I 

111TH CONGRESS 

1ST SESSION H. R. 3200 

To provide affordable, quality health care for all Americans and reduce 

the growth in health care spending, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 14, 2009 

Mr. DINGELL (for himself, Mr. RANGEL, Mr. WAXMAN, Mr. GEORGE MILLER

of California, Mr. STARK, Mr. PALLONE, and Mr. ANDREWS) introduced 

the following bill; which was referred to the Committee on Energy and 

Commerce, and in addition to the Committees on Ways and Means, Education and Labor, Oversight and Government Reform, and the Budget, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL 

To provide affordable, quality health care for all Americans 

and reduce the growth in health care spending, and 

for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF DIVISIONS, TITLES, 

4 AND SUBTITLES. 

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

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


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1 (b) TABLE OF DIVISIONS, TITLES, AND SUB2 TITLES.—This Act is divided into divisions, titles, and 

3 subtitles as follows: 

DIVISION A—AFFORDABLE HEALTH CARE CHOICES 

TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 

HEALTH BENEFITS PLANS 

Subtitle A—General Standards 

Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Subtitle D—Additional Consumer Protections 

Subtitle E—Governance 

Subtitle F—Relation to Other Requirements; Miscellaneous 

Subtitle G—Early Investments 

TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 

PROVISIONS 

Subtitle A—Health Insurance Exchange 

Subtitle B—Public Health Insurance Option 

Subtitle C—Individual Affordability Credits 

TITLE III—SHARED RESPONSIBILITY 

Subtitle A—Individual Responsibility 

Subtitle B—Employer Responsibility 

TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 

Subtitle A—Shared Responsibility 

Subtitle B—Credit for Small Business Employee Health Coverage Expenses 

Subtitle C—Disclosures To Carry Out Health Insurance Exchange Subsidies 

Subtitle D—Other Revenue Provisions 

DIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS 

TITLE I—IMPROVING HEALTH CARE VALUE 

Subtitle A—Provisions Related to Medicare Part A 

Subtitle B—Provisions Related to Part B 

Subtitle C—Provisions Related to Medicare Parts A and B 


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Subtitle D—Medicare Advantage Reforms 

Subtitle E—Improvements to Medicare Part D 

Subtitle F—Medicare Rural Access Protections 

TITLE II—MEDICARE BENEFICIARY IMPROVEMENTS 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 

Subtitle B—Reducing Health Disparities 

Subtitle C—Miscellaneous Improvements 

TITLE III—PROMOTING PRIMARY CARE, MENTAL HEALTH 

SERVICES, AND COORDINATED CARE 

TITLE IV—QUALITY 

Subtitle A—Comparative Effectiveness Research 

Subtitle B—Nursing Home Transparency 

Subtitle C—Quality Measurements 

Subtitle D—Physician Payments Sunshine Provision 

Subtitle E—Public Reporting on Health Care-Associated Infections 

TITLE V—MEDICARE GRADUATE MEDICAL EDUCATION 

TITLE VI—PROGRAM INTEGRITY 

Subtitle A—Increased Funding To Fight Waste, Fraud, and Abuse 

Subtitle B—Enhanced Penalties for Fraud and Abuse 

Subtitle C—Enhanced Program and Provider Protections 

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

Abuse 

TITLE VII—MEDICAID AND CHIP 

Subtitle A—Medicaid and Health Reform 

Subtitle B—Prevention 

Subtitle C—Access 

Subtitle D—Coverage 

Subtitle E—Financing 

Subtitle F—Waste, Fraud, and Abuse 

Subtitle G—Puerto Rico and the Territories 

Subtitle H—Miscellaneous 


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TITLE VIII—REVENUE-RELATED PROVISIONS 

TITLE IX—MISCELLANEOUS PROVISIONS 

DIVISION C—PUBLIC HEALTH AND WORKFORCE DEVELOPMENT 

TITLE I—COMMUNITY HEALTH CENTERS 

TITLE II—WORKFORCE 

Subtitle A—Primary Care Workforce 

Subtitle B—Nursing Workforce 

Subtitle C—Public Health Workforce 

Subtitle D—Adapting Workforce to Evolving Health System Needs 

TITLE III—PREVENTION AND WELLNESS 

TITLE IV—QUALITY AND SURVEILLANCE 

TITLE V—OTHER PROVISIONS 

Subtitle A—Drug Discount for Rural and Other Hospitals 

Subtitle B—School-Based Health Clinics 

Subtitle C—National Medical Device Registry 

Subtitle D—Grants for Comprehensive Programs To Provide Education to 

Nurses and Create a Pipeline to Nursing 

Subtitle E—States Failing To Adhere to Certain Employment Obligations 

1 DIVISION A—AFFORDABLE 

2 HEALTH CARE CHOICES 

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

4 GENERAL DEFINITIONS. 

5 (a) PURPOSE.— 

6 (1) IN GENERAL.—The purpose of this division 

7 is to provide affordable, quality health care for all 

8 Americans and reduce the growth in health care 

9 spending. 

10 (2) BUILDING ON CURRENT SYSTEM.—This di11 vision achieves this purpose by building on what 


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1 works in today’s health care system, while repairing 

2 the aspects that are broken. 

3 (3) INSURANCE REFORMS.—This division— 

4 (A) enacts strong insurance market re5 forms; 

6 (B) creates a new Health Insurance Ex7 change, with a public health insurance option 

8 alongside private plans; 

9 (C) includes sliding scale affordability 

10 credits; and 

11 (D) initiates shared responsibility among 

12 workers, employers, and the government; 

13 so that all Americans have coverage of essential 

14 health benefits. 

15 (4) HEALTH DELIVERY REFORM.—This division 

16 institutes health delivery system reforms both to in17 crease quality and to reduce growth in health spend18 ing so that health care becomes more affordable for 

19 businesses, families, and government. 

20 (b) TABLE OF CONTENTS OF DIVISION.—The table 

21 of contents of this division is as follows: 

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

TITLE I—PROTECTIONS AND STANDARDS FOR QUALIFIED 

HEALTH BENEFITS PLANS 

Subtitle A—General Standards 

Sec. 101. Requirements reforming health insurance marketplace. 

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


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Subtitle B—Standards Guaranteeing Access to Affordable Coverage 

Sec. 111. Prohibiting pre-existing condition exclusions. 

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

Sec. 113. Insurance rating rules. 

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

abuse disorder benefits. 

Sec. 115. Ensuring adequacy of provider networks. 

Sec. 116. Ensuring value and lower premiums. 

Subtitle C—Standards Guaranteeing Access to Essential Benefits 

Sec. 121. Coverage of essential benefits package. 

Sec. 122. Essential benefits package defined. 

Sec. 123. Health Benefits Advisory Committee. 

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

Subtitle D—Additional Consumer Protections 

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

Sec. 132. Requiring fair grievance and appeals mechanisms. 

Sec. 133. Requiring information transparency and plan disclosure. 

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

Health Insurance Exchange. 

Sec. 135. Timely payment of claims. 

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

Sec. 137. Application of administrative simplification. 

Subtitle E—Governance 

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

Sec. 142. Duties and authority of Commissioner. 

Sec. 143. Consultation and coordination. 

Sec. 144. Health Insurance Ombudsman. 

Subtitle F—Relation to Other Requirements; Miscellaneous 

Sec. 151. Relation to other requirements. 

Sec. 152. Prohibiting discrimination in health care. 

Sec. 153. Whistleblower protection. 

Sec. 154. Construction regarding collective bargaining. 

Sec. 155. Severability. 

Subtitle G—Early Investments 

Sec. 161. Ensuring value and lower premiums. 

Sec. 162. Ending health insurance rescission abuse. 

Sec. 163. Administrative simplification. 

Sec. 164. Reinsurance program for retirees. 

TITLE II—HEALTH INSURANCE EXCHANGE AND RELATED 

PROVISIONS 

Subtitle A—Health Insurance Exchange 

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


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Sec. 202. Exchange-eligible individuals and employers. 

Sec. 203. Benefits package levels. 

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

plans. 

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

Sec. 206. Other functions. 

Sec. 207. Health Insurance Exchange Trust Fund. 

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

Subtitle B—Public Health Insurance Option 

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

as an Exchange-qualified health benefits plan. 

Sec. 222. Premiums and financing. 

Sec. 223. Payment rates for items and services. 

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

Sec. 225. Provider participation. 

Sec. 226. Application of fraud and abuse provisions. 

Subtitle C—Individual Affordability Credits 

Sec. 241. Availability through Health Insurance Exchange. 

Sec. 242. Affordable credit eligible individual. 

Sec. 243. Affordable premium credit. 

Sec. 244. Affordability cost-sharing credit. 

Sec. 245. Income determinations. 

Sec. 246. No Federal payment for undocumented aliens. 

TITLE III—SHARED RESPONSIBILITY 

Subtitle A—Individual Responsibility 

Sec. 301. Individual responsibility. 

Subtitle B—Employer Responsibility 

PART 1—HEALTH COVERAGE PARTICIPATION REQUIREMENTS

Sec. 311. Health coverage participation requirements. 

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

Sec. 313. Employer contributions in lieu of coverage. 

Sec. 314. Authority related to improper steering. 

PART 2—SATISFACTION OF HEALTH COVERAGE PARTICIPATION

REQUIREMENTS

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

Employee Retirement Income Security Act of 1974. 

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

Internal Revenue Code of 1986. 

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

Public Health Service Act. 

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

TITLE IV—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 


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Subtitle A—Shared Responsibility 

PART 1—INDIVIDUAL RESPONSIBILITY

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

PART 2—EMPLOYER RESPONSIBILITY

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

Sec. 412. Responsibilities of nonelecting employers. 

Subtitle B—Credit for Small Business Employee Health Coverage Expenses 

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

Subtitle C—Disclosures To Carry Out Health Insurance Exchange Subsidies 

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

Subtitle D—Other Revenue Provisions 

PART 1—GENERAL PROVISIONS

Sec. 441. Surcharge on high income individuals. 

Sec. 442. Delay in application of worldwide allocation of interest. 

PART 2—PREVENTION OF TAX AVOIDANCE

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

Sec. 452. Codification of economic substance doctrine. 

Sec. 453. Penalties for underpayments. 

1 (c) GENERAL DEFINITIONS.—Except as otherwise 

2 provided, in this division: 

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

5 in section 202(d)(2). 

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

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

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

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

12 includes deductibles, coinsurance, copayments, and 


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1 similar charges but does not include premiums or 

2 any network payment differential for covered serv3 ices or spending for non-covered services. 

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

5 the meaning given such term by the Commissioner 

6 and includes a spouse. 

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

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

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

10 in section 733(a)(1) of the Employee Retire11 ment Income Security Act of 1974); and 

12 (B) includes such a plan that is the fol13 lowing: 

14 (i) FEDERAL, STATE, AND TRIBAL

15 GOVERNMENTAL PLANS.—A governmental 

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

17 Employee Retirement Income Security Act 

18 of 1974), including a health benefits plan 

19 offered under chapter 89 of title 5, United 

20 States Code. 

21 (ii) CHURCH PLANS.—A church plan 

22 (as defined in section 3(33) of the Em23 ployee Retirement Income Security Act of 

24 1974). 


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

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

3 203(c). 

4 (8) ESSENTIAL BENEFITS PACKAGE.—The term 

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

6 122(a). 

7 (9) FAMILY.—The term ‘‘family’’ means an in8 dividual and includes the individual’s dependents. 

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

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

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

12 673(2) of the Community Services Block Grant Act 

13 (42 U.S.C. 9902(2)), including any revision required 

14 by such section. 

15 (11) HEALTH BENEFITS PLAN.—The terms 

16 ‘‘health benefits plan’’ means health insurance cov17 erage and an employment-based health plan and in18 cludes the public health insurance option. 

19 (12) HEALTH INSURANCE COVERAGE; HEALTH

20 INSURANCE ISSUER.—The terms ‘‘health insurance 

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

22 meanings given such terms in section 2791 of the 

23 Public Health Service Act. 

24 (13) HEALTH INSURANCE EXCHANGE.—The 

25 term ‘‘Health Insurance Exchange’’ means the 


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1 Health Insurance Exchange established under sec2 tion 201. 

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

4 a State plan under title XIX of the Social Security 

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

6 waiver under section 1115 of such Act). 

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

8 the health insurance programs under title XVIII of 

9 the Social Security Act. 

10 (16) PLAN SPONSOR.—The term ‘‘plan spon11 sor’’ has the meaning given such term in section 

12 3(16)(B) of the Employee Retirement Income Secu13 rity Act of 1974. 

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

15 means— 

16 (A) with respect to an employment-based 

17 health plan, a plan year as specified under such 

18 plan; or 

19 (B) with respect to a health benefits plan 

20 other than an employment-based health plan, a 

21 12-month period as specified by the Commis22 sioner. 

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

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


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

2 203(c). 

3 (19) QHBP OFFERING ENTITY.—The terms 

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

5 health benefits plan that is— 

6 (A) a group health plan (as defined, sub7 ject to subsection (d), in section 733(a)(1) of 

8 the Employee Retirement Income Security Act 

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

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

11 plan maintained jointly by 1 or more employers 

12 and 1 or more employee organizations and with 

13 respect to which an employer is the primary 

14 source of financing, such term means such em15 ployer; 

16 (B) health insurance coverage, the health 

17 insurance issuer offering the coverage; 

18 (C) the public health insurance option, the 

19 Secretary of Health and Human Services; 

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

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

22 Service Act), the State or political subdivision 

23 of a State (or agency or instrumentality of such 

24 State or subdivision) which establishes or main25 tains such plan; or 


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1 (E) a Federal governmental plan (as de2 fined in section 2791(d) of the Public Health 

3 Service Act), the appropriate Federal official. 

4 (20) QUALIFIED HEALTH BENEFITS PLAN.— 

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

6 health benefits plan that meets the requirements for 

7 such a plan under title I and includes the public 

8 health insurance option. 

9 (21) PUBLIC HEALTH INSURANCE OPTION.— 

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

11 the public health insurance option as provided under 

12 subtitle B of title II. 

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

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

15 area’’ mean with respect to health insurance cov16 erage— 

17 (A) offered other than through the Health 

18 Insurance Exchange, such an area as estab19 lished by the QHBP offering entity of such cov20 erage in accordance with applicable State law; 

21 and 

22 (B) offered through the Health Insurance 

23 Exchange, such an area as established by such 

24 entity in accordance with applicable State law 


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1 and applicable rules of the Commissioner for 

2 Exchange-participating health benefits plans. 

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

4 States and the District of Columbia. 

5 (24) STATE MEDICAID AGENCY.—The term 

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

7 Medicaid plan, the single State agency responsible 

8 for administering such plan under title XIX of the 

9 Social Security Act. 

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

11 ‘‘Y3’’, ‘‘Y4’’, ‘‘Y5’’, and similar subsequently num12 bered terms, mean 2013 and subsequent years, re13 spectively. 

14 TITLE I—PROTECTIONS AND 

15 STANDARDS FOR QUALIFIED 

16 HEALTH BENEFITS PLANS 

17 Subtitle A—General Standards 

18 SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR19 ANCE MARKETPLACE. 

20 (a) PURPOSE.—The purpose of this title is to estab21 lish standards to ensure that new health insurance cov22 erage and employment-based health plans that are offered 

23 meet standards guaranteeing access to affordable cov24 erage, essential benefits, and other consumer protections. 


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1 (b) REQUIREMENTS FOR QUALIFIED HEALTH BENE2 FITS PLANS.—On or after the first day of Y1, a health 

3 benefits plan shall not be a qualified health benefits plan 

4 under this division unless the plan meets the applicable 

5 requirements of the following subtitles for the type of plan 

6 and plan year involved: 

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

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

9 (3) Subtitle D (relating to consumer protec10 tion). 

11 (c) TERMINOLOGY.—In this division: 

12 (1) ENROLLMENT IN EMPLOYMENT-BASED

13 HEALTH PLANS.—An individual shall be treated as 

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

15 plan if the individual is a participant or beneficiary 

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

17 respectively, of the Employee Retirement Income Se18 curity Act of 1974) in such plan. 

19 (2) INDIVIDUAL AND GROUP HEALTH INSUR20 ANCE COVERAGE.—The terms ‘‘individual health in21 surance coverage’’ and ‘‘group health insurance cov22 erage’’ mean health insurance coverage offered in 

23 the individual market or large or small group mar24 ket, respectively, as defined in section 2791 of the 

25 Public Health Service Act. 


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1 SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT 

2 COVERAGE. 

3 (a) GRANDFATHERED HEALTH INSURANCE COV4 ERAGE DEFINED.—Subject to the succeeding provisions of 

5 this section, for purposes of establishing acceptable cov6 erage under this division, the term ‘‘grandfathered health 

7 insurance coverage’’ means individual health insurance 

8 coverage that is offered and in force and effect before the 

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

10 (1) LIMITATION ON NEW ENROLLMENT.— 

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

12 this paragraph, the individual health insurance 

13 issuer offering such coverage does not enroll 

14 any individual in such coverage if the first ef15 fective date of coverage is on or after the first 

16 day of Y1. 

17 (B) DEPENDENT COVERAGE PER18 MITTED.—Subparagraph (A) shall not affect 

19 the subsequent enrollment of a dependent of an 

20 individual who is covered as of such first day. 

21 (2) LIMITATION ON CHANGES IN TERMS OR

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

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

24 of its terms or conditions, including benefits and 

25 cost-sharing, from those in effect as of the day be26 fore the first day of Y1. 


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1 (3) RESTRICTIONS ON PREMIUM INCREASES.— 

2 The issuer cannot vary the percentage increase in 

3 the premium for a risk group of enrollees in specific 

4 grandfathered health insurance coverage without 

5 changing the premium for all enrollees in the same 

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

7 Commissioner. 

8 (b) GRACE PERIOD FOR CURRENT EMPLOYMENT9 BASED HEALTH PLANS.— 

10 (1) GRACE PERIOD.— 

11 (A) IN GENERAL.—The Commissioner 

12 shall establish a grace period whereby, for plan 

13 years beginning after the end of the 5-year pe14 riod beginning with Y1, an employment-based 

15 health plan in operation as of the day before 

16 the first day of Y1 must meet the same require17 ments as apply to a qualified health benefits 

18 plan under section 101, including the essential 

19 benefit package requirement under section 121. 

20 (B) EXCEPTION FOR LIMITED BENEFITS

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

22 an employment-based health plan in which the 

23 coverage consists only of one or more of the fol24 lowing: 


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1 (i) Any coverage described in section 

2 3001(a)(1)(B)(ii)(IV) of division B of the 

3 American Recovery and Reinvestment Act 

4 of 2009 (Public Law 111–5). 

5 (ii) Excepted benefits (as defined in 

6 section 733(c) of the Employee Retirement 

7 Income Security Act of 1974), including 

8 coverage under a specified disease or ill9 ness policy described in paragraph (3)(A) 

10 of such section. 

11 (iii) Such other limited benefits as the 

12 Commissioner may specify. 

13 In no case shall an employment-based health 

14 plan in which the coverage consists only of one 

15 or more of the coverage or benefits described in 

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

17 coverage under this division 

18 (2) TRANSITIONAL TREATMENT AS ACCEPT19 ABLE COVERAGE.—During the grace period specified 

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

21 plan that is described in such paragraph shall be 

22 treated as acceptable coverage under this division. 

23 (c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE

24 COVERAGE.— 


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1 (1) IN GENERAL.—Individual health insurance 

2 coverage that is not grandfathered health insurance 

3 coverage under subsection (a) may only be offered 

4 on or after the first day of Y1 as an Exchange-par5 ticipating health benefits plan. 

6 (2) SEPARATE, EXCEPTED COVERAGE PER7 MITTED.—Excepted benefits (as defined in section 

8 2791(c) of the Public Health Service Act) are not 

9 included within the definition of health insurance 

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

11 offering, other than through the Health Insurance 

12 Exchange, of excepted benefits so long as it is of13 fered and priced separately from health insurance 

14 coverage. 

15 Subtitle B—Standards Guaran16 teeing Access to Affordable Cov17 erage 

18 SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLU19 SIONS. 

20 A qualified health benefits plan may not impose any 

21 pre-existing condition exclusion (as defined in section 

22 2701(b)(1)(A) of the Public Health Service Act) or other23 wise impose any limit or condition on the coverage under 

24 the plan with respect to an individual or dependent based 

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


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1 2791(d)(9) of the Public Health Service Act) in relation 

2 to the individual or dependent. 

3 SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN4 SURED PLANS. 

5 The requirements of sections 2711 (other than sub6 sections (c) and (e)) and 2712 (other than paragraphs (3), 

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

8 Health Service Act, relating to guaranteed availability and 

9 renewability of health insurance coverage, shall apply to 

10 individuals and employers in all individual and group 

11 health insurance coverage, whether offered to individuals 

12 or employers through the Health Insurance Exchange, 

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

14 in the same manner as such sections apply to employers 

15 and health insurance coverage offered in the small group 

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

17 only if, before nonrenewal or discontinuation of coverage, 

18 the issuer has provided the enrollee with notice of non19 payment of premiums and there is a grace period during 

20 which the enrollees has an opportunity to correct such 

21 nonpayment. Rescissions of such coverage shall be prohib22 ited except in cases of fraud as defined in sections 

23 2712(b)(2) of such Act. 


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1 SEC. 113. INSURANCE RATING RULES. 

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

3 insured qualified health benefits plan may not vary except 

4 as follows: 

5 (1) LIMITED AGE VARIATION PERMITTED.—By 

6 age (within such age categories as the Commissioner 

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

8 premium to the lowest such premium does not ex9 ceed the ratio of 2 to 1. 

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

11 permitted by State insurance regulators or, in the 

12 case of Exchange-participating health benefits plans, 

13 as specified by the Commissioner in consultation 

14 with such regulators). 

15 (3) BY FAMILY ENROLLMENT.—By family en16 rollment (such as variations within categories and 

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

18 premium for family enrollment (or enrollments) to 

19 the premium for individual enrollment is uniform, as 

20 specified under State law and consistent with rules 

21 of the Commissioner. 

22 (b) STUDY AND REPORTS.— 

23 (1) STUDY.—The Commissioner, in coordina24 tion with the Secretary of Health and Human Serv25 ices and the Secretary of Labor, shall conduct a 

26 study of the large group insured and self-insured 


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1 employer health care markets. Such study shall ex2 amine the following: 

3 (A) The types of employers by key charac4 teristics, including size, that purchase insured 

5 products versus those that self-insure. 

6 (B) The similarities and differences be7 tween typical insured and self-insured health 

8 plans. 

9 (C) The financial solvency and capital re10 serve levels of employers that self-insure by em11 ployer size. 

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

13 being able to pay obligations or otherwise be14 coming financially insolvent. 

15 (E) The extent to which rating rules are 

16 likely to cause adverse selection in the large 

17 group market or to encourage small and mid 

18 size employers to self-insure 

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

20 the date of the enactment of this Act, the Commis21 sioner shall submit to Congress and the applicable 

22 agencies a report on the study conducted under 

23 paragraph (1). Such report shall include any rec24 ommendations the Commissioner deems appropriate 

25 to ensure that the law does not provide incentives 


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

2 create adverse selection in the risk pools of large 

3 group insurers and self-insured employers. Not later 

4 than 18 months after the first day of Y1, the Com5 missioner shall submit to Congress and the applica6 ble agencies an updated report on such study, in7 cluding updates on such recommendations. 

8 SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN 

9 MENTAL HEALTH AND SUBSTANCE ABUSE 

10 DISORDER BENEFITS. 

11 (a) NONDISCRIMINATION IN BENEFITS.—A qualified 

12 health benefits plan shall comply with standards estab13 lished by the Commissioner to prohibit discrimination in 

14 health benefits or benefit structures for qualifying health 

15 benefits plans, building from sections 702 of Employee 

16 Retirement Income Security Act of 1974, 2702 of the 

17 Public Health Service Act, and section 9802 of the Inter18 nal Revenue Code of 1986. 

19 (b) PARITY IN MENTAL HEALTH AND SUBSTANCE

20 ABUSE DISORDER BENEFITS.—To the extent such provi21 sions are not superceded by or inconsistent with subtitle 

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

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

24 Health Service Act shall apply to a qualified health bene25 fits plan, regardless of whether it is offered in the indiVerDate Nov 24 2008 23:22 Jul 14, 2009 Jkt 079200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 vidual or group market, in the same manner as such provi2 sions apply to health insurance coverage offered in the 

3 large group market. 

4 SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS. 

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

6 that uses a provider network for items and services shall 

7 meet such standards respecting provider networks as the 

8 Commissioner may establish to assure the adequacy of 

9 such networks in ensuring enrollee access to such items 

10 and services and transparency in the cost-sharing differen11 tials between in-network coverage and out-of-network cov12 erage. 

13 (b) PROVIDER NETWORK DEFINED.—In this divi14 sion, the term ‘‘provider network’’ means the providers 

15 with respect to which covered benefits, treatments, and 

16 services are available under a health benefits plan. 

17 SEC. 116. ENSURING VALUE AND LOWER PREMIUMS. 

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

19 shall meet a medical loss ratio as defined by the Commis20 sioner. For any plan year in which the qualified health 

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

22 offering entity shall provide in a manner specified by the 

23 Commissioner for rebates to enrollees of payment suffi24 cient to meet such loss ratio. 


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1 (b) BUILDING ON INTERIM RULES.—In imple2 menting subsection (a), the Commissioner shall build on 

3 the definition and methodology developed by the Secretary 

4 of Health and Human Services under the amendments 

5 made by section 161 for determining how to calculate the 

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

7 highest level medical loss ratio possible that is designed 

8 to ensure adequate participation by QHBP offering enti9 ties, competition in the health insurance market in and 

10 out of the Health Insurance Exchange, and value for con11 sumers so that their premiums are used for services. 

12 Subtitle C—Standards Guaran13 teeing Access to Essential Bene14 fits 

15 SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE. 

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

17 shall provide coverage that at least meets the benefit 

18 standards adopted under section 124 for the essential ben19 efits package described in section 122 for the plan year 

20 involved. 

21 (b) CHOICE OF COVERAGE.— 

22 (1) NON-EXCHANGE-PARTICIPATING HEALTH

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

24 benefits plan that is not an Exchange-participating 

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1 erage in addition to the essential benefits package as 

2 the QHBP offering entity may specify. 

3 (2) EXCHANGE-PARTICIPATING HEALTH BENE4 FITS PLANS.—In the case of an Exchange-partici5 pating health benefits plan, such plan is required 

6 under section 203 to provide specified levels of bene7 fits and, in the case of a plan offering a premium8 plus level of benefits, provide additional benefits. 

9 (3) CONTINUATION OF OFFERING OF SEPARATE

10 EXCEPTED BENEFITS COVERAGE.—Nothing in this 

11 division shall be construed as affecting the offering 

12 of health benefits in the form of excepted benefits 

13 (described in section 102(b)(1)(B)(ii)) if such bene14 fits are offered under a separate policy, contract, or 

15 certificate of insurance. 

16 (c) NO RESTRICTIONS ON COVERAGE UNRELATED

17 TO CLINICAL APPROPRIATENESS.—A qualified health ben18 efits plan may not impose any restriction (other than cost19 sharing) unrelated to clinical appropriateness on the cov20 erage of the health care items and services. 

21 SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED. 

22 (a) IN GENERAL.—In this division, the term ‘‘essen23 tial benefits package’’ means health benefits coverage, 

24 consistent with standards adopted under section 124 to 


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1 ensure the provision of quality health care and financial 

2 security, that— 

3 (1) provides payment for the items and services 

4 described in subsection (b) in accordance with gen5 erally accepted standards of medical or other appro6 priate clinical or professional practice; 

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

8 care items and services in accordance with such ben9 efit standards, consistent with subsection (c); 

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

11 on the coverage of covered health care items and 

12 services; 

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

14 network adequacy); and 

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

16 Actuary of the Centers for Medicare & Medicaid 

17 Services, to the average prevailing employer-spon18 sored coverage. 

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

20 items and services described in this subsection are the fol21 lowing: 

22 (1) Hospitalization. 

23 (2) Outpatient hospital and outpatient clinic 

24 services, including emergency department services. 


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1 (3) Professional services of physicians and other 

2 health professionals. 

3 (4) Such services, equipment, and supplies inci4 dent to the services of a physician’s or a health pro5 fessional’s delivery of care in institutional settings, 

6 physician offices, patients’ homes or place of resi7 dence, or other settings, as appropriate. 

8 (5) Prescription drugs. 

9 (6) Rehabilitative and habilitative services. 

10 (7) Mental health and substance use disorder 

11 services. 

12 (8) Preventive services, including those services 

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

14 Force on Clinical Preventive Services and those vac15 cines recommended for use by the Director of the 

16 Centers for Disease Control and Prevention. 

17 (9) Maternity care. 

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

19 health, vision, and hearing services, equipment, and 

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

21 (c) REQUIREMENTS RELATING TO COST-SHARING

22 AND MINIMUM ACTUARIAL VALUE.— 

23 (1) NO COST-SHARING FOR PREVENTIVE SERV24 ICES.—There shall be no cost-sharing under the es25 sential benefits package for preventive items and 


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1 services (as specified under the benefit standards), 

2 including well baby and well child care. 

3 (2) ANNUAL LIMITATION.— 

4 (A) ANNUAL LIMITATION.—The cost-shar5 ing incurred under the essential benefits pack6 age with respect to an individual (or family) for 

7 a year does not exceed the applicable level spec8 ified in subparagraph (B). 

9 (B) APPLICABLE LEVEL.—The applicable 

10 level specified in this subparagraph for Y1 is 

11 $5,000 for an individual and $10,000 for a 

12 family. Such levels shall be increased (rounded 

13 to the nearest $100) for each subsequent year 

14 by the annual percentage increase in the Con15 sumer Price Index (United States city average) 

16 applicable to such year. 

17 (C) USE OF COPAYMENTS.—In establishing 

18 cost-sharing levels for basic, enhanced, and pre19 mium plans under this subsection, the Sec20 retary shall, to the maximum extent possible, 

21 use only copayments and not coinsurance. 

22 (3) MINIMUM ACTUARIAL VALUE.— 

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

24 the essential benefits package shall be designed 

25 to provide a level of coverage that is designed 


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1 to provide benefits that are actuarially equiva2 lent to approximately 70 percent of the full ac3 tuarial value of the benefits provided under the 

4 reference benefits package described in sub5 paragraph (B). 

6 (B) REFERENCE BENEFITS PACKAGE DE7 SCRIBED.—The reference benefits package de8 scribed in this subparagraph is the essential 

9 benefits package if there were no cost-sharing 

10 imposed. 

11 SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE. 

12 (a) ESTABLISHMENT.— 

13 (1) IN GENERAL.—There is established a pri14 vate-public advisory committee which shall be a 

15 panel of medical and other experts to be known as 

16 the Health Benefits Advisory Committee to rec17 ommend covered benefits and essential, enhanced, 

18 and premium plans. 

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

20 member and the chair of the Health Benefits Advi21 sory Committee. 

22 (3) MEMBERSHIP.—The Health Benefits Advi23 sory Committee shall be composed of the following 

24 members, in addition to the Surgeon General: 


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1 (A) 9 members who are not Federal em2 ployees or officers and who are appointed by 

3 the President. 

4 (B) 9 members who are not Federal em5 ployees or officers and who are appointed by 

6 the Comptroller General of the United States in 

7 a manner similar to the manner in which the 

8 Comptroller General appoints members to the 

9 Medicare Payment Advisory Commission under 

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

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

12 exceed 8) who are Federal employees and offi13 cers, as the President may appoint. 

14 Such initial appointments shall be made not later 

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

16 Act. 

17 (4) TERMS.—Each member of the Health Bene18 fits Advisory Committee shall serve a 3-year term on 

19 the Committee, except that the terms of the initial 

20 members shall be adjusted in order to provide for a 

21 staggered term of appointment for all such mem22 bers. 

23 (5) PARTICIPATION.—The membership of the 

24 Health Benefits Advisory Committee shall at least 

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1 ers, labor, health insurance issuers, experts in health 

2 care financing and delivery, experts in racial and 

3 ethnic disparities, experts in care for those with dis4 abilities, representatives of relevant governmental 

5 agencies. and at least one practicing physician or 

6 other health professional and an expert on children’s 

7 health and shall represent a balance among various 

8 sectors of the health care system so that no single 

9 sector unduly influences the recommendations of 

10 such Committee. 

11 (b) DUTIES.— 

12 (1) RECOMMENDATIONS ON BENEFIT STAND13 ARDS.—The Health Benefits Advisory Committee 

14 shall recommend to the Secretary of Health and 

15 Human Services (in this subtitle referred to as the 

16 ‘‘Secretary’’) benefit standards (as defined in para17 graph (4)), and periodic updates to such standards. 

18 In developing such recommendations, the Committee 

19 shall take into account innovation in health care and 

20 consider how such standards could reduce health dis21 parities. 

22 (2) DEADLINE.—The Health Benefits Advisory 

23 Committee shall recommend initial benefit standards 

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

25 of the enactment of this Act. 


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1 (3) PUBLIC INPUT.—The Health Benefits Advi2 sory Committee shall allow for public input as a part 

3 of developing recommendations under this sub4 section. 

5 (4) BENEFIT STANDARDS DEFINED.—In this 

6 subtitle, the term ‘‘benefit standards’’ means stand7 ards respecting— 

8 (A) the essential benefits package de9 scribed in section 122, including categories of 

10 covered treatments, items and services within 

11 benefit classes, and cost-sharing; and 

12 (B) the cost-sharing levels for enhanced 

13 plans and premium plans (as provided under 

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

15 (5) LEVELS OF COST-SHARING FOR ENHANCED

16 AND PREMIUM PLANS.— 

17 (A) ENHANCED PLAN.—The level of cost18 sharing for enhanced plans shall be designed so 

19 that such plans have benefits that are actuari20 ally equivalent to approximately 85 percent of 

21 the actuarial value of the benefits provided 

22 under the reference benefits package described 

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

24 (B) PREMIUM PLAN.—The level of cost25 sharing for premium plans shall be designed so 


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1 that such plans have benefits that are actuari2 ally equivalent to approximately 95 percent of 

3 the actuarial value of the benefits provided 

4 under the reference benefits package described 

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

6 (c) OPERATIONS.— 

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

8 Health Benefits Advisory Committee shall receive 

9 travel expenses, including per diem in accordance 

10 with applicable provisions under subchapter I of 

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

12 otherwise serve without additional pay. 

13 (2) MEMBERS NOT TREATED AS FEDERAL EM14 PLOYEES.—Members of the Health Benefits Advi15 sory Committee shall not be considered employees of 

16 the Federal government solely by reason of any serv17 ice on the Committee. 

18 (3) APPLICATION OF FACA.—The Federal Advi19 sory Committee Act (5 U.S.C. App.), other than sec20 tion 14, shall apply to the Health Benefits Advisory 

21 Committee. 

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

23 publication in the Federal Register and the posting on the 

24 Internet website of the Department of Health and Human 


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1 Services of all recommendations made by the Health Ben2 efits Advisory Committee under this section. 

3 SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA4 TIONS; ADOPTION OF BENEFIT STANDARDS. 

5 (a) PROCESS FOR ADOPTION OF RECOMMENDA6 TIONS.— 

7 (1) REVIEW OF RECOMMENDED STANDARDS.— 

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

9 benefit standards recommended under section 123 

10 (including such standards as modified under para11 graph (2)(B)), the Secretary shall review such 

12 standards and shall determine whether to propose 

13 adoption of such standards as a package. 

14 (2) DETERMINATION TO ADOPT STANDARDS.— 

15 If the Secretary determines— 

16 (A) to propose adoption of benefit stand17 ards so recommended as a package, the Sec18 retary shall, by regulation under section 553 of 

19 title 5, United States Code, propose adoption 

20 such standards; or 

21 (B) not to propose adoption of such stand22 ards as a package, the Secretary shall notify 

23 the Health Benefits Advisory Committee in 

24 writing of such determination and the reasons 

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1 ommendation and provide the Committee with a 

2 further opportunity to modify its previous rec3 ommendations and submit new recommenda4 tions to the Secretary on a timely basis. 

5 (3) CONTINGENCY.—If, because of the applica6 tion of paragraph (2)(B), the Secretary would other7 wise be unable to propose initial adoption of such 

8 recommended standards by the deadline specified in 

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

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

11 propose adoption of initial benefit standards by such 

12 deadline. 

13 (4) PUBLICATION.—The Secretary shall provide 

14 for publication in the Federal Register of all deter15 minations made by the Secretary under this sub16 section. 

17 (b) ADOPTION OF STANDARDS.— 

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

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

20 the Secretary shall, through the rulemaking process 

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

22 benefit standards. 

23 (2) PERIODIC UPDATING STANDARDS.—Under 

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


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1 periodic updating of the benefit standards previously 

2 adopted under this section. 

3 (3) REQUIREMENT.—The Secretary may not 

4 adopt any benefit standards for an essential benefits 

5 package or for level of cost-sharing that are incon6 sistent with the requirements for such a package or 

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

8 Subtitle D—Additional Consumer 

9 Protections 

10 SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY 

11 HEALTH INSURERS. 

12 The Commissioner shall establish uniform marketing 

13 standards that all insured QHBP offering entities shall 

14 meet. 

15 SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS 

16 MECHANISMS. 

17 (a) IN GENERAL.—A QHBP offering entity shall pro18 vide for timely grievance and appeals mechanisms that the 

19 Commissioner shall establish. 

20 (b) INTERNAL CLAIMS AND APPEALS PROCESS.— 

21 Under a qualified health benefits plan the QHBP offering 

22 entity shall provide an internal claims and appeals process 

23 that initially incorporates the claims and appeals proce24 dures (including urgent claims) set forth at section 

25 2560.503–1 of title 29, Code of Federal Regulations, as 


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

2 and shall update such process in accordance with any 

3 standards that the Commissioner may establish. 

4 (c) EXTERNAL REVIEW PROCESS.— 

5 (1) IN GENERAL.—The Commissioner shall es6 tablish an external review process (including proce7 dures for expedited reviews of urgent claims) that 

8 provides for an impartial, independent, and de novo 

9 review of denied claims under this division. 

10 (2) REQUIRING FAIR GRIEVANCE AND APPEALS

11 MECHANISMS.—A determination made, with respect 

12 to a qualified health benefits plan offered by a 

13 QHBP offering entity, under the external review 

14 process established under this subsection shall be 

15 binding on the plan and the entity. 

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

17 construed as affecting the availability of judicial review 

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

19 or (c), subject to section 151. 

20 SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND 

21 PLAN DISCLOSURE. 

22 (a) ACCURATE AND TIMELY DISCLOSURE.— 

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

24 plan shall comply with standards established by the 

25 Commissioner for the accurate and timely disclosure 


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1 of plan documents, plan terms and conditions, 

2 claims payment policies and practices, periodic fi3 nancial disclosure, data on enrollment, data on 

4 disenrollment, data on the number of claims denials, 

5 data on rating practices, information on cost-sharing 

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

7 coverage, and other information as determined ap8 propriate by the Commissioner. The Commissioner 

9 shall require that such disclosure be provided in 

10 plain language. 

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

12 term ‘‘plain language’’ means language that the in13 tended audience, including individuals with limited 

14 English proficiency, can readily understand and use 

15 because that language is clean, concise, well-orga16 nized, and follows other best practices of plain lan17 guage writing. 

18 (3) GUIDANCE.—The Commissioner shall de19 velop and issue guidance on best practices of plain 

20 language writing. 

21 (b) CONTRACTING REIMBURSEMENT.—A qualified 

22 health benefits plan shall comply with standards estab23 lished by the Commissioner to ensure transparency to each 

24 health care provider relating to reimbursement arrange25 ments between such plan and such provider. 


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

2 change in a qualified health benefits plan shall not be 

3 made without such reasonable and timely advance notice 

4 to enrollees of such change. 

5 SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS 

6 PLANS NOT OFFERED THROUGH THE 

7 HEALTH INSURANCE EXCHANGE. 

8 The requirements of the previous provisions of this 

9 subtitle shall apply to qualified health benefits plans that 

10 are not being offered through the Health Insurance Ex11 change only to the extent specified by the Commissioner. 

12 SEC. 135. TIMELY PAYMENT OF CLAIMS. 

13 A QHBP offering entity shall comply with the re14 quirements of section 1857(f) of the Social Security Act 

15 with respect to a qualified health benefits plan it offers 

16 in the same manner an Medicare Advantage organization 

17 is required to comply with such requirements with respect 

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

19 Medicare. 

20 SEC. 136. STANDARDIZED RULES FOR COORDINATION AND 

21 SUBROGATION OF BENEFITS. 

22 The Commissioner shall establish standards for the 

23 coordination and subrogation of benefits and reimburse24 ment of payments in cases involving individuals and mul25 tiple plan coverage. 


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1 SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICA2 TION. 

3 A QHBP offering entity is required to comply with 

4 standards for electronic financial and administrative 

5 transactions under section 1173A of the Social Security 

6 Act, added by section 163(a). 

7 Subtitle E—Governance 

8 SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH 

9 CHOICES COMMISSIONER. 

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

11 independent agency in the executive branch of the Govern12 ment, a Health Choices Administration (in this division 

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

14 (b) COMMISSIONER.— 

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

16 headed by a Health Choices Commissioner (in this 

17 division referred to as the ‘‘Commissioner’’) who 

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

19 advice and consent of the Senate. 

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

21 paragraphs (2), (5), and (7) of subsection (a) (relat22 ing to compensation, terms, general powers, rule23 making, and delegation) of section 702 of the Social 

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

25 Commissioner and the Administration in the same 

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1 sioner of Social Security and the Social Security Ad2 ministration. 

3 SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 

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

5 carrying out the following functions under this division: 

6 (1) QUALIFIED PLAN STANDARDS.—The estab7 lishment of qualified health benefits plan standards 

8 under this title, including the enforcement of such 

9 standards in coordination with State insurance regu10 lators and the Secretaries of Labor and the Treas11 ury. 

12 (2) HEALTH INSURANCE EXCHANGE.—The es13 tablishment and operation of a Health Insurance 

14 Exchange under subtitle A of title II. 

15 (3) INDIVIDUAL AFFORDABILITY CREDITS.— 

16 The administration of individual affordability credits 

17 under subtitle C of title II, including determination 

18 of eligibility for such credits. 

19 (4) ADDITIONAL FUNCTIONS.—Such additional 

20 functions as may be specified in this division. 

21 (b) PROMOTING ACCOUNTABILITY.— 

22 (1) IN GENERAL.—The Commissioner shall un23 dertake activities in accordance with this subtitle to 

24 promote accountability of QHBP offering entities in 

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1 gardless of whether such accountability is with re2 spect to qualified health benefits plans offered 

3 through the Health Insurance Exchange or outside 

4 of such Exchange. 

5 (2) COMPLIANCE EXAMINATION AND AUDITS.— 

6 (A) IN GENERAL.—The commissioner 

7 shall, in coordination with States, conduct au8 dits of qualified health benefits plan compliance 

9 with Federal requirements. Such audits may in10 clude random compliance audits and targeted 

11 audits in response to complaints or other sus12 pected non-compliance. 

13 (B) RECOUPMENT OF COSTS IN CONNEC14 TION WITH EXAMINATION AND AUDITS.—The 

15 Commissioner is authorized to recoup from 

16 qualified health benefits plans reimbursement 

17 for the costs of such examinations and audit of 

18 such QHBP offering entities. 

19 (c) DATA COLLECTION.—The Commissioner shall 

20 collect data for purposes of carrying out the Commis21 sioner’s duties, including for purposes of promoting qual22 ity and value, protecting consumers, and addressing dis23 parities in health and health care and may share such data 

24 with the Secretary of Health and Human Services. 

25 (d) SANCTIONS AUTHORITY.— 


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1 (1) IN GENERAL.—In the case that the Com2 missioner determines that a QHBP offering entity 

3 violates a requirement of this title, the Commis4 sioner may, in coordination with State insurance 

5 regulators and the Secretary of Labor, provide, in 

6 addition to any other remedies authorized by law, 

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

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

9 paragraph, with respect to a qualified health benefits 

10 plan offered by a QHBP offering entity, are— 

11 (A) civil money penalties of not more than 

12 the amount that would be applicable under 

13 similar circumstances for similar violations 

14 under section 1857(g) of the Social Security 

15 Act; 

16 (B) suspension of enrollment of individuals 

17 under such plan after the date the Commis18 sioner notifies the entity of a determination 

19 under paragraph (1) and until the Commis20 sioner is satisfied that the basis for such deter21 mination has been corrected and is not likely to 

22 recur; 

23 (C) in the case of an Exchange-partici24 pating health benefits plan, suspension of pay25 ment to the entity under the Health Insurance 


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1 Exchange for individuals enrolled in such plan 

2 after the date the Commissioner notifies the en3 tity of a determination under paragraph (1) 

4 and until the Secretary is satisfied that the 

5 basis for such determination has been corrected 

6 and is not likely to recur; or 

7 (D) working with State insurance regu8 lators to terminate plans for repeated failure by 

9 the offering entity to meet the requirements of 

10 this title. 

11 (e) STANDARD DEFINITIONS OF INSURANCE AND

12 MEDICAL TERMS.—The Commissioner shall provide for 

13 the development of standards for the definitions of terms 

14 used in health insurance coverage, including insurance-re15 lated terms. 

16 (f) EFFICIENCY IN ADMINISTRATION.—The Commis17 sioner shall issue regulations for the effective and efficient 

18 administration of the Health Insurance Exchange and af19 fordability credits under subtitle C, including, with respect 

20 to the determination of eligibility for affordability credits, 

21 the use of personnel who are employed in accordance with 

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

23 out the duties of the Commissioner or, in the case of sec24 tions 208 and 241(b)(2), the use of State personnel who 

25 are employed in accordance with standards prescribed by 


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1 the Office of Personnel Management pursuant to section 

2 208 of the Intergovernmental Personnel Act of 1970 (42 

3 U.S.C. 4728). 

4 SEC. 143. CONSULTATION AND COORDINATION. 

5 (a) CONSULTATION.—In carrying out the Commis6 sioner’s duties under this division, the Commissioner, as 

7 appropriate, shall consult with at least with the following: 

8 (1) The National Association of Insurance 

9 Commissioners, State attorneys general, and State 

10 insurance regulators, including concerning the 

11 standards for insured qualified health benefits plans 

12 under this title and enforcement of such standards. 

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

15 credits under subtitle C of title II and the offering 

16 of Exchange-participating health benefits plans, to 

17 Medicaid eligible individuals under subtitle A of such 

18 title. 

19 (3) Other appropriate Federal agencies. 

20 (4) Indian tribes and tribal organizations. 

21 (5) The National Association of Insurance 

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

24 subtitles B and D. 

25 (b) COORDINATION.— 


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

3 the enforcement of the provisions of this division, 

4 the Commissioner shall work in coordination with 

5 existing Federal and State entities to the maximum 

6 extent feasible consistent with this division and in a 

7 manner that prevents conflicts of interest in duties 

8 and ensures effective enforcement. 

9 (2) UNIFORM STANDARDS.—The Commissioner, 

10 in coordination with such entities, shall seek to 

11 achieve uniform standards that adequately protect 

12 consumers in a manner that does not unreasonably 

13 affect employers and insurers. 

14 SEC. 144. HEALTH INSURANCE OMBUDSMAN. 

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

16 within the Health Choices Administration a Qualified 

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

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

21 Ombudsman shall, in a linguistically appropriate man22 ner— 

23 (1) receive complaints, grievances, and requests 

24 for information submitted by individuals; 


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

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

6 a decision or determination; 

7 (B) assistance to such individuals with any 

8 problems arising from disenrollment from such 

9 a plan; 

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

12 enroll; and 

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

15 to affordability credits); and 

16 (3) submit annual reports to Congress and the 

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

19 improvement in the administration of this division as 

20 the Ombudsman determines appropriate. The Om21 budsman shall not serve as an advocate for any in22 creases in payments or new coverage of services, but 

23 may identify issues and problems in payment or cov24 erage policies. 


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1 Subtitle F—Relation to Other 

2 Requirements; Miscellaneous 

3 SEC. 151. RELATION TO OTHER REQUIREMENTS. 

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

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

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

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

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

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

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

18 Commissioner. 

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

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

23 (b) COVERAGE OFFERED THROUGH EXCHANGE.— 


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

3 Exchange— 

4 (A) the requirements of this title do not 

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

8 under title XXVII of the Public Health Service 

9 Act or under State law, except insofar as such 

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

12 Commissioner; and 

13 (B) individual rights and remedies under 

14 State laws shall apply. 

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

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

19 respect to any requirement referred to in paragraph 

20 (1)(A). 

21 SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 

22 (a) IN GENERAL.—Except as otherwise explicitly per23 mitted by this Act and by subsequent regulations con24 sistent with this Act, all health care and related services 

25 (including insurance coverage and public health activities) 


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1 covered by this Act shall be provided without regard to 

2 personal characteristics extraneous to the provision of 

3 high quality health care or related services. 

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

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

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

8 regulations as are necessary or appropriate to insure that 

9 all health care and related services (including insurance 

10 coverage and public health activities) covered by this Act 

11 are provided (whether directly or through contractual, li12 censing, or other arrangements) without regard to per13 sonal characteristics extraneous to the provision of high 

14 quality health care or related services. 

15 SEC. 153. WHISTLEBLOWER PROTECTION. 

16 (a) RETALIATION PROHIBITED.—No employer may 

17 discharge any employee or otherwise discriminate against 

18 any employee with respect to his compensation, terms, 

19 conditions, or other privileges of employment because the 

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

21 the employee)— 

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

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

24 the Federal Government, or the attorney general of 

25 a State information relating to any violation of, or 


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1 any act or omission the employee reasonably believes 

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

3 order, rule, or regulation promulgated under this 

4 Act; 

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

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

8 or participate in such a proceeding; or 

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

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

11 employee (or other such person) reasonably believed 

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

13 order, rule, or regulation promulgated under this 

14 Act. 

15 (b) ENFORCEMENT ACTION.—An employee covered 

16 by this section who alleges discrimination by an employer 

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

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

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

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

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

23 more individuals, partnerships, associations, corporations, 

24 trusts, professional membership organization including a 

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1 corporated organizations, nongovernmental organizations, 

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

4 agent, contractor, subcontractor, grantee, or consultant of 

5 such person. 

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

8 States Code, shall also apply to this section. 

9 SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR10 GAINING. 

11 Nothing in this division shall be construed to alter 

12 of supercede any statutory or other obligation to engage 

13 in collective bargaining over the terms and conditions of 

14 employment related to health care. 

15 SEC. 155. SEVERABILITY. 

16 If any provision of this Act, or any application of such 

17 provision to any person or circumstance, is held to be un18 constitutional, the remainder of the provisions of this Act 

19 and the application of the provision to any other person 

20 or circumstance shall not be affected. 

21 Subtitle G—Early Investments 

22 SEC. 161. ENSURING VALUE AND LOWER PREMIUMS. 

23 (a) GROUP HEALTH INSURANCE COVERAGE.—Title 

24 XXVII of the Public Health Service Act is amended by 

25 inserting after section 2713 the following new section: 


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

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

3 that offers health insurance coverage in the small or large 

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

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

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

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

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

10 that is designed to ensure adequate participation by 

11 issuers, competition in the health insurance market, and 

12 value for consumers so that their premiums are used for 

13 services. 

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

15 establish a uniform definition of medical loss ratio and 

16 methodology for determining how to calculate the medical 

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

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

20 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 

21 Such title is further amended by inserting after section 

22 2753 the following new section: 

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

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

25 insurance coverage offered in the individual market in the 


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1 same manner as such provisions apply to health insurance 

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

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

5 individual market for plan years beginning on or after 

6 January 1, 2011. 

7 SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE. 

8 (a) CLARIFICATION REGARDING APPLICATION OF

9 GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH

10 INSURANCE COVERAGE.—Section 2742 of the Public 

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

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

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

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

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

20 is amended by adding at the end the following: 

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

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


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

3 (c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL

4 THIRD PARTY REVIEW IN CERTAIN CASES.—Subpart 1 

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

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

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

8 THIRD PARTY REVIEW IN CASES OF RESCIS9 SION. 

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

13 such rescission may take effect the issuer shall provide the 

14 individual with notice of such proposed rescission and an 

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

17 by the Secretary under section 2742(f). 

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

20 third party of a rescission of health insurance coverage, 

21 the coverage shall remain in effect until such third party 

22 determines that the coverage may be rescinded under the 

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

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

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


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

2 after such date. 

3 SEC. 163. ADMINISTRATIVE SIMPLIFICATION. 

4 (a) STANDARDIZING ELECTRONIC ADMINISTRATIVE

5 TRANSACTIONS.— 

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

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

10 ‘‘SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE 

11 TRANSACTIONS. 

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

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

15 and regularly update standards consistent with the 

16 goals described in paragraph (2). 

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

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

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

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

24 including companion guides; 


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

3 transactions or clarification by further commu4 nications; 

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

7 responsibility at the point of service and, to the 

8 extent possible, prior to service, including 

9 whether the individual is eligible for a specific 

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

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

15 adjudication of claims; 

16 ‘‘(F) provide for timely acknowledgment, 

17 response, and status reporting applicable to any 

18 electronic transaction deemed appropriate by 

19 the Secretary; 

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

21 reason and remark codes) in unambiguous 

22 terms, not permit optional fields, require that 

23 data elements be either required or conditioned 

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


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1 ‘‘(H) harmonize all common data elements 

2 across administrative and clinical transaction 

3 standards. 

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

5 years after the date of implementation of the X12 

6 Version 5010 transaction standards implemented 

7 under this part, the Secretary shall adopt standards 

8 under this section. 

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

11 developed, adopted and enforced so as to— 

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

13 as needed, the standards required under section 

14 1173; 

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

17 standards as to data content such that a fully 

18 compliant, equivalent electronic transaction can 

19 be populated from the data from a paper 

20 version; 

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

22 order to allow automated reconciliation with the 

23 related health care payment and remittance ad24 vice; 


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1 ‘‘(D) require timely and transparent claim 

2 and denial management processes, including 

3 tracking, adjudication, and appeal processing; 

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

7 health plan to conduct the other electronic 

8 transactions provided for in this part; and 

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

11 by the Secretary, in consultation with stake12 holders. 

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

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

17 ‘‘(6) IMPLEMENTATION AND ENFORCEMENT.— 

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

20 the appropriate committees of Congress a plan for 

21 the implementation and enforcement, by not later 

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

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


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

4 ‘‘(B) an expedited upgrade program for 

5 continually developing and approving additions 

6 and modifications to the standards as often as 

7 annually to improve their quality and extend 

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

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

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

14 underserved areas and ensure coordination with 

15 standards, implementation specifications, and 

16 certification criteria being adopted under the 

17 HITECH Act; 

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

19 and ease the burden of, health care providers 

20 who volunteer to participate in the process of 

21 setting standards for electronic transactions; 

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

23 ensure timely completion of the implementation 

24 plan; and 


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1 ‘‘(F) an enforcement process that includes 

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

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

6 a fair and reasonable appeals process building 

7 off of enforcement provisions under this part. 

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

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

11 adversely affect any individual. 

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

15 are— 

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

17 the HIPAA privacy and security law (as defined in 

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

19 Act), including any privacy or security standard 

20 adopted under section 3004 of such Act; and 

21 ‘‘(2) protected from all inappropriate internal 

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

23 data, including use of such data in determinations of 

24 eligibility (or continued eligibility) in health plans, 


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1 and from other inappropriate uses, as defined by the 

2 Secretary.’’. 

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

4 (42 U.S.C. 1320d) is amended— 

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

6 reference to’’ and all that follows and inserting 

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

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

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

15 paragraph: 

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

17 rules’ means business rules for using and processing 

18 transactions. Operating rules should address the fol19 lowing: 

20 ‘‘(A) Requirements for data content using 

21 available and established national standards. 

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

24 to yield timely execution of transactions. 


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

3 are transmitting or receiving data.’’. 

4 (3) CONFORMING AMENDMENT.—Section 

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

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

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

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

11 (b) STANDARDS FOR CLAIMS ATTACHMENTS AND

12 COORDINATION OF BENEFITS .— 

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

15 enactment of this Act, the Secretary of Health and 

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

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

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

20 and coordination of benefits. 

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

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

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


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

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

4 business associate for a covered entity)’’ 

5 after ‘‘for a financial institution’’. 

6 (B) EFFECTIVE DATE.—The amendments 

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

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

11 and Human Services shall specify. 

12 SEC. 164. REINSURANCE PROGRAM FOR RETIREES. 

13 (a) ESTABLISHMENT.— 

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

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

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

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

20 plans with the cost of providing health benefits to 

21 retirees and to eligible spouses, surviving spouses 

22 and dependents of such retirees. 

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


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

2 plan’’ means a group health benefits plan 

3 that— 

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

8 of individuals appointed to administer such 

9 plan, and 

10 (ii) provides health benefits to retir11 ees. 

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

13 medical, surgical, hospital, prescription drug, 

14 and such other benefits as shall be determined 

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

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

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

24 plan, an individual who— 

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


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1 (ii) is not eligible for coverage under 

2 title XVIII of the Social Security Act; and 

3 (iii) is not an active employee of an 

4 employer maintaining the plan or of any 

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

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

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

10 the reinsurance program, an eligible employment-based 

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

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

15 (c) PAYMENT.— 

16 (1) SUBMISSION OF CLAIMS.— 

17 (A) IN GENERAL.—Under the reinsurance 

18 program, a participating employment-based 

19 plan shall submit claims for reimbursement to 

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

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

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1 pating employment-based plan involved within 

2 the plan year for the appropriate employment 

3 based health benefits provided to a retiree or to 

4 the spouse, surviving spouse, or dependent of a 

5 retiree. In determining the amount of any claim 

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

8 account any negotiated price concessions (such 

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

12 benefits. For purposes of calculating the 

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

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

17 be included along with the amounts paid by the 

18 participating employment-based plan. 

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

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

22 paragraph (1), the Secretary shall reimburse such 

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

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


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1 each year based on the percentage increase in the 

2 medical care component of the Consumer Price 

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

4 for the year involved. 

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

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

9 benefits provided under such plan in the form of 

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

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

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

14 Secretary shall develop a mechanism to monitor the 

15 appropriate use of such payments by such plans. 

16 (4) APPEALS AND PROGRAM PROTECTIONS.— 

17 The Secretary shall establish— 

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

21 claims submitted under this section; and 

22 (B) procedures to protect against fraud, 

23 waste, and abuse under the program. 

24 (5) AUDITS.—The Secretary shall conduct an25 nual audits of claims data submitted by particiVerDate Nov 24 2008 23:22 Jul 14, 2009 Jkt 079200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 pating employment-based plans under this section to 

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

4 (d) RETIREE RESERVE TRUST FUND.— 

5 (1) ESTABLISHMENT.— 

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

7 the Treasury of the United States a trust fund 

8 to be known as the ‘‘Retiree Reserve Trust 

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

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

11 may be appropriated or credited to the Trust 

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

14 program. Such amounts shall remain available 

15 until expended. 

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

18 in the Treasury not otherwise appropriated, an 

19 amount requested by the Secretary as necessary 

20 to carry out this section, except that the total 

21 of all such amounts requested shall not exceed 

22 $10,000,000,000. 

23 (C) APPROPRIATIONS FROM THE TRUST

24 FUND.— 


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1 (i) IN GENERAL.—Amounts in the 

2 Trust Fund are appropriated to provide 

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

5 program. 

6 (ii) BUDGETARY IMPLICATIONS.— 

7 Amounts appropriated under clause (i), 

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

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

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

13 and Emergency Deficit Control Act and 

14 budget resolutions for fiscal years during 

15 which appropriations are made from the 

16 Trust Fund. 

17 (iii) LIMITATION TO AVAILABLE

18 FUNDS.—The Secretary has the authority 

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

21 steps in reducing expenditures under the 

22 reinsurance program in order to ensure 

23 that expenditures under the reinsurance 

24 program do not exceed the funds available 

25 under this subsection. 


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1 TITLE II—HEALTH INSURANCE 

2 EXCHANGE AND RELATED 

3 PROVISIONS 

4 Subtitle A—Health Insurance 

5 Exchange 

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

8 (a) ESTABLISHMENT.—There is established within 

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

11 in order to facilitate access of individuals and employers, 

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

13 affordable, quality health insurance coverage, including a 

14 public health insurance option. 

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

19 (1) under section 204 establish standards for, 

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

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

25 to oversight and enforcement; 


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1 (2) under section 205 facilitate outreach and 

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

4 (3) conduct such activities related to the Health 

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

7 and consumer protections under subtitle D of title I. 

8 (c) EXCHANGE-PARTICIPATING HEALTH BENEFITS

9 PLAN DEFINED.—In this division, the term ‘‘Exchange10 participating health benefits plan’’ means a qualified 

11 health benefits plan that is offered through the Health In12 surance Exchange. 

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

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

16 section, all individuals are eligible to obtain coverage 

17 through enrollment in an Exchange-participating health 

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

20 qualified health benefits plan or other acceptable coverage. 

21 (b) DEFINITIONS.—In this division: 

22 (1) EXCHANGE-ELIGIBLE INDIVIDUAL.—The 

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


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1 Exchange-participating health benefits plan and, 

2 with respect to family coverage, includes dependents 

3 of such individual. 

4 (2) EXCHANGE-ELIGIBLE EMPLOYER.—The 

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

7 through the Health Insurance Exchange employees 

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

10 (3) EMPLOYMENT-RELATED DEFINITIONS.— 

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

15 (c) TRANSITION.—Individuals and employers shall 

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

18 schedule: 

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

20 100(c))— 

21 (A) individuals described in subsection 

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

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


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1 (2) SECOND YEAR.—In Y2— 

2 (A) individuals and employers described in 

3 paragraph (1); and 

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

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

7 and subsequent years— 

8 (A) individuals and employers described in 

9 paragraph (2); and 

10 (B) larger employers as permitted by the 

11 Commissioner under subsection (e)(3). 

12 (d) INDIVIDUALS.— 

13 (1) INDIVIDUAL DESCRIBED.—Subject to the 

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

16 who— 

17 (A) is not enrolled in coverage described in 

18 subparagraphs (C) through (F) of paragraph 

19 (2); and 

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

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

24 plan meet the requirements of section 312. 


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

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

3 employee, and who meets the requirements of section 

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

6 (2) ACCEPTABLE COVERAGE.—For purposes of 

7 this division, the term ‘‘acceptable coverage’’ means 

8 any of the following: 

9 (A) QUALIFIED HEALTH BENEFITS PLAN

10 COVERAGE.—Coverage under a qualified health 

11 benefits plan. 

12 (B) GRANDFATHERED HEALTH INSURANCE

13 COVERAGE; COVERAGE UNDER CURRENT GROUP

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

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

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

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

20 title XVIII of the Social Security Act. 

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

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

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


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1 (E) MEMBERS OF THE ARMED FORCES

2 AND DEPENDENTS (INCLUDING TRICARE).— 

3 Coverage under chapter 55 of title 10, United 

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

6 Code. 

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

8 health care program under chapter 17 of title 

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

11 by the Commissioner in coordination with the 

12 Secretary of Treasury to be not less than a level 

13 specified by the Commissioner and Secretary of 

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

16 priority for services as provided under section 

17 1705(a) of such title. 

18 (G) OTHER COVERAGE.—Such other health 

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

23 The Commissioner shall make determinations under 

24 this paragraph in coordination with the Secretary of 

25 the Treasury. 


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

5 State may be an Exchange-eligible individual if the 

6 individual was enrolled in a qualified health benefits 

7 plan, grandfathered health insurance coverage, or 

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

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

14 under Medicaid. 

15 (4) CONTINUING ELIGIBILITY PERMITTED.— 

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

17 subparagraph (B), once an individual qualifies 

18 as an Exchange-eligible individual under this 

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

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


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1 with an Exchange-participating health benefits 

2 plan. 

3 (B) EXCEPTIONS.— 

4 (i) IN GENERAL.—Subparagraph (A) 

5 shall not apply to an individual once the 

6 individual becomes eligible for coverage— 

7 (I) under part A of the Medicare 

8 program; 

9 (II) under the Medicaid program 

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

12 (3) or clause (ii); or 

13 (III) in such other circumstances 

14 as the Commissioner may provide. 

15 (ii) TRANSITION PERIOD.—In the case 

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

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

22 in the individual’s access to health care. 

23 (e) EMPLOYERS.— 


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

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

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

9 (3) LARGER EMPLOYERS.— 

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

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

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

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

18 such other considerations as the Commissioner 

19 deems appropriate. 

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

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1 gardless of the number of employees involved unless 

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

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

6 (5) EMPLOYER PARTICIPATION AND CONTRIBU7 TIONS.— 

8 (A) SATISFACTION OF EMPLOYER RESPON9 SIBILITY.—For any year in which an employer 

10 is an Exchange-eligible employer, such employer 

11 may meet the requirements of section 312 with 

12 respect to employees of such employer by offer13 ing such employees the option of enrolling with 

14 Exchange-participating health benefits plans 

15 through the Health Insurance Exchange con16 sistent with the provisions of subtitle B of title 

17 III. 

18 (B) EMPLOYEE CHOICE.—Any employee 

19 offered Exchange-participating health benefits 

20 plans by the employer of such employee under 

21 subparagraph (A) may choose coverage under 

22 any such plan. That choice includes, with re23 spect to family coverage, coverage of the de24 pendents of such employee. 


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1 (6) AFFILIATED GROUPS.—Any employer which 

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

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

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

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

6 as a single employer. 

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

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

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

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

15 as Exchange-eligible individuals and employers, such as 

16 transition periods for individuals and employers who gain, 

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

19 (g) SURVEYS OF INDIVIDUALS AND EMPLOYERS.— 

20 The Commissioner shall provide for periodic surveys of 

21 Exchange-eligible individuals and employers concerning 

22 satisfaction of such individuals and employers with the 

23 Health Insurance Exchange and Exchange-participating 

24 health benefits plans. 

25 (h) EXCHANGE ACCESS STUDY.— 


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

4 individuals and employers who are not eligible and 

5 enrolled in Exchange-participating health benefits 

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

7 are significant groups and types of individuals and 

8 employers who are not Exchange eligible individuals 

9 or employers, but who would have improved benefits 

10 and affordability if made eligible for coverage in the 

11 Exchange. 

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

13 also shall examine— 

14 (A) the terms, conditions, and affordability 

15 of group health coverage offered by employers 

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

18 health benefits plans; and 

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

21 in the Health Insurance Exchange. 

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

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

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1 ommendations regarding changes in standards for 

2 Exchange eligibility for for individuals and employ3 ers. 

4 SEC. 203. BENEFITS PACKAGE LEVELS. 

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

6 the benefits to be made available under Exchange-partici7 pating health benefits plans during each plan year, con8 sistent with subtitle C of title I and this section. 

9 (b) LIMITATION ON HEALTH BENEFITS PLANS OF10 FERED BY OFFERING ENTITIES.—The Commissioner may 

11 not enter into a contract with a QHBP offering entity 

12 under section 204(c) for the offering of an Exchange-par13 ticipating health benefits plan in a service area unless the 

14 following requirements are met: 

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

16 entity offers only one basic plan for such service 

17 area. 

18 (2) OPTIONAL OFFERING OF ENHANCED

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

20 for such service area, the entity may offer one en21 hanced plan for such area. 

22 (3) OPTIONAL OFFERING OF PREMIUM PLAN.— 

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

24 such service area, the entity may offer one premium 

25 plan for such area. 


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1 (4) OPTIONAL OFFERING OF PREMIUM-PLUS

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

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

4 or more premium-plus plans for such area. 

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

6 the Commissioner. 

7 (c) SPECIFICATION OF BENEFIT LEVELS FOR

8 PLANS.— 

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

11 subsection and title I: 

12 (A) BASIC, ENHANCED, AND PREMIUM

13 PLANS.—Standards for 3 levels of Exchange14 participating health benefits plans: basic, en15 hanced, and premium (in this division referred 

16 to as a ‘‘basic plan’’, ‘‘enhanced plan’’, and 

17 ‘‘premium plan’’, respectively). 

18 (B) PREMIUM-PLUS PLAN BENEFITS.— 

19 Standards for additional benefits that may be 

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

22 a plan with additional benefits referred to in 

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

24 (2) BASIC PLAN.— 


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

2 the essential benefits package required under 

3 title I for a qualified health benefits plan. 

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

6 case of an affordable credit eligible individual 

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

8 Exchange-participating health benefits plan, the 

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

11 tier applicable to the individual under section 

12 244(c). 

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

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

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

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

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

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

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

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

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

22 plan is a premium plan that also provides additional 

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

24 approved by the Commissioner. The portion of the 


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

3 (6) RANGE OF PERMISSIBLE VARIATION IN

4 COST-SHARING.—The Commissioner shall establish a 

5 permissible range of variation of cost-sharing for 

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

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

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

12 under section 122. 

13 (d) TREATMENT OF STATE BENEFIT MANDATES.— 

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

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

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

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


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

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

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

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

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

9 for— 

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

12 benefits plan; and 

13 (ii) for Exchange-participating health 

14 benefits plans; and 

15 (B) certify QHBP offering entities and 

16 qualified health benefits plans as meeting such 

17 standards and requirements of this title and 

18 title I for purposes of this subtitle. 

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

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

23 health benefits plans; 

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

26 such plans; and 


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1 (C) enter into contracts with such entities 

2 for the offering of such plans through the 

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

5 Commissioner and such entities. 

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

7 the Federal Acquisition Regulation shall not apply to 

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

11 (b) STANDARDS FOR QHBP OFFERING ENTITIES TO

12 OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS

13 PLANS.—The standards established under subsection 

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

15 entity to offer an Exchange-participating health benefits 

16 plan, the entity must meet the following requirements: 

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

18 offer health insurance coverage under State law for 

19 each State in which it is offering such coverage. 

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

22 Commissioner may specify, including information 

23 necessary to administer the risk pooling mechanism 

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


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

3 the affordability credits provided for enrollees under 

4 subtitle C, including the reduction in cost-sharing 

5 under section 244(c). 

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

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

9 with the requirements under title I for a qualified 

10 health benefits plan. The entity shall notify the 

11 Commissioner if the entity projects or anticipates 

12 reaching such a capacity limitation that would result 

13 in a limitation in enrollment. 

14 (5) RISK POOLING PARTICIPATION.—The entity 

15 shall participate in such risk pooling mechanism as 

16 the Commissioner establishes under section 206(b). 

17 (6) ESSENTIAL COMMUNITY PROVIDERS.—With 

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

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

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

22 2009). The Commissioner shall specify the extent to 

23 which and manner in which the previous sentence 

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

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1 stantially all benefits through a health maintenance 

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

3 Public Health Service Act. 

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

8 (8) ADDITIONAL REQUIREMENTS.—The entity 

9 shall comply with other applicable requirements of 

10 this title, as specified by the Commissioner, which 

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

14 the entity does not use coercive practices to force 

15 providers not to contract with other entities offering 

16 coverage through the Health Insurance Exchange. 

17 (c) CONTRACTS.— 

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

19 into a contract under this section, a QHBP offering 

20 entity shall submit to the Commissioner a bid at 

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

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

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1 cally renewable from term to term in the absence of 

2 notice of termination by either party. 

3 (3) ENFORCEMENT OF NETWORK ADEQUACY.— 

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

7 that if— 

8 (A) the Commissioner determines that 

9 such provider network does not meet such 

10 standards as the Commissioner shall establish 

11 under section 115; and 

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

14 is not within such network; 

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

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

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

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

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1 keting of such plans. Such processes shall include 

2 the following: 

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

5 coordination with State insurance regulators, a 

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

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

11 Health Insurance Exchange, the Commissioner 

12 may impose one or more of the intermediate 

13 sanctions described in section 142(c). 

14 (C) TERMINATION.— 

15 (i) IN GENERAL.—The Commissioner 

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

19 benefits plan if such entity fails to comply 

20 with the applicable requirements of this 

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

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

25 by the Commissioner under which— 


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1 (I) the Commissioner provides 

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

4 corrective action plan to correct the 

5 deficiencies that were the basis of the 

6 Commissioner’s determination; and 

7 (II) the Commissioner provides 

8 the entity with reasonable notice and 

9 opportunity for hearing (including the 

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

12 (ii) EXCEPTION FOR IMMINENT AND

13 SERIOUS RISK TO HEALTH.—Clause (i) 

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

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

21 plan of the QHBP offering entity. 

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


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1 title I with respect to an entity for a violation 

2 of such a requirement. 

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

6 PLAN. 

7 (a) IN GENERAL.— 

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

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

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

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

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

19 (2) ELIGIBILITY.—The Commissioner shall 

20 make timely determinations of whether individuals 

21 and employers are Exchange-eligible individuals and 

22 employers (as defined in section 202). 

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


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

3 (b) ENROLLMENT PROCESS.— 

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

7 plans. Such process shall provide for enrollment 

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

10 (2) ENROLLMENT PERIODS.— 

11 (A) OPEN ENROLLMENT PERIOD.—The 

12 Commissioner shall establish an annual open 

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

15 in an Exchange-participating health benefits 

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

19 through November of each year, or such other 

20 time that would maximize timeliness of income 

21 verification for purposes of such subtitle. The 

22 open enrollment period shall not be less than 30 

23 days. 

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

3 as an individual who— 

4 (i) loses acceptable coverage; 

5 (ii) experiences a change in marital or 

6 other dependent status; 

7 (iii) moves outside the service area of 

8 the Exchange-participating health benefits 

9 plan in which the individual is enrolled; or 

10 (iv) experiences a significant change 

11 in income. 

12 (C) ENROLLMENT INFORMATION.—The 

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

16 each open enrollment period. In carrying out 

17 the previous sentence, the Commissioner may 

18 work with other appropriate entities to facilitate 

19 such provision of information. 

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

22 (A) IN GENERAL.—The Commissioner 

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


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

3 involve a random assignment or some other 

4 form of assignment that takes into account the 

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

7 Commissioner may specify. 

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

11 who is either of the following: 

12 (i) AFFORDABILITY CREDIT ELIGIBLE

13 INDIVIDUALS.—The individual— 

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

16 credits under subtitle C; 

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

19 (III) does not otherwise enroll in 

20 another Exchange-participating health 

21 benefits plan. 

22 (ii) INDIVIDUALS ENROLLED IN A

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

25 benefits plan that is terminated (during or 


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

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

4 (4) DIRECT PAYMENT OF PREMIUMS TO

5 PLANS.—Under the enrollment process, individuals 

6 enrolled in an Exchange-partcipating health benefits 

7 plan shall pay such plans directly, and not through 

8 the Commissioner or the Health Insurance Ex9 change. 

10 (c) COVERAGE INFORMATION AND ASSISTANCE.— 

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

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

15 shall be provided in a comparative manner, and shall 

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

18 satisfaction. 

19 (2) CONSUMER ASSISTANCE WITH CHOICE.—To 

20 provide assistance to Exchange-eligible individuals 

21 and employers, the Commissioner shall— 

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

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

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1 tion on coverage under Exchange-participating 

2 health benefits plans and file complaints; 

3 (B) develop and disseminate information to 

4 Exchange-eligible enrollees on their rights and 

5 responsibilities; 

6 (C) assist Exchange-eligible individuals in 

7 selecting Exchange-participating health benefits 

8 plans and obtaining benefits through such 

9 plans; and 

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

13 using plain language (as defined in section 

14 133(a)(2)). 

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

16 this subsection, the Commissioner may work with 

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

20 (d) SPECIAL DUTIES RELATED TO MEDICAID AND

21 CHIP.— 

22 (1) COVERAGE FOR CERTAIN NEWBORNS.— 

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

24 born in the United States who at the time of 

25 birth is not otherwise covered under acceptable 


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1 coverage, for the period of time beginning on 

2 the date of birth and ending on the date the 

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

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

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

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

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

10 Medicaid; and 

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

13 (3). 

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

16 the case of a child described in subparagraph 

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

18 such subparagraph is not otherwise covered 

19 under acceptable coverage, the child shall be 

20 deemed (until such time as the child obtains 

21 such coverage or the State otherwise makes a 

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

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

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

2 such Act. 

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

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

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

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

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

9 Exchange-eligible individual unless the individual is 

10 a traditional Medicaid eligible individual as of such 

11 day. 

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

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

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

18 under Medicaid. 

19 (4) NOTIFICATIONS.—The Commissioner shall 

20 notify each State in Y1 and for purposes of section 

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

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

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


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1 (e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE

2 INDIVIDUALS.— 

3 (1) IN GENERAL.— 

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

6 process under subsection (b), the Commissioner 

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

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

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

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

16 apply, in the manner described in section 

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

18 individual is a Medicaid-eligible individual. If 

19 the individual is determined to be so eligible, 

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

22 enrollment of the individual under the State 

23 Medicaid plan in accordance with the Medicaid 

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


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

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

5 State Medicaid agency. 

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

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

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

11 for the enrollment of the individual under the State 

12 Medicaid plan in accordance with the Medicaid 

13 memorandum of understanding under paragraph 

14 (4). 

15 (3) COORDINATED ENROLLMENT WITH STATE

16 THROUGH MEMORANDUM OF UNDERSTANDING.— 

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

19 into a memorandum of understanding with each 

20 State (each in this division referred to as a ‘‘Med21 icaid memorandum of understanding’’) with respect 

22 to coordinating enrollment of individuals in Ex23 change-participating health benefits plans and under 

24 the State’s Medicaid program consistent with this 

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1 tion of the provisions of this division with respect to 

2 the Medicaid program. Such memorandum shall per3 mit the exchange of information consistent with the 

4 limitations described in section 1902(a)(7) of the So5 cial Security Act. Nothing in this section shall be 

6 construed as permitting such memorandum to mod7 ify or vitiate any requirement of a State Medicaid 

8 plan. 

9 (4) MEDICAID ELIGIBLE INDIVIDUALS.—For 

10 purposes of this division: 

11 (A) MEDICAID ELIGIBLE INDIVIDUAL.— 

12 The term ‘‘Medicaid eligible individual’’ means 

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

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

19 (i) a Medicaid eligible individual by 

20 reason of the application of subclause 

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

22 Social Security Act; or 

23 (ii) a childless adult not described in 

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


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

2 of the enactment of this Act). 

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

5 Medicaid eligible individual’’ means a Medicaid 

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

8 (f) EFFECTIVE CULTURALLY AND LINGUISTICALLY

9 APPROPRIATE COMMUNICATION.—In carrying out this 

10 section, the Commissioner shall establish effective methods 

11 for communicating in plain language and a culturally and 

12 linguistically appropriate manner. 

13 SEC. 206. OTHER FUNCTIONS. 

14 (a) COORDINATION OF AFFORDABILITY CREDITS.— 

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

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

21 adjustment made of the premium amounts payable among 

22 QHBP offering entities offering Exchange-participating 

23 health benefits plans of premiums collected for such plans 

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

3 entities so as to minimize the impact of adverse selection 

4 of enrollees among the plans offered by such entities. 

5 (c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH

6 INSURANCE EXCHANGE.— 

7 (1) ESTABLISHMENT; APPOINTMENT.—There is 

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

10 be headed by a Special Inspector General for the 

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

13 appointed by the President, by and with the advice 

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

16 as soon as practicable after the establishment of the 

17 program under this subtitle. 

18 (2) DUTIES.—The Special Inspector General 

19 shall— 

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

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

24 well as the health and welfare of participants in 

25 the Exchange; 


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1 (B) report both to the Commissioner and 

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

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

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

9 and 

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

12 carrying out duties under this paragraph. 

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

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

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

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

21 to the Special Inspector General under such section. 

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

23 the confirmation of the Special Inspector General, 

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


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1 Congress a report summarizing the activities of the 

2 Special Inspector General during the one year period 

3 ending on the date such report is submitted. 

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

5 Inspector General shall terminate five years after 

6 the date of the enactment of this Act. 

7 SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 

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

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

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

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

13 such amounts as may be appropriated or credited to the 

14 Trust Fund under this section or any other provision of 

15 law. 

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

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

20 Exchange, including payments under subtitle C (relating 

21 to affordability credits). 

22 (c) TRANSFERS TO TRUST FUND.— 

23 (1) DEDICATED PAYMENTS.—There is hereby 

24 appropriated to the Trust Fund amounts equivalent 

25 to the following: 


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

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

7 (B) EMPLOYMENT TAXES ON EMPLOYERS

8 NOT PROVIDING ACCEPTABLE COVERAGE.—The 

9 amounts received in the Treasury under section 

10 3111(c) of the Internal Revenue Code of 1986 

11 (relating to employers electing to not provide 

12 health benefits). 

13 (C) EXCISE TAX ON FAILURES TO MEET

14 CERTAIN HEALTH COVERAGE REQUIRE15 MENTS.—The amounts received in the Treasury 

16 under section 4980H(b) (relating to excise tax 

17 with respect to failure to meet health coverage 

18 participation requirements). 

19 (2) APPROPRIATIONS TO COVER GOVERNMENT

20 CONTRIBUTIONS.—There are hereby appropriated, 

21 out of any moneys in the Treasury not otherwise ap22 propriated, to the Trust Fund, an amount equivalent 

23 to the amount of payments made from the Trust 

24 Fund under subsection (b) plus such amounts as are 


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1 necessary reduced by the amounts deposited under 

2 paragraph (1). 

3 (d) APPLICATION OF CERTAIN RULES.—Rules simi4 lar to the rules of subchapter B of chapter 98 of the Inter5 nal Revenue Code of 1986 shall apply with respect to the 

6 Trust Fund. 

7 SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH 

8 INSURANCE EXCHANGES. 

9 (a) IN GENERAL.—If— 

10 (1) a State (or group of States, subject to the 

11 approval of the Commissioner) applies to the Com12 missioner for approval of a State-based Health In13 surance Exchange to operate in the State (or group 

14 of States); and 

15 (2) the Commissioner approves such State16 based Health Insurance Exchange, 

17 then, subject to subsections (c) and (d), the State-based 

18 Health Insurance Exchange shall operate, instead of the 

19 Health Insurance Exchange, with respect to such State 

20 (or group of States). The Commissioner shall approve a 

21 State-based Health Insurance Exchange if it meets the re22 quirements for approval under subsection (b). 

23 (b) REQUIREMENTS FOR APPROVAL.—The Commis24 sioner may not approve a State-based Health Insurance 


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1 Exchange under this section unless the following require2 ments are met: 

3 (1) The State-based Health Insurance Ex4 change must demonstrate the capacity to and pro5 vide assurances satisfactory to the Commissioner 

6 that the State-based Health Insurance Exchange will 

7 carry out the functions specified for the Health In8 surance Exchange in the State (or States) involved, 

9 including— 

10 (A) negotiating and contracting with 

11 QHBP offering entities for the offering of Ex12 change-participating health benefits plan, which 

13 satisfy the standards and requirements of this 

14 title and title I; 

15 (B) enrolling Exchange-eligible individuals 

16 and employers in such State in such plans; 

17 (C) the establishment of sufficient local of18 fices to meet the needs of Exchange-eligible in19 dividuals and employers; 

20 (D) administering affordability credits 

21 under subtitle B using the same methodologies 

22 (and at least the same income verification 

23 methods) as would otherwise apply under such 

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1 ment which does exceed the cost to the Federal 

2 Government if this section did not apply; and 

3 (E) enforcement activities consistent with 

4 federal requirements. 

5 (2) There is no more than one Health Insur6 ance Exchange operating with respect to any one 

7 State. 

8 (3) The State provides assurances satisfactory 

9 to the Commissioner that approval of such an Ex10 change will not result in any net increase in expendi11 tures to the Federal Government. 

12 (4) The State provides for reporting of such in13 formation as the Commissioner determines and as14 surances satisfactory to the Commissioner that it 

15 will vigorously enforce violations of applicable re16 quirements. 

17 (5) Such other requirements as the Commis18 sioner may specify. 

19 (c) CEASING OPERATION.— 

20 (1) IN GENERAL.—A State-based Health Insur21 ance Exchange may, at the option of each State in22 volved, and only after providing timely and reason23 able notice to the Commissioner, cease operation as 

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1 based Health Insurance Exchange, with respect to 

2 such State (or States). 

3 (2) TERMINATION; HEALTH INSURANCE EX4 CHANGE RESUMPTION OF FUNCTIONS.—The Com5 missioner may terminate the approval (for some or 

6 all functions) of a State-based Health Insurance Ex7 change under this section if the Commissioner deter8 mines that such Exchange no longer meets the re9 quirements of subsection (b) or is no longer capable 

10 of carrying out such functions in accordance with 

11 the requirements of this subtitle. In lieu of termi12 nating such approval, the Commissioner may tempo13 rarily assume some or all functions of the State14 based Health Insurance Exchange until such time as 

15 the Commissioner determines the State-based 

16 Health Insurance Exchange meets such require17 ments of subsection (b) and is capable of carrying 

18 out such functions in accordance with the require19 ments of this subtitle. 

20 (3) EFFECTIVENESS.—The ceasing or termi21 nation of a State-based Health Insurance Exchange 

22 under this subsection shall be effective in such time 

23 and manner as the Commissioner shall specify. 

24 (d) RETENTION OF AUTHORITY.— 


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1 (1) AUTHORITY RETAINED.—Enforcement au2 thorities of the Commissioner shall be retained by 

3 the Commissioner. 

4 (2) DISCRETION TO RETAIN ADDITIONAL AU5 THORITY.—The Commissioner may specify functions 

6 of the Health Insurance Exchange that— 

7 (A) may not be performed by a State8 based Health Insurance Exchange under this 

9 section; or 

10 (B) may be performed by the Commis11 sioner and by such a State-based Health Insur12 ance Exchange. 

13 (e) REFERENCES.—In the case of a State-based 

14 Health Insurance Exchange, except as the Commissioner 

15 may otherwise specify under subsection (d), any references 

16 in this subtitle to the Health Insurance Exchange or to 

17 the Commissioner in the area in which the State-based 

18 Health Insurance Exchange operates shall be deemed a 

19 reference to the State-based Health Insurance Exchange 

20 and the head of such Exchange, respectively. 

21 (f) FUNDING.—In the case of a State-based Health 

22 Insurance Exchange, there shall be assistance provided for 

23 the operation of such Exchange in the form of a matching 

24 grant with a State share of expenditures required. 


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1 Subtitle B—Public Health 

2 Insurance Option 

3 SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A 

4 PUBLIC HEALTH INSURANCE OPTION AS AN 

5 EXCHANGE-QUALIFIED HEALTH BENEFITS 

6 PLAN. 

7 (a) ESTABLISHMENT.—For years beginning with Y1, 

8 the Secretary of Health and Human Services (in this sub9 title referred to as the ‘‘Secretary’’) shall provide for the 

10 offering of an Exchange-participating health benefits plan 

11 (in this division referred to as the ‘‘public health insurance 

12 option’’) that ensures choice, competition, and stability of 

13 affordable, high quality coverage throughout the United 

14 States in accordance with this subtitle. In designing the 

15 option, the Secretary’s primary responsibility is to create 

16 a low-cost plan without comprimising quality or access to 

17 care. 

18 (b) OFFERING AS AN EXCHANGE-PARTICIPATING

19 HEALTH BENEFITS PLAN.— 

20 (1) EXCLUSIVE TO THE EXCHANGE.—The pub21 lic health insurance option shall only be made avail22 able through the Health Insurance Exchange. 

23 (2) ENSURING A LEVEL PLAYING FIELD.—Con24 sistent with this subtitle, the public health insurance 

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1 plicable under this title to an Exchange-participating 

2 health benefits plan, including requirements related 

3 to benefits, benefit levels, provider networks, notices, 

4 consumer protections, and cost sharing. 

5 (3) PROVISION OF BENEFIT LEVELS.—The pub6 lic health insurance option— 

7 (A) shall offer basic, enhanced, and pre8 mium plans; and 

9 (B) may offer premium-plus plans. 

10 (c) ADMINISTRATIVE CONTRACTING.—The Secretary 

11 may enter into contracts for the purpose of performing 

12 administrative functions (including functions described in 

13 subsection (a)(4) of section 1874A of the Social Security 

14 Act) with respect to the public health insurance option in 

15 the same manner as the Secretary may enter into con16 tracts under subsection (a)(1) of such section. The Sec17 retary has the same authority with respect to the public 

18 health insurance option as the Secretary has under sub19 sections (a)(1) and (b) of section 1874A of the Social Se20 curity Act with respect to title XVIII of such Act. Con21 tracts under this subsection shall not involve the transfer 

22 of insurance risk to such entity. 

23 (d) OMBUDSMAN.—The Secretary shall establish an 

24 office of the ombudsman for the public health insurance 

25 option which shall have duties with respect to the public 


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1 health insurance option similar to the duties of the Medi2 care Beneficiary Ombudsman under section 1808(c)(2) of 

3 the Social Security Act. 

4 (e) DATA COLLECTION.—The Secretary shall collect 

5 such data as may be required to establish premiums and 

6 payment rates for the public health insurance option and 

7 for other purposes under this subtitle, including to im8 prove quality and to reduce racial, ethnic, and other dis9 parities in health and health care. 

10 (f) TREATMENT OF PUBLIC HEALTH INSURANCE OP11 TION.—With respect to the public health insurance option, 

12 the Secretary shall be treated as a QHBP offering entity 

13 offering an Exchange-participating health benefits plan. 

14 (g) ACCESS TO FEDERAL COURTS.—The provisions 

15 of Medicare (and related provisions of title II of the Social 

16 Security Act) relating to access of Medicare beneficiaries 

17 to Federal courts for the enforcement of rights under 

18 Medicare, including with respect to amounts in con19 troversy, shall apply to the public health insurance option 

20 and individuals enrolled under such option under this title 

21 in the same manner as such provisions apply to Medicare 

22 and Medicare beneficiaries. 

23 SEC. 222. PREMIUMS AND FINANCING. 

24 (a) ESTABLISHMENT OF PREMIUMS.— 


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1 (1) IN GENERAL.—The Secretary shall establish 

2 geographically-adjusted premium rates for the public 

3 health insurance option in a manner— 

4 (A) that complies with the premium rules 

5 established by the Commissioner under section 

6 113 for Exchange-participating health benefit 

7 plans; and 

8 (B) at a level sufficient to fully finance the 

9 costs of— 

10 (i) health benefits provided by the 

11 public health insurance option; and 

12 (ii) administrative costs related to op13 erating the public health insurance option. 

14 (2) CONTINGENCY MARGIN.—In establishing 

15 premium rates under paragraph (1), the Secretary 

16 shall include an appropriate amount for a contin17 gency margin. 

18 (b) ACCOUNT.— 

19 (1) ESTABLISHMENT.—There is established in 

20 the Treasury of the United States an Account for 

21 the receipts and disbursements attributable to the 

22 operation of the public health insurance option, in23 cluding the start-up funding under paragraph (2). 

24 Section 1854(g) of the Social Security Act shall 

25 apply to receipts described in the previous sentence 


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1 in the same manner as such section applies to pay2 ments or premiums described in such section. 

3 (2) START-UP FUNDING.— 

4 (A) IN GENERAL.—In order to provide for 

5 the establishment of the public health insurance 

6 option there is hereby appropriated to the Sec7 retary, out of any funds in the Treasury not 

8 otherwise appropriated, $2,000,000,000. In 

9 order to provide for initial claims reserves be10 fore the collection of premiums, there is hereby 

11 appropriated to the Secretary, out of any funds 

12 in the Treasury not otherwise appropriated, 

13 such sums as necessary to cover 90 days worth 

14 of claims reserves based on projected enroll15 ment. 

16 (B) AMORTIZATION OF START-UP FUND17 ING.—The Secretary shall provide for the re18 payment of the startup funding provided under 

19 subparagraph (A) to the Treasury in an amor20 tized manner over the 10-year period beginning 

21 with Y1. 

22 (C) LIMITATION ON FUNDING.—Nothing in 

23 this section shall be construed as authorizing 

24 any additional appropriations to the Account, 

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1 vided with respect to other Exchange-partici2 pating health benefits plans. 

3 SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES. 

4 (a) RATES ESTABLISHED BY SECRETARY.— 

5 (1) IN GENERAL.—The Secretary shall establish 

6 payment rates for the public health insurance option 

7 for services and health care providers consistent with 

8 this section and may change such payment rates in 

9 accordance with section 224. 

10 (2) INITIAL PAYMENT RULES.— 

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

12 subparagraph (B) and subsection (b)(1), during 

13 Y1, Y2, and Y3, the Secretary shall base the 

14 payment rates under this section for services 

15 and providers described in paragraph (1) on the 

16 payment rates for similar services and providers 

17 under parts A and B of Medicare. 

18 (B) EXCEPTIONS.— 

19 (i) PRACTITIONERS’ SERVICES.—Pay20 ment rates for practitioners’ services other21 wise established under the fee schedule 

22 under section 1848 of the Social Security 

23 Act shall be applied without regard to the 

24 provisions under subsection (f) of such sec25 tion and the update under subsection 


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1 (d)(4) under such section for a year as ap2 plied under this paragraph shall be not less 

3 than 1 percent. 

4 (ii) ADJUSTMENTS.—The Secretary 

5 may determine the extent to which Medi6 care adjustments applicable to base pay7 ment rates under parts A and B of Medi8 care shall apply under this subtitle. 

9 (3) FOR NEW SERVICES.—The Secretary shall 

10 modify payment rates described in paragraph (2) in 

11 order to accommodate payments for services, such as 

12 well-child visits, that are not otherwise covered 

13 under Medicare. 

14 (4) PRESCRIPTION DRUGS.—Payment rates 

15 under this section for prescription drugs that are not 

16 paid for under part A or part B of Medicare shall 

17 be at rates negotiated by the Secretary. 

18 (b) INCENTIVES FOR PARTICIPATING PROVIDERS.— 

19 (1) INITIAL INCENTIVE PERIOD.— 

20 (A) IN GENERAL.—The Secretary shall 

21 provide, in the case of services described in sub22 paragraph (B) furnished during Y1, Y2, and 

23 Y3, for payment rates that are 5 percent great24 er than the rates established under subsection 

25 (a). 


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1 (B) SERVICES DESCRIBED.—The services 

2 described in this subparagraph are items and 

3 professional services, under the public health in4 surance option by a physician or other health 

5 care practitioner who participates in both Medi6 care and the public health insurance option. 

7 (C) SPECIAL RULES.—A pediatrician and 

8 any other health care practitioner who is a type 

9 of practitioner that does not typically partici10 pate in Medicare (as determined by the Sec11 retary) shall also be eligible for the increased 

12 payment rates under subparagraph (A). 

13 (2) SUBSEQUENT PERIODS.—Beginning with 

14 Y4 and for subsequent years, the Secretary shall 

15 continue to use an administrative process to set such 

16 rates in order to promote payment accuracy, to en17 sure adequate beneficiary access to providers, and to 

18 promote affordablility and the efficient delivery of 

19 medical care consistent with section 221(a). Such 

20 rates shall not be set at levels expected to increase 

21 overall medical costs under the option beyond what 

22 would be expected if the process under subsection 

23 (a)(2) and paragraph (1) of this subsection were 

24 continued. 


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1 (3) ESTABLISHMENT OF A PROVIDER NET2 WORK.—Health care providers participating under 

3 Medicare are participating providers in the public 

4 health insurance option unless they opt out in a 

5 process established by the Secretary. 

6 (c) ADMINISTRATIVE PROCESS FOR SETTING

7 RATES.—Chapter 5 of title 5, United States Code shall 

8 apply to the process for the initial establishment of pay9 ment rates under this section but not to the specific meth10 odology for establishing such rates or the calculation of 

11 such rates. 

12 (d) CONSTRUCTION.—Nothing in this subtitle shall 

13 be construed as limiting the Secretary’s authority to cor14 rect for payments that are excessive or deficient, taking 

15 into account the provisions of section 221(a) and the 

16 amounts paid for similar health care providers and serv17 ices under other Exchange-participating health benefits 

18 plans. 

19 (e) CONSTRUCTION.—Nothing in this subtitle shall be 

20 construed as affecting the authority of the Secretary to 

21 establish payment rates, including payments to provide for 

22 the more efficient delivery of services, such as the initia23 tives provided for under section 224. 

24 (f) LIMITATIONS ON REVIEW.—There shall be no ad25 ministrative or judicial review of a payment rate or methVerDate Nov 24 2008 23:22 Jul 14, 2009 Jkt 079200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 odology established under this section or under section 

2 224. 

3 SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV4 ERY SYSTEM REFORM. 

5 (a) IN GENERAL.—For plan years beginning with Y1, 

6 the Secretary may utilize innovative payment mechanisms 

7 and policies to determine payments for items and services 

8 under the public health insurance option. The payment 

9 mechanisms and policies under this section may include 

10 patient-centered medical home and other care manage11 ment payments, accountable care organizations, value12 based purchasing, bundling of services, differential pay13 ment rates, performance or utilization based payments, 

14 partial capitation, and direct contracting with providers. 

15 (b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 

16 The Secretary shall design and implement the payment 

17 mechanisms and policies under this section in a manner 

18 that— 

19 (1) seeks to— 

20 (A) improve health outcomes; 

21 (B) reduce health disparities (including ra22 cial, ethnic, and other disparities); 

23 (C) provide efficent and affordable care; 

24 (D) address geographic variation in the 

25 provision of health services; or 


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1 (E) prevent or manage chronic illness; and 

2 (2) promotes care that is integrated, patient3 centered, quality, and efficient. 

4 (c) ENCOURAGING THE USE OF HIGH VALUE SERV5 ICES.—To the extent allowed by the benefit standards ap6 plied to all Exchange-participating health benefits plans, 

7 the public health insurance option may modify cost shar8 ing and payment rates to encourage the use of services 

9 that promote health and value. 

10 (d) NON-UNIFORMITY PERMITTED.—Nothing in this 

11 subtitle shall prevent the Secretary from varying payments 

12 based on different payment structure models (such as ac13 countable care organizations and medical homes) under 

14 the public health insurance option for different geographic 

15 areas. 

16 SEC. 225. PROVIDER PARTICIPATION. 

17 (a) IN GENERAL.—The Secretary shall establish con18 ditions of participation for health care providers under the 

19 public health insurance option. 

20 (b) LICENSURE OR CERTIFICATION.—The Secretary 

21 shall not allow a health care provider to participate in the 

22 public health insurance option unless such provider is ap23 propriately licensed or certified under State law. 

24 (c) PAYMENT TERMS FOR PROVIDERS.— 


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1 (1) PHYSICIANS.—The Secretary shall provide 

2 for the annual participation of physicians under the 

3 public health insurance option, for which payment 

4 may be made for services furnished during the year, 

5 in one of 2 classes: 

6 (A) PREFERRED PHYSICIANS.—Those phy7 sicians who agree to accept the payment rate 

8 established under section 223 (without regard 

9 to cost-sharing) as the payment in full. 

10 (B) PARTICIPATING, NON-PREFERRED

11 PHYSICIANS.—Those physicians who agree not 

12 to impose charges (in relation to the payment 

13 rate described in section 223 for such physi14 cians) that exceed the ratio permitted under 

15 section 1848(g)(2)(C) of the Social Security 

16 Act. 

17 (2) OTHER PROVIDERS.—The Secretary shall 

18 provide for the participation (on an annual or other 

19 basis specified by the Secretary) of health care pro20 viders (other than physicians) under the public 

21 health insurance option under which payment shall 

22 only be available if the provider agrees to accept the 

23 payment rate established under section 223 (without 

24 regard to cost-sharing) as the payment in full. 


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1 (d) EXCLUSION OF CERTAIN PROVIDERS.—The Sec2 retary shall exclude from participation under the public 

3 health insurance option a health care provider that is ex4 cluded from participation in a Federal health care pro5 gram (as defined in section 1128B(f) of the Social Secu6 rity Act). 

7 SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI8 SIONS. 

9 Provisions of law (other than criminal law provisions) 

10 identified by the Secretary by regulation, in consultation 

11 with the Inspector General of the Department of Health 

12 and Human Services, that impose sanctions with respect 

13 to waste, fraud, and abuse under Medicare, such as the 

14 False Claims Act (31 U.S.C. 3729 et seq.), shall also 

15 apply to the public health insurance option. 

16 Subtitle C—Individual 

17 Affordability Credits 

18 SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX19 CHANGE. 

20 (a) IN GENERAL.—Subject to the succeeding provi21 sions of this subtitle, in the case of an affordable credit 

22 eligible individual enrolled in an Exchange-participating 

23 health benefits plan— 


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1 (1) the individual shall be eligible for, in accord2 ance with this subtitle, affordability credits con3 sisting of— 

4 (A) an affordability premium credit under 

5 section 243 to be applied against the premium 

6 for the Exchange-participating health benefits 

7 plan in which the individual is enrolled; and 

8 (B) an affordability cost-sharing credit 

9 under section 244 to be applied as a reduction 

10 of the cost-sharing otherwise applicable to such 

11 plan; and 

12 (2) the Commissioner shall pay the QHBP of13 fering entity that offers such plan from the Health 

14 Insurance Exchange Trust Fund the aggregate 

15 amount of affordability credits for all affordable 

16 credit eligible individuals enrolled in such plan. 

17 (b) APPLICATION.— 

18 (1) IN GENERAL.—An Exchange eligible indi19 vidual may apply to the Commissioner through the 

20 Health Insurance Exchange or through another enti21 ty under an arrangement made with the Commis22 sioner, in a form and manner specified by the Com23 missioner. The Commissioner through the Health 

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1 sioner shall make a determination as to eligibility of 

2 an individual for affordability credits under this sub3 title. The Commissioner shall establish a process 

4 whereby, on the basis of information otherwise avail5 able, individuals may be deemed to be affordable 

6 credit eligible individuals. In carrying this subtitle, 

7 the Commissioner shall establish effective methods 

8 that ensure that individuals with limited English 

9 proficiency are able to apply for affordability credits. 

10 (2) USE OF STATE MEDICAID AGENCIES.—If 

11 the Commissioner determines that a State Medicaid 

12 agency has the capacity to make a determination of 

13 eligibility for affordability credits under this subtitle 

14 and under the same standards as used by the Com15 missioner, under the Medicaid memorandum of un16 derstanding (as defined in section 205(c)(4))— 

17 (A) the State Medicaid agency is author18 ized to conduct such determinations for any Ex19 change-eligible individual who requests such a 

20 determination; and 

21 (B) the Commissioner shall reimburse the 

22 State Medicaid agency for the costs of con23 ducting such determinations. 

24 (3) MEDICAID SCREEN AND ENROLL OBLIGA25 TION.—In the case of an application made under 


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1 paragraph (1), there shall be a determination of 

2 whether the individual is a Medicaid-eligible indi3 vidual. If the individual is determined to be so eligi4 ble, the Commissioner, through the Medicaid memo5 randum of understanding, shall provide for the en6 rollment of the individual under the State Medicaid 

7 plan in accordance with the Medicaid memorandum 

8 of understanding. In the case of such an enrollment, 

9 the State shall provide for the same periodic redeter10 mination of eligibility under Medicaid as would oth11 erwise apply if the individual had directly applied for 

12 medical assistance to the State Medicaid agency. 

13 (c) USE OF AFFORDABILITY CREDITS.— 

14 (1) IN GENERAL.—In Y1 and Y2 an affordable 

15 credit eligible individual may use an affordability 

16 credit only with respect to a basic plan. 

17 (2) FLEXIBILITY IN PLAN ENROLLMENT AU18 THORIZED.—Beginning with Y3, the Commissioner 

19 shall establish a process to allow an affordability 

20 credit to be used for enrollees in enhanced or pre21 mium plans. In the case of an affordable credit eligi22 ble individual who enrolls in an enhanced or pre23 mium plan, the individual shall be responsible for 

24 any difference between the premium for such plan 


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1 and the affordable credit amount otherwise applica2 ble if the individual had enrolled in a basic plan. 

3 (d) ACCESS TO DATA.—In carrying out this subtitle, 

4 the Commissioner shall request from the Secretary of the 

5 Treasury consistent with section 6103 of the Internal Rev6 enue Code of 1986 such information as may be required 

7 to carry out this subtitle. 

8 (e) NO CASH REBATES.—In no case shall an afford9 able credit eligible individual receive any cash payment as 

10 a result of the application of this subtitle. 

11 SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. 

12 (a) DEFINITION.— 

13 (1) IN GENERAL.—For purposes of this divi14 sion, the term ‘‘affordable credit eligible individual’’ 

15 means, subject to subsection (b), an individual who 

16 is lawfully present in a State in the United States 

17 (other than as a nonimmigrant described in a sub18 paragraph (excluding subparagraphs (K), (T), (U), 

19 and (V)) of section 101(a)(15) of the Immigration 

20 and Nationality Act)— 

21 (A) who is enrolled under an Exchange22 participating health benefits plan and is not en23 rolled under such plan as an employee (or de24 pendent of an employee) through an employer 


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1 qualified health benefits plan that meets the re2 quirements of section 312; 

3 (B) with family income below 400 percent 

4 of the Federal poverty level for a family of the 

5 size involved; and 

6 (C) who is not a Medicaid eligible indi7 vidual, other than an individual described in 

8 section 202(d)(3) or an individual during a 

9 transition period under section 202(d)(4)(B)(ii). 

10 (2) TREATMENT OF FAMILY.—Except as the 

11 Commissioner may otherwise provide, members of 

12 the same family who are affordable credit eligible in13 dividuals shall be treated as a single affordable cred14 it individual eligible for the applicable credit for such 

15 a family under this subtitle. 

16 (b) LIMITATIONS ON EMPLOYEE AND DEPENDENT

17 DISQUALIFICATION.— 

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

19 the term ‘‘affordable credit eligible individual’’ does 

20 not include a full-time employee of an employer if 

21 the employer offers the employee coverage (for the 

22 employee and dependents) as a full-time employee 

23 under a group health plan if the coverage and em24 ployer contribution under the plan meet the require25 ments of section 312. 


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1 (2) EXCEPTIONS.— 

2 (A) FOR CERTAIN FAMILY CIR3 CUMSTANCES.—The Commissioner shall estab4 lish such exceptions and special rules in the 

5 case described in paragraph (1) as may be ap6 propriate in the case of a divorced or separated 

7 individual or such a dependent of an employee 

8 who would otherwise be an affordable credit eli9 gible individual. 

10 (B) FOR UNAFFORDABLE EMPLOYER COV11 ERAGE.—Beginning in Y2, in the case of full12 time employees for which the cost of the em13 ployee premium for coverage under a group 

14 health plan would exceed 11 percent of current 

15 family income (determined by the Commissioner 

16 on the basis of verifiable documentation and 

17 without regard to section 245), paragraph (1) 

18 shall not apply. 

19 (c) INCOME DEFINED.— 

20 (1) IN GENERAL.—In this title, the term ‘‘in21 come’’ means modified adjusted gross income (as de22 fined in section 59B of the Internal Revenue Code 

23 of 1986). 

24 (2) STUDY OF INCOME DISREGARDS.—The 

25 Commissioner shall conduct a study that examines 


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1 the application of income disregards for purposes of 

2 this subtitle. Not later than the first day of Y2, the 

3 Commissioner shall submit to Congress a report on 

4 such study and shall include such recommendations 

5 as the Commissioner determines appropriate. 

6 (d) CLARIFICATION OF TREATMENT OF AFFORD7 ABILITY CREDITS.—Affordabilty credits under this sub8 title shall not be treated, for purposes of title IV of the 

9 Personal Responsibility and Work Opportunity Reconcili10 ation Act of 1996, to be a benefit provided under section 

11 403 of such title. 

12 SEC. 243. AFFORDABLE PREMIUM CREDIT. 

13 (a) IN GENERAL.—The affordability premium credit 

14 under this section for an affordable credit eligible indi15 vidual enrolled in an Exchange-participating health bene16 fits plan is in an amount equal to the amount (if any) 

17 by which the premium for the plan (or, if less, the ref18 erence premium amount specified in subsection (c)), ex19 ceeds the affordable premium amount specified in sub20 section (b) for the individual. 

21 (b) AFFORDABLE PREMIUM AMOUNT.— 

22 (1) IN GENERAL.—The affordable premium 

23 amount specified in this subsection for an individual 

24 for monthly premium in a plan year shall be equal 

to 1 25 ⁄12 of the product of— 


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1 (A) the premium percentage limit specified 

2 in paragraph (2) for the individual based upon 

3 the individual’s family income for the plan year; 

4 and 

5 (B) the individual’s family income for such 

6 plan year. 

7 (2) PREMIUM PERCENTAGE LIMITS BASED ON

8 TABLE.—The Commissioner shall establish premium 

9 percentage limits so that for individuals whose fam10 ily income is within an income tier specified in the 

11 table in subsection (d) such percentage limits shall 

12 increase, on a sliding scale in a linear manner, from 

13 the initial premium percentage to the final premium 

14 percentage specified in such table for such income 

15 tier. 

16 (c) REFERENCE PREMIUM AMOUNT.—The reference 

17 premium amount specified in this subsection for a plan 

18 year for an individual in a premium rating area is equal 

19 to the average premium for the 3 basic plans in the area 

20 for the plan year with the lowest premium levels. In com21 puting such amount the Commissioner may exclude plans 

22 with extremely limited enrollments. 

23 (d) TABLE OF PREMIUM PERCENTAGE LIMITS AND

24 ACTUARIAL VALUE PERCENTAGES BASED ON INCOME

25 TIER.— 


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1 (1) IN GENERAL.—For purposes of this sub2 title, the table specified in this subsection is as fol3 lows: 

In the case of family income (expressed as a 

percent of FPL) within 

the following income 

tier: 

The initial premium percentage is— The final premium percentage is— The actuarial 

value percentage is— 

133% through 150% 1.5% 3% 97% 

150% through 200% 3% 5% 93% 

200% through 250% 5% 7% 85% 

250% through 300% 7% 9% 78% 

300% through 350% 9% 10% 72% 

350% through 400% 10% 11% 70% 

4 (2) SPECIAL RULES.—For purposes of applying 

5 the table under paragraph (1)— 

6 (A) FOR LOWEST LEVEL OF INCOME.—In 

7 the case of an individual with income that does 

8 not exceed 133 percent of FPL, the individual 

9 shall be considered to have income that is 133 

10 percent of FPL. 

11 (B) APPLICATION OF HIGHER ACTUARIAL

12 VALUE PERCENTAGE AT TIER TRANSITION

13 POINTS.—If two actuarial value percentages 

14 may be determined with respect to an indi15 vidual, the actuarial value percentage shall be 

16 the higher of such percentages. 

17 SEC. 244. AFFORDABILITY COST-SHARING CREDIT. 

18 (a) IN GENERAL.—The affordability cost-sharing 

19 credit under this section for an affordable credit eligible 

20 individual enrolled in an Exchange-participating health 


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1 benefits plan is in the form of the cost-sharing reduction 

2 described in subsection (b) provided under this section for 

3 the income tier in which the individual is classified based 

4 on the individual’s family income. 

5 (b) COST-SHARING REDUCTIONS.—The Commis6 sioner shall specify a reduction in cost-sharing amounts 

7 and the annual limitation on cost-sharing specified in sec8 tion 122(c)(2)(B) under a basic plan for each income tier 

9 specified in the table under section 243(d), with respect 

10 to a year, in a manner so that, as estimated by the Com11 missioner, the actuarial value of the coverage with such 

12 reduced cost-sharing amounts (and the reduced annual 

13 cost-sharing limit) is equal to the actuarial value percent14 age (specified in the table under section 243(d) for the 

15 income tier involved) of the full actuarial value if there 

16 were no cost-sharing imposed under the plan. 

17 (c) DETERMINATION AND PAYMENT OF COST-SHAR18 ING AFFORDABILITY CREDIT.—In the case of an afford19 able credit eligible individual in a tier enrolled in an Ex20 change-participating health benefits plan offered by a 

21 QHBP offering entity, the Commissioner shall provide for 

22 payment to the offering entity of an amount equivalent 

23 to the increased actuarial value of the benefits under the 

24 plan provided under section 203(c)(2)(B) resulting from 

25 the reduction in cost-sharing described in subsection (b). 


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1 SEC. 245. INCOME DETERMINATIONS. 

2 (a) IN GENERAL.—In applying this subtitle for an 

3 affordability credit for an individual for a plan year, the 

4 individual’s income shall be the income (as defined in sec5 tion 242(c)) for the individual for the most recent taxable 

6 year (as determined in accordance with rules of the Com7 missioner). The Federal poverty level applied shall be such 

8 level in effect as of the date of the application. 

9 (b) PROGRAM INTEGRITY; INCOME VERIFICATION

10 PROCEDURES.— 

11 (1) PROGRAM INTEGRITY.—The Commissioner 

12 shall take such steps as may be appropriate to en13 sure the accuracy of determinations and redeter14 minations under this subtitle. 

15 (2) INCOME VERIFICATION.— 

16 (A) IN GENERAL.—Upon an initial applica17 tion of an individual for an affordability credit 

18 under this subtitle (or in applying section 

19 242(b)) or upon an application for a change in 

20 the affordability credit based upon a significant 

21 change in family income described in subpara22 graph (A)— 

23 (i) the Commissioner shall request 

24 from the Secretary of the Treasury the dis25 closure to the Commissioner of such infor26 mation as may be permitted to verify the 


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1 information contained in such application; 

2 and 

3 (ii) the Commissioner shall use the in4 formation so disclosed to verify such infor5 mation. 

6 (B) ALTERNATIVE PROCEDURES.—The 

7 Commissioner shall establish procedures for the 

8 verification of income for purposes of this sub9 title if no income tax return is available for the 

10 most recent completed tax year. 

11 (c) SPECIAL RULES.— 

12 (1) CHANGES IN INCOME AS A PERCENT OF

13 FPL.—In the case that an individual’s income (ex14 pressed as a percentage of the Federal poverty level 

15 for a family of the size involved) for a plan year is 

16 expected (in a manner specified by the Commis17 sioner) to be significantly different from the income 

18 (as so expressed) used under subsection (a), the 

19 Commissioner shall establish rules requiring an indi20 vidual to report, consistent with the mechanism es21 tablished under paragraph (2), significant changes 

22 in such income (including a significant change in 

23 family composition) to the Commissioner and requir24 ing the substitution of such income for the income 

25 otherwise applicable. 


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1 (2) REPORTING OF SIGNIFICANT CHANGES IN

2 INCOME.—The Commissioner shall establish rules 

3 under which an individual determined to be an af4 fordable credit eligible individual would be required 

5 to inform the Commissioner when there is a signifi6 cant change in the family income of the individual 

7 (expressed as a percentage of the FPL for a family 

8 of the size involved) and of the information regard9 ing such change. Such mechanism shall provide for 

10 guidelines that specify the circumstances that qual11 ify as a significant change, the verifiable information 

12 required to document such a change, and the process 

13 for submission of such information. If the Commis14 sioner receives new information from an individual 

15 regarding the family income of the individual, the 

16 Commissioner shall provide for a redetermination of 

17 the individual’s eligibility to be an affordable credit 

18 eligible individual. 

19 (3) TRANSITION FOR CHIP.—In the case of a 

20 child described in section 202(d)(2), the Commis21 sioner shall establish rules under which the family 

22 income of the child is deemed to be no greater than 

23 the family income of the child as most recently de24 termined before Y1 by the State under title XXI of 

25 the Social Security Act. 


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1 (4) STUDY OF GEOGRAPHIC VARIATION IN AP2 PLICATION OF FPL.—The Commissioner shall exam3 ine the feasibility and implication of adjusting the 

4 application of the Federal poverty level under this 

5 subtitle for different geographic areas so as to re6 flect the variations in cost-of-living among different 

7 areas within the United States. If the Commissioner 

8 determines that an adjustment is feasible, the study 

9 should include a methodology to make such an ad10 justment. Not later than the first day of Y2, the 

11 Commissioner shall submit to Congress a report on 

12 such study and shall include such recommendations 

13 as the Commissioner determines appropriate. 

14 (d) PENALTIES FOR MISREPRESENTATION.—In the 

15 case of an individual intentionally misrepresents family in16 come or the individual fails (without regard to intent) to 

17 disclose to the Commissioner a significant change in fam18 ily income under subsection (c) in a manner that results 

19 in the individual becoming an affordable credit eligible in20 dividual when the individual is not or in the amount of 

21 the affordability credit exceeding the correct amount— 

22 (1) the individual is liable for repayment of the 

23 amount of the improper affordability credit; and 

24 (2) in the case of such an intentional misrepre25 sentation or other egregious circumstances specified 


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1 by the Commissioner, the Commissioner may impose 

2 an additional penalty. 

3 SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED 

4 ALIENS. 

5 Nothing in this subtitle shall allow Federal payments 

6 for affordability credits on behalf of individuals who are 

7 not lawfully present in the United States. 

8 TITLE III—SHARED 

9 RESPONSIBILITY 

10 Subtitle A—Individual 

11 Responsibility 

12 SEC. 301. INDIVIDUAL RESPONSIBILITY. 

13 For an individual’s responsibility to obtain acceptable 

14 coverage, see section 59B of the Internal Revenue Code 

15 of 1986 (as added by section 401 of this Act). 

16 Subtitle B—Employer 

17 Responsibility 

18 PART 1—HEALTH COVERAGE PARTICIPATION 

19 REQUIREMENTS 

20 SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE21 MENTS. 

22 An employer meets the requirements of this section 

23 if such employer does all of the following: 

24 (1) OFFER OF COVERAGE.—The employer of25 fers each employee individual and family coverage 


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1 under a qualified health benefits plan (or under a 

2 current employment-based health plan (within the 

3 meaning of section 102(b))) in accordance with sec4 tion 312. 

5 (2) CONTRIBUTION TOWARDS COVERAGE.—If 

6 an employee accepts such offer of coverage, the em7 ployer makes timely contributions towards such cov8 erage in accordance with section 312. 

9 (3) CONTRIBUTION IN LIEU OF COVERAGE.— 

10 Beginning with Y2, if an employee declines such 

11 offer but otherwise obtains coverage in an Exchange12 participating health benefits plan (other than by rea13 son of being covered by family coverage as a spouse 

14 or dependent of the primary insured), the employer 

15 shall make a timely contribution to the Health In16 surance Exchange with respect to each such em17 ployee in accordance with section 313. 

18 SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO19 WARDS EMPLOYEE AND DEPENDENT COV20 ERAGE. 

21 (a) IN GENERAL.—An employer meets the require22 ments of this section with respect to an employee if the 

23 following requirements are met: 

24 (1) OFFERING OF COVERAGE.—The employer 

25 offers the coverage described in section 311(1) either 


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1 through an Exchange-participating health benefits 

2 plan or other than through such a plan. 

3 (2) EMPLOYER REQUIRED CONTRIBUTION.— 

4 The employer timely pays to the issuer of such cov5 erage an amount not less than the employer required 

6 contribution specified in subsection (b) for such cov7 erage. 

8 (3) PROVISION OF INFORMATION.—The em9 ployer provides the Health Choices Commissioner, 

10 the Secretary of Labor, the Secretary of Health and 

11 Human Services, and the Secretary of the Treasury, 

12 as applicable, with such information as the Commis13 sioner may require to ascertain compliance with the 

14 requirements of this section. 

15 (4) AUTOENROLLMENT OF EMPLOYEES.—The 

16 employer provides for autoenrollment of the em17 ployee in accordance with subsection (c). 

18 (b) REDUCTION OF EMPLOYEE PREMIUMS THROUGH

19 MINIMUM EMPLOYER CONTRIBUTION.— 

20 (1) FULL-TIME EMPLOYEES.—The minimum 

21 employer contribution described in this subsection 

22 for coverage of a full-time employee (and, if any, the 

23 employee’s spouse and qualifying children (as de24 fined in section 152(c) of the Internal Revenue Code 


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1 of 1986) under a qualified health benefits plan (or 

2 current employment-based health plan) is equal to— 

3 (A) in case of individual coverage, not less 

4 than 72.5 percent of the applicable premium 

5 (as defined in section 4980B(f)(4) of such 

6 Code, subject to paragraph (2)) of the lowest 

7 cost plan offered by the employer that is a 

8 qualified health benefits plan (or is such cur9 rent employment-based health plan); and 

10 (B) in the case of family coverage which 

11 includes coverage of such spouse and children, 

12 not less 65 percent of such applicable premium 

13 of such lowest cost plan. 

14 (2) APPLICABLE PREMIUM FOR EXCHANGE COV15 ERAGE.—In this subtitle, the amount of the applica16 ble premium of the lowest cost plan with respect to 

17 coverage of an employee under an Exchange-partici18 pating health benefits plan is the reference premium 

19 amount under section 243(c) for individual coverage 

20 (or, if elected, family coverage) for the premium rat21 ing area in which the individual or family resides. 

22 (3) MINIMUM EMPLOYER CONTRIBUTION FOR

23 EMPLOYEES OTHER THAN FULL-TIME EMPLOY24 EES.—In the case of coverage for an employee who 

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1 imum employer contribution under this subsection 

2 shall be a proportion (as determined in accordance 

3 with rules of the Health Choices Commissioner, the 

4 Secretary of Labor, the Secretary of Health and 

5 Human Services, and the Secretary of the Treasury, 

6 as applicable) of the minimum employer contribution 

7 under this subsection with respect to a full-time em8 ployee that reflects the proportion of— 

9 (A) the average weekly hours of employ10 ment of the employee by the employer, to 

11 (B) the minimum weekly hours specified 

12 by the Commissioner for an employee to be a 

13 full-time employee. 

14 (4) SALARY REDUCTIONS NOT TREATED AS EM15 PLOYER CONTRIBUTIONS.—For purposes of this sec16 tion, any contribution on behalf of an employee with 

17 respect to which there is a corresponding reduction 

18 in the compensation of the employee shall not be 

19 treated as an amount paid by the employer. 

20 (c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPON21 SORED HEALTH BENEFITS.— 

22 (1) IN GENERAL.—The requirement of this sub23 section with respect to an employer and an employee 

24 is that the employer automatically enroll suchs em25 ployee into the employment-based health benefits 


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1 plan for individual coverage under the plan option 

2 with the lowest applicable employee premium. 

3 (2) OPT-OUT.—In no case may an employer 

4 automatically enroll an employee in a plan under 

5 paragraph (1) if such employee makes an affirmative 

6 election to opt out of such plan or to elect coverage 

7 under an employment-based health benefits plan of8 fered by such employer. An employer shall provide 

9 an employee with a 30-day period to make such an 

10 affirmative election before the employer may auto11 matically enroll the employee in such a plan. 

12 (3) NOTICE REQUIREMENTS.— 

13 (A) IN GENERAL.—Each employer de14 scribed in paragraph (1) who automatically en15 rolls an employee into a plan as described in 

16 such paragraph shall provide the employees, 

17 within a reasonable period before the beginning 

18 of each plan year (or, in the case of new em19 ployees, within a reasonable period before the 

20 end of the enrollment period for such a new em21 ployee), written notice of the employees’ rights 

22 and obligations relating to the automatic enroll23 ment requirement under such paragraph. Such 

24 notice must be comprehensive and understood 


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1 by the average employee to whom the automatic 

2 enrollment requirement applies. 

3 (B) INCLUSION OF SPECIFIC INFORMA4 TION.—The written notice under subparagraph 

5 (A) must explain an employee’s right to opt out 

6 of being automatically enrolled in a plan and in 

7 the case that more than one level of benefits or 

8 employee premium level is offered by the em9 ployer involved, the notice must explain which 

10 level of benefits and employee premium level the 

11 employee will be automatically enrolled in the 

12 absence of an affirmative election by the em13 ployee. 

14 SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV15 ERAGE. 

16 (a) IN GENERAL.—A contribution is made in accord17 ance with this section with respect to an employee if such 

18 contribution is equal to an amount equal to 8 percent of 

19 the average wages paid by the employer during the period 

20 of enrollment (determined by taking into account all em21 ployees of the employer and in such manner as the Com22 missioner provides, including rules providing for the ap23 propriate aggregation of related employers). Any such con24 tribution— 


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1 (1) shall be paid to the Health Choices Com2 missioner for deposit into the Health Insurance Ex3 change Trust Fund, and 

4 (2) shall not be applied against the premium of 

5 the employee under the Exchange-participating 

6 health benefits plan in which the employee is en7 rolled. 

8 (b) SPECIAL RULES FOR SMALL EMPLOYERS.— 

9 (1) IN GENERAL.—In the case of any employer 

10 who is a small employer for any calendar year, sub11 section (a) shall be applied by substituting the appli12 cable percentage determined in accordance with the 

13 following table for ‘‘8 percent’’: 

If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

14 (2) SMALL EMPLOYER.—For purposes of this 

15 subsection, the term ‘‘small employer’’ means any 

16 employer for any calendar year if the annual payroll 

17 of such employer for the preceding calendar year 

18 does not exceed $400,000. 

19 (3) ANNUAL PAYROLL.—For purposes of this 

20 paragraph, the term ‘‘annual payroll’’ means, with 

21 respect to any employer for any calendar year, the 


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1 aggregate wages paid by the employer during such 

2 calendar year. 

3 (4) AGGREGATION RULES.—Related employers 

4 and predecessors shall be treated as a single em5 ployer for purposes of this subsection. 

6 SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING. 

7 The Health Choices Commissioner (in coordination 

8 with the Secretary of Labor, the Secretary of Health and 

9 Human Services, and the Secretary of the Treasury) shall 

10 have authority to set standards for determining whether 

11 employers or insurers are undertaking any actions to af12 fect the risk pool within the Health Insurance Exchange 

13 by inducing individuals to decline coverage under a quali14 fied health benefits plan (or current employment-based 

15 health plan (within the meaning of section 102(b))) of16 fered by the employer and instead to enroll in an Ex17 change-participating health benefits plan. An employer 

18 violating such standards shall be treated as not meeting 

19 the requirements of this section. 


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1 PART 2—SATISFACTION OF HEALTH COVERAGE 

2 PARTICIPATION REQUIREMENTS 

3 SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICI4 PATION REQUIREMENTS UNDER THE EM5 PLOYEE RETIREMENT INCOME SECURITY 

6 ACT OF 1974. 

7 (a) IN GENERAL.—Subtitle B of title I of the Em8 ployee Retirement Income Security Act of 1974 is amend9 ed by adding at the end the following new part: 

10 ‘‘PART 8—NATIONAL HEALTH COVERAGE 

11 PARTICIPATION REQUIREMENTS 

12 ‘‘SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NA13 TIONAL HEALTH COVERAGE PARTICIPATION 

14 REQUIREMENTS. 

15 ‘‘(a) IN GENERAL.—An employer may make an elec16 tion with the Secretary to be subject to the health coverage 

17 participation requirements. 

18 ‘‘(b) TIME AND MANNER.—An election under sub19 section (a) may be made at such time and in such form 

20 and manner as the Secretary may prescribe. 

21 ‘‘SEC. 802. TREATMENT OF COVERAGE RESULTING FROM 

22 ELECTION. 

23 ‘‘(a) IN GENERAL.—If an employer makes an election 

24 to the Secretary under section 801— 

25 ‘‘(1) such election shall be treated as the estab26 lishment and maintenance of a group health plan (as 


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1 defined in section 733(a)) for purposes of this title, 

2 subject to section 151 of the America’s Affordable 

3 Health Choices Act of 2009, and 

4 ‘‘(2) the health coverage participation require5 ments shall be deemed to be included as terms and 

6 conditions of such plan. 

7 ‘‘(b) PERIODIC INVESTIGATIONS TO DISCOVER NON8 COMPLIANCE.—The Secretary shall regularly audit a rep9 resentative sampling of employers and group health plans 

10 and conduct investigations and other activities under sec11 tion 504 with respect to such sampling of plans so as to 

12 discover noncompliance with the health coverage participa13 tion requirements in connection with such plans. The Sec14 retary shall communicate findings of noncompliance made 

15 by the Secretary under this subsection to the Secretary 

16 of the Treasury and the Health Choices Commissioner. 

17 The Secretary shall take such timely enforcement action 

18 as appropriate to achieve compliance. 

19 ‘‘SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIRE20 MENTS. 

21 ‘‘For purposes of this part, the term ‘health coverage 

22 participation requirements’ means the requirements of 

23 part 1 of subtitle B of title III of division A of America’s 

24 Affordable Health Choices Act of 2009 (as in effect on 

25 the date of the enactment of such Act). 


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1 ‘‘SEC. 804. RULES FOR APPLYING REQUIREMENTS. 

2 ‘‘(a) AFFILIATED GROUPS.—In the case of any em3 ployer which is part of a group of employers who are treat4 ed as a single employer under subsection (b), (c), (m), or 

5 (o) of section 414 of the Internal Revenue Code of 1986, 

6 the election under section 801 shall be made by such em7 ployer as the Secretary may provide. Any such election, 

8 once made, shall apply to all members of such group. 

9 ‘‘(b) SEPARATE ELECTIONS.—Under regulations pre10 scribed by the Secretary, separate elections may be made 

11 under section 801 with respect to— 

12 ‘‘(1) separate lines of business, and 

13 ‘‘(2) full-time employees and employees who are 

14 not full-time employees. 

15 ‘‘SEC. 805. TERMINATION OF ELECTION IN CASES OF SUB16 STANTIAL NONCOMPLIANCE. 

17 ‘‘The Secretary may terminate the election of any em18 ployer under section 801 if the Secretary (in coordination 

19 with the Health Choices Commissioner) determines that 

20 such employer is in substantial noncompliance with the 

21 health coverage participation requirements and shall refer 

22 any such determination to the Secretary of the Treasury 

23 as appropriate. 

24 ‘‘SEC. 806. REGULATIONS. 

25 ‘‘The Secretary may promulgate such regulations as 

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1 sions of this part, in accordance with section 324(a) of 

2 the America’s Affordable Health Choices Act of 2009. The 

3 Secretary may promulgate any interim final rules as the 

4 Secretary determines are appropriate to carry out this 

5 part.’’. 

6 (b) ENFORCEMENT OF HEALTH COVERAGE PARTICI7 PATION REQUIREMENTS.—Section 502 of such Act (29 

8 U.S.C. 1132) is amended— 

9 (1) in subsection (a)(6), by striking ‘‘para10 graph’’ and all that follows through ‘‘subsection (c)’’ 

11 and inserting ‘‘paragraph (2), (4), (5), (6), (7), (8), 

12 (9), (10), or (11) of subsection (c)’’; and 

13 (2) in subsection (c), by redesignating the sec14 ond paragraph (10) as paragraph (12) and by in15 serting after the first paragraph (10) the following 

16 new paragraph: 

17 ‘‘(11) HEALTH COVERAGE PARTICIPATION RE18 QUIREMENTS.— 

19 ‘‘(A) CIVIL PENALTIES.—In the case of 

20 any employer who fails (during any period with 

21 respect to which an election under section 

22 801(a) is in effect) to satisfy the health cov23 erage participation requirements with respect to 

24 any employee, the Secretary may assess a civil 

25 penalty against the employer of $100 for each 


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1 day in the period beginning on the date such 

2 failure first occurs and ending on the date such 

3 failure is corrected. 

4 ‘‘(B) HEALTH COVERAGE PARTICIPATION

5 REQUIREMENTS.—For purposes of this para6 graph, the term ‘health coverage participation 

7 requirements’ has the meaning provided in sec8 tion 803. 

9 ‘‘(C) LIMITATIONS ON AMOUNT OF PEN10 ALTY.— 

11 ‘‘(i) PENALTY NOT TO APPLY WHERE

12 FAILURE NOT DISCOVERED EXERCISING

13 REASONABLE DILIGENCE.—No penalty 

14 shall be assessed under subparagraph (A) 

15 with respect to any failure during any pe16 riod for which it is established to the satis17 faction of the Secretary that the employer 

18 did not know, or exercising reasonable dili19 gence would not have known, that such 

20 failure existed. 

21 ‘‘(ii) PENALTY NOT TO APPLY TO

22 FAILURES CORRECTED WITHIN 30 DAYS.— 

23 No penalty shall be assessed under sub24 paragraph (A) with respect to any failure 

25 if— 


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1 ‘‘(I) such failure was due to rea2 sonable cause and not to willful ne3 glect, and 

4 ‘‘(II) such failure is corrected 

5 during the 30-day period beginning on 

6 the 1st date that the employer knew, 

7 or exercising reasonable diligence 

8 would have known, that such failure 

9 existed. 

10 ‘‘(iii) OVERALL LIMITATION FOR UN11 INTENTIONAL FAILURES.—In the case of 

12 failures which are due to reasonable cause 

13 and not to willful neglect, the penalty as14 sessed under subparagraph (A) for failures 

15 during any 1-year period shall not exceed 

16 the amount equal to the lesser of— 

17 ‘‘(I) 10 percent of the aggregate 

18 amount paid or incurred by the em19 ployer (or predecessor employer) dur20 ing the preceding 1-year period for 

21 group health plans, or 

22 ‘‘(II) $500,000. 

23 ‘‘(D) ADVANCE NOTIFICATION OF FAILURE

24 PRIOR TO ASSESSMENT.—Before a reasonable 

25 time prior to the assessment of any penalty 


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1 under this paragraph with respect to any failure 

2 by an employer, the Secretary shall inform the 

3 employer in writing of such failure and shall 

4 provide the employer information regarding ef5 forts and procedures which may be undertaken 

6 by the employer to correct such failure. 

7 ‘‘(E) COORDINATION WITH EXCISE TAX.— 

8 Under regulations prescribed in accordance 

9 with section 324 of the America’s Affordable 

10 Health Choices Act of 2009, the Secretary and 

11 the Secretary of the Treasury shall coordinate 

12 the assessment of penalties under this section 

13 in connection with failures to satisfy health cov14 erage participation requirements with the impo15 sition of excise taxes on such failures under sec16 tion 4980H(b) of the Internal Revenue Code of 

17 1986 so as to avoid duplication of penalties 

18 with respect to such failures. 

19 ‘‘(F) DEPOSIT OF PENALTY COLLECTED.— 

20 Any amount of penalty collected under this 

21 paragraph shall be deposited as miscellaneous 

22 receipts in the Treasury of the United States.’’. 

23 (c) CLERICAL AMENDMENTS.—The table of contents 

24 in section 1 of such Act is amended by inserting after the 

25 item relating to section 734 the following new items: 

‘‘PART 8—NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS


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‘‘Sec. 801. Election of employer to be subject to national health coverage participation requirements. 

‘‘Sec. 802. Treatment of coverage resulting from election. 

‘‘Sec. 803. Health coverage participation requirements. 

‘‘Sec. 804. Rules for applying requirements. 

‘‘Sec. 805. Termination of election in cases of substantial noncompliance. 

‘‘Sec. 806. Regulations.’’. 

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

2 this section shall apply to periods beginning after Decem3 ber 31, 2012. 

4 SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICI5 PATION REQUIREMENTS UNDER THE INTER6 NAL REVENUE CODE OF 1986. 

7 (a) FAILURE TO ELECT, OR SUBSTANTIALLY COM8 PLY WITH, HEALTH COVERAGE PARTICIPATION RE9 QUIREMENTS.—For employment tax on employers who fail 

10 to elect, or substantially comply with, the health coverage 

11 participation requirements described in part 1, see section 

12 3111(c) of the Internal Revenue Code of 1986 (as added 

13 by section 412 of this Act). 

14 (b) OTHER FAILURES.—For excise tax on other fail15 ures of electing employers to comply with such require16 ments, see section 4980H of the Internal Revenue Code 

17 of 1986 (as added by section 411 of this Act). 


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1 SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICI2 PATION REQUIREMENTS UNDER THE PUBLIC 

3 HEALTH SERVICE ACT. 

4 (a) IN GENERAL.—Part C of title XXVII of the Pub5 lic Health Service Act is amended by adding at the end 

6 the following new section: 

7 ‘‘SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION 

8 REQUIREMENTS. 

9 ‘‘(a) ELECTION OF EMPLOYER TO BE SUBJECT TO

10 NATIONAL HEALTH COVERAGE PARTICIPATION REQUIRE11 MENTS.— 

12 ‘‘(1) IN GENERAL.—An employer may make an 

13 election with the Secretary to be subject to the 

14 health coverage participation requirements. 

15 ‘‘(2) TIME AND MANNER.—An election under 

16 paragraph (1) may be made at such time and in 

17 such form and manner as the Secretary may pre18 scribe. 

19 ‘‘(b) TREATMENT OF COVERAGE RESULTING FROM

20 ELECTION.— 

21 ‘‘(1) IN GENERAL.—If an employer makes an 

22 election to the Secretary under subsection (a)— 

23 ‘‘(A) such election shall be treated as the 

24 establishment and maintenance of a group 

25 health plan for purposes of this title, subject to 


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1 section 151 of the America’s Affordable Health 

2 Choices Act of 2009, and 

3 ‘‘(B) the health coverage participation re4 quirements shall be deemed to be included as 

5 terms and conditions of such plan. 

6 ‘‘(2) PERIODIC INVESTIGATIONS TO DETERMINE

7 COMPLIANCE WITH HEALTH COVERAGE PARTICIPA8 TION REQUIREMENTS.—The Secretary shall regu9 larly audit a representative sampling of employers 

10 and conduct investigations and other activities with 

11 respect to such sampling of employers so as to dis12 cover noncompliance with the health coverage par13 ticipation requirements in connection with such em14 ployers (during any period with respect to which an 

15 election under subsection (a) is in effect). The Sec16 retary shall communicate findings of noncompliance 

17 made by the Secretary under this subsection to the 

18 Secretary of the Treasury and the Health Choices 

19 Commissioner. The Secretary shall take such timely 

20 enforcement action as appropriate to achieve compli21 ance. 

22 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE23 MENTS.—For purposes of this section, the term ‘health 

24 coverage participation requirements’ means the require25 ments of part 1 of subtitle B of title III of division A 


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1 of the America’s Affordable Health Choices Act of 2009 

2 (as in effect on the date of the enactment of this section). 

3 ‘‘(d) SEPARATE ELECTIONS.—Under regulations pre4 scribed by the Secretary, separate elections may be made 

5 under subsection (a) with respect to full-time employees 

6 and employees who are not full-time employees. 

7 ‘‘(e) TERMINATION OF ELECTION IN CASES OF SUB8 STANTIAL NONCOMPLIANCE.—The Secretary may termi9 nate the election of any employer under subsection (a) if 

10 the Secretary (in coordination with the Health Choices 

11 Commissioner) determines that such employer is in sub12 stantial noncompliance with the health coverage participa13 tion requirements and shall refer any such determination 

14 to the Secretary of the Treasury as appropriate. 

15 ‘‘(f) ENFORCEMENT OF HEALTH COVERAGE PAR16 TICIPATION REQUIREMENTS.— 

17 ‘‘(1) CIVIL PENALTIES.—In the case of any em18 ployer who fails (during any period with respect to 

19 which the election under subsection (a) is in effect) 

20 to satisfy the health coverage participation require21 ments with respect to any employee, the Secretary 

22 may assess a civil penalty against the employer of 

23 $100 for each day in the period beginning on the 

24 date such failure first occurs and ending on the date 

25 such failure is corrected. 


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1 ‘‘(2) LIMITATIONS ON AMOUNT OF PENALTY.— 

2 ‘‘(A) PENALTY NOT TO APPLY WHERE

3 FAILURE NOT DISCOVERED EXERCISING REA4 SONABLE DILIGENCE.—No penalty shall be as5 sessed under paragraph (1) with respect to any 

6 failure during any period for which it is estab7 lished to the satisfaction of the Secretary that 

8 the employer did not know, or exercising rea9 sonable diligence would not have known, that 

10 such failure existed. 

11 ‘‘(B) PENALTY NOT TO APPLY TO FAIL12 URES CORRECTED WITHIN 30 DAYS.—No pen13 alty shall be assessed under paragraph (1) with 

14 respect to any failure if— 

15 ‘‘(i) such failure was due to reason16 able cause and not to willful neglect, and 

17 ‘‘(ii) such failure is corrected during 

18 the 30-day period beginning on the 1st 

19 date that the employer knew, or exercising 

20 reasonable diligence would have known, 

21 that such failure existed. 

22 ‘‘(C) OVERALL LIMITATION FOR UNINTEN23 TIONAL FAILURES.—In the case of failures 

24 which are due to reasonable cause and not to 

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1 graph (1) for failures during any 1-year period 

2 shall not exceed the amount equal to the lesser 

3 of— 

4 ‘‘(i) 10 percent of the aggregate 

5 amount paid or incurred by the employer 

6 (or predecessor employer) during the pre7 ceding taxable year for group health plans, 

8 or 

9 ‘‘(ii) $500,000. 

10 ‘‘(3) ADVANCE NOTIFICATION OF FAILURE

11 PRIOR TO ASSESSMENT.—Before a reasonable time 

12 prior to the assessment of any penalty under para13 graph (1) with respect to any failure by an em14 ployer, the Secretary shall inform the employer in 

15 writing of such failure and shall provide the em16 ployer information regarding efforts and procedures 

17 which may be undertaken by the employer to correct 

18 such failure. 

19 ‘‘(4) ACTIONS TO ENFORCE ASSESSMENTS.— 

20 The Secretary may bring a civil action in any Dis21 trict Court of the United States to collect any civil 

22 penalty under this subsection. 

23 ‘‘(5) COORDINATION WITH EXCISE TAX.— 

24 Under regulations prescribed in accordance with sec25 tion 324 of the America’s Affordable Health Choices 


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1 Act of 2009, the Secretary and the Secretary of the 

2 Treasury shall coordinate the assessment of pen3 alties under paragraph (1) in connection with fail4 ures to satisfy health coverage participation require5 ments with the imposition of excise taxes on such 

6 failures under section 4980H(b) of the Internal Rev7 enue Code of 1986 so as to avoid duplication of pen8 alties with respect to such failures. 

9 ‘‘(6) DEPOSIT OF PENALTY COLLECTED.—Any 

10 amount of penalty collected under this subsection 

11 shall be deposited as miscellaneous receipts in the 

12 Treasury of the United States. 

13 ‘‘(g) REGULATIONS.—The Secretary may promulgate 

14 such regulations as may be necessary or appropriate to 

15 carry out the provisions of this section, in accordance with 

16 section 324(a) of the America’s Affordable Health Choices 

17 Act of 2009. The Secretary may promulgate any interim 

18 final rules as the Secretary determines are appropriate to 

19 carry out this section.’’. 

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

21 subsection (a) shall apply to periods beginning after De22 cember 31, 2012. 


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1 SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COV2 ERAGE PARTICIPATION REQUIREMENTS. 

3 (a) ASSURING COORDINATION.—The officers con4 sisting of the Secretary of Labor, the Secretary of the 

5 Treasury, the Secretary of Health and Human Services, 

6 and the Health Choices Commissioner shall ensure, 

7 through the execution of an interagency memorandum of 

8 understanding among such officers, that— 

9 (1) regulations, rulings, and interpretations 

10 issued by such officers relating to the same matter 

11 over which two or more of such officers have respon12 sibility under subpart B of part 6 of subtitle B of 

13 title I of the Employee Retirement Income Security 

14 Act of 1974, section 4980H of the Internal Revenue 

15 Code of 1986, and section 2793 of the Public Health 

16 Service Act are administered so as to have the same 

17 effect at all times; and 

18 (2) coordination of policies relating to enforcing 

19 the same requirements through such officers in 

20 order to have a coordinated enforcement strategy 

21 that avoids duplication of enforcement efforts and 

22 assigns priorities in enforcement. 

23 (b) MULTIEMPLOYER PLANS.—In the case of a group 

24 health plan that is a multiemployer plan (as defined in 

25 section 3(37) of the Employee Retirement Income Secu26 rity Act of 1974), the regulations prescribed in accordance 


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1 with subsection (a) by the officers referred to in subsection 

2 (a) shall provide for the application of the health coverage 

3 participation requirements to the plan sponsor and con4 tributing sponsors of such plan. 

5 TITLE IV—AMENDMENTS TO IN6 TERNAL REVENUE CODE OF 

7 1986 

8 Subtitle A—Shared Responsibility 

9 PART 1—INDIVIDUAL RESPONSIBILITY 

10 SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

11 HEALTH CARE COVERAGE. 

12 (a) IN GENERAL.—Subchapter A of chapter 1 of the 

13 Internal Revenue Code of 1986 is amended by adding at 

14 the end the following new part: 

15 ‘‘PART VIII—HEALTH CARE RELATED TAXES 

‘‘SUBPART A. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE

COVERAGE. 

16 ‘‘Subpart A—Tax on Individuals Without Acceptable 

17 Health Care Coverage 

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

18 ‘‘SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE 

19 HEALTH CARE COVERAGE. 

20 ‘‘(a) TAX IMPOSED.—In the case of any individual 

21 who does not meet the requirements of subsection (d) at 

22 any time during the taxable year, there is hereby imposed 

23 a tax equal to 2.5 percent of the excess of— 


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1 ‘‘(1) the taxpayer’s modified adjusted gross in2 come for the taxable year, over 

3 ‘‘(2) the amount of gross income specified in 

4 section 6012(a)(1) with respect to the taxpayer. 

5 ‘‘(b) LIMITATIONS.— 

6 ‘‘(1) TAX LIMITED TO AVERAGE PREMIUM.— 

7 ‘‘(A) IN GENERAL.—The tax imposed 

8 under subsection (a) with respect to any tax9 payer for any taxable year shall not exceed the 

10 applicable national average premium for such 

11 taxable year. 

12 ‘‘(B) APPLICABLE NATIONAL AVERAGE

13 PREMIUM.— 

14 ‘‘(i) IN GENERAL.—For purposes of 

15 subparagraph (A), the ‘applicable national 

16 average premium’ means, with respect to 

17 any taxable year, the average premium (as 

18 determined by the Secretary, in coordina19 tion with the Health Choices Commis20 sioner) for self-only coverage under a basic 

21 plan which is offered in a Health Insur22 ance Exchange for the calendar year in 

23 which such taxable year begins. 

24 ‘‘(ii) FAILURE TO PROVIDE COVERAGE

25 FOR MORE THAN ONE INDIVIDUAL.—In the 


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1 case of any taxpayer who fails to meet the 

2 requirements of subsection (e) with respect 

3 to more than one individual during the tax4 able year, clause (i) shall be applied by 

5 substituting ‘family coverage’ for ‘self-only 

6 coverage’. 

7 ‘‘(2) PRORATION FOR PART YEAR FAILURES.— 

8 The tax imposed under subsection (a) with respect 

9 to any taxpayer for any taxable year shall not exceed 

10 the amount which bears the same ratio to the 

11 amount of tax so imposed (determined without re12 gard to this paragraph and after application of para13 graph (1)) as— 

14 ‘‘(A) the aggregate periods during such 

15 taxable year for which such individual failed to 

16 meet the requirements of subsection (d), bears 

17 to 

18 ‘‘(B) the entire taxable year. 

19 ‘‘(c) EXCEPTIONS.— 

20 ‘‘(1) DEPENDENTS.—Subsection (a) shall not 

21 apply to any individual for any taxable year if a de22 duction is allowable under section 151 with respect 

23 to such individual to another taxpayer for any tax24 able year beginning in the same calendar year as 

25 such taxable year. 


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1 ‘‘(2) NONRESIDENT ALIENS.—Subsection (a) 

2 shall not apply to any individual who is a non3 resident alien. 

4 ‘‘(3) INDIVIDUALS RESIDING OUTSIDE UNITED

5 STATES.—Any qualified individual (as defined in 

6 section 911(d)) (and any qualifying child residing 

7 with such individual) shall be treated for purposes of 

8 this section as covered by acceptable coverage during 

9 the period described in subparagraph (A) or (B) of 

10 section 911(d)(1), whichever is applicable. 

11 ‘‘(4) INDIVIDUALS RESIDING IN POSSESSIONS

12 OF THE UNITED STATES.—Any individual who is a 

13 bona fide resident of any possession of the United 

14 States (as determined under section 937(a)) for any 

15 taxable year (and any qualifying child residing with 

16 such individual) shall be treated for purposes of this 

17 section as covered by acceptable coverage during 

18 such taxable year. 

19 ‘‘(5) RELIGIOUS CONSCIENCE EXEMPTION.— 

20 ‘‘(A) IN GENERAL.—Subsection (a) shall 

21 not apply to any individual (and any qualifying 

22 child residing with such individual) for any pe23 riod if such individual has in effect an exemp24 tion which certifies that such individual is a 

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1 sion thereof described in section 1402(g)(1) and 

2 an adherent of established tenets or teachings 

3 of such sect or division as described in such sec4 tion. 

5 ‘‘(B) EXEMPTION.—An application for the 

6 exemption described in subparagraph (A) shall 

7 be filed with the Secretary at such time and in 

8 such form and manner as the Secretary may 

9 prescribe. Any such exemption granted by the 

10 Secretary shall be effective for such period as 

11 the Secretary determines appropriate. 

12 ‘‘(d) ACCEPTABLE COVERAGE REQUIREMENT.— 

13 ‘‘(1) IN GENERAL.—The requirements of this 

14 subsection are met with respect to any individual for 

15 any period if such individual (and each qualifying 

16 child of such individual) is covered by acceptable 

17 coverage at all times during such period. 

18 ‘‘(2) ACCEPTABLE COVERAGE.—For purposes 

19 of this section, the term ‘acceptable coverage’ means 

20 any of the following: 

21 ‘‘(A) QUALIFIED HEALTH BENEFITS PLAN

22 COVERAGE.—Coverage under a qualified health 

23 benefits plan (as defined in section 100(c) of 

24 the America’s Affordable Health Choices Act of 

25 2009). 


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1 ‘‘(B) GRANDFATHERED HEALTH INSUR2 ANCE COVERAGE; COVERAGE UNDER GRAND3 FATHERED EMPLOYMENT-BASED HEALTH

4 PLAN.—Coverage under a grandfathered health 

5 insurance coverage (as defined in subsection (a) 

6 of section 102 of the America’s Affordable 

7 Health Choices Act of 2009) or under a current 

8 employment-based health plan (within the 

9 meaning of subsection (b) of such section). 

10 ‘‘(C) MEDICARE.—Coverage under part A 

11 of title XVIII of the Social Security Act. 

12 ‘‘(D) MEDICAID.—Coverage for medical as13 sistance under title XIX of the Social Security 

14 Act. 

15 ‘‘(E) MEMBERS OF THE ARMED FORCES

16 AND DEPENDENTS (INCLUDING TRICARE).— 

17 Coverage under chapter 55 of title 10, United 

18 States Code, including similar coverage fur19 nished under section 1781 of title 38 of such 

20 Code. 

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

22 health care program under chapter 17 of title 

23 38, United States Code, but only if the cov24 erage for the individual involved is determined 

25 by the Secretary in coordination with the 


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1 Health Choices Commissioner to be not less 

2 than the level specified by the Secretary of the 

3 Treasury, in coordination with the Secretary of 

4 Veteran’s Affairs and the Health Choices Com5 missioner, based on the individual’s priority for 

6 services as provided under section 1705(a) of 

7 such title. 

8 ‘‘(G) OTHER COVERAGE.—Such other 

9 health benefits coverage as the Secretary, in co10 ordination with the Health Choices Commis11 sioner, recognizes for purposes of this sub12 section. 

13 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

14 ‘‘(1) QUALIFYING CHILD.—For purposes of this 

15 section, the term ‘qualifying child’ has the meaning 

16 given such term by section 152(c). 

17 ‘‘(2) BASIC PLAN.—For purposes of this sec18 tion, the term ‘basic plan’ has the meaning given 

19 such term under section 100(c) of the America’s Af20 fordable Health Choices Act of 2009. 

21 ‘‘(3) HEALTH INSURANCE EXCHANGE.—For 

22 purposes of this section, the term ‘Health Insurance 

23 Exchange’ has the meaning given such term under 

24 section 100(c) of the America’s Affordable Health 

25 Choices Act of 2009, including any State-based 


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1 health insurance exchange approved for operation 

2 under section 208 of such Act. 

3 ‘‘(4) FAMILY COVERAGE.—For purposes of this 

4 section, the term ‘family coverage’ means any cov5 erage other than self-only coverage. 

6 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.— 

7 For purposes of this section, the term ‘modified ad8 justed gross income’ means adjusted gross income— 

9 ‘‘(A) determined without regard to section 

10 911, and 

11 ‘‘(B) increased by the amount of interest 

12 received or accrued by the taxpayer during the 

13 taxable year which is exempt from tax. 

14 ‘‘(6) NOT TREATED AS TAX IMPOSED BY THIS

15 CHAPTER FOR CERTAIN PURPOSES.—The tax im16 posed under this section shall not be treated as tax 

17 imposed by this chapter for purposes of determining 

18 the amount of any credit under this chapter or for 

19 purposes of section 55. 

20 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

21 such regulations or other guidance as may be necessary 

22 or appropriate to carry out the purposes of this section, 

23 including regulations or other guidance (developed in co24 ordination with the Health Choices Commissioner) which 

25 provide— 


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1 ‘‘(1) exemption from the tax imposed under 

2 subsection (a) in cases of de minimis lapses of ac3 ceptable coverage, and 

4 ‘‘(2) a process for applying for a waiver of the 

5 application of subsection (a) in cases of hardship.’’. 

6 (b) INFORMATION REPORTING.— 

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

8 subchapter A of chapter 61 of such Code is amended 

9 by inserting after section 6050W the following new 

10 section: 

11 ‘‘SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE 

12 COVERAGE. 

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

14 who provides acceptable coverage (as defined in section 

15 59B(d)) to any individual during any calendar year shall, 

16 at such time as the Secretary may prescribe, make the 

17 return described in subsection (b) with respect to such in18 dividual. 

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

20 is described in this subsection if such return— 

21 ‘‘(1) is in such form as the Secretary may pre22 scribe, and 

23 ‘‘(2) contains— 


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1 ‘‘(A) the name, address, and TIN of the 

2 primary insured and the name of each other in3 dividual obtaining coverage under the policy, 

4 ‘‘(B) the period for which each such indi5 vidual was provided with the coverage referred 

6 to in subsection (a), and 

7 ‘‘(C) such other information as the Sec8 retary may require. 

9 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID10 UALS WITH RESPECT TO WHOM INFORMATION IS RE11 QUIRED.—Every person required to make a return under 

12 subsection (a) shall furnish to each primary insured whose 

13 name is required to be set forth in such return a written 

14 statement showing— 

15 ‘‘(1) the name and address of the person re16 quired to make such return and the phone number 

17 of the information contact for such person, and 

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

19 the return with respect to such individual. 

20 The written statement required under the preceding sen21 tence shall be furnished on or before January 31 of the 

22 year following the calendar year for which the return 

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

24 ‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL

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1 mental unit or any agency or instrumentality thereof, the 

2 officer or employee who enters into the agreement to pro3 vide such coverage (or the person appropriately designated 

4 for purposes of this section) shall make the returns and 

5 statements required by this section.’’. 

6 (2) PENALTY FOR FAILURE TO FILE.— 

7 (A) RETURN.—Subparagraph (B) of sec8 tion 6724(d)(1) of such Code is amended by 

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

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

11 inserting ‘‘or’’, and by adding at the end the 

12 following new clause: 

13 ‘‘(xxiv) section 6050X (relating to re14 turns relating to health insurance cov15 erage), and’’. 

16 (B) STATEMENT.—Paragraph (2) of sec17 tion 6724(d) of such Code is amended by strik18 ing ‘‘or’’ at the end of subparagraph (EE), by 

19 striking the period at the end of subparagraph 

20 (FF) and inserting ‘‘, or’’, and by inserting 

21 after subparagraph (FF) the following new sub22 paragraph: 

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

24 relating to health insurance coverage).’’. 


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1 (c) RETURN REQUIREMENT.—Subsection (a) of sec2 tion 6012 of such Code is amended by inserting after 

3 paragraph (9) the following new paragraph: 

4 ‘‘(10) Every individual to whom section 59B(a) 

5 applies and who fails to meet the requirements of 

6 section 59B(d) with respect to such individual or 

7 any qualifying child (as defined in section 152(c)) of 

8 such individual.’’. 

9 (d) CLERICAL AMENDMENTS.— 

10 (1) The table of parts for subchapter A of chap11 ter 1 of the Internal Revenue Code of 1986 is 

12 amended by adding at the end the following new 

13 item: 

‘‘PART VIII. HEALTH CARE RELATED TAXES.’’. 

14 (2) The table of sections for subpart B of part 

15 III of subchapter A of chapter 61 is amended by 

16 adding at the end the following new item: 

‘‘Sec. 6050X. Returns relating to health insurance coverage.’’. 

17 (e) SECTION 15 NOT TO APPLY.—The amendment 

18 made by subsection (a) shall not be treated as a change 

19 in a rate of tax for purposes of section 15 of the Internal 

20 Revenue Code of 1986. 

21 (f) EFFECTIVE DATE.— 

22 (1) IN GENERAL.—The amendments made by 

23 this section shall apply to taxable years beginning 

24 after December 31, 2012. 


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1 (2) RETURNS.—The amendments made by sub2 section (b) shall apply to calendar years beginning 

3 after December 31, 2012. 

4 PART 2—EMPLOYER RESPONSIBILITY 

5 SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PAR6 TICIPATION REQUIREMENTS. 

7 (a) IN GENERAL.—Chapter 43 of the Internal Rev8 enue Code of 1986 is amended by adding at the end the 

9 following new section: 

10 ‘‘SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COV11 ERAGE PARTICIPATION REQUIREMENTS. 

12 ‘‘(a) ELECTION OF EMPLOYER RESPONSIBILITY TO

13 PROVIDE HEALTH COVERAGE.— 

14 ‘‘(1) IN GENERAL.—Subsection (b) shall apply 

15 to any employer with respect to whom an election 

16 under paragraph (2) is in effect. 

17 ‘‘(2) TIME AND MANNER.—An employer may 

18 make an election under this paragraph at such time 

19 and in such form and manner as the Secretary may 

20 prescribe. 

21 ‘‘(3) AFFILIATED GROUPS.—In the case of any 

22 employer which is part of a group of employers who 

23 are treated as a single employer under subsection 

24 (b), (c), (m), or (o) of section 414, the election 

25 under paragraph (2) shall be made by such person 


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1 as the Secretary may provide. Any such election, 

2 once made, shall apply to all members of such 

3 group. 

4 ‘‘(4) SEPARATE ELECTIONS.—Under regula5 tions prescribed by the Secretary, separate elections 

6 may be made under paragraph (2) with respect to— 

7 ‘‘(A) separate lines of business, and 

8 ‘‘(B) full-time employees and employees 

9 who are not full-time employees. 

10 ‘‘(5) TERMINATION OF ELECTION IN CASES OF

11 SUBSTANTIAL NONCOMPLIANCE.—The Secretary 

12 may terminate the election of any employer under 

13 paragraph (2) if the Secretary (in coordination with 

14 the Health Choices Commissioner) determines that 

15 such employer is in substantial noncompliance with 

16 the health coverage participation requirements. 

17 ‘‘(b) EXCISE TAX WITH RESPECT TO FAILURE TO

18 MEET HEALTH COVERAGE PARTICIPATION REQUIRE19 MENTS.— 

20 ‘‘(1) IN GENERAL.—In the case of any employer 

21 who fails (during any period with respect to which 

22 the election under subsection (a) is in effect) to sat23 isfy the health coverage participation requirements 

24 with respect to any employee to whom such election 

25 applies, there is hereby imposed on each such failure 


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1 with respect to each such employee a tax of $100 for 

2 each day in the period beginning on the date such 

3 failure first occurs and ending on the date such fail4 ure is corrected. 

5 ‘‘(2) LIMITATIONS ON AMOUNT OF TAX.— 

6 ‘‘(A) TAX NOT TO APPLY WHERE FAILURE

7 NOT DISCOVERED EXERCISING REASONABLE

8 DILIGENCE.—No tax shall be imposed by para9 graph (1) on any failure during any period for 

10 which it is established to the satisfaction of the 

11 Secretary that the employer neither knew, nor 

12 exercising reasonable diligence would have 

13 known, that such failure existed. 

14 ‘‘(B) TAX NOT TO APPLY TO FAILURES

15 CORRECTED WITHIN 30 DAYS.—No tax shall be 

16 imposed by paragraph (1) on any failure if— 

17 ‘‘(i) such failure was due to reason18 able cause and not to willful neglect, and 

19 ‘‘(ii) such failure is corrected during 

20 the 30-day period beginning on the 1st 

21 date that the employer knew, or exercising 

22 reasonable diligence would have known, 

23 that such failure existed. 

24 ‘‘(C) OVERALL LIMITATION FOR UNINTEN25 TIONAL FAILURES.—In the case of failures 


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1 which are due to reasonable cause and not to 

2 willful neglect, the tax imposed by subsection 

3 (a) for failures during the taxable year of the 

4 employer shall not exceed the amount equal to 

5 the lesser of— 

6 ‘‘(i) 10 percent of the aggregate 

7 amount paid or incurred by the employer 

8 (or predecessor employer) during the pre9 ceding taxable year for employment-based 

10 health plans, or 

11 ‘‘(ii) $500,000. 

12 ‘‘(D) COORDINATION WITH OTHER EN13 FORCEMENT PROVISIONS.—The tax imposed 

14 under paragraph (1) with respect to any failure 

15 shall be reduced (but not below zero) by the 

16 amount of any civil penalty collected under sec17 tion 502(c)(11) of the Employee Retirement In18 come Security Act of 1974 or section 2793(g) 

19 of the Public Health Service Act with respect to 

20 such failure. 

21 ‘‘(c) HEALTH COVERAGE PARTICIPATION REQUIRE22 MENTS.—For purposes of this section, the term ‘health 

23 coverage participation requirements’ means the require24 ments of part I of subtitle B of title III of the America’s 


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1 Affordable Health Choices Act of 2009 (as in effect on 

2 the date of the enactment of this section).’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for chapter 43 of such Code is amended by adding at the 

5 end the following new item: 

‘‘Sec. 4980H. Election to satisfy health coverage participation requirements.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to periods beginning after Decem8 ber 31, 2012. 

9 SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOY10 ERS. 

11 (a) IN GENERAL.—Section 3111 of the Internal Rev12 enue Code of 1986 is amended by redesignating subsection 

13 (c) as subsection (d) and by inserting after subsection (b) 

14 the following new subsection: 

15 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

16 HEALTH BENEFITS.— 

17 ‘‘(1) IN GENERAL.—In addition to other taxes, 

18 there is hereby imposed on every nonelecting em19 ployer an excise tax, with respect to having individ20 uals in his employ, equal to 8 percent of the wages 

21 (as defined in section 3121(a)) paid by him with re22 spect to employment (as defined in section 3121(b)). 

23 ‘‘(2) SPECIAL RULES FOR SMALL EMPLOY24 ERS.— 


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1 ‘‘(A) IN GENERAL.—In the case of any em2 ployer who is small employer for any calendar 

3 year, paragraph (1) shall be applied by sub4 stituting the applicable percentage determined 

5 in accordance with the following table for ‘8 

6 percent’: 

‘‘If the annual payroll of such employer for 

the preceding calendar year: 

The applicable 

percentage is: 

Does not exceed $250,000 ..................................... 0 percent 

Exceeds $250,000, but does not exceed $300,000 2 percent 

Exceeds $300,000, but does not exceed $350,000 4 percent 

Exceeds $350,000, but does not exceed $400,000 6 percent 

7 ‘‘(B) SMALL EMPLOYER.—For purposes of 

8 this paragraph, the term ‘small employer’ 

9 means any employer for any calendar year if 

10 the annual payroll of such employer for the pre11 ceding calendar year does not exceed $400,000. 

12 ‘‘(C) ANNUAL PAYROLL.—For purposes of 

13 this paragraph, the term ‘annual payroll’ 

14 means, with respect to any employer for any 

15 calendar year, the aggregate wages (as defined 

16 in section 3121(a)) paid by him with respect to 

17 employment (as defined in section 3121(b)) 

18 during such calendar year. 

19 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

20 of paragraph (1), the term ‘nonelecting employer’ 

21 means any employer for any period with respect to 


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1 which such employer does not have an election under 

2 section 4980H(a) in effect. 

3 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC4 TIONS.—In the case of an employer who makes a 

5 separate election described in section 4980H(a)(4) 

6 for any period, paragraph (1) shall be applied for 

7 such period by taking into account only the wages 

8 paid to employees who are not subject to such elec9 tion. 

10 ‘‘(5) AGGREGATION; PREDECESSORS.—For pur11 poses of this subsection— 

12 ‘‘(A) all persons treated as a single em13 ployer under subsection (b), (c), (m), or (o) of 

14 section 414 shall be treated as 1 employer, and 

15 ‘‘(B) any reference to any person shall be 

16 treated as including a reference to any prede17 cessor of such person.’’. 

18 (b) DEFINITIONS.—Section 3121 of such Code is 

19 amended by adding at the end the following new sub20 section: 

21 ‘‘(aa) SPECIAL RULES FOR TAX ON EMPLOYERS

22 ELECTING NOT TO PROVIDE HEALTH BENEFITS.—For 

23 purposes of section 3111(c)— 

24 ‘‘(1) Paragraphs (1), (5), and (19) of sub25 section (b) shall not apply. 


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1 ‘‘(2) Paragraph (7) of subsection (b) shall apply 

2 by treating all services as not covered by the retire3 ment systems referred to in subparagraphs (C) and 

4 (F) thereof. 

5 ‘‘(3) Subsection (e) shall not apply and the 

6 term ‘State’ shall include the District of Columbia.’’. 

7 (c) CONFORMING AMENDMENT.—Subsection (d) of 

8 section 3111 of such Code, as redesignated by this section, 

9 is amended by striking ‘‘this section’’ and inserting ‘‘sub10 sections (a) and (b)’’. 

11 (d) APPLICATION TO RAILROADS.— 

12 (1) IN GENERAL.—Section 3221 of such Code 

13 is amended by redesignating subsection (c) as sub14 section (d) and by inserting after subsection (b) the 

15 following new subsection: 

16 ‘‘(c) EMPLOYERS ELECTING TO NOT PROVIDE

17 HEALTH BENEFITS.— 

18 ‘‘(1) IN GENERAL.—In addition to other taxes, 

19 there is hereby imposed on every nonelecting em20 ployer an excise tax, with respect to having individ21 uals in his employ, equal to 8 percent of the com22 pensation paid during any calendar year by such em23 ployer for services rendered to such employer. 


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1 ‘‘(2) EXCEPTION FOR SMALL EMPLOYERS.— 

2 Rules similar to the rules of section 3111(c)(2) shall 

3 apply for purposes of this subsection. 

4 ‘‘(3) NONELECTING EMPLOYER.—For purposes 

5 of paragraph (1), the term ‘nonelecting employer’ 

6 means any employer for any period with respect to 

7 which such employer does not have an election under 

8 section 4980H(a) in effect. 

9 ‘‘(4) SPECIAL RULE FOR SEPARATE ELEC10 TIONS.—In the case of an employer who makes a 

11 separate election described in section 4980H(a)(4) 

12 for any period, subsection (a) shall be applied for 

13 such period by taking into account only the wages 

14 paid to employees who are not subject to such elec15 tion.’’. 

16 (2) DEFINITIONS.—Subsection (e) of section 

17 3231 of such Code is amended by adding at the end 

18 the following new paragraph: 

19 ‘‘(13) SPECIAL RULES FOR TAX ON EMPLOYERS

20 ELECTING NOT TO PROVIDE HEALTH BENEFITS.— 

21 For purposes of section 3221(c)— 

22 ‘‘(A) Paragraph (1) shall be applied with23 out regard to the third sentence thereof. 

24 ‘‘(B) Paragraph (2) shall not apply.’’. 


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1 (3) CONFORMING AMENDMENT.—Subsection (d) 

2 of section 3221 of such Code, as redesignated by 

3 this section, is amended by striking ‘‘subsections (a) 

4 and (b), see section 3231(e)(2)’’ and inserting ‘‘this 

5 section, see paragraphs (2) and (13)(B) of section 

6 3231(e)’’. 

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

8 this section shall apply to periods beginning after Decem9 ber 31, 2012. 

10 Subtitle B—Credit for Small Busi11 ness Employee Health Coverage 

12 Expenses 

13 SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE 

14 HEALTH COVERAGE EXPENSES. 

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 (relating to business-related credits) is amended by 

18 adding at the end the following new section: 

19 ‘‘SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COV20 ERAGE CREDIT. 

21 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

22 the case of a qualified small employer, the small business 

23 employee health coverage credit determined under this sec24 tion for the taxable year is an amount equal to the applicaVerDate Nov 24 2008 23:22 Jul 14, 2009 Jkt 079200 PO 00000 Frm 00188 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 ble percentage of the qualified employee health coverage 

2 expenses of such employer for such taxable year. 

3 ‘‘(b) APPLICABLE PERCENTAGE.— 

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the applicable percentage is 50 percent. 

6 ‘‘(2) PHASEOUT BASED ON AVERAGE COM7 PENSATION OF EMPLOYEES.—In the case of an em8 ployer whose average annual employee compensation 

9 for the taxable year exceeds $20,000, the percentage 

10 specified in paragraph (1) shall be reduced by a 

11 number of percentage points which bears the same 

12 ratio to 50 as such excess bears to $20,000. 

13 ‘‘(c) LIMITATIONS.— 

14 ‘‘(1) PHASEOUT BASED ON EMPLOYER SIZE.— 

15 In the case of an employer who employs more than 

16 10 qualified employees during the taxable year, the 

17 credit determined under subsection (a) shall be re18 duced by an amount which bears the same ratio to 

19 the amount of such credit (determined without re20 gard to this paragraph and after the application of 

21 the other provisions of this section) as— 

22 ‘‘(A) the excess of— 

23 ‘‘(i) the number of qualified employees 

24 employed by the employer during the tax25 able year, over 


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1 ‘‘(ii) 10, bears to 

2 ‘‘(B) 15. 

3 ‘‘(2) CREDIT NOT ALLOWED WITH RESPECT TO

4 CERTAIN HIGHLY COMPENSATED EMPLOYEES.—No 

5 credit shall be allowed under subsection (a) with re6 spect to qualified employee health coverage expenses 

7 paid or incurred with respect to any employee for 

8 any taxable year if the aggregate compensation paid 

9 by the employer to such employee during such tax10 able year exceeds $80,000. 

11 ‘‘(d) QUALIFIED EMPLOYEE HEALTH COVERAGE EX12 PENSES.—For purposes of this section— 

13 ‘‘(1) IN GENERAL.—The term ‘qualified em14 ployee health coverage expenses’ means, with respect 

15 to any employer for any taxable year, the aggregate 

16 amount paid or incurred by such employer during 

17 such taxable year for coverage of any qualified em18 ployee of the employer (including any family cov19 erage which covers such employee) under qualified 

20 health coverage. 

21 ‘‘(2) QUALIFIED HEALTH COVERAGE.—The 

22 term ‘qualified health coverage’ means acceptable 

23 coverage (as defined in section 59B(d)) which— 

24 ‘‘(A) is provided pursuant to an election 

25 under section 4980H(a), and 


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1 ‘‘(B) satisfies the requirements referred to 

2 in section 4980H(c). 

3 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

4 section— 

5 ‘‘(1) QUALIFIED SMALL EMPLOYER.—For pur6 poses of this section, the term ‘qualified small em7 ployer’ means any employer for any taxable year 

8 if— 

9 ‘‘(A) the number of qualified employees 

10 employed by such employer during the taxable 

11 year does not exceed 25, and 

12 ‘‘(B) the average annual employee com13 pensation of such employer for such taxable 

14 year does not exceed the sum of the dollar 

15 amounts in effect under subsection (b)(2). 

16 ‘‘(2) QUALIFIED EMPLOYEE.—The term ‘quali17 fied employee’ means any employee of an employer 

18 for any taxable year of the employer if such em19 ployee received at least $5,000 of compensation from 

20 such employer during such taxable year. 

21 ‘‘(3) AVERAGE ANNUAL EMPLOYEE COMPENSA22 TION.—The term ‘average annual employee com23 pensation’ means, with respect to any employer for 

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1 tion paid by such employer to qualified employees of 

2 such employer during such taxable year. 

3 ‘‘(4) COMPENSATION.—The term ‘compensa4 tion’ has the meaning given such term in section 

5 408(p)(6)(A). 

6 ‘‘(5) FAMILY COVERAGE.—The term ‘family 

7 coverage’ means any coverage other than self-only 

8 coverage. 

9 ‘‘(f) SPECIAL RULES.—For purposes of this sec10 tion— 

11 ‘‘(1) SPECIAL RULE FOR PARTNERSHIPS AND

12 SELF-EMPLOYED.—In the case of a partnership (or 

13 a trade or business carried on by an individual) 

14 which has one or more qualified employees (deter15 mined without regard to this paragraph) with re16 spect to whom the election under 4980H(a) applies, 

17 each partner (or, in the case of a trade or business 

18 carried on by an individual, such individual) shall be 

19 treated as an employee. 

20 ‘‘(2) AGGREGATION RULE.—All persons treated 

21 as a single employer under subsection (b), (c), (m), 

22 or (o) of section 414 shall be treated as 1 employer. 

23 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—Any de24 duction otherwise allowable with respect to amounts 

25 paid or incurred for health insurance coverage to 


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1 which subsection (a) applies shall be reduced by the 

2 amount of the credit determined under this section. 

3 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

4 any taxable year beginning after 2013, each of the 

5 dollar amounts in subsections (b)(2), (c)(2), and 

6 (e)(2) shall be increased by an amount equal to— 

7 ‘‘(A) such dollar amount, multiplied by 

8 ‘‘(B) the cost of living adjustment deter9 mined under section 1(f)(3) for the calendar 

10 year in which the taxable year begins deter11 mined by substituting ‘calendar year 2012’ for 

12 ‘calendar year 1992’ in subparagraph (B) 

13 thereof. 

14 If any increase determined under this paragraph is 

15 not a multiple of $50, such increase shall be rounded 

16 to the next lowest multiple of $50.’’. 

17 (b) CREDIT TO BE PART OF GENERAL BUSINESS

18 CREDIT.—Subsection (b) of section 38 of such Code (re19 lating to general business credit) is amended by striking 

20 ‘‘plus’’ at the end of paragraph (34), by striking the period 

21 at the end of paragraph (35) and inserting ‘‘, plus’’, and 

22 by adding at the end the following new paragraph: 

23 ‘‘(36) in the case of a qualified small employer 

24 (as defined in section 45R(e)), the small business 


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1 employee health coverage credit determined under 

2 section 45R(a).’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subpart D of part IV of subchapter A of chapter 1 

5 of such Code is amended by inserting after the item relat6 ing to section 45Q the following new item: 

‘‘Sec. 45R. Small business employee health coverage credit.’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2012. 

10 Subtitle C—Disclosures To Carry 

11 Out Health Insurance Exchange 

12 Subsidies 

13 SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSUR14 ANCE EXCHANGE SUBSIDIES. 

15 (a) IN GENERAL.—Subsection (l) of section 6103 of 

16 the Internal Revenue Code of 1986 is amended by adding 

17 at the end the following new paragraph: 

18 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

19 TO CARRY OUT HEALTH INSURANCE EXCHANGE SUB20 SIDIES.— 

21 ‘‘(A) IN GENERAL.—The Secretary, upon 

22 written request from the Health Choices Com23 missioner or the head of a State-based health 

24 insurance exchange approved for operation 

25 under section 208 of the America’s Affordable 


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1 Health Choices Act of 2009, shall disclose to of2 ficers and employees of the Health Choices Ad3 ministration or such State-based health insur4 ance exchange, as the case may be, return in5 formation of any taxpayer whose income is rel6 evant in determining any affordability credit de7 scribed in subtitle C of title II of the America’s 

8 Affordable Health Choices Act of 2009. Such 

9 return information shall be limited to— 

10 ‘‘(i) taxpayer identity information 

11 with respect to such taxpayer, 

12 ‘‘(ii) the filing status of such tax13 payer, 

14 ‘‘(iii) the modified adjusted gross in15 come of such taxpayer (as defined in sec16 tion 59B(e)(5)), 

17 ‘‘(iv) the number of dependents of the 

18 taxpayer, 

19 ‘‘(v) such other information as is pre20 scribed by the Secretary by regulation as 

21 might indicate whether the taxpayer is eli22 gible for such affordability credits (and the 

23 amount thereof), and 

24 ‘‘(vi) the taxable year with respect to 

25 which the preceding information relates or, 


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1 if applicable, the fact that such informa2 tion is not available. 

3 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

4 INFORMATION.—Return information disclosed 

5 under subparagraph (A) may be used by offi6 cers and employees of the Health Choices Ad7 ministration or such State-based health insur8 ance exchange, as the case may be, only for the 

9 purposes of, and to the extent necessary in, es10 tablishing and verifying the appropriate amount 

11 of any affordability credit described in subtitle 

12 C of title II of the America’s Affordable Health 

13 Choices Act of 2009 and providing for the re14 payment of any such credit which was in excess 

15 of such appropriate amount.’’. 

16 (b) PROCEDURES AND RECORDKEEPING RELATED

17 TO DISCLOSURES.—Paragraph (4) of section 6103(p) of 

18 such Code is amended— 

19 (1) by inserting ‘‘, or any entity described in 

20 subsection (l)(21),’’ after ‘‘or (20)’’ in the matter 

21 preceding subparagraph (A), 

22 (2) by inserting ‘‘or any entity described in sub23 section (l)(21),’’ after ‘‘or (o)(1)(A)’’ in subpara24 graph (F)(ii), and 


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1 (3) by inserting ‘‘or any entity described in sub2 section (l)(21),’’ after ‘‘or (20)’’ both places it ap3 pears in the matter after subparagraph (F). 

4 (c) UNAUTHORIZED DISCLOSURE OR INSPECTION.— 

5 Paragraph (2) of section 7213(a) of such Code is amended 

6 by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

7 Subtitle D—Other Revenue 

8 Provisions 

9 PART 1—GENERAL PROVISIONS 

10 SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

11 (a) IN GENERAL.—Part VIII of subchapter A of 

12 chapter 1 of the Internal Revenue Code of 1986, as added 

13 by this title, is amended by adding at the end the following 

14 new subpart: 

15 ‘‘Subpart B—Surcharge on High Income Individuals 

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

16 ‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS. 

17 ‘‘(a) GENERAL RULE.—In the case of a taxpayer 

18 other than a corporation, there is hereby imposed (in addi19 tion to any other tax imposed by this subtitle) a tax equal 

20 to— 

21 ‘‘(1) 1 percent of so much of the modified ad22 justed gross income of the taxpayer as exceeds 

23 $350,000 but does not exceed $500,000, 


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1 ‘‘(2) 1.5 percent of so much of the modified ad2 justed gross income of the taxpayer as exceeds 

3 $500,000 but does not exceed $1,000,000, and 

4 ‘‘(3) 5.4 percent of so much of the modified ad5 justed gross income of the taxpayer as exceeds 

6 $1,000,000. 

7 ‘‘(b) TAXPAYERS NOT MAKING A JOINT RETURN.— 

8 In the case of any taxpayer other than a taxpayer making 

9 a joint return under section 6013 or a surviving spouse 

10 (as defined in section 2(a)), subsection (a) shall be applied 

11 by substituting for each of the dollar amounts therein 

12 (after any increase determined under subsection (e)) a dol13 lar amount equal to— 

14 ‘‘(1) 50 percent of the dollar amount so in ef15 fect in the case of a married individual filing a sepa16 rate return, and 

17 ‘‘(2) 80 percent of the dollar amount so in ef18 fect in any other case. 

19 ‘‘(c) ADJUSTMENTS BASED ON FEDERAL HEALTH

20 REFORM SAVINGS.— 

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), in the case of any taxable year beginning 

23 after December 31, 2012, subsection (a) shall be ap24 plied— 


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1 ‘‘(A) by substituting ‘2 percent’ for ‘1 per2 cent’, and 

3 ‘‘(B) by substituting ‘3 percent’ for ‘1.5 

4 percent’. 

5 ‘‘(2) ADJUSTMENTS BASED ON EXCESS FED6 ERAL HEALTH REFORM SAVINGS.— 

7 ‘‘(A) EXCEPTION IF FEDERAL HEALTH RE8 FORM SAVINGS SIGNIFICANTLY EXCEEDS BASE

9 AMOUNT.—If the excess Federal health reform 

10 savings is more than $150,000,000,000 but not 

11 more than $175,000,000,000, paragraph (1) 

12 shall not apply. 

13 ‘‘(B) FURTHER ADJUSTMENT FOR ADDI14 TIONAL FEDERAL HEALTH REFORM SAVINGS.— 

15 If the excess Federal health reform savings is 

16 more than $175,000,000,000, paragraphs (1) 

17 and (2) of subsection (a) (and paragraph (1) of 

18 this subsection) shall not apply to any taxable 

19 year beginning after December 31, 2012. 

20 ‘‘(C) EXCESS FEDERAL HEALTH REFORM

21 SAVINGS.—For purposes of this subsection, the 

22 term ‘excess Federal health reform savings’ 

23 means the excess of— 

24 ‘‘(i) the Federal health reform sav25 ings, over 


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1 ‘‘(ii) $525,000,000,000. 

2 ‘‘(D) FEDERAL HEALTH REFORM SAV3 INGS.—The term ‘Federal health reform sav4 ings’ means the sum of the amounts described 

5 in subparagraphs (A) and (B) of paragraph (3). 

6 ‘‘(3) DETERMINATION OF FEDERAL HEALTH

7 REFORM SAVINGS.—Not later than December 1, 

8 2012, the Director of the Office of Management and 

9 Budget shall— 

10 ‘‘(A) determine, on the basis of the study 

11 conducted under paragraph (4), the aggregate 

12 reductions in Federal expenditures which have 

13 been achieved as a result of the provisions of, 

14 and amendments made by, division B of the 

15 America’s Affordable Health Choices Act of 

16 2009 during the period beginning on October 1, 

17 2009, and ending with the latest date with re18 spect to which the Director has sufficient data 

19 to make such determination, and 

20 ‘‘(B) estimate, on the basis of such study 

21 and the determination under subparagraph (A), 

22 the aggregate reductions in Federal expendi23 tures which will be achieved as a result of such 

24 provisions and amendments during so much of 

25 the period beginning with fiscal year 2010 and 


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1 ending with fiscal year 2019 as is not taken 

2 into account under subparagraph (A). 

3 ‘‘(4) STUDY OF FEDERAL HEALTH REFORM

4 SAVINGS.—The Director of the Office of Manage5 ment and Budget shall conduct a study of the reduc6 tions in Federal expenditures during fiscal years 

7 2010 through 2019 which are attributable to the 

8 provisions of, and amendments made by, division B 

9 of the America’s Affordable Health Choices Act of 

10 2009. The Director shall complete such study not 

11 later than December 1, 2012. 

12 ‘‘(5) REDUCTIONS IN FEDERAL EXPENDITURES

13 DETERMINED WITHOUT REGARD TO PROGRAM IN14 VESTMENTS.—For purposes of paragraphs (3) and 

15 (4), reductions in Federal expenditures shall be de16 termined without regard to section 1121 of the 

17 America’s Affordable Health Choices Act of 2009 

18 and other program investments under division B 

19 thereof. 

20 ‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For 

21 purposes of this section, the term ‘modified adjusted gross 

22 income’ means adjusted gross income reduced by any de23 duction allowed for investment interest (as defined in sec24 tion 163(d)). In the case of an estate or trust, adjusted 


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1 gross income shall be determined as provided in section 

2 67(e). 

3 ‘‘(e) INFLATION ADJUSTMENTS.— 

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

5 beginning after 2011, the dollar amounts in sub6 section (a) shall be increased by an amount equal 

7 to— 

8 ‘‘(A) such dollar amount, multiplied by 

9 ‘‘(B) the cost-of-living adjustment deter10 mined under section 1(f)(3) for the calendar 

11 year in which the taxable year begins, by sub12 stituting ‘calendar year 2010’ for ‘calendar year 

13 1992’ in subparagraph (B) thereof. 

14 ‘‘(2) ROUNDING.—If any amount as adjusted 

15 under paragraph (1) is not a multiple of $5,000, 

16 such amount shall be rounded to the next lowest 

17 multiple of $5,000. 

18 ‘‘(f) SPECIAL RULES.— 

19 ‘‘(1) NONRESIDENT ALIEN.—In the case of a 

20 nonresident alien individual, only amounts taken 

21 into account in connection with the tax imposed 

22 under section 871(b) shall be taken into account 

23 under this section. 

24 ‘‘(2) CITIZENS AND RESIDENTS LIVING

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1 section (a) (after the application of subsections (b) 

2 and (e)) shall be decreased by the excess of— 

3 ‘‘(A) the amounts excluded from the tax4 payer’s gross income under section 911, over 

5 ‘‘(B) the amounts of any deductions or ex6 clusions disallowed under section 911(d)(6) 

7 with respect to the amounts described in sub8 paragraph (A). 

9 ‘‘(3) CHARITABLE TRUSTS.—Subsection (a) 

10 shall not apply to a trust all the unexpired interests 

11 in which are devoted to one or more of the purposes 

12 described in section 170(c)(2)(B). 

13 ‘‘(4) NOT TREATED AS TAX IMPOSED BY THIS

14 CHAPTER FOR CERTAIN PURPOSES.—The tax im15 posed under this section shall not be treated as tax 

16 imposed by this chapter for purposes of determining 

17 the amount of any credit under this chapter or for 

18 purposes of section 55.’’. 

19 (b) CLERICAL AMENDMENT.—The table of subparts 

20 for part VIII of subchapter A of chapter 1 of such Code, 

21 as added by this title, is amended by inserting after the 

22 item relating to subpart A the following new item: 

‘‘SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS.’’. 

23 (c) SECTION 15 NOT TO APPLY.—The amendment 

24 made by subsection (a) shall not be treated as a change 


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1 in a rate of tax for purposes of section 15 of the Internal 

2 Revenue Code of 1986. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2010. 

6 SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCA7 TION OF INTEREST. 

8 (a) IN GENERAL.—Paragraphs (5)(D) and (6) of sec9 tion 864(f) of the Internal Revenue Code of 1986 are each 

10 amended by striking ‘‘December 31, 2010’’ and inserting 

11 ‘‘December 31, 2019’’. 

12 (b) TRANSITION.—Subsection (f) of section 864 of 

13 such Code is amended by striking paragraph (7). 

14 PART 2—PREVENTION OF TAX AVOIDANCE 

15 SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN 

16 DEDUCTIBLE PAYMENTS. 

17 (a) IN GENERAL.—Section 894 of the Internal Rev18 enue Code of 1986 (relating to income affected by treaty) 

19 is amended by adding at the end the following new sub20 section: 

21 ‘‘(d) LIMITATION ON TREATY BENEFITS FOR CER22 TAIN DEDUCTIBLE PAYMENTS.— 

23 ‘‘(1) IN GENERAL.—In the case of any deduct24 ible related-party payment, any withholding tax im25 posed under chapter 3 (and any tax imposed under 


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1 subpart A or B of this part) with respect to such 

2 payment may not be reduced under any treaty of the 

3 United States unless any such withholding tax would 

4 be reduced under a treaty of the United States if 

5 such payment were made directly to the foreign par6 ent corporation. 

7 ‘‘(2) DEDUCTIBLE RELATED-PARTY PAY8 MENT.—For purposes of this subsection, the term 

9 ‘deductible related-party payment’ means any pay10 ment made, directly or indirectly, by any person to 

11 any other person if the payment is allowable as a de12 duction under this chapter and both persons are 

13 members of the same foreign controlled group of en14 tities. 

15 ‘‘(3) FOREIGN CONTROLLED GROUP OF ENTI16 TIES.—For purposes of this subsection— 

17 ‘‘(A) IN GENERAL.—The term ‘foreign 

18 controlled group of entities’ means a controlled 

19 group of entities the common parent of which 

20 is a foreign corporation. 

21 ‘‘(B) CONTROLLED GROUP OF ENTITIES.— 

22 The term ‘controlled group of entities’ means a 

23 controlled group of corporations as defined in 

24 section 1563(a)(1), except that— 


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1 ‘‘(i) ‘more than 50 percent’ shall be 

2 substituted for ‘at least 80 percent’ each 

3 place it appears therein, and 

4 ‘‘(ii) the determination shall be made 

5 without regard to subsections (a)(4) and 

6 (b)(2) of section 1563. 

7 A partnership or any other entity (other than a 

8 corporation) shall be treated as a member of a 

9 controlled group of entities if such entity is con10 trolled (within the meaning of section 

11 954(d)(3)) by members of such group (includ12 ing any entity treated as a member of such 

13 group by reason of this sentence). 

14 ‘‘(4) FOREIGN PARENT CORPORATION.—For 

15 purposes of this subsection, the term ‘foreign parent 

16 corporation’ means, with respect to any deductible 

17 related-party payment, the common parent of the 

18 foreign controlled group of entities referred to in 

19 paragraph (3)(A). 

20 ‘‘(5) REGULATIONS.—The Secretary may pre21 scribe such regulations or other guidance as are nec22 essary or appropriate to carry out the purposes of 

23 this subsection, including regulations or other guid24 ance which provide for— 


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1 ‘‘(A) the treatment of two or more persons 

2 as members of a foreign controlled group of en3 tities if such persons would be the common par4 ent of such group if treated as one corporation, 

5 and 

6 ‘‘(B) the treatment of any member of a 

7 foreign controlled group of entities as the com8 mon parent of such group if such treatment is 

9 appropriate taking into account the economic 

10 relationships among such entities.’’. 

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

12 this section shall apply to payments made after the date 

13 of the enactment of this Act. 

14 SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOC15 TRINE. 

16 (a) IN GENERAL.—Section 7701 of the Internal Rev17 enue Code of 1986 is amended by redesignating subsection 

18 (o) as subsection (p) and by inserting after subsection (n) 

19 the following new subsection: 

20 ‘‘(o) CLARIFICATION OF ECONOMIC SUBSTANCE

21 DOCTRINE.— 

22 ‘‘(1) APPLICATION OF DOCTRINE.—In the case 

23 of any transaction to which the economic substance 

24 doctrine is relevant, such transaction shall be treated 

25 as having economic substance only if— 


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1 ‘‘(A) the transaction changes in a mean2 ingful way (apart from Federal income tax ef3 fects) the taxpayer’s economic position, and 

4 ‘‘(B) the taxpayer has a substantial pur5 pose (apart from Federal income tax effects) 

6 for entering into such transaction. 

7 ‘‘(2) SPECIAL RULE WHERE TAXPAYER RELIES

8 ON PROFIT POTENTIAL.— 

9 ‘‘(A) IN GENERAL.—The potential for 

10 profit of a transaction shall be taken into ac11 count in determining whether the requirements 

12 of subparagraphs (A) and (B) of paragraph (1) 

13 are met with respect to the transaction only if 

14 the present value of the reasonably expected 

15 pre-tax profit from the transaction is substan16 tial in relation to the present value of the ex17 pected net tax benefits that would be allowed if 

18 the transaction were respected. 

19 ‘‘(B) TREATMENT OF FEES AND FOREIGN

20 TAXES.—Fees and other transaction expenses 

21 and foreign taxes shall be taken into account as 

22 expenses in determining pre-tax profit under 

23 subparagraph (A). 

24 ‘‘(3) STATE AND LOCAL TAX BENEFITS.—For 

25 purposes of paragraph (1), any State or local income 


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1 tax effect which is related to a Federal income tax 

2 effect shall be treated in the same manner as a Fed3 eral income tax effect. 

4 ‘‘(4) FINANCIAL ACCOUNTING BENEFITS.—For 

5 purposes of paragraph (1)(B), achieving a financial 

6 accounting benefit shall not be taken into account as 

7 a purpose for entering into a transaction if the ori8 gin of such financial accounting benefit is a reduc9 tion of Federal income tax. 

10 ‘‘(5) DEFINITIONS AND SPECIAL RULES.—For 

11 purposes of this subsection— 

12 ‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.— 

13 The term ‘economic substance doctrine’ means 

14 the common law doctrine under which tax bene15 fits under subtitle A with respect to a trans16 action are not allowable if the transaction does 

17 not have economic substance or lacks a business 

18 purpose. 

19 ‘‘(B) EXCEPTION FOR PERSONAL TRANS20 ACTIONS OF INDIVIDUALS.—In the case of an 

21 individual, paragraph (1) shall apply only to 

22 transactions entered into in connection with a 

23 trade or business or an activity engaged in for 

24 the production of income. 


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1 ‘‘(C) OTHER COMMON LAW DOCTRINES

2 NOT AFFECTED.—Except as specifically pro3 vided in this subsection, the provisions of this 

4 subsection shall not be construed as altering or 

5 supplanting any other rule of law, and the re6 quirements of this subsection shall be construed 

7 as being in addition to any such other rule of 

8 law. 

9 ‘‘(D) DETERMINATION OF APPLICATION OF

10 DOCTRINE NOT AFFECTED.—The determination 

11 of whether the economic substance doctrine is 

12 relevant to a transaction (or series of trans13 actions) shall be made in the same manner as 

14 if this subsection had never been enacted. 

15 ‘‘(6) REGULATIONS.—The Secretary shall pre16 scribe such regulations as may be necessary or ap17 propriate to carry out the purposes of this sub18 section.’’. 

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

20 this section shall apply to transactions entered into after 

21 the date of the enactment of this Act. 

22 SEC. 453. PENALTIES FOR UNDERPAYMENTS. 

23 (a) PENALTY FOR UNDERPAYMENTS ATTRIBUTABLE

24 TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE.— 


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1 (1) IN GENERAL.—Subsection (b) of section 

2 6662 of the Internal Revenue Code of 1986 is 

3 amended by inserting after paragraph (5) the fol4 lowing new paragraph: 

5 ‘‘(6) Any disallowance of claimed tax benefits 

6 by reason of a transaction lacking economic sub7 stance (within the meaning of section 7701(o)) or 

8 failing to meet the requirements of any similar rule 

9 of law.’’. 

10 (2) INCREASED PENALTY FOR NONDISCLOSED

11 TRANSACTIONS.—Section 6662 of such Code is 

12 amended by adding at the end the following new 

13 subsection: 

14 ‘‘(i) INCREASE IN PENALTY IN CASE OF NONDIS15 CLOSED NONECONOMIC SUBSTANCE TRANSACTIONS.— 

16 ‘‘(1) IN GENERAL.—In the case of any portion 

17 of an underpayment which is attributable to one or 

18 more nondisclosed noneconomic substance trans19 actions, subsection (a) shall be applied with respect 

20 to such portion by substituting ‘40 percent’ for ‘20 

21 percent’. 

22 ‘‘(2) NONDISCLOSED NONECONOMIC SUB23 STANCE TRANSACTIONS.—For purposes of this sub24 section, the term ‘nondisclosed noneconomic sub25 stance transaction’ means any portion of a transVerDate Nov 24 2008 23:22 Jul 14, 2009 Jkt 079200 PO 00000 Frm 00211 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 action described in subsection (b)(6) with respect to 

2 which the relevant facts affecting the tax treatment 

3 are not adequately disclosed in the return nor in a 

4 statement attached to the return. 

5 ‘‘(3) SPECIAL RULE FOR AMENDED RE6 TURNS.—Except as provided in regulations, in no 

7 event shall any amendment or supplement to a re8 turn of tax be taken into account for purposes of 

9 this subsection if the amendment or supplement is 

10 filed after the earlier of the date the taxpayer is first 

11 contacted by the Secretary regarding the examina12 tion of the return or such other date as is specified 

13 by the Secretary.’’. 

14 (3) CONFORMING AMENDMENT.—Subparagraph 

15 (B) of section 6662A(e)(2) of such Code is amend16 ed— 

17 (A) by striking ‘‘section 6662(h)’’ and in18 serting ‘‘subsections (h) or (i) of section 6662’’, 

19 and 

20 (B) by striking ‘‘GROSS VALUATION

21 MISSTATEMENT PENALTY’’ in the heading and 

22 inserting ‘‘CERTAIN INCREASED UNDER23 PAYMENT PENALTIES’’. 

24 (b) REASONABLE CAUSE EXCEPTION NOT APPLICA25 BLE TO NONECONOMIC SUBSTANCE TRANSACTIONS, TAX


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1 SHELTERS, AND CERTAIN LARGE OR PUBLICLY TRADED

2 PERSONS.—Subsection (c) of section 6664 of such Code 

3 is amended— 

4 (1) by redesignating paragraphs (2) and (3) as 

5 paragraphs (3) and (4), respectively, 

6 (2) by striking ‘‘paragraph (2)’’ in paragraph 

7 (4), as so redesignated, and inserting ‘‘paragraph 

8 (3)’’, and 

9 (3) by inserting after paragraph (1) the fol10 lowing new paragraph: 

11 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

12 apply to— 

13 ‘‘(A) to any portion of an underpayment 

14 which is attributable to one or more tax shelters 

15 (as defined in section 6662(d)(2)(C)) or trans16 actions described in section 6662(b)(6), and 

17 ‘‘(B) to any taxpayer if such taxpayer is a 

18 specified person (as defined in section 

19 6662(d)(2)(D)(ii)).’’. 

20 (c) APPLICATION OF PENALTY FOR ERRONEOUS

21 CLAIM FOR REFUND OR CREDIT TO NONECONOMIC SUB22 STANCE TRANSACTIONS.—Section 6676 of such Code is 

23 amended by redesignating subsection (c) as subsection (d) 

24 and inserting after subsection (b) the following new sub25 section: 


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1 ‘‘(c) NONECONOMIC SUBSTANCE TRANSACTIONS

2 TREATED AS LACKING REASONABLE BASIS.—For pur3 poses of this section, any excessive amount which is attrib4 utable to any transaction described in section 6662(b)(6) 

5 shall not be treated as having a reasonable basis.’’. 

6 (d) SPECIAL UNDERSTATEMENT REDUCTION RULE

7 FOR CERTAIN LARGE OR PUBLICLY TRADED PERSONS.— 

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

9 6662(d) of such Code is amended by adding at the 

10 end the following new subparagraph: 

11 ‘‘(D) SPECIAL REDUCTION RULE FOR CER12 TAIN LARGE OR PUBLICLY TRADED PERSONS.— 

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

14 specified person— 

15 ‘‘(I) subparagraph (B) shall not 

16 apply, and 

17 ‘‘(II) the amount of the under18 statement under subparagraph (A) 

19 shall be reduced by that portion of the 

20 understatement which is attributable 

21 to any item with respect to which the 

22 taxpayer has a reasonable belief that 

23 the tax treatment of such item by the 

24 taxpayer is more likely than not the 

25 proper tax treatment of such item. 


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1 ‘‘(ii) SPECIFIED PERSON.—For pur2 poses of this subparagraph, the term ‘spec3 ified person’ means— 

4 ‘‘(I) any person required to file 

5 periodic or other reports under section 

6 13 of the Securities Exchange Act of 

7 1934, and 

8 ‘‘(II) any corporation with gross 

9 receipts in excess of $100,000,000 for 

10 the taxable year involved. 

11 All persons treated as a single employer 

12 under section 52(a) shall be treated as one 

13 person for purposes of subclause (II).’’. 

14 (2) CONFORMING AMENDMENT.—Subparagraph 

15 (C) of section 6662(d)(2) of such Code is amended 

16 by striking ‘‘Subparagraph (B)’’ and inserting ‘‘Sub17 paragraphs (B) and (D)(i)(II)’’. 

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

19 this section shall apply to transactions entered into after 

20 the date of the enactment of this Act. 

21 DIVISION B—MEDICARE AND 

22 MEDICAID IMPROVEMENTS 

23 SEC. 1001. TABLE OF CONTENTS OF DIVISION. 

24 The table of contents for this division is as follows: 

DIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS 

Sec. 1001. Table of contents of division. 


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TITLE I—IMPROVING HEALTH CARE VALUE 

Subtitle A—Provisions Related to Medicare Part A 

PART 1—MARKET BASKET UPDATES

Sec. 1101. Skilled nursing facility payment update. 

Sec. 1102. Inpatient rehabilitation facility payment update. 

Sec. 1103. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 2—OTHER MEDICARE PART A PROVISIONS

Sec. 1111. Payments to skilled nursing facilities. 

Sec. 1112. Medicare DSH report and payment adjustments in response to coverage expansion. 

Subtitle B—Provisions Related to Part B 

PART 1—PHYSICIANS’ SERVICES

Sec. 1121. Sustainable growth rate reform. 

Sec. 1122. Misvalued codes under the physician fee schedule. 

Sec. 1123. Payments for efficient areas. 

Sec. 1124. Modifications to the Physician Quality Reporting Initiative (PQRI). 

Sec. 1125. Adjustment to Medicare payment localities. 

PART 2—MARKET BASKET UPDATES

Sec. 1131. Incorporating productivity improvements into market basket updates 

that do not already incorporate such improvements. 

PART 3—OTHER PROVISIONS

Sec. 1141. Rental and purchase of power-driven wheelchairs. 

Sec. 1142. Extension of payment rule for brachytherapy. 

Sec. 1143. Home infusion therapy report to congress. 

Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost data and 

other data. 

Sec. 1145. Treatment of certain cancer hospitals. 

Sec. 1146. Medicare Improvement Fund. 

Sec. 1147. Payment for imaging services. 

Sec. 1148. Durable medical equipment program improvements. 

Sec. 1149. MedPAC study and report on bone mass measurement. 

Subtitle C—Provisions Related to Medicare Parts A and B 

Sec. 1151. Reducing potentially preventable hospital readmissions. 

Sec. 1152. Post acute care services payment reform plan and bundling pilot 

program. 

Sec. 1153. Home health payment update for 2010. 

Sec. 1154. Payment adjustments for home health care. 

Sec. 1155. Incorporating productivity improvements into market basket update 

for home health services. 

Sec. 1156. Limitation on Medicare exceptions to the prohibition on certain physician referrals made to hospitals. 

Sec. 1157. Institute of Medicine study of geographic adjustment factors under 

Medicare. 


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Sec. 1158. Revision of Medicare payment systems to address geographic inequities. 

Subtitle D—Medicare Advantage Reforms 

PART 1—PAYMENT AND ADMINISTRATION

Sec. 1161. Phase-in of payment based on fee-for-service costs. 

Sec. 1162. Quality bonus payments. 

Sec. 1163. Extension of Secretarial coding intensity adjustment authority. 

Sec. 1164. Simplification of annual beneficiary election periods. 

Sec. 1165. Extension of reasonable cost contracts. 

Sec. 1166. Limitation of waiver authority for employer group plans. 

Sec. 1167. Improving risk adjustment for payments. 

Sec. 1168. Elimination of MA Regional Plan Stabilization Fund. 

PART 2—BENEFICIARY PROTECTIONS AND ANTI-FRAUD

Sec. 1171. Limitation on cost-sharing for individual health services. 

Sec. 1172. Continuous open enrollment for enrollees in plans with enrollment 

suspension. 

Sec. 1173. Information for beneficiaries on MA plan administrative costs. 

Sec. 1174. Strengthening audit authority. 

Sec. 1175. Authority to deny plan bids. 

PART 3—TREATMENT OF SPECIAL NEEDS PLANS

Sec. 1176. Limitation on enrollment outside open enrollment period of individuals into chronic care specialized MA plans for special needs 

individuals. 

Sec. 1177. Extension of authority of special needs plans to restrict enrollment. 

Subtitle E—Improvements to Medicare Part D 

Sec. 1181. Elimination of coverage gap. 

Sec. 1182. Discounts for certain part D drugs in original coverage gap. 

Sec. 1183. Repeal of provision relating to submission of claims by pharmacies 

located in or contracting with long-term care facilities. 

Sec. 1184. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the 

annual out-of-pocket threshold under part D. 

Sec. 1185. Permitting mid-year changes in enrollment for formulary changes 

that adversely impact an enrollee. 

Subtitle F—Medicare Rural Access Protections 

Sec. 1191. Telehealth expansion and enhancements. 

Sec. 1192. Extension of outpatient hold harmless provision. 

Sec. 1193. Extension of section 508 hospital reclassifications. 

Sec. 1194. Extension of geographic floor for work. 

Sec. 1195. Extension of payment for technical component of certain physician 

pathology services. 

Sec. 1196. Extension of ambulance add-ons. 

TITLE II—MEDICARE BENEFICIARY IMPROVEMENTS 

Subtitle A—Improving and Simplifying Financial Assistance for Low Income 

Medicare Beneficiaries 


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Sec. 1201. Improving assets tests for Medicare Savings Program and low-income subsidy program. 

Sec. 1202. Elimination of part D cost-sharing for certain non-institutionalized 

full-benefit dual eligible individuals. 

Sec. 1203. Eliminating barriers to enrollment. 

Sec. 1204. Enhanced oversight relating to reimbursements for retroactive low 

income subsidy enrollment. 

Sec. 1205. Intelligent assignment in enrollment. 

Sec. 1206. Special enrollment period and automatic enrollment process for certain subsidy eligible individuals. 

Sec. 1207. Application of MA premiums prior to rebate in calculation of low 

income subsidy benchmark. 

Subtitle B—Reducing Health Disparities 

Sec. 1221. Ensuring effective communication in Medicare. 

Sec. 1222. Demonstration to promote access for Medicare beneficiaries with 

limited English proficiency by providing reimbursement for culturally and linguistically appropriate services. 

Sec. 1223. IOM report on impact of language access services. 

Sec. 1224. Definitions. 

Subtitle C—Miscellaneous Improvements 

Sec. 1231. Extension of therapy caps exceptions process. 

Sec. 1232. Extended months of coverage of immunosuppressive drugs for kidney transplant patients and other renal dialysis provisions. 

Sec. 1233. Advance care planning consultation. 

Sec. 1234. Part B special enrollment period and waiver of limited enrollment 

penalty for TRICARE beneficiaries. 

Sec. 1235. Exception for use of more recent tax year in case of gains from sale 

of primary residence in computing part B income-related premium. 

Sec. 1236. Demonstration program on use of patient decisions aids. 

TITLE III—PROMOTING PRIMARY CARE, MENTAL HEALTH 

SERVICES, AND COORDINATED CARE 

Sec. 1301. Accountable Care Organization pilot program. 

Sec. 1302. Medical home pilot program. 

Sec. 1303. Payment incentive for selected primary care services. 

Sec. 1304. Increased reimbursement rate for certified nurse-midwives. 

Sec. 1305. Coverage and waiver of cost-sharing for preventive services. 

Sec. 1306. Waiver of deductible for colorectal cancer screening tests regardless 

of coding, subsequent diagnosis, or ancillary tissue removal. 

Sec. 1307. Excluding clinical social worker services from coverage under the 

medicare skilled nursing facility prospective payment system 

and consolidated payment. 

Sec. 1308. Coverage of marriage and family therapist services and mental 

health counselor services. 

Sec. 1309. Extension of physician fee schedule mental health add-on. 

Sec. 1310. Expanding access to vaccines. 

TITLE IV—QUALITY 

Subtitle A—Comparative Effectiveness Research 


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Sec. 1401. Comparative effectiveness research. 

Subtitle B—Nursing Home Transparency 

PART 1—IMPROVING TRANSPARENCY OF INFORMATION ON SKILLED

NURSING FACILITIES AND NURSING FACILITIES

Sec. 1411. Required disclosure of ownership and additional disclosable parties 

information. 

Sec. 1412. Accountability requirements. 

Sec. 1413. Nursing home compare Medicare website. 

Sec. 1414. Reporting of expenditures. 

Sec. 1415. Standardized complaint form. 

Sec. 1416. Ensuring staffing accountability. 

PART 2—TARGETING ENFORCEMENT

Sec. 1421. Civil money penalties. 

Sec. 1422. National independent monitor pilot program. 

Sec. 1423. Notification of facility closure. 

PART 3—IMPROVING STAFF TRAINING

Sec. 1431. Dementia and abuse prevention training. 

Sec. 1432. Study and report on training required for certified nurse aides and 

supervisory staff. 

Subtitle C—Quality Measurements 

Sec. 1441. Establishment of national priorities for quality improvement. 

Sec. 1442. Development of new quality measures; GAO evaluation of data collection process for quality measurement. 

Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of quality 

measures. 

Sec. 1444. Application of quality measures. 

Sec. 1445. Consensus-based entity funding. 

Subtitle D—Physician Payments Sunshine Provision 

Sec. 1451. Reports on financial relationships between manufacturers and distributors of covered drugs, devices, biologicals, or medical supplies under Medicare, Medicaid, or CHIP and physicians and 

other health care entities and between physicians and other 

health care entities. 

Subtitle E—Public Reporting on Health Care-Associated Infections 

Sec. 1461. Requirement for public reporting by hospitals and ambulatory surgical centers on health care-associated infections. 

TITLE V—MEDICARE GRADUATE MEDICAL EDUCATION 

Sec. 1501. Distribution of unused residency positions. 

Sec. 1502. Increasing training in nonprovider settings. 

Sec. 1503. Rules for counting resident time for didactic and scholarly activities 

and other activities. 

Sec. 1504. Preservation of resident cap positions from closed hospitals. 

Sec. 1505. Improving accountability for approved medical residency training. 


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TITLE VI—PROGRAM INTEGRITY 

Subtitle A—Increased Funding To Fight Waste, Fraud, and Abuse 

Sec. 1601. Increased funding and flexibility to fight fraud and abuse. 

Subtitle B—Enhanced Penalties for Fraud and Abuse 

Sec. 1611. Enhanced penalties for false statements on provider or supplier enrollment applications. 

Sec. 1612. Enhanced penalties for submission of false statements material to 

a false claim. 

Sec. 1613. Enhanced penalties for delaying inspections. 

Sec. 1614. Enhanced hospice program safeguards. 

Sec. 1615. Enhanced penalties for individuals excluded from program participation. 

Sec. 1616. Enhanced penalties for provision of false information by Medicare 

Advantage and part D plans. 

Sec. 1617. Enhanced penalties for Medicare Advantage and part D marketing 

violations. 

Sec. 1618. Enhanced penalties for obstruction of program audits. 

Sec. 1619. Exclusion of certain individuals and entities from participation in 

Medicare and State health care programs. 

Subtitle C—Enhanced Program and Provider Protections 

Sec. 1631. Enhanced CMS program protection authority. 

Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure requirements relating to previous affiliations. 

Sec. 1633. Required inclusion of payment modifier for certain evaluation and 

management services. 

Sec. 1634. Evaluations and reports required under Medicare Integrity Program. 

Sec. 1635. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1636. Maximum period for submission of Medicare claims reduced to not 

more than 12 months. 

Sec. 1637. Physicians who order durable medical equipment or home health 

services required to be Medicare enrolled physicians or eligible 

professionals. 

Sec. 1638. Requirement for physicians to provide documentation on referrals to 

programs at high risk of waste and abuse. 

Sec. 1639. Face to face encounter with patient required before physicians may 

certify eligibility for home health services or durable medical 

equipment under Medicare. 

Sec. 1640. Extension of testimonial subpoena authority to program exclusion 

investigations. 

Sec. 1641. Required repayments of Medicare and Medicaid overpayments. 

Sec. 1642. Expanded application of hardship waivers for OIG exclusions to 

beneficiaries of any Federal health care program. 

Sec. 1643. Access to certain information on renal dialysis facilities. 

Sec. 1644. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicare. 

Sec. 1645. Conforming civil monetary penalties to False Claims Act amendments. 


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

Abuse 

Sec. 1651. Access to Information Necessary to Identify Fraud, Waste, and 

Abuse. 

Sec. 1652. Elimination of duplication between the Healthcare Integrity and 

Protection Data Bank and the National Practitioner Data 

Bank. 

Sec. 1653. Compliance with HIPAA privacy and security standards. 

TITLE VII—MEDICAID AND CHIP 

Subtitle A—Medicaid and Health Reform 

Sec. 1701. Eligibility for individuals with income below 1331⁄3 percent of the 

Federal poverty level. 

Sec. 1702. Requirements and special rules for certain Medicaid eligible individuals. 

Sec. 1703. CHIP and Medicaid maintenance of effort. 

Sec. 1704. Reduction in Medicaid DSH. 

Sec. 1705. Expanded outstationing. 

Subtitle B—Prevention 

Sec. 1711. Required coverage of preventive services. 

Sec. 1712. Tobacco cessation. 

Sec. 1713. Optional coverage of nurse home visitation services. 

Sec. 1714. State eligibility option for family planning services. 

Subtitle C—Access 

Sec. 1721. Payments to primary care practitioners. 

Sec. 1722. Medical home pilot program. 

Sec. 1723. Translation or interpretation services. 

Sec. 1724. Optional coverage for freestanding birth center services. 

Sec. 1725. Inclusion of public health clinics under the vaccines for children program. 

Subtitle D—Coverage 

Sec. 1731. Optional medicaid coverage of low-income HIV-infected individuals. 

Sec. 1732. Extending transitional Medicaid Assistance (TMA). 

Sec. 1733. Requirement of 12-month continuous coverage under certain CHIP 

programs. 

Subtitle E—Financing 

Sec. 1741. Payments to pharmacists. 

Sec. 1742. Prescription drug rebates. 

Sec. 1743. Extension of prescription drug discounts to enrollees of medicaid 

managed care organizations. 

Sec. 1744. Payments for graduate medical education. 

Subtitle F—Waste, Fraud, and Abuse 

Sec. 1751. Health-care acquired conditions. 

Sec. 1752. Evaluations and reports required under Medicaid Integrity Program. 


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Sec. 1753. Require providers and suppliers to adopt programs to reduce waste, 

fraud, and abuse. 

Sec. 1754. Overpayments. 

Sec. 1755. Managed Care Organizations. 

Sec. 1756. Termination of provider participation under Medicaid and CHIP if 

terminated under Medicare or other State plan or child health 

plan. 

Sec. 1757. Medicaid and CHIP exclusion from participation relating to certain 

ownership, control, and management affiliations. 

Sec. 1758. Requirement to report expanded set of data elements under MMIS 

to detect fraud and abuse. 

Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to 

register under Medicaid. 

Sec. 1760. Denial of payments for litigation-related misconduct. 

Subtitle G—Puerto Rico and the Territories 

Sec. 1771. Puerto Rico and territories. 

Subtitle H—Miscellaneous 

Sec. 1781. Technical corrections. 

Sec. 1782. Extension of QI program. 

TITLE VIII—REVENUE-RELATED PROVISIONS 

Sec. 1801. Disclosures to facilitate identification of individuals likely to be ineligible for the low-income assistance under the Medicare prescription drug program to assist Social Security Administration’s outreach to eligible individuals. 

Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for 

Trust Fund. 

TITLE IX—MISCELLANEOUS PROVISIONS 

Sec. 1901. Repeal of trigger provision. 

Sec. 1902. Repeal of comparative cost adjustment (CCA) program. 

Sec. 1903. Extension of gainsharing demonstration. 

Sec. 1904. Grants to States for quality home visitation programs for families 

with young children and families expecting children. 

Sec. 1905. Improved coordination and protection for dual eligibles. 


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1 TITLE I—IMPROVING HEALTH 

2 CARE VALUE 

3 Subtitle A—Provisions Related to 

4 Medicare Part A 

5 PART 1—MARKET BASKET UPDATES 

6 SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE. 

7 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the 

8 Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is 

9 amended— 

10 (1) in subclause (III), by striking ‘‘and’’ at the 

11 end; 

12 (2) by redesignating subclause (IV) as sub13 clause (VI); and 

14 (3) by inserting after subclause (III) the fol15 lowing new subclauses: 

16 ‘‘(IV) for each of fiscal years 

17 2004 through 2009, the rate com18 puted for the previous fiscal year in19 creased by the skilled nursing facility 

20 market basket percentage change for 

21 the fiscal year involved; 

22 ‘‘(V) for fiscal year 2010, the 

23 rate computed for the previous fiscal 

24 year; and’’. 


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1 (b) DELAYED EFFECTIVE DATE.—Section 

2 1888(e)(4)(E)(ii)(V) of the Social Security Act, as in3 serted by subsection (a)(3), shall not apply to payment 

4 for days before January 1, 2010. 

5 SEC. 1102. INPATIENT REHABILITATION FACILITY PAY6 MENT UPDATE. 

7 (a) IN GENERAL.—Section 1886(j)(3)(C) of the So8 cial Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended 

9 by striking ‘‘and 2009’’ and inserting ‘‘through 2010’’. 

10 (b) DELAYED EFFECTIVE DATE.—The amendment 

11 made by subsection (a) shall not apply to payment units 

12 occurring before January 1, 2010. 

13 SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVE14 MENTS INTO MARKET BASKET UPDATES 

15 THAT DO NOT ALREADY INCORPORATE SUCH 

16 IMPROVEMENTS. 

17 (a) INPATIENT ACUTE HOSPITALS.—Section 

18 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 

19 1395ww(b)(3)(B)) is amended— 

20 (1) in clause (iii)— 

21 (A) by striking ‘‘(iii) For purposes of this 

22 subparagraph,’’ and inserting ‘‘(iii)(I) For pur23 poses of this subparagraph, subject to the pro24 ductivity adjustment described in subclause 

25 (II),’’; and 


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

2 subclause: 

3 ‘‘(II) The productivity adjustment described in this 

4 subclause, with respect to an increase or change for a fis5 cal year or year or cost reporting period, or other annual 

6 period, is a productivity offset equal to the percentage 

7 change in the 10-year moving average of annual economy8 wide private nonfarm business multi-factor productivity 

9 (as recently published before the promulgation of such in10 crease for the year or period involved). Except as other11 wise provided, any reference to the increase described in 

12 this clause shall be a reference to the percentage increase 

13 described in subclause (I) minus the percentage change 

14 under this subclause.’’; 

15 (2) in the first sentence of clause (viii)(I), by 

16 inserting ‘‘(but not below zero)’’ after ‘‘shall be re17 duced’’; and 

18 (3) in the first sentence of clause (ix)(I)— 

19 (A) by inserting ‘‘(determined without re20 gard to clause (iii)(II)’’ after ‘‘clause (i)’’ the 

21 second time it appears; and 

22 (B) by inserting ‘‘(but not below zero)’’ 

23 after ‘‘reduced’’. 

24 (b) SKILLED NURSING FACILITIES.—Section 

25 1888(e)(5)(B) of such Act (42 U.S.C. 1395yy(e)(5)(B)) 


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1 is amended by inserting ‘‘subject to the productivity ad2 justment described in section 1886(b)(3)(B)(iii)(II)’’ after 

3 ‘‘as calculated by the Secretary’’. 

4 (c) LONG-TERM CARE HOSPITALS.—Section 

5 1886(m) of the Social Security Act (42 U.S.C. 

6 1395ww(m)) is amended by adding at the end the fol7 lowing new paragraph: 

8 ‘‘(3) PRODUCTIVITY ADJUSTMENT.—In imple9 menting the system described in paragraph (1) for 

10 discharges occurring during the rate year ending in 

11 2010 or any subsequent rate year for a hospital, to 

12 the extent that an annual percentage increase factor 

13 applies to a base rate for such discharges for the 

14 hospital, such factor shall be subject to the produc15 tivity adjustment described in section 

16 1886(b)(3)(B)(iii)(II).’’. 

17 (d) INPATIENT REHABILITATION FACILITIES.—The 

18 second sentence of section 1886(j)(3)(C) of the Social Se19 curity Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by in20 serting ‘‘(subject to the productivity adjustment described 

21 in section 1886(b)(3)(B)(iii)(II))’’ after ‘‘appropriate per22 centage increase’’. 

23 (e) PSYCHIATRIC HOSPITALS.—Section 1886 of the 

24 Social Security Act (42 U.S.C. 1395ww) is amended by 

25 adding at the end the following new subsection: 


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1 ‘‘(o) PROSPECTIVE PAYMENT FOR PSYCHIATRIC

2 HOSPITALS.— 

3 ‘‘(1) REFERENCE TO ESTABLISHMENT AND IM4 PLEMENTATION OF SYSTEM.—For provisions related 

5 to the establishment and implementation of a pro6 spective payment system for payments under this 

7 title for inpatient hospital services furnished by psy8 chiatric hospitals (as described in clause (i) of sub9 section (d)(1)(B)) and psychiatric units (as de10 scribed in the matter following clause (v) of such 

11 subsection), see section 124 of the Medicare, Med12 icaid, and SCHIP Balanced Budget Refinement Act 

13 of 1999. 

14 ‘‘(2) PRODUCTIVITY ADJUSTMENT.—In imple15 menting the system described in paragraph (1) for 

16 discharges occurring during the rate year ending in 

17 2011 or any subsequent rate year for a psychiatric 

18 hospital or unit described in such paragraph, to the 

19 extent that an annual percentage increase factor ap20 plies to a base rate for such discharges for the hos21 pital or unit, respectively, such factor shall be sub22 ject to the productivity adjustment described in sec23 tion 1886(b)(3)(B)(iii)(II).’’. 

24 (f) HOSPICE CARE.—Subclause (VII) of section 

25 1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C. 


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1 1395f(i)(1)(C)(ii)) is amended by inserting after ‘‘the 

2 market basket percentage increase’’ the following: ‘‘(which 

3 is subject to the productivity adjustment described in sec4 tion 1886(b)(3)(B)(iii)(II))’’. 

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

6 subsections (a), (b), (d), and (f) shall apply to annual in7 creases effected for fiscal years beginning with fiscal year 

8 2010. 

9 PART 2—OTHER MEDICARE PART A PROVISIONS 

10 SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES. 

11 (a) CHANGE IN RECALIBRATION FACTOR.— 

12 (1) ANALYSIS.—The Secretary of Health and 

13 Human Services shall conduct, using calendar year 

14 2006 claims data, an initial analysis comparing total 

15 payments under title XVIII of the Social Security 

16 Act for skilled nursing facility services under the 

17 RUG–53 and under the RUG–44 classification sys18 tems. 

19 (2) ADJUSTMENT IN RECALIBRATION FAC20 TOR.—Based on the initial analysis under paragraph 

21 (1), the Secretary shall adjust the case mix indexes 

22 under section 1888(e)(4)(G)(i) of the Social Security 

23 Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for fiscal year 

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1 ing facilities issued by such Secretary on May 12, 

2 2009 (74 Federal Register 22214 et seq.). 

3 (b) CHANGE IN PAYMENT FOR NONTHERAPY ANCIL4 LARY (NTA) SERVICES AND THERAPY SERVICES.— 

5 (1) CHANGES UNDER CURRENT SNF CLASSI6 FICATION SYSTEM.— 

7 (A) IN GENERAL.—Subject to subpara8 graph (B), the Secretary of Health and Human 

9 Services shall, under the system for payment of 

10 skilled nursing facility services under section 

11 1888(e) of the Social Security Act (42 U.S.C. 

12 1395yy(e)), increase payment by 10 percent for 

13 non-therapy ancillary services (as specified by 

14 the Secretary in the notice issued on November 

15 27, 1998 (63 Federal Register 65561 et seq.)) 

16 and shall decrease payment for the therapy case 

17 mix component of such rates by 5.5 percent. 

18 (B) EFFECTIVE DATE.—The changes in 

19 payment described in subparagraph (A) shall 

20 apply for days on or after January 1, 2010, 

21 and until the Secretary implements an alter22 native case mix classification system for pay23 ment of skilled nursing facility services under 

24 section 1888(e) of the Social Security Act (42 

25 U.S.C. 1395yy(e)). 


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1 (C) IMPLEMENTATION.—Notwithstanding 

2 any other provision of law, the Secretary may 

3 implement by program instruction or otherwise 

4 the provisions of this paragraph. 

5 (2) CHANGES UNDER A FUTURE SNF CASE MIX

6 CLASSIFICATION SYSTEM.— 

7 (A) ANALYSIS.— 

8 (i) IN GENERAL.—The Secretary of 

9 Health and Human Services shall analyze 

10 payments for non-therapy ancillary services 

11 under a future skilled nursing facility clas12 sification system to ensure the accuracy of 

13 payment for non-therapy ancillary services. 

14 Such analysis shall consider use of appro15 priate indicators which may include age, 

16 physical and mental status, ability to per17 form activities of daily living, prior nursing 

18 home stay, broad RUG category, and a 

19 proxy for length of stay. 

20 (ii) APPLICATION.—Such analysis 

21 shall be conducted in a manner such that 

22 the future skilled nursing facility classifica23 tion system is implemented to apply to 

24 services furnished during a fiscal year be25 ginning with fiscal year 2011. 


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1 (B) CONSULTATION.—In conducting the 

2 analysis under subparagraph (A), the Secretary 

3 shall consult with interested parties, including 

4 the Medicare Payment Advisory Commission 

5 and other interested stakeholders, to identify 

6 appropriate predictors of nontherapy ancillary 

7 costs. 

8 (C) RULEMAKING.—The Secretary shall 

9 include the result of the analysis under sub10 paragraph (A) in the fiscal year 2011 rule11 making cycle for purposes of implementation 

12 beginning for such fiscal year. 

13 (D) IMPLEMENTATION.—Subject to sub14 paragraph (E) and consistent with subpara15 graph (A)(ii), the Secretary shall implement 

16 changes to payments for non-therapy ancillary 

17 services (which may include a separate rate 

18 component for non-therapy ancillary services 

19 and may include use of a model that predicts 

20 payment amounts applicable for non-therapy 

21 ancillary services) under such future skilled 

22 nursing facility services classification system as 

23 the Secretary determines appropriate based on 

24 the analysis conducted pursuant to subpara25 graph (A). 


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1 (E) BUDGET NEUTRALITY.—The Secretary 

2 shall implement changes described in subpara3 graph (D) in a manner such that the estimated 

4 expenditures under such future skilled nursing 

5 facility services classification system for a fiscal 

6 year beginning with fiscal year 2011 with such 

7 changes would be equal to the estimated ex8 penditures that would otherwise occur under 

9 title XVIII of the Social Security Act under 

10 such future skilled nursing facility services clas11 sification system for such year without such 

12 changes. 

13 (c) OUTLIER POLICY FOR NTA AND THERAPY.—Sec14 tion 1888(e) of the Social Security Act (42 U.S.C. 

15 1395yy(e)) is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(13) OUTLIERS FOR NTA AND THERAPY.— 

18 ‘‘(A) IN GENERAL.—With respect to 

19 outliers because of unusual variations in the 

20 type or amount of medically necessary care, be21 ginning with October 1, 2010, the Secretary— 

22 ‘‘(i) shall provide for an addition or 

23 adjustment to the payment amount other24 wise made under this section with respect 


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1 to non-therapy ancillary services in the 

2 case of such outliers; and 

3 ‘‘(ii) may provide for such an addition 

4 or adjustment to the payment amount oth5 erwise made under this section with re6 spect to therapy services in the case of 

7 such outliers. 

8 ‘‘(B) OUTLIERS BASED ON AGGREGATE

9 COSTS.—Outlier adjustments or additional pay10 ments described in subparagraph (A) shall be 

11 based on aggregate costs during a stay in a 

12 skilled nursing facility and not on the number 

13 of days in such stay. 

14 ‘‘(C) BUDGET NEUTRALITY.—The Sec15 retary shall reduce estimated payments that 

16 would otherwise be made under the prospective 

17 payment system under this subsection with re18 spect to a fiscal year by 2 percent. The total 

19 amount of the additional payments or payment 

20 adjustments for outliers made under this para21 graph with respect to a fiscal year may not ex22 ceed 2 percent of the total payments projected 

23 or estimated to be made based on the prospec24 tive payment system under this subsection for 

25 the fiscal year.’’. 


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1 (d) CONFORMING AMENDMENTS.—Section 

2 1888(e)(8) of such Act (42 U.S.C. 1395yy(e)(8)) is 

3 amended— 

4 (1) in subparagraph (A), by inserting ‘‘and ad5 justment under section 1111(b) of the America’s Af6 fordable Health Choices Act of 2009; 

7 (2) in subparagraph (B), by striking ‘‘and’’; 

8 (3) in subparagraph (C), by striking the period 

9 and inserting ‘‘; and’’; and 

10 (4) by adding at the end the following new sub11 paragraph: 

12 ‘‘(D) the establishment of outliers under 

13 paragraph (13).’’. 

14 SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUST15 MENTS IN RESPONSE TO COVERAGE EXPAN16 SION. 

17 (a) DSH REPORT.— 

18 (1) IN GENERAL.—Not later than January 1, 

19 2016, the Secretary of Health and Human Services 

20 shall submit to Congress a report on Medicare DSH 

21 taking into account the impact of the health care re22 forms carried out under division A in reducing the 

23 number of uninsured individuals. The report shall 

24 include recommendations relating to the following: 


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1 (A) The appropriate amount, targeting, 

2 and distribution of Medicare DSH to com3 pensate for higher Medicare costs associated 

4 with serving low-income beneficiaries (taking 

5 into account variations in the empirical jus6 tification for Medicare DSH attributable to hos7 pital characteristics, including bed size), con8 sistent with the original intent of Medicare 

9 DSH. 

10 (B) The appropriate amount, targeting, 

11 and distribution of Medicare DSH to hospitals 

12 given their continued uncompensated care costs, 

13 to the extent such costs remain. 

14 (2) COORDINATION WITH MEDICAID DSH RE15 PORT.—The Secretary shall coordinate the report 

16 under this subsection with the report on Medicaid 

17 DSH under section 1704(a). 

18 (b) PAYMENT ADJUSTMENTS IN RESPONSE TO COV19 ERAGE EXPANSION.— 

20 (1) IN GENERAL.—If there is a significant de21 crease in the national rate of uninsurance as a result 

22 of this Act (as determined under paragraph (2)(A)), 

23 then the Secretary of Health and Human Services 

24 shall, beginning in fiscal year 2017, implement the 

25 following adjustments to Medicare DSH: 


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1 (A) The amount of Medicare DSH shall be 

2 adjusted based on the recommendations of the 

3 report under subsection (a)(1)(A) and shall 

4 take into account variations in the empirical 

5 justification for Medicare DSH attributable to 

6 hospital characteristics, including bed size. 

7 (B) Subject to paragraph (3), increase 

8 Medicare DSH for a hospital by an additional 

9 amount that is based on the amount of uncom10 pensated care provided by the hospital based on 

11 criteria for uncompensated care as determined 

12 by the Secretary, which shall exclude bad debt. 

13 (2) SIGNIFICANT DECREASE IN NATIONAL RATE

14 OF UNINSURANCE AS A RESULT OF THIS ACT.—For 

15 purposes of this subsection— 

16 (A) IN GENERAL.—There is a ‘‘significant 

17 decrease in the national rate of uninsurance as 

18 a result of this Act’’ if there is a decrease in 

19 the national rate of uninsurance (as defined in 

20 subparagraph (B)) from 2012 to 2014 that ex21 ceeds 8 percentage points. 

22 (B) NATIONAL RATE OF UNINSURANCE

23 DEFINED.—The term ‘‘national rate of 

24 uninsurance’’ means, for a year, such rate for 

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1 mined and published by the Bureau of the Cen2 sus in its Current Population Survey in or 

3 about September of the succeeding year. 

4 (3) UNCOMPENSATED CARE INCREASE.— 

5 (A) COMPUTATION OF DSH SAVINGS.—For 

6 each fiscal year (beginning with fiscal year 

7 2017), the Secretary shall estimate the aggre8 gate reduction in Medicare DSH that will result 

9 from the adjustment under paragraph (1)(A). 

10 (B) STRUCTURE OF PAYMENT IN11 CREASE.—The Secretary shall compute the in12 crease in Medicare DSH under paragraph 

13 (1)(B) for a fiscal year in accordance with a 

14 formula established by the Secretary that pro15 vides that— 

16 (i) the aggregate amount of such in17 crease for the fiscal year does not exceed 

18 50 percent of the aggregate reduction in 

19 Medicare DSH estimated by the Secretary 

20 for such fiscal year; and 

21 (ii) hospitals with higher levels of un22 compensated care receive a greater in23 crease. 

24 (c) MEDICARE DSH.—In this section, the term 

25 ‘‘Medicare DSH’’ means adjustments in payments under 


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1 section 1886(d)(5)(F) of the Social Security Act (42 

2 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital services 

3 furnished by disproportionate share hospitals. 

4 Subtitle B—Provisions Related to 

5 Part B 

6 PART 1—PHYSICIANS’ SERVICES 

7 SEC. 1121. SUSTAINABLE GROWTH RATE REFORM. 

8 (a) TRANSITIONAL UPDATE FOR 2010.—Section 

9 1848(d) of the Social Security Act (42 U.S.C. 1395w– 

10 4(d)) is amended by adding at the end the following new 

11 paragraph: 

12 ‘‘(10) UPDATE FOR 2010.—The update to the 

13 single conversion factor established in paragraph 

14 (1)(C) for 2010 shall be the percentage increase in 

15 the MEI (as defined in section 1842(i)(3)) for that 

16 year.’’. 

17 (b) REBASING SGR USING 2009; LIMITATION ON

18 CUMULATIVE ADJUSTMENT PERIOD.—Section 1848(d)(4) 

19 of such Act (42 U.S.C. 1395w–4(d)(4)) is amended— 

20 (1) in subparagraph (B), by striking ‘‘subpara21 graph (D)’’ and inserting ‘‘subparagraphs (D) and 

22 (G)’’; and 

23 (2) by adding at the end the following new sub24 paragraph: 


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1 ‘‘(G) REBASING USING 2009 FOR FUTURE

2 UPDATE ADJUSTMENTS.—In determining the 

3 update adjustment factor under subparagraph 

4 (B) for 2011 and subsequent years— 

5 ‘‘(i) the allowed expenditures for 2009 

6 shall be equal to the amount of the actual 

7 expenditures for physicians’ services during 

8 2009; and 

9 ‘‘(ii) the reference in subparagraph 

10 (B)(ii)(I) to ‘April 1, 1996’ shall be treat11 ed as a reference to ‘January 1, 2009 (or, 

12 if later, the first day of the fifth year be13 fore the year involved)’.’’. 

14 (c) LIMITATION ON PHYSICIANS’ SERVICES IN15 CLUDED IN TARGET GROWTH RATE COMPUTATION TO

16 SERVICES COVERED UNDER PHYSICIAN FEE SCHED17 ULE.—Effective for services furnished on or after January 

18 1, 2009, section 1848(f)(4)(A) of such Act is amended 

19 striking ‘‘(such as clinical’’ and all that follows through 

20 ‘‘in a physician’s office’’ and inserting ‘‘for which payment 

21 under this part is made under the fee schedule under this 

22 section, for services for practitioners described in section 

23 1842(b)(18)(C) on a basis related to such fee schedule, 

24 or for services described in section 1861(p) (other than 


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1 such services when furnished in the facility of a provider 

2 of services)’’. 

3 (d) ESTABLISHMENT OF SEPARATE TARGET

4 GROWTH RATES FOR CATEGORIES OF SERVICES.— 

5 (1) ESTABLISHMENT OF SERVICE CAT6 EGORIES.—Subsection (j) of section 1848 of the So7 cial Security Act (42 U.S.C. 1395w–4) is amended 

8 by adding at the end the following new paragraph: 

9 ‘‘(5) SERVICE CATEGORIES.—For services fur10 nished on or after January 1, 2009, each of the fol11 lowing categories of physicians’ services (as defined 

12 in paragraph (3)) shall be treated as a separate 

13 ‘service category’: 

14 ‘‘(A) Evaluation and management services 

15 that are procedure codes (for services covered 

16 under this title) for— 

17 ‘‘(i) services in the category des18 ignated Evaluation and Management in the 

19 Health Care Common Procedure Coding 

20 System (established by the Secretary under 

21 subsection (c)(5) as of December 31, 2009, 

22 and as subsequently modified by the Sec23 retary); and 


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1 ‘‘(ii) preventive services (as defined in 

2 section 1861(iii)) for which payment is 

3 made under this section. 

4 ‘‘(B) All other services not described in 

5 subparagraph (A). 

6 Service categories established under this paragraph 

7 shall apply without regard to the specialty of the 

8 physician furnishing the service.’’. 

9 (2) ESTABLISHMENT OF SEPARATE CONVER10 SION FACTORS FOR EACH SERVICE CATEGORY.— 

11 Subsection (d)(1) of section 1848 of the Social Secu12 rity Act (42 U.S.C. 1395w–4) is amended— 

13 (A) in subparagraph (A)— 

14 (i) by designating the sentence begin15 ning ‘‘The conversion factor’’ as clause (i) 

16 with the heading ‘‘APPLICATION OF SIN17 GLE CONVERSION FACTOR.—’’ and with 

18 appropriate indentation; 

19 (ii) by striking ‘‘The conversion fac20 tor’’ and inserting ‘‘Subject to clause (ii), 

21 the conversion factor’’; and 

22 (iii) by adding at the end the fol23 lowing new clause: 


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1 ‘‘(ii) APPLICATION OF MULTIPLE CON2 VERSION FACTORS BEGINNING WITH

3 2011.— 

4 ‘‘(I) IN GENERAL.—In applying 

5 clause (i) for years beginning with 

6 2011, separate conversion factors 

7 shall be established for each service 

8 category of physicians’ services (as de9 fined in subsection (j)(5)) and any 

10 reference in this section to a conver11 sion factor for such years shall be 

12 deemed to be a reference to the con13 version factor for each of such cat14 egories. 

15 ‘‘(II) INITIAL CONVERSION FAC16 TORS.—Such factors for 2011 shall be 

17 based upon the single conversion fac18 tor for the previous year multiplied by 

19 the update established under para20 graph (11) for such category for 

21 2011. 

22 ‘‘(III) UPDATING OF CONVER23 SION FACTORS.—Such factor for a 

24 service category for a subsequent year 

25 shall be based upon the conversion 


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1 factor for such category for the pre2 vious year and adjusted by the update 

3 established for such category under 

4 paragraph (11) for the year in5 volved.’’; and 

6 (B) in subparagraph (D), by striking 

7 ‘‘other physicians’ services’’ and inserting ‘‘for 

8 physicians’ services described in the service cat9 egory described in subsection (j)(5)(B)’’. 

10 (3) ESTABLISHING UPDATES FOR CONVERSION

11 FACTORS FOR SERVICE CATEGORIES.—Section 

12 1848(d) of the Social Security Act (42 U.S.C. 

13 1395w–4(d)), as amended by subsection (a), is 

14 amended— 

15 (A) in paragraph (4)(C)(iii), by striking 

16 ‘‘The allowed’’ and inserting ‘‘Subject to para17 graph (11)(B), the allowed’’; and 

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

19 paragraph: 

20 ‘‘(11) UPDATES FOR SERVICE CATEGORIES BE21 GINNING WITH 2011.— 

22 ‘‘(A) IN GENERAL.—In applying paragraph 

23 (4) for a year beginning with 2011, the fol24 lowing rules apply: 


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1 ‘‘(i) APPLICATION OF SEPARATE UP2 DATE ADJUSTMENTS FOR EACH SERVICE

3 CATEGORY.—Pursuant to paragraph 

4 (1)(A)(ii)(I), the update shall be made to 

5 the conversion factor for each service cat6 egory (as defined in subsection (j)(5)) 

7 based upon an update adjustment factor 

8 for the respective category and year and 

9 the update adjustment factor shall be com10 puted, for a year, separately for each serv11 ice category. 

12 ‘‘(ii) COMPUTATION OF ALLOWED AND

13 ACTUAL EXPENDITURES BASED ON SERV14 ICE CATEGORIES.—In computing the prior 

15 year adjustment component and the cumu16 lative adjustment component under clauses 

17 (i) and (ii) of paragraph (4)(B), the fol18 lowing rules apply: 

19 ‘‘(I) APPLICATION BASED ON

20 SERVICE CATEGORIES.—The allowed 

21 expenditures and actual expenditures 

22 shall be the allowed and actual ex23 penditures for the service category, as 

24 determined under subparagraph (B). 


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1 ‘‘(II) APPLICATION OF CATEGORY

2 SPECIFIC TARGET GROWTH RATE.— 

3 The growth rate applied under clause 

4 (ii)(II) of such paragraph shall be the 

5 target growth rate for the service cat6 egory involved under subsection (f)(5). 

7 ‘‘(B) DETERMINATION OF ALLOWED EX8 PENDITURES.—In applying paragraph (4) for a 

9 year beginning with 2010, notwithstanding sub10 paragraph (C)(iii) of such paragraph, the al11 lowed expenditures for a service category for a 

12 year is an amount computed by the Secretary 

13 as follows: 

14 ‘‘(i) FOR 2010.—For 2010: 

15 ‘‘(I) TOTAL 2009 ACTUAL EX16 PENDITURES FOR ALL SERVICES IN17 CLUDED IN SGR COMPUTATION FOR

18 EACH SERVICE CATEGORY.—Compute 

19 total actual expenditures for physi20 cians’ services (as defined in sub21 section (f)(4)(A)) for 2009 for each 

22 service category. 

23 ‘‘(II) INCREASE BY GROWTH

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1 EGORY.—Compute allowed expendi2 tures for the service category for 2010 

3 by increasing the allowed expenditures 

4 for the service category for 2009 com5 puted under subclause (I) by the tar6 get growth rate for such service cat7 egory under subsection (f) for 2010. 

8 ‘‘(ii) FOR SUBSEQUENT YEARS.—For 

9 a subsequent year, take the amount of al10 lowed expenditures for such category for 

11 the preceding year (under clause (i) or this 

12 clause) and increase it by the target 

13 growth rate determined under subsection 

14 (f) for such category and year.’’. 

15 (4) APPLICATION OF SEPARATE TARGET

16 GROWTH RATES FOR EACH CATEGORY.— 

17 (A) IN GENERAL.—Section 1848(f) of the 

18 Social Security Act (42 U.S.C. 1395w–4(f)) is 

19 amended by adding at the end the following 

20 new paragraph: 

21 ‘‘(5) APPLICATION OF SEPARATE TARGET

22 GROWTH RATES FOR EACH SERVICE CATEGORY BE23 GINNING WITH 2010.—The target growth rate for a 

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1 ice category (as defined in subsection (j)(5)) and 

2 shall be computed using the same method for com3 puting the target growth rate except that the factor 

4 described in paragraph (2)(C) for— 

5 ‘‘(A) the service category described in sub6 section (j)(5)(A) shall be increased by 0.02; and 

7 ‘‘(B) the service category described in sub8 section (j)(5)(B) shall be increased by 0.01.’’. 

9 (B) USE OF TARGET GROWTH RATES.— 

10 Section 1848 of such Act is further amended— 

11 (i) in subsection (d)— 

12 (I) in paragraph (1)(E)(ii), by in13 serting ‘‘or target’’ after ‘‘sustain14 able’’; and 

15 (II) in paragraph (4)(B)(ii)(II), 

16 by inserting ‘‘or target’’ after ‘‘sus17 tainable’’; and 

18 (ii) in the heading of subsection (f), 

19 by inserting ‘‘AND TARGET GROWTH

20 RATE’’ after ‘‘SUSTAINABLE GROWTH

21 RATE’’; 

22 (iii) in subsection (f)(1)— 

23 (I) by striking ‘‘and’’ at the end 

24 of subparagraph (A); 


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1 (II) in subparagraph (B), by in2 serting ‘‘before 2010’’ after ‘‘each 

3 succeeding year’’ and by striking the 

4 period at the end and inserting ‘‘; 

5 and’’; and 

6 (III) by adding at the end the 

7 following new subparagraph: 

8 ‘‘(C) November 1 of each succeeding year 

9 the target growth rate for such succeeding year 

10 and each of the 2 preceding years.’’; and 

11 (iv) in subsection (f)(2), in the matter 

12 before subparagraph (A), by inserting after 

13 ‘‘beginning with 2000’’ the following: ‘‘and 

14 ending with 2009’’. 

15 (e) APPLICATION TO ACCOUNTABLE CARE ORGANI16 ZATION PILOT PROGRAM.—In applying the target growth 

17 rate under subsections (d) and (f) of section 1848 of the 

18 Social Security Act to services furnished by a practitioner 

19 to beneficiaries who are attributable to an accountable 

20 care organization under the pilot program provided under 

21 section 1866D of such Act, the Secretary of Health and 

22 Human Services shall develop, not later than January 1, 

23 2012, for application beginning with 2012, a method 

24 that— 


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1 (1) allows each such organization to have its 

2 own expenditure targets and updates for such practi3 tioners, with respect to beneficiaries who are attrib4 utable to that organization, that are consistent with 

5 the methodologies described in such subsection (f); 

6 and 

7 (2) provides that the target growth rate appli8 cable to other physicians shall not apply to such 

9 physicians to the extent that the physicians’ services 

10 are furnished through the accountable care organiza11 tion. 

12 In applying paragraph (1), the Secretary of Health and 

13 Human Services may apply the difference in the update 

14 under such paragraph on a claim-by-claim or lump sum 

15 basis and such a payment shall be taken into account 

16 under the pilot program. 

17 SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE 

18 SCHEDULE. 

19 (a) IN GENERAL.—Section 1848(c)(2) of the Social 

20 Security Act (42 U.S.C. 1395w–4(c)(2)) is amended by 

21 adding at the end the following new subparagraphs: 

22 ‘‘(K) POTENTIALLY MISVALUED CODES.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 shall— 


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1 ‘‘(I) periodically identify services 

2 as being potentially misvalued using 

3 criteria specified in clause (ii); and 

4 ‘‘(II) review and make appro5 priate adjustments to the relative val6 ues established under this paragraph 

7 for services identified as being poten8 tially misvalued under subclause (I). 

9 ‘‘(ii) IDENTIFICATION OF POTEN10 TIALLY MISVALUED CODES.—For purposes 

11 of identifying potentially misvalued services 

12 pursuant to clause (i)(I), the Secretary 

13 shall examine (as the Secretary determines 

14 to be appropriate) codes (and families of 

15 codes as appropriate) for which there has 

16 been the fastest growth; codes (and fami17 lies of codes as appropriate) that have ex18 perienced substantial changes in practice 

19 expenses; codes for new technologies or 

20 services within an appropriate period (such 

21 as three years) after the relative values are 

22 initially established for such codes; mul23 tiple codes that are frequently billed in 

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1 larly those that are often billed multiple 

2 times for a single treatment; codes which 

3 have not been subject to review since the 

4 implementation of the RBRVS (the so5 called ‘Harvard-valued codes’); and such 

6 other codes determined to be appropriate 

7 by the Secretary. 

8 ‘‘(iii) REVIEW AND ADJUSTMENTS.— 

9 ‘‘(I) The Secretary may use ex10 isting processes to receive rec11 ommendations on the review and ap12 propriate adjustment of potentially 

13 misvalued services described clause 

14 (i)(II). 

15 ‘‘(II) The Secretary may conduct 

16 surveys, other data collection activi17 ties, studies, or other analyses as the 

18 Secretary determines to be appro19 priate to facilitate the review and ap20 propriate adjustment described in 

21 clause (i)(II). 

22 ‘‘(III) The Secretary may use 

23 analytic contractors to identify and 

24 analyze services identified under 

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1 lect data, and make recommendations 

2 on the review and appropriate adjust3 ment of services described in clause 

4 (i)(II). 

5 ‘‘(IV) The Secretary may coordi6 nate the review and appropriate ad7 justment described in clause (i)(II) 

8 with the periodic review described in 

9 subparagraph (B). 

10 ‘‘(V) As part of the review and 

11 adjustment described in clause (i)(II), 

12 including with respect to codes with 

13 low relative values described in clause 

14 (ii), the Secretary may make appro15 priate coding revisions (including 

16 using existing processes for consider17 ation of coding changes) which may 

18 include consolidation of individual 

19 services into bundled codes for pay20 ment under the fee schedule under 

21 subsection (b). 

22 ‘‘(VI) The provisions of subpara23 graph (B)(ii)(II) shall apply to adjust24 ments to relative value units made 

25 pursuant to this subparagraph in the 


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1 same manner as such provisions apply 

2 to adjustments under subparagraph 

3 (B)(ii)(II). 

4 ‘‘(L) VALIDATING RELATIVE VALUE

5 UNITS.— 

6 ‘‘(i) IN GENERAL.—The Secretary 

7 shall establish a process to validate relative 

8 value units under the fee schedule under 

9 subsection (b). 

10 ‘‘(ii) COMPONENTS AND ELEMENTS

11 OF WORK.—The process described in 

12 clause (i) may include validation of work 

13 elements (such as time, mental effort and 

14 professional judgment, technical skill and 

15 physical effort, and stress due to risk) in16 volved with furnishing a service and may 

17 include validation of the pre, post, and 

18 intra-service components of work. 

19 ‘‘(iii) SCOPE OF CODES.—The valida20 tion of work relative value units shall in21 clude a sampling of codes for services that 

22 is the same as the codes listed under sub23 paragraph (K)(ii). 

24 ‘‘(iv) METHODS.—The Secretary may 

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1 graph using methods described in sub2 clauses (I) through (V) of subparagraph 

3 (K)(iii) as the Secretary determines to be 

4 appropriate. 

5 ‘‘(v) ADJUSTMENTS.—The Secretary 

6 shall make appropriate adjustments to the 

7 work relative value units under the fee 

8 schedule under subsection (b). The provi9 sions of subparagraph (B)(ii)(II) shall 

10 apply to adjustments to relative value units 

11 made pursuant to this subparagraph in the 

12 same manner as such provisions apply to 

13 adjustments under subparagraph 

14 (B)(ii)(II).’’. 

15 (b) IMPLEMENTATION.— 

16 (1) FUNDING.—For purposes of carrying out 

17 the provisions of subparagraphs (K) and (L) of 

18 1848(c)(2) of the Social Security Act, as added by 

19 subsection (a), in addition to funds otherwise avail20 able, out of any funds in the Treasury not otherwise 

21 appropriated, there are appropriated to the Sec22 retary of Health and Human Services for the Center 

23 for Medicare & Medicaid Services Program Manage24 ment Account $20,000,000 for fiscal year 2010 and 

25 each subsequent fiscal year. Amounts appropriated 


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1 under this paragraph for a fiscal year shall be avail2 able until expended. 

3 (2) ADMINISTRATION.— 

4 (A) Chapter 35 of title 44, United States 

5 Code and the provisions of the Federal Advisory 

6 Committee Act (5 U.S.C. App.) shall not apply 

7 to this section or the amendment made by this 

8 section. 

9 (B) Notwithstanding any other provision of 

10 law, the Secretary may implement subpara11 graphs (K) and (L) of 1848(c)(2) of the Social 

12 Security Act, as added by subsection (a), by 

13 program instruction or otherwise. 

14 (C) Section 4505(d) of the Balanced 

15 Budget Act of 1997 is repealed. 

16 (D) Except for provisions related to con17 fidentiality of information, the provisions of the 

18 Federal Acquisition Regulation shall not apply 

19 to this section or the amendment made by this 

20 section. 

21 (3) FOCUSING CMS RESOURCES ON POTEN22 TIALLY OVERVALUED CODES.—Section 1868(a) of 

23 the Social Security Act (42 U.S.C. 1395ee(a)) is re24 pealed. 


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1 SEC. 1123. PAYMENTS FOR EFFICIENT AREAS. 

2 Section 1833 of the Social Security Act (42 U.S.C. 

3 1395l) is amended by adding at the end the following new 

4 subsection: 

5 ‘‘(x) INCENTIVE PAYMENTS FOR EFFICIENT

6 AREAS.— 

7 ‘‘(1) IN GENERAL.—In the case of services fur8 nished under the physician fee schedule under sec9 tion 1848 on or after January 1, 2011, and before 

10 January 1, 2013, by a supplier that is paid under 

11 such fee schedule in an efficient area (as identified 

12 under paragraph (2)), in addition to the amount of 

13 payment that would otherwise be made for such 

14 services under this part, there also shall be paid (on 

15 a monthly or quarterly basis) an amount equal to 5 

16 percent of the payment amount for the services 

17 under this part. 

18 ‘‘(2) IDENTIFICATION OF EFFICIENT AREAS.— 

19 ‘‘(A) IN GENERAL.—Based upon available 

20 data, the Secretary shall identify those counties 

21 or equivalent areas in the United States in the 

22 lowest fifth percentile of utilization based on 

23 per capita spending under this part and part A 

24 for services provided in the most recent year for 

25 which data are available as of the date of the 

26 enactment of this subsection, as standardized to 


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1 eliminate the effect of geographic adjustments 

2 in payment rates. 

3 ‘‘(B) IDENTIFICATION OF COUNTIES

4 WHERE SERVICE IS FURNISHED.—For purposes 

5 of paying the additional amount specified in 

6 paragraph (1), if the Secretary uses the 5-digit 

7 postal ZIP Code where the service is furnished, 

8 the dominant county of the postal ZIP Code (as 

9 determined by the United States Postal Service, 

10 or otherwise) shall be used to determine wheth11 er the postal ZIP Code is in a county described 

12 in subparagraph (A). 

13 ‘‘(C) LIMITATION ON REVIEW.—There 

14 shall be no administrative or judicial review 

15 under section 1869, 1878, or otherwise, respect16 ing— 

17 ‘‘(i) the identification of a county or 

18 other area under subparagraph (A); or 

19 ‘‘(ii) the assignment of a postal ZIP 

20 Code to a county or other area under sub21 paragraph (B). 

22 ‘‘(D) PUBLICATION OF LIST OF COUNTIES; 

23 POSTING ON WEBSITE.—With respect to a year 

24 for which a county or area is identified under 

25 this paragraph, the Secretary shall identify 


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1 such counties or areas as part of the proposed 

2 and final rule to implement the physician fee 

3 schedule under section 1848 for the applicable 

4 year. The Secretary shall post the list of coun5 ties identified under this paragraph on the 

6 Internet website of the Centers for Medicare & 

7 Medicaid Services.’’. 

8 SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY 

9 REPORTING INITIATIVE (PQRI). 

10 (a) FEEDBACK.—Section 1848(m)(5) of the Social 

11 Security Act (42 U.S.C. 1395w–4(m)(5)) is amended by 

12 adding at the end the following new subparagraph: 

13 ‘‘(H) FEEDBACK.—The Secretary shall 

14 provide timely feedback to eligible professionals 

15 on the performance of the eligible professional 

16 with respect to satisfactorily submitting data on 

17 quality measures under this subsection.’’. 

18 (b) APPEALS.—Such section is further amended— 

19 (1) in subparagraph (E), by striking ‘‘There 

20 shall be’’ and inserting ‘‘Subject to subparagraph 

21 (I), there shall be’’; and 

22 (2) by adding at the end the following new sub23 paragraph: 

24 ‘‘(I) INFORMAL APPEALS PROCESS.—Not25 withstanding subparagraph (E), by not later 


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1 than January 1, 2011, the Secretary shall es2 tablish and have in place an informal process 

3 for eligible professionals to appeal the deter4 mination that an eligible professional did not 

5 satisfactorily submit data on quality measures 

6 under this subsection.’’. 

7 (c) INTEGRATION OF PHYSICIAN QUALITY REPORT8 ING AND EHR REPORTING.—Section 1848(m) of such 

9 Act is amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(7) INTEGRATION OF PHYSICIAN QUALITY RE12 PORTING AND EHR REPORTING.—Not later than 

13 January 1, 2012, the Secretary shall develop a plan 

14 to integrate clinical reporting on quality measures 

15 under this subsection with reporting requirements 

16 under subsection (o) relating to the meaningful use 

17 of electronic health records. Such integration shall 

18 consist of the following: 

19 ‘‘(A) The development of measures, the re20 porting of which would both demonstrate— 

21 ‘‘(i) meaningful use of an electronic 

22 health record for purposes of subsection 

23 (o); and 

24 ‘‘(ii) clinical quality of care furnished 

25 to an individual. 


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1 ‘‘(B) The collection of health data to iden2 tify deficiencies in the quality and coordination 

3 of care for individuals eligible for benefits under 

4 this part. 

5 ‘‘(C) Such other activities as specified by 

6 the Secretary.’’. 

7 (d) EXTENSION OF INCENTIVE PAYMENTS.—Section 

8 1848(m)(1) of such Act (42 U.S.C. 1395w–4(m)(1)) is 

9 amended— 

10 (1) in subparagraph (A), by striking ‘‘2010’’ 

11 and inserting ‘‘2012’’; and 

12 (2) in subparagraph (B)(ii), by striking ‘‘2009 

13 and 2010’’ and inserting ‘‘for each of the years 2009 

14 through 2012’’. 

15 SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCAL16 ITIES. 

17 (a) IN GENERAL.—Section 1848(e) of the Social Se18 curity Act (42 U.S.C.1395w–4(e)) is amended by adding 

19 at the end the following new paragraph: 

20 ‘‘(6) TRANSITION TO USE OF MSAS AS FEE

21 SCHEDULE AREAS IN CALIFORNIA.— 

22 ‘‘(A) IN GENERAL.— 

23 ‘‘(i) REVISION.—Subject to clause (ii) 

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1 nished on or after January 1, 2011, the 

2 Secretary shall revise the fee schedule 

3 areas used for payment under this section 

4 applicable to the State of California using 

5 the Metropolitan Statistical Area (MSA) 

6 iterative Geographic Adjustment Factor 

7 methodology as follows: 

8 ‘‘(I) The Secretary shall con9 figure the physician fee schedule areas 

10 using the Core-Based Statistical 

11 Areas-Metropolitan Statistical Areas 

12 (each in this paragraph referred to as 

13 an ‘MSA’), as defined by the Director 

14 of the Office of Management and 

15 Budget, as the basis for the fee sched16 ule areas. The Secretary shall employ 

17 an iterative process to transition fee 

18 schedule areas. First, the Secretary 

19 shall list all MSAs within the State by 

20 Geographic Adjustment Factor de21 scribed in paragraph (2) (in this para22 graph referred to as a ‘GAF’) in de23 scending order. In the first iteration, 

24 the Secretary shall compare the GAF 

25 of the highest cost MSA in the State 


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1 to the weighted-average GAF of the 

2 group of remaining MSAs in the 

3 State. If the ratio of the GAF of the 

4 highest cost MSA to the weighted-av5 erage GAF of the rest of State is 1.05 

6 or greater then the highest cost MSA 

7 becomes a separate fee schedule area. 

8 ‘‘(II) In the next iteration, the 

9 Secretary shall compare the MSA of 

10 the second-highest GAF to the weight11 ed-average GAF of the group of re12 maining MSAs. If the ratio of the sec13 ond-highest MSA’s GAF to the 

14 weighted-average of the remaining 

15 lower cost MSAs is 1.05 or greater, 

16 the second-highest MSA becomes a 

17 separate fee schedule area. The 

18 iterative process continues until the 

19 ratio of the GAF of the highest-cost 

20 remaining MSA to the weighted-aver21 age of the remaining lower-cost MSAs 

22 is less than 1.05, and the remaining 

23 group of lower cost MSAs form a sin24 gle fee schedule area, If two MSAs 


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1 have identical GAFs, they shall be 

2 combined in the iterative comparison. 

3 ‘‘(ii) TRANSITION.—For services fur4 nished on or after January 1, 2011, and 

5 before January 1, 2016, in the State of 

6 California, after calculating the work, prac7 tice expense, and malpractice geographic 

8 indices described in clauses (i), (ii), and 

9 (iii) of paragraph (1)(A) that would other10 wise apply through application of this 

11 paragraph, the Secretary shall increase any 

12 such index to the county-based fee sched13 ule area value on December 31, 2009, if 

14 such index would otherwise be less than 

15 the value on January 1, 2010. 

16 ‘‘(B) SUBSEQUENT REVISIONS.— 

17 ‘‘(i) PERIODIC REVIEW AND ADJUST18 MENTS IN FEE SCHEDULE AREAS.—Subse19 quent to the process outlined in paragraph 

20 (1)(C), not less often than every three 

21 years, the Secretary shall review and up22 date the California Rest-of-State fee sched23 ule area using MSAs as defined by the Di24 rector of the Office of Management and 


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1 Budget and the iterative methodology de2 scribed in subparagraph (A)(i). 

3 ‘‘(ii) LINK WITH GEOGRAPHIC INDEX

4 DATA REVISION.—The revision described in 

5 clause (i) shall be made effective concur6 rently with the application of the periodic 

7 review of the adjustment factors required 

8 under paragraph (1)(C) for California for 

9 2012 and subsequent periods. Upon re10 quest, the Secretary shall make available 

11 to the public any county-level or MSA de12 rived data used to calculate the geographic 

13 practice cost index. 

14 ‘‘(C) REFERENCES TO FEE SCHEDULE

15 AREAS.—Effective for services furnished on or 

16 after January 1, 2010, for the State of Cali17 fornia, any reference in this section to a fee 

18 schedule area shall be deemed a reference to an 

19 MSA in the State.’’. 

20 (b) CONFORMING AMENDMENT TO DEFINITION OF

21 FEE SCHEDULE AREA.—Section 1848(j)(2) of the Social 

22 Security Act (42 U.S.C. 1395w(j)(2)) is amended by strik23 ing ‘‘The term’’ and inserting ‘‘Except as provided in sub24 section (e)(6)(C), the term’’. 


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1 PART 2—MARKET BASKET UPDATES 

2 SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVE3 MENTS INTO MARKET BASKET UPDATES 

4 THAT DO NOT ALREADY INCORPORATE SUCH 

5 IMPROVEMENTS. 

6 (a) OUTPATIENT HOSPITALS.— 

7 (1) IN GENERAL.—The first sentence of section 

8 1833(t)(3)(C)(iv) of the Social Security Act (42 

9 U.S.C. 1395l(t)(3)(C)(iv)) is amended— 

10 (A) by inserting ‘‘(which is subject to the 

11 productivity adjustment described in subclause 

12 (II) of such section)’’ after 

13 ‘‘1886(b)(3)(B)(iii)’’; and 

14 (B) by inserting ‘‘(but not below 0)’’ after 

15 ‘‘reduced’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by paragraph (1) shall apply to increase factors for 

18 services furnished in years beginning with 2010. 

19 (b) AMBULANCE SERVICES.—Section 1834(l)(3)(B) 

20 of such Act (42 U.S.C. 1395m(l)(3)(B))) is amended by 

21 inserting before the period at the end the following: ‘‘and, 

22 in the case of years beginning with 2010, subject to the 

23 productivity adjustment described in section 

24 1886(b)(3)(B)(iii)(II)’’. 


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1 (c) AMBULATORY SURGICAL CENTER SERVICES.— 

2 Section 1833(i)(2)(D) of such Act (42 U.S.C. 

3 1395l(i)(2)(D)) is amended— 

4 (1) by redesignating clause (v) as clause (vi); 

5 and 

6 (2) by inserting after clause (iv) the following 

7 new clause: 

8 ‘‘(v) In implementing the system described in clause 

9 (i), for services furnished during 2010 or any subsequent 

10 year, to the extent that an annual percentage change fac11 tor applies, such factor shall be subject to the productivity 

12 adjustment described in section 1886(b)(3)(B)(iii)(II).’’. 

13 (d) LABORATORY SERVICES.—Section 1833(h)(2)(A) 

14 of such Act (42 U.S.C. 1395l(h)(2)(A)) is amended— 

15 (1) in clause (i), by striking ‘‘for each of years 

16 2009 through 2013’’ and inserting ‘‘for 2009’’; and 

17 (2) clause (ii)— 

18 (A) by striking ‘‘and’’ at the end of sub19 clause (III); 

20 (B) by striking the period at the end of 

21 subclause (IV) and inserting ‘‘; and’’; and 

22 (C) by adding at the end the following new 

23 subclause: 

24 ‘‘(V) the annual adjustment in the fee schedules 

25 determined under clause (i) for years beginning with 


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1 2010 shall be subject to the productivity adjustment 

2 described in section 1886(b)(3)(B)(iii)(II).’’. 

3 (e) CERTAIN DURABLE MEDICAL EQUIPMENT.—Sec4 tion 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14)) 

5 is amended— 

6 (1) in subparagraph (K), by inserting before 

7 the semicolon at the end the following: ‘‘, subject to 

8 the productivity adjustment described in section 

9 1886(b)(3)(B)(iii)(II)’’; 

10 (2) in subparagraph (L)(i), by inserting after 

11 ‘‘June 2013,’’ the following: ‘‘subject to the produc12 tivity adjustment described in section 

13 1886(b)(3)(B)(iii)(II),’’; 

14 (3) in subparagraph (L)(ii), by inserting after 

15 ‘‘June 2013’’ the following: ‘‘, subject to the produc16 tivity adjustment described in section 

17 1886(b)(3)(B)(iii)(II)’’; and 

18 (4) in subparagraph (M), by inserting before 

19 the period at the end the following: ‘‘, subject to the 

20 productivity adjustment described in section 

21 1886(b)(3)(B)(iii)(II)’’. 


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1 PART 3—OTHER PROVISIONS 

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

3 WHEELCHAIRS. 

4 (a) IN GENERAL.—Section 1834(a)(7)(A)(iii) of the 

5 Social Security Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is 

6 amended— 

7 (1) in the heading, by inserting ‘‘CERTAIN COM8 PLEX REHABILITATIVE’’ after ‘‘OPTION FOR’’; and 

9 (2) by striking ‘‘power-driven wheelchair’’ and 

10 inserting ‘‘complex rehabilitative power-driven wheel11 chair recognized by the Secretary as classified within 

12 group 3 or higher’’. 

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

14 subsection (a) shall take effect on January 1, 2011, and 

15 shall apply to power-driven wheelchairs furnished on or 

16 after such date. Such amendments shall not apply to con17 tracts entered into under section 1847 of the Social Secu18 rity Act (42 U.S.C. 1395w–3) pursuant to a bid submitted 

19 under such section before October 1, 2010, under sub20 section (a)(1)(B)(i)(I) of such section. 

21 SEC. 1142. EXTENSION OF PAYMENT RULE FOR 

22 BRACHYTHERAPY. 

23 Section 1833(t)(16)(C) of the Social Security Act (42 

24 U.S.C. 1395l(t)(16)(C)), as amended by section 142 of the 

25 Medicare Improvements for Patients and Providers Act of 

26 2008 (Public Law 110–275), is amended by striking, the 


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1 first place it appears, ‘‘January 1, 2010’’ and inserting 

2 ‘‘January 1, 2012’’. 

3 SEC. 1143. HOME INFUSION THERAPY REPORT TO CON4 GRESS. 

5 Not later than 12 months after the date of enactment 

6 of this Act, the Medicare Payment Advisory Commission 

7 shall submit to Congress a report on the following: 

8 (1) The scope of coverage for home infusion 

9 therapy in the fee-for-service Medicare program 

10 under title XVIII of the Social Security Act, Medi11 care Advantage under part C of such title, the vet12 eran’s health care program under chapter 17 of title 

13 38, United States Code, and among private payers, 

14 including an analysis of the scope of services pro15 vided by home infusion therapy providers to their 

16 patients in such programs. 

17 (2) The benefits and costs of providing such 

18 coverage under the Medicare program, including a 

19 calculation of the potential savings achieved through 

20 avoided or shortened hospital and nursing home 

21 stays as a result of Medicare coverage of home infu22 sion therapy. 

23 (3) An assessment of sources of data on the 

24 costs of home infusion therapy that might be used 


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1 to construct payment mechanisms in the Medicare 

2 program. 

3 (4) Recommendations, if any, on the structure 

4 of a payment system under the Medicare program 

5 for home infusion therapy, including an analysis of 

6 the payment methodologies used under Medicare Ad7 vantage plans and private health plans for the provi8 sion of home infusion therapy and their applicability 

9 to the Medicare program. 

10 SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS 

11 (ASCS) TO SUBMIT COST DATA AND OTHER 

12 DATA. 

13 (a) COST REPORTING.— 

14 (1) IN GENERAL.—Section 1833(i) of the Social 

15 Security Act (42 U.S.C. 1395l(i)) is amended by 

16 adding at the end the following new paragraph: 

17 ‘‘(8) The Secretary shall require, as a condition of 

18 the agreement described in section 1832(a)(2)(F)(i), the 

19 submission of such cost report as the Secretary may speci20 fy, taking into account the requirements for such reports 

21 under section 1815 in the case of a hospital.’’. 

22 (2) DEVELOPMENT OF COST REPORT.—Not 

23 later than 3 years after the date of the enactment 

24 of this Act, the Secretary of Health and Human 

25 Services shall develop a cost report form for use 


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1 under section 1833(i)(8) of the Social Security Act, 

2 as added by paragraph (1). 

3 (3) AUDIT REQUIREMENT.—The Secretary shall 

4 provide for periodic auditing of cost reports sub5 mitted under section 1833(i)(8) of the Social Secu6 rity Act, as added by paragraph (1). 

7 (4) EFFECTIVE DATE.—The amendment made 

8 by paragraph (1) shall apply to agreements applica9 ble to cost reporting periods beginning 18 months 

10 after the date the Secretary develops the cost report 

11 form under paragraph (2). 

12 (b) ADDITIONAL DATA ON QUALITY.— 

13 (1) IN GENERAL.—Section 1833(i)(7) of such 

14 Act (42 U.S.C. 1395l(i)(7)) is amended— 

15 (A) in subparagraph (B), by inserting 

16 ‘‘subject to subparagraph (C),’’ after ‘‘may oth17 erwise provide,’’; and 

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

19 subparagraph: 

20 ‘‘(C) Under subparagraph (B) the Secretary shall re21 quire the reporting of such additional data relating to 

22 quality of services furnished in an ambulatory surgical fa23 cility, including data on health care associated infections, 

24 as the Secretary may specify.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall to reporting for years begin3 ning with 2012. 

4 SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS. 

5 Section 1833(t) of the Social Security Act (42 U.S.C. 

6 1395l(t)) is amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(18) AUTHORIZATION OF ADJUSTMENT FOR

9 CANCER HOSPITALS.— 

10 ‘‘(A) STUDY.—The Secretary shall conduct 

11 a study to determine if, under the system under 

12 this subsection, costs incurred by hospitals de13 scribed in section 1886(d)(1)(B)(v) with respect 

14 to ambulatory payment classification groups ex15 ceed those costs incurred by other hospitals fur16 nishing services under this subsection (as deter17 mined appropriate by the Secretary). 

18 ‘‘(B) AUTHORIZATION OF ADJUSTMENT.— 

19 Insofar as the Secretary determines under sub20 paragraph (A) that costs incurred by hospitals 

21 described in section 1886(d)(1)(B)(v) exceed 

22 those costs incurred by other hospitals fur23 nishing services under this subsection, the Sec24 retary shall provide for an appropriate adjust25 ment under paragraph (2)(E) to reflect those 


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1 higher costs effective for services furnished on 

2 or after January 1, 2011.’’. 

3 SEC. 1146. MEDICARE IMPROVEMENT FUND. 

4 Section 1898(b)(1)(A) of the Social Security Act (42 

5 U.S.C. 1395iii(b)(1)(A)) is amended to read as follows: 

6 ‘‘(A) the period beginning with fiscal year 

7 2011 and ending with fiscal year 2019, 

8 $8,000,000,000; and’’. 

9 SEC. 1147. PAYMENT FOR IMAGING SERVICES. 

10 (a) ADJUSTMENT IN PRACTICE EXPENSE TO RE11 FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 

12 of the Social Security Act (42 U.S.C. 1395w) is amend13 ed— 

14 (1) in subsection (b)(4)— 

15 (A) in subparagraph (B), by striking ‘‘sub16 paragraph (A)’’ and inserting ‘‘this paragraph’’; 

17 and 

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

19 subparagraph: 

20 ‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE

21 TO REFLECT HIGHER PRESUMED UTILIZA22 TION.—In computing the number of practice 

23 expense relative value units under subsection 

24 (c)(2)(C)(ii) with respect to advanced diagnostic 

25 imaging services (as defined in section 


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1 1834(e)(1)(B)), the Secretary shall adjust such 

2 number of units so it reflects a 75 percent 

3 (rather than 50 percent) presumed rate of utili4 zation of imaging equipment.’’; and 

5 (2) in subsection (c)(2)(B)(v)(II), by inserting 

6 ‘‘AND OTHER PROVISIONS’’ after ‘‘OPD PAYMENT

7 CAP’’. 

8 (b) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS9 COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE

10 BODY PARTS.—Section 1848(b)(4) of such Act is further 

11 amended by adding at the end the following new subpara12 graph: 

13 ‘‘(D) ADJUSTMENT IN TECHNICAL COMPO14 NENT DISCOUNT ON SINGLE-SESSION IMAGING

15 INVOLVING CONSECUTIVE BODY PARTS.—The 

16 Secretary shall increase the reduction in ex17 penditures attributable to the multiple proce18 dure payment reduction applicable to the tech19 nical component for imaging under the final 

20 rule published by the Secretary in the Federal 

21 Register on November 21, 2005 (part 405 of 

22 title 42, Code of Federal Regulations) from 25 

23 percent to 50 percent.’’. 

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1 tion, shall apply to services furnished on or after January 

2 1, 2011. 

3 SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IM4 PROVEMENTS. 

5 (a) WAIVER OF SURETY BOND REQUIREMENT.—Sec6 tion 1834(a)(16) of the Social Security Act (42 U.S.C. 

7 1395m(a)(16)) is amended by adding at the end the fol8 lowing: ‘‘The requirement for a surety bond described in 

9 subparagraph (B) shall not apply in the case of a phar10 macy (i) that has been enrolled under section 1866(j) as 

11 a supplier of durable medical equipment, prosthetics, 

12 orthotics, and supplies and has been issued (which may 

13 include renewal of) a provider number (as described in the 

14 first sentence of this paragraph) for at least 5 years, and 

15 (ii) for which a final adverse action (as defined in section 

16 424.57(a) of title 42, Code of Federal Regulations) has 

17 never been imposed.’’. 

18 (b) ENSURING SUPPLY OF OXYGEN EQUIPMENT.— 

19 (1) IN GENERAL.—Section 1834(a)(5)(F) of the 

20 Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is 

21 amended— 

22 (A) in clause (ii), by striking ‘‘After the’’ 

23 and inserting ‘‘Except as provided in clause 

24 (iii), after the’’; and 


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

2 clause: 

3 ‘‘(iii) CONTINUATION OF SUPPLY.—In 

4 the case of a supplier furnishing such 

5 equipment to an individual under this sub6 section as of the 27th month of the 36 

7 months described in clause (i), the supplier 

8 furnishing such equipment as of such 

9 month shall continue to furnish such 

10 equipment to such individual (either di11 rectly or though arrangements with other 

12 suppliers of such equipment) during any 

13 subsequent period of medical need for the 

14 remainder of the reasonable useful lifetime 

15 of the equipment, as determined by the 

16 Secretary, regardless of the location of the 

17 individual, unless another supplier has ac18 cepted responsibility for continuing to fur19 nish such equipment during the remainder 

20 of such period.’’. 

21 (2) EFFECTIVE DATE.—The amendments made 

22 by paragraph (1) shall take effect as of the date of 

23 the enactment of this Act and shall apply to the fur24 nishing of equipment to individuals for whom the 

25 27th month of a continuous period of use of oxygen 


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1 equipment described in section 1834(a)(5)(F) of the 

2 Social Security Act occurs on or after July 1, 2010. 

3 (c) TREATMENT OF CURRENT ACCREDITATION AP4 PLICATIONS.—Section 1834(a)(20)(F) of such Act (42 

5 U.S.C. 1395m(a)(20)(F)) is amended— 

6 (1) in clause (i)— 

7 (A) by striking ‘‘clause (ii)’’ and inserting 

8 ‘‘clauses (ii) and (iii)’’; and 

9 (B) by striking ‘‘and’’ at the end; 

10 (2) by striking the period at the end of clause 

11 (ii)(II) and by inserting ‘‘; and’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(iii) the requirement for accredita14 tion described in clause (i) shall not apply 

15 for purposes of supplying diabetic testing 

16 supplies, canes, and crutches in the case of 

17 a pharmacy that is enrolled under section 

18 1866(j) as a supplier of durable medical 

19 equipment, prosthetics, orthotics, and sup20 plies. 

21 Any supplier that has submitted an application 

22 for accreditation before August 1, 2009, shall 

23 be deemed as meeting applicable standards and 

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1 creditation organization takes action on the 

2 supplier’s application.’’. 

3 (d) RESTORING 36-MONTH OXYGEN RENTAL PE4 RIOD IN CASE OF SUPPLIER BANKRUPTCY FOR CERTAIN

5 INDIVIDUALS.—Section 1834(a)(5)(F) of such Act (42 

6 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end 

7 the following new clause: 

8 ‘‘(iii) EXCEPTION FOR BANK9 RUPTCY.—If a supplier of oxygen to an in10 dividual is declared bankrupt and its assets 

11 are liquidated and at the time of such dec12 laration and liquidation more than 24 

13 months of rental payments have been 

14 made, the individual may begin under this 

15 subparagraph a new 36-month rental pe16 riod with another supplier of oxygen.’’. 

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

18 MEASUREMENT. 

19 (a) IN GENERAL.—The Medicare Payment Advisory 

20 Commission shall conduct a study regarding bone mass 

21 measurement, including computed tomography, duel-en22 ergy x-ray absorptriometry, and vertebral fracture assess23 ment. The study shall focus on the following: 

24 (1) An assessment of the adequacy of Medicare 

25 payment rates for such services, taking into account 


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1 costs of acquiring the necessary equipment, profes2 sional work time, and practice expense costs. 

3 (2) The impact of Medicare payment changes 

4 since 2006 on beneficiary access to bone mass meas5 urement benefits in general and in rural and minor6 ity communities specifically. 

7 (3) A review of the clinically appropriate and 

8 recommended use among Medicare beneficiaries and 

9 how usage rates among such beneficiaries compares 

10 to such recommendations. 

11 (4) In conjunction with the findings under (3), 

12 recommendations, if necessary, regarding methods 

13 for reaching appropriate use of bone mass measure14 ment studies among Medicare beneficiaries. 

15 (b) REPORT.—The Commission shall submit a report 

16 to the Congress, not later than 9 months after the date 

17 of the enactment of this Act, containing a description of 

18 the results of the study conducted under subsection (a) 

19 and the conclusions and recommendations, if any, regard20 ing each of the issues described in paragraphs (1), (2), 

21 (3), and (4) of such subsection. 


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1 Subtitle C—Provisions Related to 

2 Medicare Parts A and B 

3 SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOS4 PITAL READMISSIONS. 

5 (a) HOSPITALS.— 

6 (1) IN GENERAL.—Section 1886 of the Social 

7 Security Act (42 U.S.C. 1395ww), as amended by 

8 section 1103(a), is amended by adding at the end 

9 the following new subsection: 

10 ‘‘(p) ADJUSTMENT TO HOSPITAL PAYMENTS FOR

11 EXCESS READMISSIONS.— 

12 ‘‘(1) IN GENERAL.—With respect to payment 

13 for discharges from an applicable hospital (as de14 fined in paragraph (5)(C)) occurring during a fiscal 

15 year beginning on or after October 1, 2011, in order 

16 to account for excess readmissions in the hospital, 

17 the Secretary shall reduce the payments that would 

18 otherwise be made to such hospital under subsection 

19 (d) (or section 1814(b)(3), as the case may be) for 

20 such a discharge by an amount equal to the product 

21 of— 

22 ‘‘(A) the base operating DRG payment 

23 amount (as defined in paragraph (2)) for the 

24 discharge; and 


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1 ‘‘(B) the adjustment factor (described in 

2 paragraph (3)(A)) for the hospital for the fiscal 

3 year. 

4 ‘‘(2) BASE OPERATING DRG PAYMENT

5 AMOUNT.— 

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 subparagraph (B), for purposes of this sub8 section, the term ‘base operating DRG payment 

9 amount’ means, with respect to a hospital for a 

10 fiscal year, the payment amount that would 

11 otherwise be made under subsection (d) for a 

12 discharge if this subsection did not apply, re13 duced by any portion of such amount that is at14 tributable to payments under subparagraphs 

15 (B) and (F) of paragraph (5). 

16 ‘‘(B) ADJUSTMENTS.—For purposes of 

17 subparagraph (A), in the case of a hospital that 

18 is paid under section 1814(b)(3), the term ‘base 

19 operating DRG payment amount’ means the 

20 payment amount under such section. 

21 ‘‘(3) ADJUSTMENT FACTOR.— 

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1), the adjustment factor under this 

24 paragraph for an applicable hospital for a fiscal 

25 year is equal to the greater of— 


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1 ‘‘(i) the ratio described in subpara2 graph (B) for the hospital for the applica3 ble period (as defined in paragraph (5)(D)) 

4 for such fiscal year; or 

5 ‘‘(ii) the floor adjustment factor speci6 fied in subparagraph (C). 

7 ‘‘(B) RATIO.—The ratio described in this 

8 subparagraph for a hospital for an applicable 

9 period is equal to 1 minus the ratio of— 

10 ‘‘(i) the aggregate payments for ex11 cess readmissions (as defined in paragraph 

12 (4)(A)) with respect to an applicable hos13 pital for the applicable period; and 

14 ‘‘(ii) the aggregate payments for all 

15 discharges (as defined in paragraph 

16 (4)(B)) with respect to such applicable 

17 hospital for such applicable period. 

18 ‘‘(C) FLOOR ADJUSTMENT FACTOR.—For 

19 purposes of subparagraph (A), the floor adjust20 ment factor specified in this subparagraph 

21 for— 

22 ‘‘(i) fiscal year 2012 is 0.99; 

23 ‘‘(ii) fiscal year 2013 is 0.98; 

24 ‘‘(iii) fiscal year 2014 is 0.97; or 

25 ‘‘(iv) a subsequent fiscal year is 0.95. 


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1 ‘‘(4) AGGREGATE PAYMENTS, EXCESS READMIS2 SION RATIO DEFINED.—For purposes of this sub3 section: 

4 ‘‘(A) AGGREGATE PAYMENTS FOR EXCESS

5 READMISSIONS.—The term ‘aggregate payments 

6 for excess readmissions’ means, for a hospital 

7 for a fiscal year, the sum, for applicable condi8 tions (as defined in paragraph (5)(A)), of the 

9 product, for each applicable condition, of— 

10 ‘‘(i) the base operating DRG payment 

11 amount for such hospital for such fiscal 

12 year for such condition; 

13 ‘‘(ii) the number of admissions for 

14 such condition for such hospital for such 

15 fiscal year; and 

16 ‘‘(iii) the excess readmissions ratio (as 

17 defined in subparagraph (C)) for such hos18 pital for the applicable period for such fis19 cal year minus 1. 

20 ‘‘(B) AGGREGATE PAYMENTS FOR ALL DIS21 CHARGES.—The term ‘aggregate payments for 

22 all discharges’ means, for a hospital for a fiscal 

23 year, the sum of the base operating DRG pay24 ment amounts for all discharges for all condi25 tions from such hospital for such fiscal year. 


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1 ‘‘(C) EXCESS READMISSION RATIO.— 

2 ‘‘(i) IN GENERAL.—Subject to clauses 

3 (ii) and (iii), the term ‘excess readmissions 

4 ratio’ means, with respect to an applicable 

5 condition for a hospital for an applicable 

6 period, the ratio (but not less than 1.0) 

7 of— 

8 ‘‘(I) the risk adjusted readmis9 sions based on actual readmissions, as 

10 determined consistent with a readmis11 sion measure methodology that has 

12 been endorsed under paragraph 

13 (5)(A)(ii)(I), for an applicable hospital 

14 for such condition with respect to the 

15 applicable period; to 

16 ‘‘(II) the risk adjusted expected 

17 readmissions (as determined con18 sistent with such a methodology) for 

19 such hospital for such condition with 

20 respect to such applicable period. 

21 ‘‘(ii) EXCLUSION OF CERTAIN RE22 ADMISSIONS.—For purposes of clause (i), 

23 with respect to a hospital, excess readmis24 sions shall not include readmissions for an 

25 applicable condition for which there are 


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1 fewer than a minimum number (as deter2 mined by the Secretary) of discharges for 

3 such applicable condition for the applicable 

4 period and such hospital. 

5 ‘‘(iii) ADJUSTMENT.—In order to pro6 mote a reduction over time in the overall 

7 rate of readmissions for applicable condi8 tions, the Secretary may provide, beginning 

9 with discharges for fiscal year 2014, for 

10 the determination of the excess readmis11 sions ratio under subparagraph (C) to be 

12 based on a ranking of hospitals by read13 mission ratios (from lower to higher read14 mission ratios) normalized to a benchmark 

15 that is lower than the 50th percentile. 

16 ‘‘(5) DEFINITIONS.—For purposes of this sub17 section: 

18 ‘‘(A) APPLICABLE CONDITION.—The term 

19 ‘applicable condition’ means, subject to sub20 paragraph (B), a condition or procedure se21 lected by the Secretary among conditions and 

22 procedures for which— 

23 ‘‘(i) readmissions (as defined in sub24 paragraph (E)) that represent conditions 

25 or procedures that are high volume or high 


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1 expenditures under this title (or other cri2 teria specified by the Secretary); and 

3 ‘‘(ii) measures of such readmissions— 

4 ‘‘(I) have been endorsed by the 

5 entity with a contract under section 

6 1890(a); and 

7 ‘‘(II) such endorsed measures 

8 have appropriate exclusions for re9 admissions that are unrelated to the 

10 prior discharge (such as a planned re11 admission or transfer to another ap12 plicable hospital). 

13 ‘‘(B) EXPANSION OF APPLICABLE CONDI14 TIONS.—Beginning with fiscal year 2013, the 

15 Secretary shall expand the applicable conditions 

16 beyond the 3 conditions for which measures 

17 have been endorsed as described in subpara18 graph (A)(ii)(I) as of the date of the enactment 

19 of this subsection to the additional 4 conditions 

20 that have been so identified by the Medicare 

21 Payment Advisory Commission in its report to 

22 Congress in June 2007 and to other conditions 

23 and procedures which may include an all-condi24 tion measure of readmissions, as determined 

25 appropriate by the Secretary. In expanding 


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1 such applicable conditions, the Secretary shall 

2 seek the endorsement described in subpara3 graph (A)(ii)(I) but may apply such measures 

4 without such an endorsement. 

5 ‘‘(C) APPLICABLE HOSPITAL.—The term 

6 ‘applicable hospital’ means a subsection (d) hos7 pital or a hospital that is paid under section 

8 1814(b)(3). 

9 ‘‘(D) APPLICABLE PERIOD.—The term ‘ap10 plicable period’ means, with respect to a fiscal 

11 year, such period as the Secretary shall specify 

12 for purposes of determining excess readmis13 sions. 

14 ‘‘(E) READMISSION.—The term ‘readmis15 sion’ means, in the case of an individual who is 

16 discharged from an applicable hospital, the ad17 mission of the individual to the same or another 

18 applicable hospital within a time period speci19 fied by the Secretary from the date of such dis20 charge. Insofar as the discharge relates to an 

21 applicable condition for which there is an en22 dorsed measure described in subparagraph 

23 (A)(ii)(I), such time period (such as 30 days) 

24 shall be consistent with the time period speci25 fied for such measure. 


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1 ‘‘(6) LIMITATIONS ON REVIEW.—There shall be 

2 no administrative or judicial review under section 

3 1869, section 1878, or otherwise of— 

4 ‘‘(A) the determination of base operating 

5 DRG payment amounts; 

6 ‘‘(B) the methodology for determining the 

7 adjustment factor under paragraph (3), includ8 ing excess readmissions ratio under paragraph 

9 (4)(C), aggregate payments for excess readmis10 sions under paragraph (4)(A), and aggregate 

11 payments for all discharges under paragraph 

12 (4)(B), and applicable periods and applicable 

13 conditions under paragraph (5); 

14 ‘‘(C) the measures of readmissions as de15 scribed in paragraph (5)(A)(ii); and 

16 ‘‘(D) the determination of a targeted hos17 pital under paragraph (8)(B)(i), the increase in 

18 payment under paragraph (8)(B)(ii), the aggre19 gate cap under paragraph (8)(C)(i), the hos20 pital-specific limit under paragraph (8)(C)(ii), 

21 and the form of payment made by the Secretary 

22 under paragraph (8)(D). 

23 ‘‘(7) MONITORING INAPPROPRIATE CHANGES IN

24 ADMISSIONS PRACTICES.—The Secretary shall mon25 itor the activities of applicable hospitals to determine 


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1 if such hospitals have taken steps to avoid patients 

2 at risk in order to reduce the likelihood of increasing 

3 readmissions for applicable conditions. If the Sec4 retary determines that such a hospital has taken 

5 such a step, after notice to the hospital and oppor6 tunity for the hospital to undertake action to allevi7 ate such steps, the Secretary may impose an appro8 priate sanction. 

9 ‘‘(8) ASSISTANCE TO CERTAIN HOSPITALS.— 

10 ‘‘(A) IN GENERAL.—For purposes of pro11 viding funds to applicable hospitals to take 

12 steps described in subparagraph (E) to address 

13 factors that may impact readmissions of indi14 viduals who are discharged from such a hos15 pital, for fiscal years beginning on or after Oc16 tober 1, 2011, the Secretary shall make a pay17 ment adjustment for a hospital described in 

18 subparagraph (B), with respect to each such 

19 fiscal year, by a percent estimated by the Sec20 retary to be consistent with subparagraph (C). 

21 ‘‘(B) TARGETED HOSPITALS.—Subpara22 graph (A) shall apply to an applicable hospital 

23 that— 

24 ‘‘(i) received (or, in the case of an 

25 1814(b)(3) hospital, otherwise would have 


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1 been eligible to receive) $10,000,000 or 

2 more in disproportionate share payments 

3 using the latest available data as estimated 

4 by the Secretary; and 

5 ‘‘(ii) provides assurances satisfactory 

6 to the Secretary that the increase in pay7 ment under this paragraph shall be used 

8 for purposes described in subparagraph 

9 (E). 

10 ‘‘(C) CAPS.— 

11 ‘‘(i) AGGREGATE CAP.—The aggregate 

12 amount of the payment adjustment under 

13 this paragraph for a fiscal year shall not 

14 exceed 5 percent of the estimated dif15 ference in the spending that would occur 

16 for such fiscal year with and without appli17 cation of the adjustment factor described 

18 in paragraph (3) and applied pursuant to 

19 paragraph (1). 

20 ‘‘(ii) HOSPITAL-SPECIFIC LIMIT.—The 

21 aggregate amount of the payment adjust22 ment for a hospital under this paragraph 

23 shall not exceed the estimated difference in 

24 spending that would occur for such fiscal 

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1 plication of the adjustment factor de2 scribed in paragraph (3) and applied pur3 suant to paragraph (1). 

4 ‘‘(D) FORM OF PAYMENT.—The Secretary 

5 may make the additional payments under this 

6 paragraph on a lump sum basis, a periodic 

7 basis, a claim by claim basis, or otherwise. 

8 ‘‘(E) USE OF ADDITIONAL PAYMENT.— 

9 Funding under this paragraph shall be used by 

10 targeted hospitals for transitional care activities 

11 designed to address the patient noncompliance 

12 issues that result in higher than normal read13 mission rates, such as one or more of the fol14 lowing: 

15 ‘‘(i) Providing care coordination serv16 ices to assist in transitions from the tar17 geted hospital to other settings. 

18 ‘‘(ii) Hiring translators and inter19 preters. 

20 ‘‘(iii) Increasing services offered by 

21 discharge planners. 

22 ‘‘(iv) Ensuring that individuals receive 

23 a summary of care and medication orders 

24 upon discharge. 


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1 ‘‘(v) Developing a quality improve2 ment plan to assess and remedy prevent3 able readmission rates. 

4 ‘‘(vi) Assigning discharged individuals 

5 to a medical home. 

6 ‘‘(vii) Doing other activities as deter7 mined appropriate by the Secretary. 

8 ‘‘(F) GAO REPORT ON USE OF FUNDS.— 

9 Not later than 3 years after the date on which 

10 funds are first made available under this para11 graph, the Comptroller General of the United 

12 States shall submit to Congress a report on the 

13 use of such funds. 

14 ‘‘(G) DISPROPORTIONATE SHARE HOS15 PITAL PAYMENT.—In this paragraph, the term 

16 ‘disproportionate share hospital payment’ 

17 means an additional payment amount under 

18 subsection (d)(5)(F).’’. 

19 (b) APPLICATION TO CRITICAL ACCESS HOS20 PITALS.—Section 1814(l) of the Social Security Act (42 

21 U.S.C. 1395f(l)) is amended— 

22 (1) in paragraph (5)— 

23 (A) by striking ‘‘and’’ at the end of sub24 paragraph (C); 


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1 (B) by striking the period at the end of 

2 subparagraph (D) and inserting ‘‘; and’’; 

3 (C) by inserting at the end the following 

4 new subparagraph: 

5 ‘‘(E) The methodology for determining the ad6 justment factor under paragraph (5), including the 

7 determination of aggregate payments for actual and 

8 expected readmissions, applicable periods, applicable 

9 conditions and measures of readmissions.’’; and 

10 (D) by redesignating such paragraph as 

11 paragraph (6); and 

12 (2) by inserting after paragraph (4) the fol13 lowing new paragraph: 

14 ‘‘(5) The adjustment factor described in section 

15 1886(p)(3) shall apply to payments with respect to a crit16 ical access hospital with respect to a cost reporting period 

17 beginning in fiscal year 2012 and each subsequent fiscal 

18 year (after application of paragraph (4) of this subsection) 

19 in a manner similar to the manner in which such section 

20 applies with respect to a fiscal year to an applicable hos21 pital as described in section 1886(p)(2).’’. 

22 (c) POST ACUTE CARE PROVIDERS.— 

23 (1) INTERIM POLICY.— 

24 (A) IN GENERAL.—With respect to a read25 mission to an applicable hospital or a critical 


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1 access hospital (as described in section 1814(l) 

2 of the Social Security Act) from a post acute 

3 care provider (as defined in paragraph (3)) and 

4 such a readmission is not governed by section 

5 412.531 of title 42, Code of Federal Regula6 tions, if the claim submitted by such a post7 acute care provider under title XVIII of the So8 cial Security Act indicates that the individual 

9 was readmitted to a hospital from such a post10 acute care provider or admitted from home and 

11 under the care of a home health agency within 

12 30 days of an initial discharge from an applica13 ble hospital or critical access hospital, the pay14 ment under such title on such claim shall be the 

15 applicable percent specified in subparagraph 

16 (B) of the payment that would otherwise be 

17 made under the respective payment system 

18 under such title for such post-acute care pro19 vider if this subsection did not apply. 

20 (B) APPLICABLE PERCENT DEFINED.—For 

21 purposes of subparagraph (A), the applicable 

22 percent is— 

23 (i) for fiscal or rate year 2012 is 

24 0.996; 


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1 (ii) for fiscal or rate year 2013 is 

2 0.993; and 

3 (iii) for fiscal or rate year 2014 is 

4 0.99. 

5 (C) EFFECTIVE DATE.—Subparagraph (1) 

6 shall apply to discharges or services furnished 

7 (as the case may be with respect to the applica8 ble post acute care provider) on or after the 

9 first day of the fiscal year or rate year, begin10 ning on or after October 1, 2011, with respect 

11 to the applicable post acute care provider. 

12 (2) DEVELOPMENT AND APPLICATION OF PER13 FORMANCE MEASURES.— 

14 (A) IN GENERAL.—The Secretary of 

15 Health and Human Services shall develop ap16 propriate measures of readmission rates for 

17 post acute care providers. The Secretary shall 

18 seek endorsement of such measures by the enti19 ty with a contract under section 1890(a) of the 

20 Social Security Act but may adopt and apply 

21 such measures under this paragraph without 

22 such an endorsement. The Secretary shall ex23 pand such measures in a manner similar to the 

24 manner in which applicable conditions are ex25 panded under paragraph (5)(B) of section 


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1 1886(p) of the Social Security Act, as added by 

2 subsection (a). 

3 (B) IMPLEMENTATION.—The Secretary 

4 shall apply, on or after October 1, 2014, with 

5 respect to post acute care providers, policies 

6 similar to the policies applied with respect to 

7 applicable hospitals and critical access hospitals 

8 under the amendments made by subsection (a). 

9 The provisions of paragraph (1) shall apply 

10 with respect to any period on or after October 

11 1, 2014, and before such application date de12 scribed in the previous sentence in the same 

13 manner as such provisions apply with respect to 

14 fiscal or rate year 2014. 

15 (C) MONITORING AND PENALTIES.—The 

16 provisions of paragraph (7) of such section 

17 1886(p) shall apply to providers under this 

18 paragraph in the same manner as they apply to 

19 hospitals under such section. 

20 (3) DEFINITIONS.—For purposes of this sub21 section: 

22 (A) POST ACUTE CARE PROVIDER.—The 

23 term ‘‘post acute care provider’’ means— 


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1 (i) a skilled nursing facility (as de2 fined in section 1819(a) of the Social Secu3 rity Act); 

4 (ii) an inpatient rehabilitation facility 

5 (described in section 1886(h)(1)(A) of such 

6 Act); 

7 (iii) a home health agency (as defined 

8 in section 1861(o) of such Act); and 

9 (iv) a long term care hospital (as de10 fined in section 1861(ccc) of such Act). 

11 (B) OTHER TERMS.—The terms ‘‘applica12 ble condition’’, ‘‘applicable hospital’’, and ‘‘re13 admission’’ have the meanings given such terms 

14 in section 1886(p)(5) of the Social Security 

15 Act, as added by subsection (a)(1). 

16 (d) PHYSICIANS.— 

17 (1) STUDY.—The Secretary of Health and 

18 Human Services shall conduct a study to determine 

19 how the readmissions policy described in the pre20 vious subsections could be applied to physicians. 

21 (2) CONSIDERATIONS.—In conducting the 

22 study, the Secretary shall consider approaches such 

23 as— 

24 (A) creating a new code (or codes) and 

25 payment amount (or amounts) under the fee 


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1 schedule in section 1848 of the Social Security 

2 Act (in a budget neutral manner) for services 

3 furnished by an appropriate physician who sees 

4 an individual within the first week after dis5 charge from a hospital or critical access hos6 pital; 

7 (B) developing measures of rates of read8 mission for individuals treated by physicians; 

9 (C) applying a payment reduction for phy10 sicians who treat the patient during the initial 

11 admission that results in a readmission; and 

12 (D) methods for attributing payments or 

13 payment reductions to the appropriate physi14 cian or physicians. 

15 (3) REPORT.—The Secretary shall issue a pub16 lic report on such study not later than the date that 

17 is one year after the date of the enactment of this 

18 Act. 

19 (e) FUNDING.—For purposes of carrying out the pro20 visions of this section, in addition to funds otherwise avail21 able, out of any funds in the Treasury not otherwise ap22 propriated, there are appropriated to the Secretary of 

23 Health and Human Services for the Center for Medicare 

24 & Medicaid Services Program Management Account 

25 $25,000,000 for each fiscal year beginning with 2010. 


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1 Amounts appropriated under this subsection for a fiscal 

2 year shall be available until expended. 

3 SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM 

4 PLAN AND BUNDLING PILOT PROGRAM. 

5 (a) PLAN.— 

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

7 Human Services (in this section referred to as the 

8 ‘‘Secretary’’) shall develop a detailed plan to reform 

9 payment for post acute care (PAC) services under 

10 the Medicare program under title XVIII of the So11 cial Security Act (in this section referred to as the 

12 ‘‘Medicare program)’’. The goals of such payment 

13 reform are to— 

14 (A) improve the coordination, quality, and 

15 efficiency of such services; and 

16 (B) improve outcomes for individuals such 

17 as reducing the need for readmission to hos18 pitals from providers of such services. 

19 (2) BUNDLING POST ACUTE SERVICES.—The 

20 plan described in paragraph (1) shall include de21 tailed specifications for a bundled payment for post 

22 acute services (in this section referred to as the 

23 ‘‘post acute care bundle’’), and may include other 

24 approaches determined appropriate by the Secretary. 


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1 (3) POST ACUTE SERVICES.—For purposes of 

2 this section, the term ‘‘post acute services’’ means 

3 services for which payment may be made under the 

4 Medicare program that are furnished by skilled 

5 nursing facilities, inpatient rehabilitation facilities, 

6 long term care hospitals, hospital based outpatient 

7 rehabilitation facilities and home health agencies to 

8 an individual after discharge of such individual from 

9 a hospital, and such other services determined ap10 propriate by the Secretary. 

11 (b) DETAILS.—The plan described in subsection 

12 (a)(1) shall include consideration of the following issues: 

13 (1) The nature of payments under a post acute 

14 care bundle, including the type of provider or entity 

15 to whom payment should be made, the scope of ac16 tivities and services included in the bundle, whether 

17 payment for physicians’ services should be included 

18 in the bundle, and the period covered by the bundle. 

19 (2) Whether the payment should be consoli20 dated with the payment under the inpatient prospec21 tive system under section 1886 of the Social Secu22 rity Act (in this section referred to as MS–DRGs) 

23 or a separate payment should be established for such 

24 bundle, and if a separate payment is established, 


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1 whether it should be made only upon use of post 

2 acute care services or for every discharge. 

3 (3) Whether the bundle should be applied 

4 across all categories of providers of inpatient serv5 ices (including critical access hospitals) and post 

6 acute care services or whether it should be limited 

7 to certain categories of providers, services, or dis8 charges, such as high volume or high cost MS– 

9 DRGs. 

10 (4) The extent to which payment rates could be 

11 established to achieve offsets for efficiencies that 

12 could be expected to be achieved with a bundle pay13 ment, whether such rates should be established on a 

14 national basis or for different geographic areas, 

15 should vary according to discharge, case mix, 

16 outliers, and geographic differences in wages or 

17 other appropriate adjustments, and how to update 

18 such rates. 

19 (5) The nature of protections needed for indi20 viduals under a system of bundled payments to en21 sure that individuals receive quality care, are fur22 nished the level and amount of services needed as 

23 determined by an appropriate assessment instru24 ment, are offered choice of provider, and the extent 

25 to which transitional care services would improve 


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1 quality of care for individuals and the functioning of 

2 a bundled post-acute system. 

3 (6) The nature of relationships that may be re4 quired between hospitals and providers of post acute 

5 care services to facilitate bundled payments, includ6 ing the application of gainsharing, anti-referral, 

7 anti-kickback, and anti-trust laws. 

8 (7) Quality measures that would be appropriate 

9 for reporting by hospitals and post acute providers 

10 (such as measures that assess changes in functional 

11 status and quality measures appropriate for each 

12 type of post acute services provider including how 

13 the reporting of such quality measures could be co14 ordinated with other reporting of such quality meas15 ures by such providers otherwise required). 

16 (8) How cost-sharing for a post acute care bun17 dle should be treated relative to current rules for 

18 cost-sharing for inpatient hospital, home health, 

19 skilled nursing facility, and other services. 

20 (9) How other programmatic issues should be 

21 treated in a post acute care bundle, including rules 

22 specific to various types of post-acute providers such 

23 as the post-acute transfer policy, three-day hospital 

24 stay to qualify for services furnished by skilled nurs25 ing facilities, and the coordination of payments and 


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1 care under the Medicare program and the Medicaid 

2 program. 

3 (10) Such other issues as the Secretary deems 

4 appropriate. 

5 (c) CONSULTATIONS AND ANALYSIS.— 

6 (1) CONSULTATION WITH STAKEHOLDERS.—In 

7 developing the plan under subsection (a)(1), the Sec8 retary shall consult with relevant stakeholders and 

9 shall consider experience with such research studies 

10 and demonstrations that the Secretary determines 

11 appropriate. 

12 (2) ANALYSIS AND DATA COLLECTION.—In de13 veloping such plan, the Secretary shall— 

14 (A) analyze the issues described in sub15 section (b) and other issues that the Secretary 

16 determines appropriate; 

17 (B) analyze the impacts (including geo18 graphic impacts) of post acute service reform 

19 approaches, including bundling of such services 

20 on individuals, hospitals, post acute care pro21 viders, and physicians; 

22 (C) use existing data (such as data sub23 mitted on claims) and collect such data as the 

24 Secretary determines are appropriate to develop 

25 such plan required in this section; and 


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1 (D) if patient functional status measures 

2 are appropriate for the analysis, to the extent 

3 practical, build upon the CARE tool being de4 veloped pursuant to section 5008 of the Deficit 

5 Reduction Act of 2005. 

6 (d) ADMINISTRATION.— 

7 (1) FUNDING.—For purposes of carrying out 

8 the provisions of this section, in addition to funds 

9 otherwise available, out of any funds in the Treasury 

10 not otherwise appropriated, there are appropriated 

11 to the Secretary for the Center for Medicare & Med12 icaid Services Program Management Account 

13 $15,000,000 for each of the fiscal years 2010 

14 through 2012. Amounts appropriated under this 

15 paragraph for a fiscal year shall be available until 

16 expended. 

17 (2) EXPEDITED DATA COLLECTION.—Chapter 

18 35 of title 44, United States Code shall not apply to 

19 this section. 

20 (e) PUBLIC REPORTS.— 

21 (1) INTERIM REPORTS.—The Secretary shall 

22 issue interim public reports on a periodic basis on 

23 the plan described in subsection (a)(1), the issues 

24 described in subsection (b), and impact analyses as 

25 the Secretary determines appropriate. 


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1 (2) FINAL REPORT.—Not later than the date 

2 that is 3 years after the date of the enactment of 

3 this Act, the Secretary shall issue a final public re4 port on such plan, including analysis of issues de5 scribed in subsection (b) and impact analyses. 

6 (f) CONVERSION OF ACUTE CARE EPISODE DEM7 ONSTRATION TO PILOT PROGRAM AND EXPANSION TO IN8 CLUDE POST ACUTE SERVICES.— 

9 (1) IN GENERAL.—Part E of title XVIII of the 

10 Social Security Act is amended by inserting after 

11 section 1866C the following new section: 

12 ‘‘SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEM13 ONSTRATION TO PILOT PROGRAM AND EX14 PANSION TO INCLUDE POST ACUTE SERV15 ICES. 

16 ‘‘(a) IN GENERAL.—By not later than January 1, 

17 2011, the Secretary shall, for the purpose of promoting 

18 the use of bundled payments to promote efficient and high 

19 quality delivery of care— 

20 ‘‘(1) convert the acute care episode demonstra21 tion program conducted under section 1866C to a 

22 pilot program; and 

23 ‘‘(2) subject to subsection (c), expand such pro24 gram as so converted to include post acute services 

25 and such other services the Secretary determines to 


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1 be appropriate, which may include transitional serv2 ices. 

3 ‘‘(b) SCOPE.—The pilot program under subsection 

4 (a) may include additional geographic areas and additional 

5 conditions which account for significant program spend6 ing, as defined by the Secretary. Nothing in this sub7 section shall be construed as limiting the number of hos8 pital and physician groups or the number of hospital and 

9 post-acute provider groups that may participate in the 

10 pilot program. 

11 ‘‘(c) LIMITATION.—The Secretary shall only expand 

12 the pilot program under subsection (a)(2) if the Secretary 

13 finds that— 

14 ‘‘(1) the demonstration program under section 

15 1866C and pilot program under this section main16 tain or increase the quality of care received by indi17 viduals enrolled under this title; and 

18 ‘‘(2) such demonstration program and pilot pro19 gram reduce program expenditures and, based on 

20 the certification under subsection (d), that the ex21 pansion of such pilot program would result in esti22 mated spending that would be less than what spend23 ing would otherwise be in the absence of this section. 

24 ‘‘(d) CERTIFICATION.—For purposes of subsection 

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1 icaid Services shall certify whether expansion of the pilot 

2 program under this section would result in estimated 

3 spending that would be less than what spending would 

4 otherwise be in the absence of this section. 

5 ‘‘(e) VOLUNTARY PARTICIPATION.—Nothing in this 

6 paragraph shall be construed as requiring the participa7 tion of an entity in the pilot program under this section.’’. 

8 (2) CONFORMING AMENDMENT.—Section 

9 1866C(b) of the Social Security Act (42 U.S.C. 

10 1395cc–3(b)) is amended by striking ‘‘The Sec11 retary’’ and inserting ‘‘Subject to section 1866D, the 

12 Secretary’’. 

13 SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010. 

14 Section 1895(b)(3)(B)(ii) of the Social Security Act 

15 (42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended— 

16 (1) in subclause (IV), by striking ‘‘and’’; 

17 (2) by redesignating subclause (V) as subclause 

18 (VII); and 

19 (3) by inserting after subclause (IV) the fol20 lowing new subclauses: 

21 ‘‘(V) 2007, 2008, and 2009, sub22 ject to clause (v), the home health 

23 market basket percentage increase; 

24 ‘‘(VI) 2010, subject to clause (v), 

25 0 percent; and’’. 


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1 SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH 

2 CARE. 

3 (a) ACCELERATION OF ADJUSTMENT FOR CASE MIX

4 CHANGES.—Section 1895(b)(3)(B) of the Social Security 

5 Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 

6 (1) in clause (iv), by striking ‘‘Insofar as’’ and 

7 inserting ‘‘Subject to clause (vi), insofar as’’; and 

8 (2) by adding at the end the following new 

9 clause: 

10 ‘‘(vi) SPECIAL RULE FOR CASE MIX

11 CHANGES FOR 2011.— 

12 ‘‘(I) IN GENERAL.—With respect 

13 to the case mix adjustments estab14 lished in section 484.220(a) of title 

15 42, Code of Federal Regulations, the 

16 Secretary shall apply, in 2010, the ad17 justment established in paragraph (3) 

18 of such section for 2011, in addition 

19 to applying the adjustment established 

20 in paragraph (2) for 2010. 

21 ‘‘(II) CONSTRUCTION.—Nothing 

22 in this clause shall be construed as 

23 limiting the amount of adjustment for 

24 case mix for 2010 or 2011 if more re25 cent data indicate an appropriate ad26 justment that is greater than the 


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1 amount established in the section de2 scribed in subclause (I).’’. 

3 (b) REBASING HOME HEALTH PROSPECTIVE PAY4 MENT AMOUNT.—Section 1895(b)(3)(A) of the Social Se5 curity Act (42 U.S.C. 1395fff(b)(3)(A)) is amended— 

6 (1) in clause (i)— 

7 (A) in subclause (III), by inserting ‘‘and 

8 before 2011’’ after ‘‘after the period described 

9 in subclause (II)’’; and 

10 (B) by inserting after subclause (III) the 

11 following new subclauses: 

12 ‘‘(IV) Subject to clause (iii)(I), 

13 for 2011, such amount (or amounts) 

14 shall be adjusted by a uniform per15 centage determined to be appropriate 

16 by the Secretary based on analysis of 

17 factors such as changes in the average 

18 number and types of visits in an epi19 sode, the change in intensity of visits 

20 in an episode, growth in cost per epi21 sode, and other factors that the Sec22 retary considers to be relevant. 

23 ‘‘(V) Subject to clause (iii)(II), 

24 for a year after 2011, such a amount 

25 (or amounts) shall be equal to the 


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1 amount (or amounts) determined 

2 under this clause for the previous 

3 year, updated under subparagraph 

4 (B).’’; and 

5 (2) by adding at the end the following new 

6 clause: 

7 ‘‘(iii) SPECIAL RULE IN CASE OF IN8 ABILITY TO EFFECT TIMELY REBASING.— 

9 ‘‘(I) APPLICATION OF PROXY

10 AMOUNT FOR 2011.—If the Secretary 

11 is not able to compute the amount (or 

12 amounts) under clause (i)(IV) so as to 

13 permit, on a timely basis, the applica14 tion of such clause for 2011, the Sec15 retary shall substitute for such 

16 amount (or amounts) 95 percent of 

17 the amount (or amounts) that would 

18 otherwise be specified under clause 

19 (i)(III) if it applied for 2011. 

20 ‘‘(II) ADJUSTMENT FOR SUBSE21 QUENT YEARS BASED ON DATA.—If 

22 the Secretary applies subclause (I), 

23 the Secretary before July 1, 2011, 

24 shall compare the amount (or 

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1 clause with the amount (or amounts) 

2 that should have been applied under 

3 clause (i)(IV). The Secretary shall de4 crease or increase the prospective pay5 ment amount (or amounts) under 

6 clause (i)(V) for 2012 (or, at the Sec7 retary’s discretion, over a period of 

8 several years beginning with 2012) by 

9 the amount (if any) by which the 

10 amount (or amounts) applied under 

11 subclause (I) is greater or less, re12 spectively, than the amount (or 

13 amounts) that should have been ap14 plied under clause (i)(IV).’’. 

15 SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVE16 MENTS INTO MARKET BASKET UPDATE FOR 

17 HOME HEALTH SERVICES. 

18 (a) IN GENERAL.—Section 1895(b)(3)(B) of the So19 cial Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amend20 ed— 

21 (1) in clause (iii), by inserting ‘‘(including being 

22 subject to the productivity adjustment described in 

23 section 1886(b)(3)(B)(iii)(II))’’ after ‘‘in the same 

24 manner’’; and 


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1 (2) in clause (v)(I), by inserting ‘‘(but not 

2 below 0)’’ after ‘‘reduced’’. 

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

4 subsection (a) shall apply to home health market basket 

5 percentage increases for years beginning with 2010. 

6 SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE 

7 PROHIBITION ON CERTAIN PHYSICIAN RE8 FERRALS MADE TO HOSPITALS. 

9 (a) IN GENERAL.—Section 1877 of the Social Secu10 rity Act (42 U.S.C. 1395nn) is amended— 

11 (1) in subsection (d)(2)— 

12 (A) in subparagraph (A), by striking 

13 ‘‘and’’ at the end; 

14 (B) in subparagraph (B), by striking the 

15 period at the end and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following new 

17 subparagraph: 

18 ‘‘(C) in the case where the entity is a hos19 pital, the hospital meets the requirements of 

20 paragraph (3)(D).’’; 

21 (2) in subsection (d)(3)— 

22 (A) in subparagraph (B), by striking 

23 ‘‘and’’ at the end; 

24 (B) in subparagraph (C), by striking the 

25 period at the end and inserting ‘‘; and’’; and 


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1 (C) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(D) the hospital meets the requirements 

4 described in subsection (i)(1).’’; 

5 (3) by amending subsection (f) to read as fol6 lows: 

7 ‘‘(f) REPORTING AND DISCLOSURE REQUIRE8 MENTS.— 

9 ‘‘(1) IN GENERAL.—Each entity providing cov10 ered items or services for which payment may be 

11 made under this title shall provide the Secretary 

12 with the information concerning the entity’s owner13 ship, investment, and compensation arrangements, 

14 including— 

15 ‘‘(A) the covered items and services pro16 vided by the entity, and 

17 ‘‘(B) the names and unique physician iden18 tification numbers of all physicians with an 

19 ownership or investment interest (as described 

20 in subsection (a)(2)(A)), or with a compensa21 tion arrangement (as described in subsection 

22 (a)(2)(B)), in the entity, or whose immediate 

23 relatives have such an ownership or investment 

24 interest or who have such a compensation rela25 tionship with the entity. 


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1 Such information shall be provided in such form, 

2 manner, and at such times as the Secretary shall 

3 specify. The requirement of this subsection shall not 

4 apply to designated health services provided outside 

5 the United States or to entities which the Secretary 

6 determines provide services for which payment may 

7 be made under this title very infrequently. 

8 ‘‘(2) REQUIREMENTS FOR HOSPITALS WITH

9 PHYSICIAN OWNERSHIP OR INVESTMENT.—In the 

10 case of a hospital that meets the requirements de11 scribed in subsection (i)(1), the hospital shall— 

12 ‘‘(A) submit to the Secretary an initial re13 port, and periodic updates at a frequency deter14 mined by the Secretary, containing a detailed 

15 description of the identity of each physician 

16 owner and physician investor and any other 

17 owners or investors of the hospital; 

18 ‘‘(B) require that any referring physician 

19 owner or investor discloses to the individual 

20 being referred, by a time that permits the indi21 vidual to make a meaningful decision regarding 

22 the receipt of services, as determined by the 

23 Secretary, the ownership or investment interest, 

24 as applicable, of such referring physician in the 

25 hospital; and 


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1 ‘‘(C) disclose the fact that the hospital is 

2 partially or wholly owned by one or more physi3 cians or has one or more physician investors— 

4 ‘‘(i) on any public website for the hos5 pital; and 

6 ‘‘(ii) in any public advertising for the 

7 hospital. 

8 The information to be reported or disclosed under 

9 this paragraph shall be provided in such form, man10 ner, and at such times as the Secretary shall specify. 

11 The requirements of this paragraph shall not apply 

12 to designated health services furnished outside the 

13 United States or to entities which the Secretary de14 termines provide services for which payment may be 

15 made under this title very infrequently. 

16 ‘‘(3) PUBLICATION OF INFORMATION.—The 

17 Secretary shall publish, and periodically update, the 

18 information submitted by hospitals under paragraph 

19 (2)(A) on the public Internet website of the Centers 

20 for Medicare & Medicaid Services.’’; 

21 (4) by amending subsection (g)(5) to read as 

22 follows: 

23 ‘‘(5) FAILURE TO REPORT OR DISCLOSE INFOR24 MATION.— 


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1 ‘‘(A) REPORTING.—Any person who is re2 quired, but fails, to meet a reporting require3 ment of paragraphs (1) and (2)(A) of sub4 section (f) is subject to a civil money penalty of 

5 not more than $10,000 for each day for which 

6 reporting is required to have been made. 

7 ‘‘(B) DISCLOSURE.—Any physician who is 

8 required, but fails, to meet a disclosure require9 ment of subsection (f)(2)(B) or a hospital that 

10 is required, but fails, to meet a disclosure re11 quirement of subsection (f)(2)(C) is subject to 

12 a civil money penalty of not more than $10,000 

13 for each case in which disclosure is required to 

14 have been made. 

15 ‘‘(C) APPLICATION.—The provisions of 

16 section 1128A (other than the first sentence of 

17 subsection (a) and other than subsection (b)) 

18 shall apply to a civil money penalty under sub19 paragraphs (A) and (B) in the same manner as 

20 such provisions apply to a penalty or proceeding 

21 under section 1128A(a).’’; and 

22 (5) by adding at the end the following new sub23 section: 


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1 ‘‘(i) REQUIREMENTS TO QUALIFY FOR RURAL PRO2 VIDER AND HOSPITAL OWNERSHIP EXCEPTIONS TO

3 SELF-REFERRAL PROHIBITION.— 

4 ‘‘(1) REQUIREMENTS DESCRIBED.—For pur5 poses of subsection (d)(3)(D), the requirements de6 scribed in this paragraph are as follows: 

7 ‘‘(A) PROVIDER AGREEMENT.—The hos8 pital had— 

9 ‘‘(i) physician ownership or invest10 ment on January 1, 2009; and 

11 ‘‘(ii) a provider agreement under sec12 tion 1866 in effect on such date. 

13 ‘‘(B) PROHIBITION ON PHYSICIAN OWNER14 SHIP OR INVESTMENT.—The percentage of the 

15 total value of the ownership or investment in16 terests held in the hospital, or in an entity 

17 whose assets include the hospital, by physician 

18 owners or investors in the aggregate does not 

19 exceed such percentage as of the date of enact20 ment of this subsection. 

21 ‘‘(C) PROHIBITION ON EXPANSION OF FA22 CILITY CAPACITY.—Except as provided in para23 graph (2), the number of operating rooms, pro24 cedure rooms, or beds of the hospital at any 

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1 this subsection are no greater than the number 

2 of operating rooms, procedure rooms, or beds, 

3 respectively, as of such date. 

4 ‘‘(D) ENSURING BONA FIDE OWNERSHIP

5 AND INVESTMENT.— 

6 ‘‘(i) Any ownership or investment in7 terests that the hospital offers to a physi8 cian are not offered on more favorable 

9 terms than the terms offered to a person 

10 who is not in a position to refer patients 

11 or otherwise generate business for the hos12 pital. 

13 ‘‘(ii) The hospital (or any investors in 

14 the hospital) does not directly or indirectly 

15 provide loans or financing for any physi16 cian owner or investor in the hospital. 

17 ‘‘(iii) The hospital (or any investors in 

18 the hospital) does not directly or indirectly 

19 guarantee a loan, make a payment toward 

20 a loan, or otherwise subsidize a loan, for 

21 any physician owner or investor or group 

22 of physician owners or investors that is re23 lated to acquiring any ownership or invest24 ment interest in the hospital. 


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1 ‘‘(iv) Ownership or investment returns 

2 are distributed to each owner or investor in 

3 the hospital in an amount that is directly 

4 proportional to the ownership or invest5 ment interest of such owner or investor in 

6 the hospital. 

7 ‘‘(v) The investment interest of the 

8 owner or investor is directly proportional 

9 to the owner’s or investor’s capital con10 tributions made at the time the ownership 

11 or investment interest is obtained. 

12 ‘‘(vi) Physician owners and investors 

13 do not receive, directly or indirectly, any 

14 guaranteed receipt of or right to purchase 

15 other business interests related to the hos16 pital, including the purchase or lease of 

17 any property under the control of other 

18 owners or investors in the hospital or lo19 cated near the premises of the hospital. 

20 ‘‘(vii) The hospital does not offer a 

21 physician owner or investor the oppor22 tunity to purchase or lease any property 

23 under the control of the hospital or any 

24 other owner or investor in the hospital on 

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1 fered to a person that is not a physician 

2 owner or investor. 

3 ‘‘(viii) The hospital does not condition 

4 any physician ownership or investment in5 terests either directly or indirectly on the 

6 physician owner or investor making or in7 fluencing referrals to the hospital or other8 wise generating business for the hospital. 

9 ‘‘(E) PATIENT SAFETY.—In the case of a 

10 hospital that does not offer emergency services, 

11 the hospital has the capacity to— 

12 ‘‘(i) provide assessment and initial 

13 treatment for medical emergencies; and 

14 ‘‘(ii) if the hospital lacks additional 

15 capabilities required to treat the emergency 

16 involved, refer and transfer the patient 

17 with the medical emergency to a hospital 

18 with the required capability. 

19 ‘‘(F) LIMITATION ON APPLICATION TO

20 CERTAIN CONVERTED FACILITIES.—The hos21 pital was not converted from an ambulatory 

22 surgical center to a hospital on or after the date 

23 of enactment of this subsection. 

24 ‘‘(2) EXCEPTION TO PROHIBITION ON EXPAN25 SION OF FACILITY CAPACITY.— 


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1 ‘‘(A) PROCESS.— 

2 ‘‘(i) ESTABLISHMENT.—The Secretary 

3 shall establish and implement a process 

4 under which a hospital may apply for an 

5 exception from the requirement under 

6 paragraph (1)(C). 

7 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

8 INPUT.—The process under clause (i) shall 

9 provide persons and entities in the commu10 nity in which the hospital applying for an 

11 exception is located with the opportunity to 

12 provide input with respect to the applica13 tion. 

14 ‘‘(iii) TIMING FOR IMPLEMENTA15 TION.—The Secretary shall implement the 

16 process under clause (i) on the date that is 

17 one month after the promulgation of regu18 lations described in clause (iv). 

19 ‘‘(iv) REGULATIONS.—Not later than 

20 the first day of the month beginning 18 

21 months after the date of the enactment of 

22 this subsection, the Secretary shall promul23 gate regulations to carry out the process 

24 under clause (i). The Secretary may issue 


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1 such regulations as interim final regula2 tions. 

3 ‘‘(B) FREQUENCY.—The process described 

4 in subparagraph (A) shall permit a hospital to 

5 apply for an exception up to once every 2 years. 

6 ‘‘(C) PERMITTED INCREASE.— 

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

8 (ii) and subparagraph (D), a hospital 

9 granted an exception under the process de10 scribed in subparagraph (A) may increase 

11 the number of operating rooms, procedure 

12 rooms, or beds of the hospital above the 

13 baseline number of operating rooms, proce14 dure rooms, or beds, respectively, of the 

15 hospital (or, if the hospital has been grant16 ed a previous exception under this para17 graph, above the number of operating 

18 rooms, procedure rooms, or beds, respec19 tively, of the hospital after the application 

20 of the most recent increase under such an 

21 exception). 

22 ‘‘(ii) 100 PERCENT INCREASE LIMITA23 TION.—The Secretary shall not permit an 

24 increase in the number of operating rooms, 

25 procedure rooms, or beds of a hospital 


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1 under clause (i) to the extent such increase 

2 would result in the number of operating 

3 rooms, procedure rooms, or beds of the 

4 hospital exceeding 200 percent of the base5 line number of operating rooms, procedure 

6 rooms, or beds of the hospital. 

7 ‘‘(iii) BASELINE NUMBER OF OPER8 ATING ROOMS, PROCEDURE ROOMS, OR

9 BEDS.—In this paragraph, the term ‘base10 line number of operating rooms, procedure 

11 rooms, or beds’ means the number of oper12 ating rooms, procedure rooms, or beds of a 

13 hospital as of the date of enactment of this 

14 subsection. 

15 ‘‘(D) INCREASE LIMITED TO FACILITIES

16 ON THE MAIN CAMPUS OF THE HOSPITAL.— 

17 Any increase in the number of operating rooms, 

18 procedure rooms, or beds of a hospital pursuant 

19 to this paragraph may only occur in facilities on 

20 the main campus of the hospital. 

21 ‘‘(E) CONDITIONS FOR APPROVAL OF AN

22 INCREASE IN FACILITY CAPACITY.—The Sec23 retary may grant an exception under the proc24 ess described in subparagraph (A) only to a 

25 hospital— 


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1 ‘‘(i) that is located in a county in 

2 which the percentage increase in the popu3 lation during the most recent 5-year period 

4 for which data are available is estimated to 

5 be at least 150 percent of the percentage 

6 increase in the population growth of the 

7 State in which the hospital is located dur8 ing that period, as estimated by Bureau of 

9 the Census and available to the Secretary; 

10 ‘‘(ii) whose annual percent of total in11 patient admissions that represent inpatient 

12 admissions under the program under title 

13 XIX is estimated to be equal to or greater 

14 than the average percent with respect to 

15 such admissions for all hospitals located in 

16 the county in which the hospital is located; 

17 ‘‘(iii) that does not discriminate 

18 against beneficiaries of Federal health care 

19 programs and does not permit physicians 

20 practicing at the hospital to discriminate 

21 against such beneficiaries; 

22 ‘‘(iv) that is located in a State in 

23 which the average bed capacity in the 

24 State is estimated to be less than the na25 tional average bed capacity; 


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1 ‘‘(v) that has an average bed occu2 pancy rate that is estimated to be greater 

3 than the average bed occupancy rate in the 

4 State in which the hospital is located; and 

5 ‘‘(vi) that meets other conditions as 

6 determined by the Secretary. 

7 ‘‘(F) PROCEDURE ROOMS.—In this sub8 section, the term ‘procedure rooms’ includes 

9 rooms in which catheterizations, angiographies, 

10 angiograms, and endoscopies are furnished, but 

11 such term shall not include emergency rooms or 

12 departments (except for rooms in which cath13 eterizations, angiographies, angiograms, and 

14 endoscopies are furnished). 

15 ‘‘(G) PUBLICATION OF FINAL DECI16 SIONS.—Not later than 120 days after receiving 

17 a complete application under this paragraph, 

18 the Secretary shall publish on the public Inter19 net website of the Centers for Medicare & Med20 icaid Services the final decision with respect to 

21 such application. 

22 ‘‘(H) LIMITATION ON REVIEW.—There 

23 shall be no administrative or judicial review 

24 under section 1869, section 1878, or otherwise 

25 of the exception process under this paragraph, 


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1 including the establishment of such process, 

2 and any determination made under such proc3 ess. 

4 ‘‘(3) PHYSICIAN OWNER OR INVESTOR DE5 FINED.—For purposes of this subsection and sub6 section (f)(2), the term ‘physician owner or investor’ 

7 means a physician (or an immediate family member 

8 of such physician) with a direct or an indirect own9 ership or investment interest in the hospital. 

10 ‘‘(4) PATIENT SAFETY REQUIREMENT.—In the 

11 case of a hospital to which the requirements of para12 graph (1) apply, insofar as the hospital admits a pa13 tient and does not have any physician available on 

14 the premises 24 hours per day, 7 days per week, be15 fore admitting the patient— 

16 ‘‘(A) the hospital shall disclose such fact to 

17 the patient; and 

18 ‘‘(B) following such disclosure, the hospital 

19 shall receive from the patient a signed acknowl20 edgment that the patient understands such fact. 

21 ‘‘(5) CLARIFICATION.—Nothing in this sub22 section shall be construed as preventing the Sec23 retary from terminating a hospital’s provider agree24 ment if the hospital is not in compliance with regu25 lations pursuant to section 1866.’’. 


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1 (b) VERIFYING COMPLIANCE.—The Secretary of 

2 Health and Human Services shall establish policies and 

3 procedures to verify compliance with the requirements de4 scribed in subsections (i)(1) and (i)(4) of section 1877 of 

5 the Social Security Act, as added by subsection (a)(5). 

6 The Secretary may use unannounced site reviews of hos7 pitals and audits to verify compliance with such require8 ments. 

9 (c) IMPLEMENTATION.— 

10 (1) FUNDING.—For purposes of carrying out 

11 the amendments made by subsection (a) and the 

12 provisions of subsection (b), in addition to funds 

13 otherwise available, out of any funds in the Treasury 

14 not otherwise appropriated there are appropriated to 

15 the Secretary of Health and Human Services for the 

16 Centers for Medicare & Medicaid Services Program 

17 Management Account $5,000,000 for each fiscal 

18 year beginning with fiscal year 2010. Amounts ap19 propriated under this paragraph for a fiscal year 

20 shall be available until expended. 

21 (2) ADMINISTRATION.—Chapter 35 of title 44, 

22 United States Code, shall not apply to the amend23 ments made by subsection (a) and the provisions of 

24 subsection (b). 


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1 SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEO2 GRAPHIC ADJUSTMENT FACTORS UNDER 

3 MEDICARE. 

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

5 Human Services shall enter into a contract with the Insti6 tute of Medicine of the National Academy of Science to 

7 conduct a comprehensive empirical study, and provide rec8 ommendations as appropriate, on the accuracy of the geo9 graphic adjustment factors established under sections 

10 1848(e) and 1886(d)(3)(E) of the Social Security Act (42 

11 U.S.C. 1395w–4(e), 11395ww(d)(3)). 

12 (b) MATTERS INCLUDED.—Such study shall include 

13 an evaluation and assessment of the following with respect 

14 to such adjustment factors: 

15 (1) Empirical validity of the adjustment factors. 

16 (2) Methodology used to determine the adjust17 ment factors. 

18 (3) Measures used for the adjustment factors, 

19 taking into account— 

20 (A) timeliness of data and frequency of re21 visions to such data; 

22 (B) sources of data and the degree to 

23 which such data are representative of costs; and 

24 (C) operational costs of providers who par25 ticipate in Medicare. 


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1 (c) EVALUATION.—Such study shall, within the con2 text of the United States health care marketplace, evalu3 ate and consider the following: 

4 (1) The effect of the adjustment factors on the 

5 level and distribution of the health care workforce 

6 and resources, including— 

7 (A) recruitment and retention that takes 

8 into account workforce mobility between urban 

9 and rural areas; 

10 (B) ability of hospitals and other facilities 

11 to maintain an adequate and skilled workforce; 

12 and 

13 (C) patient access to providers and needed 

14 medical technologies. 

15 (2) The effect of the adjustment factors on pop16 ulation health and quality of care. 

17 (3) The effect of the adjustment factors on the 

18 ability of providers to furnish efficient, high value 

19 care. 

20 (d) REPORT.—The contract under subsection (a) 

21 shall provide for the Institute of Medicine to submit, not 

22 later than one year after the date of the enactment of this 

23 Act, to the Secretary and the Congress a report containing 

24 results and recommendations of the study conducted 

25 under this section. 


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1 (e) FUNDING.—There are authorized to be appro2 priated to carry out this section such sums as may be nec3 essary. 

4 SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO 

5 ADDRESS GEOGRAPHIC INEQUITIES. 

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

7 Human Services, taking into account the recommenda8 tions made in the report under section 1157(d), shall in9 clude in the proposed rules published to implement 

10 changes to payment systems for physicians and hospitals 

11 under sections 1848(e) and 1886(d)(3)(E), respectively, of 

12 the Social Security Act, proposals to revise geographic ad13 justment factors for such payment systems for services 

14 furnished under the Medicare program. Such proposed 

15 rules shall be published in the rulemaking period imme16 diately following submission of the report under section 

17 1157(d). 

18 (b) PAYMENT ADJUSTMENTS.— 

19 (1) FUNDING FOR IMPROVEMENTS.—In making 

20 any changes to the geographic adjustment factors in 

21 accordance with subsection (a), the Secretary shall 

22 use funds made available for such purposes under 

23 subsection (c). 

24 (2) ENSURING FAIRNESS.—In carrying out this 

25 subsection, the Secretary shall not change payment 


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1 rates to be less than they would have been had this 

2 section not been enacted. 

3 (c) FUNDING.—Amounts in the Medicare Improve4 ment Fund under section 1898 of the Social Security Act 

5 (42 U.S.C. 1395iii), as amended by section 1146, shall 

6 be available to the Secretary to make changes to the geo7 graphic adjustments factors established under sections 

8 1848(e) and 1886(d)(3)(E) of the Social Security Act. For 

9 such purpose, such funds shall be available for expenditure 

10 for services furnished before January 1, 2014, and shall 

11 not exceed the total amounts available under such Fund 

12 for such period. No more than one-half of such amounts 

13 shall be available for expenditure for services furnished in 

14 any one payment year. 

15 Subtitle D—Medicare Advantage 

16 Reforms 

17 PART 1—PAYMENT AND ADMINISTRATION 

18 SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR19 SERVICE COSTS. 

20 Section 1853 of the Social Security Act (42 U.S.C. 

21 1395w–23) is amended— 

22 (1) in subsection (j)(1)(A)— 

23 (A) by striking ‘‘beginning with 2007’’ and 

24 inserting ‘‘for 2007, 2008, 2009, and 2010’’; 

25 and 


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1 (B) by inserting after ‘‘(k)(1)’’ the following: ‘‘, or, beginning with 2011, 1 2 ⁄12 of the 

3 blended benchmark amount determined under 

4 subsection (n)(1)’’; and 

5 (2) by adding at the end the following new sub6 section: 

7 ‘‘(n) DETERMINATION OF BLENDED BENCHMARK

8 AMOUNT.— 

9 ‘‘(1) IN GENERAL.—For purposes of subsection 

10 (j), subject to paragraphs (3) and (4), the term 

11 ‘blended benchmark amount’ means for an area— 

12 ‘‘(A) for 2011 the sum of— 

‘‘(i) 2 13 ⁄3 of the applicable amount (as 

14 defined in subsection (k)) for the area and 

15 year; and 

‘‘(ii) 1 16 ⁄3 of the amount specified in 

17 paragraph (2) for the area and year; 

18 ‘‘(B) for 2012 the sum of— 

‘‘(i) 1 19 ⁄3 of the applicable amount for 

20 the area and year; and 

‘‘(ii) 2 21 ⁄3 of the amount specified in 

22 paragraph (2) for the area and year; and 

23 ‘‘(C) for a subsequent year the amount 

24 specified in paragraph (2) for the area and 

25 year. 


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1 ‘‘(2) SPECIFIED AMOUNT.—The amount speci2 fied in this paragraph for an area and year is the 

3 amount specified in subsection (c)(1)(D)(i) for the 

4 area and year adjusted (in a manner specified by the 

5 Secretary) to take into account the phase-out in the 

6 indirect costs of medical education from capitation 

7 rates described in subsection (k)(4). 

8 ‘‘(3) FEE-FOR-SERVICE PAYMENT FLOOR.—In 

9 no case shall the blended benchmark amount for an 

10 area and year be less than the amount specified in 

11 paragraph (2). 

12 ‘‘(4) EXCEPTION FOR PACE PLANS.—This sub13 section shall not apply to payments to a PACE pro14 gram under section 1894.’’. 

15 SEC. 1162. QUALITY BONUS PAYMENTS. 

16 (a) IN GENERAL.—Section 1853 of the Social Secu17 rity Act (42 U.S.C. 1395w–23), as amended by section 

18 1161, is amended— 

19 (1) in subsection (j), by inserting ‘‘subject to 

20 subsection (o),’’ after ‘‘For purposes of this part’’; 

21 and 

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(o) QUALITY BASED PAYMENT ADJUSTMENT.— 


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1 ‘‘(1) HIGH QUALITY PLAN ADJUSTMENT.—For 

2 years beginning with 2011, in the case of a Medicare 

3 Advantage plan that is identified (under paragraph 

4 (3)(E)(ii)) as a high quality MA plan with respect 

5 to the year, the blended benchmark amount under 

6 subsection (n)(1) shall be increased— 

7 ‘‘(A) for 2011, by 1.0 percent; 

8 ‘‘(B) for 2012, by 2.0 percent; and 

9 ‘‘(C) for a subsequent year, by 3.0 percent. 

10 ‘‘(2) IMPROVED QUALITY PLAN ADJUSTMENT.— 

11 For years beginning with 2011, in the case of a 

12 Medicare Advantage plan that is identified (under 

13 paragraph (3)(E)(iii)) as an improved quality MA 

14 plan with respect to the year, blended benchmark 

15 amount under subsection (n)(1) shall be increased— 

16 ‘‘(A) for 2011, by 0.33 percent; 

17 ‘‘(B) for 2012, by 0.66 percent; and 

18 ‘‘(C) for a subsequent year, by 1.0 percent. 

19 ‘‘(3) DETERMINATIONS OF QUALITY.— 

20 ‘‘(A) QUALITY PERFORMANCE.—The Sec21 retary shall provide for the computation of a 

22 quality performance score for each Medicare 

23 Advantage plan to be applied for each year be24 ginning with 2010. 

25 ‘‘(B) COMPUTATION OF SCORE.— 


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1 ‘‘(i) FOR YEARS BEFORE 2014.—For 

2 years before 2014, the quality performance 

3 score for a Medicare Advantage plan shall 

4 be computed based on a blend (as des5 ignated by the Secretary) of the plan’s per6 formance on— 

7 ‘‘(I) HEDIS effectiveness of care 

8 quality measures; 

9 ‘‘(II) CAHPS quality measures; 

10 and 

11 ‘‘(III) such other measures of 

12 clinical quality as the Secretary may 

13 specify. 

14 Such measures shall be risk-adjusted as 

15 the Secretary deems appropriate. 

16 ‘‘(ii) ESTABLISHMENT OF OUTCOME17 BASED MEASURES.—By not later than for 

18 2013 the Secretary shall implement report19 ing requirements for quality under this 

20 section on measures selected under clause 

21 (iii) that reflect the outcomes of care expe22 rienced by individuals enrolled in Medicare 

23 Advantage plans (in addition to measures 

24 described in clause (i)). Such measures 

25 may include— 


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1 ‘‘(I) measures of rates of admis2 sion and readmission to a hospital; 

3 ‘‘(II) measures of prevention 

4 quality, such as those established by 

5 the Agency for Healthcare Research 

6 and Quality (that include hospital ad7 mission rates for specified conditions); 

8 ‘‘(III) measures of patient mor9 tality and morbidity following surgery; 

10 ‘‘(IV) measures of health func11 tioning (such as limitations on activi12 ties of daily living) and survival for 

13 patients with chronic diseases; 

14 ‘‘(V) measures of patient safety; 

15 and 

16 ‘‘(VI) other measure of outcomes 

17 and patient quality of life as deter18 mined by the Secretary. 

19 Such measures shall be risk-adjusted as 

20 the Secretary deems appropriate. In deter21 mining the quality measures to be used 

22 under this clause, the Secretary shall take 

23 into consideration the recommendations of 

24 the Medicare Payment Advisory Commis25 sion in its report to Congress under section 


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1 168 of the Medicare Improvements for Pa2 tients and Providers Act of 2008 (Public 

3 Law 110–275) and shall provide pref4 erence to measures collected on and com5 parable to measures used in measuring 

6 quality under parts A and B. 

7 ‘‘(iii) RULES FOR SELECTION OF

8 MEASURES.—The Secretary shall select 

9 measures for purposes of clause (ii) con10 sistent with the following: 

11 ‘‘(I) The Secretary shall provide 

12 preference to clinical quality measures 

13 that have been endorsed by the entity 

14 with a contract with the Secretary 

15 under section 1890(a). 

16 ‘‘(II) Prior to any measure being 

17 selected under this clause, the Sec18 retary shall publish in the Federal 

19 Register such measure and provide for 

20 a period of public comment on such 

21 measure. 

22 ‘‘(iv) TRANSITIONAL USE OF

23 BLEND.—For payments for 2014 and 

24 2015, the Secretary may compute the qual25 ity performance score for a Medicare AdVerDate Nov 24 2008 00:08 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00337 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 vantage plan based on a blend of the meas2 ures specified in clause (i) and the meas3 ures described in clause (ii) and selected 

4 under clause (iii). 

5 ‘‘(v) USE OF QUALITY OUTCOMES

6 MEASURES.—For payments beginning with 

7 2016, the preponderance of measures used 

8 under this paragraph shall be quality out9 comes measures described in clause (ii) 

10 and selected under clause (iii). 

11 ‘‘(C) DATA USED IN COMPUTING SCORE.— 

12 Such score for application for— 

13 ‘‘(i) payments in 2011 shall be based 

14 on quality performance data for plans for 

15 2009; and 

16 ‘‘(ii) payments in 2012 and a subse17 quent year shall be based on quality per18 formance data for plans for the second 

19 preceding year. 

20 ‘‘(D) REPORTING OF DATA.—Each Medi21 care Advantage organization shall provide for 

22 the reporting to the Secretary of quality per23 formance data described in subparagraph (B) 

24 (in order to determine a quality performance 


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1 score under this paragraph) in such time and 

2 manner as the Secretary shall specify. 

3 ‘‘(E) RANKING OF PLANS.— 

4 ‘‘(i) INITIAL RANKING.—Based on the 

5 quality performance score described in sub6 paragraph (B) achieved with respect to a 

7 year, the Secretary shall rank plan per8 formance— 

9 ‘‘(I) from highest to lowest based 

10 on absolute scores; and 

11 ‘‘(II) from highest to lowest 

12 based on percentage improvement in 

13 the score for the plan from the pre14 vious year. 

15 A plan which does not report quality per16 formance data under subparagraph (D) 

17 shall be counted, for purposes of such 

18 ranking, as having the lowest plan per19 formance and lowest percentage improve20 ment. 

21 ‘‘(ii) IDENTIFICATION OF HIGH QUAL22 ITY PLANS IN TOP QUINTILE BASED ON

23 PROJECTED ENROLLMENT.—The Secretary 

24 shall, based on the scores for each plan 

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1 jected enrollment for each plan and subject 

2 to clause (iv), identify those Medicare Ad3 vantage plans with the highest score that, 

4 based upon projected enrollment, are pro5 jected to include in the aggregate 20 per6 cent of the total projected enrollment for 

7 the year. For purposes of this subsection, 

8 a plan so identified shall be referred to in 

9 this subsection as a ‘high quality MA 

10 plan’. 

11 ‘‘(iii) IDENTIFICATION OF IMPROVED

12 QUALITY PLANS IN TOP QUINTILE BASED

13 ON PROJECTED ENROLLMENT.—The Sec14 retary shall, based on the percentage im15 provement score for each plan under clause 

16 (i)(II) and the Secretary’s projected enroll17 ment for each plan and subject to clause 

18 (iv), identify those Medicare Advantage 

19 plans with the greatest percentage im20 provement score that, based upon projected 

21 enrollment, are projected to include in the 

22 aggregate 20 percent of the total projected 

23 enrollment for the year. For purposes of 

24 this subsection, a plan so identified that is 

25 not a high quality plan for the year shall 


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1 be referred to in this subsection as an ‘im2 proved quality MA plan’. 

3 ‘‘(iv) AUTHORITY TO DISQUALIFY

4 CERTAIN PLANS.—In applying clauses (ii) 

5 and (iii), the Secretary may determine not 

6 to identify a Medicare Advantage plan if 

7 the Secretary has identified deficiencies in 

8 the plan’s compliance with rules for such 

9 plans under this part. 

10 ‘‘(F) NOTIFICATION.—The Secretary, in 

11 the annual announcement required under sub12 section (b)(1)(B) in 2011 and each succeeding 

13 year, shall notify the Medicare Advantage orga14 nization that is offering a high quality plan or 

15 an improved quality plan of such identification 

16 for the year and the quality performance pay17 ment adjustment for such plan for the year. 

18 The Secretary shall provide for publication on 

19 the website for the Medicare program of the in20 formation described in the previous sentence.’’. 

21 SEC. 1163. EXTENSION OF SECRETARIAL CODING INTEN22 SITY ADJUSTMENT AUTHORITY. 

23 Section 1853(a)(1)(C)(ii) of the Social Security Act 

24 (42 U.S.C. 1395w–23(a)(1)(C)(ii)) is amended— 


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1 (1) in the matter before subclause (I), by strik2 ing ‘‘through 2010’’ and inserting ‘‘and each subse3 quent year’’; and 

4 (2) in subclause (II)— 

5 (A) by inserting ‘‘periodically’’ before ‘‘con6 duct an analysis’’; 

7 (B) by inserting ‘‘on a timely basis’’ after 

8 ‘‘are incorporated’’; and 

9 (C) by striking ‘‘only for 2008, 2009, and 

10 2010’’ and inserting ‘‘for 2008 and subsequent 

11 years’’. 

12 SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY 

13 ELECTION PERIODS. 

14 (a) 2 WEEK PROCESSING PERIOD FOR ANNUAL EN15 ROLLMENT PERIOD (AEP).—Paragraph (3)(B) of section 

16 1851(e) of the Social Security Act (42 U.S.C. 1395w– 

17 21(e)) is amended— 

18 (1) by striking ‘‘and’’ at the end of clause (iii); 

19 (2) in clause (iv)— 

20 (A) by striking ‘‘and succeeding years’’ 

21 and inserting ‘‘, 2008, 2009, and 2010’’; and 

22 (B) by striking the period at the end and 

23 inserting ‘‘; and’’; and 

24 (3) by adding at the end the following new 

25 clause: 


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1 ‘‘(v) with respect to 2011 and suc2 ceeding years, the period beginning on No3 vember 1 and ending on December 15 of 

4 the year before such year.’’. 

5 (b) ELIMINATION OF 3-MONTH ADDITIONAL OPEN

6 ENROLLMENT PERIOD (OEP).—Effective for plan years 

7 beginning with 2011, paragraph (2) of such section is 

8 amended by striking subparagraph (C). 

9 SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS. 

10 Section 1876(h)(5)(C) of the Social Security Act (42 

11 U.S.C. 1395mm(h)(5)(C)) is amended— 

12 (1) in clause (ii), by striking ‘‘January 1, 

13 2010’’ and inserting ‘‘January 1, 2012’’; and 

14 (2) in clause (iii), by striking ‘‘the service area 

15 for the year’’ and inserting ‘‘the portion of the 

16 plan’s service area for the year that is within the 

17 service area of a reasonable cost reimbursement con18 tract’’. 

19 SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EM20 PLOYER GROUP PLANS. 

21 (a) IN GENERAL.—The first sentence of paragraph 

22 (2) of section 1857(i) of the Social Security Act (42 

23 U.S.C. 1395w–27(i)) is amended by inserting before the 

24 period at the end the following: ‘‘, but only if 90 percent 

25 of the Medicare Advantage eligible individuals enrolled 


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1 under such plan reside in a county in which the MA orga2 nization offers an MA local plan’’. 

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

4 subsection (a) shall apply for plan years beginning on or 

5 after January 1, 2011, and shall not apply to plans which 

6 were in effect as of December 31, 2010. 

7 SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS. 

8 (a) REPORT TO CONGRESS.—Not later than 1 year 

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

10 of Health and Human Services shall submit to Congress 

11 a report that evaluates the adequacy of the risk adjust12 ment system under section 1853(a)(1)(C) of the Social Se13 curity Act (42 U.S.C. 1395–23(a)(1)(C)) in predicting 

14 costs for beneficiaries with chronic or co-morbid condi15 tions, beneficiaries dually-eligible for Medicare and Med16 icaid, and non-Medicaid eligible low-income beneficiaries; 

17 and the need and feasibility of including further grada18 tions of diseases or conditions and multiple years of bene19 ficiary data. 

20 (b) IMPROVEMENTS TO RISK ADJUSTMENT.—Not 

21 later than January 1, 2012, the Secretary shall implement 

22 necessary improvements to the risk adjustment system 

23 under section 1853(a)(1)(C) of the Social Security Act (42 

24 U.S.C. 1395–23(a)(1)(C)), taking into account the evalua25 tion under subsection (a). 


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1 SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STA2 BILIZATION FUND. 

3 (a) IN GENERAL.—Section 1858 of the Social Secu4 rity Act (42 U.S.C. 1395w–27a) is amended by striking 

5 subsection (e). 

6 (b) TRANSITION.—Any amount contained in the MA 

7 Regional Plan Stabilization Fund as of the date of the 

8 enactment of this Act shall be transferred to the Federal 

9 Supplementary Medical Insurance Trust Fund. 

10 PART 2—BENEFICIARY PROTECTIONS AND ANTI11 FRAUD 

12 SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL 

13 HEALTH SERVICES. 

14 (a) IN GENERAL.—Section 1852(a)(1) of the Social 

15 Security Act (42 U.S.C. 1395w–22(a)(1)) is amended— 

16 (1) in subparagraph (A), by inserting before the 

17 period at the end the following: ‘‘with cost-sharing 

18 that is no greater (and may be less) than the cost19 sharing that would otherwise be imposed under such 

20 program option’’; 

21 (2) in subparagraph (B)(i), by striking ‘‘or an 

22 actuarially equivalent level of cost-sharing as deter23 mined in this part’’; and 

24 (3) by amending clause (ii) of subparagraph 

25 (B) to read as follows: 


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1 ‘‘(ii) PERMITTING USE OF FLAT CO2 PAYMENT OR PER DIEM RATE.—Nothing in 

3 clause (i) shall be construed as prohibiting 

4 a Medicare Advantage plan from using a 

5 flat copayment or per diem rate, in lieu of 

6 the cost-sharing that would be imposed 

7 under part A or B, so long as the amount 

8 of the cost-sharing imposed does not ex9 ceed the amount of the cost-sharing that 

10 would be imposed under the respective part 

11 if the individual were not enrolled in a plan 

12 under this part.’’. 

13 (b) LIMITATION FOR DUAL ELIGIBLES AND QUALI14 FIED MEDICARE BENEFICIARIES.—Section 1852(a) of 

15 such Act is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(7) LIMITATION ON COST-SHARING FOR DUAL

18 ELIGIBLES AND QUALIFIED MEDICARE BENE19 FICIARIES.—In the case of a individual who is a full20 benefit dual eligible individual (as defined in section 

21 1935(c)(6)) or a qualified medicare beneficiary (as 

22 defined in section 1905(p)(1)) who is enrolled in a 

23 Medicare Advantage plan, the plan may not impose 

24 cost-sharing that exceeds the amount of cost-sharing 

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1 vidual under this title and title XIX if the individual 

2 were not enrolled with such plan.’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) The amendments made by subsection (a) 

5 shall apply to plan years beginning on or after Janu6 ary 1, 2011. 

7 (2) The amendments made by subsection (b) 

8 shall apply to plan years beginning on or after Janu9 ary 1, 2011. 

10 SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLL11 EES IN PLANS WITH ENROLLMENT SUSPEN12 SION. 

13 Section 1851(e)(4) of the Social Security Act (42 

14 U.S.C. 1395w(e)(4)) is amended— 

15 (1) in subparagraph (C), by striking at the end 

16 ‘‘or’’; 

17 (2) in subparagraph (D)— 

18 (A) by inserting ‘‘, taking into account the 

19 health or well-being of the individual’’ before 

20 the period; and 

21 (B) by redesignating such subparagraph as 

22 subparagraph (E); and 

23 (3) by inserting after subparagraph (C) the fol24 lowing new subparagraph: 


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1 ‘‘(D) the individual is enrolled in an MA 

2 plan and enrollment in the plan is suspended 

3 under paragraph (2)(B) or (3)(C) of section 

4 1857(g) because of a failure of the plan to meet 

5 applicable requirements; or’’. 

6 SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN 

7 ADMINISTRATIVE COSTS. 

8 (a) DISCLOSURE OF MEDICAL LOSS RATIOS AND

9 OTHER EXPENSE DATA.—Section 1851 of the Social Se10 curity Act (42 U.S.C. 1395w–21), as previously amended 

11 by this subtitle, is amended by adding at the end the fol12 lowing new subsection: 

13 ‘‘(p) PUBLICATION OF MEDICAL LOSS RATIOS AND

14 OTHER COST-RELATED INFORMATION.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall pub16 lish, not later than November 1 of each year (begin17 ning with 2011), for each MA plan contract, the 

18 medical loss ratio of the plan in the previous year. 

19 ‘‘(2) SUBMISSION OF DATA.— 

20 ‘‘(A) IN GENERAL.—Each MA organization 

21 shall submit to the Secretary, in a form and 

22 manner specified by the Secretary, data nec23 essary for the Secretary to publish the medical 

24 loss ratio on a timely basis. 


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1 ‘‘(B) DATA FOR 2010 AND 2011.—The data 

2 submitted under subparagraph (A) for 2010 

3 and for 2011 shall be consistent in content with 

4 the data reported as part of the MA plan bid 

5 in June 2009 for 2010. 

6 ‘‘(C) USE OF STANDARDIZED ELEMENTS

7 AND DEFINITIONS.—The data to be submitted 

8 under subparagraph (A) relating to medical loss 

9 ratio for a year, beginning with 2012, shall be 

10 submitted based on the standardized elements 

11 and definitions developed under paragraph (3). 

12 ‘‘(3) DEVELOPMENT OF DATA REPORTING

13 STANDARDS.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 develop and implement standardized data ele16 ments and definitions for reporting under this 

17 subsection, for contract years beginning with 

18 2012, of data necessary for the calculation of 

19 the medical loss ratio for MA plans. Not later 

20 than December 31, 2010, the Secretary shall 

21 publish a report describing the elements and 

22 definitions so developed. 

23 ‘‘(B) CONSULTATION.—The Secretary 

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1 perts on health plan accounting systems, and 

2 representatives of the National Association of 

3 Insurance Commissioners, in the development 

4 of such data elements and definitions. 

5 ‘‘(4) MEDICAL LOSS RATIO TO BE DEFINED.— 

6 For purposes of this part, the term ‘medical loss 

7 ratio’ has the meaning given such term by the Sec8 retary, taking into account the meaning given such 

9 term by the Health Choices Commissioner under 

10 section 116 of the America’s Affordable Health 

11 Choices Act of 2009.’’. 

12 (b) MINIMUM MEDICAL LOSS RATIO.—Section 

13 1857(e) of the Social Security Act (42 U.S.C. 1395w– 

14 27(e)) is amended by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL

17 LOSS RATIO.—If the Secretary determines for a con18 tract year (beginning with 2014) that an MA plan 

19 has failed to have a medical loss ratio (as defined in 

20 section 1851(p)(4)) of at least .85— 

21 ‘‘(A) the Secretary shall require the Medi22 care Advantage organization offering the plan 

23 to give enrollees a rebate (in the second suc24 ceeding contract year) of premiums under this 

25 part (or part B or part D, if applicable) by 


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1 such amount as would provide for a benefits 

2 ratio of at least .85; 

3 ‘‘(B) for 3 consecutive contract years, the 

4 Secretary shall not permit the enrollment of 

5 new enrollees under the plan for coverage dur6 ing the second succeeding contract year; and 

7 ‘‘(C) the Secretary shall terminate the plan 

8 contract if the plan fails to have such a medical 

9 loss ratio for 5 consecutive contract years.’’. 

10 SEC. 1174. STRENGTHENING AUDIT AUTHORITY. 

11 (a) FOR PART C PAYMENTS RISK ADJUSTMENT.— 

12 Section 1857(d)(1) of the Social Security Act (42 U.S.C. 

13 1395w–27(d)(1)) is amended by inserting after ‘‘section 

14 1858(c))’’ the following: ‘‘, and data submitted with re15 spect to risk adjustment under section 1853(a)(3)’’. 

16 (b) ENFORCEMENT OF AUDITS AND DEFI17 CIENCIES.— 

18 (1) IN GENERAL.—Section 1857(e) of such Act, 

19 as amended by section 1173, is amended by adding 

20 at the end the following new paragraph: 

21 ‘‘(5) ENFORCEMENT OF AUDITS AND DEFI22 CIENCIES.— 

23 ‘‘(A) INFORMATION IN CONTRACT.—The 

24 Secretary shall require that each contract with 

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1 clude terms that inform the organization of the 

2 provisions in subsection (d). 

3 ‘‘(B) ENFORCEMENT AUTHORITY.—The 

4 Secretary is authorized, in connection with con5 ducting audits and other activities under sub6 section (d), to take such actions, including pur7 suit of financial recoveries, necessary to address 

8 deficiencies identified in such audits or other 

9 activities.’’. 

10 (2) APPLICATION UNDER PART D.—For provi11 sion applying the amendment made by paragraph 

12 (1) to prescription drug plans under part D, see sec13 tion 1860D–12(b)(3)(D) of the Social Security Act. 

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

15 this section shall take effect on the date of the enactment 

16 of this Act and shall apply to audits and activities con17 ducted for contract years beginning on or after January 

18 1, 2011. 

19 SEC. 1175. AUTHORITY TO DENY PLAN BIDS. 

20 (a) IN GENERAL.—Section 1854(a)(5) of the Social 

21 Security Act (42 U.S.C. 1395w–24(a)(5)) is amended by 

22 adding at the end the following new subparagraph: 

23 ‘‘(C) REJECTION OF BIDS.—Nothing in 

24 this section shall be construed as requiring the 


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1 Secretary to accept any or every bid by an MA 

2 organization under this subsection.’’. 

3 (b) APPLICATION UNDER PART D.—Section 1860D– 

4 11(d) of such Act (42 U.S.C. 1395w–111(d)) is amended 

5 by adding at the end the following new paragraph: 

6 ‘‘(3) REJECTION OF BIDS.—Paragraph (5)(C) 

7 of section 1854(a) shall apply with respect to bids 

8 under this section in the same manner as it applies 

9 to bids by an MA organization under such section.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to bids for contract years begin12 ning on or after January 1, 2011. 

13 PART 3—TREATMENT OF SPECIAL NEEDS PLANS 

14 SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN 

15 ENROLLMENT PERIOD OF INDIVIDUALS INTO 

16 CHRONIC CARE SPECIALIZED MA PLANS FOR 

17 SPECIAL NEEDS INDIVIDUALS. 

18 Section 1859(f)(4) of the Social Security Act (42 

19 U.S.C. 1395w–28(f)(4)) is amended by adding at the end 

20 the following new subparagraph: 

21 ‘‘(C) The plan does not enroll an individual 

22 on or after January 1, 2011, other than during 

23 an annual, coordinated open enrollment period 

24 or when at the time of the diagnosis of the dis25 ease or condition that qualifies the individual as 


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1 an individual described in subsection 

2 (b)(6)(B)(iii).’’. 

3 SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS 

4 PLANS TO RESTRICT ENROLLMENT. 

5 (a) IN GENERAL.—Section 1859(f)(1) of the Social 

6 Security Act (42 U.S.C. 1395w–28(f)(1)) is amended by 

7 striking ‘‘January 1, 2011’’ and inserting ‘‘January 1, 

8 2013 (or January 1, 2016, in the case of a plan described 

9 in section 1177(b)(1) of the America’s Affordable Health 

10 Choices Act of 2009)’’. 

11 (b) GRANDFATHERING OF CERTAIN PLANS.— 

12 (1) PLANS DESCRIBED.—For purposes of sec13 tion 1859(f)(1) of the Social Security Act (42 

14 U.S.C. 1395w–28(f)(1)), a plan described in this 

15 paragraph is a plan that had a contract with a State 

16 that had a State program to operate an integrated 

17 Medicaid-Medicare program that had been approved 

18 by the Centers for Medicare & Medicaid Services as 

19 of January 1, 2004. 

20 (2) ANALYSIS; REPORT.—The Secretary of 

21 Health and Human Services shall provide, through 

22 a contract with an independent health services eval23 uation organization, for an analysis of the plans de24 scribed in paragraph (1) with regard to the impact 

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1 faction, and other subjects as specified by the Sec2 retary. Not later than December 31, 2011, the Sec3 retary shall submit to Congress a report on such 

4 analysis and shall include in such report such rec5 ommendations with regard to the treatment of such 

6 plans as the Secretary deems appropriate. 

7 Subtitle E—Improvements to 

8 Medicare Part D 

9 SEC. 1181. ELIMINATION OF COVERAGE GAP. 

10 (a) IN GENERAL.—Section 1860D–2(b) of such Act 

11 (42 U.S.C. 1395w–102(b)) is amended— 

12 (1) in paragraph (3)(A), by striking ‘‘paragraph 

13 (4)’’ and inserting ‘‘paragraphs (4) and (7)’’; 

14 (2) in paragraph (4)(B)(i), by inserting ‘‘sub15 ject to paragraph (7)’’ after ‘‘purposes of this part’’; 

16 and 

17 (3) by adding at the end the following new 

18 paragraph: 

19 ‘‘(7) PHASED-IN ELIMINATION OF COVERAGE

20 GAP.— 

21 ‘‘(A) IN GENERAL.—For each year begin22 ning with 2011, the Secretary shall consistent 

23 with this paragraph progressively increase the 

24 initial coverage limit (described in subsection 

25 (b)(3)) and decrease the annual out-of-pocket 


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1 threshold from the amounts otherwise computed 

2 until there is a continuation of coverage from 

3 the initial coverage limit for expenditures in4 curred through the total amount of expendi5 tures at which benefits are available under 

6 paragraph (4). 

7 ‘‘(B) INCREASE IN INITIAL COVERAGE

8 LIMIT.—For a year beginning with 2011, the 

9 initial coverage limit otherwise computed with10 out regard to this paragraph shall be increased 

by 1 11 ⁄2 of the cumulative phase-in percentage (as 

12 defined in subparagraph (D)(ii) for the year) 

13 times the out-of-pocket gap amount (as defined 

14 in subparagraph (E)) for the year. 

15 ‘‘(C) DECREASE IN ANNUAL OUT-OF-POCK16 ET THRESHOLD.—For a year beginning with 

17 2011, the annual out-of-pocket threshold other18 wise computed without regard to this paragraph 

shall be decreased by 1 19 ⁄2 of the cumulative 

20 phase-in percentage of the out-of-pocket gap 

21 amount for the year multiplied by 1.75. 

22 ‘‘(D) PHASE–IN.—For purposes of this 

23 paragraph: 


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1 ‘‘(i) ANNUAL PHASE-IN PERCENT2 AGE.—The term ‘annual phase-in percent3 age’ means— 

4 ‘‘(I) for 2011, 13 percent; 

5 ‘‘(II) for 2012, 2013, 2014, and 

6 2015, 5 percent; 

7 ‘‘(III) for 2016 through 2018, 

8 7.5 percent; and 

9 ‘‘(IV) for 2019 and each subse10 quent year, 10 percent. 

11 ‘‘(ii) CUMULATIVE PHASE-IN PER12 CENTAGE.—The term ‘cumulative phase-in 

13 percentage’ means for a year the sum of 

14 the annual phase-in percentage for the 

15 year and the annual phase-in percentages 

16 for each previous year beginning with 

17 2011, but in no case more than 100 per18 cent. 

19 ‘‘(E) OUT-OF-POCKET GAP AMOUNT.—For 

20 purposes of this paragraph, the term ‘out-of21 pocket gap amount’ means for a year the 

22 amount by which— 

23 ‘‘(i) the annual out-of-pocket thresh24 old specified in paragraph (4)(B) for the 


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1 year (as determined as if this paragraph 

2 did not apply), exceeds 

3 ‘‘(ii) the sum of— 

4 ‘‘(I) the annual deductible under 

5 paragraph (1) for the year; and 

‘‘(II) 1 6 ⁄4 of the amount by which 

7 the initial coverage limit under para8 graph (3) for the year (as determined 

9 as if this paragraph did not apply) ex10 ceeds such annual deductible.’’. 

11 (b) REQUIRING DRUG MANUFACTURERS TO PRO12 VIDE DRUG REBATES FOR FULL-BENEFIT DUAL ELIGI13 BLES.— 

14 (1) IN GENERAL.—Section 1860D–2 of the So15 cial Security Act (42 U.S.C. 1396r–8) is amended— 

16 (A) in subsection (e)(1), in the matter be17 fore subparagraph (A), by inserting ‘‘and sub18 section (f)’’ after ‘‘this subsection’’; and 

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

20 subsection: 

21 ‘‘(f) PRESCRIPTION DRUG REBATE AGREEMENT FOR

22 FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.— 

23 ‘‘(1) IN GENERAL.—In this part, the term ‘cov24 ered part D drug’ does not include any drug or bio25 logic that is manufactured by a manufacturer that 


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1 has not entered into and have in effect a rebate 

2 agreement described in paragraph (2). 

3 ‘‘(2) REBATE AGREEMENT.—A rebate agree4 ment under this subsection shall require the manu5 facturer to provide to the Secretary a rebate for 

6 each rebate period (as defined in paragraph (6)(B)) 

7 ending after December 31, 2010, in the amount 

8 specified in paragraph (3) for any covered part D 

9 drug of the manufacturer dispensed after December 

10 31, 2010, to any full-benefit dual eligible individual 

11 (as defined in paragraph (6)(A)) for which payment 

12 was made by a PDP sponsor under part D or a MA 

13 organization under part C for such period. Such re14 bate shall be paid by the manufacturer to the Sec15 retary not later than 30 days after the date of re16 ceipt of the information described in section 1860D– 

17 12(b)(7), including as such section is applied under 

18 section 1857(f)(3). 

19 ‘‘(3) REBATE FOR FULL-BENEFIT DUAL ELIGI20 BLE MEDICARE DRUG PLAN ENROLLEES.— 

21 ‘‘(A) IN GENERAL.—The amount of the re22 bate specified under this paragraph for a manu23 facturer for a rebate period, with respect to 

24 each dosage form and strength of any covered 

25 part D drug provided by such manufacturer 


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1 and dispensed to a full-benefit dual eligible indi2 vidual, shall be equal to the product of— 

3 ‘‘(i) the total number of units of such 

4 dosage form and strength of the drug so 

5 provided and dispensed for which payment 

6 was made by a PDP sponsor under part D 

7 or a MA organization under part C for the 

8 rebate period (as reported under section 

9 1860D–12(b)(7), including as such section 

10 is applied under section 1857(f)(3)); and 

11 ‘‘(ii) the amount (if any) by which— 

12 ‘‘(I) the Medicaid rebate amount 

13 (as defined in subparagraph (B)) for 

14 such form, strength, and period, ex15 ceeds 

16 ‘‘(II) the average Medicare drug 

17 program full-benefit dual eligible re18 bate amount (as defined in subpara19 graph (C)) for such form, strength, 

20 and period. 

21 ‘‘(B) MEDICAID REBATE AMOUNT.—For 

22 purposes of this paragraph, the term ‘Medicaid 

23 rebate amount’ means, with respect to each 

24 dosage form and strength of a covered part D 


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1 drug provided by the manufacturer for a rebate 

2 period— 

3 ‘‘(i) in the case of a single source 

4 drug or an innovator multiple source drug, 

5 the amount specified in paragraph 

6 (1)(A)(ii) of section 1927(b) plus the 

7 amount, if any, specified in paragraph 

8 (2)(A)(ii) of such section, for such form, 

9 strength, and period; or 

10 ‘‘(ii) in the case of any other covered 

11 outpatient drug, the amount specified in 

12 paragraph (3)(A)(i) of such section for 

13 such form, strength, and period. 

14 ‘‘(C) AVERAGE MEDICARE DRUG PROGRAM

15 FULL-BENEFIT DUAL ELIGIBLE REBATE

16 AMOUNT.—For purposes of this subsection, the 

17 term ‘average Medicare drug program full-ben18 efit dual eligible rebate amount’ means, with re19 spect to each dosage form and strength of a 

20 covered part D drug provided by a manufac21 turer for a rebate period, the sum, for all PDP 

22 sponsors under part D and MA organizations 

23 administering a MA–PD plan under part C, 

24 of— 


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1 ‘‘(i) the product, for each such spon2 sor or organization, of— 

3 ‘‘(I) the sum of all rebates, dis4 counts, or other price concessions (not 

5 taking into account any rebate pro6 vided under paragraph (2) for such 

7 dosage form and strength of the drug 

8 dispensed, calculated on a per-unit 

9 basis, but only to the extent that any 

10 such rebate, discount, or other price 

11 concession applies equally to drugs 

12 dispensed to full-benefit dual eligible 

13 Medicare drug plan enrollees and 

14 drugs dispensed to PDP and MA–PD 

15 enrollees who are not full-benefit dual 

16 eligible individuals; and 

17 ‘‘(II) the number of the units of 

18 such dosage and strength of the drug 

19 dispensed during the rebate period to 

20 full-benefit dual eligible individuals 

21 enrolled in the prescription drug plans 

22 administered by the PDP sponsor or 

23 the MA–PD plans administered by the 

24 MA–PD organization; divided by 


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1 ‘‘(ii) the total number of units of such 

2 dosage and strength of the drug dispensed 

3 during the rebate period to full-benefit 

4 dual eligible individuals enrolled in all pre5 scription drug plans administered by PDP 

6 sponsors and all MA–PD plans adminis7 tered by MA–PD organizations. 

8 ‘‘(4) LENGTH OF AGREEMENT.—The provisions 

9 of paragraph (4) of section 1927(b) (other than 

10 clauses (iv) and (v) of subparagraph (B)) shall apply 

11 to rebate agreements under this subsection in the 

12 same manner as such paragraph applies to a rebate 

13 agreement under such section. 

14 ‘‘(5) OTHER TERMS AND CONDITIONS.—The 

15 Secretary shall establish other terms and conditions 

16 of the rebate agreement under this subsection, in17 cluding terms and conditions related to compliance, 

18 that are consistent with this subsection. 

19 ‘‘(6) DEFINITIONS.—In this subsection and sec20 tion 1860D–12(b)(7): 

21 ‘‘(A) FULL-BENEFIT DUAL ELIGIBLE INDI22 VIDUAL.—The term ‘full-benefit dual eligible in23 dividual’ has the meaning given such term in 

24 section 1935(c)(6). 


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1 ‘‘(B) REBATE PERIOD.—The term ‘rebate 

2 period’ has the meaning given such term in sec3 tion 1927(k)(8).’’. 

4 (2) REPORTING REQUIREMENT FOR THE DE5 TERMINATION AND PAYMENT OF REBATES BY MANU6 FACTURES RELATED TO REBATE FOR FULL-BENEFIT

7 DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLL8 EES.— 

9 (A) REQUIREMENTS FOR PDP SPON10 SORS.—Section 1860D–12(b) of the Social Se11 curity Act (42 U.S.C. 1395w–112(b)) is amend12 ed by adding at the end the following new para13 graph: 

14 ‘‘(7) REPORTING REQUIREMENT FOR THE DE15 TERMINATION AND PAYMENT OF REBATES BY MANU16 FACTURERS RELATED TO REBATE FOR FULL-BEN17 EFIT DUAL ELIGIBLE MEDICARE DRUG PLAN EN18 ROLLEES.— 

19 ‘‘(A) IN GENERAL.—For purposes of the 

20 rebate under section 1860D–2(f) for contract 

21 years beginning on or after January 1, 2011, 

22 each contract entered into with a PDP sponsor 

23 under this part with respect to a prescription 

24 drug plan shall require that the sponsor comply 

25 with subparagraphs (B) and (C). 


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1 ‘‘(B) REPORT FORM AND CONTENTS.—Not 

2 later than 60 days after the end of each rebate 

3 period (as defined in section 1860D–2(f)(6)(B)) 

4 within such a contract year to which such sec5 tion applies, a PDP sponsor of a prescription 

6 drug plan under this part shall report to each 

7 manufacturer— 

8 ‘‘(i) information (by National Drug 

9 Code number) on the total number of units 

10 of each dosage, form, and strength of each 

11 drug of such manufacturer dispensed to 

12 full-benefit dual eligible Medicare drug 

13 plan enrollees under any prescription drug 

14 plan operated by the PDP sponsor during 

15 the rebate period; 

16 ‘‘(ii) information on the price dis17 counts, price concessions, and rebates for 

18 such drugs for such form, strength, and 

19 period; 

20 ‘‘(iii) information on the extent to 

21 which such price discounts, price conces22 sions, and rebates apply equally to full23 benefit dual eligible Medicare drug plan 

24 enrollees and PDP enrollees who are not 


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1 full-benefit dual eligible Medicare drug 

2 plan enrollees; and 

3 ‘‘(iv) any additional information that 

4 the Secretary determines is necessary to 

5 enable the Secretary to calculate the aver6 age Medicare drug program full-benefit 

7 dual eligible rebate amount (as defined in 

8 paragraph (3)(C) of such section), and to 

9 determine the amount of the rebate re10 quired under this section, for such form, 

11 strength, and period. 

12 Such report shall be in a form consistent with 

13 a standard reporting format established by the 

14 Secretary. 

15 ‘‘(C) SUBMISSION TO SECRETARY.—Each 

16 PDP sponsor shall promptly transmit a copy of 

17 the information reported under subparagraph 

18 (B) to the Secretary for the purpose of audit 

19 oversight and evaluation. 

20 ‘‘(D) CONFIDENTIALITY OF INFORMA21 TION.—The provisions of subparagraph (D) of 

22 section 1927(b)(3), relating to confidentiality of 

23 information, shall apply to information reported 

24 by PDP sponsors under this paragraph in the 

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1 formation disclosed by manufacturers or whole2 salers under such section, except— 

3 ‘‘(i) that any reference to ‘this sec4 tion’ in clause (i) of such subparagraph 

5 shall be treated as being a reference to this 

6 section; 

7 ‘‘(ii) the reference to the Director of 

8 the Congressional Budget Office in clause 

9 (iii) of such subparagraph shall be treated 

10 as including a reference to the Medicare 

11 Payment Advisory Commission; and 

12 ‘‘(iii) clause (iv) of such subparagraph 

13 shall not apply. 

14 ‘‘(E) OVERSIGHT.—Information reported 

15 under this paragraph may be used by the In16 spector General of the Department of Health 

17 and Human Services for the statutorily author18 ized purposes of audit, investigation, and eval19 uations. 

20 ‘‘(F) PENALTIES FOR FAILURE TO PRO21 VIDE TIMELY INFORMATION AND PROVISION OF

22 FALSE INFORMATION.—In the case of a PDP 

23 sponsor— 

24 ‘‘(i) that fails to provide information 

25 required under subparagraph (B) on a 


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1 timely basis, the sponsor is subject to a 

2 civil money penalty in the amount of 

3 $10,000 for each day in which such infor4 mation has not been provided; or 

5 ‘‘(ii) that knowingly (as defined in 

6 section 1128A(i)) provides false informa7 tion under such subparagraph, the sponsor 

8 is subject to a civil money penalty in an 

9 amount not to exceed $100,000 for each 

10 item of false information. 

11 Such civil money penalties are in addition to 

12 other penalties as may be prescribed by law. 

13 The provisions of section 1128A (other than 

14 subsections (a) and (b)) shall apply to a civil 

15 money penalty under this subparagraph in the 

16 same manner as such provisions apply to a pen17 alty or proceeding under section 1128A(a).’’. 

18 (B) APPLICATION TO MA ORGANIZA19 TIONS.—Section 1857(f)(3) of the Social Secu20 rity Act (42 U.S.C. 1395w–27(f)(3)) is amend21 ed by adding at the end the following: 

22 ‘‘(D) REPORTING REQUIREMENT RELATED

23 TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE

24 MEDICARE DRUG PLAN ENROLLEES.—Section 

25 1860D–12(b)(7).’’. 


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1 (3) DEPOSIT OF REBATES INTO MEDICARE PRE2 SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) 

3 of such Act (42 U.S.C. 1395w–116(c)) is amended 

4 by adding at the end the following new paragraph: 

5 ‘‘(6) REBATE FOR FULL-BENEFIT DUAL ELIGI6 BLE MEDICARE DRUG PLAN ENROLLEES.—Amounts 

7 paid under a rebate agreement under section 

8 1860D–2(f) shall be deposited into the Account and 

9 shall be used to pay for all or part of the gradual 

10 elimination of the coverage gap under section 

11 1860D–2(b)(7).’’. 

12 SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN 

13 ORIGINAL COVERAGE GAP. 

14 Section 1860D–2 of the Social Security Act (42 

15 U.S.C. 1395w–102), as amended by section 1181(a), is 

16 amended— 

17 (1) in subsection (b)(4)(C)(ii), by inserting 

18 ‘‘subject to subsection (g)(2)(C),’’ after ‘‘(ii)’’; 

19 (2) in subsection (e)(1), in the matter before 

20 subparagraph (A), by striking ‘‘subsection (f)’’ and 

21 inserting ‘‘subsections (f) and (g)’’ after ‘‘this sub22 section’’; and 

23 (3) by adding at the end the following new sub24 section: 


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1 ‘‘(g) REQUIREMENT FOR MANUFACTURER DISCOUNT

2 AGREEMENT FOR CERTAIN QUALIFYING DRUGS.— 

3 ‘‘(1) IN GENERAL.—In this part, the term ‘cov4 ered part D drug’ does not include any drug or bio5 logic that is manufactured by a manufacturer that 

6 has not entered into and have in effect for all quali7 fying drugs (as defined in paragraph (5)(A)) a dis8 count agreement described in paragraph (2). 

9 ‘‘(2) DISCOUNT AGREEMENT.— 

10 ‘‘(A) PERIODIC DISCOUNTS.—A discount 

11 agreement under this paragraph shall require 

12 the manufacturer involved to provide, to each 

13 PDP sponsor with respect to a prescription 

14 drug plan or each MA organization with respect 

15 to each MA–PD plan, a discount in an amount 

16 specified in paragraph (3) for qualifying drugs 

17 (as defined in paragraph (5)(A)) of the manu18 facturer dispensed to a qualifying enrollee after 

19 December 31, 2010, insofar as the individual is 

20 in the original gap in coverage (as defined in 

21 paragraph (5)(E)). 

22 ‘‘(B) DISCOUNT AGREEMENT.—Insofar as 

23 not inconsistent with this subsection, the Sec24 retary shall establish terms and conditions of 

25 such agreement, including terms and conditions 


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1 relating to compliance, similar to the terms and 

2 conditions for rebate agreements under para3 graphs (2), (3), and (4) of section 1927(b), ex4 cept that— 

5 ‘‘(i) discounts shall be applied under 

6 this subsection to prescription drug plans 

7 and MA–PD plans instead of State plans 

8 under title XIX; 

9 ‘‘(ii) PDP sponsors and MA organiza10 tions shall be responsible, instead of 

11 States, for provision of necessary utiliza12 tion information to drug manufacturers; 

13 and 

14 ‘‘(iii) sponsors and MA organizations 

15 shall be responsible for reporting informa16 tion on drug-component negotiated price, 

17 instead of other manufacturer prices. 

18 ‘‘(C) COUNTING DISCOUNT TOWARD TRUE

19 OUT-OF-POCKET COSTS.—Under the discount 

20 agreement, in applying subsection (b)(4), with 

21 regard to subparagraph (C)(i) of such sub22 section, if a qualified enrollee purchases the 

23 qualified drug insofar as the enrollee is in an 

24 actual gap of coverage (as defined in paragraph 

25 (5)(D)), the amount of the discount under the 


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1 agreement shall be treated and counted as costs 

2 incurred by the plan enrollee. 

3 ‘‘(3) DISCOUNT AMOUNT.—The amount of the 

4 discount specified in this paragraph for a discount 

5 period for a plan is equal to 50 percent of the 

6 amount of the drug-component negotiated price (as 

7 defined in paragraph (5)(C)) for qualifying drugs for 

8 the period involved. 

9 ‘‘(4) ADDITIONAL TERMS.—In the case of a dis10 count provided under this subsection with respect to 

11 a prescription drug plan offered by a PDP sponsor 

12 or an MA–PD plan offered by an MA organization, 

13 if a qualified enrollee purchases the qualified drug— 

14 ‘‘(A) insofar as the enrollee is in an actual 

15 gap of coverage (as defined in paragraph 

16 (5)(D)), the sponsor or plan shall provide the 

17 discount to the enrollee at the time the enrollee 

18 pays for the drug; and 

19 ‘‘(B) insofar as the enrollee is in the por20 tion of the original gap in coverage (as defined 

21 in paragraph (5)(E)) that is not in the actual 

22 gap in coverage, the discount shall not be ap23 plied against the negotiated price (as defined in 

24 subsection (d)(1)(B)) for the purpose of calcu25 lating the beneficiary payment. 


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1 ‘‘(5) DEFINITIONS.—In this subsection: 

2 ‘‘(A) QUALIFYING DRUG.—The term 

3 ‘qualifying drug’ means, with respect to a pre4 scription drug plan or MA–PD plan, a drug or 

5 biological product that— 

6 ‘‘(i)(I) is a drug produced or distrib7 uted under an original new drug applica8 tion approved by the Food and Drug Ad9 ministration, including a drug product 

10 marketed by any cross-licensed producers 

11 or distributors operating under the new 

12 drug application; 

13 ‘‘(II) is a drug that was originally 

14 marketed under an original new drug ap15 plication approved by the Food and Drug 

16 Administration; or 

17 ‘‘(III) is a biological product as ap18 proved under Section 351(a) of the Public 

19 Health Services Act; 

20 ‘‘(ii) is covered under the formulary of 

21 the plan; and 

22 ‘‘(iii) is dispensed to an individual 

23 who is in the original gap in coverage. 

24 ‘‘(B) QUALIFYING ENROLLEE.—The term 

25 ‘qualifying enrollee’ means an individual enVerDate Nov 24 2008 00:08 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00373 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 rolled in a prescription drug plan or MA–PD 

2 plan other than such an individual who is a 

3 subsidy-eligible individual (as defined in section 

4 1860D–14(a)(3)). 

5 ‘‘(C) DRUG-COMPONENT NEGOTIATED

6 PRICE.—The term ‘drug-component negotiated 

7 price’ means, with respect to a qualifying drug, 

8 the negotiated price (as defined in subsection 

9 (d)(1)(B)), as determined without regard to any 

10 dispensing fee, of the drug under the prescrip11 tion drug plan or MA–PD plan involved. 

12 ‘‘(D) ACTUAL GAP IN COVERAGE.—The 

13 term ‘actual gap in coverage’ means the gap in 

14 prescription drug coverage that occurs between 

15 the initial coverage limit (as modified under 

16 subparagraph (B) of subsection (b)(7)) and the 

17 annual out-of-pocket threshold (as modified 

18 under subparagraph (C) of such subsection). 

19 ‘‘(E) ORIGINAL GAP IN COVERAGE.—The 

20 term ‘original in gap coverage’ means the gap 

21 in prescription drug coverage that would occur 

22 between the initial coverage limit (described in 

23 subsection (b)(3)) and the out-of-pocket thresh24 old (as defined in subsection (b)(4))(B) if sub25 section (b)(7) did not apply.’’. 


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1 SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS2 SION OF CLAIMS BY PHARMACIES LOCATED 

3 IN OR CONTRACTING WITH LONG-TERM CARE 

4 FACILITIES. 

5 (a) PART D SUBMISSION.—Section 1860D–12(b) of 

6 the Social Security Act (42 U.S.C. 1395w–112(b)), as 

7 amended by section 172(a)(1) of Public Law 110–275, is 

8 amended by striking paragraph (5) and redesignating 

9 paragraph (6) and paragraph (7), as added by section 

10 1181(b)(2), as paragraph (5) and paragraph (6), respec11 tively. 

12 (b) SUBMISSION TO MA–PD PLANS.—Section 

13 1857(f)(3) of the Social Security Act (42 U.S.C. 1395w– 

14 27(f)(3)), as added by section 171(b) of Public Law 110– 

15 275 and amended by section 172(a)(2) of such Public 

16 Law, is amended by striking subparagraph (B) and redes17 ignating subparagraph (C) as subparagraph (B). 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply for contract years beginning with 

20 2010. 


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1 SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS2 SISTANCE PROGRAMS AND INDIAN HEALTH 

3 SERVICE IN PROVIDING PRESCRIPTION 

4 DRUGS TOWARD THE ANNUAL OUT-OF-POCK5 ET THRESHOLD UNDER PART D. 

6 (a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 

7 Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 

8 amended— 

9 (1) in clause (i), by striking ‘‘and’’ at the end; 

10 (2) in clause (ii)— 

11 (A) by striking ‘‘such costs shall be treated 

12 as incurred only if’’ and inserting ‘‘subject to 

13 clause (iii), such costs shall be treated as in14 curred only if’’; 

15 (B) by striking ‘‘, under section 1860D– 

16 14, or under a State Pharmaceutical Assistance 

17 Program’’; and 

18 (C) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by inserting after clause (ii) the following 

21 new clause: 

22 ‘‘(iii) such costs shall be treated as in23 curred and shall not be considered to be 

24 reimbursed under clause (ii) if such costs 

25 are borne or paid— 

26 ‘‘(I) under section 1860D–14; 


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1 ‘‘(II) under a State Pharma2 ceutical Assistance Program; 

3 ‘‘(III) by the Indian Health Serv4 ice, an Indian tribe or tribal organiza5 tion, or an urban Indian organization 

6 (as defined in section 4 of the Indian 

7 Health Care Improvement Act); or 

8 ‘‘(IV) under an AIDS Drug As9 sistance Program under part B of 

10 title XXVI of the Public Health Serv11 ice Act.’’. 

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

13 subsection (a) shall apply to costs incurred on or after 

14 January 1, 2011. 

15 SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLL16 MENT FOR FORMULARY CHANGES THAT AD17 VERSELY IMPACT AN ENROLLEE. 

18 (a) IN GENERAL.—Section 1860D–1(b)(3) of the So19 cial Security Act (42 U.S.C. 1395w–101(b)(3)) is amend20 ed by adding at the end the following new subparagraph: 

21 ‘‘(F) CHANGE IN FORMULARY RESULTING

22 IN INCREASE IN COST-SHARING.— 

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in clause (ii), in the case of an indi25 vidual enrolled in a prescription drug plan 


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1 (or MA–PD plan) who has been prescribed 

2 and is using a covered part D drug while 

3 so enrolled, if the formulary of the plan is 

4 materially changed (other than at the end 

5 of a contract year) so to reduce the cov6 erage (or increase the cost-sharing) of the 

7 drug under the plan. 

8 ‘‘(ii) EXCEPTION.—Clause (i) shall 

9 not apply in the case that a drug is re10 moved from the formulary of a plan be11 cause of a recall or withdrawal of the drug 

12 issued by the Food and Drug Administra13 tion, because the drug is replaced with a 

14 generic drug that is a therapeutic equiva15 lent, or because of utilization management 

16 applied to— 

17 ‘‘(I) a drug whose labeling in18 cludes a boxed warning required by 

19 the Food and Drug Administration 

20 under section 210.57(c)(1) of title 21, 

21 Code of Federal Regulations (or a 

22 successor regulation); or 

23 ‘‘(II) a drug required under sub24 section (c)(2) of section 505–1 of the 

25 Federal Food, Drug, and Cosmetic 


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1 Act to have a Risk Evaluation and 

2 Management Strategy that includes 

3 elements under subsection (f) of such 

4 section.’’. 

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

6 subsection (a) shall apply to contract years beginning on 

7 or after January 1, 2011. 

8 Subtitle F—Medicare Rural Access 

9 Protections 

10 SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. 

11 (a) ADDITIONAL TELEHEALTH SITE.— 

12 (1) IN GENERAL.—Paragraph (4)(C)(ii) of sec13 tion 1834(m) of the Social Security Act (42 U.S.C. 

14 1395m(m)) is amended by adding at the end the fol15 lowing new subclause: 

16 ‘‘(IX) A renal dialysis facility.’’ 

17 (2) EFFECTIVE DATE.—The amendment made 

18 by paragraph (1) shall apply to services furnished on 

19 or after January 1, 2011. 

20 (b) TELEHEALTH ADVISORY COMMITTEE.— 

21 (1) ESTABLISHMENT.—Section 1868 of the So22 cial Security Act (42 U.S.C. 1395ee) is amended— 

23 (A) in the heading, by adding at the end 

24 the following: ‘‘TELEHEALTH ADVISORY COM25 MITTEE’’; and 


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

2 subsection: 

3 ‘‘(c) TELEHEALTH ADVISORY COMMITTEE.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall appoint 

5 a Telehealth Advisory Committee (in this subsection 

6 referred to as the ‘Advisory Committee’) to make 

7 recommendations to the Secretary on policies of the 

8 Centers for Medicare & Medicaid Services regarding 

9 telehealth services as established under section 

10 1834(m), including the appropriate addition or dele11 tion of services (and HCPCS codes) to those speci12 fied in paragraphs (4)(F)(i) and (4)(F)(ii) of such 

13 section and for authorized payment under paragraph 

14 (1) of such section. 

15 ‘‘(2) MEMBERSHIP; TERMS.— 

16 ‘‘(A) MEMBERSHIP.— 

17 ‘‘(i) IN GENERAL.—The Advisory 

18 Committee shall be composed of 9 mem19 bers, to be appointed by the Secretary, of 

20 whom— 

21 ‘‘(I) 5 shall be practicing physi22 cians; 

23 ‘‘(II) 2 shall be practicing non24 physician health care practitioners; 

25 and 


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1 ‘‘(III) 2 shall be administrators 

2 of telehealth programs. 

3 ‘‘(ii) REQUIREMENTS FOR APPOINT4 ING MEMBERS.—In appointing members of 

5 the Advisory Committee, the Secretary 

6 shall— 

7 ‘‘(I) ensure that each member 

8 has prior experience with the practice 

9 of telemedicine or telehealth; 

10 ‘‘(II) give preference to individ11 uals who are currently providing tele12 medicine or telehealth services or who 

13 are involved in telemedicine or tele14 health programs; 

15 ‘‘(III) ensure that the member16 ship of the Advisory Committee rep17 resents a balance of specialties and 

18 geographic regions; and 

19 ‘‘(IV) take into account the rec20 ommendations of stakeholders. 

21 ‘‘(B) TERMS.—The members of the Advi22 sory Committee shall serve for such term as the 

23 Secretary may specify. 

24 ‘‘(C) CONFLICTS OF INTEREST.—An advi25 sory committee member may not participate 


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1 with respect to a particular matter considered 

2 in an advisory committee meeting if such mem3 ber (or an immediate family member of such 

4 member) has a financial interest that could be 

5 affected by the advice given to the Secretary 

6 with respect to such matter. 

7 ‘‘(3) MEETINGS.—The Advisory Committee 

8 shall meet twice each calendar year and at such 

9 other times as the Secretary may provide. 

10 ‘‘(4) PERMANENT COMMITTEE.—Section 14 of 

11 the Federal Advisory Committee Act (5 U.S.C. 

12 App.) shall not apply to the Advisory Committee.’’ 

13 (2) FOLLOWING RECOMMENDATIONS.—Section 

14 1834(m)(4)(F) of such Act (42 U.S.C. 

15 1395m(m)(4)(F)) is amended by adding at the end 

16 the following new clause: 

17 ‘‘(iii) RECOMMENDATIONS OF THE

18 TELEHEALTH ADVISORY COMMITTEE.—In 

19 making determinations under clauses (i) 

20 and (ii), the Secretary shall take into ac21 count the recommendations of the Tele22 health Advisory Committee (established 

23 under section 1868(c)) when adding or de24 leting services (and HCPCS codes) and in 

25 establishing policies of the Centers for 


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1 Medicare & Medicaid Services regarding 

2 the delivery of telehealth services. If the 

3 Secretary does not implement such a rec4 ommendation, the Secretary shall publish 

5 in the Federal Register a statement re6 garding the reason such recommendation 

7 was not implemented.’’ 

8 (3) WAIVER OF ADMINISTRATIVE LIMITA9 TION.—The Secretary of Health and Human Serv10 ices shall establish the Telehealth Advisory Com11 mittee under the amendment made by paragraph (1) 

12 notwithstanding any limitation that may apply to 

13 the number of advisory committees that may be es14 tablished (within the Department of Health and 

15 Human Services or otherwise). 

16 SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS 

17 PROVISION. 

18 Section 1833(t)(7)(D)(i) of the Social Security Act 

19 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

20 (1) in subclause (II)— 

21 (A) in the first sentence, by striking 

22 ‘‘‘2010’’and inserting ‘‘2012’’; and 

23 (B) in the second sentence, by striking ‘‘or 

24 2009’’ and inserting ‘‘, 2009, 2010, or 2011’’; 

25 and 


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1 (2) in subclause (III), by striking ‘‘January 1, 

2 2010’’ and inserting ‘‘January 1, 2012’’. 

3 SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS4 SIFICATIONS. 

5 Subsection (a) of section 106 of division B of the Tax 

6 Relief and Health Care Act of 2006 (42 U.S.C. 1395 

7 note), as amended by section 117 of the Medicare, Med8 icaid, and SCHIP Extension Act of 2007 (Public Law 

9 110–173) and section 124 of the Medicare Improvements 

10 for Patients and Providers Act of 2008 (Public Law 110– 

11 275), is amended by striking ‘‘September 30, 2009’’ and 

12 inserting ‘‘September 30, 2011’’. 

13 SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK. 

14 Section 1848(e)(1)(E) of the Social Security Act (42 

15 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before 

16 January 1, 2010’’ and inserting ‘‘before January 1, 

17 2012’’. 

18 SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM19 PONENT OF CERTAIN PHYSICIAN PATHOL20 OGY SERVICES. 

21 Section 542(c) of the Medicare, Medicaid, and 

22 SCHIP Benefits Improvement and Protection Act of 2000 

23 (as enacted into law by section 1(a)(6) of Public Law 106– 

24 554), as amended by section 732 of the Medicare Prescrip25 tion Drug, Improvement, and Modernization Act of 2003 


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1 (42 U.S.C. 1395w–4 note), section 104 of division B of 

2 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 

3 1395w–4 note), section 104 of the Medicare, Medicaid, 

4 and SCHIP Extension Act of 2007 (Public Law 110– 

5 173), and section 136 of the Medicare Improvements for 

6 Patients and Providers Act of 1008 (Public Law 110– 

7 275), is amended by striking ‘‘and 2009’’ and inserting 

8 ‘‘2009, 2010, and 2011’’. 

9 SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS. 

10 (a) IN GENERAL.—Section 1834(l)(13) of the Social 

11 Security Act (42 U.S.C. 1395m(l)(13)) is amended— 

12 (1) in subparagraph (A)— 

13 (A) in the matter preceding clause (i), by 

14 striking ‘‘before January 1, 2010’’ and insert15 ing ‘‘before January 1, 2012’’; and 

16 (B) in each of clauses (i) and (ii), by strik17 ing ‘‘before January 1, 2010’’ and inserting 

18 ‘‘before January 1, 2012’’. 

19 (b) AIR AMBULANCE IMPROVEMENTS.—Section 

20 146(b)(1) of the Medicare Improvements for Patients and 

21 Providers Act of 2008 (Public Law 110–275) is amended 

22 by striking ‘‘ending on December 31, 2009’’ and inserting 

23 ‘‘ending on December 31, 2011’’. 


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1 TITLE II—MEDICARE 

2 BENEFICIARY IMPROVEMENTS 

3 Subtitle A—Improving and Simpli4 fying Financial Assistance for 

5 Low Income Medicare Bene6 ficiaries 

7 SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV8 INGS PROGRAM AND LOW-INCOME SUBSIDY 

9 PROGRAM. 

10 (a) APPLICATION OF HIGHEST LEVEL PERMITTED

11 UNDER LIS TO ALL SUBSIDY ELIGIBLE INDIVIDUALS.— 

12 (1) IN GENERAL.—Section 1860D–14(a)(1) of 

13 the Social Security Act (42 U.S.C. 1395w– 

14 114(a)(1)) is amended in the matter before subpara15 graph (A), by inserting ‘‘(or, beginning with 2012, 

16 paragraph (3)(E))’’ after ‘‘paragraph (3)(D)’’. 

17 (2) ANNUAL INCREASE IN LIS RESOURCE

18 TEST.—Section 1860D–14(a)(3)(E)(i) of such Act 

19 (42 U.S.C. 1395w–114(a)(3)(E)(i)) is amended— 

20 (A) by striking ‘‘and’’ at the end of sub21 clause (I); 

22 (B) in subclause (II), by inserting ‘‘(before 

23 2012)’’ after ‘‘subsequent year’’; 

24 (C) by striking the period at the end of 

25 subclause (II) and inserting a semicolon; 


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1 (D) by inserting after subclause (II) the 

2 following new subclauses: 

3 ‘‘(III) for 2012, $17,000 (or 

4 $34,000 in the case of the combined 

5 value of the individual’s assets or re6 sources and the assets or resources of 

7 the individual’s spouse); and 

8 ‘‘(IV) for a subsequent year, the 

9 dollar amounts specified in this sub10 clause (or subclause (III)) for the pre11 vious year increased by the annual 

12 percentage increase in the consumer 

13 price index (all items; U.S. city aver14 age) as of September of such previous 

15 year.’’; and 

16 (E) in the last sentence, by inserting ‘‘or 

17 (IV)’’ after ‘‘subclause (II)’’. 

18 (3) APPLICATION OF LIS TEST UNDER MEDI19 CARE SAVINGS PROGRAM.—Section 1905(p)(1)(C) of 

20 such Act (42 U.S.C. 1396d(p)(1)(C)) is amended— 

21 (A) by striking ‘‘effective beginning with 

22 January 1, 2010’’ and inserting ‘‘effective for 

23 the period beginning with January 1, 2010, and 

24 ending with December 31, 2011’’; and 


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1 (B) by inserting before the period at the 

2 end the following: ‘‘or, effective beginning with 

3 January 1, 2012, whose resources (as so deter4 mined) do not exceed the maximum resource 

5 level applied for the year under subparagraph 

6 (E) of section 1860D–14(a)(3) (determined 

7 without regard to the life insurance policy ex8 clusion provided under subparagraph (G) of 

9 such section) applicable to an individual or to 

10 the individual and the individual’s spouse (as 

11 the case may be)’’. 

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

13 subsection (a) shall apply to eligibility determinations for 

14 income-related subsidies and medicare cost-sharing fur15 nished for periods beginning on or after January 1, 2012. 

16 SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR 

17 CERTAIN NON-INSTITUTIONALIZED FULL18 BENEFIT DUAL ELIGIBLE INDIVIDUALS. 

19 (a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 

20 the Social Security Act (42 U.S.C. 1395w– 

21 114(a)(1)(D)(i)) is amended— 

22 (1) by striking ‘‘INSTITUTIONALIZED INDIVID23 UALS.—In’’ and inserting ‘‘ELIMINATION OF COST24 SHARING FOR CERTAIN FULL-BENEFIT DUAL ELIGI25 BLE INDIVIDUALS.— 


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1 ‘‘(I) INSTITUTIONALIZED INDI2 VIDUALS.—In’’; and 

3 (2) by adding at the end the following new sub4 clause: 

5 ‘‘(II) CERTAIN OTHER INDIVID6 UALS.—In the case of an individual 

7 who is a full-benefit dual eligible indi8 vidual and with respect to whom there 

9 has been a determination that but for 

10 the provision of home and community 

11 based care (whether under section 

12 1915, 1932, or under a waiver under 

13 section 1115) the individual would re14 quire the level of care provided in a 

15 hospital or a nursing facility or inter16 mediate care facility for the mentally 

17 retarded the cost of which could be re18 imbursed under the State plan under 

19 title XIX, the elimination of any bene20 ficiary coinsurance described in sec21 tion 1860D–2(b)(2) (for all amounts 

22 through the total amount of expendi23 tures at which benefits are available 

24 under section 1860D–2(b)(4)).’’. 


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

2 subsection (a) shall apply to drugs dispensed on or after 

3 January 1, 2011. 

4 SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT. 

5 (a) ADMINISTRATIVE VERIFICATION OF INCOME AND

6 RESOURCES UNDER THE LOW-INCOME SUBSIDY PRO7 GRAM.— 

8 (1) IN GENERAL.—Clause (iii) of section 

9 1860D–14(a)(3)(E) of the Social Security Act (42 

10 U.S.C. 1395w–114(a)(3)(E)) is amended to read as 

11 follows: 

12 ‘‘(iii) CERTIFICATION OF INCOME AND

13 RESOURCES.—For purposes of applying 

14 this section— 

15 ‘‘(I) an individual shall be per16 mitted to apply on the basis of self17 certification of income and resources; 

18 and 

19 ‘‘(II) matters attested to in the 

20 application shall be subject to appro21 priate methods of verification without 

22 the need of the individual to provide 

23 additional documentation, except in 

24 extraordinary situations as determined 

25 by the Commissioner.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall apply beginning January 1, 

3 2010. 

4 (b) DISCLOSURES TO FACILITATE IDENTIFICATION

5 OF INDIVIDUALS LIKELY TO BE INELIGIBLE FOR THE

6 LOW-INCOME ASSISTANCE UNDER THE MEDICARE PRE7 SCRIPTION DRUG PROGRAM TO ASSIST SOCIAL SECURITY

8 ADMINISTRATION’S OUTREACH TO ELIGIBLE INDIVID9 UALS.—For provision authorizing disclosure of return in10 formation to facilitate identification of individuals likely 

11 to be ineligible for low-income subsidies under Medicare 

12 prescription drug program, see section 1801. 

13 SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIM14 BURSEMENTS FOR RETROACTIVE LOW IN15 COME SUBSIDY ENROLLMENT. 

16 (a) IN GENERAL.—In the case of a retroactive LIS 

17 enrollment beneficiary who is enrolled under a prescription 

18 drug plan under part D of title XVIII of the Social Secu19 rity Act (or an MA–PD plan under part C of such title), 

20 the beneficiary (or any eligible third party) is entitled to 

21 reimbursement by the plan for covered drug costs incurred 

22 by the beneficiary during the retroactive coverage period 

23 of the beneficiary in accordance with subsection (b) and 

24 in the case of such a beneficiary described in subsection 

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1 cally by the plan upon receipt of appropriate notice the 

2 beneficiary is eligible for assistance described in such sub3 section (c)(4)(A)(i) without further information required 

4 to be filed with the plan by the beneficiary. 

5 (b) ADMINISTRATIVE REQUIREMENTS RELATING TO

6 REIMBURSEMENTS.— 

7 (1) LINE-ITEM DESCRIPTION.—Each reimburse8 ment made by a prescription drug plan or MA–PD 

9 plan under subsection (a) shall include a line-item 

10 description of the items for which the reimbursement 

11 is made. 

12 (2) TIMING OF REIMBURSEMENTS.—A prescrip13 tion drug plan or MA–PD plan must make a reim14 bursement under subsection (a) to a retroactive LIS 

15 enrollment beneficiary, with respect to a claim, not 

16 later than 45 days after— 

17 (A) in the case of a beneficiary described 

18 in subsection (c)(4)(A)(i), the date on which the 

19 plan receives notice from the Secretary that the 

20 beneficiary is eligible for assistance described in 

21 such subsection; or 

22 (B) in the case of a beneficiary described 

23 in subsection (c)(4)(A)(ii), the date on which 

24 the beneficiary files the claim with the plan. 


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1 (3) REPORTING REQUIREMENT.—For each 

2 month beginning with January 2011, each prescrip3 tion drug plan and each MA–PD plan shall report 

4 to the Secretary the following: 

5 (A) The number of claims the plan has re6 adjudicated during the month due to a bene7 ficiary becoming retroactively eligible for sub8 sidies available under section 1860D–14 of the 

9 Social Security Act. 

10 (B) The total value of the readjudicated 

11 claim amount for the month. 

12 (C) The Medicare Health Insurance Claims 

13 Number of beneficiaries for whom claims were 

14 readjudicated. 

15 (D) For the claims described in subpara16 graphs (A) and (B), an attestation to the Ad17 ministrator of the Centers for Medicare & Med18 icaid Services of the total amount of reimburse19 ment the plan has provided to beneficiaries for 

20 premiums and cost-sharing that the beneficiary 

21 overpaid for which the plan received payment 

22 from the Centers for Medicare & Medicaid Serv23 ices. 

24 (c) DEFINITIONS.—For purposes of this section: 


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1 (1) COVERED DRUG COSTS.—The term ‘‘cov2 ered drug costs’’ means, with respect to a retroactive 

3 LIS enrollment beneficiary enrolled under a pre4 scription drug plan under part D of title XVIII of 

5 the Social Security Act (or an MA–PD plan under 

6 part C of such title), the amount by which— 

7 (A) the costs incurred by such beneficiary 

8 during the retroactive coverage period of the 

9 beneficiary for covered part D drugs, premiums, 

10 and cost-sharing under such title; exceeds 

11 (B) such costs that would have been in12 curred by such beneficiary during such period if 

13 the beneficiary had been both enrolled in the 

14 plan and recognized by such plan as qualified 

15 during such period for the low income subsidy 

16 under section 1860D–14 of the Social Security 

17 Act to which the individual is entitled. 

18 (2) ELIGIBLE THIRD PARTY.—The term ‘‘eligi19 ble third party’’ means, with respect to a retroactive 

20 LIS enrollment beneficiary, an organization or other 

21 third party that is owed payment on behalf of such 

22 beneficiary for covered drug costs incurred by such 

23 beneficiary during the retroactive coverage period of 

24 such beneficiary. 


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1 (3) RETROACTIVE COVERAGE PERIOD.—The 

2 term ‘‘retroactive coverage period’’ means— 

3 (A) with respect to a retroactive LIS en4 rollment beneficiary described in paragraph 

5 (4)(A)(i), the period— 

6 (i) beginning on the effective date of 

7 the assistance described in such paragraph 

8 for which the individual is eligible; and 

9 (ii) ending on the date the plan effec10 tuates the status of such individual as so 

11 eligible; and 

12 (B) with respect to a retroactive LIS en13 rollment beneficiary described in paragraph 

14 (4)(A)(ii), the period— 

15 (i) beginning on the date the indi16 vidual is both entitled to benefits under 

17 part A, or enrolled under part B, of title 

18 XVIII of the Social Security Act and eligi19 ble for medical assistance under a State 

20 plan under title XIX of such Act; and 

21 (ii) ending on the date the plan effec22 tuates the status of such individual as a 

23 full-benefit dual eligible individual (as de24 fined in section 1935(c)(6) of such Act). 


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1 (4) RETROACTIVE LIS ENROLLMENT BENE2 FICIARY.— 

3 (A) IN GENERAL.—The term ‘‘retroactive 

4 LIS enrollment beneficiary’’ means an indi5 vidual who— 

6 (i) is enrolled in a prescription drug 

7 plan under part D of title XVIII of the So8 cial Security Act (or an MA–PD plan 

9 under part C of such title) and subse10 quently becomes eligible as a full-benefit 

11 dual eligible individual (as defined in sec12 tion 1935(c)(6) of such Act), an individual 

13 receiving a low-income subsidy under sec14 tion 1860D–14 of such Act, an individual 

15 receiving assistance under the Medicare 

16 Savings Program implemented under 

17 clauses (i), (iii), and (iv) of section 

18 1902(a)(10)(E) of such Act, or an indi19 vidual receiving assistance under the sup20 plemental security income program under 

21 section 1611 of such Act; or 

22 (ii) subject to subparagraph (B)(i), is 

23 a full-benefit dual eligible individual (as 

24 defined in section 1935(c)(6) of such Act) 

25 who is automatically enrolled in such a 


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1 plan under section 1860D–1(b)(1)(C) of 

2 such Act. 

3 (B) EXCEPTION FOR BENEFICIARIES EN4 ROLLED IN RFP PLAN.— 

5 (i) IN GENERAL.—In no case shall an 

6 individual described in subparagraph 

7 (A)(ii) include an individual who is en8 rolled, pursuant to a RFP contract de9 scribed in clause (ii), in a prescription 

10 drug plan offered by the sponsor of such 

11 plan awarded such contract. 

12 (ii) RFP CONTRACT DESCRIBED.— 

13 The RFP contract described in this section 

14 is a contract entered into between the Sec15 retary and a sponsor of a prescription drug 

16 plan pursuant to the Centers for Medicare 

17 & Medicaid Services’ request for proposals 

18 issued on February 17, 2009, relating to 

19 Medicare part D retroactive coverage for 

20 certain low income beneficiaries, or a simi21 lar subsequent request for proposals. 

22 SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT. 

23 (a) IN GENERAL.—Section 1860D–1(b)(1)(C) of the 

24 Social Security Act (42 U.S.C. 1395w–101(b)(1)(C)) is 

25 amended by adding after ‘‘PDP region’’ the following: ‘‘or 


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1 through use of an intelligent assignment process that is 

2 designed to maximize the access of such individual to nec3 essary prescription drugs while minimizing costs to such 

4 individual and to the program under this part to the great5 est extent possible. In the case the Secretary enrolls such 

6 individuals through use of an intelligent assignment proc7 ess, such process shall take into account the extent to 

8 which prescription drugs necessary for the individual are 

9 covered in the case of a PDP sponsor of a prescription 

10 drug plan that uses a formulary, the use of prior author11 ization or other restrictions on access to coverage of such 

12 prescription drugs by such a sponsor, and the overall qual13 ity of a prescription drug plan as measured by quality rat14 ings established by the Secretary.’’ 

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

16 subsection (a) shall take effect for contract years begin17 ning with 2012. 

18 SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC 

19 ENROLLMENT PROCESS FOR CERTAIN SUB20 SIDY ELIGIBLE INDIVIDUALS. 

21 (a) SPECIAL ENROLLMENT PERIOD.—Section 

22 1860D–1(b)(3)(D) of the Social Security Act (42 U.S.C. 

23 1395w–101(b)(3)(D)) is amended to read as follows: 

24 ‘‘(D) SUBSIDY ELIGIBLE INDIVIDUALS.— 

25 In the case of an individual (as determined by 


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1 the Secretary) who is determined under sub2 paragraph (B) of section 1860D–14(a)(3) to be 

3 a subsidy eligible individual.’’. 

4 (b) AUTOMATIC ENROLLMENT.—Section 1860D– 

5 1(b)(1) of the Social Security Act (42 U.S.C. 1395w– 

6 101(b)(1)) is amended by adding at the end the following 

7 new subparagraph: 

8 ‘‘(D) SPECIAL RULE FOR SUBSIDY ELIGI9 BLE INDIVIDUALS.—The process established 

10 under subparagraph (A) shall include, in the 

11 case of an individual described in section 

12 1860D–1(b)(3)(D) who fails to enroll in a pre13 scription drug plan or an MA–PD plan during 

14 the special enrollment established under such 

15 section applicable to such individual, the appli16 cation of the assignment process described in 

17 subparagraph (C) to such individual in the 

18 same manner as such assignment process ap19 plies to a part D eligible individual described in 

20 such subparagraph (C). Nothing in the previous 

21 sentence shall prevent an individual described in 

22 such sentence from declining enrollment in a 

23 plan determined appropriate by the Secretary 

24 (or in the program under this part) or from 

25 changing such enrollment.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to subsidy determinations made 

3 for months beginning with January 2011. 

4 SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO RE5 BATE IN CALCULATION OF LOW INCOME SUB6 SIDY BENCHMARK. 

7 (a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) 

8 of the Social Security Act (42 U.S.C. 1395w– 

9 114(b)(2)(B)(iii)) is amended by inserting before the pe10 riod the following: ‘‘before the application of the monthly 

11 rebate computed under section 1854(b)(1)(C)(i) for that 

12 plan and year involved’’. 

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

14 subsection (a) shall apply to subsidy determinations made 

15 for months beginning with January 2011. 

16 Subtitle B—Reducing Health 

17 Disparities 

18 SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN 

19 MEDICARE. 

20 (a) ENSURING EFFECTIVE COMMUNICATION BY THE

21 CENTERS FOR MEDICARE & MEDICAID SERVICES.— 

22 (1) STUDY ON MEDICARE PAYMENTS FOR LAN23 GUAGE SERVICES.—The Secretary of Health and 

24 Human Services shall conduct a study that examines 

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1 lize, offer, or make available language services for 

2 beneficiaries who are limited English proficient and 

3 ways that Medicare should develop payment systems 

4 for language services. 

5 (2) ANALYSES.—The study shall include an 

6 analysis of each of the following: 

7 (A) How to develop and structure appro8 priate payment systems for language services 

9 for all Medicare service providers. 

10 (B) The feasibility of adopting a payment 

11 methodology for on-site interpreters, including 

12 interpreters who work as independent contrac13 tors and interpreters who work for agencies 

14 that provide on-site interpretation, pursuant to 

15 which such interpreters could directly bill Medi16 care for services provided in support of physi17 cian office services for an LEP Medicare pa18 tient. 

19 (C) The feasibility of Medicare contracting 

20 directly with agencies that provide off-site inter21 pretation including telephonic and video inter22 pretation pursuant to which such contractors 

23 could directly bill Medicare for the services pro24 vided in support of physician office services for 

25 an LEP Medicare patient. 


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1 (D) The feasibility of modifying the exist2 ing Medicare resource-based relative value scale 

3 (RBRVS) by using adjustments (such as multi4 pliers or add-ons) when a patient is LEP. 

5 (E) How each of options described in a 

6 previous paragraph would be funded and how 

7 such funding would affect physician payments, 

8 a physician’s practice, and beneficiary cost9 sharing. 

10 (F) The extent to which providers under 

11 parts A and B of title XVIII of the Social Secu12 rity Act, MA organizations offering Medicare 

13 Advantage plans under part C of such title and 

14 PDP sponsors of a prescription drug plan 

15 under part D of such title utilize, offer, or make 

16 available language services for beneficiaries with 

17 limited English proficiency. 

18 (G) The nature and type of language serv19 ices provided by States under title XIX of the 

20 Social Security Act and the extent to which 

21 such services could be utilized by beneficiaries 

22 and providers under title XVIII of such Act. 

23 (3) VARIATION IN PAYMENT SYSTEM DE24 SCRIBED.—The payment systems described in para25 graph (2)(A) may allow variations based upon types 


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1 of service providers, available delivery methods, and 

2 costs for providing language services including such 

3 factors as— 

4 (A) the type of language services provided 

5 (such as provision of health care or health care 

6 related services directly in a non-English lan7 guage by a bilingual provider or use of an inter8 preter); 

9 (B) type of interpretation services provided 

10 (such as in-person, telephonic, video interpreta11 tion); 

12 (C) the methods and costs of providing 

13 language services (including the costs of pro14 viding language services with internal staff or 

15 through contract with external independent con16 tractors or agencies, or both); 

17 (D) providing services for languages not 

18 frequently encountered in the United States; 

19 and 

20 (E) providing services in rural areas. 

21 (4) REPORT.—The Secretary shall submit a re22 port on the study conducted under subsection (a) to 

23 appropriate committees of Congress not later than 

24 12 months after the date of the enactment of this 

25 Act. 


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1 (5) EXEMPTION FROM PAPERWORK REDUCTION

2 ACT.—Chapter 35 of title 44, United States Code 

3 (commonly known as the ‘‘Paperwork Reduction 

4 Act’’), shall not apply for purposes of carrying out 

5 this subsection. 

6 (6) AUTHORIZATION OF APPROPRIATIONS.— 

7 There is authorized to be appropriated to carry out 

8 this subsection such sums as are necessary. 

9 (b) HEALTH PLANS.—Section 1857(g)(1) of the So10 cial Security Act (42 U.S.C. 1395w–27(g)(1)) is amend11 ed— 

12 (1) by striking ‘‘or’’ at the end of subparagraph 

13 (F); 

14 (2) by adding ‘‘or’’ at the end of subparagraph 

15 (G); and 

16 (3) by inserting after subparagraph (G) the fol17 lowing new subparagraph: 

18 ‘‘(H) fails substantially to provide lan19 guage services to limited English proficient 

20 beneficiaries enrolled in the plan that are re21 quired under law;’’. 


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1 SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR 

2 MEDICARE BENEFICIARIES WITH LIMITED 

3 ENGLISH PROFICIENCY BY PROVIDING REIM4 BURSEMENT FOR CULTURALLY AND LINGUIS5 TICALLY APPROPRIATE SERVICES. 

6 (a) IN GENERAL.—Not later than 6 months after the 

7 date of the completion of the study described in section 

8 1221(a), the Secretary, acting through the Centers for 

9 Medicare & Medicaid Services, shall carry out a dem10 onstration program under which the Secretary shall award 

11 not fewer than 24 3-year grants to eligible Medicare serv12 ice providers (as described in subsection (b)(1)) to improve 

13 effective communication between such providers and Medi14 care beneficiaries who are living in communities where ra15 cial and ethnic minorities, including populations that face 

16 language barriers, are underserved with respect to such 

17 services. In designing and carrying out the demonstration 

18 the Secretary shall take into consideration the results of 

19 the study conducted under section 1221(a) and adjust, as 

20 appropriate, the distribution of grants so as to better tar21 get Medicare beneficiaries who are in the greatest need 

22 of language services. The Secretary shall not authorize a 

23 grant larger than $500,000 over three years for any grant24 ee. 

25 (b) ELIGIBILITY; PRIORITY.— 


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1 (1) ELIGIBILITY.—To be eligible to receive a 

2 grant under subsection (a) an entity shall— 

3 (A) be— 

4 (i) a provider of services under part A 

5 of title XVIII of the Social Security Act; 

6 (ii) a service provider under part B of 

7 such title; 

8 (iii) a part C organization offering a 

9 Medicare part C plan under part C of such 

10 title; or 

11 (iv) a PDP sponsor of a prescription 

12 drug plan under part D of such title; and 

13 (B) prepare and submit to the Secretary 

14 an application, at such time, in such manner, 

15 and accompanied by such additional informa16 tion as the Secretary may require. 

17 (2) PRIORITY.— 

18 (A) DISTRIBUTION.—To the extent fea19 sible, in awarding grants under this section, the 

20 Secretary shall award— 

21 (i) at least 6 grants to providers of 

22 services described in paragraph (1)(A)(i); 

23 (ii) at least 6 grants to service pro24 viders described in paragraph (1)(A)(ii); 


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1 (iii) at least 6 grants to organizations 

2 described in paragraph (1)(A)(iii); and 

3 (iv) at least 6 grants to sponsors de4 scribed in paragraph (1)(A)(iv). 

5 (B) FOR COMMUNITY ORGANIZATIONS.— 

6 The Secretary shall give priority to applicants 

7 that have developed partnerships with commu8 nity organizations or with agencies with experi9 ence in language access. 

10 (C) VARIATION IN GRANTEES.—The Sec11 retary shall also ensure that the grantees under 

12 this section represent, among other factors, 

13 variations in— 

14 (i) different types of language services 

15 provided and of service providers and orga16 nizations under parts A through D of title 

17 XVIII of the Social Security Act; 

18 (ii) languages needed and their fre19 quency of use; 

20 (iii) urban and rural settings; 

21 (iv) at least two geographic regions, 

22 as defined by the Secretary; and 

23 (v) at least two large metropolitan 

24 statistical areas with diverse populations. 

25 (c) USE OF FUNDS.— 


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1 (1) IN GENERAL.—A grantee shall use grant 

2 funds received under this section to pay for the pro3 vision of competent language services to Medicare 

4 beneficiaries who are limited English proficient. 

5 Competent interpreter services may be provided 

6 through on-site interpretation, telephonic interpreta7 tion, or video interpretation or direct provision of 

8 health care or health care related services by a bilin9 gual health care provider. A grantee may use bilin10 gual providers, staff, or contract interpreters. A 

11 grantee may use grant funds to pay for competent 

12 translation services. A grantee may use up to 10 

13 percent of the grant funds to pay for administrative 

14 costs associated with the provision of competent lan15 guage services and for reporting required under sub16 section (e). 

17 (2) ORGANIZATIONS.—Grantees that are part C 

18 organizations or PDP sponsors must ensure that 

19 their network providers receive at least 50 percent of 

20 the grant funds to pay for the provision of com21 petent language services to Medicare beneficiaries 

22 who are limited English proficient, including physi23 cians and pharmacies. 

24 (3) DETERMINATION OF PAYMENTS FOR LAN25 GUAGE SERVICES.—Payments to grantees shall be 


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1 calculated based on the estimated numbers of lim2 ited English proficient Medicare beneficiaries in a 

3 grantee’s service area utilizing— 

4 (A) data on the numbers of limited 

5 English proficient individuals who speak 

6 English less than ‘‘very well’’ from the most re7 cently available data from the Bureau of the 

8 Census or other State-based study the Sec9 retary determines likely to yield accurate data 

10 regarding the number of such individuals served 

11 by the grantee; or 

12 (B) the grantee’s own data if the grantee 

13 routinely collects data on Medicare bene14 ficiaries’ primary language in a manner deter15 mined by the Secretary to yield accurate data 

16 and such data shows greater numbers of limited 

17 English proficient individuals than the data list18 ed in subparagraph (A). 

19 (4) LIMITATIONS.— 

20 (A) REPORTING.—Payments shall only be 

21 provided under this section to grantees that re22 port their costs of providing language services 

23 as required under subsection (e) and may be 

24 modified annually at the discretion of the Sec25 retary. If a grantee fails to provide the reports 


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1 under such section for the first year of a grant, 

2 the Secretary may terminate the grant and so3 licit applications from new grantees to partici4 pate in the subsequent two years of the dem5 onstration program. 

6 (B) TYPE OF SERVICES.— 

7 (i) IN GENERAL.—Subject to clause 

8 (ii), payments shall be provided under this 

9 section only to grantees that utilize com10 petent bilingual staff or competent inter11 preter or translation services which— 

12 (I) if the grantee operates in a 

13 State that has statewide health care 

14 interpreter standards, meet the State 

15 standards currently in effect; or 

16 (II) if the grantee operates in a 

17 State that does not have statewide 

18 health care interpreter standards, uti19 lizes competent interpreters who fol20 low the National Council on Inter21 preting in Health Care’s Code of Eth22 ics and Standards of Practice. 

23 (ii) EXEMPTIONS.—The requirements 

24 of clause (i) shall not apply— 


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1 (I) in the case of a Medicare ben2 eficiary who is limited English pro3 ficient (who has been informed in the 

4 beneficiary’s primary language of the 

5 availability of free interpreter and 

6 translation services) and who requests 

7 the use of family, friends, or other 

8 persons untrained in interpretation or 

9 translation and the grantee documents 

10 the request in the beneficiary’s record; 

11 and 

12 (II) in the case of a medical 

13 emergency where the delay directly as14 sociated with obtaining a competent 

15 interpreter or translation services 

16 would jeopardize the health of the pa17 tient. 

18 Nothing in clause (ii)(II) shall be con19 strued to exempt emergency rooms or simi20 lar entities that regularly provide health 

21 care services in medical emergencies from 

22 having in place systems to provide com23 petent interpreter and translation services 

24 without undue delay. 


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1 (d) ASSURANCES.—Grantees under this section 

2 shall— 

3 (1) ensure that appropriate clinical and support 

4 staff receive ongoing education and training in lin5 guistically appropriate service delivery; 

6 (2) ensure the linguistic competence of bilingual 

7 providers; 

8 (3) offer and provide appropriate language serv9 ices at no additional charge to each patient with lim10 ited English proficiency at all points of contact, in 

11 a timely manner during all hours of operation; 

12 (4) notify Medicare beneficiaries of their right 

13 to receive language services in their primary lan14 guage; 

15 (5) post signage in the languages of the com16 monly encountered group or groups present in the 

17 service area of the organization; and 

18 (6) ensure that— 

19 (A) primary language data are collected 

20 for recipients of language services; and 

21 (B) consistent with the privacy protections 

22 provided under the regulations promulgated 

23 pursuant to section 264(c) of the Health Insur24 ance Portability and Accountability Act of 1996 

25 (42 U.S.C. 1320d–2 note), if the recipient of 


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1 language services is a minor or is incapacitated, 

2 the primary language of the parent or legal 

3 guardian is collected and utilized. 

4 (e) REPORTING REQUIREMENTS.—Grantees under 

5 this section shall provide the Secretary with reports at the 

6 conclusion of the each year of a grant under this section. 

7 Each report shall include at least the following informa8 tion: 

9 (1) The number of Medicare beneficiaries to 

10 whom language services are provided. 

11 (2) The languages of those Medicare bene12 ficiaries. 

13 (3) The types of language services provided 

14 (such as provision of services directly in non-English 

15 language by a bilingual health care provider or use 

16 of an interpreter). 

17 (4) Type of interpretation (such as in-person, 

18 telephonic, or video interpretation). 

19 (5) The methods of providing language services 

20 (such as staff or contract with external independent 

21 contractors or agencies). 

22 (6) The length of time for each interpretation 

23 encounter. 


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1 (7) The costs of providing language services 

2 (which may be actual or estimated, as determined by 

3 the Secretary). 

4 (f) NO COST SHARING.—Limited English proficient 

5 Medicare beneficiaries shall not have to pay cost-sharing 

6 or co-pays for language services provided through this 

7 demonstration program. 

8 (g) EVALUATION AND REPORT.—The Secretary shall 

9 conduct an evaluation of the demonstration program 

10 under this section and shall submit to the appropriate 

11 committees of Congress a report not later than 1 year 

12 after the completion of the program. The report shall in13 clude the following: 

14 (1) An analysis of the patient outcomes and 

15 costs of furnishing care to the limited English pro16 ficient Medicare beneficiaries participating in the 

17 project as compared to such outcomes and costs for 

18 limited English proficient Medicare beneficiaries not 

19 participating. 

20 (2) The effect of delivering culturally and lin21 guistically appropriate services on beneficiary access 

22 to care, utilization of services, efficiency and cost-ef23 fectiveness of health care delivery, patient satisfac24 tion, and select health outcomes. 


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1 (3) Recommendations, if any, regarding the ex2 tension of such project to the entire Medicare pro3 gram. 

4 (h) GENERAL PROVISIONS.—Nothing in this section 

5 shall be construed to limit otherwise existing obligations 

6 of recipients of Federal financial assistance under title VI 

7 of the Civil Rights Act of 1964 (42 U.S.C. 2000(d) et 

8 seq.) or any other statute. 

9 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this section 

11 $16,000,000 for each fiscal year of the demonstration pro12 gram. 

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

14 SERVICES. 

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

16 Human Services shall enter into an arrangement with the 

17 Institute of Medicine under which the Institute will pre18 pare and publish, not later than 3 years after the date 

19 of the enactment of this Act, a report on the impact of 

20 language access services on the health and health care of 

21 limited English proficient populations. 

22 (b) CONTENTS.—Such report shall include— 

23 (1) recommendations on the development and 

24 implementation of policies and practices by health 


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1 care organizations and providers for limited English 

2 proficient patient populations; 

3 (2) a description of the effect of providing lan4 guage access services on quality of health care and 

5 access to care and reduced medical error; and 

6 (3) a description of the costs associated with or 

7 savings related to provision of language access serv8 ices. 

9 SEC. 1224. DEFINITIONS. 

10 In this subtitle: 

11 (1) BILINGUAL.—The term ‘‘bilingual’’ with re12 spect to an individual means a person who has suffi13 cient degree of proficiency in two languages and can 

14 ensure effective communication can occur in both 

15 languages. 

16 (2) COMPETENT INTERPRETER SERVICES.—The 

17 term ‘‘competent interpreter services’’ means a 

18 trans-language rendition of a spoken message in 

19 which the interpreter comprehends the source lan20 guage and can speak comprehensively in the target 

21 language to convey the meaning intended in the 

22 source language. The interpreter knows health and 

23 health-related terminology and provides accurate in24 terpretations by choosing equivalent expressions that 

25 convey the best matching and meaning to the source 


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1 language and captures, to the greatest possible ex2 tent, all nuances intended in the source message. 

3 (3) COMPETENT TRANSLATION SERVICES.—The 

4 term ‘‘competent translation services’’ means a 

5 trans-language rendition of a written document in 

6 which the translator comprehends the source lan7 guage and can write comprehensively in the target 

8 language to convey the meaning intended in the 

9 source language. The translator knows health and 

10 health-related terminology and provides accurate 

11 translations by choosing equivalent expressions that 

12 convey the best matching and meaning to the source 

13 language and captures, to the greatest possible ex14 tent, all nuances intended in the source document. 

15 (4) EFFECTIVE COMMUNICATION.—The term 

16 ‘‘effective communication’’ means an exchange of in17 formation between the provider of health care or 

18 health care-related services and the limited English 

19 proficient recipient of such services that enables lim20 ited English proficient individuals to access, under21 stand, and benefit from health care or health care22 related services. 

23 (5) INTERPRETING/INTERPRETATION.—The 

24 terms ‘‘interpreting’’ and ‘‘interpretation’’ mean the 


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1 transmission of a spoken message from one language 

2 into another, faithfully, accurately, and objectively. 

3 (6) HEALTH CARE SERVICES.—The term 

4 ‘‘health care services’’ means services that address 

5 physical as well as mental health conditions in all 

6 care settings. 

7 (7) HEALTH CARE-RELATED SERVICES.—The 

8 term ‘‘health care-related services’’ means human or 

9 social services programs or activities that provide ac10 cess, referrals or links to health care. 

11 (8) LANGUAGE ACCESS.—The term ‘‘language 

12 access’’ means the provision of language services to 

13 an LEP individual designed to enhance that individ14 ual’s access to, understanding of or benefit from 

15 health care or health care-related services. 

16 (9) LANGUAGE SERVICES.—The term ‘‘lan17 guage services’’ means provision of health care serv18 ices directly in a non-English language, interpreta19 tion, translation, and non-English signage. 

20 (10) LIMITED ENGLISH PROFICIENT.—The 

21 term ‘‘limited English proficient’’ or ‘‘LEP’’ with re22 spect to an individual means an individual who 

23 speaks a primary language other than English and 

24 who cannot speak, read, write or understand the 

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1 vidual to effectively communicate with clinical or 

2 nonclinical staff at an entity providing health care or 

3 health care related services. 

4 (11) MEDICARE BENEFICIARY.—The term 

5 ‘‘Medicare beneficiary’’ means an individual entitled 

6 to benefits under part A of title XVIII of the Social 

7 Security Act or enrolled under part B of such title. 

8 (12) MEDICARE PROGRAM.—The term ‘‘Medi9 care program’’ means the programs under parts A 

10 through D of title XVIII of the Social Security Act. 

11 (13) SERVICE PROVIDER.—The term ‘‘service 

12 provider’’ includes all suppliers, providers of services, 

13 or entities under contract to provide coverage, items 

14 or services under any part of title XVIII of the So15 cial Security Act. 

16 Subtitle C—Miscellaneous 

17 Improvements 

18 SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS 

19 PROCESS. 

20 Section 1833(g)(5) of the Social Security Act (42 

21 U.S.C. 1395l(g)(5)), as amended by section 141 of the 

22 Medicare Improvements for Patients and Providers Act of 

23 2008 (Public Law 110–275), is amended by striking ‘‘De24 cember 31, 2009’’ and inserting ‘‘December 31, 2011’’. 


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1 SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNO2 SUPPRESSIVE DRUGS FOR KIDNEY TRANS3 PLANT PATIENTS AND OTHER RENAL DIALY4 SIS PROVISIONS. 

5 (a) PROVISION OF APPROPRIATE COVERAGE OF IM6 MUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE PRO7 GRAM FOR KIDNEY TRANSPLANT RECIPIENTS.— 

8 (1) CONTINUED ENTITLEMENT TO IMMUNO9 SUPPRESSIVE DRUGS.— 

10 (A) KIDNEY TRANSPLANT RECIPIENTS.— 

11 Section 226A(b)(2) of the Social Security Act 

12 (42 U.S.C. 426–1(b)(2)) is amended by insert13 ing ‘‘(except for coverage of immunosuppressive 

14 drugs under section 1861(s)(2)(J))’’ before ‘‘, 

15 with the thirty-sixth month’’. 

16 (B) APPLICATION.—Section 1836 of such 

17 Act (42 U.S.C. 1395o) is amended— 

18 (i) by striking ‘‘Every individual who’’ 

19 and inserting ‘‘(a) IN GENERAL.—Every 

20 individual who’’; and 

21 (ii) by adding at the end the following 

22 new subsection: 

23 ‘‘(b) SPECIAL RULES APPLICABLE TO INDIVIDUALS

24 ONLY ELIGIBLE FOR COVERAGE OF IMMUNOSUPPRESSIVE

25 DRUGS.— 


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1 ‘‘(1) IN GENERAL.—In the case of an individual 

2 whose eligibility for benefits under this title has 

3 ended on or after January 1, 2012, except for the 

4 coverage of immunosuppressive drugs by reason of 

5 section 226A(b)(2), the following rules shall apply: 

6 ‘‘(A) The individual shall be deemed to be 

7 enrolled under this part for purposes of receiv8 ing coverage of such drugs. 

9 ‘‘(B) The individual shall be responsible 

10 for providing for payment of the portion of the 

11 premium under section 1839 which is not cov12 ered under the Medicare savings program (as 

13 defined in section 1144(c)(7)) in order to re14 ceive such coverage. 

15 ‘‘(C) The provision of such drugs shall be 

16 subject to the application of— 

17 ‘‘(i) the deductible under section 

18 1833(b); and 

19 ‘‘(ii) the coinsurance amount applica20 ble for such drugs (as determined under 

21 this part). 

22 ‘‘(D) If the individual is an inpatient of a 

23 hospital or other entity, the individual is enti24 tled to receive coverage of such drugs under 

25 this part. 


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1 ‘‘(2) ESTABLISHMENT OF PROCEDURES IN

2 ORDER TO IMPLEMENT COVERAGE.—The Secretary 

3 shall establish procedures for— 

4 ‘‘(A) identifying individuals that are enti5 tled to coverage of immunosuppressive drugs by 

6 reason of section 226A(b)(2); and 

7 ‘‘(B) distinguishing such individuals from 

8 individuals that are enrolled under this part for 

9 the complete package of benefits under this 

10 part.’’. 

11 (C) TECHNICAL AMENDMENT TO CORRECT

12 DUPLICATE SUBSECTION DESIGNATION.—Sub13 section (d) of section 226A of such Act (42 

14 U.S.C. 426–1), as added by section 

15 201(a)(3)(D)(ii) of the Social Security Inde16 pendence and Program Improvements Act of 

17 1994 (Public Law 103–296; 108 Stat. 1497), is 

18 redesignated as subsection (d). 

19 (2) EXTENSION OF SECONDARY PAYER RE20 QUIREMENTS FOR ESRD BENEFICIARIES.—Section 

21 1862(b)(1)(C) of such Act (42 U.S.C. 

22 1395y(b)(1)(C)) is amended by adding at the end 

23 the following new sentence: ‘‘With regard to im24 munosuppressive drugs furnished on or after the 

25 date of the enactment of the America’s Affordable 


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1 Health Choices Act of 2009, this subparagraph shall 

2 be applied without regard to any time limitation.’’. 

3 (b) MEDICARE COVERAGE FOR ESRD PATIENTS.— 

4 Section 1881 of such Act is further amended— 

5 (1) in subsection (b)(14)(B)(iii), by inserting ‘‘, 

6 including oral drugs that are not the oral equivalent 

7 of an intravenous drug (such as oral phosphate bind8 ers and calcimimetics),’’ after ‘‘other drugs and 

9 biologicals’’; 

10 (2) in subsection (b)(14)(E)(ii)— 

11 (A) in the first sentence— 

12 (i) by striking ‘‘a one-time election to 

13 be excluded from the phase-in’’ and insert14 ing ‘‘an election, with respect to 2011, 

15 2012, or 2013, to be excluded from the 

16 phase-in (or the remainder of the phase17 in)’’; and 

18 (ii) by adding at the end the fol19 lowing: ‘‘for such year and for each subse20 quent year during the phase-in described 

21 in clause (i)’’; and 

22 (B) in the second sentence— 

23 (i) by striking ‘‘January 1, 2011’’ and 

24 inserting ‘‘the first date of such year’’; and 


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1 (ii) by inserting ‘‘and at a time’’ after 

2 ‘‘form and manner’’; and 

3 (3) in subsection (h)(4)(E), by striking ‘‘lesser’’ 

4 and inserting ‘‘greater’’. 

5 SEC. 1233. ADVANCE CARE PLANNING CONSULTATION. 

6 (a) MEDICARE.— 

7 (1) IN GENERAL.—Section 1861 of the Social 

8 Security Act (42 U.S.C. 1395x) is amended— 

9 (A) in subsection (s)(2)— 

10 (i) by striking ‘‘and’’ at the end of 

11 subparagraph (DD); 

12 (ii) by adding ‘‘and’’ at the end of 

13 subparagraph (EE); and 

14 (iii) by adding at the end the fol15 lowing new subparagraph: 

16 ‘‘(FF) advance care planning consultation (as 

17 defined in subsection (hhh)(1));’’; and 

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

19 subsection: 

20 ‘‘Advance Care Planning Consultation 

21 ‘‘(hhh)(1) Subject to paragraphs (3) and (4), the 

22 term ‘advance care planning consultation’ means a con23 sultation between the individual and a practitioner de24 scribed in paragraph (2) regarding advance care planning, 

25 if, subject to paragraph (3), the individual involved has 


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1 not had such a consultation within the last 5 years. Such 

2 consultation shall include the following: 

3 ‘‘(A) An explanation by the practitioner of ad4 vance care planning, including key questions and 

5 considerations, important steps, and suggested peo6 ple to talk to. 

7 ‘‘(B) An explanation by the practitioner of ad8 vance directives, including living wills and durable 

9 powers of attorney, and their uses. 

10 ‘‘(C) An explanation by the practitioner of the 

11 role and responsibilities of a health care proxy. 

12 ‘‘(D) The provision by the practitioner of a list 

13 of national and State-specific resources to assist con14 sumers and their families with advance care plan15 ning, including the national toll-free hotline, the ad16 vance care planning clearinghouses, and State legal 

17 service organizations (including those funded 

18 through the Older Americans Act of 1965). 

19 ‘‘(E) An explanation by the practitioner of the 

20 continuum of end-of-life services and supports avail21 able, including palliative care and hospice, and bene22 fits for such services and supports that are available 

23 under this title. 


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1 ‘‘(F)(i) Subject to clause (ii), an explanation of 

2 orders regarding life sustaining treatment or similar 

3 orders, which shall include— 

4 ‘‘(I) the reasons why the development of 

5 such an order is beneficial to the individual and 

6 the individual’s family and the reasons why 

7 such an order should be updated periodically as 

8 the health of the individual changes; 

9 ‘‘(II) the information needed for an indi10 vidual or legal surrogate to make informed deci11 sions regarding the completion of such an 

12 order; and 

13 ‘‘(III) the identification of resources that 

14 an individual may use to determine the require15 ments of the State in which such individual re16 sides so that the treatment wishes of that indi17 vidual will be carried out if the individual is un18 able to communicate those wishes, including re19 quirements regarding the designation of a sur20 rogate decisionmaker (also known as a health 

21 care proxy). 

22 ‘‘(ii) The Secretary shall limit the requirement 

23 for explanations under clause (i) to consultations 

24 furnished in a State— 


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1 ‘‘(I) in which all legal barriers have been 

2 addressed for enabling orders for life sustaining 

3 treatment to constitute a set of medical orders 

4 respected across all care settings; and 

5 ‘‘(II) that has in effect a program for or6 ders for life sustaining treatment described in 

7 clause (iii). 

8 ‘‘(iii) A program for orders for life sustaining 

9 treatment for a States described in this clause is a 

10 program that— 

11 ‘‘(I) ensures such orders are standardized 

12 and uniquely identifiable throughout the State; 

13 ‘‘(II) distributes or makes accessible such 

14 orders to physicians and other health profes15 sionals that (acting within the scope of the pro16 fessional’s authority under State law) may sign 

17 orders for life sustaining treatment; 

18 ‘‘(III) provides training for health care 

19 professionals across the continuum of care 

20 about the goals and use of orders for life sus21 taining treatment; and 

22 ‘‘(IV) is guided by a coalition of stake23 holders includes representatives from emergency 

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1 tion, state medical association, state surveyors, 

2 agency responsible for senior services, state de3 partment of health, state hospital association, 

4 home health association, state bar association, 

5 and state hospice association. 

6 ‘‘(2) A practitioner described in this paragraph is— 

7 ‘‘(A) a physician (as defined in subsection 

8 (r)(1)); and 

9 ‘‘(B) a nurse practitioner or physician’s assist10 ant who has the authority under State law to sign 

11 orders for life sustaining treatments. 

12 ‘‘(3)(A) An initial preventive physical examination 

13 under subsection (WW), including any related discussion 

14 during such examination, shall not be considered an ad15 vance care planning consultation for purposes of applying 

16 the 5-year limitation under paragraph (1). 

17 ‘‘(B) An advance care planning consultation with re18 spect to an individual may be conducted more frequently 

19 than provided under paragraph (1) if there is a significant 

20 change in the health condition of the individual, including 

21 diagnosis of a chronic, progressive, life-limiting disease, a 

22 life-threatening or terminal diagnosis or life-threatening 

23 injury, or upon admission to a skilled nursing facility, a 

24 long-term care facility (as defined by the Secretary), or 

25 a hospice program. 


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1 ‘‘(4) A consultation under this subsection may in2 clude the formulation of an order regarding life sustaining 

3 treatment or a similar order. 

4 ‘‘(5)(A) For purposes of this section, the term ‘order 

5 regarding life sustaining treatment’ means, with respect 

6 to an individual, an actionable medical order relating to 

7 the treatment of that individual that— 

8 ‘‘(i) is signed and dated by a physician (as de9 fined in subsection (r)(1)) or another health care 

10 professional (as specified by the Secretary and who 

11 is acting within the scope of the professional’s au12 thority under State law in signing such an order, in13 cluding a nurse practitioner or physician assistant) 

14 and is in a form that permits it to stay with the in15 dividual and be followed by health care professionals 

16 and providers across the continuum of care; 

17 ‘‘(ii) effectively communicates the individual’s 

18 preferences regarding life sustaining treatment, in19 cluding an indication of the treatment and care de20 sired by the individual; 

21 ‘‘(iii) is uniquely identifiable and standardized 

22 within a given locality, region, or State (as identified 

23 by the Secretary); and 


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1 ‘‘(iv) may incorporate any advance directive (as 

2 defined in section 1866(f)(3)) if executed by the in3 dividual. 

4 ‘‘(B) The level of treatment indicated under subpara5 graph (A)(ii) may range from an indication for full treat6 ment to an indication to limit some or all or specified 

7 interventions. Such indicated levels of treatment may in8 clude indications respecting, among other items— 

9 ‘‘(i) the intensity of medical intervention if the 

10 patient is pulse less, apneic, or has serious cardiac 

11 or pulmonary problems; 

12 ‘‘(ii) the individual’s desire regarding transfer 

13 to a hospital or remaining at the current care set14 ting; 

15 ‘‘(iii) the use of antibiotics; and 

16 ‘‘(iv) the use of artificially administered nutri17 tion and hydration.’’. 

18 (2) PAYMENT.—Section 1848(j)(3) of such Act 

19 (42 U.S.C. 1395w–4(j)(3)) is amended by inserting 

20 ‘‘(2)(FF),’’ after ‘‘(2)(EE),’’. 

21 (3) FREQUENCY LIMITATION.—Section 1862(a) 

22 of such Act (42 U.S.C. 1395y(a)) is amended— 

23 (A) in paragraph (1)— 

24 (i) in subparagraph (N), by striking 

25 ‘‘and’’ at the end; 


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1 (ii) in subparagraph (O) by striking 

2 the semicolon at the end and inserting ‘‘, 

3 and’’; and 

4 (iii) by adding at the end the fol5 lowing new subparagraph: 

6 ‘‘(P) in the case of advance care planning 

7 consultations (as defined in section 

8 1861(hhh)(1)), which are performed more fre9 quently than is covered under such section;’’; 

10 and 

11 (B) in paragraph (7), by striking ‘‘or (K)’’ 

12 and inserting ‘‘(K), or (P)’’. 

13 (4) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to consultations fur15 nished on or after January 1, 2011. 

16 (b) EXPANSION OF PHYSICIAN QUALITY REPORTING

17 INITIATIVE FOR END OF LIFE CARE.— 

18 (1) PHYSICIAN’S QUALITY REPORTING INITIA19 TIVE.—Section 1848(k)(2) of the Social Security Act 

20 (42 U.S.C. 1395w–4(k)(2)) is amended by adding at 

21 the end the following new paragraphs: 

22 ‘‘(3) PHYSICIAN’S QUALITY REPORTING INITIA23 TIVE.— 

24 ‘‘(A) IN GENERAL.—For purposes of re25 porting data on quality measures for covered 


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1 professional services furnished during 2011 and 

2 any subsequent year, to the extent that meas3 ures are available, the Secretary shall include 

4 quality measures on end of life care and ad5 vanced care planning that have been adopted or 

6 endorsed by a consensus-based organization, if 

7 appropriate. Such measures shall measure both 

8 the creation of and adherence to orders for life9 sustaining treatment. 

10 ‘‘(B) PROPOSED SET OF MEASURES.—The 

11 Secretary shall publish in the Federal Register 

12 proposed quality measures on end of life care 

13 and advanced care planning that the Secretary 

14 determines are described in subparagraph (A) 

15 and would be appropriate for eligible profes16 sionals to use to submit data to the Secretary. 

17 The Secretary shall provide for a period of pub18 lic comment on such set of measures before fi19 nalizing such proposed measures.’’. 

20 (c) INCLUSION OF INFORMATION IN MEDICARE & 

21 YOU HANDBOOK.— 

22 (1) MEDICARE & YOU HANDBOOK.— 

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

24 after the date of the enactment of this Act, the 

25 Secretary of Health and Human Services shall 


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1 update the online version of the Medicare & 

2 You Handbook to include the following: 

3 (i) An explanation of advance care 

4 planning and advance directives, includ5 ing— 

6 (I) living wills; 

7 (II) durable power of attorney; 

8 (III) orders of life-sustaining 

9 treatment; and 

10 (IV) health care proxies. 

11 (ii) A description of Federal and State 

12 resources available to assist individuals 

13 and their families with advance care plan14 ning and advance directives, including— 

15 (I) available State legal service 

16 organizations to assist individuals 

17 with advance care planning, including 

18 those organizations that receive fund19 ing pursuant to the Older Americans 

20 Act of 1965 (42 U.S.C. 93001 et 

21 seq.); 

22 (II) website links or addresses for 

23 State-specific advance directive forms; 

24 and 


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1 (III) any additional information, 

2 as determined by the Secretary. 

3 (B) UPDATE OF PAPER AND SUBSEQUENT

4 VERSIONS.—The Secretary shall include the in5 formation described in subparagraph (A) in all 

6 paper and electronic versions of the Medicare & 

7 You Handbook that are published on or after 

8 the date that is 1 year after the date of the en9 actment of this Act. 

10 SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND 

11 WAIVER OF LIMITED ENROLLMENT PENALTY 

12 FOR TRICARE BENEFICIARIES. 

13 (a) PART B SPECIAL ENROLLMENT PERIOD.— 

14 (1) IN GENERAL.—Section 1837 of the Social 

15 Security Act (42 U.S.C. 1395p) is amended by add16 ing at the end the following new subsection: 

17 ‘‘(l)(1) In the case of any individual who is a covered 

18 beneficiary (as defined in section 1072(5) of title 10, 

19 United States Code) at the time the individual is entitled 

20 to hospital insurance benefits under part A under section 

21 226(b) or section 226A and who is eligible to enroll but 

22 who has elected not to enroll (or to be deemed enrolled) 

23 during the individual’s initial enrollment period, there 

24 shall be a special enrollment period described in paragraph 

25 (2). 


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1 ‘‘(2) The special enrollment period described in this 

2 paragraph, with respect to an individual, is the 12-month 

3 period beginning on the day after the last day of the initial 

4 enrollment period of the individual or, if later, the 12- 

5 month period beginning with the month the individual is 

6 notified of enrollment under this section. 

7 ‘‘(3) In the case of an individual who enrolls during 

8 the special enrollment period provided under paragraph 

9 (1), the coverage period under this part shall begin on the 

10 first day of the month in which the individual enrolls or, 

11 at the option of the individual, on the first day of the sec12 ond month following the last month of the individual’s ini13 tial enrollment period. 

14 ‘‘(4) The Secretary of Defense shall establish a meth15 od for identifying individuals described in paragraph (1) 

16 and providing notice to them of their eligibility for enroll17 ment during the special enrollment period described in 

18 paragraph (2).’’. 

19 (2) EFFECTIVE DATE.—The amendment made 

20 by paragraph (1) shall apply to elections made on or 

21 after the date of the enactment of this Act. 

22 (b) WAIVER OF INCREASE OF PREMIUM.— 

23 (1) IN GENERAL.—Section 1839(b) of the So24 cial Security Act (42 U.S.C. 1395r(b)) is amended 


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1 by striking ‘‘section 1837(i)(4)’’ and inserting ‘‘sub2 section (i)(4) or (l) of section 1837’’. 

3 (2) EFFECTIVE DATE.— 

4 (A) IN GENERAL.—The amendment made 

5 by paragraph (1) shall apply with respect to 

6 elections made on or after the date of the en7 actment of this Act. 

8 (B) REBATES FOR CERTAIN DISABLED

9 AND ESRD BENEFICIARIES.— 

10 (i) IN GENERAL.—With respect to 

11 premiums for months on or after January 

12 2005 and before the month of the enact13 ment of this Act, no increase in the pre14 mium shall be effected for a month in the 

15 case of any individual who is a covered 

16 beneficiary (as defined in section 1072(5) 

17 of title 10, United States Code) at the time 

18 the individual is entitled to hospital insur19 ance benefits under part A of title XVIII 

20 of the Social Security Act under section 

21 226(b) or 226A of such Act, and who is el22 igible to enroll, but who has elected not to 

23 enroll (or to be deemed enrolled), during 

24 the individual’s initial enrollment period, 

25 and who enrolls under this part within the 


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1 12-month period that begins on the first 

2 day of the month after the month of notifi3 cation of entitlement under this part. 

4 (ii) CONSULTATION WITH DEPART5 MENT OF DEFENSE.—The Secretary of 

6 Health and Human Services shall consult 

7 with the Secretary of Defense in identi8 fying individuals described in this para9 graph. 

10 (iii) REBATES.—The Secretary of 

11 Health and Human Services shall establish 

12 a method for providing rebates of premium 

13 increases paid for months on or after Jan14 uary 1, 2005, and before the month of the 

15 enactment of this Act for which a penalty 

16 was applied and collected. 

17 SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX 

18 YEAR IN CASE OF GAINS FROM SALE OF PRI19 MARY RESIDENCE IN COMPUTING PART B IN20 COME-RELATED PREMIUM. 

21 (a) IN GENERAL.—Section 1839(i)(4)(C)(ii)(II) of 

22 the Social Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) 

23 is amended by inserting ‘‘sale of primary residence,’’ after 

24 ‘‘divorce of such individual,’’. 


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

2 subsection (a) shall apply to premiums and payments for 

3 years beginning with 2011. 

4 SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PA5 TIENT DECISIONS AIDS. 

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

7 Human Services shall establish a shared decision making 

8 demonstration program (in this subsection referred to as 

9 the ‘‘program’’) under the Medicare program using pa10 tient decision aids to meet the objective of improving the 

11 understanding by Medicare beneficiaries of their medical 

12 treatment options, as compared to comparable Medicare 

13 beneficiaries who do not participate in a shared decision 

14 making process using patient decision aids. 

15 (b) SITES.— 

16 (1) ENROLLMENT.—The Secretary shall enroll 

17 in the program not more than 30 eligible providers 

18 who have experience in implementing, and have in19 vested in the necessary infrastructure to implement, 

20 shared decision making using patient decision aids. 

21 (2) APPLICATION.—An eligible provider seeking 

22 to participate in the program shall submit to the 

23 Secretary an application at such time and containing 

24 such information as the Secretary may require. 


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1 (3) PREFERENCE.—In enrolling eligible pro2 viders in the program, the Secretary shall give pref3 erence to eligible providers that— 

4 (A) have documented experience in using 

5 patient decision aids for the conditions identi6 fied by the Secretary and in using shared deci7 sion making; 

8 (B) have the necessary information tech9 nology infrastructure to collect the information 

10 required by the Secretary for reporting pur11 poses; and 

12 (C) are trained in how to use patient deci13 sion aids and shared decision making. 

14 (c) FOLLOW-UP COUNSELING VISIT.— 

15 (1) IN GENERAL.—An eligible provider partici16 pating in the program shall routinely schedule Medi17 care beneficiaries for a counseling visit after the 

18 viewing of such a patient decision aid to answer any 

19 questions the beneficiary may have with respect to 

20 the medical care of the condition involved and to as21 sist the beneficiary in thinking through how their 

22 preferences and concerns relate to their medical 

23 care. 

24 (2) PAYMENT FOR FOLLOW-UP COUNSELING

25 VISIT.—The Secretary shall establish procedures for 


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1 making payments for such counseling visits provided 

2 to Medicare beneficiaries under the program. Such 

3 procedures shall provide for the establishment— 

4 (A) of a code (or codes) to represent such 

5 services; and 

6 (B) of a single payment amount for such 

7 service that includes the professional time of 

8 the health care provider and a portion of the 

9 reasonable costs of the infrastructure of the eli10 gible provider such as would be made under the 

11 applicable payment systems to that provider for 

12 similar covered services. 

13 (d) COSTS OF AIDS.—An eligible provider partici14 pating in the program shall be responsible for the costs 

15 of selecting, purchasing, and incorporating such patient 

16 decision aids into the provider’s practice, and reporting 

17 data on quality and outcome measures under the program. 

18 (e) FUNDING.—The Secretary shall provide for the 

19 transfer from the Federal Supplementary Medical Insur20 ance Trust Fund established under section 1841 of the 

21 Social Security Act (42 U.S.C. 1395t) of such funds as 

22 are necessary for the costs of carrying out the program. 

23 (f) WAIVER AUTHORITY.—The Secretary may waive 

24 such requirements of titles XI and XVIII of the Social 

25 Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) 


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1 as may be necessary for the purpose of carrying out the 

2 program. 

3 (g) REPORT.—Not later than 12 months after the 

4 date of completion of the program, the Secretary shall sub5 mit to Congress a report on such program, together with 

6 recommendations for such legislation and administrative 

7 action as the Secretary determines to be appropriate. The 

8 final report shall include an evaluation of the impact of 

9 the use of the program on health quality, utilization of 

10 health care services, and on improving the quality of life 

11 of such beneficiaries. 

12 (h) DEFINITIONS.—In this section: 

13 (1) ELIGIBLE PROVIDER.—The term ‘‘eligible 

14 provider’’ means the following: 

15 (A) A primary care practice. 

16 (B) A specialty practice. 

17 (C) A multispecialty group practice. 

18 (D) A hospital. 

19 (E) A rural health clinic. 

20 (F) A federally qualified health center (as 

21 defined in section 1861(aa)(4) of the Social Se22 curity Act (42 U.S.C. 1395x(aa)(4)). 

23 (G) An integrated delivery system. 

24 (H) A State cooperative entity that in25 cludes the State government and at least one 


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1 other health care provider which is set up for 

2 the purpose of testing shared decision making 

3 and patient decision aids. 

4 (2) PATIENT DECISION AID.—The term ‘‘pa5 tient decision aid’’ means an educational tool (such 

6 as the Internet, a video, or a pamphlet) that helps 

7 patients (or, if appropriate, the family caregiver of 

8 the patient) understand and communicate their be9 liefs and preferences related to their treatment op10 tions, and to decide with their health care provider 

11 what treatments are best for them based on their 

12 treatment options, scientific evidence, circumstances, 

13 beliefs, and preferences. 

14 (3) SHARED DECISION MAKING.—The term 

15 ‘‘shared decision making’’ means a collaborative 

16 process between patient and clinician that engages 

17 the patient in decision making, provides patients 

18 with information about trade-offs among treatment 

19 options, and facilitates the incorporation of patient 

20 preferences and values into the medical plan. 


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1 TITLE III—PROMOTING PRI2 MARY CARE, MENTAL 

3 HEALTH SERVICES, AND CO4 ORDINATED CARE 

5 SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT 

6 PROGRAM. 

7 Title XVIII of the Social Security Act is amended by 

8 inserting after section 1866C the following new section: 

9 ‘‘ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM

10 ‘‘SEC. 1866D. (a) IN GENERAL.—The Secretary shall 

11 conduct a pilot program (in this section referred to as the 

12 ‘pilot program’) to test different payment incentive mod13 els, including (to the extent practicable) the specific pay14 ment incentive models described in subsection (c), de15 signed to reduce the growth of expenditures and improve 

16 health outcomes in the provision of items and services 

17 under this title to applicable beneficiaries (as defined in 

18 subsection (d)) by qualifying accountable care organiza19 tions (as defined in subsection (b)(1)) in order to— 

20 ‘‘(1) promote accountability for a patient popu21 lation and coordinate items and services under parts 

22 A and B; 

23 ‘‘(2) encourage investment in infrastructure and 

24 redesigned care processes for high quality and effi25 cient service delivery; and 


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1 ‘‘(3) reward physician practices and other phy2 sician organizational models for the provision of high 

3 quality and efficient health care services. 

4 ‘‘(b) QUALIFYING ACCOUNTABLE CARE ORGANIZA5 TIONS (ACOS).— 

6 ‘‘(1) QUALIFYING ACO DEFINED.—In this sec7 tion: 

8 ‘‘(A) IN GENERAL.—The terms ‘qualifying 

9 accountable care organization’ and ‘qualifying 

10 ACO’ mean a group of physicians or other phy11 sician organizational model (as defined in sub12 paragraph (D)) that— 

13 ‘‘(i) is organized at least in part for 

14 the purpose of providing physicians’ serv15 ices; and 

16 ‘‘(ii) meets such criteria as the Sec17 retary determines to be appropriate to par18 ticipate in the pilot program, including the 

19 criteria specified in paragraph (2). 

20 ‘‘(B) INCLUSION OF OTHER PROVIDERS.— 

21 Nothing in this subsection shall be construed as 

22 preventing a qualifying ACO from including a 

23 hospital or any other provider of services or 

24 supplier furnishing items or services for which 

25 payment may be made under this title that is 


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1 affiliated with the ACO under an arrangement 

2 structured so that such provider or supplier 

3 participates in the pilot program and shares in 

4 any incentive payments under the pilot pro5 gram. 

6 ‘‘(C) PHYSICIAN.—The term ‘physician’ in7 cludes, except as the Secretary may otherwise 

8 provide, any individual who furnishes services 

9 for which payment may be made as physicians’ 

10 services. 

11 ‘‘(D) OTHER PHYSICIAN ORGANIZATIONAL

12 MODEL.—The term ‘other physician organiza13 tion model’ means, with respect to a qualifying 

14 ACO any model of organization under which 

15 physicians enter into agreements with other 

16 providers for the purposes of participation in 

17 the pilot program in order to provide high qual18 ity and efficient health care services and share 

19 in any incentive payments under such program. 

20 ‘‘(E) OTHER SERVICES.—Nothing in this 

21 paragraph shall be construed as preventing a 

22 qualifying ACO from furnishing items or serv23 ices, for which payment may not be made under 

24 this title, for purposes of achieving performance 

25 goals under the pilot program. 


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1 ‘‘(2) QUALIFYING CRITERIA.—The following are 

2 criteria described in this paragraph for an organized 

3 group of physicians to be a qualifying ACO: 

4 ‘‘(A) The group has a legal structure that 

5 would allow the group to receive and distribute 

6 incentive payments under this section. 

7 ‘‘(B) The group includes a sufficient num8 ber of primary care physicians for the applica9 ble beneficiaries for whose care the group is ac10 countable (as determined by the Secretary). 

11 ‘‘(C) The group reports on quality meas12 ures in such form, manner, and frequency as 

13 specified by the Secretary (which may be for 

14 the group, for providers of services and sup15 pliers, or both). 

16 ‘‘(D) The group reports to the Secretary 

17 (in a form, manner and frequency as specified 

18 by the Secretary) such data as the Secretary 

19 determines appropriate to monitor and evaluate 

20 the pilot program. 

21 ‘‘(E) The group provides notice to applica22 ble beneficiaries regarding the pilot program (as 

23 determined appropriate by the Secretary). 

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1 tained by the Secretary for the purpose of shar2 ing strategies on quality improvement, care co3 ordination, and efficiency that the groups be4 lieve are effective. 

5 ‘‘(G) The group utilizes patient-centered 

6 processes of care, including those that empha7 size patient and caregiver involvement in plan8 ning and monitoring of ongoing care manage9 ment plan. 

10 ‘‘(H) The group meets other criteria deter11 mined to be appropriate by the Secretary. 

12 ‘‘(c) SPECIFIC PAYMENT INCENTIVE MODELS.—The 

13 specific payment incentive models described in this sub14 section are the following: 

15 ‘‘(1) PERFORMANCE TARGET MODEL.—Under 

16 the performance target model under this paragraph 

17 (in this paragraph referred to as the ‘performance 

18 target model’): 

19 ‘‘(A) IN GENERAL.—A qualifying ACO 

20 qualifies to receive an incentive payment if ex21 penditures for applicable beneficiaries are less 

22 than a target spending level or a target rate of 

23 growth. The incentive payment shall be made 

24 only if savings are greater than would result 


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1 from normal variation in expenditures for items 

2 and services covered under parts A and B. 

3 ‘‘(B) COMPUTATION OF PERFORMANCE

4 TARGET.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall establish a performance target for 

7 each qualifying ACO comprised of a base 

8 amount (described in clause (ii)) increased 

9 to the current year by an adjustment fac10 tor (described in clause (iii)). Such a tar11 get may be established on a per capita 

12 basis, as the Secretary determines to be 

13 appropriate. 

14 ‘‘(ii) BASE AMOUNT.—For purposes of 

15 clause (i), the base amount in this sub16 paragraph is equal to the average total 

17 payments (or allowed charges) under parts 

18 A and B (and may include part D, if the 

19 Secretary determines appropriate) for ap20 plicable beneficiaries for whom the quali21 fying ACO furnishes items and services in 

22 a base period determined by the Secretary. 

23 Such base amount may be determined on 

24 a per capita basis. 


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1 ‘‘(iii) ADJUSTMENT FACTOR.—For 

2 purposes of clause (i), the adjustment fac3 tor in this clause may equal an annual per 

4 capita amount that reflects changes in ex5 penditures from the period of the base 

6 amount to the current year that would rep7 resent an appropriate performance target 

8 for applicable beneficiaries (as determined 

9 by the Secretary). Such adjustment factor 

10 may be determined as an amount or rate, 

11 may be determined on a national, regional, 

12 local, or organization-specific basis, and 

13 may be determined on a per capita basis. 

14 Such adjustment factor also may be ad15 justed for risk as determined appropriate 

16 by the Secretary. 

17 ‘‘(iv) REBASING.—Under this model 

18 the Secretary shall periodically rebase the 

19 base expenditure amount described in 

20 clause (ii). 

21 ‘‘(C) MEETING TARGET.— 

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

23 (ii), a qualifying ACO that meet or exceeds 

24 annual quality and performance targets for 

25 a year shall receive an incentive payment 


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1 for such year equal to a portion (as deter2 mined appropriate by the Secretary) of the 

3 amount by which payments under this title 

4 for such year relative are estimated to be 

5 below the performance target for such 

6 year, as determined by the Secretary. The 

7 Secretary may establish a cap on incentive 

8 payments for a year for a qualifying ACO. 

9 ‘‘(ii) LIMITATION.—The Secretary 

10 shall limit incentive payments to each 

11 qualifying ACO under this paragraph as 

12 necessary to ensure that the aggregate ex13 penditures with respect to applicable bene14 ficiaries for such ACOs under this title (in15 clusive of incentive payments described in 

16 this subparagraph) do not exceed the 

17 amount that the Secretary estimates would 

18 be expended for such ACO for such bene19 ficiaries if the pilot program under this 

20 section were not implemented. 

21 ‘‘(D) REPORTING AND OTHER REQUIRE22 MENTS.—In carrying out such model, the Sec23 retary may (as the Secretary determines to be 

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1 lated to the physician quality reporting initia2 tive (PQRI), electronic prescribing, electronic 

3 health records, and other similar initiatives 

4 under section 1848, and may use alternative 

5 criteria than would otherwise apply under such 

6 section for determining whether to make such 

7 payments. The incentive payments described in 

8 this subparagraph shall not be included in the 

9 limit described in subparagraph (C)(ii) or in the 

10 performance target model described in this 

11 paragraph. 

12 ‘‘(2) PARTIAL CAPITATION MODEL.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), a partial capitation model described 

15 in this paragraph (in this paragraph referred to 

16 as a ‘partial capitation model’) is a model in 

17 which a qualifying ACO would be at financial 

18 risk for some, but not all, of the items and serv19 ices covered under parts A and B, such as at 

20 risk for some or all physicians’ services or all 

21 items and services under part B. The Secretary 

22 may limit a partial capitation model to ACOs 

23 that are highly integrated systems of care and 

24 to ACOs capable of bearing risk, as determined 

25 to be appropriate by the Secretary. 


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1 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI2 TURES.—Payments to a qualifying ACO for ap3 plicable beneficiaries for a year under the par4 tial capitation model shall be established in a 

5 manner that does not result in spending more 

6 for such ACO for such beneficiaries than would 

7 otherwise be expended for such ACO for such 

8 beneficiaries for such year if the pilot program 

9 were not implemented, as estimated by the Sec10 retary. 

11 ‘‘(3) OTHER PAYMENT MODELS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), the Secretary may develop other 

14 payment models that meet the goals of this 

15 pilot program to improve quality and efficiency. 

16 ‘‘(B) NO ADDITIONAL PROGRAM EXPENDI17 TURES.—Subparagraph (B) of paragraph (2) 

18 shall apply to a payment model under subpara19 graph (A) in a similar manner as such subpara20 graph (B) applies to the payment model under 

21 paragraph (2). 

22 ‘‘(d) APPLICABLE BENEFICIARIES.— 

23 ‘‘(1) IN GENERAL.—In this section, the term 

24 ‘applicable beneficiary’ means, with respect to a 

25 qualifying ACO, an individual who— 


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1 ‘‘(A) is enrolled under part B and entitled 

2 to benefits under part A; 

3 ‘‘(B) is not enrolled in a Medicare Advan4 tage plan under part C or a PACE program 

5 under section 1894; and 

6 ‘‘(C) meets such other criteria as the Sec7 retary determines appropriate, which may in8 clude criteria relating to frequency of contact 

9 with physicians in the ACO. 

10 ‘‘(2) FOLLOWING APPLICABLE BENE11 FICIARIES.—The Secretary may monitor data on ex12 penditures and quality of services under this title 

13 after an applicable beneficiary discontinues receiving 

14 services under this title through a qualifying ACO. 

15 ‘‘(e) IMPLEMENTATION.— 

16 ‘‘(1) STARTING DATE.—The pilot program shall 

17 begin no later than January 1, 2012. An agreement 

18 with a qualifying ACO under the pilot program may 

19 cover a multi-year period of between 3 and 5 years. 

20 ‘‘(2) WAIVER.—The Secretary may waive such 

21 provisions of this title (including section 1877) and 

22 title XI in the manner the Secretary determines nec23 essary in order implement the pilot program. 

24 ‘‘(3) PERFORMANCE RESULTS REPORTS.—The 

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1 fying ACOs under the pilot program at least annu2 ally. 

3 ‘‘(4) LIMITATIONS ON REVIEW.—There shall be 

4 no administrative or judicial review under section 

5 1869, section 1878, or otherwise of— 

6 ‘‘(A) the elements, parameters, scope, and 

7 duration of the pilot program; 

8 ‘‘(B) the selection of qualifying ACOs for 

9 the pilot program; 

10 ‘‘(C) the establishment of targets, meas11 urement of performance, determinations with 

12 respect to whether savings have been achieved 

13 and the amount of savings; 

14 ‘‘(D) determinations regarding whether, to 

15 whom, and in what amounts incentive payments 

16 are paid; and 

17 ‘‘(E) decisions about the extension of the 

18 program under subsection (g), expansion of the 

19 program under subsection (h) or extensions 

20 under subsection (i). 

21 ‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 

22 United States Code shall not apply to this section. 

23 ‘‘(f) EVALUATION; MONITORING.— 

24 ‘‘(1) IN GENERAL.—The Secretary shall evalu25 ate the payment incentive model for each qualifying 


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1 ACO under the pilot program to assess impacts on 

2 beneficiaries, providers of services, suppliers and the 

3 program under this title. The Secretary shall make 

4 such evaluation publicly available within 60 days of 

5 the date of completion of such report. 

6 ‘‘(2) MONITORING.—The Inspector General of 

7 the Department of Health and Human Services shall 

8 provide for monitoring of the operation of ACOs 

9 under the pilot program with regard to violations of 

10 section 1877 (popularly known as the ‘Stark law’). 

11 ‘‘(g) EXTENSION OF PILOT AGREEMENT WITH SUC12 CESSFUL ORGANIZATIONS.— 

13 ‘‘(1) REPORTS TO CONGRESS.—Not later than 

14 2 years after the date the first agreement is entered 

15 into under this section, and biennially thereafter for 

16 six years, the Secretary shall submit to Congress 

17 and make publicly available a report on the use of 

18 authorities under the pilot program. Each report 

19 shall address the impact of the use of those authori20 ties on expenditures, access, and quality under this 

21 title. 

22 ‘‘(2) EXTENSION.—Subject to the report pro23 vided under paragraph (1), with respect to a quali24 fying ACO, the Secretary may extend the duration 


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1 of the agreement for such ACO under the pilot pro2 gram as the Secretary determines appropriate if— 

3 ‘‘(A) the ACO receives incentive payments 

4 with respect to any of the first 4 years of the 

5 pilot agreement and is consistently meeting 

6 quality standards; or 

7 ‘‘(B) the ACO is consistently exceeding 

8 quality standards and is not increasing spend9 ing under the program. 

10 ‘‘(3) TERMINATION.—The Secretary may termi11 nate an agreement with a qualifying ACO under the 

12 pilot program if such ACO did not receive incentive 

13 payments or consistently failed to meet quality 

14 standards in any of the first 3 years under the pro15 gram. 

16 ‘‘(h) EXPANSION TO ADDITIONAL ACOS.— 

17 ‘‘(1) TESTING AND REFINEMENT OF PAYMENT

18 INCENTIVE MODELS.—Subject to the evaluation de19 scribed in subsection (f), the Secretary may enter 

20 into agreements under the pilot program with addi21 tional qualifying ACOs to further test and refine 

22 payment incentive models with respect to qualifying 

23 ACOs. 

24 ‘‘(2) EXPANDING USE OF SUCCESSFUL MODELS

25 TO PROGRAM IMPLEMENTATION.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), the Secretary may issue regulations 

3 to implement, on a permanent basis, 1 or more 

4 models if, and to the extent that, such models 

5 are beneficial to the program under this title, as 

6 determined by the Secretary. 

7 ‘‘(B) CERTIFICATION.—The Chief Actuary 

8 of the Centers for Medicare & Medicaid Serv9 ices shall certify that 1 or more of such models 

10 described in subparagraph (A) would result in 

11 estimated spending that would be less than 

12 what spending would otherwise be estimated to 

13 be in the absence of such expansion. 

14 ‘‘(i) TREATMENT OF PHYSICIAN GROUP PRACTICE

15 DEMONSTRATION.— 

16 ‘‘(1) EXTENSION.—The Secretary may enter in 

17 to an agreement with a qualifying ACO under the 

18 demonstration under section 1866A, subject to re19 basing and other modifications deemed appropriate 

20 by the Secretary, until the pilot program under this 

21 section is operational. 

22 ‘‘(2) TRANSITION.—For purposes of extension 

23 of an agreement with a qualifying ACO under sub24 section (g)(2), the Secretary shall treat receipt of an 

25 incentive payment for a year by an organization 


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1 under the physician group practice demonstration 

2 pursuant to section 1866A as a year for which an 

3 incentive payment is made under such subsection, as 

4 long as such practice group practice organization 

5 meets the criteria under subsection (b)(2). 

6 ‘‘(j) ADDITIONAL PROVISIONS.— 

7 ‘‘(1) AUTHORITY FOR SEPARATE INCENTIVE

8 ARRANGEMENTS.—The Secretary may create sepa9 rate incentive arrangements (including using mul10 tiple years of data, varying thresholds, varying 

11 shared savings amounts, and varying shared savings 

12 limits) for different categories of qualifying ACOs to 

13 reflect natural variations in data availability, vari14 ation in average annual attributable expenditures, 

15 program integrity, and other matters the Secretary 

16 deems appropriate. 

17 ‘‘(2) ENCOURAGEMENT OF PARTICIPATION OF

18 SMALLER ORGANIZATIONS.—In order to encourage 

19 the participation of smaller accountable care organi20 zations under the pilot program, the Secretary may 

21 limit a qualifying ACO’s exposure to high cost pa22 tients under the program. 

23 ‘‘(3) INVOLVEMENT IN PRIVATE PAYER AR24 RANGEMENTS.—Nothing in this section shall be con25 strued as preventing qualifying ACOs participating 


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1 in the pilot program from negotiating similar con2 tracts with private payers. 

3 ‘‘(4) ANTIDISCRIMINATION LIMITATION.—The 

4 Secretary shall not enter into an agreement with an 

5 entity to provide health care items or services under 

6 the pilot program, or with an entity to administer 

7 the program, unless such entity guarantees that it 

8 will not deny, limit, or condition the coverage or pro9 vision of benefits under the program, for individuals 

10 eligible to be enrolled under such program, based on 

11 any health status-related factor described in section 

12 2702(a)(1) of the Public Health Service Act. 

13 ‘‘(5) CONSTRUCTION.—Nothing in this section 

14 shall be construed to compel or require an organiza15 tion to use an organization-specific target growth 

16 rate for an accountable care organization under this 

17 section for purposes of section 1848. 

18 ‘‘(6) FUNDING.—For purposes of administering 

19 and carrying out the pilot program, other than for 

20 payments for items and services furnished under this 

21 title and incentive payments under subsection (c)(1), 

22 in addition to funds otherwise appropriated, there 

23 are appropriated to the Secretary for the Center for 

24 Medicare & Medicaid Services Program Management 

25 Account $25,000,000 for each of fiscal years 2010 


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1 through 2014 and $20,000,000 for fiscal year 2015. 

2 Amounts appropriated under this paragraph for a 

3 fiscal year shall be available until expended.’’. 

4 SEC. 1302. MEDICAL HOME PILOT PROGRAM. 

5 (a) IN GENERAL.—Title XVIII of the Social Security 

6 Act is amended by inserting after section 1866D, as in7 serted by section 1301, the following new section: 

8 ‘‘MEDICAL HOME PILOT PROGRAM

9 ‘‘SEC. 1866E. (a) ESTABLISHMENT AND MEDICAL

10 HOME MODELS.— 

11 ‘‘(1) ESTABLISHMENT OF PILOT PROGRAM.— 

12 The Secretary shall establish a medical home pilot 

13 program (in this section referred to as the ‘pilot pro14 gram’) for the purpose of evaluating the feasibility 

15 and advisability of reimbursing qualified patient-cen16 tered medical homes for furnishing medical home 

17 services (as defined under subsection (b)(1)) to high 

18 need beneficiaries (as defined in subsection 

19 (d)(1)(C)) and to targeted high need beneficiaries 

20 (as defined in subsection (c)(1)(C)). 

21 ‘‘(2) SCOPE.—Subject to subsection (g), the 

22 pilot program shall include urban, rural, and under23 served areas. 

24 ‘‘(3) MODELS OF MEDICAL HOMES IN THE

25 PILOT PROGRAM.—The pilot program shall evaluate 

26 each of the following medical home models: 


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1 ‘‘(A) INDEPENDENT PATIENT-CENTERED

2 MEDICAL HOME MODEL.—Independent patient3 centered medical home model under subsection 

4 (c). 

5 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

6 MODEL.—Community-based medical home 

7 model under subsection (d). 

8 ‘‘(4) PARTICIPATION OF NURSE PRACTITIONERS

9 AND PHYSICIAN ASSISTANTS.— 

10 ‘‘(A) Nothing in this section shall be con11 strued as preventing a nurse practitioner from 

12 leading a patient centered medical home so long 

13 as— 

14 ‘‘(i) all the requirements of this sec15 tion are met; and 

16 ‘‘(ii) the nurse practitioner is acting 

17 consistently with State law. 

18 ‘‘(B) Nothing in this section shall be con19 strued as preventing a physician assistant from 

20 participating in a patient centered medical 

21 home so long as— 

22 ‘‘(i) all the requirements of this sec23 tion are met; and 

24 ‘‘(ii) the physician assistant is acting 

25 consistently with State law. 


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1 ‘‘(b) DEFINITIONS.—For purposes of this section: 

2 ‘‘(1) PATIENT-CENTERED MEDICAL HOME

3 SERVICES.—The term ‘patient-centered medical 

4 home services’ means services that— 

5 ‘‘(A) provide beneficiaries with direct and 

6 ongoing access to a primary care or principal 

7 care by a physician or nurse practitioner who 

8 accepts responsibility for providing first contact, 

9 continuous and comprehensive care to such ben10 eficiary; 

11 ‘‘(B) coordinate the care provided to a ben12 eficiary by a team of individuals at the practice 

13 level across office, institutional and home set14 tings led by a primary care or principal care 

15 physician or nurse practitioner, as needed and 

16 appropriate; 

17 ‘‘(C) provide for all the patient’s health 

18 care needs or take responsibility for appro19 priately arranging care with other qualified pro20 viders for all stages of life; 

21 ‘‘(D) provide continuous access to care and 

22 communication with participating beneficiaries; 

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1 tient-centered processes, and coordination with 

2 community resources; 

3 ‘‘(F) integrate readily accessible, clinically 

4 useful information on participating patients 

5 that enables the practice to treat such patients 

6 comprehensively and systematically; and 

7 ‘‘(G) implement evidence-based guidelines 

8 and apply such guidelines to the identified 

9 needs of beneficiaries over time and with the in10 tensity needed by such beneficiaries. 

11 ‘‘(2) PRIMARY CARE.—The term ‘primary care’ 

12 means health care that is provided by a physician or 

13 nurse practitioner who practices in the field of fam14 ily medicine, general internal medicine, geriatric 

15 medicine, or pediatric medicine. 

16 ‘‘(3) PRINCIPAL CARE.—The term ‘principal 

17 care’ means integrated, accessible health care that is 

18 provided by a physician who is a medical sub19 specialist that addresses the majority of the personal 

20 health care needs of patients with chronic conditions 

21 requiring the subspecialist’s expertise, and for whom 

22 the subspecialist assumes care management. 

23 ‘‘(c) INDEPENDENT PATIENT-CENTERED MEDICAL

24 HOME MODEL.— 

25 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) PAYMENT AUTHORITY.—Under the 

2 independent patient-centered medical home 

3 model under this subsection, the Secretary shall 

4 make payments for medical home services fur5 nished by an independent patient-centered med6 ical home (as defined in subparagraph (B)) 

7 pursuant to paragraph (3)(B) for a targeted 

8 high need beneficiaries (as defined in subpara9 graph (C)). 

10 ‘‘(B) INDEPENDENT PATIENT-CENTERED

11 MEDICAL HOME DEFINED.—In this section, the 

12 term ‘independent patient-centered medical 

13 home’ means a physician-directed or nurse14 practitioner-directed practice that is qualified 

15 under paragraph (2) as— 

16 ‘‘(i) providing beneficiaries with pa17 tient-centered medical home services; and 

18 ‘‘(ii) meets such other requirements as 

19 the Secretary may specify. 

20 ‘‘(C) TARGETED HIGH NEED BENEFICIARY

21 DEFINED.—For purposes of this subsection, the 

22 term ‘targeted high need beneficiary’ means a 

23 high need beneficiary who, based on a risk score 

24 as specified by the Secretary, is generally within 


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1 the upper 50th percentile of Medicare bene2 ficiaries. 

3 ‘‘(D) BENEFICIARY ELECTION TO PARTICI4 PATE.—The Secretary shall determine an ap5 propriate method of ensuring that beneficiaries 

6 have agreed to participate in the pilot program. 

7 ‘‘(E) IMPLEMENTATION.—The pilot pro8 gram under this subsection shall begin no later 

9 than 6 months after the date of the enactment 

10 of this section. 

11 ‘‘(2) STANDARD SETTING AND QUALIFICATION

12 PROCESS FOR PATIENT-CENTERED MEDICAL

13 HOMES.—The Secretary shall review alternative 

14 models for standard setting and qualification, and 

15 shall establish a process— 

16 ‘‘(A) to establish standards to enable med17 ical practices to qualify as patient-centered 

18 medical homes; and 

19 ‘‘(B) to initially provide for the review and 

20 certification of medical practices as meeting 

21 such standards. 

22 ‘‘(3) PAYMENT.— 

23 ‘‘(A) ESTABLISHMENT OF METHOD24 OLOGY.—The Secretary shall establish a meth25 odology for the payment for medical home servVerDate Nov 24 2008 00:08 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00465 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 ices furnished by independent patient-centered 

2 medical homes. Under such methodology, the 

3 Secretary shall adjust payments to medical 

4 homes based on beneficiary risk scores to en5 sure that higher payments are made for higher 

6 risk beneficiaries. 

7 ‘‘(B) PER BENEFICIARY PER MONTH PAY8 MENTS.—Under such payment methodology, the 

9 Secretary shall pay independent patient-cen10 tered medical homes a monthly fee for each tar11 geted high need beneficiary who consents to re12 ceive medical home services through such med13 ical home. 

14 ‘‘(C) PROSPECTIVE PAYMENT.—The fee 

15 under subparagraph (B) shall be paid on a pro16 spective basis. 

17 ‘‘(D) AMOUNT OF PAYMENT.—In deter18 mining the amount of such fee, the Secretary 

19 shall consider the following: 

20 ‘‘(i) The clinical work and practice ex21 penses involved in providing the medical 

22 home services provided by the independent 

23 patient-centered medical home (such as 

24 providing increased access, care coordina25 tion, population disease management, and 


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1 teaching self-care skills for managing 

2 chronic illnesses) for which payment is not 

3 made under this title as of the date of the 

4 enactment of this section. 

5 ‘‘(ii) Allow for differential payments 

6 based on capabilities of the independent 

7 patient-centered medical home. 

8 ‘‘(iii) Use appropriate risk-adjustment 

9 in determining the amount of the per bene10 ficiary per month payment under this 

11 paragraph in a manner that ensures that 

12 higher payments are made for higher risk 

13 beneficiaries. 

14 ‘‘(4) ENCOURAGING PARTICIPATION OF VARI15 ETY OF PRACTICES.—The pilot program under this 

16 subsection shall be designed to include the participa17 tion of physicians in practices with fewer than 10 

18 full-time equivalent physicians, as well as physicians 

19 in larger practices, particularly in underserved and 

20 rural areas, as well as federally qualified community 

21 health centers, and rural health centers. 

22 ‘‘(5) NO DUPLICATION IN PILOT PARTICIPA23 TION.—A physician in a group practice that partici24 pates in the accountable care organization pilot pro25 gram under section 1866D shall not be eligible to 


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1 participate in the pilot program under this sub2 section, unless the pilot program under this section 

3 has been implemented on a permanent basis under 

4 subsection (e)(3). 

5 ‘‘(d) COMMUNITY-BASED MEDICAL HOME MODEL.— 

6 ‘‘(1) IN GENERAL.— 

7 ‘‘(A) AUTHORITY FOR PAYMENTS.—Under 

8 the community-based medical home model 

9 under this subsection (in this section referred to 

10 as the ‘CBMH model’), the Secretary shall 

11 make payments for the furnishing of medical 

12 home services by a community-based medical 

13 home (as defined in subparagraph (B)) pursu14 ant to paragraph (5)(B) for high need bene15 ficiaries. 

16 ‘‘(B) COMMUNITY-BASED MEDICAL HOME

17 DEFINED.—In this section, the term ‘commu18 nity-based medical home’ means a nonprofit 

19 community-based or State-based organization 

20 that is certified under paragraph (2) as meeting 

21 the following requirements: 

22 ‘‘(i) The organization provides bene23 ficiaries with medical home services. 

24 ‘‘(ii) The organization provides med25 ical home services under the supervision of 


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1 and in close collaboration with the primary 

2 care or principal care physician or nurse 

3 practitioner designated by the beneficiary 

4 as his or her community-based medical 

5 home provider. 

6 ‘‘(iii) The organization employs com7 munity health workers, including nurses or 

8 other non-physician practitioners, lay 

9 health workers, or other persons as deter10 mined appropriate by the Secretary, that 

11 assist the primary or principal care physi12 cian or nurse practitioner in chronic care 

13 management activities such as teaching 

14 self-care skills for managing chronic ill15 nesses, transitional care services, care plan 

16 setting, medication therapy management 

17 services for patients with multiple chronic 

18 diseases, or help beneficiaries access the 

19 health care and community-based resources 

20 in their local geographic area. 

21 ‘‘(iv) The organization meets such 

22 other requirements as the Secretary may 

23 specify. 

24 ‘‘(C) HIGH NEED BENEFICIARY.—In this 

25 section, the term ‘high need beneficiary’ means 


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1 an individual who requires regular medical 

2 monitoring, advising, or treatment. 

3 ‘‘(2) QUALIFICATION PROCESS FOR COMMU4 NITY-BASED MEDICAL HOMES.—The Secretary shall 

5 establish a process— 

6 ‘‘(A) for the initial qualification of commu7 nity-based or State-based organizations as com8 munity-based medical homes; and 

9 ‘‘(B) to provide for the review and quali10 fication of such community-based and State11 based organizations pursuant to criteria estab12 lished by the Secretary. 

13 ‘‘(3) DURATION.—The pilot program for com14 munity-based medical homes under this subsection 

15 shall start no later than 2 years after the date of the 

16 enactment of this section. Each demonstration site 

17 under the pilot program shall operate for a period 

18 of up to 5 years after the initial implementation 

19 phase, without regard to the receipt of a initial im20 plementation funding under subsection (i). 

21 ‘‘(4) PREFERENCE.—In selecting sites for the 

22 CBMH model, the Secretary may give preference 

23 to— 

24 ‘‘(A) applications from geographic areas 

25 that propose to coordinate health care services 


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1 for chronically ill beneficiaries across a variety 

2 of health care settings, such as primary care 

3 physician practices with fewer than 10 physi4 cians, specialty physicians, nurse practitioner 

5 practices, Federally qualified health centers, 

6 rural health clinics, and other settings; 

7 ‘‘(B) applications that include other payors 

8 that furnish medical home services for chron9 ically ill patients covered by such payors; and 

10 ‘‘(C) applications from States that propose 

11 to use the medical home model to coordinate 

12 health care services for individuals enrolled 

13 under this title, individuals enrolled under title 

14 XIX, and full-benefit dual eligible individuals 

15 (as defined in section 1935(c)(6)) with chronic 

16 diseases across a variety of health care settings. 

17 ‘‘(5) PAYMENTS.— 

18 ‘‘(A) ESTABLISHMENT OF METHOD19 OLOGY.—The Secretary shall establish a meth20 odology for the payment for medical home serv21 ices furnished under the CBMH model. 

22 ‘‘(B) PER BENEFICIARY PER MONTH PAY23 MENTS.—Under such payment methodology, the 

24 Secretary shall make two separate monthly pay25 ments for each high need beneficiary who conVerDate Nov 24 2008 00:08 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00471 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 sents to receive medical home services through 

2 such medical home, as follows: 

3 ‘‘(i) PAYMENT TO COMMUNITY-BASED

4 ORGANIZATION.—One monthly payment to 

5 a community-based or State-based organi6 zation. 

7 ‘‘(ii) PAYMENT TO PRIMARY OR PRIN8 CIPAL CARE PRACTICE.—One monthly pay9 ment to the primary or principal care prac10 tice for such beneficiary. 

11 ‘‘(C) PROSPECTIVE PAYMENT.—The pay12 ments under subparagraph (B) shall be paid on 

13 a prospective basis. 

14 ‘‘(D) AMOUNT OF PAYMENT.—In deter15 mining the amount of such payment, the Sec16 retary shall consider the following: 

17 ‘‘(i) The clinical work and practice ex18 penses involved in providing the medical 

19 home services provided by the community20 based medical home (such as providing in21 creased access, care coordination, care plan 

22 setting, population disease management, 

23 and teaching self-care skills for managing 

24 chronic illnesses) for which payment is not 


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1 made under this title as of the date of the 

2 enactment of this section. 

3 ‘‘(ii) Use appropriate risk-adjustment 

4 in determining the amount of the per bene5 ficiary per month payment under this 

6 paragraph. 

7 ‘‘(6) INITIAL IMPLEMENTATION FUNDING.— 

8 The Secretary may make available initial implemen9 tation funding to a community based or State-based 

10 organization or a State that is participating in the 

11 pilot program under this subsection. Such organiza12 tion shall provide the Secretary with a detailed im13 plementation plan that includes how such funds will 

14 be used. 

15 ‘‘(e) EXPANSION OF PROGRAM.— 

16 ‘‘(1) EVALUATION OF COST AND QUALITY.— 

17 The Secretary shall evaluate the pilot program to 

18 determine— 

19 ‘‘(A) the extent to which medical homes re20 sult in— 

21 ‘‘(i) improvement in the quality and 

22 coordination of health care services, par23 ticularly with regard to the care of complex 

24 patients; 


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1 ‘‘(ii) improvement in reducing health 

2 disparities; 

3 ‘‘(iii) reductions in preventable hos4 pitalizations; 

5 ‘‘(iv) prevention of readmissions; 

6 ‘‘(v) reductions in emergency room 

7 visits; 

8 ‘‘(vi) improvement in health outcomes, 

9 including patient functional status where 

10 applicable; 

11 ‘‘(vii) improvement in patient satisfac12 tion; 

13 ‘‘(viii) improved efficiency of care such 

14 as reducing duplicative diagnostic tests and 

15 laboratory tests; and 

16 ‘‘(ix) reductions in health care ex17 penditures; and 

18 ‘‘(B) the feasability and advisability of re19 imbursing medical homes for medical home 

20 services under this title on a permanent basis. 

21 ‘‘(2) REPORT.—Not later than 60 days after 

22 the date of completion of the evaluation under para23 graph (1), the Secretary shall submit to Congress 

24 and make available to the public a report on the 

25 findings of the evaluation under paragraph (1). 


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1 ‘‘(3) EXPANSION OF PROGRAM.— 

2 ‘‘(A) IN GENERAL.—Subject to the results 

3 of the evaluation under paragraph (1) and sub4 paragraph (B), the Secretary may issue regula5 tions to implement, on a permanent basis, one 

6 or more models, if, and to the extent that such 

7 model or models, are beneficial to the program 

8 under this title, including that such implemen9 tation will improve quality of care, as deter10 mined by the Secretary. 

11 ‘‘(B) CERTIFICATION REQUIREMENT.—The 

12 Secretary may not issue such regulations unless 

13 the Chief Actuary of the Centers for Medicare 

14 & Medicaid Services certifies that the expansion 

15 of the components of the pilot program de16 scribed in subparagraph (A) would result in es17 timated spending under this title that would be 

18 no more than the level of spending that the 

19 Secretary estimates would otherwise be spent 

20 under this title in the absence of such expan21 sion. 

22 ‘‘(f) ADMINISTRATIVE PROVISIONS.— 

23 ‘‘(1) NO DUPLICATION IN PAYMENTS.—During 

24 any month, the Secretary may not make payments 

25 under this section under more than one model or 


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1 through more than one medical home under any 

2 model for the furnishing of medical home services to 

3 an individual. 

4 ‘‘(2) NO EFFECT ON PAYMENT FOR EVALUA5 TION AND MANAGEMENT SERVICES.—Payments 

6 made under this section are in addition to, and have 

7 no effect on the amount of, payment for evaluation 

8 and management services made under this title. 

9 ‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 

10 United States Code shall not apply to this section. 

11 ‘‘(g) FUNDING.— 

12 ‘‘(1) OPERATIONAL COSTS.—For purposes of 

13 administering and carrying out the pilot program 

14 (including the design, implementation, technical as15 sistance for and evaluation of such program), in ad16 dition to funds otherwise available, there shall be 

17 transferred from the Federal Supplementary Medical 

18 Insurance Trust Fund under section 1841 to the 

19 Secretary for the Centers for Medicare & Medicaid 

20 Services Program Management Account $6,000,000 

21 for each of fiscal years 2010 through 2014. 

22 Amounts appropriated under this paragraph for a 

23 fiscal year shall be available until expended. 

24 ‘‘(2) PATIENT-CENTERED MEDICAL HOME

25 SERVICES.—In addition to funds otherwise available, 


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1 there shall be available to the Secretary for the Cen2 ters for Medicare & Medicaid Services, from the 

3 Federal Supplementary Medical Insurance Trust 

4 Fund under section 1841— 

5 ‘‘(A) $200,000,000 for each of fiscal years 

6 2010 through 2014 for payments for medical 

7 home services under subsection (c)(3); and 

8 ‘‘(B) $125,000,000 for each of fiscal years 

9 2012 through 2016, for payments under sub10 section (d)(5). 

11 Amounts available under this paragraph for a fiscal 

12 year shall be available until expended. 

13 ‘‘(3) INITIAL IMPLEMENTATION.—In addition 

14 to funds otherwise available, there shall be available 

15 to the Secretary for the Centers for Medicare & 

16 Medicaid Services, from the Federal Supplementary 

17 Medical Insurance Trust Fund under section 1841, 

18 $2,500,000 for each of fiscal years 2010 through 

19 2012, under subsection (d)(6). Amounts available 

20 under this paragraph for a fiscal year shall be avail21 able until expended. 

22 ‘‘(h) TREATMENT OF TRHCA MEDICARE MEDICAL

23 HOME DEMONSTRATION FUNDING.— 

24 ‘‘(1) In addition to funds otherwise available for 

25 payment of medical home services under subsection 


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1 (c)(3), there shall also be available the amount pro2 vided in subsection (g) of section 204 of division B 

3 of the Tax Relief and Health Care Act of 2006 (42 

4 U.S.C. 1395b–1 note). 

5 ‘‘(2) Notwithstanding section 1302(c) of the 

6 America’s Affordable Health Choices Act of 2009, in 

7 addition to funds provided in paragraph (1) and 

8 subsection (g)(2)(A), the funding for medical home 

9 services that would otherwise have been available if 

10 such section 204 medical home demonstration had 

11 been implemented (without regard to subsection (g) 

12 of such section) shall be available to the independent 

13 patient-centered medical home model described in 

14 subsection (c).’’. 

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

16 this section shall apply to services furnished on or after 

17 the date of the enactment of this Act. 

18 (c) CONFORMING REPEAL.—Section 204 of division 

19 B of the Tax Relief and Health Care Act of 2006 (42 

20 U.S.C. 1395b–1 note), as amended by section 133(a)(2) 

21 of the Medicare Improvements for Patients and Providers 

22 Act of 2008 (Public Law 110–275), is repealed. 


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1 SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY 

2 CARE SERVICES. 

3 (a) IN GENERAL.—Section 1833 of the Social Secu4 rity Act is amended by inserting after subsection (o) the 

5 following new subsection: 

6 ‘‘(p) PRIMARY CARE PAYMENT INCENTIVES.— 

7 ‘‘(1) IN GENERAL.—In the case of primary care 

8 services (as defined in paragraph (2)) furnished on 

9 or after January 1, 2011, by a primary care practi10 tioner (as defined in paragraph (3)) for which 

11 amounts are payable under section 1848, in addition 

12 to the amount otherwise paid under this part there 

13 shall also be paid to the practitioner (or to an em14 ployer or facility in the cases described in clause (A) 

15 of section 1842(b)(6)) (on a monthly or quarterly 

16 basis) from the Federal Supplementary Medical In17 surance Trust Fund an amount equal 5 percent (or 

18 10 percent if the practitioner predominately fur19 nishes such services in an area that is designated 

20 (under section 332(a)(1)(A) of the Public Health 

21 Service Act) as a primary care health professional 

22 shortage area. 

23 ‘‘(2) PRIMARY CARE SERVICES DEFINED.—In 

24 this subsection, the term ‘primary care services’— 


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1 ‘‘(A) means services which are evaluation 

2 and management services as defined in section 

3 1848(j)(5)(A); and 

4 ‘‘(B) includes services furnished by another 

5 health care professional that would be described 

6 in subparagraph (A) if furnished by a physi7 cian. 

8 ‘‘(3) PRIMARY CARE PRACTITIONER DE9 FINED.—In this subsection, the term ‘primary care 

10 practitioner’— 

11 ‘‘(A) means a physician or other health 

12 care practitioner (including a nurse practi13 tioner) who— 

14 ‘‘(i) specializes in family medicine, 

15 general internal medicine, general pediat16 rics, geriatrics, or obstetrics and gyne17 cology; and 

18 ‘‘(ii) has allowed charges for primary 

19 care services that account for at least 50 

20 percent of the physician’s or practitioner’s 

21 total allowed charges under section 1848, 

22 as determined by the Secretary for the 

23 most recent period for which data are 

24 available; and 


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1 ‘‘(B) includes a physician assistant who is 

2 under the supervision of a practitioner de3 scribed in subparagraph (A). 

4 ‘‘(4) LIMITATION ON REVIEW.—There shall be 

5 no administrative or judicial review under section 

6 1869, section 1878, or otherwise, respecting— 

7 ‘‘(A) any determination or designation 

8 under this subsection; 

9 ‘‘(B) the identification of services as pri10 mary care services under this subsection; and 

11 ‘‘(C) the identification of a practitioner as 

12 a primary care practitioner under this sub13 section. 

14 ‘‘(5) COORDINATION WITH OTHER PAY15 MENTS.— 

16 ‘‘(A) WITH OTHER PRIMARY CARE INCEN17 TIVES.—The provisions of this subsection shall 

18 not be taken into account in applying sub19 sections (m) and (u) and any payment under 

20 such subsections shall not be taken into account 

21 in computing payments under this subsection. 

22 ‘‘(B) WITH QUALITY INCENTIVES.—Pay23 ments under this subsection shall not be taken 

24 into account in determining the amounts that 


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1 would otherwise be paid under this part for 

2 purposes of section 1834(g)(2)(B).’’. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Section 1833 of such Act (42 U.S.C. 

5 1395l(m)) is amended by redesignating paragraph 

6 (4) as paragraph (5) and by inserting after para7 graph (3) the following new paragraph: 

8 ‘‘(4) The provisions of this subsection shall not be 

9 taken into account in applying subsections (m) or (u) and 

10 any payment under such subsections shall not be taken 

11 into account in computing payments under this sub12 section.’’. 

13 (2) Section 1848(m)(5)(B) of such Act (42 

14 U.S.C. 1395w–4(m)(5)(B)) is amended by inserting 

15 ‘‘, (p),’’ after ‘‘(m)’’. 

16 (3) Section 1848(o)(1)(B)(iv) of such Act (42 

17 U.S.C. 1395w–4(o)(1)(B)(iv)) is amended by insert18 ing ‘‘primary care’’ before ‘‘health professional 

19 shortage area’’. 

20 SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CER21 TIFIED NURSE-MIDWIVES. 

22 (a) IN GENERAL.—Section 1833(a)(1)(K) of the So23 cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amended 

24 by striking ‘‘(but in no event’’ and all that follows through 

25 ‘‘performed by a physician)’’. 


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

2 subsection (a) shall apply to services furnished on or after 

3 January 1, 2011. 

4 SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR 

5 PREVENTIVE SERVICES. 

6 (a) MEDICARE COVERED PREVENTIVE SERVICES DE7 FINED.—Section 1861 of the Social Security Act (42 

8 U.S.C. 1395x), as amended by section 1235(a)(2), is 

9 amended by adding at the end the following new sub10 section: 

11 ‘‘Medicare Covered Preventive Services 

12 ‘‘(iii)(1) Subject to the succeeding provisions of this 

13 subsection, the term ‘Medicare covered preventive services’ 

14 means the following: 

15 ‘‘(A) Prostate cancer screening tests (as defined 

16 in subsection (oo)). 

17 ‘‘(B) Colorectal cancer screening tests (as de18 fined in subsection (pp) and when applicable as de19 scribed in section 1305). 

20 ‘‘(C) Diabetes outpatient self-management 

21 training services (as defined in subsection (qq)). 

22 ‘‘(D) Screening for glaucoma for certain indi23 viduals (as described in subsection (s)(2)(U)). 


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1 ‘‘(E) Medical nutrition therapy services for cer2 tain individuals (as described in subsection 

3 (s)(2)(V)). 

4 ‘‘(F) An initial preventive physical examination 

5 (as defined in subsection (ww)). 

6 ‘‘(G) Cardiovascular screening blood tests (as 

7 defined in subsection (xx)(1)). 

8 ‘‘(H) Diabetes screening tests (as defined in 

9 subsection (yy)). 

10 ‘‘(I) Ultrasound screening for abdominal aortic 

11 aneurysm for certain individuals (as described in de12 scribed in subsection (s)(2)(AA)). 

13 ‘‘(J) Pneumococcal and influenza vaccines and 

14 their administration (as described in subsection 

15 (s)(10)(A)) and hepatitis B vaccine and its adminis16 tration for certain individuals (as described in sub17 section (s)(10)(B)). 

18 ‘‘(K) Screening mammography (as defined in 

19 subsection (jj)). 

20 ‘‘(L) Screening pap smear and screening pelvic 

21 exam (as defined in subsection (nn)). 

22 ‘‘(M) Bone mass measurement (as defined in 

23 subsection (rr)). 

24 ‘‘(N) Kidney disease education services (as de25 fined in subsection (ggg)). 


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1 ‘‘(O) Additional preventive services (as defined 

2 in subsection (ddd)). 

3 ‘‘(2) With respect to specific Medicare covered pre4 ventive services, the limitations and conditions described 

5 in the provisions referenced in paragraph (1) with respect 

6 to such services shall apply.’’. 

7 (b) PAYMENT AND ELIMINATION OF COST-SHAR8 ING.— 

9 (1) IN GENERAL.— 

10 (A) IN GENERAL.—Section 1833(a) of the 

11 Social Security Act (42 U.S.C. 1395l(a)) is 

12 amended by adding after and below paragraph 

13 (9) the following: 

14 ‘‘With respect to Medicare covered preventive services, in 

15 any case in which the payment rate otherwise provided 

16 under this part is computed as a percent of less than 100 

17 percent of an actual charge, fee schedule rate, or other 

18 rate, such percentage shall be increased to 100 percent.’’. 

19 (B) APPLICATION TO SIGMOIDOSCOPIES

20 AND COLONOSCOPIES.—Section 1834(d) of such 

21 Act (42 U.S.C. 1395m(d)) is amended— 

22 (i) in paragraph (2)(C), by amending 

23 clause (ii) to read as follows: 

24 ‘‘(ii) NO COINSURANCE.—In the case 

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1 scribed in clause (i), there shall be no coin2 surance applied.’’; and 

3 (ii) in paragraph (3)(C), by amending 

4 clause (ii) to read as follows: 

5 ‘‘(ii) NO COINSURANCE.—In the case 

6 of a beneficiary who receives services de7 scribed in clause (i), there shall be no coin8 surance applied.’’. 

9 (2) ELIMINATION OF COINSURANCE IN OUT10 PATIENT HOSPITAL SETTINGS.— 

11 (A) EXCLUSION FROM OPD FEE SCHED12 ULE.—Section 1833(t)(1)(B)(iv) of the Social 

13 Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is 

14 amended by striking ‘‘screening mammography 

15 (as defined in section 1861(jj)) and diagnostic 

16 mammography’’ and inserting ‘‘diagnostic 

17 mammograms and Medicare covered preventive 

18 services (as defined in section 1861(iii)(1))’’. 

19 (B) CONFORMING AMENDMENTS.—Section 

20 1833(a)(2) of the Social Security Act (42 

21 U.S.C. 1395l(a)(2)) is amended— 

22 (i) in subparagraph (F), by striking 

23 ‘‘and’’ after the semicolon at the end; 

24 (ii) in subparagraph (G)(ii), by adding 

25 ‘‘and’’ at the end; and 


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1 (iii) by adding at the end the fol2 lowing new subparagraph: 

3 ‘‘(H) with respect to additional preventive 

4 services (as defined in section 1861(ddd)) fur5 nished by an outpatient department of a hos6 pital, the amount determined under paragraph 

7 (1)(W);’’. 

8 (3) WAIVER OF APPLICATION OF DEDUCTIBLE

9 FOR ALL PREVENTIVE SERVICES.—The first sen10 tence of section 1833(b) of the Social Security Act 

11 (42 U.S.C. 1395l(b)) is amended— 

12 (A) in clause (1), by striking ‘‘items and 

13 services described in section 1861(s)(10)(A)’’ 

14 and inserting ‘‘Medicare covered preventive 

15 services (as defined in section 1861(iii))’’; 

16 (B) by inserting ‘‘and’’ before ‘‘(4)’’; and 

17 (C) by striking clauses (5) through (8). 

18 (4) APPLICATION TO PROVIDERS OF SERV19 ICES.—Section 1866(a)(2)(A)(ii) of such Act (42 

20 U.S.C. 1395cc(a)(2)(A)(ii)) is amended by inserting 

21 ‘‘other than for Medicare covered preventive services 

22 and’’ after ‘‘for such items and services (’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to services furnished on or after 

25 January 1, 2011. 


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1 SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL 

2 CANCER SCREENING TESTS REGARDLESS OF 

3 CODING, SUBSEQUENT DIAGNOSIS, OR ANCIL4 LARY TISSUE REMOVAL. 

5 (a) IN GENERAL.—Section 1833(b) of the Social Se6 curity Act (42 U.S.C. 1395l(b)), as amended by section 

7 1305(b)(3), is amended by adding at the end the following 

8 new sentence: ‘‘Clause (1) of the first sentence of this sub9 section shall apply with respect to a colorectal cancer 

10 screening test regardless of the code that is billed for the 

11 establishment of a diagnosis as a result of the test, or for 

12 the removal of tissue or other matter or other procedure 

13 that is furnished in connection with, as a result of, and 

14 in the same clinical encounter as, the screening test.’’. 

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

16 subsection (a) shall apply to items and services furnished 

17 on or after January 1, 2011. 

18 SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERV19 ICES FROM COVERAGE UNDER THE MEDI20 CARE SKILLED NURSING FACILITY PROSPEC21 TIVE PAYMENT SYSTEM AND CONSOLIDATED 

22 PAYMENT. 

23 (a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 

24 Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 

25 amended by inserting ‘‘clinical social worker services,’’ 

26 after ‘‘qualified psychologist services,’’. 


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1 (b) CONFORMING AMENDMENT.—Section 

2 1861(hh)(2) of the Social Security Act (42 U.S.C. 

3 1395x(hh)(2)) is amended by striking ‘‘and other than 

4 services furnished to an inpatient of a skilled nursing facil5 ity which the facility is required to provide as a require6 ment for participation’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to items and services furnished on 

9 or after July 1, 2010. 

10 SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERA11 PIST SERVICES AND MENTAL HEALTH COUN12 SELOR SERVICES. 

13 (a) COVERAGE OF MARRIAGE AND FAMILY THERA14 PIST SERVICES.— 

15 (1) COVERAGE OF SERVICES.—Section 

16 1861(s)(2) of the Social Security Act (42 U.S.C. 

17 1395x(s)(2)), as amended by section 1235, is 

18 amended— 

19 (A) in subparagraph (EE), by striking 

20 ‘‘and’’ at the end; 

21 (B) in subparagraph (FF), by adding 

22 ‘‘and’’ at the end; and 

23 (C) by adding at the end the following new 

24 subparagraph: 


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1 ‘‘(GG) marriage and family therapist serv2 ices (as defined in subsection (jjj));’’. 

3 (2) DEFINITION.—Section 1861 of the Social 

4 Security Act (42 U.S.C. 1395x), as amended by sec5 tions 1235 and 1305, is amended by adding at the 

6 end the following new subsection: 

7 ‘‘Marriage and Family Therapist Services 

8 ‘‘(jjj)(1) The term ‘marriage and family therapist 

9 services’ means services performed by a marriage and 

10 family therapist (as defined in paragraph (2)) for the diag11 nosis and treatment of mental illnesses, which the mar12 riage and family therapist is legally authorized to perform 

13 under State law (or the State regulatory mechanism pro14 vided by State law) of the State in which such services 

15 are performed, as would otherwise be covered if furnished 

16 by a physician or as incident to a physician’s professional 

17 service, but only if no facility or other provider charges 

18 or is paid any amounts with respect to the furnishing of 

19 such services. 

20 ‘‘(2) The term ‘marriage and family therapist’ means 

21 an individual who— 

22 ‘‘(A) possesses a master’s or doctoral degree 

23 which qualifies for licensure or certification as a 

24 marriage and family therapist pursuant to State 

25 law; 


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1 ‘‘(B) after obtaining such degree has performed 

2 at least 2 years of clinical supervised experience in 

3 marriage and family therapy; and 

4 ‘‘(C) is licensed or certified as a marriage and 

5 family therapist in the State in which marriage and 

6 family therapist services are performed.’’. 

7 (3) PROVISION FOR PAYMENT UNDER PART

8 B.—Section 1832(a)(2)(B) of the Social Security 

9 Act (42 U.S.C. 1395k(a)(2)(B)) is amended by add10 ing at the end the following new clause: 

11 ‘‘(v) marriage and family therapist 

12 services;’’. 

13 (4) AMOUNT OF PAYMENT.— 

14 (A) IN GENERAL.—Section 1833(a)(1) of 

15 the Social Security Act (42 U.S.C. 1395l(a)(1)) 

16 is amended— 

17 (i) by striking ‘‘and’’ before ‘‘(W)’’; 

18 and 

19 (ii) by inserting before the semicolon 

20 at the end the following: ‘‘, and (X) with 

21 respect to marriage and family therapist 

22 services under section 1861(s)(2)(GG), the 

23 amounts paid shall be 80 percent of the 

24 lesser of the actual charge for the services 

25 or 75 percent of the amount determined 


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1 for payment of a psychologist under clause 

2 (L)’’. 

3 (B) DEVELOPMENT OF CRITERIA WITH RE4 SPECT TO CONSULTATION WITH A HEALTH

5 CARE PROFESSIONAL.—The Secretary of Health 

6 and Human Services shall, taking into consider7 ation concerns for patient confidentiality, de8 velop criteria with respect to payment for mar9 riage and family therapist services for which 

10 payment may be made directly to the marriage 

11 and family therapist under part B of title 

12 XVIII of the Social Security Act (42 U.S.C. 

13 1395j et seq.) under which such a therapist 

14 must agree to consult with a patient’s attending 

15 or primary care physician or nurse practitioner 

16 in accordance with such criteria. 

17 (5) EXCLUSION OF MARRIAGE AND FAMILY

18 THERAPIST SERVICES FROM SKILLED NURSING FA19 CILITY PROSPECTIVE PAYMENT SYSTEM.—Section 

20 1888(e)(2)(A)(ii) of the Social Security Act (42 

21 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

22 1307(a), is amended by inserting ‘‘marriage and 

23 family therapist services (as defined in subsection 

24 (jjj)(1)),’’ after ‘‘clinical social worker services,’’. 


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1 (6) COVERAGE OF MARRIAGE AND FAMILY

2 THERAPIST SERVICES PROVIDED IN RURAL HEALTH

3 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN4 TERS.—Section 1861(aa)(1)(B) of the Social Secu5 rity Act (42 U.S.C. 1395x(aa)(1)(B)) is amended by 

6 striking ‘‘or by a clinical social worker (as defined 

7 in subsection (hh)(1)),’’ and inserting ‘‘, by a clinical 

8 social worker (as defined in subsection (hh)(1)), or 

9 by a marriage and family therapist (as defined in 

10 subsection (jjj)(2)),’’. 

11 (7) INCLUSION OF MARRIAGE AND FAMILY

12 THERAPISTS AS PRACTITIONERS FOR ASSIGNMENT

13 OF CLAIMS.—Section 1842(b)(18)(C) of the Social 

14 Security Act (42 U.S.C. 1395u(b)(18)(C)) is amend15 ed by adding at the end the following new clause: 

16 ‘‘(vii) A marriage and family therapist (as de17 fined in section 1861(jjj)(2)).’’. 

18 (b) COVERAGE OF MENTAL HEALTH COUNSELOR

19 SERVICES.— 

20 (1) COVERAGE OF SERVICES.—Section 

21 1861(s)(2) of the Social Security Act (42 U.S.C. 

22 1395x(s)(2)), as previously amended, is further 

23 amended— 

24 (A) in subparagraph (FF), by striking 

25 ‘‘and’’ at the end; 


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1 (B) in subparagraph (GG), by inserting 

2 ‘‘and’’ at the end; and 

3 (C) by adding at the end the following new 

4 subparagraph: 

5 ‘‘(HH) mental health counselor services (as de6 fined in subsection (kkk)(1));’’. 

7 (2) DEFINITION.—Section 1861 of the Social 

8 Security Act (42 U.S.C. 1395x), as previously 

9 amended, is amended by adding at the end the fol10 lowing new subsection: 

11 ‘‘Mental Health Counselor Services 

12 ‘‘(kkk)(1) The term ‘mental health counselor services’ 

13 means services performed by a mental health counselor (as 

14 defined in paragraph (2)) for the diagnosis and treatment 

15 of mental illnesses which the mental health counselor is 

16 legally authorized to perform under State law (or the 

17 State regulatory mechanism provided by the State law) of 

18 the State in which such services are performed, as would 

19 otherwise be covered if furnished by a physician or as inci20 dent to a physician’s professional service, but only if no 

21 facility or other provider charges or is paid any amounts 

22 with respect to the furnishing of such services. 

23 ‘‘(2) The term ‘mental health counselor’ means an 

24 individual who— 


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1 ‘‘(A) possesses a master’s or doctor’s degree 

2 which qualifies the individual for licensure or certifi3 cation for the practice of mental health counseling in 

4 the State in which the services are performed; 

5 ‘‘(B) after obtaining such a degree has per6 formed at least 2 years of supervised mental health 

7 counselor practice; and 

8 ‘‘(C) is licensed or certified as a mental health 

9 counselor or professional counselor by the State in 

10 which the services are performed.’’. 

11 (3) PROVISION FOR PAYMENT UNDER PART

12 B.—Section 1832(a)(2)(B) of the Social Security 

13 Act (42 U.S.C. 1395k(a)(2)(B)), as amended by 

14 subsection (a)(3), is further amended— 

15 (A) by striking ‘‘and’’ at the end of clause 

16 (iv); 

17 (B) by adding ‘‘and’’ at the end of clause 

18 (v); and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(vi) mental health counselor serv22 ices;’’. 

23 (4) AMOUNT OF PAYMENT.— 

24 (A) IN GENERAL.—Section 1833(a)(1) of 

25 the Social Security Act (42 U.S.C. 


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1 1395l(a)(1)), as amended by subsection (a), is 

2 further amended— 

3 (i) by striking ‘‘and’’before ‘‘(X)’’; 

4 and 

5 (ii) by inserting before the semicolon 

6 at the end the following: ‘‘, and (Y), with 

7 respect to mental health counselor services 

8 under section 1861(s)(2)(HH), the 

9 amounts paid shall be 80 percent of the 

10 lesser of the actual charge for the services 

11 or 75 percent of the amount determined 

12 for payment of a psychologist under clause 

13 (L)’’. 

14 (B) DEVELOPMENT OF CRITERIA WITH RE15 SPECT TO CONSULTATION WITH A PHYSICIAN.— 

16 The Secretary of Health and Human Services 

17 shall, taking into consideration concerns for pa18 tient confidentiality, develop criteria with re19 spect to payment for mental health counselor 

20 services for which payment may be made di21 rectly to the mental health counselor under part 

22 B of title XVIII of the Social Security Act (42 

23 U.S.C. 1395j et seq.) under which such a coun24 selor must agree to consult with a patient’s atVerDate Nov 24 2008 00:08 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00496 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 tending or primary care physician in accordance 

2 with such criteria. 

3 (5) EXCLUSION OF MENTAL HEALTH COUN4 SELOR SERVICES FROM SKILLED NURSING FACILITY

5 PROSPECTIVE PAYMENT SYSTEM.—Section 

6 1888(e)(2)(A)(ii) of the Social Security Act (42 

7 U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 

8 1307(a) and subsection (a), is amended by inserting 

9 ‘‘mental health counselor services (as defined in sec10 tion 1861(kkk)(1)),’’ after ‘‘marriage and family 

11 therapist services (as defined in subsection 

12 (jjj)(1)),’’. 

13 (6) COVERAGE OF MENTAL HEALTH COUN14 SELOR SERVICES PROVIDED IN RURAL HEALTH

15 CLINICS AND FEDERALLY QUALIFIED HEALTH CEN16 TERS.—Section 1861(aa)(1)(B) of the Social Secu17 rity Act (42 U.S.C. 1395x(aa)(1)(B)), as amended 

18 by subsection (a), is amended by striking ‘‘or by a 

19 marriage and family therapist (as defined in sub20 section (jjj)(2)),’’ and inserting ‘‘by a marriage and 

21 family therapist (as defined in subsection (jjj)(2)), 

22 or a mental health counselor (as defined in sub23 section (kkk)(2)),’’. 

24 (7) INCLUSION OF MENTAL HEALTH COUN25 SELORS AS PRACTITIONERS FOR ASSIGNMENT OF


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1 CLAIMS.—Section 1842(b)(18)(C) of the Social Se2 curity Act (42 U.S.C. 1395u(b)(18)(C)), as amended 

3 by subsection (a)(7), is amended by adding at the 

4 end the following new clause: 

5 ‘‘(viii) A mental health counselor (as defined in 

6 section 1861(kkk)(2)).’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to items and services furnished on 

9 or after January 1, 2011. 

10 SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN11 TAL HEALTH ADD-ON. 

12 Section 138(a)(1) of the Medicare Improvements for 

13 Patients and Providers Act of 2008 (Public Law 110–275) 

14 is amended by striking ‘‘December 31, 2009’’ and insert15 ing ‘‘December 31, 2011’’. 

16 SEC. 1310. EXPANDING ACCESS TO VACCINES. 

17 (a) IN GENERAL.—Paragraph (10) of section 

18 1861(s) of the Social Security Act (42 U.S.C. 1395w(s)) 

19 is amended to read as follows: 

20 ‘‘(10) federally recommended vaccines (as de21 fined in subsection (lll)) and their respective admin22 istration;’’. 

23 (b) FEDERALLY RECOMMENDED VACCINES DE24 FINED.—Section 1861 of such Act is further amended by 

25 adding at the end the following new subsection: 


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1 ‘‘Federally Recommended Vaccines 

2 ‘‘(lll) The term ‘federally recommended vaccine’ 

3 means an approved vaccine recommended by the Advisory 

4 Committee on Immunization Practices (an advisory com5 mittee established by the Secretary, acting through the Di6 rector of the Centers for Disease Control and Preven7 tion).’’. 

8 (c) CONFORMING AMENDMENTS.— 

9 (1) Section 1833 of such Act (42 U.S.C. 1395l) 

10 is amended, in each of subsections (a)(1)(B), 

11 (a)(2)(G), (a)(3)(A), and (b)(1) (as amended by sec12 tion 1305(b)), by striking ‘‘1861(s)(10)(A)’’ or 

13 ‘‘1861(s)(10)(B)’’ and inserting ‘‘1861(s)(10)’’ each 

14 place it appears. 

15 (2) Section 1842(o)(1)(A)(iv) of such Act (42 

16 U.S.C. 1395u(o)(1)(A)(iv)) is amended— 

17 (A) by striking ‘‘subparagraph (A) or (B) 

18 of’’; and 

19 (B) by inserting before the period the fol20 lowing: ‘‘and before January 1, 2011, and influ21 enza vaccines furnished on or after January 1, 

22 2011’’. 

23 (3) Section 1847A(c)(6) of such Act (42 U.S.C. 

24 1395w–3a(c)(6)) is amended by striking subpara25 graph (G) and inserting the following: 


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1 ‘‘(G) IMPLEMENTATION.—Chapter 35 of 

2 title 44, United States Code shall not apply to 

3 manufacturer provision of information pursuant 

4 to section 1927(b)(3)(A)(iii) for purposes of im5 plementation of this section.’’. 

6 (4) Section 1860D–2(e)(1)(B) of such Act (42 

7 U.S.C. 1395w–102(e)(1)(B)) is amended by striking 

8 ‘‘such term includes a vaccine’’ and all that follows 

9 through ‘‘its administration) and’’. 

10 (5) Section 1861(ww)(2)(A) of such Act (42 

11 U.S.C. 1395x(ww)(2)(A))) is amended by striking 

12 ‘‘Pneumococcal, influenza, and hepatitis B and ad13 ministration’’ and inserting ‘‘Federally recommended 

14 vaccines (as defined in subsection (lll)) and their re15 spective administration’’. 

16 (6) Section 1861(iii)(1) of such Act, as added 

17 by section 1305(a), is amended by amending sub18 paragraph (J) to read as follows: 

19 ‘‘(J) Federally recommended vaccines (as de20 fined in subsection (lll)) and their respective admin21 istration.’’. 

22 (7) Section 1927(b)(3)(A)(iii) of such Act (42 

23 U.S.C. 1396r–8(b)(3)(A)(iii)) is amended, in the 

24 matter following subclause (III), by inserting 

25 ‘‘(A)(iv) (including influenza vaccines furnished on 


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1 or after January 1, 2011),’’ after ‘‘described in sub2 paragraph.’’ 

3 (d) EFFECTIVE DATES.—The amendments made 

4 by— 

5 (1) this section (other than by subsection 

6 (c)(7)) shall apply to vaccines administered on or 

7 after January 1, 2011; and 

8 (2) by subsection (c)(7) shall apply to calendar 

9 quarters beginning on or after January 1, 2010. 

10 TITLE IV—QUALITY 

11 Subtitle A—Comparative 

12 Effectiveness Research 

13 SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH. 

14 (a) IN GENERAL.—title XI of the Social Security Act 

15 is amended by adding at the end the following new part: 

16 ‘‘PART D—COMPARATIVE EFFECTIVENESS RESEARCH

17 ‘‘COMPARATIVE EFFECTIVENESS RESEARCH

18 ‘‘SEC. 1181. (a) CENTER FOR COMPARATIVE EFFEC19 TIVENESS RESEARCH ESTABLISHED.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall estab21 lish within the Agency for Healthcare Research and 

22 Quality a Center for Comparative Effectiveness Re23 search (in this section referred to as the ‘Center’) to 

24 conduct, support, and synthesize research (including 

25 research conducted or supported under section 1013 


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1 of the Medicare Prescription Drug, Improvement, 

2 and Modernization Act of 2003) with respect to the 

3 outcomes, effectiveness, and appropriateness of 

4 health care services and procedures in order to iden5 tify the manner in which diseases, disorders, and 

6 other health conditions can most effectively and ap7 propriately be prevented, diagnosed, treated, and 

8 managed clinically. 

9 ‘‘(2) DUTIES.—The Center shall— 

10 ‘‘(A) conduct, support, and synthesize re11 search relevant to the comparative effectiveness 

12 of the full spectrum of health care items, serv13 ices and systems, including pharmaceuticals, 

14 medical devices, medical and surgical proce15 dures, and other medical interventions; 

16 ‘‘(B) conduct and support systematic re17 views of clinical research, including original re18 search conducted subsequent to the date of the 

19 enactment of this section; 

20 ‘‘(C) continuously develop rigorous sci21 entific methodologies for conducting compara22 tive effectiveness studies, and use such meth23 odologies appropriately; 

24 ‘‘(D) submit to the Comparative Effective25 ness Research Commission, the Secretary, and 


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1 Congress appropriate relevant reports described 

2 in subsection (d)(2); and 

3 ‘‘(E) encourage, as appropriate, the devel4 opment and use of clinical registries and the de5 velopment of clinical effectiveness research data 

6 networks from electronic health records, post 

7 marketing drug and medical device surveillance 

8 efforts, and other forms of electronic health 

9 data. 

10 ‘‘(3) POWERS.— 

11 ‘‘(A) OBTAINING OFFICIAL DATA.—The 

12 Center may secure directly from any depart13 ment or agency of the United States informa14 tion necessary to enable it to carry out this sec15 tion. Upon request of the Center, the head of 

16 that department or agency shall furnish that in17 formation to the Center on an agreed upon 

18 schedule. 

19 ‘‘(B) DATA COLLECTION.—In order to 

20 carry out its functions, the Center shall— 

21 ‘‘(i) utilize existing information, both 

22 published and unpublished, where possible, 

23 collected and assessed either by its own 

24 staff or under other arrangements made in 

25 accordance with this section, 


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1 ‘‘(ii) carry out, or award grants or 

2 contracts for, original research and experi3 mentation, where existing information is 

4 inadequate, and 

5 ‘‘(iii) adopt procedures allowing any 

6 interested party to submit information for 

7 the use by the Center and Commission 

8 under subsection (b) in making reports 

9 and recommendations. 

10 ‘‘(C) ACCESS OF GAO TO INFORMATION.— 

11 The Comptroller General shall have unrestricted 

12 access to all deliberations, records, and non13 proprietary data of the Center and Commission 

14 under subsection (b), immediately upon request. 

15 ‘‘(D) PERIODIC AUDIT.—The Center and 

16 Commission under subsection (b) shall be sub17 ject to periodic audit by the Comptroller Gen18 eral. 

19 ‘‘(b) OVERSIGHT BY COMPARATIVE EFFECTIVENESS

20 RESEARCH COMMISSION.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall estab22 lish an independent Comparative Effectiveness Re23 search Commission (in this section referred to as the 

24 ‘Commission’) to oversee and evaluate the activities 

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1 ject to the authority of the Secretary, to ensure such 

2 activities result in highly credible research and infor3 mation resulting from such research. 

4 ‘‘(2) DUTIES.—The Commission shall— 

5 ‘‘(A) determine national priorities for re6 search described in subsection (a) and in mak7 ing such determinations consult with a broad 

8 array of public and private stakeholders, includ9 ing patients and health care providers and pay10 ers; 

11 ‘‘(B) monitor the appropriateness of use of 

12 the CERTF described in subsection (g) with re13 spect to the timely production of comparative 

14 effectiveness research determined to be a na15 tional priority under subparagraph (A); 

16 ‘‘(C) identify highly credible research 

17 methods and standards of evidence for such re18 search to be considered by the Center; 

19 ‘‘(D) review the methodologies developed 

20 by the center under subsection (a)(2)(C); 

21 ‘‘(E) not later than one year after the date 

22 of the enactment of this section, enter into an 

23 arrangement under which the Institute of Medi24 cine of the National Academy of Sciences shall 


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1 conduct an evaluation and report on standards 

2 of evidence for such research; 

3 ‘‘(F) support forums to increase stake4 holder awareness and permit stakeholder feed5 back on the efforts of the Center to advance 

6 methods and standards that promote highly 

7 credible research; 

8 ‘‘(G) make recommendations for policies 

9 that would allow for public access of data pro10 duced under this section, in accordance with ap11 propriate privacy and proprietary practices, 

12 while ensuring that the information produced 

13 through such data is timely and credible; 

14 ‘‘(H) appoint a clinical perspective advisory 

15 panel for each research priority determined 

16 under subparagraph (A), which shall consult 

17 with patients and advise the Center on research 

18 questions, methods, and evidence gaps in terms 

19 of clinical outcomes for the specific research in20 quiry to be examined with respect to such pri21 ority to ensure that the information produced 

22 from such research is clinically relevant to deci23 sions made by clinicians and patients at the 

24 point of care; 


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1 ‘‘(I) make recommendations for the pri2 ority for periodic reviews of previous compara3 tive effectiveness research and studies con4 ducted by the Center under subsection (a); 

5 ‘‘(J) routinely review processes of the Cen6 ter with respect to such research to confirm 

7 that the information produced by such research 

8 is objective, credible, consistent with standards 

9 of evidence established under this section, and 

10 developed through a transparent process that 

11 includes consultations with appropriate stake12 holders; and 

13 ‘‘(K) make recommendations to the center 

14 for the broad dissemination of the findings of 

15 research conducted and supported under this 

16 section that enables clinicians, patients, con17 sumers, and payers to make more informed 

18 health care decisions that improve quality and 

19 value. 

20 ‘‘(3) COMPOSITION OF COMMISSION.— 

21 ‘‘(A) IN GENERAL.—The members of the 

22 Commission shall consist of— 

23 ‘‘(i) the Director of the Agency for 

24 Healthcare Research and Quality; 


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1 ‘‘(ii) the Chief Medical Officer of the 

2 Centers for Medicare & Medicaid Services; 

3 and 

4 ‘‘(iii) 15 additional members who shall 

5 represent broad constituencies of stake6 holders including clinicians, patients, re7 searchers, third-party payers, consumers of 

8 Federal and State beneficiary programs. 

9 Of such members, at least 9 shall be practicing 

10 physicians, health care practitioners, con11 sumers, or patients. 

12 ‘‘(B) QUALIFICATIONS.— 

13 ‘‘(i) DIVERSE REPRESENTATION OF

14 PERSPECTIVES.—The members of the 

15 Commission shall represent a broad range 

16 of perspectives and shall collectively have 

17 experience in the following areas: 

18 ‘‘(I) Epidemiology. 

19 ‘‘(II) Health services research. 

20 ‘‘(III) Bioethics. 

21 ‘‘(IV) Decision sciences. 

22 ‘‘(V) Health disparities. 

23 ‘‘(VI) Economics. 

24 ‘‘(ii) DIVERSE REPRESENTATION OF

25 HEALTH CARE COMMUNITY.—At least one 


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1 member shall represent each of the fol2 lowing health care communities: 

3 ‘‘(I) Patients. 

4 ‘‘(II) Health care consumers. 

5 ‘‘(III) Practicing Physicians, in6 cluding surgeons. 

7 ‘‘(IV) Other health care practi8 tioners engaged in clinical care. 

9 ‘‘(V) Employers. 

10 ‘‘(VI) Public payers. 

11 ‘‘(VII) Insurance plans. 

12 ‘‘(VIII) Clinical researchers who 

13 conduct research on behalf of pharma14 ceutical or device manufacturers. 

15 ‘‘(C) LIMITATION.—No more than 3 of the 

16 Members of the Commission may be representa17 tives of pharmaceutical or device manufacturers 

18 and such representatives shall be clinical re19 searchers described under subparagraph 

20 (B)(ii)(VIII). 

21 ‘‘(4) APPOINTMENT.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 appoint the members of the Commission. 

24 ‘‘(B) CONSULTATION.—In considering can25 didates for appointment to the Commission, the 


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1 Secretary may consult with the Government Ac2 countability Office and the Institute of Medicine 

3 of the National Academy of Sciences. 

4 ‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Sec5 retary shall designate a member of the Commission, 

6 at the time of appointment of the member, as Chair7 man and a member as Vice Chairman for that term 

8 of appointment, except that in the case of vacancy 

9 of the Chairmanship or Vice Chairmanship, the Sec10 retary may designate another member for the re11 mainder of that member’s term. The Chairman shall 

12 serve as an ex officio member of the National Advi13 sory Council of the Agency for Health Care Re14 search and Quality under section 931(c)(3)(B) of 

15 the Public Health Service Act. 

16 ‘‘(6) TERMS.— 

17 ‘‘(A) IN GENERAL.—Except as provided in 

18 subparagraph (B), each member of the Com19 mission shall be appointed for a term of 4 

20 years. 

21 ‘‘(B) TERMS OF INITIAL APPOINTEES.—Of 

22 the members first appointed— 

23 ‘‘(i) 8 shall be appointed for a term of 

24 4 years; and 


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1 ‘‘(ii) 7 shall be appointed for a term 

2 of 3 years. 

3 ‘‘(7) COORDINATION.—To enhance effectiveness 

4 and coordination, the Secretary is encouraged, to the 

5 greatest extent possible, to seek coordination be6 tween the Commission and the National Advisory 

7 Council of the Agency for Healthcare Research and 

8 Quality. 

9 ‘‘(8) CONFLICTS OF INTEREST.— 

10 ‘‘(A) IN GENERAL.—In appointing the 

11 members of the Commission or a clinical per12 spective advisory panel described in paragraph 

13 (2)(H), the Secretary or the Commission, re14 spectively, shall take into consideration any fi15 nancial interest (as defined in subparagraph 

16 (D)), consistent with this paragraph, and de17 velop a plan for managing any identified con18 flicts. 

19 ‘‘(B) EVALUATION AND CRITERIA.—When 

20 considering an appointment to the Commission 

21 or a clinical perspective advisory panel de22 scribed paragraph (2)(H) the Secretary or the 

23 Commission shall review the expertise of the in24 dividual and the financial disclosure report filed 

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1 ernment Act of 1978 for each individual under 

2 consideration for the appointment, so as to re3 duce the likelihood that an appointed individual 

4 will later require a written determination as re5 ferred to in section 208(b)(1) of title 18, United 

6 States Code, a written certification as referred 

7 to in section 208(b)(3) of title 18, United 

8 States Code, or a waiver as referred to in sub9 paragraph (D)(iii) for service on the Commis10 sion at a meeting of the Commission. 

11 ‘‘(C) DISCLOSURES; PROHIBITIONS ON

12 PARTICIPATION; WAIVERS.— 

13 ‘‘(i) DISCLOSURE OF FINANCIAL IN14 TEREST.—Prior to a meeting of the Com15 mission or a clinical perspective advisory 

16 panel described in paragraph (2)(H) re17 garding a ‘particular matter’ (as that term 

18 is used in section 208 of title 18, United 

19 States Code), each member of the Commis20 sion or the clinical perspective advisory 

21 panel who is a full-time Government em22 ployee or special Government employee 

23 shall disclose to the Secretary financial in24 terests in accordance with subsection (b) of 

25 such section 208. 


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1 ‘‘(ii) PROHIBITIONS ON PARTICIPA2 TION.—Except as provided under clause 

3 (iii), a member of the Commission or a 

4 clinical perspective advisory panel de5 scribed in paragraph (2)(H) may not par6 ticipate with respect to a particular matter 

7 considered in meeting of the Commission 

8 or the clinical perspective advisory panel if 

9 such member (or an immediate family 

10 member of such member) has a financial 

11 interest that could be affected by the ad12 vice given to the Secretary with respect to 

13 such matter, excluding interests exempted 

14 in regulations issued by the Director of the 

15 Office of Government Ethics as too remote 

16 or inconsequential to affect the integrity of 

17 the services of the Government officers or 

18 employees to which such regulations apply. 

19 ‘‘(iii) WAIVER.—If the Secretary de20 termines it necessary to afford the Com21 mission or a clinical perspective advisory 

22 panel described in paragraph 2(H) essen23 tial expertise, the Secretary may grant a 

24 waiver of the prohibition in clause (ii) to 


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1 permit a member described in such sub2 paragraph to— 

3 ‘‘(I) participate as a non-voting 

4 member with respect to a particular 

5 matter considered in a Commission or 

6 a clinical perspective advisory panel 

7 meeting; or 

8 ‘‘(II) participate as a voting 

9 member with respect to a particular 

10 matter considered in a Commission or 

11 a clinical perspective advisory panel 

12 meeting. 

13 ‘‘(iv) LIMITATION ON WAIVERS AND

14 OTHER EXCEPTIONS.— 

15 ‘‘(I) DETERMINATION OF ALLOW16 ABLE EXCEPTIONS FOR THE COMMIS17 SION.—The number of waivers grant18 ed to members of the Commission 

19 cannot exceed one-half of the total 

20 number of members for the Commis21 sion. 

22 ‘‘(II) PROHIBITION ON VOTING

23 STATUS ON CLINICAL PERSPECTIVE

24 ADVISORY PANELS.—No voting mem25 ber of any clinical perspective advisory 


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1 panel shall be in receipt of a waiver. 

2 No more than two nonvoting members 

3 of any clinical perspective advisory 

4 panel shall receive a waiver. 

5 ‘‘(D) FINANCIAL INTEREST DEFINED.— 

6 For purposes of this paragraph, the term ‘fi7 nancial interest’ means a financial interest 

8 under section 208(a) of title 18, United States 

9 Code. 

10 ‘‘(9) COMPENSATION.—While serving on the 

11 business of the Commission (including travel time), 

12 a member of the Commission shall be entitled to 

13 compensation at the per diem equivalent of the rate 

14 provided for level IV of the Executive Schedule 

15 under section 5315 of title 5, United States Code; 

16 and while so serving away from home and the mem17 ber’s regular place of business, a member may be al18 lowed travel expenses, as authorized by the Director 

19 of the Commission. 

20 ‘‘(10) AVAILABILITY OF REPORTS.—The Com21 mission shall transmit to the Secretary a copy of 

22 each report submitted under this subsection and 

23 shall make such reports available to the public. 

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

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1 retary deems necessary to assure the efficient ad2 ministration of the Commission, the Commission 

3 may— 

4 ‘‘(A) appoint an Executive Director (sub5 ject to the approval of the Secretary) and such 

6 other personnel as Federal employees under 

7 section 2105 of title 5, United States Code, as 

8 may be necessary to carry out its duties (with9 out regard to the provisions of title 5, United 

10 States Code, governing appointments in the 

11 competitive service); 

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

13 may be required in the performance of its du14 ties from appropriate Federal departments and 

15 agencies; 

16 ‘‘(C) enter into contracts or make other ar17 rangements, as may be necessary for the con18 duct of the work of the Commission (without 

19 regard to section 3709 of the Revised Statutes 

20 (41 U.S.C. 5)); 

21 ‘‘(D) make advance, progress, and other 

22 payments which relate to the work of the Com23 mission; 


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1 ‘‘(E) provide transportation and subsist2 ence for persons serving without compensation; 

3 and 

4 ‘‘(F) prescribe such rules and regulations 

5 as it deems necessary with respect to the inter6 nal organization and operation of the Commis7 sion. 

8 ‘‘(c) RESEARCH REQUIREMENTS.—Any research con9 ducted, supported, or synthesized under this section shall 

10 meet the following requirements: 

11 ‘‘(1) ENSURING TRANSPARENCY, CREDIBILITY, 

12 AND ACCESS.— 

13 ‘‘(A) The establishment of the agenda and 

14 conduct of the research shall be insulated from 

15 inappropriate political or stakeholder influence. 

16 ‘‘(B) Methods of conducting such research 

17 shall be scientifically based. 

18 ‘‘(C) All aspects of the prioritization of re19 search, conduct of the research, and develop20 ment of conclusions based on the research shall 

21 be transparent to all stakeholders. 

22 ‘‘(D) The process and methods for con23 ducting such research shall be publicly docu24 mented and available to all stakeholders. 


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1 ‘‘(E) Throughout the process of such re2 search, the Center shall provide opportunities 

3 for all stakeholders involved to review and pro4 vide public comment on the methods and find5 ings of such research. 

6 ‘‘(2) USE OF CLINICAL PERSPECTIVE ADVISORY

7 PANELS.—The research shall meet a national re8 search priority determined under subsection 

9 (b)(2)(A) and shall consider advice given to the Cen10 ter by the clinical perspective advisory panel for the 

11 national research priority. 

12 ‘‘(3) STAKEHOLDER INPUT.— 

13 ‘‘(A) IN GENERAL.—The Commission shall 

14 consult with patients, health care providers, 

15 health care consumer representatives, and other 

16 appropriate stakeholders with an interest in the 

17 research through a transparent process rec18 ommended by the Commission. 

19 ‘‘(B) SPECIFIC AREAS OF CONSULTA20 TION.—Consultation shall include where 

21 deemed appropriate by the Commission— 

22 ‘‘(i) recommending research priorities 

23 and questions; 

24 ‘‘(ii) recommending research meth25 odologies; and 


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1 ‘‘(iii) advising on and assisting with 

2 efforts to disseminate research findings. 

3 ‘‘(C) OMBUDSMAN.—The Secretary shall 

4 designate a patient ombudsman. The ombuds5 man shall— 

6 ‘‘(i) serve as an available point of con7 tact for any patients with an interest in 

8 proposed comparative effectiveness studies 

9 by the Center; and 

10 ‘‘(ii) ensure that any comments from 

11 patients regarding proposed comparative 

12 effectiveness studies are reviewed by the 

13 Commission. 

14 ‘‘(4) TAKING INTO ACCOUNT POTENTIAL DIF15 FERENCES.—Research shall— 

16 ‘‘(A) be designed, as appropriate, to take 

17 into account the potential for differences in the 

18 effectiveness of health care items and services 

19 used with various subpopulations such as racial 

20 and ethnic minorities, women, different age 

21 groups (including children, adolescents, adults, 

22 and seniors), and individuals with different 

23 comorbidities; and 


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1 ‘‘(B) seek, as feasible and appropriate, to 

2 include members of such subpopulations as sub3 jects in the research. 

4 ‘‘(d) PUBLIC ACCESS TO COMPARATIVE EFFECTIVE5 NESS INFORMATION.— 

6 ‘‘(1) IN GENERAL.—Not later than 90 days 

7 after receipt by the Center or Commission, as appli8 cable, of a relevant report described in paragraph 

9 (2) made by the Center, Commission, or clinical per10 spective advisory panel under this section, appro11 priate information contained in such report shall be 

12 posted on the official public Internet site of the Cen13 ter and of the Commission, as applicable. 

14 ‘‘(2) RELEVANT REPORTS DESCRIBED.—For 

15 purposes of this section, a relevant report is each of 

16 the following submitted by the Center or a grantee 

17 or contractor of the Center: 

18 ‘‘(A) Any interim or progress reports as 

19 deemed appropriate by the Secretary. 

20 ‘‘(B) Stakeholder comments. 

21 ‘‘(C) A final report. 

22 ‘‘(e) DISSEMINATION AND INCORPORATION OF COM23 PARATIVE EFFECTIVENESS INFORMATION.— 

24 ‘‘(1) DISSEMINATION.—The Center shall pro25 vide for the dissemination of appropriate findings 


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1 produced by research supported, conducted, or syn2 thesized under this section to health care providers, 

3 patients, vendors of health information technology 

4 focused on clinical decision support, appropriate pro5 fessional associations, and Federal and private 

6 health plans, and other relevant stakeholders. In dis7 seminating such findings the Center shall— 

8 ‘‘(A) convey findings of research so that 

9 they are comprehensible and useful to patients 

10 and providers in making health care decisions; 

11 ‘‘(B) discuss findings and other consider12 ations specific to certain sub-populations, risk 

13 factors, and comorbidities as appropriate; 

14 ‘‘(C) include considerations such as limita15 tions of research and what further research 

16 may be needed, as appropriate; 

17 ‘‘(D) not include any data that the dis18 semination of which would violate the privacy of 

19 research participants or violate any confiden20 tiality agreements made with respect to the use 

21 of data under this section; and 

22 ‘‘(E) assist the users of health information 

23 technology focused on clinical decision support 

24 to promote the timely incorporation of such 


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1 findings into clinical practices and promote the 

2 ease of use of such incorporation. 

3 ‘‘(2) DISSEMINATION PROTOCOLS AND STRATE4 GIES.—The Center shall develop protocols and strat5 egies for the appropriate dissemination of research 

6 findings in order to ensure effective communication 

7 of findings and the use and incorporation of such 

8 findings into relevant activities for the purpose of in9 forming higher quality and more effective and effi10 cient decisions regarding medical items and services. 

11 In developing and adopting such protocols and strat12 egies, the Center shall consult with stakeholders con13 cerning the types of dissemination that will be most 

14 useful to the end users of information and may pro15 vide for the utilization of multiple formats for con16 veying findings to different audiences, including dis17 semination to individuals with limited English pro18 ficiency. 

19 ‘‘(f) REPORTS TO CONGRESS.— 

20 ‘‘(1) ANNUAL REPORTS.—Beginning not later 

21 than one year after the date of the enactment of this 

22 section, the Director of the Agency of Healthcare 

23 Research and Quality and the Commission shall sub24 mit to Congress an annual report on the activities 

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1 search, conducted under this section. Each such re2 port shall include a discussion of the Center’s com3 pliance with subsection (c)(B)(4), including any rea4 sons for lack of complicance with such subsection. 

5 ‘‘(2) RECOMMENDATION FOR FAIR SHARE PER

6 CAPITA AMOUNT FOR ALL-PAYER FINANCING.—Be7 ginning not later than December 31, 2011, the Sec8 retary shall submit to Congress an annual rec9 ommendation for a fair share per capita amount de10 scribed in subsection (c)(1) of section 9511 of the 

11 Internal Revenue Code of 1986 for purposes of 

12 funding the CERTF under such section. 

13 ‘‘(3) ANALYSIS AND REVIEW.—Not later than 

14 December 31, 2013, the Secretary, in consultation 

15 with the Commission, shall submit to Congress a re16 port on all activities conducted or supported under 

17 this section as of such date. Such report shall in18 clude an evaluation of the overall costs of such ac19 tivities and an analysis of the backlog of any re20 search proposals approved by the Commission but 

21 not funded. 

22 ‘‘(g) FUNDING OF COMPARATIVE EFFECTIVENESS

23 RESEARCH.—For fiscal year 2010 and each subsequent 

24 fiscal year, amounts in the Comparative Effectiveness Re25 search Trust Fund (referred to in this section as the 


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1 ‘CERTF’) under section 9511 of the Internal Revenue 

2 Code of 1986 shall be available, without the need for fur3 ther appropriations and without fiscal year limitation, to 

4 the Secretary to carry out this section. 

5 ‘‘(h) CONSTRUCTION.—Nothing in this section shall 

6 be construed to permit the Commission or the Center to 

7 mandate coverage, reimbursement, or other policies for 

8 any public or private payer.’’. 

9 (b) COMPARATIVE EFFECTIVENESS RESEARCH

10 TRUST FUND; FINANCING FOR THE TRUST FUND.—For 

11 provision establishing a Comparative Effectiveness Re12 search Trust Fund and financing such Trust Fund, see 

13 section 1802. 

14 Subtitle B—Nursing Home 

15 Transparency 

16 PART 1—IMPROVING TRANSPARENCY OF INFOR17 MATION ON SKILLED NURSING FACILITIES 

18 AND NURSING FACILITIES 

19 SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND 

20 ADDITIONAL DISCLOSABLE PARTIES INFOR21 MATION. 

22 (a) IN GENERAL.—Section 1124 of the Social Secu23 rity Act (42 U.S.C. 1320a–3) is amended by adding at 

24 the end the following new subsection: 


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1 ‘‘(c) REQUIRED DISCLOSURE OF OWNERSHIP AND

2 ADDITIONAL DISCLOSABLE PARTIES INFORMATION.— 

3 ‘‘(1) DISCLOSURE.—A facility (as defined in 

4 paragraph (7)(B)) shall have the information de5 scribed in paragraph (3) available— 

6 ‘‘(A) during the period beginning on the 

7 date of the enactment of this subsection and 

8 ending on the date such information is made 

9 available to the public under section 1411(b) of 

10 the America’s Affordable Health Choices Act of 

11 2009, for submission to the Secretary, the In12 spector General of the Department of Health 

13 and Human Services, the State in which the fa14 cility is located, and the State long-term care 

15 ombudsman in the case where the Secretary, 

16 the Inspector General, the State, or the State 

17 long-term care ombudsman requests such infor18 mation; and 

19 ‘‘(B) beginning on the effective date of the 

20 final regulations promulgated under paragraph 

21 (4)(A), for reporting such information in ac22 cordance with such final regulations. 

23 Nothing in subparagraph (A) shall be construed as 

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1 tive date of the final regulations promulgated under 

2 paragraph (4)(A). 

3 ‘‘(2) PUBLIC AVAILABILITY OF INFORMATION.— 

4 During the period described in paragraph (1)(A), a 

5 facility shall— 

6 ‘‘(A) make the information described in 

7 paragraph (3) available to the public upon re8 quest and update such information as may be 

9 necessary to reflect changes in such informa10 tion; and 

11 ‘‘(B) post a notice of the availability of 

12 such information in the lobby of the facility in 

13 a prominent manner. 

14 ‘‘(3) INFORMATION DESCRIBED.— 

15 ‘‘(A) IN GENERAL.—The following infor16 mation is described in this paragraph: 

17 ‘‘(i) The information described in sub18 sections (a) and (b), subject to subpara19 graph (C). 

20 ‘‘(ii) The identity of and information 

21 on— 

22 ‘‘(I) each member of the gov23 erning body of the facility, including 

24 the name, title, and period of service 

25 of each such member; 


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1 ‘‘(II) each person or entity who is 

2 an officer, director, member, partner, 

3 trustee, or managing employee of the 

4 facility, including the name, title, and 

5 date of start of service of each such 

6 person or entity; and 

7 ‘‘(III) each person or entity who 

8 is an additional disclosable party of 

9 the facility. 

10 ‘‘(iii) The organizational structure of 

11 each person and entity described in sub12 clauses (II) and (III) of clause (ii) and a 

13 description of the relationship of each such 

14 person or entity to the facility and to one 

15 another. 

16 ‘‘(B) SPECIAL RULE WHERE INFORMATION

17 IS ALREADY REPORTED OR SUBMITTED.—To 

18 the extent that information reported by a facil19 ity to the Internal Revenue Service on Form 

20 990, information submitted by a facility to the 

21 Securities and Exchange Commission, or infor22 mation otherwise submitted to the Secretary or 

23 any other Federal agency contains the informa24 tion described in clauses (i), (ii), or (iii) of sub25 paragraph (A), the Secretary may allow, to the 


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1 extent practicable, such Form or such informa2 tion to meet the requirements of paragraph (1) 

3 and to be submitted in a manner specified by 

4 the Secretary. 

5 ‘‘(C) SPECIAL RULE.—In applying sub6 paragraph (A)(i)— 

7 ‘‘(i) with respect to subsections (a) 

8 and (b), ‘ownership or control interest’ 

9 shall include direct or indirect interests, in10 cluding such interests in intermediate enti11 ties; and 

12 ‘‘(ii) subsection (a)(3)(A)(ii) shall in13 clude the owner of a whole or part interest 

14 in any mortgage, deed of trust, note, or 

15 other obligation secured, in whole or in 

16 part, by the entity or any of the property 

17 or assets thereof, if the interest is equal to 

18 or exceeds 5 percent of the total property 

19 or assets of the entirety. 

20 ‘‘(4) REPORTING.— 

21 ‘‘(A) IN GENERAL.—Not later than the 

22 date that is 2 years after the date of the enact23 ment of this subsection, the Secretary shall pro24 mulgate regulations requiring, effective on the 

25 date that is 90 days after the date on which 


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1 such final regulations are published in the Fed2 eral Register, a facility to report the informa3 tion described in paragraph (3) to the Secretary 

4 in a standardized format, and such other regu5 lations as are necessary to carry out this sub6 section. Such final regulations shall ensure that 

7 the facility certifies, as a condition of participa8 tion and payment under the program under 

9 title XVIII or XIX, that the information re10 ported by the facility in accordance with such 

11 final regulations is accurate and current. 

12 ‘‘(B) GUIDANCE.—The Secretary shall pro13 vide guidance and technical assistance to States 

14 on how to adopt the standardized format under 

15 subparagraph (A). 

16 ‘‘(5) NO EFFECT ON EXISTING REPORTING RE17 QUIREMENTS.—Nothing in this subsection shall re18 duce, diminish, or alter any reporting requirement 

19 for a facility that is in effect as of the date of the 

20 enactment of this subsection. 

21 ‘‘(6) DEFINITIONS.—In this subsection: 

22 ‘‘(A) ADDITIONAL DISCLOSABLE PARTY.— 

23 The term ‘additional disclosable party’ means, 

24 with respect to a facility, any person or entity 

25 who— 


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1 ‘‘(i) exercises operational, financial, or 

2 managerial control over the facility or a 

3 part thereof, or provides policies or proce4 dures for any of the operations of the facil5 ity, or provides financial or cash manage6 ment services to the facility; 

7 ‘‘(ii) leases or subleases real property 

8 to the facility, or owns a whole or part in9 terest equal to or exceeding 5 percent of 

10 the total value of such real property; 

11 ‘‘(iii) lends funds or provides a finan12 cial guarantee to the facility in an amount 

13 which is equal to or exceeds $50,000; or 

14 ‘‘(iv) provides management or admin15 istrative services, clinical consulting serv16 ices, or accounting or financial services to 

17 the facility. 

18 ‘‘(B) FACILITY.—The term ‘facility’ means 

19 a disclosing entity which is— 

20 ‘‘(i) a skilled nursing facility (as de21 fined in section 1819(a)); or 

22 ‘‘(ii) a nursing facility (as defined in 

23 section 1919(a)). 

24 ‘‘(C) MANAGING EMPLOYEE.—The term 

25 ‘managing employee’ means, with respect to a 


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1 facility, an individual (including a general man2 ager, business manager, administrator, director, 

3 or consultant) who directly or indirectly man4 ages, advises, or supervises any element of the 

5 practices, finances, or operations of the facility. 

6 ‘‘(D) ORGANIZATIONAL STRUCTURE.—The 

7 term ‘organizational structure’ means, in the 

8 case of— 

9 ‘‘(i) a corporation, the officers, direc10 tors, and shareholders of the corporation 

11 who have an ownership interest in the cor12 poration which is equal to or exceeds 5 

13 percent; 

14 ‘‘(ii) a limited liability company, the 

15 members and managers of the limited li16 ability company (including, as applicable, 

17 what percentage each member and man18 ager has of the ownership interest in the 

19 limited liability company); 

20 ‘‘(iii) a general partnership, the part21 ners of the general partnership; 

22 ‘‘(iv) a limited partnership, the gen23 eral partners and any limited partners of 

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1 ership interest in the limited partnership 

2 which is equal to or exceeds 10 percent; 

3 ‘‘(v) a trust, the trustees of the trust; 

4 ‘‘(vi) an individual, contact informa5 tion for the individual; and 

6 ‘‘(vii) any other person or entity, such 

7 information as the Secretary determines 

8 appropriate.’’. 

9 (b) PUBLIC AVAILABILITY OF INFORMATION.— 

10 (1) IN GENERAL.—Not later than the date that 

11 is 1 year after the date on which the final regula12 tions promulgated under section 1124(c)(4)(A) of 

13 the Social Security Act, as added by subsection (a), 

14 are published in the Federal Register, the informa15 tion reported in accordance with such final regula16 tions shall be made available to the public in accord17 ance with procedures established by the Secretary. 

18 (2) DEFINITIONS.—In this subsection: 

19 (A) NURSING FACILITY.—The term ‘‘nurs20 ing facility’’ has the meaning given such term 

21 in section 1919(a) of the Social Security Act 

22 (42 U.S.C. 1396r(a)). 

23 (B) SECRETARY.—The term ‘‘Secretary’’ 

24 means the Secretary of Health and Human 

25 Services. 


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1 (C) SKILLED NURSING FACILITY.—The 

2 term ‘‘skilled nursing facility’’ has the meaning 

3 given such term in section 1819(a) of the Social 

4 Security Act (42 U.S.C. 1395i–3(a)). 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) SKILLED NURSING FACILITIES.—Section 

7 1819(d)(1) of the Social Security Act (42 U.S.C. 

8 1395i–3(d)(1)) is amended by striking subparagraph 

9 (B) and redesignating subparagraph (C) as subpara10 graph (B). 

11 (2) NURSING FACILITIES.—Section 1919(d)(1) 

12 of the Social Security Act (42 U.S.C. 1396r(d)(1)) 

13 is amended by striking subparagraph (B) and redes14 ignating subparagraph (C) as subparagraph (B). 

15 SEC. 1412. ACCOUNTABILITY REQUIREMENTS. 

16 (a) EFFECTIVE COMPLIANCE AND ETHICS PRO17 GRAMS.— 

18 (1) SKILLED NURSING FACILITIES.—Section 

19 1819(d)(1) of the Social Security Act (42 U.S.C. 

20 1395i–3(d)(1)), as amended by section 1411(c)(1), 

21 is amended by adding at the end the following new 

22 subparagraph: 

23 ‘‘(C) COMPLIANCE AND ETHICS PRO24 GRAMS.— 


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1 ‘‘(i) REQUIREMENT.—On or after the 

2 date that is 36 months after the date of 

3 the enactment of this subparagraph, a 

4 skilled nursing facility shall, with respect 

5 to the entity that operates the facility (in 

6 this subparagraph referred to as the ‘oper7 ating organization’ or ‘organization’), have 

8 in operation a compliance and ethics pro9 gram that is effective in preventing and de10 tecting criminal, civil, and administrative 

11 violations under this Act and in promoting 

12 quality of care consistent with regulations 

13 developed under clause (ii). 

14 ‘‘(ii) DEVELOPMENT OF REGULA15 TIONS.— 

16 ‘‘(I) IN GENERAL.—Not later 

17 than the date that is 2 years after 

18 such date of the enactment, the Sec19 retary, in consultation with the In20 spector General of the Department of 

21 Health and Human Services, shall 

22 promulgate regulations for an effec23 tive compliance and ethics program 

24 for operating organizations, which 


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1 may include a model compliance pro2 gram. 

3 ‘‘(II) DESIGN OF REGULA4 TIONS.—Such regulations with respect 

5 to specific elements or formality of a 

6 program may vary with the size of the 

7 organization, such that larger organi8 zations should have a more formal 

9 and rigorous program and include es10 tablished written policies defining the 

11 standards and procedures to be fol12 lowed by its employees. Such require13 ments shall specifically apply to the 

14 corporate level management of multi15 unit nursing home chains. 

16 ‘‘(III) EVALUATION.—Not later 

17 than 3 years after the date of promul18 gation of regulations under this 

19 clause, the Secretary shall complete 

20 an evaluation of the compliance and 

21 ethics programs required to be estab22 lished under this subparagraph. Such 

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1 ance, or changes in other metrics of 

2 resident quality of care. The Secretary 

3 shall submit to Congress a report on 

4 such evaluation and shall include in 

5 such report such recommendations re6 garding changes in the requirements 

7 for such programs as the Secretary 

8 determines appropriate. 

9 ‘‘(iii) REQUIREMENTS FOR COMPLI10 ANCE AND ETHICS PROGRAMS.—In this 

11 subparagraph, the term ‘compliance and 

12 ethics program’ means, with respect to a 

13 skilled nursing facility, a program of the 

14 operating organization that— 

15 ‘‘(I) has been reasonably de16 signed, implemented, and enforced so 

17 that it generally will be effective in 

18 preventing and detecting criminal, 

19 civil, and administrative violations 

20 under this Act and in promoting qual21 ity of care; and 

22 ‘‘(II) includes at least the re23 quired components specified in clause 

24 (iv). 


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1 ‘‘(iv) REQUIRED COMPONENTS OF

2 PROGRAM.—The required components of a 

3 compliance and ethics program of an orga4 nization are the following: 

5 ‘‘(I) The organization must have 

6 established compliance standards and 

7 procedures to be followed by its em8 ployees, contractors, and other agents 

9 that are reasonably capable of reduc10 ing the prospect of criminal, civil, and 

11 administrative violations under this 

12 Act. 

13 ‘‘(II) Specific individuals within 

14 high-level personnel of the organiza15 tion must have been assigned overall 

16 responsibility to oversee compliance 

17 with such standards and procedures 

18 and have sufficient resources and au19 thority to assure such compliance. 

20 ‘‘(III) The organization must 

21 have used due care not to delegate 

22 substantial discretionary authority to 

23 individuals whom the organization 

24 knew, or should have known through 

25 the exercise of due diligence, had a 


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1 propensity to engage in criminal, civil, 

2 and administrative violations under 

3 this Act. 

4 ‘‘(IV) The organization must 

5 have taken steps to communicate ef6 fectively its standards and procedures 

7 to all employees and other agents, 

8 such as by requiring participation in 

9 training programs or by disseminating 

10 publications that explain in a practical 

11 manner what is required. 

12 ‘‘(V) The organization must have 

13 taken reasonable steps to achieve com14 pliance with its standards, such as by 

15 utilizing monitoring and auditing sys16 tems reasonably designed to detect 

17 criminal, civil, and administrative vio18 lations under this Act by its employ19 ees and other agents and by having in 

20 place and publicizing a reporting sys21 tem whereby employees and other 

22 agents could report violations by oth23 ers within the organization without 

24 fear of retribution. 


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1 ‘‘(VI) The standards must have 

2 been consistently enforced through ap3 propriate disciplinary mechanisms, in4 cluding, as appropriate, discipline of 

5 individuals responsible for the failure 

6 to detect an offense. 

7 ‘‘(VII) After an offense has been 

8 detected, the organization must have 

9 taken all reasonable steps to respond 

10 appropriately to the offense and to 

11 prevent further similar offenses, in12 cluding repayment of any funds to 

13 which it was not entitled and any nec14 essary modification to its program to 

15 prevent and detect criminal, civil, and 

16 administrative violations under this 

17 Act. 

18 ‘‘(VIII) The organization must 

19 periodically undertake reassessment of 

20 its compliance program to identify 

21 changes necessary to reflect changes 

22 within the organization and its facili23 ties. 

24 ‘‘(v) COORDINATION.—The provisions 

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1 spect to a skilled nursing facility in lieu of 

2 section 1874(d).’’. 

3 (2) NURSING FACILITIES.—Section 1919(d)(1) 

4 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

5 as amended by section 1411(c)(2), is amended by 

6 adding at the end the following new subparagraph: 

7 ‘‘(C) COMPLIANCE AND ETHICS PRO8 GRAM.— 

9 ‘‘(i) REQUIREMENT.—On or after the 

10 date that is 36 months after the date of 

11 the enactment of this subparagraph, a 

12 nursing facility shall, with respect to the 

13 entity that operates the facility (in this 

14 subparagraph referred to as the ‘operating 

15 organization’ or ‘organization’), have in op16 eration a compliance and ethics program 

17 that is effective in preventing and detect18 ing criminal, civil, and administrative viola19 tions under this Act and in promoting 

20 quality of care consistent with regulations 

21 developed under clause (ii). 

22 ‘‘(ii) DEVELOPMENT OF REGULA23 TIONS.— 

24 ‘‘(I) IN GENERAL.—Not later 

25 than the date that is 2 years after 


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1 such date of the enactment, the Sec2 retary, in consultation with the In3 spector General of the Department of 

4 Health and Human Services, shall de5 velop regulations for an effective com6 pliance and ethics program for oper7 ating organizations, which may in8 clude a model compliance program. 

9 ‘‘(II) DESIGN OF REGULA10 TIONS.—Such regulations with respect 

11 to specific elements or formality of a 

12 program may vary with the size of the 

13 organization, such that larger organi14 zations should have a more formal 

15 and rigorous program and include es16 tablished written policies defining the 

17 standards and procedures to be fol18 lowed by its employees. Such require19 ments may specifically apply to the 

20 corporate level management of multi21 unit nursing home chains. 

22 ‘‘(III) EVALUATION.—Not later 

23 than 3 years after the date of promul24 gation of regulations under this clause 

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1 uation of the compliance and ethics 

2 programs required to be established 

3 under this subparagraph. Such eval4 uation shall determine if such pro5 grams led to changes in deficiency ci6 tations, changes in quality perform7 ance, or changes in other metrics of 

8 resident quality of care. The Secretary 

9 shall submit to Congress a report on 

10 such evaluation and shall include in 

11 such report such recommendations re12 garding changes in the requirements 

13 for such programs as the Secretary 

14 determines appropriate. 

15 ‘‘(iii) REQUIREMENTS FOR COMPLI16 ANCE AND ETHICS PROGRAMS.—In this 

17 subparagraph, the term ‘compliance and 

18 ethics program’ means, with respect to a 

19 nursing facility, a program of the oper20 ating organization that— 

21 ‘‘(I) has been reasonably de22 signed, implemented, and enforced so 

23 that it generally will be effective in 

24 preventing and detecting criminal, 

25 civil, and administrative violations 


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1 under this Act and in promoting qual2 ity of care; and 

3 ‘‘(II) includes at least the re4 quired components specified in clause 

5 (iv). 

6 ‘‘(iv) REQUIRED COMPONENTS OF

7 PROGRAM.—The required components of a 

8 compliance and ethics program of an orga9 nization are the following: 

10 ‘‘(I) The organization must have 

11 established compliance standards and 

12 procedures to be followed by its em13 ployees and other agents that are rea14 sonably capable of reducing the pros15 pect of criminal, civil, and administra16 tive violations under this Act. 

17 ‘‘(II) Specific individuals within 

18 high-level personnel of the organiza19 tion must have been assigned overall 

20 responsibility to oversee compliance 

21 with such standards and procedures 

22 and has sufficient resources and au23 thority to assure such compliance. 

24 ‘‘(III) The organization must 

25 have used due care not to delegate 


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1 substantial discretionary authority to 

2 individuals whom the organization 

3 knew, or should have known through 

4 the exercise of due diligence, had a 

5 propensity to engage in criminal, civil, 

6 and administrative violations under 

7 this Act. 

8 ‘‘(IV) The organization must 

9 have taken steps to communicate ef10 fectively its standards and procedures 

11 to all employees and other agents, 

12 such as by requiring participation in 

13 training programs or by disseminating 

14 publications that explain in a practical 

15 manner what is required. 

16 ‘‘(V) The organization must have 

17 taken reasonable steps to achieve com18 pliance with its standards, such as by 

19 utilizing monitoring and auditing sys20 tems reasonably designed to detect 

21 criminal, civil, and administrative vio22 lations under this Act by its employ23 ees and other agents and by having in 

24 place and publicizing a reporting sys25 tem whereby employees and other 


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1 agents could report violations by oth2 ers within the organization without 

3 fear of retribution. 

4 ‘‘(VI) The standards must have 

5 been consistently enforced through ap6 propriate disciplinary mechanisms, in7 cluding, as appropriate, discipline of 

8 individuals responsible for the failure 

9 to detect an offense. 

10 ‘‘(VII) After an offense has been 

11 detected, the organization must have 

12 taken all reasonable steps to respond 

13 appropriately to the offense and to 

14 prevent further similar offenses, in15 cluding repayment of any funds to 

16 which it was not entitled and any nec17 essary modification to its program to 

18 prevent and detect criminal, civil, and 

19 administrative violations under this 

20 Act. 

21 ‘‘(VIII) The organization must 

22 periodically undertake reassessment of 

23 its compliance program to identify 

24 changes necessary to reflect changes 


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1 within the organization and its facili2 ties. 

3 ‘‘(v) COORDINATION.—The provisions 

4 of this subparagraph shall apply with re5 spect to a nursing facility in lieu of section 

6 1902(a)(77).’’. 

7 (b) QUALITY ASSURANCE AND PERFORMANCE IM8 PROVEMENT PROGRAM.— 

9 (1) SKILLED NURSING FACILITIES.—Section 

10 1819(b)(1)(B) of the Social Security Act (42 U.S.C. 

11 1396r(b)(1)(B)) is amended— 

12 (A) by striking ‘‘ASSURANCE’’ and insert13 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

14 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

15 (B) by designating the matter beginning 

16 with ‘‘A nursing facility’’ as a clause (i) with 

17 the heading ‘‘IN GENERAL.—’’ and the appro18 priate indentation; and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(ii) QUALITY ASSURANCE AND PER22 FORMANCE IMPROVEMENT PROGRAM.— 

23 ‘‘(I) IN GENERAL.—Not later 

24 than December 31, 2011, the Sec25 retary shall establish and implement a 


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1 quality assurance and performance 

2 improvement program (in this clause 

3 referred to as the ‘QAPI program’) 

4 for skilled nursing facilities, including 

5 multi-unit chains of such facilities. 

6 Under the QAPI program, the Sec7 retary shall establish standards relat8 ing to such facilities and provide tech9 nical assistance to such facilities on 

10 the development of best practices in 

11 order to meet such standards. Not 

12 later than 1 year after the date on 

13 which the regulations are promulgated 

14 under subclause (II), a skilled nursing 

15 facility must submit to the Secretary 

16 a plan for the facility to meet such 

17 standards and implement such best 

18 practices, including how to coordinate 

19 the implementation of such plan with 

20 quality assessment and assurance ac21 tivities conducted under clause (i). 

22 ‘‘(II) REGULATIONS.—The Sec23 retary shall promulgate regulations to 

24 carry out this clause.’’. 


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1 (2) NURSING FACILITIES.—Section 

2 1919(b)(1)(B) of the Social Security Act (42 U.S.C. 

3 1396r(b)(1)(B)) is amended— 

4 (A) by striking ‘‘ASSURANCE’’ and insert5 ing ‘‘ASSURANCE AND QUALITY ASSURANCE

6 AND PERFORMANCE IMPROVEMENT PROGRAM’’; 

7 (B) by designating the matter beginning 

8 with ‘‘A nursing facility’’ as a clause (i) with 

9 the heading ‘‘IN GENERAL.—’’ and the appro10 priate indentation; and 

11 (C) by adding at the end the following new 

12 clause: 

13 ‘‘(ii) QUALITY ASSURANCE AND PER14 FORMANCE IMPROVEMENT PROGRAM.— 

15 ‘‘(I) IN GENERAL.—Not later 

16 than December 31, 2011, the Sec17 retary shall establish and implement a 

18 quality assurance and performance 

19 improvement program (in this clause 

20 referred to as the ‘QAPI program’) 

21 for nursing facilities, including multi22 unit chains of such facilities. Under 

23 the QAPI program, the Secretary 

24 shall establish standards relating to 

25 such facilities and provide technical 


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1 assistance to such facilities on the de2 velopment of best practices in order to 

3 meet such standards. Not later than 1 

4 year after the date on which the regu5 lations are promulgated under sub6 clause (II), a nursing facility must 

7 submit to the Secretary a plan for the 

8 facility to meet such standards and 

9 implement such best practices, includ10 ing how to coordinate the implementa11 tion of such plan with quality assess12 ment and assurance activities con13 ducted under clause (i). 

14 ‘‘(II) REGULATIONS.—The Sec15 retary shall promulgate regulations to 

16 carry out this clause.’’. 

17 (3) PROPOSAL TO REVISE QUALITY ASSURANCE

18 AND PERFORMANCE IMPROVEMENT PROGRAMS.— 

19 The Secretary shall include in the proposed rule 

20 published under section 1888(e) of the Social Secu21 rity Act (42 U.S.C. 1395yy(e)(5)(A)) for the subse22 quent fiscal year to the extent otherwise authorized 

23 under section 1819(b)(1)(B) or 1819(d)(1)(C) of the 

24 Social Security Act or other statutory or regulatory 

25 authority, one or more proposals for skilled nursing 


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1 facilities to modify and strengthen quality assurance 

2 and performance improvement programs in such fa3 cilities. At the time of publication of such proposed 

4 rule and to the extent otherwise authorized under 

5 section 1919(b)(1)(B) or 1919(d)(1)(C) of such Act 

6 or other regulatory authority. 

7 (4) FACILITY PLAN.—Not later than 1 year 

8 after the date on which the regulations are promul9 gated under subclause (II) of clause (ii) of sections 

10 1819(b)(1)(B) and 1919(b)(1)(B) of the Social Se11 curity Act, as added by paragraphs (1) and (2), a 

12 skilled nursing facility and a nursing facility must 

13 submit to the Secretary a plan for the facility to 

14 meet the standards under such regulations and im15 plement such best practices, including how to coordi16 nate the implementation of such plan with quality 

17 assessment and assurance activities conducted under 

18 clause (i) of such sections. 

19 (c) GAO STUDY ON NURSING FACILITY UNDER20 CAPITALIZATION.— 

21 (1) IN GENERAL.—The Comptroller General of 

22 the United States shall conduct a study that exam23 ines the following: 

24 (A) The extent to which corporations that 

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1 ties, taking into account ownership type (includ2 ing private equity and control interests), are 

3 undercapitalizing such facilities. 

4 (B) The effects of such undercapitalization 

5 on quality of care, including staffing and food 

6 costs, at such facilities. 

7 (C) Options to address such undercapital8 ization, such as requirements relating to surety 

9 bonds, liability insurance, or minimum capital10 ization. 

11 (2) REPORT.—Not later than 18 months after 

12 the date of the enactment of this Act, the Comp13 troller General shall submit to Congress a report on 

14 the study conducted under paragraph (1). 

15 (3) NURSING FACILITY.—In this subsection, the 

16 term ‘‘nursing facility’’ includes a skilled nursing fa17 cility. 

18 SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE. 

19 (a) SKILLED NURSING FACILITIES.— 

20 (1) IN GENERAL.—Section 1819 of the Social 

21 Security Act (42 U.S.C. 1395i–3) is amended— 

22 (A) by redesignating subsection (i) as sub23 section (j); and 

24 (B) by inserting after subsection (h) the 

25 following new subsection: 


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1 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

2 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA3 TION.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 ensure that the Department of Health and 

6 Human Services includes, as part of the infor7 mation provided for comparison of nursing 

8 homes on the official Internet website of the 

9 Federal Government for Medicare beneficiaries 

10 (commonly referred to as the ‘Nursing Home 

11 Compare’ Medicare website) (or a successor 

12 website), the following information in a manner 

13 that is prominent, easily accessible, readily un14 derstandable to consumers of long-term care 

15 services, and searchable: 

16 ‘‘(i) Information that is reported to 

17 the Secretary under section 1124(c)(4). 

18 ‘‘(ii) Information on the ‘Special 

19 Focus Facility program’ (or a successor 

20 program) established by the Centers for 

21 Medicare and Medicaid Services, according 

22 to procedures established by the Secretary. 

23 Such procedures shall provide for the in24 clusion of information with respect to, and 


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1 the names and locations of, those facilities 

2 that, since the previous quarter— 

3 ‘‘(I) were newly enrolled in the 

4 program; 

5 ‘‘(II) are enrolled in the program 

6 and have failed to significantly im7 prove; 

8 ‘‘(III) are enrolled in the pro9 gram and have significantly improved; 

10 ‘‘(IV) have graduated from the 

11 program; and 

12 ‘‘(V) have closed voluntarily or 

13 no longer participate under this title. 

14 ‘‘(iii) Staffing data for each facility 

15 (including resident census data and data 

16 on the hours of care provided per resident 

17 per day) based on data submitted under 

18 subsection (b)(8)(C), including information 

19 on staffing turnover and tenure, in a for20 mat that is clearly understandable to con21 sumers of long-term care services and al22 lows such consumers to compare dif23 ferences in staffing between facilities and 

24 State and national averages for the facili25 ties. Such format shall include— 


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1 ‘‘(I) concise explanations of how 

2 to interpret the data (such as a plain 

3 English explanation of data reflecting 

4 ‘nursing home staff hours per resident 

5 day’); 

6 ‘‘(II) differences in types of staff 

7 (such as training associated with dif8 ferent categories of staff); 

9 ‘‘(III) the relationship between 

10 nurse staffing levels and quality of 

11 care; and 

12 ‘‘(IV) an explanation that appro13 priate staffing levels vary based on 

14 patient case mix. 

15 ‘‘(iv) Links to State Internet websites 

16 with information regarding State survey 

17 and certification programs, links to Form 

18 2567 State inspection reports (or a suc19 cessor form) on such websites, information 

20 to guide consumers in how to interpret and 

21 understand such reports, and the facility 

22 plan of correction or other response to 

23 such report. 

24 ‘‘(v) The standardized complaint form 

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1 ing explanatory material on what com2 plaint forms are, how they are used, and 

3 how to file a complaint with the State sur4 vey and certification program and the 

5 State long-term care ombudsman program. 

6 ‘‘(vi) Summary information on the 

7 number, type, severity, and outcome of 

8 substantiated complaints. 

9 ‘‘(vii) The number of adjudicated in10 stances of criminal violations by employees 

11 of a a nursing facility— 

12 ‘‘(I) that were committed inside 

13 the facility; 

14 ‘‘(II) with respect to such in15 stances of violations or crimes com16 mitted inside of the facility that were 

17 the violations or crimes of abuse, ne18 glect, and exploitation, criminal sexual 

19 abuse, or other violations or crimes 

20 that resulted in serious bodily injury; 

21 and 

22 ‘‘(III) the number of civil mone23 tary penalties levied against the facil24 ity, employees, contractors, and other 

25 agents. 


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1 ‘‘(B) DEADLINE FOR PROVISION OF INFOR2 MATION.— 

3 ‘‘(i) IN GENERAL.—Except as pro4 vided in clause (ii), the Secretary shall en5 sure that the information described in sub6 paragraph (A) is included on such website 

7 (or a successor website) not later than 1 

8 year after the date of the enactment of this 

9 subsection. 

10 ‘‘(ii) EXCEPTION.—The Secretary 

11 shall ensure that the information described 

12 in subparagraph (A)(i) and (A)(iii) is in13 cluded on such website (or a successor 

14 website) not later than the date on which 

15 the requirements under section 1124(c)(4) 

16 and subsection (b)(8)(C)(ii) are imple17 mented. 

18 ‘‘(2) REVIEW AND MODIFICATION OF

19 WEBSITE.— 

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

21 establish a process— 

22 ‘‘(i) to review the accuracy, clarity of 

23 presentation, timeliness, and comprehen24 siveness of information reported on such 


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1 website as of the day before the date of the 

2 enactment of this subsection; and 

3 ‘‘(ii) not later than 1 year after the 

4 date of the enactment of this subsection, to 

5 modify or revamp such website in accord6 ance with the review conducted under 

7 clause (i). 

8 ‘‘(B) CONSULTATION.—In conducting the 

9 review under subparagraph (A)(i), the Sec10 retary shall consult with— 

11 ‘‘(i) State long-term care ombudsman 

12 programs; 

13 ‘‘(ii) consumer advocacy groups; 

14 ‘‘(iii) provider stakeholder groups; and 

15 ‘‘(iv) any other representatives of pro16 grams or groups the Secretary determines 

17 appropriate.’’. 

18 (2) TIMELINESS OF SUBMISSION OF SURVEY

19 AND CERTIFICATION INFORMATION.— 

20 (A) IN GENERAL.—Section 1819(g)(5) of 

21 the Social Security Act (42 U.S.C. 1395i– 

22 3(g)(5)) is amended by adding at the end the 

23 following new subparagraph: 

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1 RETARY.—In order to improve the timeliness of 

2 information made available to the public under 

3 subparagraph (A) and provided on the Nursing 

4 Home Compare Medicare website under sub5 section (i), each State shall submit information 

6 respecting any survey or certification made re7 specting a skilled nursing facility (including any 

8 enforcement actions taken by the State) to the 

9 Secretary not later than the date on which the 

10 State sends such information to the facility. 

11 The Secretary shall use the information sub12 mitted under the preceding sentence to update 

13 the information provided on the Nursing Home 

14 Compare Medicare website as expeditiously as 

15 practicable but not less frequently than quar16 terly.’’. 

17 (B) EFFECTIVE DATE.—The amendment 

18 made by this paragraph shall take effect 1 year 

19 after the date of the enactment of this Act. 

20 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec21 tion 1819(f) of such Act is amended by adding at 

22 the end the following new paragraph: 

23 ‘‘(8) SPECIAL FOCUS FACILITY PROGRAM.— 

24 ‘‘(A) IN GENERAL.—The Secretary shall 

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1 forcement of requirements for skilled nursing 

2 facilities that the Secretary has identified as 

3 having substantially failed to meet applicable 

4 requirement of this Act. 

5 ‘‘(B) PERIODIC SURVEYS.—Under such 

6 program the Secretary shall conduct surveys of 

7 each facility in the program not less than once 

8 every 6 months.’’. 

9 (b) NURSING FACILITIES.— 

10 (1) IN GENERAL.—Section 1919 of the Social 

11 Security Act (42 U.S.C. 1396r) is amended— 

12 (A) by redesignating subsection (i) as sub13 section (j); and 

14 (B) by inserting after subsection (h) the 

15 following new subsection: 

16 ‘‘(i) NURSING HOME COMPARE WEBSITE.— 

17 ‘‘(1) INCLUSION OF ADDITIONAL INFORMA18 TION.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 ensure that the Department of Health and 

21 Human Services includes, as part of the infor22 mation provided for comparison of nursing 

23 homes on the official Internet website of the 

24 Federal Government for Medicare beneficiaries 

25 (commonly referred to as the ‘Nursing Home 


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1 Compare’ Medicare website) (or a successor 

2 website), the following information in a manner 

3 that is prominent, easily accessible, readily un4 derstandable to consumers of long-term care 

5 services, and searchable: 

6 ‘‘(i) Staffing data for each facility (in7 cluding resident census data and data on 

8 the hours of care provided per resident per 

9 day) based on data submitted under sub10 section (b)(8)(C)(ii), including information 

11 on staffing turnover and tenure, in a for12 mat that is clearly understandable to con13 sumers of long-term care services and al14 lows such consumers to compare dif15 ferences in staffing between facilities and 

16 State and national averages for the facili17 ties. Such format shall include— 

18 ‘‘(I) concise explanations of how 

19 to interpret the data (such as plain 

20 English explanation of data reflecting 

21 ‘nursing home staff hours per resident 

22 day’); 

23 ‘‘(II) differences in types of staff 

24 (such as training associated with dif25 ferent categories of staff); 


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1 ‘‘(III) the relationship between 

2 nurse staffing levels and quality of 

3 care; and 

4 ‘‘(IV) an explanation that appro5 priate staffing levels vary based on 

6 patient case mix. 

7 ‘‘(ii) Links to State Internet websites 

8 with information regarding State survey 

9 and certification programs, links to Form 

10 2567 State inspection reports (or a suc11 cessor form) on such websites, information 

12 to guide consumers in how to interpret and 

13 understand such reports, and the facility 

14 plan of correction or other response to 

15 such report. 

16 ‘‘(iii) The standardized complaint 

17 form developed under subsection (f)(10), 

18 including explanatory material on what 

19 complaint forms are, how they are used, 

20 and how to file a complaint with the State 

21 survey and certification program and the 

22 State long-term care ombudsman program. 

23 ‘‘(iv) Summary information on the 

24 number, type, severity, and outcome of 

25 substantiated complaints. 


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1 ‘‘(v) The number of adjudicated in2 stances of criminal violations by employees 

3 of a nursing facility— 

4 ‘‘(I) that were committed inside 

5 of the facility; and 

6 ‘‘(II) with respect to such in7 stances of violations or crimes com8 mitted outside of the facility, that 

9 were the violations or crimes that re10 sulted in the serious bodily injury of 

11 an elder. 

12 ‘‘(B) DEADLINE FOR PROVISION OF INFOR13 MATION.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), the Secretary shall en16 sure that the information described in sub17 paragraph (A) is included on such website 

18 (or a successor website) not later than 1 

19 year after the date of the enactment of this 

20 subsection. 

21 ‘‘(ii) EXCEPTION.—The Secretary 

22 shall ensure that the information described 

23 in subparagraph (A)(i) and (A)(iii) is in24 cluded on such website (or a successor 

25 website) not later than the date on which 


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1 the requirements under section 1124(c)(4) 

2 and subsection (b)(8)(C)(ii) are imple3 mented. 

4 ‘‘(2) REVIEW AND MODIFICATION OF

5 WEBSITE.— 

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

7 establish a process— 

8 ‘‘(i) to review the accuracy, clarity of 

9 presentation, timeliness, and comprehen10 siveness of information reported on such 

11 website as of the day before the date of the 

12 enactment of this subsection; and 

13 ‘‘(ii) not later than 1 year after the 

14 date of the enactment of this subsection, to 

15 modify or revamp such website in accord16 ance with the review conducted under 

17 clause (i). 

18 ‘‘(B) CONSULTATION.—In conducting the 

19 review under subparagraph (A)(i), the Sec20 retary shall consult with— 

21 ‘‘(i) State long-term care ombudsman 

22 programs; 

23 ‘‘(ii) consumer advocacy groups; 

24 ‘‘(iii) provider stakeholder groups; 


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1 ‘‘(iv) skilled nursing facility employees 

2 and their representatives; and 

3 ‘‘(v) any other representatives of pro4 grams or groups the Secretary determines 

5 appropriate.’’. 

6 (2) TIMELINESS OF SUBMISSION OF SURVEY

7 AND CERTIFICATION INFORMATION.— 

8 (A) IN GENERAL.—Section 1919(g)(5) of 

9 the Social Security Act (42 U.S.C. 1396r(g)(5)) 

10 is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(E) SUBMISSION OF SURVEY AND CER13 TIFICATION INFORMATION TO THE SEC14 RETARY.—In order to improve the timeliness of 

15 information made available to the public under 

16 subparagraph (A) and provided on the Nursing 

17 Home Compare Medicare website under sub18 section (i), each State shall submit information 

19 respecting any survey or certification made re20 specting a nursing facility (including any en21 forcement actions taken by the State) to the 

22 Secretary not later than the date on which the 

23 State sends such information to the facility. 

24 The Secretary shall use the information sub25 mitted under the preceding sentence to update 


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1 the information provided on the Nursing Home 

2 Compare Medicare website as expeditiously as 

3 practicable but not less frequently than quar4 terly.’’. 

5 (B) EFFECTIVE DATE.—The amendment 

6 made by this paragraph shall take effect 1 year 

7 after the date of the enactment of this Act. 

8 (3) SPECIAL FOCUS FACILITY PROGRAM.—Sec9 tion 1919(f) of such Act is amended by adding at 

10 the end of the following new paragraph: 

11 ‘‘(10) SPECIAL FOCUS FACILITY PROGRAM.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 conduct a special focus facility program for en14 forcement of requirements for nursing facilities 

15 that the Secretary has identified as having sub16 stantially failed to meet applicable requirements 

17 of this Act. 

18 ‘‘(B) PERIODIC SURVEYS.—Under such 

19 program the Secretary shall conduct surveys of 

20 each facility in the program not less often than 

21 once every 6 months.’’. 

22 (c) AVAILABILITY OF REPORTS ON SURVEYS, CER23 TIFICATIONS, AND COMPLAINT INVESTIGATIONS.— 

24 (1) SKILLED NURSING FACILITIES.—Section 

25 1819(d)(1) of the Social Security Act (42 U.S.C. 


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1 1395i–3(d)(1)), as amended by sections 1411 and 

2 1412, is amended by adding at the end the following 

3 new subparagraph: 

4 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI5 CATION, AND COMPLAINT INVESTIGATION RE6 PORTS.—A skilled nursing facility must— 

7 ‘‘(i) have reports with respect to any 

8 surveys, certifications, and complaint in9 vestigations made respecting the facility 

10 during the 3 preceding years available for 

11 any individual to review upon request; and 

12 ‘‘(ii) post notice of the availability of 

13 such reports in areas of the facility that 

14 are prominent and accessible to the public. 

15 The facility shall not make available under 

16 clause (i) identifying information about com17 plainants or residents.’’. 

18 (2) NURSING FACILITIES.—Section 1919(d)(1) 

19 of the Social Security Act (42 U.S.C. 1396r(d)(1)), 

20 as amended by sections 1411 and 1412, is amended 

21 by adding at the end the following new subpara22 graph: 

23 ‘‘(D) AVAILABILITY OF SURVEY, CERTIFI24 CATION, AND COMPLAINT INVESTIGATION RE25 PORTS.—A nursing facility must— 


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1 ‘‘(i) have reports with respect to any 

2 surveys, certifications, and complaint in3 vestigations made respecting the facility 

4 during the 3 preceding years available for 

5 any individual to review upon request; and 

6 ‘‘(ii) post notice of the availability of 

7 such reports in areas of the facility that 

8 are prominent and accessible to the public. 

9 The facility shall not make available under 

10 clause (i) identifying information about com11 plainants or residents.’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall take effect 1 year after the 

14 date of the enactment of this Act. 

15 (d) GUIDANCE TO STATES ON FORM 2567 STATE IN16 SPECTION REPORTS AND COMPLAINT INVESTIGATION RE17 PORTS.— 

18 (1) GUIDANCE.—The Secretary of Health and 

19 Human Services (in this subtitle referred to as the 

20 ‘‘Secretary’’) shall provide guidance to States on 

21 how States can establish electronic links to Form 

22 2567 State inspection reports (or a successor form), 

23 complaint investigation reports, and a facility’s plan 

24 of correction or other response to such Form 2567 

25 State inspection reports (or a successor form) on the 


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1 Internet website of the State that provides informa2 tion on skilled nursing facilities and nursing facili3 ties and the Secretary shall, if possible, include such 

4 information on Nursing Home Compare. 

5 (2) REQUIREMENT.—Section 1902(a)(9) of the 

6 Social Security Act (42 U.S.C. 1396a(a)(9)) is 

7 amended— 

8 (A) by striking ‘‘and’’ at the end of sub9 paragraph (B); 

10 (B) by striking the semicolon at the end of 

11 subparagraph (C) and inserting ‘‘, and’’; and 

12 (C) by adding at the end the following new 

13 subparagraph: 

14 ‘‘(D) that the State maintain a consumer15 oriented website providing useful information to 

16 consumers regarding all skilled nursing facili17 ties and all nursing facilities in the State, in18 cluding for each facility, Form 2567 State in19 spection reports (or a successor form), com20 plaint investigation reports, the facility’s plan of 

21 correction, and such other information that the 

22 State or the Secretary considers useful in as23 sisting the public to assess the quality of long 

24 term care options and the quality of care pro25 vided by individual facilities;’’. 


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1 (3) DEFINITIONS.—In this subsection: 

2 (A) NURSING FACILITY.—The term ‘‘nurs3 ing facility’’ has the meaning given such term 

4 in section 1919(a) of the Social Security Act 

5 (42 U.S.C. 1396r(a)). 

6 (B) SECRETARY.—The term ‘‘Secretary’’ 

7 means the Secretary of Health and Human 

8 Services. 

9 (C) SKILLED NURSING FACILITY.—The 

10 term ‘‘skilled nursing facility’’ has the meaning 

11 given such term in section 1819(a) of the Social 

12 Security Act (42 U.S.C. 1395i–3(a)). 

13 SEC. 1414. REPORTING OF EXPENDITURES. 

14 Section 1888 of the Social Security Act (42 U.S.C. 

15 1395yy) is amended by adding at the end the following 

16 new subsection: 

17 ‘‘(f) REPORTING OF DIRECT CARE EXPENDI18 TURES.— 

19 ‘‘(1) IN GENERAL.—For cost reports submitted 

20 under this title for cost reporting periods beginning 

21 on or after the date that is 3 years after the date 

22 of the enactment of this subsection, skilled nursing 

23 facilities shall separately report expenditures for 

24 wages and benefits for direct care staff (breaking 

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1 fessional nurses, certified nurse assistants, and other 

2 medical and therapy staff). 

3 ‘‘(2) MODIFICATION OF FORM.—The Secretary, 

4 in consultation with private sector accountants expe5 rienced with skilled nursing facility cost reports, 

6 shall redesign such reports to meet the requirement 

7 of paragraph (1) not later than 1 year after the date 

8 of the enactment of this subsection. 

9 ‘‘(3) CATEGORIZATION BY FUNCTIONAL AC10 COUNTS.—Not later than 30 months after the date 

11 of the enactment of this subsection, the Secretary, 

12 working in consultation with the Medicare Payment 

13 Advisory Commission, the Inspector General of the 

14 Department of Health and Human Services, and 

15 other expert parties the Secretary determines appro16 priate, shall take the expenditures listed on cost re17 ports, as modified under paragraph (1), submitted 

18 by skilled nursing facilities and categorize such ex19 penditures, regardless of any source of payment for 

20 such expenditures, for each skilled nursing facility 

21 into the following functional accounts on an annual 

22 basis: 

23 ‘‘(A) Spending on direct care services (in24 cluding nursing, therapy, and medical services). 


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1 ‘‘(B) Spending on indirect care (including 

2 housekeeping and dietary services). 

3 ‘‘(C) Capital assets (including building and 

4 land costs). 

5 ‘‘(D) Administrative services costs. 

6 ‘‘(4) AVAILABILITY OF INFORMATION SUB7 MITTED.—The Secretary shall establish procedures 

8 to make information on expenditures submitted 

9 under this subsection readily available to interested 

10 parties upon request, subject to such requirements 

11 as the Secretary may specify under the procedures 

12 established under this paragraph.’’. 

13 SEC. 1415. STANDARDIZED COMPLAINT FORM. 

14 (a) SKILLED NURSING FACILITIES.— 

15 (1) DEVELOPMENT BY THE SECRETARY.—Sec16 tion 1819(f) of the Social Security Act (42 U.S.C. 

17 1395i–3(f)), as amended by section 1413(a)(3), is 

18 amended by adding at the end the following new 

19 paragraph: 

20 ‘‘(9) STANDARDIZED COMPLAINT FORM.—The 

21 Secretary shall develop a standardized complaint 

22 form for use by a resident (or a person acting on the 

23 resident’s behalf) in filing a complaint with a State 

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1 term care ombudsman program with respect to a 

2 skilled nursing facility.’’. 

3 (2) STATE REQUIREMENTS.—Section 1819(e) 

4 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

5 amended by adding at the end the following new 

6 paragraph: 

7 ‘‘(6) COMPLAINT PROCESSES AND WHISTLE8 BLOWER PROTECTION.— 

9 ‘‘(A) COMPLAINT FORMS.—The State must 

10 make the standardized complaint form devel11 oped under subsection (f)(9) available upon re12 quest to— 

13 ‘‘(i) a resident of a skilled nursing fa14 cility; 

15 ‘‘(ii) any person acting on the resi16 dent’s behalf; and 

17 ‘‘(iii) any person who works at a 

18 skilled nursing facility or is a representa19 tive of such a worker. 

20 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

21 The State must establish a complaint resolution 

22 process in order to ensure that a resident, the 

23 legal representative of a resident of a skilled 

24 nursing facility, or other responsible party is 

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1 resentative, or responsible party has com2 plained, in good faith, about the quality of care 

3 or other issues relating to the skilled nursing 

4 facility, that the legal representative of a resi5 dent of a skilled nursing facility or other re6 sponsible party is not denied access to such 

7 resident or otherwise retaliated against if such 

8 representative party has complained, in good 

9 faith, about the quality of care provided by the 

10 facility or other issues relating to the facility, 

11 and that a person who works at a skilled nurs12 ing facility is not retaliated against if the work13 er has complained, in good faith, about quality 

14 of care or services or an issue relating to the 

15 quality of care or services provided at the facil16 ity, whether the resident, legal representative, 

17 other responsible party, or worker used the 

18 form developed under subsection (f)(9) or some 

19 other method for submitting the complaint. 

20 Such complaint resolution process shall in21 clude— 

22 ‘‘(i) procedures to assure accurate 

23 tracking of complaints received, including 

24 notification to the complainant that a com25 plaint has been received; 


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1 ‘‘(ii) procedures to determine the like2 ly severity of a complaint and for the in3 vestigation of the complaint; 

4 ‘‘(iii) deadlines for responding to a 

5 complaint and for notifying the complain6 ant of the outcome of the investigation; 

7 and 

8 ‘‘(iv) procedures to ensure that the 

9 identity of the complainant will be kept 

10 confidential. 

11 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

12 ‘‘(i) PROHIBITION AGAINST RETALIA13 TION.—No person who works at a skilled 

14 nursing facility may be penalized, discrimi15 nated, or retaliated against with respect to 

16 any aspect of employment, including dis17 charge, promotion, compensation, terms, 

18 conditions, or privileges of employment, or 

19 have a contract for services terminated, be20 cause the person (or anyone acting at the 

21 person’s request) complained, in good 

22 faith, about the quality of care or services 

23 provided by a nursing facility or about 

24 other issues relating to quality of care or 

25 services, whether using the form developed 


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1 under subsection (f)(9) or some other 

2 method for submitting the complaint. 

3 ‘‘(ii) RETALIATORY REPORTING.—A 

4 skilled nursing facility may not file a com5 plaint or a report against a person who 

6 works (or has worked at the facility with 

7 the appropriate State professional discipli8 nary agency because the person (or anyone 

9 acting at the person’s request) complained 

10 in good faith, as described in clause (i). 

11 ‘‘(iii) COMMENCEMENT OF ACTION.— 

12 Any person who believes the person has 

13 been penalized, discriminated, or retaliated 

14 against or had a contract for services ter15 minated in violation of clause (i) or against 

16 whom a complaint has been filed in viola17 tion of clause (ii) may bring an action at 

18 law or equity in the appropriate district 

19 court of the United States, which shall 

20 have jurisdiction over such action without 

21 regard to the amount in controversy or the 

22 citizenship of the parties, and which shall 

23 have jurisdiction to grant complete relief, 

24 including, but not limited to, injunctive re25 lief (such as reinstatement, compensatory 


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1 damages (which may include reimburse2 ment of lost wages, compensation, and 

3 benefits), costs of litigation (including rea4 sonable attorney and expert witness fees), 

5 exemplary damages where appropriate, and 

6 such other relief as the court deems just 

7 and proper. 

8 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

9 rights protected by this paragraph may not 

10 be diminished by contract or other agree11 ment, and nothing in this paragraph shall 

12 be construed to diminish any greater or 

13 additional protection provided by Federal 

14 or State law or by contract or other agree15 ment. 

16 ‘‘(v) REQUIREMENT TO POST NOTICE

17 OF EMPLOYEE RIGHTS.—Each skilled 

18 nursing facility shall post conspicuously in 

19 an appropriate location a sign (in a form 

20 specified by the Secretary) specifying the 

21 rights of persons under this paragraph and 

22 including a statement that an employee 

23 may file a complaint with the Secretary 

24 against a skilled nursing facility that vio25 lates the provisions of this paragraph and 


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1 information with respect to the manner of 

2 filing such a complaint. 

3 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

4 in this paragraph shall be construed as pre5 venting a resident of a skilled nursing facility 

6 (or a person acting on the resident’s behalf) 

7 from submitting a complaint in a manner or 

8 format other than by using the standardized 

9 complaint form developed under subsection 

10 (f)(9) (including submitting a complaint orally). 

11 ‘‘(E) GOOD FAITH DEFINED.—For pur12 poses of this paragraph, an individual shall be 

13 deemed to be acting in good faith with respect 

14 to the filing of a complaint if the individual rea15 sonably believes— 

16 ‘‘(i) the information reported or dis17 closed in the complaint is true; and 

18 ‘‘(ii) the violation of this title has oc19 curred or may occur in relation to such in20 formation.’’. 

21 (b) NURSING FACILITIES.— 

22 (1) DEVELOPMENT BY THE SECRETARY.—Sec23 tion 1919(f) of the Social Security Act (42 U.S.C. 

24 1395i–3(f)), as amended by section 1413(b), is 


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1 amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(11) STANDARDIZED COMPLAINT FORM.—The 

4 Secretary shall develop a standardized complaint 

5 form for use by a resident (or a person acting on the 

6 resident’s behalf) in filing a complaint with a State 

7 survey and certification agency and a State long8 term care ombudsman program with respect to a 

9 nursing facility.’’. 

10 (2) STATE REQUIREMENTS.—Section 1919(e) 

11 of the Social Security Act (42 U.S.C. 1395i–3(e)) is 

12 amended by adding at the end the following new 

13 paragraph: 

14 ‘‘(8) COMPLAINT PROCESSES AND WHISTLE15 BLOWER PROTECTION.— 

16 ‘‘(A) COMPLAINT FORMS.—The State must 

17 make the standardized complaint form devel18 oped under subsection (f)(11) available upon re19 quest to— 

20 ‘‘(i) a resident of a nursing facility; 

21 ‘‘(ii) any person acting on the resi22 dent’s behalf; and 

23 ‘‘(iii) any person who works at a nurs24 ing facility or a representative of such a 

25 worker. 


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1 ‘‘(B) COMPLAINT RESOLUTION PROCESS.— 

2 The State must establish a complaint resolution 

3 process in order to ensure that a resident, the 

4 legal representative of a resident of a nursing 

5 facility, or other responsible party is not retali6 ated against if the resident, legal representa7 tive, or responsible party has complained, in 

8 good faith, about the quality of care or other 

9 issues relating to the nursing facility, that the 

10 legal representative of a resident of a nursing 

11 facility or other responsible party is not denied 

12 access to such resident or otherwise retaliated 

13 against if such representative party has com14 plained, in good faith, about the quality of care 

15 provided by the facility or other issues relating 

16 to the facility, and that a person who works at 

17 a nursing facility is not retaliated against if the 

18 worker has complained, in good faith, about 

19 quality of care or services or an issue relating 

20 to the quality of care or services provided at the 

21 facility, whether the resident, legal representa22 tive, other responsible party, or worker used the 

23 form developed under subsection (f)(11) or 

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1 plaint. Such complaint resolution process shall 

2 include— 

3 ‘‘(i) procedures to assure accurate 

4 tracking of complaints received, including 

5 notification to the complainant that a com6 plaint has been received; 

7 ‘‘(ii) procedures to determine the like8 ly severity of a complaint and for the in9 vestigation of the complaint; 

10 ‘‘(iii) deadlines for responding to a 

11 complaint and for notifying the complain12 ant of the outcome of the investigation; 

13 and 

14 ‘‘(iv) procedures to ensure that the 

15 identity of the complainant will be kept 

16 confidential. 

17 ‘‘(C) WHISTLEBLOWER PROTECTION.— 

18 ‘‘(i) PROHIBITION AGAINST RETALIA19 TION.—No person who works at a nursing 

20 facility may be penalized, discriminated, or 

21 retaliated against with respect to any as22 pect of employment, including discharge, 

23 promotion, compensation, terms, condi24 tions, or privileges of employment, or have 

25 a contract for services terminated, because 


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1 the person (or anyone acting at the per2 son’s request) complained, in good faith, 

3 about the quality of care or services pro4 vided by a nursing facility or about other 

5 issues relating to quality of care or serv6 ices, whether using the form developed 

7 under subsection (f)(11) or some other 

8 method for submitting the complaint. 

9 ‘‘(ii) RETALIATORY REPORTING.—A 

10 nursing facility may not file a complaint or 

11 a report against a person who works (or 

12 has worked at the facility with the appro13 priate State professional disciplinary agen14 cy because the person (or anyone acting at 

15 the person’s request) complained in good 

16 faith, as described in clause (i). 

17 ‘‘(iii) COMMENCEMENT OF ACTION.— 

18 Any person who believes the person has 

19 been penalized, discriminated, or retaliated 

20 against or had a contract for services ter21 minated in violation of clause (i) or against 

22 whom a complaint has been filed in viola23 tion of clause (ii) may bring an action at 

24 law or equity in the appropriate district 

25 court of the United States, which shall 


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1 have jurisdiction over such action without 

2 regard to the amount in controversy or the 

3 citizenship of the parties, and which shall 

4 have jurisdiction to grant complete relief, 

5 including, but not limited to, injunctive re6 lief (such as reinstatement, compensatory 

7 damages (which may include reimburse8 ment of lost wages, compensation, and 

9 benefits), costs of litigation (including rea10 sonable attorney and expert witness fees), 

11 exemplary damages where appropriate, and 

12 such other relief as the court deems just 

13 and proper. 

14 ‘‘(iv) RIGHTS NOT WAIVABLE.—The 

15 rights protected by this paragraph may not 

16 be diminished by contract or other agree17 ment, and nothing in this paragraph shall 

18 be construed to diminish any greater or 

19 additional protection provided by Federal 

20 or State law or by contract or other agree21 ment. 

22 ‘‘(v) REQUIREMENT TO POST NOTICE

23 OF EMPLOYEE RIGHTS.—Each nursing fa24 cility shall post conspicuously in an appro25 priate location a sign (in a form specified 


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1 by the Secretary) specifying the rights of 

2 persons under this paragraph and includ3 ing a statement that an employee may file 

4 a complaint with the Secretary against a 

5 nursing facility that violates the provisions 

6 of this paragraph and information with re7 spect to the manner of filing such a com8 plaint. 

9 ‘‘(D) RULE OF CONSTRUCTION.—Nothing 

10 in this paragraph shall be construed as pre11 venting a resident of a nursing facility (or a 

12 person acting on the resident’s behalf) from 

13 submitting a complaint in a manner or format 

14 other than by using the standardized complaint 

15 form developed under subsection (f)(11) (in16 cluding submitting a complaint orally). 

17 ‘‘(E) GOOD FAITH DEFINED.—For pur18 poses of this paragraph, an individual shall be 

19 deemed to be acting in good faith with respect 

20 to the filing of a complaint if the individual rea21 sonably believes— 

22 ‘‘(i) the information reported or dis23 closed in the complaint is true; and 


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1 ‘‘(ii) the violation of this title has oc2 curred or may occur in relation to such in3 formation.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect 1 year after the date of the 

6 enactment of this Act. 

7 SEC. 1416. ENSURING STAFFING ACCOUNTABILITY. 

8 (a) SKILLED NURSING FACILITIES.—Section 

9 1819(b)(8) of the Social Security Act (42 U.S.C. 1395i– 

10 3(b)(8)) is amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(C) SUBMISSION OF STAFFING INFORMA13 TION BASED ON PAYROLL DATA IN A UNIFORM

14 FORMAT.—Beginning not later than 2 years 

15 after the date of the enactment of this subpara16 graph, and after consulting with State long17 term care ombudsman programs, consumer ad18 vocacy groups, provider stakeholder groups, em19 ployees and their representatives, and other 

20 parties the Secretary deems appropriate, the 

21 Secretary shall require a skilled nursing facility 

22 to electronically submit to the Secretary direct 

23 care staffing information (including information 

24 with respect to agency and contract staff) based 

25 on payroll and other verifiable and auditable 


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1 data in a uniform format (according to speci2 fications established by the Secretary in con3 sultation with such programs, groups, and par4 ties). Such specifications shall require that the 

5 information submitted under the preceding sen6 tence— 

7 ‘‘(i) specify the category of work a 

8 certified employee performs (such as 

9 whether the employee is a registered nurse, 

10 licensed practical nurse, licensed vocational 

11 nurse, certified nursing assistant, thera12 pist, or other medical personnel); 

13 ‘‘(ii) include resident census data and 

14 information on resident case mix; 

15 ‘‘(iii) include a regular reporting 

16 schedule; and 

17 ‘‘(iv) include information on employee 

18 turnover and tenure and on the hours of 

19 care provided by each category of certified 

20 employees referenced in clause (i) per resi21 dent per day. 

22 Nothing in this subparagraph shall be con23 strued as preventing the Secretary from requir24 ing submission of such information with respect 

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1 fore other categories of certified employees. In2 formation under this subparagraph with respect 

3 to agency and contract staff shall be kept sepa4 rate from information on employee staffing.’’. 

5 (b) NURSING FACILITIES.—Section 1919(b)(8) of the 

6 Social Security Act (42 U.S.C. 1396r(b)(8)) is amended 

7 by adding at the end the following new subparagraph: 

8 ‘‘(C) SUBMISSION OF STAFFING INFORMA9 TION BASED ON PAYROLL DATA IN A UNIFORM

10 FORMAT.—Beginning not later than 2 years 

11 after the date of the enactment of this subpara12 graph, and after consulting with State long13 term care ombudsman programs, consumer ad14 vocacy groups, provider stakeholder groups, em15 ployees and their representatives, and other 

16 parties the Secretary deems appropriate, the 

17 Secretary shall require a nursing facility to elec18 tronically submit to the Secretary direct care 

19 staffing information (including information with 

20 respect to agency and contract staff) based on 

21 payroll and other verifiable and auditable data 

22 in a uniform format (according to specifications 

23 established by the Secretary in consultation 

24 with such programs, groups, and parties). Such 


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1 specifications shall require that the information 

2 submitted under the preceding sentence— 

3 ‘‘(i) specify the category of work a 

4 certified employee performs (such as 

5 whether the employee is a registered nurse, 

6 licensed practical nurse, licensed vocational 

7 nurse, certified nursing assistant, thera8 pist, or other medical personnel); 

9 ‘‘(ii) include resident census data and 

10 information on resident case mix; 

11 ‘‘(iii) include a regular reporting 

12 schedule; and 

13 ‘‘(iv) include information on employee 

14 turnover and tenure and on the hours of 

15 care provided by each category of certified 

16 employees referenced in clause (i) per resi17 dent per day. 

18 Nothing in this subparagraph shall be con19 strued as preventing the Secretary from requir20 ing submission of such information with respect 

21 to specific categories, such as nursing staff, be22 fore other categories of certified employees. In23 formation under this subparagraph with respect 

24 to agency and contract staff shall be kept sepa25 rate from information on employee staffing.’’. 


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1 PART 2—TARGETING ENFORCEMENT 

2 SEC. 1421. CIVIL MONEY PENALTIES. 

3 (a) SKILLED NURSING FACILITIES.— 

4 (1) IN GENERAL.—Section 1819(h)(2)(B)(ii) of 

5 the Social Security Act (42 U.S.C. 1395i– 

6 3(h)(2)(B)(ii)) is amended to read as follows: 

7 ‘‘(ii) AUTHORITY WITH RESPECT TO

8 CIVIL MONEY PENALTIES.— 

9 ‘‘(I) AMOUNT.—The Secretary 

10 may impose a civil money penalty in 

11 the applicable per instance or per day 

12 amount (as defined in subclause (II) 

13 and (III)) for each day or instance, 

14 respectively, of noncompliance (as de15 termined appropriate by the Sec16 retary). 

17 ‘‘(II) APPLICABLE PER INSTANCE

18 AMOUNT.—In this clause, the term 

19 ‘applicable per instance amount’ 

20 means— 

21 ‘‘(aa) in the case where the 

22 deficiency is found to be a direct 

23 proximate cause of death of a 

24 resident of the facility, an 

25 amount not to exceed $100,000; 


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1 ‘‘(bb) in each case of a defi2 ciency where the facility is cited 

3 for actual harm or immediate 

4 jeopardy, an amount not less 

5 than $3,050 and not more than 

6 $25,000; and 

7 ‘‘(cc) in each case of any 

8 other deficiency, an amount not 

9 less than $250 and not to exceed 

10 $3050. 

11 ‘‘(III) APPLICABLE PER DAY

12 AMOUNT.—In this clause, the term 

13 ‘applicable per day amount’ means— 

14 ‘‘(aa) in each case of a defi15 ciency where the facility is cited 

16 for actual harm or immediate 

17 jeopardy, an amount not less 

18 than $3,050 and not more than 

19 $25,000; and 

20 ‘‘(bb) in each case of any 

21 other deficiency, an amount not 

22 less than $250 and not to exceed 

23 $3,050. 

24 ‘‘(IV) REDUCTION OF CIVIL

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1 CUMSTANCES.—Subject to subclauses 

2 (V) and (VI), in the case where a fa3 cility self-reports and promptly cor4 rects a deficiency for which a penalty 

5 was imposed under this clause not 

6 later than 10 calendar days after the 

7 date of such imposition, the Secretary 

8 may reduce the amount of the penalty 

9 imposed by not more than 50 percent. 

10 ‘‘(V) PROHIBITION ON REDUC11 TION FOR CERTAIN DEFICIENCIES.— 

12 ‘‘(aa) REPEAT DEFI13 CIENCIES.—The Secretary may 

14 not reduce under subclause (IV) 

15 the amount of a penalty if the 

16 deficiency is a repeat deficiency. 

17 ‘‘(bb) CERTAIN OTHER DE18 FICIENCIES.—The Secretary may 

19 not reduce under subclause (IV) 

20 the amount of a penalty if the 

21 penalty is imposed for a defi22 ciency described in subclause 

23 (II)(aa) or (III)(aa) and the ac24 tual harm or widespread harm 

25 immediately jeopardizes the 


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1 health or safety of a resident or 

2 residents of the facility, or if the 

3 penalty is imposed for a defi4 ciency described in subclause 

5 (II)(bb). 

6 ‘‘(VI) LIMITATION ON AGGRE7 GATE REDUCTIONS.—The aggregate 

8 reduction in a penalty under sub9 clause (IV) may not exceed 35 percent 

10 on the basis of self-reporting, on the 

11 basis of a waiver or an appeal (as pro12 vided for under regulations under sec13 tion 488.436 of title 42, Code of Fed14 eral Regulations), or on the basis of 

15 both. 

16 ‘‘(VII) COLLECTION OF CIVIL

17 MONEY PENALTIES.—In the case of a 

18 civil money penalty imposed under 

19 this clause, the Secretary— 

20 ‘‘(aa) subject to item (cc), 

21 shall, not later than 30 days 

22 after the date of imposition of 

23 the penalty, provide the oppor24 tunity for the facility to partici25 pate in an independent informal 


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1 dispute resolution process which 

2 generates a written record prior 

3 to the collection of such penalty, 

4 but such opportunity shall not af5 fect the responsibility of the 

6 State survey agency for making 

7 final recommendations for such 

8 penalties; 

9 ‘‘(bb) in the case where the 

10 penalty is imposed for each day 

11 of noncompliance, shall not im12 pose a penalty for any day during 

13 the period beginning on the ini14 tial day of the imposition of the 

15 penalty and ending on the day on 

16 which the informal dispute reso17 lution process under item (aa) is 

18 completed; 

19 ‘‘(cc) may provide for the 

20 collection of such civil money 

21 penalty and the placement of 

22 such amounts collected in an es23 crow account under the direction 

24 of the Secretary on the earlier of 

25 the date on which the informal 


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1 dispute resolution process under 

2 item (aa) is completed or the 

3 date that is 90 days after the 

4 date of the imposition of the pen5 alty; 

6 ‘‘(dd) may provide that such 

7 amounts collected are kept in 

8 such account pending the resolu9 tion of any subsequent appeals; 

10 ‘‘(ee) in the case where the 

11 facility successfully appeals the 

12 penalty, may provide for the re13 turn of such amounts collected 

14 (plus interest) to the facility; and 

15 ‘‘(ff) in the case where all 

16 such appeals are unsuccessful, 

17 may provide that some portion of 

18 such amounts collected may be 

19 used to support activities that 

20 benefit residents, including as21 sistance to support and protect 

22 residents of a facility that closes 

23 (voluntarily or involuntarily) or is 

24 decertified (including offsetting 

25 costs of relocating residents to 


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1 home and community-based set2 tings or another facility), projects 

3 that support resident and family 

4 councils and other consumer in5 volvement in assuring quality 

6 care in facilities, and facility im7 provement initiatives approved by 

8 the Secretary (including joint 

9 training of facility staff and sur10 veyors, technical assistance for 

11 facilities under quality assurance 

12 programs, the appointment of 

13 temporary management, and 

14 other activities approved by the 

15 Secretary). 

16 ‘‘(VIII) PROCEDURE.—The pro17 visions of section 1128A (other than 

18 subsections (a) and (b) and except to 

19 the extent that such provisions require 

20 a hearing prior to the imposition of a 

21 civil money penalty) shall apply to a 

22 civil money penalty under this clause 

23 in the same manner as such provi24 sions apply to a penalty or proceeding 

25 under section 1128A(a).’’. 


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1 (2) CONFORMING AMENDMENT.—The second 

2 sentence of section 1819(h)(5) of the Social Security 

3 Act (42 U.S.C. 1395i–3(h)(5)) is amended by insert4 ing ‘‘(ii),’’ after ‘‘(i),’’. 

5 (b) NURSING FACILITIES.— 

6 (1) PENALTIES IMPOSED BY THE STATE.— 

7 (A) IN GENERAL.—Section 1919(h)(2) of 

8 the Social Security Act (42 U.S.C. 1396r(h)(2)) 

9 is amended— 

10 (i) in subparagraph (A)(ii), by strik11 ing the first sentence and inserting the fol12 lowing: ‘‘A civil money penalty in accord13 ance with subparagraph (G).’’; and 

14 (ii) by adding at the end the following 

15 new subparagraph: 

16 ‘‘(G) CIVIL MONEY PENALTIES.— 

17 ‘‘(i) IN GENERAL.—The State may 

18 impose a civil money penalty under sub19 paragraph (A)(ii) in the applicable per in20 stance or per day amount (as defined in 

21 subclause (II) and (III)) for each day or 

22 instance, respectively, of noncompliance (as 

23 determined appropriate by the Secretary). 


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1 ‘‘(ii) APPLICABLE PER INSTANCE

2 AMOUNT.—In this subparagraph, the term 

3 ‘applicable per instance amount’ means— 

4 ‘‘(I) in the case where the defi5 ciency is found to be a direct proxi6 mate cause of death of a resident of 

7 the facility, an amount not to exceed 

8 $100,000; 

9 ‘‘(II) in each case of a deficiency 

10 where the facility is cited for actual 

11 harm or immediate jeopardy, an 

12 amount not less than $3,050 and not 

13 more than $25,000; and 

14 ‘‘(III) in each case of any other 

15 deficiency, an amount not less than 

16 $250 and not to exceed $3,050. 

17 ‘‘(iii) APPLICABLE PER DAY

18 AMOUNT.—In this subparagraph, the term 

19 ‘applicable per day amount’ means— 

20 ‘‘(I) in each case of a deficiency 

21 where the facility is cited for actual 

22 harm or immediate jeopardy, an 

23 amount not less than $3,050 and not 

24 more than $25,000; and 


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1 ‘‘(II) in each case of any other 

2 deficiency, an amount not less than 

3 $250 and not to exceed $3,050. 

4 ‘‘(iv) REDUCTION OF CIVIL MONEY

5 PENALTIES IN CERTAIN CIR6 CUMSTANCES.—Subject to clauses (v) and 

7 (vi), in the case where a facility self-re8 ports and promptly corrects a deficiency 

9 for which a penalty was imposed under 

10 subparagraph (A)(ii) not later than 10 cal11 endar days after the date of such imposi12 tion, the State may reduce the amount of 

13 the penalty imposed by not more than 50 

14 percent. 

15 ‘‘(v) PROHIBITION ON REDUCTION

16 FOR CERTAIN DEFICIENCIES.— 

17 ‘‘(I) REPEAT DEFICIENCIES.— 

18 The State may not reduce under 

19 clause (iv) the amount of a penalty if 

20 the State had reduced a penalty im21 posed on the facility in the preceding 

22 year under such clause with respect to 

23 a repeat deficiency. 

24 ‘‘(II) CERTAIN OTHER DEFI25 CIENCIES.—The State may not reduce 


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1 under clause (iv) the amount of a pen2 alty if the penalty is imposed for a de3 ficiency described in clause (ii)(II) or 

4 (iii)(I) and the actual harm or wide5 spread harm that immediately jeop6 ardizes the health or safety of a resi7 dent or residents of the facility, or if 

8 the penalty is imposed for a deficiency 

9 described in clause (ii)(I). 

10 ‘‘(III) LIMITATION ON AGGRE11 GATE REDUCTIONS.—The aggregate 

12 reduction in a penalty under clause 

13 (iv) may not exceed 35 percent on the 

14 basis of self-reporting, on the basis of 

15 a waiver or an appeal (as provided for 

16 under regulations under section 

17 488.436 of title 42, Code of Federal 

18 Regulations), or on the basis of both. 

19 ‘‘(iv) COLLECTION OF CIVIL MONEY

20 PENALTIES.—In the case of a civil money 

21 penalty imposed under subparagraph 

22 (A)(ii), the State— 

23 ‘‘(I) subject to subclause (III), 

24 shall, not later than 30 days after the 

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1 vide the opportunity for the facility to 

2 participate in an independent informal 

3 dispute resolution process which gen4 erates a written record prior to the 

5 collection of such penalty, but such 

6 opportunity shall not affect the re7 sponsibility of the State survey agency 

8 for making final recommendations for 

9 such penalties; 

10 ‘‘(II) in the case where the pen11 alty is imposed for each day of non12 compliance, shall not impose a penalty 

13 for any day during the period begin14 ning on the initial day of the imposi15 tion of the penalty and ending on the 

16 day on which the informal dispute res17 olution process under subclause (I) is 

18 completed; 

19 ‘‘(III) may provide for the collec20 tion of such civil money penalty and 

21 the placement of such amounts col22 lected in an escrow account under the 

23 direction of the State on the earlier of 

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1 clause (I) is completed or the date 

2 that is 90 days after the date of the 

3 imposition of the penalty; 

4 ‘‘(IV) may provide that such 

5 amounts collected are kept in such ac6 count pending the resolution of any 

7 subsequent appeals; 

8 ‘‘(V) in the case where the facil9 ity successfully appeals the penalty, 

10 may provide for the return of such 

11 amounts collected (plus interest) to 

12 the facility; and 

13 ‘‘(VI) in the case where all such 

14 appeals are unsuccessful, may provide 

15 that such funds collected shall be used 

16 for the purposes described in the sec17 ond sentence of subparagraph 

18 (A)(ii).’’. 

19 (B) CONFORMING AMENDMENT.—The sec20 ond sentence of section 1919(h)(2)(A)(ii) of the 

21 Social Security Act (42 U.S.C. 

22 1396r(h)(2)(A)(ii)) is amended by inserting be23 fore the period at the end the following: ‘‘, and 

24 some portion of such funds may be used to sup25 port activities that benefit residents, including 


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1 assistance to support and protect residents of a 

2 facility that closes (voluntarily or involuntarily) 

3 or is decertified (including offsetting costs of re4 locating residents to home and community5 based settings or another facility), projects that 

6 support resident and family councils and other 

7 consumer involvement in assuring quality care 

8 in facilities, and facility improvement initiatives 

9 approved by the Secretary (including joint 

10 training of facility staff and surveyors, pro11 viding technical assistance to facilities under 

12 quality assurance programs, the appointment of 

13 temporary management, and other activities ap14 proved by the Secretary)’’. 

15 (2) PENALTIES IMPOSED BY THE SEC16 RETARY.— 

17 (A) IN GENERAL.—Section 

18 1919(h)(3)(C)(ii) of the Social Security Act (42 

19 U.S.C. 1396r(h)(3)(C)) is amended to read as 

20 follows: 

21 ‘‘(ii) AUTHORITY WITH RESPECT TO

22 CIVIL MONEY PENALTIES.— 

23 ‘‘(I) AMOUNT.—Subject to sub24 clause (II), the Secretary may impose 

25 a civil money penalty in an amount 


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1 not to exceed $10,000 for each day or 

2 each instance of noncompliance (as 

3 determined appropriate by the Sec4 retary). 

5 ‘‘(II) REDUCTION OF CIVIL

6 MONEY PENALTIES IN CERTAIN CIR7 CUMSTANCES.—Subject to subclause 

8 (III), in the case where a facility self9 reports and promptly corrects a defi10 ciency for which a penalty was im11 posed under this clause not later than 

12 10 calendar days after the date of 

13 such imposition, the Secretary may 

14 reduce the amount of the penalty im15 posed by not more than 50 percent. 

16 ‘‘(III) PROHIBITION ON REDUC17 TION FOR REPEAT DEFICIENCIES.— 

18 The Secretary may not reduce the 

19 amount of a penalty under subclause 

20 (II) if the Secretary had reduced a 

21 penalty imposed on the facility in the 

22 preceding year under such subclause 

23 with respect to a repeat deficiency. 

24 ‘‘(IV) COLLECTION OF CIVIL

25 MONEY PENALTIES.—In the case of a 


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1 civil money penalty imposed under 

2 this clause, the Secretary— 

3 ‘‘(aa) subject to item (bb), 

4 shall, not later than 30 days 

5 after the date of imposition of 

6 the penalty, provide the oppor7 tunity for the facility to partici8 pate in an independent informal 

9 dispute resolution process which 

10 generates a written record prior 

11 to the collection of such penalty; 

12 ‘‘(bb) in the case where the 

13 penalty is imposed for each day 

14 of noncompliance, shall not im15 pose a penalty for any day during 

16 the period beginning on the ini17 tial day of the imposition of the 

18 penalty and ending on the day on 

19 which the informal dispute reso20 lution process under item (aa) is 

21 completed; 

22 ‘‘(cc) may provide for the 

23 collection of such civil money 

24 penalty and the placement of 

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1 crow account under the direction 

2 of the Secretary on the earlier of 

3 the date on which the informal 

4 dispute resolution process under 

5 item (aa) is completed or the 

6 date that is 90 days after the 

7 date of the imposition of the pen8 alty; 

9 ‘‘(dd) may provide that such 

10 amounts collected are kept in 

11 such account pending the resolu12 tion of any subsequent appeals; 

13 ‘‘(ee) in the case where the 

14 facility successfully appeals the 

15 penalty, may provide for the re16 turn of such amounts collected 

17 (plus interest) to the facility; and 

18 ‘‘(ff) in the case where all 

19 such appeals are unsuccessful, 

20 may provide that some portion of 

21 such amounts collected may be 

22 used to support activities that 

23 benefit residents, including as24 sistance to support and protect 

25 residents of a facility that closes 


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1 (voluntarily or involuntarily) or is 

2 decertified (including offsetting 

3 costs of relocating residents to 

4 home and community-based set5 tings or another facility), projects 

6 that support resident and family 

7 councils and other consumer in8 volvement in assuring quality 

9 care in facilities, and facility im10 provement initiatives approved by 

11 the Secretary (including joint 

12 training of facility staff and sur13 veyors, technical assistance for 

14 facilities under quality assurance 

15 programs, the appointment of 

16 temporary management, and 

17 other activities approved by the 

18 Secretary). 

19 ‘‘(V) PROCEDURE.—The provi20 sions of section 1128A (other than 

21 subsections (a) and (b) and except to 

22 the extent that such provisions require 

23 a hearing prior to the imposition of a 

24 civil money penalty) shall apply to a 

25 civil money penalty under this clause 


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1 in the same manner as such provi2 sions apply to a penalty or proceeding 

3 under section 1128A(a).’’. 

4 (B) CONFORMING AMENDMENT.—Section 

5 1919(h)(8) of the Social Security Act (42 

6 U.S.C. 1396r(h)(5)(8)) is amended by inserting 

7 ‘‘and in paragraph (3)(C)(ii)’’ after ‘‘paragraph 

8 (2)(A)’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall take effect 1 year after the date of the 

11 enactment of this Act. 

12 SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PRO13 GRAM. 

14 (a) ESTABLISHMENT.— 

15 (1) IN GENERAL.—The Secretary, in consulta16 tion with the Inspector General of the Department 

17 of Health and Human Services, shall establish a 

18 pilot program (in this section referred to as the 

19 ‘‘pilot program’’) to develop, test, and implement use 

20 of an independent monitor to oversee interstate and 

21 large intrastate chains of skilled nursing facilities 

22 and nursing facilities. 

23 (2) SELECTION.—The Secretary shall select 

24 chains of skilled nursing facilities and nursing facili25 ties described in paragraph (1) to participate in the 


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1 pilot program from among those chains that submit 

2 an application to the Secretary at such time, in such 

3 manner, and containing such information as the Sec4 retary may require. 

5 (3) DURATION.—The Secretary shall conduct 

6 the pilot program for a two-year period. 

7 (4) IMPLEMENTATION.—The Secretary shall 

8 implement the pilot program not later than one year 

9 after the date of the enactment of this Act. 

10 (b) REQUIREMENTS.—The Secretary shall evaluate 

11 chains selected to participate in the pilot program based 

12 on criteria selected by the Secretary, including where evi13 dence suggests that one or more facilities of the chain are 

14 experiencing serious safety and quality of care problems. 

15 Such criteria may include the evaluation of a chain that 

16 includes one or more facilities participating in the ‘‘Special 

17 Focus Facility’’ program (or a successor program) or one 

18 or more facilities with a record of repeated serious safety 

19 and quality of care deficiencies. 

20 (c) RESPONSIBILITIES OF THE INDEPENDENT MON21 ITOR.—An independent monitor that enters into a con22 tract with the Secretary to participate in the conduct of 

23 such program shall— 

24 (1) conduct periodic reviews and prepare root25 cause quality and deficiency analyses of a chain to 


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1 assess if facilities of the chain are in compliance 

2 with State and Federal laws and regulations applica3 ble to the facilities; 

4 (2) undertake sustained oversight of the chain, 

5 whether publicly or privately held, to involve the 

6 owners of the chain and the principal business part7 ners of such owners in facilitating compliance by fa8 cilities of the chain with State and Federal laws and 

9 regulations applicable to the facilities; 

10 (3) analyze the management structure, distribu11 tion of expenditures, and nurse staffing levels of fa12 cilities of the chain in relation to resident census, 

13 staff turnover rates, and tenure; 

14 (4) report findings and recommendations with 

15 respect to such reviews, analyses, and oversight to 

16 the chain and facilities of the chain, to the Secretary 

17 and to relevant States; and 

18 (5) publish the results of such reviews, anal19 yses, and oversight. 

20 (d) IMPLEMENTATION OF RECOMMENDATIONS.— 

21 (1) RECEIPT OF FINDING BY CHAIN.—Not later 

22 than 10 days after receipt of a finding of an inde23 pendent monitor under subsection (c)(4), a chain 

24 participating in the pilot program shall submit to 

25 the independent monitor a report— 


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1 (A) outlining corrective actions the chain 

2 will take to implement the recommendations in 

3 such report; or 

4 (B) indicating that the chain will not im5 plement such recommendations and why it will 

6 not do so. 

7 (2) RECEIPT OF REPORT BY INDEPENDENT

8 MONITOR.—Not later than 10 days after the date of 

9 receipt of a report submitted by a chain under para10 graph (1), an independent monitor shall finalize its 

11 recommendations and submit a report to the chain 

12 and facilities of the chain, the Secretary, and the 

13 State (or States) involved, as appropriate, containing 

14 such final recommendations. 

15 (e) COST OF APPOINTMENT.—A chain shall be re16 sponsible for a portion of the costs associated with the 

17 appointment of independent monitors under the pilot pro18 gram. The chain shall pay such portion to the Secretary 

19 (in an amount and in accordance with procedures estab20 lished by the Secretary). 

21 (f) WAIVER AUTHORITY.—The Secretary may waive 

22 such requirements of titles XVIII and XIX of the Social 

23 Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 

24 may be necessary for the purpose of carrying out the pilot 

25 program. 


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1 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as may be 

3 necessary to carry out this section. 

4 (h) DEFINITIONS.—In this section: 

5 (1) FACILITY.—The term ‘‘facility’’ means a 

6 skilled nursing facility or a nursing facility. 

7 (2) NURSING FACILITY.—The term ‘‘nursing 

8 facility’’ has the meaning given such term in section 

9 1919(a) of the Social Security Act (42 U.S.C. 

10 1396r(a)). 

11 (3) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Health and Human Services, acting 

13 through the Assistant Secretary for Planning and 

14 Evaluation. 

15 (4) SKILLED NURSING FACILITY.—The term 

16 ‘‘skilled nursing facility’’ has the meaning given such 

17 term in section 1819(a) of the Social Security Act 

18 (42 U.S.C. 1395(a)). 

19 (i) EVALUATION AND REPORT.— 

20 (1) EVALUATION.—The Inspector General of 

21 the Department of Health and Human Services shall 

22 evaluate the pilot program. Such evaluation shall— 

23 (A) determine whether the independent 

24 monitor program should be established on a 

25 permanent basis; and 


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1 (B) if the Inspector General determines 

2 that the independent monitor program should 

3 be established on a permanent basis, rec4 ommend appropriate procedures and mecha5 nisms for such establishment. 

6 (2) REPORT.—Not later than 180 days after 

7 the completion of the pilot program, the Inspector 

8 General shall submit to Congress and the Secretary 

9 a report containing the results of the evaluation con10 ducted under paragraph (1), together with rec11 ommendations for such legislation and administra12 tive action as the Inspector General determines ap13 propriate. 

14 SEC. 1423. NOTIFICATION OF FACILITY CLOSURE. 

15 (a) SKILLED NURSING FACILITIES.— 

16 (1) IN GENERAL.—Section 1819(c) of the So17 cial Security Act (42 U.S.C. 1395i–3(c)) is amended 

18 by adding at the end the following new paragraph: 

19 ‘‘(7) NOTIFICATION OF FACILITY CLOSURE.— 

20 ‘‘(A) IN GENERAL.—Any individual who is 

21 the administrator of a skilled nursing facility 

22 must— 

23 ‘‘(i) submit to the Secretary, the State 

24 long-term care ombudsman, residents of 

25 the facility, and the legal representatives of 


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1 such residents or other responsible parties, 

2 written notification of an impending clo3 sure— 

4 ‘‘(I) subject to subclause (II), not 

5 later than the date that is 60 days 

6 prior to the date of such closure; and 

7 ‘‘(II) in the case of a facility 

8 where the Secretary terminates the fa9 cility’s participation under this title, 

10 not later than the date that the Sec11 retary determines appropriate; 

12 ‘‘(ii) ensure that the facility does not 

13 admit any new residents on or after the 

14 date on which such written notification is 

15 submitted; and 

16 ‘‘(iii) include in the notice a plan for 

17 the transfer and adequate relocation of the 

18 residents of the facility by a specified date 

19 prior to closure that has been approved by 

20 the State, including assurances that the 

21 residents will be transferred to the most 

22 appropriate facility or other setting in 

23 terms of quality, services, and location, 

24 taking into consideration the needs and 

25 best interests of each resident. 


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1 ‘‘(B) RELOCATION.— 

2 ‘‘(i) IN GENERAL.—The State shall 

3 ensure that, before a facility closes, all 

4 residents of the facility have been success5 fully relocated to another facility or an al6 ternative home and community-based set7 ting. 

8 ‘‘(ii) CONTINUATION OF PAYMENTS

9 UNTIL RESIDENTS RELOCATED.—The Sec10 retary may, as the Secretary determines 

11 appropriate, continue to make payments 

12 under this title with respect to residents of 

13 a facility that has submitted a notification 

14 under subparagraph (A) during the period 

15 beginning on the date such notification is 

16 submitted and ending on the date on which 

17 the resident is successfully relocated.’’. 

18 (2) CONFORMING AMENDMENTS.—Section 

19 1819(h)(4) of the Social Security Act (42 U.S.C. 

20 1395i–3(h)(4)) is amended— 

21 (A) in the first sentence, by striking ‘‘the 

22 Secretary shall terminate’’ and inserting ‘‘the 

23 Secretary, subject to subsection (c)(7), shall 

24 terminate’’; and 


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1 (B) in the second sentence, by striking 

2 ‘‘subsection (c)(2)’’ and inserting ‘‘paragraphs 

3 (2) and (7) of subsection (c)’’. 

4 (b) NURSING FACILITIES.— 

5 (1) IN GENERAL.—Section 1919(c) of the So6 cial Security Act (42 U.S.C. 1396r(c)) is amended 

7 by adding at the end the following new paragraph: 

8 ‘‘(9) NOTIFICATION OF FACILITY CLOSURE.— 

9 ‘‘(A) IN GENERAL.—Any individual who is 

10 an administrator of a nursing facility must— 

11 ‘‘(i) submit to the Secretary, the State 

12 long-term care ombudsman, residents of 

13 the facility, and the legal representatives of 

14 such residents or other responsible parties, 

15 written notification of an impending clo16 sure— 

17 ‘‘(I) subject to subclause (II), not 

18 later than the date that is 60 days 

19 prior to the date of such closure; and 

20 ‘‘(II) in the case of a facility 

21 where the Secretary terminates the fa22 cility’s participation under this title, 

23 not later than the date that the Sec24 retary determines appropriate; 


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1 ‘‘(ii) ensure that the facility does not 

2 admit any new residents on or after the 

3 date on which such written notification is 

4 submitted; and 

5 ‘‘(iii) include in the notice a plan for 

6 the transfer and adequate relocation of the 

7 residents of the facility by a specified date 

8 prior to closure that has been approved by 

9 the State, including assurances that the 

10 residents will be transferred to the most 

11 appropriate facility or other setting in 

12 terms of quality, services, and location, 

13 taking into consideration the needs and 

14 best interests of each resident. 

15 ‘‘(B) RELOCATION.— 

16 ‘‘(i) IN GENERAL.—The State shall 

17 ensure that, before a facility closes, all 

18 residents of the facility have been success19 fully relocated to another facility or an al20 ternative home and community-based set21 ting. 

22 ‘‘(ii) CONTINUATION OF PAYMENTS

23 UNTIL RESIDENTS RELOCATED.—The Sec24 retary may, as the Secretary determines 

25 appropriate, continue to make payments 


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1 under this title with respect to residents of 

2 a facility that has submitted a notification 

3 under subparagraph (A) during the period 

4 beginning on the date such notification is 

5 submitted and ending on the date on which 

6 the resident is successfully relocated.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect 1 year after the date of the 

9 enactment of this Act. 

10 PART 3—IMPROVING STAFF TRAINING 

11 SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING. 

12 (a) SKILLED NURSING FACILITIES.—Section 

13 1819(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

14 1395i–3(f)(2)(A)(i)(I)) is amended by inserting ‘‘(includ15 ing, in the case of initial training and, if the Secretary 

16 determines appropriate, in the case of ongoing training, 

17 dementia management training and resident abuse preven18 tion training)’’ after ‘‘curriculum’’. 

19 (b) NURSING FACILITIES.—Section 

20 1919(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C. 

21 1396r(f)(2)(A)(i)(I)) is amended by inserting ‘‘(including, 

22 in the case of initial training and, if the Secretary deter23 mines appropriate, in the case of ongoing training, demen24 tia management training and resident abuse prevention 

25 training)’’ after ‘‘curriculum’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect 1 year after the date of the 

3 enactment of this Act. 

4 SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED 

5 FOR CERTIFIED NURSE AIDES AND SUPER6 VISORY STAFF. 

7 (a) STUDY.— 

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

9 a study on the content of training for certified nurse 

10 aides and supervisory staff of skilled nursing facili11 ties and nursing facilities. The study shall include an 

12 analysis of the following: 

13 (A) Whether the number of initial training 

14 hours for certified nurse aides required under 

15 sections 1819(f)(2)(A)(i)(II) and 

16 1919(f)(2)(A)(i)(II) of the Social Security Act 

17 (42 U.S.C. 1395i–3(f)(2)(A)(i)(II); 

18 1396r(f)(2)(A)(i)(II)) should be increased from 

19 75 and, if so, what the required number of ini20 tial training hours should be, including any rec21 ommendations for the content of such training 

22 (including training related to dementia). 

23 (B) Whether requirements for ongoing 

24 training under such sections 

25 1819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II) 


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1 should be increased from 12 hours per year, in2 cluding any recommendations for the content of 

3 such training. 

4 (2) CONSULTATION.—In conducting the anal5 ysis under paragraph (1)(A), the Secretary shall 

6 consult with States that, as of the date of the enact7 ment of this Act, require more than 75 hours of 

8 training for certified nurse aides. 

9 (3) DEFINITIONS.—In this section: 

10 (A) NURSING FACILITY.—The term ‘‘nurs11 ing facility’’ has the meaning given such term 

12 in section 1919(a) of the Social Security Act 

13 (42 U.S.C. 1396r(a)). 

14 (B) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Health and Human 

16 Services, acting through the Assistant Secretary 

17 for Planning and Evaluation. 

18 (C) SKILLED NURSING FACILITY.—The 

19 term ‘‘skilled nursing facility’’ has the meaning 

20 given such term in section 1819(a) of the Social 

21 Security Act (42 U.S.C. 1395(a)). 

22 (b) REPORT.—Not later than 2 years after the date 

23 of the enactment of this Act, the Secretary shall submit 

24 to Congress a report containing the results of the study 

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1 ommendations for such legislation and administrative ac2 tion as the Secretary determines appropriate. 

3 Subtitle C—Quality Measurements 

4 SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR 

5 QUALITY IMPROVEMENT. 

6 Title XI of the Social Security Act, as amended by 

7 section 1401(a), is further amended by adding at the end 

8 the following new part: 

9 ‘‘PART E—QUALITY IMPROVEMENT

10 ‘‘ESTABLISHMENT OF NATIONAL PRIORITIES FOR

11 PERFORMANCE IMPROVEMENT

12 ‘‘SEC. 1191. (a) ESTABLISHMENT OF NATIONAL PRI13 ORITIES BY THE SECRETARY.—The Secretary shall estab14 lish and periodically update, not less frequently than tri15 ennially, national priorities for performance improvement. 

16 ‘‘(b) RECOMMENDATIONS FOR NATIONAL PRIOR17 ITIES.—In establishing and updating national priorities 

18 under subsection (a), the Secretary shall solicit and con19 sider recommendations from multiple outside stake20 holders. 

21 ‘‘(c) CONSIDERATIONS IN SETTING NATIONAL PRI22 ORITIES.—With respect to such priorities, the Secretary 

23 shall ensure that priority is given to areas in the delivery 

24 of health care services in the United States that— 


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1 ‘‘(1) contribute to a large burden of disease, in2 cluding those that address the health care provided 

3 to patients with prevalent, high-cost chronic dis4 eases; 

5 ‘‘(2) have the greatest potential to decrease 

6 morbidity and mortality in this country, including 

7 those that are designed to eliminate harm to pa8 tients; 

9 ‘‘(3) have the greatest potential for improving 

10 the performance, affordability, and patient11 centeredness of health care, including those due to 

12 variations in care; 

13 ‘‘(4) address health disparities across groups 

14 and areas; and 

15 ‘‘(5) have the potential for rapid improvement 

16 due to existing evidence, standards of care or other 

17 reasons. 

18 ‘‘(d) DEFINITIONS.—In this part: 

19 ‘‘(1) CONSENSUS-BASED ENTITY.—The term 

20 ‘consensus-based entity’ means an entity with a con21 tract with the Secretary under section 1890. 

22 ‘‘(2) QUALITY MEASURE.—The term ‘quality 

23 measure’ means a national consensus standard for 

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1 ices, physicians, and other health care practitioners 

2 in the delivery of health care services. 

3 ‘‘(e) FUNDING.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall provide 

5 for the transfer, from the Federal Hospital Insur6 ance Trust Fund under section 1817 and the Fed7 eral Supplementary Medical Insurance Trust Fund 

8 under section 1841 (in such proportion as the Sec9 retary determines appropriate), of $2,000,000, for 

10 the activities under this section for each of the fiscal 

11 years 2010 through 2014. 

12 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

13 For purposes of carrying out the provisions of this 

14 section, in addition to funds otherwise available, out 

15 of any funds in the Treasury not otherwise appro16 priated, there are appropriated to the Secretary of 

17 Health and Human Services $2,000,000 for each of 

18 the fiscal years 2010 through 2014.’’. 

19 SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES; 

20 GAO EVALUATION OF DATA COLLECTION 

21 PROCESS FOR QUALITY MEASUREMENT. 

22 Part E of title XI of the Social Security Act, as added 

23 by section 1441, is amended by adding at the end the fol24 lowing new sections: 


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1 ‘‘SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES. 

2 ‘‘(a) AGREEMENTS WITH QUALIFIED ENTITIES.— 

3 ‘‘(1) IN GENERAL.—The Secretary shall enter 

4 into agreements with qualified entities to develop 

5 quality measures for the delivery of health care serv6 ices in the United States. 

7 ‘‘(2) FORM OF AGREEMENTS.—The Secretary 

8 may carry out paragraph (1) by contract, grant, or 

9 otherwise. 

10 ‘‘(3) RECOMMENDATIONS OF CONSENSUS11 BASED ENTITY.—In carrying out this section, the 

12 Secretary shall— 

13 ‘‘(A) seek public input; and 

14 ‘‘(B) take into consideration recommenda15 tions of the consensus-based entity with a con16 tract with the Secretary under section 1890(a). 

17 ‘‘(b) DETERMINATION OF AREAS WHERE QUALITY

18 MEASURES ARE REQUIRED.—Consistent with the na19 tional priorities established under this part and with the 

20 programs administered by the Centers for Medicare & 

21 Medicaid Services and in consultation with other relevant 

22 Federal agencies, the Secretary shall determine areas in 

23 which quality measures for assessing health care services 

24 in the United States are needed. 

25 ‘‘(c) DEVELOPMENT OF QUALITY MEASURES.— 


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1 ‘‘(1) PATIENT-CENTERED AND POPULATION2 BASED MEASURES.—Quality measures developed 

3 under agreements under subsection (a) shall be de4 signed— 

5 ‘‘(A) to assess outcomes and functional 

6 status of patients; 

7 ‘‘(B) to assess the continuity and coordina8 tion of care and care transitions for patients 

9 across providers and health care settings, in10 cluding end of life care; 

11 ‘‘(C) to assess patient experience and pa12 tient engagement; 

13 ‘‘(D) to assess the safety, effectiveness, 

14 and timeliness of care; 

15 ‘‘(E) to assess health disparities including 

16 those associated with individual race, ethnicity, 

17 age, gender, place of residence or language; 

18 ‘‘(F) to assess the efficiency and resource 

19 use in the provision of care; 

20 ‘‘(G) to the extent feasible, to be collected 

21 as part of health information technologies sup22 porting better delivery of health care services; 

23 ‘‘(H) to be available free of charge to users 

24 for the use of such measures; and 


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1 ‘‘(I) to assess delivery of health care serv2 ices to individuals regardless of age. 

3 ‘‘(2) AVAILABILITY OF MEASURES.—The Sec4 retary shall make quality measures developed under 

5 this section available to the public. 

6 ‘‘(3) TESTING OF PROPOSED MEASURES.—The 

7 Secretary may use amounts made available under 

8 subsection (f) to fund the testing of proposed quality 

9 measures by qualified entities. Testing funded under 

10 this paragraph shall include testing of the feasibility 

11 and usability of proposed measures. 

12 ‘‘(4) UPDATING OF ENDORSED MEASURES.— 

13 The Secretary may use amounts made available 

14 under subsection (f) to fund the updating (and test15 ing, if applicable) by consensus-based entities of 

16 quality measures that have been previously endorsed 

17 by such an entity as new evidence is developed, in 

18 a manner consistent with section 1890(b)(3). 

19 ‘‘(d) QUALIFIED ENTITIES.—Before entering into 

20 agreements with a qualified entity, the Secretary shall en21 sure that the entity is a public, nonprofit or academic in22 stitution with technical expertise in the area of health 

23 quality measurement. 

24 ‘‘(e) APPLICATION FOR GRANT.—A grant may be 

25 made under this section only if an application for the 


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1 grant is submitted to the Secretary and the application 

2 is in such form, is made in such manner, and contains 

3 such agreements, assurances, and information as the Sec4 retary determines to be necessary to carry out this section. 

5 ‘‘(f) FUNDING.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall provide 

7 for the transfer, from the Federal Hospital Insur8 ance Trust Fund under section 1817 and the Fed9 eral Supplementary Medical Insurance Trust Fund 

10 under section 1841 (in such proportion as the Sec11 retary determines appropriate), of $25,000,000, to 

12 the Secretary for purposes of carrying out this sec13 tion for each of the fiscal years 2010 through 2014. 

14 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

15 For purposes of carrying out the provisions of this 

16 section, in addition to funds otherwise available, out 

17 of any funds in the Treasury not otherwise appro18 priated, there are appropriated to the Secretary of 

19 Health and Human Services $25,000,000 for each 

20 of the fiscal years 2010 through 2014. 

21 ‘‘SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROC22 ESS FOR QUALITY MEASUREMENT. 

23 ‘‘(a) GAO EVALUATIONS.—The Comptroller General 

24 of the United States shall conduct periodic evaluations of 


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1 the implementation of the data collection processes for 

2 quality measures used by the Secretary. 

3 ‘‘(b) CONSIDERATIONS.—In carrying out the evalua4 tion under subsection (a), the Comptroller General shall 

5 determine— 

6 ‘‘(1) whether the system for the collection of 

7 data for quality measures provides for validation of 

8 data as relevant and scientifically credible; 

9 ‘‘(2) whether data collection efforts under the 

10 system use the most efficient and cost-effective 

11 means in a manner that minimizes administrative 

12 burden on persons required to collect data and that 

13 adequately protects the privacy of patients’ personal 

14 health information and provides data security; 

15 ‘‘(3) whether standards under the system pro16 vide for an appropriate opportunity for physicians 

17 and other clinicians and institutional providers of 

18 services to review and correct findings; and 

19 ‘‘(4) the extent to which quality measures are 

20 consistent with section 1192(c)(1) or result in direct 

21 or indirect costs to users of such measures. 

22 ‘‘(c) REPORT.—The Comptroller General shall sub23 mit reports to Congress and to the Secretary containing 

24 a description of the findings and conclusions of the results 

25 of each such evaluation.’’. 


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1 SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT 

2 INTO SELECTION OF QUALITY MEASURES. 

3 Section 1808 of the Social Security Act (42 U.S.C. 

4 1395b–9) is amended by adding at the end the following 

5 new subsection: 

6 ‘‘(d) MULTI-STAKEHOLDER PRE-RULEMAKING INPUT

7 INTO SELECTION OF QUALITY MEASURES.— 

8 ‘‘(1) LIST OF MEASURES.—Not later than De9 cember 1 before each year (beginning with 2011), 

10 the Secretary shall make public a list of measures 

11 being considered for selection for quality measure12 ment by the Secretary in rulemaking with respect to 

13 payment systems under this title beginning in the 

14 payment year beginning in such year and for pay15 ment systems beginning in the calendar year fol16 lowing such year, as the case may be. 

17 ‘‘(2) CONSULTATION ON SELECTION OF EN18 DORSED QUALITY MEASURES.—A consensus-based 

19 entity that has entered into a contract under section 

20 1890 shall, as part of such contract, convene multi21 stakeholder groups to provide recommendations on 

22 the selection of individual or composite quality meas23 ures, for use in reporting performance information 

24 to the public or for use in public health care pro25 grams. 


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1 ‘‘(3) MULTI-STAKEHOLDER INPUT.—Not later 

2 than February 1 of each year (beginning with 

3 2011), the consensus-based entity described in para4 graph (2) shall transmit to the Secretary the rec5 ommendations of multi-stakeholder groups provided 

6 under paragraph (2). Such recommendations shall 

7 be included in the transmissions the consensus-based 

8 entity makes to the Secretary under the contract 

9 provided for under section 1890. 

10 ‘‘(4) REQUIREMENT FOR TRANSPARENCY IN

11 PROCESS.— 

12 ‘‘(A) IN GENERAL.—In convening multi13 stakeholder groups under paragraph (2) with 

14 respect to the selection of quality measures, the 

15 consensus-based entity described in such para16 graph shall provide for an open and transparent 

17 process for the activities conducted pursuant to 

18 such convening. 

19 ‘‘(B) SELECTION OF ORGANIZATIONS PAR20 TICIPATING IN MULTI-STAKEHOLDER

21 GROUPS.—The process under paragraph (2) 

22 shall ensure that the selection of representatives 

23 of multi-stakeholder groups includes provision 

24 for public nominations for, and the opportunity 

25 for public comment on, such selection. 


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1 ‘‘(5) USE OF INPUT.—The respective proposed 

2 rule shall contain a summary of the recommenda3 tions made by the multi-stakeholder groups under 

4 paragraph (2), as well as other comments received 

5 regarding the proposed measures, and the extent to 

6 which such proposed rule follows such recommenda7 tions and the rationale for not following such rec8 ommendations. 

9 ‘‘(6) MULTI-STAKEHOLDER GROUPS.—For pur10 poses of this subsection, the term ‘multi-stakeholder 

11 groups’ means, with respect to a quality measure, a 

12 voluntary collaborative of organizations representing 

13 persons interested in or affected by the use of such 

14 quality measure, such as the following: 

15 ‘‘(A) Hospitals and other institutional pro16 viders. 

17 ‘‘(B) Physicians. 

18 ‘‘(C) Health care quality alliances. 

19 ‘‘(D) Nurses and other health care practi20 tioners. 

21 ‘‘(E) Health plans. 

22 ‘‘(F) Patient advocates and consumer 

23 groups. 

24 ‘‘(G) Employers. 


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1 ‘‘(H) Public and private purchasers of 

2 health care items and services. 

3 ‘‘(I) Labor organizations. 

4 ‘‘(J) Relevant departments or agencies of 

5 the United States. 

6 ‘‘(K) Biopharmaceutical companies and 

7 manufacturers of medical devices. 

8 ‘‘(L) Licensing, credentialing, and accred9 iting bodies. 

10 ‘‘(7) FUNDING.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall 

12 provide for the transfer, from the Federal Hos13 pital Insurance Trust Fund under section 1817 

14 and the Federal Supplementary Medical Insur15 ance Trust Fund under section 1841 (in such 

16 proportion as the Secretary determines appro17 priate), of $1,000,000, to the Secretary for pur18 poses of carrying out this subsection for each of 

19 the fiscal years 2010 through 2014. 

20 ‘‘(B) AUTHORIZATION OF APPROPRIA21 TIONS.—For purposes of carrying out the provi22 sions of this subsection, in addition to funds 

23 otherwise available, out of any funds in the 

24 Treasury not otherwise appropriated, there are 

25 appropriated to the Secretary of Health and 


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1 Human Services $1,000,000 for each of the fis2 cal years 2010 through 2014.’’. 

3 SEC. 1444. APPLICATION OF QUALITY MEASURES. 

4 (a) INPATIENT HOSPITAL SERVICES.—Section 

5 1886(b)(3)(B) of such Act (42 U.S.C. 1395ww(b)(3)(B)) 

6 is amended by adding at the end the following new clause: 

7 ‘‘(x)(I) Subject to subclause (II), for purposes of re8 porting data on quality measures for inpatient hospital 

9 services furnished during fiscal year 2012 and each subse10 quent fiscal year, the quality measures specified under 

11 clause (viii) shall be measures selected by the Secretary 

12 from measures that have been endorsed by the entity with 

13 a contract with the Secretary under section 1890(a). 

14 ‘‘(II) In the case of a specified area or medical topic 

15 determined appropriate by the Secretary for which a fea16 sible and practical quality measure has not been endorsed 

17 by the entity with a contract under section 1890(a), the 

18 Secretary may specify a measure that is not so endorsed 

19 as long as due consideration is given to measures that 

20 have been endorsed or adopted by a consensus organiza21 tion identified by the Secretary. The Secretary shall sub22 mit such a non-endorsed measure to the entity for consid23 eration for endorsement. If the entity considers but does 

24 not endorse such a measure and if the Secretary does not 

25 phase-out use of such measure, the Secretary shall include 


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1 the rationale for continued use of such a measure in rule2 making.’’. 

3 (b) OUTPATIENT HOSPITAL SERVICES.—Section 

4 1833(t)(17) of such Act (42 U.S.C. 1395l(t)(17)) is 

5 amended by adding at the end the following new subpara6 graph: 

7 ‘‘(F) USE OF ENDORSED QUALITY MEAS8 URES.—The provisions of clause (x) of section 

9 1886(b)(3)(C) shall apply to quality measures 

10 for covered OPD services under this paragraph 

11 in the same manner as such provisions apply to 

12 quality measures for inpatient hospital serv13 ices.’’. 

14 (c) PHYSICIANS’ SERVICES.—Section 

15 1848(k)(2)(C)(ii) of such Act (42 U.S.C. 1395w– 

16 4(k)(2)(C)(ii)) is amended by adding at the end the fol17 lowing: ‘‘The Secretary shall submit such a non-endorsed 

18 measure to the entity for consideration for endorsement. 

19 If the entity considers but does not endorse such a meas20 ure and if the Secretary does not phase-out use of such 

21 measure, the Secretary shall include the rationale for con22 tinued use of such a measure in rulemaking.’’. 

23 (d) RENAL DIALYSIS SERVICES.—Section 

24 1881(h)(2)(B)(ii) of such Act (42 U.S.C. 

25 1395rr(h)(2)(B)(ii)) is amended by adding at the end the 


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1 following: ‘‘The Secretary shall submit such a non-en2 dorsed measure to the entity for consideration for endorse3 ment. If the entity considers but does not endorse such 

4 a measure and if the Secretary does not phase-out use 

5 of such measure, the Secretary shall include the rationale 

6 for continued use of such a measure in rulemaking.’’. 

7 (e) ENDORSEMENT OF STANDARDS.—Section 

8 1890(b)(2) of the Social Security Act (42 U.S.C. 

9 1395aaa(b)(2)) is amended by adding after and below sub10 paragraph (B) the following: 

11 ‘‘ ‘If the entity does not endorse a measure, such en12 tity shall explain the reasons and provide sugges13 tions about changes to such measure that might 

14 make it a potentially endorsable measure.’ ’’. 

15 (f) EFFECTIVE DATE.—Except as otherwise pro16 vided, the amendments made by this section shall apply 

17 to quality measures applied for payment years beginning 

18 with 2012 or fiscal year 2012, as the case may be. 

19 SEC. 1445. CONSENSUS-BASED ENTITY FUNDING. 

20 Section 1890(d) of the Social Security Act (42 U.S.C. 

21 1395aaa(d)) is amended by striking ‘‘for each of fiscal 

22 years 2009 through 2012’’ and inserting ‘‘for fiscal year 

23 2009, and $12,000,000 for each of the fiscal years 2010 

24 through 2012.’’ 


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1 Subtitle D—Physician Payments 

2 Sunshine Provision 

3 SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BE4 TWEEN MANUFACTURERS AND DISTRIBU5 TORS OF COVERED DRUGS, DEVICES, 

6 BIOLOGICALS, OR MEDICAL SUPPLIES 

7 UNDER MEDICARE, MEDICAID, OR CHIP AND 

8 PHYSICIANS AND OTHER HEALTH CARE ENTI9 TIES AND BETWEEN PHYSICIANS AND OTHER 

10 HEALTH CARE ENTITIES. 

11 (a) IN GENERAL.—Part A of title XI of the Social 

12 Security Act (42 U.S.C. 1301 et seq.), as amended by sec13 tion 1631(a), is further amended by inserting after section 

14 1128G the following new section: 

15 ‘‘SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS’ FINAN16 CIAL RELATIONSHIPS WITH MANUFACTUR17 ERS AND DISTRIBUTORS OF COVERED 

18 DRUGS, DEVICES, BIOLOGICALS, OR MEDICAL 

19 SUPPLIES UNDER MEDICARE, MEDICAID, OR 

20 CHIP AND WITH ENTITIES THAT BILL FOR 

21 SERVICES UNDER MEDICARE. 

22 ‘‘(a) REPORTING OF PAYMENTS OR OTHER TRANS23 FERS OF VALUE.— 

24 ‘‘(1) IN GENERAL.—Except as provided in this 

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1 nually thereafter, each applicable manufacturer or 

2 distributor that provides a payment or other transfer 

3 of value to a covered recipient, or to an entity or in4 dividual at the request of or designated on behalf of 

5 a covered recipient, shall submit to the Secretary, in 

6 such electronic form as the Secretary shall require, 

7 the following information with respect to the pre8 ceding calendar year: 

9 ‘‘(A) With respect to the covered recipient, 

10 the recipient’s name, business address, physi11 cian specialty, and national provider identifier. 

12 ‘‘(B) With respect to the payment or other 

13 transfer of value, other than a drug sample— 

14 ‘‘(i) its value and date; 

15 ‘‘(ii) the name of the related drug, de16 vice, or supply, if available; and 

17 ‘‘(iii) a description of its form, indi18 cated (as appropriate for all that apply) 

19 as— 

20 ‘‘(I) cash or a cash equivalent; 

21 ‘‘(II) in-kind items or services; 

22 ‘‘(III) stock, a stock option, or 

23 any other ownership interest, divi24 dend, profit, or other return on invest25 ment; or 


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1 ‘‘(IV) any other form (as defined 

2 by the Secretary). 

3 ‘‘(C) With respect to a drug sample, the 

4 name, number, date, and dosage units of the 

5 sample. 

6 ‘‘(2) AGGREGATE REPORTING.—Information 

7 submitted by an applicable manufacturer or dis8 tributor under paragraph (1) shall include the ag9 gregate amount of all payments or other transfers of 

10 value provided by the manufacturer or distributor to 

11 covered recipients (and to entities or individuals at 

12 the request of or designated on behalf of a covered 

13 recipient) during the year involved, including all pay14 ments and transfers of value regardless of whether 

15 such payments or transfer of value were individually 

16 disclosed. 

17 ‘‘(3) SPECIAL RULE FOR CERTAIN PAYMENTS

18 OR OTHER TRANSFERS OF VALUE.—In the case 

19 where an applicable manufacturer or distributor pro20 vides a payment or other transfer of value to an en21 tity or individual at the request of or designated on 

22 behalf of a covered recipient, the manufacturer or 

23 distributor shall disclose that payment or other 

24 transfer of value under the name of the covered re25 cipient. 


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1 ‘‘(4) DELAYED REPORTING FOR PAYMENTS

2 MADE PURSUANT TO PRODUCT DEVELOPMENT

3 AGREEMENTS.—In the case of a payment or other 

4 transfer of value made to a covered recipient by an 

5 applicable manufacturer or distributor pursuant to a 

6 product development agreement for services fur7 nished in connection with the development of a new 

8 drug, device, biological, or medical supply, the appli9 cable manufacturer or distributor may report the 

10 value and recipient of such payment or other trans11 fer of value in the first reporting period under this 

12 subsection in the next reporting deadline after the 

13 earlier of the following: 

14 ‘‘(A) The date of the approval or clearance 

15 of the covered drug, device, biological, or med16 ical supply by the Food and Drug Administra17 tion. 

18 ‘‘(B) Two calendar years after the date 

19 such payment or other transfer of value was 

20 made. 

21 ‘‘(5) DELAYED REPORTING FOR PAYMENTS

22 MADE PURSUANT TO CLINICAL INVESTIGATIONS.—In 

23 the case of a payment or other transfer of value 

24 made to a covered recipient by an applicable manu25 facturer or distributor in connection with a clinical 


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1 investigation regarding a new drug, device, biologi2 cal, or medical supply, the applicable manufacturer 

3 or distributor may report as required under this sec4 tion in the next reporting period under this sub5 section after the earlier of the following: 

6 ‘‘(A) The date that the clinical investiga7 tion is registered on the website maintained by 

8 the National Institutes of Health pursuant to 

9 section 671 of the Food and Drug Administra10 tion Amendments Act of 2007. 

11 ‘‘(B) Two calendar years after the date 

12 such payment or other transfer of value was 

13 made. 

14 ‘‘(6) CONFIDENTIALITY.—Information de15 scribed in paragraph (4) or (5) shall be considered 

16 confidential and shall not be subject to disclosure 

17 under section 552 of title 5, United States Code, or 

18 any other similar Federal, State, or local law, until 

19 or after the date on which the information is made 

20 available to the public under such paragraph. 

21 ‘‘(b) REPORTING OF OWNERSHIP INTEREST BY PHY22 SICIANS IN HOSPITALS AND OTHER ENTITIES THAT BILL

23 MEDICARE.—Not later than March 31 of each year (be24 ginning with 2011), each hospital or other health care en25 tity (not including a Medicare Advantage organization) 


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1 that bills the Secretary under part A or part B of title 

2 XVIII for services shall report on the ownership shares 

3 (other than ownership shares described in section 1877(c)) 

4 of each physician who, directly or indirectly, owns an in5 terest in the entity. In this subsection, the term ‘physician’ 

6 includes a physician’s immediate family members (as de7 fined for purposes of section 1877(a)). 

8 ‘‘(c) PUBLIC AVAILABILITY.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish procedures to ensure that, not later than Sep11 tember 30, 2011, and on June 30 of each year be12 ginning thereafter, the information submitted under 

13 subsections (a) and (b), other than information re14 gard drug samples, with respect to the preceding 

15 calendar year is made available through an Internet 

16 website that— 

17 ‘‘(A) is searchable and is in a format that 

18 is clear and understandable; 

19 ‘‘(B) contains information that is pre20 sented by the name of the applicable manufac21 turer or distributor, the name of the covered re22 cipient, the business address of the covered re23 cipient, the specialty (if applicable) of the cov24 ered recipient, the value of the payment or 

25 other transfer of value, the date on which the 


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1 payment or other transfer of value was provided 

2 to the covered recipient, the form of the pay3 ment or other transfer of value, indicated (as 

4 appropriate) under subsection (a)(1)(B)(ii), the 

5 nature of the payment or other transfer of 

6 value, indicated (as appropriate) under sub7 section (a)(1)(B)(iii), and the name of the cov8 ered drug, device, biological, or medical supply, 

9 as applicable; 

10 ‘‘(C) contains information that is able to 

11 be easily aggregated and downloaded; 

12 ‘‘(D) contains a description of any enforce13 ment actions taken to carry out this section, in14 cluding any penalties imposed under subsection 

15 (d), during the preceding year; 

16 ‘‘(E) contains background information on 

17 industry-physician relationships; 

18 ‘‘(F) in the case of information submitted 

19 with respect to a payment or other transfer of 

20 value described in subsection (a)(5), lists such 

21 information separately from the other informa22 tion submitted under subsection (a) and des23 ignates such separately listed information as 

24 funding for clinical research; 


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1 ‘‘(G) contains any other information the 

2 Secretary determines would be helpful to the 

3 average consumer; and 

4 ‘‘(H) provides the covered recipient an op5 portunity to submit corrections to the informa6 tion made available to the public with respect to 

7 the covered recipient. 

8 ‘‘(2) ACCURACY OF REPORTING.—The accuracy 

9 of the information that is submitted under sub10 sections (a) and (b) and made available under para11 graph (1) shall be the responsibility of the applicable 

12 manufacturer or distributor of a covered drug, de13 vice, biological, or medical supply reporting under 

14 subsection (a) or hospital or other health care entity 

15 reporting physician ownership under subsection (b). 

16 The Secretary shall establish procedures to ensure 

17 that the covered recipient is provided with an oppor18 tunity to submit corrections to the manufacturer, 

19 distributor, hospital, or other entity reporting under 

20 subsection (a) or (b) with regard to information 

21 made public with respect to the covered recipient 

22 and, under such procedures, the corrections shall be 

23 transmitted to the Secretary. 

24 ‘‘(3) SPECIAL RULE FOR DRUG SAMPLES.—In25 formation relating to drug samples provided under 


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1 subsection (a) shall not be made available to the 

2 public by the Secretary but may be made available 

3 outside the Department of Health and Human Serv4 ices by the Secretary for research or legitimate busi5 ness purposes pursuant to data use agreements. 

6 ‘‘(4) SPECIAL RULE FOR NATIONAL PROVIDER

7 IDENTIFIERS.—Information relating to national pro8 vider identifiers provided under subsection (a) shall 

9 not be made available to the public by the Secretary 

10 but may be made available outside the Department 

11 of Health and Human Services by the Secretary for 

12 research or legitimate business purposes pursuant to 

13 data use agreements. 

14 ‘‘(d) PENALTIES FOR NONCOMPLIANCE.— 

15 ‘‘(1) FAILURE TO REPORT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), except as provided in paragraph (2), 

18 any applicable manufacturer or distributor that 

19 fails to submit information required under sub20 section (a) in a timely manner in accordance 

21 with regulations promulgated to carry out such 

22 subsection, and any hospital or other entity that 

23 fails to submit information required under sub24 section (b) in a timely manner in accordance 

25 with regulations promulgated to carry out such 


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1 subsection shall be subject to a civil money pen2 alty of not less than $1,000, but not more than 

3 $10,000, for each payment or other transfer of 

4 value or ownership or investment interest not 

5 reported as required under such subsection. 

6 Such penalty shall be imposed and collected in 

7 the same manner as civil money penalties under 

8 subsection (a) of section 1128A are imposed 

9 and collected under that section. 

10 ‘‘(B) LIMITATION.—The total amount of 

11 civil money penalties imposed under subpara12 graph (A) with respect to each annual submis13 sion of information under subsection (a) by an 

14 applicable manufacturer or distributor or other 

15 entity shall not exceed $150,000. 

16 ‘‘(2) KNOWING FAILURE TO REPORT.— 

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), any applicable manufacturer or dis19 tributor that knowingly fails to submit informa20 tion required under subsection (a) in a timely 

21 manner in accordance with regulations promul22 gated to carry out such subsection and any hos23 pital or other entity that fails to submit infor24 mation required under subsection (b) in a time25 ly manner in accordance with regulations proVerDate Nov 24 2008 00:36 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00643 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 mulgated to carry out such subsection, shall be 

2 subject to a civil money penalty of not less than 

3 $10,000, but not more than $100,000, for each 

4 payment or other transfer of value or ownership 

5 or investment interest not reported as required 

6 under such subsection. Such penalty shall be 

7 imposed and collected in the same manner as 

8 civil money penalties under subsection (a) of 

9 section 1128A are imposed and collected under 

10 that section. 

11 ‘‘(B) LIMITATION.—The total amount of 

12 civil money penalties imposed under subpara13 graph (A) with respect to each annual submis14 sion of information under subsection (a) or (b) 

15 by an applicable manufacturer, distributor, or 

16 entity shall not exceed $1,000,000, or, if great17 er, 0.1 percentage of the total annual revenues 

18 of the manufacturer, distributor, or entity. 

19 ‘‘(3) USE OF FUNDS.—Funds collected by the 

20 Secretary as a result of the imposition of a civil 

21 money penalty under this subsection shall be used to 

22 carry out this section. 

23 ‘‘(4) ENFORCEMENT THROUGH STATE ATTOR24 NEYS GENERAL.—The attorney general of a State, 

25 after providing notice to the Secretary of an intent 


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1 to proceed under this paragraph in a specific case 

2 and providing the Secretary with an opportunity to 

3 bring an action under this subsection and the Sec4 retary declining such opportunity, may proceed 

5 under this subsection against a manufacturer or dis6 tributor in the State. 

7 ‘‘(e) ANNUAL REPORT TO CONGRESS.—Not later 

8 than April 1 of each year beginning with 2011, the Sec9 retary shall submit to Congress a report that includes the 

10 following: 

11 ‘‘(1) The information submitted under this sec12 tion during the preceding year, aggregated for each 

13 applicable manufacturer or distributor of a covered 

14 drug, device, biological, or medical supply that sub15 mitted such information during such year. 

16 ‘‘(2) A description of any enforcement actions 

17 taken to carry out this section, including any pen18 alties imposed under subsection (d), during the pre19 ceding year. 

20 ‘‘(f) DEFINITIONS.—In this section: 

21 ‘‘(1) APPLICABLE MANUFACTURER; APPLICA22 BLE DISTRIBUTOR.—The term ‘applicable manufac23 turer’ means a manufacturer of a covered drug, de24 vice, biological, or medical supply, and the term ‘apVerDate Nov 24 2008 00:36 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00645 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 plicable distributor’ means a distributor of a covered 

2 drug, device, or medical supply. 

3 ‘‘(2) CLINICAL INVESTIGATION.—The term 

4 ‘clinical investigation’ means any experiment involv5 ing one or more human subjects, or materials de6 rived from human subjects, in which a drug or de7 vice is administered, dispensed, or used. 

8 ‘‘(3) COVERED DRUG, DEVICE, BIOLOGICAL, OR

9 MEDICAL SUPPLY.—The term ‘covered’ means, with 

10 respect to a drug, device, biological, or medical sup11 ply, such a drug, device, biological, or medical supply 

12 for which payment is available under title XVIII or 

13 a State plan under title XIX or XXI (or a waiver 

14 of such a plan). 

15 ‘‘(4) COVERED RECIPIENT.—The term ‘covered 

16 recipient’ means the following: 

17 ‘‘(A) A physician. 

18 ‘‘(B) A physician group practice. 

19 ‘‘(C) Any other prescriber of a covered 

20 drug, device, biological, or medical supply. 

21 ‘‘(D) A pharmacy or pharmacist. 

22 ‘‘(E) A health insurance issuer, group 

23 health plan, or other entity offering a health 

24 benefits plan, including any employee of such 

25 an issuer, plan, or entity. 


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1 ‘‘(F) A pharmacy benefit manager, includ2 ing any employee of such a manager. 

3 ‘‘(G) A hospital. 

4 ‘‘(H) A medical school. 

5 ‘‘(I) A sponsor of a continuing medical 

6 education program. 

7 ‘‘(J) A patient advocacy or disease specific 

8 group. 

9 ‘‘(K) A organization of health care profes10 sionals. 

11 ‘‘(L) A biomedical researcher. 

12 ‘‘(M) A group purchasing organization. 

13 ‘‘(5) DISTRIBUTOR OF A COVERED DRUG, DE14 VICE, OR MEDICAL SUPPLY.—The term ‘distributor 

15 of a covered drug, device, or medical supply’ means 

16 any entity which is engaged in the marketing or dis17 tribution of a covered drug, device, or medical sup18 ply (or any subsidiary of or entity affiliated with 

19 such entity), but does not include a wholesale phar20 maceutical distributor. 

21 ‘‘(6) EMPLOYEE.—The term ‘employee’ has the 

22 meaning given such term in section 1877(h)(2). 

23 ‘‘(7) KNOWINGLY.—The term ‘knowingly’ has 

24 the meaning given such term in section 3729(b) of 

25 title 31, United States Code. 


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1 ‘‘(8) MANUFACTURER OF A COVERED DRUG, 

2 DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The 

3 term ‘manufacturer of a covered drug, device, bio4 logical, or medical supply’ means any entity which is 

5 engaged in the production, preparation, propagation, 

6 compounding, conversion, processing, marketing, or 

7 distribution of a covered drug, device, biological, or 

8 medical supply (or any subsidiary of or entity affili9 ated with such entity). 

10 ‘‘(9) PAYMENT OR OTHER TRANSFER OF

11 VALUE.— 

12 ‘‘(A) IN GENERAL.—The term ‘payment or 

13 other transfer of value’ means a transfer of 

14 anything of value for or of any of the following: 

15 ‘‘(i) Gift, food, or entertainment. 

16 ‘‘(ii) Travel or trip. 

17 ‘‘(iii) Honoraria. 

18 ‘‘(iv) Research funding or grant. 

19 ‘‘(v) Education or conference funding. 

20 ‘‘(vi) Consulting fees. 

21 ‘‘(vii) Ownership or investment inter22 est and royalties or license fee. 

23 ‘‘(B) INCLUSIONS.—Subject to subpara24 graph (C), the term ‘payment or other transfer 

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1 rarium, speaking fee, consulting fee, travel, 

2 services, dividend, profit distribution, stock or 

3 stock option grant, or any ownership or invest4 ment interest held by a physician in a manufac5 turer (excluding a dividend or other profit dis6 tribution from, or ownership or investment in7 terest in, a publicly traded security or mutual 

8 fund (as described in section 1877(c))). 

9 ‘‘(C) EXCLUSIONS.—The term ‘payment or 

10 other transfer of value’ does not include the fol11 lowing: 

12 ‘‘(i) Any payment or other transfer of 

13 value provided by an applicable manufac14 turer or distributor to a covered recipient 

15 where the amount transferred to, requested 

16 by, or designated on behalf of the covered 

17 recipient does not exceed $5. 

18 ‘‘(ii) The loan of a covered device for 

19 a short-term trial period, not to exceed 90 

20 days, to permit evaluation of the covered 

21 device by the covered recipient. 

22 ‘‘(iii) Items or services provided under 

23 a contractual warranty, including the re24 placement of a covered device, where the 

25 terms of the warranty are set forth in the 


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1 purchase or lease agreement for the cov2 ered device. 

3 ‘‘(iv) A transfer of anything of value 

4 to a covered recipient when the covered re5 cipient is a patient and not acting in the 

6 professional capacity of a covered recipient. 

7 ‘‘(v) In-kind items used for the provi8 sion of charity care. 

9 ‘‘(vi) A dividend or other profit dis10 tribution from, or ownership or investment 

11 interest in, a publicly traded security and 

12 mutual fund (as described in section 

13 1877(c)). 

14 ‘‘(vii) Compensation paid by a manu15 facturer or distributor of a covered drug, 

16 device, biological, or medical supply to a 

17 covered recipient who is directly employed 

18 by and works solely for such manufacturer 

19 or distributor. 

20 ‘‘(viii) Any discount or cash rebate. 

21 ‘‘(10) PHYSICIAN.—The term ‘physician’ has 

22 the meaning given that term in section 1861(r). For 

23 purposes of this section, such term does not include 

24 a physician who is an employee of the applicable 


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1 manufacturer that is required to submit information 

2 under subsection (a). 

3 ‘‘(g) ANNUAL REPORTS TO STATES.—Not later than 

4 April 1 of each year beginning with 2011, the Secretary 

5 shall submit to States a report that includes a summary 

6 of the information submitted under subsections (a) and 

7 (d) during the preceding year with respect to covered re8 cipients or other hospitals and entities in the State. 

9 ‘‘(h) RELATION TO STATE LAWS.— 

10 ‘‘(1) IN GENERAL.—Effective on January 1, 

11 2011, subject to paragraph (2), the provisions of 

12 this section shall preempt any law or regulation of 

13 a State or of a political subdivision of a State that 

14 requires an applicable manufacturer and applicable 

15 distributor (as such terms are defined in subsection 

16 (f)) to disclose or report, in any format, the type of 

17 information (described in subsection (a)) regarding a 

18 payment or other transfer of value provided by the 

19 manufacturer to a covered recipient (as so defined). 

20 ‘‘(2) NO PREEMPTION OF ADDITIONAL RE21 QUIREMENTS.—Paragraph (1) shall not preempt any 

22 law or regulation of a State or of a political subdivi23 sion of a State that requires any of the following: 


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1 ‘‘(A) The disclosure or reporting of infor2 mation not of the type required to be disclosed 

3 or reported under this section. 

4 ‘‘(B) The disclosure or reporting, in any 

5 format, of the type of information required to 

6 be disclosed or reported under this section to a 

7 Federal, State, or local governmental agency for 

8 public health surveillance, investigation, or 

9 other public health purposes or health oversight 

10 purposes. 

11 ‘‘(C) The discovery or admissibility of in12 formation described in this section in a crimi13 nal, civil, or administrative proceeding.’’. 

14 (b) AVAILABILITY OF INFORMATION FROM THE DIS15 CLOSURE OF FINANCIAL RELATIONSHIP REPORT

16 (DFRR).—The Secretary of Health and Human Services 

17 shall submit to Congress a report on the full results of 

18 the Disclosure of Physician Financial Relationships sur19 veys required pursuant to section 5006 of the Deficit Re20 duction Act of 2005. Such report shall be submitted to 

21 Congress not later than the date that is 6 months after 

22 the date such surveys are collected and shall be made pub23 licly available on an Internet website of the Department 

24 of Health and Human Services. 


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1 Subtitle E—Public Reporting on 

2 Health Care-Associated Infections 

3 SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY 

4 HOSPITALS AND AMBULATORY SURGICAL 

5 CENTERS ON HEALTH CARE-ASSOCIATED IN6 FECTIONS. 

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

8 is amended by inserting after section 1138 the following 

9 section: 

10 ‘‘SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY 

11 HOSPITALS AND AMBULATORY SURGICAL 

12 CENTERS ON HEALTH CARE-ASSOCIATED IN13 FECTIONS. 

14 ‘‘(a) REPORTING REQUIREMENT.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall provide 

16 that a hospital (as defined in subsection (g)) or am17 bulatory surgical center meeting the requirements of 

18 titles XVIII or XIX may participate in the programs 

19 established under such titles (pursuant to the appli20 cable provisions of law, including sections 

21 1866(a)(1) and 1832(a)(1)(F)(i)) only if, in accord22 ance with this section, the hospital or center reports 

23 such information on health care-associated infections 

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1 mographic information associated with such infec2 tions) as the Secretary specifies. 

3 ‘‘(2) REPORTING PROTOCOLS.—Such informa4 tion shall be reported in accordance with reporting 

5 protocols established by the Secretary through the 

6 Director of the Centers for Disease Control and Pre7 vention (in this section referred to as the ‘CDC’) 

8 and to the National Healthcare Safety Network of 

9 the CDC or under such another reporting system of 

10 such Centers as determined appropriate by the Sec11 retary in consultation with such Director. 

12 ‘‘(3) COORDINATION WITH HIT.—The Sec13 retary, through the Director of the CDC and the Of14 fice of the National Coordinator for Health Informa15 tion Technology, shall ensure that the transmission 

16 of information under this subsection is coordinated 

17 with systems established under the HITECH Act, 

18 where appropriate. 

19 ‘‘(4) PROCEDURES TO ENSURE THE VALIDITY

20 OF INFORMATION.—The Secretary shall establish 

21 procedures regarding the validity of the information 

22 submitted under this subsection in order to ensure 

23 that such information is appropriately compared 

24 across hospitals and centers. Such procedures shall 


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1 address failures to report as well as errors in report2 ing. 

3 ‘‘(5) IMPLEMENTATION.—Not later than 1 year 

4 after the date of enactment of this section, the Sec5 retary, through the Director of CDC, shall promul6 gate regulations to carry out this section. 

7 ‘‘(b) PUBLIC POSTING OF INFORMATION.—The Sec8 retary shall promptly post, on the official public Internet 

9 site of the Department of Health and Human Services, 

10 the information reported under subsection (a). Such infor11 mation shall be set forth in a manner that allows for the 

12 comparison of information on health care-associated infec13 tions— 

14 ‘‘(1) among hospitals and ambulatory surgical 

15 centers; and 

16 ‘‘(2) by demographic information. 

17 ‘‘(c) ANNUAL REPORT TO CONGRESS.—On an annual 

18 basis the Secretary shall submit to the Congress a report 

19 that summarizes each of the following: 

20 ‘‘(1) The number and types of health care-asso21 ciated infections reported under subsection (a) in 

22 hospitals and ambulatory surgical centers during 

23 such year. 


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1 ‘‘(2) Factors that contribute to the occurrence 

2 of such infections, including health care worker im3 munization rates. 

4 ‘‘(3) Based on the most recent information 

5 available to the Secretary on the composition of the 

6 professional staff of hospitals and ambulatory sur7 gical centers, the number of certified infection con8 trol professionals on the staff of hospitals and ambu9 latory surgical centers. 

10 ‘‘(4) The total increases or decreases in health 

11 care costs that resulted from increases or decreases 

12 in the rates of occurrence of each such type of infec13 tion during such year. 

14 ‘‘(5) Recommendations, in coordination with the 

15 Center for Quality Improvement established under 

16 section 931 of the Public Health Service Act, for 

17 best practices to eliminate the rates of occurrence of 

18 each such type of infection in hospitals and ambula19 tory surgical centers. 

20 ‘‘(d) NON-PREEMPTION OF STATE LAWS.—Nothing 

21 in this section shall be construed as preempting or other22 wise affecting any provision of State law relating to the 

23 disclosure of information on health care-associated infec24 tions or patient safety procedures for a hospital or ambu25 latory surgical center. 


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1 ‘‘(e) HEALTH CARE-ASSOCIATED INFECTION.—For 

2 purposes of this section: 

3 ‘‘(1) IN GENERAL.—The term ‘health care-asso4 ciated infection’ means an infection that develops in 

5 a patient who has received care in any institutional 

6 setting where health care is delivered and is related 

7 to receiving health care. 

8 ‘‘(2) RELATED TO RECEIVING HEALTH CARE.— 

9 The term ‘related to receiving health care’, with re10 spect to an infection, means that the infection was 

11 not incubating or present at the time health care 

12 was provided. 

13 ‘‘(f) APPLICATION TO CRITICAL ACCESS HOS14 PITALS.—For purposes of this section, the term ‘hospital’ 

15 includes a critical access hospital, as defined in section 

16 1861(mm)(1).’’. 

17 (b) EFFECTIVE DATE.—With respect to section 

18 1138A of the Social Security Act (as inserted by sub19 section (a) of this section), the requirement under such 

20 section that hospitals and ambulatory surgical centers 

21 submit reports takes effect on such date (not later than 

22 2 years after the date of the enactment of this Act) as 

23 the Secretary of Health and Human Services shall specify. 

24 In order to meet such deadline, the Secretary may imple25 ment such section through guidance or other instructions. 


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1 (c) GAO REPORT.—Not later than 18 months after 

2 the date of the enactment of this Act, the Comptroller 

3 General of the United States shall submit to Congress a 

4 report on the program established under section 1138A 

5 of the Social Security Act, as inserted by subsection (a). 

6 Such report shall include an analysis of the appropriate7 ness of the types of information required for submission, 

8 compliance with reporting requirements, the success of the 

9 validity procedures established, and any conflict or overlap 

10 between the reporting required under such section and any 

11 other reporting systems mandated by either the States or 

12 the Federal Government. 

13 (d) REPORT ON ADDITIONAL DATA.—Not later than 

14 18 months after the date of the enactment of this Act, 

15 the Secretary of Health and Human Services shall submit 

16 to the Congress a report on the appropriateness of expand17 ing the requirements under such section to include addi18 tional information (such as health care worker immuniza19 tion rates), in order to improve health care quality and 

20 patient safety. 


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1 TITLE V—MEDICARE GRADUATE 

2 MEDICAL EDUCATION 

3 SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI4 TIONS. 

5 (a) IN GENERAL.—Section 1886(h) of the Social Se6 curity Act (42 U.S.C. 1395ww(h)) is amended— 

7 (1) in paragraph (4)(F)(i), by striking ‘‘para8 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

9 (2) in paragraph (4)(H)(i), by striking ‘‘para10 graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 

11 (3) in paragraph (7)(E), by inserting ‘‘and 

12 paragraph (8)’’ after ‘‘this paragraph’’; and 

13 (4) by adding at the end the following new 

14 paragraph: 

15 ‘‘(8) ADDITIONAL REDISTRIBUTION OF UNUSED

16 RESIDENCY POSITIONS.— 

17 ‘‘(A) REDUCTIONS IN LIMIT BASED ON UN18 USED POSITIONS.— 

19 ‘‘(i) PROGRAMS SUBJECT TO REDUC20 TION.—If a hospital’s reference resident 

21 level (specified in clause (ii)) is less than 

22 the otherwise applicable resident limit (as 

23 defined in subparagraph (C)(ii)), effective 

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1 erwise applicable resident limit shall be re2 duced by 90 percent of the difference be3 tween such otherwise applicable resident 

4 limit and such reference resident level. 

5 ‘‘(ii) REFERENCE RESIDENT LEVEL.— 

6 ‘‘(I) IN GENERAL.—Except as 

7 otherwise provided in a subsequent 

8 subclause, the reference resident level 

9 specified in this clause for a hospital 

10 is the highest resident level for any of 

11 the 3 most recent cost reporting peri12 ods (ending before the date of the en13 actment of this paragraph) of the hos14 pital for which a cost report has been 

15 settled (or, if not, submitted (subject 

16 to audit)), as determined by the Sec17 retary. 

18 ‘‘(II) USE OF MOST RECENT AC19 COUNTING PERIOD TO RECOGNIZE EX20 PANSION OF EXISTING PROGRAMS.—If 

21 a hospital submits a timely request to 

22 increase its resident level due to an 

23 expansion, or planned expansion, of 

24 an existing residency training pro25 gram that is not reflected on the most 


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1 recent settled or submitted cost re2 port, after audit and subject to the 

3 discretion of the Secretary, subject to 

4 subclause (IV), the reference resident 

5 level for such hospital is the resident 

6 level that includes the additional resi7 dents attributable to such expansion 

8 or establishment, as determined by 

9 the Secretary. The Secretary is au10 thorized to determine an alternative 

11 reference resident level for a hospital 

12 that submitted to the Secretary a 

13 timely request, before the start of the 

14 2009–2010 academic year, for an in15 crease in its reference resident level 

16 due to a planned expansion. 

17 ‘‘(III) SPECIAL PROVIDER

18 AGREEMENT.—In the case of a hos19 pital described in paragraph 

20 (4)(H)(v), the reference resident level 

21 specified in this clause is the limita22 tion applicable under subclause (I) of 

23 such paragraph. 

24 ‘‘(IV) PREVIOUS REDISTRIBU25 TION.—The reference resident level 


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1 specified in this clause for a hospital 

2 shall be increased to the extent re3 quired to take into account an in4 crease in resident positions made 

5 available to the hospital under para6 graph (7)(B) that are not otherwise 

7 taken into account under a previous 

8 subclause. 

9 ‘‘(iii) AFFILIATION.—The provisions 

10 of clause (i) shall be applied to hospitals 

11 which are members of the same affiliated 

12 group (as defined by the Secretary under 

13 paragraph (4)(H)(ii)) and to the extent the 

14 hospitals can demonstrate that they are 

15 filling any additional resident slots allo16 cated to other hospitals through an affili17 ation agreement, the Secretary shall adjust 

18 the determination of available slots accord19 ingly, or which the Secretary otherwise has 

20 permitted the resident positions (under 

21 section 402 of the Social Security Amend22 ments of 1967) to be aggregated for pur23 poses of applying the resident position lim24 itations under this subsection. 

25 ‘‘(B) REDISTRIBUTION.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall increase the otherwise applicable resi3 dent limit for each qualifying hospital that 

4 submits an application under this subpara5 graph by such number as the Secretary 

6 may approve for portions of cost reporting 

7 periods occurring on or after July 1, 2011. 

8 The estimated aggregate number of in9 creases in the otherwise applicable resident 

10 limit under this subparagraph may not ex11 ceed the Secretary’s estimate of the aggre12 gate reduction in such limits attributable 

13 to subparagraph (A). 

14 ‘‘(ii) REQUIREMENTS FOR QUALI15 FYING HOSPITALS.—A hospital is not a 

16 qualifying hospital for purposes of this 

17 paragraph unless the following require18 ments are met: 

19 ‘‘(I) MAINTENANCE OF PRIMARY

20 CARE RESIDENT LEVEL.—The hos21 pital maintains the number of primary 

22 care residents at a level that is not 

23 less than the base level of primary 

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1 dent positions provided to the hospital 

2 under this subparagraph. For pur3 poses of this subparagraph, the ‘base 

4 level of primary care residents’ for a 

5 hospital is the level of such residents 

6 as of a base period (specified by the 

7 Secretary), determined without regard 

8 to whether such positions were in ex9 cess of the otherwise applicable resi10 dent limit for such period but taking 

11 into account the application of sub12 clauses (II) and (III) of subparagraph 

13 (A)(ii). 

14 ‘‘(II) DEDICATED ASSIGNMENT

15 OF ADDITIONAL RESIDENT POSITIONS

16 TO PRIMARY CARE.—The hospital as17 signs all such additional resident posi18 tions for primary care residents. 

19 ‘‘(III) ACCREDITATION.—The 

20 hospital’s residency programs in pri21 mary care are fully accredited or, in 

22 the case of a residency training pro23 gram not in operation as of the base 

24 year, the hospital is actively applying 

25 for such accreditation for the program 


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1 for such additional resident positions 

2 (as determined by the Secretary). 

3 ‘‘(iii) CONSIDERATIONS IN REDIS4 TRIBUTION.—In determining for which 

5 qualifying hospitals the increase in the oth6 erwise applicable resident limit is provided 

7 under this subparagraph, the Secretary 

8 shall take into account the demonstrated 

9 likelihood of the hospital filling the posi10 tions within the first 3 cost reporting peri11 ods beginning on or after July 1, 2011, 

12 made available under this subparagraph, 

13 as determined by the Secretary. 

14 ‘‘(iv) PRIORITY FOR CERTAIN HOS15 PITALS.—In determining for which quali16 fying hospitals the increase in the other17 wise applicable resident limit is provided 

18 under this subparagraph, the Secretary 

19 shall distribute the increase to qualifying 

20 hospitals based on the following criteria: 

21 ‘‘(I) The Secretary shall give 

22 preference to hospitals that had a re23 duction in resident training positions 

24 under subparagraph (A). 


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1 ‘‘(II) The Secretary shall give 

2 preference to hospitals with 3-year 

3 primary care residency training pro4 grams, such as family practice and 

5 general internal medicine. 

6 ‘‘(III) The Secretary shall give 

7 preference to hospitals insofar as they 

8 have in effect formal arrangements 

9 (as determined by the Secretary) that 

10 place greater emphasis upon training 

11 in Federally qualified health centers, 

12 rural health clinics, and other nonpro13 vider settings, and to hospitals that 

14 receive additional payments under 

15 subsection (d)(5)(F) and emphasize 

16 training in an outpatient department. 

17 ‘‘(IV) The Secretary shall give 

18 preference to hospitals with a number 

19 of positions (as of July 1, 2009) in 

20 excess of the otherwise applicable resi21 dent limit for such period. 

22 ‘‘(V) The Secretary shall give 

23 preference to hospitals that place 

24 greater emphasis upon training in a 

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1 ignated under section 332 of the Pub2 lic Health Service Act) or a health 

3 professional needs area (designated 

4 under section 2211 of such Act). 

5 ‘‘(VI) The Secretary shall give 

6 preference to hospitals in States that 

7 have low resident-to-population ratios 

8 (including a greater preference for 

9 those States with lower resident-to10 population ratios). 

11 ‘‘(v) LIMITATION.—In no case shall 

12 more than 20 full-time equivalent addi13 tional residency positions be made available 

14 under this subparagraph with respect to 

15 any hospital. 

16 ‘‘(vi) APPLICATION OF PER RESIDENT

17 AMOUNTS FOR PRIMARY CARE.—With re18 spect to additional residency positions in a 

19 hospital attributable to the increase pro20 vided under this subparagraph, the ap21 proved FTE resident amounts are deemed 

22 to be equal to the hospital per resident 

23 amounts for primary care and nonprimary 

24 care computed under paragraph (2)(D) for 

25 that hospital. 


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1 ‘‘(vi) DISTRIBUTION.—The Secretary 

2 shall distribute the increase in resident 

3 training positions to qualifying hospitals 

4 under this subparagraph not later than 

5 July 1, 2011. 

6 ‘‘(C) RESIDENT LEVEL AND LIMIT DE7 FINED.—In this paragraph: 

8 ‘‘(i) The term ‘resident level’ has the 

9 meaning given such term in paragraph 

10 (7)(C)(i). 

11 ‘‘(ii) The term ‘otherwise applicable 

12 resident limit’ means, with respect to a 

13 hospital, the limit otherwise applicable 

14 under subparagraphs (F)(i) and (H) of 

15 paragraph (4) on the resident level for the 

16 hospital determined without regard to this 

17 paragraph but taking into account para18 graph (7)(A). 

19 ‘‘(D) MAINTENANCE OF PRIMARY CARE

20 RESIDENT LEVEL.—In carrying out this para21 graph, the Secretary shall require hospitals that 

22 receive additional resident positions under sub23 paragraph (B)— 

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1 ber of primary care residents in its resi2 dency training programs; and 

3 ‘‘(ii) as a condition of payment for a 

4 cost reporting period under this subsection 

5 for such positions, to maintain the level of 

6 such positions at not less than the sum 

7 of— 

8 ‘‘(I) the base level of primary 

9 care resident positions (as determined 

10 under subparagraph (B)(ii)(I)) before 

11 receiving such additional positions; 

12 and 

13 ‘‘(II) the number of such addi14 tional positions.’’. 

15 (b) IME.— 

16 (1) IN GENERAL.—Section 1886(d)(5)(B)(v) of 

17 the Social Security Act (42 U.S.C. 

18 1395ww(d)(5)(B)(v)), in the second sentence, is 

19 amended— 

20 (A) by striking ‘‘subsection (h)(7)’’ and in21 serting ‘‘subsections (h)(7) and (h)(8)’’; and 

22 (B) by striking ‘‘it applies’’ and inserting 

23 ‘‘they apply’’. 

24 (2) CONFORMING PROVISION.—Section 

25 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 


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1 1395ww(d)(5)(B)) is amended by adding at the end 

2 the following clause: 

3 ‘‘(x) For discharges occurring on or after July 1, 

4 2011, insofar as an additional payment amount under this 

5 subparagraph is attributable to resident positions distrib6 uted to a hospital under subsection (h)(8)(B), the indirect 

7 teaching adjustment factor shall be computed in the same 

8 manner as provided under clause (ii) with respect to such 

9 resident positions.’’. 

10 (c) CONFORMING AMENDMENT.—Section 422(b)(2) 

11 of the Medicare Prescription Drug, Improvement, and 

12 Modernization Act of 2003 (Public Law 108–173) is 

13 amended by striking ‘‘section 1886(h)(7)’’ and all that fol14 lows and inserting ‘‘paragraphs (7) and (8) of subsection 

15 (h) of section 1886 of the Social Security Act’’. 

16 SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET17 TINGS. 

18 (a) DIRECT GME.—Section 1886(h)(4)(E) of the So19 cial Security Act (42 U.S.C. 1395ww(h)) is amended— 

20 (1) by designating the first sentence as a clause 

21 (i) with the heading ‘‘IN GENERAL’’ and appropriate 

22 indentation; 

23 (2) by striking ‘‘shall be counted and that all 

24 the time’’ and inserting ‘‘shall be counted and 

25 that— 


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1 ‘‘(I) effective for cost reporting 

2 periods beginning before July 1, 2009, 

3 all the time’’; 

4 (3) in subclause (I), as inserted by paragraph 

5 (1), by striking the period at the end and inserting 

6 ‘‘; and’’; and 

7 (A) by inserting after subclause (I), as so 

8 inserted, the following: 

9 ‘‘(II) effective for cost reporting 

10 periods beginning on or after July 1, 

11 2009, all the time so spent by a resi12 dent shall be counted towards the de13 termination of full-time equivalency, 

14 without regard to the setting in which 

15 the activities are performed, if the 

16 hospital incurs the costs of the sti17 pends and fringe benefits of the resi18 dent during the time the resident 

19 spends in that setting. 

20 Any hospital claiming under this subpara21 graph for time spent in a nonprovider set22 ting shall maintain and make available to 

23 the Secretary records regarding the 

24 amount of such time and such amount in 

25 comparison with amounts of such time in 


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1 such base year as the Secretary shall speci2 fy.’’. 

3 (b) IME.—Section 1886(d)(5)(B)(iv) of the Social 

4 Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amend5 ed— 

6 (1) by striking ‘‘(iv) Effective for discharges oc7 curring on or after October 1, 1997’’ and inserting 

8 ‘‘(iv)(I) Effective for discharges occurring on or 

9 after October 1, 1997, and before July 1, 2009’’; 

10 and 

11 (2) by inserting after subclause (I), as inserted 

12 by paragraph (1), the following new subclause: 

13 ‘‘(II) Effective for discharges occurring on or 

14 after July 1, 2009, all the time spent by an intern 

15 or resident in patient care activities at an entity in 

16 a nonprovider setting shall be counted towards the 

17 determination of full-time equivalency if the hospital 

18 incurs the costs of the stipends and fringe benefits 

19 of the intern or resident during the time the intern 

20 or resident spends in that setting.’’. 

21 (c) OIG STUDY ON IMPACT ON TRAINING.—The In22 spector General of the Department of Health and Human 

23 Services shall analyze the data collected by the Secretary 

24 of Health and Human Services from the records made 

25 available to the Secretary under section 1886(h)(4)(E) of 


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1 the Social Security Act, as amended by subsection (a), in 

2 order to assess the extent to which there is an increase 

3 in time spent by medical residents in training in nonpro4 vider settings as a result of the amendments made by this 

5 section. Not later than 4 years after the date of the enact6 ment of this Act, the Inspector General shall submit a re7 port to Congress on such analysis and assessment. 

8 (d) DEMONSTRATION PROJECT FOR APPROVED

9 TEACHING HEALTH CENTERS.— 

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

11 Human Services shall conduct a demonstration 

12 project under which an approved teaching health 

13 center (as defined in paragraph (3)) would be eligi14 ble for payment under subsections (h) and (k) of 

15 section 1886 of the Social Security Act (42 U.S.C. 

16 1395ww) of amounts for its own direct costs of 

17 graduate medical education activities for primary 

18 care residents, as well as for the direct costs of grad19 uate medical education activities of its contracting 

20 hospital for such residents, in a manner similar to 

21 the manner in which such payments would be made 

22 to a hospital if the hospital were to operate such a 

23 program. 

24 (2) CONDITIONS.—Under the demonstration 

25 project— 


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1 (A) an approved teaching health center 

2 shall contract with an accredited teaching hos3 pital to carry out the inpatient responsibilities 

4 of the primary care residency program of the 

5 hospital involved and is responsible for payment 

6 to the hospital for the hospital’s costs of the 

7 salary and fringe benefits for residents in the 

8 program; 

9 (B) the number of primary care residents 

10 of the center shall not count against the con11 tracting hospital’s resident limit; and 

12 (C) the contracting hospital shall agree not 

13 to diminish the number of residents in its pri14 mary care residency training program. 

15 (3) APPROVED TEACHING HEALTH CENTER DE16 FINED.—In this subsection, the term ‘‘approved 

17 teaching health center’’ means a nonprovider setting, 

18 such as a Federally qualified health center or rural 

19 health clinic (as defined in section 1861(aa) of the 

20 Social Security Act), that develops and operates an 

21 accredited primary care residency program for which 

22 funding would be available if it were operated by a 

23 hospital. 


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1 SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI2 DACTIC AND SCHOLARLY ACTIVITIES AND 

3 OTHER ACTIVITIES. 

4 (a) DIRECT GME.—Section 1886(h) of the Social Se5 curity Act (42 U.S.C. 1395ww(h)) is amended— 

6 (1) in paragraph (4)(E), as amended by section 

7 1502(a)— 

8 (A) in clause (i), by striking ‘‘Such rules’’ 

9 and inserting ‘‘Subject to clause (ii), such 

10 rules’’; and 

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

12 clause: 

13 ‘‘(ii) TREATMENT OF CERTAIN NON14 PROVIDER AND DIDACTIC ACTIVITIES.— 

15 Such rules shall provide that all time spent 

16 by an intern or resident in an approved 

17 medical residency training program in a 

18 nonprovider setting that is primarily en19 gaged in furnishing patient care (as de20 fined in paragraph (5)(K)) in nonpatient 

21 care activities, such as didactic conferences 

22 and seminars, but not including research 

23 not associated with the treatment or diag24 nosis of a particular patient, as such time 

25 and activities are defined by the Secretary, 


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1 shall be counted toward the determination 

2 of full-time equivalency.’’; 

3 (2) in paragraph (4), by adding at the end the 

4 following new subparagraph: 

5 ‘‘(I) In determining the hospital’s number 

6 of full-time equivalent residents for purposes of 

7 this subsection, all the time that is spent by an 

8 intern or resident in an approved medical resi9 dency training program on vacation, sick leave, 

10 or other approved leave, as such time is defined 

11 by the Secretary, and that does not prolong the 

12 total time the resident is participating in the 

13 approved program beyond the normal duration 

14 of the program shall be counted toward the de15 termination of full-time equivalency.’’; and 

16 (3) in paragraph (5), by adding at the end the 

17 following new subparagraph: 

18 ‘‘(K) NONPROVIDER SETTING THAT IS PRI19 MARILY ENGAGED IN FURNISHING PATIENT

20 CARE.—The term ‘nonprovider setting that is 

21 primarily engaged in furnishing patient care’ 

22 means a nonprovider setting in which the pri23 mary activity is the care and treatment of pa24 tients, as defined by the Secretary.’’. 


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1 (b) IME DETERMINATIONS.—Section 1886(d)(5)(B) 

2 of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by 

3 section 1501(b), is amended by adding at the end the fol4 lowing new clause: 

5 ‘‘(xi)(I) The provisions of subparagraph (I) of sub6 section (h)(4) shall apply under this subparagraph in the 

7 same manner as they apply under such subsection. 

8 ‘‘(II) In determining the hospital’s number of full9 time equivalent residents for purposes of this subpara10 graph, all the time spent by an intern or resident in an 

11 approved medical residency training program in non12 patient care activities, such as didactic conferences and 

13 seminars, as such time and activities are defined by the 

14 Secretary, that occurs in the hospital shall be counted to15 ward the determination of full-time equivalency if the hos16 pital— 

17 ‘‘(aa) is recognized as a subsection (d) hospital; 

18 ‘‘(bb) is recognized as a subsection (d) Puerto 

19 Rico hospital; 

20 ‘‘(cc) is reimbursed under a reimbursement sys21 tem authorized under section 1814(b)(3); or 

22 ‘‘(dd) is a provider-based hospital outpatient de23 partment. 

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1 graph, all the time spent by an intern or resident in an 

2 approved medical residency training program in research 

3 activities that are not associated with the treatment or di4 agnosis of a particular patient, as such time and activities 

5 are defined by the Secretary, shall not be counted toward 

6 the determination of full-time equivalency.’’. 

7 (c) EFFECTIVE DATES; APPLICATION.— 

8 (1) IN GENERAL.—Except as otherwise pro9 vided, the Secretary of Health and Human Services 

10 shall implement the amendments made by this sec11 tion in a manner so as to apply to cost reporting pe12 riods beginning on or after January 1, 1983. 

13 (2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 

14 the Social Security Act, as added by subsection 

15 (a)(1)(B), shall apply to cost reporting periods be16 ginning on or after July 1, 2008. 

17 (3) IME.—Section 1886(d)(5)(B)(x)(III) of the 

18 Social Security Act, as added by subsection (b), shall 

19 apply to cost reporting periods beginning on or after 

20 October 1, 2001. Such section, as so added, shall 

21 not give rise to any inference on how the law in ef22 fect prior to such date should be interpreted. 

23 (4) APPLICATION.—The amendments made by 

24 this section shall not be applied in a manner that re25 quires reopening of any settled hospital cost reports 


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1 as to which there is not a jurisdictionally proper ap2 peal pending as of the date of the enactment of this 

3 Act on the issue of payment for indirect costs of 

4 medical education under section 1886(d)(5)(B) of 

5 the Social Security Act or for direct graduate med6 ical education costs under section 1886(h) of such 

7 Act. 

8 SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS 

9 FROM CLOSED HOSPITALS. 

10 (a) DIRECT GME.—Section 1886(h)(4)(H) of the So11 cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) 

12 is amended by adding at the end the following new clause: 

13 ‘‘(vi) REDISTRIBUTION OF RESIDENCY

14 SLOTS AFTER A HOSPITAL CLOSES.— 

15 ‘‘(I) IN GENERAL.—The Sec16 retary shall, by regulation, establish a 

17 process consistent with subclauses (II) 

18 and (III) under which, in the case 

19 where a hospital (other than a hos20 pital described in clause (v)) with an 

21 approved medical residency program 

22 in a State closes on or after the date 

23 that is 2 years before the date of the 

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1 plicable resident limit under this para2 graph for other hospitals in the State 

3 in accordance with this clause. 

4 ‘‘(II) PROCESS FOR HOSPITALS

5 IN CERTAIN AREAS.—In determining 

6 for which hospitals the increase in the 

7 otherwise applicable resident limit de8 scribed in subclause (I) is provided, 

9 the Secretary shall establish a process 

10 to provide for such increase to one or 

11 more hospitals located in the State. 

12 Such process shall take into consider13 ation the recommendations submitted 

14 to the Secretary by the senior health 

15 official (as designated by the chief ex16 ecutive officer of such State) if such 

17 recommendations are submitted not 

18 later than 180 days after the date of 

19 the hospital closure involved (or, in 

20 the case of a hospital that closed after 

21 the date that is 2 years before the 

22 date of the enactment of this clause, 

23 180 days after such date of enact24 ment). 


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1 ‘‘(III) LIMITATION.—The esti2 mated aggregate number of increases 

3 in the otherwise applicable resident 

4 limits for hospitals under this clause 

5 shall be equal to the estimated num6 ber of resident positions in the ap7 proved medical residency programs 

8 that closed on or after the date de9 scribed in subclause (I).’’. 

10 (b) NO EFFECT ON TEMPORARY FTE CAP ADJUST11 MENTS.—The amendments made by this section shall not 

12 effect any temporary adjustment to a hospital’s FTE cap 

13 under section 413.79(h) of title 42, Code of Federal Regu14 lations (as in effect on the date of enactment of this Act) 

15 and shall not affect the application of section 

16 1886(h)(4)(H)(v) of the Social Security Act. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 422(b)(2) of the Medicare Prescrip19 tion Drug, Improvement, and Modernization Act of 

20 2003 (Public Law 108–173), as amended by section 

21 1501(c), is amended by striking ‘‘(7) and’’ and in22 serting ‘‘(4)(H)(vi), (7), and’’. 

23 (2) Section 1886(h)(7)(E) of the Social Secu24 rity Act (42 U.S.C. 1395ww(h)(7)(E)) is amended 


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1 by inserting ‘‘or under paragraph (4)(H)(vi)’’ after 

2 ‘‘under this paragraph’’. 

3 SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED 

4 MEDICAL RESIDENCY TRAINING. 

5 (a) SPECIFICATION OF GOALS FOR APPROVED MED6 ICAL RESIDENCY TRAINING PROGRAMS.—Section 

7 1886(h)(1) of the Social Security Act (42 U.S.C. 

8 1395ww(h)(1)) is amended— 

9 (1) by designating the matter beginning with 

10 ‘‘Notwithstanding’’ as a subparagraph (A) with the 

11 heading ‘‘IN GENERAL.—’’ and with appropriate in12 dentation; and 

13 (2) by adding at the end the following new 

14 paragraph: 

15 ‘‘(B) GOALS AND ACCOUNTABILITY FOR

16 APPROVED MEDICAL RESIDENCY TRAINING PRO17 GRAMS.—The goals of medical residency train18 ing programs are to foster a physician work19 force so that physicians are trained to be able 

20 to do the following: 

21 ‘‘(i) Work effectively in various health 

22 care delivery settings, such as nonprovider 

23 settings. 


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1 ‘‘(ii) Coordinate patient care within 

2 and across settings relevant to their spe3 cialties. 

4 ‘‘(iii) Understand the relevant cost 

5 and value of various diagnostic and treat6 ment options. 

7 ‘‘(iv) Work in inter-professional teams 

8 and multi-disciplinary team-based models 

9 in provider and nonprovider settings to en10 hance safety and improve quality of patient 

11 care. 

12 ‘‘(v) Be knowledgeable in methods of 

13 identifying systematic errors in health care 

14 delivery and in implementing systematic 

15 solutions in case of such errors, including 

16 experience and participation in continuous 

17 quality improvement projects to improve 

18 health outcomes of the population the phy19 sicians serve. 

20 ‘‘(vi) Be meaningful EHR users (as 

21 determined under section 1848(o)(2)) in 

22 the delivery of care and in improving the 

23 quality of the health of the community and 

24 the individuals that the hospital serves.’’ 


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1 (b) GAO STUDY ON EVALUATION OF TRAINING PRO2 GRAMS.— 

3 (1) IN GENERAL.—The Comptroller General of 

4 the United States shall conduct a study to evaluate 

5 the extent to which medical residency training pro6 grams— 

7 (A) are meeting the goals described in sec8 tion 1886(h)(1)(B) of the Social Security Act, 

9 as added by subsection (a), in a range of resi10 dency programs, including primary care and 

11 other specialties; and 

12 (B) have the appropriate faculty expertise 

13 to teach the topics required to achieve such 

14 goals. 

15 (2) REPORT.—Not later than 18 months after 

16 the date of the enactment of this Act, the Comp17 troller General shall submit to Congress a report on 

18 such study and shall include in such report rec19 ommendations as to how medical residency training 

20 programs could be further encouraged to meet such 

21 goals through means such as— 

22 (A) development of curriculum require23 ments; and 

24 (B) assessment of the accreditation proc25 esses of the Accreditation Council for Graduate 


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1 Medical Education and the American Osteo2 pathic Association and effectiveness of those 

3 processes in accrediting medical residency pro4 grams that meet the goals referred to in para5 graph (1)(A). 

6 TITLE VI—PROGRAM INTEGRITY 

7 Subtitle A—Increased Funding To 

8 Fight Waste, Fraud, and Abuse 

9 SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO 

10 FIGHT FRAUD AND ABUSE. 

11 (a) IN GENERAL.—Section 1817(k) of the Social Se12 curity Act (42 U.S.C. 1395i(k)) is amended— 

13 (1) by adding at the end the following new 

14 paragraph: 

15 ‘‘(7) ADDITIONAL FUNDING.—In addition to the 

16 funds otherwise appropriated to the Account from 

17 the Trust Fund under paragraphs (3) and (4) and 

18 for purposes described in paragraphs (3)(C) and 

19 (4)(A), there are hereby appropriated an additional 

20 $100,000,000 to such Account from such Trust 

21 Fund for each fiscal year beginning with 2011. The 

22 funds appropriated under this paragraph shall be al23 located in the same proportion as the total funding 

24 appropriated with respect to paragraphs (3)(A) and 

25 (4)(A) was allocated with respect to fiscal year 


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1 2010, and shall be available without further appro2 priation until expended.’’. 

3 (2) in paragraph (4)(A)— 

4 (A) by inserting ‘‘for activities described in 

5 paragraph (3)(C) and’’ after ‘‘necessary’’; and 

6 (B) by inserting ‘‘until expended’’ after 

7 ‘‘appropriation’’. 

8 (b) FLEXIBILITY IN PURSUING FRAUD AND

9 ABUSE.—Section 1893(a) of the Social Security Act (42 

10 U.S.C. 1395ddd(a)) is amended by inserting ‘‘, or other11 wise,’’ after ‘‘entities’’. 

12 Subtitle B—Enhanced Penalties for 

13 Fraud and Abuse 

14 SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS 

15 ON PROVIDER OR SUPPLIER ENROLLMENT 

16 APPLICATIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)) is amended— 

19 (1) in paragraph (1)(D), by striking all that fol20 lows ‘‘in which the person was excluded’’ and insert21 ing ‘‘under Federal law from the Federal health care 

22 program under which the claim was made, or’’; 

23 (2) by striking ‘‘or’’ at the end of paragraph 

24 (6); 


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1 (3) in paragraph (7), by inserting at the end 

2 ‘‘or’’; 

3 (4) by inserting after paragraph (7) the fol4 lowing new paragraph: 

5 ‘‘(8) knowingly makes or causes to be made any 

6 false statement, omission, or misrepresentation of a 

7 material fact in any application, agreement, bid, or 

8 contract to participate or enroll as a provider of 

9 services or supplier under a Federal health care pro10 gram, including managed care organizations under 

11 title XIX, Medicare Advantage organizations under 

12 part C of title XVIII, prescription drug plan spon13 sors under part D of title XVIII, and entities that 

14 apply to participate as providers of services or sup15 pliers in such managed care organizations and such 

16 plans;’’; 

17 (5) in the matter following paragraph (8), as 

18 inserted by paragraph (4), by striking ‘‘or in cases 

19 under paragraph (7), $50,000 for each such act)’’ 

20 and inserting ‘‘in cases under paragraph (7), 

21 $50,000 for each such act, or in cases under para22 graph (8), $50,000 for each false statement, omis23 sion, or misrepresentation of a material fact)’’; and 

24 (6) in the second sentence, by striking ‘‘for a 

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1 pose, or in cases under paragraph (8), an assess2 ment of not more than 3 times the amount claimed 

3 as the result of the false statement, omission, or 

4 misrepresentation of material fact claimed by a pro5 vider of services or supplier whose application to 

6 participate contained such false statement, omission, 

7 or misrepresentation)’’. 

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

9 subsection (a) shall apply to acts committed on or after 

10 January 1, 2010. 

11 SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF 

12 FALSE STATEMENTS MATERIAL TO A FALSE 

13 CLAIM. 

14 (a) IN GENERAL.—Section 1128A(a) of the Social 

15 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec16 tion 1611, is further amended— 

17 (1) in paragraph (7), by striking ‘‘or’’ at the 

18 end; 

19 (2) in paragraph (8), by inserting ‘‘or’’ at the 

20 end; and 

21 (3) by inserting after paragraph (8), the fol22 lowing new paragraph: 

23 ‘‘(9) knowingly makes, uses, or causes to be 

24 made or used, a false record or statement material 

25 to a false or fraudulent claim for payment for items 


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1 and services furnished under a Federal health care 

2 program;’’; and 

3 (4) in the matter following paragraph (9), as 

4 inserted by paragraph (3)— 

5 (A) by striking ‘‘or in cases under para6 graph (8)’’ and inserting ‘‘in cases under para7 graph (8)’’; and 

8 (B) by striking ‘‘a material fact)’’ and in9 serting ‘‘a material fact, in cases under para10 graph (9), $50,000 for each false record or 

11 statement)’’. 

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

13 subsection (a) shall apply to acts committed on or after 

14 January 1, 2010. 

15 SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC16 TIONS. 

17 (a) IN GENERAL.—Section 1128A(a) of the Social 

18 Security Act (42 U.S.C. 1320a–7a(a)), as amended by sec19 tions 1611 and 1612, is further amended— 

20 (1) in paragraph (8), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (9), by inserting ‘‘or’’ at the 

23 end; 

24 (3) by inserting after paragraph (9) the fol25 lowing new paragraph: 


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1 ‘‘(10) fails to grant timely access, upon reason2 able request (as defined by the Secretary in regula3 tions), to the Inspector General of the Department 

4 of Health and Human Services, for the purpose of 

5 audits, investigations, evaluations, or other statutory 

6 functions of the Inspector General of the Depart7 ment of Health and Human Services;’’; and 

8 (4) in the matter following paragraph (10), as 

9 inserted by paragraph (3)— 

10 (A) by striking ‘‘or’’ after ‘‘$50,000 for 

11 each such act,’’; and 

12 (B) by inserting ‘‘, or in cases under para13 graph (10), $15,000 for each day of the failure 

14 described in such paragraph’’ after ‘‘false 

15 record or statement’’. 

16 (b) ENSURING TIMELY INSPECTIONS RELATING TO

17 CONTRACTS WITH MA ORGANIZATIONS.—Section 

18 1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 

19 amended— 

20 (1) in subparagraph (A), by inserting ‘‘timely’’ 

21 before ‘‘inspect’’; and 

22 (2) in subparagraph (B), by inserting ‘‘timely’’ 

23 before ‘‘audit and inspect’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to violations committed on or 

3 after January 1, 2010. 

4 SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS. 

5 (a) MEDICARE.—Part A of title XVIII of the Social 

6 Security Act is amended by inserting after section 1819 

7 the following new section: 

8 ‘‘SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE 

9 CARE. 

10 ‘‘(a) IN GENERAL.—If the Secretary determines on 

11 the basis of a survey or otherwise, that a hospice program 

12 that is certified for participation under this title has dem13 onstrated a substandard quality of care and failed to meet 

14 such other requirements as the Secretary may find nec15 essary in the interest of the health and safety of the indi16 viduals who are provided care and services by the agency 

17 or organization involved and determines— 

18 ‘‘(1) that the deficiencies involved immediately 

19 jeopardize the health and safety of the individuals to 

20 whom the program furnishes items and services, the 

21 Secretary shall take immediate action to remove the 

22 jeopardy and correct the deficiencies through the 

23 remedy specified in subsection (b)(2)(A)(iii) or ter24 minate the certification of the program, and may 


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1 provide, in addition, for 1 or more of the other rem2 edies described in subsection (b)(2)(A); or 

3 ‘‘(2) that the deficiencies involved do not imme4 diately jeopardize the health and safety of the indi5 viduals to whom the program furnishes items and 

6 services, the Secretary may— 

7 ‘‘(A) impose intermediate sanctions devel8 oped pursuant to subsection (b), in lieu of ter9 minating the certification of the program; and 

10 ‘‘(B) if, after such a period of intermediate 

11 sanctions, the program is still not in compliance 

12 with such requirements, the Secretary shall ter13 minate the certification of the program. 

14 If the Secretary determines that a hospice program 

15 that is certified for participation under this title is 

16 in compliance with such requirements but, as of a 

17 previous period, was not in compliance with such re18 quirements, the Secretary may provide for a civil 

19 money penalty under subsection (b)(2)(A)(i) for the 

20 days in which it finds that the program was not in 

21 compliance with such requirements. 

22 ‘‘(b) INTERMEDIATE SANCTIONS.— 

23 ‘‘(1) DEVELOPMENT AND IMPLEMENTATION.— 

24 The Secretary shall develop and implement, by not 

25 later than July 1, 2012— 


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1 ‘‘(A) a range of intermediate sanctions to 

2 apply to hospice programs under the conditions 

3 described in subsection (a), and 

4 ‘‘(B) appropriate procedures for appealing 

5 determinations relating to the imposition of 

6 such sanctions. 

7 ‘‘(2) SPECIFIED SANCTIONS.— 

8 ‘‘(A) IN GENERAL.—The intermediate 

9 sanctions developed under paragraph (1) may 

10 include— 

11 ‘‘(i) civil money penalties in an 

12 amount not to exceed $10,000 for each day 

13 of noncompliance or, in the case of a per 

14 instance penalty applied by the Secretary, 

15 not to exceed $25,000, 

16 ‘‘(ii) denial of all or part of the pay17 ments to which a hospice program would 

18 otherwise be entitled under this title with 

19 respect to items and services furnished by 

20 a hospice program on or after the date on 

21 which the Secretary determines that inter22 mediate sanctions should be imposed pur23 suant to subsection (a)(2), 

24 ‘‘(iii) the appointment of temporary 

25 management to oversee the operation of 


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1 the hospice program and to protect and as2 sure the health and safety of the individ3 uals under the care of the program while 

4 improvements are made, 

5 ‘‘(iv) corrective action plans, and 

6 ‘‘(v) in-service training for staff. 

7 The provisions of section 1128A (other than 

8 subsections (a) and (b)) shall apply to a civil 

9 money penalty under clause (i) in the same 

10 manner as such provisions apply to a penalty or 

11 proceeding under section 1128A(a). The tem12 porary management under clause (iii) shall not 

13 be terminated until the Secretary has deter14 mined that the program has the management 

15 capability to ensure continued compliance with 

16 all requirements referred to in that clause. 

17 ‘‘(B) CLARIFICATION.—The sanctions 

18 specified in subparagraph (A) are in addition to 

19 sanctions otherwise available under State or 

20 Federal law and shall not be construed as lim21 iting other remedies, including any remedy 

22 available to an individual at common law. 

23 ‘‘(C) COMMENCEMENT OF PAYMENT.—A 

24 denial of payment under subparagraph (A)(ii) 

25 shall terminate when the Secretary determines 


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1 that the hospice program no longer dem2 onstrates a substandard quality of care and 

3 meets such other requirements as the Secretary 

4 may find necessary in the interest of the health 

5 and safety of the individuals who are provided 

6 care and services by the agency or organization 

7 involved. 

8 ‘‘(3) SECRETARIAL AUTHORITY.—The Secretary 

9 shall develop and implement, by not later than July 

10 1, 2011, specific procedures with respect to the con11 ditions under which each of the intermediate sanc12 tions developed under paragraph (1) is to be applied, 

13 including the amount of any fines and the severity 

14 of each of these sanctions. Such procedures shall be 

15 designed so as to minimize the time between identi16 fication of deficiencies and imposition of these sanc17 tions and shall provide for the imposition of incre18 mentally more severe fines for repeated or uncor19 rected deficiencies.’’. 

20 (b) APPLICATION TO MEDICAID.—Section 1905(o) of 

21 the Social Security Act (42 U.S.C. 1396d(o)) is amended 

22 by adding at the end the following new paragraph: 

23 ‘‘(4) The provisions of section 1819A shall apply to 

24 a hospice program providing hospice care under this title 


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1 in the same manner as such provisions apply to a hospice 

2 program providing hospice care under title XVIII.’’. 

3 (c) APPLICATION TO CHIP.—Title XXI of the Social 

4 Security Act is amended by adding at the end the fol5 lowing new section: 

6 ‘‘SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE. 

7 ‘‘The provisions of section 1819A shall apply to a 

8 hospice program providing hospice care under this title in 

9 the same manner such provisions apply to a hospice pro10 gram providing hospice care under title XVIII.’’. 

11 SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX12 CLUDED FROM PROGRAM PARTICIPATION. 

13 (a) IN GENERAL.—Section 1128A(a) of the Social 

14 Security Act (42 U.S.C. 1320a–7a(a)), as amended by the 

15 previous sections, is further amended— 

16 (1) by striking ‘‘or’’ at the end of paragraph 

17 (9); 

18 (2) by inserting ‘‘or’’ at the end of paragraph 

19 (10); 

20 (3) by inserting after paragraph (10) the fol21 lowing new paragraph: 

22 ‘‘(11) orders or prescribes an item or service, 

23 including without limitation home health care, diag24 nostic and clinical lab tests, prescription drugs, du25 rable medical equipment, ambulance services, physVerDate Nov 24 2008 00:36 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00696 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 ical or occupational therapy, or any other item or 

2 service, during a period when the person has been 

3 excluded from participation in a Federal health care 

4 program, and the person knows or should know that 

5 a claim for such item or service will be presented to 

6 such a program;’’; and 

7 (4) in the matter following paragraph (11), as 

8 inserted by paragraph (2), by striking ‘‘$15,000 for 

9 each day of the failure described in such paragraph’’ 

10 and inserting ‘‘$15,000 for each day of the failure 

11 described in such paragraph, or in cases under para12 graph (11), $50,000 for each order or prescription 

13 for an item or service by an excluded individual’’. 

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

15 subsection (a) shall apply to violations committed on or 

16 after January 1, 2010. 

17 SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF 

18 FALSE INFORMATION BY MEDICARE ADVAN19 TAGE AND PART D PLANS. 

20 (a) IN GENERAL.—Section 1857(g)(2)(A) of the So21 cial Security Act (42 U.S.C. 1395w–27(g)(2)(A)) is 

22 amended by inserting ‘‘except with respect to a determina23 tion under subparagraph (E), an assessment of not more 

24 than 3 times the amount claimed by such plan or plan 


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1 sponsor based upon the misrepresentation or falsified in2 formation involved,’’ after ‘‘for each such determination,’’. 

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

4 subsection (a) shall apply to violations committed on or 

5 after January 1, 2010. 

6 SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN7 TAGE AND PART D MARKETING VIOLATIONS. 

8 (a) IN GENERAL.—Section 1857(g)(1) of the Social 

9 Security Act (42 U.S.C. 1395w–27(g)(1)), as amended by 

10 section 1221(b), is amended— 

11 (1) in subparagraph (G), by striking ‘‘or’’ at 

12 the end; 

13 (2) by inserting after subparagraph (H) the fol14 lowing new subparagraphs: 

15 ‘‘(I) except as provided under subpara16 graph (C) or (D) of section 1860D–1(b)(1), en17 rolls an individual in any plan under this part 

18 without the prior consent of the individual or 

19 the designee of the individual; 

20 ‘‘(J) transfers an individual enrolled under 

21 this part from one plan to another without the 

22 prior consent of the individual or the designee 

23 of the individual or solely for the purpose of 

24 earning a commission; 


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1 ‘‘(K) fails to comply with marketing re2 strictions described in subsections (h) and (j) of 

3 section 1851 or applicable implementing regula4 tions or guidance; or 

5 ‘‘(L) employs or contracts with any indi6 vidual or entity who engages in the conduct de7 scribed in subparagraphs (A) through (K) of 

8 this paragraph;’’; and 

9 (3) by adding at the end the following new sen10 tence: ‘‘The Secretary may provide, in addition to 

11 any other remedies authorized by law, for any of the 

12 remedies described in paragraph (2), if the Secretary 

13 determines that any employee or agent of such orga14 nization, or any provider or supplier who contracts 

15 with such organization, has engaged in any conduct 

16 described in subparagraphs (A) through (L) of this 

17 paragraph.’’ 

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

19 subsection (a) shall apply to violations committed on or 

20 after January 1, 2010. 

21 SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF 

22 PROGRAM AUDITS. 

23 (a) IN GENERAL.—Section 1128(b)(2) of the Social 

24 Security Act (42 U.S.C. 1320a–7(b)(2)) is amended— 


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1 (1) in the heading, by inserting ‘‘OR AUDIT’’ 

2 after ‘‘INVESTIGATION’’; and 

3 (2) by striking ‘‘investigation into’’ and all that 

4 follows through the period and inserting ‘‘investiga5 tion or audit related to—’’ 

6 ‘‘(i) any offense described in para7 graph (1) or in subsection (a); or 

8 ‘‘(ii) the use of funds received, directly 

9 or indirectly, from any Federal health care 

10 program (as defined in section 

11 1128B(f)).’’. 

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

13 subsection (a) shall apply to violations committed on or 

14 after January 1, 2010. 

15 SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN16 TITIES FROM PARTICIPATION IN MEDICARE 

17 AND STATE HEALTH CARE PROGRAMS. 

18 (a) IN GENERAL.—Section 1128(c) of the Social Se19 curity Act, as previously amended by this division, is fur20 ther amended— 

21 (1) in the heading, by striking ‘‘AND PERIOD’’ 

22 and inserting ‘‘, PERIOD, AND EFFECT’’; and 

23 (2) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(4)(A) For purposes of this Act, subject to 

2 subparagraph (C), the effect of exclusion is that no 

3 payment may be made by any Federal health care 

4 program (as defined in section 1128B(f)) with re5 spect to any item or service furnished— 

6 ‘‘(i) by an excluded individual or entity; or 

7 ‘‘(ii) at the medical direction or on the pre8 scription of a physician or other authorized in9 dividual when the person submitting a claim for 

10 such item or service knew or had reason to 

11 know of the exclusion of such individual. 

12 ‘‘(B) For purposes of this section and sections 

13 1128A and 1128B, subject to subparagraph (C), an 

14 item or service has been furnished by an individual 

15 or entity if the individual or entity directly or indi16 rectly provided, ordered, manufactured, distributed, 

17 prescribed, or otherwise supplied the item or service 

18 regardless of how the item or service was paid for 

19 by a Federal health care program or to whom such 

20 payment was made. 

21 ‘‘(C)(i) Payment may be made under a Federal 

22 health care program for emergency items or services 

23 (not including items or services furnished in an 

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1 tion or on the prescription of an excluded physician 

2 or other authorized individual during the period of 

3 such individual’s exclusion. 

4 ‘‘(ii) In the case that an individual eligible for 

5 benefits under title XVIII or XIX submits a claim 

6 for payment for items or services furnished by an ex7 cluded individual or entity, and such individual eligi8 ble for such benefits did not know or have reason to 

9 know that such excluded individual or entity was so 

10 excluded, then, notwithstanding such exclusion, pay11 ment shall be made for such items or services. In 

12 such case the Secretary shall notify such individual 

13 eligible for such benefits of the exclusion of the indi14 vidual or entity furnishing the items or services. 

15 Payment shall not be made for items or services fur16 nished by an excluded individual or entity to an indi17 vidual eligible for such benefits after a reasonable 

18 time (as determined by the Secretary in regulations) 

19 after the Secretary has notified the individual eligi20 ble for such benefits of the exclusion of the indi21 vidual or entity furnishing the items or services. 

22 ‘‘(iii) In the case that a claim for payment for 

23 items or services furnished by an excluded individual 

24 or entity is submitted by an individual or entity 

25 other than an individual eligible for benefits under 


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1 title XVIII or XIX or the excluded individual or en2 tity, and the Secretary determines that the indi3 vidual or entity that submitted the claim took rea4 sonable steps to learn of the exclusion and reason5 ably relied upon inaccurate or misleading informa6 tion from the relevant Federal health care program 

7 or its contractor, the Secretary may waive repay8 ment of the amount paid in violation of the exclusion 

9 to the individual or entity that submitted the claim 

10 for the items or services furnished by the excluded 

11 individual or entity. If a Federal health care pro12 gram contractor provided inaccurate or misleading 

13 information that resulted in the waiver of an over14 payment under this clause, the Secretary shall take 

15 appropriate action to recover the improperly paid 

16 amount from the contractor.’’. 

17 Subtitle C—Enhanced Program 

18 and Provider Protections 

19 SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU20 THORITY. 

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

22 (42 U.S.C. 1301 et seq.) is amended by inserting after 

23 section 1128F the following new section: 


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1 ‘‘SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO2 TECTIONS IN THE MEDICARE, MEDICAID, AND 

3 CHIP PROGRAMS. 

4 ‘‘(a) CERTAIN AUTHORIZED SCREENING, ENHANCED

5 OVERSIGHT PERIODS, AND ENROLLMENT MORATORIA.— 

6 ‘‘(1) IN GENERAL.—For periods beginning after 

7 January 1, 2011, in the case that the Secretary de8 termines there is a significant risk of fraudulent ac9 tivity (as determined by the Secretary based on rel10 evant complaints, reports, referrals by law enforce11 ment or other sources, data analysis, trending infor12 mation, or claims submissions by providers of serv13 ices and suppliers) with respect to a category of pro14 vider of services or supplier of items or services, in15 cluding a category within a geographic area, under 

16 title XVIII, XIX, or XXI, the Secretary may impose 

17 any of the following requirements with respect to a 

18 provider of services or a supplier (whether such pro19 vider or supplier is initially enrolling in the program 

20 or is renewing such enrollment): 

21 ‘‘(A) Screening under paragraph (2). 

22 ‘‘(B) Enhanced oversight periods under 

23 paragraph (3). 

24 ‘‘(C) Enrollment moratoria under para25 graph (4). 


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1 In applying this subsection for purposes of title XIX 

2 and XXI the Secretary may require a State to carry 

3 out the provisions of this subsection as a require4 ment of the State plan under title XIX or the child 

5 health plan under title XXI. Actions taken and de6 terminations made under this subsection shall not be 

7 subject to review by a judicial tribunal. 

8 ‘‘(2) SCREENING.—For purposes of paragraph 

9 (1), the Secretary shall establish procedures under 

10 which screening is conducted with respect to pro11 viders of services and suppliers described in such 

12 paragraph. Such screening may include— 

13 ‘‘(A) licensing board checks; 

14 ‘‘(B) screening against the list of individ15 uals and entities excluded from the program 

16 under title XVIII, XIX, or XXI; 

17 ‘‘(C) the excluded provider list system; 

18 ‘‘(D) background checks; and 

19 ‘‘(E) unannounced pre-enrollment or other 

20 site visits. 

21 ‘‘(3) ENHANCED OVERSIGHT PERIOD.—For 

22 purposes of paragraph (1), the Secretary shall estab23 lish procedures to provide for a period of not less 

24 than 30 days and not more than 365 days during 

25 which providers of services and suppliers described 


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1 in such paragraph, as the Secretary determines ap2 propriate, would be subject to enhanced oversight, 

3 such as required or unannounced (or required and 

4 unannounced) site visits or inspections, prepayment 

5 review, enhanced review of claims, and such other 

6 actions as specified by the Secretary, under the pro7 grams under titles XVIII, XIX, and XXI. Under 

8 such procedures, the Secretary may extend such pe9 riod for more than 365 days if the Secretary deter10 mines that after the initial period such additional 

11 period of oversight is necessary. 

12 ‘‘(4) MORATORIUM ON ENROLLMENT OF PRO13 VIDERS AND SUPPLIERS.—For purposes of para14 graph (1), the Secretary, based upon a finding of a 

15 risk of serious ongoing fraud within a program 

16 under title XVIII, XIX, or XXI, may impose a mor17 atorium on the enrollment of providers of services 

18 and suppliers within a category of providers of serv19 ices and suppliers (including a category within a spe20 cific geographic area) under such title. Such a mora21 torium may only be imposed if the Secretary makes 

22 a determination that the moratorium would not ad23 versely impact access of individuals to care under 

24 such program. 


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1 ‘‘(5) CLARIFICATION.—Nothing in this sub2 section shall be interpreted to preclude or limit the 

3 ability of a State to engage in provider screening or 

4 enhanced provider oversight activities beyond those 

5 required by the Secretary.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) MEDICAID.—Section 1902(a) of the Social 

8 Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is 

9 amended— 

10 (A) in paragraph (23), by inserting before 

11 the semicolon at the end the following: ‘‘or by 

12 a person to whom or entity to which a morato13 rium under section 1128G(a)(4) is applied dur14 ing the period of such moratorium’’; 

15 (B) in paragraph (72); by striking at the 

16 end ‘‘and’’; 

17 (C) in paragraph (73), by striking the pe18 riod at the end and inserting ‘‘and’’; and 

19 (D) by adding after paragraph (73) the 

20 following new paragraph: 

21 ‘‘(74) provide that the State will enforce any 

22 determination made by the Secretary under sub23 section (a) of section 1128G (relating to a signifi24 cant risk of fraudulent activity with respect to a cat25 egory of provider or supplier described in such subVerDate Nov 24 2008 00:36 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00707 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 section (a) through use of the appropriate proce2 dures described in such subsection (a)), and that the 

3 State will carry out any activities as required by the 

4 Secretary for purposes of such subsection (a).’’. 

5 (2) CHIP.—Section 2102 of such Act (42 

6 U.S.C. 1397bb) is amended by adding at the end the 

7 following new subsection: 

8 ‘‘(d) PROGRAM INTEGRITY.—A State child health 

9 plan shall include a description of the procedures to be 

10 used by the State— 

11 ‘‘(1) to enforce any determination made by the 

12 Secretary under subsection (a) of section 1128G (re13 lating to a significant risk of fraudulent activity with 

14 respect to a category of provider or supplier de15 scribed in such subsection through use of the appro16 priate procedures described in such subsection); and 

17 ‘‘(2) to carry out any activities as required by 

18 the Secretary for purposes of such subsection.’’. 

19 (3) MEDICARE.—Section 1866(j) of such Act 

20 (42 U.S.C. 1395cc(j)) is amended by adding at the 

21 end the following new paragraph: 

22 ‘‘(3) PROGRAM INTEGRITY.—The provisions of 

23 section 1128G(a) apply to enrollments and renewals 

24 of enrollments of providers of services and suppliers 

25 under this title.’’. 


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1 SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP 

2 PROGRAM DISCLOSURE REQUIREMENTS RE3 LATING TO PREVIOUS AFFILIATIONS. 

4 (a) IN GENERAL.—Section 1128G of the Social Secu5 rity Act, as inserted by section 1631, is amended by add6 ing at the end the following new subsection: 

7 ‘‘(b) ENHANCED PROGRAM DISCLOSURE REQUIRE8 MENTS.— 

9 ‘‘(1) DISCLOSURE.—A provider of services or 

10 supplier who submits on or after July 1, 2011, an 

11 application for enrollment and renewing enrollment 

12 in a program under title XVIII, XIX, or XXI shall 

13 disclose (in a form and manner determined by the 

14 Secretary) any current affiliation or affiliation with15 in the previous 10-year period with a provider of 

16 services or supplier that has uncollected debt or with 

17 a person or entity that has been suspended or ex18 cluded under such program, subject to a payment 

19 suspension, or has had its billing privileges revoked. 

20 ‘‘(2) ENHANCED SAFEGUARDS.—If the Sec21 retary determines that such previous affiliation of 

22 such provider or supplier poses a risk of fraud, 

23 waste, or abuse, the Secretary may apply such en24 hanced safeguards as the Secretary determines nec25 essary to reduce such risk associated with such pro26 vider or supplier enrolling or participating in the 


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1 program under title XVIII, XIX, or XXI. Such safe2 guards may include enhanced oversight, such as en3 hanced screening of claims, required or unannounced 

4 (or required and unannounced) site visits or inspec5 tions, additional information reporting requirements, 

6 and conditioning such enrollment on the provision of 

7 a surety bond. 

8 ‘‘(3) AUTHORITY TO DENY PARTICIPATION.—If 

9 the Secretary determines that there has been at 

10 least one such affiliation and that such affiliation or 

11 affiliations, as applicable, of such provider or sup12 plier poses a serious risk of fraud, waste, or abuse, 

13 the Secretary may deny the application of such pro14 vider or supplier.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) MEDICAID.—Paragraph (74) of section 

17 1902(a) of such Act (42 U.S.C. 1396a(a)), as added 

18 by section 1631(b)(1), is amended— 

19 (A) by inserting ‘‘or subsection (b) of such 

20 section (relating to disclosure requirements)’’ 

21 before ‘‘, and that the State’’; and 

22 (B) by inserting before the period the fol23 lowing: ‘‘and apply any enhanced safeguards, 

24 with respect to a provider or supplier described 


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1 in such subsection (b), as the Secretary deter2 mines necessary under such subsection (b)’’. 

3 (2) CHIP.—Subsection (d) of section 2102 of 

4 such Act (42 U.S.C. 1397bb), as added by section 

5 1631(b)(2), is amended— 

6 (A) in paragraph (1), by striking at the 

7 end ‘‘and’’; 

8 (B) in paragraph (2) by striking the period 

9 at the end and inserting ‘‘; and’’ and 

10 (C) by adding at the end the following new 

11 paragraph: 

12 ‘‘(3) to enforce any determination made by the 

13 Secretary under subsection (b) of section 1128G (re14 lating to disclosure requirements) and to apply any 

15 enhanced safeguards, with respect to a provider or 

16 supplier described in such subsection, as the Sec17 retary determines necessary under such subsection.’’. 

18 SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER 

19 FOR CERTAIN EVALUATION AND MANAGE20 MENT SERVICES. 

21 Section 1848 of the Social Security Act (42 U.S.C. 

22 1395w–4), as amended by section 4101 of the HITECH 

23 Act (Public Law 111–5), is amended by adding at the end 

24 the following new subsection: 


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1 ‘‘(p) PAYMENT MODIFIER FOR CERTAIN EVALUA2 TION AND MANAGEMENT SERVICES.—The Secretary shall 

3 establish a payment modifier under the fee schedule under 

4 this section for evaluation and management services (as 

5 specified in section 1842(b)(16)(B)(ii)) that result in the 

6 ordering of additional services (such as lab tests), the pre7 scription of drugs, the furnishing or ordering of durable 

8 medical equipment in order to enable better monitoring 

9 of claims for payment for such additional services under 

10 this title, or the ordering, furnishing, or prescribing of 

11 other items and services determined by the Secretary to 

12 pose a high risk of waste, fraud, and abuse. The Secretary 

13 may require providers of services or suppliers to report 

14 such modifier in claims submitted for payment.’’. 

15 SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER 

16 MEDICARE INTEGRITY PROGRAM. 

17 (a) IN GENERAL.—Section 1893(c) of the Social Se18 curity Act (42 U.S.C. 1395ddd(c)) is amended— 

19 (1) in paragraph (3), by striking at the end 

20 ‘‘and’’; 

21 (2) by redesignating paragraph (4) as para22 graph (5); and 

23 (3) by inserting after paragraph (3) the fol24 lowing new paragraph: 


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1 ‘‘(4) for the contract year beginning in 2011 

2 and each subsequent contract year, the entity pro3 vides assurances to the satisfaction of the Secretary 

4 that the entity will conduct periodic evaluations of 

5 the effectiveness of the activities carried out by such 

6 entity under the Program and will submit to the 

7 Secretary an annual report on such activities; and’’. 

8 (b) REFERENCE TO MEDICAID INTEGRITY PRO9 GRAM.—For a similar provision with respect to the Med10 icaid Integrity Program, see section 1752. 

11 SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO 

12 ADOPT PROGRAMS TO REDUCE WASTE, 

13 FRAUD, AND ABUSE. 

14 (a) IN GENERAL.—Section 1874 of the Social Secu15 rity Act (42 U.S.C. 42 U.S.C. 1395kk) is amended by 

16 adding at the end the following new subsection: 

17 ‘‘(d) COMPLIANCE PROGRAMS FOR PROVIDERS OF

18 SERVICES AND SUPPLIERS.— 

19 ‘‘(1) IN GENERAL.—The Secretary may 

20 disenroll a provider of services or a supplier (other 

21 than a physician or a skilled nursing facility) under 

22 this title (or may impose any civil monetary penalty 

23 or other intermediate sanction under paragraph (4)) 

24 if such provider of services or supplier fails to, sub25 ject to paragraph (5), establish a compliance proVerDate Nov 24 2008 01:27 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00713 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 gram that contains the core elements established 

2 under paragraph (2). 

3 ‘‘(2) ESTABLISHMENT OF CORE ELEMENTS.— 

4 The Secretary, in consultation with the Inspector 

5 General of the Department of Health and Human 

6 Services, shall establish core elements for a compli7 ance program under paragraph (1). Such elements 

8 may include written policies, procedures, and stand9 ards of conduct, a designated compliance officer and 

10 a compliance committee; effective training and edu11 cation pertaining to fraud, waste, and abuse for the 

12 organization’s employees and contractors; a con13 fidential or anonymous mechanism, such as a hot14 line, to receive compliance questions and reports of 

15 fraud, waste, or abuse; disciplinary guidelines for en16 forcement of standards; internal monitoring and au17 diting procedures, including monitoring and auditing 

18 of contractors; procedures for ensuring prompt re19 sponses to detected offenses and development of cor20 rective action initiatives, including responses to po21 tential offenses; and procedures to return all identi22 fied overpayments to the programs under this title, 

23 title XIX, and title XXI. 

24 ‘‘(3) TIMELINE FOR IMPLEMENTATION.—The 

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1 lishment of the core elements under paragraph (2) 

2 and the date on which a provider of services and 

3 suppliers (other than physicians) shall be required to 

4 have established such a program for purposes of this 

5 subsection. 

6 ‘‘(4) CMS ENFORCEMENT AUTHORITY.—The 

7 Administrator for the Centers of Medicare & Med8 icaid Services shall have the authority to determine 

9 whether a provider of services or supplier described 

10 in subparagraph (3) has met the requirement of this 

11 subsection and to impose a civil monetary penalty 

12 not to exceed $50,000 for each violation. The Sec13 retary may also impose other intermediate sanctions, 

14 including corrective action plans and additional mon15 itoring in the case of a violation of this subsection. 

16 ‘‘(5) PILOT PROGRAM.—The Secretary may 

17 conduct a pilot program on the application of this 

18 subsection with respect to a category of providers of 

19 services or suppliers (other than physicians) that the 

20 Secretary determines to be a category which is at 

21 high risk for waste, fraud, and abuse before imple22 menting the requirements of this subsection to all 

23 providers of services and suppliers described in para24 graph (3).’’. 


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1 (b) REFERENCE TO SIMILAR MEDICAID PROVI2 SION.—For a similar provision with respect to the Med3 icaid program under title XIX of the Social Security Act, 

4 see section 1753. 

5 SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDI6 CARE CLAIMS REDUCED TO NOT MORE THAN 

7 12 MONTHS. 

8 (a) PURPOSE.—In general, the 36-month period cur9 rently allowed for claims filing under parts A, B, C, and, 

10 D of title XVIII of the Social Security Act presents oppor11 tunities for fraud schemes in which processing patterns 

12 of the Centers for Medicare & Medicaid Services can be 

13 observed and exploited. Narrowing the window for claims 

14 processing will not overburden providers and will reduce 

15 fraud and abuse. 

16 (b) REDUCING MAXIMUM PERIOD FOR SUBMIS17 SION.— 

18 (1) PART A.—Section 1814(a) of the Social Se19 curity Act (42 U.S.C. 1395f(a)) is amended— 

20 (A) in paragraph (1), by strikeing ‘‘period 

21 of 3 calendar years’’ and all that follows and in22 serting ‘‘period of 1 calendar year from which 

23 such services are furnished; and’’; and 

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

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1 retary may specify exceptions to the 1 calendar 

2 year period specified in such paragraph.’’. 

3 (2) PART B.—Section 1835(a) of such Act (42 

4 U.S.C. 1395n(a)) is amended— 

5 (A) in paragraph (1), by strikeing ‘‘period 

6 of 3 calendar years’’ and all that follows and in7 serting ‘‘period of 1 calendar year from which 

8 such services are furnished; and’’; and 

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

10 sentence: ‘‘In applying paragraph (1), the Sec11 retary may specify exceptions to the 1 calendar 

12 year period specified in such paragraph.’’. 

13 (3) PARTS C AND D.—Section 1857(d) of such 

14 Act is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(7) PERIOD FOR SUBMISSION OF CLAIMS.— 

17 The contract shall require an MA organization or 

18 PDP sponsor to require any provider of services 

19 under contract with, in partnership with, or affili20 ated with such organization or sponsor to ensure 

21 that, with respect to items and services furnished by 

22 such provider to an enrollee of such organization, 

23 written request, signed by such enrollee, except in 

24 cases in which the Secretary finds it impracticable 

25 for the enrollee to do so, is filed for payment for 


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1 such items and services in such form, in such man2 ner, and by such person or persons as the Secretary 

3 may by regulation prescribe, no later than the close 

4 of the 1 calendar year period after such items and 

5 services are furnished. In applying the previous sen6 tence, the Secretary may specify exceptions to the 1 

7 calendar year period specified.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 subsection (b) shall be effective for items and services fur10 nished on or after January 1, 2011. 

11 SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL 

12 EQUIPMENT OR HOME HEALTH SERVICES RE13 QUIRED TO BE MEDICARE ENROLLED PHYSI14 CIANS OR ELIGIBLE PROFESSIONALS. 

15 (a) DME.—Section 1834(a)(11)(B) of the Social Se16 curity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

17 striking ‘‘physician’’ and inserting ‘‘physician enrolled 

18 under section 1866(j) or an eligible professional under sec19 tion 1848(k)(3)(B)’’. 

20 (b) HOME HEALTH SERVICES.— 

21 (1) PART A.—Section 1814(a)(2) of such Act 

22 (42 U.S.C. 1395(a)(2)) is amended in the matter 

23 preceding subparagraph (A) by inserting ‘‘in the 

24 case of services described in subparagraph (C), a 

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1 ble professional under section 1848(k)(3)(B),’’ be2 fore ‘‘or, in the case of services’’. 

3 (2) PART B.—Section 1835(a)(2) of such Act 

4 (42 U.S.C. 1395n(a)(2)) is amended in the matter 

5 preceding subparagraph (A) by inserting ‘‘, or in the 

6 case of services described in subparagraph (A), a 

7 physician enrolled under section 1866(j) or an eligi8 ble professional under section 1848(k)(3)(B),’’ after 

9 ‘‘a physician’’. 

10 (c) DISCRETION TO EXPAND APPLICATION.—The 

11 Secretary may extend the requirement applied by the 

12 amendments made by subsections (a) and (b) to durable 

13 medical equipment and home health services (relating to 

14 requiring certifications and written orders to be made by 

15 enrolled physicians and health professions) to other cat16 egories of items or services under this title, including cov17 ered part D drugs as defined in section 1860D–2(e), if 

18 the Secretary determines that such application would help 

19 to reduce the risk of waste, fraud, and abuse with respect 

20 to such other categories under title XVIII of the Social 

21 Security Act. 

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

23 this section shall apply to written orders and certifications 

24 made on or after July 1, 2010. 


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1 SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE 

2 DOCUMENTATION ON REFERRALS TO PRO3 GRAMS AT HIGH RISK OF WASTE AND ABUSE. 

4 (a) PHYSICIANS AND OTHER SUPPLIERS.—Section 

5 1842(h) of the Social Security Act, as amended by section 

6 1635, is further amended by adding at the end the fol7 lowing new paragraph: 

8 ‘‘(10) The Secretary may disenroll, for a period of 

9 not more than one year for each act, a physician or sup10 plier under section 1866(j) if such physician or supplier 

11 fails to maintain and, upon request of the Secretary, pro12 vide access to documentation relating to written orders or 

13 requests for payment for durable medical equipment, cer14 tifications for home health services, or referrals for other 

15 items or services written or ordered by such physician or 

16 supplier under this title, as specified by the Secretary.’’. 

17 (b) PROVIDERS OF SERVICES.—Section 1866(a)(1) 

18 of such Act (42 U.S.C. 1395cc), as amended by section 

19 1635, is further amended— 

20 (1) in subparagraph (V), by striking at the end 

21 ‘‘and’’; 

22 (2) in subparagraph (W), by striking the period 

23 at the end and adding ‘‘; and’’; and 

24 (3) by adding at the end the following new sub25 paragraph: 


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1 ‘‘(X) maintain and, upon request of the 

2 Secretary, provide access to documentation re3 lating to written orders or requests for payment 

4 for durable medical equipment, certifications for 

5 home health services, or referrals for other 

6 items or services written or ordered by the pro7 vider under this title, as specified by the Sec8 retary.’’. 

9 (c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec10 tion 1128(b)(11) of the Social Security Act (42 U.S.C. 

11 1320a–7(b)(11)) is amended by inserting ‘‘, ordering, re12 ferring for furnishing, or certifying the need for’’ after 

13 ‘‘furnishing’’. 

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

15 this section shall apply to orders, certifications, and refer16 rals made on or after January 1, 2010. 

17 SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT RE18 QUIRED BEFORE PHYSICIANS MAY CERTIFY 

19 ELIGIBILITY FOR HOME HEALTH SERVICES 

20 OR DURABLE MEDICAL EQUIPMENT UNDER 

21 MEDICARE. 

22 (a) CONDITION OF PAYMENT FOR HOME HEALTH

23 SERVICES.— 

24 (1) PART A.—Section 1814(a)(2)(C) of such 

25 Act is amended— 


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1 (A) by striking ‘‘and such services’’ and in2 serting ‘‘such services’’; and 

3 (B) by inserting after ‘‘care of a physi4 cian’’ the following: ‘‘, and, in the case of a cer5 tification or recertification made by a physician 

6 after January 1, 2010, prior to making such 

7 certification the physician must document that 

8 the physician has had a face-to-face encounter 

9 (including through use of telehealth and other 

10 than with respect to encounters that are inci11 dent to services involved) with the individual 

12 during the 6-month period preceding such cer13 tification, or other reasonable timeframe as de14 termined by the Secretary’’. 

15 (2) PART B.—Section 1835(a)(2)(A) of the So16 cial Security Act is amended— 

17 (A) by striking ‘‘and’’ before ‘‘(iii)’’; and 

18 (B) by inserting after ‘‘care of a physi19 cian’’ the following: ‘‘, and (iv) in the case of 

20 a certification or recertification after January 

21 1, 2010, prior to making such certification the 

22 physician must document that the physician has 

23 had a face-to-face encounter (including through 

24 use of telehealth and other than with respect to 

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1 volved) with the individual during the 6-month 

2 period preceding such certification or recertifi3 cation, or other reasonable timeframe as deter4 mined by the Secretary’’. 

5 (b) CONDITION OF PAYMENT FOR DURABLE MED6 ICAL EQUIPMENT.—Section 1834(a)(11)(B) of the Social 

7 Security Act (42 U.S.C. 1395m(a)(11)(B)) is amended by 

8 adding at the end the following: ‘‘and shall require that 

9 such an order be written pursuant to the physician docu10 menting that the physician has had a face-to-face encoun11 ter (including through use of telehealth and other than 

12 with respect to encounters that are incident to services in13 volved) with the individual involved during the 6-month 

14 period preceding such written order, or other reasonable 

15 timeframe as determined by the Secretary’’. 

16 (c) APPLICATION TO OTHER AREAS UNDER MEDI17 CARE.—The Secretary may apply the face-to-face encoun18 ter requirement described in the amendments made by 

19 subsections (a) and (b) to other items and services for 

20 which payment is provided under title XVIII of the Social 

21 Security Act based upon a finding that such an decision 

22 would reduce the risk of waste, fraud, or abuse. 

23 (d) APPLICATION TO MEDICAID AND CHIP.—The re24 quirements pursuant to the amendments made by sub25 sections (a) and (b) shall apply in the case of physicians 


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1 making certifications for home health services under title 

2 XIX or XXI of the Social Security Act, in the same man3 ner and to the same extent as such requirements apply 

4 in the case of physicians making such certifications under 

5 title XVIII of such Act. 

6 SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AU7 THORITY TO PROGRAM EXCLUSION INVES8 TIGATIONS. 

9 (a) IN GENERAL.—Section 1128(f) of the Social Se10 curity Act (42 U.S.C. 1320a–7(f)) is amended by adding 

11 at the end the following new paragraph: 

12 ‘‘(4) The provisions of subsections (d) and (e) of sec13 tion 205 shall apply with respect to this section to the 

14 same extent as they are applicable with respect to title 

15 II. The Secretary may delegate the authority granted by 

16 section 205(d) (as made applicable to this section) to the 

17 Inspector General of the Department of Health and 

18 Human Services or the Administrator of the Centers for 

19 Medicare & Medicaid Services for purposes of any inves20 tigation under this section.’’. 

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

22 subsection (a) shall apply to investigations beginning on 

23 or after January 1, 2010. 


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1 SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND 

2 MEDICAID OVERPAYMENTS. 

3 Section 1128G of the Social Security Act, as inserted 

4 by section 1631 and amended by section 1632, is further 

5 amended by adding at the end the following new sub6 section: 

7 ‘‘(c) REPORTS ON AND REPAYMENT OF OVERPAY8 MENTS IDENTIFIED THROUGH INTERNAL AUDITS AND

9 REVIEWS.— 

10 ‘‘(1) REPORTING AND RETURNING OVERPAY11 MENTS.—If a person knows of an overpayment, the 

12 person must— 

13 ‘‘(A) report and return the overpayment to 

14 the Secretary, the State, an intermediary, a 

15 carrier, or a contractor, as appropriate, at the 

16 correct address, and 

17 ‘‘(B) notify the Secretary, the State, inter18 mediary, carrier, or contractor to whom the 

19 overpayment was returned in writing of the rea20 son for the overpayment. 

21 ‘‘(2) TIMING.—An overpayment must be re22 ported and returned under paragraph (1)(A) by not 

23 later than the date that is 60 days after the date the 

24 person knows of the overpayment. 

25 Any known overpayment retained later than the ap26 plicable date specified in this paragraph creates an 


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1 obligation as defined in section 3729(b)(3) of title 

2 31 of the United States Code. 

3 ‘‘(3) CLARIFICATION.—Repayment of any over4 payments (or refunding by withholding of future 

5 payments) by a provider of services or supplier does 

6 not otherwise limit the provider or supplier’s poten7 tial liability for administrative obligations such as 

8 applicable interests, fines, and specialties or civil or 

9 criminal sanctions involving the same claim if it is 

10 determined later that the reason for the overpay11 ment was related to fraud by the provider or sup12 plier or the employees or agents of such provider or 

13 supplier. 

14 ‘‘(4) DEFINITIONS.—In this subsection: 

15 ‘‘(A) KNOWS.—The term ‘knows’ has the 

16 meaning given the terms ‘knowing’ and ‘know17 ingly’ in section 3729(b) of title 31 of the 

18 United States Code. 

19 ‘‘(B) OVERPAYMENT.—The term ‘‘overpay20 ment’’ means any finally determined funds that 

21 a person receives or retains under title XVIII, 

22 XIX, or XXI to which the person, after applica23 ble reconciliation, is not entitled under such 

24 title. 


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1 ‘‘(C) PERSON.—The term ‘person’ means a 

2 provider of services, supplier, Medicaid man3 aged care organization (as defined in section 

4 1903(m)(1)(A)), Medicare Advantage organiza5 tion (as defined in section 1859(a)(1)), or PDP 

6 sponsor (as defined in section 1860D– 

7 41(a)(13)), but excluding a beneficiary.’’. 

8 SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIV9 ERS FOR OIG EXCLUSIONS TO BENE10 FICIARIES OF ANY FEDERAL HEALTH CARE 

11 PROGRAM. 

12 Section 1128(c)(3)(B) of the Social Security Act (42 

13 U.S.C. 1320a–7(c)(3)(B)) is amended by striking ‘‘indi14 viduals entitled to benefits under part A of title XVIII 

15 or enrolled under part B of such title, or both’’ and insert16 ing ‘‘beneficiaries (as defined in section 1128A(i)(5)) of 

17 that program’’. 

18 SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL 

19 DIALYSIS FACILITIES. 

20 Section 1881(b) of the Social Security Act (42 U.S.C. 

21 1395rr(b)) is amended by adding at the end the following 

22 new paragraph: 

23 ‘‘(15) For purposes of evaluating or auditing pay24 ments made to renal dialysis facilities for items and serv25 ices under this section under paragraph (1), each such 


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1 renal dialysis facility, upon the request of the Secretary, 

2 shall provide to the Secretary access to information relat3 ing to any ownership or compensation arrangement be4 tween such facility and the medical director of such facility 

5 or between such facility and any physician.’’. 

6 SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

7 ALTERNATE PAYEES REQUIRED TO REG8 ISTER UNDER MEDICARE. 

9 (a) MEDICARE.—Section 1866(j)(1) of the Social Se10 curity Act (42 U.S.C. 1395cc(j)(1)) is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(D) BILLING AGENTS AND CLEARING13 HOUSES REQUIRED TO BE REGISTER UNDER

14 MEDICARE.—Any agent, clearinghouse, or other 

15 alternate payee that submits claims on behalf of 

16 a health care provider must be registered with 

17 the Secretary in a form and manner specified 

18 by the Secretary.’’. 

19 (b) MEDICAID.—For a similar provision with respect 

20 to the Medicaid program under title XIX of the Social Se21 curity Act, see section 1759. 

22 (c) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall apply to claims submitted on or after 

24 January 1, 2012. 


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1 SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO 

2 FALSE CLAIMS ACT AMENDMENTS. 

3 Section 1128A of the Social Security Act, as amended 

4 by sections 1611, 1612, 1613, and 1615, is further 

5 amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (1), by striking ‘‘to an 

8 officer, employee, or agent of the United States, 

9 or of any department or agency thereof, or of 

10 any State agency (as defined in subsection 

11 (i)(1))’’; 

12 (B) in paragraph (4)— 

13 (i) by striking ‘‘participating in a pro14 gram under title XVIII or a State health 

15 care program’’ and inserting ‘‘participating 

16 in a Federal health care program (as de17 fined in section 1128B(f))’’; and 

18 (ii) in subparagraph (A), by striking 

19 ‘‘title XVIII or a State health care pro20 gram’’ and inserting ‘‘a Federal health 

21 care program (as defined in section 

22 1128B(f))’’; 

23 (C) by striking ‘‘or’’ at the end of para24 graph (10); 

25 (D) by inserting after paragraph (11) the 

26 following new paragraphs: 


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1 ‘‘(12) conspires to commit a violation of this 

2 section; or 

3 ‘‘(13) knowingly makes, uses, or causes to be 

4 made or used, a false record or statement material 

5 to an obligation to pay or transmit money or prop6 erty to a Federal health care program, or knowingly 

7 conceals or knowingly and improperly avoids or de8 creases an obligation to pay or transmit money or 

9 property to a Federal health care program;’’; and 

10 (E) in the matter following paragraph 

11 (13), as inserted by subparagraph (D), by strik12 ing ‘‘or in cases under paragraph (11), $50,000 

13 for each such violation’’ and inserting ‘‘in cases 

14 under paragraph (11), $50,000 for each such 

15 violation, in cases under paragraph (12), 

16 $50,000 for any violation described in this sec17 tion committed in furtherance of the conspiracy 

18 involved; or in cases under paragraph (13), 

19 $50,000 for each false record or statement, or 

20 concealment, avoidance, or decrease’’; and 

21 (F) in the second sentence, by striking 

22 ‘‘such false statement or misrepresentation)’’ 

23 and inserting ‘‘such false statement or mis24 representation, in cases under paragraph (12), 

25 an assessment of not more than 3 times the 


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1 total amount that would otherwise apply for 

2 any violation described in this section com3 mitted in furtherance of the conspiracy in4 volved, or in cases under paragraph (13), an as5 sessment of not more than 3 times the total 

6 amount of the obligation to which the false 

7 record or statment was material or that was 

8 avoided or decreased)’’. 

9 (2) in subsection (c)(1), by striking ‘‘six years’’ 

10 and inserting ‘‘10 years’’; and 

11 (3) in subsection (i)— 

12 (A) by amending paragraph (2) to read as 

13 follows: 

14 ‘‘(2) The term ‘‘claim’’ means any application, 

15 request, or demand, whether under contract, or oth16 erwise, for money or property for items and services 

17 under a Federal health care program (as defined in 

18 section 1128B(f)), whether or not the United States 

19 or a State agency has title to the money or property, 

20 that— 

21 ‘‘(A) is presented or caused to be pre22 sented to an officer, employee, or agent of the 

23 United States, or of any department or agency 

24 thereof, or of any State agency (as defined in 

25 subsection (i)(1)); or 


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1 ‘‘(B) is made to a contractor, grantee, or 

2 other recipient if the money or property is to be 

3 spent or used on the Federal health care pro4 gram’s behalf or to advance a Federal health 

5 care program interest, and if the Federal health 

6 care program— 

7 ‘‘(i) provides or has provided any por8 tion of the money or property requested or 

9 demanded; or 

10 ‘‘(ii) will reimburse such contractor, 

11 grantee, or other recipient for any portion 

12 of the money or property which is re13 quested or demanded.’’; 

14 (B) by amending paragraph (3) to read as 

15 follows: 

16 ‘‘(3) The term ‘item or service’ means, without 

17 limitation, any medical, social, management, admin18 istrative, or other item or service used in connection 

19 with or directly or indirectly related to a Federal 

20 health care program.’’; 

21 (C) in paragraph (6)— 

22 (i) in subparagraph (C), by striking at 

23 the end ‘‘or’’; 


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1 (ii) in the first subparagraph (D), by 

2 striking at the end the period and inserting 

3 ‘‘; or’’; and 

4 (iii) by redesignating the second sub5 paragraph (D) as a subparagraph (E); 

6 (D) by amending paragraph (7) to read as 

7 follows: 

8 ‘‘(7) The terms ‘knowing’, ‘knowingly’, and 

9 ‘should know’ mean that a person, with respect to 

10 information— 

11 ‘‘(A) has actual knowledge of the informa12 tion; 

13 ‘‘(B) acts in deliberate ignorance of the 

14 truth or falsity of the information; or 

15 ‘‘(C) acts in reckless disregard of the truth 

16 or falsity of the information; 

17 and require no proof of specific intent to defraud.’’; 

18 and 

19 (E) by adding at the end the following new 

20 paragraphs: 

21 ‘‘(8) The term ‘obligation’ means an established 

22 duty, whether or not fixed, arising from an express 

23 or implied contractual, grantor-grantee, or licensor24 licensee relationship, from a fee-based or similar reVerDate Nov 24 2008 01:27 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00733 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 lationship, from statute or regulation, or from the 

2 retention of any overpayment. 

3 ‘‘(9) The term ‘material’ means having a nat4 ural tendency to influence, or be capable of influ5 encing, the payment or receipt of money or prop6 erty.’’. 

7 Subtitle D—Access to Information 

8 Needed To Prevent Fraud, 

9 Waste, and Abuse 

10 SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN11 TIFY FRAUD, WASTE, AND ABUSE. 

12 Section 1128G of the Social Security Act, as added 

13 by section 1631 and amended by sections 1632 and 1641, 

14 is further amended by adding at the end the following new 

15 subsection; 

16 ‘‘(d) ACCESS TO INFORMATION NECESSARY TO

17 IDENTIFY FRAUD, WASTE, AND ABUSE.—For purposes of 

18 law enforcement activity, and to the extent consistent with 

19 applicable disclosure, privacy, and security laws, including 

20 the Health Insurance Portability and Accountability Act 

21 of 1996 and the Privacy Act of 1974, and subject to any 

22 information systems security requirements enacted by law 

23 or otherwise required by the Secretary, the Attorney Gen24 eral shall have access, facilitation by the Inspector General 

25 of the Department of Health and Human Services, to 


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1 claims and payment data relating to titles XVIII and XIX, 

2 in consultation with the Centers for Medicare & Medicaid 

3 Services or the owner of such data.’’. 

4 SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE 

5 HEALTHCARE INTEGRITY AND PROTECTION 

6 DATA BANK AND THE NATIONAL PRACTI7 TIONER DATA BANK. 

8 (a) IN GENERAL.—To eliminate duplication between 

9 the Healthcare Integrity and Protection Data Bank 

10 (HIPDB) established under section 1128E of the Social 

11 Security Act and the National Practitioner Data Bank 

12 (NPBD) established under the Health Care Quality Im13 provement Act of 1986, section 1128E of the Social Secu14 rity Act (42 U.S.C. 1320a–7e) is amended— 

15 (1) in subsection (a), by striking ‘‘Not later 

16 than’’ and inserting ‘‘Subject to subsection (h), not 

17 later than’’; 

18 (2) in the first sentence of subsection (d)(2), by 

19 striking ‘‘(other than with respect to requests by 

20 Federal agencies)’’; and 

21 (3) by adding at the end the following new sub22 section: 

23 ‘‘(h) SUNSET OF THE HEALTHCARE INTEGRITY AND

24 PROTECTION DATA BANK; TRANSITION PROCESS.—Ef25 fective upon the enactment of this subsection, the SecVerDate Nov 24 2008 03:06 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00735 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 retary shall implement a process to eliminate duplication 

2 between the Healthcare Integrity and Protection Data 

3 Bank (in this subsection referred to as the ‘HIPDB’ es4 tablished pursuant to subsection (a) and the National 

5 Practitioner Data Bank (in this subsection referred to as 

6 the ‘NPDB’) as implemented under the Health Care Qual7 ity Improvement Act of 1986 and section 1921 of this Act, 

8 including systems testing necessary to ensure that infor9 mation formerly collected in the HIPDB will be accessible 

10 through the NPDB, and other activities necessary to 

11 eliminate duplication between the two data banks. Upon 

12 the completion of such process, notwithstanding any other 

13 provision of law, the Secretary shall cease the operation 

14 of the HIPDB and shall collect information required to 

15 be reported under the preceding provisions of this section 

16 in the NPDB. Except as otherwise provided in this sub17 section, the provisions of subsections (a) through (g) shall 

18 continue to apply with respect to the reporting of (or fail19 ure to report), access to, and other treatment of the infor20 mation specified in this section.’’. 

21 (b) ELIMINATION OF THE RESPONSIBILITY OF THE

22 HHS OFFICE OF THE INSPECTOR GENERAL.—Section 

23 1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a– 

24 7c(a)(1)) is amended— 


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1 (1) in subparagraph (C), by adding at the end 

2 ‘‘and’’; 

3 (2) in subparagraph (D), by striking at the end 

4 ‘‘, and’’ and inserting a period; and 

5 (3) by striking subparagraph (E). 

6 (c) SPECIAL PROVISION FOR ACCESS TO THE NA7 TIONAL PRACTITIONER DATA BANK BY THE DEPART8 MENT OF VETERANS AFFAIRS.— 

9 (1) IN GENERAL.—Notwithstanding any other 

10 provision of law, during the one year period that be11 gins on the effective date specified in subsection 

12 (e)(1), the information described in paragraph (2) 

13 shall be available from the National Practitioner 

14 Data Bank (described in section 1921 of the Social 

15 Security Act) to the Secretary of Veterans Affairs 

16 without charge. 

17 (2) INFORMATION DESCRIBED.—For purposes 

18 of paragraph (1), the information described in this 

19 paragraph is the information that would, but for the 

20 amendments made by this section, have been avail21 able to the Secretary of Veterans Affairs from the 

22 Healthcare Integrity and Protection Data Bank. 

23 (d) FUNDING.—Notwithstanding any provisions of 

24 this Act, sections 1128E(d)(2) and 1817(k)(3) of the So25 cial Security Act, or any other provision of law, there shall 


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1 be available for carrying out the transition process under 

2 section 1128E(h) of the Social Security Act over the pe3 riod required to complete such process, and for operation 

4 of the National Practitioner Data Bank until such process 

5 is completed, without fiscal year limitation— 

6 (1) any fees collected pursuant to section 

7 1128E(d)(2) of such Act; and 

8 (2) such additional amounts as necessary, from 

9 appropriations available to the Secretary and to the 

10 Office of the Inspector General of the Department of 

11 Health and Human Services under clauses (i) and 

12 (ii), respectively, of section 1817(k)(3)(A) of such 

13 Act, for costs of such activities during the first 12 

14 months following the date of the enactment of this 

15 Act. 

16 (e) EFFECTIVE DATE.—The amendments made— 

17 (1) by subsection (a)(2) shall take effect on the 

18 first day after the Secretary of Health and Human 

19 Services certifies that the process implemented pur20 suant to section 1128E(h) of the Social Security Act 

21 (as added by subsection (a)(3)) is complete; and 

22 (2) by subsection (b) shall take effect on the 

23 earlier of the date specified in paragraph (1) or the 

24 first day of the second succeeding fiscal year after 

25 the fiscal year during which this Act is enacted. 


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1 SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU2 RITY STANDARDS. 

3 The provisions of sections 262(a) and 264 of the 

4 Health Insurance Portability and Accountability Act of 

5 1996 (and standards promulgated pursuant to such sec6 tions) and the Privacy Act of 1974 shall apply with respect 

7 to the provisions of this subtitle and amendments made 

8 by this subtitle. 

9 TITLE VII—MEDICAID AND CHIP 

10 Subtitle A—Medicaid and Health 

11 Reform 

12 SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 

BELOW 1331 13 ⁄3 PERCENT OF THE FEDERAL 

14 POVERTY LEVEL. 

15 (a) ELIGIBILITY FOR NON-TRADITIONAL INDIVID16 UALS WITH INCOME BELOW 133 PERCENT OF THE FED17 ERAL POVERTY LEVEL.— 

18 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

19 the Social Security Act (42 U.S.C. 

20 1396b(a)(10)(A)(i) is amended— 

21 (A) by striking ‘‘or’’ at the end of sub22 clause (VI); 

23 (B) by adding ‘‘or’’ at the end of subclause 

24 (VII); and 

25 (C) by adding at the end the following new 

26 subclause: 


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1 ‘‘(VIII) who are under 65 years 

2 of age, who are not described in a pre3 vious subclause of this clause, and 

4 who are in families whose income (de5 termined using methodologies and 

6 procedures specified by the Secretary 

7 in consultation with the Health 

8 Choices Commissioner) does not exceed 1331 9 ⁄3 percent of the income offi10 cial poverty line (as defined by the Of11 fice of Management and Budget, and 

12 revised annually in accordance with 

13 section 673(2) of the Omnibus Budget 

14 Reconciliation Act of 1981) applicable 

15 to a family of the size involved;’’. 

16 (2) 100% FMAP FOR NON-TRADITIONAL MED17 ICAID ELIGIBLE INDIVIDUALS.—Section 1905 of 

18 such Act (42 U.S.C. 1396d) is amended— 

19 (A) in the third sentence of subsection (b) 

20 by inserting before the period at the end the 

21 following: ‘‘and with respect to amounts de22 scribed in subsection (y)’’; and 

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

24 subsection: 


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1 ‘‘(y) ADDITIONAL EXPENDITURES SUBJECT TO

2 100% FMAP.—For purposes of section 1905(b), the 

3 amounts described in this subsection are the following: 

4 ‘‘(1) Amounts expended for medical assistance 

5 for individuals described in subclause (VIII) of sec6 tion 1902(a)(10)(A)(i).’’. 

7 (3) CONSTRUCTION.—Nothing in this sub8 section shall be construed as not providing for cov9 erage under subclause (VIII) of section 

10 1902(a)(10)(A)(i) of the Social Security Act, as 

11 added by paragraph (1) of, and an increased FMAP 

12 under the amendment made by paragraph (2) for, 

13 an individual who has been provided medical assist14 ance under title XIX of the Act under a demonstra15 tion waiver approved under section 1115 of such Act 

16 or with State funds. 

17 (4) CONFORMING AMENDMENT.—Section 

18 1903(f)(4) of the Social Security Act (42 U.S.C. 

19 1396b(f)(4)) is amended by inserting 

20 ‘‘1902(a)(10)(A)(i)(VIII),’’ after 

21 ‘‘1902(a)(10)(A)(i)(VII),’’. 

22 (b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI23 GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING

1331 24 ⁄3 PERCENT OF THE FEDERAL POVERTY LEVEL.— 


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1 (1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 

2 the Social Security Act (42 U.S.C. 

3 1396b(a)(10)(A)(i)), as amended by subsection (a), 

4 is amended— 

5 (A) by striking ‘‘or’’ at the end of sub6 clause (VII); 

7 (B) by adding ‘‘or’’ at the end of subclause 

8 (VIII); and 

9 (C) by adding at the end the following new 

10 subclause: 

11 ‘‘(IX) who are under 65 years of 

12 age, who would be eligible for medical 

13 assistance under the State plan under 

14 one of subclauses (I) through (VII) 

15 (based on the income standards, 

16 methodologies, and procedures in ef17 fect as of June 16, 2009) but for in18 come and who are in families whose 

income does not exceed 1331 19 ⁄3 percent 

20 of the income official poverty line (as 

21 defined by the Office of Management 

22 and Budget, and revised annually in 

23 accordance with section 673(2) of the 

24 Omnibus Budget Reconciliation Act of 


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1 1981) applicable to a family of the 

2 size involved;’’. 

3 (2) 100% FMAP FOR CERTAIN TRADITIONAL

4 MEDICAID ELIGIBLE INDIVIDUALS.—Section 1905(y) 

5 of such Act (42 U.S.C. 1396d(b)), as added by sub6 section (a)(2)(B), is amended by inserting ‘‘or (IX)’’ 

7 after ‘‘(VIII)’’. 

8 (3) CONSTRUCTION.—Nothing in this sub9 section shall be construed as not providing for cov10 erage under subclause (IX) of section 

11 1902(a)(10)(A)(i) of the Social Security Act, as 

12 added by paragraph (1) of, and an increased FMAP 

13 under the amendment made by paragraph (2) for, 

14 an individual who has been provided medical assist15 ance under title XIX of the Act under a demonstra16 tion waiver approved under section 1115 of such Act 

17 or with State funds. 

18 (4) CONFORMING AMENDMENT.—Section 

19 1903(f)(4) of the Social Security Act (42 U.S.C. 

20 1396b(f)(4)), as amended by subsection (a)(4), is 

21 amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after 

22 ‘‘1902(a)(10)(A)(i)(VIII),’’. 

23 (c) 100% MATCHING RATE FOR TEMPORARY COV24 ERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 

25 such Act, as added by subsection (a)(2)(B), is amended— 


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1 (1) in paragraph (1), by inserting before the pe2 riod at the end the following: ‘‘, and who is not pro3 vided medical assistance under section 1943(b)(2) of 

4 this title or section 205(d)(1)(B) of the America’s 

5 Affordable Health Choices Act of 2009’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(2) Amounts expended for medical assistance 

8 for children described in section 203(d)(1)(A) of the 

9 America’s Affordable Health Choices Act of 2009 

10 during the time period specified in such section.’’. 

11 (d) NETWORK ADEQUACY.—Section 1932(a)(2) of 

12 the Social Security Act (42 U.S.C. 1396u–2(a)(2)) is 

13 amended by adding at the end the following new subpara14 graph: 

15 ‘‘(D) ENROLLMENT OF NON-TRADITIONAL

16 MEDICAID ELIGIBLES.—A State may not re17 quire under paragraph (1) the enrollment in a 

18 managed care entity of an individual described 

19 in section 1902(a)(10)(A)(i)(VIII) unless the 

20 State demonstrates, to the satisfaction of the 

21 Secretary, that the entity, through its provider 

22 network and other arrangements, has the ca23 pacity to meet the health, mental health, and 

24 substance abuse needs of such individuals.’’. 


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

2 this section shall take effect on the first day of Y1, and 

3 shall apply with respect to items and services furnished 

4 on or after such date. 

5 SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER6 TAIN MEDICAID ELIGIBLE INDIVIDUALS. 

7 (a) IN GENERAL.—Title XIX of the Social Security 

8 Act is amended by adding at the end the following new 

9 section: 

10 ‘‘REQUIREMENTS AND SPECIAL RULES FOR CERTAIN

11 MEDICAID ELIGIBLE INDIVIDUALS

12 ‘‘SEC. 1943. (a) COORDINATION WITH NHI EX13 CHANGE THROUGH MEMORANDUM OF UNDER14 STANDING.— 

15 ‘‘(1) IN GENERAL.—The State shall enter into 

16 a Medicaid memorandum of understanding described 

17 in section 204(e)(4) of the America’s Affordable 

18 Health Choices Act of 2009 with the Health Choices 

19 Commissioner, acting in consultation with the Sec20 retary, with respect to coordinating the implementa21 tion of the provisions of division A of such Act with 

22 the State plan under this title in order to ensure the 

23 enrollment of Medicaid eligible individuals in accept24 able coverage. Nothing in this section shall be con25 strued as permitting such memorandum to modify or 


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1 vitiate any requirement of a State plan under this 

2 title. 

3 ‘‘(2) ENROLLMENT OF EXCHANGE-REFERRED

4 INDIVIDUALS.— 

5 ‘‘(A) NON-TRADITIONAL INDIVIDUALS.— 

6 Pursuant to such memorandum the State shall 

7 accept without further determination the enroll8 ment under this title of an individual deter9 mined by the Commissioner to be a non-tradi10 tional Medicaid eligible individual. The State 

11 shall not do any redeterminations of eligibility 

12 for such individuals unless the periodicity of 

13 such redeterminations is consistent with the pe14 riodicity for redeterminations by the Commis15 sioner of eligibility for affordability credits 

16 under subtitle C of title II of division A of the 

17 America’s Affordable Health Choices Act of 

18 2009, as specified under such memorandum. 

19 ‘‘(B) TRADITIONAL INDIVIDUALS.— 

20 ‘‘(i) REGULAR ENROLLMENT OP21 TION.—Pursuant to such memorandum, 

22 insofar as the memorandum has selected 

23 the option described in section 

24 205(e)(3)(A) of the America’s Affordable 

25 Health Choices Act of 2009, the State 


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1 shall accept without further determination 

2 the enrollment under this title of an indi3 vidual determined by the Commissioner to 

4 be a traditional Medicaid eligible indi5 vidual. The State may do redeterminations 

6 of eligibility of such individual consistent 

7 with such section and the memorandum. 

8 ‘‘(ii) PRESUMPTIVE ELIGIBILITY OP9 TION.—Pursuant to such memorandum, 

10 insofar as the memorandum has selected 

11 the option described in section 

12 205(e)(3)(B) of the America’s Affordable 

13 Health Choices Act of 2009, the State 

14 shall provide for making medical assistance 

15 available during the presumptive eligibility 

16 period and shall, upon application of the 

17 individual for medical assistance under this 

18 title, promptly make a determination (and 

19 subsequent redeterminations) of eligibility 

20 in the same manner as if the individual 

21 had applied directly to the State for such 

22 assistance except that the State shall use 

23 the income-related information used by the 

24 Commissioner and provided to the State 

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1 sumptive eligibility determination to the 

2 maximum extent feasible. 

3 ‘‘(3) DETERMINATIONS OF ELIGIBILITY FOR

4 AFFORDABILITY CREDITS.—If the Commissioner de5 termines that a State Medicaid agency has the ca6 pacity to make determinations of eligibility for af7 fordability credits under subtitle C of title II of divi8 sion A of the America’s Affordable Health Choices 

9 Act of 2009, under such memorandum— 

10 ‘‘(A) the State Medicaid agency shall con11 duct such determinations for any Exchange-eli12 gible individual who requests such a determina13 tion; 

14 ‘‘(B) in the case that a State Medicaid 

15 agency determines that an Exchange-eligible in16 dividual is not eligible for affordability credits, 

17 the agency shall forward the information on the 

18 basis of which such determination was made to 

19 the Commissioner; and 

20 ‘‘(C) the Commissioner shall reimburse the 

21 State Medicaid agency for the costs of con22 ducting such determinations. 

23 ‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 

24 ‘‘(1) IN GENERAL.—In the case of a child who 

25 is deemed under section 205(d)(1) of the America’s 


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1 Affordable Health Choices Act of 2009 to be a non2 traditional Medicaid eligible individual and enrolled 

3 under this title pursuant to such section, the State 

4 shall provide for a determination, by not later than 

5 the end of the period referred to in subparagraph 

6 (A) of such section, of the child’s eligibility for med7 ical assistance under this title. 

8 ‘‘(2) EXTENDED TREATMENT AS TRADITIONAL

9 MEDICAID ELIGIBLE INDIVIDUAL.—In accordance 

10 with subparagraph (B) of section 205(d)(1) of the 

11 America’s Affordable Health Choices Act of 2009, in 

12 the case of a child described in subparagraph (A) of 

13 such section who at the end of the period referred 

14 to in such subparagraph is not otherwise covered 

15 under acceptable coverage, the child shall be deemed 

16 (until such time as the child obtains such coverage 

17 or the State otherwise makes a determination of the 

18 child’s eligibility for medical assistance under its 

19 plan under this title pursuant to paragraph (1)) to 

20 be a traditional Medicaid eligible individual de21 scribed in section 1902(l)(1)(B). 

22 ‘‘(c) DEFINITIONS .—In this section: 

23 ‘‘(1) MEDICAID ELIGIBLE INDIVIDUALS.—In 

24 this section, the terms ‘Medicaid eligible individual’, 

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1 traditional Medicaid eligible individual’ have the 

2 meanings given such terms in section 205(e)(5) of 

3 the America’s Affordable Health Choices Act of 

4 2009. 

5 ‘‘(2) MEMORANDUM.—The term ‘memorandum’ 

6 means a Medicaid memorandum of understanding 

7 under section 205(e)(4) of the America’s Affordable 

8 Health Choices Act of 2009. 

9 ‘‘(3) Y1.—The term ‘Y1’ has the meaning given 

10 such term in section 100(c) of the America’s Afford11 able Health Choices Act of 2009.’’. 

12 (b) CONFORMING AMENDMENTS TO ERROR RATE.— 

13 (1) Section 1903(u)(1)(D) of the Social Secu14 rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended by 

15 adding at the end the following new clause: 

16 ‘‘(vi) In determining the amount of erroneous excess 

17 payments, there shall not be included any erroneous pay18 ments made that are attributable to an error in an eligi19 bility determination under subtitle C of title II of division 

20 A of the America’s Affordable Health Choices Act of 

21 2009.’’. 

22 (2) Section 2105(c)(11) of such Act (42 U.S.C. 

23 1397ee(c)(11)) is amended by adding at the end the 

24 following new sentence: ‘‘Clause (vi) of section 

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1 cation of such requirements under this title and title 

2 XIX.’’. 

3 SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT. 

4 (a) CHIP MAINTENANCE OF EFFORT.—Section 

5 1902 of the Social Security Act (42 U.S.C. 1396a) is 

6 amended— 

7 (1) in subsection (a), as amended by section 

8 1631(b)(1)(D)— 

9 (A) by striking ‘‘and’’ at the end of para10 graph (72); 

11 (B) by striking the period at the end of 

12 paragraph (73) and inserting ‘‘; and’’; and 

13 (C) by inserting after paragraph (74) the 

14 following new paragraph: 

15 ‘‘(75) provide for maintenance of effort under 

16 the State child health plan under title XXI in ac17 cordance with subsection (gg).’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(gg) CHIP MAINTENANCE OF EFFORT REQUIRE21 MENT.— 

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

23 as a condition of its State plan under this title under 

24 subsection (a)(75) and receipt of any Federal finan25 cial assistance under section 1903(a) for calendar 


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1 quarters beginning after the date of the enactment 

2 of this subsection and before CHIP MOE termi3 nation date specified in paragraph (3), a State shall 

4 not have in effect eligibility standards, methodolo5 gies, or procedures under its State child health plan 

6 under title XXI (including any waiver under such 

7 title or under section 1115 that is permitted to con8 tinue effect) that are more restrictive than the eligi9 bility standards, methodologies, or procedures, re10 spectively, under such plan (or waiver) as in effect 

11 on June 16, 2009. 

12 ‘‘(2) LIMITATION.—Paragraph (1) shall not be 

13 construed as preventing a State from imposing a 

14 limitation described in section 2110(b)(5)(C)(i)(II) 

15 for a fiscal year in order to limit expenditures under 

16 its State child health plan under title XXI to those 

17 for which Federal financial participation is available 

18 under section 2105 for the fiscal year. 

19 ‘‘(3) CHIP MOE TERMINATION DATE.—In para20 graph (1), the ‘CHIP MOE termination date’ for a 

21 State is the date that is the first day of Y1 (as de22 fined in section 100(c) of the America’s Affordable 

23 Health Choices Act of 2009) or, if later, the first 

24 day after such date that both of the following deter25 minations have been made: 


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1 ‘‘(A) The Health Choices Commissioner 

2 has determined that the Health Insurance Ex3 change has the capacity to support the partici4 pation of CHIP enrollees who are Exchange-eli5 gible individuals (as defined in section 202(b) of 

6 the America’s Affordable Health Choices Act of 

7 2009), 

8 ‘‘(B) The Secretary has determined that 

9 such Exchange, the State, and employers have 

10 procedures in effect to ensure the timely transi11 tion without interruption of coverage of CHIP 

12 enrollees from assistance under title XXI to ac13 ceptable coverage (as defined for purposes of 

14 such Act). 

15 In this paragraph, the term ‘CHIP enrollee’ means 

16 a targeted low-income child or (if the State has 

17 elected the option under section 2112, a targeted 

18 low-income pregnant woman) who is or otherwise 

19 would be (but for acceptable coverage) eligible for 

20 child health assistance or pregnancy-related assist21 ance, respectively, under the State child health plan 

22 referred to in paragraph (1).’’. 

23 (b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI24 FYING AND COORDINATING ELIGIBILITY RULES BE25 TWEEN EXCHANGE AND MEDICAID.— 


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1 (1) IN GENERAL.—Section 1903 of such Act 

2 (42 U.S.C. 1396b) is amended by adding at the end 

3 the following new subsection: 

4 ‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI5 FYING AND COORDINATING ELIGIBILITY RULES BE6 TWEEN HEALTH INSURANCE EXCHANGE AND MED7 ICAID.— 

8 ‘‘(1) MAINTENANCE OF EFFORT.—A State is 

9 not eligible for payment under subsection (a) for a 

10 calendar quarter beginning after the date of the en11 actment of this subsection if eligibility standards, 

12 methodologies, or procedures under its plan under 

13 this title (including any waiver under this title or 

14 under section 1115 that is permitted to continue ef15 fect) that are more restrictive than the eligibility 

16 standards, methodologies, or procedures, respec17 tively, under such plan (or waiver) as in effect on 

18 June 16, 2009. The Secretary shall extend such a 

19 waiver (including the availability of Federal financial 

20 participation under such waiver) for such period as 

21 may be required for a State to meet the requirement 

22 of the previous sentence. 

23 ‘‘(2) REMOVAL OF ASSET TEST FOR CERTAIN

24 ELIGIBILITY CATEGORIES.— 


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1 ‘‘(A) IN GENERAL.—A State is not eligible 

2 for payment under subsection (a) for a calendar 

3 quarter beginning on or after the first day of 

4 Y1 (as defined in section 100(c) of the Amer5 ica’s Affordable Health Choices Act of 2009), if 

6 the State applies any asset or resource test in 

7 determining (or redetermining) eligibility of any 

8 individual on or after such first day under any 

9 of the following: 

10 ‘‘(i) Subclause (I), (III), (IV), or (VI) 

11 of section 1902(a)(10)(A)(i). 

12 ‘‘(ii) Subclause (II), (IX), (XIV) or 

13 (XVII) of section 1902(a)(10)(A)(ii). 

14 ‘‘(iii) Section 1931(b). 

15 ‘‘(B) OVERRIDING CONTRARY PROVISIONS; 

16 REFERENCES.—The provisions of this title that 

17 prevent the waiver of an asset or resource test 

18 described in subparagraph (A) are hereby 

19 waived. 

20 ‘‘(C) REFERENCES.—Any reference to a 

21 provision described in a provision in subpara22 graph (A) shall be deemed to be a reference to 

23 such provision as modified through the applica24 tion of subparagraphs (A) and (B).’’. 


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1 (2) CONFORMING AMENDMENTS.—(A) Section 

2 1902(a)(10)(A) of such Act (42 U.S.C. 

3 1396a(a)(10)(A)) is amended, in the matter before 

4 clause (i), by inserting ‘‘subject to section 

5 1903(aa)(2),’’ after ‘‘(A)’’. 

6 (B) Section 1931(b)(2) of such Act (42 U.S.C. 

7 1396u–1(b)(1)) is amended by inserting ‘‘subject to 

8 section 1903(aa)(2)’’ after ‘‘and (3)’’. 

9 (c) STANDARDS FOR BENCHMARK PACKAGES.—Sec10 tion 1937(b) of such Act (42 U.S.C. 1396u–7(b)) is 

11 amended— 

12 (1) in paragraph (1), by inserting ‘‘subject to 

13 paragraph (5)’’; and 

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

15 paragraph: 

16 ‘‘(5) MINIMUM STANDARDS.—Effective January 

17 1, 2013, any benchmark benefit package (or bench18 mark equivalent coverage under paragraph (2)) 

19 must meet the minimum benefits and cost-sharing 

20 standards of a basic plan offered through the Health 

21 Insurance Exchange.’’. 

22 SEC. 1704. REDUCTION IN MEDICAID DSH. 

23 (a) REPORT.— 

24 (1) IN GENERAL.—Not later than January 1, 

25 2016, the Secretary of Health and Human Services 


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1 (in this title referred to as the ‘‘Secretary’’) shall 

2 submit to Congress a report concerning the extent to 

3 which, based upon the impact of the health care re4 forms carried out under division A in reducing the 

5 number of uninsured individuals, there is a contin6 ued role for Medicaid DSH. In preparing the report, 

7 the Secretary shall consult with community-based 

8 health care networks serving low-income bene9 ficiaries. 

10 (2) MATTERS TO BE INCLUDED.—The report 

11 shall include the following: 

12 (A) RECOMMENDATIONS.—Recommenda13 tions regarding— 

14 (i) the appropriate targeting of Med15 icaid DSH within States; and 

16 (ii) the distribution of Medicaid DSH 

17 among the States. 

18 (B) SPECIFICATION OF DSH HEALTH RE19 FORM METHODOLOGY.—The DSH Health Re20 form methodology described in paragraph (2) of 

21 subsection (b) for purposes of implementing the 

22 requirements of such subsection. 

23 (3) COORDINATION WITH MEDICARE DSH RE24 PORT.—The Secretary shall coordinate the report 


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1 under this subsection with the report on Medicare 

2 DSH under section 1112. 

3 (4) MEDICAID DSH.—In this section, the term 

4 ‘‘Medicaid DSH’’ means adjustments in payments 

5 under section 1923 of the Social Security Act for in6 patient hospital services furnished by dispropor7 tionate share hospitals. 

8 (b) MEDICAID DSH REDUCTIONS.— 

9 (1) IN GENERAL.—The Secretary shall reduce 

10 Medicaid DSH so as to reduce total Federal pay11 ments to all States for such purpose by 

12 $1,500,000,000 in fiscal year 2017, $2,500,000,000 

13 in fiscal year 2018, and $6,000,000,000 in fiscal 

14 year 2019. 

15 (2) DSH HEALTH REFORM METHODOLOGY.— 

16 The Secretary shall carry out paragraph (1) through 

17 use of a DSH Health Reform methodology issued by 

18 the Secretary that imposes the largest percentage re19 ductions on the States that— 

20 (A) have the lowest percentages of unin21 sured individuals (determined on the basis of 

22 audited hospital cost reports) during the most 

23 recent year for which such data are available; 

24 or 


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1 (B) do not target their DSH payments 

2 on— 

3 (i) hospitals with high volumes of 

4 Medicaid inpatients (as defined in section 

5 1923(b)(1)(A) of the Social Security Act 

6 (42 U.S.C. 1396r–4(b)(1)(A)); and 

7 (ii) hospitals that have high levels of 

8 uncompensated care (excluding bad debt). 

9 (3) DSH ALLOTMENT PUBLICATIONS.— 

10 (A) IN GENERAL.—Not later than the pub11 lication deadline specified in subparagraph (B), 

12 the Secretary shall publish in the Federal Reg13 ister a notice specifying the DSH allotment to 

14 each State under 1923(f) of the Social Security 

15 Act for the respective fiscal year specified in 

16 such subparagraph, consistent with the applica17 tion of the DSH Health Reform methodology 

18 described in paragraph (2). 

19 (B) PUBLICATAION DEADLINE.—The pub20 lication deadline specified in this subparagraph 

21 is— 

22 (i) January 1, 2016, with respect to 

23 DSH allotments described in subparagraph 

24 (A) for fiscal year 2017; 


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1 (ii) January 1, 2017, with respect to 

2 DSH allotments described in subparagraph 

3 (A) for fiscal year 2018; and 

4 (iii) January 1, 2018, with respect to 

5 DSH allotments described in subparagraph 

6 (A) for fiscal year 2019. 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) Section 1923(f) of the Social Security Act 

9 (42 U.S.C. 1396r–4(f)) is amended— 

10 (A) by redesignating paragraph (7) as 

11 paragraph (8); and 

12 (B) by inserting after paragraph (6) the 

13 following new paragraph: 

14 ‘‘(7) SPECIAL RULE FOR FISCAL YEARS 2017, 

15 2018, AND 2019.— 

16 ‘‘(A) FISCAL YEAR 2017.—Notwithstanding 

17 paragraph (2), the total DSH allotments for all 

18 States for— 

19 ‘‘(i) fiscal year 2017, shall be the total 

20 DSH allotments that would otherwise be 

21 determined under this subsection for such 

22 fiscal year decreased by $1,500,000,000; 

23 ‘‘(ii) fiscal year 2018, shall be the 

24 total DSH allotments that would otherwise 

25 be determined under this subsection for 


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1 such fiscal year decreased by 

2 $2,500,000,000; and 

3 ‘‘(iii) fiscal year 2019, shall be the 

4 total DSH allotments that would otherwise 

5 be determined under this subsection for 

6 such fiscal year decreased by 

7 $6,000,000,000.’’. 

8 (2) Section 1923(b)(4) of such Act (42 U.S.C. 

9 1396r–4(b)(4)) is amended by adding before the pe10 riod the following: ‘‘or to affect the authority of the 

11 Secretary to issue and implement the DSH Health 

12 Reform methodology under section 1704(b)(2) of the 

13 America’s Health Choices Act of 2009’’. 

14 (d) DISPROPORTIONATE SHARE HOSPITALS (DSH) 

15 AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS16 CRIMINATION.— 

17 (1) IN GENERAL.—Section 1923(d) of the So18 cial Security Act (42 U.S.C. 1396r-4) is amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(4) No hospital may be defined or deemed as 

21 a disproportionate share hospital, or as an essential 

22 access hospital (for purposes of subsection 

23 (f)(6)(A)(iv), under a State plan under this title or 

24 subsection (b) of this section (including any waiver 

25 under section 1115) unless the hospital— 


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1 ‘‘(A) provides services to beneficiaries 

2 under this title without discrimination on the 

3 ground of race, color, national origin, creed, 

4 source of payment, status as a beneficiary 

5 under this title, or any other ground unrelated 

6 to such beneficiary’s need for the services or the 

7 availability of the needed services in the hos8 pital; and 

9 ‘‘(B) makes arrangements for, and accepts, 

10 reimbursement under this title for services pro11 vided to eligible beneficiaries under this title.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by subsection (a) shall be apply to expenditures 

14 made on or after July 1, 2010. 

15 SEC. 1705. EXPANDED OUTSTATIONING. 

16 (a) IN GENERAL.—Section 1902(a)(55) of the Social 

17 Security Act (42 U.S.C. 1396a(a)(55)) is amended by 

18 striking ‘‘under subsection (a)(10)(A)(i)(IV), 

19 (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

20 (a)(10)(A)(ii)(IX)’’ and inserting ‘‘(including receipt and 

21 processing of applications of individuals for affordability 

22 credits under subtitle C of title II of division A of the 

23 America’s Affordable Health Choices Act of 2009 pursu24 ant to a Medicaid memorandum of understanding under 

25 section 1943(a)(1))’’. 


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1 (b) EFFECTIVE DATE.— 

2 (1) Except as provided in paragraph (2), the 

3 amendment made by subsection (a) shall apply to 

4 services furnished on or after July 1, 2010, without 

5 regard to whether or not final regulations to carry 

6 out such amendment have been promulgated by such 

7 date. 

8 (2) In the case of a State plan for medical as9 sistance under title XIX of the Social Security Act 

10 which the Secretary of Health and Human Services 

11 determines requires State legislation (other than leg12 islation appropriating funds) in order for the plan to 

13 meet the additional requirement imposed by the 

14 amendment made by this section, the State plan 

15 shall not be regarded as failing to comply with the 

16 requirements of such title solely on the basis of its 

17 failure to meet this additional requirement before 

18 the first day of the first calendar quarter beginning 

19 after the close of the first regular session of the 

20 State legislature that begins after the date of the en21 actment of this Act. For purposes of the previous 

22 sentence, in the case of a State that has a 2-year 

23 legislative session, each year of such session shall be 

24 deemed to be a separate regular session of the State 

25 legislature. 


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1 Subtitle B—Prevention 

2 SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERV3 ICES. 

4 (a) COVERAGE.—Section 1905 of the Social Security 

5 Act (42 U.S.C. 1396d), as amended by section 

6 1701(a)(2)(B), is amended— 

7 (1) in subsection (a)(4)— 

8 (A) by striking ‘‘and’’ before ‘‘(C)’’; and 

9 (B) by inserting before the semicolon at 

10 the end the following: ‘‘and (D) preventive serv11 ices described in subsection (z)’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(z) PREVENTIVE SERVICES.—The preventive serv15 ices described in this subsection are services not otherwise 

16 described in subsection (a) or (r) that the Secretary deter17 mines are— 

18 ‘‘(1)(A) recommended with a grade of A or B 

19 by the Task Force for Clinical Preventive Services; 

20 or 

21 ‘‘(B) vaccines recommended for use as appro22 priate by the Director of the Centers for Disease 

23 Control and Prevention; and 

24 ‘‘(2) appropriate for individuals entitled to med25 ical assistance under this title.’’. 


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1 (b) CONFORMING AMENDMENT.—Section 1928 of 

2 such Act (42 U.S.C. 1396s) is amended— 

3 (1) in subsection (c)(2)(B)(i), by striking ‘‘the 

4 advisory committee referred to in subsection (e)’’ 

5 and inserting ‘‘the Director of the Centers for Dis6 ease Control and Prevention’’; 

7 (2) in subsection (e), by striking ‘‘Advisory 

8 Committee’’ and all that follows and inserting ‘‘Di9 rector of the Centers for Disease Control and Pre10 vention.’’; and 

11 (3) by striking subsection (g). 

12 (c) EFFECTIVE DATE.— 

13 (1) Except as provided in paragraph (2), the 

14 amendments made by this section shall apply to 

15 services furnished on or after July 1, 2010, without 

16 regard to whether or not final regulations to carry 

17 out such amendments have been promulgated by 

18 such date. 

19 (2) In the case of a State plan for medical as20 sistance under title XIX of the Social Security Act 

21 which the Secretary of Health and Human Services 

22 determines requires State legislation (other than leg23 islation appropriating funds) in order for the plan to 

24 meet the additional requirements imposed by the 

25 amendments made by this section, the State plan 


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1 shall not be regarded as failing to comply with the 

2 requirements of such title solely on the basis of its 

3 failure to meet these additional requirements before 

4 the first day of the first calendar quarter beginning 

5 after the close of the first regular session of the 

6 State legislature that begins after the date of the en7 actment of this Act. For purposes of the previous 

8 sentence, in the case of a State that has a 2-year 

9 legislative session, each year of such session shall be 

10 deemed to be a separate regular session of the State 

11 legislature. 

12 SEC. 1712. TOBACCO CESSATION. 

13 (a) DROPPING TOBACCO CESSATION EXCLUSION

14 FROM COVERED OUTPATIENT DRUGS.—Section 

15 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r– 

16 8(d)(2)) is amended— 

17 (1) by striking subparagraph (E); 

18 (2) in subparagraph (G), by inserting before the 

19 period at the end the following: ‘‘, except agents ap20 proved by the Food and Drug Administration for 

21 purposes of promoting, and when used to promote, 

22 tobacco cessation’’; and 

23 (3) by redesignating subparagraphs (F) 

24 through (K) as subparagraphs (E) through (J), re25 spectively. 


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

2 this section shall apply to drugs and services furnished 

3 on or after January 1, 2010. 

4 SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITA5 TION SERVICES. 

6 (a) IN GENERAL.—Section 1905 of the Social Secu7 rity Act (42 U.S.C. 1396d), as amended by sections 

8 1701(a)(2) and 1711(a), is amended— 

9 (1) in subsection (a)— 

10 (A) in paragraph (27), by striking ‘‘and’’ 

11 at the end; 

12 (B) by redesignating paragraph (28) as 

13 paragraph (29); and 

14 (C) by inserting after paragraph (27) the 

15 following new paragraph: 

16 ‘‘(28) nurse home visitation services (as defined 

17 in subsection (aa)); and’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(aa) The term ‘nurse home visitation services’ 

21 means home visits by trained nurses to families with a 

22 first-time pregnant woman, or a child (under 2 years of 

23 age), who is eligible for medical assistance under this title, 

24 but only, to the extent determined by the Secretary based 


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1 upon evidence, that such services are effective in one or 

2 more of the following: 

3 ‘‘(1) Improving maternal or child health and 

4 pregnancy outcomes or increasing birth intervals be5 tween pregnancies. 

6 ‘‘(2) Reducing the incidence of child abuse, ne7 glect, and injury, improving family stability (includ8 ing reduction in the incidence of intimate partner vi9 olence), or reducing maternal and child involvement 

10 in the criminal justice system. 

11 ‘‘(3) Increasing economic self-sufficiency, em12 ployment advancement, school-readiness, and edu13 cational achievement, or reducing dependence on 

14 public assistance.’’. 

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

16 this section shall apply to services furnished on or after 

17 January 1, 2010. 

18 (c) CONSTRUCTION.—Nothing in the amendments 

19 made by this section shall be construed as affecting the 

20 ability of a State under title XIX or XXI of the Social 

21 Security Act to provide nurse home visitation services as 

22 part of another class of items and services falling within 

23 the definition of medical assistance or child health assist24 ance under the respective title, or as an administrative ex25 penditure for which payment is made under section 


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1 1903(a) or 2105(a) of such Act, respectively, on or after 

2 the date of the enactment of this Act. 

3 SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLAN4 NING SERVICES. 

5 (a) COVERAGE AS OPTIONAL CATEGORICALLY

6 NEEDY GROUP.— 

7 (1) IN GENERAL.—Section 1902(a)(10)(A)(ii) 

8 of the Social Security Act (42 U.S.C. 

9 1396a(a)(10)(A)(ii)) is amended— 

10 (A) in subclause (XVIII), by striking ‘‘or’’ 

11 at the end; 

12 (B) in subclause (XIX), by adding ‘‘or’’ at 

13 the end; and 

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

15 subclause: 

16 ‘‘(XX) who are described in subsection (hh) (re17 lating to individuals who meet certain income stand18 ards);’’. 

19 (2) GROUP DESCRIBED.—Section 1902 of such 

20 Act (42 U.S.C. 1396a), as amended by section 1703, 

21 is amended by adding at the end the following new 

22 subsection: 

23 ‘‘(hh)(1) Individuals described in this subsection are 

24 individuals— 


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1 ‘‘(A) whose income does not exceed an in2 come eligibility level established by the State 

3 that does not exceed the highest income eligi4 bility level established under the State plan 

5 under this title (or under its State child health 

6 plan under title XXI) for pregnant women; and 

7 ‘‘(B) who are not pregnant. 

8 ‘‘(2) At the option of a State, individuals de9 scribed in this subsection may include individuals 

10 who, had individuals applied on or before January 1, 

11 2007, would have been made eligible pursuant to the 

12 standards and processes imposed by that State for 

13 benefits described in clause (XV) of the matter fol14 lowing subparagraph (G) of section subsection 

15 (a)(10) pursuant to a waiver granted under section 

16 1115. 

17 ‘‘(3) At the option of a State, for purposes of 

18 subsection (a)(17)(B), in determining eligibility for 

19 services under this subsection, the State may con20 sider only the income of the applicant or recipient.’’. 

21 (3) LIMITATION ON BENEFITS.—Section 

22 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) 

23 is amended in the matter following subparagraph 

24 (G)— 


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1 (A) by striking ‘‘and (XIV)’’ and inserting 

2 ‘‘(XIV)’’; and 

3 (B) by inserting ‘‘, and (XV) the medical 

4 assistance made available to an individual de5 scribed in subsection (hh) shall be limited to 

6 family planning services and supplies described 

7 in section 1905(a)(4)(C) including medical di8 agnosis and treatment services that are pro9 vided pursuant to a family planning service in 

10 a family planning setting’’ after ‘‘cervical can11 cer’’. 

12 (4) CONFORMING AMENDMENTS.—Section 

13 1905(a) of such Act (42 U.S.C. 1396d(a)), as 

14 amended by section 1731(c), is amended in the mat15 ter preceding paragraph (1)— 

16 (A) in clause (xiii), by striking ‘‘or’’ at the 

17 end; 

18 (B) in clause (xiv), by adding ‘‘or’’ at the 

19 end; and 

20 (C) by inserting after clause (xiv) the fol21 lowing: 

22 ‘‘(xv) individuals described in section 

23 1902(hh),’’. 

24 (b) PRESUMPTIVE ELIGIBILITY.— 


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1 (1) IN GENERAL.—Title XIX of the Social Se2 curity Act (42 U.S.C. 1396 et seq.) is amended by 

3 inserting after section 1920B the following: 

4 ‘‘PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING

5 SERVICES

6 ‘‘SEC. 1920C. (a) STATE OPTION.—State plan ap7 proved under section 1902 may provide for making med8 ical assistance available to an individual described in sec9 tion 1902(hh) (relating to individuals who meet certain 

10 income eligibility standard) during a presumptive eligi11 bility period. In the case of an individual described in sec12 tion 1902(hh), such medical assistance shall be limited to 

13 family planning services and supplies described in 

14 1905(a)(4)(C) and, at the State’s option, medical diag15 nosis and treatment services that are provided in conjunc16 tion with a family planning service in a family planning 

17 setting. 

18 ‘‘(b) DEFINITIONS.—For purposes of this section: 

19 ‘‘(1) PRESUMPTIVE ELIGIBILITY PERIOD.—The 

20 term ‘presumptive eligibility period’ means, with re21 spect to an individual described in subsection (a), 

22 the period that— 

23 ‘‘(A) begins with the date on which a 

24 qualified entity determines, on the basis of pre25 liminary information, that the individual is de26 scribed in section 1902(hh); and 


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1 ‘‘(B) ends with (and includes) the earlier 

2 of— 

3 ‘‘(i) the day on which a determination 

4 is made with respect to the eligibility of 

5 such individual for services under the State 

6 plan; or 

7 ‘‘(ii) in the case of such an individual 

8 who does not file an application by the last 

9 day of the month following the month dur10 ing which the entity makes the determina11 tion referred to in subparagraph (A), such 

12 last day. 

13 ‘‘(2) QUALIFIED ENTITY.— 

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), the term ‘qualified entity’ means 

16 any entity that— 

17 ‘‘(i) is eligible for payments under a 

18 State plan approved under this title; and 

19 ‘‘(ii) is determined by the State agen20 cy to be capable of making determinations 

21 of the type described in paragraph (1)(A). 

22 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 

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1 tities that may become qualified entities in 

2 order to prevent fraud and abuse. 

3 ‘‘(c) ADMINISTRATION.— 

4 ‘‘(1) IN GENERAL.—The State agency shall pro5 vide qualified entities with— 

6 ‘‘(A) such forms as are necessary for an 

7 application to be made by an individual de8 scribed in subsection (a) for medical assistance 

9 under the State plan; and 

10 ‘‘(B) information on how to assist such in11 dividuals in completing and filing such forms. 

12 ‘‘(2) NOTIFICATION REQUIREMENTS.—A quali13 fied entity that determines under subsection 

14 (b)(1)(A) that an individual described in subsection 

15 (a) is presumptively eligible for medical assistance 

16 under a State plan shall— 

17 ‘‘(A) notify the State agency of the deter18 mination within 5 working days after the date 

19 on which determination is made; and 

20 ‘‘(B) inform such individual at the time 

21 the determination is made that an application 

22 for medical assistance is required to be made by 

23 not later than the last day of the month fol24 lowing the month during which the determina25 tion is made. 


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1 ‘‘(3) APPLICATION FOR MEDICAL ASSIST2 ANCE.—In the case of an individual described in 

3 subsection (a) who is determined by a qualified enti4 ty to be presumptively eligible for medical assistance 

5 under a State plan, the individual shall apply for 

6 medical assistance by not later than the last day of 

7 the month following the month during which the de8 termination is made. 

9 ‘‘(d) PAYMENT.—Notwithstanding any other provi10 sion of law, medical assistance that— 

11 ‘‘(1) is furnished to an individual described in 

12 subsection (a)— 

13 ‘‘(A) during a presumptive eligibility pe14 riod; 

15 ‘‘(B) by a entity that is eligible for pay16 ments under the State plan; and 

17 ‘‘(2) is included in the care and services covered 

18 by the State plan, 

19 shall be treated as medical assistance provided by such 

20 plan for purposes of clause (4) of the first sentence of 

21 section 1905(b).’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 1902(a)(47) of the Social Se24 curity Act (42 U.S.C. 1396a(a)(47)) is amend25 ed by inserting before the semicolon at the end 


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1 the following: ‘‘and provide for making medical 

2 assistance available to individuals described in 

3 subsection (a) of section 1920C during a pre4 sumptive eligibility period in accordance with 

5 such section’’. 

6 (B) Section 1903(u)(1)(D)(v) of such Act 

7 (42 U.S.C. 1396b(u)(1)(D)(v)) is amended— 

8 (i) by striking ‘‘or for’’ and inserting 

9 ‘‘for’’; and 

10 (ii) by inserting before the period the 

11 following: ‘‘, or for medical assistance pro12 vided to an individual described in sub13 section (a) of section 1920C during a pre14 sumptive eligibility period under such sec15 tion’’. 

16 (c) CLARIFICATION OF COVERAGE OF FAMILY PLAN17 NING SERVICES AND SUPPLIES.—Section 1937(b) of the 

18 Social Security Act (42 U.S.C. 1396u–7(b)) is amended 

19 by adding at the end the following: 

20 ‘‘(5) COVERAGE OF FAMILY PLANNING SERV21 ICES AND SUPPLIES.—Notwithstanding the previous 

22 provisions of this section, a State may not provide 

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1 erage includes for any individual described in section 

2 1905(a)(4)(C), medical assistance for family plan3 ning services and supplies in accordance with such 

4 section.’’. 

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

6 this section take effect on the date of the enactment of 

7 this Act and shall apply to items and services furnished 

8 on or after such date. 

9 Subtitle C—Access 

10 SEC. 1721. PAYMENTS TO PRIMARY CARE PRACTITIONERS. 

11 (a) IN GENERAL.— 

12 (1) FEE-FOR-SERVICE PAYMENTS.—Section 

13 1902(a)(13) of the Social Security Act (42 U.S.C. 

14 1396b(a)(13)) is amended— 

15 (A) by striking ‘‘and’’ at the end of sub16 paragraph (A); 

17 (B) by adding ‘‘and’’ at the end of sub18 paragraph (B); and 

19 (C) by adding at the end the following new 

20 subparagraph: 

21 ‘‘(C) payment for primary care services (as 

22 defined in section 1848(j)(5)(A), but applied 

23 without regard to clause (ii) thereof) furnished 

24 by physicians (or for services furnished by other 

25 health care professionals that would be primary 


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1 care services under such section if furnished by 

2 a physician) at a rate not less than 80 percent 

3 of the payment rate applicable to such services 

4 and physicians or professionals (as the case 

5 may be) under part B of title XVIII for services 

6 furnished in 2010, 90 percent of such rate for 

7 services and physicians (or professionals) fur8 nished in 2011, and 100 percent of such pay9 ment rate for services and physicians (or pro10 fessionals) furnished in 2012 or a subsequent 

11 year;’’. 

12 (2) UNDER MEDICAID MANAGED CARE

13 PLANS.—Section 1923(f) of such Act (42 U.S.C. 

14 1396u–2(f)) is amended— 

15 (A) in the heading, by adding at the end 

16 the following: ‘‘; ADEQUACY OF PAYMENT FOR

17 PRIMARY CARE SERVICES’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘and, in the case of primary 

20 care services described in section 

21 1902(a)(13)(C), consistent with the minimum 

22 payment rates specified in such section (regard23 less of the manner in which such payments are 

24 made, including in the form of capitation or 

25 partial capitation)’’. 


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1 (b) INCREASE IN PAYMENT USING 100% FMAP.— 

2 Section 1905(y), as added by section 1701(a)(2)(B) and 

3 as amended by section 1701(c)(2), is amended by adding 

4 at the end the following: 

5 ‘‘(3)(A) The portion of the amounts expended 

6 for medical assistance for services described in sec7 tion 1902(a)(13)(C) furnished on or after January 

8 1, 2010, that is attributable to the amount by which 

9 the minimum payment rate required under such sec10 tion (or, by application, section 1932(f)) exceeds the 

11 payment rate applicable to such services under the 

12 State plan as of June 16, 2009. 

13 ‘‘(B) Subparagraphs (A) shall not be construed 

14 as preventing the payment of Federal financial par15 ticipation based on the Federal medical assistance 

16 percentage for amounts in excess of those specified 

17 under such subparagraphs.’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to services furnished on or after 

20 January 1, 2010. 

21 SEC. 1722. MEDICAL HOME PILOT PROGRAM. 

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

23 Human Services shall establish under this section a med24 ical home pilot program under which a State may apply 

25 to the Secretary for approval of a medical home pilot 


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1 project described in subsection (b) (in this section referred 

2 to as a ‘‘pilot project’’) for the application of the medical 

3 home concept under title XIX of the Social Security Act. 

4 The pilot program shall operate for a period of up to 5 

5 years. 

6 (b) PILOT PROJECT DESCRIBED.— 

7 (1) IN GENERAL.—A pilot project is a project 

8 that applies one or more of the medical home models 

9 described in section 1866E(a)(3) of the Social Secu10 rity Act (as inserted by section 1302(a)) or such 

11 other model as the Secretary may approve, to high 

12 need beneficiaries (including medically fragile chil13 dren and high-risk pregnant women) who are eligible 

14 for medical assistance under title XIX of the Social 

15 Security Act. The Secretary shall provide for appro16 priate coordination of the pilot program under this 

17 section with the medical home pilot program under 

18 section 1866E of such Act. 

19 (2) LIMITATION.—A pilot project shall be for a 

20 duration of not more than 5 years. 

21 (c) ADDITIONAL INCENTIVES.—In the case of a pilot 

22 project, the Secretary may— 

23 (1) waive the requirements of section 

24 1902(a)(1) of the Social Security Act (relating to 


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1 statewideness) and section 1902(a)(10)(B) of such 

2 Act (relating to comparability); and 

3 (2) increase to up to 90 percent (for the first 

4 2 years of the pilot program) or 75 percent (for the 

5 next 3 years) the matching percentage for adminis6 trative expenditures (such as those for community 

7 care workers). 

8 (d) MEDICALLY FRAGILE CHILDREN.—In the case of 

9 a model involving medically fragile children, the model 

10 shall ensure that the patient-centered medical home serv11 ices received by each child, in addition to fulfilling the re12 quirements under 1866E(b)(1) of the Social Security Act, 

13 provide for continuous involvement and education of the 

14 parent or caregiver and for assistance to the child in ob15 taining necessary transitional care if a child’s enrollment 

16 ceases for any reason. 

17 (e) EVALUATION; REPORT.— 

18 (1) EVALUATION.—The Secretary, using the 

19 criteria described in section 1866E(g)(1) of the So20 cial Security Act (as inserted by section 1123), shall 

21 conduct an evaluation of the pilot program under 

22 this section. 

23 (2) REPORT.—Not later than 60 days after the 

24 date of completion of the evaluation under para25 graph (1), the Secretary shall submit to Congress 


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1 and make available to the public a report on the 

2 findings of the evaluation under such paragraph. 

3 (f) FUNDING.—The additional Federal financial par4 ticipation resulting from the implementation of the pilot 

5 program under this section may not exceed in the aggre6 gate $1,235,000,000 over the 5-year period of the pro7 gram. 

8 SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES. 

9 (a) IN GENERAL.—Section 1903(a)(2)(E) of the So10 cial Security Act (42 U.S.C. 1396b(a)(2)), as added by 

11 section 201(b)(2)(A) of the Children’s Health Insurance 

12 Program Reauthorization Act of 2009 (Public Law 111– 

13 3), is amended by inserting ‘‘and other individuals’’ after 

14 ‘‘children of families’’. 

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

16 subsection (a) shall apply to payment for translation or 

17 interpretation services furnished on or after January 1, 

18 2010. 

19 SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING 

20 BIRTH CENTER SERVICES. 

21 (a) IN GENERAL.—Section 1905 of the Social Secu22 rity Act (42 U.S.C. 1396d), as amended by section 

23 1713(a), is amended— 

24 (1) in subsection (a)— 


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1 (A) by redesignating paragraph (29) as 

2 paragraph (30); 

3 (B) in paragraph (28), by striking at the 

4 end ‘‘and’’; and 

5 (C) by inserting after paragraph (28) the 

6 following new paragraph: 

7 ‘‘(29) freestanding birth center services (as de8 fined in subsection (l)(3)(A)) and other ambulatory 

9 services that are offered by a freestanding birth cen10 ter (as defined in subsection (l)(3)(B)) and that are 

11 otherwise included in the plan; and’’; and 

12 (2) in subsection (l), by adding at the end the 

13 following new paragraph: 

14 ‘‘(3)(A) The term ‘freestanding birth center services’ 

15 means services furnished to an individual at a freestanding 

16 birth center (as defined in subparagraph (B)), including 

17 by a licensed birth attendant (as defined in subparagraph 

18 (C)) at such center. 

19 ‘‘(B) The term ‘freestanding birth center’ means a 

20 health facility— 

21 ‘‘(i) that is not a hospital; and 

22 ‘‘(ii) where childbirth is planned to occur away 

23 from the pregnant woman’s residence. 

24 ‘‘(C) The term ‘licensed birth attendant’ means an 

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1 volved to provide health care at childbirth and who pro2 vides such care within the scope of practice under which 

3 the individual is legally authorized to perform such care 

4 under State law (or the State regulatory mechanism pro5 vided by State law), regardless of whether the individual 

6 is under the supervision of, or associated with, a physician 

7 or other health care provider. Nothing in this subpara8 graph shall be construed as changing State law require9 ments applicable to a licensed birth attendant.’’. 

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

11 this section shall apply to items and services furnished on 

12 or after the date of the enactment of this Act. 

13 SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER 

14 THE VACCINES FOR CHILDREN PROGRAM. 

15 Section 1928(b)(2)(A)(iii)(I) of the Social Security 

16 Act (42 U.S.C. 1396s(b)(2)(A)(iii)(I)) is amended— 

17 (1) by striking ‘‘or a rural health clinic’’ and in18 serting ‘‘, a rural health clinic’’; and 

19 (2) by inserting ‘‘or a public health clinic,’’ 

20 after ‘‘‘1905(l)(1)),’’. 


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1 Subtitle D—Coverage 

2 SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-IN3 COME HIV-INFECTED INDIVIDUALS. 

4 (a) IN GENERAL.—Section 1902 of the Social Secu5 rity Act (42 U.S.C. 1396a), as amended by section 

6 1714(a)(1), is amended— 

7 (1) in subsection (a)(10)(A)(ii)— 

8 (A) by striking ‘‘or’’ at the end of sub9 clause (XIX); 

10 (B) by adding ‘‘or’’ at the end of subclause 

11 (XX); and 

12 (C) by adding at the end the following: 

13 ‘‘(XXI) who are described in subsection (ii) (re14 lating to HIV-infected individuals);’’; and 

15 (2) by adding at the end, as amended by sec16 tions 1703 and 1714(a), the following: 

17 ‘‘(ii) individuals described in this subsection are indi18 viduals not described in subsection (a)(10)(A)(i)— 

19 ‘‘(1) who have HIV infection; 

20 ‘‘(2) whose income (as determined under the 

21 State plan under this title with respect to disabled 

22 individuals) does not exceed the maximum amount 

23 of income a disabled individual described in sub24 section (a)(10)(A)(i) may have and obtain medical 

25 assistance under the plan; and 


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1 ‘‘(3) whose resources (as determined under the 

2 State plan under this title with respect to disabled 

3 individuals) do not exceed the maximum amount of 

4 resources a disabled individual described in sub5 section (a)(10)(A)(i) may have and obtain medical 

6 assistance under the plan.’’. 

7 (b) ENHANCED MATCH.—The first sentence of sec8 tion 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended 

9 by striking ‘‘section 1902(a)(10)(A)(ii)(XVIII)’’ and in10 serting ‘‘subclause (XVIII) or (XX) of section 

11 1902(a)(10)(A)(ii)’’. 

12 (c) CONFORMING AMENDMENTS.—Section 1905(a) of 

13 such Act (42 U.S.C. 1396d(a)) is amended, in the matter 

14 preceding paragraph (1)— 

15 (1) by striking ‘‘or’’ at the end of clause (xii); 

16 (2) by adding ‘‘or’’ at the end of clause (xiii); 

17 and 

18 (3) by inserting after clause (xiii) the following: 

19 ‘‘(xiv) individuals described in section 

20 1902(ii),’’. 

21 (d) EXEMPTION FROM FUNDING LIMITATION FOR

22 TERRITORIES.—Section 1108(g) of the Social Security 

23 Act (42 U.S.C. 1308(g)) is amended by adding at the end 

24 the following: 


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1 ‘‘(5) DISREGARDING MEDICAL ASSISTANCE FOR

2 OPTIONAL LOW-INCOME HIV-INFECTED INDIVID3 UALS.—The limitations under subsection (f) and the 

4 previous provisions of this subsection shall not apply 

5 to amounts expended for medical assistance for indi6 viduals described in section 1902(ii) who are only el7 igible for such assistance on the basis of section 

8 1902(a)(10)(A)(ii)(XX).’’. 

9 (e) EFFECTIVE DATE; SUNSET.—The amendments 

10 made by this section shall apply to expenditures for cal11 endar quarters beginning on or after the date of the enact12 ment of this Act, and before January 1, 2013, without 

13 regard to whether or not final regulations to carry out 

14 such amendments have been promulgated by such date. 

15 SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSIST16 ANCE (TMA). 

17 Sections 1902(e)(1)(B) and 1925(f) of the Social Se18 curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r–6(f)), as 

19 amended by section 5004(a)(1) of the American Recovery 

20 and Reinvestment Act of 2009 (Public Law 111–5), are 

21 each amended by striking ‘‘December 31, 2010’’ and in22 serting ‘‘December 31, 2012’’. 


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1 SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COV2 ERAGE UNDER CERTAIN CHIP PROGRAMS. 

3 (a) IN GENERAL.—Section 2102(b) of the Social Se4 curity Act (42 U.S.C. 1397bb(b)) is amended by adding 

5 at the end the following new paragraph: 

6 ‘‘(6) REQUIREMENT FOR 12-MONTH CONTIN7 UOUS ELIGIBILITY.—In the case of a State child 

8 health plan that provides child health assistance 

9 under this title through a means other than de10 scribed in section 2101(a)(2), the plan shall provide 

11 for implementation under this title of the 12-month 

12 continuous eligibility option described in section 

13 1902(e)(12) for targeted low-income children whose 

14 family income is below 200 percent of the poverty 

15 line.’’. 

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

17 subsection (a) shall apply to determinations (and redeter18 minations) of eligibility made on or after January 1, 2010. 

19 Subtitle E—Financing 

20 SEC. 1741. PAYMENTS TO PHARMACISTS. 

21 (a) PHARMACY REIMBURSEMENT LIMITS.— 

22 (1) IN GENERAL.—Section 1927(e) of the So23 cial Security Act (42 U.S.C. 1396r–8(e)) is amend24 ed— 

25 (A) by striking paragraph (5) and insert26 ing the following: 


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1 ‘‘(5) USE OF AMP IN UPPER PAYMENT LIM2 ITS.—The Secretary shall calculate the Federal 

3 upper reimbursement limit established under para4 graph (4) as 130 percent of the weighted average 

5 (determined on the basis of manufacturer utiliza6 tion) of monthly average manufacturer prices.’’. 

7 (2) DEFINITION OF AMP.—Section 

8 1927(k)(1)(B) of such Act (42 U.S.C. 1396r– 

9 8(k)(1)(B)) is amended— 

10 (B) in the heading, by striking ‘‘EX11 TENDED TO WHOLESALERS’’ and inserting 

12 ‘‘AND OTHER PAYMENTS’’; and 

13 (C) by striking ‘‘regard to’’ and all that 

14 follows through the period and inserting the fol15 lowing: ‘‘regard to— 

16 ‘‘(i) customary prompt pay discounts 

17 extended to wholesalers; 

18 ‘‘(ii) bona fide service fees paid by 

19 manufacturers; 

20 ‘‘(iii) reimbursement by manufactur21 ers for recalled, damaged, expired, or oth22 erwise unsalable returned goods, including 

23 reimbursement for the cost of the goods 

24 and any reimbursement of costs associated 


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1 with return goods handling and processing, 

2 reverse logistics, and drug destruction; 

3 ‘‘(iv) sales directly to, or rebates, dis4 counts, or other price concessions provided 

5 to, pharmacy benefit managers, managed 

6 care organizations, health maintenance or7 ganizations, insurers, mail order phar8 macies that are not open to all members of 

9 the public, or long term care providers, 

10 provided that these rebates, discounts, or 

11 price concessions are not passed through to 

12 retail pharmacies; 

13 ‘‘(v) sales directly to, or rebates, dis14 counts, or other price concessions provided 

15 to, hospitals, clinics, and physicians, unless 

16 the drug is an inhalation, infusion, or 

17 injectable drug, or unless the Secretary de18 termines, as allowed for in Agency admin19 istrative procedures, that it is necessary to 

20 include such sales, rebates, discounts, and 

21 price concessions in order to obtain an ac22 curate AMP for the drug. Such a deter23 mination shall not be subject to judicial re24 view; or 


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1 ‘‘(vi) rebates, discounts, and other 

2 price concessions required to be provided 

3 under agreements under subsections (f) 

4 and (g) of section 1860D–2(f).’’. 

5 (3) MANUFACTURER REPORTING REQUIRE6 MENTS.—Section 1927(b)(3) of such Act (42 U.S.C. 

7 1396r–8(b)(3)) is amended— 

8 (A) in subparagraph (A), by adding at the 

9 end the following new clause: 

10 ‘‘(iv) not later than 30 days after the 

11 last day of each month of a rebate period 

12 under the agreement, on the manufactur13 er’s total number of units that are used to 

14 calculate the monthly average manufac15 turer price for each covered outpatient 

16 drug.’’. 

17 (4) AUTHORITY TO PROMULGATE REGULA18 TION.—The Secretary of Health and Human Serv19 ices may promulgate regulations to clarify the re20 quirements for upper payment limits and for the de21 termination of the average manufacturer price in an 

22 expedited manner. Such regulations may become ef23 fective on an interim final basis, pending oppor24 tunity for public comment. 


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1 (5) PHARMACY REIMBURSEMENTS THROUGH

2 DECEMBER 31, 2010.—The specific upper limit under 

3 section 447.332 of title 42, Code of Federal Regula4 tions (as in effect on December 31, 2006) applicable 

5 to payments made by a State for multiple source 

6 drugs under a State Medicaid plan shall continue to 

7 apply through December 31, 2010, for purposes of 

8 the availability of Federal financial participation for 

9 such payments. 

10 (b) DISCLOSURE OF PRICE INFORMATION TO THE

11 PUBLIC.—Section 1927(b)(3) of such Act (42 U.S.C. 

12 1396r–8(b)(3)) is amended— 

13 (1) in subparagraph (A)— 

14 (A) in clause (i), in the matter preceding 

15 subclause (I), by inserting ‘‘month of a’’ after 

16 ‘‘each’’; and 

17 (B) in the last sentence, by striking ‘‘and 

18 shall,’’ and all that follows through the period; 

19 and 

20 (2) in subparagraph (D)(v), by inserting 

21 ‘‘weighted’’ before ‘‘average manufacturer prices’’. 

22 SEC. 1742. PRESCRIPTION DRUG REBATES. 

23 (a) ADDITIONAL REBATE FOR NEW FORMULATIONS

24 OF EXISTING DRUGS.— 


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1 (1) IN GENERAL.—Section 1927(c)(2) of the 

2 Social Security Act (42 U.S.C. 1396r–8(c)(2)) is 

3 amended by adding at the end the following new 

4 subparagraph: 

5 ‘‘(C) TREATMENT OF NEW FORMULA6 TIONS.—In the case of a drug that is a line ex7 tension of a single source drug or an innovator 

8 multiple source drug that is an oral solid dos9 age form, the rebate obligation with respect to 

10 such drug under this section shall be the 

11 amount computed under this section for such 

12 new drug or, if greater, the product of— 

13 ‘‘(i) the average manufacturer price of 

14 the line extension of a single source drug 

15 or an innovator multiple source drug that 

16 is an oral solid dosage form; 

17 ‘‘(ii) the highest additional rebate 

18 (calculated as a percentage of average 

19 manufacturer price) under this section for 

20 any strength of the original single source 

21 drug or innovator multiple source drug; 

22 and 

23 ‘‘(iii) the total number of units of 

24 each dosage form and strength of the line 

25 extension product paid for under the State 


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1 plan in the rebate period (as reported by 

2 the State). 

3 In this subparagraph, the term ‘line extension’ 

4 means, with respect to a drug, an extended re5 lease formulation of the drug.’’. 

6 (2) EFFECTIVE DATE.—The amendment made 

7 by paragraph (1) shall apply to drugs dispensed 

8 after December 31, 2009. 

9 (b) INCREASE MINIMUM REBATE PERCENTAGE FOR

10 SINGLE SOURCE DRUGS.—Section 1927(c)(1)(B)(i) of the 

11 Social Security Act (42 U.S.C. 1396r–8(c)(1)(B)(i)) is 

12 amended— 

13 (1) in subclause (IV), by striking ‘‘and’’ at the 

14 end; 

15 (2) in subclause (V)— 

16 (A) by inserting ‘‘and before January 1, 

17 2010’’ after ‘‘December 31, 1995,’’; and 

18 (B) by striking the period at the end and 

19 inserting ‘‘; and’’; and 

20 (3) by adding at the end the following new sub21 clause: 

22 ‘‘(VI) after December 31, 2009, 

23 is 22.1 percent.’’. 


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1 SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DIS2 COUNTS TO ENROLLEES OF MEDICAID MAN3 AGED CARE ORGANIZATIONS. 

4 (a) IN GENERAL.—Section 1903(m)(2)(A) of the So5 cial Security Act (42 U.S.C. 1396b(m)(2)(A)) is amend6 ed— 

7 (1) in clause (xi), by striking ‘‘and’’ at the end; 

8 (2) in clause (xii), by striking the period at the 

9 end and inserting ‘‘; and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(xiii) such contract provides that the entity 

12 shall report to the State such information, on such 

13 timely and periodic basis as specified by the Sec14 retary, as the State may require in order to include, 

15 in the information submitted by the State to a man16 ufacturer under section 1927(b)(2)(A), information 

17 on covered outpatient drugs dispensed to individuals 

18 eligible for medical assistance who are enrolled with 

19 the entity and for which the entity is responsible for 

20 coverage of such drugs under this subsection.’’. 

21 (b) CONFORMING AMENDMENTS.—Section 1927 of 

22 such Act (42 U.S.C. 1396r-8) is amended—— 

23 (1) in the first sentence of subsection (b)(1)(A), 

24 by inserting before the period at the end the fol25 lowing: ‘‘, including such drugs dispensed to individ26 uals enrolled with a medicaid managed care organiVerDate Nov 24 2008 01:27 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00795 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 zation if the organization is responsible for coverage 

2 of such drugs’’; 

3 (2) in subsection (b)(2), by adding at the end 

4 the following new subparagraph: 

5 ‘‘(C) REPORTING ON MMCO DRUGS.—On a 

6 quarterly basis, each State shall report to the 

7 Secretary the total amount of rebates in dollars 

8 received from pharmacy manufacturers for 

9 drugs provided to individuals enrolled with 

10 Medicaid managed care organizations that con11 tract under section 1903(m).’’; and 

12 (3) in subsection (j)— 

13 (A) in the heading by striking ‘‘EXEMP14 TION’’ and inserting ‘‘SPECIAL RULES’’; and 

15 (B) in paragraph (1), by striking ‘‘not’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section take effect on July 1, 2010, and shall apply 

18 to drugs dispensed on or after such date, without regard 

19 to whether or not final regulations to carry out such 

20 amendments have been promulgated by such date. 

21 SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDU22 CATION. 

23 (a) IN GENERAL.—Section 1905 of the Social Secu24 rity Act (42 U.S.C. 1396d), as amended by sections 


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1 1701(a)(2), 1711(a), and 1713(a), is amended by adding 

2 at the end the following new subsection: 

3 ‘‘(bb) PAYMENT FOR GRADUATE MEDICAL EDU4 CATION.— 

5 ‘‘(1) IN GENERAL.—The term ‘medical assist6 ance’ includes payment for costs of graduate medical 

7 education consistent with this subsection, whether 

8 provided in or outside of a hospital. 

9 ‘‘(2) SUBMISSION OF INFORMATION.—For pur10 poses of paragraph (1) and section 

11 1902(a)(13)(A)(v), payment for such costs is not 

12 consistent with this subsection unless— 

13 ‘‘(A) the State submits to the Secretary, in 

14 a timely manner and on an annual basis speci15 fied by the Secretary, information on total pay16 ments for graduate medical education and how 

17 such payments are being used for graduate 

18 medical education, including— 

19 ‘‘(i) the institutions and programs eli20 gible for receiving the funding; 

21 ‘‘(ii) the manner in which such pay22 ments are calculated; 

23 ‘‘(iii) the types and fields of education 

24 being supported; 


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1 ‘‘(iv) the workforce or other goals to 

2 which the funding is being applied; 

3 ‘‘(v) State progress in meeting such 

4 goals; and 

5 ‘‘(vi) such other information as the 

6 Secretary determines will assist in carrying 

7 out paragraphs (3) and (4); and 

8 ‘‘(B) such expenditures are made con9 sistent with such goals and requirements as are 

10 established under paragraph (4). 

11 ‘‘(3) REVIEW OF INFORMATION.—The Secretary 

12 shall make the information submitted under para13 graph (2) available to the Advisory Committee on 

14 Health Workforce Evaluation and Assessment (es15 tablished under section 2261 of the Public Health 

16 Service Act). The Secretary and the Advisory Com17 mittee shall independently review the information 

18 submitted under paragraph (2), taking into account 

19 State and local workforce needs. 

20 ‘‘(4) SPECIFICATION OF GOALS AND REQUIRE21 MENTS.—The Secretary shall specify by rule, ini22 tially published by not later than December 31, 

23 2011— 

24 ‘‘(A) program goals for the use of funds 

25 described in paragraph (1), taking into account 


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1 recommendations of the such Advisory Com2 mittee and the goals for approved medical resi3 dency training programs described in section 

4 1886(h)(1)(B); and 

5 ‘‘(B) requirements for use of such funds 

6 consistent with such goals. 

7 Such rule may be effective on an interim basis pend8 ing revision after an opportunity for public com9 ment.’’. 

10 (b) CONFORMING AMENDMENT.—Section 

11 1902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A)) 

12 is amended— 

13 (1) by striking ‘‘and’’ at the end of clause (iii); 

14 (2) by striking ‘‘; and’’ and inserting ‘‘, and’’; 

15 and 

16 (3) by adding at the end the following new 

17 clause: 

18 ‘‘(v) in the case of hospitals and at 

19 the option of a State, such rates may in20 clude, to the extent consistent with section 

21 1905(bb), payment for graduate medical 

22 education; and’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall take effect on the date of the enactment 

25 of this Act. Nothing in this section shall be construed as 


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1 affecting payments made before such date under a State 

2 plan under title XIX of the Social Security Act for grad3 uate medical education. 

4 Subtitle F—Waste, Fraud, and 

5 Abuse 

6 SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS. 

7 (a) MEDICAID NON-PAYMENT FOR CERTAIN HEALTH

8 CARE-ACQUIRED CONDITIONS.—Section 1903(i) of the 

9 Social Security Act (42 U.S.C. 1396b(i)) is amended— 

10 (1) by striking ‘‘or’’ at the end of paragraph 

11 (23); 

12 (2) by striking the period at the end of para13 graph (24) and inserting ‘‘; or’’; and 

14 (3) by inserting after paragraph (24) the fol15 lowing new paragraph: 

16 ‘‘(25) with respect to amounts expended for 

17 services related to the presence of a condition that 

18 could be identified by a secondary diagnostic code 

19 described in section 1886(d)(4)(D)(iv) and for any 

20 health care acquired condition determined as a non21 covered service under title XVIII.’’. 

22 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(G) 

23 of such Act (42 U.S.C. 1397gg(e)(1)(G)) is amended by 

24 striking ‘‘and (17)’’ and inserting ‘‘(17), and (25)’’. 


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1 (c) PERMISSION TO INCLUDE ADDITIONAL HEALTH

2 CARE-ACQUIRED CONDITIONS.—Nothing in this section 

3 shall prevent a State from including additional health 

4 care-acquired conditions for non-payment in its Medicaid 

5 program under title XIX of the Social Security Act. 

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

7 this section shall apply to discharges occurring on or after 

8 January 1, 2010. 

9 SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER 

10 MEDICAID INTEGRITY PROGRAM. 

11 Section 1936(c)(2)) of the Social Security Act (42 

12 U.S.C. 1396u–7(c)(2)) is amended— 

13 (1) by redesignating subparagraph (D) as sub14 paragraph (E); and 

15 (2) by inserting after subparagraph (C) the fol16 lowing new subparagraph: 

17 ‘‘(D) For the contract year beginning in 

18 2011 and each subsequent contract year, the 

19 entity provides assurances to the satisfaction of 

20 the Secretary that the entity will conduct peri21 odic evaluations of the effectiveness of the ac22 tivities carried out by such entity under the 

23 Program and will submit to the Secretary an 

24 annual report on such activities.’’. 


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1 SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO 

2 ADOPT PROGRAMS TO REDUCE WASTE, 

3 FRAUD, AND ABUSE. 

4 Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 

5 1396a(a)), as amended by sections 1631(b)(1) and 1703, 

6 is further amended— 

7 (1) in paragraph (74), by striking at the end 

8 ‘‘and’’; 

9 (2) in paragraph (75), by striking at the end 

10 the period and inserting ‘‘; and’’; and 

11 (3) by inserting after paragraph (75) the fol12 lowing new paragraph: 

13 ‘‘(76) provide that any provider or supplier 

14 (other than a physician or nursing facility) providing 

15 services under such plan shall, subject to paragraph 

16 (5) of section 1874(d), establish a compliance pro17 gram described in paragraph (1) of such section in 

18 accordance with such section.’’. 

19 SEC. 1754. OVERPAYMENTS. 

20 (a) IN GENERAL.—Section 1903(d)(2)(C) of the So21 cial Security Act (42 U.S.C. 1396b(d)(2)(C)) is amended 

22 by inserting ‘‘(or 1 year in the case of overpayments due 

23 to fraud)’’ after ‘‘60 days’’. 

24 (b) EFFECTIVE DATE.—In the case overpayments 

25 discovered on or after the date of the enactment of this 

26 Act. 


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1 SEC. 1755. MANAGED CARE ORGANIZATIONS. 

2 (a) MINIMUM MEDICAL LOSS RATIO.— 

3 (1) MEDICAID.—Section 1903(m)(2)(A) of the 

4 Social Security Act (42 U.S.C. 1396b(m)(2)(A)), as 

5 amended by section 1743(a)(3), is amended— 

6 (A) by striking ‘‘and’’ at the end of clause 

7 (xii); 

8 (B) by striking the period at the end of 

9 clause (xiii) and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following new 

11 clause: 

12 ‘‘(xiv) such contract has a medical loss ratio, as 

13 determined in accordance with a methodology speci14 fied by the Secretary that is a percentage (not less 

15 than 85 percent) as specified by the Secretary.’’. 

16 (2) CHIP.—Section 2107(e)(1) of such Act (42 

17 U.S.C. 1397gg(e)(1)) is amended— 

18 (A) by redesignating subparagraphs (H) 

19 through (L) as subparagraphs (I) through (M); 

20 and 

21 (B) by inserting after subparagraph (G) 

22 the following new subparagraph: 

23 ‘‘(H) Section 1903(m)(2)(A)(xiv) (relating 

24 to application of minimum loss ratios), with re25 spect to comparable contracts under this title.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to contracts entered 

3 into or renewed on or after July 1, 2010. 

4 (b) PATIENT ENCOUNTER DATA.— 

5 (1) IN GENERAL.—Section 1903(m)(2)(A)(xi) 

6 of the Social Security Act (42 U.S.C. 

7 1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and 

8 for the provision of such data to the State at a fre9 quency and level of detail to be specified by the Sec10 retary’’ after ‘‘patients’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply with respect to contract 

13 years beginning on or after January 1, 2010. 

14 SEC. 1756. TERMINATION OF PROVIDER PARTICIPATION 

15 UNDER MEDICAID AND CHIP IF TERMINATED 

16 UNDER MEDICARE OR OTHER STATE PLAN 

17 OR CHILD HEALTH PLAN. 

18 (a) STATE PLAN REQUIREMENT.—Section 

19 1902(a)(39) of the Social Security Act (42 U.S.C. 42 

20 U.S.C. 1396a(a)) is amended by inserting after ‘‘1128A,’’ 

21 the following: ‘‘terminate the participation of any indi22 vidual or entity in such program if (subject to such excep23 tions are are permitted with respect to exclusion under 

24 sections 1128(b)(3)(C) and 1128(d)(3)(B)) participation 

25 of such individual or entity is terminated under title 


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1 XVIII, any other State plan under this title, or any child 

2 health plan under title XXI,’’. 

3 (b) APPLICATION TO CHIP.—Section 2107(e)(1)(A) 

4 of such Act (42 U.S.C. 1397gg(e)(1)(A)) is amended by 

5 inserting before the period at the end the following: ‘‘and 

6 section 1902(a)(39) (relating to exclusion and termination 

7 of participation)’’. 

8 (c) EFFECTIVE DATE.— 

9 (1) Except as provided in paragraph (2), the 

10 amendments made by this section shall apply to 

11 services furnished on or after JJanuary 1, 2011, 

12 without regard to whether or not final regulations to 

13 carry out such amendments have been promulgated 

14 by such date. 

15 (2) In the case of a State plan for medical as16 sistance under title XIX of the Social Security Act 

17 or a child health plan under title XXI of such Act 

18 which the Secretary of Health and Human Services 

19 determines requires State legislation (other than leg20 islation appropriating funds) in order for the plan to 

21 meet the additional requirement imposed by the 

22 amendments made by this section, the State plan or 

23 child health plan shall not be regarded as failing to 

24 comply with the requirements of such title solely on 

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1 quirement before the first day of the first calendar 

2 quarter beginning after the close of the first regular 

3 session of the State legislature that begins after the 

4 date of the enactment of this Act. For purposes of 

5 the previous sentence, in the case of a State that has 

6 a 2-year legislative session, each year of such session 

7 shall be deemed to be a separate regular session of 

8 the State legislature. 

9 SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICI10 PATION RELATING TO CERTAIN OWNERSHIP, 

11 CONTROL, AND MANAGEMENT AFFILIATIONS. 

12 (a) STATE PLAN REQUIREMENT.—Section 1902(a) 

13 of the Social Security Act (42 U.S.C. 1396a(a)), as 

14 amended by sections 1631(b)(1), 1703, and 1753, is fur15 ther amended— 

16 (1) in paragraph (75), by striking at the end 

17 ‘‘and’’; 

18 (2) in paragraph (76), by striking at the end 

19 the period and inserting ‘‘; and’’; and 

20 (3) by inserting after paragraph (76) the fol21 lowing new paragraph: 

22 ‘‘(77) provide that the State agency described 

23 in paragraph (9) exclude, with respect to a period, 

24 any individual or entity from participation in the 

25 program under the State plan if such individual or 


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1 entity owns, controls, or manages an entity that (or 

2 if such entity is owned, controlled, or managed by an 

3 individual or entity that)— 

4 ‘‘(A) has unpaid overpayments under this 

5 title during such period determined by the Sec6 retary or the State agency to be delinquent; 

7 ‘‘(B) is suspended or excluded from par8 ticipation under or whose participation is termi9 nated under this title during such period; or 

10 ‘‘(C) is affiliated with an individual or enti11 ty that has been suspended or excluded from 

12 participation under this title or whose participa13 tion is terminated under this title during such 

14 period.’’. 

15 (b) CHILD HEALTH PLAN REQUIREMENT.—Section 

16 2107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)), 

17 as amended by section 1756(b), is amended by striking 

18 ‘‘section 1902(a)(39)’’ and inserting ‘‘sections 

19 1902(a)(39) and 1902(a)(77)’’. 

20 (c) EFFECTIVE DATE.— 

21 (1) Except as provided in paragraph (2), the 

22 amendments made by this section shall apply to 

23 services furnished on or after January 1, 2011, 

24 without regard to whether or not final regulations to 


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1 carry out such amendments have been promulgated 

2 by such date. 

3 (2) In the case of a State plan for medical as4 sistance under title XIX of the Social Security Act 

5 or a child health plan under title XXI of such Act 

6 which the Secretary of Health and Human Services 

7 determines requires State legislation (other than leg8 islation appropriating funds) in order for the plan to 

9 meet the additional requirement imposed by the 

10 amendments made by this section, the State plan or 

11 child health plan shall not be regarded as failing to 

12 comply with the requirements of such title solely on 

13 the basis of its failure to meet this additional re14 quirement before the first day of the first calendar 

15 quarter beginning after the close of the first regular 

16 session of the State legislature that begins after the 

17 date of the enactment of this Act. For purposes of 

18 the previous sentence, in the case of a State that has 

19 a 2-year legislative session, each year of such session 

20 shall be deemed to be a separate regular session of 

21 the State legislature. 


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1 SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF 

2 DATA ELEMENTS UNDER MMIS TO DETECT 

3 FRAUD AND ABUSE. 

4 Section 1903(r)(1)(F) of the Social Security Act (42 

5 U.S.C. 1396b(r)(1)(F)) is amended by inserting after 

6 ‘‘necessary’’ the following: ‘‘and including, for data sub7 mitted to the Secretary on or after July 1, 2010, data 

8 elements from the automated data system that the Sec9 retary determines to be necessary for detection of waste, 

10 fraud, and abuse’’. 

11 SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 

12 ALTERNATE PAYEES REQUIRED TO REG13 ISTER UNDER MEDICAID. 

14 (a) IN GENERAL.—Section 1902(a) of the Social Se15 curity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended 

16 by sections 1631(b), 1703, 1753, and 1757, is further 

17 amended— 

18 (1) in paragraph (76); by striking at the end 

19 ‘‘and’’; 

20 (2) in paragraph (77), by striking the period at 

21 the end and inserting ‘‘and’’; and 

22 (3) by inserting after paragraph (77) the fol23 lowing new paragraph: 

24 ‘‘(78) provide that any agent, clearinghouse, or 

25 other alternate payee that submits claims on behalf 

26 of a health care provider must register with the 


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1 State and the Secretary in a form and manner speci2 fied by the Secretary under section 1866(j)(1)(D).’’. 

3 (b) DENIAL OF PAYMENT.—Section 1903(i) of such 

4 Act (42 U.S.C. 1396b(i)), as amended by section 1753, 

5 is amended— 

6 (1) by striking ‘‘or’’ at the end of paragraph 

7 (24); 

8 (2) by striking the period at the end of para9 graph (25) and inserting ‘‘; or’’; and 

10 (3) by inserting after paragraph (25) the fol11 lowing new paragraph: 

12 ‘‘(26) with respect to any amount paid to a bill13 ing agent, clearinghouse, or other alternate payee 

14 that is not registered with the State and the Sec15 retary as required under section 1902(a)(78).’’. 

16 (c) EFFECTIVE DATE.— 

17 (1) Except as provided in paragraph (2), the 

18 amendments made by this section shall apply to 

19 claims submitted on or after January 1, 2012, with20 out regard to whether or not final regulations to 

21 carry out such amendments have been promulgated 

22 by such date. 

23 (2) In the case of a State plan for medical as24 sistance under title XIX of the Social Security Act 

25 which the Secretary of Health and Human Services 


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1 determines requires State legislation (other than leg2 islation appropriating funds) in order for the plan to 

3 meet the additional requirement imposed by the 

4 amendments made by this section, the State plan or 

5 child health plan shall not be regarded as failing to 

6 comply with the requirements of such title solely on 

7 the basis of its failure to meet this additional re8 quirement before the first day of the first calendar 

9 quarter beginning after the close of the first regular 

10 session of the State legislature that begins after the 

11 date of the enactment of this Act. For purposes of 

12 the previous sentence, in the case of a State that has 

13 a 2-year legislative session, each year of such session 

14 shall be deemed to be a separate regular session of 

15 the State legislature. 

16 SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RE17 LATED MISCONDUCT. 

18 (a) IN GENERAL.—Section 1903(i) of the Social Se19 curity Act (42 U.S.C. 1396b(i)), as previously amended 

20 is amended— 

21 (1) by striking ‘‘or’’ at the end of paragraph 

22 (25); 

23 (2) by striking the period at the end of para24 graph (26) and inserting a semicolon; and 


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1 (3) by inserting after paragraph (26) the fol2 lowing new paragraphs: 

3 ‘‘(27) with respect to any amount expended— 

4 ‘‘(A) on litigation in which a court imposes 

5 sanctions on the State, its employees, or its 

6 counsel for litigation-related misconduct; or 

7 ‘‘(B) to reimburse (or otherwise com8 pensate) a managed care entity for payment of 

9 legal expenses associated with any action in 

10 which a court imposes sanctions on the man11 aged care entity for litigation-related mis12 conduct.’’. 

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

14 subsection (a) shall apply to amounts expended on or after 

15 January 1, 2010. 

16 Subtitle G—Puerto Rico and the 

17 Territories 

18 SEC. 1771. PUERTO RICO AND TERRITORIES. 

19 (a) INCREASE IN CAP.— 

20 (1) IN GENERAL.—Section 1108(g) of the So21 cial Security Act (42 U.S.C. 1308(g)) is amended— 

22 (A) in paragraph (4) by striking ‘‘and (3)’’ 

23 and by inserting ‘‘(3), (6), and (7)’’; and 


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1 (B) by inserting after paragraph (5), as 

2 added by section 1731(d), the following new 

3 paragraph: 

4 ‘‘(6) FISCAL YEARS 2011 THROUGH 2019.—The 

5 amounts otherwise determined under this subsection 

6 for Puerto Rico, the Virgin Islands, Guam, the 

7 Northern Mariana Islands, and American Samoa for 

8 fiscal year 2011 and each succeeding fiscal year 

9 through fiscal year 2019 shall be increased by the 

10 percentage specified under section 1771(c) of the 

11 America’s Affordable Health Choices Act of 2009 

12 for purposes of this paragraph of the amounts other13 wise determined under this section (without regard 

14 to this paragraph). 

15 ‘‘(7) FISCAL YEAR 2020 AND SUBSEQUENT FIS16 CAL YEARS.—The amounts otherwise determined 

17 under this subsection for Puerto Rico, the Virgin Is18 lands, Guam, the Northern Mariana Islands, and 

19 American Samoa for fiscal year 2020 and each suc20 ceeding fiscal year shall be the amount provided in 

21 paragraph (6) or this paragraph for the preceding 

22 fiscal year for the respective territory increased by 

23 the percentage increase referred to in paragraph 

24 (1)(B), rounded to the nearest $10,000 (or 

25 $100,000 in the case of Puerto Rico).’’. 


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1 (2) COORDINATION WITH ARRA.—Section 

2 5001(d) of the American Recovery and Reinvestment 

3 Act of 2009 shall not apply during any period for 

4 which section 1108(g)(6) of the Social Security Act, 

5 as added by paragraph (1), applies. 

6 (b) INCREASE IN FMAP.— 

7 (1) IN GENERAL.—Section 1905(b)(2) of the 

8 Social Security Act (42 U.S.C. 1396d(b)(2)) is 

9 amended by striking ‘‘50 per centum’’ and inserting 

10 ‘‘for fiscal years 2011 through 2019, the percentage 

11 specified under section 1771(c) of the America’s Af12 fordable Health Choices Act of 2009 for purposes of 

13 this clause for such fiscal year and for subsequent 

14 fiscal years the percentage so specified for fiscal 

15 year 2019’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by subsection (a) shall apply to items and services 

18 furnished on or after October 1, 2010. 

19 (c) SPECIFICATION OF PERCENTAGES.—The Sec20 retary of Health and Human Services shall specify, before 

21 January 1, 2011, the percentages to be applied under sec22 tion 1108(g)(6) of the Social Security Act, as added by 

23 subsection (a)(1), and under section 1905(b)(2) of such 

24 Act, as amended by subsection (b)(1), in a manner so that 

25 for the period beginning with 2011 and ending with 2019 


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1 the total estimated additional Federal expenditures result2 ing from the application of such percentages will be equal 

3 to $10,350,000,000. 

4 Subtitle H—Miscellaneous 

5 SEC. 1781. TECHNICAL CORRECTIONS. 

6 (a) TECHNICAL CORRECTION TO SECTION 1144 OF

7 THE SOCIAL SECURITY ACT.—The first sentence of sec8 tion 1144(c)(3) of the Social Security Act (42 U.S.C. 

9 1320b—14(c)(3)) is amended— 

10 (1) by striking ‘‘transmittal’’; and 

11 (2) by inserting before the period the following: 

12 ‘‘as specified in section 1935(a)(4)’’. 

13 (b) CLARIFYING AMENDMENT TO SECTION 1935 OF

14 THE SOCIAL SECURITY ACT.—Section 1935(a)(4) of the 

15 Social Security Act (42 U.S.C. 1396u—5(a)(4)), as 

16 amended by section 113(b) of Public Law 110–275, is 

17 amended— 

18 (1) by striking the second sentence; 

19 (2) by redesignating the first sentence as a sub20 paragraph (A) with appropriate indentation and 

21 with the following heading: ‘‘IN GENERAL’’; 

22 (3) by adding at the end the following subpara23 graphs: 

24 ‘‘(B) FURNISHING MEDICAL ASSISTANCE

25 WITH REASONABLE PROMPTNESS.—For the 


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1 purpose of a State’s obligation under section 

2 1902(a)(8) to furnish medical assistance with 

3 reasonable promptness, the date of the elec4 tronic transmission of low-income subsidy pro5 gram data, as described in section 1144(c), 

6 from the Commissioner of Social Security to the 

7 State Medicaid Agency, shall constitute the date 

8 of filing of such application for benefits under 

9 the Medicare Savings Program. 

10 ‘‘(C) DETERMINING AVAILABILITY OF

11 MEDICAL ASSISTANCE.—For the purpose of de12 termining when medical assistance will be made 

13 available, the State shall consider the date of 

14 the individual’s application for the low income 

15 subsidy program to constitute the date of filing 

16 for benefits under the Medicare Savings Pro17 gram.’’. 

18 (c) EFFECTIVE DATE RELATING TO MEDICAID

19 AGENCY CONSIDERATION OF LOW-INCOME SUBSIDY AP20 PLICATION AND DATA TRANSMITTAL.—The amendments 

21 made by subsections (a) and (b) shall be effective as if 

22 included in the enactment of section 113(b) of Public Law 

23 110–275. 

24 (d) TECHNICAL CORRECTION TO SECTION 605 OF

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1 ance Program Reauthorization Act of 2009 (Public Law 

2 111–3) is amended by striking ‘‘legal residents’’ and in3 serting ‘‘lawfully residing in the United States’’. 

4 (e) TECHNICAL CORRECTION TO SECTION 1905 OF

5 THE SOCIAL SECURITY ACT.—Section 1905(a) of the So6 cial Security Act (42 U.S.C. 1396d(a)) is amended by in7 serting ‘‘or the care and services themselves, or both’’ be8 fore ‘‘(if provided in or after’’. 

9 (f) CLARIFYING AMENDMENT TO SECTION 1115 OF

10 THE SOCIAL SECURITY ACT.—Section 1115(a) of the So11 cial Security Act (42 U.S.C. 1315(a)) is amended by add12 ing at the end the following: ‘‘If an experimental, pilot, 

13 or demonstration project that relates to title XIX is ap14 proved pursuant to any part of this subsection, such 

15 project shall be treated as part of the State plan, all med16 ical assistance provided on behalf of any individuals af17 fected by such project shall be medical assistance provided 

18 under the State plan, and all provisions of this Act not 

19 explicitly waived in approving such project shall remain 

20 fully applicable to all individuals receiving benefits under 

21 the State plan.’’. 

22 SEC. 1782. EXTENSION OF QI PROGRAM. 

23 (a) IN GENERAL.—Section 1902(a)(10)(E)(iv) of the 

24 Social Security Act (42 U.S.C. 1396b(a)(10)(E)(iv)) is 

25 amended— 


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1 (1) by striking ‘‘sections 1933 and’’ and by in2 serting ‘‘section’’; and 

3 (2) by striking ‘‘December 2010’’ and inserting 

4 ‘‘December 2012’’. 

5 (b) ELIMINATION OF FUNDING LIMITATION.— 

6 (1) IN GENERAL.—Section 1933 of such Act 

7 (42 U.S.C. 1396u–3) is amended— 

8 (A) in subsection (a), by striking ‘‘who are 

9 selected to receive such assistance under sub10 section (b)’’; 

11 (B) by striking subsections (b), (c), (e), 

12 and (g); 

13 (C) in subsection (d), by striking ‘‘fur14 nished in a State’’ and all that follows and in15 serting ‘‘the Federal medical assistance percent16 age shall be equal to 100 percent.’’; and 

17 (D) by redesignating subsections (d) and 

18 (f) as subsections (b) and (c), respectively. 

19 (2) CONFORMING AMENDMENT.—Section 

20 1905(b) of such Act (42 U.S.C. 1396d(b)) is amend21 ed by striking ‘‘1933(d)’’ and inserting ‘‘1933(b)’’. 

22 (3) EFFECTIVE DATE.—The amendments made 

23 by paragraph (1) shall take effect on January 1, 

24 2011. 


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1 TITLE VIII—REVENUE-RELATED 

2 PROVISIONS 

3 SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION 

4 OF INDIVIDUALS LIKELY TO BE INELIGIBLE 

5 FOR THE LOW-INCOME ASSISTANCE UNDER 

6 THE MEDICARE PRESCRIPTION DRUG PRO7 GRAM TO ASSIST SOCIAL SECURITY ADMINIS8 TRATION’S OUTREACH TO ELIGIBLE INDIVID9 UALS. 

10 (a) IN GENERAL.—Paragraph (19) of section 6103(l) 

11 of the Internal Revenue Code of 1986 is amended to read 

12 as follows: 

13 ‘‘(19) DISCLOSURES TO FACILITATE IDENTI14 FICATION OF INDIVIDUALS LIKELY TO BE INELI15 GIBLE FOR LOW-INCOME SUBSIDIES UNDER MEDI16 CARE PRESCRIPTION DRUG PROGRAM TO ASSIST SO17 CIAL SECURITY ADMINISTRATION’S OUTREACH TO

18 ELIGIBLE INDIVIDUALS.— 

19 ‘‘(A) IN GENERAL.—Upon written request 

20 from the Commissioner of Social Security, the 

21 following return information (including such in22 formation disclosed to the Social Security Ad23 ministration under paragraph (1) or (5)) shall 

24 be disclosed to officers and employees of the So25 cial Security Administration, with respect to 


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1 any taxpayer identified by the Commissioner of 

2 Social Security— 

3 ‘‘(i) return information for the appli4 cable year from returns with respect to 

5 wages (as defined in section 3121(a) or 

6 3401(a)) and payments of retirement in7 come (as described in paragraph (1) of this 

8 subsection), 

9 ‘‘(ii) unearned income information 

10 and income information of the taxpayer 

11 from partnerships, trusts, estates, and sub12 chapter S corporations for the applicable 

13 year, 

14 ‘‘(iii) if the individual filed an income 

15 tax return for the applicable year, the fil16 ing status, number of dependents, income 

17 from farming, and income from self-em18 ployment, on such return, 

19 ‘‘(iv) if the individual is a married in20 dividual filing a separate return for the ap21 plicable year, the social security number (if 

22 reasonably available) of the spouse on such 

23 return, 

24 ‘‘(v) if the individual files a joint re25 turn for the applicable year, the social seVerDate Nov 24 2008 01:27 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00820 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 curity number, unearned income informa2 tion, and income information from partner3 ships, trusts, estates, and subchapter S 

4 corporations of the individual’s spouse on 

5 such return, and 

6 ‘‘(vi) such other return information 

7 relating to the individual (or the individ8 ual’s spouse in the case of a joint return) 

9 as is prescribed by the Secretary by regula10 tion as might indicate that the individual 

11 is likely to be ineligible for a low-income 

12 prescription drug subsidy under section 

13 1860D–14 of the Social Security Act. 

14 ‘‘(B) APPLICABLE YEAR.—For the pur15 poses of this paragraph, the term ‘applicable 

16 year’ means the most recent taxable year for 

17 which information is available in the Internal 

18 Revenue Service’s taxpayer information records. 

19 ‘‘(C) RESTRICTION ON INDIVIDUALS FOR

20 WHOM DISCLOSURE MAY BE REQUESTED.—The 

21 Commissioner of Social Security shall request 

22 information under this paragraph only with re23 spect to— 

24 ‘‘(i) individuals the Social Security 

25 Administration has identified, using all 


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1 other reasonably available information, as 

2 likely to be eligible for a low-income pre3 scription drug subsidy under section 

4 1860D–14 of the Social Security Act and 

5 who have not applied for such subsidy, and 

6 ‘‘(ii) any individual the Social Security 

7 Administration has identified as a spouse 

8 of an individual described in clause (i). 

9 ‘‘(D) RESTRICTION ON USE OF DISCLOSED

10 INFORMATION.—Return information disclosed 

11 under this paragraph may be used only by offi12 cers and employees of the Social Security Ad13 ministration solely for purposes of identifying 

14 individuals likely to be ineligible for a low-in15 come prescription drug subsidy under section 

16 1860D–14 of the Social Security Act for use in 

17 outreach efforts under section 1144 of the So18 cial Security Act.’’. 

19 (b) SAFEGUARDS.—Paragraph (4) of section 6103(p) 

20 of such Code is amended— 

21 (1) by striking ‘‘(l)(19)’’ each place it appears, 

22 and 

23 (2) by striking ‘‘or (17)’’ each place it appears 

24 and inserting ‘‘(17), or (19)’’. 


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1 (c) CONFORMING AMENDMENT.—Paragraph (3) of 

2 section 6103(a) of such Code is amended by striking 

3 ‘‘(19),’’. 

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

5 this section shall apply to disclosures made after the date 

6 which is 12 months after the date of the enactment of 

7 this Act. 

8 SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH 

9 TRUST FUND; FINANCING FOR TRUST FUND. 

10 (a) ESTABLISHMENT OF TRUST FUND.— 

11 (1) IN GENERAL.—Subchapter A of chapter 98 

12 of the Internal Revenue Code of 1986 (relating to 

13 trust fund code) is amended by adding at the end 

14 the following new section: 

15 ‘‘SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS 

16 RESEARCH TRUST FUND. 

17 ‘‘(a) CREATION OF TRUST FUND.—There is estab18 lished in the Treasury of the United States a trust fund 

19 to be known as the ‘Health Care Comparative Effective20 ness Research Trust Fund’ (hereinafter in this section re21 ferred to as the ‘CERTF’), consisting of such amounts 

22 as may be appropriated or credited to such Trust Fund 

23 as provided in this section and section 9602(b). 

24 ‘‘(b) TRANSFERS TO FUND.—There are hereby ap25 propriated to the Trust Fund the following: 


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1 ‘‘(1) For fiscal year 2010, $90,000,000. 

2 ‘‘(2) For fiscal year 2011, $100,000,000. 

3 ‘‘(3) For fiscal year 2012, $110,000,000. 

4 ‘‘(4) For each fiscal year beginning with fiscal 

5 year 2013— 

6 ‘‘(A) an amount equivalent to the net reve7 nues received in the Treasury from the fees im8 posed under subchapter B of chapter 34 (relat9 ing to fees on health insurance and self-insured 

10 plans) for such fiscal year; and 

11 ‘‘(B) subject to subsection (c)(2), amounts 

12 determined by the Secretary of Health and 

13 Human Services to be equivalent to the fair 

14 share per capita amount computed under sub15 section (c)(1) for the fiscal year multiplied by 

16 the average number of individuals entitled to 

17 benefits under part A, or enrolled under part B, 

18 of title XVIII of the Social Security Act during 

19 such fiscal year. 

20 The amounts appropriated under paragraphs (1), (2), (3), 

21 and (4)(B) shall be transferred from the Federal Hospital 

22 Insurance Trust Fund and from the Federal Supple23 mentary Medical Insurance Trust Fund (established 

24 under section 1841 of such Act), and from the Medicare 

25 Prescription Drug Account within such Trust Fund, in 


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1 proportion (as estimated by the Secretary) to the total ex2 penditures during such fiscal year that are made under 

3 title XVIII of such Act from the respective trust fund or 

4 account. 

5 ‘‘(c) FAIR SHARE PER CAPITA AMOUNT.— 

6 ‘‘(1) COMPUTATION.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), the fair share per capita amount 

9 under this paragraph for a fiscal year (begin10 ning with fiscal year 2013) is an amount com11 puted by the Secretary of Health and Human 

12 Services for such fiscal year that, when applied 

13 under this section and subchapter B of chapter 

14 34 of the Internal Revenue Code of 1986, will 

15 result in revenues to the CERTF of 

16 $375,000,000 for the fiscal year. 

17 ‘‘(B) ALTERNATIVE COMPUTATION.— 

18 ‘‘(i) IN GENERAL.—If the Secretary is 

19 unable to compute the fair share per capita 

20 amount under subparagraph (A) for a fis21 cal year, the fair share per capita amount 

22 under this paragraph for the fiscal year 

23 shall be the default amount determined 

24 under clause (ii) for the fiscal year. 


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1 ‘‘(ii) DEFAULT AMOUNT.—The default 

2 amount under this clause for— 

3 ‘‘(I) fiscal year 2013 is equal to 

4 $2; or 

5 ‘‘(II) a subsequent year is equal 

6 to the default amount under this 

7 clause for the preceding fiscal year in8 creased by the annual percentage in9 crease in the medical care component 

10 of the consumer price index (United 

11 States city average) for the 12-month 

12 period ending with April of the pre13 ceding fiscal year. 

14 Any amount determined under subclause 

15 (II) shall be rounded to the nearest penny. 

16 ‘‘(2) LIMITATION ON MEDICARE FUNDING.—In 

17 no case shall the amount transferred under sub18 section (b)(4)(B) for any fiscal year exceed 

19 $90,000,000. 

20 ‘‘(d) EXPENDITURES FROM FUND.— 

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

22 amounts in the CERTF are available, without the 

23 need for further appropriations and without fiscal 

24 year limitation, to the Secretary of Health and 


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1 Human Services for carrying out section 1181 of the 

2 Social Security Act. 

3 ‘‘(2) ALLOCATION FOR COMMISSION.—Not less 

4 than the following amounts in the CERTF for a fis5 cal year shall be available to carry out the activities 

6 of the Comparative Effectiveness Research Commis7 sion established under section 1181(b) of the Social 

8 Security Act for such fiscal year: 

9 ‘‘(A) For fiscal year 2010, $7,000,000. 

10 ‘‘(B) For fiscal year 2011, $9,000,000. 

11 ‘‘(C) For each fiscal year beginning with 

12 2012, $10,000,000. 

13 Nothing in this paragraph shall be construed as pre14 venting additional amounts in the CERTF from 

15 being made available to the Comparative Effective16 ness Research Commission for such activities. 

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

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

19 the Secretary based on the excess of— 

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

21 subchapter B of chapter 34, over 

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

23 1 resulting from the fees imposed by such sub24 chapter.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such subchapter A is amended by adding 

3 at the end thereof the following new item: 

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

4 (b) FINANCING FOR FUND FROM FEES ON INSURED

5 AND SELF-INSURED HEALTH PLANS.— 

6 (1) GENERAL RULE.—Chapter 34 of the Inter7 nal Revenue Code of 1986 is amended by adding at 

8 the end the following new subchapter: 

9 ‘‘Subchapter B—Insured and Self-Insured 

10 Health Plans 

‘‘Sec. 4375. Health insurance. 

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

‘‘Sec. 4377. Definitions and special rules. 

11 ‘‘SEC. 4375. HEALTH INSURANCE. 

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

13 on each specified health insurance policy for each policy 

14 year a fee equal to the fair share per capita amount deter15 mined under section 9511(c)(1) multiplied by the average 

16 number of lives covered under the policy. 

17 ‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub18 section (a) shall be paid by the issuer of the policy. 

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

20 purposes of this section: 

21 ‘‘(1) IN GENERAL.—Except as otherwise pro22 vided in this section, the term ‘specified health in23 surance policy’ means any accident or health insurVerDate Nov 24 2008 01:27 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00828 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 ance policy issued with respect to individuals resid2 ing in the United States. 

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

4 term ‘specified health insurance policy’ does not in5 clude any insurance if substantially all of its cov6 erage is of excepted benefits described in section 

7 9832(c). 

8 ‘‘(3) TREATMENT OF PREPAID HEALTH COV9 ERAGE ARRANGEMENTS.— 

10 ‘‘(A) IN GENERAL.—In the case of any ar11 rangement described in subparagraph (B)— 

12 ‘‘(i) such arrangement shall be treated 

13 as a specified health insurance policy, and 

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

15 subparagraph shall be treated as the 

16 issuer. 

17 ‘‘(B) DESCRIPTION OF ARRANGEMENTS.— 

18 An arrangement is described in this subpara19 graph if under such arrangement fixed pay20 ments or premiums are received as consider21 ation for any person’s agreement to provide or 

22 arrange for the provision of accident or health 

23 coverage to residents of the United States, re24 gardless of how such coverage is provided or ar25 ranged to be provided. 


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

2 ‘‘(a) IMPOSITION OF FEE.—In the case of any appli3 cable self-insured health plan for each plan year, there is 

4 hereby imposed a fee equal to the fair share per capita 

5 amount determined under section 9511(c)(1) multiplied by 

6 the average number of lives covered under the plan. 

7 ‘‘(b) LIABILITY FOR FEE.— 

8 ‘‘(1) IN GENERAL.—The fee imposed by sub9 section (a) shall be paid by the plan sponsor. 

10 ‘‘(2) PLAN SPONSOR.—For purposes of para11 graph (1) the term ‘plan sponsor’ means— 

12 ‘‘(A) the employer in the case of a plan es13 tablished or maintained by a single employer, 

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

15 of a plan established or maintained by an em16 ployee organization, 

17 ‘‘(C) in the case of— 

18 ‘‘(i) a plan established or maintained 

19 by 2 or more employers or jointly by 1 or 

20 more employers and 1 or more employee 

21 organizations, 

22 ‘‘(ii) a multiple employer welfare ar23 rangement, or 

24 ‘‘(iii) a voluntary employees’ bene25 ficiary association described in section 

26 501(c)(9), 


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1 the association, committee, joint board of trust2 ees, or other similar group of representatives of 

3 the parties who establish or maintain the plan, 

4 or 

5 ‘‘(D) the cooperative or association de6 scribed in subsection (c)(2)(F) in the case of a 

7 plan established or maintained by such a coop8 erative or association. 

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

10 For purposes of this section, the term ‘applicable self-in11 sured health plan’ means any plan for providing accident 

12 or health coverage if— 

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

14 other than through an insurance policy, and 

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

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

17 benefit of their employees or former employees, 

18 ‘‘(B) by one or more employee organiza19 tions for the benefit of their members or former 

20 members, 

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

22 or more employee organizations for the benefit 

23 of employees or former employees, 

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

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


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1 ‘‘(E) by any organization described in sec2 tion 501(c)(6), or 

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

4 the preceding subparagraphs, by a multiple em5 ployer welfare arrangement (as defined in sec6 tion 3(40) of Employee Retirement Income Se7 curity Act of 1974), a rural electric cooperative 

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

9 or a rural telephone cooperative association (as 

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

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

12 ‘‘(a) DEFINITIONS.—For purposes of this sub13 chapter— 

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

15 term ‘accident and health coverage’ means any cov16 erage which, if provided by an insurance policy, 

17 would cause such policy to be a specified health in18 surance policy (as defined in section 4375(c)). 

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

20 policy’ means any policy or other instrument where21 by a contract of insurance is issued, renewed, or ex22 tended. 

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

24 States’ includes any possession of the United States. 

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


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1 ‘‘(1) IN GENERAL.—For purposes of this sub2 chapter— 

3 ‘‘(A) the term ‘person’ includes any gov4 ernmental entity, and 

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

6 of law, governmental entities shall not be ex7 empt from the fees imposed by this subchapter 

8 except as provided in paragraph (2). 

9 ‘‘(2) TREATMENT OF EXEMPT GOVERNMENTAL

10 PROGRAMS.—In the case of an exempt governmental 

11 program, no fee shall be imposed under section 4375 

12 or section 4376 on any covered life under such pro13 gram. 

14 ‘‘(3) EXEMPT GOVERNMENTAL PROGRAM DE15 FINED.—For purposes of this subchapter, the term 

16 ‘exempt governmental program’ means— 

17 ‘‘(A) any insurance program established 

18 under title XVIII of the Social Security Act, 

19 ‘‘(B) the medical assistance program es20 tablished by title XIX or XXI of the Social Se21 curity Act, 

22 ‘‘(C) any program established by Federal 

23 law for providing medical care (other than 

24 through insurance policies) to individuals (or 


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1 the spouses and dependents thereof) by reason 

2 of such individuals being— 

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

4 the United States, or 

5 ‘‘(ii) veterans, and 

6 ‘‘(D) any program established by Federal 

7 law for providing medical care (other than 

8 through insurance policies) to members of In9 dian tribes (as defined in section 4(d) of the In10 dian Health Care Improvement Act). 

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

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

13 as if they were taxes. 

14 ‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith15 standing any other provision of law, no amount collected 

16 under this subchapter shall be covered over to any posses17 sion of the United States.’’. 

18 (2) CLERICAL AMENDMENTS.— 

19 (A) Chapter 34 of such Code is amended 

20 by striking the chapter heading and inserting 

21 the following: 

22 ‘‘CHAPTER 34—TAXES ON CERTAIN 

23 INSURANCE POLICIES 

‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS

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


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1 ‘‘Subchapter A—Policies Issued By Foreign 

2 Insurers’’. 

3 (B) The table of chapters for subtitle D of 

4 such Code is amended by striking the item re5 lating to chapter 34 and inserting the following 

6 new item: 

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

7 (3) EFFECTIVE DATE.—The amendments made 

8 by this subsection shall apply with respect to policies 

9 and plans for portions of policy or plan years begin10 ning on or after October 1, 2012. 

11 TITLE IX—MISCELLANEOUS 

12 PROVISIONS 

13 SEC. 1901. REPEAL OF TRIGGER PROVISION. 

14 Subtitle A of title VIII of the Medicare Prescription 

15 Drug, Improvement, and Modernization Act of 2003 (Pub16 lic Law 108–173) is repealed and the provisions of law 

17 amended by such subtitle are restored as if such subtitle 

18 had never been enacted. 

19 SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT 

20 (CCA) PROGRAM. 

21 Section 1860C–1 of the Social Security Act (42 

22 U.S.C. 1395w–29), as added by section 241(a) of the 

23 Medicare Prescription Drug, Improvement, and Mod24 ernization Act of 2003 (Public Law 108–173), is repealed. 


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1 SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION. 

2 (a) IN GENERAL.—Subsection (d)(3) of section 5007 

3 of the Deficit Reduction Act of 2005 (Public Law 109– 

4 171) is amended by inserting ‘‘(or September 30, 2011, 

5 in the case of a demonstration project in operation as of 

6 October 1, 2008)’’ after ‘‘December 31, 2009’’. 

7 (b) FUNDING.— 

8 (1) IN GENERAL.—Subsection (f)(1) of such 

9 section is amended by inserting ‘‘and for fiscal year 

10 2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 

11 (2) AVAILABILITY.—Subsection (f)(2) of such 

12 section is amended by striking ‘‘2010’’ and inserting 

13 ‘‘2014 or until expended’’. 

14 (c) REPORTS.— 

15 (1) QUALITY IMPROVEMENT AND SAVINGS.— 

16 Subsection (e)(3) of such section is amended by 

17 striking ‘‘December 1, 2008’’ and inserting ‘‘March 

18 31, 2011’’. 

19 (2) FINAL REPORT.—Subsection (e)(4) of such 

20 section is amended by striking ‘‘May 1, 2010’’ and 

21 inserting ‘‘March 31, 2013’’. 


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1 SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITA2 TION PROGRAMS FOR FAMILIES WITH YOUNG 

3 CHILDREN AND FAMILIES EXPECTING CHIL4 DREN. 

5 Part B of title IV of the Social Security Act (42 

6 U.S.C. 621–629i) is amended by adding at the end the 

7 following: 

8 ‘‘Subpart 3—Support for Quality Home Visitation 

9 Programs 

10 ‘‘SEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES 

11 WITH YOUNG CHILDREN AND FAMILIES EX12 PECTING CHILDREN. 

13 ‘‘(a) PURPOSE.—The purpose of this section is to im14 prove the well-being, health, and development of children 

15 by enabling the establishment and expansion of high qual16 ity programs providing voluntary home visitation for fami17 lies with young children and families expecting children. 

18 ‘‘(b) GRANT APPLICATION.—A State that desires to 

19 receive a grant under this section shall submit to the Sec20 retary for approval, at such time and in such manner as 

21 the Secretary may require, an application for the grant 

22 that includes the following: 

23 ‘‘(1) DESCRIPTION OF HOME VISITATION PRO24 GRAMS.—A description of the high quality programs 

25 of home visitation for families with young children 

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1 ported by a grant made to the State under this sec2 tion, the outcomes the programs are intended to 

3 achieve, and the evidence supporting the effective4 ness of the programs. 

5 ‘‘(2) RESULTS OF NEEDS ASSESSMENT.—The 

6 results of a statewide needs assessment that de7 scribes— 

8 ‘‘(A) the number, quality, and capacity of 

9 home visitation programs for families with 

10 young children and families expecting children 

11 in the State; 

12 ‘‘(B) the number and types of families who 

13 are receiving services under the programs; 

14 ‘‘(C) the sources and amount of funding 

15 provided to the programs; 

16 ‘‘(D) the gaps in home visitation in the 

17 State, including identification of communities 

18 that are in high need of the services; and 

19 ‘‘(E) training and technical assistance ac20 tivities designed to achieve or support the goals 

21 of the programs. 

22 ‘‘(3) ASSURANCES.—Assurances from the State 

23 that— 

24 ‘‘(A) in supporting home visitation pro25 grams using funds provided under this section, 


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1 the State shall identify and prioritize serving 

2 communities that are in high need of such serv3 ices, especially communities with a high propor4 tion of low-income families or a high incidence 

5 of child maltreatment; 

6 ‘‘(B) the State will reserve 5 percent of the 

7 grant funds for training and technical assist8 ance to the home visitation programs using 

9 such funds; 

10 ‘‘(C) in supporting home visitation pro11 grams using funds provided under this section, 

12 the State will promote coordination and collabo13 ration with other home visitation programs (in14 cluding programs funded under title XIX) and 

15 with other child and family services, health 

16 services, income supports, and other related as17 sistance; 

18 ‘‘(D) home visitation programs supported 

19 using such funds will, when appropriate, pro20 vide referrals to other programs serving chil21 dren and families; and 

22 ‘‘(E) the State will comply with subsection 

23 (i), and cooperate with any evaluation con24 ducted under subsection (j). 


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1 ‘‘(4) OTHER INFORMATION.—Such other infor2 mation as the Secretary may require. 

3 ‘‘(c) ALLOTMENTS.— 

4 ‘‘(1) INDIAN TRIBES.—From the amount re5 served under subsection (l)(2) for a fiscal year, the 

6 Secretary shall allot to each Indian tribe that meets 

7 the requirement of subsection (d), if applicable, for 

8 the fiscal year the amount that bears the same ratio 

9 to the amount so reserved as the number of children 

10 in the Indian tribe whose families have income that 

11 does not exceed 200 percent of the poverty line bears 

12 to the total number of children in such Indian tribes 

13 whose families have income that does not exceed 200 

14 percent of the poverty line. 

15 ‘‘(2) STATES AND TERRITORIES.—From the 

16 amount appropriated under subsection (m) for a fis17 cal year that remains after making the reservations 

18 required by subsection (l), the Secretary shall allot 

19 to each State that is not an Indian tribe and that 

20 meets the requirement of subsection (d), if applica21 ble, for the fiscal year the amount that bears the 

22 same ratio to the remainder of the amount so appro23 priated as the number of children in the State whose 

24 families have income that does not exceed 200 per25 cent of the poverty line bears to the total number of 


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1 children in such States whose families have income 

2 that does not exceed 200 percent of the poverty line. 

3 ‘‘(3) REALLOTMENTS.—The amount of any al4 lotment to a State under a paragraph of this sub5 section for any fiscal year that the State certifies to 

6 the Secretary will not be expended by the State pur7 suant to this section shall be available for reallot8 ment using the allotment methodology specified in 

9 that paragraph. Any amount so reallotted to a State 

10 is deemed part of the allotment of the State under 

11 this subsection. 

12 ‘‘(d) MAINTENANCE OF EFFORT.—Beginning with 

13 fiscal year 2011, a State meets the requirement of this 

14 subsection for a fiscal year if the Secretary finds that the 

15 aggregate expenditures by the State from State and local 

16 sources for programs of home visitation for families with 

17 young children and families expecting children for the then 

18 preceding fiscal year was not less than 100 percent of such 

19 aggregate expenditures for the then 2nd preceding fiscal 

20 year. 

21 ‘‘(e) PAYMENT OF GRANT.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall make a 

23 grant to each State that meets the requirements of 

24 subsections (b) and (d), if applicable, for a fiscal 

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1 section (m), in an amount equal to the reimbursable 

2 percentage of the eligible expenditures of the State 

3 for the fiscal year, but not more than the amount 

4 allotted to the State under subsection (c) for the fis5 cal year. 

6 ‘‘(2) REIMBURSABLE PERCENTAGE DEFINED.— 

7 In paragraph (1), the term ‘reimbursable percent8 age’ means, with respect to a fiscal year— 

9 ‘‘(A) 85 percent, in the case of fiscal year 

10 2010; 

11 ‘‘(B) 80 percent, in the case of fiscal year 

12 2011; or 

13 ‘‘(C) 75 percent, in the case of fiscal year 

14 2012 and any succeeding fiscal year. 

15 ‘‘(f) ELIGIBLE EXPENDITURES.— 

16 ‘‘(1) IN GENERAL.—In this section, the term 

17 ‘eligible expenditures’— 

18 ‘‘(A) means expenditures to provide vol19 untary home visitation for as many families 

20 with young children (under the age of school 

21 entry) and families expecting children as prac22 ticable, through the implementation or expan23 sion of high quality home visitation programs 

24 that— 


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1 ‘‘(i) adhere to clear evidence-based 

2 models of home visitation that have dem3 onstrated positive effects on important pro4 gram-determined child and parenting out5 comes, such as reducing abuse and neglect 

6 and improving child health and develop7 ment; 

8 ‘‘(ii) employ well-trained and com9 petent staff, maintain high quality super10 vision, provide for ongoing training and 

11 professional development, and show strong 

12 organizational capacity to implement such 

13 a program; 

14 ‘‘(iii) establish appropriate linkages 

15 and referrals to other community resources 

16 and supports; 

17 ‘‘(iv) monitor fidelity of program im18 plementation to ensure that services are 

19 delivered according to the specified model; 

20 and 

21 ‘‘(v) provide parents with— 

22 ‘‘(I) knowledge of age-appro23 priate child development in cognitive, 

24 language, social, emotional, and motor 

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1 ond language acquisition, in the case 

2 of English language learners); 

3 ‘‘(II) knowledge of realistic ex4 pectations of age-appropriate child be5 haviors; 

6 ‘‘(III) knowledge of health and 

7 wellness issues for children and par8 ents; 

9 ‘‘(IV) modeling, consulting, and 

10 coaching on parenting practices; 

11 ‘‘(V) skills to interact with their 

12 child to enhance age-appropriate de13 velopment; 

14 ‘‘(VI) skills to recognize and seek 

15 help for issues related to health, devel16 opmental delays, and social, emo17 tional, and behavioral skills; and 

18 ‘‘(VII) activities designed to help 

19 parents become full partners in the 

20 education of their children; 

21 ‘‘(B) includes expenditures for training, 

22 technical assistance, and evaluations related to 

23 the programs; and 

24 ‘‘(C) does not include any expenditure with 

25 respect to which a State has submitted a claim 


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1 for payment under any other provision of Fed2 eral law. 

3 ‘‘(2) PRIORITY FUNDING FOR PROGRAMS WITH

4 STRONGEST EVIDENCE.— 

5 ‘‘(A) IN GENERAL.—The expenditures, de6 scribed in paragraph (1), of a State for a fiscal 

7 year that are attributable to the cost of pro8 grams that do not adhere to a model of home 

9 visitation with the strongest evidence of effec10 tiveness shall not be considered eligible expendi11 tures for the fiscal year to the extent that the 

12 total of the expenditures exceeds the applicable 

13 percentage for the fiscal year of the allotment 

14 of the State under subsection (c) for the fiscal 

15 year. 

16 ‘‘(B) APPLICABLE PERCENTAGE DE17 FINED.—In subparagraph (A), the term ‘appli18 cable percentage’ means, with respect to a fiscal 

19 year— 

20 ‘‘(i) 60 percent for fiscal year 2010; 

21 ‘‘(ii) 55 percent for fiscal year 2011; 

22 ‘‘(iii) 50 percent for fiscal year 2012; 

23 ‘‘(iv) 45 percent for fiscal year 2013; 

24 or 

25 ‘‘(v) 40 percent for fiscal year 2014. 


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1 ‘‘(g) NO USE OF OTHER FEDERAL FUNDS FOR

2 STATE MATCH.—A State to which a grant is made under 

3 this section may not expend any Federal funds to meet 

4 the State share of the cost of an eligible expenditure for 

5 which the State receives a payment under this section. 

6 ‘‘(h) WAIVER AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—The Secretary may waive 

8 or modify the application of any provision of this 

9 section, other than subsection (b) or (f), to an In10 dian tribe if the failure to do so would impose an 

11 undue burden on the Indian tribe. 

12 ‘‘(2) SPECIAL RULE.—An Indian tribe is 

13 deemed to meet the requirement of subsection (d) 

14 for purposes of subsections (c) and (e) if— 

15 ‘‘(A) the Secretary waives the requirement; 

16 or 

17 ‘‘(B) the Secretary modifies the require18 ment, and the Indian tribe meets the modified 

19 requirement. 

20 ‘‘(i) STATE REPORTS.—Each State to which a grant 

21 is made under this section shall submit to the Secretary 

22 an annual report on the progress made by the State in 

23 addressing the purposes of this section. Each such report 

24 shall include a description of— 


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1 ‘‘(1) the services delivered by the programs that 

2 received funds from the grant; 

3 ‘‘(2) the characteristics of each such program, 

4 including information on the service model used by 

5 the program and the performance of the program; 

6 ‘‘(3) the characteristics of the providers of serv7 ices through the program, including staff qualifica8 tions, work experience, and demographic characteris9 tics; 

10 ‘‘(4) the characteristics of the recipients of serv11 ices provided through the program, including the 

12 number of the recipients, the demographic charac13 teristics of the recipients, and family retention; 

14 ‘‘(5) the annual cost of implementing the pro15 gram, including the cost per family served under the 

16 program; 

17 ‘‘(6) the outcomes experienced by recipients of 

18 services through the program; 

19 ‘‘(7) the training and technical assistance pro20 vided to aid implementation of the program, and 

21 how the training and technical assistance contrib22 uted to the outcomes achieved through the program; 

23 ‘‘(8) the indicators and methods used to mon24 itor whether the program is being implemented as 

25 designed; and 


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1 ‘‘(9) other information as determined necessary 

2 by the Secretary. 

3 ‘‘(j) EVALUATION.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall, by 

5 grant or contract, provide for the conduct of an 

6 independent evaluation of the effectiveness of home 

7 visitation programs receiving funds provided under 

8 this section, which shall examine the following: 

9 ‘‘(A) The effect of home visitation pro10 grams on child and parent outcomes, including 

11 child maltreatment, child health and develop12 ment, school readiness, and links to community 

13 services. 

14 ‘‘(B) The effectiveness of home visitation 

15 programs on different populations, including 

16 the extent to which the ability of programs to 

17 improve outcomes varies across programs and 

18 populations. 

19 ‘‘(2) REPORTS TO THE CONGRESS.— 

20 ‘‘(A) INTERIM REPORT.—Within 3 years 

21 after the date of the enactment of this section, 

22 the Secretary shall submit to the Congress an 

23 interim report on the evaluation conducted pur24 suant to paragraph (1). 


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1 ‘‘(B) FINAL REPORT.—Within 5 years 

2 after the date of the enactment of this section, 

3 the Secretary shall submit to the Congress a 

4 final report on the evaluation conducted pursu5 ant to paragraph (1). 

6 ‘‘(k) ANNUAL REPORTS TO THE CONGRESS.—The 

7 Secretary shall submit annually to the Congress a report 

8 on the activities carried out using funds made available 

9 under this section, which shall include a description of the 

10 following: 

11 ‘‘(1) The high need communities targeted by 

12 States for programs carried out under this section. 

13 ‘‘(2) The service delivery models used in the 

14 programs receiving funds provided under this sec15 tion. 

16 ‘‘(3) The characteristics of the programs, in17 cluding— 

18 ‘‘(A) the qualifications and demographic 

19 characteristics of program staff; and 

20 ‘‘(B) recipient characteristics including the 

21 number of families served, the demographic 

22 characteristics of the families served, and fam23 ily retention and duration of services. 

24 ‘‘(4) The outcomes reported by the programs. 


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1 ‘‘(5) The research-based instruction, materials, 

2 and activities being used in the activities funded 

3 under the grant. 

4 ‘‘(6) The training and technical activities, in5 cluding on-going professional development, provided 

6 to the programs. 

7 ‘‘(7) The annual costs of implementing the pro8 grams, including the cost per family served under 

9 the programs. 

10 ‘‘(8) The indicators and methods used by States 

11 to monitor whether the programs are being been im12 plemented as designed. 

13 ‘‘(l) RESERVATIONS OF FUNDS.—From the amounts 

14 appropriated for a fiscal year under subsection (m), the 

15 Secretary shall reserve— 

16 ‘‘(1) an amount equal to 5 percent of the 

17 amounts to pay the cost of the evaluation provided 

18 for in subsection (j), and the provision to States of 

19 training and technical assistance, including the dis20 semination of best practices in early childhood home 

21 visitation; and 

22 ‘‘(2) after making the reservation required by 

23 paragraph (1), an amount equal to 3 percent of the 

24 amount so appropriated, to pay for grants to Indian 

25 tribes under this section. 


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1 ‘‘(m) APPROPRIATIONS.—Out of any money in the 

2 Treasury of the United States not otherwise appropriated, 

3 there is appropriated to the Secretary to carry out this 

4 section— 

5 ‘‘(1) $50,000,000 for fiscal year 2010; 

6 ‘‘(2) $100,000,000 for fiscal year 2011; 

7 ‘‘(3) $150,000,000 for fiscal year 2012; 

8 ‘‘(4) $200,000,000 for fiscal year 2013; and 

9 ‘‘(5) $250,000,000 for fiscal year 2014. 

10 ‘‘(n) INDIAN TRIBES TREATED AS STATES.—In this 

11 section, paragraphs (4), (5), and (6) of section 431(a) 

12 shall apply.’’. 

13 SEC. 1905. IMPROVED COORDINATION AND PROTECTION 

14 FOR DUAL ELIGIBLES. 

15 Title XI of the Social Security Act is amended by 

16 inserting after section 1150 the following new section: 

17 ‘‘IMPROVED COORDINATION AND PROTECTION FOR DUAL

18 ELIGIBLES

19 ‘‘SEC. 1150A. (a) IN GENERAL.—The Secretary shall 

20 provide, through an identifiable office or program within 

21 the Centers for Medicare & Medicaid Services, for a fo22 cused effort to provide for improved coordination between 

23 Medicare and Medicaid and protection in the case of dual 

24 eligibles (as defined in subsection (e)). The office or pro25 gram shall— 


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1 ‘‘(1) review Medicare and Medicaid policies re2 lated to enrollment, benefits, service delivery, pay3 ment, and grievance and appeals processes under 

4 parts A and B of title XVIII, under the Medicare 

5 Advantage program under part C of such title, and 

6 under title XIX; 

7 ‘‘(2) identify areas of such policies where better 

8 coordination and protection could improve care and 

9 costs; and 

10 ‘‘(3) issue guidance to States regarding improv11 ing such coordination and protection. 

12 ‘‘(b) ELEMENTS.—The improved coordination and 

13 protection under this section shall include efforts— 

14 ‘‘(1) to simplify access of dual eligibles to bene15 fits and services under Medicare and Medicaid; 

16 ‘‘(2) to improve care continuity for dual eligi17 bles and ensure safe and effective care transitions; 

18 ‘‘(3) to harmonize regulatory conflicts between 

19 Medicare and Medicaid rules with regard to dual eli20 gibles; and 

21 ‘‘(4) to improve total cost and quality perform22 ance under Medicare and Medicaid for dual eligibles. 

23 ‘‘(c) RESPONSIBILITIES.—In carrying out this sec24 tion, the Secretary shall provide for the following: 


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1 ‘‘(1) An examination of Medicare and Medicaid 

2 payment systems to develop strategies to foster more 

3 integrated and higher quality care. 

4 ‘‘(2) Development of methods to facilitate ac5 cess to post-acute and community-based services and 

6 to identify actions that could lead to better coordina7 tion of community-based care. 

8 ‘‘(3) A study of enrollment of dual eligibles in 

9 the Medicare Savings Program (as defined in section 

10 1144(c)(7)), under Medicaid, and in the low-income 

11 subsidy program under section 1860D–14 to identify 

12 methods to more efficiently and effectively reach and 

13 enroll dual eligibles. 

14 ‘‘(4) An assessment of communication strate15 gies for dual eligibles to determine whether addi16 tional informational materials or outreach is needed, 

17 including an assessment of the Medicare website, 1– 

18 800–MEDICARE, and the Medicare handbook. 

19 ‘‘(5) Research and evaluation of areas where 

20 service utilization, quality, and access to cost sharing 

21 protection could be improved and an assessment of 

22 factors related to enrollee satisfaction with services 

23 and care delivery. 

24 ‘‘(6) Collection (and making available to the 

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1 gibility, benefit and cost-sharing assistance available 

2 to dual eligibles by State. 

3 ‘‘(7) Monitoring total combined Medicare and 

4 Medicaid program costs in serving dual eligibles and 

5 making recommendations for optimizing total quality 

6 and cost performance across both programs. 

7 ‘‘(8) Coordination of activities relating to Medi8 care Advantage plans under 1859(b)(6)(B)(ii) and 

9 Medicaid. 

10 ‘‘(d) PERIODIC REPORTS.—Not later than 1 year 

11 after the date of the enactment of this section and every 

12 3 years thereafter the Secretary shall submit to Congress 

13 a report on progress in activities conducted under this sec14 tion. 

15 ‘‘(e) DEFINITIONS.—In this section: 

16 ‘‘(1) DUAL ELIGIBLE.—The term ‘dual eligible’ 

17 means an individual who is dually eligible for bene18 fits under title XVIII, and medical assistance under 

19 title XIX, including such individuals who are eligible 

20 for benefits under the Medicare Savings Program 

21 (as defined in section 1144(c)(7)). 

22 ‘‘(2) MEDICARE; MEDICAID.—The terms ‘Medi23 care’ and ‘Medicaid’ mean the programs under titles 

24 XVIII and XIX, respectively.’’. 


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1 DIVISION C—PUBLIC HEALTH 

2 AND WORKFORCE DEVELOP3 MENT 

4 SEC. 2001. TABLE OF CONTENTS; REFERENCES. 

5 (a) TABLE OF CONTENTS.—The table of contents of 

6 this division is as follows: 

Sec. 2001. Table of contents; references. 

Sec. 2002. Public Health Investment Fund. 

TITLE I—COMMUNITY HEALTH CENTERS 

Sec. 2101. Increased funding. 

TITLE II—WORKFORCE 

Subtitle A—Primary Care Workforce 

PART 1—NATIONAL HEALTH SERVICE CORPS

Sec. 2201. National Health Service Corps. 

Sec. 2202. Authorizations of appropriations. 

PART 2—PROMOTION OF PRIMARY CARE AND DENTISTRY

Sec. 2211. Frontline health providers. 

‘‘SUBPART XI—HEALTH PROFESSIONAL NEEDS AREAS

‘‘Sec. 340H. In general. 

‘‘Sec. 340I. Loan repayments. 

‘‘Sec. 340J. Report. 

‘‘Sec. 340K. Allocation. 

Sec. 2212. Primary care student loan funds. 

Sec. 2213. Training in family medicine, general internal medicine, general pediatrics, geriatrics, and physician assistantship. 

Sec. 2214. Training of medical residents in community-based settings. 

Sec. 2215. Training for general, pediatric, and public health dentists and dental 

hygienists. 

Sec. 2216. Authorization of appropriations. 

Subtitle B—Nursing Workforce 

Sec. 2221. Amendments to Public Health Service Act. 

Subtitle C—Public Health Workforce 

Sec. 2231. Public Health Workforce Corps. 

‘‘SUBPART XII—PUBLIC HEALTH WORKFORCE

‘‘Sec. 340L. Public Health Workforce Corps. 


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‘‘Sec. 340M. Public Health Workforce Scholarship Program. 

‘‘Sec. 340N. Public Health Workforce Loan Repayment Program. 

Sec. 2232. Enhancing the public health workforce. 

Sec. 2233. Public health training centers. 

Sec. 2234. Preventive medicine and public health training grant program. 

Sec. 2235. Authorization of appropriations. 

Subtitle D—Adapting Workforce to Evolving Health System Needs 

PART 1—HEALTH PROFESSIONS TRAINING FOR DIVERSITY

Sec. 2241. Scholarships for disadvantaged students, loan repayments and fellowships regarding faculty positions, and educational assistance 

in the health professions regarding individuals from disadvantaged backgrounds. 

Sec. 2242. Nursing workforce diversity grants. 

Sec. 2243. Coordination of diversity and cultural competency programs. 

PART 2—INTERDISCIPLINARY TRAINING PROGRAMS

Sec. 2251. Cultural and linguistic competency training for health care professionals. 

Sec. 2252. Innovations in interdisciplinary care training. 

PART 3—ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION AND

ASSESSMENT

Sec. 2261. Health workforce evaluation and assessment. 

PART 4—HEALTH WORKFORCE ASSESSMENT

Sec. 2271. Health workforce assessment. 

PART 5—AUTHORIZATION OF APPROPRIATIONS

Sec. 2281. Authorization of appropriations. 

TITLE III—PREVENTION AND WELLNESS 

Sec. 2301. Prevention and wellness. 

‘‘TITLE XXXI—PREVENTION AND WELLNESS 

‘‘Subtitle A—Prevention and Wellness Trust 

‘‘Sec. 3111. Prevention and Wellness Trust. 

‘‘Subtitle B—National Prevention and Wellness Strategy 

‘‘Sec. 3121. National Prevention and Wellness Strategy. 

‘‘Subtitle C—Prevention Task Forces 

‘‘Sec. 3131. Task Force on Clinical Preventive Services. 

‘‘Sec. 3132. Task Force on Community Preventive Services. 

‘‘Subtitle D—Prevention and Wellness Research 

‘‘Sec. 3141. Prevention and wellness research activity coordination. 

‘‘Sec. 3142. Community prevention and wellness research grants. 


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‘‘Subtitle E—Delivery of Community Prevention and Wellness Services 

‘‘Sec. 3151. Community prevention and wellness services grants. 

‘‘Subtitle F—Core Public Health Infrastructure 

‘‘Sec. 3161. Core public health infrastructure for State, local, and tribal 

health departments. 

‘‘Sec. 3162. Core public health infrastructure and activities for CDC. 

‘‘Subtitle G—General Provisions 

‘‘Sec. 3171. Definitions. 

TITLE IV—QUALITY AND SURVEILLANCE 

Sec. 2401. Implementation of best practices in the delivery of health care. 

Sec. 2402. Assistant Secretary for Health Information. 

Sec. 2403. Authorization of appropriations. 

TITLE V—OTHER PROVISIONS 

Subtitle A—Drug Discount for Rural and Other Hospitals 

Sec. 2501. Expanded participation in 340B program. 

Sec. 2502. Extension of discounts to inpatient drugs. 

Sec. 2503. Effective date. 

Subtitle B—School-Based Health Clinics 

Sec. 2511. School-based health clinics. 

Subtitle C—National Medical Device Registry 

Sec. 2521. National medical device registry. 

Subtitle D—Grants for Comprehensive Programs To Provide Education to 

Nurses and Create a Pipeline to Nursing 

Sec. 2531. Establishment of grant program. 

Subtitle E—States Failing To Adhere to Certain Employment Obligations 

Sec. 2541. Limitation on Federal funds. 

1 (b) REFERENCES.—Except as otherwise specified, 

2 whenever in this division an amendment is expressed in 

3 terms of an amendment to a section or other provision, 

4 the reference shall be considered to be made to a section 

5 or other provision of the Public Health Service Act (42 

6 U.S.C. 201 et seq.). 


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1 SEC. 2002. PUBLIC HEALTH INVESTMENT FUND. 

2 (a) ESTABLISHMENT OF FUNDS.— 

3 (1) IN GENERAL.—There is established a fund 

4 to be known as the ‘‘Public Health Investment 

5 Fund’’ (referred to in this section as the ‘‘Fund’’). 

6 (2) FUNDING.— 

7 (A) There shall be deposited into the 

8 Fund— 

9 (i) for fiscal year 2010, 

10 $4,600,000,000; 

11 (ii) for fiscal year 2011, 

12 $5,600,000,000; 

13 (iii) for fiscal year 2012, 

14 $6,900,000,000; 

15 (iv) for fiscal year 2013, 

16 $7,800,000,000; 

17 (v) for fiscal year 2014, 

18 $9,000,000,000; 

19 (vi) for fiscal year 2015, 

20 $9,400,000,000; 

21 (vii) for fiscal year 2016, 

22 $10,100,000,000; 

23 (viii) for fiscal year 2017, 

24 $10,800,000,000; 

25 (ix) for fiscal year 2018, 

26 $11,800,000,000; and 


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1 (x) for fiscal year 2019, 

2 $12,700,000,000. 

3 (B) Amounts deposited into the Fund shall 

4 be derived from general revenues of the Treas5 ury. 

6 (b) AUTHORIZATION OF APPROPRIATIONS FROM THE

7 FUND.— 

8 (1) NEW FUNDING.— 

9 (A) IN GENERAL.—Amounts in the Fund 

10 are authorized to be appropriated by the Com11 mittees on Appropriations of the House of Rep12 resentatives and the Senate for carrying out ac13 tivities under designated public health provi14 sions. 

15 (B) DESIGNATED PROVISIONS.—For pur16 poses of this paragraph, the term ‘‘designated 

17 public health provisions’’ means the provisions 

18 for which amounts are authorized to be appro19 priated under section 330(s), 338(c), 338H–1, 

20 799C, 872, or 3111 of the Public Health Serv21 ice Act, as added by this division. 

22 (2) BASELINE FUNDING.— 

23 (A) IN GENERAL.—Amounts in the Fund 

24 are authorized to be appropriated (as described 

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1 cluding any amounts in or appropriated from 

2 the Fund)— 

3 (i) the amounts specified in subpara4 graph (B) for the fiscal year involved are 

5 equal to or greater than the amounts spec6 ified in subparagraph (B) for fiscal year 

7 2008; and 

8 (ii) the amounts appropriated, out of 

9 the general fund of the Treasury, to the 

10 Prevention and Wellness Trust under sec11 tion 3111 of the Public Health Service 

12 Act, as added by this division, for the fis13 cal year involved are equal to or greater 

14 than the funds— 

15 (I) appropriated under the head16 ing ‘‘Prevention and Wellness Fund’’ 

17 in title VIII of division A of the Amer18 ican Recovery and Reinvestment Act 

19 of 2009 (Public Law 111–5); and 

20 (II) allocated by the second pro21 viso under such heading for evidence22 based clinical and community-based 

23 prevention and wellness strategies. 

24 (B) AMOUNTS SPECIFIED.—The amounts 

25 specified in this subparagraph, with respect to 


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1 a fiscal year, are the amounts appropriated for 

2 the following: 

3 (i) Community health centers (includ4 ing funds appropriated under the authority 

5 of section 330 of the Public Health Service 

6 Act (42 U.S.C. 254b)). 

7 (ii) The National Health Service 

8 Corps Program (including funds appro9 priated under the authority of section 338 

10 of such Act (42 U.S.C. 254k)). 

11 (iii) The National Health Service 

12 Corps Scholarship and Loan Repayment 

13 Programs (including funds appropriated 

14 under the authority of section 338H of 

15 such Act (42 U.S.C. 254q)). 

16 (iv) Primary care loan funds (includ17 ing funds appropriated for schools of medi18 cine or osteopathic medicine under the au19 thority of section 735(f) of such Act (42 

20 U.S.C. 292y(f))). 

21 (v) Primary care education programs 

22 (including funds appropriated under the 

23 authority of sections 736, 740, 741, and 

24 747 of such Act (42 U.S.C. 293, 293d, 

25 and 293k)). 


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1 (vi) Sections 761 and 770 of such Act 

2 (42 U.S.C. 294n and 295e). 

3 (vii) Nursing workforce development 

4 (including funds appropriated under the 

5 authority of title VIII of such Act (42 

6 U.S.C. 296 et seq.)). 

7 (viii) The National Center for Health 

8 Statistics (including funds appropriated 

9 under the authority of sections 304, 306, 

10 307, and 308 of such Act (42 U.S.C. 

11 242b, 242k, 242l, and 242m)). 

12 (ix) The Agency for Healthcare Re13 search and Quality (including funds appro14 priated under the authority of title IX of 

15 such Act (42 U.S.C. 299 et seq.)). 

16 (3) BUDGETARY IMPLICATIONS.—Amounts ap17 propriated under this section, and outlays flowing 

18 from such appropriations, shall not be taken into ac19 count for purposes of any budget enforcement proce20 dures including allocations under section 302(a) and 

21 (b) of the Balanced Budget and Emergency Deficit 

22 Control Act and budget resolutions for fiscal years 

23 during which appropriations are made from the 

24 Fund. 


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1 TITLE I—COMMUNITY HEALTH 

2 CENTERS 

3 SEC. 2101. INCREASED FUNDING. 

4 Section 330 of the Public Health Service Act (42 

5 U.S.C. 254b) is amended— 

6 (1) in subsection (r)(1)— 

7 (A) in subparagraph (D), by striking 

8 ‘‘and’’ at the end; 

9 (B) in subparagraph (E), by striking the 

10 period at the end and inserting ‘‘; and’’; and 

11 (C) by inserting at the end the following: 

12 ‘‘(F) Such sums as may be necessary for 

13 each of fiscal years 2013 and 2019.’’; and 

14 (2) by inserting after subsection (r) the fol15 lowing: 

16 ‘‘(s) ADDITIONAL FUNDING.—For the purpose of 

17 carrying out this section, in addition to any other amounts 

18 authorized to be appropriated for such purpose, there are 

19 authorized to be appropriated, out of any monies in the 

20 Public Health Investment Fund, the following: 

21 ‘‘(1) For fiscal year 2010, $1,000,000,000. 

22 ‘‘(2) For fiscal year 2011, $1,500,000,000. 

23 ‘‘(3) For fiscal year 2012, $2,500,000,000. 

24 ‘‘(4) For fiscal year 2013, $3,000,000,000. 

25 ‘‘(5) For fiscal year 2014, $4,000,000,000. 


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1 ‘‘(6) For fiscal year 2015, $4,400,000,000. 

2 ‘‘(7) For fiscal year 2016, $4,800,000,000. 

3 ‘‘(8) For fiscal year 2017, $5,300,000,000. 

4 ‘‘(9) For fiscal year 2018, $5,900,000,000. 

5 ‘‘(10) For fiscal year 2019, $6,400,000,000.’’. 

6 TITLE II—WORKFORCE 

7 Subtitle A—Primary Care 

8 Workforce 

9 PART 1—NATIONAL HEALTH SERVICE CORPS 

10 SEC. 2201. NATIONAL HEALTH SERVICE CORPS. 

11 (a) FULFILLMENT OF OBLIGATED SERVICE RE12 QUIREMENT THROUGH HALF-TIME SERVICE.— 

13 (1) WAIVERS.—Subsection (i) of section 331 

14 (42 U.S.C. 254d) is amended— 

15 (A) in paragraph (1), by striking ‘‘In car16 rying out subpart III’’ and all that follows 

17 through the period and inserting ‘‘In carrying 

18 out subpart III, the Secretary may, in accord19 ance with this subsection, issue waivers to indi20 viduals who have entered into a contract for ob21 ligated service under the Scholarship Program 

22 or the Loan Repayment Program under which 

23 the individuals are authorized to satisfy the re24 quirement of obligated service through pro25 viding clinical practice that is half-time.’’; 


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1 (B) in paragraph (2)— 

2 (i) in subparagraphs (A)(ii) and (B), 

3 by striking ‘‘less than full time’’ each place 

4 it appears and inserting ‘‘half time’’; 

5 (ii) in subparagraphs (C) and (F), by 

6 striking ‘‘less than full-time service’’ each 

7 place it appears and inserting ‘‘half-time 

8 service’’; and 

9 (iii) by amending subparagraphs (D) 

10 and (E) to read as follows: 

11 ‘‘(D) the entity and the Corps member agree in 

12 writing that the Corps member will perform half13 time clinical practice; 

14 ‘‘(E) the Corps member agrees in writing to 

15 fulfill all of the service obligations under section 

16 338C through half-time clinical practice and ei17 ther— 

18 ‘‘(i) double the period of obligated service; 

19 or 

20 ‘‘(ii) in the case of contracts entered into 

21 under section 338B, accept a minimum service 

22 obligation of 2 years with an award amount 

23 equal to 50 percent of the amount that would 

24 otherwise be payable for full-time service; and’’; 

25 and 


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1 (C) in paragraph (3), by striking ‘‘In eval2 uating a demonstration project described in 

3 paragraph (1)’’ and inserting ‘‘In evaluating 

4 waivers issued under paragraph (1)’’. 

5 (2) DEFINITIONS.—Subsection (j) of section 

6 331 (42 U.S.C. 254d) is amended by adding at the 

7 end the following: 

8 ‘‘(5) The terms ‘full time’ and ‘full-time’ mean 

9 a minimum of 40 hours per week in a clinical prac10 tice, for a minimum of 45 weeks per year. 

11 ‘‘(6) The terms ‘half time’ and ‘half-time’ mean 

12 a minimum of 20 hours per week (not to exceed 39 

13 hours per week) in a clinical practice, for a min14 imum of 45 weeks per year.’’. 

15 (b) REAPPOINTMENT TO NATIONAL ADVISORY COUN16 CIL.—Section 337(b)(1) (42 U.S.C. 254j(b)(1)) is amend17 ed by striking ‘‘Members may not be reappointed to the 

18 Council.’’. 

19 (c) LOAN REPAYMENT AMOUNT.—Section 

20 338B(g)(2)(A) is amended (42 U.S.C. 254l–1(g)(2)(A)) 

21 by striking ‘‘$35,000’’ and inserting ‘‘$50,000, plus, be22 ginning with fiscal year 2012, an amount determined by 

23 the Secretary on an annual basis to reflect inflation,’’. 

24 (d) TREATMENT OF TEACHING AS OBLIGATED SERV25 ICE.—Subsection (a) of section 338C (42 U.S.C. 254m) 


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1 is amended by adding at the end the following: ‘‘The Sec2 retary may treat teaching as clinical practice for up to 

3 20 percent of such period of obligated service.’’. 

4 SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS. 

5 (a) NATIONAL HEALTH SERVICE CORPS PRO6 GRAM.—Section 338 (42 U.S.C. 254k) is amended— 

7 (1) in subsection (a), by striking ‘‘2012’’ and 

8 inserting ‘‘2019’’; and 

9 (2) by adding at the end the following: 

10 ‘‘(c) For the purpose of carrying out this subpart, 

11 in addition to any other amounts authorized to be appro12 priated for such purpose, there are authorized to be appro13 priated, out of any monies in the Public Health Invest14 ment Fund, the following: 

15 ‘‘(1) $63,000,000 for fiscal year 2010. 

16 ‘‘(2) $66,000,000 for fiscal year 2011. 

17 ‘‘(3) $70,000,000 for fiscal year 2012. 

18 ‘‘(4) $73,000,000 for fiscal year 2013. 

19 ‘‘(5) $77,000,000 for fiscal year 2014. 

20 ‘‘(6) $81,000,000 for fiscal year 2015. 

21 ‘‘(7) $85,000,000 for fiscal year 2016. 

22 ‘‘(8) $89,000,000 for fiscal year 2017. 

23 ‘‘(9) $94,000,000 for fiscal year 2018. 

24 ‘‘(10) $98,000,000 for fiscal year 2019.’’. 


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1 (b) SCHOLARSHIP AND LOAN REPAYMENT PRO2 GRAMS.—Subpart III of part D of title III of the Public 

3 Health Service Act (42 U.S.C. 254l et seq.) is amended— 

4 (1) in section 338H(a)— 

5 (A) in paragraph (4), by striking ‘‘and’’ at 

6 the end; 

7 (B) in paragraph (5), by striking the pe8 riod at the end and inserting ‘‘; and’’; and 

9 (C) by adding at the end the following: 

10 ‘‘(6) for fiscal years 2013 and 2019, such sums 

11 as may be necessary.’’; and 

12 (2) by inserting after section 338H the fol13 lowing: 

14 ‘‘SEC. 338H–1. ADDITIONAL FUNDING. 

15 ‘‘For the purpose of carrying out this subpart, in ad16 dition to any other amounts authorized to be appropriated 

17 for such purpose, there are authorized to be appropriated, 

18 out of any monies in the Public Health Investment Fund, 

19 the following: 

20 ‘‘(1) $254,000,000 for fiscal year 2010. 

21 ‘‘(2) $266,000,000 for fiscal year 2011. 

22 ‘‘(3) $278,000,000 for fiscal year 2012. 

23 ‘‘(4) $292,000,000 for fiscal year 2013. 

24 ‘‘(5) $306,000,000 for fiscal year 2014. 

25 ‘‘(6) $321,000,000 for fiscal year 2015. 


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1 ‘‘(7) $337,000,000 for fiscal year 2016. 

2 ‘‘(8) $354,000,000 for fiscal year 2017. 

3 ‘‘(9) $372,000,000 for fiscal year 2018. 

4 ‘‘(10) $391,000,000 for fiscal year 2019.’’. 

5 PART 2—PROMOTION OF PRIMARY CARE AND 

6 DENTISTRY 

7 SEC. 2211. FRONTLINE HEALTH PROVIDERS. 

8 Part D of title III (42 U.S.C. 254b et seq.) is amend9 ed by adding at the end the following: 

10 ‘‘Subpart XI—Health Professional Needs Areas 

11 ‘‘SEC. 340H. IN GENERAL. 

12 ‘‘(a) PROGRAM.—The Secretary, acting through the 

13 Administrator of the Health Resources and Services Ad14 ministration, shall establish a program, to be known as 

15 the Frontline Health Providers Loan Repayment Pro16 gram, to address unmet health care needs in health profes17 sional needs areas through loan repayments under section 

18 340I. 

19 ‘‘(b) DESIGNATION OF HEALTH PROFESSIONAL

20 NEEDS AREAS.— 

21 ‘‘(1) IN GENERAL.—In this subpart, the term 

22 ‘health professional needs area’ means an area, pop23 ulation, or facility that is designated by the Sec24 retary in accordance with paragraph (2). 


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1 ‘‘(2) DESIGNATION.—To be designated by the 

2 Secretary as a health professional needs area under 

3 this subpart: 

4 ‘‘(A) In the case of an area, the area must 

5 be a rational area for the delivery of health 

6 services. 

7 ‘‘(B) The area, population, or facility must 

8 have, in one or more health disciplines, special9 ties, or subspecialties for the population served, 

10 as determined by the Secretary— 

11 ‘‘(i) insufficient capacity of health 

12 professionals; or 

13 ‘‘(ii) high needs for health services. 

14 ‘‘(C) With respect to the delivery of pri15 mary health services, the area, population, or 

16 facility must not include a health professional 

17 shortage area (as designated under section 

18 332), except that the area, population, or facil19 ity may include such a health professional 

20 shortage area to which no member of the Na21 tional Health Service Corps is currently as22 signed. 

23 ‘‘(c) ELIGIBILITY.—To be eligible to participate in 

24 the Program, an individual shall— 


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1 ‘‘(1) hold a degree in a course of study or pro2 gram (approved by the Secretary) from a school de3 fined in section 799B(1)(A) (other than a school of 

4 public health); 

5 ‘‘(2) hold a degree in a course of study or pro6 gram (approved by the Secretary) from a school or 

7 program defined in subparagraph (C), (D), or 

8 (E)(4) of section 799B(1), as designated by the Sec9 retary; 

10 ‘‘(3) be enrolled as a full-time student— 

11 ‘‘(A) in a school or program defined in 

12 subparagraph (C), (D), or (E)(4) of section 

13 799B(1), as designated by the Secretary, or a 

14 school described in paragraph (1); and 

15 ‘‘(B) in the final year of a course of study 

16 or program, offered by such school or program 

17 and approved by the Secretary, leading to a de18 gree in a discipline referred to in subparagraph 

19 (A) (other than a graduate degree in public 

20 health), (C), (D), or (E)(4) of section 799B(1); 

21 ‘‘(4) be a practitioner described in section 

22 1842(b)(18)(C) or 1848(k)(3)(B)(iii) or (iv) of the 

23 Social Security Act; or 


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1 ‘‘(5) be a practitioner in the field of respiratory 

2 therapy, medical technology, or radiologic tech3 nology. 

4 ‘‘(d) DEFINITION.—In this subpart, the term ‘pri5 mary health services’ has the meaning given to such term 

6 in section 331(a)(3)(D). 

7 ‘‘SEC. 340I. LOAN REPAYMENTS. 

8 ‘‘(a) LOAN REPAYMENTS.—The Secretary, acting 

9 through the Administrator of the Health Resources and 

10 Services Administration, shall enter into contracts with in11 dividuals under which— 

12 ‘‘(1) the individual agrees— 

13 ‘‘(A) to serve as a full-time primary health 

14 services provider or as a full-time or part-time 

15 provider of other health services for a period of 

16 time equal to 2 years or such longer period as 

17 the individual may agree to; 

18 ‘‘(B) to serve in a health professional 

19 needs area in a health discipline, specialty, or a 

20 subspecialty for which the area, population, or 

21 facility is designated as a health professional 

22 needs area under section 340H; and 

23 ‘‘(C) in the case of an individual described 

24 in subsection 340H(c)(3) who is in the final 

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1 ment as primary health services provider or 

2 provider of other health services in accordance 

3 with subparagraphs (A) and (B), to complete 

4 the education or training and maintain an ac5 ceptable level of academic standing (as deter6 mined by the educational institution offering 

7 the course of study or training); and 

8 ‘‘(2) the Secretary agrees to pay, for each year 

9 of such service, an amount on the principal and in10 terest of the undergraduate or graduate educational 

11 loans (or both) of the individual that is not more 

12 than 50 percent of the average award made under 

13 the National Health Service Corps Loan Repayment 

14 Program under subpart III in that year. 

15 ‘‘(b) PRACTICE SETTING.—A contract entered into 

16 under this section shall allow the individual receiving the 

17 loan repayment to satisfy the service requirement de18 scribed in subsection (a)(1) through employment in a solo 

19 or group practice, a clinic, an accredited public or private 

20 nonprofit hospital, or any other health care entity, as 

21 deemed appropriate by the Secretary. 

22 ‘‘(c) APPLICATION OF CERTAIN PROVISIONS.—The 

23 provisions of subpart III of part D shall, except as incon24 sistent with this section, apply to the loan repayment pro25 gram under this subpart in the same manner and to the 


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1 same extent as such provisions apply to the National 

2 Health Service Corps Loan Repayment Program estab3 lished under section 338B. 

4 ‘‘(d) INSUFFICIENT NUMBER OF APPLICANTS.—If 

5 there are an insufficient number of applicants for loan re6 payments under this section to obligate all appropriated 

7 funds, the Secretary shall transfer the unobligated funds 

8 to the National Health Service Corps for the purpose of— 

9 ‘‘(1) recruitment of sufficient applicants for the 

10 National Health Service Corps for the following 

11 year; or 

12 ‘‘(2) making additional loan repayments under 

13 section 338B if there is an excess number of quali14 fied applicants for loan repayments under such sec15 tion. 

16 ‘‘SEC. 340J. REPORT. 

17 ‘‘The Secretary shall submit to the Congress an an18 nual report on the program carried out under this subpart. 

19 ‘‘SEC. 340K. ALLOCATION. 

20 ‘‘Of the amount of funds obligated under this subpart 

21 each fiscal year for loan repayments— 

22 ‘‘(1) 90 percent shall be for physicians and 

23 other health professionals providing primary health 

24 services; and 


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1 ‘‘(2) 10 percent shall be for health professionals 

2 not described in paragraph (1).’’. 

3 SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS. 

4 (a) LOAN PROVISIONS.—Section 722 (42 U.S.C. 

5 292r) is amended by striking subsection (e) and inserting 

6 the following: 

7 ‘‘(e) RATE OF INTEREST.—Such loans shall bear in8 terest, on the unpaid balance of the loan, computed only 

9 for periods for which the loan is repayable, at the rate 

10 of 2 percentage points less than the applicable rate of in11 terest described in section 427A(l)(1) of the Higher Edu12 cation Act of 1965 per year.’’. 

13 (b) MEDICAL SCHOOLS AND PRIMARY HEALTH

14 CARE.—Subsection (a) of section 723 (42 U.S.C. 292s) 

15 is amended— 

16 (1) in paragraph (1), by striking subparagraph 

17 (B) and inserting the following: 

18 ‘‘(B) to practice in such care for 10 years 

19 (including residency training in primary health 

20 care) or through the date on which the loan is 

21 repaid in full, whichever occurs first.’’; and 

22 (2) by striking paragraph (3) and inserting the 

23 following: 

24 ‘‘(3) NONCOMPLIANCE BY STUDENT.—If an in25 dividual fails to comply with an agreement entered 


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1 into pursuant to paragraph (1), such agreement 

2 shall provide that the total interest to be paid on the 

3 loan, over the course of the loan period, shall equal 

4 the total amount of interest that would have been in5 curred by the individual if, from the outset of the 

6 loan, the loan was repayable at the rate of interest 

7 described in section 427A(l)(1) of the Higher Edu8 cation Act of 1965 per year instead of the rate of 

9 interest described in section 722(e).’’. 

10 (c) STUDENT LOAN GUIDELINES.— 

11 (1) IN GENERAL.—Section 735 (42 U.S.C. 

12 292y) is amended— 

13 (A) by redesignating subsection (f) as sub14 section (g); and 

15 (B) by inserting after subsection (e) the 

16 following: 

17 ‘‘(f) DETERMINATION OF FINANCIAL NEED.—The 

18 Secretary— 

19 ‘‘(1) may require, or authorize a school or other 

20 entity to require, the submission of financial infor21 mation to determine the financial resources available 

22 to any individual seeking assistance under this sub23 part; and 

24 ‘‘(2) shall take into account the extent to which 

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1 mining whether to require or authorize the submis2 sion of such information regarding such individual’s 

3 family members.’’. 

4 (2) REVISED GUIDELINES.—The Secretary of 

5 Health and Human Services shall— 

6 (A) strike the second sentence of section 

7 57.206(b) of title 42, Code of Federal Regula8 tions; and 

9 (B) make such other revisions to guidelines 

10 and regulations in effect as of the date of the 

11 enactment of this Act as may be necessary for 

12 consistency with the amendments made by 

13 paragraph (1). 

14 SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL IN15 TERNAL MEDICINE, GENERAL PEDIATRICS, 

16 GERIATRICS, AND PHYSICIAN 

17 ASSISTANTSHIP. 

18 Section 747 (42 U.S.C. 293k) is amended— 

19 (1) by amending the section heading to read as 

20 follows: ‘‘PRIMARY CARE TRAINING AND EN21 HANCEMENT’’; 

22 (2) by redesignating subsection (e) as sub23 section (f); and 

24 (3) by striking subsections (a) through (d) and 

25 inserting the following: 


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1 ‘‘(a) PROGRAM.—The Secretary shall establish a pri2 mary care training and capacity building program con3 sisting of awarding grants and contracts under sub4 sections (b) and (c). 

5 ‘‘(b) SUPPORT AND DEVELOPMENT OF PRIMARY

6 CARE TRAINING PROGRAMS.— 

7 ‘‘(1) IN GENERAL.—The Secretary shall make 

8 grants to, or enter into contracts with, eligible enti9 ties— 

10 ‘‘(A) to plan, develop, operate, or partici11 pate in an accredited professional training pro12 gram, including an accredited residency or in13 ternship program, in the field of family medi14 cine, general internal medicine, general pediat15 rics, or geriatrics for medical students, interns, 

16 residents, or practicing physicians; 

17 ‘‘(B) to provide financial assistance in the 

18 form of traineeships and fellowships to medical 

19 students, interns, residents, or practicing physi20 cians, who are participants in any such pro21 gram, and who plan to specialize or work in 

22 family medicine, general internal medicine, gen23 eral pediatrics, or geriatrics; 

24 ‘‘(C) to plan, develop, operate, or partici25 pate in an accredited program for the training 


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1 of physicians who plan to teach in family medi2 cine, general internal medicine, general pediat3 rics, or geriatrics training programs including 

4 in community-based settings; 

5 ‘‘(D) to provide financial assistance in the 

6 form of traineeships and fellowships to prac7 ticing physicians who are participants in any 

8 such programs and who plan to teach in a fam9 ily medicine, general internal medicine, general 

10 pediatrics, or geriatrics training program; and 

11 ‘‘(E) to plan, develop, operate, or partici12 pate in an accredited program for physician as13 sistant education, and for the training of indi14 viduals who plan to teach in programs to pro15 vide such training. 

16 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

17 or contract under paragraph (1), an entity shall 

18 be— 

19 ‘‘(A) an accredited school of medicine or 

20 osteopathic medicine, public or nonprofit private 

21 hospital, or physician assistant training pro22 gram; 

23 ‘‘(B) a public or private nonprofit entity; 

24 or 


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1 ‘‘(C) a consortium of 2 or more entities de2 scribed in subparagraphs (A) and (B). 

3 ‘‘(c) CAPACITY BUILDING IN PRIMARY CARE.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall make 

5 grants to or enter into contracts with eligible entities 

6 to establish, maintain, or improve— 

7 ‘‘(A) academic administrative units (in8 cluding departments, divisions, or other appro9 priate units) in the specialties of family medi10 cine, general internal medicine, general pediat11 rics, or geriatrics; or 

12 ‘‘(B) programs that improve clinical teach13 ing in such specialties. 

14 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

15 or contract under paragraph (1), an entity shall be 

16 an accredited school of medicine or osteopathic med17 icine. 

18 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

19 under this section, the Secretary shall give preference to 

20 entities that have a demonstrated record of the following: 

21 ‘‘(1) Training the greatest percentage, or sig22 nificantly improving the percentage, of health care 

23 professionals who provide primary care. 


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1 ‘‘(2) Training individuals who are from under2 represented minority groups or disadvantaged back3 grounds. 

4 ‘‘(3) A high rate of placing graduates in prac5 tice settings having the principal focus of serving in 

6 underserved areas or populations experiencing health 

7 disparities (including serving patients eligible for 

8 medical assistance under title XIX of the Social Se9 curity Act or for child health assistance under title 

10 XXI of such Act or those with special health care 

11 needs). 

12 ‘‘(4) Supporting teaching programs that ad13 dress the health care needs of vulnerable popu14 lations. 

15 ‘‘(e) REPORT.—The Secretary shall submit to the 

16 Congress an annual report on the program carried out 

17 under this section. 

18 ‘‘(f) DEFINITION.—In this section, the term ‘health 

19 disparities’ has the meaning given the term in section 

20 3171.’’. 

21 SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMU22 NITY-BASED SETTINGS. 

23 Title VII (42 U.S.C. 292 et seq.) is amended— 

24 (1) by redesignating section 748 as 749A; and 

25 (2) by inserting after section 747 the following: 


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1 ‘‘SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMU2 NITY-BASED SETTINGS. 

3 ‘‘(a) PROGRAM.—The Secretary shall establish a pro4 gram for the training of medical residents in community5 based settings consisting of awarding grants or contracts 

6 under this section. 

7 ‘‘(b) DEVELOPMENT AND OPERATION OF COMMU8 NITY-BASED PROGRAMS.—The Secretary shall make 

9 grants to, or enter into contracts with, eligible entities— 

10 ‘‘(1) to plan and develop a new primary care 

11 residency training program, which may include— 

12 ‘‘(A) planning and developing curricula; 

13 ‘‘(B) recruiting and training residents and 

14 faculty; and 

15 ‘‘(C) other activities designated to result in 

16 accreditation of such a program; or 

17 ‘‘(2) to operate or participate in an established 

18 primary care residency training program, which may 

19 include— 

20 ‘‘(A) planning and developing curricula; 

21 ‘‘(B) recruitment and training of residents; 

22 and 

23 ‘‘(C) retention of faculty. 

24 ‘‘(c) ELIGIBLE ENTITY.—To be eligible to receive a 

25 grant or contract under subsection (b), an entity shall— 


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1 ‘‘(1) be designated as a recipient of payment 

2 for the direct costs of medical education under sec3 tion 1886(k) of the Social Security Act; 

4 ‘‘(2) be designated as an approved teaching 

5 health center under section 1502(d) of the America’s 

6 Affordable Health Choices Act of 2009 and con7 tinuing to participate in the demonstration project 

8 under such section; or 

9 ‘‘(3) be an applicant for designation described 

10 in paragraph (1) or (2) and have demonstrated to 

11 the Secretary appropriate involvement of an accred12 ited teaching hospital to carry out the inpatient re13 sponsibilities associated with a primary care resi14 dency training program. 

15 ‘‘(d) PREFERENCES.—In awarding grants and con16 tracts under paragraph (1) or (2) of subsection (b), the 

17 Secretary shall give preference to entities that— 

18 ‘‘(1) support teaching programs that address 

19 the health care needs of vulnerable populations; or 

20 ‘‘(2) are a Federally qualified health center (as 

21 defined in section 1861(aa)(4) of the Social Security 

22 Act) or a rural health clinic (as defined in section 

23 1861(aa)(2) of such Act). 

24 ‘‘(e) ADDITIONAL PREFERENCES FOR ESTABLISHED

25 PROGRAMS.—In awarding grants and contracts under 


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1 subsection (b)(2), the Secretary shall give preference to 

2 entities that have a demonstrated record of training— 

3 ‘‘(1) a high or significantly improved percentage 

4 of health care professionals who provide primary 

5 care; 

6 ‘‘(2) individuals who are from underrepresented 

7 minority groups or disadvantaged backgrounds; or 

8 ‘‘(3) individuals who practice in settings having 

9 the principal focus of serving underserved areas or 

10 populations experiencing health disparities (including 

11 serving patients eligible for medical assistance under 

12 title XIX of the Social Security Act or for child 

13 health assistance under title XXI of such Act or 

14 those with special health care needs). 

15 ‘‘(f) PERIOD OF AWARDS.— 

16 ‘‘(1) IN GENERAL.—The period of a grant or 

17 contract under this section— 

18 ‘‘(A) shall not exceed 2 years for awards 

19 under subsection (b)(1); and 

20 ‘‘(B) shall not exceed 5 years for awards 

21 under subsection (b)(2). 

22 ‘‘(2) SPECIAL RULES.— 

23 ‘‘(A) An award of a grant or contract 

24 under subsection (b)(1) shall not be renewed. 


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1 ‘‘(B) The period of a grant or contract 

2 awarded to an entity under subsection (b)(2) 

3 shall not overlap with the period of any grant 

4 or contact awarded to the same entity under 

5 subsection (b)(1). 

6 ‘‘(g) REPORT.—The Secretary shall submit to the 

7 Congress an annual report on the program carried out 

8 under this section. 

9 ‘‘(h) DEFINITIONS.—In this section: 

10 ‘‘(1) PRIMARY CARE RESIDENCY TRAINING PRO11 GRAM.—The term ‘primary care residency training 

12 program’ means an approved medical residency 

13 training program described in section 1886(h)(5)(A) 

14 of the Social Security Act that is— 

15 ‘‘(A) in the case of entities seeking awards 

16 under subsection (b)(1), actively applying to be 

17 accredited by the Accreditation Council for 

18 Graduate Medical Education; or 

19 ‘‘(B) in the case of entities seeking awards 

20 under subsection (b)(2), so accredited. 

21 ‘‘(2) HEALTH DISPARITIES.—The term ‘health 

22 disparities’ has the meaning given the term in sec23 tion 3171.’’. 


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1 SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUB2 LIC HEALTH DENTISTS AND DENTAL HYGIEN3 ISTS. 

4 Title VII (42 U.S.C. 292 et seq.) is amended— 

5 (1) in section 791(a)(1), by striking ‘‘747 and 

6 750’’ and inserting ‘‘747, 749, and 750’’; and 

7 (2) by inserting after section 748, as added, the 

8 following: 

9 ‘‘SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUB10 LIC HEALTH DENTISTS AND DENTAL HYGIEN11 ISTS. 

12 ‘‘(a) PROGRAM.—The Secretary shall establish a den13 tal medicine training program consisting of awarding 

14 grants and contracts under this section. 

15 ‘‘(b) SUPPORT AND DEVELOPMENT OF DENTAL

16 TRAINING PROGRAMS.—The Secretary shall make grants 

17 to, or enter into contracts with, eligible entities— 

18 ‘‘(1) to plan, develop, operate, or participate in 

19 an accredited professional training program for oral 

20 health professionals; 

21 ‘‘(2) to provide financial assistance to oral 

22 health professionals who are in need thereof, who 

23 are participants in any such program, and who plan 

24 to work in general, pediatric, or public heath den25 tistry, or dental hygiene; 


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1 ‘‘(3) to plan, develop, operate, or participate in 

2 a program for the training of oral health profes3 sionals who plan to teach in general, pediatric, or 

4 public health dentistry, or dental hygiene; 

5 ‘‘(4) to provide financial assistance in the form 

6 of traineeships and fellowships to oral health profes7 sionals who plan to teach in general, pediatric, or 

8 public health dentistry or dental hygiene; 

9 ‘‘(5) to establish, maintain, or improve— 

10 ‘‘(A) academic administrative units (in11 cluding departments, divisions, or other appro12 priate units) in the specialties of general, pedi13 atric, or public health dentistry; or 

14 ‘‘(B) programs that improve clinical teach15 ing in such specialties; 

16 ‘‘(6) to plan, develop, operate, or participate in 

17 predoctoral and postdoctoral training in general, pe18 diatric, or public health dentistry programs, or train19 ing for dental hygienists; 

20 ‘‘(7) to plan, develop, operate, or participate in 

21 a loan repayment program for full-time faculty in a 

22 program of general, pediatric, or public health den23 tistry; and 

24 ‘‘(8) to provide technical assistance to pediatric 

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1 menting instruction regarding the oral health status, 

2 dental care needs, and risk-based clinical disease 

3 management of all pediatric populations with an em4 phasis on underserved children. 

5 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con6 tract under subsection (a), an entity shall be— 

7 ‘‘(1) an accredited school of dentistry, training 

8 program in dental hygiene, or public or nonprofit 

9 private hospital; 

10 ‘‘(2) a training program in dental hygiene at an 

11 accredited institution of higher education; 

12 ‘‘(3) a public or private nonprofit entity; or 

13 ‘‘(4) a consortium of— 

14 ‘‘(A) 2 or more of the entities described in 

15 paragraphs (1) through (3); and 

16 ‘‘(B) an accredited school of public health. 

17 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

18 under this section, the Secretary shall give preference to 

19 entities that have a demonstrated record of the following: 

20 ‘‘(1) Training the greatest percentage, or sig21 nificantly improving the percentage, of oral health 

22 professionals who practice general, pediatric, or pub23 lic health dentistry. 


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1 ‘‘(2) Training individuals who are from under2 represented minority groups or disadvantaged back3 grounds. 

4 ‘‘(3) A high rate of placing graduates in prac5 tice settings having the principal focus of serving in 

6 underserved areas or populations experiencing health 

7 disparities (including serving patients eligible for 

8 medical assistance under title XIX of the Social Se9 curity Act or for child health assistance under title 

10 XXI of such Act or those with special health care 

11 needs). 

12 ‘‘(4) Supporting teaching programs that ad13 dress the dental needs of vulnerable populations. 

14 ‘‘(5) Providing instruction regarding the oral 

15 health status, dental care needs, and risk-based clin16 ical disease management of all pediatric populations 

17 with an emphasis on underserved children. 

18 ‘‘(e) REPORT.—The Secretary shall submit to the 

19 Congress an annual report on the program carried out 

20 under this section. 

21 ‘‘(f) DEFINITION.—In this section: 

22 ‘‘(1) The term ‘health disparities’ has the 

23 meaning given the term in section 3171. 

24 ‘‘(2) The term ‘oral health professional’ means 

25 an individual training or practicing— 


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1 ‘‘(A) in general dentistry, pediatric den2 tistry, public health dentistry, or dental hy3 giene; or 

4 ‘‘(B) another dental medicine specialty, as 

5 deemed appropriate by the Secretary.’’. 

6 SEC. 2216. AUTHORIZATION OF APPROPRIATIONS. 

7 (a) IN GENERAL.—Part F of title VII (42 U.S.C. 

8 295j et seq.) is amended by adding at the end the fol9 lowing: 

10 ‘‘SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVEST11 MENT FUND. 

12 ‘‘(a) PROMOTION OF PRIMARY CARE AND DEN13 TISTRY.—For the purpose of carrying out subpart XI of 

14 part D of title III and sections 723, 747, 748, and 749, 

15 in addition to any other amounts authorized to be appro16 priated for such purpose, there is authorized to be appro17 priated, out of any monies in the Public Health Invest18 ment Fund, the following: 

19 ‘‘(1) $240,000,000 for fiscal year 2010. 

20 ‘‘(2) $253,000,000 for fiscal year 2011. 

21 ‘‘(3) $265,000,000 for fiscal year 2012. 

22 ‘‘(4) $278,000,000 for fiscal year 2013. 

23 ‘‘(5) $292,000,000 for fiscal year 2014. 

24 ‘‘(6) $307,000,000 for fiscal year 2015. 

25 ‘‘(7) $322,000,000 for fiscal year 2016. 


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1 ‘‘(8) $338,000,000 for fiscal year 2017. 

2 ‘‘(9) $355,000,000 for fiscal year 2018. 

3 ‘‘(10) $373,000,000 for fiscal year 2019.’’. 

4 (b) EXISTING AUTHORIZATIONS OF APPROPRIA5 TIONS.— 

6 (1) SECTION 735.—Paragraph (1) of section 

7 735(g), as so redesignated, is amended by inserting 

8 ‘‘and such sums as may be necessary for subsequent 

9 years through fiscal year 2019’’ before the period at 

10 the end. 

11 (2) SECTION 747.—Subsection (f), as so redes12 ignated, of section 747 (42 U.S.C. 293k) is amended 

13 by striking ‘‘2002’’ and inserting ‘‘2019’’. 

14 Subtitle B—Nursing Workforce 

15 SEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT. 

16 (a) DEFINITIONS.—Section 801 (42 U.S.C. 296 et 

17 seq.) is amended— 

18 (1) in paragraph (1), by inserting ‘‘nurse-man19 aged health centers’’ after ‘‘nursing centers,’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(16) NURSE-MANAGED HEALTH CENTER.— 

22 The term ‘nurse-managed health center’ means a 

23 nurse-practice arrangement, managed by advanced 

24 practice nurses, that provides primary care or 

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1 lations and is associated with an accredited school of 

2 nursing, Federally qualified health center, or inde3 pendent nonprofit health or social services agency.’’. 

4 (a) GRANTS FOR HEALTH PROFESSIONS EDU5 CATION.—Title VIII (42 U.S.C. 296 et seq.) is amended 

6 by striking section 807. 

7 (b) ADVANCED EDUCATION NURSING GRANTS.—Sec8 tion 811(f) (42 U.S.C. 296j(f)) is amended— 

9 (1) by striking paragraph (2); 

10 (2) by redesignating paragraph (3) as para11 graph (2); and 

12 (3) in paragraph (2), as so redesignated, by 

13 striking ‘‘that agrees’’ and all that follows through 

14 the end and inserting: ‘‘that agrees to expend the 

15 award— 

16 ‘‘(A) to train advanced education nurses 

17 who will practice in health professional shortage 

18 areas designated under section 332; or 

19 ‘‘(B) to increase diversity among advanced 

20 education nurses.’’. 

21 (c) NURSE EDUCATION, PRACTICE, AND RETENTION

22 GRANTS.—Section 831 (42 U.S.C. 296p) is amended— 

23 (1) in subsection (b), by amending paragraph 

24 (3) to read as follows: 


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1 ‘‘(3) providing coordinated care, quality care, 

2 and other skills needed to practice nursing;’’; and 

3 (2) by striking subsection (e) and redesignating 

4 subsections (f) through (h) as subsections (e) 

5 through (g), respectively. 

6 (d) STUDENT LOANS.—Subsection (a) of section 836 

7 (42 U.S.C. 297b) is amended— 

8 (1) by striking ‘‘$2,500’’ and inserting 

9 ‘‘$3,300’’; 

10 (2) by striking ‘‘$4,000’’ and inserting 

11 ‘‘$5,200’’; 

12 (3) by striking ‘‘$13,000’’ and inserting 

13 ‘‘$17,000’’; and 

14 (4) by adding at the end the following: ‘‘Begin15 ning with fiscal year 2012, the dollar amounts speci16 fied in this subsection shall be adjusted by an 

17 amount determined by the Secretary on an annual 

18 basis to reflect inflation.’’. 

19 (e) LOAN REPAYMENT.—Section 846 (42 U.S.C. 

20 297n) is amended— 

21 (1) in subsection (a), by amending paragraph 

22 (3) to read as follows: 

23 ‘‘(3) who enters into an agreement with the 

24 Secretary to serve for a period of not less than 2 

25 years— 


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1 ‘‘(A) as a nurse at a health care facility 

2 with a critical shortage of nurses; or 

3 ‘‘(B) as a faculty member at an accredited 

4 school of nursing;’’; and 

5 (2) in subsection (g)(1), by striking ‘‘to provide 

6 health services’’ each place it appears and inserting 

7 ‘‘to provide health services or serve as a faculty 

8 member’’. 

9 (f) NURSE FACULTY LOAN PROGRAM.—Paragraph 

10 (2) of section 846A(c) (42 U.S.C. 297n–1(c)) is amended 

11 by striking ‘‘$30,000’’ and all that follows through the 

12 semicolon and inserting ‘‘$35,000, plus, beginning with 

13 fiscal year 2012, an amount determined by the Secretary 

14 on an annual basis to reflect inflation;’’. 

15 (g) PUBLIC SERVICE ANNOUNCEMENTS.—Title VIII 

16 (42 U.S.C. 296 et seq.) is amended by striking part H. 

17 (h) TECHNICAL AND CONFORMING AMENDMENTS.— 

18 Title VIII (42 U.S.C. 296 et seq.) is amended— 

19 (1) by redesignating section 810 (relating to 

20 prohibition against discrimination by schools on the 

21 basis of sex) as section 809 and moving such section 

22 so that it follows section 808; 

23 (2) in sections 835, 836, 838, 840, and 842, by 

24 striking the term ‘‘this subpart’’ each place it ap25 pears and inserting ‘‘this part’’; 


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1 (3) in section 836(h), by striking the last sen2 tence; 

3 (4) in section 836, by redesignating subsection 

4 (l) as subsection (k); 

5 (5) in section 839, by striking ‘‘839’’ and all 

6 that follows through ‘‘(a)’’ and inserting ‘‘839. (a)’’; 

7 (6) in section 835(b), by striking ‘‘841’’ each 

8 place it appears and inserting ‘‘871’’; 

9 (7) by redesignating section 841 as section 871, 

10 moving part F to the end of the title, and redesig11 nating such part as part H; 

12 (8) in part G— 

13 (A) by redesignating section 845 as section 

14 851; and 

15 (B) by redesignating part G as part F; and 

16 (9) in part I— 

17 (A) by redesignating section 855 as section 

18 861; and 

19 (B) by redesignating part I as part G. 

20 (i) FUNDING.— 

21 (1) IN GENERAL.—Part H, as redesignated, of 

22 title VIII is amended by adding at the end the fol23 lowing: 


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1 ‘‘SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVEST2 MENT FUND. 

3 ‘‘For the purpose of carrying out this title, in addi4 tion to any other amounts authorized to be appropriated 

5 for such purpose, there are authorized to be appropriated, 

6 out of any monies in the Public Health Investment Fund, 

7 the following: 

8 ‘‘(1) $115,000,000 for fiscal year 2010. 

9 ‘‘(2) $122,000,000 for fiscal year 2011. 

10 ‘‘(3) $127,000,000 for fiscal year 2012. 

11 ‘‘(4) $134,000,000 for fiscal year 2013. 

12 ‘‘(5) $140,000,000 for fiscal year 2014. 

13 ‘‘(6) $147,000,000 for fiscal year 2015. 

14 ‘‘(7) $154,000,000 for fiscal year 2016. 

15 ‘‘(8) $162,000,000 for fiscal year 2017. 

16 ‘‘(9) $170,000,000 for fiscal year 2018. 

17 ‘‘(10) $179,000,000 for fiscal year 2019.’’. 

18 (2) EXISTING AUTHORIZATIONS OF APPROPRIA19 TIONS.— 

20 (A) SECTIONS 831, 846, 846A, AND 861.— 

21 Sections 831(g) (as so redesignated), 846(i)(1) 

22 (42 U.S.C. 297n(i)(1)), 846A(f) (42 U.S.C. 

23 297n–1(f)), and 861(e) (as so redesignated) are 

24 amended by striking ‘‘2007’’ each place it ap25 pears and inserting ‘‘2019’’. 


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1 (B) SECTION 871.—Section 871, as so re2 designated, is amended to read as follows: 

3 ‘‘SEC. 871. FUNDING. 

4 ‘‘For the purpose of carrying out parts B, C, and D 

5 (subject to section 845(g)), there are authorized to be ap6 propriated such sums as may be necessary for each fiscal 

7 year through fiscal year 2019.’’. 

8 Subtitle C—Public Health 

9 Workforce 

10 SEC. 2231. PUBLIC HEALTH WORKFORCE CORPS. 

11 Part D of title III (42 U.S.C. 254b et seq.), as 

12 amended by section 2211, is amended by adding at the 

13 end the following: 

14 ‘‘Subpart XII—Public Health Workforce 

15 ‘‘SEC. 340L. PUBLIC HEALTH WORKFORCE CORPS. 

16 ‘‘(a) ESTABLISHMENT.—There is established, within 

17 the Service, the Public Health Workforce Corps (in this 

18 subpart referred to as the ‘Corps’), for the purpose of en19 suring an adequate supply of public health professionals 

20 throughout the Nation. The Corps shall consist of— 

21 ‘‘(1) such officers of the Regular and Reserve 

22 Corps of the Service as the Secretary may designate; 

23 and 

24 ‘‘(2) such civilian employees of the United 

25 States as the Secretary may appoint. 


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1 ‘‘(b) ADMINISTRATION.—Except as provided in sub2 section (c), the Secretary shall carry out this subpart act3 ing through the Administrator of the Health Resources 

4 and Services Administration. 

5 ‘‘(c) PLACEMENT AND ASSIGNMENT.—The Secretary, 

6 acting through the Director of the Centers for Disease 

7 Control and Prevention, shall develop a methodology for 

8 placing and assigning Corps participants as public health 

9 professionals. Such methodology may allow for placing and 

10 assigning such participants in State, local, and tribal 

11 health departments and Federally qualified health centers 

12 (as defined in section 1861(aa)(4) of the Social Security 

13 Act). 

14 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

15 provisions of subpart II shall, except as inconsistent with 

16 this subpart, apply to the Public Health Workforce Corps 

17 in the same manner and to the same extent as such provi18 sions apply to the National Health Service Corps estab19 lished under section 331. 

20 ‘‘(e) REPORT.—The Secretary shall submit to the 

21 Congress an annual report on the programs carried out 

22 under this subpart. 


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1 ‘‘SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP 

2 PROGRAM. 

3 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab4 lish the Public Health Workforce Scholarship Program 

5 (referred to in this section as the ‘Program’) for the pur6 pose described in section 340L(a). 

7 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

8 the Program, an individual shall— 

9 ‘‘(1)(A) be accepted for enrollment, or be en10 rolled, as a full-time or part-time student in a course 

11 of study or program (approved by the Secretary) at 

12 an accredited graduate school or program of public 

13 health; or 

14 ‘‘(B) have demonstrated expertise in public 

15 health and be accepted for enrollment, or be en16 rolled, as a full-time or part-time student in a course 

17 of study or program (approved by the Secretary) 

18 at— 

19 ‘‘(i) an accredited graduate school or pro20 gram of nursing; health administration, man21 agement, or policy; preventive medicine; labora22 tory science; veterinary medicine; or dental 

23 medicine; or 

24 ‘‘(ii) another accredited graduate school or 

25 program, as deemed appropriate by Secretary; 


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1 ‘‘(2) be eligible for, or hold, an appointment as 

2 a commissioned officer in the Regular or Reserve 

3 Corps of the Service or be eligible for selection for 

4 civilian service in the Corps; and 

5 ‘‘(3) sign and submit to the Secretary a written 

6 contract (described in subsection (c)) to serve full7 time as a public health professional, upon the com8 pletion of the course of study or program involved, 

9 for the period of obligated service described in sub10 section (c)(2)(E). 

11 ‘‘(c) CONTRACT.—The written contract between the 

12 Secretary and an individual under subsection (b)(3) shall 

13 contain— 

14 ‘‘(1) an agreement on the part of the Secretary 

15 that the Secretary will— 

16 ‘‘(A) provide the individual with a scholar17 ship for a period of years (not to exceed 4 aca18 demic years) during which the individual shall 

19 pursue an approved course of study or program 

20 to prepare the individual to serve in the public 

21 health workforce; and 

22 ‘‘(B) accept (subject to the availability of 

23 appropriated funds) the individual into the 

24 Corps; 


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1 ‘‘(2) an agreement on the part of the individual 

2 that the individual will— 

3 ‘‘(A) accept provision of such scholarship 

4 to the individual; 

5 ‘‘(B) maintain full-time or part-time enroll6 ment in the approved course of study or pro7 gram described in subsection (b)(1) until the in8 dividual completes that course of study or pro9 gram; 

10 ‘‘(C) while enrolled in the approved course 

11 of study or program, maintain an acceptable 

12 level of academic standing (as determined by 

13 the educational institution offering such course 

14 of study or program); 

15 ‘‘(D) if applicable, complete a residency or 

16 internship; and 

17 ‘‘(E) serve full-time as a public health pro18 fessional for a period of time equal to the great19 er of— 

20 ‘‘(i) 1 year for each academic year for 

21 which the individual was provided a schol22 arship under the Program; or 

23 ‘‘(ii) 2 years; and 


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1 ‘‘(3) an agreement by both parties as to the na2 ture and extent of the scholarship assistance, which 

3 may include— 

4 ‘‘(A) payment of reasonable educational ex5 penses of the individual, including tuition, fees, 

6 books, equipment, and laboratory expenses; and 

7 ‘‘(B) payment of a stipend of not more 

8 than $1,269 (plus, beginning with fiscal year 

9 2011, an amount determined by the Secretary 

10 on an annual basis to reflect inflation) per 

11 month for each month of the academic year in12 volved, with the dollar amount of such a stipend 

13 determined by the Secretary taking into consid14 eration whether the individual is enrolled full15 time or part-time. 

16 ‘‘(d) APPLICATION OF CERTAIN PROVISIONS.—The 

17 provisions of subpart III shall, except as inconsistent with 

18 this subpart, apply to the scholarship program under this 

19 section in the same manner and to the same extent as 

20 such provisions apply to the National Health Service 

21 Corps Scholarship Program established under section 

22 338A. 


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1 ‘‘SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAY2 MENT PROGRAM. 

3 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab4 lish the Public Health Workforce Loan Repayment Pro5 gram (referred to in this section as the ‘Program’) for the 

6 purpose described in section 340L(a). 

7 ‘‘(b) ELIGIBILITY.—To be eligible to participate in 

8 the Program, an individual shall— 

9 ‘‘(1)(A) have a graduate degree from an accred10 ited school or program of public health; 

11 ‘‘(B) have demonstrated expertise in public 

12 health and have a graduate degree in a course of 

13 study or program (approved by the Secretary) 

14 from— 

15 ‘‘(i) an accredited school or program of 

16 nursing; health administration, management, or 

17 policy; preventive medicine; laboratory science; 

18 veterinary medicine; or dental medicine; or 

19 ‘‘(ii) another accredited school or program 

20 approved by the Secretary; or 

21 ‘‘(C) be enrolled as a full-time or part-time stu22 dent in the final year of a course of study or pro23 gram (approved by the Secretary) offered by a 

24 school or program described in subparagraph (A) or 

25 (B), leading to a graduate degree; 


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1 ‘‘(2) be eligible for, or hold, an appointment as 

2 a commissioned officer in the Regular or Reserve 

3 Corps of the Service or be eligible for selection for 

4 civilian service in the Corps; 

5 ‘‘(3) if applicable, complete a residency or in6 ternship; and 

7 ‘‘(4) sign and submit to the Secretary a written 

8 contract (described in subsection (c)) to serve full9 time as a public health professional for the period of 

10 obligated service described in subsection (c)(2). 

11 ‘‘(c) CONTRACT.—The written contract between the 

12 Secretary and an individual under subsection (b)(4) shall 

13 contain— 

14 ‘‘(1) an agreement by the Secretary to repay on 

15 behalf of the individual loans incurred by the indi16 vidual in the pursuit of the relevant public health 

17 workforce educational degree in accordance with the 

18 terms of the contract; 

19 ‘‘(2) an agreement by the individual to serve 

20 full-time as a public health professional for a period 

21 of time equal to 2 years or such longer period as the 

22 individual may agree to; and 

23 ‘‘(3) in the case of an individual described in 

24 subsection (b)(1)(C) who is in the final year of study 

25 and who has accepted employment as a public health 


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1 professional, in accordance with subsection 340L(c), 

2 an agreement on the part of the individual to com3 plete the education or training, maintain an accept4 able level of academic standing (as determined by 

5 the educational institution offering the course of 

6 study or training), and serve the period of obligated 

7 service described in paragraph (2). 

8 ‘‘(d) PAYMENTS.— 

9 ‘‘(1) IN GENERAL.—A loan repayment provided 

10 for an individual under a written contract under the 

11 Program shall consist of payment, in accordance 

12 with paragraph (2), on behalf of the individual of 

13 the principal, interest, and related expenses on gov14 ernment and commercial loans received by the indi15 vidual regarding the undergraduate or graduate edu16 cation of the individual (or both), which loans were 

17 made for reasonable educational expenses, including 

18 tuition, fees, books, equipment, and laboratory ex19 penses, incurred by the individual. 

20 ‘‘(2) PAYMENTS FOR YEARS SERVED.— 

21 ‘‘(A) IN GENERAL.—For each year of obli22 gated service that an individual contracts to 

23 serve under subsection (c), the Secretary may 

24 pay up to $35,000 (plus, beginning with fiscal 

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1 retary on an annual basis to reflect inflation) 

2 on behalf of the individual for loans described 

3 in paragraph (1). 

4 ‘‘(B) REPAYMENT SCHEDULE.—Any ar5 rangement made by the Secretary for the mak6 ing of loan repayments in accordance with this 

7 subsection shall provide that any repayments 

8 for a year of obligated service shall be made no 

9 later than the end of the fiscal year in which 

10 the individual completes such year of service. 

11 ‘‘(e) APPLICATION OF CERTAIN PROVISIONS.—The 

12 provisions of subpart III shall, except as inconsistent with 

13 this subpart, apply to the loan repayment program under 

14 this section in the same manner and to the same extent 

15 as such provisions apply to the National Health Service 

16 Corps Loan Repayment Program established under sec17 tion 338B.’’. 

18 SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

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

20 follows: 

21 ‘‘SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE. 

22 ‘‘(a) PROGRAM.—The Secretary, acting through the 

23 Administrator of the Health Resources and Services Ad24 ministration and in consultation with the Director of the 

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1 lish a public health workforce training and enhancement 

2 program consisting of awarding grants and contracts 

3 under subsection (b). 

4 ‘‘(b) GRANTS AND CONTRACTS.—The Secretary shall 

5 award grants and contracts to eligible entities— 

6 ‘‘(1) to plan, develop, operate, or participate in, 

7 an accredited professional training program in the 

8 field of public health (including such a program in 

9 nursing; health administration, management, or pol10 icy; preventive medicine; laboratory science; veteri11 nary medicine; or dental medicine) for members of 

12 the public health workforce including mid-career 

13 professionals; 

14 ‘‘(2) to provide financial assistance in the form 

15 of traineeships and fellowships to students who are 

16 participants in any such program and who plan to 

17 specialize or work in the field of public health; 

18 ‘‘(3) to plan, develop, operate, or participate in 

19 a program for the training of public health profes20 sionals who plan to teach in any program described 

21 in paragraph (1); and 

22 ‘‘(4) to provide financial assistance in the form 

23 of traineeships and fellowships to public health pro24 fessionals who are participants in any program de25 scribed in paragraph (1) and who plan to teach in 


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1 the field of public health, including nursing; health 

2 administration, management, or policy; preventive 

3 medicine; laboratory science; veterinary medicine; or 

4 dental medicine. 

5 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con6 tract under subsection (a), an entity shall be— 

7 ‘‘(1) an accredited health professions school, in8 cluding an accredited graduate school or program of 

9 public health; nursing; health administration, man10 agement, or policy; preventive medicine; laboratory 

11 science; veterinary medicine; or dental medicine; 

12 ‘‘(2) a State, local, or tribal health department; 

13 ‘‘(3) a public or private nonprofit entity; or 

14 ‘‘(4) a consortium of 2 or more entities de15 scribed in paragraphs (1) through (3). 

16 ‘‘(d) PREFERENCE.—In awarding grants or contracts 

17 under this section, the Secretary shall give preference to 

18 entities that have a demonstrated record of the following: 

19 ‘‘(1) Training the greatest percentage, or sig20 nificantly improving the percentage, of public health 

21 professionals who serve in underserved communities. 

22 ‘‘(2) Training individuals who are from under23 represented minority groups or disadvantaged back24 grounds. 


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1 ‘‘(3) Training individuals in public health spe2 cialties experiencing a significant shortage of public 

3 health professionals (as determined by the Sec4 retary). 

5 ‘‘(4) Training the greatest percentage, or sig6 nificantly improving the percentage, of public health 

7 professionals serving in the Federal Government or 

8 a State, local, or tribal government. 

9 ‘‘(e) REPORT.—The Secretary shall submit to the 

10 Congress an annual report on the program carried out 

11 under this section.’’. 

12 SEC. 2233. PUBLIC HEALTH TRAINING CENTERS. 

13 Section 766 (42 U.S.C. 295a) is amended— 

14 (1) in subsection (b)(1), by striking ‘‘in further15 ance of the goals established by the Secretary for 

16 the year 2000’’ and inserting ‘‘in furtherance of the 

17 goals established by the Secretary in the national 

18 prevention and wellness strategy under section 

19 3121’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(d) REPORT.—The Secretary shall submit to the 

22 Congress an annual report on the program carried out 

23 under this section.’’. 


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1 SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

2 TRAINING GRANT PROGRAM. 

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

4 follows: 

5 ‘‘SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH 

6 TRAINING GRANT PROGRAM. 

7 ‘‘(a) GRANTS.—The Secretary, acting through the 

8 Administrator of the Health Resources and Services Ad9 ministration and in consultation with the Director of the 

10 Centers for Disease Control and Prevention, shall award 

11 grants to, or enter into contracts with, eligible entities to 

12 provide training to graduate medical residents in preven13 tive medicine specialties. 

14 ‘‘(b) ELIGIBILITY.—To be eligible for a grant or con15 tract under subsection (a), an entity shall be— 

16 ‘‘(1) an accredited school of public health or 

17 school of medicine or osteopathic medicine; 

18 ‘‘(2) an accredited public or private hospital; 

19 ‘‘(3) a State, local, or tribal health department; 

20 or 

21 ‘‘(4) a consortium of 2 or more entities de22 scribed in paragraphs (1) through (3). 

23 ‘‘(c) USE OF FUNDS.—Amounts received under a 

24 grant or contract under this section shall be used to— 

25 ‘‘(1) plan, develop (including the development of 

26 curricula), operate, or participate in an accredited 


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1 residency or internship program in preventive medi2 cine or public health; 

3 ‘‘(2) defray the costs of practicum experiences, 

4 as required in such a program; and 

5 ‘‘(3) establish, maintain, or improve— 

6 ‘‘(A) academic administrative units (in7 cluding departments, divisions, or other appro8 priate units) in preventive medicine and public 

9 health; or 

10 ‘‘(B) programs that improve clinical teach11 ing in preventive medicine and public health. 

12 ‘‘(d) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the program carried out 

14 under this section.’’. 

15 SEC. 2235. AUTHORIZATION OF APPROPRIATIONS. 

16 (a) IN GENERAL.—Section 799C, as added by section 

17 2216 of this Act, is amended by adding at the end the 

18 following: 

19 ‘‘(b) PUBLIC HEALTH WORKFORCE.—For the pur20 pose of carrying out subpart XII of part D of title III 

21 and sections 765, 766, and 768, in addition to any other 

22 amounts authorized to be appropriated for such purpose, 

23 there are authorized to be appropriated, out of any monies 

24 in the Public Health Investment Fund, the following: 

25 ‘‘(1) $51,000,000 for fiscal year 2010. 


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1 ‘‘(2) $54,000,000 for fiscal year 2011. 

2 ‘‘(3) $57,000,000 for fiscal year 2012. 

3 ‘‘(4) $59,000,000 for fiscal year 2013. 

4 ‘‘(5) $62,000,000 for fiscal year 2014. 

5 ‘‘(6) $65,000,000 for fiscal year 2015. 

6 ‘‘(7) $68,000,000 for fiscal year 2016. 

7 ‘‘(8) $72,000,000 for fiscal year 2017. 

8 ‘‘(9) $75,000,000 for fiscal year 2018. 

9 ‘‘(10) $79,000,000 for fiscal year 2019.’’. 

10 (b) EXISTING AUTHORIZATION OF APPROPRIA11 TIONS.—Subpart (a) of section 770 (42 U.S.C. 295e) is 

12 amended by striking ‘‘2002’’ and inserting ‘‘2019’’. 

13 Subtitle D—Adapting Workforce to 

14 Evolving Health System Needs 

15 PART 1—HEALTH PROFESSIONS TRAINING FOR 

16 DIVERSITY 

17 SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STU18 DENTS, LOAN REPAYMENTS AND FELLOW19 SHIPS REGARDING FACULTY POSITIONS, AND 

20 EDUCATIONAL ASSISTANCE IN THE HEALTH 

21 PROFESSIONS REGARDING INDIVIDUALS 

22 FROM DISADVANTAGED BACKGROUNDS. 

23 Paragraph (1) of section 738(a) (42 U.S.C. 293b(a)) 

24 is amended by striking ‘‘not more than $20,000’’ and all 

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1 ing: ‘‘not more than $35,000 (plus, beginning with fiscal 

2 year 2012, an amount determined by the Secretary on an 

3 annual basis to reflect inflation) of the principal and inter4 est of the educational loans of such individuals.’’ 

5 SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS. 

6 Subsection (b) of section 821 (42 U.S.C. 296m) is 

7 amended— 

8 (1) in the heading, by striking ‘‘GUIDANCE’’ 

9 and inserting ‘‘CONSULTATION’’; and 

10 (2) by striking ‘‘shall take into consideration’’ 

11 and all that follows through ‘‘consult with nursing 

12 associations’’ and inserting ‘‘shall, as appropriate, 

13 consult with nursing associations’’. 

14 SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL 

15 COMPETENCY PROGRAMS. 

16 Title VII (42 U.S.C. 292 et seq.) is amended by in17 serting after section 739 the following: 

18 ‘‘SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL 

19 COMPETENCY PROGRAMS. 

20 ‘‘The Secretary shall, to the extent practicable, co21 ordinate the activities carried out under this part and sec22 tion 821 in order to enhance the effectiveness of such ac23 tivities and avoid duplication of effort.’’. 


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1 PART 2—INTERDISCIPLINARY TRAINING 

2 PROGRAMS 

3 SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY 

4 TRAINING FOR HEALTH CARE PROFES5 SIONALS. 

6 Section 741 (42 U.S.C. 293e) is amended— 

7 (1) in the section heading, by striking ‘‘GRANTS

8 FOR HEALTH PROFESSIONS EDUCATION’’ and in9 serting ‘‘CULTURAL AND LINGUISTIC COMPETENCY

10 TRAINING FOR HEALTH CARE PROFESSIONALS’’; 

11 (2) by redesignating subsection (b) as sub12 section (h); and 

13 (3) by striking subsection (a) and inserting the 

14 following: 

15 ‘‘(a) PROGRAM.—The Secretary shall establish a cul16 tural and linguistic competency training program for 

17 health care professionals, including nurse professionals, 

18 consisting of awarding grants and contracts under sub19 section (b). 

20 ‘‘(b) CULTURAL AND LINGUISTIC COMPETENCY

21 TRAINING.—The Secretary shall award grants and con22 tracts to eligible entities— 

23 ‘‘(1) to test, develop, and evaluate models of 

24 cultural and linguistic competency training (includ25 ing continuing education) for health professionals; 

26 and 


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1 ‘‘(2) to implement cultural and linguistic com2 petency training programs for health professionals 

3 developed under paragraph (1) or otherwise. 

4 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con5 tract under subsection (b), an entity shall be— 

6 ‘‘(1) an accredited health professions school or 

7 program; 

8 ‘‘(2) an academic health center; 

9 ‘‘(3) a public or private nonprofit entity; or 

10 ‘‘(4) a consortium of 2 or more entities de11 scribed in paragraphs (1) through (3). 

12 ‘‘(d) PREFERENCE.—In awarding grants and con13 tracts under this section, the Secretary shall give pref14 erence to entities that have a demonstrated record of the 

15 following: 

16 ‘‘(1) Addressing, or partnering with an entity 

17 with experience addressing, the cultural and lin18 guistic competency needs of the population to be 

19 served through the grant or contract. 

20 ‘‘(2) Addressing health disparities. 

21 ‘‘(3) Placing health professionals in regions ex22 periencing significant changes in the cultural and 

23 linguistic demographics of populations, including 

24 communities along the United States-Mexico border. 


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1 ‘‘(4) Carrying out activities described in sub2 section (b) with respect to more than one health pro3 fession discipline, specialty, or subspecialty. 

4 ‘‘(e) CONSULTATION.—The Secretary shall carry out 

5 this section in consultation with the heads of appropriate 

6 health agencies and offices in the Department of Health 

7 and Human Services, including the Office of Minority 

8 Health. 

9 ‘‘(f) DEFINITION.—In this section, the term ‘health 

10 disparities’ has the meaning given to the term in section 

11 3171. 

12 ‘‘(g) REPORT.—The Secretary shall submit to the 

13 Congress an annual report on the program carried out 

14 under this section.’’. 

15 SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE 

16 TRAINING. 

17 Part D of title VII (42 U.S.C. 294 et seq.) is amend18 ed by adding at the end the following: 

19 ‘‘SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE 

20 TRAINING. 

21 ‘‘(a) PROGRAM.—The Secretary shall establish an in22 novations in interdisciplinary care training program con23 sisting of awarding grants and contracts under subsection 

24 (b). 


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1 ‘‘(b) TRAINING PROGRAMS.—The Secretary shall 

2 award grants to, or enter into contracts with, eligible enti3 ties— 

4 ‘‘(1) to test, develop, and evaluate health pro5 fessional training programs (including continuing 

6 education) designed to promote— 

7 ‘‘(A) the delivery of health services through 

8 interdisciplinary and team-based models, which 

9 may include patient-centered medical home 

10 models, medication therapy management mod11 els, and models integrating physical, mental, or 

12 oral health services; and 

13 ‘‘(B) coordination of the delivery of health 

14 care within and across settings, including health 

15 care institutions, community-based settings, 

16 and the patient’s home; and 

17 ‘‘(2) to implement such training programs de18 veloped under paragraph (1) or otherwise. 

19 ‘‘(c) ELIGIBILITY.—To be eligible for a grant or con20 tract under subsection (b), an entity shall be— 

21 ‘‘(1) an accredited health professions school or 

22 program; 

23 ‘‘(2) an academic health center; 


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1 ‘‘(3) a public or private nonprofit entity (includ2 ing an area health education center or a geriatric 

3 education center); or 

4 ‘‘(4) a consortium of 2 or more entities de5 scribed in paragraphs (1) through (3). 

6 ‘‘(d) PREFERENCES.—In awarding grants and con7 tracts under this section, the Secretary shall give pref8 erence to entities that have a demonstrated record of the 

9 following: 

10 ‘‘(1) Training the greatest percentage, or sig11 nificantly increasing the percentage, of health pro12 fessionals who serve in underserved communities. 

13 ‘‘(2) Broad interdisciplinary team-based collabo14 rations. 

15 ‘‘(3) Addressing health disparities. 

16 ‘‘(e) REPORT.—The Secretary shall submit to the 

17 Congress an annual report on the program carried out 

18 under this section. 

19 ‘‘(f) DEFINITIONS.—In this section: 

20 ‘‘(1) The term ‘health disparities’ has the 

21 meaning given the term in section 3171. 

22 ‘‘(2) The term ‘interdisciplinary’ means collabo23 ration across health professions and specialties, 

24 which may include public health, nursing, allied 

25 health, and appropriate medical specialties.’’. 


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1 PART 3—ADVISORY COMMITTEE ON HEALTH 

2 WORKFORCE EVALUATION AND ASSESSMENT 

3 SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESS4 MENT. 

5 Subpart 1 of part E of title VII (42 U.S.C. 294n 

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

7 ‘‘SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESS8 MENT. 

9 ‘‘(a) ADVISORY COMMITTEE.—The Secretary, acting 

10 through the Assistant Secretary for Health, shall establish 

11 a permanent advisory committee to be known as the Advi12 sory Committee on Health Workforce Evaluation and As13 sessment (referred to in this section as the ‘Advisory Com14 mittee’). 

15 ‘‘(b) RESPONSIBILITIES.—The Advisory Committee 

16 shall— 

17 ‘‘(1) not later than 1 year after the date of the 

18 establishment of the Advisory Committee, submit 

19 recommendations to the Secretary on— 

20 ‘‘(A) classifications of the health workforce 

21 to ensure consistency of data collection on the 

22 health workforce; and 

23 ‘‘(B) based on such classifications, stand24 ardized methodologies and procedures to enu25 merate the health workforce; 


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1 ‘‘(2) not later than 2 years after the date of the 

2 establishment of the Advisory Committee, submit 

3 recommendations to the Secretary on— 

4 ‘‘(A) the supply, diversity, and geographic 

5 distribution of the health workforce; 

6 ‘‘(B) the retention of the health workforce 

7 to ensure quality and adequacy of such work8 force; and 

9 ‘‘(C) policies to carry out the recommenda10 tions made pursuant to subparagraphs (A) and 

11 (B); and 

12 ‘‘(3) not later than 4 years after the date of the 

13 establishment of the Advisory Committee, and every 

14 2 years thereafter, submit updated recommendations 

15 to the Secretary under paragraphs (1) and (2). 

16 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

17 ongoing administrative, research, and technical support 

18 for the operations of the Advisory Committee, including 

19 coordinating and supporting the dissemination of the rec20 ommendations of the Advisory Committee. 

21 ‘‘(d) MEMBERSHIP.— 

22 ‘‘(1) NUMBER; APPOINTMENT.—The Secretary 

23 shall appoint 15 members to serve on the Advisory 

24 Committee. 

25 ‘‘(2) TERMS.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 appoint members of the Advisory Committee for 

3 a term of 3 years and may reappoint such 

4 members, but the Secretary may not appoint 

5 any member to serve more than a total of 6 

6 years. 

7 ‘‘(B) STAGGERED TERMS.—Notwith8 standing subparagraph (A), of the members 

9 first appointed to the Advisory Committee 

10 under paragraph (1)— 

11 ‘‘(i) 5 shall be appointed for a term of 

12 1 year; 

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

14 of 2 years; and 

15 ‘‘(iii) 5 shall be appointed for a term 

16 of 3 years. 

17 ‘‘(3) QUALIFICATIONS.—Members of the Advi18 sory Committee shall be appointed from among indi19 viduals who possess expertise in at least one of the 

20 following areas: 

21 ‘‘(A) Conducting and interpreting health 

22 workforce market analysis, including health 

23 care labor workforce analysis. 

24 ‘‘(B) Conducting and interpreting health 

25 finance and economics research. 


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1 ‘‘(C) Delivering and administering health 

2 care services. 

3 ‘‘(D) Delivering and administering health 

4 workforce education and training. 

5 ‘‘(4) REPRESENTATION.—In appointing mem6 bers of the Advisory Committee, the Secretary 

7 shall— 

8 ‘‘(A) include no less than one representa9 tive of each of— 

10 ‘‘(i) health professionals within the 

11 health workforce; 

12 ‘‘(ii) health care patients and con13 sumers; 

14 ‘‘(iii) employers; 

15 ‘‘(iv) labor unions; and 

16 ‘‘(v) third-party health payors; and 

17 ‘‘(B) ensure that— 

18 ‘‘(i) all areas of expertise described in 

19 paragraph (3) are represented; 

20 ‘‘(ii) the members of the Advisory 

21 Committee include members who, collec22 tively, have significant experience working 

23 with— 


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1 ‘‘(I) populations in urban and 

2 federally designated rural and non3 metropolitan areas; and 

4 ‘‘(II) populations who are under5 represented in the health professions, 

6 including underrepresented minority 

7 groups; and 

8 ‘‘(iii) individuals who are directly in9 volved in health professions education or 

10 practice do not constitute a majority of the 

11 members of the Advisory Committee. 

12 ‘‘(5) DISCLOSURE AND CONFLICTS OF INTER13 EST.—Members of the Advisory Committee shall not 

14 be considered employees of the Federal Government 

15 by reason of service on the Advisory Committee, ex16 cept members of the Advisory Committee shall be 

17 considered to be special Government employees with18 in the meaning of section 107 of the Ethics in Gov19 ernment Act of 1978 (5 U.S.C. App.) and section 

20 208 of title 18, United States Code, for the purposes 

21 of disclosure and management of conflicts of interest 

22 under those sections. 

23 ‘‘(6) NO PAY; RECEIPT OF TRAVEL EX24 PENSES.—Members of the Advisory Committee shall 

25 not receive any pay for service on the Committee, 


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1 but may receive travel expenses, including a per 

2 diem, in accordance with applicable provisions of 

3 subchapter I of chapter 57 of title 5, United States 

4 Code. 

5 ‘‘(e) CONSULTATION.—In carrying out this section, 

6 the Secretary shall consult with the Secretary of Edu7 cation and the Secretary of Labor. 

8 ‘‘(f) COLLABORATION.—The Advisory Committee 

9 shall collaborate with the advisory bodies at the Health 

10 Resources and Services Administration, the National Ad11 visory Council (as authorized in section 337), the Advisory 

12 Committee on Training in Primary Care Medicine and 

13 Dentistry (as authorized in section 749A), the Advisory 

14 Committee on Interdisciplinary, Community-Based Link15 ages (as authorized in section 756), the Advisory Council 

16 on Graduate Medical Education (as authorized in section 

17 762), and the National Advisory Council on Nurse Edu18 cation and Practice (as authorized in section 851). 

19 ‘‘(g) FACA.—The Federal Advisory Committee Act 

20 (5 U.S.C. App.) except for section 14 of such Act shall 

21 apply to the Advisory Committee under this section only 

22 to the extent that the provisions of such Act do not conflict 

23 with the requirements of this section. 


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1 ‘‘(h) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the activities of the Advisory 

3 Committee. 

4 ‘‘(i) DEFINITION.—In this section, the term ‘health 

5 workforce’ includes all health care providers with direct 

6 patient care and support responsibilities, including physi7 cians, nurses, physician assistants, pharmacists, oral 

8 health professionals (as defined in section 749(f)), allied 

9 health professionals, mental and behavioral professionals, 

10 and public health professionals (including veterinarians 

11 engaged in public health practice).’’. 

12 PART 4—HEALTH WORKFORCE ASSESSMENT 

13 SEC. 2271. HEALTH WORKFORCE ASSESSMENT. 

14 (a) IN GENERAL.—Section 761 (42 U.S.C. 294n) is 

15 amended— 

16 (1) by redesignating subsection (c) as sub17 section (e); and 

18 (2) by striking subsections (a) and (b) and in19 serting the following: 

20 ‘‘(a) IN GENERAL.—The Secretary shall, based upon 

21 the classifications and standardized methodologies and 

22 procedures developed by the Advisory Committee on 

23 Health Workforce Evaluation and Assessment under sec24 tion 764(b)— 


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1 ‘‘(1) collect data on the health workforce (as 

2 defined in section 764(i)), disaggregated by field, 

3 discipline, and specialty, with respect to— 

4 ‘‘(A) the supply (including retention) of 

5 health professionals relative to the demand for 

6 such professionals; 

7 ‘‘(B) the diversity of health professionals 

8 (including with respect to race, ethnic back9 ground, and gender); and 

10 ‘‘(C) the geographic distribution of health 

11 professionals; and 

12 ‘‘(2) collect such data on individuals partici13 pating in the programs authorized by subtitles A, B, 

14 and C and part 1 of subtitle D of title II of division 

15 C of the America’s Affordable Health Choices Act of 

16 2009. 

17 ‘‘(b) GRANTS AND CONTRACTS FOR HEALTH WORK18 FORCE ANALYSIS.— 

19 ‘‘(1) IN GENERAL.—The Secretary may award 

20 grants or contracts to eligible entities to carry out 

21 subsection (a). 

22 ‘‘(2) ELIGIBILITY.—To be eligible for a grant 

23 or contract under this subsection, an entity shall 

24 be— 


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1 ‘‘(A) an accredited health professions 

2 school or program; 

3 ‘‘(B) an academic health center; 

4 ‘‘(C) a State, local, or tribal government; 

5 ‘‘(D) a public or private entity; or 

6 ‘‘(E) a consortium of 2 or more entities de7 scribed in subparagraphs (A) through (D). 

8 ‘‘(c) COLLABORATION AND DATA SHARING.—The 

9 Secretary shall collaborate with Federal departments and 

10 agencies, health professions organizations (including 

11 health professions education organizations), and profes12 sional medical societies for the purpose of carrying out 

13 subsection (a). 

14 ‘‘(d) REPORT.—The Secretary shall submit to the 

15 Congress an annual report on the data collected under 

16 subsection (a).’’. 

17 (b) PERIOD BEFORE COMPLETION OF NATIONAL

18 STRATEGY.—Pending completion of the classifications and 

19 standardized methodologies and procedures developed by 

20 the Advisory Committee on Health Workforce Evaluation 

21 and Assessment under section 764(b) of the Public Health 

22 Service Act, as added by section 2261, the Secretary of 

23 Health and Human Services, acting through the Adminis24 trator of the Health Resources and Services Administra25 tion and in consultation with such Advisory Committee, 


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1 may make a judgment about the classifications, meth2 odologies, and procedures to be used for collection of data 

3 under section 761(a) of the Public Health Service Act, as 

4 amended by this section. 

5 PART 5—AUTHORIZATION OF APPROPRIATIONS 

6 SEC. 2281. AUTHORIZATION OF APPROPRIATIONS. 

7 (a) IN GENERAL.—Section 799C, as added by section 

8 2216 of this Act, is amended by adding at the end the 

9 following: 

10 ‘‘(c) HEALTH PROFESSIONS TRAINING FOR DIVER11 SITY.—For the purpose of carrying out sections 736, 737, 

12 738, 739, and 739A, in addition to any other amounts 

13 authorized to be appropriated for such purpose, there are 

14 authorized to be appropriated, out of any monies in the 

15 Public Health Investment Fund, the following: 

16 ‘‘(1) $90,000,000 for fiscal year 2010. 

17 ‘‘(2) $97,000,000 for fiscal year 2011. 

18 ‘‘(3) $100,000,000 for fiscal year 2012. 

19 ‘‘(4) $104,000,000 for fiscal year 2013. 

20 ‘‘(5) $110,000,000 for fiscal year 2014. 

21 ‘‘(6) $116,000,000 for fiscal year 2015. 

22 ‘‘(7) $121,000,000 for fiscal year 2016. 

23 ‘‘(8) $127,000,000 for fiscal year 2017. 

24 ‘‘(9) $133,000,000 for fiscal year 2018. 

25 ‘‘(10) $140,000,000 for fiscal year 2019. 


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1 ‘‘(d) INTERDISCIPLINARY TRAINING PROGRAMS, AD2 VISORY COMMITTEE ON HEALTH WORKFORCE EVALUA3 TION AND ASSESSMENT, AND HEALTH WORKFORCE AS4 SESSMENT.—For the purpose of carrying out sections 

5 741, 759, 761, and 764, in addition to any other amounts 

6 authorized to be appropriated for such purpose, there are 

7 authorized to be appropriated, out of any monies in the 

8 Public Health Investment Fund, the following: 

9 ‘‘(1) $91,000,000 for fiscal year 2010. 

10 ‘‘(2) $97,000,000 for fiscal year 2011. 

11 ‘‘(3) $101,000,000 for fiscal year 2012. 

12 ‘‘(4) $105,000,000 for fiscal year 2013. 

13 ‘‘(5) $111,000,000 for fiscal year 2014. 

14 ‘‘(6) $117,000,000 for fiscal year 2015. 

15 ‘‘(7) $122,000,000 for fiscal year 2016. 

16 ‘‘(8) $129,000,000 for fiscal year 2017. 

17 ‘‘(9) $135,000,000 for fiscal year 2018. 

18 ‘‘(10) $141,000,000 for fiscal year 2019.’’. 

19 (b) EXISTING AUTHORIZATIONS OF APPROPRIA20 TIONS.— 

21 (1) SECTION 736.—Paragraph (1) of section 

22 736(h) (42 U.S.C. 293(h)) is amended by striking 

23 ‘‘2002’’ and inserting ‘‘2019’’. 

24 (2) SECTIONS 737, 738, AND 739.—Subsections 

25 (a), (b), and (c) of section 740 are amended by 


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1 striking ‘‘2002’’ each place it appears and inserting 

2 ‘‘2019’’. 

3 (3) SECTION 741.—Subsection (h), as so redes4 ignated, of section 741 is amended— 

5 (A) by striking ‘‘and’’ after ‘‘fiscal year 

6 2003,’’; and 

7 (B) by inserting ‘‘, and such sums as may 

8 be necessary for subsequent fiscal years 

9 through the end of fiscal year 2019’’ before the 

10 period at the end. 

11 (4) SECTION 761.—Subsection (e)(1), as so re12 designated, of section 761 is amended by striking 

13 ‘‘2002’’ and inserting ‘‘2019’’. 

14 TITLE III—PREVENTION AND 

15 WELLNESS 

16 SEC. 2301. PREVENTION AND WELLNESS. 

17 (a) IN GENERAL.—The Public Health Service Act 

18 (42 U.S.C. 201 et seq.) is amended by adding at the end 

19 the following: 


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1 ‘‘TITLE XXXI—PREVENTION AND 

2 WELLNESS 

3 ‘‘Subtitle A—Prevention and 

4 Wellness Trust 

5 ‘‘SEC. 3111. PREVENTION AND WELLNESS TRUST. 

6 ‘‘(a) DEPOSITS INTO TRUST.—There is established 

7 a Prevention and Wellness Trust. There are authorized 

8 to be appropriated to the Trust— 

9 ‘‘(1) amounts described in section 

10 2002(b)(2)(ii) of the America’s Affordable Health 

11 Choices Act of 2009 for each fiscal year; and 

12 ‘‘(2) in addition, out of any monies in the Pub13 lic Health Investment Fund— 

14 ‘‘(A) for fiscal year 2010, $2,400,000,000; 

15 ‘‘(B) for fiscal year 2011, $2,800,000,000; 

16 ‘‘(C) for fiscal year 2012, $3,100,000,000; 

17 ‘‘(D) for fiscal year 2013, $3,400,000,000; 

18 ‘‘(E) for fiscal year 2014, $3,500,000,000; 

19 ‘‘(F) for fiscal year 2015, $3,600,000,000; 

20 ‘‘(G) for fiscal year 2016, $3,700,000,000; 

21 ‘‘(H) for fiscal year 2017, $3,900,000,000; 

22 ‘‘(I) for fiscal year 2018, $4,300,000,000; 

23 and 

24 ‘‘(J) for fiscal year 2019, $4,600,000,000. 


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1 ‘‘(b) AVAILABILITY OF FUNDS.—Amounts in the Pre2 vention and Wellness Trust shall be available, as provided 

3 in advance in appropriation Acts, for carrying out this 

4 title. 

5 ‘‘(c) ALLOCATION.—Of the amounts authorized to be 

6 appropriated in subsection (a)(2), there are authorized to 

7 be appropriated— 

8 ‘‘(1) for carrying out subtitle C (Prevention 

9 Task Forces), $35,000,000 for each of fiscal years 

10 2010 through 2019; 

11 ‘‘(2) for carrying out subtitle D (Prevention 

12 and Wellness Research)— 

13 ‘‘(A) for fiscal year 2010, $100,000,000; 

14 ‘‘(B) for fiscal year 2011, $150,000,000; 

15 ‘‘(C) for fiscal year 2012, $200,000,000; 

16 ‘‘(D) for fiscal year 2013, $250,000,000; 

17 ‘‘(E) for fiscal year 2014, $300,000,000; 

18 ‘‘(F) for fiscal year 2015, $315,000,000; 

19 ‘‘(G) for fiscal year 2016, $331,000,000; 

20 ‘‘(H) for fiscal year 2017, $347,000,000; 

21 ‘‘(I) for fiscal year 2018, $364,000,000; 

22 and 

23 ‘‘(J) for fiscal year 2019, $383,000,000. 

24 ‘‘(3) for carrying out subtitle E (Delivery of 

25 Community Preventive and Wellness Services)— 


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1 ‘‘(A) for fiscal year 2010, $1,100,000,000; 

2 ‘‘(B) for fiscal year 2011, $1,300,000,000; 

3 ‘‘(C) for fiscal year 2012, $1,400,000,000; 

4 ‘‘(D) for fiscal year 2013, $1,600,000,000; 

5 ‘‘(E) for fiscal year 2014, $1,700,000,000; 

6 ‘‘(F) for fiscal year 2015, $1,800,000,000; 

7 ‘‘(G) for fiscal year 2016, $1,900,000,000; 

8 ‘‘(H) for fiscal year 2017, $2,000,000,000; 

9 ‘‘(I) for fiscal year 2018, $2,100,000,000; 

10 and 

11 ‘‘(J) for fiscal year 2019, $2,300,000,000. 

12 ‘‘(4) for carrying out section 3161 (Core Public 

13 Health Infrastructure and Activities for State and 

14 Local Health Departments)— 

15 ‘‘(A) for fiscal year 2010, $800,000,000; 

16 ‘‘(B) for fiscal year 2011, $1,000,000,000; 

17 ‘‘(C) for fiscal year 2012, $1,100,000,000; 

18 ‘‘(D) for fiscal year 2013, $1,200,000,000; 

19 ‘‘(E) for fiscal year 2014, $1,300,000,000; 

20 ‘‘(F) for fiscal year 2015, $1,400,000,000; 

21 ‘‘(G) for fiscal year 2016, $1,500,000,000; 

22 ‘‘(H) for fiscal year 2017, $1,600,000,000; 

23 ‘‘(I) for fiscal year 2018, $1,800,000,000; 

24 and 


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1 ‘‘(J) for fiscal year 2019, $1,900,000,000; 

2 and 

3 ‘‘(5) for carrying out section 3162 (Core Public 

4 Health Infrastructure and Activities for CDC), 

5 $400,000,000 for each of fiscal years 2010 through 

6 2019. 

7 ‘‘Subtitle B—National Prevention 

8 and Wellness Strategy 

9 ‘‘SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRAT10 EGY. 

11 ‘‘(a) IN GENERAL.—The Secretary shall submit to 

12 the Congress within one year after the date of the enact13 ment of this section, and at least every 2 years thereafter, 

14 a national strategy that is designed to improve the Na15 tion’s health through evidence-based clinical and commu16 nity prevention and wellness activities (in this section re17 ferred to as ‘prevention and wellness activities’), including 

18 core public health infrastructure improvement activities. 

19 ‘‘(b) CONTENTS.—The strategy under subsection (a) 

20 shall include each of the following: 

21 ‘‘(1) Identification of specific national goals and 

22 objectives in prevention and wellness activities that 

23 take into account appropriate public health measures 

24 and standards, including departmental measures and 


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1 standards (including Healthy People and National 

2 Public Health Performance Standards). 

3 ‘‘(2) Establishment of national priorities for 

4 prevention and wellness, taking into account unmet 

5 prevention and wellness needs. 

6 ‘‘(3) Establishment of national priorities for re7 search on prevention and wellness, taking into ac8 count unanswered research questions on prevention 

9 and wellness. 

10 ‘‘(4) Identification of health disparities in pre11 vention and wellness. 

12 ‘‘(5) A plan for addressing and implementing 

13 paragraphs (1) through (4). 

14 ‘‘(c) CONSULTATION.—In developing or revising the 

15 strategy under subsection (a), the Secretary shall consult 

16 with the following: 

17 ‘‘(1) The heads of appropriate health agencies 

18 and offices in the Department, including the Office 

19 of the Surgeon General of the Public Health Service, 

20 the Office of Minority Health, and the Office on 

21 Women’s Health. 

22 ‘‘(2) As appropriate, the heads of other Federal 

23 departments and agencies whose programs have a 

24 significant impact upon health (as determined by the 

25 Secretary). 


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1 ‘‘(3) As appropriate, nonprofit and for-profit 

2 entities. 

3 ‘‘(4) The Association of State and Territorial 

4 Health Officials and the National Association of 

5 County and City Health Officials. 

6 ‘‘Subtitle C—Prevention Task 

7 Forces 

8 ‘‘SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERV9 ICES. 

10 ‘‘(a) IN GENERAL.—The Secretary, acting through 

11 the Director of the Agency for Healthcare Research and 

12 Quality, shall establish a permanent task force to be 

13 known as the Task Force on Clinical Preventive Services 

14 (in this section referred to as the ‘Task Force’). 

15 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

16 ‘‘(1) identify clinical preventive services for re17 view; 

18 ‘‘(2) review the scientific evidence related to the 

19 benefits, effectiveness, appropriateness, and costs of 

20 clinical preventive services identified under para21 graph (1) for the purpose of developing, updating, 

22 publishing, and disseminating evidence-based rec23 ommendations on the use of such services; 

24 ‘‘(3) as appropriate, take into account health 

25 disparities in developing, updating, publishing, and 


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1 disseminating evidence-based recommendations on 

2 the use of such services; 

3 ‘‘(4) identify gaps in clinical preventive services 

4 research and evaluation and recommend priority 

5 areas for such research and evaluation; 

6 ‘‘(5) as appropriate, consult with the clinical 

7 prevention stakeholders board in accordance with 

8 subsection (f); 

9 ‘‘(6) as appropriate, consult with the Task 

10 Force on Community Preventive Services established 

11 under section 3132; and 

12 ‘‘(7) as appropriate, in carrying out this sec13 tion, consider the national strategy under section 

14 3121. 

15 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

16 ongoing administrative, research, and technical support 

17 for the operations of the Task Force, including coordi18 nating and supporting the dissemination of the rec19 ommendations of the Task Force. 

20 ‘‘(d) MEMBERSHIP.— 

21 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

22 Force shall be composed of 30 members, appointed 

23 by the Secretary. 

24 ‘‘(2) TERMS.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 appoint members of the Task Force for a term 

3 of 6 years and may reappoint such members, 

4 but the Secretary may not appoint any member 

5 to serve more than a total of 12 years. 

6 ‘‘(B) STAGGERED TERMS.—Notwith7 standing subparagraph (A), of the members 

8 first appointed to serve on the Task Force after 

9 the enactment of this title— 

10 ‘‘(i) 10 shall be appointed for a term 

11 of 2 years; 

12 ‘‘(ii) 10 shall be appointed for a term 

13 of 4 years; and 

14 ‘‘(iii) 10 shall be appointed for a term 

15 of 6 years. 

16 ‘‘(3) QUALIFICATIONS.—Members of the Task 

17 Force shall be appointed from among individuals 

18 who possess expertise in at least one of the following 

19 areas: 

20 ‘‘(A) Health promotion and disease preven21 tion. 

22 ‘‘(B) Evaluation of research and system23 atic evidence reviews. 


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1 ‘‘(C) Application of systematic evidence re2 views to clinical decisionmaking or health pol3 icy. 

4 ‘‘(D) Clinical primary care in child and ad5 olescent health. 

6 ‘‘(E) Clinical primary care in adult health, 

7 including women’s health. 

8 ‘‘(F) Clinical primary care in geriatrics. 

9 ‘‘(G) Clinical counseling and behavioral 

10 services for primary care patients. 

11 ‘‘(4) REPRESENTATION.—In appointing mem12 bers of the Task Force, the Secretary shall ensure 

13 that— 

14 ‘‘(A) all areas of expertise described in 

15 paragraph (3) are represented; and 

16 ‘‘(B) the members of the Task Force in17 clude practitioners who, collectively, have sig18 nificant experience treating racially and eth19 nically diverse populations. 

20 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi21 ciency, the Task Force may delegate authority for con22 ducting reviews and making recommendations to sub23 groups consisting of Task Force members, subject to final 

24 approval by the Task Force. 


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1 ‘‘(f) CLINICAL PREVENTION STAKEHOLDERS

2 BOARD.— 

3 ‘‘(1) IN GENERAL.—The Task Force shall con4 vene a clinical prevention stakeholders board com5 posed of representatives of appropriate public and 

6 private entities with an interest in clinical preventive 

7 services to advise the Task Force on developing, up8 dating, publishing, and disseminating evidence-based 

9 recommendations on the use of clinical preventive 

10 services. 

11 ‘‘(2) MEMBERSHIP.—The members of the clin12 ical prevention stakeholders board shall include rep13 resentatives of the following: 

14 ‘‘(A) Health care consumers and patient 

15 groups. 

16 ‘‘(B) Providers of clinical preventive serv17 ices, including community-based providers. 

18 ‘‘(C) Federal departments and agencies, 

19 including— 

20 ‘‘(i) appropriate health agencies and 

21 offices in the Department, including the 

22 Office of the Surgeon General of the Pub23 lic Health Service, the Office of Minority 

24 Health, and the Office on Women’s 

25 Health; and 


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1 ‘‘(ii) as appropriate, other Federal de2 partments and agencies whose programs 

3 have a significant impact upon health (as 

4 determined by the Secretary). 

5 ‘‘(D) Private health care payors. 

6 ‘‘(3) RESPONSIBILITIES.—In accordance with 

7 subsection (b)(5), the clinical prevention stake8 holders board shall— 

9 ‘‘(A) recommend clinical preventive serv10 ices for review by the Task Force; 

11 ‘‘(B) suggest scientific evidence for consid12 eration by the Task Force related to reviews 

13 undertaken by the Task Force; 

14 ‘‘(C) provide feedback regarding draft rec15 ommendations by the Task Force; and 

16 ‘‘(D) assist with efforts regarding dissemi17 nation of recommendations by the Director of 

18 the Agency for Healthcare Research and Qual19 ity. 

20 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

21 Members of the Task Force or the clinical prevention 

22 stakeholders board shall not be considered employees of 

23 the Federal Government by reason of service on the Task 

24 Force, except members of the Task Force shall be consid25 ered to be special Government employees within the meanVerDate Nov 24 2008 01:43 Jul 15, 2009 Jkt 079200 PO 00000 Frm 00941 Fmt 6652 Sfmt 6201 E:\BILLS\H3200.IH H3200

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1 ing of section 107 of the Ethics in Government Act of 

2 1978 (5 U.S.C. App.) and section 208 of title 18, United 

3 States Code, for the purposes of disclosure and manage4 ment of conflicts of interest under those sections. 

5 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

6 Members of the Task Force or the clinical prevention 

7 stakeholders board shall not receive any pay for service 

8 on the Task Force, but may receive travel expenses, in9 cluding a per diem, in accordance with applicable provi10 sions of subchapter I of chapter 57 of title 5, United 

11 States Code. 

12 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

13 Committee Act (5 U.S.C. App.) except for section 14 of 

14 such Act shall apply to the Task Force to the extent that 

15 the provisions of such Act do not conflict with the provi16 sions of this title. 

17 ‘‘(j) REPORT.—The Secretary shall submit to the 

18 Congress an annual report on the Task Force, including 

19 with respect to gaps identified and recommendations made 

20 under subsection (b)(4). 

21 ‘‘SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE 

22 SERVICES. 

23 ‘‘(a) IN GENERAL.—The Secretary, acting through 

24 the Director of the Centers for Disease Control and Pre25 vention, shall establish a permanent task force to be 


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1 known as the Task Force on Community Preventive Serv2 ices (in this section referred to as the ‘Task Force’). 

3 ‘‘(b) RESPONSIBILITIES.—The Task Force shall— 

4 ‘‘(1) identify community preventive services for 

5 review; 

6 ‘‘(2) review the scientific evidence related to the 

7 benefits, effectiveness, appropriateness, and costs of 

8 community preventive services identified under para9 graph (1) for the purpose of developing, updating, 

10 publishing, and disseminating evidence-based rec11 ommendations on the use of such services; 

12 ‘‘(3) as appropriate, take into account health 

13 disparities in developing, updating, publishing, and 

14 disseminating evidence-based recommendations on 

15 the use of such services; 

16 ‘‘(4) identify gaps in community preventive 

17 services research and evaluation and recommend pri18 ority areas for such research and evaluation; 

19 ‘‘(5) as appropriate, consult with the commu20 nity prevention stakeholders board in accordance 

21 with subsection (f); 

22 ‘‘(6) as appropriate, consult with the Task 

23 Force on Clinical Preventive Services established 

24 under section 3131; and 


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1 ‘‘(7) as appropriate, in carrying out this sec2 tion, consider the national strategy under section 

3 3121. 

4 ‘‘(c) ROLE OF AGENCY.—The Secretary shall provide 

5 ongoing administrative, research, and technical support 

6 for the operations of the Task Force, including coordi7 nating and supporting the dissemination of the rec8 ommendations of the Task Force. 

9 ‘‘(d) MEMBERSHIP.— 

10 ‘‘(1) NUMBER; APPOINTMENT.—The Task 

11 Force shall be composed of 30 members, appointed 

12 by the Secretary. 

13 ‘‘(2) TERMS.— 

14 ‘‘(A) IN GENERAL.—The Secretary shall 

15 appoint members of the Task Force for a term 

16 of 6 years and may reappoint such members, 

17 but the Secretary may not appoint any member 

18 to serve more than a total of 12 years. 

19 ‘‘(B) STAGGERED TERMS.—Notwith20 standing subparagraph (A), of the members 

21 first appointed to serve on the Task Force after 

22 the enactment of this section— 

23 ‘‘(i) 10 shall be appointed for a term 

24 of 2 years; 


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1 ‘‘(ii) 10 shall be appointed for a term 

2 of 4 years; and 

3 ‘‘(iii) 10 shall be appointed for a term 

4 of 6 years. 

5 ‘‘(3) QUALIFICATIONS.—Members of the Task 

6 Force shall be appointed from among individuals 

7 who possess expertise in at least one of the following 

8 areas: 

9 ‘‘(A) Public health. 

10 ‘‘(B) Evaluation of research and system11 atic evidence reviews. 

12 ‘‘(C) Disciplines relevant to community 

13 preventive services, including health promotion; 

14 disease prevention; chronic disease; worksite 

15 health; qualitative and quantitative analysis; 

16 and health economics, policy, law, and statis17 tics. 

18 ‘‘(4) REPRESENTATION.—In appointing mem19 bers of the Task Force, the Secretary— 

20 ‘‘(A) shall ensure that all areas of exper21 tise described in paragraph (3) are represented; 

22 ‘‘(B) shall ensure that such members in23 clude sufficient representatives of each of— 

24 ‘‘(i) State health officers; 

25 ‘‘(ii) local health officers; 


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1 ‘‘(iii) health care practitioners; and 

2 ‘‘(iv) public health practitioners; and 

3 ‘‘(C) shall appoint individuals who, collec4 tively, have significant experience working with 

5 racially and ethnically diverse populations. 

6 ‘‘(e) SUBGROUPS.—As appropriate to maximize effi7 ciency, the Task Force may delegate authority for con8 ducting reviews and making recommendations to sub9 groups consisting of Task Force members, subject to final 

10 approval by the Task Force. 

11 ‘‘(f) COMMUNITY PREVENTION STAKEHOLDERS

12 BOARD.— 

13 ‘‘(1) IN GENERAL.—The Task Force shall con14 vene a community prevention stakeholders board 

15 composed of representatives of appropriate public 

16 and private entities with an interest in community 

17 preventive services to advise the Task Force on de18 veloping, updating, publishing, and disseminating 

19 evidence-based recommendations on the use of com20 munity preventive services. 

21 ‘‘(2) MEMBERSHIP.—The members of the com22 munity prevention stakeholders board shall include 

23 representatives of the following: 

24 ‘‘(A) Health care consumers and patient 

25 groups. 


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1 ‘‘(B) Providers of community preventive 

2 services, including community-based providers. 

3 ‘‘(C) Federal departments and agencies, 

4 including— 

5 ‘‘(i) appropriate health agencies and 

6 offices in the Department, including the 

7 Office of the Surgeon General of the Pub8 lic Health Service, the Office of Minority 

9 Health, and the Office on Women’s 

10 Health; and 

11 ‘‘(ii) as appropriate, other Federal de12 partments and agencies whose programs 

13 have a significant impact upon health (as 

14 determined by the Secretary). 

15 ‘‘(D) Private health care payors. 

16 ‘‘(3) RESPONSIBILITIES.—In accordance with 

17 subsection (b)(5), the community prevention stake18 holders board shall— 

19 ‘‘(A) recommend community preventive 

20 services for review by the Task Force; 

21 ‘‘(B) suggest scientific evidence for consid22 eration by the Task Force related to reviews 

23 undertaken by the Task Force; 

24 ‘‘(C) provide feedback regarding draft rec25 ommendations by the Task Force; and 


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1 ‘‘(D) assist with efforts regarding dissemi2 nation of recommendations by the Director of 

3 the Centers for Disease Control and Prevention. 

4 ‘‘(g) DISCLOSURE AND CONFLICTS OF INTEREST.— 

5 Members of the Task Force or the community prevention 

6 stakeholders board shall not be considered employees of 

7 the Federal Government by reason of service on the Task 

8 Force, except members of the Task Force shall be consid9 ered to be special Government employees within the mean10 ing of section 107 of the Ethics in Government Act of 

11 1978 (5 U.S.C. App.) and section 208 of title 18, United 

12 States Code, for the purposes of disclosure and manage13 ment of conflicts of interest under those sections. 

14 ‘‘(h) NO PAY; RECEIPT OF TRAVEL EXPENSES.— 

15 Members of the Task Force or the community prevention 

16 stakeholders board shall not receive any pay for service 

17 on the Task Force, but may receive travel expenses, in18 cluding a per diem, in accordance with applicable provi19 sions of subchapter I of chapter 57 of title 5, United 

20 States Code. 

21 ‘‘(i) APPLICATION OF FACA.—The Federal Advisory 

22 Committee Act (5 U.S.C. App.) except for section 14 of 

23 such Act shall apply to the Task Force to the extent that 

24 the provisions of such Act do not conflict with the provi25 sions of this title. 


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1 ‘‘(j) REPORT.—The Secretary shall submit to the 

2 Congress an annual report on the Task Force, including 

3 with respect to gaps identified and recommendations made 

4 under subsection (b)(4). 

5 ‘‘Subtitle D—Prevention and 

6 Wellness Research 

7 ‘‘SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIV8 ITY COORDINATION. 

9 ‘‘In conducting or supporting research on prevention 

10 and wellness, the Director of the Centers for Disease Con11 trol and Prevention, the Director of the National Insti12 tutes of Health, and the heads of other agencies within 

13 the Department of Health and Human Services con14 ducting or supporting such research, shall take into con15 sideration the national strategy under section 3121 and 

16 the recommendations of the Task Force on Clinical Pre17 ventive Services under section 3131 and the Task Force 

18 on Community Preventive Services under section 3132. 

19 ‘‘SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RE20 SEARCH GRANTS. 

21 ‘‘(a) IN GENERAL.—The Secretary, acting through 

22 the Director of the Centers for Disease Control and Pre23 vention, shall conduct, or award grants to eligible entities 

24 to conduct, research in priority areas identified by the Sec25 retary in the national strategy under section 3121 or by 


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1 the Task Force on Community Preventive Services as re2 quired by section 3132. 

3 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

4 this section, an entity shall be— 

5 ‘‘(1) a State, local, or tribal department of 

6 health; 

7 ‘‘(2) a public or private nonprofit entity; or 

8 ‘‘(3) a consortium of 2 or more entities de9 scribed in paragraphs (1) and (2). 

10 ‘‘(c) REPORT.—The Secretary shall submit to the 

11 Congress an annual report on the program of research 

12 under this section. 

13 ‘‘Subtitle E—Delivery of Commu14 nity Prevention and Wellness 

15 Services 

16 ‘‘SEC. 3151. COMMUNITY PREVENTION AND WELLNESS 

17 SERVICES GRANTS. 

18 ‘‘(a) IN GENERAL.—The Secretary, acting through 

19 the Director of the Centers for Disease Control and Pre20 vention, shall establish a program for the delivery of com21 munity preventive and wellness services consisting of 

22 awarding grants to eligible entities— 

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1 fied by the Secretary in the national strategy under 

2 section 3121; or 

3 ‘‘(2) to plan such services. 

4 ‘‘(b) ELIGIBILITY.— 

5 ‘‘(1) DEFINITION.—To be eligible for a grant 

6 under this section, an entity shall be— 

7 ‘‘(A) a State, local, or tribal department of 

8 health; 

9 ‘‘(B) a public or private entity; or 

10 ‘‘(C) a consortium of— 

11 ‘‘(i) 2 or more entities described in 

12 subparagraph (A) or (B); and 

13 ‘‘(ii) a community partnership rep14 resenting a Health Empowerment Zone. 

15 ‘‘(2) HEALTH EMPOWERMENT ZONE.—In this 

16 subsection, the term ‘Health Empowerment Zone’ 

17 means an area— 

18 ‘‘(A) in which multiple community preven19 tive and wellness services are implemented in 

20 order to address one or more health disparities, 

21 including those identified by the Secretary in 

22 the national strategy under section 3121; and 

23 ‘‘(B) which is represented by a community 

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1 port and coordination with State, local, or tribal 

2 health departments and includes— 

3 ‘‘(i) a broad cross section of stake4 holders; 

5 ‘‘(ii) residents of the community; and 

6 ‘‘(iii) representatives of entities that 

7 have a history of working within and serv8 ing the community. 

9 ‘‘(c) PREFERENCES.—In awarding grants under this 

10 section, the Secretary shall give preference to entities 

11 that— 

12 ‘‘(1) will address one or more goals or objec13 tives identified by the Secretary in the national 

14 strategy under section 3121; 

15 ‘‘(2) will address significant health disparities, 

16 including those identified by the Secretary in the na17 tional strategy under section 3121; 

18 ‘‘(3) will address unmet community prevention 

19 needs and avoids duplication of effort; 

20 ‘‘(4) have been demonstrated to be effective in 

21 communities comparable to the proposed target com22 munity; 

23 ‘‘(5) will contribute to the evidence base for 

24 community preventive and wellness services; 


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1 ‘‘(6) demonstrate that the community preven2 tive services to be funded will be sustainable; and 

3 ‘‘(7) demonstrate coordination or collaboration 

4 across governmental and nongovernmental partners. 

5 ‘‘(d) HEALTH DISPARITIES.—Of the funds awarded 

6 under this section for a fiscal year, the Secretary shall 

7 award not less than 50 percent for planning or imple8 menting community preventive and wellness services 

9 whose primary purpose is to achieve a measurable reduc10 tion in one or more health disparities, including those 

11 identified by the Secretary in the national strategy under 

12 section 3121. 

13 ‘‘(e) EMPHASIS ON RECOMMENDED SERVICES.—For 

14 fiscal year 2013 and subsequent fiscal years, the Secretary 

15 shall award grants under this section only for planning 

16 or implementing services recommended by the Task Force 

17 on Community Preventive Services under section 3122 or 

18 deemed effective based on a review of comparable rigor 

19 (as determined by the Director of the Centers for Disease 

20 Control and Prevention). 

21 ‘‘(f) PROHIBITED USES OF FUNDS.—An entity that 

22 receives a grant under this section may not use funds pro23 vided through the grant— 

24 ‘‘(1) to build or acquire real property or for 

25 construction; or 


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1 ‘‘(2) for services or planning to the extent that 

2 payment has been made, or can reasonably be ex3 pected to be made— 

4 ‘‘(A) under any insurance policy; 

5 ‘‘(B) under any Federal or State health 

6 benefits program (including titles XIX and XXI 

7 of the Social Security Act); or 

8 ‘‘(C) by an entity which provides health 

9 services on a prepaid basis. 

10 ‘‘(g) REPORT.—The Secretary shall submit to the 

11 Congress an annual report on the program of grants 

12 awarded under this section. 

13 ‘‘(h) DEFINITIONS.—In this section, the term ‘evi14 dence-based’ means that methodologically sound research 

15 has demonstrated a beneficial health effect, in the judg16 ment of the Director of the Centers for Disease Control 

17 and Prevention. 

18 ‘‘Subtitle F—Core Public Health 

19 Infrastructure 

20 ‘‘SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR 

21 STATE, LOCAL, AND TRIBAL HEALTH DEPART22 MENTS. 

23 ‘‘(a) PROGRAM.—The Secretary, acting through the 

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1 tion shall establish a core public health infrastructure pro2 gram consisting of awarding grants under subsection (b). 

3 ‘‘(b) GRANTS.— 

4 ‘‘(1) AWARD.—For the purpose of addressing 

5 core public health infrastructure needs, the Sec6 retary— 

7 ‘‘(A) shall award a grant to each State 

8 health department; and 

9 ‘‘(B) may award grants on a competitive 

10 basis to State, local, or tribal health depart11 ments. 

12 ‘‘(2) ALLOCATION.—Of the total amount of 

13 funds awarded as grants under this subsection for a 

14 fiscal year— 

15 ‘‘(A) not less than 50 percent shall be for 

16 grants to State health departments under para17 graph (1)(A); and 

18 ‘‘(B) not less than 30 percent shall be for 

19 grants to State, local, or tribal health depart20 ments under paragraph (1)(B). 

21 ‘‘(c) USE OF FUNDS.—The Secretary may award a 

22 grant to an entity under subsection (b)(1) only if the enti23 ty agrees to use the grant to address core public health 

24 infrastructure needs, including those identified in the ac25 creditation process under subsection (g). 


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1 ‘‘(d) FORMULA GRANTS TO STATE HEALTH DEPART2 MENTS.—In making grants under subsection (b)(1)(A), 

3 the Secretary shall award funds to each State health de4 partment in accordance with— 

5 ‘‘(1) a formula based on population size; burden 

6 of preventable disease and disability; and core public 

7 health infrastructure gaps, including those identified 

8 in the accreditation process under subsection (g); 

9 and 

10 ‘‘(2) application requirements established by the 

11 Secretary, including a requirement that the State 

12 submit a plan that demonstrates to the satisfaction 

13 of the Secretary that the State’s health department 

14 will— 

15 ‘‘(A) address its highest priority core pub16 lic health infrastructure needs; and 

17 ‘‘(B) as appropriate, allocate funds to local 

18 health departments within the State. 

19 ‘‘(e) COMPETITIVE GRANTS TO STATE, LOCAL, AND

20 TRIBAL HEALTH DEPARTMENTS.—In making grants 

21 under subsection (b)(1)(B), the Secretary shall give pri22 ority to applicants demonstrating core public health infra23 structure needs identified in the accreditation process 

24 under subsection (g). 


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1 ‘‘(f) MAINTENANCE OF EFFORT.—The Secretary 

2 may award a grant to an entity under subsection (b) only 

3 if the entity demonstrates to the satisfaction of the Sec4 retary that— 

5 ‘‘(1) funds received through the grant will be 

6 expended only to supplement, and not supplant, non7 Federal and Federal funds otherwise available to the 

8 entity for the purpose of addressing core public 

9 health infrastructure needs; and 

10 ‘‘(2) with respect to activities for which the 

11 grant is awarded, the entity will maintain expendi12 tures of non-Federal amounts for such activities at 

13 a level not less than the level of such expenditures 

14 maintained by the entity for the fiscal year pre15 ceding the fiscal year for which the entity receives 

16 the grant. 

17 ‘‘(g) ESTABLISHMENT OF A PUBLIC HEALTH AC18 CREDITATION PROGRAM.— 

19 ‘‘(1) IN GENERAL.—The Secretary, acting 

20 through the Director of the Centers for Disease 

21 Control and Prevention, shall— 

22 ‘‘(A) develop, and periodically review and 

23 update, standards for voluntary accreditation of 

24 State, local, or tribal health departments and 

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1 vancing the quality and performance of such de2 partments and laboratories; and 

3 ‘‘(B) implement a program to accredit 

4 such health departments and laboratories in ac5 cordance with such standards. 

6 ‘‘(2) COOPERATIVE AGREEMENT.—The Sec7 retary may enter into a cooperative agreement with 

8 a private nonprofit entity to carry out paragraph 

9 (1). 

10 ‘‘(h) REPORT.—The Secretary shall submit to the 

11 Congress an annual report on progress being made to ac12 credit entities under subsection (g), including— 

13 ‘‘(1) a strategy, including goals and objectives, 

14 for accrediting entities under subsection (g) and 

15 achieving the purpose described in subsection (g)(1); 

16 and 

17 ‘‘(2) identification of gaps in research related to 

18 core public health infrastructure and recommenda19 tions of priority areas for such research. 

20 ‘‘SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND 

21 ACTIVITIES FOR CDC. 

22 ‘‘(a) IN GENERAL.—The Secretary, acting through 

23 the Director of the Centers for Disease Control and Pre24 vention, shall expand and improve the core public health 

25 infrastructure and activities of the Centers for Disease 


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1 Control and Prevention to address unmet and emerging 

2 public health needs. 

3 ‘‘(b) REPORT.—The Secretary shall submit to the 

4 Congress an annual report on the activities funded 

5 through this section. 

6 ‘‘Subtitle G—General Provisions 

7 ‘‘SEC. 3171. DEFINITIONS. 

8 ‘‘In this title: 

9 ‘‘(1) The term ‘core public health infrastruc10 ture’ includes workforce capacity and competency; 

11 laboratory systems; health information, health infor12 mation systems, and health information analysis; 

13 communications; financing; other relevant compo14 nents of organizational capacity; and other related 

15 activities. 

16 ‘‘(2) The terms ‘Department’ and ‘depart17 mental’ refer to the Department of Health and 

18 Human Services. 

19 ‘‘(3) The term ‘health disparities’ includes 

20 health and health care disparities and means popu21 lation-specific differences in the presence of disease, 

22 health outcomes, or access to health care. For pur23 poses of the preceding sentence, a population may be 

24 delineated by race, ethnicity, geographic setting, or 


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1 other population or subpopulation determined appro2 priate by the Secretary. 

3 ‘‘(4) The term ‘tribal’ refers to an Indian tribe, 

4 a Tribal organization, or an Urban Indian organiza5 tion, as such terms are defined in section 4 of the 

6 Indian Health Care Improvement Act.’’. 

7 (b) TRANSITION PROVISIONS APPLICABLE TO TASK

8 FORCES.— 

9 (1) FUNCTIONS, PERSONNEL, ASSETS, LIABIL10 ITIES, AND ADMINISTRATIVE ACTIONS.—All func11 tions, personnel, assets, and liabilities of, and ad12 ministrative actions applicable to, the Preventive 

13 Services Task Force convened under section 915(a) 

14 of the Public Health Service Act and the Task Force 

15 on Community Preventive Services (as such section 

16 and Task Forces were in existence on the day before 

17 the date of the enactment of this Act) shall be trans18 ferred to the Task Force on Clinical Preventive 

19 Services and the Task Force on Community Preven20 tive Services, respectively, established under sections 

21 3121 and 3122 of the Public Health Service Act, as 

22 added by subsection (a). 

23 (2) RECOMMENDATIONS.—All recommendations 

24 of the Preventive Services Task Force and the Task 

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1 istence on the day before the date of the enactment 

2 of this Act, shall be considered to be recommenda3 tions of the Task Force on Clinical Preventive Serv4 ices and the Task Force on Community Preventive 

5 Services, respectively, established under sections 

6 3121 and 3122 of the Public Health Service Act, as 

7 added by subsection (a). 

8 (3) MEMBERS ALREADY SERVING.— 

9 (A) INITIAL MEMBERS.—The Secretary of 

10 Health and Human Services may select those 

11 individuals already serving on the Preventive 

12 Services Task Force and the Task Force on 

13 Community Preventive Services, as in existence 

14 on the day before the date of the enactment of 

15 this Act, to be among the first members ap16 pointed to the Task Force on Clinical Preven17 tive Services and the Task Force on Commu18 nity Preventive Services, respectively, under sec19 tions 3121 and 3122 of the Public Health Serv20 ice Act, as added by subsection (a). 

21 (B) CALCULATION OF TOTAL SERVICE.—In 

22 calculating the total years of service of a mem23 ber of a task force for purposes of section 

24 3131(d)(2)(A) or 3132(d)(2)(A) of the Public 

25 Health Service Act, as added by subsection (a), 


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1 the Secretary of Health and Human Services 

2 shall not include any period of service by the 

3 member on the Preventive Services Task Force 

4 or the Task Force on Community Preventive 

5 Services, respectively, as in existence on the day 

6 before the date of the enactment of this Act. 

7 (c) PERIOD BEFORE COMPLETION OF NATIONAL

8 STRATEGY.—Pending completion of the national strategy 

9 under section 3121 of the Public Health Service Act, as 

10 added by subsection (a), the Secretary of Health and 

11 Human Services, acting through the relevant agency head, 

12 may make a judgment about how the strategy will address 

13 an issue and rely on such judgment in carrying out any 

14 provision of subtitle C, D, E, or F of title XXXI of such 

15 Act, as added by subsection (a), that requires the Sec16 retary— 

17 (1) to take into consideration such strategy; 

18 (2) to conduct or support research or provide 

19 services in priority areas identified in such strategy; 

20 or 

21 (3) to take any other action in reliance on such 

22 strategy. 

23 (d) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (61) of section 3(b) of the In25 dian Health Care Improvement Act (25 U.S.C. 


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1 1602) is amended by striking ‘‘United States Pre2 ventive Services Task Force’’ and inserting ‘‘Task 

3 Force on Clinical Preventive Services’’. 

4 (2) Section 126 of the Medicare, Medicaid, and 

5 SCHIP Benefits Improvement and Protection Act of 

6 2000 (Appendix F of Public Law 106–554) is 

7 amended by striking ‘‘United States Preventive 

8 Services Task Force’’ each place it appears and in9 serting ‘‘Task Force on Clinical Preventive Serv10 ices’’. 

11 (3) Paragraph (7) of section 317D of the Pub12 lic Health Service Act (42 U.S.C. 247b–5) is amend13 ed by striking ‘‘United States Preventive Services 

14 Task Force’’ each place it appears and inserting 

15 ‘‘Task Force on Clinical Preventive Services’’. 

16 (4) Section 915 of the Public Health Service 

17 Act (42 U.S.C. 299b–4) is amended by striking sub18 section (a). 

19 (5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and 

20 (ddd)(1)(B) of section 1861 of the Social Security 

21 Act (42 U.S.C. 1395x) are amended by striking 

22 ‘‘United States Preventive Services Task Force’’ 

23 each place it appears and inserting ‘‘Task Force on 

24 Clinical Preventive Services’’. 


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1 TITLE IV—QUALITY AND 

2 SURVEILLANCE 

3 SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE 

4 DELIVERY OF HEALTH CARE. 

5 (a) IN GENERAL.—Title IX of the Public Health 

6 Service Act (42 U.S.C. 299 et seq.) is amended— 

7 (1) by redesignating part D as part E; 

8 (2) by redesignating sections 931 through 938 

9 as sections 941 through 948, respectively; 

10 (3) in section 938(1), by striking ‘‘931’’ and in11 serting ‘‘941’’; and 

12 (4) by inserting after part C the following: 

13 ‘‘PART D—IMPLEMENTATION OF BEST 

14 PRACTICES IN THE DELIVERY OF HEALTH CARE 

15 ‘‘SEC. 931. CENTER FOR QUALITY IMPROVEMENT. 

16 ‘‘(a) IN GENERAL.—There is established the Center 

17 for Quality Improvement (referred to in this part as the 

18 ‘Center’), to be headed by the Director. 

19 ‘‘(b) PRIORITIZATION.— 

20 ‘‘(1) IN GENERAL.—The Director shall 

21 prioritize areas for the identification, development, 

22 evaluation, and implementation of best practices (in23 cluding innovative methodologies and strategies) for 

24 quality improvement activities in the delivery of 


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1 health care services (in this section referred to as 

2 ‘best practices’). 

3 ‘‘(2) CONSIDERATIONS.—In prioritizing areas 

4 under paragraph (1), the Director shall consider— 

5 ‘‘(A) the priorities established under sec6 tion 1191 of the Social Security Act; and 

7 ‘‘(B) the key health indicators identified by 

8 the Assistant Secretary for Health Information 

9 under section 1709. 

10 ‘‘(c) OTHER RESPONSIBILITIES.—The Director, act11 ing directly or by awarding a grant or contract to an eligi12 ble entity, shall— 

13 ‘‘(1) identify existing best practices under sub14 section (e); 

15 ‘‘(2) develop new best practices under sub16 section (f); 

17 ‘‘(3) evaluate best practices under subsection 

18 (g); 

19 ‘‘(4) implement best practices under subsection 

20 (h); 

21 ‘‘(5) ensure that best practices are identified, 

22 developed, evaluated, and implemented under this 

23 section consistent with standards adopted by the 

24 Secretary under section 3004 for health information 

25 technology used in the collection and reporting of 


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1 quality information (including for purposes of the 

2 demonstration of meaningful use of certified elec3 tronic health record (EHR) technology by physicians 

4 and hospitals under the Medicare program (under 

5 sections 1848(o)(2) and 1886(n)(3), respectively, of 

6 the Social Security Act)); and 

7 ‘‘(6) provide for dissemination of information 

8 and reporting under subsections (i) and (j). 

9 ‘‘(d) ELIGIBILITY.—To be eligible for a grant or con10 tract under subsection (c), an entity shall— 

11 ‘‘(1) be a nonprofit entity; 

12 ‘‘(2) agree to work with a variety of institu13 tional health care providers, physicians, nurses, and 

14 other health care practitioners; and 

15 ‘‘(3) if the entity is not the organization holding 

16 a contract under section 1153 of the Social Security 

17 Act for the area to be served, agree to cooperate 

18 with and avoid duplication of the activities of such 

19 organization. 

20 ‘‘(e) IDENTIFYING EXISTING BEST PRACTICES.—The 

21 Secretary shall identify best practices that are— 

22 ‘‘(1) currently utilized by health care providers 

23 (including hospitals, physician and other clinician 

24 practices, community cooperatives, and other health 


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1 care entities) that deliver consistently high-quality, 

2 efficient health care services; and 

3 ‘‘(2) easily adapted for use by other health care 

4 providers and for use across a variety of health care 

5 settings. 

6 ‘‘(f) DEVELOPING NEW BEST PRACTICES.—The Sec7 retary shall develop best practices that are— 

8 ‘‘(1) based on a review of existing scientific evi9 dence; 

10 ‘‘(2) sufficiently detailed for implementation 

11 and incorporation into the workflow of health care 

12 providers; and 

13 ‘‘(3) designed to be easily adapted for use by 

14 health care providers across a variety of health care 

15 settings. 

16 ‘‘(g) EVALUATION OF BEST PRACTICES.—The Direc17 tor shall evaluate best practices identified or developed 

18 under this section. Such evaluation— 

19 ‘‘(1) shall include determinations of which best 

20 practices— 

21 ‘‘(A) most reliably and effectively achieve 

22 significant progress in improving the quality of 

23 patient care; and 


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1 ‘‘(B) are easily adapted for use by health 

2 care providers across a variety of health care 

3 settings; 

4 ‘‘(2) shall include regular review, updating, and 

5 improvement of such best practices; and 

6 ‘‘(3) may include in-depth case studies or em7 pirical assessments of health care providers (includ8 ing hospitals, physician and other clinician practices, 

9 community cooperatives, and other health care enti10 ties) and simulations of such best practices for de11 terminations under paragraph (1). 

12 ‘‘(h) IMPLEMENTATION OF BEST PRACTICES.— 

13 ‘‘(1) IN GENERAL.—The Director shall enter 

14 into voluntary arrangements with health care pro15 viders (including hospitals and other health facilities 

16 and health practitioners) in a State or region to im17 plement best practices identified or developed under 

18 this section. Such implementation— 

19 ‘‘(A) may include forming collaborative 

20 multi-institutional teams; and 

21 ‘‘(B) shall include an evaluation of the best 

22 practices being implemented, including the 

23 measurement of patient outcomes before, dur24 ing, and after implementation of such best 

25 practices. 


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1 ‘‘(2) PREFERENCES.—In carrying out this sub2 section, the Director shall give priority to health 

3 care providers implementing best practices that— 

4 ‘‘(A) have the greatest impact on patient 

5 outcomes and satisfaction; 

6 ‘‘(B) are the most easily adapted for use 

7 by health care providers across a variety of 

8 health care settings; 

9 ‘‘(C) promote coordination of health care 

10 practitioners across the continuum of care; and 

11 ‘‘(D) engage patients and their families in 

12 improving patient care and outcomes. 

13 ‘‘(i) PUBLIC DISSEMINATION OF INFORMATION.— 

14 The Director shall provide for the public dissemination of 

15 information with respect to best practices and activities 

16 under this section. Such information shall be made avail17 able in appropriate formats and languages to reflect the 

18 varying needs of consumers and diverse levels of health 

19 literacy. 

20 ‘‘(j) REPORT.— 

21 ‘‘(1) IN GENERAL.—The Director shall submit 

22 an annual report to the Congress and the Secretary 

23 on activities under this section. 

24 ‘‘(2) CONTENT.—Each report under paragraph 

25 (1) shall include— 


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1 ‘‘(A) information on activities conducted 

2 pursuant to grants and contracts awarded; 

3 ‘‘(B) summary data on patient outcomes 

4 before, during, and after implementation of best 

5 practices; and 

6 ‘‘(C) recommendations on the adaptability 

7 of best practices for use by health providers.’’. 

8 (b) INITIAL QUALITY IMPROVEMENT ACTIVITIES AND

9 INITIATIVES TO BE IMPLEMENTED.—Until the Director 

10 of the Agency for Healthcare Research and Quality has 

11 established initial priorities under section 931(b) of the 

12 Public Health Service Act, as added by subsection (a), the 

13 Director shall, for purposes of such section, prioritize the 

14 following: 

15 (1) HEALTH CARE-ASSOCIATED INFECTIONS.— 

16 Reducing health care-associated infections, including 

17 infections in nursing homes and outpatient settings. 

18 (2) SURGERY.—Increasing hospital and out19 patient perioperative patient safety, including reduc20 ing surgical-site infections and surgical errors (such 

21 as wrong-site surgery and retained foreign bodies). 

22 (3) EMERGENCY ROOM.—Improving care in 

23 hospital emergency rooms, including through the use 

24 of principles of efficiency of design and delivery to 

25 improve patient flow. 


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1 (4) OBSTETRICS.—Improving the provision of 

2 obstetrical and neonatal care, including the identi3 fication of interventions that are effective in reduc4 ing the risk of preterm and premature labor and the 

5 implementation of best practices for labor and deliv6 ery care. 

7 SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMA8 TION. 

9 (a) ESTABLISHMENT.—Title XVII (42 U.S.C. 300u 

10 et seq.) is amended— 

11 (1) by redesignating sections 1709 and 1710 as 

12 sections 1710 and 1711, respectively; and 

13 (2) by inserting after section 1708 the fol14 lowing: 

15 ‘‘SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMA16 TION. 

17 ‘‘(a) IN GENERAL.—There is established within the 

18 Department an Assistant Secretary for Health Informa19 tion (in this section referred to as the ‘Assistant Sec20 retary’), to be appointed by the Secretary. 

21 ‘‘(b) RESPONSIBILITIES.—The Assistant Secretary 

22 shall— 

23 ‘‘(1) ensure the collection, collation, reporting, 

24 and publishing of information (including full and 

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1 ing the Nation’s health and the performance of the 

2 Nation’s health care; 

3 ‘‘(2) facilitate and coordinate the collection, col4 lation, reporting, and publishing of information re5 garding the Nation’s health and the performance of 

6 the Nation’s health care (other than information de7 scribed in paragraph (1)); 

8 ‘‘(3)(A) develop standards for the collection of 

9 data regarding the Nation’s health and the perform10 ance of the Nation’s health care; and 

11 ‘‘(B) in carrying out subparagraph (A)— 

12 ‘‘(i) ensure appropriate specificity and 

13 standardization for data collection at the na14 tional, regional, State, and local levels; 

15 ‘‘(ii) include standards, as appropriate, for 

16 the collection of accurate data on health and 

17 health care by race, ethnicity, primary lan18 guage, sex, sexual orientation, gender identity, 

19 disability, socioeconomic status, rural, urban, or 

20 other geographic setting, and any other popu21 lation or subpopulation determined appropriate 

22 by the Secretary; 

23 ‘‘(iii) ensure, with respect to data on race 

24 and ethnicity, consistency with the 1997 Office 

25 of Management and Budget Standards for 


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1 Maintaining, Collecting and Presenting Federal 

2 Data on Race and Ethnicity (or any successor 

3 standards); and 

4 ‘‘(iv) in consultation with the Director of 

5 the Office of Minority Health, and the Director 

6 of the Office of Civil Rights, of the Department, 

7 develop standards for the collection of data on 

8 health and health care with respect to data on 

9 primary language; 

10 ‘‘(4) provide support to Federal departments 

11 and agencies whose programs have a significant im12 pact upon health (as determined by the Secretary) 

13 for the collection and collation of information de14 scribed in paragraphs (1) and (2); 

15 ‘‘(5) ensure the sharing of information de16 scribed in paragraphs (1) and (2) among the agen17 cies of the Department; 

18 ‘‘(6) facilitate the sharing of information de19 scribed in paragraphs (1) and (2) by Federal depart20 ments and agencies whose programs have a signifi21 cant impact upon health (as determined by the Sec22 retary); 

23 ‘‘(7) identify gaps in information described in 

24 paragraphs (1) and (2) and the appropriate agency 

25 or entity to address such gaps; 


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1 ‘‘(8) facilitate and coordinate identification and 

2 monitoring by the agencies of the Department of 

3 health disparities to inform program and policy ef4 forts to reduce such disparities, including facilitating 

5 and funding analyses conducted in cooperation with 

6 the Social Security Administration, the Bureau of 

7 the Census, and other appropriate agencies and enti8 ties; 

9 ‘‘(9) consistent with privacy, proprietary, and 

10 other appropriate safeguards, facilitate public acces11 sibility of datasets (such as de-identified Medicare 

12 datasets or publicly available data on key health in13 dicators) by means of the Internet; and 

14 ‘‘(10) award grants or contracts for the collec15 tion and collation of information described in para16 graphs (1) and (2) (including through statewide sur17 veys that provide standardized information). 

18 ‘‘(c) KEY HEALTH INDICATORS.— 

19 ‘‘(1) IN GENERAL.—In carrying out subsection 

20 (b)(1), the Assistant Secretary shall— 

21 ‘‘(A) identify, and reassess at least once 

22 every 3 years, key health indicators described in 

23 such subsection; 

24 ‘‘(B) publish statistics on such key health 

25 indicators for the public— 


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1 ‘‘(i) not less than annually; and 

2 ‘‘(ii) on a supplemental basis when3 ever warranted by— 

4 ‘‘(I) the rate of change for a key 

5 health indicator; or 

6 ‘‘(II) the need to inform policy 

7 regarding the Nation’s health and the 

8 performance of the Nation’s health 

9 care; and 

10 ‘‘(C) ensure consistency with the national 

11 strategy developed by the Secretary under sec12 tion 3121 and consideration of the indicators 

13 specified in the reports under sections 308, 

14 903(a)(6), and 913(b)(2). 

15 ‘‘(2) RELEASE OF KEY HEALTH INDICATORS.— 

16 The regulations, rules, processes, and procedures of 

17 the Office of Management and Budget governing the 

18 review, release, and dissemination of key health indi19 cators shall be the same as the regulations, rules, 

20 processes, and procedures of the Office of Manage21 ment and Budget governing the review, release, and 

22 dissemination of Principal Federal Economic Indica23 tors (or equivalent statistical data) by the Bureau of 

24 Labor Statistics. 


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1 ‘‘(d) COORDINATION.—In carrying out this section, 

2 the Assistant Secretary shall coordinate with— 

3 ‘‘(1) public and private entities that collect and 

4 disseminate information on health and health care, 

5 including foundations; and 

6 ‘‘(2) the head of the Office of the National Co7 ordinator for Health Information Technology to en8 sure optimal use of health information technology. 

9 ‘‘(e) REQUEST FOR INFORMATION FROM OTHER DE10 PARTMENTS AND AGENCIES.—Consistent with applicable 

11 law, the Assistant Secretary may secure directly from any 

12 Federal department or agency information necessary to 

13 enable the Assistant Secretary to carry out this section. 

14 ‘‘(f) REPORT.— 

15 ‘‘(1) SUBMISSION.—The Assistant Secretary 

16 shall submit to the Secretary and the Congress an 

17 annual report containing— 

18 ‘‘(A) a description of national, regional, or 

19 State changes in health or health care, as re20 flected by the key health indicators identified 

21 under subsection (c)(1); 

22 ‘‘(B) a description of gaps in the collection, 

23 collation, reporting, and publishing of informa24 tion regarding the Nation’s health and the per25 formance of the Nation’s health care; 


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1 ‘‘(C) recommendations for addressing such 

2 gaps and identification of the appropriate agen3 cy within the Department or other entity to ad4 dress such gaps; 

5 ‘‘(D) a description of analyses of health 

6 disparities, including the results of completed 

7 analyses, the status of ongoing longitudinal 

8 studies, and proposed or planned research; and 

9 ‘‘(E) a plan for actions to be taken by the 

10 Assistant Secretary to address gaps described 

11 in subparagraph (B). 

12 ‘‘(2) CONSIDERATION.—In preparing a report 

13 under paragraph (1), the Assistant Secretary shall 

14 take into consideration the findings and conclusions 

15 in the reports under sections 308, 903(a)(6), and 

16 913(b)(2). 

17 ‘‘(g) PROPRIETARY AND PRIVACY PROTECTIONS.— 

18 Nothing in this section shall be construed to affect appli19 cable proprietary or privacy protections. 

20 ‘‘(h) CONSULTATION.—In carrying out this section, 

21 the Assistant Secretary shall consult with— 

22 ‘‘(1) the heads of appropriate health agencies 

23 and offices in the Department, including the Office 

24 of the Surgeon General of the Public Health Service, 


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1 the Office of Minority Health, and the Office on 

2 Women’s Health; and 

3 ‘‘(2) as appropriate, the heads of other Federal 

4 departments and agencies whose programs have a 

5 significant impact upon health (as determined by the 

6 Secretary). 

7 ‘‘(i) DEFINITION.—In this section: 

8 ‘‘(1) The terms ‘agency’ and ‘agencies’ include 

9 an epidemiology center established under section 214 

10 of the Indian Health Care Improvement Act. 

11 ‘‘(2) The term ‘Department’ means the Depart12 ment of Health and Human Services. 

13 ‘‘(3) The term ‘health disparities’ has the 

14 meaning given to such term in section 3171.’’. 

15 (b) OTHER COORDINATION RESPONSIBILITIES.— 

16 Title III (42 U.S.C. 241 et seq.) is amended— 

17 (1) in paragraphs (1) and (2) of section 304(c) 

18 (42 U.S.C. 242b(c)), by inserting ‘‘, acting through 

19 the Assistant Secretary for Health Information,’’ 

20 after ‘‘The Secretary’’ each place it appears; and 

21 (2) in section 306(j) (42 U.S.C. 242k(j)), by in22 serting ‘‘, acting through the Assistant Secretary for 

23 Health Information,’’ after ‘‘of this section, the Sec24 retary’’. 


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1 SEC. 2403. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 799C, as added and amended, is further 

3 amended by adding at the end the following: 

4 ‘‘(e) QUALITY AND SURVEILLANCE.—For the pur5 pose of carrying out part D of title IX and section 1709, 

6 in addition to any other amounts authorized to be appro7 priated for such purpose, there is authorized to be appro8 priated, out of any monies in the Public Health Invest9 ment Fund, $300,000,000 for each of fiscal years 2010 

10 through 2014 and $330,000,000 for each of fiscal years 

11 2015 through 2019.’’. 

12 TITLE V—OTHER PROVISIONS 

13 Subtitle A—Drug Discount for 

14 Rural and Other Hospitals 

15 SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM. 

16 (a) EXPANSION OF COVERED ENTITIES RECEIVING

17 DISCOUNTED PRICES.—Section 340B(a)(4) (42 U.S.C. 

18 256b(a)(4)) is amended by adding at the end the fol19 lowing: 

20 ‘‘(M) A children’s hospital excluded from 

21 the Medicare prospective payment system pur22 suant to section 1886(d)(1)(B)(iii) of the Social 

23 Security Act which would meet the require24 ments of subparagraph (L), including the dis25 proportionate share adjustment percentage re26 quirement under subparagraph (L)(ii), if the 


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1 hospital were a subsection (d) hospital as de2 fined in section 1886(d)(1)(B) of the Social Se3 curity Act. 

4 ‘‘(N) An entity that is a critical access hos5 pital (as determined under section 1820(c)(2) 

6 of the Social Security Act). 

7 ‘‘(O) An entity receiving funds under title 

8 V of the Social Security Act (relating to mater9 nal and child health) for the provision of health 

10 services. 

11 ‘‘(P) An entity receiving funds under sub12 part I of part B of title XIX of the Public 

13 Health Service Act (relating to comprehensive 

14 mental health services) for the provision of com15 munity mental health services. 

16 ‘‘(Q) An entity receiving funds under sub17 part II of such part B (relating to the preven18 tion and treatment of substance abuse) for the 

19 provision of treatment services for substance 

20 abuse. 

21 ‘‘(R) An entity that is a Medicare-depend22 ent, small rural hospital (as defined in section 

23 1886(d)(5)(G)(iv) of the Social Security Act). 


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1 ‘‘(S) An entity that is a sole community 

2 hospital (as defined in section 

3 1886(d)(5)(D)(iii) of the Social Security Act). 

4 ‘‘(T) An entity that is classified as a rural 

5 referral center under section 1886(d)(5)(C) of 

6 the Social Security Act.’’. 

7 (b) PROHIBITION ON GROUP PURCHASING ARRANGE8 MENTS.—Section 340B(a) (42 U.S.C. 256b(a)) is amend9 ed— 

10 (1) in paragraph (4)(L)— 

11 (A) by adding ‘‘and’’ at the end of clause 

12 (i); 

13 (B) by striking ‘‘; and’’ at the end of 

14 clause (ii) and inserting a period; and 

15 (C) by striking clause (iii); 

16 (2) in paragraph (5), by redesignating subpara17 graphs (C) and (D) as subparagraphs (D) and (E), 

18 respectively, and by inserting after subparagraph 

19 (B) the following: 

20 ‘‘(C) PROHIBITING USE OF GROUP PUR21 CHASING ARRANGEMENTS.— 

22 ‘‘(i) A hospital described in subpara23 graph (L), (M), (N), (R), (S), or (T) of 

24 paragraph (4) shall not obtain covered out25 patient drugs through a group purchasing 


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1 organization or other group purchasing ar2 rangement, except as permitted or pro3 vided pursuant to clause (ii). 

4 ‘‘(ii) The Secretary shall establish rea5 sonable exceptions to the requirement of 

6 clause (i)— 

7 ‘‘(I) with respect to a covered 

8 outpatient drug that is unavailable to 

9 be purchased through the program 

10 under this section due to a drug 

11 shortage problem, manufacturer non12 compliance, or any other reason be13 yond the hospital’s control; 

14 ‘‘(II) to facilitate generic substi15 tution when a generic covered out16 patient drug is available at a lower 

17 price; and 

18 ‘‘(III) to reduce in other ways 

19 the administrative burdens of man20 aging both inventories of drugs ob21 tained under this section and not 

22 under this section, if such exception 

23 does not create a duplicate discount 

24 problem in violation of subparagraph 


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1 (A) or a diversion problem in violation 

2 of subparagraph (B).’’. 

3 SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT 

4 DRUGS. 

5 (a) IN GENERAL.—Section 340B (42 U.S.C. 256b) 

6 is amended— 

7 (1) in subsection (b)— 

8 (A) by striking ‘‘In this section, the terms’’ 

9 and inserting the following: ‘‘In this section: 

10 ‘‘(1) IN GENERAL.—The terms’’; and 

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

12 paragraph: 

13 ‘‘(2) COVERED DRUG.—The term ‘covered 

14 drug’— 

15 ‘‘(A) means a covered outpatient drug (as 

16 defined in section 1927(k)(2) of the Social Se17 curity Act); and 

18 ‘‘(B) includes, notwithstanding the section 

19 1927(k)(3)(A) of such Act, a drug used in con20 nection with an inpatient or outpatient service 

21 provided by a hospital described in subpara22 graph (L), (M), (N), (R), (S), or (T) of sub23 section (a)(4) that is enrolled to participate in 

24 the drug discount program under this section.’’; 

25 and 


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1 (2) in paragraphs (5), (7), and (9) of sub2 section (a), by striking ‘‘outpatient’’ each place it 

3 appears. 

4 (b) MEDICAID CREDITS ON INPATIENT DRUGS.— 

5 Subsection (c) of section 340B (42 U.S.C. 256b(c)) is 

6 amended to read as follows: 

7 ‘‘(c) MEDICAID CREDITS ON INPATIENT DRUGS.— 

8 ‘‘(1) IN GENERAL.—For the cost reporting pe9 riod covered by the most recently filed Medicare cost 

10 report under title XVIII of the Social Security Act, 

11 a hospital described in subparagraph (L), (M), (N), 

12 (R), (S), or (T) of subsection (a)(4) and enrolled to 

13 participate in the drug discount program under this 

14 section shall provide to each State under its plan 

15 under title XIX of such Act— 

16 ‘‘(A) a credit on the estimated annual 

17 costs to such hospital of single source and inno18 vator multiple source drugs provided to Med19 icaid beneficiaries for inpatient use; and 

20 ‘‘(B) a credit on the estimated annual 

21 costs to such hospital of noninnovator multiple 

22 source drugs provided to Medicaid beneficiaries 

23 for inpatient use. 

24 ‘‘(2) AMOUNT OF CREDITS.— 


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1 ‘‘(A) SINGLE SOURCE AND INNOVATOR

2 MULTIPLE SOURCE DRUGS.—For purposes of 

3 paragraph (1)(A)— 

4 ‘‘(i) the credit under such paragraph 

5 shall be equal to the product of— 

6 ‘‘(I) the annual value of single 

7 source and innovator multiple source 

8 drugs purchased under this section by 

9 the hospital based on the drugs’ aver10 age manufacturer price; 

11 ‘‘(II) the estimated percentage of 

12 the hospital’s drug purchases attrib13 utable to Medicaid beneficiaries for in14 patient use; and 

15 ‘‘(III) the minimum rebate per16 centage described in section 

17 1927(c)(1)(B) of the Social Security 

18 Act; 

19 ‘‘(ii) the reference in clause (i)(I) to 

20 the annual value of single source and inno21 vator multiple source drugs purchased 

22 under this section by the hospital based on 

23 the drugs’ average manufacturer price 

24 shall be equal to the sum of— 


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1 ‘‘(I) the annual quantity of each 

2 single source and innovator multiple 

3 source drug purchased during the cost 

4 reporting period, multiplied by 

5 ‘‘(II) the average manufacturer 

6 price for that drug; 

7 ‘‘(iii) the reference in clause (i)(II) to 

8 the estimated percentage of the hospital’s 

9 drug purchases attributable to Medicaid 

10 beneficiaries for inpatient use; shall be 

11 equal to— 

12 ‘‘(I) the Medicaid inpatient drug 

13 charges as reported on the hospital’s 

14 most recently filed Medicare cost re15 port, divided by 

16 ‘‘(II) total drug charges reported 

17 on the cost report; and 

18 ‘‘(iv) the terms ‘single source drug’ 

19 and ‘innovator multiple source drug’ have 

20 the meanings given such terms in section 

21 1927(k)(7) of the Social Security Act. 

22 ‘‘(B) NONINNOVATOR MULTIPLE SOURCE

23 DRUGS.—For purposes of paragraph (1)(B)— 

24 ‘‘(i) the credit under such paragraph 

25 shall be equal to the product of— 


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1 ‘‘(I) the annual value of noninno2 vator multiple source drugs purchased 

3 under this section by the hospital 

4 based on the drugs’ average manufac5 turer price; 

6 ‘‘(II) the estimated percentage of 

7 the hospital’s drug purchases attrib8 utable to Medicaid beneficiaries for in9 patient use; and 

10 ‘‘(III) the applicable percentage 

11 as defined in section 1927(c)(3)(B) of 

12 the Social Security Act; 

13 ‘‘(ii) the reference in clause (i)(I) to 

14 the annual value of noninnovator multiple 

15 source drugs purchased under this section 

16 by the hospital based on the drugs’ average 

17 manufacturer price shall be equal to the 

18 sum of— 

19 ‘‘(I) the annual quantity of each 

20 noninnovator multiple source drug 

21 purchased during the cost reporting 

22 period, multiplied by 

23 ‘‘(II) the average manufacturer 

24 price for that drug; 


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1 ‘‘(iii) the reference in clause (i)(II) to 

2 the estimated percentage of the hospital’s 

3 drug purchases attributable to Medicaid 

4 beneficiaries for inpatient use shall be 

5 equal to— 

6 ‘‘(I) the Medicaid inpatient drug 

7 charges as reported on the hospital’s 

8 most recently filed Medicare cost re9 port, divided by 

10 ‘‘(II) total drug charges reported 

11 on the cost report; and 

12 ‘‘(iv) the term ‘noninnovator multiple 

13 source drug’ has the meaning given such 

14 term in section 1927(k)(7) of the Social 

15 Security Act. 

16 ‘‘(3) CALCULATION OF CREDITS.— 

17 ‘‘(A) IN GENERAL.—Each State calculates 

18 credits under paragraph (1) and informs hos19 pitals of amount under section 1927(a)(5)(D) 

20 of the Social Security Act. 

21 ‘‘(B) HOSPITAL PROVISION OF INFORMA22 TION.—Not later than 30 days after the date of 

23 the filing of the hospital’s most recently filed 

24 Medicare cost report, the hospital shall provide 

25 the State with the information described in 


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1 paragraphs (2)(A)(ii) and (2)(B)(ii). With re2 spect to each drug purchased during the cost 

3 reporting period, the hospital shall provide the 

4 dosage form, strength, package size, date of 

5 purchase and the number of units purchased. 

6 ‘‘(4) PAYMENT DEADLINE.—The credits pro7 vided by a hospital under paragraph (1) shall be 

8 paid within 60 days after receiving the information 

9 specified in paragraph (3)(A). 

10 ‘‘(5) OPT OUT.—A hospital shall not be re11 quired to provide the Medicaid credit required under 

12 paragraph (1) if it can demonstrate to the State 

13 that it will lose reimbursement under the State plan 

14 resulting from the extension of discounts to inpa15 tient drugs under subsection (b)(2) and that the loss 

16 of reimbursement will exceed the amount of the 

17 credit otherwise owed by the hospital. 

18 ‘‘(6) OFFSET AGAINST MEDICAL ASSISTANCE.— 

19 Amounts received by a State under this subsection 

20 in any quarter shall be considered to be a reduction 

21 in the amount expended under the State plan in the 

22 quarter for medical assistance for purposes of sec23 tion 1903(a)(1) of the Social Security Act.’’. 

24 (c) CONFORMING AMENDMENTS.—Section 1927 of 

25 the Social Security Act (42 U.S.C. 1396r–8) is amended— 


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1 (1) in subsection (a)(5)(A), by striking ‘‘covered 

2 outpatient drugs’’ and inserting ‘‘covered drugs (as 

3 defined in section 340B(b)(2) of the Public Health 

4 Service Act)’’; 

5 (2) in subsection (a)(5), by striking subpara6 graph (D) and inserting the following: 

7 ‘‘(D) STATE RESPONSIBILITY FOR CALCU8 LATING HOSPITAL CREDITS.—The State shall 

9 calculate the credits owed by the hospital under 

10 paragraph (1) of section 340B(c) of the Public 

11 Health Service Act and provide the hospital 

12 with both the amounts and an explanation of 

13 how it calculated the credits. In performing the 

14 calculations specified in paragraphs (2)(A)(ii) 

15 and (2)(B)(ii) of such section, the State shall 

16 use the average manufacturer price applicable 

17 to the calendar quarter in which the drug was 

18 purchased by the hospital.’’; and 

19 (3) in subsection (k)(1)— 

20 (A) in subparagraph (A), by striking ‘‘sub21 paragraph (B)’’ and inserting ‘‘subparagraphs 

22 (B) and (D)’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(D) CALCULATION FOR COVERED

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1 fined in section 340B(b)(2) of the Public 

2 Health Service Act), the average manufacturer 

3 price shall be determined in accordance with 

4 subparagraph (A) except that, in the event a 

5 covered drug is not distributed to the retail 

6 pharmacy class of trade, it shall mean the aver7 age price paid to the manufacturer for the drug 

8 in the United States by wholesalers for drugs 

9 distributed to the acute care class of trade, 

10 after deducting customary prompt pay dis11 counts.’’. 

12 SEC. 2503. EFFECTIVE DATE. 

13 (a) IN GENERAL.—The amendments made by this 

14 subtitle shall take effect on July 1, 2010, and shall apply 

15 to drugs dispensed on or after such date. 

16 (b) EFFECTIVENESS.—The amendments made by 

17 this subtitle shall be effective, and shall be taken into ac18 count in determining whether a manufacturer is deemed 

19 to meet the requirements of section 340B(a) of the Public 

20 Health Service Act (42 U.S.C. 256b(a)) and of section 

21 1927(a)(5) of the Social Security Act (42 U.S.C. 1396r– 

22 8(a)(5)), notwithstanding any other provision of law. 


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1 Subtitle B—School-Based Health 

2 Clinics 

3 SEC. 2511. SCHOOL-BASED HEALTH CLINICS. 

4 (a) IN GENERAL.—Part Q of title III (42 U.S.C. 

5 280h et seq.) is amended by adding at the end the fol6 lowing: 

7 ‘‘SEC. 399Z–1. SCHOOL-BASED HEALTH CLINICS. 

8 ‘‘(a) PROGRAM.—The Secretary shall establish a 

9 school-based health clinic program consisting of awarding 

10 grants to eligible entities to support the operation of 

11 school-based health clinics (referred to in this section as 

12 ‘SBHCs’). 

13 ‘‘(b) ELIGIBILITY.—To be eligible for a grant under 

14 this section, an entity shall— 

15 ‘‘(1) be an SBHC (as defined in subsection 

16 (l)(4)); and 

17 ‘‘(2) submit an application at such time, in 

18 such manner, and containing such information as 

19 the Secretary may require, including at a min20 imum— 

21 ‘‘(A) evidence that the applicant meets all 

22 criteria necessary to be designated as an 

23 SBHC; 

24 ‘‘(B) evidence of local need for the services 

25 to be provided by the SBHC; 


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1 ‘‘(C) an assurance that— 

2 ‘‘(i) SBHC services will be provided in 

3 accordance with Federal, State, and local 

4 laws governing— 

5 ‘‘(I) obtaining parental or guard6 ian consent; and 

7 ‘‘(II) patient privacy and student 

8 records, including section 264 of the 

9 Health Insurance Portability and Ac10 countability Act of 1996 and section 

11 444 of the General Education Provi12 sions Act; 

13 ‘‘(ii) the SBHC has established and 

14 maintains collaborative relationships with 

15 other health care providers in the 

16 catchment area of the SBHC; 

17 ‘‘(iii) the SBHC will provide on-site 

18 access during the academic day when 

19 school is in session and has an established 

20 network of support and access to services 

21 with backup health providers when the 

22 school or SBHC is closed; 

23 ‘‘(iv) the SBHC will be integrated into 

24 the school environment and will coordinate 

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1 sonnel and other community providers co2 located at the school; and 

3 ‘‘(v) the SBHC sponsoring facility as4 sumes all responsibility for the SBHC ad5 ministration, operations, and oversight; 

6 and 

7 ‘‘(D) such other information as the Sec8 retary may require. 

9 ‘‘(c) USE OF FUNDS.—Funds awarded under a grant 

10 under this section may be used for— 

11 ‘‘(1) providing training related to the provision 

12 of comprehensive primary health services and addi13 tional health services; 

14 ‘‘(2) the management and operation of SBHC 

15 programs; and 

16 ‘‘(3) the payment of salaries for health profes17 sionals and other appropriate SBHC personnel. 

18 ‘‘(d) CONSIDERATION OF NEED.—In determining the 

19 amount of a grant under this section, the Secretary shall 

20 take into consideration— 

21 ‘‘(1) the financial need of the SBHC; 

22 ‘‘(2) State, local, or other sources of funding 

23 provided to the SBHC; and 

24 ‘‘(3) other factors as determined appropriate by 

25 the Secretary. 


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1 ‘‘(e) PREFERENCES.—In awarding grants under this 

2 section, the Secretary shall give preference to SBHCs that 

3 have a demonstrated record of service to the following: 

4 ‘‘(1) A high percentage of medically under5 served children and adolescents. 

6 ‘‘(2) Communities or populations in which chil7 dren and adolescents have difficulty accessing health 

8 and mental health services. 

9 ‘‘(3) Communities with high percentages of chil10 dren and adolescents who are uninsured, under11 insured, or eligible for medical assistance under Fed12 eral or State health benefits programs (including ti13 tles XIX and XXI of the Social Security Act). 

14 ‘‘(f) MATCHING REQUIREMENT.—The Secretary may 

15 award a grant to an SBHC only if the SBHC agrees to 

16 provide, from non-Federal sources, an amount equal to 20 

17 percent of the amount of the grant (which may be pro18 vided in cash or in kind) to carry out the activities sup19 ported by the grant. 

20 ‘‘(g) SUPPLEMENT, NOT SUPPLANT.—The Secretary 

21 may award a grant to an SBHC under this section only 

22 if the SBHC demonstrates to the satisfaction of the Sec23 retary that funds received through the grant will be ex24 pended only to supplement, and not supplant, non-Federal 

25 and Federal funds otherwise available to the SBHC for 


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1 operation of the SBHC (including each activity described 

2 in paragraph (1) or (2) of subsection (c)). 

3 ‘‘(h) PAYOR OF LAST RESORT.—The Secretary may 

4 award a grant to an SBHC under this section only if the 

5 SBHC demonstrates to the satisfaction of the Secretary 

6 that funds received through the grant will not be expended 

7 for any activity to the extent that payment has been made, 

8 or can reasonably be expected to be made— 

9 ‘‘(1) under any insurance policy; 

10 ‘‘(2) under any Federal or State health benefits 

11 program (including titles XIX and XXI of the Social 

12 Security Act); or 

13 ‘‘(3) by an entity which provides health services 

14 on a prepaid basis. 

15 ‘‘(i) REGULATIONS REGARDING REIMBURSEMENT

16 FOR HEALTH SERVICES.—The Secretary shall issue regu17 lations regarding the reimbursement for health services 

18 provided by SBHCs to individuals eligible to receive such 

19 services through the program under this section, including 

20 reimbursement under any insurance policy or any Federal 

21 or State health benefits program (including titles XIX and 

22 XXI of the Social Security Act). 

23 ‘‘(j) TECHNICAL ASSISTANCE.—The Secretary shall 

24 provide (either directly or by grant or contract) technical 

25 and other assistance to SBHCs to assist such SBHCs to 


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1 meet the requirements of this section. Such assistance 

2 may include fiscal and program management assistance, 

3 training in fiscal and program management, operational 

4 and administrative support, and the provision of informa5 tion to the SBHCs of the variety of resources available 

6 under this title and how those resources can be best used 

7 to meet the health needs of the communities served by 

8 the SBHCs. 

9 ‘‘(k) EVALUATION; REPORT.—The Secretary shall— 

10 ‘‘(1) develop and implement a plan for evalu11 ating SBHCs and monitoring quality performances 

12 under the awards made under this section; and 

13 ‘‘(2) submit to the Congress on an annual basis 

14 a report on the program under this section. 

15 ‘‘(l) DEFINITIONS.—In this section: 

16 ‘‘(1) COMPREHENSIVE PRIMARY HEALTH SERV17 ICES.—The term ‘comprehensive primary health 

18 services’ means the core services offered by SBHCs, 

19 which shall include the following: 

20 ‘‘(A) PHYSICAL.—Comprehensive health 

21 assessments, diagnosis, and treatment of minor, 

22 acute, and chronic medical conditions and refer23 rals to, and follow-up for, specialty care. 

24 ‘‘(B) MENTAL HEALTH.—Mental health 

25 assessments, crisis intervention, counseling, 


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1 treatment, and referral to a continuum of serv2 ices including emergency psychiatric care, com3 munity support programs, inpatient care, and 

4 outpatient programs. 

5 ‘‘(C) OPTIONAL SERVICES.—Additional 

6 services, which may include oral health, social, 

7 and age-appropriate health education services, 

8 including nutritional counseling. 

9 ‘‘(2) MEDICALLY UNDERSERVED CHILDREN

10 AND ADOLESCENTS.—The term ‘medically under11 served children and adolescents’ means a population 

12 of children and adolescents who are residents of an 

13 area designated by the Secretary as an area with a 

14 shortage of personal health services and health in15 frastructure for such children and adolescents. 

16 ‘‘(3) SCHOOL-BASED HEALTH CLINIC.—The 

17 term ‘school-based health clinic’ means a health clin18 ic that— 

19 ‘‘(A) is located in, or is adjacent to, a 

20 school facility of a local educational agency; 

21 ‘‘(B) is organized through school, commu22 nity, and health provider relationships; 

23 ‘‘(C) is administered by a sponsoring facil24 ity; and 


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1 ‘‘(D) provides, at a minimum, comprehen2 sive primary health services during school hours 

3 to children and adolescents by health profes4 sionals in accordance with State and local laws 

5 and regulations, established standards, and 

6 community practice. 

7 ‘‘(4) SPONSORING FACILITY.—The term ‘spon8 soring facility’ is— 

9 ‘‘(A) a hospital; 

10 ‘‘(B) a public health department; 

11 ‘‘(C) a community health center; 

12 ‘‘(D) a nonprofit health care agency; 

13 ‘‘(E) a local educational agency; or 

14 ‘‘(F) a program administered by the In15 dian Health Service or the Bureau of Indian 

16 Affairs or operated by an Indian tribe or a trib17 al organization under the Indian Self-Deter18 mination and Education Assistance Act, a Na19 tive Hawaiian entity, or an urban Indian pro20 gram under title V of the Indian Health Care 

21 Improvement Act. 

22 ‘‘(m) AUTHORIZATION OF APPROPRIATIONS.—For 

23 purposes of carrying out this section, there are authorized 

24 to be appropriated $50,000,000 for fiscal year 2010 and 


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1 such sums as may be necessary for each of the fiscal years 

2 2011 through 2014.’’. 

3 (b) EFFECTIVE DATE.—The Secretary of Health and 

4 Human Services shall begin awarding grants under section 

5 399Z–1 of the Public Health Service Act, as added by sub6 section (b), not later than July 1, 2010, without regard 

7 to whether or not final regulations have been issued under 

8 section 399Z–1(h) of such Act. 

9 Subtitle C—National Medical 

10 Device Registry 

11 SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY. 

12 (a) REGISTRY.— 

13 (1) IN GENERAL.—Section 519 of the Federal 

14 Food, Drug, and Cosmetic Act (21 U.S.C. 360i) is 

15 amended— 

16 (A) by redesignating subsection (g) as sub17 section (h); and 

18 (B) by inserting after subsection (f) the 

19 following: 

20 ‘‘National Medical Device Registry 

21 ‘‘(g)(1) The Secretary shall establish a national med22 ical device registry (in this subsection referred to as the 

23 ‘registry’) to facilitate analysis of postmarket safety and 

24 outcomes data on each device that— 

25 ‘‘(A) is or has been used in or on a patient; and 


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1 ‘‘(B) is— 

2 ‘‘(i) a class III device; or 

3 ‘‘(ii) a class II device that is implantable, 

4 life-supporting, or life-sustaining. 

5 ‘‘(2) In developing the registry, the Secretary shall, 

6 in consultation with the Commissioner of Food and Drugs, 

7 the Administrator of the Centers for Medicare & Medicaid 

8 Services, the head of the Office of the National Coordi9 nator for Health Information Technology, and the Sec10 retary of Veterans Affairs, determine the best methods 

11 for— 

12 ‘‘(A) including in the registry, in a manner con13 sistent with subsection (f), appropriate information 

14 to identify each device described in paragraph (1) by 

15 type, model, and serial number or other unique iden16 tifier; 

17 ‘‘(B) validating methods for analyzing patient 

18 safety and outcomes data from multiple sources and 

19 for linking such data with the information included 

20 in the registry as described in subparagraph (A), in21 cluding, to the extent feasible, use of— 

22 ‘‘(i) data provided to the Secretary under 

23 other provisions of this chapter; and 

24 ‘‘(ii) information from public and private 

25 sources identified under paragraph (3); 


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1 ‘‘(C) integrating the activities described in this 

2 subsection with— 

3 ‘‘(i) activities under paragraph (3) of sec4 tion 505(k) (relating to active postmarket risk 

5 identification); 

6 ‘‘(ii) activities under paragraph (4) of sec7 tion 505(k) (relating to advanced analysis of 

8 drug safety data); and 

9 ‘‘(iii) other postmarket device surveillance 

10 activities of the Secretary authorized by this 

11 chapter; and 

12 ‘‘(D) providing public access to the data and 

13 analysis collected or developed through the registry 

14 in a manner and form that protects patient privacy 

15 and proprietary information and is comprehensive, 

16 useful, and not misleading to patients, physicians, 

17 and scientists. 

18 ‘‘(3)(A) To facilitate analyses of postmarket safety 

19 and patient outcomes for devices described in paragraph 

20 (1), the Secretary shall, in collaboration with public, aca21 demic, and private entities, develop methods to— 

22 ‘‘(i) obtain access to disparate sources of 

23 patient safety and outcomes data, including— 

24 ‘‘(I) Federal health-related electronic 

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1 gram under title XVIII of the Social Secu2 rity Act or from the health systems of the 

3 Department of Veterans Affairs); 

4 ‘‘(II) private sector health-related 

5 electronic data (such as pharmaceutical 

6 purchase data and health insurance claims 

7 data); and 

8 ‘‘(III) other data as the Secretary 

9 deems necessary to permit postmarket as10 sessment of device safety and effectiveness; 

11 and 

12 ‘‘(ii) link data obtained under clause (i) 

13 with information in the registry. 

14 ‘‘(B) In this paragraph, the term ‘data’ refers to in15 formation respecting a device described in paragraph (1), 

16 including claims data, patient survey data, standardized 

17 analytic files that allow for the pooling and analysis of 

18 data from disparate data environments, electronic health 

19 records, and any other data deemed appropriate by the 

20 Secretary. 

21 ‘‘(4) Not later than 36 months after the date of the 

22 enactment of this subsection, the Secretary shall promul23 gate regulations for establishment and operation of the 

24 registry under paragraph (1). Such regulations— 


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1 ‘‘(A)(i) in the case of devices that are described 

2 in paragraph (1) and sold on or after the date of the 

3 enactment of this subsection, shall require manufac4 turers of such devices to submit information to the 

5 registry, including, for each such device, the type, 

6 model, and serial number or, if required under sub7 section (f), other unique device identifier; and 

8 ‘‘(ii) in the case of devices that are described in 

9 paragraph (1) and sold before such date, may re10 quire manufacturers of such devices to submit such 

11 information to the registry, if deemed necessary by 

12 the Secretary to protect the public health; 

13 ‘‘(B) shall establish procedures— 

14 ‘‘(i) to permit linkage of information sub15 mitted pursuant to subparagraph (A) with pa16 tient safety and outcomes data obtained under 

17 paragraph (3); and 

18 ‘‘(ii) to permit analyses of linked data; 

19 ‘‘(C) may require device manufacturers to sub20 mit such other information as is necessary to facili21 tate postmarket assessments of device safety and ef22 fectiveness and notification of device risks; 

23 ‘‘(D) shall establish requirements for regular 

24 and timely reports to the Secretary, which shall be 

25 included in the registry, concerning adverse event 


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1 trends, adverse event patterns, incidence and preva2 lence of adverse events, and other information the 

3 Secretary determines appropriate, which may include 

4 data on comparative safety and outcomes trends; 

5 and 

6 ‘‘(E) shall establish procedures to permit public 

7 access to the information in the registry in a manner 

8 and form that protects patient privacy and propri9 etary information and is comprehensive, useful, and 

10 not misleading to patients, physicians, and sci11 entists. 

12 ‘‘(5) To carry out this subsection, there are author13 ized to be appropriated such sums as may be necessary 

14 for fiscal years 2010 and 2011.’’. 

15 (2) EFFECTIVE DATE.—The Secretary of 

16 Health and Human Services shall establish and 

17 begin implementation of the registry under section 

18 519(g) of the Federal Food, Drug, and Cosmetic 

19 Act, as added by paragraph (1), by not later than 

20 the date that is 36 months after the date of the en21 actment of this Act, without regard to whether or 

22 not final regulations to establish and operate the 

23 registry have been promulgated by such date. 

24 (3) CONFORMING AMENDMENT.—Section 

25 303(f)(1)(B)(ii) of the Federal Food, Drug, and 


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1 Cosmetic Act (21 U.S.C. 333(f)(1)(B)(ii)) is amend2 ed by striking ‘‘519(g)’’ and inserting ‘‘519(h)’’. 

3 (b) ELECTRONIC EXCHANGE AND USE IN CERTIFIED

4 ELECTRONIC HEALTH RECORDS OF UNIQUE DEVICE

5 IDENTIFIERS.— 

6 (1) RECOMMENDATIONS.—The HIT Policy 

7 Committee established under section 3002 of the 

8 Public Health Service Act (42 U.S.C. 300jj–12) 

9 shall recommend to the head of the Office of the Na10 tional Coordinator for Health Information Tech11 nology standards, implementation specifications, and 

12 certification criteria for the electronic exchange and 

13 use in certified electronic health records of a unique 

14 device identifier for each device described in section 

15 519(g)(1) of the Federal Food, Drug, and Cosmetic 

16 Act, as added by subsection (a). 

17 (2) STANDARDS, IMPLEMENTATION CRITERIA, 

18 AND CERTIFICATION CRITERIA.—The Secretary of 

19 the Health Human Services, acting through the 

20 head of the Office of the National Coordinator for 

21 Health Information Technology, shall adopt stand22 ards, implementation specifications, and certification 

23 criteria for the electronic exchange and use in cer24 tified electronic health records of a unique device 

25 identifier for each device described in paragraph (1), 


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1 if such an identifier is required by section 519(f) of 

2 the Federal Food, Drug, and Cosmetic Act (21 

3 U.S.C. 360i(f)) for the device. 

4 Subtitle D—Grants for Comprehen5 sive Programs To Provide Edu6 cation to Nurses and Create a 

7 Pipeline to Nursing 

8 SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM. 

9 (a) PURPOSES.—It is the purpose of this section to 

10 authorize grants to— 

11 (1) address the projected shortage of nurses by 

12 funding comprehensive programs to create a career 

13 ladder to nursing (including Certified Nurse Assist14 ants, Licensed Practical Nurses, Licensed Vocational 

15 Nurses, and Registered Nurses) for incumbent ancil16 lary health care workers; 

17 (2) increase the capacity for educating nurses 

18 by increasing both nurse faculty and clinical oppor19 tunities through collaborative programs between 

20 staff nurse organizations, health care providers, and 

21 accredited schools of nursing; and 

22 (3) provide training programs through edu23 cation and training organizations jointly adminis24 tered by health care providers and health care labor 

25 organizations or other organizations representing 


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1 staff nurses and frontline health care workers, work2 ing in collaboration with accredited schools of nurs3 ing and academic institutions. 

4 (b) GRANTS.—Not later than 6 months after the date 

5 of the enactment of this Act, the Secretary of Labor (re6 ferred to in this section as the ‘‘Secretary’’) shall establish 

7 a partnership grant program to award grants to eligible 

8 entities to carry out comprehensive programs to provide 

9 education to nurses and create a pipeline to nursing for 

10 incumbent ancillary health care workers who wish to ad11 vance their careers, and to otherwise carry out the pur12 poses of this section. 

13 (c) ELIGIBILITY.—To be eligible for a grant under 

14 this section, an entity shall be— 

15 (1) a health care entity that is jointly adminis16 tered by a health care employer and a labor union 

17 representing the health care employees of the em18 ployer and that carries out activities using labor 

19 management training funds as provided for under 

20 section 302(c)(6) of the Labor Management Rela21 tions Act, 1947 (29 U.S.C. 186(c)(6)); 

22 (2) an entity that operates a training program 

23 that is jointly administered by— 


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1 (A) one or more health care providers or 

2 facilities, or a trade association of health care 

3 providers; and 

4 (B) one or more organizations which rep5 resent the interests of direct care health care 

6 workers or staff nurses and in which the direct 

7 care health care workers or staff nurses have 

8 direct input as to the leadership of the organi9 zation; 

10 (3) a State training partnership program that 

11 consists of nonprofit organizations that include equal 

12 participation from industry, including public or pri13 vate employers, and labor organizations including 

14 joint labor-management training programs, and 

15 which may include representatives from local govern16 ments, worker investment agency one-stop career 

17 centers, community-based organizations, community 

18 colleges, and accredited schools of nursing; or 

19 (4) a school of nursing (as defined in section 

20 801 of the Public Health Service Act (42 U.S.C. 

21 296)). 

22 (d) ADDITIONAL REQUIREMENTS FOR HEALTH CARE

23 EMPLOYER DESCRIBED IN SUBSECTION (c).—To be eligi24 ble for a grant under this section, a health care employer 

25 described in subsection (c) shall demonstrate that it— 


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1 (1) has an established program within their fa2 cility to encourage the retention of existing nurses; 

3 (2) provides wages and benefits to its nurses 

4 that are competitive for its market or that have been 

5 collectively bargained with a labor organization; and 

6 (3) supports programs funded under this sec7 tion through 1 or more of the following: 

8 (A) The provision of paid leave time and 

9 continued health coverage to incumbent health 

10 care workers to allow their participation in 

11 nursing career ladder programs, including cer12 tified nurse assistants, licensed practical nurses, 

13 licensed vocational nurses, and registered 

14 nurses. 

15 (B) Contributions to a joint labor-manage16 ment training fund which administers the pro17 gram involved. 

18 (C) The provision of paid release time, in19 centive compensation, or continued health cov20 erage to staff nurses who desire to work full- or 

21 part-time in a faculty position. 

22 (D) The provision of paid release time for 

23 staff nurses to enable them to obtain a bachelor 

24 of science in nursing degree, other advanced 


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1 nursing degrees, specialty training, or certifi2 cation program. 

3 (E) The payment of tuition assistance 

4 which is managed by a joint labor-management 

5 training fund or other jointly administered pro6 gram. 

7 (e) OTHER REQUIREMENTS.— 

8 (1) MATCHING REQUIREMENT.— 

9 (A) IN GENERAL.—The Secretary may not 

10 make a grant under this section unless the ap11 plicant involved agrees, with respect to the costs 

12 to be incurred by the applicant in carrying out 

13 the program under the grant, to make available 

14 non-Federal contributions (in cash or in kind 

15 under subparagraph (B)) toward such costs in 

16 an amount equal to not less than $1 for each 

17 $1 of Federal funds provided in the grant. Such 

18 contributions may be made directly or through 

19 donations from public or private entities, or 

20 may be provided through the cash equivalent of 

21 paid release time provided to incumbent worker 

22 students. 

23 (B) DETERMINATION OF AMOUNT OF NON24 FEDERAL CONTRIBUTION.—Non-Federal con25 tributions required in subparagraph (A) may be 


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1 in cash or in kind (including paid release time), 

2 fairly evaluated, including equipment or services 

3 (and excluding indirect or overhead costs). 

4 Amounts provided by the Federal Government, 

5 or services assisted or subsidized to any signifi6 cant extent by the Federal Government, may 

7 not be included in determining the amount of 

8 such non-Federal contributions. 

9 (2) REQUIRED COLLABORATION.—Entities car10 rying out or overseeing programs carried out with 

11 assistance provided under this section shall dem12 onstrate collaboration with accredited schools of 

13 nursing which may include community colleges and 

14 other academic institutions providing associate, 

15 bachelor’s, or advanced nursing degree programs or 

16 specialty training or certification programs. 

17 (f) USE OF FUNDS.—Amounts awarded to an entity 

18 under a grant under this section shall be used for the fol19 lowing: 

20 (1) To carry out programs that provide edu21 cation and training to establish nursing career lad22 ders to educate incumbent health care workers to be23 come nurses (including certified nurse assistants, li24 censed practical nurses, licensed vocational nurses, 


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1 and registered nurses). Such programs shall include 

2 one or more of the following: 

3 (A) Preparing incumbent workers to return 

4 to the classroom through English -as-a-second 

5 language education, GED education, pre-college 

6 counseling, college preparation classes, and sup7 port with entry level college classes that are a 

8 prerequisite to nursing. 

9 (B) Providing tuition assistance with pref10 erence for dedicated cohort classes in commu11 nity colleges, universities, accredited schools of 

12 nursing with supportive services including tu13 toring and counseling. 

14 (C) Providing assistance in preparing for 

15 and meeting all nursing licensure tests and re16 quirements. 

17 (D) Carrying out orientation and 

18 mentorship programs that assist newly grad19 uated nurses in adjusting to working at the 

20 bedside to ensure their retention 

21 postgraduation, and ongoing programs to sup22 port nurse retention. 

23 (E) Providing stipends for release time and 

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1 bent health care workers to participate in these 

2 programs. 

3 (2) To carry out programs that assist nurses in 

4 obtaining advanced degrees and completing specialty 

5 training or certification programs and to establish 

6 incentives for nurses to assume nurse faculty posi7 tions on a part-time or full-time basis. Such pro8 grams shall include one or more of the following: 

9 (A) Increasing the pool of nurses with ad10 vanced degrees who are interested in teaching 

11 by funding programs that enable incumbent 

12 nurses to return to school. 

13 (B) Establishing incentives for advanced 

14 degree bedside nurses who wish to teach in 

15 nursing programs so they can obtain a leave 

16 from their bedside position to assume a full- or 

17 part-time position as adjunct or full-time fac18 ulty without the loss of salary or benefits. 

19 (C) Collaboration with accredited schools 

20 of nursing which may include community col21 leges and other academic institutions providing 

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1 tive nursing programs which meet the needs of 

2 bedside nursing and health care providers. 

3 (g) PREFERENCE.—In awarding grants under this 

4 section the Secretary shall give preference to programs 

5 that— 

6 (1) provide for improving nurse retention; 

7 (2) provide for improving the diversity of the 

8 new nurse graduates to reflect changes in the demo9 graphics of the patient population; 

10 (3) provide for improving the quality of nursing 

11 education to improve patient care and safety; 

12 (4) have demonstrated success in upgrading in13 cumbent health care workers to become nurses or 

14 which have established effective programs or pilots 

15 to increase nurse faculty; or 

16 (5) are modeled after or affiliated with such 

17 programs described in paragraph (4). 

18 (h) EVALUATION.— 

19 (1) PROGRAM EVALUATIONS.—An entity that 

20 receives a grant under this section shall annually 

21 evaluate, and submit to the Secretary a report on, 

22 the activities carried out under the grant and the 

23 outcomes of such activities. Such outcomes may in24 clude— 


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1 (A) an increased number of incumbent 

2 workers entering an accredited school of nurs3 ing and in the pipeline for nursing programs; 

4 (B) an increasing number of graduating 

5 nurses and improved nurse graduation and li6 censure rates; 

7 (C) improved nurse retention; 

8 (D) an increase in the number of staff 

9 nurses at the health care facility involved; 

10 (E) an increase in the number of nurses 

11 with advanced degrees in nursing; 

12 (F) an increase in the number of nurse 

13 faculty; 

14 (G) improved measures of patient quality 

15 (which may include staffing ratios of nurses, 

16 patient satisfaction rates, patient safety meas17 ures); and 

18 (H) an increase in the diversity of new 

19 nurse graduates relative to the patient popu20 lation. 

21 (2) GENERAL REPORT.—Not later than 2 years 

22 after the date of the enactment of this Act, and an23 nually thereafter, the Secretary of Labor shall, using 

24 data and information from the reports received 

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1 port concerning the overall effectiveness of the grant 

2 program carried out under this section. 

3 (i) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out this section 

5 such sums as may be necessary. 

6 Subtitle E—States Failing To Ad7 here to Certain Employment Ob8 ligations 

9 SEC. 2541. LIMITATION ON FEDERAL FUNDS. 

10 A State is eligible for Federal funds under the provi11 sions of the Public Health Service Act (42 U.S.C. 201 et 

12 seq.) only if the State— 

13 (1) agrees to be subject in its capacity as an 

14 employer to each obligation under division A of this 

15 Act and the amendments made by such division ap16 plicable to persons in their capacity as an employer; 

17 and 

18 (2) assures that all political subdivisions in the 

19 State will do the same. 

Æ 


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