688 
from human subjects, in which a drug or device is ad-
ministered, dispensed, or used. 
‘‘(3) COVERED DRUG, DEVICE, BIOLOGICAL, OR 
MEDICAL SUPPLY.—The term ‘covered’ means, with 
respect to a drug, device, biological, or medical sup-
ply, such a drug, device, biological, or medical supply 
for which payment is available under title XVIII or 
a State plan under title XIX or XXI (or a waiver of 
such a plan). 
‘‘(4) COVERED
RECIPIENT.—The term ‘covered 
recipient’ means the following: 
‘‘(A) A physician. 
‘‘(B) A physician group practice. 
‘‘(C) Any other prescriber of a covered drug, 
device, biological, or medical supply. 
‘‘(D) A pharmacy or pharmacist. 
‘‘(E) A health insurance issuer, group 
health plan, or other entity offering a health ben-
efits plan, including any employee of such an 
issuer, plan, or entity. 
‘‘(F) A pharmacy benefit manager, includ-
ing any employee of such a manager. 
‘‘(G) A hospital. 
‘‘(H) A medical school. 
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‘‘(I) A sponsor of a continuing medical edu-
cation program. 
‘‘(J) A patient advocacy or disease specific 
group. 
‘‘(K) A organization of health care profes-
sionals. 
‘‘(L) A biomedical researcher. 
‘‘(M) A group purchasing organization. 
‘‘(5) DISTRIBUTOR OF A COVERED DRUG, DE-
VICE, OR MEDICAL SUPPLY.—The term ‘distributor of 
a covered drug, device, or medical supply’ means any 
entity which is engaged in the marketing or distribu-
tion of a covered drug, device, or medical supply (or 
any subsidiary of or entity affiliated with such enti-
ty), but does not include a wholesale pharmaceutical 
distributor. 
‘‘(6) EMPLOYEE.—The term ‘employee’ has the 
meaning given such term in section 1877(h)(2). 
‘‘(7) KNOWINGLY.—The term ‘knowingly’ has the 
meaning given such term in section 3729(b) of title 
31, United States Code. 
‘‘(8) MANUFACTURER OF A COVERED DRUG, DE-
VICE, BIOLOGICAL, OR MEDICAL SUPPLY.—The term 
‘manufacturer of a covered drug, device, biological, or 
medical supply’ means any entity which is engaged 
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690 
in 
the 
production, 
preparation, 
propagation, 
compounding, conversion, processing, marketing, or 
distribution of a covered drug, device, biological, or 
medical supply (or any subsidiary of or entity affili-
ated with such entity). 
‘‘(9) 
PAYMENT
OR
OTHER
TRANSFER
OF 
VALUE.— 
‘‘(A) IN GENERAL.—The term ‘payment or 
other transfer of value’ means a transfer of any-
thing of value for or of any of the following: 
‘‘(i) Gift, food, or entertainment. 
‘‘(ii) Travel or trip. 
‘‘(iii) Honoraria. 
‘‘(iv) Research funding or grant. 
‘‘(v) Education or conference funding. 
‘‘(vi) Consulting fees. 
‘‘(vii) Ownership or investment inter-
est and royalties or license fee. 
‘‘(B) INCLUSIONS.—Subject to subpara-
graph (C), the term ‘payment or other transfer 
of value’ includes any compensation, gift, hono-
rarium, speaking fee, consulting fee, travel, serv-
ices, dividend, profit distribution, stock or stock 
option grant, or any ownership or investment 
interest held by a physician in a manufacturer 
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691 
(excluding a dividend or other profit distribution 
from, or ownership or investment interest in, a 
publicly traded security or mutual fund (as de-
scribed in section 1877(c))). 
‘‘(C) EXCLUSIONS.—The term ‘payment or 
other transfer of value’ does not include the fol-
lowing: 
‘‘(i) Any payment or other transfer of 
value provided by an applicable manufac-
turer or distributor to a covered recipient 
where the amount transferred to, requested 
by, or designated on behalf of the covered re-
cipient does not exceed $5. 
‘‘(ii) The loan of a covered device for 
a short-term trial period, not to exceed 90 
days, to permit evaluation of the covered de-
vice by the covered recipient. 
‘‘(iii) Items or services provided under 
a contractual warranty, including the re-
placement of a covered device, where the 
terms of the warranty are set forth in the 
purchase or lease agreement for the covered 
device. 
‘‘(iv) A transfer of anything of value to 
a covered recipient when the covered recipi-
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692 
ent is a patient and not acting in the pro-
fessional capacity of a covered recipient. 
‘‘(v) In-kind items used for the provi-
sion of charity care. 
‘‘(vi) A dividend or other profit dis-
tribution from, or ownership or investment 
interest in, a publicly traded security and 
mutual fund (as described in section 
1877(c)). 
‘‘(vii) Compensation paid by a manu-
facturer or distributor of a covered drug, de-
vice, biological, or medical supply to a cov-
ered recipient who is directly employed by 
and works solely for such manufacturer or 
distributor. 
‘‘(viii) Any discount or cash rebate. 
‘‘(10) PHYSICIAN.—The term ‘physician’ has the 
meaning given that term in section 1861(r). For pur-
poses of this section, such term does not include a 
physician who is an employee of the applicable man-
ufacturer that is required to submit information 
under subsection (a). 
‘‘(g) ANNUAL REPORTS TO STATES.—Not later than 
April 1 of each year beginning with 2011, the Secretary 
shall submit to States a report that includes a summary 
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693 
of the information submitted under subsections (a) and (d) 
during the preceding year with respect to covered recipients 
or other hospitals and entities in the State. 
‘‘(h) RELATION TO STATE LAWS.— 
‘‘(1) IN
GENERAL.—Effective on January 1, 
2011, subject to paragraph (2), the provisions of this 
section shall preempt any law or regulation of a State 
or of a political subdivision of a State that requires 
an applicable manufacturer and applicable dis-
tributor (as such terms are defined in subsection (f)) 
to disclose or report, in any format, the type of infor-
mation (described in subsection (a)) regarding a pay-
ment or other transfer of value provided by the manu-
facturer to a covered recipient (as so defined). 
‘‘(2) NO PREEMPTION OF ADDITIONAL REQUIRE-
MENTS.—Paragraph (1) shall not preempt any law or 
regulation of a State or of a political subdivision of 
a State that requires any of the following: 
‘‘(A) The disclosure or reporting of informa-
tion not of the type required to be disclosed or 
reported under this section. 
‘‘(B) The disclosure or reporting, in any 
format, of the type of information required to be 
disclosed or reported under this section to a Fed-
eral, State, or local governmental agency for 
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694 
public health surveillance, investigation, or other 
public health purposes or health oversight pur-
poses. 
‘‘(C) The discovery or admissibility of infor-
mation described in this section in a criminal, 
civil, or administrative proceeding.’’. 
(b) AVAILABILITY OF INFORMATION FROM THE DIS-
CLOSURE
OF
FINANCIAL
RELATIONSHIP
REPORT 
(DFRR).—The Secretary of Health and Human Services 
shall submit to Congress a report on the full results of the 
Disclosure of Physician Financial Relationships surveys re-
quired pursuant to section 5006 of the Deficit Reduction 
Act of 2005. Such report shall be submitted to Congress not 
later than the date that is 6 months after the date such 
surveys are collected and shall be made publicly available 
on an Internet website of the Department of Health and 
Human Services. 
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695 
Subtitle E—Public Reporting on 
Health Care-Associated Infections 
SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY HOS-
PITALS AND AMBULATORY SURGICAL CEN-
TERS ON HEALTH CARE-ASSOCIATED INFEC-
TIONS. 
(a) IN GENERAL.—Title XI of the Social Security Act 
is amended by inserting after section 1138 the following sec-
tion: 
‘‘SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY 
HOSPITALS 
AND 
AMBULATORY 
SURGICAL 
CENTERS ON HEALTH CARE-ASSOCIATED IN-
FECTIONS. 
‘‘(a) REPORTING REQUIREMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
that a hospital (as defined in subsection (g)) or am-
bulatory surgical center meeting the requirements of 
titles XVIII or XIX may participate in the programs 
established under such titles (pursuant to the applica-
ble provisions of law, including sections 1866(a)(1) 
and 1832(a)(1)(F)(i)) only if, in accordance with this 
section, the hospital or center reports such informa-
tion on health care-associated infections that develop 
in the hospital or center (and such demographic in-
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696 
formation associated with such infections) as the Sec-
retary specifies. 
‘‘(2) REPORTING PROTOCOLS.—Such information 
shall be reported in accordance with reporting proto-
cols established by the Secretary through the Director 
of the Centers for Disease Control and Prevention (in 
this section referred to as the ‘CDC’) and to the Na-
tional Healthcare Safety Network of the CDC or 
under such another reporting system of such Centers 
as determined appropriate by the Secretary in con-
sultation with such Director. 
‘‘(3) COORDINATION WITH HIT.—The Secretary, 
through the Director of the CDC and the Office of the 
National Coordinator for Health Information Tech-
nology, shall ensure that the transmission of informa-
tion under this subsection is coordinated with systems 
established under the HITECH Act, where appro-
priate. 
‘‘(4) PROCEDURES TO ENSURE THE VALIDITY OF 
INFORMATION.—The Secretary shall establish proce-
dures regarding the validity of the information sub-
mitted under this subsection in order to ensure that 
such information is appropriately compared across 
hospitals and centers. Such procedures shall address 
failures to report as well as errors in reporting. 
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697 
‘‘(5) IMPLEMENTATION.—Not later than 1 year 
after the date of enactment of this section, the Sec-
retary, through the Director of CDC, shall promulgate 
regulations to carry out this section. 
‘‘(b) PUBLIC POSTING OF INFORMATION.—The Sec-
retary shall promptly post, on the official public Internet 
site of the Department of Health and Human Services, the 
information reported under subsection (a). Such informa-
tion shall be set forth in a manner that allows for the com-
parison of information on health care-associated infec-
tions— 
‘‘(1) among hospitals and ambulatory surgical 
centers; and 
‘‘(2) by demographic information. 
‘‘(c) ANNUAL REPORT TO CONGRESS.—On an annual 
basis the Secretary shall submit to the Congress a report 
that summarizes each of the following: 
‘‘(1) The number and types of health care-associ-
ated infections reported under subsection (a) in hos-
pitals and ambulatory surgical centers during such 
year. 
‘‘(2) Factors that contribute to the occurrence of 
such infections, including health care worker immuni-
zation rates. 
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698 
‘‘(3) Based on the most recent information avail-
able to the Secretary on the composition of the profes-
sional staff of hospitals and ambulatory surgical cen-
ters, the number of certified infection control profes-
sionals on the staff of hospitals and ambulatory sur-
gical centers. 
‘‘(4) The total increases or decreases in health 
care costs that resulted from increases or decreases in 
the rates of occurrence of each such type of infection 
during such year. 
‘‘(5) Recommendations, in coordination with the 
Center for Quality Improvement established under 
section 931 of the Public Health Service Act, for best 
practices to eliminate the rates of occurrence of each 
such type of infection in hospitals and ambulatory 
surgical centers. 
‘‘(d) NON-PREEMPTION OF STATE LAWS.—Nothing in 
this section shall be construed as preempting or otherwise 
affecting any provision of State law relating to the disclo-
sure of information on health care-associated infections or 
patient safety procedures for a hospital or ambulatory sur-
gical center. 
‘‘(e) HEALTH
CARE-ASSOCIATED
INFECTION.—For 
purposes of this section: 
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699 
‘‘(1) IN GENERAL.—The term ‘health care-associ-
ated infection’ means an infection that develops in a 
patient who has received care in any institutional 
setting where health care is delivered and is related 
to receiving health care. 
‘‘(2) RELATED TO RECEIVING HEALTH CARE.— 
The term ‘related to receiving health care’, with re-
spect to an infection, means that the infection was not 
incubating or present at the time health care was pro-
vided. 
‘‘(f) APPLICATION TO CRITICAL ACCESS HOSPITALS.— 
For purposes of this section, the term ‘hospital’ includes a 
critical 
access 
hospital, 
as 
defined 
in 
section 
1861(mm)(1).’’. 
(b) EFFECTIVE DATE.—With respect to section 1138A 
of the Social Security Act (as inserted by subsection (a) 
of this section), the requirement under such section that hos-
pitals and ambulatory surgical centers submit reports takes 
effect on such date (not later than 2 years after the date 
of the enactment of this Act) as the Secretary of Health 
and Human Services shall specify. In order to meet such 
deadline, the Secretary may implement such section 
through guidance or other instructions. 
(c) GAO REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Comptroller General 
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700 
of the United States shall submit to Congress a report on 
the program established under section 1138A of the Social 
Security Act, as inserted by subsection (a). Such report 
shall include an analysis of the appropriateness of the types 
of information required for submission, compliance with re-
porting requirements, the success of the validity procedures 
established, and any conflict or overlap between the report-
ing required under such section and any other reporting 
systems mandated by either the States or the Federal Gov-
ernment. 
(d) REPORT ON ADDITIONAL DATA.—Not later than 
18 months after the date of the enactment of this Act, the 
Secretary of Health and Human Services shall submit to 
the Congress a report on the appropriateness of expanding 
the requirements under such section to include additional 
information (such as health care worker immunization 
rates), in order to improve health care quality and patient 
safety. 
TITLE V—MEDICARE GRADUATE 
MEDICAL EDUCATION 
SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI-
TIONS. 
(a) IN GENERAL.—Section 1886(h) of the Social Secu-
rity Act (42 U.S.C. 1395ww(h)) is amended— 
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701 
(1) in paragraph (4)(F)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 
(2) in paragraph (4)(H)(i), by striking ‘‘para-
graph (7)’’ and inserting ‘‘paragraphs (7) and (8)’’; 
(3) in paragraph (7)(E), by inserting ‘‘and 
paragraph (8)’’ after ‘‘this paragraph’’; and 
(4) by adding at the end the following new para-
graph: 
‘‘(8) ADDITIONAL REDISTRIBUTION OF UNUSED 
RESIDENCY POSITIONS.— 
‘‘(A) REDUCTIONS IN LIMIT BASED ON UN-
USED POSITIONS.— 
‘‘(i) PROGRAMS SUBJECT TO REDUC-
TION.—If a hospital’s reference resident 
level (specified in clause (ii)) is less than 
the otherwise applicable resident limit (as 
defined in subparagraph (C)(ii)), effective 
for portions of cost reporting periods occur-
ring on or after July 1, 2011, the otherwise 
applicable resident limit shall be reduced by 
90 percent of the difference between such 
otherwise applicable resident limit and such 
reference resident level. 
‘‘(ii) REFERENCE RESIDENT LEVEL.— 
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702 
‘‘(I) IN GENERAL.—Except as oth-
erwise provided in a subsequent sub-
clause, the reference resident level spec-
ified in this clause for a hospital is the 
highest resident level for any of the 3 
most recent cost reporting periods 
(ending before the date of the enact-
ment of this paragraph) of the hospital 
for which a cost report has been settled 
(or, if not, submitted (subject to 
audit)), as determined by the Sec-
retary. 
‘‘(II) USE OF MOST RECENT AC-
COUNTING PERIOD TO RECOGNIZE EX-
PANSION OF EXISTING PROGRAMS.—If 
a hospital submits a timely request to 
increase its resident level due to an ex-
pansion, or planned expansion, of an 
existing residency training program 
that is not reflected on the most recent 
settled or submitted cost report, after 
audit and subject to the discretion of 
the Secretary, subject to subclause (IV), 
the reference resident level for such hos-
pital is the resident level that includes 
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703 
the additional residents attributable to 
such expansion or establishment, as de-
termined by the Secretary. The Sec-
retary is authorized to determine an 
alternative reference resident level for a 
hospital that submitted to the Sec-
retary a timely request, before the start 
of the 2009–2010 academic year, for 
an increase in its reference resident 
level due to a planned expansion. 
‘‘(III) SPECIAL PROVIDER AGREE-
MENT.—In the case of a hospital de-
scribed in paragraph (4)(H)(v), the 
reference resident level specified in this 
clause is the limitation applicable 
under subclause (I) of such paragraph. 
‘‘(IV) 
PREVIOUS
REDISTRIBU-
TION.—The reference resident level 
specified in this clause for a hospital 
shall be increased to the extent required 
to take into account an increase in 
resident positions made available to 
the hospital under paragraph (7)(B) 
that are not otherwise taken into ac-
count under a previous subclause. 
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704 
‘‘(iii) AFFILIATION.—The provisions of 
clause (i) shall be applied to hospitals 
which are members of the same affiliated 
group (as defined by the Secretary under 
paragraph (4)(H)(ii)) and to the extent the 
hospitals can demonstrate that they are fill-
ing any additional
resident slots allocated 
to other hospitals through an affiliation 
agreement, the Secretary shall adjust the de-
termination of available slots accordingly, 
or which the Secretary otherwise has per-
mitted the resident positions (under section 
402 of the Social Security Amendments of 
1967) to be aggregated for purposes of ap-
plying the resident position limitations 
under this subsection. 
‘‘(B) REDISTRIBUTION.— 
‘‘(i) IN GENERAL.—The Secretary shall 
increase the otherwise applicable resident 
limit for each qualifying hospital that sub-
mits an application under this subpara-
graph by such number as the Secretary may 
approve for portions of cost reporting peri-
ods occurring on or after July 1, 2011. The 
estimated aggregate number of increases in 
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705 
the otherwise applicable resident limit 
under this subparagraph may not exceed the 
Secretary’s estimate of the aggregate reduc-
tion in such limits attributable to subpara-
graph (A). 
‘‘(ii) REQUIREMENTS FOR QUALIFYING 
HOSPITALS.—A hospital is not a qualifying 
hospital for purposes of this paragraph un-
less the following requirements are met: 
‘‘(I) MAINTENANCE
OF
PRIMARY 
CARE RESIDENT LEVEL.—The hospital 
maintains the number of primary care 
residents at a level that is not less than 
the base level of primary care residents 
increased by the number of additional 
primary care resident positions pro-
vided to the hospital under this sub-
paragraph. For purposes of this sub-
paragraph, the ‘base level of primary 
care residents’ for a hospital is the 
level of such residents as of a base pe-
riod (specified by the Secretary), deter-
mined without regard to whether such 
positions were in excess of the other-
wise applicable resident limit for such 
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706 
period but taking into account the ap-
plication of subclauses (II) and (III) of 
subparagraph (A)(ii). 
‘‘(II) DEDICATED ASSIGNMENT OF 
ADDITIONAL
RESIDENT
POSITIONS
TO 
PRIMARY CARE.—The hospital assigns 
all such additional resident positions 
for primary care residents. 
‘‘(III) ACCREDITATION.—The hos-
pital’s residency programs in primary 
care are fully accredited or, in the case 
of a residency training program not in 
operation as of the base year, the hos-
pital is actively applying for such ac-
creditation for the program for such 
additional resident positions (as deter-
mined by the Secretary). 
‘‘(iii) 
CONSIDERATIONS
IN
REDIS-
TRIBUTION.—In 
determining 
for 
which 
qualifying hospitals the increase in the oth-
erwise applicable resident limit is provided 
under this subparagraph, the Secretary 
shall take into account the demonstrated 
likelihood of the hospital filling the posi-
tions within the first 3 cost reporting peri-
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707 
ods beginning on or after July 1, 2011, 
made available under this subparagraph, as 
determined by the Secretary. 
‘‘(iv) PRIORITY
FOR
CERTAIN
HOS-
PITALS.—In determining for which quali-
fying hospitals the increase in the otherwise 
applicable resident limit is provided under 
this subparagraph, the Secretary shall dis-
tribute the increase to qualifying hospitals 
based on the following criteria: 
‘‘(I) The Secretary shall give pref-
erence to hospitals that had a reduc-
tion in resident training positions 
under subparagraph (A). 
‘‘(II) The Secretary shall give 
preference to hospitals with 3-year pri-
mary care residency training pro-
grams, such as family practice and 
general internal medicine. 
‘‘(III) The Secretary shall give 
preference to hospitals insofar as they 
have in effect formal arrangements (as 
determined by the Secretary) that 
place greater emphasis upon training 
in Federally qualified health centers, 
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708 
rural health clinics, and other nonpro-
vider settings, and to hospitals that re-
ceive additional payments under sub-
section (d)(5)(F) and emphasize train-
ing in an outpatient department. 
‘‘(IV) The Secretary shall give 
preference to hospitals with a number 
of positions (as of July 1, 2009) in ex-
cess of the otherwise applicable resident 
limit for such period. 
‘‘(V) The Secretary shall give 
preference to hospitals that place great-
er emphasis upon training in a health 
professional shortage area (designated 
under section 332 of the Public Health 
Service Act) or a health professional 
needs area (designated under section 
2211 of such Act). 
‘‘(VI) The Secretary shall give 
preference to hospitals in States that 
have low resident-to-population ratios 
(including a greater preference for 
those States with lower resident-to-pop-
ulation ratios). 
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709 
‘‘(v) LIMITATION.—In no case shall 
more than 20 full-time equivalent addi-
tional residency positions be made available 
under this subparagraph with respect to 
any hospital. 
‘‘(vi) APPLICATION OF PER RESIDENT 
AMOUNTS
FOR
PRIMARY
CARE.—With re-
spect to additional residency positions in a 
hospital attributable to the increase pro-
vided under this subparagraph, the ap-
proved FTE resident amounts are deemed to 
be equal to the hospital per resident 
amounts for primary care and nonprimary 
care computed under paragraph (2)(D) for 
that hospital. 
‘‘(vi) DISTRIBUTION.—The Secretary 
shall distribute the increase in resident 
training positions to qualifying hospitals 
under this subparagraph not later than 
July 1, 2011. 
‘‘(C) RESIDENT
LEVEL
AND
LIMIT
DE-
FINED.—In this paragraph: 
‘‘(i) The term ‘resident level’ has the 
meaning given such term in paragraph 
(7)(C)(i). 
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‘‘(ii) The term ‘otherwise applicable 
resident limit’ means, with respect to a hos-
pital, the limit otherwise applicable under 
subparagraphs (F)(i) and (H) of paragraph 
(4) on the resident level for the hospital de-
termined without regard to this paragraph 
but taking into account paragraph (7)(A). 
‘‘(D) MAINTENANCE
OF
PRIMARY
CARE 
RESIDENT LEVEL.—In carrying out this para-
graph, the Secretary shall require hospitals that 
receive additional resident positions under sub-
paragraph (B)— 
‘‘(i) to maintain records, and periodi-
cally report to the Secretary, on the number 
of primary care residents in its residency 
training programs; and 
‘‘(ii) as a condition of payment for a 
cost reporting period under this subsection 
for such positions, to maintain the level of 
such positions at not less than the sum of— 
‘‘(I) the base level of primary care 
resident 
positions 
(as 
determined 
under subparagraph (B)(ii)(I)) before 
receiving such additional positions; 
and 
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‘‘(II) the number of such addi-
tional positions.’’. 
(b) IME.— 
(1) IN
GENERAL.—Section 1886(d)(5)(B)(v) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(5)(B)(v)), in the third sentence, is amend-
ed— 
(A) by striking ‘‘subsection (h)(7)’’ and in-
serting ‘‘subsections (h)(7) and (h)(8)’’; and 
(B) by striking ‘‘it applies’’ and inserting 
‘‘they apply’’. 
(2) 
CONFORMING
PROVISION.—Section 
1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)) is amended by adding at the end 
the following clause: 
‘‘(x) For discharges occurring on or after July 1, 
2011, insofar as an additional payment amount 
under this subparagraph is attributable to resident 
positions distributed to a hospital under subsection 
(h)(8)(B), the indirect teaching adjustment factor 
shall be computed in the same manner as provided 
under clause (ii) with respect to such resident posi-
tions.’’. 
(c) CONFORMING AMENDMENT.—Section 422(b)(2) of 
the Medicare Prescription Drug, Improvement, and Mod-
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mination 
of 
full-time 
equivalency, 
without regard to the setting in which 
the activities are performed, if the hos-
pital incurs the costs of the stipends 
and fringe benefits of the resident dur-
ing the time the resident spends in that 
setting. 
Any hospital claiming under this subpara-
graph for time spent in a nonprovider set-
ting shall maintain and make available to 
the Secretary records regarding the amount 
of such time and such amount in compari-
son with amounts of such time in such base 
year as the Secretary shall specify.’’. 
(b) IME.—Section 1886(d)(5)(B)(iv) of the Social Se-
curity Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended— 
(1) by striking ‘‘(iv) Effective for discharges oc-
curring on or after October 1, 1997’’ and inserting 
‘‘(iv)(I) Effective for discharges occurring on or after 
October 1, 1997, and before July 1, 2009’’; and 
(2) by inserting after subclause (I), as inserted 
by paragraph (1), the following new subclause: 
‘‘(II) Effective for discharges occurring on or 
after July 1, 2009, all the time spent by an intern 
or resident in patient care activities at an entity in 
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a nonprovider setting shall be counted towards the de-
termination of full-time equivalency if the hospital 
incurs the costs of the stipends and fringe benefits of 
the intern or resident during the time the intern or 
resident spends in that setting.’’. 
(c) OIG STUDY ON IMPACT ON TRAINING.—The In-
spector General of the Department of Health and Human 
Services shall analyze the data collected by the Secretary 
of Health and Human Services from the records made 
available to the Secretary under section 1886(h)(4)(E) of 
the Social Security Act, as amended by subsection (a), in 
order to assess the extent to which there is an increase in 
time spent by medical residents in training in nonprovider 
settings as a result of the amendments made by this section. 
Not later than 4 years after the date of the enactment of 
this Act, the Inspector General shall submit a report to Con-
gress on such analysis and assessment. 
(d) 
DEMONSTRATION
PROJECT
FOR
APPROVED 
TEACHING HEALTH CENTERS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall conduct a demonstration 
project under which an approved teaching health cen-
ter (as defined in paragraph (3)) would be eligible for 
payment under subsections (h) and (k) of section 
1886 of the Social Security Act (42 U.S.C. 1395ww) 
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of amounts for its own direct costs of graduate med-
ical education activities for primary care residents, 
as well as for the direct costs of graduate medical edu-
cation activities of its contracting hospital for such 
residents, in a manner similar to the manner in 
which such payments would be made to a hospital if 
the hospital were to operate such a program. 
(2) 
CONDITIONS.—Under 
the 
demonstration 
project— 
(A) an approved teaching health center 
shall contract with an accredited teaching hos-
pital to carry out the inpatient responsibilities 
of the primary care residency program of the 
hospital involved and is responsible for payment 
to the hospital for the hospital’s costs of the sal-
ary and fringe benefits for residents in the pro-
gram; 
(B) the number of primary care residents of 
the center shall not count against the contracting 
hospital’s resident limit; and 
(C) the contracting hospital shall agree not 
to diminish the number of residents in its pri-
mary care residency training program. 
(3) APPROVED TEACHING HEALTH CENTER DE-
FINED.—In this subsection, the term ‘‘approved teach-
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ing health center’’ means a nonprovider setting, such 
as a Federally qualified health center or rural health 
clinic (as defined in section 1861(aa) of the Social 
Security Act), that develops and operates an accred-
ited primary care residency program for which fund-
ing would be available if it were operated by a hos-
pital. 
SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI-
DACTIC AND SCHOLARLY ACTIVITIES AND 
OTHER ACTIVITIES. 
(a) DIRECT GME.—Section 1886(h) of the Social Se-
curity Act (42 U.S.C. 1395ww(h)) is amended— 
(1) in paragraph (4)(E), as amended by section 
1502(a)— 
(A) in clause (i), by striking ‘‘Such rules’’ 
and inserting ‘‘Subject to clause (ii), such rules’’; 
and 
(B) by adding at the end the following new 
clause: 
‘‘(ii) TREATMENT
OF
CERTAIN
NON-
PROVIDER AND DIDACTIC ACTIVITIES.—Such 
rules shall provide that all time spent by an 
intern or resident in an approved medical 
residency training program in a nonpro-
vider setting that is primarily engaged in 
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furnishing patient care (as defined in para-
graph (5)(K)) in nonpatient care activities, 
such as didactic conferences and seminars, 
but not including research not associated 
with the treatment or diagnosis of a par-
ticular patient, as such time and activities 
are defined by the Secretary, shall be count-
ed toward the determination of full-time 
equivalency.’’; 
(2) in paragraph (4), by adding at the end the 
following new subparagraph: 
‘‘(I) TREATMENT
OF
CERTAIN
TIME
IN 
APROVED
MEDICAL
RESIDENCY
TRAINING
PRO-
GRAM.—In determining the hospital’s number of 
full-time equivalent residents for purposes of this 
subsection, all the time that is spent by an in-
tern or resident in an approved medical resi-
dency training program on vacation, sick leave, 
or other approved leave, as such time is defined 
by the Secretary, and that does not prolong the 
total time the resident is participating in the 
approved program beyond the normal duration 
of the program shall be counted toward the deter-
mination of full-time equivalency.’’; and 
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(3) in paragraph (5), by adding at the end the 
following new subparagraph: 
‘‘(K) NONPROVIDER SETTING THAT IS PRI-
MARILY
ENGAGED
IN
FURNISHING
PATIENT 
CARE.—The term ‘nonprovider setting that is 
primarily engaged in furnishing patient care’ 
means a nonprovider setting in which the pri-
mary activity is the care and treatment of pa-
tients, as defined by the Secretary.’’. 
(b) IME DETERMINATIONS.—Section 1886(d)(5)(B) of 
such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by sec-
tion 1501(b), is amended by adding at the end the following 
new clause: 
‘‘(xi)(I) The provisions of subparagraph (I) of 
subsection (h)(4) shall apply under this subparagraph 
in the same manner as they apply under such sub-
section. 
‘‘(II) In determining the hospital’s number of 
full-time equivalent residents for purposes of this sub-
paragraph, all the time spent by an intern or resident 
in an approved medical residency training program 
in nonpatient care activities, such as didactic con-
ferences and seminars, as such time and activities are 
defined by the Secretary, that occurs in the hospital 
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shall be counted toward the determination of full-time 
equivalency if the hospital— 
‘‘(aa) is recognized as a subsection (d) hos-
pital; 
‘‘(bb) is recognized as a subsection (d) Puer-
to Rico hospital; 
‘‘(cc) is reimbursed under a reimbursement 
system authorized under section 1814(b)(3); or 
‘‘(dd) is a provider-based hospital out-
patient department. 
‘‘(III) In determining the hospital’s number of 
full-time equivalent residents for purposes of this sub-
paragraph, all the time spent by an intern or resident 
in an approved medical residency training program 
in research activities that are not associated with the 
treatment or diagnosis of a particular patient, as 
such time and activities are defined by the Secretary, 
shall not be counted toward the determination of full- 
time equivalency.’’. 
(c) EFFECTIVE DATES; APPLICATION.— 
(1) IN GENERAL.—Except as otherwise provided, 
the Secretary of Health and Human Services shall 
implement the amendments made by this section in a 
manner so as to apply to cost reporting periods begin-
ning on or after January 1, 1983. 
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(2) DIRECT GME.—Section 1886(h)(4)(E)(ii) of 
the Social Security Act, as added by subsection 
(a)(1)(B), shall apply to cost reporting periods begin-
ning on or after July 1, 2008. 
(3) IME.—Section 1886(d)(5)(B)(x)(III) of the 
Social Security Act, as added by subsection (b), shall 
apply to cost reporting periods beginning on or after 
October 1, 2001. Such section, as so added, shall not 
give rise to any inference on how the law in effect 
prior to such date should be interpreted. 
(4) APPLICATION.—The amendments made by 
this section shall not be applied in a manner that re-
quires reopening of any settled hospital cost reports as 
to which there is not a jurisdictionally proper appeal 
pending as of the date of the enactment of this Act 
on the issue of payment for indirect costs of medical 
education under section 1886(d)(5)(B) of the Social 
Security Act or for direct graduate medical education 
costs under section 1886(h) of such Act. 
SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS 
FROM CLOSED HOSPITALS. 
(a) DIRECT GME.—Section 1886(h)(4)(H) of the So-
cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H)) is 
amended by adding at the end the following new clause: 
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‘‘(vi) REDISTRIBUTION OF RESIDENCY 
SLOTS AFTER A HOSPITAL CLOSES.— 
‘‘(I) IN GENERAL.—The Secretary 
shall, by regulation, establish a process 
consistent with subclauses (II) and 
(III) under which, in the case where a 
hospital (other than a hospital de-
scribed in clause (v)) with an approved 
medical residency program in a State 
closes on or after the date that is 2 
years before the date of the enactment 
of this clause, the Secretary shall in-
crease the otherwise applicable resident 
limit under this paragraph for other 
hospitals in the State in accordance 
with this clause. 
‘‘(II) PROCESS FOR HOSPITALS IN 
CERTAIN AREAS.—In determining for 
which hospitals the increase in the oth-
erwise applicable resident limit de-
scribed in subclause (I) is provided, the 
Secretary shall establish a process to 
provide for such increase to one or 
more hospitals located in the State. 
Such process shall take into consider-
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ation the recommendations submitted 
to the Secretary by the senior health of-
ficial (as designated by the chief execu-
tive officer of such State) if such rec-
ommendations are submitted not later 
than 180 days after the date of the hos-
pital closure involved (or, in the case of 
a hospital that closed after the date 
that is 2 years before the date of the 
enactment of this clause, 180 days 
after such date of enactment). 
‘‘(III) 
LIMITATION.—The 
esti-
mated aggregate number of increases 
in the otherwise applicable resident 
limits for hospitals under this clause 
shall be equal to the estimated number 
of resident positions in the approved 
medical residency programs that closed 
on or after the date described in sub-
clause (I).’’. 
(b) NO EFFECT ON TEMPORARY FTE CAP ADJUST-
MENTS.—The amendments made by this section shall not 
effect any temporary adjustment to a hospital’s FTE cap 
under section 413.79(h) of title 42, Code of Federal Regula-
tions (as in effect on the date of enactment of this Act) and 
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shall not affect the application of section 1886(h)(4)(H)(v) 
of the Social Security Act. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 422(b)(2) of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 
2003 (Public Law 108-173), as amended by section 
1501(c), is amended by striking ‘‘(7) and’’ and insert-
ing ‘‘(4)(H)(vi), (7), and’’. 
(2) Section 1886(h)(7)(E) of the Social Security 
Act (42 U.S.C. 1395ww(h)(7)(E)) is amended by in-
serting ‘‘or under paragraph (4)(H)(vi)’’ after ‘‘under 
this paragraph’’. 
SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED 
MEDICAL RESIDENCY TRAINING. 
(a) SPECIFICATION OF GOALS FOR APPROVED MED-
ICAL
RESIDENCY
TRAINING
PROGRAMS.—Section 
1886(h)(1) of the Social Security Act (42 U.S.C. 
1395ww(h)(1)) is amended— 
(1) by designating the matter beginning with 
‘‘Notwithstanding’’ as a subparagraph (A) with the 
heading ‘‘IN GENERAL.—’’ and with appropriate in-
dentation; and 
(2) by adding at the end the following new sub-
paragraph: 
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‘‘(B) GOALS AND ACCOUNTABILITY FOR AP-
PROVED
MEDICAL
RESIDENCY
TRAINING
PRO-
GRAMS.—The goals of medical residency training 
programs are to foster a physician workforce so 
that physicians are trained to be able to do the 
following: 
‘‘(i) Work effectively in various health 
care delivery settings, such as nonprovider 
settings. 
‘‘(ii) Coordinate patient care within 
and across settings relevant to their special-
ties. 
‘‘(iii) Understand the relevant cost and 
value of various diagnostic and treatment 
options. 
‘‘(iv) Work in inter-professional teams 
and multi-disciplinary team-based models 
in provider and nonprovider settings to en-
hance safety and improve quality of patient 
care. 
‘‘(v) Be knowledgeable in methods of 
identifying systematic errors in health care 
delivery and in implementing systematic 
solutions in case of such errors, including 
experience and participation in continuous 
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quality improvement projects to improve 
health outcomes of the population the physi-
cians serve. 
‘‘(vi) Be meaningful EHR users (as 
determined under section 1848(o)(2)) in the 
delivery of care and in improving the qual-
ity of the health of the community and the 
individuals that the hospital serves.’’ 
(b) GAO STUDY ON EVALUATION OF TRAINING PRO-
GRAMS.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study to evaluate 
the extent to which medical residency training pro-
grams— 
(A) are meeting the goals described in sec-
tion 1886(h)(1)(B) of the Social Security Act, as 
added by subsection (a), in a range of residency 
programs, including primary care and other spe-
cialties; and 
(B) have the appropriate faculty expertise 
to teach the topics required to achieve such goals. 
(2) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Comptroller 
General shall submit to Congress a report on such 
study and shall include in such report recommenda-
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tions as to how medical residency training programs 
could be further encouraged to meet such goals 
through means such as— 
(A) development of curriculum require-
ments; and 
(B) assessment of the accreditation processes 
of the Accreditation Council for Graduate Med-
ical Education and the American Osteopathic 
Association and effectiveness of those processes in 
accrediting medical residency programs that 
meet the goals referred to in paragraph (1)(A). 
TITLE VI—PROGRAM INTEGRITY 
Subtitle A—Increased Funding To 
Fight Waste, Fraud, and Abuse 
SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TO 
FIGHT FRAUD AND ABUSE. 
(a) IN GENERAL.—Section 1817(k) of the Social Secu-
rity Act (42 U.S.C. 1395i(k)) is amended— 
(1) by adding at the end the following new para-
graph: 
‘‘(7) ADDITIONAL FUNDING.—In addition to the 
funds otherwise appropriated to the Account from the 
Trust Fund under paragraphs (3) and (4) and for 
purposes described in paragraphs (3)(C) and (4)(A), 
there 
are 
hereby 
appropriated 
an 
additional 
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$100,000,000 to such Account from such Trust Fund 
for each fiscal year beginning with 2011. The funds 
appropriated under this paragraph shall be allocated 
in the same proportion as the total funding appro-
priated with respect to paragraphs (3)(A) and (4)(A) 
was allocated with respect to fiscal year 2010, and 
shall be available without further appropriation until 
expended.’’. 
(2) in paragraph (4)(A)— 
(A) by inserting ‘‘for activities described in 
paragraph (3)(C) and’’ after ‘‘necessary’’; and 
(B) by inserting ‘‘until expended’’ after 
‘‘appropriation’’. 
(b) FLEXIBILITY IN PURSUING FRAUD AND ABUSE.— 
Section 1893(a) of the Social Security Act (42 U.S.C. 
1395ddd(a)) is amended by inserting ‘‘, or otherwise,’’ after 
‘‘entities’’. 
Subtitle B—Enhanced Penalties for 
Fraud and Abuse 
SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS 
ON PROVIDER OR SUPPLIER ENROLLMENT 
APPLICATIONS. 
(a) IN GENERAL.—Section 1128A(a) of the Social Se-
curity Act (42 U.S.C. 1320a–7a(a)) is amended— 
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(1) in paragraph (1)(D), by striking all that fol-
lows ‘‘in which the person was excluded’’ and insert-
ing ‘‘under Federal law from the Federal health care 
program under which the claim was made, or’’; 
(2) by striking ‘‘or’’ at the end of paragraph (6); 
(3) in paragraph (7), by inserting at the end 
‘‘or’’; 
(4) by inserting after paragraph (7) the fol-
lowing new paragraph: 
‘‘(8) knowingly makes or causes to be made any 
false statement, omission, or misrepresentation of a 
material fact in any application, agreement, bid, or 
contract to participate or enroll as a provider of serv-
ices or supplier under a Federal health care program, 
including managed care organizations under title 
XIX, Medicare Advantage organizations under part C 
of title XVIII, prescription drug plan sponsors under 
part D of title XVIII, and entities that apply to par-
ticipate as providers of services or suppliers in such 
managed care organizations and such plans;’’; 
(5) in the matter following paragraph (8), as in-
serted by paragraph (4), by striking ‘‘or in cases 
under paragraph (7), $50,000 for each such act)’’ and 
inserting ‘‘in cases under paragraph (7), $50,000 for 
each such act, or in cases under paragraph (8), 
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$50,000 for each false statement, omission, or mis-
representation of a material fact)’’; and 
(6) in the second sentence, by striking ‘‘for a 
lawful purpose)’’ and inserting ‘‘for a lawful purpose, 
or in cases under paragraph (8), an assessment of not 
more than 3 times the amount claimed as the result 
of the false statement, omission, or misrepresentation 
of material fact claimed by a provider of services or 
supplier whose application to participate contained 
such false statement, omission, or misrepresenta-
tion)’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to acts committed on or after Janu-
ary 1, 2010. 
SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF 
FALSE STATEMENTS MATERIAL TO A FALSE 
CLAIM. 
(a) IN GENERAL.—Section 1128A(a) of the Social Se-
curity Act (42 U.S.C. 1320a–7a(a)), as amended by section 
1611, is further amended— 
(1) in paragraph (7), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (8), by inserting ‘‘or’’ at the 
end; and 
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(3) by inserting after paragraph (8), the fol-
lowing new paragraph: 
‘‘(9) knowingly makes, uses, or causes to be made 
or used, a false record or statement material to a false 
or fraudulent claim for payment for items and serv-
ices furnished under a Federal health care program;’’; 
and 
(4) in the matter following paragraph (9), as in-
serted by paragraph (3)— 
(A) by striking ‘‘or in cases under para-
graph (8)’’ and inserting ‘‘in cases under para-
graph (8)’’; and 
(B) by striking ‘‘a material fact)’’ and in-
serting ‘‘a material fact, in cases under para-
graph (9), $50,000 for each false record or state-
ment)’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to acts committed on or after Janu-
ary 1, 2010. 
SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC-
TIONS. 
(a) IN GENERAL.—Section 1128A(a) of the Social Se-
curity Act (42 U.S.C. 1320a–7a(a)), as amended by sections 
1611 and 1612, is further amended— 
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(1) in paragraph (8), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (9), by inserting ‘‘or’’ at the 
end; 
(3) by inserting after paragraph (9) the fol-
lowing new paragraph: 
‘‘(10) fails to grant timely access, upon reason-
able request (as defined by the Secretary in regula-
tions), to the Inspector General of the Department of 
Health and Human Services, for the purpose of au-
dits, investigations, evaluations, or other statutory 
functions of the Inspector General of the Department 
of Health and Human Services;’’; and 
(4) in the matter following paragraph (10), as 
inserted by paragraph (3), by inserting ‘‘, or in cases 
under paragraph (10), $15,000 for each day of the 
failure described in such paragraph’’ after ‘‘false 
record or statement’’. 
(b) ENSURING TIMELY INSPECTIONS RELATING
TO 
CONTRACTS
WITH
MA 
ORGANIZATIONS.—Section 
1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 
amended— 
(1) in subparagraph (A), by inserting ‘‘timely’’ 
before ‘‘inspect’’; and 
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(2) in subparagraph (B), by inserting ‘‘timely’’ 
before ‘‘audit and inspect’’. 
(c) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to violations committed on or after 
January 1, 2010. 
SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS. 
(a) MEDICARE.—Part A of title XVIII of the Social 
Security Act is amended by inserting after section 1819 the 
following new section: 
‘‘SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE 
CARE. 
‘‘(a) IN GENERAL.—If the Secretary determines on the 
basis of a survey or otherwise, that a hospice program that 
is certified for participation under this title has dem-
onstrated a substandard quality of care and failed to meet 
such other requirements as the Secretary may find nec-
essary in the interest of the health and safety of the individ-
uals who are provided care and services by the agency or 
organization involved and determines— 
‘‘(1) that the deficiencies involved immediately 
jeopardize the health and safety of the individuals to 
whom the program furnishes items and services, the 
Secretary shall take immediate action to remove the 
jeopardy and correct the deficiencies through the rem-
edy specified in subsection (b)(2)(A)(iii) or terminate 
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the certification of the program, and may provide, in 
addition, for 1 or more of the other remedies described 
in subsection (b)(2)(A); or 
‘‘(2) that the deficiencies involved do not imme-
diately jeopardize the health and safety of the individ-
uals to whom the program furnishes items and serv-
ices, the Secretary may— 
‘‘(A) impose intermediate sanctions devel-
oped pursuant to subsection (b), in lieu of termi-
nating the certification of the program; and 
‘‘(B) if, after such a period of intermediate 
sanctions, the program is still not in compliance 
with such requirements, the Secretary shall ter-
minate the certification of the program. 
If the Secretary determines that a hospice program 
that is certified for participation under this title is 
in compliance with such requirements but, as of a 
previous period, was not in compliance with such re-
quirements, the Secretary may provide for a civil 
money penalty under subsection (b)(2)(A)(i) for the 
days in which it finds that the program was not in 
compliance with such requirements. 
‘‘(b) INTERMEDIATE SANCTIONS.— 
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‘‘(1) DEVELOPMENT
AND
IMPLEMENTATION.— 
The Secretary shall develop and implement, by not 
later than July 1, 2012— 
‘‘(A) a range of intermediate sanctions to 
apply to hospice programs under the conditions 
described in subsection (a), and 
‘‘(B) appropriate procedures for appealing 
determinations relating to the imposition of such 
sanctions. 
‘‘(2) SPECIFIED SANCTIONS.— 
‘‘(A) IN GENERAL.—The intermediate sanc-
tions developed under paragraph (1) may in-
clude— 
‘‘(i) civil money penalties in an 
amount not to exceed $10,000 for each day 
of noncompliance or, in the case of a per in-
stance penalty applied by the Secretary, not 
to exceed $25,000, 
‘‘(ii) denial of all or part of the pay-
ments to which a hospice program would 
otherwise be entitled under this title with 
respect to items and services furnished by a 
hospice program on or after the date on 
which the Secretary determines that inter-
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mediate sanctions should be imposed pursu-
ant to subsection (a)(2), 
‘‘(iii) the appointment of temporary 
management to oversee the operation of the 
hospice program and to protect and assure 
the health and safety of the individuals 
under the care of the program while im-
provements are made, 
‘‘(iv) corrective action plans, and 
‘‘(v) in-service training for staff. 
The provisions of section 1128A (other than sub-
sections (a) and (b)) shall apply to a civil money 
penalty under clause (i) in the same manner as 
such provisions apply to a penalty or proceeding 
under section 1128A(a). The temporary manage-
ment under clause (iii) shall not be terminated 
until the Secretary has determined that the pro-
gram has the management capability to ensure 
continued compliance with all requirements re-
ferred to in that clause. 
‘‘(B) CLARIFICATION.—The sanctions speci-
fied in subparagraph (A) are in addition to 
sanctions otherwise available under State or 
Federal law and shall not be construed as lim-
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iting other remedies, including any remedy 
available to an individual at common law. 
‘‘(C) COMMENCEMENT OF PAYMENT.—A de-
nial of payment under subparagraph (A)(ii) 
shall terminate when the Secretary determines 
that the hospice program no longer demonstrates 
a substandard quality of care and meets such 
other requirements as the Secretary may find 
necessary in the interest of the health and safety 
of the individuals who are provided care and 
services by the agency or organization involved. 
‘‘(3) SECRETARIAL AUTHORITY.—The Secretary 
shall develop and implement, by not later than July 
1, 2011, specific procedures with respect to the condi-
tions under which each of the intermediate sanctions 
developed under paragraph (1) is to be applied, in-
cluding the amount of any fines and the severity of 
each of these sanctions. Such procedures shall be de-
signed so as to minimize the time between identifica-
tion of deficiencies and imposition of these sanctions 
and shall provide for the imposition of incrementally 
more severe fines for repeated or uncorrected defi-
ciencies.’’. 
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(b) APPLICATION TO MEDICAID.—Section 1905(o) of 
the Social Security Act (42 U.S.C. 1396d(o)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) The provisions of section 1819A shall apply to 
a hospice program providing hospice care under this title 
in the same manner as such provisions apply to a hospice 
program providing hospice care under title XVIII.’’. 
(c) APPLICATION TO CHIP.—Title XXI of the Social 
Security Act is amended by adding at the end the following 
new section: 
‘‘SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE. 
‘‘The provisions of section 1819A shall apply to a hos-
pice program providing hospice care under this title in the 
same manner such provisions apply to a hospice program 
providing hospice care under title XVIII.’’. 
SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX-
CLUDED FROM PROGRAM PARTICIPATION. 
(a) IN GENERAL.—Section 1128A(a) of the Social Se-
curity Act (42 U.S.C. 1320a–7a(a)), as amended by the pre-
vious sections, is further amended— 
(1) by striking ‘‘or’’ at the end of paragraph (9); 
(2) by inserting ‘‘or’’ at the end of paragraph 
(10); 
(3) by inserting after paragraph (10) the fol-
lowing new paragraph: 
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‘‘(11) orders or prescribes an item or service, in-
cluding without limitation home health care, diag-
nostic and clinical lab tests, prescription drugs, dura-
ble medical equipment, ambulance services, physical 
or occupational therapy, or any other item or service, 
during a period when the person has been excluded 
from participation in a Federal health care program, 
and the person knows or should know that a claim for 
such item or service will be presented to such a pro-
gram;’’; and 
(4) in the matter following paragraph (11), as 
inserted by paragraph (3), by striking ‘‘or in cases 
under paragraph (10), $15,000 for each day of the 
failure described in such paragraph’’ and inserting 
‘‘in cases under paragraph (10), $15,000 for each day 
of the failure described in such paragraph, or in cases 
under paragraph (11), $50,000 for each order or pre-
scription for an item or service by an excluded indi-
vidual’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to violations committed on or after 
January 1, 2010. 
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SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF 
FALSE INFORMATION BY MEDICARE ADVAN-
TAGE AND PART D PLANS. 
(a) IN GENERAL.—Section 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 
subparagraph (E), an assessment of not more than 3 times 
the amount claimed by such plan or plan sponsor based 
upon the misrepresentation or falsified information in-
volved,’’ after ‘‘for each such determination,’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to violations committed on or after 
January 1, 2010. 
SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN-
TAGE AND PART D MARKETING VIOLATIONS. 
(a) IN GENERAL.—Section 1857(g)(1) of the Social Se-
curity Act (42 U.S.C. 1395w—27(g)(1)), as amended by 
section 1221(b), is amended— 
(1) in subparagraph (G), by striking ‘‘or’’ at the 
end; 
(2) by inserting after subparagraph (H) the fol-
lowing new subparagraphs: 
‘‘(I) except as provided under subparagraph 
(C) or (D) of section 1860D–1(b)(1), enrolls an 
individual in any plan under this part without 
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the prior consent of the individual or the des-
ignee of the individual; 
‘‘(J) transfers an individual enrolled under 
this part from one plan to another without the 
prior consent of the individual or the designee of 
the individual or solely for the purpose of earn-
ing a commission; 
‘‘(K) fails to comply with marketing restric-
tions described in subsections (h) and (j) of sec-
tion 1851 or applicable implementing regula-
tions or guidance; or 
‘‘(L) employs or contracts with any indi-
vidual or entity who engages in the conduct de-
scribed in subparagraphs (A) through (K) of this 
paragraph;’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘The Secretary may provide, in addition to 
any other remedies authorized by law, for any of the 
remedies described in paragraph (2), if the Secretary 
determines that any employee or agent of such orga-
nization, or any provider or supplier who contracts 
with such organization, has engaged in any conduct 
described in subparagraphs (A) through (L) of this 
paragraph.’’ 
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(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to violations committed on or after 
January 1, 2010. 
SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF 
PROGRAM AUDITS. 
(a) IN GENERAL.—Section 1128(b)(2) of the Social Se-
curity 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—’’ 
‘‘(A) any offense described in paragraph (1) 
or in subsection (a); or 
‘‘(B) the use of funds received, directly or 
indirectly, from any Federal health care pro-
gram (as defined in section 1128B(f)).’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to violations committed on or after 
January 1, 2010. 
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SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN-
TITIES FROM PARTICIPATION IN MEDICARE 
AND STATE HEALTH CARE PROGRAMS. 
(a) IN GENERAL.—Section 1128(c) of the Social Secu-
rity Act, as previously amended by this division, is further 
amended— 
(1) in the heading, by striking ‘‘AND PERIOD’’ 
and inserting ‘‘PERIOD, AND EFFECT’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(4)(A) For purposes of this Act, subject to subpara-
graph (C), the effect of exclusion is that no payment may 
be made by any Federal health care program (as defined 
in section 1128B(f)) with respect to any item or service fur-
nished— 
‘‘(i) by an excluded individual or entity; or 
‘‘(ii) at the medical direction or on the prescrip-
tion of a physician or other authorized individual 
when the person submitting a claim for such item or 
service knew or had reason to know of the exclusion 
of such individual. 
‘‘(B) For purposes of this section and sections 1128A 
and 1128B, subject to subparagraph (C), an item or service 
has been furnished by an individual or entity if the indi-
vidual or entity directly or indirectly provided, ordered, 
manufactured, distributed, prescribed, or otherwise supplied 
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the item or service regardless of how the item or service was 
paid for by a Federal health care program or to whom such 
payment was made. 
‘‘(C)(i) Payment may be made under a Federal health 
care program for emergency items or services (not including 
items or services furnished in an emergency room of a hos-
pital) furnished by an excluded individual or entity, or at 
the medical direction or on the prescription of an excluded 
physician or other authorized individual during the period 
of such individual’s exclusion. 
‘‘(ii) In the case that an individual eligible for benefits 
under title XVIII or XIX submits a claim for payment for 
items or services furnished by an excluded individual or 
entity, and such individual eligible for such benefits did not 
know or have reason to know that such excluded individual 
or entity was so excluded, then, notwithstanding such exclu-
sion, payment shall be made for such items or services. In 
such case the Secretary shall notify such individual eligible 
for such benefits of the exclusion of the individual or entity 
furnishing the items or services. Payment shall not be made 
for items or services furnished by an excluded individual 
or entity to an individual eligible for such benefits after 
a reasonable time (as determined by the Secretary in regu-
lations) after the Secretary has notified the individual eligi-
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ble for such benefits of the exclusion of the individual or 
entity furnishing the items or services. 
‘‘(iii) In the case that a claim for payment for items 
or services furnished by an excluded individual or entity 
is submitted by an individual or entity other than an indi-
vidual eligible for benefits under title XVIII or XIX or the 
excluded individual or entity, and the Secretary determines 
that the individual or entity that submitted the claim took 
reasonable steps to learn of the exclusion and reasonably 
relied upon inaccurate or misleading information from the 
relevant Federal health care program or its contractor, the 
Secretary may waive repayment of the amount paid in vio-
lation of the exclusion to the individual or entity that sub-
mitted the claim for the items or services furnished by the 
excluded individual or entity. If a Federal health care pro-
gram contractor provided inaccurate or misleading infor-
mation that resulted in the waiver of an overpayment under 
this clause, the Secretary shall take appropriate action to 
recover the improperly paid amount from the contractor.’’. 
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Subtitle C—Enhanced Program and 
Provider Protections 
SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU-
THORITY. 
(a) IN GENERAL.—Title XI of the Social Security Act 
(42 U.S.C. 1301 et seq.) is amended by inserting after sec-
tion 1128F the following new section: 
‘‘SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO-
TECTIONS IN THE MEDICARE, MEDICAID, AND 
CHIP PROGRAMS. 
‘‘(a) CERTAIN AUTHORIZED SCREENING, ENHANCED 
OVERSIGHT PERIODS, AND ENROLLMENT MORATORIA.— 
‘‘(1) IN GENERAL.—For periods beginning after 
January 1, 2011, in the case that the Secretary deter-
mines there is a significant risk of fraudulent activity 
(as determined by the Secretary based on relevant 
complaints, reports, referrals by law enforcement or 
other sources, data analysis, trending information, or 
claims submissions by providers of services and sup-
pliers) with respect to a category of provider of serv-
ices or supplier of items or services, including a cat-
egory within a geographic area, under title XVIII, 
XIX, or XXI, the Secretary may impose any of the 
following requirements with respect to a provider of 
services or a supplier (whether such provider or sup-
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plier is initially enrolling in the program or is re-
newing such enrollment): 
‘‘(A) Screening under paragraph (2). 
‘‘(B) Enhanced oversight periods under 
paragraph (3). 
‘‘(C) Enrollment moratoria under para-
graph (4). 
In applying this subsection for purposes of title XIX 
and XXI the Secretary may require a State to carry 
out the provisions of this subsection as a requirement 
of the State plan under title XIX or the child health 
plan under title XXI. Actions taken and determina-
tions made under this subsection shall not be subject 
to review by a judicial tribunal. 
‘‘(2) SCREENING.—For purposes of paragraph 
(1), the Secretary shall establish procedures under 
which screening is conducted with respect to providers 
of services and suppliers described in such paragraph. 
Such screening may include— 
‘‘(A) licensing board checks; 
‘‘(B) screening against the list of individ-
uals and entities excluded from the program 
under title XVIII, XIX, or XXI; 
‘‘(C) the excluded provider list system; 
‘‘(D) background checks; and 
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‘‘(E) unannounced pre-enrollment or other 
site visits. 
‘‘(3) ENHANCED OVERSIGHT PERIOD.—For pur-
poses of paragraph (1), the Secretary shall establish 
procedures to provide for a period of not less than 30 
days and not more than 365 days during which pro-
viders of services and suppliers described in such 
paragraph, as the Secretary determines appropriate, 
would be subject to enhanced oversight, such as re-
quired or unannounced (or required and unan-
nounced) site visits or inspections, prepayment re-
view, enhanced review of claims, and such other ac-
tions as specified by the Secretary, under the pro-
grams under titles XVIII, XIX, and XXI. Under such 
procedures, the Secretary may extend such period for 
more than 365 days if the Secretary determines that 
after the initial period such additional period of over-
sight is necessary. 
‘‘(4) MORATORIUM
ON
ENROLLMENT
OF
PRO-
VIDERS AND SUPPLIERS.—For purposes of paragraph 
(1), the Secretary, based upon a finding of a risk of 
serious ongoing fraud within a program under title 
XVIII, XIX, or XXI, may impose a moratorium on 
the enrollment of providers of services and suppliers 
within a category of providers of services and sup-
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pliers (including a category within a specific geo-
graphic area) under such title. Such a moratorium 
may only be imposed if the Secretary makes a deter-
mination that the moratorium would not adversely 
impact access of individuals to care under such pro-
gram. 
‘‘(5) CLARIFICATION.—Nothing in this subsection 
shall be interpreted to preclude or limit the ability of 
a State to engage in provider screening or enhanced 
provider oversight activities beyond those required by 
the Secretary.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) MEDICAID.—Section 1902(a) of the Social 
Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is 
amended— 
(A) in paragraph (23), by inserting before 
the semicolon at the end the following: ‘‘or by a 
person to whom or entity to which a moratorium 
under section 1128G(a)(4) is applied during the 
period of such moratorium’’; 
(B) in paragraph (72); by striking at the 
end ‘‘and’’; 
(C) in paragraph (73), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
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(D) by inserting after paragraph (73) the 
following new paragraph: 
‘‘(74) provide that the State will enforce any de-
termination made by the Secretary under subsection 
(a) of section 1128G (relating to a significant risk of 
fraudulent activity with respect to a category of pro-
vider or supplier described in such subsection (a) 
through use of the appropriate procedures described in 
such subsection (a)), and that the State will carry out 
any activities as required by the Secretary for pur-
poses of such subsection (a).’’. 
(2) CHIP.—Section 2102 of such Act (42 U.S.C. 
1397bb) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) PROGRAM INTEGRITY.—A State child health plan 
shall include a description of the procedures to be used by 
the State— 
‘‘(1) to enforce any determination made by the 
Secretary under subsection (a) of section 1128G (re-
lating to a significant risk of fraudulent activity with 
respect to a category of provider or supplier described 
in such subsection through use of the appropriate pro-
cedures described in such subsection); and 
‘‘(2) to carry out any activities as required by 
the Secretary for purposes of such subsection.’’. 
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(3) MEDICARE.—Section 1866(j) of such Act (42 
U.S.C. 1395cc(j)) is amended by adding at the end 
the following new paragraph: 
‘‘(3) PROGRAM
INTEGRITY.—The provisions of 
section 1128G(a) apply to enrollments and renewals 
of enrollments of providers of services and suppliers 
under this title.’’. 
SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP 
PROGRAM DISCLOSURE REQUIREMENTS RE-
LATING TO PREVIOUS AFFILIATIONS. 
(a) IN GENERAL.—Section 1128G of the Social Secu-
rity Act, as inserted by section 1631, is amended by adding 
at the end the following new subsection: 
‘‘(b) ENHANCED PROGRAM DISCLOSURE REQUIRE-
MENTS.— 
‘‘(1) DISCLOSURE.—A provider of services or 
supplier who submits on or after July 1, 2011, an ap-
plication for enrollment and renewing enrollment in 
a program under title XVIII, XIX, or XXI shall dis-
close (in a form and manner determined by the Sec-
retary) any current affiliation or affiliation within 
the previous 10-year period with a provider of serv-
ices or supplier that has uncollected debt or with a 
person or entity that has been suspended or excluded 
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under such program, subject to a payment suspension, 
or has had its billing privileges revoked. 
‘‘(2) ENHANCED SAFEGUARDS.—If the Secretary 
determines that such previous affiliation of such pro-
vider or supplier poses a risk of fraud, waste, or 
abuse, the Secretary may apply such enhanced safe-
guards as the Secretary determines necessary to re-
duce such risk associated with such provider or sup-
plier enrolling or participating in the program under 
title XVIII, XIX, or XXI. Such safeguards may in-
clude enhanced oversight, such as enhanced screening 
of claims, required or unannounced (or required and 
unannounced) site visits or inspections, additional 
information reporting requirements, and conditioning 
such enrollment on the provision of a surety bond. 
‘‘(3) AUTHORITY
TO
DENY
PARTICIPATION.—If 
the Secretary determines that there has been at least 
one such affiliation and that such affiliation or affili-
ations, as applicable, of such provider or supplier 
poses a serious risk of fraud, waste, or abuse, the Sec-
retary may deny the application of such provider or 
supplier.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) MEDICAID.—Paragraph (74) of section 
1902(a) of such Act (42 U.S.C. 1396a(a)), as added 
by section 1631(b)(1), is amended— 
(A) by inserting ‘‘or subsection (b) of such 
section (relating to disclosure requirements)’’ be-
fore ‘‘, and that the State’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘and apply any enhanced safeguards, 
with respect to a provider or supplier described 
in such subsection (b), as the Secretary deter-
mines necessary under such subsection (b)’’. 
(2) CHIP.—Subsection (d) of section 2102 of 
such Act (42 U.S.C. 1397bb), as added by section 
1631(b)(2), is amended— 
(A) in paragraph (1), by striking at the end 
‘‘and’’; 
(B) in paragraph (2) by striking the period 
at the end and inserting ‘‘; and’ ’’ and 
(C) by adding at the end the following new 
paragraph: 
‘‘(3) to enforce any determination made by the 
Secretary under subsection (b) of section 1128G (re-
lating to disclosure requirements) and to apply any 
enhanced safeguards, with respect to a provider or 
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supplier described in such subsection, as the Secretary 
determines necessary under such subsection.’’. 
SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER 
FOR CERTAIN EVALUATION AND MANAGE-
MENT SERVICES. 
Section 1848 of the Social Security Act (42 U.S.C. 
1395w–4), as amended by section 4101 of the HITECH Act 
(Public Law 111–5), is amended by adding at the end the 
following new subsection: 
‘‘(p) PAYMENT MODIFIER FOR CERTAIN EVALUATION 
AND MANAGEMENT SERVICES.—The Secretary shall estab-
lish a payment modifier under the fee schedule under this 
section for evaluation and management services (as speci-
fied in section 1842(b)(16)(B)(ii)) that result in the order-
ing of additional services (such as lab tests), the prescrip-
tion of drugs, the furnishing or ordering of durable medical 
equipment in order to enable better monitoring of claims 
for payment for such additional services under this title, 
or the ordering, furnishing, or prescribing of other items 
and services determined by the Secretary to pose a high risk 
of waste, fraud, and abuse. The Secretary may require pro-
viders of services or suppliers to report such modifier in 
claims submitted for payment.’’. 
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SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER 
MEDICARE INTEGRITY PROGRAM. 
(a) IN GENERAL.—Section 1893(c) of the Social Secu-
rity Act (42 U.S.C. 1395ddd(c)) is amended— 
(1) in paragraph (3), by striking at the end 
‘‘and’’; 
(2) by redesignating paragraph (4) as para-
graph (5); and 
(3) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) for the contract year beginning in 2011 and 
each subsequent contract year, the entity provides as-
surances to the satisfaction of the Secretary that the 
entity will conduct periodic evaluations of the effec-
tiveness of the activities carried out by such entity 
under the Program and will submit to the Secretary 
an annual report on such activities; and’’. 
(b) REFERENCE
TO
MEDICAID
INTEGRITY
PRO-
GRAM.—For a similar provision with respect to the Med-
icaid Integrity Program, see section 1752. 
SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO ADOPT 
PROGRAMS TO REDUCE WASTE, FRAUD, AND 
ABUSE. 
(a) IN GENERAL.—Section 1874 of the Social Security 
Act (42 U.S.C. 42 U.S.C. 1395kk) is amended by adding 
at the end the following new subsection: 
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‘‘(e) COMPLIANCE PROGRAMS
FOR PROVIDERS
OF 
SERVICES AND SUPPLIERS.— 
‘‘(1) IN GENERAL.—The Secretary may disenroll 
a provider of services or a supplier (other than a phy-
sician or a skilled nursing facility) under this title 
(or may impose any civil monetary penalty or other 
intermediate sanction under paragraph (4)) if such 
provider of services or supplier fails to, subject to 
paragraph (5), establish a compliance program that 
contains the core elements established under para-
graph (2). 
‘‘(2) ESTABLISHMENT OF CORE ELEMENTS.—The 
Secretary, in consultation with the Inspector General 
of the Department of Health and Human Services, 
shall establish core elements for a compliance pro-
gram under paragraph (1). Such elements may in-
clude written policies, procedures, and standards of 
conduct, a designated compliance officer and a com-
pliance committee; effective training and education 
pertaining to fraud, waste, and abuse for the organi-
zation’s employees and contractors; a confidential or 
anonymous mechanism, such as a hotline, to receive 
compliance questions and reports of fraud, waste, or 
abuse; disciplinary guidelines for enforcement of 
standards; internal monitoring and auditing proce-
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dures, including monitoring and auditing of contrac-
tors; procedures for ensuring prompt responses to de-
tected offenses and development of corrective action 
initiatives, including responses to potential offenses; 
and procedures to return all identified overpayments 
to the programs under this title, title XIX, and title 
XXI. 
‘‘(3) TIMELINE FOR IMPLEMENTATION.—The Sec-
retary shall determine a timeline for the establish-
ment of the core elements under paragraph (2) and 
the date on which a provider of services and suppliers 
(other than physicians) shall be required to have es-
tablished such a program for purposes of this sub-
section. 
‘‘(4) CMS ENFORCEMENT AUTHORITY.—The Ad-
ministrator for the Centers of Medicare & Medicaid 
Services shall have the authority to determine whether 
a provider of services or supplier described in sub-
paragraph (3) has met the requirement of this sub-
section and to impose a civil monetary penalty not 
to exceed $50,000 for each violation. The Secretary 
may also impose other intermediate sanctions, includ-
ing corrective action plans and additional monitoring 
in the case of a violation of this subsection. 
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‘‘(5) PILOT PROGRAM.—The Secretary may con-
duct a pilot program on the application of this sub-
section with respect to a category of providers of serv-
ices or suppliers (other than physicians) that the Sec-
retary determines to be a category which is at high 
risk for waste, fraud, and abuse before implementing 
the requirements of this subsection to all providers of 
services and suppliers described in paragraph (3).’’. 
(b) REFERENCE TO SIMILAR MEDICAID PROVISION.— 
For a similar provision with respect to the Medicaid pro-
gram under title XIX of the Social Security Act, see section 
1753. 
SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDI-
CARE CLAIMS REDUCED TO NOT MORE THAN 
12 MONTHS. 
(a) PURPOSE.—In general, the 36-month period cur-
rently allowed for claims filing under parts A, B, C, and, 
D of title XVIII of the Social Security Act presents opportu-
nities for fraud schemes in which processing patterns of the 
Centers for Medicare & Medicaid Services can be observed 
and exploited. Narrowing the window for claims processing 
will not overburden providers and will reduce fraud and 
abuse. 
(b) REDUCING MAXIMUM PERIOD FOR SUBMISSION.— 
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(1) PART A.—Section 1814(a) of the Social Secu-
rity Act (42 U.S.C. 1395f(a)) is amended— 
(A) in paragraph (1), by striking ‘‘period of 
3 calendar years’’ and all that follows and in-
serting ‘‘period of 1 calendar year from which 
such services are furnished; and’’; and 
(B) by adding at the end the following new 
sentence: ‘‘In applying paragraph (1), the Sec-
retary may specify exceptions to the 1 calendar 
year period specified in such paragraph.’’. 
(2) PART B.—Section 1835(a) of such Act (42 
U.S.C. 1395n(a)) is amended— 
(A) in paragraph (1), by striking ‘‘period of 
3 calendar years’’ and all that follows and in-
serting ‘‘period of 1 calendar year from which 
such services are furnished; and’’; and 
(B) by adding at the end the following new 
sentence: ‘‘In applying paragraph (1), the Sec-
retary may specify exceptions to the 1 calendar 
year period specified in such paragraph.’’. 
(3) PARTS C AND D.—Section 1857(d) of such 
Act is amended by adding at the end the following 
new paragraph: 
‘‘(7) PERIOD FOR SUBMISSION OF CLAIMS.—The 
contract shall require an MA organization or PDP 
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sponsor to require any provider of services under con-
tract with, in partnership with, or affiliated with 
such organization or sponsor to ensure that, with re-
spect to items and services furnished by such provider 
to an enrollee of such organization, written request, 
signed by such enrollee, except in cases in which the 
Secretary finds it impracticable for the enrollee to do 
so, is filed for payment for such items and services in 
such form, in such manner, and by such person or 
persons as the Secretary may by regulation prescribe, 
no later than the close of the 1 calendar year period 
after such items and services are furnished. In apply-
ing the previous sentence, the Secretary may specify 
exceptions to the 1 calendar year period specified.’’. 
(c) EFFECTIVE DATE.—The amendments made by sub-
section (b) shall be effective for items and services furnished 
on or after January 1, 2011. 
SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL 
EQUIPMENT OR HOME HEALTH SERVICES RE-
QUIRED TO BE MEDICARE-ENROLLED PHYSI-
CIANS OR ELIGIBLE PROFESSIONALS. 
(a) DME.—Section 1834(a)(11)(B) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by strik-
ing ‘‘physician’’ and inserting ‘‘physician enrolled under 
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section 1866(j) or an eligible professional under section 
1848(k)(3)(B)’’. 
(b) HOME HEALTH SERVICES.— 
(1) PART A.—Section 1814(a)(2) of such Act (42 
U.S.C. 1395(a)(2)) is amended in the matter pre-
ceding subparagraph (A) by inserting ‘‘in the case of 
services described in subparagraph (C), a physician 
enrolled under section 1866(j) or an eligible profes-
sional under section 1848(k)(3)(B),’’ before ‘‘or, in the 
case of services’’. 
(2) PART B.—Section 1835(a)(2) of such Act (42 
U.S.C. 1395n(a)(2)) is amended in the matter pre-
ceding subparagraph (A) by inserting ‘‘, or in the 
case of services described in subparagraph (A), a phy-
sician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B),’’ after ‘‘a 
physician’’. 
(c) DISCRETION TO EXPAND APPLICATION.—The Sec-
retary may extend the requirement applied by the amend-
ments made by subsections (a) and (b) to durable medical 
equipment and home health services (relating to requiring 
certifications and written orders to be made by enrolled 
physicians and health professions) to other categories of 
items or services under this title, including covered part D 
drugs as defined in section 1860D-2(e), if the Secretary de-
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termines that such application would help to reduce the risk 
of waste, fraud, and abuse with respect to such other cat-
egories under title XVIII of the Social Security Act. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to written orders and certifications 
made on or after July 1, 2010. 
SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE 
DOCUMENTATION ON REFERRALS TO PRO-
GRAMS AT HIGH RISK OF WASTE AND ABUSE. 
(a) PHYSICIANS
AND OTHER SUPPLIERS.—Section 
1842(h) of the Social Security Act is amended by adding 
at the end the following new paragraph 
‘‘(10) The Secretary may disenroll, for a period of not 
more than one year for each act, a physician or supplier 
under section 1866(j) if such physician or supplier fails to 
maintain and, upon request of the Secretary, provide access 
to documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for 
home health services, or referrals for other items or services 
written or ordered by such physician or supplier under this 
title, as specified by the Secretary.’’. 
(b) PROVIDERS OF SERVICES.—Section 1866(a)(1) of 
such Act (42 U.S.C. 1395cc) is amended— 
(1) in subparagraph (U), by striking at the end 
‘‘and’’; 
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(2) in subparagraph (V), by striking the period 
at the end and adding ‘‘, and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(W) maintain and, upon request of the Sec-
retary, provide access to documentation relating to 
written orders or requests for payment for durable 
medical equipment, certifications for home health 
services, or referrals for other items or services written 
or ordered by the provider under this title, as speci-
fied by the Secretary.’’. 
(c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec-
tion 1128(b)(11) of the Social Security Act (42 U.S.C. 
1320a–7(b)(11)) is amended by inserting ‘‘, ordering, refer-
ring for furnishing, or certifying the need for’’ after ‘‘fur-
nishing’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to orders, certifications, and referrals 
made on or after January 1, 2010. 
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SEC. 1639. FACE-TO-FACE ENCOUNTER WITH PATIENT RE-
QUIRED BEFORE PHYSICIANS MAY CERTIFY 
ELIGIBILITY FOR HOME HEALTH SERVICES 
OR DURABLE MEDICAL EQUIPMENT UNDER 
MEDICARE. 
(a) CONDITION
OF PAYMENT
FOR HOME HEALTH 
SERVICES.— 
(1) PART A.—Section 1814(a)(2)(C) of such Act 
is amended— 
(A) by striking ‘‘and such services’’ and in-
serting ‘‘such services’’; and 
(B) by inserting after ‘‘care of a physician’’ 
the following: ‘‘, and, in the case of a certifi-
cation or recertification made by a physician 
after January 1, 2010, prior to making such cer-
tification the physician must document that the 
physician has had a face-to-face encounter (in-
cluding through use of telehealth and other than 
with respect to encounters that are incident to 
services involved) with the individual during the 
6-month period preceding such certification, or 
other reasonable timeframe as determined by the 
Secretary’’. 
(2) PART B.—Section 1835(a)(2)(A) of the Social 
Security Act is amended— 
(A) by striking ‘‘and’’ before ‘‘(iii)’’; and 
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(B) by inserting after ‘‘care of a physician’’ 
the following: ‘‘, and (iv) in the case of a certifi-
cation or recertification after January 1, 2010, 
prior to making such certification the physician 
must document that the physician has had a 
face-to-face encounter (including through use of 
telehealth and other than with respect to encoun-
ters that are incident to services involved) with 
the individual during the 6-month period pre-
ceding such certification or recertification, or 
other reasonable timeframe as determined by the 
Secretary’’. 
(b) CONDITION OF PAYMENT FOR DURABLE MEDICAL 
EQUIPMENT.—Section 1834(a)(11)(B) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by add-
ing before the period at the end the following: ‘‘and shall 
require that such an order be written pursuant to the physi-
cian documenting that the physician has had a face-to-face 
encounter (including through use of telehealth and other 
than with respect to encounters that are incident to services 
involved) with the individual involved during the 6-month 
period preceding such written order, or other reasonable 
timeframe as determined by the Secretary’’. 
(c) APPLICATION TO OTHER AREAS UNDER MEDI-
CARE.—The Secretary may apply the face-to-face encounter 
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requirement described in the amendments made by sub-
sections (a) and (b) to other items and services for which 
payment is provided under title XVIII of the Social Secu-
rity Act based upon a finding that such an decision would 
reduce the risk of waste, fraud, or abuse. 
(d) APPLICATION TO MEDICAID AND CHIP.—The re-
quirements pursuant to the amendments made by sub-
sections (a) and (b) shall apply in the case of physicians 
making certifications for home health services under title 
XIX or XXI of the Social Security Act, in the same manner 
and to the same extent as such requirements apply in the 
case of physicians making such certifications under title 
XVIII of such Act. 
SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AU-
THORITY TO PROGRAM EXCLUSION INVES-
TIGATIONS. 
(a) IN GENERAL.—Section 1128(f) of the Social Secu-
rity Act (42 U.S.C. 1320a-7(f)) is amended by adding at 
the end the following new paragraph: 
‘‘(4) The provisions of subsections (d) and (e) of section 
205 shall apply with respect to this section to the same ex-
tent as they are applicable with respect to title II. The Sec-
retary may delegate the authority granted by section 205(d) 
(as made applicable to this section) to the Inspector General 
of the Department of Health and Human Services or the 
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Administrator of the Centers for Medicare & Medicaid Serv-
ices for purposes of any investigation under this section.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to investigations beginning on or 
after January 1, 2010. 
SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND 
MEDICAID OVERPAYMENTS. 
Section 1128G of the Social Security Act, as inserted 
by section 1631 and amended by section 1632, is further 
amended by adding at the end the following new subsection: 
‘‘(c) REPORTS ON AND REPAYMENT OF OVERPAYMENTS 
IDENTIFIED THROUGH INTERNAL AUDITS AND REVIEWS.— 
‘‘(1) REPORTING
AND
RETURNING
OVERPAY-
MENTS.—If a person knows of an overpayment, the 
person must— 
‘‘(A) report and return the overpayment to 
the Secretary, the State, an intermediary, a car-
rier, or a contractor, as appropriate, at the cor-
rect address, and 
‘‘(B) notify the Secretary, the State, inter-
mediary, carrier, or contractor to whom the over-
payment was returned in writing of the reason 
for the overpayment. 
‘‘(2) TIMING.—An overpayment must be reported 
and returned under paragraph (1)(A) by not later 
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than the date that is 60 days after the date the person 
knows of the overpayment. Any known overpayment 
retained later than the applicable date specified in 
this paragraph creates an obligation as defined in 
section 3729(b)(3) of title 31 of the United States 
Code. 
‘‘(3) CLARIFICATION.—Repayment of any over-
payments (or refunding by withholding of future pay-
ments) by a provider of services or supplier does not 
otherwise limit the provider or supplier’s potential li-
ability for administrative obligations such as applica-
ble interests, fines, and specialties or civil or criminal 
sanctions involving the same claim if it is determined 
later that the reason for the overpayment was related 
to fraud by the provider or supplier or the employees 
or agents of such provider or supplier. 
‘‘(4) DEFINITIONS.—In this subsection: 
‘‘(A) KNOWS.—The term ‘knows’ has the 
meaning given the terms ‘knowing’ and ‘know-
ingly’ in section 3729(b) of title 31 of the United 
States Code. 
‘‘(B) OVERPAYMENT.—The term ‘‘overpay-
ment’’ means any finally determined funds that 
a person receives or retains under title XVIII, 
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XIX, or XXI to which the person, after applica-
ble reconciliation, is not entitled under such title. 
‘‘(C) PERSON.—The term ‘person’ means a 
provider of services, supplier, Medicaid managed 
care 
organization 
(as 
defined 
in 
section 
1903(m)(1)(A)), Medicare Advantage organiza-
tion (as defined in section 1859(a)(1)), or PDP 
sponsor (as defined in section 1860D–41(a)(13)), 
but excluding a beneficiary.’’. 
SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIVERS 
FOR OIG EXCLUSIONS TO BENEFICIARIES OF 
ANY FEDERAL HEALTH CARE PROGRAM. 
Section 1128(c)(3)(B) of the Social Security Act (42 
U.S.C. 1320a–7(c)(3)(B)) is amended by striking ‘‘individ-
uals entitled to benefits under part A of title XVIII or en-
rolled under part B of such title, or both’’ and inserting 
‘‘beneficiaries (as defined in section 1128A(i)(5)) of that 
program’’. 
SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL 
DIALYSIS FACILITIES. 
Section 1881(b) of the Social Security Act (42 U.S.C. 
1395rr(b)) is amended by adding at the end the following 
new paragraph: 
‘‘(15) For purposes of evaluating or auditing pay-
ments made to renal dialysis facilities for items and serv-
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ices under this section under paragraph (1), each such renal 
dialysis facility, upon the request of the Secretary, shall 
provide to the Secretary access to information relating to 
any ownership or compensation arrangement between such 
facility and the medical director of such facility or between 
such facility and any physician.’’. 
SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 
ALTERNATE PAYEES REQUIRED TO REGISTER 
UNDER MEDICARE. 
(a) MEDICARE.—Section 1866(j)(1) of the Social Secu-
rity Act (42 U.S.C. 1395cc(j)(1)) is amended by adding at 
the end the following new subparagraph: 
‘‘(D) BILLING
AGENTS
AND
CLEARING-
HOUSES REQUIRED TO BE REGISTERED UNDER 
MEDICARE.—Any agent, clearinghouse, or other 
alternate payee that submits claims on behalf of 
a health care provider must be registered with 
the Secretary in a form and manner specified by 
the Secretary.’’. 
(b) MEDICAID.—For a similar provision with respect 
to the Medicaid program under title XIX of the Social Secu-
rity Act, see section 1759. 
(c) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to claims submitted on or after Jan-
uary 1, 2012. 
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SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO 
FALSE CLAIMS ACT AMENDMENTS. 
Section 1128A of the Social Security Act, as amended 
by sections 1611, 1612, 1613, and 1615, is further amend-
ed— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘to an of-
ficer, employee, or agent of the United States, or 
of any department or agency thereof, or of any 
State agency (as defined in subsection (i)(1))’’; 
(B) in paragraph (4)— 
(i) in the matter preceding subpara-
graph (A), by striking ‘‘participating in a 
program under title XVIII or a State health 
care program’’ and inserting ‘‘participating 
in a Federal health care program (as de-
fined in section 1128B(f))’’; and 
(ii) in subparagraph (A), by striking 
‘‘title XVIII or a State health care pro-
gram’’ and inserting ‘‘a Federal health care 
program (as defined in section 1128B(f))’’; 
(C) by striking ‘‘or’’ at the end of para-
graph (10); 
(D) by inserting after paragraph (11) the 
following new paragraphs: 
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‘‘(12) conspires to commit a violation of this sec-
tion; or 
‘‘(13) knowingly makes, uses, or causes to be 
made or used, a false record or statement material to 
an obligation to pay or transmit money or property 
to a Federal health care program, or knowingly con-
ceals or knowingly and improperly avoids or de-
creases an obligation to pay or transmit money or 
property to a Federal health care program;’’; and 
(E) in the matter following paragraph (13), 
as inserted by subparagraph (D),— 
(i) by striking ‘‘or’’ before ‘‘in cases 
under paragraph (11)’’; and 
(ii) by inserting ‘‘, in cases under 
paragraph (12), $50,000 for any violation 
described in this section committed in fur-
therance of the conspiracy involved; or in 
cases under paragraph (13), $50,000 for 
each false record or statement, or conceal-
ment, avoidance, or decrease’’ after ‘‘by an 
excluded individual’’; and 
(F) in the second sentence, by striking ‘‘such 
false statement, omission, or misrepresentation)’’ 
and inserting ‘‘such false statement or misrepre-
sentation, in cases under paragraph (12), an as-
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sessment of not more than 3 times the total 
amount that would otherwise apply for any vio-
lation described in this section committed in fur-
therance of the conspiracy involved, or in cases 
under paragraph (13), an assessment of not more 
than 3 times the total amount of the obligation 
to which the false record or statment was mate-
rial or that was avoided or decreased)’’. 
(2) in subsection (c)(1), by striking ‘‘six years’’ 
and inserting ‘‘10 years’’; and 
(3) in subsection (i)— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) The term ‘claim’ means any application, re-
quest, or demand, whether under contract, or other-
wise, for money or property for items and services 
under a Federal health care program (as defined in 
section 1128B(f)), whether or not the United States or 
a State agency has title to the money or property, 
that— 
‘‘(A) is presented or caused to be presented 
to an officer, employee, or agent of the United 
States, or of any department or agency thereof, 
or of any State agency (as defined in subsection 
(i)(1)); or 
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‘‘(B) is made to a contractor, grantee, or 
other recipient if the money or property is to be 
spent or used on the Federal health care pro-
gram’s behalf or to advance a Federal health 
care program interest, and if the Federal health 
care program— 
‘‘(i) provides or has provided any por-
tion of the money or property requested or 
demanded; or 
‘‘(ii) will reimburse such contractor, 
grantee, or other recipient for any portion 
of the money or property which is requested 
or demanded.’’; 
(B) by amending paragraph (3) to read as 
follows: 
‘‘(3) The term ‘item or service’ means, without 
limitation, any medical, social, management, admin-
istrative, or other item or service used in connection 
with or directly or indirectly related to a Federal 
health care program.’’; 
(C) in paragraph (6)— 
(i) in subparagraph (C), by striking at 
the end ‘‘or’’; 
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(ii) in the first subparagraph (D), by 
striking at the end the period and inserting 
‘‘; or’’; and 
(iii) by redesignating the second sub-
paragraph (D) as a subparagraph (E); 
(D) by amending paragraph (7) to read as 
follows: 
‘‘(7) The terms ‘knowing’, ‘knowingly’, and 
‘should know’ mean that a person, with respect to in-
formation— 
‘‘(A) has actual knowledge of the informa-
tion; 
‘‘(B) acts in deliberate ignorance of the 
truth or falsity of the information; or 
‘‘(C) acts in reckless disregard of the truth 
or falsity of the information; 
and require no proof of specific intent to defraud.’’; 
and 
(E) by adding at the end the following new 
paragraphs: 
‘‘(8) The term ‘obligation’ means an established 
duty, whether or not fixed, arising from an express or 
implied contractual, grantor-grantee, or licensor-li-
censee relationship, from a fee-based or similar rela-
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tionship, from statute or regulation, or from the re-
tention of any overpayment. 
‘‘(9) The term ‘material’ means having a natural 
tendency to influence, or be capable of influencing, the 
payment or receipt of money or property.’’. 
Subtitle D—Access to Information 
Needed 
To 
Prevent 
Fraud, 
Waste, and Abuse 
SEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN-
TIFY FRAUD, WASTE, AND ABUSE. 
Section 1128G of the Social Security Act, as added 
by section 1631 and amended by sections 1632 and 1641, 
is further amended by adding at the end the following new 
subsection; 
‘‘(d) ACCESS TO INFORMATION NECESSARY TO IDEN-
TIFY FRAUD, WASTE, AND ABUSE.—For purposes of law 
enforcement activity, and to the extent consistent with ap-
plicable disclosure, privacy, and security laws, including 
the Health Insurance Portability and Accountability Act 
of 1996 and the Privacy Act of 1974, and subject to any 
information systems security requirements enacted by law 
or otherwise required by the Secretary, the Attorney General 
shall have access, facilitation by the Inspector General of 
the Department of Health and Human Services, to claims 
and payment data relating to titles XVIII and XIX, in con-
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sultation with the Centers for Medicare & Medicaid Services 
or the owner of such data.’’. 
SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THE 
HEALTHCARE INTEGRITY AND PROTECTION 
DATA BANK AND THE NATIONAL PRACTI-
TIONER DATA BANK. 
(a) IN GENERAL.—To eliminate duplication between 
the Healthcare Integrity and Protection Data Bank 
(HIPDB) established under section 1128E of the Social Se-
curity Act and the National Practitioner Data Bank 
(NPBD) established under the Health Care Quality Im-
provement Act of 1986, section 1128E of the Social Security 
Act (42 U.S.C. 1320a-7e) is amended— 
(1) in subsection (a), by striking ‘‘Not later 
than’’ and inserting ‘‘Subject to subsection (h), not 
later than’’; 
(2) in the first sentence of subsection (d)(2), by 
striking ‘‘(other than with respect to requests by Fed-
eral agencies)’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(h) SUNSET OF THE HEALTHCARE INTEGRITY AND 
PROTECTION DATA BANK; TRANSITION PROCESS.—Effec-
tive upon the enactment of this subsection, the Secretary 
shall implement a process to eliminate duplication between 
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the Healthcare Integrity and Protection Data Bank (in this 
subsection referred to as the ‘HIPDB’ established pursuant 
to subsection (a) and the National Practitioner Data Bank 
(in this subsection referred to as the ‘NPDB’) as imple-
mented under the Health Care Quality Improvement Act 
of 1986 and section 1921 of this Act, including systems test-
ing necessary to ensure that information formerly collected 
in the HIPDB will be accessible through the NPDB, and 
other activities necessary to eliminate duplication between 
the two data banks. Upon the completion of such process, 
notwithstanding any other provision of law, the Secretary 
shall cease the operation of the HIPDB and shall collect 
information required to be reported under the preceding 
provisions of this section in the NPDB. Except as otherwise 
provided in this subsection, the provisions of subsections (a) 
through (g) shall continue to apply with respect to the re-
porting of (or failure to report), access to, and other treat-
ment of the information specified in this section.’’. 
(b) ELIMINATION OF THE RESPONSIBILITY OF THE 
HHS OFFICE
OF
THE INSPECTOR GENERAL.—Section 
1128C(a)(1) of the Social Security Act (42 U.S.C. 1320a- 
7c(a)(1)) is amended— 
(1) in subparagraph (C), by adding at the end 
‘‘and’’; 
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(2) in subparagraph (D), by striking at the end 
‘‘, and’’ and inserting a period; and 
(3) by striking subparagraph (E). 
(c) SPECIAL PROVISION FOR ACCESS TO THE NA-
TIONAL PRACTITIONER DATA BANK BY THE DEPARTMENT 
OF VETERANS AFFAIRS.— 
(1) IN
GENERAL.—Notwithstanding any other 
provision of law, during the one year period that be-
gins on the effective date specified in subsection (e)(1), 
the information described in paragraph (2) shall be 
available from the National Practitioner Data Bank 
(described in section 1921 of the Social Security Act) 
to the Secretary of Veterans Affairs without charge. 
(2) INFORMATION DESCRIBED.—For purposes of 
paragraph (1), the information described in this 
paragraph is the information that would, but for the 
amendments made by this section, have been available 
to the Secretary of Veterans Affairs from the 
Healthcare Integrity and Protection Data Bank. 
(d) FUNDING.—Notwithstanding any provisions of this 
Act, sections 1128E(d)(2) and 1817(k)(3) of the Social Se-
curity Act, or any other provision of law, there shall be 
available for carrying out the transition process under sec-
tion 1128E(h) of the Social Security Act over the period 
required to complete such process, and for operation of the 
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National Practitioner Data Bank until such process is com-
pleted, without fiscal year limitation— 
(1) any fees collected pursuant to section 
1128E(d)(2) of such Act; and 
(2) such additional amounts as necessary, from 
appropriations available to the Secretary and to the 
Office of the Inspector General of the Department of 
Health and Human Services under clauses (i) and 
(ii), respectively, of section 1817(k)(3)(A) of such Act, 
for costs of such activities during the first 12 months 
following the date of the enactment of this Act. 
(e) EFFECTIVE DATE.—The amendments made— 
(1) by subsection (a)(2) shall take effect on the 
first day after the Secretary of Health and Human 
Services certifies that the process implemented pursu-
ant to section 1128E(h) of the Social Security Act (as 
added by subsection (a)(3)) is complete; and 
(2) by subsection (b) shall take effect on the ear-
lier of the date specified in paragraph (1) or the first 
day of the second succeeding fiscal year after the fis-
cal year during which this Act is enacted. 
SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU-
RITY STANDARDS. 
The provisions of sections 262(a) and 264 of the Health 
Insurance Portability and Accountability Act of 1996 (and 
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standards promulgated pursuant to such sections) and the 
Privacy Act of 1974 shall apply with respect to the provi-
sions of this subtitle and amendments made by this subtitle. 
TITLE VII—MEDICAID AND CHIP 
Subtitle A—Medicaid and Health 
Reform 
SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME 
BELOW 1331⁄3 PERCENT OF THE FEDERAL POV-
ERTY LEVEL. 
(a) ELIGIBILITY FOR NON-TRADITIONAL INDIVIDUALS 
WITH INCOME BELOW 1331⁄3 PERCENT OF THE FEDERAL 
POVERTY LEVEL.— 
(1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 
the Social Security Act (42 U.S.C. 1396b(a)(10)(A)(i) 
is amended— 
(A) by striking ‘‘or’’ at the end of subclause 
(VI); 
(B) by adding ‘‘or’’ at the end of subclause 
(VII); and 
(C) by adding at the end the following new 
subclause: 
‘‘(VIII) who are under 65 years of 
age, who are not described in a pre-
vious subclause of this clause, and who 
are in families whose income (deter-
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mined using methodologies and proce-
dures specified by the Secretary in con-
sultation with the Health Choices Com-
missioner) does not exceed 1331⁄3 per-
cent of the income official poverty line 
(as defined by the Office of Manage-
ment and Budget, and revised annu-
ally in accordance with section 673(2) 
of the Omnibus Budget Reconciliation 
Act of 1981) applicable to a family of 
the size involved;’’. 
(2) INCREASED
FMAP
FOR
NON-TRADITIONAL 
MEDICAID ELIGIBLE INDIVIDUALS.—Section 1905 of 
such Act (42 U.S.C. 1396d) is amended— 
(A) in the first sentence of subsection (b), by 
striking ‘‘and’’ before ‘‘(4)’’ and by inserting be-
fore the period at the end the following: ‘‘, and 
(5) 100 percent (or 90 percent for periods begin-
ning with 2015) with respect to amounts de-
scribed in subsection (y)’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(y) ADDITIONAL EXPENDITURES SUBJECT
TO IN-
CREASED FMAP.—For purposes of section 1905(b)(5), the 
amounts described in this subsection are the following: 
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‘‘(1) Amounts expended for medical assistance 
for individuals described in subclause (VIII) of sec-
tion 1902(a)(10)(A)(i).’’. 
(3) CONSTRUCTION.—Nothing in this subsection 
shall be construed as not providing for coverage under 
subclause (VIII) of section 1902(a)(10)(A)(i) of the 
Social Security Act, as added by paragraph (1) of, 
and an increased FMAP under the amendment made 
by paragraph (2) for, an individual who has been 
provided medical assistance under title XIX of the Act 
under a demonstration waiver approved under section 
1115 of such Act or with State funds. 
(4) CONFORMING AMENDMENTS.— 
(A) Section 1903(f)(4) of the Social Secu-
rity Act (42 U.S.C. 1396b(f)(4)) is amended by 
inserting 
‘‘1902(a)(10)(A)(i)(VIII),’’ 
after 
‘‘1902(a)(10)(A)(i)(VII),’’. 
(B) Section 1905(a) of such Act (42 U.S.C. 
1396d(a)), as amended by sections 1714(a)(4) 
and 1731(c), is further amended, in the matter 
preceding paragraph (1)— 
(i) by striking ‘‘or’’ at the end of clause 
(xiv); 
(ii) by adding ‘‘or’’ at the end of clause 
(xv); and 
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(iii) by inserting after clause (xv) the 
following: 
‘‘(xvi) individuals described in section 
1902(a)(10)(A)(i)(VIII),’’. 
(b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELIGI-
BLE INDIVIDUALS WITH INCOME NOT EXCEEDING 1331⁄3 
PERCENT OF THE FEDERAL POVERTY LEVEL .— 
(1) IN GENERAL.—Section 1902(a)(10)(A)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(a)(10)(A)(i)), as amended by subsection (a), is 
amended— 
(A) by striking ‘‘or’’ at the end of subclause 
(VII); 
(B) by adding ‘‘or’’ at the end of subclause 
(VIII); and 
(C) by adding at the end the following new 
subclause: 
‘‘(IX) who are under 65 years of 
age, who would be eligible for medical 
assistance under the State plan under 
one of subclauses (I) through (VII) 
(based on the income standards, meth-
odologies, and procedures in effect as of 
June 16, 2009) but for income and 
who are in families whose income does 
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not exceed 1331⁄3 percent of the income 
official poverty line (as defined by the 
Office of Management and Budget, and 
revised annually in accordance with 
section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981) applicable 
to a family of the size involved;’’. 
(2) INCREASED FMAP FOR CERTAIN TRADITIONAL 
MEDICAID ELIGIBLE INDIVIDUALS.—Section 1905(y) 
of such Act (42 U.S.C. 1396d(b)), as added by sub-
section (a)(2)(B), is amended by inserting ‘‘or (IX)’’ 
after ‘‘(VIII)’’. 
(3) CONSTRUCTION.—Nothing in this subsection 
shall be construed as not providing for coverage under 
subclause (IX) of section 1902(a)(10)(A)(i) of the So-
cial Security Act, as added by paragraph (1) of, and 
an increased FMAP under the amendment made by 
paragraph (2) for, an individual who has been pro-
vided medical assistance under title XIX of the Act 
under a demonstration waiver approved under section 
1115 of such Act or with State funds. 
(4) 
CONFORMING
AMENDMENT.—Section 
1903(f)(4) of the Social Security Act (42 U.S.C. 
1396b(f)(4)), as amended by subsection (a)(4), is 
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amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after 
‘‘1902(a)(10)(A)(i)(VIII),’’. 
(c) INCREASED MATCHING RATE
FOR TEMPORARY 
COVERAGE OF CERTAIN NEWBORNS.—Section 1905(y) of 
such Act, as added by subsection (a)(2)(B), is amended— 
(1) in paragraph (1), by inserting before the pe-
riod at the end the following: ‘‘, and who is not pro-
vided medical assistance under section 1943(b)(2) of 
this title or section 205(d)(1)(B) of the America’s Af-
fordable Health Choices Act of 2009’’; and 
(2) by adding at the end the following: 
‘‘(2) Amounts expended for medical assistance 
for children described in section 203(d)(1)(A) of the 
America’s Affordable Health Choices Act of 2009 dur-
ing the time period specified in such section.’’. 
(d) NETWORK ADEQUACY.—Section 1932(a)(2) of the 
Social Security Act (42 U.S.C. 1396u–2(a)(2)) is amended 
by adding at the end the following new subparagraph: 
‘‘(D) ENROLLMENT
OF
NON-TRADITIONAL 
MEDICAID ELIGIBLES.—A State may not require 
under paragraph (1) the enrollment in a man-
aged care entity of an individual described in 
section 1902(a)(10)(A)(i)(VIII) unless the State 
demonstrates, to the satisfaction of the Secretary, 
that the entity, through its provider network and 
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other arrangements, has the capacity to meet the 
health, mental health, and substance abuse needs 
of such individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the first day of Y1, and shall 
apply with respect to items and services furnished on or 
after such date. 
SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER-
TAIN MEDICAID ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Title XIX of the Social Security 
Act is amended by adding at the end the following new sec-
tion: 
‘‘ REQUIREMENTS AND SPECIAL RULES FOR CERTAIN 
MEDICAID ELIGIBLE INDIVIDUALS 
‘‘SEC. 1943. (a) COORDINATION WITH NHI EXCHANGE 
THROUGH MEMORANDUM OF UNDERSTANDING.— 
‘‘(1) IN GENERAL.—The State shall enter into a 
Medicaid memorandum of understanding described in 
section 205(e)(3) of the America’s Affordable Health 
Choices Act of 2009 with the Health Choices Commis-
sioner, acting in consultation with the Secretary, 
with respect to coordinating the implementation of 
the provisions of division A of such Act with the State 
plan under this title in order to ensure the enrollment 
of Medicaid eligible individuals in acceptable cov-
erage. Nothing in this section shall be construed as 
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permitting such memorandum to modify or vitiate 
any requirement of a State plan under this title. 
‘‘(2) ENROLLMENT OF EXCHANGE-REFERRED IN-
DIVIDUALS.— 
‘‘(A) 
NON-TRADITIONAL
INDIVIDUALS.— 
Pursuant to such memorandum the State shall 
accept without further determination the enroll-
ment under this title of an individual deter-
mined by the Commissioner to be a non-tradi-
tional Medicaid eligible individual. The State 
shall not do any redeterminations of eligibility 
for such individuals unless the periodicity of 
such redeterminations is consistent with the peri-
odicity for redeterminations by the Commis-
sioner of eligibility for affordability credits 
under subtitle C of title II of division A of the 
America’s Affordable Health Choices Act of 2009, 
as specified under such memorandum. 
‘‘(B) TRADITIONAL
INDIVIDUALS.—Pursu-
ant to such memorandum, the State shall accept 
without further determination the enrollment 
under this title of an individual determined by 
the Commissioner to be a traditional Medicaid 
eligible individual. The State may do redeter-
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minations of eligibility of such individual con-
sistent with such section and the memorandum. 
‘‘(3) DETERMINATIONS OF ELIGIBILITY FOR AF-
FORDABILITY CREDITS.—If the Commissioner deter-
mines that a State Medicaid agency has the capacity 
to make determinations of eligibility for affordability 
credits under subtitle C of title II of division A of the 
America’s Affordable Health Choices Act of 2009, 
under such memorandum— 
‘‘(A) the State Medicaid agency shall con-
duct such determinations for any Exchange-eligi-
ble individual who requests such a determina-
tion; 
‘‘(B) in the case that a State Medicaid 
agency determines that an Exchange-eligible in-
dividual is not eligible for affordability credits, 
the agency shall forward the information on the 
basis of which such determination was made to 
the Commissioner; and 
‘‘(C) the Commissioner shall reimburse the 
State Medicaid agency for the costs of conducting 
such determinations. 
‘‘(b) TREATMENT OF CERTAIN NEWBORNS.— 
‘‘(1) IN GENERAL.—In the case of a child who is 
deemed under section 205(d)(1) of the America’s Af-
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fordable Health Choices Act of 2009 to be a non-tradi-
tional Medicaid eligible individual and enrolled 
under this title pursuant to such section, the State 
shall provide for a determination, by not later than 
the end of the period referred to in subparagraph (A) 
of such section, of the child’s eligibility for medical 
assistance under this title. 
‘‘(2) EXTENDED
TREATMENT
AS
TRADITIONAL 
MEDICAID
ELIGIBLE
INDIVIDUAL.—In accordance 
with subparagraph (B) of section 205(d)(1) of the 
America’s Affordable Health Choices Act of 2009, in 
the case of a child described in subparagraph (A) of 
such section who at the end of the period referred to 
in such subparagraph is not otherwise covered under 
acceptable coverage, the child shall be deemed (until 
such time as the child obtains such coverage or the 
State otherwise makes a determination of the child’s 
eligibility for medical assistance under its plan under 
this title pursuant to paragraph (1)) to be a tradi-
tional Medicaid eligible individual described in sec-
tion 1902(l)(1)(B). 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) MEDICAID ELIGIBLE INDIVIDUALS.—In this 
section, the terms ‘Medicaid eligible individual’, ‘tra-
ditional Medicaid eligible individual’, and ‘non-tradi-
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tional Medicaid eligible individual’ have the mean-
ings given such terms in section 205(e)(4) of the 
America’s Affordable Health Choices Act of 2009. 
‘‘(2) MEMORANDUM.—The term ‘memorandum’ 
means a Medicaid memorandum of understanding 
under section 205(e)(3) of the America’s Affordable 
Health Choices Act of 2009. 
‘‘(3) Y1.—The term ‘Y1’ has the meaning given 
such term in section 100(c) of the America’s Afford-
able Health Choices Act of 2009.’’. 
(b) CONFORMING AMENDMENTS TO ERROR RATE.— 
(1) Section 1903(u)(1)(D) of the Social Security 
Act (42 U.S.C. 1396b(u)(1)(D)) is amended by add-
ing at the end the following new clause: 
‘‘(vi) In determining the amount of erroneous excess 
payments, there shall not be included any erroneous pay-
ments made that are attributable to an error in an eligi-
bility determination under subtitle C of title II of division 
A of the America’s Affordable Health Choices Act of 2009.’’. 
(2) Section 2105(c)(11) of such Act (42 U.S.C. 
1397ee(c)(11)) is amended by adding at the end the 
following new sentence: ‘‘Clause (vi) of section 
1903(u)(1)(D) shall apply with respect to the applica-
tion of such requirements under this title and title 
XIX.’’. 
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791 
SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF ELIGI-
BILITY. 
(a) CHIP MAINTENANCE OF ELIGIBILITY.—Section 
1902 of the Social Security Act (42 U.S.C. 1396a) is 
amended— 
(1) in subsection (a), as amended by section 
1631(b)(1)(D)— 
(A) by striking ‘‘and’’ at the end of para-
graph (73); 
(B) by striking the period at the end of 
paragraph (74) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (74) the 
following new paragraph: 
‘‘(75) provide for maintenance of effort under the 
State child health plan under title XXI in accordance 
with subsection (gg).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(gg) CHIP MAINTENANCE OF ELIGIBILITY REQUIRE-
MENT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), as 
a condition of its State plan under this title under 
subsection (a)(75) and receipt of any Federal finan-
cial assistance under section 1903(a) for calendar 
quarters beginning after the date of the enactment of 
this subsection and before CHIP MOE termination 
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792 
date specified in paragraph (3), a State shall not 
have in effect eligibility standards, methodologies, or 
procedures under its State child health plan under 
title XXI (including any waiver under such title or 
under section 1115 that is permitted to continue ef-
fect) that are more restrictive than the eligibility 
standards, methodologies, or procedures, respectively, 
under such plan (or waiver) as in effect on June 16, 
2009. 
‘‘(2) LIMITATION.—Paragraph (1) shall not be 
construed as preventing a State from imposing a lim-
itation described in section 2110(b)(5)(C)(i)(II) for a 
fiscal year in order to limit expenditures under its 
State child health plan under title XXI to those for 
which Federal financial participation is available 
under section 2105 for the fiscal year. 
‘‘(3) CHIP MOE TERMINATION DATE.—In para-
graph (1), the ‘CHIP MOE termination date’ for a 
State is the date that is the first day of Y1 (as defined 
in section 100(c) of the America’s Affordable Health 
Choices Act of 2009) or, if later, the first day after 
such date that both of the following determinations 
have been made: 
‘‘(A) The Health Choices Commissioner has 
determined that the Health Insurance Exchange 
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793 
has the capacity to support the participation of 
CHIP enrollees who are Exchange-eligible indi-
viduals (as defined in section 202(b) of the 
America’s Affordable Health Choices Act of 
2009), 
‘‘(B) The Secretary has determined that— 
‘‘(i) comparable coverage, as specified 
in section 202(g) of the America’s Afford-
able Health Choices Act of 2009, is avail-
able through such Exchange; and 
‘‘(ii) procedures have been established 
for transferring CHIP enrollees into accept-
able coverage (as defined for purposes of 
such Act) without interruption of coverage 
or a written plan of treatment. 
The Secretary shall recommend to Congress any legis-
lative changes needed to effectuate this paragraph. In 
this paragraph, the term ‘CHIP enrollee’ means a 
targeted low-income child or (if the State has elected 
the option under section 2112, a targeted low-income 
pregnant woman) who is or otherwise would be (but 
for acceptable coverage) eligible for child health assist-
ance or pregnancy-related assistance, respectively, 
under the State child health plan referred to in para-
graph (1).’’. 
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794 
(b) MEDICAID MAINTENANCE
OF EFFORT; SIMPLI-
FYING AND COORDINATING ELIGIBILITY RULES BETWEEN 
EXCHANGE AND MEDICAID.— 
(1) IN GENERAL.—Section 1903 of such Act (42 
U.S.C. 1396b) is amended by adding at the end the 
following new subsection: 
‘‘(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI-
FYING AND COORDINATING ELIGIBILITY RULES BETWEEN 
HEALTH INSURANCE EXCHANGE AND MEDICAID.— 
‘‘(1) MAINTENANCE OF EFFORT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a State is not eligible for payment 
under subsection (a) for a calendar quarter be-
ginning after the date of the enactment of this 
subsection if eligibility standards, methodologies, 
or procedures under its plan under this title (in-
cluding any waiver under this title or under sec-
tion 1115 that is permitted to continue effect) 
that are more restrictive than the eligibility 
standards, methodologies, or procedures, respec-
tively, under such plan (or waiver) as in effect 
on June 16, 2009. The Secretary shall extend 
such a waiver (including the availability of Fed-
eral financial participation under such waiver) 
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for such period as may be required for a State 
to meet the requirement of the previous sentence. 
‘‘(B) EXCEPTION FOR CERTAIN WAIVERS.— 
In the case of a State waiver under section 1115 
in effect on June 16, 2009, that permits individ-
uals to be eligible solely to receive a premium or 
cost-sharing subsidy for individual or group 
health insurance coverage, effective for coverage 
provided in Y1— 
‘‘(i) the Secretary shall permit the 
State to amend such waiver to apply more 
restrictive eligibility standards, methodolo-
gies, or procedures with respect to such in-
dividuals under such waiver; and 
‘‘(ii) the application of such more re-
strictive, standards, methodologies, or proce-
dures under such an amendment shall not 
be considered in violation of the require-
ment of subparagraph (A). 
‘‘(2) REMOVAL
OF
ASSET
TEST
FOR
CERTAIN 
ELIGIBILITY CATEGORIES.— 
‘‘(A) IN GENERAL.—A State is not eligible 
for payment under subsection (a) for a calendar 
quarter beginning on or after the first day of Y1 
(as defined in section 100(c) of the America’s Af-
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gram 
(as 
defined 
in 
section 
1128B(f))’’; 
(C) by striking ‘‘or’’ at the end of 
paragraph (10); 
(D) by inserting after paragraph 
(11) the following new paragraphs: 
‘‘(12) conspires to commit a violation 
of this section; or 
‘‘(13) 
knowingly 
makes, 
uses, 
or 
causes to be made or used, a false record 
or statement material to an obligation to 
pay or transmit money or property to a 
Federal health care program, or know-
ingly conceals or knowingly and improp-
erly avoids or decreases an obligation to 
pay or transmit money or property to a 
Federal health care program;’’; and 
(E) in the matter following para-
graph (13), as inserted by subpara-
graph (D)— 
(i) by striking ‘‘or’’ before ‘‘in 
cases under paragraph (11)’’; and 
(ii) by inserting ‘‘, in cases 
under paragraph (12), $50,000 for 
any violation described in this 
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section committed in furtherance 
of the conspiracy involved; or in 
cases 
under 
paragraph 
(13), 
$50,000 for each false record or 
statement, or concealment, avoid-
ance, or decrease’’ after ‘‘by an ex-
cluded individual’’; and 
(F) in the second sentence, by 
striking ‘‘such false statement, omis-
sion, or misrepresentation)’’ and in-
serting ‘‘such false statement or mis-
representation, in cases under para-
graph (12), an assessment of not more 
than 3 times the total amount that 
would otherwise apply for any viola-
tion described in this section com-
mitted in furtherance of the con-
spiracy involved, or in cases under 
paragraph (13), an assessment of not 
more than 3 times the total amount of 
the obligation to which the false 
record or statement was material or 
that was avoided or decreased)’’. 
(2) in subsection (c)(1), by striking 
‘‘six years’’ and inserting ‘‘10 years’’; and 
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