9 of the months in such 12-consecutive month
period. For purposes of this subsection, an indi-
vidual meeting the requirements of the preced-
ing sentence shall be treated as performing
services during the entire 12-month period.
‘‘(C) APPLICABLE
RURAL
COMMUNITY.—
The term ‘applicable rural community’ means—
‘‘(i) any political subdivision of a
State which—
‘‘(I) has a population of 5,000 or
less, and
‘‘(II) has a per capita income of
$15,000 or less, or
‘‘(ii) an Indian reservation which has
a per capita income of $15,000 or less.
‘‘(4) QUALIFIED
EDUCATIONAL
LOAN.—The
term ‘qualified educational loan’ means any indebt-
edness to pay qualified tuition and related expenses
(within the meaning of section 117(b)) and reason-
able living expenses—
‘‘(A) which are paid or incurred—
‘‘(i) as a candidate for a degree as a
medical doctor at an educational institu-
tion described in section 170(b)(1)(A)(ii),
or
‘‘(ii) in connection with courses of in-
struction at such an institution necessary
for certification as a registered nurse,
nurse practitioner, or physician’s assistant,
and
‘‘(B) which are paid or incurred within a
reasonable time before or after such indebted-
ness is incurred.
‘‘(5) RECAPTURE.—If an individual fails to
carry out a qualified rural medical practice agree-
ment during any taxable year, then—
‘‘(A) no deduction with respect to such
agreement shall be allowable by reason of sub-
section (h)(2)(F) for such taxable year and any
subsequent taxable year, and
‘‘(B) there shall be included in gross in-
come for such taxable year the aggregate
amount of the deductions allowable under this
section (by reason of subsection (h)(2)(F)) for
all preceding taxable years.
‘‘(6) DEFINITIONS.—For purposes of this sub-
section, the terms ‘registered nurse’, ‘nurse practi-
tioner’, and ‘physician’s assistant’ have the meaning
given such terms by section 1861 of the Social Secu-
rity Act.’’.
(3) DEDUCTION ALLOWED IN COMPUTING AD-
JUSTED
GROSS
INCOME.—Section 62(a) of such
Code is amended by inserting after paragraph (13)
the following new paragraph:
‘‘(14) INTEREST ON STUDENT LOANS OF RURAL
HEALTH PROFESSIONALS.—The deduction allowable
by reason of section 163(h)(2)(F) (relating to stu-
dent loan payments of medical professionals practic-
ing in rural areas).’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act.
Subtitle E—Malpractice Reform
PART I—DEFINITIONS
SEC. 141. DEFINITIONS.
For purposes of this subtitle:
(1) ALTERNATIVE DISPUTE RESOLUTION SYS-
TEM.—The term ‘‘alternative dispute resolution sys-
tem’’ means a system that is enacted or adopted by
a State to resolve health care liability actions as an
alternative to a judicial proceeding in a Federal or
State court.
(2) CONCERTED ACTION AND ACTING IN CON-
CERT.—The terms ‘‘concerted action’’ and ‘‘acting
in concert’’ mean the participation in joint conduct
by two or more persons who agree to jointly partici-
pate in such conduct with actual knowledge of the
wrongfulness of the conduct.
(3) ECONOMIC LOSSES.—The term ‘‘economic
losses’’ means losses for health care provider and
medical expenses, lost wages, lost employment, and
other pecuniary losses.
(4) HEALTH
CARE
LIABILITY
ACTION.—The
term ‘‘health care liability action’’ means any civil
action or proceeding in any judicial tribunal brought
pursuant to Federal or State law against a health
care provider alleging that injury was suffered by
the claimant as a result of any act or omission by
such provider, without regard to the theory of liabil-
ity asserted in the action. Such term includes a
claim, third-party claim, cross-claim, counter-claim,
or contribution-claim.
(5) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means—
(A) any individual who provides health
care services in a State and who is required by
State law or regulation to be licensed or cer-
tified by the State to provide such services in
the State; and
(B) any organization or institution that is
engaged in the delivery of health care services
in a State and that is required by State law or
regulation to be licensed or certified by the
State to engage in the delivery of such services
in the State.
(6) INJURY.—The term ‘‘injury’’ means any in-
jury, illness, disease, or other harm suffered by an
individual as a result of the provision of health care
services by a health care provider.
(7) NONECONOMIC LOSSES.—The term ‘‘non-
economic losses’’ means losses for physical and emo-
tional pain, suffering, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss
of 
companionship, 
consortium, 
and 
other
nonpecuniary losses.
(8) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
(9) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands,
and Guam.
PART II—TORT REFORM OF HEALTH CARE
LIABILITY ACTIONS
SEC. 142. APPLICATION TO CIVIL ACTIONS.
This part shall apply to any health care liability ac-
tion brought in any Federal or State court. This part shall
not be construed to create or effect any cause of action
or theory of liability recognized in any Federal or State
proceeding.
SEC. 143. DAMAGES.
(a) LIMITATION ON NONECONOMIC DAMAGES.—The
total amount of damages which may be awarded to an in-
dividual and the family members of such individual for
noneconomic losses resulting from an injury which is the
subject of a health care liability action may not exceed
$250,000, regardless of the number of health care provid-
ers against whom such action is brought or the number
of such actions brought with respect to the injury.
(b) PAYMENTS.—With respect to a health care liabil-
ity action, no person may be required to pay more than
$100,000 in a single payment for an award of damages
for economic or noneconomic losses, but such person shall
be permitted to make such payments on a periodic basis.
The periods for such payments shall be determined by the
court.
(c) MANDATORY OFFSETS FOR DAMAGES PAID BY A
COLLATERAL SOURCE.—
(1) IN GENERAL.—The total amount of dam-
ages received by an individual in connection with a
health care liability action shall be reduced, in ac-
cordance with paragraph (2), by any other payment
which has been made or which will be made to such
individual to compensate such individual for an in-
jury, including payments under—
(A) Federal or State disability or sickness
programs;
(B) Federal, State, or private health insur-
ance programs;
(C) private disability insurance programs;
(D) employer wage continuation programs;
and
(E) any other source of payment intended
to compensate such individual for such injury.
(2) AMOUNT OF REDUCTION.—The amount by
which an award of damages to an individual for an
injury shall be reduced under paragraph (1) shall
be—
(A) the total amount of any payments
(other than such award) which have been made
or which will be made to such individual to
compensate such individual for such injury;
minus
(B) the amount paid by such individual (or
by the spouse, parent, or legal guardian of such
individual) to secure the payments described in
subparagraph (A).
(d) PUNITIVE DAMAGES.—
(1) LIMITATION.—With respect to a health care
liability action, punitive damages may not exceed the
sum of damages awarded for economic and non-
economic losses.
(2) DETERMINATION
OF
AMOUNT.—In deter-
mining the amount of punitive damages in a health
care liability action, the trier of fact shall consider
all relevant evidence, including—
(A) the severity of the harm caused by the
conduct of the defendant;
(B) the duration of the conduct or any
concealment of the conduct by the defendant;
(C) awards of punitive or exemplary dam-
ages to persons similarly situated to the claim-
ant; and
(D) prospective awards of economic and
noneconomic losses to persons similarly situated
to the claimant.
(e) ATTORNEYS’ FEES.—Compensation for reason-
able attorneys’ fees to be paid by each party in connection
with a health care liability action shall be determined by
the court after an evidentiary hearing and prior to final
disposition of the action. Attorneys’ fees shall be cal-
culated on the basis of an hourly rate or as a percentage
of the total damages awarded for economic and non-
economic losses and shall not exceed an amount that
would be considered reasonable based on the following:
(1) The time, labor, and skill necessary to prop-
erly perform the legal services required by the ac-
tion.
(2) The novelty and difficulty of the questions
involved in the action.
(3) The likelihood, if apparent to the client,
that the acceptance of employment with respect to
the client’s action will preclude other employment by
the attorney.
(4) The fee customarily charged in the locality
for similar legal services.
(5) The amount involved in the action and the
results obtained.
(6) The time limitations imposed by the client
or by the circumstances of the action.
(7) The nature and length of the professional
relationship between the attorney or attorneys and
the client.
(8) The experience, reputation, and ability of
the attorney or attorneys performing the services in
connection with the action.
(9) Whether the fee for services in connection
with the action is fixed or contingent.
SEC. 144. JOINT AND SEVERAL LIABILITY.
(a) IN GENERAL.—With respect to a health care li-
ability action, joint and several liability shall apply—
(1) to the liability of each defendant for dam-
ages for economic losses; and
(2) as between persons acting in concert where
the concerted action proximately caused the injury
for which one or more persons are found liable for
damages.
(b) NONECONOMIC DAMAGES.—With respect to a
health care liability action, joint and several liability shall
not apply to the liability of each defendant for damages
for noneconomic losses. A person found liable for damages
for noneconomic losses in any such action may—
(1) be found liable, if at all, only for those dam-
ages directly attributable to the pro rata share of
fault or responsibility of such person for the injury;
and
(2) not be found liable for damages attributable
to the pro rata share of fault or responsibility of any
other person (without regard to whether that person
is a party to the action) for the injury, including any
person bringing the action.
SEC. 145. STATUTE OF LIMITATIONS.
(a) IN GENERAL.—Except as provided in subsection
(b), no health care liability action may be initiated after
the expiration of the 2-year period that begins on the date
on which the alleged injury should reasonably have been
discovered, but in no event later than 4 years after the
date of the alleged occurrence of the injury.
(b) EXCEPTION FOR MINORS.—In the case of an al-
leged injury suffered by a minor who has not attained 6
years of age, no health care liability action may be initi-
ated after the expiration of the 2-year period that begins
on the date on which the alleged injury should reasonably
have been discovered, but in no event later than 4 years
after the date of the alleged occurrence of the injury or
the date on which the minor attains 8 years of age, which-
ever is later.
SEC. 146. PREEMPTION.
(a) IN GENERAL.—This part supersedes any State
law only to the extent that State law establishes higher
payment limits, permits the recovery of a greater amount
of damages or the awarding of a greater amount of attor-
neys’ fees, or establishes a longer period during which a
health care liability action may be initiated.
(b) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE
OF LAW OR VENUE.—Nothing in this part shall be con-
strued to—
(1) waive or affect any defense of sovereign im-
munity asserted by any State under any provision of
law;
(2) waive or affect any defense of sovereign im-
munity asserted by the United States;
(3) affect the applicability of any provision of
the Foreign Sovereign Immunities Act of 1976 (28
U.S.C. 1602 et seq.);
(4) preempt State choice-of-law rules with re-
spect to actions brought by a foreign nation or a cit-
izen of a foreign nation; or
(5) affect the right of any court to transfer
venue or to apply the law of a foreign nation or to
dismiss an action of a foreign nation or of a citizen
of a foreign nation on the ground of inconvenient
forum.
SEC. 147. EFFECTIVE DATE.
This part shall apply to any health care liability ac-
tion initiated after the expiration of the 2-year period that
begins on the date of the enactment of this Act.
PART III—ALTERNATIVE DISPUTE RESOLUTION
SYSTEMS
SEC. 148. GRANTS FOR ALTERNATIVE DISPUTE RESOLU-
TION SYSTEMS.
(a) IN GENERAL.—The Secretary shall make grants
to States from amounts appropriated under section 150
for the development and implementation of alternative dis-
pute resolution systems, under such terms as the Sec-
retary may require.
(b) APPLICATION.—
(1) IN
GENERAL.—No grant may be made
under this section unless an application is submitted
to the Secretary. Any such application shall—
(A) be submitted to the Secretary within 1
year after the notification of availability of
funds by the Secretary; and
(B) either—
(i) contain a certification by the chief
executive officer of the State that, on the
date the application is submitted, the State
has enacted, adopted, or otherwise has in
effect an alternative dispute resolution sys-
tem; or
(ii) contain a certification by the chief
executive officer of the State that, on the
date the application is submitted, the State
plans to develop an alternative dispute res-
olution system.
(2) SUPPORTING
DOCUMENTATION.—The cer-
tification required—
(A) under paragraph (1)(B)(i) shall be ac-
companied by supporting documentation, in-
cluding copies of relevant State statutes, rules,
procedures, regulations, judicial decisions, and
opinions of the State attorney general; and
(B) under paragraph (1)(B)(ii) shall be ac-
companied by supporting documentation, in-
cluding a detailed plan of the alternative dis-
pute resolution system to be developed by the
State.
(c) REVIEW
OF APPLICATIONS.—Within 90 days
after receiving an application under subsection (b), the
Secretary shall review and approve the application if, in
the determination of the Secretary, the application dem-
onstrates that—
(1) the State has enacted, adopted, or otherwise
has in effect an alternative dispute resolution sys-
tem; or
(2) the State has a plan to develop an alter-
native dispute resolution system.
(d) AMOUNT OF GRANT.—
(1) IN
GENERAL.—The amount of a grant
under this section shall be an amount that the Sec-
retary finds reasonable and necessary for the devel-
opment and implementation of the alternative dis-
pute resolution system of the State.
(2) REDUCTIONS FOR EXPENSES OF SUPPLIES,
EQUIPMENT, AND
EMPLOYEE
DETAIL.—The Sec-
retary may reduce the amount of a grant by—
(A) the fair market value of any supplies
or equipment furnished to the recipient by the
Secretary;
(B) the amount of pay, allowances, and
travel expenses incurred by any officer or em-
ployee of the Federal Government when such
officer or employee has been detailed to the re-
cipient; and
(C) the amount of any other costs incurred
in connection with the detail of an officer or
employee as described in subparagraph (B),
when the furnishing of such supplies or equipment
or the detail of such an officer or employee is for the
convenience, and at the request, of such recipient
and for the purpose of carrying out activities under
the grant.
(3) OPTION
TO
REFUSE
GRANT.—Not later
than 90 days after the Secretary makes a grant
under this section to a State, that State may send
notice to the Secretary that it refuses the grant. At
the time the State sends such notice, the State shall
return any amounts paid to it under such grant to
the Secretary.
(e) SUPPLEMENTAL GRANTS.—If amounts appro-
priated for grants under this section remain available be-
cause—
(1) a State has notified the Secretary that it re-
fuses the grant made to the State;
(2) a State has notified the Secretary that it
does not intend to use the full amount of a grant
awarded to the State; or
(3) the amount paid to a State under a grant
is reduced, offset, or repaid under subsection (d)(2),
the Secretary shall have the discretion to make supple-
mental grants to States, to the extent such amounts are
available, for the implementation of alternative dispute
resolution systems. A grant received by a State under this
subsection shall be used by the State to further implement
and evaluate the effectiveness of such a system.
(f) RECORDS.—
(1) IN GENERAL.—Each recipient of a grant
under this section shall keep such records as the
Secretary determines appropriate.
(2) AUDIT AND EXAMINATION OF RECORDS.—
The Secretary and the Comptroller General of the
United States shall have access to any books, docu-
ments, papers, and records of the recipient of a
grant under this section, for the purpose of conduct-
ing audits and examinations of such recipient that
are pertinent to such grant.
(g) REPORTS.—
(1) REPORTS ON COMPLIANCE.—
(A) 
SUBMISSION
OF
REPORTS.—Each
State shall annually submit a report to the Sec-
retary containing such information as the Sec-
retary may require to determine whether the
State is in compliance with the terms of the
grant made under this section.
(B) 
DETERMINATION
OF
NONCOMPLI-
ANCE.—If, after reviewing the report submitted
under subparagraph (A), the Secretary deter-
mines that a State receiving a grant under this
section is not in compliance with the terms of
the grant, the Secretary shall provide the State
with written notice of such determination. Such
notice shall specify—
(i) the reasons for the determination
of the Secretary;
(ii) that the Secretary will require the
State, not later than 60 days after receipt
of such notice, to return all funds provided
to the State under the grant, unless the
State—
(I) takes such corrective action
as may be necessary to ensure that
the State is in compliance with the
terms of the grant; or
(II) requests a hearing under
clause (iii); and
(iii) that the State may request a
hearing on the record before an adminis-
trative law judge under section 554 of title
5, United States Code, concerning the alle-
gations set forth in the notice.
(2) ADDITIONAL REPORTS.—Each State receiv-
ing a grant under this section shall, not later than
2 years after the approval of its application for such
grant and every 2 years thereafter, prepare and sub-
mit to the Commission on National Health Care Ac-
cess and Reform established under section 201
(hereafter in this subtitle referred to as the ‘‘Com-
mission’’), the Secretary, and the appropriate com-
mittees of Congress, a report and evaluation con-
cerning the alternative dispute resolution systems
implemented by the State, including information—
(A) on the effect of such systems on the
cost of health care within the State;
(B) on the impact of such systems on the
access of individuals to health care within the
State; and
(C) on the effect of such systems on the
quality of health care provided within the State;
SEC. 149. ESTABLISHMENT OF ADVISORY PANEL.
(a) IN GENERAL.—The Commission shall make rec-
ommendations to the Secretary concerning the eligibility,
approval, and review requirements for alternative dispute
resolution systems described in applications submitted
under section 148(b).
(b) ADVISORS.—The Commission shall—
(1) direct the National Advisory Board estab-
lished under section 202 to assist in carrying out the
Commission’s activities under this section; or
(2) establish a panel of advisors to assist in car-
rying out the Commission’s activities under this sec-
tion.
(c) MEMBERS OF THE ADVISORY PANEL.—If the
Commission establishes an advisory panel under sub-
section (b)(2), the members of the advisory panel shall in-
clude representatives from each of the following:
(1) Patient advocacy groups.
(2) Groups representing State governments.
(3) Health care provider groups, including orga-
nized medicine.
(4) Health care insurers.
(5) Health care employers.
(6) Academic researchers from disciplines such
as medicine, economics, law or health services, with
expertise in alternative dispute resolution models.
(d) DUTIES OF ADVISORS.—The advisors appointed
under paragraph (1) or (2) of subsection (b) shall—
(1) assist in the development of criteria for al-
ternative dispute resolution systems that States
must meet to be eligible to receive grants under sec-
tion 148 and make information on such criteria
available to the States to assist such States in pre-
paring applications for grants;
(2) as part of the criteria developed under para-
graph (1), require that the alternative dispute reso-
lution systems for which States receive grants under
section 148—
(A) support access to health care;
(B) encourage improvements in the quality
of care;
(C) enhance the patient-provider relation-
ship;
(D) encourage innovation in health care
delivery systems;
(E) provide prompt resolution and fair
compensation;
(F) provide predictable outcomes; and
(G) operate efficiently in terms of costs
and processes;
(3) provide advice and assistance to representa-
tives from State governments concerning the estab-
lishment of alternative dispute resolution systems;
(4) not later than 7 years after the date of en-
actment of this Act, submit to the Commission, the
Secretary, and to the appropriate committees of
Congress, a recommendation on the feasibility of a
national alternative dispute resolution system; and
(5) perform the duties set forth in part IV.
(e) COMPENSATION.—All members of the advisory
panel established under subsection (b)(2) shall be reim-
bursed by the Commission for travel and per diem ex-
penses in lieu of subsistence expenses during the perform-
ance of duties of the Panel in accordance with subchapter
I of chapter 57 of title 5, United States Code.
(f) FACA NOT APPLICABLE.—The provisions of the
Federal Advisory Committee Act shall not apply to an ad-
visory panel established under subsection (b)(2).
(g) PROVISION
OF INFORMATION
BY
THE SEC-
RETARY.—The Secretary shall make available to the advi-
sors appointed under paragraph (1) or (2) of subsection
(b) any information concerning the grants made under
section 148 that is necessary for such advisors to complete
the duties set forth in subsection (d).
SEC. 150. AUTHORIZATION.
(a) IN GENERAL.—There are authorized to be appro-
priated $250,000,000 for each of the fiscal years 1994,
1995, and 1996, for grants under section 148.
(b) AVAILABILITY
OF
FUNDS.—Amounts appro-
priated for grants under section 148 shall remain available
until expended.
PART IV—DEMONSTRATION PROJECTS FOR NO-
FAULT COMPENSATION PROGRAMS
SEC. 151. DEMONSTRATION PROJECTS FOR NO-FAULT COM-
PENSATION PROGRAMS.
(a) ESTABLISHMENT.—The Secretary shall establish
a program to award grants to private entities for the de-
velopment and implementation of demonstration no-fault
compensation programs in the private sector.
(b) APPLICATION.—To be eligible to receive a grant
under this section a private entity shall prepare and sub-
mit to the Secretary an application at such time, in such
form, and containing such information as the Secretary
may require including a description of the no-fault com-
pensation program that the private entity intends to de-
velop or implement.
(c) REVIEW AND APPROVAL OF APPLICATIONS.—The
Secretary shall review and approve applications received
under subsection (b) in accordance with recommendations
made by the Commission with the advice of the advisors
appointed under section 149(b).
(d) AMOUNT OF GRANT.—The amount of a grant to
a private entity under this section shall be an amount that
the Secretary finds reasonable and necessary for the devel-
opment and implementation of the no-fault compensation
program.
(e) DUTIES OF ADVISORS.—
(1) IN
GENERAL.—The advisors appointed
under section 149(b) shall—
(A) develop criteria for no-fault compensa-
tion programs in the private sector that private
entities must meet to be eligible to receive
grants under this section; and
(B) make information on such criteria
available to the private entities to assist such
entities in preparing applications for grants.
(2) CRITERIA.—As part of the criteria devel-
oped under paragraph (1), the advisors shall require
that the no-fault compensation programs for which
States receive grants under this section—
(A) provide that health care providers offer
their patients a no-fault compensation scheme
in exchange for a waiver of common law tort li-
ability for all injuries;
(B) provide that patients are fully in-
formed of the common law tort rights they are
surrendering and the no-fault benefits they are
eligible to receive; and
(C) provide that the health care facility op-
erate an effective quality assurance program,
including measures for reporting and account-
ability for all adverse events identified through
this claims process.
(f) REPORTS AND RECOMMENDATIONS.—
(1) REPORTS BY RECIPIENTS OF GRANTS.—Not
later than 2 years after the approval of its applica-
tion, each private entity that is a grant recipient
shall prepare and submit a report to the Commis-
sion, the Secretary, and the appropriate committees
of Congress, which contains—
(A) an analysis of the feasibility and desir-
ability of developing and implementing no-fault
compensation programs; and
(B) a recommendation for legislation on
the development and implementation of no-fault
compensation programs.
(2) 
RECOMMENDATIONS.—The 
Commission
shall review the reports made by grant recipients
pursuant to paragraph (1) and make recommenda-
tions to the Secretary regarding proposals for legis-
lation to develop and implement national no-fault
compensation programs.
(g) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—There are authorized to be
appropriated 
for 
grants 
under 
this 
section
$20,000,000 for each of the fiscal years 1994, 1995,
and 1996.
(2) AVAILABILITY OF FUNDS.—Amounts appro-
priated for grants under this section shall remain
available until expended.
Subtitle F—Joint Ventures
SEC. 161. AMENDMENT OF THE NATIONAL COOPERATIVE
RESEARCH ACT OF 1984.
(a) DEFINITIONS.—Section 2(a) of the National Co-
operative Research Act of 1984 (15 U.S.C. 4301(a)) is
amended by adding at the end the following new para-
graph:
‘‘(7) The term ‘joint health care provider ven-
ture’ means a group of activities, as determined by
the Commission on National Health Care Access and
Reform (established under section 201 of the
BasiCare Health Access and Cost Control Act), by
2 or more hospitals for the provision or delivery of
health care services.’’.
(b) EXCLUSIONS.—Section 2(b) of such Act (15
U.S.C. 4301(b)) is amended—
(1) in the matter preceding paragraph (1) by
striking ‘‘excludes’’ and inserting ‘‘and the term
‘joint health care provider venture’ exclude’’; and
(2) in paragraph (1) by striking ‘‘conduct the
research and development that is’’ and inserting
‘‘carry out’’.
(c) TECHNICAL AMENDMENTS.—(1) Section 3 of
such Act (15 U.S.C. 4302) is amended by inserting ‘‘or
joint health care provider venture’’ after ‘‘joint research
and development venture’’.
(2) Section 4 of such Act (15 U.S.C. 4303) is amend-
ed in subsections (a)(1), (b)(1), (c)(1), and (e) by insert-
ing ‘‘or joint health care provider venture’’ after ‘‘joint
research and development venture’’ each place it appears.
(3) Section 5(a) of such Act (15 U.S.C. 4304(a)) is
amended in the matter preceding paragraph (1) by insert-
ing ‘‘or joint health care provider venture’’ after ‘‘joint
research and development venture’’.
(4) Section 6 of such Act (15 U.S.C. 4305) is
amended—
(A) in the heading by striking ‘‘RESEARCH AND
DEVELOPMENT’’;
(B) in subsections (a), (d)(2), and (e) by insert-
ing ‘‘or joint health care provider venture’’ after
‘‘joint research and development venture’’ each place
it appears; and
(C) in the first sentence of subsection (a) by in-
serting ‘‘(or in the case of a joint health care pro-
vider venture, the date of enactment of the BasiCare
Health Access and Cost Control Act)’’ after ‘‘this
Act’’.
TITLE II—LONG-TERM REFORMS
Subtitle A—Establishment of
Commission and Advisory Board
SEC. 201. THE COMMISSION ON NATIONAL HEALTH CARE
ACCESS AND REFORM.
(a) ESTABLISHMENT.—There is established an inde-
pendent commission to be known as the Commission on
National Health Care Access and Reform (hereinafter re-
ferred to as the ‘‘Commission’’).
(b) DUTIES.—The Commission shall carry out the
duties specified for it in this title.
(c) APPOINTMENT.—
(1) COMPOSITION.—
(A) SIZE
AND
MANNER
OF
APPOINT-
MENT.—The Commission shall consist of—
(i) five members to be appointed by
the President, by and with the advice and
consent of the Senate, one of whom shall,
at the time of appointment, be designated
as Chairperson of the Commission;
(ii) two members to be appointed by
the Speaker of the House of Representa-
tives upon the recommendations of the Ma-
jority Leader and Minority Leader of the
House of Representatives; and
(iii) two members to be appointed by
the President pro tempore of the Senate
upon the recommendations of the Majority
Leader and Minority Leader of the Senate.
(B) POLITICAL AFFILIATION.—At no time
shall more than three of the members appointed
by the President, one of the members appointed
by the Speaker of the House of Representatives,
or one of the members appointed by the Presi-
dent pro tempore of the Senate be members of
the same political party.
(C) MEMBERSHIP
QUALIFICATIONS.—The
membership of the Commission shall consist of
individuals who are of recognized standing and
distinction and who possess the demonstrated
capacity to discharge the duties imposed on the
Commission, and shall include persons possess-
ing substantial knowledge or expertise in health
care delivery, health care insurance, or health
care economics. No individual who is otherwise
an officer or full-time employee of the United
States shall serve as a member of the Commis-
sion. No member while serving on the Commis-
sion may receive financial gain from direct in-
vestments, employment or associations from
any entity with demonstrable financial interest
in matters over which the Commission has ju-
risdiction.
(D) CHAIRPERSON.—The Chairperson of
the Commission shall designate a member of
the Commission to act as Vice Chairperson of
the Commission.
(E) QUORUM.—A majority of the members
of the Commission shall constitute a quorum,
but a lesser number may conduct hearings.
(F) TERM.—Members of the Commission
shall be appointed for a term of 5 years, except
that with respect to the members first ap-
pointed—
(i) the Chairperson and 2 members, 1
each appointed under clauses (ii) and (iii)
of paragraph (1)(A), respectively, shall be
appointed for a term of 5 years;
(ii) 3 members, 1 each appointed
under clauses (i), (ii) and (iii) of para-
graph (1)(A), respectively, shall be ap-
pointed for a term of 4 years; and
(iii) the remaining members shall be
appointed for a term of 3 years.
(G) VACANCY.—A vacancy in the Commis-
sion shall not affect its powers, but shall be
filled in the same manner as the original ap-
pointment, but the individual appointed shall
serve only for the unexpired portion of the term
for which the individual’s predecessor was ap-
pointed.
(2) EFFECTIVE
DATE.—Appointments to the
Commission shall be made no later than 90 days
after the date of enactment of this Act.
(d) MEETINGS.—The Commission shall meet at the
call of the Chairperson, or at the call of a majority of the
members of the Commission; but meetings shall not be
held less frequently than once in each calendar month
which begins after a majority of the membership of the
Commission has been appointed.
(e) HEARINGS.—In carrying out its duties under this
section, the Commission, or any duly authorized commit-
tee thereof, is authorized to hold such hearings, sit and
act at such times and places, and take such testimony,
with respect to matters with respect to which it has a re-
sponsibility under this title, as the Commission or such
committee may deem advisable. The Chairperson of the
Commission or any member authorized by the Chairperson
may administer oaths or affirmations to witnesses appear-
ing before the Commission or before any committee there-
of.
(f) PAY AND TRAVEL EXPENSES.—
(1) PAY.—
(A) MEMBERS.—Each member, other than
the Chairperson, shall be paid at a rate equal
to the daily equivalent of the minimum annual
rate of basic pay payable for level IV of the Ex-
ecutive Schedule under section 5315 of title 5,
United States Code, for each day (including
travel time) during which the member is en-
gaged in the actual performance of duties vest-
ed in the Commission.
(B) 
CHAIRPERSON.—The 
Chairperson
shall be paid for each day referred to in sub-
paragraph (A) at a rate equal to the daily
equivalent of the minimum annual rate of basic
pay payable for level III of the Executive
Schedule under section 5314 of title 5, United
States Code.
(2) TRAVEL EXPENSES.—Members shall receive
travel expenses, including per diem in lieu of subsist-
ence, in accordance with sections 5702 and 5703 of
title 5, United States Code.
(g) STAFF.—
(1) APPOINTMENT.—Subject to paragraphs (2)
and (3), the Chairperson, with the approval of the
Commission, may appoint and fix the pay of addi-
tional personnel.
(2) 
INAPPLICABILITY
OF
CIVIL
SERVICE
LAWS.—The Chairperson may make such appoint-
ments without regard to the provisions of title 5,
United States Code, governing appointments in the
competitive service, and any personnel so appointed
may be paid without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of that
title relating to classification and General Schedule
pay rates, except that an individual so appointed
shall receive pay—
(A) not less than 120 percent of the mini-
mum rate of basic pay payable for GS–15 of
the General Schedule, and
(B) no greater than the rate of basic pay
payable for level IV of the executive schedule.
(3) DETAIL
OF
PERSONNEL
FROM
FEDERAL
AGENCIES.—Upon request of the Chairperson, the
head of any Federal department or agency may de-
tail any of the personnel of that department or agen-
cy to the Commission to assist the Commission in
carrying out its duties under this title.
(4) 
FEDERAL
AGENCY
ASSISTANCE.—The
Comptroller General of the United States, the Sec-
retary of Health and Human Services, and the Ad-
ministrator of General Services shall provide assist-
ance on a reimbursable basis, including the detailing
of employees, to the Commission in accordance with
an agreement entered into with the Commission.
(h) OTHER AUTHORITY.—
(1) CONSULTANT SERVICES.—The Commission
may procure by contract, to the extent funds are
available, the temporary or intermittent services of
experts or consultants pursuant to section 3109 of
title 5, United States Code.
(2) PROPERTY
MATTERS.—The Commission
may lease space and acquire personal property to the
extent funds are available.
SEC. 202. NATIONAL ADVISORY BOARD.
(a) APPOINTMENT.—The Commission shall provide
for appointment of a National Advisory Board (hereinafter
referred to as the ‘‘Board’’) to advise the Commission on
its activities.
100
(b) MEMBERSHIP.—The Board shall consist of 15
members who are representatives of employers, unions,
health care providers, health care carriers, consumer orga-
nizations, State health programs, and public health profes-
sionals, as well as the general public. Such members shall
serve for terms of 3 years, except that, in the initial ap-
pointment, 5 members shall be each appointed for terms
of 1 year, 2 years, and 3 years.
(c) VACANCIES.—
(1) IN
GENERAL.—The Commission shall fill
any vacancy in the membership of the Board in the
same manner as the original appointment. The va-
cancy shall not affect the power of the remaining
members to execute the duties of the Board.
(2) VACANCY
APPOINTMENTS.—Any member
appointed to fill a vacancy shall serve for the re-
mainder of the term for which the predecessor of the
member was appointed.
(3) REAPPOINTMENT.—The Commission may
reappoint an appointed member of the Board for a
second term in the same manner as the original ap-
pointment.
(d) CHAIRPERSON AND VICE CHAIRPERSON.—The
Board shall select a Chairperson and a Vice Chairperson
from among the members of the Board.
101
(e) COMPENSATION.—All members of the Board and
the committees established under subsection (h) shall be
reimbursed by the Commission for travel and per diem in
lieu of subsistence expenses during the performance of du-
ties of the Board in accordance with subchapter I of chap-
ter 57 of title 5, United States Code.
(f) FACA NOT APPLICABLE.—The provisions of the
Federal Advisory Committee Act shall not apply to the
Board.
(g) DUTIES.—As directed by the Commission, the
Board shall undertake such projects as the Commission
may deem necessary. Such projects may include site visits
and studies that are concerned with issues of access to
health care services, utilization of health care services,
consumer participation and satisfaction in the provision
of health care services, education of health personnel, med-
ical practice, medical technology, quality of insurance
plans and health care delivery, and malpractice liability.
The Board shall not undertake studies, visits, or projects,
nor shall it issue recommendations, except at the request
of the Commission.
(h) COMMITTEES.—The Board shall create such com-
mittees (composed of Commission members and others as
appointed by the Chairperson) as necessary to enable the
Board to meet its responsibilities and functions.
102
SEC. 203. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Com-
mission such funds as are necessary to carry out its duties
under this title. Such funds shall remain available until
expended.
Subtitle B—Reform and Standard-
ization of Private Insurance
SEC. 211. DEFINING GOALS AND GUIDELINES OF COMMIS-
SION.
(a) DEFINING GOALS.—In carrying out the respon-
sibilities assigned to it under this Act, the Commission
shall at all times seek to—
(1) improve access to basic health coverage and
services;
(2) control the cost of health care coverage and
services;
(3) safeguard the quality of health care serv-
ices;
(4) assure equity in the availability and cost of
health care coverage and services; and
(5) minimize administrative complexity and du-
plication in the health care system.
(b) GUIDELINES.—In carrying out the responsibil-
ities assigned to it under this Act, the Commission shall
in developing or evaluating any health care proposal or
modification be guided by the anticipated effect on—
103
(1) the cost of health care to medical consum-
ers;
(2) the quality of health care services;
(3) access to health care services;
(4) the financial viability of health care provid-
ers;
(5) the financial viability of health care carriers;
(6) the provision of health benefits to employees
by employers; and
(7) the administrative complexity of the health
care system.
(c) CONSULTATIONS.—In carrying out the respon-
sibilities assigned to it under this Act, the Commission
shall seek out and consider recommendations from a broad
range of interested individuals and organizations, includ-
ing organizations representing health care consumers,
health care providers, health care carriers, representatives
of State health programs, public health professionals, and
the general public.
SEC. 212. DEVELOPMENT AND SUBMISSION OF LEGISLA-
TIVE PROPOSAL.
(a) IN GENERAL.—By not later than January 1, of
the 2nd year following the date of enactment of this Act,
the Commission shall develop and submit to Congress a
legislative proposal which provides for the following:
104
(1) BASICARE BENEFITS PACKAGE.—A uniform
national health benefits package (hereinafter re-
ferred to as the ‘‘BasiCare benefits package’’) speci-
fying minimum benefits applicable to all carriers
which meets the requirements of section 214.
(2) 
INSURANCE
RESPONSIBILITIES
UNDER
BASICARE.—A national health care insurance reform
plan which meets the requirements of section 215
and which shall apply to all carriers selling health
insurance in the United States.
(3) ESTABLISHMENT OF BASICARE BASE PRE-
MIUM RATE.—A base premium rate (hereinafter re-
ferred to as the ‘‘BasiCare base premium rate’’) to
apply to the BasiCare benefits package, which meets
the requirements of section 216.
(4) 
EMPLOYER
RESPONSIBILITIES
UNDER
BASICARE.—Employer responsibilities to offer the
BasiCare health benefit plan as described in section
217.
(5) 
INDIVIDUAL
RESPONSIBILITIES
UNDER
BASICARE.—Individual responsibilities to obtain the
BasiCare health benefit plan coverage as described
in section 218.
105
(6) SELF-INSURED
REQUIREMENTS.—Self-in-
sured plan requirements with respect to certification
as described in section 219.
(7) 
PROVIDER
RESPONSIBILITIES
UNDER
BASICARE.—Provider 
responsibilities 
under 
the
BasiCare health benefit plan as described in section
220.
(8) TREATMENT OF MANAGED CARE PLANS.—
Federal standards for managed care plans as de-
scribed in section 221 and preemption of State pro-
visions relating to such plans, as described in section
222.
(9) LOW-INCOME ASSISTANCE.—A program to
provide low-income individuals and families—
(A) an orderly transfer from medicaid pro-
gram coverage under title XIX of the Social Se-
curity Act to BasiCare health benefit plan cov-
erage, and
(B) 
financial 
assistance 
in 
obtaining
BasiCare health benefit plan coverage,
as specified in subtitle C.
(b) CONSIDERATION.—The legislative proposal de-
scribed in subsection (a) shall be considered by the Con-
gress under the procedures for consideration of an ‘‘ap-
proval resolution’’ as described in subtitle D.
106
(c) EFFECTIVE DATE OF IMPLEMENTATION.—The
provisions of the recommendation shall become effective
on January 1 of the year following the year of the date
of approval of the Commission’s recommendation (unless
such period of time is less than 9 months, in which case
such provisions shall become effective on January 1 of the
second year following the date of approval of the Commis-
sion’s recommendation).
SEC. 213. CONTINUING DUTIES AND RESPONSIBILITIES OF
THE COMMISSION.
(a) PERIOD FOR RESUBMISSION OF BASICARE PACK-
AGE AND BASE RATE IN CASE OF NONAPPROVAL.—If the
recommendation of the Commission submitted under sec-
tion 212 is not approved by Congress in a year, the Com-
mission shall by not later than January 1 of each year
thereafter, for a period not to exceed 2 years (unless such
recommendation is approved in a year) submit a new rec-
ommendation to Congress subject to the guidelines and
requirements of this title.
(b) CONTINUING REVIEW OF BASICARE BENEFITS
PACKAGE AND BASICARE BASE PREMIUM RATE.—
(1) MODIFICATIONS
IN
BASICARE
BENEFITS
PACKAGE.—The Commission may by not later than
September 30 of any year following the effective
date of implementation of the Commission’s rec-
107
ommendation under section 212, subject to the
guidelines and goals applicable to its initial rec-
ommendation, publish in the Federal Register revi-
sions to the BasiCare benefits package, which revi-
sions shall become effective on January 1 of the im-
mediately following calendar year unless rescinded
by Congress.
(2) 
MODIFICATIONS
TO
VARIATIONS
IN
BASICARE BASE PREMIUM RATE.—The Commission
may by not later than September 30 of any year fol-
lowing the effective date of implementation of the
Commission’s recommendation under section 212,
subject to the guidelines and goals applicable to its
initial recommendation, publish in the Federal Reg-
ister revisions to any variations provided in the
BasiCare base premium rate, which revisions shall
become effective on January 1 of the immediately
following calendar year unless rescinded by Con-
gress.
(c) ESTABLISHMENT
OF
ANNUAL
ALLOWABLE
RATES OF INCREASE IN BASICARE PREMIUM RATES.—
The Commission shall by not later than September 30 of
each year following the effective date of implementation
of the Commission’s recommendation under section 212,
subject to the guidelines and goals applicable to its initial
108
recommendation, publish in the Federal Register a per-
centage figure for a single allowable rate of increase in
BasiCare premiums to become effective on January 1 of
the immediately following calendar year unless such per-
centage figure is modified or rescinded by Congress. Such
rate of increase shall be binding on all carriers offering
benefits covered under the BasiCare benefits package, as
provided in section 215.
(d) OVERSIGHT OF PROVIDER PARTICIPATION.—
(1) IN GENERAL.—The Commission shall con-
duct ongoing oversight of provider response to the
imposition of annual limits in the allowable rate of
increase in BasiCare premiums, as provided in this
Act. The findings of such oversight shall be ex-
pressed in annual reports to Congress.
(2) CONSIDERATIONS.—Matters to be examined
in such oversight shall include, but are not limited
to, the following:
(A) The incidence of participation (or
nonparticipation) of health care providers in
BasiCare health benefit plans.
(B) The effect of such participation (or
nonparticipation) on the availability and afford-
ability of health care services to health care
consumers.
109
(C) The extent to which the incidence of
nonparticipation in BasiCare health benefit
plans may vary according to professional spe-
cialty or region.
(3) OPTION
FOR
PARTICIPATION
REQUIRE-
MENTS.—At any time following the standardization
of the BasiCare health benefit plan under this Act,
the Commission may submit to Congress a legisla-
tive proposal providing for such participation re-
quirements as the Commission may deem necessary
to assure a level of provider participation in
BasiCare health benefit plans sufficient to assure af-
fordable access to quality health care services by
BasiCare enrollees.
(4) 
CONGRESSIONAL
CONSIDERATION.—Any
proposal made to Congress under this subsection
shall be considered by Congress under the proce-
dures for consideration of an ‘‘approval resolution’’
as described in subtitle D.
(e) OVERSIGHT OF SUPPLEMENTAL HEALTH INSUR-
ANCE MARKET.—
(1) IN GENERAL.—The Commission shall, upon
implementation of the Commission’s recommenda-
tions under section 212, commence an ongoing as-
sessment of the condition of the supplemental health
110
insurance market for insurance benefits which are
beyond the scope of the BasiCare benefits package.
The findings of such assessment shall be transmitted
in annual reports to the appropriate committees of
Congress.
(2) CONSIDERATIONS.—Matters to be ad-
dressed in such assessment shall include, but not be
limited to—
(A) the rate of cost growth in the supple-
mental market, and the extent to which such
growth may be contributing to growth in na-
tional health care expenditures;
(B) the affordability and availability of
supplemental policies to employers, families,
and individuals;
(C) the extent to which the terms and cost
of coverage vary among beneficiaries based on
health and claims status;
(D) the value of supplemental policies to
beneficiaries, as measured by loss ratios;
(E) the extent of questionable marketing
practices, such as misrepresentation of policy
benefits or provisions, or the selling of policies
that duplicate existing coverage; and
111
(F) the extent to which State insurance
regulation is addressing perceived problems in
the supplemental market.
(3) RECOMMENDATION
TO
CONGRESS.—No
later than January 1 of the second year following
the effective date of implementation of the Commis-
sion’s recommendations under this title, the Com-
mission shall include in its annual report to Con-
gress (under this subsection) a recommendation re-
garding the advisability of Federal regulation of the
supplemental health insurance market. If the Com-
mission’s recommendation is that such regulation is
needed, the Commission shall prepare and submit to
Congress draft legislation to carry out the terms of
such regulation as it may deem necessary.
(4) SUBSEQUENT RECOMMENDATIONS.—At any
time following submission of its recommendation to
Congress under paragraph (3), the Commission may,
based on the findings of its continuing assessment
under paragraphs (1) and (2), submit additional rec-
ommendations or draft legislation to Congress re-
garding action it may consider advisable relative to
the supplemental market.
(5) CONGRESSIONAL CONSIDERATION.—Propos-
als made to Congress under this subsection shall be
112
considered by Congress under the procedures for
consideration of an ‘‘approval resolution’’ as de-
scribed in subtitle D.
(f) SAFEGUARDING QUALITY OF HEALTH CARE.—
(1) ANNUAL REPORT.—The Commission shall
by no later than January 1 of each year following
the date of enactment of this Act, submit an annual
report to Congress assessing the quality of health
care in the United States, and outlining areas of sig-
nificant progress or decline in the delivery of or ac-
cessibility to health care. In preparing such reports,
the Commission shall conduct such studies, hearings,
or other evaluations as it deems necessary to accom-
plish a comprehensive and continuing evaluation of
health care quality in the United States.
(2) CONTRACTS FOR PROVISION OF INFORMA-
TION
TO
CONSUMERS
REGARDING
QUALITY
OF
HEALTH
CARE
SERVICES
AND
INSURANCE.—The
Commission shall enter into contracts with the appli-
cable regulatory authority in each State, or such
public or private nonprofit entities as the Commis-
sion deems necessary, for the collection and dissemi-
nation to consumers of information regarding the
quality and cost-effectiveness of services provided by
health care providers and carriers of BasiCare
113
health benefit plans in the State. Such information
shall include—
(A) the degree to which a plan’s practice
patterns agree with what is known about appro-
priate and inappropriate approaches to health
care,
(B) outcome rates for patients with par-
ticular conditions, and
(C) patient satisfaction with various as-
pects of a plan’s performance.
(3) REQUIREMENT TO CONSIDER HEALTH CARE
QUALITY DATA.—Information regarding health care
quality obtained through the activities described in
this subsection shall be considered and incorporated
by the Commission in carrying out the other con-
tinuing duties and responsibilities assigned to it
under this section including setting annual premium
limits and other rates as provided in this title.
(g) UNIFORM CLAIMS FORMS
AND ELECTRONIC
PROCESSING.—
(1) IN GENERAL.—The Commission shall de-
velop in consultation with entities offering health in-
surance, health care providers, and the Secretary, a
uniform claims form to be used by both private