the threshold amount (as defined in section 
24(b)(2)). 
‘‘(2) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—The credit allowed under subsection (a) for 
any taxable year shall not exceed the excess of—
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section and 
sections 23 and 25B) and section 27 for the 
taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) APPLICABLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—The term ‘applicable 
individual’ means, with respect to any taxable 
year, any individual who has been certified, be-
fore the due date for filing the return of tax for 
the taxable year (without extensions), by a phy-
sician (as defined in section 1861(r)(1) of the 
Social Security Act) as being an individual with 
long-term care needs described in subparagraph 
(B) for a period—
‘‘(i) which is at least 180 consecutive 
days, and
‘‘(ii) a portion of which occurs within 
the taxable year. 
Such term shall not include any individual oth-
erwise meeting the requirements of the pre-
ceding sentence unless within the 391⁄2 month 
period ending on such due date (or such other 
period as the Secretary prescribes) a physician 
(as so defined) has certified that such indi-
vidual meets such requirements. 
‘‘(B) INDIVIDUALS WITH LONG-TERM CARE 
NEEDS.—An individual is described in this sub-
paragraph if the individual meets any of the fol-
lowing requirements: 
‘‘(i) The individual is at least 6 years 
of age and—
‘‘(I) is unable to perform (with-
out substantial assistance from an-
other individual) at least 3 activities 
of daily living (as defined in section 
7702B(c)(2)(B)) due to a lack of 
functional capacity, or 
‘‘(II) requires substantial super-
vision to protect such individual from 
threats to health and safety due to se-
vere cognitive impairment and is un-
able to perform at least 1 activity of 
daily living (as so defined) or to the 
extent provided in regulations pre-
scribed by the Secretary (in consulta-
tion with the Secretary of Health and 
Human Services), is unable to engage 
in age appropriate activities. 
‘‘(ii) The individual is at least 2 but 
not 6 years of age and is unable due to a 
loss of functional capacity to perform 
(without substantial assistance from an-
other individual) at least 2 of the following 
activities: eating, transferring, or mobility. 
‘‘(iii) The individual is under 2 years 
of age and requires specific durable med-
ical equipment by reason of a severe health 
condition or requires a skilled practitioner 
trained to address the individual’s condi-
tion to be available if the individual’s par-
ents or guardians are absent. 
‘‘(2) ELIGIBLE CAREGIVER.—
‘‘(A) IN GENERAL.—A taxpayer shall be 
treated as an eligible caregiver for any taxable 
year with respect to the following individuals: 
‘‘(i) The taxpayer.
‘‘(ii) The taxpayer’s spouse. 
‘‘(iii) An individual with respect to 
whom the taxpayer is allowed a deduction 
under section 151 for the taxable year. 
‘‘(iv) An individual who would be de-
scribed in clause (iii) for the taxable year 
if section 151(c)(1)(A) were applied by 
substituting for the exemption amount an 
amount equal to 200 percent of the pov-
erty level determined by using criteria of 
poverty established by the Bureau of the 
Census. 
‘‘(v) An individual who would be de-
scribed in clause (iii) for the taxable year 
if—
‘‘(I) the requirements of clause 
(iv) are met with respect to the indi-
vidual, and 
‘‘(II) the requirements of sub-
paragraph (B) are met with respect to 
the individual in lieu of the support 
test of section 152(a). 
‘‘(B) RESIDENCY
TEST.—The require-
ments of this subparagraph are met if an indi-
vidual has as his principal place of abode the 
home of the taxpayer and—
‘‘(i) in the case of an individual who 
is an ancestor or descendant of the tax-
payer or the taxpayer’s spouse, is a mem-
ber of the taxpayer’s household for over 
half the taxable year, or 
‘‘(ii) in the case of any other indi-
vidual, is a member of the taxpayer’s 
household for the entire taxable year. 
‘‘(C) SPECIAL RULES WHERE MORE THAN 
1 ELIGIBLE CAREGIVER.—
‘‘(i) IN GENERAL.—If more than 1 in-
dividual is an eligible caregiver with re-
spect to the same applicable individual for 
taxable years ending with or within the 
same calendar year, a taxpayer shall be 
treated as the eligible caregiver if each 
such individual (other than the taxpayer) 
files a written declaration (in such form 
and manner as the Secretary may pre-
scribe) that such individual will not claim 
such applicable individual for the credit 
under this section.
able under this section in the case of a taxable year cov-
ering a period of less than 12 months.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 35A of such 
Code’’. 
(2) Paragraph (2) of section 6213(g) of such 
Code is amended by striking ‘‘and’’ at the end of 
subparagraph (L), by striking the period at the end 
of subparagraph (M) and inserting ‘‘, and’’, and by 
inserting after subparagraph (M) the following new 
subparagraph: 
‘‘(N) an omission of a correct TIN or phy-
sician identification required under section 
25C(d) (relating to long-term care tax credit) to 
be included on a return.’’
(3) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 35 the following new item:
‘‘Sec. 35A. Long-term care tax credit.’’
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2002.
SEC. 3. DEPARTMENT OF HEALTH AND HUMAN SERVICES 
PROGRAMS 
FOR 
PATIENTS 
WITH 
FATAL 
CHRONIC ILLNESSES. 
(a) ESTABLISHMENT OF PROGRAMS.—The Secretary 
of Health and Human Services shall carry out research, 
demonstration, and education programs with respect to 
fatal chronic illness through the Public Health Service. 
(b) STUDIES
ON END-OF-LIFE CARE.—The Sec-
retary shall conduct studies on end-of-life care through all 
relevant agencies and through the Assistant Secretary for 
Planning and Evaluation. Such studies shall include an 
examination of the development of practice parameters ap-
plicable to such care as well as research regarding such 
care. Such studies shall also include an annual report from 
the Secretary to the appropriate committees for oversight 
in Congress and to the Special Committee on Aging in 
the Senate on service delivery and quality of life for per-
sons living through fatal chronic illness and their families 
and professional caregivers. 
(c) HEALTH RESOURCES AND SERVICES ADMINIS-
TRATION.—
(1) IN GENERAL.—In carrying out subsection 
(a), the Secretary, acting through the Administrator 
of the Health Resources and Services Administra-
tion, shall carry out research, demonstration, and 
education programs toward improving the delivery of
appropriate health and support services for patients 
with fatal chronic illnesses. 
(2) HEALTH CENTERS.—As determined appro-
priate by the Secretary, paragraph (1) may be car-
ried out through the program under section 330 of 
the Public Health Service Act (relating to commu-
nity and migrant health centers and health centers 
regarding homeless individuals and residents of pub-
lic housing), including by designating individuals 
with fatal chronic illnesses as medically underserved 
populations. 
(3) CAREGIVERS.—Programs under paragraph 
(1) shall include activities regarding appropriate 
support services for caregivers for patients with fatal 
chronic illness, including respite care. 
(4) HEALTH
PROFESSIONS
TRAINING.—Pro-
grams under paragraph (1) shall include making 
awards of grants or contracts to public and non-
profit private entities for the purpose of training 
health professionals, including students attending 
health professions schools, in the care of patients 
with fatal chronic illnesses. Such training shall in-
clude training in the provision of appropriate pallia-
tive care and appropriate referral to hospices, and 
training provided as continuing education.
(5) INITIATIVE.—Programs under paragraph 
(1) shall include an initiative to coordinate innova-
tion, evaluation, and service delivery relating to fatal 
chronic illnesses. 
(d) AGENCY
FOR HEALTHCARE RESEARCH
AND 
QUALITY.—
(1) IN
GENERAL.—In carrying out section 
912(c) of the Public Health Service Act, the Sec-
retary, acting through the Director of the Agency 
for Healthcare Research and Quality, shall, with re-
spect to patients with fatal chronic illnesses—
(A) identify the causes of preventable 
health care errors and patient injury in health 
care delivery, including errors of inadequate 
mobilization of services to the home, inadequate 
continuity of caregivers, inadequate symptom 
prevention, management, and relief, or inad-
equate advance care planning; 
(B) develop, demonstrate, and evaluate 
strategies for reliable performance of the care 
system, including reducing errors and improv-
ing patient safety and health outcomes; and 
(C) disseminate such effective strategies 
throughout the health care industry.
(2) 
GRANTS.—In 
carrying 
out 
paragraph 
(1)(A), the Secretary shall make grants for the pur-
pose of developing reliable and current data and in-
sight as to the merits and efficiencies of various 
strategies for providing health care, including pallia-
tive and hospice care, and social services for patients 
with fatal chronic illnesses. 
(e) CENTERS FOR DISEASE CONTROL AND PREVEN-
TION.—The Director of the Centers for Disease Control 
and Prevention shall expand activities with respect to epi-
demiology and public health in fatal chronic illness. Such 
activities may include contracting with the Institute of 
Medicine or another national interest non-profit organiza-
tion to provide a review of the status of care for the end 
of life, which review shall be included by the Secretary in 
the annual reports to Congress under subsection (h). 
(f) NATIONAL INSTITUTES OF HEALTH.—
(1) EXPANSION OF ACTIVITIES.—The Director 
of the National Institutes of Health (in this sub-
section referred to as the ‘‘Director’’) shall expand, 
intensify, and coordinate the activities of the Na-
tional Institutes of Health with respect to research 
on fatal chronic illness. Such activities shall include 
programs, requests for proposals, study section 
membership, advisory council membership, and
training programs to support rapid and substantial 
improvements in understanding—
(A) mechanisms of disability and suffering 
in fatal chronic illness and the relief and man-
agement of that disability and suffering 
through to end of life; and 
(B) human resources, service delivery ar-
rangements, technology, and financing that 
would be most useful in ensuring comfort and 
dignity for individuals with fatal chronic illness, 
and in relieving the burden for family and pro-
fessional caregivers. 
(2) 
ADMINISTRATION.—The 
Director 
shall 
carry out this subsection acting through the Direc-
tors of every Institute within the National Institutes 
of Health that has at least one fatal chronic illness 
in its purview. 
(3) COLLABORATION.—In carrying out this sub-
section, the Director of the National Institutes of 
Health shall collaborate with the Department of Vet-
erans Affairs, the Agency for Healthcare Research 
and Quality, and any other agency that the Director 
determines appropriate. The Secretary of Veterans 
Affairs and the Director of the Agency for
Healthcare Research and Quality shall assist in such 
collaboration. 
(4) RESPONSIBILITIES OF INSTITUTES.—Each 
Institute within the National Institutes of Health 
that has fatal chronic illness in its purview shall es-
tablish a plan for improving understanding of the 
mechanisms of disability and suffering in fatal 
chronic illness and the relief and management of 
that disability and suffering through to end of life. 
Since most Americans now die of chronic heart or 
lung failure, cancer, stroke, dementia, or multifacto-
rial frailty, each such Institute shall develop and im-
plement a strategic plan and a set of projects that 
aim primarily to ensure that affected patients and 
their families can live through advanced illness and 
death comfortably and meaningfully. 
(5) CENTERS OF EXCELLENCE.—
(A) IN GENERAL.—In carrying out para-
graph (1), the Director shall make awards of 
grants and contracts to public or nonprofit pri-
vate entities for the establishment and oper-
ation of centers of excellence to carry out re-
search, demonstration, and education programs 
regarding fatal chronic illness, including pro-
grams regarding palliative care.
(B) DESIGNATION.—In carrying out this 
subsection, the Director shall designate at least 
2 Claude D. Pepper Older Americans Independ-
ence Centers (supported by the National Insti-
tute on Aging), 2 program projects of the Na-
tional, Heart, Lung, and Blood Institute, and 2 
comprehensive cancer centers (supported by the 
National Cancer Institute) to provide education 
and information support and research data and 
methods leadership for substantial and rapid 
improvements in the understanding of the 
mechanisms of disability and suffering in fatal 
chronic illness and the relief and management 
of that disability and suffering through to the 
end of life. 
(C) RESEARCH.—Each center established 
or operated under subparagraph (A) or des-
ignated under subparagraph (B) shall conduct 
basic and clinical research into fatal chronic ill-
ness. 
(D) CERTAIN ACTIVITIES.—The Secretary 
shall ensure that, with respect to the geographic 
area in which a center of excellence under sub-
paragraph (A) is located, the activities of the 
center include—
(i) providing information and edu-
cation regarding fatal chronic illness to 
health professionals and the public; 
(ii) serving as a resource through 
which health professionals, and patients 
and their caregivers, can plan and coordi-
nate the provision of health and support 
services regarding fatal chronic illness; and 
(iii) providing training and support of 
implementation of quality improvement. 
(g) MEDICARE PILOT PROGRAMS FOR TREATMENT 
OF FATAL CHRONIC ILLNESSES.—
(1) ESTABLISHMENT.—The Secretary, in all 
relevant parts of the Department of Health and 
Human Services, including the Centers for Medicare 
& Medicaid Services and the Office of the Assistant 
Secretary for Planning and Evaluation, shall provide 
for pilot programs under this subsection. The pilot 
programs shall be developed under a coordinated na-
tional effort in order to demonstrate innovative, ef-
fective means of delivering care to Medicare bene-
ficiaries with fatal chronic illnesses under the Medi-
care program. The pilot programs shall be completed 
within 5 years after the date that funds are first ap-
propriated under this subsection.
(2) DESIGN.—The pilot programs under this 
subsection shall be designed to learn how—
(A) to effectively and efficiently deliver 
quality care to the fatally chronically ill; 
(B) to provide and maintain continuity of 
care for the fatally chronically ill; 
(C) to provide advance care planning to 
the fatally chronically ill; 
(D) to determine what rate and strategies 
for payment are most appropriate; 
(E) to deliver emergency care for the fa-
tally chronically ill; 
(F) to facilitate access to hospice care 
when the Medicare beneficiary becomes eligible 
for such care; 
(G) to develop and estimate the effect of 
potential alternative severity criteria for eligi-
bility of specially tailored programs; 
(H) to test the effectiveness and costs of 
new strategies for family caregivers support; 
(I) to implement a clinical services and 
payment program that uses thresholds of sever-
ity to define the onset of the need for com-
prehensive end-of-life services;
(J) to test the merits of using severity cri-
teria (relating to fatal chronic illness) in deter-
mining eligibility for the Medicare hospice pro-
gram, but only when use of such criteria ex-
pands access to hospice care to individuals who 
are not yet terminally ill (as that term is de-
fined at section 1861(dd)(3)(A) of the Social 
Security Act); and 
(K) to arrange financial incentives so that 
substantially diminished payments arise when 
care providers fail to ensure timely advance 
care planning, symptom prevention, manage-
ment, and relief, or continuity of care across 
time and settings. 
(3) CONDUCT OF PILOT PROGRAMS.—The Sec-
retary shall conduct pilot programs in at least 6 
sites and in at least 3 States. 
(4) REPORT
TO
CONGRESS.—The Secretary 
shall submit to Congress a report on the pilot pro-
grams under this subsection. Such report shall in-
clude recommendations regarding whether the pilot 
programs should become a permanent part of the 
Medicare program. 
(h) ANNUAL REPORTS.—The Secretary, in consulta-
tion with the Secretary of Veterans Affairs and other ap-
propriate Federal agencies, shall submit an annual report 
to Congress on end-of-life care and on the research, dem-
onstration, and education programs and studies conducted 
under this section. The Centers for Disease Control and 
Prevention shall be the lead agency for integrating and 
preparing the annual reports under this subsection unless 
the Secretary designates otherwise. 
(i) DEFINITIONS.—For purposes of this section: 
(1) The term ‘‘fatal chronic illness’’ means a 
disease (or diseases), condition (or conditions), or 
disorder (or disorders) that ordinarily worsens and 
causes death and that causes a physical or mental 
disability or periodic episodes of significant loss of 
functional capacity. 
(2) The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. 
(j) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated—
(1) such sums as may be necessary to carry out 
subsections (a), (b), (e), and (f); 
(2) $50,000,000 for the 5-fiscal-year period (be-
ginning with fiscal year 2004) to carry out sub-
section (c), excluding paragraph (5) of that sub-
section;
(3) $100,000,000 for the 3-fiscal-year period 
(beginning with fiscal year 2004) to carry out sub-
section (c)(5); 
(4) $20,000,000 for the 5-fiscal-year period (be-
ginning with fiscal year 2004) to carry out sub-
section (d); 
(5) to carry out subsection (g) for each of fiscal 
years 2003 through 2007—
(A) $50,000,000 for the purposes of con-
ducting evaluations of pilot programs; and 
(B) $50,000,000 for the purpose of pro-
viding clinical services under pilot programs; 
and 
(6) $500,000 for each fiscal year during the 5-
fiscal-year period beginning with fiscal year 2004 to 
carry out subsection (h).
SEC. 4. PROGRAMS THROUGH DEPARTMENT OF VETERANS 
AFFAIRS REGARDING PATIENTS WITH FATAL 
CHRONIC ILLNESSES. 
(a) IN GENERAL.—(1) Chapter 73 of title 38, United 
States Code, is amended by adding at the end of sub-
chapter II the following new section:
‘‘§ 7324. Programs for patients with fatal chronic ill-
nesses 
‘‘(a) ESTABLISHMENT OF PROGRAMS.—(1) The Sec-
retary shall develop and carry out programs to improve 
the delivery of appropriate health and support services for 
patients with fatal chronic illnesses. As part of such pro-
grams, the Secretary shall seek to develop services in col-
laboration with community service providers serving popu-
lations of persons other than veterans, especially those 
populations that use the Medicare program. 
‘‘(2) For purposes of this section, community service 
providers are entities outside the Department that provide 
health care services to persons in the communities in 
which they are located. 
‘‘(b) ROLE OF GRECCS AND HEALTH SERVICES RE-
SEARCH.—The Secretary shall take appropriate steps to 
involve in programs under this section both geriatric re-
search, education, and clinical centers under section 7314 
of this title and activities of Health Services research and 
quality improvement initiatives of the Department. As 
part of such steps, the Secretary shall seek to target the 
work of such centers and initiatives to improve care for 
veterans with fatal chronic illnesses. 
‘‘(c) TRAINING.—In conducting programs of profes-
sional training and staff development for health-care per-
sonnel of the Department and persons being trained
through health-care programs conducted by the Secretary, 
the Secretary shall ensure that such programs include 
training in pain relief and end-of-life care for persons with 
fatal chronic illnesses. Such training shall address symp-
toms, advance care planning, and quality improvement for 
those with fatal chronic illnesses. 
‘‘(d) ANNUAL REPORT.—The Secretary shall prepare 
an annual report on care for veterans with fatal chronic 
illnesses and the activities of the Secretary under this sec-
tion. The Secretary shall furnish such report to the Sec-
retary of Health and Human Services each year in suffi-
cient time for inclusion in the annual report of that Sec-
retary under section 3(j) of the Living Well with Fatal 
Chronic Illness Act of 2003. 
‘‘(e) COOPERATION WITH COMMUNITY SERVICE PRO-
VIDERS.—(1) In carrying out this section, the Secretary 
shall, to the extent practicable, take appropriate steps, 
through collaborative agreements or otherwise, to cooper-
ate with community service providers that provide home 
and hospice care. 
‘‘(2) Such steps shall, to the extent practicable, in-
clude—
‘‘(A) developing documentation of advance care 
plans for persons with fatal chronic illnesses that are 
acceptable to all providers of care for those persons;
‘‘(B) developing service programs for persons 
with fatal chronic illnesses under which Department 
facilities or personnel may be used for part of the 
array of services provided to such persons; and 
‘‘(C) developing protocols that facilitate the 
placement with community service providers sup-
ported by the medicare or medicaid programs of vet-
erans with fatal chronic illnesses when such a place-
ment would be more efficient or effective for the 
timely provision of services for the community in 
which the facilities are located and for such veterans 
than the provision of those services directly through 
Department facilities. 
‘‘(3) When the Secretary, as part of service programs 
authorized by this subsection, provides services to a person 
with a fatal chronic illness who is not a veteran, the Sec-
retary shall, as a condition of providing such services, be 
reimbursed by appropriate community service providers 
for the costs of such services. 
‘‘(f) SUPPORT FOR VOLUNTEER AND COMMUNITY 
SUPPORT OF VETERANS LIVING AT HOME.—The Sec-
retary shall make grants to support volunteer and commu-
nity support of veterans living at home who have fatal 
chronic illnesses. The Secretary may establish the min-
imum number of volunteers an entity must have in order 
to be eligible for a grant under this subsection. 
‘‘(g) DEFINITION.—For purposes of this section, the 
term ‘fatal chronic illness’ means a disease (or diseases), 
condition (or conditions), or disorder (or disorders) that 
ordinarily worsens and causes death and that causes a 
physical or mental disability or periodic episodes of signifi-
cant loss of functional capacity.’’.
(2) The table of sections at the beginning of such 
chapter is amended by inserting after the item relating 
to section 7323 the following new item:
‘‘7324. Programs for patients with fatal chronic illnesses.’’.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of Vet-
erans Affairs to carry out section 7324 of title 38, United 
States Code, as added by subsection (a), the amount of 
$5,000,000 for each of fiscal years 2003 through 2007.
Æ