117 
‘‘(B) The enrollee (or authorized represent-
ative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the denial 
are provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the denial. 
‘‘(F) Any other party determined under 
any regulations to have a substantial interest in 
the denial involved. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ENROLLEE.—The term ‘enrollee’ 
means, with respect to health insurance cov-
erage offered by a health insurance issuer, an 
individual enrolled with the issuer to receive 
such coverage. 
‘‘(B) HEALTH CARE PROFESSIONAL.—The 
term ‘health care professional’ means an indi-
vidual who is licensed, accredited, or certified 
under State law to provide specified health care 
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118 
services and who is operating within the scope 
of such licensure, accreditation, or certification. 
‘‘SEC. 2799. ENFORCEMENT. 
‘‘(a) IN GENERAL.—Subject to subsection (b), with 
respect to specific individual health insurance coverage the 
primary State for such coverage has sole jurisdiction to 
enforce the primary State’s covered laws in the primary 
State and any secondary State. 
‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 
subsection (a) shall be construed to affect the authority 
of a secondary State to enforce its laws as set forth in 
the exception specified in section 2796(b)(1). 
‘‘(c) COURT INTERPRETATION.—In reviewing action 
initiated by the applicable secondary State authority, the 
court of competent jurisdiction shall apply the covered 
laws of the primary State. 
‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 
of individual health insurance coverage offered in a sec-
ondary State that fails to comply with the covered laws 
of the primary State, the applicable State authority of the 
secondary State may notify the applicable State authority 
of the primary State.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to individual health insurance 
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coverage offered, issued, or sold after the date that is one 
year after the date of the enactment of this Act. 
(c) GAO ONGOING STUDY AND REPORTS.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct an ongoing study con-
cerning the effect of the amendment made by sub-
section (a) on— 
(A) the number of uninsured and under-in-
sured; 
(B) the availability and cost of health in-
surance policies for individuals with preexisting 
medical conditions; 
(C) the availability and cost of health in-
surance policies generally; 
(D) the elimination or reduction of dif-
ferent types of benefits under health insurance 
policies offered in different States; and 
(E) cases of fraud or abuse relating to 
health insurance coverage offered under such 
amendment and the resolution of such cases. 
(2) ANNUAL REPORTS.—The Comptroller Gen-
eral shall submit to Congress an annual report, after 
the end of each of the 5 years following the effective 
date of the amendment made by subsection (a), on 
the ongoing study conducted under paragraph (1). 
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120 
TITLE IV—IMPROVING HEALTH 
SAVINGS ACCOUNTS 
SEC. 231. HSA FUNDS FOR PREMIUMS FOR HIGH DEDUCT-
IBLE HEALTH PLANS. 
(a) IN GENERAL.—Subparagraph (C) of section 
223(d)(2) of the Internal Revenue Code of 1986, as re-
stored by section 2, is amended by striking ‘‘or’’ at the 
end of clause (iii), by striking the period at the end of 
clause (iv) and inserting ‘‘, or’’, and by adding at the end 
the following: 
‘‘(v) a high deductible health plan if— 
‘‘(I) such plan is not offered in 
connection with a group health plan, 
‘‘(II) no portion of any premium 
(within the meaning of applicable pre-
mium under section 4980B(f)(4)) for 
such plan is excludable from gross in-
come under section 106, and 
‘‘(III) the account beneficiary 
demonstrates, 
using 
procedures 
deemed appropriate by the Secretary, 
that after payment of the premium 
for such insurance the balance in the 
health savings account is at least 
twice the minimum deductible in ef-
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121 
fect 
under 
subsection 
(c)(2)(A)(i) 
which is applicable to such plan.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to premiums for a high deduct-
ible health plan for periods beginning after December 31, 
2011. 
SEC. 232. REQUIRING GREATER COORDINATION BETWEEN 
HDHP ADMINISTRATORS AND HSA ACCOUNT 
ADMINISTRATORS SO THAT ENROLLEES CAN 
ENROLL IN BOTH AT THE SAME TIME. 
The Secretary of the Treasury, through the issuance 
of regulations or other guidance, shall encourage adminis-
trators of health plans and trustees of health savings ac-
counts to provide for simultaneous enrollment in high de-
ductible health plans and setup of health savings accounts. 
SEC. 233. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 
INCURRED BEFORE ESTABLISHMENT OF AC-
COUNT. 
(a) IN GENERAL.—Subsection (d) of section 223 of 
the Internal Revenue Code of 1986, as restored by section 
2, is amended by redesignating paragraph (4) as para-
graph (5) and by inserting after paragraph (3) the fol-
lowing new paragraph: 
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122 
‘‘(4) CERTAIN MEDICAL EXPENSES INCURRED 
BEFORE ESTABLISHMENT OF ACCOUNT TREATED AS 
QUALIFIED.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (2), an expense shall not fail to be treat-
ed as a qualified medical expense solely because 
such expense was incurred before the establish-
ment of the health savings account if such ex-
pense was incurred during the 60-day period 
beginning on the date on which the high de-
ductible health plan is first effective. 
‘‘(B) SPECIAL
RULES.—For purposes of 
subparagraph (A)— 
‘‘(i) an individual shall be treated as 
an eligible individual for any portion of a 
month for which the individual is described 
in subsection (c)(1), determined without 
regard to whether the individual is covered 
under a high deductible health plan on the 
1st day of such month, and 
‘‘(ii) the effective date of the health 
savings account is deemed to be the date 
on which the high deductible health plan is 
first effective after the date of the enact-
ment of this paragraph.’’. 
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‘‘SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the amount paid during the taxable year for coverage for 
the taxpayer, his spouse, and dependents under qualified 
health insurance. 
‘‘(b) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’ 
means insurance which constitutes medical care, other 
than insurance substantially all of the coverage of which 
is of excepted benefits described in section 9832(c). 
‘‘(c) SPECIAL RULES.— 
‘‘(1) COORDINATION
WITH
MEDICAL
DEDUC-
TION, ETC.—Any amount paid by a taxpayer for in-
surance to which subsection (a) applies shall not be 
taken into account in computing the amount allow-
able to the taxpayer as a deduction under section 
162(l) or 213(a). Any amount taken into account in 
determining the credit allowed under section 35 shall 
not be taken into account for purposes of this sec-
tion. 
‘‘(2) DEDUCTION NOT ALLOWED FOR SELF-EM-
PLOYMENT
TAX
PURPOSES.—The deduction allow-
able by reason of this section shall not be taken into 
account in determining an individual’s net earnings 
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125 
from self-employment (within the meaning of section 
1402(a)) for purposes of chapter 2.’’. 
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code is amended by inserting before the last sentence 
the following new paragraph: 
‘‘(22) COSTS
OF
QUALIFIED
HEALTH
INSUR-
ANCE.—The deduction allowed by section 224.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and inserting before 
such item the following new item: 
‘‘Sec. 224. Costs of qualified health insurance.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2010. 
DIVISION C—ENACTING REAL 
MEDICAL LIABILITY REFORM 
SEC. 301. CAP ON NON-ECONOMIC DAMAGES AGAINST 
HEALTH CARE PRACTITIONERS. 
When an individual is injured or dies as the result 
of health care, a person entitled to non-economic damages 
may not recover, from the class of liable health care practi-
tioners (regardless of the theory of liability), more than 
$250,000 such damages. 
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126 
SEC. 302. CAP ON NON-ECONOMIC DAMAGES AGAINST 
HEALTH CARE INSTITUTIONS. 
When an individual is injured or dies as the result 
of health care, a person entitled to non-economic damages 
may not recover— 
(1) from any single liable health care institution 
(regardless of the theory of liability), more than 
$250,000 such damages; and 
(2) from the class of liable health care institu-
tions (regardless of the theory of liability), more 
than $500,000 such damages. 
SEC. 303. CAP, IN WRONGFUL DEATH CASES, ON TOTAL 
DAMAGES AGAINST ANY SINGLE HEALTH 
CARE PRACTITIONER. 
(a) IN GENERAL.—When an individual dies as the 
result of health care, a person entitled to damages may 
not recover, from any single liable health care practitioner 
(regardless of the theory of liability), more than 
$1,400,000 in total damages. 
(b) TOTAL DAMAGES DEFINED.—In this section, the 
term ‘‘total damages’’ includes compensatory damages, 
punitive damages, statutory damages, and any other type 
of damages. 
(c) ADJUSTMENT FOR INFLATION.—For each cal-
endar year after the calendar year of the enactment of 
this Act, the dollar amount referred to in subsection (a) 
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127 
shall be adjusted to reflect changes in the Consumer Price 
Index of the Bureau of Labor Statistics of the Department 
of Labor. The adjustment shall be based on the relation-
ship between— 
(1) the Consumer Price Index data most re-
cently published as of January 1 of the calendar 
year of the enactment of this Act; and 
(2) the Consumer Price Index data most re-
cently published as of January 1 of the calendar 
year concerned. 
(d) APPLICABILITY
OF ADJUSTMENT.—The dollar 
amount that applies to a recovery is the dollar amount 
for the calendar year during which the amount of the re-
covery is made final. 
SEC. 304. LIMITATION OF INSURER LIABILITY WHEN IN-
SURER REJECTS CERTAIN SETTLEMENT OF-
FERS. 
In a civil action, to the extent the civil action seeks 
damages for the injury or death of an individual as the 
result of health care, when the insurer of a health care 
practitioner or health care institution rejects a reasonable 
settlement offer within policy limits, the insurer is not, by 
reason of that rejection, liable for damages in an amount 
that exceeds the liability of the insured. 
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128 
SEC. 305. MANDATORY JURY INSTRUCTION ON CAP ON 
DAMAGES. 
In a civil action tried to a jury, to the extent the civil 
action seeks damages for the injury or death of an indi-
vidual as the result of health care, the court shall instruct 
the jury that the jury is not to consider whether, or to 
what extent, a limitation on damages applies. 
SEC. 306. DETERMINATION OF NEGLIGENCE; MANDATORY 
JURY INSTRUCTION. 
(a) IN GENERAL.—When an individual is injured or 
dies as the result of health care, liability for negligence 
may not be based solely on a bad result. 
(b) MANDATORY JURY INSTRUCTION.—In a civil ac-
tion tried to a jury, to the extent the civil action seeks 
damages for the injury or death of an individual as the 
result of health care and alleges liability for negligence, 
the court shall instruct the jury as provided in subsection 
(a). 
SEC. 307. EXPERT REPORTS REQUIRED TO BE SERVED IN 
CIVIL ACTIONS. 
(a) SERVICE REQUIRED.—To the extent a pleading 
filed in a civil action seeks damages against a health care 
practitioner for the injury or death of an individual as the 
result of health care, the party filing the pleading shall, 
not later than 120 days after the date on which the plead-
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129 
ing was filed, serve on each party against whom such dam-
ages are sought a qualified expert report. 
(b) QUALIFIED EXPERT REPORT.—As used in sub-
section (a), a qualified expert report is a written report 
of a qualified health care expert that— 
(1) includes a curriculum vitae for that expert; 
and 
(2) sets forth a summary of the expert opinion 
of that expert as to— 
(A) the standard of care applicable to that 
practitioner; 
(B) how that practitioner failed to meet 
that standard of care; and 
(C) the causal relationship between that 
failure and the injury or death of the individual. 
(c) MOTION TO ENFORCE.—A party not served as 
required by subsection (a) may move the court to enforce 
that subsection. On such a motion, the court— 
(1) shall dismiss, with prejudice, the pleading 
as it relates to that party; and 
(2) shall award to that party the attorney fees 
reasonably incurred by that party to respond to that 
pleading. 
(d) USE OF EXPERT REPORT.— 
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(1) IN
GENERAL.—Except as otherwise pro-
vided in this section, a qualified expert report served 
under subsection (a) may not, in that civil action— 
(A) be offered by any party as evidence; 
(B) be used by any party in discovery or 
any other pretrial proceeding; or 
(C) be referred to by any party at trial. 
(2) VIOLATIONS.— 
(A) BY OTHER PARTY.—If paragraph (1) 
is violated by a party other than the party who 
served the report, the court shall, on motion of 
any party or on its own motion, take such 
measures as the court considers appropriate, 
which may include the imposition of sanctions. 
(B) BY SERVING PARTY.—If paragraph (1) 
is violated by the party who served the report, 
paragraph (1) shall no longer apply to any 
party. 
SEC. 308. EXPERT OPINIONS RELATING TO PHYSICIANS 
MAY BE PROVIDED ONLY BY ACTIVELY PRAC-
TICING PHYSICIANS. 
(a) IN GENERAL.—A physician-related opinion may 
be provided only by an actively practicing physician who 
is determined by the court to be qualified on the basis 
of training and experience to render that opinion. 
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(b) CONSIDERATIONS REQUIRED.—In determining 
whether an actively practicing physician is qualified under 
subsection (a), the court shall, except on good cause 
shown, consider whether that physician is board-certified, 
or has other substantial training, in an area of medical 
practice relevant to the health care to which the opinion 
relates. 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘actively practicing physician’’ 
means an individual who— 
(A) is licensed to practice medicine in the 
United States or, if the individual is a defend-
ant providing a physician-related opinion with 
respect to the health care provided by that de-
fendant, is a graduate of a medical school ac-
credited by the Liaison Committee on Medical 
Education or the American Osteopathic Asso-
ciation; 
(B) is practicing medicine when the opin-
ion is rendered, or was practicing medicine 
when the health care was provided; and 
(C) has knowledge of the accepted stand-
ards of care for the health care to which the 
opinion relates. 
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132 
(2) The term ‘‘physician-related opinion’’ means 
an expert opinion as to any one or more of the fol-
lowing: 
(A) The standard of care applicable to a 
physician. 
(B) Whether a physician failed to meet 
such a standard of care. 
(C) Whether there was a causal relation-
ship between such a failure by a physician and 
the injury or death of an individual. 
(3) The term ‘‘practicing medicine’’ includes 
training residents or students at an accredited 
school of medicine or osteopathy, and serving as a 
consulting physician to other physicians who provide 
direct patient care. 
SEC. 309. PAYMENT OF FUTURE DAMAGES ON PERIODIC OR 
ACCRUAL BASIS. 
(a) IN GENERAL.—When future damages are award-
ed against a health care practitioner to a person for the 
injury or death of an individual as a result of health care, 
and the present value of those future damages is $100,000 
or more, that health care practitioner may move that the 
court order payment on a periodic or accrual basis of those 
damages. On such a motion, the court— 
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133 
(1) shall order that payment be made on an ac-
crual basis of future damages described in sub-
section (b)(1); and 
(2) may order that payment be made on a peri-
odic or accrual basis of any other future damages 
that the court considers appropriate. 
(b) FUTURE DAMAGES DEFINED.—In this section, 
the term ‘‘future damages’’ means— 
(1) the future costs of medical, health care, or 
custodial services; 
(2) noneconomic damages, such as pain and 
suffering or loss of consortium; 
(3) loss of future earnings; and 
(4) any other damages incurred after the award 
is made. 
SEC. 310. UNANIMOUS JURY REQUIRED FOR PUNITIVE OR 
EXEMPLARY DAMAGES. 
When an individual is injured or dies as the result 
of health care, a jury may not award punitive or exemplary 
damages against a health care practitioner or health care 
institution unless the jury is unanimous with regard to 
both the liability of that party for such damages and the 
amount of the award of such damages. 
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134 
SEC. 311. PROPORTIONATE LIABILITY. 
When an individual is injured or dies as the result 
of health care and a person is entitled to damages for that 
injury or death, each person responsible is liable only for 
a proportionate share of the total damages that directly 
corresponds to that person’s proportionate share of the 
total responsibility. 
SEC. 312. DEFENSE-INITIATED SETTLEMENT PROCESS. 
(a) IN GENERAL.—In a civil action, to the extent the 
civil action seeks damages for the injury or death of an 
individual as the result of health care, a health care practi-
tioner or health care institution against which such dam-
ages are sought may serve one or more qualified settle-
ment offers under this section to a person seeking such 
damages. If the person seeking such damages does not ac-
cept such an offer, that person may thereafter serve one 
or more qualified settlement offers under this section to 
the party whose offer was not accepted. 
(b) QUALIFIED SETTLEMENT OFFER.—A qualified 
settlement offer under this section is an offer, in writing, 
to settle the matter as between the offeror and the offeree, 
which— 
(1) specifies that it is made under this section; 
(2) states the terms of settlement; and 
(3) states the deadline within which the offer 
must be accepted. 
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(c) EFFECT OF OFFER.—If the offeree of a qualified 
settlement offer does not accept that offer, and thereafter 
receives a judgment at trial that, as between the offeror 
and the offeree, is significantly less favorable than the 
terms of settlement in that offer, that offeree is respon-
sible for those litigation costs reasonably incurred, after 
the deadline stated in the offer, by the offeror to respond 
to the claims of the offeree. 
(d) LITIGATION COSTS DEFINED.—In this section, 
the term ‘‘litigation costs’’ include court costs, filing fees, 
expert witness fees, attorney fees, and any other costs di-
rectly related to carrying out the litigation. 
(e) SIGNIFICANTLY LESS FAVORABLE DEFINED.— 
For purposes of this section, a judgment is significantly 
less favorable than the terms of settlement if— 
(1) in the case of an offeree seeking damages, 
the offeree’s award at trial is less than 80 percent 
of the value of the terms of settlement; and 
(2) in the case of an offeree against whom dam-
ages are sought, the offeror’s award at trial is more 
than 120 percent of the value of the terms of settle-
ment. 
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(2) STATUTE
OF
REPOSE.—The statute of 
repose required by subsection (b) may not be tolled 
for any reason. 
SEC. 314. LIMITATION ON LIABILITY FOR GOOD SAMARI-
TANS 
PROVIDING 
EMERGENCY 
HEALTH 
CARE. 
(a) WILLFUL
OR
WANTON
NEGLIGENCE
RE-
QUIRED.—A health care practitioner or health care insti-
tution that provides emergency health care on a Good Sa-
maritan basis is not liable for damages caused by that care 
except for willful or wanton negligence or more culpable 
misconduct. 
(b) GOOD SAMARITAN BASIS.—For purposes of this 
section, care is provided on a Good Samaritan basis if it 
is not provided for or in expectation of remuneration. 
Being entitled to remuneration is relevant to, but is not 
determinative of, whether it is provided for or in expecta-
tion of remuneration. 
SEC. 315. DEFINITIONS. 
In this division: 
(1) HEALTH
CARE
INSTITUTION.—The term 
‘‘health care institution’’ includes institutions such 
as— 
(A) an ambulatory surgical center; 
(B) an assisted living facility; 
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138 
(C) an emergency medical services pro-
vider; 
(D) a home health agency; 
(E) a hospice; 
(F) a hospital; 
(G) a hospital system; 
(H) an intermediate care facility for the 
mentally retarded; 
(I) a nursing home; and 
(J) an end stage renal disease facility. 
(2) HEALTH CARE PRACTITIONER.—The term 
‘‘health care practitioner’’ includes a physician and 
a physician entity. 
(3) PHYSICIAN ENTITY.—The term ‘‘physician 
entity’’ includes— 
(A) a partnership or limited liability part-
nership created by a group of physicians; 
(B) a company created by physicians; and 
(C) a nonprofit health corporation whose 
board is composed of physicians. 
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DIVISION D—PROTECTING THE 
DOCTOR-PATIENT RELATION-
SHIP 
SEC. 401. RULE OF CONSTRUCTION. 
Nothing in this Act shall be construed to interfere 
with the doctor-patient relationship or the practice of med-
icine. 
SEC. 402. REPEAL OF FEDERAL COORDINATING COUNCIL 
FOR 
COMPARATIVE 
EFFECTIVENESS 
RE-
SEARCH. 
Effective on the date of the enactment of this Act, 
section 804 of the American Recovery and Reinvestment 
Act of 2009 is repealed. 
DIVISION 
E—INCENTIVIZING 
WELLNESS AND QUALITY IM-
PROVEMENTS 
SEC. 501. INCENTIVES FOR PREVENTION AND WELLNESS 
PROGRAMS. 
(a) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974 LIMITATION ON EXCEPTION FOR WELLNESS 
PROGRAMS UNDER HIPAA DISCRIMINATION RULES.— 
(1) IN
GENERAL.—Section 702(b)(2) of the 
Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1182(b)(2)), as restored by section 2, is 
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amended by adding after and below subparagraph 
(B) the following: 
‘‘In applying subparagraph (B), a group health plan 
(or a health insurance issuer with respect to health 
insurance coverage) may vary premiums and cost- 
sharing by up to 50 percent of the value of the bene-
fits under the plan (or coverage) based on participa-
tion in a standards-based wellness program.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to plan years beginning 
more than 1 year after the date of the enactment of 
this Act. 
(b) CONFORMING AMENDMENTS TO PHSA.— 
(1) GROUP MARKET RULES.— 
(A) IN GENERAL.—Section 2702(b)(2) of 
the Public Health Service Act (42 U.S.C. 
300gg–1(b)(2)), as restored by section 2, is 
amended by adding after and below subpara-
graph (B) the following: 
‘‘In applying subparagraph (B), a group health plan 
(or a health insurance issuer with respect to health 
insurance coverage) may vary premiums and cost- 
sharing by up to 50 percent of the value of the bene-
fits under the plan (or coverage) based on participa-
tion in a standards-based wellness program.’’. 
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(B) EFFECTIVE
DATE.—The amendment 
made by subparagraph (A) shall apply to plan 
years beginning more than 1 year after the date 
of the enactment of this Act. 
(2) INDIVIDUAL MARKET RULES RELATING TO 
GUARANTEED AVAILABILITY.— 
(A) IN GENERAL.—Section 2741(f) of the 
Public Health Service Act (42 U.S.C. 300gg– 
1(b)(2)), as restored by section 2, is amended 
by adding after and below paragraph (1) the 
following: 
‘‘In applying paragraph (2), a health insurance issuer may 
vary premiums and cost-sharing under health insurance 
coverage by up to 50 percent of the value of the benefits 
under the coverage based on participation in a standards- 
based wellness program.’’. 
(B) EFFECTIVE
DATE.—The amendment 
made by paragraph (1) shall apply to health in-
surance coverage offered or renewed on and 
after the date that is 1 year after the date of 
the enactment of this Act. 
(c) CONFORMING AMENDMENTS TO IRC.— 
(1) IN GENERAL.—Section 9802(b)(2) of the 
Internal Revenue Code of 1986,as restored by sec-
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tion 2, is amended by adding after and below sub-
paragraph (B) the following: 
‘‘In applying subparagraph (B), a group health plan 
(or a health insurance issuer with respect to health 
insurance coverage) may vary premiums and cost- 
sharing by up to 50 percent of the value of the bene-
fits under the plan (or coverage) based on participa-
tion in a standards-based wellness program.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to plan years beginning 
more than 1 year after the date of the enactment of 
this Act. 
DIVISION F—PROTECTING 
TAXPAYERS 
SEC. 601. PERMANENTLY PROHIBITING TAXPAYER FUNDED 
ABORTIONS 
AND 
ENSURING 
CONSCIENCE 
PROTECTIONS. 
Title 1 of the United States Code is amended by add-
ing at the end the following new chapter: 
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‘‘CHAPTER 
4—PERMANENTLY 
PROHIB-
ITING TAXPAYER FUNDED ABORTIONS 
AND ENSURING CONSCIENCE PROTEC-
TIONS 
‘‘SEC. 301. PROHIBITION ON FUNDING FOR ABORTIONS. 
‘‘No funds authorized or appropriated by Federal 
law, and none of the funds in any trust fund to which 
funds are authorized or appropriated by Federal law, shall 
be expended for any abortion. 
‘‘SEC. 302. PROHIBITION ON FUNDING FOR HEALTH BENE-
FITS PLANS THAT COVER ABORTION. 
‘‘None of the funds authorized or appropriated by 
federal law, and none of the funds in any trust fund to 
which funds are authorized or appropriated by federal law, 
shall be expended for a health benefits plan that includes 
coverage of abortion. 
‘‘SEC. 303. TREATMENT OF ABORTIONS RELATED TO RAPE, 
INCEST, OR PRESERVING THE LIFE OF THE 
MOTHER. 
‘‘The limitations established in sections 301 and 302 
shall not apply to an abortion— 
‘‘(1) if the pregnancy is the result of an act of 
rape or incest; or 
‘‘(2) in the case where a woman suffers from a 
physical disorder, physical injury, or physical illness 
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a federally subsidized program, including a State’s or lo-
cality’s contribution of Medicaid matching funds. 
‘‘SEC. 306. NO GOVERNMENT DISCRIMINATION AGAINST 
CERTAIN HEALTH CARE ENTITIES. 
‘‘(a) IN GENERAL.—No funds authorized or appro-
priated by federal law may be made available to a Federal 
agency or program, or to a State or local government, if 
such agency, program, or government subjects any institu-
tional or individual health care entity to discrimination on 
the basis that the health care entity does not provide, pay 
for, provide coverage of, or refer for abortions. 
‘‘(b) HEALTH CARE ENTITY DEFINED.—For pur-
poses of this section, the term ‘health care entity’ includes 
an individual physician or other health care professional, 
a hospital, a provider-sponsored organization, a health 
maintenance organization, a health insurance plan, or any 
other kind of health care facility, organization, or plan.’’. 
SEC. 602. IMPROVED ENFORCEMENT OF THE MEDICARE 
AND MEDICAID SECONDARY PAYER PROVI-
SIONS. 
(a) MEDICARE.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, in coordination with the Inspector 
General of the Department of Health and Human 
Services, shall provide through the Coordination of 
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Benefits Contractor for the identification of in-
stances where the Medicare program should be, but 
is not, acting as a secondary payer to an individual’s 
private health benefits coverage under section 
1862(b) of the Social Security Act (42 U.S.C. 
1395y(b)). 
(2) UPDATING
PROCEDURES.—The Secretary 
shall update procedures for identifying and resolving 
credit balance situations which occur under the 
Medicare program when payment under such title 
and from other health benefit plans exceed the pro-
viders’ charges or the allowed amount. 
(3) REPORT ON IMPROVED ENFORCEMENT.— 
Not later than 1 year after the date of the enact-
ment of this Act, the Secretary shall submit a report 
to Congress on progress made in improved enforce-
ment of the Medicare secondary payer provisions, in-
cluding recoupment of credit balances. 
(b) MEDICAID.—Section 1903 of the Social Security 
Act (42 U.S.C. 1396b) is amended by adding at the end 
the following new subsection: 
‘‘(aa) ENFORCEMENT OF PAYER OF LAST RESORT 
PROVISIONS.— 
‘‘(1) SUBMISSION
OF
STATE
PLAN
AMEND-
MENT.—Each State shall submit, not later than 1 
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year after the date of the enactment of this sub-
section, a State plan amendment that details how 
the State will become fully compliant with the re-
quirements of section 1902(a)(25). 
‘‘(2) BONUS FOR COMPLIANCE.—If a State sub-
mits a timely State plan amendment under para-
graph (1) that the Secretary determines provides for 
full compliance of the State with the requirements of 
section 1902(a)(25), the Secretary shall provide for 
an additional payment to the State of $1,000,000. If 
a State certifies, to the Secretary’s satisfaction, that 
it is already fully compliant with such requirements, 
such amount shall be increased to $2,000,000. 
‘‘(3) REDUCTION FOR NONCOMPLIANCE.—If a 
State does not submit such an amendment, the Sec-
retary shall reduce the Federal medical assistance 
percentage otherwise applicable under this title by 1 
percentage point until the State submits such an 
amendment. 
‘‘(4) ONGOING REDUCTION.—If at any time the 
Secretary determines that a State is not in compli-
ance with section 1902(a)(25), regardless of the sta-
tus of the State’s submission of a State plan amend-
ment under this subsection or previous determina-
tions of compliance such requirements, the Secretary 
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shall reduce the Federal medical assistance percent-
age otherwise applicable under this title for the 
State by 1 percentage point during the period of 
non-compliance as determined by the Secretary.’’. 
SEC. 603. STRENGTHEN MEDICARE PROVIDER ENROLL-
MENT STANDARDS AND SAFEGUARDS. 
(a) PROTECTING AGAINST THE FRAUDULENT USE 
OF MEDICARE PROVIDER NUMBERS.—Subject to sub-
section (c)(2)— 
(1) SCREENING NEW PROVIDERS.—As a condi-
tion of a provider of services or a supplier, including 
durable medical equipment suppliers and home 
health agencies, applying for the first time for a pro-
vider number under the Medicare program under 
title XVIII of the Social Security Act and before 
granting billing privileges under such title, the Sec-
retary of Health and Human Services shall screen 
the provider or supplier for a criminal background 
or other financial or operational irregularities 
through fingerprinting, licensure checks, site-visits, 
other database checks. 
(2) APPLICATION FEES.—The Secretary shall 
impose an application charge on such a provider or 
supplier in order to cover the Secretary’s costs in 
performing the screening required under paragraph 
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(1) and that is revenue neutral to the Federal gov-
ernment. 
(3) PROVISIONAL APPROVAL.—During an ini-
tial, provisional period (specified by the Secretary) 
in which such a provider or supplier has been issued 
such a number, the Secretary shall provide enhanced 
oversight of the activities of such provider or sup-
plier under the Medicare program, such as through 
prepayment review and payment limitations. 
(4) PENALTIES FOR FALSE STATEMENTS.—In 
the case of a provider or supplier that makes a false 
statement in an application for such a number, the 
Secretary may exclude the provider or supplier from 
participation under the Medicare program, or may 
impose a civil money penalty (in the amount de-
scribed in section 1128A(a)(4) of the Social Security 
Act), in the same manner as the Secretary may im-
pose such an exclusion or penalty under sections 
1128 and 1128A, respectively, of such Act in the 
case of knowing presentation of a false claim de-
scribed in section 1128A(a)(1)(A) of such Act. 
(5) DISCLOSURE
REQUIREMENTS.—With re-
spect to approval of such an application, the Sec-
retary— 
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