560 
ganization under part C for such period, including 
payments passed through the low-income and rein-
surance subsidies under sections 1860D–14 and 
1860D–15(b), respectively. Such rebate shall be paid 
by the manufacturer to the Secretary not later than 
30 days after the date of receipt of the information 
described in section 1860D–12(b)(7), including as 
such section is applied under section 1857(f)(3), or 
30 days after the receipt of information under sub-
paragraph (D) of paragraph (3), as determined by 
the Secretary. Insofar as not inconsistent with this 
subsection, the Secretary shall establish terms and 
conditions of such agreement relating to compliance, 
penalties, and program evaluations, investigations, 
and audits that are similar to the terms and condi-
tions for rebate agreements under paragraphs (3) 
and (4) of section 1927(b). 
‘‘(3) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—The amount of the re-
bate specified under this paragraph for a manu-
facturer for a rebate period, with respect to 
each dosage form and strength of any covered 
part D drug provided by such manufacturer 
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and dispensed to a rebate eligible individual, 
shall be equal to the product of— 
‘‘(i) the total number of units of such 
dosage form and strength of the drug so 
provided and dispensed for which payment 
was made by a PDP sponsor under part D 
or a MA organization under part C for the 
rebate period, including payments passed 
through the low-income and reinsurance 
subsidies under sections 1860D–14 and 
1860D–15(b), respectively; and 
‘‘(ii) the amount (if any) by which— 
‘‘(I) the Medicaid rebate amount 
(as defined in subparagraph (B)) for 
such form, strength, and period, ex-
ceeds 
‘‘(II) the average Medicare drug 
program rebate eligible rebate amount 
(as defined in subparagraph (C)) for 
such form, strength, and period. 
‘‘(B) MEDICAID
REBATE
AMOUNT.—For 
purposes of this paragraph, the term ‘Medicaid 
rebate amount’ means, with respect to each 
dosage form and strength of a covered part D 
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drug provided by the manufacturer for a rebate 
period— 
‘‘(i) in the case of a single source 
drug or an innovator multiple source drug, 
the 
amount 
specified 
in 
paragraph 
(1)(A)(ii) of section 1927(c) plus the 
amount, if any, specified in paragraph 
(2)(A)(ii) of such section, for such form, 
strength, and period; or 
‘‘(ii) in the case of any other covered 
outpatient drug, the amount specified in 
paragraph (3)(A)(i) of such section for 
such form, strength, and period. 
‘‘(C) AVERAGE MEDICARE DRUG PROGRAM 
REBATE ELIGIBLE REBATE AMOUNT.—For pur-
poses of this subsection, the term ‘average 
Medicare drug program rebate eligible rebate 
amount’ means, with respect to each dosage 
form and strength of a covered part D drug 
provided by a manufacturer for a rebate period, 
the sum, for all PDP sponsors under part D 
and MA organizations administering a MA–PD 
plan under part C, of— 
‘‘(i) the product, for each such spon-
sor or organization, of— 
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‘‘(I) the sum of all rebates, dis-
counts, or other price concessions (not 
taking into account any rebate pro-
vided under paragraph (2) for such 
dosage form and strength of the drug 
dispensed, calculated on a per-unit 
basis, but only to the extent that any 
such rebate, discount, or other price 
concession applies equally to drugs 
dispensed to rebate eligible Medicare 
drug plan enrollees and drugs dis-
pensed to PDP and MA–PD enrollees 
who are not rebate eligible individuals; 
and 
‘‘(II) the number of the units of 
such dosage and strength of the drug 
dispensed during the rebate period to 
rebate eligible individuals enrolled in 
the prescription drug plans adminis-
tered by the PDP sponsor or the MA– 
PD plans administered by the MA or-
ganization; divided by 
‘‘(ii) the total number of units of such 
dosage and strength of the drug dispensed 
during the rebate period to rebate eligible 
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individuals enrolled in all prescription drug 
plans administered by PDP sponsors and 
all MA–PD plans administered by MA or-
ganizations. 
‘‘(D) USE OF ESTIMATES.—The Secretary 
may establish a methodology for estimating the 
average Medicare drug program rebate eligible 
rebate amounts for each rebate period based on 
bid and utilization information under this part 
and may use these estimates as the basis for 
determining the rebates under this section. If 
the Secretary elects to estimate the average 
Medicare drug program rebate eligible rebate 
amounts, the Secretary shall establish a rec-
onciliation process for adjusting manufacturer 
rebate payments not later than 3 months after 
the date that manufacturers receive the infor-
mation 
collected 
under 
section 
1860D- 
12(b)(7)(B). 
‘‘(4) LENGTH OF AGREEMENT.—The provisions 
of paragraph (4) of section 1927(b) (other than 
clauses (iv) and (v) of subparagraph (B)) shall apply 
to rebate agreements under this subsection in the 
same manner as such paragraph applies to a rebate 
agreement under such section. 
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‘‘(5) OTHER
TERMS
AND
CONDITIONS.—The 
Secretary shall establish other terms and conditions 
of the rebate agreement under this subsection, in-
cluding terms and conditions related to compliance, 
that are consistent with this subsection. 
‘‘(6) DEFINITIONS.—In this subsection and sec-
tion 1860D–12(b)(7): 
‘‘(A) REBATE ELIGIBLE INDIVIDUAL.—The 
term ‘rebate eligible individual’— 
‘‘(i) means a full-benefit dual eligible 
individual 
(as 
defined 
in 
section 
1935(c)(6)); and 
‘‘(ii) includes, for drugs dispensed 
after December 31, 2014, a subsidy eligi-
ble individual (as defined in section 
1860D–14(a)(3)(A)). 
‘‘(B) REBATE PERIOD.—The term ‘rebate 
period’ has the meaning given such term in sec-
tion 1927(k)(8). 
‘‘(7) WAIVER.—Chapter 35 of title 44, United 
States Code, shall not apply to the requirements 
under this subsection for the period beginning on 
January 1, 2010, and ending on December 31, 
2010.’’. 
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(2) REPORTING REQUIREMENT FOR THE DE-
TERMINATION AND PAYMENT OF REBATES BY MANU-
FACTURES RELATED TO REBATE FOR REBATE ELIGI-
BLE MEDICARE DRUG PLAN ENROLLEES.— 
(A) 
REQUIREMENTS
FOR
PDP
SPON-
SORS.—Section 1860D–12(b) of the Social Se-
curity Act (42 U.S.C. 1395w–112(b)) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(7) REPORTING REQUIREMENT FOR THE DE-
TERMINATION AND PAYMENT OF REBATES BY MANU-
FACTURERS RELATED TO REBATE FOR REBATE ELI-
GIBLE MEDICARE DRUG PLAN ENROLLEES.— 
‘‘(A) IN GENERAL.—For purposes of the 
rebate under section 1860D–2(f) for contract 
years beginning on or after January 1, 2011, 
each contract entered into with a PDP sponsor 
under this part with respect to a prescription 
drug plan shall require that the sponsor comply 
with subparagraphs (B) and (C). 
‘‘(B) REPORT FORM AND CONTENTS.—Not 
later than a date specified by the Secretary, a 
PDP sponsor of a prescription drug plan under 
this part shall report to each manufacturer— 
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‘‘(i) information (by National Drug 
Code number) on the total number of units 
of each dosage, form, and strength of each 
drug of such manufacturer dispensed to re-
bate eligible Medicare drug plan enrollees 
under any prescription drug plan operated 
by the PDP sponsor during the rebate pe-
riod; 
‘‘(ii) information on the price dis-
counts, price concessions, and rebates for 
such drugs for such form, strength, and 
period; 
‘‘(iii) information on the extent to 
which such price discounts, price conces-
sions, and rebates apply equally to rebate 
eligible Medicare drug plan enrollees and 
PDP enrollees who are not rebate eligible 
Medicare drug plan enrollees; and 
‘‘(iv) any additional information that 
the Secretary determines is necessary to 
enable the Secretary to calculate the aver-
age Medicare drug program rebate eligible 
rebate amount (as defined in paragraph 
(3)(C) of such section), and to determine 
the amount of the rebate required under 
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this section, for such form, strength, and 
period. 
Such report shall be in a form consistent with 
a standard reporting format established by the 
Secretary. 
‘‘(C) SUBMISSION TO SECRETARY.—Each 
PDP sponsor shall promptly transmit a copy of 
the information reported under subparagraph 
(B) to the Secretary for the purpose of audit 
oversight and evaluation. 
‘‘(D) 
CONFIDENTIALITY
OF
INFORMA-
TION.—The provisions of subparagraph (D) of 
section 1927(b)(3), relating to confidentiality of 
information, shall apply to information reported 
by PDP sponsors under this paragraph in the 
same manner that such provisions apply to in-
formation disclosed by manufacturers or whole-
salers under such section, except— 
‘‘(i) that any reference to ‘this sec-
tion’ in clause (i) of such subparagraph 
shall be treated as being a reference to this 
section; 
‘‘(ii) the reference to the Director of 
the Congressional Budget Office in clause 
(iii) of such subparagraph shall be treated 
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as including a reference to the Medicare 
Payment Advisory Commission; and 
‘‘(iii) clause (iv) of such subparagraph 
shall not apply. 
‘‘(E) OVERSIGHT.—Information reported 
under this paragraph may be used by the In-
spector General of the Department of Health 
and Human Services for the statutorily author-
ized purposes of audit, investigation, and eval-
uations. 
‘‘(F) PENALTIES
FOR
FAILURE
TO
PRO-
VIDE TIMELY INFORMATION AND PROVISION OF 
FALSE INFORMATION.—In the case of a PDP 
sponsor— 
‘‘(i) that fails to provide information 
required under subparagraph (B) on a 
timely basis, the sponsor is subject to a 
civil money penalty in the amount of 
$10,000 for each day in which such infor-
mation has not been provided; or 
‘‘(ii) that knowingly (as defined in 
section 1128A(i)) provides false informa-
tion under such subparagraph, the sponsor 
is subject to a civil money penalty in an 
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amount not to exceed $100,000 for each 
item of false information. 
Such civil money penalties are in addition to 
other penalties as may be prescribed by law. 
The provisions of section 1128A (other than 
subsections (a) and (b)) shall apply to a civil 
money penalty under this subparagraph in the 
same manner as such provisions apply to a pen-
alty or proceeding under section 1128A(a).’’. 
(B) 
APPLICATION
TO
MA
ORGANIZA-
TIONS.—Section 1857(f)(3) of the Social Secu-
rity Act (42 U.S.C. 1395w–27(f)(3)) is amend-
ed by adding at the end the following: 
‘‘(D) REPORTING REQUIREMENT RELATED 
TO REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG
PLAN
ENROLLEES.—Section 1860D– 
12(b)(7).’’. 
(3) DEPOSIT OF REBATES INTO MEDICARE PRE-
SCRIPTION DRUG ACCOUNT.—Section 1860D–16(c) 
of such Act (42 U.S.C. 1395w–116(c)) is amended 
by adding at the end the following new paragraph: 
‘‘(6) REBATE FOR REBATE ELIGIBLE MEDICARE 
DRUG PLAN ENROLLEES.—Amounts paid under a re-
bate agreement under section 1860D–2(f) shall be 
deposited into the Account and shall be used to pay 
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for all or part of the gradual elimination of the cov-
erage gap under section 1860D–2(b)(7).’’. 
SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN 
ORIGINAL COVERAGE GAP. 
Section 1860D–2 of the Social Security Act (42 
U.S.C. 1395w–102), as amended by section 1181, is 
amended— 
(1) in subsection (b)(4)(C)(ii), by inserting 
‘‘subject to subsection (g)(2)(C),’’ after ‘‘(ii)’’; 
(2) in subsection (e)(1), in the matter before 
subparagraph (A), by striking ‘‘subsection (f)’’ and 
inserting ‘‘subsections (f) and (g)’’ after ‘‘this sub-
section’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(g) REQUIREMENT FOR MANUFACTURER DISCOUNT 
AGREEMENT FOR CERTAIN QUALIFYING DRUGS.— 
‘‘(1) IN GENERAL.—In this part, the term ‘cov-
ered part D drug’ does not include any drug or bio-
logical product that is manufactured by a manufac-
turer that has not entered into and have in effect for 
all qualifying drugs (as defined in paragraph (5)(A)) 
a discount agreement described in paragraph (2). 
‘‘(2) DISCOUNT AGREEMENT.— 
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‘‘(A) PERIODIC
DISCOUNTS.—A discount 
agreement under this paragraph shall require 
the manufacturer involved to provide, to each 
PDP sponsor with respect to a prescription 
drug plan or each MA organization with respect 
to each MA–PD plan, a discount in an amount 
specified in paragraph (3) for qualifying drugs 
(as defined in paragraph (5)(A)) of the manu-
facturer dispensed to a qualifying enrollee after 
January 1, 2010, insofar as the individual is in 
the original gap in coverage (as defined in para-
graph (5)(E)). 
‘‘(B) DISCOUNT AGREEMENT.—Insofar as 
not inconsistent with this subsection, the Sec-
retary shall establish terms and conditions of 
such agreement, including terms and conditions 
relating to compliance, similar to the terms and 
conditions for rebate agreements under para-
graphs (2), (3), and (4) of section 1927(b), ex-
cept that— 
‘‘(i) discounts shall be applied under 
this subsection to prescription drug plans 
and MA–PD plans instead of State plans 
under title XIX; 
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‘‘(ii) PDP sponsors and MA organiza-
tions shall be responsible, instead of 
States, for provision of necessary utiliza-
tion information to drug manufacturers; 
and 
‘‘(iii) sponsors and MA organizations 
shall be responsible for reporting informa-
tion on drug-component negotiated price. 
‘‘(C) COUNTING DISCOUNT TOWARD TRUE 
OUT-OF-POCKET
COSTS.—Under the discount 
agreement, in applying subsection (b)(4), with 
regard to subparagraph (C)(i) of such sub-
section, if a qualified enrollee purchases the 
qualified drug insofar as the enrollee is in an 
actual gap of coverage (as defined in paragraph 
(5)(D)), the amount of the discount under the 
agreement shall be treated and counted as costs 
incurred by the plan enrollee. 
‘‘(3) DISCOUNT AMOUNT.—The amount of the 
discount specified in this paragraph for a discount 
period for a plan is equal to 50 percent of the 
amount of the drug-component negotiated price (as 
defined in paragraph (5)(C)) for qualifying drugs for 
the period involved. 
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‘‘(4) ADDITIONAL TERMS.—In the case of a dis-
count provided under this subsection with respect to 
a prescription drug plan offered by a PDP sponsor 
or an MA–PD plan offered by an MA organization, 
if a qualified enrollee purchases the qualified drug— 
‘‘(A) insofar as the enrollee is in an actual 
gap of coverage (as defined in paragraph 
(5)(D)), the sponsor or plan shall provide the 
discount to the enrollee at the time the enrollee 
pays for the drug; and 
‘‘(B) insofar as the enrollee is in the por-
tion of the original gap in coverage (as defined 
in paragraph (5)(E)) that is not in the actual 
gap in coverage, the discount shall not be ap-
plied against the negotiated price (as defined in 
subsection (d)(1)(B)) for the purpose of calcu-
lating the beneficiary payment. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) 
QUALIFYING
DRUG.—The 
term 
‘qualifying drug’ means, with respect to a pre-
scription drug plan or MA–PD plan, a drug or 
biological product that— 
‘‘(i)(I) is a drug produced or distrib-
uted under an original new drug applica-
tion approved by the Food and Drug Ad-
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ministration, including a drug product 
marketed by any cross-licensed producers 
or distributors operating under the new 
drug application; 
‘‘(II) is a drug that was originally 
marketed under an original new drug ap-
plication approved by the Food and Drug 
Administration; or 
‘‘(III) is a biological product as ap-
proved under Section 351(a) of the Public 
Health Services Act; 
‘‘(ii) is covered under the formulary of 
the plan or is treated as covered under the 
formulary of the plan as a result of a cov-
erage determination or appeal under sub-
section (g) or (h) of section 1860D–4; and 
‘‘(iii) is dispensed to an individual 
who is in the original gap in coverage. 
‘‘(B) QUALIFYING ENROLLEE.—The term 
‘qualifying enrollee’ means an individual en-
rolled in a prescription drug plan or MA–PD 
plan other than such an individual who is a 
subsidy-eligible individual (as defined in section 
1860D–14(a)(3)). 
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‘‘(C) 
DRUG-COMPONENT
NEGOTIATED 
PRICE.—The term ‘drug-component negotiated 
price’ means, with respect to a qualifying drug, 
the negotiated price (as defined in section 
423.100 of title 42, Code of Federal Regula-
tions, as in effect on the date of enactment of 
this subsection), as determined without regard 
to any dispensing fee, of the drug under the 
prescription drug plan or MA–PD plan in-
volved. 
‘‘(D) ACTUAL
GAP
IN
COVERAGE.—The 
term ‘actual gap in coverage’ means the gap in 
prescription drug coverage that occurs between 
the initial coverage limit (as modified under 
paragraph (7) and subparagraph (B) of para-
graph (8) of subsection (b)) and the annual 
out-of-pocket threshold (as modified under sub-
paragraph (C) of such subsection). 
‘‘(E) ORIGINAL GAP IN COVERAGE.—The 
term ‘original in gap coverage’ means the gap 
in prescription drug coverage that would occur 
between the initial coverage limit (described in 
subsection (b)(3)) and the out-of-pocket thresh-
old (as defined in subsection (b)(4)(B)) if sub-
sections (b)(7) and (b)(8) did not apply. 
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‘‘(6) SPECIAL RULE FOR 2010.—For the period 
beginning January 1, 2010, and ending December 
31, 2010, the Secretary may— 
‘‘(A) enter into agreements with manufac-
turers to directly receive the discount amount 
described in paragraph (3); 
‘‘(B) collect the necessary information 
from prescription drug plans and MA-PD plans 
to calculate the discount amount described in 
such paragraph; and 
‘‘(C) provide the discount described in such 
paragraph to beneficiaries as close as prac-
ticable after the point of sale. 
‘‘(7) WAIVER.—Chapter 35 of title 44, United 
States Code, shall not apply to the requirements 
under this subsection for the period beginning on 
January 1, 2010, and ending on December 31, 
2010.’’. 
SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS-
SION OF CLAIMS BY PHARMACIES LOCATED 
IN OR CONTRACTING WITH LONG-TERM CARE 
FACILITIES. 
(a) PART D SUBMISSION.—Section 1860D–12(b) of 
the Social Security Act (42 U.S.C. 1395w–112(b)), as 
amended by section 172(a)(1) of Public Law 110–275, is 
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578 
amended by striking paragraph (5) and redesignating 
paragraph (6) and paragraph (7), as added by section 
1181(c)(2)(A), as paragraph (5) and paragraph (6), re-
spectively. 
(b) SUBMISSION
TO
MA–PD PLANS.—Section 
1857(f)(3) of the Social Security Act (42 U.S.C. 1395w- 
27(f)(3)), as added by section 171(b) of Public Law 110– 
275 and amended by section 172(a)(2) of such Public Law 
and section 1181 of this Act, is amended by striking sub-
paragraph (B) and redesignating subparagraphs (C) and 
(D) as subparagraphs (B) and (C) respectively. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply for contract years beginning with 
2010. 
SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS-
SISTANCE PROGRAMS AND INDIAN HEALTH 
SERVICE 
IN 
PROVIDING 
PRESCRIPTION 
DRUGS TOWARD THE ANNUAL OUT-OF-POCK-
ET THRESHOLD UNDER PART D. 
(a) IN GENERAL.—Section 1860D–2(b)(4)(C) of the 
Social Security Act (42 U.S.C. 1395w–102(b)(4)(C)) is 
amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii)— 
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(A) by striking ‘‘such costs shall be treated 
as incurred only if’’ and inserting ‘‘and subject 
to clause (iii), such costs shall be treated as in-
curred only if’’; 
(B) by striking ‘‘, under section 1860D– 
14, or under a State Pharmaceutical Assistance 
Program’’; and 
(C) by striking the period at the end and 
inserting ‘‘; and’’; and 
(3) by inserting after clause (ii) the following 
new clause: 
‘‘(iii) such costs shall be treated as in-
curred and shall not be considered to be 
reimbursed under clause (ii) if such costs 
are borne or paid— 
‘‘(I) under section 1860D–14; 
‘‘(II) under a State Pharma-
ceutical Assistance Program; 
‘‘(III) by the Indian Health Serv-
ice, an Indian tribe or tribal organiza-
tion, or an urban Indian organization 
(as defined in section 4 of the Indian 
Health Care Improvement Act); or 
‘‘(IV) under an AIDS Drug As-
sistance Program under part B of 
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580 
title XXVI of the Public Health Serv-
ice Act.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to costs incurred on or after 
January 1, 2011. 
SEC. 1185. NO MID-YEAR FORMULARY CHANGES PER-
MITTED. 
(a) IN GENERAL.—Section 1860D–4(b)(3)(E) of the 
Social Security Act (42 U.S.C. 1395w–104(b)(3)(E)) is 
amended— 
(1) in the heading, by inserting ‘‘; CERTAIN 
FORMULARY
CHANGES
ONLY
BEFORE
INITIATING 
MARKETING FOR A PLAN YEAR’’ after ‘‘STATUS OF 
DRUG’’; 
(2) by striking ‘‘Any removal’’ and inserting 
‘‘(i) NOTICE.—Any removal’’ with the same indenta-
tion as the clause added by paragraph (2); 
(3) by adding at the end the following new 
clause: 
‘‘(ii) CERTAIN
CHANGES
IN
FOR-
MULARY ONLY BEFORE INITIATING MAR-
KETING FOR A PLAN YEAR.—Any removal 
of a covered part D drug from a formulary 
used by a PDP sponsor of a prescription 
drug plan (or MA organization of a MA– 
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PD plan) or any other material change to 
the formulary so as to reduce the coverage 
(or increase the cost-sharing) of the drug 
under the plan for a plan year shall take 
effect by a date specified by the Secretary 
but no later than the start of plan mar-
keting activities for the plan year. In addi-
tion to any exceptions to the previous sen-
tence specified by the Secretary, the pre-
vious sentence shall not apply in the case 
that a drug is removed from the formulary 
of a plan because of a recall or withdrawal 
of the drug issued by the Food and Drug 
Administration, because the drug is re-
placed with a generic drug that is a thera-
peutic equivalent, or because of utilization 
management applied to— 
‘‘(I) a drug whose labeling in-
cludes a boxed warning required by 
the Food and Drug Administration 
under section 201.57(c)(1) of title 21, 
Code of Federal Regulations (or a 
successor regulation); or 
‘‘(II) a drug required under sub-
section (c)(2) of section 505–1 of the 
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Federal Food, Drug, and Cosmetic 
Act to have a Risk Evaluation and 
Management Strategy that includes 
elements under subsection (f) of such 
section.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to contract years beginning on 
or after January 1, 2011. 
SEC. 1186. NEGOTIATION OF LOWER COVERED PART D 
DRUG PRICES ON BEHALF OF MEDICARE 
BENEFICIARIES. 
(a) NEGOTIATION BY SECRETARY.—Section 1860D– 
11 of the Social Security Act (42 U.S.C. 1395w–111) is 
amended by striking subsection (i) (relating to noninter-
ference) and inserting the following: 
‘‘(i) NEGOTIATION OF LOWER DRUG PRICES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Secretary shall negotiate with 
pharmaceutical manufacturers the prices (including 
discounts, rebates, and other price concessions) that 
may be charged to PDP sponsors and MA organiza-
tions for covered part D drugs for part D eligible in-
dividuals who are enrolled under a prescription drug 
plan or under an MA-PD plan. 
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‘‘(2) 
NO
CHANGE
IN
RULES
FOR 
FORMULARIES.— 
‘‘(A) IN GENERAL.—Nothing in paragraph 
(1) shall be construed to authorize the Sec-
retary to establish or require a particular for-
mulary. 
‘‘(B) CONSTRUCTION.—Subparagraph (A) 
shall not be construed as affecting the Sec-
retary’s authority to ensure appropriate and 
adequate access to covered part D drugs under 
prescription drug plans and under MA-PD 
plans, including compliance of such plans with 
formulary requirements under section 1860D– 
4(b)(3). 
‘‘(3) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing the sponsor 
of a prescription drug plan, or an organization offer-
ing an MA-PD plan, from obtaining a discount or 
reduction of the price for a covered part D drug 
below the price negotiated under paragraph (1). 
‘‘(4) ANNUAL
REPORTS
TO
CONGRESS.—Not 
later than June 1, 2011, and annually thereafter, 
the Secretary shall submit to the Committees on 
Ways and Means, Energy and Commerce, and Over-
sight and Government Reform of the House of Rep-
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resentatives and the Committee on Finance of the 
Senate a report on negotiations conducted by the 
Secretary to achieve lower prices for Medicare bene-
ficiaries, and the prices and price discounts achieved 
by the Secretary as a result of such negotiations.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act and shall first apply to negotiations and 
prices for plan years beginning on January 1, 2011. 
SEC. 1187. ACCURATE DISPENSING IN LONG-TERM CARE 
FACILITIES. 
Section 1860D–4(c) of the Social Security Act (42 
U.S.C. 1395w–104(c)) is amended by adding at the end 
the following new paragraph: 
‘‘(3) REDUCTION OF WASTEFUL DISPENSING.— 
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after January 1, 2012, a PDP spon-
sor offering a prescription drug plan and MA 
organization offering a MA–PD plan under part 
C shall have in place the utilization manage-
ment techniques established under subpara-
graph (B). 
‘‘(B) 
REQUIREMENTS.—The 
Secretary 
shall establish utilization management tech-
niques, such as daily, weekly, or automated 
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dose dispensing, to apply to PDP sponsors and 
MA organizations to reduce the quantities of 
covered part D drugs dispensed to enrollees 
who are residing in long-term care facilities in 
order to reduce waste associated with unused 
medications. 
‘‘(C) CONSULTATION.—In establishing the 
requirements under subparagraph (A), the Sec-
retary shall consult with the Administrator of 
the Environmental Protection Agency, Adminis-
trator of the Food and Drug Administration, 
Administrator of the Drug Enforcement Admin-
istration, State Boards of Pharmacy, pharmacy 
and physician organizations, and other appro-
priate stakeholders to study and determine ad-
ditional methods for prescription drug plans to 
reduce waste associated with unused prescrip-
tion drugs.’’. 
SEC. 1188. FREE GENERIC FILL. 
(a) IN GENERAL.—Section 1128A(i)(6) of the Social 
Security Act (42 U.S.C. 1320a–7a(i)(6)) is amended— 
(1) in subparagraph (C), by striking ‘‘of 1996’’ 
and all that follows and inserting ‘‘of 1996;’’; 
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(2) in the first subparagraph (D), by striking 
‘‘promulgated’’ and all that follows and inserting 
‘‘promulgated;’’; 
(3) by redesignating the second subparagraph 
(D) as a subparagraph (E) and by striking the pe-
riod at the end of such subparagraph and inserting 
‘‘; and’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(F) with regard to a prescription drug 
plan offered by a PDP sponsor or an MA–PD 
plan offered by an MA organization, a reduc-
tion in or waiver of the copayment amount 
under the plan given to an individual to induce 
the individual to switch to a generic, bioequiva-
lent drug, or biosimilar.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this subsection shall take effect on the date of the enact-
ment of this Act and shall first apply with respect to remu-
neration offered, paid, solicited, or received on or after 
January 1, 2011. 
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SEC. 1189. STATE CERTIFICATION PRIOR TO WAIVER OF LI-
CENSURE REQUIREMENTS UNDER MEDICARE 
PRESCRIPTION DRUG PROGRAM. 
(a) IN GENERAL.—Section 1860D–12(c) of the So-
cial Security Act (42 U.S.C. 1395w–112(c)) is amended— 
(1) in paragraph (1)(A), by striking ‘‘In the 
case’’ and inserting ‘‘Subject to paragraph (5), in 
the case’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) STATE CERTIFICATION REQUIRED.— 
‘‘(A) IN GENERAL.—Except as provided in 
section 1860D–21(f)(4), the Secretary may only 
grant a waiver under paragraph (1)(A) if the 
Secretary has received a certification from the 
State insurance commissioner that the prescrip-
tion drug plan has a substantially complete ap-
plication pending in the State. 
‘‘(B) REVOCATION OF WAIVER UPON FIND-
ING
OF
FRAUD
AND
ABUSE.—The Secretary 
shall revoke a waiver granted under paragraph 
(1)(A) if the State insurance commissioner sub-
mits a certification to the Secretary that the re-
cipient of such a waiver— 
‘‘(i) has committed fraud or abuse 
with respect to such waiver; 
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‘‘(ii) has failed to make a good faith 
effort to satisfy State licensing require-
ments; or 
‘‘(iii) was determined ineligible for li-
censure by the State.’’. 
(b) EXCEPTION
FOR PACE PROGRAMS.—Section 
1860D–21(f) of such Act (42 U.S.C. 1395w–131(f)) is 
amended— 
(1) in paragraph (1), by striking ‘‘paragraphs 
(2) and (3)’’ and inserting ‘‘the succeeding para-
graphs’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(4) INAPPLICABILITY OF CERTAIN LICENSURE 
WAIVER REQUIREMENTS.—The provisions of para-
graph (1) of section 1860D–12(c) (relating to waiver 
of licensure under certain circumstances) shall apply 
without regard to paragraph (5) of such section in 
the case of a PACE program that elects to provide 
qualified prescription drug coverage to a part D eli-
gible individual who is enrolled under such pro-
gram.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning on or after January 1, 2010. 
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Subtitle F—Medicare Rural Access 
Protections 
SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS. 
(a) ADDITIONAL TELEHEALTH SITE.— 
(1) IN GENERAL.—Paragraph (4)(C)(ii) of sec-
tion 1834(m) of the Social Security Act (42 U.S.C. 
1395m(m)) is amended by adding at the end the fol-
lowing new subclause: 
‘‘(IX) A renal dialysis facility.’’ 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to services furnished on 
or after January 1, 2011. 
(b) TELEHEALTH ADVISORY COMMITTEE.— 
(1) ESTABLISHMENT.—Section 1868 of the So-
cial Security Act (42 U.S.C. 1395ee) is amended— 
(A) in the heading, by adding at the end 
the following: ‘‘TELEHEALTH
ADVISORY
COM-
MITTEE’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(c) TELEHEALTH ADVISORY COMMITTEE.— 
‘‘(1) IN GENERAL.—The Secretary shall appoint 
a Telehealth Advisory Committee (in this subsection 
referred to as the ‘Advisory Committee’) to make 
recommendations to the Secretary on policies of the 
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Centers for Medicare & Medicaid Services regarding 
telehealth services as established under section 
1834(m), including the appropriate addition or dele-
tion of services (and HCPCS codes) to those speci-
fied in paragraphs (4)(F)(i) and (4)(F)(ii) of such 
section and for authorized payment under paragraph 
(1) of such section. 
‘‘(2) MEMBERSHIP; TERMS.— 
‘‘(A) MEMBERSHIP.— 
‘‘(i) 
IN
GENERAL.—The 
Advisory 
Committee shall be composed of 9 mem-
bers, to be appointed by the Secretary, of 
whom— 
‘‘(I) 5 shall be practicing physi-
cians; 
‘‘(II) 2 shall be practicing non- 
physician health care practitioners; 
and 
‘‘(III) 2 shall be administrators 
of telehealth programs. 
‘‘(ii) REQUIREMENTS
FOR
APPOINT-
ING MEMBERS.—In appointing members of 
the Advisory Committee, the Secretary 
shall— 
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591 
‘‘(I) ensure that each member 
has prior experience with the practice 
of telemedicine or telehealth; 
‘‘(II) give preference to individ-
uals who are currently providing tele-
medicine or telehealth services or who 
are involved in telemedicine or tele-
health programs; 
‘‘(III) ensure that the member-
ship of the Advisory Committee rep-
resents a balance of specialties and 
geographic regions; and 
‘‘(IV) take into account the rec-
ommendations of stakeholders. 
‘‘(B) TERMS.—The members of the Advi-
sory Committee shall serve for such term as the 
Secretary may specify. 
‘‘(C) CONFLICTS OF INTEREST.—An advi-
sory committee member may not participate 
with respect to a particular matter considered 
in an advisory committee meeting if such mem-
ber (or an immediate family member of such 
member) has a financial interest that could be 
affected by the advice given to the Secretary 
with respect to such matter. 
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592 
‘‘(3) MEETINGS.—The Advisory Committee 
shall meet twice each calendar year and at such 
other times as the Secretary may provide. 
‘‘(4) PERMANENT COMMITTEE.—Section 14 of 
the Federal Advisory Committee Act (5 U.S.C. 
App.) shall not apply to the Advisory Committee.’’ 
(2) FOLLOWING
RECOMMENDATIONS.—Section 
1834(m)(4)(F) 
of 
such 
Act 
(42 
U.S.C. 
1395m(m)(4)(F)) is amended by adding at the end 
the following new clause: 
‘‘(iii) RECOMMENDATIONS
OF
THE 
TELEHEALTH
ADVISORY
COMMITTEE.—In 
making determinations under clauses (i) 
and (ii), the Secretary shall take into ac-
count the recommendations of the Tele-
health Advisory Committee (established 
under section 1868(c)) when adding or de-
leting services (and HCPCS codes) and in 
establishing policies of the Centers for 
Medicare & Medicaid Services regarding 
the delivery of telehealth services. If the 
Secretary does not implement such a rec-
ommendation, the Secretary shall publish 
in the Federal Register a statement re-
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garding the reason such recommendation 
was not implemented.’’ 
(3) WAIVER
OF
ADMINISTRATIVE
LIMITA-
TION.—The Secretary of Health and Human Serv-
ices shall establish the Telehealth Advisory Com-
mittee under the amendment made by paragraph (1) 
notwithstanding any limitation that may apply to 
the number of advisory committees that may be es-
tablished (within the Department of Health and 
Human Services or otherwise). 
(c) HOSPITAL CREDENTIALING OF TELEMEDICINE 
PHYSICIANS AND PRACTITIONERS.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of the enactment of this Act, the Secretary 
of Health and Human Services shall issue guidance 
for hospitals (as defined in paragraph (4)) to sim-
plify requirements regarding compiling practitioner 
credentials for the purpose of rendering a medical 
staff privileging decision (under bylaws of the type 
described in section 1861(e)(3) of the Social Secu-
rity Act) for physicians and practitioners (as defined 
in paragraph (4)) delivering telehealth services that 
are furnished via a telecommunications system. 
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(2) 
FLEXIBILITY
IN
ACCEPTING 
CREDENTIALING BY ANOTHER MEDICARE PARTICI-
PATING HOSPITAL.— 
(A) IN
GENERAL.—Such guidance shall 
permit a hospital to accept credentialing pack-
ages compiled by another hospital participating 
under Medicare with regard to physicians and 
practitioners who seek medical staff privileges 
in the hospital to provide telehealth services via 
a telecommunications system from a site other 
than the hospital where the patient is located. 
(B) CONSTRUCTION.—Nothing in this sub-
section shall be construed to require a hospital 
to accept the credentialing package compiled by 
another facility. 
(C) NO OVERSIGHT REQUIRED.—If a hos-
pital does accept the credentialing materials 
prepared by another hospital, the hospital shall 
not be required to exercise oversight over the 
other hospital’s process for compiling and 
verifying credentials.
(D) PRIVILEGING.—This paragraph shall 
only apply to credentialing and does not relieve 
a hospital from any applicable privileging re-
quirements. 
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595 
(3) CONSTRUCTION.—This subsection shall not 
be construed as limiting the ability of the Secretary 
to issue additional guidance regarding the require-
ments for the compilation of credentials for physi-
cians and practitioners not described in paragraph 
(1). 
(4) DEFINITIONS.—In this subsection: 
(A) The term ‘‘hospital’’ has the meaning 
given such term in subsection (e) of section 
1861 of the Social Security Act (42 U.S.C. 
1395x) and includes a critical access hospital 
(as defined in subsection (mm)(1) of such sec-
tion). 
(B) The term ‘‘physician’’ has the meaning 
given such term in subsection (r) of such sec-
tion. 
(C) The term ‘‘practitioner’’ means a prac-
titioner described in section 1842(b)(18)(C) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395u(b)(18)(C)). 
SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS 
PROVISION. 
Section 1833(t)(7)(D)(i) of the Social Security Act 
(42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 
(1) in subclause (II)— 
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(A) in the first sentence, by striking 
‘‘‘2010’’ and inserting ‘‘2012’’; and 
(B) in the second sentence, by striking ‘‘or 
2009’’ and inserting ‘‘, 2009, 2010, or 2011’’; 
and 
(2) in subclause (III), by striking ‘‘January 1, 
2010’’ and inserting ‘‘January 1, 2012’’. 
SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS-
SIFICATIONS. 
(a) IN GENERAL.—Subsection (a) of section 106 of 
division B of the Tax Relief and Health Care Act of 2006 
(42 U.S.C. 1395 note), as amended by section 117 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173) and section 124 of the Medicare 
Improvements for Patients and Providers Act of 2008 
(Public Law 110–275), is amended by striking ‘‘Sep-
tember 30, 2009’’ and inserting ‘‘September 30, 2011’’. 
(b) USE OF PARTICULAR WAGE INDEX FOR FISCAL 
YEAR 2010.—For purposes of implementation of the 
amendment made by subsection (a) for fiscal year 2010, 
the Secretary shall use the hospital wage index that was 
promulgated by the Secretary in the Federal Register on 
August 27, 2009 (74 Fed. Reg. 43754), and any subse-
quent corrections. 
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SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK. 
Section 1848(e)(1)(E) of the Social Security Act (42 
U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before 
January 1, 2010’’ and inserting ‘‘before January 1, 
2012’’. 
SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM-
PONENT OF CERTAIN PHYSICIAN PATHOL-
OGY SERVICES. 
Section 542(c) of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 
(as enacted into law by section 1(a)(6) of Public Law 106– 
554), as amended by section 732 of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w–4 note), section 104 of division B of 
the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395w–4 note), section 104 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110– 
173), and section 136 of the Medicare Improvements for 
Patients and Providers Act of 1008 (Public Law 110– 
275), is amended by striking ‘‘and 2009’’ and inserting 
‘‘2009, 2010, and 2011’’. 
SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS. 
(a) IN GENERAL.—Section 1834(l)(13) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)) is amended— 
(1) in subparagraph (A)— 
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(A) in the matter preceding clause (i), by 
striking ‘‘before January 1, 2010’’ and insert-
ing ‘‘before January 1, 2012’’; and 
(B) in each of clauses (i) and (ii), by strik-
ing ‘‘before January 1, 2010’’ and inserting 
‘‘before January 1, 2012’’. 
(b) 
AIR
AMBULANCE
IMPROVEMENTS.—Section 
146(b)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110–275) is amended 
by striking ‘‘ending on December 31, 2009’’ and inserting 
‘‘ending on December 31, 2011’’. 
TITLE II—MEDICARE 
BENEFICIARY IMPROVEMENTS 
Subtitle A—Improving and Simpli-
fying Financial Assistance for 
Low 
Income 
Medicare 
Bene-
ficiaries 
SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV-
INGS PROGRAM AND LOW-INCOME SUBSIDY 
PROGRAM. 
(a) APPLICATION OF HIGHEST LEVEL PERMITTED 
UNDER LIS TO ALL SUBSIDY ELIGIBLE INDIVIDUALS.— 
(1) IN GENERAL.—Section 1860D–14(a)(1) of 
the Social Security Act (42 U.S.C. 1395w– 
114(a)(1)) is amended in the matter before subpara-
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graph (A), by inserting ‘‘(or, beginning with 2012, 
paragraph (3)(E))’’ after ‘‘paragraph (3)(D)’’. 
(2) ANNUAL
INCREASE
IN
LIS
RESOURCE 
TEST.—Section 1860D–14(a)(3)(E)(i) of such Act 
(42 U.S.C. 1395w–114(a)(3)(E)(i)) is amended— 
(A) by striking ‘‘and’’ at the end of sub-
clause (I); 
(B) in subclause (II), by inserting ‘‘(before 
2012)’’ after ‘‘subsequent year’’; 
(C) by striking the period at the end of 
subclause (II) and inserting a semicolon; 
(D) by inserting after subclause (II) the 
following new subclauses: 
‘‘(III) for 2012, $17,000 (or 
$34,000 in the case of the combined 
value of the individual’s assets or re-
sources and the assets or resources of 
the individual’s spouse); and 
‘‘(IV) for a subsequent year, the 
dollar amounts specified in this sub-
clause (or subclause (III)) for the pre-
vious year increased by the annual 
percentage increase in the consumer 
price index (all items; U.S. city aver-
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age) as of September of such previous 
year.’’; and 
(E) in the last sentence, by inserting ‘‘or 
(IV)’’ after ‘‘subclause (II)’’. 
(3) APPLICATION OF LIS TEST UNDER MEDI-
CARE SAVINGS PROGRAM.—Section 1905(p)(1)(C) of 
such Act (42 U.S.C. 1396d(p)(1)(C)) is amended— 
(A) by striking ‘‘effective beginning with 
January 1, 2010’’ and inserting ‘‘effective for 
the period beginning with January 1, 2010, and 
ending with December 31, 2011’’; and 
(B) by inserting before the period at the 
end the following: ‘‘or, effective beginning with 
January 1, 2012, whose resources (as so deter-
mined) do not exceed the maximum resource 
level applied for the year under subparagraph 
(E) of section 1860D–14(a)(3) (determined 
without regard to the life insurance policy ex-
clusion provided under subparagraph (G) of 
such section) applicable to an individual or to 
the individual and the individual’s spouse (as 
the case may be)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to eligibility determinations for 
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income-related subsidies and medicare cost-sharing fur-
nished for periods beginning on or after January 1, 2012. 
SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR 
CERTAIN 
NON-INSTITUTIONALIZED 
FULL- 
BENEFIT DUAL ELIGIBLE INDIVIDUALS. 
(a) IN GENERAL.—Section 1860D–14(a)(1)(D)(i) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
114(a)(1)(D)(i)) is amended— 
(1) by striking ‘‘INSTITUTIONALIZED INDIVID-
UALS.—In’’ and inserting ‘‘ELIMINATION OF COST- 
SHARING FOR CERTAIN FULL-BENEFIT DUAL ELIGI-
BLE INDIVIDUALS.— 
‘‘(I) INSTITUTIONALIZED
INDI-
VIDUALS.—In’’; and 
(2) by adding at the end the following new sub-
clause: 
‘‘(II) CERTAIN
OTHER
INDIVID-
UALS.—In the case of an individual 
who is a full-benefit dual eligible indi-
vidual and with respect to whom there 
has been a determination that but for 
the provision of home and community 
based care (whether under section 
1915, 1932, or under a waiver under 
section 1115) the individual would re-
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quire the level of care provided in a 
hospital or a nursing facility or inter-
mediate care facility for the mentally 
retarded the cost of which could be re-
imbursed under the State plan under 
title XIX, the elimination of any bene-
ficiary coinsurance described in sec-
tion 1860D–2(b)(2) (for all amounts 
through the total amount of expendi-
tures at which benefits are available 
under section 1860D–2(b)(4)).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to drugs dispensed on or after 
January 1, 2011. 
SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT. 
(a) ADMINISTRATIVE VERIFICATION OF INCOME AND 
RESOURCES UNDER
THE LOW-INCOME SUBSIDY PRO-
GRAM.— 
(1) IN
GENERAL.—Clause (iii) of section 
1860D–14(a)(3)(E) of the Social Security Act (42 
U.S.C. 1395w–114(a)(3)(E)) is amended to read as 
follows: 
‘‘(iii) CERTIFICATION OF INCOME AND 
RESOURCES.—For purposes of applying 
this section— 
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‘‘(I) an individual shall be per-
mitted to apply on the basis of self- 
certification of income and resources; 
and 
‘‘(II) matters attested to in the 
application shall be subject to appro-
priate methods of verification without 
the need of the individual to provide 
additional documentation, except in 
extraordinary situations as determined 
by the Commissioner.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply beginning January 1, 
2010. 
(b) DISCLOSURES TO FACILITATE IDENTIFICATION 
OF INDIVIDUALS LIKELY TO BE INELIGIBLE FOR THE 
LOW-INCOME ASSISTANCE UNDER THE MEDICARE PRE-
SCRIPTION DRUG PROGRAM TO ASSIST SOCIAL SECURITY 
ADMINISTRATION’S OUTREACH
TO ELIGIBLE INDIVID-
UALS.—For provision authorizing disclosure of return in-
formation to facilitate identification of individuals likely 
to be ineligible for low-income subsidies under Medicare 
prescription drug program, see section 1801. 
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SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIM-
BURSEMENTS FOR RETROACTIVE LOW IN-
COME SUBSIDY ENROLLMENT. 
(a) IN GENERAL.—In the case of a retroactive LIS 
enrollment beneficiary who is enrolled under a prescription 
drug plan under part D of title XVIII of the Social Secu-
rity Act (or an MA–PD plan under part C of such title), 
the beneficiary (or any eligible third party) is entitled to 
reimbursement by the plan for covered drug costs incurred 
by the beneficiary during the retroactive coverage period 
of the beneficiary in accordance with subsection (b) and 
in the case of such a beneficiary described in subsection 
(c)(4)(A)(i), such reimbursement shall be made automati-
cally by the plan upon receipt of appropriate notice the 
beneficiary is eligible for assistance described in such sub-
section (c)(4)(A)(i) without further information required 
to be filed with the plan by the beneficiary. 
(b) ADMINISTRATIVE REQUIREMENTS RELATING TO 
REIMBURSEMENTS.— 
(1) LINE-ITEM DESCRIPTION.—Each reimburse-
ment made by a prescription drug plan or MA–PD 
plan under subsection (a) shall include a line-item 
description of the items for which the reimbursement 
is made. 
(2) TIMING OF REIMBURSEMENTS.—A prescrip-
tion drug plan or MA–PD plan must make a reim-
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bursement under subsection (a) to a retroactive LIS 
enrollment beneficiary, with respect to a claim, not 
later than 45 days after— 
(A) in the case of a beneficiary described 
in subsection (c)(4)(A)(i), the date on which the 
plan receives notice from the Secretary that the 
beneficiary is eligible for assistance described in 
such subsection; or 
(B) in the case of a beneficiary described 
in subsection (c)(4)(A)(ii), the date on which 
the beneficiary files the claim with the plan. 
(3) 
REPORTING
REQUIREMENT.—For 
each 
month beginning with January 2011, each prescrip-
tion drug plan and each MA–PD plan shall report 
to the Secretary the following: 
(A) The number of claims the plan has re-
adjudicated during the month due to a bene-
ficiary becoming retroactively eligible for sub-
sidies available under section 1860D–14 of the 
Social Security Act. 
(B) The total value of the readjudicated 
claim amount for the month. 
(C) The Medicare Health Insurance Claims 
Number of beneficiaries for whom claims were 
readjudicated. 
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(D) For the claims described in subpara-
graphs (A) and (B), an attestation to the Ad-
ministrator of the Centers for Medicare & Med-
icaid Services of the total amount of reimburse-
ment the plan has provided to beneficiaries for 
premiums and cost-sharing that the beneficiary 
overpaid for which the plan received payment 
from the Centers for Medicare & Medicaid Serv-
ices. 
(c) DEFINITIONS.—For purposes of this section: 
(1) COVERED DRUG COSTS.—The term ‘‘cov-
ered drug costs’’ means, with respect to a retroactive 
LIS enrollment beneficiary enrolled under a pre-
scription drug plan under part D of title XVIII of 
the Social Security Act (or an MA–PD plan under 
part C of such title), the amount by which— 
(A) the costs incurred by such beneficiary 
during the retroactive coverage period of the 
beneficiary for covered part D drugs, premiums, 
and cost-sharing under such title; exceeds 
(B) such costs that would have been in-
curred by such beneficiary during such period if 
the beneficiary had been both enrolled in the 
plan and recognized by such plan as qualified 
during such period for the low income subsidy 
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under section 1860D–14 of the Social Security 
Act to which the individual is entitled. 
(2) ELIGIBLE THIRD PARTY.—The term ‘‘eligi-
ble third party’’ means, with respect to a retroactive 
LIS enrollment beneficiary, an organization or other 
third party that is owed payment on behalf of such 
beneficiary for covered drug costs incurred by such 
beneficiary during the retroactive coverage period of 
such beneficiary. 
(3) RETROACTIVE
COVERAGE
PERIOD.—The 
term ‘‘retroactive coverage period’’ means— 
(A) with respect to a retroactive LIS en-
rollment beneficiary described in paragraph 
(4)(A)(i), the period— 
(i) beginning on the effective date of 
the assistance described in such paragraph 
for which the individual is eligible; and 
(ii) ending on the date the plan effec-
tuates the status of such individual as so 
eligible; and 
(B) with respect to a retroactive LIS en-
rollment beneficiary described in paragraph 
(4)(A)(ii), the period— 
(i) beginning on the date the indi-
vidual is both entitled to benefits under 
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part A, or enrolled under part B, of title 
XVIII of the Social Security Act and eligi-
ble for medical assistance under a State 
plan under title XIX of such Act; and 
(ii) ending on the date the plan effec-
tuates the status of such individual as a 
full-benefit dual eligible individual (as de-
fined in section 1935(c)(6) of such Act). 
(4) RETROACTIVE
LIS
ENROLLMENT
BENE-
FICIARY.— 
(A) IN GENERAL.—The term ‘‘retroactive 
LIS enrollment beneficiary’’ means an indi-
vidual who— 
(i) is enrolled in a prescription drug 
plan under part D of title XVIII of the So-
cial Security Act (or an MA–PD plan 
under part C of such title) and subse-
quently becomes eligible as a full-benefit 
dual eligible individual (as defined in sec-
tion 1935(c)(6) of such Act), an individual 
receiving a low-income subsidy under sec-
tion 1860D–14 of such Act, an individual 
receiving assistance under the Medicare 
Savings 
Program 
implemented 
under 
clauses (i), (iii), and (iv) of section 
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1902(a)(10)(E) of such Act, or an indi-
vidual receiving assistance under the sup-
plemental security income program under 
section 1611 of such Act; or 
(ii) subject to subparagraph (B)(i), is 
a full-benefit dual eligible individual (as 
defined in section 1935(c)(6) of such Act) 
who is automatically enrolled in such a 
plan under section 1860D–1(b)(1)(C) of 
such Act. 
(B) EXCEPTION FOR BENEFICIARIES EN-
ROLLED IN RFP PLAN.— 
(i) IN GENERAL.—In no case shall an 
individual 
described 
in 
subparagraph 
(A)(ii) include an individual who is en-
rolled, pursuant to a RFP contract de-
scribed in clause (ii), in a prescription 
drug plan offered by the sponsor of such 
plan awarded such contract. 
(ii) RFP CONTRACT
DESCRIBED.— 
The RFP contract described in this section 
is a contract entered into between the Sec-
retary and a sponsor of a prescription drug 
plan pursuant to the Centers for Medicare 
& Medicaid Services’ request for proposals 
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issued on February 17, 2009, relating to 
Medicare part D retroactive coverage for 
certain low income beneficiaries, or a simi-
lar subsequent request for proposals. 
SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT. 
(a) IN GENERAL.—Section 1860D–1(b)(1)(C) of the 
Social Security Act (42 U.S.C. 1395w–101(b)(1)(C)) is 
amended by adding after ‘‘PDP region’’ the following: ‘‘or 
through use of an intelligent assignment process that is 
designed to maximize the access of such individual to nec-
essary prescription drugs while minimizing costs to such 
individual and to the program under this part to the great-
est extent possible. In the case the Secretary enrolls such 
individuals through use of an intelligent assignment proc-
ess, such process shall take into account the extent to 
which prescription drugs necessary for the individual are 
covered in the case of a PDP sponsor of a prescription 
drug plan that uses a formulary, the use of prior author-
ization or other restrictions on access to coverage of such 
prescription drugs by such a sponsor, and the overall qual-
ity of a prescription drug plan as measured by quality rat-
ings established by the Secretary’’ 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect for contract years begin-
ning with 2012. 
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SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC 
ENROLLMENT PROCESS FOR CERTAIN SUB-
SIDY ELIGIBLE INDIVIDUALS. 
(a) 
SPECIAL
ENROLLMENT
PERIOD.—Section 
1860D–1(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395w–101(b)(3)(D)) is amended to read as follows: 
‘‘(D) SUBSIDY
ELIGIBLE
INDIVIDUALS.— 
In the case of an individual (as determined by 
the Secretary) who is determined under sub-
paragraph (B) of section 1860D–14(a)(3) to be 
a subsidy eligible individual.’’. 
(b) AUTOMATIC
ENROLLMENT.—Section 1860D– 
1(b)(1) of the Social Security Act (42 U.S.C. 1395w– 
101(b)(1)) is amended by adding at the end the following 
new subparagraph: 
‘‘(D) SPECIAL RULE FOR SUBSIDY ELIGI-
BLE
INDIVIDUALS.—The process established 
under subparagraph (A) shall include, in the 
case of an individual described in section 
1860D–1(b)(3)(D) who fails to enroll in a pre-
scription drug plan or an MA–PD plan during 
the special enrollment established under such 
section applicable to such individual, the appli-
cation of the assignment process described in 
subparagraph (C) to such individual in the 
same manner as such assignment process ap-
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plies to a part D eligible individual described in 
such subparagraph (C). Nothing in the previous 
sentence shall prevent an individual described in 
such sentence from declining enrollment in a 
plan determined appropriate by the Secretary 
(or in the program under this part) or from 
changing such enrollment.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to subsidy determinations made 
for months beginning with January 2011. 
SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO RE-
BATE AND QUALITY BONUS PAYMENTS IN 
CALCULATION OF LOW INCOME SUBSIDY 
BENCHMARK. 
(a) IN GENERAL.—Section 1860D–14(b)(2)(B)(iii) 
of the Social Security Act (42 U.S.C. 1395w– 
114(b)(2)(B)(iii)) is amended by inserting before the pe-
riod the following: ‘‘before the application of the monthly 
rebate computed under section 1854(b)(1)(C)(i) for that 
plan and year involved and, in the case of a qualifying 
plan in a qualifying county, before the application of the 
increase under section 1853(o) for that plan and year in-
volved’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to subsidy determinations made 
for months beginning with January 2011. 
Subtitle B—Reducing Health 
Disparities 
SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN 
MEDICARE. 
(a) ENSURING EFFECTIVE COMMUNICATION BY THE 
CENTERS FOR MEDICARE & MEDICAID SERVICES.— 
(1) STUDY ON MEDICARE PAYMENTS FOR LAN-
GUAGE
SERVICES.—The Secretary of Health and 
Human Services shall conduct a study that examines 
the extent to which Medicare service providers uti-
lize, offer, or make available language services for 
beneficiaries who are limited English proficient and 
ways that Medicare should develop payment systems 
for language services. 
(2) ANALYSES.—The study shall include an 
analysis of each of the following: 
(A) How to develop and structure appro-
priate payment systems for language services 
for all Medicare service providers. 
(B) The feasibility of adopting a payment 
methodology for on-site interpreters, including 
interpreters who work as independent contrac-
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tors and interpreters who work for agencies 
that provide on-site interpretation, pursuant to 
which such interpreters could directly bill Medi-
care for services provided in support of physi-
cian office services for an LEP Medicare pa-
tient. 
(C) The feasibility of Medicare contracting 
directly with agencies that provide off-site inter-
pretation including telephonic and video inter-
pretation pursuant to which such contractors 
could directly bill Medicare for the services pro-
vided in support of physician office services for 
an LEP Medicare patient. 
(D) The feasibility of modifying the exist-
ing Medicare resource-based relative value scale 
(RBRVS) by using adjustments (such as multi-
pliers or add-ons) when a patient is LEP. 
(E) How each of options described in a 
previous paragraph would be funded and how 
such funding would affect physician payments, 
a physician’s practice, and beneficiary cost- 
sharing. 
(F) The extent to which providers under 
parts A and B of title XVIII of the Social Secu-
rity Act, MA organizations offering Medicare 
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Advantage plans under part C of such title and 
PDP sponsors of a prescription drug plan 
under part D of such title utilize, offer, or make 
available language services for beneficiaries with 
limited English proficiency. 
(G) The nature and type of language serv-
ices provided by States under title XIX of the 
Social Security Act and the extent to which 
such services could be utilized by beneficiaries 
and providers under title XVIII of such Act. 
(H) The extent to which interpreters and 
translators providing services to Medicare bene-
ficiaries under title XVIII of such Act are 
trained or accredited. 
(3) VARIATION
IN
PAYMENT
SYSTEM
DE-
SCRIBED.—The payment systems described in para-
graph (2)(A) may allow variations based upon types 
of service providers, available delivery methods, and 
costs for providing language services including such 
factors as— 
(A) the type of language services provided 
(such as provision of health care or health care 
related services directly in a non-English lan-
guage by a bilingual provider or use of an inter-
preter); 
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(B) type of interpretation services provided 
(such as in-person, telephonic, video interpreta-
tion); 
(C) the methods and costs of providing 
language services (including the costs of pro-
viding language services with internal staff or 
through contract with external independent con-
tractors or agencies, or both); 
(D) providing services for languages not 
frequently encountered in the United States; 
and 
(E) providing services in rural areas. 
(4) REPORT.—The Secretary shall submit a re-
port on the study conducted under subsection (a) to 
appropriate committees of Congress not later than 
12 months after the date of the enactment of this 
Act. 
(5) EXEMPTION FROM PAPERWORK REDUCTION 
ACT.—Chapter 35 of title 44, United States Code 
(commonly known as the ‘‘Paperwork Reduction 
Act’’ ), shall not apply for purposes of carrying out 
this subsection. 
(6) AUTHORIZATION
OF
APPROPRIATIONS.— 
The Secretary shall provide for the transfer, from 
the Federal Supplementary Medical Insurance Trust 
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Fund under section 1841 of the Social Security Act 
(42 U.S.C. 1395t) of $2,000,000 for purposes of 
carrying out this subsection. 
(b) HEALTH PLANS.—Section 1857(g)(1) of the So-
cial Security Act (42 U.S.C. 1395w–27(g)(1)) is amend-
ed— 
(1) by striking ‘‘or’’ at the end of subparagraph 
(F); 
(2) by adding ‘‘or’’ at the end of subparagraph 
(G); and 
(3) by inserting after subparagraph (G) the fol-
lowing new subparagraph: 
‘‘(H) fails substantially to provide lan-
guage services to limited English proficient 
beneficiaries enrolled in the plan that are re-
quired under law;’’. 
SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR 
MEDICARE BENEFICIARIES WITH LIMITED 
ENGLISH PROFICIENCY BY PROVIDING REIM-
BURSEMENT FOR CULTURALLY AND LINGUIS-
TICALLY APPROPRIATE SERVICES. 
(a) IN GENERAL.—Not later than 6 months after the 
date of the completion of the study described in section 
1221(a) of this Act, the Secretary, acting through the 
Centers for Medicare & Medicaid Services and the Center 
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for Medicare and Medicaid Innovation established under 
section 1115A of the Social Security Act (as added by sec-
tion 1907) and consistent with the applicable provisions 
of such section, shall carry out a demonstration program 
under which the Secretary shall award not fewer than 24 
3-year grants to eligible Medicare service providers (as de-
scribed in subsection (b)(1)) to improve effective commu-
nication between such providers and Medicare bene-
ficiaries who are living in communities where racial and 
ethnic minorities, including populations that face language 
barriers, are underserved with respect to such services. In 
designing and carrying out the demonstration the Sec-
retary shall take into consideration the results of the study 
conducted under section 1221(a) of this Act and adjust, 
as appropriate, the distribution of grants so as to better 
target Medicare beneficiaries who are in the greatest need 
of language services. The Secretary shall not authorize a 
grant larger than $500,000 over three years for any grant-
ee. 
(b) ELIGIBILITY; PRIORITY.— 
(1) ELIGIBILITY.—To be eligible to receive a 
grant under subsection (a) an entity shall— 
(A) be— 
(i) a provider of services under part A 
of title XVIII of the Social Security Act; 
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(ii) a service provider under part B of 
such title; 
(iii) a part C organization offering a 
Medicare part C plan under part C of such 
title; or 
(iv) a PDP sponsor of a prescription 
drug plan under part D of such title; and 
(B) prepare and submit to the Secretary 
an application, at such time, in such manner, 
and accompanied by such additional informa-
tion as the Secretary may require. 
(2) PRIORITY.— 
(A) DISTRIBUTION.—To the extent fea-
sible, in awarding grants under this section, the 
Secretary shall award— 
(i) at least 6 grants to providers of 
services described in paragraph (1)(A)(i); 
(ii) at least 6 grants to service pro-
viders described in paragraph (1)(A)(ii); 
(iii) at least 6 grants to organizations 
described in paragraph (1)(A)(iii); and 
(iv) at least 6 grants to sponsors de-
scribed in paragraph (1)(A)(iv). 
(B) FOR
COMMUNITY
ORGANIZATIONS.— 
The Secretary shall give priority to applicants 
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that have developed partnerships with commu-
nity organizations or with agencies with experi-
ence in language access. 
(C) VARIATION IN GRANTEES.—The Sec-
retary shall also ensure that the grantees under 
this section represent, among other factors— 
(i) different types of language services 
provided and of service providers and orga-
nizations under parts A through D of title 
XVIII of the Social Security Act; 
(ii) variations in languages needed 
and their frequency of use; 
(iii) urban and rural settings; 
(iv) at least two geographic regions, 
as defined by the Secretary; and 
(v) at least two large metropolitan 
statistical areas with diverse populations. 
(c) USE OF FUNDS.— 
(1) IN GENERAL.—A grantee shall use grant 
funds received under this section to pay for the pro-
vision of competent language services to Medicare 
beneficiaries who are limited English proficient. 
Competent interpreter services may be provided 
through on-site interpretation, telephonic interpreta-
tion, or video interpretation or direct provision of 
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health care or health care related services by a bilin-
gual health care provider. A grantee may use bilin-
gual providers, staff, or contract interpreters. A 
grantee may use grant funds to pay for competent 
translation services. A grantee may use up to 10 
percent of the grant funds to pay for administrative 
costs associated with the provision of competent lan-
guage services and for reporting required under sub-
section (e). 
(2) ORGANIZATIONS.—Grantees that are part C 
organizations or PDP sponsors must ensure that 
their network providers receive at least 50 percent of 
the grant funds to pay for the provision of com-
petent language services to Medicare beneficiaries 
who are limited English proficient, including physi-
cians and pharmacies. 
(3) DETERMINATION OF PAYMENTS FOR LAN-
GUAGE SERVICES.—Payments to grantees shall be 
calculated based on the estimated numbers of lim-
ited English proficient Medicare beneficiaries in a 
grantee’s service area utilizing— 
(A) data on the numbers of limited 
English 
proficient 
individuals 
who 
speak 
English less than ‘‘very well’’ from the most re-
cently available data from the Bureau of the 
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Census or other State-based study the Sec-
retary determines likely to yield accurate data 
regarding the number of such individuals served 
by the grantee; or 
(B) the grantee’s own data if the grantee 
routinely collects data on Medicare bene-
ficiaries’ primary language in a manner deter-
mined by the Secretary to yield accurate data 
and such data shows greater numbers of limited 
English proficient individuals than the data list-
ed in subparagraph (A). 
(4) LIMITATIONS.— 
(A) REPORTING.—Payments shall only be 
provided under this section to grantees that re-
port their costs of providing language services 
as required under subsection (e) and may be 
modified annually at the discretion of the Sec-
retary. If a grantee fails to provide the reports 
under such section for the first year of a grant, 
the Secretary may terminate the grant and so-
licit applications from new grantees to partici-
pate in the subsequent two years of the dem-
onstration program. 
(B) TYPE OF SERVICES.— 
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(i) IN
GENERAL.—Subject to clause 
(ii), payments shall be provided under this 
section only to grantees that utilize com-
petent bilingual staff or competent inter-
preter or translation services which— 
(I) if the grantee operates in a 
State that has statewide health care 
interpreter standards, meet the State 
standards currently in effect; or 
(II) if the grantee operates in a 
State that does not have statewide 
health care interpreter standards, uti-
lizes competent interpreters who fol-
low the National Council on Inter-
preting in Health Care’s Code of Eth-
ics and Standards of Practice. 
(ii) EXEMPTIONS.—The requirements 
of clause (i) shall not apply— 
(I) in the case of a Medicare ben-
eficiary who is limited English pro-
ficient (who has been informed in the 
beneficiary’s primary language of the 
availability of free interpreter and 
translation services) and who requests 
the use of family, friends, or other 
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persons untrained in interpretation or 
translation and the grantee documents 
the request in the beneficiary’s record; 
and 
(II) in the case of a medical 
emergency where the delay directly as-
sociated with obtaining a competent 
interpreter or translation services 
would jeopardize the health of the pa-
tient. 
Nothing in clause (ii)(II) shall be con-
strued to exempt emergency rooms or simi-
lar entities that regularly provide health 
care services in medical emergencies from 
having in place systems to provide com-
petent interpreter and translation services 
without undue delay. 
(d) ASSURANCES.—Grantees under this section 
shall— 
(1) ensure that appropriate clinical and support 
staff receive ongoing education and training in lin-
guistically appropriate service delivery; 
(2) ensure the linguistic competence of bilingual 
providers; 
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(3) offer and provide appropriate language serv-
ices at no additional charge to each patient with lim-
ited English proficiency at all points of contact, in 
a timely manner during all hours of operation; 
(4) notify Medicare beneficiaries of their right 
to receive language services in their primary lan-
guage; 
(5) post signage in the languages of the com-
monly encountered group or groups present in the 
service area of the organization; and 
(6) ensure that— 
(A) primary language data are collected 
for recipients of language services and are con-
sistent with standards developed under section 
1709(b)(3)(B)(iv) of the Public Health Service 
Act, as added by section 2402 of this Act, to 
the extent such standards are available upon 
the initiation of the demonstration; and 
(B) consistent with the privacy protections 
provided under the regulations promulgated 
pursuant to section 264(c) of the Health Insur-
ance Portability and Accountability Act of 1996 
(42 U.S.C. 1320d–2 note), if the recipient of 
language services is a minor or is incapacitated, 
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the primary language of the parent or legal 
guardian is collected and utilized. 
(e) REPORTING REQUIREMENTS.—Grantees under 
this section shall provide the Secretary with reports at the 
conclusion of the each year of a grant under this section. 
Each report shall include at least the following informa-
tion: 
(1) The number of Medicare beneficiaries to 
whom language services are provided. 
(2) The languages of those Medicare bene-
ficiaries. 
(3) The types of language services provided 
(such as provision of services directly in non-English 
language by a bilingual health care provider or use 
of an interpreter). 
(4) Type of interpretation (such as in-person, 
telephonic, or video interpretation). 
(5) The methods of providing language services 
(such as staff or contract with external independent 
contractors or agencies). 
(6) The length of time for each interpretation 
encounter. 
(7) The costs of providing language services 
(which may be actual or estimated, as determined by 
the Secretary). 
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(8) An account of the training or accreditation 
of bilingual staff, interpreters, or translators pro-
viding services under this demonstration. 
(f) NO COST SHARING.—Limited English proficient 
Medicare beneficiaries shall not have to pay cost-sharing 
or co-pays for language services provided through this 
demonstration program. 
(g) EVALUATION AND REPORT.—The Secretary shall 
conduct an evaluation of the demonstration program 
under this section and shall submit to the appropriate 
committees of Congress a report not later than 1 year 
after the completion of the program. The report shall in-
clude the following: 
(1) An analysis of the patient outcomes and 
costs of furnishing care to the limited English pro-
ficient Medicare beneficiaries participating in the 
project as compared to such outcomes and costs for 
limited English proficient Medicare beneficiaries not 
participating. 
(2) The effect of delivering culturally and lin-
guistically appropriate services on beneficiary access 
to care, utilization of services, efficiency and cost-ef-
fectiveness of health care delivery, patient satisfac-
tion, and select health outcomes. 
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(3) The extent to which bilingual staff, inter-
preters, and translators providing services under 
such demonstration were trained or accredited and 
the nature of accreditation or training needed by 
type of provider, service, or other category as deter-
mined by the Secretary to ensure the provision of 
high-quality interpretation, translation, or other lan-
guage services to Medicare beneficiaries if such serv-
ices are expanded pursuant to subsection (c) of sec-
tion 1907 of this Act. 
(4) Recommendations, if any, regarding the ex-
tension of such project to the entire Medicare pro-
gram. 
(h) ACCREDITATION OR TRAINING FOR PROVIDERS 
OF
INTERPRETATION, TRANSLATION
OR
LANGUAGE 
SERVICES IN MEDICARE.— 
(1) IN GENERAL.— 
(A) DESIGNATION OF STANDARDS.—If the 
Secretary, pursuant to section 1907(c) of this 
Act, expands the model initially developed 
through the demonstration program under this 
section, the Secretary shall use the results of 
the study under section 1221 and the dem-
onstration under this section to designate 
standards for training or accreditation.
The 
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Secretary may designate one or more
training 
or
accreditation organizations, as appropriate 
for the nature and type of interpretation and 
translation services provided to Medicare bene-
ficiaries to ensure that payments are made only 
for approved services by trained or accredited 
language services providers. 
(B) ALTERNATIVES TO TRAINING OR AC-
CREDITATION.—If the Secretary designates one 
or more
training or accreditation organiza-
tions but determines that accreditation is not 
available in all languages for which payments 
may be initiated, the Secretary shall provide 
payments for and accept alternatives to
train-
ing or
accreditation for certain languages, in-
cluding languages of lesser diffusion.
The Sec-
retary must ensure that the alternatives to
training or
accreditation provide, at a min-
imum— 
(i) a determination that the inter-
preter is proficient and able to commu-
nicate information accurately in both 
English and in the language for which in-
terpreting is needed; 
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(ii) an attestation from the interpreter 
to comply with and adhere to the role of 
an interpreter as defined by the National 
Code of Ethics and National Standards of 
Practice as published by the National 
Council on Interpreting in Health Care; 
and 
(iii) an attestation to adhere to 
HIPAA privacy and security law, as de-
fined in section 3009(a)(2) of the Public 
Health Service Act, to the same extent as 
the healthcare provider for whom inter-
preting is provided. 
(C) MODIFIERS, ADD-ONS, AND
OTHER 
FORMS OF PAYMENT.—If the Secretary decides 
that modifiers, add-ons, or other forms of pay-
ment may be made for the provision of services 
directly by bilingual providers, the Secretary 
shall designate standards to ensure the com-
petency of such providers delivering such serv-
ices in a non-English language. 
(2) CONSULTATION WITH STAKEHOLDERS AND 
CONSIDERATIONS
FOR
ACCREDITATION
OR
TRAIN-
ING.— 
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(A) CONSULTATION.—In designating ac-
creditation or training requirements under this 
subsection, the Secretary shall consult with pa-
tients, providers, organizations that advocate on 
behalf of limited English proficient individuals, 
and other individuals or entities determined ap-
propriate by the Secretary. 
(B) CONSIDERATIONS.—In designating ac-
creditation or training requirements under this 
section, the Secretary shall consider, as appro-
priate— 
(i) standards for qualifications of 
health care interpreters who interpret in-
frequently encountered languages; 
(ii) standards for qualifications of 
health care interpreters who interpret in 
languages of lesser diffusion; 
(iii) standards for training of inter-
preters;
and
(iv) standards for continuing edu-
cation of interpreters. 
(i) GENERAL PROVISIONS.—Nothing in this section 
shall be construed to limit otherwise existing obligations 
of recipients of Federal financial assistance under title VI 
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of the Civil Rights Act of 1964 (42 U.S.C. 2000(d) et 
seq.) or any other statute. 
(j) APPROPRIATIONS.—There are appropriated to 
carry out this section, in equal parts from the Federal 
Hospital Insurance Trust Fund and the Federal Supple-
mentary Medical Insurance Trust Fund, $16,000,000 for 
each fiscal year of the demonstration program. 
SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS 
SERVICES. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services shall enter into an arrangement with the 
Institute of Medicine under which the Institute will pre-
pare and publish, not later than 3 years after the date 
of the enactment of this Act, a report on the impact of 
language access services on the health and health care of 
limited English proficient populations. 
(b) CONTENTS.—Such report shall include— 
(1) recommendations on the development and 
implementation of policies and practices by health 
care organizations and providers for limited English 
proficient patient populations; 
(2) a description of the effect of providing lan-
guage access services on quality of health care and 
access to care and reduced medical error; and 
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(3) a description of the costs associated with or 
savings related to provision of language access serv-
ices. 
SEC. 1224. DEFINITIONS. 
In this subtitle: 
(1) BILINGUAL.—The term ‘‘bilingual’’ with re-
spect to an individual means a person who has suffi-
cient degree of proficiency in two languages and can 
ensure effective communication can occur in both 
languages. 
(2) COMPETENT INTERPRETER SERVICES.—The 
term ‘‘competent interpreter services’’ means a 
trans-language rendition of a spoken message in 
which the interpreter comprehends the source lan-
guage and can speak comprehensively in the target 
language to convey the meaning intended in the 
source language. The interpreter knows health and 
health-related terminology and provides accurate in-
terpretations by choosing equivalent expressions that 
convey the best matching and meaning to the source 
language and captures, to the greatest possible ex-
tent, all nuances intended in the source message. 
(3) COMPETENT TRANSLATION SERVICES.—The 
term ‘‘competent translation services’’ means a 
trans-language rendition of a written document in 
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which the translator comprehends the source lan-
guage and can write comprehensively in the target 
language to convey the meaning intended in the 
source language. The translator knows health and 
health-related terminology and provides accurate 
translations by choosing equivalent expressions that 
convey the best matching and meaning to the source 
language and captures, to the greatest possible ex-
tent, all nuances intended in the source document. 
(4) EFFECTIVE
COMMUNICATION.—The term 
‘‘effective communication’’ means an exchange of in-
formation between the provider of health care or 
health care-related services and the limited English 
proficient recipient of such services that enables lim-
ited English proficient individuals to access, under-
stand, and benefit from health care or health care- 
related services. 
(5) 
INTERPRETING/INTERPRETATION.—The 
terms ‘‘interpreting’’ and ‘‘interpretation’’ mean the 
transmission of a spoken message from one language 
into another, faithfully, accurately, and objectively. 
(6) 
HEALTH
CARE
SERVICES.—The 
term 
‘‘health care services’’ means services that address 
physical as well as mental health conditions in all 
care settings. 
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(7) HEALTH
CARE-RELATED
SERVICES.—The 
term ‘‘health care-related services’’ means human or 
social services programs or activities that provide ac-
cess, referrals or links to health care. 
(8) LANGUAGE ACCESS.—The term ‘‘language 
access’’ means the provision of language services to 
an LEP individual designed to enhance that individ-
ual’s access to, understanding of or benefit from 
health care or health care-related services. 
(9) LANGUAGE
SERVICES.—The term ‘‘lan-
guage services’’ means provision of health care serv-
ices directly in a non-English language, interpreta-
tion, translation, and non-English signage. 
(10) LIMITED
ENGLISH
PROFICIENT.—The 
term ‘‘limited English proficient’’ or ‘‘LEP’’ with re-
spect to an individual means an individual who 
speaks a primary language other than English and 
who cannot speak, read, write or understand the 
English language at a level that permits the indi-
vidual to effectively communicate with clinical or 
nonclinical staff at an entity providing health care or 
health care related services. 
(11) 
MEDICARE
BENEFICIARY.—The 
term 
‘‘Medicare beneficiary’’ means an individual entitled 
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to benefits under part A of title XVIII of the Social 
Security Act or enrolled under part B of such title. 
(12) MEDICARE PROGRAM.—The term ‘‘Medi-
care program’’ means the programs under parts A 
through D of title XVIII of the Social Security Act. 
(13) SERVICE PROVIDER.—The term ‘‘service 
provider’’ includes all suppliers, providers of services, 
or entities under contract to provide coverage, items 
or services under any part of title XVIII of the So-
cial Security Act. 
Subtitle C—Miscellaneous 
Improvements 
SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS 
PROCESS. 
Section 1833(g)(5) of the Social Security Act (42 
U.S.C. 1395l(g)(5)), as amended by section 141 of the 
Medicare Improvements for Patients and Providers Act of 
2008 (Public Law 110–275), is amended by striking ‘‘De-
cember 31, 2009’’ and inserting ‘‘December 31, 2011’’. 
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SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNO-
SUPPRESSIVE DRUGS FOR KIDNEY TRANS-
PLANT PATIENTS AND OTHER RENAL DIALY-
SIS PROVISIONS. 
(a) PROVISION OF APPROPRIATE COVERAGE OF IM-
MUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE PRO-
GRAM FOR KIDNEY TRANSPLANT RECIPIENTS.— 
(1) CONTINUED
ENTITLEMENT
TO
IMMUNO-
SUPPRESSIVE DRUGS.— 
(A) KIDNEY TRANSPLANT RECIPIENTS.— 
Section 226A(b)(2) of the Social Security Act 
(42 U.S.C. 426–1(b)(2)) is amended by insert-
ing ‘‘(except for coverage of immunosuppressive 
drugs under section 1861(s)(2)(J))’’ before ‘‘, 
with the thirty-sixth month’’. 
(B) APPLICATION.—Section 1836 of such 
Act (42 U.S.C. 1395o) is amended— 
(i) by striking ‘‘Every individual who’’ 
and inserting ‘‘(a) IN GENERAL.—Every 
individual who’’; and 
(ii) by adding at the end the following 
new subsection: 
‘‘(b) SPECIAL RULES APPLICABLE TO INDIVIDUALS 
ONLY ELIGIBLE FOR COVERAGE OF IMMUNOSUPPRESSIVE 
DRUGS.— 
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‘‘(1) IN GENERAL.—In the case of an individual 
whose eligibility for benefits under this title has 
ended on or after January 1, 2012, except for the 
coverage of immunosuppressive drugs by reason of 
section 226A(b)(2), the following rules shall apply: 
‘‘(A) The individual shall be deemed to be 
enrolled under this part for purposes of receiv-
ing coverage of such drugs. 
‘‘(B) The individual shall be responsible 
for providing for payment of the portion of the 
premium under section 1839 which is not cov-
ered under the Medicare savings program (as 
defined in section 1144(c)(7)) in order to re-
ceive such coverage. 
‘‘(C) The provision of such drugs shall be 
subject to the application of— 
‘‘(i) the deductible under section 
1833(b); and 
‘‘(ii) the coinsurance amount applica-
ble for such drugs (as determined under 
this part). 
‘‘(D) If the individual is an inpatient of a 
hospital or other entity, the individual is enti-
tled to receive coverage of such drugs under 
this part. 
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‘‘(2) ESTABLISHMENT
OF
PROCEDURES
IN 
ORDER TO IMPLEMENT COVERAGE.—The Secretary 
shall establish procedures for— 
‘‘(A) identifying individuals that are enti-
tled to coverage of immunosuppressive drugs by 
reason of section 226A(b)(2); and 
‘‘(B) distinguishing such individuals from 
individuals that are enrolled under this part for 
the complete package of benefits under this 
part.’’. 
(C) TECHNICAL AMENDMENT TO CORRECT 
DUPLICATE
SUBSECTION
DESIGNATION.—Sub-
section (c) of section 226A of such Act (42 
U.S.C. 
426–1), 
as 
added 
by 
section 
201(a)(3)(D)(ii) of the Social Security Inde-
pendence and Program Improvements Act of 
1994 (Public Law 103–296; 108 Stat. 1497), is 
redesignated as subsection (d). 
(2) EXTENSION
OF
SECONDARY
PAYER
RE-
QUIREMENTS
FOR
ESRD
BENEFICIARIES.—Section 
1862(b)(1)(C) 
of 
such 
Act 
(42 
U.S.C. 
1395y(b)(1)(C)) is amended by adding at the end 
the following new sentence: ‘‘With regard to im-
munosuppressive drugs furnished on or after the 
date of the enactment of the Affordable Health Care 
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for America Act, this subparagraph shall be applied 
without regard to any time limitation.’’. 
(b) MEDICARE COVERAGE FOR ESRD PATIENTS.— 
Section 1881 of such Act is further amended— 
(1) in subsection (b)(14)(B)(iii), by inserting ‘‘, 
including oral drugs that are not the oral equivalent 
of an intravenous drug (such as oral phosphate bind-
ers and calcimimetics),’’ after ‘‘other drugs and 
biologicals’’; 
(2) in subsection (b)(14)(E)(ii)— 
(A) in the first sentence— 
(i) by striking ‘‘a one-time election to 
be excluded from the phase-in’’ and insert-
ing ‘‘an election, with respect to 2011, 
2012, or 2013, to be excluded from the 
phase-in (or the remainder of the phase- 
in)’’; and 
(ii) by adding before the period at the 
end the following: ‘‘for such year and for 
each subsequent year during the phase-in 
described in clause (i)’’; and 
(B) in the second sentence— 
(i) by striking ‘‘January 1, 2011’’ and 
inserting ‘‘the first date of such year’’; and 
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(ii) by inserting ‘‘and at a time’’ after 
‘‘form and manner’’; and 
(3) in subsection (h)(4)(E), by striking ‘‘lesser’’ 
and inserting ‘‘greater’’. 
SEC. 1233. VOLUNTARY ADVANCE CARE PLANNING CON-
SULTATION. 
(a) IN GENERAL.—Section 1861 of the Social Secu-
rity Act (42 U.S.C. 1395x) is amended— 
(1) in subsection (s)(2)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (DD); 
(B) by adding ‘‘and’’ at the end of sub-
paragraph (EE); and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(FF) voluntary advance care planning con-
sultation (as defined in subsection (hhh)(1));’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘Voluntary Advance Care Planning Consultation 
‘‘(hhh)(1) Subject to paragraphs (3) and (4), the 
term ‘voluntary advance care planning consultation’ 
means an optional consultation between the individual and 
a practitioner described in paragraph (2) regarding ad-
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vance care planning. Such consultation may include the 
following, as specified by the Secretary: 
‘‘(A) An explanation by the practitioner of ad-
vance care planning, including a review of key ques-
tions and considerations, advance directives (includ-
ing living wills and durable powers of attorney) and 
their uses. 
‘‘(B) An explanation by the practitioner of the 
role and responsibilities of a health care proxy and 
of the continuum of end-of-life services and supports 
available, including palliative care and hospice, and 
benefits for such services and supports that are 
available under this title. 
‘‘(C) An explanation by the practitioner of phy-
sician orders regarding life sustaining treatment or 
similar orders, in States where such orders or simi-
lar orders exist. 
‘‘(2) A practitioner described in this paragraph is— 
‘‘(A) a physician (as defined in subsection 
(r)(1)); and 
‘‘(B) another health care professional (as speci-
fied by the Secretary and who has the authority 
under State law to sign orders for life sustaining 
treatments, such as a nurse practitioner or physician 
assistant). 
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‘‘(3) An individual may receive the voluntary advance 
care planning care planning consultation provided for 
under this subsection no more than once every 5 years 
unless there is a significant change in the health or health- 
related condition of the individual. 
‘‘(4) For purposes of this section, the term ‘order re-
garding life sustaining treatment’ means, with respect to 
an individual, an actionable medical order relating to the 
treatment of that individual that effectively communicates 
the individual’s preferences regarding life sustaining treat-
ment, is signed and dated by a practitioner, and is in a 
form that permits it to be followed by health care profes-
sionals across the continuum of care.’’. 
(b) CONSTRUCTION.—The voluntary advance care 
planning consultation described in section 1861(hhh) of 
the Social Security Act, as added by subsection (a), shall 
be completely optional. Nothing in this section shall— 
(1) require an individual to complete an ad-
vance directive, an order for life sustaining treat-
ment, or other advance care planning document; 
(2) require an individual to consent to restric-
tions on the amount, duration, or scope of medical 
benefits an individual is entitled to receive under 
this title; or 
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(3) encourage the promotion of suicide or as-
sisted suicide. 
(c) PAYMENT.—Section 1848(j)(3) of such Act (42 
U.S.C. 1395w-4(j)(3)) is amended by inserting ‘‘(2)(FF),’’ 
after ‘‘(2)(EE),’’. 
(d) FREQUENCY LIMITATION.—Section 1862(a) of 
such Act (42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (N), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (O) by striking the 
semicolon at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(P) in the case of voluntary advance care 
planning consultations (as defined in paragraph 
(1) of section 1861(hhh)), which are performed 
more frequently than is covered under such sec-
tion;’’; and 
(2) in paragraph (7), by striking ‘‘or (K)’’ and 
inserting ‘‘(K), or (P)’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to consultations furnished on or 
after January 1, 2011. 
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SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND 
WAIVER OF LIMITED ENROLLMENT PENALTY 
FOR TRICARE BENEFICIARIES. 
(a) PART B SPECIAL ENROLLMENT PERIOD.— 
(1) IN GENERAL.—Section 1837 of the Social 
Security Act (42 U.S.C. 1395p) is amended by add-
ing at the end the following new subsection: 
‘‘(l)(1) In the case of any individual who is a covered 
beneficiary (as defined in section 1072(5) of title 10, 
United States Code) at the time the individual is entitled 
to hospital insurance benefits under part A under section 
226(b) or section 226A and who is eligible to enroll but 
who has elected not to enroll (or to be deemed enrolled) 
during the individual’s initial enrollment period, there 
shall be a special enrollment period described in paragraph 
(2). 
‘‘(2) The special enrollment period described in this 
paragraph, with respect to an individual, is the 12-month 
period beginning on the day after the last day of the initial 
enrollment period of the individual or, if later, the 12- 
month period beginning with the month the individual is 
notified of enrollment under this section. 
‘‘(3) In the case of an individual who enrolls during 
the special enrollment period provided under paragraph 
(1), the coverage period under this part shall begin on the 
first day of the month in which the individual enrolls or, 
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at the option of the individual, on the first day of the sec-
ond month following the last month of the individual’s ini-
tial enrollment period. 
‘‘(4) The Secretary of Defense shall establish a meth-
od for identifying individuals described in paragraph (1) 
and providing notice to them of their eligibility for enroll-
ment during the special enrollment period described in 
paragraph (2).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to elections made on or 
after the date of the enactment of this Act. 
(b) WAIVER OF INCREASE OF PREMIUM.— 
(1) IN GENERAL.—Section 1839(b) of the So-
cial Security Act (42 U.S.C. 1395r(b)) is amended 
by striking ‘‘section 1837(i)(4)’’ and inserting ‘‘sub-
section (i)(4) or (l) of section 1837’’. 
(2) EFFECTIVE DATE.— 
(A) IN GENERAL.—The amendment made 
by paragraph (1) shall apply with respect to 
elections made on or after the date of the en-
actment of this Act. 
(B) REBATES
FOR
CERTAIN
DISABLED 
AND ESRD BENEFICIARIES.— 
(i) IN
GENERAL.—With respect to 
premiums for months on or after January 
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2005 and before the month of the enact-
ment of this Act, no increase in the pre-
mium shall be effected for a month in the 
case of any individual who is a covered 
beneficiary (as defined in section 1072(5) 
of title 10, United States Code) at the time 
the individual is entitled to hospital insur-
ance benefits under part A of title XVIII 
of the Social Security Act under section 
226(b) or 226A of such Act, and who is el-
igible to enroll, but who has elected not to 
enroll (or to be deemed enrolled), during 
the individual’s initial enrollment period, 
and who enrolls under this part within the 
12-month period that begins on the first 
day of the month after the month of notifi-
cation of entitlement under this part. 
(ii) CONSULTATION
WITH
DEPART-
MENT
OF
DEFENSE.—The Secretary of 
Health and Human Services shall consult 
with the Secretary of Defense in identi-
fying individuals described in this para-
graph. 
(iii) REBATES.—The Secretary of 
Health and Human Services shall establish 
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a method for providing rebates of premium 
increases paid for months on or after Jan-
uary 1, 2005, and before the month of the 
enactment of this Act for which a penalty 
was applied and collected. 
SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX 
YEAR IN CASE OF GAINS FROM SALE OF PRI-
MARY RESIDENCE IN COMPUTING PART B IN-
COME-RELATED PREMIUM. 
(a) IN GENERAL.—Section 1839(i)(4)(C)(ii)(II) of 
the Social Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II)) 
is amended by inserting ‘‘sale of primary residence,’’ after 
‘‘divorce of such individual,’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to premiums and payments for 
years beginning with 2011. 
SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PA-
TIENT DECISIONS AIDS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services , acting through the Center for Medicare 
and Medicaid Innovation established under section 1115A 
of the Social Security Act (as added by section 1907) and 
consistent with the applicable provisions of such section, 
shall establish a shared decision making demonstration 
program (in this subsection referred to as the ‘‘program’’) 
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under the Medicare program using patient decision aids 
to meet the objective of improving the understanding by 
Medicare beneficiaries of their medical treatment options, 
as compared to comparable Medicare beneficiaries who do 
not participate in a shared decision making process using 
patient decision aids. 
(b) SITES.— 
(1) ENROLLMENT.—The Secretary shall enroll 
in the program not more than 30 eligible providers 
who have experience in implementing, and have in-
vested in the necessary infrastructure to implement, 
shared decision making using patient decision aids. 
(2) APPLICATION.—An eligible provider seeking 
to participate in the program shall submit to the 
Secretary an application at such time and containing 
such information as the Secretary may require. 
(3) PREFERENCE.—In enrolling eligible pro-
viders in the program, the Secretary shall give pref-
erence to eligible providers that— 
(A) have documented experience in using 
patient decision aids for the conditions identi-
fied by the Secretary and in using shared deci-
sion making; 
(B) have the necessary information tech-
nology infrastructure to collect the information 
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required by the Secretary for reporting pur-
poses; and 
(C) are trained in how to use patient deci-
sion aids and shared decision making. 
(c) FOLLOW-UP COUNSELING VISIT.— 
(1) IN GENERAL.—An eligible provider partici-
pating in the program shall routinely schedule Medi-
care beneficiaries for a counseling visit after the 
viewing of such a patient decision aid to answer any 
questions the beneficiary may have with respect to 
the medical care of the condition involved and to as-
sist the beneficiary in thinking through how their 
preferences and concerns relate to their medical 
care. 
(2) PAYMENT
FOR
FOLLOW-UP
COUNSELING 
VISIT.—The Secretary shall establish procedures for 
making payments for such counseling visits provided 
to Medicare beneficiaries under the program. Such 
procedures shall provide for the establishment— 
(A) of a code (or codes) to represent such 
services; and 
(B) of a single payment amount for such 
service that includes the professional time of 
the health care provider and a portion of the 
reasonable costs of the infrastructure of the eli-
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gible provider such as would be made under the 
applicable payment systems to that provider for 
similar covered services. 
(d) COSTS OF AIDS.—An eligible provider partici-
pating in the program shall be responsible for the costs 
of selecting, purchasing, and incorporating such patient 
decision aids into the provider’s practice, and reporting 
data on quality and outcome measures under the program. 
(e) FUNDING.—The Secretary shall provide for the 
transfer from the Federal Supplementary Medical Insur-
ance Trust Fund established under section 1841 of the 
Social Security Act (42 U.S.C. 1395t) of such funds as 
are necessary for the costs of carrying out the program. 
(f) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of titles XI and XVIII of the Social 
Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.) 
as may be necessary for the purpose of carrying out the 
program. 
(g) REPORT.—Not later than 12 months after the 
date of completion of the program, the Secretary shall sub-
mit to Congress a report on such program, together with 
recommendations for such legislation and administrative 
action as the Secretary determines to be appropriate. The 
final report shall include an evaluation of the impact of 
the use of the program on health quality, utilization of 
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health care services, and on improving the quality of life 
of such beneficiaries. 
(h) DEFINITIONS.—In this section: 
(1) ELIGIBLE PROVIDER.—The term ‘‘eligible 
provider’’ means the following: 
(A) A primary care practice. 
(B) A specialty practice. 
(C) A multispecialty group practice. 
(D) A hospital. 
(E) A rural health clinic. 
(F) A Federally qualified health center (as 
defined in section 1861(aa)(4) of the Social Se-
curity Act (42 U.S.C. 1395x(aa)(4)). 
(G) An integrated delivery system. 
(H) A State cooperative entity that in-
cludes the State government and at least one 
other health care provider which is set up for 
the purpose of testing shared decision making 
and patient decision aids. 
(2) PATIENT
DECISION
AID.—The term ‘‘pa-
tient decision aid’’ means an educational tool (such 
as the Internet, a video, or a pamphlet) that helps 
patients (or, if appropriate, the family caregiver of 
the patient) understand and communicate their be-
liefs and preferences related to their treatment op-
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tions, and to decide with their health care provider 
what treatments are best for them based on their 
treatment options, scientific evidence, circumstances, 
beliefs, and preferences. 
(3) SHARED
DECISION
MAKING.—The term 
‘‘shared decision making’’ means a collaborative 
process between patient and clinician that engages 
the patient in decision making, provides patients 
with information about trade-offs among treatment 
options, and facilitates the incorporation of patient 
preferences and values into the medical plan. 
TITLE 
III—PROMOTING 
PRI-
MARY 
CARE, 
MENTAL 
HEALTH SERVICES, AND CO-
ORDINATED CARE 
SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT 
PROGRAM. 
Title XVIII of the Social Security Act is amended by 
inserting after section 1866D, as added by section 
1152(f), the following new section: 
‘‘ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM 
‘‘SEC. 1866E. (a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.— The Secretary shall conduct a 
pilot program (in this section referred to as the ‘pilot pro-
gram’) to test different payment incentive models, includ-
ing (to the extent practicable) the specific payment incen-
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tive models described in subsection (c), designed to reduce 
the growth of expenditures and improve health outcomes 
in the provision of items and services under this title to 
applicable beneficiaries (as defined in subsection (e)) by 
qualifying accountable care organizations (as defined in 
subsection (b)(1)) in order to— 
‘‘(A) promote accountability for a patient popu-
lation and coordinate items and services under parts 
A and B (and may include Part D, if the Secretary 
determines appropriate); 
‘‘(B) encourage investment in infrastructure 
and redesigned care processes for high quality and 
efficient service delivery; and 
‘‘(C) reward physician practices and other phy-
sician organizational models for the provision of high 
quality and efficient health care services. 
‘‘(2) SCOPE.—The Secretary shall set specific goals 
for the number of accountable care organizations, partici-
pating practitioners, and patients served in the initial tests 
under the pilot program to ensure that the pilot program 
is of sufficient size and scope to— 
‘‘(A) test the approach involved in a variety of 
settings, including urban, rural, and underserved 
areas; and 
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‘‘(B) subject to subsection (g)(1), disseminate 
such approach rapidly on a national basis. 
To the extent that the Secretary finds a qualifying ac-
countable care organization model to be successful in im-
proving quality and reducing costs, the Secretary shall 
seek to implement such models on as large a geographic 
scale as practical and economical. 
‘‘(b) QUALIFYING ACCOUNTABLE CARE ORGANIZA-
TIONS (ACOS).— 
‘‘(1) QUALIFYING ACO DEFINED.—In this sec-
tion: 
‘‘(A) IN GENERAL.—The terms ‘qualifying 
accountable care organization’ and ‘qualifying 
ACO’ mean a group of physicians or other phy-
sician organizational model (as defined in sub-
paragraph (D)) that— 
‘‘(i) is organized at least in part for 
the purpose of providing physicians’ serv-
ices; and 
‘‘(ii) meets such criteria as the Sec-
retary determines to be appropriate to par-
ticipate in the pilot program, including the 
criteria specified in paragraph (2). 
‘‘(B) INCLUSION OF OTHER PROVIDERS OF 
SERVICES
AND
SUPPLIERS.—Nothing in this 
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subsection shall be construed as preventing a 
qualifying ACO from including a hospital or 
any other provider of services or supplier fur-
nishing items or services for which payment 
may be made under this title that is affiliated 
with the ACO under an arrangement structured 
so that such provider or supplier participates in 
the pilot program and shares in any incentive 
payments under the pilot program. 
‘‘(C) PHYSICIAN.—The term ‘physician’ in-
cludes, except as the Secretary may otherwise 
provide, any individual who furnishes services 
for which payment may be made as physicians’ 
services under this title. 
‘‘(D) OTHER PHYSICIAN ORGANIZATIONAL 
MODEL.—The term ‘other physician organiza-
tion model’ means, with respect to a qualifying 
ACO any model of organization under which 
physicians enter into agreements with other 
providers of services for the purposes of partici-
pation in the pilot program in order to provide 
high quality and efficient health care services 
and share in any incentive payments under such 
program 
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‘‘(E) OTHER SERVICES.—Nothing in this 
paragraph shall be construed as preventing a 
qualifying ACO from furnishing items or serv-
ices, for which payment may not be made under 
this title, for purposes of achieving performance 
goals under the pilot program. 
‘‘(2) QUALIFYING CRITERIA.—The following are 
criteria described in this paragraph for an organized 
group of physicians to be a qualifying ACO: 
‘‘(A) The group has a legal structure that 
would allow the group to receive and distribute 
incentive payments under this section. 
‘‘(B) The group includes a sufficient num-
ber of primary care physicians (regardless of 
specialty) for the applicable beneficiaries for 
whose care the group is accountable (as deter-
mined by the Secretary). 
‘‘(C) The group reports on quality meas-
ures in such form, manner, and frequency as 
specified by the Secretary (which may be for 
the group, for providers of services and sup-
pliers, or both). 
‘‘(D) The group reports to the Secretary 
(in a form, manner and frequency as specified 
by the Secretary) such data as the Secretary 
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determines appropriate to monitor and evaluate 
the pilot program. 
‘‘(E) The group provides notice to applica-
ble beneficiaries regarding the pilot program (as 
determined appropriate by the Secretary). 
‘‘(F) The group contributes to a best prac-
tices network or website, that shall be main-
tained by the Secretary for the purpose of shar-
ing strategies on quality improvement, care co-
ordination, and efficiency that the groups be-
lieve are effective. 
‘‘(G) The group utilizes patient-centered 
processes of care, including those that empha-
size patient and caregiver involvement in plan-
ning and monitoring of ongoing care manage-
ment plan. 
‘‘(H) The group meets other criteria deter-
mined to be appropriate by the Secretary. 
‘‘(c) SPECIFIC PAYMENT INCENTIVE MODELS.—The 
specific payment incentive models described in this sub-
section are the following: 
‘‘(1) PERFORMANCE
TARGET
MODEL.—Under 
the performance target model under this paragraph 
(in this paragraph referred to as the ‘performance 
target model’): 
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‘‘(A) IN
GENERAL.—A qualifying ACO 
qualifies to receive an incentive payment if ex-
penditures for items and services for applicable 
beneficiaries are less than a target spending 
level or a target rate of growth. The incentive 
payment shall be made only if savings are 
greater than would result from normal variation 
in expenditures for items and services covered 
under parts A and B (and may include Part D, 
if the Secretary determines appropriate). 
‘‘(B) COMPUTATION
OF
PERFORMANCE 
TARGET.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall establish a performance target for 
each qualifying ACO comprised of a base 
amount (described in clause (ii)) increased 
to the current year by an adjustment fac-
tor (described in clause (iii)). Such a tar-
get may be established on a per capita 
basis or adjusted for risk, as the Secretary 
determines to be appropriate. 
‘‘(ii) BASE AMOUNT.—For purposes of 
clause (i), the base amount in this sub-
paragraph is equal to the average total 
payments (or allowed charges) under parts 
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A and B (and may include part D, if the 
Secretary determines appropriate) for ap-
plicable beneficiaries for whom the quali-
fying ACO furnishes items and services in 
a base period determined by the Secretary. 
Such base amount may be determined on 
a per capita basis or adjusted for risk. 
‘‘(iii) 
ADJUSTMENT
FACTOR.—For 
purposes of clause (i), the adjustment fac-
tor in this clause may equal an annual per 
capita amount that reflects changes in ex-
penditures from the period of the base 
amount to the current year that would rep-
resent an appropriate performance target 
for applicable beneficiaries (as determined 
by the Secretary). 
‘‘(iv) REBASING.—Under this model 
the Secretary shall periodically rebase the 
base expenditure amount described in 
clause (ii). 
‘‘(C) MEETING TARGET.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), a qualifying ACO that meets or ex-
ceeds annual quality and performance tar-
gets for a year shall receive an incentive 
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payment for such year equal to a portion 
(as determined appropriate by the Sec-
retary) of the amount by which payments 
under this title for such year are estimated 
to be below the performance target for 
such year, as determined by the Secretary. 
The Secretary may establish a cap on in-
centive payments for a year for a quali-
fying ACO. 
‘‘(ii) LIMITATION.— The Secretary 
shall limit incentive payments to each 
qualifying ACO under this paragraph as 
necessary to ensure that the aggregate ex-
penditures with respect to applicable bene-
ficiaries for such ACOs under this title (in-
clusive of incentive payments described in 
this subparagraph) do not exceed the 
amount that the Secretary estimates would 
be expended for such ACO for such bene-
ficiaries if the pilot program under this 
section were not implemented. 
‘‘(D) REPORTING
AND
OTHER
REQUIRE-
MENTS.—In carrying out such model, the Sec-
retary may (as the Secretary determines to be 
appropriate) 
incorporate 
reporting 
require-
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ments, incentive payments, and penalties re-
lated to the physician quality reporting initia-
tive (PQRI), electronic prescribing, electronic 
health records, and other similar initiatives 
under section 1848, and may use alternative 
criteria than would otherwise apply under such 
section for determining whether to make such 
payments. The incentive payments described in 
this subparagraph shall not be included in the 
limit described in subparagraph (C)(ii) or in the 
performance target model described in this 
paragraph. 
‘‘(2) PARTIAL CAPITATION MODEL.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a partial capitation model described 
in this paragraph (in this paragraph referred to 
as a ‘partial capitation model’) is a model in 
which a qualifying ACO would be at financial 
risk for some, but not all, of the items and serv-
ices covered under parts A and B (and may in-
clude part D, if the Secretary determines ap-
propriate), such as at risk for some or all physi-
cians’ services or all items and services under 
part B. The Secretary may limit a partial capi-
tation model to ACOs that are highly integrated 
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systems of care and to ACOs capable of bearing 
risk, as determined to be appropriate by the 
Secretary. 
‘‘(B) NO ADDITIONAL PROGRAM EXPENDI-
TURES.—Payments to a qualifying ACO for 
items and services under this title for applicable 
beneficiaries for a year under the partial capita-
tion model shall be established in a manner that 
does not result in spending more for such ACO 
for such beneficiaries than would otherwise be 
expended for such ACO for such beneficiaries 
for such year if the pilot program were not im-
plemented, as estimated by the Secretary. 
‘‘(3) OTHER PAYMENT MODELS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary may develop other 
payment models that meet the goals of this 
pilot program to improve quality and efficiency. 
‘‘(B) NO ADDITIONAL PROGRAM EXPENDI-
TURES.—Subparagraph (B) of paragraph (2) 
shall apply to a payment model under subpara-
graph (A) in a similar manner as such subpara-
graph (B) applies to the payment model under 
paragraph (2). 
‘‘(d) ANNUAL QUALITY TARGETS.— 
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‘‘(1) IN GENERAL.—The Secretary shall estab-
lish annual quality targets that qualifying ACOs 
must meet to receive incentive payments, operate at 
financial risk, or otherwise participate in alternative 
financing models under this section. The Secretary 
shall establish a process for developing annual tar-
gets based on ACO reporting of multiple quality 
measures. In selecting measures the Secretary 
shall— 
‘‘(A) for years one and two of each ACOs 
participation in the pilot program established 
by this section, require reporting of a starter 
set of measures focused on clinical care, care 
coordination and patient experience of care; and 
‘‘(B) for each subsequent year, require re-
porting of a more comprehensive set of clinical 
outcomes measures, care coordination measures 
and patient experience of care measures. 
‘‘(2) MEASURE SELECTION.—To the extent fea-
sible, the Secretary shall select measures that reflect 
national priorities for quality improvement and pa-
tient-centered care consistent with the measures de-
veloped under section 1192(c)(1). 
‘‘(e) APPLICABLE BENEFICIARIES.— 
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‘‘(1) IN GENERAL.—In this section, the term 
‘applicable beneficiary’ means, with respect to a 
qualifying ACO, an individual who— 
‘‘(A) is enrolled under part B and entitled 
to benefits under part A; 
‘‘(B) is not enrolled in a Medicare Advan-
tage plan under part C or a PACE program 
under section 1894; and 
‘‘(C) meets such other criteria as the Sec-
retary determines appropriate, which may in-
clude criteria relating to frequency of contact 
with physicians in the ACO 
‘‘(2) 
FOLLOWING
APPLICABLE
BENE-
FICIARIES.—The Secretary may monitor data on ex-
penditures and quality of services under this title 
after an applicable beneficiary discontinues receiving 
services under this title through a qualifying ACO. 
‘‘(f) IMPLEMENTATION.— 
‘‘(1) STARTING DATE.—The pilot program shall 
begin no later than January 1, 2012. An agreement 
with a qualifying ACO under the pilot program may 
cover a multi-year period of between 3 and 5 years. 
‘‘(2) WAIVER.—The Secretary may waive such 
provisions of this title (including section 1877) and 
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title XI in the manner the Secretary determines nec-
essary in order implement the pilot program. 
‘‘(3) PERFORMANCE RESULTS REPORTS.—The 
Secretary shall report performance results to quali-
fying ACOs under the pilot program at least annu-
ally. 
‘‘(4) LIMITATIONS ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise of— 
‘‘(A) the elements, parameters, scope, and 
duration of the pilot program; 
‘‘(B) the selection of qualifying ACOs for 
the pilot program; 
‘‘(C) the establishment of targets, meas-
urement of performance, determinations with 
respect to whether savings have been achieved 
and the amount of savings; 
‘‘(D) determinations regarding whether, to 
whom, and in what amounts incentive payments 
are paid; and 
‘‘(E) decisions about the extension of the 
program under subsection (h), expansion of the 
program under subsection (i) or extensions 
under subsections (j) or (k). 
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‘‘(5) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code shall not apply to this section. 
‘‘(g) EVALUATION; MONITORING.— 
‘‘(1) IN GENERAL.—The Secretary shall evalu-
ate the payment incentive model for each qualifying 
ACO under the pilot program to assess impacts on 
beneficiaries, providers of services, suppliers and the 
program under this title. The Secretary shall make 
such evaluation publicly available within 60 days of 
the date of completion of such report. 
‘‘(2) MONITORING.—The Inspector General of 
the Department of Health and Human Services shall 
provide for monitoring of the operation of ACOs 
under the pilot program with regard to violations of 
section 1877 (popularly known as the ‘Stark law’). 
‘‘(h) EXTENSION OF PILOT AGREEMENT WITH SUC-
CESSFUL ORGANIZATIONS.— 
‘‘(1) REPORTS TO CONGRESS.—Not later than 
2 years after the date the first agreement is entered 
into under this section, and biennially thereafter for 
six years, the Secretary shall submit to Congress 
and make publicly available a report on the use of 
ACO payment models under the pilot program. Each 
report shall address the impact of the use of those 
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models on expenditures, access, and quality under 
this title. 
‘‘(2) EXTENSION.—Subject to the report pro-
vided under paragraph (1), with respect to a quali-
fying ACO, the Secretary may extend the duration 
of the agreement for such ACO under the pilot pro-
gram as the Secretary determines appropriate if— 
‘‘(A) the ACO receives incentive payments 
with respect to any of the first 4 years of the 
pilot agreement and is consistently meeting 
quality standards or 
‘‘(B) the ACO is consistently exceeding 
quality standards and is not increasing spend-
ing under the program. 
‘‘(3) TERMINATION.—The Secretary may termi-
nate an agreement with a qualifying ACO under the 
pilot program if such ACO did not receive incentive 
payments or consistently failed to meet quality 
standards in any of the first 3 years under the pro-
gram. 
‘‘(i) EXPANSION TO ADDITIONAL ACOS.— 
‘‘(1) TESTING AND REFINEMENT OF PAYMENT 
INCENTIVE MODELS.—Subject to the evaluation de-
scribed in subsection (g), the Secretary may enter 
into agreements under the pilot program with addi-
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tional qualifying ACOs to further test and refine 
payment incentive models with respect to qualifying 
ACOs. 
‘‘(2) EXPANDING USE OF SUCCESSFUL MODELS 
TO PROGRAM IMPLEMENTATION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary may issue regulations 
to implement, on a permanent basis, 1 or more 
models if, and to the extent that, such models 
are beneficial to the program under this title, as 
determined by the Secretary. 
‘‘(B) CERTIFICATION.—The Chief Actuary 
of the Centers for Medicare & Medicaid Serv-
ices shall certify that 1 or more of such models 
described in subparagraph (A) would result in 
estimated spending that would be less than 
what spending would otherwise be estimated to 
be in the absence of such expansion. 
‘‘(j) TREATMENT OF PHYSICIAN GROUP PRACTICE 
DEMONSTRATION.— 
‘‘(1) EXTENSION.—The Secretary may enter in 
to an agreement with a qualifying ACO under the 
demonstration under section 1866A, subject to re-
basing and other modifications deemed appropriate 
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by the Secretary, until the pilot program under this 
section is operational. 
‘‘(2) TRANSITION.—For purposes of extension 
of an agreement with a qualifying ACO under sub-
section (h)(2), the Secretary shall treat receipt of an 
incentive payment for a year by an organization 
under the physician group practice demonstration 
pursuant to section 1866A as a year for which an 
incentive payment is made under such subsection, as 
long as such practice group practice organization 
meets the criteria under subsection (b)(2). 
‘‘(k) ADDITIONAL PROVISIONS.— 
‘‘(1) AUTHORITY
FOR
SEPARATE
INCENTIVE 
ARRANGEMENTS.—The Secretary may create sepa-
rate incentive arrangements (including using mul-
tiple years of data, varying thresholds, varying 
shared savings amounts, and varying shared savings 
limits) for different categories of qualifying ACOs to 
reflect variation in average annual attributable ex-
penditures and other matters the Secretary deems 
appropriate. 
‘‘(2) ENCOURAGEMENT OF PARTICIPATION OF 
SMALLER ORGANIZATIONS.—In order to encourage 
the participation of smaller accountable care organi-
zations under the pilot program, the Secretary may 
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limit a qualifying ACO’s exposure to high cost pa-
tients under the program. 
‘‘(3) INVOLVEMENT
IN
PRIVATE
PAYER
AND 
OTHER
THIRD
PARTY
ARRANGEMENTS.—The Sec-
retary may give preference to ACOs who are partici-
pating in similar arrangements with other payers. 
‘‘(4) ANTIDISCRIMINATION
LIMITATION.—The 
Secretary shall not enter into an agreement with an 
entity to provide health care items or services under 
the pilot program, or with an entity to administer 
the program, unless such entity guarantees that it 
will not deny, limit, or condition the coverage or pro-
vision of benefits under the program, for individuals 
eligible to be enrolled under such program, based on 
any health status-related factor described in section 
2702(a)(1) of the Public Health Service Act. 
‘‘(5) FUNDING.—For purposes of administering 
and carrying out the pilot program, other than for 
payments for items and services furnished under this 
title and incentive payments under subsection (c)(1), 
in addition to funds otherwise appropriated, there 
are appropriated to the Secretary for the Center for 
Medicare & Medicaid Services Program Management 
Account $25,000,000 for each of fiscal years 2010 
through 2014 and $20,000,000 for fiscal year 2015. 
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Amounts appropriated under this paragraph for a 
fiscal year shall be available until expended. 
‘‘(6) NO DUPLICATION IN PAYMENTS TO PHYSI-
CIANS IN MULTIPLE PILOTS.—The Secretary shall 
not make payments under this section to any physi-
cian group that is paid under section 1866F (relat-
ing to medical homes) or section 1866G (relating to 
independence at home).’’. 
SEC. 1302. MEDICAL HOME PILOT PROGRAM. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act is amended by inserting after section 1866E, as in-
serted by section 1301, the following new section: 
‘‘MEDICAL HOME PILOT PROGRAM 
‘‘SEC. 1866F. (a) ESTABLISHMENT AND MEDICAL 
HOME MODELS.— 
‘‘(1) ESTABLISHMENT OF PILOT PROGRAM.— 
The Secretary shall establish a medical home pilot 
program (in this section referred to as the ‘pilot pro-
gram’) for the purpose of evaluating the feasibility 
and advisability of reimbursing qualified patient-cen-
tered medical homes for furnishing medical home 
services (as defined under subsection (b)(1)) to 
beneficiaries (as defined in subsection (b)(4)) and to 
targeted high need beneficiaries (as defined in sub-
section (c)(1)(C)). 
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‘‘(2) SCOPE.—Subject to subsection (g), the 
Secretary shall set specific goals for the number of 
practices and communities, and the number of pa-
tients served, under the pilot program in the initial 
tests to ensure that the pilot program is of sufficient 
size and scope to— 
‘‘(A) test the approach involved in a vari-
ety of settings, including urban, rural, and un-
derserved areas; and 
‘‘(B) subject to subsection (e)(1), dissemi-
nate such approach rapidly on a national basis. 
To the extent that the Secretary finds a medical 
home model to be successful in improving quality 
and reducing costs, the Secretary shall implement 
such model on as large a geographic scale as prac-
tical and economical. 
‘‘(3) MODELS
OF
MEDICAL
HOMES
IN
THE 
PILOT PROGRAM.—The pilot program shall evaluate 
each of the following medical home models: 
‘‘(A) INDEPENDENT
PATIENT-CENTERED 
MEDICAL HOME MODEL.—Independent patient- 
centered medical home model under subsection 
(c). 
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‘‘(B) COMMUNITY-BASED
MEDICAL
HOME 
MODEL.—Community-based 
medical 
home 
model under subsection (d). 
‘‘(4) PARTICIPATION OF NURSE PRACTITIONERS 
AND PHYSICIAN ASSISTANTS.— 
‘‘(A) Nothing in this section shall be con-
strued as preventing a nurse practitioner from 
leading a patient centered medical home so long 
as— 
‘‘(i) all the requirements of this sec-
tion are met; and 
‘‘(ii) the nurse practitioner is acting 
in a manner that is consistent with State 
law. 
‘‘(B) Nothing in this section shall be con-
strued as preventing a physician assistant from 
participating in a patient centered medical 
home so long as— 
‘‘(i) all the requirements of this sec-
tion are met; and 
‘‘(ii) the physician assistant is acting 
in a manner that is consistent with State 
law. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
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‘‘(1) 
PATIENT-CENTERED
MEDICAL
HOME 
SERVICES.—The 
term 
‘patient-centered 
medical 
home services’ means services that— 
‘‘(A) provide beneficiaries with direct and 
ongoing access to a primary care or principal 
care physician or nurse practitioner who accepts 
responsibility for providing first contact, contin-
uous and comprehensive care to such bene-
ficiary; 
‘‘(B) coordinate the care provided to a ben-
eficiary by a team of individuals at the practice 
level across office, provider of services, and 
home settings led by a primary care or principal 
care physician or nurse practitioner, as needed 
and appropriate; 
‘‘(C) provide for all the patient’s health 
care needs or take responsibility for appro-
priately arranging care with other qualified 
physicians or providers for all stages of life; 
‘‘(D) provide continuous access to care and 
communication with participating beneficiaries; 
‘‘(E) provide support for patient self-man-
agement, proactive and regular patient moni-
toring, support for family caregivers, use pa-
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tient-centered processes, and coordination with 
community resources; 
‘‘(F) integrate readily accessible, clinically 
useful information on participating patients 
that enables the practice to treat such patients 
comprehensively and systematically; and 
‘‘(G) implement evidence-based guidelines 
and apply such guidelines to the identified 
needs of beneficiaries over time and with the in-
tensity needed by such beneficiaries. 
‘‘(2) PRIMARY CARE.—The term ‘primary care’ 
means health care that is provided by a physician, 
nurse practitioner, or physician assistant who prac-
tices in the field of family medicine, general internal 
medicine, geriatric medicine, or pediatric medicine. 
‘‘(3) PRINCIPAL
CARE.—The term ‘principal 
care’ means integrated, accessible health care that is 
provided by a physician who is a medical specialist 
or subspecialist that addresses the majority of the 
personal health care needs of patients with chronic 
conditions requiring the specialist’s or subspecialist’s 
expertise, and for whom the specialist or sub-
specialist assumes care management. 
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‘‘(4) BENEFICIARIES.—The term ‘beneficiaries’ 
means, with respect to a qualifying medical home, 
an individual who— 
‘‘(A) is enrolled under part B and entitled 
to benefits under part A; 
‘‘(B) is not enrolled in a Medicare Advan-
tage plan under part C or a PACE program 
under section 1894; and 
‘‘(C) meets such other criteria as the Sec-
retary determines appropriate. 
‘‘(c) INDEPENDENT PATIENT-CENTERED MEDICAL 
HOME MODEL.— 
‘‘(1) IN GENERAL.— 
‘‘(A) PAYMENT
AUTHORITY.—Under the 
independent patient-centered medical home 
model under this subsection, the Secretary shall 
make payments for medical home services fur-
nished by an independent patient-centered med-
ical home (as defined in subparagraph (B)) 
pursuant to paragraph (3) for targeted high 
need beneficiaries (as defined in subparagraph 
(C)). 
‘‘(B) INDEPENDENT
PATIENT-CENTERED 
MEDICAL HOME DEFINED.—In this section, the 
term ‘independent patient-centered medical 
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home’ means a physician-directed or nurse- 
practitioner-directed practice that is qualified 
under paragraph (2) as— 
‘‘(i) providing beneficiaries with pa-
tient-centered medical home services; and 
‘‘(ii) meets such other requirements as 
the Secretary may specify. 
‘‘(C) TARGETED HIGH NEED BENEFICIARY 
DEFINED.—For purposes of this subsection, the 
term ‘targeted high need beneficiary’ means a 
beneficiary who, based on a risk score as speci-
fied by the Secretary, is generally within the 
upper 50th percentile of Medicare beneficiaries. 
‘‘(D) BENEFICIARY ELECTION TO PARTICI-
PATE.—The Secretary shall determine an ap-
propriate method of ensuring that beneficiaries 
have agreed to participate in the pilot program. 
‘‘(E) IMPLEMENTATION.—The pilot pro-
gram under this subsection shall begin no later 
than 12 months after the date of the enactment 
of this section and shall operate for 5 years. 
‘‘(2) QUALIFICATION
PROCESS
FOR
PATIENT- 
CENTERED MEDICAL HOMES.—The Secretary shall 
establish a process for practices to qualify as med-
ical homes. 
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‘‘(3) PAYMENT.— 
‘‘(A) 
ESTABLISHMENT
OF
METHOD-
OLOGY.—The Secretary shall establish a meth-
odology for the payment for medical home serv-
ices furnished by independent patient-centered 
medical homes. Under such methodology, the 
Secretary shall adjust payments to medical 
homes based on beneficiary risk scores to en-
sure that higher payments are made for higher 
risk beneficiaries. 
‘‘(B) PER BENEFICIARY PER MONTH PAY-
MENTS.—Under such payment methodology, the 
Secretary shall pay independent patient-cen-
tered medical homes a monthly fee for each tar-
geted high need beneficiary who consents to re-
ceive medical home services through such med-
ical home. 
‘‘(C) PROSPECTIVE
PAYMENT.—The fee 
under subparagraph (B) shall be paid on a pro-
spective basis. 
‘‘(D) AMOUNT
OF
PAYMENT.—In deter-
mining the amount of such fee, the Secretary 
shall consider the following: 
‘‘(i) The clinical work and practice ex-
penses involved in providing the medical 
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home services provided by the independent 
patient-centered medical home (such as 
providing increased access, care coordina-
tion, population disease management, and 
teaching self-care skills for managing 
chronic illnesses) for which payment is not 
made under this title as of the date of the 
enactment of this section. 
‘‘(ii) Allow for differential payments 
based on capabilities of the independent 
patient-centered medical home. 
‘‘(iii) Use appropriate risk-adjustment 
in determining the amount of the per bene-
ficiary per month payment under this 
paragraph in a manner that ensures that 
higher payments are made for higher risk 
beneficiaries. 
‘‘(4) ENCOURAGING
PARTICIPATION
OF
VARI-
ETY OF PRACTICES.—The pilot program under this 
subsection shall be designed to include the participa-
tion of physicians in practices with fewer than 10 
full-time equivalent physicians, as well as physicians 
in larger practices, particularly in underserved and 
rural areas, as well as federally qualified health cen-
ters, and rural health centers. 
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‘‘(d) COMMUNITY-BASED MEDICAL HOME MODEL.— 
‘‘(1) IN GENERAL.— 
‘‘(A) AUTHORITY FOR PAYMENTS.—Under 
the community-based medical home model 
under this subsection (in this section referred to 
as the ‘CBMH model’), the Secretary shall 
make payments for the furnishing of medical 
home services by a community-based medical 
home (as defined in subparagraph (B)) pursu-
ant to paragraph (5)(B) for beneficiaries. 
‘‘(B) COMMUNITY-BASED MEDICAL HOME 
DEFINED.—In this section, the term ‘commu-
nity-based medical home’ means a nonprofit 
community-based or State-based organization or 
a State that is certified under paragraph (2) as 
meeting the following requirements: 
‘‘(i) The organization provides bene-
ficiaries with medical home services. 
‘‘(ii) The organization provides med-
ical home services under the supervision of 
and in close collaboration with the primary 
care or principal care physician, nurse 
practitioner, or physician assistant des-
ignated by the beneficiary as his or her 
community-based medical home provider. 
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‘‘(iii) The organization employs com-
munity health workers, including nurses or 
other 
non-physician 
practitioners, 
lay 
health workers, or other persons as deter-
mined appropriate by the Secretary, that 
assist the primary or principal care physi-
cian, nurse practitioner, or physician as-
sistant in chronic care management activi-
ties such as teaching self-care skills for 
managing chronic illnesses, transitional 
care services, care plan setting, nutritional 
counseling, medication therapy manage-
ment services for patients with multiple 
chronic diseases, or help beneficiaries ac-
cess the health care and community-based 
resources in their local geographic area. 
‘‘(iv) The organization meets such 
other requirements as the Secretary may 
specify. 
‘‘(2) QUALIFICATION
PROCESS
FOR
COMMU-
NITY-BASED MEDICAL HOMES.—The Secretary shall 
establish a process to provide for the review and 
qualification of community-based medical homes 
pursuant to criteria established by the Secretary. 
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‘‘(3) DURATION.—The pilot program for com-
munity-based medical homes under this subsection 
shall start no later than 2 years after the date of the 
enactment of this section. Each demonstration site 
under the pilot program shall operate for a period 
of up to 5 years after the initial implementation 
phase, without regard to the receipt of a initial im-
plementation funding under paragraph (6). 
‘‘(4) PREFERENCE.—In selecting sites for the 
CBMH model, the Secretary shall give preference to 
applications which seek to eliminate health dispari-
ties, as defined in section 3171 of the Public Health 
Service Act and may give preference to any of the 
following: 
‘‘(A) Applications that propose to coordi-
nate health care items and services under this 
title for chronically ill beneficiaries who rely, for 
primary care, on small physician or nurse prac-
titioner practices, federally qualified health cen-
ters, rural health clinics, or other settings with 
limited resources and scope of services. 
‘‘(B) Applications that include other third- 
party payors that furnish medical home services 
for chronically ill patients covered by such 
third-party payors. 
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‘‘(C) Applications from States that propose 
to use the medical home model to coordinate 
health care services for— 
‘‘(i) individuals enrolled under this 
title; 
‘‘(ii) individuals enrolled under title 
XIX; and 
‘‘(iii) full-benefit dual eligible individ-
uals (as defined in section 1935(c)(6)), 
with chronic diseases across a variety of health 
care settings. 
‘‘(5) PAYMENTS.— 
‘‘(A) 
ESTABLISHMENT
OF
METHOD-
OLOGY.—The Secretary shall establish a meth-
odology for the payment for medical home serv-
ices furnished under the CBMH model. 
‘‘(B) PER BENEFICIARY PER MONTH PAY-
MENTS.—Under such payment methodology, the 
Secretary shall make two separate monthly pay-
ments for each beneficiary who consents to re-
ceive medical home services through such med-
ical home, as follows: 
‘‘(i) PAYMENT TO COMMUNITY-BASED 
ORGANIZATION.—One monthly payment to 
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a community-based or State-based organi-
zation or State. 
‘‘(ii) PAYMENT TO PRIMARY OR PRIN-
CIPAL CARE PRACTICE.—One monthly pay-
ment to the primary or principal care prac-
tice for such beneficiary. 
‘‘(C) PROSPECTIVE
PAYMENT.—The pay-
ments under subparagraph (B) shall be paid on 
a prospective basis. 
‘‘(D) AMOUNT
OF
PAYMENT.—In deter-
mining the amount of such payment under sub-
paragraph (B), the Secretary shall consider the 
following: 
‘‘(i) The clinical work and practice ex-
penses involved in providing the medical 
home services provided by the primary or 
principal care practice (such as providing 
increased access, care coordination, care 
planning, population disease management, 
and teaching self-care skills for managing 
chronic illnesses) for which payment is not 
made under this title as of the date of the 
enactment of this section. 
‘‘(ii) Use appropriate risk-adjustment 
in determining the amount of the per bene-
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ficiary per month payment under this 
paragraph. 
‘‘(iii) In the case of the models de-
scribed in subparagraphs (B) and (C) of 
paragraph (4), the Secretary may deter-
mine an appropriate payment amount. 
‘‘(6) INITIAL
IMPLEMENTATION
FUNDING.— 
The Secretary may make available initial implemen-
tation funding to a non-profit community based or 
State-based organization or a State that is partici-
pating in the pilot program under this subsection. 
Such organization shall provide the Secretary with a 
detailed implementation plan that includes how such 
funds will be used. The Secretary shall select a terri-
tory of the United States as one of the locations in 
which to implement the pilot program under this 
subsection, unless no organization in a territory is 
able to comply with the requirements under para-
graph (1)(B). 
‘‘(e) EXPANSION OF PROGRAM.— 
‘‘(1) EVALUATION
OF
COST
AND
QUALITY.— 
The Secretary shall evaluate the pilot program to 
determine— 
‘‘(A) the extent to which medical homes re-
sult in— 
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‘‘(i) improvement in the quality and 
coordination of items and services under 
this title, particularly with regard to the 
care of complex patients; 
‘‘(ii) improvement in reducing health 
disparities; 
‘‘(iii) reductions in preventable hos-
pitalizations; 
‘‘(iv) prevention of readmissions; 
‘‘(v) reductions in emergency room 
visits; 
‘‘(vi) improvement in health outcomes, 
including patient functional status where 
applicable; 
‘‘(vii) improvement in patient satisfac-
tion; 
‘‘(viii) improved efficiency of care such 
as reducing duplicative diagnostic tests and 
laboratory tests; and 
‘‘(ix) reductions in health care ex-
penditures; and 
‘‘(B) the feasability and advisability of re-
imbursing medical homes for medical home 
services under this title on a permanent basis. 
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‘‘(2) REPORT.—Not later than 60 days after 
the date of completion of the evaluation under para-
graph (1), the Secretary shall submit to Congress 
and make available to the public a report on the 
findings of the evaluation under paragraph (1) and 
the extent to which standards for the certification of 
medical homes need to be periodically updated. 
‘‘(3) EXPANSION OF PROGRAM.— 
‘‘(A) IN GENERAL.—Subject to the results 
of the evaluation under paragraph (1) and sub-
paragraph (B), the Secretary may issue regula-
tions to implement, on a permanent basis, one 
or more models, if, and to the extent that such 
model or models, are beneficial to the program 
under this title, including that such implemen-
tation will improve quality of care, as deter-
mined by the Secretary. 
‘‘(B) CERTIFICATION REQUIREMENT.—The 
Secretary may not issue such regulations unless 
the Chief Actuary of the Centers for Medicare 
& Medicaid Services certifies that the expansion 
of the components of the pilot program de-
scribed in subparagraph (A) would result in es-
timated spending under this title that would be 
no more than the level of spending that the 
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Secretary estimates would otherwise be spent 
under this title in the absence of such expan-
sion. 
‘‘(C) UPDATED
STANDARDS.—The Sec-
retary shall periodically review and update the 
standards for qualification as an independent 
patient centered medical home and as a com-
munity based medical home and shall establish 
a process for ensuring that medical homes meet 
such updated standards, as applicable 
‘‘(f) ADMINISTRATIVE PROVISIONS.— 
‘‘(1) NO DUPLICATION IN PAYMENTS FOR INDI-
VIDUALS IN MEDICAL HOMES.—During any month, 
the Secretary may not make payments under this 
section under more than one model or through more 
than one medical home under any model for the fur-
nishing of medical home services to an individual. 
‘‘(2) NO EFFECT ON PAYMENT FOR MEDICAL 
VISITS.—Payments made under this section are in 
addition to, and have no effect on the amount of, 
payment for medical visits made under this title 
‘‘(3) ADMINISTRATION.—Chapter 35 of title 44, 
United States Code shall not apply to this section. 
‘‘(4) NO
DUPLICATION
IN
PHYSICIAN
PILOT 
PARTICIPATION.—The Secretary shall not make pay-
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ments to an independent or community based med-
ical home both under this section and section 1866E 
or 1866G, unless the pilot program under this sec-
tion has been implemented on a permanent basis 
under subsection (e)(3). 
‘‘(5) WAIVER.—The Secretary may waive such 
provisions of this title and title XI in the manner the 
Secretary determines necessary in order to imple-
ment this section. 
‘‘(g) FUNDING.— 
‘‘(1) OPERATIONAL
COSTS.—For purposes of 
administering and carrying out the pilot program 
(including the design, implementation, technical as-
sistance for and evaluation of such program), in ad-
dition to funds otherwise available, there shall be 
transferred from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 to the 
Secretary for the Centers for Medicare & Medicaid 
Services Program Management Account $6,000,000 
for each of fiscal years 2010 through 2014. 
Amounts appropriated under this paragraph for a 
fiscal year shall be available until expended. 
‘‘(2) 
PATIENT-CENTERED
MEDICAL
HOME 
SERVICES.—In addition to funds otherwise available, 
there shall be available to the Secretary for the Cen-
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ters for Medicare & Medicaid Services, from the 
Federal Supplementary Medical Insurance Trust 
Fund under section 1841— 
‘‘(A) $200,000,000 for each of fiscal years 
2010 through 2014 for payments for medical 
home services under subsection (c)(3); and 
‘‘(B) $125,000,000 for each of fiscal years 
2012 through 2016, for payments under sub-
section (d)(5). 
Amounts available under this paragraph for a fiscal 
year shall be available until expended. 
‘‘(3) INITIAL
IMPLEMENTATION.—In addition 
to funds otherwise available, there shall be available 
to the Secretary for the Centers for Medicare & 
Medicaid Services, from the Federal Supplementary 
Medical Insurance Trust Fund under section 1841, 
$2,500,000 for each of fiscal years 2010 through 
2012, under subsection (d)(6). Amounts available 
under this paragraph for a fiscal year shall be avail-
able until expended. 
‘‘(h) TREATMENT OF TRHCA MEDICARE MEDICAL 
HOME DEMONSTRATION FUNDING.— 
‘‘(1) In addition to funds otherwise available for 
payment of medical home services under subsection 
(c)(3), there shall also be available the amount pro-
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vided in subsection (g) of section 204 of division B 
of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395b–1 note), as added by section 133 of 
the Medicare Improvements for Patients and Pro-
viders Act of 2008 (Public Law 110-275). 
‘‘(2) Notwithstanding section 1302(c) of the Af-
fordable Health Care for America Act, in addition to 
funds provided in paragraph (1) and subsection 
(g)(2)(A), the funding for medical home services 
that would otherwise have been available if such sec-
tion 204 medical home demonstration had been im-
plemented (without regard to subsection (g) of such 
section) shall be available to the independent pa-
tient-centered medical home model described in sub-
section (c).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to services furnished on or after 
the date of the enactment of this Act. 
(c) CONFORMING REPEAL.—Section 204 of division 
B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395b–1 note), as amended by section 133(a)(2) 
of the Medicare Improvements for Patients and Providers 
Act of 2008 (Public Law 110–275), is repealed. 
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SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARY 
CARE SERVICES. 
(a) IN GENERAL.—Section 1833 of the Social Secu-
rity Act is amended by inserting after subsection (o) the 
following new subsection: 
‘‘(p) PRIMARY CARE PAYMENT INCENTIVES.— 
‘‘(1) IN GENERAL.—In the case of primary care 
services (as defined in paragraph (2)) furnished on 
or after January 1, 2011, by a primary care practi-
tioner (as defined in paragraph (3)) for which 
amounts are payable under section 1848, in addition 
to the amount otherwise paid under this part there 
shall also be paid to the practitioner (or to an em-
ployer or facility in the cases described in clause (A) 
of section 1842(b)(6)) (on a monthly or quarterly 
basis) from the Federal Supplementary Medical In-
surance Trust Fund an amount equal 5 percent (or 
10 percent if the practitioner predominately fur-
nishes such services in an area that is designated 
(under section 332(a)(1)(A) of the Public Health 
Service Act) as a primary care health professional 
shortage area. 
‘‘(2) PRIMARY CARE SERVICES DEFINED.—In 
this subsection, the term ‘primary care services’— 
‘‘(A) mean evaluation and management 
services, without regard to the specialty of the 
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physician furnishing the services, that are pro-
cedure codes (for services covered under this 
title) for— 
‘‘(i) services in the category des-
ignated Evaluation and Management in the 
Health Care Common Procedure Coding 
System (established by the Secretary under 
section 1848(c)(5) as of December 31, 
2009, and as subsequently modified by the 
Secretary); and 
‘‘(ii) preventive services (as defined in 
section 1861(iii) for which payment is 
made under this section; and 
‘‘(B) includes services furnished by another 
health care professional that would be described 
in subparagraph (A) if furnished by a physi-
cian. 
‘‘(3) 
PRIMARY
CARE
PRACTITIONER
DE-
FINED.—In this subsection, the term ‘primary care 
practitioner’— 
‘‘(A) means a physician or other health 
care practitioner (including a nurse practi-
tioner) who— 
‘‘(i) specializes in family medicine, 
general internal medicine, general pediat-
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rics, geriatrics, or obstetrics and gyne-
cology; and 
‘‘(ii) has allowed charges for primary 
care services that account for at least 50 
percent of the physician’s or practitioner’s 
total allowed charges under section 1848, 
as determined by the Secretary for the 
most recent period for which data are 
available; and 
‘‘(B) includes a physician assistant who is 
under the supervision of a physician described 
in subparagraph (A). 
‘‘(4) LIMITATION ON REVIEW.—There shall be 
no administrative or judicial review under section 
1869, section 1878, or otherwise, respecting— 
‘‘(A) any determination or designation 
under this subsection; 
‘‘(B) the identification of services as pri-
mary care services under this subsection; and 
‘‘(C) the identification of a practitioner as 
a primary care practitioner under this sub-
section. 
‘‘(5) 
COORDINATION
WITH
OTHER
PAY-
MENTS.— 
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‘‘(A) WITH OTHER PRIMARY CARE INCEN-
TIVES.—The provisions of this subsection shall 
not be taken into account in applying sub-
sections (m) and (u) and any payment under 
such subsections shall not be taken into account 
in computing payments under this subsection. 
‘‘(B) WITH
QUALITY
INCENTIVES.—Pay-
ments under this subsection shall not be taken 
into account in determining the amounts that 
would otherwise be paid under this part for 
purposes of section 1834(g)(2)(B).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1833(m) of such Act (42 U.S.C. 
1395l(m)) is amended by redesignating paragraph 
(4) as paragraph (5) and by inserting after para-
graph (3) the following new paragraph: 
‘‘(4) The provisions of this subsection shall not be 
taken into account in applying subsections (m) or (u) and 
any payment under such subsections shall not be taken 
into account in computing payments under this sub-
section.’’. 
(2) Section 1848(m)(5)(B) of such Act (42 
U.S.C. 1395w–4(m)(5)(B)) is amended by inserting 
‘‘, (p),’’ after ‘‘(m)’’. 
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(3) Section 1848(o)(1)(B)(iv) of such Act (42 
U.S.C. 1395w–4(o)(1)(B)(iv)) is amended by insert-
ing ‘‘primary care’’ before ‘‘health professional 
shortage area’’. 
SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CER-
TIFIED NURSE-MIDWIVES. 
(a) IN GENERAL.—Section 1833(a)(1)(K) of the So-
cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amended 
by striking ‘‘(but in no event’’ and all that follows through 
‘‘performed by a physician)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to services furnished on or after 
January 1, 2011. 
SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR 
PREVENTIVE SERVICES. 
(a) MEDICARE COVERED PREVENTIVE SERVICES DE-
FINED.—Section 1861 of the Social Security Act (42 
U.S.C. 1395x), as amended by section 1233(a)(1)(B), is 
amended by adding at the end the following new sub-
section: 
‘‘Medicare Covered Preventive Services 
‘‘(iii)(1) Subject to the succeeding provisions of this 
subsection, the term ‘Medicare covered preventive services’ 
means the following: 
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‘‘(A) Prostate cancer screening tests (as defined 
in subsection (oo)). 
‘‘(B) Colorectal cancer screening tests (as de-
fined in subsection (pp). 
‘‘(C) 
Diabetes 
outpatient 
self-management 
training services (as defined in subsection (qq)). 
‘‘(D) Screening for glaucoma for certain indi-
viduals (as described in subsection (s)(2)(U)). 
‘‘(E) Medical nutrition therapy services for cer-
tain 
individuals 
(as 
described 
in 
subsection 
(s)(2)(V)). 
‘‘(F) An initial preventive physical examination 
(as defined in subsection (ww)). 
‘‘(G) Cardiovascular screening blood tests (as 
defined in subsection (xx)(1)). 
‘‘(H) Diabetes screening tests (as defined in 
subsection (yy)). 
‘‘(I) Ultrasound screening for abdominal aortic 
aneurysm for certain individuals (as described in 
subsection (s)(2)(AA)). 
‘‘(J) Federally approved and recommended vac-
cines and their administration as described in sub-
section (s)(10). 
‘‘(K) Screening mammography (as defined in 
subsection (jj)). 
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‘‘(L) Screening pap smear and screening pelvic 
exam (as defined in subsection (nn)). 
‘‘(M) Bone mass measurement (as defined in 
subsection (rr)). 
‘‘(N) Kidney disease education services (as de-
fined in subsection (ggg)). 
‘‘(O) Additional preventive services (as defined 
in subsection (ddd)). 
‘‘(2) With respect to specific Medicare covered pre-
ventive services, the limitations and conditions described 
in the provisions referenced in paragraph (1) with respect 
to such services shall apply.’’. 
(b) PAYMENT
AND ELIMINATION
OF COST-SHAR-
ING.— 
(1) IN GENERAL.— 
(A) IN GENERAL.—Section 1833(a) of the 
Social Security Act (42 U.S.C. 1395l(a)) is 
amended by adding after and below paragraph 
(9) the following: 
‘‘With respect to Medicare covered preventive services, in 
any case in which the payment rate otherwise provided 
under this part is computed as a percent of less than 100 
percent of an actual charge, fee schedule rate, or other 
rate, such percentage shall be increased to 100 percent.’’. 
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(B) APPLICATION
TO
SIGMOIDOSCOPIES 
AND COLONOSCOPIES.—Section 1834(d) of such 
Act (42 U.S.C. 1395m(d)) is amended— 
(i) in paragraph (2)(C), by amending 
clause (ii) to read as follows: 
‘‘(ii) NO COINSURANCE.—In the case 
of a beneficiary who receives services de-
scribed in clause (i), there shall be no coin-
surance applied.’’; and 
(ii) in paragraph (3)(C), by amending 
clause (ii) to read as follows: 
‘‘(ii) NO COINSURANCE.—In the case 
of a beneficiary who receives services de-
scribed in clause (i), there shall be no coin-
surance applied.’’. 
(2) ELIMINATION
OF
COINSURANCE
IN
OUT-
PATIENT HOSPITAL SETTINGS.— 
(A) EXCLUSION FROM OPD FEE SCHED-
ULE.—Section 1833(t)(1)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is 
amended by striking ‘‘screening mammography 
(as defined in section 1861(jj)) and diagnostic 
mammography’’ 
and 
inserting 
‘‘diagnostic 
mammograms and Medicare covered preventive 
services (as defined in section 1861(iii)(1))’’. 
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(B) CONFORMING AMENDMENTS.—Section 
1833(a)(2) of the Social Security Act (42 
U.S.C. 1395l(a)(2)) is amended— 
(i) in subparagraph (F), by striking 
‘‘and’’ after the semicolon at the end; 
(ii) in subparagraph (G), by adding 
‘‘and’’ at the end; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(H) with respect to additional preventive 
services (as defined in section 1861(ddd)) fur-
nished by an outpatient department of a hos-
pital, the amount determined under paragraph 
(1)(W);’’. 
(3) WAIVER OF APPLICATION OF DEDUCTIBLE 
FOR
ALL
PREVENTIVE
SERVICES.—The first sen-
tence of section 1833(b) of the Social Security Act 
(42 U.S.C. 1395l(b)) is amended— 
(A) in clause (1), by striking ‘‘items and 
services described in section 1861(s)(10)(A)’’ 
and inserting ‘‘Medicare covered preventive 
services (as defined in section 1861(iii))’’; 
(B) by inserting ‘‘and’’ before ‘‘(4)’’; and 
(C) by striking clauses (5) through (8). 
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(4) APPLICATION
TO
PROVIDERS
OF
SERV-
ICES.—Section 1866(a)(2)(A)(ii) of such Act (42 
U.S.C. 1395cc(a)(2)(A)(ii)) is amended by inserting 
‘‘other than for Medicare covered preventive services 
and’’ after ‘‘for such items and services (’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2011. 
(d) PREVENTIVE SERVICES.— 
(1) REPORT TO CONGRESS ON BARRIERS TO 
PREVENTIVE SERVICES.—Not later than 12 months 
after the date of the enactment of this Act, the Sec-
retary of Health and Human Services shall report to 
Congress on barriers, if any, facing Medicare bene-
ficiaries in accessing the benefit to abdominal aortic 
aneurysm screening and other preventative services 
through the Welcome to Medicare Physical Exam. 
(2) ABDOMINAL AORTIC ANEURYSM SCREEN AC-
CESS.—The Secretary shall, to the extent practical, 
identify and implement policies promoting proper 
use of abdominal aortic aneurysm screening among 
Medicare beneficiaries at risk for such aneurysms. 
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SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL 
CANCER SCREENING TESTS REGARDLESS OF 
CODING, SUBSEQUENT DIAGNOSIS, OR ANCIL-
LARY TISSUE REMOVAL. 
(a) IN GENERAL.—Section 1833 of the Social Secu-
rity Act (42 U.S.C. 1395l(b)), as amended by section 
1305(b), is further amended— 
(1) in subsection (a), in the sentence added by 
section 1305(b)(1)(A), by inserting ‘‘(including serv-
ices described in the last sentence of section 
1833(b))’’ after ‘‘preventive services’’; and 
(2) in subsection (b), by adding at the end the 
following new sentence: ‘‘Clause (1) of the first sen-
tence of this subsection shall apply with respect to 
a colorectal cancer screening test regardless of the 
code that is billed for the establishment of a diag-
nosis as a result of the test, or for the removal of 
tissue or other matter or other procedure that is fur-
nished in connection with, as a result of, and in the 
same clinical encounter as, the screening test.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to items and services furnished 
on or after January 1, 2011. 
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SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERV-
ICES FROM COVERAGE UNDER THE MEDI-
CARE SKILLED NURSING FACILITY PROSPEC-
TIVE PAYMENT SYSTEM AND CONSOLIDATED 
PAYMENT. 
(a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 
amended by inserting ‘‘clinical social worker services,’’ 
after ‘‘qualified psychologist services,’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1861(hh)(2) of the Social Security Act (42 U.S.C. 
1395x(hh)(2)) is amended by striking ‘‘and other than 
services furnished to an inpatient of a skilled nursing facil-
ity which the facility is required to provide as a require-
ment for participation’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after October 1, 2010. 
SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES AND MENTAL HEALTH COUN-
SELOR SERVICES. 
(a) COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES.— 
(1) 
COVERAGE
OF
SERVICES.—Section 
1861(s)(2) of the Social Security Act (42 U.S.C. 
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1395x(s)(2)), as amended by section 1235, is 
amended— 
(A) in subparagraph (EE), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (FF), by adding 
‘‘and’’ at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(GG) marriage and family therapist serv-
ices (as defined in subsection (jjj));’’. 
(2) DEFINITION.—Section 1861 of the Social 
Security Act (42 U.S.C. 1395x), as amended by sec-
tions 1233 and 1305, is amended by adding at the 
end the following new subsection: 
‘‘Marriage and Family Therapist Services 
‘‘(jjj)(1) The term ‘marriage and family therapist 
services’ means services performed by a marriage and 
family therapist (as defined in paragraph (2)) for the diag-
nosis and treatment of mental illnesses, which the mar-
riage and family therapist is legally authorized to perform 
under State law (or the State regulatory mechanism pro-
vided by State law) of the State in which such services 
are performed, as would otherwise be covered if furnished 
by a physician or as incident to a physician’s professional 
service, but only if no facility or other provider charges 
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or is paid any amounts with respect to the furnishing of 
such services. 
‘‘(2) The term ‘marriage and family therapist’ means 
an individual who— 
‘‘(A) possesses a master’s or doctoral degree 
which qualifies for licensure or certification as a 
marriage and family therapist pursuant to State 
law; 
‘‘(B) after obtaining such degree has performed 
at least 2 years of clinical supervised experience in 
marriage and family therapy; and 
‘‘(C) is licensed or certified as a marriage and 
family therapist in the State in which marriage and 
family therapist services are performed.’’. 
(3) PROVISION
FOR
PAYMENT
UNDER
PART 
B.—Section 1832(a)(2)(B) of the Social Security 
Act (42 U.S.C. 1395k(a)(2)(B)) is amended by add-
ing at the end the following new clause: 
‘‘(v) marriage and family therapist 
services;’’. 
(4) AMOUNT OF PAYMENT.— 
(A) IN GENERAL.—Section 1833(a)(1) of 
the Social Security Act (42 U.S.C. 1395l(a)(1)) 
is amended— 
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(i) by striking ‘‘and’’ before ‘‘(W)’’; 
and 
(ii) by inserting before the semicolon 
at the end the following: ‘‘, and (X) with 
respect to marriage and family therapist 
services under section 1861(s)(2)(GG), the 
amounts paid shall be 80 percent of the 
lesser of the actual charge for the services 
or 75 percent of the amount determined 
for payment of a psychologist under clause 
(L)’’. 
(B) DEVELOPMENT OF CRITERIA WITH RE-
SPECT
TO
CONSULTATION
WITH
A
HEALTH 
CARE PROFESSIONAL.—The Secretary of Health 
and Human Services shall, taking into consider-
ation concerns for patient confidentiality, de-
velop criteria with respect to payment for mar-
riage and family therapist services for which 
payment may be made directly to the marriage 
and family therapist under part B of title 
XVIII of the Social Security Act (42 U.S.C. 
1395j et seq.) under which such a therapist 
must agree to consult with a patient’s attending 
or primary care physician or nurse practitioner 
in accordance with such criteria. 
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(5) EXCLUSION
OF
MARRIAGE
AND
FAMILY 
THERAPIST SERVICES FROM SKILLED NURSING FA-
CILITY
PROSPECTIVE
PAYMENT
SYSTEM.—Section 
1888(e)(2)(A)(ii) of the Social Security Act (42 
U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 
1307(a), is amended by inserting ‘‘marriage and 
family therapist services (as defined in subsection 
(jjj)(1)),’’ after ‘‘clinical social worker services,’’. 
(6) COVERAGE
OF
MARRIAGE
AND
FAMILY 
THERAPIST SERVICES PROVIDED IN RURAL HEALTH 
CLINICS AND FEDERALLY QUALIFIED HEALTH CEN-
TERS.—Section 1861(aa)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1395x(aa)(1)(B)) is amended by 
striking ‘‘or by a clinical social worker (as defined 
in subsection (hh)(1)),’’ and inserting ‘‘, by a clinical 
social worker (as defined in subsection (hh)(1)), or 
by a marriage and family therapist (as defined in 
subsection (jjj)(2)),’’. 
(7) INCLUSION
OF
MARRIAGE
AND
FAMILY 
THERAPISTS
AS
PRACTITIONERS
FOR
ASSIGNMENT 
OF CLAIMS.—Section 1842(b)(18)(C) of the Social 
Security Act (42 U.S.C. 1395u(b)(18)(C)) is amend-
ed by adding at the end the following new clause: 
‘‘(vii) A marriage and family therapist (as de-
fined in section 1861(jjj)(2)).’’. 
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(b) COVERAGE OF MENTAL HEALTH COUNSELOR 
SERVICES.— 
(1) 
COVERAGE
OF
SERVICES.—Section 
1861(s)(2) of the Social Security Act (42 U.S.C. 
1395x(s)(2)), as previously amended, is further 
amended— 
(A) in subparagraph (FF), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (GG), by inserting 
‘‘and’’ at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(HH) mental health counselor services (as de-
fined in subsection (kkk)(1));’’. 
(2) DEFINITION.—Section 1861 of the Social 
Security Act (42 U.S.C. 1395x), as previously 
amended, is amended by adding at the end the fol-
lowing new subsection: 
‘‘Mental Health Counselor Services 
‘‘(kkk)(1) The term ‘mental health counselor services’ 
means services performed by a mental health counselor (as 
defined in paragraph (2)) for the diagnosis and treatment 
of mental illnesses which the mental health counselor is 
legally authorized to perform under State law (or the 
State regulatory mechanism provided by the State law) of 
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the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as inci-
dent to a physician’s professional service, but only if no 
facility or other provider charges or is paid any amounts 
with respect to the furnishing of such services. 
‘‘(2) The term ‘mental health counselor’ means an 
individual who— 
‘‘(A) possesses a master’s or doctor’s degree 
which qualifies the individual for licensure or certifi-
cation for the practice of mental health counseling in 
the State in which the services are performed; 
‘‘(B) after obtaining such a degree has per-
formed at least 2 years of supervised mental health 
counselor practice; and 
‘‘(C) is licensed or certified as a mental health 
counselor or professional counselor by the State in 
which the services are performed.’’. 
(3) PROVISION
FOR
PAYMENT
UNDER
PART 
B.—Section 1832(a)(2)(B) of the Social Security 
Act (42 U.S.C. 1395k(a)(2)(B)), as amended by 
subsection (a)(3), is further amended— 
(A) by striking ‘‘and’’ at the end of clause 
(iv); 
(B) by adding ‘‘and’’ at the end of clause 
(v); and 
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(C) by adding at the end the following new 
clause: 
‘‘(vi) mental health counselor serv-
ices;’’. 
(4) AMOUNT OF PAYMENT.— 
(A) IN GENERAL.—Section 1833(a)(1) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395l(a)(1)), as amended by subsection (a), is 
further amended— 
(i) by striking ‘‘and’’ before ‘‘(X)’’; 
and 
(ii) by inserting before the semicolon 
at the end the following: ‘‘, and (Y), with 
respect to mental health counselor services 
under 
section 
1861(s)(2)(HH), 
the 
amounts paid shall be 80 percent of the 
lesser of the actual charge for the services 
or 75 percent of the amount determined 
for payment of a psychologist under clause 
(L)’’. 
(B) DEVELOPMENT OF CRITERIA WITH RE-
SPECT TO CONSULTATION WITH A PHYSICIAN.— 
The Secretary of Health and Human Services 
shall, taking into consideration concerns for pa-
tient confidentiality, develop criteria with re-
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spect to payment for mental health counselor 
services for which payment may be made di-
rectly to the mental health counselor under part 
B of title XVIII of the Social Security Act (42 
U.S.C. 1395j et seq.) under which such a coun-
selor must agree to consult with a patient’s at-
tending or primary care physician in accordance 
with such criteria. 
(5) EXCLUSION
OF
MENTAL
HEALTH
COUN-
SELOR SERVICES FROM SKILLED NURSING FACILITY 
PROSPECTIVE
PAYMENT
SYSTEM.—Section 
1888(e)(2)(A)(ii) of the Social Security Act (42 
U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section 
1307(a) and subsection (a), is amended by inserting 
‘‘mental health counselor services (as defined in sec-
tion 1861(kkk)(1)),’’ after ‘‘marriage and family 
therapist 
services 
(as 
defined 
in 
subsection 
(jjj)(1)),’’. 
(6) COVERAGE
OF
MENTAL
HEALTH
COUN-
SELOR
SERVICES
PROVIDED
IN
RURAL
HEALTH 
CLINICS AND FEDERALLY QUALIFIED HEALTH CEN-
TERS.—Section 1861(aa)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1395x(aa)(1)(B)), as amended 
by subsection (a), is amended by striking ‘‘or by a 
marriage and family therapist (as defined in sub-
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section (jjj)(2)),’’ and inserting ‘‘by a marriage and 
family therapist (as defined in subsection (jjj)(2)), 
or a mental health counselor (as defined in sub-
section (kkk)(2)),’’. 
(7) INCLUSION
OF
MENTAL
HEALTH
COUN-
SELORS
AS
PRACTITIONERS
FOR
ASSIGNMENT
OF 
CLAIMS.—Section 1842(b)(18)(C) of the Social Se-
curity Act (42 U.S.C. 1395u(b)(18)(C)), as amended 
by subsection (a)(7), is amended by adding at the 
end the following new clause: 
‘‘(viii) A mental health counselor (as defined in 
section 1861(kkk)(2)).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2011. 
SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN-
TAL HEALTH ADD-ON. 
Section 138(a)(1) of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110–275) 
is amended by striking ‘‘December 31, 2009’’ and insert-
ing ‘‘December 31, 2011’’. 
SEC. 1310. EXPANDING ACCESS TO VACCINES. 
(a) IN
GENERAL.—Paragraph (10) of section 
1861(s) of the Social Security Act (42 U.S.C. 1395w(s)) 
is amended to read as follows: 
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‘‘(10) federally approved and recommended vac-
cines (as defined in subsection (lll)) and their re-
spective administration;’’. 
(b) FEDERALLY APPROVED
AND RECOMMENDED 
VACCINES DEFINED.—Section 1861 of such Act is further 
amended by adding at the end the following new sub-
section: 
‘‘Federally Approved and Recommended Vaccines 
‘‘(lll) The term ‘federally approved and recommended 
vaccine’ means a vaccine that— 
‘‘(1) is licensed under section 351 of the Public 
Health Service Act, approved under the Federal 
Food, Drug, and Cosmetic Act, or authorized for 
emergency use under section 564 of the Federal, 
Food, Drug, and Cosmetic Act; and 
‘‘(2) is recommended by the Director of the 
Centers for Disease Control and Prevention.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1833 of such Act (42 U.S.C. 1395l) 
is amended, in each of subsections (a)(1)(B), 
(a)(2)(G), 
and 
(a)(3)(A), 
by 
striking 
‘‘1861(s)(10)(A)’’ and inserting ‘‘1861(s)(10)’’ each 
place it appears. 
(2) Section 1842(o)(1)(A)(iv) of such Act (42 
U.S.C. 1395u(o)(1)(A)(iv)) is amended— 
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(A) by striking ‘‘subparagraph (A) or (B) 
of’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘and before January 1, 2011, and influ-
enza vaccines furnished on or after January 1, 
2011’’. 
(3) Section 1847A(c)(6) of such Act (42 U.S.C. 
1395w–3a(c)(6)) is amended— 
(A) in subparagraph (D)(i), by inserting ‘‘, 
including a vaccine furnished on or after Janu-
ary 1, 2010’’; and 
(B) by the following new paragraph: 
‘‘(H) IMPLEMENTATION.—Chapter 35 of 
title 44, United States Code shall not apply to 
manufacturer provision of information pursuant 
to section 1927(b)(3)(A)(iii) or subsection 
(f)(2) for purposes of implementation of this 
section.’’. 
(4) Section 1860D–2(e)(1) of such Act (42 
U.S.C. 1395w–102(e)(1)) is amended by striking 
‘‘such term includes a vaccine’’ and all that follows 
through ‘‘its administration) and’’. 
(5) Section 1861(ww)(2)(A) of such Act (42 
U.S.C. 1395x(ww)(2)(A))) is amended by striking 
‘‘Pneumococcal, influenza, and hepatitis B vaccine 
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and administration’’ and inserting ‘‘federally ap-
proved or authorized vaccines (as defined in sub-
section (lll)) and their respective administration’’. 
(6) Section 1927(b)(3)(A)(iii) of such Act (42 
U.S.C. 1396r–8(b)(3)(A)(iii)) is amended, in the 
matter following subclause (III), by inserting 
‘‘(A)(iv) (including influenza vaccines furnished on 
or after January 1, 2011),’’ after ‘‘described in sub-
paragraph’’. 
(7) Section 1847A(f) of such Act (42 U.S.C. 
1395w–3a(f)) is amended— 
(A) by striking ‘‘For’’ and inserting ‘‘(1) 
IN GENERAL.—For’’; 
(B) by indenting paragraph (1), as redes-
ignated in subparagraph (A), 2 ems to the left; 
and— 
(C) by adding at the end the following new 
paragraph: 
‘‘(2) TREATMENT OF CERTAIN MANUFACTUR-
ERS.—In the case of a manufacturer of a drug or 
biological described in subparagraphs (A)(iv), (C), 
(D), (E), or (G) of section 1842(o)(1) that does not 
have a rebate agreement under section 1927(a), no 
payment may be made under this part for such drug 
or biological if such manufacturer does not submit 
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the 
information 
described 
in 
section 
1927(b)(3)(A)(iii) in the same manner as if the 
manufacturer had such a rebate agreement in effect. 
Subparagraphs (C) and (D) of section 1927(b)(3) 
shall apply to information reported pursuant to the 
previous sentence in the same manner as such sub-
paragraphs apply with respect to information re-
ported pursuant to such section.’’.’’. 
(d) EFFECTIVE DATES.—The amendments made— 
(1) by this section (other than by subsection 
(c)(6)) shall apply to vaccines administered on or 
after January 1, 2011; and 
(2) by subsection (c)(6) shall apply to calendar 
quarters beginning on or after January 1, 2010. 
SEC. 1311. EXPANSION OF MEDICARE-COVERED PREVEN-
TIVE SERVICES AT FEDERALLY QUALIFIED 
HEALTH CENTERS. 
(a) IN GENERAL.—Section 1861(aa)(3)(A) of the So-
cial Security Act (42 U.S.C. 1395w (aa)(3)(A)) is amend-
ed to read as follows:
‘‘(A) services of the type described sub-
paragraphs (A) through (C) of paragraph (1) 
and services described in section 1861(iii); 
and’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply not later than January 1, 2011. 
SEC. 1312. INDEPENDENCE AT HOME DEMONSTRATION 
PROGRAM. 
Title XVIII of the Social Security Act is amended by 
inserting after section 1866F, as inserted by section 1302, 
the following new section: 
‘‘INDEPENDENCE AT HOME MEDICAL PRACTICE 
DEMONSTRATION PROGRAM 
‘‘SEC. 1866G. (a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a demonstration program (in this section re-
ferred to as the ‘demonstration program’) to test a 
payment incentive and service delivery model that 
utilizes physician and nurse practitioner directed 
home-based primary care teams designed to reduce 
expenditures and improve health outcomes in the 
provision of items and services under this title to ap-
plicable beneficiaries (as defined in subsection (d)). 
‘‘(2) REQUIREMENT.—The demonstration pro-
gram shall test whether a model described in para-
graph (1), which is accountable for providing com-
prehensive, coordinated, continuous, and accessible 
care to high-need populations at home and coordi-
nating health care across all treatment settings, re-
sults in— 
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‘‘(A) reducing preventable hospitalizations; 
‘‘(B) preventing hospital readmissions; 
‘‘(C) reducing emergency room visits; 
‘‘(D) improving health outcomes commen-
surate with the beneficiaries’ stage of chronic 
illness; 
‘‘(E) improving the efficiency of care, such 
as by reducing duplicative diagnostic and lab-
oratory tests; 
‘‘(F) reducing the cost of health care serv-
ices covered under this title; and 
‘‘(G) achieving beneficiary and family care-
giver satisfaction. 
‘‘(b) INDEPENDENCE
AT HOME MEDICAL PRAC-
TICE.— 
‘‘(1) INDEPENDENCE AT HOME MEDICAL PRAC-
TICE DEFINED.—In this section: 
‘‘(A) IN GENERAL.—The term ‘independ-
ence at home medical practice’ means a legal 
entity that— 
‘‘(i) is comprised of an individual phy-
sician or nurse practitioner or group of 
physicians and nurse practitioners that 
provides care as part of a team that in-
cludes physicians, nurses, physician assist-
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ants, pharmacists, and other health and 
social services staff as appropriate who 
have experience providing home-based pri-
mary care to applicable beneficiaries, make 
in-home visits, and are available 24 hours 
per day, 7 days per week to carry out 
plans of care that are tailored to the indi-
vidual beneficiary’s chronic conditions and 
designed to achieve the results in sub-
section (a); 
‘‘(ii) is organized at least in part for 
the purpose of providing physicians’ serv-
ices; 
‘‘(iii) has documented experience in 
providing home-based primary care serv-
ices to high cost chronically ill bene-
ficiaries, as determined appropriate by the 
Secretary; 
‘‘(iv) includes at least 200 applicable 
beneficiaries as defined in subsection (d); 
‘‘(v) has entered into an agreement 
with the Secretary; 
‘‘(vi) uses electronic health informa-
tion systems, remote monitoring, and mo-
bile diagnostic technology; and 
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‘‘(vii) meets such other criteria as the 
Secretary determines to be appropriate to 
participate in the demonstration program. 
‘‘(B) PHYSICIAN.—The term ‘physician’ in-
cludes, except as the Secretary may otherwise 
provide, any individual who furnishes services 
for which payment may be made as physicians’ 
services and has the medical training or experi-
ence to fulfill the physician’s role described in 
subparagraph (A)(i). 
‘‘(2) PARTICIPATION OF NURSE PRACTITIONERS 
AND PHYSICIAN ASSISTANTS.—Nothing in this sec-
tion shall be construed to prevent a nurse practi-
tioner or physician assistant from participating in, 
or leading, a home-based primary care team as part 
of an independence at home medical practice if— 
‘‘(A) all the requirements of this section 
are met; 
‘‘(B) the nurse practitioner or physician 
assistant, as the case may be, is acting con-
sistent with State law; and 
‘‘(C) the nurse practitioner or physician 
assistant has the medical training or experience 
to fulfill the nurse practitioner or physician as-
sistant role described in paragraph (1)(A)(i). 
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‘‘(3) INCLUSION OF PROVIDERS AND PRACTI-
TIONERS.—Nothing in this subsection shall be con-
strued as preventing an independence at home med-
ical practice from including a provider of services or 
a participating practitioner described in section 
1842(b)(18)(C) that is affiliated with the practice 
under an arrangement structured so that such pro-
vider of services or practitioner participates in the 
demonstration program and shares in any savings 
under the demonstration program. 
‘‘(4) QUALITY
AND
PERFORMANCE
STAND-
ARDS.— 
‘‘(A) IN
GENERAL.—An independence at 
home medical practice participating in the dem-
onstration program shall report on quality 
measures (in such form, manner, and frequency 
as specified by the Secretary, which may be for 
the group, for providers of services and sup-
pliers, or both) and report to the Secretary (in 
a form, manner, and frequency as specified by 
the Secretary) such data as the Secretary deter-
mines appropriate to monitor and evaluate the 
demonstration program. 
‘‘(B) DEVELOPMENT
OF
QUALITY
PER-
FORMANCE
STANDARDS.—The Secretary shall 
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develop quality performance standards for inde-
pendence at home medical practices partici-
pating in the demonstration program. 
‘‘(c) SHARED SAVINGS PAYMENT METHODOLOGY.— 
‘‘(1) ESTABLISHMENT
OF
TARGET
SPENDING 
LEVEL.—The Secretary shall establish annual target 
spending levels for items and services covered under 
parts A and B furnished to applicable beneficiaries 
by qualifying independence at home medical prac-
tices under this section. The Secretary may set an 
aggregate target spending level for all qualifying 
practices, or may set different target spending levels 
for groups of practices or a single practice. Such 
target spending levels may be determined on a per 
capita basis and shall take into account normal vari-
ation in expenditures for items and services covered 
under parts A and B furnished to such beneficiaries. 
The target shall also be adjusted for the size of the 
practice, number of practices included in the target 
spending level, characteristics of applicable bene-
ficiaries and such other factors as the Secretary de-
termines appropriate. The Secretary may periodi-
cally adjust or rebase the target spending level 
under this paragraph. 
‘‘(2) SHARED SAVINGS AMOUNTS.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), qualifying independence at home 
medical practices are eligible to receive an in-
centive payment under this section if aggregate 
expenditures for a year for applicable bene-
ficiaries are less than the target spending level 
for qualifying independence at home medical 
practices for such year. An incentive payment 
for such year shall be equal to a portion (as de-
termined by the Secretary) of the amount by 
which total payments for applicable bene-
ficiaries under parts A and B for such year are 
estimated to be less than 5 percent less than 
the target spending level for such year, as de-
termined by the Secretary. 
‘‘(B) APPORTIONMENT OF SAVINGS.—The 
Secretary shall designate how, and to what ex-
tent, an incentive payment under this section is 
to be apportioned among qualifying independ-
ence at home medical practices, taking into ac-
count the size of the practice, characteristics of 
the individuals enrolled in each practice, per-
formance on quality performance measures, and 
such other factors as the Secretary determines 
appropriate. 
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‘‘(3) SAVINGS TO THE MEDICARE PROGRAM.— 
The Secretary shall limit incentive payments to each 
qualifying independence at home medical practice 
under this paragraph, with respect to a year, as nec-
essary to ensure that the aggregate expenditures for 
items and services under parts A and B with respect 
to applicable beneficiaries for such independence at 
home medical practice (inclusive of shared savings 
payments) do not exceed the amount that the Sec-
retary estimates would be expended for such items 
and services for such beneficiaries during such year 
(taking into account normal variation in expendi-
tures and other factors the Secretary deems appro-
priate) if the demonstration program under this sec-
tion were not implemented, minus 5 percent. 
‘‘(d) APPLICABLE BENEFICIARIES.— 
‘‘(1) DEFINITION.—In this section, the term 
‘applicable beneficiary’ means, with respect to a 
qualifying independence at home medical practice, 
an individual who the practice has determined— 
‘‘(A) is entitled to benefits under part A 
and enrolled for benefits under part B; 
‘‘(B) is not enrolled in a Medicare Advan-
tage plan under part C or a PACE program 
under section 1894; 
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