1996 
penalty under this clause in 
the same manner as such pro-
visions apply to a penalty or 
proceeding 
under 
section 
1128A(a).’’. 
(B) 
CONFORMING
AMENDMENT.— 
Section 1919(h)(8) of the Social Secu-
rity Act (42 U.S.C. 1396r(h)(5)(8)) is 
amended by inserting ‘‘and in para-
graph 
(3)(C)(ii)’’ 
after 
‘‘paragraph 
(2)(A)’’. 
(c) EFFECTIVE
DATE.—The amendments 
made by this section shall take effect 1 year 
after the date of the enactment of this Act. 
SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PRO-
GRAM. 
(a) ESTABLISHMENT.— 
(1) IN
GENERAL.—The Secretary, in 
consultation with the Inspector General 
of the Department of Health and Human 
Services, shall establish a pilot program 
(in this section referred to as the ‘‘pilot 
program’’) to develop, test, and imple-
ment use of an independent monitor to 
oversee interstate and large intrastate 
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chains of skilled nursing facilities and 
nursing facilities. 
(2) SELECTION.—The Secretary shall 
select chains of skilled nursing facilities 
and nursing facilities described in para-
graph (1) to participate in the pilot pro-
gram from among those chains that sub-
mit an application to the Secretary at 
such time, in such manner, and con-
taining such information as the Secretary 
may require. 
(3) DURATION.—The Secretary shall 
conduct the pilot program for a two-year 
period. 
(4) IMPLEMENTATION.—The Secretary 
shall implement the pilot program not 
later than one year after the date of the 
enactment of this Act. 
(b) REQUIREMENTS.—The Secretary shall 
evaluate chains selected to participate in the 
pilot program based on criteria selected by 
the Secretary, including where evidence sug-
gests that one or more facilities of the chain 
are experiencing serious safety and quality of 
care problems. Such criteria may include the 
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evaluation of a chain that includes one or 
more facilities participating in the ‘‘Special 
Focus Facility’’ program (or a successor pro-
gram) or one or more facilities with a record 
of repeated serious safety and quality of care 
deficiencies. 
(c) RESPONSIBILITIES OF THE INDEPENDENT 
MONITOR.—An independent monitor that en-
ters into a contract with the Secretary to par-
ticipate in the conduct of such program 
shall— 
(1) conduct periodic reviews and pre-
pare root-cause quality and deficiency 
analyses of a chain to assess if facilities 
of the chain are in compliance with State 
and Federal laws and regulations appli-
cable to the facilities; 
(2) undertake sustained oversight of 
the chain, whether publicly or privately 
held, to involve the owners of the chain 
and the principal business partners of 
such owners in facilitating compliance by 
facilities of the chain with State and Fed-
eral laws and regulations applicable to 
the facilities; 
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(3) analyze the management struc-
ture, distribution of expenditures, and 
nurse staffing levels of facilities of the 
chain in relation to resident census, staff 
turnover rates, and tenure; 
(4) report findings and recommenda-
tions with respect to such reviews, anal-
yses, and oversight to the chain and fa-
cilities of the chain, to the Secretary and 
to relevant States; and 
(5) publish the results of such re-
views, analyses, and oversight. 
(d) 
IMPLEMENTATION
OF
RECOMMENDA-
TIONS.— 
(1) RECEIPT OF FINDING BY CHAIN.—Not 
later than 10 days after receipt of a find-
ing of an independent monitor under sub-
section (c)(4), a chain participating in the 
pilot program shall submit to the inde-
pendent monitor a report— 
(A) outlining corrective actions 
the chain will take to implement the 
recommendations in such report; or 
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(B) indicating that the chain will 
not implement such recommenda-
tions and why it will not do so. 
(2) 
RECEIPT
OF
REPORT
BY
INDE-
PENDENT MONITOR.—Not later than 10 days 
after the date of receipt of a report sub-
mitted by a chain under paragraph (1), 
an independent monitor shall finalize its 
recommendations and submit a report to 
the chain and facilities of the chain, the 
Secretary, and the State (or States) in-
volved, as appropriate, containing such 
final recommendations. 
(e) COST OF APPOINTMENT.—A chain shall 
be responsible for a portion of the costs asso-
ciated with the appointment of independent 
monitors under the pilot program. The chain 
shall pay such portion to the Secretary (in an 
amount and in accordance with procedures 
established by the Secretary). 
(f) WAIVER
AUTHORITY.—The Secretary 
may waive such requirements of titles XVIII 
and XIX of the Social Security Act (42 U.S.C. 
1395 et seq.; 1396 et seq.) as may be necessary 
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for the purpose of carrying out the pilot pro-
gram. 
(g) AUTHORIZATION
OF APPROPRIATIONS.— 
There are authorized to be appropriated such 
sums as may be necessary to carry out this 
section. 
(h) DEFINITIONS.—In this section: 
(1) 
FACILITY.—The 
term 
‘‘facility’’ 
means a skilled nursing facility or a nurs-
ing facility. 
(2) 
NURSING
FACILITY.—The 
term 
‘‘nursing facility’’ has the meaning given 
such term in section 1919(a) of the Social 
Security Act (42 U.S.C. 1396r(a)). 
(3) SECRETARY.—The term ‘‘Secretary’’ 
means 
the 
Secretary 
of 
Health 
and 
Human Services, acting through the As-
sistant Secretary for Planning and Eval-
uation. 
(4) SKILLED
NURSING
FACILITY.—The 
term ‘‘skilled nursing facility’’ has the 
meaning given such term in section 
1819(a) of the Social Security Act (42 
U.S.C. 1395(a)). 
(i) EVALUATION AND REPORT.— 
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