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shall not delay the other activities of the Working
Group under this section.
(3) THE HEALTH REPORT TO THE AMERICAN
PEOPLE.—Not later than 90 days after the hearings
described in paragraphs (1) and (2) are completed,
the Working Group shall prepare and make available
to health care consumers through the Internet and
other appropriate public channels, a report to be enti-
tled, ‘‘The Health Report to the American People’’.
Such report shall be understandable to the general
public and include—
(A) a summary of—
(i) health care and related services that
may be used by individuals throughout
their life span;
(ii) the cost of health care services and
their medical effectiveness in providing bet-
ter quality of care for different age groups;
(iii) the source of coverage and pay-
ment, including reimbursement, for health
care services;
(iv) the reasons people are uninsured
or underinsured and the cost to taxpayers,
purchasers of health services, and commu-
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nities when Americans are uninsured or
underinsured;
(v) the impact on health care outcomes
and costs when individuals are treated in
all stages of disease;
(vi) health care cost containment strat-
egies; and
(vii) information on health care needs
that need to be addressed;
(B) examples of community strategies to
provide health care coverage or access;
(C) 
information 
on 
geographic-specific
issues relating to health care;
(D) information concerning the cost of care
in different settings, including institutional-
based care and home and community-based care;
(E) a summary of ways to finance health
care coverage; and
(F) the role of technology in providing fu-
ture health care including ways to support the
information needs of patients and providers.
(4) COMMUNITY MEETINGS.—
(A) IN GENERAL.—Not later than 1 year
after the date of enactment of this Act, the Work-
ing Group shall initiate health care community
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meetings throughout the United States (in this
section referred to as ‘‘community meetings’’).
Such community meetings may be geographi-
cally or regionally based and shall be completed
within 180 days after the initiation of the first
meeting.
(B) NUMBER OF MEETINGS.—The Working
Group shall hold a sufficient number of commu-
nity meetings in order to receive information
that reflects—
(i) the geographic differences through-
out the United States;
(ii) diverse populations; and
(iii) a balance among urban and rural
populations.
(C) MEETING REQUIREMENTS.—
(i) FACILITATOR.—A State health offi-
cer may be the facilitator at the community
meetings.
(ii) ATTENDANCE.—At least 1 member
of the Working Group shall attend and serve
as chair of each community meeting. Other
members may participate through inter-
active technology.
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(iii) TOPICS.—The community meet-
ings shall, at a minimum, address the fol-
lowing issues:
(I) The optimum way to balance
costs and benefits so that affordable
health coverage is available to as many
people as possible.
(II) The identification of services
that provide cost-effective, essential
health care services to maintain and
improve health and which should be
included in health care coverage.
(III) The cost of providing in-
creased benefits.
(IV) The mechanisms to finance
health care coverage, including defin-
ing the appropriate financial role for
individuals, businesses, and govern-
ment.
(iv) INTERACTIVE TECHNOLOGY.—The
Working Group may encourage public par-
ticipation in community meetings through
interactive technology and other means as
determined appropriate by the Working
Group.
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(D) INTERIM
REQUIREMENTS.—Not later
than 180 days after the date of completion of the
community meetings, the Working Group shall
prepare and make available to the public
through the Internet and other appropriate pub-
lic channels, an interim set of recommendations
on health care coverage and ways to improve
and strengthen the health care system based on
the information and preferences expressed at the
community meetings. There shall be a 90-day
public comment period on such recommenda-
tions.
(l) RECOMMENDATIONS.—Not later than 120 days
after the expiration of the public comment period described
in subsection (k)(4)(D), the Working Group shall submit to
Congress and the President a final set of recommendations.
(m) ADMINISTRATION.—
(1) EXECUTIVE DIRECTOR.—There shall be an
Executive Director of the Working Group who shall be
appointed by the chairperson of the Working Group
in consultation with the members of the Working
Group.
(2) COMPENSATION.—While serving on the busi-
ness of the Working Group (including travel time), a
member of the Working Group shall be entitled to
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compensation at the per diem equivalent of the rate
provided for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, and while
so serving away from home and the member’s regular
place of business, a member may be allowed travel ex-
penses, as authorized by the chairperson of the Work-
ing Group. For purposes of pay and employment ben-
efits, rights, and privileges, all personnel of the Work-
ing Group shall be treated as if they were employees
of the Senate.
(3) INFORMATION FROM FEDERAL AGENCIES.—
The Working Group may secure directly from any
Federal department or agency such information as
the Working Group considers necessary to carry out
this Act. Upon request of the Working Group, the
head of such department or agency shall furnish such
information.
(4) POSTAL
SERVICES.—The Working Group
may use the United States mails in the same manner
and under the same conditions as other departments
and agencies of the Federal Government.
(n) DETAIL.—Not more than 10 Federal Government
employees employed by the Department of Labor and 10
Federal Government employees employed by the Depart-
ment of Health and Human Services may be detailed to
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the Working Group under this section without further reim-
bursement. Any detail of an employee shall be without
interruption or loss of civil service status or privilege.
(o) TEMPORARY AND INTERMITTENT SERVICES.—The
chairperson of the Working Group may procure temporary
and intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals which do not
exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under sec-
tion 5316 of such title.
(p) ANNUAL REPORT.—Not later than 1 year after the
date of enactment of this Act, and annually thereafter dur-
ing the existence of the Working Group, the Working Group
shall report to Congress and make public a detailed descrip-
tion of the expenditures of the Working Group used to carry
out its duties under this section.
(q) SUNSET
OF WORKING GROUP.—The Working
Group shall terminate when the report described in sub-
section (l) is submitted to Congress.
(r) ADMINISTRATION REVIEW AND COMMENTS.—Not
later than 45 days after receiving the final recommenda-
tions of the Working Group under subsection (l), the Presi-
dent shall submit a report to Congress which shall
contain—
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(1) additional views and comments on such rec-
ommendations; and
(2) recommendations for such legislation and ad-
ministrative actions as the President considers appro-
priate.
(s) REQUIRED CONGRESSIONAL ACTION.—Not later
than 45 days after receiving the report submitted by the
President under subsection (r), each committee of jurisdic-
tion of Congress shall hold at least 1 hearing on such report
and on the final recommendations of the Working Group
submitted under subsection (l).
(t) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—There are authorized to be
appropriated to carry out this Act, other than sub-
section (k)(3), $3,000,000 for each of fiscal years
2004, 2005, and 2006.
(2) HEALTH REPORT TO THE AMERICAN PEO-
PLE.—There are authorized to be appropriated for the
preparation and dissemination of the Health Report
to the American People described in subsection (k)(3),
such sums as may be necessary for the fiscal year in
which the report is required to be submitted.
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SEC. 621. GAO STUDY OF PHARMACEUTICAL PRICE CON-
TROLS AND PATENT PROTECTIONS IN THE G–
7 COUNTRIES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study of price controls imposed on
pharmaceuticals in France, Germany, Italy, Japan, the
United Kingdom and Canada to review the impact such
regulations have on consumers, including American con-
sumers, and on innovation in medicine. Such study shall
include—
(1) the pharmaceutical price control structure in
each country for a wide range of pharmaceuticals,
compared with average pharmaceutical prices paid by
Americans covered by private sector health insurance;
(2) the proportion of the cost for innovation
borne by American consumers, compared with con-
sumers in the other six countries;
(3) a review of how closely the observed prices in
regulated markets correspond to the prices that effi-
ciently 
distribute 
common 
costs 
of 
production
(‘‘Ramsey prices’’);
(4) a review of any peer-reviewed literature that
might show the health consequences to patients in the
listed countries that result from the absence or de-
layed introduction of medicines, including the cost of
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not having access to medicines, in terms of lower life
expectancy and lower quality of health;
(5) the impact on American consumers, in terms
of reduced research into new or improved pharma-
ceuticals (including the cost of delaying the introduc-
tion of a significant advance in certain major dis-
eases), if similar price controls were adopted in the
United States;
(6) the existing standards under international
conventions, including the World Trade Organization
and the North American Free Trade Agreement, re-
garding regulated pharmaceutical prices, including
any restrictions on anti-competitive laws that might
apply to price regulations and how economic harm
caused to consumers in markets without price regula-
tions may be remedied;
(7) in parallel trade regimes, how much of the
price difference between countries in the European
Union is captured by middlemen and how much goes
to benefit patients and health systems where parallel
importing is significant; and
(8) how much cost is imposed on the owner of a
property right from counterfeiting and from inter-
national violation of intellectual property rights for
prescription medicines.
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(b) REPORT.—Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report on the study con-
ducted under subsection (a).
SEC. 622. SENSE OF THE SENATE CONCERNING MEDICARE
PAYMENT UPDATE FOR PHYSICIANS AND
OTHER HEALTH PROFESSIONALS.
(a) FINDINGS.—The Senate makes the following find-
ings:
(1) The formula by which medicare payments
are updated each year for services furnished by physi-
cians and other health professionals is fundamentally
flawed.
(2) The flawed physician payment update for-
mula is causing a continuing physician payment cri-
sis, and, without congressional action, medicare pay-
ment rates for physicians and other practitioners are
predicted to fall by 4.2 percent in 2004.
(3) A physician payment cut in 2004 would be
the fifth cut since 1991, and would be on top of a 5.4
percent cut in 2002, with additional cuts estimated
for 2005, 2006, and 2007; from 1991–2003, payment
rates for physicians and health professionals fell 14
percent behind practice cost inflation as measured by
medicare’s own conservative estimates.
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(4) The sustainable growth rate (SGR) expendi-
ture target, which is the basis for the physician pay-
ment update, is linked to the gross domestic product
and penalizes physicians and other practitioners for
volume increases that they cannot control and that
the Government actively promotes through new cov-
erage decisions, quality improvement activities and
other initiatives that, while beneficial to patients, are
not reflected in the SGR.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that medicare beneficiary access to quality care may
be compromised if Congress does not take action to prevent
cuts next year and the following that result from the SGR
formula.
SEC. 623. RESTORATION OF FEDERAL HOSPITAL INSUR-
ANCE TRUST FUND.
(a) DEFINITIONS.—In this section:
(1) CLERICAL ERROR.—The term ‘‘clerical error’’
means the failure that occurred on April 15, 2001, to
have transferred the correct amount from the general
fund of the Treasury to the Trust Fund.
(2) TRUST
FUND.—The term ‘‘Trust Fund’’
means the Federal Hospital Insurance Trust Fund es-
tablished under section 1817 of the Social Security
Act (42 U.S.C. 1395i).
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(b) CORRECTION OF TRUST FUND HOLDINGS.—
(1) IN GENERAL.—Not later than 120 days after
the date of enactment of this Act, the Secretary of the
Treasury shall take the actions described in para-
graph (2) with respect to the Trust Fund with the
goal being that, after such actions are taken, the hold-
ings of the Trust Fund will replicate, to the extent
practicable in the judgment of the Secretary of the
Treasury, in consultation with the Secretary of
Health and Human Services, the holdings that would
have been held by the Trust Fund if the clerical error
had not occurred.
(2) OBLIGATIONS ISSUED AND REDEEMED.—The
Secretary of the Treasury shall—
(A) issue to the Trust Fund obligations
under chapter 31 of title 31, United States Code,
that bear issue dates, interest rates, and matu-
rity dates that are the same as those for the obli-
gations that—
(i) would have been issued to the Trust
Fund if the clerical error had not occurred;
or
(ii) were issued to the Trust Fund and
were redeemed by reason of the clerical
error; and
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(B) redeem from the Trust Fund obligations
that would have been redeemed from the Trust
Fund if the clerical error had not occurred.
(c) APPROPRIATION.—Not later than 120 days after
the date of enactment of this Act, there is appropriated to
the Trust Fund, out of any money in the Treasury not oth-
erwise appropriated, an amount determined by the Sec-
retary of the Treasury, in consultation with the Secretary
of Health and Human Services, to be equal to the interest
income lost by the Trust Fund through the date on which
the appropriation is being made as a result of the clerical
error.
SEC. 624. SAFETY NET ORGANIZATIONS AND PATIENT ADVI-
SORY COMMISSION.
(a) IN GENERAL.—Title XI (42 U.S.C. 1320 et seq.)
is amended by adding at the end the following new part:
‘‘PART D—SAFETY NET ORGANIZATIONS AND PATIENT
ADVISORY COMMISSION
‘‘SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY
COMMISSION
‘‘SEC. 1181. (a) ESTABLISHMENT.—There is hereby es-
tablished the Safety Net Organizations and Patient Advi-
sory Commission (in this section referred to as the ‘Com-
mission’).
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‘‘(b) REVIEW OF HEALTH CARE SAFETY NET PRO-
GRAMS AND REPORTING REQUIREMENTS.—
‘‘(1) REVIEW.—The Commission shall conduct
an ongoing review of the health care safety net pro-
grams (as described in paragraph (3)(C)) by—
‘‘(A) monitoring each health care safety net
program to document and analyze the effects of
changes in these programs on the core health care
safety net;
‘‘(B) evaluating the impact of the Emer-
gency Medical Treatment and Labor Act, the
Health Insurance Portability and Accountability
Act of 1996, the Balanced Budget Act of 1997,
the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999, the Medicare,
Medicaid, and SCHIP Benefits Protection and
Improvement Act of 2000, Prescription Drug
and Medicare Improvement Act of 2003, and
other forces on the capacity of the core health
care safety net to continue their roles in the core
health care safety net system to care for unin-
sured individuals, medicaid beneficiaries, and
other vulnerable populations;
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‘‘(C) monitoring existing data sets to assess
the status of the core health care safety net and
health outcomes for vulnerable populations;
‘‘(D) wherever possible, linking and inte-
grating existing data systems to enhance the
ability of the core health care safety net to track
changes in the status of the core health care safe-
ty net and health outcomes for vulnerable popu-
lations;
‘‘(E) supporting the development of new
data systems where existing data are insufficient
or inadequate;
‘‘(F) developing criteria and indicators of
impending core health care safety net failure;
‘‘(G) establishing an early-warning system
to identify impending failures of core health care
safety net systems and providers;
‘‘(H) providing accurate and timely infor-
mation to Federal, State, and local policymakers
on the indicators that may lead to the failure of
the core health care safety net and an estimate
of the projected consequences of such failures and
the impact of such a failure on the community;
‘‘(I) monitoring and providing oversight for
the transition of individuals receiving supple-
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mental security income benefits, medical assist-
ance under title XIX, or child health assistance
under title XXI who enroll with a managed care
entity (as defined in section 1932(a)(1)(B)), in-
cluding the review of—
‘‘(i) the degree to which health plans
have the capacity (including case manage-
ment and management information system
infrastructure) to provide quality managed
care services to such an individual;
‘‘(ii) the degree to which these plans
may be overburdened by adverse selection;
and
‘‘(iii) the degree to which emergency
departments are used by enrollees of these
plans; and
‘‘(J) identifying and disseminating the best
practices for more effective application of the les-
sons that have been learned.
‘‘(2) REPORTS.—
‘‘(A) ANNUAL
REPORTS.—Not later than
June 1 of each year (beginning with 2005), the
Commission shall, based on the review conducted
under paragraph (1), submit to the appropriate
committees of Congress a report on—
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‘‘(i) the health care needs of the unin-
sured; and
‘‘(ii) the financial and infrastructure
stability of the Nation’s core health care
safety net.
‘‘(B) AGENDA AND ADDITIONAL REVIEWS.—
‘‘(i) AGENDA.—The Chair of the Com-
mission shall consult periodically with the
Chairpersons and Ranking Minority Mem-
bers of the appropriate committees of Con-
gress regarding the Commission’s agenda
and progress toward achieving the agenda.
‘‘(ii) 
ADDITIONAL
REVIEWS.—The
Commission shall conduct additional re-
views and submit additional reports to the
appropriate committees of Congress on top-
ics relating to the health care safety net pro-
grams under the following circumstances:
‘‘(I) If requested by the Chair-
persons or Ranking Minority Members
of such committees.
‘‘(II) If the Commission deems
such additional reviews and reports
appropriate.
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‘‘(C) 
AVAILABILITY
OF
REPORTS.—The
Commission shall transmit to the Comptroller
General and the Secretary a copy of each report
submitted under this subsection and shall make
such reports available to the public.
‘‘(3) DEFINITIONS.—In this section:
‘‘(A) APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘appropriate committees of
Congress’ means the Committees on Ways and
Means and Energy and Commerce of the House
of Representatives and the Committees on Fi-
nance and Health, Education, Labor, and Pen-
sions of the Senate.
‘‘(B) CORE HEALTH CARE SAFETY NET.—
The term ‘core health care safety net’ means any
health care provider that—
‘‘(i) by legal mandate or explicitly
adopted mission, offers access to health care
services to patients, regardless of the ability
of the patient to pay for such services; and
‘‘(ii) has a case mix that is substan-
tially comprised of patients who are unin-
sured, covered under the medicaid program,
covered under any other public health care
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program, or are otherwise vulnerable popu-
lations.
Such term includes disproportionate share hos-
pitals, Federally qualified health centers, other
Federal, State, and locally supported clinics,
rural health clinics, local health departments,
and providers covered under the Emergency
Medical Treatment and Labor Act.
‘‘(C) HEALTH
CARE
SAFETY
NET
PRO-
GRAMS.—The term ‘health care safety net pro-
grams’ includes the following:
‘‘(i) MEDICAID.—The medicaid pro-
gram under title XIX.
‘‘(ii) SCHIP.—The State children’s
health insurance program under title XXI.
‘‘(iii) MATERNAL AND CHILD HEALTH
SERVICES
BLOCK
GRANT
PROGRAM.—The
maternal and child health services block
grant program under title V.
‘‘(iv) FQHC PROGRAMS.—Each feder-
ally funded program under which a health
center (as defined in section 330(1) of the
Public Health Service Act), a Federally
qualified health center (as defined in section
1861(aa)(4)), 
or 
a 
Federally-qualified
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health 
center 
(as 
defined 
in 
section
1905(l)(2)(B)) receives funds.
‘‘(v) RHC PROGRAMS.—Each federally
funded program under which a rural health
clinic (as defined in section 1861(aa)(4) or
1905(l)(1)) receives funds.
‘‘(vi) DSH 
PAYMENT
PROGRAMS.—
Each federally funded program under which
a disproportionate share hospital receives
funds.
‘‘(vii) EMERGENCY
MEDICAL
TREAT-
MENT
AND
ACTIVE
LABOR
ACT.—All care
provided under section 1867 for the unin-
sured, underinsured, beneficiaries under
title XIX, and other vulnerable individuals.
‘‘(viii) OTHER HEALTH CARE SAFETY
NET PROGRAMS.—Such term also includes
any other health care program that the
Commission determines to be appropriate.
‘‘(D) 
VULNERABLE
POPULATIONS.—The
term ‘vulnerable populations’ includes uninsured
and underinsured individuals, low-income indi-
viduals, farm workers, homeless individuals, in-
dividuals with disabilities, individuals with HIV
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or AIDS, and such other individuals as the Com-
mission may designate.
‘‘(c) MEMBERSHIP.—
‘‘(1) NUMBER AND APPOINTMENT.—The Commis-
sion shall be composed of 13 members appointed by
the Comptroller General of the United States (in this
section referred to as the ‘Comptroller General’), in
consultation with the appropriate committees of Con-
gress.
‘‘(2) QUALIFICATIONS.—
‘‘(A) IN GENERAL.—The membership of the
Commission shall include individuals with na-
tional recognition for their expertise in health fi-
nance and economics, health care safety net re-
search and program management, actuarial
science, health facility management, health plans
and integrated delivery systems, reimbursement
of health facilities, allopathic and osteopathic
medicine (including emergency medicine), and
other providers of health services, and other re-
lated fields, who provide a mix of different pro-
fessionals, broad geographic representation, and
a balance between urban and rural representa-
tives.
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‘‘(B) INCLUSION.—The membership of the
Commission shall include health professionals,
employers, 
third-party 
payers, 
individuals
skilled in the conduct and interpretation of bio-
medical, health services, and health economics re-
search and expertise in outcomes and effective-
ness research and technology assessment. Such
membership shall also include recipients of care
from core health care safety net and individuals
who provide and manage the delivery of care by
the core health care safety net.
‘‘(C) MAJORITY
NONPROVIDERS.—Individ-
uals who are directly involved in the provision,
or management of the delivery, of items and
services covered under the health care safety net
programs shall not constitute a majority of the
membership of the Commission.
‘‘(D) ETHICAL
DISCLOSURE.—The Comp-
troller General shall establish a system for public
disclosure by members of the Commission of fi-
nancial and other potential conflicts of interest
relating to such members.
‘‘(3) TERMS.—
‘‘(A) IN GENERAL.—The terms of members
of the Commission shall be for 3 years except
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that of the members first appointed, the Comp-
troller General shall designate—
‘‘(i) four to serve a term of 1 year;
‘‘(ii) four to serve a term of 2 years;
and
‘‘(iii) five to serve a term of 3 years.
‘‘(B) VACANCIES.—
‘‘(i) IN GENERAL.—A vacancy in the
Commission shall be filled in the same man-
ner in which the original appointment was
made.
‘‘(ii) APPOINTMENT.—Any member ap-
pointed to fill a vacancy occurring before
the expiration of the term for which the
member’s predecessor was appointed shall be
appointed only for the remainder of that
term.
‘‘(iii) TERMS.—A member may serve
after the expiration of that member’s term
until a successor has taken office.
‘‘(4) COMPENSATION.—
‘‘(A) MEMBERS.—While serving on the busi-
ness of the Commission (including travel time),
a member of the Commission—
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‘‘(i) shall be entitled to compensation
at the per diem equivalent of the rate pro-
vided for level IV of the Executive Schedule
under section 5315 of title 5, United States
Code; and
‘‘(ii) while so serving away from home
and the member’s regular place of business,
may be allowed travel expenses, as author-
ized by the Commission.
‘‘(B) TREATMENT.—For purposes of pay
(other than pay of members of the Commission)
and employment benefits, rights, and privileges,
all personnel of the Commission shall be treated
as if they were employees of the United States
Senate.
‘‘(5) CHAIR; VICE CHAIR.—The Comptroller Gen-
eral shall designate a member of the Commission, at
the time of appointment of the member as Chair and
a member as Vice Chair for that term of appoint-
ment, except that in the case of vacancy of the Chair
or Vice Chair, the Comptroller General may designate
another member for the remainder of that member’s
term.
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‘‘(6) MEETINGS.—The Commission shall meet at
the call of the Chair or upon the written request of
a majority of its members.
‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CONSULT-
ANTS.—Subject to such review as the Comptroller General
determines necessary to ensure the efficient administration
of the Commission, the Commission may—
‘‘(1) employ and fix the compensation of an Ex-
ecutive Director (subject to the approval of the Comp-
troller General) and such other personnel as may be
necessary to carry out the duties of the Commission
under this section (without regard to the provisions of
title 5, United States Code, governing appointments
in the competitive service);
‘‘(2) seek such assistance and support as may be
required in the performance of the duties of the Com-
mission under this section from appropriate Federal
departments and agencies;
‘‘(3) enter into contracts or make other arrange-
ments, as may be necessary for the conduct of the
work of the Commission (without regard to section
3709 of the Revised Statutes (41 U.S.C. 5));
‘‘(4) make advance, progress, and other pay-
ments which relate to the work of the Commission;
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‘‘(5) provide transportation and subsistence for
persons serving without compensation; and
‘‘(6) prescribe such rules and regulations as it
deems necessary with respect to the internal organiza-
tion and operation of the Commission.
‘‘(e) POWERS.—
‘‘(1) OBTAINING OFFICIAL DATA.—
‘‘(A) IN GENERAL.—The Commission may
secure directly from any department or agency of
the United States information necessary for the
Commission to carry the duties under this sec-
tion.
‘‘(B) REQUEST OF CHAIR.—Upon request of
the Chair, the head of that department or agency
shall furnish that information to the Commission
on an agreed upon schedule.
‘‘(2) DATA COLLECTION.—In order to carry out
the duties of the Commission under this section, the
Commission shall—
‘‘(A) use existing information, both pub-
lished and unpublished, where possible, collected
and assessed either by the staff of the Commis-
sion or under other arrangements made in ac-
cordance with this section;
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‘‘(B) carry out, or award grants or con-
tracts for, original research and experimentation,
where existing information is inadequate; and
‘‘(C) adopt procedures allowing any inter-
ested party to submit information for the Com-
mission’s use in making reports and rec-
ommendations.
‘‘(3) ACCESS
OF
GAO
TO
INFORMATION.—The
Comptroller General shall have unrestricted access to
all deliberations, records, and nonproprietary data
that pertains to the work of the Commission, imme-
diately upon request. The expense of providing such
information shall be borne by the General Accounting
Office.
‘‘(4) PERIODIC AUDIT.—The Commission shall be
subject to periodic audit by the Comptroller General.
‘‘(f) APPLICATION OF FACA.—Section 14 of the Fed-
eral Advisory Committee Act (5 U.S.C. App.) does not
apply to the Commission.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) 
REQUEST
FOR
APPROPRIATIONS.—The
Commission shall submit requests for appropriations
in the same manner as the Comptroller General sub-
mits requests for appropriations, but amounts appro-
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priated for the Commission shall be separate from
amounts appropriated for the Comptroller General.
‘‘(2) AUTHORIZATION.—There are authorized to
be appropriated such sums as may be necessary to
carry out the provisions of this section.’’.
(b) EFFECTIVE DATE.—The Comptroller General of
the United States shall appoint the initial members of the
Safety Net Organizations and Patient Advisory Commis-
sion established under subsection (a) not later than June
1, 2004.
SEC. 625. URBAN HEALTH PROVIDER ADJUSTMENT.
(a) IN GENERAL.—Beginning with fiscal year 2004,
notwithstanding section 1923(f) of the Social Security Act
(42 U.S.C. 1396r–4(f)) and subject to subsection (c), with
respect to a State, payment adjustments made under title
XIX of the Social Security Act (42 U.S.C. 1396 et seq.)
to a hospital described in subsection (b) shall be made with-
out regard to the DSH allotment limitation for the State
determined under section 1923(f) of that Act (42 U.S.C.
1396r–4(f)).
(b) HOSPITAL DESCRIBED.—A hospital is described in
this subsection if the hospital—
(1) is owned or operated by a State (as defined
for purposes of title XIX of the Social Security Act),
or by an instrumentality or a municipal govern-
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mental unit within a State (as so defined) as of Jan-
uary 1, 2003; and
(2) is located in Marion County, Indiana.
(c) LIMITATION.—The payment adjustment described
in subsection (a) for fiscal year 2004 and each fiscal year
thereafter shall not exceed 175 percent of the costs of fur-
nishing hospital services described in section 1923(g)(1)(A)
of the Social Security Act (42 U.S.C. 1396r–4(g)(1)(A)).
SEC. 626. COMMITTEE ON DRUG COMPOUNDING.
(a) ESTABLISHMENT.—The Secretary of Health and
Human Services shall establish an Committee on Drug
Compounding (referred to in this section as the ‘‘Com-
mittee’’) within the Food and Drug Administration on drug
compounding to ensure that patients are receiving nec-
essary, safe and accurate dosages of compounded drugs.
(b) MEMBERSHIP.—The membership of the Advisory
Committee shall be appointed by the Secretary of Health
and Human Services and shall include representatives of—
(1) the National Association of Boards of Phar-
macy;
(2) pharmacy groups;
(3) physician groups;
(4) consumer and patient advocate groups;
(5) the United States Pharmacopoeia; and
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(6) other individuals determined appropriate by
the Secretary.
(c) REPORT AND RECOMMENDATIONS.—Not later than
1 year after the date of enactment of this Act, the Committee
shall submit to the Secretary a report concerning the rec-
ommendations of the Committee to improve and protect pa-
tient safety.
(d) TERMINATION.—The Committee shall terminate on
the date that is 1 year after the date of enactment of this
Act.
SEC. 627. SENSE OF THE SENATE CONCERNING THE STRUC-
TURE OF MEDICARE REFORM AND THE PRE-
SCRIPTION DRUG BENEFIT.
(a) FINDINGS.—The Senate makes the following find-
ings:
(1) America’s seniors deserve a fiscally-strong
medicare system that fulfills its promise to them and
future retirees.
(2) The impending retirement of the ‘‘baby
boom’’ generation will dramatically increase the costs
of providing medicare benefits. Medicare costs will
double relative to the size of the economy from 2 per-
cent of GDP today to 4 percent in 2025 and double
again to 8 percent of GDP in 2075. This growth will
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accelerate substantially when Congress adds a nec-
essary prescription drug benefit.
(3) Medicare’s current structure does not have
the flexibility to quickly adapt to rapid advances in
modern health care. Medicare lags far behind other
insurers in providing prescription drug coverage, dis-
ease management programs, and host of other ad-
vances. Reforming medicare to create a more self-ad-
justing, innovative structure is essential to improve
medicare’s efficiency and the quality of the medical
care it provides.
(4) Private-sector choice for medicare bene-
ficiaries would provide two key benefits: It would be
tailored to the needs of America’s seniors, not the
Government, and would create a powerful incentive
for private-sector medicare plans to provide the best
quality health care to seniors at the most affordable
price.
(5) The method by which the national preferred
provider organizations in the Federal Employees
Health Benefits Program have been reimbursed has
proven to be a reliable and successful mechanism for
providing Members of Congress and Federal employ-
ees with excellent health care choices.
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(6) Unlike the medicare payment system, which
has had to be changed by Congress every few years,
the Federal Employees Health Benefits Program has
existed for 43 years with minimal changes from Con-
gress.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that medicare reform legislation should:
(1) Ensure that prescription drug coverage is di-
rected to those who need it most.
(2) Provide that Government contributions used
to support MedicareAdvantage plans are based on
market principles beginning in 2006 to ensure the
long- and short-term viability of such options for
America’s seniors.
(3) 
Develop 
a 
payment 
system 
for 
the
MedicareAdvantage preferred provider organizations
similar to the payment system used for the national
preferred provider organizations in the Federal Em-
ployees Health Benefits Program.
(4) Limit the addition of new unfunded obliga-
tions in the medicare program so that the long-term
solvency of this important program is not further
jeopardized.
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(5) Incorporate private sector, market-based ele-
ments, that do not rely on the inefficient medicare
price control structure.
(6) Keep the cost of structural changes and new
benefits within the $400,000,000,000 provided for
under the current Congressional Budget Resolution
for implementing medicare reform and providing a
prescription drug benefit.
(7) Preserve the current employer-sponsored re-
tiree health plans and not design a benefit which has
the unintended consequences of supplanting private
coverage.
(8) Incorporate regulatory reform proposals to
eliminate red tape and reduce costs.
(9) Restore the right of medicare beneficiaries
and their doctors to work together to provide services,
allow private fee for service plans to set their own
premiums, and permit seniors to add their own dol-
lars beyond the Government contribution.
SEC. 628. SENSE OF THE SENATE REGARDING THE ESTAB-
LISHMENT OF A NATIONWIDE PERMANENT
LIFESTYLE 
MODIFICATION 
PROGRAM 
FOR
MEDICARE BENEFICIARIES.
(a) FINDINGS.—Congress finds that:
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(1) Heart disease kills more than 500,000 Ameri-
cans per year.
(2) The number and costs of interventions for the
treatment of coronary disease are rising and cur-
rently cost the health care system $58,000,000,000 an-
nually.
(3) The Medicare Lifestyle Modification Program
has been operating throughout 12 States and has been
demonstrated to reduce the need for coronary proce-
dures by 88 percent per year.
(4) The Medicare Lifestyle Modification Program
is less expensive to deliver than interventional cardiac
procedures and could reduce cardiovascular expendi-
tures by $36,000,000,000 annually.
(5) Lifestyle choices such as diet and exercise af-
fect heart disease and heart disease outcomes by 50
percent or greater.
(6) Intensive lifestyle interventions which include
teams of nurses, doctors, exercise physiologists, reg-
istered dietitians, and behavioral health clinicians
have been demonstrated to reduce heart disease risk
factors and enhance heart disease outcomes dramati-
cally.
(7) The National Institutes of Health estimates
that 17,000,000 Americans have diabetes and the Cen-
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ters for Disease Control and Prevention estimates that
the number of Americans who have a diagnosis of di-
abetes increased 61 percent in the last decade and is
expected to more than double by 2050.
(8) Lifestyle modification programs are superior
to medication therapy for treating diabetes.
(9) Individuals with diabetes are now considered
to have coronary disease at the date of diagnosis of
their diabetic state.
(10) The Medicare Lifestyle Modification Pro-
gram has been an effective lifestyle program for the
reversal and treatment of heart disease.
(11) Men with prostate cancer have shown sig-
nificant improvement in prostate cancer markers
using a similar approach in lifestyle modification.
(12) These lifestyle changes are therefore likely to
affect other chronic disease states, in addition to heart
disease.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that—
(1) the Secretary of Health and Human Services
should carry out the demonstration project known as
the Lifestyle Modification Program Demonstration, as
described in the Health Care Financing Administra-
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tion Memorandum of Understanding entered into on
November 13, 2000, on a permanent basis;
(2) the project should include as many Medicare
beneficiaries as would like to participate in the
project on a voluntary basis; and
(3) the project should be conducted on a national
basis.
SEC. 629. SENSE OF THE SENATE ON PAYMENT REDUC-
TIONS UNDER MEDICARE PHYSICIAN FEE
SCHEDULE.
(a) FINDINGS.—Congress finds that—
(1) the fees medicare pays physicians were re-
duced by 5.4 percent across-the-board in 2002;
(2) recent action by Congress narrowly averted
another across-the-board reduction of 4.4 percent for
2003;
(3) based on current projections, the Centers for
Medicare & Medicaid Services (CMS) estimates that,
absent legislative or administrative action, fees will be
reduced across-the-board once again in 2004 by 4.2
percent;
(4) the prospect of continued payment reductions
under the medicare physician fee schedule for the fore-
seeable future threatens to destabilize an important
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element of the program, namely physician participa-
tion and willingness to accept medicare patients;
(5) the primary source of this instability is the
sustainable growth rate (SGR), a system of annual
spending targets for physicians’ services under medi-
care;
(6) the SGR system has a number of defects that
result in unrealistically low spending targets, such as
the use of the increase in the gross domestic product
(GDP) as a proxy for increases in the volume and in-
tensity of services provided by physicians, no toler-
ance for variance between growth in medicare bene-
ficiary health care costs and our Nation’s GDP, and
a requirement for immediate recoupment of the dif-
ference;
(7) both administrative and legislative action
are needed to return stability to the physician pay-
ment system;
(8) using the discretion given to it by medicare
law, CMS has included expenditures for prescription
drugs and biologicals administered incident to physi-
cians’ services under the annual spending targets
without making appropriate adjustments to the tar-
gets to reflect price increases in these drugs and
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biologicals or the growing reliance on such therapies
in the treatment of medicare patients;
(9) between 1996 and 2002, annual medicare
spending on these drugs grew from $1,800,000,000 to
$6,200,000,000, or from $55 per beneficiary to an es-
timated $187 per beneficiary;
(10) although physicians are responsible for pre-
scribing these drugs and biologicals, neither the price
of the drugs and biologicals, nor the standards of care
that encourage their use, are within the control of
physicians; and
(11) SGR target adjustments have not been made
for cost increases due to new coverage decisions and
new rules and regulations.
(b) SENSE OF THE SENATE.—It is the sense of the Sen-
ate that—
(1) the Center for Medicare & Medicaid Services
(CMS) should use its discretion to exclude drugs and
biologicals administered incident to physician services
from the sustainable growth rate (SGR) system;
(2) CMS should use its discretion to make SGR
target adjustments for new coverage decisions and
new rules and regulations; and
(3) in order to provide ample time for Congress
to consider more fundamental changes to the SGR
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system, the conferees on the Prescription Drug and
Medicare Improvement Act of 2003 should include in
the conference agreement a provision to establish a
minimum percentage update in physician fees for the
next 2 years and should consider adding provisions
that would mitigate the swings in payment, such as
establishing multi-year adjustments to recoup the
variance and creating ‘‘tolerance’’ corridors for vari-
ations around the update target trend.
SEC. 630. TEMPORARY SUSPENSION OF OASIS REQUIRE-
MENT FOR COLLECTION OF DATA ON NON-
MEDICARE AND NON-MEDICAID PATIENTS.
(a) IN GENERAL.—During the period described in sub-
section (b), the Secretary may not require, under section
4602(e) of the Balanced Budget Act of 1997 or otherwise
under OASIS, a home health agency to gather or submit
information that relates to an individual who is not eligible
for benefits under either title XVIII or title XIX of the So-
cial Security Act (such information in this section referred
to as ‘‘non-medicare/medicaid OASIS information’’).
(b) PERIOD OF SUSPENSION.—The period described in
this subsection—
(1) begins on the date of the enactment of this
Act; and
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(2) ends on the last day of the 2nd month begin-
ning after the date as of which the Secretary has pub-
lished final regulations regarding the collection and
use by the Centers for Medicare & Medicaid Services
of non-medicare/medicaid OASIS information fol-
lowing the submission of the report required under
subsection (c).
(c) REPORT.—
(1) STUDY.—The Secretary shall conduct a study
on how non-medicare/medicaid OASIS information is
and can be used by large home health agencies. Such
study shall examine—
(A) whether there are unique benefits from
the analysis of such information that cannot be
derived from other information available to, or
collected by, such agencies; and
(B) the value of collecting such information
by small home health agencies compared to the
administrative burden related to such collection.
In conducting the study the Secretary shall obtain
recommendations from quality assessment experts in
the use of such information and the necessity of small,
as well as large, home health agencies collecting such
information.
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(2) REPORT.—The Secretary shall submit to
Congress a report on the study conducted under para-
graph (1) by not later than 18 months after the date
of the enactment of this Act.
(d) CONSTRUCTION.—Nothing in this section shall be
construed as preventing home health agencies from col-
lecting non-medicare/medicaid OASIS information for
their own use.
SEC. 631. EMPLOYER FLEXIBILITY.
(a) MEDICARE.—Nothing in part D of title XVIII of
the Social Security Act, as added by section 101, shall be
construed as—
(1) preventing employment-based retiree health
coverage (as defined in section 1860D–20(e)(4)(B) of
such Act, as so added) from providing coverage that
is supplemental to the benefits provided under a
Medicare Prescription Drug plan under such part or
a MedicareAdvantage plan under part C of such title,
as amended by this Act; or
(2) requiring employment-based retiree health
coverage (as so defined) that provides medical benefits
to retired participants who are not eligible for med-
ical benefits under title XVIII of the Social Security
Act or under a plan maintained by a State or an
agency thereof to provide medical benefits, or the
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same medical benefits, to retired participants who are
so eligible.
(b) ADEA.—
(1) IN GENERAL.—Section 4(l) of the Age Dis-
crimination in Employment Act of 1967 (29 U.S.C.
623(l)) is amended by adding at the end the fol-
lowing:
‘‘(4) An employee benefit plan (as defined in sec-
tion 3(3) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1002(3))) shall not be
treated as violating subsection (a), (b), (c), or (e) sole-
ly because the plan provides medical benefits to re-
tired participants who are not eligible for medical
benefits under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) or under a plan maintained
by a State or an agency thereof, but does not provide
medical benefits, or the same medical benefits, to re-
tired participants who are so eligible.’’
(2) EFFECTIVE DATE.—The amendment made by
this subsection shall apply as of the date of the enact-
ment of this Act.
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SEC. 632. ONE HUNDRED PERCENT FMAP FOR MEDICAL AS-
SISTANCE PROVIDED TO A NATIVE HAWAIIAN
THROUGH A FEDERALLY-QUALIFIED HEALTH
CENTER OR A NATIVE HAWAIIAN HEALTH
CARE SYSTEM UNDER THE MEDICAID PRO-
GRAM.
(a) MEDICAID.—Section 1905(b) of the Social Security
Act (42 U.S.C. 1396d(b)) is amended, in the third sentence,
by inserting ‘‘, and with respect to medical assistance pro-
vided to a Native Hawaiian (as defined in section 12 of
the Native Hawaiian Health Care Improvement Act)
through a federally-qualified health center or a Native Ha-
waiian health care system (as so defined) whether directly,
by referral, or under contract or other arrangement between
a federally-qualified health center or a Native Hawaiian
health care system and another health care provider’’ before
the period.
(b) EFFECTIVE DATE.—The amendment made by this
section applies to medical assistance provided on or after
the date of enactment of this Act.
SEC. 633. EXTENSION OF MORATORIUM.
(a) IN GENERAL.—Section 6408(a)(3) of the Omnibus
Budget Reconciliation Act of 1989, as amended by section
13642 of the Omnibus Budget Reconciliation Act of 1993
and section 4758 of the Balanced Budget Act of 1997, is
amended—
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(1) by striking ‘‘until December 31, 2002’’, and
(2) by striking ‘‘Kent Community Hospital
Complex in Michigan or.’’
(b) EFFECTIVE DATES.—
(1) PERMANENT
EXTENSION.—The amendment
made by subsection (a)(1) shall take effect as if in-
cluded in the amendment made by section 4758 of the
Balanced Budget Act of 1997.
(2) MODIFICATION.—The amendment made by
subsection (a)(2) shall take effect on the date of enact-
ment of this Act.
SEC. 634. GAO STUDY OF PHARMACEUTICAL PRICE CON-
TROLS AND PATENT PROTECTIONS IN THE G–
7 COUNTRIES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study of price controls imposed on
pharmaceuticals in France, Germany, Italy, Japan, the
United Kingdom and Canada to review the impact such
regulations have on consumers, including American con-
sumers, and on innovation in medicine. The study shall in-
clude the following:
(1) The pharmaceutical price control structure
in each country for a wide range of pharmaceuticals,
compared with average pharmaceutical prices paid by
Americans covered by private sector health insurance.
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(2) The proportion of the cost for innovation
borne by American consumers, compared with con-
sumers in the other 6 countries.
(3) A review of how closely the observed prices in
regulated markets correspond to the prices that effi-
ciently 
distribute 
common 
costs 
of 
production
(‘‘Ramsey prices’’).
(4) A review of any peer-reviewed literature that
might show the health consequences to patients in the
listed countries that result from the absence or de-
layed introduction of medicines, including the cost of
not having access to medicines, in terms of lower life
expectancy and lower quality of health.
(5) The impact on American consumers, in
terms of reduced research into new or improved phar-
maceuticals (including the cost of delaying the intro-
duction of a significant advance in certain major dis-
eases), if similar price controls were adopted in the
United States.
(6) The existing standards under international
conventions, including the World Trade Organization
and the North American Free Trade Agreement, re-
garding regulated pharmaceutical prices, including
any restrictions on anti-competitive laws that might
apply to price regulations and how economic harm
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caused to consumers in markets without price regula-
tions may be remedied.
(7) In parallel trade regimes, how much of the
price difference between countries in the European
Union is captured by middlemen and how much goes
to benefit patients and health systems where parallel
importing is significant.
(8) How much cost is imposed on the owner of
a property right from counterfeiting and from inter-
national violations of intellectual property rights for
prescription medicines.
(b) REPORT.—Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report on the study con-
ducted under subsection (a).
SEC. 635. SAFETY NET ORGANIZATIONS AND PATIENT ADVI-
SORY COMMISSION.
(a) IN GENERAL.—Title XI (42 U.S.C. 1320 et seq.)
is amended by adding at the end the following new part:
‘‘PART D—SAFETY NET ORGANIZATIONS AND PATIENT
ADVISORY COMMISSION
‘‘SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY
COMMISSION
‘‘SEC. 1181. (a) ESTABLISHMENT.—There is hereby es-
tablished the Safety Net Organizations and Patient Advi-
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sory Commission (in this section referred to as the ‘Com-
mission’).
‘‘(b) REVIEW OF HEALTH CARE SAFETY NET PRO-
GRAMS AND REPORTING REQUIREMENTS.—
‘‘(1) REVIEW.—The Commission shall conduct
an ongoing review of the health care safety net pro-
grams (as described in paragraph (3)(C)) by—
‘‘(A) monitoring each health care safety net
program to document and analyze the effects of
changes in these programs on the core health care
safety net;
‘‘(B) evaluating the impact of the Emer-
gency Medical Treatment and Labor Act, the
Health Insurance Portability and Accountability
Act of 1996, the Balanced Budget Act of 1997,
the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999, the Medicare,
Medicaid, and SCHIP Benefits Protection and
Improvement Act of 2000, Prescription Drug
and Medicare Improvement Act of 2003, and
other forces on the capacity of the core health
care safety net to continue their roles in the core
health care safety net system to care for unin-
sured individuals, medicaid beneficiaries, and
other vulnerable populations;
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‘‘(C) monitoring existing data sets to assess
the status of the core health care safety net and
health outcomes for vulnerable populations;
‘‘(D) wherever possible, linking and inte-
grating existing data systems to enhance the
ability of the core health care safety net to track
changes in the status of the core health care safe-
ty net and health outcomes for vulnerable popu-
lations;
‘‘(E) supporting the development of new
data systems where existing data are insufficient
or inadequate;
‘‘(F) developing criteria and indicators of
impending core health care safety net failure;
‘‘(G) establishing an early-warning system
to identify impending failures of core health care
safety net systems and providers;
‘‘(H) providing accurate and timely infor-
mation to Federal, State, and local policymakers
on the indicators that may lead to the failure of
the core health care safety net and an estimate
of the projected consequences of such failures and
the impact of such a failure on the community;
‘‘(I) monitoring and providing oversight for
the transition of individuals receiving supple-
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mental security income benefits, medical assist-
ance under title XIX, or child health assistance
under title XXI who enroll with a managed care
entity (as defined in section 1932(a)(1)(B)), in-
cluding the review of—
‘‘(i) the degree to which health plans
have the capacity (including case manage-
ment and management information system
infrastructure) to provide quality managed
care services to such an individual;
‘‘(ii) the degree to which these plans
may be overburdened by adverse selection;
and
‘‘(iii) the degree to which emergency
departments are used by enrollees of these
plans; and
‘‘(J) identifying and disseminating the best
practices for more effective application of the les-
sons that have been learned.
‘‘(2) REPORTS.—
‘‘(A) ANNUAL
REPORTS.—Not later than
June 1 of each year (beginning with 2005), the
Commission shall, based on the review conducted
under paragraph (1), submit to the appropriate
committees of Congress a report on—
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‘‘(i) the health care needs of the unin-
sured; and
‘‘(ii) the financial and infrastructure
stability of the Nation’s core health care
safety net.
‘‘(B) AGENDA AND ADDITIONAL REVIEWS.—
‘‘(i) AGENDA.—The Chair of the Com-
mission shall consult periodically with the
Chairpersons and Ranking Minority Mem-
bers of the appropriate committees of Con-
gress regarding the Commission’s agenda
and progress toward achieving the agenda.
‘‘(ii) 
ADDITIONAL
REVIEWS.—The
Commission shall conduct additional re-
views and submit additional reports to the
appropriate committees of Congress on top-
ics relating to the health care safety net pro-
grams under the following circumstances:
‘‘(I) If requested by the Chair-
persons or Ranking Minority Members
of such committees.
‘‘(II) If the Commission deems
such additional reviews and reports
appropriate.
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‘‘(C) 
AVAILABILITY
OF
REPORTS.—The
Commission shall transmit to the Comptroller
General and the Secretary a copy of each report
submitted under this subsection and shall make
such reports available to the public.
‘‘(3) DEFINITIONS.—In this section:
‘‘(A) APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘appropriate committees of
Congress’ means the Committees on Ways and
Means and Energy and Commerce of the House
of Representatives and the Committees on Fi-
nance and Health, Education, Labor, and Pen-
sions of the Senate.
‘‘(B) CORE HEALTH CARE SAFETY NET.—
The term ‘core health care safety net’ means any
health care provider that—
‘‘(i) by legal mandate or explicitly
adopted mission, offers access to health care
services to patients, regardless of the ability
of the patient to pay for such services; and
‘‘(ii) has a case mix that is substan-
tially comprised of patients who are unin-
sured, covered under the medicaid program,
covered under any other public health care
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program, or are otherwise vulnerable popu-
lations.
Such term includes disproportionate share hos-
pitals, Federally qualified health centers, other
Federal, State, and locally supported clinics,
rural health clinics, local health departments,
and providers covered under the Emergency
Medical Treatment and Labor Act.
‘‘(C) HEALTH
CARE
SAFETY
NET
PRO-
GRAMS.—The term ‘health care safety net pro-
grams’ includes the following:
‘‘(i) MEDICAID.—The medicaid pro-
gram under title XIX.
‘‘(ii) SCHIP.—The State children’s
health insurance program under title XXI.
‘‘(iii) MATERNAL AND CHILD HEALTH
SERVICES
BLOCK
GRANT
PROGRAM.—The
maternal and child health services block
grant program under title V.
‘‘(iv) FQHC PROGRAMS.—Each feder-
ally funded program under which a health
center (as defined in section 330(1) of the
Public Health Service Act), a Federally
qualified health center (as defined in section
1861(aa)(4)), 
or 
a 
Federally-qualified
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health 
center 
(as 
defined 
in 
section
1905(l)(2)(B)) receives funds.
‘‘(v) RHC PROGRAMS.—Each federally
funded program under which a rural health
clinic (as defined in section 1861(aa)(4) or
1905(l)(1)) receives funds.
‘‘(vi) DSH 
PAYMENT
PROGRAMS.—
Each federally funded program under which
a disproportionate share hospital receives
funds.
‘‘(vii) EMERGENCY
MEDICAL
TREAT-
MENT
AND
ACTIVE
LABOR
ACT.—All care
provided under section 1867 for the unin-
sured, underinsured, beneficiaries under
title XIX, and other vulnerable individuals.
‘‘(viii) OTHER HEALTH CARE SAFETY
NET PROGRAMS.—Such term also includes
any other health care program that the
Commission determines to be appropriate.
‘‘(D) 
VULNERABLE
POPULATIONS.—The
term ‘vulnerable populations’ includes uninsured
and underinsured individuals, low-income indi-
viduals, farm workers, homeless individuals, in-
dividuals with disabilities, individuals with HIV
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or AIDS, and such other individuals as the Com-
mission may designate.
‘‘(c) MEMBERSHIP.—
‘‘(1) NUMBER AND APPOINTMENT.—The Commis-
sion shall be composed of 13 members appointed by
the Comptroller General of the United States (in this
section referred to as the ‘Comptroller General’), in
consultation with the appropriate committees of Con-
gress.
‘‘(2) QUALIFICATIONS.—
‘‘(A) IN GENERAL.—The membership of the
Commission shall include individuals with na-
tional recognition for their expertise in health fi-
nance and economics, health care safety net re-
search and program management, actuarial
science, health facility management, health plans
and integrated delivery systems, reimbursement
of health facilities, allopathic and osteopathic
medicine (including emergency medicine), and
other providers of health services, and other re-
lated fields, who provide a mix of different pro-
fessionals, broad geographic representation, and
a balance between urban and rural representa-
tives.
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‘‘(B) INCLUSION.—The membership of the
Commission shall include health professionals,
employers, 
third-party 
payers, 
individuals
skilled in the conduct and interpretation of bio-
medical, health services, and health economics re-
search and expertise in outcomes and effective-
ness research and technology assessment. Such
membership shall also include recipients of care
from core health care safety net and individuals
who provide and manage the delivery of care by
the core health care safety net.
‘‘(C) MAJORITY
NONPROVIDERS.—Individ-
uals who are directly involved in the provision,
or management of the delivery, of items and
services covered under the health care safety net
programs shall not constitute a majority of the
membership of the Commission.
‘‘(D) ETHICAL
DISCLOSURE.—The Comp-
troller General shall establish a system for public
disclosure by members of the Commission of fi-
nancial and other potential conflicts of interest
relating to such members.
‘‘(3) TERMS.—
‘‘(A) IN GENERAL.—The terms of members
of the Commission shall be for 3 years except
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HR 1 EAS
that of the members first appointed, the Comp-
troller General shall designate—
‘‘(i) four to serve a term of 1 year;
‘‘(ii) four to serve a term of 2 years;
and
‘‘(iii) five to serve a term of 3 years.
‘‘(B) VACANCIES.—
‘‘(i) IN GENERAL.—A vacancy in the
Commission shall be filled in the same man-
ner in which the original appointment was
made.
‘‘(ii) APPOINTMENT.—Any member ap-
pointed to fill a vacancy occurring before
the expiration of the term for which the
member’s predecessor was appointed shall be
appointed only for the remainder of that
term.
‘‘(iii) TERMS.—A member may serve
after the expiration of that member’s term
until a successor has taken office.
‘‘(4) COMPENSATION.—
‘‘(A) MEMBERS.—While serving on the busi-
ness of the Commission (including travel time),
a member of the Commission—
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‘‘(i) shall be entitled to compensation
at the per diem equivalent of the rate pro-
vided for level IV of the Executive Schedule
under section 5315 of title 5, United States
Code; and
‘‘(ii) while so serving away from home
and the member’s regular place of business,
may be allowed travel expenses, as author-
ized by the Commission.
‘‘(B) TREATMENT.—For purposes of pay
(other than pay of members of the Commission)
and employment benefits, rights, and privileges,
all personnel of the Commission shall be treated
as if they were employees of the United States
Senate.
‘‘(5) CHAIR; VICE CHAIR.—The Comptroller Gen-
eral shall designate a member of the Commission, at
the time of appointment of the member as Chair and
a member as Vice Chair for that term of appoint-
ment, except that in the case of vacancy of the Chair
or Vice Chair, the Comptroller General may designate
another member for the remainder of that member’s
term.
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‘‘(6) MEETINGS.—The Commission shall meet at
the call of the Chair or upon the written request of
a majority of its members.
‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CONSULT-
ANTS.—Subject to such review as the Comptroller General
determines necessary to ensure the efficient administration
of the Commission, the Commission may—
‘‘(1) employ and fix the compensation of an Ex-
ecutive Director (subject to the approval of the Comp-
troller General) and such other personnel as may be
necessary to carry out the duties of the Commission
under this section (without regard to the provisions of
title 5, United States Code, governing appointments
in the competitive service);
‘‘(2) seek such assistance and support as may be
required in the performance of the duties of the Com-
mission under this section from appropriate Federal
departments and agencies;
‘‘(3) enter into contracts or make other arrange-
ments, as may be necessary for the conduct of the
work of the Commission (without regard to section
3709 of the Revised Statutes (41 U.S.C. 5));
‘‘(4) make advance, progress, and other pay-
ments which relate to the work of the Commission;
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HR 1 EAS
‘‘(5) provide transportation and subsistence for
persons serving without compensation; and
‘‘(6) prescribe such rules and regulations as it
deems necessary with respect to the internal organiza-
tion and operation of the Commission.
‘‘(e) POWERS.—
‘‘(1) OBTAINING OFFICIAL DATA.—
‘‘(A) IN GENERAL.—The Commission may
secure directly from any department or agency of
the United States information necessary for the
Commission to carry the duties under this sec-
tion.
‘‘(B) REQUEST OF CHAIR.—Upon request of
the Chair, the head of that department or agency
shall furnish that information to the Commission
on an agreed upon schedule.
‘‘(2) DATA COLLECTION.—In order to carry out
the duties of the Commission under this section, the
Commission shall—
‘‘(A) use existing information, both pub-
lished and unpublished, where possible, collected
and assessed either by the staff of the Commis-
sion or under other arrangements made in ac-
cordance with this section;
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HR 1 EAS
‘‘(B) carry out, or award grants or con-
tracts for, original research and experimentation,
where existing information is inadequate; and
‘‘(C) adopt procedures allowing any inter-
ested party to submit information for the Com-
mission’s use in making reports and rec-
ommendations.
‘‘(3) ACCESS
OF
GAO
TO
INFORMATION.—The
Comptroller General shall have unrestricted access to
all deliberations, records, and nonproprietary data
that pertains to the work of the Commission, imme-
diately upon request. The expense of providing such
information shall be borne by the General Accounting
Office.
‘‘(4) PERIODIC AUDIT.—The Commission shall be
subject to periodic audit by the Comptroller General.
‘‘(f) APPLICATION OF FACA.—Section 14 of the Fed-
eral Advisory Committee Act (5 U.S.C. App.) does not
apply to the Commission.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) 
REQUEST
FOR
APPROPRIATIONS.—The
Commission shall submit requests for appropriations
in the same manner as the Comptroller General sub-
mits requests for appropriations, but amounts appro-
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HR 1 EAS
priated for the Commission shall be separate from
amounts appropriated for the Comptroller General.
‘‘(2) AUTHORIZATION.—There are authorized to
be appropriated such sums as may be necessary to
carry out the provisions of this section.’’.
(b) EFFECTIVE DATE.—The Comptroller General of
the United States shall appoint the initial members of the
Safety Net Organizations and Patient Advisory Commis-
sion established under subsection (a) not later than June
1, 2004.
SEC. 636. ESTABLISHMENT OF PROGRAM TO PREVENT
ABUSE OF NURSING FACILITY RESIDENTS.
(a) IN GENERAL.—
(1) SCREENING OF SKILLED NURSING FACILITY
AND NURSING FACILITY PROVISIONAL EMPLOYEES.—
(A) MEDICARE PROGRAM.—Section 1819(b)
(42 U.S.C. 1395i–3(b)) is amended by adding at
the end the following:
‘‘(8) SCREENING OF SKILLED NURSING FACILITY
WORKERS.—
‘‘(A) BACKGROUND
CHECKS
OF
PROVI-
SIONAL
EMPLOYEES.—Subject to subparagraph
(B)(ii), after a skilled nursing facility selects an
individual for a position as a skilled nursing fa-
cility worker, the facility, prior to employing
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HR 1 EAS
such worker in a status other than a provisional
status to the extent permitted under subpara-
graph (B)(ii), shall—
‘‘(i) give such worker written notice
that the facility is required to perform back-
ground checks with respect to provisional
employees;
‘‘(ii) require, as a condition of employ-
ment, that such worker—
‘‘(I) provide a written statement
disclosing any conviction for a relevant
crime or finding of patient or resident
abuse;
‘‘(II) provide a statement signed
by the worker authorizing the facility
to request the search and exchange of
criminal records;
‘‘(III) provide in person to the fa-
cility a copy of the worker’s finger-
prints or thumb print, depending upon
available technology; and
‘‘(IV) provide any other identi-
fication information the Secretary may
specify in regulation;
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HR 1 EAS
‘‘(iii) initiate a check of the data col-
lection system established under section
1128E in accordance with regulations pro-
mulgated by the Secretary to determine
whether such system contains any disquali-
fying information with respect to such
worker; and
‘‘(iv) if that system does not contain
any such disqualifying information—
‘‘(I) request through the appro-
priate State agency that the State ini-
tiate a State and national criminal
background check on such worker in
accordance with the provisions of sub-
section (e)(6); and
‘‘(II) submit to such State agency
the information described in subclauses
(II) through (IV) of clause (ii) not
more than 7 days (excluding Satur-
days, Sundays, and legal public holi-
days under section 6103(a) of title 5,
United States Code) after completion of
the check against the system initiated
under clause (iii).
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HR 1 EAS
‘‘(B) PROHIBITION ON HIRING OF ABUSIVE
WORKERS.—
‘‘(i) IN GENERAL.—A skilled nursing
facility may not knowingly employ any
skilled nursing facility worker who has any
conviction for a relevant crime or with re-
spect to whom a finding of patient or resi-
dent abuse has been made.
‘‘(ii) 
PROVISIONAL
EMPLOYMENT.—
After complying with the requirements of
clauses (i), (ii), and (iii) of subparagraph
(A), a skilled nursing facility may provide
for a provisional period of employment for
a skilled nursing facility worker pending
completion of the check against the data col-
lection system described under subpara-
graph (A)(iii) and the background check de-
scribed under subparagraph (A)(iv). Subject
to clause (iii), such facility shall maintain
direct supervision of the covered individual
during the worker’s provisional period of
employment.
‘‘(iii) EXCEPTION FOR SMALL RURAL
SKILLED NURSING FACILITIES.—In the case
of a small rural skilled nursing facility (as
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HR 1 EAS
defined by the Secretary), the Secretary
shall provide, by regulation after consulta-
tion with providers of skilled nursing facil-
ity services and entities representing bene-
ficiaries of such services, for an appropriate
level of supervision with respect to any pro-
visional employees employed by the facility
in accordance with clause (ii). Such regula-
tion should encourage the provision of direct
supervision of such employees whenever
practicable with respect to such a facility
and if such supervision would not impose
an unreasonable cost or other burden on the
facility.
‘‘(C) 
REPORTING
REQUIREMENTS.—A
skilled nursing facility shall report to the State
any instance in which the facility determines
that a skilled nursing facility worker has com-
mitted an act of resident neglect or abuse or mis-
appropriation of resident property in the course
of employment by the facility.
‘‘(D) USE OF INFORMATION.—
‘‘(i) IN GENERAL.—A skilled nursing
facility that obtains information about a
skilled nursing facility worker pursuant to
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HR 1 EAS
clauses (iii) and (iv) of subparagraph (A)
may use such information only for the pur-
pose of determining the suitability of the
worker for employment.
‘‘(ii) IMMUNITY
FROM
LIABILITY.—A
skilled nursing facility that, in denying em-
ployment for an individual selected for hir-
ing as a skilled nursing facility worker (in-
cluding during the period described in sub-
paragraph (B)(ii)), reasonably relies upon
information about such individual provided
by the State pursuant to subsection (e)(6) or
section 1128E shall not be liable in any ac-
tion brought by such individual based on
the employment determination resulting
from the information.
‘‘(iii) CRIMINAL
PENALTY.—Whoever
knowingly violates the provisions of clause
(i) shall be fined in accordance with title
18, United States Code, imprisoned for not
more than 2 years, or both.
‘‘(E) CIVIL PENALTY.—
‘‘(i) IN GENERAL.—A skilled nursing
facility that violates the provisions of this
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HR 1 EAS
paragraph shall be subject to a civil penalty
in an amount not to exceed—
‘‘(I) for the first such violation,
$2,000; and
‘‘(II) for the second and each sub-
sequent violation within any 5-year
period, $5,000.
‘‘(ii) KNOWING RETENTION OF WORK-
ER.—In addition to any civil penalty
under clause (i), a skilled nursing facility
that—
‘‘(I) knowingly continues to em-
ploy a skilled nursing facility worker
in violation of subparagraph (A) or
(B); or
‘‘(II) knowingly fails to report a
skilled nursing facility worker under
subparagraph (C),
shall be subject to a civil penalty in an
amount not to exceed $5,000 for the first
such violation, and $10,000 for the second
and each subsequent violation within any 5-
year period.
‘‘(F) DEFINITIONS.—In this paragraph:
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HR 1 EAS
(g)(1)(C) or a Federal agency that a skilled
nursing facility worker has committed—
‘‘(I) an act of patient or resident
abuse or neglect or a misappropriation
of patient or resident property; or
‘‘(II) such other types of acts as
the Secretary may specify in regula-
tions.
‘‘(iv) 
SKILLED
NURSING
FACILITY
WORKER.—The term ‘skilled nursing facil-
ity worker’ means any individual (other
than a volunteer) that has access to a pa-
tient of a skilled nursing facility under an
employment or other contract, or both, with
such facility. Such term includes individ-
uals who are licensed or certified by the
State to provide such services, and non-
licensed individuals providing such services,
as defined by the Secretary, including nurse
assistants, nurse aides, home health aides,
and personal care workers and attendants.’’.
(B) MEDICAID PROGRAM.—Section 1919(b)
(42 U.S.C. 1396r(b)) is amended by adding at
the end the following new paragraph:
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933
HR 1 EAS
‘‘(8) SCREENING OF NURSING FACILITY WORK-
ERS.—
‘‘(A) BACKGROUND
CHECKS
ON
PROVI-
SIONAL
EMPLOYEES.—Subject to subparagraph
(B)(ii), after a nursing facility selects an indi-
vidual for a position as a nursing facility work-
er, the facility, prior to employing such worker
in a status other than a provisional status to the
extent permitted under subparagraph (B)(ii),
shall—
‘‘(i) give the worker written notice that
the facility is required to perform back-
ground checks with respect to provisional
employees;
‘‘(ii) require, as a condition of employ-
ment, that such worker—
‘‘(I) provide a written statement
disclosing any conviction for a relevant
crime or finding of patient or resident
abuse;
‘‘(II) provide a statement signed
by the worker authorizing the facility
to request the search and exchange of
criminal records;
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HR 1 EAS
‘‘(III) provide in person to the fa-
cility a copy of the worker’s finger-
prints or thumb print, depending upon
available technology; and
‘‘(IV) provide any other identi-
fication information the Secretary may
specify in regulation;
‘‘(iii) initiate a check of the data col-
lection system established under section
1128E in accordance with regulations pro-
mulgated by the Secretary to determine
whether such system contains any disquali-
fying information with respect to such
worker; and
‘‘(iv) if that system does not contain
any such disqualifying information—
‘‘(I) request through the appro-
priate State agency that the State ini-
tiate a State and national criminal
background check on such worker in
accordance with the provisions of sub-
section (e)(8); and
‘‘(II) submit to such State agency
the information described in subclauses
(II) through (IV) of clause (ii) not
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HR 1 EAS
more than 7 days (excluding Satur-
days, Sundays, and legal public holi-
days under section 6103(a) of title 5,
United States Code) after completion of
the check against the system initiated
under clause (iii).
‘‘(B) PROHIBITION ON HIRING OF ABUSIVE
WORKERS.—
‘‘(i) IN GENERAL.—A nursing facility
may not knowingly employ any nursing fa-
cility worker who has any conviction for a
relevant crime or with respect to whom a
finding of patient or resident abuse has
been made.
‘‘(ii) 
PROVISIONAL
EMPLOYMENT.—
After complying with the requirements of
clauses (i), (ii), and (iii) of subparagraph
(A), a nursing facility may provide for a
provisional period of employment for a
nursing facility worker pending completion
of the check against the data collection sys-
tem described under subparagraph (A)(iii)
and the background check described under
subparagraph (A)(iv). Subject to clause
(iii), such facility shall maintain direct su-
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HR 1 EAS
pervision of the worker during the worker’s
provisional period of employment.
‘‘(iii) EXCEPTION FOR SMALL RURAL
NURSING FACILITIES.—
‘‘(I) IN GENERAL.—In the case of
a small rural nursing facility (as de-
fined by the Secretary), the Secretary
shall provide, by regulation after con-
sultation with providers of nursing fa-
cility services and entities representing
beneficiaries of such services, for an
appropriate level of supervision with
respect to any provisional employees
employed by the facility in accordance
with 
clause 
(ii). 
Such 
regulation
should encourage the provision of di-
rect supervision of such employees
whenever practicable with respect to
such a facility and if such supervision
would not impose an unreasonable cost
or other burden on the facility.
‘‘(C) REPORTING REQUIREMENTS.—A nurs-
ing facility shall report to the State any instance
in which the facility determines that a nursing
facility worker has committed an act of resident
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HR 1 EAS
neglect or abuse or misappropriation of resident
property in the course of employment by the fa-
cility.
‘‘(D) USE OF INFORMATION.—
‘‘(i) IN GENERAL.—A nursing facility
that obtains information about a nursing
facility worker pursuant to clauses (iii) and
(iv) of subparagraph (A) may use such in-
formation only for the purpose of deter-
mining the suitability of the worker for em-
ployment.
‘‘(ii) IMMUNITY
FROM
LIABILITY.—A
nursing facility that, in denying employ-
ment for an individual selected for hiring
as a nursing facility worker (including dur-
ing the period described in subparagraph
(B)(ii)), reasonably relies upon information
about such individual provided by the State
pursuant to subsection (e)(6) or section
1128E shall not be liable in any action
brought by such individual based on the em-
ployment determination resulting from the
information.
‘‘(iii) CRIMINAL
PENALTY.—Whoever
knowingly violates the provisions of clause
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HR 1 EAS
(i) shall be fined in accordance with title
18, United States Code, imprisoned for not
more than 2 years, or both.
‘‘(E) CIVIL PENALTY.—
‘‘(i) IN GENERAL.—A nursing facility
that violates the provisions of this para-
graph shall be subject to a civil penalty in
an amount not to exceed—
‘‘(I) for the first such violation,
$2,000; and
‘‘(II) for the second and each sub-
sequent violation within any 5-year
period, $5,000.
‘‘(ii) KNOWING RETENTION OF WORK-
ER.—In addition to any civil penalty
under clause (i), a nursing facility that—
‘‘(I) knowingly continues to em-
ploy a nursing facility worker in vio-
lation of subparagraph (A) or (B); or
‘‘(II) knowingly fails to report a
nursing facility worker under subpara-
graph (C),
shall be subject to a civil penalty in an
amount not to exceed $5,000 for the first
such violation, and $10,000 for the second
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939
HR 1 EAS
and each subsequent violation within any 5-
year period.
‘‘(F) DEFINITIONS.—In this paragraph:
‘‘(i) CONVICTION
FOR
A
RELEVANT
CRIME.—The term ‘conviction for a relevant
crime’ means any Federal or State criminal
conviction for—
‘‘(I) any offense described in
paragraphs (1) through (4) of section
1128(a); and
‘‘(II) such other types of offenses
as the Secretary may specify in regula-
tions, taking into account the severity
and relevance of such offenses, and
after consultation with representatives
of long-term care providers, representa-
tives of long-term care employees, con-
sumer advocates, and appropriate Fed-
eral and State officials.
‘‘(ii) DISQUALIFYING INFORMATION.—
The term ‘disqualifying information’ means
information about a conviction for a rel-
evant crime or a finding of patient or resi-
dent abuse.
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940
HR 1 EAS
‘‘(iii) FINDING OF PATIENT OR RESI-
DENT ABUSE.—The term ‘finding of patient
or resident abuse’ means any substantiated
finding by a State agency under subsection
(g)(1)(C) or a Federal agency that a nurs-
ing facility worker has committed—
‘‘(I) an act of patient or resident
abuse or neglect or a misappropriation
of patient or resident property; or
‘‘(II) such other types of acts as
the Secretary may specify in regula-
tions.
‘‘(iv) NURSING
FACILITY
WORKER.—
The term ‘nursing facility worker’ means
any individual (other than a volunteer)
that has access to a patient of a nursing fa-
cility under an employment or other con-
tract, or both, with such facility. Such term
includes individuals who are licensed or
certified by the State to provide such serv-
ices, and nonlicensed individuals providing
such services, as defined by the Secretary,
including nurse assistants, nurse aides,
home health aides, and personal care work-
ers and attendants.’’.
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HR 1 EAS
(2) FEDERAL RESPONSIBILITIES.—
(A) DEVELOPMENT OF STANDARD FEDERAL
AND
STATE
BACKGROUND
CHECK
FORM.—The
Secretary of Health and Human Services, in
consultation with the Attorney General and rep-
resentatives of appropriate State agencies, shall
develop a model form that a provisional em-
ployee at a nursing facility may complete and
Federal and State agencies may use to conduct
the criminal background checks required under
sections 1819(b)(8) and 1919(b)(8) of the Social
Security Act (42 U.S.C. 1395i–3(b), 1396r(b))
(as added by this section).
(B) PERIODIC EVALUATION.—The Secretary
of Health and Human Services, in consultation
with the Attorney General, periodically shall
evaluate the background check system imposed
under sections 1819(b)(8) and 1919(b)(8) of the
Social Security Act (42 U.S.C. 1395i–3(b),
1396r(b)) (as added by this section) and shall
implement changes, as necessary, based on avail-
able technology, to make the background check
system more efficient and able to provide a more
immediate response to long-term care providers
using the system.
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HR 1 EAS
(3) NO
PREEMPTION
OF
STRICTER
STATE
LAWS.—Nothing in section 1819(b)(8) or 1919(b)(8)
of the Social Security Act (42 U.S.C. 1395i–3(b)(8),
1396r(b)(8)) (as so added) shall be construed to super-
sede any provision of State law that—
(A) specifies a relevant crime for purposes
of prohibiting the employment of an individual
at a long-term care facility (as defined in section
1128E(g)(6) of the Social Security Act (as added
by subsection (e)) that is not included in the list
of such crimes specified in such sections or in
regulations promulgated by the Secretary of
Health and Human Services to carry out such
sections; or
(B) requires a long-term care facility (as so
defined) to conduct a background check prior to
employing an individual in an employment po-
sition that is not included in the positions for
which a background check is required under such
sections.
(4) TECHNICAL
AMENDMENTS.—Effective as if
included in the enactment of section 941 of BIPA
(114 Stat. 2763A–585), sections 1819(b) and 1919(b)
(42 U.S.C. 1395i–3(b), 1396r(b)), as amended by such
section 941 are each amended by redesignating the
†
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HR 1 EAS
paragraph (8) added by such section as paragraph
(9).
(b) FEDERAL
AND
STATE
REQUIREMENTS
CON-
CERNING BACKGROUND CHECKS.—
(1) MEDICARE.—Section 1819(e) (42 U.S.C.
1395i–3(e)) is amended by adding at the end the fol-
lowing:
‘‘(6) FEDERAL AND STATE REQUIREMENTS CON-
CERNING
CRIMINAL
BACKGROUND
CHECKS
ON
SKILLED NURSING FACILITY EMPLOYEES.—
‘‘(A) IN GENERAL.—Upon receipt of a re-
quest by a skilled nursing facility pursuant to
subsection (b)(8) that is accompanied by the in-
formation described in subclauses (II) through
(IV) of subsection (b)(8)(A)(ii), a State, after
checking appropriate State records and finding
no disqualifying information (as defined in sub-
section (b)(8)(F)(ii)), shall immediately submit
such request and information to the Attorney
General and shall request the Attorney General
to conduct a search and exchange of records with
respect to the individual as described in sub-
paragraph (B).
‘‘(B) SEARCH AND EXCHANGE OF RECORDS
BY ATTORNEY GENERAL.—Upon receipt of a sub-
†
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HR 1 EAS
mission pursuant to subparagraph (A), the At-
torney General shall direct a search of the
records of the Federal Bureau of Investigation
for any criminal history records corresponding
to the fingerprints and other positive identifica-
tion information submitted. The Attorney Gen-
eral shall provide any corresponding information
resulting from the search to the State.
‘‘(C) STATE
REPORTING
OF
INFORMATION
TO SKILLED NURSING FACILITY.—Upon receipt
of the information provided by the Attorney Gen-
eral pursuant to subparagraph (B), the State
shall—
‘‘(i) review the information to deter-
mine whether the individual has any con-
viction for a relevant crime (as defined in
subsection (b)(8)(F)(i));
‘‘(ii) immediately report to the skilled
nursing facility in writing the results of
such review; and
‘‘(iii) in the case of an individual with
a conviction for a relevant crime, report the
existence of such conviction of such indi-
vidual to the database established under sec-
tion 1128E.
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HR 1 EAS
such fee shall not exceed the actual cost
of such activities.
‘‘(ii) PROHIBITION ON CHARGING.—An
entity may not impose on a provisional em-
ployee or an employee any charges relating
to the performance of a background check
under this paragraph.
‘‘(E) REGULATIONS.—
‘‘(i) IN GENERAL.—In addition to the
Secretary’s authority to promulgate regula-
tions under this title, the Attorney General,
in consultation with the Secretary, may
promulgate such regulations as are nec-
essary to carry out the Attorney General’s
responsibilities under this paragraph and
subsection (b)(9), including regulations re-
garding the security confidentiality, accu-
racy, use, destruction, and dissemination of
information, audits and recordkeeping, and
the imposition of fees.
‘‘(ii) APPEAL PROCEDURES.—The At-
torney General, in consultation with the
Secretary, shall promulgate such regulations
as are necessary to establish procedures by
which a provisional employee or an em-
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ployee may appeal or dispute the accuracy
of the information obtained in a back-
ground check conducted under this para-
graph. Appeals shall be limited to instances
in which a provisional employee or an em-
ployee is incorrectly identified as the subject
of the background check, or when informa-
tion about the provisional employee or em-
ployee has not been updated to reflect
changes in the provisional employee’s or
employee’s criminal record.
‘‘(F) REPORT.—Not later than 2 years after
the date of enactment of this paragraph, the At-
torney General shall submit a report to Congress
on—
‘‘(i) the number of requests for searches
and exchanges of records made under this
section;
‘‘(ii) the disposition of such requests;
and
‘‘(iii) the cost of responding to such re-
quests.’’.
(2) MEDICAID.—Section 1919(e) (42 U.S.C.
1396r(e)) is amended by adding at the end the fol-
lowing:
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‘‘(8) FEDERAL AND STATE REQUIREMENTS CON-
CERNING CRIMINAL BACKGROUND CHECKS ON NURS-
ING FACILITY EMPLOYEES.—
‘‘(A) IN GENERAL.—Upon receipt of a re-
quest by a nursing facility pursuant to sub-
section (b)(8) that is accompanied by the infor-
mation described in subclauses (II) through (IV)
of subsection (b)(8)(A)(ii), a State, after checking
appropriate State records and finding no dis-
qualifying information (as defined in subsection
(b)(8)(F)(ii)), shall immediately submit such re-
quest and information to the Attorney General
and shall request the Attorney General to con-
duct a search and exchange of records with re-
spect to the individual as described in subpara-
graph (B).
‘‘(B) SEARCH AND EXCHANGE OF RECORDS
BY ATTORNEY GENERAL.—Upon receipt of a sub-
mission pursuant to subparagraph (A), the At-
torney General shall direct a search of the
records of the Federal Bureau of Investigation
for any criminal history records corresponding
to the fingerprints and other positive identifica-
tion information submitted. The Attorney Gen-
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eral shall provide any corresponding information
resulting from the search to the State.
‘‘(C) STATE
REPORTING
OF
INFORMATION
TO NURSING FACILITY.—Upon receipt of the in-
formation provided by the Attorney General pur-
suant to subparagraph (B), the State shall—
‘‘(i) review the information to deter-
mine whether the individual has any con-
viction for a relevant crime (as defined in
subsection (b)(8)(F)(i));
‘‘(ii) immediately report to the nursing
facility in writing the results of such re-
view; and
‘‘(iii) in the case of an individual with
a conviction for a relevant crime, report the
existence of such conviction of such indi-
vidual to the database established under sec-
tion 1128E.
‘‘(D) FEES FOR PERFORMANCE OF CRIMI-
NAL BACKGROUND CHECKS.—
‘‘(i) AUTHORITY TO CHARGE FEES.—
‘‘(I) ATTORNEY
GENERAL.—The
Attorney General may charge a fee to
any State requesting a search and ex-
change of records pursuant to this
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paragraph and subsection (b)(8) for
conducting the search and providing
the records. The amount of such fee
shall not exceed the lesser of the actual
cost of such activities or $50. Such fees
shall be available to the Attorney Gen-
eral, or, in the Attorney General’s dis-
cretion, to the Federal Bureau of Inves-
tigation, until expended.
‘‘(II) 
STATE.—A 
State 
may
charge a nursing facility a fee for ini-
tiating the criminal background check
under this paragraph and subsection
(b)(8), including fees charged by the
Attorney General, and for performing
the review and report required by sub-
paragraph (C). The amount of such fee
shall not exceed the actual cost of such
activities.
‘‘(ii) PROHIBITION ON CHARGING.—An
entity may not impose on a provisional em-
ployee or an employee any charges relating
to the performance of a background check
under this paragraph.
‘‘(E) REGULATIONS.—
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‘‘(i) IN GENERAL.—In addition to the
Secretary’s authority to promulgate regula-
tions under this title, the Attorney General,
in consultation with the Secretary, may
promulgate such regulations as are nec-
essary to carry out the Attorney General’s
responsibilities under this paragraph and
subsection (b)(8), including regulations re-
garding the security, confidentiality, accu-
racy, use, destruction, and dissemination of
information, audits and recordkeeping, and
the imposition of fees.
‘‘(ii) APPEAL PROCEDURES.—The At-
torney General, in consultation with the
Secretary, shall promulgate such regulations
as are necessary to establish procedures by
which a provisional employee or an em-
ployee may appeal or dispute the accuracy
of the information obtained in a back-
ground check conducted under this para-
graph. Appeals shall be limited to instances
in which a provisional employee or an em-
ployee is incorrectly identified as the subject
of the background check, or when informa-
tion about the provisional employee or em-
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ployee has not been updated to reflect
changes in the provisional employee’s or
employee’s criminal record.
‘‘(F) REPORT.—Not later than 2 years after
the date of enactment of this paragraph, the At-
torney General shall submit a report to Congress
on—
‘‘(i) the number of requests for searches
and exchanges of records made under this
section;
‘‘(ii) the disposition of such requests;
and
‘‘(iii) the cost of responding to such re-
quests.’’.
(c) APPLICATION
TO OTHER ENTITIES PROVIDING
HOME HEALTH OR LONG-TERM CARE SERVICES.—
(1) MEDICARE.—Part D of title XVIII (42
U.S.C. 1395x et seq.) is amended by adding at the
end the following:
‘‘APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE
ABUSE PROVISIONS TO ANY PROVIDER OF SERVICES
OR
OTHER
ENTITY
PROVIDING
HOME
HEALTH
OR
LONG-TERM CARE SERVICES
‘‘SEC. 1897. (a) IN GENERAL.—The requirements of
subsections (b)(8) and (e)(6) of section 1819 shall apply to
any provider of services or any other entity that is eligible
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to be paid under this title for providing home health serv-
ices, hospice care (including routine home care and other
services included in hospice care under this title), or long-
term care services to an individual entitled to benefits under
part A or enrolled under part B, including an individual
provided with a Medicare+Choice plan offered by a
Medicare+Choice organization under part C (in this sec-
tion referred to as a ‘medicare beneficiary’).
‘‘(b) SUPERVISION OF PROVISIONAL EMPLOYEES.—
‘‘(1) IN GENERAL.—With respect to an entity
that provides home health services, such entity shall
be considered to have satisfied the requirements of sec-
tion 1819(b)(8)(B)(ii) or 1919(b)(8)(B)(ii) if the enti-
ty meets such requirements for supervision of provi-
sional employees of the entity as the Secretary shall,
by regulation, specify in accordance with paragraph
(2).
‘‘(2) REQUIREMENTS.—The regulations required
under paragraph (1) shall provide the following:
‘‘(A) Supervision of a provisional employee
shall consist of ongoing, good faith, verifiable ef-
forts by the supervisor of the provisional em-
ployee to conduct monitoring and oversight ac-
tivities to ensure the safety of a medicare bene-
ficiary.
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tity, and if such activities would not impose an
unreasonable cost or other burden on the enti-
ty.’’.
(2) MEDICAID.—Section 1902(a) (42 U.S.C.
1396a), as amended by section 104(a), is amended—
(A) in paragraph (65), by striking ‘‘and’’
at the end;
(B) in paragraph (66), by striking the pe-
riod and inserting ‘‘; and’’; and
(C) by inserting after paragraph (66) the
following:
‘‘(67) provide that any entity that is eligible to
be paid under the State plan for providing home
health services, hospice care (including routine home
care and other services included in hospice care under
title XVIII), or long-term care services for which med-
ical assistance is available under the State plan to
individuals requiring long-term care complies with
the requirements of subsections (b)(8) and (e)(8) of
section 1919 and section 1897(b) (in the same man-
ner as such section applies to a medicare bene-
ficiary).’’.
(3) EXPANSION OF STATE NURSE AIDE REG-
ISTRY.—
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(A) MEDICARE.—Section 1819 (42 U.S.C.
1395i–3) is amended—
(i) in subsection (e)(2)—
(I) in the paragraph heading, by
striking ‘‘NURSE AIDE REGISTRY’’ and
inserting ‘‘EMPLOYEE REGISTRY’’;
(II) in subparagraph (A)—
(aa) by striking ‘‘By not
later than January 1, 1989, the’’
and inserting ‘‘The’’;
(bb) by striking ‘‘a registry
of all individuals’’ and inserting
‘‘a registry of (i) all individuals’’;
and
(cc) by inserting before the
period the following: ‘‘, (ii) all
other skilled nursing facility em-
ployees with respect to whom the
State has made a finding de-
scribed in subparagraph (B), and
(iii) any employee of any pro-
vider of services or any other enti-
ty that is eligible to be paid under
this title for providing home
health services, hospice care (in-
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cluding routine home care and
other services included in hospice
care under this title), or long-term
care services and with respect to
whom the entity has reported to
the State a finding of patient ne-
glect or abuse or a misappropria-
tion of patient property’’; and
(III) in subparagraph (C), by
striking ‘‘a nurse aide’’ and inserting
‘‘an individual’’; and
(ii) in subsection (g)(1)—
(I) by striking the first sentence of
subparagraph (C) and inserting the
following: ‘‘The State shall provide,
through the agency responsible for sur-
veys and certification of skilled nurs-
ing facilities under this subsection, for
a process for the receipt and timely re-
view and investigation of allegations of
neglect and abuse and misappropria-
tion of resident property by a nurse
aide or a skilled nursing facility em-
ployee of a resident in a skilled nurs-
ing facility, by another individual
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HR 1 EAS
used by the facility in providing serv-
ices to such a resident, or by an indi-
vidual 
described 
in 
subsection
(e)(2)(A)(iii).’’; and
(II) in the fourth sentence of sub-
paragraph (C), by inserting ‘‘or de-
scribed in subsection (e)(2)(A)(iii)’’
after ‘‘used by the facility’’; and
(III) in subparagraph (D)—
(aa) in the subparagraph
heading, 
by 
striking 
‘‘NURSE
AIDE’’; and
(bb) in clause (i), in the mat-
ter preceding subclause (I), by
striking ‘‘a nurse aide’’ and in-
serting ‘‘an individual’’; and
(cc) in clause (i)(I), by strik-
ing ‘‘nurse aide’’ and inserting
‘‘individual’’.
(B) MEDICAID.—Section 1919 (42 U.S.C.
1396r) is amended—
(i) in subsection (e)(2)—
(I) in the paragraph heading, by
striking ‘‘NURSE AIDE REGISTRY’’ and
inserting ‘‘EMPLOYEE REGISTRY’’;
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(II) in subparagraph (A)—
(aa) by striking ‘‘By not
later than January 1, 1989, the’’
and inserting ‘‘The’’;
(bb) by striking ‘‘a registry
of all individuals’’ and inserting
‘‘a registry of (i) all individuals’’;
and
(cc) by inserting before the
period the following: ‘‘, (ii) all
other nursing facility employees
with respect to whom the State
has made a finding described in
subparagraph (B), and (iii) any
employee of an entity that is eligi-
ble to be paid under the State
plan for providing home health
services, hospice care (including
routine home care and other serv-
ices included in hospice care
under title XVIII), or long-term
care services and with respect to
whom the entity has reported to
the State a finding of patient ne-
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glect or abuse or a misappropria-
tion of patient property’’; and
(III) in subparagraph (C), by
striking ‘‘a nurse aide’’ and inserting
‘‘an individual’’; and
(ii) in subsection (g)(1)—
(I) by striking the first sentence of
subparagraph (C) and inserting the
following: ‘‘The State shall provide,
through the agency responsible for sur-
veys and certification of nursing facili-
ties under this subsection, for a process
for the receipt and timely review and
investigation of allegations of neglect
and abuse and misappropriation of
resident property by a nurse aide or a
nursing facility employee of a resident
in a nursing facility, by another indi-
vidual used by the facility in pro-
viding services to such a resident, or by
an individual described in subsection
(e)(2)(A)(iii).’’; and
(II) in the fourth sentence of sub-
paragraph (C), by inserting ‘‘or de-
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scribed in subsection (e)(2)(A)(iii)’’
after ‘‘used by the facility’’; and
(III) in subparagraph (D)—
(aa) in the subparagraph
heading, 
by 
striking 
‘‘NURSE
AIDE’’; and
(bb) in clause (i), in the mat-
ter preceding subclause (I), by
striking ‘‘a nurse aide’’ and in-
serting ‘‘an individual’’; and
(cc) in clause (i)(I), by strik-
ing ‘‘nurse aide’’ and inserting
‘‘individual’’.
(d) REIMBURSEMENT OF COSTS FOR BACKGROUND
CHECKS.—The Secretary of Health and Human Services
shall reimburse nursing facilities, skilled nursing facilities,
and other entities for costs incurred by the facilities and
entities in order to comply with the requirements imposed
under sections 1819(b)(8) and 1919(b)(8) of such Act (42
U.S.C. 1395i–3(b)(8), 1396r(b)(8)), as added by this sec-
tion.
(e) INCLUSION OF ABUSIVE ACTS WITHIN A LONG-
TERM CARE FACILITY OR PROVIDER IN THE NATIONAL
HEALTH CARE FRAUD
AND ABUSE DATA COLLECTION
PROGRAM.—
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(1) IN GENERAL.—Section 1128E(g)(1)(A) (42
U.S.C. 1320a–7e(g)(1)(A)) is amended—
(A) by redesignating clause (v) as clause
(vi); and
(B) by inserting after clause (iv), the fol-
lowing:
‘‘(v) A finding of abuse or neglect of a
patient or a resident of a long-term care fa-
cility, or misappropriation of such a pa-
tient’s or resident’s property.’’.
(2) COVERAGE OF LONG-TERM CARE FACILITY OR
PROVIDER
EMPLOYEES.—Section 1128E(g)(2) (42
U.S.C. 1320a–7e(g)(2)) is amended by inserting ‘‘,
and includes any individual of a long-term care facil-
ity or provider (other than any volunteer) that has
access to a patient or resident of such a facility under
an employment or other contract, or both, with the fa-
cility or provider (including individuals who are li-
censed or certified by the State to provide services at
the facility or through the provider, and nonlicensed
individuals, as defined by the Secretary, providing
services at the facility or through the provider, in-
cluding nurse assistants, nurse aides, home health
aides, individuals who provide home care, and per-
sonal care workers and attendants)’’ before the period.
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(3) REPORTING BY LONG-TERM CARE FACILITIES
OR PROVIDERS.—
(A) IN GENERAL.—Section 1128E(b)(1) (42
U.S.C. 1320a–7e(b)(1)) is amended by striking
‘‘and health plan’’ and inserting ‘‘, health plan,
and long-term care facility or provider’’.
(B) CORRECTION
OF
INFORMATION.—Sec-
tion 1128E(c)(2) (42 U.S.C. 1320a–7e(c)(2)) is
amended by striking ‘‘and health plan’’ and in-
serting ‘‘, health plan, and long-term care facil-
ity or provider’’.
(4) ACCESS TO REPORTED INFORMATION.—Sec-
tion 1128E(d)(1) (42 U.S.C. 1320a–7e(d)(1)) is
amended by striking ‘‘and health plans’’ and insert-
ing ‘‘, health plans, and long-term care facilities or
providers’’.
(5) MANDATORY CHECK OF DATABASE BY LONG-
TERM
CARE
FACILITIES
OR
PROVIDERS.—Section
1128E(d) (42 U.S.C. 1320a–7e(d)) is amended by
adding at the end the following:
‘‘(3) MANDATORY CHECK OF DATABASE BY LONG-
TERM CARE FACILITIES OR PROVIDERS.—A long-term
care facility or provider shall check the database
maintained under this section prior to hiring under
an employment or other contract, or both, (other than
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in a provisional status) any individual as an em-
ployee of such a facility or provider who will have ac-
cess to a patient or resident of the facility or provider
(including individuals who are licensed or certified
by the State to provide services at the facility or
through the provider, and nonlicensed individuals, as
defined by the Secretary, that will provide services at
the facility or through the provider, including nurse
assistants, nurse aides, home health aides, individuals
who provide home care, and personal care workers
and attendants).’’.
(6) DEFINITION OF LONG-TERM CARE FACILITY
OR PROVIDER.—Section 1128E(g) (42 U.S.C. 1320a–
7e(g)) is amended by adding at the end the following:
‘‘(6) LONG-TERM
CARE
FACILITY
OR
PRO-
VIDER.—The term ‘long-term care facility or pro-
vider’ means a skilled nursing facility (as defined in
section 1819(a)), a nursing facility (as defined in sec-
tion 1919(a)), a home health agency, a provider of
hospice care (as defined in section 1861(dd)(1)), a
long-term care hospital (as described in section
1886(d)(1)(B)(iv)), an intermediate care facility for
the mentally retarded (as defined in section 1905(d)),
or any other facility or entity that provides, or is a
provider of, long-term care services, home health serv-
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ices, or hospice care (including routine home care and
other services included in hospice care under title
XVIII), and receives payment for such services under
the medicare program under title XVIII or the med-
icaid program under title XIX.’’.
(7) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
the amendments made by this subsection, $10,200,000
for fiscal year 2004.
(f) PREVENTION
AND
TRAINING
DEMONSTRATION
PROJECT.—
(1) ESTABLISHMENT.—The Secretary of Health
and Human Services shall establish a demonstration
program to provide grants to develop information on
best practices in patient abuse prevention training
(including behavior training and interventions) for
managers and staff of hospital and health care facili-
ties.
(2) ELIGIBILITY.—To be eligible to receive a
grant under paragraph (1), an entity shall be a pub-
lic or private nonprofit entity and prepare and sub-
mit to the Secretary of Health and Human Services
an application at such time, in such manner, and
containing such information as the Secretary may re-
quire.
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(3) USE OF FUNDS.—Amounts received under a
grant under this subsection shall be used to—
(A) examine ways to improve collaboration
between State health care survey and provider
certification agencies, long-term care ombudsman
programs, the long-term care industry, and local
community members;
(B) examine patient care issues relating to
regulatory oversight, community involvement,
and facility staffing and management with a
focus on staff training, staff stress management,
and staff supervision;
(C) examine the use of patient abuse pre-
vention training programs by long-term care en-
tities, including the training program developed
by the National Association of Attorneys Gen-
eral, and the extent to which such programs are
used; and
(D) identify and disseminate best practices
for preventing and reducing patient abuse.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated such sums as
may be necessary to carry out this subsection.
(g) EFFECTIVE DATE.—
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(1) IN GENERAL.—With respect to a skilled nurs-
ing facility (as defined in section 1819(a) of the So-
cial Security Act (42 U.S.C. 1395i–3(a)) or a nursing
facility (as defined in section 1919(a) of the Social
Security Act (42 U.S.C. 1396r(a)), this section and
the amendments made by this section shall take effect
on the date that is the earlier of—
(A) 6 months after the effective date of final
regulations promulgated to carry out this section
and such amendments; or
(B) January 1, 2006.
(2) LONG-TERM
CARE
FACILITIES
AND
PRO-
VIDERS.—With respect to a long-term care facility or
provider (as defined in section 1128E(g)(6) of the So-
cial Security Act (42 U.S.C. 1320a–7e(g)(6)) (as
added by subsection (e)), this section and the amend-
ments made by this section shall take effect on the
date that is the earlier of—
(A) 18 months after the effective date of
final regulations promulgated to carry out this
section and such amendments; or
(B) January 1, 2007.
SEC. 637. OFFICE OF RURAL HEALTH POLICY IMPROVE-
MENTS.
Section 711(b) (42 U.S.C. 912(b)) is amended—
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(1) in paragraph (3), by striking ‘‘and’’ after the
comma at the end;
(2) in paragraph (4), by inserting ‘‘and’’ after
the comma at the end; and
(3) by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) administer grants, cooperative agreements,
and contracts to provide technical assistance and
other activities as necessary to support activities re-
lated to improving health care in rural areas.’’.
TITLE VII—ACCESS TO AFFORD-
ABLE PHARMACEUTICALS
SEC. 701. SHORT TITLE.
This title may be cited as the ‘‘Greater Access to Af-
fordable Pharmaceuticals Act’’.
SEC. 702. 30-MONTH STAY-OF-EFFECTIVENESS PERIOD.
(a) ABBREVIATED NEW DRUG APPLICATIONS.—Sec-
tion 505(j) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(j)) is amended—
(1) in paragraph (2), by striking subparagraph
(B) and inserting the following:
‘‘(B) NOTICE OF OPINION THAT PATENT IS INVALID OR
WILL NOT BE INFRINGED.—
‘‘(i) AGREEMENT TO GIVE NOTICE.—An appli-
cant that makes a certification described in subpara-
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graph (A)(vii)(IV) shall include in the application a
statement that the applicant will give notice as re-
quired by this subparagraph.
‘‘(ii) TIMING
OF
NOTICE.—An applicant that
makes a certification described in subparagraph
(A)(vii)(IV) shall give notice as required under this
subparagraph—
‘‘(I) if the certification is in the applica-
tion, not later than 20 days after the date of the
postmark on the notice with which the Secretary
informs the applicant that the application has
been filed; or
‘‘(II) if the certification is in an amend-
ment or supplement to the application, at the
time at which the applicant submits the amend-
ment or supplement, regardless of whether the
applicant has already given notice with respect
to another such certification contained in the ap-
plication or in an amendment or supplement to
the application.
‘‘(iii) RECIPIENTS OF NOTICE.—An applicant re-
quired under this subparagraph to give notice shall
give notice to—
‘‘(I) each owner of the patent that is the
subject of the certification (or a representative of
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the owner designated to receive such a notice);
and
‘‘(II) the holder of the approved application
under subsection (b) for the drug that is claimed
by the patent or a use of which is claimed by the
patent (or a representative of the holder des-
ignated to receive such a notice).
‘‘(iv) CONTENTS OF NOTICE.—A notice required
under this subparagraph shall—
‘‘(I) state that an application that contains
data from bioavailability or bioequivalence stud-
ies has been submitted under this subsection for
the drug with respect to which the certification
is made to obtain approval to engage in the com-
mercial manufacture, use, or sale of the drug be-
fore the expiration of the patent referred to in
the certification; and
‘‘(II) include a detailed statement of the fac-
tual and legal basis of the opinion of the appli-
cant that the patent is invalid or will not be in-
fringed.’’; and
(2) in paragraph (5)—
(A) in subparagraph (B)—
(i) by striking ‘‘under the following’’
and inserting ‘‘by applying the following to
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each certification made under paragraph
(2)(A)(vii)’’; and
(ii) in clause (iii)—
(I) in the first sentence, by strik-
ing ‘‘unless’’ and all that follows and
inserting ‘‘unless, before the expiration
of 45 days after the date on which the
notice described in paragraph (2)(B) is
received, an action is brought for in-
fringement of the patent that is the
subject of the certification and for
which information was submitted to
the Secretary under subsection (b)(1)
or (c)(2) before the date on which the
application (excluding an amendment
or supplement to the application),
which the Secretary later determines to
be substantially complete, was sub-
mitted.’’; and
(II) in the second sentence—
(aa) by striking subclause (I)
and inserting the following:
‘‘(I) if before the expiration of such period
the district court decides that the patent is in-
valid or not infringed (including any substantive
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determination that there is no cause of action for
patent infringement or invalidity), the approval
shall be made effective on—
‘‘(aa) the date on which the court en-
ters judgment reflecting the decision; or
‘‘(bb) the date of a settlement order or
consent decree signed and entered by the
court stating that the patent that is the sub-
ject of the certification is invalid or not in-
fringed;’’;
(bb) by striking subclause
(II) and inserting the following:
‘‘(II) if before the expiration of such period
the district court decides that the patent has been
infringed—
‘‘(aa) if the judgment of the district
court is appealed, the approval shall be
made effective on—
‘‘(AA) the date on which the court
of appeals decides that the patent is
invalid or not infringed (including
any substantive determination that
there is no cause of action for patent
infringement or invalidity); or
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‘‘(BB) the date of a settlement
order or consent decree signed and en-
tered by the court of appeals stating
that the patent that is the subject of the
certification is invalid or not in-
fringed; or
‘‘(bb) if the judgment of the district
court is not appealed or is affirmed, the ap-
proval shall be made effective on the date
specified by the district court in a court
order under section 271(e)(4)(A) of title 35,
United States Code;’’;
(cc) in subclause (III), by
striking ‘‘on the date of such court
decision.’’ and inserting ‘‘as pro-
vided in subclause (I); or’’; and
(dd) by inserting after sub-
clause (III) the following:
‘‘(IV) if before the expiration of such period
the court grants a preliminary injunction pro-
hibiting the applicant from engaging in the com-
mercial manufacture or sale of the drug until the
court decides the issues of patent validity and
infringement and if the court decides that such
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HR 1 EAS
patent has been infringed, the approval shall be
made effective as provided in subclause (II).’’;
(B) by redesignating subparagraphs (C)
and (D) as subparagraphs (E) and (F), respec-
tively; and
(C) by inserting after subparagraph (B) the
following:
‘‘(C) CIVIL ACTION TO OBTAIN PATENT CER-
TAINTY.—
‘‘(i) DECLARATORY JUDGMENT ABSENT
INFRINGEMENT ACTION.—If an owner of the
patent or the holder of the approved appli-
cation under subsection (b) for the drug that
is claimed by the patent or a use of which
is claimed by the patent does not bring a
civil action against the applicant for in-
fringement of the patent on or before the
date that is 45 days after the date on which
the notice given under paragraph (2)(B)
was received, the applicant may bring a
civil action against the owner or holder (but
not against any owner or holder that has
brought such a civil action against that ap-
plicant, unless that civil action was dis-
missed without prejudice) for a declaratory
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judgment under section 2201 of title 28,
United States Code, that the patent is in-
valid or will not be infringed by the drug
for which the applicant seeks approval.
‘‘(ii) COUNTERCLAIM
TO
INFRINGE-
MENT ACTION.—
‘‘(I) IN GENERAL.—If an owner of
the patent or the holder of the ap-
proved application under subsection
(b) for the drug that is claimed by the
patent or a use of which is claimed by
the patent brings a patent infringe-
ment action against the applicant, the
applicant may assert a counterclaim
seeking an order requiring the holder
to correct or delete the patent informa-
tion submitted by the holder under sub-
section (b) or (c) on the ground that
the patent does not claim either—
‘‘(aa) the drug for which the
application was approved; or
‘‘(bb) an approved method of
using the drug.
‘‘(II) NO INDEPENDENT CAUSE OF
ACTION.—Subclause (I) does not au-
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HR 1 EAS
thorize the assertion of a claim de-
scribed in subclause (I) in any civil
action or proceeding other than a
counterclaim described in subclause
(I).
‘‘(iii) NO
DAMAGES.—An applicant
shall not be entitled to damages in a civil
action under subparagraph (i) or a counter-
claim under subparagraph (ii).’’.
(b) APPLICATIONS GENERALLY.—Section 505 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) is
amended—
(1) in subsection (b), by striking paragraph (3)
and inserting the following:
‘‘(3) NOTICE OF OPINION THAT PATENT IS INVALID OR
WILL NOT BE INFRINGED.—
‘‘(A) AGREEMENT TO GIVE NOTICE.—An appli-
cant that makes a certification described in para-
graph (2)(A)(iv) shall include in the application a
statement that the applicant will give notice as re-
quired by this paragraph.
‘‘(B) TIMING
OF
NOTICE.—An applicant that
makes 
a 
certification 
described 
in 
paragraph
(2)(A)(iv) shall give notice as required under this
paragraph—
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HR 1 EAS
‘‘(i) if the certification is in the applica-
tion, not later than 20 days after the date of the
postmark on the notice with which the Secretary
informs the applicant that the application has
been filed; or
‘‘(ii) if the certification is in an amendment
or supplement to the application, at the time at
which the applicant submits the amendment or
supplement, regardless of whether the applicant
has already given notice with respect to another
such certification contained in the application or
in an amendment or supplement to the applica-
tion.
‘‘(C) RECIPIENTS OF NOTICE.—An applicant re-
quired under this paragraph to give notice shall give
notice to—
‘‘(i) each owner of the patent that is the
subject of the certification (or a representative of
the owner designated to receive such a notice);
and
‘‘(ii) the holder of the approved application
under this subsection for the drug that is claimed
by the patent or a use of which is claimed by the
patent (or a representative of the holder des-
ignated to receive such a notice).
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‘‘(D) CONTENTS OF NOTICE.—A notice required
under this paragraph shall—
‘‘(i) state that an application that contains
data from bioavailability or bioequivalence stud-
ies has been submitted under this subsection for
the drug with respect to which the certification
is made to obtain approval to engage in the com-
mercial manufacture, use, or sale of the drug be-
fore the expiration of the patent referred to in
the certification; and
‘‘(ii) include a detailed statement of the fac-
tual and legal basis of the opinion of the appli-
cant that the patent is invalid or will not be in-
fringed.’’; and
(2) in subsection (c)(3)—
(A) in the first sentence, by striking ‘‘under
the following’’ and inserting ‘‘by applying the
following to each certification made under sub-
section (b)(2)(A)(iv)’’;
(B) in subparagraph (C)—
(i) in the first sentence, by striking
‘‘unless’’ and all that follows and inserting
‘‘unless, before the expiration of 45 days
after the date on which the notice described
in subsection (b)(3) is received, an action is
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brought for infringement of the patent that
is the subject of the certification and for
which information was submitted to the
Secretary under paragraph (2) or sub-
section (b)(1) before the date on which the
application (excluding an amendment or
supplement to the application) was sub-
mitted.’’;
(ii) in the second sentence—
(I) 
by 
striking 
‘‘paragraph
(3)(B)’’ 
and 
inserting 
‘‘subsection
(b)(3)’’;
(II) by striking clause (i) and in-
serting the following:
‘‘(i) if before the expiration of such period
the district court decides that the patent is in-
valid or not infringed (including any substantive
determination that there is no cause of action for
patent infringement or invalidity), the approval
shall be made effective on—
‘‘(I) the date on which the court enters
judgment reflecting the decision; or
‘‘(II) the date of a settlement order or
consent decree signed and entered by the
court stating that the patent that is the sub-
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ject of the certification is invalid or not in-
fringed;’’;
(III) by striking clause (ii) and
inserting the following:
‘‘(ii) if before the expiration of such period
the district court decides that the patent has been
infringed—
‘‘(I) if the judgment of the district
court is appealed, the approval shall be
made effective on—
‘‘(aa) the date on which the court
of appeals decides that the patent is
invalid or not infringed (including
any substantive determination that
there is no cause of action for patent
infringement or invalidity); or
‘‘(bb) the date of a settlement
order or consent decree signed and en-
tered by the court of appeals stating
that the patent that is the subject of the
certification is invalid or not in-
fringed; or
‘‘(II) if the judgment of the district
court is not appealed or is affirmed, the ap-
proval shall be made effective on the date
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specified by the district court in a court
order under section 271(e)(4)(A) of title 35,
United States Code;’’;
(IV) in clause (iii), by striking
‘‘on the date of such court decision.’’
and inserting ‘‘as provided in clause
(i); or’’; and
(V) by inserting after clause (iii),
the following:
‘‘(iv) if before the expiration of such period
the court grants a preliminary injunction pro-
hibiting the applicant from engaging in the com-
mercial manufacture or sale of the drug until the
court decides the issues of patent validity and
infringement and if the court decides that such
patent has been infringed, the approval shall be
made effective as provided in clause (ii).’’; and
(iii) in the third sentence, by striking
‘‘paragraph (3)(B)’’ and inserting ‘‘sub-
section (b)(3)’’;
(C) by redesignating subparagraph (D) as
subparagraph (E); and
(D) by inserting after subparagraph (C) the
following:
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‘‘(D) CIVIL ACTION TO OBTAIN PATENT CER-
TAINTY.—
‘‘(i) DECLARATORY JUDGMENT ABSENT
INFRINGEMENT ACTION.—If an owner of the
patent or the holder of the approved appli-
cation under subsection (b) for the drug that
is claimed by the patent or a use of which
is claimed by the patent does not bring a
civil action against the applicant for in-
fringement of the patent on or before the
date that is 45 days after the date on which
the notice given under subsection (b)(3) was
received, the applicant may bring a civil
action against the owner or holder (but not
against any owner or holder that has
brought such a civil action against that ap-
plicant, unless that civil action was dis-
missed without prejudice) for a declaratory
judgment under section 2201 of title 28,
United States Code, that the patent is in-
valid or will not be infringed by the drug
for which the applicant seeks approval.
‘‘(ii) COUNTERCLAIM
TO
INFRINGE-
MENT ACTION.—
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HR 1 EAS
‘‘(I) IN GENERAL.—If an owner of
the patent or the holder of the ap-
proved application under subsection
(b) for the drug that is claimed by the
patent or a use of which is claimed by
the patent brings a patent infringe-
ment action against the applicant, the
applicant may assert a counterclaim
seeking an order requiring the holder
to correct or delete the patent informa-
tion submitted by the holder under sub-
section (b) or this subsection on the
ground that the patent does not claim
either—
‘‘(aa) the drug for which the
application was approved; or
‘‘(bb) an approved method of
using the drug.
‘‘(II) NO INDEPENDENT CAUSE OF
ACTION.—Subclause (I) does not au-
thorize the assertion of a claim de-
scribed in subclause (I) in any civil
action or proceeding other than a
counterclaim described in subclause
(I).
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‘‘(iii) NO
DAMAGES.—An applicant
shall not be entitled to damages in a civil
action under clause (i) or a counterclaim
under clause (ii).’’.
(c) INFRINGEMENT ACTIONS.—Section 271(e) of title
35, United States Code, is amended by adding at the end
the following:
‘‘(5) The filing of an application described in
paragraph (2) that includes a certification under sub-
section (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section
505 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355), and the failure of the owner of the pat-
ent to bring an action for infringement of a patent
that is the subject of the certification before the expi-
ration of 45 days after the date on which the notice
given under subsection (b)(3) or (j)(2)(B) of that sec-
tion is received, shall establish an actual controversy
between the applicant and the patent owner sufficient
to confer subject matter jurisdiction in the courts of
the United States in any action brought by the appli-
cant under section 2201 of title 28 for a declaratory
judgment that any patent that is the subject of the
certification is invalid or not infringed.’’.
(d) APPLICABILITY.—
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HR 1 EAS
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendments made by sub-
sections (a), (b), and (c) apply to any proceeding
under section 505 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355) that is pending on or
after the date of enactment of this Act regardless of
the date on which the proceeding was commenced or
is commenced.
(2) NOTICE OF OPINION THAT PATENT IS IN-
VALID
OR
WILL
NOT
BE
INFRINGED.—The amend-
ments made by subsections (a)(1) and (b)(1) apply
with respect to any certification under subsection
(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355) after the date of enactment of this Act in an ap-
plication filed under subsection (b)(2) or (j) of that
section or in an amendment or supplement to an ap-
plication filed under subsection (b)(2) or (j) of that
section.
(3) 
EFFECTIVE
DATE
OF
APPROVAL.—The
amendments made by subsections (a)(2)(A)(ii)(I) and
(b)(2)(B)(i) apply with respect to any patent infor-
mation submitted under subsection (b)(1) or (c)(2) of
section 505 of the Federal Food, Drug, and Cosmetic
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Act (21 U.S.C. 355) made after the date of enactment
of this Act.
SEC. 703. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.
(a) IN GENERAL.—Section 505(j)(5) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)) (as
amended by section 702) is amended—
(1) in subparagraph (B), by striking clause (iv)
and inserting the following:
‘‘(iv) 180-DAY EXCLUSIVITY PERIOD.—
‘‘(I) DEFINITIONS.—In this paragraph:
‘‘(aa) 180-DAY EXCLUSIVITY PERIOD.—
The 
term 
‘180-day 
exclusivity 
period’
means the 180-day period ending on the
day before the date on which an application
submitted by an applicant other than a
first applicant could become effective under
this clause.
‘‘(bb) FIRST
APPLICANT.—The term
‘first applicant’ means an applicant that,
on the first day on which a substantially
complete application containing a certifi-
cation 
described 
in 
paragraph
(2)(A)(vii)(IV) is submitted for approval of
a drug, submits a substantially complete
application containing a certification de-
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HR 1 EAS
scribed in paragraph (2)(A)(vii)(IV) for the
drug.
‘‘(cc) SUBSTANTIALLY
COMPLETE
AP-
PLICATION.—As used in this subsection, the
term ‘substantially complete application’
means an application under this subsection
that on its face is sufficiently complete to
permit a substantive review and contains
all the information required by paragraph
(2)(A).
‘‘(dd) TENTATIVE APPROVAL.—
‘‘(AA) IN
GENERAL.—The term
‘tentative approval’ means notification
to an applicant by the Secretary that
an application under this subsection
meets the requirements of paragraph
(2)(A), but cannot receive effective ap-
proval because the application does not
meet the requirements of this subpara-
graph, there is a period of exclusivity
for the listed drug under subparagraph
(E) or section 505A, or there is a 7-
year period of exclusivity for the listed
drug under section 527.
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‘‘(BB) LIMITATION.—A drug that
is granted tentative approval by the
Secretary is not an approved drug and
shall not have an effective approval
until the Secretary issues an approval
after any necessary additional review
of the application.
‘‘(II) EFFECTIVENESS
OF
APPLICATION.—
Subject to subparagraph (D), if the application
contains a certification described in paragraph
(2)(A)(vii)(IV) and is for a drug for which a
first applicant has submitted an application
containing such a certification, the application
shall be made effective on the date that is 180
days after the date of the first commercial mar-
keting of the drug (including the commercial
marketing of the listed drug) by any first appli-
cant.’’; and
(2) by inserting after subparagraph (C) the fol-
lowing:
‘‘(D) FORFEITURE OF 180-DAY EXCLUSIVITY
PERIOD.—
‘‘(i) 
DEFINITION
OF
FORFEITURE
EVENT.—In this subparagraph, the term
‘forfeiture event’, with respect to an appli-
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cation under this subsection, means the oc-
currence of any of the following:
‘‘(I) FAILURE TO MARKET.—The
first applicant fails to market the drug
by the later of—
‘‘(aa) the earlier of the date
that is—
‘‘(AA) 75 days after the
date on which the approval
of the application of the first
applicant is made effective
under subparagraph (B)(iii);
or
‘‘(BB) 30 months after
the date of submission of the
application of the first appli-
cant; or
‘‘(bb) with respect to the first
applicant or any other applicant
(which other applicant has re-
ceived tentative approval), the
date that is 75 days after the date
as of which, as to each of the pat-
ents with respect to which the first
applicant submitted a certifi-
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cation qualifying the first appli-
cant for the 180-day exclusivity
period 
under 
subparagraph
(B)(iv), at least 1 of the following
has occurred:
‘‘(AA) In an infringe-
ment action brought against
that applicant with respect
to the patent or in a declara-
tory judgment action brought
by that applicant with re-
spect to the patent, a court
enters a final decision from
which no appeal (other than
a petition to the Supreme
Court for a writ of certio-
rari) has been or can be
taken that the patent is in-
valid or not infringed.
‘‘(BB) In an infringe-
ment action or a declaratory
judgment action described in
subitem (AA), a court signs a
settlement order or consent
decree that enters a final
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HR 1 EAS
judgment that includes a
finding that the patent is in-
valid or not infringed.
‘‘(CC) The patent ex-
pires.
‘‘(DD) The patent is
withdrawn by the holder of
the 
application 
approved
under subsection (b).
‘‘(II) WITHDRAWAL OF APPLICA-
TION.—The first applicant withdraws
the application or the Secretary con-
siders the application to have been
withdrawn as a result of a determina-
tion by the Secretary that the applica-
tion does not meet the requirements for
approval under paragraph (4).
‘‘(III) AMENDMENT
OF
CERTIFI-
CATION.—The first applicant amends
or withdraws the certification for all of
the patents with respect to which that
applicant submitted a certification
qualifying the applicant for the 180-
day exclusivity period.
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‘‘(IV) FAILURE TO OBTAIN TEN-
TATIVE
APPROVAL.—The first appli-
cant fails to obtain tentative approval
of the application within 30 months
after the date on which the application
is filed, unless the failure is caused by
a change in or a review of the require-
ments for approval of the application
imposed after the date on which the
application is filed.
‘‘(V) AGREEMENT WITH ANOTHER
APPLICANT, THE LISTED DRUG APPLI-
CATION
HOLDER, 
OR
A
PATENT
OWNER.—The first applicant enters
into an agreement with another appli-
cant under this subsection for the drug,
the holder of the application for the
listed drug, or an owner of the patent
that is the subject of the certification
under paragraph (2)(A)(vii)(IV), the
Federal Trade Commission or the At-
torney General files a complaint, and
there is a final decision of the Federal
Trade Commission or the court with
regard to the complaint from which no
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appeal (other than a petition to the
Supreme Court for a writ of certiorari)
has been or can be taken that the
agreement has violated the antitrust
laws (as defined in section 1 of the
Clayton Act (15 U.S.C. 12), except that
the term includes section 5 of the Fed-
eral Trade Commission Act (15 U.S.C.
45) to the extent that that section ap-
plies to unfair methods of competition).
‘‘(VI) EXPIRATION
OF
ALL
PAT-
ENTS.—All of the patents as to which
the applicant submitted a certification
qualifying it for the 180-day exclu-
sivity period have expired.
‘‘(ii) FORFEITURE.—The 180-day ex-
clusivity period described in subparagraph
(B)(iv) shall be forfeited by a first appli-
cant if a forfeiture event occurs with respect
to that first applicant.
‘‘(iii) SUBSEQUENT APPLICANT.—If all
first applicants forfeit the 180-day exclu-
sivity period under clause (ii)—
‘‘(I) approval of any application
containing a certification described in
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paragraph 
(2)(A)(vii)(IV) 
shall 
be
made effective in accordance with sub-
paragraph (B)(iii); and
‘‘(II) no applicant shall be eligible
for a 180-day exclusivity period.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by subsection (a)
shall be effective only with respect to an application
filed under section 505(j) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(j)) after the date of
enactment of this Act for a listed drug for which no
certification under section 505(j)(2)(A)(vii)(IV) of
that Act was made before the date of enactment of this
Act.
(2) COLLUSIVE
AGREEMENTS.—If a forfeiture
event described in section 505(j)(5)(D)(i)(V) of that
Act occurs in the case of an applicant, the applicant
shall forfeit the 180-day period under section
505(j)(5)(B)(iv) of that Act without regard to when
the 
first 
certification 
under 
section
505(j)(2)(A)(vii)(IV) of that Act for the listed drug
was made.
(3) DECISION OF A COURT WHEN THE 180-DAY
EXCLUSIVITY PERIOD HAS NOT BEEN TRIGGERED.—
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With respect to an application filed before, on, or
after the date of enactment of this Act for a listed
drug 
for 
which 
a 
certification 
under 
section
505(j)(2)(A)(vii)(IV) of that Act was made before the
date of enactment of this Act and for which neither
of the events described in subclause (I) or (II) of sec-
tion 505(j)(5)(B)(iv) of that Act (as in effect on the
day before the date of enactment of this Act) has oc-
curred on or before the date of enactment of this Act,
the term ‘‘decision of a court’’ as used in clause (iv)
of section 505(j)(5)(B) of that Act means a final deci-
sion of a court from which no appeal (other than a
petition to the Supreme Court for a writ of certio-
rari) has been or can be taken.
SEC. 704. BIOAVAILABILITY AND BIOEQUIVALENCE.
(a) IN GENERAL.—Section 505(j)(8) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(8)) is
amended—
(1) by striking subparagraph (A) and inserting
the following:
‘‘(A)(i) The term ‘bioavailability’ means the rate
and extent to which the active ingredient or thera-
peutic ingredient is absorbed from a drug and be-
comes available at the site of drug action.
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‘‘(ii) For a drug that is not intended to be ab-
sorbed into the bloodstream, the Secretary may assess
bioavailability by scientifically valid measurements
intended to reflect the rate and extent to which the ac-
tive ingredient or therapeutic ingredient becomes
available at the site of drug action.’’; and
(2) by adding at the end the following:
‘‘(C) For a drug that is not intended to be ab-
sorbed into the bloodstream, the Secretary may estab-
lish alternative, scientifically valid methods to show
bioequivalence if the alternative methods are expected
to detect a significant difference between the drug and
the listed drug in safety and therapeutic effect.’’.
(b) EFFECT OF AMENDMENT.—The amendment made
by subsection (a) does not alter the standards for approval
of drugs under section 505(j) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355(j)).
SEC. 705. REMEDIES FOR INFRINGEMENT.
Section 287 of title 35, United States Code, is amended
by adding at the end the following:
‘‘(d) CONSIDERATION.—In making a determination
with respect to remedy brought for infringement of a patent
that claims a drug or a method or using a drug, the court
shall consider whether information on the patent was filed
as required under 21 U.S.C. 355 (b) or (c), and, if such
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information was required to be filed but was not, the court
may refuse to award treble damages under section 284.’’.
SEC. 706. CONFORMING AMENDMENTS.
Section 505A of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355a) is amended—
(1) in subsections (b)(1)(A)(i) and (c)(1)(A)(i),
by striking ‘‘(j)(5)(D)(ii)’’ each place it appears and
inserting ‘‘(j)(5)(F)(ii)’’;
(2) in subsections (b)(1)(A)(ii) and (c)(1)(A)(ii),
by striking ‘‘(j)(5)(D)’’ each place it appears and in-
serting ‘‘(j)(5)(F)’’; and
(3) in subsections (e) and (l), by striking
‘‘505(j)(5)(D)’’ each place it appears and inserting
‘‘505(j)(5)(F)’’.
TITLE VIII—IMPORTATION OF
PRESCRIPTION DRUGS
SEC. 801. IMPORTATION OF PRESCRIPTION DRUGS.
(a) IN GENERAL.—Chapter VIII of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 381 et seq.) is amended
by striking section 804 and inserting the following:
‘‘SEC. 804. IMPORTATION OF PRESCRIPTION DRUGS.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) IMPORTER.—The term ‘importer’ means a
pharmacist or wholesaler.
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‘‘(2) 
PHARMACIST.—The 
term 
‘pharmacist’
means a person licensed by a State to practice phar-
macy, including the dispensing and selling of pre-
scription drugs.
‘‘(3) PRESCRIPTION DRUG.—The term ‘prescrip-
tion drug’ means a drug subject to section 503(b),
other than—
‘‘(A) a controlled substance (as defined in
section 102 of the Controlled Substances Act (21
U.S.C. 802));
‘‘(B) a biological product (as defined in sec-
tion 351 of the Public Health Service Act (42
U.S.C. 262));
‘‘(C) an infused drug (including a peri-
toneal dialysis solution);
‘‘(D) an intravenously injected drug; or
‘‘(E) a drug that is inhaled during surgery.
‘‘(4) 
QUALIFYING
LABORATORY.—The 
term
‘qualifying laboratory’ means a laboratory in the
United States that has been approved by the Sec-
retary for the purposes of this section.
‘‘(5) WHOLESALER.—
‘‘(A) IN GENERAL.—The term ‘wholesaler’
means a person licensed as a wholesaler or dis-
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tributor of prescription drugs in the United
States under section 503(e)(2)(A).
‘‘(B) EXCLUSION.—The term ‘wholesaler’
does not include a person authorized to import
drugs under section 801(d)(1).
‘‘(b) REGULATIONS.—The Secretary, after consultation
with the United States Trade Representative and the Com-
missioner of Customs, shall promulgate regulations permit-
ting pharmacists and wholesalers to import prescription
drugs from Canada into the United States.
‘‘(c) LIMITATION.—The regulations under subsection
(b) shall—
‘‘(1) require that safeguards be in place to ensure
that each prescription drug imported under the regu-
lations complies with section 505 (including with re-
spect to being safe and effective for the intended use
of the prescription drug), with sections 501 and 502,
and with other applicable requirements of this Act;
‘‘(2) require that an importer of a prescription
drug under the regulations comply with subsections
(d)(1) and (e); and
‘‘(3) contain any additional provisions deter-
mined by the Secretary to be appropriate as a safe-
guard to protect the public health or as a means to
facilitate the importation of prescription drugs.
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‘‘(d) INFORMATION AND RECORDS.—
‘‘(1) IN GENERAL.—The regulations under sub-
section (b) shall require an importer of a prescription
drug under subsection (b) to submit to the Secretary
the following information and documentation:
‘‘(A) The name and quantity of the active
ingredient of the prescription drug.
‘‘(B) A description of the dosage form of the
prescription drug.
‘‘(C) The date on which the prescription
drug is shipped.
‘‘(D) The quantity of the prescription drug
that is shipped.
‘‘(E) The point of origin and destination of
the prescription drug.
‘‘(F) The price paid by the importer for the
prescription drug.
‘‘(G) Documentation from the foreign seller
specifying—
‘‘(i) the original source of the prescrip-
tion drug; and
‘‘(ii) the quantity of each lot of the
prescription drug originally received by the
seller from that source.
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‘‘(H) The lot or control number assigned to
the prescription drug by the manufacturer of the
prescription drug.
‘‘(I) The name, address, telephone number,
and professional license number (if any) of the
importer.
‘‘(J)(i) In the case of a prescription drug
that is shipped directly from the first foreign re-
cipient of the prescription drug from the manu-
facturer:
‘‘(I) 
Documentation 
demonstrating
that the prescription drug was received by
the recipient from the manufacturer and
subsequently shipped by the first foreign re-
cipient to the importer.
‘‘(II) Documentation of the quantity of
each lot of the prescription drug received by
the first foreign recipient demonstrating
that the quantity being imported into the
United States is not more than the quantity
that was received by the first foreign recipi-
ent.
‘‘(III)(aa) In the case of an initial im-
ported 
shipment, 
documentation 
dem-
onstrating that each batch of the prescrip-
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tion drug in the shipment was statistically
sampled and tested for authenticity and
degradation.
‘‘(bb) In the case of any subsequent
shipment, 
documentation 
demonstrating
that a statistically valid sample of the ship-
ment was tested for authenticity and deg-
radation.
‘‘(ii) In the case of a prescription drug that
is not shipped directly from the first foreign re-
cipient of the prescription drug from the manu-
facturer, documentation demonstrating that each
batch in each shipment offered for importation
into the United States was statistically sampled
and tested for authenticity and degradation.
‘‘(K) Certification from the importer or
manufacturer of the prescription drug that the
prescription drug—
‘‘(i) is approved for marketing in the
United States; and
‘‘(ii) meets all labeling requirements
under this Act.
‘‘(L) Laboratory records, including complete
data derived from all tests necessary to ensure
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that the prescription drug is in compliance with
established specifications and standards.
‘‘(M) Documentation demonstrating that the
testing required by subparagraphs (J) and (L)
was conducted at a qualifying laboratory.
‘‘(N) Any other information that the Sec-
retary determines is necessary to ensure the pro-
tection of the public health.
‘‘(2) MAINTENANCE
BY
THE
SECRETARY.—The
Secretary shall maintain information and docu-
mentation submitted under paragraph (1) for such
period of time as the Secretary determines to be nec-
essary.
‘‘(e) TESTING.—The regulations under subsection (b)
shall require—
‘‘(1) that testing described in subparagraphs (J)
and (L) of subsection (d)(1) be conducted by the im-
porter or by the manufacturer of the prescription
drug at a qualified laboratory;
‘‘(2) if the tests are conducted by the importer—
‘‘(A) that information needed to—
‘‘(i) authenticate the prescription drug
being tested; and
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‘‘(ii) confirm that the labeling of the
prescription drug complies with labeling re-
quirements under this Act;
be supplied by the manufacturer of the prescrip-
tion drug to the pharmacist or wholesaler; and
‘‘(B) that the information supplied under
subparagraph (A) be kept in strict confidence
and used only for purposes of testing or other-
wise complying with this Act; and
‘‘(3) may include such additional provisions as
the Secretary determines to be appropriate to provide
for the protection of trade secrets and commercial or
financial information that is privileged or confiden-
tial.
‘‘(f) REGISTRATION OF FOREIGN SELLERS.—Any es-
tablishment within Canada engaged in the distribution of
a prescription drug that is imported or offered for importa-
tion into the United States shall register with the Secretary
the name and place of business of the establishment.
‘‘(g) SUSPENSION OF IMPORTATION.—The Secretary
shall require that importations of a specific prescription
drug or importations by a specific importer under sub-
section (b) be immediately suspended on discovery of a pat-
tern of importation of that specific prescription drug or by
that specific importer of drugs that are counterfeit or in
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violation of any requirement under this section, until an
investigation is completed and the Secretary determines
that the public is adequately protected from counterfeit and
violative prescription drugs being imported under sub-
section (b).
‘‘(h) APPROVED LABELING.—The manufacturer of a
prescription drug shall provide an importer written author-
ization for the importer to use, at no cost, the approved
labeling for the prescription drug.
‘‘(i) PROHIBITION OF DISCRIMINATION.—
‘‘(1) IN GENERAL.—It shall be unlawful for a
manufacturer of a prescription drug to discriminate
against, or cause any other person to discriminate
against, a pharmacist or wholesaler that purchases or
offers to purchase a prescription drug from the manu-
facturer or from any person that distributes a pre-
scription drug manufactured by the drug manufac-
turer.
‘‘(2) DISCRIMINATION.—For the purposes of
paragraph (1), a manufacturer of a prescription drug
shall be considered to discriminate against a phar-
macist or wholesaler if the manufacturer enters into
a contract for sale of a prescription drug, places a
limit on supply, or employs any other measure, that
has the effect of—
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‘‘(A) providing pharmacists or wholesalers
access to prescription drugs on terms or condi-
tions that are less favorable than the terms or
conditions provided to a foreign purchaser (other
than a charitable or humanitarian organization)
of the prescription drug; or
‘‘(B) restricting the access of pharmacists or
wholesalers to a prescription drug that is per-
mitted to be imported into the United States
under this section.
‘‘(j) CHARITABLE CONTRIBUTIONS.—Notwithstanding
any other provision of this section, section 801(d)(1) con-
tinues to apply to a prescription drug that is donated or
otherwise supplied at no charge by the manufacturer of the
drug to a charitable or humanitarian organization (includ-
ing the United Nations and affiliates) or to a government
of a foreign country.
‘‘(k) WAIVER AUTHORITY FOR IMPORTATION BY INDI-
VIDUALS.—
‘‘(1) DECLARATIONS.—Congress declares that in
the enforcement against individuals of the prohibition
of importation of prescription drugs and devices, the
Secretary should—
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‘‘(A) focus enforcement on cases in which
the importation by an individual poses a signifi-
cant threat to public health; and
‘‘(B) exercise discretion to permit individ-
uals to make such importations in circumstances
in which—
‘‘(i) the importation is clearly for per-
sonal use; and
‘‘(ii) the prescription drug or device
imported does not appear to present an un-
reasonable risk to the individual.
‘‘(2) WAIVER AUTHORITY.—
‘‘(A) IN
GENERAL.—The Secretary may
grant to individuals, by regulation or on a case-
by-case basis, a waiver of the prohibition of im-
portation of a prescription drug or device or
class of prescription drugs or devices, under such
conditions as the Secretary determines to be ap-
propriate.
‘‘(B) GUIDANCE
ON
CASE-BY-CASE
WAIV-
ERS.—The Secretary shall publish, and update
as necessary, guidance that accurately describes
circumstances in which the Secretary will con-
sistently grant waivers on a case-by-case basis
under subparagraph (A), so that individuals
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may know with the greatest practicable degree of
certainty whether a particular importation for
personal use will be permitted.
‘‘(3) DRUGS IMPORTED FROM CANADA.—In par-
ticular, the Secretary shall by regulation grant indi-
viduals a waiver to permit individuals to import into
the United States a prescription drug that—
‘‘(A) is imported from a licensed pharmacy
for personal use by an individual, not for resale,
in quantities that do not exceed a 90-day supply;
‘‘(B) is accompanied by a copy of a valid
prescription;
‘‘(C) is imported from Canada, from a sell-
er registered with the Secretary;
‘‘(D) is a prescription drug approved by the
Secretary under chapter V;
‘‘(E) is in the form of a final finished dos-
age that was manufactured in an establishment
registered under section 510; and
‘‘(F) is imported under such other condi-
tions as the Secretary determines to be necessary
to ensure public safety.
‘‘(l) STUDIES; REPORTS.—
‘‘(1) BY THE INSTITUTE OF MEDICINE OF THE
NATIONAL ACADEMY OF SCIENCES.—
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‘‘(A) STUDY.—
‘‘(i) IN GENERAL.—The Secretary shall
request that the Institute of Medicine of the
National Academy of Sciences conduct a
study of—
‘‘(I) importations of prescription
drugs made under the regulations
under subsection (b); and
‘‘(II) information and documenta-
tion submitted under subsection (d).
‘‘(ii) REQUIREMENTS.—In conducting
the study, the Institute of Medicine shall—
‘‘(I) evaluate the compliance of
importers with the regulations under
subsection (b);
‘‘(II) compare the number of ship-
ments under the regulations under sub-
section (b) during the study period
that are determined to be counterfeit,
misbranded, or adulterated, and com-
pare that number with the number of
shipments made during the study pe-
riod within the United States that are
determined to be counterfeit, mis-
branded, or adulterated; and
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‘‘(III) consult with the Secretary,
the United States Trade Representa-
tive, and the Commissioner of Patents
and Trademarks to evaluate the effect
of importations under the regulations
under subsection (b) on trade and pat-
ent rights under Federal law.
‘‘(B) REPORT.—Not later than 2 years after
the effective date of the regulations under sub-
section (b), the Institute of Medicine shall submit
to Congress a report describing the findings of
the study under subparagraph (A).
‘‘(2) BY THE COMPTROLLER GENERAL.—
‘‘(A) STUDY.—The Comptroller General of
the United States shall conduct a study to deter-
mine the effect of this section on the price of pre-
scription drugs sold to consumers at retail.
‘‘(B) REPORT.—Not later than 18 months
after the effective date of the regulations under
subsection (b), the Comptroller General of the
United States shall submit to Congress a report
describing the findings of the study under sub-
paragraph (A).
‘‘(m) CONSTRUCTION.—Nothing in this section limits
the authority of the Secretary relating to the importation
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of prescription drugs, other than with respect to section
801(d)(1) as provided in this section.
‘‘(n) EFFECTIVENESS OF SECTION.—
‘‘(1) IN GENERAL.—If, after the date that is 1
year after the effective date of the regulations under
subsection (b) and before the date that is 18 months
after the effective date, the Secretary submits to Con-
gress a certification that, in the opinion of the Sec-
retary, based on substantial evidence obtained after
the effective date, the benefits of implementation of
this section do not outweigh any detriment of imple-
mentation of this section, this section shall cease to be
effective as of the date that is 30 days after the date
on which the Secretary submits the certification.
‘‘(2) PROCEDURE.—The Secretary shall not sub-
mit a certification under paragraph (1) unless, after
a hearing on the record under sections 556 and 557
of title 5, United States Code, the Secretary—
‘‘(A)(i) determines that it is more likely
than not that implementation of this section
would result in an increase in the risk to the
public health and safety;
‘‘(ii) identifies specifically, in qualitative
and quantitative terms, the nature of the in-
creased risk;
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‘‘(iii) identifies specifically the causes of the
increased risk; and
‘‘(iv)(I) considers whether any measures can
be taken to avoid, reduce, or mitigate the in-
creased risk; and
‘‘(II) if the Secretary determines that any
measures described in subclause (I) would re-
quire additional statutory authority, submits to
Congress a report describing the legislation that
would be required;
‘‘(B) identifies specifically, in qualitative
and quantitative terms, the benefits that would
result from implementation of this section (in-
cluding the benefit of reductions in the cost of
covered products to consumers in the United
States, allowing consumers to procure needed
medication that consumers might not otherwise
be able to procure without foregoing other neces-
sities of life); and
‘‘(C)(i) compares in specific terms the det-
riment identified under subparagraph (A) with
the benefits identified under subparagraph (B);
and
‘‘(ii) determines that the benefits do not out-
weigh the detriment.
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‘‘(o) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as are nec-
essary to carry out this section.’’.
(b) CONFORMING AMENDMENTS.—The Federal Food,
Drug, and Cosmetic Act is amended—
(1) in section 301(aa) (21 U.S.C. 331(aa)), by
striking ‘‘covered product in violation of section 804’’
and inserting ‘‘prescription drug in violation of sec-
tion 804’’; and
(2) in section 303(a)(6) (21 U.S.C. 333(a)(6), by
striking ‘‘covered product pursuant to section 804(a)’’
and inserting ‘‘prescription drug under section
804(b)’’.
(c) CONDITIONS.—This section shall become effective
only if the Secretary of Health and Human Services cer-
tifies to the Congress that the implementation of this section
will—
(1) pose no additional risk to the public’s health
and safety; and
(2) result in a significant reduction in the cost
of covered products to the American consumer.
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TITLE IX—DRUG COMPETITION
ACT OF 2003
SEC. 901. SHORT TITLE.
This title may be cited as the ‘‘Drug Competition Act
of 2003’’.
SEC. 902. FINDINGS.
Congress finds that—
(1) prescription drug prices are increasing at an
alarming rate and are a major worry of many senior
citizens and American families;
(2) there is a potential for companies with pat-
ent rights regarding brand name drugs and compa-
nies which could manufacture generic versions of such
drugs to enter into financial deals that could tend to
restrain trade and greatly reduce competition and in-
crease prescription drug expenditures for American
citizens; and
(3) enhancing competition among these compa-
nies can significantly reduce prescription drug ex-
penditures for Americans.
SEC. 903. PURPOSES.
The purposes of this title are—
(1) to provide timely notice to the Department of
Justice and the Federal Trade Commission regarding
agreements between companies with patent rights re-
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garding brand name drugs and companies which
could manufacture generic versions of such drugs; and
(2) by providing timely notice, to enhance the ef-
fectiveness and efficiency of the enforcement of the
antitrust and competition laws of the United States.
SEC. 904. DEFINITIONS.
In this title:
(1) ANDA.—The term ‘‘ANDA’’ means an Ab-
breviated New Drug Application, as defined under
section 201(aa) of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 321(aa)).
(2) ASSISTANT ATTORNEY GENERAL.—The term
‘‘Assistant Attorney General’’ means the Assistant At-
torney General in charge of the Antitrust Division of
the Department of Justice.
(3) BRAND NAME DRUG.—The term ‘‘brand name
drug’’ means a drug approved under section 505(c) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(c)).
(4) BRAND
NAME
DRUG
COMPANY.—The term
‘‘brand name drug company’’ means the party that
received Food and Drug Administration approval to
market a brand name drug pursuant to an NDA,
where that drug is the subject of an ANDA, or a
party owning or controlling enforcement of any pat-
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ent listed in the Approved Drug Products With
Therapeutic Equivalence Evaluations of the Food and
Drug Administration for that drug, under section
505(b) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(b)).
(5) 
COMMISSION.—The 
term 
‘‘Commission’’
means the Federal Trade Commission.
(6) GENERIC DRUG.—The term ‘‘generic drug’’
means a product that the Food and Drug Adminis-
tration has approved under section 505(j) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C.
355(j)).
(7) GENERIC DRUG APPLICANT.—The term ‘‘ge-
neric drug applicant’’ means a person who has filed
or received approval for an ANDA under section
505(j) of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(j)).
(8) NDA.—The term ‘‘NDA’’ means a New Drug
Application, as defined under section 505(b) et seq. of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355(b) et seq.)
SEC. 905. NOTIFICATION OF AGREEMENTS.
(a) IN GENERAL.—
(1) REQUIREMENT.—A generic drug applicant
that has submitted an ANDA containing a certifi-
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cation under section 505(j)(2)(vii)(IV) of the Federal
Food, 
Drug, 
and 
Cosmetic 
Act 
(21 
U.S.C.
355(j)(2)(vii)(IV)) and a brand name drug company
that enter into an agreement described in paragraph
(2), prior to the generic drug that is the subject of the
application entering the market, shall each file the
agreement as required by subsection (b).
(2) DEFINITION.—An agreement described in
this paragraph is an agreement regarding—
(A) the manufacture, marketing or sale of
the brand name drug that is the subject of the ge-
neric drug applicant’s ANDA;
(B) the manufacture, marketing or sale of
the generic drug that is the subject of the generic
drug applicant’s ANDA; or
(C) the 180-day period referred to in section
505(j)(5)(B)(iv) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) as it
applies to such ANDA or to any other ANDA
based on the same brand name drug.
(b) FILING.—
(1) AGREEMENT.—The generic drug applicant
and the brand name drug company entering into an
agreement described in subsection (a)(2) shall file
with the Assistant Attorney General and the Commis-
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sion the text of any such agreement, except that the
generic drug applicant and the brand-name drug
company shall not be required to file an agreement
that solely concerns—
(A) purchase orders for raw material sup-
plies;
(B) equipment and facility contracts;
(C) employment or consulting contracts; or
(D) packaging and labeling contracts.
(2) OTHER AGREEMENTS.—The generic drug ap-
plicant and the brand name drug company entering
into an agreement described in subsection (a)(2) shall
file with the Assistant Attorney General and the Com-
mission the text of any other agreements not described
in subsection (a)(2) between the generic drug appli-
cant and the brand name drug company which are
contingent upon, provide a contingent condition for,
or are otherwise related to an agreement which must
be filed under this title.
(3) DESCRIPTION.—In the event that any agree-
ment required to be filed by paragraph (1) or (2) has
not been reduced to text, both the generic drug appli-
cant and the brand name drug company shall file
written descriptions of the non-textual agreement or
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agreements that must be filed sufficient to reveal all
of the terms of the agreement or agreements.
SEC. 906. FILING DEADLINES.
Any filing required under section 5 shall be filed with
the Assistant Attorney General and the Commission not
later than 10 business days after the date the agreements
are executed.
SEC. 907. DISCLOSURE EXEMPTION.
Any information or documentary material filed with
the Assistant Attorney General or the Commission pursuant
to this title shall be exempt from disclosure under section
552 of title 5, and no such information or documentary ma-
terial may be made public, except as may be relevant to
any administrative or judicial action or proceeding. Noth-
ing in this section is intended to prevent disclosure to either
body of Congress or to any duly authorized committee or
subcommittee of the Congress.
SEC. 908. ENFORCEMENT.
(a) CIVIL PENALTY.—Any brand name drug company
or generic drug applicant which fails to comply with any
provision of this title shall be liable for a civil penalty of
not more than $11,000, for each day during which such en-
tity is in violation of this title. Such penalty may be recov-
ered in a civil action brought by the United States, or
brought by the Commission in accordance with the proce-
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dures established in section 16(a)(1) of the Federal Trade
Commission Act (15 U.S.C. 56(a)).
(b) COMPLIANCE AND EQUITABLE RELIEF.—If any
brand name drug company or generic drug applicant fails
to comply with any provision of this title, the United States
district court may order compliance, and may grant such
other equitable relief as the court in its discretion deter-
mines necessary or appropriate, upon application of the As-
sistant Attorney General or the Commission.
SEC. 909. RULEMAKING.
The Commission, with the concurrence of the Assistant
Attorney General and by rule in accordance with section
553 of title 5 United States Code, consistent with the pur-
poses of this title—
(1) may define the terms used in this title;
(2) may exempt classes of persons or agreements
from the requirements of this title; and
(3) may prescribe such other rules as may be
necessary and appropriate to carry out the purposes
of this title.
SEC. 910. SAVINGS CLAUSE.
Any action taken by the Assistant Attorney General
or the Commission, or any failure of the Assistant Attorney
General or the Commission to take action, under this title
shall not bar any proceeding or any action with respect
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to any agreement between a brand name drug company and
a generic drug applicant at any time under any other pro-
vision of law, nor shall any filing under this title constitute
or create a presumption of any violation of any antitrust
or competition laws.
SEC. 911. EFFECTIVE DATE.
This title shall—
(1) take effect 30 days after the date of enact-
ment of this title; and
(2) shall apply to agreements described in section
905 that are entered into 30 days after the date of en-
actment of this title.
Amend the title so as to read: ‘‘An Act to amend
title XVIII of the Social Security Act to provide for a vol-
untary prescription drug benefit under the medicare pro-
gram and to strengthen and improve the medicare pro-
gram, and for other purposes.’’.
Attest:
Secretary.