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H.L.C......................................................................(Original Signature of Member)

111TH CONGRESS1ST SESSION

H. R. llTo provide affordable, quality health care for all Americans and reducethe growth in health care spending, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Mr. DINGELL (for himself, Mr. RANGEL, Mr. WAXMAN, Mr. GEORGE MILLERof California, Mr. STARK, Mr. PALLONE, and Mr. ANDREWS) introducedthe following bill; which was referred to the Committee on

lllllllllllllll

A BILL

To provide affordable, quality health care for all Americansand reduce the growth in health care spending, andfor other purposes.

1Be it enacted by the Senate and House of Representa2tives of the United States of America in Congress assembled,

3SECTION 1. SHORT TITLE; TABLE OF DIVISIONS, TITLES,4

AND SUBTITLES.

5

(a) SHORT TITLE.This Act may be cited as the6America

s Affordable Health Choices Act of 2009

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2

1(b) TABLE OF DIVISIONS, TITLES, AND SUB2TITLES.This Act is divided into divisions, titles, and3subtitles as follows:

DIVISION AAFFORDABLE HEALTH CARE CHOICESTITLE IPROTECTIONS AND STANDARDS FOR QUALIFIEDHEALTH BENEFITS PLANSSubtitle AGeneral StandardsSubtitle BStandards Guaranteeing Access to Affordable CoverageSubtitle CStandards Guaranteeing Access to Essential Benefits

Subtitle DAdditional Consumer ProtectionsSubtitle EGovernance

Subtitle FRelation to Other Requirements; MiscellaneousSubtitle GEarly InvestmentsTITLE IIHEALTH INSURANCE EXCHANGE AND RELATED

PROVISIONSSubtitle AHealth Insurance ExchangeSubtitle BPublic Health Insurance OptionSubtitle CIndividual Affordability CreditsTITLE IIISHARED RESPONSIBILITYSubtitle AIndividual Responsibility

Subtitle BEmployer ResponsibilityTITLE IVAMENDMENTS TO INTERNAL REVENUE CODE OF 1986Subtitle AShared ResponsibilitySubtitle BCredit for Small Business Employee Health Coverage ExpensesSubtitle CDisclosures to Carry Out Health Insurance Exchange SubsidiesSubtitle DOther Revenue ProvisionsDIVISION BMEDICARE AND MEDICAID IMPROVEMENTSTITLE IIMPROVING HEALTH CARE VALUESubtitle AProvisions Related to Medicare Part ASubtitle BProvisions Related to Part BSubtitle CProvisions Related to Medicare Parts A and B

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3

Subtitle DMedicare Advantage Reforms

Subtitle EImprovements to Medicare Part DSubtitle FMedicare Rural Access ProtectionsTITLE IIMEDICARE BENEFICIARY IMPROVEMENTSSubtitle AImproving and Simplifying Financial Assistance for Low Income

Medicare BeneficiariesSubtitle BReducing Health DisparitiesSubtitle CMiscellaneous ImprovementsTITLE IIIPROMOTING PRIMARY CARE, MENTAL HEALTHSERVICES, AND COORDINATED CARETITLE IVQUALITY

Subtitle AComparative Effectiveness ResearchSubtitle BNursing Home Transparency

Subtitle CQuality MeasurementsSubtitle DPhysician Payments Sunshine ProvisionSubtitle EPublic Reporting on Health Care-Associated InfectionsTITLE VMEDICARE GRADUATE MEDICAL EDUCATIONTITLE VIPROGRAM INTEGRITYSubtitle AIncreased Funding to Fight Waste, Fraud, and AbuseSubtitle BEnhanced Penalties for Fraud and AbuseSubtitle CEnhanced Program and Provider ProtectionsSubtitle DAccess to Information Needed to Prevent Fraud, Waste, andAbuseTITLE VIIMEDICAID AND CHIP

Subtitle AMedicaid and Health ReformSubtitle BPreventionSubtitle CAccessSubtitle DCoverageSubtitle EFinancingSubtitle FWaste, Fraud, and AbuseSubtitle GPuerto Rico and the TerritoriesSubtitle HMiscellaneous

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4

TITLE VIIIREVENUE-RELATED PROVISIONS

TITLE IXMISCELLANEOUS PROVISIONSDIVISION CPUBLIC HEALTH AND WORKFORCE DEVELOPMENTTITLE ICOMMUNITY HEALTH CENTERSTITLE IIWORKFORCESubtitle APrimary Care WorkforceSubtitle BNursing WorkforceSubtitle CPublic Health WorkforceSubtitle DAdapting Workforce to Evolving Health System NeedsTITLE IIIPREVENTION AND WELLNESSTITLE IVQUALITY AND SURVEILLANCETITLE VOTHER PROVISIONSSubtitle ADrug Discount for Rural and Other Hospitals

Subtitle BSchool-Based Health ClinicsSubtitle CNational Medical Device Registry

Subtitle DGrants for Comprehensive Programs to Provide Education to

Nurses and Create a Pipeline to NursingSubtitle EStates Failing to Adhere to Certain Employment Obligations

1DIVISION AAFFORDABLE2HEALTH CARE CHOICES3

SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION;4GENERAL DEFINITIONS.5(a) PURPOSE. 6

(1) IN GENERAL.The purpose of this division7

is to provide affordable, quality health care for all

8

Americans and reduce the growth in health care

9

spending.

10

(2) BUILDING ON CURRENT SYSTEM.This di11

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vision achieves this purpose by building on what

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51works in todays health care system, while repairing

2the aspects that are broken.3(3) INSURANCE REFORMS.This division 4(A) enacts strong insurance market re5forms;6(B) creates a new Health Insurance Ex7change, with a public health insurance option8alongside private plans;

9(C) includes sliding scale affordability10credits; and11(D) initiates shared responsibility among12workers, employers, and the government;13so that all Americans have coverage of essential14health benefits.15

(4) HEALTH DELIVERY REFORM.This division16institutes health delivery system reforms both to in17crease quality and to reduce growth in health spend18ing so that health care becomes more affordable for19businesses, families, and government.20(b) TABLE OF CONTENTS OF DIVISION.The table21of contents of this division is as follows:Sec. 100. Purpose; table of contents of division; general definitions.TITLE IPROTECTIONS AND STANDARDS FOR QUALIFIEDHEALTH BENEFITS PLANSSubtitle AGeneral StandardsSec. 101. Requirements reforming health insurance marketplace.Sec. 102. Protecting the choice to keep current coverage.

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6

Subtitle BStandards Guaranteeing Access to Affordable Coverage

Sec. 111. Prohibiting pre-existing condition exclusions.Sec. 112. Guaranteed issue and renewal for insured plans.Sec. 113. Insurance rating rules.Sec. 114. Nondiscrimination in benefits; parity in mental health and substance

abuse disorder benefits.Sec. 115. Ensuring adequacy of provider networks.Sec. 116. Ensuring value and lower premiums.

Subtitle CStandards Guaranteeing Access to Essential Benefits

Sec. 121. Coverage of essential benefits package.Sec. 122. Essential benefits package defined.Sec. 123. Health Benefits Advisory Committee.Sec. 124. Process for adoption of recommendations; adoption of benefit stand

ards.

Subtitle DAdditional Consumer Protections

Sec. 131. Requiring fair marketing practices by health insurers.Sec. 132. Requiring fair grievance and appeals mechanisms.

Sec. 133. Requiring information transparency and plan disclosure.Sec. 134. Application to qualified health benefits plans not offered through the

Health Insurance Exchange.Sec. 135. Timely payment of claims.Sec. 136. Standardized rules for coordination and subrogation of benefits.Sec. 137. Application of administrative simplification.

Subtitle EGovernance

Sec. 141. Health Choices Administration; Health Choices Commissioner.Sec. 142. Duties and authority of Commissioner.Sec. 143. Consultation and coordination.Sec. 144. Health Insurance Ombudsman.

Subtitle FRelation to Other Requirements; Miscellaneous

Sec. 151. Relation to other requirements.Sec. 152. Prohibiting discrimination in health care.Sec. 153. Whistleblower protection.Sec. 154. Construction regarding collective bargaining.Sec. 155. Severability.

Subtitle GEarly Investments

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Sec. 161. Ensuring value and lower premiums.Sec. 162. Ending health insurance rescission abuse.Sec. 163. Administrative simplification.Sec. 164. Reinsurance program for retirees.

TITLE IIHEALTH INSURANCE EXCHANGE AND RELATEDPROVISIONS

Subtitle AHealth Insurance Exchange

Sec. 201. Establishment of Health Insurance Exchange; outline of duties; definitions.

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7

Sec. 202. Exchange-eligible individuals and employers.

Sec. 203. Benefits package levels.

Sec. 204. Contracts for the offering of Exchange-participating health benefitsplans.

Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employers in Exchange-participating health benefits plan.

Sec. 206. Other functions.

Sec. 207. Health Insurance Exchange Trust Fund.

Sec. 208. Optional operation of State-based health insurance exchanges.

Subtitle BPublic Health Insurance Option

Sec. 221. Establishment and administration of a public health insurance optionas an Exchange-qualified health benefits plan.

Sec. 222. Premiums and financing.

Sec. 223. Payment rates for items and services.

Sec. 224. Modernized payment initiatives and delivery system reform.

Sec. 225. Provider participation.

Sec. 226. Application of fraud and abuse provisions.

Subtitle CIndividual Affordability Credits

Sec. 241. Availability through Health Insurance Exchange.Sec. 242. Affordable credit eligible individual.Sec. 243. Affordable premium credit.Sec. 244. Affordability cost-sharing credit.Sec. 245. Income determinations.Sec. 246. No Federal payment for undocumented aliens.

TITLE IIISHARED RESPONSIBILITY

Subtitle AIndividual Responsibility

Sec. 301. Individual responsibility.

Subtitle BEmployer Responsibility

PART 1HEALTH COVERAGE PARTICIPATION REQUIREMENTS

Sec. 311. Health coverage participation requirements.

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Sec. 312. Employer responsibility to contribute towards employee and dependentcoverage.

Sec. 313. Employer contributions in lieu of coverage.

Sec. 314. Authority related to improper steering.

PART 2SATISFACTION OF HEALTH COVERAGE PARTICIPATIONREQUIREMENTS

Sec. 321. Satisfaction of health coverage participation requirements under theEmployee Retirement Income Security Act of 1974.

Sec. 322. Satisfaction of health coverage participation requirements under theInternal Revenue Code of 1986.

Sec. 323. Satisfaction of health coverage participation requirements under thePublic Health Service Act.

Sec. 324. Additional rules relating to health coverage participation requirements.

TITLE IVAMENDMENTS TO INTERNAL REVENUE CODE OF 1986

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Subtitle AShared Responsibility

PART 1INDIVIDUAL RESPONSIBILITYSec. 401. Tax on individuals without acceptable health care coverage.

PART 2EMPLOYER RESPONSIBILITY

Sec. 411. Election to satisfy health coverage participation requirements.Sec. 412. Responsibilities of nonelecting employers.

Subtitle BCredit for Small Business Employee Health Coverage ExpensesSec. 421. Credit for small business employee health coverage expenses.

Subtitle CDisclosures to Carry Out Health Insurance Exchange SubsidiesSec. 431. Disclosures to carry out health insurance exchange subsidies.

Subtitle DOther Revenue Provisions

PART 1GENERAL PROVISIONS

Sec. 441. Surcharge on high income individuals.Sec. 442. Delay in application of worldwide allocation of interest.

PART 2PREVENTION OF TAX AVOIDANCE

Sec. 451. Limitation on treaty benefits for certain deductible payments.Sec. 452. Codification of economic substance doctrine.Sec. 453. Penalties for underpayments.

1(c) GENERAL DEFINITIONS.Except as otherwise2provided, in this division:3(1) ACCEPTABLE COVERAGE.The term ac4ceptable coverage has the meaning given such term5in section 202(d)(2).6(2) BASIC PLAN.The term basic plan has7the meaning given such term in section 203(c).8(3) COMMISSIONER.The term Commis9

sioner means the Health Choices Commissioner es

10

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tablished under section 141.

11

(4) COST-SHARING.The term cost-sharing 12

includes deductibles, coinsurance, copayments, and

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91similar charges but does not include premiums or

2any network payment differential for covered serv3ices or spending for non-covered services.4(5) DEPENDENT.The term dependent has5the meaning given such term by the Commissioner6and includes a spouse.7(6) EMPLOYMENT-BASED HEALTH PLAN.The8

termemployment-based health plan

9

(A) means a group health plan (as defined10in section 733(a)(1) of the Employee Retire11ment Income Security Act of 1974); and12(B) includes such a plan that is the fol13lowing:14(i) FEDERAL, STATE, AND TRIBAL15GOVERNMENTAL PLANS.A governmental

16plan (as defined in section 3(32) of the17Employee Retirement Income Security Act18of 1974), including a health benefits plan19offered under chapter 89 of title 5, United20States Code.21(ii) CHURCH PLANS.A church plan22(as defined in section 3(33) of the Em23ployee Retirement Income Security Act of241974).

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101(7) ENHANCED PLAN.The term enhanced

2plan has the meaning given such term in section3203(c).4(8) ESSENTIAL BENEFITS PACKAGE.The termessential benefits package is defined in section6122(a).7(9) FAMILY.The term family means an in8dividual and includes the individuals dependents.

9(10) FEDERAL POVERTY LEVEL; FPL.Theterms Federal poverty level and FPL have the11meaning given the term poverty line in section12673(2) of the Community Services Block Grant Act13(42 U.S.C. 9902(2)), including any revision required14by such section.(11) HEALTH BENEFITS PLAN.The terms16

health benefits plan means health insurance cov17erage and an employment-based health plan and in18cludes the public health insurance option.19(12) HEALTH INSURANCE COVERAGE; HEALTHINSURANCE ISSUER.The terms health insurance21coverage and health insurance issuer have the22meanings given such terms in section 2791 of the23Public Health Service Act.24(13) HEALTH INSURANCE EXCHANGE.Theterm Health Insurance Exchange means the

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111Health Insurance Exchange established under sec2

tion 201.3(14) MEDICAID.The term Medicaid means4a State plan under title XIX of the Social Security5Act (whether or not the plan is operating under a6waiver under section 1115 of such Act).7(15) MEDICARE.The term Medicare means8

the health insurance programs under title XVIII of9the Social Security Act.10(16) PLAN SPONSOR.The term plan spon11sor has the meaning given such term in section123(16)(B) of the Employee Retirement Income Secu13rity Act of 1974.14(17) PLAN YEAR.The term plan year 15means

16(A) with respect to an employment-based17health plan, a plan year as specified under such18plan; or19(B) with respect to a health benefits plan20other than an employment-based health plan, a2112-month period as specified by the Commis22sioner.23(18) PREMIUM PLAN; PREMIUM-PLUS PLAN. 24The terms premium plan and premium-plus

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121plan have the meanings given such terms in section

2203(c).3(19) QHBP OFFERING ENTITY.The terms4QHBP offering entity means, with respect to ahealth benefits plan that is 6(A) a group health plan (as defined, sub7ject to subsection (d), in section 733(a)(1) of8the Employee Retirement Income Security Act

9of 1974), the plan sponsor in relation to suchgroup health plan, except that, in the case of a11plan maintained jointly by 1 or more employers12and 1 or more employee organizations and with13respect to which an employer is the primary14source of financing, such term means such employer;16(B) health insurance coverage, the health

17insurance issuer offering the coverage;18(C) the public health insurance option, the19Secretary of Health and Human Services;(D) a non-Federal governmental plan (as21defined in section 2791(d) of the Public Health22Service Act), the State or political subdivision23of a State (or agency or instrumentality of such24State or subdivision) which establishes or maintainssuch plan; or

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131(E) a Federal governmental plan (as de2

fined in section 2791(d) of the Public Health3Service Act), the appropriate Federal official.4(20) QUALIFIED HEALTH BENEFITS PLAN. 5The term qualified health benefits plan means a6health benefits plan that meets the requirements for7such a plan under title I and includes the public8

health insurance option.9(21) PUBLIC HEALTH INSURANCE OPTION. 10The term public health insurance option means11the public health insurance option as provided under12subtitle B of title II.13(22) SERVICE AREA; PREMIUM RATING AREA. 14The terms service area and premium rating

15area mean with respect to health insurance cov16erage 17(A) offered other than through the Health18Insurance Exchange, such an area as estab19lished by the QHBP offering entity of such cov20erage in accordance with applicable State law;21and22(B) offered through the Health Insurance23Exchange, such an area as established by such24entity in accordance with applicable State law

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141and applicable rules of the Commissioner for

2Exchange-participating health benefits plans.3(23) STATE.The term State means the 504States and the District of Columbia.5(24) STATE MEDICAID AGENCY.The term6State Medicaid agency means, with respect to a7Medicaid plan, the single State agency responsible

8for administering such plan under title XIX of the9Social Security Act.10(25) Y1, Y2, ETC..The terms Y1 , Y2,11Y3, Y4, Y5, and similar subsequently num12bered terms, mean 2013 and subsequent years, re13spectively.14TITLE IPROTECTIONS AND15

STANDARDS FOR QUALIFIED16HEALTH BENEFITS PLANS17Subtitle AGeneral Standards18SEC. 101. REQUIREMENTS REFORMING HEALTH INSUR19ANCE MARKETPLACE.20(a) PURPOSE.The purpose of this title is to estab21lish standards to ensure that new health insurance cov22erage and employment-based health plans that are offered23meet standards guaranteeing access to affordable cov24erage, essential benefits, and other consumer protections.

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151(b) REQUIREMENTS FOR QUALIFIED HEALTH BENE2

FITS PLANS.On or after the first day of Y1, a health3benefits plan shall not be a qualified health benefits plan4under this division unless the plan meets the applicablerequirements of the following subtitles for the type of plan6and plan year involved:7(1) Subtitle B (relating to affordable coverage).8(2) Subtitle C (relating to essential benefits).

9(3) Subtitle D (relating to consumer protection).11(c) TERMINOLOGY.In this division:12(1) ENROLLMENT IN EMPLOYMENT-BASED13HEALTH PLANS.An individual shall be treated as14being enrolled in an employment-based healthplan if the individual is a participant or beneficiary16(as such terms are defined in section 3(7) and 3(8),

17respectively, of the Employee Retirement Income Se18curity Act of 1974) in such plan.19(2) INDIVIDUAL AND GROUP HEALTH INSURANCECOVERAGE.The terms individual health in21surance coverage and group health insurance cov22erage mean health insurance coverage offered in23the individual market or large or small group mar24ket, respectively, as defined in section 2791 of thePublic Health Service Act.

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SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT

COVERAGE.

(a) GRANDFATHERED HEALTH INSURANCE COVERAGEDEFINED.Subject to the succeeding provisions ofthis section, for purposes of establishing acceptable coverageunder this division, the term grandfathered healthinsurance coverage means individual health insurancecoverage that is offered and in force and effect before thefirst day of Y1 if the following conditions are met:(1) LIMITATION ON NEW ENROLLMENT.

(A) IN GENERAL.Except as provided inthis paragraph, the individual health insurance

issuer offering such coverage does not enrollany individual in such coverage if the first effectivedate of coverage is on or after the firstday of Y1.(B) DEPENDENT COVERAGE PERMITTED.Subparagraph (A) shall not affectthe subsequent enrollment of a dependent of anindividual who is covered as of such first day.(2) LIMITATION ON CHANGES IN TERMS ORCONDITIONS.Subject to paragraph (3) and exceptas required by law, the issuer does not change any

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171(3) RESTRICTIONS ON PREMIUM INCREASES.

2The issuer cannot vary the percentage increase in3the premium for a risk group of enrollees in specific4grandfathered health insurance coverage without5changing the premium for all enrollees in the same6risk group at the same rate, as specified by the7Commissioner.

8(b) GRACE PERIOD FOR CURRENT EMPLOYMENT-9BASED HEALTH PLANS. 10(1) GRACE PERIOD. 11(A) IN GENERAL.The Commissioner12shall establish a grace period whereby, for plan13years beginning after the end of the 5-year pe14riod beginning with Y1, an employment-based

15health plan in operation as of the day before16the first day of Y1 must meet the same require17ments as apply to a qualified health benefits18plan under section 101, including the essential19benefit package requirement under section 121.20(B) EXCEPTION FOR LIMITED BENEFITS21PLANS.Subparagraph (A) shall not apply to22an employment-based health plan in which the23coverage consists only of one or more of the fol24lowing:

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181(i) Any coverage described in section

23001(a)(1)(B)(ii)(IV) of division B of the3American Recovery and Reinvestment Act4of 2009 (PL 1115).5(ii) Excepted benefits (as defined in6section 733(c) of the Employee Retirement7Income Security Act of 1974), including

8coverage under a specified disease or ill9ness policy described in paragraph (3)(A)10of such section.11(iii) Such other limited benefits as the12Commissioner may specify.13In no case shall an employment-based health14plan in which the coverage consists only of one

15or more of the coverage or benefits described in16clauses (i) through (iii) be treated as acceptable17coverage under this division18(2) TRANSITIONAL TREATMENT AS ACCEPT19ABLE COVERAGE.During the grace period specified20in paragraph (1)(A), an employment-based health21plan that is described in such paragraph shall be22treated as acceptable coverage under this division.23(c) LIMITATION ON INDIVIDUAL HEALTH INSURANCE24COVERAGE.

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1(1) IN GENERAL.Individual health insurance2coverage that is not grandfathered health insurance3coverage under subsection (a) may only be offered4on or after the first day of Y1 as an Exchange-participatinghealth benefits plan.6(2) SEPARATE, EXCEPTED COVERAGE PER7MITTED.Excepted benefits (as defined in section

82791(c) of the Public Health Service Act) are not9included within the definition of health insurancecoverage. Nothing in paragraph (1) shall prevent the11offering, other than through the Health Insurance12Exchange, of excepted benefits so long as it is of13fered and priced separately from health insurance14coverage.Subtitle BStandards Guaran16

teeing Access to Affordable Cov17erage18SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLU19SIONS.A qualified health benefits plan may not impose any21pre-existing condition exclusion (as defined in section222701(b)(1)(A) of the Public Health Service Act) or other23wise impose any limit or condition on the coverage under24the plan with respect to an individual or dependent basedon any health status-related factors (as defined in section

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2012791(d)(9) of the Public Health Service Act) in relation

2to the individual or dependent.3SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR IN4SURED PLANS.5The requirements of sections 2711 (other than sub6sections (c) and (e)) and 2712 (other than paragraphs (3),7and (6) of subsection (b) and subsection (e)) of the Public8Health Service Act, relating to guaranteed availability and

9renewability of health insurance coverage, shall apply to10individuals and employers in all individual and group11health insurance coverage, whether offered to individuals12or employers through the Health Insurance Exchange,13through any employment-based health plan, or otherwise,14in the same manner as such sections apply to employers15

and health insurance coverage offered in the small group16market, except that such section 2712(b)(1) shall apply17only if, before nonrenewal or discontinuation of coverage,18the issuer has provided the enrollee with notice of non-19payment of premiums and there is a grace period during20which the enrollees has an opportunity to correct such21nonpayment. Rescissions of such coverage shall be prohib22ited except in cases of fraud as defined in sections232712(b)(2) of such Act.

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21

SEC. 113. INSURANCE RATING RULES.

(a) IN GENERAL.The premium rate charged for aninsured qualified health benefits plan may not vary exceptas follows:(1) LIMITED AGE VARIATION PERMITTED.Byage (within such age categories as the Commissionershall specify) so long as the ratio of the highest suchpremium to the lowest such premium does not exceedthe ratio of 2 to 1.(2) BY AREA.By premium rating area (aspermitted by State insurance regulators or, in the

case of Exchange-participating health benefits plans,as specified by the Commissioner in consultationwith such regulators).(3) BY FAMILY ENROLLMENT.By family enrollment(such as variations within categories andcompositions of families) so long as the ratio of thepremium for family enrollment (or enrollments) tothe premium for individual enrollment is uniform, asspecified under State law and consistent with rulesof the Commissioner.(b) STUDY AND REPORTS. (1) STUDY.The Commissioner, in coordinationwith the Secretary of Health and Human Services

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221employer health care markets. Such study shall ex2

amine the following:3(A) The types of employers by key charac4teristics, including size, that purchase insuredproducts versus those that self-insure.6(B) The similarities and differences be7tween typical insured and self-insured health8plans.9(C) The financial solvency and capital reserve

levels of employers that self-insure by em11ployer size.12(D) The risk of self-insured employers not13being able to pay obligations or otherwise be14coming financially insolvent.(E) The extent to which rating rules are16likely to cause adverse selection in the large17group market or to encourage small and mid18

size employers to self-insure19(2) REPORTS.Not later than 18 months afterthe date of the enactment of this Act, the Commis21sioner shall submit to Congress and the applicable22agencies a report on the study conducted under23paragraph (1). Such report shall include any rec24ommendations the Commissioner deems appropriateto ensure that the law does not provide incentives

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231for small and mid-size employers to self-insure or

2create adverse selection in the risk pools of large3group insurers and self-insured employers. Not later4than 18 months after the first day of Y1, the Commissionershall submit to Congress and the applica6ble agencies an updated report on such study, in7cluding updates on such recommendations.8SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN9

MENTAL HEALTH AND SUBSTANCE ABUSEDISORDER BENEFITS.11(a) NONDISCRIMINATION IN BENEFITS.A qualified12health benefits plan shall comply with standards estab13lished by the Commissioner to prohibit discrimination in14health benefits or benefit structures for qualifying healthbenefits plans, building from sections 702 of Employee16Retirement Income Security Act of 1974, 2702 of the17

Public Health Service Act, and section 9802 of the Inter18nal Revenue Code of 1986.19(b) PARITY IN MENTAL HEALTH AND SUBSTANCEABUSE DISORDER BENEFITS.To the extent such provi21sions are not superceded by or inconsistent with subtitle22C, the provisions of section 2705 (other than subsections23(a)(1), (a)(2), and (c)) of section 2705 of the Public24Health Service Act shall apply to a qualified health benefitsplan, regardless of whether it is offered in the indi

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241vidual or group market, in the same manner as such provi2

sions apply to health insurance coverage offered in the3large group market.4SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.5(a) IN GENERAL.A qualified health benefits plan6that uses a provider network for items and services shall7meet such standards respecting provider networks as the8

Commissioner may establish to assure the adequacy of9such networks in ensuring enrollee access to such items10and services and transparency in the cost-sharing differen11tials between in-network coverage and out-of-network cov12erage.13(b) PROVIDER NETWORK DEFINED.In this divi14sion, the term provider network means the providers15with respect to which covered benefits, treatments, and16

services are available under a health benefits plan.17SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.18(a) IN GENERAL.A qualified health benefits plan19shall meet a medical loss ratio as defined by the Commis20sioner. For any plan year in which the qualified health21benefits plan does not meet such medical loss ratio, QHBP22offering entity shall provide in a manner specified by the23Commissioner for rebates to enrollees of payment suffi24cient to meet such loss ratio.

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25

1(b) BUILDING ON INTERIM RULES.In imple2menting subsection (a), the Commissioner shall build on3the definition and methodology developed by the Secretary4of Health and Human Services under the amendmentsmade by section 161 for determining how to calculate the6medical loss ratio. Such methodology shall be set at the7highest level medical loss ratio possible that is designed

8to ensure adequate participation by QHBP offering enti9ties, competition in the health insurance market in andout of the Health Insurance Exchange, and value for con11sumers so that their premiums are used for services.12Subtitle CStandards Guaran13teeing Access to Essential Bene14fitsSEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.16(a) IN GENERAL.A qualified health benefits plan17

shall provide coverage that at least meets the benefit18standards adopted under section 124 for the essential ben19efits package described in section 122 for the plan yearinvolved.21(b) CHOICE OF COVERAGE. 22(1) NON-EXCHANGE-PARTICIPATING HEALTH23BENEFITS PLANS.In the case of a qualified health24benefits plan that is not an Exchange-participatinghealth benefits plan, such plan may offer such cov

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261erage in addition to the essential benefits package as

2the QHBP offering entity may specify.3(2) EXCHANGE-PARTICIPATING HEALTH BENE4FITS PLANS.In the case of an Exchange-partici5pating health benefits plan, such plan is required6under section 203 to provide specified levels of bene7fits and, in the case of a plan offering a premium-8plus level of benefits, provide additional benefits.9

(3) CONTINUATION OF OFFERING OF SEPARATE10EXCEPTED BENEFITS COVERAGE.Nothing in this11division shall be construed as affecting the offering12of health benefits in the form of excepted benefits13(described in section 102(b)(1)(B)(ii)) if such bene14fits are offered under a separate policy, contract, or15certificate of insurance.16

(c) NO RESTRICTIONS ON COVERAGE UNRELATED17TO CLINICAL APPROPRIATENESS.A qualified health ben18efits plan may not impose any restriction (other than cost-19sharing) unrelated to clinical appropriateness on the cov20erage of the health care items and services.21SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.22(a) IN GENERAL.In this division, the term essen23tial benefits package means health benefits coverage,24consistent with standards adopted under section 124 to

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281(3) Professional services of physicians and other

2health professionals.3(4) Such services, equipment, and supplies inci4dent to the services of a physicians or a health professionalsdelivery of care in institutional settings,6physician offices, patients homes or place of resi7dence, or other settings, as appropriate.8(5) Prescription drugs.9

(6) Rehabilitative and habilitative services.(7) Mental health and substance use disorder11services.12(8) Preventive services, including those services13recommended with a grade of A or B by the Task14Force on Clinical Preventive Services and those vaccinesrecommended for use by the Director of the16Centers for Disease Control and Prevention.

17(9) Maternity care.18(10) Well baby and well child care and oral19health, vision, and hearing services, equipment, andsupplies at least for children under 21 years of age.21(c) REQUIREMENTS RELATING TO COST-SHARING22AND MINIMUM ACTUARIAL VALUE. 23(1) NO COST-SHARING FOR PREVENTIVE SERV24ICES.There shall be no cost-sharing under the essentialbenefits package for preventive items and

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291services (as specified under the benefit standards),

2including well baby and well child care.3(2) ANNUAL LIMITATION. 4(A) ANNUAL LIMITATION.The cost-sharingincurred under the essential benefits pack6age with respect to an individual (or family) for7a year does not exceed the applicable level spec8ified in subparagraph (B).9

(B) APPLICABLE LEVEL.The applicablelevel specified in this subparagraph for Y1 is

11$5,000 for an individual and $10,000 for a12family. Such levels shall be increased (rounded13to the nearest $100) for each subsequent year14by the annual percentage increase in the ConsumerPrice Index (United States city average)16applicable to such year.

17(C) USE OF COPAYMENTS.In establishing18cost-sharing levels for basic, enhanced, and pre19mium plans under this subsection, the Secretaryshall, to the maximum extent possible,21use only copayments and not coinsurance.22(3) MINIMUM ACTUARIAL VALUE. 23(A) IN GENERAL.The cost-sharing under24the essential benefits package shall be designedto provide a level of coverage that is designed

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301to provide benefits that are actuarially equiva2

lent to approximately 70 percent of the full ac3tuarial value of the benefits provided under the4reference benefits package described in sub5paragraph (B).6(B) REFERENCE BENEFITS PACKAGE DE7SCRIBED.The reference benefits package de8scribed in this subparagraph is the essential9benefits package if there were no cost-sharing10

imposed.11SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.12(a) ESTABLISHMENT. 13(1) IN GENERAL.There is established a pri14vate-public advisory committee which shall be a15panel of medical and other experts to be known as16the Health Benefits Advisory Committee to rec17ommend covered benefits and essential, enhanced,

18and premium plans.19(2) CHAIR.The Surgeon General shall be a20member and the chair of the Health Benefits Advi21sory Committee.22(3) MEMBERSHIP.The Health Benefits Advi23sory Committee shall be composed of the following24members, in addition to the Surgeon General:

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311(A) 9 members who are not Federal em2

ployees or officers and who are appointed by3the President.4(B) 9 members who are not Federal employeesor officers and who are appointed by6the Comptroller General of the United States in7a manner similar to the manner in which the8Comptroller General appoints members to the

9Medicare Payment Advisory Commission undersection 1805(c) of the Social Security Act.11(C) Such even number of members (not to12exceed 8) who are Federal employees and offi13cers, as the President may appoint.14Such initial appointments shall be made not laterthan 60 days after the date of the enactment of this16Act.

17(4) TERMS.Each member of the Health Bene18fits Advisory Committee shall serve a 3-year term on19the Committee, except that the terms of the initialmembers shall be adjusted in order to provide for a21staggered term of appointment for all such mem22bers.23(5) PARTICIPATION.The membership of the24Health Benefits Advisory Committee shall at leastreflect providers, consumer representatives, employ-

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321ers, labor, health insurance issuers, experts in health

2care financing and delivery, experts in racial and3ethnic disparities, experts in care for those with dis4abilities, representatives of relevant governmentalagencies. and at least one practicing physician or6other health professional and an expert on childrens7health and shall represent a balance among various8sectors of the health care system so that no single

9sector unduly influences the recommendations ofsuch Committee.11(b) DUTIES. 12(1) RECOMMENDATIONS ON BENEFIT STAND13ARDS.The Health Benefits Advisory Committee14shall recommend to the Secretary of Health andHuman Services (in this subtitle referred to as the16Secretary) benefit standards (as defined in para17

graph (4)), and periodic updates to such standards.18In developing such recommendations, the Committee19shall take into account innovation in health care andconsider how such standards could reduce health dis21parities.22(2) DEADLINE.The Health Benefits Advisory23Committee shall recommend initial benefit standards24to the Secretary not later than 1 year after the dateof the enactment of this Act.

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331(3) PUBLIC INPUT.The Health Benefits Advi2

sory Committee shall allow for public input as a part3of developing recommendations under this sub4section.(4) BENEFIT STANDARDS DEFINED.In this6subtitle, the term benefit standards means stand7ards respecting 8(A) the essential benefits package de9scribed in section 122, including categories ofcovered treatments, items and services within

11benefit classes, and cost-sharing; and12(B) the cost-sharing levels for enhanced13plans and premium plans (as provided under14section 203(c)) consistent with paragraph (5).(5) LEVELS OF COST-SHARING FOR ENHANCED16AND PREMIUM PLANS. 17(A) ENHANCED PLAN.The level of cost-

18sharing for enhanced plans shall be designed so19that such plans have benefits that are actuariallyequivalent to approximately 85 percent of21the actuarial value of the benefits provided22under the reference benefits package described23in section 122(c)(3)(B).24(B) PREMIUM PLAN.The level of cost-sharing for premium plans shall be designed so

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341that such plans have benefits that are actuari2

ally equivalent to approximately 95 percent of3the actuarial value of the benefits provided4under the reference benefits package described5in section 122(c)(3)(B).6(c) OPERATIONS. 7(1) PER DIEM PAY.Each member of the8

Health Benefits Advisory Committee shall receive9travel expenses, including per diem in accordance10with applicable provisions under subchapter I of11chapter 57 of title 5, United States Code, and shall12otherwise serve without additional pay.13(2) MEMBERS NOT TREATED AS FEDERAL EM14PLOYEES.Members of the Health Benefits Advi15sory Committee shall not be considered employees of

16the Federal government solely by reason of any serv17ice on the Committee.18(3) APPLICATION OF FACA.The Federal Advi19sory Committee Act (5 U.S.C. App.), other than sec20tion 14, shall apply to the Health Benefits Advisory21Committee.22(d) PUBLICATION.The Secretary shall provide for23publication in the Federal Register and the posting on the24Internet website of the Department of Health and Human

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351Services of all recommendations made by the Health Ben2

efits Advisory Committee under this section.3SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDA4TIONS; ADOPTION OF BENEFIT STANDARDS.(a) PROCESS FOR ADOPTION OF RECOMMENDA6TIONS. 7(1) REVIEW OF RECOMMENDED STANDARDS. 8Not later than 45 days after the date of receipt of9benefit standards recommended under section 123

(including such standards as modified under para11graph (2)(B)), the Secretary shall review such12standards and shall determine whether to propose13adoption of such standards as a package.14(2) DETERMINATION TO ADOPT STANDARDS. If the Secretary determines 16(A) to propose adoption of benefit stand17ards so recommended as a package, the Sec18retary shall, by regulation under section 553 of

19title 5, United States Code, propose adoptionsuch standards; or21(B) not to propose adoption of such stand22ards as a package, the Secretary shall notify23the Health Benefits Advisory Committee in24writing of such determination and the reasonsfor not proposing the adoption of such rec-

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361ommendation and provide the Committee with a

2further opportunity to modify its previous rec3ommendations and submit new recommenda4tions to the Secretary on a timely basis.5(3) CONTINGENCY.If, because of the applica6tion of paragraph (2)(B), the Secretary would other7wise be unable to propose initial adoption of such8recommended standards by the deadline specified in9subsection (b)(1), the Secretary shall, by regulation

10under section 553 of title 5, United States Code,11propose adoption of initial benefit standards by such12deadline.13(4) PUBLICATION.The Secretary shall provide14for publication in the Federal Register of all deter15minations made by the Secretary under this sub16section.17

(b) ADOPTION OF STANDARDS. 18(1) INITIAL STANDARDS.Not later than 1819months after the date of the enactment of this Act,20the Secretary shall, through the rulemaking process21consistent with subsection (a), adopt an initial set of22benefit standards.23(2) PERIODIC UPDATING STANDARDS.Under24subsection (a), the Secretary shall provide for the

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371periodic updating of the benefit standards previously

2adopted under this section.3(3) REQUIREMENT.The Secretary may not4adopt any benefit standards for an essential benefitspackage or for level of cost-sharing that are incon6sistent with the requirements for such a package or7level under sections 122 and 123(b)(5).8Subtitle DAdditional Consumer

9ProtectionsSEC. 131. REQUIRING FAIR MARKETING PRACTICES BY11HEALTH INSURERS.12The Commissioner shall establish uniform marketing13standards that all insured QHBP offering entities shall14meet.SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS16

MECHANISMS.17(a) IN GENERAL.A QHBP offering entity shall pro18vide for timely grievance and appeals mechanisms that the19Commissioner shall establish.(b) INTERNAL CLAIMS AND APPEALS PROCESS. 21Under a qualified health benefits plan the QHBP offering22entity shall provide an internal claims and appeals process23that initially incorporates the claims and appeals proce24dures (including urgent claims) set forth at section2560.5031 of title 29, Code of Federal Regulations, as

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381published on November 21, 2000 (65 Fed. Reg. 70246)

2and shall update such process in accordance with any3standards that the Commissioner may establish.4(c) EXTERNAL REVIEW PROCESS. (1) IN GENERAL.The Commissioner shall es6tablish an external review process (including proce7dures for expedited reviews of urgent claims) that8provides for an impartial, independent, and de novo9

review of denied claims under this division.(2) REQUIRING FAIR GRIEVANCE AND APPEALS11MECHANISMS.A determination made, with respect12to a qualified health benefits plan offered by a13QHBP offering entity, under the external review14process established under this subsection shall bebinding on the plan and the entity.16(d) CONSTRUCTION.Nothing in this section shall be

17construed as affecting the availability of judicial review18under State law for adverse decisions under subsection (b)19or (c), subject to section 151.SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND21PLAN DISCLOSURE.22(a) ACCURATE AND TIMELY DISCLOSURE. 23(1) IN GENERAL.A qualified health benefits24plan shall comply with standards established by theCommissioner for the accurate and timely disclosure

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391of plan documents, plan terms and conditions,

2claims payment policies and practices, periodic fi3nancial disclosure, data on enrollment, data on4disenrollment, data on the number of claims denials,data on rating practices, information on cost-sharing6and payments with respect to any out-of-network7coverage, and other information as determined ap8propriate by the Commissioner. The Commissioner9

shall require that such disclosure be provided inplain language.11(2) PLAIN LANGUAGE.In this subsection, the12term plain language means language that the in13tended audience, including individuals with limited14English proficiency, can readily understand and usebecause that language is clean, concise, well-orga16nized, and follows other best practices of plain lan17guage writing.18

(3) GUIDANCE.The Commissioner shall de19velop and issue guidance on best practices of plainlanguage writing.21(b) CONTRACTING REIMBURSEMENT.A qualified22health benefits plan shall comply with standards estab23lished by the Commissioner to ensure transparency to each24health care provider relating to reimbursement arrangementsbetween such plan and such provider.

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40

1(c) ADVANCE NOTICE OF PLAN CHANGES.A2change in a qualified health benefits plan shall not be3made without such reasonable and timely advance notice4to enrollees of such change.SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS6PLANS NOT OFFERED THROUGH THE7

HEALTH INSURANCE EXCHANGE.8The requirements of the previous provisions of this9subtitle shall apply to qualified health benefits plans thatare not being offered through the Health Insurance Ex11change only to the extent specified by the Commissioner.12SEC. 135. TIMELY PAYMENT OF CLAIMS.13A QHBP offering entity shall comply with the re14quirements of section 1857(f) of the Social Security Actwith respect to a qualified health benefits plan it offers

16in the same manner an Medicare Advantage organization17is required to comply with such requirements with respect18to a Medicare Advantage plan it offers under part C of19Medicare.SEC. 136. STANDARDIZED RULES FOR COORDINATION AND21SUBROGATION OF BENEFITS.22The Commissioner shall establish standards for the23coordination and subrogation of benefits and reimburse24ment of payments in cases involving individuals and multipleplan coverage.

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41

SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICA

TION.

A QHBP offering entity is required to comply withstandards for electronic financial and administrativetransactions under section 1173A of the Social SecurityAct, added by section 163(a).

Subtitle EGovernance

SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH

CHOICES COMMISSIONER.

(a) IN GENERAL.There is hereby established, as anindependent agency in the executive branch of the Government,a Health Choices Administration (in this divisionreferred to as the Administration).(b) COMMISSIONER. (1) IN GENERAL.The Administration shall beheaded by a Health Choices Commissioner (in thisdivision referred to as the Commissioner) whoshall be appointed by the President, by and with the

advice and consent of the Senate.(2) COMPENSATION; ETC.The provisions ofparagraphs (2), (5) and (7) of subsection (a) (relatingto compensation, terms, general powers, rule-making, and delegation) of section 702 of the SocialSecurity Act (42 U.S.C. 902) shall apply to theCommissioner and the Administration in the samemanner as such provisions apply to the Commisf:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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421sioner of Social Security and the Social Security Ad2

ministration.3SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.4(a) DUTIES.The Commissioner is responsible forcarrying out the following functions under this division:6(1) QUALIFIED PLAN STANDARDS.The estab7lishment of qualified health benefits plan standards8under this title, including the enforcement of such9

standards in coordination with State insurance regulatorsand the Secretaries of Labor and the Treas11ury.12(2) HEALTH INSURANCE EXCHANGE.The es13tablishment and operation of a Health Insurance14Exchange under subtitle A of title II.(3) INDIVIDUAL AFFORDABILITY CREDITS. 16The administration of individual affordability credits17under subtitle C of title II, including determination

18of eligibility for such credits.19(4) ADDITIONAL FUNCTIONS.Such additionalfunctions as may be specified in this division.21(b) PROMOTING ACCOUNTABILITY. 22(1) IN GENERAL.The Commissioner shall un23dertake activities in accordance with this subtitle to24promote accountability of QHBP offering entities inmeeting Federal health insurance requirements, re-

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431gardless of whether such accountability is with re2

spect to qualified health benefits plans offered3through the Health Insurance Exchange or outside4of such Exchange.(2) COMPLIANCE EXAMINATION AND AUDITS. 6(A) IN GENERAL.The commissioner7shall, in coordination with States, conduct au8dits of qualified health benefits plan compliance9

with Federal requirements. Such audits mayinclude random compliance audits and targeted11audits in response to complaints or other sus12pected non-compliance.13(B) RECOUPMENT OF COSTS IN CONNEC14TION WITH EXAMINATION AND AUDITS.TheCommissioner is authorized to recoup from16qualified health benefits plans reimbursement17for the costs of such examinations and audit of

18such QHBP offering entities.19(c) DATA COLLECTION.The Commissioner shallcollect data for purposes of carrying out the Commis21sioners duties, including for purposes of promoting qual22ity and value, protecting consumers, and addressing dis23parities in health and health care and may share such data24with the Secretary of Health and Human Services.(d) SANCTIONS AUTHORITY.

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44

1(1) IN GENERAL.In the case that the Com2missioner determines that a QHBP offering entity3violates a requirement of this title, the Commis4sioner may, in coordination with State insuranceregulators and the Secretary of Labor, provide, in6addition to any other remedies authorized by law,7for any of the remedies described in paragraph (2).8

(2) REMEDIES.The remedies described in this9

paragraph, with respect to a qualified health benefitsplan offered by a QHBP offering entity, are 11(A) civil money penalties of not more than12the amount that would be applicable under13similar circumstances for similar violations14under section 1857(g) of the Social SecurityAct;

16(B) suspension of enrollment of individuals17under such plan after the date the Commis18sioner notifies the entity of a determination19under paragraph (1) and until the Commissioneris satisfied that the basis for such deter21mination has been corrected and is not likely to22recur;23(C) in the case of an Exchange-partici24pating health benefits plan, suspension of paymentto the entity under the Health Insurance

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451Exchange for individuals enrolled in such plan

2after the date the Commissioner notifies the en3tity of a determination under paragraph (1)4and until the Secretary is satisfied that thebasis for such determination has been corrected6and is not likely to recur; or7(D) working with State insurance regu8lators to terminate plans for repeated failure by9

the offering entity to meet the requirements ofthis title.11(e) STANDARD DEFINITIONS OF INSURANCE AND12MEDICAL TERMS.The Commissioner shall provide for13the development of standards for the definitions of terms14used in health insurance coverage, including insurance-relatedterms.16(f) EFFICIENCY IN ADMINISTRATION.The Commis17

sioner shall issue regulations for the effective and efficient18administration of the Health Insurance Exchange and af19fordability credits under subtitle C, including, with respectto the determination of eligibility for affordability credits,21the use of personnel who are employed in accordance with22the requirements of title 5, United States Code, to carry23out the duties of the Commissioner or, in the case of sec24tions 208 and 241(b)(2), the use of State personnel whoare employed in accordance with standards prescribed by

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461the Office of Personnel Management pursuant to section

2208 of the Intergovernmental Personnel Act of 1970 (423U.S.C. 4728).4SEC. 143. CONSULTATION AND COORDINATION.(a) CONSULTATION.In carrying out the Commis6sioners duties under this division, the Commissioner, as7appropriate, shall consult with at least with the following:8(1) The National Association of Insurance

9Commissioners, State attorneys general, and Stateinsurance regulators, including concerning the11standards for insured qualified health benefits plans12under this title and enforcement of such standards.13(2) Appropriate State agencies, specifically con14cerning the administration of individual affordabilitycredits under subtitle C of title II and the offering16of Exchange-participating health benefits plans, to

17Medicaid eligible individuals under subtitle A of such18title.19(3) Other appropriate Federal agencies.(4) Indian tribes and tribal organizations.21(5) The National Association of Insurance22Commissioners for purposes of using model guide23lines established by such association for purposes of24subtitles B and D.(b) COORDINATION.

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47

1(1) IN GENERAL.In carrying out the func2tions of the Commissioner, including with respect to3the enforcement of the provisions of this division,4the Commissioner shall work in coordination with5existing Federal and State entities to the maximum6extent feasible consistent with this division and in a7

manner that prevents conflicts of interest in duties8and ensures effective enforcement.9(2) UNIFORM STANDARDS.The Commissioner,10in coordination with such entities, shall seek to11achieve uniform standards that adequately protect12consumers in a manner that does not unreasonably13affect employers and insurers.

14SEC. 144. HEALTH INSURANCE OMBUDSMAN.15(a) IN GENERAL.The Commissioner shall appoint16within the Health Choices Administration a Qualified17Health Benefits Plan Ombudsman who shall have exper18tise and experience in the fields of health care and edu19cation of (and assistance to) individuals.20(b) DUTIES.The Qualified Health Benefits Plan21Ombudsman shall, in a linguistically appropriate man22ner 23(1) receive complaints, grievances, and requests24for information submitted by individuals;

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481(2) provide assistance with respect to com2

plaints, grievances, and requests referred to in para3graph (1), including 4(A) helping individuals determine the rel5evant information needed to seek an appeal of6a decision or determination;7(B) assistance to such individuals with any8problems arising from disenrollment from such9

a plan;10(C) assistance to such individuals in choos11ing a qualified health benefits plan in which to12enroll; and13(D) assistance to such individuals in pre14senting information under subtitle C (relating15to affordability credits); and16(3) submit annual reports to Congress and the

17Commissioner that describe the activities of the Om18budsman and that include such recommendations for19improvement in the administration of this division as20the Ombudsman determines appropriate. The Om21budsman shall not serve as an advocate for any in22creases in payments or new coverage of services, but23may identify issues and problems in payment or cov24erage policies.

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501(1) IN GENERAL.In the case of health insur2

ance coverage offered through the Health Insurance3Exchange 4(A) the requirements of this title do notsupercede any requirements (including require6ments relating to genetic information non7discrimination and mental health) applicable8under title XXVII of the Public Health Service9Act or under State law, except insofar as such

requirements prevent the application of a re11quirement of this division, as determined by the12Commissioner; and13(B) individual rights and remedies under14State laws shall apply.(2) CONSTRUCTION.In the case of coverage16described in paragraph (1), nothing in such para17graph shall be construed as preventing the applica18tion of rights and remedies under State laws with

19respect to any requirement referred to in paragraph(1)(A).21SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.22(a) IN GENERAL.Except as otherwise explicitly per23mitted by this Act and by subsequent regulations con24sistent with this Act, all health care and related services(including insurance coverage and public health activities)

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521any act or omission the employee reasonably believes

2to be a violation of any provision of this Act or any3order, rule, or regulation promulgated under this4Act;(2) testified or is about to testify in a pro6ceeding concerning such violation;7(3) assisted or participated or is about to assist8or participate in such a proceeding; or

9(4) objected to, or refused to participate in, anyactivity, policy, practice, or assigned task that the11employee (or other such person) reasonably believed12to be in violation of any provision of this Act or any13order, rule, or regulation promulgated under this14Act.(b) ENFORCEMENT ACTION.An employee covered16

by this section who alleges discrimination by an employer17in violation of subsection (a) may bring an action governed18by the rules, procedures, legal burdens of proof, and rem19edies set forth in section 40(b) of the Consumer ProductSafety Act (15 U.S.C. 2087(b)).21(c) EMPLOYER DEFINED.As used in this section,22the term employer means any person (including one or23more individuals, partnerships, associations, corporations,24trusts, professional membership organization including acertification, disciplinary, or other professional body, unin

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531corporated organizations, nongovernmental organizations,

2or trustees) engaged in profit or nonprofit business or in3dustry whose activities are governed by this Act, and any4agent, contractor, subcontractor, grantee, or consultant ofsuch person.6(d) RULE OF CONSTRUCTION.The rule of construc7tion set forth in section 20109(h) of title 49, United8States Code, shall also apply to this section.9

SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.11Nothing in this division shall be construed to alter12of supercede any statutory or other obligation to engage13in collective bargaining over the terms and conditions of14employment related to health care.SEC. 155. SEVERABILITY.16If any provision of this Act, or any application of such17

provision to any person or circumstance, is held to be un18constitutional, the remainder of the provisions of this Act19and the application of the provision to any other personor circumstance shall not be affected.21Subtitle GEarly Investments22SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.23(a) GROUP HEALTH INSURANCE COVERAGE.Title24XXVII of the Public Health Service Act is amended byinserting after section 2713 the following new section:

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541SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

2(a) IN GENERAL.Each health insurance issuer3that offers health insurance coverage in the small or large4group market shall provide that for any plan year in whichthe coverage has a medical loss ratio below a level specified6by the Secretary, the issuer shall provide in a manner7specified by the Secretary for rebates to enrollees of pay8ment sufficient to meet such loss ratio. Such methodology

9shall be set at the highest level medical loss ratio possiblethat is designed to ensure adequate participation by11issuers, competition in the health insurance market, and12value for consumers so that their premiums are used for13services.14(b) UNIFORM DEFINITIONS.The Secretary shallestablish a uniform definition of medical loss ratio and16

methodology for determining how to calculate the medical17loss ratio. Such methodology shall be designed to take into18account the special circumstances of smaller plans, dif19ferent types of plans, and newer plans..(b) INDIVIDUAL HEALTH INSURANCE COVERAGE. 21Such title is further amended by inserting after section222753 the following new section:23SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.24The provisions of section 2714 shall apply to healthinsurance coverage offered in the individual market in the

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551same manner as such provisions apply to health insurance

2coverage offered in the small or large group market..3(c) IMMEDIATE IMPLEMENTATION.The amend4ments made by this section shall apply in the group and5individual market for plan years beginning on or after6January 1, 2011.7SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.8

(a) CLARIFICATION REGARDING APPLICATION OF9GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH10INSURANCE COVERAGE.Section 2742 of the Public11Health Service Act (42 U.S.C. 300gg42) is amended 12(1) in its heading, by inserting AND CON13TINUATION IN FORCE, INCLUDING PROHIBI14TION OF RESCISSION, after GUARANTEED RE15NEWABILITY; and16

(2) in subsection (a), by inserting , including17without rescission, after continue in force.18(b) SECRETARIAL GUIDANCE REGARDING RESCIS19SIONS.Section 2742 of such Act (42 U.S.C. 300gg42)20is amended by adding at the end the following:21(f) RESCISSION.A health insurance issuer may re22scind health insurance coverage only upon clear and con23vincing evidence of fraud described in subsection (b)(2).24The Secretary, no later than July 1, 2010, shall issue

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561guidance implementing this requirement, including proce2

dures for independent, external third party review..3(c) OPPORTUNITY FOR INDEPENDENT, EXTERNAL4THIRD PARTY REVIEW IN CERTAIN CASES.Subpart 1of part B of title XXVII of such Act (42 U.S.C. 300gg 641 et seq.) is amended by adding at the end the following:7SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL8THIRD PARTY REVIEW IN CASES OF RESCIS9

SION.(a) NOTICE AND REVIEW RIGHT.If a health in11surance issuer determines to rescind health insurance cov12erage for an individual in the individual market, before13such rescission may take effect the issuer shall provide the14individual with notice of such proposed rescission and anopportunity for a review of such determination by an inde16pendent, external third party under procedures specified17by the Secretary under section 2742(f).18

(b) INDEPENDENT DETERMINATION.If the indi19vidual requests such review by an independent, externalthird party of a rescission of health insurance coverage,21the coverage shall remain in effect until such third party22determines that the coverage may be rescinded under the23guidance issued by the Secretary under section 2742(f)..24(d) EFFECTIVE DATE.The amendments made bythis section shall apply on and after October 1, 2010, with

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571respect to health insurance coverage issued before, on, or

2after such date.3SEC. 163. ADMINISTRATIVE SIMPLIFICATION.4(a) STANDARDIZING ELECTRONIC ADMINISTRATIVE5TRANSACTIONS. 6(1) IN GENERAL.Part C of title XI of the So7cial Security Act (42 U.S.C. 1320d et seq.) is8

amended by inserting after section 1173 the fol9lowing new section:10SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE11TRANSACTIONS.12(a) STANDARDS FOR FINANCIAL AND ADMINISTRA13TIVE TRANSACTIONS. 14(1) IN GENERAL.The Secretary shall adopt15and regularly update standards consistent with the

16goals described in paragraph (2).17(2) GOALS FOR FINANCIAL AND ADMINISTRA18TIVE TRANSACTIONS.The goals for standards19under paragraph (1) are that such standards shall 20(A) be unique with no conflicting or re21dundant standards;22(B) be authoritative, permitting no addi23tions or constraints for electronic transactions,24including companion guides;

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581(C) be comprehensive, efficient and ro2

bust, requiring minimal augmentation by paper3transactions or clarification by further commu4nications;(D) enable the real-time (or near real-6time) determination of an individuals financial7responsibility at the point of service and, to the8extent possible, prior to service, including9

whether the individual is eligible for a specificservice with a specific physician at a specific fa11cility, which may include utilization of a ma12chine-readable health plan beneficiary identi13fication card;14(E) enable, where feasible, near real-timeadjudication of claims;16(F) provide for timely acknowledgment,17response, and status reporting applicable to any18

electronic transaction deemed appropriate by19the Secretary;(G) describe all data elements (such as21reason and remark codes) in unambiguous22terms, not permit optional fields, require that23data elements be either required or conditioned24upon set values in other fields, and prohibit additionalconditions; and

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591(H) harmonize all common data elements

2across administrative and clinical transaction3standards.4(3) TIME FOR ADOPTION.Not later than 25years after the date of implementation of the X126Version 5010 transaction standards implemented7under this part, the Secretary shall adopt standards

8under this section.9(4) REQUIREMENTS FOR SPECIFIC STAND10ARDS.The standards under this section shall be11developed, adopted and enforced so as to 12(A) clarify, refine, complete, and expand,13as needed, the standards required under section141173;

15(B) require paper versions of standard16ized transactions to comply with the same17standards as to data content such that a fully18compliant, equivalent electronic transaction can19be populated from the data from a paper20version;21(C) enable electronic funds transfers, in22order to allow automated reconciliation with the23related health care payment and remittance ad24vice;

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601(D) require timely and transparent claim

2and denial management processes, including3tracking, adjudication, and appeal processing ;4(E) require the use of a standard elec5tronic transaction with which health care pro6viders may quickly and efficiently enroll with a7health plan to conduct the other electronic8transactions provided for in this part; and

9(F) provide for other requirements relat10ing to administrative simplification as identified11by the Secretary, in consultation with stake12holders.13(5) BUILDING ON EXISTING STANDARDS.In14developing the standards under this section, the Sec15retary shall build upon existing and planned stand16ards.17

(6) IMPLEMENTATION AND ENFORCEMENT. 18Not later than 6 months after the date of the enact19ment of this section, the Secretary shall submit to20the appropriate committees of Congress a plan for21the implementation and enforcement, by not later22than 5 years after such date of enactment, of the23standards under this section. Such plan shall in24clude

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611(A) a process and timeframe with mile2

stones for developing the complete set of stand3ards;4(B) an expedited upgrade program for5continually developing and approving additions6and modifications to the standards as often as7annually to improve their quality and extend8their functionality to meet evolving require9

ments in health care;10(C) programs to provide incentives for,11and ease the burden of, implementation for cer12tain health care providers, with special consid13eration given to such providers serving rural or14underserved areas and ensure coordination with15standards, implementation specifications, and16certification criteria being adopted under the

17HITECH Act;18(D) programs to provide incentives for,19and ease the burden of, health care providers20who volunteer to participate in the process of21setting standards for electronic transactions;22(E) an estimate of total funds needed to23ensure timely completion of the implementation24plan; and

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631and from other inappropriate uses, as defined by the

2Secretary..3(2) DEFINITIONS.Section 1171 of such Act4(42 U.S.C. 1320d) is amended 5(A) in paragraph (7), by striking with6reference to and all that follows and inserting7with reference to a transaction or data ele8

ment of health information in section 11739means implementation specifications, certifi10cation criteria, operating rules, messaging for11mats, codes, and code sets adopted or estab12lished by the Secretary for the electronic ex13change and use of information; and14(B) by adding at the end the following new15paragraph:16(9) OPERATING RULES.The term operating

17rules means business rules for using and processing18transactions. Operating rules should address the fol19lowing:20(A) Requirements for data content using21available and established national standards.22(B) Infrastructure requirements that es23tablish best practices for streamlining data flow24to yield timely execution of transactions.

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651(i) by striking or is engaged and in2

serting and is engaged; and3(ii) by inserting (other than as a4business associate for a covered entity) 5after for a financial institution.6(B) EFFECTIVE DATE.The amendments7made by paragraph (1) shall apply to trans8actions occurring on or after such date (not

9later than 6 months after the date of the enact10ment of this Act) as the Secretary of Health11and Human Services shall specify.12SEC. 164. REINSURANCE PROGRAM FOR RETIREES.13(a) ESTABLISHMENT. 14(1) IN GENERAL.Not later than 90 days after15the date of the enactment of this Act, the Secretary

16of Health and Human Services shall establish a tem17porary reinsurance program (in this section referred18to as the reinsurance program) to provide reim19bursement to assist participating employment-based20plans with the cost of providing health benefits to21retirees and to eligible spouses, surviving spouses22and dependents of such retirees.23(2) DEFINITIONS.For purposes of this sec24tion:

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671(ii) is not eligible for coverage under

2title XVIII of the Social Security Act; and3(iii) is not an active employee of an4employer maintaining the plan or of anyemployer that makes or has made substan6tial contributions to fund such plan.7(E) The term Secretary means Sec8retary of Health and Human Services.9

(b) PARTICIPATION.To be eligible to participate inthe reinsurance program, an eligible employment-based

11plan shall submit to the Secretary an application for par12ticipation in the program, at such time, in such manner,13and containing such information as the Secretary shall re14quire.(c) PAYMENT. 16(1) SUBMISSION OF CLAIMS. 17(A) IN GENERAL.Under the reinsurance

18program, a participating employment-based19plan shall submit claims for reimbursement tothe Secretary which shall contain documenta21tion of the actual costs of the items and serv22ices for which each claim is being submitted.23(B) BASIS FOR CLAIMS.Each claim sub24mitted under subparagraph (A) shall be basedon the actual amount expended by the partici

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681pating employment-based plan involved within

2the plan year for the appropriate employment3based health benefits provided to a retiree or to4the spouse, surviving spouse, or dependent of aretiree. In determining the amount of any claim6for purposes of this subsection, the partici7pating employment-based plan shall take into8account any negotiated price concessions (such

9as discounts, direct or indirect subsidies, rebates,and direct or indirect remunerations) ob11tained by such plan with respect to such health12benefits. For purposes of calculating the13amount of any claim, the costs paid by the re14tiree or by the spouse, surviving spouse, or dependentof the retiree in the form of16deductibles, co-payments, and co-insurance shall17

be included along with the amounts paid by the18participating employment-based plan.19(2) PROGRAM PAYMENTS AND LIMIT.If theSecretary determines that a participating employ21ment-based plan has submitted a valid claim under22paragraph (1), the Secretary shall reimburse such23plan for 80 percent of that portion of the costs at24tributable to such claim that exceeds $15,000, but isless than $90,000. Such amounts shall be adjusted

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691each year based on the percentage increase in the

2medical care component of the Consumer Price3Index (rounded to the nearest multiple of $1,000)4for the year involved.(3) USE OF PAYMENTS.Amounts paid to a6participating employment-based plan under this sub7section shall be used to lower the costs borne di8rectly by the participants and beneficiaries for health9

benefits provided under such plan in the form ofpremiums, co-payments, deductibles, co-insurance, or11other out-of-pocket costs. Such payments shall not12be used to reduce the costs of an employer maintain13ing the participating employment-based plan. The14Secretary shall develop a mechanism to monitor theappropriate use of such payments by such plans.16(4) APPEALS AND PROGRAM PROTECTIONS. 17

The Secretary shall establish 18(A) an appeals process to permit partici19pating employment-based plans to appeal a determinationof the Secretary with respect to21claims submitted under this section; and22(B) procedures to protect against fraud,23waste, and abuse under the program.24(5) AUDITS.The Secretary shall conduct annualaudits of claims data submitted by partici

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701pating employment-based plans under this section to

2ensure that they are in compliance with the require3ments of this section.4(d) RETIREE RESERVE TRUST FUND. 5(1) ESTABLISHMENT. 6(A) IN GENERAL.There is established in7the Treasury of the United States a trust fund8

to be known as theRetiree Reserve Trust9

Fund (referred to in this section as the Trust10Fund), that shall consist of such amounts as11may be appropriated or credited to the Trust12Fund as provided for in this subsection to en13able the Secretary to carry out the reinsurance14program. Such amounts shall remain available15

until expended.16(B) FUNDING.There are hereby appro17priated to the Trust Fund, out of any moneys18in the Treasury not otherwise appropriated, an19amount requested by the Secretary as necessary20to carry out this section, except that the total21of all such amounts requested shall not exceed22$10,000,000,000.23(C) APPROPRIATIONS FROM THE TRUST24FUND.

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72

1TITLE IIHEALTH INSURANCE2EXCHANGE AND RELATED3PROVISIONS4Subtitle AHealth InsuranceExchange6SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EX7CHANGE; OUTLINE OF DUTIES; DEFINITIONS.

8(a) ESTABLISHMENT.There is established within9the Health Choices Administration and under the directionof the Commissioner a Health Insurance Exchange11in order to facilitate access of individuals and employers,12through a transparent process, to a variety of choices of13affordable, quality health insurance coverage, including a14public health insurance option.

(b) OUTLINE OF DUTIES OF COMMISSIONER.In ac16cordance with this subtitle and in coordination with appro17priate Federal and State officials as provided under sec18tion 143(b), the Commissioner shall 19(1) under section 204 establish standards for,accept bids from, and negotiate and enter into con21tracts with, QHBP offering entities for the offering22of health benefits plans through the Health Insur23ance Exchange, with different levels of benefits re24quired under section 203, and including with respectto oversight and enforcement;

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741Exchange-participating health benefits plan and,

2with respect to family coverage, includes dependents3of such individual.4(2) EXCHANGE-ELIGIBLE EMPLOYER.Theterm Exchange-eligible employer means an em6ployer that is eligible under this section to enroll7through the Health Insurance Exchange employees8of the employer (and their dependents) in Exchange-

9eligible health benefits plans.(3) EMPLOYMENT-RELATED DEFINITIONS. 11The terms employer, employee, full-time em12ployee, and part-time employee have the mean13ings given such terms by the Commissioner for pur14poses of this division.(c) TRANSITION.Individuals and employers shall16only be eligible to enroll or participate in the Health Insur17ance Exchange in accordance with the following transition18

schedule:19(1) FIRST YEAR.In Y1 (as defined in section100(c)) 21(A) individuals described in subsection22(d)(1), including individuals described in para23graphs (3) and (4) of subsection (d); and24(B) smallest employers described in subsection(e)(1).

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751(2) SECOND YEAR.In Y2

2(A) individuals and employers described in3paragraph (1); and4(B) smaller employers described in sub5section (e)(2).6(3) THIRD AND SUBSEQUENT YEARS.In Y37and subsequent years 8

(A) individuals and employers described in9paragraph (2); and10(B) larger employers as permitted by the11Commissioner under subsection (e)(3).12(d) INDIVIDUALS. 13(1) INDIVIDUAL DESCRIBED.Subject to the14succeeding provisions of this subsection, an indi15

vidual described in this paragraph is an individual16who 17(A) is not enrolled in coverage described in18subparagraphs (C) through (F) of paragraph19(2); and20(B) is not enrolled in coverage as a full-21time employee (or as a dependent of such an22employee) under a group health plan if the cov23erage and an employer contribution under the24plan meet the requirements of section 312.

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761For purposes of subparagraph (B), in the case of an

2individual who is self-employed, who has at least 13employee, and who meets the requirements of section4312, such individual shall be deemed a full-time employeedescribed in such subparagraph.6(2) ACCEPTABLE COVERAGE.For purposes of7this division, the term acceptable coverage means8

any of the following:9(A) QUALIFIED HEALTH BENEFITS PLANCOVERAGE.Coverage under a qualified health11benefits plan.12(B) GRANDFATHERED HEALTH INSURANCE13COVERAGE; COVERAGE UNDER CURRENT GROUP14HEALTH PLAN.Coverage under a grand-fathered health insurance coverage (as defined

16in subsection (a) of section 102) or under a17current group health plan (described in sub18section (b) of such section).19(C) MEDICARE.Coverage under part A oftitle XVIII of the Social Security Act.21(D) MEDICAID.Coverage for medical as22sistance under title XIX of the Social Security23Act, excluding such coverage that is only avail24able because of the application of subsection(u), (z), or (aa) of section 1902 of such Act

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771(E) MEMBERS OF THE ARMED FORCES

2AND DEPENDENTS (INCLUDING TRICARE). 3Coverage under chapter 55 of title 10, United4States Code, including similar coverage furnishedunder section 1781 of title 38 of such6Code.7(F) VA.Coverage under the veterans8

health care program under chapter 17 of title938, United States Code, but only if the coveragefor the individual involved is determined11by the Commissioner in coordination with the12Secretary of Treasury to be not less than a level13specified by the Commissioner and Secretary of14Veterans Affairs, in coordination with the Secretaryof Treasury, based on the individuals

16priority for services as provided under section171705(a) of such title.18(G) OTHER COVERAGE.Such other health19benefits coverage, such as a State health benefitsrisk pool, as the Commissioner, in coordina21tion with the Secretary of the Treasury, recog22nizes for purposes of this paragraph.23The Commissioner shall make determinations under24this paragraph in coordination with the Secretary ofthe Treasury.

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78

1(3) TREATMENT OF CERTAIN NON-TRADI2TIONAL MEDICAID ELIGIBLE INDIVIDUALS.An indi3vidual who is a non-traditional Medicaid eligible in4dividual (as defined in section 205(e)(4)(C)) in aState may be an Exchange-eligible individual if the6individual was enrolled in a qualified health benefits7plan, grandfathered health insurance coverage, or8current group health plan during the 6 months be9

fore the individual became a non-traditional Medicaideligible individual. During the period in which11such an individual has chosen to enroll in an Ex12change-participating health benefits plan, the indi13vidual is not also eligible for medical assistance14under Medicaid.(4) CONTINUING ELIGIBILITY PERMITTED. 16(A) IN GENERAL.Except as provided in17subparagraph (B), once an individual qualifies

18as an Exchange-eligible individual under this19subsection (including as an employee or dependentof an employee of an Exchange-eligible em21ployer) and enrolls under an Exchange-partici22pating health benefits plan through the Health23Insurance Exchange, the individual shall con24tinue to be treated as an Exchange-eligible individualuntil the individual is no longer enrolled

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791with an Exchange-participating health benefits

2plan.3(B) EXCEPTIONS. 4(i) IN GENERAL.Subparagraph (A)5shall not apply to an individual once the6individual becomes eligible for coverage 7(I) under part A of the Medicare

8program;9(II) under the Medicaid program10as a Medicaid eligible individual, ex11cept as permitted under paragraph12(3) or clause (ii); or13(III) in such other circumstances14as the Commissioner may provide.

15(ii) TRANSITION PERIOD.In the case16described in clause (i)(II), the Commis17sioner shall permit the individual to con18tinue treatment under subparagraph (A)19until such limited time as the Commis20sioner determines it is administratively fea21sible, consistent with minimizing disruption22in the individuals access to health care.23(e) EMPLOYERS.

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801(1) SMALLEST EMPLOYER.Subject to para2

graph (4), smallest employers described in this para3graph are employers with 10 or fewer employees.4(2) SMALLER EMPLOYERS.Subject to paragraph(4), smaller employers described in this para6graph are employers that are not smallest employers7described in paragraph (1) and have 20 or fewer em8ployees.9(3) LARGER EMPLOYERS. (A) IN GENERAL.Beginning with Y3, the

11Commissioner may permit employers not de12scribed in paragraph (1) or (2) to be Exchange-13eligible employers.14(B) PHASE-IN.In applying subparagraph(A), the Commissioner may phase-in the appli16cation of such subparagraph based on the num17ber of full-time employees of an employer and18such other considerations as the Commissioner19

deems appropriate.(4) CONTINUING ELIGIBILITY.Once an em21ployer is permitted to be an Exchange-eligible em22ployer under this subsection and enrolls employees23through the Health Insurance Exchange, the em24ployer shall continue to be treated as an Exchange-eligible employer for each subsequent plan year re-

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811gardless of the number of employees involved unless

2and until the employer meets the requirement of sec3tion 311(a) through paragraph (1) of such section4by offering a group health plan and not through of5fering Exchange-participating health benefits plan.6(5) EMPLOYER PARTICIPATION AND CONTRIBU7TIONS. 8(A) SATISFACTION OF EMPLOYER RESPON9SIBILITY.For any year in which an employer

10is an Exchange-eligible employer, such employer11may meet the requirements of section 312 with12respect to employees of such employer by offer13ing such employees the option of enrolling with14Exchange-participating health benefits plans15through the Health Insurance Exchange con16sistent with the provisions of subtitle B of title17

III.18(B) EMPLOYEE CHOICE.Any employee19offered Exchange-participating health benefits20plans by the employer of such employee under21subparagraph (A) may choose coverage under22any such plan. That choice includes, with re23spect to family coverage, coverage of the de24pendents of such employee.

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831(1) IN GENERAL.The Commissioner shall con2

duct a study of access to the Health Insurance Ex3change for individuals and for employers, including4individuals and employers who are not eligible andenrolled in Exchange-participating health benefits6plans. The goal of the study is to determine if there7are significant groups and types of individuals and8employers who are not Exchange eligible individuals9

or employers, but who would have improved benefitsand affordability if made eligible for coverage in the11Exchange.12(2) ITEMS INCLUDED IN STUDY.Such study13also shall examine 14(A) the terms, conditions, and affordabilityof group health coverage offered by employers16and QHBP offering entities outside of the Ex17

change compared to Exchange-participating18health benefits plans; and19(B) the affordability-test standard for accessof certain employed individuals to coverage21in the Health Insurance Exchange.22(3) REPORT.Not later than January 1 of Y3,23in Y6, and thereafter, the Commissioner shall sub24mit to Congress on the study conducted under thissubsection and shall include in such report rec-

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841ommendations regarding changes in standards for

2Exchange eligibility for for individuals and employ3ers.4SEC. 203. BENEFITS PACKAGE LEVELS.(a) IN GENERAL.The Commissioner shall specify6the benefits to be made available under Exchange-partici7pating health benefits plans during each plan year, con8sistent with subtitle C of title I and this section.9(b) LIMITATION ON HEALTH BENEFITS PLANS OFFERED

BY OFFERING ENTITIES.The Commissioner may11

not enter into a contract with a QHBP offering entity12under section 204(c) for the offering of an Exchange-par13ticipating health benefits plan in a service area unless the14following requirements are met:(1) REQUIRED OFFERING OF BASIC PLAN.The16entity offers only one basic plan for such service17area.

18(2) OPTIONAL OFFERING OF ENHANCED19PLAN.If and only if the entity offers a basic planfor such service area, the entity may offer one en21hanced plan for such area.22(3) OPTIONAL OFFERING OF PREMIUM PLAN. 23If and only if the entity offers an enhanced plan for24such service area, the entity may offer one premiumplan for such area.

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851(4) OPTIONAL OFFERING OF PREMIUM-PLUS

2PLANS.If and only if the entity offers a premium3plan for such service area, the entity may offer one4or more premium-plus plans for such area.5All such plans may be offered under a single contract with6the Commissioner.7(c) SPECIFICATION OF BENEFIT LEVELS FOR

8PLANS. 9(1) IN GENERAL.The Commissioner shall es10tablish the following standards consistent with this11subsection and title I:12(A) BASIC, ENHANCED, AND PREMIUM13PLANS.Standards for 3 levels of Exchange-14participating health benefits plans: basic, en15

hanced, and premium (in this division referred16to as a basic plan, enhanced plan, and17premium plan, respectively).18(B) PREMIUM-PLUS PLAN BENEFITS. 19Standards for additional benefits that may be20offered, consistent with this subsection and sub21title C of title I, under a premium plan (such22a plan with additional benefits referred to in23this division as a premium-plus plan) .24(2) BASIC PLAN.

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861(A) IN GENERAL.A basic plan shall offer

2the essential benefits package required under3title I for a qualified health benefits plan.4(B) TIERED COST-SHARING FOR AFFORD5ABLE CREDIT ELIGIBLE INDIVIDUALS.In the6case of an affordable credit eligible individual7(as defined in section 242(a)(1)) enrolled in an8

Exchange-participating health benefits plan, the9benefits under a basic plan are modified to pro10vide for the reduced cost-sharing for the income11tier applicable to the individual under section12244(c).13(3) ENHANCED PLAN.A enhanced plan shall14offer, in addition to the level of benefits under the15

basic plan, a lower level of cost-sharing as provided16under title I consistent with section 123(b)(5)(A).17(4) PREMIUM PLAN.A premium plan shall18offer, in addition to the level of benefits under the19basic plan, a lower level of cost-sharing as provided20under title I consistent with section 123(b)(5)(B).21(5) PREMIUM-PLUS PLAN.A premium-plus22plan is a premium plan that also provides additional23benefits, such as adult oral health and vision care,24approved by the Commissioner. The portion of the

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871premium that is attributable to such additional ben2

efits shall be separately specified.3(6) RANGE OF PERMISSIBLE VARIATION IN4COST-SHARING.The Commissioner shall establish a5permissible range of variation of cost-sharing for6each basic, enhanced, and premium plan, except with7respect to any benefit for which there is no cost-8

sharing permitted under the essential benefits pack9age. Such variation shall permit a variation of not10more than plus (or minus) 10 percent in cost-shar11ing with respect to each benefit category specified12under section 122.13(d) TREATMENT OF STATE BENEFIT MANDATES. 14Insofar as a State requires a health insurance issuer offer15ing health insurance coverage to include benefits beyond16

the essential benefits package, such requirement shall con17tinue to apply to an Exchange-participating health bene18fits plan, if the State has entered into an arrangement19satisfactory to the Commissioner to reimburse the Com20missioner for the amount of any net increase in afford21ability premium credits under subtitle C as a result of an22increase in premium in basic plans as a result of applica23tion of such requirement.

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88

SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-

PARTICIPATING HEALTH BENEFITS PLANS.

(a) CONTRACTING DUTIES.In carrying out section201(b)(1) and consistent with this subtitle:(1) OFFERING ENTITY AND PLAN STANDARDS.The Commissioner shall (A) establish standards necessary to implementthe requirements of this title and title Ifor (i) QHBP offering entities for the offering

of an Exchange-participating healthbenefits plan; and(ii) for Exchange-participating healthbenefits plans; and(B) certify QHBP offering entities andqualified health benefits plans as meeting suchstandards and requirements of this title andtitle I for purposes of this subtitle.(2) SOLICITING AND NEGOTIATING BIDS; CON-TRACTS.The Commissioner shall (A) solicit bids from QHBP offering entitiesfor the offering of Exchange-participatinghealth benefits plans;

(B) based upon a review of such bids, negotiatewith such entities for the offering ofsuch plans; andf:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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891(C) enter into contracts with such entities

2for the offering of such plans through the3Health Insurance Exchange under terms (con4sistent with this title) negotiated between theCommissioner and such entities.6(3) FAR NOT APPLICABLE.The provisions of7the Federal Acquisition Regulation shall not apply to8contracts between the Commissioner and QHBP of9

fering entities for the offering of Exchange-participatinghealth benefits plans under this title.11(b) STANDARDS FOR QHBP OFFERING ENTITIES TO12OFFER EXCHANGE-PARTICIPATING HEALTH BENEFITS13PLANS.The standards established under subsection14(a)(1)(A) shall require that, in order for a QHBP offeringentity to offer an Exchange-participating health benefits16plan, the entity must meet the following requirements:

17(1) LICENSED.The entity shall be licensed to18offer health insurance coverage under State law for19each State in which it is offering such coverage.(2) DATA REPORTING.The entity shall pro21vide for the reporting of such information as the22Commissioner may specify, including information23necessary to administer the risk pooling mechanism24described in section 206(b) and information to addressdisparities in health and health care.

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90

1(3) IMPLEMENTING AFFORDABILITY CRED2ITS.The entity shall provide for implementation of3the affordability credits provided for enrollees under4subtitle C, including the reduction in cost-sharingunder section 244(c).6(4) ENROLLMENT.The entity shall accept all7enrollments under this subtitle, subject to such ex8

ceptions (such as capacity limitations) in accordance9with the requirements under title I for a qualifiedhealth benefits plan. The entity shall notify the11Commissioner if the entity projects or anticipates12reaching such a capacity limitation that would result13in a limitation in enrollment.14(5) RISK POOLING PARTICIPATION.The entityshall participate in such risk pooling mechanism as

16the Commissioner establishes under section 206(b).17(6) ESSENTIAL COMMUNITY PROVIDERS.With18respect to the basic plan offered by the entity, the19entity shall contract for outpatient services with coveredentities (as defined in section 340B(a)(4) of the21Public Health Service Act, as in effect as of July 1,222009). The Commissioner shall specify the extent to23which and manner in which the previous sentence24shall apply in the case of a basic plan with respectto which the Commissioner determines provides sub-

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921cally renewable from term to term in the absence of

2notice of termination by either party.3(3) ENFORCEMENT OF NETWORK ADEQUACY. 4In the case of a health benefits plan of a QHBP offeringentity that uses a provider network, the con6tract under this section with the entity shall provide7that if 8(A) the Commissioner determines that

9such provider network does not meet suchstandards as the Commissioner shall establish11under section 115; and12(B) an individual enrolled in such plan re13ceives an item or service from a provider that14is not within such network;then any cost-sharing for such item or service shall16be equal to the amount of such cost-sharing that

17would be imposed if such item or service was fur18nished by a provider within such network.19(4) OVERSIGHT AND ENFORCEMENT RESPON-SIBILITIES.The Commissioner shall establish proc21esses, in coordination with State insurance regu22lators, to oversee, monitor, and enforce applicable re23quirements of this title with respect to QHBP offer24ing entities offering Exchange-participating healthbenefits plans and such plans, including the mar

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931keting of such plans. Such processes shall include

2the following:3(A) GRIEVANCE AND COMPLAINT MECHA4NISMS.The Commissioner shall establish, incoordination with State insurance regulators, a6process under which Exchange-eligible individ7uals and employers may file complaints con8cerning violations of such standards.9(B) ENFORCEMENT.In carrying out authorities

under this division relating to the11Health Insurance Exchange, the Commissioner12may impose one or more of the intermediate13sanctions described in section 142(c).14(C) TERMINATION. (i) IN GENERAL.The Commissioner16may terminate a contract with a QHBP of17fering entity under this section for the of18

fering of an Exchange-participating health19benefits plan if such entity fails to complywith the applicable requirements of this21title. Any determination by the Commis22sioner to terminate a contract shall be23made in accordance with formal investiga24tion and compliance procedures establishedby the Commissioner under which

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941(I) the Commissioner provides

2the entity with the reasonable oppor3tunity to develop and implement a4corrective action plan to correct the5deficiencies that were the basis of the6Commissioners determination; and7(II) the Commissioner provides8

the entity with reasonable notice and9opportunity for hearing (including the10right to appeal an initial decision) be11fore terminating the contract.12(ii) EXCEPTION FOR IMMINENT AND13SERIOUS RISK TO HEALTH.Clause (i)14shall not apply if the Commissioner deter15mines that a delay in termination, result16

ing from compliance with the procedures17specified in such clause prior to termi18nation, would pose an imminent and seri19ous risk to the health of individuals en20rolled under the qualified health benefits21plan of the QHBP offering entity.22(D) CONSTRUCTION.Nothing in this sub23section shall be construed as preventing the ap24plication of other sanctions under subtitle E of

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951title I with respect to an entity for a violation

2of such a requirement.3SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-EL4IGIBLE INDIVIDUALS AND EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS6PLAN.7(a) IN GENERAL. 8(1) OUTREACH.The Commissioner shall con9

duct outreach activities consistent with subsection(c), including through use of appropriate entities as11described in paragraph (4) of such subsection, to in12form and educate individuals and employers about13the Health Insurance Exchange and Exchange-par14ticipating health benefits plan options. Such outreachshall include outreach specific to vulnerable16populations, such as children, individuals with dis17abilities, individuals with mental illness, and individ18uals with other cognitive impairments.

19(2) ELIGIBILITY.The Commissioner shallmake timely determinations of whether individuals21and employers are Exchange-eligible individuals and22employers (as defined in section 202).23(3) ENROLLMENT.The Commissioner shall es24tablish and carry out an enrollment process for Exchange-eligible individuals and employers, including

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961at community locations, in accordance with sub2

section (b).3(b) ENROLLMENT PROCESS. 4(1) IN GENERAL.The Commissioner shall establisha process consistent with this title for enroll6ments in Exchange-participating health benefits7plans. Such process shall provide for enrollment8through means such as the mail, by telephone, elec9tronically, and in person.

(2) ENROLLMENT PERIODS. 11

(A) OPEN ENROLLMENT PERIOD.The12Commissioner shall establish an annual open13enrollment period during which an Exchange-el14igible individual or employer may elect to enrollin an Exchange-participating health benefits16plan for the following plan year and an enroll17ment period for affordability credits under sub18title C. Such periods shall be during September

19through November of each year, or such othertime that would maximize timeliness of income21verification for purposes of such subtitle. The22open enrollment period shall not be less than 3023days.24(B) SPECIAL ENROLLMENT.The Commissionershall also provide for special enroll-

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971ment periods to take into account special cir2

cumstances of individuals and employers, such3as an individual who 4(i) loses acceptable coverage;(ii) experiences a change in marital or6other dependent status;7(iii) moves outside the service area of8the Exchange-participating health benefits

9plan in which the individual is enrolled; or(iv) experiences a significant change11in income.12(C) ENROLLMENT INFORMATION.The13Commissioner shall provide for the broad dis14semination of information to prospective enrolleeson the enrollment process, including before16each open enrollment period. In carrying out

17the previous sentence, the Commissioner may18work with other appropriate entities to facilitate19such provision of information.(3) AUTOMATIC ENROLLMENT FOR NON-MED21ICAID ELIGIBLE INDIVIDUALS. 22(A) IN GENERAL.The Commissioner23shall provide for a process under which individ24uals who are Exchange-eligible individuals describedin subparagraph (B) are automatically

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981enrolled under an appropriate Exchange-partici2

pating health benefits plan. Such process may3involve a random assignment or some other4form of assignment that takes into account thehealth care providers used by the individual in6volved or such other relevant factors as the7Commissioner may specify.8(B) SUBSIDIZED INDIVIDUALS DE9SCRIBED.An individual described in this subparagraph

is an Exchange-eligible individual11who is either of the following:12(i) AFFORDABILITY CREDIT ELIGIBLE13INDIVIDUALS.The individual 14(I) has applied for, and been determinedeligible for, affordability16credits under subtitle C;17

(II) has not opted out from re18ceiving such affordability credit; and19(III) does not otherwise enroll inanother Exchange-participating health21benefits plan.22(ii) INDIVIDUALS ENROLLED IN A23TERMINATED PLAN.The individual is en24rolled in an Exchange-participating healthbenefits plan that is terminated (during or

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991at the end of a plan year) and who does

2not otherwise enroll in another Exchange-3participating health benefits plan.4(4) DIRECT PAYMENT OF PREMIUMS TOPLANS.Under the enrollment process, individuals6enrolled in an Exchange-partcipating health benefits7plan shall pay such plans directly, and not through8

the Commissioner or the Health Insurance Ex9change.(c) COVERAGE INFORMATION AND ASSISTANCE. 11(1) COVERAGE INFORMATION.The Commis12sioner shall provide for the broad dissemination of13information on Exchange-participating health bene14fits plans offered under this title. Such informationshall be provided in a comparative manner, and shall16include information on benefits, premiums, cost-17

sharing, quality, provider networks, and consumer18satisfaction.19(2) CONSUMER ASSISTANCE WITH CHOICE.Toprovide assistance to Exchange-eligible individuals21and employers, the Commissioner shall 22(A) provide for the operation of a toll-free23telephone hotline to respond to requests for as24sistance and maintain an Internet websitethrough which individuals may obtain informa

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1001tion on coverage under Exchange-participating

2health benefits plans and file complaints;3(B) develop and disseminate information to4Exchange-eligible enrollees on their rights andresponsibilities;6(C) assist Exchange-eligible individuals in7selecting Exchange-participating health benefits8

plans and obtaining benefits through such9plans; and(D) ensure that the Internet website de11scribed in subparagraph (A) and the informa12tion described in subparagraph (B) is developed13using plain language (as defined in section14133(a)(2)).(3) USE OF OTHER ENTITIES.In carrying out16this subsection, the Commissioner may work with

17other appropriate entities to facilitate the dissemina18tion of information under this subsection and to pro19vide assistance as described in paragraph (2).(d) SPECIAL DUTIES RELATED TO MEDICAID AND21CHIP. 22(1) COVERAGE FOR CERTAIN NEWBORNS. 23(A) IN GENERAL.In the case of a child24born in the United States who at the time ofbirth is not otherwise covered under acceptable

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1011coverage, for the period of time beginning on

2the date of birth and ending on the date the3child otherwise is covered under acceptable cov4erage (or, if earlier, the end of the month inwhich the 60-day period, beginning on the date6of birth, ends), the child shall be deemed 7(i) to be a non-traditional Medicaid el8igible individual (as defined in subsection9

(e)(5)) for purposes of this division andMedicaid; and11(ii) to have elected to enroll in Med12icaid through the application of paragraph13(3).14(B) EXTENDED TREATMENT AS TRADITIONALMEDICAID ELIGIBLE INDIVIDUAL.In16the case of a child described in subparagraph17

(A) who at the end of the period referred to in18such subparagraph is not otherwise covered19under acceptable coverage, the child shall bedeemed (until such time as the child obtains21such coverage or the State otherwise makes a22determination of the childs eligibility for med23ical assistance under its Medicaid plan pursuant24to section 1943(c)(1) of the Social SecurityAct) to be a traditional Medicaid eligible indi

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1021vidual described in section 1902(l)(1)(B) of

2such Act.3(2) CHIP TRANSITION.A child who, as of the4day before the first day of Y1, is eligible for child5health assistance under title XXI of the Social Secu6rity Act (including a child receiving coverage under7an arrangement described in section 2101(a)(2) of8

such Act) is deemed as of such first day to be an9Exchange-eligible individual unless the individual is10a traditional Medicaid eligible individual as of such11day.12(3) AUTOMATIC ENROLLMENT OF MEDICAID EL13IGIBLE INDIVIDUALS INTO MEDICAID.The Com14missioner shall provide for a process under which an15individual who is described in section 202(d)(3) and

16has not elected to enroll in an Exchange-partici17pating health benefits plan is automatically enrolled18under Medicaid.19(4) NOTIFICATIONS.The Commissioner shall20notify each State in Y1 and for purposes of section211902(gg)(1) of the Social Security Act (as added by22section 1703(a)) whether the Health Insurance Ex23change can support enrollment of children described24in paragraph (2) in such State in such year.

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1031(e) MEDICAID COVERAGE FOR MEDICAID ELIGIBLE

2INDIVIDUALS. 3(1) IN GENERAL. 4(A) CHOICE FOR LIMITED EXCHANGE-ELIGIBLEINDIVIDUALS.As part of the enrollment6process under subsection (b), the Commissioner7shall provide the option, in the case of an Ex8change-eligible individual described in section

9202(d)(3), for the individual to elect to enrollunder Medicaid instead of under an Exchange-11participating health benefits plan. Such an indi12vidual may change such election during an en13rollment period under subsection (b)(2).14(B) MEDICAID ENROLLMENT OBLIGATION.An Exchange eligible individual may16apply, in the manner described in section17

241(b)(1), for a determination of whether the18individual is a Medicaid-eligible individual. If19the individual is determined to be so eligible,the Commissioner, through the Medicaid memo21randum of understanding, shall provide for the22enrollment of the individual under the State23Medicaid plan in accordance with the Medicaid24memorandum of understanding under paragraph(4). In the case of such an enrollment,

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1041the State shall provide for the same periodic re2

determination of eligibility under Medicaid as3would otherwise apply if the individual had di4rectly applied for medical assistance to theState Medicaid agency.6(2) NON-TRADITIONAL MEDICAID ELIGIBLE IN7DIVIDUALS.In the case of a non-traditional Med8icaid eligible individual described in section9202(d)(3) who elects to enroll under Medicaid underparagraph (1)(A), the Commissioner shall provide

11for the enrollment of the individual under the State12Medicaid plan in accordance with the Medicaid13memorandum of understanding under paragraph14(4).(3) COORDINATED ENROLLMENT WITH STATE16THROUGH MEMORANDUM OF UNDERSTANDING. 17The Commissioner, in consultation with the Sec18

retary of Health and Human Services, shall enter19into a memorandum of understanding with eachState (each in this division referred to as a Med21icaid memorandum of understanding) with respect22to coordinating enrollment of individuals in Ex23change-participating health benefits plans and under24the States Medicaid program consistent with thissection and to otherwise coordinate the implementa

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1051tion of the provisions of this division with respect to

2the Medicaid program. Such memorandum shall per3mit the exchange of information consistent with the4limitations described in section 1902(a)(7) of the So5cial Security Act. Nothing in this section shall be6construed as permitting such memorandum to mod7ify or vitiate any requirement of a State Medicaid8plan.9

(4) MEDICAID ELIGIBLE INDIVIDUALS.For10

purposes of this division:11(A) MEDICAID ELIGIBLE INDIVIDUAL. 12The term Medicaid eligible individual means13an individual who is eligible for medical assist14ance under Medicaid.15(B) TRADITIONAL MEDICAID ELIGIBLE IN16DIVIDUAL.The term traditional Medicaid eli17

gible individual means a Medicaid eligible indi18vidual other than an individual who is 19(i) a Medicaid eligible individual by20reason of the application of subclause21(VIII) of section 1902(a)(10)(A)(i) of the22Social Security Act; or23(ii) a childless adult not described in24section 1902(a)(10)(A) or (C) of such Act

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1061(as in effect as of the day before the date

2of the enactment of this Act).3(C) NON-TRADITIONAL MEDICAID ELIGI4BLE INDIVIDUAL.The term non-traditionalMedicaid eligible individual means a Medicaid6eligible individual who is not a traditional Med7icaid eligible individual.8(f) EFFECTIVE CULTURALLY AND LINGUISTICALLY9

APPROPRIATE COMMUNICATION.In carrying out thissection, the Commissioner shall establish effective methods

11for communicating in plain language and a culturally and12linguistically appropriate manner.13SEC. 206. OTHER FUNCTIONS.14(a) COORDINATION OF AFFORDABILITY CREDITS. The Commissioner shall coordinate the distribution of af16fordability premium and cost-sharing credits under sub17title C to QHBP offering entities offering Exchange-par18

ticipating health benefits plans.19(b) COORDINATION OF RISK POOLING.The Commissionershall establish a mechanism whereby there is an21adjustment made of the premium amounts payable among22QHBP offering entities offering Exchange-participating23health benefits plans of premiums collected for such plans24that takes into account (in a manner specified by the Commissioner)the differences in the risk characteristics of in-

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1071dividuals and employers enrolled under the different Ex2

change-participating health benefits plans offered by such3entities so as to minimize the impact of adverse selection4of enrollees among the plans offered by such entities.(c) SPECIAL INSPECTOR GENERAL FOR THE HEALTH6INSURANCE EXCHANGE. 7(1) ESTABLISHMENT; APPOINTMENT.There is8hereby established the Office of the Special Inspec9

tor General for the Health Insurance Exchange, tobe headed by a Special Inspector General for the11Health Insurance Exchange (in this subsection re12ferred to as the Special Inspector General) to be13appointed by the President, by and with the advice14and consent of the Senate. The nomination of an individualas Special Inspector General shall be made16as soon as practicable after the establishment of the17

program under this subtitle.18(2) DUTIES.The Special Inspector General19shall (A) conduct, supervise, and coordinate au21dits, evaluations and investigations of the22Health Insurance Exchange to protect the in23tegrity of the Health Insurance Exchange, as24well as the health and welfare of participants inthe Exchange;

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1081(B) report both to the Commissioner and

2to the Congress regarding program and man3agement problems and recommendations to cor4rect them;(C) have other duties (described in para6graphs (2) and (3) of section 121 of division A7of Public Law 110343) in relation to the du8ties described in the previous subparagraphs;9and(D) have the authorities provided in sec11

tion 6 of the Inspector General Act of 1978 in12carrying out duties under this paragraph.13(3) APPLICATION OF OTHER SPECIAL INSPEC14TOR GENERAL PROVISIONS.The provisions of subsections(b) (other than paragraphs (1) and (3)), (d)16(other than paragraph (1)), and (e) of section 12117of division A of the Emergency Economic Stabiliza18tion Act of 2009 (Public Law 110343) shall apply19

to the Special Inspector General under this subsectionin the same manner as such provisions apply21to the Special Inspector General under such section.22(4) REPORTS.Not later than one year after23the confirmation of the Special Inspector General,24and annually thereafter, the Special Inspector Generalshall submit to the appropriate committees of

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1091Congress a report summarizing the activities of the

2Special Inspector General during the one year period3ending on the date such report is submitted.4(5) TERMINATION.The Office of the SpecialInspector General shall terminate five years after6the date of the enactment of this Act.7SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.8

(a) ESTABLISHMENT OF HEALTH INSURANCE EX9CHANGE TRUST FUND.There is created within theTreasury of the United States a trust fund to be known11as the Health Insurance Exchange Trust Fund (in this12section referred to as the Trust Fund), consisting of13such amounts as may be appropriated or credited to the14Trust Fund under this section or any other provision oflaw.16

(b) PAYMENTS FROM TRUST FUND.The Commis17sioner shall pay from time to time from the Trust Fund18such amounts as the Commissioner determines are nec19essary to make payments to operate the Health InsuranceExchange, including payments under subtitle C (relating21to affordability credits).22(c) TRANSFERS TO TRUST FUND. 23(1) DEDICATED PAYMENTS.There is hereby24appropriated to the Trust Fund amounts equivalentto the following:

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1101(A) TAXES ON INDIVIDUALS NOT OBTAIN2

ING ACCEPTABLE COVERAGE.The amounts re3ceived in the Treasury under section 59B of the4Internal Revenue Code of 1986 (relating to re5quirement of health insurance coverage for indi6viduals).7(B) EMPLOYMENT TAXES ON EMPLOYERS8NOT PROVIDING ACCEPTABLE COVERAGE.The9amounts received in the Treasury under section

103111(c) of the Internal Revenue Code of 198611(relating to employers electing to not provide12health benefits).13(C) EXCISE TAX ON FAILURES TO MEET14CERTAIN HEALTH COVERAGE REQUIRE15MENTS.The amounts received in the Treasury16under section 4980H(b) (relating to excise tax

17with respect to failure to meet health coverage18participation requirements).19(2) APPROPRIATIONS TO COVER GOVERNMENT20CONTRIBUTIONS.There are hereby appropriated,21out of any moneys in the Treasury not otherwise ap22propriated, to the Trust Fund, an amount equivalent23to the amount of payments made from the Trust24Fund under subsection (b) plus such amounts as are

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1111necessary reduced by the amounts deposited under

2paragraph (1).3(d) APPLICATION OF CERTAIN RULES.Rules simi4lar to the rules of subchapter B of chapter 98 of the Inter5nal Revenue Code of 1986 shall apply with respect to the6Trust Fund.7SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH8INSURANCE EXCHANGES.

9(a) IN GENERAL.If 10(1) a State (or group of States, subject to the11approval of the Commissioner) applies to the Com12missioner for approval of a State-based Health In13surance Exchange to operate in the State (or group14of States); and15(2) the Commissioner approves such State-16

based Health Insurance Exchange,17then, subject to subsections (c) and (d), the State-based18Health Insurance Exchange shall operate, instead of the19Health Insurance Exchange, with respect to such State20(or group of States). The Commissioner shall approve a21State-based Health Insurance Exchange if it meets the re22quirements for approval under subsection (b).23(b) REQUIREMENTS FOR APPROVAL.The Commis24sioner may not approve a State-based Health Insurance

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1121Exchange under this section unless the following require2

ments are met:3(1) The State-based Health Insurance Ex4change must demonstrate the capacity to and pro5vide assurances satisfactory to the Commissioner6that the State-based Health Insurance Exchange will7carry out the functions specified for the Health In8surance Exchange in the State (or States) involved,9including

10(A) negotiating and contracting with11QHBP offering entities for the offering of Ex12change-participating health benefits plan, which13satisfy the standards and requirements of this14title and title I;15(B) enrolling Exchange-eligible individuals16and employers in such State in such plans;

17(C) the establishment of sufficient local of18fices to meet the needs of Exchange-eligible in19dividuals and employers;20(D) administering affordability credits21under subtitle B using the same methodologies22(and at least the same income verification23methods) as would otherwise apply under such24subtitle and at a cost to the Federal Govern-

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1131ment which does exceed the cost to the Federal

2Government if this section did not apply; and3(E) enforcement activities consistent with4federal requirements.(2) There is no more than one Health Insur6ance Exchange operating with respect to any one7State.8(3) The State provides assurances satisfactory

9to the Commissioner that approval of such an Exchangewill not result in any net increase in expendi11tures to the Federal Government.12(4) The State provides for reporting of such in13formation as the Commissioner determines and as14surances satisfactory to the Commissioner that itwill vigorously enforce violations of applicable re16quirements.17(5) Such other requirements as the Commis18sioner may specify.

19(c) CEASING OPERATION. (1) IN GENERAL.A State-based Health Insur21ance Exchange may, at the option of each State in22volved, and only after providing timely and reason23able notice to the Commissioner, cease operation as24such an Exchange, in which case the Health InsuranceExchange shall operate, instead of such State-

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1141based Health Insurance Exchange, with respect to

2such State (or States).3(2) TERMINATION; HEALTH INSURANCE EX4CHANGE RESUMPTION OF FUNCTIONS.The Com5missioner may terminate the approval (for some or6all functions) of a State-based Health Insurance Ex7change under this section if the Commissioner deter8mines that such Exchange no longer meets the re9quirements of subsection (b) or is no longer capable10

of carrying out such functions in accordance with11the requirements of this subtitle. In lieu of termi12nating such approval, the Commissioner may tempo13rarily assume some or all functions of the State-14based Health Insurance Exchange until such time as15the Commissioner determines the State-based16Health Insurance Exchange meets such require17ments of subsection (b) and is capable of carrying18

out such functions in accordance with the require19ments of this subtitle.20(3) EFFECTIVENESS.The ceasing or termi21nation of a State-based Health Insurance Exchange22under this subsection shall be effective in such time23and manner as the Commissioner shall specify.24(d) RETENTION OF AUTHORITY.

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1151(1) AUTHORITY RETAINED.Enforcement au2

thorities of the Commissioner shall be retained by3the Commissioner.4(2) DISCRETION TO RETAIN ADDITIONAL AU5THORITY.The Commissioner may specify functions6of the Health Insurance Exchange that 7(A) may not be performed by a State-8based Health Insurance Exchange under this

9section; or10(B) may be performed by the Commis11sioner and by such a State-based Health Insur12ance Exchange.13(e) REFERENCES.In the case of a State-based14Health Insurance Exchange, except as the Commissioner15may otherwise specify under subsection (d), any references16

in this subtitle to the Health Insurance Exchange or to17the Commissioner in the area in which the State-based18Health Insurance Exchange operates shall be deemed a19reference to the State-based Health Insurance Exchange20and the head of such Exchange, respectively.21(f) FUNDING.In the case of a State-based Health22Insurance Exchange, there shall be assistance provided for23the operation of such Exchange in the form of a matching24grant with a State share of expenditures required.

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1161Subtitle BPublic Health

2Insurance Option3SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A4PUBLIC HEALTH INSURANCE OPTION AS ANEXCHANGE-QUALIFIED HEALTH BENEFITS6PLAN.7(a) ESTABLISHMENT.For years beginning with Y1,8

the Secretary of Health and Human Services (in this sub9title referred to as the Secretary) shall provide for theoffering of an Exchange-participating health benefits plan11(in this division referred to as the public health insurance12option) that ensures choice, competition, and stability of13affordable, high quality coverage throughout the United14States in accordance with this subtitle. In designing theoption, the Secretarys primary responsibility is to create16

a low-cost plan without comprimising quality or access to17care.18(b) OFFERING AS AN EXCHANGE-PARTICIPATING19HEALTH BENEFITS PLAN. (1) EXCLUSIVE TO THE EXCHANGE.The pub21lic health insurance option shall only be made avail22able through the Health Insurance Exchange.23(2) ENSURING A LEVEL PLAYING FIELD.Con24sistent with this subtitle, the public health insuranceoption shall comply with requirements that are ap

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1171plicable under this title to an Exchange-participating

2health benefits plan, including requirements related3to benefits, benefit levels, provider networks, notices,4consumer protections, and cost sharing.(3) PROVISION OF BENEFIT LEVELS.The pub6lic health insurance option 7(A) shall offer basic, enhanced, and pre8mium plans; and9

(B) may offer premium-plus plans.(c) ADMINISTRATIVE CONTRACTING.The Secretary11may enter into contracts for the purpose of performing12administrative functions (including functions described in13subsection (a)(4) of section 1874A of the Social Security14Act) with respect to the public health insurance option inthe same manner as the Secretary may enter into con16tracts under subsection (a)(1) of such section. The Sec17retary has the same authority with respect to the public

18health insurance option as the Secretary has under sub19sections (a)(1) and (b) of section 1874A of the Social SecurityAct with respect to title XVIII of such Act. Con21tracts under this subsection shall not involve the transfer22of insurance risk to such entity.23(d) OMBUDSMAN.The Secretary shall establish an24office of the ombudsman for the public health insuranceoption which shall have duties with respect to the public

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1181health insurance option similar to the duties of the Medi2

care Beneficiary Ombudsman under section 1808(c)(2) of3the Social Security Act.4(e) DATA COLLECTION.The Secretary shall collect5such data as may be required to establish premiums and6payment rates for the public health insurance option and7for other purposes under this subtitle, including to im8prove quality and to reduce racial, ethnic, and other dis9

parities in health and health care.10(f) TREATMENT OF PUBLIC HEALTH INSURANCE OP11TION.With respect to the public health insurance option,12the Secretary shall be treated as a QHBP offering entity13offering an Exchange-participating health benefits plan.14(g) ACCESS TO FEDERAL COURTS.The provisions15of Medicare (and related provisions of title II of the Social16

Security Act) relating to access of Medicare beneficiaries17to Federal courts for the enforcement of rights under18Medicare, including with respect to amounts in con19troversy, shall apply to the public health insurance option20and individuals enrolled under such option under this title21in the same manner as such provisions apply to Medicare22and Medicare beneficiaries.23SEC. 222. PREMIUMS AND FINANCING.24(a) ESTABLISHMENT OF PREMIUMS.

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1191(1) IN GENERAL.The Secretary shall establish

2geographically-adjusted premium rates for the public3health insurance option in a manner 4(A) that complies with the premium rulesestablished by the Commissioner under section6113 for Exchange-participating health benefit7plans; and8

(B) at a level sufficient to fully finance the9costs of (i) health benefits provided by the11public health insurance option; and12(ii) administrative costs related to op13erating the public health insurance option.14(2) CONTINGENCY MARGIN.In establishingpremium rates under paragraph (1), the Secretary16

shall include an appropriate amount for a contin17gency margin.18(b) ACCOUNT. 19(1) ESTABLISHMENT.There is established inthe Treasury of the United States an Account for21the receipts and disbursements attributable to the22operation of the public health insurance option, in23cluding the start-up funding under paragraph (2).24Section 1854(g) of the Social Security Act shallapply to receipts described in the previous sentence

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1201in the same manner as such section applies to pay2

ments or premiums described in such section.3(2) START-UP FUNDING. 4(A) IN GENERAL.In order to provide forthe establishment of the public health insurance6option there is hereby appropriated to the Sec7retary, out of any funds in the Treasury not8otherwise appropriated, $2,000,000,000. In9

order to provide for initial claims reserves beforethe collection of premiums, there is hereby11appropriated to the Secretary, out of any funds12in the Treasury not otherwise appropriated,13such sums as necessary to cover 90 days worth14of claims reserves based on projected enrollment.16(B) AMORTIZATION OF START-UP FUND17ING.The Secretary shall provide for the re18

payment of the startup funding provided under19subparagraph (A) to the Treasury in an amortizedmanner over the 10-year period beginning21with Y1.22(C) LIMITATION ON FUNDING.Nothing in23this section shall be construed as authorizing24any additional appropriations to the Account,other than such amounts as are otherwise pro-

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1211vided with respect to other Exchange-partici2

pating health benefits plans.3SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.4(a) RATES ESTABLISHED BY SECRETARY. (1) IN GENERAL.The Secretary shall establish6payment rates for the public health insurance option7for services and health care providers consistent with8this section and may change such payment rates in

9accordance with section 224.(2) INITIAL PAYMENT RULES. 11(A) IN GENERAL.Except as provided in12subparagraph (B) and subsection (b)(1), during13Y1, Y2, and Y3, the Secretary shall base the14payment rates under this section for servicesand providers described in paragraph (1) on the16

payment rates for similar services and providers17under parts A and B of Medicare.18(B) EXCEPTIONS. 19(i) PRACTITIONERS SERVICES.Paymentrates for practitioners services other21wise established under the fee schedule22under section 1848 of the Social Security23Act shall be applied without regard to the24provisions under subsection (f) of such sectionand the update under subsection

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1221(d)(4) under such section for a year as ap2

plied under this paragraph shall be not less3than 1 percent.4(ii) ADJUSTMENTS.The Secretarymay determine the extent to which Medi6care adjustments applicable to base pay7ment rates under parts A and B of Medi8care shall apply under this subtitle.9(3) FOR NEW SERVICES.The Secretary shallmodify payment rates described in paragraph (2) in

11order to accommodate payments for services, such as12well-child visits, that are not otherwise covered13under Medicare.14(4) PRESCRIPTION DRUGS.Payment ratesunder this section for prescription drugs that are not16paid for under part A or part B of Medicare shall17be at rates negotiated by the Secretary.

18(b) INCENTIVES FOR PARTICIPATING PROVIDERS. 19(1) INITIAL INCENTIVE PERIOD. (A) IN GENERAL.The Secretary shall21provide, in the case of services described in sub22paragraph (B) furnished during Y1, Y2, and23Y3, for payment rates that are 5 percent great24er than the rates established under subsection(a).

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1231(B) SERVICES DESCRIBED.The services

2described in this subparagraph are items and3professional services, under the public health in4surance option by a physician or other health5care practitioner who participates in both Medi6care and the public health insurance option.7(C) SPECIAL RULES.A pediatrician and8any other health care practitioner who is a type

9of practitioner that does not typically partici10pate in Medicare (as determined by the Sec11retary) shall also be eligible for the increased12payment rates under subparagraph (A).13(2) SUBSEQUENT PERIODS. Beginning with14Y4 and for subsequent years, the Secretary shall15continue to use an administrative process to set such16

rates in order to promote payment accuracy, to en17sure adequate beneficiary access to providers, and to18promote affordablility and the efficient delivery of19medical care consistent with section 221(a). Such20rates shall not be set at levels expected to increase21overall medical costs under the option beyond what22would be expected if the process under subsection23(a)(2) and paragraph (1) of this subsection were24continued.

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1241(3) ESTABLISHMENT OF A PROVIDER NET2

WORK.Health care providers participating under3Medicare are participating providers in the public4health insurance option unless they opt out in aprocess established by the Secretary.6(c) ADMINISTRATIVE PROCESS FOR SETTING7RATES.Chapter 5 of title 5, United States Code shall8apply to the process for the initial establishment of pay9

ment rates under this section but not to the specific methodologyfor establishing such rates or the calculation of11such rates.12(d) CONSTRUCTION.Nothing in this subtitle shall13be construed as limiting the Secretarys authority to cor14rect for payments that are excessive or deficient, takinginto account the provisions of section 221(a) and the16amounts paid for similar health care providers and serv17ices under other Exchange-participating health benefits

18plans.19(e) CONSTRUCTION.Nothing in this subtitle shall beconstrued as affecting the authority of the Secretary to21establish payment rates, including payments to provide for22the more efficient delivery of services, such as the initia23tives provided for under section 224.24(f) LIMITATIONS ON REVIEW.There shall be no administrativeor judicial review of a payment rate or meth

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1251odology established under this section or under section

2224.3SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIV4ERY SYSTEM REFORM.(a) IN GENERAL.For plan years beginning with Y1,6the Secretary may utilize innovative payment mechanisms7and policies to determine payments for items and services8under the public health insurance option. The payment

9mechanisms and policies under this section may includepatient-centered medical home and other care manage11ment payments, accountable care organizations, value-12based purchasing, bundling of services, differential pay13ment rates, performance or utilization based payments,14partial capitation, and direct contracting with providers.(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS. 16The Secretary shall design and implement the payment17

mechanisms and policies under this section in a manner18that 19(1) seeks to (A) improve health outcomes;21(B) reduce health disparities (including ra22cial, ethnic, and other disparities);23(C) provide efficent and affordable care;24(D) address geographic variation in theprovision of health services; or

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1261(E) prevent or manage chronic illness; and

2(2) promotes care that is integrated, patient-3centered, quality, and efficient.4(c) ENCOURAGING THE USE OF HIGH VALUE SERV5ICES.To the extent allowed by the benefit standards ap6plied to all Exchange-participating health benefits plans,7the public health insurance option may modify cost shar8ing and payment rates to encourage the use of services9

that promote health and value.10(d) NON-UNIFORMITY PERMITTED.Nothing in this11subtitle shall prevent the Secretary from varying payments12based on different payment structure models (such as ac13countable care organizations and medical homes) under14the public health insurance option for different geographic15areas.16

SEC. 225. PROVIDER PARTICIPATION.17(a) IN GENERAL.The Secretary shall establish con18ditions of participation for health care providers under the19public health insurance option.20(b) LICENSURE OR CERTIFICATION.The Secretary21shall not allow a health care provider to participate in the22public health insurance option unless such provider is ap23propriately licensed or certified under State law.24(c) PAYMENT TERMS FOR PROVIDERS.

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1271(1) PHYSICIANS.The Secretary shall provide

2for the annual participation of physicians under the3public health insurance option, for which payment4may be made for services furnished during the year,5in one of 2 classes:6(A) PREFERRED PHYSICIANS.Those phy7sicians who agree to accept the payment rate8

established under section 223 (without regard9to cost-sharing) as the payment in full.10(B) PARTICIPATING, NON-PREFERRED11PHYSICIANS.Those physicians who agree not12to impose charges (in relation to the payment13rate described in section 223 for such physi14cians) that exceed the ratio permitted under15

section 1848(g)(2)(C) of the Social Security16Act.17(2) OTHER PROVIDERS.The Secretary shall18provide for the participation (on an annual or other19basis specified by the Secretary) of health care pro20viders (other than physicians) under the public21health insurance option under which payment shall22only be available if the provider agrees to accept the23payment rate established under section 223 (without24regard to cost-sharing) as the payment in full.

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1281(d) EXCLUSION OF CERTAIN PROVIDERS.The Sec2

retary shall exclude from participation under the public3health insurance option a health care provider that is ex4cluded from participation in a Federal health care pro5gram (as defined in section 1128B(f) of the Social Secu6rity Act).7SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVI8SIONS.9Provisions of law (other than criminal law provisions)10

identified by the Secretary by regulation, in consultation11with the Inspector General of the Department of Health12and Human Services, that impose sanctions with respect13to waste, fraud, and abuse under Medicare, such as the14False Claims Act (31 U.S.C. 3729 et seq.), shall also15apply to the public health insurance option.16Subtitle CIndividual

17Affordability Credits18SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EX19CHANGE.20(a) IN GENERAL.Subject to the succeeding provi21sions of this subtitle, in the case of an affordable credit22eligible individual enrolled in an Exchange-participating23health benefits plan

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1291(1) the individual shall be eligible for, in accord2

ance with this subtitle, affordability credits con3sisting of 4(A) an affordability premium credit undersection 243 to be applied against the premium6for the Exchange-participating health benefits7plan in which the individual is enrolled; and8(B) an affordability cost-sharing credit9

under section 244 to be applied as a reductionof the cost-sharing otherwise applicable to such11plan; and12(2) the Commissioner shall pay the QHBP of13fering entity that offers such plan from the Health14Insurance Exchange Trust Fund the aggregateamount of affordability credits for all affordable16credit eligible individuals enrolled in such plan.17

(b) APPLICATION. 18(1) IN GENERAL.An Exchange eligible indi19vidual may apply to the Commissioner through theHealth Insurance Exchange or through another enti21ty under an arrangement made with the Commis22sioner, in a form and manner specified by the Com23missioner. The Commissioner through the Health24Insurance Exchange or through another public entityunder an arrangement made with the Commis

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1301sioner shall make a determination as to eligibility of

2an individual for affordability credits under this sub3title.The Commissioner shall establish a process4whereby, on the basis of information otherwise available,individuals may be deemed to be affordable6credit eligible individuals. In carrying this subtitle,7the Commissioner shall establish effective methods8that ensure that individuals with limited English

9proficiency are able to apply for affordability credits.(2) USE OF STATE MEDICAID AGENCIES.If11the Commissioner determines that a State Medicaid12agency has the capacity to make a determination of13eligibility for affordability credits under this subtitle14and under the same standards as used by the Commissioner,under the Medicaid memorandum of un16derstanding (as defined in section 205(c)(4))

17(A) the State Medicaid agency is author18ized to conduct such determinations for any Ex19change-eligible individual who requests such adetermination; and21(B) the Commissioner shall reimburse the22State Medicaid agency for the costs of con23ducting such determinations.24(3) MEDICAID SCREEN AND ENROLL OBLIGATION.In the case of an application made under

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1311paragraph (1), there shall be a determination of

2whether the individual is a Medicaid-eligible indi3vidual. If the individual is determined to be so eligi4ble, the Commissioner, through the Medicaid memo5randum of understanding, shall provide for the en6rollment of the individual under the State Medicaid7plan in accordance with the Medicaid memorandum8of understanding. In the case of such an enrollment,9the State shall provide for the same periodic redeter10

mination of eligibility under Medicaid as would oth11erwise apply if the individual had directly applied for12medical assistance to the State Medicaid agency.13(c) USE OF AFFORDABILITY CREDITS. 14(1) IN GENERAL.In Y1 and Y2 an affordable15credit eligible individual may use an affordability16credit only with respect to a basic plan.17

(2) FLEXIBILITY IN PLAN ENROLLMENT AU18THORIZED.Beginning with Y3, the Commissioner19shall establish a process to allow an affordability20credit to be used for enrollees in enhanced or pre21mium plans. In the case of an affordable credit eligi22ble individual who enrolls in an enhanced or pre23mium plan, the individual shall be responsible for24any difference between the premium for such plan

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1321and the affordable credit amount otherwise applica2

ble if the individual had enrolled in a basic plan.3(d) ACCESS TO DATA.In carrying out this subtitle,4the Commissioner shall request from the Secretary of the5Treasury consistent with section 6103 of the Internal Rev6enue Code of 1986 such information as may be required7to carry out this subtitle.8(e) NO CASH REBATES.In no case shall an afford9

able credit eligible individual receive any cash payment as10a result of the application of this subtitle.11SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.12(a) DEFINITION. 13(1) IN GENERAL.For purposes of this divi14sion, the term affordable credit eligible individual 15means, subject to subsection (b), an individual who16

is lawfully present in a State in the United States17(other than as a nonimmigrant described in a sub18paragraph (excluding subparagraphs (K), (T), (U),19and (V)) of section 101(a)(15) of the Immigration20and Nationality Act) 21(A) who is enrolled under an Exchange-22participating health benefits plan and is not en23rolled under such plan as an employee (or de24pendent of an employee) through an employer

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1331qualified health benefits plan that meets the re2

quirements of section 312;3(B) with family income below 400 percent4of the Federal poverty level for a family of thesize involved; and6(C) who is not a Medicaid eligible indi7vidual, other than an individual described in8section 202(d)(3) or an individual during a9

transition period under section 202(d)(4)(B)(ii).(2) TREATMENT OF FAMILY.Except as the11Commissioner may otherwise provide, members of12the same family who are affordable credit eligible in13dividuals shall be treated as a single affordable cred14it individual eligible for the applicable credit for sucha family under this subtitle.16(b) LIMITATIONS ON EMPLOYEE AND DEPENDENT17DISQUALIFICATION.

18(1) IN GENERAL.Subject to paragraph (2),19the term affordable credit eligible individual doesnot include a full-time employee of an employer if21the employer offers the employee coverage (for the22employee and dependents) as a full-time employee23under a group health plan if the coverage and em24ployer contribution under the plan meet the requirementsof section 312.

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1361(A) the premium percentage limit specified

2in paragraph (2) for the individual based upon3the individuals family income for the plan year;4and(B) the individuals family income for such6plan year.7(2) PREMIUM PERCENTAGE LIMITS BASED ON8

TABLE.The Commissioner shall establish premium9

percentage limits so that for individuals whose familyincome is within an income tier specified in the11table in subsection (d) such percentage limits shall12increase, on a sliding scale in a linear manner, from13the initial premium percentage to the final premium14percentage specified in such table for such incometier.

16(c) REFERENCE PREMIUM AMOUNT.The reference17premium amount specified in this subsection for a plan18year for an individual in a premium rating area is equal19to the average premium for the 3 basic plans in the areafor the plan year with the lowest premium levels. In com21puting such amount the Commissioner may exclude plans22with extremely limited enrollments.23(d) TABLE OF PREMIUM PERCENTAGE LIMITS AND24ACTUARIAL VALUE PERCENTAGES BASED ON INCOMETIER.

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137

1

(1) IN GENERAL.For purposes of this sub2

title, the table specified in this subsection is as fol

3lows:In the case of family income

(expressed as apercent of FPL) withinthe following incometier:The initial premiumpercentageis The final premiumpercentageis The actuarialvalue percentageis

133% through 150% 1.5% 3% 97%150% through 200% 3% 5% 93%200% through 250% 5% 7% 85%250% through 300% 7% 9% 78%300% through 350% 9% 10% 72%350% through 400% 10% 11% 70%

4(2) SPECIAL RULES.For purposes of applying5the table under paragraph (1) 6(A) FOR LOWEST LEVEL OF INCOME.In7the case of an individual with income that does8not exceed 133 percent of FPL, the individual9shall be considered to have income that is 133%10of FPL.11(B) APPLICATION OF HIGHER ACTUARIAL12VALUE PERCENTAGE AT TIER TRANSITION

13POINTS.If two actuarial value percentages14

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may be determined with respect to an indi15vidual, the actuarial value percentage shall be16the higher of such percentages.17SEC. 244. AFFORDABILITY COST-SHARING CREDIT.18

(a) IN GENERAL.The affordability cost-sharing19credit under this section for an affordable credit eligible20individual enrolled in an Exchange-participating health

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1381benefits plan is in the form of the cost-sharing reduction

2described in subsection (b) provided under this section for3the income tier in which the individual is classified based4on the individuals family income.(b) COST-SHARING REDUCTIONS.The Commis6sioner shall specify a reduction in cost-sharing amounts7and the annual limitation on cost-sharing specified in sec8tion 122(c)(2)(B) under a basic plan for each income tier9

specified in the table under section 243(d), with respectto a year, in a manner so that, as estimated by the Com11missioner, the actuarial value of the coverage with such12reduced cost-sharing amounts (and the reduced annual13cost-sharing limit) is equal to the actuarial value percent14age (specified in the table under section 243(d) for theincome tier involved) of the full actuarial value if there16were no cost-sharing imposed under the plan.17(c) DETERMINATION AND PAYMENT OF COST-SHAR18

ING AFFORDABILITY CREDIT.In the case of an afford19able credit eligible individual in a tier enrolled in an Exchange-participating health benefits plan offered by a21QHBP offering entity, the Commissioner shall provide for22payment to the offering entity of an amount equivalent23to the increased actuarial value of the benefits under the24plan provided under section 203(c)(2)(B) resulting fromthe reduction in cost-sharing described in subsection (b).

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139

SEC. 245. INCOME DETERMINATIONS.

(a) IN GENERAL.In applying this subtitle for anaffordability credit for an individual for a plan year, theindividuals income shall be the income (as defined in section242(c)) for the individual for the most recent taxableyear (as determined in accordance with rules of the Commissioner).The Federal poverty level applied shall be suchlevel in effect as of the date of the application.(b) PROGRAM INTEGRITY; INCOME VERIFICATIONPROCEDURES. (1) PROGRAM INTEGRITY.The Commissioner

shall take such steps as may be appropriate to ensurethe accuracy of determinations and redeterminationsunder this subtitle.(2) INCOME VERIFICATION. (A) IN GENERAL.Upon an initial applicationof an individual for an affordability creditunder this subtitle (or in applying section242(b)) or upon an application for a change inthe affordability credit based upon a significantchange in family income described in subparagraph(A) (i) the Commissioner shall requestfrom the Secretary of the Treasury the disclosure

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1401information contained in such application;

2and3(ii) the Commissioner shall use the in4formation so disclosed to verify such information.6(B) ALTERNATIVE PROCEDURES.The7Commissioner shall establish procedures for the8verification of income for purposes of this sub9title if no income tax return is available for the

most recent completed tax year.11(c) SPECIAL RULES. 12(1) CHANGES IN INCOME AS A PERCENT OF13FPL.In the case that an individuals income (ex14pressed as a percentage of the Federal poverty levelfor a family of the size involved) for a plan year is16expected (in a manner specified by the Commis17sioner) to be significantly different from the income18

(as so expressed) used under subsection (a), the19Commissioner shall establish rules requiring an individualto report, consistent with the mechanism es21tablished under paragraph (2), significant changes22in such income (including a significant change in23family composition) to the Commissioner and requir24ing the substitution of such income for the incomeotherwise applicable.

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1411(2) REPORTING OF SIGNIFICANT CHANGES IN

2INCOME.The Commissioner shall establish rules3under which an individual determined to be an af4fordable credit eligible individual would be requiredto inform the Commissioner when there is a signifi6cant change in the family income of the individual7(expressed as a percentage of the FPL for a family8of the size involved) and of the information regard9ing such change. Such mechanism shall provide for

guidelines that specify the circumstances that qual11ify as a significant change, the verifiable information12required to document such a change, and the process13for submission of such information. If the Commis14sioner receives new information from an individualregarding the family income of the individual,the16Commissioner shall provide for a redetermination of17the individuals eligibility to be an affordable credit18

eligible individual.19(3) TRANSITION FOR CHIP.In the case of achild described in section 202(d)(2), the Commis21sioner shall establish rules under which the family22income of the child is deemed to be no greater than23the family income of the child as most recently de24termined before Y1 by the State under title XXI ofthe Social Security Act.

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1421(4) STUDY OF GEOGRAPHIC VARIATION IN AP2

PLICATION OF FPL.The Commissioner shall exam3ine the feasibility and implication of adjusting the4application of the Federal poverty level under thissubtitle for different geographic areas so as to re6flect the variations in cost-of-living among different7areas within the United States. If the Commissioner8determines that an adjustment is feasible, the study9should include a methodology to make such an adjustment.

Not later than the first day of Y2, the11Commissioner shall submit to Congress a report on12such study and shall include such recommendations13as the Commissioner determines appropriate.14(d) PENALTIES FOR MISREPRESENTATION.In thecase of an individual intentionally misrepresents family in16come or the individual fails (without regard to intent) to17disclose to the Commissioner a significant change in fam18

ily income under subsection (c) in a manner that results19in the individual becoming an affordable credit eligible individualwhen the individual is not or in the amount of21the affordability credit exceeding the correct amount 22(1) the individual is liable for repayment of the23amount of the improper affordability credit; ;and24(2) in the case of such an intentional misrepresentationor other egregious circumstances specified

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1431by the Commissioner, the Commissioner may impose

2an additional penalty.3SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED4ALIENS.Nothing in this subtitle shall allow Federal payments6for affordability credits on behalf of individuals who are7not lawfully present in the United States.8

TITLE IIISHARED9

RESPONSIBILITYSubtitle AIndividual11Responsibility12SEC. 301. INDIVIDUAL RESPONSIBILITY.13For an individuals responsibility to obtain acceptable14coverage, see section 59B of the Internal Revenue Codeof 1986 (as added by section 401 of this Act).

16Subtitle BEmployer17Responsibility18PART 1HEALTH COVERAGE PARTICIPATION19REQUIREMENTSSEC. 311. HEALTH COVERAGE PARTICIPATION REQUIRE21MENTS.22An employer meets the requirements of this section23if such employer does all of the following:24(1) OFFER OF COVERAGE.The employer offerseach employee individual and family coverage

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1441under a qualified health benefits plan (or under a

2current employment-based health plan (within the3meaning of section 102(b))) in accordance with sec4tion 312.(2) CONTRIBUTION TOWARDS COVERAGE.If6an employee accepts such offer of coverage, the em7ployer makes timely contributions towards such cov8erage in accordance with section 312.9(3) CONTRIBUTION IN LIEU OF COVERAGE.

Beginning with Y2, if an employee declines such11offer but otherwise obtains coverage in an Exchange-12participating health benefits plan (other than by rea13son of being covered by family coverage as a spouse14or dependent of the primary insured), the employershall make a timely contribution to the Health In16surance Exchange with respect to each such em17ployee in accordance with section 313.18SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TO19

WARDS EMPLOYEE AND DEPENDENT COVERAGE.21(a) IN GENERAL.An employer meets the require22ments of this section with respect to an employee if the23following requirements are met:24(1) OFFERING OF COVERAGE.The employeroffers the coverage described in section 311(1) either

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1451through an Exchange-participating health benefits

2plan or other than through such a plan.3(2) EMPLOYER REQUIRED CONTRIBUTION. 4The employer timely pays to the issuer of such cov5erage an amount not less than the employer required6contribution specified in subsection (b) for such cov7erage.8(3) PROVISION OF INFORMATION.The em9

ployer provides the Health Choices Commissioner,10the Secretary of Labor, the Secretary of Health and11Human Services, and the Secretary of the Treasury,12as applicable, with such information as the Commis13sioner may require to ascertain compliance with the14requirements of this section.15(4) AUTOENROLLMENT OF EMPLOYEES.The16

employer provides for autoenrollment of the em17ployee in accordance with subsection (c).18(b) REDUCTION OF EMPLOYEE PREMIUMS THROUGH19MINIMUM EMPLOYER CONTRIBUTION. 20(1) FULL-TIME EMPLOYEES.The minimum21employer contribution described in this subsection22for coverage of a full-time employee (and, if any, the23employees spouse and qualifying children (as de24fined in section 152(c) of the Internal Revenue Code

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1461of 1986) under a qualified health benefits plan (or

2current employment-based health plan) is equal to 3(A) in case of individual coverage, not less4than 72.5 percent of the applicable premium(as defined in section 4980B(f)(4) of such6Code, subject to paragraph (2)) of the lowest7cost plan offered by the employer that is a8

qualified health benefits plan (or is such cur9rent employment-based health plan); and(B) in the case of family coverage which11includes coverage of such spouse and children,12not less 65 percent of such applicable premium13of such lowest cost plan.14(2) APPLICABLE PREMIUM FOR EXCHANGE COV-ERAGE.In this subtitle, the amount of the applica16ble premium of the lowest cost plan with respect to

17coverage of an employee under an Exchange-partici18pating health benefits plan is the reference premium19amount under section 243(c) for individual coverage(or, if elected, family coverage) for the premium rat21ing area in which the individual or family resides.22(3) MINIMUM EMPLOYER CONTRIBUTION FOR23EMPLOYEES OTHER THAN FULL-TIME EMPLOY24EES.In the case of coverage for an employee whois not a full-time employee, the amount of the min

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1471imum employer contribution under this subsection

2shall be a proportion (as determined in accordance3with rules of the Health Choices Commissioner, the4Secretary of Labor, the Secretary of Health andHuman Services, and the Secretary of the Treasury,6as applicable) of the minimum employer contribution7under this subsection with respect to a full-time em8ployee that reflects the proportion of

9(A) the average weekly hours of employmentof the employee by the employer, to11(B) the minimum weekly hours specified12by the Commissioner for an employee to be a13full-time employee.14(4) SALARY REDUCTIONS NOT TREATED AS EMPLOYERCONTRIBUTIONS.For purposes of this sec16tion, any contribution on behalf of an employee with

17respect to which there is a corresponding reduction18in the compensation of the employee shall not be19treated as an amount paid by the employer.(c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPON21SORED HEALTH BENEFITS. 22(1) IN GENERAL.The requirement of this sub23section with respect to an employer and an employee24is that the employer automatically enroll suchs employeeinto the employment-based health benefits

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1481plan for individual coverage under the plan option

2with the lowest applicable employee premium.3(2) OPT-OUT.In no case may an employer4automatically enroll an employee in a plan under5paragraph (1) if such employee makes an affirmative6election to opt out of such plan or to elect coverage7under an employment-based health benefits plan of8

fered by such employer. An employer shall provide9an employee with a 30-day period to make such an10affirmative election before the employer may auto11matically enroll the employee in such a plan.12(3) NOTICE REQUIREMENTS. 13(A) IN GENERAL.Each employer de14scribed in paragraph (1) who automatically en15rolls an employee into a plan as described in16

such paragraph shall provide the employees,17within a reasonable period before the beginning18of each plan year (or, in the case of new em19ployees, within a reasonable period before the20end of the enrollment period for such a new em21ployee), written notice of the employees rights22and obligations relating to the automatic enroll23ment requirement under such paragraph. Such24notice must be comprehensive and understood

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1491by the average employee to whom the automatic

2enrollment requirement applies.3(B) INCLUSION OF SPECIFIC INFORMA4TION.The written notice under subparagraph5(A) must explain an employees right to opt out6of being automatically enrolled in a plan and in7the case that more than one level of benefits or8

employee premium level is offered by the em9ployer involved, the notice must explain which10level of benefits and employee premium level the11employee will be automatically enrolled in the12absence of an affirmative election by the em13ployee.14SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COV15ERAGE.16

(a) IN GENERAK.A contribution is made in accord17ance with this section with respect to an employee if such18contribution is equal to an amount equal to 8 percent of19the average wages paid by the employer during the period20of enrollment (determined by taking into account all em21ployees of the employer and in such manner as the Com22missioner provides, including rules providing for the ap23propriate aggregation of related employers). Any such con24tribution

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1501(1) shall be paid to the Health Choices Com2

missioner for deposit into the Health Insurance Ex3change Trust Fund, and4(2) shall not be applied against the premium of5the employee under the Exchange-participating6health benefits plan in which the employee is en7rolled.8(b) SPECIAL RULES FOR SMALL EMPLOYERS. 9

(1) IN GENERAL.In the case of any employer10

who is a small employer for any calendar year, sub11section (a) shall be applied by substituting the appli12cable percentage determined in accordance with the13following table for 8 percent:

If the annual payroll of such employer for The applicablethe preceding calendar year: percentage is:Does not exceed $250,000 ..................................... 0 percentExceeds $250,000, but does not exceed $300,000 2 percentExceeds $300,000, but does not exceed $350,000 4 percent

Exceeds $350,000, but does not exceed $400,000 6 percent

14(2) SMALL EMPLOYER.For purposes of this15subsection, the term small employer means any16employer for any calendar year if the annual payroll17of such employer for the preceding calendar year18does not exceed $400,000.19(3) ANNUAL PAYROLL.For purposes of this20paragraph, the term annual payroll means, with21respect to any employer for any calendar year, the

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1511aggregate wages paid by the employer during such

2calendar year.3(4) AGGREGATION RULES.Related employers4and predecessors shall be treated as a single em5ployer for purposes of this subsection.6SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.7The Health Choices Commissioner (in coordination8

with the Secretary of Labor, the Secretary of Health and9Human Services, and the Secretary of the Treasury) shall10have authority to set standards for determining whether11employers or insurers are undertaking any actions to af12fect the risk pool within the Health Insurance Exchange13by inducing individuals to decline coverage under a quali14fied health benefits plan (or current employment-based15health plan (within the meaning of section 102(b)) offered

16by the employer and instead to enroll in an Exchange-par17ticipating health benefits plan. An employer violating such18standards shall be treated as not meeting the require19ments of this section.

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152

PART 2SATISFACTION OF HEALTH COVERAGE

PARTICIPATION REQUIREMENTS

SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICI

PATION REQUIREMENTS UNDER THE EM

PLOYEE RETIREMENT INCOME SECURITY

ACT OF 1974.

(a) IN GENERAL.Subtitle B of title I of the EmployeeRetirement Income Security Act of 1974 is amended

by adding at the end the following new part:PART 8NATIONAL HEALTH COVERAGEPARTICIPATION REQUIREMENTSSEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NA

TIONAL HEALTH COVERAGE PARTICIPATION

REQUIREMENTS.

(a) IN GENERAL.An employer may make an election

with the Secretary to be subject to the health coverageparticipation requirements.

(b) TIME AND MANNER.An election under subsection(a) may be made at such time and in such formand manner as the Secretary may prescribe.SEC. 802. TREATMENT OF COVERAGE RESULTING FROM

ELECTION.

(a) IN GENERAL.If an employer makes an electionto the Secretary under section 801 (1) such election shall be treated as the establishmentand maintenance of a group health plan (as

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1531defined in section 733(a)) for purposes of this title,

2subject to section 151 of the Americas Affordable3Health Choices Act of 2009, and4(2) the health coverage participation requirementsshall be deemed to be included as terms and6conditions of such plan.7(b) PERIODIC INVESTIGATIONS TO DISCOVER NON8COMPLIANCE.The Secretary shall regularly audit a rep9

resentative sampling of employers and group health plansand conduct investigations and other activities under sec11tion 504 with respect to such sampling of plans so as to12discover noncompliance with the health coverage participa13tion requirements in connection with such plans. The Sec14retary shall communicate findings of noncompliance madeby the Secretary under this subsection to the Secretary16of the Treasury and the Health Choices Commissioner.17The Secretary shall take such timely enforcement action18

as appropriate to achieve compliance.19SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.21For purposes of this part, the term health coverage22participation requirements means the requirements of23part 1 of subtitle B of title III of division A of Americas24Affordable Health Choices Act of 2009 (as in effect onthe date of the enactment of such Act).

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154

SEC. 804. RULES FOR APPLYING REQUIREMENTS.

(a) AFFILIATED GROUPS.In the case of any employerwhich is part of a group of employers who are treatedas a single employer under subsection (b), (c), (m), or

(o) of section 414 of the Internal Revenue Code of 1986,the election under section 801 shall be made by such employeras the Secretary may provide. Any such election,once made, shall apply to all members of such group.(b) SEPARATE ELECTIONS.Under regulations prescribedby the Secretary, separate elections may be madeunder section 801 with respect to

(1) separate lines of business, and(2) full-time employees and employees who arenot full-time employees.

SEC. 805. TERMINATION OF ELECTION IN CASES OF SUB

STANTIAL NONCOMPLIANCE.

The Secretary may terminate the election of any employerunder section 801 if the Secretary (in coordinationwith the Health Choices Commissioner) determines that

such employer is in substantial noncompliance with thehealth coverage participation requirements and shall referany such determination to the Secretary of the Treasuryas appropriate.SEC. 806. REGULATIONS.

The Secretary may promulgate such regulations asmay be necessary or appropriate to carry out the provi

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1551sions of this part, in accordance with section 324(a) of

2the Americas Affordable Health Choices Act of 2009. The3Secretary may promulgate any interim final rules as the4Secretary determines are appropriate to carry out thispart..6(b) ENFORCEMENT OF HEALTH COVERAGE PARTICI7PATION REQUIREMENTS.Section 502 of such Act (298U.S.C. 1132) is amended

9(1) in subsection (a)(6), by striking paragraph and all that follows through subsection (c) 11and inserting paragraph (2), (4), (5), (6), (7), (8),12(9), (10), or (11) of subsection (c); and13(2) in subsection (c), by redesignating the sec14ond paragraph (10) as paragraph (12) and by insertingafter the first paragraph (10) the following16new paragraph:

17(11) HEALTH COVERAGE PARTICIPATION RE18QUIREMENTS. 19(A) CIVIL PENALTIES.In the case ofany employer who fails (during any period with21respect to which an election under section22801(a) is in effect) to satisfy the health cov23erage participation requirements with respect to24any employee, the Secretary may assess a civilpenalty against the employer of $100 for each

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1571(I) such failure was due to rea2

sonable cause and not to willful ne3glect, and4(II) such failure is correctedduring the 30-day period beginning on6the 1st date that the employer knew,7or exercising reasonable diligence8would have known, that such failure9

existed.(iii) OVERALL LIMITATION FOR UN11INTENTIONAL FAILURES.In the case of12failures which are due to reasonable cause13and not to willful neglect, the penalty as14sessed under subparagraph (A) for failuresduring any 1-year period shall not exceed16the amount equal to the lesser of 17(I) 10 percent of the aggregate

18amount paid or incurred by the em19ployer (or predecessor employer) duringthe preceding 1-year period for21group health plans, or22(II) $500,000.23(D) ADVANCE NOTIFICATION OF FAILURE24PRIOR TO ASSESSMENT.Before a reasonabletime prior to the assessment of any penalty

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159Sec. 801. Election of employer to be subject to national health coverage participation

requirements.Sec. 802. Treatment of coverage resulting from election.Sec. 803. Health coverage participation requirements.Sec. 804. Rules for applying requirements.Sec. 805. Termination of election in cases of substantial noncompliance.Sec. 806. Regulations..1(d) EFFECTIVE DATE.The amendments made by2this section shall apply to periods beginning after Decem3ber 31, 2012.4

SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICI5PATION REQUIREMENTS UNDER THE INTER6NAL REVENUE CODE OF 1986.7(a) FAILURE TO ELECT, OR SUBSTANTIALLY COM8PLY WITH, HEALTH COVERAGE PARTICIPATION RE9QUIREMENTS.For employment tax on employers who fail10to elect, or substantially comply with, the health coverage11participation requirements described in part 1, see section123111(c) of the Internal Revenue Code of 1986 (as added

13by section 412 of this Act).14(b) OTHER FAILURES.For excise tax on other fail15ures of electing employers to comply with such require16ments, see section 4980H of the Internal Revenue Code17of 1986 (as added by section 411 of this Act).

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1601SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICI2

PATION REQUIREMENTS UNDER THE PUBLIC3HEALTH SERVICE ACT.4(a) IN GENERAL.Part C of title XXVII of the PublicHealth Service Act is amended by adding at the end6the following new section:7SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION8REQUIREMENTS.

9(a) ELECTION OF EMPLOYER TO BE SUBJECT TONATIONAL HEALTH COVERAGE PARTICIPATION REQUIRE11MENTS. 12(1) IN GENERAL.An employer may make an13election with the Secretary to be subject to the14health coverage participation requirements.(2) TIME AND MANNER.An election under16paragraph (1) may be made at such time and in

17such form and manner as the Secretary may pre18scribe.19(b) TREATMENT OF COVERAGE RESULTING FROMELECTION. 21(1) IN GENERAL.If an employer makes an22election to the Secretary under subsection (a) 23(A) such election shall be treated as the24establishment and maintenance of a grouphealth plan for purposes of this title, subject to

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1611section 151 of the Americas Affordable Health

2Choices Act of 2009, and3(B) the health coverage participation re4quirements shall be deemed to be included asterms and conditions of such plan.6(2) PERIODIC INVESTIGATIONS TO DETERMINE7COMPLIANCE WITH HEALTH COVERAGE PARTICIPA8TION REQUIREMENTS.The Secretary shall regu9larly audit a representative sampling of employers

and conduct investigations and other activities with11respect to such sampling of employers so as to dis12cover noncompliance with the health coverage par13ticipation requirements in connection with such em14ployers (during any period with respect to which anelection under subsection (a) is in effect). The Sec16retary shall communicate findings of noncompliance17made by the Secretary under this subsection to the18Secretary of the Treasury and the Health Choices19

Commissioner. The Secretary shall take such timelyenforcement action as appropriate to achieve compli21ance.22(c) HEALTH COVERAGE PARTICIPATION REQUIRE23MENTS.For purposes of this section, the term health24coverage participation requirements means the requirementsof part 1 of subtitle B of title III of division A

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1621of the Americas Affordable Health Choices Act of 2009

2(as in effect on the date of the enactment of this section).3(d) SEPARATE ELECTIONS.Under regulations pre4scribed by the Secretary, separate elections may be madeunder subsection (a) with respect to full-time employees6and employees who are not full-time employees.7(e) TERMINATION OF ELECTION IN CASES OF SUB8STANTIAL NONCOMPLIANCE.The Secretary may termi9nate the election of any employer under subsection (a) if

the Secretary (in coordination with the Health Choices11Commissioner) determines that such employer is in sub12stantial noncompliance with the health coverage participa13tion requirements and shall refer any such determination14to the Secretary of the Treasury as appropriate.(f) ENFORCEMENT OF HEALTH COVERAGE PAR16TICIPATION REQUIREMENTS. 17(1) CIVIL PENALTIES.In the case of any em18ployer who fails (during any period with respect to19

which the election under subsection (a) is in effect)to satisfy the health coverage participation require21ments with respect to any employee, the Secretary22may assess a civil penalty against the employer of23$100 for each day in the period beginning on the24date such failure first occurs and ending on the datesuch failure is corrected.

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1631(2) LIMITATIONS ON AMOUNT OF PENALTY.

2(A) PENALTY NOT TO APPLY WHERE3FAILURE NOT DISCOVERED EXERCISING REA4SONABLE DILIGENCE.No penalty shall be assessedunder paragraph (1) with respect to any6failure during any period for which it is estab7lished to the satisfaction of the Secretary that8the employer did not know, or exercising rea9sonable diligence would not have known, that

such failure existed.11(B) PENALTY NOT TO APPLY TO FAIL12URES CORRECTED WITHIN 30 DAYS.No pen13alty shall be assessed under paragraph (1) with14respect to any failure if (i) such failure was due to reason16able cause and not to willful neglect, and17(ii) such failure is corrected during18the 30-day period beginning on the 1st

19date that the employer knew, or exercisingreasonable diligence would have known,21that such failure existed.22(C) OVERALL LIMITATION FOR UNINTEN23TIONAL FAILURES.In the case of failures24which are due to reasonable cause and not towillful neglect, the penalty assessed under para-

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1641graph (1) for failures during any 1-year period

2shall not exceed the amount equal to the lesser3of 4(i) 10 percent of the aggregateamount paid or incurred by the employer6(or predecessor employer) during the pre7ceding taxable year for group health plans,8or

9(ii) $500,000.(3) ADVANCE NOTIFICATION OF FAILURE11PRIOR TO ASSESSMENT.Before a reasonable time12prior to the assessment of any penalty under para13graph (1) with respect to any failure by an em14ployer, the Secretary shall inform the employer inwriting of such failure and shall provide the em16ployer information regarding efforts and procedures17which may be undertaken by the employer to correct

18such failure.19(4) ACTIONS TO ENFORCE ASSESSMENTS. The Secretary may bring a civil action in any Dis21trict Court of the United States to collect any civil22penalty under this subsection.23(5) COORDINATION WITH EXCISE TAX. 24Under regulations prescribed in accordance with section324 of the Americas Affordable Health Choices

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1651Act of 2009, the Secretary and the Secretary of the

2Treasury shall coordinate the assessment of pen3alties under paragraph (1) in connection with fail4ures to satisfy health coverage participation require5ments with the imposition of excise taxes on such6failures under section 4980H(b) of the Internal Rev7enue Code of 1986 so as to avoid duplication of pen8alties with respect to such failures.9(6) DEPOSIT OF PENALTY COLLECTED.Any10

amount of penalty collected under this subsection11shall be deposited as miscellaneous receipts in the12Treasury of the United States.13(g) REGULATIONS.The Secretary may promulgate14such regulations as may be necessary or appropriate to15carry out the provisions of this section, in accordance with16section 324(a) of the Americas Affordable Health Choices

17Act of 2009. The Secretary may promulgate any interim18final rules as the Secretary determines are appropriate to19carry out this section..20(b) EFFECTIVE DATE.The amendments made by21subsection (a) shall apply to periods beginning after De22cember 31, 2012.

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166

SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COV

ERAGE PARTICIPATION REQUIREMENTS.

(a) ASSURING COORDINATION.The officers consistingof the Secretary of Labor, the Secretary of theTreasury, the Secretary of Health and Human Services,and the Health Choices Commissioner shall ensure,through the execution of an interagency memorandum ofunderstanding among such officers, that (1) regulations, rulings, and interpretations

issued by such officers relating to the same matterover which two or more of such officers have responsibilityunder subpart B of part 6 of subtitle B oftitle I of the Employee Retirement Income SecurityAct of 1974, section 4980H of the Internal RevenueCode of 1986, and section 2793 of the Public HealthService Act are administered so as to have the sameeffect at all times; and(2) coordination of policies relating to enforcingthe same requirements through such officers inorder to have a coordinated enforcement strategythat avoids duplication of enforcement efforts andassigns priorities in enforcement.

(b) MULTIEMPLOYER PLANS.In the case of a grouphealth plan that is a multiemployer plan (as defined insection 3(37) of the Employee Retirement Income SecurityAct of 1974), the regulations prescribed in accordancef:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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1671with subsection (a) by the officers referred to in subsection

2(a) shall provide for the application of the health coverage3participation requirements to the plan sponsor and con4tributing sponsors of such plan.5TITLE IVAMENDMENTS TO IN6TERNAL REVENUE CODE OF719868Subtitle AShared Responsibility

9PART 1INDIVIDUAL RESPONSIBILITY10SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE

11HEALTH CARE COVERAGE.12(a) IN GENERAL.Subchapter A of chapter 1 of the13Internal Revenue Code of 1986 is amended by adding at14the end the following new part:

15PART VIIIHEALTH CARE RELATED TAXES

SUBPART A. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARECOVERAGE.

16Subpart ATax on Individuals Without Acceptable17Health Care Coverage

Sec. 59B. Tax on individuals without acceptable health care coverage.18SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE19

HEALTH CARE COVERAGE.

20

(a) TAX IMPOSED.In the case of any individual21who does not meet the requirements of subsection (d) at

22any time during the taxable year, there is hereby imposed23

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a tax equal to 2.5 percent of the excess of

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1681(1) the taxpayers modified adjusted gross in2

come for the taxable year, over3(2) the amount of gross income specified in4section 6012(a)(1) with respect to the taxpayer.(b) LIMITATIONS. 6(1) TAX LIMITED TO AVERAGE PREMIUM. 7(A) IN GENERAL.The tax imposed8under subsection (a) with respect to any tax9

payer for any taxable year shall not exceed theapplicable national average premium for such11taxable year.12(B) APPLICABLE NATIONAL AVERAGE13PREMIUM. 14(i) IN GENERAL.For purposes ofsubparagraph (A), the applicable national16average premium means, with respect to

17any taxable year, the average premium (as18determined by the Secretary, in coordina19tion with the Health Choices Commissioner)for self-only coverage under a basic21plan which is offered in a Health Insur22ance Exchange for the calendar year in23which such taxable year begins.24(ii) FAILURE TO PROVIDE COVERAGEFOR MORE THAN ONE INDIVIDUAL.In the

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1691case of any taxpayer who fails to meet the

2requirements of subsection (e) with respect3to more than one individual during the tax4able year, clause (i) shall be applied bysubstituting family coverage for self-only6coverage.7(2) PRORATION FOR PART YEAR FAILURES. 8The tax imposed under subsection (a) with respect

9to any taxpayer for any taxable year shall not exceedthe amount which bears the same ratio to the11amount of tax so imposed (determined without re12gard to this paragraph and after application of para13graph (1)) as 14(A) the aggregate periods during suchtaxable year for which such individual failed to16meet the requirements of subsection (d), bears17

to18(B) the entire taxable year.19(c) EXCEPTIONS. (1) DEPENDENTS.Subsection (a) shall not21apply to any individual for any taxable year if a de22duction is allowable under section 151 with respect23to such individual to another taxpayer for any tax24able year beginning in the same calendar year assuch taxable year.

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1701(2) NONRESIDENT ALIENS.Subsection (a)

2shall not apply to any individual who is a non3resident alien.4(3) INDIVIDUALS RESIDING OUTSIDE UNITEDSTATES.Any qualified individual (as defined in6section 911(d)) (and any qualifying child residing7with such individual) shall be treated for purposes of8this section as covered by acceptable coverage during

9the period described in subparagraph (A) or (B) ofsection 911(d)(1), whichever is applicable.11(4) INDIVIDUALS RESIDING IN POSSESSIONS12OF THE UNITED STATES.Any individual who is a13bona fide resident of any possession of the United14States (as determined under section 937(a)) for anytaxable year (and any qualifying child residing with16

such individual) shall be treated for purposes of this17section as covered by acceptable coverage during18such taxable year.19(5) RELIGIOUS CONSCIENCE EXEMPTION. (A) IN GENERAL.Subsection (a) shall21not apply to any individual (and any qualifying22child residing with such individual) for any pe23riod if such individual has in effect an exemp24tion which certifies that such individual is amember of a recognized religious sect or divi

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1711sion thereof described in section 1402(g)(1) and

2an adherent of established tenets or teachings3of such sect or division as described in such sec4tion.(B) EXEMPTION.An application for the6exemption described in subparagraph (A) shall7be filed with the Secretary at such time and in8such form and manner as the Secretary may

9prescribe. Any such exemption granted by theSecretary shall be effective for such period as11the Secretary determines appropriate.12(d) ACCEPTABLE COVERAGE REQUIREMENT. 13(1) IN GENERAL.The requirements of this14subsection are met with respect to any individual forany period if such individual (and each qualifying16

child of such individual) is covered by acceptable17coverage at all times during such period.18(2) ACCEPTABLE COVERAGE.For purposes19of this section, the term acceptable coverage meansany of the following:21(A) QUALIFIED HEALTH BENEFITS PLAN22COVERAGE.Coverage under a qualified health23benefits plan (as defined in section 100(c) of24the Americas Affordable Health Choices Act of2009).

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1721(B) GRANDFATHERED HEALTH INSUR2

ANCE COVERAGE; COVERAGE UNDER GRAND3FATHERED EMPLOYMENT-BASED HEALTH4PLAN.Coverage under a grandfathered healthinsurance coverage (as defined in subsection (a)6of section 102 of the Americas Affordable7Health Choices Act of 2009) or under a current8employment-based health plan (within the9

meaning of subsection (b) of such section).(C) MEDICARE.Coverage under part A11of title XVIII of the Social Security Act.12(D) MEDICAID.Coverage for medical as13sistance under title XIX of the Social Security14Act.(E) MEMBERS OF THE ARMED FORCES16AND DEPENDENTS (INCLUDING TRICARE). 17

Coverage under chapter 55 of title 10, United18States Code, including similar coverage fur19nished under section 1781 of title 38 of suchCode.21(F) VA.Coverage under the veterans22health care program under chapter 17 of title2338, United States Code, but only if the cov24erage for the individual involved is determinedby the Secretary in coordination with the

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1731Health Choices Commissioner to be not less

2than the level specified by the Secretary of the3Treasury, in coordination with the Secretary of4Veterans Affairs and the Health Choices Commissioner,based on the individuals priority for6services as provided under section 1705(a) of7such title.8(G) OTHER COVERAGE.

Such other9

health benefits coverage as the Secretary, in coordinationwith the Health Choices Commis11sioner, recognizes for purposes of this sub12section.13(e) OTHER DEFINITIONS AND SPECIAL RULES. 14(1) QUALIFYING CHILD.For purposes of thissection, the term qualifying child has the meaning16given such term by section 152(c).

17(2) BASIC PLAN.For purposes of this sec18tion, the term basic plan has the meaning given19such term under section 100(c) of the Americas AffordableHealth Choices Act of 2009.21(3) HEALTH INSURANCE EXCHANGE.For22purposes of this section, the term Health Insurance23Exchange has the meaning given such term under24section 100(c) of the Americas Affordable HealthChoices Act of 2009, including any State-based

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1751(1) exemption from the tax imposed under

2subsection (a) in cases of de minimis lapses of ac3ceptable coverage, and4(2) a process for applying for a waiver of the5application of subsection (a) in cases of hardship..6(b) INFORMATION REPORTING. 7(1) IN GENERAL.Subpart B of part III of8

subchapter A of chapter 61 of such Code is amended9by inserting after section 6050W the following new10section:11SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE12COVERAGE.13(a) REQUIREMENT OF REPORTING.Every person14who provides acceptable coverage (as defined in section

1559B(d)) to any individual during any calendar year shall,16at such time as the Secretary may prescribe, make the17return described in subsection (b) with respect to such in18dividual.19(b) FORM AND MANNER OF RETURNS.A return20is described in this subsection if such return 21(1) is in such form as the Secretary may pre22scribe, and23(2) contains

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1761(A) the name, address, and TIN of the

2primary insured and the name of each other in3dividual obtaining coverage under the policy,4(B) the period for which each such individualwas provided with the coverage referred6to in subsection (a), and7(C) such other information as the Sec8retary may require.9(c) STATEMENTS TO BE FURNISHED TO INDIVIDUALSWITH RESPECT TO WHOM INFORMATION IS RE11

QUIRED.Every person required to make a return under12subsection (a) shall furnish to each primary insured whose13name is required to be set forth in such return a written14statement showing (1) the name and address of the person re16quired to make such return and the phone number17of the information contact for such person, and

18(2) the information required to be shown on19the return with respect to such individual.The written statement required under the preceding sen21tence shall be furnished on or before January 31 of the22year following the calendar year for which the return23under subsection (a) is required to be made.24(d) COVERAGE PROVIDED BY GOVERNMENTALUNITS.In the case of coverage provided by any govern-

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1771mental unit or any agency or instrumentality thereof, the

2officer or employee who enters into the agreement to pro3vide such coverage (or the person appropriately designated4for purposes of this section) shall make the returns and5statements required by this section..6(2) PENALTY FOR FAILURE TO FILE. 7(A) RETURN.Subparagraph (B) of sec8tion 6724(d)(1) of such Code is amended by

9striking or at the end of clause (xxii), by10striking and at the end of clause (xxiii) and11inserting or, and by adding at the end the12following new clause:13(xxiv) section 6050X (relating to re14turns relating to health insurance cov15erage), and.16

(B) STATEMENT.Paragraph (2) of sec17tion 6724(d) of such Code is amended by strik18ing or at the end of subparagraph (EE), by19striking the period at the end of subparagraph20(FF) and inserting , or, and by inserting21after subparagraph (FF) the following new sub22paragraph:23(GG) section 6050X (relating to returns24relating to health insurance coverage)..

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1781(c) RETURN REQUIREMENT.Subsection (a) of sec2

tion 6012 of such Code is amended by inserting after3paragraph (9) the following new paragraph:4(10) Every individual to whom section 59B(a)5applies and who fails to meet the requirements of6section 59B(d) with respect to such individual or7any qualifying child (as defined in section 152(c)) of8

such individual..9

(d) CLERICAL AMENDMENTS. 10(1) The table of parts for subchapter A of chap11ter 1 of the Internal Revenue Code of 1986 is12amended by adding at the end the following new13item:PART VIII. HEALTH CARE RELATED TAXES..14(2) The table of sections for subpart B of part

15III of subchapter A of chapter 61 is amended by16adding at the end the following new item:Sec. 6050X. Returns relating to health insurance coverage..17(e) SECTION 15 NOT TO APPLY.The amendment18made by subsection (a) shall not be treated as a change19in a rate of tax for purposes of section 15 of the Internal20Revenue Code of 1986.21(f) EFFECTIVE DATE. 22(1) IN GENERAL.The amendments made by23this section shall apply to taxable years beginning24after December 31, 2012.

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1791(2) RETURNS.The amendments made by sub2

section (b) shall apply to calendar years beginning3after December 31, 2012.4PART 2EMPLOYER RESPONSIBILITYSEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PAR6TICIPATION REQUIREMENTS.7(a) IN GENERAL.Chapter 43 of the Internal Rev8enue Code of 1986 is amended by adding at the end the9following new section:SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COV11ERAGE PARTICIPATION REQUIREMENTS.

12(a) ELECTION OF EMPLOYER RESPONSIBILITY TO13PROVIDE HEALTH COVERAGE. 14(1) IN GENERAL.Subsection (b) shall applyto any employer with respect to whom an election16under paragraph (2) is in effect.17(2) TIME AND MANNER.An employer may

18make an election under this paragraph at such time19and in such form and manner as the Secretary mayprescribe.21(3) AFFILIATED GROUPS.In the case of any22employer which is part of a group of employers who23are treated as a single employer under subsection24(b), (c), (m), or (o) of section 414, the electionunder paragraph (2) shall be made by such person

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1801as the Secretary may provide. Any such election,

2once made, shall apply to all members of such3group.4(4) SEPARATE ELECTIONS.Under regulationsprescribed by the Secretary, separate elections6may be made under paragraph (2) with respect to 7(A) separate lines of business, and8(B) full-time employees and employees9

who are not full-time employees.(5) TERMINATION OF ELECTION IN CASES OF11SUBSTANTIAL NONCOMPLIANCE.The Secretary12may terminate the election of any employer under13paragraph (2) if the Secretary (in coordination with14the Health Choices Commissioner) determines thatsuch employer is in substantial noncompliance with

16the health coverage participation requirements.17(b) EXCISE TAX WITH RESPECT TO FAILURE TO18MEET HEALTH COVERAGE PARTICIPATION REQUIRE19MENTS. (1) IN GENERAL.In the case of any employer21who fails (during any period with respect to which22the election under subsection (a) is in effect) to sat23isfy the health coverage participation requirements24with respect to any employee to whom such electionapplies, there is hereby imposed on each such failure

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1811with respect to each such employee a tax of $100 for

2each day in the period beginning on the date such3failure first occurs and ending on the date such fail4ure is corrected.(2) LIMITATIONS ON AMOUNT OF TAX. 6(A) TAX NOT TO APPLY WHERE FAILURE7NOT DISCOVERED EXERCISING REASONABLE8DILIGENCE.No tax shall be imposed by para9

graph (1) on any failure during any period forwhich it is established to the satisfaction of the11Secretary that the employer neither knew, nor12exercising reasonable diligence would have13known, that such failure existed.14(B) TAX NOT TO APPLY TO FAILURESCORRECTED WITHIN 30 DAYS.No tax shall be16imposed by paragraph (1) on any failure if

17(i) such failure was due to reason18able cause and not to willful neglect, and19(ii) such failure is corrected duringthe 30-day period beginning on the 1st21date that the employer knew, or exercising22reasonable diligence would have known,23that such failure existed.24(C) OVERALL LIMITATION FOR UNINTENTIONALFAILURES.In the case of failures

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1821which are due to reasonable cause and not to

2willful neglect, the tax imposed by subsection3(a) for failures during the taxable year of the4employer shall not exceed the amount equal to5the lesser of 6(i) 10 percent of the aggregate7amount paid or incurred by the employer

8(or predecessor employer) during the pre9ceding taxable year for employment-based10health plans, or11(ii) $500,000.12(D) COORDINATION WITH OTHER EN13FORCEMENT PROVISIONS.The tax imposed14under paragraph (1) with respect to any failure15

shall be reduced (but not below zero) by the16amount of any civil penalty collected under sec17tion 502(c)(11) of the Employee Retirement In18come Security Act of 1974 or section 2793(g)19of the Public Health Service Act with respect to20such failure.21(c) HEALTH COVERAGE PARTICIPATION REQUIRE22MENTS.For purposes of this section, the term health23coverage participation requirements means the require24ments of part I of subtitle B of title III of the Americas

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1831Affordable Health Choices Act of 2009 (as in effect on

2the date of the enactment of this section)..3(b) CLERICAL AMENDMENT.The table of sections4for chapter 43 of such Code is amended by adding at the5end the following new item:Sec. 4980H. Election to satisfy health coverage participation requirements..6(c) EFFECTIVE DATE.The amendments made by7

this section shall apply to periods beginning after Decem8ber 31, 2012.9SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOY10ERS.11(a) IN GENERAL.Section 3111 of the Internal Rev12enue Code of 1986 is amended by redesignating subsection13(c) as subsection (d) and by inserting after subsection (b)14the following new subsection:15

(c) EMPLOYERS ELECTING TO NOT PROVIDE16HEALTH BENEFITS. 17(1) IN GENERAL.In addition to other taxes,18there is hereby imposed on every nonelecting em19ployer an excise tax, with respect to having individ20uals in his employ, equal to 8 percent of the wages21(as defined in section 3121(a)) paid by him with re22spect to employment (as defined in section 3121(b)).23(2) SPECIAL RULES FOR SMALL EMPLOY24ERS.

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1841(A) IN GENERAL.In the case of any em2

ployer who is small employer for any calendar3year, paragraph (1) shall be applied by sub4stituting the applicable percentage determined5in accordance with the following table for 86percent:

If the annual payroll of such employer for The applicablethe preceding calendar year: percentage is:Does not exceed $250,000 ..................................... 0 percent

Exceeds $250,000, but does not exceed $300,000 2 percentExceeds $300,000, but does not exceed $350,000 4 percentExceeds $350,000, but does not exceed $400,000 6 percent

7(B) SMALL EMPLOYER.For purposes of8this paragraph, the term small employer 9means any employer for any calendar year if10the annual payroll of such employer for the pre11ceding calendar year does not exceed $400,000.

12(C) ANNUAL PAYROLL.For purposes of13this paragraph, the term annual payroll 14means, with respect to any employer for any15calendar year, the aggregate wages (as defined16in section 3121(a)) paid by him with respect to17employment (as defined in section 3121(b))18during such calendar year.19(3) NONELECTING EMPLOYER.For purposes20of paragraph (1), the term nonelecting employer 21means any employer for any period with respect to

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1851which such employer does not have an election under

2section 4980H(a) in effect.3(4) SPECIAL RULE FOR SEPARATE ELEC4TIONS.In the case of an employer who makes aseparate election described in section 4980H(a)(4)6for any period, paragraph (1) shall be applied for7such period by taking into account only the wages8paid to employees who are not subject to such elec9

tion.(5) AGGREGATION; PREDECESSORS.For pur11poses of this subsection 12(A) all persons treated as a single em13ployer under subsection (b), (c), (m), or (o) of14section 414 shall be treated as 1 employer, and(B) any reference to any person shall be16treated as including a reference to any prede17cessor of such person..18

(b) DEFINITIONS.Section 3121 of such Code is19amended by adding at the end the following new subsection:21(aa) SPECIAL RULES FOR TAX ON EMPLOYERS22ELECTING NOT TO PROVIDE HEALTH BENEFITS.For23purposes of section 3111(c) 24(1) Paragraphs (1), (5), and (19) of subsection(b) shall not apply.

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1861(2) Paragraph (7) of subsection (b) shall apply

2by treating all services as not covered by the retire3ment systems referred to in subparagraphs (C) and4(F) thereof.5(3) Subsection (e) shall not apply and the6term State shall include the District of Columbia..7(c) CONFORMING AMENDMENT.Subsection (d) of8

section 3111 of such Code, as redesignated by this section,9is amended by striking this section and inserting sub10sections (a) and (b).11(d) APPLICATION TO RAILROADS. 12(1) IN GENERAL.Section 3221 of such Code13is amended by redesignating subsection (c) as sub14section (d) and by inserting after subsection (b) the15following new subsection:

16(c) EMPLOYERS ELECTING TO NOT PROVIDE17HEALTH BENEFITS. 18(1) IN GENERAL.In addition to other taxes,19there is hereby imposed on every nonelecting em20ployer an excise tax, with respect to having individ21uals in his employ, equal to 8 percent of the com22pensation paid during any calendar year by such em23ployer for services rendered to such employer.

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1871(2) EXCEPTION FOR SMALL EMPLOYERS.

2Rules similar to the rules of section 3111(c)(2) shall3apply for purposes of this subsection.4(3) NONELECTING EMPLOYER.For purposes5of paragraph (1), the term nonelecting employer 6means any employer for any period with respect to7which such employer does not have an election under

8section 4980H(a) in effect.9(4) SPECIAL RULE FOR SEPARATE ELEC10TIONS.In the case of an employer who makes a11separate election described in section 4980H(a)(4)12for any period, subsection (a) shall be applied for13such period by taking into account only the wages14paid to employees who are not subject to such elec15

tion..16(2) DEFINITIONS.Subsection (e) of section173231 of such Code is amended by adding at the end18the following new paragraph:19(13) SPECIAL RULES FOR TAX ON EMPLOYERS20ELECTING NOT TO PROVIDE HEALTH BENEFITS. 21For purposes of section 3221(c) 22(A) Paragraph (1) shall be applied with23out regard to the third sentence thereof.24(B) Paragraph (2) shall not apply..

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1881(3) CONFORMING AMENDMENT.Subsection (d)

2of section 3221 of such Code, as redesignated by3this section, is amended by striking subsections (a)4and (b), see section 3231(e)(2) and inserting this5section, see paragraphs (2) and (13)(B) of section63231(e).7(e) EFFECTIVE DATE.The amendments made by

8this section shall apply to periods beginning after Decem9ber 31, 2012.10Subtitle BCredit for Small Busi11ness Employee Health Coverage12Expenses13SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE14HEALTH COVERAGE EXPENSES.15

(a) IN GENERAL.Subpart D of part IV of sub16chapter A of chapter 1 of the Internal Revenue Code of171986 (relating to business-related credits) is amended by18adding at the end the following new section:19SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COV20ERAGE CREDIT.21(a) IN GENERAL.For purposes of section 38, in22the case of a qualified small employer, the small business23employee health coverage credit determined under this sec24tion for the taxable year is an amount equal to the applica

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1891ble percentage of the qualified employee health coverage

2expenses of such employer for such taxable year.3(b) APPLICABLE PERCENTAGE. 4(1) IN GENERAL.For purposes of this section,the applicable percentage is 50 percent.6(2) PHASEOUT BASED ON AVERAGE COM7PENSATION OF EMPLOYEES.In the case of an em8ployer whose average annual employee compensation9

for the taxable year exceeds $20,000, the percentagespecified in paragraph (1) shall be reduced by a11number of percentage points which bears the same12ratio to 50 as such excess bears to $20,000.13(c) LIMITATIONS. 14(1) PHASEOUT BASED ON EMPLOYER SIZE. In the case of an employer who employs more than1610 qualified employees during the taxable year, the

17credit determined under subsection (a) shall be re18duced by an amount which bears the same ratio to19the amount of such credit (determined without regardto this paragraph and after the application of21the other provisions of this section) as 22(A) the excess of 23(i) the number of qualified employees24employed by the employer during the taxableyear, over

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1901(ii) 10, bears to

2(B) 15.3(2) CREDIT NOT ALLOWED WITH RESPECT TO4CERTAIN HIGHLY COMPENSATED EMPLOYEES.Nocredit shall be allowed under subsection (a) with re6spect to qualified employee health coverage expenses7paid or incurred with respect to any employee for8any taxable year if the aggregate compensation paid

9by the employer to such employee during such taxableyear exceeds $80,000.11(d) QUALIFIED EMPLOYEE HEALTH COVERAGE EX12PENSES.For purposes of this section 13(1) IN GENERAL.The term qualified em14ployee health coverage expenses means, with respectto any employer for any taxable year, the aggregate16amount paid or incurred by such employer during17

such taxable year for coverage of any qualified em18ployee of the employer (including any family cov19erage which covers such employee) under qualifiedhealth coverage.21(2) QUALIFIED HEALTH COVERAGE.The22term qualified health coverage means acceptable23coverage (as defined in section 59B(d)) which 24(A) is provided pursuant to an electionunder section 4980H(a), and

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1911(B) satisfies the requirements referred to

2in section 4980H(c).3(e) OTHER DEFINITIONS.For purposes of this4section 5(1) QUALIFIED SMALL EMPLOYER.For pur6poses of this section, the term qualified small em7ployer means any employer for any taxable year8if

9(A) the number of qualified employees10employed by such employer during the taxable11year does not exceed 25, and12(B) the average annual employee com13pensation of such employer for such taxable14year does not exceed the sum of the dollar15amounts in effect under subsection (b)(2).

16(2) QUALIFIED EMPLOYEE.The term quali17fied employee means any employee of an employer18for any taxable year of the employer if such em19ployee received at least $5,000 of compensation from20such employer during such taxable year.21(3) AVERAGE ANNUAL EMPLOYEE COMPENSA22TION.The term average annual employee com23pensation means, with respect to any employer for24any taxable year, the average amount of compensa

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1931which subsection (a) applies shall be reduced by the

2amount of the credit determined under this section.3(4) INFLATION ADJUSTMENT.In the case of4any taxable year beginning after 2013, each of the5dollar amounts in subsections (b)(2), (c)(2), and6(e)(2) shall be increased by an amount equal to 7(A) such dollar amount, multiplied by

8(B) the cost of living adjustment deter9mined under section 1(f)(3) for the calendar10year in which the taxable year begins deter11mined by substituting calendar year 2012 for12calendar year 1992 in subparagraph (B)13thereof.14If any increase determined under this paragraph is15

not a multiple of $50, such increase shall be rounded16to the next lowest multiple of $50..17(b) CREDIT TO BE PART OF GENERAL BUSINESS18CREDIT.Subsection (b) of section 38 of such Code (re19lating to general business credit) is amended by striking20plus at the end of paragraph (34), by striking the period21at the end of paragraph (35) and inserting , plus , and22by adding at the end the following new paragraph:23(36) in the case of a qualified small employer24(as defined in section 45R(e)), the small business

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1941employee health coverage credit determined under

2section 45R(a)..3(c) CLERICAL AMENDMENT.The table of sections4for subpart D of part IV of subchapter A of chapter 1of such Code is amended by inserting after the item relat6ing to section 45Q the following new item:Sec. 45R. Small business employee health coverage credit..7(d) EFFECTIVE DATE.The amendments made by8

this section shall apply to taxable years beginning after9December 31, 2012.Subtitle CDisclosures to Carry11Out Health Insurance Exchange12Subsidies13SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSUR14ANCE EXCHANGE SUBSIDIES.(a) IN GENERAL.Subsection (l) of section 6103 of16

the Internal Revenue Code of 1986 is amended by adding17at the end the following new paragraph:18(21) DISCLOSURE OF RETURN INFORMATION19TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES. 21(A) IN GENERAL.The Secretary, upon22written request from the Health Choices Com23missioner or the head of a State-based health24insurance exchange approved for operationunder section 208 of the Americas Affordable

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1951Health Choices Act of 2009, shall disclose to of2

ficers and employees of the Health Choices Ad3ministration or such State-based health insur4ance exchange, as the case may be, return informationof any taxpayer whose income is rel6evant in determining any affordability credit de7scribed in subtitle C of title II of the Americas8Affordable Health Choices Act of 2009. Such9return information shall be limited to (i) taxpayer identity information11

with respect to such taxpayer,12(ii) the filing status of such tax13payer,14(iii) the modified adjusted gross incomeof such taxpayer (as defined in sec16tion 59B(e)(5)),17(iv) the number of dependents of the18taxpayer,19

(v) such other information as is prescribedby the Secretary by regulation as21might indicate whether the taxpayer is eli22gible for such affordability credits (and the23amount thereof), and24(vi) the taxable year with respect towhich the preceding information relates or,

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1971(3) by inserting or any entity described in sub2

section (l)(21), after or (20) both places it ap3pears in the matter after subparagraph (F).4(c) UNAUTHORIZED DISCLOSURE OR INSPECTION. 5Paragraph (2) of section 7213(a) of such Code is amended6by striking or (20) and inserting (20), or (21).7Subtitle DOther Revenue8Provisions

9PART 1GENERAL PROVISIONS10SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.11(a) IN GENERAL.Part VIII of subchapter A of12chapter 1 of the Internal Revenue Code of 1986, as added13by this title, is amended by adding at the end the following14new subpart:15

Subpart BSurcharge on High Income IndividualsSec. 59C. Surcharge on high income individuals.16SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.17(a) GENERAL RULE.In the case of a taxpayer18other than a corporation, there is hereby imposed (in addi19tion to any other tax imposed by this subtitle) a tax equal20to 21(1) 1 percent of so much of the modified ad22justed gross income of the taxpayer as exceeds23$350,000 but does not exceed $500,000,

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1981(2) 1.5 percent of so much of the modified ad2

justed gross income of the taxpayer as exceeds3$500,000 but does not exceed $1,000,000, and4(3) 5.4 percent of so much of the modified ad5justed gross income of the taxpayer as exceeds6$1,000,000.7(b) TAXPAYERS NOT MAKING A JOINT RETURN. 8In the case of any taxpayer other than a taxpayer making

9a joint return under section 6013 or a surviving spouse10(as defined in section 2(a)), subsection (a) shall be applied11by substituting for each of the dollar amounts therein12(after any increase determined under subsection (e)) a dol13lar amount equal to 14(1) 50 percent of the dollar amount so in ef15fect in the case of a married individual filing a sepa16rate return, and

17(2) 80 percent of the dollar amount so in ef18fect in any other case.19(c) ADJUSTMENTS BASED ON FEDERAL HEALTH20REFORM SAVINGS. 21(1) IN GENERAL.Except as provided in para22graph (2), in the case of any taxable year beginning23after December 31, 2012, subsection (a) shall be ap24plied

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1991(A) by substituting 2 percent for 1 per2

cent, and3(B) by substituting 3 percent for 1.54percent.(2) ADJUSTMENTS BASED ON EXCESS FED6ERAL HEALTH REFORM SAVINGS. 7(A) EXCEPTION IF FEDERAL HEALTH RE8FORM SAVINGS SIGNIFICANTLY EXCEEDS BASE9AMOUNT.If the excess Federal health reform

savings is more than $150,000,000,000 but not11more than $175,000,000,000, paragraph (1)12shall not apply.13(B) FURTHER ADJUSTMENT FOR ADDI14TIONAL FEDERAL HEALTH REFORM SAVINGS. If the excess Federal health reform savings is16more than $175,000,000,000, paragraphs (1)17and (2) of subsection (a) (and paragraph (1) of

18this subsection) shall not apply to any taxable19year beginning after December 31, 2012.(C) EXCESS FEDERAL HEALTH REFORM21SAVINGS.For purposes of this subsection, the22term excess Federal health reform savings 23means the excess of 24(i) the Federal health reform savings,over

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2001(ii) $525,000,000,000.

2(D) FEDERAL HEALTH REFORM SAV3INGS.The term Federal health reform sav4ings means the sum of the amounts describedin subparagraphs (A) and (B) of paragraph (3).6(3) DETERMINATION OF FEDERAL HEALTH7REFORM SAVINGS.Not later than December 1,82012, the Director of the Office of Management and9

Budget shall (A) determine, on the basis of the study

11conducted under paragraph (4), the aggregate12reductions in Federal expenditures which have13been achieved as a result of the provisions of,14and amendments made by, division B of theAmericas Affordable Health Choices Act of162009 during the period beginning on October 1,

172009, and ending with the latest date with re18spect to which the Director has sufficient data19to make such determination, and(B) estimate, on the basis of such study21and the determination under subparagraph (A),22the aggregate reductions in Federal expendi23tures which will be achieved as a result of such24provisions and amendments during so much ofthe period beginning with fiscal year 2010 and

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2011ending with fiscal year 2019 as is not taken

2into account under subparagraph (A).3(4) STUDY OF FEDERAL HEALTH REFORM4SAVINGS.The Director of the Office of Manage5ment and Budget shall conduct a study of the reduc6tions in Federal expenditures during fiscal years72010 through 2019 which are attributable to the8provisions of, and amendments made by, division B

9of the Americas Affordable Health Choices Act of102009. The Director shall complete such study not11later than December 1, 2012.12(5) REDUCTIONS IN FEDERAL EXPENDITURES13DETERMINED WITHOUT REGARD TO PROGRAM IN14VESTMENTS.For purposes of paragraphs (3) and15(4), reductions in Federal expenditures shall be de16

termined without regard to section 1121 of the17Americas Affordable Health Choices Act of 200918and other program investments under division B19thereof.20(d) MODIFIED ADJUSTED GROSS INCOME.For21purposes of this section, the term modified adjusted gross22income means adjusted gross income reduced by any de23duction allowed for investment interest (as defined in sec24tion 163(d)). In the case of an estate or trust, adjusted

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2021gross income shall be determined as provided in section

267(e).3(e) INFLATION ADJUSTMENTS. 4(1) IN GENERAL.In the case of taxable yearsbeginning after 2011, the dollar amounts in sub6section (a) shall be increased by an amount equal7to 8(A) such dollar amount, multiplied by

9(B) the cost-of-living adjustment determinedunder section 1(f)(3) for the calendar11year in which the taxable year begins, by sub12stituting calendar year 2010 for calendar year131992 in subparagraph (B) thereof.14(2) ROUNDING.If any amount as adjustedunder paragraph (1) is not a multiple of $5,000,16such amount shall be rounded to the next lowest

17multiple of $5,000.18(f) SPECIAL RULES. 19(1) NONRESIDENT ALIEN.In the case of anonresident alien individual, only amounts taken21into account in connection with the tax imposed22under section 871(b) shall be taken into account23under this section.24(2) CITIZENS AND RESIDENTS LIVINGABROAD.The dollar amounts in effect under sub-

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2031section (a) (after the application of subsections (b)

2and (e)) shall be decreased by the excess of 3(A) the amounts excluded from the tax4payers gross income under section 911, over5(B) the amounts of any deductions or ex6clusions disallowed under section 911(d)(6)7with respect to the amounts described in sub8paragraph (A).9(3) CHARITABLE TRUSTS.

Subsection (a)10

shall not apply to a trust all the unexpired interests11in which are devoted to one or more of the purposes12described in section 170(c)(2)(B).13(4) NOT TREATED AS TAX IMPOSED BY THIS14CHAPTER FOR CERTAIN PURPOSES.The tax im15posed under this section shall not be treated as tax16

imposed by this chapter for purposes of determining17the amount of any credit under this chapter or for18purposes of section 55..19(b) CLERICAL AMENDMENT.The table of subparts20for part VIII of subchapter A of chapter 1 of such Code,21as added by this title, is amended by inserting after the22item relating to subpart A the following new item:SUBPART B. SURCHARGE ON HIGH INCOME INDIVIDUALS..23(c) SECTION 15 NOT TO APPLY.The amendment24made by subsection (a) shall not be treated as a change

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2041in a rate of tax for purposes of section 15 of the Internal

2Revenue Code of 1986.3(d) EFFECTIVE DATE.The amendments made by4this section shall apply to taxable years beginning afterDecember 31, 2010.6SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCA7TION OF INTEREST.8(a) IN GENERAL.Paragraphs (5)(D) and (6) of sec9

tion 864(f) of the Internal Revenue Code of 1986 are eachamended by striking December 31, 2010 and inserting11December 31, 2019.12(b) TRANSITION.Subsection (f) of section 864 of13such Code is amended by striking paragraph (7).14PART 2PREVENTION OF TAX AVOIDANCESEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN16DEDUCTIBLE PAYMENTS.

17(a) IN GENERAL.Section 894 of the Internal Rev18enue Code of 1986 (relating to income affected by treaty)19is amended by adding at the end the following new subsection:21(d) LIMITATION ON TREATY BENEFITS FOR CER22TAIN DEDUCTIBLE PAYMENTS. 23(1) IN GENERAL.In the case of any deduct24ible related-party payment, any withholding tax imposedunder chapter 3 (and any tax imposed under

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2051subpart A or B of this part) with respect to such

2payment may not be reduced under any treaty of the3United States unless any such withholding tax would4be reduced under a treaty of the United States if5such payment were made directly to the foreign par6ent corporation.7(2) DEDUCTIBLE RELATED-PARTY PAY8MENT.For purposes of this subsection, the term

9deductible related-party payment means any pay10ment made, directly or indirectly, by any person to11any other person if the payment is allowable as a de12duction under this chapter and both persons are13members of the same foreign controlled group of en14tities.15(3) FOREIGN CONTROLLED GROUP OF ENTI16TIES.For purposes of this subsection 17

(A) IN GENERAL.The term foreign18controlled group of entities means a controlled19group of entities the common parent of which20is a foreign corporation.21(B) CONTROLLED GROUP OF ENTITIES. 22The term controlled group of entities means a23controlled group of corporations as defined in24section 1563(a)(1), except that

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2061(i) more than 50 percent shall be

2substituted for at least 80 percent each3place it appears therein, and4(ii) the determination shall be made5without regard to subsections (a)(4) and6(b)(2) of section 1563.7A partnership or any other entity (other than a

8corporation) shall be treated as a member of a9controlled group of entities if such entity is con10trolled (within the meaning of section11954(d)(3)) by members of such group (includ12ing any entity treated as a member of such13group by reason of this sentence).14(4) FOREIGN PARENT CORPORATION.For15

purposes of this subsection, the term foreign parent16corporation means, with respect to any deductible17related-party payment, the common parent of the18foreign controlled group of entities referred to in19paragraph (3)(A).20(5) REGULATIONS.The Secretary may pre21scribe such regulations or other guidance as are nec22essary or appropriate to carry out the purposes of23this subsection, including regulations or other guid24ance which provide for

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2071(A) the treatment of two or more persons

2as members of a foreign controlled group of en3tities if such persons would be the common par4ent of such group if treated as one corporation,and6(B) the treatment of any member of a7foreign controlled group of entities as the com8mon parent of such group if such treatment is9appropriate taking into account the economic

relationships among such entities..11

(b) EFFECTIVE DATE.The amendment made by12this section shall apply to payments made after the date13of the enactment of this Act.14SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.16(a) IN GENERAL.Section 7701 of the Internal Rev17enue Code of 1986 is amended by redesignating subsection18

(o) as subsection (p) and by inserting after subsection (n)19the following new subsection:(o) CLARIFICATION OF ECONOMIC SUBSTANCE21DOCTRINE. 22(1) APPLICATION OF DOCTRINE.In the case23of any transaction to which the economic substance24doctrine is relevant, such transaction shall be treatedas having economic substance only if

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2081(A) the transaction changes in a mean2

ingful way (apart from Federal income tax ef3fects) the taxpayers economic position, and4(B) the taxpayer has a substantial purpose(apart from Federal income tax effects)6for entering into such transaction.7(2) SPECIAL RULE WHERE TAXPAYER RELIES8ON PROFIT POTENTIAL. 9(A) IN GENERAL.

The potential forprofit of a transaction shall be taken into ac11

count in determining whether the requirements12of subparagraphs (A) and (B) of paragraph (1)13are met with respect to the transaction only if14the present value of the reasonably expectedpre-tax profit from the transaction is substan16tial in relation to the present value of the ex17pected net tax benefits that would be allowed if18

the transaction were respected.19(B) TREATMENT OF FEES AND FOREIGNTAXES.Fees and other transaction expenses21and foreign taxes shall be taken into account as22expenses in determining pre-tax profit under23subparagraph (A).24(3) STATE AND LOCAL TAX BENEFITS.Forpurposes of paragraph (1), any State or local income

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2091tax effect which is related to a Federal income tax

2effect shall be treated in the same manner as a Fed3eral income tax effect.4(4) FINANCIAL ACCOUNTING BENEFITS.For5purposes of paragraph (1)(B), achieving a financial6accounting benefit shall not be taken into account as7a purpose for entering into a transaction if the ori8gin of such financial accounting benefit is a reduc9

tion of Federal income tax.10(5) DEFINITIONS AND SPECIAL RULES.For11purposes of this subsection 12(A) ECONOMIC SUBSTANCE DOCTRINE. 13The term economic substance doctrine means14the common law doctrine under which tax bene15fits under subtitle A with respect to a trans16action are not allowable if the transaction does

17not have economic substance or lacks a business18purpose.19(B) EXCEPTION FOR PERSONAL TRANS20ACTIONS OF INDIVIDUALS.In the case of an21individual, paragraph (1) shall apply only to22transactions entered into in connection with a23trade or business or an activity engaged in for24the production of income.

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2121action described in subsection (b)(6) with respect to

2which the relevant facts affecting the tax treatment3are not adequately disclosed in the return nor in a4statement attached to the return.(3) SPECIAL RULE FOR AMENDED RE6TURNS.Except as provided in regulations, in no7event shall any amendment or supplement to a re8turn of tax be taken into account for purposes of9

this subsection if the amendment or supplement isfiled after the earlier of the date the taxpayer is first11contacted by the Secretary regarding the examina12tion of the return or such other date as is specified13by the Secretary..14(3) CONFORMING AMENDMENT.Subparagraph(B) of section 6662A(e)(2) of such Code is amend16ed 17(A) by striking section 6662(h) and in18

serting subsections (h) or (i) of section 6662,19and(B) by striking GROSS VALUATION21MISSTATEMENT PENALTY in the heading and22inserting CERTAIN INCREASED UNDER23PAYMENT PENALTIES.24(b) REASONABLE CAUSE EXCEPTION NOT APPLICABLETO NONECONOMIC SUBSTANCE TRANSACTIONS, TAX

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2131SHELTERS, AND CERTAIN LARGE OR PUBLICLY TRADED

2PERSONS.Subsection (c) of section 6664 of such Code3is amended 4(1) by redesignating paragraphs (2) and (3) asparagraphs (3) and (4), respectively,6(2) by striking paragraph (2) in paragraph7(4), as so redesignated, and inserting paragraph8

(3), and9

(3) by inserting after paragraph (1) the followingnew paragraph:11(2) EXCEPTION.Paragraph (1) shall not12apply to 13(A) to any portion of an underpayment14which is attributable to one or more tax shelters(as defined in section 6662(d)(2)(C)) or trans16

actions described in section 6662(b)(6), and17(B) to any taxpayer if such taxpayer is a18specified person (as defined in section196662(d)(2)(D)(ii))..(c) APPLICATION OF PENALTY FOR ERRONEOUS21CLAIM FOR REFUND OR CREDIT TO NONECONOMIC SUB22STANCE TRANSACTIONS.Section 6676 of such Code is23amended by redesignating subsection (c) as subsection (d)24and inserting after subsection (b) the following new subsection:

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214

1(c) NONECONOMIC SUBSTANCE TRANSACTIONS2TREATED AS LACKING REASONABLE BASIS.For pur3poses of this section, any excessive amount which is attrib4utable to any transaction described in section 6662(b)(6)shall not be treated as having a reasonable basis..6(d) SPECIAL UNDERSTATEMENT REDUCTION RULE7FOR CERTAIN LARGE OR PUBLICLY TRADED PERSONS. 8

(1) IN GENERAL.Paragraph (2) of section9

6662(d) of such Code is amended by adding at theend the following new subparagraph:11(D) SPECIAL REDUCTION RULE FOR CER12TAIN LARGE OR PUBLICLY TRADED PERSONS. 13(i) IN GENERAL.In the case of any14specified person (I) subparagraph (B) shall not16

apply, and17(II) the amount of the under18statement under subparagraph (A)19shall be reduced by that portion of theunderstatement which is attributable21to any item with respect to which the22taxpayer has a reasonable belief that23the tax treatment of such item by the24taxpayer is more likely than not theproper tax treatment of such item.

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2151(ii) SPECIFIED PERSON.For pur2

poses of this subparagraph, the term spec3ified person means 4(I) any person required to file5periodic or other reports under section613 of the Securities Exchange Act of71934, and8(II) any corporation with gross

9receipts in excess of $100,000,000 for10the taxable year involved.11All persons treated as a single employer12under section 52(a) shall be treated as one13person for purposes of subclause (II)..14(2) CONFORMING AMENDMENT.Subparagraph15

(C) of section 6662(d)(2) of such Code is amended16by striking Subparagraph (B) and inserting Sub17paragraphs (B) and (D)(i)(II).18(e) EFFECTIVE DATE.The amendments made by19this section shall apply to transactions entered into after20the date of the enactment of this Act.21DIVISION BMEDICARE AND22MEDICAID IMPROVEMENTS23SEC. 1001. TABLE OF CONTENTS OF DIVISION.24The table of contents for this division is as follows:DIVISION BMEDICARE AND MEDICAID IMPROVEMENTSSec. 1001. Table of contents of division.

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216

TITLE IIMPROVING HEALTH CARE VALUE

Subtitle AProvisions Related to Medicare Part A

PART 1MARKET BASKET UPDATES

Sec. 1101. Skilled nursing facility payment update.

Sec. 1102. Inpatient rehabilitation facility payment update.

Sec. 1103. Incorporating productivity improvements into market basket updatesthat do not already incorporate such improvements.

PART 2OTHER MEDICARE PART A PROVISIONS

Sec. 1111. Payments to skilled nursing facilities.

Sec. 1112. Medicare DSH report and payment adjustments in response to coverageexpansion.

Subtitle BProvisions Related to Part B

PART 1PHYSICIANS SERVICES

Sec. 1121. Sustainable growth rate reform.Sec. 1122. Misvalued codes under the physician fee schedule.

Sec. 1123. Payments for efficient areas.Sec. 1124. Modifications to the Physician Quality Reporting Initiative (PQRI).Sec. 1125. Adjustment to Medicare payment localities.

PART 2MARKET BASKET UPDATES

Sec. 1131. Incorporating productivity improvements into market basket updatesthat do not already incorporate such improvements.

PART 3OTHER PROVISIONS

Sec. 1141. Rental and purchase of power-driven wheelchairs.

Sec. 1142. Extension of payment rule for brachytherapy.

Sec. 1143. Home infusion therapy report to congress.

Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost data andother data.

Sec. 1145. Treatment of certain cancer hospitals.

Sec. 1146. Medicare Improvement Fund.

Sec. 1147. Payment for imaging services.

Sec. 1148. Durable medical equipment program improvements.

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Sec. 1149. MedPAC study and report on bone mass measurement.

Subtitle CProvisions Related to Medicare Parts A and B

Sec. 1151. Reducing potentially preventable hospital readmissions.

Sec. 1152. Post acute care services payment reform plan and bundling pilotprogram.

Sec. 1153. Home health payment update for 2010.

Sec. 1154. Payment adjustments for home health care.

Sec. 1155. Incorporating productivity improvements into market basket updatefor home health services.

Sec. 1156. Limitation on Medicare exceptions to the prohibition on certain physician

referrals made to hospitals.

Sec. 1157. Institute of Medicine study of geographic adjustment factors underMedicare.

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217

Sec. 1158. Revision of Medicare payment systems to address geographic inequities

.

Subtitle DMedicare Advantage Reforms

PART 1PAYMENT AND ADMINISTRATION

Sec. 1161. Phase-in of payment based on fee-for-service costs.Sec. 1162. Quality bonus payments.Sec. 1163. Extension of Secretarial coding intensity adjustment authority.Sec. 1164. Simplification of annual beneficiary election periods.Sec. 1165. Extension of reasonable cost contracts.

Sec. 1166. Limitation of waiver authority for employer group plans.Sec. 1167. Improving risk adjustment for payments.Sec. 1168. Elimination of MA Regional Plan Stabilization Fund.

PART 2BENEFICIARY PROTECTIONS AND ANTI-FRAUD

Sec. 1171. Limitation on cost-sharing for individual health services.

Sec. 1172. Continuous open enrollment for enrollees in plans with enrollmentsuspension.

Sec. 1173. Information for beneficiaries on MA plan administrative costs.

Sec. 1174. Strengthening audit authority.

Sec. 1175. Authority to deny plan bids.

PART 3TREATMENT OF SPECIAL NEEDS PLANS

Sec. 1176. Limitation on enrollment outside open enrollment period of individualsinto chronic care specialized MA plans for special needsindividuals.

Sec. 1177. Extension of authority of special needs plans to restrict enrollment.

Subtitle EImprovements to Medicare Part D

Sec. 1181. Elimination of coverage gap.

Sec. 1182. Discounts for certain part D drugs in original coverage gap.

Sec. 1183. Repeal of provision relating to submission of claims by pharmacieslocated in or contracting with long-term care facilities.

Sec. 1184. Including costs incurred by AIDS drug assistance programs and Indian

Health Service in providing prescription drugs toward theannual out-of-pocket threshold under part D.

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Sec. 1185. Permitting mid-year changes in enrollment for formulary changesthat adversely impact an enrollee.

Subtitle FMedicare Rural Access Protections

Sec. 1191. Telehealth expansion and enhancements.

Sec. 1192. Extension of outpatient hold harmless provision.

Sec. 1193. Extension of section 508 hospital reclassifications.

Sec. 1194. Extension of geographic floor for work.

Sec. 1195. Extension of payment for technical component of certain physicianpathology services.

Sec. 1196. Extension of ambulance add-ons.

TITLE IIMEDICARE BENEFICIARY IMPROVEMENTS

Subtitle AImproving and Simplifying Financial Assistance for Low IncomeMedicare Beneficiaries

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Sec. 1201. Improving assets tests for Medicare Savings Program and low-income

subsidy program.

Sec. 1202. Elimination of part D cost-sharing for certain non-institutionalizedfull-benefit dual eligible individuals.

Sec. 1203. Eliminating barriers to enrollment.

Sec. 1204. Enhanced oversight relating to reimbursements for retroactive lowincome subsidy enrollment.

Sec. 1205. Intelligent assignment in enrollment.

Sec. 1206. Special enrollment period and automatic enrollment process for certainsubsidy eligible individuals.

Sec. 1207. Application of MA premiums prior to rebate in calculation of lowincome subsidy benchmark.

Subtitle BReducing Health Disparities

Sec. 1221. Ensuring effective communication in Medicare.

Sec. 1222. Demonstration to promote access for Medicare beneficiaries withlimited English proficiency by providing reimbursement for culturally

and linguistically appropriate services.

Sec. 1223. IOM report on impact of language access services.

Sec. 1224. Definitions.

Subtitle CMiscellaneous Improvements

Sec. 1231. Extension of therapy caps exceptions process.

Sec. 1232. Extended months of coverage of immunosuppressive drugs for kidneytransplant patients and other renal dialysis provisions.

Sec. 1233. Advance care planning consultation.

Sec. 1234. Part B special enrollment period and waiver of limited enrollmentpenalty for TRICARE beneficiaries.

Sec. 1235. Exception for use of more recent tax year in case of gains from saleof primary residence in computing part B income-related premium.

Sec. 1236. Demonstration program on use of patient decisions aids.

TITLE IIIPROMOTING PRIMARY CARE, MENTAL HEALTH

SERVICES, AND COORDINATED CARE

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Sec. 1301. Accountable Care Organization pilot program.

Sec. 1302. Medical home pilot program.

Sec. 1303. Payment incentive for selected primary care services.

Sec. 1304. Increased reimbursement rate for certified nurse-midwives.

Sec. 1305. Coverage and waiver of cost-sharing for preventive services.

Sec. 1306. Waiver of deductible for colorectal cancer screening tests regardless of coding, subsequent diagnosis, or ancillary tissue removal.

Sec. 1307. Excluding clinical social worker services from coverage under themedicare skilled nursing facility prospective payment systemand consolidated payment.

Sec. 1308. Coverage of marriage and family therapist services and mental

health counselor services.

Sec. 1309. Extension of physician fee schedule mental health add-on.

Sec. 1310. Expanding access to vaccines.

TITLE IVQUALITY

Subtitle AComparative Effectiveness Research

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Sec. 1401. Comparative effectiveness research.

Subtitle BNursing Home Transparency

PART 1IMPROVING TRANSPARENCY OF INFORMATION ON SKILLEDNURSING FACILITIES AND NURSING FACILITIES

Sec. 1411. Required disclosure of ownership and additional disclosable partiesinformation.

Sec. 1412. Accountability requirements.

Sec. 1413. Nursing home compare Medicare website.

Sec. 1414. Reporting of expenditures.

Sec. 1415. Standardized complaint form.

Sec. 1416. Ensuring staffing accountability.

PART 2TARGETING ENFORCEMENT

Sec. 1421. Civil money penalties.Sec. 1422. National independent monitor pilot program.Sec. 1423. Notification of facility closure.

PART 3IMPROVING STAFF TRAINING

Sec. 1431. Dementia and abuse prevention training.

Sec. 1432. Study and report on training required for certified nurse aides andsupervisory staff.

Subtitle CQuality Measurements

Sec. 1441. Establishment of national priorities for quality improvement.

Sec. 1442. Development of new quality measures; GAO evaluation of data collectionprocess for quality measurement.

Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of qualitymeasures.

Sec. 1444. Application of quality measures.

Sec. 1445. Consensus-based entity funding.

Subtitle DPhysician Payments Sunshine Provision

Sec. 1451. Reports on financial relationships between manufacturers and distributors

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of covered drugs, devices, biologicals, or medical suppliesunder Medicare, Medicaid, or CHIP and physicians andother health care entities and between physicians and otherhealth care entities.

Subtitle EPublic Reporting on Health Care-Associated Infections

Sec. 1461. Requirement for public reporting by hospitals and ambulatory surgical centers on health care-associated infections.

TITLE VMEDICARE GRADUATE MEDICAL EDUCATION

Sec. 1501. Distribution of unused residency positions.

Sec. 1502. Increasing training in nonprovider settings.

Sec. 1503. Rules for counting resident time for didactic and scholarly activities

and other activities.

Sec. 1504. Preservation of resident cap positions from closed hospitals.

Sec. 1505. Improving accountability for approved medical residency training.

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TITLE VIPROGRAM INTEGRITY

Subtitle AIncreased Funding to Fight Waste, Fraud, and Abuse

Sec. 1601. Increased funding and flexibility to fight fraud and abuse.

Subtitle BEnhanced Penalties for Fraud and Abuse

Sec. 1611. Enhanced penalties for false statements on provider or supplier enrollmentapplications.

Sec. 1612. Enhanced penalties for submission of false statements material to

a false claim.

Sec. 1613. Enhanced penalties for delaying inspections.

Sec. 1614. Enhanced hospice program safeguards.

Sec. 1615. Enhanced penalties for individuals excluded from program participation.

Sec. 1616. Enhanced penalties for provision of false information by MedicareAdvantage and part D plans.

Sec. 1617. Enhanced penalties for Medicare Advantage and part D marketingviolations.

Sec. 1618. Enhanced penalties for obstruction of program audits.

Sec. 1619. Exclusion of certain individuals and entities from participation inMedicare and State health care programs.

Subtitle CEnhanced Program and Provider Protections

Sec. 1631. Enhanced CMS program protection authority.

Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure requirements relating to previous affiliations.

Sec. 1633. Required inclusion of payment modifier for certain evaluation andmanagement services.

Sec. 1634. Evaluations and reports required under Medicare Integrity Program.

Sec. 1635. Require providers and suppliers to adopt programs to reduce waste,fraud, and abuse.

Sec. 1636. Maximum period for submission of Medicare claims reduced to notmore than 12 months.

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Sec. 1637. Physicians who order durable medical equipment or home healthservices required to be Medicare enrolled physicians or eligibleprofessionals.

Sec. 1638. Requirement for physicians to provide documentation on referrals toprograms at high risk of waste and abuse.

Sec. 1639. Face to face encounter with patient required before physicians maycertify eligibility for home health services or durable medicalequipment under Medicare.

Sec. 1640. Extension of testimonial subpoena authority to program exclusioninvestigations.

Sec. 1641. Required repayments of Medicare and Medicaid overpayments.

Sec. 1642. Expanded application of hardship waivers for OIG exclusions tobeneficiaries of any Federal health care program.

Sec. 1643. Access to certain information on renal dialysis facilities.

Sec. 1644. Billing agents, clearinghouses, or other alternate payees required to register under Medicare.

Sec. 1645. Conforming civil monetary penalties to False Claims Act amendments.

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Subtitle DAccess to Information Needed to Prevent Fraud, Waste, and

Abuse

Sec. 1651. Access to Information Necessary to Identify Fraud, Waste, andAbuse.

Sec. 1652. Elimination of duplication between the Healthcare Integrity andProtection Data Bank and the National Practitioner DataBank.

Sec. 1653. Compliance with HIPAA privacy and security standards.

TITLE VIIMEDICAID AND CHIP

Subtitle AMedicaid and Health Reform

Sec. 1701. Eligibility for individuals with income below 133-1/3 percent of theFederal poverty level.

Sec. 1702. Requirements and special rules for certain Medicaid eligible individuals.

Sec. 1703. CHIP and Medicaid maintenance of effort.

Sec. 1704. Reduction in Medicaid DSH.

Sec. 1705. Expanded outstationing.

Subtitle BPrevention

Sec. 1711. Required coverage of preventive services.Sec. 1712. Tobacco cessation.Sec. 1713. Optional coverage of nurse home visitation services.Sec. 1714. State eligibility option for family planning services.

Subtitle CAccess

Sec. 1721. Payments to primary care practitioners.

Sec. 1722. Medical home pilot program.

Sec. 1723. Translation or interpretation services.

Sec. 1724. Optional coverage for freestanding birth center services.

Sec. 1725. Inclusion of public health clinics under the vaccines for children program.

Subtitle DCoverage

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Sec. 1731. Optional medicaid coverage of low-income HIV-infected individuals.

Sec. 1732. Extending transitional Medicaid Assistance (TMA).

Sec. 1733. Requirement of 12-month continuous coverage under certain CHIPprograms.

Subtitle EFinancing

Sec. 1741. Payments to pharmacists.

Sec. 1742. Prescription drug rebates.

Sec. 1743. Extension of prescription drug discounts to enrollees of medicaidmanaged care organizations.

Sec. 1744. Payments for graduate medical education.

Subtitle FWaste, Fraud, and Abuse

Sec. 1751. Health-care acquired conditions.Sec. 1752. Evaluations and reports required under Medicaid Integrity Program.

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Sec. 1753. Require providers and suppliers to adopt programs to reduce waste,

fraud, and abuse.

Sec. 1754. Overpayments.

Sec. 1755. Managed Care Organizations.

Sec. 1756. Termination of provider participation under Medicaid and CHIP ifterminated under Medicare or other State plan or child healthplan.

Sec. 1757. Medicaid and CHIP exclusion from participation relating to certainownership, control, and management affiliations.

Sec. 1758. Requirement to report expanded set of data elements under MMISto detect fraud and abuse.

Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to register under Medicaid.

Sec. 1760. Denial of payments for litigation-related misconduct.

Subtitle GPuerto Rico and the Territories

Sec. 1771. Puerto Rico and territories.

Subtitle HMiscellaneous

Sec. 1781. Technical corrections.Sec. 1782. Extension of QI program.

TITLE VIIIREVENUE-RELATED PROVISIONS

Sec. 1801. Disclosures to facilitate identification of individuals likely to beineligiblefor the low-income assistance under the Medicare prescriptiondrug program to assist Social Security Administrationsoutreach to eligible individuals.

Sec. 1802. Comparative Effectiveness Research Trust Fund; financing forTrust Fund.

TITLE IXMISCELLANEOUS PROVISIONS

Sec. 1901. Repeal of trigger provision.

Sec. 1902. Repeal of comparative cost adjustment (CCA) program.

Sec. 1903. Extension of gainsharing demonstration.

Sec. 1904. Grants to States for quality home visitation programs for familieswith young children and families expecting children.

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Sec. 1905. Improved coordination and protection for dual eligibles.

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2231TITLE IIMPROVING HEALTH

2CARE VALUE3Subtitle AProvisions Related to4Medicare Part A5PART 1MARKET BASKET UPDATES6SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE.7(a) IN GENERAL.Section 1888(e)(4)(E)(ii) of the

8Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is9amended 10(1) in subclause (III), by striking and at the11end;12(2) by redesignating subclause (IV) as sub13clause (VI); and14(3) by inserting after subclause (III) the fol15

lowing new subclauses:16(IV) for each of fiscal years172004 through 2009, the rate com18puted for the previous fiscal year in19creased by the skilled nursing facility20market basket percentage change for21the fiscal year involved;22(V) for fiscal year 2010, the23rate computed for the previous fiscal24year; and.

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224

1(b) DELAYED EFFECTIVE DATE.Section21888(e)(4)(E)(ii)(V) of the Social Security Act, as in3serted by subsection (a)(3), shall not apply to payment4for days before January 1, 2010.SEC. 1102. INPATIENT REHABILITATION FACILITY PAY6MENT UPDATE.7(a) IN GENERAL.Section 1886(j)(3)(C) of the So8cial Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended

9by striking and 2009 and inserting through 2010.(b) DELAYED EFFECTIVE DATE.The amendment11made by subsection (a) shall not apply to payment units12occurring before January 1, 2010.13SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVE14MENTS INTO MARKET BASKET UPDATESTHAT DO NOT ALREADY INCORPORATE SUCH16IMPROVEMENTS.

17(a) INPATIENT ACUTE HOSPITALS.Section181886(b)(3)(B) of the Social Security Act (42 U.S.C.191395ww(b)(3)(B)) is amended (1) in clause (iii) 21(A) by striking (iii) For purposes of this22subparagraph, and inserting (iii)(I) For pur23poses of this subparagraph, subject to the pro24ductivity adjustment described in subclause(II),; and

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2251(B) by adding at the end the following new

2subclause:3(II) The productivity adjustment described in this4subclause, with respect to an increase or change for a fiscalyear or year or cost reporting period, or other annual6period, is a productivity offset equal to the percentage7change in the 10-year moving average of annual economy-8

wide private nonfarm business multi-factor productivity9(as recently published before the promulgation of such increasefor the year or period involved). Except as other11wise provided, any reference to the increase described in12this clause shall be a reference to the percentage increase13described in subclause (I) minus the percentage change14under this subclause.;(2) in the first sentence of clause (viii)(I), by16

inserting (but not below zero) after shall be re17duced; and18(3) in the first sentence of clause (ix)(I) 19(A) by inserting (determined without regardto clause (iii)(II) after clause (i) the21second time it appears; and22(B) by inserting (but not below zero) 23after reduced.24(b) SKILLED NURSING FACILITIES.Section1888(e)(5)(B) of such Act (42 U.S.C. 1395yy(e)(5))(B)

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2261is amended by inserting subject to the productivity ad2

justment described in section 1886(b)(3)(B)(iii)(II) after3as calculated by the Secretary.4(c) LONG TERM CARE HOSPITALS.Section1886(m) of the Social Security Act (42 U.S.C.61395ww(m)) is amended by adding at the end the fol7lowing new paragraph:8(3) PRODUCTIVITY ADJUSTMENT.In imple9menting the system described in paragraph (1) for

discharges occurring during the rate year ending in112010 or any subsequent rate year for a hospital, to12the extent that an annual percentage increase factor13applies to a base rate for such discharges for the14hospital, such factor shall be subject to the productivityadjustment described in section161886(b)(3)(B)(iii)(II)..17

(d) INPATIENT REHABILITATION FACILITIES.The18second sentence of section 1886(j)(3)(C) of the Social Se19curity Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by inserting(subject to the productivity adjustment described21in section 1886(b)(3)(B)(iii)(II)) after appropriate per22centage increase.23(e) PSYCHIATRIC HOSPITALS.Section 1886 of the24Social Security Act (42 U.S.C. 1395ww) is amended byadding at the end the following new subsection:

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2271(o) PROSPECTIVE PAYMENT FOR PSYCHIATRIC

2HOSPITALS. 3(1) REFERENCE TO ESTABLISHMENT AND IM4PLEMENTATION OF SYSTEM.For provisions relatedto the establishment and implementation of a pro6spective payment system for payments under this7title for inpatient hospital services furnished by psy8chiatric hospitals (as described in clause (i) of sub9section (d)(1)(B) and psychiatric units (as describedin the matter following clause (v) of such sub11

section), see section 124 of the Medicare, Medicaid,12and SCHIP Balanced Budget Refinement Act of131999.14(2) PRODUCTIVITY ADJUSTMENT.In implementingthe system described in paragraph (1) for16discharges occurring during the rate year ending in172011 or any subsequent rate year for a psychiatric18

hospital or unit described in such paragraph, to the19extent that an annual percentage increase factor appliesto a base rate for such discharges for the hos21pital or unit, respectively, such factor shall be sub22ject to the productivity adjustment described in sec23tion 1886(b)(3)(B)(iii)(II)..24(f) HOSPICE CARE.Subclause (VII) of section1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C.

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22811395f(i)(1)(C)(ii)) is amended by inserting after the

2market basket percentage increase the following: (which3is subject to the productivity adjustment described in sec4tion 1886(b)(3)(B)(iii)(II)).(g) EFFECTIVE DATE.The amendments made by6subsections (a), (b), (d), and (f) shall apply to annual in7creases effected for fiscal years beginning with fiscal year82010.9

PART 2OTHER MEDICARE PART A PROVISIONSSEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.

11(a) CHANGE IN RECALIBRATION FACTOR. 12(1) ANALYSIS.The Secretary of Health and13Human Services shall conduct, using calendar year142006 claims data, an initial analysis comparing totalpayments under title XVIII of the Social Security16Act for skilled nursing facility services under the

17RUG53 and under the RUG44 classification sys18tems.19(2) ADJUSTMENT IN RECALIBRATION FACTOR.Based on the initial analysis under paragraph21(1), the Secretary shall adjust the case mix indexes22under section 1888(e)(4)(G)(i) of the Social Security23Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for fiscal year242010 by the appropriate recalibration factor as proposedin the proposed rule for Medicare skilled nurs

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2291ing facilities issued by such Secretary on May 12,

22009 (74 Federal Register 22214 et seq.).3(b) CHANGE IN PAYMENT FOR NONTHERAPY ANCIL4LARY (NTA) SERVICES AND THERAPY SERVICES. (1) CHANGES UNDER CURRENT SNF CLASSI6FICATION SYSTEM. 7(A) IN GENERAL.Subject to subpara8graph (B), the Secretary of Health and Human9Services shall, under the system for payment of

skilled nursing facility services under section111888(e) of the Social Security Act (42 U.S.C.121395yy(e)), increase payment by 10 percent for13non-therapy ancillary services (as specified by14the Secretary in the notice issued on November27, 1998 (63 Federal Register 65561 et seq.))16and shall decrease payment for the therapy case17

mix component of such rates by 5.5 percent.18(B) EFFECTIVE DATE.The changes in19payment described in subparagraph (A) shallapply for days on or after January 1, 2010,21and until the Secretary implements an alter22native case mix classification system for pay23ment of skilled nursing facility services under24section 1888(e) of the Social Security Act (42U.S.C. 1395yy(e)).

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230

1(C) IMPLEMENTATION.Notwithstanding2any other provision of law, the Secretary may3implement by program instruction or otherwise4the provisions of this paragraph.(2) CHANGES UNDER A FUTURE SNF CASE MIX6CLASSIFICATION SYSTEM. 7

(A) ANALYSIS. 8

(i) IN GENERAL.The Secretary of9Health and Human Services shall analyzepayments for non-therapy ancillary services11under a future skilled nursing facility clas12sification system to ensure the accuracy of13payment for non-therapy ancillary services.14Such analysis shall consider use of appropriate

indicators which may include age,16physical and mental status, ability to per17form activities of daily living, prior nursing18home stay, broad RUG category, and a19proxy for length of stay.(ii) APPLICATION.Such analysis21shall be conducted in a manner such that22the future skilled nursing facility classifica23tion system is implemented to apply to24services furnished during a fiscal year beginningwith fiscal year 2011.

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2311(B) CONSULTATION.In conducting the

2analysis under subparagraph (A), the Secretary3shall consult with interested parties, including4the Medicare Payment Advisory Commissionand other interested stakeholders, to identify6appropriate predictors of nontherapy ancillary7costs.8

(C) RULEMAKING.The Secretary shall9

include the result of the analysis under subparagraph(A) in the fiscal year 2011 rule11making cycle for purposes of implementation12beginning for such fiscal year.13(D) IMPLEMENTATION.Subject to sub14paragraph (E) and consistent with subparagraph(A)(ii), the Secretary shall implement16changes to payments for non-therapy ancillary

17services (which may include a separate rate18component for non-therapy ancillary services19and may include use of a model that predictspayment amounts applicable for non-therapy21ancillary services) under such future skilled22nursing facility services classification system as23the Secretary determines appropriate based on24the analysis conducted pursuant to subparagraph(A).

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2331to non-therapy ancillary services in the

2case of such outliers; and3(ii) may provide for such an addition4or adjustment to the payment amount otherwisemade under this section with re6spect to therapy services in the case of7such outliers.8(B) OUTLIERS BASED ON AGGREGATE

9COSTS.Outlier adjustments or additional paymentsdescribed in subparagraph (A) shall be11based on aggregate costs during a stay in a12skilled nursing facility and not on the number13of days in such stay.14(C) BUDGET NEUTRALITY. The Secretaryshall reduce estimated payments that16

would otherwise be made under the prospective17payment system under this subsection with re18spect to a fiscal year by 2 percent. The total19amount of the additional payments or paymentadjustments for outliers made under this para21graph with respect to a fiscal year may not ex22ceed 2 percent of the total payments projected23or estimated to be made based on the prospec24tive payment system under this subsection forthe fiscal year..

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234

1(d) CONFORMING AMENDMENTS.Section21888(e)(8) of such Act (42 U.S.C. 1395yy(e)(8)) is3amended 4(1) in subparagraph (A), by inserting and ad5justment under section 1111(b) of the Americas Af6fordable Health Choices Act of 2009;7(2) in subparagraph (B), by striking and;

8(3) in subparagraph (C), by striking the period9and inserting ; and; and10(4) by adding at the end the following new sub11paragraph:12(D) the establishment of outliers under13paragraph (13)..14SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUST15

MENTS IN RESPONSE TO COVERAGE EXPAN16SION.17(a) DSH REPORT. 18(1) IN GENERAL.Not later than January 1,192016, the Secretary of Health and Human Services20shall submit to Congress a report on Medicare DSH21taking into account the impact of the health care re22forms carried out under division A in reducing the23number of uninsured individuals. The report shall24include recommendations relating to the following:

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2351(A) The appropriate amount, targeting,

2and distribution of Medicare DSH to com3pensate for higher Medicare costs associated4with serving low-income beneficiaries (takinginto account variations in the empirical jus6tification for Medicare DSH attributable to hos7pital characteristics, including bed size), con8sistent with the original intent of Medicare9DSH.(B) The appropriate amount, targeting,

11and distribution of Medicare DSH to hospitals12given their continued uncompensated care costs,13to the extent such costs remain.14(2) COORDINATION WITH MEDICAID DSH REPORT.The Secretary shall coordinate the report16under this subsection with the report on Medicaid17DSH under section 1704(a).

18(b) PAYMENT ADJUSTMENTS IN RESPONSE TO COV19ERAGE EXPANSION. (1) IN GENERAL.If there is a significant de21crease in the national rate of uninsurance as a result22of this Act (as determined under paragraph (2)(A)),23then the Secretary of Health and Human Services24shall, beginning in fiscal year 2017, implement thefollowing adjustments to Medicare DSH:

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2361(A) The amount of Medicare DSH shall be

2adjusted based on the recommendations of the3report under subsection (a)(1)(A) and shall4take into account variations in the empiricaljustification for Medicare DSH attributable to6hospital characteristics, including bed size.7(B) Subject to paragraph (3), increase8

Medicare DSH for a hospital by an additional9amount that is based on the amount of uncompensatedcare provided by the hospital based on11criteria for uncompensated care as determined12by the Secretary, which shall exclude bad debt.13(2) SIGNIFICANT DECREASE IN NATIONAL RATE14OF UNINSURANCE AS A RESULT OF THIS ACT.Forpurposes of this subsection

16(A) IN GENERAL.There is a significant17decrease in the national rate of uninsurance as18a result of this Act if there is a decrease in19the national rate of uninsurance (as defined insubparagraph (B)) from 2012 to 2014 that ex21ceeds 8 percentage points.22(B) NATIONAL RATE OF UNINSURANCE23DEFINED.The term national rate of24uninsurance means, for a year, such rate forthe under-65 population for the year as deter-

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2371mined and published by the Bureau of the Cen2

sus in its Current Population Survey in or3about September of the succeeding year.4(3) UNCOMPENSATED CARE INCREASE. (A) COMPUTATION OF DSH SAVINGS.For6each fiscal year (beginning with fiscal year72017), the Secretary shall estimate the aggre8gate reduction in Medicare DSH that will result9

from the adjustment under paragraph (1)(A).(B) STRUCTURE OF PAYMENT IN11CREASE.The Secretary shall compute the in12crease in Medicare DSH under paragraph13(1)(B) for a fiscal year in accordance with a14formula established by the Secretary that providesthat 16(i) the aggregate amount of such in17crease for the fiscal year does not exceed18

50 percent of the aggregate reduction in19Medicare DSH estimated by the Secretaryfor such fiscal year; and21(ii) hospitals with higher levels of un22compensated care receive a greater in23crease.24(c) MEDICARE DSH.In this section, the termMedicare DSH means adjustments in payments under

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2381section 1886(d)(5)(F) of the Social Security Act (42

2U.S.C. 1395ww(d)(5)(F)) for inpatient hospital services3furnished by disproportionate share hospitals.4Subtitle BProvisions Related to5Part B6PART 1PHYSICIANS SERVICES7SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.

8(a) TRANSITIONAL UPDATE FOR 2010.Section91848(d) of the Social Security Act (42 U.S.C. 1395w 104(d)) is amended by adding at the end the following new11paragraph:12(10) UPDATE FOR 2010.The update to the13single conversion factor established in paragraph14

(1)(C) for 2010 shall be the percentage increase in15the MEI (as defined in section 1842(i)(3)) for that16year..17(b) REBASING SGR USING 2009; LIMITATION ON18CUMULATIVE ADJUSTMENT PERIOD.Section 1848(d)(4)19of such Act (42 U.S.C. 1395w4(d)(4)) is amended 20(1) in subparagraph (B), by striking subpara21graph (D) and inserting subparagraphs (D) and22(G); and23(2) by adding at the end the following new sub24paragraph:

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2391(G) REBASING USING 2009 FOR FUTURE

2UPDATE ADJUSTMENTS.In determining the3update adjustment factor under subparagraph4(B) for 2011 and subsequent years 5(i) the allowed expenditures for 20096shall be equal to the amount of the actual7expenditures for physicians services during

82009; and9(ii) the reference in subparagraph10(B)(ii)(I) to April 1, 1996 shall be treat11ed as a reference to January 1, 2009 (or,12if later, the first day of the fifth year be13fore the year involved)..14(c) LIMITATION ON PHYSICIANS SERVICES IN15CLUDED IN TARGET GROWTH RATE COMPUTATION TO

16SERVICES COVERED UNDER PHYSICIAN FEE SCHED17ULE.Effective for services furnished on or after January181, 2009, section 1848(f)(4)(A) of such Act is amended19striking (such as clinical and all that follows through20in a physicians office and inserting for which payment21under this part is made under the fee schedule under this22section, for services for practitioners described in section231842(b)(18)(C) on a basis related to such fee schedule,24or for services described in section 1861(p) (other than

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2401such services when furnished in the facility of a provider

2of services).3(d) ESTABLISHMENT OF SEPARATE TARGET4GROWTH RATES FOR CATEGORIES OF SERVICES. 5(1) ESTABLISHMENT OF SERVICE CAT6EGORIES.Subsection (j) of section 1848 of the So7cial Security Act (42 U.S.C. 1395w4) is amended8by adding at the end the following new paragraph:

9(5) SERVICE CATEGORIES.For services fur10nished on or after January 1, 2009, each of the fol11lowing categories of physicians services (as defined12in paragraph (3)) shall be treated as a separate13service category:14(A) Evaluation and management services15that are procedure codes (for services covered16

under this title) for 17(i) services in the category des18ignated Evaluation and Management in the19Health Care Common Procedure Coding20System (established by the Secretary under21subsection (c)(5) as of December 31, 2009,22and as subsequently modified by the Sec23retary); and

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2411(ii) preventive services (as defined in

2section 1861(iii)) for which payment is3made under this section.4(B) All other services not described in5subparagraph (A).6Service categories established under this paragraph7shall apply without regard to the specialty of the

8physician furnishing the service..9(2) ESTABLISHMENT OF SEPARATE CONVER10SION FACTORS FOR EACH SERVICE CATEGORY. 11Subsection (d)(1) of section 1848 of the Social Secu12rity Act (42 U.S.C. 1395w4) is amended 13(A) in subparagraph (A) 14(i) by designating the sentence begin15ning The conversion factor as clause (i)

16with the heading APPLICATION OF SIN17GLE CONVERSION FACTOR. and with18appropriate indentation;19(ii) by striking The conversion fac20tor and inserting Subject to clause (ii),21the conversion factor; and22(iii) by adding at the end the fol23lowing new clause:

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2421(ii) APPLICATION OF MULTIPLE CON2

VERSION FACTORS BEGINNING WITH32011. 4(I) IN GENERAL.In applyingclause (i) for years beginning with62011, separate conversion factors7shall be established for each service8category of physicians services (as de9

fined in subsection (j)(5)) and anyreference in this section to a conver11sion factor for such years shall be12deemed to be a reference to the con13version factor for each of such cat14egories.(II) INITIAL CONVERSION FAC16TORS.Such factors for 2011 shall be17based upon the single conversion fac18tor for the previous year multiplied by19

the update established under paragraph(11) for such category for212011.22(III) UPDATING OF CONVER23SION FACTORS.Such factor for a24service category for a subsequent yearshall be based upon the conversion

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2431factor for such category for the pre2

vious year and adjusted by the update3established for such category under4paragraph (11) for the year in5volved.; and6(B) in subparagraph (D), by striking7other physicians services and inserting for8physicians services described in the service cat9

egory described in subsection (j)(5)(B)

.10(3) ESTABLISHING UPDATES FOR CONVERSION11FACTORS FOR SERVICE CATEGORIES.Section121848(d) of the Social Security Act (42 U.S.C.131395w4(d)), as amended by subsection (a), is14amended 15(A) in paragraph (4)(C)(iii), by striking

16The allowed and inserting Subject to para17graph (11)(B), the allowed; and18(B) by adding at the end the following new19paragraph:20(11) UPDATES FOR SERVICE CATEGORIES BE21GINNING WITH 2011. 22(A) IN GENERAL.In applying paragraph23(4) for a year beginning with 2011, the fol24lowing rules apply:

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2441(i) APPLICATION OF SEPARATE UP2

DATE ADJUSTMENTS FOR EACH SERVICE3CATEGORY.Pursuant to paragraph4(1)(A)(ii)(I), the update shall be made to5the conversion factor for each service cat6egory (as defined in subsection (j)(5))7based upon an update adjustment factor8for the respective category and year and

9the update adjustment factor shall be com10puted, for a year, separately for each serv11ice category.12(ii) COMPUTATION OF ALLOWED AND13ACTUAL EXPENDITURES BASED ON SERV14ICE CATEGORIES.In computing the prior15year adjustment component and the cumu16lative adjustment component under clauses17

(i) and (ii) of paragraph (4)(B), the fol18lowing rules apply:19(I) APPLICATION BASED ON20SERVICE CATEGORIES.The allowed21expenditures and actual expenditures22shall be the allowed and actual ex23penditures for the service category, as24determined under subparagraph (B).

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2451(II) APPLICATION OF CATEGORY

2SPECIFIC TARGET GROWTH RATE. 3The growth rate applied under clause4(ii)(II) of such paragraph shall be thetarget growth rate for the service cat6egory involved under subsection (f)(5).7(B) DETERMINATION OF ALLOWED EX8PENDITURES.In applying paragraph (4) for a9

year beginning with 2010, notwithstanding subparagraph(C)(iii) of such paragraph, the al11lowed expenditures for a service category for a12year is an amount computed by the Secretary13as follows:14(i) FOR 2010.For 2010:(I) TOTAL 2009 ACTUAL EX16PENDITURES FOR ALL SERVICES IN17CLUDED IN SGR COMPUTATION FOR18

EACH SERVICE CATEGORY.Compute19total actual expenditures for physicians services (as defined in sub21section (f)(4)(A)) for 2009 for each22service category.23(II) INCREASE BY GROWTH24RATE TO OBTAIN 2010 ALLOWED EXPENDITURESFOR SERVICE CAT-

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2461EGORY.Compute allowed expendi2

tures for the service category for 20103by increasing the allowed expenditures4for the service category for 2009 computedunder subclause (I) by the tar6get growth rate for such service cat7egory under subsection (f) for 2010.8(ii) FOR SUBSEQUENT YEARS.For9a subsequent year, take the amount of allowed

expenditures for such category for11the preceding year (under clause (i) or this12clause) and increase it by the target13growth rate determined under subsection14(f) for such category and year..(4) APPLICATION OF SEPARATE TARGET16GROWTH RATES FOR EACH CATEGORY. 17

(A) IN GENERAL.Section 1848(f) of the18Social Security Act (42 U.S.C. 1395w4(f)) is19amended by adding at the end the followingnew paragraph:21(5) APPLICATION OF SEPARATE TARGET22GROWTH RATES FOR EACH SERVICE CATEGORY BE23GINNING WITH 2010.The target growth rate for a24year beginning with 2010 shall be computed and appliedseparately under this subsection for each serv

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2471ice category (as defined in subsection (j)(5)) and

2shall be computed using the same method for com3puting the target growth rate except that the factor4described in paragraph (2)(C) for 5(A) the service category described in sub6section (j)(5)(A) shall be increased by 0.02; and7(B) the service category described in sub8section (j)(5)(B) shall be increased by 0.01..9

(B) USE OF TARGET GROWTH RATES. 10

Section 1848 of such Act is further amended 11(i) in subsection (d) 12(I) in paragraph (1)(E)(ii), by in13serting or target after sustain14able; and15(II) in paragraph (4)(B)(ii)(II),16by inserting or target after sus17

tainable; and18(ii) in the heading of subsection (f),19by inserting AND TARGET GROWTH20RATE after SUSTAINABLE GROWTH21RATE;22(iii) in subsection (f)(1) 23(I) by striking and at the end24of subparagraph (A);

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2481(II) in subparagraph (B), by in2

serting before 2010 after each3succeeding year and by striking the4period at the end and inserting ;5and; and6(III) by adding at the end the7following new subparagraph:8(C) November 1 of each succeeding year9

the target growth rate for such succeeding year10and each of the 2 preceding years.; and11(iv) in subsection (f)(2), in the matter12before subparagraph (A), by inserting after13beginning with 2000 the following: and14ending with 2009.

15(e) APPLICATION TO ACCOUNTABLE CARE ORGANI16ZATION PILOT PROGRAM.In applying the target growth17rate under subsections (d) and (f) of section 1848 of the18Social Security Act to services furnished by a practitioner19to beneficiaries who are attributable to an accountable20care organization under the pilot program provided under21section 1866D of such Act, the Secretary of Health and22Human Services shall develop, not later than January 1,232012, for application beginning with 2012, a method24that

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2491(1) allows each such organization to have its

2own expenditure targets and updates for such practi3tioners, with respect to beneficiaries who are attrib4utable to that organization, that are consistent with5the methodologies described in such subsection (f);6and7(2) provides that the target growth rate appli8cable to other physicians shall not apply to such9

physicians to the extent that the physiciansservices10

are furnished through the accountable care organiza11tion.12In applying paragraph (1), the Secretary of Health and13Human Services may apply the difference in the update14under such paragraph on a claim-by-claim or lump sum15basis and such a payment shall be taken into account16

under the pilot program.17SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE18SCHEDULE.19(a) IN GENERAL.Section 1848(c)(2) of the Social20Security Act (42 U.S.C. 1395w-4(c)(2)) is amended by21adding at the end the following new subparagraphs:22(K) POTENTIALLY MISVALUED CODES. 23(i) IN GENERAL.The Secretary24shall

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2501(I) periodically identify services

2as being potentially misvalued using3criteria specified in clause (ii); and4(II) review and make appropriateadjustments to the relative val6ues established under this paragraph7for services identified as being poten8tially misvalued under subclause (I).9(ii) IDENTIFICATION OF POTENTIALLYMISVALUED CODES.For purposes

11of identifying potentially misvalued services12pursuant to clause (i)(I), the Secretary13shall examine (as the Secretary determines14to be appropriate) codes (and families ofcodes as appropriate) for which there has16been the fastest growth; codes (and fami17

lies of codes as appropriate) that have ex18perienced substantial changes in practice19expenses; codes for new technologies orservices within an appropriate period (such21as three years) after the relative values are22initially established for such codes; mul23tiple codes that are frequently billed in24conjunction with furnishing a single service;codes with low relative values, particu

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2511larly those that are often billed multiple

2times for a single treatment; codes which3have not been subject to review since the4implementation of the RBRVS (the so-called Harvard-valued codes); and such6other codes determined to be appropriate7by the Secretary.8(iii) REVIEW AND ADJUSTMENTS.

9

(I) The Secretary may use existingprocesses to receive rec11ommendations on the review and ap12propriate adjustment of potentially13misvalued services described clause14(i)(II).(II) The Secretary may conduct16surveys, other data collection activi17

ties, studies, or other analyses as the18Secretary determines to be appro19priate to facilitate the review and appropriateadjustment described in21clause (i)(II).22(III) The Secretary may use23analytic contractors to identify and24analyze services identified underclause (i)(I), conduct surveys or col-

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2521lect data, and make recommendations

2on the review and appropriate adjust3ment of services described in clause4(i)(II).(IV) The Secretary may coordi6nate the review and appropriate ad7justment described in clause (i)(II)8with the periodic review described in9subparagraph (B).(V) As part of the review and11

adjustment described in clause (i)(II),12including with respect to codes with13low relative values described in clause14(ii), the Secretary may make appropriatecoding revisions (including16using existing processes for consider17ation of coding changes) which may

18include consolidation of individual19services into bundled codes for paymentunder the fee schedule under21subsection (b).22(VI) The provisions of subpara23graph (B)(ii)(II) shall apply to adjust24ments to relative value units madepursuant to this subparagraph in the

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2531same manner as such provisions apply

2to adjustments under subparagraph3(B)(ii)(II).4(L) VALIDATING RELATIVE VALUEUNITS. 6(i) IN GENERAL.The Secretary7shall establish a process to validate relative8

value units under the fee schedule under9subsection (b).(ii) COMPONENTS AND ELEMENTS11OF WORK.The process described in12clause (i) may include validation of work13elements (such as time, mental effort and14professional judgment, technical skill andphysical effort, and stress due to risk) in16

volved with furnishing a service and may17include validation of the pre, post, and18intra-service components of work.19(iii) SCOPE OF CODES.The validationof work relative value units shall in21clude a sampling of codes for services that22is the same as the codes listed under sub23paragraph (K)(ii)24(iv) METHODS.The Secretary mayconduct the validation under this subpara

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2541graph using methods described in sub2

clauses (I) through (V) of subparagraph3(K)(iii) as the Secretary determines to be4appropriate.(v) ADJUSTMENTS.The Secretary6shall make appropriate adjustments to the7work relative value units under the fee8schedule under subsection (b). The provi9

sions of subparagraph (B)(ii)(II) shallapply to adjustments to relative value units11made pursuant to this subparagraph in the12same manner as such provisions apply to13adjustments under subparagraph14(B)(ii)(II)..(b) IMPLEMENTATION. 16(1) FUNDING.For purposes of carrying out

17the provisions of subparagraphs (K) and (L) of181848(c)(2) of the Social Security Act, as added by19subsection (a), in addition to funds otherwise available,out of any funds in the Treasury not otherwise21appropriated, there are appropriated to the Sec22retary of Health and Human Services for the Center23for Medicare & Medicaid Services Program Manage24ment Account $20,000,000 for fiscal year 2010 andeach subsequent fiscal year. Amounts appropriated

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256

SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.Section 1833 of the Social Security Act (42 U.S.C.

1395l) is amended by adding at the end the following new

subsection:

(x) INCENTIVE PAYMENTS FOR EFFICIENTAREAS.

(1) IN GENERAL.In the case of services furnishedunder the physician fee schedule under section

1848 on or after January 1, 2011, and beforeJanuary 1, 2013, by a supplier that is paid undersuch fee schedule in an efficient area (as identifiedunder paragraph (2)), in addition to the amount ofpayment that would otherwise be made for suchservices under this part, there also shall be paid (ona monthly or quarterly basis) an amount equal to 5percent of the payment amount for the servicesunder this part.

(2) IDENTIFICATION OF EFFICIENT AREAS.

(A) IN GENERAL.Based upon available

data, the Secretary shall identify those countiesor equivalent areas in the United States in thelowest fifth percentile of utilization based onper capita spending under this part and part Afor services provided in the most recent year forwhich data are available as of the date of theenactment of this subsection, as standardized to

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2571eliminate the effect of geographic adjustments

2in payment rates.3(B) IDENTIFICATION OF COUNTIES4WHERE SERVICE IS FURNISHED..For purposesof paying the additional amount specified6in paragraph (1), if the Secretary uses the 5-7digit postal ZIP Code where the service is fur8nished, the dominant county of the postal ZIP

9Code (as determined by the United States PostalService, or otherwise) shall be used to deter11mine whether the postal ZIP Code is in a coun12ty described in subparagraph (A).13(C) LIMITATION ON REVIEW.There14shall be no administrative or judicial reviewunder section 1869, 1878, or otherwise, respect16ing 17(i) the identification of a county or

18other area under subparagraph (A); or19(ii) the assignment of a postal ZIPCode to a county or other area under sub21paragraph (B).22(D) PUBLICATION OF LIST OF COUNTIES;23POSTING ON WEBSITE.With respect to a year24for which a county or area is identified underthis paragraph, the Secretary shall identify

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2581such counties or areas as part of the proposed

2and final rule to implement the physician fee3schedule under section 1848 for the applicable4year. The Secretary shall post the list of countiesidentified under this paragraph on the6Internet website of the Centers for Medicare &7Medicaid Services..8

SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY9REPORTING INITIATIVE (PQRI).(a) FEEDBACK.Section 1848(m)(5) of the Social11Security Act (42 U.S.C. 1395w4(m)(5)) is amended by12adding at the end the following new subparagraph:13(H) FEEDBACK.The Secretary shall14provide timely feedback to eligible professionalson the performance of the eligible professional

16with respect to satisfactorily submitting data on17quality measures under this subsection..18(b) APPEALS.Such section is further amended 19(1) in subparagraph (E), by striking Thereshall be and inserting Subject to subparagraph21(I), there shall be; and22(2) by adding at the end the following new sub23paragraph:24(I) INFORMAL APPEALS PROCESS.Notwithstandingsubparagraph (E), by not later

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2591than January 1, 2011, the Secretary shall es2

tablish and have in place an informal process3for eligible professionals to appeal the deter4mination that an eligible professional did notsatisfactorily submit data on quality measures6under this subsection..7(c) INTEGRATION OF PHYSICIAN QUALITY REPORT8ING AND EHR REPORTING.Section 1848(m) of such9Act is amended by adding at the end the following new

paragraph:11(7) INTEGRATION OF PHYSICIAN QUALITY RE12PORTING AND EHR REPORTING.Not later than13January 1, 2012, the Secretary shall develop a plan14to integrate clinical reporting on quality measuresunder this subsection with reporting requirements16under subsection (o) relating to the meaningful use17of electronic health records. Such integration shall

18consist of the following:19(A) The development of measures, the reportingof which would both demonstrate 21(i) meaningful use of an electronic22health record for purposes of subsection23(o); and24(ii) clinical quality of care furnishedto an individual.

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2601(B) The collection of health data to iden2

tify deficiencies in the quality and coordination3of care for individuals eligible for benefits under4this part.(C) Such other activities as specified by6the Secretary..7(d) EXTENSION OF INCENTIVE PAYMENTS.Section81848(m)(1) of such Act (42 U.S.C. 1395w4(m)(1)) is

9amended (1) in subparagraph (A), by striking 2010 11and inserting 2012; and12(2) in subparagraph (B)(ii), by striking 200913and 2010 and inserting for each of the years 200914through 2012.SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCAL16ITIES.

17(a) IN GENERAL.Section 1848(e) of the Social Se18curity Act (42 U.S.C.1395w4(e)) is amended by adding19at the end the following new paragraph:(6) TRANSITION TO USE OF MSAS AS FEE21SCHEDULE AREAS IN CALIFORNIA. 22(A) IN GENERAL. 23(i) REVISION.Subject to clause (ii)24and notwithstanding the previous provisionsof this subsection, for services fur

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2611nished on or after January 1, 2011, the

2Secretary shall revise the fee schedule3areas used for payment under this section4applicable to the State of California usingthe Metropolitan Statistical Area (MSA)6iterative Geographic Adjustment Factor7methodology as follows:8(I) The Secretary shall con9figure the physician fee schedule areas

using the Core-Based Statistical11Areas-Metropolitan Statistical Areas12(each in this paragraph referred to as13an MSA), as defined by the Director14of the Office of Management andBudget, as the basis for the fee sched16ule areas. The Secretary shall employ

17an iterative process to transition fee18schedule areas. First, the Secretary19shall list all MSAs within the State byGeographic Adjustment Factor de21scribed in paragraph (2) (in this para22graph referred to as a GAF) in de23scending order. In the first iteration,24the Secretary shall compare the GAFof the highest cost MSA in the State

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262

1to the weighted-average GAF of the2group of remaining MSAs in the3State. If the ratio of the GAF of the4highest cost MSA to the weighted-av5erage GAF of the rest of State is 1.056or greater then the highest cost MSA7

becomes a separate fee schedule area.8(II) In the next iteration, the9Secretary shall compare the MSA of10the second-highest GAF to the weight11ed-average GAF of the group of re12maining MSAs. If the ratio of the sec13ond-highest MSAs GAF to the14weighted-average of the remaining15

lower cost MSAs is 1.05 or greater,16the second-highest MSA becomes a17separate fee schedule area. The18iterative process continues until the19ratio of the GAF of the highest-cost20remaining MSA to the weighted-aver21age of the remaining lower-cost MSAs22is less than 1.05, and the remaining23group of lower cost MSAs form a sin24gle fee schedule area, If two MSAs

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2631have identical GAFs, they shall be

2combined in the iterative comparison.3(ii) TRANSITION.For services fur4nished on or after January 1, 2011, and5before January 1, 2016, in the State of6California, after calculating the work, prac7tice expense, and malpractice geographic8indices described in clauses (i), (ii), and

9(iii) of paragraph (1)(A) that would other10wise apply through application of this11paragraph, the Secretary shall increase any12such index to the county-based fee sched13ule area value on December 31, 2009, if14such index would otherwise be less than15the value on January 1, 2010.16

(B) SUBSEQUENT REVISIONS. 17(i) PERIODIC REVIEW AND ADJUST18MENTS IN FEE SCHEDULE AREAS.Subse19quent to the process outlined in paragraph20(1)(C), not less often than every three21years, the Secretary shall review and up22date the California Rest-of-State fee sched23ule area using MSAs as defined by the Di24rector of the Office of Management and

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2641Budget and the iterative methodology de2

scribed in subparagraph (A)(i).3(ii) LINK WITH GEOGRAPHIC INDEX4DATA REVISION.The revision described in5clause (i) shall be made effective concur6rently with the application of the periodic7review of the adjustment factors required8under paragraph (1)(C) for California for

92012 and subsequent periods. Upon re10quest, the Secretary shall make available11to the public any county-level or MSA de12rived data used to calculate the geographic13practice cost index.14(C) REFERENCES TO FEE SCHEDULE15AREAS.Effective for services furnished on or16

after January 1, 2010, for the State of Cali17fornia, any reference in this section to a fee18schedule area shall be deemed a reference to an19MSA in the State..20(b) CONFORMING AMENDMENT TO DEFINITION OF21FEE SCHEDULE AREA.Section 1848(j)(2) of the Social22Security Act (42 U.S.C. 1395w(j)(2)) is amended by strik23ing The term and inserting Except as provided in sub24section (e)(6)(C), the term.

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2651PART 2MARKET BASKET UPDATES

2SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVE3MENTS INTO MARKET BASKET UPDATES4THAT DO NOT ALREADY INCORPORATE SUCH5IMPROVEMENTS.6(a) OUTPATIENT HOSPITALS. 7(1) IN GENERAL.The first sentence of section8

1833(t)(3)(C)(iv) of the Social Security Act (429U.S.C. 1395l(t)(3)(C)(iv)) is amended 10(A) by inserting (which is subject to the11productivity adjustment described in subclause12(II) of such section) after131886(b)(3)(B)(iii); and14(B) by inserting (but not below 0) after

15reduced.16(2) EFFECTIVE DATE.The amendments made17by paragraph (1) shall apply to increase factors for18services furnished in years beginning with 2010.19(b) AMBULANCE SERVICES.Section 1834(l)(3)(B)20of such Act (42 U.S.C. 1395m(l)(3)(B))) is amended by21inserting before the period at the end the following: and,22in the case of years beginning with 2010, subject to the23productivity adjustment described in section241886(b)(3)(B)(iii)(II).

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2661(c) AMBULATORY SURGICAL CENTER SERVICES.

2Section 1833(i)(2)(D) of such Act (42 U.S.C.31395l(i)(2)(D)) is amended 4(1) by redesignating clause (v) as clause (vi);5and6(2) by inserting after clause (iv) the following7new clause:

8(v) In implementing the system described in clause9(i), for services furnished during 2010 or any subsequent10year, to the extent that an annual percentage change fac11tor applies, such factor shall be subject to the productivity12adjustment described in section 1886(b)(3)(B)(iii)(II)..13(d) LABORATORY SERVICES.Section141833(h)(2)(A)) of such Act (42 U.S.C. 1395l(h)(2)(A)) is

15amended 16(1) in clause (i), by striking for each of years172009 through 2013 and inserting for 2009; and18(2) clause (ii) 19(A) by striking and at the end of sub20clause (III);21(B) by striking the period at the end of22subclause (IV) and inserting ; and; and23(C) by adding at the end the following new24subclause:

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2671(V) the annual adjustment in the fee schedules

2determined under clause (i) for years beginning with32010 shall be subject to the productivity adjustment4described in section 1886(b)(3)(B)(iii)(II)..5(e) CERTAIN DURABLE MEDICAL EQUIPMENT.Sec6tion 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14))7is amended 8

(1) in subparagraph (K), by inserting before9the semicolon at the end the following: , subject to10the productivity adjustment described in section111886(b)(3)(B)(iii)(II);12(2) in subparagraph (L)(i), by inserting after13June 2013, the following: subject to the produc14tivity adjustment described in section15

1886(b)(3)(B)(iii)(II),;16(3) in subparagraph (L)(ii), by inserting after17June 2013 the following: , subject to the produc18tivity adjustment described in section191886(b)(3)(B)(iii)(II); and20(4) in subparagraph (M), by inserting before21the period at the end the following: , subject to the22productivity adjustment described in section231886(b)(3)(B)(iii)(II).

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268

PART 3OTHER PROVISIONS

SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN

WHEELCHAIRS.

(a) IN GENERAL.Section 1834(a)(7)(A)(iii) of theSocial Security Act (42 U.S.C. 1395m(a)(7)(A)(iii)) isamended (1) in the heading, by inserting CERTAIN COMPLEXREHABILITATIVE after OPTION FOR; and(2) by striking power-driven wheelchair andinserting complex rehabilitative power-driven wheelchair

recognized by the Secretary as classified withingroup 3 or higher.(b) EFFECTIVE DATE.The amendments made bysubsection (a) shall take effect on January 1, 2011, andshall apply to power-driven wheelchairs furnished on orafter such date. Such amendments shall not apply to contractsentered into under section 1847 of the Social SecurityAct (42 U.S.C. 1395w3) pursuant to a bid submittedunder such section before October 1, 2010, under subsection(a)(1)(B)(i)(I) of such section.SEC. 1142. EXTENSION OF PAYMENT RULE FOR

BRACHYTHERAPY.

Section 1833(t)(16)(C) of the Social Security Act (42

U.S.C. 1395l(t)(16)(C)), as amended by section 142 of theMedicare Improvements for Patients and Providers Act of2008 (Public Law 110275), is amended by striking, thef:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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2691first place it appears, January 1, 2010 and inserting

2January 1, 2012.3SEC. 1143. HOME INFUSION THERAPY REPORT TO CON4GRESS.5Not later than 12 months after the date of enactment6of this Act, the Medicare Payment Advisory Commission7shall submit to Congress a report on the following:8

(1) The scope of coverage for home infusion9therapy in the fee-for-service Medicare program10under title XVIII of the Social Security Act, Medi11care Advantage under part C of such title, the vet12erans health care program under chapter 17 of title1338, United States Code, and among private payers,14including an analysis of the scope of services pro15vided by home infusion therapy providers to their16

patients in such programs.17(2) The benefits and costs of providing such18coverage under the Medicare program, including a19calculation of the potential savings achieved through20avoided or shortened hospital and nursing home21stays as a result of Medicare coverage of home infu22sion therapy.23(3) An assessment of sources of data on the24costs of home infusion therapy that might be used

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2701to construct payment mechanisms in the Medicare

2program.3(4) Recommendations, if any, on the structure4of a payment system under the Medicare programfor home infusion therapy, including an analysis of6the payment methodologies used under Medicare Ad7vantage plans and private health plans for the provi8sion of home infusion therapy and their applicability9

to the Medicare program.SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS11(ASCS) TO SUBMIT COST DATA AND OTHER12DATA.13(a) COST REPORTING. 14(1) IN GENERAL.Section 1833(i) of the SocialSecurity Act (42 U.S.C. 1395l(i)) is amended by16adding at the end the following new paragraph:

17(8) The Secretary shall require, as a condition of18the agreement described in section 1832(a)(2)(F)(i), the19submission of such cost report as the Secretary may specify,taking into account the requirements for such reports21under section 1815 in the case of a hospital..22(2) DEVELOPMENT OF COST REPORT.Not23later than 3 years after the date of the enactment24of this Act, the Secretary of Health and HumanServices shall develop a cost report form for use

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2711under section 1833(i)(8) of the Social Security Act,

2as added by paragraph (1).3(3) AUDIT REQUIREMENT.The Secretary shall4provide for periodic auditing of cost reports sub5mitted under section 1833(i)(8) of the Social Secu6rity Act, as added by paragraph (1).7(4) EFFECTIVE DATE.The amendment made8by paragraph (1) shall apply to agreements applica9

ble to cost reporting periods beginning 18 months10after the date the Secretary develops the cost report11form under paragraph (2).12(b) ADDITIONAL DATA ON QUALITY. 13(1) IN GENERAL.Section 1833(i)(7) of such14Act (42 U.S.C. 1395l(i)(7)) is amended 15(A) in subparagraph (B), by inserting

16subject to subparagraph (C), after may oth17erwise provide,; and18(B) by adding at the end the following new19subparagraph:20(C) Under subparagraph (B) the Secretary shall re21quire the reporting of such additional data relating to22quality of services furnished in an ambulatory surgical fa23cility, including data on health care associated infections,24as the Secretary may specify..

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2721(2) EFFECTIVE DATE.The amendment made

2by paragraph (1) shall to reporting for years begin3ning with 2012.4SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.Section 1833(t) of the Social Security Act (42 U.S.C.61395l(t)) is amended by adding at the end the following7new paragraph:8(18) AUTHORIZATION OF ADJUSTMENT FOR

9CANCER HOSPITALS. (A) STUDY.The Secretary shall conduct11a study to determine if, under the system under12this subsection, costs incurred by hospitals de13scribed in section 1886(d)(1)(B)(v) with respect14to ambulatory payment classification groups exceedthose costs incurred by other hospitals fur16nishing services under this subsection (as deter17mined appropriate by the Secretary).

18(B) AUTHORIZATION OF ADJUSTMENT. 19Insofar as the Secretary determines under subparagraph(A) that costs incurred by hospitals21described in section 1886(d)(1)(B)(v) exceed22those costs incurred by other hospitals fur23nishing services under this subsection, the Sec24retary shall provide for an appropriate adjustmentunder paragraph (2)(E) to reflect those

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2731higher costs effective for services furnished on

2or after January 1, 2011..3SEC. 1146. MEDICARE IMPROVEMENT FUND.4Section 1898(b)(1)(A) of the Social Security Act (42U.S.C. 1395iii(b)(1)(A)) is amended to read as follows:6(A) the period beginning with fiscal year72011 and ending with fiscal year 2019,8

$8,000,000,000; and.9

SEC. 1147. PAYMENT FOR IMAGING SERVICES.(a) ADJUSTMENT IN PRACTICE EXPENSE TO RE11FLECT HIGHER PRESUMED UTILIZATION.Section 184812of the Social Security Act (42 U.S.C. 1395w) is amend13ed 14(1) in subsection (b)(4) (A) in subparagraph (B), by striking sub16paragraph (A) and inserting this paragraph;17

and18(B) by adding at the end the following new19subparagraph:(C) ADJUSTMENT IN PRACTICE EXPENSE21TO REFLECT HIGHER PRESUMED UTILIZA22TION.In computing the number of practice23expense relative value units under subsection24(c)(2)(C)(ii) with respect to advanced diagnosticimaging services (as defined in section

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27411834(e)(1)(B)) , the Secretary shall adjust such

2number of units so it reflects a 75 percent3(rather than 50 percent) presumed rate of utili4zation of imaging equipment.; and(2) in subsection (c)(2)(B)(v)(II), by inserting6AND OTHER PROVISIONS after OPD PAYMENT7CAP.8(b) ADJUSTMENT IN TECHNICAL COMPONENT DIS9

COUNT

ON SINGLE-SESSION IMAGING TO CONSECUTIVEBODY PARTS.Section 1848(b)(4) of such Act is further11amended by adding at the end the following new subpara12graph:13(D) ADJUSTMENT IN TECHNICAL COMPO14NENT DISCOUNT ON SINGLE-SESSION IMAGINGINVOLVING CONSECUTIVE BODY PARTS.The16Secretary shall increase the reduction in ex17penditures attributable to the multiple proce18dure payment reduction applicable to the tech19

nical component for imaging under the finalrule published by the Secretary in the Federal21Register on November 21, 2005 (part 405 of22title 42, Code of Federal Regulations) from 2523percent to 50 percent..24(c) EFFECTIVE DATE.Except as otherwise provided,this section, and the amendments made by this sec

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2751tion, shall apply to services furnished on or after January

21, 2011.3SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IM4PROVEMENTS.5(a) WAIVER OF SURETY BOND REQUIREMENT.Sec6tion 1834(a)(16) of the Social Security Act (42 U.S.C.71395m(a)(16)) is amended by adding at the end the fol8lowing: The requirement for a surety bond described in9

subparagraph (B) shall not apply in the case of a phar10macy (i) that has been enrolled under section 1866(j) as11a supplier of durable medical equipment, prosthetics,12orthotics, and supplies and has been issued (which may13include renewal of) a provider number (as described in the14first sentence of this paragraph) for at least 5 years, and15(ii) for which a final adverse action (as defined in section16

424.57(a) of title 42, Code of Federal Regulations) has17never been imposed..18(b) ENSURING SUPPLY OF OXYGEN EQUIPMENT . 19(1) IN GENERAL.Section 1834(a)(5)(F) of the20Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is21amended 22(A) in clause (ii), by striking After the 23and inserting Except as provided in clause24(iii), after the; and

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2761(B) by adding at the end the following new

2clause:3(iii) CONTINUATION OF SUPPLY.In4the case of a supplier furnishing suchequipment to an individual under this sub6section as of the 27th month of the 367months described in clause (i), the supplier8furnishing such equipment as of such

9month shall continue to furnish suchequipment to such individual (either di11rectly or though arrangements with other12suppliers of such equipment) during any13subsequent period of medical need for the14remainder of the reasonable useful lifetimeof the equipment, as determined by the16Secretary, regardless of the location of the

17individual, unless another supplier has ac18cepted responsibility for continuing to fur19nish such equipment during the remainderof such period..21(2) EFFECTIVE DATE.The amendments made22by paragraph (1) shall take effect as of the date of23the enactment of this Act and shall apply to the fur24nishing of equipment to individuals for whom the27th month of a continuous period of use of oxygen

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2771equipment described in section 1834(a)(5)(F) of the

2Social Security Act occurs on or after July 1, 2010.3(c) TREATMENT OF CURRENT ACCREDITATION AP4PLICATIONS.Section 1834(a)(20)(F) of such Act (42U.S.C. 1395m(a)(20)(F)) is amended 6(1) in clause (i) 7(A) by striking clause (ii) and inserting8clauses (ii) and (iii); and

9(B) by striking and at the end;(2) by striking the period at the end of clause11(ii)(II) and by inserting ; and; and12(3) by adding at the end the following:13(iii) the requirement for accredita14tion described in clause (i) shall not applyfor purposes of supplying diabetic testing16supplies, canes, and crutches in the case of

17a pharmacy that is enrolled under section181866(j) as a supplier of durable medical19equipment, prosthetics, orthotics, and supplies.21Any supplier that has submitted an application22for accreditation before August 1, 2009, shall23be deemed as meeting applicable standards and24accreditation requirement under this subparagraphuntil such time as the independent ac

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2781creditation organization takes action on the

2suppliers application..3(d) RESTORING 36-MONTH OXYGEN RENTAL PE4RIOD IN CASE OF SUPPLIER BANKRUPTCY FOR CERTAININDIVIDUALS.Section 1834(a)(5)(F) of such Act (426U.S.C. 1395m(a)(5)(F)) is amended by adding at the end7the following new clause:8(iii) EXCEPTION FOR BANK9

RUPTCY.If a supplier of oxygen to an individualis declared bankrupt and its assets

11are liquidated and at the time of such dec12laration and liquidation more than 2413months of rental payments have been14made, the individual may begin under thissubparagraph a new 36-month rental pe16riod with another supplier of oxygen..17SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS

18MEASUREMENT.19(a) IN GENERAL.The Medicare Payment AdvisoryCommission shall conduct a study regarding bone mass21measurement, including computed tomography, duel-en22ergy x-ray absorptriometry, and vertebral fracture assess23ment. The study shall focus on the following:24(1) An assessment of the adequacy of Medicarepayment rates for such services, taking into account

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2791costs of acquiring the necessary equipment, profes2

sional work time, and practice expense costs.3(2) The impact of Medicare payment changes4since 2006 on beneficiary access to bone mass meas5urement benefits in general and in rural and minor6ity communities specifically.7(3) A review of the clinically appropriate and8recommended use among Medicare beneficiaries and9

how usage rates among such beneficiaries compares10to such recommendations.11(4) In conjunction with the findings under (3),12recommendations, if necessary, regarding methods13for reaching appropriate use of bone mass measure14ment studies among Medicare beneficiaries.15(b) REPORT.The Commission shall submit a report16

to the Congress, not later than 9 months after the date17of the enactment of this Act, containing a description of18the results of the study conducted under subsection (a)19and the conclusions and recommendations, if any, regard20ing each of the issues described in paragraphs (1), (2) (3)21and (4) of such subsection.

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2801Subtitle CProvisions Related to

2Medicare Parts A and B3SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOS4PITAL READMISSIONS.5(a) HOSPITALS. 6(1) IN GENERAL.Section 1886 of the Social7Security Act (42 U.S.C. 1395ww), as amended by8

section 1103(a), is amended by adding at the end9the following new subsection:10(p) ADJUSTMENT TO HOSPITAL PAYMENTS FOR11EXCESS READMISSIONS. 12(1) IN GENERAL.With respect to payment13for discharges from an applicable hospital (as de14fined in paragraph (5)(C)) occurring during a fiscal15

year beginning on or after October 1, 2011, in order16to account for excess readmissions in the hospital,17the Secretary shall reduce the payments that would18otherwise be made to such hospital under subsection19(d) (or section 1814(b)(3), as the case may be) for20such a discharge by an amount equal to the product21of 22(A) the base operating DRG payment23amount (as defined in paragraph (2)) for the24discharge; and

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2811(B) the adjustment factor (described in

2paragraph (3)(A)) for the hospital for the fiscal3year.4(2) BASE OPERATING DRG PAYMENTAMOUNT. 6(A) IN GENERAL.Except as provided in7subparagraph (B), for purposes of this sub8section, the term base operating DRG payment

9amount means, with respect to a hospital for afiscal year, the payment amount that would11otherwise be made under subsection (d) for a12discharge if this subsection did not apply, re13duced by any portion of such amount that is at14tributable to payments under subparagraphs(B) and (F) of paragraph (5).16(B) ADJUSTMENTS.For purposes of17

subparagraph (A), in the case of a hospital that18is paid under section 1814(b)(3), the term base19operating DRG payment amount means thepayment amount under such section.21(3) ADJUSTMENT FACTOR. 22(A) IN GENERAL.For purposes of para23graph (1), the adjustment factor under this24paragraph for an applicable hospital for a fiscalyear is equal to the greater of

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2821(i) the ratio described in subpara2

graph (B) for the hospital for the applica3ble period (as defined in paragraph (5)(D))4for such fiscal year; or(ii) the floor adjustment factor speci6fied in subparagraph (C).7(B) RATIO.The ratio described in this8subparagraph for a hospital for an applicable9period is equal to 1 minus the ratio of (i) the aggregate payments for ex11cess readmissions (as defined in paragraph

12(4)(A)) with respect to an applicable hos13pital for the applicable period; and14(ii) the aggregate payments for alldischarges (as defined in paragraph16(4)(B)) with respect to such applicable17hospital for such applicable period.18

(C) FLOOR ADJUSTMENT FACTOR.For19purposes of subparagraph (A), the floor adjustmentfactor specified in this subparagraph21for 22(i) fiscal year 2012 is 0.99;23(ii) fiscal year 2013 is 0.98;24(iii) fiscal year 2014 is 0.97; or(iv) a subsequent fiscal year is 0.95.

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283

1(4) AGGREGATE PAYMENTS, EXCESS READMIS2SION RATIO DEFINED.For purposes of this sub3section:4(A) AGGREGATE PAYMENTS FOR EXCESSREADMISSIONS.The term aggregate payments6for excess readmissions means, for a hospital7for a fiscal year, the sum, for applicable condi8tions (as defined in paragraph (5)(A)), of the

9product, for each applicable condition, of (i) the base operating DRG payment11amount for such hospital for such fiscal12year for such condition;13(ii) the number of admissions for14such condition for such hospital for suchfiscal year; and16

(iii) the excess readmissions ratio (as17defined in subparagraph (C)) for such hos18pital for the applicable period for such fis19cal year minus 1.(B) AGGREGATE PAYMENTS FOR ALL DIS21CHARGES.The term aggregate payments for22all discharges means, for a hospital for a fiscal23year, the sum of the base operating DRG pay24ment amounts for all discharges for all conditionsfrom such hospital for such fiscal year.

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2841(C) EXCESS READMISSION RATIO.

2(i) IN GENERAL.Subject to clauses3(ii) and (iii), the term excess readmissions4ratio means, with respect to an applicablecondition for a hospital for an applicable6period, the ratio (but not less than 1.0)7of 8(I) the risk adjusted readmis9sions based on actual readmissions, as

determined consistent with a readmis11sion measure methodology that has12been endorsed under paragraph13(5)(A)(ii)(I), for an applicable hospital14for such condition with respect to theapplicable period; to16(II) the risk adjusted expected

17readmissions (as determined con18sistent with such a methodology) for19such hospital for such condition withrespect to such applicable period.21(ii) EXCLUSION OF CERTAIN RE22ADMISSIONS.For purposes of clause (i),23with respect to a hospital, excess readmis24sions shall not include readmissions for anapplicable condition for which there are

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2851fewer than a minimum number (as deter2

mined by the Secretary) of discharges for3such applicable condition for the applicable4period and such hospital.(iii) ADJUSTMENT.In order to pro6mote a reduction over time in the overall7rate of readmissions for applicable condi8tions, the Secretary may provide, beginning9with discharges for fiscal year 2014, for

the determination of the excess readmis11sions ratio under subparagraph (C) to be12based on a ranking of hospitals by read13mission ratios (from lower to higher read14mission ratios) normalized to a benchmarkthat is lower than the 50th percentile.16(5) DEFINITIONS.For purposes of this sub17section:18(A) APPLICABLE CONDITION.The term19

applicable condition means, subject to subparagraph(B), a condition or procedure se21lected by the Secretary among conditions and22procedures for which 23(i) readmissions (as defined in sub24paragraph (E)) that represent conditionsor procedures that are high volume or high

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2861expenditures under this title (or other cri2

teria specified by the Secretary); and3(ii) measures of such readmissions 4(I) have been endorsed by theentity with a contract under section61890(a); and7(II) such endorsed measures8have appropriate exclusions for re9

admissions that are unrelated to theprior discharge (such as a planned re11admission or transfer to another ap12plicable hospital).13(B) EXPANSION OF APPLICABLE CONDI14TIONS.Beginning with fiscal year 2013, theSecretary shall expand the applicable conditions16beyond the 3 conditions for which measures17have been endorsed as described in subpara18graph (A)(ii)(I) as of the date of the enactment

19of this subsection to the additional 4 conditionsthat have been so identified by the Medicare21Payment Advisory Commission in its report to22Congress in June 2007 and to other conditions23and procedures which may include an all-condi24tion measure of readmissions, as determinedappropriate by the Secretary. In expanding

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2871such applicable conditions, the Secretary shall

2seek the endorsement described in subpara3graph (A)(ii)(I) but may apply such measures4without such an endorsement.(C) APPLICABLE HOSPITAL.The term6applicable hospital means a subsection (d) hos7pital or a hospital that is paid under section81814(b)(3).9(D) APPLICABLE PERIOD.

The term

applicableperiod means, with respect to a fiscal

11year, such period as the Secretary shall specify12for purposes of determining excess readmis13sions.14(E) READMISSION.The term readmission means, in the case of an individual who is16discharged from an applicable hospital, the ad17mission of the individual to the same or another

18applicable hospital within a time period speci19fied by the Secretary from the date of such discharge.Insofar as the discharge relates to an21applicable condition for which there is an en22dorsed measure described in subparagraph23(A)(ii)(I), such time period (such as 30 days)24shall be consistent with the time period specifiedfor such measure.

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2881(6) LIMITATIONS ON REVIEW.There shall be

2no administrative or judicial review under section31869, section 1878, or otherwise of 4(A) the determination of base operatingDRG payment amounts;6(B) the methodology for determining the7adjustment factor under paragraph (3), includ8ing excess readmissions ratio under paragraph

9(4)(C), aggregate payments for excess readmissionsunder paragraph (4)(A), and aggregate11payments for all discharges under paragraph12(4)(B), and applicable periods and applicable13conditions under paragraph (5);14(C) the measures of readmissions as describedin paragraph (5)(A)(ii); and16

(D) the determination of a targeted hos17pital under paragraph (8)(B)(i), the increase in18payment under paragraph (8)(B)(ii), the aggre19gate cap under paragraph (8)(C)(i), the hospital-specific limit under paragraph (8)(C)(ii),21and the form of payment made by the Secretary22under paragraph (8)(D).23(7) MONITORING INAPPROPRIATE CHANGES IN24ADMISSIONS PRACTICES.The Secretary shall monitorthe activities of applicable hospitals to determine

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2891if such hospitals have taken steps to avoid patients

2at risk in order to reduce the likelihood of increasing3readmissions for applicable conditions. If the Sec4retary determines that such a hospital has takensuch a step, after notice to the hospital and oppor6tunity for the hospital to undertake action to allevi7ate such steps, the Secretary may impose an appro8priate sanction.9(8) ASSISTANCE TO CERTAIN HOSPITALS. (A) IN GENERAL.For purposes of pro11

viding funds to applicable hospitals to take12steps described in subparagraph (E) to address13factors that may impact readmissions of indi14viduals who are discharged from such a hospital,for fiscal years beginning on or after Oc16tober 1, 2011, the Secretary shall make a pay17ment adjustment for a hospital described in18subparagraph (B), with respect to each such19fiscal year, by a percent estimated by the Secretary

to be consistent with subparagraph (C).21(B) TARGETED HOSPITALS.Subpara22graph (A) shall apply to an applicable hospital23that 24(i) received (or, in the case of an1814(b)(3) hospital, otherwise would have

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2901been eligible to receive) $10,000,000 or

2more in disproportionate share payments3using the latest available data as estimated4by the Secretary; and(ii) provides assurances satisfactory6to the Secretary that the increase in pay7ment under this paragraph shall be used8for purposes described in subparagraph

9(E).(C) CAPS. 11(i) AGGREGATE CAP.The aggregate12amount of the payment adjustment under13this paragraph for a fiscal year shall not14exceed 5 percent of the estimated differencein the spending that would occur16

for such fiscal year with and without appli17cation of the adjustment factor described18in paragraph (3) and applied pursuant to19paragraph (1).(ii) HOSPITAL-SPECIFIC LIMIT.The21aggregate amount of the payment adjust22ment for a hospital under this paragraph23shall not exceed the estimated difference in24spending that would occur for such fiscalyear for such hospital with and without ap

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2911plication of the adjustment factor de2

scribed in paragraph (3) and applied pur3suant to paragraph (1).4(D) FORM OF PAYMENT.The Secretary5may make the additional payments under this6paragraph on a lump sum basis, a periodic7basis, a claim by claim basis, or otherwise.8(E) USE OF ADDITIONAL PAYMENT.

9Funding under this paragraph shall be used by10targeted hospitals for transitional care activities11designed to address the patient noncompliance12issues that result in higher than normal read13mission rates, such as one or more of the fol14lowing:15(i) Providing care coordination serv16ices to assist in transitions from the tar17

geted hospital to other settings.18(ii) Hiring translators and inter19preters.20(iii) Increasing services offered by21discharge planners.22(iv) Ensuring that individuals receive23a summary of care and medication orders24upon discharge.

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2921(v) Developing a quality improve2

ment plan to assess and remedy prevent3able readmission rates.4(vi) Assigning discharged individuals5to a medical home.6(vii) Doing other activities as deter7mined appropriate by the Secretary.8(F) GAO REPORT ON USE OF FUNDS. 9

Not later than 3 years after the date on which10funds are first made available under this para11graph, the Comptroller General of the United12States shall submit to Congress a report on the13use of such funds.14(G) DISPROPORTIONATE SHARE HOS15PITAL PAYMENT.In this paragraph, the term16disproportionate share hospital payment

17means an additional payment amount under18subsection (d)(5)(F)..19(b) APPLICATION TO CRITICAL ACCESS HOS20PITALS.Section 1814(l) of the Social Security Act (4221U.S.C. 1395f(l)) is amended 22(1) in paragraph (5) 23(A) by striking and at the end of sub24paragraph (C);

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2931(B) by striking the period at the end of

2subparagraph (D) and inserting ; and;3(C) by inserting at the end the following4new subparagraph:(E) The methodology for determining the ad6justment factor under paragraph (5), including the7determination of aggregate payments for actual and8expected readmissions, applicable periods, applicable

9conditions and measures of readmissions.; and(D) by redesignating such paragraph as11paragraph (6); and12(2) by inserting after paragraph (4) the fol13lowing new paragraph:14(5) The adjustment factor described in section1886(p)(3) shall apply to payments with respect to a crit16ical access hospital with respect to a cost reporting period17

beginning in fiscal year 2012 and each subsequent fiscal18year (after application of paragraph (4) of this subsection)19in a manner similar to the manner in which such sectionapplies with respect to a fiscal year to an applicable hos21pital as described in section 1886(p)(2)..22(c) POST ACUTE CARE PROVIDERS. 23(1) INTERIM POLICY. 24(A) IN GENERAL.With respect to a readmissionto an applicable hospital or a critical

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2941access hospital (as described in section 1814(l)

2of the Social Security Act) from a post acute3care provider (as defined in paragraph (3)) and4such a readmission is not governed by section5412.531 of title 42, Code of Federal Regula6tions, if the claim submitted by such a post-7acute care provider under title XVIII of the So8cial Security Act indicates that the individual

9was readmitted to a hospital from such a post-10acute care provider or admitted from home and11under the care of a home health agency within1230 days of an initial discharge from an applica13ble hospital or critical access hospital, the pay14ment under such title on such claim shall be the15applicable percent specified in subparagraph16

(B) of the payment that would otherwise be17made under the respective payment system18under such title for such post-acute care pro19vider if this subsection did not apply.20(B) APPLICABLE PERCENT DEFINED.For21purposes of subparagraph (A), the applicable22percent is 23(i) for fiscal or rate year 2012 is240.996;

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2951(ii) for fiscal or rate year 2013 is

20.993; and3(iii) for fiscal or rate year 2014 is40.99.(C) EFFECTIVE DATE.Subparagraph (1)6shall apply to discharges or services furnished7(as the case may be with respect to the applica8ble post acute care provider) on or after the

9first day of the fiscal year or rate year, beginningon or after October 1, 2011, with respect11to the applicable post acute care provider.12(2) DEVELOPMENT AND APPLICATION OF PER13FORMANCE MEASURES. 14(A) IN GENERAL.The Secretary ofHealth and Human Services shall develop ap16propriate measures of readmission rates for17

post acute care providers. The Secretary shall18seek endorsement of such measures by the enti19ty with a contract under section 1890(a) of theSocial Security Act but may adopt and apply21such measures under this paragraph without22such an endorsement. The Secretary shall ex23pand such measures in a manner similar to the24manner in which applicable conditions are expandedunder paragraph (5)(B) of section

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29611886(p) of the Social Security Act, as added by

2subsection (a).3(B) IMPLEMENTATION.The Secretary4shall apply, on or after October 1, 2014, with5respect to post acute care providers, policies6similar to the policies applied with respect to7applicable hospitals and critical access hospitals

8under the amendments made by subsection (a).9The provisions of paragraph (1) shall apply10with respect to any period on or after October111, 2014, and before such application date de12scribed in the previous sentence in the same13manner as such provisions apply with respect to14fiscal or rate year 2014.

15(C) MONITORING AND PENALTIES.The16provisions of paragraph (7) of such section171886(p) shall apply to providers under this18paragraph in the same manner as they apply to19hospitals under such section.20(3) DEFINITIONS.For purposes of this sub21section:22(A) POST ACUTE CARE PROVIDER.The23term post acute care provider means

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2971(i) a skilled nursing facility (as de2

fined in section 1819(a) of the Social Secu3rity Act);4(ii) an inpatient rehabilitation facility(described in section 1886(h)(1)(A) of such6Act);7(iii) a home health agency (as defined8in section 1861(o) of such Act); and9

(iv) a long term care hospital (as definedin section 1861(ccc) of such Act).11(B) OTHER TERMS .The terms applica12ble condition, applicable hospital, and re13admission have the meanings given such terms14in section 1886(p)(5) of the Social SecurityAct, as added by subsection (a)(1).16(d) PHYSICIANS. 17(1) STUDY.The Secretary of Health and

18Human Services shall conduct a study to determine19how the readmissions policy described in the previoussubsections could be applied to physicians.21(2) CONSIDERATIONS.In conducting the22study, the Secretary shall consider approaches such23as 24(A) creating a new code (or codes) andpayment amount (or amounts) under the fee

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2981schedule in section 1848 of the Social Security

2Act (in a budget neutral manner) for services3furnished by an appropriate physician who sees4an individual within the first week after dischargefrom a hospital or critical access hos6pital;7(B) developing measures of rates of read8mission for individuals treated by physicians;9

(C) applying a payment reduction for physicianswho treat the patient during the initial11admission that results in a readmission; and12(D) methods for attributing payments or13payment reductions to the appropriate physi14cian or physicians.(3) REPORT.The Secretary shall issue a pub16lic report on such study not later than the date that17is one year after the date of the enactment of this

18Act.19(e) FUNDING.For purposes of carrying out the provisionsof this section, in addition to funds otherwise avail21able, out of any funds in the Treasury not otherwise ap22propriated, there are appropriated to the Secretary of23Health and Human Services for the Center for Medicare24& Medicaid Services Program Management Account$25,000,000 for each fiscal year beginning with 2010.

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2991Amounts appropriated under this subsection for a fiscal

2year shall be available until expended.3SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM4PLAN AND BUNDLING PILOT PROGRAM.5(a) PLAN. 6(1) IN GENERAL.The Secretary of Health and7Human Services (in this section referred to as the

8Secretary) shall develop a detailed plan to reform9payment for post acute care (PAC) services under10the Medicare program under title XVIII of the So11cial Security Act (in this section referred to as the12Medicare program). The goals of such payment13reform are to 14(A) improve the coordination, quality, and

15efficiency of such services; and16(B) improve outcomes for individuals such17as reducing the need for readmission to hos18pitals from providers of such services.19(2) BUNDLING POST ACUTE SERVICES.The20plan described in paragraph (1) shall include de21tailed specifications for a bundled payment for post22acute services (in this section referred to as the23post acute care bundle), and may include other24approaches determined appropriate by the Secretary.

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3001(3) POST ACUTE SERVICES.For purposes of

2this section, the term post acute services means3services for which payment may be made under the4Medicare program that are furnished by skilled5nursing facilities, inpatient rehabilitation facilities,6long term care hospitals, hospital based outpatient7rehabilitation facilities and home health agencies to

8an individual after discharge of such individual from9a hospital, and such other services determined ap10propriate by the Secretary.11(b) DETAILS.The plan described in subsection12(a)(1) shall include consideration of the following issues:13(1) The nature of payments under a post acute14care bundle, including the type of provider or entity

15to whom payment should be made, the scope of ac16tivities and services included in the bundle, whether17payment for physicians services should be included18in the bundle, and the period covered by the bundle.19(2) Whether the payment should be consoli20dated with the payment under the inpatient prospec21tive system under section 1886 of the Social Secu22rity Act (in this section referred to as MSDRGs)23or a separate payment should be established for such24bundle, and if a separate payment is established,

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3011whether it should be made only upon use of post

2acute care services or for every discharge.3(3) Whether the bundle should be applied4across all categories of providers of inpatient services(including critical access hospitals) and post6acute care services or whether it should be limited7to certain categories of providers, services, or dis8charges, such as high volume or high cost MS

9DRGs.(4) The extent to which payment rates could be11established to achieve offsets for efficiencies that12could be expected to be achieved with a bundle pay13ment, whether such rates should be established on a14national basis or for different geographic areas,should vary according to discharge, case mix,16outliers, and geographic differences in wages or

17other appropriate adjustments, and how to update18such rates.19(5) The nature of protections needed for individualsunder a system of bundled payments to en21sure that individuals receive quality care, are fur22nished the level and amount of services needed as23determined by an appropriate assessment instru24ment, are offered choice of provider, and the extentto which transitional care services would improve

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3031care under the Medicare program and the Medicaid

2program.3(10) Such other issues as the Secretary deems4appropriate.(c) CONSULTATIONS AND ANALYSIS. 6(1) CONSULTATION WITH STAKEHOLDERS.In7developing the plan under subsection (a)(1), the Sec8retary shall consult with relevant stakeholders and

9shall consider experience with such research studiesand demonstrations that the Secretary determines11appropriate.12(2) ANALYSIS AND DATA COLLECTION.In de13veloping such plan, the Secretary shall 14(A) analyze the issues described in subsection(b) and other issues that the Secretary16determines appropriate;

17(B) analyze the impacts (including geo18graphic impacts) of post acute service reform19approaches, including bundling of such serviceson individuals, hospitals, post acute care pro21viders, and physicians;22(C) use existing data (such as data sub23mitted on claims) and collect such data as the24Secretary determines are appropriate to developsuch plan required in this section; and

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3041(D) if patient functional status measures

2are appropriate for the analysis, to the extent3practical, build upon the CARE tool being de4veloped pursuant to section 5008 of the DeficitReduction Act of 2005.6(d) ADMINISTRATION. 7(1) FUNDING.For purposes of carrying out8the provisions of this section, in addition to funds

9otherwise available, out of any funds in the Treasurynot otherwise appropriated, there are appropriated11to the Secretary for the Center for Medicare & Med12icaid Services Program Management Account13$15,000,000 for each of the fiscal years 201014through 2012. Amounts appropriated under thisparagraph for a fiscal year shall be available until16expended.

17(2) EXPEDITED DATA COLLECTION.Chapter1835 of title 44, United States Code shall not apply to19this section.(e) PUBLIC REPORTS. 21(1) INTERIM REPORTS.The Secretary shall22issue interim public reports on a periodic basis on23the plan described in subsection (a)(1), the issues24described in subsection (b), and impact analyses asthe Secretary determines appropriate.

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3051(2) FINAL REPORT.Not later than the date

2that is 3 years after the date of the enactment of3this Act, the Secretary shall issue a final public re4port on such plan, including analysis of issues describedin subsection (b) and impact analyses.6(f) CONVERSION OF ACUTE CARE EPISODE DEM7ONSTRATION TO PILOT PROGRAM AND EXPANSION TO IN8CLUDE POST ACUTE SERVICES. 9(1) IN GENERAL.Part E of title XVIII of the

Social Security Act is amended by inserting after11section 1866C the following new section:12SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEM13ONSTRATION TO PILOT PROGRAM AND EX14PANSION TO INCLUDE POST ACUTE SERVICES.16(a) IN GENERAL.By not later than January 1,172011, the Secretary shall, for the purpose of promoting18the use of bundled payments to promote efficient and high

19quality delivery of care (1) convert the acute care episode demonstra21tion program conducted under section 1866C to a22pilot program; and23(2) subject to subsection (c), expand such pro24gram as so converted to include post acute servicesand such other services the Secretary determines to

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3061be appropriate, which may include transitional serv2

ices.3(b) SCOPE.The pilot program under subsection4(a) may include additional geographic areas and additionalconditions which account for significant program spend6ing, as defined by the Secretary. Nothing in this sub7section shall be construed as limiting the number of hos8pital and physician groups or the number of hospital and9post-acute provider groups that may participate in thepilot program.

11(c) LIMITATION.The Secretary shall only expand12the pilot program under subsection (a)(2) if the Secretary13finds that 14(1) the demonstration program under section1866C and pilot program under this section main16tain or increase the quality of care received by indi17viduals enrolled under this title; and18(2) such demonstration program and pilot pro19

gram reduce program expenditures and, based onthe certification under subsection (d), that the ex21pansion of such pilot program would result in esti22mated spending that would be less than what spend23ing would otherwise be in the absence of this section.24(d) CERTIFICATION.For purposes of subsection(c), the Chief Actuary of the Centers for Medicare & Med

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3071icaid Services shall certify whether expansion of the pilot

2program under this section would result in estimated3spending that would be less than what spending would4otherwise be in the absence of this section.(e) VOLUNTARY PARTICIPATION.Nothing in this6paragraph shall be construed as requiring the participa7tion of an entity in the pilot program under this section..8(2) CONFORMING AMENDMENT.Section

91866C(b) of the Social Security Act (42 U.S.C.1395cc3(b)) is amended by striking The Sec11retary and inserting Subject to section 1866D, the12Secretary.13SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.14Section 1895(b)(3)(B)(ii) of the Social Security Act(42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended 16(1) in subclause (IV), by striking and;

17(2) by redesignating subclause (V) as subclause18(VII); and19(3) by inserting after subclause (IV) the followingnew subclauses:21(V) 2007, 2008, and 2009, sub22ject to clause (v), the home health23market basket percentage increase;24(VI) 2010, subject to clause (v),0 percent; and.

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308

SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH

CARE.

(a) ACCELERATION OF ADJUSTMENT FOR CASE MIXCHANGES.Section 1895(b)(3)(B) of the Social SecurityAct (42 U.S.C. 1395fff(b)(3)(B)) is amended (1) in clause (iv), by striking Insofar as andinserting Subject to clause (vi), insofar as; and(2) by adding at the end the following newclause:(vi) SPECIAL RULE FOR CASE MIX

CHANGES FOR 2011. (I) IN GENERAL.With respect

to the case mix adjustments establishedin section 484.220(a) of title42, Code of Federal Regulations, theSecretary shall apply, in 2010, the adjustmentestablished in paragraph (3)of such section for 2011, in additionto applying the adjustment establishedin paragraph (2) for 2010.

(II) CONSTRUCTION.Nothingin this clause shall be construed as

limiting the amount of adjustment forcase mix for 2010 or 2011 if more recentdata indicate an appropriate adjustmentthat is greater than the

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3091amount established in the section de2

scribed in subclause (I)..3(b) REBASING HOME HEALTH PROSPECTIVE PAY4MENT AMOUNT.Section 1895(b)(3)(A) of the Social SecurityAct (42 U.S.C. 1395fff(b)(3)(A)) is amended 6(1) in clause (i) 7(A) in subclause (III), by inserting and8before 2011 after after the period described9

in subclause (II); and(B) by inserting after subclause (III) the

11following new subclauses:12(IV) Subject to clause (iii)(I),13for 2011, such amount (or amounts)14shall be adjusted by a uniform percentagedetermined to be appropriate16by the Secretary based on analysis of

17factors such as changes in the average18number and types of visits in an epi19sode, the change in intensity of visitsin an episode, growth in cost per epi21sode, and other factors that the Sec22retary considers to be relevant.23(V) Subject to clause (iii)(II),24for a year after 2011, such a amount(or amounts) shall be equal to the

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310

1amount (or amounts) determined2under this clause for the previous3year, updated under subparagraph4(B).; and(2) by adding at the end the following new6clause:7(iii) SPECIAL RULE IN CASE OF IN8ABILITY TO EFFECT TIMELY REBASING.

9(I) APPLICATION OF PROXYAMOUNT FOR 2011.If the Secretary11is not able to compute the amount (or12amounts) under clause (i)(IV) so as to13permit, on a timely basis, the applica14tion of such clause for 2011, the Secretaryshall substitute for such

16amount (or amounts) 95 percent of17the amount (or amounts) that would18otherwise be specified under clause19(i)(III) if it applied for 2011.(II) ADJUSTMENT FOR SUBSE21QUENT YEARS BASED ON DATA.If22the Secretary applies subclause (I),23the Secretary before July 1, 2011,24shall compare the amount (oramounts) applied under such sub-

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311

1clause with the amount (or amounts)2that should have been applied under3clause (i)(IV). The Secretary shall de4crease or increase the prospective pay5ment amount (or amounts) under6clause (i)(V) for 2012 (or, at the Sec7retarys discretion, over a period of8

several years beginning with 2012) by9the amount (if any) by which the10amount (or amounts) applied under11subclause (I) is greater or less, re12spectively, than the amount (or13amounts) that should have been ap14plied under clause (i)(IV)..15SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVE16

MENTS INTO MARKET BASKET UPDATE FOR17HOME HEALTH SERVICES.18(a) IN GENERAL.Section 1895(b)(3)(B) of the So19cial Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amend20ed 21(1) in clause (iii), by inserting (including being22subject to the productivity adjustment described in23section 1886(b)(3)(B)(iii)(II)) after in the same24manner; and

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3121(2) in clause (v)(I), by inserting (but not

2below 0) after reduced.3(b) EFFECTIVE DATE.The amendment made by4subsection (a) shall apply to home health market basketpercentage increases for years beginning with 2010.6SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE7PROHIBITION ON CERTAIN PHYSICIAN RE8FERRALS MADE TO HOSPITALS.

9(a) IN GENERAL.Section 1877 of the Social SecurityAct (42 U.S.C. 1395nn) is amended 11(1) in subsection (d)(2) 12(A) in subparagraph (A), by striking13and at the end;14(B) in subparagraph (B), by striking theperiod at the end and inserting ; and; and16

(C) by adding at the end the following new17subparagraph:18(C) in the case where the entity is a hos19pital, the hospital meets the requirements ofparagraph (3)(D).;21(2) in subsection (d)(3) 22(A) in subparagraph (B), by striking23and at the end;24(B) in subparagraph (C), by striking theperiod at the end and inserting ; and; and

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3131(C) by adding at the end the following new

2subparagraph:3(D) the hospital meets the requirements4described in subsection (i)(1).;(3) by amending subsection (f) to read as fol6lows:7(f) REPORTING AND DISCLOSURE REQUIRE8MENTS. 9(1) IN GENERAL.

Each entity providing covereditems or services for which payment may be

11made under this title shall provide the Secretary12with the information concerning the entitys owner13ship, investment, and compensation arrangements,14including (A) the covered items and services pro16vided by the entity, and17(B) the names and unique physician iden18

tification numbers of all physicians with an19ownership or investment interest (as describedin subsection (a)(2)(A)), or with a compensa21tion arrangement (as described in subsection22(a)(2)(B)), in the entity, or whose immediate23relatives have such an ownership or investment24interest or who have such a compensation relationshipwith the entity.

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3141Such information shall be provided in such form,

2manner, and at such times as the Secretary shall3specify. The requirement of this subsection shall not4apply to designated health services provided outsidethe United States or to entities which the Secretary6determines provide services for which payment may7be made under this title very infrequently.8(2) REQUIREMENTS FOR HOSPITALS WITH9

PHYSICIAN OWNERSHIP OR INVESTMENT.In thecase of a hospital that meets the requirements de11scribed in subsection (i)(1), the hospital shall 12(A) submit to the Secretary an initial re13port, and periodic updates at a frequency deter14mined by the Secretary, containing a detaileddescription of the identity of each physician16owner and physician investor and any other17

owners or investors of the hospital;18(B) require that any referring physician19owner or investor discloses to the individualbeing referred, by a time that permits the indi21vidual to make a meaningful decision regarding22the receipt of services, as determined by the23Secretary, the ownership or investment interest,24as applicable, of such referring physician in thehospital; and

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3151(C) disclose the fact that the hospital is

2partially or wholly owned by one or more physi3cians or has one or more physician investors 4(i) on any public website for the hos5pital; and6(ii) in any public advertising for the7hospital.8The information to be reported or disclosed under

9this paragraph shall be provided in such form, man10ner, and at such times as the Secretary shall specify.11The requirements of this paragraph shall not apply12to designated health services furnished outside the13United States or to entities which the Secretary de14termines provide services for which payment may be15made under this title very infrequently.16

(3) PUBLICATION OF INFORMATION.The17Secretary shall publish, and periodically update, the18information submitted by hospitals under paragraph19(2)(A) on the public Internet website of the Centers20for Medicare & Medicaid Services.;21(4) by amending subsection (g)(5) to read as22follows:23(5) FAILURE TO REPORT OR DISCLOSE INFOR24MATION.

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3161(A) REPORTING.Any person who is re2

quired, but fails, to meet a reporting require3ment of paragraphs (1) and (2)(A) of sub4section (f) is subject to a civil money penalty of5not more than $10,000 for each day for which6reporting is required to have been made.7(B) DISCLOSURE.Any physician who is8required, but fails, to meet a disclosure require9ment of subsection (f)(2)(B) or a hospital that

10is required, but fails, to meet a disclosure re11quirement of subsection (f)(2)(C) is subject to12a civil money penalty of not more than $10,00013for each case in which disclosure is required to14have been made.15(C) APPLICATION.The provisions of16section 1128A (other than the first sentence of

17subsection (a) and other than subsection (b))18shall apply to a civil money penalty under sub19paragraphs (A) and (B) in the same manner as20such provisions apply to a penalty or proceeding21under section 1128A(a).; and22(5) by adding at the end the following new sub23section:

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3171(i) REQUIREMENTS TO QUALIFY FOR RURAL PRO2

VIDER AND HOSPITAL OWNERSHIP EXCEPTIONS TO3SELF-REFERRAL PROHIBITION. 4(1) REQUIREMENTS DESCRIBED.For purposesof subsection (d)(3)(D), the requirements de6scribed in this paragraph are as follows:7(A) PROVIDER AGREEMENT.The hos8pital had 9(i) physician ownership or investment

on January 1, 2009; and11(ii) a provider agreement under sec12tion 1866 in effect on such date.13(B) PROHIBITION ON PHYSICIAN OWNER14SHIP OR INVESTMENT.The percentage of thetotal value of the ownership or investment in16terests held in the hospital, or in an entity17whose assets include the hospital, by physician18owners or investors in the aggregate does not

19exceed such percentage as of the date of enactmentof this subsection.21(C) PROHIBITION ON EXPANSION OF FA22CILITY CAPACITY.Except as provided in para23graph (2), the number of operating rooms, pro24cedure rooms, or beds of the hospital at anytime on or after the date of the enactment of

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3181this subsection are no greater than the number

2of operating rooms, procedure rooms, or beds,3respectively, as of such date.4(D) ENSURING BONA FIDE OWNERSHIP5AND INVESTMENT. 6(i) Any ownership or investment in7terests that the hospital offers to a physi8cian are not offered on more favorable

9terms than the terms offered to a person10who is not in a position to refer patients11or otherwise generate business for the hos12pital.13(ii) The hospital (or any investors in14the hospital) does not directly or indirectly15provide loans or financing for any physi16

cian owner or investor in the hospital.17(iii) The hospital (or any investors in18the hospital) does not directly or indirectly19guarantee a loan, make a payment toward20a loan, or otherwise subsidize a loan, for21any physician owner or investor or group22of physician owners or investors that is re23lated to acquiring any ownership or invest24ment interest in the hospital.

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3191(iv) Ownership or investment returns

2are distributed to each owner or investor in3the hospital in an amount that is directly4proportional to the ownership or investmentinterest of such owner or investor in6the hospital.7(v) The investment interest of the8

owner or investor is directly proportional9to the owners or investors capital contributionsmade at the time the ownership11or investment interest is obtained.12(vi) Physician owners and investors13do not receive, directly or indirectly, any14guaranteed receipt of or right to purchaseother business interests related to the hos16

pital, including the purchase or lease of17any property under the control of other18owners or investors in the hospital or lo19cated near the premises of the hospital.(vii) The hospital does not offer a21physician owner or investor the oppor22tunity to purchase or lease any property23under the control of the hospital or any24other owner or investor in the hospital onmore favorable terms than the terms of-

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3201fered to a person that is not a physician

2owner or investor.3(viii) The hospital does not condition4any physician ownership or investment interestseither directly or indirectly on the6physician owner or investor making or in7fluencing referrals to the hospital or other8wise generating business for the hospital.9(E) PATIENT SAFETY.

In the case of ahospital that does not offer emergency services,

11the hospital has the capacity to 12(i) provide assessment and initial13treatment for medical emergencies; and14(ii) if the hospital lacks additionalcapabilities required to treat the emergency16involved, refer and transfer the patient

17with the medical emergency to a hospital18with the required capability.19(F) LIMITATION ON APPLICATION TOCERTAIN CONVERTED FACILITIES.The hos21pital was not converted from an ambulatory22surgical center to a hospital on or after the date23of enactment of this subsection.24(2) EXCEPTION TO PROHIBITION ON EXPANSIONOF FACILITY CAPACITY.

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3211(A) PROCESS.

2(i) ESTABLISHMENT.The Secretary3shall establish and implement a process4under which a hospital may apply for an5exception from the requirement under6paragraph (1)(C).7(ii) OPPORTUNITY FOR COMMUNITY

8INPUT.The process under clause (i) shall9provide persons and entities in the commu10nity in which the hospital applying for an11exception is located with the opportunity to12provide input with respect to the applica13tion.14(iii) TIMING FOR IMPLEMENTA15TION.The Secretary shall implement the

16process under clause (i) on the date that is17one month after the promulgation of regu18lations described in clause (iv).19(iv) REGULATIONS.Not later than20the first day of the month beginning 1821months after the date of the enactment of22this subsection, the Secretary shall promul23gate regulations to carry out the process24under clause (i). The Secretary may issue

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3221such regulations as interim final regula2

tions.3(B) FREQUENCY.The process described4in subparagraph (A) shall permit a hospital toapply for an exception up to once every 2 years.6(C) PERMITTED INCREASE. 7(i) IN GENERAL.Subject to clause8(ii) and subparagraph (D), a hospital

9granted an exception under the process describedin subparagraph (A) may increase11the number of operating rooms, procedure12rooms, or beds of the hospital above the13baseline number of operating rooms, proce14dure rooms, or beds, respectively, of thehospital (or, if the hospital has been grant16ed a previous exception under this para17graph, above the number of operating

18rooms, procedure rooms, or beds, respec19tively, of the hospital after the applicationof the most recent increase under such an21exception).22(ii) 100 PERCENT INCREASE LIMITA23TION.The Secretary shall not permit an24increase in the number of operating rooms,procedure rooms, or beds of a hospital

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3231under clause (i) to the extent such increase

2would result in the number of operating3rooms, procedure rooms, or beds of the4hospital exceeding 200 percent of the baselinenumber of operating rooms, procedure6rooms, or beds of the hospital.7(iii) BASELINE NUMBER OF OPER8ATING ROOMS, PROCEDURE ROOMS, OR

9BEDS.In this paragraph, the term baselinenumber of operating rooms, procedure11rooms, or beds means the number of oper12ating rooms, procedure rooms, or beds of a13hospital as of the date of enactment of this14subsection.(D) INCREASE LIMITED TO FACILITIES16ON THE MAIN CAMPUS OF THE HOSPITAL.

17Any increase in the number of operating rooms,18procedure rooms, or beds of a hospital pursuant19to this paragraph may only occur in facilities onthe main campus of the hospital.21(E) CONDITIONS FOR APPROVAL OF AN22INCREASE IN FACILITY CAPACITY.The Sec23retary may grant an exception under the proc24ess described in subparagraph (A) only to ahospital

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3241(i) that is located in a county in

2which the percentage increase in the popu3lation during the most recent 5-year period4for which data are available is estimated tobe at least 150 percent of the percentage6increase in the population growth of the7State in which the hospital is located dur8ing that period, as estimated by Bureau of9

the Census and available to the Secretary;(ii) whose annual percent of total in11patient admissions that represent inpatient12admissions under the program under title13XIX is estimated to be equal to or greater14than the average percent with respect tosuch admissions for all hospitals located in16the county in which the hospital is located;17

(iii) that does not discriminate18against beneficiaries of Federal health care19programs and does not permit physicianspracticing at the hospital to discriminate21against such beneficiaries;22(iv) that is located in a State in23which the average bed capacity in the24State is estimated to be less than the nationalaverage bed capacity;

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3251(v) that has an average bed occu2

pancy rate that is estimated to be greater3than the average bed occupancy rate in the4State in which the hospital is located; and(vi) that meets other conditions as6determined by the Secretary.7(F) PROCEDURE ROOMS.In this sub8section, the term procedure rooms includes9

rooms in which catheterizations, angiographies,angiograms, and endoscopies are furnished, but11such term shall not include emergency rooms or12departments (except for rooms in which cath13eterizations, angiographies, angiograms, and14endoscopies are furnished).(G) PUBLICATION OF FINAL DECI16SIONS.Not later than 120 days after receiving17a complete application under this paragraph,

18the Secretary shall publish on the public Inter19net website of the Centers for Medicare & MedicaidServices the final decision with respect to21such application.22(H) LIMITATION ON REVIEW.There23shall be no administrative or judicial review24under section 1869, section 1878, or otherwiseof the exception process under this paragraph,

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3261including the establishment of such process,

2and any determination made under such proc3ess.4(3) PHYSICIAN OWNER OR INVESTOR DEFINED.For purposes of this subsection and sub6section (f)(2), the term physician owner or investor 7means a physician (or an immediate family member8of such physician) with a direct or an indirect own9ership or investment interest in the hospital.(4) PATIENT SAFETY REQUIREMENT.

In the11

case of a hospital to which the requirements of para12graph (1) apply, insofar as the hospital admits a pa13tient and does not have any physician available on14the premises 24 hours per day, 7 days per week, beforeadmitting the patient 16(A) the hospital shall disclose such fact to17the patient; and18

(B) following such disclosure, the hospital19shall receive from the patient a signed acknowledgmentthat the patient understands such fact.21(5) CLARIFICATION.Nothing in this sub22section shall be construed as preventing the Sec23retary from terminating a hospitals provider agree24ment if the hospital is not in compliance with regulationspursuant to section 1866..

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3271(b) VERIFYING COMPLIANCE.The Secretary of

2Health and Human Services shall establish policies and3procedures to verify compliance with the requirements de4scribed in subsections (i)(1) and (i)(4) of section 1877 of5the Social Security Act, as added by subsection (a)(5).6The Secretary may use unannounced site reviews of hos7pitals and audits to verify compliance with such require8ments.9

(c) IMPLEMENTATION. 10

(1) FUNDING.For purposes of carrying out11the amendments made by subsection (a) and the12provisions of subsection (b), in addition to funds13otherwise available, out of any funds in the Treasury14not otherwise appropriated there are appropriated to15the Secretary of Health and Human Services for the

16Centers for Medicare & Medicaid Services Program17Management Account $5,000,000 for each fiscal18year beginning with fiscal year 2010. Amounts ap19propriated under this paragraph for a fiscal year20shall be available until expended.21(2) ADMINISTRATION.Chapter 35 of title 44,22United States Code, shall not apply to the amend23ments made by subsection (a) and the provisions of24subsection (b).

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328

1SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEO2GRAPHIC ADJUSTMENT FACTORS UNDER3MEDICARE.4(a) IN GENERAL.The Secretary of Health andHuman Services shall enter into a contract with the Insti6tute of Medicine of the National Academy of Science to7conduct a comprehensive empirical study, and provide rec8ommendations as appropriate, on the accuracy of the geo9

graphic adjustment factors established under sections1848(e) and 1886(d)(3)(E) of the Social Security Act (4211U.S.C. 1395w4(e), 11395ww(d)(3)).12(b) MATTERS INCLUDED.Such study shall include13an evaluation and assessment of the following with respect14to such adjustment factors:(1) Empirical validity of the adjustment factors.16(2) Methodology used to determine the adjust17

ment factors.18(3) Measures used for the adjustment factors,19taking into account (A) timeliness of data and frequency of re21visions to such data;22(B) sources of data and the degree to23which such data are representative of costs; and24(C) operational costs of providers who participatein Medicare.

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3291(c) EVALUATION.Such study shall, within the con2

text of the United States health care marketplace, evalu3ate and consider the following:4(1) The effect of the adjustment factors on thelevel and distribution of the health care workforce6and resources, including 7(A) recruitment and retention that takes8into account workforce mobility between urban9

and rural areas;(B) ability of hospitals and other facilities11to maintain an adequate and skilled workforce;12and13(C) patient access to providers and needed14medical technologies.(2) The effect of the adjustment factors on pop16ulation health and quality of care.17

(3) The effect of the adjustment factors on the18ability of providers to furnish efficient, high value19care.(d) REPORT.The contract under subsection (a)21shall provide for the Institute of Medicine to submit, not22later than one year after the date of the enactment of this23Act, to the Secretary and the Congress a report containing24results and recommendations of the study conductedunder this section.

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3301(e) FUNDING.There are authorized to be appro2

priated to carry out this section such sums as may be nec3essary.4SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TOADDRESS GEOGRAPHIC INEQUITIES.6(a) IN GENERAL.The Secretary of Health and7Human Services, taking into account the recommenda8tions made in the report under section 1157(d), shall in9clude in the proposed rules published to implementchanges to payment systems for physicians and hospitals

11under sections 1848(e) and 1886(d)(3)(E), respectively, of12the Social Security Act, proposals to revise geographic ad13justment factors for such payment systems for services14furnished under the Medicare program. Such proposedrules shall be published in the rulemaking period imme16diately following submission of the report under section171157(d).18(b) PAYMENT ADJUSTMENTS.

19(1) FUNDING FOR IMPROVEMENTS.In makingany changes to the geographic adjustment factors in21accordance with subsection (a), the Secretary shall22use funds made available for such purposes under23subsection (c).24(2) ENSURING FAIRNESS.In carrying out thissubsection, the Secretary shall not change payment

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3311rates to be less than they would have been had this

2section not been enacted.3(c) FUNDING.Amounts in the Medicare Improve4ment Fund under section 1898 of the Social Security Act(42 U.S.C. 1395iii), as amended by section 1146, shall6be available to the Secretary to make changes to the geo7graphic adjustments factors established under sections81848(e) and 1886(d)(3)(E) of the Social Security Act. For9

such purpose, such funds shall be available for expenditurefor services furnished before January 1, 2014, and shall11not exceed the total amounts available under such Fund12for such period. No more than one-half of such amounts13shall be available for expenditure for services furnished in14any one payment year.Subtitle DMedicare Advantage16Reforms

17PART 1PAYMENT AND ADMINISTRATION18SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-19SERVICE COSTS.Section 1853 of the Social Security Act (42 U.S.C.211395w23) is amended 22(1) in subsection (j)(1)(A) 23(A) by striking beginning with 2007 and24inserting for 2007, 2008, 2009, and 2010;and

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3331(2) SPECIFIED AMOUNT.The amount speci2

fied in this paragraph for an area and year is the3amount specified in subsection (c)(1)(D)(i) for the4area and year adjusted (in a manner specified by the5Secretary) to take into account the phase-out in the6indirect costs of medical education from capitation7rates described in subsection (k)(4).8(3) FEE-FOR-SERVICE PAYMENT FLOOR.

In9

no case shall the blended benchmark amount for an10area and year be less than the amount specified in11paragraph (2).12(4) EXCEPTION FOR PACE PLANS.This sub13section shall not apply to payments to a PACE pro14gram under section 1894..15SEC. 1162. QUALITY BONUS PAYMENTS.

16(a) IN GENERAL.Section 1853 of the Social Secu17rity Act (42 U.S.C. 1395w-23), as amended by section181161, is amended 19(1) in subsection (j), by inserting subject to20subsection (o), after For purposes of this part;21and22(2) by adding at the end the following new sub23section:24(o) QUALITY BASED PAYMENT ADJUSTMENT.

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3341(1) HIGH QUALITY PLAN ADJUSTMENT.For

2years beginning with 2011, in the case of a Medicare3Advantage plan that is identified (under paragraph4(3)(E)(ii)) as a high quality MA plan with respectto the year, the blended benchmark amount under6subsection (n)(1) shall be increased 7(A) for 2011, by 1.0 percent;8(B) for 2012, by 2.0 percent; and9

(C) for a subsequent year, by 3.0 percent.(2) IMPROVED QUALITY PLAN ADJUSTMENT. 11For years beginning with 2011, in the case of a12Medicare Advantage plan that is identified (under13paragraph (3)(E)(iii)) as an improved quality MA14plan with respect to the year, blended benchmarkamount under subsection (n)(1) shall be increased

16(A) for 2011, by 0.33 percent;17(B) for 2012, by 0.66 percent; and18(C) for a subsequent year, by 1.0 percent.19(3) DETERMINATIONS OF QUALITY. (A) QUALITY PERFORMANCE.The Sec21retary shall provide for the computation of a22quality performance score for each Medicare23Advantage plan to be applied for each year be24ginning with 2010.(B) COMPUTATION OF SCORE.

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3351(i) FOR YEARS BEFORE 2014.For

2years before 2014, the quality performance3score for a Medicare Advantage plan shall4be computed based on a blend (as designatedby the Secretary) of the plans per6formance on 7(I) HEDIS effectiveness of care8quality measures;

9(II) CAHPS quality measures;and11(III) such other measures of12clinical quality as the Secretary may13specify.14Such measures shall be risk-adjusted asthe Secretary deems appropriate.16

(ii) ESTABLISHMENT OF OUTCOME-17BASED MEASURES.By not later than for182013 the Secretary shall implement report19ing requirements for quality under thissection on measures selected under clause21(iii) that reflect the outcomes of care expe22rienced by individuals enrolled in Medicare23Advantage plans (in addition to measures24described in clause (i)). Such measuresmay include

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3361(I) measures of rates of admis2

sion and readmission to a hospital;3(II) measures of prevention4quality, such as those established bythe Agency for Healthcare Research6and Quality (that include hospital ad7mission rates for specified conditions);8(III) measures of patient mor9tality and morbidity following surgery;(IV) measures of health func11tioning (such as limitations on activi12

ties of daily living) and survival for13patients with chronic diseases;14(V) measures of patient safety;and16(VI) other measure of outcomes17and patient quality of life as deter18mined by the Secretary.

19Such measures shall be risk-adjusted asthe Secretary deems appropriate. In deter21mining the quality measures to be used22under this clause, the Secretary shall take23into consideration the recommendations of24the Medicare Payment Advisory Commissionin its report to Congress under section

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3371168 of the Medicare Improvements for Pa2

tients and Providers Act of 2008 (Public3Law 110275) and shall provide pref4erence to measures collected on and comparableto measures used in measuring6quality under parts A and B.7(iii) RULES FOR SELECTION OF8MEASURES.The Secretary shall select9

measures for purposes of clause (ii) consistentwith the following:11(I) The Secretary shall provide12preference to clinical quality measures13that have been endorsed by the entity14with a contract with the Secretaryunder section 1890(a).16(II) Prior to any measure being

17selected under this clause, the Sec18retary shall publish in the Federal19Register such measure and provide fora period of public comment on such21measure.22(iv) TRANSITIONAL USE OF23BLEND.For payments for 2014 and242015, the Secretary may compute the qualityperformance score for a Medicare Ad-

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3381vantage plan based on a blend of the meas2

ures specified in clause (i) and the meas3ures described in clause (ii) and selected4under clause (iii).5(v) USE OF QUALITY OUTCOMES6MEASURES.For payments beginning with72016, the preponderance of measures used8under this paragraph shall be quality out9

comes measures described in clause (ii)10and selected under clause (iii).11(C) DATA USED IN COMPUTING SCORE. 12Such score for application for 13(i) payments in 2011 shall be based14on quality performance data for plans for152009; and

16(ii) payments in 2012 and a subse17quent year shall be based on quality per18formance data for plans for the second19preceding year.20(D) REPORTING OF DATA.Each Medi21care Advantage organization shall provide for22the reporting to the Secretary of quality per23formance data described in subparagraph (B)24(in order to determine a quality performance

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3391score under this paragraph) in such time and

2manner as the Secretary shall specify.3(E) RANKING OF PLANS. 4(i) INITIAL RANKING.Based on thequality performance score described in sub6paragraph (B) achieved with respect to a7year, the Secretary shall rank plan per8formance 9(I) from highest to lowest basedon absolute scores; and

11(II) from highest to lowest12based on percentage improvement in13the score for the plan from the pre14vious year.A plan which does not report quality per16formance data under subparagraph (D)17shall be counted, for purposes of such

18ranking, as having the lowest plan per19formance and lowest percentage improvement.21(ii) IDENTIFICATION OF HIGH QUAL22ITY PLANS IN TOP QUINTILE BASED ON23PROJECTED ENROLLMENT.The Secretary24shall, based on the scores for each planunder clause (i)(I) and the Secretarys pro-

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3401jected enrollment for each plan and subject

2to clause (iv), identify those Medicare Ad3vantage plans with the highest score that,4based upon projected enrollment, are projectedto include in the aggregate 20 per6cent of the total projected enrollment for7the year. For purposes of this subsection,8a plan so identified shall be referred to in9

this subsection as ahigh quality MAplan.

11(iii) IDENTIFICATION OF IMPROVED12QUALITY PLANS IN TOP QUINTILE BASED13ON PROJECTED ENROLLMENT.The Sec14retary shall, based on the percentage improvementscore for each plan under clause16(i)(II) and the Secretarys projected enroll17ment for each plan and subject to clause

18(iv), identify those Medicare Advantage19plans with the greatest percentage improvementscore that, based upon projected21enrollment, are projected to include in the22aggregate 20 percent of the total projected23enrollment for the year. For purposes of24this subsection, a plan so identified that isnot a high quality plan for the year shall

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3411be referred to in this subsection as an im2

proved quality MA plan.3(iv) AUTHORITY TO DISQUALIFY4CERTAIN PLANS.In applying clauses (ii)5and (iii), the Secretary may determine not6to identify a Medicare Advantage plan if7the Secretary has identified deficiencies in8

the plans compliance with rules for such9

plans under this part.10(F) NOTIFICATION.The Secretary, in11the annual announcement required under sub12section (b)(1)(B) in 2011 and each succeeding13year, shall notify the Medicare Advantage orga14nization that is offering a high quality plan or15an improved quality plan of such identification

16for the year and the quality performance pay17ment adjustment for such plan for the year.18The Secretary shall provide for publication on19the website for the Medicare program of the in20formation described in the previous sentence..21SEC. 1163. EXTENSION OF SECRETARIAL CODING INTEN22SITY ADJUSTMENT AUTHORITY.23Section 1853(a)(1)(C)(ii) of the Social Security Act24(42 U.S.C. 1395w23(a)(1)(C)(ii) is amended

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3421(1) in the matter before subclause (I), by strik2

ing through 2010 and inserting and each subse3quent year; and4(2) in subclause (II) (A) by inserting periodically before con6duct an analysis;7(B) by inserting on a timely basis after8are incorporated; and9(C) by striking only for 2008, 2009, and

2010

and insertingfor 2008 and subsequent11

years.12SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY13ELECTION PERIODS.14(a) 2 WEEK PROCESSING PERIOD FOR ANNUAL ENROLLMENTPERIOD (AEP).Paragraph (3)(B) of section161851(e) of the Social Security Act (42 U.S.C. 1395w 17

21(e)) is amended 18(1) by striking and at the end of clause (iii);19(2) in clause (iv) (A) by striking and succeeding years 21and inserting , 2008, 2009, and 2010; and22(B) by striking the period at the end and23inserting ; and; and24(3) by adding at the end the following newclause:

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3431(v) with respect to 2011 and suc2

ceeding years, the period beginning on No3vember 1 and ending on December 15 of4the year before such year..(b) ELIMINATION OF 3-MONTH ADDITIONAL OPEN6ENROLLMENT PERIOD (OEP).Effective for plan years7beginning with 2011, paragraph (2) of such section is8amended by striking subparagraph (C).9

SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.Section 1876(h)(5)(C) of the Social Security Act (4211U.S.C. 1395mm(h)(5)(C)) is amended 12(1) in clause (ii), by striking January 1,132010 and inserting January 1, 2012; and14(2) in clause (iii), by striking the service areafor the year and inserting the portion of the16plans service area for the year that is within the

17service area of a reasonable cost reimbursement con18tract.19SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYERGROUP PLANS.21(a) IN GENERAL.The first sentence of paragraph22(2) of section 1857(i) of the Social Security Act (4223U.S.C. 1395w27(i)) is amended by inserting before the24period at the end the following: , but only if 90 percentof the Medicare Advantage eligible individuals enrolled

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3441under such plan reside in a county in which the MA orga2

nization offers an MA local plan.3(b) EFFECTIVE DATE.The amendment made by4subsection (a) shall apply for plan years beginning on orafter January 1, 2011, and shall not apply to plans which6were in effect as of December 31, 2010.7SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.8(a) REPORT TO CONGRESS.Not later than 1 year

9after the date of the enactment of this Act, the Secretaryof Health and Human Services shall submit to Congress11a report that evaluates the adequacy of the risk adjust12ment system under section 1853(a)(1)(C) of the Social Se13curity Act (42 U.S.C. 139523(a)(1)(C)) in predicting14costs for beneficiaries with chronic or co-morbid conditions,beneficiaries dually-eligible for Medicare and Med16icaid, and non-Medicaid eligible low-income beneficiaries;17and the need and feasibility of including further grada18

tions of diseases or conditions and multiple years of bene19ficiary data.(b) IMPROVEMENTS TO RISK ADJUSTMENT.Not21later than January 1, 2012, the Secretary shall implement22necessary improvements to the risk adjustment system23under section 1853(a)(1)(C) of the Social Security Act (4224U.S.C. 139523(a)(1)(C)), taking into account the evaluationunder subsection (a).

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3451SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STA2

BILIZATION FUND.3(a) IN GENERAL.Section 1858 of the Social Secu4rity Act (42 U.S.C. 1395w27a) is amended by strikingsubsection (e).6(b) TRANSITION.Any amount contained in the MA7Regional Plan Stabilization Fund as of the date of the8enactment of this Act shall be transferred to the Federal9

Supplementary Medical Insurance Trust Fund.PART 2BENEFICIARY PROTECTIONS AND ANTI-11FRAUD12SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL13HEALTH SERVICES.14(a) IN GENERAL.Section 1852(a)(1) of the SocialSecurity Act (42 U.S.C. 1395w22(a)(1)) is amended 16(1) in subparagraph (A), by inserting before the

17period at the end the following: with cost-sharing18that is no greater (and may be less) than the cost-19sharing that would otherwise be imposed under suchprogram option;21(2) in subparagraph (B)(i), by striking or an22actuarially equivalent level of cost-sharing as deter23mined in this part; and24(3) by amending clause (ii) of subparagraph(B) to read as follows:

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3461(ii) PERMITTING USE OF FLAT CO2

PAYMENT OR PER DIEM RATE.Nothing in3clause (i) shall be construed as prohibiting4a Medicare Advantage plan from using aflat copayment or per diem rate, in lieu of6the cost-sharing that would be imposed7under part A or B, so long as the amount8of the cost-sharing imposed does not ex9

ceed the amount of the cost-sharing thatwould be imposed under the respective part11if the individual were not enrolled in a plan12under this part..13(b) LIMITATION FOR DUAL ELIGIBLES AND QUALI14FIED MEDICARE BENEFICIARIES.Section 1852(a) ofsuch Act is amended by adding at the end the following16new paragraph:17

(7) LIMITATION ON COST-SHARING FOR DUAL18ELIGIBLES AND QUALIFIED MEDICARE BENE19FICIARIES.In the case of a individual who is a full-benefit dual eligible individual (as defined in section211935(c)(6)) or a qualified medicare beneficiary (as22defined in section 1905(p)(1)) who is enrolled in a23Medicare Advantage plan, the plan may not impose24cost-sharing that exceeds the amount of cost-sharingthat would be permitted with respect to the indi

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3471vidual under this title and title XIX if the individual

2were not enrolled with such plan..3(c) EFFECTIVE DATES. 4(1) The amendments made by subsection (a)5shall apply to plan years beginning on or after Janu6ary 1, 2011.7(2) The amendments made by subsection (b)8

shall apply to plan years beginning on or after Janu9ary 1, 2011.10SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLL11EES IN PLANS WITH ENROLLMENT SUSPEN12SION.13Section 1851(e)(4) of the Social Security Act (4214U.S.C. 1395w(e)(4)) is amended 15(1) in subparagraph (C), by striking at the end16

or;17(2) in subparagraph (D) 18(A) by inserting , taking into account the19health or well-being of the individual before20the period; and21(B) by redesignating such subparagraph as22subparagraph (E); and23(3) by inserting after subparagraph (C) the fol24lowing new subparagraph:

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3481(D)) the individual is enrolled in an MA

2plan and enrollment in the plan is suspended3under paragraph (2)(B) or (3)(C) of section41857(g) because of a failure of the plan to meet5applicable requirements; or.6SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN7ADMINISTRATIVE COSTS.

8(a) DISCLOSURE OF MEDICAL LOSS RATIOS AND9OTHER EXPENSE DATA.Section 1851 of the Social Se10curity Act (42 U.S.C. 1395w21), as previously amended11by this subtitle, is amended by adding at the end the fol12lowing new subsection:13(p) PUBLICATION OF MEDICAL LOSS RATIOS AND14OTHER COST-RELATED INFORMATION. 15

(1) IN GENERAL.The Secretary shall pub16lish, not later than November 1 of each year (begin17ning with 2011), for each MA plan contract, the18medical loss ratio of the plan in the previous year.19(2) SUBMISSION OF DATA. 20(A) IN GENERAL.Each MA organization21shall submit to the Secretary, in a form and22manner specified by the Secretary, data nec23essary for the Secretary to publish the medical24loss ratio on a timely basis.

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3491(B) DATA FOR 2010 AND 2011.The data

2submitted under subparagraph (A) for 20103and for 2011 shall be consistent in content with4the data reported as part of the MA plan bidin June 2009 for 2010.6(C) USE OF STANDARDIZED ELEMENTS7AND DEFINITIONS.The data to be submitted8

under subparagraph (A) relating to medical loss9ratio for a year, beginning with 2012, shall besubmitted based on the standardized elements11and definitions developed under paragraph (3).12(3) DEVELOPMENT OF DATA REPORTING13STANDARDS. 14(A) IN GENERAL.The Secretary shalldevelop and implement standardized data ele16

ments and definitions for reporting under this17subsection, for contract years beginning with182012, of data necessary for the calculation of19the medical loss ratio for MA plans. Not laterthan December 31, 2010, the Secretary shall21publish a report describing the elements and22definitions so developed.23(B) CONSULTATION.The Secretary24shall consult with the Health Choices Commissioner,representatives of MA organizations, ex-

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3501perts on health plan accounting systems, and

2representatives of the National Association of3Insurance Commissioners, in the development4of such data elements and definitions.(4) MEDICAL LOSS RATIO TO BE DEFINED. 6For purposes of this part, the term medical loss7ratio has the meaning given such term by the Sec8retary, taking into account the meaning given such

9term by the Health Choices Commissioner undersection 116 of the Americas Affordable Health11Choices Act of 2009..12(b) MINIMUM MEDICAL LOSS RATIO.Section131857(e) of the Social Security Act (42 U.S.C. 1395w 1427(e)) is amended by adding at the end the following newparagraph:16

(4) REQUIREMENT FOR MINIMUM MEDICAL17LOSS RATIO.If the Secretary determines for a con18tract year (beginning with 2014) that an MA plan19has failed to have a medical loss ratio (as defined insection 1851(p)(4)) of at least .85 21(A) the Secretary shall require the Medi22care Advantage organization offering the plan23to give enrollees a rebate (in the second suc24ceeding contract year) of premiums under thispart (or part B or part D, if applicable) by

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3521clude terms that inform the organization of the

2provisions in subsection (d).3(B) ENFORCEMENT AUTHORITY.The4Secretary is authorized, in connection with con5ducting audits and other activities under sub6section (d), to take such actions, including pur7suit of financial recoveries, necessary to address8deficiencies identified in such audits or other9

activities..10

(2) APPLICATION UNDER PART D.For provi11sion applying the amendment made by paragraph12(1) to prescription drug plans under part D, see sec13tion 1860D12(b)(3)(D) of the Social Security Act.14(c) EFFECTIVE DATE.The amendments made by15this section shall take effect on the date of the enactment16of this Act and shall apply to audits and activities con17

ducted for contract years beginning on or after January181, 2011.19SEC. 1175. AUTHORITY TO DENY PLAN BIDS.20(a) IN GENERAL.Section 1854(a)(5) of the Social21Security Act (42 U.S.C. 1395w24(a)(5)) is amended by22adding at the end the following new subparagraph:23(C) REJECTION OF BIDS.Nothing in24this section shall be construed as requiring the

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3531Secretary to accept any or every bid by an MA

2organization under this subsection..3(b) APPLICATION UNDER PART D.Section 1860D 411(d) of such Act (42 U.S.C. 1395w111(d)) is amendedby adding at the end the following new paragraph:6(3) REJECTION OF BIDS.Paragraph (5)(C)7of section 1854(a) shall apply with respect to bids8

under this section in the same manner as it applies9to bids by an MA organization under such section..(c) EFFECTIVE DATE.The amendments made by11this section shall apply to bids for contract years begin12ning on or after January 1, 2011.13PART 3TREATMENT OF SPECIAL NEEDS PLANS14SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPENENROLLMENT PERIOD OF INDIVIDUALS INTO16

CHRONIC CARE SPECIALIZED MA PLANS FOR17SPECIAL NEEDS INDIVIDUALS.18Section 1859(f)(4) of the Social Security Act (4219U.S.C. 1395w28(f)(4)) is amended by adding at the endthe following new subparagraph:21(C) The plan does not enroll an individual22on or after January 1, 2011, other than during23an annual, coordinated open enrollment period24or when at the time of the diagnosis of the diseaseor condition that qualifies the individual as

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354

1an individual described in subsection2(b)(6)(B)(iii)..3SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS4PLANS TO RESTRICT ENROLLMENT.(a) IN GENERAL.Section 1859(f)(1) of the Social6Security Act (42 U.S.C. 1395w28(f)(1)) is amended by7

strikingJanuary 1, 2011

and inserting

January 1,8

2013 (or January 1, 2016, in the case of a plan described9in section 1177(b)(1) of the Americas Affordable HealthChoices Act of 2009).11(b) GRANDFATHERING OF CERTAIN PLANS. 12(1) PLANS DESCRIBED.For purposes of sec13tion 1859(f)(1) of the Social Security Act (4214U.S.C. 1395w28(f)(1)), a plan described in this

paragraph is a plan that had a contract with a State16that had a State program to operate an integrated17Medicaid-Medicare program that had been approved18by the Centers for Medicare & Medicaid Services as19of January 1, 2004.(2) ANALYSIS; REPORT.The Secretary of21Health and Human Services shall provide, through22a contract with an independent health services eval23uation organization, for an analysis of the plans de24scribed in paragraph (1) with regard to the impactof such plans on cost, quality of care, patient satis

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3551faction, and other subjects as specified by the Sec2

retary. Not later than December 31, 2011, the Sec3retary shall submit to Congress a report on such4analysis and shall include in such report such recommendationswith regard to the treatment of such6plans as the Secretary deems appropriate.7Subtitle EImprovements to8Medicare Part D9

SEC. 1181. ELIMINATION OF COVERAGE GAP.(a) IN GENERAL.Section 1860D2(b) of such Act11(42 U.S.C. 1395w102(b)) is amended 12(1) in paragraph (3)(A), by striking paragraph13(4) and inserting paragraphs (4) and (7);14(2) in paragraph (4)(B)(i), by inserting subjectto paragraph (7) after purposes of this part;16and

17(3) by adding at the end the following new18paragraph:19(7) PHASED-IN ELIMINATION OF COVERAGEGAP. 21(A) IN GENERAL.For each year begin22ning with 2011, the Secretary shall consistent23with this paragraph progressively increase the24initial coverage limit (described in subsection(b)(3)) and decrease the annual out-of-pocket

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3561threshold from the amounts otherwise computed

2until there is a continuation of coverage from3the initial coverage limit for expenditures in4curred through the total amount of expendi5tures at which benefits are available under6paragraph (4).7(B) INCREASE IN INITIAL COVERAGE8LIMIT.For a year beginning with 2011, the

9initial coverage limit otherwise computed with10out regard to this paragraph shall be increased11by 1/2 of the cumulative phase-in percentage (as12defined in subparagraph (D)(ii) for the year)13times the out-of-pocket gap amount (as defined14in subparagraph (E)) for the year.15(C) DECREASE IN ANNUAL OUT-OF-POCK16

ET THRESHOLD.For a year beginning with172011, the annual out-of-pocket threshold other18wise computed without regard to this paragraph19shall be decreased by 1/2 of the cumulative20phase-in percentage of the out-of-pocket gap21amount for the year multiplied by 1.75.22(D) PHASEIN.For purposes of this23paragraph:

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3571(i) ANNUAL PHASE-IN PERCENT2

AGE.The term annual phase-in percent3age means 4(I) for 2011, 13 percent;5(II) for 2012, 2013, 2014, and62015, 5 percent;7(III) for 2016 through 2018,87.5 percent; and

9(IV) for 2019 and each subse10quent year, 10 percent.11(ii) CUMULATIVE PHASE-IN PER12CENTAGE.The term cumulative phase-in13percentage means for a year the sum of14the annual phase-in percentage for the15year and the annual phase-in percentages16

for each previous year beginning with172011, but in no case more than 100 per18cent.19(E) OUT-OF-POCKET GAP AMOUNT.For20purposes of this paragraph, the term out-of-21pocket gap amount means for a year the22amount by which 23(i) the annual out-of-pocket thresh24old specified in paragraph (4)(B) for the

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3591has not entered into and have in effect a rebate

2agreement described in paragraph (2).3(2) REBATE AGREEMENT.A rebate agree4ment under this subsection shall require the manufacturerto provide to the Secretary a rebate for6each rebate period (as defined in paragraph (6)(B))7ending after December 31, 2010, in the amount8specified in paragraph (3) for any covered part D

9drug of the manufacturer dispensed after December31, 2010, to any full-benefit dual eligible individual11(as defined in paragraph (6)(A)) for which payment12was made by a PDP sponsor under part D or a MA13organization under part C for such period. Such re14bate shall be paid by the manufacturer to the Secretarynot later than 30 days after the date of re16ceipt of the information described in section 1860D 17

12(b)(7), including as such section is applied under18section 1857(f)(3).19(3) REBATE FOR FULL-BENEFIT DUAL ELIGIBLEMEDICARE DRUG PLAN ENROLLEES. 21(A) IN GENERAL.The amount of the re22bate specified under this paragraph for a manu23facturer for a rebate period, with respect to24each dosage form and strength of any coveredpart D drug provided by such manufacturer

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3601and dispensed to a full-benefit dual eligible indi2

vidual, shall be equal to the product of 3(i) the total number of units of such4dosage form and strength of the drug so5provided and dispensed for which payment6was made by a PDP sponsor under part D7or a MA organization under part C for the8

rebate period (as reported under section91860D12(b)(7), including as such section10is applied under section 1857(f)(3)); and11(ii) the amount (if any) by which 12(I) the Medicaid rebate amount13(as defined in subparagraph (B)) for14such form, strength, and period, ex15

ceeds16(II) the average Medicare drug17program full-benefit dual eligible re18bate amount (as defined in subpara19graph (C)) for such form, strength,20and period.21(B) MEDICAID REBATE AMOUNT.For22purposes of this paragraph, the term Medicaid23rebate amount means, with respect to each24dosage form and strength of a covered part D

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3611drug provided by the manufacturer for a rebate

2period 3(i) in the case of a single source4drug or an innovator multiple source drug,5the amount specified in paragraph6(1)(A)(ii) of section 1927(b) plus the7amount, if any, specified in paragraph

8(2)(A)(ii) of such section, for such form,9strength, and period; or10(ii) in the case of any other covered11outpatient drug, the amount specified in12paragraph (3)(A)(i) of such section for13such form, strength, and period.14

(C) AVERAGE MEDICARE DRUG PROGRAM15FULL-BENEFIT DUAL ELIGIBLE REBATE16AMOUNT.For purposes of this subsection, the17term average Medicare drug program full-ben18efit dual eligible rebate amount means, with re19spect to each dosage form and strength of a20covered part D drug provided by a manufac21turer for a rebate period, the sum, for all PDP22sponsors under part D and MA organizations23administering a MAPD plan under part C,24of

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3621(i) the product, for each such spon2

sor or organization, of 3(I) the sum of all rebates, dis4counts, or other price concessions (not5taking into account any rebate pro6vided under paragraph (2) for such7dosage form and strength of the drug8dispensed, calculated on a per-unit9

basis, but only to the extent that any10such rebate, discount, or other price11concession applies equally to drugs12dispensed to full-benefit dual eligible13Medicare drug plan enrollees and14drugs dispensed to PDP and MAPD15enrollees who are not full-benefit dual

16eligible individuals; and17(II) the number of the units of18such dosage and strength of the drug19dispensed during the rebate period to20full-benefit dual eligible individuals21enrolled in the prescription drug plans22administered by the PDP sponsor or23the MAPD plans administered by the24MAPD organization; divided by

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3631(ii) the total number of units of such

2dosage and strength of the drug dispensed3during the rebate period to full-benefit4dual eligible individuals enrolled in all pre5scription drug plans administered by PDP6sponsors and all MAPD plans adminis7tered by MAPD organizations.8(4) LENGTH OF AGREEMENT.The provisions

9of paragraph (4) of section 1927(b) (other than10clauses (iv) and (v) of subparagraph (B)) shall apply11to rebate agreements under this subsection in the12same manner as such paragraph applies to a rebate13agreement under such section.14(5) OTHER TERMS AND CONDITIONS.The15

Secretary shall establish other terms and conditions16of the rebate agreement under this subsection, in17cluding terms and conditions related to compliance,18that are consistent with this subsection.19(6) DEFINITIONS.In this subsection and sec20tion 1860D12(b)(7):21(A) FULL-BENEFIT DUAL ELIGIBLE INDI22VIDUAL.The term full-benefit dual eligible in23dividual has the meaning given such term in24section 1935(c)(6).

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3641(B) REBATE PERIOD.The term rebate

2period has the meaning given such term in sec3tion 1927(k)(8)..4(2) REPORTING REQUIREMENT FOR THE DETERMINATIONAND PAYMENT OF REBATES BY MANU6FACTURES RELATED TO REBATE FOR FULL-BENEFIT7DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLL8EES. 9(A) REQUIREMENTS FOR PDP SPONSORS.

Section 1860D12(b) of the Social Se11curity Act (42 U.S.C. 1395w112(b)) is amend12

ed by adding at the end the following new para13graph:14(7) REPORTING REQUIREMENT FOR THE DETERMINATIONAND PAYMENT OF REBATES BY MANU16FACTURERS RELATED TO REBATE FOR FULL-BEN17EFIT DUAL ELIGIBLE MEDICARE DRUG PLAN EN18ROLLEES. 19(A) IN GENERAL.For purposes of therebate under section 1860D2(f) for contract

21years beginning on or after January 1, 2011,22each contract entered into with a PDP sponsor23under this part with respect to a prescription24drug plan shall require that the sponsor complywith subparagraphs (B) and (C).

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3651(B) REPORT FORM AND CONTENTS.Not

2later than 60 days after the end of each rebate3period (as defined in section 1860D2(f)(6)(B))4within such a contract year to which such sec5tion applies, a PDP sponsor of a prescription6drug plan under this part shall report to each7manufacturer 8(i) information (by National Drug9

Code number) on the total number of units10of each dosage, form, and strength of each11drug of such manufacturer dispensed to12full-benefit dual eligible Medicare drug13plan enrollees under any prescription drug14plan operated by the PDP sponsor during

15the rebate period;16(ii) information on the price dis17counts, price concessions, and rebates for18such drugs for such form, strength, and19period;20(iii) information on the extent to21which such price discounts, price conces22sions, and rebates apply equally to full-23benefit dual eligible Medicare drug plan24enrollees and PDP enrollees who are not

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3661full-benefit dual eligible Medicare drug

2plan enrollees; and3(iv) any additional information that4the Secretary determines is necessary toenable the Secretary to calculate the aver6age Medicare drug program full-benefit7dual eligible rebate amount (as defined in8paragraph (3)(C) of such section), and to

9determine the amount of the rebate requiredunder this section, for such form,11strength, and period.12Such report shall be in a form consistent with13a standard reporting format established by the14Secretary.(C) SUBMISSION TO SECRETARY.Each16

PDP sponsor shall promptly transmit a copy of17the information reported under subparagraph18(B) to the Secretary for the purpose of audit19oversight and evaluation.(D) CONFIDENTIALITY OF INFORMA21TION.The provisions of subparagraph (D) of22section 1927(b)(3), relating to confidentiality of23information, shall apply to information reported24by PDP sponsors under this paragraph in thesame manner that such provisions apply to in-

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3671formation disclosed by manufacturers or whole2

salers under such section, except 3(i) that any reference to this sec4tion in clause (i) of such subparagraphshall be treated as being a reference to this6section;7(ii) the reference to the Director of8the Congressional Budget Office in clause9

(iii) of such subparagraph shall be treatedas including a reference to the Medicare11Payment Advisory Commission; and12(iii) clause (iv) of such subparagraph13shall not apply.14(E) OVERSIGHT.Information reportedunder this paragraph may be used by the In16spector General of the Department of Health17

and Human Services for the statutorily author18ized purposes of audit, investigation, and eval19uations.(F) PENALTIES FOR FAILURE TO PRO21VIDE TIMELY INFORMATION AND PROVISION OF22FALSE INFORMATION.In the case of a PDP23sponsor 24(i) that fails to provide informationrequired under subparagraph (B) on a

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3681timely basis, the sponsor is subject to a

2civil money penalty in the amount of3$10,000 for each day in which such infor4mation has not been provided; or(ii) that knowingly (as defined in6section 1128A(i)) provides false informa7tion under such subparagraph, the sponsor8is subject to a civil money penalty in an9

amount not to exceed $100,000 for eachitem of false information.11Such civil money penalties are in addition to12other penalties as may be prescribed by law.13The provisions of section 1128A (other than14subsections (a) and (b)) shall apply to a civilmoney penalty under this subparagraph in the16same manner as such provisions apply to a pen17

alty or proceeding under section 1128A(a)..18(B) APPLICATION TO MA ORGANIZA19TIONS.Section 1857(f)(3) of the Social SecurityAct (42 U.S.C. 1395w27(f)(3)) is amend21ed by adding at the end the following:22(D) REPORTING REQUIREMENT RELATED23TO REBATE FOR FULL-BENEFIT DUAL ELIGIBLE24MEDICARE DRUG PLAN ENROLLEES.Section1860D12(b)(7)..

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3691(3) DEPOSIT OF REBATES INTO MEDICARE PRE2

SCRIPTION DRUG ACCOUNT.Section 1860D16(c)3of such Act (42 U.S.C. 1395w116(c)) is amended4by adding at the end the following new paragraph:5(6) REBATE FOR FULL-BENEFIT DUAL ELIGI6BLE MEDICARE DRUG PLAN ENROLLEES.Amounts7paid under a rebate agreement under section81860D2(f) shall be deposited into the Account and

9shall be used to pay for all or part of the gradual10elimination of the coverage gap under section111860D2(b)(7)..12SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN13ORIGINAL COVERAGE GAP.14Section 1860D2 of the Social Security Act (4215

U.S.C. 1395w102), as amended by section 1181(a), is16amended 17(1) in subsection (b)(4)(C)(ii), by inserting18subject to subsection (g)(2)(C), after (ii);19(2) in subsection (e)(1), in the matter before20subparagraph (A), by striking subsection (f) and21inserting subsections (f) and (g) after this sub22section; and23(3) by adding at the end the following new sub24section:

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3701(g) REQUIREMENT FOR MANUFACTURER DISCOUNT

2AGREEMENT FOR CERTAIN QUALIFYING DRUGS. 3(1) IN GENERAL.In this part, the term cov4ered part D drug does not include any drug or biologicthat is manufactured by a manufacturer that6has not entered into and have in effect for all quali7fying drugs (as defined in paragraph (5)(A)) a dis8count agreement described in paragraph (2).9(2) DISCOUNT AGREEMENT. (A) PERIODIC DISCOUNTS.

A discount11

agreement under this paragraph shall require12the manufacturer involved to provide, to each13PDP sponsor with respect to a prescription14drug plan or each MA organization with respectto each MAPD plan, a discount in an amount16specified in paragraph (3) for qualifying drugs17

(as defined in paragraph (5)(A)) of the manu18facturer dispensed to a qualifying enrollee after19December 31, 2010, insofar as the individual isin the original gap in coverage (as defined in21paragraph (5)(E)).22(B) DISCOUNT AGREEMENT.Insofar as23not inconsistent with this subsection, the Sec24retary shall establish terms and conditions ofsuch agreement, including terms and conditions

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3711relating to compliance, similar to the terms and

2conditions for rebate agreements under para3graphs (2), (3), and (4) of section 1927(b), ex4cept that (i) discounts shall be applied under6this subsection to prescription drug plans7and MAPD plans instead of State plans8under title XIX;9(ii) PDP sponsors and MA organizationsshall be responsible, instead of

11States, for provision of necessary utiliza12tion information to drug manufacturers;13and14(iii) sponsors and MA organizationsshall be responsible for reporting informa16tion on drug-component negotiated price,17instead of other manufacturer prices.

18(C) COUNTING DISCOUNT TOWARD TRUE19OUT-OF-POCKET COSTS.Under the discountagreement, in applying subsection (b)(4), with21regard to subparagraph (C)(i) of such sub22section, if a qualified enrollee purchases the23qualified drug insofar as the enrollee is in an24actual gap of coverage (as defined in paragraph(5)(D)), the amount of the discount under the

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3721agreement shall be treated and counted as costs

2incurred by the plan enrollee.3(3) DISCOUNT AMOUNT.The amount of the4discount specified in this paragraph for a discountperiod for a plan is equal to 50 percent of the6amount of the drug-component negotiated price (as7defined in paragraph (5)(C)) for qualifying drugs for8

the period involved.9(4) ADDITIONAL TERMS.In the case of a discountprovided under this subsection with respect to11a prescription drug plan offered by a PDP sponsor12or an MAPD plan offered by an MA organization,13if a qualified enrollee purchases the qualified drug 14(A) insofar as the enrollee is in an actualgap of coverage (as defined in paragraph

16(5)(D)), the sponsor or plan shall provide the17discount to the enrollee at the time the enrollee18pays for the drug; and19(B) insofar as the enrollee is in the portionof the original gap in coverage (as defined21in paragraph (5)(E)) that is not in the actual22gap in coverage, the discount shall not be ap23plied against the negotiated price (as defined in24subsection (d)(1)(B)) for the purpose of calculatingthe beneficiary payment.

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3731(5) DEFINITIONS.In this subsection:

2(A) QUALIFYING DRUG.The term3qualifying drug means, with respect to a pre4scription drug plan or MAPD plan, a drug orbiological product that 6(i)(I) is a drug produced or distrib7uted under an original new drug applica8tion approved by the Food and Drug Ad9ministration, including a drug productmarketed by any cross-licensed producers

11or distributors operating under the new12drug application;13(II) is a drug that was originally14marketed under an original new drug applicationapproved by the Food and Drug16Administration; or17(III) is a biological product as ap18

proved under Section 351(a) of the Public19Health Services Act;(ii) is covered under the formulary of21the plan; and22(iii) is dispensed to an individual23who is in the original gap in coverage.24(B) QUALIFYING ENROLLEE.The termqualifying enrollee means an individual en-

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3741rolled in a prescription drug plan or MAPD

2plan other than such an individual who is a3subsidy-eligible individual (as defined in section41860D14(a)(3)).(C) DRUG-COMPONENT NEGOTIATED6PRICE.The term drug-component negotiated7price means, with respect to a qualifying drug,8

the negotiated price (as defined in subsection9(d)(1)(B)), as determined without regard to anydispensing fee, of the drug under the prescrip11tion drug plan or MAPD plan involved.12(D) ACTUAL GAP IN COVERAGE.The13term actual gap in coverage means the gap in14prescription drug coverage that occurs betweenthe initial coverage limit (as modified under16

subparagraph (B) of subsection (b)(7)) and the17annual out-of-pocket threshold (as modified18under subparagraph (C) of such subsection).19(E) ORIGINAL GAP IN COVERAGE.Theterm original in gap coverage means the gap21in prescription drug coverage that would occur22between the initial coverage limit (described in23subsection (b)(3)) and the out-of-pocket thresh24old (as defined in subsection (b)(4))(B) if subsection(b)(7) did not apply..

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3751SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMIS2

SION OF CLAIMS BY PHARMACIES LOCATED3IN OR CONTRACTING WITH LONG-TERM CARE4FACILITIES.5(a) PART D SUBMISSION.Section 1860D12(b) of6the Social Security Act (42 U.S.C. 1395w112(b)), as7amended by section 172(a)(1) of Public Law 110275, is8

amended by striking paragraph (5) and redesignating9paragraph (6) and paragraph (7), as added by section101181(b)(2), as paragraph (5) and paragraph (6), respec11tively.12(b) SUBMISSION TO MAPD PLANS.Section131857(f)(3) of the Social Security Act (42 U.S.C. 1395w-1427(f)(3)), as added by section 171(b) of Public Law 110 15

275 and amended by section 172(a)(2) of such Public16Law, is amended by striking subparagraph (B) and redes17ignating subparagraph (C) as subparagraph (B).18(c) EFFECTIVE DATE.The amendments made by19this section shall apply for contract years beginning with202010.

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376

SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG AS

SISTANCE PROGRAMS AND INDIAN HEALTH

SERVICE IN PROVIDING PRESCRIPTION

DRUGS TOWARD THE ANNUAL OUT-OF-POCK

ET THRESHOLD UNDER PART D.

(a) IN GENERAL.Section 1860D

2(b)(4)(C) of theSocial Security Act (42 U.S.C. 1395w102(b)(4)(C)) is

amended (1) in clause (i), by striking and at the end;(2) in clause (ii) (A) by striking such costs shall be treatedas incurred only if and inserting subject toclause (iii), such costs shall be treated as incurredonly if;(B) by striking , under section 1860D 14, or under a State Pharmaceutical AssistanceProgram; and(C) by striking the period at the end and

inserting ; and; and(3) by inserting after clause (ii) the followingnew clause:(iii) such costs shall be treated as incurredand shall not be considered to bereimbursed under clause (ii) if such costsare borne or paid

(I) under section 1860D14;

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3771(II) under a State Pharma2

ceutical Assistance Program;3(III) by the Indian Health Serv4ice, an Indian tribe or tribal organization,or an urban Indian organization6(as defined in section 4 of the Indian7Health Care Improvement Act); or8(IV) under an AIDS Drug As9sistance Program under part B of

title XXVI of the Public Health Serv11ice Act..12(b) EFFECTIVE DATE.The amendments made by13subsection (a) shall apply to costs incurred on or after14January 1, 2011.SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLL16MENT FOR FORMULARY CHANGES THAT AD17VERSELY IMPACT AN ENROLLEE.18(a) IN GENERAL.Section 1860D1(b)(3) of the So19

cial Security Act (42 U.S.C. 1395w101(b)(3)) is amendedby adding at the end the following new subparagraph:21(F) CHANGE IN FORMULARY RESULTING22IN INCREASE IN COST-SHARING. 23(i) IN GENERAL.Except as pro24vided in clause (ii), in the case of an individualenrolled in a prescription drug plan

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3781(or MAPD plan) who has been prescribed

2and is using a covered part D drug while3so enrolled, if the formulary of the plan is4materially changed (other than at the endof a contract year) so to reduce the cov6erage (or increase the cost-sharing) of the7drug under the plan.8(ii) EXCEPTION.Clause (i) shall

9not apply in the case that a drug is removedfrom the formulary of a plan be11cause of a recall or withdrawal of the drug12issued by the Food and Drug Administra13tion, because the drug is replaced with a14generic drug that is a therapeutic equivalent,or because of utilization management16applied to 17

(I) a drug whose labeling in18cludes a boxed warning required by19the Food and Drug Administrationunder section 210.57(c)(1) of title 21,21Code of Federal Regulations (or a22successor regulation); or23(II) a drug required under sub24section (c)(2) of section 5051 of theFederal Food, Drug, and Cosmetic

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3791Act to have a Risk Evaluation and

2Management Strategy that includes3elements under subsection (f) of such4section..5(b) EFFECTIVE DATE.The amendment made by6subsection (a) shall apply to contract years beginning on7or after January 1, 2011.

8Subtitle FMedicare Rural Access9Protections10SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS.11.12(a) ADDITIONAL TELEHEALTH SITE. 13(1) IN GENERAL.Paragraph (4)(C)(ii) of sec14tion 1834(m) of the Social Security Act (42 U.S.C.

151395m(m)) is amended by adding at the end the fol16lowing new subclause:17(IX) A renal dialysis facility. 18(2) EFFECTIVE DATE.The amendment made19by paragraph (1) shall apply to services furnished on20or after January 1, 2011.21(b) TELEHEALTH ADVISORY COMMITTEE. 22(1) ESTABLISHMENT.Section 1868 of the So23cial Security Act (42 U.S.C. 1395ee) is amended

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3801(A) in the heading, by adding at the end

2the following: TELEHEALTH ADVISORY COM3MITTEE; and4(B) by adding at the end the following newsubsection:6(c) TELEHEALTH ADVISORY COMMITTEE. 7(1) IN GENERAL.The Secretary shall appoint8a Telehealth Advisory Committee (in this subsection

9referred to as the Advisory Committee) to makerecommendations to the Secretary on policies of the11Centers for Medicare & Medicaid Services regarding12telehealth services as established under section131834(m), including the appropriate addition or dele14tion of services (and HCPCS codes) to those specifiedin paragraphs (4)(F)(i) and (4)(F)(ii) of such16section and for authorized payment under paragraph

17(1) of such section.18(2) MEMBERSHIP; TERMS. 19(A) MEMBERSHIP. (i) IN GENERAL.The Advisory21Committee shall be composed of 9 mem22bers, to be appointed by the Secretary, of23whom 24(I) 5 shall be practicing physicians;

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3811(II) 2 shall be practicing non-

2physician health care practitioners;3and4(III) 2 shall be administrators5of telehealth programs.6(ii) REQUIREMENTS FOR APPOINT7ING MEMBERS.In appointing members of8

the Advisory Committee, the Secretary9shall 10(I) ensure that each member11has prior experience with the practice12of telemedicine or telehealth;13(II) give preference to individ14uals who are currently providing tele15medicine or telehealth services or who

16are involved in telemedicine or tele17health programs;18(III) ensure that the member19ship of the Advisory Committee rep20resents a balance of specialties and21geographic regions; and22(IV) take into account the rec23ommendations of stakeholders.

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3821(B) TERMS.The members of the Advi2

sory Committee shall serve for such term as the3Secretary may specify.4(C) CONFLICTS OF INTEREST.An advisorycommittee member may not participate6with respect to a particular matter considered7in an advisory committee meeting if such mem8ber (or an immediate family member of such9

member) has a financial interest that could beaffected by the advice given to the Secretary11with respect to such matter.12(3) MEETINGS.The Advisory Committee13shall meet twice each calendar year and at such14other times as the Secretary may provide.(4) PERMANENT COMMITTEE.Section 14 of16the Federal Advisory Committee Act (5 U.S.C.

17App.) shall not apply to the Advisory Committee. 18(2) FOLLOWING RECOMMENDATIONS.Section191834(m)(4)(F) of such Act (42 U.S.C.1395m(m)(4)(F)) is amended by adding at the end21the following new clause:22(iii) RECOMMENDATIONS OF THE23TELEHEALTH ADVISORY COMMITTEE.In24making determinations under clauses (i)and (ii), the Secretary shall take into ac

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3831count the recommendations of the Tele2

health Advisory Committee (established3under section 1868(c)) when adding or de4leting services (and HCPCS codes) and inestablishing policies of the Centers for6Medicare & Medicaid Services regarding7the delivery of telehealth services. If the8Secretary does not implement such a rec9ommendation, the Secretary shall publish

in the Federal Register a statement re11garding the reason such recommendation12was not implemented. 13(3) WAIVER OF ADMINISTRATIVE LIMITA14TION.The Secretary of Health and Human Servicesshall establish the Telehealth Advisory Com16mittee under the amendment made by paragraph (1)17notwithstanding any limitation that may apply to18the number of advisory committees that may be es19

tablished (within the Department of Health andHuman Services or otherwise).21SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS22PROVISION.23Section 1833(t)(7)(D)(i) of the Social Security Act24(42 U.S.C. 1395l(t)(7)(D)(i)) is amended (1) in subclause (II)

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3841(A) in the first sentence, by striking

22010and inserting 2012; and3(B) in the second sentence, by striking or42009 and inserting , 2009, 2010, or 2011;5and6(2) in subclause (III), by striking January 1,72010 and inserting January 1, 2012.

8SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLAS9SIFICATIONS.10Subsection (a) of section 106 of division B of the Tax11Relief and Health Care Act of 2006 (42 U.S.C. 139512note), as amended by section 117 of the Medicare, Med13icaid, and SCHIP Extension Act of 2007 (Public Law14110173) and section 124 of the Medicare Improvements15

for Patients and Providers Act of 2008 (Public Law 110 16275), is amended by striking September 30, 2009 and17inserting September 30, 2011.18SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.19Section 1848(e)(1)(E) of the Social Security Act (4220U.S.C. 1395w4(e)(1)(E)) is amended by striking before21January 1, 2010 and inserting before January 1,222012.

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385

SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COM

PONENT OF CERTAIN PHYSICIAN PATHOL

OGY SERVICES.

Section 542(c) of the Medicare, Medicaid, andSCHIP Benefits Improvement and Protection Act of 2000(as enacted into law by section 1(a)(6) of Public Law 106 554), as amended by section 732 of the Medicare Prescription

Drug, Improvement, and Modernization Act of 2003(42 U.S.C. 1395w4 note), section 104 of division B ofthe Tax Relief and Health Care Act of 2006 (42 U.S.C.1395w4 note), section 104 of the Medicare, Medicaid,and SCHIP Extension Act of 2007 (Public Law 110 173), and section 136 of the Medicare Improvements forPatients and Providers Act of 1008 (Public Law 110 275), is amended by striking and 2009 and inserting2009, 2010, and 2011.SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.

(a) IN GENERAL.Section 1834(l)(13) of the SocialSecurity Act (42 U.S.C. 1395m(l)(13)) is amended

(1) in subparagraph (A) (A) in the matter preceding clause (i), bystriking before January 1, 2010 and insertingbefore January 1, 2012; and(B) in each of clauses (i) and (ii), by strikingbefore January 1, 2010 and insertingbefore January 1, 2012.f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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386

1(b) AIR AMBULANCE IMPROVEMENTS.Section2146(b)(1) of the Medicare Improvements for Patients and3Providers Act of 2008 (Public Law 110275) is amended4by striking ending on December 31, 2009 and inserting5ending on December 31, 2011.6TITLE IIMEDICARE

7BENEFICIARY IMPROVEMENTS8Subtitle AImproving and Simpli9fying Financial Assistance for10Low Income Medicare Bene11ficiaries12SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAV13INGS PROGRAM AND LOW-INCOME SUBSIDY14PROGRAM.

15(a) APPLICATION OF HIGHEST LEVEL PERMITTED16UNDER LIS TO ALL SUBSIDY ELIGIBLE INDIVIDUALS. 17(1) IN GENERAL.Section 1860D14(a)(1) of18the Social Security Act (42 U.S.C. 1395w 19114(a)(1)) is amended in the matter before subpara20graph (A), by inserting (or, beginning with 2012,21paragraph (3)(E)) after paragraph (3)(D).22(2) ANNUAL INCREASE IN LIS RESOURCE23TEST.Section 1860D14(a)(3)(E)(i) of such Act24(42 U.S.C. 1395w114(a)(3)(E)(i)) is amended

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3871(A) by striking and at the end of sub2

clause (I);3(B) in subclause (II), by inserting (before42012) after subsequent year;5(C) by striking the period at the end of6subclause (II) and inserting a semicolon;7(D) by inserting after subclause (II) the8

following new subclauses:9(III) for 2012, $17,000 (or10$34,000 in the case of the combined11value of the individuals assets or re12sources and the assets or resources of13the individuals spouse); and14(IV) for a subsequent year, the15

dollar amounts specified in this sub16clause (or subclause (III)) for the pre17vious year increased by the annual18percentage increase in the consumer19price index (all items; U.S. city aver20age) as of September of such previous21year.; and22(E) in the last sentence, by inserting or23(IV) after subclause (II).

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3881(3) APPLICATION OF LIS TEST UNDER MEDI2

CARE SAVINGS PROGRAM.Section 1905(p)(1)(C) of3such Act (42 U.S.C. 1396d(p)(1)(C)) is amended 4(A) by striking effective beginning with5January 1, 2010 and inserting effective for6the period beginning with January 1, 2010, and7ending with December 31, 2011; and8

(B) by inserting before the period at the9end the following: or, effective beginning with10January 1, 2012, whose resources (as so deter11mined) do not exceed the maximum resource12level applied for the year under subparagraph13(E) of section 1860D14(a)(3) (determined14without regard to the life insurance policy ex15clusion provided under subparagraph (G) of

16such section) applicable to an individual or to17the individual and the individuals spouse (as18the case may be).19(b) EFFECTIVE DATE.The amendments made by20subsection (a) shall apply to eligibility determinations for21income-related subsidies and medicare cost-sharing fur22nished for periods beginning on or after January 1, 2012.

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389

SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR

CERTAIN NON-INSTITUTIONALIZED FULL-

BENEFIT DUAL ELIGIBLE INDIVIDUALS.

(a) IN GENERAL.Section 1860D14(a)(1)(D)(i) ofthe Social Security Act (42 U.S.C. 1395w 114(a)(1)(D)(i)) is amended (1) by striking INSTITUTIONALIZED INDIVIDUALS.In and inserting ELIMINATION OF COST-SHARING FOR CERTAIN FULL-BENEFIT DUAL ELIGIBLE

INDIVIDUALS. (I) INSTITUTIONALIZED INDI-

VIDUALS.In; and

(2) by adding at the end the following new sub-clause:(II) CERTAIN OTHER INDIVIDUALS.In the case of an individualwho is a full-benefit dual eligible individualand with respect to whom therehas been a determination that but forthe provision of home and communitybased care (whether under section

1915, 1932, or under a waiver undersection 1115) the individual would requirethe level of care provided in ahospital or a nursing facility or intermediatecare facility for the mentally

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3901retarded the cost of which could be re2

imbursed under the State plan under3title XIX, the elimination of any bene4ficiary coinsurance described in sec5tion 1860D2(b)(2) (for all amounts6through the total amount of expendi7tures at which benefits are available8under section 1860D2(b)(4))..9(b) EFFECTIVE DATE.The amendments made by

10subsection (a) shall apply to drugs dispensed on or after11January 1, 2011.12SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.13(a) ADMINISTRATIVE VERIFICATION OF INCOME AND14RESOURCES UNDER THE LOW-INCOME SUBSIDY PRO15GRAM. 16(1) IN GENERAL.Clause (iii) of section

171860D14(a)(3)(E) of the Social Security Act (4218U.S.C. 1395w114(a)(3)(E)) is amended to read as19follows:20(iii) CERTIFICATION OF INCOME AND21RESOURCES.For purposes of applying22this section 23(I) an individual shall be per24mitted to apply on the basis of self-

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3911certification of income and resources;

2and3(II) matters attested to in the4application shall be subject to appro5priate methods of verification without6the need of the individual to provide7additional documentation, except in8

extraordinary situations as determined9by the Commissioner..10(2) EFFECTIVE DATE.The amendment made11by paragraph (1) shall apply beginning January 1,122010.13(b) DISCLOSURES TO FACILITATE IDENTIFICATION14OF INDIVIDUALS LIKELY TO BE INELIGIBLE FOR THE

15LOW-INCOME ASSISTANCE UNDER THE MEDICARE PRE16SCRIPTION DRUG PROGRAM TO ASSIST SOCIAL SECURITY17ADMINISTRATIONS OUTREACH TO ELIGIBLE INDIVID18UALS.For provision authorizing disclosure of return in19formation to facilitate identification of individuals likely20to be ineligible for low-income subsidies under Medicare21prescription drug program, see section 1801.

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392

SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIM

BURSEMENTS FOR RETROACTIVE LOW IN

COME SUBSIDY ENROLLMENT.

(a) IN GENERAL.In the case of a retroactive LISenrollment beneficiary who is enrolled under a prescriptiondrug plan under part D of title XVIII of the Social SecurityAct (or an MAPD plan under part C of such title),

the beneficiary (or any eligible third party) is entitled toreimbursement by the plan for covered drug costs incurredby the beneficiary during the retroactive coverage periodof the beneficiary in accordance with subsection (b) andin the case of such a beneficiary described in subsection(c)(4)(A)(i), such reimbursement shall be made automaticallyby the plan upon receipt of appropriate notice thebeneficiary is eligible for assistance described in such subsection(c)(4)(A)(i) without further information requiredto be filed with the plan by the beneficiary.(b) ADMINISTRATIVE REQUIREMENTS RELATING TOREIMBURSEMENTS. (1) LINE-ITEM DESCRIPTION.Each reimbursement

made by a prescription drug plan or MAPDplan under subsection (a) shall include a line-itemdescription of the items for which the reimbursementis made.(2) TIMING OF REIMBURSEMENTS.A prescriptiondrug plan or MAPD plan must make a reimf:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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3931bursement under subsection (a) to a retroactive LIS

2enrollment beneficiary, with respect to a claim, not3later than 45 days after 4(A) in the case of a beneficiary describedin subsection (c)(4)(A)(i), the date on which the6plan receives notice from the Secretary that the7beneficiary is eligible for assistance described in8

such subsection; or9(B) in the case of a beneficiary describedin subsection (c)(4)(A)(ii), the date on which11the beneficiary files the claim with the plan.12(3) REPORTING REQUIREMENT.For each13month beginning with January 2011, each prescrip14tion drug plan and each MAPD plan shall reportto the Secretary the following:16

(A) The number of claims the plan has re17adjudicated during the month due to a bene18ficiary becoming retroactively eligible for sub19sidies available under section 1860D14 of theSocial Security Act.21(B) The total value of the readjudicated22claim amount for the month.23(C) The Medicare Health Insurance Claims24Number of beneficiaries for whom claims werereadjudicated.

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3941(D) For the claims described in subpara2

graphs (A) and (B), an attestation to the Ad3ministrator of the Centers for Medicare & Med4icaid Services of the total amount of reimbursementthe plan has provided to beneficiaries for6premiums and cost-sharing that the beneficiary7overpaid for which the plan received payment8from the Centers for Medicare & Medicaid Serv9ices.(c) DEFINITIONS.For purposes of this section:

11(1) COVERED DRUG COSTS.The term cov12ered drug costs means, with respect to a retroactive13LIS enrollment beneficiary enrolled under a pre14scription drug plan under part D of title XVIII ofthe Social Security Act (or an MAPD plan under16part C of such title), the amount by which 17(A) the costs incurred by such beneficiary18during the retroactive coverage period of the

19beneficiary for covered part D drugs, premiums,and cost-sharing under such title; exceeds21(B) such costs that would have been in22curred by such beneficiary during such period if23the beneficiary had been both enrolled in the24plan and recognized by such plan as qualifiedduring such period for the low income subsidy

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3951under section 1860D14 of the Social Security

2Act to which the individual is entitled.3(2) ELIGIBLE THIRD PARTY.The term eligi4ble third party means, with respect to a retroactiveLIS enrollment beneficiary, an organization or other6third party that is owed payment on behalf of such7beneficiary for covered drug costs incurred by such8beneficiary during the retroactive coverage period of

9such beneficiary.(3) RETROACTIVE COVERAGE PERIOD.The11term retroactive coverage period means 12(A) with respect to a retroactive LIS en13rollment beneficiary described in paragraph14(4)(A)(i), the period (i) beginning on the effective date of16the assistance described in such paragraph

17for which the individual is eligible; and18(ii) ending on the date the plan effec19tuates the status of such individual as soeligible; and21(B) with respect to a retroactive LIS en22rollment beneficiary described in paragraph23(4)(A)(ii), the period 24(i) beginning on the date the individualis both entitled to benefits under

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3961part A, or enrolled under part B, of title

2XVIII of the Social Security Act and eligi3ble for medical assistance under a State4plan under title XIX of such Act; and(ii) ending on the date the plan effec6tuates the status of such individual as a7full-benefit dual eligible individual (as de8fined in section 1935(c)(6) of such Act).9(4) RETROACTIVE LIS ENROLLMENT BENEFICIARY.

11(A) IN GENERAL.The term retroactive12LIS enrollment beneficiary means an indi13vidual who 14(i) is enrolled in a prescription drugplan under part D of title XVIII of the So16cial Security Act (or an MAPD plan17under part C of such title) and subse18quently becomes eligible as a full-benefit19

dual eligible individual (as defined in section1935(c)(6) of such Act), an individual21receiving a low-income subsidy under sec22tion 1860D14 of such Act, an individual23receiving assistance under the Medicare24Savings Program implemented underclauses (i), (iii), and (iv) of section

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39711902(a)(10)(E) of such Act, or an indi2

vidual receiving assistance under the sup3plemental security income program under4section 1611 of such Act; or(ii) subject to subparagraph (B)(i), is6a full-benefit dual eligible individual (as7defined in section 1935(c)(6) of such Act)8who is automatically enrolled in such a9

plan under section 1860D1(b)(1)(C) ofsuch Act.

11(B) EXCEPTION FOR BENEFICIARIES EN12ROLLED IN RFP PLAN. 13(i) IN GENERAL.In no case shall an14individual described in subparagraph(A)(ii) include an individual who is en16rolled, pursuant to a RFP contract de17scribed in clause (ii), in a prescription18

drug plan offered by the sponsor of such19plan awarded such contract.(ii) RFP CONTRACT DESCRIBED. 21The RFP contract described in this section22is a contract entered into between the Sec23retary and a sponsor of a prescription drug24plan pursuant to the Centers for Medicare& Medicaid Services request for proposals

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3981issued on February 17, 2009, relating to

2Medicare part D retroactive coverage for3certain low income beneficiaries, or a simi4lar subsequent request for proposals.SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.6(a) IN GENERAL.Section 1860D1(b)(1)(C) of the7Social Security Act (42 U.S.C. 1395w101(b)(1)(C)) is8amended by adding after PDP region the following: or

9through use of an intelligent assignment process that isdesigned to maximize the access of such individual to nec11essary prescription drugs while minimizing costs to such12individual and to the program under this part to the great13est extent possible. In the case the Secretary enrolls such14individuals through use of an intelligent assignment process,such process shall take into account the extent to16which prescription drugs necessary for the individual are17

covered in the case of a PDP sponsor of a prescription18drug plan that uses a formulary, the use of prior author19ization or other restrictions on access to coverage of suchprescription drugs by such a sponsor, and the overall qual21ity of a prescription drug plan as measured by quality rat22ings established by the Secretary. 23(b) EFFECTIVE DATE.The amendment made by24subsection (a) shall take effect for contract years beginningwith 2012.

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399

SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC

ENROLLMENT PROCESS FOR CERTAIN SUB

SIDY ELIGIBLE INDIVIDUALS.

(a) SPECIAL ENROLLMENT PERIOD.Section1860D1(b)(3)(D) of the Social Security Act (42 U.S.C.1395w101(b)(3)(D)) is amended to read as follows:(D) SUBSIDY ELIGIBLE INDIVIDUALS. In the case of an individual (as determined by

the Secretary) who is determined under subparagraph(B) of section 1860D14(a)(3) to bea subsidy eligible individual..

(b) AUTOMATIC ENROLLMENT.Section 1860D 1(b)(1) of the Social Security Act (42 U.S.C. 1395w 101(b)(1)) is amended by adding at the end the followingnew subparagraph:(D) SPECIAL RULE FOR SUBSIDY ELIGIBLEINDIVIDUALS.The process establishedunder subparagraph (A) shall include, in thecase of an individual described in section1860D1(b)(3)(D) who fails to enroll in a prescription

drug plan or an MAPD plan duringthe special enrollment established under suchsection applicable to such individual, the applicationof the assignment process described insubparagraph (C) to such individual in thesame manner as such assignment process ap

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4001plies to a part D eligible individual described in

2such subparagraph (C). Nothing in the previous3sentence shall prevent an individual described in4such sentence from declining enrollment in a5plan determined appropriate by the Secretary6(or in the program under this part) or from7changing such enrollment..

8(c) EFFECTIVE DATE.The amendments made by9this section shall apply to subsidy determinations made10for months beginning with January 2011.11SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO RE12BATE IN CALCULATION OF LOW INCOME SUB13SIDY BENCHMARK.14(a) IN GENERAL.Section 1860D14(b)(2)(B)(iii)15

of the Social Security Act (42 U.S.C. 1395w 16114(b)(2)(B)(iii)) is amended by inserting before the pe17riod the following: before the application of the monthly18rebate computed under section 1854(b)(1)(C)(i) for that19plan and year involved.20(b) EFFECTIVE DATE.The amendment made by21subsection (a) shall apply to subsidy determinations made22for months beginning with January 2011.

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401

1Subtitle BReducing Health2Disparities3SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN4MEDICARE.(a) ENSURING EFFECTIVE COMMUNICATION BY THE6CENTERS FOR MEDICARE & MEDICAID SERVICES. 7

(1) STUDY ON MEDICARE PAYMENTS FOR LAN8GUAGE SERVICES.The Secretary of Health and9Human Services shall conduct a study that examinesthe extent to which Medicare service providers uti11lize, offer, or make available language services for12beneficiaries who are limited English proficient and13ways that Medicare should develop payment systems14for language services.(2) ANALYSES.The study shall include an

16analysis of each of the following:17(A) How to develop and structure appro18priate payment systems for language services19for all Medicare service providers.(B) The feasibility of adopting a payment21methodology for on-site interpreters, including22interpreters who work as independent contrac23tors and interpreters who work for agencies24that provide on-site interpretation, pursuant towhich such interpreters could directly bill Medi

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4021care for services provided in support of physi2

cian office services for an LEP Medicare pa3tient.4(C) The feasibility of Medicare contractingdirectly with agencies that provide off-site inter6pretation including telephonic and video inter7pretation pursuant to which such contractors8could directly bill Medicare for the services pro9vided in support of physician office services foran LEP Medicare patient.11

(D) The feasibility of modifying the exist12ing Medicare resource-based relative value scale13(RBRVS) by using adjustments (such as multi14pliers or add-ons) when a patient is LEP.(E) How each of options described in a16previous paragraph would be funded and how17such funding would affect physician payments,18a physicians practice, and beneficiary cost-19

sharing.(F) The extent to which providers under21parts A and B of title XVIII of the Social Secu22rity Act, MA organizations offering Medicare23Advantage plans under part C of such title and24PDP sponsors of a prescription drug planunder part D of such title utilize, offer, or make

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4031available language services for beneficiaries with

2limited English proficiency.3(G) The nature and type of language serv4ices provided by States under title XIX of the5Social Security Act and the extent to which6such services could be utilized by beneficiaries7and providers under title XVIII of such Act.8

(3) VARIATION IN PAYMENT SYSTEM DE9SCRIBED.The payment systems described in para10graph (2)(A) may allow variations based upon types11of service providers, available delivery methods, and12costs for providing language services including such13factors as 14(A) the type of language services provided15(such as provision of health care or health care

16related services directly in a non-English lan17guage by a bilingual provider or use of an inter18preter);19(B) type of interpretation services provided20(such as in-person, telephonic, video interpreta21tion);22(C) the methods and costs of providing23language services (including the costs of pro24viding language services with internal staff or

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404

1through contract with external independent con2tractors or agencies, or both);3(D) providing services for languages not4frequently encountered in the United States;5and6(E) providing services in rural areas.7

(4) REPORT.The Secretary shall submit a re8port on the study conducted under subsection (a) to

9appropriate committees of Congress not later than1012 months after the date of the enactment of this11Act.12(5) EXEMPTION FROM PAPERWORK REDUCTION13ACT.Chapter 35 of title 44, United States Code14

(commonly known as the Paperwork Reduction15Act ), shall not apply for purposes of carrying out16this subsection.17(6) AUTHORIZATION OF APPROPRIATIONS. 18There is authorized to be appropriated to carry out19this subsection such sums as are necessary.20(b) HEALTH PLANS.Section 1857(g)(1) of the So21cial Security Act (42 U.S.C. 1395w27(g)(1)) is amend22ed 23(1) by striking or at the end of subparagraph24(F);

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4051(2) by adding or at the end of subparagraph

2(G); and3(3) by inserting after subparagraph (G) the fol4lowing new subparagraph:(H) fails substantially to provide lan6guage services to limited English proficient7beneficiaries enrolled in the plan that are re8quired under law;.9SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR

MEDICARE BENEFICIARIES WITH LIMITED11ENGLISH PROFICIENCY BY PROVIDING REIM12BURSEMENT FOR CULTURALLY AND LINGUIS13TICALLY APPROPRIATE SERVICES.14(a) IN GENERAL.Not later than 6 months after thedate of the completion of the study described in section161221(a), the Secretary, acting through the Centers for17Medicare & Medicaid Services, shall carry out a dem18onstration program under which the Secretary shall award

19not fewer than 24 3-year grants to eligible Medicare serviceproviders (as described in subsection (b)(1)) to improve21effective communication between such providers and Medi22care beneficiaries who are living in communities where ra23cial and ethnic minorities, including populations that face24language barriers, are underserved with respect to suchservices. In designing and carrying out the demonstration

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4061the Secretary shall take into consideration the results of

2the study conducted under section 1221(a) and adjust, as3appropriate, the distribution of grants so as to better tar4get Medicare beneficiaries who are in the greatest needof language services. The Secretary shall not authorize a6grant larger than $500,000 over three years for any grant7ee.8(b) ELIGIBILITY; PRIORITY. 9

(1) ELIGIBILITY.To be eligible to receive agrant under subsection (a) an entity shall

11(A) be 12(i) a provider of services under part A13of title XVIII of the Social Security Act;14(ii) a service provider under part B ofsuch title;16(iii) a part C organization offering a

17Medicare part C plan under part C of such18title; or19(iv) a PDP sponsor of a prescriptiondrug plan under part D of such title; and21(B) prepare and submit to the Secretary22an application, at such time, in such manner,23and accompanied by such additional informa24tion as the Secretary may require.(2) PRIORITY.

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4071(A) DISTRIBUTION.To the extent fea2

sible, in awarding grants under this section, the3Secretary shall award 4(i) at least 6 grants to providers of5services described in paragraph (1)(A)(i);6(ii) at least 6 grants to service pro7viders described in paragraph (1)(A)(ii);8(iii) at least 6 grants to organizations

9described in paragraph (1)(A)(iii); and10(iv) at least 6 grants to sponsors de11scribed in paragraph (1)(A)(iv).12(B) FOR COMMUNITY ORGANIZATIONS. 13The Secretary shall give priority to applicants14that have developed partnerships with commu15nity organizations or with agencies with experi16ence in language access.

17(C) VARIATION IN GRANTEES.The Sec18retary shall also ensure that the grantees under19this section represent, among other factors,20variations in 21(i) different types of language services22provided and of service providers and orga23nizations under parts A through D of title24XVIII of the Social Security Act;

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4081(ii) languages needed and their fre2

quency of use;3(iii) urban and rural settings;4(iv) at least two geographic regions,5as defined by the Secretary; and6(v) at least two large metropolitan7statistical areas with diverse populations.8

(c) USE OF FUNDS. 9

(1) IN GENERAL.A grantee shall use grant10funds received under this section to pay for the pro11vision of competent language services to Medicare12beneficiaries who are limited English proficient.13Competent interpreter services may be provided14through on-site interpretation, telephonic interpreta15tion, or video interpretation or direct provision of

16health care or health care related services by a bilin17gual health care provider. A grantee may use bilin18gual providers, staff, or contract interpreters. A19grantee may use grant funds to pay for competent20translation services. A grantee may use up to 1021percent of the grant funds to pay for administrative22costs associated with the provision of competent lan23guage services and for reporting required under sub24section (e).

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4091(2) ORGANIZATIONS.Grantees that are part C

2organizations or PDP sponsors must ensure that3their network providers receive at least 50 percent of4the grant funds to pay for the provision of competentlanguage services to Medicare beneficiaries6who are limited English proficient, including physi7cians and pharmacies.8(3) DETERMINATION OF PAYMENTS FOR LAN9

GUAGE SERVICES.Payments to grantees shall becalculated based on the estimated numbers of lim11

ited English proficient Medicare beneficiaries in a12grantees service area utilizing 13(A) data on the numbers of limited14English proficient individuals who speakEnglish less than very well from the most re16cently available data from the Bureau of the17Census or other State-based study the Sec18

retary determines likely to yield accurate data19regarding the number of such individuals servedby the grantee; or21(B) the grantees own data if the grantee22routinely collects data on Medicare bene23ficiaries primary language in a manner deter24mined by the Secretary to yield accurate dataand such data shows greater numbers of limited

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4101English proficient individuals than the data list2

ed in subparagraph (A).3(4) LIMITATIONS. 4(A) REPORTING.Payments shall only be5provided under this section to grantees that re6port their costs of providing language services7as required under subsection (e) and may be8modified annually at the discretion of the Sec9

retary. If a grantee fails to provide the reports10under such section for the first year of a grant,11the Secretary may terminate the grant and so12licit applications from new grantees to partici13pate in the subsequent two years of the dem14onstration program.15(B) TYPE OF SERVICES. 16(i) IN GENERAL.Subject to clause17

(ii), payments shall be provided under this18section only to grantees that utilize com19petent bilingual staff or competent inter20preter or translation services which 21(I) if the grantee operates in a22State that has statewide health care23interpreter standards, meet the State24standards currently in effect; or

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4111(II) if the grantee operates in a

2State that does not have statewide3health care interpreter standards, uti4lizes competent interpreters who fol5low the National Council on Inter6preting in Health Cares Code of Eth7ics and Standards of Practice.8(ii) EXEMPTIONS.The requirements9of clause (i) shall not apply

10(I) in the case of a Medicare ben11eficiary who is limited English pro12ficient (who has been informed in the13beneficiarys primary language of the14availability of free interpreter and15translation services) and who requests16the use of family, friends, or other17

persons untrained in interpretation or18translation and the grantee documents19the request in the beneficiarys record;20and21(II) in the case of a medical22emergency where the delay directly as23sociated with obtaining a competent24interpreter or translation services

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4121would jeopardize the health of the pa2

tient.3Nothing in clause (ii)(II) shall be con4strued to exempt emergency rooms or simi5lar entities that regularly provide health6care services in medical emergencies from7having in place systems to provide com8petent interpreter and translation services9without undue delay.

10(d) ASSURANCES.Grantees under this section11shall 12(1) ensure that appropriate clinical and support13staff receive ongoing education and training in lin14guistically appropriate service delivery;15(2) ensure the linguistic competence of bilingual16providers;

17(3) offer and provide appropriate language serv18ices at no additional charge to each patient with lim19ited English proficiency at all points of contact, in20a timely manner during all hours of operation;21(4) notify Medicare beneficiaries of their right22to receive language services in their primary lan23guage;

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4131(5) post signage in the languages of the com2

monly encountered group or groups present in the3service area of the organization; and4(6) ensure that (A) primary language data are collected6for recipients of language services; and7(B) consistent with the privacy protections8provided under the regulations promulgated

9pursuant to section 264(c) of the Health InsurancePortability and Accountability Act of 199611(42 U.S.C. 1320d2 note), if the recipient of12language services is a minor or is incapacitated,13the primary language of the parent or legal14guardian is collected and utilized.(e) REPORTING REQUIREMENTS.Grantees under16

this section shall provide the Secretary with reports at the17conclusion of the each year of a grant under this section.18Each report shall include at least the following informa19tion:(1) The number of Medicare beneficiaries to21whom language services are provided.22(2) The languages of those Medicare bene23ficiaries.24(3) The types of language services provided(such as provision of services directly in non-English

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4141language by a bilingual health care provider or use

2of an interpreter).3(4) Type of interpretation (such as in-person,4telephonic, or video interpretation).(5) The methods of providing language services6(such as staff or contract with external independent7contractors or agencies).8

(6) The length of time for each interpretation9encounter.(7) The costs of providing language services11(which may be actual or estimated, as determined by12the Secretary).13(f) NO COST SHARING.Limited English proficient14Medicare beneficiaries shall not have to pay cost-sharingor co-pays for language services provided through this

16demonstration program.17(g) EVALUATION AND REPORT.The Secretary shall18conduct an evaluation of the demonstration program19under this section and shall submit to the appropriatecommittees of Congress a report not later than 1 year21after the completion of the program. The report shall in22clude the following:23(1) An analysis of the patient outcomes and24costs of furnishing care to the limited English proficientMedicare beneficiaries participating in the

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4151project as compared to such outcomes and costs for

2limited English proficient Medicare beneficiaries not3participating.4(2) The effect of delivering culturally and linguisticallyappropriate services on beneficiary access6to care, utilization of services, efficiency and cost-ef7fectiveness of health care delivery, patient satisfac8tion, and select health outcomes.9

(3) Recommendations, if any, regarding the extensionof such project to the entire Medicare pro11gram.12(h) GENERAL PROVISIONS.Nothing in this section13shall be construed to limit otherwise existing obligations14of recipients of Federal financial assistance under title VIof the Civil Rights Act of 1964 (42 U.S.C. 2000(d) et16seq.) or any other statute.17

(i) AUTHORIZATION OF APPROPRIATIONS.There18are authorized to be appropriated to carry out this section19$16,000,000 for each fiscal year of the demonstration program.21SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS22SERVICES.23(a) IN GENERAL.The Secretary of Health and24Human Services shall enter into an arrangement with theInstitute of Medicine under which the Institute will pre-

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4161pare and publish, not later than 3 years after the date

2of the enactment of this Act, a report on the impact of3language access services on the health and health care of4limited English proficient populations.(b) CONTENTS.Such report shall include 6(1) recommendations on the development and7implementation of policies and practices by health8

care organizations and providers for limited English9proficient patient populations;(2) a description of the effect of providing lan11guage access services on quality of health care and12access to care and reduced medical error; and13(3) a description of the costs associated with or14savings related to provision of language access services.16SEC. 1224. DEFINITIONS.

17In this subtitle:18(1) BILINGUAL.The term bilingual with re19spect to an individual means a person who has sufficientdegree of proficiency in two languages and can21ensure effective communication can occur in both22languages.23(2) COMPETENT INTERPRETER SERVICES.The24term competent interpreter services means atrans-language rendition of a spoken message in

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4171which the interpreter comprehends the source lan2

guage and can speak comprehensively in the target3language to convey the meaning intended in the4source language. The interpreter knows health andhealth-related terminology and provides accurate in6terpretations by choosing equivalent expressions that7convey the best matching and meaning to the source8language and captures, to the greatest possible ex9tent, all nuances intended in the source message.

(3) COMPETENT TRANSLATION SERVICES.The11

term competent translation services means a12trans-language rendition of a written document in13which the translator comprehends the source lan14guage and can write comprehensively in the targetlanguage to convey the meaning intended in the16source language. The translator knows health and17health-related terminology and provides accurate

18translations by choosing equivalent expressions that19convey the best matching and meaning to the sourcelanguage and captures, to the greatest possible ex21tent, all nuances intended in the source document.22(4) EFFECTIVE COMMUNICATION.The term23effective communication means an exchange of in24formation between the provider of health care orhealth care-related services and the limited English

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4181proficient recipient of such services that enables lim2

ited English proficient individuals to access, under3stand, and benefit from health care or health care-4related services.(5) INTERPRETING/INTERPRETATION.The6terms interpreting and interpretation mean the7transmission of a spoken message from one language8into another, faithfully, accurately, and objectively.9

(6) HEALTH CARE SERVICES.The termhealth care services means services that address

11physical as well as mental health conditions in all12care settings.13(7) HEALTH CARE-RELATED SERVICES.The14term health care-related services means human orsocial services programs or activities that provide ac16cess, referrals or links to health care.17

(8) LANGUAGE ACCESS.The term language18access means the provision of language services to19an LEP individual designed to enhance that individualsaccess to, understanding of or benefit from21health care or health care-related services.22(9) LANGUAGE SERVICES.The term lan23guage services means provision of health care serv24ices directly in a non-English language, interpretation,translation, and non-English signage.

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419

1(10) LIMITED ENGLISH PROFICIENT.The2term limited English proficient or LEP with re3spect to an individual means an individual who4speaks a primary language other than English and5who cannot speak, read, write or understand the6English language at a level that permits the indi7vidual to effectively communicate with clinical or

8nonclinical staff at an entity providing health care or9health care related services.10(11) MEDICARE BENEFICIARY.The term11Medicare beneficiary means an individual entitled12to benefits under part A of title XVIII of the Social13Security Act or enrolled under part B of such title.14

(12) MEDICARE PROGRAM.The term Medi15care program means the programs under parts A16through D of title XVIII of the Social Security Act.17(13) SERVICE PROVIDER.The term service18provider includes all suppliers, providers of services,19or entities under contract to provide coverage, items20or services under any part of title XVIII of the So21cial Security Act.

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4201Subtitle CMiscellaneous

2Improvements3SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS4PROCESS.5Section 1833(g)(5) of the Social Security Act (426U.S.C. 1395l(g)(5)), as amended by section 141 of the7Medicare Improvements for Patients and Providers Act of

82008 (Public Law 110275), is amended by striking De9cember 31, 2009 and inserting December 31, 2011.10SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNO11SUPPRESSIVE DRUGS FOR KIDNEY TRANS12PLANT PATIENTS AND OTHER RENAL DIALY13SIS PROVISIONS.14(a) PROVISION OF APPROPRIATE COVERAGE OF IM15MUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE PRO16GRAM FOR KIDNEY TRANSPLANT RECIPIENTS. 17

(1) CONTINUED ENTITLEMENT TO IMMUNO18SUPPRESSIVE DRUGS. 19(A) KIDNEY TRANSPLANT RECIPIENTS. 20Section 226A(b)(2) of the Social Security Act21(42 U.S.C. 4261(b)(2)) is amended by insert22ing (except for coverage of immunosuppressive23drugs under section 1861(s)(2)(J)) before ,24with the thirty-sixth month.

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4211(B) APPLICATION.Section 1836 of such

2Act (42 U.S.C. 1395o) is amended 3(i) by striking Every individual who 4and inserting (a) IN GENERAL.Every in5dividual who; and6(ii) by adding at the end the following7new subsection:8(b) SPECIAL RULES APPLICABLE TO INDIVIDUALS9

ONLY ELIGIBLE FOR COVERAGE OF IMMUNOSUPPRESSIVE10DRUGS. 11(1) IN GENERAL.In the case of an individual12whose eligibility for benefits under this title has13ended on or after January 1, 2012, except for the14coverage of immunosuppressive drugs by reason of

15section 226A(b)(2), the following rules shall apply:16(A) The individual shall be deemed to be17enrolled under this part for purposes of receiv18ing coverage of such drugs.19(B) The individual shall be responsible20for providing for payment of the portion of the21premium under section 1839 which is not cov22ered under the Medicare savings program (as23defined in section 1144(c)(7)) in order to re24ceive such coverage.

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4221(C) The provision of such drugs shall be

2subject to the application of 3(i) the deductible under section41833(b); and(ii) the coinsurance amount applica6ble for such drugs (as determined under7this part).8(D) If the individual is an inpatient of a

9hospital or other entity, the individual is entitledto receive coverage of such drugs under11this part.12(2) ESTABLISHMENT OF PROCEDURES IN13ORDER TO IMPLEMENT COVERAGE.The Secretary14shall establish procedures for (A) identifying individuals that are enti16tled to coverage of immunosuppressive drugs by

17reason of section 226A(b)(2); and18(B) distinguishing such individuals from19individuals that are enrolled under this part forthe complete package of benefits under this21part..22(C) TECHNICAL AMENDMENT TO CORRECT23DUPLICATE SUBSECTION DESIGNATION.Sub24section (d) of section 226A of such Act (42U.S.C. 4261), as added by section

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4231201(a)(3)(D)(ii) of the Social Security Inde2

pendence and Program Improvements Act of31994 (Public Law 103296; 108 Stat. 1497), is4redesignated as subsection (d).(2) EXTENSION OF SECONDARY PAYER RE6QUIREMENTS FOR ESRD BENEFICIARIES.Section71862(b)(1)(C) of such Act (42 U.S.C.81395y(b)(1)(C)) is amended by adding at the end9

the following new sentence:With regard to immunosuppressivedrugs furnished on or after the

11date of the enactment of the Americas Affordable12Health Choices Act of 2009, this subparagraph shall13be applied without regard to any time limitation..14(b) MEDICARE COVERAGE FOR ESRD PATIENTS. Section 1881 of such Act is further amended 16(1) in subsection (b)(14)(B)(iii), by inserting ,

17including oral drugs that are not the oral equivalent18of an intravenous drug (such as oral phosphate bind19ers and calcimimetics), after other drugs andbiologicals;21(2) in subsection (b)(14)(E)(ii) 22(A) in the first sentence 23(i) by striking a one-time election to24be excluded from the phase-in and insertingan election, with respect to 2011,

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42412012, or 2013, to be excluded from the

2phase-in (or the remainder of the phase-3in); and4(ii) by adding at the end the following:for such year and for each subse6quent year during the phase-in described7in clause (i); and8(B) in the second sentence

9(i) by striking January 1, 2011 andinserting the first date of such year; and11(ii) by inserting and at a time after12form and manner; and13(3) in subsection (h)(4)(E), by striking lesser 14and inserting greater.SEC. 1233. ADVANCE CARE PLANNING CONSULTATION.16

(a) MEDICARE. 17(1) IN GENERAL.Section 1861 of the Social18Security Act (42 U.S.C. 1395x) is amended 19(A) in subsection (s)(2) (i) by striking and at the end of21subparagraph (DD);22(ii) by adding and at the end of23subparagraph (EE); and24(iii) by adding at the end the followingnew subparagraph:

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4251(FF) advance care planning consultation (as

2defined in subsection (hhh)(1));; and3(B) by adding at the end the following new4subsection:Advance Care Planning Consultation6(hhh)(1) Subject to paragraphs (3) and (4), the7term advance care planning consultation means a con8sultation between the individual and a practitioner de9

scribed in paragraph (2) regarding advance care planning,if, subject to paragraph (3), the individual involved has11not had such a consultation within the last 5 years. Such12consultation shall include the following:13(A) An explanation by the practitioner of ad14vance care planning, including key questions andconsiderations, important steps, and suggested peo16ple to talk to.17(B) An explanation by the practitioner of ad18

vance directives, including living wills and durable19powers of attorney, and their uses.(C) An explanation by the practitioner of the21role and responsibilities of a health care proxy.22(D) The provision by the practitioner of a list23of national and State-specific resources to assist con24sumers and their families with advance care planning,including the national toll-free hotline, the ad-

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4261vance care planning clearinghouses, and State legal

2service organizations (including those funded3through the Older Americans Act of 1965).4(E) An explanation by the practitioner of thecontinuum of end-of-life services and supports avail6able, including palliative care and hospice, and bene7fits for such services and supports that are available8under this title.9(F)(i) Subject to clause (ii), an explanation oforders regarding life sustaining treatment or similar

11orders, which shall include 12(I) the reasons why the development of13such an order is beneficial to the individual and14the individuals family and the reasons whysuch an order should be updated periodically as16the health of the individual changes;

17(II) the information needed for an indi18vidual or legal surrogate to make informed deci19sions regarding the completion of such anorder; and21(III) the identification of resources that22an individual may use to determine the require23ments of the State in which such individual re24sides so that the treatment wishes of that individualwill be carried out if the individual is un

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4271able to communicate those wishes, including re2

quirements regarding the designation of a sur3rogate decisionmaker (also known as a health4care proxy).5(ii) The Secretary shall limit the requirement6for explanations under clause (i) to consultations7furnished in a State 8(I) in which all legal barriers have been

9addressed for enabling orders for life sustaining10treatment to constitute a set of medical orders11respected across all care settings; and12(II) that has in effect a program for or13ders for life sustaining treatment described in14clause (iii).15(iii) A program for orders for life sustaining

16treatment for a States described in this clause is a17program that 18(I) ensures such orders are standardized19and uniquely identifiable throughout the State;20(II) distributes or makes accessible such21orders to physicians and other health profes22sionals that (acting within the scope of the pro23fessionals authority under State law) may sign24orders for life sustaining treatment;

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4281(III) provides training for health care

2professionals across the continuum of care3about the goals and use of orders for life sus4taining treatment; and5(IV) is guided by a coalition of stake6holders includes representatives from emergency7medical services, emergency department physi8cians or nurses, state long-term care associa9tion, state medical association, state surveyors,

10agency responsible for senior services, state de11partment of health, state hospital association,12home health association, state bar association,13and state hospice association.14(2) A practitioner described in this paragraph is 15(A) a physician (as defined in subsection16(r)(1)); and

17(B) a nurse practitioner or physicians assist18ant who has the authority under State law to sign19orders for life sustaining treatments.20(3)(A) An initial preventive physical examination21under subsection (WW), including any related discussion22during such examination, shall not be considered an ad23vance care planning consultation for purposes of applying24the 5-year limitation under paragraph (1).

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4291(B) An advance care planning consultation with re2

spect to an individual may be conducted more frequently3than provided under paragraph (1) if there is a significant4change in the health condition of the individual, includingdiagnosis of a chronic, progressive, life-limiting disease, a6life-threatening or terminal diagnosis or life-threatening7injury, or upon admission to a skilled nursing facility, a8long-term care facility (as defined by the Secretary), or

9a hospice program.(4) A consultation under this subsection may in11clude the formulation of an order regarding life sustaining12treatment or a similar order.13(5)(A) For purposes of this section, the term order14regarding life sustaining treatment means, with respectto an individual, an actionable medical order relating to16the treatment of that individual that

17(i) is signed and dated by a physician (as de18fined in subsection (r)(1)) or another health care19professional (as specified by the Secretary and whois acting within the scope of the professionals au21thority under State law in signing such an order, in22cluding a nurse practitioner or physician assistant)23and is in a form that permits it to stay with the in24dividual and be followed by health care professionalsand providers across the continuum of care;

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4301(ii) effectively communicates the individuals

2preferences regarding life sustaining treatment, in3cluding an indication of the treatment and care de4sired by the individual;5(iii) is uniquely identifiable and standardized6within a given locality, region, or State (as identified7by the Secretary); and8(iv) may incorporate any advance directive (as

9defined in section 1866(f)(3)) if executed by the in10dividual.11(B) The level of treatment indicated under subpara12graph (A)(ii) may range from an indication for full treat13ment to an indication to limit some or all or specified14interventions. Such indicated levels of treatment may in15clude indications respecting, among other items 16(i) the intensity of medical intervention if the17

patient is pulse less, apneic, or has serious cardiac18or pulmonary problems;19(ii) the individuals desire regarding transfer20to a hospital or remaining at the current care set21ting;22(iii) the use of antibiotics; and23(iv) the use of artificially administered nutri24tion and hydration..

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4311(2) PAYMENT.Section 1848(j)(3) of such Act

2(42 U.S.C. 1395w-4(j)(3)) is amended by inserting3(2)(FF), after (2)(EE),.4(3) FREQUENCY LIMITATION.Section 1862(a)of such Act (42 U.S.C. 1395y(a)) is amended 6(A) in paragraph (1) 7(i) in subparagraph (N), by striking8and

at the end;9

(ii) in subparagraph (O) by strikingthe semicolon at the end and inserting ,11and; and12(iii) by adding at the end the fol13lowing new subparagraph:14(P) in the case of advance care planningconsultations (as defined in section16

1861(hhh)(1)), which are performed more fre17quently than is covered under such section;;18and19(B) in paragraph (7), by striking or (K) and inserting (K), or (P).21(4) EFFECTIVE DATE.The amendments made22by this subsection shall apply to consultations fur23nished on or after January 1, 2011.24(b) EXPANSION OF PHYSICIAN QUALITY REPORTINGINITIATIVE FOR END OF LIFE CARE.

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4321(1) PHYSICIANS QUALITY REPORTING INITIA2

TIVE.Section 1848(k)(2) of the Social Security Act3(42 U.S.C. 1395w4(k)(2)) is amended by adding at4the end the following new paragraphs:(3) PHYSICIANS QUALITY REPORTING INITIA6TIVE. 7(A) IN GENERAL.For purposes of re8porting data on quality measures for covered9professional services furnished during 2011 and

any subsequent year, to the extent that meas11ures are available, the Secretary shall include12quality measures on end of life care and ad13vanced care planning that have been adopted or14endorsed by a consensus-based organization, ifappropriate. Such measures shall measure both16the creation of and adherence to orders for life-17sustaining treatment.18

(B) PROPOSED SET OF MEASURES. The19Secretary shall publish in the Federal Registerproposed quality measures on end of life care21and advanced care planning that the Secretary22determines are described in subparagraph (A)23and would be appropriate for eligible profes24sionals to use to submit data to the Secretary.The Secretary shall provide for a period of pub-

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4331lic comment on such set of measures before fi2

nalizing such proposed measures..3(c) INCLUSION OF INFORMATION IN MEDICARE &4YOU HANDBOOK. (1) MEDICARE & YOU HANDBOOK. 6(A) IN GENERAL.Not later than 1 year7after the date of the enactment of this Act, the8Secretary of Health and Human Services shall

9update the online version of the Medicare &You Handbook to include the following:11(i) An explanation of advance care12planning and advance directives, includ13ing 14(I) living wills;(II) durable power of attorney;16(III) orders of life-sustaining

17treatment; and18(IV) health care proxies.19(ii) A description of Federal and Stateresources available to assist individuals21and their families with advance care plan22ning and advance directives, including 23(I) available State legal service24organizations to assist individualswith advance care planning, including

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4341those organizations that receive fund2

ing pursuant to the Older Americans3Act of 1965 (42 U.S.C. 93001 et4seq.);(II) website links or addresses for6State-specific advance directive forms;7and8(III) any additional information,

9as determined by the Secretary.(B) UPDATE OF PAPER AND SUBSEQUENT11VERSIONS.The Secretary shall include the in12formation described in subparagraph (A) in all13paper and electronic versions of the Medicare &14You Handbook that are published on or afterthe date that is 1 year after the date of the en16actment of this Act.17

SEC. 1234. PART B SPECIAL ENROLLMENT PERIOD AND18WAIVER OF LIMITED ENROLLMENT PENALTY19FOR TRICARE BENEFICIARIES.(a) PART B SPECIAL ENROLLMENT PERIOD. 21(1) IN GENERAL.Section 1837 of the Social22Security Act (42 U.S.C. 1395p) is amended by add23ing at the end the following new subsection:24(l)(1) In the case of any individual who is a coveredbeneficiary (as defined in section 1072(5) of title 10,

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4351United States Code) at the time the individual is entitled

2to hospital insurance benefits under part A under section3226(b) or section 226A and who is eligible to enroll but4who has elected not to enroll (or to be deemed enrolled)during the individuals initial enrollment period, there6shall be a special enrollment period described in paragraph7(2).8(2) The special enrollment period described in this9

paragraph, with respect to an individual, is the 12-monthperiod beginning on the day after the last day of the initial11enrollment period of the individual or, if later, the 12-12month period beginning with the month the individual is13notified of enrollment under this section.14(3) In the case of an individual who enrolls duringthe special enrollment period provided under paragraph

16(1), the coverage period under this part shall begin on the17first day of the month in which the individual enrolls or,18at the option of the individual, on the first day of the sec19ond month following the last month of the individuals initialenrollment period.21(4) The Secretary of Defense shall establish a meth22od for identifying individuals described in paragraph (1)23and providing notice to them of their eligibility for enroll24ment during the special enrollment period described inparagraph (2)..

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4361(2) EFFECTIVE DATE.The amendment made

2by paragraph (1) shall apply to elections made on or3after the date of the enactment of this Act.4(b) WAIVER OF INCREASE OF PREMIUM. (1) IN GENERAL.Section 1839(b) of the So6cial Security Act (42 U.S.C. 1395r(b)) is amended7by striking section 1837(i)(4) and inserting sub8section (i)(4) or (l) of section 1837.9

(2) EFFECTIVE DATE. (A) IN GENERAL.The amendment made

11by paragraph (1) shall apply with respect to12elections made on or after the date of the en13actment of this Act.14(B) REBATES FOR CERTAIN DISABLEDAND ESRD BENEFICIARIES. 16(i) IN GENERAL.With respect to17

premiums for months on or after January182005 and before the month of the enact19ment of this Act, no increase in the premiumshall be effected for a month in the21case of any individual who is a covered22beneficiary (as defined in section 1072(5)23of title 10, United States Code) at the time24the individual is entitled to hospital insurancebenefits under part A of title XVIII

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4371of the Social Security Act under section

2226(b) or 226A of such Act, and who is el3igible to enroll, but who has elected not to4enroll (or to be deemed enrolled), during5the individuals initial enrollment period,6and who enrolls under this part within the712-month period that begins on the first8

day of the month after the month of notifi9cation of entitlement under this part.10(ii) CONSULTATION WITH DEPART11MENT OF DEFENSE.The Secretary of12Health and Human Services shall consult13with the Secretary of Defense in identi14fying individuals described in this para15graph.16(iii) REBATES.The Secretary of

17Health and Human Services shall establish18a method for providing rebates of premium19increases paid for months on or after Jan20uary 1, 2005, and before the month of the21enactment of this Act for which a penalty22was applied and collected.

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438

SEC. 1235. EXCEPTION FOR USE OF MORE RECENT TAX

YEAR IN CASE OF GAINS FROM SALE OF PRI

MARY RESIDENCE IN COMPUTING PART B IN

COME-RELATED PREMIUM.

(a) IN GENERAL.Section 1839(i)(4)(C)(ii)(II) ofthe Social Security Act (42 U.S.C. 1395r(i)(4)(C)(ii)(II))

is amended by insertingsale of primary residence,

afterdivorce of such individual,.

(b) EFFECTIVE DATE.The amendment made bysubsection (a) shall apply to premiums and payments foryears beginning with 2011.SEC. 1236. DEMONSTRATION PROGRAM ON USE OF PA

TIENT DECISIONS AIDS.

(a) IN GENERAL.The Secretary of Health andHuman Services shall establish a shared decision makingdemonstration program (in this subsection referred to as

the program) under the Medicare program using patientdecision aids to meet the objective of improving theunderstanding by Medicare beneficiaries of their medicaltreatment options, as compared to comparable Medicarebeneficiaries who do not participate in a shared decisionmaking process using patient decision aids.(b) SITES. (1) ENROLLMENT.The Secretary shall enrollin the program not more than 30 eligible providerswho have experience in implementing, and have in-f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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4391vested in the necessary infrastructure to implement,

2shared decision making using patient decision aids.3(2) APPLICATION.An eligible provider seeking4to participate in the program shall submit to theSecretary an application at such time and containing6such information as the Secretary may require.7(3) PREFERENCE.In enrolling eligible pro8viders in the program, the Secretary shall give pref9

erence to eligible providers that (A) have documented experience in using

11patient decision aids for the conditions identi12fied by the Secretary and in using shared deci13sion making;14(B) have the necessary information technologyinfrastructure to collect the information16required by the Secretary for reporting pur17poses; and18

(C) are trained in how to use patient deci19sion aids and shared decision making.(c) FOLLOW-UP COUNSELING VISIT. 21(1) IN GENERAL.An eligible provider partici22pating in the program shall routinely schedule Medi23care beneficiaries for a counseling visit after the24viewing of such a patient decision aid to answer anyquestions the beneficiary may have with respect to

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4401the medical care of the condition involved and to as2

sist the beneficiary in thinking through how their3preferences and concerns relate to their medical4care.(2) PAYMENT FOR FOLLOW-UP COUNSELING6VISIT.The Secretary shall establish procedures for7making payments for such counseling visits provided8to Medicare beneficiaries under the program. Such

9procedures shall provide for the establishment (A) of a code (or codes) to represent such11services; and12(B) of a single payment amount for such13service that includes the professional time of14the health care provider and a portion of thereasonable costs of the infrastructure of the eli16gible provider such as would be made under the

17applicable payment systems to that provider for18similar covered services.19(d) COSTS OF AIDS.An eligible provider participatingin the program shall be responsible for the costs21of selecting, purchasing, and incorporating such patient22decision aids into the providers practice, and reporting23data on quality and outcome measures under the program.24(e) FUNDING.The Secretary shall provide for thetransfer from the Federal Supplementary Medical Insur

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4411ance Trust Fund established under section 1841 of the

2Social Security Act (42 U.S.C. 1395t) of such funds as3are necessary for the costs of carrying out the program.4(f) WAIVER AUTHORITY.The Secretary may waivesuch requirements of titles XI and XVIII of the Social6Security Act (42 U.S.C. 1301 et seq. and 1395 et seq.)7as may be necessary for the purpose of carrying out the8

program.9(g) REPORT.Not later than 12 months after thedate of completion of the program, the Secretary shall sub11mit to Congress a report on such program, together with12recommendations for such legislation and administrative13action as the Secretary determines to be appropriate. The14final report shall include an evaluation of the impact ofthe use of the program on health quality, utilization of16

health care services, and on improving the quality of life17of such beneficiaries.18(h) DEFINITIONS.In this section:19(1) ELIGIBLE PROVIDER.The term eligibleprovider means the following:21(A) A primary care practice.22(B) A specialty practice.23(C) A multispecialty group practice.24(D) A hospital.(E) A rural health clinic.

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4421(F) A Federally qualified health center (as

2defined in section 1861(aa)(4) of the Social Se3curity Act (42 U.S.C. 1395x(aa)(4)).4(G) An integrated delivery system.5(H) A State cooperative entity that in6cludes the State government and at least one7other health care provider which is set up for8the purpose of testing shared decision making

9and patient decision aids.10(2) PATIENT DECISION AID.The term pa11tient decision aid means an educational tool (such12as the Internet, a video, or a pamphlet) that helps13patients (or, if appropriate, the family caregiver of14the patient) understand and communicate their be15liefs and preferences related to their treatment op16tions, and to decide with their health care provider

17what treatments are best for them based on their18treatment options, scientific evidence, circumstances,19beliefs, and preferences.20(3) SHARED DECISION MAKING.The term21shared decision making means a collaborative22process between patient and clinician that engages23the patient in decision making, provides patients24with information about trade-offs among treatment

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4431options, and facilitates the incorporation of patient

2preferences and values into the medical plan.3TITLE IIIPROMOTING PRI4MARY CARE, MENTAL5HEALTH SERVICES, AND CO6ORDINATED CARE7SEC. 1301. ACCOUNTABLE CARE ORGANIZATION PILOT8PROGRAM.

9Title XVIII of the Social Security Act is amended by10inserting after section 1866C the following new section:11ACCOUNTABLE CARE ORGANIZATION PILOT PROGRAM12SEC. 1866D. (a) IN GENERAL.The Secretary shall13conduct a pilot program (in this section referred to as the14pilot program) to test different payment incentive mod15els, including (to the extent practicable) the specific pay16

ment incentive models described in subsection (c), de17signed to reduce the growth of expenditures and improve18health outcomes in the provision of items and services19under this title to applicable beneficiaries (as defined in20subsection (d)) by qualifying accountable care organiza21tions (as defined in subsection (b)(1)) in order to 22(1) promote accountability for a patient popu23lation and coordinate items and services under parts24A and B;

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4441(2) encourage investment in infrastructure and

2redesigned care processes for high quality and effi3cient service delivery; and4(3) reward physician practices and other physicianorganizational models for the provision of high6quality and efficient health care services.7(b) QUALIFYING ACCOUNTABLE CARE ORGANIZA8TIONS (ACOS). 9(1) QUALIFYING ACO DEFINED.

In this section:11

(A) IN GENERAL.The terms qualifying12accountable care organization and qualifying13ACO mean a group of physicians or other phy14sician organizational model (as defined in subparagraph(D)) that 16(i) is organized at least in part for17the purpose of providing physicians serv18

ices; and19(ii) meets such criteria as the Secretarydetermines to be appropriate to par21ticipate in the pilot program, including the22criteria specified in paragraph (2).23(B) INCLUSION OF OTHER PROVIDERS. 24Nothing in this subsection shall be construed aspreventing a qualifying ACO from including a

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4451hospital or any other provider of services or

2supplier furnishing items or services for which3payment may be made under this title that is4affiliated with the ACO under an arrangementstructured so that such provider or supplier6participates in the pilot program and shares in7any incentive payments under the pilot pro8gram.

9(C) PHYSICIAN.The term physician includes,except as the Secretary may otherwise11provide, any individual who furnishes services12for which payment may be made as physicians 13services.14(D) OTHER PHYSICIAN ORGANIZATIONALMODEL.The term other physician organiza16tion model means, with respect to a qualifying

17ACO any model of organization under which18physicians enter into agreements with other19providers for the purposes of participation inthe pilot program in order to provide high qual21ity and efficient health care services and share22in any incentive payments under such program23(E) OTHER SERVICES.Nothing in this24paragraph shall be construed as preventing aqualifying ACO from furnishing items or serv

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4461ices, for which payment may not be made under

2this title, for purposes of achieving performance3goals under the pilot program.4(2) QUALIFYING CRITERIA.The following are5criteria described in this paragraph for an organized6group of physicians to be a qualifying ACO:7(A) The group has a legal structure that

8would allow the group to receive and distribute9incentive payments under this section.10(B) The group includes a sufficient num11ber of primary care physicians for the applica12ble beneficiaries for whose care the group is ac13countable (as determined by the Secretary).14(C) The group reports on quality meas15ures in such form, manner, and frequency as16

specified by the Secretary (which may be for17the group, for providers of services and sup18pliers, or both).19(D) The group reports to the Secretary20(in a form, manner and frequency as specified21by the Secretary) such data as the Secretary22determines appropriate to monitor and evaluate23the pilot program.

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4471(E) The group provides notice to applica2

ble beneficiaries regarding the pilot program (as3determined appropriate by the Secretary).4(F) The group contributes to a best practicesnetwork or website, that shall be main6tained by the Secretary for the purpose of shar7ing strategies on quality improvement, care co8ordination, and efficiency that the groups be9lieve are effective.(G) The group utilizes patient-centered11

processes of care, including those that empha12size patient and caregiver involvement in plan13ning and monitoring of ongoing care manage14ment plan.(H) The group meets other criteria deter16mined to be appropriate by the Secretary.17(c) SPECIFIC PAYMENT INCENTIVE MODELS.The18specific payment incentive models described in this sub19section are the following:(1) PERFORMANCE TARGET MODEL.Under21

the performance target model under this paragraph22(in this paragraph referred to as the performance23target model):24(A) IN GENERAL.A qualifying ACOqualifies to receive an incentive payment if ex-

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4481penditures for applicable beneficiaries are less

2than a target spending level or a target rate of3growth. The incentive payment shall be made4only if savings are greater than would resultfrom normal variation in expenditures for items6and services covered under parts A and B.7(B) COMPUTATION OF PERFORMANCE8

TARGET. 9

(i) IN GENERAL.The Secretaryshall establish a performance target for11each qualifying ACO comprised of a base12amount (described in clause (ii)) increased13to the current year by an adjustment fac14tor (described in clause (iii)). Such a targetmay be established on a per capita16

basis, as the Secretary determines to be17appropriate.18(ii) BASE AMOUNT.For purposes of19clause (i), the base amount in this subparagraphis equal to the average total21payments (or allowed charges) under parts22A and B (and may include part D, if the23Secretary determines appropriate) for ap24plicable beneficiaries for whom the qualifyingACO furnishes items and services in

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4491a base period determined by the Secretary.

2Such base amount may be determined on3a per capita basis.4(iii) ADJUSTMENT FACTOR.For5purposes of clause (i), the adjustment fac6tor in this clause may equal an annual per7capita amount that reflects changes in ex8penditures from the period of the base

9amount to the current year that would rep10resent an appropriate performance target11for applicable beneficiaries (as determined12by the Secretary). Such adjustment factor13may be determined as an amount or rate,14may be determined on a national, regional,15local, or organization-specific basis, and

16may be determined on a per capita basis.17Such adjustment factor also may be ad18justed for risk as determined appropriate19by the Secretary.20(iv) REBASING.Under this model21the Secretary shall periodically rebase the22base expenditure amount described in23clause (ii).24(C) MEETING TARGET.

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450

1(i) IN GENERAL.Subject to clause2(ii), a qualifying ACO that meet or exceeds3annual quality and performance targets for4a year shall receive an incentive payment5for such year equal to a portion (as deter6mined appropriate by the Secretary) of the7

amount by which payments under this title8for such year relative are estimated to be9below the performance target for such10year, as determined by the Secretary. The11Secretary may establish a cap on incentive12payments for a year for a qualifying ACO.13(ii) LIMITATION. The Secretary

14shall limit incentive payments to each15qualifying ACO under this paragraph as16necessary to ensure that the aggregate ex17penditures with respect to applicable bene18ficiaries for such ACOs under this title (in19clusive of incentive payments described in20this subparagraph) do not exceed the21amount that the Secretary estimates would22be expended for such ACO for such bene23ficiaries if the pilot program under this24section were not implemented.

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4511(D) REPORTING AND OTHER REQUIRE2

MENTS.In carrying out such model, the Sec3retary may (as the Secretary determines to be4appropriate) incorporate reporting requirements,incentive payments, and penalties re6lated to the physician quality reporting initia7tive (PQRI), electronic prescribing, electronic8health records, and other similar initiatives9under section 1848, and may use alternativecriteria than would otherwise apply under such

11section for determining whether to make such12payments. The incentive payments described in13this subparagraph shall not be included in the14limit described in subparagraph (C)(ii) or in theperformance target model described in this16paragraph.17(2) PARTIAL CAPITATION MODEL.

18(A) IN GENERAL.Subject to subpara19graph (B), a partial capitation model describedin this paragraph (in this paragraph referred to21as a partial capitation model) is a model in22which a qualifying ACO would be at financial23risk for some, but not all, of the items and serv24ices covered under parts A and B, such as atrisk for some or all physicians services or all

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4521items and services under part B. The Secretary

2may limit a partial capitation model to ACOs3that are highly integrated systems of care and4to ACOs capable of bearing risk, as determined5to be appropriate by the Secretary.6(B) NO ADDITIONAL PROGRAM EXPENDI7TURES.Payments to a qualifying ACO for ap8plicable beneficiaries for a year under the par9

tial capitation model shall be established in a10manner that does not result in spending more11for such ACO for such beneficiaries than would12otherwise be expended for such ACO for such13beneficiaries for such year if the pilot program14were not implemented, as estimated by the Sec15retary.16

(3) OTHER PAYMENT MODELS. 17(A) IN GENERAL.Subject to subpara18graph (B), the Secretary may develop other19payment models that meet the goals of this20pilot program to improve quality and efficiency.21(B) NO ADDITIONAL PROGRAM EXPENDI22TURES.Subparagraph (B) of paragraph (2)23shall apply to a payment model under subpara24graph (A) in a similar manner as such subpara

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4531graph (B) applies to the payment model under

2paragraph (2).3(d) APPLICABLE BENEFICIARIES. 4(1) IN GENERAL.In this section, the termapplicable beneficiary means, with respect to a6qualifying ACO, an individual who 7(A) is enrolled under part B and entitled8

to benefits under part A;9(B) is not enrolled in a Medicare Advantageplan under part C or a PACE program11under section 1894; and12(C) meets such other criteria as the Sec13retary determines appropriate, which may in14clude criteria relating to frequency of contactwith physicians in the ACO16(2) FOLLOWING APPLICABLE BENE17

FICIARIES.The Secretary may monitor data on ex18penditures and quality of services under this title19after an applicable beneficiary discontinues receivingservices under this title through a qualifying ACO.21(e) IMPLEMENTATION. 22(1) STARTING DATE.The pilot program shall23begin no later than January 1, 2012. An agreement24with a qualifying ACO under the pilot program maycover a multi-year period of between 3 and 5 years.

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4541(2) WAIVER.The Secretary may waive such

2provisions of this title (including section 1877) and3title XI in the manner the Secretary determines nec4essary in order implement the pilot program.5(3) PERFORMANCE RESULTS REPORTS.The6Secretary shall report performance results to quali7fying ACOs under the pilot program at least annu8ally.9(4) LIMITATIONS ON REVIEW.

There shall be10

no administrative or judicial review under section111869, section 1878, or otherwise of 12(A) the elements, parameters, scope, and13duration of the pilot program;14(B) the selection of qualifying ACOs for15the pilot program;

16(C) the establishment of targets, meas17urement of performance, determinations with18respect to whether savings have been achieved19and the amount of savings;20(D) determinations regarding whether, to21whom, and in what amounts incentive payments22are paid; and23(E) decisions about the extension of the24program under subsection (g), expansion of the

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4551program under subsection (h) or extensions

2under subsection (i).3(5) ADMINISTRATION.Chapter 35 of title 44,4United States Code shall not apply to this section.(f) EVALUATION; MONITORING. 6(1) IN GENERAL.The Secretary shall evalu7ate the payment incentive model for each qualifying8ACO under the pilot program to assess impacts on

9beneficiaries, providers of services, suppliers and theprogram under this title. The Secretary shall make11such evaluation publicly available within 60 days of12the date of completion of such report.13(2) MONITORING.The Inspector General of14the Department of Health and Human Services shallprovide for monitoring of the operation of ACOs16

under the pilot program with regard to violations of17section 1877 (popularly known as the Stark law).18(g) EXTENSION OF PILOT AGREEMENT WITH SUC19CESSFUL ORGANIZATIONS. (1) REPORTS TO CONGRESS.Not later than212 years after the date the first agreement is entered22into under this section, and biennially thereafter for23six years, the Secretary shall submit to Congress24and make publicly available a report on the use ofauthorities under the pilot program. Each report

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4561shall address the impact of the use of those authori2

ties on expenditures, access, and quality under this3title.4(2) EXTENSION.Subject to the report providedunder paragraph (1), with respect to a quali6fying ACO, the Secretary may extend the duration7of the agreement for such ACO under the pilot pro8gram as the Secretary determines appropriate if 9(A) the ACO receives incentive payments

with respect to any of the first 4 years of the11pilot agreement and is consistently meeting12quality standards or13(B) the ACO is consistently exceeding14quality standards and is not increasing spendingunder the program.16(3) TERMINATION.The Secretary may termi17nate an agreement with a qualifying ACO under the

18pilot program if such ACO did not receive incentive19payments or consistently failed to meet qualitystandards in any of the first 3 years under the pro21gram.22(h) EXPANSION TO ADDITIONAL ACOS. 23(1) TESTING AND REFINEMENT OF PAYMENT24INCENTIVE MODELS.Subject to the evaluation describedin subsection (f), the Secretary may enter

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4571into agreements under the pilot program with addi2

tional qualifying ACOs to further test and refine3payment incentive models with respect to qualifying4ACOs.(2) EXPANDING USE OF SUCCESSFUL MODELS6TO PROGRAM IMPLEMENTATION. 7(A) IN GENERAL.Subject to subpara8graph (B), the Secretary may issue regulations9

to implement, on a permanent basis, 1 or moremodels if, and to the extent that, such models11are beneficial to the program under this title, as12determined by the Secretary.13(B) CERTIFICATION.The Chief Actuary14of the Centers for Medicare & Medicaid Servicesshall certify that 1 or more of such models16described in subparagraph (A) would result in

17estimated spending that would be less than18what spending would otherwise be estimated to19be in the absence of such expansion.(i) TREATMENT OF PHYSICIAN GROUP PRACTICE21DEMONSTRATION. 22(1) EXTENSION.The Secretary may enter in23to an agreement with a qualifying ACO under the24demonstration under section 1866A, subject to re-basing and other modifications deemed appropriate

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4581by the Secretary, until the pilot program under this

2section is operational.3(2) TRANSITION.For purposes of extension4of an agreement with a qualifying ACO under subsection(g)(2), the Secretary shall treat receipt of an6incentive payment for a year by an organization7under the physician group practice demonstration8

pursuant to section 1866A as a year for which an9incentive payment is made under such subsection, aslong as such practice group practice organization11meets the criteria under subsection (b)(2).12(j) ADDITIONAL PROVISIONS. 13(1) AUTHORITY FOR SEPARATE INCENTIVE14ARRANGEMENTS.The Secretary may create separateincentive arrangements (including using mul16

tiple years of data, varying thresholds, varying17shared savings amounts, and varying shared savings18limits) for different categories of qualifying ACOs to19reflect natural variations in data availability, variationin average annual attributable expenditures,21program integrity, and other matters the Secretary22deems appropriate.23(2) ENCOURAGEMENT OF PARTICIPATION OF24SMALLER ORGANIZATIONS.In order to encouragethe participation of smaller accountable care organi

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4591zations under the pilot program, the Secretary may

2limit a qualifying ACOs exposure to high cost pa3tients under the program.4(3) INVOLVEMENT IN PRIVATE PAYER AR-RANGEMENTS.Nothing in this section shall be con6strued as preventing qualifying ACOs participating7in the pilot program from negotiating similar con8tracts with private payers.9(4) ANTIDISCRIMINATION LIMITATION.The

Secretary shall not enter into an agreement with an11entity to provide health care items or services under12the pilot program, or with an entity to administer13the program, unless such entity guarantees that it14will not deny, limit, or condition the coverage or provisionof benefits under the program, for individuals16eligible to be enrolled under such program, based on17

any health status-related factor described in section182702(a)(1) of the Public Health Service Act.19(5) CONSTRUCTION.Nothing in this sectionshall be construed to compel or require an organiza21tion to use an organization-specific target growth22rate for an accountable care organization under this23section for purposes of section 1848.24(6) FUNDING.For purposes of administeringand carrying out the pilot program, other than for

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460payments for items and services furnished under this

title and incentive payments under subsection (c)(1),in addition to funds otherwise appropriated, thereare appropriated to the Secretary for the Center for

Medicare & Medicaid Services Program ManagementAccount $25,000,000 for each of fiscal years 2010through 2014 and $20,000,000 for fiscal year 2015.Amounts appropriated under this paragraph for afiscal year shall be available until expended..

SEC. 1302. MEDICAL HOME PILOT PROGRAM.

(a) IN GENERAL.Title XVIII of the Social SecurityAct is amended by inserting after section 1866D, as inserted

by section 1301, the following new section:MEDICAL HOME PILOT PROGRAMSEC. 1866E. (a) ESTABLISHMENT AND MEDICALHOME MODELS.

(1) ESTABLISHMENT OF PILOT PROGRAM. The Secretary shall establish a medical home pilotprogram (in this section referred to as the pilot program)for the purpose of evaluating the feasibilityand advisability of reimbursing qualified patient-centeredmedical homes for furnishing medical home

services (as defined under subsection (b)(1)) to highneed beneficiaries (as defined in subsection(d)(1)(C)) and to targeted high need beneficiaries(as defined in subsection (c)(1)(C)).

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4611(2) SCOPE.Subject to subsection (g), the

2pilot program shall include urban, rural, and under3served areas.4(3) MODELS OF MEDICAL HOMES IN THEPILOT PROGRAM.The pilot program shall evaluate6each of the following medical home models:7(A) INDEPENDENT PATIENT-CENTERED8MEDICAL HOME MODEL.Independent patient-

9centered medical home model under subsection(c).11(B) COMMUNITY-BASED MEDICAL HOME12MODEL.Community-based medical home13model under subsection (d).14(4) PARTICIPATION OF NURSE PRACTITIONERSAND PHYSICIAN ASSISTANTS. 16

(A) Nothing in this section shall be con17strued as preventing a nurse practitioner from18leading a patient centered medical home so long19as (i) all the requirements of this sec21tion are met; and22(ii) the nurse practitioner is acting23consistently with State law.24(B) Nothing in this section shall be construedas preventing a physician assistant from

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4621participating in a patient centered medical

2home so long as 3(i) all the requirements of this sec4tion are met; and5(ii) the physician assistant is acting6consistently with State law.7(b) DEFINITIONS.For purposes of this section:8(1) PATIENT-CENTERED MEDICAL HOME9

SERVICES.The term patient-centered medical10home services means services that 11(A) provide beneficiaries with direct and12ongoing access to a primary care or principal13care by a physician or nurse practitioner who14accepts responsibility for providing first contact,

15continuous and comprehensive care to such ben16eficiary;17(B) coordinate the care provided to a ben18eficiary by a team of individuals at the practice19level across office, institutional and home set20tings led by a primary care or principal care21physician or nurse practitioner, as needed and22appropriate;23(C) provide for all the patients health24care needs or take responsibility for appro-

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4631priately arranging care with other qualified pro2

viders for all stages of life;3(D) provide continuous access to care and4communication with participating beneficiaries;(E) provide support for patient self-man6agement, proactive and regular patient moni7toring, support for family caregivers, use pa8tient-centered processes, and coordination with9community resources;(F) integrate readily accessible, clinically

11useful information on participating patients12that enables the practice to treat such patients13comprehensively and systematically; and14(G) implement evidence-based guidelinesand apply such guidelines to the identified16needs of beneficiaries over time and with the in17tensity needed by such beneficiaries.18

(2) PRIMARY CARE.The term primary care 19means health care that is provided by a physician ornurse practitioner who practices in the field of fam21ily medicine, general internal medicine, geriatric22medicine, or pediatric medicine.23(3) PRINCIPAL CARE.The term principal24care means integrated, accessible health care that isprovided by a physician who is a medical sub-

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4641specialist that addresses the majority of the personal

2health care needs of patients with chronic conditions3requiring the subspecialists expertise, and for whom4the subspecialist assumes care management.5(c) INDEPENDENT PATIENT-CENTERED MEDICAL6HOME MODEL. 7(1) IN GENERAL.

8(A) PAYMENT AUTHORITY.Under the9independent patient-centered medical home10model under this subsection, the Secretary shall11make payments for medical home services fur12nished by an independent patient-centered med13ical home (as defined in subparagraph (B))14pursuant to paragraph (3)(B) for a targeted15

high need beneficiaries (as defined in subpara16graph (C)).17(B) INDEPENDENT PATIENT-CENTERED18MEDICAL HOME DEFINED.In this section, the19term independent patient-centered medical20home means a physician-directed or nurse-21practitioner-directed practice that is qualified22under paragraph (2) as 23(i) providing beneficiaries with pa24tient-centered medical home services; and

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4651(ii) meets such other requirements as

2the Secretary may specify.3(C) TARGETED HIGH NEED BENEFICIARY4DEFINED.For purposes of this subsection, theterm targeted high need beneficiary means a6high need beneficiary who, based on a risk score7as specified by the Secretary, is generally within8

the upper 50th percentile of Medicare bene9ficiaries.(D) BENEFICIARY ELECTION TO PARTICI11PATE.The Secretary shall determine an ap12propriate method of ensuring that beneficiaries13have agreed to participate in the pilot program.14(E) IMPLEMENTATION.The pilot programunder this subsection shall begin no later16than 6 months after the date of the enactment17

of this section.18(2) STANDARD SETTING AND QUALIFICATION19PROCESS FOR PATIENT-CENTERED MEDICALHOMES.The Secretary shall review alternative21models for standard setting and qualification, and22shall establish a process 23(A) to establish standards to enable med24ical practices to qualify as patient-centeredmedical homes; and

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4661(B) to initially provide for the review and

2certification of medical practices as meeting3such standards.4(3) PAYMENT. 5(A) ESTABLISHMENT OF METHOD6OLOGY.The Secretary shall establish a meth7odology for the payment for medical home serv8ices furnished by independent patient-centered9

medical homes. Under such methodology, the10Secretary shall adjust payments to medical11homes based on beneficiary risk scores to en12sure that higher payments are made for higher13risk beneficiaries.14(B) PER BENEFICIARY PER MONTH PAY15MENTS.Under such payment methodology, the16Secretary shall pay independent patient-cen17

tered medical homes a monthly fee for each tar18geted high need beneficiary who consents to re19ceive medical home services through such med20ical home.21(C) PROSPECTIVE PAYMENT.The fee22under subparagraph (B) shall be paid on a pro23spective basis.

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4671(D) AMOUNT OF PAYMENT.In deter2

mining the amount of such fee, the Secretary3shall consider the following:4(i) The clinical work and practice expensesinvolved in providing the medical6home services provided by the independent7patient-centered medical home (such as8providing increased access, care coordina9

tion, population disease management, andteaching self-care skills for managing11chronic illnesses) for which payment is not12made under this title as of the date of the13enactment of this section.14(ii) Allow for differential paymentsbased on capabilities of the independent16patient-centered medical home.

17(iii) Use appropriate risk-adjustment18in determining the amount of the per bene19ficiary per month payment under thisparagraph in a manner that ensures that21higher payments are made for higher risk22beneficiaries.23(4) ENCOURAGING PARTICIPATION OF VARI24ETY OF PRACTICES.The pilot program under thissubsection shall be designed to include the participa

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4681tion of physicians in practices with fewer than 10

2full-time equivalent physicians, as well as physicians3in larger practices, particularly in underserved and4rural areas, as well as federally qualified community5health centers, and rural health centers.6(5) NO DUPLICATION IN PILOT PARTICIPA7TION.A physician in a group practice that partici8pates in the accountable care organization pilot pro9

gram under section 1866D shall not be eligible to10participate in the pilot program under this sub11section, unless the pilot program under this section12has been implemented on a permanent basis under13subsection (e)(3).14(d) COMMUNITY-BASED MEDICAL HOME MODEL. 15(1) IN GENERAL. 16

(A) AUTHORITY FOR PAYMENTS.Under17the community-based medical home model18under this subsection (in this section referred to19as the CBMH model), the Secretary shall20make payments for the furnishing of medical21home services by a community-based medical22home (as defined in subparagraph (B)) pursu23ant to paragraph (5)(B) for high need bene24ficiaries.

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4691(B) COMMUNITY-BASED MEDICAL HOME

2DEFINED.In this section, the term commu3nity-based medical home means a nonprofit4community-based or State-based organizationthat is certified under paragraph (2) as meeting6the following requirements:7(i) The organization provides bene8ficiaries with medical home services.9(ii) The organization provides medicalhome services under the supervision of

11and in close collaboration with the primary12care or principal care physician or nurse13practitioner designated by the beneficiary14as his or her community-based medicalhome provider.16(iii) The organization employs com17

munity health workers, including nurses or18other non-physician practitioners, lay19health workers, or other persons as determinedappropriate by the Secretary, that21assist the primary or principal care physi22cian or nurse practitioner in chronic care23management activities such as teaching24self-care skills for managing chronic illnesses,transitional care services, care plan

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4701setting, medication therapy management

2services for patients with multiple chronic3diseases, or help beneficiaries access the4health care and community-based resourcesin their local geographic area.6(iv) The organization meets such7other requirements as the Secretary may8

specify.9(C) HIGH NEED BENEFICIARY.In thissection, the term high need beneficiary means11an individual who requires regular medical12monitoring, advising, or treatment.13(2) QUALIFICATION PROCESS FOR COMMU14NITY-BASED MEDICAL HOMES.The Secretary shallestablish a process 16

(A) for the initial qualification of commu17nity-based or State-based organizations as com18munity-based medical homes; and19(B) to provide for the review and qualificationof such community-based and State-21based organizations pursuant to criteria estab22lished by the Secretary.23(3) DURATION.The pilot program for com24munity-based medical homes under this subsectionshall start no later than 2 years after the date of the

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4711enactment of this section. Each demonstration site

2under the pilot program shall operate for a period3of up to 5 years after the initial implementation4phase, without regard to the receipt of a initial im5plementation funding under subsection (i).6(4) PREFERENCE.In selecting sites for the7CBMH model, the Secretary may give preference8

to 9

(A) applications from geographic areas10that propose to coordinate health care services11for chronically ill beneficiaries across a variety12of health care settings, such as primary care13physician practices with fewer than 10 physi14cians, specialty physicians, nurse practitioner15

practices, Federally qualified health centers,16rural health clinics, and other settings;17(B) applications that include other payors18that furnish medical home services for chron19ically ill patients covered by such payors; and20(C) applications from States that propose21to use the medical home model to coordinate22health care services for individuals enrolled23under this title, individuals enrolled under title24XIX, and full-benefit dual eligible individuals

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4721(as defined in section 1935(c)(6)) with chronic

2diseases across a variety of health care settings.3(5) PAYMENTS. 4(A) ESTABLISHMENT OF METHOD5OLOGY.The Secretary shall establish a meth6odology for the payment for medical home serv7ices furnished under the CBMH model.8(B) PER BENEFICIARY PER MONTH PAY9MENTS.Under such payment methodology, the

10Secretary shall make two separate monthly pay11ments for each high need beneficiary who con12sents to receive medical home services through13such medical home, as follows:14(i) PAYMENT TO COMMUNITY-BASED15ORGANIZATION.One monthly payment to16a community-based or State-based organi17zation.

18(ii) PAYMENT TO PRIMARY OR PRIN19CIPAL CARE PRACTICE.One monthly pay20ment to the primary or principal care prac21tice for such beneficiary.22(C) PROSPECTIVE PAYMENT.The pay23ments under subparagraph (B) shall be paid on24a prospective basis.

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4731(D) AMOUNT OF PAYMENT.In deter2

mining the amount of such payment, the Sec3retary shall consider the following:4(i) The clinical work and practice expensesinvolved in providing the medical6home services provided by the community-7based medical home (such as providing in8creased access, care coordination, care plan9setting, population disease management,

and teaching self-care skills for managing11chronic illnesses) for which payment is not12made under this title as of the date of the13enactment of this section.14(ii) Use appropriate risk-adjustmentin determining the amount of the per bene16ficiary per month payment under this17paragraph.

18(6) INITIAL IMPLEMENTATION FUNDING. 19The Secretary may make available initial implementationfunding to a community based or State-based21organization or a State that is participating in the22pilot program under this subsection. Such organiza23tion shall provide the Secretary with a detailed im24plementation plan that includes how such funds willbe used.

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4741(e) EXPANSION OF PROGRAM.

2(1) EVALUATION OF COST AND QUALITY. 3The Secretary shall evaluate the pilot program to4determine (A) the extent to which medical homes re6sult in 7(i) improvement in the quality and8coordination of health care services, par9

ticularly with regard to the care of complexpatients;11(ii) improvement in reducing health12disparities;13(iii) reductions in preventable hos14pitalizations;(iv) prevention of readmissions;16(v) reductions in emergency room17

visits;18(vi) improvement in health outcomes,19including patient functional status whereapplicable;21(vii) improvement in patient satisfac22tion;23(viii) improved efficiency of care such24as reducing duplicative diagnostic tests andlaboratory tests; and

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4751(ix) reductions in health care ex2

penditures; and3(B) the feasability and advisability of re4imbursing medical homes for medical homeservices under this title on a permanent basis.6(2) REPORT.Not later than 60 days after7the date of completion of the evaluation under para8graph (1), the Secretary shall submit to Congress9and make available to the public a report on the

findings of the evaluation under paragraph (1).11(3) EXPANSION OF PROGRAM. 12(A) IN GENERAL.Subject to the results13of the evaluation under paragraph (1) and sub14paragraph (B), the Secretary may issue regulationsto implement, on a permanent basis, one16or more models, if, and to the extent that such17model or models, are beneficial to the program

18under this title, including that such implemen19tation will improve quality of care, as determinedby the Secretary.21(B) CERTIFICATION REQUIREMENT.The22Secretary may not issue such regulations unless23the Chief Actuary of the Centers for Medicare24& Medicaid Services certifies that the expansionof the components of the pilot program de-

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4761scribed in subparagraph (A) would result in es2

timated spending under this title that would be3no more than the level of spending that the4Secretary estimates would otherwise be spentunder this title in the absence of such expan6sion.7(f) ADMINISTRATIVE PROVISIONS. 8(1) NO DUPLICATION IN PAYMENTS.During9

any month, the Secretary may not make paymentsunder this section under more than one model or11through more than one medical home under any12model for the furnishing of medical home services to13an individual.14(2) NO EFFECT ON PAYMENT FOR EVALUATIONAND MANAGEMENT SERVICES.Payments16made under this section are in addition to, and have

17no effect on the amount of, payment for evaluation18and management services made under this title19(3) ADMINISTRATION.Chapter 35 of title 44,United States Code shall not apply to this section.21(g) FUNDING. 22(1) OPERATIONAL COSTS.For purposes of23administering and carrying out the pilot program24(including the design, implementation, technical assistancefor and evaluation of such program), in ad-

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4771dition to funds otherwise available, there shall be

2transferred from the Federal Supplementary Medical3Insurance Trust Fund under section 1841 to the4Secretary for the Centers for Medicare & MedicaidServices Program Management Account $6,000,0006for each of fiscal years 2010 through 2014.7Amounts appropriated under this paragraph for a8

fiscal year shall be available until expended.9(2) PATIENT-CENTERED MEDICAL HOMESERVICES.In addition to funds otherwise available,11there shall be available to the Secretary for the Cen12ters for Medicare & Medicaid Services, from the13Federal Supplementary Medical Insurance Trust14Fund under section 1841 (A) $200,000,000 for each of fiscal years16

2010 through 2014 for payments for medical17home services under subsection (c)(3); and18(B) $125,000,000 for each of fiscal years192012 through 2016, for payments under subsection(d)(5).21Amounts available under this paragraph for a fiscal22year shall be available until expended.23(3) INITIAL IMPLEMENTATION.In addition24to funds otherwise available, there shall be availableto the Secretary for the Centers for Medicare &

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4781Medicaid Services, from the Federal Supplementary

2Medical Insurance Trust Fund under section 1841,3$2,500,000 for each of fiscal years 2010 through42012, under subsection (d)(6). Amounts available5under this paragraph for a fiscal year shall be avail6able until expended.7(h) TREATMENT OF TRHCA MEDICARE MEDICAL8

HOME DEMONSTRATION FUNDING. 9

(1) In addition to funds otherwise available for10payment of medical home services under subsection11(c)(3), there shall also be available the amount pro12vided in subsection (g) of section 204 of division B13of the Tax Relief and Health Care Act of 2006 (4214U.S.C. 1395b1 note).15

(2) Notwithstanding section 1302(c) of the16Americas Affordable Health Choices Act of 2009, in17addition to funds provided in paragraph (1) and18subsection (g)(2)(A), the funding for medical home19services that would otherwise have been available if20such section 204 medical home demonstration had21been implemented (without regard to subsection (g)22of such section) shall be available to the independent23patient-centered medical home model described in24subsection (c)..

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4791(b) EFFECTIVE DATE.The amendment made by

2this section shall apply to services furnished on or after3the date of the enactment of this Act.4(c) CONFORMING REPEAL.Section 204 of divisionB of the Tax Relief and Health Care Act of 2006 (426U.S.C. 1395b1 note), as amended by section 133(a)(2)7of the Medicare Improvements for Patients and Providers8

Act of 2008 (Public Law 110275), is repealed.9

SEC. 1303. PAYMENT INCENTIVE FOR SELECTED PRIMARYCARE SERVICES.11(a) IN GENERAL.Section 1833 of the Social Secu12rity Act is amended by inserting after subsection (o) the13following new subsection:14(p) PRIMARY CARE PAYMENT INCENTIVES. (1) IN GENERAL.In the case of primary care16

services (as defined in paragraph (2)) furnished on17or after January 1, 2011, by a primary care practi18tioner (as defined in paragraph (3)) for which19amounts are payable under section 1848, in additionto the amount otherwise paid under this part there21shall also be paid to the practitioner (or to an em22ployer or facility in the cases described in clause (A)23of section 1842(b)(6)) (on a monthly or quarterly24basis) from the Federal Supplementary Medical InsuranceTrust Fund an amount equal 5 percent (or

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480110 percent if the practitioner predominately fur2

nishes such services in an area that is designated3(under section 332(a)(1)(A) of the Public Health4Service Act) as a primary care health professional5shortage area.6(2) PRIMARY CARE SERVICES DEFINED.In7this subsection, the term primary care services 8(A) means services which are evaluation9

and management services as defined in section101848(j)(5)(A); and11(B) includes services furnished by another12health care professional that would be described13in subparagraph (A) if furnished by a physi14cian.15

(3) PRIMARY CARE PRACTITIONER DE16FINED.In this subsection, the term primary care17practitioner 18(A) means a physician or other health19care practitioner (including a nurse practi20tioner) who 21(i) specializes in family medicine,22general internal medicine, general pediat23rics, geriatrics, or obstetrics and gyne24cology; and

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4811(ii) has allowed charges for primary

2care services that account for at least 503percent of the physicians or practitioners4total allowed charges under section 1848,as determined by the Secretary for the6most recent period for which data are7available; and8(B) includes a physician assistant who is9

under the supervision of a practitioner describedin subparagraph (A).11(4) LIMITATION ON REVIEW.There shall be12no administrative or judicial review under section131869, section 1878, or otherwise, respecting 14(A) any determination or designationunder this subsection;

16(B) the identification of services as pri17mary care services under this subsection; and18(C) the identification of a practitioner as19a primary care practitioner under this subsection.21(5) COORDINATION WITH OTHER PAY22MENTS. 23(A) WITH OTHER PRIMARY CARE INCEN24TIVES.The provisions of this subsection shallnot be taken into account in applying sub-

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4821sections (m) and (u) and any payment under

2such subsections shall not be taken into account3in computing payments under this subsection.4(B) WITH QUALITY INCENTIVES.Paymentsunder this subsection shall not be taken6into account in determining the amounts that7would otherwise be paid under this part for8

purposes of section 1834(g)(2)(B)..9

(b) CONFORMING AMENDMENTS. (1) Section 1833 of such Act (42 U.S.C.111395l(m)) is amended by redesignating paragraph12(4) as paragraph (5) and by inserting after para13graph (3) the following new paragraph:14(4) The provisions of this subsection shall not betaken into account in applying subsections (m) or (u) and16

any payment under such subsections shall not be taken17into account in computing payments under this sub18section..19(2) Section 1848(m)(5)(B) of such Act (42U.S.C. 1395w4(m)(5)(B)) is amended by inserting21, (p), after (m).22(3) Section 1848(o)(1)(B)(iv) of such Act (4223U.S.C. 1395w4(o)(1)(B)(iv)) is amended by insert24ing primary care before health professionalshortage area.

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4831SEC. 1304. INCREASED REIMBURSEMENT RATE FOR CER2

TIFIED NURSE-MIDWIVES.3(a) IN GENERAL.Section 1833(a)(1)(K) of the So4cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amendedby striking (but in no event and all that follows through6performed by a physician).7(b) EFFECTIVE DATE.The amendment made by8subsection (a) shall apply to services furnished on or after9

January 1, 2011.SEC. 1305. COVERAGE AND WAIVER OF COST-SHARING FOR11PREVENTIVE SERVICES.12(a) MEDICARE COVERED PREVENTIVE SERVICES DE13FINED.Section 1861 of the Social Security Act (4214U.S.C. 1395x), as amended by section 1235(a)(2), isamended by adding at the end the following new sub16section:17Medicare Covered Preventive Services

18(iii)(1) Subject to the succeeding provisions of this19subsection, the term Medicare covered preventive services means the following:21(A) Prostate cancer screening tests (as defined22in subsection (oo)).23(B) Colorectal cancer screening tests (as de24fined in subsection (pp) and when applicable as describedin section 1305).

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484

1(C) Diabetes outpatient self-management2training services (as defined in subsection (qq)).3(D) Screening for glaucoma for certain indi4viduals (as described in subsection (s)(2)(U)).(E) Medical nutrition therapy services for cer6tain individuals (as described in subsection7(s)(2)(V)).8(F) An initial preventive physical examination9

(as defined in subsection (ww)).(G) Cardiovascular screening blood tests (as11defined in subsection (xx)(1)).12(H) Diabetes screening tests (as defined in13subsection (yy)).14(I) Ultrasound screening for abdominal aorticaneurysm for certain individuals (as described in de16

scribed in subsection (s)(2)(AA)).17(J) Pneumococcal and influenza vaccines and18their administration (as described in subsection19(s)(10)(A)) and hepatitis B vaccine and its administrationfor certain individuals (as described in sub21section (s)(10)(B)).22(K) Screening mammography (as defined in23subsection (jj)).24(L) Screening pap smear and screening pelvicexam (as defined in subsection (nn)).

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4851(M) Bone mass measurement (as defined in

2subsection (rr)).3(N) Kidney disease education services (as de4fined in subsection (ggg)).(O) Additional preventive services (as defined6in subsection (ddd)).7(2) With respect to specific Medicare covered pre8ventive services, the limitations and conditions described9

in the provisions referenced in paragraph (1) with respectto such services shall apply..11(b) PAYMENT AND ELIMINATION OF COST-SHAR12ING. 13(1) IN GENERAL. 14(A) IN GENERAL.Section 1833(a) of theSocial Security Act (42 U.S.C. 1395l(a)) is16amended by adding after and below paragraph17

(9) the following:18With respect to Medicare covered preventive services, in19any case in which the payment rate otherwise providedunder this part is computed as a percent of less than 10021percent of an actual charge, fee schedule rate, or other22rate, such percentage shall be increased to 100 percent..23(B) APPLICATION TO SIGMOIDOSCOPIES24AND COLONOSCOPIES.Section 1834(d) of suchAct (42 U.S.C. 1395m(d)) is amended

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4861(i) in paragraph (2)(C), by amending

2clause (ii) to read as follows:3(ii) NO COINSURANCE.In the case4of a beneficiary who receives services describedin clause (i), there shall be no coin6surance applied.; and7(ii) in paragraph (3)(C), by amending8clause (ii) to read as follows:

9(ii) NO COINSURANCE.In the caseof a beneficiary who receives services de11scribed in clause (i), there shall be no coin12surance applied..13(2) ELIMINATION OF COINSURANCE IN OUT14PATIENT HOSPITAL SETTINGS. (A) EXCLUSION FROM OPD FEE SCHED16ULE.Section 1833(t)(1)(B)(iv) of the Social17Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is18

amended by striking screening mammography19(as defined in section 1861(jj)) and diagnosticmammography and inserting diagnostic21mammograms and Medicare covered preventive22services (as defined in section 1861(iii)(1)).23(B) CONFORMING AMENDMENTS.Section241833(a)(2) of the Social Security Act (42U.S.C. 1395l(a)(2)) is amended

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4871(i) in subparagraph (F), by striking

2and after the semicolon at the end;3(ii) in subparagraph (G)(ii), by adding4and at the end; and5(iii) by adding at the end the fol6lowing new subparagraph:7(H) with respect to additional preventive8

services (as defined in section 1861(ddd)) fur9nished by an outpatient department of a hos10pital, the amount determined under paragraph11(1)(W);.12(3) WAIVER OF APPLICATION OF DEDUCTIBLE13FOR ALL PREVENTIVE SERVICES.The first sen14tence of section 1833(b) of the Social Security Act15(42 U.S.C. 1395l(b)) is amended 16

(A) in clause (1), by striking items and17services described in section 1861(s)(10)(A) 18and inserting Medicare covered preventive19services (as defined in section 1861(iii));20(B) by inserting and before (4); and21(C) by striking clauses (5) through (8).22(4) APPLICATION TO PROVIDERS OF SERV23ICES.Section 1866(a)(2)(A)(ii) of such Act (4224U.S.C. 1395cc(a)(2)(A)(ii)) is amended by inserting

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4881other than for Medicare covered preventive services

2and after for such items and services (.3(c) EFFECTIVE DATE.The amendments made by4this section shall apply to services furnished on or after5January 1, 2011.6SEC. 1306. WAIVER OF DEDUCTIBLE FOR COLORECTAL7CANCER SCREENING TESTS REGARDLESS OF

8CODING, SUBSEQUENT DIAGNOSIS, OR ANCIL9LARY TISSUE REMOVAL.10(a) IN GENERAL.Section 1833(b) of the Social Se11curity Act (42 U.S.C. 1395l(b)), as amended by section121305(b)(3), is amended by adding at the end the following13new sentence: Clause (1) of the first sentence of this sub14section shall apply with respect to a colorectal cancer15screening test regardless of the code that is billed for the

16establishment of a diagnosis as a result of the test, or for17the removal of tissue or other matter or other procedure18that is furnished in connection with, as a result of, and19in the same clinical encounter as, the screening test..20(b) EFFECTIVE DATE.The amendment made by21subsection (a) shall apply to items and services furnished22on or after January 1, 2011.

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4891SEC. 1307. EXCLUDING CLINICAL SOCIAL WORKER SERV2

ICES FROM COVERAGE UNDER THE MEDI3CARE SKILLED NURSING FACILITY PROSPEC4TIVE PAYMENT SYSTEM AND CONSOLIDATEDPAYMENT.6(a) IN GENERAL.Section 1888(e)(2)(A)(ii) of the7Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is8amended by inserting clinical social worker services, 9after qualified psychologist services,.

(b) CONFORMING AMENDMENT.Section11

1861(hh)(2) of the Social Security Act (42 U.S.C.121395x(hh)(2)) is amended by striking and other than13services furnished to an inpatient of a skilled nursing facil14ity which the facility is required to provide as a requirementfor participation.16(c) EFFECTIVE DATE.The amendments made by17this section shall apply to items and services furnished on

18or after July 1, 2010.19SEC. 1308. COVERAGE OF MARRIAGE AND FAMILY THERAPISTSERVICES AND MENTAL HEALTH COUN21SELOR SERVICES.22(a) COVERAGE OF MARRIAGE AND FAMILY THERA23PIST SERVICES. 24(1) COVERAGE OF SERVICES.Section1861(s)(2) of the Social Security Act (42 U.S.C.

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49011395x(s)(2)), as amended by section 1235, is

2amended 3(A) in subparagraph (EE), by striking4and at the end;(B) in subparagraph (FF), by adding6and at the end; and7(C) by adding at the end the following new8

subparagraph:9(GG) marriage and family therapist services(as defined in subsection (jjj));.11(2) DEFINITION.Section 1861 of the Social12Security Act (42 U.S.C. 1395x), as amended by sec13tions 1235 and 1305, is amended by adding at the14end the following new subsection:Marriage and Family Therapist Services16

(jjj)(1) The term marriage and family therapist17services means services performed by a marriage and18family therapist (as defined in paragraph (2)) for the diag19nosis and treatment of mental illnesses, which the marriageand family therapist is legally authorized to perform21under State law (or the State regulatory mechanism pro22vided by State law) of the State in which such services23are performed, as would otherwise be covered if furnished24by a physician or as incident to a physicians professionalservice, but only if no facility or other provider charges

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4911or is paid any amounts with respect to the furnishing of

2such services.3(2) The term marriage and family therapist means4an individual who 5(A) possesses a masters or doctoral degree6which qualifies for licensure or certification as a7marriage and family therapist pursuant to State

8law;9(B) after obtaining such degree has performed10at least 2 years of clinical supervised experience in11marriage and family therapy; and12(C) is licensed or certified as a marriage and13family therapist in the State in which marriage and14

family therapist services are performed..15(3) PROVISION FOR PAYMENT UNDER PART16B.Section 1832(a)(2)(B) of the Social Security17Act (42 U.S.C. 1395k(a)(2)(B)) is amended by add18ing at the end the following new clause:19(v) marriage and family therapist20services;.21(4) AMOUNT OF PAYMENT. 22(A) IN GENERAL.Section 1833(a)(1) of23the Social Security Act (42 U.S.C. 1395l(a)(1))24is amended

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4921(i) by striking and before (W);

2and3(ii) by inserting before the semicolon4at the end the following: , and (X) withrespect to marriage and family therapist6services under section 1861(s)(2)(GG), the7amounts paid shall be 80 percent of the8

lesser of the actual charge for the services9or 75 percent of the amount determinedfor payment of a psychologist under clause11(L).12(B) DEVELOPMENT OF CRITERIA WITH RE13SPECT TO CONSULTATION WITH A HEALTH14CARE PROFESSIONAL.The Secretary of Healthand Human Services shall, taking into consider16ation concerns for patient confidentiality, de17

velop criteria with respect to payment for mar18riage and family therapist services for which19payment may be made directly to the marriageand family therapist under part B of title21XVIII of the Social Security Act (42 U.S.C.221395j et seq.) under which such a therapist23must agree to consult with a patients attending24or primary care physician or nurse practitionerin accordance with such criteria.

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4931(5) EXCLUSION OF MARRIAGE AND FAMILY

2THERAPIST SERVICES FROM SKILLED NURSING FA3CILITY PROSPECTIVE PAYMENT SYSTEM.Section41888(e)(2)(A)(ii) of the Social Security Act (42U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section61307(a), is amended by inserting marriage and7family therapist services (as defined in subsection8(jjj)(1)), after clinical social worker services,.

9(6) COVERAGE OF MARRIAGE AND FAMILYTHERAPIST SERVICES PROVIDED IN RURAL HEALTH11CLINICS AND FEDERALLY QUALIFIED HEALTH CEN12TERS.Section 1861(aa)(1)(B) of the Social Secu13rity Act (42 U.S.C. 1395x(aa)(1)(B)) is amended by14striking or by a clinical social worker (as definedin subsection (hh)(1)), and inserting , by a clinical16social worker (as defined in subsection (hh)(1)), or17

by a marriage and family therapist (as defined in18subsection (jjj)(2)),.19(7) INCLUSION OF MARRIAGE AND FAMILYTHERAPISTS AS PRACTITIONERS FOR ASSIGNMENT21OF CLAIMS.Section 1842(b)(18)(C) of the Social22Security Act (42 U.S.C. 1395u(b)(18)(C)) is amend23ed by adding at the end the following new clause:24(vii) A marriage and family therapist (as definedin section 1861(jjj)(2))..

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4941(b) COVERAGE OF MENTAL HEALTH COUNSELOR

2SERVICES. 3(1) COVERAGE OF SERVICES.Section41861(s)(2) of the Social Security Act (42 U.S.C.1395x(s)(2)), as previously amended, is further6amended 7(A) in subparagraph (FF), by striking8and

at the end;9

(B) in subparagraph (GG), by insertingand at the end; and11(C) by adding at the end the following new12subparagraph:13(HH) mental health counselor services (as de14fined in subsection (kkk)(1));.(2) DEFINITION.Section 1861 of the Social16

Security Act (42 U.S.C. 1395x), as previously17amended, is amended by adding at the end the fol18lowing new subsection:19Mental Health Counselor Services(kkk)(1) The term mental health counselor services 21means services performed by a mental health counselor (as22defined in paragraph (2)) for the diagnosis and treatment23of mental illnesses which the mental health counselor is24legally authorized to perform under State law (or theState regulatory mechanism provided by the State law) of

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4951the State in which such services are performed, as would

2otherwise be covered if furnished by a physician or as inci3dent to a physicians professional service, but only if no4facility or other provider charges or is paid any amountswith respect to the furnishing of such services.6(2) The term mental health counselor means an7individual who 8(A) possesses a masters or doctors degree

9which qualifies the individual for licensure or certificationfor the practice of mental health counseling in11the State in which the services are performed;12(B) after obtaining such a degree has per13formed at least 2 years of supervised mental health14counselor practice; and(C) is licensed or certified as a mental health16counselor or professional counselor by the State in

17which the services are performed..18(3) PROVISION FOR PAYMENT UNDER PART19B.Section 1832(a)(2)(B) of the Social SecurityAct (42 U.S.C. 1395k(a)(2)(B)), as amended by21subsection (a)(3), is further amended 22(A) by striking and at the end of clause23(iv);24(B) by adding and at the end of clause(v); and

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2clause:3(vi) mental health counselor serv4ices;.(4) AMOUNT OF PAYMENT. 6(A) IN GENERAL.Section 1833(a)(1) of7the Social Security Act (42 U.S.C.81395l(a)(1)), as amended by subsection (a), is

9further amended (i) by striking andbefore (X);11and12(ii) by inserting before the semicolon13at the end the following: , and (Y), with14respect to mental health counselor servicesunder section 1861(s)(2)(HH), the16

amounts paid shall be 80 percent of the17lesser of the actual charge for the services18or 75 percent of the amount determined19for payment of a psychologist under clause(L).21(B) DEVELOPMENT OF CRITERIA WITH RE22SPECT TO CONSULTATION WITH A PHYSICIAN. 23The Secretary of Health and Human Services24shall, taking into consideration concerns for patientconfidentiality, develop criteria with re-

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4971spect to payment for mental health counselor

2services for which payment may be made di3rectly to the mental health counselor under part4B of title XVIII of the Social Security Act (42U.S.C. 1395j et seq.) under which such a coun6selor must agree to consult with a patients at7tending or primary care physician in accordance8with such criteria.9(5) EXCLUSION OF MENTAL HEALTH COUNSELOR

SERVICES FROM SKILLED NURSING FACILITY11PROSPECTIVE PAYMENT SYSTEM.Section121888(e)(2)(A)(ii) of the Social Security Act (4213U.S.C. 1395yy(e)(2)(A)(ii)), as amended by section141307(a) and subsection (a), is amended by insertingmental health counselor services (as defined in sec16tion 1861(kkk)(1)), after marriage and family17therapist services (as defined in subsection

18(jjj)(1)),.19(6) COVERAGE OF MENTAL HEALTH COUNSELORSERVICES PROVIDED IN RURAL HEALTH21CLINICS AND FEDERALLY QUALIFIED HEALTH CEN22TERS.Section 1861(aa)(1)(B) of the Social Secu23rity Act (42 U.S.C. 1395x(aa)(1)(B)), as amended24by subsection (a), is amended by striking or by amarriage and family therapist (as defined in sub-

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4981section (jjj)(2)), and inserting by a marriage and

2family therapist (as defined in subsection (jjj)(2)),3or a mental health counselor (as defined in sub4section (kkk)(2)),.(7) INCLUSION OF MENTAL HEALTH COUN6SELORS AS PRACTITIONERS FOR ASSIGNMENT OF7CLAIMS.Section 1842(b)(18)(C) of the Social Se8curity Act (42 U.S.C. 1395u(b)(18)(C)), as amended9by subsection (a)(7), is amended by adding at the

end the following new clause:11(viii) A mental health counselor (as defined in12section 1861(kkk)(2))..13(c) EFFECTIVE DATE.The amendments made by14this section shall apply to items and services furnished onor after January 1, 2011.16SEC. 1309. EXTENSION OF PHYSICIAN FEE SCHEDULE MEN17TAL HEALTH ADD-ON.

18Section 138(a)(1) of the Medicare Improvements for19Patients and Providers Act of 2008 (Public Law 110275)is amended by striking December 31, 2009 and insert21ing December 31, 2011.22SEC. 1310. EXPANDING ACCESS TO VACCINES.23(a) IN GENERAL.Paragraph (10) of section241861(s) of the Social Security Act (42 U.S.C. 1395w(s))is amended to read as follows:

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4991(10) federally recommended vaccines (as de2

fined in subsection (lll)) and their respective admin3istration;.4(b) FEDERALLY RECOMMENDED VACCINES DE5FINED.Section 1861 of such Act is further amended by6adding at the end the following new subsection:7Federally Recommended Vaccines8(lll) The term federally recommended vaccine 9

means an approved vaccine recommended by the Advisory10Committee on Immunization Practices (an advisory com11mittee established by the Secretary, acting through the Di12rector of the Centers for Disease Control and Preven13tion)..14(c) CONFORMING AMENDMENTS. 15(1) Section 1833 of such Act (42 U.S.C. 1395l)16is amended, in each of subsections (a)(1)(B),17

(a)(2)(G), (a)(3)(A), and (b)(1) (as amended by sec18tion 1305(b)), by striking 1861(s)(10)(A) or191861(s)(10)(B) and inserting 1861(s)(10) each20place it appears.21(2) Section 1842(o)(1)(A)(iv) of such Act (4222U.S.C. 1395u(o)(1)(A)(iv)) is amended 23(A) by striking subparagraph (A) or (B)24of; and

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5001(B) by inserting before the period the fol2

lowing: and before January 1, 2011, and influ3enza vaccines furnished on or after January 1,42011.(3) Section 1847A(c)(6) of such Act (42 U.S.C.61395w3a(c)(6)) is amended by striking subpara7graph (G) and inserting the following:8(G) IMPLEMENTATION.Chapter 35 of9title 44, United States Code shall not apply to

manufacturer provision of information pursuant11to section 1927(b)(3)(A)(iii) for purposes of im12plementation of this section..13(4) Section 1860D2(e)(1)(B) of such Act (4214U.S.C. 1395w102(e)(1)(B)) is amended by strikingsuch term includes a vaccine and all that follows16through its administration) and.17(5) Section 1861(ww)(2)(A) of such Act (42

18U.S.C. 1395x(ww)(2)(A))) is amended by striking19Pneumococcal, influenza, and hepatitis B and administration and inserting Federally recommended21vaccines (as defined in subsection (lll)) and their re22spective administration.23(6) Section 1861(iii)(1) of such Act, as added24by section 1305(a), is amended by amending subparagraph(J) to read as follows:

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5011(J) Federally recommended vaccines (as de2

fined in subsection (lll)) and their respective admin3istration..4(7) Section 1927(b)(3)(A)(iii) of such Act (425U.S.C. 1396r8(b)(3)(A)(iii)) is amended, in the6matter following subclause (III), by inserting7(A)(iv) (including influenza vaccines furnished on8or after January 1, 2011), after described in sub9

paragraph. 10

(d) EFFECTIVE DATES.The amendments made11by 12(1) this section (other than by subsection13(c)(7)) shall apply to vaccines administered on or14after January 1, 2011; and15(2) by subsection (c)(7) shall apply to calendar

16quarters beginning on or after January 1, 2010.17TITLE IVQUALITY18Subtitle AComparative19Effectiveness Research20SEC. 1401. COMPARATIVE EFFECTIVENESS RESEARCH.21(a) IN GENERAL.title XI of the Social Security Act22is amended by adding at the end the following new part:

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5021PART DCOMPARATIVE EFFECTIVENESS RESEARCH

2COMPARATIVE EFFECTIVENESS RESEARCH3SEC. 1181. (a) CENTER FOR COMPARATIVE EFFEC4TIVENESS RESEARCH ESTABLISHED. (1) IN GENERAL.The Secretary shall estab6lish within the Agency for Healthcare Research and7Quality a Center for Comparative Effectiveness Re8search (in this section referred to as the Center) to9conduct, support, and synthesize research (including

research conducted or supported under section 101311of the Medicare Prescription Drug, Improvement,12and Modernization Act of 2003) with respect to the13outcomes, effectiveness, and appropriateness of14health care services and procedures in order to identifythe manner in which diseases, disorders, and16other health conditions can most effectively and ap17propriately be prevented, diagnosed, treated, and

18managed clinically.19(2) DUTIES.The Center shall (A) conduct, support, and synthesize re21search relevant to the comparative effectiveness22of the full spectrum of health care items, serv23ices and systems, including pharmaceuticals,24medical devices, medical and surgical procedures,and other medical interventions;

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5031(B) conduct and support systematic re2

views of clinical research, including original re3search conducted subsequent to the date of the4enactment of this section;(C) continuously develop rigorous sci6entific methodologies for conducting compara7tive effectiveness studies, and use such meth8odologies appropriately;9(D) submit to the Comparative EffectivenessResearch Commission, the Secretary, and11

Congress appropriate relevant reports described12in subsection (d)(2); and13(E) encourage, as appropriate, the devel14opment and use of clinical registries and the developmentof clinical effectiveness research data16networks from electronic health records, post17marketing drug and medical device surveillance18efforts, and other forms of electronic health

19data.(3) POWERS. 21(A) OBTAINING OFFICIAL DATA.The22Center may secure directly from any depart23ment or agency of the United States informa24tion necessary to enable it to carry out this section.Upon request of the Center, the head of

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5041that department or agency shall furnish that in2

formation to the Center on an agreed upon3schedule.4(B) DATA COLLECTION.In order to5carry out its functions, the Center shall 6(i) utilize existing information, both7published and unpublished, where possible,8

collected and assessed either by its own9staff or under other arrangements made in10accordance with this section,11(ii) carry out, or award grants or12contracts for, original research and experi13mentation, where existing information is14inadequate, and15

(iii) adopt procedures allowing any16interested party to submit information for17the use by the Center and Commission18under subsection (b) in making reports19and recommendations.20(C) ACCESS OF GAO TO INFORMATION. 21The Comptroller General shall have unrestricted22access to all deliberations, records, and non23proprietary data of the Center and Commission24under subsection (b), immediately upon request.

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5051(D) PERIODIC AUDIT.The Center and

2Commission under subsection (b) shall be sub3ject to periodic audit by the Comptroller Gen4eral.5(b) OVERSIGHT BY COMPARATIVE EFFECTIVENESS6RESEARCH COMMISSION. 7(1) IN GENERAL.The Secretary shall estab8lish an independent Comparative Effectiveness Re9search Commission (in this section referred to as the

10Commission) to oversee and evaluate the activities11carried out by the Center under subsection (a), sub12ject to the authority of the Secretary, to ensure such13activities result in highly credible research and infor14mation resulting from such research.15(2) DUTIES.The Commission shall 16(A) determine national priorities for re17search described in subsection (a) and in mak18

ing such determinations consult with a broad19array of public and private stakeholders, includ20ing patients and health care providers and pay21ers;22(B) monitor the appropriateness of use of23the CERTF described in subsection (g) with re24spect to the timely production of comparative

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5061effectiveness research determined to be a na2

tional priority under subparagraph (A);3(C) identify highly credible research4methods and standards of evidence for such re5search to be considered by the Center;6(D) review the methodologies developed7by the center under subsection (a)(2)(C);8(E) not later than one year after the date

9of the enactment of this section, enter into an10arrangement under which the Institute of Medi11cine of the National Academy of Sciences shall12conduct an evaluation and report on standards13of evidence for such research;14(F) support forums to increase stake15holder awareness and permit stakeholder feed16back on the efforts of the Center to advance

17methods and standards that promote highly18credible research;19(G) make recommendations for policies20that would allow for public access of data pro21duced under this section, in accordance with ap22propriate privacy and proprietary practices,23while ensuring that the information produced24through such data is timely and credible;

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5071(H) appoint a clinical perspective advisory

2panel for each research priority determined3under subparagraph (A), which shall consult4with patients and advise the Center on researchquestions, methods, and evidence gaps in terms6of clinical outcomes for the specific research in7quiry to be examined with respect to such pri8ority to ensure that the information produced9

from such research is clinically relevant to decisionsmade by clinicians and patients at the11point of care;12(I) make recommendations for the pri13ority for periodic reviews of previous compara14tive effectiveness research and studies conductedby the Center under subsection (a);16(J) routinely review processes of the Cen17ter with respect to such research to confirm18

that the information produced by such research19is objective, credible, consistent with standardsof evidence established under this section, and21developed through a transparent process that22includes consultations with appropriate stake23holders; and24(K) make recommendations to the centerfor the broad dissemination of the findings of

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5081research conducted and supported under this

2section that enables clinicians, patients, con3sumers, and payers to make more informed4health care decisions that improve quality andvalue.6(3) COMPOSITION OF COMMISSION. 7(A) IN GENERAL.The members of the8Commission shall consist of

9(i) the Director of the Agency forHealthcare Research and Quality;11(ii) the Chief Medical Officer of the12Centers for Medicare & Medicaid Services;13and14(iii) 15 additional members who shallrepresent broad constituencies of stake16holders including clinicians, patients, re17

searchers, third-party payers, consumers of18Federal and State beneficiary programs.19Of such members, at least 9 shall be practicingphysicians, health care practitioners, con21sumers, or patients.22(B) QUALIFICATIONS. 23(i) DIVERSE REPRESENTATION OF24PERSPECTIVES.The members of theCommission shall represent a broad range

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5091of perspectives and shall collectively have

2experience in the following areas:3(I) Epidemiology.4(II) Health services research.5(III) Bioethics.6(IV) Decision sciences.7(V) Health disparities.

8(VI) Economics.9(ii) DIVERSE REPRESENTATION OF10HEALTH CARE COMMUNITY.At least one11member shall represent each of the fol12lowing health care communities:13(I) Patients.14(II) Health care consumers.

15(III) Practicing Physicians, in16cluding surgeons.17(IV) Other health care practi18tioners engaged in clinical care.19(V) Employers.20(VI) Public payers.21(VII) Insurance plans.22(VIII) Clinical researchers who23conduct research on behalf of pharma24ceutical or device manufacturers.

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5101(C) LIMITATION.No more than 3 of the

2Members of the Commission may be representa3tives of pharmaceutical or device manufacturers4and such representatives shall be clinical re5searchers described under subparagraph6(B)(ii)(VIII).7(4) APPOINTMENT. 8(A) IN GENERAL.The Secretary shall

9appoint the members of the Commission.10(B) CONSULTATION.In considering can11didates for appointment to the Commission, the12Secretary may consult with the Government Ac13countability Office and the Institute of Medicine14of the National Academy of Sciences.15(5) CHAIRMAN; VICE CHAIRMAN.The Sec16retary shall designate a member of the Commission,

17at the time of appointment of the member, as Chair18man and a member as Vice Chairman for that term19of appointment, except that in the case of vacancy20of the Chairmanship or Vice Chairmanship, the Sec21retary may designate another member for the re22mainder of that members term. The Chairman shall23serve as an ex officio member of the National Advi24sory Council of the Agency for Health Care Re-

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5111search and Quality under section 931(c)(3)(B) of

2the Public Health Service Act.3(6) TERMS. 4(A) IN GENERAL.Except as provided insubparagraph (B), each member of the Com6mission shall be appointed for a term of 47years.8(B) TERMS OF INITIAL APPOINTEES.Of

9the members first appointed (i) 8 shall be appointed for a term of114 years; and12(ii) 7 shall be appointed for a term13of 3 years.14(7) COORDINATION.To enhance effectivenessand coordination, the Secretary is encouraged, to the16

greatest extent possible, to seek coordination be17tween the Commission and the National Advisory18Council of the Agency for Healthcare Research and19Quality.(8) CONFLICTS OF INTEREST. 21(A) IN GENERAL.In appointing the22members of the Commission or a clinical per23spective advisory panel described in paragraph24(2)(H), the Secretary or the Commission, respectively,shall take into consideration any fi

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5121nancial interest (as defined in subparagraph

2(D)), consistent with this paragraph, and de3velop a plan for managing any identified con4flicts.(B) EVALUATION AND CRITERIA.When6considering an appointment to the Commission7or a clinical perspective advisory panel de8scribed paragraph (2)(H) the Secretary or the9Commission shall review the expertise of the individual

and the financial disclosure report filed11by the individual pursuant to the Ethics in Gov12ernment Act of 1978 for each individual under13consideration for the appointment, so as to re14duce the likelihood that an appointed individualwill later require a written determination as re16ferred to in section 208(b)(1) of title 18, United17States Code, a written certification as referred18to in section 208(b)(3) of title 18, United

19States Code, or a waiver as referred to in subparagraph(D)(iii) for service on the Commis21sion at a meeting of the Commission.22(C) DISCLOSURES; PROHIBITIONS ON23PARTICIPATION; WAIVERS. 24(i) DISCLOSURE OF FINANCIAL INTEREST.Prior to a meeting of the Com

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5131mission or a clinical perspective advisory

2panel described in paragraph (2)(H) re3garding a particular matter (as that term4is used in section 208 of title 18, UnitedStates Code), each member of the Commis6sion or the clinical perspective advisory7panel who is a full-time Government em8ployee or special Government employee9shall disclose to the Secretary financial interests

in accordance with subsection (b) of11such section 208.12(ii) PROHIBITIONS ON PARTICIPA13TION.Except as provided under clause14(iii), a member of the Commission or aclinical perspective advisory panel de16scribed in paragraph (2)(H) may not par17ticipate with respect to a particular matter18considered in meeting of the Commission

19or the clinical perspective advisory panel ifsuch member (or an immediate family21member of such member) has a financial22interest that could be affected by the ad23vice given to the Secretary with respect to24such matter, excluding interests exemptedin regulations issued by the Director of the

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5141Office of Government Ethics as too remote

2or inconsequential to affect the integrity of3the services of the Government officers or4employees to which such regulations apply.5(iii) WAIVER.If the Secretary de6termines it necessary to afford the Com7mission or a clinical perspective advisory8panel described in paragraph 2(H) essen9

tial expertise, the Secretary may grant a10waiver of the prohibition in clause (ii) to11permit a member described in such sub12paragraph to 13(I) participate as a non-voting14member with respect to a particular15matter considered in a Commission or16

a clinical perspective advisory panel17meeting; or18(II) participate as a voting19member with respect to a particular20matter considered in a Commission or21a clinical perspective advisory panel22meeting.23(iv) LIMITATION ON WAIVERS AND24OTHER EXCEPTIONS.

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5151(I) DETERMINATION OF ALLOW2

ABLE EXCEPTIONS FOR THE COMMIS3SION.The number of waivers grant4ed to members of the Commissioncannot exceed one-half of the total6number of members for the Commis7sion.8(II) PROHIBITION ON VOTING9STATUS ON CLINICAL PERSPECTIVEADVISORY PANELS.No voting mem11

ber of any clinical perspective advisory12panel shall be in receipt of a waiver.13No more than two nonvoting members14of any clinical perspective advisorypanel shall receive a waiver.16(D) FINANCIAL INTEREST DEFINED. 17For purposes of this paragraph, the term fi18nancial interest means a financial interest

19under section 208(a) of title 18, United StatesCode.21(9) COMPENSATION.While serving on the22business of the Commission (including travel time),23a member of the Commission shall be entitled to24compensation at the per diem equivalent of the rateprovided for level IV of the Executive Schedule

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5161under section 5315 of title 5, United States Code;

2and while so serving away from home and the mem3bers regular place of business, a member may be al4lowed travel expenses, as authorized by the Director5of the Commission.6(10) AVAILABILITY OF REPORTS.The Com7mission shall transmit to the Secretary a copy of8each report submitted under this subsection and9

shall make such reports available to the public.10(11) DIRECTOR AND STAFF; EXPERTS AND11CONSULTANTS.Subject to such review as the Sec12retary deems necessary to assure the efficient ad13ministration of the Commission, the Commission14may 15(A) appoint an Executive Director (sub16ject to the approval of the Secretary) and such17

other personnel as Federal employees under18section 2105 of title 5, United States Code, as19may be necessary to carry out its duties (with20out regard to the provisions of title 5, United21States Code, governing appointments in the22competitive service);23(B) seek such assistance and support as24may be required in the performance of its du-

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5171ties from appropriate Federal departments and

2agencies;3(C) enter into contracts or make other ar4rangements, as may be necessary for the conductof the work of the Commission (without6regard to section 3709 of the Revised Statutes7(41 U.S.C. 5));8(D) make advance, progress, and other

9payments which relate to the work of the Commission;11(E) provide transportation and subsist12ence for persons serving without compensation;13and14(F) prescribe such rules and regulationsas it deems necessary with respect to the inter16nal organization and operation of the Commis17sion.18

(c) RESEARCH REQUIREMENTS.Any research con19ducted, supported, or synthesized under this section shallmeet the following requirements:21(1) ENSURING TRANSPARENCY, CREDIBILITY,22AND ACCESS. 23(A) The establishment of the agenda and24conduct of the research shall be insulated frominappropriate political or stakeholder influence.

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5181(B) Methods of conducting such research

2shall be scientifically based.3(C) All aspects of the prioritization of re4search, conduct of the research, and developmentof conclusions based on the research shall6be transparent to all stakeholders.7(D) The process and methods for con8ducting such research shall be publicly docu9mented and available to all stakeholders.(E) Throughout the process of such re11search, the Center shall provide opportunities

12for all stakeholders involved to review and pro13vide public comment on the methods and find14ings of such research.(2) USE OF CLINICAL PERSPECTIVE ADVISORY16PANELS.The research shall meet a national re17search priority determined under subsection18(b)(2)(A) and shall consider advice given to the Cen19ter by the clinical perspective advisory panel for the

national research priority.21(3) STAKEHOLDER INPUT. 22(A) IN GENERAL.The Commission shall23consult with patients, health care providers,24health care consumer representatives, and otherappropriate stakeholders with an interest in the

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5191research through a transparent process rec2

ommended by the Commission.3(B) SPECIFIC AREAS OF CONSULTA4TION.Consultation shall include where5deemed appropriate by the Commission 6(i) recommending research priorities7and questions;8(ii) recommending research meth9

odologies; and10(iii) advising on and assisting with11efforts to disseminate research findings.12(C) OMBUDSMAN.The Secretary shall13designate a patient ombudsman. The ombuds14man shall 15(i) serve as an available point of con16tact for any patients with an interest in

17proposed comparative effectiveness studies18by the Center; and19(ii) ensure that any comments from20patients regarding proposed comparative21effectiveness studies are reviewed by the22Commission.23(4) TAKING INTO ACCOUNT POTENTIAL DIF24FERENCES.Research shall

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5201(A) be designed, as appropriate, to take

2into account the potential for differences in the3effectiveness of health care items and services4used with various subpopulations such as racialand ethnic minorities, women, different age6groups (including children, adolescents, adults,7and seniors), and individuals with different8

comorbidities; and 9

(B) seek, as feasible and appropriate, toinclude members of such subpopulations as sub11jects in the research.12(d) PUBLIC ACCESS TO COMPARATIVE EFFECTIVE13NESS INFORMATION. 14(1) IN GENERAL.Not later than 90 daysafter receipt by the Center or Commission, as appli16cable, of a relevant report described in paragraph17

(2) made by the Center, Commission, or clinical per18spective advisory panel under this section, appro19priate information contained in such report shall beposted on the official public Internet site of the Cen21ter and of the Commission, as applicable.22(2) RELEVANT REPORTS DESCRIBED.For23purposes of this section, a relevant report is each of24the following submitted by the Center or a granteeor contractor of the Center:

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5211(A) Any interim or progress reports as

2deemed appropriate by the Secretary.3(B) Stakeholder comments.4(C) A final report.5(e) DISSEMINATION AND INCORPORATION OF COM6PARATIVE EFFECTIVENESS INFORMATION. 7(1) DISSEMINATION.The Center shall pro8vide for the dissemination of appropriate findings

9produced by research supported, conducted, or syn10thesized under this section to health care providers,11patients, vendors of health information technology12focused on clinical decision support, appropriate pro13fessional associations, and Federal and private14health plans, and other relevant stakeholders. In dis15seminating such findings the Center shall 16(A) convey findings of research so that

17they are comprehensible and useful to patients18and providers in making health care decisions;19(B) discuss findings and other consider20ations specific to certain sub-populations, risk21factors, and comorbidities as appropriate;22(C) include considerations such as limita23tions of research and what further research24may be needed, as appropriate;

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5221(D) not include any data that the dis2

semination of which would violate the privacy of3research participants or violate any confiden4tiality agreements made with respect to the use5of data under this section; and6(E) assist the users of health information7technology focused on clinical decision support8to promote the timely incorporation of such

9findings into clinical practices and promote the10ease of use of such incorporation.11(2) DISSEMINATION PROTOCOLS AND STRATE12GIES.The Center shall develop protocols and strat13egies for the appropriate dissemination of research14findings in order to ensure effective communication15of findings and the use and incorporation of such16

findings into relevant activities for the purpose of in17forming higher quality and more effective and effi18cient decisions regarding medical items and services.19In developing and adopting such protocols and strat20egies, the Center shall consult with stakeholders con21cerning the types of dissemination that will be most22useful to the end users of information and may pro23vide for the utilization of multiple formats for con24veying findings to different audiences, including dis-

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5231semination to individuals with limited English pro2

ficiency.3(f) REPORTS TO CONGRESS. 4(1) ANNUAL REPORTS.Beginning not laterthan one year after the date of the enactment of this6section, the Director of the Agency of Healthcare7Research and Quality and the Commission shall sub8mit to Congress an annual report on the activities9

of the Center and the Commission, as well as the research,conducted under this section. Each such re11port shall include a discussion of the Centers com12pliance with subsection (c)(B)(4), including any rea13sons for lack of complicance with such subsection.14(2) RECOMMENDATION FOR FAIR SHARE PERCAPITA AMOUNT FOR ALL-PAYER FINANCING.Be16ginning not later than December 31, 2011, the Sec17retary shall submit to Congress an annual rec18ommendation for a fair share per capita amount de19scribed in subsection (c)(1) of section 9511 of theInternal Revenue Code of 1986 for purposes of

21funding the CERTF under such section.22(3) ANALYSIS AND REVIEW.Not later than23December 31, 2013, the Secretary, in consultation24with the Commission, shall submit to Congress a reporton all activities conducted or supported under

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5241this section as of such date. Such report shall in2

clude an evaluation of the overall costs of such ac3tivities and an analysis of the backlog of any re4search proposals approved by the Commission but5not funded.6(g) FUNDING OF COMPARATIVE EFFECTIVENESS7RESEARCH.For fiscal year 2010 and each subsequent8fiscal year, amounts in the Comparative Effectiveness Re9search Trust Fund (referred to in this section as the

10CERTF) under section 9511 of the Internal Revenue11Code of 1986 shall be available, without the need for fur12ther appropriations and without fiscal year limitation, to13the Secretary to carry out this section.14(h) CONSTRUCTION.Nothing in this section shall15be construed to permit the Commission or the Center to16mandate coverage, reimbursement, or other policies for

17any public or private payer..18(b) COMPARATIVE EFFECTIVENESS RESEARCH19TRUST FUND; FINANCING FOR THE TRUST FUND.For20provision establishing a Comparative Effectiveness Re21search Trust Fund and financing such Trust Fund, see22section 1802.

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5251Subtitle BNursing Home

2Transparency3PART 1IMPROVING TRANSPARENCY OF INFOR4MATION ON SKILLED NURSING FACILITIESAND NURSING FACILITIES6SEC. 1411. REQUIRED DISCLOSURE OF OWNERSHIP AND7ADDITIONAL DISCLOSABLE PARTIES INFOR8MATION.9

(a) IN GENERAL.Section 1124 of the Social SecurityAct (42 U.S.C. 1320a3) is amended by adding at

11the end the following new subsection:12(c) REQUIRED DISCLOSURE OF OWNERSHIP AND13ADDITIONAL DISCLOSABLE PARTIES INFORMATION. 14(1) DISCLOSURE.A facility (as defined inparagraph (7)(B)) shall have the information de16scribed in paragraph (3) available 17

(A) during the period beginning on the18date of the enactment of this subsection and19ending on the date such information is madeavailable to the public under section 1411(b) of21the Americas Affordable Health Choices Act of222009, for submission to the Secretary, the In23spector General of the Department of Health24and Human Services, the State in which the facilityis located, and the State long-term care

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5261ombudsman in the case where the Secretary,

2the Inspector General, the State, or the State3long-term care ombudsman requests such infor4mation; and(B) beginning on the effective date of the6final regulations promulgated under paragraph7(4)(A), for reporting such information in ac8cordance with such final regulations.9

Nothing in subparagraph (A) shall be construed asauthorizing a facility to dispose of or delete informa11tion described in such subparagraph after the effec12tive date of the final regulations promulgated under13paragraph (4)(A).14(2) PUBLIC AVAILABILITY OF INFORMATION. During the period described in paragraph (1)(A), a16facility shall 17(A) make the information described in

18paragraph (3) available to the public upon re19quest and update such information as may benecessary to reflect changes in such informa21tion; and22(B) post a notice of the availability of23such information in the lobby of the facility in24a prominent manner.(3) INFORMATION DESCRIBED.

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5271(A) IN GENERAL.The following infor2

mation is described in this paragraph:3(i) The information described in sub4sections (a) and (b), subject to subpara5graph (C).6(ii) The identity of and information7on 8(I) each member of the gov9erning body of the facility, including

10the name, title, and period of service11of each such member;12(II) each person or entity who is13an officer, director, member, partner,14trustee, or managing employee of the15facility, including the name, title, and16

date of start of service of each such17person or entity; and18(III) each person or entity who19is an additional disclosable party of20the facility.21(iii) The organizational structure of22each person and entity described in sub23clauses (II) and (III) of clause (ii) and a24description of the relationship of each such

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5281person or entity to the facility and to one

2another.3(B) SPECIAL RULE WHERE INFORMATION4IS ALREADY REPORTED OR SUBMITTED.Tothe extent that information reported by a facil6ity to the Internal Revenue Service on Form7990, information submitted by a facility to the8Securities and Exchange Commission, or infor9

mation otherwise submitted to the Secretary orany other Federal agency contains the informa11tion described in clauses (i), (ii), or (iii) of sub12paragraph (A), the Secretary may allow, to the13extent practicable, such Form or such informa14tion to meet the requirements of paragraph (1)and to be submitted in a manner specified by16the Secretary.17(C) SPECIAL RULE.In applying sub18paragraph (A)(i)

19(i) with respect to subsections (a)and (b), ownership or control interest 21shall include direct or indirect interests, in22cluding such interests in intermediate enti23ties; and24(ii) subsection (a)(3)(A)(ii) shall includethe owner of a whole or part interest

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5291in any mortgage, deed of trust, note, or

2other obligation secured, in whole or in3part, by the entity or any of the property4or assets thereof, if the interest is equal toor exceeds 5 percent of the total property6or assets of the entirety.7(4) REPORTING. 8(A) IN GENERAL.

Not later than the9

date that is 2 years after the date of the enactmentof this subsection, the Secretary shall pro11mulgate regulations requiring, effective on the12date that is 90 days after the date on which13such final regulations are published in the Fed14eral Register, a facility to report the informationdescribed in paragraph (3) to the Secretary16in a standardized format, and such other regu17

lations as are necessary to carry out this sub18section. Such final regulations shall ensure that19the facility certifies, as a condition of participationand payment under the program under21title XVIII or XIX, that the information re22ported by the facility in accordance with such23final regulations is accurate and current.24(B) GUIDANCE.The Secretary shall provideguidance and technical assistance to States

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5301on how to adopt the standardized format under

2subparagraph (A).3(5) NO EFFECT ON EXISTING REPORTING RE4QUIREMENTS.Nothing in this subsection shall reduce,diminish, or alter any reporting requirement6for a facility that is in effect as of the date of the7enactment of this subsection.8(6) DEFINITIONS.In this subsection:

9(A) ADDITIONAL DISCLOSABLE PARTY. The term additional disclosable party means,11with respect to a facility, any person or entity12who 13(i) exercises operational, financial, or14managerial control over the facility or apart thereof, or provides policies or proce16dures for any of the operations of the facil17

ity, or provides financial or cash manage18ment services to the facility;19(ii) leases or subleases real propertyto the facility, or owns a whole or part in21terest equal to or exceeding 5 percent of22the total value of such real property;23(iii) lends funds or provides a finan24cial guarantee to the facility in an amountwhich is equal to or exceeds $50,000; or

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5311(iv) provides management or admin2

istrative services, clinical consulting serv3ices, or accounting or financial services to4the facility.(B) FACILITY.The term facility means6a disclosing entity which is 7(i) a skilled nursing facility (as de8fined in section 1819(a)); or9(ii) a nursing facility (as defined in

section 1919(a)).11(C) MANAGING EMPLOYEE.The term12managing employee means, with respect to a13facility, an individual (including a general man14ager, business manager, administrator, director,or consultant) who directly or indirectly man16ages, advises, or supervises any element of the17practices, finances, or operations of the facility.18

(D) ORGANIZATIONAL STRUCTURE.The19term organizational structure means, in thecase of 21(i) a corporation, the officers, direc22tors, and shareholders of the corporation23who have an ownership interest in the cor24poration which is equal to or exceeds 5percent;

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5321(ii) a limited liability company, the

2members and managers of the limited li3ability company (including, as applicable,4what percentage each member and managerhas of the ownership interest in the6limited liability company);7(iii) a general partnership, the part8ners of the general partnership;9(iv) a limited partnership, the generalpartners and any limited partners of

11the limited partnership who have an own12ership interest in the limited partnership13which is equal to or exceeds 10 percent;14(v) a trust, the trustees of the trust;(vi) an individual, contact informa16tion for the individual; and17(vii) any other person or entity, such

18information as the Secretary determines19appropriate..(b) PUBLIC AVAILABILITY OF INFORMATION. 21(1) IN GENERAL.Not later than the date that22is 1 year after the date on which the final regula23tions promulgated under section 1124(c)(4)(A) of24the Social Security Act, as added by subsection (a),are published in the Federal Register, the informa

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5331tion reported in accordance with such final regula2

tions shall be made available to the public in accord3ance with procedures established by the Secretary.4(2) DEFINITIONS.In this subsection:(A) NURSING FACILITY.The term nurs6ing facility has the meaning given such term7in section 1919(a) of the Social Security Act8(42 U.S.C. 1396r(a)).9(B) SECRETARY.The term Secretary

means the Secretary of Health and Human11Services.12(C) SKILLED NURSING FACILITY.The13term skilled nursing facility has the meaning14given such term in section 1819(a) of the SocialSecurity Act (42 U.S.C. 1395i3(a)).16(c) CONFORMING AMENDMENTS. 17

(1) SKILLED NURSING FACILITIES.Section181819(d)(1) of the Social Security Act (42 U.S.C.191395i3(d)(1)) is amended by striking subparagraph(B) and redesignating subparagraph (C) as subpara21graph (B).22(2) NURSING FACILITIES.Section 1919(d)(1)23of the Social Security Act (42 U.S.C. 1396r(d)(1))24is amended by striking subparagraph (B) and redesignatingsubparagraph (C) as subparagraph (B).

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5341SEC. 1412. ACCOUNTABILITY REQUIREMENTS.

2(a) EFFECTIVE COMPLIANCE AND ETHICS PRO3GRAMS. 4(1) SKILLED NURSING FACILITIES.Section1819(d)(1) of the Social Security Act (42 U.S.C.61395i3(d)(1)), as amended by section 1411(c)(1),7is amended by adding at the end the following new8subparagraph:

9(C) COMPLIANCE AND ETHICS PROGRAMS. 11(i) REQUIREMENT.On or after the12date that is 36 months after the date of13the enactment of this subparagraph, a14skilled nursing facility shall, with respectto the entity that operates the facility (in16this subparagraph referred to as the oper17

ating organization or organization), have18in operation a compliance and ethics pro19gram that is effective in preventing and detectingcriminal, civil, and administrative21violations under this Act and in promoting22quality of care consistent with regulations23developed under clause (ii).24(ii) DEVELOPMENT OF REGULATIONS.

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5351(I) IN GENERAL.Not later

2than the date that is 2 years after3such date of the enactment, the Sec4retary, in consultation with the In5spector General of the Department of6Health and Human Services, shall7promulgate regulations for an effec8tive compliance and ethics program9

for operating organizations, which10may include a model compliance pro11gram.12(II) DESIGN OF REGULA13TIONS.Such regulations with respect14to specific elements or formality of a15program may vary with the size of the16organization, such that larger organi17

zations should have a more formal18and rigorous program and include es19tablished written policies defining the20standards and procedures to be fol21lowed by its employees. Such require22ments shall specifically apply to the23corporate level management of multi-24unit nursing home chains.

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5361(III) EVALUATION.Not later

2than 3 years after the date of promul3gation of regulations under this4clause, the Secretary shall complete5an evaluation of the compliance and6ethics programs required to be estab7lished under this subparagraph. Such8evaluation shall determine if such pro9

grams led to changes in deficiency ci10tations, changes in quality perform11ance, or changes in other metrics of12resident quality of care. The Secretary13shall submit to Congress a report on14such evaluation and shall include in15such report such recommendations re16garding changes in the requirements17

for such programs as the Secretary18determines appropriate.19(iii) REQUIREMENTS FOR COMPLI20ANCE AND ETHICS PROGRAMS.In this21subparagraph, the term compliance and22ethics program means, with respect to a23skilled nursing facility, a program of the24operating organization that

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5371(I) has been reasonably de2

signed, implemented, and enforced so3that it generally will be effective in4preventing and detecting criminal,civil, and administrative violations6under this Act and in promoting qual7ity of care; and8(II) includes at least the re9quired components specified in clause

(iv).11(iv) REQUIRED COMPONENTS OF12PROGRAM.The required components of a13compliance and ethics program of an orga14nization are the following:(I) The organization must have16established compliance standards and17procedures to be followed by its em18

ployees, contractors, and other agents19that are reasonably capable of reducingthe prospect of criminal, civil, and21administrative violations under this22Act.23(II) Specific individuals within24high-level personnel of the organizationmust have been assigned overall

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5381responsibility to oversee compliance

2with such standards and procedures3and have sufficient resources and au4thority to assure such compliance.(III) The organization must6have used due care not to delegate7substantial discretionary authority to8individuals whom the organization

9knew, or should have known throughthe exercise of due diligence, had a11propensity to engage in criminal, civil,12and administrative violations under13this Act.14(IV) The organization musthave taken steps to communicate ef16fectively its standards and procedures

17to all employees and other agents,18such as by requiring participation in19training programs or by disseminatingpublications that explain in a practical21manner what is required.22(V) The organization must have23taken reasonable steps to achieve com24pliance with its standards, such as byutilizing monitoring and auditing sys

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5391tems reasonably designed to detect

2criminal, civil, and administrative vio3lations under this Act by its employ4ees and other agents and by having in5place and publicizing a reporting sys6tem whereby employees and other7agents could report violations by oth8ers within the organization without9fear of retribution.

10(VI) The standards must have11been consistently enforced through ap12propriate disciplinary mechanisms, in13cluding, as appropriate, discipline of14individuals responsible for the failure15to detect an offense.16(VII) After an offense has been17

detected, the organization must have18taken all reasonable steps to respond19appropriately to the offense and to20prevent further similar offenses, in21cluding repayment of any funds to22which it was not entitled and any nec23essary modification to its program to24prevent and detect criminal, civil, and

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5401administrative violations under this

2Act.3(VIII) The organization must4periodically undertake reassessment ofits compliance program to identify6changes necessary to reflect changes7within the organization and its facili8ties.

9(v) COORDINATION.The provisionsof this subparagraph shall apply with re11spect to a skilled nursing facility in lieu of12section 1874(d)..13(2) NURSING FACILITIES.Section 1919(d)(1)14of the Social Security Act (42 U.S.C. 1396r(d)(1)),as amended by section 1411(c)(2), is amended by16adding at the end the following new subparagraph:

17(C) COMPLIANCE AND ETHICS PRO18GRAM. 19(i) REQUIREMENT.On or after thedate that is 36 months after the date of21the enactment of this subparagraph, a22nursing facility shall, with respect to the23entity that operates the facility (in this24subparagraph referred to as the operatingorganization or organization), have in op

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5411eration a compliance and ethics program

2that is effective in preventing and detect3ing criminal, civil, and administrative viola4tions under this Act and in promotingquality of care consistent with regulations6developed under clause (ii).7(ii) DEVELOPMENT OF REGULA8TIONS. 9(I) IN GENERAL.Not later

than the date that is 2 years after11such date of the enactment, the Sec12retary, in consultation with the In13spector General of the Department of14Health and Human Services, shall developregulations for an effective com16pliance and ethics program for oper17ating organizations, which may in18clude a model compliance program.19(II) DESIGN OF REGULATIONS.

Such regulations with respect21to specific elements or formality of a22program may vary with the size of the23organization, such that larger organi24zations should have a more formaland rigorous program and include es

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542

1tablished written policies defining the2standards and procedures to be fol3lowed by its employees. Such require4ments may specifically apply to the5corporate level management of multi-6unit nursing home chains.7(III) EVALUATION.Not later

8than 3 years after the date of promul9gation of regulations under this clause10the Secretary shall complete an eval11uation of the compliance and ethics12programs required to be established13under this subparagraph. Such eval14uation shall determine if such pro15grams led to changes in deficiency ci16tations, changes in quality perform17

ance, or changes in other metrics of18resident quality of care. The Secretary19shall submit to Congress a report on20such evaluation and shall include in21such report such recommendations re22garding changes in the requirements23for such programs as the Secretary24determines appropriate.

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5431(iii) REQUIREMENTS FOR COMPLI2

ANCE AND ETHICS PROGRAMS.In this3subparagraph, the term compliance and4ethics program means, with respect to anursing facility, a program of the oper6ating organization that 7(I) has been reasonably de8signed, implemented, and enforced so9that it generally will be effective in

preventing and detecting criminal,11civil, and administrative violations12under this Act and in promoting qual13ity of care; and14(II) includes at least the requiredcomponents specified in clause16(iv).17(iv) REQUIRED COMPONENTS OF

18PROGRAM.The required components of a19compliance and ethics program of an organizationare the following:21(I) The organization must have22established compliance standards and23procedures to be followed by its em24ployees and other agents that are reasonablycapable of reducing the pros-

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5441pect of criminal, civil, and administra2

tive violations under this Act.3(II) Specific individuals within4high-level personnel of the organiza5tion must have been assigned overall6responsibility to oversee compliance7with such standards and procedures8and has sufficient resources and au9

thority to assure such compliance.10(III) The organization must11have used due care not to delegate12substantial discretionary authority to13individuals whom the organization14knew, or should have known through15the exercise of due diligence, had a

16propensity to engage in criminal, civil,17and administrative violations under18this Act.19(IV) The organization must20have taken steps to communicate ef21fectively its standards and procedures22to all employees and other agents,23such as by requiring participation in24training programs or by disseminating

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5451publications that explain in a practical

2manner what is required.3(V) The organization must have4taken reasonable steps to achieve compliancewith its standards, such as by6utilizing monitoring and auditing sys7tems reasonably designed to detect8criminal, civil, and administrative vio9

lations under this Act by its employeesand other agents and by having in11place and publicizing a reporting sys12tem whereby employees and other13agents could report violations by oth14ers within the organization withoutfear of retribution.16(VI) The standards must have17been consistently enforced through ap18

propriate disciplinary mechanisms, in19cluding, as appropriate, discipline ofindividuals responsible for the failure21to detect an offense.22(VII) After an offense has been23detected, the organization must have24taken all reasonable steps to respondappropriately to the offense and to

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5461prevent further similar offenses, in2

cluding repayment of any funds to3which it was not entitled and any nec4essary modification to its program toprevent and detect criminal, civil, and6administrative violations under this7Act.8(VIII) The organization must9

periodically undertake reassessment ofits compliance program to identify11changes necessary to reflect changes12within the organization and its facili13ties.14(v) COORDINATION.The provisionsof this subparagraph shall apply with re16spect to a nursing facility in lieu of section171902(a)(77)..

18(b) QUALITY ASSURANCE AND PERFORMANCE IM19PROVEMENT PROGRAM. (1) SKILLED NURSING FACILITIES.Section211819(b)(1)(B) of the Social Security Act (42 U.S.C.221396r(b)(1)(B)) is amended 23(A) by striking ASSURANCE and insert24ing ASSURANCE AND QUALITY ASSURANCEAND PERFORMANCE IMPROVEMENT PROGRAM;

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5471(B) by designating the matter beginning

2with A nursing facility as a clause (i) with3the heading IN GENERAL. and the appro4priate indentation; and(C) by adding at the end the following new6clause:7(ii) QUALITY ASSURANCE AND PER8FORMANCE IMPROVEMENT PROGRAM. 9(I) IN GENERAL.

Not laterthan December 31, 2011, the Sec11

retary shall establish and implement a12quality assurance and performance13improvement program (in this clause14referred to as the QAPI program)for skilled nursing facilities, including16multi-unit chains of such facilities.17

Under the QAPI program, the Sec18retary shall establish standards relat19ing to such facilities and provide technicalassistance to such facilities on21the development of best practices in22order to meet such standards. Not23later than 1 year after the date on24which the regulations are promulgatedunder subclause (II), a skilled nursing

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5481facility must submit to the Secretary

2a plan for the facility to meet such3standards and implement such best4practices, including how to coordinate5the implementation of such plan with6quality assessment and assurance ac7tivities conducted under clause (i).8(II) REGULATIONS.

The Sec9retary shall promulgate regulations to

10carry out this clause..11(2) NURSING FACILITIES.Section121919(b)(1)(B) of the Social Security Act (42 U.S.C.131396r(b)(1)(B)) is amended 14(A) by striking ASSURANCE and insert15ing ASSURANCE AND QUALITY ASSURANCE

16AND PERFORMANCE IMPROVEMENT PROGRAM;17(B) by designating the matter beginning18with A nursing facility as a clause (i) with19the heading IN GENERAL. and the appro20priate indentation; and21(C) by adding at the end the following new22clause:23(ii) QUALITY ASSURANCE AND PER24FORMANCE IMPROVEMENT PROGRAM.

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549

1(I) IN GENERAL.Not later2than December 31, 2011, the Sec3retary shall establish and implement a4quality assurance and performance5improvement program (in this clause6referred to as the QAPI program)7

for nursing facilities, including multi-8unit chains of such facilities. Under9the QAPI program, the Secretary10shall establish standards relating to11such facilities and provide technical12assistance to such facilities on the de13velopment of best practices in order to14

meet such standards. Not later than 115year after the date on which the regu16lations are promulgated under sub17clause (II), a nursing facility must18submit to the Secretary a plan for the19facility to meet such standards and20implement such best practices, includ21ing how to coordinate the implementa22tion of such plan with quality assess23ment and assurance activities con24ducted under clause (i).

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5501(II) REGULATIONS.The Sec2

retary shall promulgate regulations to3carry out this clause..4(3) PROPOSAL TO REVISE QUALITY ASSURANCEAND PERFORMANCE IMPROVEMENT PROGRAMS. 6The Secretary shall include in the proposed rule7published under section 1888(e) of the Social Secu8rity Act (42 U.S.C. 1395yy(e)(5)(A)) for the subse9quent fiscal year to the extent otherwise authorized

under section 1819(b)(1)(B) or 1819(d)(1)(C) of the11Social Security Act or other statutory or regulatory12authority, one or more proposals for skilled nursing13facilities to modify and strengthen quality assurance14and performance improvement programs in such facilities.At the time of publication of such proposed16rule and to the extent otherwise authorized under17

section 1919(b)(1)(B) or 1919(d)(1)(C) of such Act18or other regulatory authority.19(4) FACILITY PLAN.Not later than 1 yearafter the date on which the regulations are promul21gated under subclause (II) of clause (ii) of sections221819(b)(1)(B) and 1919(b)(1)(B) of the Social Se23curity Act, as added by paragraphs (1) and (2), a24skilled nursing facility and a nursing facility mustsubmit to the Secretary a plan for the facility to

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5511meet the standards under such regulations and im2

plement such best practices, including how to coordi3nate the implementation of such plan with quality4assessment and assurance activities conducted under5clause (i) of such sections.6(c) GAO STUDY ON NURSING FACILITY UNDER7CAPITALIZATION. 8(1) IN GENERAL.The Comptroller General of9

the United States shall conduct a study that exam10ines the following:11(A) The extent to which corporations that12own or operate large numbers of nursing facili13ties, taking into account ownership type (includ14ing private equity and control interests), are15undercapitalizing such facilities.16(B) The effects of such undercapitalization17

on quality of care, including staffing and food18costs, at such facilities.19(C) Options to address such undercapital20ization, such as requirements relating to surety21bonds, liability insurance, or minimum capital22ization.23(2) REPORT.Not later than 18 months after24the date of the enactment of this Act, the Comp

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5521troller General shall submit to Congress a report on

2the study conducted under paragraph (1).3(3) NURSING FACILITY.In this subsection, the4term nursing facility includes a skilled nursing facility.6SEC. 1413. NURSING HOME COMPARE MEDICARE WEBSITE.7(a) SKILLED NURSING FACILITIES. 8(1) IN GENERAL.Section 1819 of the Social

9Security Act (42 U.S.C. 1395i3) is amended (A) by redesignating subsection (i) as sub11section (j); and12(B) by inserting after subsection (h) the13following new subsection:14(i) NURSING HOME COMPARE WEBSITE. (1) INCLUSION OF ADDITIONAL INFORMA16TION. 17

(A) IN GENERAL.The Secretary shall18ensure that the Department of Health and19Human Services includes, as part of the informationprovided for comparison of nursing21homes on the official Internet website of the22Federal Government for Medicare beneficiaries23(commonly referred to as the Nursing Home24Compare Medicare website) (or a successorwebsite), the following information in a manner

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5531that is prominent, easily accessible, readily un2

derstandable to consumers of long-term care3services, and searchable:4(i) Information that is reported tothe Secretary under section 1124(c)(4).6(ii) Information on the Special7Focus Facility program (or a successor8program) established by the Centers for

9Medicare and Medicaid Services, accordingto procedures established by the Secretary.11Such procedures shall provide for the in12clusion of information with respect to, and13the names and locations of, those facilities14that, since the previous quarter (I) were newly enrolled in the16program;

17(II) are enrolled in the program18and have failed to significantly im19prove;(III) are enrolled in the pro21gram and have significantly improved;22(IV) have graduated from the23program; and24(V) have closed voluntarily orno longer participate under this title.

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5541(iii) Staffing data for each facility

2(including resident census data and data3on the hours of care provided per resident4per day) based on data submitted under5subsection (b)(8)(C), including information6on staffing turnover and tenure, in a for7mat that is clearly understandable to con8sumers of long-term care services and al9

lows such consumers to compare dif10ferences in staffing between facilities and11State and national averages for the facili12ties. Such format shall include 13(I) concise explanations of how14to interpret the data (such as a plain15English explanation of data reflecting16nursing home staff hours per resident

17day);18(II) differences in types of staff19(such as training associated with dif20ferent categories of staff);21(III) the relationship between22nurse staffing levels and quality of23care; and

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5551(IV) an explanation that appro2

priate staffing levels vary based on3patient case mix.4(iv) Links to State Internet websiteswith information regarding State survey6and certification programs, links to Form72567 State inspection reports (or a suc8cessor form) on such websites, information9

to guide consumers in how to interpret andunderstand such reports, and the facility11plan of correction or other response to12such report.13(v) The standardized complaint form14developed under subsection (f)(8), includingexplanatory material on what com16plaint forms are, how they are used, and17

how to file a complaint with the State sur18vey and certification program and the19State long-term care ombudsman program.(vi) Summary information on the21number, type, severity, and outcome of22substantiated complaints.23(vii) The number of adjudicated in24stances of criminal violations by employeesof a a nursing facility

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5561(I) that were committed inside

2the facility;3(II) with respect to such in4stances of violations or crimes committedinside of the facility that were6the violations or crimes of abuse, ne7glect, and exploitation, criminal sexual8abuse, or other violations or crimes9

that resulted in serious bodily injury;and11(III) the number of civil mone12tary penalties levied against the facil13ity, employees, contractors, and other14agents.(B) DEADLINE FOR PROVISION OF INFOR16MATION. 17(i) IN GENERAL.Except as pro18vided in clause (ii), the Secretary shall en19

sure that the information described in subparagraph(A) is included on such website21(or a successor website) not later than 122year after the date of the enactment of this23subsection.24(ii) EXCEPTION.The Secretaryshall ensure that the information described

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5571in subparagraph (A)(i) and (A)(iii) is in2

cluded on such website (or a successor3website) not later than the date on which4the requirements under section 1124(c)(4)and subsection (b)(8)(C)(ii) are imple6mented.7(2) REVIEW AND MODIFICATION OF8WEBSITE. 9(A) IN GENERAL.

The Secretary shallestablish a process

11(i) to review the accuracy, clarity of12presentation, timeliness, and comprehen13siveness of information reported on such14website as of the day before the date of theenactment of this subsection; and16(ii) not later than 1 year after the17

date of the enactment of this subsection, to18modify or revamp such website in accord19ance with the review conducted underclause (i).21(B) CONSULTATION.In conducting the22review under subparagraph (A)(i), the Sec23retary shall consult with 24(i) State long-term care ombudsmanprograms;

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5581(ii) consumer advocacy groups;

2(iii) provider stakeholder groups; and3(iv) any other representatives of pro4grams or groups the Secretary determinesappropriate..6(2) TIMELINESS OF SUBMISSION OF SURVEY7AND CERTIFICATION INFORMATION. 8(A) IN GENERAL.Section 1819(g)(5) of

9the Social Security Act (42 U.S.C. 1395i 3(g)(5)) is amended by adding at the end the11following new subparagraph:12(E) SUBMISSION OF SURVEY AND CER13TIFICATION INFORMATION TO THE SEC14RETARY.In order to improve the timeliness ofinformation made available to the public under16subparagraph (A) and provided on the Nursing17

Home Compare Medicare website under sub18section (i), each State shall submit information19respecting any survey or certification made respectinga skilled nursing facility (including any21enforcement actions taken by the State) to the22Secretary not later than the date on which the23State sends such information to the facility.24The Secretary shall use the information submittedunder the preceding sentence to update

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5591the information provided on the Nursing Home

2Compare Medicare website as expeditiously as3practicable but not less frequently than quar4terly..5(B) EFFECTIVE DATE.The amendment6made by this paragraph shall take effect 1 year7after the date of the enactment of this Act.8

(3) SPECIAL FOCUS FACILITY PROGRAM.Sec9tion 1819(f) of such Act is amended by adding at

10the end the following new paragraph:11(8) SPECIAL FOCUS FACILITY PROGRAM. 12(A) IN GENERAL.The Secretary shall13conduct a special focus facility program for en14forcement of requirements for skilled nursing15facilities that the Secretary has identified as

16having substantially failed to meet applicable17requirement of this Act.18(B) PERIODIC SURVEYS.Under such19program the Secretary shall conduct surveys of20each facility in the program not less than once21every 6 months..22(b) NURSING FACILITIES. 23(1) IN GENERAL.Section 1919 of the Social24Security Act (42 U.S.C. 1396r) is amended

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5601(A) by redesignating subsection (i) as sub2

section (j); and3(B) by inserting after subsection (h) the4following new subsection:(i) NURSING HOME COMPARE WEBSITE. 6(1) INCLUSION OF ADDITIONAL INFORMA7TION. 8(A) IN GENERAL.The Secretary shall9

ensure that the Department of Health andHuman Services includes, as part of the infor11mation provided for comparison of nursing12homes on the official Internet website of the13Federal Government for Medicare beneficiaries14(commonly referred to as the Nursing HomeCompare Medicare website) (or a successor16website), the following information in a manner17

that is prominent, easily accessible, readily un18derstandable to consumers of long-term care19services, and searchable:(i) Staffing data for each facility (in21cluding resident census data and data on22the hours of care provided per resident per23day) based on data submitted under sub24section (b)(8)(C)(ii), including informationon staffing turnover and tenure, in a for-

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5611mat that is clearly understandable to con2

sumers of long-term care services and al3lows such consumers to compare dif4ferences in staffing between facilities andState and national averages for the facili6ties. Such format shall include 7(I) concise explanations of how8to interpret the data (such as plain9English explanation of data reflectingnursing home staff hours per resident

11day);12(II) differences in types of staff13(such as training associated with dif14ferent categories of staff);(III) the relationship between16nurse staffing levels and quality of17care; and18

(IV) an explanation that appro19priate staffing levels vary based onpatient case mix.21(ii) Links to State Internet websites22with information regarding State survey23and certification programs, links to Form242567 State inspection reports (or a successorform) on such websites, information

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5621to guide consumers in how to interpret and

2understand such reports, and the facility3plan of correction or other response to4such report.(iii) The standardized complaint6form developed under subsection (f)(10),7including explanatory material on what8

complaint forms are, how they are used,9and how to file a complaint with the Statesurvey and certification program and the11State long-term care ombudsman program.12(iv) Summary information on the13number, type, severity, and outcome of14substantiated complaints.(v) The number of adjudicated in16

stances of criminal violations by employees17of a nursing facility 18(I) that were committed inside19of the facility; and(II) with respect to such in21stances of violations or crimes com22mitted outside of the facility, that23were the violations or crimes that re24sulted in the serious bodily injury ofan elder.

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5631(B) DEADLINE FOR PROVISION OF INFOR2

MATION. 3(i) IN GENERAL.Except as pro4vided in clause (ii), the Secretary shall en5sure that the information described in sub6paragraph (A) is included on such website7(or a successor website) not later than 18year after the date of the enactment of this9subsection.

10(ii) EXCEPTION.The Secretary11shall ensure that the information described12in subparagraph (A)(i) and (A)(iii) is in13cluded on such website (or a successor14website) not later than the date on which15the requirements under section 1124(c)(4)16and subsection (b)(8)(C)(ii) are imple17

mented.18(2) REVIEW AND MODIFICATION OF19WEBSITE. 20(A) IN GENERAL.The Secretary shall21establish a process 22(i) to review the accuracy, clarity of23presentation, timeliness, and comprehen24siveness of information reported on such

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5641website as of the day before the date of the

2enactment of this subsection; and3(ii) not later than 1 year after the4date of the enactment of this subsection, tomodify or revamp such website in accord6ance with the review conducted under7clause (i).8(B) CONSULTATION.In conducting the

9review under subparagraph (A)(i), the Secretaryshall consult with 11(i) State long-term care ombudsman12programs;13(ii) consumer advocacy groups;14(iii) provider stakeholder groups;(iv) skilled nursing facility employees16

and their representatives; and17(v) any other representatives of pro18grams or groups the Secretary determines19appropriate..(2) TIMELINESS OF SUBMISSION OF SURVEY21AND CERTIFICATION INFORMATION. 22(A) IN GENERAL.Section 1919(g)(5) of23the Social Security Act (42 U.S.C. 1396r(g)(5))24is amended by adding at the end the followingnew subparagraph:

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5651(E) SUBMISSION OF SURVEY AND CER2

TIFICATION INFORMATION TO THE SEC3RETARY.In order to improve the timeliness of4information made available to the public undersubparagraph (A) and provided on the Nursing6Home Compare Medicare website under sub7section (i), each State shall submit information8respecting any survey or certification made re9specting a nursing facility (including any enforcementactions taken by the State) to the

11Secretary not later than the date on which the12State sends such information to the facility.13The Secretary shall use the information sub14mitted under the preceding sentence to updatethe information provided on the Nursing Home16Compare Medicare website as expeditiously as17practicable but not less frequently than quar18terly..

19(B) EFFECTIVE DATE.The amendmentmade by this paragraph shall take effect 1 year21after the date of the enactment of this Act.22(3) SPECIAL FOCUS FACILITY PROGRAM.Sec23tion 1919(f) of such Act is amended by adding at24the end of the following new paragraph:(10) SPECIAL FOCUS FACILITY PROGRAM.

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5661(A) IN GENERAL.The Secretary shall

2conduct a special focus facility program for en3forcement of requirements for nursing facilities4that the Secretary has identified as having substantiallyfailed to meet applicable requirements6of this Act.7(B) PERIODIC SURVEYS.Under such8program the Secretary shall conduct surveys of

9each facility in the program not less often thanonce every 6 months..11(c) AVAILABILITY OF REPORTS ON SURVEYS, CER12TIFICATIONS, AND COMPLAINT INVESTIGATIONS. 13(1) SKILLED NURSING FACILITIES.Section141819(d)(1) of the Social Security Act (42 U.S.C.1395i3(d)(1)), as amended by sections 1411 and161412, is amended by adding at the end the following

17new subparagraph:18(D) AVAILABILITY OF SURVEY, CERTIFI19CATION, AND COMPLAINT INVESTIGATION RE-PORTS.A skilled nursing facility must 21(i) have reports with respect to any22surveys, certifications, and complaint in23vestigations made respecting the facility24during the 3 preceding years available forany individual to review upon request; and

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5671(ii) post notice of the availability of

2such reports in areas of the facility that3are prominent and accessible to the public.4The facility shall not make available underclause (i) identifying information about com6plainants or residents..7(2) NURSING FACILITIES.Section 1919(d)(1)8of the Social Security Act (42 U.S.C. 1396r(d)(1)),

9as amended by sections 1411 and 1412, is amendedby adding at the end the following new subpara11graph:12(D) AVAILABILITY OF SURVEY, CERTIFI13CATION, AND COMPLAINT INVESTIGATION RE14PORTS.A nursing facility must (i) have reports with respect to any16surveys, certifications, and complaint in17vestigations made respecting the facility18

during the 3 preceding years available for19any individual to review upon request; and(ii) post notice of the availability of21such reports in areas of the facility that22are prominent and accessible to the public.23The facility shall not make available under24clause (i) identifying information about complainantsor residents..

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5681(3) EFFECTIVE DATE.The amendments made

2by this subsection shall take effect 1 year after the3date of the enactment of this Act.4(d) GUIDANCE TO STATES ON FORM 2567 STATE INSPECTIONREPORTS AND COMPLAINT INVESTIGATION RE6PORTS. 7(1) GUIDANCE.The Secretary of Health and8Human Services (in this subtitle referred to as the

9Secretary) shall provide guidance to States onhow States can establish electronic links to Form112567 State inspection reports (or a successor form),12complaint investigation reports, and a facilitys plan13of correction or other response to such Form 256714State inspection reports (or a successor form) on theInternet website of the State that provides informa16tion on skilled nursing facilities and nursing facili17

ties and the Secretary shall, if possible, include such18information on Nursing Home Compare.19(2) REQUIREMENT.Section 1902(a)(9) of theSocial Security Act (42 U.S.C. 1396a(a)(9)) is21amended 22(A) by striking and at the end of sub23paragraph (B);24(B) by striking the semicolon at the end ofsubparagraph (C) and inserting , and; and

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2subparagraph:3(D) that the State maintain a consumer-4oriented website providing useful information to5consumers regarding all skilled nursing facili6ties and all nursing facilities in the State, in7cluding for each facility, Form 2567 State in8spection reports (or a successor form), com9plaint investigation reports, the facilitys plan of

10correction, and such other information that the11State or the Secretary considers useful in as12sisting the public to assess the quality of long13term care options and the quality of care pro14vided by individual facilities;.15(3) DEFINITIONS.In this subsection:16(A) NURSING FACILITY.The term nurs17ing facility has the meaning given such term

18in section 1919(a) of the Social Security Act19(42 U.S.C. 1396r(a)).20(B) SECRETARY.The term Secretary 21means the Secretary of Health and Human22Services.23(C) SKILLED NURSING FACILITY.The24term skilled nursing facility has the meaning

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5701given such term in section 1819(a) of the Social

2Security Act (42 U.S.C. 1395i3(a)).3SEC. 1414. REPORTING OF EXPENDITURES.4Section 1888 of the Social Security Act (42 U.S.C.1395yy) is amended by adding at the end the following6new subsection:7(f) REPORTING OF DIRECT CARE EXPENDI8TURES.

9(1) IN GENERAL.For cost reports submittedunder this title for cost reporting periods beginning11on or after the date that is 3 years after the date12of the enactment of this subsection, skilled nursing13facilities shall separately report expenditures for14wages and benefits for direct care staff (breakingout (at a minimum) registered nurses, licensed pro16fessional nurses, certified nurse assistants, and other

17medical and therapy staff).18(2) MODIFICATION OF FORM.The Secretary,19in consultation with private sector accountants experiencedwith skilled nursing facility cost reports,21shall redesign such reports to meet the requirement22of paragraph (1) not later than 1 year after the date23of the enactment of this subsection.24(3) CATEGORIZATION BY FUNCTIONAL AC-COUNTS.Not later than 30 months after the date

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5711of the enactment of this subsection, the Secretary,

2working in consultation with the Medicare Payment3Advisory Commission, the Inspector General of the4Department of Health and Human Services, and5other expert parties the Secretary determines appro6priate, shall take the expenditures listed on cost re7ports, as modified under paragraph (1), submitted8by skilled nursing facilities and categorize such ex9

penditures, regardless of any source of payment for10such expenditures, for each skilled nursing facility11into the following functional accounts on an annual12basis:13(A) Spending on direct care services (in14cluding nursing, therapy, and medical services).15(B) Spending on indirect care (including16

housekeeping and dietary services).17(C) Capital assets (including building and18land costs).19(D) Administrative services costs.20(4) AVAILABILITY OF INFORMATION SUB21MITTED.The Secretary shall establish procedures22to make information on expenditures submitted23under this subsection readily available to interested24parties upon request, subject to such requirements

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5721as the Secretary may specify under the procedures

2established under this paragraph..3SEC. 1415. STANDARDIZED COMPLAINT FORM.4(a) SKILLED NURSING FACILITIES. 5(1) DEVELOPMENT BY THE SECRETARY.Sec6tion 1819(f) of the Social Security Act (42 U.S.C.71395i3(f)), as amended by section 1413(a)(3), is8

amended by adding at the end the following new9paragraph:10(9) STANDARDIZED COMPLAINT FORM.The11Secretary shall develop a standardized complaint12form for use by a resident (or a person acting on the13residents behalf) in filing a complaint with a State14survey and certification agency and a State long-

15term care ombudsman program with respect to a16skilled nursing facility..17(2) STATE REQUIREMENTS.Section 1819(e)18of the Social Security Act (42 U.S.C. 1395i3(e)) is19amended by adding at the end the following new20paragraph:21(6) COMPLAINT PROCESSES AND WHISTLE-22BLOWER PROTECTION. 23(A) COMPLAINT FORMS.The State must24make the standardized complaint form devel

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5731oped under subsection (f)(9) available upon re2

quest to 3(i) a resident of a skilled nursing fa4cility;(ii) any person acting on the resi6dents behalf; and7(iii) any person who works at a8skilled nursing facility or is a representa9tive of such a worker.(B) COMPLAINT RESOLUTION PROCESS.

11The State must establish a complaint resolution12process in order to ensure that a resident, the13legal representative of a resident of a skilled14nursing facility, or other responsible party isnot retaliated against if the resident, legal rep16resentative, or responsible party has com17plained, in good faith, about the quality of care18or other issues relating to the skilled nursing

19facility, that the legal representative of a residentof a skilled nursing facility or other re21sponsible party is not denied access to such22resident or otherwise retaliated against if such23representative party has complained, in good24faith, about the quality of care provided by thefacility or other issues relating to the facility,

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5741and that a person who works at a skilled nurs2

ing facility is not retaliated against if the work3er has complained, in good faith, about quality4of care or services or an issue relating to thequality of care or services provided at the facil6ity, whether the resident, legal representative,7other responsible party, or worker used the8form developed under subsection (f)(9) or some9other method for submitting the complaint.

Such complaint resolution process shall in11clude 12(i) procedures to assure accurate13tracking of complaints received, including14notification to the complainant that a complainthas been received;16(ii) procedures to determine the like17ly severity of a complaint and for the in18vestigation of the complaint;

19(iii) deadlines for responding to acomplaint and for notifying the complain21ant of the outcome of the investigation;22and23(iv) procedures to ensure that the24identity of the complainant will be keptconfidential.

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5751(C) WHISTLEBLOWER PROTECTION.

2(i) PROHIBITION AGAINST RETALIA3TION.No person who works at a skilled4nursing facility may be penalized, discriminated,or retaliated against with respect to6any aspect of employment, including dis7charge, promotion, compensation, terms,8conditions, or privileges of employment, or9

have a contract for services terminated, becausethe person (or anyone acting at the11persons request) complained, in good12faith, about the quality of care or services13provided by a nursing facility or about14other issues relating to quality of care orservices, whether using the form developed16under subsection (f)(9) or some other

17method for submitting the complaint.18(ii) RETALIATORY REPORTING.A19skilled nursing facility may not file a complaintor a report against a person who21works (or has worked at the facility with22the appropriate State professional discipli23nary agency because the person (or anyone24acting at the persons request) complainedin good faith, as described in clause (i).

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5761(iii) COMMENCEMENT OF ACTION.

2Any person who believes the person has3been penalized, discriminated , or retali4ated against or had a contract for servicesterminated in violation of clause (i) or6against whom a complaint has been filed in7violation of clause (ii) may bring an action8at law or equity in the appropriate district

9court of the United States, which shallhave jurisdiction over such action without11regard to the amount in controversy or the12citizenship of the parties, and which shall13have jurisdiction to grant complete relief,14including, but not limited to, injunctive relief(such as reinstatement, compensatory16

damages (which may include reimburse17ment of lost wages, compensation, and18benefits), costs of litigation (including rea19sonable attorney and expert witness fees),exemplary damages where appropriate, and21such other relief as the court deems just22and proper.23(iv) RIGHTS NOT WAIVABLE.The24rights protected by this paragraph may notbe diminished by contract or other agree-

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5771ment, and nothing in this paragraph shall

2be construed to diminish any greater or3additional protection provided by Federal4or State law or by contract or other agreement.6(v) REQUIREMENT TO POST NOTICE7OF EMPLOYEE RIGHTS.Each skilled8nursing facility shall post conspicuously in

9an appropriate location a sign (in a formspecified by the Secretary) specifying the11rights of persons under this paragraph and12including a statement that an employee13may file a complaint with the Secretary14against a skilled nursing facility that violatesthe provisions of this paragraph and16

information with respect to the manner of17filing such a complaint.18(D) RULE OF CONSTRUCTION.Nothing19in this paragraph shall be construed as preventinga resident of a skilled nursing facility21(or a person acting on the residents behalf)22from submitting a complaint in a manner or23format other than by using the standardized24complaint form developed under subsection(f)(9) (including submitting a complaint orally).

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5781(E) GOOD FAITH DEFINED.For pur2

poses of this paragraph, an individual shall be3deemed to be acting in good faith with respect4to the filing of a complaint if the individual reasonablybelieves 6(i) the information reported or dis7closed in the complaint is true; and8(ii) the violation of this title has oc9curred or may occur in relation to such information..

11(b) NURSING FACILITIES. 12(1) DEVELOPMENT BY THE SECRETARY.Sec13tion 1919(f) of the Social Security Act (42 U.S.C.141395i3(f)), as amended by section 1413(b), isamended by adding at the end the following new16paragraph:17(11) STANDARDIZED COMPLAINT FORM.The18

Secretary shall develop a standardized complaint19form for use by a resident (or a person acting on theresidents behalf) in filing a complaint with a State21survey and certification agency and a State long-22term care ombudsman program with respect to a23nursing facility..24(2) STATE REQUIREMENTS.Section 1919(e)of the Social Security Act (42 U.S.C. 1395i3(e)) is

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5791amended by adding at the end the following new

2paragraph:3(8) COMPLAINT PROCESSES AND WHISTLE4BLOWER PROTECTION. (A) COMPLAINT FORMS.The State must6make the standardized complaint form devel7oped under subsection (f)(11) available upon re8quest to 9(i) a resident of a nursing facility;(ii) any person acting on the resi11dents behalf; and

12(iii) any person who works at a nurs13ing facility or a representative of such a14worker.(B) COMPLAINT RESOLUTION PROCESS. 16The State must establish a complaint resolution17process in order to ensure that a resident, the18

legal representative of a resident of a nursing19facility, or other responsible party is not retaliatedagainst if the resident, legal representa21tive, or responsible party has complained, in22good faith, about the quality of care or other23issues relating to the nursing facility, that the24legal representative of a resident of a nursingfacility or other responsible party is not denied

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5801access to such resident or otherwise retaliated

2against if such representative party has com3plained, in good faith, about the quality of care4provided by the facility or other issues relating5to the facility, and that a person who works at6a nursing facility is not retaliated against if the7worker has complained, in good faith, about8

quality of care or services or an issue relating9to the quality of care or services provided at the10facility, whether the resident, legal representa11tive, other responsible party, or worker used the12form developed under subsection (f)(11) or13some other method for submitting the com14plaint. Such complaint resolution process shall15include

16(i) procedures to assure accurate17tracking of complaints received, including18notification to the complainant that a com19plaint has been received;20(ii) procedures to determine the like21ly severity of a complaint and for the in22vestigation of the complaint;23(iii) deadlines for responding to a24complaint and for notifying the complain-

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5811ant of the outcome of the investigation;

2and3(iv) procedures to ensure that the4identity of the complainant will be keptconfidential.6(C) WHISTLEBLOWER PROTECTION. 7(i) PROHIBITION AGAINST RETALIA8TION.No person who works at a nursing

9facility may be penalized, discriminated, orretaliated against with respect to any as11pect of employment, including discharge,12promotion, compensation, terms, condi13tions, or privileges of employment, or have14a contract for services terminated, becausethe person (or anyone acting at the per16sons request) complained, in good faith,17about the quality of care or services pro18

vided by a nursing facility or about other19issues relating to quality of care or services,whether using the form developed21under subsection (f)(11) or some other22method for submitting the complaint.23(ii) RETALIATORY REPORTING.A24nursing facility may not file a complaint ora report against a person who works (or

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5821has worked at the facility with the appro2

priate State professional disciplinary agen3cy because the person (or anyone acting at4the persons request) complained in goodfaith, as described in clause (i).6(iii) COMMENCEMENT OF ACTION. 7Any person who believes the person has8been penalized, discriminated, or retaliated9

against or had a contract for services terminatedin violation of clause (i) or against11whom a complaint has been filed in viola12tion of clause (ii) may bring an action at13law or equity in the appropriate district14court of the United States, which shallhave jurisdiction over such action without16regard to the amount in controversy or the17

citizenship of the parties, and which shall18have jurisdiction to grant complete relief,19including, but not limited to, injunctive relief(such as reinstatement, compensatory21damages (which may include reimburse22ment of lost wages, compensation, and23benefits), costs of litigation (including rea24sonable attorney and expert witness fees),exemplary damages where appropriate, and

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5831such other relief as the court deems just

2and proper.3(iv) RIGHTS NOT WAIVABLE.The4rights protected by this paragraph may notbe diminished by contract or other agree6ment, and nothing in this paragraph shall7be construed to diminish any greater or8additional protection provided by Federal

9or State law or by contract or other agreement.11(v) REQUIREMENT TO POST NOTICE12OF EMPLOYEE RIGHTS.Each nursing fa13cility shall post conspicuously in an appro14priate location a sign (in a form specifiedby the Secretary) specifying the rights of16persons under this paragraph and includ17ing a statement that an employee may file18

a complaint with the Secretary against a19nursing facility that violates the provisionsof this paragraph and information with re21spect to the manner of filing such a com22plaint.23(D) RULE OF CONSTRUCTION.Nothing24in this paragraph shall be construed as preventinga resident of a nursing facility (or a

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5841person acting on the residents behalf) from

2submitting a complaint in a manner or format3other than by using the standardized complaint4form developed under subsection (f)(11) (includingsubmitting a complaint orally).6(E) GOOD FAITH DEFINED.For pur7poses of this paragraph, an individual shall be8deemed to be acting in good faith with respect

9to the filing of a complaint if the individual reasonablybelieves 11(i) the information reported or dis12closed in the complaint is true; and13(ii) the violation of this title has oc14curred or may occur in relation to such information..16(c) EFFECTIVE DATE.The amendments made by17this section shall take effect 1 year after the date of the

18enactment of this Act.19SEC. 1416. ENSURING STAFFING ACCOUNTABILITY.(a) SKILLED NURSING FACILITIES.Section211819(b)(8) of the Social Security Act (42 U.S.C. 1395i 223(b)(8)) is amended by adding at the end the following23new subparagraph:24(C) SUBMISSION OF STAFFING INFORMATIONBASED ON PAYROLL DATA IN A UNIFORM

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5851FORMAT.Beginning not later than 2 years

2after the date of the enactment of this subpara3graph, and after consulting with State long-4term care ombudsman programs, consumer ad5vocacy groups, provider stakeholder groups, em6ployees and their representatives, and other7parties the Secretary deems appropriate, the8Secretary shall require a skilled nursing facility9

to electronically submit to the Secretary direct10care staffing information (including information11with respect to agency and contract staff) based12on payroll and other verifiable and auditable13data in a uniform format (according to speci14fications established by the Secretary in con15sultation with such programs, groups, and par16ties). Such specifications shall require that the17

information submitted under the preceding sen18tence 19(i) specify the category of work a20certified employee performs (such as21whether the employee is a registered nurse,22licensed practical nurse, licensed vocational23nurse, certified nursing assistant, thera24pist, or other medical personnel);

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5861(ii) include resident census data and

2information on resident case mix;3(iii) include a regular reporting4schedule; and(iv) include information on employee6turnover and tenure and on the hours of7care provided by each category of certified8

employees referenced in clause (i) per resi9dent per day.Nothing in this subparagraph shall be con11strued as preventing the Secretary from requir12ing submission of such information with respect13to specific categories, such as nursing staff, be14fore other categories of certified employees. Informationunder this subparagraph with respect16to agency and contract staff shall be kept sepa17rate from information on employee staffing..18

(b) NURSING FACILITIES.Section 1919(b)(8) of the19Social Security Act (42 U.S.C. 1396r(b)(8)) is amendedby adding at the end the following new subparagraph:21(C) SUBMISSION OF STAFFING INFORMA22TION BASED ON PAYROLL DATA IN A UNIFORM23FORMAT.Beginning not later than 2 years24after the date of the enactment of this subparagraph,and after consulting with State long-

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5871term care ombudsman programs, consumer ad2

vocacy groups, provider stakeholder groups, em3ployees and their representatives, and other4parties the Secretary deems appropriate, the5Secretary shall require a nursing facility to elec6tronically submit to the Secretary direct care7staffing information (including information with8respect to agency and contract staff) based on9

payroll and other verifiable and auditable data10in a uniform format (according to specifications11established by the Secretary in consultation12with such programs, groups, and parties). Such13specifications shall require that the information14submitted under the preceding sentence 15(i) specify the category of work a

16certified employee performs (such as17whether the employee is a registered nurse,18licensed practical nurse, licensed vocational19nurse, certified nursing assistant, thera20pist, or other medical personnel);21(ii) include resident census data and22information on resident case mix;23(iii) include a regular reporting24schedule; and

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5881(iv) include information on employee

2turnover and tenure and on the hours of3care provided by each category of certified4employees referenced in clause (i) per residentper day.6Nothing in this subparagraph shall be con7strued as preventing the Secretary from requir8ing submission of such information with respect9

to specific categories, such as nursing staff, beforeother categories of certified employees. In11formation under this subparagraph with respect12to agency and contract staff shall be kept sepa13rate from information on employee staffing..14PART 2TARGETING ENFORCEMENTSEC. 1421. CIVIL MONEY PENALTIES.16(a) SKILLED NURSING FACILITIES. 17(1) IN GENERAL.Section 1819(h)(2)(B)(ii) of

18the Social Security Act (42 U.S.C. 1395i 193(h)(2)(B)(ii)) is amended to read as follows:(ii) AUTHORITY WITH RESPECT TO21CIVIL MONEY PENALTIES. 22(I) AMOUNT.The Secretary23may impose a civil money penalty in24the applicable per instance or per dayamount (as defined in subclause (II)

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5891and (III)) for each day or instance,

2respectively, of noncompliance (as de3termined appropriate by the Sec4retary).5(II) APPLICABLE PER INSTANCE6AMOUNT.In this clause, the term7applicable per instance amount 8means

9(aa) in the case where the10deficiency is found to be a direct11proximate cause of death of a12resident of the facility, an13amount not to exceed $100,000.14(bb) in each case of a defi15ciency where the facility is cited

16for actual harm or immediate17jeopardy, an amount not less18than $3,050 and not more than19$25,000; and20(cc) in each case of any21other deficiency, an amount not22less than $250 and not to exceed23$3050.

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5901(III) APPLICABLE PER DAY

2AMOUNT.In this clause, the term3applicable per day amount means 4(aa) in each case of a defi5ciency where the facility is cited6for actual harm or immediate7jeopardy, an amount not less8

than $3,050 and not more than9$25,000 and10(bb) in each case of any11other deficiency, an amount not12less than $250 and not to exceed13$3,050.14(IV) REDUCTION OF CIVIL

15MONEY PENALTIES IN CERTAIN CIR16CUMSTANCES.Subject to subclauses17(V) and (VI), in the case where a fa18cility self-reports and promptly cor19rects a deficiency for which a penalty20was imposed under this clause not21later than 10 calendar days after the22date of such imposition, the Secretary23may reduce the amount of the penalty24imposed by not more than 50 percent.

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5911(V) PROHIBITION ON REDUC2

TION FOR CERTAIN DEFICIENCIES. 3(aa) REPEAT DEFI4CIENCIES.The Secretary maynot reduce under subclause (IV)6the amount of a penalty if the7deficiency is a repeat deficiency.8(bb) CERTAIN OTHER DE9FICIENCIES.The Secretary may

not reduce under subclause (IV)11the amount of a penalty if the12penalty is imposed for a defi13ciency described in subclause14(II)(aa) or (III)(aa) and the actualharm or widespread harm16immediately jeopardizes the17health or safety of a resident or

18residents of the facility, or if the19penalty is imposed for a deficiencydescribed in subclause21(II)(bb).22(VI) LIMITATION ON AGGRE23GATE REDUCTIONS.The aggregate24reduction in a penalty under sub-clause (IV) may not exceed 35 percent

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5921on the basis of self-reporting, on the

2basis of a waiver or an appeal (as pro3vided for under regulations under sec4tion 488.436 of title 42, Code of Fed5eral Regulations), or on the basis of6both.7(VII) COLLECTION OF CIVIL8MONEY PENALTIES.In the case of a9

civil money penalty imposed under10this clause, the Secretary 11(aa) subject to item (cc),12shall, not later than 30 days13after the date of imposition of14the penalty, provide the oppor15tunity for the facility to partici16pate in an independent informal

17dispute resolution process which18generates a written record prior19to the collection of such penalty,20but such opportunity shall not af21fect the responsibility of the22State survey agency for making23final recommendations for such24penalties;

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5931(bb) in the case where the

2penalty is imposed for each day3of noncompliance, shall not im4pose a penalty for any day during5the period beginning on the ini6tial day of the imposition of the7penalty and ending on the day on8which the informal dispute reso9

lution process under item (aa) is10completed;11(cc) may provide for the12collection of such civil money13penalty and the placement of14such amounts collected in an es15crow account under the direction16

of the Secretary on the earlier of17the date on which the informal18dispute resolution process under19item (aa) is completed or the20date that is 90 days after the21date of the imposition of the pen22alty;23(dd) may provide that such24amounts collected are kept in

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5941such account pending the resolu2

tion of any subsequent appeals;3(ee) in the case where the4facility successfully appeals thepenalty, may provide for the re6turn of such amounts collected7(plus interest) to the facility; and8(ff) in the case where all9

such appeals are unsuccessful,may provide that some portion of11such amounts collected may be12used to support activities that13benefit residents, including as14sistance to support and protectresidents of a facility that closes16(voluntarily or involuntarily) or is17

decertified (including offsetting18costs of relocating residents to19home and community-based settingsor another facility), projects21that support resident and family22councils and other consumer in23volvement in assuring quality24care in facilities, and facility improvementinitiatives approved by

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5951the Secretary (including joint

2training of facility staff and sur3veyors, technical assistance for4facilities under quality assurance5programs, the appointment of6temporary management, and7other activities approved by the8

Secretary).9(VIII) PROCEDURE.The pro10visions of section 1128A (other than11subsections (a) and (b) and except to12the extent that such provisions require13a hearing prior to the imposition of a14civil money penalty) shall apply to a15

civil money penalty under this clause16in the same manner as such provi17sions apply to a penalty or proceeding18under section 1128A(a)..19(2) CONFORMING AMENDMENT.The second20sentence of section 1819(h)(5) of the Social Security21Act (42 U.S.C. 1395i3(h)(5)) is amended by insert22ing (ii),after (i),.23(b) NURSING FACILITIES. 24(1) PENALTIES IMPOSED BY THE STATE.

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5961(A) IN GENERAL.Section 1919(h)(2) of

2the Social Security Act (42 U.S.C. 1396r(h)(2))3is amended 4(i) in subparagraph (A)(ii), by strikingthe first sentence and inserting the fol6lowing: A civil money penalty in accord7ance with subparagraph (G).; and8(ii) by adding at the end the following9

new subparagraph:(G) CIVIL MONEY PENALTIES. 11(i) IN GENERAL.The State may12impose a civil money penalty under sub13paragraph (A)(ii) in the applicable per in14stance or per day amount (as defined insubclause (II) and (III)) for each day or16instance, respectively, of noncompliance (as17determined appropriate by the Secretary).

18(ii) APPLICABLE PER INSTANCE19AMOUNT.In this subparagraph, the termapplicable per instance amount means 21(I) in the case where the defi22ciency is found to be a direct proxi23mate cause of death of a resident of24the facility, an amount not to exceed$100,000.

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5971(II) in each case of a deficiency

2where the facility is cited for actual3harm or immediate jeopardy, an4amount not less than $3,050 and notmore than $25,000; and6(III) in each case of any other7deficiency, an amount not less than8

$250 and not to exceed $3050.9(iii) APPLICABLE PER DAYAMOUNT.In this subparagraph, the term11applicable per day amount means 12(I) in each case of a deficiency13where the facility is cited for actual14harm or immediate jeopardy, anamount not less than $3,050 and not

16more than $25,000 and17(II) in each case of any other18deficiency, an amount not less than19$250 and not to exceed $3,050.(iv) REDUCTION OF CIVIL MONEY21PENALTIES IN CERTAIN CIR22CUMSTANCES.Subject to clauses (v) and23(vi), in the case where a facility self-re24ports and promptly corrects a deficiencyfor which a penalty was imposed under

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5981subparagraph (A)(ii) not later than 10 cal2

endar days after the date of such imposi3tion, the State may reduce the amount of4the penalty imposed by not more than 50percent.6(v) PROHIBITION ON REDUCTION7FOR CERTAIN DEFICIENCIES. 8(I) REPEAT DEFICIENCIES. 9

The State may not reduce underclause (iv) the amount of a penalty if11the State had reduced a penalty im12posed on the facility in the preceding13year under such clause with respect to14a repeat deficiency.(II) CERTAIN OTHER DEFI16CIENCIES.The State may not reduce17under clause (iv) the amount of a pen18

alty if the penalty is imposed for a de19ficiency described in clause (ii)(II) or(iii)(I) and the actual harm or wide21spread harm that immediately jeop22ardizes the health or safety of a resi23dent or residents of the facility, or if24the penalty is imposed for a deficiencydescribed in clause (ii)(I).

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5991(III) LIMITATION ON AGGRE2

GATE REDUCTIONS.The aggregate3reduction in a penalty under clause4(iv) may not exceed 35 percent on thebasis of self-reporting, on the basis of6a waiver or an appeal (as provided for7under regulations under section8488.436 of title 42, Code of Federal

9Regulations), or on the basis of both.(iv) COLLECTION OF CIVIL MONEY11PENALTIES.In the case of a civil money12penalty imposed under subparagraph13(A)(ii), the State 14(I) subject to subclause (III),shall, not later than 30 days after the16

date of imposition of the penalty, pro17vide the opportunity for the facility to18participate in an independent informal19dispute resolution process which generatesa written record prior to the21collection of such penalty, but such22opportunity shall not affect the re23sponsibility of the State survey agency24for making final recommendations forsuch penalties;

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6001(II) in the case where the pen2

alty is imposed for each day of non3compliance, shall not impose a penalty4for any day during the period beginningon the initial day of the imposi6tion of the penalty and ending on the7day on which the informal dispute res8olution process under subclause (I) is9completed;(III) may provide for the collec11

tion of such civil money penalty and12the placement of such amounts col13lected in an escrow account under the14direction of the State on the earlier ofthe date on which the informal dis16pute resolution process under sub17clause (I) is completed or the date18that is 90 days after the date of the19imposition of the penalty;

(IV) may provide that such21amounts collected are kept in such ac22count pending the resolution of any23subsequent appeals;24(V) in the case where the facilitysuccessfully appeals the penalty,

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6011may provide for the return of such

2amounts collected (plus interest) to3the facility; and4(VI) in the case where all suchappeals are unsuccessful, may provide6that such funds collected shall be used7for the purposes described in the sec8ond sentence of subparagraph

9(A)(ii)..(B) CONFORMING AMENDMENT.The sec11ond sentence of section 1919(h)(2)(A)(ii) of the12Social Security Act (42 U.S.C.131396r(h)(2)(A)(ii)) is amended by inserting be14fore the period at the end the following: , andsome portion of such funds may be used to sup16port activities that benefit residents, including17assistance to support and protect residents of a

18facility that closes (voluntarily or involuntarily)19or is decertified (including offsetting costs of relocatingresidents to home and community-21based settings or another facility), projects that22support resident and family councils and other23consumer involvement in assuring quality care24in facilities, and facility improvement initiativesapproved by the Secretary (including joint

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6021training of facility staff and surveyors, pro2

viding technical assistance to facilities under3quality assurance programs, the appointment of4temporary management, and other activities approvedby the Secretary).6(2) PENALTIES IMPOSED BY THE SEC7RETARY. 8(A) IN GENERAL.Section9

1919(h)(3)(C)(ii) of the Social Security Act (42U.S.C. 1396r(h)(3)(C)) is amended to read as11follows:12(ii) AUTHORITY WITH RESPECT TO13CIVIL MONEY PENALTIES. 14(I) AMOUNT.Subject to sub-clause (II), the Secretary may impose16a civil money penalty in an amount

17not to exceed $10,000 for each day or18each instance of noncompliance (as19determined appropriate by the Secretary).21(II) REDUCTION OF CIVIL22MONEY PENALTIES IN CERTAIN CIR23CUMSTANCES.Subject to subclause24(III), in the case where a facility self-reports and promptly corrects a defi

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6031ciency for which a penalty was im2

posed under this clause not later than310 calendar days after the date of4such imposition, the Secretary mayreduce the amount of the penalty im6posed by not more than 50 percent.7(III) PROHIBITION ON REDUC8TION FOR REPEAT DEFICIENCIES. 9The Secretary may not reduce the

amount of a penalty under subclause11(II) if the Secretary had reduced a12penalty imposed on the facility in the13preceding year under such subclause14with respect to a repeat deficiency.(IV) COLLECTION OF CIVIL16MONEY PENALTIES.In the case of a17

civil money penalty imposed under18this clause, the Secretary 19(aa) subject to item (bb),shall, not later than 30 days21after the date of imposition of22the penalty, provide the oppor23tunity for the facility to partici24pate in an independent informaldispute resolution process which

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6041generates a written record prior

2to the collection of such penalty;3(bb) in the case where the4penalty is imposed for each day5of noncompliance, shall not im6pose a penalty for any day during7the period beginning on the ini8tial day of the imposition of the

9penalty and ending on the day on10which the informal dispute reso11lution process under item (aa) is12completed;13(cc) may provide for the14collection of such civil money15penalty and the placement of

16such amounts collected in an es17crow account under the direction18of the Secretary on the earlier of19the date on which the informal20dispute resolution process under21item (aa) is completed or the22date that is 90 days after the23date of the imposition of the pen24alty;

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6051(dd) may provide that such

2amounts collected are kept in3such account pending the resolu4tion of any subsequent appeals;(ee) in the case where the6facility successfully appeals the7penalty, may provide for the re8turn of such amounts collected9

(plus interest) to the facility; and(ff) in the case where all11such appeals are unsuccessful,12may provide that some portion of13such amounts collected may be14used to support activities thatbenefit residents, including as16sistance to support and protect17

residents of a facility that closes18(voluntarily or involuntarily) or is19decertified (including offsettingcosts of relocating residents to21home and community-based set22tings or another facility), projects23that support resident and family24councils and other consumer involvementin assuring quality

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6061care in facilities, and facility im2

provement initiatives approved by3the Secretary (including joint4training of facility staff and surveyors,technical assistance for6facilities under quality assurance7programs, the appointment of8temporary management, and

9other activities approved by theSecretary).11(V) PROCEDURE.The provi12sions of section 1128A (other than13subsections (a) and (b) and except to14the extent that such provisions requirea hearing prior to the imposition of a16civil money penalty) shall apply to a

17civil money penalty under this clause18in the same manner as such provi19sions apply to a penalty or proceedingunder section 1128A(a)..21(B) CONFORMING AMENDMENT.Section221919(h)(8) of the Social Security Act (4223U.S.C. 1396r(h)(5)(8)) is amended by inserting24and in paragraph (3)(C)(ii) after paragraph(2)(A).

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6071(c) EFFECTIVE DATE.The amendments made by

2this section shall take effect 1 year after the date of the3enactment of this Act.4SEC. 1422. NATIONAL INDEPENDENT MONITOR PILOT PRO5GRAM.6(a) ESTABLISHMENT. 7(1) IN GENERAL.The Secretary, in consulta8tion with the Inspector General of the Department

9of Health and Human Services, shall establish a10pilot program (in this section referred to as the11pilot program) to develop, test, and implement use12of an independent monitor to oversee interstate and13large intrastate chains of skilled nursing facilities14and nursing facilities.15

(2) SELECTION.The Secretary shall select16chains of skilled nursing facilities and nursing facili17ties described in paragraph (1) to participate in the18pilot program from among those chains that submit19an application to the Secretary at such time, in such20manner, and containing such information as the Sec21retary may require.22(3) DURATION.The Secretary shall conduct23the pilot program for a two-year period.

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608

1(4) IMPLEMENTATION.The Secretary shall2implement the pilot program not later than one year3after the date of the enactment of this Act.4(b) REQUIREMENTS.The Secretary shall evaluatechains selected to participate in the pilot program based6on criteria selected by the Secretary, including where evi7dence suggests that one or more facilities of the chain are

8experiencing serious safety and quality of care problems.9Such criteria may include the evaluation of a chain thatincludes one or more facilities participating in the Special11Focus Facility program (or a successor program) or one12or more facilities with a record of repeated serious safety13and quality of care deficiencies.14(c) RESPONSIBILITIES OF THE INDEPENDENT MONITOR.

An independent monitor that enters into a con16tract with the Secretary to participate in the conduct of17such program shall 18(1) conduct periodic reviews and prepare root-19cause quality and deficiency analyses of a chain toassess if facilities of the chain are in compliance21with State and Federal laws and regulations applica22ble to the facilities;23(2) undertake sustained oversight of the chain,24whether publicly or privately held, to involve theowners of the chain and the principal business part-

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6091ners of such owners in facilitating compliance by fa2

cilities of the chain with State and Federal laws and3regulations applicable to the facilities;4(3) analyze the management structure, distributionof expenditures, and nurse staffing levels of fa6cilities of the chain in relation to resident census,7staff turnover rates, and tenure;8(4) report findings and recommendations with9

respect to such reviews, analyses, and oversight tothe chain and facilities of the chain, to the Secretary11and to relevant States; and12(5) publish the results of such reviews, anal13yses, and oversight.14(d) IMPLEMENTATION OF RECOMMENDATIONS. (1) RECEIPT OF FINDING BY CHAIN.Not later16than 10 days after receipt of a finding of an inde17pendent monitor under subsection (c)(4), a chain

18participating in the pilot program shall submit to19the independent monitor a report (A) outlining corrective actions the chain21will take to implement the recommendations in22such report; or23(B) indicating that the chain will not im24plement such recommendations and why it willnot do so.

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6101(2) RECEIPT OF REPORT BY INDEPENDENT

2MONITOR.Not later than 10 days after the date of3receipt of a report submitted by a chain under para4graph (1), an independent monitor shall finalize itsrecommendations and submit a report to the chain6and facilities of the chain, the Secretary, and the7State (or States) involved, as appropriate, containing8such final recommendations.

9(e) COST OF APPOINTMENT.A chain shall be responsiblefor a portion of the costs associated with the11appointment of independent monitors under the pilot pro12gram. The chain shall pay such portion to the Secretary13(in an amount and in accordance with procedures estab14lished by the Secretary).(f) WAIVER AUTHORITY.The Secretary may waive16such requirements of titles XVIII and XIX of the Social17

Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as18may be necessary for the purpose of carrying out the pilot19program.(g) AUTHORIZATION OF APPROPRIATIONS.There21are authorized to be appropriated such sums as may be22necessary to carry out this section.23(h) DEFINITIONS.In this section:24(1) FACILITY.The term facility means askilled nursing facility or a nursing facility.

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6111(2) NURSING FACILITY.The term nursing

2facility has the meaning given such term in section31919(a) of the Social Security Act (42 U.S.C.41396r(a)).5(3) SECRETARY.The term Secretary means6the Secretary of Health and Human Services, acting7through the Assistant Secretary for Planning and

8Evaluation.9(4) SKILLED NURSING FACILITY.The term10skilled nursing facility has the meaning given such11term in section 1819(a) of the Social Security Act12(42 U.S.C. 1395(a)).13(i) EVALUATION AND REPORT. 14

(1) EVALUATION.The Inspector General of15the Department of Health and Human Services shall16evaluate the pilot program. Such evaluation shall 17(A) determine whether the independent18monitor program should be established on a19permanent basis; and20(B) if the Inspector General determines21that the independent monitor program should22be established on a permanent basis, rec23ommend appropriate procedures and mecha24nisms for such establishment.

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6121(2) REPORT.Not later than 180 days after

2the completion of the pilot program, the Inspector3General shall submit to Congress and the Secretary4a report containing the results of the evaluation con5ducted under paragraph (1), together with rec6ommendations for such legislation and administra7tive action as the Inspector General determines ap8propriate.9SEC. 1423. NOTIFICATION OF FACILITY CLOSURE.

10(a) SKILLED NURSING FACILITIES. 11(1) IN GENERAL.Section 1819(c) of the So12cial Security Act (42 U.S.C. 1395i3(c)) is amended13by adding at the end the following new paragraph:14(7) NOTIFICATION OF FACILITY CLOSURE. 15(A) IN GENERAL.Any individual who is16the administrator of a skilled nursing facility

17must 18(i) submit to the Secretary, the State19long-term care ombudsman, residents of20the facility, and the legal representatives of21such residents or other responsible parties,22written notification of an impending clo23sure

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6131(I) subject to subclause (II), not

2later than the date that is 60 days3prior to the date of such closure; and4(II) in the case of a facilitywhere the Secretary terminates the fa6cilitys participation under this title,7not later than the date that the Sec8retary determines appropriate;9(ii) ensure that the facility does notadmit any new residents on or after the

11date on which such written notification is12submitted; and13(iii) include in the notice a plan for14the transfer and adequate relocation of theresidents of the facility by a specified date16prior to closure that has been approved by

17the State, including assurances that the18residents will be transferred to the most19appropriate facility or other setting interms of quality, services, and location,21taking into consideration the needs and22best interests of each resident.23(B) RELOCATION. 24(i) IN GENERAL.The State shallensure that, before a facility closes, all

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6141residents of the facility have been success2

fully relocated to another facility or an al3ternative home and community-based set4ting.(ii) CONTINUATION OF PAYMENTS6UNTIL RESIDENTS RELOCATED.The Sec7retary may, as the Secretary determines8appropriate, continue to make payments9under this title with respect to residents ofa facility that has submitted a notification

11under subparagraph (A) during the period12beginning on the date such notification is13submitted and ending on the date on which14the resident is successfully relocated..(2) CONFORMING AMENDMENTS.Section161819(h)(4) of the Social Security Act (42 U.S.C.171395i3(h)(4)) is amended

18(A) in the first sentence, by striking the19Secretary shall terminate and inserting theSecretary, subject to subsection (c)(7), shall21terminate; and22(B) in the second sentence, by striking23subsection (c)(2) and inserting paragraphs24(2) and (7) of subsection (c).(b) NURSING FACILITIES.

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615

1(1) IN GENERAL.Section 1919(c) of the So2cial Security Act (42 U.S.C. 1396r(c)) is amended3by adding at the end the following new paragraph:4(9) NOTIFICATION OF FACILITY CLOSURE. 5(A) IN GENERAL.Any individual who is6an administrator of a nursing facility must 7(i) submit to the Secretary, the State8

long-term care ombudsman, residents of9the facility, and the legal representatives of10such residents or other responsible parties,11written notification of an impending clo12sure 13(I) subject to subclause (II), not14

later than the date that is 60 days15prior to the date of such closure; and16(II) in the case of a facility17where the Secretary terminates the fa18cilitys participation under this title,19not later than the date that the Sec20retary determines appropriate;21(ii) ensure that the facility does not22admit any new residents on or after the23date on which such written notification is24submitted; and

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6161(iii) include in the notice a plan for

2the transfer and adequate relocation of the3residents of the facility by a specified date4prior to closure that has been approved bythe State, including assurances that the6residents will be transferred to the most7appropriate facility or other setting in8

terms of quality, services, and location,9taking into consideration the needs andbest interests of each resident.11(B) RELOCATION. 12(i) IN GENERAL.The State shall13ensure that, before a facility closes, all14residents of the facility have been successfullyrelocated to another facility or an al16

ternative home and community-based set17ting.18(ii) CONTINUATION OF PAYMENTS19UNTIL RESIDENTS RELOCATED.The Secretarymay, as the Secretary determines21appropriate, continue to make payments22under this title with respect to residents of23a facility that has submitted a notification24under subparagraph (A) during the periodbeginning on the date such notification is

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6171submitted and ending on the date on which

2the resident is successfully relocated..3(c) EFFECTIVE DATE.The amendments made by4this section shall take effect 1 year after the date of the5enactment of this Act.6PART 3IMPROVING STAFF TRAINING7SEC. 1431. DEMENTIA AND ABUSE PREVENTION TRAINING.

8(a) SKILLED NURSING FACILITIES.Section91819(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C.101395i3(f)(2)(A)(i)(I)) is amended by inserting (includ11ing, in the case of initial training and, if the Secretary12determines appropriate, in the case of ongoing training,13dementia management training and resident abuse preven14tion training) after curriculum.15

(b) NURSING FACILITIES.Section161919(f)(2)(A)(i)(I) of the Social Security Act (42 U.S.C.171396r(f)(2)(A)(i)(I)) is amended by inserting (including,18in the case of initial training and, if the Secretary deter19mines appropriate, in the case of ongoing training, demen20tia management training and resident abuse prevention21training) after curriculum.22(c) EFFECTIVE DATE.The amendments made by23this section shall take effect 1 year after the date of the24enactment of this Act.

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6181SEC. 1432. STUDY AND REPORT ON TRAINING REQUIRED

2FOR CERTIFIED NURSE AIDES AND SUPER3VISORY STAFF.4(a) STUDY. (1) IN GENERAL.The Secretary shall conduct6a study on the content of training for certified nurse7aides and supervisory staff of skilled nursing facili8ties and nursing facilities. The study shall include an9

analysis of the following:(A) Whether the number of initial training11hours for certified nurse aides required under12sections 1819(f)(2)(A)(i)(II) and131919(f)(2)(A)(i)(II) of the Social Security Act14(42 U.S.C. 1395i3(f)(2)(A)(i)(II);1396r(f)(2)(A)(i)(II)) should be increased from1675 and, if so, what the required number of ini17

tial training hours should be, including any rec18ommendations for the content of such training19(including training related to dementia).(B) Whether requirements for ongoing21training under such sections221819(f)(2)(A)(i)(II) and 1919(f)(2)(A)(i)(II)23should be increased from 12 hours per year, in24cluding any recommendations for the content ofsuch training.

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6191(2) CONSULTATION.In conducting the anal2

ysis under paragraph (1)(A), the Secretary shall3consult with States that, as of the date of the enact4ment of this Act, require more than 75 hours of5training for certified nurse aides.6(3) DEFINITIONS.In this section:7(A) NURSING FACILITY.The term nurs8ing facility has the meaning given such term9

in section 1919(a) of the Social Security Act10(42 U.S.C. 1396r(a)).11(B) SECRETARY.The term Secretary 12means the Secretary of Health and Human13Services, acting through the Assistant Secretary14for Planning and Evaluation.15(C) SKILLED NURSING FACILITY.The

16term skilled nursing facility has the meaning17given such term in section 1819(a) of the Social18Security Act (42 U.S.C. 1395(a)).19(b) REPORT.Not later than 2 years after the date20of the enactment of this Act, the Secretary shall submit21to Congress a report containing the results of the study22conducted under subsection (a), together with rec23ommendations for such legislation and administrative ac24tion as the Secretary determines appropriate.

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6201Subtitle CQuality Measurements

2SEC. 1441. ESTABLISHMENT OF NATIONAL PRIORITIES FOR3QUALITY IMPROVEMENT.4Title XI of the Social Security Act, as amended by5section 1401(a), is further amended by adding at the end6the following new part:7PART EQUALITY IMPROVEMENT

8ESTABLISHMENT OF NATIONAL PRIORITIES FOR9PERFORMANCE IMPROVEMENT10SEC. 1191. (a) ESTABLISHMENT OF NATIONAL PRI11ORITIES BY THE SECRETARY.The Secretary shall estab12lish and periodically update, not less frequently than tri13ennially, national priorities for performance improvement.14(b) RECOMMENDATIONS FOR NATIONAL PRIOR15ITIES.In establishing and updating national priorities16

under subsection (a), the Secretary shall solicit and con17sider recommendations from multiple outside stake18holders.19(c) CONSIDERATIONS IN SETTING NATIONAL PRI20ORITIES.With respect to such priorities, the Secretary21shall ensure that priority is given to areas in the delivery22of health care services in the United States that 23(1) contribute to a large burden of disease, in24cluding those that address the health care provided

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6211to patients with prevalent, high-cost chronic dis2

eases;3(2) have the greatest potential to decrease4morbidity and mortality in this country, includingthose that are designed to eliminate harm to pa6tients;7(3) have the greatest potential for improving8the performance, affordability, and patient-9

centeredness of health care, including those due tovariations in care;11(4) address health disparities across groups12and areas; and13(5) have the potential for rapid improvement14due to existing evidence, standards of care or otherreasons.16(d) DEFINITIONS.In this part:

17(1) CONSENSUS-BASED ENTITY.The term18consensus-based entity means an entity with a con19tract with the Secretary under section 1890.(2) QUALITY MEASURE.The term quality21measure means a national consensus standard for22measuring the performance and improvement of pop23ulation health, or of institutional providers of serv24ices, physicians, and other health care practitionersin the delivery of health care services.

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6221(e) FUNDING.

2(1) IN GENERAL.The Secretary shall provide3for the transfer, from the Federal Hospital Insur4ance Trust Fund under section 1817 and the Fed5eral Supplementary Medical Insurance Trust Fund6under section 1841 (in such proportion as the Sec7retary determines appropriate), of $2,000,000, for8the activities under this section for each of the fiscal9

years 2010 through 2014.10(2) AUTHORIZATION OF APPROPRIATIONS. 11For purposes of carrying out the provisions of this12section, in addition to funds otherwise available, out13of any funds in the Treasury not otherwise appro14priated, there are appropriated to the Secretary of15Health and Human Services $2,000,000 for each of16

the fiscal years 2010 through 2014..17SEC. 1442. DEVELOPMENT OF NEW QUALITY MEASURES;18GAO EVALUATION OF DATA COLLECTION19PROCESS FOR QUALITY MEASUREMENT.20Part E of title XI of the Social Security Act, as added21by section 1441, is amended by adding at the end the fol22lowing new sections:23SEC. 1192. DEVELOPMENT OF NEW QUALITY MEASURES.24(a) AGREEMENTS WITH QUALIFIED ENTITIES.

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623

1(1) IN GENERAL.The Secretary shall enter2into agreements with qualified entities to develop3quality measures for the delivery of health care serv4ices in the United States.(2) FORM OF AGREEMENTS.The Secretary6may carry out paragraph (1) by contract, grant, or7otherwise.

8(3) RECOMMENDATIONS OF CONSENSUS-9BASED ENTITY.In carrying out this section, theSecretary shall 11(A) seek public input; and12(B) take into consideration recommenda13tions of the consensus-based entity with a con14tract with the Secretary under section 1890(a).(b) DETERMINATION OF AREAS WHERE QUALITY16

MEASURES ARE REQUIRED.Consistent with the na17tional priorities established under this part and with the18programs administered by the Centers for Medicare &19Medicaid Services and in consultation with other relevantFederal agencies, the Secretary shall determine areas in21which quality measures for assessing health care services22in the United States are needed.23(c) DEVELOPMENT OF QUALITY MEASURES. 24(1) PATIENT-CENTERED AND POPULATION-BASED MEASURES.Quality measures developed

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6241under agreements under subsection (a) shall be de2

signed 3(A) to assess outcomes and functional4status of patients;5(B) to assess the continuity and coordina6tion of care and care transitions for patients7across providers and health care settings, in8cluding end of life care;9(C) to assess patient experience and pa10tient engagement;

11(D) to assess the safety, effectiveness,12and timeliness of care;13(E) to assess health disparities including14those associated with individual race, ethnicity,15age, gender, place of residence or language;16

(F) to assess the efficiency and resource17use in the provision of care;18(G) to the extent feasible, to be collected19as part of health information technologies sup20porting better delivery of health care services;21(H) to be available free of charge to users22for the use of such measures; and23(I) to assess delivery of health care serv24ices to individuals regardless of age.

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6251(2) AVAILABILITY OF MEASURES.The Sec2

retary shall make quality measures developed under3this section available to the public.4(3) TESTING OF PROPOSED MEASURES.TheSecretary may use amounts made available under6subsection (f) to fund the testing of proposed quality7measures by qualified entities. Testing funded under8this paragraph shall include testing of the feasibility

9and usability of proposed measures.(4) UPDATING OF ENDORSED MEASURES. 11The Secretary may use amounts made available12under subsection (f) to fund the updating (and test13ing, if applicable) by consensus-based entities of14quality measures that have been previously endorsedby such an entity as new evidence is developed, in16a manner consistent with section 1890(b)(3).

17(d) QUALIFIED ENTITIES.Before entering into18agreements with a qualified entity, the Secretary shall en19sure that the entity is a public, nonprofit or academic institutionwith technical expertise in the area of health21quality measurement.22(e) APPLICATION FOR GRANT.A grant may be23made under this section only if an application for the24grant is submitted to the Secretary and the applicationis in such form, is made in such manner, and contains

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6261such agreements, assurances, and information as the Sec2

retary determines to be necessary to carry out this section.3(f) FUNDING. 4(1) IN GENERAL.The Secretary shall provide5for the transfer, from the Federal Hospital Insur6ance Trust Fund under section 1817 and the Fed7eral Supplementary Medical Insurance Trust Fund8under section 1841 (in such proportion as the Sec9retary determines appropriate), of $25,000,000, to

10the Secretary for purposes of carrying out this sec11tion for each of the fiscal years 2010 through 2014.12(2) AUTHORIZATION OF APPROPRIATIONS. 13For purposes of carrying out the provisions of this14section, in addition to funds otherwise available, out15of any funds in the Treasury not otherwise appro16priated, there are appropriated to the Secretary of17

Health and Human Services $25,000,000 for each18of the fiscal years 2010 through 2014.19SEC. 1193. GAO EVALUATION OF DATA COLLECTION PROC20ESS FOR QUALITY MEASUREMENT.21(a) GAO EVALUATIONS.The Comptroller General22of the United States shall conduct periodic evaluations of23the implementation of the data collection processes for24quality measures used by the Secretary.

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6271(b) CONSIDERATIONS.In carrying out the evalua2

tion under subsection (a), the Comptroller General shall3determine 4(1) whether the system for the collection of5data for quality measures provides for validation of6data as relevant and scientifically credible;7(2) whether data collection efforts under the8

system use the most efficient and cost-effective9means in a manner that minimizes administrative10burden on persons required to collect data and that11adequately protects the privacy of patients personal12health information and provides data security;13(3) whether standards under the system pro14vide for an appropriate opportunity for physicians15

and other clinicians and institutional providers of16services to review and correct findings; and17(4) the extent to which quality measures are18consistent with section 1192(c)(1) or result in direct19or indirect costs to users of such measures.20(c) REPORT.The Comptroller General shall sub21mit reports to Congress and to the Secretary containing22a description of the findings and conclusions of the results23of each such evaluation..

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6281SEC. 1443. MULTI-STAKEHOLDER PRE-RULEMAKING INPUT

2INTO SELECTION OF QUALITY MEASURES.3Section 1808 of the Social Security Act (42 U.S.C.41395b9) is amended by adding at the end the followingnew subsection:6(d) MULTI-STAKEHOLDER PRE-RULEMAKING7INPUT INTO SELECTION OF QUALITY MEASURES. 8(1) LIST OF MEASURES.

Not later than De9cember 1 before each year (beginning with 2011),

the Secretary shall make public a list of measures11being considered for selection for quality measure12ment by the Secretary in rulemaking with respect to13payment systems under this title beginning in the14payment year beginning in such year and for paymentsystems beginning in the calendar year fol16lowing such year, as the case may be.17

(2) CONSULTATION ON SELECTION OF EN18DORSED QUALITY MEASURES.A consensus-based19entity that has entered into a contract under section1890 shall, as part of such contract, convene multi-21stakeholder groups to provide recommendations on22the selection of individual or composite quality meas23ures, for use in reporting performance information24to the public or for use in public health care programs.

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6291(3) MULTI-STAKEHOLDER INPUT.Not later

2than February 1 of each year (beginning with32011), the consensus-based entity described in para4graph (2) shall transmit to the Secretary the recommendationsof multi-stakeholder groups provided6under paragraph (2). Such recommendations shall7be included in the transmissions the consensus-based8entity makes to the Secretary under the contract

9provided for under section 1890.(4) REQUIREMENT FOR TRANSPARENCY IN11PROCESS. 12(A) IN GENERAL.In convening multi-13stakeholder groups under paragraph (2) with14respect to the selection of quality measures, theconsensus-based entity described in such para16graph shall provide for an open and transparent

17process for the activities conducted pursuant to18such convening.19(B) SELECTION OF ORGANIZATIONS PARTICIPATINGIN MULTI-STAKEHOLDER21GROUPS.The process under paragraph (2)22shall ensure that the selection of representatives23of multi-stakeholder groups includes provision24for public nominations for, and the opportunityfor public comment on, such selection.

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6301(5) USE OF INPUT.The respective proposed

2rule shall contain a summary of the recommenda3tions made by the multi-stakeholder groups under4paragraph (2), as well as other comments received5regarding the proposed measures, and the extent to6which such proposed rule follows such recommenda7tions and the rationale for not following such rec8ommendations.9(6) MULTI-STAKEHOLDER GROUPS.

For pur10poses of this subsection, the term multi-stakeholder

11groups means, with respect to a quality measure, a12voluntary collaborative of organizations representing13persons interested in or affected by the use of such14quality measure, such as the following:15(A) Hospitals and other institutional pro16viders.

17(B) Physicians.18(C) Health care quality alliances.19(D) Nurses and other health care practi20tioners.21(E) Health plans.22(F) Patient advocates and consumer23groups.24(G) Employers.

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6311(H) Public and private purchasers of

2health care items and services.3(I) Labor organizations.4(J) Relevant departments or agencies ofthe United States.6(K) Biopharmaceutical companies and7manufacturers of medical devices.8(L) Licensing, credentialing, and accred9iting bodies.

(7) FUNDING. 11(A) IN GENERAL.The Secretary shall12provide for the transfer, from the Federal Hos13pital Insurance Trust Fund under section 181714and the Federal Supplementary Medical InsuranceTrust Fund under section 1841 (in such16proportion as the Secretary determines appro17

priate), of $1,000,000, to the Secretary for pur18poses of carrying out this subsection for each of19the fiscal years 2010 through 2014.(B) AUTHORIZATION OF APPROPRIA21TIONS.For purposes of carrying out the provi22sions of this subsection, in addition to funds23otherwise available, out of any funds in the24Treasury not otherwise appropriated, there areappropriated to the Secretary of Health and

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6321Human Services $1,000,000 for each of the fis2

cal years 2010 through 2014..3SEC. 1444. APPLICATION OF QUALITY MEASURES.4(a) INPATIENT HOSPITAL SERVICES.Section1886(b)(3)(B) of such Act (42 U.S.C. 1395ww(b)(3)(B))6is amended by adding at the end the following new clause:7(x)(I) Subject to subclause (II), for purposes of re8porting data on quality measures for inpatient hospital9

services furnished during fiscal year 2012 and each subsequentfiscal year, the quality measures specified under11clause (viii) shall be measures selected by the Secretary12from measures that have been endorsed by the entity with13a contract with the Secretary under section 1890(a).14(II) In the case of a specified area or medical topicdetermined appropriate by the Secretary for which a fea16sible and practical quality measure has not been endorsed17

by the entity with a contract under section 1890(a), the18Secretary may specify a measure that is not so endorsed19as long as due consideration is given to measures thathave been endorsed or adopted by a consensus organiza21tion identified by the Secretary. The Secretary shall sub22mit such a non-endorsed measure to the entity for consid23eration for endorsement. If the entity considers but does24not endorse such a measure and if the Secretary does notphase-out use of such measure, the Secretary shall include

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6331the rationale for continued use of such a measure in rule2

making..3(b) OUTPATIENT HOSPITAL SERVICES.Section41833(t)(17) of such Act (42 U.S.C. 1395l(t)(17)) isamended by adding at the end the following new subpara6graph:7(F) USE OF ENDORSED QUALITY MEAS8URES.The provisions of clause (x) of section91886(b)(3)(C) shall apply to quality measures

for covered OPD services under this paragraph11in the same manner as such provisions apply to12quality measures for inpatient hospital serv13ices..14(c) PHYSICIANS SERVICES.Section1848(k)(2)(C)(ii) of such Act (42 U.S.C. 1395w-164(k)(2)(C)(ii)) is amended by adding at the end the fol17lowing: The Secretary shall submit such a non-endorsed18

measure to the entity for consideration for endorsement.19If the entity considers but does not endorse such a measureand if the Secretary does not phase-out use of such21measure, the Secretary shall include the rationale for con22tinued use of such a measure in rulemaking...23(d) RENAL DIALYSIS SERVICES.Section241881(h)(2)(B)(ii) of such Act (42 U.S.C.1395rr(h)(2)(B)(ii)) is amended by adding at the end the

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6341following: The Secretary shall submit such a non-en2

dorsed measure to the entity for consideration for endorse3ment. If the entity considers but does not endorse such4a measure and if the Secretary does not phase-out use5of such measure, the Secretary shall include the rationale6for continued use of such a measure in rulemaking..7(e) ENDORSEMENT OF STANDARDS.Section81890(b)(2) of the Social Security Act (42 U.S.C.

91395aaa(b)(2)) is amended by adding after and below sub10paragraph (B) the following:11 If the entity does not endorse a measure, such en12tity shall explain the reasons and provide sugges13tions about changes to such measure that might14make it a potentially endorsable measure. .15(f) EFFECTIVE DATE.Except as otherwise pro16vided, the amendments made by this section shall apply17

to quality measures applied for payment years beginning18with 2012 or fiscal year 2012, as the case may be.19SEC. 1445. CONSENSUS-BASED ENTITY FUNDING.20Section 1890(d) of the Social Security Act (42 U.S.C.211395aaa(d)) is amended by striking for each of fiscal22years 2009 through 2012 and inserting for fiscal year232009, and $12,000,000 for each of the fiscal years 201024through 2012.

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6351Subtitle DPhysician Payments

2Sunshine Provision3SEC. 1451. REPORTS ON FINANCIAL RELATIONSHIPS BE4TWEEN MANUFACTURERS AND DISTRIBUTORSOF COVERED DRUGS, DEVICES,6BIOLOGICALS, OR MEDICAL SUPPLIES7UNDER MEDICARE, MEDICAID, OR CHIP AND8PHYSICIANS AND OTHER HEALTH CARE ENTI9

TIES AND BETWEEN PHYSICIANS AND OTHERHEALTH CARE ENTITIES.11(a) IN GENERAL.Part A of title XI of the Social12Security Act (42 U.S.C. 1301 et seq.), as amended by sec13tion 1631(a), is further amended by inserting after section141128G the following new section:SEC. 1128H. FINANCIAL REPORTS ON PHYSICIANS FINAN16CIAL RELATIONSHIPS WITH MANUFACTUR17ERS AND DISTRIBUTORS OF COVERED18

DRUGS, DEVICES, BIOLOGICALS, OR MEDICAL19SUPPLIES UNDER MEDICARE, MEDICAID, ORCHIP AND WITH ENTITIES THAT BILL FOR21SERVICES UNDER MEDICARE.22(a) REPORTING OF PAYMENTS OR OTHER TRANS23FERS OF VALUE. 24(1) IN GENERAL.Except as provided in thissubsection, not later than March 31, 2011 and an-

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6361nually thereafter, each applicable manufacturer or

2distributor that provides a payment or other transfer3of value to a covered recipient, or to an entity or in4dividual at the request of or designated on behalf ofa covered recipient, shall submit to the Secretary, in6such electronic form as the Secretary shall require,7the following information with respect to the pre8ceding calendar year:9(A) With respect to the covered recipient,the recipients name, business address, physi11

cian specialty, and national provider identifier.12(B) With respect to the payment or other13transfer of value, other than a drug sample 14(i) its value and date;(ii) the name of the related drug, de16vice, or supply, if available; and17(iii) a description of its form, indi18

cated (as appropriate for all that apply)19as (I) cash or a cash equivalent;21(II) in-kind items or services;22(III) stock, a stock option, or23any other ownership interest, divi24dend, profit, or other return on investment;or

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6371(IV) any other form (as defined

2by the Secretary).3(C) With respect to a drug sample, the4name, number, date, and dosage units of thesample.6(2) AGGREGATE REPORTING.Information7submitted by an applicable manufacturer or dis8tributor under paragraph (1) shall include the ag9

gregate amount of all payments or other transfers ofvalue provided by the manufacturer or distributor to11covered recipients (and to entities or individuals at12the request of or designated on behalf of a covered13recipient) during the year involved, including all pay14ments and transfers of value regardless of whethersuch payments or transfer of value were individually16disclosed.17

(3) SPECIAL RULE FOR CERTAIN PAYMENTS18OR OTHER TRANSFERS OF VALUE.In the case19where an applicable manufacturer or distributor providesa payment or other transfer of value to an en21tity or individual at the request of or designated on22behalf of a covered recipient, the manufacturer or23distributor shall disclose that payment or other24transfer of value under the name of the covered recipient.

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638

1(4) DELAYED REPORTING FOR PAYMENTS2MADE PURSUANT TO PRODUCT DEVELOPMENT3AGREEMENTS.In the case of a payment or other4transfer of value made to a covered recipient by anapplicable manufacturer or distributor pursuant to a6product development agreement for services fur7nished in connection with the development of a new

8drug, device, biological, or medical supply, the appli9cable manufacturer or distributor may report thevalue and recipient of such payment or other trans11fer of value in the first reporting period under this12subsection in the next reporting deadline after the13earlier of the following:14(A) The date of the approval or clearanceof the covered drug, device, biological, or med16ical supply by the Food and Drug Administra17

tion.18(B) Two calendar years after the date19such payment or other transfer of value wasmade.21(5) DELAYED REPORTING FOR PAYMENTS22MADE PURSUANT TO CLINICAL INVESTIGATIONS.In23the case of a payment or other transfer of value24made to a covered recipient by an applicable manufactureror distributor in connection with a clinical

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6391investigation regarding a new drug, device, biologi2

cal, or medical supply, the applicable manufacturer3or distributor may report as required under this sec4tion in the next reporting period under this subsectionafter the earlier of the following:6(A) The date that the clinical investiga7tion is registered on the website maintained by8the National Institutes of Health pursuant to9section 671 of the Food and Drug Administration

Amendments Act of 2007.11(B) Two calendar years after the date12such payment or other transfer of value was13made.14(6) CONFIDENTIALITY.Information describedin paragraph (4) or (5) shall be considered16confidential and shall not be subject to disclosure17

under section 552 of title 5, United States Code, or18any other similar Federal, State, or local law, until19or after the date on which the information is madeavailable to the public under such paragraph.21(b) REPORTING OF OWNERSHIP INTEREST BY PHY22SICIANS IN HOSPITALS AND OTHER ENTITIES THAT BILL23MEDICARE.Not later than March 31 of each year (be24ginning with 2011), each hospital or other health care entity(not including a Medicare Advantage organization)

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6401that bills the Secretary under part A or part B of title

2XVIII for services shall report on the ownership shares3(other than ownership shares described in section 1877(c))4of each physician who, directly or indirectly, owns an interestin the entity. In this subsection, the term physician 6includes a physicians immediate family members (as de7fined for purposes of section 1877(a)).8(c) PUBLIC AVAILABILITY.

9(1) IN GENERAL.The Secretary shall establishprocedures to ensure that, not later than Sep11tember 30, 2011, and on June 30 of each year be12ginning thereafter, the information submitted under13subsections (a) and (b), other than information re14gard drug samples, with respect to the precedingcalendar year is made available through an Internet16website that 17(A) is searchable and is in a format that

18is clear and understandable;19(B) contains information that is presentedby the name of the applicable manufac21turer or distributor, the name of the covered re22cipient, the business address of the covered re23cipient, the specialty (if applicable) of the cov24ered recipient, the value of the payment orother transfer of value, the date on which the

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6411payment or other transfer of value was provided

2to the covered recipient, the form of the pay3ment or other transfer of value, indicated (as4appropriate) under subsection (a)(1)(B)(ii), the5nature of the payment or other transfer of6value, indicated (as appropriate) under sub7section (a)(1)(B)(iii), and the name of the cov8ered drug, device, biological, or medical supply,9

as applicable;10(C) contains information that is able to11be easily aggregated and downloaded;12(D) contains a description of any enforce13ment actions taken to carry out this section, in14cluding any penalties imposed under subsection15(d), during the preceding year;16(E) contains background information on

17industry-physician relationships;18(F) in the case of information submitted19with respect to a payment or other transfer of20value described in subsection (a)(5), lists such21information separately from the other informa22tion submitted under subsection (a) and des23ignates such separately listed information as24funding for clinical research;

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6421(G) contains any other information the

2Secretary determines would be helpful to the3average consumer; and4(H) provides the covered recipient an opportunityto submit corrections to the informa6tion made available to the public with respect to7the covered recipient.8(2) ACCURACY OF REPORTING.The accuracy

9of the information that is submitted under subsections(a) and (b) and made available under para11graph (1) shall be the responsibility of the applicable12manufacturer or distributor of a covered drug, de13vice, biological, or medical supply reporting under14subsection (a) or hospital or other health care entityreporting physician ownership under subsection (b).16The Secretary shall establish procedures to ensure17

that the covered recipient is provided with an oppor18tunity to submit corrections to the manufacturer,19distributor, hospital, or other entity reporting undersubsection (a) or (b) with regard to information21made public with respect to the covered recipient22and, under such procedures, the corrections shall be23transmitted to the Secretary.24(3) SPECIAL RULE FOR DRUG SAMPLES.Informationrelating to drug samples provided under

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6431subsection (a) shall not be made available to the

2public by the Secretary but may be made available3outside the Department of Health and Human Serv4ices by the Secretary for research or legitimate businesspurposes pursuant to data use agreements.6(4) SPECIAL RULE FOR NATIONAL PROVIDER7IDENTIFIERS.Information relating to national pro8vider identifiers provided under subsection (a) shall9

not be made available to the public by the Secretarybut may be made available outside the Department11of Health and Human Services by the Secretary for12research or legitimate business purposes pursuant to13data use agreements.14(d) PENALTIES FOR NONCOMPLIANCE. (1) FAILURE TO REPORT. 16(A) IN GENERAL.Subject to subpara17

graph (B), except as provided in paragraph (2),18any applicable manufacturer or distributor that19fails to submit information required under subsection(a) in a timely manner in accordance21with regulations promulgated to carry out such22subsection, and any hospital or other entity that23fails to submit information required under sub24section (b) in a timely manner in accordancewith regulations promulgated to carry out such

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6441subsection shall be subject to a civil money pen2

alty of not less than $1,000, but not more than3$10,000, for each payment or other transfer of4value or ownership or investment interest notreported as required under such subsection.6Such penalty shall be imposed and collected in7the same manner as civil money penalties under8subsection (a) of section 1128A are imposed

9and collected under that section.(B) LIMITATION.The total amount of11civil money penalties imposed under subpara12graph (A) with respect to each annual submis13sion of information under subsection (a) by an14applicable manufacturer or distributor or otherentity shall not exceed $150,000.16(2) KNOWING FAILURE TO REPORT. 17

(A) IN GENERAL.Subject to subpara18graph (B), any applicable manufacturer or dis19tributor that knowingly fails to submit informationrequired under subsection (a) in a timely21manner in accordance with regulations promul22gated to carry out such subsection and any hos23pital or other entity that fails to submit infor24mation required under subsection (b) in a timelymanner in accordance with regulations pro-

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6451mulgated to carry out such subsection, shall be

2subject to a civil money penalty of not less than3$10,000, but not more than $100,000, for each4payment or other transfer of value or ownershipor investment interest not reported as required6under such subsection. Such penalty shall be7imposed and collected in the same manner as8

civil money penalties under subsection (a) of9section 1128A are imposed and collected underthat section.11(B) LIMITATION.The total amount of12civil money penalties imposed under subpara13graph (A) with respect to each annual submis14sion of information under subsection (a) or (b)by an applicable manufacturer, distributor, or16entity shall not exceed $1,000,000, or, if great17

er, 0.1 percentage of the total annual revenues18of the manufacturer, distributor, or entity.19(3) USE OF FUNDS.Funds collected by theSecretary as a result of the imposition of a civil21money penalty under this subsection shall be used to22carry out this section.23(4) ENFORCEMENT THROUGH STATE ATTOR24NEYS GENERAL.The attorney general of a State,after providing notice to the Secretary of an intent

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6461to proceed under this paragraph in a specific case

2and providing the Secretary with an opportunity to3bring an action under this subsection and the Sec4retary declining such opportunity, may proceed5under this subsection against a manufacturer or dis6tributor in the State.7(e) ANNUAL REPORT TO CONGRESS.Not later8than April 1 of each year beginning with 2011, the Sec9

retary shall submit to Congress a report that includes the10following:11(1) The information submitted under this sec12tion during the preceding year, aggregated for each13applicable manufacturer or distributor of a covered14drug, device, biological, or medical supply that sub15mitted such information during such year.16(2) A description of any enforcement actions

17taken to carry out this section, including any pen18alties imposed under subsection (d), during the pre19ceding year.20(f) DEFINITIONS.In this section:21(1) APPLICABLE MANUFACTURER; APPLICA22BLE DISTRIBUTOR.The term applicable manufac23turer means a manufacturer of a covered drug, de24vice, biological, or medical supply, and the term ap

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6471plicable distributor means a distributor of a covered

2drug, device, or medical supply.3(2) CLINICAL INVESTIGATION.The term4clinical investigation means any experiment involvingone or more human subjects, or materials de6rived from human subjects, in which a drug or de7vice is administered, dispensed, or used.8(3) COVERED DRUG, DEVICE, BIOLOGICAL, OR9

MEDICAL SUPPLY.The term

covered

means, withrespect to a drug, device, biological, or medical sup11

ply, such a drug, device, biological, or medical supply12for which payment is available under title XVIII or13a State plan under title XIX or XXI (or a waiver14of such a plan).(4) COVERED RECIPIENT.The term covered16recipient means the following:17

(A) A physician.18(B) A physician group practice.19(C) Any other prescriber of a covereddrug, device, biological, or medical supply.21(D) A pharmacy or pharmacist.22(E) A health insurance issuer, group23health plan, or other entity offering a health24benefits plan, including any employee of suchan issuer, plan, or entity.

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6481(F) A pharmacy benefit manager, includ2

ing any employee of such a manager.3(G) A hospital.4(H) A medical school.(I) A sponsor of a continuing medical6education program.7(J) A patient advocacy or disease specific8group.

9(K) A organization of health care professionals.11(L) A biomedical researcher.12(M) A group purchasing organization.13(5) DISTRIBUTOR OF A COVERED DRUG, DE14VICE, OR MEDICAL SUPPLY.The term distributorof a covered drug, device, or medical supply means16any entity which is engaged in the marketing or dis17tribution of a covered drug, device, or medical sup18

ply (or any subsidiary of or entity affiliated with19such entity), but does not include a wholesale pharmaceuticaldistributor.21(6) EMPLOYEE.The term employee has the22meaning given such term in section 1877(h)(2).23(7) KNOWINGLY.The term knowingly has24the meaning given such term in section 3729(b) oftitle 31, United States Code.

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6491(8) MANUFACTURER OF A COVERED DRUG,

2DEVICE, BIOLOGICAL, OR MEDICAL SUPPLY.The3term manufacturer of a covered drug, device, bio4logical, or medical supply means any entity which isengaged in the production, preparation, propagation,6compounding, conversion, processing, marketing, or7distribution of a covered drug, device, biological, or8medical supply (or any subsidiary of or entity affili9

ated with such entity).(9) PAYMENT OR OTHER TRANSFER OF11VALUE. 12(A) IN GENERAL.The term payment or13other transfer of value means a transfer of14anything of value for or of any of the following:(i) Gift, food, or entertainment.16(ii) Travel or trip.

17(iii) Honoraria.18(iv) Research funding or grant.19(v) Education or conference funding.(vi) Consulting fees.21(vii) Ownership or investment inter22est and royalties or license fee.23(B) INCLUSIONS.Subject to subpara24graph (C), the term payment or other transferof value includes any compensation, gift, hono

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6501rarium, speaking fee, consulting fee, travel,

2services, dividend, profit distribution, stock or3stock option grant, or any ownership or invest4ment interest held by a physician in a manufacturer(excluding a dividend or other profit dis6tribution from, or ownership or investment in7terest in, a publicly traded security or mutual8fund (as described in section 1877(c))).9(C) EXCLUSIONS.The term payment or

other transfer of valuedoes not include the fol11lowing:

12(i) Any payment or other transfer of13value provided by an applicable manufac14turer or distributor to a covered recipientwhere the amount transferred to, requested16by, or designated on behalf of the covered17recipient does not exceed $5.18

(ii) The loan of a covered device for19a short-term trial period, not to exceed 90days, to permit evaluation of the covered21device by the covered recipient.22(iii) Items or services provided under23a contractual warranty, including the re24placement of a covered device, where theterms of the warranty are set forth in the

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6511purchase or lease agreement for the cov2

ered device.3(iv) A transfer of anything of value4to a covered recipient when the covered re5cipient is a patient and not acting in the6professional capacity of a covered recipient.7(v) In-kind items used for the provi8sion of charity care.9(vi) A dividend or other profit dis10tribution from, or ownership or investment

11interest in, a publicly traded security and12mutual fund (as described in section131877(c)).14(vii) Compensation paid by a manu15facturer or distributor of a covered drug,16device, biological, or medical supply to a

17covered recipient who is directly employed18by and works solely for such manufacturer19or distributor.20(viii) Any discount or cash rebate.21(10) PHYSICIAN.The term physician has22the meaning given that term in section 1861(r). For23purposes of this section, such term does not include24a physician who is an employee of the applicable

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652

1manufacturer that is required to submit information2under subsection (a).3(g) ANNUAL REPORTS TO STATES.Not later than4April 1 of each year beginning with 2011, the Secretary5shall submit to States a report that includes a summary6of the information submitted under subsections (a) and

7(d) during the preceding year with respect to covered re8cipients or other hospitals and entities in the State.9(h) RELATION TO STATE LAWS. 10(1) IN GENERAL.Effective on January 1,112011, subject to paragraph (2), the provisions of12this section shall preempt any law or regulation of13a State or of a political subdivision of a State that

14requires an applicable manufacturer and applicable15distributor (as such terms are defined in subsection16(f)) to disclose or report, in any format, the type of17information (described in subsection (a)) regarding a18payment or other transfer of value provided by the19manufacturer to a covered recipient (as so defined).20(2) NO PREEMPTION OF ADDITIONAL RE21QUIREMENTS.Paragraph (1) shall not preempt any22law or regulation of a State or of a political subdivi23sion of a State that requires any of the following:

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6531(A) The disclosure or reporting of infor2

mation not of the type required to be disclosed3or reported under this section.4(B) The disclosure or reporting, in any5format, of the type of information required to6be disclosed or reported under this section to a7Federal, State, or local governmental agency for8

public health surveillance, investigation, or9other public health purposes or health oversight10purposes.11(C) The discovery or admissibility of in12formation described in this section in a crimi13nal, civil, or administrative proceeding..14(b) AVAILABILITY OF INFORMATION FROM THE DIS15CLOSURE OF FINANCIAL RELATIONSHIP REPORT16

(DFRR).The Secretary of Health and Human Services17shall submit to Congress a report on the full results of18the Disclosure of Physician Financial Relationships sur19veys required pursuant to section 5006 of the Deficit Re20duction Act of 2005. Such report shall be submitted to21Congress not later than the date that is 6 months after22the date such surveys are collected and shall be made pub23licly available on an Internet website of the Department24of Health and Human Services.

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6541Subtitle EPublic Reporting on

2Health Care-Associated Infections3SEC. 1461. REQUIREMENT FOR PUBLIC REPORTING BY4HOSPITALS AND AMBULATORY SURGICAL5CENTERS ON HEALTH CARE-ASSOCIATED IN6FECTIONS.7(a) IN GENERAL.Title XI of the Social Security Act8

is amended by inserting after section 1138 the following9section:10SEC. 1138A. REQUIREMENT FOR PUBLIC REPORTING BY11HOSPITALS AND AMBULATORY SURGICAL12CENTERS ON HEALTH CARE-ASSOCIATED IN13FECTIONS.14(a) REPORTING REQUIREMENT. 15

(1) IN GENERAL.The Secretary shall provide16that a hospital (as defined in subsection (g)) or am17bulatory surgical center meeting the requirements of18titles XVIII or XIX may participate in the programs19established under such titles (pursuant to the appli20cable provisions of law, including sections211866(a)(1) and 1832(a)(1)(F)(i)) only if, in accord22ance with this section, the hospital or center reports23such information on health care-associated infections24that develop in the hospital or center (and such de-

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6551mographic information associated with such infec2

tions) as the Secretary specifies.3(2) REPORTING PROTOCOLS. Such informa4tion shall be reported in accordance with reporting5protocols established by the Secretary through the6Director of the Centers for Disease Control and Pre7vention (in this section referred to as the CDC)8and to the National Healthcare Safety Network of9

the CDC or under such another reporting system of10such Centers as determined appropriate by the Sec11retary in consultation with such Director.12(3) COORDINATION WITH HIT.The Sec13retary, through the Director of the CDC and the Of14fice of the National Coordinator for Health Informa15tion Technology, shall ensure that the transmission16of information under this subsection is coordinated17with systems established under the HITECH Act,

18where appropriate.19(4) PROCEDURES TO ENSURE THE VALIDITY20OF INFORMATION.The Secretary shall establish21procedures regarding the validity of the information22submitted under this subsection in order to ensure23that such information is appropriately compared24across hospitals and centers. Such procedures shall

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6561address failures to report as well as errors in report2

ing.3(5) IMPLEMENTATION.Not later than 1 year4after the date of enactment of this section, the Sec5retary, through the Director of CDC, shall promul6gate regulations to carry out this section.7(b) PUBLIC POSTING OF INFORMATION.The Sec8retary shall promptly post, on the official public Internet9site of the Department of Health and Human Services,

10the information reported under subsection (a). Such infor11mation shall be set forth in a manner that allows for the12comparison of information on health care-associated infec13tions 14(1) among hospitals and ambulatory surgical15centers; and16(2) by demographic information.17

(c) ANNUAL REPORT TO CONGRESS.On an annual18basis the Secretary shall submit to the Congress a report19that summarizes each of the following:20(1) The number and types of health care-asso21ciated infections reported under subsection (a) in22hospitals and ambulatory surgical centers during23such year.

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6571(2) Factors that contribute to the occurrence

2of such infections, including health care worker im3munization rates.4(3) Based on the most recent informationavailable to the Secretary on the composition of the6professional staff of hospitals and ambulatory sur7gical centers, the number of certified infection con8trol professionals on the staff of hospitals and ambu9latory surgical centers.(4) The total increases or decreases in health

11care costs that resulted from increases or decreases12in the rates of occurrence of each such type of infec13tion during such year.14(5) Recommendations, in coordination with theCenter for Quality Improvement established under16section 931 of the Public Health Service Act, for17best practices to eliminate the rates of occurrence of18

each such type of infection in hospitals and ambula19tory surgical centers.(d) NON-PREEMPTION OF STATE LAWS.Nothing21in this section shall be construed as preempting or other22wise affecting any provision of State law relating to the23disclosure of information on health care-associated infec24tions or patient safety procedures for a hospital or ambulatorysurgical center.

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6581(e) HEALTH CARE-ASSOCIATED INFECTION.For

2purposes of this section:3(1) IN GENERAL.The term health care-asso4ciated infection means an infection that develops ina patient who has received care in any institutional6setting where health care is delivered and is related7to receiving health care.8(2) RELATED TO RECEIVING HEALTH CARE.

9The term related to receiving health care, with respectto an infection, means that the infection was11not incubating or present at the time health care12was provided.13(f) APPLICATION TO CRITICAL ACCESS HOS14PITALS.For purposes of this section, the term hospital includes a critical access hospital, as defined in section161861(mm)(1)..

17(b) EFFECTIVE DATE.With respect to section181138A of the Social Security Act (as inserted by sub19section (a) of this section), the requirement under suchsection that hospitals and ambulatory surgical centers21submit reports takes effect on such date (not later than222 years after the date of the enactment of this Act) as23the Secretary of Health and Human Services shall specify.24In order to meet such deadline, the Secretary may implementsuch section through guidance or other instructions.

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6591(c) GAO REPORT.Not later than 18 months after

2the date of the enactment of this Act, the Comptroller3General of the United States shall submit to Congress a4report on the program established under section 1138A5of the Social Security Act, as inserted by subsection (a).6Such report shall include an analysis of the appropriate7ness of the types of information required for submission,8

compliance with reporting requirements, the success of the9validity procedures established, and any conflict or overlap10between the reporting required under such section and any11other reporting systems mandated by either the States or12the Federal Government.13(d) REPORT ON ADDITIONAL DATA.Not later than1418 months after the date of the enactment of this Act,

15the Secretary of Health and Human Services shall submit16to the Congress a report on the appropriateness of expand17ing the requirements under such section to include addi18tional information (such as health care worker immuniza19tion rates), in order to improve health care quality and20patient safety.

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6601TITLE VMEDICARE GRADUATE

2MEDICAL EDUCATION3SEC. 1501. DISTRIBUTION OF UNUSED RESIDENCY POSI4TIONS.(a) IN GENERAL.Section 1886(h) of the Social Se6curity Act (42 U.S.C. 1395ww(h)) is amended 7(1) in paragraph (4)(F)(i), by striking para8graph (7) and inserting paragraphs (7) and (8);9(2) in paragraph (4)(H)(i), by striking paragraph

(7)

and insertingparagraphs (7) and (8)

;11

(3) in paragraph (7)(E), by inserting and12paragraph (8) after this paragraph; and13(4) by adding at the end the following new14paragraph:(8) ADDITIONAL REDISTRIBUTION OF UNUSED16RESIDENCY POSITIONS. 17

(A) REDUCTIONS IN LIMIT BASED ON UN18USED POSITIONS. 19(i) PROGRAMS SUBJECT TO REDUCTION.If a hospitals reference resident21level (specified in clause (ii)) is less than22the otherwise applicable resident limit (as23defined in subparagraph (C)(ii)), effective24for portions of cost reporting periods occurringon or after July 1, 2011, the oth

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6611erwise applicable resident limit shall be re2

duced by 90 percent of the difference be3tween such otherwise applicable resident4limit and such reference resident level.(ii) REFERENCE RESIDENT LEVEL. 6(I) IN GENERAL.Except as7otherwise provided in a subsequent8subclause, the reference resident level9

specified in this clause for a hospitalis the highest resident level for any of11the 3 most recent cost reporting peri12ods (ending before the date of the en13actment of this paragraph) of the hos14pital for which a cost report has beensettled (or, if not, submitted (subject16to audit)), as determined by the Sec17retary.18(II) USE OF MOST RECENT AC19

COUNTING PERIOD TO RECOGNIZE EXPANSIONOF EXISTING PROGRAMS.If21a hospital submits a timely request to22increase its resident level due to an23expansion, or planned expansion, of24an existing residency training programthat is not reflected on the most

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6621recent settled or submitted cost re2

port, after audit and subject to the3discretion of the Secretary, subject to4subclause (IV), the reference residentlevel for such hospital is the resident6level that includes the additional resi7dents attributable to such expansion8or establishment, as determined by9

the Secretary. The Secretary is authorizedto determine an alternative11reference resident level for a hospital12that submitted to the Secretary a13timely request, before the start of the1420092010 academic year, for an increasein its reference resident level16due to a planned expansion.

17(III) SPECIAL PROVIDER18AGREEMENT.In the case of a hos19pital described in paragraph(4)(H)(v), the reference resident level21specified in this clause is the limita22tion applicable under subclause (I) of23such paragraph.24(IV) PREVIOUS REDISTRIBUTION.The reference resident level

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6631specified in this clause for a hospital

2shall be increased to the extent re3quired to take into account an in4crease in resident positions madeavailable to the hospital under para6graph (7)(B) that are not otherwise7taken into account under a previous8subclause.9(iii) AFFILIATION.The provisions

of clause (i) shall be applied to hospitals11which are members of the same affiliated12group (as defined by the Secretary under13paragraph (4)(H)(ii)) and to the extent the14hospitals can demonstrate that they arefilling any additional resident slots allo16cated to other hospitals through an affili17ation agreement, the Secretary shall adjust18

the determination of available slots accord19ingly, or which the Secretary otherwise haspermitted the resident positions (under21section 402 of the Social Security Amend22ments of 1967) to be aggregated for pur23poses of applying the resident position lim24itations under this subsection.(B) REDISTRIBUTION.

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6641(i) IN GENERAL.The Secretary

2shall increase the otherwise applicable resi3dent limit for each qualifying hospital that4submits an application under this subparagraphby such number as the Secretary6may approve for portions of cost reporting7periods occurring on or after July 1, 2011.8The estimated aggregate number of in9

creases in the otherwise applicable residentlimit under this subparagraph may not ex11ceed the Secretarys estimate of the aggre12gate reduction in such limits attributable13to subparagraph (A).14(ii) REQUIREMENTS FOR QUALIFYINGHOSPITALS.A hospital is not a16qualifying hospital for purposes of this17paragraph unless the following require18

ments are met:19(I) MAINTENANCE OF PRIMARYCARE RESIDENT LEVEL.The hos21pital maintains the number of primary22care residents at a level that is not23less than the base level of primary24care residents increased by the numberof additional primary care resi

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6651dent positions provided to the hospital

2under this subparagraph. For pur3poses of this subparagraph, the base4level of primary care residents for ahospital is the level of such residents6as of a base period (specified by the7Secretary), determined without regard8to whether such positions were in ex9

cess of the otherwise applicable residentlimit for such period but taking11into account the application of sub12clauses (II) and (III) of subparagraph13(A)(ii).14(II) DEDICATED ASSIGNMENTOF ADDITIONAL RESIDENT POSITIONS16TO PRIMARY CARE.The hospital as17signs all such additional resident posi18

tions for primary care residents.19(III) ACCREDITATION.Thehospitals residency programs in pri21mary care are fully accredited or, in22the case of a residency training pro23gram not in operation as of the base24year, the hospital is actively applyingfor such accreditation for the program

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6661for such additional resident positions

2(as determined by the Secretary).3(iii) CONSIDERATIONS IN REDIS4TRIBUTION.In determining for which5qualifying hospitals the increase in the oth6erwise applicable resident limit is provided7under this subparagraph, the Secretary8shall take into account the demonstrated

9likelihood of the hospital filling the posi10tions within the first 3 cost reporting peri11ods beginning on or after July 1, 2011,12made available under this subparagraph,13as determined by the Secretary.14(iv) PRIORITY FOR CERTAIN HOS15PITALS.In determining for which quali16fying hospitals the increase in the other17wise applicable resident limit is provided

18under this subparagraph, the Secretary19shall distribute the increase to qualifying20hospitals based on the following criteria:21(I) The Secretary shall give22preference to hospitals that had a re23duction in resident training positions24under subparagraph (A).

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6671(II) The Secretary shall give

2preference to hospitals with 3-year3primary care residency training pro4grams, such as family practice andgeneral internal medicine.6(III) The Secretary shall give7preference to hospitals insofar as they8have in effect formal arrangements

9(as determined by the Secretary) thatplace greater emphasis upon training11in Federally qualified health centers,12rural health clinics, and other nonpro13vider settings, and to hospitals that14receive additional payments undersubsection (d)(5)(F) and emphasize16training in an outpatient department.

17(IV) The Secretary shall give18preference to hospitals with a number19of positions (as of July 1, 2009) inexcess of the otherwise applicable resi21dent limit for such period.22(V) The Secretary shall give23preference to hospitals that place24greater emphasis upon training in ahealth professional shortage area (des

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6681ignated under section 332 of the Pub2

lic Health Service Act) or a health3professional needs area (designated4under section 2211 of such Act).(VI) The Secretary shall give6preference to hospitals in States that7have low resident-to-population ratios8(including a greater preference for

9those States with lower resident-to-population ratios).11(v) LIMITATION.In no case shall12more than 20 full-time equivalent addi13tional residency positions be made available14under this subparagraph with respect toany hospital.16(vi) APPLICATION OF PER RESIDENT

17AMOUNTS FOR PRIMARY CARE.With re18spect to additional residency positions in a19hospital attributable to the increase providedunder this subparagraph, the ap21proved FTE resident amounts are deemed22to be equal to the hospital per resident23amounts for primary care and nonprimary24care computed under paragraph (2)(D) forthat hospital.

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6691(vi) DISTRIBUTION.The Secretary

2shall distribute the increase in resident3training positions to qualifying hospitals4under this subparagraph not later thanJuly 1, 2011.6(C) RESIDENT LEVEL AND LIMIT DE7FINED.In this paragraph:8(i) The term resident level has the

9meaning given such term in paragraph(7)(C)(i).11(ii) The term otherwise applicable12resident limit means, with respect to a13hospital, the limit otherwise applicable14under subparagraphs (F)(i) and (H) ofparagraph (4) on the resident level for the16

hospital determined without regard to this17paragraph but taking into account para18graph (7)(A).19(D) MAINTENANCE OF PRIMARY CARERESIDENT LEVEL.In carrying out this para21graph, the Secretary shall require hospitals that22receive additional resident positions under sub23paragraph (B) 24(i) to maintain records, and periodicallyreport to the Secretary, on the num

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6701ber of primary care residents in its resi2

dency training programs; and3(ii) as a condition of payment for a4cost reporting period under this subsectionfor such positions, to maintain the level of6such positions at not less than the sum7of 8(I) the base level of primary

9care resident positions (as determinedunder subparagraph (B)(ii)(I)) before11receiving such additional positions;12and13(II) the number of such addi14tional positions..(b) IME. 16(1) IN GENERAL.Section 1886(d)(5)(B)(v) of

17the Social Security Act (42 U.S.C.181395ww(d)(5)(B)(v)), in the second sentence, is19amended (A) by striking subsection (h)(7) and in21serting subsections (h)(7) and (h)(8); and22(B) by striking it applies and inserting23they apply.24(2) CONFORMING PROVISION.Section1886(d)(5)(B) of the Social Security Act (42 U.S.C.

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67111395ww(d)(5)(B)) is amended by adding at the end

2the following clause:3(x) For discharges occurring on or after July 1,42011, insofar as an additional payment amount under thissubparagraph is attributable to resident positions distrib6uted to a hospital under subsection (h)(8)(B), the indirect7teaching adjustment factor shall be computed in the same8manner as provided under clause (ii) with respect to such

9resident positions..(c) CONFORMING AMENDMENT.Section 422(b)(2)11of the Medicare Prescription Drug, Improvement, and12Modernization Act of 2003 (Public Law 108173) is13amended by striking section 1886(h)(7) and all that fol14lows and inserting paragraphs (7) and (8) of subsection(h) of section 1886 of the Social Security Act.16SEC. 1502. INCREASING TRAINING IN NONPROVIDER SET17

TINGS.18(a) DIRECT GME.Section 1886(h)(4)(E) of the So19cial Security Act (42 U.S.C. 1395ww(h)) is amended (1) by designating the first sentence as a clause21(i) with the heading IN GENERAL and appropriate22indentation;23(2) by striking shall be counted and that all24the time and inserting shall be counted andthat

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6721(I) effective for cost reporting

2periods beginning before July 1, 2009,3all the time;4(3) in subclause (I), as inserted by paragraph(1), by striking the period at the end and inserting6; and; and7(A) by inserting after subclause (I), as so8

inserted, the following:9(II) effective for cost reportingperiods beginning on or after July 1,112009, all the time so spent by a resi12dent shall be counted towards the de13termination of full-time equivalency,14without regard to the setting in whichthe activities are performed, if the16hospital incurs the costs of the sti17

pends and fringe benefits of the resi18dent during the time the resident19spends in that setting.Any hospital claiming under this subpara21graph for time spent in a nonprovider set22ting shall maintain and make available to23the Secretary records regarding the24amount of such time and such amount incomparison with amounts of such time in

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6731such base year as the Secretary shall speci2

fy..3(b) IME.Section 1886(d)(5)(B)(iv) of the Social4Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)) is amended 6(1) by striking (iv) Effective for discharges oc7curring on or after October 1, 1997 and inserting8(iv)(I) Effective for discharges occurring on or9after October 1, 1997, and before July 1, 2009;

and11(2) by inserting after subclause (I), as inserted12by paragraph (1), the following new subclause:13(II) Effective for discharges occurring on or14after July 1, 2009, all the time spent by an internor resident in patient care activities at an entity in16a nonprovider setting shall be counted towards the17

determination of full-time equivalency if the hospital18incurs the costs of the stipends and fringe benefits19of the intern or resident during the time the internor resident spends in that setting..21(c) OIG STUDY ON IMPACT ON TRAINING.The In22spector General of the Department of Health and Human23Services shall analyze the data collected by the Secretary24of Health and Human Services from the records madeavailable to the Secretary under section 1886(h)(4)(E) of

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6741the Social Security Act, as amended by subsection (a), in

2order to assess the extent to which there is an increase3in time spent by medical residents in training in nonpro4vider settings as a result of the amendments made by thissection. Not later than 4 years after the date of the enact6ment of this Act, the Inspector General shall submit a re7port to Congress on such analysis and assessment.8(d) DEMONSTRATION PROJECT FOR APPROVED9TEACHING HEALTH CENTERS.

(1) IN GENERAL.The Secretary of Health and11

Human Services shall conduct a demonstration12project under which an approved teaching health13center (as defined in paragraph (3)) would be eligi14ble for payment under subsections (h) and (k) ofsection 1886 of the Social Security Act (42 U.S.C.161395ww) of amounts for its own direct costs of17graduate medical education activities for primary

18care residents, as well as for the direct costs of grad19uate medical education activities of its contractinghospital for such residents, in a manner similar to21the manner in which such payments would be made22to a hospital if the hospital were to operate such a23program.24(2) CONDITIONS.Under the demonstrationproject

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6751(A) an approved teaching health center

2shall contract with an accredited teaching hos3pital to carry out the inpatient responsibilities4of the primary care residency program of the5hospital involved and is responsible for payment6to the hospital for the hospitals costs of the7salary and fringe benefits for residents in the8

program;9(B) the number of primary care residents10of the center shall not count against the con11tracting hospitals resident limit; and12(C) the contracting hospital shall agree not13to diminish the number of residents in its pri14mary care residency training program.15(3) APPROVED TEACHING HEALTH CENTER DE16

FINED.In this subsection, the term approved17teaching health center means a nonprovider setting,18such as a Federally qualified health center or rural19health clinic (as defined in section 1861(aa) of the20Social Security Act), that develops and operates an21accredited primary care residency program for which22funding would be available if it were operated by a23hospital.

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6761SEC. 1503. RULES FOR COUNTING RESIDENT TIME FOR DI2

DACTIC AND SCHOLARLY ACTIVITIES AND3OTHER ACTIVITIES.4(a) DIRECT GME.Section 1886(h) of the Social SecurityAct (42 U.S.C. 1395ww(h)) is amended 6(1) in paragraph (4)(E), as amended by section71502(a) 8(A) in clause (i), by striking Such rules

9and inserting Subject to clause (ii), suchrules; and11(B) by adding at the end the following new12clause:13(ii) TREATMENT OF CERTAIN NON14PROVIDER AND DIDACTIC ACTIVITIES. Such rules shall provide that all time spent16by an intern or resident in an approved

17medical residency training program in a18nonprovider setting that is primarily en19gaged in furnishing patient care (as definedin paragraph (5)(K)) in nonpatient21care activities, such as didactic conferences22and seminars, but not including research23not associated with the treatment or diag24nosis of a particular patient, as such timeand activities are defined by the Secretary,

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6771shall be counted toward the determination

2of full-time equivalency.;3(2) in paragraph (4), by adding at the end the4following new subparagraph:5(I) In determining the hospitals number6of full-time equivalent residents for purposes of7this subsection, all the time that is spent by an

8intern or resident in an approved medical resi9dency training program on vacation, sick leave,10or other approved leave, as such time is defined11by the Secretary, and that does not prolong the12total time the resident is participating in the13approved program beyond the normal duration14of the program shall be counted toward the de15

termination of full-time equivalency.; and16(3) in paragraph (5), by adding at the end the17following new subparagraph:18(K) NONPROVIDER SETTING THAT IS PRI19MARILY ENGAGED IN FURNISHING PATIENT20CARE.The term nonprovider setting that is21primarily engaged in furnishing patient care 22means a nonprovider setting in which the pri23mary activity is the care and treatment of pa24tients, as defined by the Secretary..

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6781(b) IME DETERMINATIONS.Section 1886(d)(5)(B)

2of such Act (42 U.S.C. 1395ww(d)(5)(B)), as amended by3section 1501(b), is amended by adding at the end the fol4lowing new clause:(xi)(I) The provisions of subparagraph (I) of sub6section (h)(4) shall apply under this subparagraph in the7same manner as they apply under such subsection.8(II) In determining the hospitals number of full-9

time equivalent residents for purposes of this subparagraph,all the time spent by an intern or resident in an11approved medical residency training program in non12patient care activities, such as didactic conferences and13seminars, as such time and activities are defined by the14Secretary, that occurs in the hospital shall be counted towardthe determination of full-time equivalency if the hos16pital 17(aa) is recognized as a subsection (d) hospital;

18(bb) is recognized as a subsection (d) Puerto19Rico hospital;(cc) is reimbursed under a reimbursement sys21tem authorized under section 1814(b)(3); or22(dd) is a provider-based hospital outpatient de23partment.24(III) In determining the hospitals number of full-time equivalent residents for purposes of this subpara

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6791graph, all the time spent by an intern or resident in an

2approved medical residency training program in research3activities that are not associated with the treatment or di4agnosis of a particular patient, as such time and activitiesare defined by the Secretary, shall not be counted toward6the determination of full-time equivalency..7(c) EFFECTIVE DATES; APPLICATION. 8(1) IN GENERAL.Except as otherwise pro9

vided, the Secretary of Health and Human Servicesshall implement the amendments made by this sec11tion in a manner so as to apply to cost reporting pe12riods beginning on or after January 1, 1983.13(2) DIRECT GME.Section 1886(h)(4)(E)(ii) of14the Social Security Act, as added by subsection(a)(1)(B), shall apply to cost reporting periods be16ginning on or after July 1, 2008.17(3) IME.Section 1886(d)(5)(B)(x)(III) of the18

Social Security Act, as added by subsection (b), shall19apply to cost reporting periods beginning on or afterOctober 1, 2001. Such section, as so added, shall21not give rise to any inference on how the law in ef22fect prior to such date should be interpreted.23(4) APPLICATION.The amendments made by24this section shall not be applied in a manner that requiresreopening of any settled hospital cost reports

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6801as to which there is not a jurisdictionally proper ap2

peal pending as of the date of the enactment of this3Act on the issue of payment for indirect costs of4medical education under section 1886(d)(5)(B) ofthe Social Security Act or for direct graduate med6ical education costs under section 1886(h) of such7Act.8SEC. 1504. PRESERVATION OF RESIDENT CAP POSITIONS9

FROM CLOSED HOSPITALS.(a) DIRECT GME.Section 1886(h)(4)(H) of the So11cial Security Act (42 U.S.C. Section 1395ww(h)(4)(H))12is amended by adding at the end the following new clause:13(vi) REDISTRIBUTION OF RESIDENCY14SLOTS AFTER A HOSPITAL CLOSES. (I) IN GENERAL.The Sec16retary shall, by regulation, establish a17process consistent with subclauses (II)

18and (III) under which, in the case19where a hospital (other than a hospitaldescribed in clause (v)) with an21approved medical residency program22in a State closes on or after the date23that is 2 years before the date of the24enactment of this clause, the Secretaryshall increase the otherwise ap

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681

1plicable resident limit under this para2graph for other hospitals in the State3in accordance with this clause.4(II) PROCESS FOR HOSPITALS5IN CERTAIN AREAS.In determining6for which hospitals the increase in the7

otherwise applicable resident limit de8scribed in subclause (I) is provided,9the Secretary shall establish a process10to provide for such increase to one or11more hospitals located in the State.12Such process shall take into consider13ation the recommendations submitted14to the Secretary by the senior health

15official (as designated by the chief ex16ecutive officer of such State) if such17recommendations are submitted not18later than 180 days after the date of19the hospital closure involved (or, in20the case of a hospital that closed after21the date that is 2 years before the22date of the enactment of this clause,23180 days after such date of enact24ment).

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6821(III) LIMITATION.The esti2

mated aggregate number of increases3in the otherwise applicable resident4limits for hospitals under this clause5shall be equal to the estimated num6ber of resident positions in the ap7proved medical residency programs8that closed on or after the date de9scribed in subclause (I)..

10(b) NO EFFECT ON TEMPORARY FTE CAP ADJUST11MENTS.The amendments made by this section shall not12effect any temporary adjustment to a hospitals FTE cap13under section 413.79(h) of title 42, Code of Federal Regu14lations (as in effect on the date of enactment of this Act)15and shall not affect the application of section161886(h)(4)(H)(v) of the Social Security Act.17

(c) CONFORMING AMENDMENTS. 18(1) Section 422(b)(2) of the Medicare Prescrip19tion Drug, Improvement, and Modernization Act of202003 (Public Law 108173), as amended by section211501(c), is amended by striking (7) and and in22serting (4)(H)(vi), (7), and.23(2) Section 1886(h)(7)(E) of the Social Secu24rity Act (42 U.S.C. 1395ww(h)(7)(E)) is amended

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6831by inserting or under paragraph (4)(H)(vi) after

2under this paragraph.3SEC. 1505. IMPROVING ACCOUNTABILITY FOR APPROVED4MEDICAL RESIDENCY TRAINING.5(a) SPECIFICATION OF GOALS FOR APPROVED MED6ICAL RESIDENCY TRAINING PROGRAMS.Section71886(h)(1) of the Social Security Act (42 U.S.C.8

1395ww(h)(1)) is amended 9

(1) by designating the matter beginning with10Notwithstanding as a subparagraph (A) with the11heading IN GENERAL. and with appropriate in12dentation; and13(2) by adding at the end the following new14paragraph:15

(B) GOALS AND ACCOUNTABILITY FOR16APPROVED MEDICAL RESIDENCY TRAINING PRO17GRAMS.The goals of medical residency train18ing programs are to foster a physician work19force so that physicians are trained to be able20to do the following:21(i) Work effectively in various health22care delivery settings, such as nonprovider23settings.

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6841(ii) Coordinate patient care within

2and across settings relevant to their spe3cialties.4(iii) Understand the relevant cost5and value of various diagnostic and treat6ment options.7(iv) Work in inter-professional teams8and multi-disciplinary team-based models

9in provider and nonprovider settings to en10hance safety and improve quality of patient11care.12(v) Be knowledgeable in methods of13identifying systematic errors in health care14delivery and in implementing systematic15solutions in case of such errors, including

16experience and participation in continuous17quality improvement projects to improve18health outcomes of the population the phy19sicians serve.20(vi) Be meaningful EHR users (as21determined under section 1848(o)(2)) in22the delivery of care and in improving the23quality of the health of the community and24the individuals that the hospital serves.

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6851(b) GAO STUDY ON EVALUATION OF TRAINING PRO2

GRAMS. 3(1) IN GENERAL.The Comptroller General of4the United States shall conduct a study to evaluatethe extent to which medical residency training pro6grams 7(A) are meeting the goals described in sec8tion 1886(h)(1)(B) of the Social Security Act,9as added by subsection (a), in a range of residency

programs, including primary care and11other specialties; and12(B) have the appropriate faculty expertise13to teach the topics required to achieve such14goals.(2) REPORT.Not later than 18 months after16the date of the enactment of this Act, the Comp17troller General shall submit to Congress a report on

18such study and shall include in such report rec19ommendations as to how medical residency trainingprograms could be further encouraged to meet such21goals through means such as 22(A) development of curriculum require23ments; and24(B) assessment of the accreditation processesof the Accreditation Council for Graduate

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6861Medical Education and the American Osteo2

pathic Association and effectiveness of those3processes in accrediting medical residency pro4grams that meet the goals referred to in paragraph(1)(A).6TITLE VIPROGRAM INTEGRITY7Subtitle AIncreased Funding to8Fight Waste, Fraud, and Abuse9

SEC. 1601. INCREASED FUNDING AND FLEXIBILITY TOFIGHT FRAUD AND ABUSE.11(a) IN GENERAL.Section 1817(k) of the Social Se12curity Act (42 U.S.C. 1395i(k)) is amended 13(1) by adding at the end the following new14paragraph:(7) ADDITIONAL FUNDING.In addition to the16funds otherwise appropriated to the Account from17

the Trust Fund under paragraphs (3) and (4) and18for purposes described in paragraphs (3)(C) and19(4)(A), there are hereby appropriated an additional$100,000,000 to such Account from such Trust21Fund for each fiscal year beginning with 2011. The22funds appropriated under this paragraph shall be al23located in the same proportion as the total funding24appropriated with respect to paragraphs (3)(A) and(4)(A) was allocated with respect to fiscal year

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68712010, and shall be available without further appro2

priation until expended..3(2) in paragraph (4)(A) 4(A) by inserting for activities described in5paragraph (3)(C) and after necessary; and6(B) by inserting until expended after7appropriation.8

(b) FLEXIBILITY IN PURSUING FRAUD AND9ABUSE.Section 1893(a) of the Social Security Act (4210U.S.C. 1395ddd(a)) is amended by inserting , or other11wise, after entities.12Subtitle BEnhanced Penalties for13Fraud and Abuse14SEC. 1611. ENHANCED PENALTIES FOR FALSE STATEMENTS15

ON PROVIDER OR SUPPLIER ENROLLMENT16APPLICATIONS.17(a) IN GENERAL.Section 1128A(a) of the Social18Security Act (42 U.S.C. 1320a7a(a)) is amended 19(1) in paragraph (1)(D), by striking all that fol20lows in which the person was excluded and insert21ing under Federal law from the Federal health care22program under which the claim was made, or;23(2) by striking or at the end of paragraph24(6);

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6881(3) in paragraph (7), by inserting at the end

2or;3(4) by inserting after paragraph (7) the fol4lowing new paragraph:(8) knowingly makes or causes to be made any6false statement, omission, or misrepresentation of a7material fact in any application, agreement, bid, or8contract to participate or enroll as a provider of

9services or supplier under a Federal health care program,including managed care organizations under11title XIX, Medicare Advantage organizations under12part C of title XVIII, prescription drug plan spon13sors under part D of title XVIII, and entities that14apply to participate as providers of services or suppliersin such managed care organizations and such16plans;;

17(5) in the matter following paragraph (8), as18inserted by paragraph (4), by striking or in cases19under paragraph (7), $ 50,000 for each such act) and inserting in cases under paragraph (7),21$50,000 for each such act, or in cases under para22graph (8), $50,000 for each false statement, omis23sion, or misrepresentation of a material fact); and24(6) in the second sentence, by striking for alawful purpose) and inserting for a lawful pur

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6891pose, or in cases under paragraph (8), an assess2

ment of not more than 3 times the amount claimed3as the result of the false statement, omission, or4misrepresentation of material fact claimed by a providerof services or supplier whose application to6participate contained such false statement, omission,7or misrepresentation).8(b) EFFECTIVE DATE.The amendments made by

9subsection (a) shall apply to acts committed on or afterJanuary 1, 2010.11SEC. 1612. ENHANCED PENALTIES FOR SUBMISSION OF12FALSE STATEMENTS MATERIAL TO A FALSE13CLAIM.14(a) IN GENERAL.Section 1128A(a) of the SocialSecurity Act (42 U.S.C. 1320a7a(a)), as amended by sec16tion 1611, is further amended

17(1) in paragraph (7), by striking or at the18end;19(2) in paragraph (8), by inserting or at theend; and21(3) by inserting after paragraph (8), the fol22lowing new paragraph:23(9) knowingly makes, uses, or causes to be24made or used, a false record or statement materialto a false or fraudulent claim for payment for items

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6901and services furnished under a Federal health care

2program;; and3(4) in the matter following paragraph (9), as4inserted by paragraph (3) (A) by striking or in cases under para6graph (8) and inserting in cases under para7graph (8); and8(B) by striking a material fact) and in9serting a material fact, in cases under paragraph

(9), $50,000 for each false record or11statement).12(b) EFFECTIVE DATE.The amendments made by13subsection (a) shall apply to acts committed on or after14January 1, 2010.SEC. 1613. ENHANCED PENALTIES FOR DELAYING INSPEC16TIONS.17(a) IN GENERAL.Section 1128A(a) of the Social

18Security Act (42 U.S.C. 1320a7a(a)), as amended by sec19tions 1611 and 1612, is further amended (1) in paragraph (8), by striking or at the21end;22(2) in paragraph (9), by inserting or at the23end;24(3) by inserting after paragraph (9) the followingnew paragraph:

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6911(10) fails to grant timely access, upon reason2

able request (as defined by the Secretary in regula3tions), to the Inspector General of the Department4of Health and Human Services, for the purpose of5audits, investigations, evaluations, or other statutory6functions of the Inspector General of the Depart7ment of Health and Human Services;; and8(4) in the matter following paragraph (10), as9

inserted by paragraph (3) 10

(A) by striking or after $50,000 for11each such act,; and12(B) by inserting , or in cases under para13graph (10), $15,000 for each day of the failure14described in such paragraph after false15record or statement.16

(b) ENSURING TIMELY INSPECTIONS RELATING TO17CONTRACTS WITH MA ORGANIZATIONS.Section181857(d)(2) of such Act (42 U.S.C. 1395w27(d)(2)) is19amended 20(1) in subparagraph (A), by inserting timely 21before inspect; and22(2) in subparagraph (B), by inserting timely 23before audit and inspect.

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6921(c) EFFECTIVE DATE.The amendments made by

2subsection (a) shall apply to violations committed on or3after January 1, 2010.4SEC. 1614. ENHANCED HOSPICE PROGRAM SAFEGUARDS.5(a) MEDICARE.Part A of title XVIII of the Social6Security Act is amended by inserting after section 18197the following new section:

8SEC. 1819A. ASSURING QUALITY OF CARE IN HOSPICE9CARE.10(a) IN GENERAL.If the Secretary determines on11the basis of a survey or otherwise, that a hospice program12that is certified for participation under this title has dem13onstrated a substandard quality of care and failed to meet14such other requirements as the Secretary may find nec15

essary in the interest of the health and safety of the indi16viduals who are provided care and services by the agency17or organization involved and determines 18(1) that the deficiencies involved immediately19jeopardize the health and safety of the individuals to20whom the program furnishes items and services, the21Secretary shall take immediate action to remove the22jeopardy and correct the deficiencies through the23remedy specified in subsection (b)(2)(A)(iii) or ter24minate the certification of the program, and may

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6931provide, in addition, for 1 or more of the other rem2

edies described in subsection (b)(2)(A); or3(2) that the deficiencies involved do not imme4diately jeopardize the health and safety of the individualsto whom the program furnishes items and6services, the Secretary may 7(A) impose intermediate sanctions devel8oped pursuant to subsection (b), in lieu of ter9minating the certification of the program; and(B) if, after such a period of intermediate

11sanctions, the program is still not in compliance12with such requirements, the Secretary shall ter13minate the certification of the program.14If the Secretary determines that a hospice programthat is certified for participation under this title is16in compliance with such requirements but, as of a17previous period, was not in compliance with such re18quirements, the Secretary may provide for a civil

19money penalty under subsection (b)(2)(A)(i) for thedays in which it finds that the program was not in21compliance with such requirements.22(b) INTERMEDIATE SANCTIONS. 23(1) DEVELOPMENT AND IMPLEMENTATION. 24The Secretary shall develop and implement, by notlater than July 1, 2012

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6941(A) a range of intermediate sanctions to

2apply to hospice programs under the conditions3described in subsection (a), and4(B) appropriate procedures for appealingdeterminations relating to the imposition of6such sanctions.7(2) SPECIFIED SANCTIONS. 8(A) IN GENERAL.

The intermediate9

sanctions developed under paragraph (1) mayinclude 11(i) civil money penalties in an12amount not to exceed $10,000 for each day13of noncompliance or, in the case of a per14instance penalty applied by the Secretary,not to exceed $25,000,

16(ii) denial of all or part of the pay17ments to which a hospice program would18otherwise be entitled under this title with19respect to items and services furnished bya hospice program on or after the date on21which the Secretary determines that inter22mediate sanctions should be imposed pur23suant to subsection (a)(2),24(iii) the appointment of temporarymanagement to oversee the operation of

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6951the hospice program and to protect and as2

sure the health and safety of the individ3uals under the care of the program while4improvements are made,(iv) corrective action plans, and6(v) in-service training for staff.7The provisions of section 1128A (other than8subsections (a) and (b)) shall apply to a civil9

money penalty under clause (i) in the samemanner as such provisions apply to a penalty or11proceeding under section 1128A(a). The tem12porary management under clause (iii) shall not13be terminated until the Secretary has deter14mined that the program has the managementcapability to ensure continued compliance with16all requirements referred to in that clause.17(B) CLARIFICATION.The sanctions

18specified in subparagraph (A) are in addition to19sanctions otherwise available under State orFederal law and shall not be construed as lim21iting other remedies, including any remedy22available to an individual at common law.23(C) COMMENCEMENT OF PAYMENT.A24denial of payment under subparagraph (A)(ii)shall terminate when the Secretary determines

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6961that the hospice program no longer dem2

onstrates a substandard quality of care and3meets such other requirements as the Secretary4may find necessary in the interest of the health5and safety of the individuals who are provided6care and services by the agency or organization7involved.8(3) SECRETARIAL AUTHORITY.

The Secretary9

shall develop and implement, by not later than July101, 2011, specific procedures with respect to the con11ditions under which each of the intermediate sanc12tions developed under paragraph (1) is to be applied,13including the amount of any fines and the severity14of each of these sanctions. Such procedures shall be15designed so as to minimize the time between identi16

fication of deficiencies and imposition of these sanc17tions and shall provide for the imposition of incre18mentally more severe fines for repeated or uncor19rected deficiencies..20(b) APPLICATION TO MEDICAID.Section 1905(o) of21the Social Security Act (42 U.S.C. 1396d(o)) is amended22by adding at the end the following new paragraph:23(4) The provisions of section 1819A shall apply to24a hospice program providing hospice care under this title

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6971in the same manner as such provisions apply to a hospice

2program providing hospice care under title XVIII..3(c) APPLICATION TO CHIP.Title XXI of the Social4Security Act is amended by adding at the end the followingnew section:6SEC. 2114. ASSURING QUALITY OF CARE IN HOSPICE CARE.7The provisions of section 1819A shall apply to a8

hospice program providing hospice care under this title in9the same manner such provisions apply to a hospice programproviding hospice care under title XVIII..11SEC. 1615. ENHANCED PENALTIES FOR INDIVIDUALS EX12CLUDED FROM PROGRAM PARTICIPATION.13(a) IN GENERAL.Section 1128A(a) of the Social14Security Act (42 U.S.C. 1320a7a(a)), as amended by theprevious sections, is further amended 16

(1) by striking or at the end of paragraph17(9);18(2) by inserting or at the end of paragraph19(10);(3) by inserting after paragraph (10) the fol21lowing new paragraph:22(11) orders or prescribes an item or service,23including without limitation home health care, diag24nostic and clinical lab tests, prescription drugs, durablemedical equipment, ambulance services, phys

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6981ical or occupational therapy, or any other item or

2service, during a period when the person has been3excluded from participation in a Federal health care4program, and the person knows or should know that5a claim for such item or service will be presented to6such a program;; and7(4) in the matter following paragraph (11), as

8inserted by paragraph (2), by striking $15,000 for9each day of the failure described in such paragraph 10and inserting $15,000 for each day of the failure11described in such paragraph, or in cases under para12graph (11), $50,000 for each order or prescription13for an item or service by an excluded individual.14(b) EFFECTIVE DATE.The amendments made by

15subsection (a) shall apply to violations committed on or16after January 1, 2010.17SEC. 1616. ENHANCED PENALTIES FOR PROVISION OF18FALSE INFORMATION BY MEDICARE ADVAN19TAGE AND PART D PLANS.20(a) IN GENERAL.Section 1857(g)(2)(A) of the So21cial Security Act (42 U.S.C. 1395w27(g)(2)(A)) is22amended by inserting except with respect to a determina23tion under subparagraph (E), an assessment of not more24than 3 times the amount claimed by such plan or plan

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6991sponsor based upon the misrepresentation or falsified in2

formation involved, after for each such determination,.3(b) EFFECTIVE DATE.The amendment made by4subsection (a) shall apply to violations committed on or5after January 1, 2010.6SEC. 1617. ENHANCED PENALTIES FOR MEDICARE ADVAN7TAGE AND PART D MARKETING VIOLATIONS.8(a) IN GENERAL.Section 1857(g)(1) of the Social

9Security Act (42 U.S.C. 1395w27(g)(1)), as amended10by section 1221(b), is amended 11(1) in subparagraph (G), by striking or at12the end;13(2) by inserting after subparagraph (H) the fol14lowing new subparagraphs:15(I) except as provided under subpara16

graph (C) or (D) of section 1860D1(b)(1), en17rolls an individual in any plan under this part18without the prior consent of the individual or19the designee of the individual;20(J) transfers an individual enrolled under21this part from one plan to another without the22prior consent of the individual or the designee23of the individual or solely for the purpose of24earning a commission;

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7001(K) fails to comply with marketing re2

strictions described in subsections (h) and (j) of3section 1851 or applicable implementing regula4tions or guidance; or5(L) employs or contracts with any indi6vidual or entity who engages in the conduct de7scribed in subparagraphs (A) through (K) of8this paragraph;; and9(3) by adding at the end the following new sen10

tence:The Secretary may provide, in addition to11

any other remedies authorized by law, for any of the12remedies described in paragraph (2), if the Secretary13determines that any employee or agent of such orga14nization, or any provider or supplier who contracts15with such organization, has engaged in any conduct16described in subparagraphs (A) through (L) of this17

paragraph. 18(b) EFFECTIVE DATE.The amendments made by19subsection (a) shall apply to violations committed on or20after January 1, 2010.21SEC. 1618. ENHANCED PENALTIES FOR OBSTRUCTION OF22PROGRAM AUDITS.23(a) IN GENERAL.Section 1128(b)(2) of the Social24Security Act (42 U.S.C. 1320a7(b)(2)) is amended

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7011(1) in the heading, by inserting OR AUDIT

2after INVESTIGATION; and3(2) by striking investigation into and all that4follows through the period and inserting investiga5tion or audit related to 6(i) any offense described in para7graph (1) or in subsection (a); or8(ii) the use of funds received, directly

9or indirectly, from any Federal health care10program (as defined in section111128B(f))..12(b) EFFECTIVE DATE.The amendments made by13subsection (a) shall apply to violations committed on or14after January 1, 2010.15

SEC. 1619. EXCLUSION OF CERTAIN INDIVIDUALS AND EN16TITIES FROM PARTICIPATION IN MEDICARE17AND STATE HEALTH CARE PROGRAMS.18(a) IN GENERAL.Section 1128(c) of the Social Se19curity Act, as previously amended by this division, is fur20ther amended 21(1) in the heading, by striking AND PERIOD 22and inserting , PERIOD, AND EFFECT; and23(2) by adding at the end the following new24paragraph:

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7021(4)(A) For purposes of this Act, subject to

2subparagraph (C), the effect of exclusion is that no3payment may be made by any Federal health care4program (as defined in section 1128B(f)) with respectto any item or service furnished 6(i) by an excluded individual or entity; or7(ii) at the medical direction or on the pre8scription of a physician or other authorized in9

dividual when the person submitting a claim forsuch item or service knew or had reason to11know of the exclusion of such individual.12(B) For purposes of this section and sections131128A and 1128B, subject to subparagraph (C), an14item or service has been furnished by an individualor entity if the individual or entity directly or indi16rectly provided, ordered, manufactured, distributed,17

prescribed, or otherwise supplied the item or service18regardless of how the item or service was paid for19by a Federal health care program or to whom suchpayment was made.21(C)(i) Payment may be made under a Federal22health care program for emergency items or services23(not including items or services furnished in an24emergency room of a hospital) furnished by an excludedindividual or entity, or at the medical direc

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7031tion or on the prescription of an excluded physician

2or other authorized individual during the period of3such individuals exclusion.4(ii) In the case that an individual eligible forbenefits under title XVIII or XIX submits a claim6for payment for items or services furnished by an ex7cluded individual or entity, and such individual eligi8ble for such benefits did not know or have reason to9

know that such excluded individual or entity was soexcluded, then, notwithstanding such exclusion, pay11ment shall be made for such items or services. In12such case the Secretary shall notify such individual13eligible for such benefits of the exclusion of the indi14vidual or entity furnishing the items or services.Payment shall not be made for items or services fur16nished by an excluded individual or entity to an indi17vidual eligible for such benefits after a reasonable18time (as determined by the Secretary in regulations)

19after the Secretary has notified the individual eligiblefor such benefits of the exclusion of the indi21vidual or entity furnishing the items or services.22(iii) In the case that a claim for payment for23items or services furnished by an excluded individual24or entity is submitted by an individual or entityother than an individual eligible for benefits under

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7041title XVIII or XIX or the excluded individual or en2

tity, and the Secretary determines that the indi3vidual or entity that submitted the claim took rea4sonable steps to learn of the exclusion and reason5ably relied upon inaccurate or misleading informa6tion from the relevant Federal health care program7or its contractor, the Secretary may waive repay8ment of the amount paid in violation of the exclusion9to the individual or entity that submitted the claim10for the items or services furnished by the excluded

11individual or entity. If a Federal health care pro12gram contractor provided inaccurate or misleading13information that resulted in the waiver of an over14payment under this clause, the Secretary shall take15appropriate action to recover the improperly paid16amount from the contractor..17Subtitle CEnhanced Program18

and Provider Protections19SEC. 1631. ENHANCED CMS PROGRAM PROTECTION AU20THORITY.21(a) IN GENERAL.Title XI of the Social Security Act22(42 U.S.C. 1301 et seq.) is amended by inserting after23section 1128F the following new section:

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7051SEC. 1128G. ENHANCED PROGRAM AND PROVIDER PRO2

TECTIONS IN THE MEDICARE, MEDICAID, AND3CHIP PROGRAMS.4(a) CERTAIN AUTHORIZED SCREENING, ENHANCEDOVERSIGHT PERIODS, AND ENROLLMENT MORATORIA. 6(1) IN GENERAL.For periods beginning after7January 1, 2011, in the case that the Secretary de8termines there is a significant risk of fraudulent ac9tivity (as determined by the Secretary based on relevant

complaints, reports, referrals by law enforce11ment or other sources, data analysis, trending infor12mation, or claims submissions by providers of serv13ices and suppliers) with respect to a category of pro14vider of services or supplier of items or services, includinga category within a geographic area, under16title XVIII, XIX, or XXI, the Secretary may impose17any of the following requirements with respect to a18provider of services or a supplier (whether such pro19vider or supplier is initially enrolling in the program

or is renewing such enrollment):21(A) Screening under paragraph (2).22(B) Enhanced oversight periods under23paragraph (3).24(C) Enrollment moratoria under paragraph(4).

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7061In applying this subsection for purposes of title XIX

2and XXI the Secretary may require a State to carry3out the provisions of this subsection as a require4ment of the State plan under title XIX or the childhealth plan under title XXI. Actions taken and de6terminations made under this subsection shall not be7subject to review by a judicial tribunal.8(2) SCREENING.For purposes of paragraph9

(1), the Secretary shall establish procedures underwhich screening is conducted with respect to pro11viders of services and suppliers described in such12paragraph. Such screening may include 13(A) licensing board checks;14(B) screening against the list of individualsand entities excluded from the program16under title XVIII, XIX, or XXI;17

(C) the excluded provider list system;18(D) background checks; and19(E) unannounced pre-enrollment or othersite visits.21(3) ENHANCED OVERSIGHT PERIOD.For22purposes of paragraph (1), the Secretary shall estab23lish procedures to provide for a period of not less24than 30 days and not more than 365 days duringwhich providers of services and suppliers described

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7071in such paragraph, as the Secretary determines ap2

propriate, would be subject to enhanced oversight,3such as required or unannounced (or required and4unannounced) site visits or inspections, prepayment5review, enhanced review of claims, and such other6actions as specified by the Secretary, under the pro7grams under titles XVIII, XIX, and XXI. Under8such procedures, the Secretary may extend such pe9

riod for more than 365 days if the Secretary deter10mines that after the initial period such additional11period of oversight is necessary.12(4) MORATORIUM ON ENROLLMENT OF PRO13VIDERS AND SUPPLIERS.For purposes of para14graph (1), the Secretary, based upon a finding of a15risk of serious ongoing fraud within a program16under title XVIII, XIX, or XXI, may impose a mor17atorium on the enrollment of providers of services

18and suppliers within a category of providers of serv19ices and suppliers (including a category within a spe20cific geographic area) under such title. Such a mora21torium may only be imposed if the Secretary makes22a determination that the moratorium would not ad23versely impact access of individuals to care under24such program.

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7081(5) CLARIFICATION.Nothing in this sub2

section shall be interpreted to preclude or limit the3ability of a State to engage in provider screening or4enhanced provider oversight activities beyond thoserequired by the Secretary..6(b) CONFORMING AMENDMENTS. 7(1) MEDICAID.Section 1902(a) of the Social8Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is

9amended (A) in paragraph (23), by inserting before11the semicolon at the end the following: or by12a person to whom or entity to which a morato13rium under section 1128G(a)(4) is applied dur14ing the period of such moratorium;(B) in paragraph (72); by striking at the16end and;17

(C) in paragraph (73), by striking the pe18riod at the end and inserting and; and19(D) by adding after paragraph (73) thefollowing new paragraph:21(74) provide that the State will enforce any22determination made by the Secretary under sub23section (a) of section 1128G (relating to a signifi24cant risk of fraudulent activity with respect to a categoryof provider or supplier described in such sub-

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7091section (a) through use of the appropriate proce2

dures described in such subsection (a)), and that the3State will carry out any activities as required by the4Secretary for purposes of such subsection (a)..(2) CHIP.Section 2102 of such Act (426U.S.C. 1397bb) is amended by adding at the end the7following new subsection:8(d) PROGRAM INTEGRITY.A State child health

9plan shall include a description of the procedures to beused by the State 11(1) to enforce any determination made by the12Secretary under subsection (a) of section 1128G (re13lating to a significant risk of fraudulent activity with14respect to a category of provider or supplier describedin such subsection through use of the appro16priate procedures described in such subsection); and17

(2) to carry out any activities as required by18the Secretary for purposes of such subsection..19(3) MEDICARE.Section 1866(j) of such Act(42 U.S.C. 1395cc(j)) is amended by adding at the21end the following new paragraph:22(3) PROGRAM INTEGRITY.The provisions of23section 1128G(a) apply to enrollments and renewals24of enrollments of providers of services and suppliersunder this title..

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710

SEC. 1632. ENHANCED MEDICARE, MEDICAID, AND CHIP

PROGRAM DISCLOSURE REQUIREMENTS RE

LATING TO PREVIOUS AFFILIATIONS.

(a) IN GENERAL.Section 1128G of the Social SecurityAct, as inserted by section 1631, is amended by addingat the end the following new subsection:(b) ENHANCED PROGRAM DISCLOSURE REQUIREMENTS.

(1) DISCLOSURE.

A provider of services orsupplier who submits on or after July 1, 2011, an

application for enrollment and renewing enrollmentin a program under title XVIII, XIX, or XXI shalldisclose (in a form and manner determined by theSecretary) any current affiliation or affiliation withinthe previous 10-year period with a provider ofservices or supplier that has uncollected debt or witha person or entity that has been suspended or excludedunder such program, subject to a paymentsuspension, or has had its billing privileges revoked.

(2) ENHANCED SAFEGUARDS.If the Secretary

determines that such previous affiliation ofsuch provider or supplier poses a risk of fraud,waste, or abuse, the Secretary may apply such enhancedsafeguards as the Secretary determines necessaryto reduce such risk associated with such provideror supplier enrolling or participating in the

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7111program under title XVIII, XIX, or XXI. Such safe2

guards may include enhanced oversight, such as en3hanced screening of claims, required or unannounced4(or required and unannounced) site visits or inspec5tions, additional information reporting requirements,6and conditioning such enrollment on the provision of7a surety bond.8(3) AUTHORITY TO DENY PARTICIPATION.If9

the Secretary determines that there has been at10least one such affiliation and that such affiliation or11affiliations, as applicable, of such provider or sup12plier poses a serious risk of fraud, waste, or abuse,13the Secretary may deny the application of such pro14vider or supplier..15(b) CONFORMING AMENDMENTS. 16(1) MEDICAID.Paragraph (74) of section

171902(a) of such Act (42 U.S.C. 1396a(a)), as added18by section 1631(b)(1), is amended 19(A) by inserting or subsection (b) of such20section (relating to disclosure requirements) 21before , and that the State; and22(B) by inserting before the period the fol23lowing: and apply any enhanced safeguards,24with respect to a provider or supplier described

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7121in such subsection (b), as the Secretary deter2

mines necessary under such subsection (b).3(2) CHIP.Subsection (d) of section 2102 of4such Act (42 U.S.C. 1397bb), as added by section51631(b)(2), is amended 6(A) in paragraph (1), by striking at the7end and;8

(B) in paragraph (2) by striking the period9at the end and inserting ; and and10(C) by adding at the end the following new11paragraph:12(3) to enforce any determination made by the13Secretary under subsection (b) of section 1128G (re14lating to disclosure requirements) and to apply any15

enhanced safeguards, with respect to a provider or16supplier described in such subsection, as the Sec17retary determines necessary under such subsection..18SEC. 1633. REQUIRED INCLUSION OF PAYMENT MODIFIER19FOR CERTAIN EVALUATION AND MANAGE20MENT SERVICES.21Section 1848 of the Social Security Act (42 U.S.C.221395w4), as amended by section 4101 of the HITECH23Act (Public Law 1115), is amended by adding at the end24the following new subsection:

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7131(p) PAYMENT MODIFIER FOR CERTAIN EVALUA2

TION AND MANAGEMENT SERVICES.The Secretary shall3establish a payment modifier under the fee schedule under4this section for evaluation and management services (as5specified in section 1842(b)(16)(B)(ii)) that result in the6ordering of additional services (such as lab tests), the pre7scription of drugs, the furnishing or ordering of durable8medical equipment in order to enable better monitoring

9of claims for payment for such additional services under10this title, or the ordering, furnishing, or prescribing of11other items and services determined by the Secretary to12pose a high risk of waste, fraud, and abuse. The Secretary13may require providers of services or suppliers to report14such modifier in claims submitted for payment..15

SEC. 1634. EVALUATIONS AND REPORTS REQUIRED UNDER16MEDICARE INTEGRITY PROGRAM.17(a) IN GENERAL.Section 1893(c) of the Social Se18curity Act (42 U.S.C. 1395ddd(c)) is amended 19(1) in paragraph (3), by striking at the end20and;21(2) by redesignating paragraph (4) as para22graph (5); and23(3) by inserting after paragraph (3) the fol24lowing new paragraph:

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7141(4) for the contract year beginning in 2011

2and each subsequent contract year, the entity pro3vides assurances to the satisfaction of the Secretary4that the entity will conduct periodic evaluations ofthe effectiveness of the activities carried out by such6entity under the Program and will submit to the7Secretary an annual report on such activities; and.8(b) REFERENCE TO MEDICAID INTEGRITY PRO9

GRAM.For a similar provision with respect to the MedicaidIntegrity Program, see section 1752.

11SEC. 1635. REQUIRE PROVIDERS AND SUPPLIERS TO12ADOPT PROGRAMS TO REDUCE WASTE,13FRAUD, AND ABUSE.14(a) IN GENERAL.Section 1874 of the Social SecurityAct (42 U.S.C. 42 U.S.C. 1395kk) is amended by16adding at the end the following new subsection:

17(d) COMPLIANCE PROGRAMS FOR PROVIDERS OF18SERVICES AND SUPPLIERS. 19(1) IN GENERAL.The Secretary maydisenroll a provider of services or a supplier (other21than a physician or a skilled nursing facility) under22this title (or may impose any civil monetary penalty23or other intermediate sanction under paragraph (4))24if such provider of services or supplier fails to, subjectto paragraph (5), establish a compliance pro-

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7151gram that contains the core elements established

2under paragraph (2).3(2) ESTABLISHMENT OF CORE ELEMENTS. 4The Secretary, in consultation with the InspectorGeneral of the Department of Health and Human6Services, shall establish core elements for a compli7ance program under paragraph (1). Such elements8may include written policies, procedures, and stand9

ards of conduct, a designated compliance officer anda compliance committee; effective training and edu11cation pertaining to fraud, waste, and abuse for the12organizations employees and contractors; a con13fidential or anonymous mechanism, such as a hot14line, to receive compliance questions and reports offraud, waste, or abuse; disciplinary guidelines for en16forcement of standards; internal monitoring and au17diting procedures, including monitoring and auditing18of contractors; procedures for ensuring prompt re19sponses to detected offenses and development of corrective

action initiatives, including responses to po21tential offenses; and procedures to return all identi22fied overpayments to the programs under this title,23title XIX, and title XXI.24(3) TIMELINE FOR IMPLEMENTATION.TheSecretary shall determine a timeline for the estab

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716

1lishment of the core elements under paragraph (2)2and the date on which a provider of services and3suppliers (other than physicians) shall be required to4have established such a program for purposes of this5subsection.6(4) CMS ENFORCEMENT AUTHORITY.The

7Administrator for the Centers of Medicare & Med8icaid Services shall have the authority to determine9whether a provider of services or supplier described10in subparagraph (3) has met the requirement of this11subsection and to impose a civil monetary penalty12not to exceed $50,000 for each violation. The Sec13retary may also impose other intermediate sanctions,14

including corrective action plans and additional mon15itoring in the case of a violation of this subsection.16(5) PILOT PROGRAM.The Secretary may17conduct a pilot program on the application of this18subsection with respect to a category of providers of19services or suppliers (other than physicians) that the20Secretary determines to be a category which is at21high risk for waste, fraud, and abuse before imple22menting the requirements of this subsection to all23providers of services and suppliers described in para24graph (3)..

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7171(b) REFERENCE TO SIMILAR MEDICAID PROVI2

SION.For a similar provision with respect to the Med3icaid program under title XIX of the Social Security Act,4see section 1753.SEC. 1636. MAXIMUM PERIOD FOR SUBMISSION OF MEDI6CARE CLAIMS REDUCED TO NOT MORE THAN712 MONTHS.8(a) PURPOSE.In general, the 36-month period cur9rently allowed for claims filing under parts A, B, C, and,D of title XVIII of the Social Security Act presents oppor11

tunities for fraud schemes in which processing patterns12of the Centers for Medicare & Medicaid Services can be13observed and exploited. Narrowing the window for claims14processing will not overburden providers and will reducefraud and abuse.16(b) REDUCING MAXIMUM PERIOD FOR SUBMIS17SION. 18(1) PART A.Section 1814(a) of the Social Se19

curity Act (42 U.S.C. 1395f(a)) is amended (A) in paragraph (1), by strikeing period21of 3 calendar years and all that follows and in22serting period of 1 calendar year from which23such services are furnished; and; and24(B) by adding at the end the following newsentence: In applying paragraph (1), the Sec

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7181retary may specify exceptions to the 1 calendar

2year period specified in such paragraph..3(2) PART B.Section 1835(a) of such Act (424U.S.C. 1395n(a)) is amended (A) in paragraph (1), by strikeing period6of 3 calendar years and all that follows and in7serting period of 1 calendar year from which8such services are furnished; and; and

9(B) by adding at the end the following newsentence: In applying paragraph (1), the Sec11retary may specify exceptions to the 1 calendar12year period specified in such paragraph..13(3) PARTS C AND D.Section 1857(d) of such14Act is amended by adding at the end the followingnew paragraph:16(7) PERIOD FOR SUBMISSION OF CLAIMS.

17The contract shall require an MA organization or18PDP sponsor to require any provider of services19under contract with, in partnership with, or affiliatedwith such organization or sponsor to ensure21that, with respect to items and services furnished by22such provider to an enrollee of such organization,23written request, signed by such enrollee, except in24cases in which the Secretary finds it impracticablefor the enrollee to do so, is filed for payment for

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7191such items and services in such form, in such man2

ner, and by such person or persons as the Secretary3may by regulation prescribe, no later than the close4of the 1 calendar year period after such items andservices are furnished. In applying the previous sen6tence, the Secretary may specify exceptions to the 17calendar year period specified..8(c) EFFECTIVE DATE.The amendments made by9

subsection (b) shall be effective for items and services furnishedon or after January 1, 2011.11SEC. 1637. PHYSICIANS WHO ORDER DURABLE MEDICAL12EQUIPMENT OR HOME HEALTH SERVICES RE13QUIRED TO BE MEDICARE ENROLLED PHYSI14CIANS OR ELIGIBLE PROFESSIONALS.(a) DME.Section 1834(a)(11)(B) of the Social Se16curity Act (42 U.S.C. 1395m(a)(11)(B)) is amended by17striking physician and inserting physician enrolled18

under section 1866(j) or an eligible professional under sec19tion 1848(k)(3)(B).(b) HOME HEALTH SERVICES. 21(1) PART A.Section 1814(a)(2) of such Act22(42 U.S.C. 1395(a)(2)) is amended in the matter23preceding subparagraph (A) by inserting in the24case of services described in subparagraph (C), aphysician enrolled under section 1866(j) or an eligi

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7201ble professional under section 1848(k)(3)(B), be2

fore or, in the case of services.3(2) PART B.Section 1835(a)(2) of such Act4(42 U.S.C. 1395n(a)(2)) is amended in the matter5preceding subparagraph (A) by inserting , or in the6case of services described in subparagraph (A), a7physician enrolled under section 1866(j) or an eligi8ble professional under section 1848(k)(3)(B), after

9a physician.10(c) DISCRETION TO EXPAND APPLICATION.The11Secretary may extend the requirement applied by the12amendments made by subsections (a) and (b) to durable13medical equipment and home health services (relating to14requiring certifications and written orders to be made by15

enrolled physicians and health professions) to other cat16egories of items or services under this title, including cov17ered part D drugs as defined in section 1860D2(e), if18the Secretary determines that such application would help19to reduce the risk of waste, fraud, and abuse with respect20to such other categories under title XVIII of the Social21Security Act.22(d) EFFECTIVE DATE.The amendments made by23this section shall apply to written orders and certifications24made on or after July 1, 2010.

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7211SEC. 1638. REQUIREMENT FOR PHYSICIANS TO PROVIDE

2DOCUMENTATION ON REFERRALS TO PRO3GRAMS AT HIGH RISK OF WASTE AND ABUSE.4(a) PHYSICIANS AND OTHER SUPPLIERS.Section1842(h) of the Social Security Act, as amended by section61635, is further amended by adding at the end the fol7lowing new paragraph8(10) The Secretary may disenroll, for a period of9

not more than one year for each act, a physician or supplierunder section 1866(j) if such physician or supplier11fails to maintain and, upon request of the Secretary, pro12vide access to documentation relating to written orders or13requests for payment for durable medical equipment, cer14tifications for home health services, or referrals for otheritems or services written or ordered by such physician or16supplier under this title, as specified by the Secretary..17(b) PROVIDERS OF SERVICES.Section 1866(a)(1)

18of such Act (42 U.S.C. 1395cc), as amended by section191635, is further amended (1) in subparagraph (V), by striking at the end21and;22(2) in subparagraph (W), by striking the period23at the end and adding ; and; and24(3) by adding at the end the following new subparagraph:

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7221(X) maintain and, upon request of the

2Secretary, provide access to documentation re3lating to written orders or requests for payment4for durable medical equipment, certifications forhome health services, or referrals for other6items or services written or ordered by the pro7vider under this title, as specified by the Sec8retary..9(c) OIG PERMISSIVE EXCLUSION AUTHORITY.Section

1128(b)(11) of the Social Security Act (42 U.S.C.111320a7(b)(11)) is amended by inserting , ordering, re12ferring for furnishing, or certifying the need for after13furnishing.14(d) EFFECTIVE DATE.The amendments made bythis section shall apply to orders, certifications, and refer16rals made on or after January 1, 2010.17SEC. 1639. FACE TO FACE ENCOUNTER WITH PATIENT RE18QUIRED BEFORE PHYSICIANS MAY CERTIFY

19ELIGIBILITY FOR HOME HEALTH SERVICESOR DURABLE MEDICAL EQUIPMENT UNDER21MEDICARE.22(a) CONDITION OF PAYMENT FOR HOME HEALTH23SERVICES. 24(1) PART A.Section 1814(a)(2)(C) of suchAct is amended

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7231(A) by striking and such services and in2

serting such services; and3(B) by inserting after care of a physi4cian the following: , and, in the case of a certificationor recertification made by a physician6after January 1, 2010, prior to making such7certification the physician must document that8the physician has had a face-to-face encounter9

(including through use of telehealth and otherthan with respect to encounters that are inci11dent to services involved) with the individual12during the 6-month period preceding such cer13tification, or other reasonable timeframe as de14termined by the Secretary.(2) PART B.Section 1835(a)(2)(A) of the So16cial Security Act is amended 17(A) by striking and before (iii); and18(B) by inserting after care of a physi19

cian the following: , and (iv) in the case ofa certification or recertification after January211, 2010, prior to making such certification the22physician must document that the physician has23had a face-to-face encounter (including through24use of telehealth and other than with respect toencounters that are incident to services in-

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7241volved) with the individual during the 6-month

2period preceding such certification or recertifi3cation, or other reasonable timeframe as deter4mined by the Secretary.(b) CONDITION OF PAYMENT FOR DURABLE MED6ICAL EQUIPMENT.Section 1834(a)(11)(B) of the Social7Security Act (42 U.S.C. 1395m(a)(11)(B)) is amended by8adding at the end the following: and shall require that9such an order be written pursuant to the physician documenting

that the physician has had a face-to-face encoun11ter (including through use of telehealth and other than12with respect to encounters that are incident to services in13volved) with the individual involved during the 6-month14period preceding such written order, or other reasonabletimeframe as determined by the Secretary.16(c) APPLICATION TO OTHER AREAS UNDER MEDI17CARE.The Secretary may apply the face-to-face encoun18ter requirement described in the amendments made by19

subsections (a) and (b) to other items and services forwhich payment is provided under title XVIII of the Social21Security Act based upon a finding that such an decision22would reduce the risk of waste, fraud, or abuse.23(d) APPLICATION TO MEDICAID AND CHIP.The re24quirements pursuant to the amendments made by subsections(a) and (b) shall apply in the case of physicians

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7251making certifications for home health services under title

2XIX or XXI of the Social Security Act, in the same man3ner and to the same extent as such requirements apply4in the case of physicians making such certifications under5title XVIII of such Act.6SEC. 1640. EXTENSION OF TESTIMONIAL SUBPOENA AU7THORITY TO PROGRAM EXCLUSION INVES8TIGATIONS.9

(a) IN GENERAL.Section 1128(f) of the Social Se10curity Act (42 U.S.C. 1320a-7(f)) is amended by adding

11at the end the following new paragraph:12(4) The provisions of subsections (d) and (e) of sec13tion 205 shall apply with respect to this section to the14same extent as they are applicable with respect to title15II. The Secretary may delegate the authority granted by16section 205(d) (as made applicable to this section) to the

17Inspector General of the Department of Health and18Human Services or the Administrator of the Centers for19Medicare & Medicaid Services for purposes of any inves20tigation under this section..21(b) EFFECTIVE DATE.The amendment made by22subsection (a) shall apply to investigations beginning on23or after January 1, 2010.

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726

SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND

MEDICAID OVERPAYMENTS.

Section 1128G of the Social Security Act, as insertedby section 1631 and amended by section 1632, is furtheramended by adding at the end the following new subsection:

(c) REPORTS ON AND REPAYMENT OF OVERPAYMENTSIDENTIFIED THROUGH INTERNAL AUDITS ANDREVIEWS.

(1) REPORTING AND RETURNING OVERPAY-MENTS.If a person knows of an overpayment, the

person must

(A) report and return the overpayment tothe Secretary, the State, an intermediary, acarrier, or a contractor, as appropriate, at thecorrect address, and

(B) notify the Secretary, the State, intermediary,carrier, or contractor to whom theoverpayment was returned in writing of the reasonfor the overpayment.

(2) TIMING.An overpayment must be re

ported and returned under paragraph (1)(A) by notlater than the date that is 60 days after the date theperson knows of the overpayment.Any known overpayment retained later than the applicabledate specified in this paragraph creates an

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7271obligation as defined in section 3729(b)(3) of title

231 of the United States Code.3(3) CLARIFICATION.Repayment of any over4payments (or refunding by withholding of future5payments) by a provider of services or supplier does6not otherwise limit the provider or suppliers poten7tial liability for administrative obligations such as8applicable interests, fines, and specialties or civil or

9criminal sanctions involving the same claim if it is10determined later that the reason for the overpay11ment was related to fraud by the provider or sup12plier or the employees or agents of such provider or13supplier.14(4) DEFINITIONS.In this subsection:15(A) KNOWS.The term knows has the16

meaning given the terms knowing and know17ingly in section 3729(b) of title 31 of the18United States Code.19(B) OVERPAYMENT.The term overpay20ment means any finally determined funds that21a person receives or retains under title XVIII,22XIX, or XXI to which the person, after applica23ble reconciliation, is not entitled under such24title.

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7281(C) PERSON.The term person means a

2provider of services, supplier, Medicaid man3aged care organization (as defined in section41903(m)(1)(A)), Medicare Advantage organization(as defined in section 1859(a)(1)), or PDP6sponsor (as defined in section 1860D 741(a)(13)), but excluding a beneficiary..8SEC. 1642. EXPANDED APPLICATION OF HARDSHIP WAIV9

ERS FOR OIG EXCLUSIONS TO BENEFICIARIESOF ANY FEDERAL HEALTH CARE11PROGRAM.12Section 1128(c)(3)(B) of the Social Security Act (4213U.S.C. 1320a7(c)(3)(B)) is amended by striking indi14viduals entitled to benefits under part A of title XVIIIor enrolled under part B of such title, or both and insert16ing beneficiaries (as defined in section 1128A(i)(5)) of17that program.

18SEC. 1643. ACCESS TO CERTAIN INFORMATION ON RENAL19DIALYSIS FACILITIES.Section 1881(b) of the Social Security Act (42 U.S.C.211395rr(b)) is amended by adding at the end the following22new paragraph:23(15) For purposes of evaluating or auditing pay24ments made to renal dialysis facilities for items and servicesunder this section under paragraph (1), each such

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7291renal dialysis facility, upon the request of the Secretary,

2shall provide to the Secretary access to information relat3ing to any ownership or compensation arrangement be4tween such facility and the medical director of such facility5or between such facility and any physician..6SEC. 1644. BILLING AGENTS, CLEARINGHOUSES, OR OTHER7ALTERNATE PAYEES REQUIRED TO REG8ISTER UNDER MEDICARE.9

(a) MEDICARE.Section 1866(j)(1) of the Social Se10curity Act (42 U.S.C. 1395cc(j)(1)) is amended by adding

11at the end the following new subparagraph:12(D) BILLING AGENTS AND CLEARING13HOUSES REQUIRED TO BE REGISTER UNDER14MEDICARE.Any agent, clearinghouse, or other15alternate payee that submits claims on behalf of16a health care provider must be registered with

17the Secretary in a form and manner specified18by the Secretary..19(b) MEDICAID.For a similar provision with respect20to the Medicaid program under title XIX of the Social Se21curity Act, see section 1759.22(c) EFFECTIVE DATE.The amendment made by23subsection (a) shall apply to claims submitted on or after24January 1, 2012.

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730

SEC. 1645. CONFORMING CIVIL MONETARY PENALTIES TO

FALSE CLAIMS ACT AMENDMENTS.

Section 1128A of the Social Security Act, as amendedby sections 1611, 1612, 1613, and 1615, is furtheramended

(1) in subsection (a) (A) in paragraph (1), by striking to anofficer, employee, or agent of the United States,

or of any department or agency thereof, or ofany State agency (as defined in subsection(i)(1));(B) in paragraph (4) (i) by striking participating in a programunder title XVIII or a State healthcare program and inserting participatingin a Federal health care program (as definedin section 1128B(f)); and(ii) in subparagraph (A), by strikingtitle XVIII or a State health care program and inserting a Federal healthcare program (as defined in section

1128B(f));(C) by striking or at the end of paragraph(10);(D) by inserting after paragraph (11) thefollowing new paragraphs:f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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7311(12) conspires to commit a violation of this

2section; or3(13) knowingly makes, uses, or causes to be4made or used, a false record or statement materialto an obligation to pay or transmit money or prop6erty to a Federal health care program, or knowingly7conceals or knowingly and improperly avoids or de8creases an obligation to pay or transmit money or9

property to a Federal health care program;; and(E) in the matter following paragraph

11(13), as inserted by subparagraph (D), by strik12ing or in cases under paragraph (11), $50,00013for each such violation and inserting in cases14under paragraph (11), $50,000 for each suchviolation, in cases under paragraph (12),16$50,000 for any violation described in this sec17tion committed in furtherance of the conspiracy

18involved; or in cases under paragraph (13),19$50,000 for each false record or statement, orconcealment, avoidance, or decrease; and21(F) in the second sentence, by striking22such false statement or misrepresentation) 23and inserting such false statement or mis24representation, in cases under paragraph (12),an assessment of not more than 3 times the

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7321total amount that would otherwise apply for

2any violation described in this section com3mitted in furtherance of the conspiracy in4volved, or in cases under paragraph (13), an assessmentof not more than 3 times the total6amount of the obligation to which the false7record or statment was material or that was8avoided or decreased).9

(2) in subsection (c)(1), by striking

six years and inserting 10 years; and

11(3) in subsection (i) 12(A) by amending paragraph (2) to read as13follows:14(2) The term claim means any application,request, or demand, whether under contract, or oth16erwise, for money or property for items and services17

under a Federal health care program (as defined in18section 1128B(f)), whether or not the United States19or a State agency has title to the money or property,that 21(A) is presented or caused to be pre22sented to an officer, employee, or agent of the23United States, or of any department or agency24thereof, or of any State agency (as defined insubsection (i)(1)); or

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7331(B) is made to a contractor, grantee, or

2other recipient if the money or property is to be3spent or used on the Federal health care pro4grams behalf or to advance a Federal health5care program interest, and if the Federal health6care program 7(i) provides or has provided any por8tion of the money or property requested or

9demanded; or10(ii) will reimburse such contractor,11grantee, or other recipient for any portion12of the money or property which is re13quested or demanded.;14(B) by amending paragraph (3) to read as15follows:

16(3) The term item or service means, without17limitation, any medical, social, management, admin18istrative, or other item or service used in connection19with or directly or indirectly related to a Federal20health care program.;21(C) in paragraph (6) 22(i) in subparagraph (C), by striking at23the end or;

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7341(ii) in the first subparagraph (D), by

2striking at the end the period and inserting3; or; and4(iii) by redesignating the second sub5paragraph (D) as a subparagraph (E);6(D) by amending paragraph (7) to read as7follows:8(7) The terms

knowing

,knowingly

, and9

should know mean that a person, with respect to10information 11(A) has actual knowledge of the informa12tion;13(B) acts in deliberate ignorance of the14truth or falsity of the information; or15

(C) acts in reckless disregard of the truth16or falsity of the information;17and require no proof of specific intent to defraud.;18and19(E) by adding at the end the following new20paragraphs:21(8) The term obligation means an established22duty, whether or not fixed, arising from an express23or implied contractual, grantor-grantee, or licensor-24licensee relationship, from a fee-based or similar re-

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7351lationship, from statute or regulation, or from the

2retention of any overpayment.3(9) The term material means having a nat4ural tendency to influence, or be capable of influencing,the payment or receipt of money or prop6erty..7Subtitle DAccess to Information8Needed to Prevent Fraud,9

Waste, and AbuseSEC. 1651. ACCESS TO INFORMATION NECESSARY TO IDEN11TIFY FRAUD, WASTE, AND ABUSE.12Section 1128G of the Social Security Act, as added13by section 1631 and amended by sections 1632 and 1641,14is further amended by adding at the end the following newsubsection;16(d) ACCESS TO INFORMATION NECESSARY TO IDEN17TIFY FRAUD, WASTE, AND ABUSE.For purposes of law

18enforcement activity, and to the extent consistent with ap19plicable disclosure, privacy, and security laws, includingthe Health Insurance Portability and Accountability Act21of 1996 and the Privacy Act of 1974, and subject to any22information systems security requirements enacted by law23or otherwise required by the Secretary, the Attorney Gen24eral shall have access, facilitation by the Inspector Generalof the Department of Health and Human Services, to

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7361claims and payment data relating to titles XVIII and XIX,

2in consultation with the Centers for Medicare & Medicaid3Services or the owner of such data..4SEC. 1652. ELIMINATION OF DUPLICATION BETWEEN THEHEALTHCARE INTEGRITY AND PROTECTION6DATA BANK AND THE NATIONAL PRACTI7TIONER DATA BANK.8(a) IN GENERAL.To eliminate duplication between

9the Healthcare Integrity and Protection Data Bank(HIPDB) established under section 1128E of the Social11Security Act and the National Practitioner Data Bank12(NPBD) established under the Health Care Quality Im13provement Act of 1986, section 1128E of the Social Secu14rity Act (42 U.S.C. 1320a-7e) is amended (1) in subsection (a), by striking Not later16than and inserting Subject to subsection (h), not17

later than;18(2) in the first sentence of subsection (d)(2), by19striking (other than with respect to requests byFederal agencies); and21(3) by adding at the end the following new sub22section:23(h) SUNSET OF THE HEALTHCARE INTEGRITY AND24PROTECTION DATA BANK; TRANSITION PROCESS.Effectiveupon the enactment of this subsection, the Sec

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7371retary shall implement a process to eliminate duplication

2between the Healthcare Integrity and Protection Data3Bank (in this subsection referred to as the HIPDB es4tablished pursuant to subsection (a) and the National5Practitioner Data Bank (in this subsection referred to as6the NPDB) as implemented under the Health Care Qual7ity Improvement Act of 1986 and section 1921 of this Act,8including systems testing necessary to ensure that infor9

mation formerly collected in the HIPDB will be accessible10through the NPDB, and other activities necessary to11eliminate duplication between the two data banks. Upon12the completion of such process, notwithstanding any other13provision of law, the Secretary shall cease the operation14of the HIPDB and shall collect information required to15be reported under the preceding provisions of this section

16in the NPDB. Except as otherwise provided in this sub17section, the provisions of subsections (a) through (g) shall18continue to apply with respect to the reporting of (or fail19ure to report), access to, and other treatment of the infor20mation specified in this section...21(b) ELIMINATION OF THE RESPONSIBILITY OF THE22HHS OFFICE OF THE INSPECTOR GENERAL.Section231128C(a)(1) of the Social Security Act (42 U.S.C. 1320a-247c(a)(1)) is amended

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7381(1) in subparagraph (C), by adding at the end

2and;3(2) in subparagraph (D), by striking at the end4, and and inserting a period; and(3) by striking subparagraph (E).6(c) SPECIAL PROVISION FOR ACCESS TO THE NA7TIONAL PRACTITIONER DATA BANK BY THE DEPART8MENT OF VETERANS AFFAIRS. 9

(1) IN GENERAL.Notwithstanding any otherprovision of law, during the one year period that be11

gins on the effective date specified in subsection12(e)(1), the information described in paragraph (2)13shall be available from the National Practitioner14Data Bank (described in section 1921 of the SocialSecurity Act) to the Secretary of Veterans Affairs16without charge.17

(2) INFORMATION DESCRIBED.For purposes18of paragraph (1), the information described in this19paragraph is the information that would, but for theamendments made by this section, have been avail21able to the Secretary of Veterans Affairs from the22Healthcare Integrity and Protection Data Bank.23(d) FUNDING.Notwithstanding any provisions of24this Act, sections 1128E(d)(2) and 1817(k)(3) of the SocialSecurity Act, or any other provision of law, there shall

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7391be available for carrying out the transition process under

2section 1128E(h) of the Social Security Act over the pe3riod required to complete such process, and for operation4of the National Practitioner Data Bank until such processis completed, without fiscal year limitation 6(1) any fees collected pursuant to section71128E(d)(2) of such Act; and8(2) such additional amounts as necessary, from

9appropriations available to the Secretary and to theOffice of the Inspector General of the Department of11Health and Human Services under clauses (i) and12(ii), respectively, of section 1817(k)(3)(A) of such13Act, for costs of such activities during the first 1214months following the date of the enactment of thisAct.16

(e) EFFECTIVE DATE.The amendments made 17(1) by subsection (a)(2) shall take effect on the18first day after the Secretary of Health and Human19Services certifies that the process implemented pursuantto section 1128E(h) of the Social Security Act21(as added by subsection (a)(3)) is complete; and22(2) by subsection (b) shall take effect on the23earlier of the date specified in paragraph (1) or the24first day of the second succeeding fiscal year afterthe fiscal year during which this Act is enacted.

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740

SEC. 1653. COMPLIANCE WITH HIPAA PRIVACY AND SECU

RITY STANDARDS.

The provisions of sections 262(a) and 264 of theHealth Insurance Portability and Accountability Act of1996 (and standards promulgated pursuant to such sections)and the Privacy Act of 1974 shall apply with respectto the provisions of this subtitle and amendments madeby this subtitle.

TITLE VIIMEDICAID AND CHIPSubtitle AMedicaid and Health

Reform

SEC. 1701. ELIGIBILITY FOR INDIVIDUALS WITH INCOME

BELOW 133-1/3 PERCENT OF THE FEDERAL

POVERTY LEVEL.

(a) ELIGIBILITY FOR NON-TRADITIONAL INDIVIDUALSWITH INCOME BELOW 133 PERCENT OF THE FEDERAL

POVERTY LEVEL. (1) IN GENERAL.Section 1902(a)(10)(A)(i) ofthe Social Security Act (42 U.S.C.1396b(a)(10)(A)(i) is amended (A) by striking or at the end of sub-clause (VI);(B) by adding or at the end of subclause(VII); and(C) by adding at the end the following newsubclause:f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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7411(VIII) who are under 65 years

2of age, who are not described in a pre3vious subclause of this clause, and4who are in families whose income (determinedusing methodologies and6procedures specified by the Secretary7in consultation with the Health8Choices Commissioner) does not ex9

ceed 133 1/3 percent of the incomeofficial poverty line (as defined by the11Office of Management and Budget,12and revised annually in accordance13with section 673(2) of the Omnibus14Budget Reconciliation Act of 1981)applicable to a family of the size in16volved;.17

(2) 100% FMAP FOR NON-TRADITIONAL MED18ICAID ELIGIBLE INDIVIDUALS.Section 1905 of19such Act (42 U.S.C. 1396d) is amended (A) in the third sentence of subsection (b)21by inserting before the period at the end the22following: and with respect to amounts de23scribed in subsection (y); and24(B) by adding at the end the following newsubsection:

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742

1(y) ADDITIONAL EXPENDITURES SUBJECT TO2100% FMAP.For purposes of section 1905(b), the3amounts described in this subsection are the following:4(1) Amounts expended for medical assistance5for individuals described in subclause (VIII) of sec6tion 1902(a)(10)(A)(i)..7

(3) CONSTRUCTION.Nothing in this sub8section shall be construed as not providing for cov9

erage under subclause (VIII) of section101902(a)(10)(A)(i) of the Social Security Act, as11added by paragraph (1) of, and an increased FMAP12under the amendment made by paragraph (2) for,13an individual who has been provided medical assist14ance under title XIX of the Act under a demonstra15tion waiver approved under section 1115 of such Act

16or with State funds.17(4) CONFORMING AMENDMENT.Section181903(f)(4) of the Social Security Act (42 U.S.C.191396b(f)(4)) is amended by inserting201902(a)(10)(A)(i)(VIII), after211902(a)(10)(A)(i)(VII),.22(b) ELIGIBILITY FOR TRADITIONAL MEDICAID ELI23GIBLE INDIVIDUALS WITH INCOME NOT EXCEEDING 133-241/3 PERCENT OF THE FEDERAL POVERTY LEVEL .

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7431(1) IN GENERAL.Section 1902(a)(10)(A)(i) of

2the Social Security Act (42 U.S.C.31396b(a)(10)(A)(i)), as amended by subsection (a),4is amended 5(A) by striking or at the end of sub6clause (VII);7(B) by adding or at the end of subclause8

(VIII); and9(C) by adding at the end the following new10subclause:11(IX) who are under 65 years of12age, who would be eligible for medical13assistance under the State plan under14one of subclauses (I) through (VII)

15(based on the income standards,16methodologies, and procedures in ef17fect as of June 16, 2009) but for in18come and who are in families whose19income does not exceed 1331/3 percent20of the income official poverty line (as21defined by the Office of Management22and Budget, and revised annually in23accordance with section 673(2) of the24Omnibus Budget Reconciliation Act of

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74411981) applicable to a family of the

2size involved;.3(2) 100% FMAP FOR CERTAIN TRADITIONAL4MEDICAID ELIGIBLE INDIVIDUALS.Section 1905(y)of such Act (42 U.S.C. 1396d(b)), as added by sub6section (a)(2)(B), is amended by inserting or (IX) 7after (VIII).8(3) CONSTRUCTION.Nothing in this sub9

section shall be construed as not providing for coverageunder subclause (IX) of section111902(a)(10)(A)(i) of the Social Security Act, as12added by paragraph (1) of, and an increased FMAP13under the amendment made by paragraph (2) for,14an individual who has been provided medical assistanceunder title XIX of the Act under a demonstra16tion waiver approved under section 1115 of such Act17

or with State funds.18(4) CONFORMING AMENDMENT.Section191903(f)(4) of the Social Security Act (42 U.S.C.1396b(f)(4)), as amended by subsection (a)(4), is21amended by inserting 1902(a)(10)(A)(i)(IX), after221902(a)(10)(A)(i)(VIII),.23(c) 100% MATCHING RATE FOR TEMPORARY COV24ERAGE OF CERTAIN NEWBORNS.Section 1905(y) ofsuch Act, as added by subsection (a)(2)(B), is amended

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7451(1) in paragraph (1), by inserting before the pe2

riod at the end the following: , and who is not pro3vided medical assistance under section 1943(b)(2) of4this title or section 205(d)(1)(B) of the Americas5Affordable Health Choices Act of 2009; and6(2) by adding at the end the following:7(2) Amounts expended for medical assistance8for children described in section 203(d)(1)(A) of the

9Americas Affordable Health Choices Act of 200910during the time period specified in such section..11(d) NETWORK ADEQUACY.Section 1932(a)(2) of12the Social Security Act (42 U.S.C. 1396u2(a)(2)) is13amended by adding at the end the following new subpara14graph:15(D) ENROLLMENT OF NON-TRADITIONAL

16MEDICAID ELIGIBLES.A State may not re17quire under paragraph (1) the enrollment in a18managed care entity of an individual described19in section 1902(a)(10)(A)(i)(VIII) unless the20State demonstrates, to the satisfaction of the21Secretary, that the entity, through its provider22network and other arrangements, has the ca23pacity to meet the health, mental health, and24substance abuse needs of such individuals..

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7461(e) EFFECTIVE DATE.The amendments made by

2this section shall take effect on the first day of Y1, and3shall apply with respect to items and services furnished4on or after such date.SEC. 1702. REQUIREMENTS AND SPECIAL RULES FOR CER6TAIN MEDICAID ELIGIBLE INDIVIDUALS.7(a) IN GENERAL.Title XIX of the Social Security8Act is amended by adding at the end the following new

9section: REQUIREMENTS AND SPECIAL RULES FOR CERTAIN11MEDICAID ELIGIBLE INDIVIDUALS12SEC. 1943. (a) COORDINATION WITH NHI EX13CHANGE THROUGH MEMORANDUM OF UNDER14STANDING. (1) IN GENERAL.The State shall enter into16a Medicaid memorandum of understanding described17

in section 204(e)(4) of the Americas Affordable18Health Choices Act of 2009 with the Health Choices19Commissioner, acting in consultation with the Secretary,with respect to coordinating the implementa21tion of the provisions of division A of such Act with22the State plan under this title in order to ensure the23enrollment of Medicaid eligible individuals in accept24able coverage. Nothing in this section shall be construedas permitting such memorandum to modify or

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7471vitiate any requirement of a State plan under this

2title.3(2) ENROLLMENT OF EXCHANGE-REFERRED4INDIVIDUALS. (A) NON-TRADITIONAL INDIVIDUALS. 6Pursuant to such memorandum the State shall7accept without further determination the enroll8ment under this title of an individual deter9

mined by the Commissioner to be a non-traditionalMedicaid eligible individual. The State11shall not do any redeterminations of eligibility12for such individuals unless the periodicity of13such redeterminations is consistent with the pe14riodicity for redeterminations by the Commissionerof eligibility for affordability credits16under subtitle C of title II of division A of the17

Americas Affordable Health Choices Act of182009, as specified under such memorandum.19(B) TRADITIONAL INDIVIDUALS. (i) REGULAR ENROLLMENT OP21TION.Pursuant to such memorandum,22insofar as the memorandum has selected23the option described in section24205(e)(3)(A) of the Americas AffordableHealth Choices Act of 2009, the State

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7481shall accept without further determination

2the enrollment under this title of an indi3vidual determined by the Commissioner to4be a traditional Medicaid eligible individual.The State may do redeterminations6of eligibility of such individual consistent7with such section and the memorandum.8(ii) PRESUMPTIVE ELIGIBILITY OP9

TION.Pursuant to such memorandum,insofar as the memorandum has selected

11the option described in section12205(e)(3)(B) of the Americas Affordable13Health Choices Act of 2009, the State14shall provide for making medical assistanceavailable during the presumptive eligibility16period and shall, upon application of the

17individual for medical assistance under this18title, promptly make a determination (and19subsequent redeterminations) of eligibilityin the same manner as if the individual21had applied directly to the State for such22assistance except that the State shall use23the income-related information used by the24Commissioner and provided to the Stateunder the memorandum in making the pre-

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7491sumptive eligibility determination to the

2maximum extent feasible.3(3) DETERMINATIONS OF ELIGIBILITY FOR4AFFORDABILITY CREDITS.If the Commissioner determinesthat a State Medicaid agency has the ca6pacity to make determinations of eligibility for af7fordability credits under subtitle C of title II of divi8sion A of the Americas Affordable Health Choices9Act of 2009, under such memorandum (A) the State Medicaid agency shall con11duct such determinations for any Exchange-eli12

gible individual who requests such a determina13tion;14(B) in the case that a State Medicaidagency determines that an Exchange-eligible in16dividual is not eligible for affordability credits,17the agency shall forward the information on the18basis of which such determination was made to19

the Commissioner; and(C) the Commissioner shall reimburse the21State Medicaid agency for the costs of con22ducting such determinations.23(b) TREATMENT OF CERTAIN NEWBORNS. 24(1) IN GENERAL.In the case of a child whois deemed under section 205(d)(1) of the Americas

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7501Affordable Health Choices Act of 2009 to be a non-

2traditional Medicaid eligible individual and enrolled3under this title pursuant to such section, the State4shall provide for a determination, by not later thanthe end of the period referred to in subparagraph6(A) of such section, of the childs eligibility for med7ical assistance under this title.8(2) EXTENDED TREATMENT AS TRADITIONAL

9MEDICAID ELIGIBLE INDIVIDUAL.In accordancewith subparagraph (B) of section 205(d)(1) of the11Americas Affordable Health Choices Act of 2009, in12the case of a child described in subparagraph (A) of13such section who at the end of the period referred14to in such subparagraph is not otherwise coveredunder acceptable coverage, the child shall be deemed16

(until such time as the child obtains such coverage17or the State otherwise makes a determination of the18childs eligibility for medical assistance under its19plan under this title pursuant to paragraph (1)) tobe a traditional Medicaid eligible individual de21scribed in section 1902(l)(1)(B).22(c) DEFINITIONS .In this section:23(1) MEDICAID ELIGIBLE INDIVIDUALS.In24this section, the terms Medicaid eligible individual,traditional Medicaid eligible individual, and non-

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7511traditional Medicaid eligible individual have the

2meanings given such terms in section 205(e)(5) of3the Americas Affordable Health Choices Act of42009.(2) MEMORANDUM.The term memorandum 6means a Medicaid memorandum of understanding7under section 205(e)(4) of the Americas Affordable8

Health Choices Act of 2009.9(3) Y1.The term Y1 has the meaning givensuch term in section 100(c) of the Americas Afford11able Health Choices Act of 2009..12(b) CONFORMING AMENDMENTS TO ERROR RATE. 13(1) Section 1903(u)(1)(D) of the Social Secu14rity Act (42 U.S.C. 1396b(u)(1)(D)) is amended byadding at the end the following new clause:16(vi) In determining the amount of erroneous excess

17payments, there shall not be included any erroneous pay18ments made that are attributable to an error in an eligi19bility determination under subtitle C of title II of divisionA of the Americas Affordable Health Choices Act of212009..22(2) Section 2105(c)(11) of such Act (42 U.S.C.231397ee(c)(11)) is amended by adding at the end the24following new sentence: Clause (vi) of section1903(u)(1)(D) shall apply with respect to the appli

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7521cation of such requirements under this title and title

2XIX..3SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.4(a) CHIP MAINTENANCE OF EFFORT.Section1902 of the Social Security Act (42 U.S.C. 1396a) is6amended 7(1) in subsection (a), as amended by section8

1631(b)(1)(D) 9

(A) by striking and at the end of paragraph(72);11(B) by striking the period at the end of12paragraph (73) and inserting ; and; and13(C) by inserting after paragraph (74) the14following new paragraph:(75) provide for maintenance of effort under

16the State child health plan under title XXI in ac17cordance with subsection (gg).; and18(2) by adding at the end the following new sub19section:(gg) CHIP MAINTENANCE OF EFFORT REQUIRE21MENT. 22(1) IN GENERAL.Subject to paragraph (2),23as a condition of its State plan under this title under24subsection (a)(75) and receipt of any Federal financialassistance under section 1903(a) for calendar

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7531quarters beginning after the date of the enactment

2of this subsection and before CHIP MOE termi3nation date specified in paragraph (3), a State shall4not have in effect eligibility standards, methodologies,or procedures under its State child health plan6under title XXI (including any waiver under such7title or under section 1115 that is permitted to con8tinue effect) that are more restrictive than the eligi9bility standards, methodologies, or procedures, respectively,

under such plan (or waiver) as in effect11on June 16, 2009.12(2) LIMITATION.Paragraph (1) shall not be13construed as preventing a State from imposing a14limitation described in section 2110(b)(5)(C)(i)(II)for a fiscal year in order to limit expenditures under16its State child health plan under title XXI to those17

for which Federal financial participation is available18under section 2105 for the fiscal year.19(3) CHIP MOE TERMINATION DATE.In paragraph(1), the CHIP MOE termination date for a21State is the date that is the first day of Y1 (as de22fined in section 100(c) of the Americas Affordable23Health Choices Act of 2009) or, if later, the first24day after such date that both of the following determinationshave been made:

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7541(A) The Health Choices Commissioner

2has determined that the Health Insurance Ex3change has the capacity to support the partici4pation of CHIP enrollees who are Exchange-eligibleindividuals (as defined in section 202(b) of6the Americas Affordable Health Choices Act of72009),8(B) The Secretary has determined that9

such Exchange, the State, and employers haveprocedures in effect to ensure the timely transi11tion without interruption of coverage of CHIP12enrollees from assistance under title XXI to ac13ceptable coverage (as defined for purposes of14such Act).In this paragraph, the term CHIP enrollee means16a targeted low-income child or (if the State has17elected the option under section 2112, a targeted

18low-income pregnant woman) who is or otherwise19would be (but for acceptable coverage) eligible forchild health assistance or pregnancy-related assist21ance, respectively, under the State child health plan22referred to in paragraph (1)..23(b) MEDICAID MAINTENANCE OF EFFORT; SIMPLI24FYING AND COORDINATING ELIGIBILITY RULES BETWEENEXCHANGE AND MEDICAID.

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755

1(1) IN GENERAL.Section 1903 of such Act2(42 U.S.C. 1396b) is amended by adding at the end3the following new subsection:4(aa) MAINTENANCE OF MEDICAID EFFORT; SIMPLI5FYING AND COORDINATING ELIGIBILITY RULES BE6TWEEN HEALTH INSURANCE EXCHANGE AND MED7ICAID. 8(1) MAINTENANCE OF EFFORT.

A State is9

not eligible for payment under subsection (a) for a10calendar quarter beginning after the date of the en11actment of this subsection if eligibility standards,12methodologies, or procedures under its plan under13this title (including any waiver under this title or14under section 1115 that is permitted to continue ef15fect) that are more restrictive than the eligibility

16standards, methodologies, or procedures, respec17tively, under such plan (or waiver) as in effect on18June 16, 2009. The Secretary shall extend such a19waiver (including the availability of Federal financial20participation under such waiver) for such period as21may be required for a State to meet the requirement22of the previous sentence.23(2) REMOVAL OF ASSET TEST FOR CERTAIN24ELIGIBILITY CATEGORIES.

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7561(A) IN GENERAL.A State is not eligible

2for payment under subsection (a) for a calendar3quarter beginning on or after the first day of4Y1 (as defined in section 100(c) of the Amer5icas Affordable Health Choices Act of 2009), if6the State applies any asset or resource test in7determining (or redetermining) eligibility of any8

individual on or after such first day under any9of the following:10(i) Subclause (I), (III), (IV), or (VI)11of section 1902(a)(10)(A)(i).12(ii) Subclause (II), (IX), (XIV) or13(XVII) of section 1902(a)(10)(A)(ii).14(iii) Section 1931(b).

15(B) OVERRIDING CONTRARY PROVISIONS;16REFERENCES.The provisions of this title that17prevent the waiver of an asset or resource test18described in subparagraph (A) are hereby19waived.20(C) REFERENCES.Any reference to a21provision described in a provision in subpara22graph (A) shall be deemed to be a reference to23such provision as modified through the applica24tion of subparagraphs (A) and (B)..

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7571(2) CONFORMING AMENDMENTS.(A) Section

21902(a)(10)(A) of such Act (42 U.S.C.31396a(a)(10)(A)) is amended, in the matter before4clause (i), by inserting subject to section1903(aa)(2), after (A).6(B) Section 1931(b)(2) of such Act (42 U.S.C.71396u1(b)(1)) is amended by inserting subject to8

section 1903(aa)(2)

afterand (3)

.9

(c) STANDARDS FOR BENCHMARK PACKAGES.Section1937(b) of such Act (42 U.S.C. 1396u7(b)) is11amended 12(1) in paragraph (1), by inserting subject to13paragraph (5); and14(2) by adding at the end the following newparagraph:

16(5) MINIMUM STANDARDS.Effective January171, 2013, any benchmark benefit package (or bench18mark equivalent coverage under paragraph (2))19must meet the minimum benefits and cost-sharingstandards of a basic plan offered through the Health21Insurance Exchange..22SEC. 1704. REDUCTION IN MEDICAID DSH.23(a) REPORT. 24(1) IN GENERAL.Not later than January 1,2016, the Secretary of Health and Human Services

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7581(in this title referred to as the Secretary) shall

2submit to Congress a report concerning the extent to3which, based upon the impact of the health care re4forms carried out under division A in reducing the5number of uninsured individuals, there is a contin6ued role for Medicaid DSH. In preparing the report,7the Secretary shall consult with community-based8health care networks serving low-income bene9

ficiaries.10(2) MATTERS TO BE INCLUDED.The report11shall include the following:12(A) RECOMMENDATIONS.Recommenda13tions regarding 14(i) the appropriate targeting of Med15icaid DSH within States; and16(ii) the distribution of Medicaid DSH

17among the States.18(B) SPECIFICATION OF DSH HEALTH RE19FORM METHODOLOGY.The DSH Health Re20form methodology described in paragraph (2) of21subsection (b) for purposes of implementing the22requirements of such subsection.23(3) COORDINATION WITH MEDICARE DSH RE24PORT.The Secretary shall coordinate the report

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7591under this subsection with the report on Medicare

2DSH under section 1112.3(4) MEDICAID DSH.In this section, the term4Medicaid DSH means adjustments in payments5under section 1923 of the Social Security Act for in6patient hospital services furnished by dispropor7tionate share hospitals.8(b) MEDICAID DSH REDUCTIONS.

9(1) IN GENERAL.The Secretary shall reduce10Medicaid DSH so as to reduce total Federal pay11ments to all States for such purpose by12$1,500,000,000 in fiscal year 2017, $2,500,000,00013in fiscal year 2018, and $6,000,000,000 in fiscal14year 2019.15(2) DSH HEALTH REFORM METHODOLOGY.

16The Secretary shall carry out paragraph (1) through17use of a DSH Health Reform methodology issued by18the Secretary that imposes the largest percentage re19ductions on the States that 20(A) have the lowest percentages of unin21sured individuals (determined on the basis of22audited hospital cost reports) during the most23recent year for which such data are available;24or

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7601(B) do not target their DSH payments

2on 3(i) hospitals with high volumes of4Medicaid inpatients (as defined in section51923(b)(1)(A) of the Social Security Act6(42 U.S.C. 1396r4(b)(1)(A)); and7(ii) hospitals that have high levels of

8uncompensated care (excluding bad debt).9(3) DSH ALLOTMENT PUBLICATIONS. 10(A) IN GENERAL.Not later than the pub11lication deadline specified in subparagraph (B),12the Secretary shall publish in the Federal Reg13ister a notice specifying the DSH allotment to14each State under 1923(f) of the Social Security15

Act for the respective fiscal year specified in16such subparagraph, consistent with the applica17tion of the DSH Health Reform methodology18described in paragraph (2).19(B) PUBLICATAION DEADLINE.The pub20lication deadline specified in this subparagraph21is 22(i) January 1, 2016, with respect to23DSH allotments described in subparagraph24(A) for fiscal year 2017;

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7611(ii) January 1, 2017, with respect to

2DSH allotments described in subparagraph3(A) for fiscal year 2018; and4(iii) January 1, 2018, with respect toDSH allotments described in subparagraph6(A) for fiscal year 2019.7(c) CONFORMING AMENDMENTS. 8

(1) Section 1923(f) of the Social Security Act9(42 U.S.C. 1396r4(f)) is amended (A) by redesignating paragraph (7) as11paragraph (8); and12(B) by inserting after paragraph (6) the13following new paragraph:14(7) SPECIAL RULE FOR FISCAL YEARS 2017,2018, AND 2019.

16(A) FISCAL YEAR 2017.Notwithstanding17paragraph (2), the total DSH allotments for all18States for 19(i) fiscal year 2017, shall be the totalDSH allotments that would otherwise be21determined under this subsection for such22fiscal year decreased by $1,500,000,000;23(ii) fiscal year 2018, shall be the24total DSH allotments that would otherwisebe determined under this subsection for

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762

1such fiscal year decreased by2$2,500,000,000; and3(iii) fiscal year 2019, shall be the4total DSH allotments that would otherwisebe determined under this subsection for6such fiscal year decreased by7

$6,000,000,000..8

(2) Section 1923(b)(4) of such Act (42 U.S.C.91396r4(b)(4)) is amended by adding before the periodthe following: or to affect the authority of the11Secretary to issue and implement the DSH Health12Reform methodology under section 1704(b)(2) of the13Americas Health Choices Act of 2009.14

(d) DISPROPORTIONATE SHARE HOSPITALS (DSH)AND ESSENTIAL ACCESS HOSPITAL (EAH) NON-DIS16CRIMINATION. 17(1) IN GENERAL.Section 1923(d) of the So18cial Security Act (42 U.S.C. 1396r-4) is amended by19adding at the end the following new paragraph:(4) No hospital may be defined or deemed as21a disproportionate share hospital, or as an essential22access hospital (for purposes of subsection23(f)(6)(A)(iv), under a State plan under this title or24subsection (b) of this section (including any waiverunder section 1115) unless the hospital

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763

1(A) provides services to beneficiaries2under this title without discrimination on the3ground of race, color, national origin, creed,4source of payment, status as a beneficiaryunder this title, or any other ground unrelated6to such beneficiarys need for the services or the7

availability of the needed services in the hos8pital; and9(B) makes arrangements for, and accepts,reimbursement under this title for services pro11vided to eligible beneficiaries under this title..12(2) EFFECTIVE DATE.The amendment made13by subsection (a) shall be apply to expenditures14made on or after July 1, 2010.SEC. 1705. EXPANDED OUTSTATIONING.

16(a) IN GENERAL.Section 1902(a)(55) of the Social17Security Act (42 U.S.C. 1396a(a)(55)) is amended by18striking under subsection (a)(10)(A)(i)(IV),19(a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or(a)(10)(A)(ii)(IX) and inserting (including receipt and21processing of applications of individuals for affordability22credits under subtitle C of title II of division A of the23Americas Affordable Health Choices Act of 2009 pursu24ant to a Medicaid memorandum of understanding undersection 1943(a)(1)).

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7641(b) EFFECTIVE DATE.

2(1) Except as provided in paragraph (2), the3amendment made by subsection (a) shall apply to4services furnished on or after July 1, 2010, withoutregard to whether or not final regulations to carry6out such amendment have been promulgated by such7date.8

(2) In the case of a State plan for medical as9sistance under title XIX of the Social Security Actwhich the Secretary of Health and Human Services11determines requires State legislation (other than leg12islation appropriating funds) in order for the plan to13meet the additional requirement imposed by the14amendment made by this section, the State planshall not be regarded as failing to comply with the16requirements of such title solely on the basis of its

17failure to meet this additional requirement before18the first day of the first calendar quarter beginning19after the close of the first regular session of theState legislature that begins after the date of the en21actment of this Act. For purposes of the previous22sentence, in the case of a State that has a 2-year23legislative session, each year of such session shall be24deemed to be a separate regular session of the Statelegislature.

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7651Subtitle BPrevention

2SEC. 1711. REQUIRED COVERAGE OF PREVENTIVE SERV3ICES.4(a) COVERAGE.Section 1905 of the Social SecurityAct (42 U.S.C. 1396d), as amended by section61701(a)(2)(B), is amended 7(1) in subsection (a)(4) 8(A) by striking and before (C); and

9(B) by inserting before the semicolon atthe end the following: and (D) preventive serv11ices described in subsection (z); and12(2) by adding at the end the following new sub13section:14(z) PREVENTIVE SERVICES.The preventive servicesdescribed in this subsection are services not otherwise16described in subsection (a) or (r) that the Secretary deter17mines are

18(1)(A) recommended with a grade of A or B19by the Task Force for Clinical Preventive Services;or21(B) vaccines recommended for use as appro22priate by the Director of the Centers for Disease23Control and Prevention; and24(2) appropriate for individuals entitled to medicalassistance under this title..

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7661(b) CONFORMING AMENDMENT.Section 1928 of

2such Act (42 U.S.C. 1396s) is amended 3(1) in subsection (c)(2)(B)(i), by striking the4advisory committee referred to in subsection (e) and inserting the Director of the Centers for Dis6ease Control and Prevention ;7(2) in subsection (e), by striking Advisory8Committee and all that follows and inserting Di9

rector of the Centers for Disease Control and Prevention.;and

11(3) by striking subsection (g).12(c) EFFECTIVE DATE. 13(1) Except as provided in paragraph (2), the14amendments made by this section shall apply toservices furnished on or after July 1, 2010, without16regard to whether or not final regulations to carry

17out such amendments have been promulgated by18such date.19(2) In the case of a State plan for medical assistanceunder title XIX of the Social Security Act21which the Secretary of Health and Human Services22determines requires State legislation (other than leg23islation appropriating funds) in order for the plan to24meet the additional requirements imposed by theamendments made by this section, the State plan

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7671shall not be regarded as failing to comply with the

2requirements of such title solely on the basis of its3failure to meet these additional requirements before4the first day of the first calendar quarter beginningafter the close of the first regular session of the6State legislature that begins after the date of the en7actment of this Act. For purposes of the previous8sentence, in the case of a State that has a 2-year

9legislative session, each year of such session shall bedeemed to be a separate regular session of the State11legislature.12SEC. 1712. TOBACCO CESSATION.13(a) DROPPING TOBACCO CESSATION EXCLUSION14FROM COVERED OUTPATIENT DRUGS.Section1927(d)(2) of the Social Security Act (42 U.S.C. 1396r 16

8(d)(2)) is amended 17(1) by striking subparagraph (E);18(2) in subparagraph (G), by inserting before the19period at the end the following: , except agents approvedby the Food and Drug Administration for21purposes of promoting, and when used to promote,22tobacco cessation; and23(3) by redesignating subparagraphs (F)24through (K) as subparagraphs (E) through (J), respectively.

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7681(b) EFFECTIVE DATE.The amendments made by

2this section shall apply to drugs and services furnished3on or after January 1, 2010.4SEC. 1713. OPTIONAL COVERAGE OF NURSE HOME VISITA5TION SERVICES.6(a) IN GENERAL.Section 1905 of the Social Secu7rity Act (42 U.S.C. 1396d), as amended by sections81701(a)(2) and 1711(a), is amended

9(1) in subsection (a) 10(A) in paragraph (27), by striking and 11at the end;12(B) by redesignating paragraph (28) as13paragraph (29); and14(C) by inserting after paragraph (27) the15

following new paragraph:16(28) nurse home visitation services (as defined17in subsection (aa)); and; and.18(2) by adding at the end the following new sub19section:20(aa) The term nurse home visitation services 21means home visits by trained nurses to families with a22first-time pregnant woman, or a child (under 2 years of23age), who is eligible for medical assistance under this title,24but only, to the extent determined by the Secretary based

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7691upon evidence, that such services are effective in one or

2more of the following:3(1) Improving maternal or child health and4pregnancy outcomes or increasing birth intervals betweenpregnancies.6(2) Reducing the incidence of child abuse, ne7glect, and injury, improving family stability (includ8ing reduction in the incidence of intimate partner vi9olence), or reducing maternal and child involvement

in the criminal justice system.11(3) Increasing economic self-sufficiency, em12ployment advancement, school-readiness, and edu13cational achievement, or reducing dependence on14public assistance..(b) EFFECTIVE DATE.The amendments made by16this section shall apply to services furnished on or after17January 1, 2010.18

(c) CONSTRUCTION.Nothing in the amendments19made by this section shall be construed as affecting theability of a State under title XIX or XXI of the Social21Security Act to provide nurse home visitation services as22part of another class of items and services falling within23the definition of medical assistance or child health assist24ance under the respective title, or as an administrative expenditurefor which payment is made under section

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77011903(a) or 2105(a) of such Act, respectively, on or after

2the date of the enactment of this Act.3SEC. 1714. STATE ELIGIBILITY OPTION FOR FAMILY PLAN4NING SERVICES.5(a) COVERAGE AS OPTIONAL CATEGORICALLY6NEEDY GROUP. 7(1) IN GENERAL.Section 1902(a)(10)(A)(ii)8

of the Social Security Act (42 U.S.C.91396a(a)(10)(A)(ii)) is amended 10(A) in subclause (XVIII), by striking or 11at the end;12(B) in subclause (XIX), by adding or at13the end; and14(C) by adding at the end the following new

15subclause:16(XX) who are described in subsection (hh) (re17lating to individuals who meet certain income stand18ards);.19(2) GROUP DESCRIBED.Section 1902 of such20Act (42 U.S.C. 1396a), as amended by section 1703,21is amended by adding at the end the following new22subsection:23(hh)(1) Individuals described in this subsection are24individuals

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7711(A) whose income does not exceed an in2

come eligibility level established by the State3that does not exceed the highest income eligi4bility level established under the State plan5under this title (or under its State child health6plan under title XXI) for pregnant women; and7(B) who are not pregnant.8(2) At the option of a State, individuals de9

scribed in this subsection may include individuals10who, had individuals applied on or before January 1,112007, would have been made eligible pursuant to the12standards and processes imposed by that State for13benefits described in clause (XV) of the matter fol14lowing subparagraph (G) of section subsection15(a)(10) pursuant to a waiver granted under section16

1115.17(3) At the option of a State, for purposes of18subsection (a)(17)(B), in determining eligibility for19services under this subsection, the State may con20sider only the income of the applicant or recipient..21(3) LIMITATION ON BENEFITS.Section221902(a)(10) of such Act (42 U.S.C. 1396a(a)(10))23is amended in the matter following subparagraph24(G)

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7721(A) by striking and (XIV) and inserting

2(XIV); and3(B) by inserting , and (XV) the medical4assistance made available to an individual de5scribed in subsection (hh) shall be limited to6family planning services and supplies described7in section 1905(a)(4)(C) including medical di8agnosis and treatment services that are pro9

vided pursuant to a family planning service in10a family planning setting after cervical can11cer.12(4) CONFORMING AMENDMENTS.Section131905(a) of such Act (42 U.S.C. 1396d(a)), as14amended by section 1731(c), is amended in the mat15ter preceding paragraph (1) 16(A) in clause (xiii), by striking or at the

17end;18(B) in clause (xiv), by adding or at the19end; and20(C) by inserting after clause (xiv) the fol21lowing:22(xv) individuals described in section231902(hh),.24(b) PRESUMPTIVE ELIGIBILITY.

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773

(1) IN GENERAL.Title XIX of the Social Security

Act (42 U.S.C. 1396 et seq.) is amended byinserting after section 1920B the following:PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNINGSERVICES

SEC. 1920C. (a) STATE OPTION.State plan approvedunder section 1902 may provide for making medicalassistance available to an individual described in section1902(hh) (relating to individuals who meet certainincome eligibility standard) during a presumptive eligibilityperiod. In the case of an individual described in section1902(hh), such medical assistance shall be limited to

family planning services and supplies described in1905(a)(4)(C) and, at the States option, medical diagnosisand treatment services that are provided in conjunctionwith a family planning service in a family planningsetting.

(b) DEFINITIONS.For purposes of this section:

(1) PRESUMPTIVE ELIGIBILITY PERIOD.Theterm presumptive eligibility period means, with respectto an individual described in subsection (a),the period that

(A) begins with the date on which aqualified entity determines, on the basis of preliminaryinformation, that the individual is describedin section 1902(hh); and

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7741(B) ends with (and includes) the earlier

2of 3(i) the day on which a determination4is made with respect to the eligibility of5such individual for services under the State6plan; or7(ii) in the case of such an individual

8who does not file an application by the last9day of the month following the month dur10ing which the entity makes the determina11tion referred to in subparagraph (A), such12last day.13(2) QUALIFIED ENTITY. 14(A) IN GENERAL.Subject to subpara15graph (B), the term qualified entity means

16any entity that 17(i) is eligible for payments under a18State plan approved under this title; and19(ii) is determined by the State agen20cy to be capable of making determinations21of the type described in paragraph (1)(A).22(B) RULE OF CONSTRUCTION.Nothing23in this paragraph shall be construed as pre24venting a State from limiting the classes of en-

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7751tities that may become qualified entities in

2order to prevent fraud and abuse.3(c) ADMINISTRATION. 4(1) IN GENERAL.The State agency shall providequalified entities with 6(A) such forms as are necessary for an7application to be made by an individual de8scribed in subsection (a) for medical assistance

9under the State plan; and(B) information on how to assist such in11dividuals in completing and filing such forms.12(2) NOTIFICATION REQUIREMENTS.A quali13fied entity that determines under subsection14(b)(1)(A) that an individual described in subsection(a) is presumptively eligible for medical assistance16under a State plan shall 17

(A) notify the State agency of the deter18mination within 5 working days after the date19on which determination is made; and(B) inform such individual at the time21the determination is made that an application22for medical assistance is required to be made by23not later than the last day of the month fol24lowing the month during which the determinationis made.

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776

1(3) APPLICATION FOR MEDICAL ASSIST2ANCE.In the case of an individual described in3subsection (a) who is determined by a qualified enti4ty to be presumptively eligible for medical assistanceunder a State plan, the individual shall apply for6medical assistance by not later than the last day of7the month following the month during which the de8termination is made.

9(d) PAYMENT.Notwithstanding any other provisionof law, medical assistance that 11(1) is furnished to an individual described in12subsection (a) 13(A) during a presumptive eligibility pe14riod;(B) by a entity that is eligible for pay16ments under the State plan; and17

(2) is included in the care and services covered18by the State plan,19shall be treated as medical assistance provided by suchplan for purposes of clause (4) of the first sentence of21section 1905(b)..22(2) CONFORMING AMENDMENTS. 23(A) Section 1902(a)(47) of the Social Se24curity Act (42 U.S.C. 1396a(a)(47)) is amendedby inserting before the semicolon at the end

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7771the following: and provide for making medical

2assistance available to individuals described in3subsection (a) of section 1920C during a pre4sumptive eligibility period in accordance withsuch section.6(B) Section 1903(u)(1)(D)(v) of such Act7(42 U.S.C. 1396b(u)(1)(D)(v)) is amended 8(i) by striking or for and inserting

9for; and(ii) by inserting before the period the11following: , or for medical assistance pro12vided to an individual described in sub13section (a) of section 1920C during a pre14sumptive eligibility period under such section.16(c) CLARIFICATION OF COVERAGE OF FAMILY PLAN17NING SERVICES AND SUPPLIES.Section 1937(b) of the18Social Security Act (42 U.S.C. 1396u7(b)) is amended

19by adding at the end the following:(5) COVERAGE OF FAMILY PLANNING SERV21ICES AND SUPPLIES.Notwithstanding the previous22provisions of this section, a State may not provide23for medical assistance through enrollment of an indi24vidual with benchmark coverage or benchmark-equivalentcoverage under this section unless such cov

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7791care services under such section if furnished by

2a physician) at a rate not less than 80 percent3of the payment rate applicable to such services4and physicians or professionals (as the casemay be) under part B of title XVIII for services6furnished in 2010, 90 percent of such rate for7services and physicians (or professionals) fur8nished in 2011, and 100 percent of such pay9

ment rate for services and physicians (or professionals)furnished in 2012 or a subsequent11year;.12(2) UNDER MEDICAID MANAGED CARE13PLANS.Section 1923(f) of such Act (42 U.S.C.141396u2(f)) is amended (A) in the heading, by adding at the end16the following: ; ADEQUACY OF PAYMENT FOR

17PRIMARY CARE SERVICES; and18(B) by inserting before the period at the19end the following: and, in the case of primarycare services described in section211902(a)(13)(C), consistent with the minimum22payment rates specified in such section (regard23less of the manner in which such payments are24made, including in the form of capitation orpartial capitation).

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7801(b) INCREASE IN PAYMENT USING 100% FMAP.

2Section 1905(y), as added by section 1701(a)(2)(B) and3as amended by section 1701(c)(2), is amended by adding4at the end the following:(3)(A) The portion of the amounts expended6for medical assistance for services described in sec7tion 1902(a)(13)(C) furnished on or after January81, 2010, that is attributable to the amount by which

9the minimum payment rate required under such section(or, by application, section 1932(f)) exceeds the11payment rate applicable to such services under the12State plan as of June 16, 2009.13(B) Subparagraphs (A) shall not be construed14as preventing the payment of Federal financial participationbased on the Federal medical assistance16

percentage for amounts in excess of those specified17under such subparagraphs..18(c) EFFECTIVE DATE.The amendments made by19this section shall apply to services furnished on or afterJanuary 1, 2010.21SEC. 1722. MEDICAL HOME PILOT PROGRAM.22(a) IN GENERAL.The Secretary of Health and23Human Services shall establish under this section a med24ical home pilot program under which a State may applyto the Secretary for approval of a medical home pilot

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7811project described in subsection (b) (in this section referred

2to as a pilot project) for the application of the medical3home concept under title XIX of the Social Security Act.4The pilot program shall operate for a period of up to 55years.6(b) PILOT PROJECT DESCRIBED. 7(1) IN GENERAL.A pilot project is a project

8that applies one or more of the medical home models9described in section 1866E(a)(3) of the Social Secu10rity Act (as inserted by section 1302(a)) or such11other model as the Secretary may approve, to high12need beneficiaries (including medically fragile chil13dren and high-risk pregnant women) who are eligible14for medical assistance under title XIX of the Social15

Security Act. The Secretary shall provide for appro16priate coordination of the pilot program under this17section with the medical home pilot program under18section 1866E of such Act.19(2) LIMITATION.A pilot project shall be for a20duration of not more than 5 years.21(c) ADDITIONAL INCENTIVES.In the case of a pilot22project, the Secretary may 23(1) waive the requirements of section241902(a)(1) of the Social Security Act (relating to

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7821statewideness) and section 1902(a)(10)(B) of such

2Act (relating to comparability); and3(2) increase to up to 90 percent (for the first42 years of the pilot program) or 75 percent (for thenext 3 years) the matching percentage for adminis6trative expenditures (such as those for community7care workers).8(d) MEDICALLY FRAGILE CHILDREN.In the case of

9a model involving medically fragile children, the modelshall ensure that the patient-centered medical home serv11ices received by each child, in addition to fulfilling the re12quirements under 1866E(b)(1) of the Social Security Act,13provide for continuous involvement and education of the14parent or caregiver and for assistance to the child in obtainingnecessary transitional care if a childs enrollment16ceases for any reason.17

(e) EVALUATION; REPORT. 18(1) EVALUATION.The Secretary, using the19criteria described in section 1866E(g)(1) of the SocialSecurity Act (as inserted by section 1123), shall21conduct an evaluation of the pilot program under22this section.23(2) REPORT.Not later than 60 days after the24date of completion of the evaluation under paragraph(1), the Secretary shall submit to Congress

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7831and make available to the public a report on the

2findings of the evaluation under such paragraph.3(f) FUNDING.The additional Federal financial par4ticipation resulting from the implementation of the pilot5program under this section may not exceed in the aggre6gate $1,235,000,000 over the 5-year period of the pro7gram.8SEC. 1723. TRANSLATION OR INTERPRETATION SERVICES.9

(a) IN GENERAL.Section 1903(a)(2)(E) of the So10cial Security Act (42 U.S.C. 1396b(a)(2)), as added by

11section 201(b)(2)(A) of the Childrens Health Insurance12Program Reauthorization Act of 2009 (Public Law 111 133), is amended by inserting and other individuals after14children of families.15(b) EFFECTIVE DATE.The amendment made by16

subsection (a) shall apply to payment for translation or17interpretation services furnished on or after January 1,182010.19SEC. 1724. OPTIONAL COVERAGE FOR FREESTANDING20BIRTH CENTER SERVICES.21(a) IN GENERAL.Section 1905 of the Social Secu22rity Act (42 U.S.C. 1396d), as amended by section231713(a), is amended 24(1) in subsection (a)

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7841(A) by redesignating paragraph (29) as

2paragraph (30);3(B) in paragraph (28), by striking at the4end and; and(C) by inserting after paragraph (28) the6following new paragraph:7(29) freestanding birth center services (as de8fined in subsection (l)(3)(A)) and other ambulatory

9services that are offered by a freestanding birth center(as defined in subsection (l)(3)(B)) and that are11otherwise included in the plan; and; and12(2) in subsection (l), by adding at the end the13following new paragraph:14(3)(A) The term freestanding birth center services means services furnished to an individual at a freestanding16

birth center (as defined in subparagraph (B)), including17by a licensed birth attendant (as defined in subparagraph18(C)) at such center.19(B) The term freestanding birth center means ahealth facility 21(i) that is not a hospital; and22(ii) where childbirth is planned to occur away23from the pregnant womans residence.24(C) The term licensed birth attendant means anindividual who is licensed or registered by the State in-

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7851volved to provide health care at childbirth and who pro2

vides such care within the scope of practice under which3the individual is legally authorized to perform such care4under State law (or the State regulatory mechanism pro5vided by State law), regardless of whether the individual6is under the supervision of, or associated with, a physician7or other health care provider. Nothing in this subpara8graph shall be construed as changing State law require9ments applicable to a licensed birth attendant..

10(b) EFFECTIVE DATE.The amendments made by11this section shall apply to items and services furnished on12or after the date of the enactment of this Act.13SEC. 1725. INCLUSION OF PUBLIC HEALTH CLINICS UNDER14THE VACCINES FOR CHILDREN PROGRAM.15Section 1928(b)(2)(A)(iii)(I) of the Social Security16

Act (42 U.S.C. 1396s(b)(2)(A)(iii)(I)) is amended 17(1) by striking or a rural health clinic and in18serting , a rural health clinic; and19(2) by inserting or a public health clinic, 20after 1905(l)(1)),.

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7861Subtitle DCoverage

2SEC. 1731. OPTIONAL MEDICAID COVERAGE OF LOW-IN3COME HIV-INFECTED INDIVIDUALS.4(a) IN GENERAL. Section 1902 of the Social SecurityAct (42 U.S.C. 1396a), as amended by section61714(a)(1), is amended 7(1) in subsection (a)(10)(A)(ii) 8(A) by striking or at the end of sub9

clause (XIX);(B) by adding or at the end of subclause11(XX); and12(C) by adding at the end the following:13(XXI) who are described in subsection (ii) (re14lating to HIV-infected individuals);; and(2) by adding at the end, as amended by sec16tions 1703 and 1714(a), the following:17(ii) individuals described in this subsection are indi18

viduals not described in subsection (a)(10)(A)(i) 19(1) who have HIV infection;(2) whose income (as determined under the21State plan under this title with respect to disabled22individuals) does not exceed the maximum amount23of income a disabled individual described in sub24section (a)(10)(A)(i) may have and obtain medicalassistance under the plan; and

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7871(3) whose resources (as determined under the

2State plan under this title with respect to disabled3individuals) do not exceed the maximum amount of4resources a disabled individual described in sub5section (a)(10)(A)(i) may have and obtain medical6assistance under the plan..7(b) ENHANCED MATCH.The first sentence of sec8tion 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended

9by striking section 1902(a)(10)(A)(ii)(XVIII) and in10serting subclause (XVIII) or (XX) of section111902(a)(10)(A)(ii).12(c) CONFORMING AMENDMENTS.Section 1905(a) of13such Act (42 U.S.C. 1396d(a)) is amended, in the matter14preceding paragraph (1) 15(1) by striking or at the end of clause (xii);

16(2) by adding or at the end of clause (xiii);17and18(3) by inserting after clause (xiii) the following:19(xiv) individuals described in section201902(ii),.21(d) EXEMPTION FROM FUNDING LIMITATION FOR22TERRITORIES.Section 1108(g) of the Social Security23Act (42 U.S.C. 1308(g)) is amended by adding at the end24the following:

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7881(5) DISREGARDING MEDICAL ASSISTANCE FOR

2OPTIONAL LOW-INCOME HIV-INFECTED INDIVID3UALS.The limitations under subsection (f) and the4previous provisions of this subsection shall not apply5to amounts expended for medical assistance for indi6viduals described in section 1902(ii) who are only el7igible for such assistance on the basis of section81902(a)(10)(A)(ii)(XX)..9

(e) EFFECTIVE DATE; SUNSET.The amendments10

made by this section shall apply to expenditures for cal11endar quarters beginning on or after the date of the enact12ment of this Act, and before January 1, 2013, without13regard to whether or not final regulations to carry out14such amendments have been promulgated by such date.15SEC. 1732. EXTENDING TRANSITIONAL MEDICAID ASSIST16ANCE (TMA).17

Sections 1902(e)(1)(B) and 1925(f) of the Social Se18curity Act (42 U.S.C. 1396a(e)(1)(B), 1396r6(f)), as19amended by section 5004(a)(1) of the American Recovery20and Reinvestment Act of 2009 (Public Law 1115), are21each amended by striking December 31, 2010 and in22serting December 31, 2012.

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789

SEC. 1733. REQUIREMENT OF 12-MONTH CONTINUOUS COV

ERAGE UNDER CERTAIN CHIP PROGRAMS.

(a) IN GENERAL.Section 2102(b) of the Social SecurityAct (42 U.S.C. 1397bb(b)) is amended by addingat the end the following new paragraph:(6) REQUIREMENT FOR 12-MONTH CONTINUOUSELIGIBILITY.In the case of a State childhealth plan that provides child health assistanceunder this title through a means other than describedin section 2101(a)(2), the plan shall provide

for implementation under this title of the 12-monthcontinuous eligibility option described in section1902(e)(12) for targeted low-income children whosefamily income is below 200 percent of the povertyline..

(b) EFFECTIVE DATE.The amendment made bysubsection (a) shall apply to determinations (and redeterminations)of eligibility made on or after January 1, 2010.Subtitle EFinancing

SEC. 1741. PAYMENTS TO PHARMACISTS.

(a) PHARMACY REIMBURSEMENT LIMITS. (1) IN GENERAL.Section 1927(e) of the SocialSecurity Act (42 U.S.C. 1396r8(e)) is amended (A) by striking paragraph (5) and insertingthe following:f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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7901(5) USE OF AMP IN UPPER PAYMENT LIM2

ITS.The Secretary shall calculate the Federal3upper reimbursement limit established under para4graph (4) as 130 percent of the weighted average5(determined on the basis of manufacturer utiliza6tion) of monthly average manufacturer prices. 7(2) DEFINITION OF AMP.Section81927(k)(1)(B) of such Act (42 U.S.C. 1396r 9

8(k)(1)(B)) is amended 10

(B) in the heading, by striking EX11TENDED TO WHOLESALERS and inserting12AND OTHER PAYMENTS; and13(C) by striking regard to and all that14follows through the period and inserting the fol15lowing: regard to 16(i) customary prompt pay discounts

17extended to wholesalers;18(ii) bona fide service fees paid by19manufacturers;20(iii) reimbursement by manufactur21ers for recalled, damaged, expired, or oth22erwise unsalable returned goods, including23reimbursement for the cost of the goods24and any reimbursement of costs associated

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7911with return goods handling and processing,

2reverse logistics, and drug destruction;3(iv) sales directly to, or rebates, dis4counts, or other price concessions provided5to, pharmacy benefit managers, managed6care organizations, health maintenance or7ganizations, insurers, mail order phar8macies that are not open to all members of9

the public, or long term care providers,10provided that these rebates, discounts, or11price concessions are not passed through to12retail pharmacies;13(v) sales directly to, or rebates, dis14counts, or other price concessions provided15to, hospitals, clinics, and physicians, unless16

the drug is an inhalation, infusion, or17injectable drug, or unless the Secretary de18termines, as allowed for in Agency admin19istrative procedures, that it is necessary to20include such sales, rebates, discounts, and21price concessions in order to obtain an ac22curate AMP for the drug. Such a deter23mination shall not be subject to judicial re24view; or

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7921(vi) rebates, discounts, and other

2price concessions required to be provided3under agreements under subsections (f)4and (g) of section 1860D2(f)..5(3) MANUFACTURER REPORTING REQUIRE6MENTS.Section 1927(b)(3) of such Act (42 U.S.C.71396r8(b)(3)) is amended 8

(A) in subparagraph (A), by adding at the9end the following new clause:10(iv) not later than 30 days after the11last day of each month of a rebate period12under the agreement, on the manufactur13ers total number of units that are used to14calculate the monthly average manufac15turer price for each covered outpatient

16drug. 17(4) AUTHORITY TO PROMULGATE REGULA18TION.The Secretary of Health and Human Serv19ices may promulgate regulations to clarify the re20quirements for upper payment limits and for the de21termination of the average manufacturer price in an22expedited manner. Such regulations may become ef23fective on an interim final basis, pending oppor24tunity for public comment.

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7931(5) PHARMACY REIMBURSEMENTS THROUGH

2DECEMBER 31, 2010.The specific upper limit under3section 447.332 of title 42, Code of Federal Regula4tions (as in effect on December 31, 2006) applicable5to payments made by a State for multiple source6drugs under a State Medicaid plan shall continue to7apply through December 31, 2010, for purposes of8

the availability of Federal financial participation for9such payments.10(b) DISCLOSURE OF PRICE INFORMATION TO THE11PUBLIC.Section 1927(b)(3) of such Act (42 U.S.C.121396r8(b)(3)) is amended 13(1) in subparagraph (A) 14(A) in clause (i), in the matter preceding

15subclause (I), by inserting month of a after16each; and17(B) in the last sentence, by striking and18shall, and all that follows through the period;19and20(2) in subparagraph (D)(v), by inserting21weighted before average manufacturer prices.22SEC. 1742. PRESCRIPTION DRUG REBATES.23(a) ADDITIONAL REBATE FOR NEW FORMULATIONS24OF EXISTING DRUGS.

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794

1(1) IN GENERAL.Section 1927(c)(2) of the2Social Security Act (42 U.S.C. 1396r8(c)(2)) is3amended by adding at the end the following new4subparagraph:(C) TREATMENT OF NEW FORMULA6TIONS.In the case of a drug that is a line ex7tension of a single source drug or an innovator8

multiple source drug that is an oral solid dos9age form, the rebate obligation with respect tosuch drug under this section shall be the11amount computed under this section for such12new drug or, if greater, the product of 13(i) the average manufacturer price of14the line extension of a single source drugor an innovator multiple source drug that16

is an oral solid dosage form;17(ii) the highest additional rebate18(calculated as a percentage of average19manufacturer price) under this section forany strength of the original single source21drug or innovator multiple source drug;22and23(iii) the total number of units of24each dosage form and strength of the lineextension product paid for under the State

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7951plan in the rebate period (as reported by

2the State).3In this subparagraph, the term line extension 4means, with respect to a drug, an extended re5lease formulation of the drug..6(2) EFFECTIVE DATE.The amendment made7by paragraph (1) shall apply to drugs dispensed8

after December 31, 2009.9(b) INCREASE MINIMUM REBATE PERCENTAGE FOR10SINGLE SOURCE DRUGS.Section 1927(c)(1)(B)(i) of the11Social Security Act (42 U.S.C. 1396r8(c)(1)(B)(i)) is12amended 13(1) in subclause (IV), by striking and at the14end;

15(2) in subclause (V) 16(A) by inserting and before January 1,172010 after December 31, 1995,; and18(B) by striking the period at the end and19inserting ; and; and20(3) by adding at the end the following new sub21clause:22(VI) after December 31, 2009,23is 22.1 percent..

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796

SEC. 1743. EXTENSION OF PRESCRIPTION DRUG DIS

COUNTS TO ENROLLEES OF MEDICAID MAN

AGED CARE ORGANIZATIONS.

(a) IN GENERAL.Section 1903(m)(2)(A) of the SocialSecurity Act (42 U.S.C. 1396b(m)(2)(A)) is amended (1) in clause (xi), by striking and at the end;(2) in clause (xii), by striking the period at the

end and inserting; and

; and(3) by adding at the end the following:

(xiii) such contract provides that the entityshall report to the State such information, on suchtimely and periodic basis as specified by the Secretary,as the State may require in order to include,in the information submitted by the State to a manufacturerunder section 1927(b)(2)(A), informationon covered outpatient drugs dispensed to individualseligible for medical assistance who are enrolled withthe entity and for which the entity is responsible forcoverage of such drugs under this subsection..

(b) CONFORMING AMENDMENTS.Section 1927 ofsuch Act (42 U.S.C. 1396r-8) is amended (1) in the first sentence of subsection (b)(1)(A),by inserting before the period at the end the following:, including such drugs dispensed to individualsenrolled with a medicaid managed care organif:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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7971zation if the organization is responsible for coverage

2of such drugs;3(2) in subsection (b)(2), by adding at the end4the following new subparagraph:5(C) REPORTING ON MMCO DRUGS.On a6quarterly basis, each State shall report to the7Secretary the total amount of rebates in dollars

8received from pharmacy manufacturers for9drugs provided to individuals enrolled with10Medicaid managed care organizations that con11tract under section 1903(m).; and12(3) in subsection (j) 13(A) in the heading by striking EXEMP14TION and inserting SPECIAL RULES; and15

(B) in paragraph (1), by striking not.16(c) EFFECTIVE DATE.The amendments made by17this section take effect on July 1, 2010, and shall apply18to drugs dispensed on or after such date, without regard19to whether or not final regulations to carry out such20amendments have been promulgated by such date.21SEC. 1744. PAYMENTS FOR GRADUATE MEDICAL EDU22CATION.23(a) IN GENERAL.Section 1905 of the Social Secu24rity Act (42 U.S.C. 1396d), as amended by sections

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79811701(a)(2), 1711(a), and 1713(a), is amended by adding

2at the end the following new subsection:3(bb) PAYMENT FOR GRADUATE MEDICAL EDU4CATION. 5(1) IN GENERAL.The term medical assist6ance includes payment for costs of graduate medical7education consistent with this subsection, whether8provided in or outside of a hospital.

9(2) SUBMISSION OF INFORMATION.For pur10poses of paragraph (1) and section111902(a)(13)(A)(v), payment for such costs is not12consistent with this subsection unless 13(A) the State submits to the Secretary, in14a timely manner and on an annual basis speci15fied by the Secretary, information on total pay16ments for graduate medical education and how

17such payments are being used for graduate18medical education, including 19(i) the institutions and programs eli20gible for receiving the funding;21(ii) the manner in which such pay22ments are calculated;23(iii) the types and fields of education24being supported;

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7991(iv) the workforce or other goals to

2which the funding is being applied;3(v) State progress in meeting such4goals; and(vi) such other information as the6Secretary determines will assist in carrying7out paragraphs (3) and (4); and8(B) such expenditures are made con9sistent with such goals and requirements as are

established under paragraph (4).11(3) REVIEW OF INFORMATION.The Secretary12shall make the information submitted under para13graph (2) available to the Advisory Committee on14Health Workforce Evaluation and Assessment (establishedunder section 2261 of the Public Health16Service Act). The Secretary and the Advisory Com17

mittee shall independently review the information18submitted under paragraph (2), taking into account19State and local workforce needs.(4) SPECIFICATION OF GOALS AND REQUIRE21MENTS.The Secretary shall specify by rule, ini22tially published by not later than December 31,232011 24(A) program goals for the use of fundsdescribed in paragraph (1), taking into account

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8001recommendations of the such Advisory Com2

mittee and the goals for approved medical resi3dency training programs described in section41886(h)(1)(B); and(B) requirements for use of such funds6consistent with such goals.7Such rule may be effective on an interim basis pend8ing revision after an opportunity for public com9ment..(b) CONFORMING AMENDMENT.Section

111902(a)(13)(A) of such Act (42 U.S.C. 1396a(a)(13)(A))12is amended 13(1) by striking and at the end of clause (iii);14(2) by striking ; and and inserting , and;and16(3) by adding at the end the following new17clause:

18(v) in the case of hospitals and at19the option of a State, such rates may include,to the extent consistent with section211905(bb), payment for graduate medical22education; and.23(c) EFFECTIVE DATE.The amendments made by24this section shall take effect on the date of the enactmentof this Act. Nothing in this section shall be construed as

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8011affecting payments made before such date under a State

2plan under title XIX of the Social Security Act for grad3uate medical education.4Subtitle FWaste, Fraud, and5Abuse6SEC. 1751. HEALTH-CARE ACQUIRED CONDITIONS.7(a) MEDICAID NON-PAYMENT FOR CERTAIN HEALTH8

CARE-ACQUIRED CONDITIONS.Section 1903(i) of the9

Social Security Act (42 U.S.C. 1396b(i)) is amended 10(1) by striking or at the end of paragraph11(23);12(2) by striking the period at the end of para13graph (24) and inserting ; or; and14(3) by inserting after paragraph (24) the fol15lowing new paragraph:

16(25) with respect to amounts expended for17services related to the presence of a condition that18could be identified by a secondary diagnostic code19described in section 1886(d)(4)(D)(iv) and for any20health care acquired condition determined as a non-21covered service under title XVIII..22(b) APPLICATION TO CHIP.Section 2107(e)(1)(G)23of such Act (42 U.S.C. 1397gg(e)(1)(G)) is amended by24striking and (17) and inserting (17), and (25).

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8021(c) PERMISSION TO INCLUDE ADDITIONAL HEALTH

2CARE-ACQUIRED CONDITIONS.Nothing in this section3shall prevent a State from including additional health4care-acquired conditions for non-payment in its Medicaid5program under title XIX of the Social Security Act.6(d) EFFECTIVE DATE.The amendments made by7this section shall apply to discharges occurring on or after

8January 1, 2010.9SEC. 1752. EVALUATIONS AND REPORTS REQUIRED UNDER10MEDICAID INTEGRITY PROGRAM.11Section 1936(c)(2)) of the Social Security Act (4212U.S.C. 1396u7(c)(2)) is amended 13(1) by redesignating subparagraph (D) as sub14paragraph (E); and

15(2) by inserting after subparagraph (C) the fol16lowing new subparagraph:17(D) For the contract year beginning in182011 and each subsequent contract year, the19entity provides assurances to the satisfaction of20the Secretary that the entity will conduct peri21odic evaluations of the effectiveness of the ac22tivities carried out by such entity under the23Program and will submit to the Secretary an24annual report on such activities..

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803

SEC. 1753. REQUIRE PROVIDERS AND SUPPLIERS TO

ADOPT PROGRAMS TO REDUCE WASTE,

FRAUD, AND ABUSE.

Section 1902(a) of such Act (42 U.S.C. 42 U.S.C.1396a(a)), as amended by sections 1631(b)(1) and 1703,is further amended

(1) in paragraph (74), by striking at the endand;

(2) in paragraph (75), by striking at the endthe period and inserting ; and; and(3) by inserting after paragraph (75) the followingnew paragraph:(76) provide that any provider or supplier(other than a physician or nursing facility) providingservices under such plan shall, subject to paragraph

(5) of section 1874(d), establish a compliance programdescribed in paragraph (1) of such section inaccordance with such section..SEC. 1754. OVERPAYMENTS.

(a) IN GENERAL.Section 1903(d)(2)(C) of the SocialSecurity Act (42 U.S.C. 1396b(d)(2)(C)) is amendedby inserting (or 1 year in the case of overpayments dueto fraud) after 60 days.(b) EFFECTIVE DATE.In the case overpaymentsdiscovered on or after the date of the enactment of thisAct.f:\VHLC\071409\071409.140.xml (4443902)July 14, 2009 (12:51 p.m.)

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8041SEC. 1755. MANAGED CARE ORGANIZATIONS.

2(a) MINIMUM MEDICAL LOSS RATIO. 3(1) MEDICAID.Section 1903(m)(2)(A) of the4Social Security Act (42 U.S.C. 1396b(m)(2)(A)), asamended by section 1743(a)(3), is amended 6(A) by striking and at the end of clause7(xii);8

(B) by striking the period at the end of9clause (xiii) and inserting ; and; and(C) by adding at the end the following new11clause:12(xiv) such contract has a medical loss ratio, as13determined in accordance with a methodology speci14fied by the Secretary that is a percentage (not lessthan 85 percent) as specified by the Secretary..16

(2) CHIP.Section 2107(e)(1) of such Act (4217U.S.C. 1397gg(e)(1)) is amended 18(A) by redesignating subparagraphs (H)19through (L) as subparagraphs (I) through (M);and21(B) by inserting after subparagraph (G)22the following new subparagraph:23(H) Section 1903(m)(2)(A)(xiv) (relating24to application of minimum loss ratios), with respectto comparable contracts under this title..

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8051(3) EFFECTIVE DATE.The amendments made

2by this subsection shall apply to contracts entered3into or renewed on or after July 1, 2010.4(b) PATIENT ENCOUNTER DATA. (1) IN GENERAL.Section 1903(m)(2)(A)(xi)6of the Social Security Act (42 U.S.C.71396b(m)(2)(A)(xi)) is amended by inserting and8

for the provision of such data to the State at a fre9quency and level of detail to be specified by the Secretary after patients.11(2) EFFECTIVE DATE.The amendment made12by paragraph (1) shall apply with respect to contract13years beginning on or after January 1, 2010.14SEC. 1756. TERMINATION OF PROVIDER PARTICIPATIONUNDER MEDICAID AND CHIP IF TERMINATED16

UNDER MEDICARE OR OTHER STATE PLAN17OR CHILD HEALTH PLAN.18(a) STATE PLAN REQUIREMENT.Section191902(a)(39) of the Social Security Act (42 U.S.C. 42U.S.C. 1396a(a)) is amended by inserting after 1128A, 21the following: terminate the participation of any indi22vidual or entity in such program if (subject to such excep23tions are are permitted with respect to exclusion under24sections 1128(b)(3)(C) and 1128(d)(3)(B)) participationof such individual or entity is terminated under title

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8061XVIII, any other State plan under this title, or any child

2health plan under title XXI,.3(b) APPLICATION TO CHIP.Section 2107(e)(1)(A)4of such Act (42 U.S.C. 1397gg(e)(1)(A)) is amended byinserting before the period at the end the following: and6section 1902(a)(39) (relating to exclusion and termination7of participation).8

(c) EFFECTIVE DATE. 9

(1) Except as provided in paragraph (2), theamendments made by this section shall apply to11services furnished on or after JJanuary 1, 2011,12without regard to whether or not final regulations to13carry out such amendments have been promulgated14by such date.(2) In the case of a State plan for medical as16

sistance under title XIX of the Social Security Act17or a child health plan under title XXI of such Act18which the Secretary of Health and Human Services19determines requires State legislation (other than legislationappropriating funds) in order for the plan to21meet the additional requirement imposed by the22amendments made by this section, the State plan or23child health plan shall not be regarded as failing to24comply with the requirements of such title solely onthe basis of its failure to meet this additional re-

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8071quirement before the first day of the first calendar

2quarter beginning after the close of the first regular3session of the State legislature that begins after the4date of the enactment of this Act. For purposes ofthe previous sentence, in the case of a State that has6a 2-year legislative session, each year of such session7shall be deemed to be a separate regular session of8

the State legislature.9SEC. 1757. MEDICAID AND CHIP EXCLUSION FROM PARTICIPATIONRELATING TO CERTAIN OWNERSHIP,11CONTROL, AND MANAGEMENT AFFILIATIONS.12(a) STATE PLAN REQUIREMENT.Section 1902(a)13of the Social Security Act (42 U.S.C. 1396a(a)), as14amended by sections 1631(b)(1), 1703, and 1753, is furtheramended

16(1) in paragraph (75), by striking at the end17and;18(2) in paragraph (76), by striking at the end19the period and inserting ; and; and(3) by inserting after paragraph (76) the fol21lowing new paragraph:22(77) provide that the State agency described23in paragraph (9) exclude, with respect to a period,24any individual or entity from participation in theprogram under the State plan if such individual or

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8081entity owns, controls, or manages an entity that (or

2if such entity is owned, controlled, or managed by an3individual or entity that) 4(A) has unpaid overpayments under this5title during such period determined by the Sec6retary or the State agency to be delinquent;7(B) is suspended or excluded from par8ticipation under or whose participation is termi9

nated under this title during such period; or10(C) is affiliated with an individual or enti11ty that has been suspended or excluded from12participation under this title or whose participa13tion is terminated under this title during such14period..15(b) CHILD HEALTH PLAN REQUIREMENT.Section162107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)),

17as amended by section 1756(b), is amended by striking18section 1902(a)(39) and inserting sections191902(a)(39) and 1902(a)(77).20(c) EFFECTIVE DATE. 21(1) Except as provided in paragraph (2), the22amendments made by this section shall apply to23services furnished on or after January 1, 2011,24without regard to whether or not final regulations to

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8091carry out such amendments have been promulgated

2by such date.3(2) In the case of a State plan for medical as4sistance under title XIX of the Social Security Act5or a child health plan under title XXI of such Act6which the Secretary of Health and Human Services7determines requires State legislation (other than leg8islation appropriating funds) in order for the plan to

9meet the additional requirement imposed by the10amendments made by this section, the State plan or11child health plan shall not be regarded as failing to12comply with the requirements of such title solely on13the basis of its failure to meet this additional re14quirement before the first day of the first calendar15quarter beginning after the close of the first regular

16session of the State legislature that begins after the17date of the enactment of this Act. For purposes of18the previous sentence, in the case of a State that has19a 2-year legislative session, each year of such session20shall be deemed to be a separate regular session of21the State legislature.

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810

SEC. 1758. REQUIREMENT TO REPORT EXPANDED SET OF

DATA ELEMENTS UNDER MMIS TO DETECT

FRAUD AND ABUSE.

Section 1903(r)(1)(F) of the Social Security Act (42

U.S.C. 1396b(r)(1)(F)) is amended by inserting afternecessary the following: and including, for data submittedto the Secretary on or after July 1, 2010, dataelements from the automated data system that the Secretarydetermines to be necessary for detection of waste,

fraud, and abuse.SEC. 1759. BILLING AGENTS, CLEARINGHOUSES, OR OTHER

ALTERNATE PAYEES REQUIRED TO REG

ISTER UNDER MEDICAID.

(a) IN GENERAL.Section 1902(a) of the Social SecurityAct (42 U.S.C. 42 U.S.C. 1396a(a)), as amendedby sections 1631(b), 1703, 1753, and 1757, is furtheramended (1) in paragraph (76); by striking at the end

and;(2) in paragraph (77), by striking the period atthe end and inserting and; and(3) by inserting after paragraph (77) the followingnew paragraph:(78) provide that any agent, clearinghouse, orother alternate payee that submits claims on behalfof a health care provider must register with the

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8111State and the Secretary in a form and manner speci2

fied by the Secretary under section 1866(j)(1)(D)..3(b) DENIAL OF PAYMENT.Section 1903(i) of such4Act (42 U.S.C. 1396b(i)), as amended by section 1753,is amended 6(1) by striking or at the end of paragraph7(24);8(2) by striking the period at the end of para9

graph (25) and inserting; or

; and(3) by inserting after paragraph (25) the fol11

lowing new paragraph:12(26) with respect to any amount paid to a bill13ing agent, clearinghouse, or other alternate payee14that is not registered with the State and the Secretaryas required under section 1902(a)(78)..16(c) EFFECTIVE DATE. 17(1) Except as provided in paragraph (2), the

18amendments made by this section shall apply to19claims submitted on or after January 1, 2012, withoutregard to whether or not final regulations to21carry out such amendments have been promulgated22by such date.23(2) In the case of a State plan for medical as24sistance under title XIX of the Social Security Actwhich the Secretary of Health and Human Services

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8121determines requires State legislation (other than leg2

islation appropriating funds) in order for the plan to3meet the additional requirement imposed by the4amendments made by this section, the State plan or5child health plan shall not be regarded as failing to6comply with the requirements of such title solely on7the basis of its failure to meet this additional re8quirement before the first day of the first calendar

9quarter beginning after the close of the first regular10session of the State legislature that begins after the11date of the enactment of this Act. For purposes of12the previous sentence, in the case of a State that has13a 2-year legislative session, each year of such session14shall be deemed to be a separate regular session of15

the State legislature.16SEC. 1760. DENIAL OF PAYMENTS FOR LITIGATION-RE17LATED MISCONDUCT.18(a) IN GENERAL.Section 1903(i) of the Social Se19curity Act (42 U.S.C. 1396b(i)), as previously amended20is amended 21(1) by striking or at the end of paragraph22(25);23(2) by striking the period at the end of para24graph (26) and inserting a semicolon; and

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8131(3) by inserting after paragraph (26) the fol2

lowing new paragraphs:3(27) with respect to any amount expended 4(A) on litigation in which a court imposes5sanctions on the State, its employees, or its6counsel for litigation-related misconduct; or7(B) to reimburse (or otherwise com8pensate) a managed care entity for payment of

9legal expenses associated with any action in10which a court imposes sanctions on the man11aged care entity for litigation-related mis12conduct..13(b) EFFECTIVE DATE.The amendments made by14subsection (a) shall apply to amounts expended on or after15January 1, 2010.16

Subtitle GPuerto Rico and the17Territories18SEC. 1771. PUERTO RICO AND TERRITORIES.19(a) INCREASE IN CAP. 20(1) IN GENERAL.Section 1108(g) of the So21cial Security Act (42 U.S.C. 1308(g)) is amended 22(A) in paragraph (4) by striking and (3) 23and by inserting (3), (6), and (7); and

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8141(B) by inserting after paragraph (5), as

2added by section 1731(d), the following new3paragraph:4(6) FISCAL YEARS 2011 THROUGH 2019.Theamounts otherwise determined under this subsection6for Puerto Rico, the Virgin Islands, Guam, the7Northern Mariana Islands, and American Samoa for8

fiscal year 2011 and each succeeding fiscal year9through fiscal year 2019 shall be increased by thepercentage specified under section 1771(c) of the11Americas Affordable Health Choices Act of 200912for purposes of this paragraph of the amounts other13wise determined under this section (without regard14to this paragraph).(7) FISCAL YEAR 2020 AND SUBSEQUENT FIS16CAL YEARS.The amounts otherwise determined

17under this subsection for Puerto Rico, the Virgin Is18lands, Guam, the Northern Mariana Islands, and19American Samoa for fiscal year 2020 and each succeedingfiscal year shall be the amount provided in21paragraph (6) or this paragraph for the preceding22fiscal year for the respective territory increased by23the percentage increase referred to in paragraph24(1)(B), rounded to the nearest $10,000 (or$100,000 in the case of Puerto Rico)..

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815

1(2) COORDINATION WITH ARRA.Section25001(d) of the American Recovery and Reinvestment3Act of 2009 shall not apply during any period for4which section 1108(g)(6) of the Social Security Act,as added by paragraph (1), applies.6(b) INCREASE IN FMAP. 7

(1) IN GENERAL.Section 1905(b)(2) of the8

Social Security Act (42 U.S.C. 1396d(b)(2)) is9amended by striking 50 per centum and insertingfor fiscal years 2011 through 2019, the percentage11specified under section 1771(c) of the Americas Af12fordable Health Choices Act of 2009 for purposes of13this clause for such fiscal year and for subsequent14fiscal years the percentage so specified for fiscal

year 2019.16(2) EFFECTIVE DATE.The amendment made17by subsection (a) shall apply to items and services18furnished on or after October 1, 2010.19(c) SPECIFICATION OF PERCENTAGES.The Secretaryof Health and Human Services shall specify, before21January 1, 2011, the percentages to be applied under sec22tion 1108(g)(6) of the Social Security Act, as added by23subsection (a)(1), and under section 1905(b)(2) of such24Act, as amended by subsection (b)(1), in a manner so thatfor the period beginning with 2011 and ending with 2019

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8161the total estimated additional Federal expenditures result2

ing from the application of such percentages will be equal3to $10,350,000,000.4Subtitle HMiscellaneousSEC. 1781. TECHNICAL CORRECTIONS.6(a) TECHNICAL CORRECTION TO SECTION 1144 OF7THE SOCIAL SECURITY ACT.The first sentence of sec8tion 1144(c)(3) of the Social Security Act (42 U.S.C.9

1320b14(c)(3)) is amended

(1) by striking transmittal; and

11(2) by inserting before the period the following:12as specified in section 1935(a)(4).13(b) CLARIFYING AMENDMENT TO SECTION 1935 OF14THE SOCIAL SECURITY ACT.Section 1935(a)(4) of theSocial Security Act (42 U.S.C. 1396u5(a)(4)), as16amended by section 113(b) of Public Law 110275, is

17amended 18(1) by striking the second sentence;19(2) by redesignating the first sentence as a subparagraph(A) with appropriate indentation and21with the following heading: IN GENERAL;22(3) by adding at the end the following subpara23graphs:24(B) FURNISHING MEDICAL ASSISTANCEWITH REASONABLE PROMPTNESS.For the

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8171purpose of a States obligation under section

21902(a)(8) to furnish medical assistance with3reasonable promptness, the date of the elec4tronic transmission of low-income subsidy programdata, as described in section 1144(c),6from the Commissioner of Social Security to the7State Medicaid Agency, shall constitute the date8of filing of such application for benefits under

9the Medicare Savings Program.(C) DETERMINING AVAILABILITY OF11MEDICAL ASSISTANCE.For the purpose of de12termining when medical assistance will be made13available, the State shall consider the date of14the individuals application for the low incomesubsidy program to constitute the date of filing16for benefits under the Medicare Savings Pro17

gram..18(c) EFFECTIVE DATE RELATING TO MEDICAID19AGENCY CONSIDERATION OF LOW-INCOME SUBSIDY APPLICATIONAND DATA TRANSMITTAL.The amendments21made by subsections (a) and (b) shall be effective as if22included in the enactment of section 113(b) of Public Law23110275.24(d) TECHNICAL CORRECTION TO SECTION 605 OFCHIPRA.Section 605 of the Childrens Health Insur

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8181ance Program Reauthorization Act of 2009 (Public Law

21113) is amended by striking legal residents and in3serting lawfully residing in the United States.4(e) TECHNICAL CORRECTION TO SECTION 1905 OFTHE SOCIAL SECURITY ACT.Section 1905(a) of the So6cial Security Act (42 U.S.C. 1396d(a)) is amended by in7serting or the care and services themselves, or both be8fore (if provided in or after.9(f) CLARIFYING AMENDMENT TO SECTION 1115 OFTHE SOCIAL SECURITY ACT.Section 1115(a) of the So11

cial Security Act (42 U.S.C. 1315(a)) is amended by add12ing at the end the following: If an experimental, pilot,13or demonstration project that relates to title XIX is ap14proved pursuant to any part of this subsection, suchproject shall be treated as part of the State plan, all med16ical assistance provided on behalf of any individuals af17fected by such project shall be medical assistance provided18under the State plan, and all provisions of this Act not19explicitly waived in approving such project shall remainfully applicable to all individuals receiving benefits under

21the State plan..22SEC. 1782. EXTENSION OF QI PROGRAM.23(a) IN GENERAL.Section 1902(a)(10)(E)(iv) of the24Social Security Act (42 U.S.C. 1396b(a)(10)(E)(iv)) isamended

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8191(1) by striking sections 1933 and and by in2

serting section; and3(2) by striking December 2010 and inserting4December 2012.5(b) ELIMINATION OF FUNDING LIMITATION. 6(1) IN GENERAL.Section 1933 of such Act7(42 U.S.C. 1396u3) is amended 8

(A) in subsection (a), by strikingwho are9

selected to receive such assistance under sub10section (b);11(B) by striking subsections (b), (c), (e),12and (g);13(C) in subsection (d), by striking fur14nished in a State and all that follows and in15serting the Federal medical assistance percent16age shall be equal to 100 percent.; and

17(D) by redesignating subsections (d) and18(f) as subsections (b) and (c), respectively.19(2) CONFORMING AMENDMENT.Section201905(b) of such Act (42 U.S.C. 1396d(b)) is amend21ed by striking 1933(d) and inserting 1933(b).22(3) EFFECTIVE DATE.The amendments made23by paragraph (1) shall take effect on January 1,242011.

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8201TITLE VIIIREVENUE-RELATED

2PROVISIONS3SEC. 1801. DISCLOSURES TO FACILITATE IDENTIFICATION4OF INDIVIDUALS LIKELY TO BE INELIGIBLEFOR THE LOW-INCOME ASSISTANCE UNDER6THE MEDICARE PRESCRIPTION DRUG PRO7GRAM TO ASSIST SOCIAL SECURITY ADMINIS8TRATIONS OUTREACH TO ELIGIBLE INDIVID9UALS.

(a) IN GENERAL.Paragraph (19) of section 6103(l)11

of the Internal Revenue Code of 1986 is amended to read12as follows:13(19) DISCLOSURES TO FACILITATE IDENTI14FICATION OF INDIVIDUALS LIKELY TO BE INELIGIBLEFOR LOW-INCOME SUBSIDIES UNDER MEDI16CARE PRESCRIPTION DRUG PROGRAM TO ASSIST SO17CIAL SECURITY ADMINISTRATIONS OUTREACH TO18ELIGIBLE INDIVIDUALS.

19(A) IN GENERAL.Upon written requestfrom the Commissioner of Social Security, the21following return information (including such in22formation disclosed to the Social Security Ad23ministration under paragraph (1) or (5)) shall24be disclosed to officers and employees of the SocialSecurity Administration, with respect to

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8211any taxpayer identified by the Commissioner of

2Social Security 3(i) return information for the appli4cable year from returns with respect towages (as defined in section 3121(a) or63401(a)) and payments of retirement in7come (as described in paragraph (1) of this8subsection),9(ii) unearned income informationand income information of the taxpayer

11from partnerships, trusts, estates, and sub12chapter S corporations for the applicable13year,14(iii) if the individual filed an incometax return for the applicable year, the fil16ing status, number of dependents, income17from farming, and income from self-em18

ployment, on such return,19(iv) if the individual is a married individualfiling a separate return for the ap21plicable year, the social security number (if22reasonably available) of the spouse on such23return,24(v) if the individual files a joint returnfor the applicable year, the social se-

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8221curity number, unearned income informa2

tion, and income information from partner3ships, trusts, estates, and subchapter S4corporations of the individuals spouse onsuch return, and6(vi) such other return information7relating to the individual (or the individ8uals spouse in the case of a joint return)9as is prescribed by the Secretary by regulation

as might indicate that the individual11is likely to be ineligible for a low-income12prescription drug subsidy under section131860D14 of the Social Security Act.14(B) APPLICABLE YEAR.For the purposesof this paragraph, the term applicable16year means the most recent taxable year for17

which information is available in the Internal18Revenue Services taxpayer information records.19(C) RESTRICTION ON INDIVIDUALS FORWHOM DISCLOSURE MAY BE REQUESTED.The21Commissioner of Social Security shall request22information under this paragraph only with re23spect to 24(i) individuals the Social SecurityAdministration has identified, using all

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8231other reasonably available information, as

2likely to be eligible for a low-income pre3scription drug subsidy under section41860D14 of the Social Security Act and5who have not applied for such subsidy, and6(ii) any individual the Social Security7Administration has identified as a spouse8

of an individual described in clause (i).9(D) RESTRICTION ON USE OF DISCLOSED10INFORMATION.Return information disclosed11under this paragraph may be used only by offi12cers and employees of the Social Security Ad13ministration solely for purposes of identifying14individuals likely to be ineligible for a low-in15come prescription drug subsidy under section16

1860D14 of the Social Security Act for use in17outreach efforts under section 1144 of the So18cial Security Act..19(b) SAFEGUARDS.Paragraph (4) of section 6103(p)20of such Code is amended 21(1) by striking (l)(19) each place it appears,22and23(2) by striking or (17) each place it appears24and inserting (17), or (19).

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8241(c) CONFORMING AMENDMENT.Paragraph (3) of

2section 6103(a) of such Code is amended by striking3(19),.4(d) EFFECTIVE DATE.The amendments made bythis section shall apply to disclosures made after the date6which is 12 months after the date of the enactment of7this Act.8

SEC. 1802. COMPARATIVE EFFECTIVENESS RESEARCH9TRUST FUND; FINANCING FOR TRUST FUND.(a) ESTABLISHMENT OF TRUST FUND. 11(1) IN GENERAL.Subchapter A of chapter 9812of the Internal Revenue Code of 1986 (relating to13trust fund code) is amended by adding at the end14the following new section:SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS

16RESEARCH TRUST FUND.17(a) CREATION OF TRUST FUND.There is estab18lished in the Treasury of the United States a trust fund19to be known as the Health Care Comparative EffectivenessResearch Trust Fund (hereinafter in this section re21ferred to as the CERTF), consisting of such amounts22as may be appropriated or credited to such Trust Fund23as provided in this section and section 9602(b).24(b) TRANSFERS TO FUND.There are hereby appropriatedto the Trust Fund the following:

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8251(1) For fiscal year 2010, $90,000,000.

2(2) For fiscal year 2011, $100,000,000.3(3) For fiscal year 2012, $110,000,000.4(4) For each fiscal year beginning with fiscalyear 2013 6(A) an amount equivalent to the net reve7nues received in the Treasury from the fees im8posed under subchapter B of chapter 34 (relat9ing to fees on health insurance and self-insured

plans) for such fiscal year; and11(B) subject to subsection (c)(2), amounts12determined by the Secretary of Health and13Human Services to be equivalent to the fair14share per capita amount computed under subsection(c)(1) for the fiscal year multiplied by16the average number of individuals entitled to17

benefits under part A, or enrolled under part B,18of title XVIII of the Social Security Act during19such fiscal year.The amounts appropriated under paragraphs (1), (2), (3),21and (4)(B) shall be transferred from the Federal Hospital22Insurance Trust Fund and from the Federal Supple23mentary Medical Insurance Trust Fund (established24under section 1841 of such Act), and from the MedicarePrescription Drug Account within such Trust Fund, in

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8261proportion (as estimated by the Secretary) to the total ex2

penditures during such fiscal year that are made under3title XVIII of such Act from the respective trust fund or4account.5(c) FAIR SHARE PER CAPITA AMOUNT. 6(1) COMPUTATION. 7(A) IN GENERAL.Subject to subpara8graph (B), the fair share per capita amount

9under this paragraph for a fiscal year (begin10ning with fiscal year 2013) is an amount com11puted by the Secretary of Health and Human12Services for such fiscal year that, when applied13under this section and subchapter B of chapter1434 of the Internal Revenue Code of 1986, will15result in revenues to the CERTF of16

$375,000,000 for the fiscal year.17(B) ALTERNATIVE COMPUTATION. 18(i) IN GENERAL.If the Secretary is19unable to compute the fair share per capita20amount under subparagraph (A) for a fis21cal year, the fair share per capita amount22under this paragraph for the fiscal year23shall be the default amount determined24under clause (ii) for the fiscal year.

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8271(ii) DEFAULT AMOUNT.The default

2amount under this clause for 3(I) fiscal year 2013 is equal to4$2; or5(II) a subsequent year is equal6to the default amount under this7clause for the preceding fiscal year in8

creased by the annual percentage in9crease in the medical care component10of the consumer price index (United11States city average) for the 12-month12period ending with April of the pre13ceding fiscal year.14Any amount determined under subclause15(II) shall be rounded to the nearest penny.

16(2) LIMITATION ON MEDICARE FUNDING.In17no case shall the amount transferred under sub18section (b)(4)(B) for any fiscal year exceed19$90,000,000.20(d) EXPENDITURES FROM FUND. 21(1) IN GENERAL.Subject to paragraph (2),22amounts in the CERTF are available, without the23need for further appropriations and without fiscal24year limitation, to the Secretary of Health and

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8281Human Services for carrying out section 1181 of the

2Social Security Act.3(2) ALLOCATION FOR COMMISSION.Not less4than the following amounts in the CERTF for a fis5cal year shall be available to carry out the activities6of the Comparative Effectiveness Research Commis7sion established under section 1181(b) of the Social8Security Act for such fiscal year:

9(A) For fiscal year 2010, $7,000,000.10(B) For fiscal year 2011, $9,000,000.11(C) For each fiscal year beginning with122012, $10,000,000.13Nothing in this paragraph shall be construed as pre14venting additional amounts in the CERTF from15being made available to the Comparative Effective16

ness Research Commission for such activities.17(e) NET REVENUES.For purposes of this section,18the term net revenues means the amount estimated by19the Secretary based on the excess of 20(1) the fees received in the Treasury under21subchapter B of chapter 34, over22(2) the decrease in the tax imposed by chapter231 resulting from the fees imposed by such sub24chapter..

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8291(2) CLERICAL AMENDMENT.The table of sec2

tions for such subchapter A is amended by adding3at the end thereof the following new item:Sec. 9511. Health Care Comparative Effectiveness Research Trust Fund..4(b) FINANCING FOR FUND FROM FEES ON INSURED5AND SELF-INSURED HEALTH PLANS. 6(1) GENERAL RULE.Chapter 34 of the Inter7nal Revenue Code of 1986 is amended by adding at8

the end the following new subchapter:9Subchapter BInsured and Self-Insured10Health PlansSec. 4375. Health insurance.Sec. 4376. Self-insured health plans.Sec. 4377. Definitions and special rules.11SEC. 4375. HEALTH INSURANCE.12(a) IMPOSITION OF FEE.There is hereby imposed13

on each specified health insurance policy for each policy14year a fee equal to the fair share per capita amount deter15mined under section 9511(c)(1) multiplied by the average16number of lives covered under the policy.17(b) LIABILITY FOR FEE.The fee imposed by sub18section (a) shall be paid by the issuer of the policy.19(c) SPECIFIED HEALTH INSURANCE POLICY.For20purposes of this section:21(1) IN GENERAL.Except as otherwise pro22vided in this section, the term specified health in23surance policy means any accident or health insur

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8301ance policy issued with respect to individuals resid2

ing in the United States.3(2) EXEMPTION FOR CERTAIN POLICIES.The4term specified health insurance policy does not includeany insurance if substantially all of its cov6erage is of excepted benefits described in section79832(c).8(3) TREATMENT OF PREPAID HEALTH COV9ERAGE ARRANGEMENTS. (A) IN GENERAL.

In the case of any ar11rangement described in subparagraph (B)

12(i) such arrangement shall be treated13as a specified health insurance policy, and14(ii) the person referred to in suchsubparagraph shall be treated as the16issuer.17(B) DESCRIPTION OF ARRANGEMENTS.

18An arrangement is described in this subpara19graph if under such arrangement fixed paymentsor premiums are received as consider21ation for any persons agreement to provide or22arrange for the provision of accident or health23coverage to residents of the United States, re24gardless of how such coverage is provided or arrangedto be provided.

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831

SEC. 4376. SELF-INSURED HEALTH PLANS.

(a) IMPOSITION OF FEE.In the case of any applicableself-insured health plan for each plan year, there ishereby imposed a fee equal to the fair share per capitaamount determined under section 9511(c)(1) multiplied bythe average number of lives covered under the plan.

(b) LIABILITY FOR FEE. (1) IN GENERAL.The fee imposed by subsection(a) shall be paid by the plan sponsor.(2) PLAN SPONSOR.For purposes of paragraph

(1) the termplan sponsor

means

(A) the employer in the case of a plan established

or maintained by a single employer,

(B) the employee organization in the caseof a plan established or maintained by an employeeorganization,

(C) in the case of

(i) a plan established or maintainedby 2 or more employers or jointly by 1 ormore employers and 1 or more employee

organizations,

(ii) a multiple employer welfare arrangement,or

(iii) a voluntary employees beneficiaryassociation described in section501(c)(9),

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8321the association, committee, joint board of trust2

ees, or other similar group of representatives of3the parties who establish or maintain the plan,4or(D) the cooperative or association de6scribed in subsection (c)(2)(F) in the case of a7plan established or maintained by such a coop8erative or association.9(c) APPLICABLE SELF-INSURED HEALTH PLAN.

For purposes of this section, the termapplicable self-in11sured health plan means any plan for providing accident

12or health coverage if 13(1) any portion of such coverage is provided14other than through an insurance policy, and(2) such plan is established or maintained 16(A) by one or more employers for the17benefit of their employees or former employees,

18(B) by one or more employee organiza19tions for the benefit of their members or formermembers,21(C) jointly by 1 or more employers and 122or more employee organizations for the benefit23of employees or former employees,24(D) by a voluntary employees beneficiaryassociation described in section 501(c)(9),

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8331(E) by any organization described in sec2

tion 501(c)(6), or3(F) in the case of a plan not described in4the preceding subparagraphs, by a multiple employerwelfare arrangement (as defined in sec6tion 3(40) of Employee Retirement Income Se7curity Act of 1974), a rural electric cooperative8(as defined in section 3(40)(B)(iv) of such Act),9or a rural telephone cooperative association (as

defined in section 3(40)(B)(v) of such Act).11SEC. 4377. DEFINITIONS AND SPECIAL RULES.12(a) DEFINITIONS.For purposes of this sub13chapter 14(1) ACCIDENT AND HEALTH COVERAGE.Theterm accident and health coverage means any cov16erage which, if provided by an insurance policy,17would cause such policy to be a specified health in18surance policy (as defined in section 4375(c)).

19(2) INSURANCE POLICY.The term insurancepolicy means any policy or other instrument where21by a contract of insurance is issued, renewed, or ex22tended.23(3) UNITED STATES.The term United24States includes any possession of the United States.(b) TREATMENT OF GOVERNMENTAL ENTITIES.

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834

1(1) IN GENERAL.For purposes of this sub2chapter 3(A) the term person includes any gov4ernmental entity, and5(B) notwithstanding any other law or rule6of law, governmental entities shall not be ex7empt from the fees imposed by this subchapter8

except as provided in paragraph (2).9(2) TREATMENT OF EXEMPT GOVERNMENTAL10PROGRAMS.In the case of an exempt governmental11program, no fee shall be imposed under section 437512or section 4376 on any covered life under such pro13gram.14(3) EXEMPT GOVERNMENTAL PROGRAM DE15FINED.For purposes of this subchapter, the term

16exempt governmental program means 17(A) any insurance program established18under title XVIII of the Social Security Act,19(B) the medical assistance program es20tablished by title XIX or XXI of the Social Se21curity Act,22(C) any program established by Federal23law for providing medical care (other than24through insurance policies) to individuals (or

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8351the spouses and dependents thereof) by reason

2of such individuals being 3(i) members of the Armed Forces of4the United States, or5(ii) veterans, and6(D) any program established by Federal7law for providing medical care (other than

8through insurance policies) to members of In9dian tribes (as defined in section 4(d) of the In10dian Health Care Improvement Act).11(c) TREATMENT AS TAX.For purposes of subtitle12F, the fees imposed by this subchapter shall be treated13as if they were taxes.14(d) NO COVER OVER TO POSSESSIONS.Notwith15standing any other provision of law, no amount collected

16under this subchapter shall be covered over to any posses17sion of the United States..18(2) CLERICAL AMENDMENTS. 19(A) Chapter 34 of such Code is amended20by striking the chapter heading and inserting21the following:22CHAPTER 34TAXES ON CERTAIN23INSURANCE POLICIES

SUBCHAPTER A. POLICIES ISSUED BY FOREIGN INSURERSSUBCHAPTER B. INSURED AND SELF-INSURED HEALTH PLANS

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8361Subchapter APolicies Issued By Foreign

2Insurers.3(B) The table of chapters for subtitle D of4such Code is amended by striking the item re5lating to chapter 34 and inserting the following6new item:CHAPTER 34TAXES ON CERTAIN INSURANCE POLICIES.7(3) EFFECTIVE DATE.The amendments made

8by this subsection shall apply with respect to policies9and plans for portions of policy or plan years begin10ning on or after October 1, 2012.11TITLE IXMISCELLANEOUS12PROVISIONS13SEC. 1901. REPEAL OF TRIGGER PROVISION.14Subtitle A of title VIII of the Medicare Prescription

15Drug, Improvement, and Modernization Act of 2003 (Pub16lic Law 108173) is repealed and the provisions of law17amended by such subtitle are restored as if such subtitle18had never been enacted.19SEC. 1902. REPEAL OF COMPARATIVE COST ADJUSTMENT20(CCA) PROGRAM.21Section 1860C1 of the Social Security Act (4222U.S.C. 1395w29), as added by section 241(a) of the23Medicare Prescription Drug, Improvement, and Mod24ernization Act of 2003 (Public Law 108173), is repealed.

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8371SEC. 1903. EXTENSION OF GAINSHARING DEMONSTRATION.

2(a) IN GENERAL.Subsection (d)(3) of section 50073of the Deficit Reduction Act of 2005 (Public Law 109 4171) is amended by inserting (or September 30, 2011,5in the case of a demonstration project in operation as of6October 1, 2008) after December 31, 2009.7(b) FUNDING.

8(1) IN GENERAL.Subsection (f)(1) of such9section is amended by inserting and for fiscal year102010, $1,600,000, after $6,000,000,.11(2) AVAILABILITY.Subsection (f)(2) of such12section is amended by striking 2010 and inserting132014 or until expended.14

(c) REPORTS. 15(1) QUALITY IMPROVEMENT AND SAVINGS. 16Subsection (e)(3) of such section is amended by17striking December 1, 2008 and inserting March1831, 2011.19(2) FINAL REPORT.Subsection (e)(4) of such20section is amended by striking May 1, 2010 and21inserting March 31, 2013.

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838

SEC. 1904. GRANTS TO STATES FOR QUALITY HOME VISITA

TION PROGRAMS FOR FAMILIES WITH YOUNG

CHILDREN AND FAMILIES EXPECTING CHIL

DREN.

Part B of title IV of the Social Security Act (42

U.S.C. 621629i) is amended by adding at the end the

following:Subpart 3Support for Quality Home VisitationProgramsSEC. 440. HOME VISITATION PROGRAMS FOR FAMILIES

WITH YOUNG CHILDREN AND FAMILIES EX

PECTING CHILDREN.

(a) PURPOSE.The purpose of this section is to improvethe well-being, health, and development of children

by enabling the establishment and expansion of high qualityprograms providing voluntary home visitation for familieswith young children and families expecting children.

(b) GRANT APPLICATION.A State that desires toreceive a grant under this section shall submit to the Secretaryfor approval, at such time and in such manner asthe Secretary may require, an application for the grantthat includes the following:

(1) DESCRIPTION OF HOME VISITATION PRO-

GRAMS.A description of the high quality programs

of home visitation for families with young children

and families expecting children that will be sup-

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8391ported by a grant made to the State under this sec2

tion, the outcomes the programs are intended to3achieve, and the evidence supporting the effective4ness of the programs.(2) RESULTS OF NEEDS ASSESSMENT.The6results of a statewide needs assessment that de7scribes 8(A) the number, quality, and capacity of9home visitation programs for families with

young children and families expecting children11in the State;12(B) the number and types of families who13are receiving services under the programs;14(C) the sources and amount of fundingprovided to the programs;16(D) the gaps in home visitation in the17

State, including identification of communities18that are in high need of the services; and19(E) training and technical assistance activitiesdesigned to achieve or support the goals21of the programs.22(3) ASSURANCES.Assurances from the State23that 24(A) in supporting home visitation programsusing funds provided under this section,

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8401the State shall identify and prioritize serving

2communities that are in high need of such serv3ices, especially communities with a high propor4tion of low-income families or a high incidence5of child maltreatment;6(B) the State will reserve 5 percent of the7grant funds for training and technical assist8ance to the home visitation programs using9

such funds;10(C) in supporting home visitation pro11grams using funds provided under this section,12the State will promote coordination and collabo13ration with other home visitation programs (in14cluding programs funded under title XIX) and15with other child and family services, health16services, income supports, and other related as17sistance;

18(D) home visitation programs supported19using such funds will, when appropriate, pro20vide referrals to other programs serving chil21dren and families; and22(E) the State will comply with subsection23(i), and cooperate with any evaluation con24ducted under subsection (j).

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8411(4) OTHER INFORMATION.Such other infor2

mation as the Secretary may require.3(c) ALLOTMENTS. 4(1) INDIAN TRIBES.From the amount reservedunder subsection (l)(2) for a fiscal year, the6Secretary shall allot to each Indian tribe that meets7the requirement of subsection (d), if applicable, for8the fiscal year the amount that bears the same ratio

9to the amount so reserved as the number of childrenin the Indian tribe whose families have income that11does not exceed 200 percent of the poverty line bears12to the total number of children in such Indian tribes13whose families have income that does not exceed 20014percent of the poverty line.(2) STATES AND TERRITORIES.From the16

amount appropriated under subsection (m) for a fis17cal year that remains after making the reservations18required by subsection (l), the Secretary shall allot19to each State that is not an Indian tribe and thatmeets the requirement of subsection (d), if applica21ble, for the fiscal year the amount that bears the22same ratio to the remainder of the amount so appro23priated as the number of children in the State whose24families have income that does not exceed 200 percentof the poverty line bears to the total number of

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8421children in such States whose families have income

2that does not exceed 200 percent of the poverty line.3(3) REALLOTMENTS.The amount of any al4lotment to a State under a paragraph of this subsectionfor any fiscal year that the State certifies to6the Secretary will not be expended by the State pur7suant to this section shall be available for reallot8ment using the allotment methodology specified in9that paragraph. Any amount so reallotted to a State

is deemed part of the allotment of the State under11this subsection.12(d) MAINTENANCE OF EFFORT.Beginning with13fiscal year 2011, a State meets the requirement of this14subsection for a fiscal year if the Secretary finds that theaggregate expenditures by the State from State and local16sources for programs of home visitation for families with17

young children and families expecting children for the then18preceding fiscal year was not less than 100 percent of such19aggregate expenditures for the then 2nd preceding fiscalyear.21(e) PAYMENT OF GRANT. 22(1) IN GENERAL.The Secretary shall make a23grant to each State that meets the requirements of24subsections (b) and (d), if applicable, for a fiscalyear for which funds are appropriated under sub-

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8431section (m), in an amount equal to the reimbursable

2percentage of the eligible expenditures of the State3for the fiscal year, but not more than the amount4allotted to the State under subsection (c) for the fis5cal year.6(2) REIMBURSABLE PERCENTAGE DEFINED. 7In paragraph (1), the term reimbursable percent8age means, with respect to a fiscal year

9(A) 85 percent, in the case of fiscal year102010;11(B) 80 percent, in the case of fiscal year122011; or13(C) 75 percent, in the case of fiscal year142012 and any succeeding fiscal year.15

(f) ELIGIBLE EXPENDITURES. 16(1) IN GENERAL.In this section, the term17eligible expenditures 18(A) means expenditures to provide vol19untary home visitation for as many families20with young children (under the age of school21entry) and families expecting children as prac22ticable, through the implementation or expan23sion of high quality home visitation programs24that

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8441(i) adhere to clear evidence-based

2models of home visitation that have dem3onstrated positive effects on important pro4gram-determined child and parenting outcomes,such as reducing abuse and neglect6and improving child health and develop7ment;8(ii) employ well-trained and com9petent staff, maintain high quality supervision,provide for ongoing training and

11professional development, and show strong12organizational capacity to implement such13a program;14(iii) establish appropriate linkagesand referrals to other community resources16and supports;17(iv) monitor fidelity of program im18

plementation to ensure that services are19delivered according to the specified model;and21(v) provide parents with 22(I) knowledge of age-appro23priate child development in cognitive,24language, social, emotional, and motordomains (including knowledge of sec

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8451ond language acquisition, in the case

2of English language learners);3(II) knowledge of realistic ex4pectations of age-appropriate child behaviors;6(III) knowledge of health and7wellness issues for children and par8ents;9(IV) modeling, consulting, and

coaching on parenting practices;11(V) skills to interact with their12child to enhance age-appropriate de13velopment;14(VI) skills to recognize and seekhelp for issues related to health, devel16opmental delays, and social, emo17tional, and behavioral skills; and18(VII) activities designed to help

19parents become full partners in theeducation of their children;21(B) includes expenditures for training,22technical assistance, and evaluations related to23the programs; and24(C) does not include any expenditure withrespect to which a State has submitted a claim

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8461for payment under any other provision of Fed2

eral law.3(2) PRIORITY FUNDING FOR PROGRAMS WITH4STRONGEST EVIDENCE. (A) IN GENERAL.The expenditures, de6scribed in paragraph (1), of a State for a fiscal7year that are attributable to the cost of pro8grams that do not adhere to a model of home9visitation with the strongest evidence of effectiveness

shall not be considered eligible expendi11tures for the fiscal year to the extent that the12total of the expenditures exceeds the applicable13percentage for the fiscal year of the allotment14of the State under subsection (c) for the fiscalyear.16(B) APPLICABLE PERCENTAGE DE17FINED.In subparagraph (A), the term appli18cable percentage means, with respect to a fiscal

19year (i) 60 percent for fiscal year 2010;21(ii) 55 percent for fiscal year 2011;22(iii) 50 percent for fiscal year 2012;23(iv) 45 percent for fiscal year 2013;24or(v) 40 percent for fiscal year 2014.

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847

1(g) NO USE OF OTHER FEDERAL FUNDS FOR2STATE MATCH.A State to which a grant is made under3this section may not expend any Federal funds to meet4the State share of the cost of an eligible expenditure for5which the State receives a payment under this section.6(h) WAIVER AUTHORITY.

7(1) IN GENERAL.The Secretary may waive8or modify the application of any provision of this9section, other than subsection (b) or (f), to an In10dian tribe if the failure to do so would impose an11undue burden on the Indian tribe.12(2) SPECIAL RULE.An Indian tribe is13deemed to meet the requirement of subsection (d)

14for purposes of subsections (c) and (e) if 15(A) the Secretary waives the requirement;16or17(B) the Secretary modifies the require18ment, and the Indian tribe meets the modified19requirement.20(i) STATE REPORTS.Each State to which a grant21is made under this section shall submit to the Secretary22an annual report on the progress made by the State in23addressing the purposes of this section. Each such report24shall include a description of

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8481(1) the services delivered by the programs that

2received funds from the grant;3(2) the characteristics of each such program,4including information on the service model used bythe program and the performance of the program;6(3) the characteristics of the providers of serv7ices through the program, including staff qualifica8tions, work experience, and demographic characteris9tics;(4) the characteristics of the recipients of serv11ices provided through the program, including the

12number of the recipients, the demographic charac13teristics of the recipients, and family retention;14(5) the annual cost of implementing the program,including the cost per family served under the16program;17(6) the outcomes experienced by recipients of18

services through the program;19(7) the training and technical assistance providedto aid implementation of the program, and21how the training and technical assistance contrib22uted to the outcomes achieved through the program;23(8) the indicators and methods used to mon24itor whether the program is being implemented asdesigned; and

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8491(9) other information as determined necessary

2by the Secretary.3(j) EVALUATION. 4(1) IN GENERAL.The Secretary shall, by5grant or contract, provide for the conduct of an6independent evaluation of the effectiveness of home7visitation programs receiving funds provided under

8this section, which shall examine the following:9(A) The effect of home visitation pro10grams on child and parent outcomes, including11child maltreatment, child health and develop12ment, school readiness, and links to community13services.14(B) The effectiveness of home visitation15

programs on different populations, including16the extent to which the ability of programs to17improve outcomes varies across programs and18populations.19(2) REPORTS TO THE CONGRESS. 20(A) INTERIM REPORT.Within 3 years21after the date of the enactment of this section,22the Secretary shall submit to the Congress an23interim report on the evaluation conducted pur24suant to paragraph (1).

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850

1(B) FINAL REPORT.Within 5 years2after the date of the enactment of this section,3the Secretary shall submit to the Congress a4final report on the evaluation conducted pursu5ant to paragraph (1).6(k) ANNUAL REPORTS TO THE CONGRESS.The7

Secretary shall submit annually to the Congress a report8on the activities carried out using funds made available9under this section, which shall include a description of the10following:11(1) The high need communities targeted by12States for programs carried out under this section.13(2) The service delivery models used in the

14programs receiving funds provided under this sec15tion.16(3) The characteristics of the programs, in17cluding 18(A) the qualifications and demographic19characteristics of program staff; and20(B) recipient characteristics including the21number of families served, the demographic22characteristics of the families served, and fam23ily retention and duration of services.24(4) The outcomes reported by the programs.

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8511(5) The research-based instruction, materials,

2and activities being used in the activities funded3under the grant.4(6) The training and technical activities, includingon-going professional development, provided6to the programs.7(7) The annual costs of implementing the pro8grams, including the cost per family served under

9the programs.(8) The indicators and methods used by States11to monitor whether the programs are being been im12plemented as designed.13(l) RESERVATIONS OF FUNDS.From the amounts14appropriated for a fiscal year under subsection (m), theSecretary shall reserve 16(1) an amount equal to 5 percent of the

17amounts to pay the cost of the evaluation provided18for in subsection (j), and the provision to States of19training and technical assistance, including the disseminationof best practices in early childhood home21visitation; and22(2) after making the reservation required by23paragraph (1), an amount equal to 3 percent of the24amount so appropriated, to pay for grants to Indiantribes under this section.

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8521(m) APPROPRIATIONS.Out of any money in the

2Treasury of the United States not otherwise appropriated,3there is appropriated to the Secretary to carry out this4section (1) $50,000,000 for fiscal year 2010;6(2) $100,000,000 for fiscal year 2011;7(3) $150,000,000 for fiscal year 2012;8(4) $200,000,000 for fiscal year 2013; and9

(5) $250,000,000 for fiscal year 2014.(n) INDIAN TRIBES TREATED AS STATES.In this11section, paragraphs (4), (5), and (6) of section 431(a)12shall apply..13SEC. 1905. IMPROVED COORDINATION AND PROTECTION14FOR DUAL ELIGIBLES.Title XI of the Social Security Act is amended by

16inserting after section 1150 the following new section:17IMPROVED COORDINATION AND PROTECTION FOR DUAL18ELIGIBLES19SEC. 1150A. (a) IN GENERAL.The Secretary shallprovide, through an identifiable office or program within21the Centers for Medicare & Medicaid Services, for a fo22cused effort to provide for improved coordination between23Medicare and Medicaid and protection in the case of dual24eligibles (as defined in subsection (e)). The office or programshall

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8531(1) review Medicare and Medicaid policies re2

lated to enrollment, benefits, service delivery, pay3ment, and grievance and appeals processes under4parts A and B of title XVIII, under the Medicare5Advantage program under part C of such title, and6under title XIX;7(2) identify areas of such policies where better8coordination and protection could improve care and

9costs; and10(3) issue guidance to States regarding improv11ing such coordination and protection.12(b) ELEMENTS.The improved coordination and13protection under this section shall include efforts 14(1) to simplify access of dual eligibles to bene15fits and services under Medicare and Medicaid;16

(2) to improve care continuity for dual eligi17bles and ensure safe and effective care transitions;18(3) to harmonize regulatory conflicts between19Medicare and Medicaid rules with regard to dual eli20gibles; and21(4) to improve total cost and quality perform22ance under Medicare and Medicaid for dual eligibles.23(c) RESPONSIBILITIES.In carrying out this sec24tion, the Secretary shall provide for the following:

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8541(1) An examination of Medicare and Medicaid

2payment systems to develop strategies to foster more3integrated and higher quality care.4(2) Development of methods to facilitate accessto post-acute and community-based services and6to identify actions that could lead to better coordina7tion of community-based care.8(3) A study of enrollment of dual eligibles in

9the Medicare Savings Program (as defined in section1144(c)(7)), under Medicaid, and in the low-income11subsidy program under section 1860D14 to identify12methods to more efficiently and effectively reach and13enroll dual eligibles.14(4) An assessment of communication strategiesfor dual eligibles to determine whether addi16tional informational materials or outreach is needed,

17including an assessment of the Medicare website, 1 18800MEDICARE, and the Medicare handbook.19(5) Research and evaluation of areas whereservice utilization, quality, and access to cost sharing21protection could be improved and an assessment of22factors related to enrollee satisfaction with services23and care delivery.24(6) Collection (and making available to thepublic) of data and a database that describe the eli

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8551gibility, benefit and cost-sharing assistance available

2to dual eligibles by State.3(7) Monitoring total combined Medicare and4Medicaid program costs in serving dual eligibles and5making recommendations for optimizing total quality6and cost performance across both programs.7(8) Coordination of activities relating to Medi8

care Advantage plans under 1859(b)(6)(B)(ii) and9Medicaid.10(d) PERIODIC REPORTS.Not later than 1 year11after the date of the enactment of this section and every123 years thereafter the Secretary shall submit to Congress13a report on progress in activities conducted under this sec14tion.15

(e) DEFINITIONS.In this section:16(1) DUAL ELIGIBLE.The term dual eligible 17means an individual who is dually eligible for bene18fits under title XVIII, and medical assistance under19title XIX, including such individuals who are eligible20for benefits under the Medicare Savings Program21(as defined in section 1144(c)(7)).22(2) MEDICARE; MEDICAID.The terms Medi23care and Medicaid mean the programs under titles24XVIII and XIX, respectively..

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856

1DIVISION CPUBLIC HEALTH2

AND WORKFORCE DEVELOP

3

MENT

4SEC. 2001. TABLE OF CONTENTS; REFERENCES.

5

(a) TABLE OF CONTENTS.The table of contents of6this division is as follows:

Sec. 2001. Table of contents; references.Sec. 2002. Public Health Investment Fund.

TITLE ICOMMUNITY HEALTH CENTERS

Sec. 2101. Increased funding.

TITLE IIWORKFORCE

Subtitle APrimary Care Workforce

PART 1NATIONAL HEALTH SERVICE CORPS

Sec. 2201. National Health Service Corps.Sec. 2202. Authorizations of appropriations.

PART 2PROMOTION OF PRIMARY CARE AND DENTISTRY

Sec. 2211. Frontline health providers.

SUBPART XIHEALTH PROFESSIONAL NEEDS AREAS

Sec. 340H. In general.Sec. 340I. Loan repayments.Sec. 340J. Report.

Sec. 340K. Allocation.

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Sec. 2212. Primary care student loan funds.Sec. 2213. Training in family medicine, general internal medicine, general pedi

atrics, geriatrics, and physician assistantship.Sec. 2214. Training of medical residents in community-based settings.Sec. 2215. Training for general, pediatric, and public health dentists and denta

l

hygienists.Sec. 2216. Authorization of appropriations.

Subtitle BNursing Workforce

Sec. 2221. Amendments to Public Health Service Act.

Subtitle CPublic Health Workforce

Sec. 2231. Public Health Workforce Corps.

SUBPART XIIPUBLIC HEALTH WORKFORCE

Sec. 340L. Public Health Workforce Corps.

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857

Sec. 340M. Public Health Workforce Scholarship Program.

Sec. 340N. Public Health Workforce Loan Repayment Program.

Sec. 2232. Enhancing the public health workforce.

Sec. 2233. Public health training centers.

Sec. 2234. Preventive medicine and public health training grant program.

Sec. 2235. Authorization of appropriations.

Subtitle DAdapting Workforce to Evolving Health System Needs

PART 1HEALTH PROFESSIONS TRAINING FOR DIVERSITY

Sec. 2241. Scholarships for disadvantaged students, loan repayments and fellowshipsregarding faculty positions, and educational assistancein the health professions regarding individuals from disadvantagedbackgrounds.

Sec. 2242. Nursing workforce diversity grants.

Sec. 2243. Coordination of diversity and cultural competency programs.

PART 2INTERDISCIPLINARY TRAINING PROGRAMS

Sec. 2251. Cultural and linguistic competency training for health care professionals.

Sec. 2252. Innovations in interdisciplinary care training.

PART 3ADVISORY COMMITTEE ON HEALTH WORKFORCE EVALUATION ANDASSESSMENT

Sec. 2261. Health workforce evaluation and assessment.

PART 4HEALTH WORKFORCE ASSESSMENT

Sec. 2271. Health workforce assessment.

PART 5AUTHORIZATION OF APPROPRIATIONS

Sec. 2281. Authorization of appropriations.

TITLE IIIPREVENTION AND WELLNESS

Sec. 2301. Prevention and Wellness.

TITLE XXXIPREVENTION AND WELLNESS

Subtitle APrevention and Wellness Trust

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Sec. 3111. Prevention and Wellness Trust.

Subtitle BNational Prevention and Wellness Strategy

Sec. 3121. National Prevention and Wellness Strategy.

Subtitle CPrevention Task Forces

Sec. 3131. Task Force on Clinical Preventive Services.

Sec. 3132. Task Force on Community Preventive Services.

Subtitle DPrevention and Wellness Research

Sec. 3141. Prevention and wellness research activity coordination.Sec. 3142. Community prevention and wellness research grants.

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858

Subtitle EDelivery of Community Prevention and Wellness Services

Sec. 3151. Community prevention and wellness services grants.

Subtitle FCore Public Health Infrastructure

Sec. 3161. Core public health infrastructure for State, local, and tribalhealth departments.Sec. 3162. Core public health infrastructure and activities for CDC.

Subtitle GGeneral ProvisionsSec. 3171. Definitions.

TITLE IVQUALITY AND SURVEILLANCE

Sec. 2401. Implementation of best practices in the delivery of health care.Sec. 2402. Assistant Secretary for Health Information.Sec. 2403. Authorization of appropriations.

TITLE VOTHER PROVISIONS

Subtitle ADrug Discount for Rural and Other Hospitals

Sec. 2501. Expanded participation in 340B program.Sec. 2502. Extension of discounts to inpatient drugs.

Sec. 2503. Effective date.

Subtitle BSchool-Based Health ClinicsSec. 2511. School-based health clinics.

Subtitle CNational Medical Device RegistrySec. 2521. National medical device registry.

Subtitle DGrants for Comprehensive Programs to Provide Education toNurses and Create a Pipeline to Nursing

Sec. 2531. Establishment of grant program.

Subtitle EStates Failing to Adhere to Certain Employment ObligationsSec. 2541. Limitation on Federal funds.

1(b) REFERENCES.Except as otherwise specified,2whenever in this division an amendment is expressed in3terms of an amendment to a section or other provision,

4the reference shall be considered to be made to a section5

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or other provision of the Public Health Service Act (426U.S.C. 201 et seq.).

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859

SEC. 2002. PUBLIC HEALTH INVESTMENT FUND.

(a) ESTABLISHMENT OF FUNDS. (1) IN GENERAL.There is established a fundto be known as the Public Health InvestmentFund (referred to in this section as the Fund).(2) FUNDING. (A) There shall be deposited into theFund (i) for fiscal year 2010,$4,600,000,000;(ii) for fiscal year 2011,

$5,600,000,000;(iii) for fiscal year 2012,$6,900,000,000;(iv) for fiscal year 2013,$7,800,000,000;(v) for fiscal year 2014,$9,000,000,000;(vi) for fiscal year 2015,$9,400,000,000;(vii) for fiscal year 2016,$10,100,000,000;(viii) for fiscal year 2017,$10,800,000,000;

(ix) for fiscal year 2018,

$11,800,000,000; and

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860

1(x) for fiscal year 2019,2$12,700,000,000.3(B) Amounts deposited into the Fund shall4be derived from general revenues of the Treasury.6(b) AUTHORIZATION OF APPROPRIATIONS FROM THE7FUND.

8(1) NEW FUNDING. 9(A) IN GENERAL.Amounts in the Fundare authorized to be appropriated by the Com11mittees on Appropriations of the House of Rep12resentatives and the Senate for carrying out ac13tivities under designated public health provi14sions.(B) DESIGNATED PROVISIONS.For pur16poses of this paragraph, the term designated17public health provisions means the provisions

18for which amounts are authorized to be appro19priated under section 330(s), 338(c), 338H1,799C, 872, or 3111 of the Public Health Serv21ice Act, as added by this division.22(2) BASELINE FUNDING. 23(A) IN GENERAL.Amounts in the Fund24are authorized to be appropriated (as describedin paragraph (1)) for a fiscal year only if (ex

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8611cluding any amounts in or appropriated from

2the Fund) 3(i) the amounts specified in subpara4graph (B) for the fiscal year involved areequal to or greater than the amounts spec6ified in subparagraph (B) for fiscal year72008; and8(ii) the amounts appropriated, out of9

the general fund of the Treasury, to thePrevention and Wellness Trust under sec11tion 3111 of the Public Health Service12Act, as added by this division, for the fis13cal year involved are equal to or greater14than the funds (I) appropriated under the head16ing Prevention and Wellness Fund 17in title VIII of division A of the Amer18ican Recovery and Reinvestment Act

19of 2009 (Public Law 1115); and(II) allocated by the second pro21viso under such heading for evidence-22based clinical and community-based23prevention and wellness strategies.24(B) AMOUNTS SPECIFIED.The amountsspecified in this subparagraph, with respect to

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8621a fiscal year, are the amounts appropriated for

2the following:3(i) Community health centers (includ4ing funds appropriated under the authorityof section 330 of the Public Health Service6Act (42 U.S.C. 254b)).7(ii) The National Health Service8Corps Program (including funds appro9

priated under the authority of section 338of such Act (42 U.S.C. 254k)).11(iii) The National Health Service12Corps Scholarship and Loan Repayment13Programs (including funds appropriated14under the authority of section 338H ofsuch Act (42 U.S.C. 254q)).16(iv) Primary care loan funds (includ17

ing funds appropriated for schools of medi18cine or osteopathic medicine under the au19thority of section 735(f) of such Act (42U.S.C. 292y(f))).21(v) Primary care education programs22(including funds appropriated under the23authority of sections 736, 740, 741, and24747 of such Act (42 U.S.C. 293, 293d,and 293k)).

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8631(vi) Sections 761 and 770 of such Act

2(42 U.S.C. 294n and 295e).3(vii) Nursing workforce development4(including funds appropriated under the5authority of title VIII of such Act (426U.S.C. 296 et seq.)).7(viii) The National Center for Health

8Statistics (including funds appropriated9under the authority of sections 304, 306,10307, and 308 of such Act (42 U.S.C.11242b, 242k, 242l, and 242m)).12(ix) The Agency for Healthcare Re13search and Quality (including funds appro14priated under the authority of title IX of15

such Act (42 U.S.C. 299 et seq.)).16(3) BUDGETARY IMPLICATIONS.Amounts ap17propriated under this section, and outlays flowing18from such appropriations, shall not be taken into ac19count for purposes of any budget enforcement proce20dures including allocations under section 302(a) and21(b) of the Balanced Budget and Emergency Deficit22Control Act and budget resolutions for fiscal years23during which appropriations are made from the24Fund.

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8641TITLE ICOMMUNITY HEALTH

2CENTERS3SEC. 2101. INCREASED FUNDING.4Section 330 of the Public Health Service Act (42U.S.C. 254b) is amended 6(1) in subsection (r)(1) 7(A) in subparagraph (D), by striking8and

at the end;9

(B) in subparagraph (E), by striking theperiod at the end and inserting ; and; and11(C) by inserting at the end the following:12(F) Such sums as may be necessary for13each of fiscal years 2013 and 2019.; and14(2) by inserting after subsection (r) the following:16

(s) ADDITIONAL FUNDING.For the purpose of17carrying out this section, in addition to any other amounts18authorized to be appropriated for such purpose, there are19authorized to be appropriated, out of any monies in thePublic Health Investment Fund, the following:21(1) For fiscal year 2010, $1,000,000,000.22(2) For fiscal year 2011, $1,500,000,000.23(3) For fiscal year 2012, $2,500,000,000.24(4) For fiscal year 2013, $3,000,000,000.(5) For fiscal year 2014, $4,000,000,000.

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8651(6) For fiscal year 2015, $4,400,000,000.

2(7) For fiscal year 2016, $4,800,000,000.3(8) For fiscal year 2017, $5,300,000,000.4(9) For fiscal year 2018, $5,900,000,000.(10) For fiscal year 2019, $6,400,000,000..6TITLE IIWORKFORCE7Subtitle APrimary Care8

Workforce9PART 1NATIONAL HEALTH SERVICE CORPSSEC. 2201. NATIONAL HEALTH SERVICE CORPS.11(a) FULFILLMENT OF OBLIGATED SERVICE RE12QUIREMENT THROUGH HALF-TIME SERVICE. 13(1) WAIVERS.Subsection (i) of section 33114(42 U.S.C. 254d) is amended (A) in paragraph (1), by striking In car16rying out subpart III and all that follows

17through the period and inserting In carrying18out subpart III, the Secretary may, in accord19ance with this subsection, issue waivers to individualswho have entered into a contract for ob21ligated service under the Scholarship Program22or the Loan Repayment Program under which23the individuals are authorized to satisfy the re24quirement of obligated service through providingclinical practice that is half-time.;

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8661(B) in paragraph (2)

2(i) in subparagraphs (A)(ii) and (B),3by striking less than full time each place4it appears and inserting half time;(ii) in subparagraphs (C) and (F), by6striking less than full-time service each7place it appears and inserting half-time8

service; and9

(iii) by amending subparagraphs (D)and (E) to read as follows:11(D) the entity and the Corps member agree in12writing that the Corps member will perform half-13time clinical practice;14(E) the Corps member agrees in writing tofulfill all of the service obligations under section

16338C through half-time clinical practice and ei17ther 18(i) double the period of obligated service;19or(ii) in the case of contracts entered into21under section 338B, accept a minimum service22obligation of 2 years with an award amount23equal to 50 percent of the amount that would24otherwise be payable for full-time service; and;and

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8671(C) in paragraph (3), by striking In eval2

uating a demonstration project described in3paragraph (1) and inserting In evaluating4waivers issued under paragraph (1).(2) DEFINITIONS.Subsection (j) of section6331 (42 U.S.C. 254d) is amended by adding at the7end the following:8(5) The terms full time and full-time mean

9a minimum of 40 hours per week in a clinical practice,for a minimum of 45 weeks per year.11(6) The terms half time and half-time mean12a minimum of 20 hours per week (not to exceed 3913hours per week) in a clinical practice, for a min14imum of 45 weeks per year..(b) REAPPOINTMENT TO NATIONAL ADVISORY COUN16CIL .Section 337(b)(1) (42 U.S.C. 254j(b)(1)) is amend17ed by striking Members may not be reappointed to the

18Council..19(c) LOAN REPAYMENT AMOUNT.Section338B(g)(2)(A) is amended (42 U.S.C. 254l1(g)(2)(A))21by striking $35,000 and inserting $50,000, plus, be22ginning with fiscal year 2012, an amount determined by23the Secretary on an annual basis to reflect inflation,.24(d) TREATMENT OF TEACHING AS OBLIGATED SERV-ICE.Subsection (a) of section 338C (42 U.S.C. 254m)

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8681is amended by adding at the end the following: The Sec2

retary may treat teaching as clinical practice for up to320 percent of such period of obligated service..4SEC. 2202. AUTHORIZATIONS OF APPROPRIATIONS.5(a) NATIONAL HEALTH SERVICE CORPS PRO6GRAM.Section 338 (42 U.S.C. 254k) is amended 7(1) in subsection (a), by striking 2012 and8inserting 2019; and

9(2) by adding at the end the following:10(c) For the purpose of carrying out this subpart,11in addition to any other amounts authorized to be appro12priated for such purpose, there are authorized to be appro13priated, out of any monies in the Public Health Invest14ment Fund, the following:15(1) $63,000,000 for fiscal year 2010.16(2) $66,000,000 for fiscal year 2011.

17(3) $70,000,000 for fiscal year 2012.18(4) $73,000,000 for fiscal year 2013.19(5) $77,000,000 for fiscal year 2014.20(6) $81,000,000 for fiscal year 2015.21(7) $85,000,000 for fiscal year 2016.22(8) $89,000,000 for fiscal year 2017.23(9) $94,000,000 for fiscal year 2018.24(10) $98,000,000 for fiscal year 2019..

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8691(b) SCHOLARSHIP AND LOAN REPAYMENT PRO2

GRAMS.Subpart III of part D of title III of the Public3Health Service Act (42 U.S.C. 254l et seq.) is amended 4(1) in section 338H(a) (A) in paragraph (4), by striking and at6the end;7(B) in paragraph (5), by striking the pe8riod at the end and inserting ; and; and9

(C) by adding at the end the following:(6) for fiscal years 2013 and 2019, such sums11as may be necessary.; and12(2) by inserting after section 338H the fol13lowing:14SEC. 338H1. ADDITIONAL FUNDING.For the purpose of carrying out this subpart, in ad16dition to any other amounts authorized to be appropriated17for such purpose, there are authorized to be appropriated,

18out of any monies in the Public Health Investment Fund,19the following:(1) $254,000,000 for fiscal year 2010.21(2) $266,000,000 for fiscal year 2011.22(3) $278,000,000 for fiscal year 2012.23(4) $292,000,000 for fiscal year 2013.24(5) $306,000,000 for fiscal year 2014.(6) $321,000,000 for fiscal year 2015.

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8701(7) $337,000,000 for fiscal year 2016.

2(8) $354,000,000 for fiscal year 2017.3(9) $372,000,000 for fiscal year 2018.4(10) $391,000,000 for fiscal year 2019..5PART 2PROMOTION OF PRIMARY CARE AND6DENTISTRY7SEC. 2211. FRONTLINE HEALTH PROVIDERS.

8Part D of title III (42 U.S.C. 254b et seq.) is amend9ed by adding at the end the following:10Subpart XIHealth Professional Needs Areas11SEC. 340H. IN GENERAL.12(a) PROGRAM.The Secretary, acting through the13Administrator of the Health Resources and Services Ad14ministration, shall establish a program, to be known as15

the Frontline Health Providers Loan Repayment Pro16gram, to address unmet health care needs in health profes17sional needs areas through loan repayments under section18340I.19(b) DESIGNATION OF HEALTH PROFESSIONAL20NEEDS AREAS. 21(1) IN GENERAL.In this subpart, the term22health professional needs area means an area, pop23ulation, or facility that is designated by the Sec24retary in accordance with paragraph (2).

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8711(2) DESIGNATION.To be designated by the

2Secretary as a health professional needs area under3this subpart:4(A) In the case of an area, the area must5be a rational area for the delivery of health6services.7(B) The area, population, or facility must

8have, in one or more health disciplines, special9ties, or subspecialties for the population served,10as determined by the Secretary 11(i) insufficient capacity of health12professionals; or13(ii) high needs for health services.14(C) With respect to the delivery of pri15

mary health services, the area, population, or16facility must not include a health professional17shortage area (as designated under section18332), except that the area, population, or facil19ity may include such a health professional20shortage area to which no member of the Na21tional Health Service Corps is currently as22signed.23(c) ELIGIBILITY.To be eligible to participate in24the Program, an individual shall

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8721(1) hold a degree in a course of study or pro2

gram (approved by the Secretary) from a school de3fined in section 799B(1)(A) (other than a school of4public health);5(2) hold a degree in a course of study or pro6gram (approved by the Secretary) from a school or7program defined in subparagraph (C), (D), or8(E)(4) of section 799B(1), as designated by the Sec9retary;

10(3) be enrolled as a full-time student 11(A) in a school or program defined in12subparagraph (C), (D), or (E)(4) of section13799B(1), as designated by the Secretary, or a14school described in paragraph (1); and15(B) in the final year of a course of study16

or program, offered by such school or program17and approved by the Secretary, leading to a de18gree in a discipline referred to in subparagraph19(A) (other than a graduate degree in public20health), (C), (D), or (E)(4) of section 799B(1);21(4) be a practitioner described in section221842(b)(18)(C) or 1848(k)(3)(B)(iii) or (iv) of the23Social Security Act; or

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8731(5) be a practitioner in the field of respiratory

2therapy, medical technology, or radiologic tech3nology.4(d) DEFINITION.In this subpart, the term primaryhealth services has the meaning given to such term6in section 331(a)(3)(D).7SEC. 340I. LOAN REPAYMENTS.8(a) LOAN REPAYMENTS.The Secretary, acting

9through the Administrator of the Health Resources andServices Administration, shall enter into contracts with in11dividuals under which 12(1) the individual agrees 13(A) to serve as a full-time primary health14services provider or as a full-time or part-timeprovider of other health services for a period of16time equal to 2 years or such longer period as

17the individual may agree to;18(B) to serve in a health professional19needs area in a health discipline, specialty, or asubspecialty for which the area, population, or21facility is designated as a health professional22needs area under section 340H; and23(C) in the case of an individual described24in subsection 340H(c)(3) who is in the finalyear of study and who has accepted employ-

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8741ment as primary health services provider or

2provider of other health services in accordance3with subparagraphs (A) and (B), to complete4the education or training and maintain an acceptablelevel of academic standing (as deter6mined by the educational institution offering7the course of study or training); and8(2) the Secretary agrees to pay, for each year

9of such service, an amount on the principal and interestof the undergraduate or graduate educational11loans (or both) of the individual that is not more12than 50 percent of the average award made under13the National Health Service Corps Loan Repayment14Program under subpart III in that year.(b) PRACTICE SETTING.A contract entered into16

under this section shall allow the individual receiving the17loan repayment to satisfy the service requirement de18scribed in subsection (a)(1) through employment in a solo19or group practice, a clinic, an accredited public or privatenonprofit hospital, or any other health care entity, as21deemed appropriate by the Secretary.22(c) APPLICATION OF CERTAIN PROVISIONS.The23provisions of subpart III of part D shall, except as incon24sistent with this section, apply to the loan repayment programunder this subpart in the same manner and to the

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8751same extent as such provisions apply to the National

2Health Service Corps Loan Repayment Program estab3lished under section 338B.4(d) INSUFFICIENT NUMBER OF APPLICANTS.If5there are an insufficient number of applicants for loan re6payments under this section to obligate all appropriated7funds, the Secretary shall transfer the unobligated funds8to the National Health Service Corps for the purpose of

9(1) recruitment of sufficient applicants for the10National Health Service Corps for the following11year; or12(2) making additional loan repayments under13section 338B if there is an excess number of quali14fied applicants for loan repayments under such sec15tion.16

SEC. 340J. REPORT.17The Secretary shall submit to the Congress an an18nual report on the program carried out under this subpart.19SEC. 340K. ALLOCATION.20Of the amount of funds obligated under this subpart21each fiscal year for loan repayments 22(1) 90 percent shall be for physicians and23other health professionals providing primary health24services; and

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8761(2) 10 percent shall be for health professionals

2not described in paragraph (1)..3SEC. 2212. PRIMARY CARE STUDENT LOAN FUNDS.4(a) LOAN PROVISIONS.Section 722 (42 U.S.C.292r) is amended by striking subsection (e) and inserting6the following:7(e) RATE OF INTEREST.Such loans shall bear in8terest, on the unpaid balance of the loan, computed only

9for periods for which the loan is repayable, at the rateof 2 percentage points less than the applicable rate of in11terest described in section 427A(l)(1) of the Higher Edu12cation Act of 1965 per year..13(b) MEDICAL SCHOOLS AND PRIMARY HEALTH14CARE.Subsection (a) of section 723 (42 U.S.C. 292s)is amended 16(1) in paragraph (1), by striking subparagraph17

(B) and inserting the following:18(B) to practice in such care for 10 years19(including residency training in primary healthcare) or through the date on which the loan is21repaid in full, whichever occurs first.; and22(2) by striking paragraph (3) and inserting the23following:24(3) NONCOMPLIANCE BY STUDENT.If an individualfails to comply with an agreement entered

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8771into pursuant to paragraph (1), such agreement

2shall provide that the total interest to be paid on the3loan, over the course of the loan period, shall equal4the total amount of interest that would have been incurredby the individual if, from the outset of the6loan, the loan was repayable at the rate of interest7described in section 427A(l)(1) of the Higher Edu8cation Act of 1965 per year instead of the rate of

9interest described in section 722(e)..(c) STUDENT LOAN GUIDELINES. 11(1) IN GENERAL.Section 735 (42 U.S.C.12292y) is amended 13(A) by redesignating subsection (f) as sub14section (g); and(B) by inserting after subsection (e) the16following:

17(f) DETERMINATION OF FINANCIAL NEED.The18Secretary 19(1) may require, or authorize a school or otherentity to require, the submission of financial infor21mation to determine the financial resources available22to any individual seeking assistance under this sub23part; and24(2) shall take into account the extent to whichsuch individual is financially independent in deter-

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8781mining whether to require or authorize the submis2

sion of such information regarding such individuals3family members..4(2) REVISED GUIDELINES.The Secretary ofHealth and Human Services shall 6(A) strike the second sentence of section757.206(b) of title 42, Code of Federal Regula8tions; and9

(B) make such other revisions to guidelinesand regulations in effect as of the date of the11enactment of this Act as may be necessary for12consistency with the amendments made by13paragraph (1).14SEC. 2213. TRAINING IN FAMILY MEDICINE, GENERAL INTERNALMEDICINE, GENERAL PEDIATRICS,16GERIATRICS, AND PHYSICIAN

17ASSISTANTSHIP.18Section 747 (42 U.S.C. 293k) is amended 19(1) by amending the section heading to read asfollows: PRIMARY CARE TRAINING AND EN21HANCEMENT;22(2) by redesignating subsection (e) as sub23section (f); and24(3) by striking subsections (a) through (d) andinserting the following:

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8791(a) PROGRAM.The Secretary shall establish a pri2

mary care training and capacity building program con3sisting of awarding grants and contracts under sub4sections (b) and (c).(b) SUPPORT AND DEVELOPMENT OF PRIMARY6CARE TRAINING PROGRAMS. 7(1) IN GENERAL.The Secretary shall make8grants to, or enter into contracts with, eligible enti9ties (A) to plan, develop, operate, or partici11

pate in an accredited professional training pro12gram, including an accredited residency or in13ternship program, in the field of family medi14cine, general internal medicine, general pediatrics,or geriatrics for medical students, interns,16residents, or practicing physicians;17(B) to provide financial assistance in the18form of traineeships and fellowships to medical19students, interns, residents, or practicing physicians,

who are participants in any such pro21gram, and who plan to specialize or work in22family medicine, general internal medicine, gen23eral pediatrics, or geriatrics;24(C) to plan, develop, operate, or participatein an accredited program for the training

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880

1of physicians who plan to teach in family medi2cine, general internal medicine, general pediat3rics, or geriatrics training programs including4in community-based settings;5(D) to provide financial assistance in the6form of traineeships and fellowships to prac7ticing physicians who are participants in any8

such programs and who plan to teach in a fam9ily medicine, general internal medicine, general10pediatrics, or geriatrics training program; and11(E) to plan, develop, operate, or partici12pate in an accredited program for physician as13sistant education, and for the training of indi14viduals who plan to teach in programs to pro15vide such training.16(2) ELIGIBILITY.To be eligible for a grant17

or contract under paragraph (1), an entity shall18be 19(A) an accredited school of medicine or20osteopathic medicine, public or nonprofit private21hospital, or physician assistant training pro22gram;23(B) a public or private nonprofit entity;24or

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8811(C) a consortium of 2 or more entities de2

scribed in subparagraphs (A) and (B).3(c) CAPACITY BUILDING IN PRIMARY CARE. 4(1) IN GENERAL.The Secretary shall make5grants to or enter into contracts with eligible entities6to establish, maintain, or improve 7(A) academic administrative units (in8cluding departments, divisions, or other appro9

priate units) in the specialties of family medi10cine, general internal medicine, general pediat11rics, or geriatrics; or12(B) programs that improve clinical teach13ing in such specialties.14(2) ELIGIBILITY.To be eligible for a grant15or contract under paragraph (1), an entity shall be16an accredited school of medicine or osteopathic med17icine.

18(d) PREFERENCE.In awarding grants or contracts19under this section, the Secretary shall give preference to20entities that have a demonstrated record of the following:21(1) Training the greatest percentage, or sig22nificantly improving the percentage, of health care23professionals who provide primary care.

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8821(2) Training individuals who are from under2

represented minority groups or disadvantaged back3grounds.4(3) A high rate of placing graduates in practicesettings having the principal focus of serving in6underserved areas or populations experiencing health7disparities (including serving patients eligible for8medical assistance under title XIX of the Social Se9curity Act or for child health assistance under title

XXI of such Act or those with special health care11needs).12(4) Supporting teaching programs that ad13dress the health care needs of vulnerable popu14lations.(e) REPORT.The Secretary shall submit to the16Congress an annual report on the program carried out17under this section.18

(f) DEFINITION.In this section, the term health19disparities has the meaning given the term in section3171..21SEC. 2214. TRAINING OF MEDICAL RESIDENTS IN COMMU22NITY-BASED SETTINGS.23Title VII (42 U.S.C. 292 et seq.) is amended 24(1) by redesignating section 748 as 749A; and(2) by inserting after section 747 the following:

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8831SEC. 748. TRAINING OF MEDICAL RESIDENTS IN COMMU2

NITY-BASED SETTINGS.3(a) PROGRAM.The Secretary shall establish a pro4gram for the training of medical residents in community-based settings consisting of awarding grants or contracts6under this section.7(b) DEVELOPMENT AND OPERATION OF COMMU8NITY-BASED PROGRAMS.The Secretary shall make9grants to, or enter into contracts with, eligible entities (1) to plan and develop a new primary care11

residency training program, which may include 12(A) planning and developing curricula;13(B) recruiting and training residents and14faculty; and(C) other activities designated to result in16accreditation of such a program; or17

(2) to operate or participate in an established18primary care residency training program, which may19include (A) planning and developing curricula;21(B) recruitment and training of residents;22and23(C) retention of faculty.24(c) ELIGIBLE ENTITY.To be eligible to receive agrant or contract under subsection (b), an entity shall

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8841(1) be designated as a recipient of payment

2for the direct costs of medical education under sec3tion 1886(k) of the Social Security Act;4(2) be designated as an approved teachinghealth center under section 1502(d) of the Americas6Affordable Health Choices Act of 2009 and con7tinuing to participate in the demonstration project8under such section; or9(3) be an applicant for designation describedin paragraph (1) or (2) and have demonstrated to

11the Secretary appropriate involvement of an accred12ited teaching hospital to carry out the inpatient re13sponsibilities associated with a primary care resi14dency training program.(d) PREFERENCES.In awarding grants and con16tracts under paragraph (1) or (2) of subsection (b), the17Secretary shall give preference to entities that 18(1) support teaching programs that address

19the health care needs of vulnerable populations; or(2) are a Federally qualified health center (as21defined in section 1861(aa)(4) of the Social Security22Act) or a rural health clinic (as defined in section231861(aa)(2) of such Act).24(e) ADDITIONAL PREFERENCES FOR ESTABLISHEDPROGRAMS.In awarding grants and contracts under

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8851subsection (b)(2), the Secretary shall give preference to

2entities that have a demonstrated record of training 3(1) a high or significantly improved percentage4of health care professionals who provide primary5care;6(2) individuals who are from underrepresented7minority groups or disadvantaged backgrounds; or

8(3) individuals who practice in settings having9the principal focus of serving underserved areas or10populations experiencing health disparities (including11serving patients eligible for medical assistance under12title XIX of the Social Security Act or for child13health assistance under title XXI of such Act or14

those with special health care needs).15(f) PERIOD OF AWARDS. 16(1) IN GENERAL.The period of a grant or17contract under this section 18(A) shall not exceed 2 years for awards19under subsection (b)(1); and20(B) shall not exceed 5 years for awards21under subsection (b)(2).22(2) SPECIAL RULES. 23(A) An award of a grant or contract24under subsection (b)(1) shall not be renewed.

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8861(B) The period of a grant or contract

2awarded to an entity under subsection (b)(2)3shall not overlap with the period of any grant4or contact awarded to the same entity under5subsection (b)(1).6(g) REPORT.The Secretary shall submit to the7Congress an annual report on the program carried out

8under this section.9(h) DEFINITIONS.In this section:10(1) PRIMARY CARE RESIDENCY TRAINING PRO11GRAM.The term primary care residency training12program means an approved medical residency13training program described in section 1886(h)(5)(A)14of the Social Security Act that is

15(A) in the case of entities seeking awards16under subsection (b)(1), actively applying to be17accredited by the Accreditation Council for18Graduate Medical Education; or19(B) in the case of entities seeking awards20under subsection (b)(2), so accredited.21(2) HEALTH DISPARITIES.The term health22disparities has the meaning given the term in sec23tion 3171..

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8871SEC. 2215. TRAINING FOR GENERAL, PEDIATRIC, AND PUB2

LIC HEALTH DENTISTS AND DENTAL HYGIEN3ISTS.4Title VII (42 U.S.C. 292 et seq.) is amended (1) in section 791(a)(1), by striking 747 and6750 and inserting 747, 749, and 750; and7(2) by inserting after section 748, as added, the8following:9SEC. 749. TRAINING FOR GENERAL, PEDIATRIC, AND PUBLICHEALTH DENTISTS AND DENTAL HYGIEN11

ISTS.12(a) PROGRAM.The Secretary shall establish a den13tal medicine training program consisting of awarding14grants and contracts under this section.(b) SUPPORT AND DEVELOPMENT OF DENTAL16TRAINING PROGRAMS.The Secretary shall make grants17to, or enter into contracts with, eligible entities

18(1) to plan, develop, operate, or participate in19an accredited professional training program for oralhealth professionals;21(2) to provide financial assistance to oral22health professionals who are in need thereof, who23are participants in any such program, and who plan24to work in general, pediatric, or public heath dentistry,or dental hygiene;

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8881(3) to plan, develop, operate, or participate in

2a program for the training of oral health profes3sionals who plan to teach in general, pediatric, or4public health dentistry, or dental hygiene;(4) to provide financial assistance in the form6of traineeships and fellowships to oral health profes7sionals who plan to teach in general, pediatric, or8public health dentistry or dental hygiene;9(5) to establish, maintain, or improve

(A) academic administrative units (in11

cluding departments, divisions, or other appro12priate units) in the specialties of general, pedi13atric, or public health dentistry; or14(B) programs that improve clinical teachingin such specialties.16(6) to plan, develop, operate, or participate in17predoctoral and postdoctoral training in general, pe18diatric, or public health dentistry programs, or train19

ing for dental hygienists;(7) to plan, develop, operate, or participate in21a loan repayment program for full-time faculty in a22program of general, pediatric, or public health den23tistry; and24(8) to provide technical assistance to pediatricdental training programs in developing and imple

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8891menting instruction regarding the oral health status,

2dental care needs, and risk-based clinical disease3management of all pediatric populations with an em4phasis on underserved children.5(c) ELIGIBILITY.To be eligible for a grant or con6tract under subsection (a), an entity shall be 7(1) an accredited school of dentistry, training8program in dental hygiene, or public or nonprofit

9private hospital;10(2) a training program in dental hygiene at an11accredited institution of higher education;12(3) a public or private nonprofit entity; or13(4) a consortium of 14(A) 2 or more of the entities described in15

paragraphs (1) through (3); and16(B) an accredited school of public health.17(d) PREFERENCE.In awarding grants or contracts18under this section, the Secretary shall give preference to19entities that have a demonstrated record of the following:20(1) Training the greatest percentage, or sig21nificantly improving the percentage, of oral health22professionals who practice general, pediatric, or pub23lic health dentistry.

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8901(2) Training individuals who are from under2

represented minority groups or disadvantaged back3grounds.4(3) A high rate of placing graduates in practicesettings having the principal focus of serving in6underserved areas or populations experiencing health7disparities (including serving patients eligible for8medical assistance under title XIX of the Social Se9curity Act or for child health assistance under title

XXI of such Act or those with special health care11needs).12(4) Supporting teaching programs that ad13dress the dental needs of vulnerable populations.14(5) Providing instruction regarding the oralhealth status, dental care needs, and risk-based clin16ical disease management of all pediatric populations17with an emphasis on underserved children.18

(e) REPORT.The Secretary shall submit to the19Congress an annual report on the program carried outunder this section.21(f) DEFINITION.In this section:22(1) The term health disparities has the23meaning given the term in section 3171.24(2) The term oral health professional meansan individual training or practicing

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8911(A) in general dentistry, pediatric den2

tistry, public health dentistry, or dental hy3giene; or4(B) another dental medicine specialty, asdeemed appropriate by the Secretary..6SEC. 2216. AUTHORIZATION OF APPROPRIATIONS.7(a) IN GENERAL.Part F of title VII (42 U.S.C.8295j et seq.) is amended by adding at the end the fol9lowing:SEC. 799C. FUNDING THROUGH PUBLIC HEALTH INVEST11MENT FUND.

12(a) PROMOTION OF PRIMARY CARE AND DEN13TISTRY.For the purpose of carrying out subpart XI of14part D of title III and sections 723, 747, 748, and 749,in addition to any other amounts authorized to be appro16priated for such purpose, there is authorized to be appro17priated, out of any monies in the Public Health Invest18ment Fund, the following:19(1) $240,000,000 for fiscal year 2010.

(2) $253,000,000 for fiscal year 2011.21(3) $265,000,000 for fiscal year 2012.22(4) $278,000,000 for fiscal year 2013.23(5) $292,000,000 for fiscal year 2014.24(6) $307,000,000 for fiscal year 2015.(7) $322,000,000 for fiscal year 2016.

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8921(8) $338,000,000 for fiscal year 2017.

2(9) $355,000,000 for fiscal year 2018.3(10) $373,000,000 for fiscal year 2019..4(b) EXISTING AUTHORIZATIONS OF APPROPRIATIONS. 6(1) SECTION 735.Paragraph (1) of section7735(g), as so redesignated, is amended by inserting8and such sums as may be necessary for subsequent

9years through fiscal year 2019 before the period atthe end.11(2) SECTION 747.Subsection (f), as so redes12ignated, of section 747 (42 U.S.C. 293k) is amended13by striking 2002 and inserting 2019.14Subtitle BNursing WorkforceSEC. 2221. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.16(a) DEFINITIONS.Section 801 (42 U.S.C. 296 et

17seq.) is amended 18(1) in paragraph (1), by inserting nurse-man19aged health centers after nursing centers,; and(2) by adding at the end the following:21(16) NURSE-MANAGED HEALTH CENTER. 22The term nurse-managed health center means a23nurse-practice arrangement, managed by advanced24practice nurses, that provides primary care orwellness services to underserved or vulnerable popu

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8931lations and is associated with an accredited school of

2nursing, Federally qualified health center, or inde3pendent nonprofit health or social services agency..4(a) GRANTS FOR HEALTH PROFESSIONS EDU5CATION.Title VIII (42 U.S.C. 296 et seq.) is amended6by striking section 807.7(b) ADVANCED EDUCATION NURSING GRANTS.Sec8tion 811(f) (42 U.S.C. 296j(f)) is amended 9

(1) by striking paragraph (2);10(2) by redesignating paragraph (3) as para11graph (2); and12(3) in paragraph (2), as so redesignated, by13striking that agrees and all that follows through14the end and inserting: that agrees to expend the15award 16

(A) to train advanced education nurses17who will practice in health professional shortage18areas designated under section 332; or19(B) to increase diversity among advanced20education nurses..21(c) NURSE EDUCATION, PRACTICE, AND RETENTION22GRANTS.Section 831 (42 U.S.C. 296p) is amended 23(1) in subsection (b), by amending paragraph24(3) to read as follows:

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8941(3) providing coordinated care, quality care,

2and other skills needed to practice nursing;; and3(2) by striking subsection (e) and redesignating4subsections (f) through (h) as subsections (e)through (g), respectively.6(d) STUDENT LOANS.Subsection (a) of section 8367(42 U.S.C. 297b) is amended 8

(1) by striking$2,500

and inserting9

$3,300;(2) by striking $4,000 and inserting11$5,200;12(3) by striking $13,000 and inserting13$17,000; and14(4) by adding at the end the following: Beginningwith fiscal year 2012, the dollar amounts speci16

fied in this subsection shall be adjusted by an17amount determined by the Secretary on an annual18basis to reflect inflation..19(e) LOAN REPAYMENT.Section 846 (42 U.S.C.297n) is amended 21(1) in subsection (a), by amending paragraph22(3) to read as follows:23(3) who enters into an agreement with the24Secretary to serve for a period of not less than 2years

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8951(A) as a nurse at a health care facility

2with a critical shortage of nurses; or3(B) as a faculty member at an accredited4school of nursing;; and(2) in subsection (g)(1), by striking to provide6health services each place it appears and inserting7to provide health services or serve as a faculty8

member.9

(f) NURSE FACULTY LOAN PROGRAM.Paragraph(2) of section 846A(c) (42 U.S.C. 297n1(c)) is amended11by striking $30,000 and all that follows through the12semicolon and inserting $35,000, plus, beginning with13fiscal year 2012, an amount determined by the Secretary14on an annual basis to reflect inflation;.(g) PUBLIC SERVICE ANNOUNCEMENTS.Title VIII

16(42 U.S.C. 296 et seq.) is amended by striking part H.17(h) TECHNICAL AND CONFORMING AMENDMENTS. 18Title VIII (42 U.S.C. 296 et seq.) is amended 19(1) by redesignating section 810 (relating toprohibition against discrimination by schools on the21basis of sex) as section 809 and moving such section22so that it follows section 808;23(2) in sections 835, 836, 838, 840, and 842, by24striking the term this subpart each place it appearsand inserting this part;

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8961(3) in section 836(h), by striking the last sen2

tence;3(4) in section 836, by redesignating subsection4(l) as subsection (k);5(5) in section 839, by striking 839 and all6that follows through (a) and inserting 839. (a);7(6) in section 835(b), by striking 841 each8

place it appears and inserting871

;9

(7) by redesignating section 841 as section 871,10moving part F to the end of the title, and redesig11nating such part as part H;12(8) in part G 13(A) by redesignating section 845 as section14851; and15

(B) by redesignating part G as part F; and16(9) in part I 17(A) by redesignating section 855 as section18861; and19(B) by redesignating part I as part G.20(i) FUNDING. 21(1) IN GENERAL.Part H, as redesignated, of22title VIII is amended by adding at the end the fol23lowing:

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8971SEC. 872. FUNDING THROUGH PUBLIC HEALTH INVEST2

MENT FUND.3For the purpose of carrying out this title, in addi4tion to any other amounts authorized to be appropriatedfor such purpose, there are authorized to be appropriated,6out of any monies in the Public Health Investment Fund,7the following:8(1) $115,000,000 for fiscal year 2010.9(2) $122,000,000 for fiscal year 2011.(3) $127,000,000 for fiscal year 2012.

11(4) $134,000,000 for fiscal year 2013.12(5) $140,000,000 for fiscal year 2014.13(6) $147,000,000 for fiscal year 2015.14(7) $154,000,000 for fiscal year 2016.(8) $162,000,000 for fiscal year 2017.16(9) $170,000,000 for fiscal year 2018.

17(10) $179,000,000 for fiscal year 2019..18(2) EXISTING AUTHORIZATIONS OF APPROPRIA19TIONS. (A) SECTIONS 831, 846, 846A, AND 861. 21Sections 831(g) (as so redesignated), 846(i)(1)22(42 U.S.C. 297n(i)(1)), 846A(f) (42 U.S.C.23297n1(f)), and 861(e) (as so redesignated) are24amended by striking 2007 each place it appearsand inserting 2019.

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8981(B) SECTION 871.Section 871, as so re2

designated, is amended to read as follows:3SEC. 871. FUNDING.4For the purpose of carrying out parts B, C, and D(subject to section 845(g)), there are authorized to be ap6propriated such sums as may be necessary for each fiscal7year through fiscal year 2019..8Subtitle CPublic Health9

WorkforceSEC. 2231. PUBLIC HEALTH WORKFORCE CORPS.11Part D of title III (42 U.S.C. 254b et seq.), as12amended by section 2211, is amended by adding at the13end the following:14Subpart XIIPublic Health WorkforceSEC. 340L. PUBLIC HEALTH WORKFORCE CORPS.16(a) ESTABLISHMENT.There is established, within

17the Service, the Public Health Workforce Corps (in this18subpart referred to as the Corps), for the purpose of en19suring an adequate supply of public health professionalsthroughout the Nation. The Corps shall consist of 21(1) such officers of the Regular and Reserve22Corps of the Service as the Secretary may designate;23and24(2) such civilian employees of the UnitedStates as the Secretary may appoint.

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8991(b) ADMINISTRATION.Except as provided in sub2

section (c), the Secretary shall carry out this subpart act3ing through the Administrator of the Health Resources4and Services Administration.5(c) PLACEMENT AND ASSIGNMENT.The Secretary,6acting through the Director of the Centers for Disease7Control and Prevention, shall develop a methodology for8placing and assigning Corps participants as public health

9professionals. Such methodology may allow for placing and10assigning such participants in State, local, and tribal11health departments and Federally qualified health centers12(as defined in section 1861(aa)(4) of the Social Security13Act).14(d) APPLICATION OF CERTAIN PROVISIONS.The15

provisions of subpart II shall, except as inconsistent with16this subpart, apply to the Public Health Workforce Corps17in the same manner and to the same extent as such provi18sions apply to the National Health Service Corps estab19lished under section 331.20(e) REPORT.The Secretary shall submit to the21Congress an annual report on the programs carried out22under this subpart.

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9001SEC. 340M. PUBLIC HEALTH WORKFORCE SCHOLARSHIP

2PROGRAM.3(a) ESTABLISHMENT.The Secretary shall estab4lish the Public Health Workforce Scholarship Program(referred to in this section as the Program) for the pur6pose described in section 340L(a).7(b) ELIGIBILITY.To be eligible to participate in8the Program, an individual shall 9(1)(A) be accepted for enrollment, or be enrolled,as a full-time or part-time student in a course

11of study or program (approved by the Secretary) at12an accredited graduate school or program of public13health; or14(B) have demonstrated expertise in publichealth and be accepted for enrollment, or be en16rolled, as a full-time or part-time student in a course17

of study or program (approved by the Secretary)18at 19(i) an accredited graduate school or programof nursing; health administration, man21agement, or policy; preventive medicine; labora22tory science; veterinary medicine; or dental23medicine; or24(ii) another accredited graduate school orprogram, as deemed appropriate by Secretary;

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9011(2) be eligible for, or hold, an appointment as

2a commissioned officer in the Regular or Reserve3Corps of the Service or be eligible for selection for4civilian service in the Corps; and5(3) sign and submit to the Secretary a written6contract (described in subsection (c)) to serve full-7time as a public health professional, upon the com8

pletion of the course of study or program involved,9for the period of obligated service described in sub10section (c)(2)(E).11(c) CONTRACT.The written contract between the12Secretary and an individual under subsection (b)(3) shall13contain 14(1) an agreement on the part of the Secretary15

that the Secretary will 16(A) provide the individual with a scholar17ship for a period of years (not to exceed 4 aca18demic years) during which the individual shall19pursue an approved course of study or program20to prepare the individual to serve in the public21health workforce; and22(B) accept (subject to the availability of23appropriated funds) the individual into the24Corps;

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9021(2) an agreement on the part of the individual

2that the individual will 3(A) accept provision of such scholarship4to the individual;5(B) maintain full-time or part-time enroll6ment in the approved course of study or pro7gram described in subsection (b)(1) until the in8dividual completes that course of study or pro9gram;

10(C) while enrolled in the approved course11of study or program, maintain an acceptable12level of academic standing (as determined by13the educational institution offering such course14of study or program);15(D) if applicable, complete a residency or16

internship; and17(E) serve full-time as a public health pro18fessional for a period of time equal to the great19er of 20(i) 1 year for each academic year for21which the individual was provided a schol22arship under the Program; or23(ii) 2 years; and

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9031(3) an agreement by both parties as to the na2

ture and extent of the scholarship assistance, which3may include 4(A) payment of reasonable educational ex5penses of the individual, including tuition, fees,6books, equipment, and laboratory expenses; and7(B) payment of a stipend of not more8than $1,269 (plus, beginning with fiscal year

92011, an amount determined by the Secretary10on an annual basis to reflect inflation) per11month for each month of the academic year in12volved, with the dollar amount of such a stipend13determined by the Secretary taking into consid14eration whether the individual is enrolled full-15time or part-time.16

(d) APPLICATION OF CERTAIN PROVISIONS.The17provisions of subpart III shall, except as inconsistent with18this subpart, apply to the scholarship program under this19section in the same manner and to the same extent as20such provisions apply to the National Health Service21Corps Scholarship Program established under section22338A.

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9041SEC. 340N. PUBLIC HEALTH WORKFORCE LOAN REPAY2

MENT PROGRAM.3(a) ESTABLISHMENT.The Secretary shall estab4lish the Public Health Workforce Loan Repayment Program(referred to in this section as the Program) for the6purpose described in section 340L(a).7(b) ELIGIBILITY.To be eligible to participate in8the Program, an individual shall 9(1)(A) have a graduate degree from an accreditedschool or program of public health;

11(B) have demonstrated expertise in public12health and have a graduate degree in a course of13study or program (approved by the Secretary)14from (i) an accredited school or program of16nursing; health administration, management, or

17policy; preventive medicine; laboratory science;18veterinary medicine; or dental medicine; or19(ii) another accredited school or programapproved by the Secretary; or21(C) be enrolled as a full-time or part-time stu22dent in the final year of a course of study or pro23gram (approved by the Secretary) offered by a24school or program described in subparagraph (A) or(B), leading to a graduate degree;

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9051(2) be eligible for, or hold, an appointment as

2a commissioned officer in the Regular or Reserve3Corps of the Service or be eligible for selection for4civilian service in the Corps;(3) if applicable, complete a residency or in6ternship; and7(4) sign and submit to the Secretary a written8contract (described in subsection (c)) to serve full-

9time as a public health professional for the period ofobligated service described in subsection (c)(2).11(c) CONTRACT.The written contract between the12Secretary and an individual under subsection (b)(4) shall13contain 14(1) an agreement by the Secretary to repay onbehalf of the individual loans incurred by the indi16vidual in the pursuit of the relevant public health

17workforce educational degree in accordance with the18terms of the contract;19(2) an agreement by the individual to servefull-time as a public health professional for a period21of time equal to 2 years or such longer period as the22individual may agree to; and23(3) in the case of an individual described in24subsection (b)(1)(C) who is in the final year of studyand who has accepted employment as a public health

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9061professional, in accordance with subsection 340L(c),

2an agreement on the part of the individual to com3plete the education or training, maintain an accept4able level of academic standing (as determined bythe educational institution offering the course of6study or training), and serve the period of obligated7service described in paragraph (2).8(d) PAYMENTS. 9(1) IN GENERAL.

A loan repayment providedfor an individual under a written contract under the

11Program shall consist of payment, in accordance12with paragraph (2), on behalf of the individual of13the principal, interest, and related expenses on gov14ernment and commercial loans received by the individualregarding the undergraduate or graduate edu16cation of the individual (or both), which loans were17made for reasonable educational expenses, including

18tuition, fees, books, equipment, and laboratory ex19penses, incurred by the individual.(2) PAYMENTS FOR YEARS SERVED. 21(A) IN GENERAL.For each year of obli22gated service that an individual contracts to23serve under subsection (c), the Secretary may24pay up to $35,000 (plus, beginning with fiscalyear 2012, an amount determined by the Sec

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9071retary on an annual basis to reflect inflation)

2on behalf of the individual for loans described3in paragraph (1).4(B) REPAYMENT SCHEDULE.Any arrangementmade by the Secretary for the mak6ing of loan repayments in accordance with this7subsection shall provide that any repayments8for a year of obligated service shall be made no

9later than the end of the fiscal year in whichthe individual completes such year of service.11(e) APPLICATION OF CERTAIN PROVISIONS.The12provisions of subpart III shall, except as inconsistent with13this subpart, apply to the loan repayment program under14this section in the same manner and to the same extentas such provisions apply to the National Health Service16

Corps Loan Repayment Program established under sec17tion 338B..18SEC. 2232. ENHANCING THE PUBLIC HEALTH WORKFORCE.19Section 765 (42 U.S.C. 295) is amended to read asfollows:21SEC. 765. ENHANCING THE PUBLIC HEALTH WORKFORCE.22(a) PROGRAM.The Secretary, acting through the23Administrator of the Health Resources and Services Ad24ministration and in consultation with the Director of theCenters for Disease Control and Prevention, shall estab

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9081lish a public health workforce training and enhancement

2program consisting of awarding grants and contracts3under subsection (b).4(b) GRANTS AND CONTRACTS.The Secretary shallaward grants and contracts to eligible entities 6(1) to plan, develop, operate, or participate in,7an accredited professional training program in the8

field of public health (including such a program in9nursing; health administration, management, or policy;preventive medicine; laboratory science; veteri11nary medicine; or dental medicine) for members of12the public health workforce including mid-career13professionals;14(2) to provide financial assistance in the formof traineeships and fellowships to students who are16

participants in any such program and who plan to17specialize or work in the field of public health;18(3) to plan, develop, operate, or participate in19a program for the training of public health professionalswho plan to teach in any program described21in paragraph (1); and22(4) to provide financial assistance in the form23of traineeships and fellowships to public health pro24fessionals who are participants in any program describedin paragraph (1) and who plan to teach in

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9091the field of public health, including nursing; health

2administration, management, or policy; preventive3medicine; laboratory science; veterinary medicine; or4dental medicine.5(c) ELIGIBILITY.To be eligible for a grant or con6tract under subsection (a), an entity shall be 7(1) an accredited health professions school, in8cluding an accredited graduate school or program of

9public health; nursing; health administration, man10agement, or policy; preventive medicine; laboratory11science; veterinary medicine; or dental medicine;12(2) a State, local, or tribal health department;13(3) a public or private nonprofit entity; or14(4) a consortium of 2 or more entities de15scribed in paragraphs (1) through (3).16

(d) PREFERENCE.In awarding grants or contracts17under this section, the Secretary shall give preference to18entities that have a demonstrated record of the following:19(1) Training the greatest percentage, or sig20nificantly improving the percentage, of public health21professionals who serve in underserved communities.22(2) Training individuals who are from under23represented minority groups or disadvantaged back24grounds.

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9101(3) Training individuals in public health spe2

cialties experiencing a significant shortage of public3health professionals (as determined by the Sec4retary).5(4) Training the greatest percentage, or sig6nificantly improving the percentage, of public health7professionals serving in the Federal Government or8a State, local, or tribal government.9(e) REPORT.

The Secretary shall submit to the10

Congress an annual report on the program carried out11under this section..12SEC. 2233. PUBLIC HEALTH TRAINING CENTERS.13Section 766 (42 U.S.C. 295a) is amended 14(1) in subsection (b)(1), by striking in further15ance of the goals established by the Secretary for16

the year 2000 and inserting in furtherance of the17goals established by the Secretary in the national18prevention and wellness strategy under section193121; and20(2) by adding at the end the following:21(d) REPORT.The Secretary shall submit to the22Congress an annual report on the program carried out23under this section..

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911

SEC. 2234. PREVENTIVE MEDICINE AND PUBLIC HEALTH

TRAINING GRANT PROGRAM.

Section 768 (42 U.S.C. 295c) is amended to read asfollows:SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH

TRAINING GRANT PROGRAM.

(a) GRANTS.The Secretary, acting through theAdministrator of the Health Resources and Services Administration

and in consultation with the Director of theCenters for Disease Control and Prevention, shall awardgrants to, or enter into contracts with, eligible entities toprovide training to graduate medical residents in preventivemedicine specialties.

(b) ELIGIBILITY.To be eligible for a grant or contractunder subsection (a), an entity shall be (1) an accredited school of public health or

school of medicine or osteopathic medicine;

(2) an accredited public or private hospital;

(3) a State, local, or tribal health department;

or

(4) a consortium of 2 or more entities de

scribed in paragraphs (1) through (3).

(c) USE OF FUNDS.Amounts received under agrant or contract under this section shall be used to (1) plan, develop (including the development ofcurricula), operate, or participate in an accredited

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9121residency or internship program in preventive medi2

cine or public health;3(2) defray the costs of practicum experiences,4as required in such a program; and(3) establish, maintain, or improve 6(A) academic administrative units (in7cluding departments, divisions, or other appro8priate units) in preventive medicine and public9health; or(B) programs that improve clinical teach11ing in preventive medicine and public health.

12(d) REPORT.The Secretary shall submit to the13Congress an annual report on the program carried out14under this section..SEC. 2235. AUTHORIZATION OF APPROPRIATIONS.16(a) IN GENERAL.Section 799C, as added by section172216 of this Act, is amended by adding at the end the

18following:19(b) PUBLIC HEALTH WORKFORCE.For the purposeof carrying out subpart XII of part D of title III21and sections 765, 766, and 768, in addition to any other22amounts authorized to be appropriated for such purpose,23there are authorized to be appropriated, out of any monies24in the Public Health Investment Fund, the following:(1) $51,000,000 for fiscal year 2010.

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9131(2) $54,000,000 for fiscal year 2011.

2(3) $57,000,000 for fiscal year 2012.3(4) $59,000,000 for fiscal year 2013.4(5) $62,000,000 for fiscal year 2014.(6) $65,000,000 for fiscal year 2015.6(7) $68,000,000 for fiscal year 2016.7(8) $72,000,000 for fiscal year 2017.8(9) $75,000,000 for fiscal year 2018.9

(10) $79,000,000 for fiscal year 2019..(b) EXISTING AUTHORIZATION OF APPROPRIA11TIONS.Subpart (a) of section 770 (42 U.S.C. 295e) is12amended by striking 2002 and inserting 2019.13Subtitle DAdapting Workforce to14Evolving Health System NeedsPART 1HEALTH PROFESSIONS TRAINING FOR16

DIVERSITY17SEC. 2241. SCHOLARSHIPS FOR DISADVANTAGED STU18DENTS, LOAN REPAYMENTS AND FELLOW19SHIPS REGARDING FACULTY POSITIONS, ANDEDUCATIONAL ASSISTANCE IN THE HEALTH21PROFESSIONS REGARDING INDIVIDUALS22FROM DISADVANTAGED BACKGROUNDS.23Paragraph (1) of section 738(a) (42 U.S.C. 293b(a))24is amended by striking not more than $20,000 and allthat follows through the end of the paragraph and insert-

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9141ing: not more than $35,000 (plus, beginning with fiscal

2year 2012, an amount determined by the Secretary on an3annual basis to reflect inflation) of the principal and inter4est of the educational loans of such individuals..5SEC. 2242. NURSING WORKFORCE DIVERSITY GRANTS.6Subsection (b) of section 821 (42 U.S.C. 296m) is7amended 8

(1) in the heading, by strikingGUIDANCE

9

and inserting CONSULTATION; and10(2) by striking shall take into consideration 11and all that follows through consult with nursing12associations and inserting shall, as appropriate,13consult with nursing associations.14SEC. 2243. COORDINATION OF DIVERSITY AND CULTURAL

15COMPETENCY PROGRAMS.16Title VII (42 U.S.C. 292 et seq.) is amended by in17serting after section 739 the following:18SEC. 739A. COORDINATION OF DIVERSITY AND CULTURAL19COMPETENCY PROGRAMS.20The Secretary shall, to the extent practicable, co21ordinate the activities carried out under this part and sec22tion 821 in order to enhance the effectiveness of such ac23tivities and avoid duplication of effort..

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915

PART 2INTERDISCIPLINARY TRAINING

PROGRAMS

SEC. 2251. CULTURAL AND LINGUISTIC COMPETENCY

TRAINING FOR HEALTH CARE PROFES

SIONALS.

Section 741 (42 U.S.C. 293e) is amended

(1) in the section heading, by striking GRANTS

FOR HEALTH PROFESSIONS EDUCATION

and insertingCULTURAL AND LINGUISTIC COMPETENCYTRAINING FOR HEALTH CARE PROFESSIONALS;(2) by redesignating subsection (b) as subsection(h); and(3) by striking subsection (a) and inserting thefollowing:(a) PROGRAM.The Secretary shall establish a culturaland linguistic competency training program forhealth care professionals, including nurse professionals,consisting of awarding grants and contracts under subsection(b).

(b) CULTURAL AND LINGUISTIC COMPETENCYTRAINING.The Secretary shall award grants and contractsto eligible entities

(1) to test, develop, and evaluate models ofcultural and linguistic competency training (includingcontinuing education) for health professionals;and

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9161(2) to implement cultural and linguistic com2

petency training programs for health professionals3developed under paragraph (1) or otherwise.4(c) ELIGIBILITY.To be eligible for a grant or con5tract under subsection (b), an entity shall be 6(1) an accredited health professions school or7program;8(2) an academic health center;

9(3) a public or private nonprofit entity; or10(4) a consortium of 2 or more entities de11scribed in paragraphs (1) through (3).12(d) PREFERENCE.In awarding grants and con13tracts under this section, the Secretary shall give pref14erence to entities that have a demonstrated record of the15following:16(1) Addressing, or partnering with an entity

17with experience addressing, the cultural and lin18guistic competency needs of the population to be19served through the grant or contract.20(2) Addressing health disparities.21(3) Placing health professionals in regions ex22periencing significant changes in the cultural and23linguistic demographics of populations, including24communities along the United States-Mexico border.

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9171(4) Carrying out activities described in sub2

section (b) with respect to more than one health pro3fession discipline, specialty, or subspecialty.4(e) CONSULTATION.The Secretary shall carry out5this section in consultation with the heads of appropriate6health agencies and offices in the Department of Health7and Human Services, including the Office of Minority8Health.

9(f) DEFINITION.In this section, the term health10disparities has the meaning given to the term in section113171.12(g) REPORT.The Secretary shall submit to the13Congress an annual report on the program carried out14under this section..15

SEC. 2252. INNOVATIONS IN INTERDISCIPLINARY CARE16TRAINING.17Part D of title VII (42 U.S.C. 294 et seq.) is amend18ed by adding at the end the following:19SEC. 759. INNOVATIONS IN INTERDISCIPLINARY CARE20TRAINING.21(a) PROGRAM.The Secretary shall establish an in22novations in interdisciplinary care training program con23sisting of awarding grants and contracts under subsection24(b).

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9181(b) TRAINING PROGRAMS.The Secretary shall

2award grants to, or enter into contracts with, eligible enti3ties 4(1) to test, develop, and evaluate health pro5fessional training programs (including continuing6education) designed to promote 7(A) the delivery of health services through8interdisciplinary and team-based models, which

9may include patient-centered medical home10models, medication therapy management mod11els, and models integrating physical, mental, or12oral health services; and13(B) coordination of the delivery of health14care within and across settings, including health15care institutions, community-based settings,

16and the patients home; and17(2) to implement such training programs de18veloped under paragraph (1) or otherwise.19(c) ELIGIBILITY.To be eligible for a grant or con20tract under subsection (b), an entity shall be 21(1) an accredited health professions school or22program;23(2) an academic health center;

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9191(3) a public or private nonprofit entity (includ2

ing an area health education center or a geriatric3education center); or4(4) a consortium of 2 or more entities describedin paragraphs (1) through (3).6(d) PREFERENCES.In awarding grants and con7tracts under this section, the Secretary shall give pref8erence to entities that have a demonstrated record of the9following:(1) Training the greatest percentage, or sig11nificantly increasing the percentage, of health pro12

fessionals who serve in underserved communities.13(2) Broad interdisciplinary team-based collabo14rations.(3) Addressing health disparities.16(e) REPORT.The Secretary shall submit to the17Congress an annual report on the program carried out18under this section.

19(f) DEFINITIONS.In this section:(1) The term health disparities has the21meaning given the term in section 3171.22(2) The term interdisciplinary means collabo23ration across health professions and specialties,24which may include public health, nursing, alliedhealth, and appropriate medical specialties..

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9201PART 3ADVISORY COMMITTEE ON HEALTH

2WORKFORCE EVALUATION AND ASSESSMENT3SEC. 2261. HEALTH WORKFORCE EVALUATION AND ASSESS4MENT.Subpart 1 of part E of title VII (42 U.S.C. 294n6et seq.) is amended by adding at the end the following:7SEC. 764. HEALTH WORKFORCE EVALUATION AND ASSESS8MENT.9(a) ADVISORY COMMITTEE.

The Secretary, actingthrough the Assistant Secretary for Health, shall establish

11a permanent advisory committee to be known as the Advi12sory Committee on Health Workforce Evaluation and As13sessment (referred to in this section as the Advisory Com14mittee).(b) RESPONSIBILITIES.The Advisory Committee16shall 17(1) not later than 1 year after the date of the18

establishment of the Advisory Committee, submit19recommendations to the Secretary on (A) classifications of the health workforce21to ensure consistency of data collection on the22health workforce; and23(B) based on such classifications, stand24ardized methodologies and procedures to enumeratethe health workforce;

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9211(2) not later than 2 years after the date of the

2establishment of the Advisory Committee, submit3recommendations to the Secretary on 4(A) the supply, diversity, and geographicdistribution of the health workforce;6(B) the retention of the health workforce7to ensure quality and adequacy of such work8force; and

9(C) policies to carry out the recommendationsmade pursuant to subparagraphs (A) and11(B); and12(3) not later than 4 years after the date of the13establishment of the Advisory Committee, and every142 years thereafter, submit updated recommendationsto the Secretary under paragraphs (1) and (2).16

(c) ROLE OF AGENCY.The Secretary shall provide17ongoing administrative, research, and technical support18for the operations of the Advisory Committee, including19coordinating and supporting the dissemination of the recommendationsof the Advisory Committee.21(d) MEMBERSHIP. 22(1) NUMBER; APPOINTMENT.The Secretary23shall appoint 15 members to serve on the Advisory24Committee.(2) TERMS.

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2appoint members of the Advisory Committee for3a term of 3 years and may reappoint such4members, but the Secretary may not appointany member to serve more than a total of 66years.7(B) STAGGERED TERMS.Notwith8standing subparagraph (A), of the members

9first appointed to the Advisory Committeeunder paragraph (1) 11(i) 5 shall be appointed for a term of121 year;13(ii) 5 shall be appointed for a term14of 2 years; and(iii) 5 shall be appointed for a term16

of 3 years.17(3) QUALIFICATIONS.Members of the Advi18sory Committee shall be appointed from among indi19viduals who possess expertise in at least one of thefollowing areas:21(A) Conducting and interpreting health22workforce market analysis, including health23care labor workforce analysis.24(B) Conducting and interpreting healthfinance and economics research.

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9231(C) Delivering and administering health

2care services.3(D) Delivering and administering health4workforce education and training.5(4) REPRESENTATION.In appointing mem6bers of the Advisory Committee, the Secretary7shall 8(A) include no less than one representa9tive of each of

10(i) health professionals within the11health workforce;12(ii) health care patients and con13sumers;14(iii) employers;15(iv) labor unions; and

16(v) third-party health payors; and17(B) ensure that 18(i) all areas of expertise described in19paragraph (3) are represented;20(ii) the members of the Advisory21Committee include members who, collec22tively, have significant experience working23with

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9241(I) populations in urban and

2federally designated rural and non3metropolitan areas; and4(II) populations who are underrepresentedin the health professions,6including underrepresented minority7groups; and8(iii) individuals who are directly in9

volved in health professions education orpractice do not constitute a majority of the11members of the Advisory Committee.12(5) DISCLOSURE AND CONFLICTS OF INTER13EST.Members of the Advisory Committee shall not14be considered employees of the Federal Governmentby reason of service on the Advisory Committee, ex16cept members of the Advisory Committee shall be17considered to be special Government employees with18

in the meaning of section 107 of the Ethics in Gov19ernment Act of 1978 (5 U.S.C. App.) and section208 of title 18, United States Code, for the purposes21of disclosure and management of conflicts of interest22under those sections.23(6) NO PAY; RECEIPT OF TRAVEL EX24PENSES.Members of the Advisory Committee shallnot receive any pay for service on the Committee,

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9251but may receive travel expenses, including a per

2diem, in accordance with applicable provisions of3subchapter I of chapter 57 of title 5, United States4Code.5(e) CONSULTATION.In carrying out this section,6the Secretary shall consult with the Secretary of Edu7cation and the Secretary of Labor.8(f) COLLABORATION.

The Advisory Committee9

shall collaborate with the advisory bodies at the Health10Resources and Services Administration, the National Ad11visory Council (as authorized in section 337), the Advisory12Committee on Training in Primary Care Medicine and13Dentistry (as authorized in section 749A), the Advisory14Committee on Interdisciplinary, Community-Based Link15ages (as authorized in section 756), the Advisory Council

16on Graduate Medical Education (as authorized in section17762), and the National Advisory Council on Nurse Edu18cation and Practice (as authorized in section 851).19(g) FACA.The Federal Advisory Committee Act20(5 U.S.C. App.) except for section 14 of such Act shall21apply to the Advisory Committee under this section only22to the extent that the provisions of such Act do not conflict23with the requirements of this section.

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9261(h) REPORT.The Secretary shall submit to the

2Congress an annual report on the activities of the Advisory3Committee.4(i) DEFINITION.In this section, the term health5workforce includes all health care providers with direct6patient care and support responsibilities, including physi7cians, nurses, physician assistants, pharmacists, oral8

health professionals (as defined in section 749(f)), allied9health professionals, mental and behavioral professionals,10and public health professionals (including veterinarians11engaged in public health practice)..12PART 4HEALTH WORKFORCE ASSESSMENT13SEC. 2271. HEALTH WORKFORCE ASSESSMENT.14(a) IN GENERAL.Section 761 (42 U.S.C. 294n) is

15amended 16(1) by redesignating subsection (c) as sub17section (e); and18(2) by striking subsections (a) and (b) and in19serting the following:20(a) IN GENERAL.The Secretary shall, based upon21the classifications and standardized methodologies and22procedures developed by the Advisory Committee on23Health Workforce Evaluation and Assessment under sec24tion 764(b)

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9271(1) collect data on the health workforce (as

2defined in section 764(i)), disaggregated by field,3discipline, and specialty, with respect to 4(A) the supply (including retention) of5health professionals relative to the demand for6such professionals;7(B) the diversity of health professionals

8(including with respect to race, ethnic back9ground, and gender); and10(C) the geographic distribution of health11professionals; and12(2) collect such data on individuals partici13pating in the programs authorized by subtitles A, B,14and C and part 1 of subtitle D of title II of division15

C of the Americas Affordable Health Choices Act of162009.17(b) GRANTS AND CONTRACTS FOR HEALTH WORK18FORCE ANALYSIS. 19(1) IN GENERAL.The Secretary may award20grants or contracts to eligible entities to carry out21subsection (a).22(2) ELIGIBILITY.To be eligible for a grant23or contract under this subsection, an entity shall24be

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928

1(A) an accredited health professions2school or program;3(B) an academic health center;4(C) a State, local, or tribal government;(D) a public or private entity; or6(E) a consortium of 2 or more entities de7scribed in subparagraphs (A) through (D).

8(c) COLLABORATION AND DATA SHARING.The9Secretary shall collaborate with Federal departments andagencies, health professions organizations (including11health professions education organizations), and profes12sional medical societies for the purpose of carrying out13subsection (a).14(d) REPORT.The Secretary shall submit to theCongress an annual report on the data collected under

16subsection (a)..17(b) PERIOD BEFORE COMPLETION OF NATIONAL18STRATEGY.Pending completion of the classifications and19standardized methodologies and procedures developed bythe Advisory Committee on Health Workforce Evaluation21and Assessment under section 764(b) of the Public Health22Service Act, as added by section 2261, the Secretary of23Health and Human Services, acting through the Adminis24trator of the Health Resources and Services Administrationand in consultation with such Advisory Committee,

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9291may make a judgment about the classifications, meth2

odologies, and procedures to be used for collection of data3under section 761(a) of the Public Health Service Act, as4amended by this section.PART 5AUTHORIZATION OF APPROPRIATIONS6SEC. 2281. AUTHORIZATION OF APPROPRIATIONS.7(a) IN GENERAL.Section 799C, as added by section82216 of this Act, is amended by adding at the end the

9following:(c) HEALTH PROFESSIONS TRAINING FOR DIVER11SITY.For the purpose of carrying out sections 736, 737,12738, 739, and 739A, in addition to any other amounts13authorized to be appropriated for such purpose, there are14authorized to be appropriated, out of any monies in thePublic Health Investment Fund, the following:16(1) $90,000,000 for fiscal year 2010.

17(2) $97,000,000 for fiscal year 2011.18(3) $100,000,000 for fiscal year 2012.19(4) $104,000,000 for fiscal year 2013.(5) $110,000,000 for fiscal year 2014.21(6) $116,000,000 for fiscal year 2015.22(7) $121,000,000 for fiscal year 2016.23(8) $127,000,000 for fiscal year 2017.24(9) $133,000,000 for fiscal year 2018.(10) $140,000,000 for fiscal year 2019.

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9301(d) INTERDISCIPLINARY TRAINING PROGRAMS, AD2

VISORY COMMITTEE ON HEALTH WORKFORCE EVALUA3TION AND ASSESSMENT, AND HEALTH WORKFORCE AS4SESSMENT.For the purpose of carrying out sections741, 759, 761, and 764, in addition to any other amounts6authorized to be appropriated for such purpose, there are7authorized to be appropriated, out of any monies in the8Public Health Investment Fund, the following:9(1) $91,000,000 for fiscal year 2010.(2) $97,000,000 for fiscal year 2011.11

(3) $101,000,000 for fiscal year 2012.12(4) $105,000,000 for fiscal year 2013.13(5) $111,000,000 for fiscal year 2014.14(6) $117,000,000 for fiscal year 2015.(7) $122,000,000 for fiscal year 2016.16(8) $129,000,000 for fiscal year 2017.17

(9) $135,000,000 for fiscal year 2018.18(10) $141,000,000 for fiscal year 2019..19(b) EXISTING AUTHORIZATIONS OF APPROPRIATIONS. 21(1) SECTION 736.Paragraph (1) of section22736(h) (42 U.S.C. 293(h)) is amended by striking232002 and inserting 2019.24(2) SECTIONS 737, 738, AND 739.Subsections(a), (b), and (c) of section 740 are amended by

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9311striking 2002 each place it appears and inserting

22019.3(3) SECTION 741.Subsection (h), as so redes4ignated, of section 741 is amended 5(A) by striking and after fiscal year62003,; and7(B) by inserting , and such sums as may8

be necessary for subsequent fiscal years9through the end of fiscal year 2019 before the10period at the end.11(4) SECTION 761.Subsection (e)(1), as so re12designated, of section 761 is amended by striking132002 and inserting 2019.14TITLE IIIPREVENTION AND15

WELLNESS16SEC. 2301. PREVENTION AND WELLNESS.17(a) IN GENERAL.The Public Health Service Act18(42 U.S.C. 201 et seq.) is amended by adding at the end19the following:

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9321TITLE XXXIPREVENTION AND

2WELLNESS3Subtitle APrevention and4Wellness Trust5SEC. 3111. PREVENTION AND WELLNESS TRUST.6(a) DEPOSITS INTO TRUST.There is established7a Prevention and Wellness Trust. There are authorized

8to be appropriated to the Trust 9(1) amounts described in section102002(b)(2)(ii) of the Americas Affordable Health11Choices Act of 2009 for each fiscal year; and12(2) in addition, out of any monies in the Pub13lic Health Investment Fund 14(A) for fiscal year 2010, $2,400,000,000;

15(B) for fiscal year 2011, $2,800,000,000;16(C) for fiscal year 2012, $3,100,000,000;17(D) for fiscal year 2013, $3,400,000,000;18(E) for fiscal year 2014, $3,500,000,000;19(F) for fiscal year 2015, $3,600,000,000;20(G) for fiscal year 2016, $3,700,000,000;21(H) for fiscal year 2017, $3,900,000,000;22(I) for fiscal year 2018, $4,300,000,000;23and24(J) for fiscal year 2019, $4,600,000,000.

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9331(b) AVAILABILITY OF FUNDS.Amounts in the Pre2

vention and Wellness Trust shall be available, as provided3in advance in appropriation Acts, for carrying out this4title.(c) ALLOCATION.Of the amounts authorized to be6appropriated in subsection (a)(2), there are authorized to7be appropriated 8(1) for carrying out subtitle C (Prevention

9Task Forces), $35,000,000 for each of fiscal years2010 through 2019;11(2) for carrying out subtitle D (Prevention12and Wellness Research) 13(A) for fiscal year 2010, $100,000,000;14(B) for fiscal year 2011, $150,000,000;(C) for fiscal year 2012, $200,000,000;16

(D) for fiscal year 2013, $250,000,000;17(E) for fiscal year 2014, $300,000,000;18(F) for fiscal year 2015, $315,000,000;19(G) for fiscal year 2016, $331,000,000;(H) for fiscal year 2017, $347,000,000;21(I) for fiscal year 2018, $364,000,000;22and23(J) for fiscal year 2019, $383,000,000.24(3) for carrying out subtitle E (Delivery ofCommunity Preventive and Wellness Services)

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934

1(A) for fiscal year 2010, $1,100,000,000;2(B) for fiscal year 2011, $1,300,000,000;3(C) for fiscal year 2012, $1,400,000,000;4(D) for fiscal year 2013, $1,600,000,000;5(E) for fiscal year 2014, $1,700,000,000;6(F) for fiscal year 2015, $1,800,000,000;

7(G) for fiscal year 2016, $1,900,000,000;8(H) for fiscal year 2017, $2,000,000,000;9(I) for fiscal year 2018, $2,100,000,000;10and11(J) for fiscal year 2019, $2,300,000,000.12(4) for carrying out section 3161 (Core Public13

Health Infrastructure and Activities for State and14Local Health Departments) 15(A) for fiscal year 2010, $800,000,000;16(B) for fiscal year 2011, $1,000,000,000;17(C) for fiscal year 2012, $1,100,000,000;18(D) for fiscal year 2013, $1,200,000,000;19(E) for fiscal year 2014, $1,300,000,000;20(F) for fiscal year 2015, $1,400,000,000;21(G) for fiscal year 2016, $1,500,000,000;22(H) for fiscal year 2017, $1,600,000,000;23(I) for fiscal year 2018, $1,800,000,000;24and

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9351(J) for fiscal year 2019, $1,900,000,000;

2and3(5) for carrying out section 3162 (Core Public4Health Infrastructure and Activities for CDC),5$400,000,000 for each of fiscal years 2010 through62019.7Subtitle BNational Prevention

8and Wellness Strategy9SEC. 3121. NATIONAL PREVENTION AND WELLNESS STRAT10EGY.11(a) IN GENERAL.The Secretary shall submit to12the Congress within one year after the date of the enact13ment of this section, and at least every 2 years thereafter,14a national strategy that is designed to improve the Na15tions health through evidence-based clinical and commu16

nity prevention and wellness activities (in this section re17ferred to as prevention and wellness activities), including18core public health infrastructure improvement activities.19(b) CONTENTS.The strategy under subsection (a)20shall include each of the following:21(1) Identification of specific national goals and22objectives in prevention and wellness activities that23take into account appropriate public health measures24and standards, including departmental measures and

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9361standards (including Healthy People and National

2Public Health Performance Standards).3(2) Establishment of national priorities for4prevention and wellness, taking into account unmetprevention and wellness needs.6(3) Establishment of national priorities for re7search on prevention and wellness, taking into ac8count unanswered research questions on prevention9

and wellness.(4) Identification of health disparities in pre11vention and wellness.12(5) A plan for addressing and implementing13paragraphs (1) through (4).14(c) CONSULTATION.In developing or revising thestrategy under subsection (a), the Secretary shall consult16with the following:17

(1) The heads of appropriate health agencies18and offices in the Department, including the Office19of the Surgeon General of the Public Health Service,the Office of Minority Health, and the Office on21Womens Health.22(2) As appropriate, the heads of other Federal23departments and agencies whose programs have a24significant impact upon health (as determined by theSecretary).

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9371(3) As appropriate, nonprofit and for-profit

2entities.3(4) The Association of State and Territorial4Health Officials and the National Association ofCounty and City Health Officials.6Subtitle CPrevention Task7Forces8SEC. 3131. TASK FORCE ON CLINICAL PREVENTIVE SERV9ICES.

(a) IN GENERAL.The Secretary, acting through11the Director of the Agency for Healthcare Research and12Quality, shall establish a permanent task force to be13known as the Task Force on Clinical Preventive Services14(in this section referred to as the Task Force).(b) RESPONSIBILITIES.The Task Force shall 16

(1) identify clinical preventive services for re17view;18(2) review the scientific evidence related to the19benefits, effectiveness, appropriateness, and costs ofclinical preventive services identified under para21graph (1) for the purpose of developing, updating,22publishing, and disseminating evidence-based rec23ommendations on the use of such services;24(3) as appropriate, take into account healthdisparities in developing, updating, publishing, and

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9381disseminating evidence-based recommendations on

2the use of such services;3(4) identify gaps in clinical preventive services4research and evaluation and recommend priority5areas for such research and evaluation;6(5) as appropriate, consult with the clinical7prevention stakeholders board in accordance with

8subsection (f);9(6) as appropriate, consult with the Task10Force on Community Preventive Services established11under section 3132; and12(7) as appropriate, in carrying out this sec13tion, consider the national strategy under section143121.

15(c) ROLE OF AGENCY.The Secretary shall provide16ongoing administrative, research, and technical support17for the operations of the Task Force, including coordi18nating and supporting the dissemination of the rec19ommendations of the Task Force.20(d) MEMBERSHIP. 21(1) NUMBER; APPOINTMENT.The Task22Force shall be composed of 30 members, appointed23by the Secretary.24(2) TERMS.

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2appoint members of the Task Force for a term3of 6 years and may reappoint such members,4but the Secretary may not appoint any member5to serve more than a total of 12 years.6(B) STAGGERED TERMS.Notwith7standing subparagraph (A), of the members8

first appointed to serve on the Task Force after9the enactment of this title 10(i) 10 shall be appointed for a term11of 2 years;12(ii) 10 shall be appointed for a term13of 4 years; and14(iii) 10 shall be appointed for a term

15of 6 years.16(3) QUALIFICATIONS.Members of the Task17Force shall be appointed from among individuals18who possess expertise in at least one of the following19areas:20(A) Health promotion and disease preven21tion.22(B) Evaluation of research and system23atic evidence reviews.

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9401(C) Application of systematic evidence re2

views to clinical decisionmaking or health pol3icy.4(D) Clinical primary care in child and ad5olescent health.6(E) Clinical primary care in adult health,7including womens health.8(F) Clinical primary care in geriatrics.9(G) Clinical counseling and behavioral10

services for primary care patients.11(4) REPRESENTATION.In appointing mem12bers of the Task Force, the Secretary shall ensure13that 14(A) all areas of expertise described in15paragraph (3) are represented; and16

(B) the members of the Task Force in17clude practitioners who, collectively, have sig18nificant experience treating racially and eth19nically diverse populations.20(e) SUBGROUPS.As appropriate to maximize effi21ciency, the Task Force may delegate authority for con22ducting reviews and making recommendations to sub23groups consisting of Task Force members, subject to final24approval by the Task Force.

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941

1(f) CLINICAL PREVENTION STAKEHOLDERS2BOARD. 3(1) IN GENERAL.The Task Force shall con4vene a clinical prevention stakeholders board composedof representatives of appropriate public and6private entities with an interest in clinical preventive7services to advise the Task Force on developing, up8

dating, publishing, and disseminating evidence-based9recommendations on the use of clinical preventiveservices.11(2) MEMBERSHIP.The members of the clin12ical prevention stakeholders board shall include rep13resentatives of the following:14(A) Health care consumers and patientgroups.16(B) Providers of clinical preventive serv17

ices, including community-based providers.18(C) Federal departments and agencies,19including (i) appropriate health agencies and21offices in the Department, including the22Office of the Surgeon General of the Pub23lic Health Service, the Office of Minority24Health, and the Office on WomensHealth; and

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9421(ii) as appropriate, other Federal de2

partments and agencies whose programs3have a significant impact upon health (as4determined by the Secretary).(D) Private health care payors.6(3) RESPONSIBILITIES.In accordance with7subsection (b)(5), the clinical prevention stake8holders board shall 9(A) recommend clinical preventive servicesfor review by the Task Force;

11(B) suggest scientific evidence for consid12eration by the Task Force related to reviews13undertaken by the Task Force;14(C) provide feedback regarding draft recommendationsby the Task Force; and16(D) assist with efforts regarding dissemi17nation of recommendations by the Director of

18the Agency for Healthcare Research and Qual19ity.(g) DISCLOSURE AND CONFLICTS OF INTEREST. 21Members of the Task Force or the clinical prevention22stakeholders board shall not be considered employees of23the Federal Government by reason of service on the Task24Force, except members of the Task Force shall be consideredto be special Government employees within the mean-

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9431ing of section 107 of the Ethics in Government Act of

21978 (5 U.S.C. App.) and section 208 of title 18, United3States Code, for the purposes of disclosure and manage4ment of conflicts of interest under those sections.(h) NO PAY; RECEIPT OF TRAVEL EXPENSES. 6Members of the Task Force or the clinical prevention7stakeholders board shall not receive any pay for service8on the Task Force, but may receive travel expenses, in9

cluding a per diem, in accordance with applicable provisionsof subchapter I of chapter 57 of title 5, United11States Code.12(i) APPLICATION OF FACA.The Federal Advisory13Committee Act (5 U.S.C. App.) except for section 14 of14such Act shall apply to the Task Force to the extent thatthe provisions of such Act do not conflict with the provi16sions of this title.17

(j) REPORT.The Secretary shall submit to the18Congress an annual report on the Task Force, including19with respect to gaps identified and recommendations madeunder subsection (b)(4).21SEC. 3132. TASK FORCE ON COMMUNITY PREVENTIVE22SERVICES.23(a) IN GENERAL.The Secretary, acting through24the Director of the Centers for Disease Control and Prevention,shall establish a permanent task force to be

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9441known as the Task Force on Community Preventive Serv2

ices (in this section referred to as the Task Force).3(b) RESPONSIBILITIES.The Task Force shall 4(1) identify community preventive services for5review;6(2) review the scientific evidence related to the7benefits, effectiveness, appropriateness, and costs of8

community preventive services identified under para9graph (1) for the purpose of developing, updating,10publishing, and disseminating evidence-based rec11ommendations on the use of such services;12(3) as appropriate, take into account health13disparities in developing, updating, publishing, and14disseminating evidence-based recommendations on15the use of such services;

16(4) identify gaps in community preventive17services research and evaluation and recommend pri18ority areas for such research and evaluation;19(5) as appropriate, consult with the commu20nity prevention stakeholders board in accordance21with subsection (f);22(6) as appropriate, consult with the Task23Force on Clinical Preventive Services established24under section 3131; and

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9451(7) as appropriate, in carrying out this sec2

tion, consider the national strategy under section33121.4(c) ROLE OF AGENCY.The Secretary shall provide5ongoing administrative, research, and technical support6for the operations of the Task Force, including coordi7nating and supporting the dissemination of the rec8ommendations of the Task Force.9(d) MEMBERSHIP.

10

(1) NUMBER; APPOINTMENT.The Task11Force shall be composed of 30 members, appointed12by the Secretary.13(2) TERMS. 14(A) IN GENERAL.The Secretary shall15appoint members of the Task Force for a term

16of 6 years and may reappoint such members,17but the Secretary may not appoint any member18to serve more than a total of 12 years.19(B) STAGGERED TERMS.Notwith20standing subparagraph (A), of the members21first appointed to serve on the Task Force after22the enactment of this section 23(i) 10 shall be appointed for a term24of 2 years;

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9461(ii) 10 shall be appointed for a term

2of 4 years; and3(iii) 10 shall be appointed for a term4of 6 years.(3) QUALIFICATIONS.Members of the Task6Force shall be appointed from among individuals7who possess expertise in at least one of the following8

areas:9(A) Public health.(B) Evaluation of research and system11atic evidence reviews.12(C) Disciplines relevant to community13preventive services, including health promotion;14disease prevention; chronic disease; worksitehealth; qualitative and quantitative analysis;16

and health economics, policy, law, and statis17tics.18(4) REPRESENTATION.In appointing mem19bers of the Task Force, the Secretary (A) shall ensure that all areas of exper21tise described in paragraph (3) are represented;22(B) shall ensure that such members in23clude sufficient representatives of each of 24(i) State health officers;(ii) local health officers;

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9481(B) Providers of community preventive

2services, including community-based providers.3(C) Federal departments and agencies,4including (i) appropriate health agencies and6offices in the Department, including the7Office of the Surgeon General of the Pub8lic Health Service, the Office of Minority

9Health, and the Office on WomensHealth; and11(ii) as appropriate, other Federal de12partments and agencies whose programs13have a significant impact upon health (as14determined by the Secretary).(D) Private health care payors.16(3) RESPONSIBILITIES.In accordance with

17subsection (b)(5), the community prevention stake18holders board shall 19(A) recommend community preventiveservices for review by the Task Force;21(B) suggest scientific evidence for consid22eration by the Task Force related to reviews23undertaken by the Task Force;24(C) provide feedback regarding draft recommendationsby the Task Force; and

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9491(D) assist with efforts regarding dissemi2

nation of recommendations by the Director of3the Centers for Disease Control and Prevention.4(g) DISCLOSURE AND CONFLICTS OF INTEREST. Members of the Task Force or the community prevention6stakeholders board shall not be considered employees of7the Federal Government by reason of service on the Task8Force, except members of the Task Force shall be consid9

ered to be special Government employees within the meaningof section 107 of the Ethics in Government Act of111978 (5 U.S.C. App.) and section 208 of title 18, United12States Code, for the purposes of disclosure and manage13ment of conflicts of interest under those sections.14(h) NO PAY; RECEIPT OF TRAVEL EXPENSES. Members of the Task Force or the community prevention16stakeholders board shall not receive any pay for service17

on the Task Force, but may receive travel expenses, in18cluding a per diem, in accordance with applicable provi19sions of subchapter I of chapter 57 of title 5, UnitedStates Code.21(i) APPLICATION OF FACA.The Federal Advisory22Committee Act (5 U.S.C. App.) except for section 14 of23such Act shall apply to the Task Force to the extent that24the provisions of such Act do not conflict with the provisionsof this title.

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9501(j) REPORT.The Secretary shall submit to the

2Congress an annual report on the Task Force, including3with respect to gaps identified and recommendations made4under subsection (b)(4).Subtitle DPrevention and6Wellness Research7SEC. 3141. PREVENTION AND WELLNESS RESEARCH ACTIV8ITY COORDINATION.

9In conducting or supporting research on preventionand wellness, the Director of the Centers for Disease Con11trol and Prevention, the Director of the National Insti12tutes of Health, and the heads of other agencies within13the Department of Health and Human Services con14ducting or supporting such research, shall take into considerationthe national strategy under section 3121 and16the recommendations of the Task Force on Clinical Pre17ventive Services under section 3131 and the Task Force18

on Community Preventive Services under section 3132.19SEC. 3142. COMMUNITY PREVENTION AND WELLNESS RESEARCHGRANTS.21(a) IN GENERAL.The Secretary, acting through22the Director of the Centers for Disease Control and Pre23vention, shall conduct, or award grants to eligible entities24to conduct, research in priority areas identified by the Secretaryin the national strategy under section 3121 or by

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9511the Task Force on Community Preventive Services as re2

quired by section 3132.3(b) ELIGIBILITY.To be eligible for a grant under4this section, an entity shall be 5(1) a State, local, or tribal department of6health;7(2) a public or private nonprofit entity; or8(3) a consortium of 2 or more entities de9scribed in paragraphs (1) and (2).

10(c) REPORT.The Secretary shall submit to the11Congress an annual report on the program of research12under this section.13Subtitle EDelivery of Commu14nity Prevention and Wellness15Services

16SEC. 3151. COMMUNITY PREVENTION AND WELLNESS17SERVICES GRANTS.18(a) IN GENERAL.The Secretary, acting through19the Director of the Centers for Disease Control and Pre20vention, shall establish a program for the delivery of com21munity preventive and wellness services consisting of22awarding grants to eligible entities 23(1) to provide evidence-based, community pre24ventive and wellness services in priority areas identi

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9521fied by the Secretary in the national strategy under

2section 3121; or3(2) to plan such services.4(b) ELIGIBILITY. 5(1) DEFINITION.To be eligible for a grant6under this section, an entity shall be 7(A) a State, local, or tribal department of

8health;9(B) a public or private entity; or10(C) a consortium of 11(i) 2 or more entities described in12subparagraph (A) or (B); and13(ii) a community partnership rep14resenting a Health Empowerment Zone.

15(2) HEALTH EMPOWERMENT ZONE.In this16subsection, the term Health Empowerment Zone 17means an area 18(A) in which multiple community preven19tive and wellness services are implemented in20order to address one or more health disparities,21including those identified by the Secretary in22the national strategy under section 3121; and23(B) which is represented by a community24partnership that demonstrates community sup-

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9531port and coordination with State, local, or tribal

2health departments and includes 3(i) a broad cross section of stake4holders;5(ii) residents of the community; and6(iii) representatives of entities that7have a history of working within and serv8ing the community.

9(c) PREFERENCES.In awarding grants under this10section, the Secretary shall give preference to entities11that 12(1) will address one or more goals or objec13tives identified by the Secretary in the national14strategy under section 3121;15(2) will address significant health disparities,

16including those identified by the Secretary in the na17tional strategy under section 3121;18(3) will address unmet community prevention19needs and avoids duplication of effort;20(4) have been demonstrated to be effective in21communities comparable to the proposed target com22munity;23(5) will contribute to the evidence base for24community preventive and wellness services;

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9541(6) demonstrate that the community preven2

tive services to be funded will be sustainable; and3(7) demonstrate coordination or collaboration4across governmental and nongovernmental partners.(d) HEALTH DISPARITIES.Of the funds awarded6under this section for a fiscal year, the Secretary shall7award not less than 50 percent for planning or imple8menting community preventive and wellness services9

whose primary purpose is to achieve a measurable reductionin one or more health disparities, including those11identified by the Secretary in the national strategy under12section 3121.13(e) EMPHASIS ON RECOMMENDED SERVICES.For14fiscal year 2013 and subsequent fiscal years, the Secretaryshall award grants under this section only for planning16or implementing services recommended by the Task Force

17on Community Preventive Services under section 3122 or18deemed effective based on a review of comparable rigor19(as determined by the Director of the Centers for DiseaseControl and Prevention).21(f) PROHIBITED USES OF FUNDS.An entity that22receives a grant under this section may not use funds pro23vided through the grant 24(1) to build or acquire real property or forconstruction; or

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9551(2) for services or planning to the extent that

2payment has been made, or can reasonably be ex3pected to be made 4(A) under any insurance policy;5(B) under any Federal or State health6benefits program (including titles XIX and XXI7of the Social Security Act); or8(C) by an entity which provides health9

services on a prepaid basis.10(g) REPORT.The Secretary shall submit to the11Congress an annual report on the program of grants12awarded under this section.13(h) DEFINITIONS.In this section, the term evi14dence-based means that methodologically sound research15

has demonstrated a beneficial health effect, in the judg16ment of the Director of the Centers for Disease Control17and Prevention.18Subtitle FCore Public Health19Infrastructure20SEC. 3161. CORE PUBLIC HEALTH INFRASTRUCTURE FOR21STATE, LOCAL, AND TRIBAL HEALTH DEPART22MENTS.23(a) PROGRAM.The Secretary, acting through the24Director of the Centers for Disease Control and Preven

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9571(d) FORMULA GRANTS TO STATE HEALTH DEPART2

MENTS.In making grants under subsection (b)(1)(A),3the Secretary shall award funds to each State health de4partment in accordance with 5(1) a formula based on population size; burden6of preventable disease and disability; and core public7health infrastructure gaps, including those identified8in the accreditation process under subsection (g);

9and10(2) application requirements established by the11Secretary, including a requirement that the State12submit a plan that demonstrates to the satisfaction13of the Secretary that the States health department14will 15

(A) address its highest priority core pub16lic health infrastructure needs; and17(B) as appropriate, allocate funds to local18health departments within the State.19(e) COMPETITIVE GRANTS TO STATE, LOCAL, AND20TRIBAL HEALTH DEPARTMENTS.In making grants21under subsection (b)(1)(B), the Secretary shall give pri22ority to applicants demonstrating core public health infra23structure needs identified in the accreditation process24under subsection (g).

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9581(f) MAINTENANCE OF EFFORT.The Secretary

2may award a grant to an entity under subsection (b) only3if the entity demonstrates to the satisfaction of the Sec4retary that (1) funds received through the grant will be6expended only to supplement, and not supplant, non-7Federal and Federal funds otherwise available to the8entity for the purpose of addressing core public

9health infrastructure needs; and(2) with respect to activities for which the11grant is awarded, the entity will maintain expendi12tures of non-Federal amounts for such activities at13a level not less than the level of such expenditures14maintained by the entity for the fiscal year precedingthe fiscal year for which the entity receives16the grant.

17(g) ESTABLISHMENT OF A PUBLIC HEALTH AC18CREDITATION PROGRAM. 19(1) IN GENERAL.The Secretary, actingthrough the Director of the Centers for Disease21Control and Prevention, shall 22(A) develop, and periodically review and23update, standards for voluntary accreditation of24State, local, or tribal health departments andpublic health laboratories for the purpose of ad-

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9591vancing the quality and performance of such de2

partments and laboratories; and3(B) implement a program to accredit4such health departments and laboratories in accordancewith such standards.6(2) COOPERATIVE AGREEMENT.The Sec7retary may enter into a cooperative agreement with8a private nonprofit entity to carry out paragraph9

(1).(h) REPORT.The Secretary shall submit to the11Congress an annual report on progress being made to ac12credit entities under subsection (g), including 13(1) a strategy, including goals and objectives,14for accrediting entities under subsection (g) andachieving the purpose described in subsection (g)(1);16and17

(2) identification of gaps in research related to18core public health infrastructure and recommenda19tions of priority areas for such research.SEC. 3162. CORE PUBLIC HEALTH INFRASTRUCTURE AND21ACTIVITIES FOR CDC.22(a) IN GENERAL.The Secretary, acting through23the Director of the Centers for Disease Control and Pre24vention, shall expand and improve the core public healthinfrastructure and activities of the Centers for Disease

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9601Control and Prevention to address unmet and emerging

2public health needs.3(b) REPORT.The Secretary shall submit to the4Congress an annual report on the activities funded5through this section.6Subtitle GGeneral Provisions7SEC. 3171. DEFINITIONS.

8In this title:9(1) The term core public health infrastruc10ture includes workforce capacity and competency;11laboratory systems; health information, health infor12mation systems, and health information analysis;13communications; financing; other relevant compo14nents of organizational capacity; and other related15activities.

16(2) The terms Department and depart17mental refer to the Department of Health and18Human Services.19(3) The term health disparities includes20health and health care disparities and means popu21lation-specific differences in the presence of disease,22health outcomes, or access to health care. For pur23poses of the preceding sentence, a population may be24delineated by race, ethnicity, geographic setting, or

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9611other population or subpopulation determined appro2

priate by the Secretary.3(4) The term tribal refers to an Indian tribe,4a Tribal organization, or an Urban Indian organization,as such terms are defined in section 4 of the6Indian Health Care Improvement Act..7(b) TRANSITION PROVISIONS APPLICABLE TO TASK8FORCES.

9(1) FUNCTIONS, PERSONNEL, ASSETS, LIABILITIES,AND ADMINISTRATIVE ACTIONS.All func11tions, personnel, assets, and liabilities of, and ad12ministrative actions applicable to, the Preventive13Services Task Force convened under section 915(a)14of the Public Health Service Act and the Task Forceon Community Preventive Services (as such section16and Task Forces were in existence on the day before17

the date of the enactment of this Act) shall be trans18ferred to the Task Force on Clinical Preventive19Services and the Task Force on Community PreventiveServices, respectively, established under sections213121 and 3122 of the Public Health Service Act, as22added by subsection (a).23(2) RECOMMENDATIONS.All recommendations24of the Preventive Services Task Force and the TaskForce on Community Preventive Services, as in ex-

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9621istence on the day before the date of the enactment

2of this Act, shall be considered to be recommenda3tions of the Task Force on Clinical Preventive Serv4ices and the Task Force on Community PreventiveServices, respectively, established under sections63121 and 3122 of the Public Health Service Act, as7added by subsection (a).8(3) MEMBERS ALREADY SERVING. 9

(A) INITIAL MEMBERS.The Secretary ofHealth and Human Services may select those

11individuals already serving on the Preventive12Services Task Force and the Task Force on13Community Preventive Services, as in existence14on the day before the date of the enactment ofthis Act, to be among the first members ap16pointed to the Task Force on Clinical Preven17tive Services and the Task Force on Commu18

nity Preventive Services, respectively, under sec19tions 3121 and 3122 of the Public Health ServiceAct, as added by subsection (a).21(B) CALCULATION OF TOTAL SERVICE.In22calculating the total years of service of a mem23ber of a task force for purposes of section243131(d)(2)(A) or 3132(d)(2)(A) of the PublicHealth Service Act, as added by subsection (a),

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9631the Secretary of Health and Human Services

2shall not include any period of service by the3member on the Preventive Services Task Force4or the Task Force on Community PreventiveServices, respectively, as in existence on the day6before the date of the enactment of this Act.7(c) PERIOD BEFORE COMPLETION OF NATIONAL8

STRATEGY.Pending completion of the national strategy9

under section 3121 of the Public Health Service Act, asadded by subsection (a), the Secretary of Health and11Human Services, acting through the relevant agency head,12may make a judgment about how the strategy will address13an issue and rely on such judgment in carrying out any14provision of subtitle C, D, E, or F of title XXXI of suchAct, as added by subsection (a), that requires the Sec16

retary 17(1) to take into consideration such strategy;18(2) to conduct or support research or provide19services in priority areas identified in such strategy;or21(3) to take any other action in reliance on such22strategy.23(d) CONFORMING AMENDMENTS. 24(1) Paragraph (61) of section 3(b) of the IndianHealth Care Improvement Act (25 U.S.C.

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96411602) is amended by striking United States Pre2

ventive Services Task Force and inserting Task3Force on Clinical Preventive Services.4(2) Section 126 of the Medicare, Medicaid, and5SCHIP Benefits Improvement and Protection Act of62000 (Appendix F of Public Law 106554) is7amended by striking United States Preventive8

Services Task Force

each place it appears and in9serting Task Force on Clinical Preventive Serv10ices.11(3) Paragraph (7) of section 317D of the Pub12lic Health Service Act (42 U.S.C. 247b5) is amend13ed by striking United States Preventive Services14Task Force each place it appears and inserting15Task Force on Clinical Preventive Services.16(4) Section 915 of the Public Health Service

17Act (42 U.S.C. 299b-4) is amended by striking sub18section (a).19(5) Subsections (s)(2)(AA)(iii)(II), (xx)(1), and20(ddd)(1)(B) of section 1861 of the Social Security21Act (42 U.S.C. 1395x) are amended by striking22United States Preventive Services Task Force 23each place it appears and inserting Task Force on24Clinical Preventive Services.

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9651TITLE IVQUALITY AND

2SURVEILLANCE3SEC. 2401. IMPLEMENTATION OF BEST PRACTICES IN THE4DELIVERY OF HEALTH CARE.5(a) IN GENERAL.Title IX of the Public Health6Service Act (42 U.S.C. 299 et seq.) is amended 7(1) by redesignating part D as part E;

8(2) by redesignating sections 931 through 9389as sections 941 through 948, respectively;10(3) in section 938(1), by striking 931 and in11serting 941; and12(4) by inserting after part C the following:13PART DIMPLEMENTATION OF BEST14PRACTICES IN THE DELIVERY OF HEALTH CARE

15SEC. 931. CENTER FOR QUALITY IMPROVEMENT.16(a) IN GENERAL.There is established the Center17for Quality Improvement (referred to in this part as the18Center), to be headed by the Director.19(b) PRIORITIZATION. 20(1) IN GENERAL.The Director shall21prioritize areas for the identification, development,22evaluation, and implementation of best practices (in23cluding innovative methodologies and strategies) for24quality improvement activities in the delivery of

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9661health care services (in this section referred to as

2best practices).3(2) CONSIDERATIONS.In prioritizing areas4under paragraph (1), the Director shall consider (A) the priorities established under sec6tion 1191 of the Social Security Act; and7(B) the key health indicators identified by8the Assistant Secretary for Health Information

9under section 1709.(c) OTHER RESPONSIBILITIES.The Director, act11ing directly or by awarding a grant or contract to an eligi12ble entity, shall 13(1) identify existing best practices under sub14section (e);(2) develop new best practices under sub16section (f);17(3) evaluate best practices under subsection18

(g);19(4) implement best practices under subsection(h);21(5) ensure that best practices are identified,22developed, evaluated, and implemented under this23section consistent with standards adopted by the24Secretary under section 3004 for health informationtechnology used in the collection and reporting of

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9671quality information (including for purposes of the

2demonstration of meaningful use of certified elec3tronic health record (EHR) technology by physicians4and hospitals under the Medicare program (under5sections 1848(o)(2) and 1886(n)(3), respectively, of6the Social Security Act)); and7(6) provide for dissemination of information8

and reporting under subsections (i) and (j).9(d) ELIGIBILITY.To be eligible for a grant or con10tract under subsection (c), an entity shall 11(1) be a nonprofit entity;12(2) agree to work with a variety of institu13tional health care providers, physicians, nurses, and14other health care practitioners; and15(3) if the entity is not the organization holding

16a contract under section 1153 of the Social Security17Act for the area to be served, agree to cooperate18with and avoid duplication of the activities of such19organization.20(e) IDENTIFYING EXISTING BEST PRACTICES.The21Secretary shall identify best practices that are 22(1) currently utilized by health care providers23(including hospitals, physician and other clinician24practices, community cooperatives, and other health

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9681care entities) that deliver consistently high-quality,

2efficient health care services; and3(2) easily adapted for use by other health care4providers and for use across a variety of health care5settings.6(f) DEVELOPING NEW BEST PRACTICES.The Sec7retary shall develop best practices that are 8(1) based on a review of existing scientific evi9dence;

10(2) sufficiently detailed for implementation11and incorporation into the workflow of health care12providers; and13(3) designed to be easily adapted for use by14health care providers across a variety of health care15

settings.16(g) EVALUATION OF BEST PRACTICES.The Direc17tor shall evaluate best practices identified or developed18under this section. Such evaluation 19(1) shall include determinations of which best20practices 21(A) most reliably and effectively achieve22significant progress in improving the quality of23patient care; and

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9691(B) are easily adapted for use by health

2care providers across a variety of health care3settings;4(2) shall include regular review, updating, andimprovement of such best practices; and6(3) may include in-depth case studies or em7pirical assessments of health care providers (includ8ing hospitals, physician and other clinician practices,9

community cooperatives, and other health care entities)and simulations of such best practices for de11terminations under paragraph (1).12(h) IMPLEMENTATION OF BEST PRACTICES. 13(1) IN GENERAL.The Director shall enter14into voluntary arrangements with health care providers(including hospitals and other health facilities16and health practitioners) in a State or region to im17plement best practices identified or developed under

18this section. Such implementation 19(A) may include forming collaborativemulti-institutional teams; and21(B) shall include an evaluation of the best22practices being implemented, including the23measurement of patient outcomes before, dur24ing, and after implementation of such bestpractices.

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9701(2) PREFERENCES.In carrying out this sub2

section, the Director shall give priority to health3care providers implementing best practices that 4(A) have the greatest impact on patientoutcomes and satisfaction;6(B) are the most easily adapted for use7by health care providers across a variety of8health care settings;

9(C) promote coordination of health carepractitioners across the continuum of care; and11(D) engage patients and their families in12improving patient care and outcomes.13(i) PUBLIC DISSEMINATION OF INFORMATION. 14The Director shall provide for the public dissemination ofinformation with respect to best practices and activities16

under this section. Such information shall be made avail17able in appropriate formats and languages to reflect the18varying needs of consumers and diverse levels of health19literacy.(j) REPORT. 21(1) IN GENERAL.The Director shall submit22an annual report to the Congress and the Secretary23on activities under this section.24(2) CONTENT.Each report under paragraph(1) shall include

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9711(A) information on activities conducted

2pursuant to grants and contracts awarded;3(B) summary data on patient outcomes4before, during, and after implementation of bestpractices; and6(C) recommendations on the adaptability7of best practices for use by health providers..8

(b) INITIAL QUALITY IMPROVEMENT ACTIVITIES AND9INITIATIVES TO BE IMPLEMENTED.Until the Directorof the Agency for Healthcare Research and Quality has11established initial priorities under section 931(b) of the12Public Health Service Act, as added by subsection (a), the13Director shall, for purposes of such section, prioritize the14following:(1) HEALTH CARE-ASSOCIATED INFECTIONS.

16Reducing health care-associated infections, including17infections in nursing homes and outpatient settings.18(2) SURGERY.Increasing hospital and out19patient perioperative patient safety, including reducingsurgical-site infections and surgical errors (such21as wrong-site surgery and retained foreign bodies).22(3) EMERGENCY ROOM.Improving care in23hospital emergency rooms, including through the use24of principles of efficiency of design and delivery toimprove patient flow.

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9721(4) OBSTETRICS.Improving the provision of

2obstetrical and neonatal care, including the identi3fication of interventions that are effective in reduc4ing the risk of preterm and premature labor and theimplementation of best practices for labor and deliv6ery care.7SEC. 2402. ASSISTANT SECRETARY FOR HEALTH INFORMA8TION.9(a) ESTABLISHMENT. Title XVII (42 U.S.C. 300uet seq.) is amended

11(1) by redesignating sections 1709 and 1710 as12sections 1710 and 1711, respectively; and13(2) by inserting after section 1708 the fol14lowing:SEC. 1709. ASSISTANT SECRETARY FOR HEALTH INFORMA16TION.17(a) IN GENERAL.There is established within the18Department an Assistant Secretary for Health Informa19

tion (in this section referred to as the Assistant Secretary),to be appointed by the Secretary.21(b) RESPONSIBILITIES.The Assistant Secretary22shall 23(1) ensure the collection, collation, reporting,24and publishing of information (including full andcomplete statistics) on key health indicators regard-

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9731ing the Nations health and the performance of the

2Nations health care;3(2) facilitate and coordinate the collection, col4lation, reporting, and publishing of information regardingthe Nations health and the performance of6the Nations health care (other than information de7scribed in paragraph (1));8(3)(A) develop standards for the collection of9

data regarding the Nations health and the performanceof the Nations health care; and

11(B) in carrying out subparagraph (A) 12(i) ensure appropriate specificity and13standardization for data collection at the na14tional, regional, State, and local levels;(ii) include standards, as appropriate, for16the collection of accurate data on health and17

health care by race, ethnicity, primary lan18guage, sex, sexual orientation, gender identity,19disability, socioeconomic status, rural, urban, orother geographic setting, and any other popu21lation or subpopulation determined appropriate22by the Secretary;23(iii) ensure, with respect to data on race24and ethnicity, consistency with the 1997 Officeof Management and Budget Standards for

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9741Maintaining, Collecting and Presenting Federal

2Data on Race and Ethnicity (or any successor3standards); and4(iv) in consultation with the Director ofthe Office of Minority Health, and the Director6of the Office of Civil Rights, of the Department,7develop standards for the collection of data on8

health and health care with respect to data on9primary language;(4) provide support to Federal departments11and agencies whose programs have a significant im12pact upon health (as determined by the Secretary)13for the collection and collation of information de14scribed in paragraphs (1) and (2);(5) ensure the sharing of information de16scribed in paragraphs (1) and (2) among the agen17cies of the Department;

18(6) facilitate the sharing of information de19scribed in paragraphs (1) and (2) by Federal departmentsand agencies whose programs have a signifi21cant impact upon health (as determined by the Sec22retary);23(7) identify gaps in information described in24paragraphs (1) and (2) and the appropriate agencyor entity to address such gaps;

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9751(8) facilitate and coordinate identification and

2monitoring by the agencies of the Department of3health disparities to inform program and policy ef4forts to reduce such disparities, including facilitatingand funding analyses conducted in cooperation with6the Social Security Administration, the Bureau of7the Census, and other appropriate agencies and enti8ties;9(9) consistent with privacy, proprietary, andother appropriate safeguards, facilitate public acces11

sibility of datasets (such as de-identified Medicare12datasets or publicly available data on key health in13dicators) by means of the Internet; and14(10) award grants or contracts for the collectionand collation of information described in para16graphs (1) and (2) (including through statewide sur17veys that provide standardized information).18(c) KEY HEALTH INDICATORS.

19(1) IN GENERAL.In carrying out subsection(b)(1), the Assistant Secretary shall 21(A) identify, and reassess at least once22every 3 years, key health indicators described in23such subsection;24(B) publish statistics on such key healthindicators for the public

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9761(i) not less than annually; and

2(ii) on a supplemental basis when3ever warranted by 4(I) the rate of change for a key5health indicator; or6(II) the need to inform policy7regarding the Nations health and the8

performance of the Nations health9

care; and10(C) ensure consistency with the national11strategy developed by the Secretary under sec12tion 3121 and consideration of the indicators13specified in the reports under sections 308,14903(a)(6), and 913(b)(2).15

(2) RELEASE OF KEY HEALTH INDICATORS. 16The regulations, rules, processes, and procedures of17the Office of Management and Budget governing the18review, release, and dissemination of key health indi19cators shall be the same as the regulations, rules,20processes, and procedures of the Office of Manage21ment and Budget governing the review, release, and22dissemination of Principal Federal Economic Indica23tors (or equivalent statistical data) by the Bureau of24Labor Statistics.

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9771(d) COORDINATION.In carrying out this section,

2the Assistant Secretary shall coordinate with 3(1) public and private entities that collect and4disseminate information on health and health care,including foundations; and6(2) the head of the Office of the National Co7ordinator for Health Information Technology to en8sure optimal use of health information technology.9(e) REQUEST FOR INFORMATION FROM OTHER DEPARTMENTSAND AGENCIES.Consistent with applicable

11law, the Assistant Secretary may secure directly from any12Federal department or agency information necessary to13enable the Assistant Secretary to carry out this section.14(f) REPORT. (1) SUBMISSION.The Assistant Secretary16shall submit to the Secretary and the Congress an

17annual report containing 18(A) a description of national, regional, or19State changes in health or health care, as reflectedby the key health indicators identified21under subsection (c)(1);22(B) a description of gaps in the collection,23collation, reporting, and publishing of informa24tion regarding the Nations health and the performanceof the Nations health care;

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9781(C) recommendations for addressing such

2gaps and identification of the appropriate agen3cy within the Department or other entity to ad4dress such gaps;5(D) a description of analyses of health6disparities, including the results of completed7analyses, the status of ongoing longitudinal8studies, and proposed or planned research; and

9(E) a plan for actions to be taken by the10Assistant Secretary to address gaps described11in subparagraph (B).12(2) CONSIDERATION.In preparing a report13under paragraph (1), the Assistant Secretary shall14take into consideration the findings and conclusions15

in the reports under sections 308, 903(a)(6), and16913(b)(2).17(g) PROPRIETARY AND PRIVACY PROTECTIONS. 18Nothing in this section shall be construed to affect appli19cable proprietary or privacy protections.20(h) CONSULTATION.In carrying out this section,21the Assistant Secretary shall consult with 22(1) the heads of appropriate health agencies23and offices in the Department, including the Office24of the Surgeon General of the Public Health Service,

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9791the Office of Minority Health, and the Office on

2Womens Health; and3(2) as appropriate, the heads of other Federal4departments and agencies whose programs have a5significant impact upon health (as determined by the6Secretary).7(i) DEFINITION.In this section:

8(1) The terms agency and agencies include9an epidemiology center established under section 21410of the Indian Health Care Improvement Act.11(2) The term Department means the Depart12ment of Health and Human Services.13(3) The term health disparities has the14meaning given to such term in section 3171..

15(b) OTHER COORDINATION RESPONSIBILITIES. 16Title III (42 U.S.C. 241 et seq.) is amended 17(1) in paragraphs (1) and (2) of section 304(c)18(42 U.S.C. 242b(c)), by inserting , acting through19the Assistant Secretary for Health Information, 20after The Secretary each place it appears; and21(2) in section 306(j) (42 U.S.C. 242k(j)), by in22serting , acting through the Assistant Secretary for23Health Information, after of this section, the Sec24retary.

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980

SEC. 2403. AUTHORIZATION OF APPROPRIATIONS.

Section 799C, as added and amended, is furtheramended by adding at the end the following:

(e) QUALITY AND SURVEILLANCE.For the purposeof carrying out part D of title IX and section 1709,in addition to any other amounts authorized to be appropriatedfor such purpose, there is authorized to be appropriated,out of any monies in the Public Health InvestmentFund, $300,000,000 for each of fiscal years 2010through 2014 and $330,000,000 for each of fiscal years

2015 through 2019..

TITLE VOTHER PROVISIONSSubtitle ADrug Discount forRural and Other Hospitals

SEC. 2501. EXPANDED PARTICIPATION IN 340B PROGRAM.

(a) EXPANSION OF COVERED ENTITIES RECEIVINGDISCOUNTED PRICES.Section 340B(a)(4) (42 U.S.C.256b(a)(4)) is amended by adding at the end the following:(M) A childrens hospital excluded from

the Medicare prospective payment system pursuantto section 1886(d)(1)(B)(iii) of the SocialSecurity Act which would meet the requirementsof subparagraph (L), including the disproportionateshare adjustment percentage requirementunder subparagraph (L)(ii), if the

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9811hospital were a subsection (d) hospital as de2

fined in section 1886(d)(1)(B) of the Social Se3curity Act.4(N) An entity that is a critical access hos5pital (as determined under section 1820(c)(2)6of the Social Security Act).7(O) An entity receiving funds under title8V of the Social Security Act (relating to mater9nal and child health) for the provision of health

10services.11(P) An entity receiving funds under sub12part I of part B of title XIX of the Public13Health Service Act (relating to comprehensive14mental health services) for the provision of com15munity mental health services.16(Q) An entity receiving funds under sub17part II of such part B (relating to the preven18

tion and treatment of substance abuse) for the19provision of treatment services for substance20abuse.21(R) An entity that is a Medicare-depend22ent, small rural hospital (as defined in section231886(d)(5)(G)(iv) of the Social Security Act).

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982

1(S) An entity that is a sole community2hospital (as defined in section31886(d)(5)(D)(iii) of the Social Security Act).4(T) An entity that is classified as a ruralreferral center under section 1886(d)(5)(C) of6the Social Security Act..7

(b) PROHIBITION ON GROUP PURCHASING ARRANGE8MENTS.Section 340B(a) (42 U.S.C. 256b(a)) is amend9ed (1) in paragraph (4)(L) 11(A) by adding and at the end of clause12(i);13(B) by striking ; and at the end of14clause (ii) and inserting a period; and(C) by striking clause (iii);

16(2) in paragraph (5), by redesignating subpara17graphs (C) and (D) as subparagraphs (D) and (E),18respectively, and by inserting after subparagraph19(B) the following:(C) PROHIBITING USE OF GROUP PUR21CHASING ARRANGEMENTS. 22(i) A hospital described in subpara23graph (L), (M), (N), (R), (S), or (T) of24paragraph (4) shall not obtain covered outpatientdrugs through a group purchasing

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9831organization or other group purchasing ar2

rangement, except as permitted or pro3vided pursuant to clause (ii).4(ii) The Secretary shall establish rea5sonable exceptions to the requirement of6clause (i) 7(I) with respect to a covered8outpatient drug that is unavailable to9

be purchased through the program10under this section due to a drug11shortage problem, manufacturer non12compliance, or any other reason be13yond the hospitals control;14(II) to facilitate generic substi15tution when a generic covered out16patient drug is available at a lower17price; and

18(III) to reduce in other ways19the administrative burdens of man20aging both inventories of drugs ob21tained under this section and not22under this section, if such exception23does not create a duplicate discount24problem in violation of subparagraph

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984

1(A) or a diversion problem in violation2of subparagraph (B)..3SEC. 2502. EXTENSION OF DISCOUNTS TO INPATIENT4DRUGS.(a) IN GENERAL.Section 340B (42 U.S.C. 256b)6is amended 7

(1) in subsection (b) 8

(A) by striking In this section, the terms 9and inserting the following: In this section:(1) IN GENERAL.The terms; and11(B) by adding at the end the following new12paragraph:13(2) COVERED DRUG.The term covered14

drug (A) means a covered outpatient drug (as16defined in section 1927(k)(2) of the Social Se17curity Act); and18(B) includes, notwithstanding the section191927(k)(3)(A) of such Act, a drug used in connectionwith an inpatient or outpatient service21provided by a hospital described in subpara22graph (L), (M), (N), (R), (S), or (T) of sub23section (a)(4) that is enrolled to participate in24the drug discount program under this section.;and

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9851(2) in paragraphs (5), (7), and (9) of sub2

section (a), by striking outpatient each place it3appears.4(b) MEDICAID CREDITS ON INPATIENT DRUGS. 5Subsection (c) of section 340B (42 U.S.C. 256b(c)) is6amended to read as follows:7(c) MEDICAID CREDITS ON INPATIENT DRUGS. 8(1) IN GENERAL.

For the cost reporting pe9riod covered by the most recently filed Medicare cost

10report under title XVIII of the Social Security Act,11a hospital described in subparagraph (L), (M), (N),12(R), (S), or (T) of subsection (a)(4) and enrolled to13participate in the drug discount program under this14section shall provide to each State under its plan15

under title XIX of such Act 16(A) a credit on the estimated annual17costs to such hospital of single source and inno18vator multiple source drugs provided to Med19icaid beneficiaries for inpatient use; and20(B) a credit on the estimated annual21costs to such hospital of noninnovator multiple22source drugs provided to Medicaid beneficiaries23for inpatient use.24(2) AMOUNT OF CREDITS.

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9861(A) SINGLE SOURCE AND INNOVATOR

2MULTIPLE SOURCE DRUGS.For purposes of3paragraph (1)(A) 4(i) the credit under such paragraph5shall be equal to the product of 6(I) the annual value of single7source and innovator multiple source

8drugs purchased under this section by9the hospital based on the drugs aver10age manufacturer price;11(II) the estimated percentage of12the hospitals drug purchases attrib13utable to Medicaid beneficiaries for in14patient use; and15(III) the minimum rebate per16

centage described in section171927(c)(1)(B) of the Social Security18Act;19(ii) the reference in clause (i)(I) to20the annual value of single source and inno21vator multiple source drugs purchased22under this section by the hospital based on23the drugs average manufacturer price24shall be equal to the sum of

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9871(I) the annual quantity of each

2single source and innovator multiple3source drug purchased during the cost4reporting period, multiplied by(II) the average manufacturer6price for that drug;7(iii) the reference in clause (i)(II) to8

the estimated percentage of the hospitals9

drug purchases attributable to Medicaidbeneficiaries for inpatient use; shall be11equal to 12(I) the Medicaid inpatient drug13charges as reported on the hospitals14most recently filed Medicare cost report,divided by

16(II) total drug charges reported17on the cost report; and18(iv) the terms single source drug 19and innovator multiple source drug havethe meanings given such terms in section211927(k)(7) of the Social Security Act.22(B) NONINNOVATOR MULTIPLE SOURCE23DRUGS.For purposes of paragraph (1)(B) 24(i) the credit under such paragraphshall be equal to the product of

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9881(I) the annual value of noninno2

vator multiple source drugs purchased3under this section by the hospital4based on the drugs average manufac5turer price;6(II) the estimated percentage of7the hospitals drug purchases attrib8utable to Medicaid beneficiaries for in9patient use; and

10(III) the applicable percentage11as defined in section 1927(c)(3)(B) of12the Social Security Act;13(ii) the reference in clause (i)(I) to14the annual value of noninnovator multiple15source drugs purchased under this section16

by the hospital based on the drugs average17manufacturer price shall be equal to the18sum of 19(I) the annual quantity of each20noninnovator multiple source drug21purchased during the cost reporting22period, multiplied by23(II) the average manufacturer24price for that drug;

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9891(iii) the reference in clause (i)(II) to

2the estimated percentage of the hospitals3drug purchases attributable to Medicaid4beneficiaries for inpatient use shall beequal to 6(I) the Medicaid inpatient drug7charges as reported on the hospitals8

most recently filed Medicare cost re9port, divided by(II) total drug charges reported11on the cost report; and12(iv) the term noninnovator multiple13source drug has the meaning given such14term in section 1927(k)(7) of the SocialSecurity Act.16

(3) CALCULATION OF CREDITS. 17(A) IN GENERAL.Each State calculates18credits under paragraph (1) and informs hos19pitals of amount under section 1927(a)(5)(D)of the Social Security Act.21(B) HOSPITAL PROVISION OF INFORMA22TION.Not later than 30 days after the date of23the filing of the hospitals most recently filed24Medicare cost report, the hospital shall providethe State with the information described in

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9901paragraphs (2)(A)(ii) and (2)(B)(ii). With re2

spect to each drug purchased during the cost3reporting period, the hospital shall provide the4dosage form, strength, package size, date ofpurchase and the number of units purchased.6(4) PAYMENT DEADLINE.The credits pro7vided by a hospital under paragraph (1) shall be8paid within 60 days after receiving the information9

specified in paragraph (3)(A).(5) OPT OUT.A hospital shall not be re11quired to provide the Medicaid credit required under12paragraph (1) if it can demonstrate to the State13that it will lose reimbursement under the State plan14resulting from the extension of discounts to inpatientdrugs under subsection (b)(2) and that the loss16of reimbursement will exceed the amount of the17

credit otherwise owed by the hospital.18(6) OFFSET AGAINST MEDICAL ASSISTANCE. 19Amounts received by a State under this subsectionin any quarter shall be considered to be a reduction21in the amount expended under the State plan in the22quarter for medical assistance for purposes of sec23tion 1903(a)(1) of the Social Security Act..24(c) CONFORMING AMENDMENTS.Section 1927 ofthe Social Security Act (42 U.S.C. 1396r8) is amended

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9911(1) in subsection (a)(5)(A), by striking covered

2outpatient drugs and inserting covered drugs (as3defined in section 340B(b)(2) of the Public Health4Service Act);(2) in subsection (a)(5), by striking subpara6graph (D) and inserting the following:7(D) STATE RESPONSIBILITY FOR CALCU8LATING HOSPITAL CREDITS.The State shall9

calculate the credits owed by the hospital underparagraph (1) of section 340B(c) of the Public11Health Service Act and provide the hospital12with both the amounts and an explanation of13how it calculated the credits. In performing the14calculations specified in paragraphs (2)(A)(ii)and (2)(B)(ii) of such section, the State shall16use the average manufacturer price applicable

17to the calendar quarter in which the drug was18purchased by the hospital.; and19(3) in subsection (k)(1) (A) in subparagraph (A), by striking sub21paragraph (B) and inserting subparagraphs22(B) and (D); and23(B) by adding at the end the following:24(D) CALCULATION FOR COVEREDDRUGS.With respect to a covered drug (as de-

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9921fined in section 340B(b)(2) of the Public

2Health Service Act), the average manufacturer3price shall be determined in accordance with4subparagraph (A) except that, in the event a5covered drug is not distributed to the retail6pharmacy class of trade, it shall mean the aver7age price paid to the manufacturer for the drug8

in the United States by wholesalers for drugs9distributed to the acute care class of trade,10after deducting customary prompt pay dis11counts..12SEC. 2503. EFFECTIVE DATE.13(a) IN GENERAL.The amendments made by this14subtitle shall take effect on July 1, 2010, and shall apply15

to drugs dispensed on or after such date.16(b) EFFECTIVENESS.The amendments made by17this subtitle shall be effective, and shall be taken into ac18count in determining whether a manufacturer is deemed19to meet the requirements of section 340B(a) of the Public20Health Service Act (42 U.S.C. 256b(a)) and of section211927(a)(5) of the Social Security Act (42 U.S.C. 1396r 228(a)(5)), notwithstanding any other provision of law.

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9931Subtitle BSchool-Based Health

2Clinics3SEC. 2511. SCHOOL-BASED HEALTH CLINICS.4(a) IN GENERAL.Part Q of title III (42 U.S.C.280h et seq.) is amended by adding at the end the fol6lowing:7SEC. 399Z1. SCHOOL-BASED HEALTH CLINICS.8(a) PROGRAM.The Secretary shall establish a

9school-based health clinic program consisting of awardinggrants to eligible entities to support the operation of11school-based health clinics (referred to in this section as12SBHCs).13(b) ELIGIBILITY.To be eligible for a grant under14this section, an entity shall (1) be an SBHC (as defined in subsection16

(l)(4)); and17(2) submit an application at such time, in18such manner, and containing such information as19the Secretary may require, including at a minimum 21(A) evidence that the applicant meets all22criteria necessary to be designated as an23SBHC;24(B) evidence of local need for the servicesto be provided by the SBHC;

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9941(C) an assurance that

2(i) SBHC services will be provided in3accordance with Federal, State, and local4laws governing (I) obtaining parental or guard6ian consent; and7(II) patient privacy and student8records, including section 264 of the

9Health Insurance Portability and AccountabilityAct of 1996 and section11444 of the General Education Provi12sions Act;13(ii) the SBHC has established and14maintains collaborative relationships withother health care providers in the16catchment area of the SBHC;

17(iii) the SBHC will provide on-site18access during the academic day when19school is in session and has an establishednetwork of support and access to services21with backup health providers when the22school or SBHC is closed;23(iv) the SBHC will be integrated into24the school environment and will coordinatehealth services with appropriate school per-

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9951sonnel and other community providers co-

2located at the school; and3(v) the SBHC sponsoring facility as4sumes all responsibility for the SBHC administration,operations, and oversight;6and7(D) such other information as the Sec8retary may require.9(c) USE OF FUNDS.

Funds awarded under a grantunder this section may be used for

11(1) providing training related to the provision12of comprehensive primary health services and addi13tional health services;14(2) the management and operation of SBHCprograms; and16(3) the payment of salaries for health profes17sionals and other appropriate SBHC personnel.

18(d) CONSIDERATION OF NEED.In determining the19amount of a grant under this section, the Secretary shalltake into consideration 21(1) the financial need of the SBHC;22(2) State, local, or other sources of funding23provided to the SBHC; and24(3) other factors as determined appropriate bythe Secretary.

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9961(e) PREFERENCES.In awarding grants under this

2section, the Secretary shall give preference to SBHCs that3have a demonstrated record of service to the following:4(1) A high percentage of medically under-served children and adolescents.6(2) Communities or populations in which chil7dren and adolescents have difficulty accessing health8and mental health services.

9(3) Communities with high percentages of childrenand adolescents who are uninsured, under11insured, or eligible for medical assistance under Fed12eral or State health benefits programs (including ti13tles XIX and XXI of the Social Security Act).14(f) MATCHING REQUIREMENT.The Secretary mayaward a grant to an SBHC only if the SBHC agrees to16provide, from non-Federal sources, an amount equal to 2017percent of the amount of the grant (which may be pro18

vided in cash or in kind) to carry out the activities sup19ported by the grant.(g) SUPPLEMENT, NOT SUPPLANT.The Secretary21may award a grant to an SBHC under this section only22if the SBHC demonstrates to the satisfaction of the Sec23retary that funds received through the grant will be ex24pended only to supplement, and not supplant, non-Federaland Federal funds otherwise available to the SBHC for

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9971operation of the SBHC (including each activity described

2in paragraph (1) or (2) of subsection (c)).3(h) PAYOR OF LAST RESORT.The Secretary may4award a grant to an SBHC under this section only if theSBHC demonstrates to the satisfaction of the Secretary6that funds received through the grant will not be expended7for any activity to the extent that payment has been made,8

or can reasonably be expected to be made 9

(1) under any insurance policy;(2) under any Federal or State health benefits11program (including titles XIX and XXI of the Social12Security Act); or13(3) by an entity which provides health services14on a prepaid basis.(i) REGULATIONS REGARDING REIMBURSEMENT

16FOR HEALTH SERVICES.The Secretary shall issue regu17lations regarding the reimbursement for health services18provided by SBHCs to individuals eligible to receive such19services through the program under this section, includingreimbursement under any insurance policy or any Federal21or State health benefits program (including titles XIX and22XXI of the Social Security Act).23(j) TECHNICAL ASSISTANCE.The Secretary shall24provide (either directly or by grant or contract) technicaland other assistance to SBHCs to assist such SBHCs to

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9981meet the requirements of this section. Such assistance

2may include fiscal and program management assistance,3training in fiscal and program management, operational4and administrative support, and the provision of informationto the SBHCs of the variety of resources available6under this title and how those resources can be best used7to meet the health needs of the communities served by8

the SBHCs.9(k) EVALUATION; REPORT.The Secretary shall (1) develop and implement a plan for evalu11ating SBHCs and monitoring quality performances12under the awards made under this section; and13(2) submit to the Congress on an annual basis14a report on the program under this section.(l) DEFINITIONS.In this section:16

(1) COMPREHENSIVE PRIMARY HEALTH SERV17ICES.The term comprehensive primary health18services means the core services offered by SBHCs,19which shall include the following:(A) PHYSICAL.Comprehensive health21assessments, diagnosis, and treatment of minor,22acute, and chronic medical conditions and refer23rals to, and follow-up for, specialty care.24(B) MENTAL HEALTH.Mental healthassessments, crisis intervention, counseling,

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9991treatment, and referral to a continuum of serv2

ices including emergency psychiatric care, com3munity support programs, inpatient care, and4outpatient programs.5(C) OPTIONAL SERVICES.Additional6services, which may include oral health, social,7and age-appropriate health education services,8including nutritional counseling.

9(2) MEDICALLY UNDERSERVED CHILDREN10AND ADOLESCENTS.The term medically under11served children and adolescents means a population12of children and adolescents who are residents of an13area designated by the Secretary as an area with a14shortage of personal health services and health in15frastructure for such children and adolescents.16

(3) SCHOOL-BASED HEALTH CLINIC.The17term school-based health clinic means a health clin18ic that 19(A) is located in, or is adjacent to, a20school facility of a local educational agency;21(B) is organized through school, commu22nity, and health provider relationships;23(C) is administered by a sponsoring facil24ity; and

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10001(D) provides, at a minimum, comprehen2

sive primary health services during school hours3to children and adolescents by health profes4sionals in accordance with State and local laws5and regulations, established standards, and6community practice.7(4) SPONSORING FACILITY.The term spon8soring facility is 9(A) a hospital;10

(B) a public health department;11(C) a community health center;12(D) a nonprofit health care agency;13(E) a local educational agency; or14(F) a program administered by the In15dian Health Service or the Bureau of Indian16

Affairs or operated by an Indian tribe or a trib17al organization under the Indian Self-Deter18mination and Education Assistance Act, a Na19tive Hawaiian entity, or an urban Indian pro20gram under title V of the Indian Health Care21Improvement Act.22(m) AUTHORIZATION OF APPROPRIATIONS.For23purposes of carrying out this section, there are authorized24to be appropriated $50,000,000 for fiscal year 2010 and

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10011such sums as may be necessary for each of the fiscal years

22011 through 2014..3(b) EFFECTIVE DATE.The Secretary of Health and4Human Services shall begin awarding grants under section399Z1 of the Public Health Service Act, as added by sub6section (b), not later than July 1, 2010, without regard7to whether or not final regulations have been issued under8section 399Z1(h) of such Act

9Subtitle CNational MedicalDevice Registry11SEC. 2521. NATIONAL MEDICAL DEVICE REGISTRY.12(a) REGISTRY. 13(1) IN GENERAL.Section 519 of the Federal14Food, Drug, and Cosmetic Act (21 U.S.C. 360i) isamended 16

(A) by redesignating subsection (g) as sub17section (h); and18(B) by inserting after subsection (f) the19following:National Medical Device Registry21(g)(1) The Secretary shall establish a national med22ical device registry (in this subsection referred to as the23registry) to facilitate analysis of postmarket safety and24outcomes data on each device that (A) is or has been used in or on a patient; and

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10021(B) is

2(i) a class III device; or3(ii) a class II device that is implantable,4life-supporting, or life-sustaining.(2) In developing the registry, the Secretary shall,6in consultation with the Commissioner of Food and Drugs,7the Administrator of the Centers for Medicare & Medicaid8

Services, the head of the Office of the National Coordi9nator for Health Information Technology, and the Secretaryof Veterans Affairs, determine the best methods11for 12(A) including in the registry, in a manner con13sistent with subsection (f), appropriate information14to identify each device described in paragraph (1) bytype, model, and serial number or other unique iden16tifier;17

(B) validating methods for analyzing patient18safety and outcomes data from multiple sources and19for linking such data with the information includedin the registry as described in subparagraph (A), in21cluding, to the extent feasible, use of 22(i) data provided to the Secretary under23other provisions of this chapter; and24(ii) information from public and privatesources identified under paragraph (3);

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10031(C) integrating the activities described in this

2subsection with 3(i) activities under paragraph (3) of sec4tion 505(k) (relating to active postmarket riskidentification);6(ii) activities under paragraph (4) of sec7tion 505(k) (relating to advanced analysis of8drug safety data); and9(iii) other postmarket device surveillanceactivities of the Secretary authorized by this

11chapter; and12(D) providing public access to the data and13analysis collected or developed through the registry14in a manner and form that protects patient privacyand proprietary information and is comprehensive,16useful, and not misleading to patients, physicians,

17and scientists.18(3)(A) To facilitate analyses of postmarket safety19and patient outcomes for devices described in paragraph(1), the Secretary shall, in collaboration with public, aca21demic, and private entities, develop methods to 22(i) obtain access to disparate sources of23patient safety and outcomes data, including 24(I) Federal health-related electronicdata (such as data from the Medicare pro-

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10041gram under title XVIII of the Social Secu2

rity Act or from the health systems of the3Department of Veterans Affairs);4(II) private sector health-related5electronic data (such as pharmaceutical6purchase data and health insurance claims7data); and8(III) other data as the Secretary9

deems necessary to permit postmarket as10sessment of device safety and effectiveness;11and12(ii) link data obtained under clause (i)13with information in the registry.14(B) In this paragraph, the term data refers to in15formation respecting a device described in paragraph (1),

16including claims data, patient survey data, standardized17analytic files that allow for the pooling and analysis of18data from disparate data environments, electronic health19records, and any other data deemed appropriate by the20Secretary.21(4) Not later than 36 months after the date of the22enactment of this subsection, the Secretary shall promul23gate regulations for establishment and operation of the24registry under paragraph (1). Such regulations

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10051(A)(i) in the case of devices that are described

2in paragraph (1) and sold on or after the date of the3enactment of this subsection, shall require manufac4turers of such devices to submit information to theregistry, including, for each such device, the type,6model, and serial number or, if required under sub7section (f), other unique device identifier; and8(ii) in the case of devices that are described in9

paragraph (1) and sold before such date, may requiremanufacturers of such devices to submit such11information to the registry, if deemed necessary by12the Secretary to protect the public health;13(B) shall establish procedures 14(i) to permit linkage of information submittedpursuant to subparagraph (A) with pa16tient safety and outcomes data obtained under17

paragraph (3); and18(ii) to permit analyses of linked data;19(C) may require device manufacturers to submitsuch other information as is necessary to facili21tate postmarket assessments of device safety and ef22fectiveness and notification of device risks;23(D) shall establish requirements for regular24and timely reports to the Secretary, which shall beincluded in the registry, concerning adverse event

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10061trends, adverse event patterns, incidence and preva2

lence of adverse events, and other information the3Secretary determines appropriate, which may include4data on comparative safety and outcomes trends;and6(E) shall establish procedures to permit public7access to the information in the registry in a manner8and form that protects patient privacy and propri9

etary information and is comprehensive, useful, andnot misleading to patients, physicians, and sci11entists.12(5) To carry out this subsection, there are author13ized to be appropriated such sums as may be necessary14for fiscal years 2010 and 2011..(2) EFFECTIVE DATE.The Secretary of16Health and Human Services shall establish and17begin implementation of the registry under section

18519(g) of the Federal Food, Drug, and Cosmetic19Act, as added by paragraph (1), by not later thanthe date that is 36 months after the date of the en21actment of this Act, without regard to whether or22not final regulations to establish and operate the23registry have been promulgated by such date.24(3) CONFORMING AMENDMENT.Section303(f)(1)(B)(ii) of the Federal Food, Drug, and

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10071Cosmetic Act (21 U.S.C. 333(f)(1)(B)(ii)) is amend2

ed by striking 519(g) and inserting 519(h).3(b) ELECTRONIC EXCHANGE AND USE IN CERTIFIED4ELECTRONIC HEALTH RECORDS OF UNIQUE DEVICEIDENTIFIERS. 6(1) RECOMMENDATIONS.The HIT Policy7Committee established under section 3002 of the8Public Health Service Act (42 U.S.C. 300jj12)

9shall recommend to the head of the Office of the NationalCoordinator for Health Information Tech11nology standards, implementation specifications, and12certification criteria for the electronic exchange and13use in certified electronic health records of a unique14device identifier for each device described in section519(g)(1) of the Federal Food, Drug, and Cosmetic16Act, as added by subsection (a).

17(2) STANDARDS, IMPLEMENTATION CRITERIA,18AND CERTIFICATION CRITERIA.The Secretary of19the Health Human Services, acting through thehead of the Office of the National Coordinator for21Health Information Technology, shall adopt stand22ards, implementation specifications, and certification23criteria for the electronic exchange and use in cer24tified electronic health records of a unique deviceidentifier for each device described in paragraph (1),

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1008

1

if such an identifier is required by section 519(f) of

2

the Federal Food, Drug, and Cosmetic Act (21

3

U.S.C. 360i(f)) for the device.4Subtitle DGrants for Comprehen

sive Programs to Provide Edu6cation to Nurses and Create a7Pipeline to Nursing8SEC. 2531. ESTABLISHMENT OF GRANT PROGRAM.9(a) PURPOSES.It is the purpose of this section to

authorize grants to 11(1) address the projected shortage of nurses by12funding comprehensive programs to create a career13ladder to nursing (including Certified Nurse Assist14ants, Licensed Practical Nurses, Licensed Vocational

Nurses, and Registered Nurses) for incumbent ancil16lary health care workers;17(2) increase the capacity for educating nurses18by increasing both nurse faculty and clinical oppor19tunities through collaborative programs between

staff nurse organizations, health care providers, and

21

accredited schools of nursing; and

22

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(3) provide training programs through edu23

cation and training organizations jointly adminis

24

tered by health care providers and health care labororganizations or other organizations representing

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10091staff nurses and frontline health care workers, work2

ing in collaboration with accredited schools of nurs3ing and academic institutions.4(b) GRANTS.Not later than 6 months after the date5of the enactment of this Act, the Secretary of Labor (re6ferred to in this section as the Secretary) shall establish7a partnership grant program to award grants to eligible8entities to carry out comprehensive programs to provide9

education to nurses and create a pipeline to nursing for10incumbent ancillary health care workers who wish to ad11vance their careers, and to otherwise carry out the pur12poses of this section.13(c) ELIGIBILITY.To be eligible for a grant under14this section, an entity shall be 15(1) a health care entity that is jointly adminis16tered by a health care employer and a labor union17

representing the health care employees of the em18ployer and that carries out activities using labor19management training funds as provided for under20section 302(c)(6) of the Labor Management Rela21tions Act, 1947 (29 U.S.C. 186(c)(6));22(2) an entity that operates a training program23that is jointly administered by

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10101(A) one or more health care providers or

2facilities, or a trade association of health care3providers; and4(B) one or more organizations which representthe interests of direct care health care6workers or staff nurses and in which the direct7care health care workers or staff nurses have8

direct input as to the leadership of the organi9zation;(3) a State training partnership program that11consists of nonprofit organizations that include equal12participation from industry, including public or pri13vate employers, and labor organizations including14joint labor-management training programs, andwhich may include representatives from local govern16ments, worker investment agency one-stop career17

centers, community-based organizations, community18colleges, and accredited schools of nursing; or19(4) a school of nursing (as defined in section801 of the Public Health Service Act (42 U.S.C.21296)).22(d) ADDITIONAL REQUIREMENTS FOR HEALTH CARE23EMPLOYER DESCRIBED IN SUBSECTION (c).To be eligi24ble for a grant under this section, a health care employerdescribed in subsection (c) shall demonstrate that it

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10111(1) has an established program within their fa2

cility to encourage the retention of existing nurses;3(2) provides wages and benefits to its nurses4that are competitive for its market or that have been5collectively bargained with a labor organization; and6(3) supports programs funded under this sec7tion through 1 or more of the following:8(A) The provision of paid leave time and

9continued health coverage to incumbent health10care workers to allow their participation in11nursing career ladder programs, including cer12tified nurse assistants, licensed practical nurses,13licensed vocational nurses, and registered14nurses.15(B) Contributions to a joint labor-manage16

ment training fund which administers the pro17gram involved.18(C) The provision of paid release time, in19centive compensation, or continued health cov20erage to staff nurses who desire to work full- or21part-time in a faculty position.22(D) The provision of paid release time for23staff nurses to enable them to obtain a bachelor24of science in nursing degree, other advanced

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10121nursing degrees, specialty training, or certifi2

cation program.3(E) The payment of tuition assistance4which is managed by a joint labor-managementtraining fund or other jointly administered pro6gram.7(e) OTHER REQUIREMENTS. 8(1) MATCHING REQUIREMENT. 9

(A) IN GENERAL.The Secretary may notmake a grant under this section unless the ap11

plicant involved agrees, with respect to the costs12to be incurred by the applicant in carrying out13the program under the grant, to make available14non-Federal contributions (in cash or in kindunder subparagraph (B)) toward such costs in16an amount equal to not less than $1 for each17

$1 of Federal funds provided in the grant. Such18contributions may be made directly or through19donations from public or private entities, ormay be provided through the cash equivalent of21paid release time provided to incumbent worker22students.23(B) DETERMINATION OF AMOUNT OF NON-24FEDERAL CONTRIBUTION.Non-Federal contributionsrequired in subparagraph (A) may be

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10131in cash or in kind (including paid release time),

2fairly evaluated, including equipment or services3(and excluding indirect or overhead costs).4Amounts provided by the Federal Government,5or services assisted or subsidized to any signifi6cant extent by the Federal Government, may7not be included in determining the amount of8

such non-Federal contributions.9(2) REQUIRED COLLABORATION.Entities car10rying out or overseeing programs carried out with11assistance provided under this section shall dem12onstrate collaboration with accredited schools of13nursing which may include community colleges and14other academic institutions providing associate,15bachelors, or advanced nursing degree programs or

16specialty training or certification programs.17(f) USE OF FUNDS.Amounts awarded to an entity18under a grant under this section shall be used for the fol19lowing:20(1) To carry out programs that provide edu21cation and training to establish nursing career lad22ders to educate incumbent health care workers to be23come nurses (including certified nurse assistants, li24censed practical nurses, licensed vocational nurses,

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10141and registered nurses). Such programs shall include

2one or more of the following:3(A) Preparing incumbent workers to return4to the classroom through English -as-a-second5language education, GED education, pre-college6counseling, college preparation classes, and sup7port with entry level college classes that are a8

prerequisite to nursing.9(B) Providing tuition assistance with pref10erence for dedicated cohort classes in commu11nity colleges, universities, accredited schools of12nursing with supportive services including tu13toring and counseling.14(C) Providing assistance in preparing for15and meeting all nursing licensure tests and re16quirements.

17(D) Carrying out orientation and18mentorship programs that assist newly grad19uated nurses in adjusting to working at the20bedside to ensure their retention21postgraduation, and ongoing programs to sup22port nurse retention.23(E) Providing stipends for release time and24continued health care coverage to enable incum

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10161tive nursing programs which meet the needs of

2bedside nursing and health care providers.3(g) PREFERENCE.In awarding grants under this4section the Secretary shall give preference to programs5that 6(1) provide for improving nurse retention;7(2) provide for improving the diversity of the

8new nurse graduates to reflect changes in the demo9graphics of the patient population;10(3) provide for improving the quality of nursing11education to improve patient care and safety;12(4) have demonstrated success in upgrading in13cumbent health care workers to become nurses or14which have established effective programs or pilots15

to increase nurse faculty; or16(5) are modeled after or affiliated with such17programs described in paragraph (4).18(h) EVALUATION. 19(1) PROGRAM EVALUATIONS.An entity that20receives a grant under this section shall annually21evaluate, and submit to the Secretary a report on,22the activities carried out under the grant and the23outcomes of such activities. Such outcomes may in24clude

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