necessary.
    ``(e) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) shall apply to the Community, except that the term 
provided for under section 14(a)(2) of such Act shall be not longer 
than 7 years.
    ``(f) Sunset.--The provisions of this section shall not apply after 
September 20, 2014.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $2,000,000 for each of fiscal 
years 2008 and 2009.

``SEC. 3005. FEDERAL PURCHASING AND DATA COLLECTION.

    ``(a) Coordination of Federal Spending.--
            ``(1) In general.--Not later than 1 year after the adoption 
        by the President of a recommendation under section 3003(c)(6), 
        a Federal agency shall not expend Federal funds for the 
        purchase of any new health information technology or health 
        information technology system for clinical care or for the 
        electronic retrieval, storage, or exchange of health 
        information if such technology or system is not consistent with 
        applicable standards adopted by the Federal Government under 
        section 3003.
            ``(2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed to restrict the purchase of minor (as determined 
        by the Secretary) hardware or software components in order to 
        modify, correct a deficiency in, or extend the life of existing 
        hardware or software.
    ``(b) Voluntary Adoption.--
            ``(1) In general.--Any standards and implementation 
        specifications adopted by the Federal Government under section 
        303(c)(6) shall be voluntary with respect to private entities.
            ``(2) Requirement.--Private entities that enter into a 
        contract with the Federal Government shall adopt the standards 
        and implementation specifications adopted by the Federal 
        Government under this section for the purpose of activities 
        under such Federal contract.
            ``(3) Rule of construction.--Nothing in this section shall 
        be construed to require that a private entity that enters into 
        a contract with the Federal Government adopt the standards and 
        implementation specifications adopted by the Federal Government 
        under this section with respect to activities not related to 
        the contract.
    ``(c) Coordination of Federal Data Collection.--Not later than 3 
years after the adoption by the Federal Government of a recommendation 
as provided for in section 303(c)(6), all Federal agencies collecting 
health data in an electronic format for the purposes of quality 
reporting, surveillance, epidemiology, adverse event reporting, 
research, or for other purposes determined appropriate by the 
Secretary, shall comply with the standards and implementation 
specifications adopted under such subsection.

``SEC. 3006. QUALITY AND EFFICIENCY REPORTS.

    ``(a) Purpose.--The purpose of this section is to provide for the 
development of reports based on Federal health care data and private 
data that is publicly available or is provided by the entity making the 
request for the report in order to--
            ``(1) improve the quality and efficiency of health care and 
        advance health care research;
            ``(2) enhance the education and awareness of consumers for 
        evaluating health care services; and
            ``(3) provide the public with reports on national, 
        regional, and provider- and supplier-specific performance, 
        which may be in a provider- or supplier-identifiable format.
    ``(b) Procedures for the Development of Reports.--
            ``(1) In general.--Notwithstanding section 552(b)(6) or 
        552a(b) of title 5, United States Code, not later than 12 
        months after the date of enactment of this section, the 
        Secretary, in accordance with the purpose described in 
        subsection (a), shall establish and implement procedures under 
        which an entity may submit a request to a Quality Reporting 
        Organization for the Organization to develop a report based 
        on--
                    ``(A) Federal health care data disclosed to the 
                Organization under subsection (c); and
                    ``(B) private data that is publicly available or is 
                provided to the Organization by the entity making the 
                request for the report.
            ``(2) Definitions.--In this section:
                    ``(A) Federal health care data.--The term `Federal 
                health care data' means --
                            ``(i) deidentified patient enrollment data, 
                        reimbursement claims, and survey data 
                        maintained by the Secretary or entities under 
                        programs, contracts, grants, or memoranda of 
                        understanding administered by the Secretary; 
                        and
                            ``(ii) where feasible, other deidentified 
                        patient enrollment data, reimbursement claims, 
                        and survey data maintained by the Federal 
                        Government or entities under contract with the 
                        Federal Government.
                    ``(B) Quality reporting organization.--The term 
                `Quality Reporting Organization' means an entity with a 
                contract under subsection (d).
    ``(c) Access to Federal Health Care Data.--
            ``(1) In general.--The procedures established under 
        subsection (b)(1) shall provide for the secure disclosure of 
        Federal health care data to each Quality Reporting 
        Organization.
            ``(2) Update of information.--Not less than every 6 months, 
        the Secretary shall update the information disclosed under 
        paragraph (1) to Quality Reporting Organizations.
    ``(d) Quality Reporting Organizations.--
            ``(1) In general.--
                    ``(A) Three contracts.--Subject to subparagraph 
                (B), the Secretary shall enter into a contract with 3 
                private entities to serve as Quality Reporting 
                Organizations under which an entity shall--
                            ``(i) store the Federal health care data 
                        that is to be disclosed under subsection (c); 
                        and
                            ``(ii) develop and release reports pursuant 
                        to subsection (e).
                    ``(B) Additional contracts.--If the Secretary 
                determines that reports are not being developed and 
                released within 6 months of the receipt of the request 
                for the report, the Secretary shall enter into 
                contracts with additional private entities in order to 
                ensure that such reports are developed and released in 
                a timely manner.
            ``(2) Qualifications.--The Secretary shall enter into a 
        contract with an entity under paragraph (1) only if the 
        Secretary determines that the entity--
                    ``(A) has the research capability to conduct and 
                complete reports under this section;
                    ``(B) has in place-
                            ``(i) an information technology 
                        infrastructure to support the database of 
                        Federal health care data that is to be 
                        disclosed to the entity; and
                            ``(ii) operational standards to provide 
                        security for such database;
                    ``(C) has experience with, and expertise on, the 
                development of reports on health care quality and 
                efficiency; and
                    ``(D) has a significant business presence in the 
                United States.
            ``(3) Contract requirements.--Each contract with an entity 
        under paragraph (1) shall contain the following requirements:
                    ``(A) Ensuring beneficiary privacy.--
                            ``(i) HIPAA.--The entity shall meet the 
                        requirements imposed on a covered entity for 
                        purposes of applying part C of title XI and all 
                        regulatory provisions promulgated thereunder, 
                        including regulations (relating to privacy) 
                        adopted pursuant to the authority of the 
                        Secretary under section 264(c) of the Health 
                        Insurance Portability and Accountability Act of 
                        1996 (42 U.S.C. 1320d-2 note).
                            ``(ii) Privacy.--The entity shall provide 
                        assurances that the entity will not use the 
                        Federal health care data disclosed under 
                        subsection (c) in a manner that violates 
                        sections 552 or 552a of title 5, United States 
                        Code, with regard to the privacy of and 
                        individual's individually identifiable health 
                        information.
                    ``(B) Proprietary information.--The entity shall 
                provide assurances that the entity will not disclose 
                any negotiated price concessions, such as discounts, 
                direct or indirect subsidies, rebates, and direct or 
                indirect remunerations, obtained by health care 
                providers or suppliers or health care plans, or any 
                other proprietary cost information.
                    ``(C) Disclosure.--The entity shall disclose--
                            ``(i) any financial, reporting, or 
                        contractual relationship between the entity and 
                        any health care provider or supplier or health 
                        care plan; and
                            ``(ii) if applicable, the fact that the 
                        entity is managed, controlled, or operated by 
                        any health care provider or supplier or health 
                        care plan.
                    ``(D) Component of another organization.--If the 
                entity is a component of another organization--
                            ``(i) the entity shall maintain Federal 
                        health care data and reports separately from 
                        the rest of the organization and establish 
                        appropriate security measures to maintain the 
                        confidentiality and privacy of the Federal 
                        health care data and reports; and
                            ``(ii) the entity shall not make an 
                        unauthorized disclosure to the rest of the 
                        organization of Federal health care data or 
                        reports in breach of such confidentiality and 
                        privacy requirement.
                    ``(E) Termination or nonrenewal.--If a contract 
                under this section is terminated or not renewed, the 
                following requirements shall apply:
                            ``(i) Confidentiality and privacy 
                        protections.--The entity shall continue to 
                        comply with the confidentiality and privacy 
                        requirements under this section with respect to 
                        all Federal health care data disclosed to the 
                        entity and each report developed by the entity.
                            ``(ii) Disposition of data and reports.--
                        The entity shall--
                                    ``(I) return to the Secretary all 
                                Federal health care data disclosed to 
                                the entity and each report developed by 
                                the entity; or
                                    ``(II) if returning the Federal 
                                health care data and reports is not 
                                practicable, destroy the reports and 
                                Federal health care data.
            ``(4) Competitive procedures.--Competitive procedures (as 
        defined in section 4(5) of the Federal Procurement Policy Act) 
        shall be used to enter into contracts under paragraph (1).
            ``(5) Review of contract in the event of a merger or 
        acquisition.--The Secretary shall review the contract with a 
        Quality Reporting Organization under this section in the event 
        of a merger or acquisition of the Organization in order to 
        ensure that the requirements under this section will continue 
        to be met.
    ``(e) Development and Release of Reports Based on Requests.--
            ``(1) Request for a report.--
                    ``(A) Request.--
                            ``(i) In general.--The procedures 
                        established under subsection (b)(1) shall 
                        include a process for an entity to submit a 
                        request to a Quality Reporting Organization for 
                        a report based on Federal health care data and 
                        private data that is publicly available or is 
                        provided by the entity making the request for 
                        the report. Such request shall comply with the 
                        purpose described in subsection (a).
                            ``(ii) Request for specific methodology.--
                        The process described in clause (i) shall 
                        permit an entity making a request for a report 
                        to request that a specific methodology, 
                        including appropriate risk adjustment, be used 
                        by the Quality Reporting Organization in 
                        developing the report. The Organization shall 
                        work with the entity making the request to 
                        finalize the methodology to be used.
                            ``(iii) Request for a specific qro.--The 
                        process described in clause (i) shall permit an 
                        entity to submit the request for a report to 
                        any Quality Reporting Organization.
                    ``(B) Release to public.--The procedures 
                established under subsection (b)(1) shall provide that 
                at the time a request for a report is finalized under 
                subparagraph (A) by a Quality Reporting Organization, 
                the Organization shall make available to the public, 
                through the Internet website of the Department of 
                Health and Human Services and other appropriate means, 
                a brief description of both the requested report and 
                the methodology to be used to develop such report.
            ``(2) Development and release of report.--
                    ``(A) Development.--
                            ``(i) In general.--If the request for a 
                        report complies with the purpose described in 
                        subsection (a), the Quality Reporting 
                        Organization may develop the report based on 
                        the request.
                            ``(ii) Requirement.--A report developed 
                        under clause (i) shall include a detailed 
                        description of the standards, methodologies, 
                        and measures of quality used in developing the 
                        report.
                    ``(B) Review of report by secretary to ensure 
                compliance with privacy requirement.--Prior to a 
                Quality Reporting Organization releasing a report under 
                subparagraph (C), the Secretary shall review the report 
                to ensure that the report complies with the Federal 
                regulations (concerning the privacy of individually 
                identifiable beneficiary health information) 
                promulgated under section 264(c) of the Health 
                Insurance Portability and Accountability Act of 1996 
                and sections 552 or 552a of title 5, United States 
                Code, with regard to the privacy of individually 
                identifiable beneficiary health information. The 
                Secretary shall act within 30 business days of 
                receiving such report.
                    ``(C) Release of report.--
                            ``(i) Release to entity making request.--If 
                        the Secretary finds that the report complies 
                        with the provisions described in subparagraph 
                        (B), the Quality Reporting Organization shall 
                        release the report to the entity that made the 
                        request for the report.
                            ``(ii) Release to public.--The procedures 
                        established under subsection (b)(1) shall 
                        provide for the following:
                                    ``(I) Updated description.--At the 
                                time of the release of a report by a 
                                Quality Reporting Organization under 
                                clause (i), the entity shall make 
                                available to the public, through the 
                                Internet website of the Department of 
                                Health and Human Services and other 
                                appropriate means, an updated brief 
                                description of both the requested 
                                report and the methodology used to 
                                develop such report.
                                    ``(II) Complete report.--Not later 
                                than 1 year after the date of the 
                                release of a report under clause (i), 
                                the report shall be made available to 
                                the public through the Internet website 
                                of the Department of Health and Human 
                                Services and other appropriate means.
    ``(f) Annual Review of Reports and Termination of Contracts.--
            ``(1) Annual review of reports.--The Comptroller General of 
        the United States shall review reports released under 
        subsection (e)(2)(C) to ensure that such reports comply with 
        the purpose described in subsection (a) and annually submit a 
        report to the Secretary on such review.
            ``(2) Termination of contracts.--The Secretary may 
        terminate a contract with a Quality Reporting Organization if 
        the Secretary determines that there is a pattern of reports 
        being released by the Organization that do not comply with the 
        purpose described in subsection (a).
    ``(g) Fees.--
            ``(1) Fees for secretary.--The Secretary shall charge a 
        Quality Reporting Organization a fee for--
                    ``(A) disclosing the data under subsection (c); and
                    ``(B) conducting the review under subsection 
                (e)(2)(B).
        The Secretary shall ensure that such fees are sufficient to 
        cover the costs of the activities described in subparagraph (A) 
        and (B).
            ``(2) Fees for qro.--
                    ``(A) In general.--Subject to subparagraphs (A) and 
                (B), a Quality Reporting Organization may charge an 
                entity making a request for a report a reasonable fee 
                for the development and release of the report.
                    ``(B) Discount for small entities.--In the case of 
                an entity making a request for a report (including a 
                not-for-profit) that has annual revenue that does not 
                exceed $10,000,000, the Quality Reporting Organization 
                shall reduce the reasonable fee charged to such entity 
                under subparagraph (A) by an amount equal to 10 percent 
                of such fee.
                    ``(C) Increase for large entities that do not agree 
                to release reports within 6 months.--In the case of an 
                entity making a request for a report that is not 
                described in subparagraph (B) and that does not agree 
                to the report being released to the public under clause 
                (ii)(II) of subsection (e)(2)(C) within 6 months of the 
                date of the release of the report to the entity under 
                clause (i) of such subsection, the Quality Reporting 
                Organization shall increase the reasonable fee charged 
                to such entity under subparagraph (A) by an amount 
                equal to 10 percent of such fee.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed to effect the requirement 
                that a report be released to the public under clause 
                (ii)(II) of subsection (e)(2)(C)(ii)(II) by not later 
                than 1 year after the date of the release of the report 
                to the requesting entity under clause (i) of such 
                subsection.
    ``(h) Coordination.--Not later than 1 year after the date of 
enactment of this title, the Secretary shall submit a report (including 
recommendations) to the appropriate committees of Congress concerning 
the coordination of existing Federal health care quality initiatives.
    ``(i) Regulations.--Not later than 6 months after the date of 
enactment of this section, the Secretary shall prescribe regulations to 
carry out this section.

``SEC. 3007. RESEARCH ACCESS TO HEALTH CARE DATA AND REPORTING ON 
              PERFORMANCE.

    ``The Secretary shall permit researchers that meet criteria used to 
evaluate the appropriateness of the release data for research purpose 
(as established by the Secretary) to--
            ``(1) have access to all Federal health care data (as 
        defined in section 3006(b)(2)(A)); and
            ``(2) report on the performance of health care providers 
        and suppliers, including reporting in a provider- or supplier-
        identifiable format.''.

Subpart B--Facilitating the Widespread Adoption of Interoperable Health 
                         Information Technology

SEC. 305. FACILITATING THE WIDESPREAD ADOPTION OF INTEROPERABLE HEALTH 
              INFORMATION TECHNOLOGY.

    Title XXX of the Public Health Service Act, as added by section 
301, is amended by adding at the end the following:

``SEC. 3008. FACILITATING THE WIDESPREAD ADOPTION OF INTEROPERABLE 
              HEALTH INFORMATION TECHNOLOGY.

    ``(a) Competitive Grants for Adoption of Technology.--
            ``(1) In general.--The Secretary may award competitive 
        grants to eligible entities to facilitate the purchase and 
        enhance the utilization of qualified health information 
        technology systems to improve the quality and efficiency of 
        health care.
            ``(2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1) an entity shall--
                    ``(A) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require;
                    ``(B) submit to the Secretary a strategic plan for 
                the implementation of data sharing and interoperability 
                measures;
                    ``(C) adopt the standards adopted by the Federal 
                Government under section 3005;
                    ``(D) implement the measures adopted under section 
                3010 and report to the Secretary on such measures;
                    ``(E) agree to notify individuals if their 
                individually identifiable health information is 
                wrongfully disclosed;
                    ``(F) take into account the input of employees and 
                staff who are directly involved in patient care of such 
                health care providers in the design, implementation, 
                and use of qualified health information technology 
                systems;
                    ``(G) demonstrate significant financial need;
                    ``(H) provide matching funds in accordance with 
                paragraph (4); and
                    ``(I) be a--
                            ``(i) public or not for profit hospital;
                            ``(ii) federally qualified health center 
                        (as defined in section 1861(aa)(4) of the 
                        Social Security Act);
                            ``(iii) individual or group practice (or a 
                        consortium thereof); or
                            ``(iv) another health care provider not 
                        described in clause (i) or (ii);
                that serves medically underserved communities.
            ``(3) Use of funds.--Amounts received under a grant under 
        this subsection shall be used to--
                    ``(A) facilitate the purchase of qualified health 
                information technology systems;
                    ``(B) train personnel in the use of such systems;
                    ``(C) enhance the utilization of qualified health 
                information technology systems (which may include 
                activities to increase the awareness among consumers of 
                health care privacy protections); or
                    ``(D) improve the prevention and management of 
                chronic disease.
            ``(4) Matching requirement.--To be eligible for a grant 
        under this subsection an entity shall contribute non-Federal 
        contributions to the costs of carrying out the activities for 
        which the grant is awarded in an amount equal to $1 for each $3 
        of Federal funds provided under the grant.
            ``(5) Preference in awarding grants.--In awarding grants 
        under this subsection the Secretary shall give preference to--
                    ``(A) eligible entities that will improve the 
                degree to which such entity will link the qualified 
                health information system to local or regional health 
                information plan or plans; and
                    ``(B) with respect to awards made for the purpose 
                of providing care in an outpatient medical setting, 
                entities that organize their practices as a patient-
                centered medical home.
    ``(b) Competitive Grants for the Development of State Loan Programs 
To Facilitate the Widespread Adoption of Health Information 
Technology.--
            ``(1) In general.--The Secretary may award competitive 
        grants to States for the establishment of State programs for 
        loans to health care providers to facilitate the purchase and 
        enhance the utilization of qualified health information 
        technology.
            ``(2) Establishment of fund.--To be eligible to receive a 
        competitive grant under this subsection, a State shall 
        establish a qualified health information technology loan fund 
        (referred to in this subsection as a `State loan fund') and 
        comply with the other requirements contained in this 
        subsection. Amounts received under a grant under this 
        subsection shall be deposited in the State loan fund 
        established by the State. No funds authorized by other 
        provisions of this title to be used for other purposes 
        specified in this title shall be deposited in any such State 
        loan fund.
            ``(3) Eligibility.--To be eligible to receive a grant under 
        paragraph (1) a State shall--
                    ``(A) submit to the Secretary an application at 
                such time, in such manner, and containing such 
                information as the Secretary may require;
                    ``(B) submit to the Secretary a strategic plan in 
                accordance with paragraph (4);
                    ``(C) establish a qualified health information 
                technology loan fund in accordance with paragraph (2);
                    ``(D) require that health care providers receiving 
                loans under the grant--
                            ``(i) link, to the extent practicable, the 
                        qualified health information system to a local 
                        or regional health information network;
                            ``(ii) consult, as needed, with the Health 
                        Information Technology Resource Center 
                        established in section 914(d) to access the 
                        knowledge and experience of existing 
                        initiatives regarding the successful 
                        implementation and effective use of health 
                        information technology;
                            ``(iii) agree to notify individuals if 
                        their individually identifiable health 
                        information is wrongfully disclosed; and
                            ``(iv) take into account the input of 
                        employees and staff who are directly involved 
                        in patient care of such health care providers 
                        in the design and implementation and use of 
                        qualified health information technology 
                        systems;
                    ``(E) require that health care providers receiving 
                loans under the grant adopt the standards adopted by 
                the Federal Government under section 3005;
                    ``(F) require that health care providers receiving 
                loans under the grant implement the measures adopted 
                under section 3010 and report to the Secretary on such 
                measures; and
                    ``(G) provide matching funds in accordance with 
                paragraph (8).
            ``(4) Strategic plan.--
                    ``(A) In general.--A State that receives a grant 
                under this subsection shall annually prepare a 
                strategic plan that identifies the intended uses of 
                amounts available to the State loan fund of the State.
                    ``(B) Contents.--A strategic plan under 
                subparagraph (A) shall include--
                            ``(i) a list of the projects to be assisted 
                        through the State loan fund in the first fiscal 
                        year that begins after the date on which the 
                        plan is submitted;
                            ``(ii) a description of the criteria and 
                        methods established for the distribution of 
                        funds from the State loan fund;
                            ``(iii) a description of the financial 
                        status of the State loan fund and the short-
                        term and long-term goals of the State loan 
                        fund; and
                            ``(iv) a description of the strategies the 
                        State will use to address challenges in the 
                        adoption of health information technology due 
                        to limited broadband access.
            ``(5) Use of funds.--
                    ``(A) In general.--Amounts deposited in a State 
                loan fund, including loan repayments and interest 
                earned on such amounts, shall be used only for awarding 
                loans or loan guarantees, or as a source of reserve and 
                security for leveraged loans, the proceeds of which are 
                deposited in the State loan fund established under 
                paragraph (1). Loans under this section may be used by 
                a health care provider to--
                            ``(i) facilitate the purchase of qualified 
                        health information technology systems;
                            ``(ii) enhance the utilization of qualified 
                        health information technology systems (which 
                        may include activities to increase the 
                        awareness among consumers of health care of 
                        privacy protections and privacy rights); or
                            ``(iii) train personnel in the use of such 
                        systems.
                    ``(B) Limitation.--Amounts received by a State 
                under this subsection may not be used--
                            ``(i) for the purchase or other acquisition 
                        of any health information technology system 
                        that is not a qualified health information 
                        technology system;
                            ``(ii) to conduct activities for which 
                        Federal funds are expended under this title, or 
                        the amendments made by the Wired for Health 
                        Care Quality Act; or
                            ``(iii) for any purpose other than making 
                        loans to eligible entities under this section.
            ``(6) Types of assistance.--Except as otherwise limited by 
        applicable State law, amounts deposited into a State loan fund 
        under this subsection may only be used for the following:
                    ``(A) To award loans that comply with the 
                following:
                            ``(i) The interest rate for each loan shall 
                        be less than or equal to the market interest 
                        rate.
                            ``(ii) The principal and interest payments 
                        on each loan shall commence not later than 1 
                        year after the date on which the loan was 
                        awarded, and each loan shall be fully amortized 
                        not later than 10 years after such date.
                            ``(iii) The State loan fund shall be 
                        credited with all payments of principal and 
                        interest on each loan awarded from the fund.
                    ``(B) To guarantee, or purchase insurance for, a 
                local obligation (all of the proceeds of which finance 
                a project eligible for assistance under this 
                subsection) if the guarantee or purchase would improve 
                credit market access or reduce the interest rate 
                applicable to the obligation involved.
                    ``(C) As a source of revenue or security for the 
                payment of principal and interest on revenue or general 
                obligation bonds issued by the State if the proceeds of 
                the sale of the bonds will be deposited into the State 
                loan fund.
                    ``(D) To earn interest on the amounts deposited 
                into the State loan fund.
            ``(7) Administration of state loan funds.--
                    ``(A) Combined financial administration.--A State 
                may (as a convenience and to avoid unnecessary 
                administrative costs) combine, in accordance with State 
                law, the financial administration of a State loan fund 
                established under this subsection with the financial 
                administration of any other revolving fund established 
                by the State if not otherwise prohibited by the law 
                under which the State loan fund was established.
                    ``(B) Cost of administering fund.--Each State may 
                annually use not to exceed 4 percent of the funds 
                provided to the State under a grant under this 
                subsection to pay the reasonable costs of the 
                administration of the programs under this section, 
                including the recovery of reasonable costs expended to 
                establish a State loan fund which are incurred after 
                the date of enactment of this title.
                    ``(C) Guidance and regulations.--The Secretary 
                shall publish guidance and promulgate regulations as 
                may be necessary to carry out the provisions of this 
                subsection, including--
                            ``(i) provisions to ensure that each State 
                        commits and expends funds allotted to the State 
                        under this subsection as efficiently as 
                        possible in accordance with this title and 
                        applicable State laws; and
                            ``(ii) guidance to prevent waste, fraud, 
                        and abuse.
                    ``(D) Private sector contributions.--
                            ``(i) In general.--A State loan fund 
                        established under this subsection may accept 
                        contributions from private sector entities, 
                        except that such entities may not specify the 
                        recipient or recipients of any loan issued 
                        under this subsection.
                            ``(ii) Availability of information.--A 
                        State shall make publicly available the 
                        identity of, and amount contributed by, any 
                        private sector entity under clause (i) and may 
                        issue letters of commendation or make other 
                        awards (that have no financial value) to any 
                        such entity.
            ``(8) Matching requirements.--
                    ``(A) In general.--The Secretary may not make a 
                grant under paragraph (1) to a State unless the State 
                agrees to make available (directly or through donations 
                from public or private entities) non-Federal 
                contributions in cash toward the costs of the State 
                program to be implemented under the grant in an amount 
                equal to not less than $1 for each $1 of Federal funds 
                provided under the grant.
                    ``(B) Determination of amount of non-federal 
                contribution.--In determining the amount of non-Federal 
                contributions that a State has provided pursuant to 
                subparagraph (A), the Secretary may not include any 
                amounts provided to the State by the Federal 
                Government.
            ``(9) Preference in awarding grants.--The Secretary may 
        give a preference in awarding grants under this subsection to 
        States that adopt value-based purchasing programs to improve 
        health care quality.
            ``(10) Reports.--The Secretary shall annually submit to the 
        Committee on Health, Education, Labor, and Pensions and the 
        Committee on Finance of the Senate, and the Committee on Energy 
        and Commerce and the Committee on Ways and Means of the House 
        of Representatives, a report summarizing the reports received 
        by the Secretary from each State that receives a grant under 
        this subsection.
    ``(c) Competitive Grants for the Implementation of Regional or 
Local Health Information Technology Plans.--
            ``(1) In general.--The Secretary may award competitive 
        grants to eligible entities to implement regional or local 
        health information plans to improve health care quality and 
        efficiency through the electronic exchange of health 
        information pursuant to the standards, implementation 
        specifications and certification criteria, and other 
        requirements adopted by the Secretary under section 3010.
            ``(2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1) an entity shall--
                    ``(A) demonstrate financial need to the Secretary;
                    ``(B) demonstrate that one of its principal 
                missions or purposes is to use information technology 
                to improve health care quality and efficiency;
                    ``(C) adopt bylaws, memoranda of understanding, or 
                other charter documents that demonstrate that the 
                governance structure and decisionmaking processes of 
                such entity allow for participation on an ongoing basis 
                by multiple stakeholders within a community, 
                including--
                            ``(i) health care providers (including 
                        health care providers that provide services to 
                        low income and underserved populations);
                            ``(ii) pharmacists or pharmacies;
                            ``(iii) health plans;
                            ``(iv) health centers (as defined in 
                        section 330(b)) and federally qualified health 
                        centers (as defined in section 1861(aa)(4) of 
                        the Social Security Act) and rural health 
                        clinics (as defined in section 1861(aa) of the 
                        Social Security Act), if such centers or 
                        clinics are present in the community served by 
                        the entity;
                            ``(v) patient or consumer organizations;
                            ``(vi) organizations dedicated to improving 
                        the health of vulnerable populations;
                            ``(vii) employers;
                            ``(viii) State or local health departments; 
                        and
                            ``(ix) any other health care providers or 
                        other entities, as determined appropriate by 
                        the Secretary;
                    ``(D) demonstrate the participation, to the extent 
                practicable, of stakeholders in the electronic exchange 
                of health information within the local or regional plan 
                pursuant to subparagraph (C);
                    ``(E) adopt nondiscrimination and conflict of 
                interest policies that demonstrate a commitment to 
                open, fair, and nondiscriminatory participation in the 
                health information plan by all stakeholders;
                    ``(F) adopt the standards adopted by the Secretary 
                under section 3005;
                    ``(G) require that health care providers receiving 
                such grants--
                            ``(i) implement the measures adopted under 
                        section 3010 and report to the Secretary on 
                        such measures; and
                            ``(ii) take into account the input of 
                        employees and staff who are directly involved 
                        in patient care of such health care providers 
                        in the design, implementation, and use of 
                        health information technology systems;
                    ``(H) agree to notify individuals if their 
                individually identifiable health information is 
                wrongfully disclosed;
                    ``(I) facilitate the electronic exchange of health 
                information within the local or regional area and among 
                local and regional areas;
                    ``(J) prepare and submit to the Secretary an 
                application in accordance with paragraph (3);
                    ``(K) agree to provide matching funds in accordance 
                with paragraph (5); and
                    ``(L) reduce barriers to the implementation of 
                health information technology by providers.
            ``(3) Application.--
                    ``(A) In general.--To be eligible to receive a 
                grant under paragraph (1), an entity shall submit to 
                the Secretary an application at such time, in such 
                manner, and containing such information as the 
                Secretary may require.
                    ``(B) Required information.--At a minimum, an 
                application submitted under this paragraph shall 
                include--
                            ``(i) clearly identified short-term and 
                        long-term objectives of the regional or local 
                        health information plan;
                            ``(ii) a technology plan that complies with 
                        the standards, implementation specifications, 
                        and certification criteria adopted under 
                        section 3003(c)(6) and that includes a 
                        descriptive and reasoned estimate of costs of 
                        the hardware, software, training, and 
                        consulting services necessary to implement the 
                        regional or local health information plan;
                            ``(iii) a strategy that includes 
                        initiatives to improve health care quality and 
                        efficiency, including the use and reporting of 
                        health care quality measures adopted under 
                        section 3010;
                            ``(iv) a plan that describes provisions to 
                        encourage the implementation of the electronic 
                        exchange of health information by all health 
                        care providers participating in the health 
                        information plan;
                            ``(v) a plan to ensure the privacy and 
                        security of individually identifiable health 
                        information that is consistent with Federal and 
                        State law;
                            ``(vi) a governance plan that defines the 
                        manner in which the stakeholders shall jointly 
                        make policy and operational decisions on an 
                        ongoing basis;
                            ``(vii) a financial or business plan that 
                        describes--
                                    ``(I) the sustainability of the 
                                plan;
                                    ``(II) the financial costs and 
                                benefits of the plan; and
                                    ``(III) the entities to which such 
                                costs and benefits will accrue;
                            ``(viii) a description of whether the State 
                        in which the entity resides has received a 
                        grant under section 319D, alone or as a part of 
                        a consortium, and if the State has received 
                        such a grant, how the entity will coordinate 
                        the activities funded under such section 319D 
                        with the system under this section; and
                            ``(ix) in the case of an applicant entity 
                        that is unable to demonstrate the participation 
                        of all stakeholders pursuant to paragraph 
                        (2)(C), the justification from the entity for 
                        any such nonparticipation.
            ``(4) Use of funds.--Amounts received under a grant under 
        paragraph (1) shall be used to establish and implement a 
        regional or local health information plan in accordance with 
        this subsection.
            ``(5) Matching requirement.--
                    ``(A) In general.--The Secretary may not make a 
                grant under this subsection to an entity unless the 
                entity agrees that, with respect to the costs to be 
                incurred by the entity in carrying out the 
                infrastructure program for which the grant was awarded, 
                the entity will make available (directly or through 
                donations from public or private entities) non-Federal 
                contributions toward such costs in an amount equal to 
                not less than 50 percent of such costs ($1 for each $2 
                of Federal funds provided under the grant).
                    ``(B) Determination of amount contributed.--Non-
                Federal contributions required under subparagraph (A) 
                may be in cash or in kind, fairly evaluated, including 
                equipment, technology, or services. Amounts provided by 
                the Federal Government, or services assisted or 
                subsidized to any significant extent by the Federal 
                Government, may not be included in determining the 
                amount of such non-Federal contributions.
    ``(d) Reports.--Not later than 1 year after the date on which the 
first grant is awarded under this section, and annually thereafter 
during the grant period, an entity that receives a grant under this 
section shall submit to the Secretary a report on the activities 
carried out under the grant involved. Each such report shall include--
            ``(1) a description of the financial costs and benefits of 
        the project involved and of the entities to which such costs 
        and benefits accrue;
            ``(2) an analysis of the impact of the project on health 
        care quality and safety;
            ``(3) a description of any reduction in duplicative or 
        unnecessary care as a result of the project involved; and
            ``(4) other information as required by the Secretary.
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--For the purpose of carrying out this 
        section, there is authorized to be appropriated $139,000,000 
        for fiscal year 2008 and $139,000,000 for fiscal year 2009.
            ``(2) Availability.--Amounts appropriated under paragraph 
        (1) shall remain available through fiscal year 2012.

``SEC. 3009. DEMONSTRATION PROGRAM TO INTEGRATE INFORMATION TECHNOLOGY 
              INTO CLINICAL EDUCATION.

    ``(a) In General.--The Secretary may award grants to eligible 
entities or consortia under this section to carry out demonstration 
projects to develop academic curricula integrating qualified health 
information technology systems in the clinical education of health 
professionals or analyze clinical data sets to discover quality 
measures. Such awards shall be made on a competitive basis and pursuant 
to peer review.
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity or consortium shall--
            ``(1) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary may require;
            ``(2) be or include--
                    ``(A) a health professions school;
                    ``(B) a school of nursing; or
                    ``(C) an institution with a graduate medical 
                education program;
            ``(3) provide for the collection of data regarding the 
        effectiveness of the demonstration project to be funded under 
        the grant in improving the safety of patients and the 
        efficiency of health care delivery; and
            ``(4) provide matching funds in accordance with subsection 
        (d).
    ``(c) Use of Funds.--
            ``(1) In general.--With respect to a grant under subsection 
        (a), an eligible entity or consortium shall use amounts 
        received under the grant in collaboration with 2 or more 
        disciplines.
            ``(2) Limitation.--An eligible entity or consortium shall 
        not award a grant under subsection (a) to purchase hardware, 
        software, or services.
    ``(d) Matching Funds.--
            ``(1) In general.--The Secretary may award a grant to an 
        entity under or consortium this section only if the entity of 
        consortium agrees to make available non-Federal contributions 
        toward the costs of the program to be funded under the grant in 
        an amount that is not less than $1 for each $2 of Federal funds 
        provided under the grant.
            ``(2) Determination of amount contributed.--Non-Federal 
        contributions under paragraph (1) may be in cash or in kind, 
        fairly evaluated, including equipment or services. Amounts 
        provided by the Federal Government, or services assisted or 
        subsidized to any significant extent by the Federal Government, 
        may not be included in determining the amount of such 
        contributions.
    ``(e) Evaluation.--The Secretary shall take such action as may be 
necessary to evaluate the projects funded under this section and 
publish, make available, and disseminate the results of such 
evaluations on as wide a basis as is practicable.
    ``(f) Reports.--Not later than 1 year after the date of enactment 
of this title, and annually thereafter, the Secretary shall submit to 
the Committee on Health, Education, Labor, and Pensions and the 
Committee on Finance of the Senate, and the Committee on Energy and 
Commerce and the Committee on Ways and Means of the House of 
Representatives a report that--
            ``(1) describes the specific projects established under 
        this section; and
            ``(2) contains recommendations for Congress based on the 
        evaluation conducted under subsection (e).
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $2,000,000 for each of fiscal 
years 2008 and 2009.
    ``(h) Sunset.--This provisions of this section shall not apply 
after September 30, 2012.''.

            Subpart C--Improving the Quality of Health Care

SEC. 311. CONSENSUS PROCESS FOR THE ADOPTION OF QUALITY MEASURES FOR 
              USE IN THE NATIONWIDE INTEROPERABLE HEALTH INFORMATION 
              TECHNOLOGY INFRASTRUCTURE.

    Title XXX of the Public Health Service Act, as amended by section 
305, is further amended by adding at the end the following:

``SEC. 3010. FOSTERING DEVELOPMENT AND USE OF HEALTH CARE QUALITY 
              MEASURES.

    ``(a) In General.--The Secretary shall provide for the development 
and use of health care quality measures (referred to in this title as 
`quality measures') for the purpose of measuring the quality and 
efficiency of health care that patients receive.
    ``(b) Designation of, and Arrangement With, Organization.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of this title, the Secretary shall designate, and 
        have in effect an arrangement with, a single organization that 
        meets the requirements of subsection (c) under which such 
        organization shall promote the development of quality measures 
        and provide the Secretary with advice and recommendations on 
        the key elements and priorities of a national system for 
        healthcare performance measurement.
            ``(2) Responsibilities.--The responsibilities to be 
        performed by the organization designated under paragraph (1) 
        (in this title referred to as the `designated organization') 
        shall include--
                    ``(A) establishing and managing an integrated 
                national strategy and process for setting priorities 
                and goals in establishing quality measures;
                    ``(B) coordinating and harmonizing the development 
                and testing of such measures;
                    ``(C) establishing standards for the development 
                and testing of such measures;
                    ``(D) endorsing national consensus quality 
                measures;
                    ``(E) recommending, in collaboration with multi-
                stakeholder groups, quality measures to the Secretary 
                for adoption and use;
                    ``(F) promoting the development and use of 
                electronic health records that contain the 
                functionality for automated collection, aggregation, 
                and transmission of performance measurement 
                information; and
                    ``(G) providing recommendations and advice to the 
                Partnership regarding the integration of quality 
                measures into the certification process outlined under 
                section 3003 and the Community regarding national 
                policies outlined under section 3004.
    ``(c) Requirements Described.--The requirements described in this 
subsection are the following:
            ``(1) Private entity.--The organization shall be a private 
        nonprofit entity that is governed by a board of directors and 
        an individual who is designated as president and chief 
        executive officer.
            ``(2) Board membership.--The members of the board of 
        directors of the entity shall include representatives of--
                    ``(A) health care providers or groups representing 
                providers;
                    ``(B) health plans or groups representing health 
                plans;
                    ``(C) patients or consumers enrolled in such plans 
                or groups representing individuals enrolled in such 
                plans;
                    ``(D) health care purchasers and employers or 
                groups representing purchasers or employers; and
                    ``(E) organizations that develop health information 
                technology standards and new health information 
                technology.
            ``(3) Other membership requirements.--The membership of the 
        board of directors of the entity shall be representative of 
        individuals with experience with--
                    ``(A) urban health care issues;
                    ``(B) safety net health care issues;
                    ``(C) rural or frontier health care issues;
                    ``(D) quality and safety issues;
                    ``(E) State or local health programs;
                    ``(F) individuals or entities skilled in the 
                conduct and interpretation of biomedical, health 
                services, and health economics research and with 
                expertise in outcomes and effectiveness research and 
                technology assessment; and
                    ``(G) individuals or entities involved in the 
                development and establishment of standards and 
                certification for health information technology systems 
                and clinical data.
            ``(4) Open and transparent.--With respect to matters 
        related to the arrangement with the Secretary under subsection 
        (a)(1), the organization shall conduct its business in an open 
        and transparent manner, and provide the opportunity for public 
        comment and ensure a balance among disparate stakeholders, so 
        that no member organization unduly influences the work of the 
        organization.
            ``(5) Voluntary consensus standards setting 
        organizations.--The organization shall operate as a voluntary 
        consensus standards setting organization as defined for 
        purposes of section 12(d) of the National Technology Transfer 
        and Advancement Act of 1995 (Public Law 104-113) and Office of 
        Management and Budget Revised Circular A-119 (published in the 
        Federal Register on February 10, 1998).
            ``(6) Participation.--If the organization requires a fee 
        for membership, the organization shall ensure that such fee is 
        not a substantial barrier to participation in the entity's 
        activities related to the arrangement with the Secretary.
    ``(d) Requirements for Measures.--The quality measures developed 
under this title shall comply with the following:
            ``(1) Measures.--The designated organization, in promoting 
        the development of quality measures under this title, shall 
        ensure that such measures--
                    ``(A) are evidence-based, reliable, and valid;
                    ``(B) include--
                            ``(i) measures of clinical processes and 
                        outcomes, patient experience, efficiency, and 
                        equity; and
                            ``(ii) measures to assess effectiveness, 
                        timeliness, patient self-management, patient 
                        centeredness, and safety; and
                    ``(C) include measures of underuse and overuse.
            ``(2) Priorities.--In carrying out its responsibilities 
        under this section, the designated organization shall ensure 
        that priority is given to--
                    ``(A) measures with the greatest potential impact 
                for improving the performance and efficiency of care;
                    ``(B) measures that may be rapidly implemented by 
                group health plans, health insurance issuers, 
                physicians, hospitals, nursing homes, long-term care 
                providers, and other providers;
                    ``(C) measures which may inform health care 
                decisions made by consumers and patients;
                    ``(D) measures that apply to multiple services 
                furnished by different providers during an episode of 
                care;
                    ``(E) measures that can be integrated into 
                certification process described in section 3003; and
                    ``(F) measures that may be integrated into the 
                decision support function of qualified health 
                information technology as defined by this title.
            ``(3) Risk adjustment.--The designated organization, in 
        consultation with performance measure developers and other 
        stakeholders, shall establish procedures to ensure that quality 
        measures take into account differences in patient health 
        status, patient characteristics, and geographic location, as 
        appropriate.
            ``(4) Maintenance.--The designated organization, in 
        consultation with owners and developers of quality measures, 
        shall require the owners or developers of quality measures to 
        update and enhance such measures, including the development of 
        more accurate and precise specifications, and retire existing 
        outdated measures. Such updating shall occur not more often 
        than once during each 12-month period, except in the case of 
        emergency circumstances requiring a more immediate update to a 
        measure.
    ``(e) Grants for Performance Measure Development.--The Secretary, 
acting through the Agency for Healthcare Research and Quality, may 
award grants, in amounts not to exceed $50,000 each, to organizations 
to support the development and testing of quality measures that meet 
the standards established by the designated organization.

``SEC. 3011. ADOPTION AND USE OF QUALITY MEASURES; REPORTING.

    ``(a) In General.--For purposes of carrying out activities 
authorized or required by this title to ensure the use of quality 
measures and to foster uniformity between health care quality measures 
utilized by private entities, the Secretary shall--
            ``(1) select quality measures for adoption and use, from 
        quality measures recommended by multi-stakeholder groups and 
        endorsed by the designated organization; and
            ``(2) ensure that standards adopted under section 3005 
        integrate the quality measures endorsed, adopted, and utilized 
        under this section.
    ``(b) Relationship With Programs Under the Social Security Act.--
The Secretary shall ensure that the quality measures adopted under this 
section--
            ``(1) complement quality measures developed by the 
        Secretary under programs administered by the Secretary under 
        the Social Security Act, including programs under titles XVIII, 
        XIX, and XXI of such Act; and
            ``(2) do not conflict with the needs and priorities of the 
        programs under titles XVIII, XIX, and XXI of such Act, as set 
        forth by the Administrator of the Centers for Medicare & 
        Medicaid Services.
    ``(c) Reporting.--The Secretary shall implement procedures, 
consistent with generally accepted standards, to enable the Department 
of Health and Human Services to accept the electronic submission of 
data for purposes of performance measurement, including at the provider 
level, using the quality measures developed, endorsed, and adopted 
pursuant to this title.
    ``(d) Dissemination of Information.--In order to make comparative 
performance information available to health care consumers, health 
professionals, public health officials, oversight organizations, 
researchers, and other appropriate individuals and entities, after 
consultation with multi-stakeholder groups, the Secretary shall 
promulgate regulations to provide for the dissemination, aggregation, 
and analysis of quality measures collected pursuant to this title.''.

                    Subpart D--Privacy and Security

SEC. 321. PRIVACY AND SECURITY.

    Title XXX of the Public Health Service Act, as amended by section 
311, is further amended by adding at the end the following:

``SEC. 3013. ENSURING PRIVACY AND SECURITY.

    ``(a) Privacy Protections Apply to Health Information Electronic 
Databases.--An operator of a health information electronic database 
shall be deemed to be a `covered entity' for purposes of sections 1171 
through 1179 of the Social Security Act and the regulations promulgated 
under section 264(c) of the Health Insurance Portability and 
Accountability Act of 1996 (42 U.S.C. 1320d-2 note) (referred to in 
this section as the `HIPAA privacy regulations'.
    ``(b) Health Information Electronic Database Defined.--In this 
section, the term `operator of a health information electronic 
database' means an entity that--
            ``(1) is constituted, organized, or chartered for the 
        primary purpose of maintaining or transmitting protected health 
        information in a designated record set or sets;
            ``(2) receives valuable consideration for maintaining or 
        transmitting protected health information in a designated 
        record set or sets; and
            ``(3) is not a health plan, healthcare clearinghouse, or 
        healthcare provider who transmits any health information in 
        electronic form in connection with a transaction referred to in 
        section 1173(a)(1) of the Social Security Act.
    ``(c) Right of Individuals To Inspect Their Medical Records 
Maintained in Electronic Format.--To the extent provided for under the 
HIPAA privacy regulations with respect to protected health information, 
an individual shall have a right of access to inspect and obtain a copy 
of protected health information about the individual stored in 
electronic format.
    ``(d) Rights of Individuals Who Are Victims of Medical Fraud.--To 
the extent provided for under the HIPAA privacy regulations and under 
the conditions specified in such regulations, with respect to protected 
health information, an individual who is a victim of medical fraud or 
who believes that there is an error in their protected health 
information stored in an electronic format shall have the right--
            ``(1) to have access to inspect and obtain a copy of 
        protected health information about the individual, including 
        the information fraudulently entered, in a designated record 
        set; and
            ``(2) to have a covered entity amend protected health 
        information or a record about the individual, including 
        information fraudulently entered, in a designated electronic 
        record set for as long as the protected health information is 
        maintained in the designated electronic record set to ensure 
        that fraudulent and inaccurate health information is not shared 
        or re-reported.
    ``(e) Rule of Construction.--Nothing in this section shall be 
construed to supercede or otherwise limit the provisions of any 
contract that provides for the application of privacy protections that 
are greater than the privacy protections provided for under the 
regulations promulgated under section 264 of the Health Insurance 
Portability and Accountability Act of 1996.''.

                  Subpart E--Miscellaneous Provisions

SEC. 331. GAO STUDY.

    Not later than 12 months after the date of enactment of this Act, 
the Comptroller General of the United States shall submit to Congress a 
report on the circumstances in which it is necessary and workable to 
require health plans (as defined in section 1171 of the Social Security 
Act (42 U.S.C. 1320d)), health care clearinghouses (as defined in such 
section 1171), and health care providers (as defined in such section 
1171) who transmit health information in electronic form, to notify 
individuals if their individually identifiable health information (as 
defined in such section 1171) is wrongfully disclosed.

SEC. 332. HEALTH INFORMATION TECHNOLOGY RESOURCE CENTER.

    Section 914 of the Public Health Service Act (42 U.S.C. 299b-3) is 
amended by adding at the end the following:
    ``(d) Health Information Technology Resource Center.--
            ``(1) In general.--The Secretary, acting through the 
        Director, shall develop a Health Information Technology 
        Resource Center (referred to in this subsection as the 
        `Center') to provide technical assistance and develop best 
        practices to support and accelerate efforts to adopt, 
        implement, and effectively use interoperable health information 
        technology in compliance with sections 3003 and 3010.
            ``(2) Purposes.--The purposes of the Center are to--
                    ``(A) provide a forum for the exchange of knowledge 
                and experience;
                    ``(B) accelerate the transfer of lessons learned 
                from existing public and private sector initiatives, 
                including those currently receiving Federal financial 
                support;
                    ``(C) assemble, analyze, and widely disseminate 
                evidence and experience related to the adoption, 
                implementation, and effective use of interoperable 
                health information technology;
                    ``(D) provide for the establishment of regional and 
                local health information networks to facilitate the 
                development of interoperability across health care 
                settings and improve the quality of health care;
                    ``(E) provide for the development of solutions to 
                barriers to the exchange of electronic health 
                information; and
                    ``(F) conduct other activities identified by the 
                States, local, or regional health information networks, 
                or health care stakeholders as a focus for developing 
                and sharing best practices.
            ``(3) Support for activities.--To provide support for the 
        activities of the Center, the Director shall modify the 
        requirements, if necessary, that apply to the National Resource 
        Center for Health Information Technology to provide the 
        necessary infrastructure to support the duties and activities 
        of the Center and facilitate information exchange across the 
        public and private sectors.
            ``(4) Rule of construction.--Nothing in this subsection 
        shall be construed to require the duplication of Federal 
        efforts with respect to the establishment of the Center, 
        regardless of whether such efforts were carried out prior to or 
        after the enactment of this subsection.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated, such sums as may be necessary for each of fiscal years 
2008 and 2009 to carry out this section.''.

SEC. 333. FACILITATING THE PROVISION OF TELEHEALTH SERVICES ACROSS 
              STATE LINES.

    Section 330L of the Public Health Service Act (42 U.S.C. 254c-18) 
is amended to read as follows:

``SEC. 330L. TELEMEDICINE; INCENTIVE GRANTS REGARDING COORDINATION 
              AMONG STATES.

    ``(a) Facilitating the Provision of Telehealth Services Across 
State Lines.--The Secretary may make grants to States that have adopted 
regional State reciprocity agreements for practitioner licensure, in 
order to expedite the provision of telehealth services across State 
lines.
    ``(b) Authorization of Appropriations.--For the purpose of carrying 
out subsection (a), there are authorized to be appropriated such sums 
as may be necessary for each of the fiscal years 2008 and 2009.''.

     PART II--MAKING HEALTH CARE MORE ACCESSIBLE FOR ALL AMERICANS

SEC. 341. REAUTHORIZATION OF CERTAIN TELEHEALTH PROGRAMS.

    (a) Telehealth Network and Telehealth Resource Centers Grant 
Programs.--Section 330I(s) of the Public Health Service Act (42 U.S.C. 
254c-14(s)) is amended--
            (1) in paragraph (1), by striking ``2006'' and inserting 
        ``2012''; and
            (2) in paragraph (2), by striking ``2006'' and inserting 
        ``2012''.
    (b) Rural Emergency Medical Service Training and Equipment 
Assistance Program.--Section 330J(g)(1) of the Public Health Service 
Act (42 U.S.C. 254c-15(g)(1)) is amended by striking ``2006'' and 
inserting ``2012''.
    (c) Mental Health Services Delivered Via Telehealth.--Section 
330K(g) of the Public Health Service Act (42 U.S.C. 254c-16(g)) is 
amended by striking ``2006'' and inserting ``2012''.

SEC. 342. QUALITY IMPROVEMENT ACTIVITIES.

    Section 1154(a) of the Social Security Act (42 U.S.C. 1320c-3(a)) 
is amended by adding at the end the following new paragraph:
            ``(18) The organization shall offer quality improvement 
        assistance to providers, practitioners, Medicare Advantage 
        organizations offering Medicare Advantage plans under part C of 
        title XVIII, and prescription drug sponsors offering 
        prescription drug plans under part D of such title, including 
        the following:
                    ``(A) Education on quality improvement initiatives, 
                strategies, and techniques.
                    ``(B) Instruction on how to collect, submit, 
                aggregate, and interpret data on measures that may be 
                used for quality improvement, public reporting, and 
                payment.
                    ``(C) Technical assistance for providers and 
                practitioners in beneficiary education to facilitate 
                patient self-management.
                    ``(D) Guidance on redesigning clinical processes, 
                including the adoption and effective use of health 
                information technology, to improve the coordination, 
                effectiveness, and safety of care.
                    ``(E) Assistance in improving the quality of care 
                delivered in rural and frontier areas, including 
                efforts to prevent or address any inconsistencies or 
                delays in the rate of adoption of health information 
                technology and in the effective use of such technology 
                among entities that furnish such services in rural 
                areas.
                    ``(F) Assistance in improving coordination of care 
                as patients transition between providers and 
                practitioners, including developing the capacity to 
                securely exchange electronic health information and 
                helping providers and practitioners to effectively use 
                secure electronic health information to improve 
                quality.''.

SEC. 343. SENSE OF THE SENATE REGARDING PHYSICIAN PAYMENTS UNDER 
              MEDICARE.

    It is the sense of the Senate that modifications to the Medicare 
fee schedule for physicians' services under section 1848 of the Social 
Security Act (42 U.S.C. 1395w-4) should include provisions based on the 
reporting of quality measures pursuant to those adopted in section 3010 
of the Public Health Service Act (as added by section 305) and the 
overall improvement of health care quality through the use of the 
electronic exchange of health information pursuant to the standards 
adopted under section 3003 of such Act (as added by section 301.

         Subtitle B--Increasing Access to Physicians and Nurses

SEC. 351. REAUTHORIZATION OF PROGRAMS AND MISCELLANEOUS AMENDMENTS.

    (a) Health Professions Education Programs.--Part F of title VII of 
the Public Health Service Act (42 U.S.C. 295j et seq.) is amended by 
adding at the end the following:

``SEC. 799C. GENERAL AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--Notwithstanding any other provision of this 
title, beginning with fiscal year 2008, there is authorized to be 
appropriated to carry out this title, such sums as may be necessary for 
each of fiscal years 2008 through 2012.
    ``(b) References.--Any reference in this title to a provision of 
this title providing for an authorization of appropriation for a fiscal 
year beginning with fiscal year 2008, shall be deemed to be a reference 
to subsection (a).''.
    (b) Nursing Workforce Development Programs.--Part A of title VIII 
of the Public Health Service Act (42 U.S.C. 296 et seq.) is amended by 
adding at the end the following:

``SEC. 809. GENERAL AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--Notwithstanding any other provision of this 
title, beginning with fiscal year 2008, there is authorized to be 
appropriated to carry out this title, such sums as may be necessary for 
each of fiscal years 2008 through 2012.
    ``(b) References.--Any reference in this title to a provision of 
this title providing for an authorization of appropriation for a fiscal 
year beginning with fiscal year 2008, shall be deemed to be a reference 
to subsection (a).''.
    (c) Development of Metrics to Measure Effectiveness.--
            (1) Health professions programs.--Part F of title VII of 
        the Public Health Service Act (42 U.S.C. 295j et seq.), as 
        amended by subsection (a), is further amended by adding at the 
        end the following:

``SEC. 799D. DEVELOPMENT OF MEASURES OF EFFECTIVENESS.

    ``The Secretary shall develop and publish in the Federal Register 
measures of effectiveness for each of the programs carried out under 
this title. The Secretary shall use such measures to annually submit to 
the Committee on Health, Education, Labor, and Pension of the Senate 
and the Committee on Energy and Commerce of the House of 
Representatives a report concerning the effectiveness of such 
programs.''.
            (2) Nursing workforce development.--Part A of title VIII of 
        the Public Health Service Act (42 U.S.C. 296 et seq.), as 
        amended by subsection (b), is further amended by adding at the 
        end the following:

``SEC. 810. DEVELOPMENT OF MEASURES OF EFFECTIVENESS.

    ``The Secretary shall develop and publish in the Federal Register 
measures of effectiveness for each of the programs carried out under 
this title. The Secretary shall use such measures to annually submit to 
the Committee on Health, Education, Labor, and Pension of the Senate 
and the Committee on Energy and Commerce of the House of 
Representatives a report concerning the effectiveness of such 
programs.''.
    (d) Provision of Information to Students.--Section 726 of the 
Public Health Service Act (42 U.S.C. 292v) is amended by adding at the 
end the following:
    ``(c) Provision of Information to Incoming Students.--Each school 
shall provide to each student, at the time the school provides such 
student with a letter of acceptance to attend the school, a statement 
of the amount of the average aggregate amount of debt incurred by 
graduating students during their period of attendance at the school and 
the national average for such debt at all schools for the previous year 
(as determined by the Secretary).''.
    (e) Enhanced Competitiveness.--Section 738(b)(2) of the Public 
Health Service Act (42 U.S.C. 293b(b)(2)) is amended--
            (1) by striking ``that--'' and all that follows through 
        ``amounts'' in subparagraph (A), and inserting ``that 
        amounts'';
            (2) in subparagraph (A), by striking ``; and'' and 
        inserting a period; and
            (3) by striking subparagraph (B).

SEC. 352. NURSE WORKFORCE ENHANCEMENT.

    (a) Reauthorization of Practice and Retention Grant Program.--
Section 831(h) of the Public Health Service Act (42 U.S.C. 296p(h)) is 
amended by striking ``2003 through 2007'' and inserting ``2008 through 
2012''.
    (b) State Demonstration Projects To Provide Incentives for Nurses 
to Reenter the Workforce.--Part D of title VIII of the Public Health 
Service Act (42 U.S.C. 296p et seq.) is amended by adding at the end 
the following:

``SEC. 832. STATE DEMONSTRATION PROJECTS TO PROVIDE INCENTIVES FOR 
              NURSES TO REENTER THE WORKFORCE.

    ``(a) In General.--The Secretary shall award not to exceed 15 
grants to States for the conduct of demonstration projects to evaluate 
incentives to encourage nurses to reenter the nursing profession at 
positions in healthcare facilities. For purposes of projects under this 
section, a nurse shall be deemed to have reentered the workforce if 
such nurse is licensed and had not practiced nursing for the 3-year 
period prior to their return to the workforce under a project under 
this section.
    ``(b) Application.--To be eligible to receive a grant under 
subsection (a), a State shall submit to the Secretary an application at 
such time, in such manner, and containing such information as the 
Secretary may require, including--
            ``(1) a description of the activities to be conducted under 
        the grant, including--
                    ``(A) how retraining will be encouraged to update 
                skills;
                    ``(B) how license renewal will be encouraged;
                    ``(C) how loan repayment under programs under this 
                title will be monitored;
                    ``(D) how healthcare facilities with a critical 
                shortage of nurses will be identified and the shortage 
                will be alleviated by the program;
                    ``(E) how the performance of reentry nurses will be 
                monitored and evaluated; and
                    ``(F) how part-time positions will be created to 
                utilize nurses reentering the profession;
            ``(2) an assurance that the State will provide matching 
        funds in accordance with subsection (c);
            ``(3) an assurance that the State will conduct an 
        evaluation in accordance with subsection (d); and
            ``(4) any other assurances required by the Secretary.
    ``(c) Matching Requirement.--The Secretary may not make grants to a 
State under this section unless the State involved agrees, with respect 
to the costs of carrying out the program under the grant, to make 
available non-Federal contributions (in cash or in kind) toward such 
costs in an amount equal to not less than $1 for each $1 of Federal 
funds provided under the grant.
    ``(d) Evaluations.--A State that receives a grant under this 
section shall reserve 5 percent of the amount received under this grant 
to carry out activities to evaluate the project carried out under the 
grant. A State shall report to the Secretary the results of such 
evaluation, including the number of nurses reentering the profession in 
the State in years prior to the project and the number reentering such 
profession after the initiation of the project, and the number of such 
reentering nurses that serve in areas deemed underserved.
    ``(e) Amount and Length of Grants.--A grant under this section 
shall not exceed $2,000,000 for each fiscal year for up to 5 years. 
Grants may be extended for an additional 5-year period.
    ``(f) Definitions.--In this section:
            ``(1) Healthcare facility.--The term `healthcare facility' 
        means those facilities that regularly dispense healthcare, 
        including hospitals, public health departments, nursing homes, 
        community health centers, rural health clinics, and Indian 
        health service centers.
            ``(2) Nurse.--The term `nurse' includes Registered Nurses.
            ``(3) Position.--The term `position' means a full-time or 
        part-time position that includes teaching or delivery of health 
        care to patients.
    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.

SEC. 353. VISAS FOR REGISTERED NURSES.

    Paragraph (4) of section 212(m) of the Immigration and Nationality 
Act (8 U.S.C. 1182(m)) is amended in the matter preceding subparagraph 
(A) by striking ``500'' and inserting ``600''.

SEC. 354. MEDPAC STUDY AND REPORT ON THE IMPACT OF PAYMENT CAPS FOR IME 
              AND GME.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study--
            (1) to analyze the impact that the limitation on the number 
        of residents in allopathic and osteopathic medicine under 
        subsections (d)(5)(B)(v) and (h)(4)(F) of section 1886 of the 
        Social Security Act (42 U.S.C. 1395ww) has had with respect 
        to--
                    (A) the national supply of general practitioners 
                and specialty healthcare providers;
                    (B) the development of new teaching hospitals and 
                medical schools;
                    (C) the ability to support residents in 
                institutions (such as children's hospitals and advanced 
                practice nurse training facilities) that are not 
                eligible for payments for indirect medical education 
                costs and direct graduate medical education costs under 
                the Medicare program under title XVIII of the Social 
                Security Act (42 U.S.C. 1395 et seq.);
                    (D) the recruitment and retention of healthcare 
                providers in areas designated as health professional 
                shortage areas (as defined in section 332(a)(1) of the 
                Public Health Service Act) or in areas designated as 
                medically underserved areas, with particular focus on 
                States that do not have a medical school located in the 
                State; and
                    (E) the practice of sharing or purchasing residency 
                positions among institutions; and
            (2) to analyze the payment system for indirect medical 
        education costs and direct graduate medical education costs 
        under the Medicare program under such title with respect to--
                    (A) the accuracy of payments for indirect graduate 
                medical education costs under such system compared with 
                the actual costs incurred by teaching hospitals in 
                providing indirect medical education;
                    (B) the range and variance in reimbursable direct 
                graduate medical education costs and the cause of such 
                range and variance; and
                    (C) the commitment of healthcare payers, other than 
                the Medicare program under such title, to reimburse 
                teaching hospitals and other healthcare facilities with 
                qualified medical education components at increased 
                rates to offset graduate medical education costs that 
                are incurred in such settings and are not paid under 
                such program.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Medicare Payment Advisory Commission shall submit a 
report to the Secretary of Health and Human Services and to Congress 
containing the results of the study conducted under subsection (a), 
together with such recommendations regarding alternatives and revisions 
to the payment system for indirect medical education costs and direct 
graduate medical education costs under the Medicare program under title 
XVIII of the Social Security Act as the Medicare Payment Advisory 
Commission determines appropriate.

             Subtitle C--Increasing Access to Primary Care

SEC. 361. REAUTHORIZATION OF THE COMMUNITY HEALTH CENTER PROGRAMS.

    (a) In General.--Section 330(r) of the Public Health Service Act 
(42 U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting 
the following:
            ``(1) In general.--For the purpose of carrying out this 
        section, in addition to the amounts authorized to be 
        appropriated under subsection (d), there are authorized to be 
        appropriated--
                    ``(A) $2,048,670 for fiscal year 2008;
                    ``(B) $2,110,130 for fiscal year 2009;
                    ``(C) $2,173,434 for fiscal year 2010;
                    ``(D) $2,244,637 for fiscal year 2011; and
                    ``(E) $2,311,976 for fiscal year 2012.''.
    (b) Medical Residency Training Programs.--Section 330 of the Public 
Health Service Act (42 U.S.C. 254b) is amended--
            (1) by redesignating subsections (k) through (r) as 
        subsections (l) through (s), respectively; and
            (2) by inserting after subsection (j), the following:
    ``(k) Grants To Expand Medical Residency Training Programs at 
Community Health Centers.--
            ``(1) Program authorized.--The Secretary may make grants to 
        community health centers--
                    ``(A) to establish, at the centers, new or 
                alternative-campus accredited medical residency 
                training programs affiliated with a hospital or other 
                health care facility; or
                    ``(B) to fund new residency positions within 
                existing accredited medical residency training programs 
                at the centers and their affiliated partners.
            ``(2) Use of funds.--Amounts awarded under a grant under 
        this subsection shall be used to cover the costs of 
        establishing or expanding a medical residency training program 
        described in paragraph (1), including costs associated with--
                    ``(A) curriculum development;
                    ``(B) equipment acquisition;
                    ``(C) recruitment, training, and retention of 
                residents and faculty; and
                    ``(D) residency stipends.
            ``(3) Applications.--A community health center seeking a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Preference.--In selecting recipients for a grant 
        under this subsection, the Secretary shall give preference to 
        funding medical residency training programs focusing on primary 
        health care.
            ``(5) Definition.--In this subsection, the term 
        `accredited', as applied to a new or alternative-campus medical 
        residency training program, means a program that is accredited 
        by a recognized body or bodies approved for such purpose by the 
        Accreditation Council for Graduate Medical Education, except 
        that a new medical residency training program that, by reason 
        of an insufficient period of operation, is not eligible for 
        accreditation on or before the date of submission of an 
        application under paragraph (3) shall be deemed accredited if 
        the Accreditation Council for Graduate Medical Education finds, 
        after consultation with the appropriate accreditation body or 
        bodies, that there is reasonable assurance that the program 
        will meet the accreditation standards of such body or bodies 
        prior to the date of graduation of the first entering class in 
        that program.''.

SEC. 362. REAUTHORIZATION OF LOAN REPAYMENT PROGRAMS OF THE NATIONAL 
              HEALTH SERVICE CORPS.

    (a) In General.--Section 338H(a) of the Public Health Service Act 
(42 U.S.C. 254q(a)) is amended to read as follows:
    ``(a) Authorization of Appropriations.--For the purposes of 
carrying out this subpart, there are authorized to be appropriated 
$129,271,790 for fiscal year 2008, $133,150,393 for fiscal year 2009, 
$137,145,355 for fiscal year 2010, $141,260,166 for fiscal year 2011, 
and $145,498,421 for fiscal year 2012. Amounts appropriated under this 
subsection shall not be used to carry out section 338A.''.
    (b) State Loan Repayment Program.--Section 338I(i)(1) of the Public 
Health Service Act (42 U.S.C. 254q-1(i)(1)) is amended by striking 
``$12,000,000'' and all that follows through the end and inserting 
``$15,000,000 for each of fiscal years 2008 through 2012.''.

SEC. 363. CLARIFICATION OF AUTHORITY FOR CONVENIENT CARE CLINICS TO 
              PARTICIPATE IN MEDICAID AND SCHIP.

    (a) Medicaid.--
            (1) State plan amendment.--Section 1902(a)(23)(A) of the 
        Social Security Act (42 U.S.C. 1396a(a)(23)(A)) is amended--
                    (A) by inserting ``, and a convenient care clinic, 
                as defined in section 1905(y)'' after ``prepayment 
                basis''; and
                    (B) by inserting ``(other than with respect to the 
                ability of an individual to obtain medical assistance 
                from a convenient care clinic (as so defined))'' after 
                ``Guam''.
            (2) Definition.--Section 1905 of the Social Security Act 
        (42 U.S.C. 1396d) is amended by adding at the end the 
        following:
    ``(y) For purposes of this title, the term `convenient care clinic' 
means a health care facility located in a retail outlet that provides 
affordable and accessible, non-emergency health care (as defined by the 
Secretary) to consumers that is open 7 days a week, for extended hours 
(as so defined) and is primarily staffed by advanced practice nurses 
(including nurse practitioners), as well as by physician assistants or 
physicians, who have advanced education in providing quality health 
care for common episodic ailments (as so defined).''.
    (b) SCHIP.--Section 2107(e)(1) of the Social Security Act (42 
U.S.C. 1397gg(e)(1)) is amended--
            (1) by redesignating subparagraphs (B) through (D) as 
        subparagraphs (C) through (E), respectively; and
            (2) by inserting after subparagraph (A), the following:
                    ``(B) Section 1902(a)(23)(A) (but only with respect 
                to the ability of an individual to obtain assistance 
                from a convenient care clinic, as defined in section 
                1905(y)).''.
    (c) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by this section take effect on October 1, 2007.
            (2) Delay if state legislation required.--In the case of a 
        State plan under title XIX or XXI of the Social Security Act or 
        a waiver of such plan under section 1115 of such Act which the 
        Secretary of Health and Human Services determines requires 
        State legislation (other than legislation appropriating funds) 
        in order for the plan or waiver to meet the additional 
        requirements imposed by the amendments made by this section, 
        the State plan or waiver shall not be regarded as failing to 
        comply with the requirements of such title solely on the basis 
        of its failure to meet such additional requirements before the 
        first day of the first calendar quarter beginning after the 
        close of the first regular session of the State legislature 
        that begins after the date of the enactment of this Act. For 
        purposes of the previous sentence, in the case of a State that 
        has a 2-year legislative session, each year of such session 
        shall be deemed to be a separate regular session of the State 
        legislature.

                     Subtitle D--Rural Health Care

SEC. 371. REATHORIZATION OF RURAL HEALTH CARE PROGRAMS.

    Section 330A(j) of the Public Health Service Act (42 U.S.C. 
254c(j)) is amended by striking ``$40,000,000'' and all that follows 
and inserting ``$45,000,000 for each of fiscal years 2008 through 
2010.''.

                       Subtitle E--Long Term Care

SEC. 381. SENSE OF THE SENATE.

    It is the Sense of the Senate that all Americans should establish 
an advance directive.

SEC. 382. LIVING WILLS.

    The Secretary of Health and Human Service shall provide for the 
development of an Internet website (at www.livingwill.gov) to provide 
all Americans with access to information on advance directives and a 
website on which to store and access such directives.

SEC. 383. INCREASING SENIOR CHOICE AND ACCESS TO COMMUNITY-BASED LONG 
              TERM CARE.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.) is amended by adding at the end the following:

``SEC. 399R. INCREASING SENIOR CHOICE AND ACCESS TO COMMUNITY-BASED 
              LONG TERM CARE.

    ``(a) In General.--The Secretary may award one-time grants to 
eligible entities, as defined by the Secretary, for the conduct of 
demonstration projects to plan and develop the entity's transitions 
from institutional settings of skilled nursing care to residential or 
community-based settings of integrated skilled nursing care, which 
shall include--
            ``(1) the provision of housing units and staff meeting all 
        Federal and State qualifications and licensure requirements, as 
        applicable to the level of care to be provided;
            ``(2) eligibility and qualification assistance for 
        reimbursement under applicable State Medicaid programs;
            ``(3) the provision of a residential or home environment 
        which encourages independent living, privacy, and community 
        engagement;
            ``(4) encouraging a sense of community by having a number 
        of low-occupancy housing units arranged with similarly 
        structured housing units specializing in long term care;
            ``(5) an emphasis on building relationships between care 
        providers and clients by encouraging teams to remain with a set 
        of patients throughout their stay;
            ``(6) the direct involvement by the clients in developing 
        activities and structuring care needs; and
            ``(7) the formation of an integrated, self-managed clinical 
        and personal care team, including healthcare providers, 
        specialists and appropriate personnel, available to the 
        community as needed.
    ``(b) Application.--An eligible entity desiring a grant under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
reasonably require.
    ``(c) Report.--Not later than 3 years after the date on which the 
first grant is awarded under this section, the Secretary shall submit 
to the appropriate committees of Congress a report concerning the 
efficacy of the model carried out under this section in improving 
quality of life indicators, employee satisfaction, and clinical 
outcomes.
    ``(d) Priority.--In making grants under this section, the Secretary 
shall give priority to entities providing services to a medically 
undeserved area.
    ``(e) Authorization of Appropriations.--For the purpose of awarding 
grants under this section, there is authorized to be appropriated 
$5,000,000 for each of fiscal years 2008 through 2013.''.

             Subtitle F--Fair and Reliable Medical Justice

SEC. 391. SHORT TITLE.

    This subtitle may be cited as the ``Fair and Reliable Medical 
Justice Act''.

SEC. 392. PURPOSES.

    The purposes of this subtitle are--
            (1) to restore fairness and reliability to the medical 
        justice system by fostering alternatives to current medical 
        tort litigation that promote early disclosure of health care 
        errors and provide prompt, fair, and reasonable compensation to 
        patients who are injured by health care errors;
            (2) to promote patient safety through disclosure of health 
        care errors; and
            (3) to support and assist States in developing such 
        alternatives.

SEC. 393. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO 
              CURRENT MEDICAL TORT LITIGATION.

    Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.) is amended by adding at the end the following:

``SEC. 399R. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO 
              CURRENT MEDICAL TORT LITIGATION.

    ``(a) In General.--The Secretary is authorized to award 
demonstration grants to States for the development, implementation, and 
evaluation of alternatives to current tort litigation for resolving 
disputes over injuries allegedly caused by health care providers or 
health care organizations. In awarding such grants, the Secretary shall 
ensure the diversity of the alternatives so funded.
    ``(b) Duration.--The Secretary may award up to 10 grants under 
subsection (a) and each grant awarded under such subsection may not 
exceed a period of 5 years.
    ``(c) Conditions for Demonstration Grants.--
            ``(1) Requirements.--Each State desiring a grant under 
        subsection (a) shall--
                    ``(A) develop an alternative to current tort 
                litigation for resolving disputes over injuries 
                allegedly caused by health care providers or health 
                care organizations; and
                    ``(B) promote a reduction of health care errors by 
                allowing for patient safety data related to disputes 
                resolved under subparagraph (A) to be collected and 
                analyzed by organizations that engage in efforts to 
                improve patient safety and the quality of health care.
            ``(2) Alternative to current tort litigation.--Each State 
        desiring a grant under subsection (a) shall demonstrate how the 
        proposed alternative described in paragraph (1)(A)--
                    ``(A) makes the medical liability system more 
                reliable through prompt and fair resolution of 
                disputes;
                    ``(B) encourages the disclosure of health care 
                errors;
                    ``(C) enhances patient safety by detecting, 
                analyzing, and reducing medical errors and adverse 
                events;
                    ``(D) maintains access to liability insurance; and
                    ``(E) provides patients the opportunity to opt out 
                of or voluntarily withdraw from participating in the 
                alternative.
            ``(3) Sources of compensation.--Each State desiring a grant 
        under subsection (a) shall identify the sources from and 
        methods by which compensation would be paid for claims resolved 
        under the proposed alternative to current tort litigation, 
        which may include public or private funding sources, or a 
        combination of such sources. Funding methods shall to the 
        extent practicable provide financial incentives for activities 
        that improve patient safety.
            ``(4) Scope.--
                    ``(A) In general.--Each State desiring a grant 
                under subsection (a) may establish a scope of 
                jurisdiction (such as a designated geographic region, a 
                designated area of health care practice, or a 
                designated group of health care providers or health 
                care organizations) for the proposed alternative to 
                current tort litigation that is sufficient to evaluate 
                the effects of the alternative.
                    ``(B) Notification of patients.--A State proposing 
                a scope of jurisdiction under subparagraph (A) shall 
                demonstrate how patients would be notified that they 
                are receiving health care services that fall within 
                such scope, and that they may opt out of or voluntarily 
                withdraw from participating in the alternative.
            ``(5) Preference in awarding demonstration grants.--In 
        awarding grants under subsection (a), the Secretary shall give 
        preference to States--
                    ``(A) that have developed the proposed alternative 
                through substantive consultation with relevant 
                stakeholders, including patient advocates, health care 
                providers and health care organizations, attorneys with 
                expertise in representing patients and health care 
                providers, medical malpractice insurers, and patient 
                safety experts;
                    ``(B) that make proposals that are likely to 
                enhance patient safety by detecting, analyzing, and 
                reducing medical errors and adverse events; and
                    ``(C) in which State law at the time of the 
                application would not prohibit the adoption of an 
                alternative to current tort litigation.
    ``(d) Application.--
            ``(1) In general.--Each State desiring a grant under 
        subsection (a) shall submit to the Secretary an application, at 
        such time, in such manner, and containing such information as 
        the Secretary may require.
            ``(2) Review panel.--
                    ``(A) In general.--In reviewing applications under 
                paragraph (1), the Secretary shall consult with a 
                review panel composed of relevant experts appointed by 
                the Comptroller General.
                    ``(B) Composition.--
                            ``(i) Nominations.--The Comptroller General 
                        shall solicit nominations from the public for 
                        individuals to serve on the review panel.
                            ``(ii) Appointment.--The Comptroller 
                        General shall appoint, at least 14 but not more 
                        than 19, highly qualified and knowledgeable 
                        individuals to serve on the review panel and 
                        shall ensure that the following entities 
                        receive fair representation on such panel:
                                    ``(I) Patient advocates.
                                    ``(II) Health care providers and 
                                health care organizations.
                                    ``(III) Attorneys with expertise in 
                                representing patients and health care 
                                providers.
                                    ``(IV) Medical malpractice 
                                insurers.
                                    ``(V) State officials.
                                    ``(VI) Patient safety experts.
                    ``(C) Chairperson.--The Comptroller General, or an 
                individual within the Government Accountability Office 
                designated by the Comptroller General, shall be the 
                chairperson of the review panel.
                    ``(D) Availability of information.--The Comptroller 
                General shall make available to the review panel such 
                information, personnel, and administrative services and 
                assistance as the review panel may reasonably require 
                to carry out its duties.
                    ``(E) Information from agencies.--The review panel 
                may request directly from any department or agency of 
                the United States any information that such panel 
                considers necessary to carry out its duties. To the 
                extent consistent with applicable laws and regulations, 
                the head of such department or agency shall furnish the 
                requested information to the review panel.
    ``(e) Reports.--
            ``(1) By state.--Each State receiving a grant under 
        subsection (a) shall submit to the Secretary an annual report 
        evaluating the effectiveness of activities funded with grants 
        awarded under such subsection.
            ``(2) By secretary.--The Secretary shall submit to Congress 
        an annual compendium of the reports submitted under paragraph 
        (1).
    ``(f) Technical Assistance.--
            ``(1) In general.--The Secretary shall provide technical 
        assistance to the States applying for or awarded grants under 
        subsection (a).
            ``(2) Requirements.--Technical assistance under paragraph 
        (1) shall include--
                    ``(A) guidance on non-economic damages, including 
                the consideration of individual facts and circumstances 
                in determining appropriate payment, guidance on 
                identifying avoidable injuries, and guidance on 
                disclosure to patients of health care errors and 
                adverse events; and
                    ``(B) the development, in consultation with States, 
                of common definitions, formats, and data collection 
                infrastructure for States receiving grants under this 
                section to use in reporting to facilitate aggregation 
                and analysis of data both within and between States.
            ``(3) Use of common definitions, formats, and data 
        collection infrastructure.--States not receiving grants under 
        this section may also use the common definitions, formats, and 
        data collection infrastructure developed under paragraph 
        (2)(B).
    ``(g) Evaluation.--
            ``(1) In general.--The Secretary, in consultation with the 
        review panel established under subsection (d)(2), shall enter 
        into a contract with an appropriate research organization to 
        conduct an overall evaluation of the effectiveness of grants 
        awarded under subsection (a) and to annually prepare and submit 
        a report to Congress. Such an evaluation shall begin not later 
        than 18 months following the date of implementation of the 
        first program funded by a grant under subsection (a).
            ``(2) Contents.--The evaluation under paragraph (1) shall 
        include--
                    ``(A) an analysis of the effects of the grants 
                awarded under subsection (a) on the measures described 
                in paragraph (3);
                    ``(B) a comparison between and among the 
                alternatives approved under subsection (a) of the 
                measures described in paragraph (3); and
                    ``(C) a comparison between and among States 
                receiving grants approved under subsection (a) and 
                similar States not receiving such grants of the 
                measures described in paragraph (3).
            ``(3) Measures.--The evaluations under paragraph (2) shall 
        analyze and make comparisons on the basis of--
                    ``(A) the nature and number of disputes over 
                injuries allegedly caused by health care providers or 
                health care organizations;
                    ``(B) the nature and number of claims in which tort 
                litigation was pursued despite the existence of an 
                alternative under subsection (a);
                    ``(C) the disposition of disputes and claims 
                described in clauses (i) and (ii), including the length 
                of time and estimated costs to all parties;
                    ``(D) the medical liability environment;
                    ``(E) health care quality;
                    ``(F) patient safety in terms of detecting, 
                analyzing, and reducing medical errors and adverse 
                events; and
                    ``(G) patient and health care provider and 
                organization satisfaction with the alternative under 
                subsection (a) and with the medical liability 
                environment.
            ``(4) Funding.--The Secretary shall reserve 5 percent of 
        the amount appropriated in each fiscal year under subsection 
        (j) to carry out this subsection.
    ``(h) Option To Provide for Initial Planning Grants.--Of the funds 
appropriated pursuant to subsection (j), the Secretary may use a 
portion not to exceed $500,000 per State to provide planning grants to 
such States for the development of demonstration project applications 
meeting the criteria described in subsection (c). In selecting States 
to receive such planning grants, the Secretary shall give preference to 
those States in which State law at the time of the application would 
not prohibit the adoption of an alternative to current tort litigation.
    ``(i) Definitions.--In this section:
            ``(1) Health care services.--The term `health care 
        services' means any services provided by a health care 
        provider, or by any individual working under the supervision of 
        a health care provider, that relate to--
                    ``(A) the diagnosis, prevention, or treatment of 
                any human disease or impairment; or
                    ``(B) the assessment of the health of human beings.
            ``(2) Health care organization.--The term `health care 
        organization' means any individual or entity which is obligated 
        to provide, pay for, or administer health benefits under any 
        health plan.
            ``(3) Health care provider.--The term `health care 
        provider' means any individual or entity--
                    ``(A) licensed, registered, or certified under 
                Federal or State laws or regulations to provide health 
                care services; or
                    ``(B) required to be so licensed, registered, or 
                certified but that is exempted by other statute or 
                regulation.
            ``(4) Net economic loss.--The term `net economic loss' 
        means--
                    ``(A) reasonable expenses incurred for products, 
                services, and accommodations needed for health care, 
                training, and other remedial treatment and care of an 
                injured individual;
                    ``(B) reasonable and appropriate expenses for 
                rehabilitation treatment and occupational training;
                    ``(C) 100 percent of the loss of income from work 
                that an injured individual would have performed if not 
                injured, reduced by any income from substitute work 
                actually performed; and
                    ``(D) reasonable expenses incurred in obtaining 
                ordinary and necessary services to replace services an 
                injured individual would have performed for the benefit 
                of the individual or the family of such individual if 
                the individual had not been injured.
            ``(5) Non-economic damages.--The term `non-economic 
        damages' means losses for physical and emotional pain, 
        suffering, inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), injury to reputation, and all other non-pecuniary 
        losses of any kind or nature, to the extent permitted under 
        State law.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary. 
Amounts appropriated pursuant to this subsection shall remain available 
until expended.''.
                                 <all>
```