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is paid to the disparity that exists among poverty lev-
els and the cost of living in such territories and to the 
impact of such disparity on efforts to expand health 
coverage and ensure health care. 
‘‘(2) TERRITORIES DEFINED.—In this subsection, 
the term ‘territories of the United States’ includes the 
Commonwealth of Puerto Rico, the United States Vir-
gin Islands, Guam, the Northern Mariana Islands, 
and any other territory or possession of the United 
States.’’. 
SEC. 10106. AMENDMENTS TO SUBTITLE F. 
(a) Section 1501(a)(2) of this Act is amended to read 
as follows: 
‘‘(2) EFFECTS ON THE NATIONAL ECONOMY AND 
INTERSTATE
COMMERCE.—The effects described in 
this paragraph are the following: 
‘‘(A) The requirement regulates activity that 
is commercial and economic in nature: economic 
and financial decisions about how and when 
health care is paid for, and when health insur-
ance is purchased. In the absence of the require-
ment, some individuals would make an economic 
and financial decision to forego health insurance 
coverage and attempt to self-insure, which in-
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creases financial risks to households and medical 
providers. 
‘‘(B) Health insurance and health care serv-
ices are a significant part of the national econ-
omy. National health spending is projected to in-
crease from $2,500,000,000,000, or 17.6 percent 
of the economy, in 2009 to $4,700,000,000,000 in 
2019. Private health insurance spending is pro-
jected to be $854,000,000,000 in 2009, and pays 
for medical supplies, drugs, and equipment that 
are shipped in interstate commerce. Since most 
health insurance is sold by national or regional 
health insurance companies, health insurance is 
sold in interstate commerce and claims pay-
ments flow through interstate commerce. 
‘‘(C) The requirement, together with the 
other provisions of this Act, will add millions of 
new consumers to the health insurance market, 
increasing the supply of, and demand for, health 
care services, and will increase the number and 
share of Americans who are insured. 
‘‘(D) The requirement achieves near-uni-
versal coverage by building upon and strength-
ening the private employer-based health insur-
ance system, which covers 176,000,000 Ameri-
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cans nationwide. In Massachusetts, a similar re-
quirement has strengthened private employer- 
based coverage: despite the economic downturn, 
the number of workers offered employer-based 
coverage has actually increased. 
‘‘(E) 
The 
economy 
loses 
up 
to 
$207,000,000,000 a year because of the poorer 
health and shorter lifespan of the uninsured. By 
significantly reducing the number of the unin-
sured, the requirement, together with the other 
provisions of this Act, will significantly reduce 
this economic cost. 
‘‘(F) The cost of providing uncompensated 
care to the uninsured was $43,000,000,000 in 
2008. To pay for this cost, health care providers 
pass on the cost to private insurers, which pass 
on the cost to families. This cost-shifting in-
creases family premiums by on average over 
$1,000 a year. By significantly reducing the 
number of the uninsured, the requirement, to-
gether with the other provisions of this Act, will 
lower health insurance premiums. 
‘‘(G) 62 percent of all personal bankruptcies 
are caused in part by medical expenses. By sig-
nificantly increasing health insurance coverage, 
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the requirement, together with the other provi-
sions of this Act, will improve financial security 
for families. 
‘‘(H) Under the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1001 et 
seq.), the Public Health Service Act (42 U.S.C. 
201 et seq.), and this Act, the Federal Govern-
ment has a significant role in regulating health 
insurance. The requirement is an essential part 
of this larger regulation of economic activity, 
and the absence of the requirement would under-
cut Federal regulation of the health insurance 
market. 
‘‘(I) Under sections 2704 and 2705 of the 
Public Health Service Act (as added by section 
1201 of this Act), if there were no requirement, 
many individuals would wait to purchase health 
insurance until they needed care. By signifi-
cantly increasing health insurance coverage, the 
requirement, together with the other provisions of 
this Act, will minimize this adverse selection and 
broaden the health insurance risk pool to include 
healthy individuals, which will lower health in-
surance premiums. The requirement is essential 
to creating effective health insurance markets in 
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which improved health insurance products that 
are guaranteed issue and do not exclude coverage 
of pre-existing conditions can be sold. 
‘‘(J) Administrative costs for private health 
insurance, which were $90,000,000,000 in 2006, 
are 26 to 30 percent of premiums in the current 
individual and small group markets. By signifi-
cantly increasing health insurance coverage and 
the size of purchasing pools, which will increase 
economies of scale, the requirement, together with 
the other provisions of this Act, will significantly 
reduce administrative costs and lower health in-
surance premiums. The requirement is essential 
to creating effective health insurance markets 
that do not require underwriting and eliminate 
its associated administrative costs.’’. 
(b)(1) Section 5000A(b)(1) of the Internal Revenue 
Code of 1986, as added by section 1501(b) of this Act, is 
amended to read as follows: 
‘‘(1) IN GENERAL.—If a taxpayer who is an ap-
plicable individual, or an applicable individual for 
whom the taxpayer is liable under paragraph (3), 
fails to meet the requirement of subsection (a) for 1 
or more months, then, except as provided in sub-
section (e), there is hereby imposed on the taxpayer 
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a penalty with respect to such failures in the amount 
determined under subsection (c).’’. 
(2) Paragraphs (1) and (2) of section 5000A(c) 
of the Internal Revenue Code of 1986, as so added, 
are amended to read as follows: 
‘‘(1) IN GENERAL.—The amount of the penalty 
imposed by this section on any taxpayer for any tax-
able year with respect to failures described in sub-
section (b)(1) shall be equal to the lesser of— 
‘‘(A) the sum of the monthly penalty 
amounts determined under paragraph (2) for 
months in the taxable year during which 1 or 
more such failures occurred, or 
‘‘(B) an amount equal to the national aver-
age premium for qualified health plans which 
have a bronze level of coverage, provide coverage 
for the applicable family size involved, and are 
offered through Exchanges for plan years begin-
ning in the calendar year with or within which 
the taxable year ends. 
‘‘(2) MONTHLY
PENALTY
AMOUNTS.—For pur-
poses of paragraph (1)(A), the monthly penalty 
amount with respect to any taxpayer for any month 
during which any failure described in subsection 
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(b)(1) occurred is an amount equal to 1⁄12 of the 
greater of the following amounts: 
‘‘(A) FLAT DOLLAR AMOUNT.—An amount 
equal to the lesser of— 
‘‘(i) the sum of the applicable dollar 
amounts for all individuals with respect to 
whom such failure occurred during such 
month, or 
‘‘(ii) 300 percent of the applicable dol-
lar amount (determined without regard to 
paragraph (3)(C)) for the calendar year 
with or within which the taxable year ends. 
‘‘(B) 
PERCENTAGE
OF
INCOME.—An 
amount equal to the following percentage of the 
taxpayer’s household income for the taxable year: 
‘‘(i) 0.5 percent for taxable years be-
ginning in 2014. 
‘‘(ii) 1.0 percent for taxable years be-
ginning in 2015. 
‘‘(iii) 2.0 percent for taxable years be-
ginning after 2015.’’. 
(3) Section 5000A(c)(3) of the Internal Revenue Code 
of 1986, as added by section 1501(b) of this Act, is amended 
by striking ‘‘$350’’ and inserting ‘‘$495’’. 
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(c) Section 5000A(d)(2)(A) of the Internal Revenue 
Code of 1986, as added by section 1501(b) of this Act, is 
amended to read as follows: 
‘‘(A) 
RELIGIOUS
CONSCIENCE
EXEMP-
TION.—Such term shall not include any indi-
vidual for any month if such individual has in 
effect an exemption under section 1311(d)(4)(H) 
of the Patient Protection and Affordable Care 
Act which certifies that such individual is— 
‘‘(i) a member of a recognized religious 
sect or division thereof which is described in 
section 1402(g)(1), and 
‘‘(ii) an adherent of established tenets 
or teachings of such sect or division as de-
scribed in such section.’’. 
(d) Section 5000A(e)(1)(C) of the Internal Revenue 
Code of 1986, as added by section 1501(b) of this Act, is 
amended to read as follows: 
‘‘(C) SPECIAL RULES FOR INDIVIDUALS RE-
LATED
TO
EMPLOYEES.—For purposes of sub-
paragraph (B)(i), if an applicable individual is 
eligible for minimum essential coverage through 
an employer by reason of a relationship to an 
employee, the determination under subparagraph 
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(A) shall be made by reference to required con-
tribution of the employee.’’. 
(e) Section 4980H(b) of the Internal Revenue Code of 
1986, as added by section 1513(a) of this Act, is amended 
to read as follows: 
‘‘(b) LARGE EMPLOYERS WITH WAITING PERIODS EX-
CEEDING 60 DAYS.— 
‘‘(1) IN GENERAL.—In the case of any applicable 
large employer which requires an extended waiting 
period to enroll in any minimum essential coverage 
under an employer-sponsored plan (as defined in sec-
tion 5000A(f)(2)), there is hereby imposed on the em-
ployer an assessable payment of $600 for each full- 
time employee of the employer to whom the extended 
waiting period applies. 
‘‘(2) EXTENDED
WAITING
PERIOD.—The term 
‘extended waiting period’ means any waiting period 
(as defined in section 2701(b)(4) of the Public Health 
Service Act) which exceeds 60 days.’’. 
(f)(1) Subparagraph (A) of section 4980H(d)(4) of the 
Internal Revenue Code of 1986, as added by section 1513(a) 
of this Act, is amended by inserting ‘‘, with respect to any 
month,’’ after ‘‘means’’. 
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(2) Section 4980H(d)(2) of the Internal Revenue Code 
of 1986, as added by section 1513(a) of this Act, is amended 
by adding at the end the following: 
‘‘(D) APPLICATION
TO
CONSTRUCTION
IN-
DUSTRY EMPLOYERS.—In the case of any em-
ployer the substantial annual gross receipts of 
which are attributable to the construction indus-
try— 
‘‘(i) subparagraph (A) shall be applied 
by substituting ‘who employed an average of 
at least 5 full-time employees on business 
days during the preceding calendar year 
and whose annual payroll expenses exceed 
$250,000 for such preceding calendar year’ 
for ‘who employed an average of at least 50 
full-time employees on business days during 
the preceding calendar year’, and 
‘‘(ii) subparagraph (B) shall be ap-
plied by substituting ‘5’ for ‘50’.’’. 
(3) The amendment made by paragraph (2) shall 
apply to months beginning after December 31, 2013. 
(g) Section 6056(b) of the Internal Revenue Code of 
1986, as added by section 1514(a) of the Act, is amended 
by adding at the end the following new flush sentence: 
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‘‘The Secretary shall have the authority to review the accu-
racy of the information provided under this subsection, in-
cluding the applicable large employer’s share under para-
graph (2)(C)(iv).’’. 
SEC. 10107. AMENDMENTS TO SUBTITLE G. 
(a) Section 1562 of this Act is amended, in the amend-
ment made by subsection (a)(2)(B)(iii), by striking ‘‘sub-
part 1’’ and inserting ‘‘subparts I and II’’; and 
(b) Subtitle G of title I of this Act is amended— 
(1) by redesignating section 1562 (as amended) 
as section 1563; and 
(2) by inserting after section 1561 the following: 
‘‘SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL 
OF COVERAGE AND ENROLLMENT BY HEALTH 
INSURANCE ISSUERS AND GROUP HEALTH 
PLANS. 
‘‘(a) IN GENERAL.—The Comptroller General of the 
United States (referred to in this section as the ‘Comptroller 
General’) shall conduct a study of the incidence of denials 
of coverage for medical services and denials of applications 
to enroll in health insurance plans, as described in sub-
section (b), by group health plans and health insurance 
issuers. 
‘‘(b) DATA.— 
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‘‘(1) IN GENERAL.—In conducting the study de-
scribed in subsection (a), the Comptroller General 
shall consider samples of data concerning the fol-
lowing: 
‘‘(A)(i) denials of coverage for medical serv-
ices to a plan enrollees, by the types of services 
for which such coverage was denied; and 
‘‘(ii) the reasons such coverage was denied; 
and 
‘‘(B)(i) incidents in which group health 
plans and health insurance issuers deny the ap-
plication of an individual to enroll in a health 
insurance plan offered by such group health plan 
or issuer; and 
‘‘(ii) the reasons such applications are de-
nied. 
‘‘(2) SCOPE OF DATA.— 
‘‘(A) FAVORABLY
RESOLVED
DISPUTES.— 
The data that the Comptroller General considers 
under paragraph (1) shall include data con-
cerning denials of coverage for medical services 
and denials of applications for enrollment in a 
plan by a group health plan or health insurance 
issuer, where such group health plan or health 
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insurance issuer later approves such coverage or 
application. 
‘‘(B) ALL
HEALTH
PLANS.—The study 
under this section shall consider data from var-
ied group health plans and health insurance 
plans offered by health insurance issuers, includ-
ing qualified health plans and health plans that 
are not qualified health plans. 
‘‘(c) REPORT.—Not later than one year after the date 
of enactment of this Act, the Comptroller General shall sub-
mit to the Secretaries of Health and Human Services and 
Labor a report describing the results of the study conducted 
under this section. 
‘‘(d) PUBLICATION OF REPORT.—The Secretaries of 
Health and Human Services and Labor shall make the re-
port described in subsection (c) available to the public on 
an Internet website. 
‘‘SEC. 1563. SMALL BUSINESS PROCUREMENT. 
‘‘Part 19 of the Federal Acquisition Regulation, section 
15 of the Small Business Act (15 U.S.C. 644), and any 
other applicable laws or regulations establishing procure-
ment requirements relating to small business concerns (as 
defined in section 3 of the Small Business Act (15 U.S.C. 
632)) may not be waived with respect to any contract 
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awarded under any program or other authority under this 
Act or an amendment made by this Act.’’. 
SEC. 10108. FREE CHOICE VOUCHERS. 
(a) IN GENERAL.—An offering employer shall provide 
free choice vouchers to each qualified employee of such em-
ployer. 
(b) OFFERING EMPLOYER.—For purposes of this sec-
tion, the term ‘‘offering employer’’ means any employer 
who— 
(1) offers minimum essential coverage to its em-
ployees consisting of coverage through an eligible em-
ployer-sponsored plan; and 
(2) pays any portion of the costs of such plan. 
(c) QUALIFIED EMPLOYEE.—For purposes of this sec-
tion— 
(1) IN
GENERAL.—The term ‘‘qualified em-
ployee’’ means, with respect to any plan year of an 
offering employer, any employee— 
(A) whose required contribution (as deter-
mined under section 5000A(e)(1)(B)) for min-
imum essential coverage through an eligible em-
ployer-sponsored plan— 
(i) exceeds 8 percent of such employee’s 
household income for the taxable year de-
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scribed in section 1412(b)(1)(B) which ends 
with or within in the plan year; and 
(ii) does not exceed 9.8 percent of such 
employee’s household income for such tax-
able year; 
(B) whose household income for such taxable 
year is not greater than 400 percent of the pov-
erty line for a family of the size involved; and 
(C) who does not participate in a health 
plan offered by the offering employer. 
(2) INDEXING.—In the case of any calendar year 
beginning after 2014, the Secretary shall adjust the 8 
percent under paragraph (1)(A)(i) and 9.8 percent 
under paragraph (1)(A)(ii) for the calendar year to 
reflect the rate of premium growth between the pre-
ceding calendar year and 2013 over the rate of in-
come growth for such period. 
(d) FREE CHOICE VOUCHER.— 
(1) AMOUNT.— 
(A) IN GENERAL.—The amount of any free 
choice voucher provided under subsection (a) 
shall be equal to the monthly portion of the cost 
of the eligible employer-sponsored plan which 
would have been paid by the employer if the em-
ployee were covered under the plan with respect 
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to which the employer pays the largest portion of 
the cost of the plan. Such amount shall be equal 
to the amount the employer would pay for an 
employee with self-only coverage unless such em-
ployee elects family coverage (in which case such 
amount shall be the amount the employer would 
pay for family coverage). 
(B) DETERMINATION OF COST.—The cost of 
any health plan shall be determined under the 
rules similar to the rules of section 2204 of the 
Public Health Service Act, except that such 
amount shall be adjusted for age and category of 
enrollment in accordance with regulations estab-
lished by the Secretary. 
(2) USE
OF
VOUCHERS.—An Exchange shall 
credit the amount of any free choice voucher provided 
under subsection (a) to the monthly premium of any 
qualified health plan in the Exchange in which the 
qualified employee is enrolled and the offering em-
ployer shall pay any amounts so credited to the Ex-
change. 
(3) PAYMENT
OF
EXCESS
AMOUNTS.—If the 
amount of the free choice voucher exceeds the amount 
of the premium of the qualified health plan in which 
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the qualified employee is enrolled for such month, 
such excess shall be paid to the employee. 
(e) OTHER DEFINITIONS.—Any term used in this sec-
tion which is also used in section 5000A of the Internal 
Revenue Code of 1986 shall have the meaning given such 
term under such section 5000A. 
(f) EXCLUSION FROM INCOME FOR EMPLOYEE.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 139C the following 
new section: 
‘‘SEC. 139D. FREE CHOICE VOUCHERS. 
‘‘Gross income shall not include the amount of any free 
choice voucher provided by an employer under section 
10108 of the Patient Protection and Affordable Care Act 
to the extent that the amount of such voucher does not exceed 
the amount paid for a qualified health plan (as defined in 
section 1301 of such Act) by the taxpayer.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part III of subchapter B of chapter 1 of such 
Code is amended by inserting after the item relating 
to section 139C the following new item: 
‘‘Sec. 139D. Free choice vouchers.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to vouchers provided 
after December 31, 2013. 
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(g) DEDUCTION ALLOWED TO EMPLOYER.— 
(1) IN GENERAL.—Section 162(a) of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new sentence: ‘‘For purposes of 
paragraph (1), the amount of a free choice voucher 
provided under section 10108 of the Patient Protec-
tion and Affordable Care Act shall be treated as an 
amount for compensation for personal services actu-
ally rendered.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to vouchers provided 
after December 31, 2013. 
(h) VOUCHER TAKEN INTO ACCOUNT IN DETERMINING 
PREMIUM CREDIT.— 
(1) IN GENERAL.—Subsection (c)(2) of section 
36B of the Internal Revenue Code of 1986, as added 
by section 1401, is amended by adding at the end the 
following new subparagraph: 
‘‘(D) EXCEPTION FOR INDIVIDUAL RECEIV-
ING FREE CHOICE VOUCHERS.—The term ‘cov-
erage month’ shall not include any month in 
which such individual has a free choice voucher 
provided under section 10108 of the Patient Pro-
tection and Affordable Care Act.’’. 
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(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to taxable years beginning 
after December 31, 2013. 
(i) COORDINATION WITH EMPLOYER RESPONSIBIL-
ITIES.— 
(1) SHARED RESPONSIBILITY PENALTY.— 
(A) IN GENERAL.—Subsection (c) of section 
4980H of the Internal Revenue Code of 1986, as 
added by section 1513, is amended by adding at 
the end the following new paragraph: 
‘‘(3) SPECIAL
RULES
FOR
EMPLOYERS
PRO-
VIDING FREE CHOICE VOUCHERS.—No assessable pay-
ment shall be imposed under paragraph (1) for any 
month with respect to any employee to whom the em-
ployer provides a free choice voucher under section 
10108 of the Patient Protection and Affordable Care 
Act for such month.’’. 
(B) EFFECTIVE
DATE.—The amendment 
made by this paragraph shall apply to months 
beginning after December 31, 2013. 
(2) 
NOTIFICATION
REQUIREMENT.—Section 
18B(a)(3) of the Fair Labor Standards Act of 1938, 
as added by section 1512, is amended— 
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(A) by inserting ‘‘and the employer does not 
offer a free choice voucher’’ after ‘‘Exchange’’; 
and 
(B) by striking ‘‘will lose’’ and inserting 
‘‘may lose’’. 
(j) EMPLOYER REPORTING.— 
(1) IN GENERAL.—Subsection (a) of section 6056 
of the Internal Revenue Code of 1986, as added by 
section 1514, is amended by inserting ‘‘and every of-
fering employer’’ before ‘‘shall’’. 
(2) OFFERING
EMPLOYERS.—Subsection (f) of 
section 6056 of such Code, as added by section 1514, 
is amended to read as follows: 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) OFFERING EMPLOYER.— 
‘‘(A) IN GENERAL.—The term ‘offering em-
ployer’ means any offering employer (as defined 
in section 10108(b) of the Patient Protection and 
Affordable Care Act) if the required contribution 
(within 
the 
meaning 
of 
section 
5000A(e)(1)(B)(i)) of any employee exceeds 8 
percent of the wages (as defined in section 
3121(a)) paid to such employee by such em-
ployer. 
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‘‘(B) INDEXING.—In the case of any cal-
endar year beginning after 2014, the 8 percent 
under subparagraph (A) shall be adjusted for the 
calendar year to reflect the rate of premium 
growth between the preceding calendar year and 
2013 over the rate of income growth for such pe-
riod. 
‘‘(2) OTHER DEFINITIONS.—Any term used in 
this section which is also used in section 4980H shall 
have the meaning given such term by section 
4980H.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) The heading of section 6056 of such 
Code, as added by section 1514, is amended by 
striking ‘‘LARGE’’ and inserting ‘‘CERTAIN’’. 
(B) Section 6056(b)(2)(C) of such Code is 
amended— 
(i) by inserting ‘‘in the case of an ap-
plicable large employer,’’ before ‘‘the length’’ 
in clause (i); 
(ii) by striking ‘‘and’’ at the end of 
clause (iii); 
(iii) by striking ‘‘applicable large em-
ployer’’ in clause (iv) and inserting ‘‘em-
ployer’’; 
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(iv) by inserting ‘‘and’’ at the end of 
clause (iv); and 
(v) by inserting at the end the fol-
lowing new clause: 
‘‘(v) in the case of an offering em-
ployer, the option for which the employer 
pays the largest portion of the cost of the 
plan and the portion of the cost paid by the 
employer in each of the enrollment cat-
egories under such option,’’. 
(C) Section 6056(d)(2) of such Code is 
amended by inserting ‘‘or offering employer’’ 
after ‘‘applicable large employer’’. 
(D) Section 6056(e) of such Code is amend-
ed by inserting ‘‘or offering employer’’ after ‘‘ap-
plicable large employer’’. 
(E) Section 6724(d)(1)(B)(xxv) of such 
Code, as added by section 1514, is amended by 
striking ‘‘large’’ and inserting ‘‘certain’’. 
(F) Section 6724(d)(2)(HH) of such Code, 
as added by section 1514, is amended by striking 
‘‘large’’ and inserting ‘‘certain’’. 
(G) The table of sections for subpart D of 
part III of subchapter A of chapter 1 of such 
Code, as amended by section 1514, is amended 
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by striking ‘‘Large employers’’ in the item relat-
ing to section 6056 and inserting ‘‘Certain em-
ployers’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to periods beginning 
after December 31, 2013. 
SEC. 10109. DEVELOPMENT OF STANDARDS FOR FINANCIAL 
AND ADMINISTRATIVE TRANSACTIONS. 
(a) ADDITIONAL TRANSACTION STANDARDS AND OP-
ERATING RULES.— 
(1) DEVELOPMENT OF ADDITIONAL TRANSACTION 
STANDARDS
AND
OPERATING
RULES.—Section 
1173(a) of the Social Security Act (42 U.S.C. 1320d– 
2(a)), as amended by section 1104(b)(2), is amend-
ed— 
(A) in paragraph (1)(B), by inserting before 
the period the following: ‘‘, and subject to the re-
quirements under paragraph (5)’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(5) CONSIDERATION OF STANDARDIZATION OF 
ACTIVITIES AND ITEMS.— 
‘‘(A) IN GENERAL.—For purposes of car-
rying out paragraph (1)(B), the Secretary shall 
solicit, not later than January 1, 2012, and not 
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less than every 3 years thereafter, input from en-
tities described in subparagraph (B) on— 
‘‘(i) whether there could be greater uni-
formity in financial and administrative ac-
tivities and items, as determined appro-
priate by the Secretary; and 
‘‘(ii) whether such activities should be 
considered financial and administrative 
transactions (as described in paragraph 
(1)(B)) for which the adoption of standards 
and operating rules would improve the op-
eration of the health care system and reduce 
administrative costs. 
‘‘(B) SOLICITATION
OF
INPUT.—For pur-
poses of subparagraph (A), the Secretary shall 
seek input from— 
‘‘(i) the National Committee on Vital 
and Health Statistics, the Health Informa-
tion Technology Policy Committee, and the 
Health Information Technology Standards 
Committee; and 
‘‘(ii) standard setting organizations 
and stakeholders, as determined appropriate 
by the Secretary.’’. 
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(b) ACTIVITIES AND ITEMS FOR INITIAL CONSIDER-
ATION.—For purposes of section 1173(a)(5) of the Social 
Security Act, as added by subsection (a), the Secretary of 
Health and Human Services (in this section referred to as 
the ‘‘Secretary’’) shall, not later than January 1, 2012, seek 
input on activities and items relating to the following 
areas: 
(1) Whether the application process, including 
the use of a uniform application form, for enrollment 
of health care providers by health plans could be 
made electronic and standardized. 
(2) Whether standards and operating rules de-
scribed in section 1173 of the Social Security Act 
should apply to the health care transactions of auto-
mobile insurance, worker’s compensation, and other 
programs or persons not described in section 1172(a) 
of such Act (42 U.S.C. 1320d–1(a)). 
(3) Whether standardized forms could apply to 
financial audits required by health plans, Federal 
and State agencies (including State auditors, the Of-
fice of the Inspector General of the Department of 
Health and Human Services, and the Centers for 
Medicare & Medicaid Services), and other relevant 
entities as determined appropriate by the Secretary. 
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(4) Whether there could be greater transparency 
and consistency of methodologies and processes used to 
establish claim edits used by health plans (as de-
scribed in section 1171(5) of the Social Security Act 
(42 U.S.C. 1320d(5))). 
(5) Whether health plans should be required to 
publish their timeliness of payment rules. 
(c) ICD CODING CROSSWALKS.— 
(1) ICD–9 TO
ICD–10
CROSSWALK.—The Sec-
retary shall task the ICD–9–CM Coordination and 
Maintenance Committee to convene a meeting, not 
later than January 1, 2011, to receive input from ap-
propriate stakeholders (including health plans, health 
care providers, and clinicians) regarding the cross-
walk between the Ninth and Tenth Revisions of the 
International Classification of Diseases (ICD–9 and 
ICD–10, respectively) that is posted on the website of 
the Centers for Medicare & Medicaid Services, and 
make recommendations about appropriate revisions to 
such crosswalk. 
(2) REVISION OF CROSSWALK.—For purposes of 
the crosswalk described in paragraph (1), the Sec-
retary shall make appropriate revisions and post any 
such revised crosswalk on the website of the Centers 
for Medicare & Medicaid Services. 
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(3) USE OF REVISED CROSSWALK.—For purposes 
of paragraph (2), any revised crosswalk shall be treat-
ed as a code set for which a standard has been adopt-
ed by the Secretary for purposes of section 
1173(c)(1)(B) of the Social Security Act (42 U.S.C. 
1320d–2(c)(1)(B)). 
(4) SUBSEQUENT CROSSWALKS.—For subsequent 
revisions of the International Classification of Dis-
eases that are adopted by the Secretary as a standard 
code set under section 1173(c) of the Social Security 
Act (42 U.S.C. 1320d–2(c)), the Secretary shall, after 
consultation with the appropriate stakeholders, post 
on the website of the Centers for Medicare & Medicaid 
Services a crosswalk between the previous and subse-
quent version of the International Classification of 
Diseases not later than the date of implementation of 
such subsequent revision. 
Subtitle B—Provisions Relating to 
Title II 
PART I—MEDICAID AND CHIP 
SEC. 10201. AMENDMENTS TO THE SOCIAL SECURITY ACT 
AND TITLE II OF THIS ACT. 
(a)(1) Section 1902(a)(10)(A)(i)(IX) of the Social Se-
curity Act (42 U.S.C. 1396a(a)(10)(A)(i)(IX)), as added by 
section 2004(a), is amended to read as follows: 
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‘‘(IX) who— 
‘‘(aa) are under 26 years of 
age; 
‘‘(bb) are not described in or 
enrolled under any of subclauses 
(I) through (VII) of this clause or 
are described in any of such sub-
clauses but have income that ex-
ceeds the level of income applica-
ble under the State plan for eligi-
bility to enroll for medical assist-
ance under such subclause; 
‘‘(cc) were in foster care 
under the responsibility of the 
State on the date of attaining 18 
years of age or such higher age as 
the State has elected under section 
475(8)(B)(iii); and 
‘‘(dd) were enrolled in the 
State plan under this title or 
under a waiver of the plan while 
in such foster care;’’. 
(2) Section 1902(a)(10) of the Social Security Act (42 
U.S.C. 1396a(a)(10), as amended by section 2001(a)(5)(A), 
is amended in the matter following subparagraph (G), by 
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striking ‘‘and (XV)’’ and inserting ‘‘(XV)’’, and by insert-
ing ‘‘and (XVI) if an individual is described in subclause 
(IX) of subparagraph (A)(i) and is also described in sub-
clause (VIII) of that subparagraph, the medical assistance 
shall be made available to the individual through subclause 
(IX) instead of through subclause (VIII)’’ before the semi-
colon. 
(3) Section 2004(d) of this Act is amended by striking 
‘‘2019’’ and inserting ‘‘2014’’. 
(b) Section 1902(k)(2) of the Social Security Act (42 
U.S.C. 1396a(k)(2)), as added by section 2001(a)(4)(A), is 
amended by striking ‘‘January 1, 2011’’ and inserting 
‘‘April 1, 2010’’. 
(c) Section 1905 of the Social Security Act (42 U.S.C. 
1396d), as amended by sections 2001(a)(3), 2001(a)(5)(C), 
2006, and 4107(a)(2), is amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by inserting in clause (xiv), ‘‘or 
1902(a)(10)(A)(i)(IX)’’ before the comma; 
(2) in subsection (b), in the first sentence, by in-
serting ‘‘, (z),’’ before ‘‘and (aa)’’; 
(3) in subsection (y)— 
(A) in paragraph (1)(B)(ii)(II), in the first 
sentence, by inserting ‘‘includes inpatient hos-
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pital services,’’ after ‘‘100 percent of the poverty 
line, that’’; and 
(B) in paragraph (2)(A), by striking ‘‘on 
the date of enactment of the Patient Protection 
and Affordable Care Act’’ and inserting ‘‘as of 
December 1, 2009’’; 
(4) by inserting after subsection (y) the fol-
lowing: 
‘‘(z) EQUITABLE SUPPORT FOR CERTAIN STATES.— 
‘‘(1)(A) During the period that begins on Janu-
ary 1, 2014, and ends on September 30, 2019, not-
withstanding subsection (b), the Federal medical as-
sistance percentage otherwise determined under sub-
section (b) with respect to a fiscal year occurring dur-
ing that period shall be increased by 2.2 percentage 
points for any State described in subparagraph (B) 
for amounts expended for medical assistance for indi-
viduals who are not newly eligible (as defined in sub-
section (y)(2)) individuals described in subclause 
(VIII) of section 1902(a)(10)(A)(i). 
‘‘(B) For purposes of subparagraph (A), a State 
described in this subparagraph is a State that— 
‘‘(i) is an expansion State described in sub-
section (y)(1)(B)(ii)(II); 
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‘‘(ii) the Secretary determines will not re-
ceive any payments under this title on the basis 
of an increased Federal medical assistance per-
centage under subsection (y) for expenditures for 
medical assistance for newly eligible individuals 
(as so defined); and 
‘‘(iii) has not been approved by the Sec-
retary to divert a portion of the DSH allotment 
for a State to the costs of providing medical as-
sistance or other health benefits coverage under a 
waiver that is in effect on July 2009. 
‘‘(2)(A) During the period that begins on January 1, 
2014, and ends on December 31, 2016, notwithstanding sub-
section (b), the Federal medical assistance percentage other-
wise determined under subsection (b) with respect to all or 
any portion of a fiscal year occurring during that period 
shall be increased by .5 percentage point for a State de-
scribed in subparagraph (B) for amounts expended for med-
ical assistance under the State plan under this title or 
under a waiver of that plan during that period. 
‘‘(B) For purposes of subparagraph (A), a State de-
scribed in this subparagraph is a State that— 
‘‘(i) is described in clauses (i) and (ii) of para-
graph (1)(B); and 
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‘‘(ii) is the State with the highest percentage of 
its population insured during 2008, based on the Cur-
rent Population Survey. 
‘‘(3) Notwithstanding subsection (b) and paragraphs 
(1) and (2) of this subsection, the Federal medical assist-
ance percentage otherwise determined under subsection (b) 
with respect to all or any portion of a fiscal year that begins 
on or after January 1, 2017, for the State of Nebraska, with 
respect to amounts expended for newly eligible individuals 
described in subclause (VIII) of section 1902(a)(10)(A)(i), 
shall be determined as provided for under subsection 
(y)(1)(A) (notwithstanding the period provided for in such 
paragraph). 
‘‘(4) The increase in the Federal medical assistance 
percentage for a State under paragraphs (1), (2), or (3) 
shall apply only for purposes of this title and shall not 
apply with respect to— 
‘‘(A) disproportionate share hospital payments 
described in section 1923; 
‘‘(B) payments under title IV; 
‘‘(C) payments under title XXI; and 
‘‘(D) payments under this title that are based on 
the enhanced FMAP described in section 2105(b).’’; 
(5) in subsection (aa), is amended by striking 
‘‘without regard to this subsection and subsection (y)’’ 
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and inserting ‘‘without regard to this subsection, sub-
section (y), subsection (z), and section 10202 of the 
Patient Protection and Affordable Care Act’’ each 
place it appears; 
(6) by adding after subsection (bb), the following: 
‘‘(cc) REQUIREMENT FOR CERTAIN STATES.—Notwith-
standing subsections (y), (z), and (aa), in the case of a State 
that requires political subdivisions within the State to con-
tribute toward the non-Federal share of expenditures re-
quired under the State plan under section 1902(a)(2), the 
State shall not be eligible for an increase in its Federal 
medical assistance percentage under such subsections if it 
requires that political subdivisions pay a greater percentage 
of the non-Federal share of such expenditures, or a greater 
percentage of the non-Federal share of payments under sec-
tion 1923, than the respective percentages that would have 
been required by the State under the State plan under this 
title, State law, or both, as in effect on December 31, 2009, 
and without regard to any such increase. Voluntary con-
tributions by a political subdivision to the non-Federal 
share of expenditures under the State plan under this title 
or to the non-Federal share of payments under section 1923, 
shall not be considered to be required contributions for pur-
poses of this subsection. The treatment of voluntary con-
tributions, and the treatment of contributions required by 
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a State under the State plan under this title, or State law, 
as provided by this subsection, shall also apply to the in-
creases in the Federal medical assistance percentage under 
section 5001 of the American Recovery and Reinvestment 
Act of 2009.’’. 
(d) Section 1108(g)(4)(B) of the Social Security Act 
(42 U.S.C. 1308(g)(4)(B)), as added by section 2005(b), is 
amended by striking ‘‘income eligibility level in effect for 
that population under title XIX or under a waiver’’ and 
inserting ‘‘the highest income eligibility level in effect for 
parents under the commonwealth’s or territory’s State plan 
under title XIX or under a waiver of the plan’’. 
(e)(1) Section 1923(f) of the Social Security Act (42 
U.S.C. 1396r–4(f)), as amended by section 2551, is amend-
ed— 
(A) in paragraph (6)— 
(i) by striking the paragraph heading and 
inserting the following: ‘‘ALLOTMENT
ADJUST-
MENTS’’; and 
(ii) in subparagraph (B), by adding at the 
end the following: 
‘‘(iii) ALLOTMENT FOR 2D, 3RD, AND 
4TH QUARTER OF FISCAL YEAR 2012, FISCAL 
YEAR
2013, 
AND
SUCCEEDING
FISCAL 
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YEARS.—Notwithstanding the table set forth 
in paragraph (2) or paragraph (7): 
‘‘(I) 2D, 3RD, AND 4TH QUARTER 
OF FISCAL YEAR 2012.—The DSH allot-
ment for Hawaii for the 2d, 3rd, and 
4th quarters of fiscal year 2012 shall 
be $7,500,000. 
‘‘(II) TREATMENT AS A LOW-DSH 
STATE FOR FISCAL YEAR 2013 AND SUC-
CEEDING FISCAL YEARS.—With respect 
to fiscal year 2013, and each fiscal 
year thereafter, the DSH allotment for 
Hawaii shall be increased in the same 
manner as allotments for low DSH 
States are increased for such fiscal 
year under clause (iii) of paragraph 
(5)(B). 
‘‘(III) CERTAIN
HOSPITAL
PAY-
MENTS.—The Secretary may not im-
pose a limitation on the total amount 
of payments made to hospitals under 
the QUEST section 1115 Demonstra-
tion Project except to the extent that 
such limitation is necessary to ensure 
that a hospital does not receive pay-
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ments in excess of the amounts de-
scribed in subsection (g), or as nec-
essary to ensure that such payments 
under the waiver and such payments 
pursuant to the allotment provided in 
this clause do not, in the aggregate in 
any year, exceed the amount that the 
Secretary determines is equal to the 
Federal medical assistance percentage 
component attributable to dispropor-
tionate share hospital payment adjust-
ments for such year that is reflected in 
the budget neutrality provision of the 
QUEST Demonstration Project.’’; and 
(B) in paragraph (7)— 
(i) in subparagraph (A), in the matter pre-
ceding clause (i), by striking ‘‘subparagraph 
(E)’’ and inserting ‘‘subparagraphs (E) and 
(G)’’; 
(ii) in subparagraph (B)— 
(I) in clause (i), by striking subclauses 
(I) and (II), and inserting the following: 
‘‘(I) if the State is a low DSH 
State described in paragraph (5)(B) 
and has spent not more than 99.90 
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percent of the DSH allotments for the 
State on average for the period of fiscal 
years 2004 through 2008, as of Sep-
tember 30, 2009, the applicable per-
centage is equal to 25 percent; 
‘‘(II) if the State is a low DSH 
State described in paragraph (5)(B) 
and has spent more than 99.90 percent 
of the DSH allotments for the State on 
average for the period of fiscal years 
2004 through 2008, as of September 
30, 2009, the applicable percentage is 
equal to 17.5 percent; 
‘‘(III) if the State is not a low 
DSH State described in paragraph 
(5)(B) and has spent not more than 
99.90 percent of the DSH allotments 
for the State on average for the period 
of fiscal years 2004 through 2008, as of 
September 30, 2009, the applicable 
percentage is equal to 50 percent; and 
‘‘(IV) if the State is not a low 
DSH State described in paragraph 
(5)(B) and has spent more than 99.90 
percent of the DSH allotments for the 
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State on average for the period of fiscal 
years 2004 through 2008, as of Sep-
tember 30, 2009, the applicable per-
centage is equal to 35 percent.’’; 
(II) in clause (ii), by striking sub-
clauses (I) and (II), and inserting the fol-
lowing: 
‘‘(I) if the State is a low DSH 
State described in paragraph (5)(B) 
and has spent not more than 99.90 
percent of the DSH allotments for the 
State on average for the period of fiscal 
years 2004 through 2008, as of Sep-
tember 30, 2009, the applicable per-
centage is equal to the product of the 
percentage reduction in uncovered in-
dividuals for the fiscal year from the 
preceding fiscal year and 27.5 percent; 
‘‘(II) if the State is a low DSH 
State described in paragraph (5)(B) 
and has spent more than 99.90 percent 
of the DSH allotments for the State on 
average for the period of fiscal years 
2004 through 2008, as of September 
30, 2009, the applicable percentage is 
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equal to the product of the percentage 
reduction in uncovered individuals for 
the fiscal year from the preceding fiscal 
year and 20 percent; 
‘‘(III) if the State is not a low 
DSH State described in paragraph 
(5)(B) and has spent not more than 
99.90 percent of the DSH allotments 
for the State on average for the period 
of fiscal years 2004 through 2008, as of 
September 30, 2009, the applicable 
percentage is equal to the product of 
the percentage reduction in uncovered 
individuals for the fiscal year from the 
preceding fiscal year and 55 percent; 
and 
‘‘(IV) if the State is not a low 
DSH State described in paragraph 
(5)(B) and has spent more than 99.90 
percent of the DSH allotments for the 
State on average for the period of fiscal 
years 2004 through 2008, as of Sep-
tember 30, 2009, the applicable per-
centage is equal to the product of the 
percentage reduction in uncovered in-
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dividuals for the fiscal year from the 
preceding fiscal year and 40 percent.’’; 
(III) in subparagraph (E), by striking 
‘‘35 percent’’ and inserting ‘‘50 percent’’; 
and 
(IV) by adding at the end the fol-
lowing: 
‘‘(G) NONAPPLICATION.—The preceding pro-
visions of this paragraph shall not apply to the 
DSH allotment determined for the State of Ha-
waii for a fiscal year under paragraph (6).’’. 
(f) Section 2551 of this Act is amended by striking 
subsection (b). 
(g) Section 2105(d)(3)(B) of the Social Security Act 
(42 U.S.C. 1397ee(d)(3)(B)), 
as 
added 
by 
section 
2101(b)(1), is amended by adding at the end the following: 
‘‘For purposes of eligibility for premium assistance for the 
purchase of a qualified health plan under section 36B of 
the Internal Revenue Code of 1986 and reduced cost-sharing 
under section 1402 of the Patient Protection and Affordable 
Care Act, children described in the preceding sentence shall 
be deemed to be ineligible for coverage under the State child 
health plan.’’. 
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(h) Clause (i) of subparagraph (C) of section 513(b)(2) 
of the Social Security Act, as added by section 2953 of this 
Act, is amended to read as follows: 
‘‘(i) Healthy relationships, including 
marriage and family interactions.’’. 
(i) Section 1115 of the Social Security Act (42 U.S.C. 
1315) is amended by inserting after subsection (c) the fol-
lowing: 
‘‘(d)(1) An application or renewal of any experi-
mental, pilot, or demonstration project undertaken under 
subsection (a) to promote the objectives of title XIX or XXI 
in a State that would result in an impact on eligibility, 
enrollment, benefits, cost-sharing, or financing with respect 
to a State program under title XIX or XXI (in this sub-
section referred to as a ‘demonstration project’) shall be con-
sidered by the Secretary in accordance with the regulations 
required to be promulgated under paragraph (2). 
‘‘(2) Not later than 180 days after the date of enact-
ment of this subsection, the Secretary shall promulgate reg-
ulations relating to applications for, and renewals of, a 
demonstration project that provide for— 
‘‘(A) a process for public notice and comment at 
the State level, including public hearings, sufficient to 
ensure a meaningful level of public input; 
‘‘(B) requirements relating to— 
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‘‘(i) the goals of the program to be imple-
mented or renewed under the demonstration 
project; 
‘‘(ii) the expected State and Federal costs 
and coverage projections of the demonstration 
project; and 
‘‘(iii) the specific plans of the State to en-
sure that the demonstration project will be in 
compliance with title XIX or XXI; 
‘‘(C) a process for providing public notice and 
comment after the application is received by the Sec-
retary, that is sufficient to ensure a meaningful level 
of public input; 
‘‘(D) a process for the submission to the Sec-
retary of periodic reports by the State concerning the 
implementation of the demonstration project; and 
‘‘(E) a process for the periodic evaluation by the 
Secretary of the demonstration project. 
‘‘(3) The Secretary shall annually report to Congress 
concerning actions taken by the Secretary with respect to 
applications for demonstration projects under this section.’’. 
(j) Subtitle F of title III of this Act is amended by 
adding at the end the following: 
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‘‘SEC. 3512. GAO STUDY AND REPORT ON CAUSES OF AC-
TION. 
‘‘(a) STUDY.— 
‘‘(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study of whether the 
development, recognition, or implementation of any 
guideline or other standards under a provision de-
scribed in paragraph (2) would result in the estab-
lishment of a new cause of action or claim. 
‘‘(2) PROVISIONS
DESCRIBED.—The provisions 
described in this paragraph include the following: 
‘‘(A) Section 2701 (adult health quality 
measures). 
‘‘(B) Section 2702 (payment adjustments 
for health care acquired conditions). 
‘‘(C) Section 3001 (Hospital Value-Based 
Purchase Program). 
‘‘(D) Section 3002 (improvements to the 
Physician Quality Reporting Initiative). 
‘‘(E) Section 3003 (improvements to the 
Physician Feedback Program). 
‘‘(F) Section 3007 (value based payment 
modifier under physician fee schedule). 
‘‘(G) Section 3008 (payment adjustment for 
conditions acquired in hospitals). 
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‘‘(H) Section 3013 (quality measure devel-
opment). 
‘‘(I) Section 3014 (quality measurement). 
‘‘(J) Section 3021 (Establishment of Center 
for Medicare and Medicaid Innovation). 
‘‘(K) Section 3025 (hospital readmission re-
duction program). 
‘‘(L) Section 3501 (health care delivery sys-
tem research, quality improvement). 
‘‘(M) Section 4003 (Task Force on Clinical 
and Preventive Services). 
‘‘(N) Section 4301 (research to optimize de-
liver of public health services). 
‘‘(b) REPORT.—Not later than 2 years after the date 
of enactment of this Act, the Comptroller General of the 
United States shall submit to the appropriate committees 
of Congress, a report containing the findings made by the 
Comptroller General under the study under subsection (a).’’. 
SEC. 10202. INCENTIVES FOR STATES TO OFFER HOME AND 
COMMUNITY-BASED SERVICES AS A LONG- 
TERM 
CARE 
ALTERNATIVE 
TO 
NURSING 
HOMES. 
(a) STATE BALANCING INCENTIVE PAYMENTS PRO-
GRAM.—Notwithstanding section 1905(b) of the Social Se-
curity Act (42 U.S.C. 1396d(b)), in the case of a balancing 
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incentive payment State, as defined in subsection (b), that 
meets the conditions described in subsection (c), during the 
balancing incentive period, the Federal medical assistance 
percentage determined for the State under section 1905(b) 
of such Act and, if applicable, increased under subsection 
(z) or (aa) shall be increased by the applicable percentage 
points determined under subsection (d) with respect to eligi-
ble medical assistance expenditures described in subsection 
(e). 
(b) BALANCING INCENTIVE PAYMENT STATE.—A bal-
ancing incentive payment State is a State— 
(1) in which less than 50 percent of the total ex-
penditures for medical assistance under the State 
Medicaid program for a fiscal year for long-term 
services and supports (as defined by the Secretary 
under subsection (f))(1)) are for non-institutionally- 
based long-term services and supports described in 
subsection (f)(1)(B); 
(2) that submits an application and meets the 
conditions described in subsection (c); and 
(3) that is selected by the Secretary to partici-
pate in the State balancing incentive payment pro-
gram established under this section. 
(c) CONDITIONS.—The conditions described in this 
subsection are the following: 
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(1) APPLICATION.—The State submits an appli-
cation to the Secretary that includes, in addition to 
such other information as the Secretary shall re-
quire— 
(A) a proposed budget that details the 
State’s plan to expand and diversify medical as-
sistance for non-institutionally-based long-term 
services and supports described in subsection 
(f)(1)(B) under the State Medicaid program dur-
ing the balancing incentive period and achieve 
the target spending percentage applicable to the 
State under paragraph (2), including through 
structural changes to how the State furnishes 
such assistance, such as through the establish-
ment of a ‘‘no wrong door—single entry point 
system’’, optional presumptive eligibility, case 
management services, and the use of core stand-
ardized assessment instruments, and that in-
cludes a description of the new or expanded of-
ferings of such services that the State will pro-
vide and the projected costs of such services; and 
(B) in the case of a State that proposes to 
expand the provision of home and community- 
based services under its State Medicaid program 
through a State plan amendment under section 
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1915(i) of the Social Security Act, at the option 
of the State, an election to increase the income 
eligibility for such services from 150 percent of 
the poverty line to such higher percentage as the 
State may establish for such purpose, not to ex-
ceed 300 percent of the supplemental security in-
come 
benefit 
rate 
established 
by 
section 
1611(b)(1) of the Social Security Act (42 U.S.C. 
1382(b)(1)). 
(2) TARGET SPENDING PERCENTAGES.— 
(A) In the case of a balancing incentive 
payment State in which less than 25 percent of 
the total expenditures for long-term services and 
supports under the State Medicaid program for 
fiscal year 2009 are for home and community- 
based services, the target spending percentage for 
the State to achieve by not later than October 1, 
2015, is that 25 percent of the total expenditures 
for long-term services and supports under the 
State Medicaid program are for home and com-
munity-based services. 
(B) In the case of any other balancing in-
centive payment State, the target spending per-
centage for the State to achieve by not later than 
October 1, 2015, is that 50 percent of the total 
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expenditures for long-term services and supports 
under the State Medicaid program are for home 
and community-based services. 
(3) MAINTENANCE
OF
ELIGIBILITY
REQUIRE-
MENTS.—The State does not apply eligibility stand-
ards, methodologies, or procedures for determining eli-
gibility for medical assistance for non-institutionally- 
based long-term services and supports described in 
subsection (f)(1)(B) under the State Medicaid pro-
gram that are more restrictive than the eligibility 
standards, methodologies, or procedures in effect for 
such purposes on December 31, 2010. 
(4) USE
OF
ADDITIONAL
FUNDS.—The State 
agrees to use the additional Federal funds paid to the 
State as a result of this section only for purposes of 
providing new or expanded offerings of non-institu-
tionally-based long-term services and supports de-
scribed in subsection (f)(1)(B) under the State Med-
icaid program. 
(5) STRUCTURAL CHANGES.—The State agrees to 
make, not later than the end of the 6-month period 
that begins on the date the State submits an applica-
tion under this section, the following changes: 
(A) ‘‘NO
WRONG
DOOR—SINGLE
ENTRY 
POINT
SYSTEM’’.—Development of a statewide 
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system to enable consumers to access all long- 
term services and supports through an agency, 
organization, coordinated network, or portal, in 
accordance with such standards as the State 
shall establish and that shall provide informa-
tion regarding the availability of such services, 
how to apply for such services, referral services 
for services and supports otherwise available in 
the community, and determinations of financial 
and functional eligibility for such services and 
supports, or assistance with assessment processes 
for financial and functional eligibility. 
(B) CONFLICT-FREE
CASE
MANAGEMENT 
SERVICES.—Conflict-free case management serv-
ices to develop a service plan, arrange for serv-
ices and supports, support the beneficiary (and, 
if appropriate, the beneficiary’s caregivers) in 
directing the provision of services and supports 
for the beneficiary, and conduct ongoing moni-
toring to assure that services and supports are 
delivered to meet the beneficiary’s needs and 
achieve intended outcomes. 
(C) CORE STANDARDIZED ASSESSMENT IN-
STRUMENTS.—Development of core standardized 
assessment instruments for determining eligi-
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bility for non-institutionally-based long-term 
services and supports described in subsection 
(f)(1)(B), which shall be used in a uniform man-
ner throughout the State, to determine a bene-
ficiary’s needs for training, support services, 
medical care, transportation, and other services, 
and develop an individual service plan to ad-
dress such needs. 
(6) DATA COLLECTION.—The State agrees to col-
lect from providers of services and through such other 
means as the State determines appropriate the fol-
lowing data: 
(A) SERVICES
DATA.—Services data from 
providers of non-institutionally-based long-term 
services and supports described in subsection 
(f)(1)(B) on a per-beneficiary basis and in ac-
cordance with such standardized coding proce-
dures as the State shall establish in consultation 
with the Secretary. 
(B) QUALITY DATA.—Quality data on a se-
lected set of core quality measures agreed upon 
by the Secretary and the State that are linked to 
population-specific outcomes measures and acces-
sible to providers. 
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(C) 
OUTCOMES
MEASURES.—Outcomes 
measures data on a selected set of core popu-
lation-specific outcomes measures agreed upon by 
the Secretary and the State that are accessible to 
providers and include— 
(i) measures of beneficiary and family 
caregiver experience with providers; 
(ii) measures of beneficiary and family 
caregiver satisfaction with services; and 
(iii) measures for achieving desired 
outcomes appropriate to a specific bene-
ficiary, including employment, participa-
tion in community life, health stability, and 
prevention of loss in function. 
(d) APPLICABLE PERCENTAGE POINTS INCREASE IN 
FMAP.—The applicable percentage points increase is— 
(1) in the case of a balancing incentive payment 
State subject to the target spending percentage de-
scribed in subsection (c)(2)(A), 5 percentage points; 
and 
(2) in the case of any other balancing incentive 
payment State, 2 percentage points. 
(e) 
ELIGIBLE
MEDICAL
ASSISTANCE
EXPENDI-
TURES.— 
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(1) IN
GENERAL.—Subject to paragraph (2), 
medical assistance described in this subsection is med-
ical assistance for non-institutionally-based long-term 
services and supports described in subsection (f)(1)(B) 
that is provided by a balancing incentive payment 
State under its State Medicaid program during the 
balancing incentive payment period. 
(2) LIMITATION ON PAYMENTS.—In no case may 
the aggregate amount of payments made by the Sec-
retary to balancing incentive payment States under 
this section during the balancing incentive period ex-
ceed $3,000,000,000. 
(f) DEFINITIONS.—In this section: 
(1) LONG-TERM SERVICES AND SUPPORTS DE-
FINED.—The term ‘‘long-term services and supports’’ 
has the meaning given that term by Secretary and 
may include any of the following (as defined for pur-
poses of State Medicaid programs): 
(A) INSTITUTIONALLY-BASED
LONG-TERM 
SERVICES AND SUPPORTS.—Services provided in 
an institution, including the following: 
(i) Nursing facility services. 
(ii) Services in an intermediate care 
facility for the mentally retarded described 
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