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(3) PROVISION
OF
FALSE
INFORMATION.—Sec-
tion 1857(g)(2)(A) of the Social Security Act (42 
U.S.C. 1395w–27(g)(2)(A)) is amended by inserting 
‘‘except with respect to a determination under sub-
paragraph (E), an assessment of not more than the 
amount claimed by such plan or plan sponsor based 
upon the misrepresentation or falsified information 
involved,’’ after ‘‘for each such determination,’’. 
(c) OBSTRUCTION
OF PROGRAM AUDITS.—Section 
1128(b)(2) of the Social Security Act (42 U.S.C. 1320a– 
7(b)(2)) is amended— 
(1) in the heading, by inserting ‘‘OR AUDIT’’ 
after ‘‘INVESTIGATION’’; and 
(2) by striking ‘‘investigation into’’ and all that 
follows through the period and inserting ‘‘investiga-
tion or audit related to—’’ 
‘‘(i) any offense described in para-
graph (1) or in subsection (a); or 
‘‘(ii) the use of funds received, directly 
or indirectly, from any Federal health care 
program (as defined in section 1128B(f)).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to acts committed on or after January 1, 2010.
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(2) EXCEPTION.—The amendments made by sub-
section (b)(1) take effect on the date of enactment of 
this Act. 
SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PRO-
TOCOL. 
(a) DEVELOPMENT OF SELF-REFERRAL DISCLOSURE 
PROTOCOL.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, in cooperation with the Inspector 
General of the Department of Health and Human 
Services, shall establish, not later than 6 months after 
the date of the enactment of this Act, a protocol to en-
able health care providers of services and suppliers to 
disclose an actual or potential violation of section 
1877 of the Social Security Act (42 U.S.C. 1395nn) 
pursuant to a self-referral disclosure protocol (in this 
section referred to as an ‘‘SRDP’’). The SRDP shall 
include direction to health care providers of services 
and suppliers on— 
(A) a specific person, official, or office to 
whom such disclosures shall be made; and 
(B) instruction on the implication of the 
SRDP on corporate integrity agreements and 
corporate compliance agreements.
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(2) PUBLICATION
ON
INTERNET
WEBSITE
OF 
SRDP INFORMATION.—The Secretary of Health and 
Human Services shall post information on the public 
Internet website of the Centers for Medicare & Med-
icaid Services to inform relevant stakeholders of how 
to disclose actual or potential violations pursuant to 
an SRDP. 
(3) RELATION
TO
ADVISORY
OPINIONS.—The 
SRDP shall be separate from the advisory opinion 
process set forth in regulations implementing section 
1877(g) of the Social Security Act. 
(b) REDUCTION IN AMOUNTS OWED.—The Secretary 
of Health and Human Services is authorized to reduce the 
amount due and owing for all violations under section 1877 
of the Social Security Act to an amount less than that speci-
fied in subsection (g) of such section. In establishing such 
amount for a violation, the Secretary may consider the fol-
lowing factors: 
(1) The nature and extent of the improper or il-
legal practice. 
(2) The timeliness of such self-disclosure. 
(3) The cooperation in providing additional in-
formation related to the disclosure. 
(4) Such other factors as the Secretary considers 
appropriate.
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(c) REPORT.—Not later than 18 months after the date 
on which the SRDP protocol is established under subsection 
(a)(1), the Secretary shall submit to Congress a report on 
the implementation of this section. Such report shall in-
clude— 
(1) the number of health care providers of serv-
ices and suppliers making disclosures pursuant to the 
SRDP; 
(2) the amounts collected pursuant to the SRDP; 
(3) the types of violations reported under the 
SRDP; and 
(4) such other information as may be necessary 
to evaluate the impact of this section. 
SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE 
MEDICAL 
EQUIPMENT, 
PROSTHETICS, 
ORTHOTICS, AND SUPPLIES COMPETITIVE AC-
QUISITION PROGRAM. 
(a) EXPANSION OF ROUND 2 OF THE DME COMPETI-
TIVE BIDDING PROGRAM.—Section 1847(a)(1) of the Social 
Security Act (42 U.S.C. 1395w–3(a)(1)) is amended— 
(1) in subparagraph (B)(i)(II), by striking ‘‘70’’ 
and inserting ‘‘91’’; and 
(2) in subparagraph (D)(ii)— 
(A) in subclause (I), by striking ‘‘and’’ at 
the end;
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(B) by redesignating subclause (II) as sub-
clause (III); and 
(C) by inserting after subclause (I) the fol-
lowing new subclause: 
‘‘(II) the Secretary shall include 
the next 21 largest metropolitan statis-
tical areas by total population (after 
those selected under subclause (I)) for 
such round; and’’. 
(b) REQUIREMENT TO EITHER COMPETITIVELY BID 
AREAS OR USE COMPETITIVE BID PRICES BY 2016.—Sec-
tion 1834(a)(1)(F) of the Social Security Act (42 U.S.C. 
1395m(a)(1)(F)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii)— 
(A) by inserting ‘‘(and, in the case of cov-
ered items furnished on or after January 1, 
2016, subject to clause (iii), shall)’’ after ‘‘may’’; 
and 
(B) by striking the period at the end and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(iii) in the case of covered items fur-
nished on or after January 1, 2016, the
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Secretary shall continue to make such ad-
justments described in clause (ii) as, under 
such competitive acquisition programs, ad-
ditional covered items are phased in or in-
formation is updated as contracts under 
section 1847 are recompeted in accordance 
with section 1847(b)(3)(B).’’. 
SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CON-
TRACTOR (RAC) PROGRAM. 
(a) EXPANSION TO MEDICAID.— 
(1) 
STATE
PLAN
AMENDMENT.—Section 
1902(a)(42) of the Social Security Act (42 U.S.C. 
1396a(a)(42)) is amended— 
(A) by striking ‘‘that the records’’ and in-
serting ‘‘that— 
‘‘(A) the records’’; 
(B) by inserting ‘‘and’’ after the semicolon; 
and 
(C) by adding at the end the following: 
‘‘(B) not later than December 31, 2010, the 
State shall— 
‘‘(i) establish a program under which 
the State contracts (consistent with State 
law and in the same manner as the Sec-
retary enters into contracts with recovery
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audit contractors under section 1893(h), 
subject to such exceptions or requirements as 
the Secretary may require for purposes of 
this title or a particular State) with 1 or 
more recovery audit contractors for the pur-
pose of identifying underpayments and 
overpayments and recouping overpayments 
under the State plan and under any waiver 
of the State plan with respect to all services 
for which payment is made to any entity 
under such plan or waiver; and 
‘‘(ii) provide assurances satisfactory to 
the Secretary that— 
‘‘(I) under such contracts, pay-
ment shall be made to such a con-
tractor only from amounts recovered; 
‘‘(II) from such amounts recov-
ered, payment— 
‘‘(aa) shall be made on a 
contingent basis for collecting 
overpayments; and 
‘‘(bb) may be made in such 
amounts as the State may specify 
for identifying underpayments;
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‘‘(III) the State has an adequate 
process for entities to appeal any ad-
verse determination made by such con-
tractors; and 
‘‘(IV) such program is carried out 
in accordance with such requirements 
as the Secretary shall specify, includ-
ing— 
‘‘(aa) for purposes of section 
1903(a)(7), 
that 
amounts 
ex-
pended by the State to carry out 
the program shall be considered 
amounts expended as necessary 
for the proper and efficient ad-
ministration of the State plan or 
a waiver of the plan; 
‘‘(bb) that section 1903(d) 
shall apply to amounts recovered 
under the program; and 
‘‘(cc) that the State and any 
such contractors under contract 
with the State shall coordinate 
such recovery audit efforts with 
other contractors or entities per-
forming audits of entities receiv-
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ing payments under the State 
plan or waiver in the State, in-
cluding efforts with Federal and 
State law enforcement with re-
spect to the Department of Jus-
tice, including the Federal Bureau 
of Investigations, the Inspector 
General of the Department of 
Health and Human Services, and 
the State medicaid fraud control 
unit; and’’. 
(2) COORDINATION; REGULATIONS.— 
(A) IN GENERAL.—The Secretary of Health 
and Human Services, acting through the Admin-
istrator of the Centers for Medicare & Medicaid 
Services, shall coordinate the expansion of the 
Recovery Audit Contractor program to Medicaid 
with States, particularly with respect to each 
State that enters into a contract with a recovery 
audit contractor for purposes of the State’s Med-
icaid program prior to December 31, 2010. 
(B) 
REGULATIONS.—The 
Secretary 
of 
Health and Human Services shall promulgate 
regulations to carry out this subsection and the 
amendments made by this subsection, including
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with respect to conditions of Federal financial 
participation, as specified by the Secretary. 
(b) EXPANSION TO MEDICARE PARTS C AND D.—Sec-
tion 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) is amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘part A or B’’ and in-
serting ‘‘this title’’; 
(2) in paragraph (2), by striking ‘‘parts A and 
B’’ and inserting ‘‘this title’’; 
(3) in paragraph (3), by inserting ‘‘(not later 
than December 31, 2010, in the case of contracts re-
lating to payments made under part C or D)’’ after 
‘‘2010’’; 
(4) in paragraph (4), in the matter preceding 
subparagraph (A), by striking ‘‘part A or B’’ and in-
serting ‘‘this title’’; and 
(5) by adding at the end the following: 
‘‘(9) SPECIAL RULES RELATING TO PARTS C AND 
D.—The Secretary shall enter into contracts under 
paragraph (1) to require recovery audit contractors 
to— 
‘‘(A) ensure that each MA plan under part 
C has an anti-fraud plan in effect and to review 
the effectiveness of each such anti-fraud plan;
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‘‘(B) ensure that each prescription drug 
plan under part D has an anti-fraud plan in ef-
fect and to review the effectiveness of each such 
anti-fraud plan; 
‘‘(C) examine claims for reinsurance pay-
ments under section 1860D–15(b) to determine 
whether prescription drug plans submitting such 
claims incurred costs in excess of the allowable 
reinsurance costs permitted under paragraph (2) 
of that section; and 
‘‘(D) review estimates submitted by pre-
scription drug plans by private plans with re-
spect to the enrollment of high cost beneficiaries 
(as defined by the Secretary) and to compare 
such estimates with the numbers of such bene-
ficiaries actually enrolled by such plans.’’. 
(c) ANNUAL REPORT.—The Secretary of Health and 
Human Services, acting through the Administrator of the 
Centers for Medicare & Medicaid Services, shall submit an 
annual report to Congress concerning the effectiveness of the 
Recovery Audit Contractor program under Medicaid and 
Medicare and shall include such reports recommendations 
for expanding or improving the program.
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Subtitle F—Additional Medicaid 
Program Integrity Provisions 
SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION 
UNDER MEDICAID IF TERMINATED UNDER 
MEDICARE OR OTHER STATE PLAN. 
Section 1902(a)(39) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting after 
‘‘1128A,’’ the following: ‘‘terminate the participation of any 
individual or entity in such program if (subject to such ex-
ceptions as are permitted with respect to exclusion under 
sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation of 
such individual or entity is terminated under title XVIII 
or any other State plan under this title,’’. 
SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RE-
LATING TO CERTAIN OWNERSHIP, CONTROL, 
AND MANAGEMENT AFFILIATIONS. 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396a(a)), as amended by section 6401(b), is amended by 
inserting after paragraph (77) the following: 
‘‘(78) provide that the State agency described in 
paragraph (9) exclude, with respect to a period, any 
individual or entity from participation in the pro-
gram under the State plan if such individual or enti-
ty owns, controls, or manages an entity that (or if
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such entity is owned, controlled, or managed by an 
individual or entity that)— 
‘‘(A) has unpaid overpayments (as defined 
by the Secretary) under this title during such pe-
riod determined by the Secretary or the State 
agency to be delinquent; 
‘‘(B) is suspended or excluded from partici-
pation under or whose participation is termi-
nated under this title during such period; or 
‘‘(C) is affiliated with an individual or en-
tity that has been suspended or excluded from 
participation under this title or whose participa-
tion is terminated under this title during such 
period;’’. 
SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 
ALTERNATE PAYEES REQUIRED TO REGISTER 
UNDER MEDICAID. 
(a) IN GENERAL.—Section 1902(a) of the Social Secu-
rity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended by 
section 6502(a), is amended by inserting after paragraph 
(78), the following: 
‘‘(79) provide that any agent, clearinghouse, or 
other alternate payee (as defined by the Secretary) 
that submits claims on behalf of a health care pro-
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vider must register with the State and the Secretary 
in a form and manner specified by the Secretary;’’. 
SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF 
DATA ELEMENTS UNDER MMIS TO DETECT 
FRAUD AND ABUSE. 
(a) IN GENERAL.—Section 1903(r)(1)(F) of the Social 
Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by in-
serting after ‘‘necessary’’ the following: ‘‘and including, for 
data submitted to the Secretary on or after January 1, 
2010, data elements from the automated data system that 
the Secretary determines to be necessary for program integ-
rity, program oversight, and administration, at such fre-
quency as the Secretary shall determine’’. 
(b) MANAGED CARE ORGANIZATIONS.— 
(1) IN GENERAL.—Section 1903(m)(2)(A)(xi) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and for 
the provision of such data to the State at a frequency 
and level of detail to be specified by the Secretary’’ 
after ‘‘patients’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply with respect to contract 
years beginning on or after January 1, 2010.
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SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS 
OR ENTITIES LOCATED OUTSIDE OF THE 
UNITED STATES. 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396b(a)), as amended by section 6503, is amended by in-
serting after paragraph (79) the following new paragraph: 
‘‘(80) provide that the State shall not provide 
any payments for items or services provided under 
the State plan or under a waiver to any financial in-
stitution or entity located outside of the United 
States;’’. 
SEC. 6506. OVERPAYMENTS. 
(a) EXTENSION
OF PERIOD
FOR COLLECTION
OF 
OVERPAYMENTS DUE TO FRAUD.— 
(1) IN GENERAL.—Section 1903(d)(2) of the So-
cial Security Act (42 U.S.C. 1396b(d)(2)) is amend-
ed— 
(A) in subparagraph (C)— 
(i) in the first sentence, by striking 
‘‘60 days’’ and inserting ‘‘1 year’’; and 
(ii) in the second sentence, by striking 
‘‘60 days’’ and inserting ‘‘1-year period’’; 
and 
(B) in subparagraph (D)— 
(i) in inserting ‘‘(i)’’ after ‘‘(D)’’; and 
(ii) by adding at the end the following:
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‘‘(ii) In any case where the State is unable to recover 
a debt which represents an overpayment (or any portion 
thereof) made to a person or other entity due to fraud with-
in 1 year of discovery because there is not a final deter-
mination of the amount of the overpayment under an ad-
ministrative or judicial process (as applicable), including 
as a result of a judgment being under appeal, no adjustment 
shall be made in the Federal payment to such State on ac-
count of such overpayment (or portion thereof) before the 
date that is 30 days after the date on which a final judg-
ment (including, if applicable, a final determination on an 
appeal) is made.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection take effect on the date of enactment 
of this Act and apply to overpayments discovered on 
or after that date. 
(b) CORRECTIVE ACTION.—The Secretary shall pro-
mulgate regulations that require States to correct Federally 
identified claims overpayments, of an ongoing or recurring 
nature, with new Medicaid Management Information Sys-
tem (MMIS) edits, audits, or other appropriate corrective 
action.
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SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT 
CODING INITIATIVE. 
Section 1903(r) of the Social Security Act (42 U.S.C. 
1396b(r)) is amended— 
(1) in paragraph (1)(B)— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iii), by adding ‘‘and’’ after 
the semi-colon; and 
(C) by adding at the end the following new 
clause: 
‘‘(iv) effective for claims filed on or 
after October 1, 2010, incorporate compat-
ible methodologies of the National Correct 
Coding Initiative administered by the Sec-
retary (or any successor initiative to pro-
mote correct coding and to control improper 
coding leading to inappropriate payment) 
and such other methodologies of that Initia-
tive (or such other national correct coding 
methodologies) as the Secretary identifies in 
accordance with paragraph (4);’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(4) For purposes of paragraph (1)(B)(iv), the Sec-
retary shall do the following:
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‘‘(A) Not later than September 1, 2010: 
‘‘(i) Identify those methodologies of the Na-
tional Correct Coding Initiative administered by 
the Secretary (or any successor initiative to pro-
mote correct coding and to control improper cod-
ing leading to inappropriate payment) which 
are compatible to claims filed under this title. 
‘‘(ii) Identify those methodologies of such 
Initiative (or such other national correct coding 
methodologies) that should be incorporated into 
claims filed under this title with respect to items 
or services for which States provide medical as-
sistance under this title and no national correct 
coding methodologies have been established under 
such Initiative with respect to title XVIII. 
‘‘(iii) Notify States of— 
‘‘(I) the methodologies identified under 
subparagraphs (A) and (B) (and of any 
other national correct coding methodologies 
identified under subparagraph (B)); and 
‘‘(II) how States are to incorporate 
such methodologies into claims filed under 
this title. 
‘‘(B) Not later than March 1, 2011, submit a re-
port to Congress that includes the notice to States
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under clause (iii) of subparagraph (A) and an anal-
ysis supporting the identification of the methodologies 
made under clauses (i) and (ii) of subparagraph 
(A).’’. 
SEC. 6508. GENERAL EFFECTIVE DATE. 
(a) IN GENERAL.—Except as otherwise provided in 
this subtitle, this subtitle and the amendments made by this 
subtitle take effect on January 1, 2011, without regard to 
whether final regulations to carry out such amendments 
and subtitle have been promulgated by that date. 
(b) DELAY IF STATE LEGISLATION REQUIRED.—In the 
case of a State plan for medical assistance under title XIX 
of the Social Security Act or a child health plan under title 
XXI of such Act which the Secretary of Health and Human 
Services determines requires State legislation (other than 
legislation appropriating funds) in order for the plan to 
meet the additional requirement imposed by the amend-
ments made by this subtitle, the State plan or child health 
plan shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its failure 
to meet this additional requirement before the first day of 
the first calendar quarter beginning after the close of the 
first regular session of the State legislature that begins after 
the date of the enactment of this Act. For purposes of the 
previous sentence, in the case of a State that has a 2-year
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legislative session, each year of such session shall be deemed 
to be a separate regular session of the State legislature. 
Subtitle G—Additional Program 
Integrity Provisions 
SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REP-
RESENTATIONS. 
(a) PROHIBITION.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.) is amended by adding at the end the 
following: 
‘‘SEC. 519. PROHIBITION ON FALSE STATEMENTS AND REP-
RESENTATIONS. 
‘‘No person, in connection with a plan or other ar-
rangement that is multiple employer welfare arrangement 
described in section 3(40), shall make a false statement or 
false representation of fact, knowing it to be false, in con-
nection with the marketing or sale of such plan or arrange-
ment, to any employee, any member of an employee organi-
zation, any beneficiary, any employer, any employee orga-
nization, the Secretary, or any State, or the representative 
or agent of any such person, State, or the Secretary, con-
cerning— 
‘‘(1) the financial condition or solvency of such 
plan or arrangement;
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‘‘(2) the benefits provided by such plan or ar-
rangement; 
‘‘(3) the regulatory status of such plan or other 
arrangement under any Federal or State law gov-
erning collective bargaining, labor management rela-
tions, or intern union affairs; or 
‘‘(4) the regulatory status of such plan or other 
arrangement regarding exemption from state regu-
latory authority under this Act. 
This section shall not apply to any plan or arrangement 
that does not fall within the meaning of the term ‘multiple 
employer welfare arrangement’ under section 3(40)(A).’’. 
(b) CRIMINAL PENALTIES.—Section 501 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C. 
1131) is amended— 
(1) by inserting ‘‘(a)’’ before ‘‘Any person’’; and 
(2) by adding at the end the following: 
‘‘(b) Any person that violates section 519 shall upon 
conviction be imprisoned not more than 10 years or fined 
under title 18, United States Code, or both.’’. 
(c) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the 
end the following: 
‘‘Sec. 519. Prohibition on false statement and representations.’’.
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SEC. 6602. CLARIFYING DEFINITION. 
Section 24(a)(2) of title 18, United States Code, is 
amended by inserting ‘‘or section 411, 518, or 511 of the 
Employee Retirement Income Security Act of 1974,’’ after 
‘‘1954 of this title’’. 
SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT 
FORM. 
Part C of title XXVII of the Public Health Service Act 
(42 U.S.C. 300gg–91 et seq.) is amended by adding at the 
end the following: 
‘‘SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FOR-
MAT. 
‘‘The Secretary shall request the National Association 
of Insurance Commissioners to develop a model uniform re-
port form for private health insurance issuer seeking to refer 
suspected fraud and abuse to State insurance departments 
or other responsible State agencies for investigation. The 
Secretary shall request that the National Association of In-
surance Commissioners develop recommendations for uni-
form reporting standards for such referrals.’’. 
SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT 
FRAUD AND ABUSE. 
(a) IN GENERAL.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.), as amended by section 6601, is further 
amended by adding at the end the following:
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‘‘SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT 
FRAUD AND ABUSE. 
‘‘The Secretary may, for the purpose of identifying, 
preventing, or prosecuting fraud and abuse, adopt regu-
latory standards establishing, or issue an order relating to 
a specific person establishing, that a person engaged in the 
business of providing insurance through a multiple em-
ployer welfare arrangement described in section 3(40) is 
subject to the laws of the States in which such person oper-
ates which regulate insurance in such State, notwith-
standing section 514(b)(6) of this Act or the Liability Risk 
Retention Act of 1986, and regardless of whether the law 
of the State is otherwise preempted under any of such provi-
sions. This section shall not apply to any plan or arrange-
ment that does not fall within the meaning of the term ‘mul-
tiple 
employer 
welfare 
arrangement’ 
under 
section 
3(40)(A).’’. 
(b) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement 
Income Security Act of 1974, as amended by section 6601, 
is further amended by adding at the end the following: 
‘‘Sec. 520. Applicability of State law to combat fraud and abuse.’’.
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SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO 
ISSUE 
ADMINISTRATIVE 
SUMMARY 
CEASE 
AND DESIST ORDERS AND SUMMARY SEI-
ZURES ORDERS AGAINST PLANS THAT ARE IN 
FINANCIALLY HAZARDOUS CONDITION. 
(a) IN GENERAL.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.), as amended by section 6604, is further 
amended by adding at the end the following: 
‘‘SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST 
ORDERS AND SUMMARY SEIZURE ORDERS 
AGAINST MULTIPLE EMPLOYER WELFARE AR-
RANGEMENTS IN FINANCIALLY HAZARDOUS 
CONDITION. 
‘‘(a) IN GENERAL.—The Secretary may issue a cease 
and desist (ex parte) order under this title if it appears 
to the Secretary that the alleged conduct of a multiple em-
ployer welfare arrangement described in section 3(40), other 
than a plan or arrangement described in subsection (g), is 
fraudulent, or creates an immediate danger to the public 
safety or welfare, or is causing or can be reasonably ex-
pected to cause significant, imminent, and irreparable pub-
lic injury. 
‘‘(b) HEARING.—A person that is adversely affected by 
the issuance of a cease and desist order under subsection 
(a) may request a hearing by the Secretary regarding such
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order. The Secretary may require that a proceeding under 
this section, including all related information and evidence, 
be conducted in a confidential manner. 
‘‘(c) BURDEN OF PROOF.—The burden of proof in any 
hearing conducted under subsection (b) shall be on the party 
requesting the hearing to show cause why the cease and de-
sist order should be set aside. 
‘‘(d) DETERMINATION.—Based upon the evidence pre-
sented at a hearing under subsection (b), the cease and de-
sist order involved may be affirmed, modified, or set aside 
by the Secretary in whole or in part. 
‘‘(e) SEIZURE.—The Secretary may issue a summary 
seizure order under this title if it appears that a multiple 
employer welfare arrangement is in a financially hazardous 
condition. 
‘‘(f) REGULATIONS.—The Secretary may promulgate 
such regulations or other guidance as may be necessary or 
appropriate to carry out this section. 
‘‘(g) EXCEPTION.—This section shall not apply to any 
plan or arrangement that does not fall within the meaning 
of the term ‘multiple employer welfare arrangement’ under 
section 3(40)(A).’’. 
(b) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement
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Income Security Act of 1974, as amended by section 6604, 
is further amended by adding at the end the following: 
‘‘Sec. 521. Administrative summary cease and desist orders and summary seizure 
orders against health plans in financially hazardous condition.’’. 
SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT 
OF LABOR. 
Section 101(g) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1021(g)) is amended— 
(1) by striking ‘‘Secretary may’’ and inserting 
‘‘Secretary shall’’; and 
(2) by inserting ‘‘to register with the Secretary 
prior to operating in a State and may, by regulation, 
require such multiple employer welfare arrangements’’ 
after ‘‘not group health plans’’. 
SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CON-
FIDENTIAL COMMUNICATIONS. 
Section 504 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1134) is amended by adding 
at the end the following: 
‘‘(d) The Secretary may promulgate a regulation that 
provides an evidentiary privilege for, and provides for the 
confidentiality of communications between or among, any 
of the following entities or their agents, consultants, or em-
ployees: 
‘‘(1) A State insurance department. 
‘‘(2) A State attorney general.
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‘‘(3) The National Association of Insurance Com-
missioners. 
‘‘(4) The Department of Labor. 
‘‘(5) The Department of the Treasury. 
‘‘(6) The Department of Justice. 
‘‘(7) The Department of Health and Human 
Services. 
‘‘(8) Any other Federal or State authority that 
the Secretary determines is appropriate for the pur-
poses of enforcing the provisions of this title. 
‘‘(e) The privilege established under subsection (d) 
shall apply to communications related to any investigation, 
audit, examination, or inquiry conducted or coordinated by 
any of the agencies. A communication that is privileged 
under subsection (d) shall not waive any privilege otherwise 
available to the communicating agency or to any person 
who provided the information that is communicated.’’. 
Subtitle H—Elder Justice Act 
SEC. 6701. SHORT TITLE OF SUBTITLE. 
This subtitle may be cited as the ‘‘Elder Justice Act 
of 2009’’. 
SEC. 6702. DEFINITIONS. 
Except as otherwise specifically provided, any term 
that is defined in section 2011 of the Social Security Act
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(as added by section 6703(a)) and is used in this subtitle 
has the meaning given such term by such section. 
SEC. 6703. ELDER JUSTICE. 
(a) ELDER JUSTICE.— 
(1) IN GENERAL.—Title XX of the Social Secu-
rity Act (42 U.S.C. 1397 et seq.) is amended— 
(A) in the heading, by inserting ‘‘AND 
ELDER 
JUSTICE’’ 
after 
‘‘SOCIAL 
SERVICES’’; 
(B) by inserting before section 2001 the fol-
lowing: 
‘‘Subtitle A—Block Grants to States 
for Social Services’’; 
and 
(C) by adding at the end the following: 
‘‘Subtitle B—Elder Justice 
‘‘SEC. 2011. DEFINITIONS. 
‘‘In this subtitle: 
‘‘(1) ABUSE.—The term ‘abuse’ means the know-
ing infliction of physical or psychological harm or the 
knowing deprivation of goods or services that are nec-
essary to meet essential needs or to avoid physical or 
psychological harm. 
‘‘(2) ADULT PROTECTIVE SERVICES.—The term 
‘adult protective services’ means such services pro-
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vided to adults as the Secretary may specify and in-
cludes services such as— 
‘‘(A) receiving reports of adult abuse, ne-
glect, or exploitation; 
‘‘(B) investigating the reports described in 
subparagraph (A); 
‘‘(C) case planning, monitoring, evaluation, 
and other case work and services; and 
‘‘(D) providing, arranging for, or facili-
tating the provision of medical, social service, 
economic, legal, housing, law enforcement, or 
other protective, emergency, or support services. 
‘‘(3) CAREGIVER.—The term ‘caregiver’ means 
an individual who has the responsibility for the care 
of an elder, either voluntarily, by contract, by receipt 
of payment for care, or as a result of the operation 
of law, and means a family member or other indi-
vidual who provides (on behalf of such individual or 
of a public or private agency, organization, or insti-
tution) compensated or uncompensated care to an 
elder who needs supportive services in any setting. 
‘‘(4) DIRECT
CARE.—The term ‘direct care’ 
means care by an employee or contractor who pro-
vides assistance or long-term care services to a recipi-
ent.
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‘‘(5) ELDER.—The term ‘elder’ means an indi-
vidual age 60 or older. 
‘‘(6) ELDER JUSTICE.—The term ‘elder justice’ 
means— 
‘‘(A) from a societal perspective, efforts to— 
‘‘(i) prevent, detect, treat, intervene in, 
and prosecute elder abuse, neglect, and ex-
ploitation; and 
‘‘(ii) protect elders with diminished ca-
pacity while maximizing their autonomy; 
and 
‘‘(B) from an individual perspective, the 
recognition of an elder’s rights, including the 
right to be free of abuse, neglect, and exploi-
tation. 
‘‘(7) ELIGIBLE ENTITY.—The term ‘eligible enti-
ty’ means a State or local government agency, Indian 
tribe or tribal organization, or any other public or 
private entity that is engaged in and has expertise in 
issues relating to elder justice or in a field necessary 
to promote elder justice efforts. 
‘‘(8) EXPLOITATION.—The term ‘exploitation’ 
means the fraudulent or otherwise illegal, unauthor-
ized, or improper act or process of an individual, in-
cluding a caregiver or fiduciary, that uses the re-
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sources of an elder for monetary or personal benefit, 
profit, or gain, or that results in depriving an elder 
of rightful access to, or use of, benefits, resources, be-
longings, or assets. 
‘‘(9) FIDUCIARY.—The term ‘fiduciary’— 
‘‘(A) means a person or entity with the 
legal responsibility— 
‘‘(i) to make decisions on behalf of and 
for the benefit of another person; and 
‘‘(ii) to act in good faith and with 
fairness; and 
‘‘(B) includes a trustee, a guardian, a con-
servator, an executor, an agent under a financial 
power of attorney or health care power of attor-
ney, or a representative payee. 
‘‘(10) GRANT.—The term ‘grant’ includes a con-
tract, cooperative agreement, or other mechanism for 
providing financial assistance. 
‘‘(11) GUARDIANSHIP.—The term ‘guardianship’ 
means— 
‘‘(A) the process by which a State court de-
termines that an adult individual lacks capacity 
to make decisions about self-care or property, 
and appoints another individual or entity
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known as a guardian, as a conservator, or by a 
similar term, as a surrogate decisionmaker; 
‘‘(B) the manner in which the court-ap-
pointed surrogate decisionmaker carries out du-
ties to the individual and the court; or 
‘‘(C) the manner in which the court exer-
cises oversight of the surrogate decisionmaker. 
‘‘(12) INDIAN TRIBE.— 
‘‘(A) IN GENERAL.—The term ‘Indian tribe’ 
has the meaning given such term in section 4 of 
the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450b). 
‘‘(B) 
INCLUSION
OF
PUEBLO
AND 
RANCHERIA.—The term ‘Indian tribe’ includes 
any Pueblo or Rancheria. 
‘‘(13) LAW ENFORCEMENT.—The term ‘law en-
forcement’ means the full range of potential respond-
ers to elder abuse, neglect, and exploitation includ-
ing— 
‘‘(A) police, sheriffs, detectives, public safety 
officers, and corrections personnel; 
‘‘(B) prosecutors; 
‘‘(C) medical examiners; 
‘‘(D) investigators; and 
‘‘(E) coroners.
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‘‘(14) LONG-TERM CARE.— 
‘‘(A) IN
GENERAL.—The term ‘long-term 
care’ means supportive and health services speci-
fied by the Secretary for individuals who need 
assistance because the individuals have a loss of 
capacity for self-care due to illness, disability, or 
vulnerability. 
‘‘(B) LOSS OF CAPACITY FOR SELF-CARE.— 
For purposes of subparagraph (A), the term ‘loss 
of capacity for self-care’ means an inability to 
engage in 1 or more activities of daily living, in-
cluding eating, dressing, bathing, management of 
one’s financial affairs, and other activities the 
Secretary determines appropriate. 
‘‘(15) LONG-TERM
CARE
FACILITY.—The term 
‘long-term care facility’ means a residential care pro-
vider that arranges for, or directly provides, long- 
term care. 
‘‘(16) NEGLECT.—The term ‘neglect’ means— 
‘‘(A) the failure of a caregiver or fiduciary 
to provide the goods or services that are nec-
essary to maintain the health or safety of an 
elder; or 
‘‘(B) self-neglect. 
‘‘(17) NURSING FACILITY.—
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‘‘(A) IN GENERAL.—The term ‘nursing fa-
cility’ has the meaning given such term under 
section 1919(a). 
‘‘(B) INCLUSION OF SKILLED NURSING FA-
CILITY.—The term ‘nursing facility’ includes a 
skilled nursing facility (as defined in section 
1819(a)). 
‘‘(18) SELF-NEGLECT.—The term ‘self-neglect’ 
means an adult’s inability, due to physical or mental 
impairment or diminished capacity, to perform essen-
tial self-care tasks including— 
‘‘(A) obtaining essential food, clothing, shel-
ter, and medical care; 
‘‘(B) obtaining goods and services necessary 
to maintain physical health, mental health, or 
general safety; or 
‘‘(C) managing one’s own financial affairs. 
‘‘(19) SERIOUS BODILY INJURY.— 
‘‘(A) IN GENERAL.—The term ‘serious bod-
ily injury’ means an injury— 
‘‘(i) involving extreme physical pain; 
‘‘(ii) involving substantial risk of 
death;
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‘‘(iii) involving protracted loss or im-
pairment of the function of a bodily mem-
ber, organ, or mental faculty; or 
‘‘(iv) requiring medical intervention 
such as surgery, hospitalization, or physical 
rehabilitation. 
‘‘(B) CRIMINAL
SEXUAL
ABUSE.—Serious 
bodily injury shall be considered to have oc-
curred if the conduct causing the injury is con-
duct described in section 2241 (relating to aggra-
vated sexual abuse) or 2242 (relating to sexual 
abuse) of title 18, United States Code, or any 
similar offense under State law. 
‘‘(20) SOCIAL.—The term ‘social’, when used 
with respect to a service, includes adult protective 
services. 
‘‘(21) STATE LEGAL ASSISTANCE DEVELOPER.— 
The term ‘State legal assistance developer’ means an 
individual described in section 731 of the Older 
Americans Act of 1965. 
‘‘(22) STATE LONG-TERM CARE OMBUDSMAN.— 
The term ‘State Long-Term Care Ombudsman’ means 
the State Long-Term Care Ombudsman described in 
section 712(a)(2) of the Older Americans Act of 1965.
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‘‘SEC. 2012. GENERAL PROVISIONS. 
‘‘(a) PROTECTION OF PRIVACY.—In pursuing activi-
ties under this subtitle, the Secretary shall ensure the pro-
tection of individual health privacy consistent with the reg-
ulations promulgated under section 264(c) of the Health In-
surance Portability and Accountability Act of 1996 and ap-
plicable State and local privacy regulations. 
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sub-
title shall be construed to interfere with or abridge an elder’s 
right to practice his or her religion through reliance on 
prayer alone for healing when this choice— 
‘‘(1) is contemporaneously expressed, either oral-
ly or in writing, with respect to a specific illness or 
injury which the elder has at the time of the decision 
by an elder who is competent at the time of the deci-
sion; 
‘‘(2) is previously set forth in a living will, 
health care proxy, or other advance directive docu-
ment that is validly executed and applied under State 
law; or 
‘‘(3) may be unambiguously deduced from the el-
der’s life history.
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‘‘PART I—NATIONAL COORDINATION OF ELDER 
JUSTICE ACTIVITIES AND RESEARCH 
‘‘Subpart A—Elder Justice Coordinating Council and 
Advisory Board on Elder Abuse, Neglect, and Ex-
ploitation 
‘‘SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Office of the Secretary an Elder Justice Coordinating 
Council (in this section referred to as the ‘Council’). 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN GENERAL.—The Council shall be com-
posed of the following members: 
‘‘(A) The Secretary (or the Secretary’s des-
ignee). 
‘‘(B) The Attorney General (or the Attorney 
General’s designee). 
‘‘(C) The head of each Federal department 
or agency or other governmental entity identified 
by the Chair referred to in subsection (d) as hav-
ing responsibilities, or administering programs, 
relating to elder abuse, neglect, and exploitation. 
‘‘(2) REQUIREMENT.—Each member of the Coun-
cil shall be an officer or employee of the Federal Gov-
ernment.
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‘‘(c) VACANCIES.—Any vacancy in the Council shall 
not affect its powers, but shall be filled in the same manner 
as the original appointment was made. 
‘‘(d) CHAIR.—The member described in subsection 
(b)(1)(A) shall be Chair of the Council. 
‘‘(e) MEETINGS.—The Council shall meet at least 2 
times per year, as determined by the Chair. 
‘‘(f) DUTIES.— 
‘‘(1) IN GENERAL.—The Council shall make rec-
ommendations to the Secretary for the coordination of 
activities of the Department of Health and Human 
Services, the Department of Justice, and other rel-
evant Federal, State, local, and private agencies and 
entities, relating to elder abuse, neglect, and exploi-
tation and other crimes against elders. 
‘‘(2) REPORT.—Not later than the date that is 2 
years after the date of enactment of the Elder Justice 
Act of 2009 and every 2 years thereafter, the Council 
shall submit to the Committee on Finance of the Sen-
ate and the Committee on Ways and Means and the 
Committee on Energy and Commerce of the House of 
Representatives a report that— 
‘‘(A) describes the activities and accomplish-
ments of, and challenges faced by— 
‘‘(i) the Council; and
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‘‘(ii) the entities represented on the 
Council; and 
‘‘(B) makes such recommendations for legis-
lation, model laws, or other action as the Council 
determines to be appropriate. 
‘‘(g) POWERS OF THE COUNCIL.— 
‘‘(1) INFORMATION FROM FEDERAL AGENCIES.— 
Subject to the requirements of section 2012(a), the 
Council may secure directly from any Federal depart-
ment or agency such information as the Council con-
siders necessary to carry out this section. Upon re-
quest of the Chair of the Council, the head of such de-
partment or agency shall furnish such information to 
the Council. 
‘‘(2) POSTAL SERVICES.—The Council may use 
the United States mails in the same manner and 
under the same conditions as other departments and 
agencies of the Federal Government. 
‘‘(h) TRAVEL EXPENSES.—The members of the Council 
shall not receive compensation for the performance of serv-
ices for the Council. The members shall be allowed travel 
expenses, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from 
their homes or regular places of business in the performance
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of services for the Council. Notwithstanding section 1342 
of title 31, United States Code, the Secretary may accept 
the voluntary and uncompensated services of the members 
of the Council. 
‘‘(i) DETAIL
OF GOVERNMENT EMPLOYEES.—Any 
Federal Government employee may be detailed to the Coun-
cil without reimbursement, and such detail shall be without 
interruption or loss of civil service status or privilege. 
‘‘(j) STATUS AS PERMANENT COUNCIL.—Section 14 of 
the Federal Advisory Committee Act (5 U.S.C. App.) shall 
not apply to the Council. 
‘‘(k) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
‘‘SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, 
AND EXPLOITATION. 
‘‘(a) ESTABLISHMENT.—There is established a board 
to be known as the ‘Advisory Board on Elder Abuse, Neglect, 
and Exploitation’ (in this section referred to as the ‘Advi-
sory Board’) to create short- and long-term multidisci-
plinary strategic plans for the development of the field of 
elder justice and to make recommendations to the Elder 
Justice Coordinating Council established under section 
2021.
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‘‘(b) COMPOSITION.—The Advisory Board shall be 
composed of 27 members appointed by the Secretary from 
among members of the general public who are individuals 
with experience and expertise in elder abuse, neglect, and 
exploitation prevention, detection, treatment, intervention, 
or prosecution. 
‘‘(c) SOLICITATION OF NOMINATIONS.—The Secretary 
shall publish a notice in the Federal Register soliciting 
nominations for the appointment of members of the Advi-
sory Board under subsection (b). 
‘‘(d) TERMS.— 
‘‘(1) IN GENERAL.—Each member of the Advi-
sory Board shall be appointed for a term of 3 years, 
except that, of the members first appointed— 
‘‘(A) 9 shall be appointed for a term of 3 
years; 
‘‘(B) 9 shall be appointed for a term of 2 
years; and 
‘‘(C) 9 shall be appointed for a term of 1 
year. 
‘‘(2) VACANCIES.— 
‘‘(A) IN
GENERAL.—Any vacancy on the 
Advisory Board shall not affect its powers, but 
shall be filled in the same manner as the original 
appointment was made.
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‘‘(B) FILLING UNEXPIRED TERM.—An indi-
vidual chosen to fill a vacancy shall be ap-
pointed for the unexpired term of the member re-
placed. 
‘‘(3) EXPIRATION OF TERMS.—The term of any 
member shall not expire before the date on which the 
member’s successor takes office. 
‘‘(e) ELECTION OF OFFICERS.—The Advisory Board 
shall elect a Chair and Vice Chair from among its members. 
The Advisory Board shall elect its initial Chair and Vice 
Chair at its initial meeting. 
‘‘(f) DUTIES.— 
‘‘(1) ENHANCE COMMUNICATION ON PROMOTING 
QUALITY OF, AND PREVENTING ABUSE, NEGLECT, AND 
EXPLOITATION IN, LONG-TERM CARE.—The Advisory 
Board shall develop collaborative and innovative ap-
proaches to improve the quality of, including pre-
venting abuse, neglect, and exploitation in, long-term 
care. 
‘‘(2) COLLABORATIVE
EFFORTS
TO
DEVELOP 
CONSENSUS AROUND THE MANAGEMENT OF CERTAIN 
QUALITY-RELATED FACTORS.— 
‘‘(A) IN
GENERAL.—The Advisory Board 
shall establish multidisciplinary panels to ad-
dress, and develop consensus on, subjects relating
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to improving the quality of long-term care. At 
least 1 such panel shall address, and develop con-
sensus on, methods for managing resident-to-resi-
dent abuse in long-term care. 
‘‘(B) ACTIVITIES CONDUCTED.—The multi-
disciplinary panels established under subpara-
graph (A) shall examine relevant research and 
data, identify best practices with respect to the 
subject of the panel, determine the best way to 
carry out those best practices in a practical and 
feasible manner, and determine an effective man-
ner of distributing information on such subject. 
‘‘(3) REPORT.—Not later than the date that is 
18 months after the date of enactment of the Elder 
Justice Act of 2009, and annually thereafter, the Ad-
visory Board shall prepare and submit to the Elder 
Justice Coordinating Council, the Committee on Fi-
nance of the Senate, and the Committee on Ways and 
Means and the Committee on Energy and Commerce 
of the House of Representatives a report containing— 
‘‘(A) information on the status of Federal, 
State, and local public and private elder justice 
activities; 
‘‘(B) 
recommendations 
(including 
rec-
ommended priorities) regarding—
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‘‘(E) recommendations for a multidisci-
plinary strategic plan to guide the effective and 
efficient development of the field of elder justice. 
‘‘(g) POWERS OF THE ADVISORY BOARD.— 
‘‘(1) INFORMATION FROM FEDERAL AGENCIES.— 
Subject to the requirements of section 2012(a), the Ad-
visory Board may secure directly from any Federal 
department or agency such information as the Advi-
sory Board considers necessary to carry out this sec-
tion. Upon request of the Chair of the Advisory 
Board, the head of such department or agency shall 
furnish such information to the Advisory Board. 
‘‘(2) SHARING OF DATA AND REPORTS.—The Ad-
visory Board may request from any entity pursuing 
elder justice activities under the Elder Justice Act of 
2009 or an amendment made by that Act, any data, 
reports, or recommendations generated in connection 
with such activities. 
‘‘(3) POSTAL
SERVICES.—The Advisory 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. 
‘‘(h) TRAVEL EXPENSES.—The members of the Advi-
sory Board shall not receive compensation for the perform-
ance of services for the Advisory Board. The members shall
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be allowed travel expenses for up to 4 meetings per year, 
including per diem in lieu of subsistence, at rates author-
ized for employees of agencies under subchapter 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 Advisory Board. Notwithstanding section 
1342 of title 31, United States Code, the Secretary may ac-
cept the voluntary and uncompensated services of the mem-
bers of the Advisory Board. 
‘‘(i) DETAIL
OF GOVERNMENT EMPLOYEES.—Any 
Federal Government employee may be detailed to the Advi-
sory Board without reimbursement, and such detail shall 
be without interruption or loss of civil service status or 
privilege. 
‘‘(j) STATUS AS PERMANENT ADVISORY COMMITTEE.— 
Section 14 of the Federal Advisory Committee Act (5 U.S.C. 
App.) shall not apply to the advisory board. 
‘‘(k) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
‘‘SEC. 2023. RESEARCH PROTECTIONS. 
‘‘(a) GUIDELINES.—The Secretary shall promulgate 
guidelines to assist researchers working in the area of elder 
abuse, neglect, and exploitation, with issues relating to 
human subject protections.
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‘‘(b) DEFINITION
OF LEGALLY AUTHORIZED REP-
RESENTATIVE FOR APPLICATION OF REGULATIONS.—For 
purposes of the application of subpart A of part 46 of title 
45, Code of Federal Regulations, to research conducted 
under this subpart, the term ‘legally authorized representa-
tive’ means, unless otherwise provided by law, the indi-
vidual or judicial or other body authorized under the appli-
cable law to consent to medical treatment on behalf of an-
other person. 
‘‘SEC. 2024. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this subpart— 
‘‘(1) for fiscal year 2011, $6,500,000; and 
‘‘(2) for each of fiscal years 2012 through 2014, 
$7,000,000. 
‘‘Subpart B—Elder Abuse, Neglect, and Exploitation 
Forensic Centers 
‘‘SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER 
ABUSE, NEGLECT, AND EXPLOITATION FO-
RENSIC CENTERS. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the Attorney General, shall make grants to eligible en-
tities to establish and operate stationary and mobile foren-
sic centers, to develop forensic expertise regarding, and pro-
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vide services relating to, elder abuse, neglect, and exploi-
tation. 
‘‘(b) STATIONARY
FORENSIC
CENTERS.—The Sec-
retary shall make 4 of the grants described in subsection 
(a) to institutions of higher education with demonstrated 
expertise in forensics or commitment to preventing or treat-
ing elder abuse, neglect, or exploitation, to establish and 
operate stationary forensic centers. 
‘‘(c) MOBILE CENTERS.—The Secretary shall make 6 
of the grants described in subsection (a) to appropriate enti-
ties to establish and operate mobile forensic centers. 
‘‘(d) AUTHORIZED ACTIVITIES.— 
‘‘(1) DEVELOPMENT OF FORENSIC MARKERS AND 
METHODOLOGIES.—An eligible entity that receives a 
grant under this section shall use funds made avail-
able through the grant to assist in determining wheth-
er abuse, neglect, or exploitation occurred and whether 
a crime was committed and to conduct research to de-
scribe and disseminate information on— 
‘‘(A) forensic markers that indicate a case 
in which elder abuse, neglect, or exploitation 
may have occurred; and 
‘‘(B) methodologies for determining, in such 
a case, when and how health care, emergency 
service, social and protective services, and legal
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service providers should intervene and when the 
providers should report the case to law enforce-
ment authorities. 
‘‘(2) DEVELOPMENT OF FORENSIC EXPERTISE.— 
An eligible entity that receives a grant under this sec-
tion shall use funds made available through the grant 
to develop forensic expertise regarding elder abuse, ne-
glect, and exploitation in order to provide medical 
and forensic evaluation, therapeutic intervention, vic-
tim support and advocacy, case review, and case 
tracking. 
‘‘(3) COLLECTION OF EVIDENCE.—The Secretary, 
in coordination with the Attorney General, shall use 
data made available by grant recipients under this 
section to develop the capacity of geriatric health care 
professionals and law enforcement to collect forensic 
evidence, including collecting forensic evidence relat-
ing to a potential determination of elder abuse, ne-
glect, or exploitation. 
‘‘(e) APPLICATION.—To be eligible to receive a grant 
under this section, an entity shall submit an application 
to the Secretary at such time, in such manner, and con-
taining such information as the Secretary may require. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There are 
authorized to be appropriated to carry out this section—
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‘‘(1) for fiscal year 2011, $4,000,000; 
‘‘(2) for fiscal year 2012, $6,000,000; and 
‘‘(3) for each of fiscal years 2013 and 2014, 
$8,000,000. 
‘‘PART II—PROGRAMS TO PROMOTE ELDER 
JUSTICE 
‘‘SEC. 2041. ENHANCEMENT OF LONG-TERM CARE. 
‘‘(a) GRANTS AND INCENTIVES FOR LONG-TERM CARE 
STAFFING.— 
‘‘(1) IN
GENERAL.—The Secretary shall carry 
out activities, including activities described in para-
graphs (2) and (3), to provide incentives for individ-
uals to train for, seek, and maintain employment 
providing direct care in long-term care. 
‘‘(2) SPECIFIC PROGRAMS TO ENHANCE TRAIN-
ING, RECRUITMENT, AND RETENTION OF STAFF.— 
‘‘(A) COORDINATION WITH SECRETARY OF 
LABOR TO RECRUIT AND TRAIN LONG-TERM CARE 
STAFF.—The Secretary shall coordinate activities 
under this subsection with the Secretary of Labor 
in order to provide incentives for individuals to 
train for and seek employment providing direct 
care in long-term care.
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‘‘(B) CAREER LADDERS AND WAGE OR BEN-
EFIT
INCREASES
TO
INCREASE
STAFFING
IN 
LONG-TERM CARE.— 
‘‘(i) IN GENERAL.—The Secretary shall 
make grants to eligible entities to carry out 
programs through which the entities— 
‘‘(I) offer, to employees who pro-
vide direct care to residents of an eligi-
ble entity or individuals receiving com-
munity-based long-term care from an 
eligible entity, continuing training and 
varying levels of certification, based on 
observed clinical care practices and the 
amount of time the employees spend 
providing direct care; and 
‘‘(II) provide, or make arrange-
ments to provide, bonuses or other in-
creased compensation or benefits to em-
ployees who achieve certification under 
such a program. 
‘‘(ii) APPLICATION.—To be eligible to 
receive a grant under this subparagraph, an 
eligible entity shall submit an application 
to the Secretary at such time, in such man-
ner, and containing such information as the
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Secretary may require (which may include 
evidence of consultation with the State in 
which the eligible entity is located with re-
spect to carrying out activities funded 
under the grant). 
‘‘(iii) AUTHORITY TO LIMIT NUMBER 
OF APPLICANTS.—Nothing in this subpara-
graph shall be construed as prohibiting the 
Secretary from limiting the number of ap-
plicants for a grant under this subpara-
graph. 
‘‘(3) SPECIFIC PROGRAMS TO IMPROVE MANAGE-
MENT PRACTICES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make grants to eligible entities to enable the enti-
ties to provide training and technical assistance. 
‘‘(B) AUTHORIZED ACTIVITIES.—An eligible 
entity that receives a grant under subparagraph 
(A) shall use funds made available through the 
grant to provide training and technical assist-
ance regarding management practices using 
methods that are demonstrated to promote reten-
tion of individuals who provide direct care, such 
as—
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‘‘(i) the establishment of standard 
human resource policies that reward high 
performance, including policies that provide 
for improved wages and benefits on the 
basis of job reviews; 
‘‘(ii) the establishment of motivational 
and thoughtful work organization practices; 
‘‘(iii) the creation of a workplace cul-
ture that respects and values caregivers and 
their needs; 
‘‘(iv) the promotion of a workplace cul-
ture that respects the rights of residents of 
an eligible entity or individuals receiving 
community-based long-term care from an el-
igible entity and results in improved care 
for the residents or the individuals; and 
‘‘(v) the establishment of other pro-
grams that promote the provision of high 
quality care, such as a continuing edu-
cation program that provides additional 
hours of training, including on-the-job 
training, for employees who are certified 
nurse aides. 
‘‘(C) APPLICATION.—To be eligible to re-
ceive a grant under this paragraph, an eligible
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entity shall submit an application to the Sec-
retary at such time, in such manner, and con-
taining such information as the Secretary may 
require (which may include evidence of consulta-
tion with the State in which the eligible entity 
is located with respect to carrying out activities 
funded under the grant). 
‘‘(D) AUTHORITY TO LIMIT NUMBER OF AP-
PLICANTS.—Nothing in this paragraph shall be 
construed as prohibiting the Secretary from lim-
iting the number of applicants for a grant under 
this paragraph. 
‘‘(4) ACCOUNTABILITY
MEASURES.—The Sec-
retary shall develop accountability measures to ensure 
that the activities conducted using funds made avail-
able under this subsection benefit individuals who 
provide direct care and increase the stability of the 
long-term care workforce. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) 
COMMUNITY-BASED
LONG-TERM 
CARE.—The term ‘community-based long-term 
care’ has the meaning given such term by the 
Secretary. 
‘‘(B) ELIGIBLE ENTITY.—The term ‘eligible 
entity’ means the following:
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‘‘(i) A long-term care facility. 
‘‘(ii) A community-based long-term 
care entity (as defined by the Secretary). 
‘‘(b) CERTIFIED EHR TECHNOLOGY GRANT PRO-
GRAM.— 
‘‘(1) GRANTS
AUTHORIZED.—The Secretary is 
authorized to make grants to long-term care facilities 
for the purpose of assisting such entities in offsetting 
the costs related to purchasing, leasing, developing, 
and implementing certified EHR technology (as de-
fined in section 1848(o)(4)) designed to improve pa-
tient safety and reduce adverse events and health care 
complications resulting from medication errors. 
‘‘(2) USE OF GRANT FUNDS.—Funds provided 
under grants under this subsection may be used for 
any of the following: 
‘‘(A) Purchasing, leasing, and installing 
computer software and hardware, including 
handheld computer technologies. 
‘‘(B) Making improvements to existing com-
puter software and hardware. 
‘‘(C) Making upgrades and other improve-
ments to existing computer software and hard-
ware to enable e-prescribing.
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‘‘(D) Providing education and training to 
eligible long-term care facility staff on the use of 
such technology to implement the electronic 
transmission of prescription and patient infor-
mation. 
‘‘(3) APPLICATION.— 
‘‘(A) IN GENERAL.—To be eligible to receive 
a grant under this subsection, a long-term care 
facility shall submit an application to the Sec-
retary at such time, in such manner, and con-
taining such information as the Secretary may 
require (which may include evidence of consulta-
tion with the State in which the long-term care 
facility is located with respect to carrying out 
activities funded under the grant). 
‘‘(B) AUTHORITY TO LIMIT NUMBER OF AP-
PLICANTS.—Nothing in this subsection shall be 
construed as prohibiting the Secretary from lim-
iting the number of applicants for a grant under 
this subsection. 
‘‘(4) PARTICIPATION
IN
STATE
HEALTH
EX-
CHANGES.—A long-term care facility that receives a 
grant under this subsection shall, where available, 
participate in activities conducted by a State or a 
qualified State-designated entity (as defined in sec-
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tion 3013(f) of the Public Health Service Act) under 
a grant under section 3013 of the Public Health Serv-
ice Act to coordinate care and for other purposes de-
termined appropriate by the Secretary. 
‘‘(5) ACCOUNTABILITY
MEASURES.—The Sec-
retary shall develop accountability measures to ensure 
that the activities conducted using funds made avail-
able under this subsection help improve patient safety 
and reduce adverse events and health care complica-
tions resulting from medication errors. 
‘‘(c) ADOPTION OF STANDARDS FOR TRANSACTIONS IN-
VOLVING CLINICAL DATA BY LONG-TERM CARE FACILI-
TIES.— 
‘‘(1) STANDARDS AND COMPATIBILITY.—The Sec-
retary shall adopt electronic standards for the ex-
change of clinical data by long-term care facilities, 
including, where available, standards for messaging 
and nomenclature. Standards adopted by the Sec-
retary under the preceding sentence shall be compat-
ible with standards established under part C of title 
XI, 
standards 
established 
under 
subsections 
(b)(2)(B)(i) and (e)(4) of section 1860D–4, standards 
adopted under section 3004 of the Public Health Serv-
ice Act, and general health information technology 
standards.
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‘‘(2) ELECTRONIC SUBMISSION OF DATA TO THE 
SECRETARY.— 
‘‘(A) IN GENERAL.—Not later than 10 years 
after the date of enactment of the Elder Justice 
Act of 2009, the Secretary shall have procedures 
in place to accept the optional electronic submis-
sion of clinical data by long-term care facilities 
pursuant to the standards adopted under para-
graph (1). 
‘‘(B) RULE OF CONSTRUCTION.—Nothing in 
this subsection shall be construed to require a 
long-term care facility to submit clinical data 
electronically to the Secretary. 
‘‘(3) REGULATIONS.—The Secretary shall pro-
mulgate regulations to carry out this subsection. Such 
regulations shall require a State, as a condition of the 
receipt of funds under this part, to conduct such data 
collection and reporting as the Secretary determines 
are necessary to satisfy the requirements of this sub-
section. 
‘‘(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this sec-
tion— 
‘‘(1) for fiscal year 2011, $20,000,000; 
‘‘(2) for fiscal year 2012, $17,500,000; and
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‘‘(3) for each of fiscal years 2013 and 2014, 
$15,000,000. 
‘‘SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND 
GRANT PROGRAMS. 
‘‘(a) SECRETARIAL RESPONSIBILITIES.— 
‘‘(1) IN GENERAL.—The Secretary shall ensure 
that the Department of Health and Human Serv-
ices— 
‘‘(A) provides funding authorized by this 
part to State and local adult protective services 
offices that investigate reports of the abuse, ne-
glect, and exploitation of elders; 
‘‘(B) collects and disseminates data annu-
ally relating to the abuse, exploitation, and ne-
glect of elders in coordination with the Depart-
ment of Justice; 
‘‘(C) develops and disseminates information 
on best practices regarding, and provides train-
ing on, carrying out adult protective services; 
‘‘(D) conducts research related to the provi-
sion of adult protective services; and 
‘‘(E) provides technical assistance to States 
and other entities that provide or fund the provi-
sion of adult protective services, including
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through grants made under subsections (b) and 
(c). 
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection, $3,000,000 for fiscal year 2011 and 
$4,000,000 for each of fiscal years 2012 through 2014. 
‘‘(b) GRANTS TO ENHANCE THE PROVISION OF ADULT 
PROTECTIVE SERVICES.— 
‘‘(1) ESTABLISHMENT.—There is established an 
adult protective services grant program under which 
the Secretary shall annually award grants to States 
in the amounts calculated under paragraph (2) for 
the purposes of enhancing adult protective services 
provided by States and local units of government. 
‘‘(2) AMOUNT OF PAYMENT.— 
‘‘(A) IN
GENERAL.—Subject to the avail-
ability of appropriations and subparagraphs (B) 
and (C), the amount paid to a State for a fiscal 
year under the program under this subsection 
shall equal the amount appropriated for that 
year to carry out this subsection multiplied by 
the percentage of the total number of elders who 
reside in the United States who reside in that 
State.
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‘‘(B) 
GUARANTEED
MINIMUM
PAYMENT 
AMOUNT.— 
‘‘(i) 50 STATES.—Subject to clause (ii), 
if the amount determined under subpara-
graph (A) for a State for a fiscal year is 
less than 0.75 percent of the amount appro-
priated for such year, the Secretary shall 
increase such determined amount so that the 
total amount paid under this subsection to 
the State for the year is equal to 0.75 per-
cent of the amount so appropriated. 
‘‘(ii) TERRITORIES.—In the case of a 
State other than 1 of the 50 States, clause 
(i) shall be applied as if each reference to 
‘0.75’ were a reference to ‘0.1’. 
‘‘(C) PRO
RATA
REDUCTIONS.—The Sec-
retary shall make such pro rata reductions to the 
amounts described in subparagraph (A) as are 
necessary to comply with the requirements of 
subparagraph (B). 
‘‘(3) AUTHORIZED ACTIVITIES.— 
‘‘(A) 
ADULT
PROTECTIVE
SERVICES.— 
Funds made available pursuant to this sub-
section may only be used by States and local 
units of government to provide adult protective
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services and may not be used for any other pur-
pose. 
‘‘(B) USE BY AGENCY.—Each State receiv-
ing funds pursuant to this subsection shall pro-
vide such funds to the agency or unit of State 
government having legal responsibility for pro-
viding adult protective services within the State. 
‘‘(C) SUPPLEMENT
NOT
SUPPLANT.—Each 
State or local unit of government shall use funds 
made available pursuant to this subsection to 
supplement and not supplant other Federal, 
State, and local public funds expended to provide 
adult protective services in the State. 
‘‘(4) STATE
REPORTS.—Each State receiving 
funds under this subsection shall submit to the Sec-
retary, at such time and in such manner as the Sec-
retary may require, a report on the number of elders 
served by the grants awarded under this subsection. 
‘‘(5) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection, $100,000,000 for each of fiscal years 
2011 through 2014. 
‘‘(c) STATE DEMONSTRATION PROGRAMS.— 
‘‘(1) 
ESTABLISHMENT.—The 
Secretary 
shall 
award grants to States for the purposes of conducting
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containing such information as the Secretary may re-
quire on the results of the demonstration program 
conducted by the State using funds made available 
under this subsection. 
‘‘(5) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection, $25,000,000 for each of fiscal years 
2011 through 2014. 
‘‘SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM 
GRANTS AND TRAINING. 
‘‘(a) GRANTS TO SUPPORT THE LONG-TERM CARE 
OMBUDSMAN PROGRAM.— 
‘‘(1) IN
GENERAL.—The Secretary shall make 
grants to eligible entities with relevant expertise and 
experience in abuse and neglect in long-term care fa-
cilities or long-term care ombudsman programs and 
responsibilities, for the purpose of— 
‘‘(A) improving the capacity of State long- 
term care ombudsman programs to respond to 
and resolve complaints about abuse and neglect; 
‘‘(B) conducting pilot programs with State 
long-term care ombudsman offices or local om-
budsman entities; and 
‘‘(C) providing support for such State long- 
term care ombudsman programs and such pilot
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programs (such as through the establishment of 
a national long-term care ombudsman resource 
center). 
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection— 
‘‘(A) for fiscal year 2011, $5,000,000; 
‘‘(B) for fiscal year 2012, $7,500,000; and 
‘‘(C) for each of fiscal years 2013 and 2014, 
$10,000,000. 
‘‘(b) OMBUDSMAN TRAINING PROGRAMS.— 
‘‘(1) IN GENERAL.—The Secretary shall establish 
programs to provide and improve ombudsman train-
ing with respect to elder abuse, neglect, and exploi-
tation for national organizations and State long-term 
care ombudsman programs. 
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection, for each of fiscal years 2011 through 
2014, $10,000,000. 
‘‘SEC. 2044. PROVISION OF INFORMATION REGARDING, AND 
EVALUATIONS 
OF, 
ELDER 
JUSTICE 
PRO-
GRAMS. 
‘‘(a) PROVISION OF INFORMATION.—To be eligible to 
receive a grant under this part, an applicant shall agree—
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‘‘(1) except as provided in paragraph (2), to pro-
vide the eligible entity conducting an evaluation 
under subsection (b) of the activities funded through 
the grant with such information as the eligible entity 
may require in order to conduct such evaluation; or 
‘‘(2) in the case of an applicant for a grant 
under section 2041(b), to provide the Secretary with 
such information as the Secretary may require to 
conduct an evaluation or audit under subsection (c). 
‘‘(b) USE OF ELIGIBLE ENTITIES TO CONDUCT EVAL-
UATIONS.— 
‘‘(1) EVALUATIONS REQUIRED.—Except as pro-
vided in paragraph (2), the Secretary shall— 
‘‘(A) reserve a portion (not less than 2 per-
cent) of the funds appropriated with respect to 
each program carried out under this part; and 
‘‘(B) use the funds reserved under subpara-
graph (A) to provide assistance to eligible enti-
ties to conduct evaluations of the activities fund-
ed under each program carried out under this 
part. 
‘‘(2) CERTIFIED EHR TECHNOLOGY GRANT PRO-
GRAM NOT INCLUDED.—The provisions of this sub-
section shall not apply to the certified EHR tech-
nology grant program under section 2041(b).
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‘‘(3) AUTHORIZED ACTIVITIES.—A recipient of 
assistance described in paragraph (1)(B) shall use the 
funds made available through the assistance to con-
duct a validated evaluation of the effectiveness of the 
activities funded under a program carried out under 
this part. 
‘‘(4) APPLICATIONS.—To be eligible to receive as-
sistance under paragraph (1)(B), an entity shall sub-
mit an application to the Secretary at such time, in 
such manner, and containing such information as the 
Secretary may require, including a proposal for the 
evaluation. 
‘‘(5) REPORTS.—Not later than a date specified 
by the Secretary, an eligible entity receiving assist-
ance under paragraph (1)(B) shall submit to the Sec-
retary, 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 a report containing the results of the evalua-
tion conducted using such assistance together with 
such recommendations as the entity determines to be 
appropriate. 
‘‘(c) EVALUATIONS AND AUDITS OF CERTIFIED EHR 
TECHNOLOGY GRANT PROGRAM BY THE SECRETARY.—
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‘‘(1) EVALUATIONS.—The Secretary shall con-
duct an evaluation of the activities funded under the 
certified EHR technology grant program under sec-
tion 2041(b). Such evaluation shall include an eval-
uation of whether the funding provided under the 
grant is expended only for the purposes for which it 
is made. 
‘‘(2) AUDITS.—The Secretary shall conduct ap-
propriate audits of grants made under section 
2041(b). 
‘‘SEC. 2045. REPORT. 
‘‘Not later than October 1, 2014, the Secretary shall 
submit to the Elder Justice Coordinating Council estab-
lished under section 2021, 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 a report— 
‘‘(1) compiling, summarizing, and analyzing the 
information contained in the State reports submitted 
under subsections (b)(4) and (c)(4) of section 2042; 
and 
‘‘(2) containing such recommendations for legis-
lative or administrative action as the Secretary deter-
mines to be appropriate.
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‘‘SEC. 2046. RULE OF CONSTRUCTION. 
‘‘Nothing in this subtitle shall be construed as— 
‘‘(1) limiting any cause of action or other relief 
related to obligations under this subtitle that is avail-
able under the law of any State, or political subdivi-
sion thereof; or 
‘‘(2) creating a private cause of action for a vio-
lation of this subtitle.’’. 
(2) OPTION FOR STATE PLAN UNDER PROGRAM 
FOR
TEMPORARY
ASSISTANCE
FOR
NEEDY
FAMI-
LIES.— 
(A) IN GENERAL.—Section 402(a)(1)(B) of 
the Social Security Act (42 U.S.C. 602(a)(1)(B)) 
is amended by adding at the end the following 
new clause: 
‘‘(v) The document shall indicate 
whether the State intends to assist individ-
uals to train for, seek, and maintain em-
ployment— 
‘‘(I) providing direct care in a 
long-term care facility (as such terms 
are defined under section 2011); or 
‘‘(II) in other occupations related 
to elder care determined appropriate 
by the State for which the State identi-
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fies an unmet need for service per-
sonnel, 
and, if so, shall include an overview of such 
assistance.’’. 
(B) EFFECTIVE
DATE.—The amendment 
made by subparagraph (A) shall take effect on 
January 1, 2011. 
(b) PROTECTING RESIDENTS OF LONG-TERM CARE 
FACILITIES.— 
(1) NATIONAL
TRAINING
INSTITUTE
FOR
SUR-
VEYORS.— 
(A) IN GENERAL.—The Secretary of Health 
and Human Services shall enter into a contract 
with an entity for the purpose of establishing 
and operating a National Training Institute for 
Federal and State surveyors. Such Institute shall 
provide and improve the training of surveyors 
with respect to investigating allegations of abuse, 
neglect, and misappropriation of property in 
programs and long-term care facilities that re-
ceive payments under title XVIII or XIX of the 
Social Security Act. 
(B) ACTIVITIES CARRIED OUT BY THE IN-
STITUTE.—The contract entered into under sub-
paragraph (A) shall require the Institute estab-
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lished and operated under such contract to carry 
out the following activities: 
(i) Assess the extent to which State 
agencies use specialized surveyors for the in-
vestigation of reported allegations of abuse, 
neglect, and misappropriation of property 
in such programs and long-term care facili-
ties. 
(ii) Evaluate how the competencies of 
surveyors may be improved to more effec-
tively investigate reported allegations of 
such abuse, neglect, and misappropriation 
of property, and provide feedback to Federal 
and State agencies on the evaluations con-
ducted. 
(iii) Provide a national program of 
training, tools, and technical assistance to 
Federal and State surveyors on inves-
tigating reports of such abuse, neglect, and 
misappropriation of property. 
(iv) Develop and disseminate informa-
tion on best practices for the investigation 
of such abuse, neglect, and misappropria-
tion of property.
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(v) Assess the performance of State 
complaint intake systems, in order to ensure 
that the intake of complaints occurs 24 
hours per day, 7 days a week (including 
holidays). 
(vi) To the extent approved by the Sec-
retary of Health and Human Services, pro-
vide a national 24 hours per day, 7 days a 
week (including holidays), back-up system 
to State complaint intake systems in order 
to ensure optimum national responsiveness 
to complaints of such abuse, neglect, and 
misappropriation of property. 
(vii) Analyze and report annually on 
the following: 
(I) The total number and sources 
of complaints of such abuse, neglect, 
and misappropriation of property. 
(II) The extent to which such com-
plaints are referred to law enforcement 
agencies. 
(III) General results of Federal 
and State investigations of such com-
plaints.
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(viii) Conduct a national study of the 
cost to State agencies of conducting com-
plaint investigations of skilled nursing fa-
cilities and nursing facilities under sections 
1819 and 1919, respectively, of the Social 
Security Act (42 U.S.C. 1395i–3; 1396r), 
and making recommendations to the Sec-
retary of Health and Human Services with 
respect to options to increase the efficiency 
and cost-effectiveness of such investigations. 
(C) AUTHORIZATION.—There are authorized 
to be appropriated to carry out this paragraph, 
for the period of fiscal years 2011 through 2014, 
$12,000,000. 
(2) GRANTS TO STATE SURVEY AGENCIES.— 
(A) IN GENERAL.—The Secretary of Health 
and Human Services shall make grants to State 
agencies that perform surveys of skilled nursing 
facilities or nursing facilities under sections 
1819 or 1919, respectively, of the Social Security 
Act (42 U.S.C. 1395i–3; 1395r). 
(B) USE
OF
FUNDS.—A grant awarded 
under subparagraph (A) shall be used for the 
purpose of designing and implementing com-
plaint investigations systems that—
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(i) promptly prioritize complaints in 
order to ensure a rapid response to the most 
serious and urgent complaints; 
(ii) respond to complaints with opti-
mum effectiveness and timeliness; and 
(iii) optimize the collaboration between 
local authorities, consumers, and providers, 
including— 
(I) such State agency; 
(II) the State Long-Term Care 
Ombudsman; 
(III) local law enforcement agen-
cies; 
(IV) advocacy and consumer orga-
nizations; 
(V) State aging units; 
(VI) Area Agencies on Aging; and 
(VII) other appropriate entities. 
(C) AUTHORIZATION.—There are authorized 
to be appropriated to carry out this paragraph, 
for each of fiscal years 2011 through 2014, 
$5,000,000. 
(3) REPORTING OF CRIMES IN FEDERALLY FUND-
ED LONG-TERM CARE FACILITIES.—Part A of title XI 
of the Social Security Act (42 U.S.C. 1301 et seq.),
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as amended by section 6005, is amended by inserting 
after section 1150A the following new section: 
‘‘REPORTING TO LAW ENFORCEMENT OF CRIMES OCCUR-
RING IN FEDERALLY FUNDED LONG-TERM CARE FA-
CILITIES 
‘‘SEC. 1150B. (a) DETERMINATION
AND NOTIFICA-
TION.— 
‘‘(1) DETERMINATION.—The owner or operator of 
each long-term care facility that receives Federal 
funds under this Act shall annually determine wheth-
er the facility received at least $10,000 in such Fed-
eral funds during the preceding year. 
‘‘(2) NOTIFICATION.—If the owner or operator 
determines under paragraph (1) that the facility re-
ceived at least $10,000 in such Federal funds during 
the preceding year, such owner or operator shall an-
nually notify each covered individual (as defined in 
paragraph (3)) of that individual’s obligation to com-
ply with the reporting requirements described in sub-
section (b). 
‘‘(3) COVERED
INDIVIDUAL
DEFINED.—In this 
section, the term ‘covered individual’ means each in-
dividual who is an owner, operator, employee, man-
ager, agent, or contractor of a long-term care facility 
that is the subject of a determination described in 
paragraph (1).
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‘‘(b) REPORTING REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—Each covered individual 
shall report to the Secretary and 1 or more law en-
forcement entities for the political subdivision in 
which the facility is located any reasonable suspicion 
of a crime (as defined by the law of the applicable po-
litical subdivision) against any individual who is a 
resident of, or is receiving care from, the facility. 
‘‘(2) TIMING.—If the events that cause the sus-
picion— 
‘‘(A) result in serious bodily injury, the in-
dividual shall report the suspicion immediately, 
but not later than 2 hours after forming the sus-
picion; and 
‘‘(B) do not result in serious bodily injury, 
the individual shall report the suspicion not 
later than 24 hours after forming the suspicion. 
‘‘(c) PENALTIES.— 
‘‘(1) IN GENERAL.—If a covered individual vio-
lates subsection (b)— 
‘‘(A) the covered individual shall be subject 
to a civil money penalty of not more than 
$200,000; and 
‘‘(B) the Secretary may make a determina-
tion in the same proceeding to exclude the cov-
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with underserved populations in determining 
any penalty to be imposed under this subsection. 
‘‘(B) 
UNDERSERVED
POPULATION
DE-
FINED.—In this paragraph, the term ‘under-
served population’ means the population of an 
area designated by the Secretary as an area with 
a shortage of elder justice programs or a popu-
lation group designated by the Secretary as hav-
ing a shortage of such programs. Such areas or 
groups designated by the Secretary may in-
clude— 
‘‘(i) areas or groups that are geo-
graphically isolated (such as isolated in a 
rural area); 
‘‘(ii) racial and ethnic minority popu-
lations; and 
‘‘(iii) populations underserved because 
of special needs (such as language barriers, 
disabilities, alien status, or age). 
‘‘(d) ADDITIONAL PENALTIES FOR RETALIATION.— 
‘‘(1) IN
GENERAL.—A long-term care facility 
may not— 
‘‘(A) discharge, demote, suspend, threaten, 
harass, or deny a promotion or other employ-
ment-related benefit to an employee, or in any
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other manner discriminate against an employee 
in the terms and conditions of employment be-
cause of lawful acts done by the employee; or 
‘‘(B) file a complaint or a report against a 
nurse or other employee with the appropriate 
State professional disciplinary agency because of 
lawful acts done by the nurse or employee, 
for making a report, causing a report to be made, or 
for taking steps in furtherance of making a report 
pursuant to subsection (b)(1). 
‘‘(2) PENALTIES FOR RETALIATION.—If a long- 
term care facility violates subparagraph (A) or (B) of 
paragraph (1) the facility shall be subject to a civil 
money penalty of not more than $200,000 or the Sec-
retary may classify the entity as an excluded entity 
for a period of 2 years pursuant to section 1128(b), 
or both. 
‘‘(3) REQUIREMENT
TO
POST
NOTICE.—Each 
long-term care facility shall post conspicuously in an 
appropriate location a sign (in a form specified by 
the Secretary) specifying the rights of employees 
under this section. Such sign shall include a state-
ment that an employee may file a complaint with the 
Secretary against a long-term care facility that vio-
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lates the provisions of this subsection and information 
with respect to the manner of filing such a complaint. 
‘‘(e) PROCEDURE.—The provisions of section 1128A 
(other than subsections (a) and (b) and the second sentence 
of subsection (f)) shall apply to a civil money penalty or 
exclusion under this section in the same manner as such 
provisions apply to a penalty or proceeding under section 
1128A(a). 
‘‘(f) DEFINITIONS.—In this section, the terms ‘elder 
justice’, ‘long-term care facility’, and ‘law enforcement’ have 
the meanings given those terms in section 2011.’’. 
(c) NATIONAL NURSE AIDE REGISTRY.— 
(1) DEFINITION OF NURSE AIDE.—In this sub-
section, the term ‘‘nurse aide’’ has the meaning given 
that term in sections 1819(b)(5)(F) and 1919(b)(5)(F) 
of the Social Security Act (42 U.S.C. 1395i– 
3(b)(5)(F); 1396r(b)(5)(F)). 
(2) STUDY AND REPORT.— 
(A) IN GENERAL.—The Secretary, in con-
sultation with appropriate government agencies 
and private sector organizations, shall conduct a 
study on establishing a national nurse aide reg-
istry.
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(B) AREAS
EVALUATED.—The study con-
ducted under this subsection shall include an 
evaluation of— 
(i) who should be included in the reg-
istry; 
(ii) how such a registry would comply 
with Federal and State privacy laws and 
regulations; 
(iii) how data would be collected for 
the registry; 
(iv) what entities and individuals 
would have access to the data collected; 
(v) how the registry would provide ap-
propriate information regarding violations 
of Federal and State law by individuals in-
cluded in the registry; 
(vi) how the functions of a national 
nurse aide registry would be coordinated 
with the nationwide program for national 
and State background checks on direct pa-
tient access employees of long-term care fa-
cilities and providers under section 4301; 
and 
(vii) how the information included in 
State nurse aide registries developed and
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maintained under sections 1819(e)(2) and 
1919(e)(2) of the Social Security Act (42 
U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)) would 
be provided as part of a national nurse aide 
registry. 
(C) CONSIDERATIONS.—In conducting the 
study and preparing the report required under 
this subsection, the Secretary shall take into con-
sideration the findings and conclusions of rel-
evant reports and other relevant resources, in-
cluding the following: 
(i) The Department of Health and 
Human Services Office of Inspector General 
Report, Nurse Aide Registries: State Com-
pliance and Practices (February 2005). 
(ii) The General Accounting Office 
(now known as the Government Account-
ability Office) Report, Nursing Homes: 
More Can Be Done to Protect Residents 
from Abuse (March 2002). 
(iii) The Department of Health and 
Human Services Office of the Inspector 
General Report, Nurse Aide Registries: 
Long-Term Care Facility Compliance and 
Practices (July 2005).
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(iv) The Department of Health and 
Human Services Health Resources and 
Services Administration Report, Nursing 
Aides, Home Health Aides, and Related 
Health Care Occupations—National and 
Local Workforce Shortages and Associated 
Data Needs (2004) (in particular with re-
spect to chapter 7 and appendix F). 
(v) The 2001 Report to CMS from the 
School of Rural Public Health, Texas A&M 
University, Preventing Abuse and Neglect 
in Nursing Homes: The Role of Nurse Aide 
Registries. 
(vi) Information included in State 
nurse aide registries developed and main-
tained 
under 
sections 
1819(e)(2) 
and 
1919(e)(2) of the Social Security Act (42 
U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)). 
(D) REPORT.—Not later than 18 months 
after the date of enactment of this Act, the Sec-
retary shall submit to the Elder Justice Coordi-
nating Council established under section 2021 of 
the Social Security Act, as added by section 
1805(a), the Committee on Finance of the Sen-
ate, and the Committee on Ways and Means and
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(B) in subtitle 1, by striking ‘‘this title’’ 
each place it appears and inserting ‘‘this sub-
title’’. 
(2) TITLE IV.—Title IV of the Social Security 
Act (42 U.S.C. 601 et seq.) is amended— 
(A) in section 404(d)— 
(i) in paragraphs (1)(A), (2)(A), and 
(3)(B), by inserting ‘‘subtitle 1 of’’ before 
‘‘title XX’’ each place it appears; 
(ii) in the heading of paragraph (2), 
by inserting ‘‘SUBTITLE
OF’’ before 
‘‘TITLE XX’’; and 
(iii) in the heading of paragraph 
(3)(B), by inserting ‘‘SUBTITLE 1 OF’’ before 
‘‘TITLE XX’’; and 
(B) in sections 422(b), 471(a)(4), 472(h)(1), 
and 473(b)(2), by inserting ‘‘subtitle 1 of’’ before 
‘‘title XX’’ each place it appears. 
(3) TITLE XI.—Title XI of the Social Security 
Act (42 U.S.C. 1301 et seq.) is amended— 
(A) in section 1128(h)(3)— 
(i) by inserting ‘‘subtitle 1 of’’ before 
‘‘title XX’’; and 
(ii) by striking ‘‘such title’’ and insert-
ing ‘‘such subtitle’’; and
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(B) in section 1128A(i)(1), by inserting 
‘‘subtitle 1 of’’ before ‘‘title XX’’. 
Subtitle I—Sense of the Senate 
Regarding Medical Malpractice 
SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL 
MALPRACTICE. 
It is the sense of the Senate that— 
(1) health care reform presents an opportunity to 
address issues related to medical malpractice and 
medical liability insurance; 
(2) States should be encouraged to develop and 
test alternatives to the existing civil litigation system 
as a way of improving patient safety, reducing med-
ical errors, encouraging the efficient resolution of dis-
putes, increasing the availability of prompt and fair 
resolution of disputes, and improving access to liabil-
ity insurance, while preserving an individual’s right 
to seek redress in court; and 
(3) Congress should consider establishing a State 
demonstration program to evaluate alternatives to the 
existing civil litigation system with respect to the res-
olution of medical malpractice claims.
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TITLE VII—IMPROVING ACCESS 
TO 
INNOVATIVE 
MEDICAL 
THERAPIES 
Subtitle A—Biologics Price 
Competition and Innovation 
SEC. 7001. SHORT TITLE. 
(a) IN GENERAL.—This subtitle may be cited as the 
‘‘Biologics Price Competition and Innovation Act of 2009’’. 
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that a biosimilars pathway balancing innovation and 
consumer interests should be established. 
SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGI-
CAL PRODUCTS. 
(a) LICENSURE OF BIOLOGICAL PRODUCTS AS BIO-
SIMILAR OR INTERCHANGEABLE.—Section 351 of the Public 
Health Service Act (42 U.S.C. 262) is amended— 
(1) in subsection (a)(1)(A), by inserting ‘‘under 
this subsection or subsection (k)’’ after ‘‘biologics li-
cense’’; and 
(2) by adding at the end the following: 
‘‘(k) LICENSURE OF BIOLOGICAL PRODUCTS AS BIO-
SIMILAR OR INTERCHANGEABLE.— 
‘‘(1) IN GENERAL.—Any person may submit an 
application for licensure of a biological product under 
this subsection.
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‘‘(2) CONTENT.— 
‘‘(A) IN GENERAL.— 
‘‘(i) REQUIRED INFORMATION.—An ap-
plication submitted under this subsection 
shall include information demonstrating 
that— 
‘‘(I) the biological product is bio-
similar to a reference product based 
upon data derived from— 
‘‘(aa) analytical studies that 
demonstrate that the biological 
product is highly similar to the 
reference product notwithstanding 
minor differences in clinically in-
active components; 
‘‘(bb) animal studies (includ-
ing the assessment of toxicity); 
and 
‘‘(cc) a clinical study or 
studies (including the assessment 
of immunogenicity and phar-
macokinetics 
or 
pharmacodynamics) that are suf-
ficient to demonstrate safety, pu-
rity, and potency in 1 or more
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appropriate conditions of use for 
which the reference product is li-
censed and intended to be used 
and for which licensure is sought 
for the biological product; 
‘‘(II) the biological product and 
reference product utilize the same 
mechanism or mechanisms of action 
for the condition or conditions of use 
prescribed, recommended, or suggested 
in the proposed labeling, but only to 
the extent the mechanism or mecha-
nisms of action are known for the ref-
erence product; 
‘‘(III) the condition or conditions 
of use prescribed, recommended, or sug-
gested in the labeling proposed for the 
biological product have been previously 
approved for the reference product; 
‘‘(IV) the route of administration, 
the dosage form, and the strength of the 
biological product are the same as 
those of the reference product; and 
‘‘(V) the facility in which the bio-
logical product is manufactured, proc-
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essed, packed, or held meets standards 
designed to assure that the biological 
product continues to be safe, pure, and 
potent. 
‘‘(ii) 
DETERMINATION
BY
SEC-
RETARY.—The Secretary may determine, in 
the Secretary’s discretion, that an element 
described in clause (i)(I) is unnecessary in 
an application submitted under this sub-
section. 
‘‘(iii) ADDITIONAL INFORMATION.—An 
application submitted under this sub-
section— 
‘‘(I) shall include publicly-avail-
able information regarding the Sec-
retary’s previous determination that 
the reference product is safe, pure, and 
potent; and 
‘‘(II) may include any additional 
information in support of the applica-
tion, including publicly-available in-
formation with respect to the reference 
product or another biological product. 
‘‘(B) INTERCHANGEABILITY.—An applica-
tion (or a supplement to an application) sub-
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mitted under this subsection may include infor-
mation demonstrating that the biological product 
meets the standards described in paragraph (4). 
‘‘(3) EVALUATION BY SECRETARY.—Upon review 
of an application (or a supplement to an application) 
submitted under this subsection, the Secretary shall 
license the biological product under this subsection 
if— 
‘‘(A) the Secretary determines that the in-
formation submitted in the application (or the 
supplement) is sufficient to show that the biologi-
cal product— 
‘‘(i) is biosimilar to the reference prod-
uct; or 
‘‘(ii) meets the standards described in 
paragraph (4), and therefore is interchange-
able with the reference product; and 
‘‘(B) the applicant (or other appropriate 
person) consents to the inspection of the facility 
that is the subject of the application, in accord-
ance with subsection (c). 
‘‘(4) SAFETY
STANDARDS
FOR
DETERMINING 
INTERCHANGEABILITY.—Upon review of an applica-
tion submitted under this subsection or any supple-
ment to such application, the Secretary shall deter-
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mine the biological product to be interchangeable with 
the reference product if the Secretary determines that 
the information submitted in the application (or a 
supplement to such application) is sufficient to show 
that— 
‘‘(A) the biological product— 
‘‘(i) is biosimilar to the reference prod-
uct; and 
‘‘(ii) can be expected to produce the 
same clinical result as the reference product 
in any given patient; and 
‘‘(B) for a biological product that is admin-
istered more than once to an individual, the risk 
in terms of safety or diminished efficacy of alter-
nating or switching between use of the biological 
product and the reference product is not greater 
than the risk of using the reference product with-
out such alternation or switch. 
‘‘(5) GENERAL RULES.— 
‘‘(A) ONE REFERENCE PRODUCT PER APPLI-
CATION.—A biological product, in an applica-
tion submitted under this subsection, may not be 
evaluated against more than 1 reference product. 
‘‘(B) REVIEW.—An application submitted 
under this subsection shall be reviewed by the di-
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vision within the Food and Drug Administra-
tion that is responsible for the review and ap-
proval of the application under which the ref-
erence product is licensed. 
‘‘(C) RISK
EVALUATION
AND
MITIGATION 
STRATEGIES.—The authority of the Secretary 
with respect to risk evaluation and mitigation 
strategies under the Federal Food, Drug, and 
Cosmetic Act shall apply to biological products 
licensed under this subsection in the same man-
ner as such authority applies to biological prod-
ucts licensed under subsection (a). 
‘‘(6) EXCLUSIVITY FOR FIRST INTERCHANGEABLE 
BIOLOGICAL PRODUCT.—Upon review of an applica-
tion submitted under this subsection relying on the 
same reference product for which a prior biological 
product has received a determination of interchange-
ability for any condition of use, the Secretary shall 
not make a determination under paragraph (4) that 
the second or subsequent biological product is inter-
changeable for any condition of use until the earlier 
of— 
‘‘(A) 1 year after the first commercial mar-
keting of the first interchangeable biosimilar bio-
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logical product to be approved as interchangeable 
for that reference product; 
‘‘(B) 18 months after— 
‘‘(i) a final court decision on all pat-
ents in suit in an action instituted under 
subsection (l)(6) against the applicant that 
submitted the application for the first ap-
proved interchangeable biosimilar biological 
product; or 
‘‘(ii) the dismissal with or without 
prejudice of an action instituted under sub-
section (l)(6) against the applicant that 
submitted the application for the first ap-
proved interchangeable biosimilar biological 
product; or 
‘‘(C)(i) 42 months after approval of the first 
interchangeable biosimilar biological product if 
the applicant that submitted such application 
has been sued under subsection (l)(6) and such 
litigation is still ongoing within such 42-month 
period; or 
‘‘(ii) 18 months after approval of the first 
interchangeable biosimilar biological product if 
the applicant that submitted such application 
has not been sued under subsection (l)(6).
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For purposes of this paragraph, the term ‘final court 
decision’ means a final decision of a court from which 
no appeal (other than a petition to the United States 
Supreme Court for a writ of certiorari) has been or 
can be taken. 
‘‘(7) EXCLUSIVITY FOR REFERENCE PRODUCT.— 
‘‘(A) EFFECTIVE DATE OF BIOSIMILAR AP-
PLICATION APPROVAL.—Approval of an applica-
tion under this subsection may not be made ef-
fective by the Secretary until the date that is 12 
years after the date on which the reference prod-
uct was first licensed under subsection (a). 
‘‘(B) 
FILING
PERIOD.—An 
application 
under this subsection may not be submitted to 
the Secretary until the date that is 4 years after 
the date on which the reference product was first 
licensed under subsection (a). 
‘‘(C) FIRST
LICENSURE.—Subparagraphs 
(A) and (B) shall not apply to a license for or 
approval of— 
‘‘(i) a supplement for the biological 
product that is the reference product; or 
‘‘(ii) a subsequent application filed by 
the same sponsor or manufacturer of the bi-
ological product that is the reference prod-
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uct (or a licensor, predecessor in interest, or 
other related entity) for— 
‘‘(I) a change (not including a 
modification to the structure of the bio-
logical product) that results in a new 
indication, route of administration, 
dosing schedule, dosage form, delivery 
system, delivery device, or strength; or 
‘‘(II) a modification to the struc-
ture of the biological product that does 
not result in a change in safety, pu-
rity, or potency. 
‘‘(8) GUIDANCE DOCUMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary may, 
after opportunity for public comment, issue 
guidance in accordance, except as provided in 
subparagraph (B)(i), with section 701(h) of the 
Federal Food, Drug, and Cosmetic Act with re-
spect to the licensure of a biological product 
under this subsection. Any such guidance may be 
general or specific. 
‘‘(B) PUBLIC COMMENT.— 
‘‘(i) IN GENERAL.—The Secretary shall 
provide the public an opportunity to com-
ment on any proposed guidance issued
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under subparagraph (A) before issuing final 
guidance. 
‘‘(ii) INPUT
REGARDING
MOST
VALU-
ABLE GUIDANCE.—The Secretary shall es-
tablish a process through which the public 
may provide the Secretary with input re-
garding priorities for issuing guidance. 
‘‘(C) NO REQUIREMENT FOR APPLICATION 
CONSIDERATION.—The 
issuance 
(or 
non- 
issuance) of guidance under subparagraph (A) 
shall not preclude the review of, or action on, an 
application submitted under this subsection. 
‘‘(D) REQUIREMENT FOR PRODUCT CLASS- 
SPECIFIC
GUIDANCE.—If the Secretary issues 
product class-specific guidance under subpara-
graph (A), such guidance shall include a descrip-
tion of— 
‘‘(i) the criteria that the Secretary will 
use to determine whether a biological prod-
uct is highly similar to a reference product 
in such product class; and 
‘‘(ii) the criteria, if available, that the 
Secretary will use to determine whether a 
biological product meets the standards de-
scribed in paragraph (4).
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‘‘(E) CERTAIN PRODUCT CLASSES.— 
‘‘(i) GUIDANCE.—The Secretary may 
indicate in a guidance document that the 
science and experience, as of the date of 
such guidance, with respect to a product or 
product class (not including any recom-
binant protein) does not allow approval of 
an application for a license as provided 
under this subsection for such product or 
product class. 
‘‘(ii) MODIFICATION OR REVERSAL.— 
The Secretary may issue a subsequent guid-
ance document under subparagraph (A) to 
modify or reverse a guidance document 
under clause (i). 
‘‘(iii) NO EFFECT ON ABILITY TO DENY 
LICENSE.—Clause (i) shall not be construed 
to require the Secretary to approve a prod-
uct with respect to which the Secretary has 
not indicated in a guidance document that 
the science and experience, as described in 
clause (i), does not allow approval of such 
an application. 
‘‘(l) PATENTS.—
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‘‘(1) CONFIDENTIAL ACCESS TO SUBSECTION (k) 
APPLICATION.— 
‘‘(A) APPLICATION OF PARAGRAPH.—Unless 
otherwise agreed to by a person that submits an 
application under subsection (k) (referred to in 
this subsection as the ‘subsection (k) applicant’) 
and the sponsor of the application for the ref-
erence product (referred to in this subsection as 
the ‘reference product sponsor’), the provisions of 
this paragraph shall apply to the exchange of in-
formation described in this subsection. 
‘‘(B) IN GENERAL.— 
‘‘(i) PROVISION OF CONFIDENTIAL IN-
FORMATION.—When a subsection (k) appli-
cant submits an application under sub-
section (k), such applicant shall provide to 
the persons described in clause (ii), subject 
to the terms of this paragraph, confidential 
access to the information required to be pro-
duced pursuant to paragraph (2) and any 
other information that the subsection (k) 
applicant determines, in its sole discretion, 
to be appropriate (referred to in this sub-
section as the ‘confidential information’).
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‘‘(ii) RECIPIENTS OF INFORMATION.— 
The persons described in this clause are the 
following: 
‘‘(I) OUTSIDE COUNSEL.—One or 
more attorneys designated by the ref-
erence product sponsor who are em-
ployees of an entity other than the ref-
erence product sponsor (referred to in 
this paragraph as the ‘outside coun-
sel’), provided that such attorneys do 
not engage, formally or informally, in 
patent prosecution relevant or related 
to the reference product. 
‘‘(II) IN-HOUSE
COUNSEL.—One 
attorney that represents the reference 
product sponsor who is an employee of 
the reference product sponsor, provided 
that such attorney does not engage, for-
mally or informally, in patent prosecu-
tion relevant or related to the reference 
product. 
‘‘(iii) PATENT OWNER ACCESS.—A rep-
resentative of the owner of a patent exclu-
sively licensed to a reference product spon-
sor with respect to the reference product and
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who has retained a right to assert the pat-
ent or participate in litigation concerning 
the patent may be provided the confidential 
information, provided that the representa-
tive informs the reference product sponsor 
and the subsection (k) applicant of his or 
her agreement to be subject to the confiden-
tiality provisions set forth in this para-
graph, including those under clause (ii). 
‘‘(C) LIMITATION ON DISCLOSURE.—No per-
son that receives confidential information pursu-
ant to subparagraph (B) shall disclose any con-
fidential information to any other person or en-
tity, including the reference product sponsor em-
ployees, outside scientific consultants, or other 
outside counsel retained by the reference product 
sponsor, without the prior written consent of the 
subsection (k) applicant, which shall not be un-
reasonably withheld. 
‘‘(D) USE
OF
CONFIDENTIAL
INFORMA-
TION.—Confidential information shall be used 
for the sole and exclusive purpose of determining, 
with respect to each patent assigned to or exclu-
sively licensed by the reference product sponsor, 
whether a claim of patent infringement could
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reasonably be asserted if the subsection (k) appli-
cant engaged in the manufacture, use, offering 
for sale, sale, or importation into the United 
States of the biological product that is the subject 
of the application under subsection (k). 
‘‘(E) OWNERSHIP OF CONFIDENTIAL INFOR-
MATION.—The confidential information disclosed 
under this paragraph is, and shall remain, the 
property of the subsection (k) applicant. By pro-
viding the confidential information pursuant to 
this paragraph, the subsection (k) applicant does 
not provide the reference product sponsor or the 
outside counsel any interest in or license to use 
the confidential information, for purposes other 
than those specified in subparagraph (D). 
‘‘(F) EFFECT OF INFRINGEMENT ACTION.— 
In the event that the reference product sponsor 
files a patent infringement suit, the use of con-
fidential information shall continue to be gov-
erned by the terms of this paragraph until such 
time as a court enters a protective order regard-
ing the information. Upon entry of such order, 
the subsection (k) applicant may redesignate 
confidential information in accordance with the 
terms of that order. No confidential information
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shall be included in any publicly-available com-
plaint or other pleading. In the event that the 
reference product sponsor does not file an in-
fringement action by the date specified in para-
graph (6), the reference product sponsor shall re-
turn or destroy all confidential information re-
ceived under this paragraph, provided that if the 
reference product sponsor opts to destroy such in-
formation, it will confirm destruction in writing 
to the subsection (k) applicant. 
‘‘(G) RULE OF CONSTRUCTION.—Nothing in 
this paragraph shall be construed— 
‘‘(i) as an admission by the subsection 
(k) applicant regarding the validity, en-
forceability, or infringement of any patent; 
or 
‘‘(ii) as an agreement or admission by 
the subsection (k) applicant with respect to 
the competency, relevance, or materiality of 
any confidential information. 
‘‘(H) EFFECT OF VIOLATION.—The disclo-
sure of any confidential information in violation 
of this paragraph shall be deemed to cause the 
subsection (k) applicant to suffer irreparable 
harm for which there is no adequate legal rem-
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HR 3590 EAS/PP 
edy and the court shall consider immediate in-
junctive relief to be an appropriate and nec-
essary remedy for any violation or threatened 
violation of this paragraph. 
‘‘(2) SUBSECTION (k) APPLICATION
INFORMA-
TION.—Not later than 20 days after the Secretary no-
tifies the subsection (k) applicant that the application 
has been accepted for review, the subsection (k) appli-
cant— 
‘‘(A) shall provide to the reference product 
sponsor a copy of the application submitted to 
the Secretary under subsection (k), and such 
other information that describes the process or 
processes used to manufacture the biological 
product that is the subject of such application; 
and 
‘‘(B) may provide to the reference product 
sponsor additional information requested by or 
on behalf of the reference product sponsor. 
‘‘(3) LIST AND DESCRIPTION OF PATENTS.— 
‘‘(A) LIST BY REFERENCE PRODUCT SPON-
SOR.—Not later than 60 days after the receipt of 
the application and information under para-
graph (2), the reference product sponsor shall 
provide to the subsection (k) applicant—
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‘‘(i) a list of patents for which the ref-
erence product sponsor believes a claim of 
patent infringement could reasonably be as-
serted by the reference product sponsor, or 
by a patent owner that has granted an ex-
clusive license to the reference product spon-
sor with respect to the reference product, if 
a person not licensed by the reference prod-
uct sponsor engaged in the making, using, 
offering to sell, selling, or importing into 
the United States of the biological product 
that is the subject of the subsection (k) ap-
plication; and 
‘‘(ii) an identification of the patents 
on such list that the reference product spon-
sor would be prepared to license to the sub-
section (k) applicant. 
‘‘(B) LIST
AND
DESCRIPTION
BY
SUB-
SECTION (k) APPLICANT.—Not later than 60 days 
after receipt of the list under subparagraph (A), 
the subsection (k) applicant— 
‘‘(i) may provide to the reference prod-
uct sponsor a list of patents to which the 
subsection (k) applicant believes a claim of 
patent infringement could reasonably be as-
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serted by the reference product sponsor if a 
person not licensed by the reference product 
sponsor engaged in the making, using, offer-
ing to sell, selling, or importing into the 
United States of the biological product that 
is the subject of the subsection (k) applica-
tion; 
‘‘(ii) shall provide to the reference 
product sponsor, with respect to each patent 
listed by the reference product sponsor 
under subparagraph (A) or listed by the 
subsection (k) applicant under clause (i)— 
‘‘(I) a detailed statement that de-
scribes, on a claim by claim basis, the 
factual and legal basis of the opinion 
of the subsection (k) applicant that 
such patent is invalid, unenforceable, 
or will not be infringed by the commer-
cial marketing of the biological product 
that is the subject of the subsection (k) 
application; or 
‘‘(II) a statement that the sub-
section (k) applicant does not intend to 
begin commercial marketing of the bio-
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and the subsection (k) applicant shall engage in 
good faith negotiations to agree on which, if any, 
patents listed under paragraph (3) by the sub-
section (k) applicant or the reference product 
sponsor shall be the subject of an action for pat-
ent infringement under paragraph (6). 
‘‘(B) FAILURE TO REACH AGREEMENT.—If, 
within 15 days of beginning negotiations under 
subparagraph (A), the subsection (k) applicant 
and the reference product sponsor fail to agree on 
a final and complete list of which, if any, pat-
ents listed under paragraph (3) by the subsection 
(k) applicant or the reference product sponsor 
shall be the subject of an action for patent in-
fringement under paragraph (6), the provisions 
of paragraph (5) shall apply to the parties. 
‘‘(5) PATENT RESOLUTION IF NO AGREEMENT.— 
‘‘(A) NUMBER OF PATENTS.—The subsection 
(k) applicant shall notify the reference product 
sponsor of the number of patents that such appli-
cant will provide to the reference product sponsor 
under subparagraph (B)(i)(I). 
‘‘(B) EXCHANGE OF PATENT LISTS.— 
‘‘(i) IN GENERAL.—On a date agreed 
to by the subsection (k) applicant and the
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reference product sponsor, but in no case 
later than 5 days after the subsection (k) 
applicant notifies the reference product 
sponsor under subparagraph (A), the sub-
section (k) applicant and the reference prod-
uct sponsor shall simultaneously exchange— 
‘‘(I) the list of patents that the 
subsection (k) applicant believes should 
be the subject of an action for patent 
infringement under paragraph (6); 
and 
‘‘(II) the list of patents, in accord-
ance with clause (ii), that the reference 
product sponsor believes should be the 
subject of an action for patent in-
fringement under paragraph (6). 
‘‘(ii) NUMBER OF PATENTS LISTED BY 
REFERENCE PRODUCT SPONSOR.— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), the number of patents 
listed by the reference product sponsor 
under clause (i)(II) may not exceed the 
number of patents listed by the sub-
section (k) applicant under clause 
(i)(I).
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‘‘(II) EXCEPTION.—If a subsection 
(k) applicant does not list any patent 
under clause (i)(I), the reference prod-
uct sponsor may list 1 patent under 
clause (i)(II). 
‘‘(6) IMMEDIATE
PATENT
INFRINGEMENT
AC-
TION.— 
‘‘(A) ACTION
IF
AGREEMENT
ON
PATENT 
LIST.—If the subsection (k) applicant and the 
reference product sponsor agree on patents as de-
scribed in paragraph (4), not later than 30 days 
after such agreement, the reference product spon-
sor shall bring an action for patent infringement 
with respect to each such patent. 
‘‘(B) ACTION IF NO AGREEMENT ON PATENT 
LIST.—If the provisions of paragraph (5) apply 
to the parties as described in paragraph (4)(B), 
not later than 30 days after the exchange of lists 
under paragraph (5)(B), the reference product 
sponsor shall bring an action for patent in-
fringement with respect to each patent that is in-
cluded on such lists. 
‘‘(C) NOTIFICATION
AND
PUBLICATION
OF 
COMPLAINT.—
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‘‘(i) NOTIFICATION
TO
SECRETARY.— 
Not later than 30 days after a complaint is 
served to a subsection (k) applicant in an 
action for patent infringement described 
under this paragraph, the subsection (k) ap-
plicant shall provide the Secretary with no-
tice and a copy of such complaint. 
‘‘(ii) PUBLICATION
BY
SECRETARY.— 
The Secretary shall publish in the Federal 
Register notice of a complaint received 
under clause (i). 
‘‘(7) NEWLY ISSUED OR LICENSED PATENTS.—In 
the case of a patent that— 
‘‘(A) is issued to, or exclusively licensed by, 
the reference product sponsor after the date that 
the reference product sponsor provided the list to 
the subsection (k) applicant under paragraph 
(3)(A); and 
‘‘(B) the reference product sponsor reason-
ably believes that, due to the issuance of such 
patent, a claim of patent infringement could rea-
sonably be asserted by the reference product 
sponsor if a person not licensed by the reference 
product sponsor engaged in the making, using, 
offering to sell, selling, or importing into the
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United States of the biological product that is 
the subject of the subsection (k) application, 
not later than 30 days after such issuance or licens-
ing, the reference product sponsor shall provide to the 
subsection (k) applicant a supplement to the list pro-
vided by the reference product sponsor under para-
graph (3)(A) that includes such patent, not later than 
30 days after such supplement is provided, the sub-
section (k) applicant shall provide a statement to the 
reference product sponsor in accordance with para-
graph (3)(B), and such patent shall be subject to 
paragraph (8). 
‘‘(8) NOTICE OF COMMERCIAL MARKETING AND 
PRELIMINARY INJUNCTION.— 
‘‘(A) 
NOTICE
OF
COMMERCIAL
MAR-
KETING.—The subsection (k) applicant shall pro-
vide notice to the reference product sponsor not 
later than 180 days before the date of the first 
commercial marketing of the biological product 
licensed under subsection (k). 
‘‘(B) PRELIMINARY INJUNCTION.—After re-
ceiving the notice under subparagraph (A) and 
before such date of the first commercial mar-
keting of such biological product, the reference 
product sponsor may seek a preliminary injunc-
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tion prohibiting the subsection (k) applicant 
from engaging in the commercial manufacture or 
sale of such biological product until the court de-
cides the issue of patent validity, enforcement, 
and infringement with respect to any patent that 
is— 
‘‘(i) included in the list provided by 
the reference product sponsor under para-
graph (3)(A) or in the list provided by the 
subsection (k) applicant under paragraph 
(3)(B); and 
‘‘(ii) not included, as applicable, on— 
‘‘(I) the list of patents described 
in paragraph (4); or 
‘‘(II) the lists of patents described 
in paragraph (5)(B). 
‘‘(C) REASONABLE
COOPERATION.—If the 
reference product sponsor has sought a prelimi-
nary injunction under subparagraph (B), the 
reference product sponsor and the subsection (k) 
applicant shall reasonably cooperate to expedite 
such further discovery as is needed in connection 
with the preliminary injunction motion. 
‘‘(9) LIMITATION ON DECLARATORY JUDGMENT 
ACTION.—
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‘‘(A) SUBSECTION (k) APPLICATION
PRO-
VIDED.—If a subsection (k) applicant provides 
the application and information required under 
paragraph (2)(A), neither the reference product 
sponsor nor the subsection (k) applicant may, 
prior to the date notice is received under para-
graph (8)(A), bring any action under section 
2201 of title 28, United States Code, for a dec-
laration of infringement, validity, or enforce-
ability of any patent that is described in clauses 
(i) and (ii) of paragraph (8)(B). 
‘‘(B) SUBSEQUENT
FAILURE
TO
ACT
BY 
SUBSECTION (k) APPLICANT.—If a subsection (k) 
applicant fails to complete an action required of 
the subsection (k) applicant under paragraph 
(3)(B)(ii), paragraph (5), paragraph (6)(C)(i), 
paragraph (7), or paragraph (8)(A), the ref-
erence product sponsor, but not the subsection (k) 
applicant, may bring an action under section 
2201 of title 28, United States Code, for a dec-
laration of infringement, validity, or enforce-
ability of any patent included in the list de-
scribed in paragraph (3)(A), including as pro-
vided under paragraph (7).
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‘‘(C) SUBSECTION
(k) APPLICATION
NOT 
PROVIDED.—If a subsection (k) applicant fails to 
provide the application and information re-
quired under paragraph (2)(A), the reference 
product sponsor, but not the subsection (k) appli-
cant, may bring an action under section 2201 of 
title 28, United States Code, for a declaration of 
infringement, validity, or enforceability of any 
patent that claims the biological product or a use 
of the biological product.’’. 
(b) DEFINITIONS.—Section 351(i) of the Public Health 
Service Act (42 U.S.C. 262(i)) is amended— 
(1) by striking ‘‘In this section, the term ‘biologi-
cal product’ means’’ and inserting the following: ‘‘In 
this section: 
‘‘(1) The term ‘biological product’ means’’; 
(2) in paragraph (1), as so designated, by insert-
ing ‘‘protein (except any chemically synthesized 
polypeptide),’’ after ‘‘allergenic product,’’; and 
(3) by adding at the end the following: 
‘‘(2) The term ‘biosimilar’ or ‘biosimilarity’, in 
reference to a biological product that is the subject of 
an application under subsection (k), means— 
‘‘(A) that the biological product is highly 
similar to the reference product notwithstanding
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minor differences in clinically inactive compo-
nents; and 
‘‘(B) there are no clinically meaningful dif-
ferences between the biological product and the 
reference product in terms of the safety, purity, 
and potency of the product. 
‘‘(3) The term ‘interchangeable’ or ‘interchange-
ability’, in reference to a biological product that is 
shown to meet the standards described in subsection 
(k)(4), means that the biological product may be sub-
stituted for the reference product without the interven-
tion of the health care provider who prescribed the 
reference product. 
‘‘(4) The term ‘reference product’ means the sin-
gle biological product licensed under subsection (a) 
against which a biological product is evaluated in an 
application submitted under subsection (k).’’. 
(c) CONFORMING AMENDMENTS RELATING TO PAT-
ENTS.— 
(1) PATENTS.—Section 271(e) of title 35, United 
States Code, is amended— 
(A) in paragraph (2)— 
(i) in subparagraph (A), by striking 
‘‘or’’ at the end;
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(ii) in subparagraph (B), by adding 
‘‘or’’ at the end; and 
(iii) by inserting after subparagraph 
(B) the following: 
‘‘(C)(i) with respect to a patent that is identified 
in the list of patents described in section 351(l)(3) of 
the Public Health Service Act (including as provided 
under section 351(l)(7) of such Act), an application 
seeking approval of a biological product, or 
‘‘(ii) if the applicant for the application fails to 
provide the application and information required 
under section 351(l)(2)(A) of such Act, an application 
seeking approval of a biological product for a patent 
that 
could 
be 
identified 
pursuant 
to 
section 
351(l)(3)(A)(i) of such Act,’’; and 
(iv) in the matter following subpara-
graph (C) (as added by clause (iii)), by 
striking ‘‘or veterinary biological product’’ 
and inserting ‘‘, veterinary biological prod-
uct, or biological product’’; 
(B) in paragraph (4)— 
(i) in subparagraph (B), by— 
(I) striking ‘‘or veterinary biologi-
cal product’’ and inserting ‘‘, veteri-
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nary biological product, or biological 
product’’; and 
(II) striking ‘‘and’’ at the end; 
(ii) in subparagraph (C), by— 
(I) striking ‘‘or veterinary biologi-
cal product’’ and inserting ‘‘, veteri-
nary biological product, or biological 
product’’; and 
(II) striking the period and in-
serting ‘‘, and’’; 
(iii) by inserting after subparagraph 
(C) the following: 
‘‘(D) the court shall order a permanent injunc-
tion prohibiting any infringement of the patent by 
the biological product involved in the infringement 
until a date which is not earlier than the date of the 
expiration of the patent that has been infringed under 
paragraph (2)(C), provided the patent is the subject 
of a final court decision, as defined in section 
351(k)(6) of the Public Health Service Act, in an ac-
tion for infringement of the patent under section 
351(l)(6) of such Act, and the biological product has 
not yet been approved because of section 351(k)(7) of 
such Act.’’; and
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(iv) in the matter following subpara-
graph (D) (as added by clause (iii)), by 
striking ‘‘and (C)’’ and inserting ‘‘(C), and 
(D)’’; and 
(C) by adding at the end the following: 
‘‘(6)(A) Subparagraph (B) applies, in lieu of para-
graph (4), in the case of a patent— 
‘‘(i) that is identified, as applicable, in the list 
of patents described in section 351(l)(4) of the Public 
Health Service Act or the lists of patents described in 
section 351(l)(5)(B) of such Act with respect to a bio-
logical product; and 
‘‘(ii) for which an action for infringement of the 
patent with respect to the biological product— 
‘‘(I) was brought after the expiration of the 
30-day period described in subparagraph (A) or 
(B), as applicable, of section 351(l)(6) of such 
Act; or 
‘‘(II) was brought before the expiration of 
the 30-day period described in subclause (I), but 
which was dismissed without prejudice or was 
not prosecuted to judgment in good faith. 
‘‘(B) In an action for infringement of a patent de-
scribed in subparagraph (A), the sole and exclusive remedy 
that may be granted by a court, upon a finding that the
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making, using, offering to sell, selling, or importation into 
the United States of the biological product that is the subject 
of the action infringed the patent, shall be a reasonable roy-
alty. 
‘‘(C) The owner of a patent that should have been in-
cluded in the list described in section 351(l)(3)(A) of the 
Public Health Service Act, including as provided under sec-
tion 351(l)(7) of such Act for a biological product, but was 
not timely included in such list, may not bring an action 
under this section for infringement of the patent with re-
spect to the biological product.’’. 
(2) CONFORMING
AMENDMENT
UNDER
TITLE 
28.—Section 2201(b) of title 28, United States Code, 
is amended by inserting before the period the fol-
lowing: ‘‘, or section 351 of the Public Health Service 
Act’’. 
(d) CONFORMING AMENDMENTS UNDER THE FEDERAL 
FOOD, DRUG, AND COSMETIC ACT.— 
(1) CONTENT AND REVIEW OF APPLICATIONS.— 
Section 505(b)(5)(B) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(b)(5)(B)) is amended by 
inserting before the period at the end of the first sen-
tence the following: ‘‘or, with respect to an applicant 
for approval of a biological product under section
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351(k) of the Public Health Service Act, any nec-
essary clinical study or studies’’. 
(2) NEW ACTIVE INGREDIENT.—Section 505B of 
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355c) is amended by adding at the end the following: 
‘‘(n) NEW ACTIVE INGREDIENT.— 
‘‘(1) NON-INTERCHANGEABLE
BIOSIMILAR
BIO-
LOGICAL PRODUCT.—A biological product that is bio-
similar to a reference product under section 351 of the 
Public Health Service Act, and that the Secretary has 
not determined to meet the standards described in 
subsection (k)(4) of such section for interchangeability 
with the reference product, shall be considered to have 
a new active ingredient under this section. 
‘‘(2) INTERCHANGEABLE BIOSIMILAR BIOLOGICAL 
PRODUCT.—A biological product that is interchange-
able with a reference product under section 351 of the 
Public Health Service Act shall not be considered to 
have a new active ingredient under this section.’’. 
(e) PRODUCTS PREVIOUSLY APPROVED UNDER SEC-
TION 505.— 
(1) REQUIREMENT TO FOLLOW SECTION 351.— 
Except as provided in paragraph (2), an application 
for a biological product shall be submitted under sec-
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tion 351 of the Public Health Service Act (42 U.S.C. 
262) (as amended by this Act). 
(2) EXCEPTION.—An application for a biological 
product may be submitted under section 505 of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355) if— 
(A) such biological product is in a product 
class for which a biological product in such 
product class is the subject of an application ap-
proved under such section 505 not later than the 
date of enactment of this Act; and 
(B) such application— 
(i) has been submitted to the Secretary 
of Health and Human Services (referred to 
in this subtitle as the ‘‘Secretary’’) before 
the date of enactment of this Act; or 
(ii) is submitted to the Secretary not 
later than the date that is 10 years after the 
date of enactment of this Act. 
(3) LIMITATION.—Notwithstanding paragraph 
(2), an application for a biological product may not 
be submitted under section 505 of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355) if there is 
another biological product approved under subsection 
(a) of section 351 of the Public Health Service Act
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that could be a reference product with respect to such 
application (within the meaning of such section 351) 
if such application were submitted under subsection 
(k) of such section 351. 
(4) DEEMED APPROVED UNDER SECTION 351.— 
An approved application for a biological product 
under section 505 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355) shall be deemed to be 
a license for the biological product under such section 
351 on the date that is 10 years after the date of en-
actment of this Act. 
(5) DEFINITIONS.—For purposes of this sub-
section, the term ‘‘biological product’’ has the mean-
ing given such term under section 351 of the Public 
Health Service Act (42 U.S.C. 262) (as amended by 
this Act). 
(f) FOLLOW-ON BIOLOGICS USER FEES.— 
(1) DEVELOPMENT
OF
USER
FEES
FOR
BIO-
SIMILAR BIOLOGICAL PRODUCTS.— 
(A) IN GENERAL.—Beginning not later than 
October 1, 2010, the Secretary shall develop rec-
ommendations to present to Congress with re-
spect to the goals, and plans for meeting the 
goals, for the process for the review of biosimilar 
biological product applications submitted under
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section 351(k) of the Public Health Service Act 
(as added by this Act) for the first 5 fiscal years 
after fiscal year 2012. In developing such rec-
ommendations, 
the 
Secretary 
shall 
consult 
with— 
(i) the Committee on Health, Edu-
cation, Labor, and Pensions of the Senate; 
(ii) the Committee on Energy and 
Commerce of the House of Representatives; 
(iii) scientific and academic experts; 
(iv) health care professionals; 
(v) representatives of patient and con-
sumer advocacy groups; and 
(vi) the regulated industry. 
(B) PUBLIC
REVIEW
OF
RECOMMENDA-
TIONS.—After negotiations with the regulated in-
dustry, the Secretary shall— 
(i) present the recommendations devel-
oped under subparagraph (A) to the Con-
gressional committees specified in such sub-
paragraph; 
(ii) publish such recommendations in 
the Federal Register;
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(iii) provide for a period of 30 days for 
the public to provide written comments on 
such recommendations; 
(iv) hold a meeting at which the public 
may present its views on such recommenda-
tions; and 
(v) after consideration of such public 
views and comments, revise such rec-
ommendations as necessary. 
(C) 
TRANSMITTAL
OF
RECOMMENDA-
TIONS.—Not later than January 15, 2012, the 
Secretary shall transmit to Congress the revised 
recommendations under subparagraph (B), a 
summary of the views and comments received 
under such subparagraph, and any changes 
made to the recommendations in response to such 
views and comments. 
(2) ESTABLISHMENT OF USER FEE PROGRAM.— 
It is the sense of the Senate that, based on the rec-
ommendations transmitted to Congress by the Sec-
retary pursuant to paragraph (1)(C), Congress should 
authorize a program, effective on October 1, 2012, for 
the collection of user fees relating to the submission of 
biosimilar biological product applications under sec-
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tion 351(k) of the Public Health Service Act (as 
added by this Act). 
(3) TRANSITIONAL PROVISIONS FOR USER FEES 
FOR BIOSIMILAR BIOLOGICAL PRODUCTS.— 
(A) APPLICATION
OF
THE
PRESCRIPTION 
DRUG
USER
FEE
PROVISIONS.—Section 
735(1)(B) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 379g(1)(B)) is amended by 
striking ‘‘section 351’’ and inserting ‘‘subsection 
(a) or (k) of section 351’’. 
(B) EVALUATION OF COSTS OF REVIEWING 
BIOSIMILAR
BIOLOGICAL
PRODUCT
APPLICA-
TIONS.—During the period beginning on the date 
of enactment of this Act and ending on October 
1, 2010, the Secretary shall collect and evaluate 
data regarding the costs of reviewing applica-
tions for biological products submitted under sec-
tion 351(k) of the Public Health Service Act (as 
added by this Act) during such period. 
(C) AUDIT.— 
(i) IN GENERAL.—On the date that is 
2 years after first receiving a user fee appli-
cable to an application for a biological 
product under section 351(k) of the Public 
Health Service Act (as added by this Act),
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and on a biennial basis thereafter until Oc-
tober 1, 2013, the Secretary shall perform 
an audit of the costs of reviewing such ap-
plications under such section 351(k). Such 
an audit shall compare— 
(I) the costs of reviewing such ap-
plications under such section 351(k) to 
the amount of the user fee applicable to 
such applications; and 
(II)(aa) such ratio determined 
under subclause (I); to 
(bb) the ratio of the costs of re-
viewing applications for biological 
products under section 351(a) of such 
Act (as amended by this Act) to the 
amount of the user fee applicable to 
such applications under such section 
351(a). 
(ii) ALTERATION OF USER FEE.—If the 
audit performed under clause (i) indicates 
that the ratios compared under subclause 
(II) of such clause differ by more than 5 
percent, then the Secretary shall alter the 
user fee applicable to applications sub-
mitted under such section 351(k) to more
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appropriately account for the costs of re-
viewing such applications. 
(iii) ACCOUNTING
STANDARDS.—The 
Secretary shall perform an audit under 
clause (i) in conformance with the account-
ing principles, standards, and requirements 
prescribed by the Comptroller General of the 
United States under section 3511 of title 31, 
United State Code, to ensure the validity of 
any potential variability. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to carry out 
this subsection such sums as may be necessary for 
each of fiscal years 2010 through 2012. 
(g) PEDIATRIC STUDIES OF BIOLOGICAL PRODUCTS.— 
(1) IN
GENERAL.—Section 351 of the Public 
Health Service Act (42 U.S.C. 262) is amended by 
adding at the end the following: 
‘‘(m) PEDIATRIC STUDIES.— 
‘‘(1) APPLICATION
OF
CERTAIN
PROVISIONS.— 
The provisions of subsections (a), (d), (e), (f), (i), (j), 
(k), (l), (p), and (q) of section 505A of the Federal 
Food, Drug, and Cosmetic Act shall apply with re-
spect to the extension of a period under paragraphs 
(2) and (3) to the same extent and in the same man-
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ner as such provisions apply with respect to the ex-
tension of a period under subsection (b) or (c) of sec-
tion 505A of the Federal Food, Drug, and Cosmetic 
Act. 
‘‘(2) MARKET EXCLUSIVITY FOR NEW BIOLOGICAL 
PRODUCTS.—If, prior to approval of an application 
that is submitted under subsection (a), the Secretary 
determines that information relating to the use of a 
new biological product in the pediatric population 
may produce health benefits in that population, the 
Secretary makes a written request for pediatric stud-
ies (which shall include a timeframe for completing 
such studies), the applicant agrees to the request, such 
studies are completed using appropriate formulations 
for each age group for which the study is requested 
within any such timeframe, and the reports thereof 
are submitted and accepted in accordance with sec-
tion 505A(d)(3) of the Federal Food, Drug, and Cos-
metic Act— 
‘‘(A) the periods for such biological product 
referred to in subsection (k)(7) are deemed to be 
4 years and 6 months rather than 4 years and 
12 years and 6 months rather than 12 years; 
and
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‘‘(B) if the biological product is designated 
under section 526 for a rare disease or condition, 
the period for such biological product referred to 
in section 527(a) is deemed to be 7 years and 6 
months rather than 7 years. 
‘‘(3) MARKET EXCLUSIVITY FOR ALREADY-MAR-
KETED BIOLOGICAL PRODUCTS.—If the Secretary de-
termines that information relating to the use of a li-
censed biological product in the pediatric population 
may produce health benefits in that population and 
makes a written request to the holder of an approved 
application under subsection (a) for pediatric studies 
(which shall include a timeframe for completing such 
studies), the holder agrees to the request, such studies 
are completed using appropriate formulations for 
each age group for which the study is requested with-
in any such timeframe, and the reports thereof are 
submitted and accepted in accordance with section 
505A(d)(3) of the Federal Food, Drug, and Cosmetic 
Act— 
‘‘(A) the periods for such biological product 
referred to in subsection (k)(7) are deemed to be 
4 years and 6 months rather than 4 years and 
12 years and 6 months rather than 12 years; 
and
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‘‘(B) if the biological product is designated 
under section 526 for a rare disease or condition, 
the period for such biological product referred to 
in section 527(a) is deemed to be 7 years and 6 
months rather than 7 years. 
‘‘(4) EXCEPTION.—The Secretary shall not ex-
tend a period referred to in paragraph (2)(A), (2)(B), 
(3)(A), or (3)(B) if the determination under section 
505A(d)(3) is made later than 9 months prior to the 
expiration of such period.’’. 
(2) 
STUDIES
REGARDING
PEDIATRIC
RE-
SEARCH.— 
(A) PROGRAM
FOR
PEDIATRIC
STUDY
OF 
DRUGS.—Subsection (a)(1) of section 409I of the 
Public Health Service Act (42 U.S.C. 284m) is 
amended by inserting ‘‘, biological products,’’ 
after ‘‘including drugs’’. 
(B) INSTITUTE OF MEDICINE STUDY.—Sec-
tion 505A(p) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355b(p)) is amended by 
striking paragraphs (4) and (5) and inserting 
the following: 
‘‘(4) review and assess the number and impor-
tance of biological products for children that are being 
tested as a result of the amendments made by the Bio-
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logics Price Competition and Innovation Act of 2009 
and the importance for children, health care pro-
viders, parents, and others of labeling changes made 
as a result of such testing; 
‘‘(5) review and assess the number, importance, 
and prioritization of any biological products that are 
not being tested for pediatric use; and 
‘‘(6) offer recommendations for ensuring pedi-
atric testing of biological products, including consid-
eration of any incentives, such as those provided 
under this section or section 351(m) of the Public 
Health Service Act.’’. 
(h) ORPHAN PRODUCTS.—If a reference product, as de-
fined in section 351 of the Public Health Service Act (42 
U.S.C. 262) (as amended by this Act) has been designated 
under section 526 of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360bb) for a rare disease or condition, a 
biological product seeking approval for such disease or con-
dition under subsection (k) of such section 351 as biosimilar 
to, or interchangeable with, such reference product may be 
licensed by the Secretary only after the expiration for such 
reference product of the later of— 
(1) the 7-year period described in section 527(a) 
of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 360cc(a)); and
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(2) the 12-year period described in subsection 
(k)(7) of such section 351. 
SEC. 7003. SAVINGS. 
(a) DETERMINATION.—The Secretary of the Treasury, 
in consultation with the Secretary of Health and Human 
Services, shall for each fiscal year determine the amount 
of savings to the Federal Government as a result of the en-
actment of this subtitle. 
(b) USE.—Notwithstanding any other provision of this 
subtitle (or an amendment made by this subtitle), the sav-
ings to the Federal Government generated as a result of the 
enactment of this subtitle shall be used for deficit reduction. 
Subtitle B—More Affordable Medi-
cines for Children and Under-
served Communities 
SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM. 
(a) EXPANSION OF COVERED ENTITIES RECEIVING 
DISCOUNTED PRICES.—Section 340B(a)(4) of the Public 
Health Service Act (42 U.S.C. 256b(a)(4)) is amended by 
adding at the end the following: 
‘‘(M) A children’s hospital excluded from the 
Medicare prospective payment system pursuant 
to section 1886(d)(1)(B)(iii) of the Social Secu-
rity Act, or a free-standing cancer hospital ex-
cluded from the Medicare prospective payment
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system pursuant to section 1886(d)(1)(B)(v) of 
the Social Security Act, that would meet the re-
quirements of subparagraph (L), including the 
disproportionate share adjustment percentage re-
quirement under clause (ii) of such subpara-
graph, if the hospital were a subsection (d) hos-
pital as defined by section 1886(d)(1)(B) of the 
Social Security Act. 
‘‘(N) An entity that is a critical access hos-
pital (as determined under section 1820(c)(2) of 
the Social Security Act), and that meets the re-
quirements of subparagraph (L)(i). 
‘‘(O) An entity that is a rural referral cen-
ter, as defined by section 1886(d)(5)(C)(i) of the 
Social Security Act, or a sole community hos-
pital, as defined by section 1886(d)(5)(C)(iii) of 
such Act, and that both meets the requirements 
of subparagraph (L)(i) and has a dispropor-
tionate share adjustment percentage equal to or 
greater than 8 percent.’’. 
(b) EXTENSION OF DISCOUNT TO INPATIENT DRUGS.— 
Section 340B of the Public Health Service Act (42 U.S.C. 
256b) is amended—
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(1) in paragraphs (2), (5), (7), and (9) of sub-
section (a), by striking ‘‘outpatient’’ each place it ap-
pears; and 
(2) in subsection (b)— 
(A) by striking ‘‘OTHER DEFINITION’’ and 
all that follows through ‘‘In this section’’ and in-
serting the following: ‘‘OTHER DEFINITIONS.— 
‘‘(1) IN GENERAL.—In this section’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) COVERED DRUG.—In this section, the term 
‘covered drug’— 
‘‘(A) means a covered outpatient drug (as 
defined in section 1927(k)(2) of the Social Secu-
rity Act); and 
‘‘(B) includes, notwithstanding paragraph 
(3)(A) of section 1927(k) of such Act, a drug 
used in connection with an inpatient or out-
patient service provided by a hospital described 
in subparagraph (L), (M), (N), or (O) of sub-
section (a)(4) that is enrolled to participate in 
the drug discount program under this section.’’. 
(c) PROHIBITION ON GROUP PURCHASING ARRANGE-
MENTS.—Section 340B(a) of the Public Health Service Act 
(42 U.S.C. 256b(a)) is amended—
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(1) in paragraph (4)(L)— 
(A) in clause (i), by adding ‘‘and’’ at the 
end; 
(B) in clause (ii), by striking ‘‘; and’’ and 
inserting a period; and 
(C) by striking clause (iii); and 
(2) in paragraph (5), as amended by subsection 
(b)— 
(A) by redesignating subparagraphs (C) 
and (D) as subparagraphs (D) and (E); respec-
tively; and 
(B) by inserting after subparagraph (B), 
the following: 
‘‘(C) PROHIBITION ON GROUP PURCHASING 
ARRANGEMENTS.— 
‘‘(i) IN
GENERAL.—A hospital de-
scribed in subparagraph (L), (M), (N), or 
(O) of paragraph (4) shall not obtain cov-
ered outpatient drugs through a group pur-
chasing organization or other group pur-
chasing arrangement, except as permitted or 
provided for pursuant to clauses (ii) or 
(iii).
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‘‘(ii) INPATIENT
DRUGS.—Clause (i) 
shall not apply to drugs purchased for in-
patient use. 
‘‘(iii) 
EXCEPTIONS.—The 
Secretary 
shall establish reasonable exceptions to 
clause (i)— 
‘‘(I) with respect to a covered out-
patient drug that is unavailable to be 
purchased through the program under 
this section due to a drug shortage 
problem, manufacturer noncompliance, 
or any other circumstance beyond the 
hospital’s control; 
‘‘(II) to facilitate generic substi-
tution when a generic covered out-
patient drug is available at a lower 
price; or 
‘‘(III) to reduce in other ways the 
administrative burdens of managing 
both inventories of drugs subject to this 
section and inventories of drugs that 
are not subject to this section, so long 
as the exceptions do not create a dupli-
cate discount problem in violation of
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subparagraph (A) or a diversion prob-
lem in violation of subparagraph (B). 
‘‘(iv) 
PURCHASING
ARRANGEMENTS 
FOR
INPATIENT
DRUGS.—The Secretary 
shall ensure that a hospital described in 
subparagraph (L), (M), (N), or (O) of sub-
section (a)(4) that is enrolled to participate 
in the drug discount program under this 
section shall have multiple options for pur-
chasing covered drugs for inpatients, in-
cluding by utilizing a group purchasing or-
ganization or other group purchasing ar-
rangement, establishing and utilizing its 
own group purchasing program, purchasing 
directly from a manufacturer, and any 
other purchasing arrangements that the Sec-
retary determines is appropriate to ensure 
access to drug discount pricing under this 
section for inpatient drugs taking into ac-
count the particular needs of small and 
rural hospitals.’’. 
(d) MEDICAID CREDITS ON INPATIENT DRUGS.—Sec-
tion 340B of the Public Health Service Act (42 U.S.C. 256b) 
is amended by striking subsection (c) and inserting the fol-
lowing:
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‘‘(c) MEDICAID CREDIT.—Not later than 90 days after 
the date of filing of the hospital’s most recently filed Medi-
care cost report, the hospital shall issue a credit as deter-
mined by the Secretary to the State Medicaid program for 
inpatient covered drugs provided to Medicaid recipients.’’. 
(e) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendments made by 
this section and section 7102 shall take effect on Jan-
uary 1, 2010, and shall apply to drugs purchased on 
or after January 1, 2010. 
(2) EFFECTIVENESS.—The amendments made by 
this section and section 7102 shall be effective and 
shall be taken into account in determining whether a 
manufacturer is deemed to meet the requirements of 
section 340B(a) of the Public Health Service Act (42 
U.S.C. 256b(a)), notwithstanding any other provision 
of law. 
SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY. 
(a) INTEGRITY IMPROVEMENTS.—Subsection (d) of sec-
tion 340B of the Public Health Service Act (42 U.S.C. 256b) 
is amended to read as follows: 
‘‘(d) IMPROVEMENTS IN PROGRAM INTEGRITY.— 
‘‘(1) MANUFACTURER COMPLIANCE.— 
‘‘(A) IN GENERAL.—From amounts appro-
priated under paragraph (4), the Secretary shall
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provide for improvements in compliance by 
manufacturers with the requirements of this sec-
tion in order to prevent overcharges and other 
violations of the discounted pricing requirements 
specified in this section. 
‘‘(B) IMPROVEMENTS.—The improvements 
described in subparagraph (A) shall include the 
following: 
‘‘(i) The development of a system to en-
able the Secretary to verify the accuracy of 
ceiling prices calculated by manufacturers 
under subsection (a)(1) and charged to cov-
ered entities, which shall include the fol-
lowing: 
‘‘(I) Developing and publishing 
through an appropriate policy or regu-
latory 
issuance, 
precisely 
defined 
standards and methodology for the cal-
culation of ceiling prices under such 
subsection. 
‘‘(II) Comparing regularly the 
ceiling prices calculated by the Sec-
retary with the quarterly pricing data 
that is reported by manufacturers to 
the Secretary.
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‘‘(III) Performing spot checks of 
sales transactions by covered entities. 
‘‘(IV) Inquiring into the cause of 
any pricing discrepancies that may be 
identified and either taking, or requir-
ing manufacturers to take, such correc-
tive action as is appropriate in re-
sponse to such price discrepancies. 
‘‘(ii) The establishment of procedures 
for manufacturers to issue refunds to cov-
ered entities in the event that there is an 
overcharge by the manufacturers, including 
the following: 
‘‘(I) Providing the Secretary with 
an explanation of why and how the 
overcharge occurred, how the refunds 
will be calculated, and to whom the re-
funds will be issued. 
‘‘(II) Oversight by the Secretary 
to ensure that the refunds are issued 
accurately and within a reasonable pe-
riod of time, both in routine instances 
of retroactive adjustment to relevant 
pricing data and exceptional cir-
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cumstances such as erroneous or inten-
tional overcharging for covered drugs. 
‘‘(iii) The provision of access through 
the Internet website of the Department of 
Health and Human Services to the applica-
ble ceiling prices for covered drugs as cal-
culated and verified by the Secretary in ac-
cordance with this section, in a manner 
(such as through the use of password protec-
tion) that limits such access to covered enti-
ties and adequately assures security and 
protection of privileged pricing data from 
unauthorized re-disclosure. 
‘‘(iv) The development of a mechanism 
by which— 
‘‘(I) rebates and other discounts 
provided by manufacturers to other 
purchasers subsequent to the sale of 
covered drugs to covered entities are re-
ported to the Secretary; and 
‘‘(II) appropriate credits and re-
funds are issued to covered entities if 
such discounts or rebates have the effect 
of lowering the applicable ceiling price
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for the relevant quarter for the drugs 
involved. 
‘‘(v) Selective auditing of manufactur-
ers and wholesalers to ensure the integrity 
of the drug discount program under this 
section. 
‘‘(vi) The imposition of sanctions in 
the form of civil monetary penalties, 
which— 
‘‘(I) shall be assessed according to 
standards established in regulations to 
be promulgated by the Secretary not 
later than 180 days after the date of 
enactment of the Patient Protection 
and Affordable Care Act; 
‘‘(II) shall not exceed $5,000 for 
each instance of overcharging a covered 
entity that may have occurred; and 
‘‘(III) shall apply to any manu-
facturer with an agreement under this 
section that knowingly and inten-
tionally charges a covered entity a 
price for purchase of a drug that ex-
ceeds the maximum applicable price 
under subsection (a)(1).
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‘‘(2) COVERED ENTITY COMPLIANCE.— 
‘‘(A) IN GENERAL.—From amounts appro-
priated under paragraph (4), the Secretary shall 
provide for improvements in compliance by cov-
ered entities with the requirements of this section 
in order to prevent diversion and violations of 
the duplicate discount provision and other re-
quirements specified under subsection (a)(5). 
‘‘(B) IMPROVEMENTS.—The improvements 
described in subparagraph (A) shall include the 
following: 
‘‘(i) The development of procedures to 
enable and require covered entities to regu-
larly update (at least annually) the infor-
mation on the Internet website of the De-
partment of Health and Human Services 
relating to this section. 
‘‘(ii) The development of a system for 
the Secretary to verify the accuracy of in-
formation regarding covered entities that is 
listed on the website described in clause (i). 
‘‘(iii) The development of more detailed 
guidance describing methodologies and op-
tions available to covered entities for billing 
covered drugs to State Medicaid agencies in
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a manner that avoids duplicate discounts 
pursuant to subsection (a)(5)(A). 
‘‘(iv) The establishment of a single, 
universal, and standardized identification 
system by which each covered entity site can 
be identified by manufacturers, distributors, 
covered entities, and the Secretary for pur-
poses of facilitating the ordering, pur-
chasing, and delivery of covered drugs 
under this section, including the processing 
of chargebacks for such drugs. 
‘‘(v) The imposition of sanctions, in 
appropriate cases as determined by the Sec-
retary, additional to those to which covered 
entities 
are 
subject 
under 
subsection 
(a)(5)(E), through one or more of the fol-
lowing actions: 
‘‘(I) Where a covered entity know-
ingly and intentionally violates sub-
section (a)(5)(B), the covered entity 
shall be required to pay a monetary 
penalty to a manufacturer or manufac-
turers in the form of interest on sums 
for which the covered entity is found 
liable under subsection (a)(5)(E), such
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interest to be compounded monthly and 
equal to the current short term interest 
rate as determined by the Federal Re-
serve for the time period for which the 
covered entity is liable. 
‘‘(II) Where the Secretary deter-
mines 
a 
violation 
of 
subsection 
(a)(5)(B) was systematic and egregious 
as well as knowing and intentional, re-
moving the covered entity from the 
drug discount program under this sec-
tion and disqualifying the entity from 
re-entry into such program for a rea-
sonable period of time to be determined 
by the Secretary. 
‘‘(III) Referring matters to appro-
priate Federal authorities within the 
Food and Drug Administration, the 
Office of Inspector General of Depart-
ment of Health and Human Services, 
or other Federal agencies for consider-
ation of appropriate action under 
other Federal statutes, such as the Pre-
scription Drug Marketing Act (21 
U.S.C. 353).
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‘‘(3) ADMINISTRATIVE
DISPUTE
RESOLUTION 
PROCESS.— 
‘‘(A) IN
GENERAL.—Not later than 180 
days after the date of enactment of the Patient 
Protection and Affordable Care Act, the Sec-
retary shall promulgate regulations to establish 
and implement an administrative process for the 
resolution of claims by covered entities that they 
have been overcharged for drugs purchased under 
this section, and claims by manufacturers, after 
the conduct of audits as authorized by subsection 
(a)(5)(D), of violations of subsections (a)(5)(A) 
or (a)(5)(B), including appropriate procedures 
for the provision of remedies and enforcement of 
determinations made pursuant to such process 
through mechanisms and sanctions described in 
paragraphs (1)(B) and (2)(B). 
‘‘(B) DEADLINES AND PROCEDURES.—Reg-
ulations promulgated by the Secretary under 
subparagraph (A) shall— 
‘‘(i) designate or establish a decision- 
making official or decision-making body 
within the Department of Health and 
Human Services to be responsible for re-
viewing and finally resolving claims by cov-
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ered entities that they have been charged 
prices for covered drugs in excess of the ceil-
ing price described in subsection (a)(1), and 
claims by manufacturers that violations of 
subsection (a)(5)(A) or (a)(5)(B) have oc-
curred; 
‘‘(ii) establish such deadlines and pro-
cedures as may be necessary to ensure that 
claims shall be resolved fairly, efficiently, 
and expeditiously; 
‘‘(iii) establish procedures by which a 
covered entity may discover and obtain such 
information and documents from manufac-
turers and third parties as may be relevant 
to demonstrate the merits of a claim that 
charges for a manufacturer’s product have 
exceeded the applicable ceiling price under 
this section, and may submit such docu-
ments and information to the administra-
tive official or body responsible for adjudi-
cating such claim; 
‘‘(iv) require that a manufacturer con-
duct an audit of a covered entity pursuant 
to subsection (a)(5)(D) as a prerequisite to
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initiating administrative dispute resolution 
proceedings against a covered entity; 
‘‘(v) permit the official or body des-
ignated under clause (i), at the request of a 
manufacturer or manufacturers, to consoli-
date claims brought by more than one man-
ufacturer against the same covered entity 
where, in the judgment of such official or 
body, consolidation is appropriate and con-
sistent with the goals of fairness and econ-
omy of resources; and 
‘‘(vi) include provisions and proce-
dures to permit multiple covered entities to 
jointly assert claims of overcharges by the 
same manufacturer for the same drug or 
drugs in one administrative proceeding, 
and permit such claims to be asserted on be-
half of covered entities by associations or or-
ganizations representing the interests of 
such covered entities and of which the cov-
ered entities are members. 
‘‘(C) FINALITY OF ADMINISTRATIVE RESO-
LUTION.—The administrative resolution of a 
claim or claims under the regulations promul-
gated under subparagraph (A) shall be a final
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agency decision and shall be binding upon the 
parties involved, unless invalidated by an order 
of a court of competent jurisdiction. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to carry out 
this subsection, such sums as may be necessary for fis-
cal year 2010 and each succeeding fiscal year.’’. 
(b) CONFORMING AMENDMENTS.—Section 340B(a) of 
the Public Health Service Act (42 U.S.C. 256b(a)) is 
amended— 
(1) in subsection (a)(1), by adding at the end the 
following: ‘‘Each such agreement shall require that the 
manufacturer furnish the Secretary with reports, on 
a quarterly basis, of the price for each covered drug 
subject to the agreement that, according to the manu-
facturer, represents the maximum price that covered 
entities may permissibly be required to pay for the 
drug (referred to in this section as the ‘ceiling price’), 
and shall require that the manufacturer offer each 
covered entity covered drugs for purchase at or below 
the applicable ceiling price if such drug is made 
available to any other purchaser at any price.’’; and 
(2) in the first sentence of subsection (a)(5)(E), 
as redesignated by section 7101(c), by inserting ‘‘after
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audit as described in subparagraph (D) and’’ after 
‘‘finds,’’. 
SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON 
IMPROVING THE 340B PROGRAM. 
(a) REPORT.—Not later than 18 months after the date 
of enactment of this Act, the Comptroller General of the 
United States shall submit to Congress a report that exam-
ines whether those individuals served by the covered entities 
under the program under section 340B of the Public Health 
Service Act (42 U.S.C. 256b) (referred to in this section 
as the ‘‘340B program’’) are receiving optimal health care 
services. 
(b) RECOMMENDATIONS.—The report under subsection 
(a) shall include recommendations on the following: 
(1) Whether the 340B program should be ex-
panded since it is anticipated that the 47,000,000 in-
dividuals who are uninsured as of the date of enact-
ment of this Act will have health care coverage once 
this Act is implemented. 
(2) Whether mandatory sales of certain products 
by the 340B program could hinder patients access to 
those therapies through any provider. 
(3) Whether income from the 340B program is 
being used by the covered entities under the program 
to further the program objectives.
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TITLE VIII—CLASS ACT 
SEC. 8001. SHORT TITLE OF TITLE. 
This title may be cited as the ‘‘Community Living As-
sistance Services and Supports Act’’ or the ‘‘CLASS Act’’. 
SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY IN-
SURANCE PROGRAM FOR PURCHASING COM-
MUNITY LIVING ASSISTANCE SERVICES AND 
SUPPORT. 
(a) ESTABLISHMENT OF CLASS PROGRAM.— 
(1) IN GENERAL.—The Public Health Service Act 
(42 U.S.C. 201 et seq.), as amended by section 
4302(a), is amended by adding at the end the fol-
lowing: 
‘‘TITLE XXXII—COMMUNITY LIV-
ING 
ASSISTANCE 
SERVICES 
AND SUPPORTS 
‘‘SEC. 3201. PURPOSE. 
‘‘The purpose of this title is to establish a national vol-
untary insurance program for purchasing community liv-
ing assistance services and supports in order to— 
‘‘(1) provide individuals with functional limita-
tions with tools that will allow them to maintain 
their personal and financial independence and live in 
the community through a new financing strategy for 
community living assistance services and supports;
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‘‘(2) establish an infrastructure that will help 
address the Nation’s community living assistance 
services and supports needs; 
‘‘(3) alleviate burdens on family caregivers; and 
‘‘(4) address institutional bias by providing a fi-
nancing mechanism that supports personal choice and 
independence to live in the community. 
‘‘SEC. 3202. DEFINITIONS. 
‘‘In this title: 
‘‘(1) ACTIVE ENROLLEE.—The term ‘active en-
rollee’ means an individual who is enrolled in the 
CLASS program in accordance with section 3204 and 
who has paid any premiums due to maintain such 
enrollment. 
‘‘(2) ACTIVELY EMPLOYED.—The term ‘actively 
employed’ means an individual who— 
‘‘(A) is reporting for work at the individ-
ual’s usual place of employment or at another lo-
cation to which the individual is required to 
travel because of the individual’s employment (or 
in the case of an individual who is a member of 
the uniformed services, is on active duty and is 
physically able to perform the duties of the indi-
vidual’s position); and
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‘‘(B) is able to perform all the usual and 
customary duties of the individual’s employment 
on the individual’s regular work schedule. 
‘‘(3) ACTIVITIES
OF
DAILY
LIVING.—The term 
‘activities of daily living’ means each of the following 
activities specified in section 7702B(c)(2)(B) of the 
Internal Revenue Code of 1986: 
‘‘(A) Eating. 
‘‘(B) Toileting. 
‘‘(C) Transferring. 
‘‘(D) Bathing. 
‘‘(E) Dressing. 
‘‘(F) Continence. 
‘‘(4) CLASS PROGRAM.—The term ‘CLASS pro-
gram’ means the program established under this title. 
‘‘(5) ELIGIBILITY
ASSESSMENT
SYSTEM.—The 
term ‘Eligibility Assessment System’ means the entity 
established by the Secretary under section 3205(a)(2) 
to make functional eligibility determinations for the 
CLASS program. 
‘‘(6) ELIGIBLE BENEFICIARY.— 
‘‘(A) IN GENERAL.—The term ‘eligible bene-
ficiary’ means any individual who is an active 
enrollee in the CLASS program and, as of the 
date described in subparagraph (B)—
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‘‘(i) has paid premiums for enrollment 
in such program for at least 60 months; 
‘‘(ii) has earned, with respect to at 
least 3 calendar years that occur during the 
first 60 months for which the individual has 
paid premiums for enrollment in the pro-
gram, at least an amount equal to the 
amount of wages and self-employment in-
come which an individual must have in 
order to be credited with a quarter of cov-
erage under section 213(d) of the Social Se-
curity Act for the year; and 
‘‘(iii) has paid premiums for enroll-
ment in such program for at least 24 con-
secutive months, if a lapse in premium pay-
ments of more than 3 months has occurred 
during the period that begins on the date of 
the individual’s enrollment and ends on the 
date of such determination. 
‘‘(B) DATE DESCRIBED.—For purposes of 
subparagraph (A), the date described in this sub-
paragraph is the date on which the individual is 
determined to have a functional limitation de-
scribed in section 3203(a)(1)(C) that is expected
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to last for a continuous period of more than 90 
days. 
‘‘(C) REGULATIONS.—The Secretary shall 
promulgate regulations specifying exceptions to 
the minimum earnings requirements under sub-
paragraph (A)(ii) for purposes of being consid-
ered an eligible beneficiary for certain popu-
lations. 
‘‘(7) HOSPITAL; 
NURSING
FACILITY; 
INTER-
MEDIATE
CARE
FACILITY
FOR
THE
MENTALLY
RE-
TARDED; INSTITUTION FOR MENTAL DISEASES.—The 
terms ‘hospital’, ‘nursing facility’, ‘intermediate care 
facility for the mentally retarded’, and ‘institution for 
mental diseases’ have the meanings given such terms 
for purposes of Medicaid. 
‘‘(8) CLASS INDEPENDENCE
ADVISORY
COUN-
CIL.—The term ‘CLASS Independence Advisory 
Council’ or ‘Council’ means the Advisory Council es-
tablished under section 3207 to advise the Secretary. 
‘‘(9) CLASS INDEPENDENCE BENEFIT PLAN.— 
The term ‘CLASS Independence Benefit Plan’ means 
the benefit plan developed and designated by the Sec-
retary in accordance with section 3203.
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‘‘(10) CLASS INDEPENDENCE FUND.—The term 
‘CLASS Independence Fund’ or ‘Fund’ means the 
fund established under section 3206. 
‘‘(11) MEDICAID.—The term ‘Medicaid’ means 
the program established under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
‘‘(12) POVERTY LINE.—The term ‘poverty line’ 
has the meaning given that term in section 2110(c)(5) 
of the Social Security Act (42 U.S.C. 1397jj(c)(5)). 
‘‘(13) PROTECTION AND ADVOCACY SYSTEM.—The 
term ‘Protection and Advocacy System’ means the 
system for each State established under section 143 of 
the Developmental Disabilities Assistance and Bill of 
Rights Act of 2000 (42 U.S.C. 15043). 
‘‘SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN. 
‘‘(a) PROCESS FOR DEVELOPMENT.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with appropriate actuaries and other experts, 
shall develop at least 3 actuarially sound benefit 
plans as alternatives for consideration for designation 
by the Secretary as the CLASS Independence Benefit 
Plan under which eligible beneficiaries shall receive 
benefits under this title. Each of the plan alternatives 
developed shall be designed to provide eligible bene-
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ficiaries with the benefits described in section 3205 
consistent with the following requirements: 
‘‘(A) PREMIUMS.— 
‘‘(i) IN GENERAL.—Beginning with the 
first year of the CLASS program, and for 
each year thereafter, subject to clauses (ii) 
and (iii), the Secretary shall establish all 
premiums to be paid by enrollees for the 
year based on an actuarial analysis of the 
75-year costs of the program that ensures 
solvency throughout such 75-year period. 
‘‘(ii) NOMINAL PREMIUM FOR POOREST 
INDIVIDUALS AND FULL-TIME STUDENTS.— 
‘‘(I) IN GENERAL.—The monthly 
premium for enrollment in the CLASS 
program shall not exceed the applicable 
dollar amount per month determined 
under subclause (II) for— 
‘‘(aa) any individual whose 
income does not exceed the poverty 
line; and 
‘‘(bb) any individual who 
has not attained age 22, and is 
actively employed during any pe-
riod in which the individual is a
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full-time student (as determined 
by the Secretary). 
‘‘(II) 
APPLICABLE
DOLLAR 
AMOUNT.—The 
applicable 
dollar 
amount described in this subclause is 
the amount equal to $5, increased by 
the percentage increase in the con-
sumer price index for all urban con-
sumers (U.S. city average) for each 
year occurring after 2009 and before 
such year. 
‘‘(iii) CLASS INDEPENDENCE FUND RE-
SERVES.—At such time as the CLASS pro-
gram has been in operation for 10 years, 
the Secretary shall establish all premiums 
to be paid by enrollees for the year based on 
an actuarial analysis that accumulated re-
serves in the CLASS Independence Fund 
would not decrease in that year. At such 
time as the Secretary determines the 
CLASS program demonstrates a sustained 
ability to finance expected yearly expenses 
with expected yearly premiums and interest 
credited to the CLASS Independence Fund, 
the Secretary may decrease the required
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amount of CLASS Independence Fund re-
serves. 
‘‘(B) VESTING PERIOD.—A 5-year vesting 
period for eligibility for benefits. 
‘‘(C) BENEFIT TRIGGERS.—A benefit trigger 
for provision of benefits that requires a deter-
mination that an individual has a functional 
limitation, as certified by a licensed health care 
practitioner, described in any of the following 
clauses that is expected to last for a continuous 
period of more than 90 days: 
‘‘(i) The individual is determined to be 
unable to perform at least the minimum 
number (which may be 2 or 3) of activities 
of daily living as are required under the 
plan for the provision of benefits without 
substantial assistance (as defined by the 
Secretary) from another individual. 
‘‘(ii) The individual requires substan-
tial supervision to protect the individual 
from threats to health and safety due to sub-
stantial cognitive impairment. 
‘‘(iii) The individual has a level of 
functional limitation similar (as deter-
mined under regulations prescribed by the
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Secretary) to the level of functional limita-
tion described in clause (i) or (ii). 
‘‘(D) CASH BENEFIT.—Payment of a cash 
benefit that satisfies the following requirements: 
‘‘(i) MINIMUM
REQUIRED
AMOUNT.— 
The benefit amount provides an eligible ben-
eficiary with not less than an average of 
$50 per day (as determined based on the 
reasonably expected distribution of bene-
ficiaries receiving benefits at various benefit 
levels). 
‘‘(ii) AMOUNT SCALED TO FUNCTIONAL 
ABILITY.—The benefit amount is varied 
based on a scale of functional ability, with 
not less than 2, and not more than 6, ben-
efit level amounts. 
‘‘(iii) DAILY OR WEEKLY.—The benefit 
is paid on a daily or weekly basis. 
‘‘(iv) NO
LIFETIME
OR
AGGREGATE 
LIMIT.—The benefit is not subject to any 
lifetime or aggregate limit. 
‘‘(E) COORDINATION WITH SUPPLEMENTAL 
COVERAGE
OBTAINED
THROUGH
THE
EX-
CHANGE.—The benefits allow for coordination 
with any supplemental coverage purchased
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through an Exchange established under section 
1311 of the Patient Protection and Affordable 
Care Act. 
‘‘(2) REVIEW
AND
RECOMMENDATION
BY
THE 
CLASS
INDEPENDENCE
ADVISORY
COUNCIL.—The 
CLASS Independence Advisory Council shall— 
‘‘(A) evaluate the alternative benefit plans 
developed under paragraph (1); and 
‘‘(B) recommend for designation as the 
CLASS Independence Benefit Plan for offering 
to the public the plan that the Council deter-
mines best balances price and benefits to meet 
enrollees’ needs in an actuarially sound manner, 
while optimizing the probability of the long-term 
sustainability of the CLASS program. 
‘‘(3) DESIGNATION
BY
THE
SECRETARY.—Not 
later than October 1, 2012, the Secretary, taking into 
consideration the recommendation of the CLASS 
Independence Advisory Council under paragraph 
(2)(B), shall designate a benefit plan as the CLASS 
Independence Benefit Plan. The Secretary shall pub-
lish such designation, along with details of the plan 
and the reasons for the selection by the Secretary, in 
a final rule that allows for a period of public com-
ment.
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‘‘(b) ADDITIONAL PREMIUM REQUIREMENTS.— 
‘‘(1) ADJUSTMENT OF PREMIUMS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraphs (B), (C), (D), and (E), the 
amount of the monthly premium determined for 
an individual upon such individual’s enrollment 
in the CLASS program shall remain the same 
for as long as the individual is an active enrollee 
in the program. 
‘‘(B) RECALCULATED
PREMIUM
IF
RE-
QUIRED FOR PROGRAM SOLVENCY.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), if the Secretary determines, based on 
the most recent report of the Board of 
Trustees of the CLASS Independence Fund, 
the advice of the CLASS Independence Ad-
visory Council, and the annual report of the 
Inspector General of the Department of 
Health and Human Services, and waste, 
fraud, and abuse, or such other information 
as the Secretary determines appropriate, 
that the monthly premiums and income to 
the CLASS Independence Fund for a year 
are projected to be insufficient with respect 
to the 20-year period that begins with that
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HR 3590 EAS/PP 
year, the Secretary shall adjust the monthly 
premiums for individuals enrolled in the 
CLASS program as necessary (but main-
taining a nominal premium for enrollees 
whose income is below the poverty line or 
who are full-time students actively em-
ployed). 
‘‘(ii) EXEMPTION
FROM
INCREASE.— 
Any increase in a monthly premium im-
posed as result of a determination described 
in clause (i) shall not apply with respect to 
the monthly premium of any active enrollee 
who— 
‘‘(I) has attained age 65; 
‘‘(II) has paid premiums for en-
rollment in the program for at least 20 
years; and 
‘‘(III) is not actively employed. 
‘‘(C) RECALCULATED
PREMIUM
IF
RE-
ENROLLMENT
AFTER
MORE
THAN
A
3-MONTH 
LAPSE.— 
‘‘(i) IN GENERAL.—The reenrollment of 
an individual after a 90-day period during 
which the individual failed to pay the 
monthly premium required to maintain the
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individual’s enrollment in the CLASS pro-
gram shall be treated as an initial enroll-
ment for purposes of age-adjusting the pre-
mium for enrollment in the program. 
‘‘(ii) CREDIT FOR PRIOR MONTHS IF 
REENROLLED WITHIN 5 YEARS.—An indi-
vidual who reenrolls in the CLASS program 
after such a 90-day period and before the 
end of the 5-year period that begins with 
the first month for which the individual 
failed to pay the monthly premium required 
to maintain the individual’s enrollment in 
the program shall be— 
‘‘(I) credited with any months of 
paid premiums that accrued prior to 
the individual’s lapse in enrollment; 
and 
‘‘(II) notwithstanding the total 
amount of any such credited months, 
required 
to 
satisfy 
section 
3202(6)(A)(ii) before being eligible to 
receive benefits. 
‘‘(D) NO LONGER STATUS AS A FULL-TIME 
STUDENT.—An individual subject to a nominal 
premium on the basis of being described in sub-
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section (a)(1)(A)(ii)(I)(bb) who ceases to be de-
scribed in that subsection, beginning with the 
first month following the month in which the in-
dividual ceases to be so described, shall be subject 
to the same monthly premium as the monthly 
premium that applies to an individual of the 
same age who first enrolls in the program under 
the most similar circumstances as the individual 
(such as the first year of eligibility for enroll-
ment in the program or in a subsequent year). 
‘‘(E) PENALTY FOR REENOLLMENT AFTER 5- 
YEAR LAPSE.—In the case of an individual who 
reenrolls in the CLASS program after the end of 
the 5-year period described in subparagraph 
(C)(ii), the monthly premium required for the 
individual shall be the age-adjusted premium 
that would be applicable to an initially enrolling 
individual who is the same age as the reenrolling 
individual, increased by the greater of— 
‘‘(i) an amount that the Secretary de-
termines is actuarially sound for each 
month that occurs during the period that 
begins with the first month for which the 
individual failed to pay the monthly pre-
mium required to maintain the individual’s
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enrollment in the CLASS program and 
ends with the month preceding the month in 
which the reenollment is effective; or 
‘‘(ii) 1 percent of the applicable age- 
adjusted premium for each such month oc-
curring in such period. 
‘‘(2) ADMINISTRATIVE
EXPENSES.—In deter-
mining the monthly premiums for the CLASS pro-
gram the Secretary may factor in costs for admin-
istering the program, not to exceed for any year in 
which the program is in effect under this title, an 
amount equal to 3 percent of all premiums paid dur-
ing the year. 
‘‘(3) NO
UNDERWRITING
REQUIREMENTS.—No 
underwriting (other than on the basis of age in ac-
cordance with subparagraphs (D) and (E) of para-
graph (1)) shall be used to— 
‘‘(A) determine the monthly premium for 
enrollment in the CLASS program; or 
‘‘(B) prevent an individual from enrolling 
in the program. 
‘‘(c) SELF-ATTESTATION AND VERIFICATION OF IN-
COME.—The Secretary shall establish procedures to— 
‘‘(1) permit an individual who is eligible for the 
nominal 
premium 
required 
under 
subsection
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(a)(1)(A)(ii), as part of their automatic enrollment in 
the CLASS program, to self-attest that their income 
does not exceed the poverty line or that their status 
as a full-time student who is actively employed; 
‘‘(2) verify, using procedures similar to the pro-
cedures used by the Commissioner of Social Security 
under section 1631(e)(1)(B)(ii) of the Social Security 
Act and consistent with the requirements applicable 
to the conveyance of data and information under sec-
tion 1942 of such Act, the validity of such self-attesta-
tion; and 
‘‘(3) require an individual to confirm, on at 
least an annual basis, that their income does not ex-
ceed the poverty line or that they continue to main-
tain such status. 
‘‘SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIRE-
MENTS. 
‘‘(a) AUTOMATIC ENROLLMENT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), the 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish procedures under which each 
individual described in subsection (c) may be auto-
matically enrolled in the CLASS program by an em-
ployer of such individual in the same manner as an 
employer may elect to automatically enroll employees
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in a plan under section 401(k), 403(b), or 457 of the 
Internal Revenue Code of 1986. 
‘‘(2) 
ALTERNATIVE
ENROLLMENT
PROCE-
DURES.—The procedures established under paragraph 
(1) shall provide for an alternative enrollment process 
for an individual described in subsection (c) in the 
case of such an individual— 
‘‘(A) who is self-employed; 
‘‘(B) who has more than 1 employer; or 
‘‘(C) whose employer does not elect to par-
ticipate in the automatic enrollment process es-
tablished by the Secretary. 
‘‘(3) ADMINISTRATION.— 
‘‘(A) IN GENERAL.—The Secretary and the 
Secretary of the Treasury shall, by regulation, 
establish procedures to ensure that an individual 
is not automatically enrolled in the CLASS pro-
gram by more than 1 employer. 
‘‘(B) FORM.—Enrollment in the CLASS 
program shall be made in such manner as the 
Secretary may prescribe in order to ensure ease 
of administration. 
‘‘(b) ELECTION
TO OPT-OUT.—An individual de-
scribed in subsection (c) may elect to waive enrollment in 
the CLASS program at any time in such form and manner
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as the Secretary and the Secretary of the Treasury shall 
prescribe. 
‘‘(c) INDIVIDUAL DESCRIBED.—For purposes of enroll-
ing in the CLASS program, an individual described in this 
paragraph is an individual— 
‘‘(1) who has attained age 18; 
‘‘(2) who— 
‘‘(A) receives wages on which there is im-
posed a tax under section 3201(a) of the Internal 
Revenue Code of 1986; or 
‘‘(B) derives self-employment income on 
which there is imposed a tax under section 
1401(a) of the Internal Revenue Code of 1986; 
‘‘(3) who is actively employed; and 
‘‘(4) who is not— 
‘‘(A) a patient in a hospital or nursing fa-
cility, an intermediate care facility for the men-
tally retarded, or an institution for mental dis-
eases and receiving medical assistance under 
Medicaid; or 
‘‘(B) confined in a jail, prison, other penal 
institution or correctional facility, or by court 
order pursuant to conviction of a criminal of-
fense or in connection with a verdict or finding
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described in section 202(x)(1)(A)(ii) of the Social 
Security Act (42 U.S.C. 402(x)(1)(A)(ii)). 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed as requiring an active enrollee to con-
tinue to satisfy subparagraph (B) or (C) of subsection (c)(1) 
in order to maintain enrollment in the CLASS program. 
‘‘(e) PAYMENT.— 
‘‘(1) PAYROLL DEDUCTION.—An amount equal to 
the monthly premium for the enrollment in the 
CLASS program of an individual shall be deducted 
from the wages or self-employment income of such in-
dividual in accordance with such procedures as the 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish for employers who elect to 
deduct and withhold such premiums on behalf of en-
rolled employees. 
‘‘(2) ALTERNATIVE PAYMENT MECHANISM.—The 
Secretary, in coordination with the Secretary of the 
Treasury, shall establish alternative procedures for the 
payment of monthly premiums by an individual en-
rolled in the CLASS program— 
‘‘(A) who does not have an employer who 
elects to deduct and withhold premiums in ac-
cordance with subparagraph (A); or
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‘‘(B) who does not earn wages or derive self- 
employment income. 
‘‘(f) TRANSFER OF PREMIUMS COLLECTED.— 
‘‘(1) IN GENERAL.—During each calendar year 
the Secretary of the Treasury shall deposit into the 
CLASS Independence Fund a total amount equal, in 
the aggregate, to 100 percent of the premiums col-
lected during that year. 
‘‘(2) TRANSFERS
BASED
ON
ESTIMATES.—The 
amount deposited pursuant to paragraph (1) shall be 
transferred in at least monthly payments to the 
CLASS Independence Fund on the basis of estimates 
by the Secretary and certified to the Secretary of the 
Treasury of the amounts collected in accordance with 
subparagraphs (A) and (B) of paragraph (5). Proper 
adjustments shall be made in amounts subsequently 
transferred to the Fund to the extent prior estimates 
were in excess of, or were less than, actual amounts 
collected. 
‘‘(g) OTHER ENROLLMENT AND DISENROLLMENT OP-
PORTUNITIES.—The Secretary, in coordination with the 
Secretary of the Treasury, shall establish procedures under 
which— 
‘‘(1) an individual who, in the year of the indi-
vidual’s initial eligibility to enroll in the CLASS
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program, has elected to waive enrollment in the pro-
gram, is eligible to elect to enroll in the program, in 
such form and manner as the Secretaries shall estab-
lish, only during an open enrollment period estab-
lished by the Secretaries that is specific to the indi-
vidual and that may not occur more frequently than 
biennially after the date on which the individual first 
elected to waive enrollment in the program; and 
‘‘(2) an individual shall only be permitted to 
disenroll from the program (other than for non-
payment 
of 
premiums) 
during 
an 
annual 
disenrollment period established by the Secretaries 
and in such form and manner as the Secretaries shall 
establish. 
‘‘SEC. 3205. BENEFITS. 
‘‘(a) DETERMINATION OF ELIGIBILITY.— 
‘‘(1) APPLICATION FOR RECEIPT OF BENEFITS.— 
The Secretary shall establish procedures under which 
an active enrollee shall apply for receipt of benefits 
under the CLASS Independence Benefit Plan. 
‘‘(2) ELIGIBILITY ASSESSMENTS.— 
‘‘(A) IN GENERAL.—Not later than January 
1, 2012, the Secretary shall— 
‘‘(i) establish an Eligibility Assessment 
System (other than a service with which the
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Commissioner of Social Security has en-
tered into an agreement, with respect to any 
State, to make disability determinations for 
purposes of title II or XVI of the Social Se-
curity Act) to provide for eligibility assess-
ments of active enrollees who apply for re-
ceipt of benefits; 
‘‘(ii) enter into an agreement with the 
Protection and Advocacy System for each 
State to provide advocacy services in ac-
cordance with subsection (d); and 
‘‘(iii) enter into an agreement with 
public and private entities to provide advice 
and assistance counseling in accordance 
with subsection (e). 
‘‘(B) REGULATIONS.—The Secretary shall 
promulgate regulations to develop an expedited 
nationally equitable eligibility determination 
process, as certified by a licensed health care 
practitioner, an appeals process, and a redeter-
mination process, as certified by a licensed 
health care practitioner, including whether an 
active enrollee is eligible for a cash benefit under 
the program and if so, the amount of the cash
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benefit (in accordance the sliding scale estab-
lished under the plan). 
‘‘(C) PRESUMPTIVE ELIGIBILITY FOR CER-
TAIN INSTITUTIONALIZED ENROLLEES PLANNING 
TO
DISCHARGE.—An active enrollee shall be 
deemed presumptively eligible if the enrollee— 
‘‘(i) has applied for, and attests is eli-
gible for, the maximum cash benefit avail-
able under the sliding scale established 
under the CLASS Independence Benefit 
Plan; 
‘‘(ii) is a patient in a hospital (but 
only if the hospitalization is for long-term 
care), nursing facility, intermediate care fa-
cility for the mentally retarded, or an insti-
tution for mental diseases; and 
‘‘(iii) is in the process of, or about to 
begin the process of, planning to discharge 
from the hospital, facility, or institution, or 
within 60 days from the date of discharge 
from the hospital, facility, or institution. 
‘‘(D) APPEALS.—The Secretary shall estab-
lish procedures under which an applicant for 
benefits under the CLASS Independence Benefit
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Plan shall be guaranteed the right to appeal an 
adverse determination. 
‘‘(b) BENEFITS.—An eligible beneficiary shall receive 
the following benefits under the CLASS Independence Ben-
efit Plan: 
‘‘(1) CASH BENEFIT.—A cash benefit established 
by the Secretary in accordance with the requirements 
of section 3203(a)(1)(D) that— 
‘‘(A) the first year in which beneficiaries re-
ceive the benefits under the plan, is not less than 
the average dollar amount specified in clause (i) 
of such section; and 
‘‘(B) for any subsequent year, is not less 
than the average per day dollar limit applicable 
under this subparagraph for the preceding year, 
increased by the percentage increase in the con-
sumer price index for all urban consumers (U.S. 
city average) over the previous year. 
‘‘(2) ADVOCACY SERVICES.—Advocacy services in 
accordance with subsection (d). 
‘‘(3) ADVICE
AND
ASSISTANCE
COUNSELING.— 
Advice and assistance counseling in accordance with 
subsection (e). 
‘‘(4) 
ADMINISTRATIVE
EXPENSES.—Advocacy 
services and advise and assistance counseling services
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under paragraphs (2) and (3) of this subsection shall 
be included as administrative expenses under section 
3203(b)(3). 
‘‘(c) PAYMENT OF BENEFITS.— 
‘‘(1) LIFE INDEPENDENCE ACCOUNT.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures for administering the provi-
sion of benefits to eligible beneficiaries under the 
CLASS Independence Benefit Plan, including 
the payment of the cash benefit for the bene-
ficiary into a Life Independence Account estab-
lished by the Secretary on behalf of each eligible 
beneficiary. 
‘‘(B) USE OF CASH BENEFITS.—Cash bene-
fits paid into a Life Independence Account of an 
eligible beneficiary shall be used to purchase 
nonmedical services and supports that the bene-
ficiary needs to maintain his or her independ-
ence at home or in another residential setting of 
their choice in the community, including (but 
not limited to) home modifications, assistive 
technology, accessible transportation, homemaker 
services, respite care, personal assistance services, 
home care aides, and nursing support. Nothing 
in the preceding sentence shall prevent an eligi-
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ble beneficiary from using cash benefits paid into 
a Life Independence Account for obtaining as-
sistance with decision making concerning med-
ical care, including the right to accept or refuse 
medical or surgical treatment and the right to 
formulate advance directives or other written in-
structions recognized under State law, such as a 
living will or durable power of attorney for 
health care, in the case that an injury or illness 
causes the individual to be unable to make health 
care decisions. 
‘‘(C) 
ELECTRONIC
MANAGEMENT
OF 
FUNDS.—The Secretary shall establish procedures 
for— 
‘‘(i) crediting an account established 
on behalf of a beneficiary with the bene-
ficiary’s cash daily benefit; 
‘‘(ii) allowing the beneficiary to access 
such account through debit cards; and 
‘‘(iii) accounting for withdrawals by 
the beneficiary from such account. 
‘‘(D) PRIMARY
PAYOR
RULES
FOR
BENE-
FICIARIES WHO ARE ENROLLED IN MEDICAID.— 
In the case of an eligible beneficiary who is en-
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rolled in Medicaid, the following payment rules 
shall apply: 
‘‘(i) 
INSTITUTIONALIZED
BENE-
FICIARY.—If the beneficiary is a patient in 
a hospital, nursing facility, intermediate 
care facility for the mentally retarded, or 
an institution for mental diseases, the bene-
ficiary shall retain an amount equal to 5 
percent of the beneficiary’s daily or weekly 
cash benefit (as applicable) (which shall be 
in addition to the amount of the bene-
ficiary’s personal needs allowance provided 
under Medicaid), and the remainder of such 
benefit shall be applied toward the facility’s 
cost of providing the beneficiary’s care, and 
Medicaid shall provide secondary coverage 
for such care. 
‘‘(ii) BENEFICIARIES RECEIVING HOME 
AND COMMUNITY-BASED SERVICES.— 
‘‘(I) 50 PERCENT OF BENEFIT RE-
TAINED BY BENEFICIARY.—Subject to 
subclause (II), if a beneficiary is re-
ceiving medical assistance under Med-
icaid for home and community based 
services, the beneficiary shall retain an
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amount equal to 50 percent of the bene-
ficiary’s daily or weekly cash benefit 
(as applicable), and the remainder of 
the daily or weekly cash benefit shall 
be applied toward the cost to the State 
of providing such assistance (and shall 
not be used to claim Federal matching 
funds under Medicaid), and Medicaid 
shall provide secondary coverage for 
the remainder of any costs incurred in 
providing such assistance. 
‘‘(II) REQUIREMENT
FOR
STATE 
OFFSET.—A State shall be paid the re-
mainder of a beneficiary’s daily or 
weekly cash benefit under subclause (I) 
only if the State home and community- 
based waiver under section 1115 of the 
Social Security Act (42 U.S.C. 1315) 
or subsection (c) or (d) of section 1915 
of such Act (42 U.S.C. 1396n), or the 
State plan amendment under sub-
section (i) of such section does not in-
clude a waiver of the requirements of 
section 1902(a)(1) of the Social Secu-
rity Act (relating to statewideness) or
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of section 1902(a)(10)(B) of such Act 
(relating to comparability) and the 
State offers at a minimum case man-
agement services, personal care serv-
ices, habilitation services, and respite 
care under such a waiver or State plan 
amendment. 
‘‘(III) DEFINITION OF HOME AND 
COMMUNITY-BASED SERVICES.—In this 
clause, the term ‘home and community- 
based services’ means any services 
which may be offered under a home 
and community-based waiver author-
ized for a State under section 1115 of 
the Social Security Act (42 U.S.C. 
1315) or subsection (c) or (d) of section 
1915 of such Act (42 U.S.C. 1396n) or 
under a State plan amendment under 
subsection (i) of such section. 
‘‘(iii) BENEFICIARIES
ENROLLED
IN 
PROGRAMS
OF
ALL-INCLUSIVE
CARE
FOR 
THE ELDERLY (PACE).— 
‘‘(I) IN
GENERAL.—Subject to 
subclause (II), if a beneficiary is re-
ceiving medical assistance under Med-
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icaid for PACE program services 
under section 1934 of the Social Secu-
rity Act (42 U.S.C. 1396u–4), the ben-
eficiary shall retain an amount equal 
to 50 percent of the beneficiary’s daily 
or weekly cash benefit (as applicable), 
and the remainder of the daily or 
weekly cash benefit shall be applied to-
ward the cost to the State of providing 
such assistance (and shall not be used 
to claim Federal matching funds under 
Medicaid), and Medicaid shall provide 
secondary coverage for the remainder 
of any costs incurred in providing such 
assistance. 
‘‘(II) INSTITUTIONALIZED RECIPI-
ENTS OF PACE PROGRAM SERVICES.—If 
a 
beneficiary 
receiving 
assistance 
under Medicaid for PACE program 
services is a patient in a hospital, 
nursing facility, intermediate care fa-
cility for the mentally retarded, or an 
institution for mental diseases, the ben-
eficiary shall be treated as in institu-
tionalized beneficiary under clause (i).
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‘‘(2) AUTHORIZED REPRESENTATIVES.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures to allow access to a bene-
ficiary’s cash benefits by an authorized rep-
resentative of the eligible beneficiary on whose 
behalf such benefits are paid. 
‘‘(B) QUALITY ASSURANCE AND PROTECTION 
AGAINST FRAUD AND ABUSE.—The procedures es-
tablished under subparagraph (A) shall ensure 
that authorized representatives of eligible bene-
ficiaries comply with standards of conduct estab-
lished by the Secretary, including standards re-
quiring that such representatives provide quality 
services on behalf of such beneficiaries, do not 
have conflicts of interest, and do not misuse ben-
efits paid on behalf of such beneficiaries or other-
wise engage in fraud or abuse. 
‘‘(3) COMMENCEMENT
OF
BENEFITS.—Benefits 
shall be paid to, or on behalf of, an eligible bene-
ficiary beginning with the first month in which an 
application for such benefits is approved. 
‘‘(4) ROLLOVER
OPTION
FOR
LUMP-SUM
PAY-
MENT.—An eligible beneficiary may elect to— 
‘‘(A) defer payment of their daily or weekly 
benefit and to rollover any such deferred benefits
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from month-to-month, but not from year-to-year; 
and 
‘‘(B) receive a lump-sum payment of such 
deferred benefits in an amount that may not ex-
ceed the lesser of— 
‘‘(i) the total amount of the accrued de-
ferred benefits; or 
‘‘(ii) the applicable annual benefit. 
‘‘(5) PERIOD FOR DETERMINATION OF ANNUAL 
BENEFITS.— 
‘‘(A) IN GENERAL.—The applicable period 
for determining with respect to an eligible bene-
ficiary the applicable annual benefit and the 
amount of any accrued deferred benefits is the 
12-month period that commences with the first 
month in which the beneficiary began to receive 
such benefits, and each 12-month period there-
after. 
‘‘(B) INCLUSION
OF
INCREASED
BENE-
FITS.—The Secretary shall establish procedures 
under which cash benefits paid to an eligible 
beneficiary that increase or decrease as a result 
of a change in the functional status of the bene-
ficiary before the end of a 12-month benefit pe-
riod shall be included in the determination of the
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applicable annual benefit paid to the eligible 
beneficiary. 
‘‘(C) RECOUPMENT
OF
UNPAID, ACCRUED 
BENEFITS.— 
‘‘(i) IN GENERAL.—The Secretary, in 
coordination with the Secretary of the 
Treasury, shall recoup any accrued benefits 
in the event of— 
‘‘(I) the death of a beneficiary; or 
‘‘(II) the failure of a beneficiary 
to elect under paragraph (4)(B) to re-
ceive such benefits as a lump-sum pay-
ment before the end of the 12-month 
period in which such benefits accrued. 
‘‘(ii) PAYMENT INTO CLASS INDEPEND-
ENCE FUND.—Any benefits recouped in ac-
cordance with clause (i) shall be paid into 
the CLASS Independence Fund and used in 
accordance with section 3206. 
‘‘(6) REQUIREMENT TO RECERTIFY ELIGIBILITY 
FOR RECEIPT OF BENEFITS.—An eligible beneficiary 
shall periodically, as determined by the Secretary— 
‘‘(A) recertify by submission of medical evi-
dence the beneficiary’s continued eligibility for 
receipt of benefits; and
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HR 3590 EAS/PP 
‘‘(B) submit records of expenditures attrib-
utable to the aggregate cash benefit received by 
the beneficiary during the preceding year. 
‘‘(7) 
SUPPLEMENT, 
NOT
SUPPLANT
OTHER 
HEALTH CARE BENEFITS.—Subject to the Medicaid 
payment rules under paragraph (1)(D), benefits re-
ceived by an eligible beneficiary shall supplement, but 
not supplant, other health care benefits for which the 
beneficiary is eligible under Medicaid or any other 
Federally funded program that provides health care 
benefits or assistance. 
‘‘(d) ADVOCACY SERVICES.—An agreement entered 
into under subsection (a)(2)(A)(ii) shall require the Protec-
tion and Advocacy System for the State to— 
‘‘(1) assign, as needed, an advocacy counselor to 
each eligible beneficiary that is covered by such agree-
ment and who shall provide an eligible beneficiary 
with— 
‘‘(A) information regarding how to access 
the appeals process established for the program; 
‘‘(B) assistance with respect to the annual 
recertification and notification required under 
subsection (c)(6); and
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‘‘(C) such other assistance with obtaining 
services as the Secretary, by regulation, shall re-
quire; and 
‘‘(2) ensure that the System and such counselors 
comply with the requirements of subsection (h). 
‘‘(e) ADVICE
AND
ASSISTANCE
COUNSELING.—An 
agreement entered into under subsection (a)(2)(A)(iii) shall 
require the entity to assign, as requested by an eligible bene-
ficiary that is covered by such agreement, an advice and 
assistance counselor who shall provide an eligible bene-
ficiary with information regarding— 
‘‘(1) accessing and coordinating long-term serv-
ices and supports in the most integrated setting; 
‘‘(2) possible eligibility for other benefits and 
services; 
‘‘(3) development of a service and support plan; 
‘‘(4) information about programs established 
under the Assistive Technology Act of 1998 and the 
services offered under such programs; 
‘‘(5) available assistance with decision making 
concerning medical care, including the right to accept 
or refuse medical or surgical treatment and the right 
to formulate advance directives or other written in-
structions recognized under State law, such as a liv-
ing will or durable power of attorney for health care,
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in the case that an injury or illness causes the indi-
vidual to be unable to make health care decisions; and 
‘‘(6) such other services as the Secretary, by reg-
ulation, may require. 
‘‘(f) NO EFFECT ON ELIGIBILITY FOR OTHER BENE-
FITS.—Benefits paid to an eligible beneficiary under the 
CLASS program shall be disregarded for purposes of deter-
mining or continuing the beneficiary’s eligibility for receipt 
of benefits under any other Federal, State, or locally funded 
assistance program, including benefits paid under titles II, 
XVI, XVIII, XIX, or XXI of the Social Security Act (42 
U.S.C. 401 et seq., 1381 et seq., 1395 et seq., 1396 et seq., 
1397aa et seq.), under the laws administered by the Sec-
retary of Veterans Affairs, under low-income housing assist-
ance programs, or under the supplemental nutrition assist-
ance program established under the Food and Nutrition Act 
of 2008 (7 U.S.C. 2011 et seq.). 
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this title 
shall be construed as prohibiting benefits paid under the 
CLASS Independence Benefit Plan from being used to com-
pensate a family caregiver for providing community living 
assistance services and supports to an eligible beneficiary. 
‘‘(h) PROTECTION AGAINST CONFLICT
OF INTER-
ESTS.—The Secretary shall establish procedures to ensure 
that the Eligibility Assessment System, the Protection and
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Advocacy System for a State, advocacy counselors for eligi-
ble beneficiaries, and any other entities that provide services 
to active enrollees and eligible beneficiaries under the 
CLASS program comply with the following: 
‘‘(1) If the entity provides counseling or plan-
ning services, such services are provided in a manner 
that fosters the best interests of the active enrollee or 
beneficiary. 
‘‘(2) The entity has established operating proce-
dures that are designed to avoid or minimize conflicts 
of interest between the entity and an active enrollee 
or beneficiary. 
‘‘(3) The entity provides information about all 
services and options available to the active enrollee or 
beneficiary, to the best of its knowledge, including 
services available through other entities or providers. 
‘‘(4) The entity assists the active enrollee or ben-
eficiary to access desired services, regardless of the 
provider. 
‘‘(5) The entity reports the number of active en-
rollees and beneficiaries provided with assistance by 
age, disability, and whether such enrollees and bene-
ficiaries received services from the entity or another 
entity.
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‘‘(6) If the entity provides counseling or plan-
ning services, the entity ensures that an active en-
rollee or beneficiary is informed of any financial in-
terest that the entity has in a service provider. 
‘‘(7) The entity provides an active enrollee or 
beneficiary with a list of available service providers 
that can meet the needs of the active enrollee or bene-
ficiary. 
‘‘SEC. 3206. CLASS INDEPENDENCE FUND. 
‘‘(a) ESTABLISHMENT
OF CLASS INDEPENDENCE 
FUND.—There is established in the Treasury of the United 
States a trust fund to be known as the ‘CLASS Independ-
ence Fund’. The Secretary of the Treasury shall serve as 
Managing Trustee of such Fund. The Fund shall consist 
of all amounts derived from payments into the Fund under 
sections 3204(f) and 3205(c)(5)(C)(ii), and remaining after 
investment of such amounts under subsection (b), including 
additional amounts derived as income from such invest-
ments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation— 
‘‘(1) to be held for investment on behalf of indi-
viduals enrolled in the CLASS program; 
‘‘(2) to pay the administrative expenses related 
to the Fund and to investment under subsection (b); 
and
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‘‘(3) to pay cash benefits to eligible beneficiaries 
under the CLASS Independence Benefit Plan. 
‘‘(b) INVESTMENT OF FUND BALANCE.—The Secretary 
of the Treasury shall invest and manage the CLASS Inde-
pendence Fund in the same manner, and to the same extent, 
as the Federal Supplementary Medical Insurance Trust 
Fund may be invested and managed under subsections (c), 
(d), and (e) of section 1841(d) of the Social Security Act 
(42 U.S.C. 1395t). 
‘‘(c) BOARD OF TRUSTEES.— 
‘‘(1) IN GENERAL.—With respect to the CLASS 
Independence Fund, there is hereby created a body to 
be known as the Board of Trustees of the CLASS 
Independence Fund (hereinafter in this section re-
ferred to as the ‘Board of Trustees’) composed of the 
Secretary of the Treasury, the Secretary of Labor, 
and the Secretary of Health and Human Services, all 
ex officio, and of two members of the public (both of 
whom may not be from the same political party), who 
shall be nominated by the President for a term of 4 
years and subject to confirmation by the Senate. A 
member of the Board of Trustees serving as a member 
of the public and nominated and confirmed to fill a 
vacancy occurring during a term shall be nominated 
and confirmed only for the remainder of such term.
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An individual nominated and confirmed as a member 
of the public may serve in such position after the ex-
piration of such member’s term until the earlier of the 
time at which the member’s successor takes office or 
the time at which a report of the Board is first issued 
under paragraph (2) after the expiration of the mem-
ber’s term. The Secretary of the Treasury shall be the 
Managing Trustee of the Board of Trustees. The 
Board of Trustees shall meet not less frequently than 
once each calendar year. A person serving on the 
Board of Trustees shall not be considered to be a fidu-
ciary and shall not be personally liable for actions 
taken in such capacity with respect to the Trust 
Fund. 
‘‘(2) DUTIES.— 
‘‘(A) IN GENERAL.—It shall be the duty of 
the Board of Trustees to do the following: 
‘‘(i) Hold the CLASS Independence 
Fund. 
‘‘(ii) Report to the Congress not later 
than the first day of April of each year on 
the operation and status of the CLASS 
Independence Fund during the preceding 
fiscal year and on its expected operation