I
103D CONGRESS
2D SESSION
H. R. 4816
To amend the Social Security Act and the Internal Revenue Code of 1986
to provide improved access to quality long-term care services, to obtain
cost savings through provider incentives and removal of regulatory and
legislative barriers, to encourage greater private sector participation and
personal responsibility in financing such services, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 22, 1994
Mr. TALENT introduced the following bill; which was referred jointly to the
Committees on Energy and Commerce and Ways and Means
A BILL
To amend the Social Security Act and the Internal Revenue
Code of 1986 to provide improved access to quality long-
term care services, to obtain cost savings through pro-
vider incentives and removal of regulatory and legislative
barriers, to encourage greater private sector participation
and personal responsibility in financing such services,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Quality Care For Life Act of 1994’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
TITLE I—PROSPECTIVE PAYMENT SYSTEM FOR NURSING
FACILITIES
Sec. 100. Short title.
Sec. 101. Definitions.
Sec. 102. Payment objectives.
Sec. 103. Powers and duties of the Secretary.
Sec. 104. Relationship to title XVIII of the Social Security Act.
Sec. 105. Establishment of resident classification system.
Sec. 106. Cost centers for nursing facility payment.
Sec. 107. Resident assessment.
Sec. 108. The per diem rate for nursing service costs.
Sec. 109. The per diem rate for administrative and general costs.
Sec. 110. Payment for fee-for-service ancillary services.
Sec. 111. Reimbursement of selected ancillary services and other costs.
Sec. 112. The per diem rate for property costs.
Sec. 113. Mid-year rate adjustments.
Sec. 114. Exception to payment methods for new and low-volume nursing facili-
ties.
Sec. 115. Appeal procedures.
Sec. 116. Effective date.
TITLE II—SUBACUTE CARE CONTINUUM AMENDMENTS OF 1994
Sec. 200. Short title.
Sec. 201. Findings and purposes.
Sec. 202. Creation of a ‘‘level playing field’’ to encourage the development of
subacute care providers.
Sec. 203. Exception process from medicare routine cost limits.
Sec. 204. Physician visits and consultations for medicare patients in skilled
nursing facilities.
Sec. 205. Coverage of respiratory therapy services in skilled nursing facilities
under the medicare program.
Sec. 206. DRGS appropriate for subacute care in skilled nursing facilities.
Sec. 207. Subacute care services under title XIX.
Sec. 208. Effective date.
TITLE III—LONG-TERM CARE TAX CLARIFICATION
Sec. 301. Short title.
Sec. 302. Treatment of long-term care insurance or plans.
Sec. 303. Qualified long-term services treated as medical care.
Sec. 304. Qualified long-term care insurance contracts permitted to be offered
in cafeteria plans.
Sec. 305. Inclusion in income of excessive long-term care benefits.
Sec. 306. Tax reserves for qualified long-term care insurance contracts.
Sec. 307. Effective date.
TITLE IV—LONG-TERM CARE INSURANCE STANDARDS
Sec. 400. Short title.
Sec. 401. National Long-Term Care Insurance Advisory Council.
Sec. 402. Policy requirements.
Sec. 403. Additional requirements for issuers of long-term care insurance poli-
cies.
Sec. 404. Relation to State law.
Sec. 405. Uniform language and definitions.
Sec. 406. Effective dates.
TITLE V—FINANCIAL ELIGIBILITY STANDARDS
Sec. 501. Revisions to financial eligibility provisions.
Sec. 502. Effective date.
TITLE VI—ESTABLISHMENT OF PROGRAM FOR HOME AND COM-
MUNITY-BASED SERVICES FOR CERTAIN INDIVIDUALS WITH
DISABILITIES
Sec. 600. Short title.
Sec. 601. Establishment of program.
Sec. 602. Increased resource disregards for nursing facility residents.
TITLE VII—ASSET TRANSFERS
Sec. 701. Transfers of assets.
Sec. 702. Treatment of certain trusts.
Sec. 703. Effective date.
SEC. 2. PURPOSES.
The purposes of this Act are to—
(1) enact a prospective payment system for
nursing facility services under all Federal health
care programs that promotes quality care, assures
equal access for all residents regardless of level of
service needed, maintains adequate capital forma-
tion, provides for efficiency incentives for providers,
and contains costs;
(2) encourage the use of cost-effective subacute
care in nursing facilities by providing equitable reim-
bursement under all appropriate Federal health care
programs and by eliminating regulatory and legisla-
tive barriers to providing such care;
(3) amend the Internal Revenue Code of 1986
to clarify the Federal tax treatment of long term
care insurance policies to promote the purchase of
such policies;
(4) amend the Internal Revenue Code of 1986
to develop reasonable Federal standards for long
term care insurance that promote consumer protec-
tion;
(5) modify financial eligibility standards under
the medicaid program to ensure an inclusive ac-
counting of individual assets and promote personal
responsibility for long term care expenses;
(6) establish a program for home and commu-
nity-based services for individuals with disabilities
under the medicaid program to provide beneficiaries,
whose needs would be determined by functional eligi-
bility standards, with expanded choice of services
within a continuum of care, and contain costs by en-
couraging the use of appropriate levels of care; and
(7) revise the transfer of asset prohibitions
under the medicaid program to make the 60-month
look-back period in the case of trusts applicable to
all transfers of assets, to require ‘‘income cap
trusts’’ and ‘‘nonprofit association trusts’’ to be ir-
revocable, to include the conversion of personal or
real property into annuities as an unlawful transfer,
and to direct the Secretary, by regulation, to close
such other loopholes not covered by the Omnibus
Budget Reconciliation Act of 1993 (Public Law
103–66).
TITLE 
I—PROSPECTIVE 
PAY-
MENT SYSTEM FOR NURSING
FACILITIES
SEC. 100. SHORT TITLE.
This title may be cited as the ‘‘Prospective Payment
System for Nursing Facilities Amendments of 1994’’.
SEC. 101. DEFINITIONS.
For purposes of this title:
(1) ‘‘Acuity payment’’ means a fixed amount
that will be added to the facility-specific prices for
certain resident classes designated by the Secretary
as requiring heavy care.
(2) ‘‘Aggregated resident invoice’’ means a com-
pilation of the per resident invoices of a nursing fa-
cility which contain the number of resident days for
each resident and the resident class of each resident
at the nursing facility during a particular month.
(3) ‘‘Allowable costs’’ means costs which HCFA
has determined to be necessary for a nursing facility
to incur according to the Provider Reimbursement
Manual (hereinafter referred to as ‘‘HCFA–Pub.
15’’).
(4) ‘‘Base year’’ means the most recent cost re-
porting period (consisting of a period which is 12
months in length, except for facilities with new own-
ers, in which case the period is not less than 4
months nor more than 13 months) for which cost
data of nursing facilities is available to be used for
the determination of a prospective rate.
(5) ‘‘Case mix weight’’ means the total case mix
score of a facility calculated by multiplying the resi-
dent days in each resident class by the relative
weight assigned to each resident class, and summing
the resulting products across all resident classes.
(6) ‘‘Complex medical equipment’’ means items
such as ventilators, intermittent positive pressure
breathing (IPPB) machines, nebulizers, suction
pumps, continuous positive airway pressure (CPAP)
devices, and bead beds such as air fluidized beds.
(7) ‘‘Distinct part nursing facility’’ means an
institution which has a distinct part that is certified
under title XVIII of the Social Security Act and
meets the requirements of section 201.1 of the
Skilled Nursing Facility Manual published by HCFA
(hereinafter referred to as ‘‘HCFA–Pub. 12’’).
(8) ‘‘Efficiency incentive’’ means a payment
made to a nursing facility in recognition of incurring
costs below a prespecified level.
(9) ‘‘Fixed equipment’’ means equipment which
meets the definition of building equipment in section
104.3 of HCFA–Pub. 15. ‘‘Fixed equipment’’ in-
cludes, but is not limited to, attachments to build-
ings such as wiring, electrical fixtures, plumbing,
elevators, heating systems, and air conditioning sys-
tems.
(10) ‘‘Geographic ceiling’’ means a limitation
on payments in any given cost center for nursing fa-
cilities in one of no fewer than 8 geographic regions,
further subdivided into rural and urban areas, as
designated by the Secretary.
(11) ‘‘Heavy care’’ means an exceptionally high
level of care which the Secretary has determined is
required for residents in certain resident classes.
(12) ‘‘HCFA’’ means the Health Care Financ-
ing Administration of the Department of Health and
Human Services.
(13) ‘‘Indexed forward’’ means an adjustment
made to a per diem rate to account for cost in-
creases due to inflation or other factors during an
intervening period following the base year and pro-
jecting such cost increases for a future period in
which the rate applies. Indexing forward under this
title shall be determined from the midpoint of the
base year to the midpoint of the rate year.
(14) ‘‘Marshall Swift segmented cost method’’
means an appraisal method published by the Mar-
shall Swift Valuation Service.
(15) ‘‘Minimum Data Set (hereinafter referred
to as ‘MDS’)’’ means a resident assessment instru-
ment, currently recognized by HCFA, in addition to
any extensions to MDS, such as MDSs, as well as
any extensions to accommodate subacute care which
contain an appropriate core of assessment items
with definitions and coding categories needed to
comprehensively assess a nursing facility resident.
(16) ‘‘Major movable equipment’’ means equip-
ment which meets the definition of major movable
equipment in section 104.4 of HCFA–Pub. 15.
‘‘Major movable equipment’’ includes, but is not lim-
ited to, accounting machines, beds, wheelchairs,
desks, vehicles, and X-ray machines.
(17) ‘‘Nursing facility’’ means an institution
which meets the requirements of a ‘‘skilled nursing
facility’’ under section 1819(a) of the Social Security
Act (42 U.S.C. 1395i–3(a)) and a ‘‘nursing facility’’
under section 1919(a) of the Social Security Act (42
U.S.C. 1396r(a)).
(18) ‘‘Per bed limit’’ means a per bed ceiling on
the fair asset value of a nursing facility for one of
the geographic regions designated by the Secretary.
(19) ‘‘Per diem rate’’ means a rate of payment
for the costs of covered services for a resident day.
(20) ‘‘Relative weight’’ means the index of the
value of the resources required for a given resident
class relative to the value of resources of either a
base resident class or the average of all the resident
classes.
(21) ‘‘R. S. Means Index’’ means the index of
the R. S. Means Company, Inc., specific to commer-
cial/industrial institutionalized nursing facilities,
which is based upon a survey of prices of common
building materials and wage rates for nursing facil-
ity construction.
(22) ‘‘Rebase’’ means the process of updating
nursing facility cost data for a subsequent rate year
using a more recent base year.
(23) ‘‘Rental rate’’ means a percentage that
will be multiplied by the fair asset value of property
to determine the total annual rental payment in lieu
of property costs.
(24) ‘‘Resident classification system’’ means a
system which categorizes residents into different
resident classes according to similarity of the
assessed condition and required services of such
residents.
(25) ‘‘Resident day’’ means the period of serv-
ices for one resident, regardless of payment source,
for one continuous 24 hours of services. The day of
admission of the resident constitutes a resident day
but the day of discharge does not constitute a resi-
dent day. Bed hold days are not to be considered
resident days, and bed hold day revenues are not to
be offset.
(26) ‘‘Resource Utilization Groups, Version III
(hereinafter referred to as ‘RUG–III’)’’ means a cat-
egory-based resident classification system used to
classify nursing facility residents into mutually ex-
clusive RUG–III groups. Residents in each RUG–III
group utilize similar quantities and patterns of
resources.
(27) ‘‘Secretary’’ means the Secretary of
Health and Human Services.
SEC. 102. PAYMENT OBJECTIVES.
(a) Payment rates under the Prospective Payment
System for Nursing Facilities shall reflect the following
objectives:
(1) To maintain an equitable and fair balance
between cost containment and quality of care in
nursing facilities.
(2) To encourage nursing facilities to admit
residents without regard to such residents’ source of
payment.
(3) To provide an incentive to nursing facilities
to admit and provide care to persons in need of com-
paratively greater care.
(4) To maintain administrative simplicity, for
both nursing facilities and the Secretary.
(5) To encourage investment in buildings and
improvements to nursing facilities (capital forma-
tion) as necessary to maintain quality and access.
SEC. 103. POWERS AND DUTIES OF THE SECRETARY.
(a) The Secretary shall establish by regulation the
implementation of this title. The rates determined under
this title shall reflect the objectives in section 102.
(b) The Secretary may require that each nursing fa-
cility file such data, statistics, schedules, or information
as required to enable the Secretary to implement this title.
SEC. 104. RELATIONSHIP TO TITLE XVIII OF THE SOCIAL
SECURITY ACT.
(a) No provision in this title shall replace, or other-
wise affect, the skilled nursing facility benefit under title
XVIII of the Social Security Act.
(b) The provisions of HCFA–Pub. 15 shall apply to
the determination of allowable costs under this title except
to the extent that such provisions conflict with any other
provision in this title.
SEC. 105. ESTABLISHMENT OF RESIDENT CLASSIFICATION
SYSTEM.
(a)(1) The Secretary shall establish a resident classi-
fication system which shall group residents into classes ac-
cording to similarity of the assessed condition and re-
quired services of such residents.
(2) The resident classification system shall be mod-
elled after the RUG–III system and all updated versions
of that system.
(3) The resident classification system shall be reflec-
tive of the necessary professional and paraprofessional
nursing staff time and costs required to address the care
needs of nursing facility residents.
(b)(1) The Secretary shall assign a relative weight for
each resident class based on the relative value of the re-
sources required for each resident class. The assignment
of relative weights for resident classes shall be performed
for each geographic region as determined in accordance
with subsection (c).
(2) In assigning the relative weights of the resident
classes in a geographic region, the Secretary shall utilize
information derived from the most recent MDSs of all of
the nursing facilities in a geographic region.
(3) The relative weights of the resident classes in
each geographic region shall be recalibrated every 3 years
based on any changes in the cost or amount of resources
required for the care of a resident in the resident class.
(c)(1) The Secretary shall designate no fewer than
8 geographic regions for the total United States. Within
each geographic region, the Secretary shall take appro-
priate account of variations in cost between urban and
rural areas.
(2) There shall be no peer grouping of nursing facili-
ties (e.g., based on whether the nursing facilities are hos-
pital-based or not) other than peer-grouping by geographic
region.
SEC. 106. COST CENTERS FOR NURSING FACILITY PAY-
MENT.
(a) Consistent with the objectives established in sec-
tion 102, the Secretary shall determine payment rates for
nursing 
facilities 
using 
the 
following 
cost-service
groupings:
(1) The nursing service cost center shall include
salaries and wages for the Director of Nursing,
Quality Assurance Nurses, registered nurses, li-
censed practical nurses, nurse aides (including wages
related to initial and on-going nurse aide training
and other on-going or periodic training costs in-
curred by nursing personnel), contract nursing,
fringe benefits and payroll taxes associated there-
with, medical records, and nursing supplies.
(2) The administrative and general cost center
shall include all expenses (including salaries, bene-
fits, and other costs) related to administration, plant
operation, maintenance and repair, housekeeping, di-
etary (excluding raw food), central services and sup-
ply (excluding medical supplies), laundry, and social
services.
(3) Ancillary services to be paid on a fee-for-
service basis shall include physical therapy, occupa-
tional therapy, speech therapy, respiratory therapy,
hyperalimentation, and complex medical equipment
(CME). These fee-for-service ancillary service pay-
ments under Part A of title XVIII of the Social Se-
curity Act shall not affect the reimbursement of an-
cillary services under part B of title XVIII of the
Social Security Act.
(4) The cost center for selected ancillary serv-
ices and other costs shall include drugs, raw food,
medical supplies, IV therapy, X-ray services, labora-
tory services, property tax, property insurance,
minor equipment, and all other costs not included in
the other 4 cost/service groupings.
(5) The property cost center shall include de-
preciation on the buildings and fixed equipment,
major movable equipment, motor vehicles, land im-
provements, amortization of leasehold improvements,
lease acquisition costs, and capital leases; interest on
capital indebtedness; mortgage interest; lease costs;
and equipment rental expense.
(b) Nursing facilities shall be paid a prospective, fa-
cility-specific, per diem rate based on the sum of the per
diem rates established for the nursing service, administra-
tive and general, and property cost centers as determined
in accordance with sections 108, 109, and 112.
(c) Nursing facilities shall be paid a facility-specific
prospective rate for each unit of the fee-for-service ancil-
lary services as determined in accordance with section
110.
(d) Nursing facilities shall be reimbursed for selected
ancillary services and other costs on a retrospective basis
in accordance with section 111.
SEC. 107. RESIDENT ASSESSMENT.
(a) The nursing facility shall perform a resident as-
sessment in accordance with section 1819(b)(3) of the So-
cial Security Act (42 U.S.C. 1395i–3(a)) within 14 days
of admission of the resident and at such other times as
required by that section.
(b) The resident assessment shall be used to deter-
mine the resident class of each resident in the nursing fa-
cility for purposes of determining the per diem rate for
the nursing service cost center in accordance with section
108.
SEC. 108. THE PER DIEM RATE FOR NURSING SERVICE
COSTS.
(a)(1) The nursing service cost center rate shall be
calculated using a prospective, facility-specific per diem
rate based on the nursing facility’s case-mix weight and
nursing service costs during the base year.
(2) The case-mix weight of a nursing facility shall
be obtained by multiplying the number of resident days
in each resident class at a nursing facility during the base
year by the relative weight assigned to each resident class
in the appropriate geographic region. Once this calculation
is performed for each resident class in the nursing facility,
the sum of these products shall constitute the case-mix
weight for the nursing facility.
(3) A facility nursing unit value for the nursing facil-
ity for the base year shall be obtained by dividing the nurs-
ing service costs for the base year, which shall be indexed
forward from the midpoint of the base period to the mid-
point of the rate period using the DRI McGraw-Hill
HCFA Nursing Home Without Capital Market Basket, by
the case-mix weight of the nursing facility for the base
year.
(4) A facility-specific nursing services price for each
resident class shall be obtained by multiplying the lower
of the indexed facility unit value of the nursing facility
during the base year or the geographic ceiling, as deter-
mined in accordance with subsection (b), by the relative
weight of the resident class.
(5) The Secretary shall designate certain resident
classes as requiring heavy care. An acuity payment of 3
percent of the facility-specific nursing services price shall
be added on to the facility-specific price for each resident
class which the Secretary has designated as requiring
heavy care. The acuity payment is intended to provide an
(1) Local supply and/or labor shortages which
substantially increase costs to specific nursing facili-
ties.
(2) Higher per resident day usage of contract
nursing personnel, if utilization of contract nursing
personnel is warranted by local circumstances, and
the provider has taken all reasonable measures to
minimize contract personnel expense.
(3) Extraordinarily low proportion of distinct
part nursing facilities in a geographic region result-
ing in a geographic ceiling which unfairly restricts
the reimbursement of distinct part facilities.
(4) Regulatory changes that increase costs to
only a subset of the nursing facility industry.
(5) The offering of a new institutional health
service or treatment program by a nursing facility
(in order to account for initial start-up costs).
(6) Disproportionate usage of part-time employ-
ees, where adequate numbers of full-time employees
cannot reasonably be obtained.
(7) Other cost producing factors, to be specified
by the Secretary in regulations that are specific to
a subset of facilities in a geographic region (except
case-mix variation).
SEC. 109. THE PER DIEM RATE FOR ADMINISTRATIVE AND
GENERAL COSTS.
(a)(1) Payment relative to the administrative and
general cost center shall be a facility-specific, prospective,
per diem rate.
(2) The Secretary shall assign a per diem rate to a
nursing facility by applying 2 standards which shall be cal-
culated as follows:
(A) Standard A shall be derived for each geo-
graphic region by first creating an array of indexed
nursing facility administrative and general per diem
costs from lowest to highest. The Secretary shall
then identify a fixed proportion by dividing the in-
dexed administrative and general per diem costs of
the nursing facility which contained the medianth
resident day of the array (except as provided in sub-
section (a)(4)) into the indexed administrative and
general per diem costs of the nursing facility which
contained the 75th percentile resident day in that
array. Standard A for each base year shall con-
stitute the product of this fixed proportion (e.g., 1.1
times the median or 110 percent of the median) and
the administrative and general indexed per diem
costs of the nursing facility which contained the
medianth resident day in the array of such costs
during the base year.
(B) Standard B shall be derived using the same
calculation as in subparagraph (A) except that the
fixed proportion shall use the indexed administrative
and general costs of the nursing facility containing
the 85th percentile, rather than the 75th percentile,
resident day in the array of such costs.
(3) The Secretary shall use the geographic regions
identified in section 105(c) for purposes of determining
Standard A and Standard B.
(4) The Secretary shall exclude low-volume and new
nursing facilities, as defined in subsections (a) and (b) of
section 113, respectively, for purposes of determining
Standard A and Standard B.
(5) To determine a nursing facility’s per diem rate
for the administrative and general cost center, Standard
A and Standard B shall be applied to a nursing facility’s
administrative and general per diem costs, indexed for-
ward using the DRI McGraw-Hill HCFA Nursing Home
Without Capital Market Basket, as follows:
(A) Each nursing facility having indexed costs
which fall below the median shall be assigned a rate
equal to such facility’s individual indexed costs plus
an ‘‘efficiency incentive’’ equal to one half of the dif-
ference between the median and Standard A.
(B) Each nursing facility having indexed costs
which fall below Standard A but at or above the me-
dian shall be assigned a per diem rate equal to such
facility’s individual indexed costs plus an ‘‘efficiency
incentive’’ equal to one-half of the difference be-
tween such facility’s indexed costs and Standard A.
(C) Each nursing facility having indexed costs
which fall between Standard A and Standard B shall
be assigned a rate equal to Standard A plus one-half
of the difference between such facility’s indexed
costs and Standard A.
(D) Each nursing facility having indexed costs
which exceed Standard B shall be assigned a rate as
if such facility’s costs equaled Standard B. These
nursing facilities shall be assigned a per diem rate
equal to Standard A plus one-half of the difference
between Standard A and Standard B.
(E) For purposes of subparagraphs (A) through
(D), the median represents the indexed administra-
tive and general per diem costs of the nursing facil-
ity which contained the medianth resident day in the
array of such costs during the base year in the geo-
graphic region.
(b) Rebasing of the payment rates for administrative
and general costs shall occur no less frequently than once
a year.
SEC. 110. PAYMENT FOR FEE-FOR-SERVICE ANCILLARY
SERVICES.
(a) Payment for each ancillary service enumerated in
section 106(a)(3), such as physical therapy, shall be cal-
culated and paid on a prospective fee-for-service basis.
(b) The Secretary shall identify the fee for each of
the fee-for-service ancillary services for a particular nurs-
ing facility by dividing the nursing facility’s actual costs,
including overhead allocated through the cost finding proc-
ess, of providing each particular service, indexed forward
using the DRI McGraw-Hill HCFA Nursing Home With-
out Capital Market Basket, by the units of the particular
service provided by the nursing facility during the cost
year.
(c) The fee for each of the fee-for-service ancillary
services shall be calculated at least once a year for each
facility and ancillary service.
SEC. 111. REIMBURSEMENT OF SELECTED ANCILLARY
SERVICES AND OTHER COSTS.
(a) Reimbursement of selected ancillary services and
other costs identified in section 106(a)(4), such as drugs
and medical supplies, shall be reimbursed on a retrospec-
tive basis as pass-through costs, including overhead allo-
cated through the cost-finding process.
(b) The Secretary shall set charge-based interim rates
for selected ancillary services and other costs for each
nursing facility providing such services. Any overpayments
or underpayments resulting from the difference between
the interim and final settlement rates shall be either re-
funded by the nursing facility or paid to the nursing facil-
ity following submission of a timely filed medicare cost
report.
SEC. 112. THE PER DIEM RATE FOR PROPERTY COSTS.
(a)(1) The basis for payment within the property cost
center for nursing facilities shall be calculated and paid
on a prospective (except as provided for newly constructed
facilities in subsection (d)(2)), facility-specific, per resi-
dent day rate based on the fair asset value of the property.
(2)(A) The fair asset value of the property shall con-
stitute the sum of the market value of the land (including
site preparation costs), a reconstruction cost appraised
value for the buildings and fixed equipment, and the prod-
uct of the number of beds in the nursing facility and a
per bed allowance for major movable equipment.
(B) The land, buildings, and fixed equipment which
are included in determining the fair asset value must be
used in connection with the care of residents.
‘‘(B) MODEL ACT.—The following require-
ments of the model Act must be met:
‘‘(i) Section 6F (relating to right to
return), except that such section shall also
apply to denials of applications and any re-
fund shall be made within 30 days of the
return or denial.
‘‘(ii) Section 6G (relating to outline of
coverage).
‘‘(iii) Section 6H (relating to require-
ments for certificates under group plans).
‘‘(iv) Section 6I (relating to policy
summary).
‘‘(v) Section 6J (relating to monthly
reports on accelerated death benefits).
‘‘(vi) Section 7 (relating to incontest-
ability period).
‘‘(C) DEFINITIONS.—For purposes of this
paragraph, the terms ‘model regulation’ and
‘model Act’ have the meanings given such terms
by section 7702B(f)(2)(B).
‘‘(2) DELIVERY OF POLICY.—If an application
for a long-term care insurance policy (or for a cer-
tificate under a group long-term care insurance pol-
icy) is approved, the issuer shall deliver to the appli-