340 
ment that would have been made 
by the entity or the PBM for the 
ingredient cost of such drug if 
such drug had not been pur-
chased by such covered entity; 
and 
‘‘(cc) such covered entity re-
ports to the Secretary (in a form 
and manner specified by the Sec-
retary), on an annual basis and 
with respect to payments for the 
ingredient costs of such drugs so 
purchased by such covered entity 
that are in excess of the actual 
acquisition costs for such drugs, 
the aggregate amount of such ex-
cess; 
‘‘(ii) payment to the entity or the 
PBM (as applicable) for administrative 
services performed by the entity or PBM is 
limited to an administrative fee that re-
flects the fair market value (as defined by 
the Secretary) of such services; 
‘‘(iii) the entity or the PBM (as appli-
cable) makes available to the State, and 
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the Secretary upon request in a form and 
manner specified by the Secretary, all costs 
and payments related to covered outpatient 
drugs and accompanying administrative 
services (as described in clause (ii)) in-
curred, received, or made by the entity or 
the PBM, broken down (as specified by the 
Secretary), to the extent such costs and 
payments are attributable to an individual 
covered outpatient drug, by each such 
drug, including any ingredient costs, pro-
fessional dispensing fees, administrative 
fees (as described in clause (ii)), post-sale 
and post-invoice fees, discounts, or related 
adjustments such as direct and indirect re-
muneration fees, and any and all other re-
muneration, as defined by the Secretary; 
and 
‘‘(iv) any form of spread pricing 
whereby any amount charged or claimed by 
the entity or the PBM (as applicable) that 
exceeds the amount paid to the pharmacies 
or providers on behalf of the State or enti-
ty, including any post-sale or post-invoice 
fees, discounts, or related adjustments 
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342 
such as direct and indirect remuneration 
fees or assessments, as defined by the Sec-
retary, (after allowing for an administra-
tive fee as described in clause (ii)) is not 
allowable for purposes of claiming Federal 
matching payments under this title. 
‘‘(B) PUBLICATION
OF
INFORMATION.— 
The Secretary shall publish, not less frequently 
than on an annual basis and in a manner that 
does not disclose the identity of a particular 
covered entity or organization, information re-
ceived by the Secretary pursuant to subpara-
graph (A)(iii)(III) that is broken out by State 
and by each of the following categories of cov-
ered entity within each such State: 
‘‘(i) Covered entities described in sub-
paragraph (A) of section 340B(a)(4) of the 
Public Health Service Act. 
‘‘(ii) Covered entities described in sub-
paragraphs (B) through (K) of such sec-
tion. 
‘‘(iii) Covered entities described in 
subparagraph (L) of such section. 
‘‘(iv) Covered entities described in 
subparagraph (M) of such section. 
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343 
‘‘(v) Covered entities described in sub-
paragraph (N) of such section. 
‘‘(vi) Covered entities described in 
subparagraph (O) of such section.’’; and 
(2) in subsection (k), as previously amended by 
this subtitle, by adding at the end the following new 
paragraph: 
‘‘(14) PHARMACY
BENEFIT
MANAGER.—The 
term ‘pharmacy benefit manager’ means any person 
or entity that, either directly or through an inter-
mediary, acts as a price negotiator or group pur-
chaser on behalf of a State, managed care entity (as 
defined in section 1903(m)(9)(D)), or other specified 
entity (as so defined), or manages the prescription 
drug benefits provided by a State, managed care en-
tity, or other specified entity, including the proc-
essing and payment of claims for prescription drugs, 
the performance of drug utilization review, the proc-
essing of drug prior authorization requests, the man-
aging of appeals or grievances related to the pre-
scription drug benefits, contracting with pharmacies, 
controlling the cost of covered outpatient drugs, or 
the provision of services related thereto. Such term 
includes any person or entity that acts as a price ne-
gotiator (with regard to payment amounts to phar-
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macies and providers for a covered outpatient drug 
or the net cost of the drug) or group purchaser on 
behalf of a State, managed care entity, or other 
specified entity or that carries out 1 or more of the 
other activities described in the preceding sentence, 
irrespective of whether such person or entity calls 
itself a pharmacy benefit manager.’’. 
(b) CONFORMING AMENDMENTS.—Section 1903(m) 
of such Act (42 U.S.C. 1396b(m)) is amended— 
(1) in paragraph (2)(A)(xiii)— 
(A) by striking ‘‘and (III)’’ and inserting 
‘‘(III)’’; 
(B) by inserting before the period at the 
end the following: ‘‘, and (IV) if the contract in-
cludes provisions making the entity responsible 
for coverage of covered outpatient drugs, the 
entity shall comply with the requirements of 
section 1927(e)(6)’’; and 
(C) by moving the left margin 2 ems to the 
left; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(10) No payment shall be made under this 
title to a State with respect to expenditures incurred 
by the State for payment for services provided by an 
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345 
other specified entity (as defined in paragraph 
(9)(D)(iii)) unless such services are provided in ac-
cordance with a contract between the State and such 
entity which satisfies the requirements of paragraph 
(2)(A)(xiii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contracts between States and 
managed care entities, other specified entities, or phar-
macy benefit managers that have an effective date begin-
ning on or after the date that is 18 months after the date 
of enactment of this section. 
(d) IMPLEMENTATION.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary of Health and 
Human Services may implement the amendments 
made by this section by program instruction or oth-
erwise. 
(2) NONAPPLICATION OF ADMINISTRATIVE PRO-
CEDURE ACT.—Implementation of the amendments 
made by this section shall be exempt from the re-
quirements of section 553 of title 5, United States 
Code. 
(e) NONAPPLICATION OF PAPERWORK REDUCTION 
ACT.—Chapter 35 of title 44, United States Code, shall 
not apply to any data collection undertaken by the Sec-
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retary of Health and Human Services under section 
1927(e) of the Social Security Act (42 U.S.C. 1396r– 
8(e)), as amended by this section. 
SEC. 44125. PROHIBITING FEDERAL MEDICAID AND CHIP 
FUNDING FOR GENDER TRANSITION PROCE-
DURES FOR MINORS. 
(a) MEDICAID.—Section 1903(i) of the Social Secu-
rity Act (42 U.S.C. 1396b(i)) is amended— 
(1) in paragraph (26), by striking ‘‘; or’’ and 
inserting a semicolon; 
(2) in paragraph (27), by striking the period at 
the end and inserting ‘‘; or’’; 
(3) by inserting after paragraph (27) the fol-
lowing new paragraph: 
‘‘(28) with respect to any amount expended for 
specified gender transition procedures (as defined in 
section 1905(kk)) furnished to an individual under 
18 years of age enrolled in a State plan (or waiver 
of such plan).’’; and 
(4) in the flush left matter at the end, by strik-
ing ‘‘and (18),’’ and inserting ‘‘(18), and (28)’’. 
(b) CHIP.—Section 2107(e)(1)(N) of the Social Se-
curity Act (42 U.S.C. 1397gg(e)(1)(N)) is amended by 
striking ‘‘and (17)’’ and inserting ‘‘(17), and (28)’’. 
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347 
(c) SPECIFIED GENDER TRANSITION PROCEDURES 
DEFINED.—Section 1905 of the Social Security Act (42 
U.S.C. 1396d) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(kk) SPECIFIED
GENDER
TRANSITION
PROCE-
DURES.— 
‘‘(1) IN
GENERAL.—For purposes of section 
1903(i)(28), except as provided in paragraph (2), 
the term ‘specified gender transition procedure’ 
means, with respect to an individual, any of the fol-
lowing when performed for the purpose of inten-
tionally changing the body of such individual (in-
cluding by disrupting the body’s development, inhib-
iting its natural functions, or modifying its appear-
ance) to no longer correspond to the individual’s sex: 
‘‘(A) Performing any surgery, including— 
‘‘(i) castration; 
‘‘(ii) sterilization; 
‘‘(iii) orchiectomy; 
‘‘(iv) scrotoplasty; 
‘‘(v) vasectomy; 
‘‘(vi) tubal ligation; 
‘‘(vii) hysterectomy; 
‘‘(viii) oophorectomy; 
‘‘(ix) ovariectomy; 
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348 
‘‘(x) metoidioplasty; 
‘‘(xi) clitoroplasty; 
‘‘(xii) reconstruction of the fixed part 
of 
the 
urethra 
with 
or 
without 
a 
metoidioplasty or a phalloplasty; 
‘‘(xiii) penectomy; 
‘‘(xiv) phalloplasty; 
‘‘(xv) vaginoplasty; 
‘‘(xvi) vaginectomy; 
‘‘(xvii) vulvoplasty; 
‘‘(xviii) reduction thyrochondroplasty; 
‘‘(xix) chondrolaryngoplasty; 
‘‘(xx) mastectomy; and 
‘‘(xxi) any plastic, cosmetic, or aes-
thetic 
surgery 
that 
feminizes 
or 
masculinizes the facial or other body fea-
tures of an individual. 
‘‘(B) Any placement of chest implants to 
create feminine breasts or any placement of 
erection or testicular prostheses. 
‘‘(C) Any placement of fat or artificial im-
plants in the gluteal region. 
‘‘(D) Administering, prescribing, or dis-
pensing to an individual medications, includ-
ing— 
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349 
‘‘(i) gonadotropin-releasing hormone 
(GnRH) analogues or other puberty-block-
ing drugs to stop or delay normal puberty; 
and 
‘‘(ii) testosterone, estrogen, or other 
androgens to an individual at doses that 
are supraphysiologic than would normally 
be produced endogenously in a healthy in-
dividual of the same age and sex. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to the following when furnished to an indi-
vidual by a health care provider with the consent of 
such individual’s parent or legal guardian: 
‘‘(A) Puberty suppression or blocking pre-
scription drugs for the purpose of normalizing 
puberty for an individual experiencing pre-
cocious puberty. 
‘‘(B) Medically necessary procedures or 
treatments to correct for— 
‘‘(i) a medically verifiable disorder of 
sex development, including— 
‘‘(I) 46,XX chromosomes with 
virilization; 
‘‘(II) 46,XY chromosomes with 
undervirilization; and 
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350 
‘‘(III) both ovarian and testicular 
tissue; 
‘‘(ii) sex chromosome structure, sex 
steroid hormone production, or sex hor-
mone action, if determined to be abnormal 
by a physician through genetic or bio-
chemical testing; 
‘‘(iii) infection, disease, injury, or dis-
order caused or exacerbated by a previous 
procedure described in paragraph (1), or a 
physical disorder, physical injury, or phys-
ical illness that would, as certified by a 
physician, place the individual in imminent 
danger of death or impairment of a major 
bodily function unless the procedure is per-
formed, not including procedures per-
formed for the alleviation of mental dis-
tress; or 
‘‘(iv) procedures to restore or recon-
struct the body of the individual in order 
to correspond to the individual’s sex after 
one or more previous procedures described 
in paragraph (1), which may include the 
removal of a pseudo phallus or breast aug-
mentation. 
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351 
‘‘(3) SEX.—For purposes of paragraph (1), the 
term ‘sex’ means either male or female, as bio-
logically determined and defined in paragraphs (4) 
and (5), respectively. 
‘‘(4) FEMALE.—For purposes of paragraph (3), 
the term ‘female’ means an individual who naturally 
has, had, will have, or would have, but for a develop-
mental or genetic anomaly or historical accident, the 
reproductive system that at some point produces, 
transports, and utilizes eggs for fertilization. 
‘‘(5) MALE.—For purposes of paragraph (3), 
the term ‘male’ means an individual who naturally 
has, had, will have, or would have, but for a develop-
mental or genetic anomaly or historical accident, the 
reproductive system that at some point produces, 
transports, and utilizes sperm for fertilization.’’. 
SEC. 44126. FEDERAL PAYMENTS TO PROHIBITED ENTI-
TIES. 
(a) IN GENERAL.—No Federal funds that are consid-
ered direct spending and provided to carry out a State 
plan under title XIX of the Social Security Act or a waiver 
of such a plan shall be used to make payments to a prohib-
ited entity for items and services furnished during the 10- 
year period beginning on the date of the enactment of this 
Act, including any payments made directly to the prohib-
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352 
ited entity or under a contract or other arrangement be-
tween a State and a covered organization. 
(b) DEFINITIONS.—In this section: 
(1) PROHIBITED ENTITY.—The term ‘‘prohib-
ited entity’’ means an entity, including its affiliates, 
subsidiaries, successors, and clinics— 
(A) that, as of the date of enactment of 
this Act— 
(i) is an organization described in sec-
tion 501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from tax under 
section 501(a) of such Code; 
(ii) is an essential community provider 
described in section 156.235 of title 45, 
Code of Federal Regulations (as in effect 
on the date of enactment of this Act), that 
is primarily engaged in family planning 
services, reproductive health, and related 
medical care; and 
(iii) provides for abortions, other than 
an abortion— 
(I) if the pregnancy is the result 
of an act of rape or incest; or 
(II) in the case where a woman 
suffers from a physical disorder, phys-
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353 
ical injury, or physical illness, includ-
ing a life-endangering physical condi-
tion caused by or arising from the 
pregnancy itself, that would, as cer-
tified by a physician, place the woman 
in danger of death unless an abortion 
is performed; and 
(B) for which the total amount of Federal 
and State expenditures under the Medicaid pro-
gram under title XIX of the Social Security Act 
in fiscal year 2024 made directly, or by a cov-
ered organization, to the entity or to any affili-
ates, subsidiaries, successors, or clinics of the 
entity, or made to the entity or to any affiliates, 
subsidiaries, successors, or clinics of the entity 
as part of a nationwide health care provider 
network, exceeded $1,000,000. 
(2) DIRECT
SPENDING.—The term ‘‘direct 
spending’’ has the meaning given that term under 
section 250(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 
(3) COVERED ORGANIZATION.—The term ‘‘cov-
ered organization’’ means a managed care entity (as 
defined in section 1932(a)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1396u–2(a)(1)(B))) or a prepaid 
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354 
inpatient health plan or prepaid ambulatory health 
plan (as such terms are defined in section 
1903(m)(9)(D) 
of 
such 
Act 
(42 
U.S.C. 
1396b(m)(9)(D))). 
(4) STATE.—The term ‘‘State’’ has the mean-
ing given such term in section 1101 of the Social Se-
curity Act (42 U.S.C. 1301). 
Subpart C—Stopping Abusive Financing Practices 
SEC. 44131. SUNSETTING ELIGIBILITY FOR INCREASED 
FMAP FOR NEW EXPANSION STATES. 
Section 1905(ii)(3) of the Social Security Act (42 
U.S.C. 1396d(ii)(3)) is amended— 
(1) by striking ‘‘which has not’’ and inserting 
the following: ‘‘which— 
‘‘(A) has not’’; 
(2) in subparagraph (A), as so inserted, by 
striking the period at the end and inserting ‘‘; and’’; 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) begins to expend amounts for all such 
individuals prior to January 1, 2026.’’. 
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355 
SEC. 44132. MORATORIUM ON NEW OR INCREASED PRO-
VIDER TAXES. 
Section 1903(w)(1)(A)(iii) of the Social Security Act 
(42 U.S.C. 1396b(w)(1)(A)(iii)) is amended— 
(1) by striking ‘‘or’’ at the end; 
(2) by striking ‘‘if there’’ and inserting ‘‘if— 
‘‘(I) there’’; and 
(3) by adding at the end the following new sub-
clauses: 
‘‘(II) the tax is first imposed by the State 
(or by a unit of local government in the State) 
on or after the date of the enactment of this 
subclause (other than such a tax for which the 
legislation or regulations providing for the im-
position of such tax were enacted or adopted 
prior to such date of enactment); or 
‘‘(III) on or after the date of the enact-
ment of this subclause, the State (or unit of 
local government) increases the amount or rate 
of tax imposed with respect to a class of health 
care items or services (or with respect to a type 
of provider or activity within such a class), or 
increases the base of the tax such that the tax 
is imposed with respect to a class of items or 
services (or with respect to a type of provider 
or activity within such a class) to which the tax 
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356 
did not previously apply, but only to the extent 
that such revenues are attributable to such in-
crease and only if such increase was not pro-
vided for in legislation or regulations enacted or 
adopted prior to such date of enactment; or’’. 
SEC. 44133. REVISING THE PAYMENT LIMIT FOR CERTAIN 
STATE DIRECTED PAYMENTS. 
(a) IN GENERAL.—Subject to subsection (b), the Sec-
retary of Health and Human Services shall revise section 
438.6(c)(2)(iii) of title 42, Code of Federal Regulations 
(or a successor regulation) such that, with respect to a 
payment described in such section made for a service fur-
nished during a rating period beginning on or after the 
date of the enactment of this Act, the total payment rate 
for such service is limited to 100 percent of the specified 
total published Medicare payment rate. 
(b) GRANDFATHERING CERTAIN PAYMENTS.—In the 
case of a payment described in section 438.6(c)(2)(iii) of 
title 42, Code of Federal Regulations (or a successor regu-
lation) for which written prior approval was made before 
the date of the enactment of this Act for the rating period 
occurring as of such date of enactment, or a payment so 
described for such rating period for which a preprint was 
submitted to the Secretary of Health and Human Services 
prior to such date of enactment, the revisions described 
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357 
in subsection (a) shall not apply to such payment for such 
rating period and for any subsequent rating period if the 
amount of such payment does not exceed the amount of 
such payment so approved. 
(c) DEFINITIONS.—In this section: 
(1) RATING
PERIOD.—The term ‘‘rating pe-
riod’’ has the meaning given such term in section 
438.2 of title 42, Code of Federal Regulations (or a 
successor regulation). 
(2) TOTAL
PUBLISHED
MEDICARE
PAYMENT 
RATE.—The term ‘‘total published Medicare pay-
ment rate’’ means amounts calculated as payment 
for specific services that have been developed under 
part A or part B of title XVIII of the Social Secu-
rity Act (42 U.S.C. 1395 et seq.). 
(3) WRITTEN
PRIOR
APPROVAL.—The term 
‘‘written prior approval’’ has the meaning given such 
term in section 438.6(c)(2)(i) of title 42, Code of 
Federal Regulations (or a successor regulation). 
(d) FUNDING.—There are appropriated out of any 
monies in the Treasury not otherwise appropriated 
$7,000,000 for each of fiscal years 2026 through 2033 
for purposes of carrying out this section. 
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358 
SEC. 44134. REQUIREMENTS REGARDING WAIVER OF UNI-
FORM TAX REQUIREMENT FOR MEDICAID 
PROVIDER TAX. 
(a) IN GENERAL.—Section 1903(w) of the Social Se-
curity Act (42 U.S.C. 1396b(w)) is amended— 
(1) in paragraph (3)(E), by inserting after 
clause (ii)(II) the following new clause: 
‘‘(iii) For purposes of clause (ii)(I), a tax is not con-
sidered to be generally redistributive if any of the following 
conditions apply: 
‘‘(I) Within a permissible class, the tax rate im-
posed on any taxpayer or tax rate group (as defined 
in paragraph (7)(J)) explicitly defined by its rel-
atively lower volume or percentage of Medicaid tax-
able units (as defined in paragraph (7)(H)) is lower 
than the tax rate imposed on any other taxpayer or 
tax rate group explicitly defined by its relatively 
higher volume or percentage of Medicaid taxable 
units. 
‘‘(II) Within a permissible class, the tax rate 
imposed on any taxpayer or tax rate group (as so 
defined) based upon its Medicaid taxable units (as 
so defined) is higher than the tax rate imposed on 
any taxpayer or tax rate group based upon its non- 
Medicaid taxable unit (as defined in paragraph 
(7)(I)). 
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359 
‘‘(III) The tax excludes or imposes a lower tax 
rate on a taxpayer or tax rate group (as so defined) 
based on or defined by any description that results 
in the same effect as described in subclause (I) or 
(II) for a taxpayer or tax rate group. Characteristics 
that may indicate such type of exclusion include the 
use of terminology to establish a tax rate group— 
‘‘(aa) based on payments or expenditures 
made under the program under this title with-
out mentioning the term ‘Medicaid’ (or any 
similar term) to accomplish the same effect as 
described in subclause (I) or (II); or 
‘‘(bb) that closely approximates a taxpayer 
or tax rate group under the program under this 
title, to the same effect as described in sub-
clause (I) or (II).’’; and 
(2) in paragraph (7), by adding at the end the 
following new subparagraphs: 
‘‘(H) The term ‘Medicaid taxable unit’ means a 
unit that is being taxed within a health care related 
tax that is applicable to the program under this title. 
Such term includes a unit that is used as the basis 
for— 
‘‘(i) payment under the program under this 
title (such as Medicaid bed days); 
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‘‘(ii) Medicaid revenue; 
‘‘(iii) costs associated with the program 
under this title (such as Medicaid charges, 
claims, or expenditures); and 
‘‘(iv) other units associated with the pro-
gram under this title, as determined by the Sec-
retary. 
‘‘(I) The term ‘non-Medicaid taxable unit’ 
means a unit that is being taxed within a health 
care related tax that is not applicable to the pro-
gram under this title. Such term includes a unit that 
is used as the basis for— 
‘‘(i) payment by non-Medicaid payers (such 
as non-Medicaid bed days); 
‘‘(ii) non-Medicaid revenue; 
‘‘(iii) costs that are not associated with the 
program under this title (such as non-Medicaid 
charges, non-Medicaid claims, or non-Medicaid 
expenditures); and 
‘‘(iv) other units not associated with the 
program under this title, as determined by the 
Secretary. 
‘‘(J) The term ‘tax rate group’ means a group 
of entities contained within a permissible class of a 
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health care related tax that are taxed at the same 
rate.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect upon the date of enactment 
of this Act, subject to any applicable transition period de-
termined appropriate by the Secretary of Health and 
Human Services, not to exceed 3 fiscal years. 
SEC. 44135. REQUIRING BUDGET NEUTRALITY FOR MED-
ICAID DEMONSTRATION PROJECTS UNDER 
SECTION 1115. 
Section 1115 of the Social Security Act (42 U.S.C. 
1315) is amended by adding at the end the following new 
subsection: 
‘‘(g) REQUIREMENT OF BUDGET NEUTRALITY FOR 
MEDICAID DEMONSTRATION PROJECTS.— 
‘‘(1) IN GENERAL.—Beginning on the date of 
the enactment of this subsection, the Secretary may 
not approve an application for (or renewal or 
amendment of) an experimental, pilot, or demonstra-
tion project undertaken under subsection (a) to pro-
mote the objectives of title XIX in a State (in this 
subsection referred to as a ‘Medicaid demonstration 
project’) unless the Secretary certifies that such 
project is not expected to result in an increase in the 
amount of Federal expenditures compared to the 
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amount that such expenditures would otherwise be 
in the absence of such project. 
‘‘(2) TREATMENT OF SAVINGS.—In the event 
that Federal expenditures with respect to a State 
under a Medicaid demonstration project are, during 
an approval period for such project, less than the 
amount of such expenditures that would have other-
wise been made in the absence of such project, the 
Secretary shall specify the methodology to be used 
with respect to any subsequent approval period for 
such project for purposes of taking the difference be-
tween such expenditures into account.’’. 
Subpart D—Increasing Personal Accountability 
SEC. 44141. REQUIREMENT FOR STATES TO ESTABLISH 
MEDICAID COMMUNITY ENGAGEMENT RE-
QUIREMENTS FOR CERTAIN INDIVIDUALS. 
(a) IN GENERAL.—Section 1902 of the Social Secu-
rity Act (42 U.S.C. 1396a), as amended by sections 44103 
and 44104, is further amended by adding at the end the 
following new subsection: 
‘‘(xx) COMMUNITY ENGAGEMENT REQUIREMENT FOR 
APPLICABLE INDIVIDUALS.— 
‘‘(1) IN
GENERAL.—Beginning January 1, 
2029, subject to the succeeding provisions of this 
subsection, a State shall provide, as a condition of 
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eligibility for medical assistance for an applicable in-
dividual, that such individual is required to dem-
onstrate community engagement under paragraph 
(2)— 
‘‘(A) in the case of an applicable individual 
who has filed an application for medical assist-
ance under a State plan (or a waiver of such 
plan) under this title, for 1 or more (as speci-
fied by the State) consecutive months imme-
diately preceding the month during which such 
individual applies for such medical assistance; 
and 
‘‘(B) in the case of an applicable individual 
enrolled and receiving medical assistance under 
a State plan (or under a waiver of such plan) 
under this title, for 1 or more (as specified by 
the State) months, whether or not consecu-
tive— 
‘‘(i) during the period between such 
individual’s most recent determination (or 
redetermination, as applicable) of eligibility 
and such individual’s next regularly sched-
uled redetermination of eligibility (as 
verified by the State as part of such regu-
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larly scheduled redetermination of eligi-
bility); or 
‘‘(ii) in the case of a State that has 
elected under paragraph (4) to conduct 
more frequent verifications of compliance 
with the requirement to demonstrate com-
munity engagement, during the period be-
tween the most recent and next such 
verification with respect to such individual. 
‘‘(2) COMMUNITY
ENGAGEMENT
COMPLIANCE 
DESCRIBED.—Subject to paragraph (3), an applica-
ble individual demonstrates community engagement 
under this paragraph for a month if such individual 
meets 1 or more of the following conditions with re-
spect to such month, as determined in accordance 
with criteria established by the Secretary through 
regulation: 
‘‘(A) The individual works not less than 80 
hours. 
‘‘(B) The individual completes not less 
than 80 hours of community service. 
‘‘(C) The individual participates in a work 
program for not less than 80 hours. 
‘‘(D) The individual is enrolled in an edu-
cational program at least half-time. 
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‘‘(E) The individual engages in any com-
bination of the activities described in subpara-
graphs (A) through (D), for a total of not less 
than 80 hours. 
‘‘(F) The individual has a monthly income 
that is not less than the applicable minimum 
wage requirement under section 6 of the Fair 
Labor Standards Act of 1938, multiplied by 80 
hours. 
‘‘(3) EXCEPTIONS.— 
‘‘(A) MANDATORY
EXCEPTION
FOR
CER-
TAIN INDIVIDUALS.—The State shall deem an 
applicable individual to have demonstrated com-
munity engagement under paragraph (2) for a 
month if— 
‘‘(i) for part or all of such month, the 
individual— 
‘‘(I) was a specified excluded in-
dividual (as defined in paragraph 
(9)(A)(ii)); or 
‘‘(II) was— 
‘‘(aa) under the age of 19; 
‘‘(bb) pregnant or entitled to 
postpartum medical assistance 
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366 
under paragraph (5) or (16) of 
subsection (e); 
‘‘(cc) entitled to, or enrolled 
for, benefits under part A of title 
XVIII, or enrolled for benefits 
under part B of title XVIII; or 
‘‘(dd) described in any of 
subclauses (I) through (VII) of 
subsection (a)(10)(A)(i); or 
‘‘(ii) at any point during the 3-month 
period ending on the first day of such 
month, the individual was an inmate of a 
public institution. 
‘‘(B) OPTIONAL EXCEPTION FOR SHORT- 
TERM HARDSHIP EVENTS.— 
‘‘(i) IN GENERAL.—The State plan (or 
waiver of such plan) may provide, in the 
case of an applicable individual who experi-
ences a short-term hardship event during a 
month, that the State shall, upon the re-
quest of such individual under procedures 
established by the State (in accordance 
with standards specified by the Secretary), 
deem such individual to have demonstrated 
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367 
community engagement under paragraph 
(2) for such month. 
‘‘(ii) SHORT-TERM HARDSHIP EVENT 
DEFINED.—For purposes of this subpara-
graph, an applicable individual experiences 
a short-term hardship event during a 
month if, for part or all of such month— 
‘‘(I) such individual receives in-
patient hospital services, nursing facil-
ity services, services in an inter-
mediate care facility for individuals 
with intellectual disabilities, inpatient 
psychiatric hospital services, or such 
other services as the Secretary deter-
mines appropriate; 
‘‘(II) such individual resides in a 
county (or equivalent unit of local 
government)— 
‘‘(aa) in which there exists 
an emergency or disaster de-
clared by the President pursuant 
to the National Emergencies Act 
or the Robert T. Stafford Dis-
aster Relief and Emergency As-
sistance Act; or 
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368 
‘‘(bb) that, subject to a re-
quest from the State to the Sec-
retary, made in such form, at 
such time, and containing such 
information as the Secretary may 
require, has an unemployment 
rate that is at or above the lesser 
of— 
‘‘(AA) 8 percent; or 
‘‘(BB) 1.5 times the 
national unemployment rate; 
or 
‘‘(III) such individual experiences 
any other short-term hardship (as de-
fined by the Secretary). 
‘‘(4) OPTION
TO
CONDUCT
MORE
FREQUENT 
COMPLIANCE
VERIFICATIONS.—With respect to an 
applicable individual enrolled and receiving medical 
assistance under a State plan (or a waiver of such 
plan) under this title, the State shall verify (in ac-
cordance with procedures specified by the Secretary) 
that each such individual has met the requirement 
to demonstrate community engagement under para-
graph (1) during each such individual’s regularly 
scheduled redetermination of eligibility, except that a 
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369 
State may provide for such verifications more fre-
quently. 
‘‘(5) EX PARTE VERIFICATIONS.—For purposes 
of verifying that an applicable individual has met the 
requirement to demonstrate community engagement 
under paragraph (1), the State shall, in accordance 
with standards established by the Secretary, estab-
lish processes and use reliable information available 
to the State (such as payroll data) without requir-
ing, where possible, the applicable individual to sub-
mit additional information. 
‘‘(6) PROCEDURE IN THE CASE OF NONCOMPLI-
ANCE.— 
‘‘(A) IN GENERAL.—If a State is unable to 
verify that an applicable individual has met the 
requirement to demonstrate community engage-
ment under paragraph (1) (including, if appli-
cable, by verifying that such individual was 
deemed to have demonstrated community en-
gagement under paragraph (3)) the State shall 
(in accordance with standards specified by the 
Secretary)— 
‘‘(i) provide such individual with the 
notice of noncompliance described in sub-
paragraph (B); 
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370 
‘‘(ii) (I) provide such individual with a 
period of 30 calendar days, beginning on 
the date on which such notice of non-
compliance is received by the individual, 
to— 
‘‘(aa) make a satisfactory show-
ing to the State of compliance with 
such requirement (including, if appli-
cable, by showing that such individual 
was deemed to have demonstrated 
community engagement under para-
graph (3)); or 
‘‘(bb) make a satisfactory show-
ing to the State that such require-
ment does not apply to such indi-
vidual on the basis that such indi-
vidual does not meet the definition of 
applicable individual under paragraph 
(9)(A); and 
‘‘(II) if such individual is enrolled 
under the State plan (or a waiver of such 
plan) under this title, continue to provide 
such individual with medical assistance 
during such 30-calendar-day period; and 
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371 
‘‘(iii) if no such satisfactory showing 
is made and the individual is not a speci-
fied excluded individual described in para-
graph (9)(A)(ii), deny such individual’s ap-
plication for medical assistance under the 
State plan (or waiver of such plan) or, as 
applicable, disenroll such individual from 
the plan (or waiver of such plan) not later 
than the end of the month following the 
month in which such 30-calendar-day pe-
riod ends, provided that— 
‘‘(I) the State first determines 
whether, with respect to the indi-
vidual, there is any other basis for eli-
gibility for medical assistance under 
the State plan (or waiver of such 
plan) or for another insurance afford-
ability program; and 
‘‘(II) the individual is provided 
written notice and granted an oppor-
tunity for a fair hearing in accordance 
with subsection (a)(3). 
‘‘(B) NOTICE.—The notice of noncompli-
ance provided to an applicable individual under 
subparagraph (A)(i) shall include information 
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372 
(in accordance with standards specified by the 
Secretary) on— 
‘‘(i) how such individual may make a 
satisfactory showing of compliance with 
such requirement (as described in subpara-
graph (A)(ii)) or make a satisfactory show-
ing that such requirement does not apply 
to such individual on the basis that such 
individual does not meet the definition of 
applicable 
individual 
under 
paragraph 
(9)(A); and 
‘‘(ii) how such individual may reapply 
for medical assistance under the State plan 
(or a waiver of such plan) under this title 
in the case that such individuals’ applica-
tion is denied or, as applicable, in the case 
that such individual is disenrolled from the 
plan (or waiver). 
‘‘(7) TREATMENT OF NONCOMPLIANT INDIVID-
UALS
IN
RELATION
TO
CERTAIN
OTHER
PROVI-
SIONS.— 
‘‘(A) CERTAIN FMAP INCREASES.—A State 
shall not be treated as not providing medical as-
sistance to all individuals described in section 
1902(a)(10)(A)(i)(VIII), or as not expending 
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373 
amounts for all such individuals under the 
State plan (or waiver of such plan), solely be-
cause such an individual is determined ineligible 
for medical assistance under the State plan (or 
waiver) on the basis of a failure to meet the re-
quirement to demonstrate community engage-
ment under paragraph (1). 
‘‘(B) OTHER
PROVISIONS.—For purposes 
of section 36B(c)(2)(B) of the Internal Revenue 
Code of 1986, an individual shall be deemed to 
be eligible for minimum essential coverage de-
scribed in section 5000A(f)(1)(A)(ii) of such 
Code for a month if such individual would have 
been eligible for medical assistance under a 
State plan (or a waiver of such plan) under this 
title but for a failure to meet the requirement 
to demonstrate community engagement under 
paragraph (1). 
‘‘(8) OUTREACH.— 
‘‘(A) IN
GENERAL.—In accordance with 
standards specified by the Secretary, beginning 
not later than October 1, 2028 (or, if earlier, 
the date that precedes January 1, 2029, by the 
number of months specified by the State under 
paragraph (1)(A) plus 3 months), and periodi-
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374 
cally thereafter, the State shall notify applicable 
individuals enrolled under a State plan (or 
waiver) under this title of the requirement to 
demonstrate community engagement under this 
subsection. Such notice shall include informa-
tion on— 
‘‘(i) how to comply with such require-
ment, including an explanation of the ex-
ceptions to such requirement under para-
graph (3) and the definition of the term 
‘applicable individual’ under paragraph 
(9)(A); 
‘‘(ii) the consequences of noncompli-
ance with such requirement; and 
‘‘(iii) how to report to the State any 
change in the individual’s status that could 
result in— 
‘‘(I) the applicability of an excep-
tion under paragraph (3) (or the end 
of the applicability of such an excep-
tion); or 
‘‘(II) the individual qualifying as 
a specified excluded individual under 
paragraph (9)(A)(ii). 
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375 
‘‘(B) FORM OF OUTREACH NOTICE.—A no-
tice required under subparagraph (A) shall be 
delivered— 
‘‘(i) by regular mail (or, if elected by 
the individual, in an electronic format); 
and 
‘‘(ii) in 1 or more additional forms, 
which may include telephone, text message, 
an internet website, other commonly avail-
able electronic means, and such other 
forms as the Secretary determines appro-
priate. 
‘‘(9) DEFINITIONS.—In this subsection: 
‘‘(A) APPLICABLE INDIVIDUAL.— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble individual’ means an individual (other 
than a specified excluded individual (as de-
fined in clause (ii)))— 
‘‘(I) who is eligible to enroll (or 
is enrolled) under the State plan 
under subsection (a)(10)(A)(i)(VIII); 
or 
‘‘(II) who— 
‘‘(aa) is otherwise eligible to 
enroll (or is enrolled) under a 
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376 
waiver of such plan that provides 
coverage that is equivalent to 
minimum essential coverage (as 
described 
in 
section 
5000A(f)(1)(A) of the Internal 
Revenue Code of 1986 and as de-
termined 
in 
accordance 
with 
standards prescribed by the Sec-
retary in regulations); and 
‘‘(bb) has attained the age 
of 19 and is under 65 years of 
age, is not pregnant, is not enti-
tled to, or enrolled for, benefits 
under part A of title XVIII, or 
enrolled for benefits under part 
B of title XVIII, and is not oth-
erwise eligible to enroll under 
such plan. 
‘‘(ii) SPECIFIED
EXCLUDED
INDI-
VIDUAL.—For purposes of clause (i), the 
term ‘specified excluded individual’ means 
an individual, as determined by the State 
(in accordance with standards specified by 
the Secretary)— 
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377 
‘‘(I) who is described in sub-
section (a)(10)(A)(i)(IX); 
‘‘(II) who— 
‘‘(aa) is an Indian or an 
Urban Indian (as such terms are 
defined in paragraphs (13) and 
(28) of section 4 of the Indian 
Health Care Improvement Act); 
‘‘(bb) is a California Indian 
described in section 809(a) of 
such Act; or 
‘‘(cc) has otherwise been de-
termined eligible as an Indian for 
the Indian Health Service under 
regulations promulgated by the 
Secretary; 
‘‘(III) who is the parent, guard-
ian, or caretaker relative of a disabled 
individual or a dependent child; 
‘‘(IV) who is a veteran with a 
disability rated as total under section 
1155 of title 38, United States Code; 
‘‘(V) who is medically frail or 
otherwise has special medical needs 
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378 
(as defined by the Secretary), includ-
ing an individual— 
‘‘(aa) who is blind or dis-
abled (as defined in section 
1614); 
‘‘(bb) with a substance use 
disorder; 
‘‘(cc) with a disabling men-
tal disorder; 
‘‘(dd) with a physical, intel-
lectual 
or 
developmental 
dis-
ability that significantly impairs 
their ability to perform 1 or more 
activities of daily living; 
‘‘(ee) with a serious and 
complex medical condition; or 
‘‘(ff) subject to the approval 
of the Secretary, with any other 
medical condition identified by 
the State that is not otherwise 
identified under this clause; 
‘‘(VI) who— 
‘‘(aa) is in compliance with 
any requirements imposed by the 
State pursuant to section 407; or 
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379 
‘‘(bb) is a member of a 
household that receives supple-
mental nutrition assistance pro-
gram benefits under the Food 
and Nutrition Act of 2008 and is 
not exempt from a work require-
ment under such Act; 
‘‘(VII) who is participating in a 
drug addiction or alcoholic treatment 
and rehabilitation program (as defined 
in section 3(h) of the Food and Nutri-
tion Act of 2008); 
‘‘(VIII) who is an inmate of a 
public institution; or 
‘‘(IX) who meets such other cri-
teria as the Secretary determines ap-
propriate. 
‘‘(B) EDUCATIONAL PROGRAM.—The term 
‘educational program’ means— 
‘‘(i) an institution of higher education 
(as defined in section 101 of the Higher 
Education Act of 1965); 
‘‘(ii) a program of career and tech-
nical education (as defined in section 3 of 
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380 
the Carl D. Perkins Career and Technical 
Education Act of 2006); or 
‘‘(iii) any other educational program 
that meets such criteria as the Secretary 
determines appropriate. 
‘‘(C) STATE.—The term ‘State’ means 1 of 
the 50 States or the District of Columbia. 
‘‘(D) WORK
PROGRAM.—The term ‘work 
program’ has the meaning given such term in 
section 6(o)(1) of the Food and Nutrition Act 
of 2008. 
‘‘(10) PROHIBITING
WAIVER
OF
COMMUNITY 
ENGAGEMENT
REQUIREMENTS.—Notwithstanding 
section 1115(a), the provisions of this subsection 
may not be waived.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1902(a)(10)(A)(i)(VIII) of the Social Security Act (42 
U.S.C. 1396a(a)(10)(A)(i)(VIII)) is amended by striking 
‘‘subject to subsection (k)’’ and inserting ‘‘subject to sub-
sections (k) and (xx)’’. 
(c) RULEMAKING.—Not later than July 1, 2027, the 
Secretary of Health and Human Services shall promulgate 
regulations for purposes of carrying out the amendments 
made by this section. 
(d) GRANTS TO STATES.— 
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381 
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall, out of amounts appropriated 
under paragraph (3), award to each State a grant 
equal to the amount specified in paragraph (2) for 
such State for purposes of establishing systems nec-
essary to carry out the provisions of, and amend-
ments made by, this section. 
(2) AMOUNT
SPECIFIED.—For purposes of 
paragraph (2), the amount specified in this para-
graph is an amount that bears the same ratio to the 
amount appropriated under paragraph (3) as the 
number of applicable individuals (as defined in sec-
tion 1902(xx) of the Social Security Act, as added 
by subsection (a)) residing in such State bears to 
the total number of such individuals residing in all 
States. 
(3) FUNDING.—There are appropriated, out of 
any monies in the Treasury not otherwise appro-
priated, $100,000,000 for fiscal year 2026 for pur-
poses of awarding grants under paragraph (1). 
(4) DEFINITION.—In this subsection, the term 
‘‘State’’ means 1 of the 50 States and the District 
of Columbia. 
(e) IMPLEMENTATION FUNDING.—For the purposes 
of carrying out the provisions of, and the amendments 
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382 
made by, this section, there are appropriated, out of any 
monies in the Treasury not otherwise appropriated, to the 
Secretary of Health and Human Services, $50,000,000 for 
fiscal year 2026, to remain available until expended. 
SEC. 44142. MODIFYING COST SHARING REQUIREMENTS 
FOR 
CERTAIN 
EXPANSION 
INDIVIDUALS 
UNDER THE MEDICAID PROGRAM. 
(a) IN GENERAL.—Section 1916 of the Social Secu-
rity Act (42 U.S.C. 1396o) is amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by inserting ‘‘(other than, beginning 
October 1, 2028, specified individuals (as defined in 
subsection (k)(3)))’’ after ‘‘individuals’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(k) SPECIAL RULES FOR CERTAIN EXPANSION IN-
DIVIDUALS.— 
‘‘(1) PREMIUMS.—Beginning October 1, 2028, 
the State plan shall provide that in the case of a 
specified individual (as defined in paragraph (3)) 
who is eligible under the plan, no enrollment fee, 
premium, or similar charge will be imposed under 
the plan. 
‘‘(2) REQUIRED
IMPOSITION
OF
COST
SHAR-
ING.— 
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383 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B) and subsection (j), in the case of a 
specified individual, the State plan shall, begin-
ning October 1, 2028, provide for the imposi-
tion of such deductions, cost sharing, or similar 
charges determined appropriate by the State (in 
an amount greater than $0) with respect to 
medical assistance furnished to such an indi-
vidual. 
‘‘(B) LIMITATIONS.— 
‘‘(i) EXCLUSION
OF
CERTAIN
SERV-
ICES.—In no case may a deduction, cost 
sharing, or similar charge be imposed 
under the State plan with respect to serv-
ices described in any of subparagraphs (B) 
through (J) of subsection (a)(2) furnished 
to a specified individual. 
‘‘(ii) ITEM
AND
SERVICE
LIMITA-
TION.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), in no case 
may a deduction, cost sharing, or 
similar charge imposed under the 
State plan with respect to an item or 
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384 
service furnished to a specified indi-
vidual exceed $35. 
‘‘(II) SPECIAL RULES FOR PRE-
SCRIPTION DRUGS.—In no case may a 
deduction, cost sharing, or similar 
charge imposed under the State plan 
with respect to a prescription drug 
furnished to a specified individual ex-
ceed the limit that would be applicable 
under paragraph (2)(A)(i) or (2)(B) 
of section 1916A(c) with respect to 
such drug and individual if such drug 
so furnished were subject to cost shar-
ing under such section. 
‘‘(iii) MAXIMUM LIMIT ON COST SHAR-
ING.—The total aggregate amount of de-
ductions, cost sharing, or similar charges 
imposed under the State plan for all indi-
viduals in the family may not exceed 5 per-
cent of the family income of the family in-
volved, as applied on a quarterly or month-
ly basis (as specified by the State). 
‘‘(C) CASES OF NONPAYMENT.—Notwith-
standing subsection (e) or any other provision 
of law, a State may permit a provider partici-
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385 
pating under the State plan to require, as a 
condition for the provision of care, items, or 
services to a specified individual entitled to 
medical assistance under this title for such 
care, items, or services, the payment of any de-
ductions, cost sharing, or similar charges au-
thorized to be imposed with respect to such 
care, items, or services. Nothing in this sub-
paragraph shall be construed as preventing a 
provider from reducing or waiving the applica-
tion of such deductions, cost sharing, or similar 
charges on a case-by-case basis. 
‘‘(3) SPECIFIED
INDIVIDUAL
DEFINED.—For 
purposes of this subsection, the term ‘specified indi-
vidual’ means an individual enrolled under section 
1902(a)(10)(A)(i)(VIII) who has a family income (as 
determined in accordance with section 1902(e)(14)) 
that exceeds the poverty line (as defined in section 
2110(c)(5)) applicable to a family of the size in-
volved.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) 
REQUIRED
APPLICATION.—Section 
1902(a)(14) of the Social Security Act (42 U.S.C. 
1396a(a)(14)) is amended by inserting ‘‘and provide 
for imposition of such deductions, cost sharing, or 
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386 
similar charges for medical assistance furnished to 
specified individuals (as defined in paragraph (3) of 
section 1916(k)) in accordance with paragraph (2) 
of such section’’ after ‘‘section 1916’’. 
(2) NONAPPLICABILITY OF ALTERNATIVE COST 
SHARING.—Section 1916A(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1396o–1(a)(1)) is amended, in 
the second sentence, by striking ‘‘or (j)’’ and insert-
ing ‘‘(j), or (k)’’. 
PART 2—AFFORDABLE CARE ACT 
SEC. 44201. ADDRESSING WASTE, FRAUD, AND ABUSE IN 
THE ACA EXCHANGES. 
(a) CHANGES TO ENROLLMENT PERIODS FOR EN-
ROLLING IN EXCHANGES.—Section 1311 of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031) is 
amended— 
(1) in subsection (c)(6)— 
(A) by striking subparagraph (A); 
(B) by striking ‘‘The Secretary’’ and in-
serting the following: 
‘‘(A) IN GENERAL.—The Secretary’’; 
(C) by redesignating subparagraphs (B) 
through (D) as clauses (i) through (iii), respec-
tively, and adjusting the margins accordingly; 
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387 
(D) in clause (i), as so redesignated, by 
striking ‘‘periods, as determined by the Sec-
retary for calendar years after the initial enroll-
ment period;’’ and inserting the following: ‘‘pe-
riods for plans offered in the individual mar-
ket— 
‘‘(I) for enrollment for plan years 
beginning before January 1, 2026, as 
determined by the Secretary; and 
‘‘(II) for enrollment for plan 
years beginning on or after January 
1, 2026, beginning on November 1 
and ending on December 15 of the 
preceding calendar year;’’; 
(E) in clause (ii), as so redesignated, by 
inserting ‘‘subject to subparagraph (B),’’ before 
‘‘special enrollment periods specified’’; and 
(F) by adding at the end the following new 
subparagraph: 
‘‘(B) PROHIBITED SPECIAL ENROLLMENT 
PERIOD.—With respect to plan years beginning 
on or after January 1, 2026, the Secretary may 
not require an Exchange to provide for a spe-
cial enrollment period for an individual on the 
basis of the relationship of the income of such 
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388 
individual to the poverty line, other than a spe-
cial enrollment period based on a change in cir-
cumstances or the occurrence of a specific 
event.’’; and 
(2) in subsection (d), by adding at the end the 
following new paragraphs: 
‘‘(8) PROHIBITED ENROLLMENT PERIODS.—An 
Exchange may not provide for, with respect to en-
rollment for plan years beginning on or after Janu-
ary 1, 2026— 
‘‘(A) an annual open enrollment period 
other than the period described in subpara-
graph (A)(i) of subsection (c)(6); or 
‘‘(B) a special enrollment period described 
in subparagraph (B) of such subsection. 
‘‘(9) VERIFICATION OF ELIGIBILITY FOR SPE-
CIAL ENROLLMENT PERIODS.— 
‘‘(A) IN GENERAL.—With respect to enroll-
ment for plan years beginning on or after Janu-
ary 1, 2026, an Exchange shall verify that each 
individual seeking to enroll in a qualified health 
plan offered by the Exchange during a special 
enrollment period selected under subparagraph 
(B) is eligible to enroll during such special en-
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389 
rollment period prior to enrolling such indi-
vidual in such plan. 
‘‘(B) SELECTED
SPECIAL
ENROLLMENT 
PERIODS.—For purposes of subparagraph (A), 
an Exchange shall select one or more special 
enrollment periods for a plan year with respect 
to which such Exchange shall conduct the 
verification required under subparagraph (A) 
such 
that 
the 
Exchange 
conducts 
such 
verification for not less than 75 percent of all 
individuals enrolling in a qualified health plan 
offered by the Exchange during any special en-
rollment period with respect to such plan 
year.’’. 
(b) VERIFYING INCOME FOR INDIVIDUALS ENROLL-
ING IN A QUALIFIED HEALTH PLAN THROUGH AN EX-
CHANGE.— 
(1) IN
GENERAL.—Section 1411(e)(4) of the 
Patient Protection and Affordable Care Act (42 
U.S.C. 18081(e)(4)) is amended— 
(A) by redesignating subparagraph (C) as 
subparagraph (E); and 
(B) by inserting after subparagraph (B) 
the following new subparagraphs: 
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390 
‘‘(C) REQUIRING
VERIFICATION
OF
IN-
COME AND FAMILY SIZE WHEN TAX DATA IS 
UNAVAILABLE.—For plan years beginning on or 
after January 1, 2026, for purposes of subpara-
graph (A), in the case that the Exchange re-
quests data from the Secretary of the Treasury 
regarding an individual’s household income and 
the Secretary of the Treasury does not return 
such data, such information may not be verified 
solely on the basis of the attestation of such in-
dividual with respect to such household income, 
and the Exchange shall take the actions de-
scribed in subparagraph (A). 
‘‘(D) REQUIRING
VERIFICATION
OF
IN-
COME IN THE CASE OF CERTAIN INCOME DIS-
CREPANCIES.— 
‘‘(i) IN GENERAL.—Subject to clause 
(iii), for plan years beginning on or after 
January 1, 2026, for purposes of subpara-
graph (A), in the case that a specified in-
come discrepancy described in clause (ii) of 
this subparagraph exists with respect to 
the information provided by an applicant 
under subsection (b)(3), the household in-
come of such individual shall be treated as 
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391 
inconsistent 
with 
information 
in 
the 
records maintained by persons under sub-
section (c), or as not verified under sub-
section (d), and the Exchange shall take 
the actions described in such subparagraph 
(A). 
‘‘(ii) SPECIFIED
INCOME
DISCREP-
ANCY.—For purposes of clause (i), a speci-
fied income discrepancy exists with respect 
to the information provided by an appli-
cant under subsection (b)(3) if— 
‘‘(I) the applicant attests to a 
projected annual household income 
that would qualify such applicant to 
be an applicable taxpayer under sec-
tion 36B(c)(1)(A) of the Internal Rev-
enue Code of 1986 with respect to the 
taxable year involved; 
‘‘(II) the Exchange receives data 
from the Secretary of the Treasury or 
the Commissioner of Social Security, 
or other reliable, third party data, 
that indicates that the household in-
come of such applicant is less than 
the household income that would qual-
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392 
ify such applicant to be an applicable 
taxpayer 
under 
such 
section 
36B(c)(1)(A) with respect to the tax-
able year involved; 
‘‘(III) such attested projected an-
nual household income exceeds the in-
come reflected in the data described in 
subclause (II) by a reasonable thresh-
old established by the Exchange and 
approved by the Secretary (which 
shall be not less than 10 percent, and 
may also be a dollar amount); and 
‘‘(IV) the Exchange has not as-
sessed or determined based on the 
data described in subclause (II) that 
the household income of the applicant 
meets the applicable income-based eli-
gibility standard for the Medicaid pro-
gram under title XIX of the Social 
Security Act or the State children’s 
health insurance program under title 
XXI of such Act. 
‘‘(iii) EXCLUSION OF CERTAIN INDI-
VIDUALS
INELIGIBLE
FOR
MEDICAID.— 
This subparagraph shall not apply in the 
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393 
case of an applicant who is an alien law-
fully present in the United States, who is 
not eligible for the Medicaid program 
under title XIX of the Social Security Act 
by reason of such alien status.’’. 
(2) REQUIRING
INDIVIDUALS
ON
WHOSE
BE-
HALF ADVANCE PAYMENTS OF THE PREMIUM TAX 
CREDITS ARE MADE TO FILE AND RECONCILE ON AN 
ANNUAL
BASIS.—Section 1412(b) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 
18082(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) ANNUAL REQUIREMENT TO FILE AND REC-
ONCILE.— 
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after January 1, 2026, in the case 
of an individual with respect to whom any ad-
vance payment of the premium tax credit allow-
able under section 36B of the Internal Revenue 
Code of 1986 was made under this section to 
the issuer of a qualified health plan for the rel-
evant prior tax year, an advance determination 
of eligibility for such premium tax credit may 
not be made under this subsection with respect 
to such individual and such plan year if the Ex-
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394 
change determines, based on information pro-
vided by the Secretary of the Treasury, that 
such individual— 
‘‘(i) has not filed an income tax re-
turn, as required under sections 6011 and 
6012 of such Code (and implementing reg-
ulations), for the relevant prior tax year; 
or 
‘‘(ii) as necessary, has not reconciled 
(in accordance with subsection (f) of such 
section 36B) the advance payment of the 
premium tax credit made with respect to 
such individual for such relevant prior tax 
year. 
‘‘(B) RELEVANT
PRIOR
TAX
YEAR.—For 
purposes of subparagraph (A), the term ‘rel-
evant prior tax year’ means, with respect to the 
advance determination of eligibility made under 
this subsection with respect to an individual, 
the taxable year for which tax return data 
would be used for purposes of verifying the 
household income and family size of such indi-
vidual (as described in section 1411(b)(3)(A)). 
‘‘(C) PRELIMINARY ATTESTATION.—If an 
individual subject to subparagraph (A) attests 
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395 
that such individual has fulfilled the require-
ments to file an income tax return for the rel-
evant prior tax year and, as necessary, to rec-
oncile the advance payment of the premium tax 
credit made with respect to such individual for 
such relevant prior tax year (as described in 
clauses (i) and (ii) of such subparagraph), the 
Secretary may make an initial advance deter-
mination of eligibility with respect to such indi-
vidual and may delay for a reasonable period 
(as determined by the Secretary) any deter-
mination based on information provided by the 
Secretary of the Treasury that such individual 
has not fulfilled such requirements. 
‘‘(D) NOTICE.—If the Secretary deter-
mines that an individual did not meet the re-
quirements described in subparagraph (A) with 
respect to the relevant prior tax year and noti-
fies the Exchange of such determination, the 
Exchange shall comply with the notification re-
quirement described in section 155.305(f)(4)(i) 
of title 45, Code of Federal Regulations (as in 
effect with respect to plan year 2025).’’. 
(3) REMOVING AUTOMATIC EXTENSION OF PE-
RIOD TO RESOLVE INCOME INCONSISTENCIES.—The 
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396 
Secretary of Health and Human Services shall revise 
section 155.315(f) of title 45, Code of Federal Regu-
lations (or any successor regulation), to remove 
paragraph (7) of such section such that, with respect 
to enrollment for plan years beginning on or after 
January 1, 2026, in the case that an Exchange es-
tablished under subtitle D of title I of the Patient 
Protection and Affordable Care Act (42 U.S.C. 
18021 et seq.) provides an individual applying for 
enrollment in a qualified health plan with a 90-day 
period to resolve an inconsistency in the application 
of 
such 
individual 
pursuant 
to 
section 
1411(e)(4)(A)(ii)(II) of such Act, the Exchange may 
not provide for an automatic extension to such 90- 
day period on the basis that such individual is re-
quired to present satisfactory documentary evidence 
to verify household income. 
(c) REVISING RULES ON ALLOWABLE VARIATION IN 
ACTUARIAL VALUE OF HEALTH PLANS.—The Secretary 
of Health and Human Services shall— 
(1) revise section 156.140(c) of title 45, Code 
of Federal Regulations (or a successor regulation), 
to provide that, for plan years beginning on or after 
January 1, 2026, the allowable variation in the actu-
arial value of a health plan applicable under such 
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397 
section shall be the allowable variation for such plan 
applicable under such section for plan year 2022; 
(2) revise section 156.200(b)(3) of title 45, 
Code of Federal Regulations (or a successor regula-
tion), to provide that, for plan years beginning on or 
after January 1, 2026, the requirement for a quali-
fied health plan issuer described in such section is 
that the issuer ensures that each qualified health 
plan complies with benefit design standards, as de-
fined in section 156.20 of such title; and 
(3) revise section 156.400 of title 45, Code of 
Federal Regulations (or a successor regulation), to 
provide that, for plan years beginning on or after 
January 1, 2026, the term ‘‘de minimis variation for 
a silver plan variation’’ means a minus 1 percentage 
point and plus 1 percentage point allowable actuarial 
value variation. 
(d) UPDATING PREMIUM ADJUSTMENT PERCENTAGE 
METHODOLOGY.—Section 1302(c)(4) of the Patient Pro-
tection and Affordable Care Act (42 U.S.C. 18022(c)(4)) 
is amended— 
(1) by striking ‘‘For purposes’’ and inserting: 
‘‘(A) IN GENERAL.—For purposes’’; and 
(2) by adding at the end the following new sub-
paragraph: 
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398 
‘‘(B) UPDATE
TO
METHODOLOGY.—For 
calendar years beginning with 2026, the pre-
mium adjustment percentage under this para-
graph for such calendar year shall be deter-
mined consistent with the methodology pub-
lished in the Federal Register on April 25, 
2019 (84 Fed. Reg. 17537 through 17541).’’. 
(e) ELIMINATING THE FIXED-DOLLAR AND GROSS- 
PERCENTAGE THRESHOLDS APPLICABLE TO EXCHANGE 
ENROLLMENTS.—The Secretary of Health and Human 
Services shall revise section 155.400(g) of title 45, Code 
of Federal Regulations (or a successor regulation) to 
eliminate, for plan years beginning on or after January 
1, 2026, the gross premium percentage-based premium 
payment threshold policy described in paragraph (2) of 
such section and the fixed-dollar premium payment 
threshold policy described in paragraph (3) of such sec-
tion. 
(f) PROHIBITING AUTOMATIC REENROLLMENT FROM 
BRONZE TO SILVER LEVEL QUALIFIED HEALTH PLANS 
OFFERED BY EXCHANGES.—The Secretary of Health and 
Human Services shall revise section 155.335(j) of title 45, 
Code of Federal Regulations (or any successor regulation) 
to remove paragraph (4) of such section such that, with 
respect to reenrollments for plan years beginning on or 
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399 
after January 1, 2026, an Exchange established under 
subtitle D of title I of the Patient Protection and Afford-
able Care Act (42 U.S.C. 18021 et seq.) may not reenroll 
an individual who was enrolled in a bronze level qualified 
health plan in a silver level qualified health plan (as such 
terms are defined in section 1301(a) and described in 
1302(d) of such Act) unless otherwise permitted under 
section 155.335(j) of title 45, Code of Federal Regula-
tions, as in effect on the day before the date of the enact-
ment of this section. 
(g) REDUCING ADVANCE PAYMENTS OF PREMIUM 
TAX CREDITS FOR CERTAIN INDIVIDUALS REENROLLED 
IN EXCHANGES.—Section 1412 of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18082) is amended— 
(1) in subsection (a)(3), by inserting ‘‘, subject 
to subsection (c)(2)(C),’’ after ‘‘qualified health 
plans’’; and 
(2) in subsection (c)(2)— 
(A) in subparagraph (A), by striking 
‘‘The’’ and inserting ‘‘Subject to subparagraph 
(C), the’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(C) REDUCTION
IN
ADVANCE
PAYMENT 
FOR SPECIFIED REENROLLED INDIVIDUALS.— 
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400 
‘‘(i) IN GENERAL.—The amount of an 
advance payment made under subpara-
graph (A) to reduce the premium payable 
for a qualified health plan that provides 
coverage to a specified reenrolled individual 
for an applicable month shall be an 
amount equal to the amount that would 
otherwise be made under such subpara-
graph reduced by $5 (or such higher 
amount as the Secretary determines appro-
priate). 
‘‘(ii) DEFINITIONS.—In this subpara-
graph: 
‘‘(I) APPLICABLE
MONTH.—The 
term ‘applicable month’ means, with 
respect to a specified reenrolled indi-
vidual, any month during a plan year 
beginning on or after January 1, 
2027 (or, in the case of an individual 
reenrolled in a qualified health plan 
by an Exchange established pursuant 
to section 1321(c), January 1, 2026) 
if, prior to the first day of such 
month, such individual has failed to 
confirm or update such information as 
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401 
is necessary to redetermine the eligi-
bility of such individual for such plan 
year pursuant to section 1411(f). 
‘‘(II) SPECIFIED
REENROLLED 
INDIVIDUAL.—The term ‘specified re-
enrolled individual’ means an indi-
vidual who is reenrolled in a qualified 
health plan and with respect to whom 
the advance payment made under sub-
paragraph (A) would, without applica-
tion of any reduction under this sub-
paragraph, reduce the premium pay-
able for a qualified health plan that 
provides coverage to such an indi-
vidual to $0.’’. 
(h) PROHIBITING COVERAGE OF GENDER TRANSI-
TION PROCEDURES AS AN ESSENTIAL HEALTH BENEFIT 
UNDER PLANS OFFERED BY EXCHANGES.— 
(1) IN GENERAL.—Section 1302(b)(2) of the 
Patient Protection and Affordable Care Act (42 
U.S.C. 18022(b)(2)) is amended by adding at the 
end the following new subparagraph: 
‘‘(C) 
GENDER
TRANSITION
PROCE-
DURES.—For plan years beginning on or after 
January 1, 2027, the essential health benefits 
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402 
defined pursuant to paragraph (1) may not in-
clude items and services furnished for a gender 
transition procedure.’’. 
(2) GENDER
TRANSITION
PROCEDURE
DE-
FINED.—Section 1304 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18024) is amended 
by adding at the end the following new subsection: 
‘‘(f) GENDER TRANSITION PROCEDURE.— 
‘‘(1) IN GENERAL.—In this title, except as pro-
vided in paragraph (2), the term ‘gender transition 
procedure’ means, with respect to an individual, any 
of the following when performed for the purpose of 
intentionally changing the body of such individual 
(including by disrupting the body’s development, in-
hibiting its natural functions, or modifying its ap-
pearance) to no longer correspond to the individual’s 
sex: 
‘‘(A) Performing any surgery, including— 
‘‘(i) castration; 
‘‘(ii) sterilization; 
‘‘(iii) orchiectomy; 
‘‘(iv) scrotoplasty; 
‘‘(v) vasectomy; 
‘‘(vi) tubal ligation; 
‘‘(vii) hysterectomy; 
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403 
‘‘(viii) oophorectomy; 
‘‘(ix) ovariectomy; 
‘‘(x) metoidioplasty; 
‘‘(xi) clitoroplasty; 
‘‘(xii) reconstruction of the fixed part 
of 
the 
urethra 
with 
or 
without 
a 
metoidioplasty or a phalloplasty; 
‘‘(xiii) penectomy; 
‘‘(xiv) phalloplasty; 
‘‘(xv) vaginoplasty; 
‘‘(xvi) vaginectomy; 
‘‘(xvii) vulvoplasty; 
‘‘(xviii) reduction thyrochondroplasty; 
‘‘(xix) chondrolaryngoplasty; 
‘‘(xx) mastectomy; and 
‘‘(xxi) any plastic, cosmetic, or aes-
thetic 
surgery 
that 
feminizes 
or 
masculinizes the facial or other body fea-
tures of an individual. 
‘‘(B) Any placement of chest implants to 
create feminine breasts or any placement of 
erection or testicular prosetheses. 
‘‘(C) Any placement of fat or artificial im-
plants in the gluteal region. 
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404 
‘‘(D) Administering, prescribing, or dis-
pensing to an individual medications, includ-
ing— 
‘‘(i) gonadotropin-releasing hormone 
(GnRH) analogues or other puberty-block-
ing drugs to stop or delay normal puberty; 
and 
‘‘(ii) testosterone, estrogen, or other 
androgens to an individual at doses that 
are supraphysiologic than would normally 
be produced endogenously in a healthy in-
dividual of the same age and sex. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to the following: 
‘‘(A) Puberty suppression or blocking pre-
scription drugs for the purpose of normalizing 
puberty for an individual experiencing pre-
cocious puberty. 
‘‘(B) Medically necessary procedures or 
treatments to correct for— 
‘‘(i) a medically verifiable disorder of 
sex development, including— 
‘‘(I) 46,XX chromosomes with 
virilization; 
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405 
‘‘(II) 46,XY chromosomes with 
undervirilization; and 
‘‘(III) both ovarian and testicular 
tissue; 
‘‘(ii) sex chromosome structure, sex 
steroid hormone production, or sex hor-
mone action, if determined to be abnormal 
by a physician through genetic or bio-
chemical testing; 
‘‘(iii) infection, disease, injury, or dis-
order caused or exacerbated by a previous 
procedure described in paragraph (1), or a 
physical disorder, physical injury, or phys-
ical illness that would, as certified by a 
physician, place the individual in imminent 
danger of death or impairment of a major 
bodily function unless the procedure is per-
formed, not including procedures per-
formed for the alleviation of mental dis-
tress; or 
‘‘(iv) procedures to restore or recon-
struct the body of the individual in order 
to correspond to the individual’s sex after 
one or more previous procedures described 
in paragraph (1), which may include the 
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406 
removal of a pseudo phallus or breast aug-
mentation. 
‘‘(3) SEX.—For purposes of this subsection, the 
term ‘sex’ means either male or female, as bio-
logically determined and defined by subparagraph 
(A) and subparagraph (B). 
‘‘(A) FEMALE.—The term ‘female’ means 
an individual who naturally has, had, will have, 
or would have, but for a developmental or ge-
netic anomaly or historical accident, the repro-
ductive system that at some point produces, 
transports, and utilizes eggs for fertilization. 
‘‘(B) MALE.—The term ‘male’ means an 
individual who naturally has, had, will have, or 
would have, but for a developmental or genetic 
anomaly or historical accident, the reproductive 
system that at some point produces, transports, 
and utilizes sperm for fertilization.’’. 
(i) CLARIFYING LAWFUL PRESENCE FOR PURPOSES 
OF THE EXCHANGES.— 
(1) IN GENERAL.—Section 1312(f) of the Pa-
tient Protection and Affordable Care Act (42 U.S.C. 
18032(f)) is amended by adding at the end the fol-
lowing new paragraph: 
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407 
‘‘(4) CLARIFICATION OF LAWFUL PRESENCE.— 
In this title, the term ‘alien lawfully present in the 
United States’ does not include an alien granted de-
ferred action under the Deferred Action for Child-
hood Arrivals process pursuant to the memorandum 
of the Department of Homeland Security entitled 
‘Exercising Prosecutorial Discretion with Respect to 
Individuals Who Came to the United States as Chil-
dren’ issued on June 15, 2012.’’. 
(2) 
COST-SHARING
REDUCTIONS.—Section 
1402(e)(2) of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18071(e)(2)) is amended by 
adding at the end the following new sentence: ‘‘For 
purposes of this section, an individual shall not be 
treated as lawfully present if the individual is an 
alien granted deferred action under the Deferred Ac-
tion for Childhood Arrivals process pursuant to the 
memorandum of the Department of Homeland Secu-
rity entitled ‘Exercising Prosecutorial Discretion 
with Respect to Individuals Who Came to the United 
States as Children’ issued on June 15, 2012.’’. 
(3) PAYMENT PROHIBITION.—Section 1412(d) 
of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18082(d)) is amended by adding at the 
end the following new sentence: ‘‘For purposes of 
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408 
the previous sentence, an individual shall not be 
treated as lawfully present if the individual is an 
alien granted deferred action under the Deferred Ac-
tion for Childhood Arrivals process pursuant to the 
memorandum of the Department of Homeland Secu-
rity entitled ‘Exercising Prosecutorial Discretion 
with Respect to Individuals Who Came to the United 
States as Children’ issued on June 15, 2012.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this section shall apply with respect to plan years 
beginning on or after January 1, 2026. 
(j) ENSURING APPROPRIATE APPLICATION OF GUAR-
ANTEED
ISSUE
REQUIREMENTS
IN
CASE
OF
NON-
PAYMENT OF PAST PREMIUMS.— 
(1) IN GENERAL.—Section 2702 of the Public 
Health Service Act (42 U.S.C. 300gg–1) is amended 
by adding at the end the following new subsection: 
‘‘(e) NONPAYMENT OF PAST PREMIUMS.— 
‘‘(1) IN GENERAL.—A health insurance issuer 
offering individual health insurance coverage may, to 
the extent allowed under State law, deny such cov-
erage in the case of an individual who owes any 
amount for premiums for individual health insurance 
coverage offered by such issuer (or by a health in-
surance issuer in the same controlled group (as de-
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409 
fined in paragraph (3)) as such issuer) in which 
such individual was previously enrolled. 
‘‘(2) ATTRIBUTION OF INITIAL PREMIUM PAY-
MENT
TO
OWED
AMOUNT.—A health insurance 
issuer offering individual health insurance coverage 
may, in the case of an individual described in para-
graph (1) and to the extent allowed under State law, 
attribute the initial premium payment for such cov-
erage applicable to such individual to the amount 
owed by such individual for premiums for individual 
health insurance coverage offered by such issuer (or 
by a health insurance issuer in the same controlled 
group as such issuer) in which such individual was 
previously enrolled. 
‘‘(3) CONTROLLED GROUP DEFINED.—For pur-
poses of this subsection, the term ‘controlled group’ 
means a group of of two or more persons that is 
treated as a single employer under section 52(a), 
52(b), 414(m), or 414(o) of the Internal Revenue 
Code of 1986.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to plan 
years beginning on or after January 1, 2026. 
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410 
PART 3—IMPROVING AMERICANS’ ACCESS TO 
CARE 
SEC. 44301. EXPANDING AND CLARIFYING THE EXCLUSION 
FOR ORPHAN DRUGS UNDER THE DRUG 
PRICE NEGOTIATION PROGRAM. 
(a) IN GENERAL.—Section 1192(e) of the Social Se-
curity Act (42 U.S.C. 1320f–1(e)) is amended— 
(1) in paragraph (1), by adding at the end the 
following new subparagraph: 
‘‘(C) TREATMENT
OF
FORMER
ORPHAN 
DRUGS.—In calculating the amount of time that 
has elapsed with respect to the approval of a 
drug or licensure of a biological product under 
subparagraph (A)(ii) and subparagraph (B)(ii), 
respectively, the Secretary shall not take into 
account any period during which such drug or 
product was a drug described in paragraph 
(3)(A).’’; and 
(2) in paragraph (3)(A)— 
(A) by striking ‘‘only one rare disease or 
condition’’ and inserting ‘‘one or more rare dis-
eases or conditions’’; and 
(B) by striking ‘‘such disease or condition’’ 
and inserting ‘‘one or more rare diseases or 
conditions (as such term is defined in section 
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411 
526(a)(2) of the Federal Food, Drug, and Cos-
metic Act)’’. 
(b) APPLICATION.—The amendments made by sub-
section (a) shall apply with respect to initial price applica-
bility years (as defined in section 1191(b) of the Social 
Security Act (42 U.S.C. 1320f(b))) beginning on or after 
January 1, 2028. 
SEC. 44302. STREAMLINED ENROLLMENT PROCESS FOR EL-
IGIBLE OUT-OF-STATE PROVIDERS UNDER 
MEDICAID AND CHIP. 
(a) IN GENERAL.—Section 1902(kk) of the Social Se-
curity Act (42 U.S.C. 1396a(kk)) is amended by adding 
at the end the following new paragraph: 
‘‘(10) STREAMLINED
ENROLLMENT
PROCESS 
FOR ELIGIBLE OUT-OF-STATE PROVIDERS.— 
‘‘(A) IN GENERAL.—The State— 
‘‘(i) adopts and implements a process 
to allow an eligible out-of-State provider to 
enroll under the State plan (or a waiver of 
such plan) to furnish items and services to, 
or order, prescribe, refer, or certify eligi-
bility for items and services for, qualifying 
individuals without the imposition of 
screening or enrollment requirements by 
such State that exceed the minimum nec-
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412 
essary for such State to provide payment 
to an eligible out-of-State provider under 
such State plan (or a waiver of such plan), 
such as the provider’s name and National 
Provider Identifier (and such other infor-
mation specified by the Secretary); and 
‘‘(ii) provides that an eligible out-of- 
State provider that enrolls as a partici-
pating provider in the State plan (or a 
waiver of such plan) through such process 
shall be so enrolled for a 5-year period, un-
less the provider is terminated or excluded 
from participation during such period. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) ELIGIBLE
OUT-OF-STATE
PRO-
VIDER.—The term ‘eligible out-of-State 
provider’ means, with respect to a State, a 
provider— 
‘‘(I) that is located in any other 
State; 
‘‘(II) that— 
‘‘(aa) was determined by the 
Secretary to have a limited risk 
of fraud, waste, and abuse for 
purposes of determining the level 
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413 
of screening to be conducted 
under section 1866(j)(2), has 
been so screened under such sec-
tion 1866(j)(2), and is enrolled in 
the Medicare program under title 
XVIII; or 
‘‘(bb) was determined by the 
State agency administering or su-
pervising the administration of 
the State plan (or a waiver of 
such plan) of such other State to 
have a limited risk of fraud, 
waste, and abuse for purposes of 
determining the level of screening 
to be conducted under paragraph 
(1) of this subsection, has been 
so screened under such para-
graph (1), and is enrolled under 
such State plan (or a waiver of 
such plan); and 
‘‘(III) that has not been— 
‘‘(aa) excluded from partici-
pation in any Federal health care 
program 
pursuant 
to 
section 
1128 or 1128A; 
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414 
‘‘(bb) excluded from partici-
pation in the State plan (or a 
waiver of such plan) pursuant to 
part 1002 of title 42, Code of 
Federal Regulations (or any suc-
cessor regulation), or State law; 
or 
‘‘(cc) terminated from par-
ticipating in a Federal health 
care program or the State plan 
(or a waiver of such plan) for a 
reason described in paragraph 
(8)(A). 
‘‘(ii) QUALIFYING
INDIVIDUAL.—The 
term ‘qualifying individual’ means an indi-
vidual under 21 years of age who is en-
rolled under the State plan (or waiver of 
such plan). 
‘‘(iii) 
STATE.—The 
term 
‘State’ 
means 1 of the 50 States or the District 
of Columbia.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1902(a)(77) of the Social Security 
Act (42 U.S.C. 1396a(a)(77)) is amended by insert-
ing ‘‘enrollment,’’ after ‘‘screening,’’. 
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415 
(2) 
The 
subsection 
heading 
for 
section 
1902(kk) of such Act (42 U.S.C. 1396a(kk)) is 
amended 
by 
inserting 
‘‘ENROLLMENT,’’ 
after 
‘‘SCREENING,’’. 
(3) Section 2107(e)(1)(G) of such Act (42 
U.S.C. 1397gg(e)(1)(G)) is amended by inserting 
‘‘enrollment,’’ after ‘‘screening,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply beginning on the date that is 4 
years after the date of enactment of this Act. 
SEC. 44303. DELAYING DSH REDUCTIONS. 
(a) IN GENERAL.—Section 1923(f) of the Social Se-
curity Act (42 U.S.C. 1396r–4(f)) is amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i)— 
(i) in the matter preceding subclause 
(I), by striking ‘‘2026 through 2028’’ and 
inserting ‘‘2029 through 2031’’; and 
(ii) in subclause (II), by striking ‘‘or 
period’’; and 
(B) in clause (ii), by striking ‘‘2026 
through 2028’’ and inserting ‘‘2029 through 
2031’’; and 
(2) in paragraph (8), by striking ‘‘2027’’ and 
inserting ‘‘2031’’. 
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416 
(b) 
TENNESSEE
DSH 
ALLOTMENT.—Section 
1923(f)(6)(A)(vi) of the Social Security Act (42 U.S.C. 
1396r–4(f)(6)(A)(vi)) is amended— 
(1) in the header, by striking ‘‘2025’’ and insert-
ing ‘‘2028’’; and 
(2) by striking ‘‘fiscal year 2025’’ and inserting 
‘‘fiscal year 2028’’. 
SEC. 44304. MODIFYING UPDATE TO THE CONVERSION FAC-
TOR UNDER THE PHYSICIAN FEE SCHEDULE 
UNDER THE MEDICARE PROGRAM. 
Section 1848(d) of the Social Security Act (42 U.S.C. 
1395w–4(d)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A)— 
(i) in the first sentence, by striking 
‘‘and ending with 2025’’; and 
(ii) by striking the second sentence; 
and 
(B) in subparagraph (D), by striking ‘‘(or, 
beginning with 2026, applicable conversion fac-
tor)’’; and 
(2) by amending paragraph (20) to read as fol-
lows: 
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417 
‘‘(20) UPDATE
FOR
2026
AND
SUBSEQUENT 
YEARS.—The update to the single conversion factor 
established in paragraph (1)(A)— 
‘‘(A) for 2026 is 75 percent of the Sec-
retary’s estimate of the percentage increase in 
the MEI (as defined in section 1842(i)(3)) for 
the year; and 
‘‘(B) for 2027 and each subsequent year is 
10 percent of the Secretary’s estimate of the 
percentage increase in the MEI for the year.’’. 
SEC. 44305. MODERNIZING AND ENSURING PBM ACCOUNT-
ABILITY. 
(a) IN GENERAL.— 
(1) 
PRESCRIPTION
DRUG
PLANS.—Section 
1860D–12 of the Social Security Act (42 U.S.C. 
1395w–112) is amended by adding at the end the 
following new subsection: 
‘‘(h) REQUIREMENTS RELATING TO PHARMACY BEN-
EFIT MANAGERS.—For plan years beginning on or after 
January 1, 2028: 
‘‘(1) AGREEMENTS WITH PHARMACY BENEFIT 
MANAGERS.—Each contract entered into with a 
PDP sponsor under this part with respect to a pre-
scription drug plan offered by such sponsor shall 
provide that any pharmacy benefit manager acting 
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418 
on behalf of such sponsor has a written agreement 
with the PDP sponsor under which the pharmacy 
benefit manager, and any affiliates of such phar-
macy benefit manager, as applicable, agree to meet 
the following requirements: 
‘‘(A) NO INCOME OTHER THAN BONA FIDE 
SERVICE FEES.— 
‘‘(i) IN
GENERAL.—The pharmacy 
benefit manager and any affiliate of such 
pharmacy benefit manager shall not derive 
any remuneration with respect to any serv-
ices provided on behalf of any entity or in-
dividual, in connection with the utilization 
of covered part D drugs, from any such en-
tity or individual other than bona fide serv-
ice fees, subject to clauses (ii) and (iii). 
‘‘(ii) INCENTIVE PAYMENTS.—For the 
purposes of this subsection, an incentive 
payment (as determined by the Secretary) 
paid by a PDP sponsor to a pharmacy 
benefit manager (or an affiliate of such 
pharmacy benefit manager) that is per-
forming services on behalf of such sponsor 
shall be deemed a ‘bona fide service fee’ 
(even if such payment does not otherwise 
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419 
meet the definition of such term under 
paragraph (7)(B)) if such payment is a 
flat dollar amount, is consistent with fair 
market value (as specified by the Sec-
retary), is related to services actually per-
formed by the pharmacy benefit manager 
or affiliate of such pharmacy benefit man-
ager, on behalf of the PDP sponsor mak-
ing such payment, in connection with the 
utilization of covered part D drugs, and 
meets additional requirements, if any, as 
determined appropriate by the Secretary. 
‘‘(iii) CLARIFICATION
ON
REBATES 
AND DISCOUNTS USED TO LOWER COSTS 
FOR COVERED PART D DRUGS.—Rebates, 
discounts, and other price concessions re-
ceived by a pharmacy benefit manager or 
an affiliate of a pharmacy benefit manager 
from manufacturers, even if such price 
concessions are calculated as a percentage 
of a drug’s price, shall not be considered a 
violation of the requirements of clause (i) 
if they are fully passed through to a PDP 
sponsor and are compliant with all regu-
latory and subregulatory requirements re-
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420 
lated to direct and indirect remuneration 
for manufacturer rebates under this part, 
including in cases where a PDP sponsor is 
acting as a pharmacy benefit manager on 
behalf of a prescription drug plan offered 
by such PDP sponsor. 
‘‘(iv) EVALUATION OF REMUNERATION 
ARRANGEMENTS.—Components of subsets 
of remuneration arrangements (such as 
fees or other forms of compensation paid 
to or retained by the pharmacy benefit 
manager or affiliate of such pharmacy ben-
efit manager), as determined appropriate 
by the Secretary, between pharmacy ben-
efit managers or affiliates of such phar-
macy benefit managers, as applicable, and 
other entities involved in the dispensing or 
utilization of covered part D drugs (includ-
ing PDP sponsors, manufacturers, phar-
macies, and other entities as determined 
appropriate by the Secretary) shall be sub-
ject to review by the Secretary, in con-
sultation with the Office of the Inspector 
General of the Department of Health and 
Human Services, as determined appro-
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421 
priate by the Secretary. The Secretary, in 
consultation with the Office of the Inspec-
tor General, shall review whether remu-
neration under such arrangements is con-
sistent with fair market value (as specified 
by the Secretary) through reviews and as-
sessments of such remuneration, as deter-
mined appropriate. 
‘‘(v) DISGORGEMENT.—The pharmacy 
benefit manager shall disgorge any remu-
neration paid to such pharmacy benefit 
manager or an affiliate of such pharmacy 
benefit manager in violation of this sub-
paragraph to the PDP sponsor. 
‘‘(vi) ADDITIONAL REQUIREMENTS.— 
The pharmacy benefit manager shall— 
‘‘(I) enter into a written agree-
ment with any affiliate of such phar-
macy benefit manager, under which 
the affiliate shall identify and disgorge 
any remuneration described in clause 
(v) to the pharmacy benefit manager; 
and 
‘‘(II) attest, subject to any re-
quirements determined appropriate by 
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422 
the Secretary, that the pharmacy ben-
efit manager has entered into a writ-
ten agreement described in subclause 
(I) with any relevant affiliate of the 
pharmacy benefit manager. 
‘‘(B) TRANSPARENCY REGARDING GUARAN-
TEES
AND
COST
PERFORMANCE
EVALUA-
TIONS.—The pharmacy benefit manager shall— 
‘‘(i) define, interpret, and apply, in a 
fully transparent and consistent manner 
for purposes of calculating or otherwise 
evaluating pharmacy benefit manager per-
formance against pricing guarantees or 
similar cost performance measurements re-
lated to rebates, discounts, price conces-
sions, or net costs, terms such as— 
‘‘(I) ‘generic drug’, in a manner 
consistent with the definition of the 
term under section 423.4 of title 42, 
Code of Federal Regulations, or a suc-
cessor regulation; 
‘‘(II) ‘brand name drug’, in a 
manner consistent with the definition 
of the term under section 423.4 of 
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423 
title 42, Code of Federal Regulations, 
or a successor regulation; 
‘‘(III) ‘specialty drug’; 
‘‘(IV) ‘rebate’; and 
‘‘(V) ‘discount’; 
‘‘(ii) identify any drugs, claims, or 
price concessions excluded from any pric-
ing guarantee or other cost performance 
measure in a clear and consistent manner; 
and 
‘‘(iii) where a pricing guarantee or 
other cost performance measure is based 
on a pricing benchmark other than the 
wholesale acquisition cost (as defined in 
section 1847A(c)(6)(B)) of a drug, cal-
culate and provide a wholesale acquisition 
cost-based equivalent to the pricing guar-
antee or other cost performance measure. 
‘‘(C) PROVISION OF INFORMATION.— 
‘‘(i) IN
GENERAL.—Not later than 
July 1 of each year, beginning in 2028, the 
pharmacy benefit manager shall submit to 
the PDP sponsor, and to the Secretary, a 
report, in accordance with this subpara-
graph, and shall make such report avail-
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424 
able to such sponsor at no cost to such 
sponsor in a format specified by the Sec-
retary under paragraph (5). Each such re-
port shall include, with respect to such 
PDP sponsor and each plan offered by 
such sponsor, the following information 
with respect to the previous plan year: 
‘‘(I) A list of all drugs covered by 
the plan that were dispensed includ-
ing, with respect to each such drug— 
‘‘(aa) the brand name, ge-
neric or non-proprietary name, 
and National Drug Code; 
‘‘(bb) the number of plan 
enrollees for whom the drug was 
dispensed, the total number of 
prescription claims for the drug 
(including original prescriptions 
and refills, counted as separate 
claims), and the total number of 
dosage units of the drug dis-
pensed; 
‘‘(cc) the number of pre-
scription claims described in item 
(bb) by each type of dispensing 
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channel through which the drug 
was dispensed, including retail, 
mail order, specialty pharmacy, 
long term care pharmacy, home 
infusion pharmacy, or other types 
of pharmacies or providers; 
‘‘(dd) the average wholesale 
acquisition cost, listed as cost per 
day’s supply, cost per dosage 
unit, and cost per typical course 
of treatment (as applicable); 
‘‘(ee) the average wholesale 
price for the drug, listed as price 
per day’s supply, price per dos-
age unit, and price per typical 
course of treatment (as applica-
ble); 
‘‘(ff) the total out-of-pocket 
spending by plan enrollees on 
such drug after application of 
any benefits under the plan, in-
cluding plan enrollee spending 
through copayments, coinsurance, 
and deductibles; 
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‘‘(gg) total rebates paid by 
the manufacturer on the drug as 
reported under the Detailed DIR 
Report (or any successor report) 
submitted by such sponsor to the 
Centers for Medicare & Medicaid 
Services; 
‘‘(hh) all other direct or in-
direct remuneration on the drug 
as reported under the Detailed 
DIR Report (or any successor re-
port) submitted by such sponsor 
to the Centers for Medicare & 
Medicaid Services; 
‘‘(ii) the average pharmacy 
reimbursement amount paid by 
the plan for the drug in the ag-
gregate and disaggregated by dis-
pensing channel identified in item 
(cc); 
‘‘(jj) the average National 
Average Drug Acquisition Cost 
(NADAC); and 
‘‘(kk) total manufacturer-de-
rived revenue, inclusive of bona 
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fide service fees, attributable to 
the drug and retained by the 
pharmacy benefit manager and 
any affiliate of such pharmacy 
benefit manager. 
‘‘(II) In the case of a pharmacy 
benefit manager that has an affiliate 
that is a retail, mail order, or spe-
cialty pharmacy, with respect to drugs 
covered by such plan that were dis-
pensed, the following information: 
‘‘(aa) The percentage of 
total prescriptions that were dis-
pensed by pharmacies that are an 
affiliate of the pharmacy benefit 
manager for each drug. 
‘‘(bb) 
The 
interquartile 
range of the total combined costs 
paid by the plan and plan enroll-
ees, per dosage unit, per course 
of treatment, per 30-day supply, 
and per 90-day supply for each 
drug dispensed by pharmacies 
that are not an affiliate of the 
pharmacy benefit manager and 
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that are included in the phar-
macy network of such plan. 
‘‘(cc) 
The 
interquartile 
range of the total combined costs 
paid by the plan and plan enroll-
ees, per dosage unit, per course 
of treatment, per 30-day supply, 
and per 90-day supply for each 
drug dispensed by pharmacies 
that are an affiliate of the phar-
macy benefit manager and that 
are included in the pharmacy 
network of such plan. 
‘‘(dd) The lowest total com-
bined cost paid by the plan and 
plan enrollees, per dosage unit, 
per course of treatment, per 30- 
day supply, and per 90-day sup-
ply, for each drug that is avail-
able from any pharmacy included 
in the pharmacy network of such 
plan. 
‘‘(ee) The difference between 
the average acquisition cost of 
the affiliate, such as a pharmacy 
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or other entity that acquires pre-
scription drugs, that initially ac-
quires the drug and the amount 
reported under subclause (I)(jj) 
for each drug. 
‘‘(ff) A list inclusive of the 
brand name, generic or non-pro-
prietary 
name, 
and 
National 
Drug Code of covered part D 
drugs subject to an agreement 
with a covered entity under sec-
tion 340B of the Public Health 
Service Act for which the phar-
macy benefit manager or an affil-
iate of the pharmacy benefit 
manager had a contract or other 
arrangement with such a covered 
entity in the service area of such 
plan. 
‘‘(III) Where a drug approved 
under section 505(c) of the Federal 
Food, Drug, and Cosmetic Act (re-
ferred to in this subclause as the ‘list-
ed drug’) is covered by the plan, the 
following information: 
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‘‘(aa) A list of currently 
marketed generic drugs approved 
under section 505(j) of the Fed-
eral Food, Drug, and Cosmetic 
Act pursuant to an application 
that references such listed drug 
that are not covered by the plan, 
are covered on the same for-
mulary tier or a formulary tier 
typically associated with higher 
cost-sharing than the listed drug, 
or are subject to utilization man-
agement that the listed drug is 
not subject to. 
‘‘(bb) The estimated average 
beneficiary 
cost-sharing 
under 
the plan for a 30-day supply of 
the listed drug. 
‘‘(cc) Where a generic drug 
listed under item (aa) is on a for-
mulary tier typically associated 
with higher cost-sharing than the 
listed drug, the estimated aver-
age cost-sharing that a bene-
ficiary would have paid for a 30- 
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day supply of each of the generic 
drugs described in item (aa), had 
the plan provided coverage for 
such drugs on the same for-
mulary tier as the listed drug. 
‘‘(dd) A written justification 
for providing more favorable cov-
erage of the listed drug than the 
generic drugs described in item 
(aa). 
‘‘(ee) The number of cur-
rently marketed generic drugs 
approved under section 505(j) of 
the Federal Food, Drug, and 
Cosmetic Act pursuant to an ap-
plication that references such 
listed drug. 
‘‘(IV) Where a reference product 
(as defined in section 351(i) of the 
Public Health Service Act) is covered 
by the plan, the following information: 
‘‘(aa) A list of currently 
marketed 
biosimilar 
biological 
products licensed under section 
351(k) of the Public Health 
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Service Act pursuant to an appli-
cation that refers to such ref-
erence product that are not cov-
ered by the plan, are covered on 
the same formulary tier or a for-
mulary tier typically associated 
with higher cost-sharing than the 
reference product, or are subject 
to utilization management that 
the reference product is not sub-
ject to. 
‘‘(bb) The estimated average 
beneficiary 
cost-sharing 
under 
the plan for a 30-day supply of 
the reference product. 
‘‘(cc) Where a biosimilar bi-
ological product listed under item 
(aa) is on a formulary tier typi-
cally associated with higher cost- 
sharing than the reference prod-
uct, the estimated average cost- 
sharing that a beneficiary would 
have paid for a 30-day supply of 
each of the biosimilar biological 
products described in item (aa), 
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had the plan provided coverage 
for such products on the same 
formulary tier as the reference 
product. 
‘‘(dd) A written justification 
for providing more favorable cov-
erage of the reference product 
than the biosimilar biological 
product described in item (aa). 
‘‘(ee) The number of cur-
rently marketed biosimilar bio-
logical products licensed under 
section 351(k) of the Public 
Health Service Act, pursuant to 
an application that refers to such 
reference product. 
‘‘(V) Total gross spending on 
covered part D drugs by the plan, not 
net of rebates, fees, discounts, or 
other direct or indirect remuneration. 
‘‘(VI) The total amount retained 
by the pharmacy benefit manager or 
an affiliate of such pharmacy benefit 
manager in revenue related to utiliza-
tion of covered part D drugs under 
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that plan, inclusive of bona fide serv-
ice fees. 
‘‘(VII) The total spending on cov-
ered part D drugs net of rebates, fees, 
discounts, or other direct and indirect 
remuneration by the plan. 
‘‘(VIII) An explanation of any 
benefit design parameters under such 
plan that encourage plan enrollees to 
fill prescriptions at pharmacies that 
are an affiliate of such pharmacy ben-
efit manager, such as mail and spe-
cialty home delivery programs, and re-
tail and mail auto-refill programs. 
‘‘(IX) The following information: 
‘‘(aa) A list of all brokers, 
consultants, advisors, and audi-
tors that receive compensation 
from the pharmacy benefit man-
ager or an affiliate of such phar-
macy benefit manager for refer-
rals, 
consulting, 
auditing, 
or 
other services offered to PDP 
sponsors related to pharmacy 
benefit management services. 
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435 
‘‘(bb) The amount of com-
pensation provided by such phar-
macy benefit manager or affiliate 
to each such broker, consultant, 
advisor, and auditor. 
‘‘(cc) The methodology for 
calculating the amount of com-
pensation provided by such phar-
macy benefit manager or affil-
iate, for each such broker, con-
sultant, advisor, and auditor. 
‘‘(X) A list of all affiliates of the 
pharmacy benefit manager. 
‘‘(XI) A summary document sub-
mitted in a standardized template de-
veloped by the Secretary that includes 
such information described in sub-
clauses (I) through (X). 
‘‘(ii) WRITTEN EXPLANATION OF CON-
TRACTS
OR
AGREEMENTS
WITH
DRUG 
MANUFACTURERS.— 
‘‘(I) IN
GENERAL.—The phar-
macy benefit manager shall, not later 
than 30 days after the finalization of 
any contract or agreement between 
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such pharmacy benefit manager or an 
affiliate of such pharmacy benefit 
manager and a drug manufacturer (or 
subsidiary, agent, or entity affiliated 
with such drug manufacturer) that 
makes rebates, discounts, payments, 
or other financial incentives related to 
one or more covered part D drugs or 
other prescription drugs, as applica-
ble, of the manufacturer directly or 
indirectly contingent upon coverage, 
formulary placement, or utilization 
management conditions on any other 
covered part D drugs or other pre-
scription drugs, as applicable, submit 
to the PDP sponsor a written expla-
nation of such contract or agreement. 
‘‘(II) REQUIREMENTS.—A writ-
ten explanation under subclause (I) 
shall— 
‘‘(aa) include the manufac-
turer subject to the contract or 
agreement, all covered part D 
drugs 
and 
other 
prescription 
drugs, as applicable, subject to 
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the contract or agreement and 
the manufacturers of such drugs, 
and a high-level description of 
the terms of such contract or 
agreement and how such terms 
apply to such drugs; and 
‘‘(bb) be certified by the 
Chief Executive Officer, Chief Fi-
nancial Officer, or General Coun-
sel of such pharmacy benefit 
manager, or affiliate of such 
pharmacy benefit manager, as 
applicable, or an individual dele-
gated with the authority to sign 
on behalf of one of these officers, 
who reports directly to the offi-
cer. 
‘‘(III) DEFINITION
OF
OTHER 
PRESCRIPTION DRUGS.—For purposes 
of this clause, the term ‘other pre-
scription drugs’ means prescription 
drugs covered as supplemental bene-
fits under this part or prescription 
drugs paid outside of this part. 
‘‘(D) AUDIT RIGHTS.— 
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‘‘(i) IN GENERAL.—Not less than once 
a year, at the request of the PDP sponsor, 
the pharmacy benefit manager shall allow 
for an audit of the pharmacy benefit man-
ager to ensure compliance with all terms 
and conditions under the written agree-
ment described in this paragraph and the 
accuracy of information reported under 
subparagraph (C). 
‘‘(ii) AUDITOR.—The PDP sponsor 
shall have the right to select an auditor. 
The pharmacy benefit manager shall not 
impose any limitations on the selection of 
such auditor. 
‘‘(iii) PROVISION OF INFORMATION.— 
The pharmacy benefit manager shall make 
available to such auditor all records, data, 
contracts, and other information necessary 
to confirm the accuracy of information 
provided under subparagraph (C), subject 
to reasonable restrictions on how such in-
formation must be reported to prevent re-
disclosure of such information. 
‘‘(iv) TIMING.—The pharmacy benefit 
manager must provide information under 
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clause (iii) and other information, data, 
and records relevant to the audit to such 
auditor within 6 months of the initiation of 
the audit and respond to requests for addi-
tional information from such auditor with-
in 30 days after the request for additional 
information. 
‘‘(v) INFORMATION
FROM
AFFILI-
ATES.—The pharmacy benefit manager 
shall be responsible for providing to such 
auditor information required to be reported 
under subparagraph (C) or under clause 
(iii) of this subparagraph that is owned or 
held by an affiliate of such pharmacy ben-
efit manager. 
‘‘(2) ENFORCEMENT.— 
‘‘(A) IN
GENERAL.—Each PDP sponsor 
shall— 
‘‘(i) disgorge to the Secretary any 
amounts disgorged to the PDP sponsor by 
a pharmacy benefit manager under para-
graph (1)(A)(v); 
‘‘(ii) require, in a written agreement 
with any pharmacy benefit manager acting 
on behalf of such sponsor or affiliate of 
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such pharmacy benefit manager, that such 
pharmacy benefit manager or affiliate re-
imburse the PDP sponsor for any civil 
money penalty imposed on the PDP spon-
sor as a result of the failure of the phar-
macy benefit manager or affiliate to meet 
the requirements of paragraph (1) that are 
applicable to the pharmacy benefit man-
ager or affiliate under the agreement; and 
‘‘(iii) require, in a written agreement 
with any such pharmacy benefit manager 
acting on behalf of such sponsor or affil-
iate of such pharmacy benefit manager, 
that such pharmacy benefit manager or af-
filiate be subject to punitive remedies for 
breach of contract for failure to comply 
with the requirements applicable under 
paragraph (1). 
‘‘(B) REPORTING
OF
ALLEGED
VIOLA-
TIONS.—The Secretary shall make available and 
maintain a mechanism for manufacturers, PDP 
sponsors, pharmacies, and other entities that 
have contractual relationships with pharmacy 
benefit managers or affiliates of such pharmacy 
benefit managers to report, on a confidential 
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441 
basis, alleged violations of paragraph (1)(A) or 
subparagraph (C). 
‘‘(C) ANTI-RETALIATION AND ANTI-COER-
CION.—Consistent with applicable Federal or 
State law, a PDP sponsor shall not— 
‘‘(i) retaliate against an individual or 
entity for reporting an alleged violation 
under subparagraph (B); or 
‘‘(ii) coerce, intimidate, threaten, or 
interfere with the ability of an individual 
or entity to report any such alleged viola-
tions. 
‘‘(3) CERTIFICATION OF COMPLIANCE.— 
‘‘(A) IN
GENERAL.—Each PDP sponsor 
shall furnish to the Secretary (at a time and in 
a manner specified by the Secretary) an annual 
certification of compliance with this subsection, 
as well as such information as the Secretary de-
termines necessary to carry out this subsection. 
‘‘(B) IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary may 
implement this paragraph by program instruc-
tion or otherwise. 
‘‘(4) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as— 
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442 
‘‘(A) prohibiting flat dispensing fees or re-
imbursement or payment for ingredient costs 
(including customary, industry-standard dis-
counts directly related to drug acquisition that 
are retained by pharmacies or wholesalers) to 
entities that acquire or dispense prescription 
drugs; or 
‘‘(B) modifying regulatory requirements or 
sub-regulatory program instruction or guidance 
related to pharmacy payment, reimbursement, 
or dispensing fees. 
‘‘(5) STANDARD FORMATS.— 
‘‘(A) IN GENERAL.—Not later than June 
1, 2027, the Secretary shall specify standard, 
machine-readable formats for pharmacy benefit 
managers to submit annual reports required 
under paragraph (1)(C)(i). 
‘‘(B) IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary may 
implement this paragraph by program instruc-
tion or otherwise. 
‘‘(6) CONFIDENTIALITY.— 
‘‘(A) IN GENERAL.—Information disclosed 
by a pharmacy benefit manager, an affiliate of 
a pharmacy benefit manager, a PDP sponsor, 
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or a pharmacy under this subsection that is not 
otherwise publicly available or available for pur-
chase shall not be disclosed by the Secretary or 
a PDP sponsor receiving the information, ex-
cept that the Secretary may disclose the infor-
mation for the following purposes: 
‘‘(i) As the Secretary determines nec-
essary to carry out this part. 
‘‘(ii) To permit the Comptroller Gen-
eral to review the information provided. 
‘‘(iii) To permit the Director of the 
Congressional Budget Office to review the 
information provided. 
‘‘(iv) To permit the Executive Direc-
tor of the Medicare Payment Advisory 
Commission to review the information pro-
vided. 
‘‘(v) To the Attorney General for the 
purposes of conducting oversight and en-
forcement under this title. 
‘‘(vi) To the Inspector General of the 
Department of Health and Human Serv-
ices in accordance with its authorities 
under the Inspector General Act of 1978 
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444 
(section 406 of title 5, United States 
Code), and other applicable statutes. 
‘‘(B) RESTRICTION ON USE OF INFORMA-
TION.—The Secretary, the Comptroller General, 
the Director of the Congressional Budget Of-
fice, and the Executive Director of the Medicare 
Payment Advisory Commission shall not report 
on or disclose information disclosed pursuant to 
subparagraph (A) to the public in a manner 
that would identify— 
‘‘(i) a specific pharmacy benefit man-
ager, affiliate, pharmacy, manufacturer, 
wholesaler, PDP sponsor, or plan; or 
‘‘(ii) contract prices, rebates, dis-
counts, or other remuneration for specific 
drugs in a manner that may allow the 
identification of specific contracting parties 
or of such specific drugs. 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) AFFILIATE.—The term ‘affiliate’ 
means, with respect to any pharmacy benefit 
manager or PDP sponsor, any entity that, di-
rectly or indirectly— 
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445 
‘‘(i) owns or is owned by, controls or 
is controlled by, or is otherwise related in 
any ownership structure to such pharmacy 
benefit manager or PDP sponsor; or 
‘‘(ii) acts as a contractor, principal, or 
agent to such pharmacy benefit manager 
or PDP sponsor, insofar as such con-
tractor, principal, or agent performs any of 
the functions described under subpara-
graph (C). 
‘‘(B) BONA FIDE SERVICE FEE.—The term 
‘bona fide service fee’ means a fee that is reflec-
tive of the fair market value (as specified by the 
Secretary, through notice and comment rule-
making) for a bona fide, itemized service actu-
ally performed on behalf of an entity, that the 
entity would otherwise perform (or contract for) 
in the absence of the service arrangement and 
that is not passed on in whole or in part to a 
client or customer, whether or not the entity 
takes title to the drug. Such fee must be a flat 
dollar amount and shall not be directly or indi-
rectly based on, or contingent upon— 
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446 
‘‘(i) drug price, such as wholesale ac-
quisition cost or drug benchmark price 
(such as average wholesale price); 
‘‘(ii) the amount of discounts, rebates, 
fees, or other direct or indirect remunera-
tion with respect to covered part D drugs 
dispensed to enrollees in a prescription 
drug plan, except as permitted pursuant to 
paragraph (1)(A)(ii); 
‘‘(iii) coverage or formulary placement 
decisions or the volume or value of any re-
ferrals or business generated between the 
parties to the arrangement; or 
‘‘(iv) any other amounts or meth-
odologies prohibited by the Secretary. 
‘‘(C) PHARMACY BENEFIT MANAGER.—The 
term ‘pharmacy benefit manager’ means any 
person or entity that, either directly or through 
an intermediary, acts as a price negotiator or 
group purchaser on behalf of a PDP sponsor or 
prescription drug plan, or manages the pre-
scription drug benefits provided by such spon-
sor or plan, including the processing and pay-
ment of claims for prescription drugs, the per-
formance of drug utilization review, the proc-
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447 
essing of drug prior authorization requests, the 
adjudication of appeals or grievances related to 
the prescription drug benefit, contracting with 
network pharmacies, controlling the cost of cov-
ered part D drugs, or the provision of related 
services. Such term includes any person or enti-
ty that carries out one or more of the activities 
described in the preceding sentence, irrespective 
of whether such person or entity calls itself a 
‘pharmacy benefit manager’.’’. 
(2) MA–PD PLANS.—Section 1857(f)(3) of the 
Social Security Act (42 U.S.C. 1395w–27(f)(3)) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(F) REQUIREMENTS RELATING TO PHAR-
MACY BENEFIT MANAGERS.—For plan years be-
ginning on or after January 1, 2028, section 
1860D–12(h).’’. 
(3) NONAPPLICATION OF PAPERWORK REDUC-
TION ACT.—Chapter 35 of title 44, United States 
Code, shall not apply to the implementation of this 
subsection. 
(4) FUNDING.— 
(A) SECRETARY.—In addition to amounts 
otherwise available, there is appropriated to the 
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Centers for Medicare & Medicaid Services Pro-
gram Management Account, out of any money 
in the Treasury not otherwise appropriated, 
$113,000,000 for fiscal year 2025, to remain 
available until expended, to carry out this sub-
section. 
(B) OIG.—In addition to amounts other-
wise available, there is appropriated to the In-
spector General of the Department of Health 
and Human Services, out of any money in the 
Treasury 
not 
otherwise 
appropriated, 
$20,000,000 for fiscal year 2025, to remain 
available until expended, to carry out this sub-
section. 
(b) GAO STUDY AND REPORT ON PRICE-RELATED 
COMPENSATION ACROSS THE SUPPLY CHAIN.— 
(1) STUDY.—The Comptroller General of the 
United States (in this subsection referred to as the 
‘‘Comptroller General’’) shall conduct a study de-
scribing the use of compensation and payment struc-
tures related to a prescription drug’s price within 
the retail prescription drug supply chain in part D 
of title XVIII of the Social Security Act (42 U.S.C. 
1395w–101 et seq.). Such study shall summarize in-
formation from Federal agencies and industry ex-
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perts, to the extent available, with respect to the fol-
lowing: 
(A) The type, magnitude, other features 
(such as the pricing benchmarks used), and 
prevalence of compensation and payment struc-
tures related to a prescription drug’s price, 
such as calculating fee amounts as a percentage 
of a prescription drug’s price, between inter-
mediaries in the prescription drug supply chain, 
including— 
(i) pharmacy benefit managers; 
(ii) PDP sponsors offering prescrip-
tion drug plans and Medicare Advantage 
organizations offering MA–PD plans; 
(iii) drug wholesalers; 
(iv) pharmacies; 
(v) manufacturers; 
(vi) pharmacy services administrative 
organizations; 
(vii) brokers, auditors, consultants, 
and other entities that— 
(I) advise PDP sponsors offering 
prescription drug plans and Medicare 
Advantage organizations offering MA– 
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PD plans regarding pharmacy bene-
fits; or 
(II) review PDP sponsor and 
Medicare Advantage organization con-
tracts with pharmacy benefit man-
agers; and 
(viii) other service providers that con-
tract with any of the entities described in 
clauses (i) through (vii) that may use 
price-related compensation and payment 
structures, such as rebate aggregators (or 
other entities that negotiate or process 
price concessions on behalf of pharmacy 
benefit managers, plan sponsors, or phar-
macies). 
(B) The primary business models and com-
pensation structures for each category of inter-
mediary described in subparagraph (A). 
(C) Variation in price-related compensation 
structures between affiliated entities (such as 
entities with common ownership, either full or 
partial, and subsidiary relationships) and unaf-
filiated entities. 
(D) Potential conflicts of interest among 
contracting entities related to the use of pre-
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scription drug price-related compensation struc-
tures, such as the potential for fees or other 
payments set as a percentage of a prescription 
drug’s price to advantage formulary selection, 
distribution, or purchasing of prescription drugs 
with higher prices. 
(E) Notable differences, if any, in the use 
and level of price-based compensation struc-
tures over time and between different market 
segments, such as under part D of title XVIII 
of the Social Security Act (42 U.S.C. 1395w– 
101 et seq.) and the Medicaid program under 
title XIX of such Act (42 U.S.C. 1396 et seq.). 
(F) The effects of drug price-related com-
pensation structures and alternative compensa-
tion structures on Federal health care programs 
and program beneficiaries, including with re-
spect to cost-sharing, premiums, Federal out-
lays, biosimilar and generic drug adoption and 
utilization, drug shortage risks, and the poten-
tial for fees set as a percentage of a drug’s 
price to advantage the formulary selection, dis-
tribution, or purchasing of drugs with higher 
prices. 
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(G) Other issues determined to be relevant 
and appropriate by the Comptroller General. 
(2) REPORT.—Not later than 2 years after the 
date of enactment of this section, the Comptroller 
General shall submit to Congress a report containing 
the results of the study conducted under paragraph 
(1), together with recommendations for such legisla-
tion and administrative action as the Comptroller 
General determines appropriate. 
(c) MEDPAC REPORTS
ON AGREEMENTS WITH 
PHARMACY BENEFIT MANAGERS WITH RESPECT TO PRE-
SCRIPTION DRUG PLANS AND MA-PD PLANS.— 
(1) IN GENERAL.—The Medicare Payment Ad-
visory Commission shall submit to Congress the fol-
lowing reports: 
(A) INITIAL REPORT.—Not later than the 
first March 15 occurring after the date that is 
2 years after the date on which the Secretary 
makes the data available to the Commission, a 
report regarding agreements with pharmacy 
benefit managers with respect to prescription 
drug plans and MA–PD plans. Such report 
shall include, to the extent practicable— 
(i) a description of trends and pat-
terns, including relevant averages, totals, 
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453 
and other figures for the types of informa-
tion submitted; 
(ii) an analysis of any differences in 
agreements and their effects on plan en-
rollee out-of-pocket spending and average 
pharmacy reimbursement, and other im-
pacts; and 
(iii) any recommendations the Com-
mission determines appropriate. 
(B) FINAL
REPORT.—Not later than 2 
years after the date on which the Commission 
submits the initial report under subparagraph 
(A), a report describing any changes with re-
spect to the information described in subpara-
graph (A) over time, together with any rec-
ommendations the Commission determines ap-
propriate. 
(2) FUNDING.—In addition to amounts other-
wise available, there is appropriated to the Medicare 
Payment Advisory Commission, out of any money in 
the 
Treasury 
not 
otherwise 
appropriated, 
$1,000,000 for fiscal year 2026, to remain available 
until expended, to carry out this subsection. 
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454 
TITLE V—COMMITTEE ON 
FINANCIAL SERVICES 
SEC. 50001. GREEN AND RESILIENT RETROFIT PROGRAM 
FOR MULTIFAMILY FAMILY HOUSING. 
The unobligated balance of amounts made available 
under section 30002(a) of Public Law 117-169 (commonly 
referred to as the ‘‘Inflation Reduction Act’’; 136 Stat. 
2027) are rescinded. 
SEC. 50002. PUBLIC COMPANY ACCOUNTING OVERSIGHT 
BOARD. 
(a) During the period beginning on the date of enact-
ment of this Act and ending on the transfer date— 
(1) all intellectual property retained by the 
Public 
Company 
Accounting 
Oversight 
Board 
(‘‘Board’’) in support of its programs for registra-
tion, standard-setting, and inspection shall be shared 
with the Securities and Exchange Commission 
(‘‘Commission’’); and 
(2) pending enforcement and disciplinary ac-
tions of the Board shall be referred to the Commis-
sion or other regulators in accordance with section 
105 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215). 
(b) Effective on the transfer date— 
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(1) all unobligated fees collected under section 
109(d) of the Sarbanes-Oxley Act of 2002 shall be 
transferred to the general fund of the Treasury, and 
the Commission may not collect fees under such sec-
tion 109(d); 
(2) the duties and powers of the Board in effect 
as of the day before the transfer date, other than 
those described in section 107 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7217), shall be transferred 
to the Commission; 
(3) the Commission may not use funds to carry 
out section 107 of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7217) for activities related to overseeing 
the Board; 
(4) the Board shall transfer all intellectual 
property described in subsection (a)(1) to the Com-
mission; 
(5) existing processes and regulations of the 
Board, including existing Board auditing standards, 
shall continue in effect unless modified through rule 
making by the Commission; and 
(6) any reference to the Board in any law, reg-
ulation, document, record, map, or other paper of 
the United States shall be deemed a reference to the 
Commission. 
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456 
(c) Any employee of the Board as of the date of en-
actment of this Act may— 
(1) be offered equivalent positions on the Com-
mission staff, as determined by the Commission, and 
submit to the Commission’s standard employment 
policies; and 
(2) receive pay that is not higher than the high-
est paid employee of similarly situated employees of 
the Commission. 
(d) In this section, the term ‘‘transfer date’’ means 
the date established by the Commission for purposes of 
this section, except that such date may not be later than 
the date that is 1 year after the date of enactment of this 
Act. 
SEC. 50003. BUREAU OF CONSUMER FINANCIAL PROTEC-
TION. 
Section 1017(a)(2) of the Consumer Financial Pro-
tection Act of 2010 (12 U.S.C. 5497(a)(2)) is amended— 
(1) in subparagraph (A)(iii)— 
(A) by striking ‘‘12 percent’’ and inserting 
‘‘5 percent’’; and 
(B) by striking ‘‘2013’’ and inserting 
‘‘2025’’; and 
(2) by striking subparagraph (C) and inserting 
the following: 
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457 
‘‘(C) LIMITATION ON UNOBLIGATED BAL-
ANCES.—With respect to a fiscal year, the 
amount of unobligated balances of the Bureau 
may not exceed 5 percent of the dollar amount 
referred to in subparagraph (A)(iii), as adjusted 
under subparagraph (B). The Director shall 
transfer any excess amount of such unobligated 
balances to the general fund of the Treasury.’’. 
SEC. 50004. CONSUMER FINANCIAL CIVIL PENALTY FUND. 
Section 1017(d) of the Consumer Financial Protec-
tion Act of 2010 (12 U.S.C. 5497(d)) is amended— 
(1) in paragraph (2)— 
(A) in the first sentence, by inserting ‘‘di-
rect’’ before ‘‘victims’’; and 
(B) by striking the second sentence; and 
(2) by adding at the end the following: 
‘‘(3) TREATMENT OF EXCESS AMOUNTS.—With 
respect to a civil penalty described under paragraph 
(1), if the Bureau makes payments to all of the di-
rect victims of activities for which that civil penalty 
was imposed, the Bureau shall transfer all amounts 
that remain in the Civil Penalty Fund with respect 
to that civil penalty to the general fund of the 
Treasury.’’. 
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458 
SEC. 50005. FINANCIAL RESEARCH FUND. 
Section 155 of the Financial Stability Act of 2010 
(12 U.S.C. 5345) is amended by adding at the end the 
following: 
‘‘(e) LIMITATION ON ASSESSMENTS AND THE FINAN-
CIAL RESEARCH FUND.— 
‘‘(1) LIMITATION
ON
ASSESSMENTS.—Assess-
ments may not be collected under subsection (d) if 
the assessments would result in— 
‘‘(A) the Financial Research Fund exceed-
ing the average annual budget amount; or 
‘‘(B) the total assessments collected during 
a single fiscal year exceeding the average an-
nual budget amount. 
‘‘(2) TRANSFER
OF
EXCESS
FUNDS.—Any 
amounts in the Financial Research Fund exceeding 
the average annual budget amount shall be deposited 
into the general fund of the Treasury. 
‘‘(3) AVERAGE ANNUAL BUDGET AMOUNT DE-
FINED.—In this subsection the term ‘average annual 
budget amount’ means the annual average, over the 
3 most recently completed fiscal years, of the ex-
penses of the Council in carrying out the duties and 
responsibilities of the Council that were paid by the 
Office using amounts obtained through assessments 
under subsection (d).’’. 
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459 
TITLE VI—COMMITTEE ON 
HOMELAND SECURITY 
SEC. 60001. BORDER BARRIER SYSTEM CONSTRUCTION, 
INVASIVE SPECIES, AND BORDER SECURITY 
FACILITIES IMPROVEMENTS. 
In addition to amounts otherwise available, there is 
appropriated to the Commissioner of U.S. Customs and 
Border Protection for fiscal year 2025, out of any money 
in the Treasury not otherwise appropriated, to remain 
available until September 30, 2029, the following: 
(1) $46,500,000,000 for necessary expenses re-
lating to the following: 
(A) Construction, installation, or improve-
ment of primary, waterborne, and secondary 
barriers. 
(B) Access roads. 
(C) Barrier system attributes, including 
cameras, lights, sensors, roads, and other detec-
tion technology. 
(2) $50,000,000 for necessary expenses relating 
to eradication and removal of the carrizo cane plant, 
salt cedar, or any other invasive plant species that 
impedes border security operations along the Rio 
Grande River. 
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(3) $5,000,000,000 for necessary expenses re-
lating to lease, acquisition, construction, or improve-
ment of U.S. Customs and Border Protection facili-
ties and checkpoints in the vicinity of the southwest, 
northern, and maritime borders. 
SEC. 60002. U.S. CUSTOMS AND BORDER PROTECTION PER-
SONNEL AND FLEET VEHICLES. 
(a) CBP PERSONNEL.—In addition to amounts oth-
erwise available, there is appropriated to the Commis-
sioner of U.S. Customs and Border Protection for fiscal 
year 2025, out of any money in the Treasury not otherwise 
appropriated, $4,100,000,000, to remain available until 
September 30, 2029, to hire and train additional Border 
Patrol agents, Office of Field Operations Officers, Air and 
Marine agents, rehired annuitants, and U.S. Customs and 
Border Protection support personnel. 
(b) RESTRICTIONS.—None of the funds made avail-
able by subsection (a) may be used to recruit, hire, or train 
personnel for the duties of processing coordinators. 
(c) CBP RETENTION AND HIRING BONUSES.—In ad-
dition to amounts otherwise available, there is appro-
priated to the Commissioner of U.S. Customs and Border 
Protection for fiscal year 2025, out of any money in the 
Treasury not otherwise appropriated, $2,052,630,000, to 
remain available until September 30, 2029, to provide an-
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nual retention bonuses or signing bonuses to eligible Bor-
der Patrol agents, Office of Field Operations Officers, and 
Air and Marine agents. 
(d) CBP VEHICLES.—In addition to amounts other-
wise available, there is appropriated to the Commissioner 
of U.S. Customs and Border Protection for fiscal year 
2025, out of any money in the Treasury not otherwise ap-
propriated, $813,000,000, to remain available until Sep-
tember 30, 2029, for the lease or acquisition of additional 
marked patrol units. 
(e) FLETC.—In addition to amounts otherwise avail-
able, there is appropriated to the Director of the Federal 
Law Enforcement Training Center for fiscal year 2025, 
out of any money in the Treasury not otherwise appro-
priated— 
(1) $285,000,000, to remain available until 
September 30, 2029, to support the training of 
newly hired Federal law enforcement personnel em-
ployed by the Department of Homeland Security; 
and 
(2) $465,000,000, to remain available until 
September 30, 2029, for procurement and construc-
tion, improvements, and related expenses of the Fed-
eral Law Enforcement Training Centers facilities. 
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462 
(f) BORDER SECURITY WORKFORCE RECRUITMENT 
AND APPLICANT SOURCING.—In addition to amounts oth-
erwise available, there is appropriated to the Commis-
sioner of U.S. Customs and Border Protection for fiscal 
year 2025, out of any money in the Treasury not otherwise 
appropriated, $600,000,000, to remain available until 
September 30, 2029, for marketing, recruiting, applicant 
sourcing and vetting, and operational mobility programs 
for border security personnel. 
SEC. 60003. U.S. CUSTOMS AND BORDER PROTECTION 
TECHNOLOGY, NATIONAL VETTING CENTER, 
AND OTHER EFFORTS TO ENHANCE BORDER 
SECURITY. 
(a) CBP TECHNOLOGY.—In addition to amounts oth-
erwise available, there is appropriated to the Commis-
sioner of U.S. Customs and Border Protection for fiscal 
year 2025, out of any money in the Treasury not otherwise 
appropriated, to remain available until September 30, 
2029, the following: 
(1) $1,076,317,000 for necessary expenses re-
lating to procurement and integration of new non-in-
trusive inspection equipment and associated civil 
works, artificial intelligence, integration, and ma-
chine learning, as well as other mission support, to 
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463 
combat the entry of illicit narcotics along the south-
west, northern, and maritime borders. 
(2) $2,766,000,000 for necessary expenses re-
lating to upgrades and procurement of border sur-
veillance technologies along the southwest, northern, 
and maritime borders. 
(3) $673,000,000 for necessary expenses, in-
cluding the deployment of technology, relating to the 
biometric entry and exit system under section 7208 
of the Intelligence Reform and Terrorism Prevention 
Act of 2004 (8 U.S.C. 1365b). 
(b) RESTRICTIONS.—None of the funds made avail-
able pursuant to subsection (a)(2) may be used for the 
procurement or deployment of surveillance towers that 
have not been— 
(1) tested, and 
(2) accepted, 
by the Federal Government to deliver autonomous capa-
bilities. 
(c) AIR AND MARINE OPERATIONS.—In addition to 
amounts otherwise available, there is appropriated to the 
Commissioner of U.S. Customs and Border Protection for 
fiscal year 2025, out of any money in the Treasury not 
otherwise appropriated, $1,234,000,000, to remain avail-
able until September 30, 2029, for Air and Marine Oper-
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ations’ upgrading and procurement of new platforms for 
rapid air and marine response capabilities. 
(d) NATIONAL VETTING CENTER.—In addition to 
amounts otherwise available, there is appropriated to the 
Commissioner of U.S. Customs and Border Protection for 
fiscal year 2025, out of any money in the Treasury not 
otherwise appropriated, $16,000,000, to remain available 
until September 30, 2029, for necessary expenses relating 
to U.S. Customs and Border Protection’s National Vetting 
Center to support screening, vetting activities, and expan-
sion of the criminal history database of foreign nationals. 
(e) OTHER EFFORTS
TO COMBAT DRUG TRAF-
FICKING TO ENHANCE BORDER SECURITY.—In addition 
to amounts otherwise available, there is appropriated to 
the Secretary of Homeland Security for fiscal year 2025, 
out of any money in the Treasury not otherwise appro-
priated, $500,000,000, to remain available until Sep-
tember 30, 2029, for enhancing border security and com-
batting trafficking, including fentanyl and its precursor 
chemicals, at the southwest, northern, and maritime bor-
ders. 
(f) COMMEMORATIONS.—In addition to amounts oth-
erwise available, there is appropriated to the Secretary of 
Homeland Security for fiscal year 2025, out of any money 
in the Treasury not otherwise appropriated, $1,000,000, 
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to remain available until September 30, 2029, for com-
memorating efforts and events related to border security. 
(g) DEFINITION.—In this section, the term ‘‘autono-
mous’’ means integrated software and hardware systems 
that utilize sensors, onboard computing, and artificial in-
telligence to identify items of interest that would otherwise 
be manually identified by U.S. Customs and Border Pro-
tection personnel. 
SEC. 60004. STATE AND LOCAL LAW ENFORCEMENT PRESI-
DENTIAL RESIDENCE PROTECTION. 
(a) PRESIDENTIAL RESIDENCE PROTECTION.—In 
addition to amounts otherwise available, there is appro-
priated to the Administrator of the Federal Emergency 
Management Agency, for fiscal year 2025, out of any 
money in the Treasury not otherwise appropriated, 
$300,000,000, to remain available until September 30, 
2029, for the reimbursement of extraordinary law enforce-
ment personnel costs for protection activities directly and 
demonstrably associated with any residence of the Presi-
dent that is designated pursuant to section 3 of the Presi-
dential Protection Assistance Act of 1976 (Public Law 
94–524) to be secured by the United States Secret Serv-
ice. 
(b) AVAILABILITY.—Funds under subsection (a) shall 
be available only for costs that a State or local agency— 
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(1) incurred or incurs on or after July 1, 2024; 
(2) can demonstrate to the Administrator of the 
Federal Emergency Management Agency as being— 
(A) in excess of the costs of normal and 
typical law enforcement operations; 
(B) directly attributable to the provision of 
protection described in such subsection; and 
(C) associated with a non-governmental 
property designated pursuant to section 3 of 
the Presidential Protection Assistance Act of 
1976 (Public Law 94–524) to be secured by the 
United States Secret Service; and 
(3) certifies to the Administrator as being for 
protection activities requested by the Director of the 
United States Secret Service. 
SEC. 60005. STATE HOMELAND SECURITY GRANT PRO-
GRAM. 
In addition to amounts otherwise available, there is 
appropriated to the Administrator of the Federal Emer-
gency Management Agency, for fiscal year 2025, out of 
any money in the Treasury, not otherwise appropriated, 
to be administered under the State Homeland Security 
Grant Program authorized under section 2004 of the 
Homeland Security Act of 2002 (6 U.S.C. 605), to en-
hance State, local, and Tribal security through grants, 
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contracts, cooperative agreements, and other activities, of 
which— 
(1) $500,000,000, to remain available until 
September 30, 2029, for State and local capabilities 
to detect, identify, track, or monitor threats from 
unmanned aircraft systems (as such term is defined 
in section 44801 of title 49, United States Code); 
(2) $625,000,000, to remain available until 
September 30, 2029, for security, planning, and 
other costs related to the 2026 FIFA World Cup; 
(3) $1,000,000,000, to remain available until 
September 30, 2029, for security, planning, and 
other costs related to the 2028 Olympics; and 
(4) $450,000,000, to remain available until 
September 30, 2029, for the Operation Stonegarden 
Grant Program. 
TITLE VII—COMMITTEE ON THE 
JUDICIARY 
Subtitle A—Immigration Matters 
PART 1—IMMIGRATION FEES 
SEC. 70001. APPLICABILITY OF THE IMMIGRATION LAWS. 
(a) APPLICABILITY.—Notwithstanding any provision 
of the immigration laws (as defined under section 101 of 
the Immigration and Nationality Act), the fees under this 
subtitle shall apply. 
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(b) TERMS.—The terms used under this subtitle shall 
have the meanings given such terms in section 101 of the 
Immigration and Nationality Act. 
(c) REFERENCES
TO IMMIGRATION
AND NATION-
ALITY ACT.—Except as otherwise expressly provided, 
whenever this subtitle references a section or other provi-
sion, the reference shall be considered to be to a section 
or other provision of the Immigration and Nationality Act. 
SEC. 70002. ASYLUM FEE. 
(a) IN GENERAL.—In addition to any other fee au-
thorized by law, the Secretary of Homeland Security or 
the Attorney General, as applicable, shall impose a fee in 
the amount specified in this section for a fiscal year on 
each alien who files an application for asylum under sec-
tion 208 of the Immigration and Nationality Act at the 
time such application is filed. 
(b) INITIAL AMOUNT.—The amount specified in this 
section for fiscal year 2025 shall be such amount as the 
Secretary or Attorney General, as applicable, may by rule 
provide, but in any event not less than $1,000. 
(c) SUBSEQUENT ADJUSTMENT.—Beginning in fiscal 
year 2026 and each fiscal year thereafter, the amount 
specified in this section for a fiscal year shall be equal 
to the sum of— 
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469 
(1) the amount imposed under this section for 
the prior fiscal year; and 
(2) rounded to the next lowest multiple of $10, 
the amount referred to in paragraph (1), multiplied 
by the percentage (if any) by which the Consumer 
Price Index for All Urban Consumers for the month 
of July preceding the date on which such adjustment 
takes effect exceeds the Consumer Price Index for 
All Urban Consumers for the same month of the 
preceding calendar year. 
(d) CREDITING CERTAIN FUNDS.—During any fiscal 
year, the total amount of fees received under this section 
shall be credited as follows: 
(1) 50 percent of fees received from applica-
tions filed with the Attorney General shall be cred-
ited to the Executive Office for Immigration Review 
to retain and spend without further appropriation. 
(2) 50 percent of fees received from applica-
tions filed with the Secretary of Homeland Security 
shall be credited to U.S. Citizenship and Immigra-
tion Services and deposited into the Immigration 
Examinations Fee Account established under section 
286(m) of the Immigration and Nationality Act (8 
U.S.C. 1356(m)) to retain and spend without fur-
ther appropriation. 
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470 
(3) Any amounts not credited to the Executive 
Office for Immigration Review or U.S. Citizenship 
and Immigration Services shall be credited as offset-
ting receipts and deposited into the general fund of 
the Treasury. 
(e) NO WAIVER.—A fee imposed under this section 
shall not be waived or reduced. 
SEC. 70003. EMPLOYMENT AUTHORIZATION DOCUMENT 
FEES. 
(a) ASYLUM APPLICANTS.— 
(1) IN GENERAL.—In addition to any other fee 
authorized by law, the Secretary of Homeland Secu-
rity shall impose on any alien who files an initial ap-
plication for employment authorization under section 
208(d)(2) of the Immigration and Nationality Act a 
fee in the amount specified in this subsection at the 
time such initial employment authorization applica-
tion is filed. Each initial employment authorization 
shall be valid for a period of not more than six 
months. 
(2) INITIAL AMOUNT.— For purposes of this 
subsection, the amount specified in this subsection 
for fiscal year 2025 shall be such amount as the 
Secretary may by rule provide, but in any event not 
less than $550. 
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471 
(3) SUBSEQUENT ADJUSTMENT.—Beginning in 
fiscal year 2026 and each fiscal year thereafter, the 
amount for a fiscal year shall be equal to the sum 
of— 
(A) the amount imposed under this section 
for the prior fiscal year; and 
(B) rounded to the next lowest multiple of 
$10, the amount referred to in subparagraph 
(A), multiplied by the percentage (if any) by 
which the Consumer Price Index for All Urban 
Consumers for the month of July preceding the 
date on which such adjustment takes effect ex-
ceeds the Consumer Price Index for All Urban 
Consumers for the same month of the preceding 
calendar year. 
(4) CREDITING OF FUNDS.—25 percent of fees 
received under this section shall be credited to U.S. 
Citizenship and Immigration Services and deposited 
into the Immigration Examinations Fee Account es-
tablished under section 286(m) of the Immigration 
and Nationality Act (8 U.S.C. 1356(m)) to retain 
and spend without further appropriation, of which 
50 percent shall be used by U.S. Citizenship and Im-
migration Services to detect and prevent immigra-
tion benefit fraud. Any amounts not credited to U.S. 
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472 
Citizenship and Immigration Services under this sec-
tion shall be credited as offsetting receipts and de-
posited into the general fund of the Treasury. 
(5) NO
WAIVER.—A fee imposed under this 
subsection shall not be waived or reduced. 
(b) PAROLE.— 
(1) IN GENERAL.—In addition to any other fee 
authorized by law, the Secretary of Homeland Secu-
rity shall impose on any alien paroled into the 
United States a fee for any initial application for 
employment authorization in an amount specified in 
this subsection at the time such initial application is 
filed. Each initial employment authorization shall be 
valid for a period of not more than six months. 
(2) INITIAL
AMOUNT.—For purposes of this 
subsection, the amount specified in this subsection 
for fiscal year 2025 shall be such amount as the 
Secretary may by rule provide, but in any event not 
less than $550. 
(3) SUBSEQUENT ADJUSTMENT.—Beginning in 
fiscal year 2026 and each fiscal year thereafter, the 
amount specified in this subsection for a fiscal year 
shall be equal to the sum of— 
(A) the amount imposed under this sub-
section for the prior fiscal year; and 
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473 
(B) rounded to the next lowest multiple of 
$10, the amount referred to in subparagraph 
(A), multiplied by the percentage (if any) by 
which the Consumer Price Index for All Urban 
Consumers for the month of July preceding the 
date on which such adjustment takes effect ex-
ceeds the Consumer Price Index for All Urban 
Consumers for the same month of the preceding 
calendar year. 
(4) CREDITING OF FUNDS.—The fees received 
under this section shall be credited as offsetting re-
ceipts and deposited into the general fund of the 
Treasury. 
(5) NO
WAIVER.—A fee imposed under this 
subsection shall not be waived or reduced. 
(c) TEMPORARY PROTECTED STATUS.— 
(1) IN GENERAL.—In addition to any other fee 
authorized by law, for any alien who files an initial 
application for employment authorization under sec-
tion 244(a)(1)(B) of the Immigration and Nation-
ality Act, the Secretary of Homeland Security shall 
impose a fee in an amount specified in this sub-
section at the time such initial application is filed. 
Each initial employment authorization shall be valid 
for a period of not more than six months. 
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474 
(2) INITIAL
AMOUNT.—For purposes of this 
subsection, the amount specified in this subsection 
for fiscal year 2025 shall be such amount as the 
Secretary may by rule provide, but in any event not 
less than $550. 
(3) SUBSEQUENT ADJUSTMENT.—Beginning in 
fiscal year 2026 and each fiscal year thereafter, the 
amount specified in this subsection for a fiscal year 
shall be equal to the sum of— 
(A) the amount imposed under this sub-
section for the prior fiscal year; and 
(B) rounded to the next lowest multiple of 
$10, the amount referred to in subparagraph 
(A), multiplied by the percentage (if any) by 
which the Consumer Price Index for All Urban 
Consumers for the month of July preceding the 
date on which such adjustment takes effect ex-
ceeds the Consumer Price Index for All Urban 
Consumers for the same month of the preceding 
calendar year. 
(4) CREDITING OF CERTAIN FUNDS.—The fees 
received under this section shall be credited as off-
setting receipts and deposited into the general fund 
of the Treasury. 
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475 
(5) NO
WAIVER.—A fee imposed under this 
subsection shall not be waived or reduced. 
SEC. 70004. PAROLE FEE. 
(a) IN GENERAL.—In addition to any other fee au-
thorized by law, the Secretary of Homeland Security shall 
impose a fee in an amount specified in this section on each 
alien who is paroled into the United States, except if, as 
established by the alien, the alien is paroled because— 
(1) the alien has a medical emergency, and— 
(A) the alien cannot obtain necessary 
treatment in the foreign state in which the alien 
is residing; or 
(B) the medical emergency is life-threat-
ening and there is insufficient time for the alien 
to be admitted to the United States through the 
normal visa process; 
(2) the alien is the parent or legal guardian of 
an alien described in paragraph (1) and the alien de-
scribed in paragraph (1) is a minor; 
(3) the alien is needed in the United States to 
donate an organ or other tissue for transplant and 
there is insufficient time for the alien to be admitted 
to the United States through the normal visa proc-
ess; 
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476 
(4) the alien has a close family member in the 
United States whose death is imminent and the alien 
could not arrive in the United States in time to see 
such family member alive if the alien were to be ad-
mitted to the United States through the normal visa 
process; 
(5) the alien is seeking to attend the funeral of 
a close family member and the alien could not arrive 
in the United States in time to attend such funeral 
if the alien were to be admitted to the United States 
through the normal visa process; 
(6) the alien is an adopted child with an urgent 
medical condition who is in the legal custody of the 
petitioner for a final adoption-related visa and whose 
medical treatment is required before the expected 
award of a final adoption-related visa; 
(7) the alien is a lawful applicant for adjust-
ment of status under section 245 of the Immigration 
and Nationality Act and is returning to the United 
States after temporary travel abroad; 
(8) the alien is returned to a contiguous coun-
try under section 235(b)(2)(C) of the Immigration 
and Nationality Act and paroled into the United 
States to allow the alien to attend the alien’s immi-
gration hearing; 
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477 
(9) the alien— 
(A) is a national of the Republic of Cuba 
and is living in the Republic of Cuba; 
(B) is the beneficiary of an approved peti-
tion under section 203(a) of the Immigration 
and Nationality Act; 
(C) is an alien for whom an immigrant 
visa is not immediately available; 
(D) meets all eligibility requirements for 
an immigrant visa; 
(E) is not otherwise inadmissible; and 
(F) is receiving a grant of parole in fur-
therance of the commitment of the United 
States to the minimum level of annual legal mi-
gration of Cuban nationals to the United States 
specified in the U.S.-Cuba Joint Communique´ 
on Migration, done at New York September 9, 
1994, and reaffirmed in the Cuba-United 
States: Joint Statement on Normalization of 
Migration, Building on the Agreement of Sep-
tember 9, 1994, done at New York May 2, 
1995; or 
(10) the Secretary of Homeland Security deter-
mines that a significant public benefit has resulted 
or will result from the parole of an alien only if— 
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478 
(A) the alien has assisted or will assist the 
United States Government in a law enforcement 
matter; 
(B) the alien’s presence is required by the 
Government in furtherance of such law enforce-
ment matter; and 
(C) the alien is inadmissible, does not sat-
isfy the eligibility requirements for admission as 
a nonimmigrant, or there is insufficient time for 
the alien to be admitted to the United States 
through the normal visa process. 
(b) INITIAL AMOUNT.—For purposes of this section, 
the amount specified in this subsection for fiscal year 
2025 shall be such amount as the Secretary may by rule 
provide, but in any event not less than $1,000. 
(c) SUBSEQUENT ADJUSTMENT.—Beginning in fiscal 
year 2026 and each fiscal year thereafter, the amount 
specified in this section for a fiscal year shall be equal 
to the sum of— 
(1) the amount imposed under this section for 
the prior fiscal year; and 
(2) rounded to the next lowest multiple of $10, 
the amount referred to in paragraph (1), multiplied 
by the percentage (if any) by which the Consumer 
Price Index for All Urban Consumers for the month 
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479 
of July preceding the date on which such adjustment 
takes effect exceeds the Consumer Price Index for 
All Urban Consumers for the same month of the 
preceding calendar year. 
(d) CREDITING OF FUNDS.—Fees received under this 
section shall be credited as offsetting receipts and depos-
ited in the general fund of the Treasury. 
(e) NO WAIVER.—A fee imposed under this section 
shall not be waived or reduced. 
SEC. 70005. SPECIAL IMMIGRANT JUVENILE FEE. 
(a) IN GENERAL.—In addition to any other fee au-
thorized by law, the Secretary of Homeland Security shall 
impose a fee in an amount specified in this section on any 
alien applying for special immigrant juvenile status under 
section 101(a)(27)(J) of the Immigration and Nationality 
Act if reunification with 1 parent or legal guardian is via-
ble, notwithstanding abuse, neglect, abandonment, or a 
similar basis found under State law making reunification 
with the other parent or legal guardian not viable. 
(b) INITIAL AMOUNT.—For purposes of this sub-
section, the amount specified in this section for fiscal year 
2025 shall be such amount as the Secretary may by rule 
provide, but in any event not less than $500. 
(c) SUBSEQUENT ADJUSTMENT.—Beginning in fiscal 
year 2026 and each fiscal year thereafter, the amount 
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480 
specified in this section for a fiscal year shall be equal 
to the sum of— 
(1) the amount imposed under this section for 
the prior fiscal year; and 
(2) rounded to the next lowest multiple of $10, 
the amount referred to in paragraph (1), multiplied 
by the percentage (if any) by which the Consumer 
Price Index for All Urban Consumers for the month 
of July preceding the date on which such adjustment 
takes effect exceeds the Consumer Price Index for 
All Urban Consumers for the same month of the 
preceding calendar year. 
(d) CREDITING OF FUNDS.—Fees received under this 
section shall be credited as offsetting receipts and depos-
ited in the general fund of the Treasury. 
(e) NO WAIVER.—A fee imposed under this section 
shall not be waived or reduced. 
SEC. 70006. TEMPORARY PROTECTED STATUS FEE. 
(a) IN GENERAL.—In addition to any other fee au-
thorized by law, the Secretary of Homeland Security shall 
impose a fee in an amount specified in this section for 
the consideration of an application for temporary pro-
tected status under section 244 of the Immigration and 
Nationality Act on any alien who— 
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481 
(1) has not been admitted into the United 
States; or 
(2) has been admitted to the United States as 
a nonimmigrant but at the time of application for 
temporary protected status has failed— 
(A) to maintain or extend the non-
immigrant status in which the alien was admit-
ted or to which the status was changed under 
section 248 of the Immigration and Nationality 
Act, including complying with the period of stay 
authorized by the Secretary of Homeland Secu-
rity in connection with such status; or 
(B) to comply with the conditions of such 
nonimmigrant status. 
(b) INITIAL AMOUNT.—For purposes of this sub-
section, the amount specified in this section for fiscal year 
2025 shall be such amount as the Secretary may by rule 
provide, but in any event not less than $500. 
(c) SUBSEQUENT ADJUSTMENT.—Beginning in fiscal 
year 2026 and each fiscal year thereafter, the amount 
specified in this section for a fiscal year shall be equal 
to the sum of— 
(1) the amount imposed under this section for 
the prior fiscal year; and 
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541 
(b) USE
OF FUNDS.—The funds made available 
under subsection (a) shall only be used for purposes of 
return of aliens under section 235(b)(2)(C) of the Immi-
gration and Nationality Act (8 U.S.C. 1225(b)(2)(C)). 
SEC. 70114. STATE AND LOCAL PARTICIPATION IN HOME-
LAND SECURITY EFFORTS. 
(a) APPROPRIATION.—In addition to amounts other-
wise available, there is appropriated to U.S. Immigration 
and Customs Enforcement for fiscal year 2025, out of any 
money in the Treasury not otherwise appropriated, 
$787,000,000, to remain available until September 30, 
2029, for the purpose described in subsection (b). 
(b) USE
OF FUNDS.—The funds made available 
under subsection (a) shall only be used for the purpose 
of ending the presence of criminal gangs and transnational 
criminal organizations throughout the United States, com-
bating human smuggling and trafficking networks, sup-
porting immigration enforcement activities, and providing 
reimbursement for State and local participation in such 
efforts. 
SEC. 70115. UNACCOMPANIED ALIEN CHILDREN CAPACITY. 
(a) APPROPRIATION.—In addition to amounts other-
wise available, there is appropriated to the Office of Ref-
ugee Resettlement for fiscal year 2025, out of any money 
in 
the 
Treasury 
not 
otherwise 
appropriated, 
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902 
tiple of $10, such dollar amount shall be round-
ed to the next lowest multiple of $10. 
‘‘(B) 
ASSET
THRESHOLD.—If 
the 
$10,000,000 dollar amount in subsection (b)(2), 
after being increased under paragraph (1), is 
not a multiple of $10,000, such dollar amount 
shall be rounded to the next lowest multiple of 
$10,000. 
‘‘(C) OTHER
DOLLAR
AMOUNTS.—If any 
dollar amount in subsection (b) or (c) (other 
than any amount to which subparagraph (A) or 
(B) applies), after being increased under para-
graph (1), is not a multiple of $1,000, such dol-
lar amount shall be rounded to the next lowest 
multiple of $1,000.’’. 
(B) INFORMATION REQUIRED TO BE SENT 
TO OTHER TAXPAYERS.—Section 6724(d)(2) is 
amended— 
(i) by striking ‘‘or’’ at the end of sub-
paragraph (KK), 
(ii) by striking the period at the end 
of the subparagraph (LL) and inserting a 
comma, and 
(iii) by inserting after subparagraph 
(LL) the following new subparagraphs: 
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