225 
chose to opt out of participating in the public 
health insurance option may opt back in; and 
(D) there shall be an annual enrollment 
period in which providers may decide whether 
to participate in the public health insurance op-
tion. 
(3) RULEMAKING.—Not later than 18 months 
before the first day of Y1, the Secretary shall pro-
mulgate rules (pursuant to notice and comment) for 
the process described in paragraph (1). 
(c) LIMITATIONS ON REVIEW.—There shall be no ad-
ministrative or judicial review of a payment rate or meth-
odology established under this section or under section 
324. 
SEC. 324. MODERNIZED PAYMENT INITIATIVES AND DELIV-
ERY SYSTEM REFORM. 
(a) IN GENERAL.—For plan years beginning with Y1, 
the Secretary may utilize innovative payment mechanisms 
and policies to determine payments for items and services 
under the public health insurance option. The payment 
mechanisms and policies under this section may include 
patient-centered medical home and other care manage-
ment payments, accountable care organizations, value- 
based purchasing, bundling of services, differential pay-
226 
ment rates, performance or utilization based payments, 
partial capitation, and direct contracting with providers. 
(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 
The Secretary shall design and implement the payment 
mechanisms and policies under this section in a manner 
that— 
(1) seeks to— 
(A) improve health outcomes; 
(B) reduce health disparities (including ra-
cial, ethnic, and other disparities); 
(C) provide efficient and affordable care; 
(D) address geographic variation in the 
provision of health services; or 
(E) prevent or manage chronic illness; and 
(2) promotes care that is integrated, patient- 
centered, quality, and efficient. 
(c) ENCOURAGING THE USE OF HIGH VALUE SERV-
ICES.—To the extent allowed by the benefit standards ap-
plied to all Exchange-participating health benefits plans, 
the public health insurance option may modify cost-shar-
ing and payment rates to encourage the use of services 
that promote health and value. 
(d) PROMOTION OF DELIVERY SYSTEM REFORM.— 
The Secretary shall monitor and evaluate the progress of 
payment and delivery system reforms under this Act and
227 
shall seek to implement such reforms subject to the fol-
lowing: 
(1) To the extent that the Secretary finds a 
payment and delivery system reform successful in 
improving quality and reducing costs, the Secretary 
shall implement such reform on as large a geo-
graphic scale as practical and economical. 
(2) The Secretary may delay the implementa-
tion of such a reform in geographic areas in which 
such implementation would place the public health 
insurance option at a competitive disadvantage. 
(3) The Secretary may prioritize implementa-
tion of such a reform in high cost geographic areas 
or otherwise in order to reduce total program costs 
or to promote high value care. 
(e) NON-UNIFORMITY PERMITTED.—Nothing in this 
subtitle shall prevent the Secretary from varying payments 
based on different payment structure models (such as ac-
countable care organizations and medical homes) under 
the public health insurance option for different geographic 
areas. 
SEC. 325. PROVIDER PARTICIPATION. 
(a) IN GENERAL.—The Secretary shall establish con-
ditions of participation for health care providers under the 
public health insurance option.
228 
(b) LICENSURE OR CERTIFICATION.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall not allow a health 
care provider to participate in the public health in-
surance option unless such provider is appropriately 
licensed, certified, or otherwise permitted to practice 
under State law. 
(2) SPECIAL RULE FOR IHS FACILITIES AND 
PROVIDERS.—The requirements under paragraph (1) 
shall not apply to— 
(A) a facility that is operated by the In-
dian Health Service; 
(B) a facility operated by an Indian Tribe 
or tribal organization under the Indian Self-De-
termination Act (Public Law 93–638); 
(C) a health care professional employed by 
the Indian Health Service; or 
(D) a health care professional— 
(i) who is employed to provide health 
care services in a facility operated by an 
Indian Tribe or tribal organization under 
the Indian Self-Determination Act; and 
(ii) who is licensed or certified in any 
State. 
(c) PAYMENT TERMS FOR PROVIDERS.—
229 
(1) PHYSICIANS.—The Secretary shall provide 
for the annual participation of physicians under the 
public health insurance option, for which payment 
may be made for services furnished during the year, 
in one of 2 classes: 
(A) PREFERRED PHYSICIANS.—Those phy-
sicians who agree to accept the payment under 
section 323 (without regard to cost-sharing) as 
the payment in full. 
(B) 
PARTICIPATING, 
NON-PREFERRED 
PHYSICIANS.—Those physicians who agree not 
to impose charges (in relation to the payment 
described in section 323 for such physicians) 
that exceed the sum of the in-network cost- 
sharing plus 15 percent of the total payment 
for each item and service. The Secretary shall 
reduce the payment described in section 323 for 
such physicians. 
(2) OTHER
PROVIDERS.—The Secretary shall 
provide for the participation (on an annual or other 
basis specified by the Secretary) of health care pro-
viders (other than physicians) under the public 
health insurance option under which payment shall 
only be available if the provider agrees to accept the
230 
payment under section 323 (without regard to cost- 
sharing) as the payment in full. 
(d) EXCLUSION OF CERTAIN PROVIDERS.—The Sec-
retary shall exclude from participation under the public 
health insurance option a health care provider that is ex-
cluded from participation in a Federal health care pro-
gram (as defined in section 1128B(f) of the Social Secu-
rity Act). 
SEC. 326. APPLICATION OF FRAUD AND ABUSE PROVI-
SIONS. 
Provisions of civil law identified by the Secretary by 
regulation, in consultation with the Inspector General of 
the Department of Health and Human Services, that im-
pose sanctions with respect to waste, fraud, and abuse 
under Medicare, such as sections 3729 through 3733 of 
title 31, United States Code (commonly known as the 
False Claims Act), shall also apply to the public health 
insurance option. 
SEC. 327. APPLICATION OF HIPAA INSURANCE REQUIRE-
MENTS. 
The requirements of sections 2701 through 2792 of 
the Public Health Service Act shall apply to the public 
health insurance option in the same manner as they apply 
to health insurance coverage offered by a health insurance 
issuer in the individual market.
231 
SEC. 328. APPLICATION OF HEALTH INFORMATION PRI-
VACY, SECURITY, AND ELECTRONIC TRANS-
ACTION REQUIREMENTS. 
Part C of title XI of the Social Security Act, relating 
to standards for protections against the wrongful disclo-
sure of individually identifiable health information, health 
information security, and the electronic exchange of health 
care information, shall apply to the public health insur-
ance option in the same manner as such part applies to 
other health plans (as defined in section 1171(5) of such 
Act). 
SEC. 329. ENROLLMENT IN PUBLIC HEALTH INSURANCE 
OPTION IS VOLUNTARY. 
Nothing in this division shall be construed as requir-
ing anyone to enroll in the public health insurance option. 
Enrollment in such option is voluntary. 
SEC. 330. ENROLLMENT IN PUBLIC HEALTH INSURANCE 
OPTION BY MEMBERS OF CONGRESS. 
Notwithstanding any other provision of this Act, 
Members of Congress may enroll in the public health in-
surance option. 
SEC. 331. REIMBURSEMENT OF SECRETARY OF VETERANS 
AFFAIRS. 
The Secretary of Health and Human Services shall 
seek to enter into a memorandum of understanding with 
the Secretary of Veterans Affairs regarding the recovery
232 
of costs related to non-service-connected care or services 
provided by the Secretary of Veterans Affairs to an indi-
vidual covered under the public health insurance option 
in a manner consistent with recovery of costs related to 
non-service-connected care from private health insurance 
plans. 
Subtitle C—Individual 
Affordability Credits 
SEC. 341. AVAILABILITY THROUGH HEALTH INSURANCE EX-
CHANGE. 
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this subtitle, in the case of an affordable credit 
eligible individual enrolled in an Exchange-participating 
health benefits plan— 
(1) the individual shall be eligible for, in accord-
ance with this subtitle, affordability credits con-
sisting of— 
(A) an affordability premium credit under 
section 343 to be applied against the premium 
for the Exchange-participating health benefits 
plan in which the individual is enrolled; and 
(B) an affordability cost-sharing credit 
under section 344 to be applied as a reduction 
of the cost-sharing otherwise applicable to such 
plan; and
233 
(2) the Commissioner shall pay the QHBP of-
fering entity that offers such plan from the Health 
Insurance Exchange Trust Fund the aggregate 
amount of affordability credits for all affordable 
credit eligible individuals enrolled in such plan. 
(b) APPLICATION.— 
(1) IN GENERAL.—An Exchange eligible indi-
vidual may apply to the Commissioner through the 
Health Insurance Exchange or through another enti-
ty under an arrangement made with the Commis-
sioner, in a form and manner specified by the Com-
missioner. The Commissioner through the Health 
Insurance Exchange or through another public enti-
ty under an arrangement made with the Commis-
sioner shall make a determination as to eligibility of 
an individual for affordability credits under this sub-
title. The Commissioner shall establish a process 
whereby, on the basis of information otherwise avail-
able, individuals may be deemed to be affordable 
credit eligible individuals. In carrying this subtitle, 
the Commissioner shall establish effective methods 
that ensure that individuals with limited English 
proficiency are able to apply for affordability credits. 
(2) USE
OF
STATE
MEDICAID
AGENCIES.—If 
the Commissioner determines that a State Medicaid
234 
agency has the capacity to make a determination of 
eligibility for affordability credits under this subtitle 
and under the same standards as used by the Com-
missioner, under the Medicaid memorandum of un-
derstanding under section 305(e)(2)— 
(A) the State Medicaid agency is author-
ized to conduct such determinations for any Ex-
change-eligible individual who requests such a 
determination; and 
(B) the Commissioner shall reimburse the 
State Medicaid agency for the costs of con-
ducting such determinations. 
(3) MEDICAID SCREEN AND ENROLL OBLIGA-
TION.—In the case of an application made under 
paragraph (1), there shall be a determination of 
whether the individual is a Medicaid-eligible indi-
vidual. If the individual is determined to be so eligi-
ble, the Commissioner, through the Medicaid memo-
randum of understanding under section 305(e)(2), 
shall provide for the enrollment of the individual 
under the State Medicaid plan in accordance with 
such Medicaid memorandum of understanding. In 
the case of such an enrollment, the State shall pro-
vide for the same periodic redetermination of eligi-
bility under Medicaid as would otherwise apply if the
235 
individual had directly applied for medical assistance 
to the State Medicaid agency. 
(4) APPLICATION
AND
VERIFICATION
OF
RE-
QUIREMENT OF CITIZENSHIP OR LAWFUL PRESENCE 
IN THE UNITED STATES.— 
(A) REQUIREMENT.—No individual shall 
be an affordable credit eligible individual (as 
defined in section 342(a)(1)) unless the indi-
vidual is a citizen or national of the United 
States or is lawfully present in a State in the 
United States (other than as a nonimmigrant 
described in a subparagraph (excluding sub-
paragraphs (K), (T), (U), and (V)) of section 
101(a)(15) of the Immigration and Nationality 
Act). 
(B) DECLARATION
OF
CITIZENSHIP
OR 
LAWFUL IMMIGRATION STATUS.—No individual 
shall be an affordable credit eligible individual 
unless there has been a declaration made, in a 
form and manner specified by the Health 
Choices Commissioner similar to the manner re-
quired under section 1137(d)(1) of the Social 
Security Act and under penalty of perjury, that 
the individual—
236 
(i) is a citizen or national of the 
United States; or 
(ii) is not such a citizen or national 
but is lawfully present in a State in the 
United States (other than as a non-
immigrant described in a subparagraph 
(excluding subparagraphs (K), (T), (U), 
and (V)) of section 101(a)(15) of the Im-
migration and Nationality Act). 
Such declaration shall be verified in accordance 
with subparagraph (C) or (D), as the case may 
be. 
(C) VERIFICATION
PROCESS
FOR
CITI-
ZENS.— 
(i) IN GENERAL.—In the case of an 
individual making the declaration described 
in subparagraph (B)(i), subject to clause 
(ii), section 1902(ee) of the Social Security 
Act shall apply to such declaration in the 
same manner as such section applies to a 
declaration described in paragraph (1) of 
such section. 
(ii) SPECIAL RULES.—In applying sec-
tion 1902(ee) of such Act under clause 
(i)—
237 
(I) any reference in such section 
to a State is deemed a reference to 
the Commissioner (or other public en-
tity making the eligibility determina-
tion); 
(II) any reference to medical as-
sistance or enrollment under a State 
plan is deemed a reference to provi-
sion of affordability credits under this 
subtitle; 
(III) a reference to a newly en-
rolled individual under paragraph 
(2)(A) of such section is deemed a ref-
erence to an individual newly in re-
ceipt of an affordability credit under 
this subtitle; 
(IV) approval by the Secretary 
shall not be required in applying para-
graph (2)(B)(ii) of such section; 
(V) paragraph (3) of such section 
shall not apply; and 
(VI) before the end of Y2, the 
Health Choices Commissioner, in con-
sultation with the Commissioner of 
Social Security, may extend the peri-
238 
ods specified in paragraph (1)(B)(ii) 
of such section. 
(D) VERIFICATION PROCESS FOR NONCITI-
ZENS.— 
(i) IN GENERAL.—In the case of an 
individual making the declaration described 
in subparagraph (B)(ii), subject to clause 
(ii), the verification procedures of para-
graphs (2) through (5) of section 1137(d) 
of the Social Security Act shall apply to 
such declaration in the same manner as 
such procedures apply to a declaration de-
scribed in paragraph (1) of such section. 
(ii) SPECIAL
RULES.—In applying 
such paragraphs of section 1137(d) of such 
Act under clause (i)— 
(I) any reference in such para-
graphs to a State is deemed a ref-
erence to the Health Choices Commis-
sioner; and 
(II) any reference to benefits 
under a program is deemed a ref-
erence to affordability credits under 
this subtitle.
239 
(iii) APPLICATION
TO
STATE-BASED 
EXCHANGES.—In the case of the applica-
tion of the verification process under this 
subparagraph to a State-based Health In-
surance Exchange approved under section 
308, section 1137(e) of such Act shall 
apply to the Health Choices Commissioner 
in relation to the State. 
(E) 
ANNUAL
REPORTS.—The 
Health 
Choices Commissioner shall report to Congress 
annually on the number of applicants for af-
fordability credits under this subtitle, their citi-
zenship or immigration status, and the disposi-
tion of their applications. Such report shall be 
made publicly available and shall include infor-
mation on— 
(i) the number of applicants whose 
declaration of citizenship or immigration 
status, name, or social security account 
number was not consistent with records 
maintained by the Commissioner of Social 
Security or the Department of Homeland 
Security and, of such applicants, the num-
ber who contested the inconsistency and 
sought to document their citizenship or im-
240 
migration status, name, or social security 
account number or to correct the informa-
tion maintained in such records and, of 
those, the results of such contestations; 
and 
(ii) the administrative costs of con-
ducting the status verification under this 
paragraph. 
(F) GAO REPORT.—Not later than the end 
of Y2, the Comptroller General of the United 
States shall submit to the Committee on Ways 
and Means, the Committee on Energy and 
Commerce, the Committee on Education and 
Labor, and the Committee on the Judiciary of 
the House of Representatives and the Com-
mittee on Finance, the Committee on Health, 
Education, Labor, and Pensions, and the Com-
mittee on the Judiciary of the Senate a report 
examining the effectiveness of the citizenship 
and immigration verification systems applied 
under this paragraph. Such report shall include 
an analysis of the following: 
(i) The causes of erroneous deter-
minations under such systems.
241 
(ii) The effectiveness of the processes 
used in remedying such erroneous deter-
minations. 
(iii) The impact of such systems on 
individuals, health care providers, and Fed-
eral and State agencies, including the ef-
fect of erroneous determinations under 
such systems. 
(iv) The effectiveness of such systems 
in preventing ineligible individuals from re-
ceiving for affordability credits. 
(v) The characteristics of applicants 
described in subparagraph (E)(i). 
(G) PROHIBITION OF DATABASE.—Nothing 
in this paragraph or the amendments made by 
paragraph (6) shall be construed as authorizing 
the Health Choices Commissioner or the Com-
missioner of Social Security to establish a data-
base of information on citizenship or immigra-
tion status. 
(H) INITIAL FUNDING.— 
(i) IN GENERAL.—Out of any funds in 
the Treasury not otherwise appropriated, 
there is appropriated to the Commissioner 
of Social Security $30,000,000, to be avail-
242 
able without fiscal year limit to carry out 
this paragraph and section 205(v) of the 
Social Security Act. 
(ii) FUNDING
LIMITATION.—In no 
case shall funds from the Social Security 
Administration’s Limitation on Adminis-
trative Expenses be used to carry out ac-
tivities related to this paragraph or section 
205(v) of the Social Security Act. 
(5) AGREEMENT WITH SOCIAL SECURITY COM-
MISSIONER.— 
(A) IN
GENERAL.—The Health Choices 
Commissioner shall enter into and maintain an 
agreement described in section 205(v)(2) of the 
Social Security Act with the Commissioner of 
Social Security. 
(B) FUNDING.—The agreement entered 
into under subparagraph (A) shall, for each fis-
cal year (beginning with fiscal year 2013)— 
(i) provide funds to the Commissioner 
of Social Security for the full costs of the 
responsibilities of the Commissioner of So-
cial Security under paragraph (4), includ-
ing—
243 
(I) 
acquiring, 
installing, 
and 
maintaining technological equipment 
and systems necessary for the fulfill-
ment of the responsibilities of the 
Commissioner 
of 
Social 
Security 
under paragraph (4), but only that 
portion of such costs that are attrib-
utable to such responsibilities; and 
(II) responding to individuals 
who contest with the Commissioner of 
Social Security a reported inconsist-
ency with records maintained by the 
Commissioner of Social Security or 
the Department of Homeland Security 
relating to citizenship or immigration 
status, name, or social security ac-
count number under paragraph (4); 
(ii) based on an estimating method-
ology agreed to by the Commissioner of 
Social Security and the Health Choices 
Commissioner, provide such funds, within 
10 calendar days of the beginning of the 
fiscal year for the first quarter and in ad-
vance for all subsequent quarters in that 
fiscal year; and
244 
(iii) provide for an annual accounting 
and reconciliation of the actual costs in-
curred and the funds provided under the 
agreement. 
(C) REVIEW
OF
ACCOUNTING.—The an-
nual accounting and reconciliation conducted 
pursuant to subparagraph (B)(iii) shall be re-
viewed by the Inspectors General of the Social 
Security Administration and the Health Choices 
Administration, including an analysis of consist-
ency with the requirements of paragraph (4). 
(D) CONTINGENCY.—In any case in which 
agreement with respect to the provisions re-
quired under subparagraph (B) for any fiscal 
year has not been reached as of the first day 
of such fiscal year, the latest agreement with 
respect to such provisions shall be deemed in ef-
fect on an interim basis for such fiscal year 
until such time as an agreement relating to 
such provisions is subsequently reached. In any 
case in which an interim agreement applies for 
any fiscal year under this subparagraph, the 
Commissioner of Social Security shall, not later 
than the first day of such fiscal year, notify the 
appropriate Committees of the Congress of the
245 
failure to reach the agreement with respect to 
such provisions for such fiscal year. Until such 
time as the agreement with respect to such pro-
visions has been reached for such fiscal year, 
the Commissioner of Social Security shall, not 
later than the end of each 90-day period after 
October 1 of such fiscal year, notify such Com-
mittees of the status of negotiations between 
such Commissioner and the Health Choices 
Commissioner in order to reach such an agree-
ment. 
(E) APPLICATION
TO
PUBLIC
ENTITIES 
ADMINISTERING
AFFORDABILITY
CREDITS.—If 
the Health Choices Commissioner provides for 
the conduct of verifications under paragraph 
(4) through a public entity, the Health Choices 
Commissioner shall require the public entity to 
enter into an agreement with the Commissioner 
of Social Security which provides the same 
terms as the agreement described in this para-
graph (and section 205(v) of the Social Security 
Act) between the Health Choices Commissioner 
and the Commissioner of Social Security, except 
that the Health Choices Commissioner shall be 
responsible for providing funds for the Commis-
246 
sioner of Social Security in accordance with 
subparagraphs (B) through (D). 
(6) AMENDMENTS TO SOCIAL SECURITY ACT.— 
(A) COORDINATION OF INFORMATION BE-
TWEEN SOCIAL SECURITY ADMINISTRATION AND 
HEALTH CHOICES ADMINISTRATION.— 
(i) IN GENERAL.—Section 205 of the 
Social Security Act (42 U.S.C. 405) is 
amended by adding at the end the fol-
lowing new subsection: 
‘‘Coordination of Information With Health Choices 
Administration 
‘‘(v)(1) The Health Choices Commissioner may col-
lect and use the names and social security account num-
bers of individuals as required to provide for verification 
of citizenship under subsection (b)(4)(C) of section 341 
of the Affordable Health Care for America Act in connec-
tion with determinations of eligibility for affordability 
credits under such section. 
‘‘(2)(A) The Commissioner of Social Security shall 
enter into and maintain an agreement with the Health 
Choices Commissioner for the purpose of establishing, in 
compliance with the requirements of section 1902(ee) as 
applied pursuant to section 341(b)(4)(C) of the Affordable 
Health Care for America Act, a program for verifying in-
248 
Choices Commissioner, who, without the written authority 
of the Commissioner of Social Security, publishes or com-
municates any information in such individual’s possession 
by reason of such employment or position as such an offi-
cer shall be guilty of a felony and, upon conviction thereof, 
shall be fined or imprisoned, or both, as described in sec-
tion 208. 
‘‘(3) The agreement entered into under paragraph (2) 
shall provide for funding to the Commissioner of Social 
Security consistent with section 341(b)(5) of Affordable 
Health Care for America Act. 
‘‘(4) This subsection shall apply in the case of a pub-
lic entity that conducts verifications under section 
341(b)(4) of the Affordable Health Care for America Act 
and the obligations of this subsection shall apply to such 
an entity in the same manner as such obligations apply 
to the Health Choices Commissioner when such Commis-
sioner is conducting such verifications.’’. 
(ii) CONFORMING AMENDMENT.—Sec-
tion 205(c)(2)(C) of such Act (42 U.S.C. 
405(c)(2)(C)) is amended by adding at the 
end the following new clause: 
‘‘(x) For purposes of the administration of the 
verification procedures described in section 341(b)(4) of 
the Affordable Health Care for America Act, the Health
280 
plan for individual coverage under the plan option 
with the lowest applicable employee premium. 
(2) OPT-OUT.—In no case may an employer 
automatically enroll an employee in a plan under 
paragraph (1) if such employee makes an affirmative 
election to opt out of such plan or to elect coverage 
under an employment-based health benefits plan of-
fered by such employer. An employer shall provide 
an employee with a 30-day period to make such an 
affirmative election before the employer may auto-
matically enroll the employee in such a plan. 
(3) NOTICE REQUIREMENTS.— 
(A) IN
GENERAL.—Each employer de-
scribed in paragraph (1) who automatically en-
rolls an employee into a plan as described in 
such paragraph shall provide the employees, 
within a reasonable period before the beginning 
of each plan year (or, in the case of new em-
ployees, within a reasonable period before the 
end of the enrollment period for such a new em-
ployee), written notice of the employees’ rights 
and obligations relating to the automatic enroll-
ment requirement under such paragraph. Such 
notice must be comprehensive and understood
448 
ical equipment and supplies through a competitive bidding 
process among manufacturers of such equipment and sup-
plies. Such study shall address the following: 
(1) Identification of types of durable medical 
equipment and supplies that would be appropriate 
for bidding under such a program. 
(2) Recommendations on how to structure such 
an acquisition program in order to promote fiscal re-
sponsibility while also ensuring beneficiary access to 
high quality equipment and supplies. 
(3) Recommendations on how such a program 
could be phased-in and on what geographic level 
would bidding be most appropriate. 
(4) In addition to price, recommendations on 
criteria that could be factored into the bidding proc-
ess. 
(5) Recommendations on how suppliers could be 
compensated for furnishing and servicing equipment 
and supplies acquired under such a program. 
(6) Comparison of such a program to the cur-
rent competitive bidding program under Medicare 
for durable medical equipment, as well as any other 
similar Federal acquisition programs, such as the 
General Services Administration’s vehicle purchasing 
program.