H. R. 3590—348 
‘‘(i) the amount that the manufacturer would have 
paid with respect to such discounts under the agree-
ment, which will then be used to pay the discounts 
which the manufacturer had failed to provide; and 
‘‘(ii) 25 percent of such amount. 
‘‘(B) APPLICATION.—The provisions of section 1128A 
(other than subsections (a) and (b)) shall apply to a civil 
money penalty under this paragraph in the same manner 
as such provisions apply to a penalty or proceeding under 
section 1128A(a). 
‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF OTHER COV-
ERED PART D DRUGS.—Nothing in this section shall prevent an 
applicable beneficiary from purchasing a covered part D drug that 
is not an applicable drug (including a generic drug or a drug 
that is not on the formulary of the prescription drug plan or MA– 
PD plan that the applicable beneficiary is enrolled in). 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) APPLICABLE BENEFICIARY.—The term ‘applicable bene-
ficiary’ means an individual who, on the date of dispensing 
an applicable drug— 
‘‘(A) is enrolled in a prescription drug plan or an MA– 
PD plan; 
‘‘(B) is not enrolled in a qualified retiree prescription 
drug plan; 
‘‘(C) is not entitled to an income-related subsidy under 
section 1860D–14(a); 
‘‘(D) is not subject to a reduction in premium subsidy 
under section 1839(i); and 
‘‘(E) who— 
‘‘(i) has reached or exceeded the initial coverage 
limit under section 1860D–2(b)(3) during the year; and 
‘‘(ii) has not incurred costs for covered part D 
drugs in the year equal to the annual out-of-pocket 
threshold specified in section 1860D–2(b)(4)(B). 
‘‘(2) APPLICABLE DRUG.—The term ‘applicable drug’ means, 
with respect to an applicable beneficiary, a covered part D 
drug— 
‘‘(A) approved under a new drug application under 
section 505(b) of the Federal Food, Drug, and Cosmetic 
Act or, in the case of a biologic product, licensed under 
section 351 of the Public Health Service Act (other than 
a product licensed under subsection (k) of such section 
351); and 
‘‘(B)(i) if the PDP sponsor of the prescription drug 
plan or the MA organization offering the MA–PD plan 
uses a formulary, which is on the formulary of the prescrip-
tion drug plan or MA–PD plan that the applicable bene-
ficiary is enrolled in; 
‘‘(ii) if the PDP sponsor of the prescription drug plan 
or the MA organization offering the MA–PD plan does 
not use a formulary, for which benefits are available under 
the prescription drug plan or MA–PD plan that the 
applicable beneficiary is enrolled in; or 
‘‘(iii) is provided through an exception or appeal. 
‘‘(3) APPLICABLE NUMBER OF CALENDAR DAYS.—The term 
‘applicable number of calendar days’ means—
H. R. 3590—349 
‘‘(A) with respect to claims for reimbursement sub-
mitted electronically, 14 days; and 
‘‘(B) with respect to claims for reimbursement sub-
mitted otherwise, 30 days. 
‘‘(4) DISCOUNTED PRICE.— 
‘‘(A) IN GENERAL.—The term ‘discounted price’ means 
50 percent of the negotiated price of the applicable drug 
of a manufacturer. 
‘‘(B) CLARIFICATION.—Nothing in this section shall be 
construed as affecting the responsibility of an applicable 
beneficiary for payment of a dispensing fee for an applicable 
drug. 
‘‘(C) SPECIAL CASE FOR CERTAIN CLAIMS.—In the case 
where the entire amount of the negotiated price of an 
individual claim for an applicable drug with respect to 
an applicable beneficiary does not fall at or above the 
initial coverage limit under section 1860D–2(b)(3) and 
below the annual out-of-pocket threshold specified in sec-
tion 1860D–2(b)(4)(B) for the year, the manufacturer of 
the applicable drug shall provide the discounted price under 
this section on only the portion of the negotiated price 
of the applicable drug that falls at or above such initial 
coverage limit and below such annual out-of-pocket 
threshold. 
‘‘(5) MANUFACTURER.—The term ‘manufacturer’ means any 
entity which is engaged in the production, preparation, propaga-
tion, compounding, conversion, or processing of prescription 
drug products, either directly or indirectly by extraction from 
substances of natural origin, or independently by means of 
chemical synthesis, or by a combination of extraction and chem-
ical synthesis. Such term does not include a wholesale dis-
tributor of drugs or a retail pharmacy licensed under State 
law. 
‘‘(6) NEGOTIATED PRICE.—The term ‘negotiated price’ has 
the meaning given such term in section 423.100 of title 42, 
Code of Federal Regulations (as in effect on the date of enact-
ment of this section), except that such negotiated price shall 
not include any dispensing fee for the applicable drug. 
‘‘(7) QUALIFIED
RETIREE
PRESCRIPTION
DRUG
PLAN.—The 
term ‘qualified retiree prescription drug plan’ has the meaning 
given such term in section 1860D–22(a)(2).’’. 
(c) INCLUSION IN INCURRED COSTS.— 
(1) IN GENERAL.—Section 1860D–2(b)(4) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(b)(4)) is amended— 
(A) in subparagraph (C), in the matter preceding clause 
(i), by striking ‘‘In applying’’ and inserting ‘‘Except as pro-
vided in subparagraph (E), in applying’’; and 
(B) by adding at the end the following new subpara-
graph: 
‘‘(E) INCLUSION OF COSTS OF APPLICABLE DRUGS UNDER 
MEDICARE COVERAGE GAP DISCOUNT PROGRAM.—In applying 
subparagraph (A), incurred costs shall include the nego-
tiated price (as defined in paragraph (6) of section 1860D– 
14A(g)) of an applicable drug (as defined in paragraph 
(2) of such section) of a manufacturer that is furnished 
to an applicable beneficiary (as defined in paragraph (1) 
of such section) under the Medicare coverage gap discount
H. R. 3590—350 
program under section 1860D–14A, regardless of whether 
part of such costs were paid by a manufacturer under 
such program.’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to costs incurred on or after July 1, 2010. 
(d) CONFORMING AMENDMENT PERMITTING PRESCRIPTION DRUG 
DISCOUNTS.— 
(1) IN GENERAL.—Section 1128B(b)(3) of the Social Security 
Act (42 U.S.C. 1320a–7b(b)(3)) is amended— 
(A) by striking ‘‘and’’ at the end of subparagraph (G); 
(B) in the subparagraph (H) added by section 237(d) 
of the Medicare Prescription Drug, Improvement, and Mod-
ernization Act of 2003 (Public Law 108–173; 117 Stat. 
2213)— 
(i) by moving such subparagraph 2 ems to the 
left; and 
(ii) by striking the period at the end and inserting 
a semicolon; 
(C) in the subparagraph (H) added by section 431(a) 
of such Act (117 Stat. 2287)— 
(i) by redesignating such subparagraph as subpara-
graph (I); 
(ii) by moving such subparagraph 2 ems to the 
left; and 
(iii) by striking the period at the end and inserting 
‘‘; and’’; and 
(D) by adding at the end the following new subpara-
graph: 
‘‘(J) a discount in the price of an applicable drug (as 
defined in paragraph (2) of section 1860D–14A(g)) of a 
manufacturer that is furnished to an applicable beneficiary 
(as defined in paragraph (1) of such section) under the 
Medicare coverage gap discount program under section 
1860D–14A.’’. 
(2) CONFORMING AMENDMENT TO DEFINITION OF BEST PRICE 
UNDER
MEDICAID.—Section 1927(c)(1)(C)(i)(VI) of the Social 
Security Act (42 U.S.C. 1396r–8(c)(1)(C)(i)(VI)) is amended by 
inserting ‘‘, or any discounts provided by manufacturers under 
the Medicare coverage gap discount program under section 
1860D–14A’’ before the period at the end. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to drugs dispensed on or after July 1, 
2010. 
SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART 
D LOW-INCOME BENCHMARK PREMIUM. 
(a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w–114(b)(2)(B)(iii)) is amended by 
inserting ‘‘, determined without regard to any reduction in such 
premium as a result of any beneficiary rebate under section 
1854(b)(1)(C) or bonus payment under section 1853(n)’’ before the 
period at the end. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to premiums for months beginning on or after January 
1, 2011.
H. R. 3590—351 
SEC. 3303. VOLUNTARY DE MINIMIS POLICY FOR SUBSIDY ELIGIBLE 
INDIVIDUALS UNDER PRESCRIPTION DRUG PLANS AND 
MA–PD PLANS. 
(a) IN GENERAL.—Section 1860D–14(a) of the Social Security 
Act (42 U.S.C. 1395w–114(a)) is amended by adding at the end 
the following new paragraph: 
‘‘(5) WAIVER
OF
DE
MINIMIS
PREMIUMS.—The Secretary 
shall, under procedures established by the Secretary, permit 
a prescription drug plan or an MA–PD plan to waive the 
monthly beneficiary premium for a subsidy eligible individual 
if the amount of such premium is de minimis. If such premium 
is waived under the plan, the Secretary shall not reassign 
subsidy eligible individuals enrolled in the plan to other plans 
based on the fact that the monthly beneficiary premium under 
the plan was greater than the low-income benchmark premium 
amount.’’. 
(b) AUTHORIZING
THE SECRETARY TO AUTO-ENROLL SUBSIDY 
ELIGIBLE INDIVIDUALS
IN PLANS THAT WAIVE DE MINIMIS PRE-
MIUMS.—Section 1860D–1(b)(1) of the Social Security Act (42 U.S.C. 
1395w–101(b)(1)) is amended— 
(1) in subparagraph (C), by inserting ‘‘except as provided 
in subparagraph (D),’’ after ‘‘shall include,’’ 
(2) by adding at the end the following new subparagraph: 
‘‘(D) SPECIAL RULE FOR PLANS THAT WAIVE DE MINIMIS 
PREMIUMS.—The process established under subparagraph 
(A) may include, in the case of a part D eligible individual 
who is a subsidy eligible individual (as defined in section 
1860D–14(a)(3)) who has failed to enroll in a prescription 
drug plan or an MA–PD plan, for the enrollment in a 
prescription drug plan or MA–PD plan that has waived 
the monthly beneficiary premium for such subsidy eligible 
individual under section 1860D–14(a)(5). If there is more 
than one such plan available, the Secretary shall enroll 
such an individual under the preceding sentence on a 
random basis among all such plans in the PDP region. 
Nothing in the previous sentence shall prevent such an 
individual from declining or changing such enrollment.’’. 
(c) EFFECTIVE DATE.—The amendments made by this subsection 
shall apply to premiums for months, and enrollments for plan 
years, beginning on or after January 1, 2011. 
SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING 
ELIGIBILITY FOR LOW-INCOME ASSISTANCE. 
(a) IN GENERAL.—Section 1860D–14(a)(3)(B) of the Social Secu-
rity Act (42 U.S.C. 1395w–114(a)(3)(B)) is amended by adding at 
the end the following new clause: 
‘‘(vi) SPECIAL RULE FOR WIDOWS AND WIDOWERS.— 
Notwithstanding the preceding provisions of this 
subparagraph, in the case of an individual whose 
spouse dies during the effective period for a determina-
tion or redetermination that has been made under 
this subparagraph, such effective period shall be 
extended through the date that is 1 year after the 
date on which the determination or redetermination 
would (but for the application of this clause) otherwise 
cease to be effective.’’.
H. R. 3590—352 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall take effect on January 1, 2011. 
SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVID-
UALS REASSIGNED TO PRESCRIPTION DRUG PLANS AND 
MA–PD PLANS. 
Section 1860D–14 of the Social Security Act (42 U.S.C. 1395w– 
114) is amended— 
(1) by redesignating subsection (d) as subsection (e); and 
(2) by inserting after subsection (c) the following new sub-
section: 
‘‘(d) FACILITATION
OF REASSIGNMENTS.—Beginning not later 
than January 1, 2011, the Secretary shall, in the case of a subsidy 
eligible individual who is enrolled in one prescription drug plan 
and is subsequently reassigned by the Secretary to a new prescrip-
tion drug plan, provide the individual, within 30 days of such 
reassignment, with— 
‘‘(1) information on formulary differences between the 
individual’s former plan and the plan to which the individual 
is reassigned with respect to the individual’s drug regimens; 
and 
‘‘(2) a description of the individual’s right to request a 
coverage determination, exception, or reconsideration under sec-
tion 1860D–4(g), bring an appeal under section 1860D–4(h), 
or resolve a grievance under section 1860D–4(f).’’. 
SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME 
PROGRAMS. 
(a) ADDITIONAL FUNDING FOR STATE HEALTH INSURANCE PRO-
GRAMS.—Subsection (a)(1)(B) of section 119 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 
1395b–3 note) is amended by striking ‘‘(42 U.S.C. 1395w–23(f))’’ 
and all that follows through the period at the end and inserting 
‘‘(42 U.S.C. 1395w–23(f)), to the Centers for Medicare & Medicaid 
Services Program Management Account— 
‘‘(i) for fiscal year 2009, of $7,500,000; and 
‘‘(ii) for the period of fiscal years 2010 through 
2012, of $15,000,000. 
Amounts appropriated under this subparagraph shall 
remain available until expended.’’. 
(b) ADDITIONAL FUNDING
FOR AREA AGENCIES
ON AGING.— 
Subsection (b)(1)(B) of such section 119 is amended by striking 
‘‘(42 U.S.C. 1395w–23(f))’’ and all that follows through the period 
at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Adminis-
tration on Aging— 
‘‘(i) for fiscal year 2009, of $7,500,000; and 
‘‘(ii) for the period of fiscal years 2010 through 
2012, of $15,000,000. 
Amounts appropriated under this subparagraph shall 
remain available until expended.’’. 
(c) ADDITIONAL FUNDING FOR AGING AND DISABILITY RESOURCE 
CENTERS.—Subsection (c)(1)(B) of such section 119 is amended by 
striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all that follows through 
the period at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to 
the Administration on Aging— 
‘‘(i) for fiscal year 2009, of $5,000,000; and 
‘‘(ii) for the period of fiscal years 2010 through 
2012, of $10,000,000.
H. R. 3590—353 
Amounts appropriated under this subparagraph shall 
remain available until expended.’’. 
(d) ADDITIONAL FUNDING FOR CONTRACT WITH THE NATIONAL 
CENTER FOR BENEFITS AND OUTREACH ENROLLMENT.—Subsection 
(d)(2) of such section 119 is amended by striking ‘‘(42 U.S.C. 1395w– 
23(f))’’ and all that follows through the period at the end and 
inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Administration on 
Aging— 
‘‘(i) for fiscal year 2009, of $5,000,000; and 
‘‘(ii) for the period of fiscal years 2010 through 
2012, of $5,000,000. 
Amounts appropriated under this subparagraph shall 
remain available until expended.’’. 
(e) SECRETARIAL AUTHORITY TO ENLIST SUPPORT
IN CON-
DUCTING CERTAIN OUTREACH ACTIVITIES.—Such section 119 is 
amended by adding at the end the following new subsection: 
‘‘(g) SECRETARIAL AUTHORITY TO ENLIST SUPPORT
IN CON-
DUCTING
CERTAIN
OUTREACH
ACTIVITIES.—The Secretary may 
request that an entity awarded a grant under this section support 
the conduct of outreach activities aimed at preventing disease and 
promoting wellness. Notwithstanding any other provision of this 
section, an entity may use a grant awarded under this subsection 
to support the conduct of activities described in the preceding 
sentence.’’. 
SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIP-
TION DRUG PLANS AND MA–PD PLANS WITH RESPECT 
TO CERTAIN CATEGORIES OR CLASSES OF DRUGS. 
(a) IMPROVING FORMULARY REQUIREMENTS.—Section 1860D– 
4(b)(3)(G) of the Social Security Act is amended to read as follows: 
‘‘(G) REQUIRED INCLUSION OF DRUGS IN CERTAIN CAT-
EGORIES AND CLASSES.— 
‘‘(i) FORMULARY REQUIREMENTS.— 
‘‘(I) IN
GENERAL.—Subject to subclause (II), 
a PDP sponsor offering a prescription drug plan 
shall be required to include all covered part D 
drugs in the categories and classes identified by 
the Secretary under clause (ii)(I). 
‘‘(II) EXCEPTIONS.—The Secretary may estab-
lish exceptions that permit a PDP sponsor offering 
a prescription drug plan to exclude from its for-
mulary a particular covered part D drug in a cat-
egory or class that is otherwise required to be 
included in the formulary under subclause (I) (or 
to otherwise limit access to such a drug, including 
through prior authorization or utilization manage-
ment). 
‘‘(ii) IDENTIFICATION
OF
DRUGS
IN
CERTAIN
CAT-
EGORIES AND CLASSES.— 
‘‘(I) IN GENERAL.—Subject to clause (iv), the 
Secretary shall identify, as appropriate, categories 
and classes of drugs for which the Secretary deter-
mines are of clinical concern. 
‘‘(II) CRITERIA.—The Secretary shall use cri-
teria established by the Secretary in making any 
determination under subclause (I).
H. R. 3590—354 
‘‘(iii) IMPLEMENTATION.—The Secretary shall estab-
lish the criteria under clause (ii)(II) and any exceptions 
under clause (i)(II) through the promulgation of a regu-
lation which includes a public notice and comment 
period. 
‘‘(iv) REQUIREMENT FOR CERTAIN CATEGORIES AND 
CLASSES
UNTIL
CRITERIA
ESTABLISHED.—Until such 
time as the Secretary establishes the criteria under 
clause (ii)(II) the following categories and classes of 
drugs shall be identified under clause (ii)(I): 
‘‘(I) Anticonvulsants. 
‘‘(II) Antidepressants. 
‘‘(III) Antineoplastics. 
‘‘(IV) Antipsychotics. 
‘‘(V) Antiretrovirals. 
‘‘(VI) Immunosuppressants for the treatment 
of transplant rejection.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan year 2011 and subsequent plan years. 
SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME 
BENEFICIARIES. 
(a) INCOME-RELATED INCREASE IN PART D PREMIUM.— 
(1) IN GENERAL.—Section 1860D–13(a) of the Social Secu-
rity Act (42 U.S.C. 1395w–113(a)) is amended by adding at 
the end the following new paragraph: 
‘‘(7) INCREASE IN BASE BENEFICIARY PREMIUM BASED ON 
INCOME.— 
‘‘(A) IN GENERAL.—In the case of an individual whose 
modified adjusted gross income exceeds the threshold 
amount applicable under paragraph (2) of section 1839(i) 
(including application of paragraph (5) of such section) 
for the calendar year, the monthly amount of the bene-
ficiary premium applicable under this section for a month 
after December 2010 shall be increased by the monthly 
adjustment amount specified in subparagraph (B). 
‘‘(B) MONTHLY
ADJUSTMENT
AMOUNT.—The monthly 
adjustment amount specified in this subparagraph for an 
individual for a month in a year is equal to the product 
of— 
‘‘(i) the quotient obtained by dividing— 
‘‘(I) the applicable percentage determined 
under paragraph (3)(C) of section 1839(i) (including 
application of paragraph (5) of such section) for 
the individual for the calendar year reduced by 
25.5 percent; by 
‘‘(II) 25.5 percent; and 
‘‘(ii) the base beneficiary premium (as computed 
under paragraph (2)). 
‘‘(C) MODIFIED ADJUSTED GROSS INCOME.—For purposes 
of this paragraph, the term ‘modified adjusted gross income’ 
has the meaning given such term in subparagraph (A) 
of section 1839(i)(4), determined for the taxable year 
applicable under subparagraphs (B) and (C) of such section. 
‘‘(D) DETERMINATION
BY
COMMISSIONER
OF
SOCIAL 
SECURITY.—The Commissioner of Social Security shall 
make any determination necessary to carry out the income-
H. R. 3590—355 
related increase in the base beneficiary premium under 
this paragraph. 
‘‘(E) PROCEDURES TO ASSURE CORRECT INCOME-RELATED 
INCREASE IN BASE BENEFICIARY PREMIUM.— 
‘‘(i) DISCLOSURE OF BASE BENEFICIARY PREMIUM.— 
Not later than September 15 of each year beginning 
with 2010, the Secretary shall disclose to the Commis-
sioner of Social Security the amount of the base bene-
ficiary premium (as computed under paragraph (2)) 
for the purpose of carrying out the income-related 
increase in the base beneficiary premium under this 
paragraph with respect to the following year. 
‘‘(ii) ADDITIONAL
DISCLOSURE.—Not later than 
October 15 of each year beginning with 2010, the Sec-
retary shall disclose to the Commissioner of Social 
Security the following information for the purpose of 
carrying out the income-related increase in the base 
beneficiary premium under this paragraph with respect 
to the following year: 
‘‘(I) The modified adjusted gross income 
threshold applicable under paragraph (2) of section 
1839(i) (including application of paragraph (5) of 
such section). 
‘‘(II) The applicable percentage determined 
under paragraph (3)(C) of section 1839(i) (including 
application of paragraph (5) of such section). 
‘‘(III) The monthly adjustment amount speci-
fied in subparagraph (B). 
‘‘(IV) Any other information the Commissioner 
of Social Security determines necessary to carry 
out the income-related increase in the base bene-
ficiary premium under this paragraph. 
‘‘(F) RULE
OF
CONSTRUCTION.—The formula used to 
determine the monthly adjustment amount specified under 
subparagraph (B) shall only be used for the purpose of 
determining such monthly adjustment amount under such 
subparagraph.’’. 
(2) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.—Sec-
tion 1860D–13(c) of the Social Security Act (42 U.S.C. 1395w– 
113(c)) is amended— 
(A) in paragraph (1), by striking ‘‘(2) and (3)’’ and 
inserting ‘‘(2), (3), and (4)’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(4) COLLECTION OF MONTHLY ADJUSTMENT AMOUNT.— 
‘‘(A) IN GENERAL.—Notwithstanding any provision of 
this subsection or section 1854(d)(2), subject to subpara-
graph (B), the amount of the income-related increase in 
the base beneficiary premium for an individual for a month 
(as determined under subsection (a)(7)) shall be paid 
through withholding from benefit payments in the manner 
provided under section 1840. 
‘‘(B) AGREEMENTS.—In the case where the monthly ben-
efit payments of an individual that are withheld under 
subparagraph (A) are insufficient to pay the amount 
described in such subparagraph, the Commissioner of 
Social Security shall enter into agreements with the Sec-
retary, the Director of the Office of Personnel Management,
H. R. 3590—356 
and the Railroad Retirement Board as necessary in order 
to allow other agencies to collect the amount described 
in subparagraph (A) that was not withheld under such 
subparagraph.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) MEDICARE.—Section 1860D–13(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395w–113(a)(1)) is amended— 
(A) by redesignating subparagraph (F) as subparagraph 
(G); 
(B) in subparagraph (G), as redesignated by subpara-
graph (A), by striking ‘‘(D) and (E)’’ and inserting ‘‘(D), 
(E), and (F)’’; and 
(C) by inserting after subparagraph (E) the following 
new subparagraph: 
‘‘(F) INCREASE BASED ON INCOME.—The monthly bene-
ficiary premium shall be increased pursuant to paragraph 
(7).’’. 
(2) INTERNAL REVENUE CODE.—Section 6103(l)(20) of the 
Internal Revenue Code of 1986 (relating to disclosure of return 
information to carry out Medicare part B premium subsidy 
adjustment) is amended— 
(A) in the heading, by inserting ‘‘AND PART D BASE 
BENEFICIARY PREMIUM INCREASE’’ after ‘‘PART B PREMIUM 
SUBSIDY ADJUSTMENT’’; 
(B) in subparagraph (A)— 
(i) in the matter preceding clause (i), by inserting 
‘‘or increase under section 1860D–13(a)(7)’’ after 
‘‘1839(i)’’; and 
(ii) in clause (vii), by inserting after ‘‘subsection 
(i) of such section’’ the following: ‘‘or increase under 
section 1860D–13(a)(7) of such Act’’; and 
(C) in subparagraph (B)— 
(i) by striking ‘‘Return information’’ and inserting 
the following: 
‘‘(i) IN GENERAL.—Return information’’; 
(ii) by inserting ‘‘or increase under such section 
1860D–13(a)(7)’’ before the period at the end; 
(iii) as amended by clause (i), by inserting ‘‘or 
for the purpose of resolving taxpayer appeals with 
respect to any such premium adjustment or increase’’ 
before the period at the end; and 
(iv) by adding at the end the following new clause: 
‘‘(ii) DISCLOSURE
TO
OTHER
AGENCIES.—Officers, 
employees, and contractors of the Social Security 
Administration may disclose— 
‘‘(I) the taxpayer identity information and the 
amount of the premium subsidy adjustment or 
premium increase with respect to a taxpayer 
described 
in 
subparagraph 
(A) 
to 
officers, 
employees, and contractors of the Centers for Medi-
care and Medicaid Services, to the extent that 
such disclosure is necessary for the collection of 
the premium subsidy amount or the increased pre-
mium amount, 
‘‘(II) the taxpayer identity information and the 
amount of the premium subsidy adjustment or 
the increased premium amount with respect to
H. R. 3590—357 
a taxpayer described in subparagraph (A) to offi-
cers and employees of the Office of Personnel 
Management and the Railroad Retirement Board, 
to the extent that such disclosure is necessary 
for the collection of the premium subsidy amount 
or the increased premium amount, 
‘‘(III) return information with respect to a tax-
payer described in subparagraph (A) to officers 
and employees of the Department of Health and 
Human Services to the extent necessary to resolve 
administrative appeals of such premium subsidy 
adjustment or increased premium, and 
‘‘(IV) return information with respect to a tax-
payer described in subparagraph (A) to officers 
and employees of the Department of Justice for 
use in judicial proceedings to the extent necessary 
to carry out the purposes described in clause (i).’’. 
SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL 
ELIGIBLE INDIVIDUALS. 
Section 1860D–14(a)(1)(D)(i) of the Social Security Act (42 
U.S.C. 1395w–114(a)(1)(D)(i)) is amended by inserting ‘‘or, effective 
on a date specified by the Secretary (but in no case earlier than 
January 1, 2012), who would be such an institutionalized individual 
or couple, if the full-benefit dual eligible individual were not 
receiving services under a home and community-based waiver 
authorized for a State under section 1115 or subsection (c) or 
(d) of section 1915 or under a State plan amendment under sub-
section (i) of such section or services provided through enrollment 
in a medicaid managed care organization with a contract under 
section 1903(m) or under section 1932’’ after ‘‘1902(q)(1)(B))’’. 
SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT 
PRESCRIPTION DRUGS IN LONG-TERM CARE FACILITIES 
UNDER PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
(a) IN GENERAL.—Section 1860D–4(c) of the Social Security 
Act (42 U.S.C. 1395w–104(c)) is amended by adding at the end 
the following new paragraph: 
‘‘(3) REDUCING
WASTEFUL
DISPENSING
OF
OUTPATIENT 
PRESCRIPTION DRUGS IN LONG-TERM CARE FACILITIES.—The Sec-
retary shall require PDP sponsors of prescription drug plans 
to utilize specific, uniform dispensing techniques, as determined 
by the Secretary, in consultation with relevant stakeholders 
(including representatives of nursing facilities, residents of 
nursing 
facilities, 
pharmacists, 
the 
pharmacy 
industry 
(including retail and long-term care pharmacy), prescription 
drug plans, MA–PD plans, and any other stakeholders the 
Secretary determines appropriate), such as weekly, daily, or 
automated dose dispensing, when dispensing covered part D 
drugs to enrollees who reside in a long-term care facility in 
order to reduce waste associated with 30-day fills.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to plan years beginning on or after January 1, 2012. 
SEC. 3311. IMPROVED MEDICARE PRESCRIPTION DRUG PLAN AND MA– 
PD PLAN COMPLAINT SYSTEM. 
(a) IN GENERAL.—The Secretary shall develop and maintain 
a complaint system, that is widely known and easy to use, to
H. R. 3590—358 
collect and maintain information on MA–PD plan and prescription 
drug plan complaints that are received (including by telephone, 
letter, e-mail, or any other means) by the Secretary (including 
by a regional office of the Department of Health and Human Serv-
ices, the Medicare Beneficiary Ombudsman, a subcontractor, a car-
rier, a fiscal intermediary, and a Medicare administrative contractor 
under section 1874A of the Social Security Act (42 U.S.C. 1395kk)) 
through the date on which the complaint is resolved. The system 
shall be able to report and initiate appropriate interventions and 
monitoring based on substantial complaints and to guide quality 
improvement. 
(b) MODEL ELECTRONIC COMPLAINT FORM.—The Secretary shall 
develop a model electronic complaint form to be used for reporting 
plan complaints under the system. Such form shall be prominently 
displayed on the front page of the Medicare.gov Internet website 
and on the Internet website of the Medicare Beneficiary Ombuds-
man. 
(c) ANNUAL REPORTS BY THE SECRETARY.—The Secretary shall 
submit to Congress annual reports on the system. Such reports 
shall include an analysis of the number and types of complaints 
reported in the system, geographic variations in such complaints, 
the timeliness of agency or plan responses to such complaints, 
and the resolution of such complaints. 
(d) DEFINITIONS.—In this section: 
(1) MA–PD PLAN.—The term ‘‘MA–PD plan’’ has the 
meaning given such term in section 1860D–41(a)(9) of such 
Act (42 U.S.C. 1395w–151(a)(9)). 
(2) PRESCRIPTION DRUG PLAN.—The term ‘‘prescription drug 
plan’’ has the meaning given such term in section 1860D– 
41(a)(14) of such Act (42 U.S.C. 1395w–151(a)(14)). 
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(4) SYSTEM.—The term ‘‘system’’ means the plan complaint 
system developed and maintained under subsection (a). 
SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR 
PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
(a) IN GENERAL.—Section 1860D–4(b)(3) of the Social Security 
Act (42 U.S.C. 1395w–104(b)(3)) is amended by adding at the end 
the following new subparagraph: 
‘‘(H) USE OF SINGLE, UNIFORM EXCEPTIONS AND APPEALS 
PROCESS.—Notwithstanding any other provision of this 
part, each PDP sponsor of a prescription drug plan shall— 
‘‘(i) use a single, uniform exceptions and appeals 
process (including, to the extent the Secretary deter-
mines feasible, a single, uniform model form for use 
under such process) with respect to the determination 
of prescription drug coverage for an enrollee under 
the plan; and 
‘‘(ii) provide instant access to such process by 
enrollees through a toll-free telephone number and 
an Internet website.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to exceptions and appeals on or after January 1, 2012.
H. R. 3590—359 
SEC. 3313. OFFICE OF THE INSPECTOR GENERAL STUDIES AND 
REPORTS. 
(a) STUDY
AND ANNUAL REPORT
ON PART D FORMULARIES’ 
INCLUSION OF DRUGS COMMONLY USED BY DUAL ELIGIBLES.— 
(1) STUDY.—The Inspector General of the Department of 
Health and Human Services shall conduct a study of the extent 
to which formularies used by prescription drug plans and MA– 
PD plans under part D include drugs commonly used by full- 
benefit dual eligible individuals (as defined in section 1935(c)(6) 
of the Social Security Act (42 U.S.C. 1396u–5(c)(6))). 
(2) ANNUAL REPORTS.—Not later than July 1 of each year 
(beginning with 2011), the Inspector General shall submit to 
Congress a report on the study conducted under paragraph 
(1), together with such recommendations as the Inspector Gen-
eral determines appropriate. 
(b) STUDY AND REPORT ON PRESCRIPTION DRUG PRICES UNDER 
MEDICARE PART D AND MEDICAID.— 
(1) STUDY.— 
(A) IN GENERAL.—The Inspector General of the Depart-
ment of Health and Human Services shall conduct a study 
on prices for covered part D drugs under the Medicare 
prescription drug program under part D of title XVIII 
of the Social Security Act and for covered outpatient drugs 
under title XIX. Such study shall include the following: 
(i) A comparison, with respect to the 200 most 
frequently dispensed covered part D drugs under such 
program and covered outpatient drugs under such title 
(as determined by the Inspector General based on 
volume and expenditures), of— 
(I) the prices paid for covered part D drugs 
by PDP sponsors of prescription drug plans and 
Medicare Advantage organizations offering MA– 
PD plans; and 
(II) the prices paid for covered outpatient 
drugs by a State plan under title XIX. 
(ii) An assessment of— 
(I) the financial impact of any discrepancies 
in such prices on the Federal Government; and 
(II) the financial impact of any such discrep-
ancies on enrollees under part D or individuals 
eligible for medical assistance under a State plan 
under title XIX. 
(B) PRICE.—For purposes of subparagraph (A), the 
price of a covered part D drug or a covered outpatient 
drug shall include any rebate or discount under such pro-
gram or such title, respectively, including any negotiated 
price concession described in section 1860D–2(d)(1)(B) of 
the Social Security Act (42 U.S.C. 1395w–102(d)(1)(B)) or 
rebate under an agreement under section 1927 of the Social 
Security Act (42 U.S.C. 1396r–8). 
(C) AUTHORITY TO COLLECT ANY NECESSARY INFORMA-
TION.—Notwithstanding any other provision of law, the 
Inspector General of the Department of Health and Human 
Services shall be able to collect any information related 
to the prices of covered part D drugs under such program
H. R. 3590—360 
and covered outpatient drugs under such title XIX nec-
essary to carry out the comparison under subparagraph 
(A). 
(2) REPORT.— 
(A) IN GENERAL.—Not later than October 1, 2011, sub-
ject to subparagraph (B), the Inspector General shall 
submit to Congress a report containing the results of the 
study conducted under paragraph (1), together with rec-
ommendations for such legislation and administrative 
action as the Inspector General determines appropriate. 
(B) 
LIMITATION
ON
INFORMATION
CONTAINED
IN 
REPORT.—The report submitted under subparagraph (A) 
shall not include any information that the Inspector Gen-
eral determines is proprietary or is likely to negatively 
impact the ability of a PDP sponsor or a State plan under 
title XIX to negotiate prices for covered part D drugs or 
covered outpatient drugs, respectively. 
(3) DEFINITIONS.—In this section: 
(A) COVERED PART D DRUG.—The term ‘‘covered part 
D drug’’ has the meaning given such term in section 1860D– 
2(e) of the Social Security Act (42 U.S.C. 1395w–102(e)). 
(B) COVERED OUTPATIENT DRUG.—The term ‘‘covered 
outpatient drug’’ has the meaning given such term in sec-
tion 1927(k) of such Act (42 U.S.C. 1396r(k)). 
(C) MA–PD PLAN.—The term ‘‘MA–PD plan’’ has the 
meaning given such term in section 1860D–41(a)(9) of such 
Act (42 U.S.C. 1395w–151(a)(9)). 
(D) MEDICARE ADVANTAGE ORGANIZATION.—The term 
‘‘Medicare Advantage organization’’ has the meaning given 
such term in section 1859(a)(1) of such Act (42 U.S.C. 
1395w–28)(a)(1)). 
(E) PDP SPONSOR.—The term ‘‘PDP sponsor’’ has the 
meaning given such term in section 1860D–41(a)(13) of 
such Act (42 U.S.C. 1395w–151(a)(13)). 
(F) PRESCRIPTION DRUG PLAN.—The term ‘‘prescription 
drug plan’’ has the meaning given such term in section 
1860D–41(a)(14) of such Act (42 U.S.C. 1395w–151(a)(14)). 
SEC. 3314. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE 
PROGRAMS AND INDIAN HEALTH SERVICE IN PROVIDING 
PRESCRIPTION DRUGS TOWARD THE ANNUAL OUT-OF- 
POCKET THRESHOLD UNDER PART D. 
(a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(b)(4)(C)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii)— 
(A) by striking ‘‘such costs shall be treated as incurred 
only if’’ and inserting ‘‘subject to clause (iii), such costs 
shall be treated as incurred only if’’; 
(B) by striking ‘‘, under section 1860D–14, or under 
a State Pharmaceutical Assistance Program’’; and 
(C) by striking the period at the end and inserting 
‘‘; and’’; and 
(3) by inserting after clause (ii) the following new clause: 
‘‘(iii) such costs shall be treated as incurred and 
shall not be considered to be reimbursed under clause 
(ii) if such costs are borne or paid—
H. R. 3590—361 
‘‘(I) under section 1860D–14; 
‘‘(II) under a State Pharmaceutical Assistance 
Program; 
‘‘(III) by the Indian Health Service, an Indian 
tribe or tribal organization, or an urban Indian 
organization (as defined in section 4 of the Indian 
Health Care Improvement Act); or 
‘‘(IV) under an AIDS Drug Assistance Program 
under part B of title XXVI of the Public Health 
Service Act.’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to costs incurred on or after January 1, 2011. 
SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010. 
Section 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 
102(b)) is amended— 
(1) in paragraph (3)(A), by striking ‘‘paragraph (4)’’ and 
inserting ‘‘paragraphs (4) and (7)’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(7) INCREASE IN INITIAL COVERAGE LIMIT IN 2010.— 
‘‘(A) IN
GENERAL.—For the plan year beginning on 
January 1, 2010, the initial coverage limit described in 
paragraph (3)(B) otherwise applicable shall be increased 
by $500. 
‘‘(B) APPLICATION.—In applying subparagraph (A)— 
‘‘(i) except as otherwise provided in this subpara-
graph, there shall be no change in the premiums, bids, 
or any other parameters under this part or part C; 
‘‘(ii) costs that would be treated as incurred costs 
for purposes of applying paragraph (4) but for the 
application of subparagraph (A) shall continue to be 
treated as incurred costs; 
‘‘(iii) the Secretary shall establish procedures, 
which may include a reconciliation process, to fully 
reimburse PDP sponsors with respect to prescription 
drug plans and MA organizations with respect to MA– 
PD plans for the reduction in beneficiary cost sharing 
associated with the application of subparagraph (A); 
‘‘(iv) the Secretary shall develop an estimate of 
the additional increased costs attributable to the 
application of this paragraph for increased drug utiliza-
tion and financing and administrative costs and shall 
use such estimate to adjust payments to PDP sponsors 
with respect to prescription drug plans under this part 
and MA organizations with respect to MA–PD plans 
under part C; and 
‘‘(v) the Secretary shall establish procedures for 
retroactive reimbursement of part D eligible individ-
uals who are covered under such a plan for costs which 
are incurred before the date of initial implementation 
of subparagraph (A) and which would be reimbursed 
under such a plan if such implementation occurred 
as of January 1, 2010. 
‘‘(C) NO EFFECT ON SUBSEQUENT YEARS.—The increase 
under subparagraph (A) shall only apply with respect to 
the plan year beginning on January 1, 2010, and the initial 
coverage limit for plan years beginning on or after January
H. R. 3590—362 
1, 2011, shall be determined as if subparagraph (A) had 
never applied.’’. 
Subtitle E—Ensuring Medicare 
Sustainability 
SEC. 3401. REVISION OF CERTAIN MARKET BASKET UPDATES AND 
INCORPORATION OF PRODUCTIVITY IMPROVEMENTS 
INTO MARKET BASKET UPDATES THAT DO NOT ALREADY 
INCORPORATE SUCH IMPROVEMENTS. 
(a) INPATIENT ACUTE HOSPITALS.—Section 1886(b)(3)(B) of the 
Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by 
section 3001(a)(3), is further amended— 
(1) in clause (i)(XX), by striking ‘‘clause (viii)’’ and inserting 
‘‘clauses (viii), (ix), (xi), and (xii)’’; 
(2) in the first sentence of clause (viii), by inserting ‘‘of 
such applicable percentage increase (determined without regard 
to clause (ix), (xi), or (xii))’’ after ‘‘one-quarter’’; 
(3) in the first sentence of clause (ix)(I), by inserting ‘‘(deter-
mined without regard to clause (viii), (xi), or (xii))’’ after ‘‘clause 
(i)’’ the second time it appears; and 
(4) by adding at the end the following new clauses: 
‘‘(xi)(I) For 2012 and each subsequent fiscal year, after deter-
mining the applicable percentage increase described in clause (i) 
and after application of clauses (viii) and (ix), such percentage 
increase shall be reduced by the productivity adjustment described 
in subclause (II). 
‘‘(II) The productivity adjustment described in this subclause, 
with respect to a percentage, factor, or update for a fiscal year, 
year, cost reporting period, or other annual period, is a productivity 
adjustment equal to the 10-year moving average of changes in 
annual economy-wide private nonfarm business multi-factor produc-
tivity (as projected by the Secretary for the 10-year period ending 
with the applicable fiscal year, year, cost reporting period, or other 
annual period). 
‘‘(III) The application of subclause (I) may result in the 
applicable percentage increase described in clause (i) being less 
than 0.0 for a fiscal year, and may result in payment rates under 
this section for a fiscal year being less than such payment rates 
for the preceding fiscal year. 
‘‘(xii) After determining the applicable percentage increase 
described in clause (i), and after application of clauses (viii), (ix), 
and (xi), the Secretary shall reduce such applicable percentage 
increase— 
‘‘(I) for each of fiscal years 2010 and 2011, by 0.25 percent-
age point; and 
‘‘(II) subject to clause (xiii), for each of fiscal years 2012 
through 2019, by 0.2 percentage point. 
The application of this clause may result in the applicable percent-
age increase described in clause (i) being less than 0.0 for a fiscal 
year, and may result in payment rates under this section for a 
fiscal year being less than such payment rates for the preceding 
fiscal year. 
‘‘(xiii) Clause (xii) shall be applied with respect to any of fiscal 
years 2014 through 2019 by substituting ‘0.0 percentage points’ 
for ‘0.2 percentage point’, if for such fiscal year—
H. R. 3590—363 
‘‘(I) the excess (if any) of— 
‘‘(aa) the total percentage of the non-elderly insured 
population for the preceding fiscal year (based on the most 
recent estimates available from the Director of the Congres-
sional Budget Office before a vote in either House on the 
Patient Protection and Affordable Care Act that, if deter-
mined in the affirmative, would clear such Act for enroll-
ment); over 
‘‘(bb) the total percentage of the non-elderly insured 
population for such preceding fiscal year (as estimated 
by the Secretary); exceeds 
‘‘(II) 5 percentage points.’’. 
(b) SKILLED NURSING FACILITIES.—Section 1888(e)(5)(B) of the 
Social Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended— 
(1) by striking ‘‘PERCENTAGE.—The term’’ and inserting 
‘‘PERCENTAGE.— 
‘‘(i) IN GENERAL.—Subject to clause (ii), the term’’; 
and 
(2) by adding at the end the following new clause: 
‘‘(ii) ADJUSTMENT.—For fiscal year 2012 and each 
subsequent fiscal year, after determining the percent-
age described in clause (i), the Secretary shall reduce 
such percentage by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II). The applica-
tion of the preceding sentence may result in such 
percentage being less than 0.0 for a fiscal year, and 
may result in payment rates under this subsection 
for a fiscal year being less than such payment rates 
for the preceding fiscal year.’’. 
(c) LONG-TERM CARE HOSPITALS.—Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the 
end the following new paragraphs: 
‘‘(3) IMPLEMENTATION FOR RATE YEAR 2010 AND SUBSEQUENT 
YEARS.— 
‘‘(A) IN
GENERAL.—In implementing the system 
described in paragraph (1) for rate year 2010 and each 
subsequent rate year, any annual update to a standard 
Federal rate for discharges for the hospital during the 
rate year, shall be reduced— 
‘‘(i) for rate year 2012 and each subsequent rate 
year, by the productivity adjustment described in sec-
tion 1886(b)(3)(B)(xi)(II); and 
‘‘(ii) for each of rate years 2010 through 2019, 
by the other adjustment described in paragraph (4). 
‘‘(B) SPECIAL RULE.—The application of this paragraph 
may result in such annual update being less than 0.0 
for a rate year, and may result in payment rates under 
the system described in paragraph (1) for a rate year 
being less than such payment rates for the preceding rate 
year. 
‘‘(4) OTHER ADJUSTMENT.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (3)(A)(ii), 
the other adjustment described in this paragraph is— 
‘‘(i) for each of rate years 2010 and 2011, 0.25 
percentage point; and 
‘‘(ii) subject to subparagraph (B), for each of rate 
years 2012 through 2019, 0.2 percentage point.
H. R. 3590—364 
‘‘(B) REDUCTION
OF
OTHER
ADJUSTMENT.—Subpara-
graph (A)(ii) shall be applied with respect to any of rate 
years 2014 through 2019 by substituting ‘0.0 percentage 
points’ for ‘0.2 percentage point’, if for such rate year— 
‘‘(i) the excess (if any) of— 
‘‘(I) the total percentage of the non-elderly 
insured population for the preceding rate year 
(based on the most recent estimates available from 
the Director of the Congressional Budget Office 
before a vote in either House on the Patient Protec-
tion and Affordable Care Act that, if determined 
in the affirmative, would clear such Act for enroll-
ment); over 
‘‘(II) the total percentage of the non-elderly 
insured population for such preceding rate year 
(as estimated by the Secretary); exceeds 
‘‘(ii) 5 percentage points.’’. 
(d) INPATIENT REHABILITATION FACILITIES.—Section 1886(j)(3) 
of the Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended— 
(1) in subparagraph (C)— 
(A) by striking ‘‘FACTOR.—For purposes’’ and inserting 
‘‘FACTOR.— 
‘‘(i) IN GENERAL.—For purposes’’; 
(B) by inserting ‘‘subject to clause (ii)’’ before the period 
at the end of the first sentence of clause (i), as added 
by paragraph (1); and 
(C) by adding at the end the following new clause: 
‘‘(ii) PRODUCTIVITY AND OTHER ADJUSTMENT.—After 
establishing the increase factor described in clause (i) 
for a fiscal year, the Secretary shall reduce such 
increase factor— 
‘‘(I) for fiscal year 2012 and each subsequent 
fiscal 
year, 
by 
the 
productivity 
adjustment 
described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(II) for each of fiscal years 2010 through 2019, 
by the other adjustment described in subparagraph 
(D). 
The application of this clause may result in the 
increase factor under this subparagraph being less 
than 0.0 for a fiscal year, and may result in payment 
rates under this subsection for a fiscal year being 
less than such payment rates for the preceding fiscal 
year.’’; and 
(2) by adding at the end the following new subparagraph: 
‘‘(D) OTHER ADJUSTMENT.— 
‘‘(i) IN GENERAL.—For purposes of subparagraph 
(C)(ii)(II), the other adjustment described in this 
subparagraph is— 
‘‘(I) for each of fiscal years 2010 and 2011, 
0.25 percentage point; and 
‘‘(II) subject to clause (ii), for each of fiscal 
years 2012 through 2019, 0.2 percentage point. 
‘‘(ii) REDUCTION OF OTHER ADJUSTMENT.—Clause 
(i)(II) shall be applied with respect to any of fiscal 
years 2014 through 2019 by substituting ‘0.0 percent-
age points’ for ‘0.2 percentage point’, if for such fiscal 
year—
H. R. 3590—365 
‘‘(I) the excess (if any) of— 
‘‘(aa) the total percentage of the non- 
elderly insured population for the preceding 
fiscal year (based on the most recent estimates 
available from the Director of the Congres-
sional Budget Office before a vote in either 
House on the Patient Protection and Afford-
able Care Act that, if determined in the 
affirmative, would clear such Act for enroll-
ment); over 
‘‘(bb) the total percentage of the non- 
elderly insured population for such preceding 
fiscal year (as estimated by the Secretary); 
exceeds 
‘‘(II) 5 percentage points.’’. 
(e) HOME HEALTH AGENCIES.—Section 1895(b)(3)(B) of the 
Social Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 
(1) in clause (ii)(V), by striking ‘‘clause (v)’’ and inserting 
‘‘clauses (v) and (vi)’’; and 
(2) by adding at the end the following new clause: 
‘‘(vi) ADJUSTMENTS.—After determining the home 
health market basket percentage increase under clause 
(iii), and after application of clause (v), the Secretary 
shall reduce such percentage— 
‘‘(I) for 2015 and each subsequent year, by 
the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II); and 
‘‘(II) for each of 2011 and 2012, by 1 percentage 
point. 
The application of this clause may result in the home 
health market basket percentage increase under clause 
(iii) being less than 0.0 for a year, and may result 
in payment rates under the system under this sub-
section for a year being less than such payment rates 
for the preceding year.’’. 
(f) PSYCHIATRIC HOSPITALS.—Section 1886 of the Social Security 
Act, as amended by sections 3001, 3008, 3025, and 3133, is amended 
by adding at the end the following new subsection: 
‘‘(s) PROSPECTIVE PAYMENT FOR PSYCHIATRIC HOSPITALS.— 
‘‘(1) REFERENCE TO ESTABLISHMENT AND IMPLEMENTATION 
OF SYSTEM.—For provisions related to the establishment and 
implementation of a prospective payment system for payments 
under this title for inpatient hospital services furnished by 
psychiatric hospitals (as described in clause (i) of subsection 
(d)(1)(B)) and psychiatric units (as described in the matter 
following clause (v) of such subsection), see section 124 of 
the Medicare, Medicaid, and SCHIP Balanced Budget Refine-
ment Act of 1999. 
‘‘(2) IMPLEMENTATION FOR RATE YEAR BEGINNING IN 2010 
AND SUBSEQUENT RATE YEARS.— 
‘‘(A) IN
GENERAL.—In implementing the system 
described in paragraph (1) for the rate year beginning 
in 2010 and any subsequent rate year, any update to a 
base rate for days during the rate year for a psychiatric 
hospital or unit, respectively, shall be reduced—
H. R. 3590—366 
‘‘(i) for the rate year beginning in 2012 and each 
subsequent rate year, by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(ii) for each of the rate years beginning in 2010 
through 2019, by the other adjustment described in 
paragraph (3). 
‘‘(B) SPECIAL RULE.—The application of this paragraph 
may result in such update being less than 0.0 for a rate 
year, and may result in payment rates under the system 
described in paragraph (1) for a rate year being less than 
such payment rates for the preceding rate year. 
‘‘(3) OTHER ADJUSTMENT.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (2)(A)(ii), 
the other adjustment described in this paragraph is— 
‘‘(i) for each of the rate years beginning in 2010 
and 2011, 0.25 percentage point; and 
‘‘(ii) subject to subparagraph (B), for each of the 
rate years beginning in 2012 through 2019, 0.2 percent-
age point. 
‘‘(B) REDUCTION
OF
OTHER
ADJUSTMENT.—Subpara-
graph (A)(ii) shall be applied with respect to any of rate 
years 2014 through 2019 by substituting ‘0.0 percentage 
points’ for ‘0.2 percentage point’, if for such rate year— 
‘‘(i) the excess (if any) of— 
‘‘(I) the total percentage of the non-elderly 
insured population for the preceding rate year 
(based on the most recent estimates available from 
the Director of the Congressional Budget Office 
before a vote in either House on the Patient Protec-
tion and Affordable Care Act that, if determined 
in the affirmative, would clear such Act for enroll-
ment); over 
‘‘(II) the total percentage of the non-elderly 
insured population for such preceding rate year 
(as estimated by the Secretary); exceeds 
‘‘(ii) 5 percentage points.’’. 
(g) HOSPICE CARE.—Section 1814(i)(1)(C) of the Social Security 
Act (42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is 
amended by adding at the end the following new clauses: 
‘‘(iv) After determining the market basket percentage increase 
under clause (ii)(VII) or (iii), as applicable, with respect to fiscal 
year 2013 and each subsequent fiscal year, the Secretary shall 
reduce such percentage— 
‘‘(I) for 2013 and each subsequent fiscal year, by the produc-
tivity adjustment described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(II) subject to clause (v), for each of fiscal years 2013 
through 2019, by 0.5 percentage point. 
The application of this clause may result in the market basket 
percentage increase under clause (ii)(VII) or (iii), as applicable, 
being less than 0.0 for a fiscal year, and may result in payment 
rates under this subsection for a fiscal year being less than such 
payment rates for the preceding fiscal year. 
‘‘(v) Clause (iv)(II) shall be applied with respect to any of 
fiscal years 2014 through 2019 by substituting ‘0.0 percentage 
points’ for ‘0.5 percentage point’, if for such fiscal year— 
‘‘(I) the excess (if any) of—
H. R. 3590—367 
‘‘(aa) the total percentage of the non-elderly insured 
population for the preceding fiscal year (based on the most 
recent estimates available from the Director of the Congres-
sional Budget Office before a vote in either House on the 
Patient Protection and Affordable Care Act that, if deter-
mined in the affirmative, would clear such Act for enroll-
ment); over 
‘‘(bb) the total percentage of the non-elderly insured 
population for such preceding fiscal year (as estimated 
by the Secretary); exceeds 
‘‘(II) 5 percentage points.’’. 
(h) DIALYSIS.—Section 1881(b)(14)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(14)(F)) is amended— 
(1) in clause (i)— 
(A) by inserting ‘‘(I)’’ after ‘‘(F)(i)’’ 
(B) in subclause (I), as inserted by subparagraph (A)— 
(i) by striking ‘‘clause (ii)’’ and inserting ‘‘subclause 
(II) and clause (ii)’’; and 
(ii) by striking ‘‘minus 1.0 percentage point’’; and 
(C) by adding at the end the following new subclause: 
‘‘(II) For 2012 and each subsequent year, after determining 
the increase factor described in subclause (I), the Secretary shall 
reduce such increase factor by the productivity adjustment described 
in section 1886(b)(3)(B)(xi)(II). The application of the preceding 
sentence may result in such increase factor being less than 0.0 
for a year, and may result in payment rates under the payment 
system under this paragraph for a year being less than such pay-
ment rates for the preceding year.’’; and 
(2) in clause (ii)(II)— 
(A) by striking ‘‘The’’ and inserting ‘‘Subject to clause 
(i)(II), the’’; and 
(B) by striking ‘‘clause (i) minus 1.0 percentage point’’ 
and inserting ‘‘clause (i)(I)’’. 
(i) OUTPATIENT HOSPITALS.—Section 1833(t)(3) of the Social 
Security Act (42 U.S.C. 1395l(t)(3)) is amended— 
(1) in subparagraph (C)(iv), by inserting ‘‘and subparagraph 
(F) of this paragraph’’ after ‘‘(17)’’; and 
(2) by adding at the end the following new subparagraphs: 
‘‘(F) PRODUCTIVITY
AND
OTHER
ADJUSTMENT.—After 
determining the OPD fee schedule increase factor under 
subparagraph (C)(iv), the Secretary shall reduce such 
increase factor— 
‘‘(i) for 2012 and subsequent years, by the produc-
tivity 
adjustment 
described 
in 
section 
1886(b)(3)(B)(xi)(II); and 
‘‘(ii) for each of 2010 through 2019, by the adjust-
ment described in subparagraph (G). 
The application of this subparagraph may result in the 
increase factor under subparagraph (C)(iv) being less than 
0.0 for a year, and may result in payment rates under 
the payment system under this subsection for a year being 
less than such payment rates for the preceding year. 
‘‘(G) OTHER ADJUSTMENT.— 
‘‘(i) ADJUSTMENT.—For purposes of subparagraph 
(F)(ii), the adjustment described in this subparagraph 
is—
H. R. 3590—371 
(1) in paragraph (2), in the matter preceding subparagraph 
(A), by inserting ‘‘subject to paragraph (6),’’ after ‘‘subsection,’’; 
(2) in paragraph (3)(A)(i), by striking ‘‘The applicable’’ and 
inserting ‘‘Subject to paragraph (6), the applicable’’; 
(3) by redesignating paragraph (6) as paragraph (7); and 
(4) by inserting after paragraph (5) the following new para-
graph: 
‘‘(6) TEMPORARY ADJUSTMENT TO INCOME THRESHOLDS.— 
Notwithstanding any other provision of this subsection, during 
the period beginning on January 1, 2011, and ending on 
December 31, 2019— 
‘‘(A) the threshold amount otherwise applicable under 
paragraph (2) shall be equal to such amount for 2010; 
and 
‘‘(B) the dollar amounts otherwise applicable under 
paragraph (3)(C)(i) shall be equal to such dollar amounts 
for 2010.’’. 
SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD. 
(a) BOARD.— 
(1) IN GENERAL.—Title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.), as amended by section 3022, is 
amended by adding at the end the following new section: 
‘‘INDEPENDENT MEDICARE ADVISORY BOARD 
‘‘SEC. 1899A. (a) ESTABLISHMENT.—There is established an 
independent board to be known as the ‘Independent Medicare 
Advisory Board’. 
‘‘(b) PURPOSE.—It is the purpose of this section to, in accordance 
with the following provisions of this section, reduce the per capita 
rate of growth in Medicare spending— 
‘‘(1) by requiring the Chief Actuary of the Centers for 
Medicare & Medicaid Services to determine in each year to 
which this section applies (in this section referred to as ‘a 
determination year’) the projected per capita growth rate under 
Medicare for the second year following the determination year 
(in this section referred to as ‘an implementation year’); 
‘‘(2) if the projection for the implementation year exceeds 
the target growth rate for that year, by requiring the Board 
to develop and submit during the first year following the deter-
mination year (in this section referred to as ‘a proposal year’) 
a proposal containing recommendations to reduce the Medicare 
per capita growth rate to the extent required by this section; 
and 
‘‘(3) by requiring the Secretary to implement such proposals 
unless Congress enacts legislation pursuant to this section. 
‘‘(c) BOARD PROPOSALS.— 
‘‘(1) DEVELOPMENT.— 
‘‘(A) IN GENERAL.—The Board shall develop detailed 
and specific proposals related to the Medicare program 
in accordance with the succeeding provisions of this section. 
‘‘(B) ADVISORY REPORTS.—Beginning January 15, 2014, 
the Board may develop and submit to Congress advisory 
reports on matters related to the Medicare program, regard-
less of whether or not the Board submitted a proposal 
for such year. Such a report may, for years prior to 2020,
H. R. 3590—372 
include recommendations regarding improvements to pay-
ment systems for providers of services and suppliers who 
are not otherwise subject to the scope of the Board’s rec-
ommendations in a proposal under this section. Any 
advisory report submitted under this subparagraph shall 
not be subject to the rules for congressional consideration 
under subsection (d). 
‘‘(2) PROPOSALS.— 
‘‘(A) REQUIREMENTS.—Each proposal submitted under 
this section in a proposal year shall meet each of the 
following requirements: 
‘‘(i) If the Chief Actuary of the Centers for Medicare 
& Medicaid Services has made a determination under 
paragraph (7)(A) in the determination year, the pro-
posal shall include recommendations so that the pro-
posal as a whole (after taking into account rec-
ommendations under clause (v)) will result in a net 
reduction in total Medicare program spending in the 
implementation year that is at least equal to the 
applicable savings target established under paragraph 
(7)(B) for such implementation year. In determining 
whether a proposal meets the requirement of the pre-
ceding sentence, reductions in Medicare program 
spending during the 3-month period immediately pre-
ceding the implementation year shall be counted to 
the extent that such reductions are a result of the 
implementation of recommendations contained in the 
proposal for a change in the payment rate for an item 
or service that was effective during such period pursu-
ant to subsection (e)(2)(A). 
‘‘(ii) The proposal shall not include any rec-
ommendation to ration health care, raise revenues or 
Medicare beneficiary premiums under section 1818, 
1818A, or 1839, increase Medicare beneficiary cost- 
sharing (including deductibles, coinsurance, and copay-
ments), or otherwise restrict benefits or modify eligi-
bility criteria. 
‘‘(iii) In the case of proposals submitted prior to 
December 31, 2018, the proposal shall not include any 
recommendation that would reduce payment rates for 
items and services furnished, prior to December 31, 
2019, by providers of services (as defined in section 
1861(u)) and suppliers (as defined in section 1861(d)) 
scheduled, pursuant to the amendments made by sec-
tion 3401 of the Patient Protection and Affordable Care 
Act, to receive a reduction to the inflationary payment 
updates of such providers of services and suppliers 
in excess of a reduction due to productivity in a year 
in which such recommendations would take effect. 
‘‘(iv) As appropriate, the proposal shall include 
recommendations to reduce Medicare payments under 
parts C and D, such as reductions in direct subsidy 
payments to Medicare Advantage and prescription drug 
plans specified under paragraph (1) and (2) of section 
1860D–15(a) 
that 
are 
related 
to 
administrative 
expenses (including profits) for basic coverage, denying 
high bids or removing high bids for prescription drug
H. R. 3590—373 
coverage from the calculation of the national average 
monthly bid amount under section 1860D–13(a)(4), and 
reductions in payments to Medicare Advantage plans 
under clauses (i) and (ii) of section 1853(a)(1)(B) that 
are related to administrative expenses (including 
profits) and performance bonuses for Medicare Advan-
tage plans under section 1853(n). Any such rec-
ommendation shall not affect the base beneficiary pre-
mium percentage specified under 1860D–13(a). 
‘‘(v) The proposal shall include recommendations 
with respect to administrative funding for the Sec-
retary to carry out the recommendations contained 
in the proposal. 
‘‘(vi) The proposal shall only include recommenda-
tions related to the Medicare program. 
‘‘(B) ADDITIONAL CONSIDERATIONS.—In developing and 
submitting each proposal under this section in a proposal 
year, the Board shall, to the extent feasible— 
‘‘(i) give priority to recommendations that extend 
Medicare solvency; 
‘‘(ii) include recommendations that— 
‘‘(I) improve the health care delivery system 
and health outcomes, including by promoting 
integrated care, care coordination, prevention and 
wellness, and quality and efficiency improvement; 
and 
‘‘(II) protect and improve Medicare bene-
ficiaries’ access to necessary and evidence-based 
items and services, including in rural and frontier 
areas; 
‘‘(iii) include recommendations that target reduc-
tions in Medicare program spending to sources of 
excess cost growth; 
‘‘(iv) consider the effects on Medicare beneficiaries 
of changes in payments to providers of services (as 
defined in section 1861(u)) and suppliers (as defined 
in section 1861(d)); 
‘‘(v) consider the effects of the recommendations 
on providers of services and suppliers with actual or 
projected negative cost margins or payment updates; 
and 
‘‘(vi) consider the unique needs of Medicare bene-
ficiaries who are dually eligible for Medicare and the 
Medicaid program under title XIX. 
‘‘(C) NO
INCREASE
IN
TOTAL
MEDICARE
PROGRAM 
SPENDING.—Each proposal submitted under this section 
shall be designed in such a manner that implementation 
of the recommendations contained in the proposal would 
not be expected to result, over the 10-year period starting 
with the implementation year, in any increase in the total 
amount of net Medicare program spending relative to the 
total amount of net Medicare program spending that would 
have occurred absent such implementation. 
‘‘(D) CONSULTATION WITH MEDPAC.—The Board shall 
submit a draft copy of each proposal to be submitted under 
this section to the Medicare Payment Advisory Commission 
established under section 1805 for its review. The Board
H. R. 3590—374 
shall submit such draft copy by not later than September 
1 of the determination year. 
‘‘(E) REVIEW AND COMMENT BY THE SECRETARY.—The 
Board shall submit a draft copy of each proposal to be 
submitted to Congress under this section to the Secretary 
for the Secretary’s review and comment. The Board shall 
submit such draft copy by not later than September 1 
of the determination year. Not later than March 1 of the 
submission year, the Secretary shall submit a report to 
Congress on the results of such review, unless the Secretary 
submits a proposal under paragraph (5)(A) in that year. 
‘‘(F) CONSULTATIONS.—In carrying out its duties under 
this section, the Board shall engage in regular consultations 
with the Medicaid and CHIP Payment and Access Commis-
sion under section 1900. 
‘‘(3) TRANSMISSION OF BOARD PROPOSAL TO PRESIDENT.— 
‘‘(A) IN GENERAL.— 
‘‘(i) IN
GENERAL.—Except as provided in clause 
(ii) and subsection (f)(3)(B), the Board shall transmit 
a proposal under this section to the President on 
January 15 of each year (beginning with 2014). 
‘‘(ii) EXCEPTION.—The Board shall not submit a 
proposal under clause (i) in a proposal year if the 
year is— 
‘‘(I) a year for which the Chief Actuary of 
the Centers for Medicare & Medicaid Services 
makes a determination in the determination year 
under paragraph (6)(A) that the growth rate 
described in clause (i) of such paragraph does not 
exceed the growth rate described in clause (ii) 
of such paragraph; 
‘‘(II) a year in which the Chief Actuary of 
the Centers for Medicare & Medicaid Services 
makes a determination in the determination year 
that the projected percentage increase (if any) for 
the medical care expenditure category of the Con-
sumer Price Index for All Urban Consumers 
(United States city average) for the implementa-
tion year is less than the projected percentage 
increase (if any) in the Consumer Price Index for 
All Urban Consumers (all items; United States 
city average) for such implementation year; or 
‘‘(III) for proposal year 2019 and subsequent 
proposal years, a year in which the Chief Actuary 
of the Centers for Medicare & Medicaid Services 
makes a determination in the determination year 
that the growth rate described in paragraph (8) 
exceeds the growth rate described in paragraph 
(6)(A)(i). 
‘‘(iii) START-UP
PERIOD.—The Board may not 
submit a proposal under clause (i) prior to January 
15, 2014. 
‘‘(B) REQUIRED
INFORMATION.—Each proposal sub-
mitted by the Board under subparagraph (A)(i) shall 
include— 
‘‘(i) the recommendations described in paragraph 
(2)(A)(i);
H. R. 3590—375 
‘‘(ii) an explanation of each recommendation con-
tained in the proposal and the reasons for including 
such recommendation; 
‘‘(iii) an actuarial opinion by the Chief Actuary 
of the Centers for Medicare & Medicaid Services certi-
fying that the proposal meets the requirements of sub-
paragraphs (A)(i) and (C) of paragraph (2); 
‘‘(iv) a legislative proposal that implements the 
recommendations; and 
‘‘(v) other information determined appropriate by 
the Board. 
‘‘(4) 
PRESIDENTIAL
SUBMISSION
TO
CONGRESS.—Upon 
receiving a proposal from the Board under paragraph (3)(A)(i) 
or the Secretary under paragraph (5), the President shall imme-
diately submit such proposal to Congress. 
‘‘(5) CONTINGENT
SECRETARIAL
DEVELOPMENT
OF
PRO-
POSAL.—If, with respect to a proposal year, the Board is 
required, to but fails, to submit a proposal to the President 
by the deadline applicable under paragraph (3)(A)(i), the Sec-
retary shall develop a detailed and specific proposal that satis-
fies the requirements of subparagraphs (A) and (C) (and, to 
the extent feasible, subparagraph (B)) of paragraph (2) and 
contains the information required paragraph (3)(B)). By not 
later than January 25 of the year, the Secretary shall 
transmit— 
‘‘(A) such proposal to the President; and 
‘‘(B) a copy of such proposal to the Medicare Payment 
Advisory Commission for its review. 
‘‘(6) PER
CAPITA
GROWTH
RATE
PROJECTIONS
BY
CHIEF 
ACTUARY.— 
‘‘(A) IN GENERAL.—Subject to subsection (f)(3)(A), not 
later than April 30, 2013, and annually thereafter, the 
Chief Actuary of the Centers for Medicare & Medicaid 
Services shall determine in each such year whether— 
‘‘(i) the projected Medicare per capita growth rate 
for the implementation year (as determined under 
subparagraph (B)); exceeds 
‘‘(ii) the projected Medicare per capita target 
growth rate for the implementation year (as deter-
mined under subparagraph (C)). 
‘‘(B) MEDICARE PER CAPITA GROWTH RATE.— 
‘‘(i) IN GENERAL.—For purposes of this section, the 
Medicare per capita growth rate for an implementation 
year shall be calculated as the projected 5-year average 
(ending with such year) of the growth in Medicare 
program spending per unduplicated enrollee. 
‘‘(ii) REQUIREMENT.—The projection under clause 
(i) shall— 
‘‘(I) to the extent that there is projected to 
be a negative update to the single conversion factor 
applicable to payments for physicians’ services 
under section 1848(d) furnished in the proposal 
year or the implementation year, assume that such 
update for such services is 0 percent rather than 
the negative percent that would otherwise apply; 
and
H. R. 3590—378 
‘‘(3) LIMITATION ON CHANGES TO THE BOARD RECOMMENDA-
TIONS.— 
‘‘(A) IN GENERAL.—It shall not be in order in the Senate 
or the House of Representatives to consider any bill, resolu-
tion, or amendment, pursuant to this subsection or con-
ference report thereon, that fails to satisfy the requirements 
of subparagraphs (A)(i) and (C) of subsection (c)(2). 
‘‘(B) LIMITATION
ON
CHANGES
TO
THE
BOARD
REC-
OMMENDATIONS
IN
OTHER
LEGISLATION.—It shall not be 
in order in the Senate or the House of Representatives 
to consider any bill, resolution, amendment, or conference 
report (other than pursuant to this section) that would 
repeal or otherwise change the recommendations of the 
Board if that change would fail to satisfy the requirements 
of subparagraphs (A)(i) and (C) of subsection (c)(2). 
‘‘(C) LIMITATION ON CHANGES TO THIS SUBSECTION.— 
It shall not be in order in the Senate or the House of 
Representatives to consider any bill, resolution, amend-
ment, or conference report that would repeal or otherwise 
change this subsection. 
‘‘(D) WAIVER.—This paragraph may be waived or sus-
pended in the Senate only by the affirmative vote of three- 
fifths of the Members, duly chosen and sworn. 
‘‘(E) APPEALS.—An affirmative vote of three-fifths of 
the Members of the Senate, duly chosen and sworn, shall 
be required in the Senate to sustain an appeal of the 
ruling of the Chair on a point of order raised under this 
paragraph. 
‘‘(4) EXPEDITED PROCEDURE.— 
‘‘(A) CONSIDERATION.—A motion to proceed to the 
consideration of the bill in the Senate is not debatable. 
‘‘(B) AMENDMENT.— 
‘‘(i) TIME LIMITATION.—Debate in the Senate on 
any amendment to a bill under this section shall be 
limited to 1 hour, to be equally divided between, and 
controlled by, the mover and the manager of the bill, 
and debate on any amendment to an amendment, 
debatable motion, or appeal shall be limited to 30 
minutes, to be equally divided between, and controlled 
by, the mover and the manager of the bill, except 
that in the event the manager of the bill is in favor 
of any such amendment, motion, or appeal, the time 
in opposition thereto shall be controlled by the minority 
leader or such leader’s designee. 
‘‘(ii) GERMANE.—No amendment that is not ger-
mane to the provisions of such bill shall be received. 
‘‘(iii) ADDITIONAL TIME.—The leaders, or either of 
them, may, from the time under their control on the 
passage of the bill, allot additional time to any Senator 
during the consideration of any amendment, debatable 
motion, or appeal. 
‘‘(iv) AMENDMENT NOT IN ORDER.—It shall not be 
in order to consider an amendment that would cause 
the bill to result in a net reduction in total Medicare 
program spending in the implementation year that 
is less than the applicable savings target established
H. R. 3590—379 
under subsection (c)(7)(B) for such implementation 
year. 
‘‘(v) WAIVER AND APPEALS.—This paragraph may 
be waived or suspended in the Senate only by the 
affirmative vote of three-fifths of the Members, duly 
chosen and sworn. An affirmative vote of three-fifths 
of the Members of the Senate, duly chosen and sworn, 
shall be required in the Senate to sustain an appeal 
of the ruling of the Chair on a point of order raised 
under this section. 
‘‘(C) CONSIDERATION BY THE OTHER HOUSE.— 
‘‘(i) IN GENERAL.—The expedited procedures pro-
vided in this subsection for the consideration of a bill 
introduced pursuant to paragraph (1) shall not apply 
to such a bill that is received by one House from 
the other House if such a bill was not introduced 
in the receiving House. 
‘‘(ii) BEFORE PASSAGE.—If a bill that is introduced 
pursuant to paragraph (1) is received by one House 
from the other House, after introduction but before 
disposition of such a bill in the receiving House, then 
the following shall apply: 
‘‘(I) The receiving House shall consider the 
bill introduced in that House through all stages 
of consideration up to, but not including, passage. 
‘‘(II) The question on passage shall be put 
on the bill of the other House as amended by 
the language of the receiving House. 
‘‘(iii) AFTER PASSAGE.—If a bill introduced pursuant 
to paragraph (1) is received by one House from the 
other House, after such a bill is passed by the receiving 
House, then the vote on passage of the bill that origi-
nates in the receiving House shall be considered to 
be the vote on passage of the bill received from the 
other House as amended by the language of the 
receiving House. 
‘‘(iv) DISPOSITION.—Upon disposition of a bill intro-
duced pursuant to paragraph (1) that is received by 
one House from the other House, it shall no longer 
be in order to consider the bill that originates in the 
receiving House. 
‘‘(v) LIMITATION.—Clauses (ii), (iii), and (iv) shall 
apply only to a bill received by one House from the 
other House if the bill— 
‘‘(I) is related only to the program under this 
title; and 
‘‘(II) satisfies the requirements of subpara-
graphs (A)(i) and (C) of subsection (c)(2). 
‘‘(D) SENATE LIMITS ON DEBATE.— 
‘‘(i) IN GENERAL.—In the Senate, consideration of 
the bill and on all debatable motions and appeals in 
connection therewith shall not exceed a total of 30 
hours, which shall be divided equally between the 
majority and minority leaders or their designees. 
‘‘(ii) MOTION TO FURTHER LIMIT DEBATE.—A motion 
to further limit debate on the bill is in order and 
is not debatable.
H. R. 3590—380 
‘‘(iii) MOTION OR APPEAL.—Any debatable motion 
or appeal is debatable for not to exceed 1 hour, to 
be divided equally between those favoring and those 
opposing the motion or appeal. 
‘‘(iv) FINAL DISPOSITION.—After 30 hours of consid-
eration, the Senate shall proceed, without any further 
debate on any question, to vote on the final disposition 
thereof to the exclusion of all amendments not then 
pending before the Senate at that time and to the 
exclusion of all motions, except a motion to table, or 
to reconsider and one quorum call on demand to estab-
lish the presence of a quorum (and motions required 
to establish a quorum) immediately before the final 
vote begins. 
‘‘(E) CONSIDERATION IN CONFERENCE.— 
‘‘(i) IN GENERAL.—Consideration in the Senate and 
the House of Representatives on the conference report 
or any messages between Houses shall be limited to 
10 hours, equally divided and controlled by the 
majority and minority leaders of the Senate or their 
designees and the Speaker of the House of Representa-
tives and the minority leader of the House of Rep-
resentatives or their designees. 
‘‘(ii) TIME LIMITATION.—Debate in the Senate on 
any amendment under this subparagraph shall be lim-
ited to 1 hour, to be equally divided between, and 
controlled by, the mover and the manager of the bill, 
and debate on any amendment to an amendment, 
debatable motion, or appeal shall be limited to 30 
minutes, to be equally divided between, and controlled 
by, the mover and the manager of the bill, except 
that in the event the manager of the bill is in favor 
of any such amendment, motion, or appeal, the time 
in opposition thereto shall be controlled by the minority 
leader or such leader’s designee. 
‘‘(iii) FINAL DISPOSITION.—After 10 hours of consid-
eration, the Senate shall proceed, without any further 
debate on any question, to vote on the final disposition 
thereof to the exclusion of all motions not then pending 
before the Senate at that time or necessary to resolve 
the differences between the Houses and to the exclu-
sion of all other motions, except a motion to table, 
or to reconsider and one quorum call on demand to 
establish the presence of a quorum (and motions 
required to establish a quorum) immediately before 
the final vote begins. 
‘‘(iv) LIMITATION.—Clauses (i) through (iii) shall 
only apply to a conference report, message or the 
amendments thereto if the conference report, message, 
or an amendment thereto— 
‘‘(I) is related only to the program under this 
title; and 
‘‘(II) satisfies the requirements of subpara-
graphs (A)(i) and (C) of subsection (c)(2). 
‘‘(F) VETO.—If the President vetoes the bill debate on 
a veto message in the Senate under this subsection shall
H. R. 3590—381 
be 1 hour equally divided between the majority and 
minority leaders or their designees. 
‘‘(5) RULES OF THE SENATE AND HOUSE OF REPRESENTA-
TIVES.—This subsection and subsection (f)(2) are enacted by 
Congress— 
‘‘(A) as an exercise of the rulemaking power of the 
Senate and the House of Representatives, respectively, and 
is deemed to be part of the rules of each House, respec-
tively, but applicable only with respect to the procedure 
to be followed in that House in the case of bill under 
this section, and it supersedes other rules only to the 
extent that it is inconsistent with such rules; and 
‘‘(B) with full recognition of the constitutional right 
of either House to change the rules (so far as they relate 
to the procedure of that House) at any time, in the same 
manner, and to the same extent as in the case of any 
other rule of that House. 
‘‘(e) IMPLEMENTATION OF PROPOSAL.— 
‘‘(1) IN GENERAL.—Notwithstanding any other provision of 
law, the Secretary shall, except as provided in paragraph (3), 
implement the recommendations contained in a proposal sub-
mitted by the President to Congress pursuant to this section 
on August 15 of the year in which the proposal is so submitted. 
‘‘(2) APPLICATION.— 
‘‘(A) IN
GENERAL.—A recommendation described in 
paragraph (1) shall apply as follows: 
‘‘(i) In the case of a recommendation that is a 
change in the payment rate for an item or service 
under Medicare in which payment rates change on 
a fiscal year basis (or a cost reporting period basis 
that relates to a fiscal year), on a calendar year basis 
(or a cost reporting period basis that relates to a cal-
endar year), or on a rate year basis (or a cost reporting 
period basis that relates to a rate year), such rec-
ommendation shall apply to items and services fur-
nished on the first day of the first fiscal year, calendar 
year, or rate year (as the case may be) that begins 
after such August 15. 
‘‘(ii) In the case of a recommendation relating to 
payments to plans under parts C and D, such rec-
ommendation shall apply to plan years beginning on 
the first day of the first calendar year that begins 
after such August 15. 
‘‘(iii) In the case of any other recommendation, 
such recommendation shall be addressed in the regular 
regulatory process timeframe and shall apply as soon 
as practicable. 
‘‘(B) INTERIM FINAL RULEMAKING.—The Secretary may 
use interim final rulemaking to implement any rec-
ommendation described in paragraph (1). 
‘‘(3) EXCEPTION.—The Secretary shall not be required to 
implement the recommendations contained in a proposal sub-
mitted in a proposal year by the President to Congress pursuant 
to this section if— 
‘‘(A) prior to August 15 of the proposal year, Federal 
legislation is enacted that includes the following provision: 
‘This Act supercedes the recommendations of the Board
H. R. 3590—382 
contained in the proposal submitted, in the year which 
includes the date of enactment of this Act, to Congress 
under section 1899A of the Social Security Act.’; and 
‘‘(B) in the case of implementation year 2020 and subse-
quent implementation years, a joint resolution described 
in subsection (f)(1) is enacted not later than August 15, 
2017. 
‘‘(4) NO
AFFECT
ON
AUTHORITY
TO
IMPLEMENT
CERTAIN 
PROVISIONS.—Nothing in paragraph (3) shall be construed to 
affect the authority of the Secretary to implement any rec-
ommendation contained in a proposal or advisory report under 
this section to the extent that the Secretary otherwise has 
the authority to implement such recommendation administra-
tively. 
‘‘(5) LIMITATION ON REVIEW.—There shall be no administra-
tive or judicial review under section 1869, section 1878, or 
otherwise of the implementation by the Secretary under this 
subsection of the recommendations contained in a proposal. 
‘‘(f) JOINT
RESOLUTION
REQUIRED
TO
DISCONTINUE
THE 
BOARD.— 
‘‘(1) IN GENERAL.—For purposes of subsection (e)(3)(B), a 
joint resolution described in this paragraph means only a joint 
resolution— 
‘‘(A) that is introduced in 2017 by not later than Feb-
ruary 1 of such year; 
‘‘(B) which does not have a preamble; 
‘‘(C) the title of which is as follows: ‘Joint resolution 
approving the discontinuation of the process for consider-
ation and automatic implementation of the annual proposal 
of the Independent Medicare Advisory Board under section 
1899A of the Social Security Act’; and 
‘‘(D) the matter after the resolving clause of which 
is as follows: ‘That Congress approves the discontinuation 
of the process for consideration and automatic implementa-
tion of the annual proposal of the Independent Medicare 
Advisory Board under section 1899A of the Social Security 
Act.’. 
‘‘(2) PROCEDURE.— 
‘‘(A) REFERRAL.—A joint resolution described in para-
graph (1) shall be referred to the Committee on Ways 
and Means and the Committee on Energy and Commerce 
of the House of Representatives and the Committee on 
Finance of the Senate. 
‘‘(B) DISCHARGE.—In the Senate, if the committee to 
which is referred a joint resolution described in paragraph 
(1) has not reported such joint resolution (or an identical 
joint resolution) at the end of 20 days after the joint resolu-
tion described in paragraph (1) is introduced, such com-
mittee may be discharged from further consideration of 
such joint resolution upon a petition supported in writing 
by 30 Members of the Senate, and such joint resolution 
shall be placed on the calendar. 
‘‘(C) CONSIDERATION.— 
‘‘(i) IN GENERAL.—In the Senate, when the com-
mittee to which a joint resolution is referred has 
reported, or when a committee is discharged (under 
subparagraph (C)) from further consideration of a joint
H. R. 3590—384 
‘‘(F) MAJORITY REQUIRED FOR ADOPTION.—A joint reso-
lution considered under this subsection shall require an 
affirmative vote of three-fifths of the Members, duly chosen 
and sworn, for adoption. 
‘‘(3) TERMINATION.—If a joint resolution described in para-
graph (1) is enacted not later than August 15, 2017— 
‘‘(A) the Chief Actuary of the Medicare & Medicaid 
Services shall not— 
‘‘(i) make any determinations under subsection 
(c)(6) after May 1, 2017; or 
‘‘(ii) provide any opinion pursuant to subsection 
(c)(3)(B)(iii) after January 16, 2018; 
‘‘(B) the Board shall not submit any proposals or 
advisory reports to Congress under this section after 
January 16, 2018; and 
‘‘(C) the Board and the consumer advisory council 
under subsection (k) shall terminate on August 16, 2018. 
‘‘(g) BOARD MEMBERSHIP; TERMS
OF OFFICE; CHAIRPERSON; 
REMOVAL.— 
‘‘(1) MEMBERSHIP.— 
‘‘(A) IN GENERAL.—The Board shall be composed of— 
‘‘(i) 15 members appointed by the President, by 
and with the advice and consent of the Senate; and 
‘‘(ii) the Secretary, the Administrator of the Center 
for Medicare & Medicaid Services, and the Adminis-
trator of the Health Resources and Services Adminis-
tration, all of whom shall serve ex officio as nonvoting 
members of the Board. 
‘‘(B) QUALIFICATIONS.— 
‘‘(i) IN GENERAL.—The appointed membership of 
the Board shall include individuals with national rec-
ognition for their expertise in health finance and 
economics, actuarial science, health facility manage-
ment, health plans and integrated delivery systems, 
reimbursement of health facilities, allopathic and osteo-
pathic physicians, and other providers of health serv-
ices, and other related fields, who provide a mix of 
different professionals, broad geographic representa-
tion, and a balance between urban and rural represent-
atives. 
‘‘(ii) INCLUSION.—The appointed membership of the 
Board shall include (but not be limited to) physicians 
and other health professionals, experts in the area 
of pharmaco-economics or prescription drug benefit pro-
grams, employers, third-party payers, individuals 
skilled in the conduct and interpretation of biomedical, 
health services, and health economics research and 
expertise in outcomes and effectiveness research and 
technology assessment. Such membership shall also 
include representatives of consumers and the elderly. 
‘‘(iii) MAJORITY
NONPROVIDERS.—Individuals who 
are directly involved in the provision or management 
of the delivery of items and services covered under 
this title shall not constitute a majority of the 
appointed membership of the Board. 
‘‘(C) ETHICAL DISCLOSURE.—The President shall estab-
lish a system for public disclosure by appointed members
H. R. 3590—385 
of the Board of financial and other potential conflicts of 
interest relating to such members. Appointed members of 
the Board shall be treated as officers in the executive 
branch for purposes of applying title I of the Ethics in 
Government Act of 1978 (Public Law 95–521). 
‘‘(D) CONFLICTS OF INTEREST.—No individual may serve 
as an appointed member if that individual engages in any 
other business, vocation, or employment. 
‘‘(E) CONSULTATION
WITH
CONGRESS.—In selecting 
individuals for nominations for appointments to the Board, 
the President shall consult with— 
‘‘(i) the majority leader of the Senate concerning 
the appointment of 3 members; 
‘‘(ii) the Speaker of the House of Representatives 
concerning the appointment of 3 members; 
‘‘(iii) the minority leader of the Senate concerning 
the appointment of 3 members; and 
‘‘(iv) the minority leader of the House of Represent-
atives concerning the appointment of 3 members. 
‘‘(2) TERM OF OFFICE.—Each appointed member shall hold 
office for a term of 6 years except that— 
‘‘(A) a member may not serve more than 2 full consecu-
tive terms (but may be reappointed to 2 full consecutive 
terms after being appointed to fill a vacancy on the Board); 
‘‘(B) a member appointed to fill a vacancy occurring 
prior to the expiration of the term for which that member’s 
predecessor was appointed shall be appointed for the 
remainder of such term; 
‘‘(C) a member may continue to serve after the expira-
tion of the member’s term until a successor has taken 
office; and 
‘‘(D) of the members first appointed under this section, 
5 shall be appointed for a term of 1 year, 5 shall be 
appointed for a term of 3 years, and 5 shall be appointed 
for a term of 6 years, the term of each to be designated 
by the President at the time of nomination. 
‘‘(3) CHAIRPERSON.— 
‘‘(A) IN GENERAL.—The Chairperson shall be appointed 
by the President, by and with the advice and consent 
of the Senate, from among the members of the Board. 
‘‘(B) DUTIES.—The Chairperson shall be the principal 
executive officer of the Board, and shall exercise all of 
the executive and administrative functions of the Board, 
including functions of the Board with respect to— 
‘‘(i) the appointment and supervision of personnel 
employed by the Board; 
‘‘(ii) the distribution of business among personnel 
appointed and supervised by the Chairperson and 
among administrative units of the Board; and 
‘‘(iii) the use and expenditure of funds. 
‘‘(C) GOVERNANCE.—In carrying out any of the func-
tions under subparagraph (B), the Chairperson shall be 
governed by the general policies established by the Board 
and by the decisions, findings, and determinations the 
Board shall by law be authorized to make.
H. R. 3590—386 
‘‘(D) REQUESTS FOR APPROPRIATIONS.—Requests or esti-
mates for regular, supplemental, or deficiency appropria-
tions on behalf of the Board may not be submitted by 
the Chairperson without the prior approval of a majority 
vote of the Board. 
‘‘(4) REMOVAL.—Any appointed member may be removed 
by the President for neglect of duty or malfeasance in office, 
but for no other cause. 
‘‘(h) VACANCIES; QUORUM; SEAL; VICE CHAIRPERSON; VOTING 
ON REPORTS.— 
‘‘(1) VACANCIES.—No vacancy on the Board shall impair 
the right of the remaining members to exercise all the powers 
of the Board. 
‘‘(2) QUORUM.—A majority of the appointed members of 
the Board shall constitute a quorum for the transaction of 
business, but a lesser number of members may hold hearings. 
‘‘(3) SEAL.—The Board shall have an official seal, of which 
judicial notice shall be taken. 
‘‘(4) VICE CHAIRPERSON.—The Board shall annually elect 
a Vice Chairperson to act in the absence or disability of the 
Chairperson or in case of a vacancy in the office of the Chair-
person. 
‘‘(5) VOTING ON PROPOSALS.—Any proposal of the Board 
must be approved by the majority of appointed members 
present. 
‘‘(i) POWERS OF THE BOARD.— 
‘‘(1) HEARINGS.—The Board may hold such hearings, sit 
and act at such times and places, take such testimony, and 
receive such evidence as the Board considers advisable to carry 
out this section. 
‘‘(2) AUTHORITY TO INFORM RESEARCH PRIORITIES FOR DATA 
COLLECTION.—The Board may advise the Secretary on priorities 
for health services research, particularly as such priorities per-
tain to necessary changes and issues regarding payment 
reforms under Medicare. 
‘‘(3) OBTAINING
OFFICIAL
DATA.—The Board may secure 
directly from any department or agency of the United States 
information necessary to enable it to carry out this section. 
Upon request of the Chairperson, the head of that department 
or agency shall furnish that information to the Board on an 
agreed upon schedule. 
‘‘(4) POSTAL
SERVICES.—The Board may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Federal Government. 
‘‘(5) GIFTS.—The Board may accept, use, and dispose of 
gifts or donations of services or property. 
‘‘(6) OFFICES.—The Board shall maintain a principal office 
and such field offices as it determines necessary, and may 
meet and exercise any of its powers at any other place. 
‘‘(j) PERSONNEL MATTERS.— 
‘‘(1) COMPENSATION OF MEMBERS AND CHAIRPERSON.—Each 
appointed member, other than the Chairperson, shall be com-
pensated at a rate equal to the annual rate of basic pay pre-
scribed for level III of the Executive Schedule under section 
5315 of title 5, United States Code. The Chairperson shall 
be compensated at a rate equal to the daily equivalent of 
the annual rate of basic pay prescribed for level II of the
H. R. 3590—387 
Executive Schedule under section 5315 of title 5, United States 
Code. 
‘‘(2) TRAVEL EXPENSES.—The appointed members shall be 
allowed travel expenses, including per diem in lieu of subsist-
ence, at rates authorized for employees of agencies under sub-
chapter I of chapter 57 of title 5, United States Code, while 
away from their homes or regular places of business in the 
performance of services for the Board. 
‘‘(3) STAFF.— 
‘‘(A) IN
GENERAL.—The Chairperson may, without 
regard to the civil service laws and regulations, appoint 
and terminate an executive director and such other addi-
tional personnel as may be necessary to enable the Board 
to perform its duties. The employment of an executive 
director shall be subject to confirmation by the Board. 
‘‘(B) COMPENSATION.—The Chairperson may fix the 
compensation of the executive director and other personnel 
without regard to chapter 51 and subchapter III of chapter 
53 of title 5, United States Code, relating to classification 
of positions and General Schedule pay rates, except that 
the rate of pay for the executive director and other per-
sonnel may not exceed the rate payable for level V of 
the Executive Schedule under section 5316 of such title. 
‘‘(4) DETAIL
OF
GOVERNMENT
EMPLOYEES.—Any Federal 
Government employee may be detailed to the Board without 
reimbursement, and such detail shall be without interruption 
or loss of civil service status or privilege. 
‘‘(5) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERV-
ICES.—The Chairperson may procure temporary and intermit-
tent services under section 3109(b) of title 5, United States 
Code, at rates for individuals which do not exceed the daily 
equivalent of the annual rate of basic pay prescribed for level 
V of the Executive Schedule under section 5316 of such title. 
‘‘(k) CONSUMER ADVISORY COUNCIL.— 
‘‘(1) IN GENERAL.—There is established a consumer advisory 
council to advise the Board on the impact of payment policies 
under this title on consumers. 
‘‘(2) MEMBERSHIP.— 
‘‘(A) 
NUMBER
AND
APPOINTMENT.—The 
consumer 
advisory council shall be composed of 10 consumer rep-
resentatives appointed by the Comptroller General of the 
United States, 1 from among each of the 10 regions estab-
lished by the Secretary as of the date of enactment of 
this section. 
‘‘(B) QUALIFICATIONS.—The membership of the council 
shall represent the interests of consumers and particular 
communities. 
‘‘(3) DUTIES.—The consumer advisory council shall, subject 
to the call of the Board, meet not less frequently than 2 times 
each year in the District of Columbia. 
‘‘(4) OPEN MEETINGS.—Meetings of the consumer advisory 
council shall be open to the public. 
‘‘(5) ELECTION
OF
OFFICERS.—Members of the consumer 
advisory council shall elect their own officers. 
‘‘(6) APPLICATION OF FACA.—The Federal Advisory Com-
mittee Act (5 U.S.C. App.) shall apply to the consumer advisory 
council except that section 14 of such Act shall not apply.