		I
		111th CONGRESS
		1st Session
		H. R. 2520
		IN THE HOUSE OF REPRESENTATIVES

			May 20, 2009
			Mr. Ryan of Wisconsin
			 (for himself and Mr. Nunes) introduced
			 the following bill; which was referred to the
			 Committee on Energy and
			 Commerce, and in addition to the Committee on
			 Ways and Means, for a
			 period to be subsequently determined by the Speaker, in each case for
			 consideration of such provisions as fall within the jurisdiction of the
			 committee concerned

		A BILL
		To provide comprehensive solutions for the health care
		  system of the United States, and for other purposes.

		1.Short title; table of contents
			(a)Short titleThis Act may be cited as the
			 Patients' Choice
			 Act.
			(b)Table of contentsThe table of contents for this Act is as
			 follows:

					Sec. 1. Short title; table of contents.
					TITLE I—Investing in prevention
					Sec. 101. Strategic approach to outcome-based
				prevention.
					Sec. 102. State grants for outcome-based prevention
				effort.
					Sec. 103. Focusing the food stamp program on
				nutrition.
					Sec. 104. Immunizations.
					TITLE II—State-based health care exchanges
					Sec. 201. State-based health care exchanges.
					Sec. 202. Requirements.
					Sec. 203. State Exchange incentives.
					TITLE III—Fair tax treatment for all Americans to afford health
				care
					Sec. 300. Reference.
					Subtitle A—Refundable and advanceable credit for certain
				health insurance coverage
					Sec. 301. Refundable and advanceable credit for certain health
				insurance coverage.
					Sec. 302. Requiring employer transparency about employee
				benefits.
					Sec. 303. Changes to existing tax preferences for medical
				coverage, etc., for individuals eligible for qualified health insurance
				credit.
					Subtitle B—Health Savings Accounts
					Sec. 311. Improvements to health savings accounts.
					Sec. 312. Exception to requirement for employers to make
				comparable health savings account contributions.
					TITLE IV—Fairness for every American patient
					Subtitle A—Medicaid modernization
					Sec. 401. Medicaid modernization.
					Sec. 402. Outreach.
					Sec. 403. Transition rules; miscellaneous
				provisions.
					Subtitle B—Supplemental Health Care Assistance for Low-Income
				Families
					Sec. 411. Supplemental Health Care Assistance for Low-Income
				Families.
					TITLE V—Fixing Medicare for American seniors
					Subtitle A—Increasing programmatic efficiency, economy, and
				accountability
					Sec. 501. Eliminating inefficiencies and increasing choice in
				Medicare Advantage.
					Sec. 502. Medicare Accountable Care Organization demonstration
				program.
					Sec. 503. Reducing government handouts to wealthier
				seniors.
					Sec. 504. Rewarding prevention.
					Sec. 505. Promoting healthcare provider
				transparency.
					Sec. 506. Availability of Medicare and Medicaid claims and
				patient encounter data.
					Subtitle B—Reducing fraud and abuse
					Sec. 511. Requiring the Secretary of Health and Human Services
				to change the Medicare beneficiary identifier used to identify Medicare
				beneficiaries under the Medicare program.
					Sec. 512. Use of technology for real-time data
				review.
					Sec. 513. Detection of medicare fraud and abuse.
					Sec. 514. Edits on 855S
				Medicare enrollment application and exemption of pharmacists from surety bond
				requirement.
					Sec. 515. GAO study and report on effectiveness of surety bond
				requirements for suppliers of durable medical equipment in combating
				fraud.
					TITLE VI—Ending lawsuit abuse
					Sec. 601. State grants to create health court
				solutions.
					TITLE VII—Promoting health information technology
					Subtitle A—Assisting the development of health information
				technology
					Sec. 701. Purpose.
					Sec. 702. Health record banking.
					Sec. 703. Application of Federal and State security and
				confidentiality standards.
					Subtitle B—Removing barriers to the use of health information
				technology to better coordinate health care
					Sec. 711. Safe harbors to antikickback civil penalties and
				criminal penalties for provision of health information technology and training
				services.
					Sec. 712. Exception to limitation on certain physician
				referrals (under Stark) for provision of health information technology and
				training services to health care professionals.
					Sec. 713. Rules of construction regarding use of
				consortia.
					TITLE VIII—Health Care Services Commission
					Subtitle A—Establishment and general duties
					Sec. 801. Establishment.
					Sec. 802. General authorities and duties.
					Sec. 803. Dissemination.
					Subtitle B—Forum for quality and effectiveness in health
				care
					Sec. 811. Establishment of office.
					Sec. 812. Membership.
					Sec. 813. Duties.
					Sec. 814. Adoption and enforcement of guidelines and
				standards.
					Sec. 815. Additional requirements.
					Subtitle C—General provisions
					Sec. 821. Certain administrative authorities.
					Sec. 822. Funding.
					Sec. 823. Definitions.
					Subtitle D—Terminations and transition
					Sec. 831. Termination of Agency for Healthcare Research and
				Quality.
					Sec. 832. Transition.
					Subtitle E—Independent Health Record Trust
					Sec. 841. Short title.
					Sec. 842. Purpose.
					Sec. 843. Definitions.
					Sec. 844. Establishment, certification, and membership of
				Independent Health Record Trusts.
					Sec. 845. Duties of IHRT to IHRT participants.
					Sec. 846. Availability and use of information from records in
				IHRT consistent with privacy protections and agreements.
					Sec. 847. Voluntary nature of trust participation and
				information sharing.
					Sec. 848. Financing of activities.
					Sec. 849. Regulatory oversight.
					TITLE IX—Miscellaneous
					Sec. 901. Health care choice for veterans.
					Sec. 902. Health care choice for Indians.
					Sec. 903. Termination of Federal Coordinating Council for
				Comparative Effectiveness Research.
					Sec. 904. HHS and GAO joint study and report on costs of the 5
				medical conditions that have the greatest impact.

			IInvesting in prevention
			101.Strategic approach to outcome-based
			 prevention
				(a)Interagency coordinating committee
					(1)In generalThe Secretary of Health and Human Services
			 (referred to in this title as the Secretary) shall convene an
			 interagency coordinating committee to develop a national strategic plan for
			 prevention. The Secretary shall serve as the chairperson of the
			 committee.
					(2)CompositionIn carrying out paragraph (1), the
			 Secretary shall include the participation of—
						(A)the Director of the National Institutes of
			 Health;
						(B)the Director of the Centers for Disease
			 Control and Prevention;
						(C)the Administrator of the Agency for
			 Healthcare Research and Quality;
						(D)the Administrator of the Substance Abuse
			 and Mental Health Services Administration;
						(E)the Administrator of the Health Resources
			 and Services Administration;
						(F)the Secretary of Agriculture;
						(G)the Director of the Centers for Medicare
			 & Medicaid Services;
						(H)the Administrator of the Environmental
			 Protection Agency;
						(I)the Director of the Indian Health
			 Service;
						(J)the Administrator of the Administration on
			 Aging;
						(K)the Secretary of Veterans Affairs;
						(L)the Secretary of Defense;
						(M)the Secretary of Education; and
						(N)the Secretary of Labor.
						(3)Report and planNot later than 1 year after the date of
			 enactment of this Act, the Secretary, acting through the coordinating committee
			 convened under paragraph (1), shall submit to Congress a report concerning the
			 recommendation of the committee for health promotion and disease prevention
			 activities. Such report shall include a specific strategic plan that shall
			 include—
						(A)a list of national priorities on health
			 promotion and disease prevention to address lifestyle behavior modification
			 (smoking cessation, proper nutrition, and appropriate exercise) and the
			 prevention measures for the 5 leading disease killers in the United
			 States;
						(B)specific science-based initiatives to
			 achieve the measurable goals of Healthy People 2010 regarding nutrition,
			 exercise, and smoking cessation, and targeting the 5 leading disease killers in
			 the United States;
						(C)specific plans for consolidating Federal
			 health programs and Centers that exist to promote healthy behavior and reduce
			 disease risk (including eliminating programs and offices determined to be
			 ineffective in meeting the priority goals of Healthy People 2010), that include
			 transferring the nutrition guideline development responsibility from the
			 Secretary of Agriculture to the Director of the Centers for Disease Control and
			 Prevention;
						(D)specific plans to ensure that all Federal
			 health care programs are fully coordinated with science-based prevention
			 recommendations promulgated by the Director of the Centers for Disease Control
			 and Prevention;
						(E)specific plans to ensure that all
			 non-Department of Health and Human Services prevention programs are based on
			 the science-based guidelines developed by the Centers for Disease Control and
			 Prevention under subparagraph (D); and
						(F)a list of new non-Federal and
			 non-government partners identified by the committee to build Federal capacity
			 in health promotion and disease prevention efforts.
						(4)Annual request to give
			 testimonyThe Secretary shall
			 annually request an opportunity to testify before Congress concerning the
			 progress made by the United States in meeting the outcome-based standards of
			 Healthy People 2010 with respect to disease prevention and measurable outcomes
			 and effectiveness of Federal programs related to this goal.
					(5)Periodic reviewsThe Secretary shall conduct periodic
			 reviews, not less than every 5 years, and grading of every Federal disease
			 prevention and health promotion initiatives, programs, and agencies. Such
			 reviews shall be evaluated based on effectiveness in meeting metrics-based
			 goals with an analysis posted on such agencies’ public Internet
			 websites.
					(b)Federal messaging on health promotion and
			 disease prevention
					(1)Media campaigns
						(A)In generalNot later than 1 year after the date of
			 enactment of this Act, the Secretary, acting through the Director of the
			 Centers for Disease Control and Prevention, shall establish and implement a
			 national science-based media campaign on health promotion and disease
			 prevention.
						(B)Requirements of campaignThe campaign implemented under subparagraph
			 (A)—
							(i)shall be designed to address proper
			 nutrition, regular exercise, smoking cessation, obesity reduction, the 5
			 leading disease killers in the United States, and secondary prevention through
			 disease screening promotion;
							(ii)shall be carried out through competitively
			 bid contracts awarded to entities providing for the professional production and
			 design of such campaign;
							(iii)may include the use of television, radio,
			 Internet, and other commercial marketing venues and may be targeted to specific
			 age groups based on peer-reviewed social research;
							(iv)shall not be duplicative of any other
			 Federal efforts relating to health promotion and disease prevention; and
							(v)may include the use of humor and nationally
			 recognized positive role models.
							(C)EvaluationThe Secretary shall ensure that the
			 campaign implemented under subparagraph (A) is subject to an independent
			 evaluation every 2 years and shall report every 2 years to Congress on the
			 effectiveness of such campaigns towards meeting science-based metrics.
						(2)WebsiteThe Secretary, in consultation with
			 private-sector experts, shall maintain or enter into a contract to maintain an
			 Internet website to provide science-based information on guidelines for
			 nutrition, regular exercise, obesity reduction, smoking cessation, and specific
			 chronic disease prevention. Such website shall be designed to provide
			 information to health care providers and consumers.
					(3)Dissemination of information through
			 providersThe Secretary,
			 acting through the Centers for Disease Control and Prevention, shall develop
			 and implement a plan for the dissemination of health promotion and disease
			 prevention information consistent with national priorities described in the
			 strategic and implementing plan under subsection (a)(3)(A), to health care
			 providers who participate in Federal programs, including programs administered
			 by the Indian Health Service, the Department of Veterans Affairs, the
			 Department of Defense, and the Health Resources and Services Administration,
			 and the Medicare and Medicaid Programs.
					(4)Personalized prevention plans
						(A)ContractThe Secretary, acting through the Director
			 of the Centers for Disease Control and Prevention, shall enter into a contract
			 with a qualified entity for the development and operation of a Federal Internet
			 website personalized prevention plan tool.
						(B)UseThe website developed under subparagraph
			 (A) shall be designed to be used as a source of the most up-to-date scientific
			 evidence relating to disease prevention for use by individuals. Such website
			 shall contain a component that enables an individual to determine their disease
			 risk (based on personal health and family history, BMI, and other relevant
			 information) relating to the 5 leading diseases in the United States, and
			 obtain personalized suggestions for preventing such diseases.
						(5)Internet portalThe Secretary shall establish an Internet
			 portal for accessing risk-assessment tools developed and maintained by private
			 and academic entities.
					(6)Priority fundingFunding for the activities authorized under
			 this section shall take priority over funding from the Centers for Disease
			 Control and Prevention provided for grants to States and other entities for
			 similar purposes and goals as provided for in this section. Not to exceed
			 $500,000,000 shall be expended on the campaigns and activities required under
			 this Act.
					102.State grants for outcome-based prevention
			 effort
				(a)In generalIf the Secretary determines that it is
			 essential to meeting the national priorities described in the plan required
			 under section 101(a)(3)(A), the Secretary may award grants to States for the
			 conduct of specific health promotion and disease prevention activities.
				(b)EligibilityTo be eligible to receive a grant under
			 subsection (a), a State shall submit to the Secretary an application at such
			 time, in such manner, and containing such information as the Secretary may
			 require, including a strategic plan that shall—
					(1)describe the specific health promotion and
			 disease prevention activities to be carried out under this grant;
					(2)include a list of the barriers that exist
			 within the State to meeting specific goals of Healthy People 2010;
					(3)include targeted demographic indicators and
			 measurable objectives with respect to health promotion and disease
			 prevention;
					(4)contain a set of process outcomes and
			 milestones, based on the process outcomes and milestones developed by the
			 Secretary, for measuring the effectiveness of activities carried out under the
			 grant in the State; and
					(5)outline the manner in which interventions
			 to be carried out under this grant will reduce morbidity and mortality within
			 the State over a 5-year period (or over a 10-year period, if the Secretary
			 determines such period appropriate for adequately measuring progress).
					(c)Process outcomes and milestones
					(1)In generalThe Secretary shall develop process
			 outcomes and milestones to be used to measure the effectiveness of activities
			 carried out under a grant under this section by a State.
					(2)DeterminationsIf, beginning 2 years after the date on
			 which a grant is awarded to a State under this section, the Secretary
			 determines that the State is failing to make adequate progress in meeting the
			 outcomes and milestones contained in the State plan under subsection (b)(4),
			 the Secretary shall provide the State with technical assistance on how to make
			 such progress. Such technical assistance shall continue for a period of 2
			 years.
					(3)Continued failure to meet
			 objectivesIf after the
			 expiration of the 2-year period described in paragraph (2), the Secretary
			 determines that the State is failing to make adequate progress in meeting the
			 outcomes and milestones contained in the State plan under subsection (b)(4)
			 over a 5-year period, the Secretary shall terminate all funding to the State
			 under a grant under this section.
					(d)Regional activitiesA State may use an amount, not to exceed 15
			 percent of the total grant amount to such State, to carry out regional
			 activities in conjunction with other States.
				(e)Targeted activitiesA State may use grant funds to target
			 specific populations within the State to achieve specific outcomes described in
			 Healthy People 2010.
				(f)Innovative incentive
			 structuresThe Secretary may
			 award grants to States for the purposes of developing innovative incentive
			 structures to encourage individuals to adopt specific prevention behaviors such
			 as reducing their body mass index or for smoking cessation.
				(g)Wellness bonuses
					(1)In generalThe Secretary shall award wellness bonus
			 payments to at least 5, but not more than 10, States that demonstrate the
			 greatest progress in reducing disease rates and risk factors and increasing
			 heathy behaviors.
					(2)RequirementTo be eligible to receive a bonus payment
			 under paragraph (1), a State shall demonstrate—
						(A)the progress described in paragraph (1);
			 and
						(B)that the State has met a specific floor for
			 progress outlined in the science-based metrics of Healthy People 2010.
						(3)Use of paymentsBonus payments under this subsection may
			 only be used by a State for the purposes of health promotion and disease
			 prevention.
					(4)FundingOut of funds appropriated to the Director
			 of the Centers for Disease Control and Prevention for each fiscal year
			 beginning with fiscal year 2010, the Director shall give priority to using
			 $50,000,000 of such funds to make bonus payments under this subsection.
					(h)Administrative expensesA State may use not more than 5 percent of
			 the amount of a grant under this section to carry out administrative
			 activities.
				(i)StateIn this section, the term
			 State means the 50 States, the District of Columbia, the
			 Commonwealth of Puerto Rico, Guam, Samoa, the United States Virgin Islands, and
			 the Commonwealth of the Northern Mariana Islands.
				(j)Authorization of
			 appropriationsFunding for
			 the activities authorized under this section shall take priority over funding
			 from the Centers for Disease Control and Prevention provided for grants to
			 States and other entities for similar purposes and goals as provided for in
			 this section, not to exceed $300,000,000 for each fiscal year.
				103.Focusing the food stamp program on
			 nutrition
				(a)Counseling brochureThe Director of the Centers for Disease
			 Control and Prevention shall develop, and the Secretary of Agriculture shall
			 distribute to each individual and family enrolled in the Food Stamp Program
			 under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), a science-based
			 nutrition counseling brochure.
				(b)Limitations on food stamp
			 purchases
					(1)In generalNot later than 6 months after the date of
			 enactment of this Act, the Secretary of Agriculture shall, based on scientific,
			 peer-reviewed recommendations provided by a Commission that includes public
			 health, medical, and nutrition experts and the Director of the Centers for
			 Disease Control and Prevention, develop lists of foods that do not meet
			 science-based standards for proper nutrition and that may not be purchased
			 under the food stamp program. Such list shall be updated on an annual basis to
			 ensure the most current science-based recommendations are applied to the food
			 stamp program.
					(2)Automated enforcementThe Secretary of Agriculture shall, through
			 regulations, ensure that the limitations on food purchases under paragraph (1)
			 is enforced through the food stamp program’s automated system.
					(3)ImplementationThe Secretary of Agriculture shall
			 promulgate the regulations described in paragraph (2) by the date that is not
			 later than 1 year after the date of enactment of this section.
					104.Immunizations
				(a)Purchase of vaccinesNotwithstanding any other provision of law,
			 a State may use amounts provided under section 317 of the Public Health Service
			 Act (42 U.S.C. 247b) for immunization programs to purchase vaccines for use in
			 health care provider offices and schools.
				(b)Technical assistance and reduction in
			 fundingIf a State does not
			 achieve a benchmark of 80 percent coverage within the State for Centers for
			 Disease Control and Prevention-recommended vaccines, the Director of the
			 Centers shall provide technical assistance to the State for a period of 2
			 years. If after the expiration of such 2-year period the State continues to
			 fail to achieve such benchmark, the Secretary shall reduce funding provided
			 under section 317 of the Public Health Service Act to such State by 5
			 percent.
				(c)Bonus grantA State achieving a benchmark of 90 percent
			 or greater coverage within the State for Centers for Disease Control and
			 Prevention-recommended vaccines shall be eligible for a bonus grant from
			 amounts appropriated under subsection (d).
				(d)Authorization of
			 appropriationsOut of funds
			 appropriated to the Director of the Centers for Disease Control and Prevention
			 for each fiscal year beginning with fiscal year 2010, there shall be made
			 available to carry out this section, $50,000,000 for each fiscal year.
				(e)Funding for section 317Section 317(j)(1) of the Public Health
			 Service Act (42 U.S.C. 247b(j)(1)) is amended by striking 2005
			 and inserting 2012.
				IIState-based
			 health care exchanges
			201.State-based
			 health care exchanges
				(a)In
			 generalThe Secretary of Health and Human Services (referred to
			 in this title as the Secretary) shall establish a process for
			 the review of applications submitted by States for the establishment and
			 implementation of State-based health care Exchanges (referred to in this title
			 as a State Exchange) and for the certification of such
			 Exchanges. The Secretary shall certify a State Exchange if the Secretary
			 determines that such Exchange meets the requirements of this title.
				(b)Continued
			 certificationThe certification of a State Exchange under
			 subsection (a) shall remain in effect until the Secretary determines that the
			 Exchange has failed to meet any of the requirements under this title.
				202.Requirements
				(a)General
			 requirements for certificationAn application for certification
			 under section 201(a) shall demonstrate compliance with the following:
					(1)PurposeThe
			 primary purpose of a State Exchange shall be the facilitation of the individual
			 purchase of innovative private health insurance and the creation of a market
			 where private health plans compete for enrollees based on price and
			 quality.
					(2)AdministrationA
			 State shall ensure the operation of the State Exchange through direct contracts
			 with the health insurance plans that are participating in the State Exchange or
			 through a contract with a third party administrator for the operation of the
			 Exchange.
					(3)Plan
			 participationA State shall not restrict or otherwise limit the
			 ability of a health insurance plan to participate in, and offer health
			 insurance coverage through, the State Exchange, so long as the health insurance
			 issuers involved are duly licensed under State insurance laws applicable to all
			 health insurance issuers in the State and otherwise comply with the
			 requirements of this title.
					(4)Premiums
						(A)AmountA
			 State shall not determine premium or cost sharing amounts for health insurance
			 coverage offered through the State Exchange.
						(B)Collection
			 methodA State shall ensure the existence of an effective and
			 efficient method for the collection of premiums for health insurance coverage
			 offered through the State Exchange.
						(b)Benefit parity
			 with Members of CongressWith respect to health insurance issuers
			 offering health insurance coverage through the State Exchange, the State shall
			 not impose any requirement that such issuers provide coverage that includes
			 benefits different than requirements on plans offered to Members of Congress
			 under chapter 89 of title 5, United States Code.
				(c)Facilitating
			 universal coverage for Americans
					(1)Automatic
			 enrollmentThe State Exchange shall ensure that health insurance
			 coverage offered through the Exchange provides for the application of uniform
			 mechanisms that are designed to encourage and facilitate the enrollment of all
			 eligible individuals in Exchange-based health insurance coverage. Such
			 mechanisms shall include automatic enrollment through various venues, which may
			 include emergency rooms, the submission of State tax forms, places of
			 employment in the State, and State departments of motor vehicles.
					(2)Other enrollment
			 opportunities
						(A)In
			 generalThe State Exchange shall ensure that health insurance
			 coverage offered through the Exchange permits enrollment, and changes in
			 enrollment, of individuals at the time such individuals become eligible
			 individuals in the State.
						(B)Annual open
			 enrollment periodsThe State Exchange shall ensure that health
			 insurance coverage offered through the Exchange permits eligible individuals to
			 annually change enrollment among the coverage offered through the Exchange,
			 subject to subparagraph (A).
						(C)Incentives for
			 continuous annual coverageThe State Exchange shall include an
			 incentive for eligible individuals to remain insured from plan year to plan
			 year, and may include incentives such as State tax incentives or premium-based
			 incentives.
						(3)Guaranteed
			 access for individualsThe State Exchange shall ensure that, with
			 respect to health insurance coverage offered through the Exchange, all eligible
			 individuals are able to enroll in the coverage of their choice provided that
			 such individuals agree to make applicable premium and cost sharing
			 payments.
					(4)Limitation on
			 pre-existing condition exclusionsThe State Exchange shall ensure
			 that health insurance coverage offered through the Exchange meets the
			 requirements of section 9801 of the Internal Revenue Code of 1986 in the same
			 manner as if such coverage was a group health plan.
					(5)Opt-outNothing
			 in this title shall be construed to require that an individual be enrolled in
			 health insurance coverage.
					(d)Limitation on
			 exorbitant premiums
					(1)Establishment of
			 mechanismWith respect to health insurance coverage offered
			 through the State Exchange, the Exchange shall establish a mechanisms to
			 protect enrollees from the imposition of excessive premiums, to reduce adverse
			 selection, and to share risk.
					(2)Mechanism
			 optionsThe mechanisms referred to in paragraph (1) may include
			 the following:
						(A)Independent risk
			 adjustmentThe implementation of risk-adjustment among health
			 insurance coverage offered through the State Exchange through a contract
			 entered into with a private, independent board. Such board shall include
			 representation of health insurance issuers and State officials but shall be
			 independently controlled. The State Exchange shall ensure that risk-adjustment
			 implemented under this subparagraph shall be based on a blend of patient
			 diagnoses and estimated costs.
						(B)Health security
			 poolsThe establishment (or continued operation under section
			 2745 of the Public Health Service Act) of a health security pool to guarantee
			 high-risk individuals access to affordable, quality health care.
						(C)ReinsuranceThe
			 implementation of a successful reinsurance mechanisms to guarantee high-risk
			 individuals access to affordable, quality health care.
						(e)Medicaid and
			 SCHIP BeneficiariesThe State Exchange shall include procedures
			 to permit eligible individuals who are receiving (or who are eligible to
			 receive) health care under title XIX or XXI of the Social Security Act to
			 enroll in health insurance coverage offered through the Exchange.
				(f)Dissemination of
			 coverage informationThe State Exchange shall ensure that each
			 health insurance issuer that provides health insurance coverage through the
			 Exchange disseminate to eligible individuals and employers within the State
			 information concerning health insurance coverage options, including the plans
			 offered and premiums and benefits for such plans.
				(g)Regional
			 options
					(1)Interstate
			 compactsTwo or more States that establish a State Exchange may
			 enter into interstate compacts providing for the regulations of health
			 insurance coverage offered within such States.
					(2)Model
			 legislationStates adopting model legislation as developed by the
			 National Association of Insurance Commissioners shall be eligible to enter into
			 an interstate compact as provided for in this section.
					(3)Multi-State
			 pooling arrangementsState Exchanges may implement a multi-state
			 health care coverage pooling arrangement under this title.
					(h)Eligible
			 individualIn this title, the term eligible
			 individual means an individual who is—
					(1)a
			 citizen or national of the United States or an alien lawfully admitted to the
			 United States for permanent residence or otherwise residing in the United
			 States under color of law;
					(2)a
			 resident of the State involved;
					(3)not incarcerated;
			 and
					(4)not eligible for
			 coverage under parts A and B (or C) of the Medicare program under title XVIII
			 of the Social Security Act.
					203.State Exchange
			 incentives
				(a)GrantsThe
			 Secretary may award grants, pursuant to subsection (b), to States for the
			 development, implementation, and evaluation of certified State Exchanges and to
			 provide more options and choice for individuals purchasing health insurance
			 coverage.
				(b)One-time
			 increase in Medicaid paymentIn the case of a State awarded a
			 grant to carry out this section, the total amount of the Federal payment
			 determined for the State under section 1913 of the Social Security Act (as
			 amended by section 401) for fiscal year 2011 shall be increased by an amount
			 equal to 1 percent of the total amount of payments made to the State for fiscal
			 year 2010 under section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a))
			 for purposes of carrying out a grant awarded under this section. Amounts paid
			 to a State pursuant to this subsection shall remain available until
			 expended.
				IIIFair tax treatment for all Americans to
			 afford health care
			300.ReferenceExcept as otherwise expressly provided,
			 whenever in this title an amendment or repeal is expressed in terms of an
			 amendment to, or repeal of, a section or other provision, the reference shall
			 be considered to be made to a section or other provision of the Internal
			 Revenue Code of 1986.
			ARefundable and
			 advanceable credit for certain health insurance coverage
				301.Refundable and
			 advanceable credit for certain health insurance coverage
					(a)Advanceable
			 creditSubpart A of part IV of subchapter A of chapter 1
			 (relating to nonrefundable personal credits) is amended by adding at the end
			 the following new section:

							25E.Qualified
				health insurance credit
								(a)Allowance of
				creditIn the case of an individual, there shall be allowed as a
				credit against the tax imposed by this chapter for the taxable year the sum of
				the monthly limitations determined under subsection (b) for the taxpayer and
				the taxpayer’s spouse and dependents.
								(b)Monthly
				limitation
									(1)In
				generalThe monthly limitation for each month during the taxable
				year for an eligible individual is 1/12th of—
										(A)the applicable
				adult amount, in the case that the eligible individual is the taxpayer or the
				taxpayer’s spouse,
										(B)the applicable
				adult amount, in the case that the eligible individual is an adult dependent,
				and
										(C)the applicable child amount, in the case
				that the eligible individual is a child dependent.
										(2)Limitation on
				aggregate amountNotwithstanding paragraph (1), the aggregate
				monthly limitations for the taxpayer and the taxpayer’s spouse and dependents
				for any month shall not exceed 1/12th of the applicable
				aggregate amount.
									(3)No credit for
				ineligible monthsWith respect to any individual, the monthly
				limitation shall be zero for any month for which such individual is not an
				eligible individual.
									(4)Applicable
				amount
										(A)In
				generalFor purposes of this section—
											(i)Applicable adult
				amountThe applicable adult amount is $2,290.
											(ii)Applicable
				child amountThe applicable child amount is $1,710.
											(iii)Applicable
				aggregate amountThe applicable aggregate amount is
				$5,710.
											(B)Cost-of-living
				adjustments
											(i)In
				generalIn the case of any taxable year beginning in a calendar
				year after 2011, each dollar amount contained in subparagraph (A) shall be
				increased by an amount equal to such dollar amount multiplied by the blended
				cost-of-living adjustment.
											(ii)Blended
				cost-of-living adjustmentFor purposes of clause (i), the blended
				cost-of-living adjustment means one-half of the sum of—
												(I)the cost-of-living
				adjustment determined under section 1(f)(3) for the calendar year in which the
				taxable year begins by substituting calendar year 2010 for
				calendar year 1992 in subparagraph (B) thereof, plus
												(II)the
				cost-of-living adjustment determined under section 213(d)(10)(B)(ii) for the
				calendar year in which the taxable year begins by substituting
				2010 for 1996 in subclause (II) thereof.
												(iii)RoundingAny
				increase determined under clause (i) shall be rounded to the nearest multiple
				of $10.
											(C)Revenue
				neutrality adjustments
											(i)In
				generalIn the case of any taxable year beginning in a calendar
				year after 2011, each dollar amount contained in subparagraph (A), as adjusted
				under subparagraph (B), shall be further adjusted (if necessary) such that the
				aggregate of such dollar amounts allowed as credits under this section for such
				taxable year equals but does not exceed the total increase in revenues in the
				Treasury resulting from the amendments made by sections 303 and 401 of the
				Patients' Choice Act for such
				taxable year as estimated by the Secretary.
											(ii)Date of
				adjustmentThe Secretary shall announce the adjustments for any
				taxable year under this subparagraph not later than the preceding October
				1.
											(c)Limitation based
				on amount of taxIn the case of a taxable year to which section
				26(a)(2) does not apply, the credit allowed under subsection (a) for the
				taxable year shall not exceed the excess of—
									(1)the sum of the
				regular tax liability (as defined in section 26(b)) plus the tax imposed by
				section 55, over
									(2)the sum of the
				credits allowable under this subpart (other than this section) and section 27
				for the taxable year.
									(d)Excess credit
				refundable to certain tax-favored accountsIf—
									(1)the credit which
				would be allowable under subsection (a) if only qualified refund eligible
				health insurance were taken into account under this section, exceeds
									(2)the limitation
				imposed by section 26 or subsection (c) for the taxable year,
									such
				excess shall be paid by the Secretary into the designated account of the
				taxpayer.(e)Eligible
				individualFor purposes of this section—
									(1)In
				generalThe term eligible individual means, with
				respect to any month, an individual who—
										(A)is the taxpayer, the taxpayer’s spouse, or
				the taxpayer’s dependent, and
										(B)is covered under
				qualified health insurance as of the 1st day of such month.
										(2)Medicare
				coverage, Medicaid disability coverage, and military coverageThe term eligible individual
				shall not include any individual who for any month is—
										(A)entitled to benefits under part A of title
				XVIII of the Social Security Act or enrolled under part B of such title, and
				the individual is not a participant or beneficiary in a group health plan or
				large group health plan that is a primary plan (as defined in section
				1862(b)(2)(A) of such Act),
										(B)enrolled by reason
				of disability in the program under title XIX of such Act, or
										(C)entitled to
				benefits under chapter 55 of title 10, United States Code, including under the
				TRICARE program (as defined in section 1072(7) of such title).
										(3)Identification
				requirementsThe term
				eligible individual shall not include any individual for any month
				unless the policy number associated with the qualified health insurance and the
				TIN of each eligible individual covered under such health insurance for such
				month are included on the return of tax for the taxable year in which such
				month occurs.
									(4)PrisonersThe term eligible individual
				shall not include any individual for a month if, as of the first day of such
				month, such individual is imprisoned under Federal, State, or local
				authority.
									(5)AliensThe term eligible individual
				shall not include any alien individual who is not a lawful permanent resident
				of the United States.
									(f)Health
				insuranceFor purposes of this section—
									(1)Qualified health
				insuranceThe term qualified health insurance means
				any insurance constituting medical care which (as determined under regulations
				prescribed by the Secretary)—
										(A)has a reasonable
				annual and lifetime benefit maximum, and
										(B)provides coverage
				for inpatient and outpatient care, emergency benefits, and physician
				care.
										Such term
				does not include any insurance substantially all of the coverage of which is
				coverage described in section 223(c)(1)(B).(2)Qualified refund
				eligible health insuranceThe term qualified refund
				eligible health insurance means any qualified health insurance which is
				coverage under a group health plan (as defined in section 5000(b)(1)).
									(g)Designated
				accounts
									(1)Designated
				accountFor purposes of this section, the term designated
				account means any specified account established and maintained by the
				provider of the taxpayer's qualified refund eligible health insurance—
										(A)which is
				designated by the taxpayer (in such form and manner as the Secretary may
				provide) on the return of tax for the taxable year,
										(B)which, under the
				terms of the account, accepts the payment described in subsection (d) on behalf
				of the taxpayer, and
										(C)which, under such
				terms, provides for the payment of expenses by the taxpayer or on behalf of
				such taxpayer by the trustee or custodian of such account, including payment to
				such provider.
										(2)Specified
				accountFor purposes of this paragraph, the term specified
				account means—
										(A)any health savings
				account under section 223 or Archer MSA under section 220, or
										(B)any health
				insurance reserve account.
										(3)Health insurance
				reserve accountFor purposes of this subsection, the term
				health insurance reserve account means a trust created or
				organized in the United States as a health insurance reserve account
				exclusively for the purpose of paying the qualified medical expenses (within
				the meaning of section 223(d)(2)) of the account beneficiary (as defined in
				section 223(d)(3)), but only if the written governing instrument creating the
				trust meets the requirements described in subparagraphs (B), (C), (D), and (E)
				of section 223(d)(1). Rules similar to the rules under subsections (g) and (h)
				of section 408 shall apply for purposes of this subparagraph.
									(4)Treatment of
				paymentAny payment under subsection (d) to a designated account
				shall not be taken into account with respect to any dollar limitation which
				applies with respect to contributions to such account (or to tax benefits with
				respect to such contributions).
									(h)Other
				definitionsFor purposes of this section—
									(1)DependentThe term dependent has the
				meaning given such term by section 152 (determined without regard to
				subsections (b)(1), (b)(2), and (d)(1)(B) thereof). An individual who is a
				child to whom section 152(e) applies shall be treated as a dependent of the
				custodial parent for a coverage month unless the custodial and noncustodial
				parent provide otherwise.
									(2)AdultThe term adult means an
				individual who is not a child.
									(3)ChildThe term child means a
				qualifying child (as defined in section 152(c)).
									(i)Special
				rules
									(1)Coordination
				with medical deductionAny amount paid by a taxpayer for
				insurance which is taken into account for purposes of determining the credit
				allowable to the taxpayer under subsection (a) shall not be taken into account
				in computing the amount allowable to the taxpayer as a deduction under section
				213(a) or 162(l).
									(2)Coordination
				with health care tax creditNo credit shall be allowed under
				subsection (a) for any taxable year to any taxpayer and qualifying family
				members with respect to whom a credit under section 35 is allowed for such
				taxable year.
									(3)Denial of credit
				to dependentsNo credit shall be allowed under this section to
				any individual with respect to whom a deduction under section 151 is allowable
				to another taxpayer for a taxable year beginning in the calendar year in which
				such individual’s taxable year begins.
									(4)Married couples
				must file joint return
										(A)In
				generalIf the taxpayer is married at the close of the taxable
				year, the credit shall be allowed under subsection (a) only if the taxpayer and
				his spouse file a joint return for the taxable year.
										(B)Marital status;
				certain married individuals living apartRules similar to the
				rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of
				this paragraph.
										(5)Verification of
				coverage, etcNo credit shall be allowed under this section with
				respect to any individual unless such individual’s coverage (and such related
				information as the Secretary may require) is verified in such manner as the
				Secretary may prescribe.
									(6)Insurance which
				covers other individuals; treatment of paymentsRules similar to
				the rules of paragraphs (7) and (8) of section 35(g) shall apply for purposes
				of this section.
									(j)Coordination
				with advance payments
									(1)Reduction in
				credit for advance paymentsWith respect to any taxable year, the
				amount which would (but for this subsection) be allowed as a credit to the
				taxpayer under subsection (a) shall be reduced (but not below zero) by the
				aggregate amount paid on behalf of such taxpayer under section 7527A for months
				beginning in such taxable year.
									(2)Recapture of
				excess advance paymentsIf
				the aggregate amount paid on behalf of the taxpayer under section 7527A for
				months beginning in the taxable year exceeds the sum of the monthly limitations
				determined under subsection (b) for the taxpayer and the taxpayer’s spouse and
				dependents for such months, then the tax imposed by this chapter for such
				taxable year shall be increased by the sum of—
										(A)such excess,
				plus
										(B)interest on such
				excess determined at the underpayment rate established under section 6621 for
				the period from the date of the payment under section 7527A to the date such
				excess is paid.
										For
				purposes of subparagraph (B), an equal part of the aggregate amount of the
				excess shall be deemed to be attributable to payments made under section 7527A
				on the first day of each month beginning in such taxable year, unless the
				taxpayer establishes the date on which each such payment giving rise to such
				excess occurred, in which case subparagraph (B) shall be applied with respect
				to each date so established. The Secretary may rescind or waive all or any
				portion of any amount imposed by reason of subparagraph (B) if such excess was
				not the result of the actions of the
				taxpayer..
					(b)Advance payment
			 of creditChapter 77 (relating to miscellaneous provisions) is
			 amended by inserting after section 7527 the following new section:

							7527A.Advance
				payment of credit for qualified refund eligible health insurance
								(a)In
				generalThe Secretary shall
				establish a program for making payments on behalf of individuals to providers
				of qualified refund eligible health insurance (as defined in section 25E(f)(2))
				for such individuals.
								(b)LimitationThe
				Secretary may make payments under subsection (a) only to the extent that the
				Secretary determines that the amount of such payments made on behalf of any
				taxpayer for any month does not exceed the sum of the monthly limitations
				determined under section 25E(b) for the taxpayer and taxpayer’s spouse and
				dependents for such
				month.
								.
					(c)Information
			 reporting
						(1)In
			 generalSubpart B of part III of subchapter A of chapter 61
			 (relating to information concerning transactions with other persons) is amended
			 by inserting after section 6050W the following new section:

								6050X.Returns
				relating to credit for qualified refund eligible health insurance
									(a)Requirement of
				reportingEvery person who is
				entitled to receive payments for any month of any calendar year under section
				7527A (relating to advance payment of credit for qualified refund eligible
				health insurance) with respect to any individual shall, at such time as the
				Secretary may prescribe, make the return described in subsection (b) with
				respect to each such individual.
									(b)Form and manner
				of returnsA return is described in this subsection if such
				return—
										(1)is in such form as
				the Secretary may prescribe, and
										(2)contains, with
				respect to each individual referred to in subsection (a)—
											(A)the name, address,
				and TIN of each such individual,
											(B)the months for which amounts payments under
				section 7527A were received,
											(C)the amount of each
				such payment,
											(D)the type of
				insurance coverage provided by such person with respect to such individual and
				the policy number associated with such coverage,
											(E)the name, address,
				and TIN of the spouse and each dependent covered under such coverage,
				and
											(F)such other
				information as the Secretary may prescribe.
											(c)Statements To be
				furnished to individuals with respect to whom information is
				requiredEvery person required to make a return under subsection
				(a) shall furnish to each individual whose name is required to be set forth in
				such return a written statement showing—
										(1)the contact
				information of the person required to make such return, and
										(2)the information
				required to be shown on the return with respect to such individual.
										The
				written statement required under the preceding sentence shall be furnished on
				or before January 31 of the year following the calendar year for which the
				return under subsection (a) is required to be made.(d)Returns which
				would be required To be made by 2 or more personsExcept to the
				extent provided in regulations prescribed by the Secretary, in the case of any
				amount received by any person on behalf of another person, only the person
				first receiving such amount shall be required to make the return under
				subsection
				(a).
									.
						(2)Assessable
			 penalties
							(A)Subparagraph (B)
			 of section 6724(d)(1) (relating to definitions) is amended by striking
			 or at the end of clause (xxii), by striking and
			 at the end of clause (xxiii) and inserting or, and by inserting
			 after clause (xxiii) the following new clause:

									(xxiv)section 6050X (relating to returns relating
				to credit for qualified refund eligible health insurance),
				and
									.
							(B)Paragraph (2) of
			 section 6724(d) is amended by striking or at the end of
			 subparagraph (EE), by striking the period at the end of subparagraph (FF) and
			 inserting , or and by inserting after subparagraph (FF) the
			 following new subparagraph:

									(GG)section 6050X (relating to returns relating
				to credit for qualified refund eligible health
				insurance).
									.
							(d)Conforming
			 amendments
						(1)Paragraph (2) of
			 section 1324(b) of title 31, United States Code, is amended by inserting
			 25E, before 35,.
						(2)(A)Section 24(b)(3)(B) is
			 amended by inserting , 25E, after 25D.
							(B)Section 25(e)(1)(C)(ii) is amended by
			 inserting 25E, after 25D,.
							(C)Section 25B(g)(2) is amended by
			 inserting 25E, after 25D,.
							(D)Section 26(a)(1) is amended by
			 inserting 25E, after 25D,.
							(E)Section 30(c)(2)(B)(ii) is amended by
			 inserting 25E, after 25D,.
							(F)Section 30D(c)(2)(B)(ii) is amended by
			 striking and 25D and inserting , 25D, and
			 25E.
							(G)Section 904(i) is amended by inserting
			 25E, after 25B,.
							(H)Section 1400C(d)(2) is amended by
			 inserting 25E, after 25D,.
							(3)The table of
			 sections for subpart A of part IV of subchapter A of chapter 1 is amended by
			 inserting after the item relating to section 25D the following new item:

									Sec. 25E. Qualified health insurance
				credit.

								.
						(4)The table of
			 sections for chapter 77 is amended by inserting after the item relating to
			 section 7527 the following new item:

									Sec. 7527A. Advance payment of credit for
				qualified refund eligible health
				insurance.

								.
						(5)The table of
			 sections for subpart B of part III of subchapter A of chapter 61 is amended by
			 adding at the end the following new item:

									Sec. 6050X. Returns relating to credit for
				qualified refund eligible health
				insurance.

								.
						(e)Effective
			 dateThe amendments made by this section shall apply to taxable
			 years beginning after December 31, 2010.
					302.Requiring employer
			 transparency about employee benefits
					(a)In
			 generalSection 6051(a) (relating to W–2 requirement) is amended
			 by striking and at the end of paragraph (12), by striking the
			 period at the end of paragraph (13) and inserting , and and by
			 inserting after paragraph (13) the following new paragraph:

							(14)the aggregate
				cost (within the meaning of section 4980B(f)(4)) for coverage of the employee
				under an accident or health plan which is excludable from the gross income of
				the employee under section 106(a) (other than coverage under a health flexible
				spending
				arrangement).
							.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to statements for calendar years beginning after
			 2009.
					303.Changes to existing
			 tax preferences for medical coverage, etc., for individuals eligible for
			 qualified health insurance credit
					(a)Exclusion for
			 contributions by employer to accident and health plans
						(1)In
			 generalSection 106 (relating to contributions by employer to
			 accident and health plans) is amended by adding at the end the following new
			 subsection:

								(f)No exclusion for
				individuals eligible for qualified health insurance
				creditSubsection (a) shall not apply with respect to any
				employer-provided coverage under an accident or health plan for any individual
				for any month unless such individual is described in paragraph (2) or (5) of
				section 25E(e) for such month. The amount includible in gross income by reason
				of this subsection shall be determined under rules similar to the rules of
				section
				4980B(f)(4).
								.
						(2)Conforming
			 amendments
							(A)Section 106(b)(1) is amended—
								(i)by
			 inserting gross income does not include before amounts
			 contributed, and
								(ii)by striking shall be treated as
			 employer-provided coverage for medical expenses under an accident or health
			 plan.
								(B)Section 106(d)(1)
			 is amended—
								(i)by
			 inserting gross income does not include before amounts
			 contributed, and
								(ii)by
			 striking shall be treated as employer-provided coverage for medical
			 expenses under an accident or health plan.
								(b)Amounts received
			 under accident and health plansSection 105 (relating to amounts received
			 under accident and health plans) is amended by adding at the end the following
			 new subsection:

							(f)No exclusion for
				individuals eligible for qualified health insurance creditSubsection (b) shall not apply with respect
				to any employer-provided coverage under an accident or health plan for any
				individual for any month unless such individual is described in paragraph (2)
				or (5) of section 25E(e) for such
				month.
							.
					(c)Special rules
			 for health insurance costs of self-employed individualsSubsection (l) of section 162 (relating to
			 special rules for health insurance costs of self-employed individuals) is
			 amended by adding at the end the following new paragraph:

							(6)No deduction to
				individuals eligible for qualified health insuranceParagraph (1) shall not apply for any
				individual for any month unless such individual is described in paragraph (2)
				or (5) of section 25E(e) for such
				month.
							.
					(d)Earned income
			 credit unaffected by repealed exclusionsSubparagraph (B) of
			 section 32(c)(2) is amended by redesignating clauses (v) and (vi) as clauses
			 (vi) and (vii), respectively, and by inserting after clause (iv) the following
			 new clause:

							(v)the earned income
				of an individual shall be computed without regard to sections 105(f) and
				106(f),
							.
					(e)Modification of
			 deduction for medical expensesSubsection (d) of section 213 is
			 amended by adding at the end the following new paragraph:

							(12)Premiums for
				qualified health insuranceThe term medical care
				does not include any amount paid as a premium for coverage of an eligible
				individual (as defined in section 25E(e)) under qualified health insurance (as
				defined in section 25E(f)) for any
				month.
							.
					(f)Reporting
			 requirementSubsection (a) of section 6051 is amended by striking
			 and at the end of paragraph (12), by striking the period at the
			 end of paragraph (13) and inserting and, and by inserting after
			 paragraph (13) the following new paragraph:

							(14)the total amount of employer-provided
				coverage under an accident or health plan which is includible in gross income
				by reason of sections 105(f) and
				106(f).
							.
					(g)Retired public
			 safety officersSection 402(l)(4)(D) is amended by adding at the
			 end the following: Such term shall not include any premium for coverage
			 by an accident or health insurance plan for any month unless such individual is
			 described in paragraph (2) or (5) of section 25E(e) for such
			 month..
					(h)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning after December 31,
			 2010.
					(i)No intent To
			 encourage State taxation of health benefitsNo intent to
			 encourage any State to treat health benefits as taxable income for the purpose
			 of increasing State income taxes may be inferred from the provisions of, and
			 amendments made by, this section.
					BHealth Savings Accounts
				311.Improvements to health savings
			 accounts
					(a)Increase in monthly contribution
			 limit
						(1)In generalParagraph (2) of section 223(b) (relating
			 to limitations) is amended to read as follows:

								(2)Monthly limitation
									(A)In generalIn the case of an eligible individual who
				has coverage under a high deductible health plan, the monthly limitation for
				any month of such coverage is 1/12 of the sum of—
										(i)the greater of—
											(I)the sum of the annual deductible and the
				other annual out-of-pocket expenses (other than for premiums) required to be
				paid under the plan by the eligible individual for covered benefits, or
											(II)in the case of an eligible individual who
				has—
												(aa)self-only coverage under a high deductible
				health plan as of the first day of such month, $3,000, or
												(bb)family coverage under a high deductible
				health plan as of the first day of such month, $5,950, and
												(ii)in the case of an eligible individual who
				has coverage under a qualified long-term care insurance contract (as defined in
				section 7702B(b)), the lesser of—
											(I)the annual premium for such coverage,
				or
											(II)$1,000.
											(B)Special rules relating to out-of-pocket
				expenses
										(i)Reduction for separate planThe annual out-of-pocket expenses taken
				into account under subparagraph (A)(i)(I) with respect to any eligible
				individual shall be reduced by any out-of-pocket expense payable under a
				separate plan covering the individual.
										(ii)Secretarial authorityThe Secretary may by regulations provide
				that annual out-of-pocket expenses will not be taken into account under
				subparagraph (A)(i)(I) to the extent that there is only a remote likelihood
				that such amounts will be required to be
				paid.
										.
						(2)Application of special rules for married
			 individualsParagraph (5) of
			 section 223(b) (relating to limitations) is amended to read as follows:

								(5)Special rules for married
				individuals
									(A)In generalIn the case of individuals who are married
				to each other and who are both eligible individuals, the limitation under
				paragraph (1) for each spouse shall be equal to the spouse's applicable share
				of the combined marital limit.
									(B)Combined marital limitFor purposes of subparagraph (A), the
				combined marital limit is the excess (if any) of—
										(i)the lesser of—
											(I)subject to subparagraph (C), the sum of the
				limitations computed separately under paragraph (1) for each spouse (including
				any additional contribution amount under paragraph (3)), or
											(II)the dollar amount in effect under
				subsection (c)(2)(A)(ii)(II), over
											(ii)the aggregate amount paid to Archer MSAs of
				such spouses for the taxable year.
										(C)Special rule where both spouses have family
				coverageFor purposes of
				subparagraph (B)(i)(I), if either spouse has family coverage which covers both
				spouses, both spouses shall be treated as having only such coverage (and if
				both spouses each have such coverage under different plans, shall be treated as
				having only family coverage with the plan with respect to which the lowest
				amount is determined under paragraph (2)(A)(i)(I)).
									(D)Applicable shareFor purposes of subparagraph (A), a
				spouse's applicable share is ½ of the combined marital limit unless both
				spouses agree on a different division.
									(E)Couples not married entire
				yearThe Secretary shall
				prescribe rules for the application of this paragraph in the case of any
				taxable year for which the individuals were not married to each other during
				all months included in the taxable year, including rules which allow
				individuals in appropriate cases to take into account coverage prior to
				marriage in computing the combined marital limit for purposes of this
				paragraph.
									.
						(3)Self-only coverageParagraph (4) of section 223(c) (relating
			 to definitions and special rules) is amended to read as follows:

								(4)Coverage
									(A)Family coverageThe term family coverage means
				any coverage other than self-only coverage.
									(B)Self-only coverageIf more than 1 individual is covered by a
				high deductible health plan but only 1 of the individuals is an eligible
				individual, the coverage shall be treated as self-only
				coverage.
									.
						(4)Conforming amendments
							(A)Section 223(b)(3)(A) is amended by striking
			 subparagraphs (A) and (B) of.
							(B)Section
			 223(c)(2)(A) is amended—
								(i)by striking
			 $1,000 in clause (i)(I) and inserting $1,150,
			 and
								(ii)by striking
			 $5,000 in clause (ii)(I) and inserting
			 $5,800.
								(C)Section 223(d)(1)(A)(ii)(I) is amended by
			 striking subsection (b)(2)(B)(ii) and inserting
			 subsection (c)(2)(A)(ii)(II).
							(D)Clause (ii) of section 223(c)(2)(D) is
			 amended to read as follows:

									(ii)Certain items disregarded in computing
				monthly limitationSuch
				plan's annual deductible, and such plan's annual out-of-pocket limitation, for
				services provided outside of such network shall not be taken into account for
				purposes of subsection (b)(2).

							(E)Subsection (g) of section 223 is amended to
			 read as follows:

									(g)Cost-of-living
				adjustments
										(1)In
				generalIn the case of any taxable year beginning in a calendar
				year after 2009, each dollar amount contained in subsections (b)(2)(A) and
				(c)(2)(A) shall be increased by an amount equal to such dollar amount
				multiplied by the blended cost-of-living adjustment.
										(2)Blended
				cost-of-living adjustmentFor purposes of paragraph (1), the
				blended cost-of-living adjustment means one-half of the sum of—
											(A)the cost-of-living
				adjustment determined under section 1(f)(3) for the calendar year in which the
				taxable year begins by substituting calendar year 2008 for
				calendar year 1992 in subparagraph (B) thereof, plus
											(B)the cost-of-living
				adjustment determined under section 213(d)(10)(B)(ii) for the calendar year in
				which the taxable year begins by substituting 2008 for
				1996 in subclause (II) thereof.
											(3)RoundingAny
				increase determined under paragraph (2) shall be rounded to the nearest
				multiple of
				$50.
										.
							(b)Use of account for individual high
			 deductible health plan premiumsSection 223(d)(2)(C) (relating to
			 exceptions) is amended by striking or at the end of clause
			 (iii), by striking the period at the end of clause (iv) and inserting ,
			 or, and by adding at the end the following new clause:

							(v)a high deductible health plan, but only
				if—
								(I)the plan is not a group health plan (as
				defined in section 5000(b)(1) without regard to section 5000(d)), and
								(II)the expenses are for coverage for a month
				with respect to which the account beneficiary is an eligible individual by
				reason of the coverage under the plan.
								For
				purposes of clause (v), an arrangement which constitutes individual health
				insurance shall not be treated as a group health plan, notwithstanding that an
				employer or employee organization negotiates the cost of benefits of such
				arrangement..
					(c)Safe harbor for absence of maintenance of
			 chronic diseaseSection
			 223(c)(2)(C) (safe harbor for absence of preventive care deductible) is
			 amended—
						(1)by inserting or maintenance of
			 chronic disease, or both after the Secretary),
			 and
						(2)by inserting or maintenance of chronic
			 disease in the heading after preventive
			 care.
						(d)Clarification of treatment of capitated
			 primary care payments as amounts paid for medical careSection 213(d) (relating to definitions) is
			 amended by adding at the end the following new paragraph:

							(12)Treatment of capitated primary care
				paymentsCapitated primary
				care payments shall be treated as amounts paid for medical
				care.
							.
					(e)Special rule for individuals eligible for
			 veterans or Indian health benefitsSection 223(c)(1) (defining eligible
			 individual) is amended by adding at the end the following new
			 subparagraph:

							(C)Special rule for individuals eligible for
				veterans or Indian health benefitsFor purposes of subparagraph (A)(ii), an
				individual shall not be treated as covered under a health plan described in
				such subparagraph merely because the individual receives periodic hospital care
				or medical services under any law administered by the Secretary of Veterans
				Affairs or the Bureau of Indian
				Affairs.
							.
					(f)Certain
			 physician fees To be treated as medical care
						(1)In
			 generalSection 213(d), is amended by adding at the end the
			 following new paragraph:

								(12)Pre-paid
				physician feesThe term medical care shall include
				amounts paid by patients to their primary physician in advance for the right to
				receive medical services on an as-needed
				basis.
								.
						(2)Effective
			 dateThe amendment made by this section shall apply to taxable
			 years beginning after the date of the enactment of this Act.
						(g)Effective dates
						(1)In generalExcept as provided in paragraph (2), the
			 amendments made by this section shall apply to taxable years beginning after
			 December 31, 2009.
						(2)Capitated primary care
			 paymentsThe amendment made
			 by subsection (d) shall apply to amounts paid before, on, or after the date of
			 the enactment of this Act.
						312.Exception to requirement for employers to
			 make comparable health savings account contributions
					(a)Greater employer-provided contributions to
			 HSAs for chronically ill employees treated as meeting comparability
			 requirementsSubsection (b)
			 of section 4980G (relating to failure of employer to make comparable health
			 savings account contributions) is amended to read as follows:

							(b)Rules and requirements
								(1)In generalExcept as provided in paragraph (2), rules
				and requirements similar to the rules and requirements of section 4980E shall
				apply for purposes of this section.
								(2)Treatment of employer-provided
				contributions to HSAs for chronically ill employeesFor purposes of this section—
									(A)In generalAny contribution by an employer to a health
				savings account of an employee who is (or the spouse or any dependent of the
				employee who is) a chronically ill individual in an amount which is greater
				than a contribution to a health savings account of a comparable participating
				employee who is not a chronically ill individual shall not fail to be
				considered a comparable contribution.
									(B)Nondiscrimination requirementSubparagraph (A) shall not apply unless the
				excess employer contributions described in subparagraph (A) are the same for
				all chronically ill individuals who are similarly situated.
									(C)Chronically ill individualFor purposes of this paragraph, the term
				chronically ill individual means any individual whose qualified
				medical expenses for any taxable year are more than 50 percent greater than the
				average qualified medical expenses of all employees of the employer for such
				year.
									.
					(b)Effective
			 dateThe amendment made by
			 this section shall apply to taxable years beginning after December 31,
			 2009.
					IVFairness for
			 every American patient
			AMedicaid
			 modernization
				401.Medicaid
			 modernization
					(a)In
			 generalEffective January 1, 2011, title XIX of the Social
			 Security Act (42 U.S.C. 1396 et seq.) is amended to read as follows:

							XIXGrants to States
				for Medical Assistance Programs

									TABLE OF CONTENTS OF TITLE
									Sec. 1900. References to pre-modernized Medicaid provisions;
				  continuity for commonwealths and territories.
									Part A—Grants to States for Acute Care for Individuals with
				  Disabilities and Certain Low-Income Individuals
									Sec. 1901. Purpose; Appropriation.
									Sec. 1902. Payments to States for acute care medical
				  assistance.
									Sec. 1903. Definitions of eligible individuals and acute care
				  medical assistance.
									Sec. 1904. State plan requirements for acute care medical
				  assistance.
									Sec. 1905. Definitions.
									Sec. 1906. Enrollment of individuals under group health plans
				  and other arrangements.
									Sec. 1907. Drug rebates.
									Sec. 1908. Managed care.
									Sec. 1909. Annual reports.
									Part B—Grants to States for Long-Term Care Services and
				  Supports
									Sec. 1911. Purpose.
									Sec. 1912. State plan.
									Sec. 1913. State allotments.
									Sec. 1914. Use of grants.
									Sec. 1915. Administrative provisions.
									Sec. 1916. Definition of long-term care services and
				  supports.
									Sec. 1917. Provision requirements for long-term care services
				  and supports, including option for self-directed services and
				  supports.
									Sec. 1918. Treatment of income and resources for certain
				  institutionalized spouses.
									Sec. 1919. Annual reports.
									Part C—Grants to States for Survey and Certification of Medical
				  Facilities and Other Requirements
									Sec. 1931. Authorization of appropriations.
									Sec. 1932. Application of certain requirements under
				  pre-modernized Medicaid.
									Part D—Grants to States for Program Integrity
									Sec. 1941. Authorization of appropriations.
									Sec. 1942. Application of certain requirements under
				  pre-modernized Medicaid.
									Part E—Grants to States for Administration
									Sec. 1951. Authorization of appropriations; payments to
				  states.
									Sec. 1952. Cost-sharing protections.
									Sec. 1953. Application of certain requirements under
				  pre-modernized Medicaid.
									Part F—Other Provisions
									Sec. 1961. Application of certain
				  requirements under pre-modernized Medicaid.

								1900.References to
				pre-modernized Medicaid provisions; continuity for commonwealths and
				territories
									(a)In
				generalIn this title, if a reference to this title or to a
				provision of this title is prefaced by the term old, such
				reference is to this title or a provision of this title as in effect on
				December 31, 2010.
									(b)RegulationsThe
				Secretary shall promulgate regulations to bring requirements imposed under an
				old provision of this title that applies under this title after December 31,
				2010, into conformity with the policies embodied in this title as in effect on
				and after January 1, 2011.
									(c)Continuity for commonwealths and
				territoriesIn the case of
				Puerto Rico, the United States Virgin Islands, Guam, the Northen Mariana
				Islands, and American Samoa, this title as in effect on and after January 1,
				2011, shall not apply to such commonwealths and territories, and old title XIX
				shall apply to a Medicaid program operated by such commonwealths or territories
				on and after that date.
									AGrants to States
				for Acute Care for Individuals with Disabilities and Certain Low-Income
				Individuals
									1901.Purpose;
				Appropriation
										(a)PurposeIt
				is the purpose of this part to enable each State, as far as practicable under
				the conditions in the State, to provide acute care medical assistance to
				eligible individuals described in section 1903 whose income and resources are
				insufficient to meet the costs of necessary medical services, and (2)
				rehabilitation and other services to help such individuals attain or retain
				capability for independence or self-care.
										(b)AppropriationFor the purpose of making payments to
				States under this part, there is appropriated out of any money in the Treasury
				not otherwise appropriated, such sums as are necessary for fiscal year 2011 and
				each fiscal year thereafter.
										1902.Payments to States
				for acute care medical assistance
										(a)In
				generalFrom the amounts
				appropriated under section 1901 for a fiscal year, the Secretary shall pay to
				each State which has a plan approved under this part, for each quarter,
				beginning with the quarter commencing January 1, 2011, an amount equal to the
				Federal medical assistance percentage (as defined in section 1905(b)) of the
				total amount expended during such quarter as acute care medical assistance
				under the State plan under this part.
										(b)Administrative
				expensesEach State with a plan approved under this part shall
				receive a payment determined in accordance with part E for administrative
				expenses incurred in carrying out the plan under this part and part B (if the
				State has a plan approved under that part).
										1903.Definitions of
				eligible individuals and acute care medical assistance
										(a)Eligible
				individuals
											(1)In
				generalIn this part, the term eligible individual
				means an individual—
												(A)who is—
													(i)a
				blind or disabled individual; or
													(ii)an individual
				described in paragraph (2); and
													(B)who the State
				determines satisfies—
													(i)the income and
				resources eligibility requirements established by the State under the State
				plan under this part; and
													(ii)such other
				requirements for assistance as are imposed under this title, including
				documentation of citizenship or status as a qualified alien under title IV of
				the Personal Responsibility and Work Opportunity Reconciliation Act of
				1996.
													(2)Individuals
				describedFor purposes of paragraph (1)(A)(ii), the following
				individuals are described in this paragraph:
												(A)A child in foster
				care under the responsibility of the State.
												(B)A low-income woman
				with breast or cervical cancer described in old section 1902(aa).
												(C)Certain
				TB-infected individuals described in old section 1902(z)(1).
												(3)Grandfathered
				individualsAn individual shall be an eligible individual under
				the State plan under this part if—
												(A)the individual is
				described in paragraph (1)(A);
												(B)the individual
				satisfies the documentation requirements referred to in paragraph (1)(B)(ii);
				and
												(C)the State would
				have provided medical assistance under the State plan under old title XIX to
				the individual, but only so long as the individual continues to satisfy such
				old eligibility requirements.
												(4)Concurrent
				eligibility for part BAn eligible individual under this part may
				be eligible under part B, but only if the individual satisfies the eligibility
				requirements of part B in addition to satisfying the requirements for
				eligibility under this part.
											(5)Presumptive
				eligibility for certain breast or cervical cancer patientsOld
				section 1920B (relating to presumptive eligibility for certain breast or
				cervical cancer patients) shall apply under this part.
											(b)BenefitsSubject
				to paragraph (3), in this part, the term acute care medical
				assistance means the following:
											(1)Mandatory
				benefitsThe care and services listed in paragraphs (1) through
				(5), (17), and (21) of old section 1905(a) (but, in the case of paragraph
				(4)(A) of such section, without regard to any limitation based on age or
				services in an institution for mental diseases).
											(2)Optional
				benefitsAny care or services listed in a paragraph of old
				section 1905(a) (other than paragraph (16)).
											(3)Exceptions
												(A)Certain services
				limited to part BServices described in paragraphs (15), (22),
				(23), (24), and (26) of old section 1905(a) shall only be provided under the
				State plan under part B.
												(B)Limit on
				provision of long-term care services and supportsA care or
				service that the Secretary determines is a long-term care service and support
				(including nursing facility services described in old section 1905(a)(4)(A))
				shall not be provided to an individual under the State plan under this part for
				more than 30 days within any 12-month period.
												(C)ExclusionsSuch
				term shall not include any payments with respect to care or services for any
				individual who is an inmate of a public institution or a patient in an
				institution for mental diseases (regardless of age).
												1904.State plan
				requirements for acute care medical assistance
										(a)In
				generalIn order to receive payments under this part, a State
				shall have an approved State plan for acute care medical assistance. For
				purposes of this part, such assistance includes payments for preventive care,
				primary care, diagnosis and treatment of acute and chronic health conditions,
				emergency care, diagnosis and treatment of mental illnesses and related
				conditions, and rehabilitation and other services to help eligible individuals
				attain or retain capability for independence or self-care. A State medical
				assistance plan shall include a description, consistent with the requirements
				of this part of—
											(1)eligibility
				standards, including income and asset standards;
											(2)benefits,
				including the amount, duration, and scope of covered items and services;
											(3)strategies for
				improving access and quality of care; and
											(4)methods of service
				delivery.
											(b)Public
				availability of state planThe State shall make available to the
				public the State plan under this part and any amendments submitted by the State
				to the plan.
										(c)Amount,
				duration, and scopeThe State plan shall provide that the acute
				care medical assistance made available to any eligible individual shall not be
				less in amount, duration, or scope than the acute care medical assistance made
				available to any other eligible individual.
										(d)Application of
				certain pre-modernized Medicaid requirements
											(1)Old state plan
				requirementsThe following provisions of old section 1902 shall
				apply to the State plans under this part:
												(A)Old section
				1902(a)(10)(C) (relating to certain eligibility and other requirements).
												(B)Old section
				1902(a)(10)(D) (relating to home health services).
												(C)Old section
				1902(a)(10)(G) (relating to nonapplication of certain supplemental security
				income eligibility criteria).
												(D)The subclauses in
				the flush matter following old section 1902(a)(10)(G) (relating to the
				provision of certain services) other than subclauses (V), (VII), (VIII), and
				(IX).
												(E)Old section
				1902(a)(17) (relating to reasonable standards for determining
				eligibility).
												(F)Old section
				1902(a)(19) (relating to eligibility safeguards).
												(G)Old section
				1902(a)(34) (relating to eligibility beginning with the third month prior to
				the month of application).
												(H)Subparagraphs (A),
				(B), and (C) of old section 1902(a)(43) (relating to early and periodic
				screening, diagnostic, and treatment services).
												(I)Old section
				1902(a)(46)(A) (relating to compliance with section 1137 requirements).
												(J)The fourth and
				sixth sentences of old section 1902(a) (relating to eligibility for certain
				individuals).
												(2)Other old title
				XIX requirements
												(A)Old section
				1902(e)(3) (relating to optional eligibility for certain disabled
				individuals).
												(B)Old section
				1902(e)(9) (relating to optional respiratory care services).
												(C)Old section
				1902(f) (relating to eligibility of certain aged, blind, or disabled
				individuals).
												(D)Old section
				1902(m) (relating to eligibility of certain aged or disabled individuals),
				other than paragraph (4).
												(E)Old section
				1902(o) (relating to disregard of certain supplemental security income
				benefits).
												(F)Old section
				1902(v) (relating to eligibility determinations of blind or disabled
				individuals).
												(e)Other
				requirementsThe State plan under this part shall—
											(1)comply with the
				requirements of the other parts of this title; and
											(2)provide that the
				State will make the contributions specified under section 340A–1(e) of the
				Public Health Service Act .
											1905.Definitions
										(a)In
				generalThe definitions specified in this section shall apply for
				purposes of this part and, to the extent applicable and consistent with the
				policy embodied in such part, parts B, C, D, E, and F.
										(b)Federal medical
				assistance percentageThe term Federal medical assistance
				percentage for any State shall be 100 percent less the State percentage;
				and the State percentage shall be that percentage which bears the same ratio to
				45 percent as the square of the per capita income of such State bears to the
				square of the per capita income of the continental United States (including
				Alaska) and Hawaii, except that the Federal medical assistance percentage shall
				in no case be less than 50 percent or more than 83 percent. The Federal medical
				assistance percentage for any State shall be determined and promulgated in
				accordance with the provisions of section 1101(a)(8)(B).
										(c)Application of
				certain pre-modernized Medicaid provisionsThe following old
				provisions shall apply under this part:
											(1)Old section 1905
				provisionsThe following provisions of old section 1905:
												(A)Old section
				1905(d) (relating to the definition of an intermediate care facility for the
				mentally retarded).
												(B)Old section
				1905(e) (relating to the definition of physicians services).
												(C)Old section
				1905(f) (relating to the definition of nursing facility services).
												(D)Old section
				1905(g) (relating to the provision of chiropractors' services).
												(E)Old section
				1905(j) (relating to State supplementary payments).
												(F)Old section
				1905(k) (relating to supplemental security income benefits payable pursuant to
				section 211 of Public Law 93–66).
												(G)Old section
				1905(l)(1) (relating to rural health clinic services).
												(H)Old section
				1905(o) (relating to hospice care).
												(I)Old section
				1905(q) (relating to the definition of a qualified severely impaired
				individual).
												(J)Old section
				1905(r) (relating to the definition of early and periodic screening,
				diagnostic, and treatment services).
												(K)Old section
				1905(s) (relating to the definition of a qualified disabled and working
				individual).
												(L)Old section
				1905(t) (relating to the definition of primary care case management
				services).
												(M)Old section
				1905(v) (relating to the definition of an employed individual with a medically
				improved disability).
												(N)Paragraphs (1) and
				(3) of old section 1905(w) (relating to the definition of an independent foster
				care adolescent).
												(O)Old section
				1905(x) (relating to strategies, treatment, and services for individuals with
				Sickle Cell Disease).
												(2)Other old
				provisions
												(A)Old section
				1903(m) (relating to the definition of a medicaid managed care
				organization).
												1906.Enrollment of
				individuals under group health plans and other arrangementsThe following old provisions shall apply
				under this part:
										(1)Old section 1906 (relating to enrollment of
				individuals under group health plans).
										(2)Old section 1902(a)(70) (relating to State
				option to establish a non-emergency medical transportation brokerage
				program).
										(3)Paragraphs (2) and (11) of old section
				1902(e) (relating to eligibility for individuals enrolled with a group health
				plan or under a managed care arrangement during a minimum enrollment
				period).
										1907.Drug
				rebatesOld sections
				1902(a)(54) and 1927 (relating to payment for covered outpatient drugs and
				rebates) shall apply under this part.
									1908.Managed
				careThe following old
				provisions shall apply under this part:
										(1)Old section 1932 (relating to managed
				care), other than subsection (a)(2) of such section.
										(2)Old section
				1903(k) (relating to technical and actuarial assistance for States).
										1909.Annual
				reports
										(a)In
				generalEach State that
				receives payments under this part shall submit an annual report to the
				Secretary, in such form and manner as the Secretary shall specify.
										(b)Application of
				old EPSDT reporting requirementsEach annual report shall include the
				information required to be reported under old section
				1902(a)(43)(D)(iv).
										BGrants to States
				for Long-Term Care Services and Supports
									1911.Purpose
										(a)In
				generalThe purpose of this part is to increase the flexibility
				of States in operating a system of long-term care services and supports
				designed to—
											(1)provide assistance
				to needy families so that individuals with disabilities and low-income senior
				citizens may be served and supported in their own homes and communities;
											(2)emphasize the
				independence and dignity of the person served by public programs;
											(3)end the
				institutional bias that existed under the Medicaid program prior to January 1,
				2011;
											(4)provide stable and
				predictable funding for States as they rebalance their long-term care systems
				from institutions to communities;
											(5)provide
				flexibility to States to adopt new and innovative service delivery methods;
				and
											(6)promote
				independence and support activities that will enable individuals to return or
				maintain ties to the community, including through employment.
											(b)No individual
				entitlementNo individual determined eligible for long-term care
				services and supports under this part shall be entitled to a specific service
				or type of delivery of service.
										1912.State
				plan
										(a)In
				generalIn order to receive payments under this part, a State
				must have an approved State plan for long-term care services and supports. A
				State long term care services and supports plan shall include a description,
				consistent with the requirements of this part, of—
											(1)income and assets
				eligibility standards and spousal impoverishment protections consistent with
				subsection (b);
											(2)the standardized
				assessments tools used to determine eligibility for specific long-term care
				services and supports;
											(3)the
				person-centered plans used to provide such services and supports;
											(4)the proposed uses
				of funding, if applicable, to provide targeted methods to meet individual level
				of support needs including tiering (preventive, emergency, low, medium, high);
				and
											(5)the long-term care
				services and supports to be available under the plan based on individual
				assessment of need in accordance with sections 1916 and 1917.
											(b)Minimum
				eligibility standards
											(1)Populations
				coveredThe State plan shall specify the disabled and elderly
				populations who are eligible for long-term care services and supports.
											(2)Needs-based
				criteriaThe plan shall include a description of the needs-based
				criteria the State will use to assess an individual's need for specific
				services and supports available under the State plan.
											(3)Other
				eligibility requirements
												(A)Income and
				assetsA State may use different income and asset standards and
				methodologies for determining eligibility than those used for determining
				eligibility for acute care medical assistance under part A. A State may not
				make eligibility standards related to income, asset, and spousal impoverishment
				protection more restrictive than the Federal minimum requirements of December
				31, 2008.
												(B)Application of
				spousal impoverishment protectionsThe State plan shall provide
				that the State shall comply with the requirements of section 1918 (relating to
				spousal impoverishment protections).
												(C)StatewidenessThe
				State plan shall provide that, except with respect to methods used for
				determining homestead exemptions, the income and asset standards and
				methodologies shall be in effect in all political subdivisions of the
				State.
												(4)Transition
				assistanceThe State plan shall specify how the State will
				provide transition assistance for individuals who, on December 31, 2010, are
				enrolled under the State plan under old title XIX (or under a waiver of that
				plan) and receiving long-term care services or supports on that date. The State
				shall provide such assistance to individuals who are and are not likely to be
				determined eligible for long-term care services and supports under the State
				plan under this part, as in effect on January 1, 2011 (or the first day on
				which the State plan is in effect under this part).
											(c)Payment
				methodologies to providers
											(1)In
				generalThe State plan shall describe the methodologies used to
				determine payments to providers. Such methodologies—
												(A)may be varied to
				assist in transitioning from facilities-based to community-based care;
				and
												(B)shall not be
				subject to Secretarial approval.
												(2)TransparencyThe
				State plan shall provide that the State shall make publicly available—
												(A)the payment
				methodologies applicable under the plan; and
												(B)the name of any
				provider that receives $1,000,000 or more in any 12-month period and the actual
				amount paid to the provider during that period.
												(d)Coordination of
				effort with other related public and private programsThe plan
				shall include a description of the State's efforts to coordinate the delivery
				of services and supports under the plan with other related public and private
				programs that serve individuals with disabilities or aged populations that need
				or may be at risk of needing long term care.
										(e)Public
				availability of state planThe State shall make available to the
				public the State plan under this part and any amendments submitted by the State
				to the plan.
										(f)Application of
				old title XIX requirementsThe following old title XIX provisions
				shall apply to a State plan under this part:
											(1)Subsections
				(a)(50) and (q) of old section 1902 (relating to a monthly personal needs
				allowance for certain institutionalized individuals and couples).
											(2)Old section
				1902(a)(67) (relating to payment for certain services furnished to a PACE
				program eligible individual).
											(3)Paragraph (1) of
				old section 1902(r) (relating to the post-eligibility treatment of income for
				certain individuals) and paragraph (2) of such section (relating to
				methodologies for determining income and resource eligibility for individuals,
				but only with respect to individuals who are eligible under this part on or
				after January 1, 2011).
											(4)Old section
				1905(i) (relating to the definition of an institution for mental
				diseases).
											(g)Other
				requirements of other partsThe State plan under this part
				shall—
											(1)comply with the
				requirements of the other parts of this title; and
											(2)provide that the
				State will make the contributions specified under section 340A–1(e) of the
				Public Health Service Act.
											1913.State
				allotments
										(a)AppropriationFor the purpose of providing allotments to
				States under this section, there is appropriated out of any money in the
				Treasury not otherwise appropriated—
											(1)for fiscal year 2011,
				$65,274,560,000;
											(2)for fiscal year
				2012, $67,885,540,000;
											(3)for fiscal year
				2013, $70,600,964,100;
											(4)for fiscal year
				2014, $73,425,000,000;
											(5)for fiscal year
				2015, $76,362,000,000;
											(6)for fiscal year
				2016, $79,416,480,000;
											(7)for fiscal year
				2017, $82,593,140,000;
											(8)for fiscal year
				2018, $85,896,870,000; and
											(9)for fiscal year
				2019, $89,332,743,000.
											(b)Allotments to 50
				States and the District of Columbia
											(1)Fiscal year 2011
				allotmentsSubject to subsection (e), the Secretary shall allot
				to each State with a long term care plan approved under this title an amount in
				fiscal year 2011 equal to the Federal expenditures made by the State for
				long-term care as defined in section 1916 in fiscal year 2008, increased by 8
				percent.
											(2)Subsequent
				fiscal year allotmentsFor fiscal year 2012 and each subsequent
				fiscal year through fiscal year 2019, the allotment for a State under this
				section is equal to the allotment for the State determined for the preceding
				fiscal year, increased by 4 percent.
											(c)Limitation
											(1)In
				generalExcept as provided in paragraph (2), no other Federal
				funds are available under this title for expenditures incurred for long-term
				care services and supports after December 31, 2010, except as provided under a
				State plan approved under this part.
											(2)Exception
												(A)In
				generalIf a State does not have an approved State plan by
				October 1, 2010, the Secretary may make payments equal to 85 percent of the
				State’s estimated quarterly allotment until June 30, 2011.
												(B)Full
				fundingA State shall receive 100 percent of its allotment for
				fiscal year 2011 if the State has a plan approved under this part by June 30,
				2011.
												(d)Maintenance of
				effortIn order to qualify for the grant payable under this
				section, the State must demonstrate in each fiscal year that it made long-term
				care service and supports expenditures (including funding from local government
				sources) equal to the amount of not less than 95 percent of the nonfederal
				share amount spent in fiscal year 2009 under the State plan under old title XIX
				on long term care services and supports (as defined in section 1916).
				Expenditures not made under this part shall not be recognized by the Secretary
				for purposes of this requirement.
										(e)Grants reduced
				if insufficient appropriations
											(1)In
				generalIf the amount appropriated for fiscal year 2011 under
				subsection (a)(1) is less than the amount necessary to fund each State’s
				allotment for that fiscal year, the Secretary shall reduce the allotment for
				each State for that fiscal year based on the applicable percentage determined
				for the State under paragraph (2) provide a reduced percentage basis as
				follows: Each state shall receive a percentage of its allotment based on the
				ratio of non-institutional spending to total long term care spending in FY
				2009.
											(2)Applicable
				percentageFor purposes of paragraph (1), the applicable
				percentage determined with respect to a State is as follows:

															If the ratio of the State's
						non-institutional spending to total long-term care spending for fiscal year
						2009 is:The applicable percentage is:

															50 percent or
						greater100

															at least 46, but less than 50
						percent99

															at least 40, but less than 46
						percent98

															at least 36, but less than
						4097

															at least 30, but less than
						3696

															less than 30 percent95.

											(f)Administrative
				expenses
											(1)In
				generalEach State with a plan approved under this part shall
				receive a payment determined in accordance with amounts appropriated for part E
				for administrative expenses incurred in carrying out the plan under this part
				and part A.
											(2)Assessment-related
				costsCosts attributable to providing an individualized
				needs-based assessment for purposes of identifying the long-term care services
				and supports to be provided under the State plan to an individual shall be
				considered a long-term care service and support and shall not be treated as an
				administrative expense.
											1914.Use of
				grants
										(a)In
				generalA State shall use funds for long-term care services and
				supports as defined in section 1916.
										(b)Self-directionA
				State shall offer individuals the opportunity to self-direct their long-term
				care services and supports.
										1915.Administrative
				provisions
										(a)Funding on a
				quarterly basisThe Secretary shall make payments to States in
				equal amounts of a State’s annual allotment on a quarterly basis. Each
				quarterly payment shall remain available for use by the State for twelve
				succeeding fiscal year quarters.
										(b)PublicationThe
				Secretary shall publish each State’s allotment—
											(1)for fiscal year
				2011 not later than December 15, 2009; and
											(2)for each
				subsequent fiscal year, not later than December 15 of the calendar year
				preceding the calendar year in which the fiscal year begins.
											1916.Definition of
				long-term care services and supports
										(a)Definition
											(1)In
				generalSubject to subsection (e), in this part, the term
				long-term care services and supports means any of the services or
				supports specified in paragraphs (2) or (3) that may be provided in a nursing
				facility, an institution, a home, or other setting.
											(2)Services and
				supports describedFor purposes of paragraph (1), the services
				and supports described in this paragraph include assistive technology, adaptive
				equipment, remote monitoring equipment, case management for the aged, case
				management for individuals with disabilities, nursing home services, long-term
				rehabilitative services necessary to restore functional abilities, services
				provided in intermediate care facilities for people with disabilities,
				habilitation services (including adult day care programs), community treatment
				teams for individuals with mental illness, home health services, services
				provided in an institution for mental disease, a Program of All-Inclusive Care
				for the Elderly (PACE), personal care (including personal assistance services),
				recovery support including peer counseling, supportive employment, training
				skills necessary to assist the individual in achieving or maintaining
				independence, training of family members including foster parents in supportive
				and behavioral modification skills, ongoing and periodic training to maintain
				life skills, transitional care including room and board not to exceed 60 days
				within a 12-month period.
											(3)Inclusion of
				certain benefits under old title XIXSuch services and supports
				may include any of the following services:
												(A)Old section
				1905(a)(15) (relating to services in an intermediate care facility for the
				mentally retarded).
												(B)Services described
				in subsections (a)(16) and (h) of old section 1905, but without regard to any
				restriction on such services on the basis of age (relating to inpatient
				psychiatric hospital services).
												(C)Old section
				1905(a)(22) (relating to home and community care (to the extent allowed and as
				defined in old section 1929) for functionally disabled elderly
				individuals).
												(D)Old section
				1905(a)(23) (relating to community supported living arrangements services (to
				the extent allowed and as defined in old section 1930)).
												(E)Subject to
				subsection (e), old section 1905(a)(24) but without regard to any restriction
				on furnishing services to patients or residents of facilities or institutions
				(relating to personal care services).
												(F)Old sections
				1905(a)(26) and 1934 (relating to services furnished under a PACE program under
				old section 1934 to PACE program eligible individuals enrolled under the
				program under such old section).
												(G)Old section
				1915(c)(5) (relating to the definition of habilitation services).
												(4)LimitationLong-term
				care services and supports cannot be used for services and administrative costs
				provided through the foster care (with the exception of training of foster care
				parents), child welfare, adult protective services, juvenile justice, public
				guardianship, or correctional systems.
											(b)Rehabilitative
				careFor purposes of rehabilitation due to acute care medical
				needs, a State may claim rehabilitative services provided in an institutional
				setting, nursing home, or as part of home health expenditures as acute care
				benefits under the State plan under part A rather than under the State plan
				under this part for a cumulative period of 30 days within a 12-month period if
				such care is directly related to the onset of an acute care need. A State shall
				demonstrate the services were provided as a direct result of an acute care
				need.
										(c)Managed
				careIf a State provides long-term care services and supports
				through managed care, the State shall submit a methodology for determining the
				level of expenditures attributed to long term care for approval by the
				Secretary.
										(d)Application of
				part A definitionsA definition specified in section 1905 shall
				apply to the same term used in this part, unless the Secretary determines that
				the application of such definition would be inconsistent with the purpose of
				this part.
										(e)ExclusionNo
				payments shall be made under the State plan under this part with respect to
				long-term care supports and services provided for any individual who is an
				inmate of a public institution. Nothing in the preceding sentence shall be
				construed as precluding the provision of long-term care services and supports
				under the State plan under this part to an individual who is a patient in an
				institution for mental diseases.
										1917.Provision
				requirements for long-term care services and support, including option for
				self-directed services and supports
										(a)Requirements for
				the provision of long-term care services and supports
											(1)In
				generalSubject to the succeeding provisions of this subsection,
				a State may provide through a State plan amendment for the provision of
				long-term care services and supports for individuals eligible under the State
				plan under this part, subject to the following requirements:
												(A)Needs-based
				criteria for eligibility for, and receipt of, long-term care services and
				supportsThe State establishes needs-based criteria for
				determining an individual's eligibility under the State plan for medical
				assistance for such long-term care services and supports, and if the individual
				is eligible for such services and supports, the specific services and supports
				that will be available under the State plan to the individual.
												(B)Criteria for
				institutionalized versus non-institutionalized servicesIn
				establishing needs-based criteria, the State may establish criteria for
				determining eligibility for, and receipt of, services and supports provided in
				a facility or institution that are more stringent that the criteria established
				for eligibility and receipt of services and supports in a non-facility or
				non-institutionalized setting.
												(C)Authority to
				limit number of eligible individualsA State may limit the number
				of individuals who are eligible for such services and supports and may
				establish waiting lists for the receipt of such services and supports.
												(D)Criteria based
				on individual assessment
													(i)In
				generalThe criteria established by the State shall require an
				assessment of an individual's support needs and capabilities, and may take into
				account the inability of the individual to perform 2 or more activities of
				daily living (as defined in section 7702B(c)(2)(B) of the Internal Revenue Code
				of 1986) or the need for significant assistance to perform such activities, and
				such other risk factors as the State determines to be appropriate.
													(ii)Adjustment
				authorityThe State plan amendment provides the State with the
				option to modify the criteria established under subparagraph (A) (without
				having to obtain prior approval from the Secretary) in the event that the
				enrollment of individuals eligible for services exceeds the projected
				enrollment, but only if—
														(I)the State provides
				at least 60 days notice to the Secretary and the public of the proposed
				modification;
														(II)the State deems
				an individual receiving long-term care services and supports on the basis of
				the most recent version of the criteria in effect prior to the effective date
				of the modification to be eligible for such services and supports for a period
				of at least 12 months beginning on the date the individual first received
				medical assistance for such services and supports; and
														(III)after the
				effective date of such modification, the State, at a minimum, applies the
				criteria for determining whether an individual requires the level of care
				provided in a facility or institutionalized setting which applied under the
				State plan immediately prior to the application of the modified
				criteria.
														(E)Independent
				evaluation and assessment
													(i)Eligibility
				determinationThe State uses an independent evaluation for making
				the determinations described in subparagraph (A).
													(ii)AssessmentIn
				the case of an individual who is determined to be eligible for long-term care
				services and supports, the State uses an independent assessment, based on the
				needs of the individual to—
														(I)determine a
				necessary level of services and supports to be provided, consistent with an
				individual's physical and mental capacity;
														(II)prevent the
				provision of unnecessary or inappropriate care; and
														(III)establish an
				individualized care plan for the individual in accordance with subparagraph
				(G).
														(F)AssessmentThe
				independent assessment required under subparagraph (E)(ii) shall include the
				following:
													(i)An
				objective evaluation of an individual's inability to perform 2 or more
				activities of daily living (as defined in section 7702B(c)(2)(B) of the
				Internal Revenue Code of 1986) or the need for significant assistance to
				perform such activities.
													(ii)A
				face-to-face evaluation of the individual by an individual trained in the
				assessment and evaluation of individuals whose physical or mental conditions
				trigger a potential need for long-term care services and supports.
													(iii)Where
				appropriate, consultation with the individual's family, spouse, guardian, or
				other responsible individual.
													(iv)Consultation with
				appropriate treating and consulting health and support professionals caring for
				the individual.
													(v)An
				examination of the individual's relevant history, medical records, and care and
				support needs, guided by best practices and research on effective strategies
				that result in improved health and quality of life outcomes.
													(vi)An evaluation of
				the ability of the individual or the individual's representative to self-direct
				the purchase of, or control the receipt of, such services and supports if the
				individual so elects.
													(G)Individualized
				care plan
													(i)In
				generalIn the case of an individual who is determined to be
				eligible for long-term care services and supports, the State uses the
				independent assessment required under subparagraph (E)(ii) to establish a
				written individualized care plan for the individual.
													(ii)Plan
				requirementsThe State ensures that the individualized care plan
				for an individual—
														(I)is
				developed—
															(aa)in
				consultation with the individual, the individual's treating physician, health
				care or support professional, or other appropriate individuals, as defined by
				the State, and, where appropriate the individual's family, caregiver, or
				representative; and
															(bb)taking into
				account the extent of, and need for, any family or other supports for the
				individual;
															(II)identifies the
				long-term care services and supports to be furnished to the individual (or, if
				the individual elects to self-direct the purchase of, or control the receipt
				of, such services and supports, funded for the individual); and
														(III)is reviewed at
				least annually and as needed when there is a significant change in the
				individual's circumstances.
														(iii)State
				requirement to offer election for self-directed services and supports
														(I)Individual
				choiceThe State shall allow an individual or the individual's
				representative the opportunity to elect to receive self-directed long-term care
				services and supports in a manner which gives them the most control over such
				services and supports consistent with the individual's abilities and the
				requirements of subclauses (II) and (III).
														(II)Self-directedThe
				term self-directed means, with respect to the long-term care
				services and supports offered under the State plan amendment, such services and
				supports for the individual which are planned and purchased under the direction
				and control of such individual or the individual's authorized representative,
				including the amount, duration, scope, provider, and location of such services
				and supports, under the State plan consistent with the following
				requirements:
															(aa)AssessmentThere
				is an assessment of the needs, capabilities, and preferences of the individual
				with respect to such services and supports.
															(bb)Service
				planBased on such assessment, there is developed jointly with
				such individual or the individual's authorized representative a plan for such
				services and supports for such individual that is approved by the State and
				that satisfies the requirements of subclause (III).
															(III)Plan
				requirementsFor purposes of subclause (II)(bb), the requirements
				of this subclause are that the plan—
															(aa)specifies those
				services and supports which the individual or the individual's authorized
				representative would be responsible for directing;
															(bb)identifies the
				methods by which the individual or the individual's authorized representative
				will select, manage, and dismiss providers of such services and
				supports;
															(cc)specifies the
				role of family members and others whose participation is sought by the
				individual or the individual's authorized representative with respect to such
				services and supports;
															(dd)is
				developed through a person-centered process that is directed by the individual
				or the individual's authorized representative, builds upon the individual's
				capacity to engage in activities that promote community life and that respects
				the individual's preferences, choices, and abilities, and involves families,
				friends, and professionals as desired or required by the individual or the
				individual's authorized representative;
															(ee)includes
				appropriate risk management techniques that recognize the roles and sharing of
				responsibilities in obtaining services and supports in a self-directed manner
				and assure the appropriateness of such plan based upon the resources and
				capabilities of the individual or the individual's authorized representative;
				and
															(ff)may
				include an individualized budget which identifies the dollar value of the
				services and supports under the control and direction of the individual or the
				individual's authorized representative.
															(IV)Budget
				processWith respect to individualized budgets described in
				subclause (III)(ff), the State plan amendment—
															(aa)describes the
				method for calculating the dollar values in such budgets based on reliable
				costs and service utilization;
															(bb)defines a process
				for making adjustments in such dollar values to reflect changes in individual
				assessments and service plans; and
															(cc)provides a
				procedure to evaluate expenditures under such budgets.
															(H)Quality
				assurance; conflict of interest standards
													(i)Quality
				assuranceThe State ensures that the provision of long-term care
				services and supports meets Federal and State guidelines for quality
				assurance.
													(ii)Conflict of
				interest standardsThe State establishes standards for the
				conduct of the independent evaluation and the independent assessment to
				safeguard against conflicts of interest.
													(I)Redeterminations
				and appealsThe State allows for at least annual redeterminations
				of eligibility, and appeals in accordance with the frequency of, and manner in
				which, redeterminations and appeals of eligibility are made under the State
				plan.
												(J)Presumptive
				eligibility for assessmentThe State, at its option, elects to
				provide for a period of presumptive eligibility (not to exceed a period of 60
				days) only for those individuals that the State has reason to believe may be
				eligible for long-term care services and supports. Such presumptive eligibility
				shall be limited to medical assistance for carrying out the independent
				evaluation and assessment under subparagraph (E) to determine an individual's
				eligibility for such services and if the individual is so eligible, the
				specific long-term care services and supports that the individual will
				receive.
												(2)Definition of
				individual's representativeIn this section, the term
				individual's representative means, with respect to an individual,
				a parent, a family member, or a guardian of the individual, an advocate for the
				individual, or any other individual who is authorized to represent the
				individual.
											(b)Self-directed
				personal assistance servicesIf a State includes personal care or
				personal assistance services in the long-term care services and supports
				available under the State plan, the State shall comply with the requirements of
				old section 1915(j) in the case of an individual who elects to self-direct the
				receipt of such care or services.
										1918.Treatment of
				income and resources for certain institutionalized spousesOld section 1924 (relating to treatment of
				income and resources for certain institutionalized spouses), other than
				paragraphs (2) and (4)(A) of subsection (a) of such section, shall apply under
				this part.
									1919.Annual
				reports
										(a)In
				generalEach State that
				receives payments under this part shall submit an annual report to the
				Secretary, in such form and manner as the Secretary shall specify.
										(b)RequirementsThe report shall include the following with
				respect to the most recent fiscal year ended:
											(1)The number of
				individuals served under the plan.
											(2)The number of
				individuals served by tier (preventive, emergency, low, medium, and high
				needs).
											(3)The number of
				individuals known to the State on waiting list for services (if any) and type
				of disability (physical, developmental, mental health) or aged.
											(4)Expenditures by
				service category.
											CGrants to States
				for Survey and Certification of Medical Facilities and Other
				Requirements
									1931.Authorization
				of appropriationsFor the
				purpose of carrying our Federal activities and providing grants to States for
				expenses necessary to carry out this part, there is authorized to be
				appropriated—
										(1)for fiscal year 2011, $300,000,000;
				and
										(2)for each succeeding fiscal year, the amount
				authorized under this section for the preceding fiscal year, increased by 5
				percent.
										1932.Application of
				certain requirements under pre-modernized MedicaidThe
				following old provisions shall apply under this part:
										(1)Old section
				1902(a)(9) (relating to health standards and applicable requirements for
				laboratory services).
										(2)Old section
				1902(a)(28) (relating to nursing facilities and nursing facility
				services).
										(3)Old sections
				1902(a)(29) and 1908 (relating to a State program for the licensing of
				administrators of nursing homes).
										(4)Old section
				1902(a)(33)(B) (relating to licensing health institutions).
										(5)Old section
				1902(d) (relating to medical or utilization review functions).
										(6)Old section
				1902(i) (relating to intermediate care facilities for the mentally
				retarded).
										(7)Old section
				1902(y) (relating to psychiatric hospitals).
										(8)Paragraphs (2) and
				(6) of old section 1903(g) (relating to the Secretarial requirement to conduct
				sample onsite surveys of private and public institutions and recertifications
				for the need for certain services).
										(9)Old section
				1903(q)(4)(B) (relating to the definition of a board and care facility).
										(10)Old section 1910
				(relating to certification and approval of rural health clinics and
				intermediate care facilities for the mentally retarded).
										(11)Old section 1911
				(relating to Indian Health Service facilities).
										(12)Old section 1913
				(relating to hospital providers of nursing facility services).
										(13)Old section 1919
				(relating to requirements for nursing facilities).
										DGrants to States
				for Program Integrity
									1941.Authorization
				of appropriations
										(a)In
				generalFor the purpose of
				carrying out Federal activities under this part and providing grants to States
				for expenses necessary to carry out this part, there is authorized to be
				appropriated—
											(1)for fiscal year 2011, $100,000,000;
				and
											(2)for each succeeding fiscal year, the amount
				authorized under this section for the preceding fiscal year, increased by 5
				percent.
											(b)Availability;
				authority for use of funds
											(1)AvailabilityAmounts
				appropriated pursuant to subsection (a) shall remain available until
				expended.
											(2)Authority for
				use of funds for transportation and travel expenses for attendees at education,
				training, or consultative activities
												(A)In
				generalThe Secretary may use amounts appropriated pursuant to
				subsection (a) to pay for transportation and the travel expenses, including per
				diem in lieu of subsistence, at rates authorized for employees of agencies
				under subchapter I of chapter 57 of title 5, United States Code, while away
				from their homes or regular places of business, of individuals described in
				subsection (b)(4) who attend education, training, or consultative activities
				conducted under the authority of that subsection.
												(B)Public
				disclosureThe Secretary shall make available on a website of the
				Centers for Medicare & Medicaid Services that is accessible to the
				public—
													(i)the total amount
				of funds expended for each conference conducted under the authority of
				subsection (b)(4); and
													(ii)the amount of
				funds expended for each such conference that were for transportation and for
				travel expenses.
													(c)Annual
				reportNot later than 180 days after the end of each fiscal year,
				the Secretary shall submit a report to Congress which identifies—
											(1)the use of funds
				appropriated pursuant to subsection (a); and
											(2)the effectiveness
				of the use of such funds.
											1942.Application of
				certain requirements under pre-modernized MedicaidThe
				following old provisions shall apply under this part:
										(1)Old subsections
				(a)(25) (other than subparagraph (E)) and (g) of section 1902 and section
				1903(o) (relating to third party liability).
										(2)Old section
				1902(a)(30)(B) (relating to hospital, intermediate care facility for the
				mentally retarded, or hospital for mental diseases admission screening and
				review requirements).
										(3)Old section
				1902(a)(32) (relating to certain payment requirements).
										(4)Old section
				1902(a)(35) (relating to disclosing entities under section 1124).
										(5)Old section
				1902(a)(37) and the fifth sentence (relating to claims payment
				procedures).
										(6)Old section
				1902(a)(44) (relating to payment for inpatient hospital services, services in
				an intermediate care facility for the mentally retarded, or inpatient mental
				hospital services).
										(7)Old sections
				1902(a)(45) and 1912 (relating to assignment of rights of payment).
										(8)Old sections
				1902(a)(49) and 1921 (relating to information and access to information
				concerning sanctions taken by State licensing authorities against health care
				practitioners and providers).
										(9)Old sections
				1902(a)(61) and 1903(q) (relating to requirements for a medicaid fraud and
				abuse control unit).
										(10)Old section
				1902(a)(64) (relating to reports from beneficiaries and others and data
				compilation requirements concerning alleged instances of waste, fraud, and
				abuse).
										(11)Old section
				1902(a)(65) (relating to provider number and surety bond requirement for
				suppliers of durable medical equipment).
										(12)Old section
				1902(a)(68) (relating to requirements for certain entities).
										(13)Old sections
				1902(a)(69) and 1936 (relating to the Medicaid Integrity Program) other than
				paragraphs (1), (2)(A), and (3) of old section 1936(e).
										(14)Old section
				1902(a)(70)(B)(iv) (relating to prohibitions on referrals and conflict of
				interest for certain brokers of non-emergency medical transportation).
										(15)Old sections
				1902(a)(71) and 1940 (relating to a required asset verification
				program).
										(16)Old section
				1902(p) (relating to exclusion of certain individuals or entities).
										(17)Old section
				1902(x) (relating to unique identifiers for physicians).
										(18)Old section
				1903(p) (relating to interstate collection of rights of support).
										(19)Old section
				1903(r)(2) (relating to requirements for mechanized claims processing and
				information retrieval systems).
										(20)Old section
				1903(u) (relating to erroneous excess payments), other than clause (v) of
				paragraph (1)(D).
										(21)Old section
				1903(v) and the seventh sentence of old section 1902(a) (relating to
				limitations on payments for services furnished to aliens), other than
				subparagraphs (A) and (B) of paragraph (4).
										(22)Old section
				1903(x) (relating to citizenship documentation).
										(23)Old section 1909
				(relating to State false claims act requirements for increased State share of
				recoveries).
										(24)Old section 1914
				(relating to withholding of Federal share of payments for certain Medicare
				providers).
										(25)Old section 1917
				(relating to liens, adjustments and recoveries, and transfers of
				assets).
										(26)Old section 1922
				(relating to correction and reduction plans for intermediate care facilities
				for the mentally retarded).
										EGrants to States
				for Administration
									1951.Authorization
				of appropriations; payments to states
										(a)In
				generalFor the purpose of
				providing grants to States for administrative expenses necessary to carry out
				parts A and B, there is authorized to be appropriated—
											(1)for fiscal year 2011, $7,000,000,000;
				and
											(2)for each succeeding fiscal year, the amount
				authorized under this subsection for the preceding fiscal year, increased by 3
				percent.
											(b)Payments to
				States
											(1)In
				generalFrom the amount
				appropriated pursuant to subsection (a) for a fiscal year, the Secretary shall
				pay each State with approved plans under parts A and B for the fiscal year an
				amount equal to the product of the amount appropriated for the fiscal year and
				the ratio of the total amount of payments made to the State under paragraphs
				(2) through (7) of section 1903(a) for fiscal year 2008 (as such section was in
				effect for that fiscal year) to the total amount of such payments made to all
				States for such fiscal year.
											(2)Pro rata
				adjustmentThe Secretary
				shall make pro rata adjustments to the amounts determined under paragraph (1)
				for a fiscal year as necessary so as to not exceed the amount appropriated
				pursuant to subsection (a) for the fiscal year.
											1952.Cost-sharing
				protections
										(a)In
				generalA State may impose
				cost-sharing for individuals provided acute care medical assistance under a
				State plan under part A or long-term care services and supports under a State
				plan under part B consistent with the following:
											(1)The State may (in
				a uniform manner) require payment of monthly premiums or other cost-sharing set
				on a sliding scale based on family income.
											(2)A premium or other
				cost-sharing requirement imposed under paragraph (1) may only apply to the
				extent that, in the case of an individual whose family income—
												(A)exceeds 150
				percent of the poverty line, the aggregate annual amount of such premium and
				other cost-sharing charges imposed under the plan does not exceed 5 percent of
				the individual's annual income; and
												(B)exceeds 250
				percent of the poverty line, the aggregate annual amount of such premium and
				other cost-sharing charges do not exceed 7.5 percent of the individual's annual
				income.
												(3)A State shall not
				require prepayment of any premium or cost-sharing imposed pursuant to paragraph
				(1) and shall not terminate eligibility of an individual under the State plan
				on the basis of failure to pay any such premium or cost-sharing until such
				failure continues for a period of at least 60 days from the date on which the
				premium or cost-sharing became past due. The State may waive payment of any
				such premium or cost-sharing in any case where the State determines that
				requiring such payment would create an undue hardship.
											(b)Application to
				institutionalized individualsA State may impose cost-sharing
				consistent with subsection (a) to individuals who are patients in, or residents
				of, a medical institution or nursing facility except that rules relating to the
				post-eligibility treatment of income (including a minium monthly personal needs
				allowance) applicable to institutionalized individuals under old title XIX
				shall apply in the same manner to individuals eligible for long-term care
				services and supports under a State plan under part B.
										(c)Poverty line definedIn this section, the term poverty
				line has the meaning given such term in section 673(2) of the Community
				Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required
				by such section.
										1953.Application of
				certain requirements under pre-modernized MedicaidThe
				following old provisions shall apply to the State plans under this
				title:
										(1)Old State plan
				requirements
											(A)Old section
				1902(a)(1) (relating to the requirement for plans to be in effect in all
				political subdivisions of the State).
											(B)Old section
				1902(a)(2) (relating to State financial participation).
											(C)Old section
				1902(a)(3) (relating to opportunity for a fair hearing).
											(D)Old section
				1902(a)(4) (relating to administration).
											(E)Old section
				1902(a)(5) (relating to designation of a single State agency).
											(F)Old section
				1902(a)(6) (relating to reporting requirements).
											(G)Old section
				1902(a)(7) (relating to restrictions on the use or disclosure of
				information).
											(H)Old section
				1902(a)(8) (relating to applications for assistance).
											(I)Old section
				1902(a)(11) (relating to cooperative agreements with other State
				agencies).
											(J)Old section
				1902(a)(12) (relating to determinations of blindness).
											(K)Old section
				1902(a)(13) (relating to determination of rates of payment for certain
				services), other than clause (iv) of subparagraph (A).
											(L)Subsections
				(a)(15) and (bb) of old section 1902(a) (relating to payment for services
				provided by rural health clinics and federally qualified health
				centers).
											(M)Old section
				1902(a)(16) (relating to furnishing services to individuals when absent from
				the State).
											(N)Old section
				1902(a)(22) (relating to certain administrative provisions).
											(O)Paragraphs (23)
				and (25)(D) of old section 1902(a) (relating to any willing provider
				requirements).
											(P)Old section
				1902(a)(24) (relating to consultative services by other agencies).
											(Q)Old section
				1902(a)(26) (relating to review of need for inpatient mental hospital services
				and written plan of care requirements).
											(R)Old section
				1902(a)(27) (relating to provider record keeping requirements).
											(S)Old section
				1902(a)(30)(A) (relating to utilization review).
											(T)Old section
				1902(a)(31) (relating to written plan of care for services and review for
				intermediate care facility for the mentally retarded services).
											(U)Old section
				1902(a)(33)(A) (relating to quality review requirements).
											(V)Old section
				1902(a)(36) (relating to public availability of facility surveys).
											(W)Old section
				1902(a)(38) (relating to the provision of information described in section
				1128(b)(9) by certain entities).
											(X)Old section
				1902(a)(39) (relating to the exclusion of certain entities).
											(Y)Old section
				1902(a)(40) (relating to requirement for uniform reporting systems).
											(Z)Old section
				1902(a)(41) (relating to notice to State medical licensing boards).
											(AA)Old section
				1902(a)(42) (relating to certain audit requirements).
											(BB)Old section
				1902(a)(48) (relating to eligibility cards).
											(CC)Old section
				1902(a)(55) (relating to the receipt and initial processing of applications,
				but only to the extent such section is consistent with the policy embodied in
				the State plans under parts A and B).
											(DD)Subsections
				(a)(56) and (s) of old section 1902 (relating to adjusted payments for certain
				inpatient hospital services).
											(EE)Old section
				1902(a)(59) (relating to maintenance of list of participating
				physicians).
											(FF)The second
				sentence of old section 1902 (relating to designation of certain State
				agencies).
											(GG)Old section
				1902(b) (relating to limitations on approval of plans).
											(HH)Old section
				1902(j) (relating to application of requirements to American Samoa and the
				Northern Mariana Islands).
											(2)Other old title
				XIX requirements
											(A)Old section
				1903(b)(4) (relating to limitations on payments to enrollment brokers).
											(B)Old section
				1903(c) (relating to furnishing of services included in a program or plan under
				part B or C of the Individuals with Disabilities Education Act).
											(C)Old section
				1903(d) (relating to payments).
											(D)Old section
				1903(e) (relating to costs with respect to certain hospital services).
											(E)Old section
				1903(i) (relating to limitations on payments).
											(F)Old section
				1903(r) (relating to requirements for mechanized claims processing and
				information retrieval systems).
											(G)Subsections (b)(5)
				and (w) of old section 1903 (relating to limitations on payments related to
				provider taxes).
											(H)Old section 1904
				(relating to operation of State plans).
											(I)Old sections
				1902(a)(60) and 1908A (relating to medical child support).
											(J)Paragraphs (32)(D)
				and (62) of old section 1902(a) and section 1928 (relating to program for
				distribution of pediatric vaccines).
											FOther
				Provisions
									1961.Application of
				certain requirements under pre-modernized MedicaidThe
				following old provisions shall apply under this part:
										(1)The third sentence
				of old section 1902 (relating to nonapplication of certain old provisions to a
				religious nonmedical health care institution).
										(2)Old section 1918
				(relating to application of provisions of title II relating to
				subpoenas).
										(3)Old section 1939
				(relating to references to laws directly affecting the Medicaid
				program.
										.
					(b)Repeal of Title
			 XXIEffective January 1, 2011, title XXI of the Social Security
			 Act (42 U.S.C. 1397aa et seq.) is repealed.
					402.Outreach
					(a)Authorization of
			 appropriationsThe following amounts are authorized to be
			 appropriated to the Secretary of Health and Human Services:
						(1)For fiscal year
			 2009, $100,000,000 for the design and implementation of a public outreach
			 campaign to inform the public about the changes to the programs under such
			 titles that take effect on January 1, 2011, as a result of the amendment made
			 by section 401.
						(2)For each of fiscal
			 years 2010 and 2011, $200,000,000 to carry out such public outreach
			 campaign.
						(3)For fiscal year
			 2012, $50,000,000 to carry out such public outreach campaign.
						(b)AvailabilityFunds
			 appropriated under subsection (a) shall remain available for expenditure
			 through September 30, 2012.
					(c)Authority for
			 use of fundsThe Secretary may use funds made available under
			 paragraphs (2) and (3) of subsection (a) to award grants to, or enter into
			 contracts with, public or private entities, including States, local
			 governments, schools, churches, and community groups.
					403.Transition
			 rules; miscellaneous provisions
					(a)In
			 general
						(1)Not later than
			 June 30, 2010, a State that is one of the 50 States or the District of Columbia
			 shall inform all individuals enrolled in a State plan under title XIX or XXI of
			 the Social Security Act on such date (and any new enrollees after such date) of
			 the changes to the programs under such titles that take effect on January 1,
			 2011, as a result of the amendment made by section 401.
						(2)No State that is
			 one of the 50 States or the District of Columbia shall approve any applications
			 for medical assistance or child health assistance under a State plan under
			 title XIX or XXI (as in effect for fiscal year 2010) after December 31,
			 2010.
						(b)Submission of
			 legislative proposal for technical and conforming amendmentsNot
			 later than 6 months after the date of enactment of this Act, the Secretary of
			 Health and Human Services shall submit to Congress a legislative proposal for
			 such technical and conforming amendments as are necessary to carry out the
			 amendments made by this Act.
					BSupplemental
			 Health Care Assistance for Low-Income Families
				411.Supplemental
			 Health Care Assistance for Low-Income FamiliesPart D of title III of the Public Health
			 Service Act (42 U.S.C. 254b et seq.) is amended by adding at the end the
			 following:

						XIHealth care
				assistance to low-income families
							340A–1.Financial
				assistance to low-income families
								(a)In
				generalThe Secretary shall supplement the costs of private
				health insurance for eligible low-income families through the distribution of
				supplemental debit cards to eligible families, which may be used to pay for
				costs associated with health care for the members of such eligible families and
				provide direct support to such families in accessing health care.
								(b)Eligibility
									(1)Eligible
				familiesTo be eligible for financial assistance under this
				section—
										(A)a family
				shall—
											(i)consist of 2 or
				more individuals living together who are related by marriage, birth, adoption,
				or guardianship;
											(ii)have a gross
				income that does not exceed 200 percent of the poverty line, as applicable to a
				family of the size involved; and
											(iii)include at least
				1 individual who is a dependent under the age of 19; and
											(B)no member of the
				family shall be covered by private health insurance.
										(2)Determination of
				gross incomeThe gross income of a family shall be determined by
				taking the sum of the income of each family member who is at least age 21 but
				not older than age 65, except that the income of any member of the family who
				qualifies for coverage under Medicaid Part A or B shall not be counted.
									(3)Limitation on
				individual eligibility; assistance
										(A)In
				generalNo individual who is a member of an eligible family under
				paragraph (1) is eligible to qualify separately for financial assistance under
				this section.
										(B)AliensThe
				Secretary shall ensure that financial assistance under this section is not
				provided for costs associated with health care for any member of an eligible
				family who is an alien individual who is not a lawful permanent resident of the
				United States.
										(c)Supplemental
				debit card for health care expenditures
									(1)In
				generalThe Secretary shall issue to each eligible family that
				enrolls in the program in accordance with subsection (f) a supplemental debit
				card with a dollar-amount value, in accordance with subsection (d), that may be
				used to pay for qualifying health care expenses.
									(2)Use of the debit
				card
										(A)Qualifying
				health care expensesA supplemental debit card issued under this
				section may be used by members of the eligible family to pay for—
											(i)the purchase of
				health care insurance for any member of the family;
											(ii)cost sharing
				expenses related to health care, including deductibles, copayments, and
				coinsurance, for any member of the family; and
											(iii)the direct
				purchase of health care services and supplies for any member of the
				family.
											(B)Geographic
				rangeEach supplemental debit card may be used to pay for
				qualifying health care expenses incurred anywhere in the 50 States or the
				District of Columbia.
										(C)LimitationsNo
				supplemental debit card shall be used to make a payment for any cost—
											(i)incurred prior to
				the determination of the family's eligibility for assistance under this
				section; or
											(ii)that is not a
				health-related expense.
											(3)Rollover of
				unused amountsNot more than one-quarter of the annual dollar
				amount of a supplemental debit card that is unexpended at the end of each
				12-month period may rollover—
										(A)to the family's
				supplemental debit card for expenditure during the subsequent 12-month period,
				provided that the family to which the supplemental debit card was issued in the
				previous 12-month period is eligible to receive a supplemental debit card in
				the subsequent 12-month period; or
										(B)to the family's
				health savings account (as defined in section 223(g)(2) of the Internal Revenue
				Code of 1986).
										(4)Monthly
				statementsThe Secretary shall issue a monthly statement to each
				family to which a supplemental debit card has been issued under this section,
				which shall state each payment made with the family's supplemental debit card
				during the month covered by the statement, the dollar amount of each such
				payment, and the provider to which each such payment was made.
									(d)Amount of
				financial assistance
									(1)Amounts for
				calendar year 2011Subject to paragraph (5), the amount of
				financial assistance available to each eligible family during the calendar year
				2011 shall be determined as follows:
										(A)Each family whose
				annual income does not exceed 100 percent of the poverty level, as applicable
				to a family of the size involved, shall receive $5,000.
										(B)Each family whose
				annual income exceeds 100 percent, but does not exceed 200 percent, of the
				poverty level, as applicable to a family of the size involved, shall receive an
				amount as follows:
											(i)For families whose
				annual income exceeds 100 percent but does not exceed 120 percent, of the
				poverty level, $4,000.
											(ii)For families
				whose annual income exceeds 120 percent but does not exceed 140 percent, of the
				poverty level, $3,500.
											(iii)For families
				whose annual income exceeds 140 percent but does not exceed 160 percent, of the
				poverty level, $3,000.
											(iv)For families
				whose annual income exceeds 160 percent but does not exceed 180 percent, of the
				poverty level, $2,500.
											(v)For families whose
				annual income exceeds 180 percent but does not exceed 200 percent, of the
				poverty level, $2,000.
											(2)Additional
				amountsIn addition to the amounts under paragraph (1), subject
				to paragraph (5), the following amounts shall be added to the supplemental
				debit cards of qualifying families:
										(A)For each pregnancy
				during which a pregnant woman's family is eligible for assistance under this
				section, an additional amount of $1,000 shall be added to the family's
				supplemental debit card, except that no family shall receive such additional
				$1,000 for any pregnancy for which the family received such amount in the
				previous 12-month period.
										(B)For each member of
				an eligible family who is less than 1 year old on any day within the calendar
				year in which the family is eligible for assistance, an additional amount of
				$500 shall be added to the family's supplemental debit card.
										(3)Cost of living
				adjustmentsIn the case of
				any taxable year beginning in a calendar year after 2011, each dollar amount
				contained in paragraphs (1) and (2) shall be increased in the same manner as
				the dollar amounts specified in section 25E(b)(3) of the Internal Revenue Code
				of 1986 are increased by the blended cost-of-living adjustment determined under
				subsection (k)(2) of section 25E of the Internal Revenue Code for the taxable
				year involved.
									(4)State option to
				increase amountsAt the option of each State, amounts in excess
				of the annual dollar amounts under paragraphs (1) and (2) may be provided
				through the supplemental debit card to eligible families in that State, but no
				Federal funds shall be paid to any State for any amount provided in excess of
				such annual dollar amount.
									(5)Risk
				adjustmentThe Secretary may adjust the amount of financial
				assistance available to an eligible family for a calendar year under this
				section based on age, health indicators, and other factors that represent
				distinct patterns of health care services utilization and costs.
									(e)Contributions of
				States
									(1)In
				generalAs a condition for receiving Federal funds under Part A
				or Part B of Medicaid, each State shall contribute 50 percent of the total
				amount expended under the supplemental debit card program by the participating
				families that reside within the State during the time that the family resides
				in that State. For purposes of this section, the residency of a family is
				determined by the residency the legally responsible head of the
				household.
									(2)Payments from
				States
										(A)Billing
				notification
											(i)TimingOn
				June 30th and December 31st of each year, the Secretary shall send written
				notification to each State of that State's 50 percent share of expenses, as
				described in paragraph (1), for the 6-month period ending on the last day of
				the month previous to such notification.
											(ii)ContentsEach
				such notification to a State shall clearly state—
												(I)the payment amount
				due from the State;
												(II)the name of each
				individual for whom payment was made through the supplemental debit card
				program;
												(III)the health care
				provider to whom each payment was made;
												(IV)the amount of
				each payment; and
												(V)any other
				information, as the Secretary requires.
												(B)PaymentsEach
				State shall make a payment to the Secretary, in the amount billed, not later
				than 30 days after the billing notification date, in accordance with
				subparagraph (A)(i).
										(C)PenaltiesIf
				a State fails to pay to the Secretary an amount required under subparagraph
				(B), interest shall accrue on such amount at the rate provided under old
				section 1903(d)(5) of the Social Security Act. The amount so owed and
				applicable interest shall be immediately offset against amounts otherwise
				payable to the State under this section, in accordance with the Federal Claims
				Collection Act of 1996 and applicable regulations.
										(f)Enrollment
									(1)In
				generalThe Secretary shall establish procedures and times for
				enrollment in the supplemental debit card program. Open enrollment shall be
				available not less than 4 times per calendar year.
									(2)Transition of
				individuals enrolled in Medicaid or the State Children's Health Insurance
				Program
										(A)Information from
				the StatesEach State shall—
											(i)not later than
				June 30, 2010, inform all individuals then enrolled in Medicaid or the State
				Children's Health Insurance Program (SCHIP), of the changes in effect beginning
				on January 1, 2011; and
											(ii)not later than
				October 31, 2010, redetermine the eligibility of each individual enrolled in
				Medicaid or SCHIP, other than those individuals who qualify for Medicaid or
				SCHIP as disabled, elderly, or a special population, for the supplemental debit
				card program, according to the eligibility criteria under subsection
				(b).
											(B)Automatic
				enrollmentThe Secretary shall provide for the automatic
				enrollment in the supplemental debit card program of all individuals who are
				enrolled in Medicaid or SCHIP and who have been redetermined by a State under
				subparagraph (A) to be eligible for Medicaid or SCHIP. Any individual who is
				determined by a State not to qualify for the supplemental debit card program
				may retain coverage under Medicaid or SCHIP until June 30, 2011.
										(3)Assistance with
				qualified health insurance creditEach State shall, to the extent
				practicable, provide individuals residing within the State with information
				regarding the qualified health insurance credit described in section 25E of the
				Internal Revenue Code of 1986, including information regarding eligibility for,
				and how to claim, such credit.
									(g)Administration
									(1)National
				systemThe Secretary may enter into contracts or agreements with
				a State, a consortium of States, or a private entity, including a bank,
				enrollment broker, or similar entity, to establish and maintain a unified
				national system to support the processes and transactions necessary to
				administer this section.
									(2)Automated
				systemThe Secretary shall establish an automated means, such as
				an electronic benefit transfer system, by which the benefits under this section
				shall be transferred to eligible families.
									(3)Verification of
				applicant informationThe Secretary may verify information
				provided by applicants with the appropriate Federal, State, and local agencies,
				including the Internal Revenue Service, the Social Security Administration, the
				Department of Labor, and child support enforcement agencies.
									(4)Choice
				counselingThe Secretary may enter into contracts or agreements
				with a State, a consortium of a State, or a private entity, including an
				enrollment broker or community organization or other organization, to educate
				eligible families about their options and to assist in their enrollment in the
				supplemental debit card plan.
									(5)AppealsThe
				Secretary shall establish an independent appeals process, to be administered by
				an entity separate from the entity that makes initial eligibility
				determinations, which shall be available to individuals who are denied benefits
				under the supplemental debit card program.
									(6)Resolution of
				errorsThe Secretary shall provide for a reconciliation process
				with the States to resolve any errors and adjudicate disputes due to incomplete
				or false information in a family's application or in the billing process
				described in subsection (e).
									(7)Penalties for
				false informationAny person who provides false information to
				qualify for the supplemental debit card program shall pay a penalty in the
				amount of 110 percent of the amount of assistance paid on behalf of such person
				and all members of such person's family.
									(h)Implementation
				planNot later than 6 months after the date of enactment of this
				section, the Secretary shall submit to Congress a plan for implementing this
				program during fiscal years 2009–2012.
								(i)Authorization of
				appropriations
									(1)Administration
				of the supplemental debit card programTo administer the program
				under this section, there are authorized to be appropriated—
										(A)for fiscal year
				2009, $300,000,000, for the design of a unified, national system of conducting
				the supplemental debit card program;
										(B)for fiscal year
				2010, $1,000,000,000 for start-up costs, including, contracting, hiring and
				training employees, and testing the program; and
										(C)for fiscal year
				2011 and each subsequent fiscal year, $3,000,000,000.
										(2)Authorization of
				benefits under the supplemental debit card programTo provide the
				supplemental debit card benefits described in this section, there are
				authorized to be appropriated—
										(A)for fiscal year
				2011, $24,020,000,000;
										(B)for fiscal year
				2012, $25,220,000,000;
										(C)for fiscal year
				2013, $26,480,000,000;
										(D)for fiscal year
				2014, $27,810,000,000; and
										(E)for fiscal year
				2015,
				$29,200,000,000.
										.
				VFixing Medicare
			 for American seniors
			AIncreasing
			 programmatic efficiency, economy, and accountability
				501.Eliminating inefficiencies and increasing
			 choice in Medicare AdvantagePart C of title XVIII of the Social Security
			 Act is amended by adding at the end the following new section:

						1860C–2.Medicare Advantage competitive bidding(a)Competitive bidding
								(1)In
				generalIn order to promote
				competition among Medicare Advantage plans and to increase the quality of care
				furnished under such plans, the Secretary shall establish and implement a
				competitive bidding mechanism under this part.
								(2)Mechanism to
				begin in 2011The mechanism established under paragraph (1) shall
				apply to all MA organizations and plans beginning in 2011.
								(3)No effect on
				part D benefitsThe mechanism established under paragraph (1)
				shall not affect the provisions of this part relating to benefits under part D,
				including the bidding mechanism used for benefits under such part.
								(b)Rules for
				competitive bidding mechanismNotwithstanding any other provision
				of this part, the following rules shall apply under the competitive bidding
				mechanism established under subsection (a).
								(1)BenchmarkBenchmark
				amounts for an area for a year shall be established solely through the
				competitive bids of MA plans. The benchmark amount for each area for a year
				shall be the average bid of the plans in that area for that year. In
				establishing the benchmark for an area for a year under the preceding sentence,
				the Secretary shall exclude the highest and lowest bid for that area and year.
				The benchmark amount for an area for a year may not exceed the benchmark amount
				for that area and year that would have applied if this section had not been
				enacted.
								(2)BidsThe
				MA plan bid shall reflect the per capita payments that the MA plan will accept
				for providing a benefit package that is actuarially equivalent to 106 percent
				of the value of the original Medicare fee-for-service program option. MA plan
				bid submissions shall include data on plan average provider network contract
				rates compared to the rates under the original Medicare fee-for-service program
				option for the top 5 most common claim submissions per provider type.
								(3)Risk
				AdjustmentThe benchmark under paragraph (1) and the MA plan bid
				shall be risk adjusted using the risk adjustment requirements under this
				part.
								(4)Beneficiary
				premiumsThe MA monthly basic beneficiary premium for a
				beneficiary who enrolls in an MA plan whose plan bid is at or below the
				benchmark shall be zero and the beneficiary shall receive the full difference
				(if any) between the bid and the benchmark in the form of additional benefits
				or as a rebate on their premiums under this title. The MA monthly basic
				beneficiary premium for a beneficiary who enrolls in an MA plan whose plan bid
				is above the benchmark shall be equal to the amount by which the bid exceeds
				the benchmark.
								(5)Benchmark
				amounts for rural countiesThe Secretary may adjust the benchmark
				amount established under paragraph (1) for any rural county (as identified by
				the Secretary after consultation with the Secretary of Commerce) to encourage
				plan participation in such county.
								(6)Existing
				requirementsRequirements relating to licensure, quality, and
				beneficiary protections that would otherwise apply under this part shall apply
				under the competitive bidding mechanism established under subsection
				(a).
								(c)WaiverIn order to implement the competitive
				bidding mechanism under established subsection (a), the Secretary may waive or
				modify requirements under this
				part.
							.
				502.Medicare
			 Accountable Care Organization demonstration program
					(a)Establishment
						(1)In
			 generalIn order to promote innovative care coordination and
			 delivery that is cost-effective, the Secretary of Health and Human Services (in
			 this section referred to as the Secretary) shall conduct a
			 demonstration program under the Medicare program under which—
							(A)groups of
			 providers meeting certain criteria may work together to manage and coordinate
			 care for Medicare fee-for-service beneficiaries through an Accountable Care
			 Organization (in this section referred to as an ACO); and
							(B)providers in
			 participating ACOs are eligible for bonuses based on performance.
							(2)Medicare
			 fee-for-service beneficiary definedIn this section, the term
			 Medicare fee-for-service beneficiary means an individual who is
			 enrolled in the original medicare fee-for-service program under parts A and B
			 of title XVIII of the Social Security Act and not enrolled in an MA plan under
			 part C of such title.
						(b)Eligible
			 ACOs
						(1)In
			 generalSubject to paragraph (2), the following provider groups
			 are eligible to participate as ACOs under the demonstration program under this
			 section:
							(A)Physicians in
			 group practice arrangements.
							(B)Networks of
			 individual physician practices.
							(C)Partnerships or
			 joint venture arrangements between hospitals and physicians.
							(D)Partnerships or
			 joint ventures, which may include pharmacists providing medication therapy
			 management.
							(E)Hospitals
			 employing physicians.
							(F)Integrated
			 delivery systems.
							(G)Community-based
			 coalitions of providers.
							(2)RequirementsAn
			 ACO shall meet the following requirements:
							(A)The ACO shall have
			 a formal legal structure that would allow the organization to receive and
			 distribute bonuses to participating providers.
							(B)The ACO shall
			 include the primary care providers of at least 5,000 Medicare fee-for-service
			 beneficiaries.
							(C)The ACO shall be
			 willing to become accountable for the overall care of the Medicare
			 fee-for-service beneficiaries.
							(D)The ACO shall
			 provide the Secretary with a list of primary care and specialist physicians
			 participating in the ACO to support the beneficiary assignment, implementation
			 of performance measures, and the determination of bonus payments under the
			 demonstration program.
							(E)The ACO shall have
			 in place contracts with a core group of key specialist physicians, a leadership
			 and management structure, and processes to promote evidence-based medicine and
			 to coordinate care.
							(c)Assignment of
			 Medicare fee-for-service beneficiaries
						(1)In
			 generalUnder the demonstration program under this section, each
			 Medicare fee-for-service Medicare beneficiary shall be automatically assigned
			 to a primary care provider. Such assignment shall be based on the physician
			 from whom the beneficiary received the most primary care in the preceding
			 year.
						(2)Beneficiaries
			 may continue to see providers outside of the ACOUnder the
			 demonstration program under this section, a Medicare fee-for-service Medicare
			 beneficiary may continue to see providers in and outside of the ACO to which
			 they have been assigned.
						(d)Bonus
			 payments
						(1)In
			 generalUnder the demonstration program, Medicare payments shall
			 continue to be made to providers under the original Medicare fee-for-service
			 program in the same manner as they would otherwise be made except that a
			 participating ACO is eligible for bonuses if—
							(A)it meets certain
			 quality performance measures; and
							(B)spending for their
			 Medicare fee-for-service beneficiaries meets the requirement under paragraph
			 (3).
							(2)QualityUnder
			 the demonstration program under this section, providers meet the requirement
			 under paragraph (1)(A) if they generally follow consensus-based guidelines
			 established by non-government professional medical societies. Patient
			 satisfaction and risk-adjusted outcomes shall be determined through an
			 independent entity with medical expertise.
						(3)Requirement
			 relating to spending
							(A)In
			 generalAn ACO shall only be eligible to receive a bonus payment
			 if the average Medicare expenditures under the ACO for Medicare fee-for-service
			 beneficiaries over a two-year period is at least 2 percent below the average
			 benchmark for the corresponding two-year period. The benchmark for each ACO
			 shall be set using the most recent three years of total per-beneficiary
			 spending for Medicare fee-for-service beneficiaries assigned to the ACO. Such
			 benchmark shall be updated by the projected rate of growth in national per
			 capita spending for the original medicare fee-for-service program, as projected
			 (using the most recent three years of data) by the Chief Actuary of the Centers
			 for Medicare & Medicaid Services.
							(4)Amount of bonus
			 paymentsThe amount of the bonus payment to a participating ACO
			 shall be one-half of the percentage point difference between the two-year
			 average of their patients’ Medicare expenditures and 98 percent of the two-year
			 average benchmark. The bonus amount, in dollars, shall be equal to the bonus
			 share multiplied by the benchmark for the most recent year.
						(5)LimitationBonus
			 payments may only be made to an ACO if the primary care provider to which the
			 Medicare fee-for-service beneficiary has been assigned under subsection (c)
			 elects to participate in such ACO.
						(e)Waiver
			 authorityThe Secretary may waive such requirements of titles XI
			 and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as
			 may be appropriate for the purpose of carrying out the demonstration program
			 under this section.
					(f)ReportUpon
			 completion of the demonstration program under this section, the Secretary shall
			 submit to Congress a report on the program together with such recommendations
			 as the Secretary determines appropriate.
					503.Reducing
			 government handouts to wealthier seniors
					(a)Elimination of annual indexing of income
			 thresholds for reduced part B premium subsidies
						(1)In
			 generalParagraph (5) of
			 section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is
			 repealed.
						(2)Effective
			 dateThe repeal made by paragraph (1) shall apply to premiums for
			 months beginning after December 2010.
						(b)Income-related
			 reduction in part D premium subsidy
						(1)Income-related
			 reduction in part D premium subsidy
							(A)In
			 generalSection 1860D–13(a) of the Social Security Act (42 U.S.C.
			 1395w–113(a)) is amended by adding at the end the following new
			 paragraph:

									(7)Reduction in
				premium subsidy based on income
										(A)In
				generalIn the case of an individual whose modified adjusted
				gross income exceeds the threshold amount applicable under paragraph (2) of
				section 1839(i) (including application of paragraph (5) of such section) for
				the calendar year, the monthly amount of the premium subsidy applicable to the
				premium under this section for a month after December 2010 shall be reduced
				(and the monthly beneficiary premium shall be increased) by the monthly
				adjustment amount specified in subparagraph (B).
										(B)Monthly
				adjustment amountThe monthly adjustment amount specified in this
				subparagraph for an individual for a month in a year is equal to the product
				of—
											(i)the quotient
				obtained by dividing—
												(I)the applicable
				percentage determined under paragraph (3)(C) of section 1839(i) (including
				application of paragraph (5) of such section) for the individual for the
				calendar year reduced by 25.5 percent; by
												(II)25.5 percent;
				and
												(ii)the base
				beneficiary premium (as computed under paragraph (2)).
											(C)Modified
				adjusted gross incomeFor purposes of this paragraph, the term
				modified adjusted gross income has the meaning given such term in
				subparagraph (A) of section 1839(i)(4), determined for the taxable year
				applicable under subparagraphs (B) and (C) of such section.
										(D)Determination by
				commissioner of social securityThe Commissioner of Social
				Security shall make any determination necessary to carry out the income-related
				reduction in premium subsidy under this paragraph.
										(E)Procedures to
				assure correct income-related reduction in premium subsidy
											(i)Disclosure of
				base beneficiary premiumNot later than September 15 of each year
				beginning with 2010, the Secretary shall disclose to the Commissioner of Social
				Security the amount of the base beneficiary premium (as computed under
				paragraph (2)) for the purpose of carrying out the income-related reduction in
				premium subsidy under this paragraph with respect to the following year.
											(ii)Additional
				disclosureNot later than October 15 of each year beginning with
				2010, the Secretary shall disclose to the Commissioner of Social Security the
				following information for the purpose of carrying out the income-related
				reduction in premium subsidy under this paragraph with respect to the following
				year:
												(I)The modified
				adjusted gross income threshold applicable under paragraph (2) of section
				1839(i) (including application of paragraph (5) of such section).
												(II)The applicable
				percentage determined under paragraph (3)(C) of section 1839(i) (including
				application of paragraph (5) of such section).
												(III)The monthly
				adjustment amount specified in subparagraph (B).
												(IV)Any other
				information the Commissioner of Social Security determines necessary to carry
				out the income-related reduction in premium subsidy under this
				paragraph.
												(F)Rule of
				constructionThe formula used to determine the monthly adjustment
				amount specified under subparagraph (B) shall only be used for the purpose of
				determining such monthly adjustment amount under such
				subparagraph.
										.
							(B)Collection of
			 monthly adjustment amountSection 1860D–13(c) of the Social
			 Security Act (42 U.S.C. 1395w–113(c)) is amended—
								(i)in
			 paragraph (1), by striking (2) and (3) and inserting (2),
			 (3), and (4); and
								(ii)by
			 adding at the end the following new paragraph:

										(4)Collection of
				monthly adjustment amount
											(A)In
				generalNotwithstanding any provision of this subsection or
				section 1854(d)(2), subject to subparagraph (B), the amount of the
				income-related reduction in premium subsidy for an individual for a month (as
				determined under subsection (a)(7)) shall be paid through withholding from
				benefit payments in the manner provided under section 1840.
											(B)AgreementsIn
				the case where the monthly benefit payments of an individual that are withheld
				under subparagraph (A) are insufficient to pay the amount described in such
				subparagraph, the Commissioner of Social Security shall enter into agreements
				with the Secretary, the Director of the Office of Personnel Management, and the
				Railroad Retirement Board as necessary in order to allow other agencies to
				collect the amount described in subparagraph (A) that was not withheld under
				such
				subparagraph.
											.
								(2)Conforming
			 amendments
							(A)MedicarePart
			 D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.) is
			 amended—
								(i)in
			 section 1860D–13(a)(1)—
									(I)by redesignating
			 subparagraph (F) as subparagraph (G);
									(II)in subparagraph
			 (G), as redesignated by subparagraph (A), by striking (D) and
			 (E) and inserting (D), (E), and (F); and
									(III)by inserting
			 after subparagraph (E) the following new subparagraph:

											(F)Increase based
				on incomeThe monthly beneficiary premium shall be increased
				pursuant to paragraph (7).
											;
				and
									(ii)in
			 section 1860D–15(a)(1)(B), by striking paragraph (1)(B) and
			 inserting paragraphs (1)(B) and (1)(F).
								(B)Internal Revenue
			 CodeSection 6103(l)(20) of the Internal Revenue Code of 1986
			 (relating to disclosure of return information to carry out Medicare part B
			 premium subsidy adjustment) is amended—
								(i)in
			 the heading, by striking part B premium subsidy adjustment and
			 inserting parts B and D
			 premium subsidy adjustments;
								(ii)in
			 subparagraph (A)—
									(I)in the matter
			 preceding clause (i), by inserting or 1860D–13(a)(7) after
			 1839(i); and
									(II)in clause (vii),
			 by inserting after subsection (i) of such section the following:
			 or under section 1860D–13(a)(7) of such Act;
									(iii)in
			 subparagraph (B)—
									(I)by inserting
			 or such section 1860D–13(a)(7) before the period at the
			 end;
									(II)as amended by
			 clause (i), by inserting or for the purpose of resolving tax payer
			 appeals with respect to any such premium adjustment before the period
			 at the end; and
									(III)by adding at the
			 end the following new sentence: Officers, employees, and contractors of
			 the Social Security Administration may disclose such return information to
			 officers, employees, and contractors of the Department of Health and Human
			 Services, the Office of Personnel Management, the Railroad Retirement Board,
			 the Department of Justice, and the courts of the United States to the extent
			 necessary to carry out the purposes described in the preceding
			 sentence.; and
									(iv)by
			 adding at the end the following new subparagraph:

										(C)Timing of
				disclosureReturn information shall be disclosed to officers,
				employees, and contractors of the Social Security Administration under
				subparagraph (A) not later than the date that is 90 days prior to the date on
				which the taxpayer first becomes entitled to benefits under part A of title
				XVIII of the Social Security Act or eligible to enroll for benefits under part
				B of such
				title.
										.
								504.Rewarding preventionSection 1839 of the Social Security Act (42
			 U.S.C. 1395r) is amended—
					(1)in subsection (a)(2), by striking
			 and (i) and inserting (i), and (j); and
					(2)by adding at the end the following new
			 subsection:

							(j)(1)With respect to the monthly premium amount
				for months after December 2010, the Secretary may adjust (under procedures
				established by the Secretary) the amount of such premium for an individual
				based on whether or not the individual participates in certain healthy
				behaviors, such as weight management, exercise, nutrition counseling,
				refraining from tobacco use, designating a health home, and other behaviors
				determined appropriate by the Secretary.
								(2)In making the adjustments under paragraph
				(1) for a month, the Secretary shall ensure that the total amount of premiums
				to be paid under this part for the month is equal to the total amount of
				premiums that would have been paid under this part for the month if no such
				adjustments had been made, as estimated by the
				Secretary.
								.
					505.Promoting healthcare provider
			 transparency
					(a)TransparencyTitle XVIII of the Social Security Act is
			 amended by adding at the end the following new section:

							1899.Price transparency requirements (a)Pre-treatment disclosureA provider of services (as defined in
				section 1861(u)) and a supplier (as defined in section 1861(d)) shall provide
				to each individual (regardless of whether or not the individual is a
				beneficiary under this title) who is scheduled to receive a treatment (or to
				begin a course of treatment) that is not for an emergency medical condition the
				estimated price that the provider of services or supplier will charge for the
				treatment (or course of treatment). Such price shall be determined at the time
				of scheduling.
								(b)Post-treatment disclosureA provider of services (as so defined) and
				a supplier (as so defined) shall include with any bill that includes the
				charges for a treatment with respect to an individual (regardless of whether or
				not the individual is a beneficiary under this title), an itemized list of
				component charges for such treatment, including charges for drugs and medical
				equipment involved, as determined at the time of billing. With respect to each
				item included on such list, the provider of services or supplier shall include
				the price charged for the
				item.
								.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall apply to providers of services and suppliers on and after
			 January 1, 2011.
					506.Availability of
			 Medicare and Medicaid claims and patient encounter data
					(a)Public
			 availabilityNot later than 1 year after the date of enactment of
			 this Act (and annually thereafter), the Secretary of Health and Human Services
			 (in this section referred to as the Secretary), shall make
			 available to the public (including through an Internet website) data on claims
			 and patient encounters under titles XVIII and XIX of the Social Security Act
			 during the preceding calendar year. Such data shall be appropriately
			 disaggregated and patient deidentified, as determined necessary by the
			 Secretary in order to comply with the Federal regulations (concerning the
			 privacy of individually identifiable health information) promulgated under
			 section 264(c) of the Health Insurance Portability and Accountability Act of
			 1996.
					(b)Provision of data to state exchanges and
			 health insurance issuers under the state exchangeThe Secretary
			 shall submit such data directly to a State Exchange under title II and health
			 insurance issuers under such Exchange (in a form and manner determined
			 appropriate by the Secretary).
					(c)Matching of
			 dataThe Secretary shall ensure that the total amount of claims
			 under such titles during the preceding year for which data is made available
			 under subsection (a) is equal to the reported outlays from the Federal
			 government and the States under such titles during the preceding years.
					BReducing fraud and
			 abuse
				511.Requiring the
			 Secretary of Health and Human Services to change the Medicare beneficiary
			 identifier used to identify Medicare beneficiaries under the Medicare
			 program
					(a)Procedures
						(1)In
			 generalNot later than 1 year after the date of enactment of this
			 Act, in order to protect beneficiaries from identity theft, the Secretary of
			 Health and Human Services (in this section referred to as the
			 Secretary) shall establish and implement procedures to change
			 the Medicare beneficiary identifier used to identify individuals entitled to
			 benefits under part A of title XVIII of the Social Security Act or enrolled under part B of
			 such title so that such an individual’s social security account number is not
			 used. Such procedures shall provide that the new Medicare beneficiary
			 identifier includes biometric identification protections.
						(2)Maintaining
			 existing HICN structureIn order to minimize the impact of the
			 change under paragraph (1) on systems that communicate with Medicare
			 beneficiary eligibility systems, the procedures under paragraph (1) shall
			 provide that the new Medicare beneficiary identifier maintain the existing
			 Health Insurance Claim Number structure.
						(3)Protection
			 against fraudThe procedures under paragraph (1) shall provide
			 for a process for changing the Medicare beneficiary identifier for an
			 individual to a different identifier in the case of the discovery of fraud,
			 including identity theft.
						(4)Phase-in
			 authority
							(A)In
			 generalSubject to subparagraphs (B) and (C), the Secretary may
			 phase in the change under paragraph (1) in such manner as the Secretary
			 determines appropriate.
							(B)LimitThe
			 phase-in period under subparagraph (A) shall not exceed 10 years.
							(C)Newly entitled
			 and enrolled individualsThe Secretary shall ensure that the
			 change under paragraph (1) is implemented not later than January 1, 2010, with
			 respect to any individual who first becomes entitled to benefits under part A
			 of title XVIII of the Social Security Act or enrolled under part B of such
			 title on or after such date.
							(b)Education and
			 outreachThe Secretary shall establish a program of education and
			 outreach for individuals entitled to, or enrolled for, benefits under part A of
			 title XVIII of the Social Security Act
			 or enrolled under part B of such title, providers of services (as defined in
			 subsection (u) of section 1861 of such Act (42 U.S.C. 1395x)), and suppliers
			 (as defined in subsection (d) of such section) on the change under paragraph
			 (1).
					(c)Data
			 matching
						(1)Access to
			 certain informationSection 205(r) of the Social Security Act (42
			 U.S.C. 405(r)) is amended by adding at the end the following new
			 paragraph:

								(9)(A)The Commissioner of
				Social Security shall, upon the request of the Secretary—
										(i)enter into an agreement with the
				Secretary for the purpose of matching data in the system of records of the
				Commissioner with data in the system of records of the Secretary, so long as
				the requirements of subparagraphs (A) and (B) of paragraph (3) are met, in
				order to determine—
											(I)whether a beneficiary under the program
				under title XVIII, XIX, or XXI is dead, imprisoned, or otherwise not eligible
				for benefits under such program; and
											(II)whether a provider of services or a
				supplier under the program under title XVIII, XIX, or XXI is dead, imprisoned,
				or otherwise not eligible to furnish or receive payment for furnishing items
				and services under such program; and
											(ii)include in such agreement
				safeguards to assure the maintenance of the confidentiality of any information
				disclosed and procedures to permit the Secretary to use such information for
				the purpose described in clause (i).
										(B)Information provided pursuant to an
				agreement under this paragraph shall be provided at such time, in such place,
				and in such manner as the Commissioner determines appropriate.
									(C)Information provided pursuant to an
				agreement under this paragraph shall include information regarding
				whether—
										(i)the name (including the first name
				and any family name or surname), the date of birth (including the month, day,
				and year), and social security number of an individual provided to the
				Commissioner match the information contained in the Commissioner's records,
				and
										(ii)such individual is shown on the
				records of the Commissioner as being
				deceased.
										.
						(2)Investigation
			 based on certain informationTitle XI of the Social Security Act
			 (42 U.S.C. 1301 et seq.) is amended by inserting after section 1128F the
			 following new section:

								1128G.Access to
				certain data and investigation of claims involving individuals who are not
				eligible for benefits or are not eligible providers of services or
				suppliers
									(a)Data
				agreementThe Secretary shall
				enter into an agreement with the Commissioner of Social Security pursuant to
				section 205(r)(9).
									(b)Investigation of
				claims involving certain individuals who are not eligible for benefits or are
				not eligible providers of services or suppliers
										(1)In
				generalThe Secretary shall,
				in the case where a provider of services or a supplier under the program under
				title XVIII, XIX, or XXI submits a claim for payment for items or services
				furnished to an individual who the Secretary determines, as a result of
				information provided pursuant to such agreement, is not eligible for benefits
				under such program, or where the Secretary determines, as a result of such
				information, that such provider of services or supplier is not eligible to
				furnish or receive payment for furnishing such items or services, conduct an
				investigation with respect to the provider of services or supplier. If the
				Secretary determines further action is appropriate, the Secretary shall refer
				the investigation to the Inspector General of the Department of Health and
				Human Services as soon as practicable.
										(2)Assessment of
				implementation and effectiveness by the OIGThe Inspector General of the Department of
				Health and Human Services shall test the implementation of the provisions of
				this section (including the implementation of the agreement under section
				205(r)(9)) and conduct such period assessments of such implementation as the
				Inspector General determines necessary to determine the effectiveness of such
				implementation.
										.
						(d)Authorization of
			 AppropriationsThere are authorized to be appropriated such sums
			 as may be necessary to carry out this section.
					512.Use of
			 technology for real-time data reviewTitle XVIII of the Social Security Act, as
			 amended by this Act, is amended by adding at the end the following new
			 section:

						1899A.Use of technology for real-time data review
		  (a)In generalThe Secretary shall establish procedures
				for the use of technology (including front-end, pre-payment technology similar
				to that used by hedge funds, investment funds, and banks) to provide real-time
				data analysis of claims for payment under this title to identify and
				investigate unusual billing or order practices under this title that could
				indicate fraud or abuse.
							(b)Competitive biddingThe procedures established under subsection
				(a) shall ensure that the implementation of such technology is conducted
				through a competitive bidding
				process.
							.
				513.Detection of
			 medicare fraud and abuse
					(a)In
			 generalSection 1893 of the Social Security Act (42 U.S.C.
			 1395ddd) is amended—
						(1)in subsection (b),
			 by adding at the end the following new paragraph:

								(7)Implementation of
				fraud and abuse detection methods under subsection
				(i).
								;
						(2)in subsection (c),
			 by adding at the end of the flush matter following paragraph (4), the following
			 new sentence In the case of an activity described in subsection (b)(8),
			 an entity shall only be eligible to enter into a contract under the Program to
			 carry out the activity if the entity is selected through a competitive bidding
			 process in accordance with subsection (i)(3).; and
						(3)by adding at the
			 end the following new subsection:

								(i)Detection of
				medicare fraud and abuse
									(1)Establishment of
				system to identify counties most vulnerable to fraudNot later
				than 6 months after the date of enactment of this subsection, the Secretary
				shall establish a system to identify the 50 counties most vulnerable to fraud
				with respect to items and services furnished by providers of services (other
				than hospitals and critical access hospitals) and suppliers based on the degree
				of county-specific reimbursement and analysis of payment trends under this
				title. The Secretary shall designate the counties identified under the
				preceding sentence as high risk areas.
									(2)Fraud and abuse
				detection
										(A)Initial
				implementationThe Secretary shall establish procedures for the
				implementation of fraud and abuse detection methods under this title with
				respect to items and services furnished by such providers of services and
				suppliers in high risk areas designated under paragraph (1) (and, beginning not
				later than 18 months after the date of enactment of this subsection, with
				respect to items and services furnished by such providers of services and
				suppliers in areas not so designated) including the following:
											(i)Data analysis to
				establish prepayment claim edits designed to target the claims for payment
				under this title for such items and services that are most likely to be
				fraudulent.
											(ii)Prepayment
				benefit integrity reviews for claims for payment under this title for such
				items and services that are suspended as a result of such edits.
											(B)Requirement for
				participationIn no case may a provider of services or supplier
				who does not meet the requirements under subparagraph (A) participate in the
				program under this title.
										(C)Expanded
				implementationNot later than 24 months after the date of
				enactment of this subsection, the Secretary shall establish procedures for the
				implementation of such fraud and abuse detection methods under this title with
				respect to items and services furnished by all providers of services and
				suppliers, including those not in high risk areas designated under paragraph
				(1).
										(3)Competitive biddingIn selecting entities to carry out this
				subsection, the Secretary shall use a competitive bidding process.
									(4)Report to
				CongressThe Secretary shall submit to Congress an annual report
				on the effectiveness of activities conducted under this subsection, including a
				description of any savings to the program under this title as a result of such
				activities and the overall administrative cost of such activities and a
				determination as to the amount of funding needed to carry out this subsection
				for subsequent fiscal years, together with recommendations for such legislation
				and administrative action as the Secretary determines
				appropriate.
									.
						(b)Authorization of
			 appropriationsTo carry out the amendments made by this section,
			 there are authorized to be appropriated—
						(1)such sums as may
			 be necessary, not to exceed $50,000,000, for each of fiscal years 2010 through
			 2014; and
						(2)such sums as may
			 be necessary, not to exceed an amount the Secretary determines appropriate in
			 the most recent report submitted to Congress under section 1893(j)(4) of the
			 Social Security Act, as added by subsection (a), for each subsequent fiscal
			 year.
						514.Edits on
			 855S Medicare enrollment application and
			 exemption of pharmacists from surety bond requirement
					(a)Edits on
			 855S Medicare enrollment
			 applicationSection 1834(a)
			 of the Social Security Act (42 U.S.C. 1395m(a)) is amended by adding at the end
			 the following new paragraphs:

							(22)Confirmation
				with National Supplier Clearinghouse prior to payment
								(A)In
				generalNot later than 1 year after the date of enactment of this
				paragraph, the Secretary shall establish procedures to require carriers, prior
				to paying a claim for payment for durable medical equipment, prosthetics,
				orthotics, and supplies under this title, to confirm with the National Supplier
				Clearinghouse—
									(i)that the National
				Provider Identifier of the physician or practitioner prescribing or ordering
				the item or service is valid and active;
									(ii)that the Medicare
				identification number of the supplier is valid and active; and
									(iii)that the item or
				service for which the claim for payment is submitted was properly identified on
				the CMS–855S Medicare enrollment application.
									(B)Online database
				for implementationNot later than 18 months after the date of
				enactment of this paragraph, the Secretary shall establish an online database
				similar to that used for the National Provider Identifier to enable providers
				of services, accreditors, carriers, and the National Supplier Clearinghouse to
				view information on specialties and the types of items and services each
				supplier has indicated on the CMS–855S Medicare enrollment application
				submitted by the supplier.
								(C)Notification of
				claim denial and resubmissionIn the case where a claim for
				payment for durable medical equipment, prosthetics, orthotics, and supplies
				under this title is denied because the item or service furnished does not
				correctly match up with the information on file with the National Supplier
				Clearinghouse—
									(i)the National
				Supplier Clearinghouse shall—
										(I)provide the
				supplier written notification of the reason for such denial; and
										(II)allow the
				supplier 60 days to provide the National Supplier Clearinghouse with
				appropriate certification, licensing, or accreditation; and
										(ii)the Secretary
				shall waive applicable requirements relating to the time frame for the
				submission of claims for payment under this title in order to permit the
				resubmission of such claim if payment of such claim would otherwise be allowed
				under this title.
									(D)Improvements to
				Medicare enrollment applicationThe Secretary shall establish
				procedures under which a prospective supplier of durable medical equipment,
				prosthetics, orthotics, and supplies under this title shall certify, as part of
				the CMS–855S Medicare enrollment application submitted by such supplier, under
				penalty of perjury, that the information provided by the supplier on such
				application is accurate to the best of the supplier's knowledge.
								(23)Termination of
				participation for submission of fraudulent claimsIf the
				Secretary finds that a supplier of durable medical equipment, prosthetics,
				orthotics, and supplies under this title has submitted fraudulent claims for
				payment under this title, the Secretary shall terminate the suppliers
				participation under this title. Not later than 1 year after the date of
				enactment of this paragraph, the Secretary shall establish a process under
				which a supplier whose participation has been terminated under the preceding
				sentence may appeal such termination and such appeal shall be resolved not
				later than 60 days after the date on which the appeal was
				made.
							.
					(b)Exemption of
			 pharmacists from surety bond requirementSection 1834(a)(16) of
			 the Social Security Act (42 U.S.C. 1395m(a)(16)) is amended, in the second
			 sentence, by inserting and shall waive such requirement in the case of a
			 pharmacist before the period at the end.
					515.GAO study and
			 report on effectiveness of surety bond requirements for suppliers of durable
			 medical equipment in combating fraud
					(a)StudyThe
			 Comptroller General of the United States shall conduct a study on the
			 effectiveness of the surety bond requirement under section 1834(a)(16) of the
			 Social Security Act (42 U.S.C. 1395m(a)(16)) in combating fraud.
					(b)ReportNot
			 later than 1 year after the date of enactment of this Act, the Comptroller
			 General shall submit to Congress a report containing the results of the study
			 conducted under subsection (a), together with recommendations for such
			 legislation and administrative action as the Comptroller General determines
			 appropriate.
					VIEnding lawsuit
			 abuse
			601.State grants to create health court
			 solutionsPart P of title III
			 of the Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding
			 at the end the following:

					399R.State grants to create health court
				solutions
						(a)In generalThe Secretary may award grants to States
				for the development, implementation, and evaluation of alternatives to current
				tort litigation that comply with this section, for the resolution of disputes
				concerning injuries allegedly caused by health care providers or health care
				organizations.
						(b)Conditions for demonstration
				grants
							(1)ApplicationTo be eligible to receive a grant under
				this section, a State shall submit to the Secretary an application at such
				time, in such manner, and containing such information as may be required by the
				Secretary. A grant shall be awarded under this section on such terms and
				conditions as the Secretary determines appropriate.
							(2)State
				requirementsTo be eligible to receive a grant under this
				section, a State shall—
								(A)develop and
				implement an alternative to current tort litigation for resolving disputes over
				injuries allegedly caused by health care providers or health care organizations
				based on one or more of the models described in subsection (d); and
								(B)implement policies
				that provide for a reduction in health care errors through the collection and
				analysis by organizations that engage in voluntary efforts to improve patient
				safety and the quality of health care delivery, of patient safety data related
				to disputes resolved under the alternatives under subparagraph (A).
								(3)Demonstration of
				effectivenessTo be eligible to receive a grant under subsection
				(a), a State shall demonstrate how the proposed alternative to be implemented
				under paragraph (2)(A) will—
								(A)make the medical
				liability system of the State more reliable through the prompt and fair
				resolution of disputes;
								(B)encourage the
				early disclosure of health care errors;
								(C)enhance patient
				safety; and
								(D)maintain access to
				medical liability insurance.
								(4)Sources of
				compensationTo be eligible to receive a grant under subsection
				(a), a State shall identify the sources from, and methods by which,
				compensation would be paid for medical liability claims resolved under the
				proposed alternative to current tort litigation implemented under paragraph
				(2)(A). Funding methods shall, to the extent practicable, provide financial
				incentives for activities that improve patient safety.
							(5)Scope
								(A)In
				generalTo be eligible to receive a grant under subsection (a), a
				State shall utilize the proposed alternative identified under paragraph (2)(A)
				for the resolution of all types of disputes concerning injuries allegedly
				caused by health care providers or health care organizations.
								(B)Current state
				efforts to establish alternative to tort litigation
									(i)In
				generalNothing in this section shall be construed to limit the
				efforts that any State has made prior to the date of enactment of this section
				to establish any alternative to tort litigation.
									(ii)Alternative for
				practice areas or injuriesIn the case of a State that has
				established an alternative to tort litigation for a certain area of health care
				practice or a category of injuries, the alternative selected as provided for in
				this section shall supplement not replace or invalidate such established
				alternative unless the State intends otherwise.
									(6)Notification of
				patientsTo be eligible to receive a grant under subsection (a),
				the State shall demonstrate how patients will be notified when they are
				receiving health care services that fall within the scope of the alternative
				selected under this section by the State to current tort litigation.
							(c)Representation by counselA State that receives a grant under this
				section may not preclude any party to a dispute that falls within the
				jurisdiction of the alternative to current tort litigation that is implemented
				under the grant from obtaining legal representation at any point during the
				consideration of the claim under such alternative.
						(d)Models
							(1)In
				generalThe models in this section are the following:
							(2)Expert panel review and early offer
				guidelines
								(A)In generalA State may use amounts received under a
				grant under this section to develop and implement an expert panel and early
				offer review system that meets the requirements of this paragraph.
								(B)Establishment of
				panelUnder the system under
				this paragraph, the State shall establish an expert panel to review any
				disputes concerning injuries allegedly caused by health care providers or
				health care organizations according to the guidelines described in this
				paragraph.
								(C)Composition
									(i)In generalAn expert panel under this paragraph shall
				be composed of 3 medical experts (either physicians or health care
				professionals) and 3 attorneys to be appointed by the head of the State agency
				responsible for health.
									(ii)Licensure and expertiseEach physician or health care professional
				appointed to an expert panel under clause (i) shall—
										(I)be appropriately credentialed or licensed
				in the State in which the dispute takes place to deliver health care services;
				and
										(II)typically treat the condition, make the
				diagnosis, or provide the type of treatment that is under review.
										(iii)Independence
										(I)In generalSubject to subclause (II), each individual
				appointed to an expert panel under this paragraph shall—
											(aa)not have a material familial, financial, or
				professional relationship with a party involved in the dispute reviewed by the
				panel; and
											(bb)not otherwise have a conflict of interest
				with such a party.
											(II)ExceptionNothing in subclause (I) shall be construed
				to prohibit an individual who has staff privileges at an institution where the
				treatment involved in the dispute was provided from serving as a member of an
				expert panel merely on the basis of such affiliation, if the affiliation is
				disclosed to the parties and neither party objects.
										(iv)Practicing health care professional in same
				field
										(I)In generalIn a dispute before an expert panel that
				involves treatment, or the provision of items or services—
											(aa)by a physician, the medical experts on the
				expert panel shall be practicing physicians (allopathic or osteopathic) of the
				same or similar specialty as a physician who typically treats the condition,
				makes the diagnosis, or provides the type of treatment under review; or
											(bb)by a health care professional other than a
				physician, at least two medical experts on the expert panel shall be practicing
				physicians (allopathic or osteopathic) of the same or similar specialty as the
				health care professional who typically treats the condition, makes the
				diagnosis, or provides the type of treatment under review, and, if determined
				appropriate by the State agency, the third medical expert shall be a practicing
				health care professional (other than such a physician) of such a same or
				similar specialty.
											(II)Practicing definedIn this paragraph, the term
				practicing means, with respect to an individual who is a physician
				or other health care professional, that the individual provides health care
				services to individual patients on average at least 2 days a week.
										(v)Pediatric expertiseIn the case of dispute relating to a child,
				at least 1 medical expert on the expert panel shall have expertise described in
				clause (iv)(I) in pediatrics.
									(D)DeterminationAfter a review, an expert panel shall make
				a determination as to the liability of the parties involved and compensation
				based on a schedule of compensation that is developed by the panel. Such a
				schedule shall at least include—
									(i)payment for the
				net economic loss incurred by the patient, on a periodic basis, reduced by any
				payments received by the patient under—
										(I)any health or
				accident insurance;
										(II)any wage or
				salary continuation plan; or
										(III)any disability
				income insurance;
										(ii)payment for the
				non-economic damages incurred by the patient, if appropriate for the injury,
				based on a defined payment schedule developed by the State, in consultation
				with relevant experts and with the Secretary;
									(iii)reasonable
				attorney’s fees; and
									(iv)regular updates
				of the schedule under clause (ii) as necessary.
									(E)AcceptanceIf the parties to a dispute who come before
				an expert panel under this paragraph accept the determination of the expert
				panel concerning liability and compensation, such compensation shall be paid to
				the claimant and the claimant shall agree to forgo any further action against
				the health care providers or health care organizations involved.
								(F)Failure to acceptIf any party decides not to accept the
				expert panel’s determination under this paragraph, the State may choose whether
				to allow the panel to review the determination de novo, with deference, or to
				provide an opportunity for parties to reject the determination of the
				panel.
								(G)Review by State
				court after exhaustion of administrative remedies
									(i)Right to
				fileIf the State elects not to permit the expert panel under
				this paragraph to conduct its own reviews of determinations, or if the State
				elects to permit such reviews but a party is not satisfied with the final
				decision of the panel after such a review, the party shall have the right to
				file a claim relating to the injury involved in a State court of competent
				jurisdiction.
									(ii)Forfeit of
				awardsAny party filing an action in a State court under clause
				(i) shall forfeit any compensation award made under subparagraph (C).
									(iii)AdmissibilityThe
				determinations of the expert panel pursuant to a review under subparagraph (C)
				shall be admissible into evidence in any State court proceeding under this
				subparagraph.
									(3)Administrative health care
				tribunals
								(A)In generalA State may use amounts received under a
				grant under this section to develop and implement an administrative health care
				tribunal system under which the parties involved shall have the right to
				request a hearing to review any dispute concerning injuries allegedly caused by
				health care providers or health care organizations before an administrative
				health care tribunal established by the State involved.
								(B)RequirementsIn establishing an administrative health
				care tribunal under this paragraph, a State shall—
									(i)ensure that such tribunals are presided
				over by special judges with health care expertise who meet applicable State
				standards for judges and who agree to preside over such court
				voluntarily;
									(ii)provide authority to such judges to make
				binding rulings, rendered in written decisions, on standards of care,
				causation, compensation, and related issues with reliance on independent expert
				witnesses commissioned by the tribunal;
									(iii)establish a legal standard for the tribunal
				that shall be the same as the standard that would apply in the State court of
				competent jurisdiction which would otherwise handle the claim; and
									(iv)provide for an appeals process to allow for
				review of decisions by State courts.
									(C)DeterminationAfter
				a tribunal conducts a review under this paragraph, the tribunal shall make a
				determination as to the liability of the parties involved and the amount of
				compensation that should be paid based on a schedule of compensation developed
				by the tribunal. Such a schedule shall at a minimum include—
									(i)payment for the
				net economic loss incurred by the patient, on a periodic basis, reduced by any
				payments received by the patient under—
										(I)any health or
				accident insurance;
										(II)any wage or
				salary continuation plan; or
										(III)any disability
				income insurance;
										(ii)payment for the
				non-economic damages incurred by the patient, if appropriate for the injury,
				based on a defined payment schedule developed by the State in consultation with
				relevant experts and with the Secretary;
									(iii)reasonable
				attorney’s fees; and
									(iv)regular updates
				of the schedule under clause (ii) as necessary.
									(D)Review by State
				court after exhaustion of administrative remedies
									(i)Right to
				fileNothing in this paragraph shall be construed to prohibit any
				individual who is not satisfied with the determinations of a tribunal under
				this paragraph, from filing a claim for the injury involved in a State court of
				competent jurisdiction.
									(ii)Forfeit of
				awardAny party filing an action in a State court under clause
				(i) shall forfeit any compensation award made under subparagraph (C).
									(iii)AdmissibilityThe
				determinations of the tribunal under subparagraph (C) shall be admissible into
				evidence in any State court proceeding under this subparagraph.
									(4)Expert Panel
				Review and Administrative Health Care Tribunal Combination Model
								(A)In
				generalA State may use amounts received under a grant under this
				section to develop and implement an expert panel review and administrative
				health care tribunal combination system to review any dispute concerning
				injuries allegedly caused by health care providers or health care
				organizations. Under such system, a dispute concerning injuries allegedly
				caused by health care providers or health care organizations shall proceed
				through the procedures described in this subparagraph prior to the submission
				of such dispute to a State court.
								(B)General
				procedure
									(i)Establishment of
				expert panelPrior to submitting any dispute described in
				subparagraph (A) to an administrative health care tribunal under the system
				established under this paragraph, the State shall establish an expert panel (in
				accordance with subparagraph (C)) to review the allegations involved in such
				dispute.
									(ii)Referral to
				tribunalIf either party to a dispute described in clause (i)
				fails to accept the determination of the expert panel, the dispute shall then
				be referred to an administrative health care tribunal (in accordance with
				subparagraph (D).
									(C)Expert review
				panel
									(i)In
				generalThe provisions of paragraph (2) shall apply with respect
				to the establishment and operation of an expert review panel under this
				subparagraph, except that the subparagraphs (F) and (G) of such paragraph shall
				not apply.
									(ii)Failure to
				accept determination of panelIf any party to a dispute before an
				expert panel under this subparagraph refuses to accept the panel's
				determination, the dispute shall be referred to an administrative health care
				tribunal under subparagraph (D).
									(D)Administrative
				health care tribunals
									(i)In
				generalUpon the failure of any party to accept the determination
				of an expert panel under subparagraph (C), the parties shall request a hearing
				concerning the liability or compensation involved by an administrative health
				care tribunal established by the State involved under this subparagraph.
									(ii)RequirementsThe
				provisions of paragraph (3) shall apply with respect to the establishment and
				operation of an administrative health care tribunal under this
				subparagraph.
									(iii)Forfeit of
				awardsAny party proceeding to the second step-administrative
				health care tribunal-under this model shall forfeit any compensation awarded by
				the expert panel.
									(iv)AdmissibilityThe
				determinations of the expert panel under subparagraph (C) shall be admissible
				into evidence in any administrative health care tribunal proceeding under this
				subparagraph.
									(E)Right to
				fileNothing in this paragraph shall be construed to prohibit any
				individual who is not satisfied with the determination of the tribunal (after
				having proceeded through both the expert panel under subparagraph (C) and the
				tribunal under subparagraph (D)) from filing a claim for the injury involved in
				a State court of competent jurisdiction.
								(F)AdmissibilityThe
				determinations of both the expert panel and the tribunal under this paragraph
				shall be admissible into evidence in any State court proceeding under this
				paragraph.
								(G)Forfeit of
				awardsAny party filing an action in State court under
				subparagraph (E) shall forfeit any compensation award made by both the expert
				panel and the administrative health care tribunal under this paragraph.
								(e)DefinitionsIn this section:
							(1)Current tort
				litigationThe term current tort litigation means
				the tort litigation system existing in the State on the date on which the State
				submits an application under subsection (b)(1), for the resolution of disputes
				concerning injuries allegedly caused by health care providers or health care
				organizations.
							(2)Health care
				organizationThe term health care organization means
				any individual or entity that is obligated to provide, pay for, or administer
				health benefits under any health plan.
							(3)Net economic
				lossThe term net economic loss means—
								(A)reasonable
				expenses incurred for products, services and accommodations needed for health
				care, training and other remedial treatment and care of an injured
				individual;
								(B)reasonable and
				appropriate expenses for rehabilitation treatment and occupational
				training;
								(C)100 percent of the
				loss of income from work that an injured individual would have performed if not
				injured, reduced by any income from substitute work actually performed;
				and
								(D)reasonable
				expenses incurred in obtaining ordinary and necessary services to replace
				services an injured individual would have performed for the benefit of the
				individual or the family of such individual if the individual had not been
				injured.
								(4)Non-economic
				damagesThe term non-economic damages means losses
				for physical and emotional pain, suffering, inconvenience, physical impairment,
				mental anguish, disfigurement, loss of enjoyment of life, loss of society and
				companionship, loss of consortium (other than loss of domestic service), injury
				to reputation, and all other non-pecuniary losses of any kind or nature, to the
				extent permitted under State law.
							(f)Funding
							(1)One-time increase in Medicaid
				paymentIn the case of a
				State awarded a grant to carry out this section, the total amount of the
				Federal payment determined for the State under section 1913 of the Social
				Security Act (as amended by section 401) for fiscal year 2011 (in addition to
				the any increase applicable for that fiscal year under section 203(b) but
				determined without regard to any such increase) shall be increased by an amount
				equal to 1 percent of the total amount of payments made to the State for fiscal
				year 2010 under section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a))
				for purposes of carrying out a grant awarded under this section. Amounts paid
				to a State pursuant to this subsection shall remain available until
				expended.
							(2)Authorization of
				appropriationsThere are
				authorized to be appropriated for any fiscal year such sums as may be necessary
				for purposes of making payments to States pursuant to paragraph
				(1).
							.
			VIIPromoting health information
			 technology
			AAssisting the development of health
			 information technology
				701.PurposeIt is the purpose of this subtitle to
			 promote the utilization of health record banking by improving the coordination
			 of health information through an infrastructure for the secure and authorized
			 exchange and use of healthcare information.
				702.Health record banking
					(a)EstablishmentNot later than 1 year after the date of
			 enactment of this Act, the Secretary of Health and Human Services shall
			 promulgate regulations to provide for the certification and auditing of the
			 banking of electronic medical records.
					(b)General
			 rightsAn individual who has
			 a health record contained in a health record bank shall maintain ownership over
			 the health record and shall have the right to review the contents of the
			 record.
					703.Application of Federal and State security
			 and confidentiality standards
					(a)In generalCurrent Federal security and
			 confidentiality standards and State security and confidentiality laws shall
			 apply to this subtitle until such time as Congress acts to amend such
			 standards.
					(b)DefinitionsIn this section:
						(1)Current Federal security and
			 confidentiality standardsThe
			 term current Federal security and confidentiality standards means
			 the Federal privacy standards established pursuant to section 264(c) of the
			 Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2
			 note) and security standards established under section 1173(d) of the Social
			 Security Act (42 U.S.C. 1320d–2(d)).
						(2)State security and confidentiality
			 lawsThe term State
			 security and confidentiality laws means State laws and regulations
			 relating to the privacy and confidentiality of individually identifiable health
			 information or to the security of such information.
						(3)StateThe term State has the meaning
			 given such term for purposes of title XI of the Social Security Act, as
			 provided under section 1101(a) of such Act (42 U.S.C. 1301(a)).
						BRemoving barriers to the use of health
			 information technology to better coordinate health care
				711.Safe harbors to antikickback civil
			 penalties and criminal penalties for provision of health information technology
			 and training services
					(a)For civil penaltiesSection 1128A of the
			 Social Security Act (42 U.S.C.
			 1320a–7a) is amended—
						(1)in subsection (b), by adding at the end the
			 following new paragraph:

								(4)For purposes of this subsection,
				inducements to reduce or limit services described in paragraph (1) shall not
				include the practical or other advantages resulting from health information
				technology or related installation, maintenance, support, or training
				services.
								;
				and
						(2)in subsection (i), by adding at the end the
			 following new paragraph:

								(8)The term health information
				technology means hardware, software, license, right, intellectual
				property, equipment, or other information technology (including new versions,
				upgrades, and connectivity) designed or provided primarily for the electronic
				creation, maintenance, or exchange of health information to better coordinate
				care or improve health care quality, efficiency, or
				research.
								.
						(b)For Criminal PenaltiesSection 1128B of such Act (42 U.S.C.
			 1320a–7b) is amended—
						(1)in subsection (b)(3)—
							(A)in subparagraph (G), by striking
			 and at the end;
							(B)in the subparagraph (H) added by section
			 237(d) of the Medicare Prescription Drug, Improvement, and Modernization Act of
			 2003 (Public Law 108–173; 117 Stat. 2213)—
								(i)by moving such subparagraph 2 ems to the
			 left; and
								(ii)by striking the period at the end and
			 inserting a semicolon;
								(C)in the subparagraph (H) added by section
			 431(a) of such Act (117 Stat. 2287)—
								(i)by redesignating such subparagraph as
			 subparagraph (I);
								(ii)by moving such subparagraph 2 ems to the
			 left; and
								(iii)by striking the period at the end and
			 inserting ; and; and
								(D)by adding at the end the following new
			 subparagraph:

									(J)any nonmonetary remuneration (in the form
				of health information technology, as defined in section 1128A(i)(8), or related
				installation, maintenance, support or training services) made to a person by a
				specified entity (as defined in subsection (g)) if—
										(i)the provision of such remuneration is
				without an agreement between the parties or legal condition that—
											(I)limits or restricts the use of the health
				information technology to services provided by the physician to individuals
				receiving services at the specified entity;
											(II)limits or restricts the use of the health
				information technology in conjunction with other health information technology;
				or
											(III)conditions the provision of such
				remuneration on the referral of patients or business to the specified
				entity;
											(ii)such remuneration is arranged for in a
				written agreement that is signed by the parties involved (or their
				representatives) and that specifies the remuneration solicited or received (or
				offered or paid) and states that the provision of such remuneration is made for
				the primary purpose of better coordination of care or improvement of health
				quality, efficiency, or research; and
										(iii)the specified entity providing the
				remuneration (or a representative of such entity) has not taken any action to
				disable any basic feature of any hardware or software component of such
				remuneration that would permit
				interoperability.
										;
				and
							(2)by adding at the end the following new
			 subsection:

								(g)Specified Entity DefinedFor purposes of subsection (b)(3)(J), the
				term specified entity means an entity that is a hospital, group
				practice, prescription drug plan sponsor, a Medicare Advantage organization, or
				any other such entity specified by the Secretary, considering the goals and
				objectives of this section, as well as the goals to better coordinate the
				delivery of health care and to promote the adoption and use of health
				information
				technology.
								.
						(c)Effective Date and Effect on State
			 Laws
						(1)Effective
			 dateThe amendments made by
			 subsections (a) and (b) shall take effect on the date that is 120 days after
			 the date of the enactment of this Act.
						(2)Preemption of state lawsNo State (as defined in section 1101(a) of
			 the Social Security Act (42 U.S.C.
			 1301(a)) for purposes of title XI of such Act) shall have in effect a State law
			 that imposes a criminal or civil penalty for a transaction described in section
			 1128A(b)(4) or section 1128B(b)(3)(J) of such Act, as added by subsections
			 (a)(1) and (b), respectively, if the conditions described in the respective
			 provision, with respect to such transaction, are met.
						(d)Study and Report To Assess Effect of Safe
			 Harbors on Health System
						(1)In generalThe Secretary of Health and Human Services
			 shall conduct a study to determine the impact of each of the safe harbors
			 described in paragraph (3). In particular, the study shall examine the
			 following:
							(A)The effectiveness of each safe harbor in
			 increasing the adoption of health information technology.
							(B)The types of health information technology
			 provided under each safe harbor.
							(C)The extent to which the financial or other
			 business relationships between providers under each safe harbor have changed as
			 a result of the safe harbor in a way that adversely affects or benefits the
			 health care system or choices available to consumers.
							(D)The impact of the adoption of health
			 information technology on health care quality, cost, and access under each safe
			 harbor.
							(2)ReportNot later than 3 years after the effective
			 date described in subsection (c)(1), the Secretary of Health and Human Services
			 shall submit to Congress a report on the study under paragraph (1).
						(3)Safe harbors describedFor purposes of paragraphs (1) and (2), the
			 safe harbors described in this paragraph are—
							(A)the safe harbor under section 1128A(b)(4)
			 of such Act (42 U.S.C. 1320a–7a(b)(4)), as added by subsection (a)(1);
			 and
							(B)the safe harbor under section
			 1128B(b)(3)(J) of such Act (42 U.S.C. 1320a–7b(b)(3)(J)), as added by
			 subsection (b).
							712.Exception to limitation on certain
			 physician referrals (under Stark) for provision of health information
			 technology and training services to health care professionals
					(a)In GeneralSection 1877(b) of the
			 Social Security Act (42 U.S.C.
			 1395nn(b)) is amended by adding at the end the following new paragraph:

							(6)Information technology and training
				services
								(A)In generalAny nonmonetary remuneration (in the form
				of health information technology or related installation, maintenance, support
				or training services) made by a specified entity to a physician if—
									(i)the provision of such remuneration is
				without an agreement between the parties or legal condition that—
										(I)limits or restricts the use of the health
				information technology to services provided by the physician to individuals
				receiving services at the specified entity;
										(II)limits or restricts the use of the health
				information technology in conjunction with other health information technology;
				or
										(III)conditions the provision of such
				remuneration on the referral of patients or business to the specified
				entity;
										(ii)such remuneration is arranged for in a
				written agreement that is signed by the parties involved (or their
				representatives) and that specifies the remuneration made and states that the
				provision of such remuneration is made for the primary purpose of better
				coordination of care or improvement of health quality, efficiency, or research;
				and
									(iii)the specified entity (or a representative
				of such entity) has not taken any action to disable any basic feature of any
				hardware or software component of such remuneration that would permit
				interoperability.
									(B)Health information technology
				definedFor purposes of this
				paragraph, the term health information technology means hardware,
				software, license, right, intellectual property, equipment, or other
				information technology (including new versions, upgrades, and connectivity)
				designed or provided primarily for the electronic creation, maintenance, or
				exchange of health information to better coordinate care or improve health care
				quality, efficiency, or research.
								(C)Specified entity definedFor purposes of this paragraph, the term
				specified entity means an entity that is a hospital, group
				practice, prescription drug plan sponsor, a Medicare Advantage organization, or
				any other such entity specified by the Secretary, considering the goals and
				objectives of this section, as well as the goals to better coordinate the
				delivery of health care and to promote the adoption and use of health
				information
				technology.
								.
					(b)Effective Date; Effect on State
			 Laws
						(1)Effective
			 dateThe amendment made by
			 subsection (a) shall take effect on the date that is 120 days after the date of
			 the enactment of this Act.
						(2)Preemption of state lawsNo State (as defined in section 1101(a) of
			 the Social Security Act (42 U.S.C.
			 1301(a)) for purposes of title XI of such Act) shall have in effect a State law
			 that imposes a criminal or civil penalty for a transaction described in section
			 1877(b)(6) of such Act, as added by subsection (a), if the conditions described
			 in such section, with respect to such transaction, are met.
						(c)Study and Report To Assess Effect of
			 Exception on Health System
						(1)In generalThe Secretary of Health and Human Services
			 shall conduct a study to determine the impact of the exception under section
			 1877(b)(6) of such Act (42 U.S.C. 1395nn(b)(6)), as added by subsection (a). In
			 particular, the study shall examine the following:
							(A)The effectiveness of the exception in
			 increasing the adoption of health information technology.
							(B)The types of health information technology
			 provided under the exception.
							(C)The extent to which the financial or other
			 business relationships between providers under the exception have changed as a
			 result of the exception in a way that adversely affects or benefits the health
			 care system or choices available to consumers.
							(D)The impact of the adoption of health
			 information technology on health care quality, cost, and access under the
			 exception.
							(2)ReportNot later than 3 years after the effective
			 date described in subsection (b)(1), the Secretary of Health and Human Services
			 shall submit to Congress a report on the study under paragraph (1).
						713.Rules of construction regarding use of
			 consortia
					(a)Application to Safe Harbor From Criminal
			 PenaltiesSection 1128B(b)(3)
			 of the Social Security Act (42 U.S.C.
			 1320a–7b(b)(3)) is amended by adding after and below subparagraph (J), as added
			 by section 711(b)(1), the following: For purposes of subparagraph (J),
			 nothing in such subparagraph shall be construed as preventing a specified
			 entity, consistent with the specific requirements of such subparagraph, from
			 forming a consortium composed of health care providers, payers, employers, and
			 other interested entities to collectively purchase and donate health
			 information technology, or from offering health care providers a choice of
			 health information technology products in order to take into account the
			 varying needs of such providers receiving such products..
					(b)Application to Stark
			 ExceptionParagraph (6) of
			 section 1877(b) of the Social Security
			 Act (42 U.S.C. 1395nn(b)), as added by section 712(a), is amended by
			 adding at the end the following new subparagraph:

							(D)Rule of constructionFor purposes of subparagraph (A), nothing
				in such subparagraph shall be construed as preventing a specified entity,
				consistent with the specific requirements of such subparagraph, from—
								(i)forming a consortium composed of health
				care providers, payers, employers, and other interested entities to
				collectively purchase and donate health information technology; or
								(ii)offering health care providers a choice of
				health information technology products in order to take into account the
				varying needs of such providers receiving such
				products.
								.
					VIIIHealth Care
			 Services Commission
			AEstablishment and
			 general duties
				801.Establishment
					(a)In
			 generalThere is hereby established a Health Care Services
			 Commission (in this title, referred to as the Commission) to be
			 composed of 5 commissioners (in this title referred to as the
			 Commissioners) to be appointed by the President by and with the
			 advice and consent of the Senate. Not more than 3 of such Commissioners shall
			 be members of the same political party, and in making appointments members of
			 different political parties shall be appointed alternately as nearly as may be
			 practicable. No Commissioner shall engage in any other business, vocation, or
			 employment than that of serving as Commissioner. Each Commissioner shall hold
			 office for a term of 5 years and until a successor is appointed and has
			 qualified, except that—
						(1)such Commissioner
			 shall not so continue to serve beyond the expiration of the next session of
			 Congress subsequent to the expiration of said fixed term of office;
						(2)any Commissioner
			 appointed to fill a vacancy occurring prior to the expiration of the term for
			 which a predecessor was appointed shall be appointed for the remainder of such
			 term; and
						(3)the terms of
			 office of the Commissioners first taking office after the date of the enactment
			 of this Act shall expire as designated by the President at the time of
			 nomination, 1 at the end of 1 year, 1 at the end of 2 years, 1 at the end of 3
			 years, 1 at the end of 4 years, and 1 at the end of 5 years, after the date of
			 the enactment of this Act.
						(b)PurposeThe
			 purpose of the Commission is to enhance the quality, appropriateness, and
			 effectiveness of health care services, and access to such services, through the
			 establishment of a broad base of scientific research and through the promotion
			 of improvements in clinical practice and in the organization, financing, and
			 delivery of health care services.
					(c)Appointment of
			 chairmanThe President shall,
			 from among the Commissioners appointed under subsection (a), designate an
			 individual to serve as the Chairman of the Commission.
					802.General
			 authorities and duties
					(a)In
			 generalIn carrying out section 801(b), the Commissioners shall
			 conduct and support research, demonstration projects, evaluations, training,
			 guideline development, and the dissemination of information, on health care
			 services and on systems for the delivery of such services, including activities
			 with respect to—
						(1)the effectiveness,
			 efficiency, and quality of health care services;
						(2)the outcomes of
			 health care services and procedures;
						(3)clinical practice,
			 including primary care and practice-oriented research;
						(4)health care
			 technologies, facilities, and equipment;
						(5)health care costs,
			 productivity, and market forces;
						(6)health promotion
			 and disease prevention;
						(7)health statistics
			 and epidemiology; and
						(8)medical
			 liability.
						(b)Requirements
			 with respect to rural areas and underserved populationsIn
			 carrying out subsection (a), the Commissioners shall undertake and support
			 research, demonstration projects, and evaluations with respect to—
						(1)the delivery of
			 health care services in rural areas (including frontier areas); and
						(2)the health of
			 low-income groups, minority groups, and the elderly.
						803.Dissemination
					(a)In
			 generalThe Commissioners shall—
						(1)promptly publish,
			 make available, and otherwise disseminate, in a form understandable and on as
			 broad a basis as practicable so as to maximize its use, the results of
			 research, demonstration projects, and evaluations conducted or supported under
			 this title and the guidelines, standards, and review criteria developed under
			 this title;
						(2)promptly make
			 available to the public data developed in such research, demonstration
			 projects, and evaluations; and
						(3)as appropriate,
			 provide technical assistance to State and local government and health agencies
			 and conduct liaison activities to such agencies to foster dissemination.
						(b)Prohibition
			 against restrictionsExcept as provided in subsection (c), the
			 Commissioners may not restrict the publication or dissemination of data from,
			 or the results of, projects conducted or supported under this title.
					(c)Limitation on
			 use of certain informationNo information, if an establishment or
			 person supplying the information or described in it is identifiable, obtained
			 in the course of activities undertaken or supported under this title may be
			 used for any purpose other than the purpose for which it was supplied unless
			 such establishment or person has consented (as determined under regulations of
			 the Secretary) to its use for such other purpose. Such information may not be
			 published or released in other form if the person who supplied the information
			 or who is described in it is identifiable unless such person has consented (as
			 determined under regulations of the Secretary) to its publication or release in
			 other form.
					(d)Certain
			 interagency agreementThe Commissioners and the Director of the
			 National Library of Medicine shall enter into an agreement providing for the
			 implementation of subsection (a)(1).
					BForum for quality
			 and effectiveness in health care
				811.Establishment of
			 officeThere is established
			 within the Commission an office to be known as the Office of the Forum for
			 Quality and Effectiveness in Health Care. The office shall be headed by a
			 director (referred to in this title as the Director) who shall
			 be appointed by the Commissioners.
				812.Membership
					(a)In
			 generalThe Office of the
			 Forum for Quality and Effectiveness in Health Care shall be composed of 15
			 individuals nominated by private sector health care organizations and appointed
			 by the Commission and shall include representation from at least the
			 following:
						(1)Health insurance
			 industry.
						(2)Health care
			 provider groups.
						(3)Non-profit
			 organizations.
						(4)Rural health
			 organizations.
						(b)Terms
						(1)In
			 generalExcept as provided in
			 paragraph (2), members of the Office of the Forum for Quality and Effectiveness
			 in Health Care shall serve for a term of 5 years.
						(2)Staggered
			 rotationOf the members first
			 appointed to the Office of the Forum for Quality and Effectiveness in Health
			 Care, the Commission shall appoint 5 members to serve for a term of 2 years, 5
			 members to serve for a term of 3 years, and 5 members to serve for a term of 4
			 years.
						(c)Treatment of
			 other employmentEach member
			 of the Office of the Forum for Quality and Effectiveness in Health Care shall
			 serve the Office independently from any other position of employment.
					813.Duties
					(a)Establishment of
			 forum programThe Commissioners, acting through the Director,
			 shall establish a program to be known as the Forum for Quality and
			 Effectiveness in Health Care. For the purpose of promoting transparency in
			 price, quality, appropriateness, and effectiveness of health care, the
			 Director, using the process set forth in section 814, shall arrange for the
			 development and periodic review and updating of standards of quality,
			 performance measures, and medical review criteria through which health care
			 providers and other appropriate entities may assess or review the provision of
			 health care and assure the quality of such care.
					(b)Certain
			 requirementsGuidelines, standards, performance measures, and
			 review criteria under subsection (a) shall—
						(1)be based on the
			 best available research and professional judgment regarding the effectiveness
			 and appropriateness of health care services and procedures; and
						(2)be presented in
			 formats appropriate for use by physicians, health care practitioners,
			 providers, medical educators, and medical review organizations and in formats
			 appropriate for use by consumers of health care.
						(c)Authority for
			 contractsIn carrying out this subtitle, the Director may enter
			 into contracts with public or nonprofit private entities.
					(d)Public
			 disclosure of recommendationsFor each fiscal year beginning with 2010,
			 the Director shall make publicly available the following:
						(1)Quarterly reports
			 for public comment that include proposed recommendations for guidelines,
			 standards, performance measures, and review criteria under subsection (a) and
			 any updates to such guidelines, standards, performance measures, and review
			 criteria.
						(2)After
			 consideration of such comments, a final report that contains final
			 recommendations for such guidelines, standards, performance measures, review
			 criteria, and updates.
						(e)Date certain for
			 initial guidelines and standardsThe Commissioners, by not later
			 than January 1, 2012, shall assure the development of an initial set of
			 guidelines, standards, performance measures, and review criteria under
			 subsection (a).
					814.Adoption and
			 enforcement of guidelines and standards
					(a)Adoption of
			 recommendations of Forum for Quality and Effectiveness in Health
			 CareFor each fiscal year,
			 the Commissioners shall adopt the recommendations made for such year in the
			 final report under subsection (d)(2) of section 813 for guidelines, standards,
			 performance measures, and review criteria described in subsection (a) of such
			 section.
					(b)Enforcement
			 authorityThe Commissioners, in consultation with the Secretary
			 of Health and Human Services, have the authority to make recommendations to the
			 Secretary to enforce compliance of health care providers with the guidelines,
			 standards, performance measures, and review criteria adopted under subsection
			 (a). Such recommendations may include the following, with respect to a health
			 care provider who is not in compliance with such guidelines, standards,
			 measures, and criteria:
						(1)Exclusion from participation in Federal
			 health care programs (as defined in section 1128B(f) of the Social Security Act
			 (42 U.S.C. 1320a–7b(f))).
						(2)Imposition of a
			 civil money penalty on such provider.
						815.Additional
			 requirements
					(a)Program
			 agendaThe Commissioners
			 shall provide for an agenda for the development of the guidelines, standards,
			 performance measures, and review criteria described in section 813(a),
			 including with respect to the standards, performance measures, and review
			 criteria, identifying specific aspects of health care for which the standards,
			 performance measures, and review criteria are to be developed and those that
			 are to be given priority in the development of the standards, performance
			 measures, and review criteria.
					CGeneral
			 provisions
				821.Certain
			 administrative authoritiesThe
			 Commissioners, in carrying out this title, may accept voluntary and
			 uncompensated services.
				822.FundingFor the purpose of carrying out this title,
			 there are authorized to be appropriated such sums as may be necessary for
			 fiscal years 2010 through 2014.
				823.DefinitionsFor purposes of this title:
					(1)The term
			 Commissioners means the Commissioners of the Health Care Services
			 Commission.
					(2)The term
			 Commission means the Health Care Services Commission.
					(3)The term
			 Director means the Director of the Office of the Forum for Quality
			 and Effectiveness in Health Care.
					(4)The term
			 Secretary means the Secretary of Health and Human Services.
					DTerminations and
			 transition
				831.Termination of
			 Agency for Healthcare Research and QualityAs of the date of the enactment of this Act,
			 the Agency for Healthcare Research and Quality is terminated, and title IX of
			 the Public Health Service Act is repealed.
				832.TransitionAll orders, grants, contracts, privileges,
			 and other determinations or actions of the Agency for Healthcare Research and
			 Quality that are effective as of the date before the date of the enactment of
			 this Act, shall be transferred to the Secretary and shall continue in effect
			 according to their terms unless changed pursuant to law.
				EIndependent Health
			 Record Trust
				841.Short
			 titleThis subtitle may be
			 cited as the Independent Health Record
			 Trust Act of 2009.
				842.PurposeIt is the purpose of this subtitle to
			 provide for the establishment of a nationwide health information technology
			 network that—
					(1)improves health
			 care quality, reduces medical errors, increases the efficiency of care, and
			 advances the delivery of appropriate, evidence-based health care
			 services;
					(2)promotes wellness,
			 disease prevention, and the management of chronic illnesses by increasing the
			 availability and transparency of information related to the health care needs
			 of an individual;
					(3)ensures that
			 appropriate information necessary to make medical decisions is available in a
			 usable form at the time and in the location that the medical service involved
			 is provided;
					(4)produces greater
			 value for health care expenditures by reducing health care costs that result
			 from inefficiency, medical errors, inappropriate care, and incomplete
			 information;
					(5)promotes a more
			 effective marketplace, greater competition, greater systems analysis, increased
			 choice, enhanced quality, and improved outcomes in health care services;
					(6)improves the
			 coordination of information and the provision of such services through an
			 effective infrastructure for the secure and authorized exchange and use of
			 health information; and
					(7)ensures that the health information
			 privacy, security, and confidentiality of individually identifiable health
			 information is protected.
					843.DefinitionsIn this subtitle:
					(1)AccessThe
			 term access means, with respect to an electronic health record,
			 entering information into such account as well as retrieving information from
			 such account.
					(2)AccountThe
			 term account means an electronic health record of an individual
			 contained in an independent health record trust.
					(3)Affirmative
			 consentThe term affirmative consent means, with
			 respect to an electronic health record of an individual contained in an IHRT,
			 express consent given by the individual for the use of such record in response
			 to a clear and conspicuous request for such consent or at the individual’s own
			 initiative.
					(4)Authorized EHR
			 data userThe term
			 authorized EHR data user means, with respect to an electronic
			 health record of an IHRT participant contained as part of an IHRT, any entity
			 (other than the participant) authorized (in the form of affirmative consent) by
			 the participant to access the electronic health record.
					(5)ConfidentialityThe term confidentiality
			 means, with respect to individually identifiable health information of an
			 individual, the obligation of those who receive such information to respect the
			 health information privacy of the individual.
					(6)Electronic
			 health recordThe term electronic health record
			 means a longitudinal collection of information concerning a single individual,
			 including medical records and personal health information, that is stored
			 electronically.
					(7)Health
			 information privacyThe term
			 health information privacy means, with respect to individually
			 identifiable health information of an individual, the right of such individual
			 to control the acquisition, uses, or disclosures of such information.
					(8)Health
			 planThe term health
			 plan means a group health plan (as defined in section 2208(1) of the
			 Public Health Service Act (42 U.S.C. 300bb–8(1))) as well as a plan that offers
			 health insurance coverage in the individual market.
					(9)HIPAA privacy
			 regulationsThe term HIPAA privacy regulations means
			 the regulations promulgated under section 264(c) of the Health Insurance
			 Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note).
					(10)Independent
			 health record trust; IHRTThe terms independent health
			 record trust and IHRT mean a legal arrangement under the
			 administration of an IHRT operator that meets the requirements of this subtitle
			 with respect to electronic health records of individuals participating in the
			 trust or IHRT.
					(11)IHRT
			 operatorThe term IHRT operator means, with respect
			 to an IHRT, the organization that is responsible for the administration and
			 operation of the IHRT in accordance with this subtitle.
					(12)IHRT
			 participantThe term IHRT participant means, with
			 respect to an IHRT, an individual who has a participation agreement in effect
			 with respect to the maintenance of the individual’s electronic health record by
			 the IHRT.
					(13)Individually
			 identifiable health informationThe term individually
			 identifiable health information has the meaning given such term in
			 section 1171(6) of the Social Security Act (42 U.S.C. 1320d(6)).
					(14)SecurityThe
			 term security means, with respect to individually identifiable
			 health information of an individual, the physical, technological, or
			 administrative safeguards or tools used to protect such information from
			 unwarranted access or disclosure.
					844.Establishment,
			 certification, and membership of Independent Health Record Trusts
					(a)EstablishmentNot
			 later than one year after the date of the enactment of this Act, the Federal
			 Trade Commission, in consultation with the National Committee on Vital and
			 Health Statistics, shall prescribe standards for the establishment,
			 certification, operation, and interoperability of IHRTs to carry out the
			 purposes described in section 842 in accordance with the provisions of this
			 subtitle.
					(b)Certification
						(1)Certification by
			 FTCThe Federal Trade
			 Commission shall provide for the certification of IHRTs. No IHRT may be
			 certified unless the IHRT is determined to meet the standards for certification
			 established under subsection (a).
						(2)DecertificationThe
			 Federal Trade Commission shall establish a process for the revocation of
			 certification of an IHRT under this section in the case that the IHRT violates
			 the standards established under subsection (a).
						(c)Membership
						(1)In
			 generalTo be eligible to be a participant in an IHRT, an
			 individual shall—
							(A)submit to the IHRT
			 information as required by the IHRT to establish an electronic health record
			 with the IHRT; and
							(B)enter into a
			 privacy protection agreement described in section 846(b)(1) with the
			 IHRT.
							The process
			 to determine eligibility of an individual under this subsection shall allow for
			 the establishment by such individual of an electronic health record as
			 expeditiously as possible if such individual is determined so eligible.(2)No limitation on
			 membershipNothing in this subsection shall be construed to
			 permit an IHRT to restrict membership, including on the basis of health
			 condition.
						845.Duties of IHRT
			 to IHRT participants
					(a)Fiduciary duty
			 of IHRT; penalties for violations of fiduciary duty
						(1)Fiduciary
			 dutyWith respect to the
			 electronic health record of an IHRT participant maintained by an IHRT, the IHRT
			 shall have a fiduciary duty to act for the benefit and in the interests of such
			 participant and of the IHRT as a whole. Such duty shall include obtaining the
			 affirmative consent of such participant prior to the release of information in
			 such participant’s electronic health record in accordance with the requirements
			 of this subtitle.
						(2)PenaltiesIf the IHRT knowingly or recklessly
			 breaches the fiduciary duty described in paragraph (1), the IHRT shall be
			 subject to the following penalties:
							(A)Loss of
			 certification of the IHRT.
							(B)A fine that is not
			 in excess of $50,000.
							(C)A term of
			 imprisonment for the individuals involved of not more than 5 years.
							(b)Electronic
			 health record deemed To be held in trust by IHRTWith respect to
			 an individual, an electronic health record maintained by an IHRT shall be
			 deemed to be held in trust by the IHRT for the benefit of the individual and
			 the IHRT shall have no legal or equitable interest in such electronic health
			 record.
					846.Availability
			 and use of information from records in IHRT consistent with privacy protections
			 and agreements
					(a)Protected
			 electronic health records use and access
						(1)General rights
			 regarding uses of information
							(A)In
			 generalWith respect to the electronic health record of an IHRT
			 participant maintained by an IHRT, subject to paragraph (2)(C), primary uses
			 and secondary uses (described in subparagraphs (B) and (C), respectively) of
			 information within such record (other than by such participant) shall be
			 permitted only upon the authorization of such use, prior to such use, by such
			 participant.
							(B)Primary
			 usesFor purposes of subparagraph (A) and with respect to an
			 electronic health record of an individual, a primary use is a use for purposes
			 of the individual’s self-care or care by health care professionals.
							(C)Secondary
			 usesFor purposes of
			 subparagraph (B) and with respect to an electronic health record of an
			 individual, a secondary use is any use not described in subparagraph (B) and
			 includes a use for purposes of public health research or other related
			 activities. Additional authorization is required for a secondary use extending
			 beyond the original purpose of the secondary use authorized by the IHRT
			 participant involved. Nothing in this paragraph shall be construed as requiring
			 authorization for every secondary use that is within the authorized original
			 purpose.
							(2)Rules for
			 primary use of records for health care purposesWith respect to
			 the electronic health record of an IHRT participant (or specified parts of such
			 electronic health record) maintained by an IHRT standards for access to such
			 record shall provide for the following:
							(A)Access by IHRT
			 participants to their electronic health records
								(i)OwnershipThe
			 participant maintains ownership over the entire electronic health record (and
			 all portions of such record) and shall have the right to electronically access
			 and review the contents of the entire record (and any portion of such record)
			 at any time, in accordance with this subparagraph.
								(ii)Addition of
			 personal informationThe
			 participant may add personal health information to the health record of that
			 participant, except that such participant shall not alter information that is
			 entered into the electronic health record by any authorized EHR data user. Such
			 participant shall have the right to propose an amendment to information that is
			 entered by an authorized EHR data user pursuant to standards prescribed by the
			 Federal Trade Commission for purposes of amending such information.
								(iii)Identification
			 of information entered by participantAny additions or amendments made by the
			 participant to the health record shall be identified and disclosed within such
			 record as being made by such participant.
								(B)Access by
			 entities other than IHRT participant
								(i)Authorized
			 access onlyExcept as provided under subparagraph (C) and
			 paragraph (4), access to the electronic health record (or any portion of the
			 record)—
									(I)may be made only
			 by authorized EHR data users and only to such portions of the record as
			 specified by the participant; and
									(II)may be limited by
			 the participant for purposes of entering information into such record,
			 retrieving information from such record, or both.
									(ii)Identification
			 of entity that enters informationAny information that is added
			 by an authorized EHR data user to the health record shall be identified and
			 disclosed within such record as being made by such user.
								(iii)Satisfaction
			 of HIPAA privacy regulationsIn the case of a record of a covered entity
			 (as defined for purposes of HIPAA privacy regulations), with respect to an
			 individual, if such individual is an IHRT participant with an independent
			 health record trust and such covered entity is an authorized EHR data user, the
			 requirement under the HIPAA privacy regulations for such entity to provide the
			 record to the participant shall be deemed met if such entity, without charge to
			 the IHRT or the participant—
									(I)forwards to the
			 trust an appropriately formatted electronic copy of the record (and updates to
			 such records) for inclusion in the electronic health record of the participant
			 maintained by the trust;
									(II)enters such
			 record into the electronic health record of the participant so maintained;
			 or
									(III)otherwise makes
			 such record available for electronic access by the IHRT or the individual in a
			 manner that permits such record to be included in the account of the individual
			 contained in the IHRT.
									(iv)Notification of
			 sensitive informationAny information, with respect to the
			 participant, that is sensitive information, as specified by the Federal Trade
			 Commission, shall not be forwarded or entered by an authorized EHR data user
			 into the electronic health record of the participant maintained by the trust
			 unless the user certifies that the participant has been notified of such
			 information.
								(C)Deemed
			 authorization for access for emergency health care
								(i)FindingsCongress
			 finds that—
									(I)given the size and
			 nature of visits to emergency departments in the United States, readily
			 available health information could make the difference between life and death;
			 and
									(II)because of the
			 case mix and volume of patients treated, emergency departments are well
			 positioned to provide information for public health surveillance, community
			 risk assessment, research, education, training, quality improvement, and other
			 uses.
									(ii)Use of
			 informationWith respect to the electronic health record of an
			 IHRT participant (or specified parts of such electronic health record)
			 maintained by an IHRT, the participant shall be deemed as providing
			 authorization (in the form of affirmative consent) for health care providers to
			 access, in connection with providing emergency care services to the
			 participant, a limited, authenticated information set concerning the
			 participant for emergency response purposes, unless the participant specifies
			 that such information set (or any portion of such information set) may not be
			 so accessed. Such limited information set may include information—
									(I)patient
			 identification data, as determined appropriate by the participant;
									(II)provider
			 identification that includes the use of unique provider identifiers;
									(III)payment
			 information;
									(IV)information
			 related to the individual’s vitals, allergies, and medication history;
									(V)information
			 related to existing chronic problems and active clinical conditions of the
			 participant; and
									(VI)information
			 concerning physical examinations, procedures, results, and diagnosis
			 data.
									(3)Rules for
			 secondary uses of records for research and other purposes
							(A)In
			 generalWith respect to the electronic health record of an IHRT
			 participant (or specified parts of such electronic health record) maintained by
			 an IHRT, the IHRT may sell such record (or specified parts of such record) only
			 if—
								(i)the transfer is
			 authorized by the participant pursuant to an agreement between the participant
			 and the IHRT and is in accordance with the privacy protection agreement
			 described in subsection (b)(1) entered into between such participant and such
			 IHRT;
								(ii)such agreement
			 includes parameters with respect to the disclosure of information involved and
			 a process for the authorization of the further disclosure of information in
			 such record;
								(iii)the information
			 involved is to be used for research or other activities only as provided for in
			 the agreement;
								(iv)the
			 recipient of the information provides assurances that the information will not
			 be further transferred or reused in violation of such agreement; and
								(v)the transfer
			 otherwise meets the requirements and standards prescribed by the Federal Trade
			 Commission.
								(B)Treatment of
			 public health reportingNothing in this paragraph shall be
			 construed as prohibiting or limiting the use of health care information of an
			 individual, including an individual who is an IHRT participant, for public
			 health reporting (or other research) purposes prior to the inclusion of such
			 information in an electronic health record maintained by an IHRT.
							(4)Law enforcement
			 clarificationNothing in this
			 subtitle shall prevent an IHRT from disclosing information contained in an
			 electronic health record maintained by the IHRT when required for purposes of a
			 lawful investigation or official proceeding inquiring into a violation of, or
			 failure to comply with, any criminal or civil statute or any regulation, rule,
			 or order issued pursuant to such a statute.
						(5)Rule of
			 constructionNothing in this section shall be construed to
			 require a health care provider that does not utilize electronic methods or
			 appropriate levels of health information technology on the date of the
			 enactment of this Act to adopt such electronic methods or technology as a
			 requirement for participation or compliance under this subtitle.
						(b)Privacy
			 protection agreement; treatment of State privacy and security laws
						(1)Privacy
			 protection agreementA privacy protection agreement described in
			 this subsection is an agreement, with respect to an electronic health record of
			 an IHRT participant to be maintained by an independent health record trust,
			 between the participant and the trust—
							(A)that is consistent
			 with the standards described in subsection (a)(2);
							(B)under which the participant specifies the
			 portions of the record that may be accessed, under what circumstances such
			 portions may be accessed, any authorizations for indicated authorized EHR data
			 users to access information contained in the record, and the purposes for which
			 the information (or portions of the information) in the record may be
			 used;
							(C)which provides a process for the
			 authorization of the transfer of information contained in the record to a third
			 party, including for the sale of such information for purposes of research, by
			 an authorized EHR data user and reuse of such information by such third party,
			 including a provision requiring that such transfer and reuse is not in
			 violation of any privacy or transfer restrictions placed by the participant on
			 the independent health record of such participant; and
							(D)under which the
			 trust provides assurances that the trust will not transfer, disclose, or
			 provide access to the record (or any portion of the record) in violation of the
			 parameters established in the agreement or to any person or entity who has not
			 agreed to use and transfer such record (or portion of such record) in
			 accordance with such agreement.
							(2)Treatment of
			 State laws
							(A)In
			 generalExcept as provided under subparagraph (B), the provisions
			 of a privacy protection agreement entered into between an IHRT and an IHRT
			 participant shall preempt any provision of State law (or any State regulation)
			 relating to the privacy and confidentiality of individually identifiable health
			 information or to the security of such health information.
							(B)Exception for
			 privileged informationThe provisions of a privacy protection
			 agreement shall not preempt any provision of State law (or any State
			 regulation) that recognizes privileged communications between physicians,
			 health care practitioners, and patients of such physicians or health care
			 practitioners, respectively.
							(C)State
			 definedFor purposes of this section, the term State
			 has the meaning given such term when used in title XI of the Social Security
			 Act, as provided under section 1101(a) of such Act (42 U.S.C. 1301(a)).
							847.Voluntary
			 nature of trust participation and information sharing
					(a)In
			 generalParticipation in an independent health record trust, or
			 authorizing access to information from such a trust, is voluntary. No employer,
			 health insurance issuer, group health plan, health care provider, or other
			 person may require, as a condition of employment, issuance of a health
			 insurance policy, coverage under a group health plan, the provision of health
			 care services, payment for such services, or otherwise, that an individual
			 participate in, or authorize access to information from, an independent health
			 record trust.
					(b)EnforcementThe
			 penalties provided for in subsection (a) of section 1177 of the Social Security
			 Act (42 U.S.C. 1320d–6) shall apply to a violation of subsection (a) in the
			 same manner as such penalties apply to a person in violation of subsection (a)
			 of such section.
					848.Financing of
			 activities
					(a)In
			 generalExcept as provided in subsection (b), an IHRT may
			 generate revenue to pay for the operations of the IHRT through—
						(1)charging IHRT
			 participants account fees for use of the trust;
						(2)charging
			 authorized EHR data users for accessing electronic health records maintained in
			 the trust;
						(3)the sale of
			 information contained in the trust (as provided for in section 846(a)(3)(A));
			 and
						(4)any other activity
			 determined appropriate by the Federal Trade Commission.
						(b)Prohibition
			 against access fees for health care providersFor purposes of providing incentives to
			 health care providers to access information maintained in an IHRT, as
			 authorized by the IHRT participants involved, the IHRT may not charge a fee for
			 services specified by the IHRT. Such services shall include the transmittal of
			 information from a health care provider to be included in an independent
			 electronic health record maintained by the IHRT (or permitting such provider to
			 input such information into the record), including the transmission of or
			 access to information described in section 846(a)(2)(C)(ii) by appropriate
			 emergency responders.
					(c)Required
			 disclosuresThe sources and amounts of revenue derived under
			 subsection (a) for the operations of an IHRT shall be fully disclosed to each
			 IHRT participant of such IHRT and to the public.
					(d)Treatment of
			 incomeFor purposes of the Internal Revenue Code of 1986, any
			 revenue described in subsection (a) shall not be included in gross income of
			 any IHRT, IHRT participant, or authorized EHR data user.
					849.Regulatory
			 oversight
					(a)In
			 generalIn carrying out this subtitle, the Federal Trade
			 Commission shall promulgate regulations for independent health record
			 trusts.
					(b)Establishment of
			 Interagency Steering Committee
						(1)In
			 generalThe Secretary of Health and Human Services shall
			 establish an Interagency Steering Committee in accordance with this
			 subsection.
						(2)ChairpersonThe
			 Secretary of Health and Human Services shall serve as the chairperson of the
			 Interagency Steering Committee.
						(3)MembershipThe
			 members of the Interagency Steering Committee shall consist of the Attorney
			 General, the Chairperson of the Federal Trade Commission, the Chairperson for
			 the National Committee for Vital and Health Statistics, a representative of the
			 Federal Reserve, and other Federal officials determined appropriate by the
			 Secretary of Health and Human Services.
						(4)DutiesThe
			 Interagency Steering Committee shall coordinate the implementation of this
			 title, including the implementation of policies described in subsection (d)
			 based upon the recommendations provided under such subsection, and regulations
			 promulgated under this subtitle.
						(c)Federal advisory
			 committee
						(1)In
			 generalThe National Committee for Vital and Health Statistics
			 shall serve as an advisory committee for the IHRTs. The membership of such
			 advisory committee shall include a representative from the Federal Trade
			 Commission and the chairperson of the Interagency Steering Committee. Not less
			 than 60 percent of such membership shall consist of representatives of
			 nongovernment entities, at least one of whom shall be a representative from an
			 organization representing health care consumers.
						(2)DutiesThe
			 National Committee for Vital and Health Statistics shall issue periodic reports
			 and review policies concerning IHRTs based on each of the following
			 factors:
							(A)Privacy and
			 security policies.
							(B)Economic
			 progress.
							(C)Interoperability
			 standards.
							(d)Policies
			 recommended by Federal Trade CommissionThe Federal Trade
			 Commission, in consultation with the National Committee for Vital and Health
			 Statistics, shall recommend policies to—
						(1)provide assistance
			 to encourage the growth of independent health record trusts;
						(2)track economic
			 progress as it pertains to operators of independent health records trusts and
			 individuals receiving nontaxable income with respect to accounts;
						(3)conduct public
			 education activities regarding the creation and usage of the independent health
			 records trusts;
						(4)establish standards for the
			 interoperability of health information technology to ensure that information
			 contained in such record may be shared between the trust involved, the
			 participant, and authorized EHR data users, including for the standardized
			 collection and transmission of individual health records (or portions of such
			 records) to authorized EHR data users through a common interface and for the
			 portability of such records among independent health record trusts; and
						(5)carry out any
			 other activities determined appropriate by the Federal Trade Commission.
						(e)Regulations
			 promulgated by Federal Trade CommissionThe Federal Trade
			 Commission shall promulgate regulations based on, at a minimum, the following
			 factors:
						(1)Requiring that an
			 IHRT participant, who has an electronic health record that is maintained by an
			 IHRT, be notified of a security breech with respect to such record, and any
			 corrective action taken on behalf of the participant.
						(2)Requiring that
			 information sent to, or received from, an IHRT that has been designated as
			 high-risk should be authenticated through the use of methods such as the
			 periodic changing of passwords, the use of biometrics, the use of tokens or
			 other technology as determined appropriate by the council.
						(3)Requiring a delay
			 in releasing sensitive health care test results and other similar information
			 to patients directly in order to give physicians time to contact the
			 patient.
						(4)Recommendations
			 for entities operating IHRTs, including requiring analysis of the potential
			 risk of health transaction security breeches based on set criteria.
						(5)The conduct of
			 audits of IHRTs to ensure that they are in compliance with the requirements and
			 standards established under this subtitle.
						(6)Disclosure to IHRT
			 participants of the means by which such trusts are financed, including revenue
			 from the sale of patient data.
						(7)Prevention of
			 certification of an entity seeking independent heath record trust certification
			 based on—
							(A)the potential for
			 conflicts between the interests of such entity and the security of the health
			 information involved; and
							(B)the involvement of
			 the entity in any activity that is contrary to the best interests of a
			 patient.
							(8)Prevention of the
			 use of revenue sources that are contrary to a patient’s interests.
						(9)Public disclosure
			 of audits in a manner similar to financial audits required for publicly traded
			 stock companies.
						(10)Requiring
			 notification to a participating entity that the information contained in such
			 record may not be representative of the complete or accurate electronic health
			 record of such account holder.
						(f)Compliance
			 reportNot later than 1 year after the date of the enactment of
			 this Act, and annually thereafter, the Commission shall submit to the Committee
			 on Health, Education, Labor, and Pensions and the Committee on Finance of the
			 Senate and the Committee on Energy and Commerce and the Committee on Ways and
			 Means of the House of Representatives, a report on compliance by and progress
			 of independent health record trusts with this subtitle. Such report shall
			 describe the following:
						(1)The number of
			 complaints submitted about independent health record trusts, which shall be
			 divided by complaints related to security breaches, and complaints not related
			 to security breaches, and may include other categories as the Interagency
			 Steering Committee established under subsection (b) determines
			 appropriate.
						(2)The number of
			 enforcement actions undertaken by the Commission against independent health
			 record trusts in response to complaints under paragraph (1), which shall be
			 divided by enforcement actions related to security breaches and enforcement
			 actions not related to security breaches and may include other categories as
			 the Interagency Steering Committee established under subsection (b) determines
			 appropriate.
						(3)The economic
			 progress of the individual owner or institution operator as achieved through
			 independent health record trust usage and existing barriers to such
			 usage.
						(4)The progress in
			 security auditing as provided for by the Interagency Steering Committee council
			 under subsection (b).
						(5)The other core
			 responsibilities of the Commission as described in subsection (a).
						(g)Interagency
			 memorandum of understandingThe Interagency Steering Committee
			 shall ensure, through the execution of an interagency memorandum of
			 understanding, that—
						(1)regulations,
			 rulings, and interpretations issued by Federal officials relating to the same
			 matter over which 2 or more such officials have responsibility under this
			 subtitle are administered so as to have the same effect at all times;
			 and
						(2)the memorandum
			 provides for the coordination of policies related to enforcing the same
			 requirements through such officials in order to have coordinated enforcement
			 strategy that avoids duplication of enforcement efforts and assigns priorities
			 in enforcement.
						IXMiscellaneous
			901.Health care choice for
			 veteransBeginning not later
			 than 2 years after the date of the enactment of this Act, the Secretary of
			 Veterans Affairs may—
				(1)permit veterans, and survivors and
			 dependents of veterans, who are eligible for health care and services under the
			 laws administered by the Secretary to receive such care and services through
			 such non-Department of Veterans Affairs providers and facilities as the
			 Secretary may approve for purposes of this section; and
				(2)pursuant to such procedures as the
			 Secretary of Veteran Affairs shall prescribe for purposes of this section, make
			 payments to such providers and facilities for the provision of such care and
			 services to veterans, and such survivors and dependents, at such rates as the
			 Secretary may specify in such procedures and in such manner so that the
			 Secretary ensures that the aggregate payments made by the Secretary to such
			 providers and facilities do not exceed the aggregate amounts which the
			 Secretary would have paid for such care and services if this section had not
			 been enacted.
				902.Health care choice for Indians
				(a)In generalBeginning not later than 2 years after the
			 date of enactment of this Act, the Secretary of Health and Human Services
			 shall—
					(1)permit Indians who are eligible for health
			 care and services under a health care program operated or financed by the
			 Indian Health Service or by an Indian Tribe, Tribal Organization, or Urban
			 Indian Organization (and any such other individuals who are so eligible as the
			 Secretary may specify), to receive such care and services through such non-
			 Indian Health Service, Indian Tribe, Tribal Organization, or Urban Indian
			 Organization providers and facilities as the Secretary shall approve for
			 purposes of this section; and
					(2)pursuant to such procedures as the
			 Secretary of Health and Human Services shall prescribe for purposes of this
			 section, make payments to such providers and facilities for the provision of
			 such care and services to Indians and individuals described in paragraph (1),
			 at such rates as the Secretary shall specify in such procedures and in such
			 manner so that the Secretary ensures that the aggregate payments made by the
			 Secretary to such providers and facilities do not exceed the aggregate amounts
			 which the Secretary would have paid for such care and services if this section
			 had not been enacted.
					(b)DefinitionsIn this section, the terms
			 Indian, Indian Health Program, Indian
			 Tribe, Tribal Organization, and Urban Indian
			 Organization have the meanings given those terms in section 4 of the
			 Indian Health Care Improvement Act.
				903.Termination of
			 Federal Coordinating Council for Comparative Effectiveness
			 ResearchThe Federal
			 Coordinating Council for Comparative Effectiveness Research is hereby
			 terminated and section 804 of the American Recovery and Reinvestment Act of
			 2009 establishing and funding such Council is hereby repealed.
			904.HHS and GAO
			 joint study and report on costs of the 5 medical conditions that have the
			 greatest impact
				(a)StudyThe Secretary of Health and Human Services
			 (in this section referred to as the Secretary) and the Comptroller
			 General of the United States (in this section referred to as the
			 Comptroller General) shall jointly conduct a study on the costs of
			 the top 5 medical conditions facing the public which have the greatest impact
			 in terms of morbidity, mortality, and financial cost. Such study shall
			 include—
					(1)current estimates as well as a
			 generational score to capture the financial cost and health toll
			 certain medical conditions will inflict on the baby boomer generation and on
			 other individuals; and
					(2)a careful review of certain medical
			 conditions, including heart disease, obesity, diabetes, stroke, cancer,
			 Alzheimers, and other medical conditions the Secretary and Comptroller General
			 determine appropriate.
					(b)ReportNot
			 later than 1 year after the date of enactment of this Act, the Secretary and
			 the Comptroller General shall jointly submit to Congress a report containing
			 the results of the study conducted under subsection (a), together with
			 recommendations for such legislation and administrative action as the Secretary
			 and the Comptroller General determine appropriate.
				(c)Targeting of
			 prevention and wellness effortsThe Secretary shall target prevention and
			 wellness efforts conducted under the provisions of and amendments made by this
			 Act in order to combat medical conditions identified in the report submitted
			 under subsection (b), including such medical conditions identified as the top 5
			 medical conditions facing the public which have the greatest impact in terms of
			 morbidity, mortality, and financial cost as of or after the date of enactment
			 of this Act.