individual patients on average at least 2 days 
per week. 
‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 
external review relating to a child, a reviewer shall 
have expertise under paragraph (2) in pediatrics. 
‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by the issuer to an 
independent medical reviewer in connection with a 
review under this section shall— 
‘‘(A) not exceed a reasonable level; and 
‘‘(B) not be contingent on the decision ren-
dered by the reviewer. 
‘‘(7) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a denial of a claim under a coverage relat-
ing to an enrollee, any of the following: 
‘‘(A) The issuer involved, or any fiduciary, 
officer, director, or employee of the issuer. 
‘‘(B) The enrollee (or authorized represent-
ative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
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‘‘(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 
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 
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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 
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-
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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 pre-existing 
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). 
SEC. 304. SEVERABILITY. 
If any provision of this title or the application of such 
provision to any person or circumstance is held to be un-
constitutional, the remainder of this title and the applica-
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tion of the provisions of such to any other person or cir-
cumstance shall not be affected. 
TITLE IV—INCREASING TRANS-
PARENCY AND COMPETITION 
IN HEALTHCARE 
SEC. 401. ACCESS TO MEDICARE DATA TO IMPROVE TRANS-
PARENCY. 
Section 1874(e) of the Social Security Act (42 U.S.C. 
1395kk(e)), as added by section 10332 of Public Law 
111–148, is amended to read as follows: 
‘‘(e) AVAILABILITY OF MEDICARE DATA.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
available to qualified entities (as defined in para-
graph (2)) data described in paragraph (3) for the 
purpose of analyzing cost and quality data and im-
proving transparency in the marketplace. 
‘‘(2) QUALIFIED
ENTITIES.—For purposes of 
this subsection, the term ‘qualified entity’ means ei-
ther of the following: 
‘‘(A) 
DESIGNATED
STATE
ALL-PAYER 
CLAIMS
DATABASE.—A State all-payer claims 
database that— 
‘‘(i) collects and combines claims in-
formation from public and private payers 
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and makes such data available to sub-
scribers; and 
‘‘(ii) has been designated (in a man-
ner recognized by the Secretary) as meet-
ing requirements for receipt of data under 
this subsection. 
A State all-payer claims database that is in op-
eration as of December 1, 2011, and that is 
participating as of such date in a national fed-
eration of government, private, non-profit, and 
academic organizations focused on improving 
the development and deployment of State-based 
all payer claims databases shall be treated (for 
the period ending 1 year after the date of es-
tablishment of designation criteria under clause 
(ii) as meeting the requirement of such clause. 
‘‘(B) OTHER QUALIFIED ENTITY.—A pub-
lic or private entity that— 
‘‘(i) is qualified (as determined by the 
Secretary) to use claims data to evaluate 
the performance of providers of services 
and suppliers on measures of quality, effi-
ciency, effectiveness, and resource use; and 
‘‘(ii) agrees to meet the other require-
ments described in paragraph (4) and 
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meets such other requirements as the Sec-
retary may specify, such as ensuring secu-
rity of data. 
‘‘(3) DATA DESCRIBED.— 
‘‘(A) IN GENERAL.—The data described in 
this paragraph are standardized extracts of 
claims data under parts A, B and D for items 
and services furnished under such parts for one 
or more geographic areas and time periods re-
quested by a qualified entity. The Secretary 
shall take such actions as the Secretary deems 
necessary to protect the identity of individuals 
entitled to or enrolled for benefits under such 
parts. 
‘‘(B) 
STANDARDIZED
EXTRACTS.—The 
standardized extracts described in this para-
graph shall be provided in a format that is 
agreed upon by an outside entity specified by 
the Secretary with experience gathering and 
analyzing claims data from payers and with a 
sufficient number of participants from State all- 
payer claims databases. 
‘‘(C) 
GEOGRAPHIC
AREAS.—Geographic 
areas under subparagraph (A) may include in-
dividual States, groups of States, or nationwide, 
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if sufficient claims from other public and pri-
vate payers are produced for such areas. 
‘‘(4) REQUIREMENTS.— 
‘‘(A) SPECIFICATION OF USES AND METH-
ODOLOGIES.— 
‘‘(i) IN GENERAL.—A qualified entity 
requesting data under this subsection 
shall— 
‘‘(I) enter a data use agreement, 
developed by the Secretary specifically 
for the purposes of this subsection, 
governing applicable uses and disclo-
sures of data and that aligns all ac-
tivities of qualified entities under this 
subsection; 
‘‘(II) submit to the Secretary a 
description of the type of activities for 
which such qualified entity will use 
such data, which may include popu-
lation health management, disease 
tracking, provider quality improve-
ment, and improving value in the 
health system; 
‘‘(III) commit to use, if available, 
nationally approved or endorsed meas-
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ures to compare provider and supplier 
performance or, if not available, a 
transparent process as to the meas-
ures for such comparison; 
‘‘(IV) include data made avail-
able under this subsection, with suffi-
cient claims data from other sources, 
in the evaluation and comparison of 
provider and supplier performance; 
and 
‘‘(V) make reports available to 
health care consumers consistent with 
paragraph (5)(E). 
‘‘(ii) 
AVAILABILITY
OF
DATA.—A 
qualified entity requesting data under this 
subsection may make such data available 
to providers of services and suppliers, in-
cluding in the format of a report for such 
a provider or supplier developed from a 
search of a State all-payer claims database. 
The entity may charge such providers and 
suppliers a reasonable fee for making such 
data available. 
‘‘(B) FEE.—Data described in paragraph 
(3) shall be made available to a qualified entity 
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under this subsection at a fee equal to the cost 
of making such data available. Such fee shall be 
pro-rated across the entire agreement period be-
tween the qualified entity and the Secretary . 
Any fee collected pursuant to this subparagraph 
shall be deposited into the Federal Supple-
mentary Medical Insurance Trust Fund under 
section 1841. 
‘‘(C) LIMITATION OF USES.—Data released 
to a qualified entity under this subsection shall 
not be subject to discovery or admission as evi-
dence in judicial or administrative proceedings 
without consent of the applicable provider of 
services or supplier. 
‘‘(5) STUDY AND REPORT BY THE INSTITUTE 
OF MEDICINE.— 
‘‘(A) IN
GENERAL.—The Secretary may 
enter into an agreement with the Institute of 
Medicine of the National Academies to conduct 
a study as to which service data under parts A 
and B would be most valuable and actionable 
for consumers in assessing the performance of 
providers of services and suppliers. 
‘‘(B) REPORT.—An agreement entered into 
under subparagraph (A) shall provide for the 
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Institute of Medicine to submit to the Secretary 
and to Congress a report containing the results 
of the study and recommendations for providing 
such information to consumers within one year 
after the date of the enactment of this para-
graph. 
‘‘(C) ROLE
OF
QUALIFIED
ENTITIES
IN 
DEVELOPING REPORTS FOR CONSUMERS.—Be-
fore making such recommendations, qualified 
entities shall have an opportunity to provide 
input to the Institute of Medicine as to the type 
of information that should be conveyed to con-
sumers. 
‘‘(D) DEVELOPMENT
AND
IMPLEMENTA-
TION OF REPORTS FOR CONSUMERS.—Based on 
the report under subparagraph (B) and input 
from qualified entities, the Secretary shall de-
velop requirements for reports made available 
to consumers under this subsection with the 
goal of increasing health care transparency. 
‘‘(E) REPORTS TO CONSUMERS.—Reports 
consistent with such requirements shall be 
made available to consumers within one year of 
the completion of such report.’’. 
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TITLE V—EXPANDING THE EF-
FECTIVENESS 
OF 
HEALTH 
SAVINGS ACCOUNTS 
SEC. 501. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
Subtitle A—Provisions Relating to 
Tax-Preferred Health Accounts 
SEC. 511. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON-
TRIBUTIONS TO THE SAME HSA ACCOUNT. 
(a) IN GENERAL.—Paragraph (3) of section 223(b) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) 
SPECIAL
RULE
WHERE
BOTH 
SPOUSES ARE ELIGIBLE INDIVIDUALS WITH 1 
ACCOUNT.—If— 
‘‘(i) an individual and the individual’s 
spouse have both attained age 55 before 
the close of the taxable year, and 
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‘‘(ii) the spouse is not an account ben-
eficiary of a health savings account as of 
the close of such year, 
the additional contribution amount shall be 200 
percent of the amount otherwise determined 
under subparagraph (B).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 512. PROVISIONS RELATING TO MEDICARE. 
(a) INDIVIDUALS OVER AGE 65 ONLY ENROLLED IN 
MEDICARE PART A.—Paragraph (7) of section 223(b) is 
amended by adding at the end the following: ‘‘This para-
graph shall not apply to any individual during any period 
for which the individual’s only entitlement to such benefits 
is an entitlement to hospital insurance benefits under part 
A of title XVIII of such Act pursuant to an enrollment 
for such hospital insurance benefits under section 
226(a)(1) of such Act.’’. 
(b) MEDICARE BENEFICIARIES PARTICIPATING
IN 
MEDICARE ADVANTAGE MSA MAY CONTRIBUTE THEIR 
OWN MONEY TO THEIR MSA.—Subsection (b) of section 
138 is amended by striking paragraph (2) and by redesig-
nating paragraphs (3) and (4) as paragraphs (2) and (3), 
respectively. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 513. INDIVIDUALS ELIGIBLE FOR VETERANS BENE-
FITS 
FOR 
A 
SERVICE-CONNECTED 
DIS-
ABILITY. 
(a) IN GENERAL.—Paragraph (1) of section 223(c) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) SPECIAL RULE FOR INDIVIDUALS ELI-
GIBLE
FOR
CERTAIN
VETERANS
BENEFITS.— 
For purposes of subparagraph (A)(ii), an indi-
vidual shall not be treated as covered under a 
health plan described in such subparagraph 
merely because the individual receives periodic 
hospital care or medical services for a service- 
connected disability under any law administered 
by the Secretary of Veterans Affairs but only if 
the individual is not eligible to receive such care 
or services for any condition other than a serv-
ice-connected disability.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 514. INDIVIDUALS ELIGIBLE FOR INDIAN HEALTH 
SERVICE ASSISTANCE. 
(a) IN GENERAL.—Paragraph (1) of section 223(c), 
as amended by section 612, is amended by adding at the 
end the following new subparagraph: 
‘‘(D) SPECIAL RULE FOR INDIVIDUALS EL-
IGIBLE
FOR
ASSISTANCE
UNDER
INDIAN 
HEALTH SERVICE PROGRAMS.—For purposes of 
subparagraph (A)(ii), an individual shall not be 
treated as covered under a health plan de-
scribed in such subparagraph merely because 
the individual receives hospital care or medical 
services under a medical care program of the 
Indian Health Service or of a tribal organiza-
tion.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 515. INDIVIDUALS ELIGIBLE FOR TRICARE COVERAGE. 
(a) IN GENERAL.—Paragraph (1) of section 223(c), 
as amended by sections 613 and 614, is amended by add-
ing at the end the following new subparagraph: 
‘‘(E) SPECIAL RULE FOR INDIVIDUALS EL-
IGIBLE FOR ASSISTANCE UNDER TRICARE.—For 
purposes of subparagraph (A)(ii), an individual 
shall not be treated as covered under a health 
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plan described in such subparagraph merely be-
cause the individual is eligible to receive hos-
pital care, medical services, or prescription 
drugs under TRICARE Extra or TRICARE 
Standard and such individual is not enrolled in 
TRICARE Prime.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 516. HEALTH FSA CARRYFORWARDS. 
(a) IN GENERAL.—Section 125 is amended by redes-
ignating subsections (i) and (j) as subsections (j) and (k), 
respectively, and by inserting after subsection (h) the fol-
lowing new subsection: 
‘‘(i) SPECIAL
RULES
APPLICABLE
TO
HEALTH 
FLEXIBLE SPENDING ARRANGEMENTS.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
a plan or other arrangement shall not fail to be 
treated as a health flexible spending or similar ar-
rangement solely because under the plan or arrange-
ment a participant is permitted access to any unused 
balance in the participant’s accounts under such 
plan or arrangement in the manner provided under 
paragraph (2). 
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‘‘(2) CARRYFORWARD OF UNUSED BENEFITS IN 
HEALTH ARRANGEMENTS.— 
‘‘(A) IN
GENERAL.—A plan or arrange-
ment may permit a participant in a health flexi-
ble spending arrangement to elect to carry for-
ward any aggregate unused balances in the par-
ticipant’s accounts under such arrangement as 
of the close of any year to the succeeding year. 
Such carryforward shall be treated as having 
occurred within 30 days of the close of the year. 
‘‘(B) 
DOLLAR
LIMIT
ON 
CARRYFORWARDS.— 
‘‘(i) IN GENERAL.—The amount which 
a participant may elect to carry forward 
under subparagraph (A) from any year 
shall not exceed $500. For purposes of this 
paragraph, all plans and arrangements 
maintained by an employer or any related 
person shall be treated as 1 plan. 
‘‘(ii) COST-OF-LIVING ADJUSTMENT.— 
In the case of any taxable year beginning 
in a calendar year after 2011, the $500 
amount under clause (i) shall be increased 
by an amount equal to— 
‘‘(I) $500, multiplied by 
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‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for such calendar year, determined by 
substituting ‘2010’ for ‘1992’ in sub-
paragraph (B) thereof. 
If any dollar amount as increased under 
this clause is not a multiple of $100, such 
amount shall be rounded to the next lowest 
multiple of $100. 
‘‘(C) EXCLUSION FROM GROSS INCOME.— 
No amount shall be required to be included in 
gross income under this chapter by reason of 
any carryforward under this paragraph. 
‘‘(D) COORDINATION WITH LIMITS.—The 
maximum amount which may be contributed to 
a health flexible spending arrangement for any 
year to which an unused amount is carried 
under this paragraph shall be reduced by such 
amount. 
‘‘(3) TERMS RELATING TO FLEXIBLE SPENDING 
ARRANGEMENTS.— 
‘‘(A) 
FLEXIBLE
SPENDING
ARRANGE-
MENTS.—For purposes of this subsection, a 
flexible spending arrangement is a benefit pro-
gram which provides employees with coverage 
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under which specified incurred expenses may be 
reimbursed (subject to reimbursement maxi-
mums and other reasonable conditions). 
‘‘(B) HEALTH ARRANGEMENTS.—The term 
‘health flexible spending arrangement’ means 
any flexible spending arrangement (or portion 
thereof) which provides payments for expenses 
incurred for medical care (as defined in section 
213(d)).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The heading for section 125 of the Internal 
Revenue Code of 1986 is amended by inserting 
‘‘AND HEALTH FLEXIBLE SPENDING ARRANGE-
MENTS’’ after ‘‘PLANS’’. 
(2) The item relating to section 125 in the table 
of sections for part III of subchapter B of chapter 
1 of such Code is amended by inserting ‘‘and health 
flexible spending arrangements’’ after ‘‘plans’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 517. FSA AND HRA INTERACTION WITH HSAS. 
(a) ELIGIBLE INDIVIDUALS INCLUDE FSA AND HRA 
PARTICIPANTS.—Subparagraph (B) of section 223(c)(1) 
is amended— 
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(1) by striking ‘‘and’’ at the end of clause (ii), 
(2) by striking the period at the end of clause 
(iii) and inserting ‘‘, and’’, and 
(3) by inserting after clause (iii) the following 
new clause: 
‘‘(iv) coverage under a health flexible 
spending arrangement or a health reim-
bursement arrangement in the plan year a 
qualified HSA distribution as described in 
section 106(e) is made on behalf of the in-
dividual if after the qualified HSA dis-
tribution is made and for the remaining 
duration of the plan year, the coverage 
provided under the health flexible spending 
arrangement or health reimbursement ar-
rangement is converted to— 
‘‘(I) coverage that does not pay 
or reimburse any medical expense in-
curred before the minimum annual de-
ductible under paragraph (2)(A)(i) 
(prorated for the period occurring 
after the qualified HSA distribution is 
made) is satisfied, 
‘‘(II) coverage that, after the 
qualified HSA distribution is made, 
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does not pay or reimburse any med-
ical expense incurred after the quali-
fied HSA distribution is made other 
than preventive care as defined in 
paragraph (2)(C), 
‘‘(III) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses benefits for cov-
erage described in clause (ii) (but not 
through insurance or for long-term 
care services), 
‘‘(IV) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses benefits for per-
mitted insurance or coverage de-
scribed in clause (ii) (but not for long- 
term care services), 
‘‘(V) coverage that, after the 
qualified HSA distribution is made, 
pays or reimburses only those medical 
expenses incurred after an individual’s 
retirement (and no expenses incurred 
before retirement), or 
‘‘(VI) coverage that, after the 
qualified HSA distribution is made, is 
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suspended, pursuant to an election 
made on or before the date the indi-
vidual elects a qualified HSA distribu-
tion or, if later, on the date of the in-
dividual enrolls in a high deductible 
health plan, that does not pay or re-
imburse, at any time, any medical ex-
pense incurred during the suspension 
period except as defined in the pre-
ceding subclauses of this clause.’’. 
(b) QUALIFIED HSA DISTRIBUTION SHALL NOT AF-
FECT FLEXIBLE SPENDING ARRANGEMENT.—Paragraph 
(1) of section 106(e) is amended to read as follows: 
‘‘(1) IN GENERAL.—A plan shall not fail to be 
treated as a health flexible spending arrangement 
under this section, section 105, or section 125, or as 
a health reimbursement arrangement under this sec-
tion or section 105, merely because such plan pro-
vides for a qualified HSA distribution.’’. 
(c) FSA BALANCES AT YEAR END SHALL NOT FOR-
FEIT.—Paragraph (2) of section 125(d) is amended by 
adding at the end the following new subparagraph: 
‘‘(E) EXCEPTION FOR QUALIFIED HSA DIS-
TRIBUTIONS.—Subparagraph 
(A) 
shall 
not 
apply to the extent that there is an amount re-
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maining in a health flexible spending account at 
the end of a plan year that an individual elects 
to contribute to a health savings account pursu-
ant to a qualified HSA distribution (as defined 
in section 106(e)(2)).’’. 
(d) SIMPLIFICATION OF LIMITATIONS ON FSA AND 
HRA ROLLOVERS.—Paragraph (2) of section 106(e) is 
amended to read as follows: 
‘‘(2) QUALIFIED HSA DISTRIBUTION.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
HSA distribution’ means a distribution from a 
health flexible spending arrangement or health 
reimbursement arrangement to the extent that 
such distribution does not exceed the lesser 
of— 
‘‘(i) the balance in such arrangement 
as of the date of such distribution, or 
‘‘(ii) the amount determined under 
subparagraph (B). 
Such term shall not include more than 1 dis-
tribution with respect to any arrangement. 
‘‘(B) DOLLAR LIMITATIONS.— 
‘‘(i) DISTRIBUTIONS FROM A HEALTH 
FLEXIBLE
SPENDING
ARRANGEMENT.—A 
qualified HSA distribution from a health 
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