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Subtitle D—Patient-Centered 
Outcomes Research 
SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH. 
(a) IN GENERAL.—Title XI of the Social Security Act 
(42 U.S.C. 1301 et seq.) is amended by adding at the end 
the following new part: 
‘‘PART D—COMPARATIVE CLINICAL EFFECTIVENESS 
RESEARCH 
‘‘COMPARATIVE CLINICAL EFFECTIVENESS RESEARCH 
‘‘SEC. 1181. (a) DEFINITIONS.—In this section: 
‘‘(1) BOARD.—The term ‘Board’ means the 
Board of Governors established under subsection (f). 
‘‘(2) COMPARATIVE
CLINICAL
EFFECTIVENESS 
RESEARCH; RESEARCH.— 
‘‘(A) IN GENERAL.—The terms ‘comparative 
clinical effectiveness research’ and ‘research’ 
mean research evaluating and comparing health 
outcomes and the clinical effectiveness, risks, and 
benefits of 2 or more medical treatments, serv-
ices, and items described in subparagraph (B). 
‘‘(B) MEDICAL
TREATMENTS, 
SERVICES, 
AND
ITEMS
DESCRIBED.—The medical treat-
ments, services, and items described in this sub-
paragraph are health care interventions, proto-
cols for treatment, care management, and deliv-
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ery, procedures, medical devices, diagnostic tools, 
pharmaceuticals 
(including 
drugs 
and 
biologicals), integrative health practices, and any 
other strategies or items being used in the treat-
ment, management, and diagnosis of, or preven-
tion of illness or injury in, individuals. 
‘‘(3) CONFLICT OF INTEREST.—The term ‘conflict 
of interest’ means an association, including a finan-
cial or personal association, that have the potential to 
bias or have the appearance of biasing an individ-
ual’s decisions in matters related to the Institute or 
the conduct of activities under this section. 
‘‘(4) REAL CONFLICT OF INTEREST.—The term 
‘real conflict of interest’ means any instance where a 
member of the Board, the methodology committee es-
tablished under subsection (d)(6), or an advisory 
panel appointed under subsection (d)(4), or a close 
relative of such member, has received or could receive 
either of the following: 
‘‘(A) A direct financial benefit of any 
amount deriving from the result or findings of a 
study conducted under this section. 
‘‘(B) A financial benefit from individuals or 
companies that own or manufacture medical 
treatments, services, or items to be studied under 
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this section that in the aggregate exceeds $10,000 
per year. For purposes of the preceding sentence, 
a financial benefit includes honoraria, fees, stock, 
or other financial benefit and the current value 
of the member or close relative’s already existing 
stock holdings, in addition to any direct finan-
cial benefit deriving from the results or findings 
of a study conducted under this section. 
‘‘(b) PATIENT-CENTERED OUTCOMES RESEARCH IN-
STITUTE.— 
‘‘(1) ESTABLISHMENT.—There is authorized to 
be established a nonprofit corporation, to be known as 
the ‘Patient-Centered Outcomes Research Institute’ 
(referred to in this section as the ‘Institute’) which is 
neither an agency nor establishment of the United 
States Government. 
‘‘(2) APPLICATION OF PROVISIONS.—The Insti-
tute shall be subject to the provisions of this section, 
and, to the extent consistent with this section, to the 
District of Columbia Nonprofit Corporation Act. 
‘‘(3) FUNDING OF COMPARATIVE CLINICAL EF-
FECTIVENESS RESEARCH.—For fiscal year 2010 and 
each subsequent fiscal year, amounts in the Patient- 
Centered Outcomes Research Trust Fund (referred to 
in this section as the ‘PCORTF’) under section 9511 
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of the Internal Revenue Code of 1986 shall be avail-
able, without further appropriation, to the Institute 
to carry out this section. 
‘‘(c) PURPOSE.—The purpose of the Institute is to as-
sist patients, clinicians, purchasers, and policy-makers in 
making informed health decisions by advancing the quality 
and relevance of evidence concerning the manner in which 
diseases, disorders, and other health conditions can effec-
tively and appropriately be prevented, diagnosed, treated, 
monitored, and managed through research and evidence 
synthesis that considers variations in patient subpopula-
tions, and the dissemination of research findings with re-
spect to the relative health outcomes, clinical effectiveness, 
and appropriateness of the medical treatments, services, 
and items described in subsection (a)(2)(B). 
‘‘(d) DUTIES.— 
‘‘(1) IDENTIFYING
RESEARCH
PRIORITIES
AND 
ESTABLISHING RESEARCH PROJECT AGENDA.— 
‘‘(A) 
IDENTIFYING
RESEARCH
PRIOR-
ITIES.—The Institute shall identify national pri-
orities for research, taking into account factors of 
disease incidence, prevalence, and burden in the 
United States (with emphasis on chronic condi-
tions), gaps in evidence in terms of clinical out-
comes, practice variations and health disparities 
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in terms of delivery and outcomes of care, the po-
tential for new evidence to improve patient 
health, well-being, and the quality of care, the ef-
fect on national expenditures associated with a 
health care treatment, strategy, or health condi-
tions, as well as patient needs, outcomes, and 
preferences, the relevance to patients and clini-
cians in making informed health decisions, and 
priorities in the National Strategy for quality 
care established under section 399H of the Public 
Health Service Act that are consistent with this 
section. 
‘‘(B) ESTABLISHING
RESEARCH
PROJECT 
AGENDA.—The Institute shall establish and up-
date a research project agenda for research to ad-
dress the priorities identified under subpara-
graph (A), taking into consideration the types of 
research that might address each priority and 
the relative value (determined based on the cost 
of conducting research compared to the potential 
usefulness of the information produced by re-
search) associated with the different types of re-
search, and such other factors as the Institute de-
termines appropriate. 
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‘‘(2) CARRYING OUT RESEARCH PROJECT AGEN-
DA.— 
‘‘(A) RESEARCH.—The Institute shall carry 
out the research project agenda established under 
paragraph (1)(B) in accordance with the meth-
odological standards adopted under paragraph 
(9) using methods, including the following: 
‘‘(i) Systematic reviews and assess-
ments of existing and future research and 
evidence including original research con-
ducted subsequent to the date of the enact-
ment of this section. 
‘‘(ii) Primary research, such as ran-
domized clinical trials, molecularly in-
formed trials, and observational studies. 
‘‘(iii) Any other methodologies rec-
ommended by the methodology committee es-
tablished under paragraph (6) that are 
adopted by the Board under paragraph (9). 
‘‘(B) CONTRACTS FOR THE MANAGEMENT OF 
FUNDING AND CONDUCT OF RESEARCH.— 
‘‘(i) CONTRACTS.— 
‘‘(I) IN GENERAL.—In accordance 
with the research project agenda estab-
lished under paragraph (1)(B), the In-
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stitute shall enter into contracts for the 
management of funding and conduct of 
research in accordance with the fol-
lowing: 
‘‘(aa) Appropriate agencies 
and instrumentalities of the Fed-
eral Government. 
‘‘(bb) Appropriate academic 
research, private sector research, 
or study-conducting entities. 
‘‘(II) PREFERENCE.—In entering 
into contracts under subclause (I), the 
Institute shall give preference to the 
Agency for Healthcare Research and 
Quality and the National Institutes of 
Health, but only if the research to be 
conducted or managed under such con-
tract is authorized by the governing 
statutes of such Agency or Institutes. 
‘‘(ii) CONDITIONS FOR CONTRACTS.—A 
contract entered into under this subpara-
graph shall require that the agency, instru-
mentality, or other entity— 
‘‘(I) abide by the transparency 
and conflicts of interest requirements 
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under subsection (h) that apply to the 
Institute with respect to the research 
managed or conducted under such con-
tract; 
‘‘(II) comply with the methodo-
logical standards adopted under para-
graph (9) with respect to such research; 
‘‘(III) consult with the expert ad-
visory panels for clinical trials and 
rare disease appointed under clauses 
(ii) and (iii), respectively, of para-
graph (4)(A); 
‘‘(IV) subject to clause (iv), permit 
a researcher who conducts original re-
search under the contract for the agen-
cy, instrumentality, or other entity to 
have such research published in a peer- 
reviewed journal or other publication; 
‘‘(V) have appropriate processes 
in place to manage data privacy and 
meet ethical standards for the research; 
‘‘(VI) comply with the require-
ments of the Institute for making the 
information available to the public 
under paragraph (8); and 
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‘‘(VII) comply with other terms 
and conditions determined necessary 
by the Institute to carry out the re-
search agenda adopted under para-
graph (2). 
‘‘(iii) COVERAGE OF COPAYMENTS OR 
COINSURANCE.—A contract entered into 
under this subparagraph may allow for the 
coverage of copayments or coinsurance, or 
allow for other appropriate measures, to the 
extent that such coverage or other measures 
are necessary to preserve the validity of a 
research project, such as in the case where 
the research project must be blinded. 
‘‘(iv) REQUIREMENTS
FOR
PUBLICA-
TION
OF
RESEARCH.—Any research pub-
lished under clause (ii)(IV) shall be within 
the bounds of and entirely consistent with 
the evidence and findings produced under 
the contract with the Institute under this 
subparagraph. If the Institute determines 
that those requirements are not met, the In-
stitute shall not enter into another contract 
with the agency, instrumentality, or entity 
which managed or conducted such research 
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for a period determined appropriate by the 
Institute (but not less than 5 years). 
‘‘(C) REVIEW AND UPDATE OF EVIDENCE.— 
The Institute shall review and update evidence 
on a periodic basis as appropriate. 
‘‘(D) TAKING
INTO
ACCOUNT
POTENTIAL 
DIFFERENCES.—Research shall be designed, as 
appropriate, to take into account the potential 
for differences in the effectiveness of health care 
treatments, services, and items as used with var-
ious subpopulations, such as racial and ethnic 
minorities, women, age, and groups of individ-
uals with different comorbidities, genetic and 
molecular sub-types, or quality of life preferences 
and include members of such subpopulations as 
subjects in the research as feasible and appro-
priate. 
‘‘(E) DIFFERENCES IN TREATMENT MODALI-
TIES.—Research shall be designed, as appro-
priate, to take into account different characteris-
tics of treatment modalities that may affect re-
search outcomes, such as the phase of the treat-
ment modality in the innovation cycle and the 
impact of the skill of the operator of the treat-
ment modality. 
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‘‘(3) DATA COLLECTION.— 
‘‘(A) IN
GENERAL.—The Secretary shall, 
with appropriate safeguards for privacy, make 
available to the Institute such data collected by 
the Centers for Medicare & Medicaid Services 
under the programs under titles XVIII, XIX, and 
XXI, as well as provide access to the data net-
works developed under section 937(f) of the Pub-
lic Health Service Act, as the Institute and its 
contractors may require to carry out this section. 
The Institute may also request and obtain data 
from Federal, State, or private entities, includ-
ing data from clinical databases and registries. 
‘‘(B) USE
OF
DATA.—The Institute shall 
only use data provided to the Institute under 
subparagraph (A) in accordance with laws and 
regulations governing the release and use of such 
data, including applicable confidentiality and 
privacy standards. 
‘‘(4) APPOINTING EXPERT ADVISORY PANELS.— 
‘‘(A) APPOINTMENT.— 
‘‘(i) IN GENERAL.—The Institute may 
appoint permanent or ad hoc expert advi-
sory panels as determined appropriate to 
assist in identifying research priorities and 
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establishing the research project agenda 
under paragraph (1) and for other pur-
poses. 
‘‘(ii) EXPERT ADVISORY PANELS FOR 
CLINICAL TRIALS.—The Institute shall ap-
point expert advisory panels in carrying 
out randomized clinical trials under the re-
search project agenda under paragraph 
(2)(A)(ii). Such expert advisory panels shall 
advise the Institute and the agency, instru-
mentality, or entity conducting the research 
on the research question involved and the 
research design or protocol, including im-
portant patient subgroups and other pa-
rameters of the research. Such panels shall 
be available as a resource for technical ques-
tions that may arise during the conduct of 
such research. 
‘‘(iii) EXPERT
ADVISORY
PANEL
FOR 
RARE DISEASE.—In the case of a research 
study for rare disease, the Institute shall 
appoint an expert advisory panel for pur-
poses of assisting in the design of the re-
search study and determining the relative 
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value and feasibility of conducting the re-
search study. 
‘‘(B) COMPOSITION.—An expert advisory 
panel appointed under subparagraph (A) shall 
include representatives of practicing and re-
search clinicians, patients, and experts in sci-
entific and health services research, health serv-
ices delivery, and evidence-based medicine who 
have experience in the relevant topic, and as ap-
propriate, experts in integrative health and pri-
mary prevention strategies. The Institute may 
include a technical expert of each manufacturer 
or each medical technology that is included 
under the relevant topic, project, or category for 
which the panel is established. 
‘‘(5) SUPPORTING PATIENT AND CONSUMER REP-
RESENTATIVES.—The Institute shall provide support 
and resources to help patient and consumer represent-
atives effectively participate on the Board and expert 
advisory panels appointed by the Institute under 
paragraph (4). 
‘‘(6) 
ESTABLISHING
METHODOLOGY
COM-
MITTEE.— 
‘‘(A) IN GENERAL.—The Institute shall es-
tablish a standing methodology committee to 
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carry out the functions described in subpara-
graph (C). 
‘‘(B) APPOINTMENT
AND
COMPOSITION.— 
The methodology committee established under 
subparagraph (A) shall be composed of not more 
than 15 members appointed by the Comptroller 
General of the United States. Members appointed 
to the methodology committee shall be experts in 
their scientific field, such as health services re-
search, clinical research, comparative clinical ef-
fectiveness research, biostatistics, genomics, and 
research methodologies. Stakeholders with such 
expertise may be appointed to the methodology 
committee. In addition to the members appointed 
under the first sentence, the Directors of the Na-
tional Institutes of Health and the Agency for 
Healthcare Research and Quality (or their des-
ignees) shall each be included as members of the 
methodology committee. 
‘‘(C) FUNCTIONS.—Subject to subparagraph 
(D), the methodology committee shall work to de-
velop and improve the science and methods of 
comparative clinical effectiveness research by, 
not later than 18 months after the establishment 
of the Institute, directly or through subcontract, 
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developing and periodically updating the fol-
lowing: 
‘‘(i) Methodological standards for re-
search. Such methodological standards shall 
provide specific criteria for internal valid-
ity, generalizability, feasibility, and timeli-
ness of research and for health outcomes 
measures, risk adjustment, and other rel-
evant aspects of research and assessment 
with respect to the design of research. Any 
methodological standards developed and up-
dated under this subclause shall be scientif-
ically based and include methods by which 
new information, data, or advances in tech-
nology are considered and incorporated into 
ongoing research projects by the Institute, 
as appropriate. The process for developing 
and updating such standards shall include 
input from relevant experts, stakeholders, 
and decisionmakers, and shall provide op-
portunities for public comment. Such stand-
ards shall also include methods by which 
patient subpopulations can be accounted for 
and evaluated in different types of research. 
As appropriate, such standards shall build 
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on existing work on methodological stand-
ards for defined categories of health inter-
ventions and for each of the major cat-
egories of comparative clinical effectiveness 
research methods (determined as of the date 
of enactment of the Patient Protection and 
Affordable Care Act). 
‘‘(ii) A translation table that is de-
signed to provide guidance and act as a ref-
erence for the Board to determine research 
methods that are most likely to address each 
specific research question. 
‘‘(D) CONSULTATION AND CONDUCT OF EX-
AMINATIONS.—The methodology committee may 
consult and contract with the Institute of Medi-
cine of the National Academies and academic, 
nonprofit, or other private and governmental en-
tities with relevant expertise to carry out activi-
ties described in subparagraph (C) and may con-
sult with relevant stakeholders to carry out such 
activities. 
‘‘(E) REPORTS.—The methodology com-
mittee shall submit reports to the Board on the 
committee’s performance of the functions de-
scribed in subparagraph (C). Reports shall con-
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tain recommendations for the Institute to adopt 
methodological standards developed and updated 
by the methodology committee as well as other 
actions deemed necessary to comply with such 
methodological standards. 
‘‘(7) PROVIDING FOR A PEER-REVIEW PROCESS 
FOR PRIMARY RESEARCH.— 
‘‘(A) IN GENERAL.—The Institute shall en-
sure that there is a process for peer review of 
primary research described in subparagraph 
(A)(ii) of paragraph (2) that is conducted under 
such paragraph. Under such process— 
‘‘(i) evidence from such primary re-
search shall be reviewed to assess scientific 
integrity and adherence to methodological 
standards adopted under paragraph (9); 
and 
‘‘(ii) a list of the names of individuals 
contributing to any peer-review process dur-
ing the preceding year or years shall be 
made public and included in annual reports 
in accordance with paragraph (10)(D). 
‘‘(B) 
COMPOSITION.—Such 
peer-review 
process shall be designed in a manner so as to 
avoid bias and conflicts of interest on the part 
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of the reviewers and shall be composed of experts 
in the scientific field relevant to the research 
under review. 
‘‘(C) USE OF EXISTING PROCESSES.— 
‘‘(i) PROCESSES
OF
ANOTHER
ENTI-
TY.—In the case where the Institute enters 
into a contract or other agreement with an-
other entity for the conduct or management 
of research under this section, the Institute 
may utilize the peer-review process of such 
entity if such process meets the requirements 
under subparagraphs (A) and (B). 
‘‘(ii) PROCESSES
OF
APPROPRIATE 
MEDICAL
JOURNALS.—The Institute may 
utilize the peer-review process of appro-
priate medical journals if such process 
meets the requirements under subpara-
graphs (A) and (B). 
‘‘(8) RELEASE OF RESEARCH FINDINGS.— 
‘‘(A) IN GENERAL.—The Institute shall, not 
later than 90 days after the conduct or receipt 
of research findings under this part, make such 
research findings available to clinicians, pa-
tients, and the general public. The Institute shall 
ensure that the research findings— 
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‘‘(i) convey the findings of research in 
a manner that is comprehensible and useful 
to patients and providers in making health 
care decisions; 
‘‘(ii) fully convey findings and discuss 
considerations specific to certain subpopula-
tions, risk factors, and comorbidities, as ap-
propriate; 
‘‘(iii) include limitations of the re-
search and what further research may be 
needed as appropriate; 
‘‘(iv) not be construed as mandates for 
practice guidelines, coverage recommenda-
tions, payment, or policy recommendations; 
and 
‘‘(v) not include any data which would 
violate the privacy of research participants 
or any confidentiality agreements made 
with respect to the use of data under this 
section. 
‘‘(B) DEFINITION
OF
RESEARCH
FIND-
INGS.—In this paragraph, the term ‘research 
findings’ means the results of a study or assess-
ment. 
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‘‘(9) ADOPTION.—Subject to subsection (h)(1), 
the Institute shall adopt the national priorities iden-
tified under paragraph (1)(A), the research project 
agenda established under paragraph (1)(B), the meth-
odological standards developed and updated by the 
methodology committee under paragraph (6)(C)(i), 
and any peer-review process provided under para-
graph (7) by majority vote. In the case where the In-
stitute does not adopt such processes in accordance 
with the preceding sentence, the processes shall be re-
ferred to the appropriate staff or entity within the In-
stitute (or, in the case of the methodological stand-
ards, the methodology committee) for further review. 
‘‘(10) ANNUAL
REPORTS.—The Institute shall 
submit an annual report to Congress and the Presi-
dent, and shall make the annual report available to 
the public. Such report shall contain— 
‘‘(A) a description of the activities con-
ducted under this section, research priorities 
identified under paragraph (1)(A) and methodo-
logical standards developed and updated by the 
methodology 
committee 
under 
paragraph 
(6)(C)(i) that are adopted under paragraph (9) 
during the preceding year; 
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‘‘(B) the research project agenda and budget 
of the Institute for the following year; 
‘‘(C) any administrative activities con-
ducted by the Institute during the preceding 
year; 
‘‘(D) the names of individuals contributing 
to any peer-review process under paragraph (7), 
without identifying them with a particular re-
search project; and 
‘‘(E) any other relevant information (in-
cluding information on the membership of the 
Board, expert advisory panels, methodology com-
mittee, and the executive staff of the Institute, 
any conflicts of interest with respect to these in-
dividuals, and any bylaws adopted by the Board 
during the preceding year). 
‘‘(e) ADMINISTRATION.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), the 
Board shall carry out the duties of the Institute. 
‘‘(2) NONDELEGABLE DUTIES.—The activities de-
scribed in subsections (d)(1) and (d)(9) are nondele-
gable. 
‘‘(f) BOARD OF GOVERNORS.— 
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‘‘(1) IN GENERAL.—The Institute shall have a 
Board of Governors, which shall consist of the fol-
lowing members: 
‘‘(A) The Director of Agency for Healthcare 
Research and Quality (or the Director’s des-
ignee). 
‘‘(B) The Director of the National Institutes 
of Health (or the Director’s designee). 
‘‘(C) Seventeen members appointed, not 
later than 6 months after the date of enactment 
of this section, by the Comptroller General of the 
United States as follows: 
‘‘(i) 3 members representing patients 
and health care consumers. 
‘‘(ii) 5 members representing physi-
cians and providers, including at least 1 
surgeon, nurse, State-licensed integrative 
health care practitioner, and representative 
of a hospital. 
‘‘(iii) 3 members representing private 
payers, of whom at least 1 member shall 
represent health insurance issuers and at 
least 1 member shall represent employers 
who self-insure employee benefits. 
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‘‘(iv) 3 members representing pharma-
ceutical, device, and diagnostic manufactur-
ers or developers. 
‘‘(v) 1 member representing quality 
improvement or independent health service 
researchers. 
‘‘(vi) 2 members representing the Fed-
eral Government or the States, including at 
least 1 member representing a Federal 
health program or agency. 
‘‘(2) QUALIFICATIONS.—The Board shall rep-
resent a broad range of perspectives and collectively 
have scientific expertise in clinical health sciences re-
search, including epidemiology, decisions sciences, 
health economics, and statistics. In appointing the 
Board, the Comptroller General of the United States 
shall consider and disclose any conflicts of interest in 
accordance with subsection (h)(4)(B). Members of the 
Board shall be recused from relevant Institute activi-
ties in the case where the member (or an immediate 
family member of such member) has a real conflict of 
interest directly related to the research project or the 
matter that could affect or be affected by such partici-
pation. 
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‘‘(3) TERMS; VACANCIES.—A member of the 
Board shall be appointed for a term of 6 years, except 
with respect to the members first appointed, whose 
terms of appointment shall be staggered evenly over 2- 
year increments. No individual shall be appointed to 
the Board for more than 2 terms. Vacancies shall be 
filled in the same manner as the original appoint-
ment was made. 
‘‘(4) CHAIRPERSON
AND
VICE-CHAIRPERSON.— 
The Comptroller General of the United States shall 
designate a Chairperson and Vice Chairperson of the 
Board from among the members of the Board. Such 
members shall serve as Chairperson or Vice Chair-
person for a period of 3 years. 
‘‘(5) COMPENSATION.—Each member of the 
Board who is not an officer or employee of the Fed-
eral Government shall be entitled to compensation 
(equivalent to the rate provided for level IV of the Ex-
ecutive Schedule under section 5315 of title 5, United 
States Code) and expenses incurred while performing 
the duties of the Board. An officer or employee of the 
Federal government who is a member of the Board 
shall be exempt from compensation. 
‘‘(6) DIRECTOR AND STAFF; EXPERTS AND CON-
SULTANTS.—The Board may employ and fix the com-
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pensation of an Executive Director and such other 
personnel as may be necessary to carry out the duties 
of the Institute and may seek such assistance and 
support of, or contract with, experts and consultants 
that may be necessary for the performance of the du-
ties of the Institute. 
‘‘(7) MEETINGS
AND
HEARINGS.—The Board 
shall meet and hold hearings at the call of the Chair-
person or a majority of its members. Meetings not 
solely concerning matters of personnel shall be adver-
tised at least 7 days in advance and open to the pub-
lic. A majority of the Board members shall constitute 
a quorum, but a lesser number of members may meet 
and hold hearings. 
‘‘(g) FINANCIAL AND GOVERNMENTAL OVERSIGHT.— 
‘‘(1) CONTRACT FOR AUDIT.—The Institute shall 
provide for the conduct of financial audits of the In-
stitute on an annual basis by a private entity with 
expertise in conducting financial audits. 
‘‘(2) REVIEW AND ANNUAL REPORTS.— 
‘‘(A) REVIEW.—The Comptroller General of 
the United States shall review the following: 
‘‘(i) Not less frequently than on an an-
nual basis, the financial audits conducted 
under paragraph (1). 
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‘‘(ii) Not less frequently than every 5 
years, the processes established by the Insti-
tute, including the research priorities and 
the conduct of research projects, in order to 
determine whether information produced by 
such research projects is objective and cred-
ible, is produced in a manner consistent 
with the requirements under this section, 
and is developed through a transparent 
process. 
‘‘(iii) Not less frequently than every 5 
years, the dissemination and training ac-
tivities and data networks established under 
section 937 of the Public Health Service 
Act, including the methods and products 
used to disseminate research, the types of 
training conducted and supported, and the 
types and functions of the data networks es-
tablished, in order to determine whether the 
activities and data are produced in a man-
ner consistent with the requirements under 
such section. 
‘‘(iv) Not less frequently than every 5 
years, the overall effectiveness of activities 
conducted under this section and the dis-
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semination, training, and capacity building 
activities conducted under section 937 of the 
Public Health Service Act. Such review 
shall include an analysis of the extent to 
which research findings are used by health 
care decision-makers, the effect of the dis-
semination of such findings on reducing 
practice variation and disparities in health 
care, and the effect of the research conducted 
and disseminated on innovation and the 
health care economy of the United States. 
‘‘(v) Not later than 8 years after the 
date of enactment of this section, the ade-
quacy and use of the funding for the Insti-
tute and the activities conducted under sec-
tion 937 of the Public Health Service Act, 
including a determination as to whether, 
based on the utilization of research findings 
by public and private payers, funding 
sources for the Patient-Centered Outcomes 
Research Trust Fund under section 9511 of 
the Internal Revenue Code of 1986 are ap-
propriate and whether such sources of fund-
ing should be continued or adjusted. 
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‘‘(B) ANNUAL
REPORTS.—Not later than 
April 1 of each year, the Comptroller General of 
the United States shall submit to Congress a re-
port containing the results of the review con-
ducted under subparagraph (A) with respect to 
the preceding year (or years, if applicable), to-
gether with recommendations for such legislation 
and administrative action as the Comptroller 
General determines appropriate. 
‘‘(h) ENSURING TRANSPARENCY, CREDIBILITY, AND 
ACCESS.—The Institute shall establish procedures to ensure 
that the following requirements for ensuring transparency, 
credibility, and access are met: 
‘‘(1) PUBLIC COMMENT PERIODS.—The Institute 
shall provide for a public comment period of not less 
than 45 days and not more than 60 days prior to the 
adoption under subsection (d)(9) of the national pri-
orities identified under subsection (d)(1)(A), the re-
search project agenda established under subsection 
(d)(1)(B), the methodological standards developed and 
updated by the methodology committee under sub-
section (d)(6)(C)(i), and the peer-review process pro-
vided under paragraph (7), and after the release of 
draft findings with respect to systematic reviews of 
existing research and evidence. 
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‘‘(2) ADDITIONAL FORUMS.—The Institute shall 
support forums to increase public awareness and ob-
tain and incorporate public input and feedback 
through media (such as an Internet website) on re-
search priorities, research findings, and other duties, 
activities, or processes the Institute determines appro-
priate. 
‘‘(3) PUBLIC AVAILABILITY.—The Institute shall 
make available to the public and disclose through the 
official public Internet website of the Institute the fol-
lowing: 
‘‘(A) Information contained in research 
findings as specified in subsection (d)(9). 
‘‘(B) The process and methods for the con-
duct of research, including the identity of the en-
tity and the investigators conducing such re-
search and any conflicts of interests of such par-
ties, any direct or indirect links the entity has 
to industry, and research protocols, including 
measures taken, methods of research and anal-
ysis, research results, and such other information 
the Institute determines appropriate) concurrent 
with the release of research findings. 
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‘‘(C) Notice of public comment periods 
under paragraph (1), including deadlines for 
public comments. 
‘‘(D) Subsequent comments received during 
each of the public comment periods. 
‘‘(E) In accordance with applicable laws 
and processes and as the Institute determines ap-
propriate, proceedings of the Institute. 
‘‘(4) DISCLOSURE
OF
CONFLICTS
OF
INTER-
EST.— 
‘‘(A) IN GENERAL.—A conflict of interest 
shall be disclosed in the following manner: 
‘‘(i) By the Institute in appointing 
members to an expert advisory panel under 
subsection (d)(4), in selecting individuals to 
contribute to any peer-review process under 
subsection (d)(7), and for employment as 
executive staff of the Institute. 
‘‘(ii) By the Comptroller General in 
appointing members of the methodology 
committee under subsection (d)(6); 
‘‘(iii) By the Institute in the annual 
report under subsection (d)(10), except that, 
in the case of individuals contributing to 
any such peer review process, such descrip-
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tion shall be in a manner such that those 
individuals cannot be identified with a par-
ticular research project. 
‘‘(B) MANNER
OF
DISCLOSURE.—Conflicts 
of interest shall be disclosed as described in sub-
paragraph (A) as soon as practicable on the 
Internet web site of the Institute and of the Gov-
ernment Accountability Office. The information 
disclosed under the preceding sentence shall in-
clude the type, nature, and magnitude of the in-
terests of the individual involved, except to the 
extent that the individual recuses himself or her-
self from participating in the consideration of or 
any other activity with respect to the study as 
to which the potential conflict exists. 
‘‘(i) RULES.—The Institute, its Board or staff, shall 
be prohibited from accepting gifts, bequeaths, or donations 
of services or property. In addition, the Institute shall be 
prohibited from establishing a corporation or generating 
revenues from activities other than as provided under this 
section. 
‘‘(j) RULES OF CONSTRUCTION.— 
‘‘(1) COVERAGE.—Nothing in this section shall 
be construed— 
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‘‘(A) to permit the Institute to mandate cov-
erage, reimbursement, or other policies for any 
public or private payer; or 
‘‘(B) as preventing the Secretary from cov-
ering the routine costs of clinical care received by 
an individual entitled to, or enrolled for, benefits 
under title XVIII, XIX, or XXI in the case where 
such individual is participating in a clinical 
trial and such costs would otherwise be covered 
under such title with respect to the beneficiary.’’. 
(b) DISSEMINATION AND BUILDING CAPACITY FOR RE-
SEARCH.—Title IX of the Public Health Service Act (42 
U.S.C. 299 et seq.), as amended by section 3606, is further 
amended by inserting after section 936 the following: 
‘‘SEC. 937. DISSEMINATION AND BUILDING CAPACITY FOR 
RESEARCH. 
‘‘(a) IN GENERAL.— 
‘‘(1) DISSEMINATION.—The Office of Commu-
nication and Knowledge Transfer (referred to in this 
section as the ‘Office’) at the Agency for Healthcare 
Research and Quality (or any other relevant office 
designated by Agency for Healthcare Research and 
Quality), in consultation with the National Institutes 
of Health, shall broadly disseminate the research find-
ings that are published by the Patient Centered Out-
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comes Research Institute established under section 
1181(b) of the Social Security Act (referred to in this 
section as the ‘Institute’) and other government-fund-
ed research relevant to comparative clinical effective-
ness research. The Office shall create informational 
tools that organize and disseminate research findings 
for physicians, health care providers, patients, payers, 
and policy makers. The Office shall also develop a 
publicly available resource database that collects and 
contains government-funded evidence and research 
from public, private, not-for profit, and academic 
sources. 
‘‘(2) REQUIREMENTS.—The Office shall provide 
for the dissemination of the Institute’s research find-
ings and government-funded research relevant to com-
parative clinical effectiveness research to physicians, 
health care providers, patients, vendors of health in-
formation technology focused on clinical decision sup-
port, appropriate professional associations, and Fed-
eral and private health plans. Materials, forums, and 
media used to disseminate the findings, informational 
tools, and resource databases shall— 
‘‘(A) include a description of considerations 
for specific subpopulations, the research method-
ology, and the limitations of the research, and 
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the names of the entities, agencies, instrumental-
ities, and individuals who conducted any re-
search which was published by the Institute; and 
‘‘(B) not be construed as mandates, guide-
lines, or recommendations for payment, coverage, 
or treatment. 
‘‘(b) INCORPORATION OF RESEARCH FINDINGS.—The 
Office, in consultation with relevant medical and clinical 
associations, shall assist users of health information tech-
nology focused on clinical decision support to promote the 
timely incorporation of research findings disseminated 
under subsection (a) into clinical practices and to promote 
the ease of use of such incorporation. 
‘‘(c) FEEDBACK.—The Office shall establish a process 
to receive feedback from physicians, health care providers, 
patients, and vendors of health information technology fo-
cused on clinical decision support, appropriate professional 
associations, and Federal and private health plans about 
the value of the information disseminated and the assist-
ance provided under this section. 
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall preclude the Institute from making its research 
findings publicly available as required under section 
1181(d)(8) of the Social Security Act. 
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‘‘(e) TRAINING OF RESEARCHERS.—The Agency for 
Health Care Research and Quality, in consultation with 
the National Institutes of Health, shall build capacity for 
comparative clinical effectiveness research by establishing a 
grant program that provides for the training of researchers 
in the methods used to conduct such research, including sys-
tematic reviews of existing research and primary research 
such as clinical trials. At a minimum, such training shall 
be in methods that meet the methodological standards 
adopted under section 1181(d)(9) of the Social Security Act. 
‘‘(f) BUILDING DATA FOR RESEARCH.—The Secretary 
shall provide for the coordination of relevant Federal health 
programs to build data capacity for comparative clinical 
effectiveness research, including the development and use of 
clinical registries and health outcomes research data net-
works, in order to develop and maintain a comprehensive, 
interoperable data network to collect, link, and analyze data 
on outcomes and effectiveness from multiple sources, includ-
ing electronic health records. 
‘‘(g) AUTHORITY TO CONTRACT WITH
THE INSTI-
TUTE.—Agencies and instrumentalities of the Federal Gov-
ernment may enter into agreements with the Institute, and 
accept and retain funds, for the conduct and support of re-
search described in this part, provided that the research to 
be conducted or supported under such agreements is author-
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ized under the governing statutes of such agencies and in-
strumentalities.’’. 
(c) IN GENERAL.—Part D of title XI of the Social Se-
curity Act, as added by subsection (a), is amended by add-
ing at the end the following new section: 
‘‘LIMITATIONS ON CERTAIN USES OF COMPARATIVE 
CLINICAL EFFECTIVENESS RESEARCH 
‘‘SEC. 1182. (a) The Secretary may only use evidence 
and findings from research conducted under section 1181 
to make a determination regarding coverage under title 
XVIII if such use is through an iterative and transparent 
process which includes public comment and considers the 
effect on subpopulations. 
‘‘(b) Nothing in section 1181 shall be construed as— 
‘‘(1) superceding or modifying the coverage of 
items or services under title XVIII that the Secretary 
determines are reasonable and necessary under section 
1862(l)(1); or 
‘‘(2) authorizing the Secretary to deny coverage 
of items or services under such title solely on the basis 
of comparative clinical effectiveness research. 
‘‘(c)(1) The Secretary shall not use evidence or findings 
from comparative clinical effectiveness research conducted 
under section 1181 in determining coverage, reimburse-
ment, or incentive programs under title XVIII in a manner 
that treats extending the life of an elderly, disabled, or ter-
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minally ill individual as of lower value than extending the 
life of an individual who is younger, nondisabled, or not 
terminally ill. 
‘‘(2) Paragraph (1) shall not be construed as pre-
venting the Secretary from using evidence or findings from 
such comparative clinical effectiveness research in deter-
mining coverage, reimbursement, or incentive programs 
under title XVIII based upon a comparison of the difference 
in the effectiveness of alternative treatments in extending 
an individual’s life due to the individual’s age, disability, 
or terminal illness. 
‘‘(d)(1) The Secretary shall not use evidence or find-
ings from comparative clinical effectiveness research con-
ducted under section 1181 in determining coverage, reim-
bursement, or incentive programs under title XVIII in a 
manner that precludes, or with the intent to discourage, an 
individual from choosing a health care treatment based on 
how the individual values the tradeoff between extending 
the length of their life and the risk of disability. 
‘‘(2)(A) Paragraph (1) shall not be construed to— 
‘‘(i) limit the application of differential copay-
ments under title XVIII based on factors such as cost 
or type of service; or 
‘‘(ii) prevent the Secretary from using evidence 
or findings from such comparative clinical effective-
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ness research in determining coverage, reimbursement, 
or incentive programs under such title based upon a 
comparison of the difference in the effectiveness of al-
ternative health care treatments in extending an indi-
vidual’s life due to that individual’s age, disability, 
or terminal illness. 
‘‘(3) Nothing in the provisions of, or amendments 
made by the Patient Protection and Affordable Care Act, 
shall be construed to limit comparative clinical effectiveness 
research or any other research, evaluation, or dissemination 
of information concerning the likelihood that a health care 
treatment will result in disability. 
‘‘(e) The Patient-Centered Outcomes Research Institute 
established under section 1181(b)(1) shall not develop or 
employ a dollars-per-quality adjusted life year (or similar 
measure that discounts the value of a life because of an indi-
vidual’s disability) as a threshold to establish what type 
of health care is cost effective or recommended. The Sec-
retary shall not utilize such an adjusted life year (or such 
a similar measure) as a threshold to determine coverage, 
reimbursement, or incentive programs under title XVIII.’’. 
(d) IN GENERAL.—Part D of title XI of the Social Se-
curity Act, as added by subsection (a) and amended by sub-
section (c), is amended by adding at the end the following 
new section: 
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‘‘TRUST FUND TRANSFERS TO PATIENT-CENTERED 
OUTCOMES RESEARCH TRUST FUND 
‘‘SEC. 1183. (a) IN GENERAL.—The Secretary shall 
provide for the transfer, from the Federal Hospital Insur-
ance Trust Fund under section 1817 and the Federal Sup-
plementary Medical Insurance Trust Fund under section 
1841, in proportion (as estimated by the Secretary) to the 
total expenditures during such fiscal year that are made 
under title XVIII from the respective trust fund, to the Pa-
tient-Centered Outcomes Research Trust Fund (referred to 
in this section as the ‘PCORTF’) under section 9511 of the 
Internal Revenue Code of 1986, of the following: 
‘‘(1) For fiscal year 2013, an amount equal to 
$1 multiplied by the average number of individuals 
entitled to benefits under part A, or enrolled under 
part B, of title XVIII during such fiscal year. 
‘‘(2) For each of fiscal years 2014, 2015, 2016, 
2017, 2018, and 2019, an amount equal to $2 multi-
plied by the average number of individuals entitled to 
benefits under part A, or enrolled under part B, of 
title XVIII during such fiscal year. 
‘‘(b) ADJUSTMENTS FOR INCREASES IN HEALTH CARE 
SPENDING.—In the case of any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under sub-
section (a)(2) for such fiscal year shall be equal to the sum 
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of such dollar amount for the previous fiscal year (deter-
mined after the application of this subsection), plus an 
amount equal to the product of— 
‘‘(1) such dollar amount for the previous fiscal 
year, multiplied by 
‘‘(2) the percentage increase in the projected per 
capita amount of National Health Expenditures, as 
most recently published by the Secretary before the be-
ginning of the fiscal year.’’. 
(e) PATIENT-CENTERED OUTCOMES RESEARCH TRUST 
FUND; FINANCING FOR TRUST FUND.— 
(1) ESTABLISHMENT OF TRUST FUND.— 
(A) IN GENERAL.—Subchapter A of chapter 
98 of the Internal Revenue Code of 1986 (relat-
ing to establishment of trust funds) is amended 
by adding at the end the following new section: 
‘‘SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH 
TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is established 
in the Treasury of the United States a trust fund to be 
known as the ‘Patient-Centered Outcomes Research Trust 
Fund’ (hereafter in this section referred to as the 
‘PCORTF’), consisting of such amounts as may be appro-
priated or credited to such Trust Fund as provided in this 
section and section 9602(b). 
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‘‘(b) TRANSFERS TO FUND.— 
‘‘(1) APPROPRIATION.—There are hereby appro-
priated to the Trust Fund the following: 
‘‘(A) For fiscal year 2010, $10,000,000. 
‘‘(B) For fiscal year 2011, $50,000,000. 
‘‘(C) For fiscal year 2012, $150,000,000. 
‘‘(D) For fiscal year 2013— 
‘‘(i) an amount equivalent to the net 
revenues received in the Treasury from the 
fees imposed under subchapter B of chapter 
34 (relating to fees on health insurance and 
self-insured plans) for such fiscal year; and 
‘‘(ii) $150,000,000. 
‘‘(E) For each of fiscal years 2014, 2015, 
2016, 2017, 2018, and 2019— 
‘‘(i) an amount equivalent to the net 
revenues received in the Treasury from the 
fees imposed under subchapter B of chapter 
34 (relating to fees on health insurance and 
self-insured plans) for such fiscal year; and 
‘‘(ii) $150,000,000. 
The amounts appropriated under subparagraphs 
(A), (B), (C), (D)(ii), and (E)(ii) shall be trans-
ferred from the general fund of the Treasury, 
from funds not otherwise appropriated. 
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‘‘(2) TRUST FUND TRANSFERS.—In addition to 
the amounts appropriated under paragraph (1), there 
shall be credited to the PCORTF the amounts trans-
ferred under section 1183 of the Social Security Act. 
‘‘(3) LIMITATION ON TRANSFERS TO PCORTF.— 
No amount may be appropriated or transferred to the 
PCORTF on and after the date of any expenditure 
from the PCORTF which is not an expenditure per-
mitted under this section. The determination of 
whether an expenditure is so permitted shall be made 
without regard to— 
‘‘(A) any provision of law which is not con-
tained or referenced in this chapter or in a rev-
enue Act, and 
‘‘(B) whether such provision of law is a sub-
sequently enacted provision or directly or indi-
rectly seeks to waive the application of this para-
graph. 
‘‘(c) TRUSTEE.—The Secretary of the Treasury shall 
be a trustee of the PCORTF. 
‘‘(d) EXPENDITURES FROM FUND.— 
‘‘(1) AMOUNTS AVAILABLE TO THE PATIENT-CEN-
TERED OUTCOMES RESEARCH INSTITUTE.—Subject to 
paragraph (2), amounts in the PCORTF are avail-
able, without further appropriation, to the Patient- 
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Centered Outcomes Research Institute established 
under section 1181(b) of the Social Security Act for 
carrying out part D of title XI of the Social Security 
Act (as in effect on the date of enactment of such Act). 
‘‘(2) TRANSFER OF FUNDS.— 
‘‘(A) IN
GENERAL.—The trustee of the 
PCORTF shall provide for the transfer from the 
PCORTF of 20 percent of the amounts appro-
priated or credited to the PCORTF for each of 
fiscal years 2011 through 2019 to the Secretary 
of Health and Human Services to carry out sec-
tion 937 of the Public Health Service Act. 
‘‘(B) AVAILABILITY.—Amounts transferred 
under subparagraph (A) shall remain available 
until expended. 
‘‘(C) REQUIREMENTS.—Of the amounts 
transferred under subparagraph (A) with respect 
to a fiscal year, the Secretary of Health and 
Human Services shall distribute— 
‘‘(i) 80 percent to the Office of Commu-
nication and Knowledge Transfer of the 
Agency for Healthcare Research and Qual-
ity (or any other relevant office designated 
by Agency for Healthcare Research and 
Quality) to carry out the activities de-
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scribed in section 937 of the Public Health 
Service Act; and 
‘‘(ii) 20 percent to the Secretary to 
carry out the activities described in such 
section 937. 
‘‘(e) NET REVENUES.—For purposes of this section, the 
term ‘net revenues’ means the amount estimated by the Sec-
retary of the Treasury based on the excess of— 
‘‘(1) the fees received in the Treasury under sub-
chapter B of chapter 34, over 
‘‘(2) the decrease in the tax imposed by chapter 
1 resulting from the fees imposed by such subchapter. 
‘‘(f) TERMINATION.—No amounts shall be available for 
expenditure from the PCORTF after September 30, 2019, 
and any amounts in such Trust Fund after such date shall 
be transferred to the general fund of the Treasury.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for subchapter A of chapter 98 of such 
Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 9511. Patient-centered outcomes research trust fund.’’. 
(2) FINANCING FOR FUND FROM FEES ON IN-
SURED AND SELF-INSURED HEALTH PLANS.— 
(A) GENERAL RULE.—Chapter 34 of the In-
ternal Revenue Code of 1986 is amended by add-
ing at the end the following new subchapter: 
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‘‘Subchapter B—Insured and Self-Insured 
Health Plans 
‘‘Sec. 4375. Health insurance. 
‘‘Sec. 4376. Self-insured health plans. 
‘‘Sec. 4377. Definitions and special rules. 
‘‘SEC. 4375. HEALTH INSURANCE. 
‘‘(a) IMPOSITION OF FEE.—There is hereby imposed 
on each specified health insurance policy for each policy 
year ending after September 30, 2012, a fee equal to the 
product of $2 ($1 in the case of policy years ending during 
fiscal year 2013) multiplied by the average number of lives 
covered under the policy. 
‘‘(b) LIABILITY FOR FEE.—The fee imposed by sub-
section (a) shall be paid by the issuer of the policy. 
‘‘(c) SPECIFIED HEALTH INSURANCE POLICY.—For 
purposes of this section: 
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this section, the term ‘specified health insurance 
policy’ means any accident or health insurance policy 
(including a policy under a group health plan) issued 
with respect to individuals residing in the United 
States. 
‘‘(2) EXEMPTION FOR CERTAIN POLICIES.—The 
term ‘specified health insurance policy’ does not in-
clude any insurance if substantially all of its coverage 
is of excepted benefits described in section 9832(c). 
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‘‘(3) TREATMENT
OF
PREPAID
HEALTH
COV-
ERAGE ARRANGEMENTS.— 
‘‘(A) IN GENERAL.—In the case of any ar-
rangement described in subparagraph (B), such 
arrangement shall be treated as a specified 
health insurance policy, and the person referred 
to in such subparagraph shall be treated as the 
issuer. 
‘‘(B) DESCRIPTION
OF
ARRANGEMENTS.— 
An arrangement is described in this subpara-
graph if under such arrangement fixed payments 
or premiums are received as consideration for 
any person’s agreement to provide or arrange for 
the provision of accident or health coverage to 
residents of the United States, regardless of how 
such coverage is provided or arranged to be pro-
vided. 
‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH CARE 
SPENDING.—In the case of any policy year ending in any 
fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a) for such policy year 
shall be equal to the sum of such dollar amount for policy 
years ending in the previous fiscal year (determined after 
the application of this subsection), plus an amount equal 
to the product of— 
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‘‘(1) such dollar amount for policy years ending 
in the previous fiscal year, multiplied by 
‘‘(2) the percentage increase in the projected per 
capita amount of National Health Expenditures, as 
most recently published by the Secretary before the be-
ginning of the fiscal year. 
‘‘(e) TERMINATION.—This section shall not apply to 
policy years ending after September 30, 2019. 
‘‘SEC. 4376. SELF-INSURED HEALTH PLANS. 
‘‘(a) IMPOSITION OF FEE.—In the case of any applica-
ble self-insured health plan for each plan year ending after 
September 30, 2012, there is hereby imposed a fee equal to 
$2 ($1 in the case of plan years ending during fiscal year 
2013) multiplied by the average number of lives covered 
under the plan. 
‘‘(b) LIABILITY FOR FEE.— 
‘‘(1) IN
GENERAL.—The fee imposed by sub-
section (a) shall be paid by the plan sponsor. 
‘‘(2) PLAN
SPONSOR.—For purposes of para-
graph (1) the term ‘plan sponsor’ means— 
‘‘(A) the employer in the case of a plan es-
tablished or maintained by a single employer, 
‘‘(B) the employee organization in the case 
of a plan established or maintained by an em-
ployee organization, 
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‘‘(C) in the case of— 
‘‘(i) a plan established or maintained 
by 2 or more employers or jointly by 1 or 
more employers and 1 or more employee or-
ganizations, 
‘‘(ii) a multiple employer welfare ar-
rangement, or 
‘‘(iii) a voluntary employees’ bene-
ficiary association described in section 
501(c)(9), the association, committee, joint 
board of trustees, or other similar group of 
representatives of the parties who establish 
or maintain the plan, or 
‘‘(D) the cooperative or association de-
scribed in subsection (c)(2)(F) in the case of a 
plan established or maintained by such a cooper-
ative or association. 
‘‘(c) APPLICABLE SELF-INSURED HEALTH PLAN.—For 
purposes of this section, the term ‘applicable self-insured 
health plan’ means any plan for providing accident or 
health coverage if— 
‘‘(1) any portion of such coverage is provided 
other than through an insurance policy, and 
‘‘(2) such plan is established or maintained— 
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‘‘(A) by 1 or more employers for the benefit 
of their employees or former employees, 
‘‘(B) by 1 or more employee organizations 
for the benefit of their members or former mem-
bers, 
‘‘(C) jointly by 1 or more employers and 1 
or more employee organizations for the benefit of 
employees or former employees, 
‘‘(D) by a voluntary employees’ beneficiary 
association described in section 501(c)(9), 
‘‘(E) by any organization described in sec-
tion 501(c)(6), or 
‘‘(F) in the case of a plan not described in 
the preceding subparagraphs, by a multiple em-
ployer welfare arrangement (as defined in sec-
tion 3(40) of Employee Retirement Income Secu-
rity Act of 1974), a rural electric cooperative (as 
defined in section 3(40)(B)(iv) of such Act), or 
a rural telephone cooperative association (as de-
fined in section 3(40)(B)(v) of such Act). 
‘‘(d) ADJUSTMENTS FOR INCREASES IN HEALTH CARE 
SPENDING.—In the case of any plan year ending in any 
fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a) for such plan year 
shall be equal to the sum of such dollar amount for plan 
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years ending in the previous fiscal year (determined after 
the application of this subsection), plus an amount equal 
to the product of— 
‘‘(1) such dollar amount for plan years ending 
in the previous fiscal year, multiplied by 
‘‘(2) the percentage increase in the projected per 
capita amount of National Health Expenditures, as 
most recently published by the Secretary before the be-
ginning of the fiscal year. 
‘‘(e) TERMINATION.—This section shall not apply to 
plan years ending after September 30, 2019. 
‘‘SEC. 4377. DEFINITIONS AND SPECIAL RULES. 
‘‘(a) DEFINITIONS.—For purposes of this subchapter— 
‘‘(1) ACCIDENT AND HEALTH COVERAGE.—The 
term ‘accident and health coverage’ means any cov-
erage which, if provided by an insurance policy, 
would cause such policy to be a specified health insur-
ance policy (as defined in section 4375(c)). 
‘‘(2) INSURANCE POLICY.—The term ‘insurance 
policy’ means any policy or other instrument whereby 
a contract of insurance is issued, renewed, or ex-
tended. 
‘‘(3) UNITED STATES.—The term ‘United States’ 
includes any possession of the United States. 
‘‘(b) TREATMENT OF GOVERNMENTAL ENTITIES.— 
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‘‘(1) IN GENERAL.—For purposes of this sub-
chapter— 
‘‘(A) the term ‘person’ includes any govern-
mental entity, and 
‘‘(B) notwithstanding any other law or rule 
of law, governmental entities shall not be exempt 
from the fees imposed by this subchapter except 
as provided in paragraph (2). 
‘‘(2) TREATMENT
OF
EXEMPT
GOVERNMENTAL 
PROGRAMS.—In the case of an exempt governmental 
program, no fee shall be imposed under section 4375 
or section 4376 on any covered life under such pro-
gram. 
‘‘(3) EXEMPT
GOVERNMENTAL
PROGRAM
DE-
FINED.—For purposes of this subchapter, the term ‘ex-
empt governmental program’ means— 
‘‘(A) any insurance program established 
under title XVIII of the Social Security Act, 
‘‘(B) the medical assistance program estab-
lished by title XIX or XXI of the Social Security 
Act, 
‘‘(C) any program established by Federal 
law for providing medical care (other than 
through insurance policies) to individuals (or the 
spouses and dependents thereof) by reason of 
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such individuals being members of the Armed 
Forces of the United States or veterans, and 
‘‘(D) any program established by Federal 
law for providing medical care (other than 
through insurance policies) to members of Indian 
tribes (as defined in section 4(d) of the Indian 
Health Care Improvement Act). 
‘‘(c) TREATMENT AS TAX.—For purposes of subtitle F, 
the fees imposed by this subchapter shall be treated as if 
they were taxes. 
‘‘(d) NO COVER OVER TO POSSESSIONS.—Notwith-
standing any other provision of law, no amount collected 
under this subchapter shall be covered over to any posses-
sion of the United States.’’. 
(B) CLERICAL AMENDMENTS.— 
(i) Chapter 34 of such Code is amend-
ed by striking the chapter heading and in-
serting the following: 
‘‘CHAPTER 34—TAXES ON CERTAIN 
INSURANCE POLICIES 
‘‘SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERS 
‘‘SUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS 
‘‘Subchapter A—Policies Issued By Foreign 
Insurers’’. 
(ii) The table of chapters for subtitle D 
of such Code is amended by striking the 
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item relating to chapter 34 and inserting 
the following new item: 
‘‘CHAPTER 34—TAXES ON CERTAIN INSURANCE POLICIES’’. 
(f) TAX-EXEMPT STATUS OF THE PATIENT-CENTERED 
OUTCOMES RESEARCH INSTITUTE.—Subsection 501(l) of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(4) The Patient-Centered Outcomes Research 
Institute established under section 1181(b) of the So-
cial Security Act.’’. 
SEC. 6302. FEDERAL COORDINATING COUNCIL FOR COM-
PARATIVE EFFECTIVENESS RESEARCH. 
Notwithstanding any other provision of law, the Fed-
eral Coordinating Council for Comparative Effectiveness 
Research established under section 804 of Division A of the 
American Recovery and Reinvestment Act of 2009 (42 
U.S.C. 299b–8), including the requirement under subsection 
(e)(2) of such section, shall terminate on the date of enact-
ment of this Act. 
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Subtitle 
E—Medicare, 
Medicaid, 
and CHIP Program Integrity 
Provisions 
SEC. 6401. PROVIDER SCREENING AND OTHER ENROLL-
MENT 
REQUIREMENTS 
UNDER 
MEDICARE, 
MEDICAID, AND CHIP. 
(a) MEDICARE.—Section 1866(j) of the Social Security 
Act (42 U.S.C. 1395cc(j)) is amended— 
(1) in paragraph (1)(A), by adding at the end 
the following: ‘‘Such process shall include screening of 
providers and suppliers in accordance with para-
graph (2), a provisional period of enhanced oversight 
in accordance with paragraph (3), disclosure require-
ments in accordance with paragraph (4), the imposi-
tion of temporary enrollment moratoria in accordance 
with paragraph (5), and the establishment of compli-
ance programs in accordance with paragraph (6).’’; 
(2) by redesignating paragraph (2) as para-
graph (7); and 
(3) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) PROVIDER SCREENING.— 
‘‘(A) PROCEDURES.—Not later than 180 
days after the date of enactment of this para-
graph, the Secretary, in consultation with the 
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Inspector General of the Department of Health 
and Human Services, shall establish procedures 
under which screening is conducted with respect 
to providers of medical or other items or services 
and suppliers under the program under this 
title, the Medicaid program under title XIX, and 
the CHIP program under title XXI. 
‘‘(B) LEVEL OF SCREENING.—The Secretary 
shall determine the level of screening conducted 
under this paragraph according to the risk of 
fraud, waste, and abuse, as determined by the 
Secretary, with respect to the category of pro-
vider of medical or other items or services or 
supplier. Such screening— 
‘‘(i) shall include a licensure check, 
which may include such checks across 
States; and 
‘‘(ii) may, as the Secretary determines 
appropriate based on the risk of fraud, 
waste, and abuse described in the preceding 
sentence, include— 
‘‘(I) a criminal background check; 
‘‘(II) fingerprinting; 
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‘‘(III) unscheduled and unan-
nounced 
site 
visits, 
including 
preenrollment site visits; 
‘‘(IV) database checks (including 
such checks across States); and 
‘‘(V) such other screening as the 
Secretary determines appropriate. 
‘‘(C) APPLICATION FEES.— 
‘‘(i) INDIVIDUAL
PROVIDERS.—Except 
as provided in clause (iii), the Secretary 
shall impose a fee on each individual pro-
vider of medical or other items or services 
or supplier (such as a physician, physician 
assistant, nurse practitioner, or clinical 
nurse specialist) with respect to which 
screening is conducted under this paragraph 
in an amount equal to— 
‘‘(I) for 2010, $200; and 
‘‘(II) for 2011 and each subse-
quent year, the amount determined 
under this clause for the preceding 
year, adjusted by the percentage change 
in the consumer price index for all 
urban consumers (all items; United 
States city average) for the 12-month 
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period ending with June of the pre-
vious year. 
‘‘(ii) INSTITUTIONAL PROVIDERS.—Ex-
cept as provided in clause (iii), the Sec-
retary shall impose a fee on each institu-
tional provider of medical or other items or 
services or supplier (such as a hospital or 
skilled nursing facility) with respect to 
which screening is conducted under this 
paragraph in an amount equal to— 
‘‘(I) for 2010, $500; and 
‘‘(II) for 2011 and each subse-
quent year, the amount determined 
under this clause for the preceding 
year, adjusted by the percentage change 
in the consumer price index for all 
urban consumers (all items; United 
States city average) for the 12-month 
period ending with June of the pre-
vious year. 
‘‘(iii) HARDSHIP EXCEPTION; WAIVER 
FOR CERTAIN MEDICAID PROVIDERS.—The 
Secretary may, on a case-by-case basis, ex-
empt a provider of medical or other items 
or services or supplier from the imposition 
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of an application fee under this subpara-
graph if the Secretary determines that the 
imposition of the application fee would re-
sult in a hardship. The Secretary may 
waive the application fee under this sub-
paragraph for providers enrolled in a State 
Medicaid program for whom the State dem-
onstrates that imposition of the fee would 
impede beneficiary access to care. 
‘‘(iv) USE OF FUNDS.—Amounts col-
lected as a result of the imposition of a fee 
under this subparagraph shall be used by 
the Secretary for program integrity efforts, 
including to cover the costs of conducting 
screening under this paragraph and to 
carry out this subsection and section 1128J. 
‘‘(D) APPLICATION AND ENFORCEMENT.— 
‘‘(i) NEW PROVIDERS OF SERVICES AND 
SUPPLIERS.—The 
screening 
under 
this 
paragraph shall apply, in the case of a pro-
vider of medical or other items or services 
or supplier who is not enrolled in the pro-
gram under this title, title XIX , or title 
XXI as of the date of enactment of this 
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paragraph, on or after the date that is 1 
year after such date of enactment. 
‘‘(ii) CURRENT PROVIDERS OF SERV-
ICES AND SUPPLIERS.—The screening under 
this paragraph shall apply, in the case of a 
provider of medical or other items or serv-
ices or supplier who is enrolled in the pro-
gram under this title, title XIX, or title XXI 
as of such date of enactment, on or after the 
date that is 2 years after such date of enact-
ment. 
‘‘(iii) 
REVALIDATION
OF
ENROLL-
MENT.—Effective beginning on the date that 
is 180 days after such date of enactment, 
the screening under this paragraph shall 
apply with respect to the revalidation of en-
rollment of a provider of medical or other 
items or services or supplier in the program 
under this title, title XIX, or title XXI. 
‘‘(iv) LIMITATION
ON
ENROLLMENT 
AND
REVALIDATION
OF
ENROLLMENT.—In 
no case may a provider of medical or other 
items or services or supplier who has not 
been screened under this paragraph be ini-
tially enrolled or reenrolled in the program 
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under this title, title XIX, or title XXI on 
or after the date that is 3 years after such 
date of enactment. 
‘‘(E) EXPEDITED RULEMAKING.—The Sec-
retary may promulgate an interim final rule to 
carry out this paragraph. 
‘‘(3) PROVISIONAL PERIOD OF ENHANCED OVER-
SIGHT FOR NEW PROVIDERS OF SERVICES AND SUP-
PLIERS.— 
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures to provide for a provisional 
period of not less than 30 days and not more 
than 1 year during which new providers of med-
ical or other items or services and suppliers, as 
the Secretary determines appropriate, including 
categories of providers or suppliers, would be 
subject to enhanced oversight, such as prepay-
ment review and payment caps, under the pro-
gram under this title, the Medicaid program 
under title XIX. and the CHIP program under 
title XXI. 
‘‘(B) 
IMPLEMENTATION.—The 
Secretary 
may establish by program instruction or other-
wise the procedures under this paragraph. 
‘‘(4) INCREASED DISCLOSURE REQUIREMENTS.— 
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‘‘(A) DISCLOSURE.—A provider of medical 
or other items or services or supplier who sub-
mits an application for enrollment or revalida-
tion of enrollment in the program under this 
title, title XIX, or title XXI on or after the date 
that is 1 year after the date of enactment of this 
paragraph shall disclose (in a form and manner 
and at such time as determined by the Sec-
retary) any current or previous affiliation (di-
rectly or indirectly) with a provider of medical 
or other items or services or supplier that has 
uncollected debt, has been or is subject to a pay-
ment suspension under a Federal health care 
program (as defined in section 1128B(f)), has 
been excluded from participation under the pro-
gram under this title, the Medicaid program 
under title XIX, or the CHIP program under 
title XXI, or has had its billing privileges denied 
or revoked. 
‘‘(B) AUTHORITY TO DENY ENROLLMENT.— 
If the Secretary determines that such previous 
affiliation poses an undue risk of fraud, waste, 
or abuse, the Secretary may deny such applica-
tion. Such a denial shall be subject to appeal in 
accordance with paragraph (7). 
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‘‘(5) AUTHORITY TO ADJUST PAYMENTS OF PRO-
VIDERS
OF
SERVICES
AND
SUPPLIERS
WITH
THE 
SAME TAX IDENTIFICATION NUMBER FOR PAST-DUE 
OBLIGATIONS.— 
‘‘(A) IN
GENERAL.—Notwithstanding any 
other provision of this title, in the case of an ap-
plicable provider of services or supplier, the Sec-
retary may make any necessary adjustments to 
payments to the applicable provider of services 
or supplier under the program under this title in 
order to satisfy any past-due obligations de-
scribed in subparagraph (B)(ii) of an obligated 
provider of services or supplier. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) IN GENERAL.—The term ‘applica-
ble provider of services or supplier’ means a 
provider of services or supplier that has the 
same taxpayer identification number as-
signed under section 6109 of the Internal 
Revenue Code of 1986 as is assigned to the 
obligated provider of services or supplier 
under such section, regardless of whether the 
applicable provider of services or supplier is 
assigned a different billing number or na-
tional provider identification number under 
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the program under this title than is as-
signed to the obligated provider of services 
or supplier. 
‘‘(ii) OBLIGATED PROVIDER OF SERV-
ICES
OR
SUPPLIER.—The term ‘obligated 
provider of services or supplier’ means a 
provider of services or supplier that owes a 
past-due obligation under the program 
under this title (as determined by the Sec-
retary). 
‘‘(6) TEMPORARY MORATORIUM ON ENROLLMENT 
OF NEW PROVIDERS.— 
‘‘(A) IN GENERAL.—The Secretary may im-
pose a temporary moratorium on the enrollment 
of new providers of services and suppliers, in-
cluding categories of providers of services and 
suppliers, in the program under this title, under 
the Medicaid program under title XIX, or under 
the CHIP program under title XXI if the Sec-
retary determines such moratorium is necessary 
to prevent or combat fraud, waste, or abuse 
under either such program. 
‘‘(B) LIMITATION ON REVIEW.—There shall 
be no judicial review under section 1869, section 
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1878, or otherwise, of a temporary moratorium 
imposed under subparagraph (A). 
‘‘(7) COMPLIANCE PROGRAMS.— 
‘‘(A) IN GENERAL.—On or after the date of 
implementation determined by the Secretary 
under subparagraph (C), a provider of medical 
or other items or services or supplier within a 
particular industry sector or category shall, as a 
condition of enrollment in the program under 
this title, title XIX, or title XXI, establish a com-
pliance program that contains the core elements 
established under subparagraph (B) with respect 
to that provider or supplier and industry or cat-
egory. 
‘‘(B) 
ESTABLISHMENT
OF
CORE
ELE-
MENTS.—The Secretary, in consultation with the 
Inspector General of the Department of Health 
and Human Services, shall establish core ele-
ments for a compliance program under subpara-
graph (A) for providers or suppliers within a 
particular industry or category. 
‘‘(C) TIMELINE
FOR
IMPLEMENTATION.— 
The Secretary shall determine the timeline for 
the establishment of the core elements under sub-
paragraph (B) and the date of the implementa-
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tion of subparagraph (A) for providers or sup-
pliers within a particular industry or category. 
The Secretary shall, in determining such date of 
implementation, consider the extent to which the 
adoption of compliance programs by a provider 
of medical or other items or services or supplier 
is widespread in a particular industry sector or 
with respect to a particular provider or supplier 
category.’’. 
(b) MEDICAID.— 
(1) STATE PLAN AMENDMENT.—Section 1902(a) 
of the Social Security Act (42 U.S.C. 1396a(a)), as 
amended by section 4302(b), is amended— 
(A) in subsection (a)— 
(i) by striking ‘‘and’’ at the end of 
paragraph (75); 
(ii) by striking the period at the end of 
paragraph (76) and inserting a semicolon; 
and 
(iii) by inserting after paragraph (76) 
the following: 
‘‘(77) provide that the State shall comply with 
provider and supplier screening, oversight, and re-
porting requirements in accordance with subsection 
(ii);’’; and 
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(B) by adding at the end the following: 
‘‘(ii) PROVIDER AND SUPPLIER SCREENING, OVER-
SIGHT, AND REPORTING REQUIREMENTS.—For purposes of 
subsection (a)(77), the requirements of this subsection are 
the following: 
‘‘(1) SCREENING.—The State complies with the 
process for screening providers and suppliers under 
this title, as established by the Secretary under sec-
tion 1886(j)(2). 
‘‘(2) PROVISIONAL PERIOD OF ENHANCED OVER-
SIGHT FOR NEW PROVIDERS AND SUPPLIERS.—The 
State complies with procedures to provide for a provi-
sional period of enhanced oversight for new providers 
and suppliers under this title, as established by the 
Secretary under section 1886(j)(3). 
‘‘(3) DISCLOSURE
REQUIREMENTS.—The State 
requires providers and suppliers under the State plan 
or under a waiver of the plan to comply with the dis-
closure requirements established by the Secretary 
under section 1886(j)(4). 
‘‘(4) TEMPORARY MORATORIUM ON ENROLLMENT 
OF NEW PROVIDERS OR SUPPLIERS.— 
‘‘(A) TEMPORARY MORATORIUM IMPOSED BY 
THE SECRETARY.— 
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‘‘(i) IN
GENERAL.—Subject to clause 
(ii), the State complies with any temporary 
moratorium on the enrollment of new pro-
viders or suppliers imposed by the Secretary 
under section 1886(j)(6). 
‘‘(ii) EXCEPTION.—A State shall not be 
required to comply with a temporary mora-
torium described in clause (i) if the State 
determines that the imposition of such tem-
porary moratorium would adversely impact 
beneficiaries’ access to medical assistance. 
‘‘(B) MORATORIUM
ON
ENROLLMENT
OF 
PROVIDERS AND SUPPLIERS.—At the option of 
the State, the State imposes, for purposes of en-
tering into participation agreements with pro-
viders or suppliers under the State plan or 
under a waiver of the plan, periods of enrollment 
moratoria, or numerical caps or other limits, for 
providers or suppliers identified by the Secretary 
as being at high-risk for fraud, waste, or abuse 
as necessary to combat fraud, waste, or abuse, 
but only if the State determines that the imposi-
tion of any such period, cap, or other limits 
would not adversely impact beneficiaries’ access 
to medical assistance. 
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‘‘(5) COMPLIANCE
PROGRAMS.—The State re-
quires providers and suppliers under the State plan 
or under a waiver of the plan to establish, in accord-
ance with the requirements of section 1866(j)(7), a 
compliance program that contains the core elements 
established under subparagraph (B) of that section 
1866(j)(7) for providers or suppliers within a par-
ticular industry or category. 
‘‘(6) REPORTING
OF
ADVERSE
PROVIDER
AC-
TIONS.—The State complies with the national system 
for reporting criminal and civil convictions, sanc-
tions, negative licensure actions, and other adverse 
provider actions to the Secretary, through the Admin-
istrator of the Centers for Medicare & Medicaid Serv-
ices, in accordance with regulations of the Secretary. 
‘‘(7) ENROLLMENT AND NPI OF ORDERING OR 
REFERRING PROVIDERS.—The State requires— 
‘‘(A) all ordering or referring physicians or 
other professionals to be enrolled under the State 
plan or under a waiver of the plan as a partici-
pating provider; and 
‘‘(B) the national provider identifier of any 
ordering or referring physician or other profes-
sional to be specified on any claim for payment 
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that is based on an order or referral of the physi-
cian or other professional. 
‘‘(8) OTHER
STATE
OVERSIGHT.—Nothing in 
this subsection shall be interpreted to preclude or 
limit the ability of a State to engage in provider and 
supplier screening or enhanced provider and supplier 
oversight activities beyond those required by the Sec-
retary.’’. 
(2) DISCLOSURE
OF
MEDICARE
TERMINATED 
PROVIDERS AND SUPPLIERS TO STATES.—The Admin-
istrator of the Centers for Medicare & Medicaid Serv-
ices shall establish a process for making available to 
the each State agency with responsibility for admin-
istering a State Medicaid plan (or a waiver of such 
plan) under title XIX of the Social Security Act or 
a child health plan under title XXI the name, na-
tional provider identifier, and other identifying infor-
mation for any provider of medical or other items or 
services or supplier under the Medicare program 
under title XVIII or under the CHIP program under 
title XXI that is terminated from participation under 
that program within 30 days of the termination (and, 
with respect to all such providers or suppliers who are 
terminated from the Medicare program on the date of 
enactment of this Act, within 90 days of such date). 
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(3) 
CONFORMING
AMENDMENT.—Section 
1902(a)(23) of the Social Security Act (42 U.S.C. 
1396a), is amended by inserting before the semicolon 
at the end the following: ‘‘or by a provider or supplier 
to which a moratorium under subsection (ii)(4) is ap-
plied during the period of such moratorium’’. 
(c) CHIP.—Section 2107(e)(1) of the Social Security 
Act (42 U.S.C. 1397gg(e)(1)), as amended by section 
2101(d), is amended— 
(1) by redesignating subparagraphs (D) through 
(M) as subparagraphs (E) through (N), respectively; 
and 
(2) by inserting after subparagraph (C), the fol-
lowing: 
‘‘(D) Subsections (a)(77) and (ii) of section 
1902 (relating to provider and supplier screen-
ing, oversight, and reporting requirements).’’. 
SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM 
INTEGRITY PROVISIONS. 
(a) IN GENERAL.—Part A of title XI of the Social Se-
curity Act (42 U.S.C. 1301 et seq.), as amended by sections 
6002, 6004, and 6102, is amended by inserting after section 
1128I the following new section: 
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‘‘SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEG-
RITY PROVISIONS. 
‘‘(a) DATA MATCHING.— 
‘‘(1) INTEGRATED DATA REPOSITORY.— 
‘‘(A) INCLUSION OF CERTAIN DATA.— 
‘‘(i) IN
GENERAL.—The Integrated 
Data Repository of the Centers for Medicare 
& Medicaid Services shall include, at a 
minimum, claims and payment data from 
the following: 
‘‘(I) The programs under titles 
XVIII and XIX (including parts A, B, 
C, and D of title XVIII). 
‘‘(II) The program under title 
XXI. 
‘‘(III) 
Health-related 
programs 
administered by the Secretary of Vet-
erans Affairs. 
‘‘(IV) Health-related programs ad-
ministered by the Secretary of Defense. 
‘‘(V) The program of old-age, sur-
vivors, and disability insurance bene-
fits established under title II. 
‘‘(VI) The Indian Health Service 
and the Contract Health Service pro-
gram. 
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‘‘(ii) PRIORITY
FOR
INCLUSION
OF 
CERTAIN DATA.—Inclusion of the data de-
scribed in subclause (I) of such clause in the 
Integrated Data Repository shall be a pri-
ority. Data described in subclauses (II) 
through (VI) of such clause shall be included 
in the Integrated Data Repository as appro-
priate. 
‘‘(B) DATA SHARING AND MATCHING.— 
‘‘(i) IN GENERAL.—The Secretary shall 
enter into agreements with the individuals 
described in clause (ii) under which such 
individuals share and match data in the 
system of records of the respective agencies 
of such individuals with data in the system 
of records of the Department of Health and 
Human Services for the purpose of identi-
fying potential fraud, waste, and abuse 
under the programs under titles XVIII and 
XIX. 
‘‘(ii) INDIVIDUALS
DESCRIBED.—The 
following individuals are described in this 
clause: 
‘‘(I) The Commissioner of Social 
Security. 
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‘‘(II) The Secretary of Veterans 
Affairs. 
‘‘(III) The Secretary of Defense. 
‘‘(IV) The Director of the Indian 
Health Service. 
‘‘(iii) DEFINITION
OF
SYSTEM
OF 
RECORDS.—For purposes of this paragraph, 
the term ‘system of records’ has the meaning 
given such term in section 552a(a)(5) of 
title 5, United States Code. 
‘‘(2) ACCESS TO CLAIMS AND PAYMENT DATA-
BASES.—For purposes of conducting law enforcement 
and oversight activities and to the extent consistent 
with applicable information, privacy, security, and 
disclosure laws, including the regulations promul-
gated under the Health Insurance Portability and Ac-
countability Act of 1996 and section 552a of title 5, 
United States Code, and subject to any information 
systems security requirements under such laws or oth-
erwise required by the Secretary, the Inspector Gen-
eral of the Department of Health and Human Serv-
ices and the Attorney General shall have access to 
claims and payment data of the Department of 
Health and Human Services and its contractors re-
lated to titles XVIII, XIX, and XXI. 
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‘‘(b) OIG AUTHORITY TO OBTAIN INFORMATION.— 
‘‘(1) IN GENERAL.—Notwithstanding and in ad-
dition to any other provision of law, the Inspector 
General of the Department of Health and Human 
Services may, for purposes of protecting the integrity 
of the programs under titles XVIII and XIX, obtain 
information from any individual (including a bene-
ficiary provided all applicable privacy protections are 
followed) or entity that— 
‘‘(A) is a provider of medical or other items 
or services, supplier, grant recipient, contractor, 
or subcontractor; or 
‘‘(B) directly or indirectly provides, orders, 
manufactures, distributes, arranges for, pre-
scribes, supplies, or receives medical or other 
items or services payable by any Federal health 
care program (as defined in section 1128B(f)) re-
gardless of how the item or service is paid for, 
or to whom such payment is made. 
‘‘(2) INCLUSION OF CERTAIN INFORMATION.—In-
formation which the Inspector General may obtain 
under paragraph (1) includes any supporting docu-
mentation necessary to validate claims for payment 
or payments under title XVIII or XIX, including a 
prescribing physician’s medical records for an indi-
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vidual who is prescribed an item or service which is 
covered under part B of title XVIII, a covered part 
D drug (as defined in section 1860D–2(e)) for which 
payment is made under an MA–PD plan under part 
C of such title, or a prescription drug plan under 
part D of such title, and any records necessary for 
evaluation of the economy, efficiency, and effectiveness 
of the programs under titles XVIII and XIX. 
‘‘(c) ADMINISTRATIVE REMEDY FOR KNOWING PAR-
TICIPATION BY BENEFICIARY IN HEALTH CARE FRAUD 
SCHEME.— 
‘‘(1) IN GENERAL.—In addition to any other ap-
plicable remedies, if an applicable individual has 
knowingly participated in a Federal health care 
fraud offense or a conspiracy to commit a Federal 
health care fraud offense, the Secretary shall impose 
an appropriate administrative penalty commensurate 
with the offense or conspiracy. 
‘‘(2) APPLICABLE INDIVIDUAL.—For purposes of 
paragraph (1), the term ‘applicable individual’ means 
an individual— 
‘‘(A) entitled to, or enrolled for, benefits 
under part A of title XVIII or enrolled under 
part B of such title; 
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‘‘(B) eligible for medical assistance under a 
State plan under title XIX or under a waiver of 
such plan; or 
‘‘(C) eligible for child health assistance 
under a child health plan under title XXI. 
‘‘(d) REPORTING
AND
RETURNING
OF
OVERPAY-
MENTS.— 
‘‘(1) IN GENERAL.—If a person has received an 
overpayment, the person shall— 
‘‘(A) report and return the overpayment to 
the Secretary, the State, an intermediary, a car-
rier, or a contractor, as appropriate, at the cor-
rect address; and 
‘‘(B) notify the Secretary, State, inter-
mediary, carrier, or contractor to whom the over-
payment was returned in writing of the reason 
for the overpayment. 
‘‘(2) DEADLINE FOR REPORTING AND RETURNING 
OVERPAYMENTS.—An overpayment must be reported 
and returned under paragraph (1) by the later of— 
‘‘(A) the date which is 60 days after the 
date on which the overpayment was identified; or 
‘‘(B) the date any corresponding cost report 
is due, if applicable. 
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‘‘(3) 
ENFORCEMENT.—Any 
overpayment 
re-
tained by a person after the deadline for reporting 
and returning the overpayment under paragraph (2) 
is an obligation (as defined in section 3729(b)(3) of 
title 31, United States Code) for purposes of section 
3729 of such title. 
‘‘(4) DEFINITIONS.—In this subsection: 
‘‘(A) 
KNOWING
AND
KNOWINGLY.—The 
terms ‘knowing’ and ‘knowingly’ have the mean-
ing given those terms in section 3729(b) of title 
31, United States Code. 
‘‘(B) OVERPAYMENT.—The term ‘‘overpay-
ment’’ means any funds that a person receives or 
retains under title XVIII or XIX to which the 
person, after applicable reconciliation, is not en-
titled under such title. 
‘‘(C) PERSON.— 
‘‘(i) IN GENERAL.—The term ‘person’ 
means a provider of services, supplier, med-
icaid managed care organization (as de-
fined in section 1903(m)(1)(A)), Medicare 
Advantage organization (as defined in sec-
tion 1859(a)(1)), or PDP sponsor (as de-
fined in section 1860D–41(a)(13)). 
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‘‘(ii) EXCLUSION.—Such term does not 
include a beneficiary. 
‘‘(e) INCLUSION OF NATIONAL PROVIDER IDENTIFIER 
ON ALL APPLICATIONS AND CLAIMS.—The Secretary shall 
promulgate a regulation that requires, not later than Janu-
ary 1, 2011, all providers of medical or other items or serv-
ices and suppliers under the programs under titles XVIII 
and XIX that qualify for a national provider identifier to 
include their national provider identifier on all applica-
tions to enroll in such programs and on all claims for pay-
ment submitted under such programs.’’. 
(b) ACCESS TO DATA.— 
(1) MEDICARE PART D.—Section 1860D–15(f)(2) 
of the Social Security Act (42 U.S.C. 1395w– 
116(f)(2)) is amended by striking ‘‘may be used by’’ 
and all that follows through the period at the end and 
inserting ‘‘may be used— 
‘‘(A) by officers, employees, and contractors 
of the Department of Health and Human Serv-
ices for the purposes of, and to the extent nec-
essary in— 
‘‘(i) carrying out this section; and 
‘‘(ii) conducting oversight, evaluation, 
and enforcement under this title; and 
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‘‘(B) by the Attorney General and the 
Comptroller General of the United States for the 
purposes of, and to the extent necessary in, car-
rying out health oversight activities.’’. 
(2) DATA MATCHING.—Section 552a(a)(8)(B) of 
title 5, United States Code, is amended— 
(A) in clause (vii), by striking ‘‘or’’ at the 
end; 
(B) in clause (viii), by inserting ‘‘or’’ after 
the semicolon; and 
(C) by adding at the end the following new 
clause: 
‘‘(ix) matches performed by the Sec-
retary of Health and Human Services or 
the Inspector General of the Department of 
Health and Human Services with respect to 
potential fraud, waste, and abuse, including 
matches of a system of records with non- 
Federal records;’’. 
(3) MATCHING AGREEMENTS WITH THE COMMIS-
SIONER OF SOCIAL SECURITY.—Section 205(r) of the 
Social Security Act (42 U.S.C. 405(r)) is amended by 
adding at the end the following new paragraph: 
‘‘(9)(A) The Commissioner of Social Security 
shall, upon the request of the Secretary or the Inspec-
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tor General of the Department of Health and Human 
Services— 
‘‘(i) enter into an agreement with the Sec-
retary or such Inspector General for the purpose 
of matching data in the system of records of the 
Social Security Administration and the system 
of records of the Department of Health and 
Human Services; and 
‘‘(ii) include in such agreement safeguards 
to assure the maintenance of the confidentiality 
of any information disclosed. 
‘‘(B) For purposes of this paragraph, the term 
‘system of records’ has the meaning given such term 
in section 552a(a)(5) of title 5, United States Code.’’. 
(c) WITHHOLDING OF FEDERAL MATCHING PAYMENTS 
FOR STATES THAT FAIL TO REPORT ENROLLEE ENCOUN-
TER DATA IN THE MEDICAID STATISTICAL INFORMATION 
SYSTEM.—Section 1903(i) of the Social Security Act (42 
U.S.C. 1396b(i)) is amended— 
(1) in paragraph (23), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (24), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following new para-
graph:. 
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‘‘(25) with respect to any amounts expended for 
medical assistance for individuals for whom the State 
does not report enrollee encounter data (as defined by 
the Secretary) to the Medicaid Statistical Information 
System (MSIS) in a timely manner (as determined 
by the Secretary).’’. 
(d) PERMISSIVE EXCLUSIONS AND CIVIL MONETARY 
PENALTIES.— 
(1) PERMISSIVE EXCLUSIONS.—Section 1128(b) 
of the Social Security Act (42 U.S.C. 1320a–7(b)) is 
amended by adding at the end the following new 
paragraph: 
‘‘(16) MAKING
FALSE
STATEMENTS
OR
MIS-
REPRESENTATION OF MATERIAL FACTS.—Any indi-
vidual or entity that knowingly makes or causes to be 
made any false statement, omission, or misrepresenta-
tion of a material fact in any application, agreement, 
bid, or contract to participate or enroll as a provider 
of services or supplier under a Federal health care 
program (as defined in section 1128B(f)), including 
Medicare Advantage organizations under part C of 
title XVIII, prescription drug plan sponsors under 
part D of title XVIII, medicaid managed care organi-
zations under title XIX, and entities that apply to 
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participate as providers of services or suppliers in 
such managed care organizations and such plans.’’. 
(2) CIVIL MONETARY PENALTIES.— 
(A) IN GENERAL.—Section 1128A(a) of the 
Social Security Act (42 U.S.C. 1320a–7a(a)) is 
amended— 
(i) in paragraph (1)(D), by striking 
‘‘was excluded’’ and all that follows through 
the period at the end and inserting ‘‘was ex-
cluded from the Federal health care pro-
gram (as defined in section 1128B(f)) under 
which the claim was made pursuant to Fed-
eral law.’’; 
(ii) in paragraph (6), by striking ‘‘or’’ 
at the end; 
(iii) by inserting after paragraph (7), 
the following new paragraphs: 
‘‘(8) orders or prescribes a medical or other item 
or service during a period in which the person was 
excluded from a Federal health care program (as so 
defined), in the case where the person knows or should 
know that a claim for such medical or other item or 
service will be made under such a program; 
‘‘(9) knowingly makes or causes to be made any 
false statement, omission, or misrepresentation of a 
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material fact in any application, bid, or contract to 
participate or enroll as a provider of services or a 
supplier under a Federal health care program (as so 
defined), including Medicare Advantage organizations 
under part C of title XVIII, prescription drug plan 
sponsors under part D of title XVIII, medicaid man-
aged care organizations under title XIX, and entities 
that apply to participate as providers of services or 
suppliers in such managed care organizations and 
such plans; 
‘‘(10) knows of an overpayment (as defined in 
paragraph (4) of section 1128J(d)) and does not re-
port and return the overpayment in accordance with 
such section;’’; 
(iv) in the first sentence— 
(I) by striking the ‘‘or’’ after 
‘‘prohibited relationship occurs;’’; and 
(II) by striking ‘‘act)’’ and insert-
ing ‘‘act; or in cases under paragraph 
(9), $50,000 for each false statement or 
misrepresentation of a material fact)’’; 
and 
(v) in the second sentence, by striking 
‘‘purpose)’’ and inserting ‘‘purpose; or in 
cases under paragraph (9), an assessment of 
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not more than 3 times the total amount 
claimed for each item or service for which 
payment was made based upon the applica-
tion containing the false statement or mis-
representation of a material fact)’’. 
(B) CLARIFICATION OF TREATMENT OF CER-
TAIN CHARITABLE AND OTHER INNOCUOUS PRO-
GRAMS.—Section 1128A(i)(6) of the Social Secu-
rity Act (42 U.S.C. 1320a–7a(i)(6)) is amend-
ed— 
(i) in subparagraph (C), by striking 
‘‘or’’ at the end; 
(ii) in subparagraph (D), as redesig-
nated by section 4331(e) of the Balanced 
Budget Act of 1997 (Public Law 105–33), 
by striking the period at the end and insert-
ing a semicolon; 
(iii) by redesignating subparagraph 
(D), as added by section 4523(c) of such 
Act, as subparagraph (E) and striking the 
period at the end and inserting ‘‘; or’’; and 
(iv) by adding at the end the following 
new subparagraphs: 
‘‘(F) any other remuneration which pro-
motes access to care and poses a low risk of harm 
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to patients and Federal health care programs (as 
defined in section 1128B(f) and designated by 
the Secretary under regulations); 
‘‘(G) the offer or transfer of items or services 
for free or less than fair market value by a per-
son, if— 
‘‘(i) the items or services consist of cou-
pons, rebates, or other rewards from a re-
tailer; 
‘‘(ii) the items or services are offered or 
transferred on equal terms available to the 
general public, regardless of health insur-
ance status; and 
‘‘(iii) the offer or transfer of the items 
or services is not tied to the provision of 
other items or services reimbursed in whole 
or in part by the program under title XVIII 
or a State health care program (as defined 
in section 1128(h)); 
‘‘(H) the offer or transfer of items or serv-
ices for free or less than fair market value by a 
person, if— 
‘‘(i) the items or services are not of-
fered as part of any advertisement or solici-
tation; 
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‘‘(ii) the items or services are not tied 
to the provision of other services reimbursed 
in whole or in part by the program under 
title XVIII or a State health care program 
(as so defined); 
‘‘(iii) there is a reasonable connection 
between the items or services and the med-
ical care of the individual; and 
‘‘(iv) the person provides the items or 
services after determining in good faith that 
the individual is in financial need; or 
‘‘(I) effective on a date specified by the Sec-
retary (but not earlier than January 1, 2011), 
the waiver by a PDP sponsor of a prescription 
drug plan under part D of title XVIII or an MA 
organization offering an MA–PD plan under 
part C of such title of any copayment for the 
first fill of a covered part D drug (as defined in 
section 1860D–2(e)) that is a generic drug for 
individuals enrolled in the prescription drug 
plan or MA–PD plan, respectively.’’. 
(e) TESTIMONIAL SUBPOENA AUTHORITY IN EXCLU-
SION-ONLY CASES.—Section 1128(f) of the Social Security 
Act (42 U.S.C. 1320a–7(f)) is amended by adding at the 
end the following new paragraph: 
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‘‘(4) The provisions of subsections (d) and (e) of 
section 205 shall apply with respect to this section to 
the same extent as they are applicable with respect to 
title II. The Secretary may delegate the authority 
granted by section 205(d) (as made applicable to this 
section) to the Inspector General of the Department of 
Health and Human Services for purposes of any in-
vestigation under this section.’’. 
(f) HEALTH CARE FRAUD.— 
(1) KICKBACKS.—Section 1128B of the Social 
Security Act (42 U.S.C. 1320a–7b) is amended by 
adding at the end the following new subsection: 
‘‘(g) In addition to the penalties provided for in this 
section or section 1128A, a claim that includes items or 
services resulting from a violation of this section constitutes 
a false or fraudulent claim for purposes of subchapter III 
of chapter 37 of title 31, United States Code.’’. 
(2) REVISING THE INTENT REQUIREMENT.—Sec-
tion 1128B of the Social Security Act (42 U.S.C. 
1320a–7b), as amended by paragraph (1), is amended 
by adding at the end the following new subsection: 
‘‘(h) With respect to violations of this section, a person 
need not have actual knowledge of this section or specific 
intent to commit a violation of this section.’’. 
(g) SURETY BOND REQUIREMENTS.— 
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(1) DURABLE
MEDICAL
EQUIPMENT.—Section 
1834(a)(16)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(16)(B)) is amended by inserting ‘‘that the 
Secretary determines is commensurate with the vol-
ume of the billing of the supplier’’ before the period 
at the end. 
(2) 
HOME
HEALTH
AGENCIES.—Section 
1861(o)(7)(C) of the Social Security Act (42 U.S.C. 
1395x(o)(7)(C)) is amended by inserting ‘‘that the 
Secretary determines is commensurate with the vol-
ume of the billing of the home health agency’’ before 
the semicolon at the end. 
(3) REQUIREMENTS FOR CERTAIN OTHER PRO-
VIDERS OF SERVICES AND SUPPLIERS.—Section 1862 
of the Social Security Act (42 U.S.C. 1395y) is 
amended by adding at the end the following new sub-
section: 
‘‘(n) REQUIREMENT OF A SURETY BOND FOR CERTAIN 
PROVIDERS OF SERVICES AND SUPPLIERS.— 
‘‘(1) IN GENERAL.—The Secretary may require a 
provider of services or supplier described in para-
graph (2) to provide the Secretary on a continuing 
basis with a surety bond in a form specified by the 
Secretary in an amount (not less than $50,000) that 
the Secretary determines is commensurate with the 
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volume of the billing of the provider of services or 
supplier. The Secretary may waive the requirement of 
a bond under the preceding sentence in the case of a 
provider of services or supplier that provides a com-
parable surety bond under State law. 
‘‘(2) PROVIDER OF SERVICES OR SUPPLIER DE-
SCRIBED.—A provider of services or supplier de-
scribed in this paragraph is a provider of services or 
supplier the Secretary determines appropriate based 
on the level of risk involved with respect to the pro-
vider of services or supplier, and consistent with the 
surety 
bond 
requirements 
under 
sections 
1834(a)(16)(B) and 1861(o)(7)(C).’’. 
(h) SUSPENSION OF MEDICARE AND MEDICAID PAY-
MENTS PENDING INVESTIGATION OF CREDIBLE ALLEGA-
TIONS OF FRAUD.— 
(1) MEDICARE.—Section 1862 of the Social Se-
curity Act (42 U.S.C. 1395y), as amended by sub-
section (g)(3), is amended by adding at the end the 
following new subsection: 
‘‘(o) SUSPENSION OF PAYMENTS PENDING INVESTIGA-
TION OF CREDIBLE ALLEGATIONS OF FRAUD.— 
‘‘(1) IN GENERAL.—The Secretary may suspend 
payments to a provider of services or supplier under 
this title pending an investigation of a credible alle-
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gation of fraud against the provider of services or 
supplier, unless the Secretary determines there is good 
cause not to suspend such payments. 
‘‘(2) CONSULTATION.—The Secretary shall con-
sult with the Inspector General of the Department of 
Health and Human Services in determining whether 
there is a credible allegation of fraud against a pro-
vider of services or supplier. 
‘‘(3) PROMULGATION
OF
REGULATIONS.—The 
Secretary shall promulgate regulations to carry out 
this subsection and section 1903(i)(2)(C).’’. 
(2) MEDICAID.—Section 1903(i)(2) of such Act 
(42 U.S.C. 1396b(i)(2)) is amended— 
(A) in subparagraph (A), by striking ‘‘or’’ 
at the end; and 
(B) by inserting after subparagraph (B), 
the following: 
‘‘(C) by any individual or entity to whom 
the State has failed to suspend payments under 
the plan during any period when there is pend-
ing an investigation of a credible allegation of 
fraud against the individual or entity, as deter-
mined by the State in accordance with regula-
tions promulgated by the Secretary for purposes 
of section 1862(o) and this subparagraph, unless 
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the State determines in accordance with such 
regulations there is good cause not to suspend 
such payments; or’’. 
(i) INCREASED FUNDING TO FIGHT FRAUD
AND 
ABUSE.— 
(1) IN GENERAL.—Section 1817(k) of the Social 
Security Act (42 U.S.C. 1395i(k)) is amended— 
(A) by adding at the end the following new 
paragraph: 
‘‘(7) ADDITIONAL FUNDING.—In addition to the 
funds otherwise appropriated to the Account from the 
Trust Fund under paragraphs (3) and (4) and for 
purposes described in paragraphs (3)(C) and (4)(A), 
there 
are 
hereby 
appropriated 
an 
additional 
$10,000,000 to such Account from such Trust Fund 
for each of fiscal years 2011 through 2020. The funds 
appropriated under this paragraph shall be allocated 
in the same proportion as the total funding appro-
priated with respect to paragraphs (3)(A) and (4)(A) 
was allocated with respect to fiscal year 2010, and 
shall be available without further appropriation until 
expended.’’; and 
(B) in paragraph (4)(A), by inserting 
‘‘until expended’’ after ‘‘appropriation’’. 
(2) INDEXING OF AMOUNTS APPROPRIATED.— 
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(A) DEPARTMENTS OF HEALTH AND HUMAN 
SERVICES
AND
JUSTICE.—Section 
1817(k)(3)(A)(i) of the Social Security Act (42 
U.S.C. 1395i(k)(3)(A)(i)) is amended— 
(i) in subclause (III), by inserting 
‘‘and’’ at the end; 
(ii) in subclause (IV)— 
(I) by striking ‘‘for each of fiscal 
years 2007, 2008, 2009, and 2010’’ 
and inserting ‘‘for each fiscal year 
after fiscal year 2006’’; and 
(II) by striking ‘‘; and’’ and in-
serting a period; and 
(iii) by striking subclause (V). 
(B) OFFICE OF THE INSPECTOR GENERAL 
OF THE DEPARTMENT OF HEALTH AND HUMAN 
SERVICES.—Section 1817(k)(3)(A)(ii) of such 
Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amended— 
(i) in subclause (VIII), by inserting 
‘‘and’’ at the end; 
(ii) in subclause (IX)— 
(I) by striking ‘‘for each of fiscal 
years 2008, 2009, and 2010’’ and in-
serting ‘‘for each fiscal year after fiscal 
year 2007’’; and 
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(II) by striking ‘‘; and’’ and in-
serting a period; and 
(iii) by striking subclause (X). 
(C) FEDERAL
BUREAU
OF
INVESTIGA-
TION.—Section 1817(k)(3)(B) of the Social Secu-
rity Act (42 U.S.C. 1395i(k)(3)(B)) is amend-
ed— 
(i) in clause (vii), by inserting ‘‘and’’ 
at the end; 
(ii) in clause (viii)— 
(I) by striking ‘‘for each of fiscal 
years 2007, 2008, 2009, and 2010’’ 
and inserting ‘‘for each fiscal year 
after fiscal year 2006’’; and 
(II) by striking ‘‘; and’’ and in-
serting a period; and 
(iii) by striking clause (ix). 
(D) MEDICARE INTEGRITY PROGRAM.—Sec-
tion 1817(k)(4)(C) of the Social Security Act (42 
U.S.C. 1395i(k)(4)(C)) is amended by adding at 
the end the following new clause: 
‘‘(ii) For each fiscal year after 2010, 
by the percentage increase in the consumer 
price index for all urban consumers (all 
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items; United States city average) over the 
previous year.’’. 
(j) MEDICARE INTEGRITY PROGRAM AND MEDICAID 
INTEGRITY PROGRAM.— 
(1) MEDICARE INTEGRITY PROGRAM.— 
(A) REQUIREMENT TO PROVIDE PERFORM-
ANCE STATISTICS.—Section 1893(c) of the Social 
Security Act (42 U.S.C. 1395ddd(c)) is amend-
ed— 
(i) in paragraph (3), by striking 
‘‘and’’ at the end; 
(ii) by redesignating paragraph (4) as 
paragraph (5); and 
(iii) by inserting after paragraph (3) 
the following new paragraph: 
‘‘(4) the entity agrees to provide the Secretary 
and the Inspector General of the Department of 
Health and Human Services with such performance 
statistics (including the number and amount of over-
payments recovered, the number of fraud referrals, 
and the return on investment of such activities by the 
entity) as the Secretary or the Inspector General may 
request; and’’. 
(B) EVALUATIONS AND ANNUAL REPORT.— 
Section 1893 of the Social Security Act (42 
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U.S.C. 1395ddd) is amended by adding at the 
end the following new subsection: 
‘‘(i) EVALUATIONS AND ANNUAL REPORT.— 
‘‘(1) EVALUATIONS.—The Secretary shall con-
duct evaluations of eligible entities which the Sec-
retary contracts with under the Program not less fre-
quently than every 3 years. 
‘‘(2) ANNUAL REPORT.—Not later than 180 days 
after the end of each fiscal year (beginning with fiscal 
year 2011), the Secretary shall submit a report to 
Congress which identifies— 
‘‘(A) the use of funds, including funds 
transferred from the Federal Hospital Insurance 
Trust Fund under section 1817 and the Federal 
Supplementary Insurance Trust Fund under sec-
tion 1841, to carry out this section; and 
‘‘(B) the effectiveness of the use of such 
funds.’’. 
(C) FLEXIBILITY IN PURSUING FRAUD AND 
ABUSE.—Section 1893(a) of the Social Security 
Act (42 U.S.C. 1395ddd(a)) is amended by in-
serting ‘‘, or otherwise,’’ after ‘‘entities’’. 
(2) MEDICAID INTEGRITY PROGRAM.— 
(A) REQUIREMENT TO PROVIDE PERFORM-
ANCE STATISTICS.—Section 1936(c)(2) of the So-
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cial Security Act (42 U.S.C. 1396u–6(c)(2)) is 
amended— 
(i) by redesignating subparagraph (D) 
as subparagraph (E); and 
(ii) by inserting after subparagraph 
(C) the following new subparagraph: 
‘‘(D) The entity agrees to provide the Sec-
retary and the Inspector General of the Depart-
ment of Health and Human Services with such 
performance statistics (including the number 
and amount of overpayments recovered, the num-
ber of fraud referrals, and the return on invest-
ment of such activities by the entity) as the Sec-
retary or the Inspector General may request.’’. 
(B) EVALUATIONS AND ANNUAL REPORT.— 
Section 1936(e) of the Social Security Act (42 
U.S.C. 1396u–7(e)) is amended— 
(i) by redesignating paragraph (4) as 
paragraph (5); and 
(ii) by inserting after paragraph (3) 
the following new paragraph: 
‘‘(4) EVALUATIONS.—The Secretary shall con-
duct evaluations of eligible entities which the Sec-
retary contracts with under the Program not less fre-
quently than every 3 years.’’. 
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(k) EXPANDED APPLICATION OF HARDSHIP WAIVERS 
FOR EXCLUSIONS.—Section 1128(c)(3)(B) of the Social Se-
curity Act (42 U.S.C. 1320a–7(c)(3)(B)) is amended by 
striking ‘‘individuals entitled to benefits under part A of 
title XVIII or enrolled under part B of such title, or both’’ 
and inserting ‘‘beneficiaries (as defined in section 
1128A(i)(5)) of that program’’. 
SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE 
HEALTHCARE INTEGRITY AND PROTECTION 
DATA BANK AND THE NATIONAL PRACTI-
TIONER DATA BANK. 
(a) INFORMATION REPORTED BY FEDERAL AGENCIES 
AND HEALTH PLANS.—Section 1128E of the Social Secu-
rity Act (42 U.S.C. 1320a–7e) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) IN GENERAL.—The Secretary shall maintain a 
national health care fraud and abuse data collection pro-
gram under this section for the reporting of certain final 
adverse actions (not including settlements in which no find-
ings of liability have been made) against health care pro-
viders, suppliers, or practitioners as required by subsection 
(b), with access as set forth in subsection (d), and shall fur-
nish the information collected under this section to the Na-
tional Practitioner Data Bank established pursuant to the 
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Health Care Quality Improvement Act of 1986 (42 U.S.C. 
11101 et seq.).’’; 
(2) by striking subsection (d) and inserting the 
following: 
‘‘(d) ACCESS TO REPORTED INFORMATION.— 
‘‘(1) AVAILABILITY.—The information collected 
under this section shall be available from the National 
Practitioner Data Bank to the agencies, authorities, 
and officials which are provided under section 
1921(b) information reported under section 1921(a). 
‘‘(2) FEES
FOR
DISCLOSURE.—The Secretary 
may establish or approve reasonable fees for the dis-
closure of information under this section. The amount 
of such a fee may not exceed the costs of processing 
the requests for disclosure and of providing such in-
formation. Such fees shall be available to the Sec-
retary to cover such costs.’’; 
(3) by striking subsection (f) and inserting the 
following: 
‘‘(f) APPROPRIATE COORDINATION.—In implementing 
this section, the Secretary shall provide for the maximum 
appropriate coordination with part B of the Health Care 
Quality Improvement Act of 1986 (42 U.S.C. 11131 et seq.) 
and section 1921.’’; and 
(4) in subsection (g)— 
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(A) in paragraph (1)(A)— 
(i) in clause (iii)— 
(I) by striking ‘‘or State’’ each 
place it appears; 
(II) by redesignating subclauses 
(II) and (III) as subclauses (III) and 
(IV), respectively; and 
(III) by inserting after subclause 
(I) the following new subclause: 
‘‘(II) any dismissal or closure of 
the proceedings by reason of the pro-
vider, supplier, or practitioner surren-
dering their license or leaving the State 
or jurisdiction’’; and 
(ii) by striking clause (iv) and insert-
ing the following: 
‘‘(iv) Exclusion from participation in 
a Federal health care program (as defined 
in section 1128B(f)).’’; 
(B) in paragraph (3)— 
(i) by striking subparagraphs (D) and 
(E); and 
(ii) by redesignating subparagraph (F) 
as subparagraph (D); and 
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(C) in subparagraph (D) (as so redesig-
nated), by striking ‘‘or State’’. 
(b) INFORMATION REPORTED
BY STATE LAW
OR 
FRAUD ENFORCEMENT AGENCIES.—Section 1921 of the So-
cial Security Act (42 U.S.C. 1396r–2) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by striking ‘‘SYSTEM.—The State’’ 
and all that follows through the semicolon 
and inserting SYSTEM.— 
‘‘(A) LICENSING
OR
CERTIFICATION
AC-
TIONS.—The State must have in effect a system 
of reporting the following information with re-
spect to formal proceedings (as defined by the 
Secretary in regulations) concluded against a 
health care practitioner or entity by a State li-
censing or certification agency:’’; 
(ii) by redesignating subparagraphs 
(A) through (D) as clauses (i) through (iv), 
respectively, and indenting appropriately; 
(iii) in subparagraph (A)(iii) (as so 
redesignated)— 
(I) by striking ‘‘the license of’’ 
and inserting ‘‘license or the right to 
apply for, or renew, a license by’’; and 
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(II) 
by 
inserting 
‘‘nonrenew-
ability,’’ after ‘‘voluntary surrender,’’; 
and 
(iv) by adding at the end the following 
new subparagraph: 
‘‘(B) OTHER
FINAL
ADVERSE
ACTIONS.— 
The State must have in effect a system of report-
ing information with respect to any final ad-
verse action (not including settlements in which 
no findings of liability have been made) taken 
against a health care provider, supplier, or prac-
titioner by a State law or fraud enforcement 
agency.’’; and 
(B) in paragraph (2), by striking ‘‘the au-
thority described in paragraph (1)’’ and insert-
ing ‘‘a State licensing or certification agency or 
State law or fraud enforcement agency’’; 
(2) in subsection (b)— 
(A) by striking paragraph (2) and inserting 
the following: 
‘‘(2) to State licensing or certification agencies 
and Federal agencies responsible for the licensing and 
certification of health care providers, suppliers, and 
licensed health care practitioners;’’; 
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(B) in each of paragraphs (4) and (6), by 
inserting ‘‘, but only with respect to information 
provided pursuant to subsection (a)(1)(A)’’ before 
the comma at the end; 
(C) by striking paragraph (5) and inserting 
the following: 
‘‘(5) to State law or fraud enforcement agen-
cies,’’; 
(D) by redesignating paragraphs (7) and 
(8) as paragraphs (8) and (9), respectively; and 
(E) by inserting after paragraph (6) the fol-
lowing new paragraph: 
‘‘(7) to health plans (as defined in section 
1128C(c));’’; 
(3) by redesignating subsection (d) as subsection 
(h), and by inserting after subsection (c) the following 
new subsections: 
‘‘(d) DISCLOSURE
AND CORRECTION
OF INFORMA-
TION.— 
‘‘(1) DISCLOSURE.—With respect to information 
reported pursuant to subsection (a)(1), the Secretary 
shall— 
‘‘(A) provide for disclosure of the informa-
tion, upon request, to the health care practitioner 
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who, or the entity that, is the subject of the infor-
mation reported; and 
‘‘(B) establish procedures for the case where 
the health care practitioner or entity disputes the 
accuracy of the information reported. 
‘‘(2) CORRECTIONS.—Each State licensing or 
certification agency and State law or fraud enforce-
ment agency shall report corrections of information 
already reported about any formal proceeding or final 
adverse action described in subsection (a), in such 
form and manner as the Secretary prescribes by regu-
lation. 
‘‘(e) FEES FOR DISCLOSURE.—The Secretary may es-
tablish or approve reasonable fees for the disclosure of infor-
mation under this section. The amount of such a fee may 
not exceed the costs of processing the requests for disclosure 
and of providing such information. Such fees shall be avail-
able to the Secretary to cover such costs. 
‘‘(f) PROTECTION FROM LIABILITY FOR REPORTING.— 
No person or entity, including any agency designated by 
the Secretary in subsection (b), shall be held liable in any 
civil action with respect to any reporting of information 
as required under this section, without knowledge of the fal-
sity of the information contained in the report. 
‘‘(g) REFERENCES.—For purposes of this section: 
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‘‘(1) STATE LICENSING OR CERTIFICATION AGEN-
CY.—The term ‘State licensing or certification agen-
cy’ includes any authority of a State (or of a political 
subdivision thereof) responsible for the licensing of 
health care practitioners (or any peer review organi-
zation or private accreditation entity reviewing the 
services provided by health care practitioners) or enti-
ties. 
‘‘(2) STATE
LAW
OR
FRAUD
ENFORCEMENT 
AGENCY.—The term ‘State law or fraud enforcement 
agency’ includes— 
‘‘(A) a State law enforcement agency; and 
‘‘(B) a State medicaid fraud control unit 
(as defined in section 1903(q)). 
‘‘(3) FINAL ADVERSE ACTION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘final adverse action’ in-
cludes— 
‘‘(i) civil judgments against a health 
care provider, supplier, or practitioner in 
State court related to the delivery of a 
health care item or service; 
‘‘(ii) State criminal convictions related 
to the delivery of a health care item or serv-
ice; 
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‘‘(iii) exclusion from participation in 
State health care programs (as defined in 
section 1128(h)); 
‘‘(iv) any licensing or certification ac-
tion described in subsection (a)(1)(A) taken 
against a supplier by a State licensing or 
certification agency; and 
‘‘(v) any other adjudicated actions or 
decisions that the Secretary shall establish 
by regulation. 
‘‘(B) EXCEPTION.—Such term does not in-
clude any action with respect to a malpractice 
claim.’’; and 
(4) in subsection (h), as so redesignated, by 
striking ‘‘The Secretary’’ and all that follows through 
the period at the end and inserting ‘‘In implementing 
this section, the Secretary shall provide for the max-
imum appropriate coordination with part B of the 
Health Care Quality Improvement Act of 1986 (42 
U.S.C. 11131 et seq.) and section 1128E.’’. 
(c) CONFORMING AMENDMENT.—Section 1128C(a)(1) 
of the Social Security Act (42 U.S.C. 1320a–7c(a)(1)) is 
amended— 
(1) in subparagraph (C), by adding ‘‘and’’ after 
the comma at the end; 
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(2) in subparagraph (D), by striking ‘‘, and’’ 
and inserting a period; and 
(3) by striking subparagraph (E). 
(d) TRANSITION PROCESS; EFFECTIVE DATE.— 
(1) IN GENERAL.—Effective on the date of enact-
ment of this Act, the Secretary of Health and Human 
Services (in this section referred to as the ‘‘Sec-
retary’’) shall implement a transition process under 
which, by not later than the end of the transition pe-
riod described in paragraph (5), the Secretary shall 
cease operating the Healthcare Integrity and Protec-
tion Data Bank established under section 1128E of 
the Social Security Act (as in effect before the effective 
date specified in paragraph (6)) and shall transfer all 
data collected in the Healthcare Integrity and Protec-
tion Data Bank to the National Practitioner Data 
Bank established pursuant to the Health Care Quality 
Improvement Act of 1986 (42 U.S.C. 11101 et seq.). 
During such transition process, the Secretary shall 
have in effect appropriate procedures to ensure that 
data collection and access to the Healthcare Integrity 
and Protection Data Bank and the National Practi-
tioner Data Bank are not disrupted. 
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(2) REGULATIONS.—The Secretary shall promul-
gate regulations to carry out the amendments made 
by subsections (a) and (b). 
(3) FUNDING.— 
(A) AVAILABILITY OF FEES.—Fees collected 
pursuant to section 1128E(d)(2) of the Social 
Security Act prior to the effective date specified 
in paragraph (6) for the disclosure of informa-
tion in the Healthcare Integrity and Protection 
Data Bank shall be available to the Secretary, 
without fiscal year limitation, for payment of 
costs related to the transition process described 
in paragraph (1). Any such fees remaining after 
the transition period is complete shall be avail-
able to the Secretary, without fiscal year limita-
tion, for payment of the costs of operating the 
National Practitioner Data Bank. 
(B) AVAILABILITY OF ADDITIONAL FUNDS.— 
In addition to the fees described in subparagraph 
(A), any funds available to the Secretary or to 
the Inspector General of the Department of 
Health and Human Services for a purpose re-
lated to combating health care fraud, waste, or 
abuse shall be available to the extent necessary 
for operating the Healthcare Integrity and Pro-
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tection Data Bank during the transition period, 
including systems testing and other activities 
necessary to ensure that information formerly re-
ported to the Healthcare Integrity and Protec-
tion Data Bank will be accessible through the 
National Practitioner Data Bank after the end 
of such transition period. 
(4) SPECIAL PROVISION FOR ACCESS TO THE NA-
TIONAL PRACTITIONER DATA BANK BY THE DEPART-
MENT OF VETERANS AFFAIRS.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of law, during the 1-year period 
that begins on the effective date specified in 
paragraph (6), the information described in sub-
paragraph (B) shall be available from the Na-
tional Practitioner Data Bank to the Secretary 
of Veterans Affairs without charge. 
(B) INFORMATION
DESCRIBED.—For pur-
poses of subparagraph (A), the information de-
scribed in this subparagraph is the information 
that would, but for the amendments made by this 
section, have been available to the Secretary of 
Veterans Affairs from the Healthcare Integrity 
and Protection Data Bank. 
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(5) TRANSITION
PERIOD
DEFINED.—For pur-
poses of this subsection, the term ‘‘transition period’’ 
means the period that begins on the date of enactment 
of this Act and ends on the later of— 
(A) the date that is 1 year after such date 
of enactment; or 
(B) the effective date of the regulations pro-
mulgated under paragraph (2). 
(6) EFFECTIVE DATE.—The amendments made 
by subsections (a), (b), and (c) shall take effect on the 
first day after the final day of the transition period. 
SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDI-
CARE CLAIMS REDUCED TO NOT MORE THAN 
12 MONTHS. 
(a) REDUCING MAXIMUM PERIOD FOR SUBMISSION.— 
(1) PART A.—Section 1814(a) of the Social Secu-
rity Act (42 U.S.C. 1395f(a)(1)) is amended— 
(A) in paragraph (1), by striking ‘‘period of 
3 calendar years’’ and all that follows through 
the semicolon and inserting ‘‘period ending 1 
calendar year after the date of service;’’; and 
(B) by adding at the end the following new 
sentence: ‘‘In applying paragraph (1), the Sec-
retary may specify exceptions to the 1 calendar 
year period specified in such paragraph.’’ 
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(2) PART B.— 
(A) Section 1842(b)(3) of such Act (42 
U.S.C. 1395u(b)(3)(B)) is amended— 
(i) in subparagraph (B), in the flush 
language following clause (ii), by striking 
‘‘close of the calendar year following the 
year in which such service is furnished 
(deeming any service furnished in the last 3 
months of any calendar year to have been 
furnished in the succeeding calendar year)’’ 
and inserting ‘‘period ending 1 calendar 
year after the date of service’’; and 
(ii) by adding at the end the following 
new sentence: ‘‘In applying subparagraph 
(B), the Secretary may specify exceptions to 
the 1 calendar year period specified in such 
subparagraph.’’ 
(B) Section 1835(a) of such Act (42 U.S.C. 
1395n(a)) is amended— 
(i) in paragraph (1), by striking ‘‘pe-
riod of 3 calendar years’’ and all that fol-
lows through the semicolon and inserting 
‘‘period ending 1 calendar year after the 
date of service;’’; and 
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(ii) by adding at the end the following 
new sentence: ‘‘In applying paragraph (1), 
the Secretary may specify exceptions to the 
1 calendar year period specified in such 
paragraph.’’ 
(b) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
subsection (a) shall apply to services furnished on or 
after January 1, 2010. 
(2) SERVICES FURNISHED BEFORE 2010.—In the 
case of services furnished before January 1, 2010, a 
bill or request for payment under section 1814(a)(1), 
1842(b)(3)(B), or 1835(a) shall be filed not later that 
December 31, 2010. 
SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES 
REQUIRED TO BE MEDICARE ENROLLED PHY-
SICIANS OR ELIGIBLE PROFESSIONALS. 
(a) DME.—Section 1834(a)(11)(B) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by strik-
ing ‘‘physician’’ and inserting ‘‘physician enrolled under 
section 1866(j) or an eligible professional under section 
1848(k)(3)(B) that is enrolled under section 1866(j)’’. 
(b) HOME HEALTH SERVICES.— 
(1) PART A.—Section 1814(a)(2) of such Act (42 
U.S.C. 1395(a)(2)) is amended in the matter pre-
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ceding subparagraph (A) by inserting ‘‘in the case of 
services described in subparagraph (C), a physician 
enrolled under section 1866(j) or an eligible profes-
sional under section 1848(k)(3)(B),’’ before ‘‘or, in the 
case of services’’. 
(2) PART B.—Section 1835(a)(2) of such Act (42 
U.S.C. 1395n(a)(2)) is amended in the matter pre-
ceding subparagraph (A) by inserting ‘‘, or in the 
case of services described in subparagraph (A), a phy-
sician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B),’’ after ‘‘a 
physician’’. 
(c) APPLICATION TO OTHER ITEMS OR SERVICES.— 
The Secretary may extend the requirement applied by the 
amendments made by subsections (a) and (b) to durable 
medical equipment and home health services (relating to re-
quiring certifications and written orders to be made by en-
rolled physicians and health professions) to all other cat-
egories of items or services under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.), including covered 
part D drugs as defined in section 1860D–2(e) of such Act 
(42 U.S.C. 1395w–102), that are ordered, prescribed, or re-
ferred by a physician enrolled under section 1866(j) of such 
Act (42 U.S.C. 1395cc(j)) or an eligible professional under 
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section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w– 
4(k)(3)(B)). 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to written orders and certifications 
made on or after July 1, 2010. 
SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE 
DOCUMENTATION ON REFERRALS TO PRO-
GRAMS AT HIGH RISK OF WASTE AND ABUSE. 
(a) PHYSICIANS
AND OTHER SUPPLIERS.—Section 
1842(h) of the Social Security Act (42 U.S.C. 1395u(h)) 
is amended by adding at the end the following new para-
graph: 
‘‘(9) The Secretary may revoke enrollment, for a period 
of not more than one year for each act, for a physician 
or supplier under section 1866(j) if such physician or sup-
plier fails to maintain and, upon request of the Secretary, 
provide access to documentation relating to written orders 
or requests for payment for durable medical equipment, cer-
tifications for home health services, or referrals for other 
items or services written or ordered by such physician or 
supplier under this title, as specified by the Secretary.’’. 
(b) PROVIDERS OF SERVICES.—Section 1866(a)(1) of 
such Act (42 U.S.C. 1395cc) is further amended— 
(1) in subparagraph (U), by striking at the end 
‘‘and’’; 
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(2) in subparagraph (V), by striking the period 
at the end and adding ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(W) maintain and, upon request of the 
Secretary, provide access to documentation relat-
ing to written orders or requests for payment for 
durable medical equipment, certifications for 
home health services, or referrals for other items 
or services written or ordered by the provider 
under this title, as specified by the Secretary.’’. 
(c) OIG PERMISSIVE EXCLUSION AUTHORITY.—Sec-
tion 1128(b)(11) of the Social Security Act (42 U.S.C. 
1320a–7(b)(11)) is amended by inserting ‘‘, ordering, refer-
ring for furnishing, or certifying the need for’’ after ‘‘fur-
nishing’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to orders, certifications, and referrals 
made on or after January 1, 2010. 
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SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT RE-
QUIRED BEFORE PHYSICIANS MAY CERTIFY 
ELIGIBILITY FOR HOME HEALTH SERVICES 
OR DURABLE MEDICAL EQUIPMENT UNDER 
MEDICARE. 
(a) CONDITION
OF PAYMENT
FOR HOME HEALTH 
SERVICES.— 
(1) PART A.—Section 1814(a)(2)(C) of such Act 
is amended— 
(A) by striking ‘‘and such services’’ and in-
serting ‘‘such services’’; and 
(B) by inserting after ‘‘care of a physician’’ 
the following: ‘‘, and, in the case of a certifi-
cation made by a physician after January 1, 
2010, prior to making such certification the phy-
sician must document that the physician himself 
or herself has had a face-to-face encounter (in-
cluding through use of telehealth, subject to the 
requirements in section 1834(m), and other than 
with respect to encounters that are incident to 
services involved) with the individual within a 
reasonable timeframe as determined by the Sec-
retary’’. 
(2) PART B.—Section 1835(a)(2)(A) of the Social 
Security Act is amended— 
(A) by striking ‘‘and’’ before ‘‘(iii)’’; and 
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(B) by inserting after ‘‘care of a physician’’ 
the following: ‘‘, and (iv) in the case of a certifi-
cation after January 1, 2010, prior to making 
such certification the physician must document 
that the physician has had a face-to-face encoun-
ter (including through use of telehealth and other 
than with respect to encounters that are incident 
to services involved) with the individual during 
the 6-month period preceding such certification, 
or other reasonable timeframe as determined by 
the Secretary’’. 
(b) CONDITION OF PAYMENT FOR DURABLE MEDICAL 
EQUIPMENT.—Section 1834(a)(11)(B) of the Social Secu-
rity Act (42 U.S.C. 1395m(a)(11)(B)) is amended— 
(1) by striking ‘‘ORDER.—The Secretary’’ and 
inserting ‘‘ORDER.— 
‘‘(i) IN
GENERAL.—The Secretary’’; 
and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) REQUIREMENT
FOR
FACE
TO 
FACE ENCOUNTER.—The Secretary shall re-
quire that such an order be written pursu-
ant to the physician documenting that a 
physician, a physician assistant, a nurse 
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practitioner, or a clinical nurse specialist 
(as those terms are defined in section 
1861(aa)(5)) has had a face-to-face encoun-
ter (including through use of telehealth 
under subsection (m) and other than with 
respect to encounters that are incident to 
services involved) with the individual in-
volved during the 6-month period preceding 
such written order, or other reasonable 
timeframe as determined by the Secretary.’’. 
(c) APPLICATION TO OTHER AREAS UNDER MEDI-
CARE.—The Secretary may apply the face-to-face encounter 
requirement described in the amendments made by sub-
sections (a) and (b) to other items and services for which 
payment is provided under title XVIII of the Social Secu-
rity Act based upon a finding that such an decision would 
reduce the risk of waste, fraud, or abuse. 
(d) APPLICATION TO MEDICAID.—The requirements 
pursuant to the amendments made by subsections (a) and 
(b) shall apply in the case of physicians making certifi-
cations for home health services under title XIX of the So-
cial Security Act in the same manner and to the same ex-
tent as such requirements apply in the case of physicians 
making such certifications under title XVIII of such Act. 
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SEC. 6408. ENHANCED PENALTIES. 
(a) CIVIL MONETARY PENALTIES FOR FALSE STATE-
MENTS OR DELAYING INSPECTIONS.—Section 1128A(a) of 
the Social Security Act (42 U.S.C. 1320a–7a(a)), as 
amended by section 5002(d)(2)(A), is amended— 
(1) in paragraph (6), by striking ‘‘or’’ at the 
end; and 
(2) by inserting after paragraph (7) the fol-
lowing new paragraphs: 
‘‘(8) knowingly makes, uses, or causes to be made 
or used, a false record or statement material to a false 
or fraudulent claim for payment for items and serv-
ices furnished under a Federal health care program; 
or 
‘‘(9) fails to grant timely access, upon reasonable 
request (as defined by the Secretary in regulations), 
to the Inspector General of the Department of Health 
and Human Services, for the purpose of audits, inves-
tigations, evaluations, or other statutory functions of 
the Inspector General of the Department of Health 
and Human Services;’’; and 
(3) in the first sentence— 
(A) by striking ‘‘or in cases under para-
graph (7)’’ and inserting ‘‘in cases under para-
graph (7)’’; and 
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(B) by striking ‘‘act)’’ and inserting ‘‘act, 
in cases under paragraph (8), $50,000 for each 
false record or statement, or in cases under para-
graph (9), $15,000 for each day of the failure de-
scribed in such paragraph)’’. 
(b) MEDICARE ADVANTAGE AND PART D PLANS.— 
(1) ENSURING TIMELY INSPECTIONS RELATING 
TO
CONTRACTS
WITH
MA
ORGANIZATIONS.—Section 
1857(d)(2) of such Act (42 U.S.C. 1395w–27(d)(2)) is 
amended— 
(A) in subparagraph (A), by inserting 
‘‘timely’’ before ‘‘inspect’’; and 
(B) in subparagraph (B), by inserting 
‘‘timely’’ before ‘‘audit and inspect’’. 
(2) 
MARKETING
VIOLATIONS.—Section 
1857(g)(1) of the Social Security Act (42 U.S.C. 
1395w–27(g)(1)) is amended— 
(A) in subparagraph (F), by striking ‘‘or’’ 
at the end; 
(B) by inserting after subparagraph (G) the 
following new subparagraphs: 
‘‘(H) except as provided under subpara-
graph (C) or (D) of section 1860D–1(b)(1), en-
rolls an individual in any plan under this part 
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without the prior consent of the individual or the 
designee of the individual; 
‘‘(I) transfers an individual enrolled under 
this part from one plan to another without the 
prior consent of the individual or the designee of 
the individual or solely for the purpose of earn-
ing a commission; 
‘‘(J) fails to comply with marketing restric-
tions described in subsections (h) and (j) of sec-
tion 1851 or applicable implementing regula-
tions or guidance; or 
‘‘(K) employs or contracts with any indi-
vidual or entity who engages in the conduct de-
scribed in subparagraphs (A) through (J) of this 
paragraph;’’; and 
(C) by adding at the end the following new 
sentence: ‘‘The Secretary may provide, in addi-
tion to any other remedies authorized by law, for 
any of the remedies described in paragraph (2), 
if the Secretary determines that any employee or 
agent of such organization, or any provider or 
supplier who contracts with such organization, 
has engaged in any conduct described in sub-
paragraphs (A) through (K) of this paragraph.’’. 
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(3) PROVISION
OF
FALSE
INFORMATION.—Sec-
tion 1857(g)(2)(A) of the Social Security Act (42 
U.S.C. 1395w–27(g)(2)(A)) is amended by inserting 
‘‘except with respect to a determination under sub-
paragraph (E), an assessment of not more than the 
amount claimed by such plan or plan sponsor based 
upon the misrepresentation or falsified information 
involved,’’ after ‘‘for each such determination,’’. 
(c) OBSTRUCTION
OF PROGRAM AUDITS.—Section 
1128(b)(2) of the Social Security Act (42 U.S.C. 1320a– 
7(b)(2)) is amended— 
(1) in the heading, by inserting ‘‘OR AUDIT’’ 
after ‘‘INVESTIGATION’’; and 
(2) by striking ‘‘investigation into’’ and all that 
follows through the period and inserting ‘‘investiga-
tion or audit related to—’’ 
‘‘(i) any offense described in para-
graph (1) or in subsection (a); or 
‘‘(ii) the use of funds received, directly 
or indirectly, from any Federal health care 
program (as defined in section 1128B(f)).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to acts committed on or after January 1, 2010. 
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(2) EXCEPTION.—The amendments made by sub-
section (b)(1) take effect on the date of enactment of 
this Act. 
SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PRO-
TOCOL. 
(a) DEVELOPMENT OF SELF-REFERRAL DISCLOSURE 
PROTOCOL.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services, in cooperation with the Inspector 
General of the Department of Health and Human 
Services, shall establish, not later than 6 months after 
the date of the enactment of this Act, a protocol to en-
able health care providers of services and suppliers to 
disclose an actual or potential violation of section 
1877 of the Social Security Act (42 U.S.C. 1395nn) 
pursuant to a self-referral disclosure protocol (in this 
section referred to as an ‘‘SRDP’’). The SRDP shall 
include direction to health care providers of services 
and suppliers on— 
(A) a specific person, official, or office to 
whom such disclosures shall be made; and 
(B) instruction on the implication of the 
SRDP on corporate integrity agreements and 
corporate compliance agreements. 
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(2) PUBLICATION
ON
INTERNET
WEBSITE
OF 
SRDP INFORMATION.—The Secretary of Health and 
Human Services shall post information on the public 
Internet website of the Centers for Medicare & Med-
icaid Services to inform relevant stakeholders of how 
to disclose actual or potential violations pursuant to 
an SRDP. 
(3) RELATION
TO
ADVISORY
OPINIONS.—The 
SRDP shall be separate from the advisory opinion 
process set forth in regulations implementing section 
1877(g) of the Social Security Act. 
(b) REDUCTION IN AMOUNTS OWED.—The Secretary 
of Health and Human Services is authorized to reduce the 
amount due and owing for all violations under section 1877 
of the Social Security Act to an amount less than that speci-
fied in subsection (g) of such section. In establishing such 
amount for a violation, the Secretary may consider the fol-
lowing factors: 
(1) The nature and extent of the improper or il-
legal practice. 
(2) The timeliness of such self-disclosure. 
(3) The cooperation in providing additional in-
formation related to the disclosure. 
(4) Such other factors as the Secretary considers 
appropriate. 
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(c) REPORT.—Not later than 18 months after the date 
on which the SRDP protocol is established under subsection 
(a)(1), the Secretary shall submit to Congress a report on 
the implementation of this section. Such report shall in-
clude— 
(1) the number of health care providers of serv-
ices and suppliers making disclosures pursuant to the 
SRDP; 
(2) the amounts collected pursuant to the SRDP; 
(3) the types of violations reported under the 
SRDP; and 
(4) such other information as may be necessary 
to evaluate the impact of this section. 
SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE 
MEDICAL 
EQUIPMENT, 
PROSTHETICS, 
ORTHOTICS, AND SUPPLIES COMPETITIVE AC-
QUISITION PROGRAM. 
(a) EXPANSION OF ROUND 2 OF THE DME COMPETI-
TIVE BIDDING PROGRAM.—Section 1847(a)(1) of the Social 
Security Act (42 U.S.C. 1395w–3(a)(1)) is amended— 
(1) in subparagraph (B)(i)(II), by striking ‘‘70’’ 
and inserting ‘‘91’’; and 
(2) in subparagraph (D)(ii)— 
(A) in subclause (I), by striking ‘‘and’’ at 
the end; 
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(B) by redesignating subclause (II) as sub-
clause (III); and 
(C) by inserting after subclause (I) the fol-
lowing new subclause: 
‘‘(II) the Secretary shall include 
the next 21 largest metropolitan statis-
tical areas by total population (after 
those selected under subclause (I)) for 
such round; and’’. 
(b) REQUIREMENT TO EITHER COMPETITIVELY BID 
AREAS OR USE COMPETITIVE BID PRICES BY 2016.—Sec-
tion 1834(a)(1)(F) of the Social Security Act (42 U.S.C. 
1395m(a)(1)(F)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii)— 
(A) by inserting ‘‘(and, in the case of cov-
ered items furnished on or after January 1, 
2016, subject to clause (iii), shall)’’ after ‘‘may’’; 
and 
(B) by striking the period at the end and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(iii) in the case of covered items fur-
nished on or after January 1, 2016, the 
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Secretary shall continue to make such ad-
justments described in clause (ii) as, under 
such competitive acquisition programs, ad-
ditional covered items are phased in or in-
formation is updated as contracts under 
section 1847 are recompeted in accordance 
with section 1847(b)(3)(B).’’. 
SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CON-
TRACTOR (RAC) PROGRAM. 
(a) EXPANSION TO MEDICAID.— 
(1) 
STATE
PLAN
AMENDMENT.—Section 
1902(a)(42) of the Social Security Act (42 U.S.C. 
1396a(a)(42)) is amended— 
(A) by striking ‘‘that the records’’ and in-
serting ‘‘that— 
‘‘(A) the records’’; 
(B) by inserting ‘‘and’’ after the semicolon; 
and 
(C) by adding at the end the following: 
‘‘(B) not later than December 31, 2010, the 
State shall— 
‘‘(i) establish a program under which 
the State contracts (consistent with State 
law and in the same manner as the Sec-
retary enters into contracts with recovery 
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audit contractors under section 1893(h), 
subject to such exceptions or requirements as 
the Secretary may require for purposes of 
this title or a particular State) with 1 or 
more recovery audit contractors for the pur-
pose of identifying underpayments and 
overpayments and recouping overpayments 
under the State plan and under any waiver 
of the State plan with respect to all services 
for which payment is made to any entity 
under such plan or waiver; and 
‘‘(ii) provide assurances satisfactory to 
the Secretary that— 
‘‘(I) under such contracts, pay-
ment shall be made to such a con-
tractor only from amounts recovered; 
‘‘(II) from such amounts recov-
ered, payment— 
‘‘(aa) shall be made on a 
contingent basis for collecting 
overpayments; and 
‘‘(bb) may be made in such 
amounts as the State may specify 
for identifying underpayments; 
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‘‘(III) the State has an adequate 
process for entities to appeal any ad-
verse determination made by such con-
tractors; and 
‘‘(IV) such program is carried out 
in accordance with such requirements 
as the Secretary shall specify, includ-
ing— 
‘‘(aa) for purposes of section 
1903(a)(7), 
that 
amounts 
ex-
pended by the State to carry out 
the program shall be considered 
amounts expended as necessary 
for the proper and efficient ad-
ministration of the State plan or 
a waiver of the plan; 
‘‘(bb) that section 1903(d) 
shall apply to amounts recovered 
under the program; and 
‘‘(cc) that the State and any 
such contractors under contract 
with the State shall coordinate 
such recovery audit efforts with 
other contractors or entities per-
forming audits of entities receiv-
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ing payments under the State 
plan or waiver in the State, in-
cluding efforts with Federal and 
State law enforcement with re-
spect to the Department of Jus-
tice, including the Federal Bureau 
of Investigations, the Inspector 
General of the Department of 
Health and Human Services, and 
the State medicaid fraud control 
unit; and’’. 
(2) COORDINATION; REGULATIONS.— 
(A) IN GENERAL.—The Secretary of Health 
and Human Services, acting through the Admin-
istrator of the Centers for Medicare & Medicaid 
Services, shall coordinate the expansion of the 
Recovery Audit Contractor program to Medicaid 
with States, particularly with respect to each 
State that enters into a contract with a recovery 
audit contractor for purposes of the State’s Med-
icaid program prior to December 31, 2010. 
(B) 
REGULATIONS.—The 
Secretary 
of 
Health and Human Services shall promulgate 
regulations to carry out this subsection and the 
amendments made by this subsection, including 
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with respect to conditions of Federal financial 
participation, as specified by the Secretary. 
(b) EXPANSION TO MEDICARE PARTS C AND D.—Sec-
tion 1893(h) of the Social Security Act (42 U.S.C. 
1395ddd(h)) is amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A), by striking ‘‘part A or B’’ and in-
serting ‘‘this title’’; 
(2) in paragraph (2), by striking ‘‘parts A and 
B’’ and inserting ‘‘this title’’; 
(3) in paragraph (3), by inserting ‘‘(not later 
than December 31, 2010, in the case of contracts re-
lating to payments made under part C or D)’’ after 
‘‘2010’’; 
(4) in paragraph (4), in the matter preceding 
subparagraph (A), by striking ‘‘part A or B’’ and in-
serting ‘‘this title’’; and 
(5) by adding at the end the following: 
‘‘(9) SPECIAL RULES RELATING TO PARTS C AND 
D.—The Secretary shall enter into contracts under 
paragraph (1) to require recovery audit contractors 
to— 
‘‘(A) ensure that each MA plan under part 
C has an anti-fraud plan in effect and to review 
the effectiveness of each such anti-fraud plan; 
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‘‘(B) ensure that each prescription drug 
plan under part D has an anti-fraud plan in ef-
fect and to review the effectiveness of each such 
anti-fraud plan; 
‘‘(C) examine claims for reinsurance pay-
ments under section 1860D–15(b) to determine 
whether prescription drug plans submitting such 
claims incurred costs in excess of the allowable 
reinsurance costs permitted under paragraph (2) 
of that section; and 
‘‘(D) review estimates submitted by pre-
scription drug plans by private plans with re-
spect to the enrollment of high cost beneficiaries 
(as defined by the Secretary) and to compare 
such estimates with the numbers of such bene-
ficiaries actually enrolled by such plans.’’. 
(c) ANNUAL REPORT.—The Secretary of Health and 
Human Services, acting through the Administrator of the 
Centers for Medicare & Medicaid Services, shall submit an 
annual report to Congress concerning the effectiveness of the 
Recovery Audit Contractor program under Medicaid and 
Medicare and shall include such reports recommendations 
for expanding or improving the program. 
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Subtitle F—Additional Medicaid 
Program Integrity Provisions 
SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION 
UNDER MEDICAID IF TERMINATED UNDER 
MEDICARE OR OTHER STATE PLAN. 
Section 1902(a)(39) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting after 
‘‘1128A,’’ the following: ‘‘terminate the participation of any 
individual or entity in such program if (subject to such ex-
ceptions as are permitted with respect to exclusion under 
sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation of 
such individual or entity is terminated under title XVIII 
or any other State plan under this title,’’. 
SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RE-
LATING TO CERTAIN OWNERSHIP, CONTROL, 
AND MANAGEMENT AFFILIATIONS. 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396a(a)), as amended by section 6401(b), is amended by 
inserting after paragraph (77) the following: 
‘‘(78) provide that the State agency described in 
paragraph (9) exclude, with respect to a period, any 
individual or entity from participation in the pro-
gram under the State plan if such individual or enti-
ty owns, controls, or manages an entity that (or if 
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such entity is owned, controlled, or managed by an 
individual or entity that)— 
‘‘(A) has unpaid overpayments (as defined 
by the Secretary) under this title during such pe-
riod determined by the Secretary or the State 
agency to be delinquent; 
‘‘(B) is suspended or excluded from partici-
pation under or whose participation is termi-
nated under this title during such period; or 
‘‘(C) is affiliated with an individual or en-
tity that has been suspended or excluded from 
participation under this title or whose participa-
tion is terminated under this title during such 
period;’’. 
SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER 
ALTERNATE PAYEES REQUIRED TO REGISTER 
UNDER MEDICAID. 
(a) IN GENERAL.—Section 1902(a) of the Social Secu-
rity Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended by 
section 6502(a), is amended by inserting after paragraph 
(78), the following: 
‘‘(79) provide that any agent, clearinghouse, or 
other alternate payee (as defined by the Secretary) 
that submits claims on behalf of a health care pro-
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vider must register with the State and the Secretary 
in a form and manner specified by the Secretary;’’. 
SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF 
DATA ELEMENTS UNDER MMIS TO DETECT 
FRAUD AND ABUSE. 
(a) IN GENERAL.—Section 1903(r)(1)(F) of the Social 
Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by in-
serting after ‘‘necessary’’ the following: ‘‘and including, for 
data submitted to the Secretary on or after January 1, 
2010, data elements from the automated data system that 
the Secretary determines to be necessary for program integ-
rity, program oversight, and administration, at such fre-
quency as the Secretary shall determine’’. 
(b) MANAGED CARE ORGANIZATIONS.— 
(1) IN GENERAL.—Section 1903(m)(2)(A)(xi) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and for 
the provision of such data to the State at a frequency 
and level of detail to be specified by the Secretary’’ 
after ‘‘patients’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply with respect to contract 
years beginning on or after January 1, 2010. 
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SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS 
OR ENTITIES LOCATED OUTSIDE OF THE 
UNITED STATES. 
Section 1902(a) of the Social Security Act (42 U.S.C. 
1396b(a)), as amended by section 6503, is amended by in-
serting after paragraph (79) the following new paragraph: 
‘‘(80) provide that the State shall not provide 
any payments for items or services provided under 
the State plan or under a waiver to any financial in-
stitution or entity located outside of the United 
States;’’. 
SEC. 6506. OVERPAYMENTS. 
(a) EXTENSION
OF PERIOD
FOR COLLECTION
OF 
OVERPAYMENTS DUE TO FRAUD.— 
(1) IN GENERAL.—Section 1903(d)(2) of the So-
cial Security Act (42 U.S.C. 1396b(d)(2)) is amend-
ed— 
(A) in subparagraph (C)— 
(i) in the first sentence, by striking 
‘‘60 days’’ and inserting ‘‘1 year’’; and 
(ii) in the second sentence, by striking 
‘‘60 days’’ and inserting ‘‘1-year period’’; 
and 
(B) in subparagraph (D)— 
(i) in inserting ‘‘(i)’’ after ‘‘(D)’’; and 
(ii) by adding at the end the following: 
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‘‘(ii) In any case where the State is unable to recover 
a debt which represents an overpayment (or any portion 
thereof) made to a person or other entity due to fraud with-
in 1 year of discovery because there is not a final deter-
mination of the amount of the overpayment under an ad-
ministrative or judicial process (as applicable), including 
as a result of a judgment being under appeal, no adjustment 
shall be made in the Federal payment to such State on ac-
count of such overpayment (or portion thereof) before the 
date that is 30 days after the date on which a final judg-
ment (including, if applicable, a final determination on an 
appeal) is made.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection take effect on the date of enactment 
of this Act and apply to overpayments discovered on 
or after that date. 
(b) CORRECTIVE ACTION.—The Secretary shall pro-
mulgate regulations that require States to correct Federally 
identified claims overpayments, of an ongoing or recurring 
nature, with new Medicaid Management Information Sys-
tem (MMIS) edits, audits, or other appropriate corrective 
action. 
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SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT 
CODING INITIATIVE. 
Section 1903(r) of the Social Security Act (42 U.S.C. 
1396b(r)) is amended— 
(1) in paragraph (1)(B)— 
(A) in clause (ii), by striking ‘‘and’’ at the 
end; 
(B) in clause (iii), by adding ‘‘and’’ after 
the semi-colon; and 
(C) by adding at the end the following new 
clause: 
‘‘(iv) effective for claims filed on or 
after October 1, 2010, incorporate compat-
ible methodologies of the National Correct 
Coding Initiative administered by the Sec-
retary (or any successor initiative to pro-
mote correct coding and to control improper 
coding leading to inappropriate payment) 
and such other methodologies of that Initia-
tive (or such other national correct coding 
methodologies) as the Secretary identifies in 
accordance with paragraph (4);’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(4) For purposes of paragraph (1)(B)(iv), the Sec-
retary shall do the following: 
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‘‘(A) Not later than September 1, 2010: 
‘‘(i) Identify those methodologies of the Na-
tional Correct Coding Initiative administered by 
the Secretary (or any successor initiative to pro-
mote correct coding and to control improper cod-
ing leading to inappropriate payment) which 
are compatible to claims filed under this title. 
‘‘(ii) Identify those methodologies of such 
Initiative (or such other national correct coding 
methodologies) that should be incorporated into 
claims filed under this title with respect to items 
or services for which States provide medical as-
sistance under this title and no national correct 
coding methodologies have been established under 
such Initiative with respect to title XVIII. 
‘‘(iii) Notify States of— 
‘‘(I) the methodologies identified under 
subparagraphs (A) and (B) (and of any 
other national correct coding methodologies 
identified under subparagraph (B)); and 
‘‘(II) how States are to incorporate 
such methodologies into claims filed under 
this title. 
‘‘(B) Not later than March 1, 2011, submit a re-
port to Congress that includes the notice to States 
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under clause (iii) of subparagraph (A) and an anal-
ysis supporting the identification of the methodologies 
made under clauses (i) and (ii) of subparagraph 
(A).’’. 
SEC. 6508. GENERAL EFFECTIVE DATE. 
(a) IN GENERAL.—Except as otherwise provided in 
this subtitle, this subtitle and the amendments made by this 
subtitle take effect on January 1, 2011, without regard to 
whether final regulations to carry out such amendments 
and subtitle have been promulgated by that date. 
(b) DELAY IF STATE LEGISLATION REQUIRED.—In the 
case of a State plan for medical assistance under title XIX 
of the Social Security Act or a child health plan under title 
XXI of such Act which the Secretary of Health and Human 
Services determines requires State legislation (other than 
legislation appropriating funds) in order for the plan to 
meet the additional requirement imposed by the amend-
ments made by this subtitle, the State plan or child health 
plan shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its failure 
to meet this additional requirement before the first day of 
the first calendar quarter beginning after the close of the 
first regular session of the State legislature that begins after 
the date of the enactment of this Act. For purposes of the 
previous sentence, in the case of a State that has a 2-year 
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legislative session, each year of such session shall be deemed 
to be a separate regular session of the State legislature. 
Subtitle G—Additional Program 
Integrity Provisions 
SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REP-
RESENTATIONS. 
(a) PROHIBITION.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.) is amended by adding at the end the 
following: 
‘‘SEC. 519. PROHIBITION ON FALSE STATEMENTS AND REP-
RESENTATIONS. 
‘‘No person, in connection with a plan or other ar-
rangement that is multiple employer welfare arrangement 
described in section 3(40), shall make a false statement or 
false representation of fact, knowing it to be false, in con-
nection with the marketing or sale of such plan or arrange-
ment, to any employee, any member of an employee organi-
zation, any beneficiary, any employer, any employee orga-
nization, the Secretary, or any State, or the representative 
or agent of any such person, State, or the Secretary, con-
cerning— 
‘‘(1) the financial condition or solvency of such 
plan or arrangement; 
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‘‘(2) the benefits provided by such plan or ar-
rangement; 
‘‘(3) the regulatory status of such plan or other 
arrangement under any Federal or State law gov-
erning collective bargaining, labor management rela-
tions, or intern union affairs; or 
‘‘(4) the regulatory status of such plan or other 
arrangement regarding exemption from state regu-
latory authority under this Act. 
This section shall not apply to any plan or arrangement 
that does not fall within the meaning of the term ‘multiple 
employer welfare arrangement’ under section 3(40)(A).’’. 
(b) CRIMINAL PENALTIES.—Section 501 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C. 
1131) is amended— 
(1) by inserting ‘‘(a)’’ before ‘‘Any person’’; and 
(2) by adding at the end the following: 
‘‘(b) Any person that violates section 519 shall upon 
conviction be imprisoned not more than 10 years or fined 
under title 18, United States Code, or both.’’. 
(c) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the 
end the following: 
‘‘Sec. 519. Prohibition on false statement and representations.’’. 
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SEC. 6602. CLARIFYING DEFINITION. 
Section 24(a)(2) of title 18, United States Code, is 
amended by inserting ‘‘or section 411, 518, or 511 of the 
Employee Retirement Income Security Act of 1974,’’ after 
‘‘1954 of this title’’. 
SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT 
FORM. 
Part C of title XXVII of the Public Health Service Act 
(42 U.S.C. 300gg–91 et seq.) is amended by adding at the 
end the following: 
‘‘SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FOR-
MAT. 
‘‘The Secretary shall request the National Association 
of Insurance Commissioners to develop a model uniform re-
port form for private health insurance issuer seeking to refer 
suspected fraud and abuse to State insurance departments 
or other responsible State agencies for investigation. The 
Secretary shall request that the National Association of In-
surance Commissioners develop recommendations for uni-
form reporting standards for such referrals.’’. 
SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT 
FRAUD AND ABUSE. 
(a) IN GENERAL.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.), as amended by section 6601, is further 
amended by adding at the end the following: 
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‘‘SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT 
FRAUD AND ABUSE. 
‘‘The Secretary may, for the purpose of identifying, 
preventing, or prosecuting fraud and abuse, adopt regu-
latory standards establishing, or issue an order relating to 
a specific person establishing, that a person engaged in the 
business of providing insurance through a multiple em-
ployer welfare arrangement described in section 3(40) is 
subject to the laws of the States in which such person oper-
ates which regulate insurance in such State, notwith-
standing section 514(b)(6) of this Act or the Liability Risk 
Retention Act of 1986, and regardless of whether the law 
of the State is otherwise preempted under any of such provi-
sions. This section shall not apply to any plan or arrange-
ment that does not fall within the meaning of the term ‘mul-
tiple 
employer 
welfare 
arrangement’ 
under 
section 
3(40)(A).’’. 
(b) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement 
Income Security Act of 1974, as amended by section 6601, 
is further amended by adding at the end the following: 
‘‘Sec. 520. Applicability of State law to combat fraud and abuse.’’. 
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SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO 
ISSUE 
ADMINISTRATIVE 
SUMMARY 
CEASE 
AND DESIST ORDERS AND SUMMARY SEI-
ZURES ORDERS AGAINST PLANS THAT ARE IN 
FINANCIALLY HAZARDOUS CONDITION. 
(a) IN GENERAL.—Part 5 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131 et seq.), as amended by section 6604, is further 
amended by adding at the end the following: 
‘‘SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST 
ORDERS AND SUMMARY SEIZURE ORDERS 
AGAINST MULTIPLE EMPLOYER WELFARE AR-
RANGEMENTS IN FINANCIALLY HAZARDOUS 
CONDITION. 
‘‘(a) IN GENERAL.—The Secretary may issue a cease 
and desist (ex parte) order under this title if it appears 
to the Secretary that the alleged conduct of a multiple em-
ployer welfare arrangement described in section 3(40), other 
than a plan or arrangement described in subsection (g), is 
fraudulent, or creates an immediate danger to the public 
safety or welfare, or is causing or can be reasonably ex-
pected to cause significant, imminent, and irreparable pub-
lic injury. 
‘‘(b) HEARING.—A person that is adversely affected by 
the issuance of a cease and desist order under subsection 
(a) may request a hearing by the Secretary regarding such 
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order. The Secretary may require that a proceeding under 
this section, including all related information and evidence, 
be conducted in a confidential manner. 
‘‘(c) BURDEN OF PROOF.—The burden of proof in any 
hearing conducted under subsection (b) shall be on the party 
requesting the hearing to show cause why the cease and de-
sist order should be set aside. 
‘‘(d) DETERMINATION.—Based upon the evidence pre-
sented at a hearing under subsection (b), the cease and de-
sist order involved may be affirmed, modified, or set aside 
by the Secretary in whole or in part. 
‘‘(e) SEIZURE.—The Secretary may issue a summary 
seizure order under this title if it appears that a multiple 
employer welfare arrangement is in a financially hazardous 
condition. 
‘‘(f) REGULATIONS.—The Secretary may promulgate 
such regulations or other guidance as may be necessary or 
appropriate to carry out this section. 
‘‘(g) EXCEPTION.—This section shall not apply to any 
plan or arrangement that does not fall within the meaning 
of the term ‘multiple employer welfare arrangement’ under 
section 3(40)(A).’’. 
(b) CONFORMING AMENDMENT.—The table of sections 
for part 5 of subtitle B of title I of the Employee Retirement 
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Income Security Act of 1974, as amended by section 6604, 
is further amended by adding at the end the following: 
‘‘Sec. 521. Administrative summary cease and desist orders and summary seizure 
orders against health plans in financially hazardous condition.’’. 
SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT 
OF LABOR. 
Section 101(g) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1021(g)) is amended— 
(1) by striking ‘‘Secretary may’’ and inserting 
‘‘Secretary shall’’; and 
(2) by inserting ‘‘to register with the Secretary 
prior to operating in a State and may, by regulation, 
require such multiple employer welfare arrangements’’ 
after ‘‘not group health plans’’. 
SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CON-
FIDENTIAL COMMUNICATIONS. 
Section 504 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1134) is amended by adding 
at the end the following: 
‘‘(d) The Secretary may promulgate a regulation that 
provides an evidentiary privilege for, and provides for the 
confidentiality of communications between or among, any 
of the following entities or their agents, consultants, or em-
ployees: 
‘‘(1) A State insurance department. 
‘‘(2) A State attorney general. 
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‘‘(3) The National Association of Insurance Com-
missioners. 
‘‘(4) The Department of Labor. 
‘‘(5) The Department of the Treasury. 
‘‘(6) The Department of Justice. 
‘‘(7) The Department of Health and Human 
Services. 
‘‘(8) Any other Federal or State authority that 
the Secretary determines is appropriate for the pur-
poses of enforcing the provisions of this title. 
‘‘(e) The privilege established under subsection (d) 
shall apply to communications related to any investigation, 
audit, examination, or inquiry conducted or coordinated by 
any of the agencies. A communication that is privileged 
under subsection (d) shall not waive any privilege otherwise 
available to the communicating agency or to any person 
who provided the information that is communicated.’’. 
Subtitle H—Elder Justice Act 
SEC. 6701. SHORT TITLE OF SUBTITLE. 
This subtitle may be cited as the ‘‘Elder Justice Act 
of 2009’’. 
SEC. 6702. DEFINITIONS. 
Except as otherwise specifically provided, any term 
that is defined in section 2011 of the Social Security Act 
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(as added by section 6703(a)) and is used in this subtitle 
has the meaning given such term by such section. 
SEC. 6703. ELDER JUSTICE. 
(a) ELDER JUSTICE.— 
(1) IN GENERAL.—Title XX of the Social Secu-
rity Act (42 U.S.C. 1397 et seq.) is amended— 
(A) in the heading, by inserting ‘‘AND 
ELDER 
JUSTICE’’ 
after 
‘‘SOCIAL 
SERVICES’’; 
(B) by inserting before section 2001 the fol-
lowing: 
‘‘Subtitle A—Block Grants to States 
for Social Services’’; 
and 
(C) by adding at the end the following: 
‘‘Subtitle B—Elder Justice 
‘‘SEC. 2011. DEFINITIONS. 
‘‘In this subtitle: 
‘‘(1) ABUSE.—The term ‘abuse’ means the know-
ing infliction of physical or psychological harm or the 
knowing deprivation of goods or services that are nec-
essary to meet essential needs or to avoid physical or 
psychological harm. 
‘‘(2) ADULT PROTECTIVE SERVICES.—The term 
‘adult protective services’ means such services pro-
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vided to adults as the Secretary may specify and in-
cludes services such as— 
‘‘(A) receiving reports of adult abuse, ne-
glect, or exploitation; 
‘‘(B) investigating the reports described in 
subparagraph (A); 
‘‘(C) case planning, monitoring, evaluation, 
and other case work and services; and 
‘‘(D) providing, arranging for, or facili-
tating the provision of medical, social service, 
economic, legal, housing, law enforcement, or 
other protective, emergency, or support services. 
‘‘(3) CAREGIVER.—The term ‘caregiver’ means 
an individual who has the responsibility for the care 
of an elder, either voluntarily, by contract, by receipt 
of payment for care, or as a result of the operation 
of law, and means a family member or other indi-
vidual who provides (on behalf of such individual or 
of a public or private agency, organization, or insti-
tution) compensated or uncompensated care to an 
elder who needs supportive services in any setting. 
‘‘(4) DIRECT
CARE.—The term ‘direct care’ 
means care by an employee or contractor who pro-
vides assistance or long-term care services to a recipi-
ent. 
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‘‘(5) ELDER.—The term ‘elder’ means an indi-
vidual age 60 or older. 
‘‘(6) ELDER JUSTICE.—The term ‘elder justice’ 
means— 
‘‘(A) from a societal perspective, efforts to— 
‘‘(i) prevent, detect, treat, intervene in, 
and prosecute elder abuse, neglect, and ex-
ploitation; and 
‘‘(ii) protect elders with diminished ca-
pacity while maximizing their autonomy; 
and 
‘‘(B) from an individual perspective, the 
recognition of an elder’s rights, including the 
right to be free of abuse, neglect, and exploi-
tation. 
‘‘(7) ELIGIBLE ENTITY.—The term ‘eligible enti-
ty’ means a State or local government agency, Indian 
tribe or tribal organization, or any other public or 
private entity that is engaged in and has expertise in 
issues relating to elder justice or in a field necessary 
to promote elder justice efforts. 
‘‘(8) EXPLOITATION.—The term ‘exploitation’ 
means the fraudulent or otherwise illegal, unauthor-
ized, or improper act or process of an individual, in-
cluding a caregiver or fiduciary, that uses the re-
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sources of an elder for monetary or personal benefit, 
profit, or gain, or that results in depriving an elder 
of rightful access to, or use of, benefits, resources, be-
longings, or assets. 
‘‘(9) FIDUCIARY.—The term ‘fiduciary’— 
‘‘(A) means a person or entity with the 
legal responsibility— 
‘‘(i) to make decisions on behalf of and 
for the benefit of another person; and 
‘‘(ii) to act in good faith and with 
fairness; and 
‘‘(B) includes a trustee, a guardian, a con-
servator, an executor, an agent under a financial 
power of attorney or health care power of attor-
ney, or a representative payee. 
‘‘(10) GRANT.—The term ‘grant’ includes a con-
tract, cooperative agreement, or other mechanism for 
providing financial assistance. 
‘‘(11) GUARDIANSHIP.—The term ‘guardianship’ 
means— 
‘‘(A) the process by which a State court de-
termines that an adult individual lacks capacity 
to make decisions about self-care or property, 
and appoints another individual or entity 
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known as a guardian, as a conservator, or by a 
similar term, as a surrogate decisionmaker; 
‘‘(B) the manner in which the court-ap-
pointed surrogate decisionmaker carries out du-
ties to the individual and the court; or 
‘‘(C) the manner in which the court exer-
cises oversight of the surrogate decisionmaker. 
‘‘(12) INDIAN TRIBE.— 
‘‘(A) IN GENERAL.—The term ‘Indian tribe’ 
has the meaning given such term in section 4 of 
the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450b). 
‘‘(B) 
INCLUSION
OF
PUEBLO
AND 
RANCHERIA.—The term ‘Indian tribe’ includes 
any Pueblo or Rancheria. 
‘‘(13) LAW ENFORCEMENT.—The term ‘law en-
forcement’ means the full range of potential respond-
ers to elder abuse, neglect, and exploitation includ-
ing— 
‘‘(A) police, sheriffs, detectives, public safety 
officers, and corrections personnel; 
‘‘(B) prosecutors; 
‘‘(C) medical examiners; 
‘‘(D) investigators; and 
‘‘(E) coroners. 
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‘‘(14) LONG-TERM CARE.— 
‘‘(A) IN
GENERAL.—The term ‘long-term 
care’ means supportive and health services speci-
fied by the Secretary for individuals who need 
assistance because the individuals have a loss of 
capacity for self-care due to illness, disability, or 
vulnerability. 
‘‘(B) LOSS OF CAPACITY FOR SELF-CARE.— 
For purposes of subparagraph (A), the term ‘loss 
of capacity for self-care’ means an inability to 
engage in 1 or more activities of daily living, in-
cluding eating, dressing, bathing, management of 
one’s financial affairs, and other activities the 
Secretary determines appropriate. 
‘‘(15) LONG-TERM
CARE
FACILITY.—The term 
‘long-term care facility’ means a residential care pro-
vider that arranges for, or directly provides, long- 
term care. 
‘‘(16) NEGLECT.—The term ‘neglect’ means— 
‘‘(A) the failure of a caregiver or fiduciary 
to provide the goods or services that are nec-
essary to maintain the health or safety of an 
elder; or 
‘‘(B) self-neglect. 
‘‘(17) NURSING FACILITY.— 
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‘‘(A) IN GENERAL.—The term ‘nursing fa-
cility’ has the meaning given such term under 
section 1919(a). 
‘‘(B) INCLUSION OF SKILLED NURSING FA-
CILITY.—The term ‘nursing facility’ includes a 
skilled nursing facility (as defined in section 
1819(a)). 
‘‘(18) SELF-NEGLECT.—The term ‘self-neglect’ 
means an adult’s inability, due to physical or mental 
impairment or diminished capacity, to perform essen-
tial self-care tasks including— 
‘‘(A) obtaining essential food, clothing, shel-
ter, and medical care; 
‘‘(B) obtaining goods and services necessary 
to maintain physical health, mental health, or 
general safety; or 
‘‘(C) managing one’s own financial affairs. 
‘‘(19) SERIOUS BODILY INJURY.— 
‘‘(A) IN GENERAL.—The term ‘serious bod-
ily injury’ means an injury— 
‘‘(i) involving extreme physical pain; 
‘‘(ii) involving substantial risk of 
death; 
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‘‘(iii) involving protracted loss or im-
pairment of the function of a bodily mem-
ber, organ, or mental faculty; or 
‘‘(iv) requiring medical intervention 
such as surgery, hospitalization, or physical 
rehabilitation. 
‘‘(B) CRIMINAL
SEXUAL
ABUSE.—Serious 
bodily injury shall be considered to have oc-
curred if the conduct causing the injury is con-
duct described in section 2241 (relating to aggra-
vated sexual abuse) or 2242 (relating to sexual 
abuse) of title 18, United States Code, or any 
similar offense under State law. 
‘‘(20) SOCIAL.—The term ‘social’, when used 
with respect to a service, includes adult protective 
services. 
‘‘(21) STATE LEGAL ASSISTANCE DEVELOPER.— 
The term ‘State legal assistance developer’ means an 
individual described in section 731 of the Older 
Americans Act of 1965. 
‘‘(22) STATE LONG-TERM CARE OMBUDSMAN.— 
The term ‘State Long-Term Care Ombudsman’ means 
the State Long-Term Care Ombudsman described in 
section 712(a)(2) of the Older Americans Act of 1965. 
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‘‘SEC. 2012. GENERAL PROVISIONS. 
‘‘(a) PROTECTION OF PRIVACY.—In pursuing activi-
ties under this subtitle, the Secretary shall ensure the pro-
tection of individual health privacy consistent with the reg-
ulations promulgated under section 264(c) of the Health In-
surance Portability and Accountability Act of 1996 and ap-
plicable State and local privacy regulations. 
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sub-
title shall be construed to interfere with or abridge an elder’s 
right to practice his or her religion through reliance on 
prayer alone for healing when this choice— 
‘‘(1) is contemporaneously expressed, either oral-
ly or in writing, with respect to a specific illness or 
injury which the elder has at the time of the decision 
by an elder who is competent at the time of the deci-
sion; 
‘‘(2) is previously set forth in a living will, 
health care proxy, or other advance directive docu-
ment that is validly executed and applied under State 
law; or 
‘‘(3) may be unambiguously deduced from the el-
der’s life history. 
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‘‘PART I—NATIONAL COORDINATION OF ELDER 
JUSTICE ACTIVITIES AND RESEARCH 
‘‘Subpart A—Elder Justice Coordinating Council and 
Advisory Board on Elder Abuse, Neglect, and Ex-
ploitation 
‘‘SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL. 
‘‘(a) ESTABLISHMENT.—There is established within 
the Office of the Secretary an Elder Justice Coordinating 
Council (in this section referred to as the ‘Council’). 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN GENERAL.—The Council shall be com-
posed of the following members: 
‘‘(A) The Secretary (or the Secretary’s des-
ignee). 
‘‘(B) The Attorney General (or the Attorney 
General’s designee). 
‘‘(C) The head of each Federal department 
or agency or other governmental entity identified 
by the Chair referred to in subsection (d) as hav-
ing responsibilities, or administering programs, 
relating to elder abuse, neglect, and exploitation. 
‘‘(2) REQUIREMENT.—Each member of the Coun-
cil shall be an officer or employee of the Federal Gov-
ernment. 
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‘‘(c) VACANCIES.—Any vacancy in the Council shall 
not affect its powers, but shall be filled in the same manner 
as the original appointment was made. 
‘‘(d) CHAIR.—The member described in subsection 
(b)(1)(A) shall be Chair of the Council. 
‘‘(e) MEETINGS.—The Council shall meet at least 2 
times per year, as determined by the Chair. 
‘‘(f) DUTIES.— 
‘‘(1) IN GENERAL.—The Council shall make rec-
ommendations to the Secretary for the coordination of 
activities of the Department of Health and Human 
Services, the Department of Justice, and other rel-
evant Federal, State, local, and private agencies and 
entities, relating to elder abuse, neglect, and exploi-
tation and other crimes against elders. 
‘‘(2) REPORT.—Not later than the date that is 2 
years after the date of enactment of the Elder Justice 
Act of 2009 and every 2 years thereafter, the Council 
shall submit to the Committee on Finance of the Sen-
ate and the Committee on Ways and Means and the 
Committee on Energy and Commerce of the House of 
Representatives a report that— 
‘‘(A) describes the activities and accomplish-
ments of, and challenges faced by— 
‘‘(i) the Council; and 
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‘‘(ii) the entities represented on the 
Council; and 
‘‘(B) makes such recommendations for legis-
lation, model laws, or other action as the Council 
determines to be appropriate. 
‘‘(g) POWERS OF THE COUNCIL.— 
‘‘(1) INFORMATION FROM FEDERAL AGENCIES.— 
Subject to the requirements of section 2012(a), the 
Council may secure directly from any Federal depart-
ment or agency such information as the Council con-
siders necessary to carry out this section. Upon re-
quest of the Chair of the Council, the head of such de-
partment or agency shall furnish such information to 
the Council. 
‘‘(2) POSTAL SERVICES.—The Council may use 
the United States mails in the same manner and 
under the same conditions as other departments and 
agencies of the Federal Government. 
‘‘(h) TRAVEL EXPENSES.—The members of the Council 
shall not receive compensation for the performance of serv-
ices for the Council. The members shall be allowed travel 
expenses, including per diem in lieu of subsistence, at rates 
authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from 
their homes or regular places of business in the performance 
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of services for the Council. Notwithstanding section 1342 
of title 31, United States Code, the Secretary may accept 
the voluntary and uncompensated services of the members 
of the Council. 
‘‘(i) DETAIL
OF GOVERNMENT EMPLOYEES.—Any 
Federal Government employee may be detailed to the Coun-
cil without reimbursement, and such detail shall be without 
interruption or loss of civil service status or privilege. 
‘‘(j) STATUS AS PERMANENT COUNCIL.—Section 14 of 
the Federal Advisory Committee Act (5 U.S.C. App.) shall 
not apply to the Council. 
‘‘(k) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
‘‘SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, 
AND EXPLOITATION. 
‘‘(a) ESTABLISHMENT.—There is established a board 
to be known as the ‘Advisory Board on Elder Abuse, Neglect, 
and Exploitation’ (in this section referred to as the ‘Advi-
sory Board’) to create short- and long-term multidisci-
plinary strategic plans for the development of the field of 
elder justice and to make recommendations to the Elder 
Justice Coordinating Council established under section 
2021. 
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‘‘(b) COMPOSITION.—The Advisory Board shall be 
composed of 27 members appointed by the Secretary from 
among members of the general public who are individuals 
with experience and expertise in elder abuse, neglect, and 
exploitation prevention, detection, treatment, intervention, 
or prosecution. 
‘‘(c) SOLICITATION OF NOMINATIONS.—The Secretary 
shall publish a notice in the Federal Register soliciting 
nominations for the appointment of members of the Advi-
sory Board under subsection (b). 
‘‘(d) TERMS.— 
‘‘(1) IN GENERAL.—Each member of the Advi-
sory Board shall be appointed for a term of 3 years, 
except that, of the members first appointed— 
‘‘(A) 9 shall be appointed for a term of 3 
years; 
‘‘(B) 9 shall be appointed for a term of 2 
years; and 
‘‘(C) 9 shall be appointed for a term of 1 
year. 
‘‘(2) VACANCIES.— 
‘‘(A) IN
GENERAL.—Any vacancy on the 
Advisory Board shall not affect its powers, but 
shall be filled in the same manner as the original 
appointment was made. 
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