text:
[From the U.S. Government Publishing Office]
[H.R. 3590 Enrolled Bill (ENR)]
H.R.3590
One Hundred Eleventh Congress
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the fifth day of January, two thousand and ten
Entitled The Patient Protection and Affordable Care Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patient Protection
and Affordable Care Act''.
(b) Table of Contents.--The table of contents of this Act is as
Sec. 1. Short title; table of contents.
TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
Subtitle A--Immediate Improvements in Health Care Coverage for All
Sec. 1001. Amendments to the Public Health Service Act.
``PART A--Individual and Group Market Reforms
``subpart ii--improving coverage
``Sec. 2711. No lifetime or annual limits.
``Sec. 2712. Prohibition on rescissions.
``Sec. 2713. Coverage of preventive health services.
``Sec. 2714. Extension of dependent coverage.
``Sec. 2715. Development and utilization of uniform explanation of
coverage documents and standardized definitions.
``Sec. 2716. Prohibition of discrimination based on salary.
``Sec. 2717. Ensuring the quality of care.
``Sec. 2718. Bringing down the cost of health care coverage.
``Sec. 2719. Appeals process.
Sec. 1002. Health insurance consumer information.
Sec. 1003. Ensuring that consumers get value for their dollars.
Sec. 1004. Effective dates.
Subtitle B--Immediate Actions to Preserve and Expand Coverage
Sec. 1101. Immediate access to insurance for uninsured individuals with
a preexisting condition.
Sec. 1102. Reinsurance for early retirees.
Sec. 1103. Immediate information that allows consumers to identify
affordable coverage options.
Sec. 1104. Administrative simplification.
Sec. 1105. Effective date.
Subtitle C--Quality Health Insurance Coverage for All Americans
PART I--Health Insurance Market Reforms
Sec. 1201. Amendment to the Public Health Service Act.
``subpart i--general reform
``Sec. 2704. Prohibition of preexisting condition exclusions or
other discrimination based on health status.
``Sec. 2701. Fair health insurance premiums.
``Sec. 2702. Guaranteed availability of coverage.
``Sec. 2703. Guaranteed renewability of coverage.
``Sec. 2705. Prohibiting discrimination against individual
participants and beneficiaries based on health status.
``Sec. 2706. Non-discrimination in health care.
``Sec. 2707. Comprehensive health insurance coverage.
``Sec. 2708. Prohibition on excessive waiting periods.
PART II--Other Provisions
Sec. 1251. Preservation of right to maintain existing coverage.
Sec. 1252. Rating reforms must apply uniformly to all health insurance
issuers and group health plans.
Subtitle D--Available Coverage Choices for All Americans
PART I--Establishment of Qualified Health Plans
Sec. 1301. Qualified health plan defined.
Sec. 1302. Essential health benefits requirements.
Sec. 1303. Special rules.
Sec. 1304. Related definitions.
PART II--Consumer Choices and Insurance Competition Through Health
Benefit Exchanges
Sec. 1311. Affordable choices of health benefit plans.
Sec. 1312. Consumer choice.
Sec. 1313. Financial integrity.
PART III--State Flexibility Relating to Exchanges
Sec. 1321. State flexibility in operation and enforcement of Exchanges
and related requirements.
Sec. 1322. Federal program to assist establishment and operation of
nonprofit, member-run health insurance issuers.
Sec. 1323. Community health insurance option.
Sec. 1324. Level playing field.
PART IV--State Flexibility to Establish Alternative Programs
Sec. 1331. State flexibility to establish basic health programs for low-
income individuals not eligible for Medicaid.
Sec. 1332. Waiver for State innovation.
Sec. 1333. Provisions relating to offering of plans in more than one
PART V--Reinsurance and Risk Adjustment
Sec. 1341. Transitional reinsurance program for individual and small
group markets in each State.
Sec. 1342. Establishment of risk corridors for plans in individual and
small group markets.
Sec. 1343. Risk adjustment.
Subtitle E--Affordable Coverage Choices for All Americans
PART I--Premium Tax Credits and Cost-sharing Reductions
subpart a--premium tax credits and cost-sharing reductions
Sec. 1401. Refundable tax credit providing premium assistance for
coverage under a qualified health plan.
Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified
health plans.
subpart b--eligibility determinations
Sec. 1411. Procedures for determining eligibility for Exchange
participation, premium tax credits and reduced cost-sharing,
and individual responsibility exemptions.
Sec. 1412. Advance determination and payment of premium tax credits and
cost-sharing reductions.
Sec. 1413. Streamlining of procedures for enrollment through an exchange
and State Medicaid, CHIP, and health subsidy programs.
Sec. 1414. Disclosures to carry out eligibility requirements for certain
Sec. 1415. Premium tax credit and cost-sharing reduction payments
disregarded for Federal and Federally-assisted programs.
PART II--Small Business Tax Credit
Sec. 1421. Credit for employee health insurance expenses of small
businesses.
Subtitle F--Shared Responsibility for Health Care
PART I--Individual Responsibility
Sec. 1501. Requirement to maintain minimum essential coverage.
Sec. 1502. Reporting of health insurance coverage.
PART II--Employer Responsibilities
Sec. 1511. Automatic enrollment for employees of large employers.
Sec. 1512. Employer requirement to inform employees of coverage options.
Sec. 1513. Shared responsibility for employers.
Sec. 1514. Reporting of employer health insurance coverage.
Sec. 1515. Offering of Exchange-participating qualified health plans
through cafeteria plans.
Subtitle G--Miscellaneous Provisions
Sec. 1551. Definitions.
Sec. 1552. Transparency in government.
Sec. 1553. Prohibition against discrimination on assisted suicide.
Sec. 1554. Access to therapies.
Sec. 1555. Freedom not to participate in Federal health insurance
Sec. 1556. Equity for certain eligible survivors.
Sec. 1557. Nondiscrimination.
Sec. 1558. Protections for employees.
Sec. 1559. Oversight.
Sec. 1560. Rules of construction.
Sec. 1561. Health information technology enrollment standards and
Sec. 1562. Conforming amendments.
Sec. 1563. Sense of the Senate promoting fiscal responsibility.
TITLE II--ROLE OF PUBLIC PROGRAMS
Subtitle A--Improved Access to Medicaid
Sec. 2001. Medicaid coverage for the lowest income populations.
Sec. 2002. Income eligibility for nonelderly determined using modified
gross income.
Sec. 2003. Requirement to offer premium assistance for employer-
sponsored insurance.
Sec. 2004. Medicaid coverage for former foster care children.
Sec. 2005. Payments to territories.
Sec. 2006. Special adjustment to FMAP determination for certain States
recovering from a major disaster.
Sec. 2007. Medicaid Improvement Fund rescission.
Subtitle B--Enhanced Support for the Children's Health Insurance Program
Sec. 2101. Additional federal financial participation for CHIP.
Sec. 2102. Technical corrections.
Subtitle C--Medicaid and CHIP Enrollment Simplification
Sec. 2201. Enrollment Simplification and coordination with State Health
Insurance Exchanges.
Sec. 2202. Permitting hospitals to make presumptive eligibility
determinations for all Medicaid eligible populations.
Subtitle D--Improvements to Medicaid Services
Sec. 2301. Coverage for freestanding birth center services.
Sec. 2302. Concurrent care for children.
Sec. 2303. State eligibility option for family planning services.
Sec. 2304. Clarification of definition of medical assistance.
Subtitle E--New Options for States to Provide Long-Term Services and
Sec. 2401. Community First Choice Option.
Sec. 2402. Removal of barriers to providing home and community-based
Sec. 2403. Money Follows the Person Rebalancing Demonstration.
Sec. 2404. Protection for recipients of home and community-based
services against spousal impoverishment.
Sec. 2405. Funding to expand State Aging and Disability Resource
Centers.
Sec. 2406. Sense of the Senate regarding long-term care.
Subtitle F--Medicaid Prescription Drug Coverage
Sec. 2501. Prescription drug rebates.
Sec. 2502. Elimination of exclusion of coverage of certain drugs.
Sec. 2503. Providing adequate pharmacy reimbursement.
Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments
Sec. 2551. Disproportionate share hospital payments.
Subtitle H--Improved Coordination for Dual Eligible Beneficiaries
Sec. 2601. 5-year period for demonstration projects.
Sec. 2602. Providing Federal coverage and payment coordination for dual
eligible beneficiaries.
Subtitle I--Improving the Quality of Medicaid for Patients and Providers
Sec. 2701. Adult health quality measures.
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions.
Sec. 2703. State option to provide health homes for enrollees with
chronic conditions.
Sec. 2704. Demonstration project to evaluate integrated care around a
hospitalization.
Sec. 2705. Medicaid Global Payment System Demonstration Project.
Sec. 2706. Pediatric Accountable Care Organization Demonstration
Sec. 2707. Medicaid emergency psychiatric demonstration project.
Subtitle J--Improvements to the Medicaid and CHIP Payment and Access
Commission (MACPAC)
Sec. 2801. MACPAC assessment of policies affecting all Medicaid
beneficiaries.
Subtitle K--Protections for American Indians and Alaska Natives
Sec. 2901. Special rules relating to Indians.
Sec. 2902. Elimination of sunset for reimbursement for all medicare part
B services furnished by certain indian hospitals and clinics.
Subtitle L--Maternal and Child Health Services
Sec. 2951. Maternal, infant, and early childhood home visiting programs.
Sec. 2952. Support, education, and research for postpartum depression.
Sec. 2953. Personal responsibility education.
Sec. 2954. Restoration of funding for abstinence education.
Sec. 2955. Inclusion of information about the importance of having a
health care power of attorney in transition planning for
children aging out of foster care and independent living
TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE
Subtitle A--Transforming the Health Care Delivery System
PART I--Linking Payment to Quality Outcomes Under the Medicare Program
Sec. 3001. Hospital Value-Based purchasing program.
Sec. 3002. Improvements to the physician quality reporting system.
Sec. 3003. Improvements to the physician feedback program.
Sec. 3004. Quality reporting for long-term care hospitals, inpatient
rehabilitation hospitals, and hospice programs.
Sec. 3005. Quality reporting for PPS-exempt cancer hospitals.
Sec. 3006. Plans for a Value-Based purchasing program for skilled
nursing facilities and home health agencies.
Sec. 3007. Value-based payment modifier under the physician fee
schedule.
Sec. 3008. Payment adjustment for conditions acquired in hospitals.
PART II--National Strategy to Improve Health Care Quality
Sec. 3011. National strategy.
Sec. 3012. Interagency Working Group on Health Care Quality.
Sec. 3013. Quality measure development.
Sec. 3014. Quality measurement.
Sec. 3015. Data collection; public reporting.
PART III--Encouraging Development of New Patient Care Models
Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation
within CMS.
Sec. 3022. Medicare shared savings program.
Sec. 3023. National pilot program on payment bundling.
Sec. 3024. Independence at home demonstration program.
Sec. 3025. Hospital readmissions reduction program.
Sec. 3026. Community-Based Care Transitions Program.
Sec. 3027. Extension of gainsharing demonstration.
Subtitle B--Improving Medicare for Patients and Providers
PART I--Ensuring Beneficiary Access to Physician Care and Other Services
Sec. 3101. Increase in the physician payment update.
Sec. 3102. Extension of the work geographic index floor and revisions to
the practice expense geographic adjustment under the Medicare
physician fee schedule.
Sec. 3103. Extension of exceptions process for Medicare therapy caps.
Sec. 3104. Extension of payment for technical component of certain
physician pathology services.
Sec. 3105. Extension of ambulance add-ons.
Sec. 3106. Extension of certain payment rules for long-term care
hospital services and of moratorium on the establishment of
certain hospitals and facilities.
Sec. 3107. Extension of physician fee schedule mental health add-on.
Sec. 3108. Permitting physician assistants to order post-Hospital
extended care services.
Sec. 3109. Exemption of certain pharmacies from accreditation
Sec. 3110. Part B special enrollment period for disabled TRICARE
Sec. 3111. Payment for bone density tests.
Sec. 3112. Revision to the Medicare Improvement Fund.
Sec. 3113. Treatment of certain complex diagnostic laboratory tests.
Sec. 3114. Improved access for certified nurse-midwife services.
PART II--Rural Protections
Sec. 3121. Extension of outpatient hold harmless provision.
Sec. 3122. Extension of Medicare reasonable costs payments for certain
clinical diagnostic laboratory tests furnished to hospital
patients in certain rural areas.
Sec. 3123. Extension of the Rural Community Hospital Demonstration
Program.
Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program.
Sec. 3125. Temporary improvements to the Medicare inpatient hospital
payment adjustment for low-volume hospitals.
Sec. 3126. Improvements to the demonstration project on community health
integration models in certain rural counties.
Sec. 3127. MedPAC study on adequacy of Medicare payments for health care
providers serving in rural areas.
Sec. 3128. Technical correction related to critical access hospital
Sec. 3129. Extension of and revisions to Medicare rural hospital
flexibility program.
PART III--Improving Payment Accuracy
Sec. 3131. Payment adjustments for home health care.
Sec. 3132. Hospice reform.
Sec. 3133. Improvement to medicare disproportionate share hospital (DSH)
Sec. 3134. Misvalued codes under the physician fee schedule.
Sec. 3135. Modification of equipment utilization factor for advanced
imaging services.
Sec. 3136. Revision of payment for power-driven wheelchairs.
Sec. 3137. Hospital wage index improvement.
Sec. 3138. Treatment of certain cancer hospitals.
Sec. 3139. Payment for biosimilar biological products.
Sec. 3140. Medicare hospice concurrent care demonstration program.
Sec. 3141. Application of budget neutrality on a national basis in the
calculation of the Medicare hospital wage index floor.
Sec. 3142. HHS study on urban Medicare-dependent hospitals.
Sec. 3143. Protecting home health benefits.
Subtitle C--Provisions Relating to Part C
Sec. 3201. Medicare Advantage payment.
Sec. 3202. Benefit protection and simplification.
Sec. 3203. Application of coding intensity adjustment during MA payment
transition.
Sec. 3204. Simplification of annual beneficiary election periods.
Sec. 3205. Extension for specialized MA plans for special needs
Sec. 3206. Extension of reasonable cost contracts.
Sec. 3207. Technical correction to MA private fee-for-service plans.
Sec. 3208. Making senior housing facility demonstration permanent.
Sec. 3209. Authority to deny plan bids.
Sec. 3210. Development of new standards for certain Medigap plans.
Subtitle D--Medicare Part D Improvements for Prescription Drug Plans and
MA-PD Plans
Sec. 3301. Medicare coverage gap discount program.
Sec. 3302. Improvement in determination of Medicare part D low-income
benchmark premium.
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals
under prescription drug plans and MA-PD plans.
Sec. 3304. Special rule for widows and widowers regarding eligibility
for low-income assistance.
Sec. 3305. Improved information for subsidy eligible individuals
reassigned to prescription drug plans and MA-PD plans.
Sec. 3306. Funding outreach and assistance for low-income programs.
Sec. 3307. Improving formulary requirements for prescription drug plans
and MA-PD plans with respect to certain categories or classes
Sec. 3308. Reducing part D premium subsidy for high-income
Sec. 3309. Elimination of cost sharing for certain dual eligible
Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs
in long-term care facilities under prescription drug plans and
MA-PD plans.
Sec. 3311. Improved Medicare prescription drug plan and MA-PD plan
complaint system.
Sec. 3312. Uniform exceptions and appeals process for prescription drug
plans and MA-PD plans.
Sec. 3313. Office of the Inspector General studies and reports.
Sec. 3314. Including costs incurred by AIDS drug assistance programs and
Indian Health Service in providing prescription drugs toward
the annual out-of-pocket threshold under part D.
Sec. 3315. Immediate reduction in coverage gap in 2010.
Subtitle E--Ensuring Medicare Sustainability
Sec. 3401. Revision of certain market basket updates and incorporation
of productivity improvements into market basket updates that
do not already incorporate such improvements.
Sec. 3402. Temporary adjustment to the calculation of part B premiums.
Sec. 3403. Independent Medicare Advisory Board.
Subtitle F--Health Care Quality Improvements
Sec. 3501. Health care delivery system research; Quality improvement
Sec. 3502. Establishing community health teams to support the patient-
centered medical home.
Sec. 3503. Medication management services in treatment of chronic
Sec. 3504. Design and implementation of regionalized systems for
emergency care.
Sec. 3505. Trauma care centers and service availability.
Sec. 3506. Program to facilitate shared decisionmaking.
Sec. 3507. Presentation of prescription drug benefit and risk
Sec. 3508. Demonstration program to integrate quality improvement and
patient safety training into clinical education of health
Sec. 3509. Improving women's health.
Sec. 3510. Patient navigator program.
Sec. 3511. Authorization of appropriations.
Subtitle G--Protecting and Improving Guaranteed Medicare Benefits
Sec. 3601. Protecting and improving guaranteed Medicare benefits.
Sec. 3602. No cuts in guaranteed benefits.
TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH
Subtitle A--Modernizing Disease Prevention and Public Health Systems
Sec. 4001. National Prevention, Health Promotion and Public Health
Council.
Sec. 4002. Prevention and Public Health Fund.
Sec. 4003. Clinical and community preventive services.
Sec. 4004. Education and outreach campaign regarding preventive
Subtitle B--Increasing Access to Clinical Preventive Services
Sec. 4101. School-based health centers.
Sec. 4102. Oral healthcare prevention activities.
Sec. 4103. Medicare coverage of annual wellness visit providing a
personalized prevention plan.
Sec. 4104. Removal of barriers to preventive services in Medicare.
Sec. 4105. Evidence-based coverage of preventive services in Medicare.
Sec. 4106. Improving access to preventive services for eligible adults
in Medicaid.
Sec. 4107. Coverage of comprehensive tobacco cessation services for
pregnant women in Medicaid.
Sec. 4108. Incentives for prevention of chronic diseases in medicaid.
Subtitle C--Creating Healthier Communities
Sec. 4201. Community transformation grants.
Sec. 4202. Healthy aging, living well; evaluation of community-based
prevention and wellness programs for Medicare beneficiaries.
Sec. 4203. Removing barriers and improving access to wellness for
individuals with disabilities.
Sec. 4204. Immunizations.
Sec. 4205. Nutrition labeling of standard menu items at chain
Sec. 4206. Demonstration project concerning individualized wellness
plan.
Sec. 4207. Reasonable break time for nursing mothers.
Subtitle D--Support for Prevention and Public Health Innovation
Sec. 4301. Research on optimizing the delivery of public health
Sec. 4302. Understanding health disparities: data collection and
Sec. 4303. CDC and employer-based wellness programs.
Sec. 4304. Epidemiology-Laboratory Capacity Grants.
Sec. 4305. Advancing research and treatment for pain care management.
Sec. 4306. Funding for Childhood Obesity Demonstration Project.
Subtitle E--Miscellaneous Provisions
Sec. 4401. Sense of the Senate concerning CBO scoring.
Sec. 4402. Effectiveness of Federal health and wellness initiatives.
TITLE V--HEALTH CARE WORKFORCE
Subtitle A--Purpose and Definitions
Sec. 5001. Purpose.
Subtitle B--Innovations in the Health Care Workforce
Sec. 5101. National health care workforce commission.
Sec. 5102. State health care workforce development grants.
Sec. 5103. Health care workforce assessment.
Subtitle C--Increasing the Supply of the Health Care Workforce
Sec. 5201. Federally supported student loan funds.
Sec. 5202. Nursing student loan program.
Sec. 5203. Health care workforce loan repayment programs.
Sec. 5204. Public health workforce recruitment and retention programs.
Sec. 5205. Allied health workforce recruitment and retention programs.
Sec. 5206. Grants for State and local programs.
Sec. 5207. Funding for National Health Service Corps.
Sec. 5208. Nurse-managed health clinics.
Sec. 5209. Elimination of cap on commissioned corps.
Sec. 5210. Establishing a Ready Reserve Corps.
Subtitle D--Enhancing Health Care Workforce Education and Training
Sec. 5301. Training in family medicine, general internal medicine,
general pediatrics, and physician assistantship.
Sec. 5302. Training opportunities for direct care workers.
Sec. 5303. Training in general, pediatric, and public health dentistry.
Sec. 5304. Alternative dental health care providers demonstration
Sec. 5305. Geriatric education and training; career awards;
comprehensive geriatric education.
Sec. 5306. Mental and behavioral health education and training grants.
Sec. 5307. Cultural competency, prevention, and public health and
individuals with disabilities training.
Sec. 5308. Advanced nursing education grants.
Sec. 5309. Nurse education, practice, and retention grants.
Sec. 5310. Loan repayment and scholarship program.
Sec. 5311. Nurse faculty loan program.
Sec. 5312. Authorization of appropriations for parts B through D of
title VIII.
Sec. 5313. Grants to promote the community health workforce.
Sec. 5314. Fellowship training in public health.
Sec. 5315. United States Public Health Sciences Track.
Subtitle E--Supporting the Existing Health Care Workforce
Sec. 5401. Centers of excellence.
Sec. 5402. Health care professionals training for diversity.
Sec. 5403. Interdisciplinary, community-based linkages.
Sec. 5404. Workforce diversity grants.
Sec. 5405. Primary care extension program.
Subtitle F--Strengthening Primary Care and Other Workforce Improvements
Sec. 5501. Expanding access to primary care services and general surgery
Sec. 5502. Medicare Federally qualified health center improvements.
Sec. 5503. Distribution of additional residency positions.
Sec. 5504. Counting resident time in nonprovider settings.
Sec. 5505. Rules for counting resident time for didactic and scholarly
activities and other activities.
Sec. 5506. Preservation of resident cap positions from closed hospitals.
Sec. 5507. Demonstration projects To address health professions
workforce needs; extension of family-to-family health
information centers.
Sec. 5508. Increasing teaching capacity.
Sec. 5509. Graduate nurse education demonstration.
Subtitle G--Improving Access to Health Care Services
Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs).
Sec. 5602. Negotiated rulemaking for development of methodology and
criteria for designating medically underserved populations and
health professions shortage areas.
Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services
for Children Program.
Sec. 5604. Co-locating primary and specialty care in community-based
mental health settings.
Sec. 5605. Key National indicators.
Subtitle H--General Provisions
Sec. 5701. Reports.
TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY
Subtitle A--Physician Ownership and Other Transparency
Sec. 6001. Limitation on Medicare exception to the prohibition on
certain physician referrals for hospitals.
Sec. 6002. Transparency reports and reporting of physician ownership or
investment interests.
Sec. 6003. Disclosure requirements for in-office ancillary services
exception to the prohibition on physician self-referral for
certain imaging services.
Sec. 6004. Prescription drug sample transparency.
Sec. 6005. Pharmacy benefit managers transparency requirements.
Subtitle B--Nursing Home Transparency and Improvement
PART I--Improving Transparency of Information
Sec. 6101. Required disclosure of ownership and additional disclosable
parties information.
Sec. 6102. Accountability requirements for skilled nursing facilities
and nursing facilities.
Sec. 6103. Nursing home compare Medicare website.
Sec. 6104. Reporting of expenditures.
Sec. 6105. Standardized complaint form.
Sec. 6106. Ensuring staffing accountability.
Sec. 6107. GAO study and report on Five-Star Quality Rating System.
PART II--Targeting Enforcement
Sec. 6111. Civil money penalties.
Sec. 6112. National independent monitor demonstration project.
Sec. 6113. Notification of facility closure.
Sec. 6114. National demonstration projects on culture change and use of
information technology in nursing homes.
PART III--Improving Staff Training
Sec. 6121. Dementia and abuse prevention training.
Subtitle C--Nationwide Program for National and State Background Checks
on Direct Patient Access Employees of Long-term Care Facilities and
Sec. 6201. Nationwide program for National and State background checks
on direct patient access employees of long-term care
facilities and providers.
Subtitle D--Patient-Centered Outcomes Research
Sec. 6301. Patient-Centered Outcomes Research.
Sec. 6302. Federal coordinating council for comparative effectiveness
Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions
Sec. 6401. Provider screening and other enrollment requirements under
Medicare, Medicaid, and CHIP.
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions.
Sec. 6403. Elimination of duplication between the Healthcare Integrity
and Protection Data Bank and the National Practitioner Data
Bank.
Sec. 6404. Maximum period for submission of Medicare claims reduced to
not more than 12 months.
Sec. 6405. Physicians who order items or services required to be
Medicare enrolled physicians or eligible professionals.
Sec. 6406. Requirement for physicians to provide documentation on
referrals to programs at high risk of waste and abuse.
Sec. 6407. Face to face encounter with patient required before
physicians may certify eligibility for home health services or
durable medical equipment under Medicare.
Sec. 6408. Enhanced penalties.
Sec. 6409. Medicare self-referral disclosure protocol.
Sec. 6410. Adjustments to the Medicare durable medical equipment,
prosthetics, orthotics, and supplies competitive acquisition
Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program.
Subtitle F--Additional Medicaid Program Integrity Provisions
Sec. 6501. Termination of provider participation under Medicaid if
terminated under Medicare or other State plan.
Sec. 6502. Medicaid exclusion from participation relating to certain
ownership, control, and management affiliations.
Sec. 6503. Billing agents, clearinghouses, or other alternate payees
required to register under Medicaid.
Sec. 6504. Requirement to report expanded set of data elements under
MMIS to detect fraud and abuse.
Sec. 6505. Prohibition on payments to institutions or entities located
outside of the United States.
Sec. 6506. Overpayments.
Sec. 6507. Mandatory State use of national correct coding initiative.
Sec. 6508. General effective date.
Subtitle G--Additional Program Integrity Provisions
Sec. 6601. Prohibition on false statements and representations.
Sec. 6602. Clarifying definition.
Sec. 6603. Development of model uniform report form.
Sec. 6604. Applicability of State law to combat fraud and abuse.
Sec. 6605. Enabling the Department of Labor to issue administrative
summary cease and desist orders and summary seizures orders
against plans that are in financially hazardous condition.
Sec. 6606. MEWA plan registration with Department of Labor.
Sec. 6607. Permitting evidentiary privilege and confidential
communications.
Subtitle H--Elder Justice Act
Sec. 6701. Short title of subtitle.
Sec. 6703. Elder Justice.
Subtitle I--Sense of the Senate Regarding Medical Malpractice
Sec. 6801. Sense of the Senate regarding medical malpractice.
TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES
Subtitle A--Biologics Price Competition and Innovation
Sec. 7001. Short title.
Sec. 7002. Approval pathway for biosimilar biological products.
Sec. 7003. Savings.
Subtitle B--More Affordable Medicines for Children and Underserved
Sec. 7101. Expanded participation in 340B program.
Sec. 7102. Improvements to 340B program integrity.
Sec. 7103. GAO study to make recommendations on improving the 340B
TITLE VIII--CLASS ACT
Sec. 8001. Short title of title.
Sec. 8002. Establishment of national voluntary insurance program for
purchasing community living assistance services and support.
TITLE IX--REVENUE PROVISIONS
Subtitle A--Revenue Offset Provisions
Sec. 9001. Excise tax on high cost employer-sponsored health coverage.
Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W-
Sec. 9003. Distributions for medicine qualified only if for prescribed
drug or insulin.
Sec. 9004. Increase in additional tax on distributions from HSAs and
Archer MSAs not used for qualified medical expenses.
Sec. 9005. Limitation on health flexible spending arrangements under
cafeteria plans.
Sec. 9006. Expansion of information reporting requirements.
Sec. 9007. Additional requirements for charitable hospitals.
Sec. 9008. Imposition of annual fee on branded prescription
pharmaceutical manufacturers and importers.
Sec. 9009. Imposition of annual fee on medical device manufacturers and
importers.
Sec. 9010. Imposition of annual fee on health insurance providers.
Sec. 9011. Study and report of effect on veterans health care.
Sec. 9012. Elimination of deduction for expenses allocable to Medicare
Part D subsidy.
Sec. 9013. Modification of itemized deduction for medical expenses.
Sec. 9014. Limitation on excessive remuneration paid by certain health
insurance providers.
Sec. 9015. Additional hospital insurance tax on high-income taxpayers.
Sec. 9016. Modification of section 833 treatment of certain health
Sec. 9017. Excise tax on elective cosmetic medical procedures.
Subtitle B--Other Provisions
Sec. 9021. Exclusion of health benefits provided by Indian tribal
governments.
Sec. 9022. Establishment of simple cafeteria plans for small businesses.
Sec. 9023. Qualifying therapeutic discovery project credit.
TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
Subtitle A--Provisions Relating to Title I
Sec. 10101. Amendments to subtitle A.
Sec. 10102. Amendments to subtitle B.
Sec. 10103. Amendments to subtitle C.
Sec. 10104. Amendments to subtitle D.
Sec. 10105. Amendments to subtitle E.
Sec. 10106. Amendments to subtitle F.
Sec. 10107. Amendments to subtitle G.
Sec. 10108. Free choice vouchers.
Sec. 10109. Development of standards for financial and administrative
transactions.
Subtitle B--Provisions Relating to Title II
PART I--Medicaid and CHIP
Sec. 10201. Amendments to the Social Security Act and title II of this
Sec. 10202. Incentives for States to offer home and community-based
services as a long-term care alternative to nursing homes.
Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and
other CHIP-related provisions.
PART II--Support for Pregnant and Parenting Teens and Women
Sec. 10211. Definitions.
Sec. 10212. Establishment of pregnancy assistance fund.
Sec. 10213. Permissible uses of Fund.
Sec. 10214. Appropriations.
PART III--Indian Health Care Improvement
Sec. 10221. Indian health care improvement.
Subtitle C--Provisions Relating to Title III
Sec. 10301. Plans for a Value-Based purchasing program for ambulatory
surgical centers.
Sec. 10302. Revision to national strategy for quality improvement in
health care.
Sec. 10303. Development of outcome measures.
Sec. 10304. Selection of efficiency measures.
Sec. 10305. Data collection; public reporting.
Sec. 10306. Improvements under the Center for Medicare and Medicaid
Sec. 10307. Improvements to the Medicare shared savings program.
Sec. 10308. Revisions to national pilot program on payment bundling.
Sec. 10309. Revisions to hospital readmissions reduction program.
Sec. 10310. Repeal of physician payment update.
Sec. 10311. Revisions to extension of ambulance add-ons.
Sec. 10312. Certain payment rules for long-term care hospital services
and moratorium on the establishment of certain hospitals and
Sec. 10313. Revisions to the extension for the rural community hospital
demonstration program.
Sec. 10314. Adjustment to low-volume hospital provision.
Sec. 10315. Revisions to home health care provisions.
Sec. 10316. Medicare DSH.
Sec. 10317. Revisions to extension of section 508 hospital provisions.
Sec. 10318. Revisions to transitional extra benefits under Medicare
Advantage.
Sec. 10319. Revisions to market basket adjustments.
Sec. 10320. Expansion of the scope of, and additional improvements to,
the Independent Medicare Advisory Board.
Sec. 10321. Revision to community health teams.
Sec. 10322. Quality reporting for psychiatric hospitals.
Sec. 10323. Medicare coverage for individuals exposed to environmental
health hazards.
Sec. 10324. Protections for frontier States.
Sec. 10325. Revision to skilled nursing facility prospective payment
Sec. 10326. Pilot testing pay-for-performance programs for certain
Medicare providers.
Sec. 10327. Improvements to the physician quality reporting system.
Sec. 10328. Improvement in part D medication therapy management (MTM)
Sec. 10329. Developing methodology to assess health plan value.
Sec. 10330. Modernizing computer and data systems of the Centers for
Medicare & Medicaid services to support improvements in care
Sec. 10331. Public reporting of performance information.
Sec. 10332. Availability of medicare data for performance measurement.
Sec. 10333. Community-based collaborative care networks.
Sec. 10334. Minority health.
Sec. 10335. Technical correction to the hospital value-based purchasing
Sec. 10336. GAO study and report on Medicare beneficiary access to high-
quality dialysis services.
Subtitle D--Provisions Relating to Title IV
Sec. 10406. Amendment relating to waiving coinsurance for preventive
Sec. 10407. Better diabetes care.
Sec. 10408. Grants for small businesses to provide comprehensive
workplace wellness programs.
Sec. 10409. Cures Acceleration Network.
Sec. 10410. Centers of Excellence for Depression.
Sec. 10411. Programs relating to congenital heart disease.
Sec. 10412. Automated Defibrillation in Adam's Memory Act.
Sec. 10413. Young women's breast health awareness and support of young
women diagnosed with breast cancer.
Subtitle E--Provisions Relating to Title V
Sec. 10501. Amendments to the Public Health Service Act, the Social
Security Act, and title V of this Act.
Sec. 10502. Infrastructure to Expand Access to Care.
Sec. 10503. Community Health Centers and the National Health Service
Corps Fund.
Sec. 10504. Demonstration project to provide access to affordable care.
Subtitle F--Provisions Relating to Title VI
Sec. 10601. Revisions to limitation on medicare exception to the
prohibition on certain physician referrals for hospitals.
Sec. 10602. Clarifications to patient-centered outcomes research.
Sec. 10603. Striking provisions relating to individual provider
application fees.
Sec. 10604. Technical correction to section 6405.
Sec. 10605. Certain other providers permitted to conduct face to face
encounter for home health services.
Sec. 10606. Health care fraud enforcement.
Sec. 10607. State demonstration programs to evaluate alternatives to
current medical tort litigation.
Sec. 10608. Extension of medical malpractice coverage to free clinics.
Sec. 10609. Labeling changes.
Subtitle G--Provisions Relating to Title VIII
Sec. 10801. Provisions relating to title VIII.
Subtitle H--Provisions Relating to Title IX
Sec. 10901. Modifications to excise tax on high cost employer-sponsored
health coverage.
Sec. 10902. Inflation adjustment of limitation on health flexible
spending arrangements under cafeteria plans.
Sec. 10903. Modification of limitation on charges by charitable
hospitals.
Sec. 10904. Modification of annual fee on medical device manufacturers
and importers.
Sec. 10905. Modification of annual fee on health insurance providers.
Sec. 10906. Modifications to additional hospital insurance tax on high-
income taxpayers.
Sec. 10907. Excise tax on indoor tanning services in lieu of elective
cosmetic medical procedures.
Sec. 10908. Exclusion for assistance provided to participants in State
student loan repayment programs for certain health
Sec. 10909. Expansion of adoption credit and adoption assistance
Part A of title XXVII of the Public Health Service Act (42 U.S.C.
300gg et seq.) is amended--
(1) by striking the part heading and inserting the following:
``PART A--INDIVIDUAL AND GROUP MARKET REFORMS'';
(2) by redesignating sections 2704 through 2707 as sections
2725 through 2728, respectively;
2735 through 2737, respectively; and
(5) by inserting after section 2702, the following:
``(a) In General.--A group health plan and a health insurance
issuer offering group or individual health insurance coverage may not
establish--
``(1) lifetime limits on the dollar value of benefits for any
participant or beneficiary; or
``(2) unreasonable annual limits (within the meaning of section
223 of the Internal Revenue Code of 1986) on the dollar value of
benefits for any participant or beneficiary.
``(b) Per Beneficiary Limits.--Subsection (a) shall not be
construed to prevent a group health plan or health insurance coverage
that is not required to provide essential health benefits under section
1302(b) of the Patient Protection and Affordable Care Act from placing
annual or lifetime per beneficiary limits on specific covered benefits
to the extent that such limits are otherwise permitted under Federal or
State law.
``A group health plan and a health insurance issuer offering group
or individual health insurance coverage shall not rescind such plan or
coverage with respect to an enrollee once the enrollee is covered under
such plan or coverage involved, except that this section shall not
apply to a covered individual who has performed an act or practice that
constitutes fraud or makes an intentional misrepresentation of material
fact as prohibited by the terms of the plan or coverage. Such plan or
coverage may not be cancelled except with prior notice to the enrollee,
and only as permitted under section 2702(c) or 2742(b).
issuer offering group or individual health insurance coverage shall, at
a minimum provide coverage for and shall not impose any cost sharing
requirements for--
``(1) evidence-based items or services that have in effect a
rating of `A' or `B' in the current recommendations of the United
States Preventive Services Task Force;
``(2) immunizations that have in effect a recommendation from
the Advisory Committee on Immunization Practices of the Centers for
Disease Control and Prevention with respect to the individual
involved; and
``(3) with respect to infants, children, and adolescents,
evidence-informed preventive care and screenings provided for in
the comprehensive guidelines supported by the Health Resources and
Services Administration.
``(4) with respect to women, such additional preventive care
and screenings not described in paragraph (1) as provided for in
comprehensive guidelines supported by the Health Resources and
Services Administration for purposes of this paragraph.
``(5) for the purposes of this Act, and for the purposes of any
other provision of law, the current recommendations of the United
States Preventive Service Task Force regarding breast cancer
screening, mammography, and prevention shall be considered the most
current other than those issued in or around November 2009.
Nothing in this subsection shall be construed to prohibit a plan or
issuer from providing coverage for services in addition to those
recommended by United States Preventive Services Task Force or to deny
coverage for services that are not recommended by such Task Force.
``(b) Interval.--
``(1) In general.--The Secretary shall establish a minimum
interval between the date on which a recommendation described in
subsection (a)(1) or (a)(2) or a guideline under subsection (a)(3)
is issued and the plan year with respect to which the requirement
described in subsection (a) is effective with respect to the
service described in such recommendation or guideline.
``(2) Minimum.--The interval described in paragraph (1) shall
not be less than 1 year.
``(c) Value-based Insurance Design.--The Secretary may develop
guidelines to permit a group health plan and a health insurance issuer
offering group or individual health insurance coverage to utilize
value-based insurance designs.
issuer offering group or individual health insurance coverage that
provides dependent coverage of children shall continue to make such
coverage available for an adult child (who is not married) until the
child turns 26 years of age. Nothing in this section shall require a
health plan or a health insurance issuer described in the preceding
sentence to make coverage available for a child of a child receiving
dependent coverage.
``(b) Regulations.--The Secretary shall promulgate regulations to
define the dependents to which coverage shall be made available under
subsection (a).
``(c) Rule of Construction.--Nothing in this section shall be
construed to modify the definition of `dependent' as used in the
Internal Revenue Code of 1986 with respect to the tax treatment of the
cost of coverage.
``(a) In General.--Not later than 12 months after the date of
enactment of the Patient Protection and Affordable Care Act, the
Secretary shall develop standards for use by a group health plan and a
health insurance issuer offering group or individual health insurance
coverage, in compiling and providing to enrollees a summary of benefits
and coverage explanation that accurately describes the benefits and
coverage under the applicable plan or coverage. In developing such
standards, the Secretary shall consult with the National Association of
Insurance Commissioners (referred to in this section as the `NAIC'), a
working group composed of representatives of health insurance-related
consumer advocacy organizations, health insurance issuers, health care
professionals, patient advocates including those representing
individuals with limited English proficiency, and other qualified
``(b) Requirements.--The standards for the summary of benefits and
coverage developed under subsection (a) shall provide for the
``(1) Appearance.--The standards shall ensure that the summary
of benefits and coverage is presented in a uniform format that does
not exceed 4 pages in length and does not include print smaller
than 12-point font.
``(2) Language.--The standards shall ensure that the summary is
presented in a culturally and linguistically appropriate manner and
utilizes terminology understandable by the average plan enrollee.
``(3) Contents.--The standards shall ensure that the summary of
benefits and coverage includes--
``(A) uniform definitions of standard insurance terms and
medical terms (consistent with subsection (g)) so that
consumers may compare health insurance coverage and understand
the terms of coverage (or exception to such coverage);
``(B) a description of the coverage, including cost sharing
for--
``(i) each of the categories of the essential health
benefits described in subparagraphs (A) through (J) of
section 1302(b)(1) of the Patient Protection and Affordable
Care Act; and
``(ii) other benefits, as identified by the Secretary;
``(C) the exceptions, reductions, and limitations on
coverage;
``(D) the cost-sharing provisions, including deductible,
coinsurance, and co-payment obligations;
``(E) the renewability and continuation of coverage
provisions;
``(F) a coverage facts label that includes examples to
illustrate common benefits scenarios, including pregnancy and
serious or chronic medical conditions and related cost sharing,
such scenarios to be based on recognized clinical practice
guidelines;
``(G) a statement of whether the plan or coverage--
``(i) provides minimum essential coverage (as defined
under section 5000A(f) of the Internal Revenue Code 1986);
``(ii) ensures that the plan or coverage share of the
total allowed costs of benefits provided under the plan or
coverage is not less than 60 percent of such costs;
``(H) a statement that the outline is a summary of the
policy or certificate and that the coverage document itself
should be consulted to determine the governing contractual
provisions; and
``(I) a contact number for the consumer to call with
additional questions and an Internet web address where a copy
of the actual individual coverage policy or group certificate
of coverage can be reviewed and obtained.
``(c) Periodic Review and Updating.--The Secretary shall
periodically review and update, as appropriate, the standards developed
under this section.
``(d) Requirement To Provide.--
``(1) In general.--Not later than 24 months after the date of
enactment of the Patient Protection and Affordable Care Act, each
entity described in paragraph (3) shall provide, prior to any
enrollment restriction, a summary of benefits and coverage
explanation pursuant    to the standards developed by the Secretary
under subsection (a) to--
``(A) an applicant at the time of application;
``(B) an enrollee prior to the time of enrollment or
reenrollment, as applicable; and
``(C) a policyholder or certificate holder at the time of
issuance of the policy or delivery of the certificate.
``(2) Compliance.--An entity described in paragraph (3) is
deemed to be in compliance with this section if the summary of
benefits and coverage described in subsection (a) is provided in
paper or electronic form.
``(3) Entities in general.--An entity described in this
paragraph is--
``(A) a health insurance issuer (including a group health
plan that is not a self-insured plan) offering health insurance
coverage within the United States; or
``(B) in the case of a self-insured group health plan, the
plan sponsor or designated administrator of the plan (as such
terms are defined in section 3(16) of the Employee Retirement
Income Security Act of 1974).
``(4) Notice of modifications.--If a group health plan or
health insurance issuer makes any material modification in any of
the terms of the plan or coverage involved (as defined for purposes
of section 102 of the Employee Retirement Income Security Act of
1974) that is not reflected in the most recently provided summary
of benefits and coverage, the plan or issuer shall provide notice
of such modification to enrollees not later than 60 days prior to
the date on which such modification will become effective.
``(e) Preemption.--The standards developed under subsection (a)
shall preempt any related State standards that require a summary of
benefits and coverage that provides less information to consumers than
that required to be provided under this section, as determined by the
Secretary.
``(f) Failure To Provide.--An entity described in subsection (d)(3)
that willfully fails to provide the information required under this
section shall be subject to a fine of not more than $1,000 for each
such failure. Such failure with respect to each enrollee shall
constitute a separate offense for purposes of this subsection.
``(g) Development of Standard Definitions.--
``(1) In general.--The Secretary shall, by regulation, provide
for the development of standards for the definitions of terms used
in health insurance coverage, including the insurance-related terms
described in paragraph (2) and the medical terms described in
paragraph (3).
``(2) Insurance-related terms.--The insurance-related terms
described in this paragraph are premium, deductible, co-insurance,
co-payment, out-of-pocket limit, preferred provider, non-preferred
provider, out-of-network co-payments, UCR (usual, customary and
reasonable) fees, excluded services, grievance and appeals, and
such other terms as the Secretary determines are important to
define so that consumers may compare health insurance coverage and
understand the terms of their coverage.
``(3) Medical terms.--The medical terms described in this
paragraph are hospitalization, hospital outpatient care, emergency
room care, physician services, prescription drug coverage, durable
medical equipment, home health care, skilled nursing care,
rehabilitation services, hospice services, emergency medical
transportation, and such other terms as the Secretary determines
are important to define so that consumers may compare the medical
benefits offered by health insurance and understand the extent of
those medical benefits (or exceptions to those benefits).
``(a) In General.--The plan sponsor of a group health plan (other
than a self-insured plan) may not establish rules relating to the
health insurance coverage eligibility (including continued eligibility)
of any full-time employee under the terms of the plan that are based on
the total hourly or annual salary of the employee or otherwise
establish eligibility rules that have the effect of discriminating in
favor of higher wage employees.
``(b) Limitation.--Subsection (a) shall not be construed to
prohibit a plan sponsor from establishing contribution requirements for
enrollment in the plan or coverage that provide for the payment by
employees with lower hourly or annual compensation of a lower dollar or
percentage contribution than the payment required of similarly situated
employees with a higher hourly or annual compensation.
``(a) Quality Reporting.--
``(1) In general.--Not later than 2 years after the date of
Secretary, in consultation with experts in health care quality and
stakeholders, shall develop reporting requirements for use by a
group health plan, and a health insurance issuer offering group or
individual health insurance coverage, with respect to plan or
coverage benefits and health care provider reimbursement structures
that--
``(A) improve health outcomes through the implementation of
activities such as quality reporting, effective case
management, care coordination, chronic disease management, and
medication and care compliance initiatives, including through
the use of the medical homes model as defined for purposes of
section 3602 of the Patient Protection and Affordable Care Act,
for treatment or services under the plan or coverage;
``(B) implement activities to prevent hospital readmissions
through a comprehensive program for hospital discharge that
includes patient-centered education and counseling,
comprehensive discharge planning, and post discharge
reinforcement by an appropriate health care professional;
``(C) implement activities to improve patient safety and
reduce medical errors through the appropriate use of best
clinical practices, evidence based medicine, and health
information technology under the plan or coverage; and
``(D) implement wellness and health promotion activities.
``(2) Reporting requirements.--
``(A) In general.--A group health plan and a health
insurance issuer offering group or individual health insurance
coverage shall annually submit to the Secretary, and to
enrollees under the plan or coverage, a report on whether the
benefits under the plan or coverage satisfy the elements
described in subparagraphs (A) through (D) of paragraph (1).
``(B) Timing of reports.--A report under subparagraph (A)
shall be made available to an enrollee under the plan or
coverage during each open enrollment period.
``(C) Availability of reports.--The Secretary shall make
reports submitted under subparagraph (A) available to the
public through an Internet website.
``(D) Penalties.--In developing the reporting requirements
under paragraph (1), the Secretary may develop and impose
appropriate penalties for non-compliance with such
``(E) Exceptions.--In developing the reporting requirements
under paragraph (1), the Secretary may provide for exceptions
to such requirements for group health plans and health
insurance issuers that substantially meet the goals of this
``(b) Wellness and Prevention Programs.--For purposes of subsection
(a)(1)(D), wellness and health promotion activities may include
personalized wellness and prevention services, which are coordinated,
maintained or delivered by a health care provider, a wellness and
prevention plan manager, or a health, wellness or prevention services
organization that conducts health risk assessments or offers ongoing
face-to-face, telephonic or web-based intervention efforts for each of
the program's participants, and which may include the following
wellness and prevention efforts:
``(1) Smoking cessation.
``(2) Weight management.
``(3) Stress management.
``(4) Physical fitness.
``(5) Nutrition.
``(6) Heart disease prevention.
``(7) Healthy lifestyle support.
``(8) Diabetes prevention.
``(c) Regulations.--Not later than 2 years after the date of
Secretary shall promulgate regulations that provide criteria for
determining whether a reimbursement structure is described in
``(d) Study and Report.--Not later than 180 days after the date on
which regulations are promulgated under subsection (c), the Government
Accountability Office shall review such regulations and conduct a study
and submit to the Committee on Health, Education, Labor, and Pensions
of the Senate and the Committee on Energy and Commerce of the House of
Representatives a report regarding the impact the activities under this
section have had on the quality and cost of health care.
``(a) Clear Accounting for Costs.--A health insurance issuer
offering group or individual health insurance coverage shall, with
respect to each plan year, submit to the Secretary a report concerning
the percentage of total premium revenue that such coverage expends--
``(1) on reimbursement for clinical services provided to
enrollees under such coverage;
``(2) for activities that improve health care quality; and
``(3) on all other non-claims costs, including an explanation
of the nature of such costs, and excluding State taxes and
licensing or regulatory fees.
The Secretary shall make reports received under this section available
to the public on the Internet website of the Department of Health and
Human Services.
``(b) Ensuring That Consumers Receive Value for Their Premium
Payments.--
``(1) Requirement to provide value for premium payments.--A
health insurance issuer offering group or individual health
insurance coverage shall, with respect to each plan year, provide
an annual rebate to each enrollee under such coverage, on a pro
rata basis, in an amount that is equal to the amount by which
premium revenue expended by the issuer on activities described in
subsection (a)(3) exceeds--
``(A) with respect to a health insurance issuer offering
coverage in the group market, 20 percent, or such lower
percentage as a State may by regulation determine; or
``(B) with respect to a health insurance issuer offering
coverage in the individual market, 25 percent, or such lower
percentage as a State may by regulation determine, except that
such percentage shall be adjusted to the extent the Secretary
determines that the application of such percentage with a State
may destabilize the existing individual market in such State.
``(2) Consideration in setting percentages.--In determining the
percentages under paragraph (1), a State shall seek to ensure
adequate participation by health insurance issuers, competition in
the health insurance market in the State, and value for consumers
so that premiums are used for clinical services and quality
improvements.
``(3) Termination.--The provisions of this subsection shall
have no force or effect after December 31, 2013.
``(c) Standard Hospital Charges.--Each hospital operating within
the United States shall for each year establish (and update) and make
public (in accordance with guidelines developed by the Secretary) a
list of the hospital's standard charges for items and services provided
by the hospital, including for diagnosis-related groups established
under section 1886(d)(4) of the Social Security Act.
``(d) Definitions.--The Secretary, in consultation with the
National Association of Insurance Commissions, shall establish uniform
definitions for the activities reported under subsection (a).
or individual health insurance coverage shall implement an effective
appeals process for appeals of coverage determinations and claims,
under which the plan or issuer shall, at a minimum--
``(1) have in effect an internal claims appeal process;
``(2) provide notice to enrollees, in a culturally and
linguistically appropriate manner, of available internal and
external appeals processes, and the availability of any applicable
office of health insurance consumer assistance or ombudsman
established under section 2793 to assist such enrollees with the
appeals processes;
``(3) allow an enrollee to review their file, to present
evidence and testimony as part of the appeals process, and to
receive continued coverage pending the outcome of the appeals
process; and
``(4) provide an external review process for such plans and
issuers that, at a minimum, includes the consumer protections set
forth in the Uniform External Review Model Act promulgated by the
National Association of Insurance Commissioners and is binding on
such plans.''.
Part C of title XXVII of the Public Health Service Act (42 U.S.C.
300gg-91 et seq.) is amended by adding at the end the following:
``SEC. 2793. HEALTH INSURANCE CONSUMER INFORMATION.
``(a) In General.--The Secretary shall award grants to States to
enable such States (or the Exchanges operating in such States) to
establish, expand, or provide support for--
``(1) offices of health insurance consumer assistance; or
``(2) health insurance ombudsman programs.
``(b) Eligibility.--
``(1) In general.--To be eligible to receive a grant, a State
shall designate an independent office of health insurance consumer
assistance, or an ombudsman, that, directly or in coordination with
State health insurance regulators and consumer assistance
organizations, receives and responds to inquiries and complaints
concerning health insurance coverage with respect to Federal health
insurance requirements and under State law.
``(2) Criteria.--A State that receives a grant under this
section shall comply with criteria established by the Secretary for
carrying out activities under such grant.
``(c) Duties.--The office of health insurance consumer assistance
or health insurance ombudsman shall--
``(1) assist with the filing of complaints and appeals,
including filing appeals with the internal appeal or grievance
process of the group health plan or health insurance issuer
involved and providing information about the external appeal
``(2) collect, track, and quantify problems and inquiries
encountered by consumers;
``(3) educate consumers on their rights and responsibilities
with respect to group health plans and health insurance coverage;
``(4) assist consumers with enrollment in a group health plan
or health insurance coverage by providing information, referral,
and assistance; and
``(5) resolve problems with obtaining premium tax credits under
section 36B of the Internal Revenue Code of 1986.
``(d) Data Collection.--As a condition of receiving a grant under
subsection (a), an office of health insurance consumer assistance or
ombudsman program shall be required to collect and report data to the
Secretary on the types of problems and inquiries encountered by
consumers. The Secretary shall utilize such data to identify areas
where more enforcement action is necessary and shall share such
information with State insurance regulators, the Secretary of Labor,
and the Secretary of the Treasury for use in the enforcement activities
of such agencies.
``(e) Funding.--
``(1) Initial funding.--There is hereby appropriated to the
Secretary, out of any funds in the Treasury not otherwise
appropriated, $30,000,000 for the first fiscal year for which this
section applies to carry out this section. Such amount shall remain
available without fiscal year limitation.
``(2) Authorization for subsequent years.--There is authorized
to be appropriated to the Secretary for each fiscal year following
the fiscal year described in paragraph (1), such sums as may be
necessary to carry out this section.''.
300gg-91 et seq.), as amended by section 1002, is further amended by
adding at the end the following:
``SEC. 2794. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.
``(a) Initial Premium Review Process.--
``(1) In general.--The Secretary, in conjunction with States,
shall establish a process for the annual review, beginning with the
2010 plan year and subject to subsection (b)(2)(A), of unreasonable
increases in premiums for health insurance coverage.
``(2) Justification and disclosure.--The process established
under paragraph (1) shall require health insurance issuers to
submit to the Secretary and the relevant State a justification for
an unreasonable premium increase prior to the implementation of the
increase. Such issuers shall prominently post such information on
their Internet websites. The Secretary shall ensure the public
disclosure of information on such increases and justifications for
all health insurance issuers.
``(b) Continuing Premium Review Process.--
``(1) Informing secretary of premium increase patterns.--As a
condition of receiving a grant under subsection (c)(1), a State,
through its Commissioner of Insurance, shall--
``(A) provide the Secretary with information about trends
in premium increases in health insurance coverage in premium
rating areas in the State; and
``(B) make recommendations, as appropriate, to the State
Exchange about whether particular health insurance issuers
should be excluded from participation in the Exchange based on
a pattern or practice of excessive or unjustified premium
increases.
``(2) Monitoring by secretary of premium increases.--
``(A) In general.--Beginning with plan years beginning in
2014, the Secretary, in conjunction with the States and
consistent with the provisions of subsection (a)(2), shall
monitor premium increases of health insurance coverage offered
through an Exchange and outside of an Exchange.
``(B) Consideration in opening exchange.--In determining
under section 1312(f)(2)(B) of the Patient Protection and
Affordable Care Act whether to offer qualified health plans in
the large group market through an Exchange, the State shall
take into account any excess of premium growth outside of the
Exchange as compared to the rate of such growth inside the
``(c) Grants in Support of Process.--
``(1) Premium review grants during 2010 through 2014.--The
Secretary shall carry out a program to award grants to States
during the 5-year period beginning with fiscal year 2010 to assist
such States in carrying out subsection (a), including--
``(A) in reviewing and, if appropriate under State law,
approving premium increases for health insurance coverage; and
``(B) in providing information and recommendations to the
Secretary under subsection (b)(1).
``(2) Funding.--
``(A) In general.--Out of all funds in the Treasury not
otherwise appropriated, there are appropriated to the Secretary
$250,000,000, to be available for expenditure for grants under
paragraph (1) and subparagraph (B).
``(B) Further availability for insurance reform and
consumer protection.--If the amounts appropriated under
subparagraph (A) are not fully obligated under grants under
paragraph (1) by the end of fiscal year 2014, any remaining
funds shall remain available to the Secretary for grants to
States for planning and implementing the insurance reforms and
consumer protections under part A.
``(C) Allocation.--The Secretary shall establish a formula
for determining the amount of any grant to a State under this
subsection. Under such formula--
``(i) the Secretary shall consider the number of plans
of health insurance coverage offered in each State and the
population of the State; and
``(ii) no State qualifying for a grant under paragraph
(1) shall receive less than $1,000,000, or more than
$5,000,000 for a grant year.''.
(a) In General.--Except as provided for in subsection (b), this
subtitle (and the amendments made by this subtitle) shall become
effective for plan years beginning on or after the date that is 6
months after the date of enactment of this Act, except that the
amendments made by sections 1002 and 1003 shall become effective for
fiscal years beginning with fiscal year 2010.
(b) Special Rule.--The amendments made by sections 1002 and 1003
shall take effect on the date of enactment of this Act.
(a) In General.--Not later than 90 days after the date of enactment
of this Act, the Secretary shall establish a temporary high risk health
insurance pool program to provide health insurance coverage for
eligible individuals during the period beginning on the date on which
such program is established and ending on January 1, 2014.
(b) Administration.--
(1) In general.--The Secretary may carry out the program under
this section directly or through contracts to eligible entities.
(2) Eligible entities.--To be eligible for a contract under
paragraph (1), an entity shall--
(A) be a State or nonprofit private entity;
(B) submit to the Secretary an application at such time, in
such manner, and containing such information as the Secretary
may require; and
(C) agree to utilize contract funding to establish and
administer a qualified high risk pool for eligible individuals.
(3) Maintenance of effort.--To be eligible to enter into a
contract with the Secretary under this subsection, a State shall
agree not to reduce the annual amount the State expended for the
operation of one or more State high risk pools during the year
preceding the year in which such contract is entered into.
(c) Qualified High Risk Pool.--
(1) In general.--Amounts made available under this section
shall be used to establish a qualified high risk pool that meets
the requirements of paragraph (2).
(2) Requirements.--A qualified high risk pool meets the
requirements of this paragraph if such pool--
(A) provides to all eligible individuals health insurance
coverage that does not impose any preexisting condition
exclusion with respect to such coverage;
(B) provides health insurance coverage--
(i) in which the issuer's share of the total allowed
costs of benefits provided under such coverage is not less
than 65 percent of such costs; and
(ii) that has an out of pocket limit not greater than
the applicable amount described in section 223(c)(2) of the
Internal Revenue Code of 1986 for the year involved, except
that the Secretary may modify such limit if necessary to
ensure the pool meets the actuarial value limit under
clause (i);
(C) ensures that with respect to the premium rate charged
for health insurance coverage offered to eligible individuals
through the high risk pool, such rate shall--
(i) except as provided in clause (ii), vary only as
provided for under section 2701 of the Public Health
Service Act (as amended by this Act and notwithstanding the
date on which such amendments take effect);
(ii) vary on the basis of age by a factor of not
greater than 4 to 1; and
(iii) be established at a standard rate for a standard
population; and
(D) meets any other requirements determined appropriate by
the Secretary.
(d) Eligible Individual.--An individual shall be deemed to be an
eligible individual for purposes of this section if such individual--
(1) is a citizen or national of the United States or is
lawfully present in the United States (as determined in accordance
with section 1411);
(2) has not been covered under creditable coverage (as defined
in section 2701(c)(1) of the Public Health Service Act as in effect
on the date of enactment of this Act) during the 6-month period
prior to the date on which such individual is applying for coverage
through the high risk pool; and
(3) has a pre-existing condition, as determined in a manner
consistent with guidance issued by the Secretary.
(e) Protection Against Dumping Risk by Insurers.--
(1) In general.--The Secretary shall establish criteria for
determining whether health insurance issuers and employment-based
health plans have discouraged an individual from remaining enrolled
in prior coverage based on that individual's health status.
(2) Sanctions.--An issuer or employment-based health plan shall
be responsible for reimbursing the program under this section for
the medical expenses incurred by the program for an individual who,
based on criteria established by the Secretary, the Secretary finds
was encouraged by the issuer to disenroll from health benefits
coverage prior to enrolling in coverage through the program. The
criteria shall include at least the following circumstances:
(A) In the case of prior coverage obtained through an
employer, the provision by the employer, group health plan, or
the issuer of money or other financial consideration for
disenrolling from the coverage.
(B) In the case of prior coverage obtained directly from an
issuer or under an employment-based health plan--
(i) the provision by the issuer or plan of money or
other financial consideration for disenrolling from the
coverage; or
(ii) in the case of an individual whose premium for the
prior coverage exceeded the premium required by the program
(adjusted based on the age factors applied to the prior
coverage)--
(I) the prior coverage is a policy that is no
longer being actively marketed (as defined by the
Secretary) by the issuer; or
(II) the prior coverage is a policy for which
duration of coverage form issue or health status are
factors that can be considered in determining premiums
at renewal.
(3) Construction.--Nothing in this subsection shall be
construed as constituting exclusive remedies for violations of
criteria established under paragraph (1) or as preventing States
from applying or enforcing such paragraph or other provisions under
law with respect to health insurance issuers.
(f) Oversight.--The Secretary shall establish--
(1) an appeals process to enable individuals to appeal a
determination under this section; and
(2) procedures to protect against waste, fraud, and abuse.
(g) Funding; Termination of Authority.--
(1) In general.--There is appropriated to the Secretary, out of
any moneys in the Treasury not otherwise appropriated,
$5,000,000,000 to pay claims against (and the administrative costs
of) the high risk pool under this section that are in excess of the
amount of premiums collected from eligible individuals enrolled in
the high risk pool. Such funds shall be available without fiscal
year limitation.
(2) Insufficient funds.--If the Secretary estimates for any
fiscal year that the aggregate amounts available for the payment of
the expenses of the high risk pool will be less than the actual
amount of such expenses, the Secretary shall make such adjustments
as are necessary to eliminate such deficit.
(3) Termination of authority.--
(A) In general.--Except as provided in subparagraph (B),
coverage of eligible individuals under a high risk pool in a
State shall terminate on January 1, 2014.
(B) Transition to exchange.--The Secretary shall develop
procedures to provide for the transition of eligible
individuals enrolled in health insurance coverage offered
through a high risk pool established under this section into
qualified health plans offered through an Exchange. Such
procedures shall ensure that there is no lapse in coverage with
respect to the individual and may extend coverage after the
termination of the risk pool involved, if the Secretary
determines necessary to avoid such a lapse.
(4) Limitations.--The Secretary has the authority to stop
taking applications for participation in the program under this
section to comply with the funding limitation provided for in
(5) Relation to state laws.--The standards established under
this section shall supersede any State law or regulation (other
than State licensing laws or State laws relating to plan solvency)
with respect to qualified high risk pools which are established in
accordance with this section.
(a) Administration.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall establish a temporary
reinsurance program to provide reimbursement to participating
employment-based plans for a portion of the cost of providing
health insurance coverage to early retirees (and to the eligible
spouses, surviving spouses, and dependents of such retirees) during
the period beginning on the date on which such program is
established and ending on January 1, 2014.
(2) Reference.--In this section:
(A) Health benefits.--The term ``health benefits'' means
medical, surgical, hospital, prescription drug, and such other
benefits as shall be determined by the Secretary, whether self-
funded, or delivered through the purchase of insurance or
otherwise.
(B) Employment-based plan.--The term ``employment-based
plan'' means a group health benefits plan that--
(i) is--
(I) maintained by one or more current or former
employers (including without limitation any State or
local government or political subdivision thereof),
employee organization, a voluntary employees'
beneficiary association, or a committee or board of
individuals appointed to administer such plan; or
(II) a multiemployer plan (as defined in section
3(37) of the Employee Retirement Income Security Act of
1974); and
(ii) provides health benefits to early retirees.
(C) Early retirees.--The term ``early retirees'' means
individuals who are age 55 and older but are not eligible for
coverage under title XVIII of the Social Security Act, and who
are not active employees of an employer maintaining, or
currently contributing to, the employment-based plan or of any
employer that has made substantial contributions to fund such
(b) Participation.--
(1) Employment-based plan eligibility.--A participating
employment-based plan is an employment-based plan that--
(A) meets the requirements of paragraph (2) with respect to
health benefits provided under the plan; and
(B) submits to the Secretary an application for
participation in the program, at such time, in such manner, and
containing such information as the Secretary shall require.
(2) Employment-based health benefits.--An employment-based plan
meets the requirements of this paragraph if the plan--
(A) implements programs and procedures to generate cost-
savings with respect to participants with chronic and high-cost
conditions;
(B) provides documentation of the actual cost of medical
claims involved; and
(C) is certified by the Secretary.
(c) Payments.--
(1) Submission of claims.--
(A) In general.--A participating employment-based plan
shall submit claims for reimbursement to the Secretary which
shall contain documentation of the actual costs of the items
and services for which each claim is being submitted.
(B) Basis for claims.--Claims submitted under subparagraph
(A) shall be based on the actual amount expended by the
participating employment-based plan involved within the plan
year for the health benefits provided to an early retiree or
the spouse, surviving spouse, or dependent of such retiree. In
determining the amount of a claim for purposes of this
subsection, the participating employment-based plan shall take
into account any negotiated price concessions (such as
discounts, direct or indirect subsidies, rebates, and direct or
indirect remunerations) obtained by such plan with respect to
such health benefit. For purposes of determining the amount of
any such claim, the costs paid by the early retiree or the
retiree's spouse, surviving spouse, or dependent in the form of
deductibles, co-payments, or co-insurance shall be included in
the amounts paid by the participating employment-based plan.
(2) Program payments.--If the Secretary determines that a
participating employment-based plan has submitted a valid claim
under paragraph (1), the Secretary shall reimburse such plan for 80
percent of that portion of the costs attributable to such claim
that exceed $15,000, subject to the limits contained in paragraph
(3).
(3) Limit.--To be eligible for reimbursement under the program,
a claim submitted by a participating employment-based plan shall
not be less than $15,000 nor greater than $90,000. Such amounts
shall be adjusted each fiscal year based on the percentage increase
in the Medical Care Component of the Consumer Price Index for all
urban consumers (rounded to the nearest multiple of $1,000) for the
year involved.
(4) Use of payments.--Amounts paid to a participating
employment-based plan under this subsection shall be used to lower
costs for the plan. Such payments may be used to reduce premium
costs for an entity described in subsection (a)(2)(B)(i) or to
reduce premium contributions, co-payments, deductibles, co-
insurance, or other out-of-pocket costs for plan participants. Such
payments shall not be used as general revenues for an entity
described in subsection (a)(2)(B)(i). The Secretary shall develop a
mechanism to monitor the appropriate use of such payments by such
entities.
(5) Payments not treated as income.--Payments received under
this subsection shall not be included in determining the gross
income of an entity described in subsection (a)(2)(B)(i) that is
maintaining or currently contributing to a participating
employment-based plan.
(6) Appeals.--The Secretary shall establish--
(A) an appeals process to permit participating employment-
based plans to appeal a determination of the Secretary with
respect to claims submitted under this section; and
(B) procedures to protect against fraud, waste, and abuse
under the program.
(d) Audits.--The Secretary shall conduct annual audits of claims
data submitted by participating employment-based plans under this
section to ensure that such plans are in compliance with the
requirements of this section.
(e) Funding.--There is appropriated to the Secretary, out of any
moneys in the Treasury not otherwise appropriated, $5,000,000,000 to
carry out the program under this section. Such funds shall be available
without fiscal year limitation.
(f) Limitation.--The Secretary has the authority to stop taking
applications for participation in the program based on the availability
of funding under subsection (e).
(a) Internet Portal to Affordable Coverage Options.--
(1) Immediate establishment.--Not later than July 1, 2010, the
Secretary, in consultation with the States, shall establish a
mechanism, including an Internet website, through which a resident
of any State may identify affordable health insurance coverage
options in that State.
(2) Connecting to affordable coverage.--An Internet website
established under paragraph (1) shall, to the extent practicable,
provide ways for residents of any State to receive information on
at least the following coverage options:
(A) Health insurance coverage offered by health insurance
issuers, other than coverage that provides reimbursement only
for the treatment or mitigation of--
(i) a single disease or condition; or
(ii) an unreasonably limited set of diseases or
conditions (as determined by the Secretary);
(B) Medicaid coverage under title XIX of the Social
Security Act.
(C) Coverage under title XXI of the Social Security Act.
(D) A State health benefits high risk pool, to the extent
that such high risk pool is offered in such State; and
(E) Coverage under a high risk pool under section 1101.
(b) Enhancing Comparative Purchasing Options.--
enactment of this Act, the Secretary shall develop a standardized
format to be used for the presentation of information relating to
the coverage options described in subsection (a)(2). Such format
shall, at a minimum, require the inclusion of information on the
percentage of total premium revenue expended on nonclinical costs
(as reported under section 2718(a) of the Public Health Service
Act), eligibility, availability, premium rates, and cost sharing
with respect to such coverage options and be consistent with the
standards adopted for the uniform explanation of coverage as
provided for in section 2715 of the Public Health Service Act.
(2) Use of format.--The Secretary shall utilize the format
developed under paragraph (1) in compiling information concerning
coverage options on the Internet website established under
(c) Authority To Contract.--The Secretary may carry out this
section through contracts entered into with qualified entities.
(a) Purpose of Administrative Simplification.--Section 261 of the
Health Insurance Portability and Accountability Act of 1996 (42 U.S.C.
1320d note) is amended--
(1) by inserting ``uniform'' before ``standards''; and
(2) by inserting ``and to reduce the clerical burden on
patients, health care providers, and health plans'' before the
period at the end.
(b) Operating Rules for Health Information Transactions.--
(1) Definition of operating rules.--Section 1171 of the Social
Security Act (42 U.S.C. 1320d) is amended by adding at the end the
``(9) Operating rules.--The term `operating rules' means the
necessary business rules and guidelines for the electronic exchange
of information that are not defined by a standard or its
implementation specifications as adopted for purposes of this
part.''.
(2) Transaction standards; operating rules and compliance.--
Section 1173 of the Social Security Act (42 U.S.C. 1320d-2) is
amended--
(A) in subsection (a)(2), by adding at the end the
following new subparagraph:
``(J) Electronic funds transfers.'';
(B) in subsection (a), by adding at the end the following
new paragraph:
``(4) Requirements for financial and administrative
transactions.--
``(A) In general.--The standards and associated operating
rules adopted by the Secretary shall--
``(i) to the extent feasible and appropriate, enable
determination of an individual's eligibility and financial
responsibility for specific services prior to or at the
point of care;
``(ii) be comprehensive, requiring minimal augmentation
by paper or other communications;
``(iii) provide for timely acknowledgment, response,
and status reporting that supports a transparent claims and
denial management process (including adjudication and
appeals); and
``(iv) describe all data elements (including reason and
remark codes) in unambiguous terms, require that such data
elements be required or conditioned upon set values in
other fields, and prohibit additional conditions (except
where necessary to implement State or Federal law, or to
protect against fraud and abuse).
``(B) Reduction of clerical burden.--In adopting standards
and operating rules for the transactions referred to under
paragraph (1), the Secretary shall seek to reduce the number
and complexity of forms (including paper and electronic forms)
and data entry required by patients and providers.''; and
(C) by adding at the end the following new subsections:
``(g) Operating Rules.--
``(1) In general.--The Secretary shall adopt a single set of
operating rules for each transaction referred to under subsection
(a)(1) with the goal of creating as much uniformity in the
implementation of the electronic standards as possible. Such
operating rules shall be consensus-based and reflect the necessary
business rules affecting health plans and health care providers and
the manner in which they operate pursuant to standards issued under
Health Insurance Portability and Accountability Act of 1996.
``(2) Operating rules development.--In adopting operating rules
under this subsection, the Secretary shall consider recommendations
for operating rules developed by a qualified nonprofit entity that
meets the following requirements:
``(A) The entity focuses its mission on administrative
``(B) The entity demonstrates a multi-stakeholder and
consensus-based process for development of operating rules,
including representation by or participation from health plans,
health care providers, vendors, relevant Federal agencies, and
other standard development organizations.
``(C) The entity has a public set of guiding principles
that ensure the operating rules and process are open and
transparent, and supports nondiscrimination and conflict of
interest policies that demonstrate a commitment to open, fair,
and nondiscriminatory practices.
``(D) The entity builds on the transaction standards issued
under Health Insurance Portability and Accountability Act of
``(E) The entity allows for public review and updates of
the operating rules.
``(3) Review and recommendations.--The National Committee on
Vital and Health Statistics shall--
``(A) advise the Secretary as to whether a nonprofit entity
meets the requirements under paragraph (2);
``(B) review the operating rules developed and recommended
by such nonprofit entity;
``(C) determine whether such operating rules represent a
consensus view of the health care stakeholders and are
consistent with and do not conflict with other existing
standards;
``(D) evaluate whether such operating rules are consistent
with electronic standards adopted for health information
technology; and
``(E) submit to the Secretary a recommendation as to
whether the Secretary should adopt such operating rules.
``(4) Implementation.--
``(A) In general.--The Secretary shall adopt operating
rules under this subsection, by regulation in accordance with
subparagraph (C), following consideration of the operating
rules developed by the non-profit entity described in paragraph
(2) and the recommendation submitted by the National Committee
on Vital and Health Statistics under paragraph (3)(E) and
having ensured consultation with providers.
``(B) Adoption requirements; effective dates.--
``(i) Eligibility for a health plan and health claim
status.--The set of operating rules for eligibility for a
health plan and health claim status transactions shall be
adopted not later than July 1, 2011, in a manner ensuring
that such operating rules are effective not later than
January 1, 2013, and may allow for the use of a machine
readable identification card.
``(ii) Electronic funds transfers and health care
payment and remittance advice.--The set of operating rules
for electronic funds transfers and health care payment and
remittance advice transactions shall--
``(I) allow for automated reconciliation of the
electronic payment with the remittance advice; and
``(II) be adopted not later than July 1, 2012, in a
manner ensuring that such operating rules are effective
not later than January 1, 2014.
``(iii) Health claims or equivalent encounter
information, enrollment and disenrollment in a health plan,
health plan premium payments, referral certification and
authorization.--The set of operating rules for health
claims or equivalent encounter information, enrollment and
disenrollment in a health plan, health plan premium
payments, and referral certification and authorization
transactions shall be adopted not later than July 1, 2014,
in a manner ensuring that such operating rules are
effective not later than January 1, 2016.
``(C) Expedited rulemaking.--The Secretary shall promulgate
an interim final rule applying any standard or operating rule
recommended by the National Committee on Vital and Health
Statistics pursuant to paragraph (3). The Secretary shall
accept and consider public comments on any interim final rule
published under this subparagraph for 60 days after the date of
such publication.
``(h) Compliance.--
``(1) Health plan certification.--
``(A) Eligibility for a health plan, health claim status,
electronic funds transfers, health care payment and remittance
advice.--Not later than December 31, 2013, a health plan shall
file a statement with the Secretary, in such form as the
Secretary may require, certifying that the data and information
systems for such plan are in compliance with any applicable
standards (as described under paragraph (7) of section 1171)
and associated operating rules (as described under paragraph
(9) of such section) for electronic funds transfers,
eligibility for a health plan, health claim status, and health
care payment and remittance advice, respectively.
``(B) Health claims or equivalent encounter information,
enrollment and disenrollment in a health plan, health plan
premium payments, health claims attachments, referral
certification and authorization.--Not later than December 31,
2015, a health plan shall file a statement with the Secretary,
in such form as the Secretary may require, certifying that the
data and information systems for such plan are in compliance
with any applicable standards and associated operating rules
for health claims or equivalent encounter information,
premium payments, health claims attachments, and referral
certification and authorization, respectively. A health plan
shall provide the same level of documentation to certify
compliance with such transactions as is required to certify
compliance with the transactions specified in subparagraph (A).
``(2) Documentation of compliance.--A health plan shall provide
the Secretary, in such form as the Secretary may require, with
adequate documentation of compliance with the standards and
operating rules described under paragraph (1). A health plan shall
not be considered to have provided adequate documentation and shall
not be certified as being in compliance with such standards, unless
the health plan--
``(A) demonstrates to the Secretary that the plan conducts
the electronic transactions specified in paragraph (1) in a
manner that fully complies with the regulations of the
Secretary; and
``(B) provides documentation showing that the plan has
completed end-to-end testing for such transactions with their
partners, such as hospitals and physicians.
``(3) Service contracts.--A health plan shall be required to
ensure that any entities that provide services pursuant to a
contract with such health plan shall comply with any applicable
certification and compliance requirements (and provide the
Secretary with adequate documentation of such compliance) under
this subsection.
``(4) Certification by outside entity.--The Secretary may
designate independent, outside entities to certify that a health
plan has complied with the requirements under this subsection,
provided that the certification standards employed by such entities
are in accordance with any standards or operating rules issued by
``(5) Compliance with revised standards and operating rules.--
``(A) In general.--A health plan (including entities
described under paragraph (3)) shall file a statement with the
Secretary, in such form as the Secretary may require,
certifying that the data and information systems for such plan
are in compliance with any applicable revised standards and
associated operating rules under this subsection for any
interim final rule promulgated by the Secretary under
subsection (i) that--
``(i) amends any standard or operating rule described
under paragraph (1) of this subsection; or
``(ii) establishes a standard (as described under
subsection (a)(1)(B)) or associated operating rules (as
described under subsection (i)(5)) for any other financial
and administrative transactions.
``(B) Date of compliance.--A health plan shall comply with
such requirements not later than the effective date of the
applicable standard or operating rule.
``(6) Audits of health plans.--The Secretary shall conduct
periodic audits to ensure that health plans (including entities
described under paragraph (3)) are in compliance with any standards
and operating rules that are described under paragraph (1) or
subsection (i)(5).
``(i) Review and Amendment of Standards and Operating Rules.--
``(1) Establishment.--Not later than January 1, 2014, the
Secretary shall establish a review committee (as described under
paragraph (4)).
``(2) Evaluations and reports.--
``(A) Hearings.--Not later than April 1, 2014, and not less
than biennially thereafter, the Secretary, acting through the
review committee, shall conduct hearings to evaluate and review
the adopted standards and operating rules established under
this section.
``(B) Report.--Not later than July 1, 2014, and not less
than biennially thereafter, the review committee shall provide
recommendations for updating and improving such standards and
operating rules. The review committee shall recommend a single
set of operating rules per transaction standard and maintain
the goal of creating as much uniformity as possible in the
implementation of the electronic standards.
``(3) Interim final rulemaking.--
``(A) In general.--Any recommendations to amend adopted
standards and operating rules that have been approved by the
review committee and reported to the Secretary under paragraph
(2)(B) shall be adopted by the Secretary through promulgation
of an interim final rule not later than 90 days after receipt
of the committee's report.
``(B) Public comment.--
``(i) Public comment period.--The Secretary shall
accept and consider public comments on any interim final
rule published under this paragraph for 60 days after the
date of such publication.
``(ii) Effective date.--The effective date of any
amendment to existing standards or operating rules that is
adopted through an interim final rule published under this
paragraph shall be 25 months following the close of such
public comment period.
``(4) Review committee.--
``(A) Definition.--For the purposes of this subsection, the
term `review committee' means a committee chartered by or
within the Department of Health and Human services that has
been designated by the Secretary to carry out this subsection,
including--
``(i) the National Committee on Vital and Health
Statistics; or
``(ii) any appropriate committee as determined by the
``(B) Coordination of hit standards.--In developing
recommendations under this subsection, the review committee
shall ensure coordination, as appropriate, with the standards
that support the certified electronic health record technology
approved by the Office of the National Coordinator for Health
``(5) Operating rules for other standards adopted by the
secretary.--The Secretary shall adopt a single set of operating
rules (pursuant to the process described under subsection (g)) for
any transaction for which a standard had been adopted pursuant to
subsection (a)(1)(B).
``(j) Penalties.--
``(1) Penalty fee.--
``(A) In general.--Not later than April 1, 2014, and
annually thereafter, the Secretary shall assess a penalty fee
(as determined under subparagraph (B)) against a health plan
that has failed to meet the requirements under subsection (h)
with respect to certification and documentation of compliance
with--
``(i) the standards and associated operating rules
described under paragraph (1) of such subsection; and
``(ii) a standard (as described under subsection
(a)(1)(B)) and associated operating rules (as described
under subsection (i)(5)) for any other financial and
administrative transactions.
``(B) Fee amount.--Subject to subparagraphs (C), (D), and
(E), the Secretary shall assess a penalty fee against a health
plan in the amount of $1 per covered life until certification
is complete. The penalty shall be assessed per person covered
by the plan for which its data systems for major medical
policies are not in compliance and shall be imposed against the
health plan for each day that the plan is not in compliance
with the requirements under subsection (h).
``(C) Additional penalty for misrepresentation.--A health
plan that knowingly provides inaccurate or incomplete
information in a statement of certification or documentation of
compliance under subsection (h) shall be subject to a penalty
fee that is double the amount that would otherwise be imposed
under this subsection.
``(D) Annual fee increase.--The amount of the penalty fee
imposed under this subsection shall be increased on an annual
basis by the annual percentage increase in total national
health care expenditures, as determined by the Secretary.
``(E) Penalty limit.--A penalty fee assessed against a
health plan under this subsection shall not exceed, on an
annual basis--
``(i) an amount equal to $20 per covered life under
such plan; or
``(ii) an amount equal to $40 per covered life under
the plan if such plan has knowingly provided inaccurate or
incomplete information (as described under subparagraph
(C)).
``(F) Determination of covered individuals.--The Secretary
shall determine the number of covered lives under a health plan
based upon the most recent statements and filings that have
been submitted by such plan to the Securities and Exchange
``(2) Notice and dispute procedure.--The Secretary shall
establish a procedure for assessment of penalty fees under this
subsection that provides a health plan with reasonable notice and a
dispute resolution procedure prior to provision of a notice of
assessment by the Secretary of the Treasury (as described under
paragraph (4)(B)).
``(3) Penalty fee report.--Not later than May 1, 2014, and
annually thereafter, the Secretary shall provide the Secretary of
the Treasury with a report identifying those health plans that have
been assessed a penalty fee under this subsection.
``(4) Collection of penalty fee.--
``(A) In general.--The Secretary of the Treasury, acting
through the Financial Management Service, shall administer the
collection of penalty fees from health plans that have been
identified by the Secretary in the penalty fee report provided
under paragraph (3).
``(B) Notice.--Not later than August 1, 2014, and annually
thereafter, the Secretary of the Treasury shall provide notice
to each health plan that has been assessed a penalty fee by the
Secretary under this subsection. Such notice shall include the
amount of the penalty fee assessed by the Secretary and the due
date for payment of such fee to the Secretary of the Treasury
(as described in subparagraph (C)).
``(C) Payment due date.--Payment by a health plan for a
penalty fee assessed under this subsection shall be made to the
Secretary of the Treasury not later than November 1, 2014, and
annually thereafter.
``(D) Unpaid penalty fees.--Any amount of a penalty fee
assessed against a health plan under this subsection for which
payment has not been made by the due date provided under
subparagraph (C) shall be--
``(i) increased by the interest accrued on such amount,
as determined pursuant to the underpayment rate established
under section 6621 of the Internal Revenue Code of 1986;
``(ii) treated as a past-due, legally enforceable debt
owed to a Federal agency for purposes of section 6402(d) of
the Internal Revenue Code of 1986.
``(E) Administrative fees.--Any fee charged or allocated
for collection activities conducted by the Financial Management
Service will be passed on to a health plan on a pro-rata basis
and added to any penalty fee collected from the plan.''.
(c) Promulgation of Rules.--
(1) Unique health plan identifier.--The Secretary shall
promulgate a final rule to establish a unique health plan
identifier (as described in section 1173(b) of the Social Security
Act (42 U.S.C. 1320d-2(b))) based on the input of the National
Committee on Vital and Health Statistics. The Secretary may do so
on an interim final basis and such rule shall be effective not
later than October 1, 2012.
(2) Electronic funds transfer.--The Secretary shall promulgate
a final rule to establish a standard for electronic funds transfers
(as described in section 1173(a)(2)(J) of the Social Security Act,
as added by subsection (b)(2)(A)). The Secretary may do so on an
interim final basis and shall adopt such standard not later than
January 1, 2012, in a manner ensuring that such standard is
(3) Health claims attachments.--The Secretary shall promulgate
a final rule to establish a transaction standard and a single set
of associated operating rules for health claims attachments (as
described in section 1173(a)(2)(B) of the Social Security Act (42
U.S.C. 1320d-2(a)(2)(B))) that is consistent with the X12 Version
5010 transaction standards. The Secretary may do so on an interim
final basis and shall adopt a transaction standard and a single set
of associated operating rules not later than January 1, 2014, in a
manner ensuring that such standard is effective not later than
(d) Expansion of Electronic Transactions in Medicare.--Section
1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended--
(1) in paragraph (23), by striking the ``or'' at the end;
(2) in paragraph (24), by striking the period and inserting ``;
or''; and
(3) by inserting after paragraph (24) the following new
paragraph:
``(25) not later than January 1, 2014, for which the payment is
other than by electronic funds transfer (EFT) or an electronic
remittance in a form as specified in ASC X12 835 Health Care
Payment and Remittance Advice or subsequent standard.''.
This subtitle shall take effect on the date of enactment of this
300gg et seq.), as amended by section 1001, is further amended--
(1) by striking the heading for subpart 1 and inserting the
``Subpart I--General Reform'';
(2)(A) in section 2701 (42 U.S.C. 300gg), by striking the
section heading and subsection (a) and inserting the following:
``SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER
DISCRIMINATION BASED ON HEALTH STATUS.
impose any preexisting condition exclusion with respect to such plan or
coverage.''; and
(B) by transferring such section (as amended by subparagraph
(A)) so as to appear after the section 2703 added by paragraph (4);
(3)(A) in section 2702 (42 U.S.C. 300gg-1)--
(i) by striking the section heading and all that follows
through subsection (a);
(ii) in subsection (b)--
(I) by striking ``health insurance issuer offering
health insurance coverage in connection with a group health
plan'' each place that such appears and inserting ``health
insurance issuer offering group or individual health
insurance coverage''; and
(II) in paragraph (2)(A)--
(aa) by inserting ``or individual'' after
``employer''; and
(bb) by inserting ``or individual health coverage,
as the case may be'' before the semicolon; and
(iii) in subsection (e)--
(I) by striking ``(a)(1)(F)'' and inserting ``(a)(6)'';
(II) by striking ``2701'' and inserting ``2704''; and
(III) by striking ``2721(a)'' and inserting
``2735(a)''; and
(B) by transferring such section (as amended by
subparagraph (A)) to appear after section 2705(a) as added by
paragraph (4); and
(4) by inserting after the subpart heading (as added by
paragraph (1)) the following:
``(a) Prohibiting Discriminatory Premium Rates.--
``(1) In general.--With respect to the premium rate charged by
a health insurance issuer for health insurance coverage offered in
the individual or small group market--
``(A) such rate shall vary with respect to the particular
plan or coverage involved only by--
``(i) whether such plan or coverage covers an
individual or family;
``(ii) rating area, as established in accordance with
paragraph (2);
``(iii) age, except that such rate shall not vary by
more than 3 to 1 for adults (consistent with section
2707(c)); and
``(iv) tobacco use, except that such rate shall not
vary by more than 1.5 to 1; and
``(B) such rate shall not vary with respect to the
particular plan or coverage involved by any other factor not
described in subparagraph (A).
``(2) Rating area.--
``(A) In general.--Each State shall establish 1 or more
rating areas within that State for purposes of applying the
requirements of this title.
``(B) Secretarial review.--The Secretary shall review the
rating areas established by each State under subparagraph (A)
to ensure the adequacy of such areas for purposes of carrying
out the requirements of this title. If the Secretary determines
a State's rating areas are not adequate, or that a State does
not establish such areas, the Secretary may establish rating
areas for that State.
``(3) Permissible age bands.--The Secretary, in consultation
with the National Association of Insurance Commissioners, shall
define the permissible age bands for rating purposes under
paragraph (1)(A)(iii).
``(4) Application of variations based on age or tobacco use.--
With respect to family coverage under a group health plan or health
insurance coverage, the rating variations permitted under clauses
(iii) and (iv) of paragraph (1)(A) shall be applied based on the
portion of the premium that is attributable to each family member
covered under the plan or coverage.
``(5) Special rule for large group market.--If a State permits
health insurance issuers that offer coverage in the large group
market in the State to offer such coverage through the State
Exchange (as provided for under section 1312(f)(2)(B) of the
Patient Protection and Affordable Care Act), the provisions of this
subsection shall apply to all coverage offered in such market in
the State.
``(a) Guaranteed Issuance of Coverage in the Individual and Group
Market.--Subject to subsections (b) through (e), each health insurance
issuer that offers health insurance coverage in the individual or group
market in a State must accept every employer and individual in the
State that applies for such coverage.
``(b) Enrollment.--
``(1) Restriction.--A health insurance issuer described in
subsection (a) may restrict enrollment in coverage described in
such subsection to open or special enrollment periods.
``(2) Establishment.--A health insurance issuer described in
subsection (a) shall, in accordance with the regulations
promulgated under paragraph (3), establish special enrollment
periods for qualifying events (under section 603 of the Employee
Retirement Income Security Act of 1974).
``(3) Regulations.--The Secretary shall promulgate regulations
with respect to enrollment periods under paragraphs (1) and (2).
``(a) In General.--Except as provided in this section, if a health
insurance issuer offers health insurance coverage in the individual or
group market, the issuer must renew or continue in force such coverage
at the option of the plan sponsor or the individual, as applicable.
``SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS
AND BENEFICIARIES BASED ON HEALTH STATUS.
establish rules for eligibility (including continued eligibility) of
any individual to enroll under the terms of the plan or coverage based
on any of the following health status-related factors in relation to
the individual or a dependent of the individual:
``(1) Health status.
``(2) Medical condition (including both physical and mental
illnesses).
``(3) Claims experience.
``(4) Receipt of health care.
``(5) Medical history.
``(6) Genetic information.
``(7) Evidence of insurability (including conditions arising
out of acts of domestic violence).
``(8) Disability.
``(9) Any other health status-related factor determined
appropriate by the Secretary.
``(j) Programs of Health Promotion or Disease Prevention.--
``(1) General provisions.--
``(A) General rule.--For purposes of subsection (b)(2)(B),
a program of health promotion or disease prevention (referred
to in this subsection as a `wellness program') shall be a
program offered by an employer that is designed to promote
health or prevent disease that meets the applicable
requirements of this subsection.
``(B) No conditions based on health status factor.--If none
of the conditions for obtaining a premium discount or rebate or
other reward for participation in a wellness program is based
on an individual satisfying a standard that is related to a
health status factor, such wellness program shall not violate
this section if participation in the program is made available
to all similarly situated individuals and the requirements of
paragraph (2) are complied with.
``(C) Conditions based on health status factor.--If any of
the conditions for obtaining a premium discount or rebate or
this section if the requirements of paragraph (3) are complied
``(2) Wellness programs not subject to requirements.--If none
other reward under a wellness program as described in paragraph
(1)(B) are based on an individual satisfying a standard that is
related to a health status factor (or if such a wellness program
does not provide such a reward), the wellness program shall not
violate this section if participation in the program is made
available to all similarly situated individuals. The following
programs shall not have to comply with the requirements of
paragraph (3) if participation in the program is made available to
all similarly situated individuals:
``(A) A program that reimburses all or part of the cost for
memberships in a fitness center.
``(B) A diagnostic testing program that provides a reward
for participation and does not base any part of the reward on
outcomes.
``(C) A program that encourages preventive care related to
a health condition through the waiver of the copayment or
deductible requirement under group health plan for the costs of
certain items or services related to a health condition (such
as prenatal care or well-baby visits).
``(D) A program that reimburses individuals for the costs
of smoking cessation programs without regard to whether the
individual quits smoking.
``(E) A program that provides a reward to individuals for
attending a periodic health education seminar.
``(3) Wellness programs subject to requirements.--If any of the
conditions for obtaining a premium discount, rebate, or reward
under a wellness program as described in paragraph (1)(C) is based
on an individual satisfying a standard that is related to a health
status factor, the wellness program shall not violate this section
if the following requirements are complied with:
``(A) The reward for the wellness program, together with
the reward for other wellness programs with respect to the plan
that requires satisfaction of a standard related to a health
status factor, shall not exceed 30 percent of the cost of
employee-only coverage under the plan. If, in addition to
employees or individuals, any class of dependents (such as
spouses or spouses and dependent children) may participate
fully in the wellness program, such reward shall not exceed 30
percent of the cost of the coverage in which an employee or
individual and any dependents are enrolled. For purposes of
this paragraph, the cost of coverage shall be determined based
on the total amount of employer and employee contributions for
the benefit package under which the employee is (or the
employee and any dependents are) receiving coverage. A reward
may be in the form of a discount or rebate of a premium or
contribution, a waiver of all or part of a cost-sharing
mechanism (such as deductibles, copayments, or coinsurance),
the absence of a surcharge, or the value of a benefit that
would otherwise not be provided under the plan. The Secretaries
of Labor, Health and Human Services, and the Treasury may
increase the reward available under this subparagraph to up to
50 percent of the cost of coverage if the Secretaries determine
that such an increase is appropriate.
``(B) The wellness program shall be reasonably designed to
promote health or prevent disease. A program complies with the
preceding sentence if the program has a reasonable chance of
improving the health of, or preventing disease in,
participating individuals and it is not overly burdensome, is
not a subterfuge for discriminating based on a health status
factor, and is not highly suspect in the method chosen to
promote health or prevent disease.
``(C) The plan shall give individuals eligible for the
program the opportunity to qualify for the reward under the
program at least once each year.
``(D) The full reward under the wellness program shall be
made available to all similarly situated individuals. For such
purpose, among other things:
``(i) The reward is not available to all similarly
situated individuals for a period unless the wellness
program allows--
``(I) for a reasonable alternative standard (or
waiver of the otherwise applicable standard) for
obtaining the reward for any individual for whom, for
that period, it is unreasonably difficult due to a
medical condition to satisfy the otherwise applicable
standard; and
``(II) for a reasonable alternative standard (or
that period, it is medically inadvisable to attempt to
satisfy the otherwise applicable standard.
``(ii) If reasonable under the circumstances, the plan
or issuer may seek verification, such as a statement from
an individual's physician, that a health status factor
makes it unreasonably difficult or medically inadvisable
for the individual to satisfy or attempt to satisfy the
otherwise applicable standard.
``(E) The plan or issuer involved shall disclose in all
plan materials describing the terms of the wellness program the
availability of a reasonable alternative standard (or the
possibility of waiver of the otherwise applicable standard)
required under subparagraph (D). If plan materials disclose
that such a program is available, without describing its terms,
the disclosure under this subparagraph shall not be required.
``(k) Existing Programs.--Nothing in this section shall prohibit a
program of health promotion or disease prevention that was established
prior to the date of enactment of this section and applied with all
applicable regulations, and that is operating on such date, from
continuing to be carried out for as long as such regulations remain in
``(l) Wellness Program Demonstration Project.--
``(1) In general.--Not later than July 1, 2014, the Secretary,
in consultation with the Secretary of the Treasury and the
Secretary of Labor, shall establish a 10-State demonstration
project under which participating States shall apply the provisions
of subsection (j) to programs of health promotion offered by a
health insurance issuer that offers health insurance coverage in
the individual market in such State.
``(2) Expansion of demonstration project.--If the Secretary, in
consultation with the Secretary of the Treasury and the Secretary
of Labor, determines that the demonstration project described in
paragraph (1) is effective, such Secretaries may, beginning on July
1, 2017 expand such demonstration project to include additional
participating States.
``(3) Requirements.--
``(A) Maintenance of coverage.--The Secretary, in
consultation with the Secretary of the Treasury and the
Secretary of Labor, shall not approve the participation of a
State in the demonstration project under this section unless
the Secretaries determine that the State's project is designed
in a manner that--
``(i) will not result in any decrease in coverage; and
``(ii) will not increase the cost to the Federal
Government in providing credits under section 36B of the
Internal Revenue Code of 1986 or cost-sharing assistance
under section 1402 of the Patient Protection and Affordable
Care Act.
``(B) Other requirements.--States that participate in the
demonstration project under this subsection--
``(i) may permit premium discounts or rebates or the
modification of otherwise applicable copayments or
deductibles for adherence to, or participation in, a
reasonably designed program of health promotion and disease
prevention;
``(ii) shall ensure that requirements of consumer
protection are met in programs of health promotion in the
individual market;
``(iii) shall require verification from health
insurance issuers that offer health insurance coverage in
the individual market of such State that premium
discounts--
``(I) do not create undue burdens for individuals
insured in the individual market;
``(II) do not lead to cost shifting; and
``(III) are not a subterfuge for discrimination;
``(iv) shall ensure that consumer data is protected in
accordance with the requirements of section 264(c) of the
Health Insurance Portability and Accountability Act of 1996
(42 U.S.C. 1320d-2 note); and
``(v) shall ensure and demonstrate to the satisfaction
of the Secretary that the discounts or other rewards
provided under the project reflect the expected level of
participation in the wellness program involved and the
anticipated effect the program will have on utilization or
medical claim costs.
``(m) Report.--
Secretary, in consultation with the Secretary of the Treasury and
the Secretary of Labor, shall submit a report to the appropriate
committees of Congress concerning--
``(A) the effectiveness of wellness programs (as defined in
subsection (j)) in promoting health and preventing disease;
``(B) the impact of such wellness programs on the access to
care and affordability of coverage for participants and non-
participants of such programs;
``(C) the impact of premium-based and cost-sharing
incentives on participant behavior and the role of such
programs in changing behavior; and
``(D) the effectiveness of different types of rewards.
``(2) Data collection.--In preparing the report described in
paragraph (1), the Secretaries shall gather relevant information
from employers who provide employees with access to wellness
programs, including State and Federal agencies.
``(n) Regulations.--Nothing in this section shall be construed as
prohibiting the Secretaries of Labor, Health and Human Services, or the
Treasury from promulgating regulations in connection with this section.
``(a) Providers.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage shall not
discriminate with respect to participation under the plan or coverage
against any health care provider who is acting within the scope of that
provider's license or certification under applicable State law. This
section shall not require that a group health plan or health insurance
issuer contract with any health care provider willing to abide by the
terms and conditions for participation established by the plan or
issuer. Nothing in this section shall be construed as preventing a
group health plan, a health insurance issuer, or the Secretary from
establishing varying reimbursement rates based on quality or
performance measures.
``(b) Individuals.--The provisions of section 1558 of the Patient
Protection and Affordable Care Act (relating to non-discrimination)
shall apply with respect to a group health plan or health insurance
issuer offering group or individual health insurance coverage.
``(a) Coverage for Essential Health Benefits Package.--A health
insurance issuer that offers health insurance coverage in the
individual or small group market shall ensure that such coverage
includes the essential health benefits package required under section
1302(a) of the Patient Protection and Affordable Care Act.
``(b) Cost-sharing Under Group Health Plans.--A group health plan
shall ensure that any annual cost-sharing imposed under the plan does
not exceed the limitations provided for under paragraphs (1) and (2) of
section 1302(c).
``(c) Child-only Plans.--If a health insurance issuer offers health
insurance coverage in any level of coverage specified under section
1302(d) of the Patient Protection and Affordable Care Act, the issuer
shall also offer such coverage in that level as a plan in which the
only enrollees are individuals who, as of the beginning of a plan year,
have not attained the age of 21.
``(d) Dental Only.--This section shall not apply to a plan
described in section 1302(d)(2)(B)(ii)(I).
or individual health insurance coverage shall not apply any waiting
period (as defined in section 2704(b)(4)) that exceeds 90 days.''.
(a) No Changes to Existing Coverage.--
(1) In general.--Nothing in this Act (or an amendment made by
this Act) shall be construed to require that an individual
terminate coverage under a group health plan or health insurance
coverage in which such individual was enrolled on the date of
enactment of this Act.
(2) Continuation of coverage.--With respect to a group health
plan or health insurance coverage in which an individual was
enrolled on the date of enactment of this Act, this subtitle and
subtitle A (and the amendments made by such subtitles) shall not
apply to such plan or coverage, regardless of whether the
individual renews such coverage after such date of enactment.
(b) Allowance for Family Members To Join Current Coverage.--With
respect to a group health plan or health insurance coverage in which an
individual was enrolled on the date of enactment of this Act and which
is renewed after such date, family members of such individual shall be
permitted to enroll in such plan or coverage if such enrollment is
permitted under the terms of the plan in effect as of such date of
enactment.
(c) Allowance for New Employees To Join Current Plan.--A group
health plan that provides coverage on the date of enactment of this Act
may provide for the enrolling of new employees (and their families) in
such plan, and this subtitle and subtitle A (and the amendments made by
such subtitles) shall not apply with respect to such plan and such new
employees (and their families).
(d) Effect on Collective Bargaining Agreements.--In the case of
health insurance coverage maintained pursuant to one or more collective
bargaining agreements between employee representatives and one or more
employers that was ratified before the date of enactment of this Act,
the provisions of this subtitle and subtitle A (and the amendments made
by such subtitles) shall not apply until the date on which the last of
the collective bargaining agreements relating to the coverage
terminates. Any coverage amendment made pursuant to a collective
bargaining agreement relating to the coverage which amends the coverage
solely to conform to any requirement added by this subtitle or subtitle
A (or amendments) shall not be treated as a termination of such
collective bargaining agreement.
(e) Definition.--In this title, the term ``grandfathered health
plan'' means any group health plan or health insurance coverage to
which this section applies.
Any standard or requirement adopted by a State pursuant to this
title, or any amendment made by this title, shall be applied uniformly
to all health plans in each insurance market to which the standard and
requirements apply. The preceding sentence shall also apply to a State
standard or requirement relating to the standard or requirement
required by this title (or any such amendment) that is not the same as
the standard or requirement but that is not preempted under section
1321(d).
This subtitle (and the amendments made by this subtitle) shall
become effective for plan years beginning on or after January 1, 2014.
(a) Qualified Health Plan.--In this title:
(1) In general.--The term ``qualified health plan'' means a
health plan that--
(A) has in effect a certification (which may include a seal
or other indication of approval) that such plan meets the
criteria for certification described in section 1311(c) issued
or recognized by each Exchange through which such plan is
offered;
(B) provides the essential health benefits package
described in section 1302(a); and
(C) is offered by a health insurance issuer that--
(i) is licensed and in good standing to offer health
insurance coverage in each State in which such issuer
offers health insurance coverage under this title;
(ii) agrees to offer at least one qualified health plan
in the silver level and at least one plan in the gold level
in each such Exchange;
(iii) agrees to charge the same premium rate for each
qualified health plan of the issuer without regard to
whether the plan is offered through an Exchange or whether
the plan is offered directly from the issuer or through an
agent; and
(iv) complies with the regulations developed by the
Secretary under section 1311(d) and such other requirements
as an applicable Exchange may establish.
(2) Inclusion of co-op plans and community health insurance
option.--Any reference in this title to a qualified health plan
shall be deemed to include a qualified health plan offered through
the CO-OP program under section 1322 or a community health
insurance option under section 1323, unless specifically provided
for otherwise.
(b) Terms Relating to Health Plans.--In this title:
(1) Health plan.--
(A) In general.--The term ``health plan'' means health
insurance coverage and a group health plan.
(B) Exception for self-insured plans and mewas.--Except to
the extent specifically provided by this title, the term
``health plan'' shall not include a group health plan or
multiple employer welfare arrangement to the extent the plan or
arrangement is not subject to State insurance regulation under
section 514 of the Employee Retirement Income Security Act of
(2) Health insurance coverage and issuer.--The terms ``health
insurance coverage'' and ``health insurance issuer'' have the
meanings given such terms by section 2791(b) of the Public Health
Service Act.
(3) Group health plan.--The term ``group health plan'' has the
meaning given such term by section 2791(a) of the Public Health
(a) Essential Health Benefits Package.--In this title, the term
``essential health benefits package'' means, with respect to any health
plan, coverage that--
(1) provides for the essential health benefits defined by the
Secretary under subsection (b);
(2) limits cost-sharing for such coverage in accordance with
subsection (c); and
(3) subject to subsection (e), provides either the bronze,
silver, gold, or platinum level of coverage described in subsection
(d).
(b) Essential Health Benefits.--
(1) In general.--Subject to paragraph (2), the Secretary shall
define the essential health benefits, except that such benefits
shall include at least the following general categories and the
items and services covered within the categories:
(A) Ambulatory patient services.
(B) Emergency services.
(C) Hospitalization.
(D) Maternity and newborn care.
(E) Mental health and substance use disorder services,
including behavioral health treatment.
(F) Prescription drugs.
(G) Rehabilitative and habilitative services and devices.
(H) Laboratory services.
(I) Preventive and wellness services and chronic disease
(J) Pediatric services, including oral and vision care.
(2) Limitation.--
(A) In general.--The Secretary shall ensure that the scope
of the essential health benefits under paragraph (1) is equal
to the scope of benefits provided under a typical employer
plan, as determined by the Secretary. To inform this
determination, the Secretary of Labor shall conduct a survey of
employer-sponsored coverage to determine the benefits typically
covered by employers, including multiemployer plans, and
provide a report on such survey to the Secretary.
(B) Certification.--In defining the essential health
benefits described in paragraph (1), and in revising the
benefits under paragraph (4)(H), the Secretary shall submit a
report to the appropriate committees of Congress containing a
certification from the Chief Actuary of the Centers for
Medicare & Medicaid Services that such essential health
benefits meet the limitation described in paragraph (2).
(3) Notice and hearing.--In defining the essential health
benefits described in paragraph (1), and in revising the benefits
under paragraph (4)(H), the Secretary shall provide notice and an
opportunity for public comment.
(4) Required elements for consideration.--In defining the
essential health benefits under paragraph (1), the Secretary
shall--
(A) ensure that such essential health benefits reflect an
appropriate balance among the categories described in such
subsection, so that benefits are not unduly weighted toward any
category;
(B) not make coverage decisions, determine reimbursement
rates, establish incentive programs, or design benefits in ways
that discriminate against individuals because of their age,
disability, or expected length of life;
(C) take into account the health care needs of diverse
segments of the population, including women, children, persons
with disabilities, and other groups;
(D) ensure that health benefits established as essential
not be subject to denial to individuals against their wishes on
the basis of the individuals' age or expected length of life or
of the individuals' present or predicted disability, degree of
medical dependency, or quality of life;
(E) provide that a qualified health plan shall not be
treated as providing coverage for the essential health benefits
described in paragraph (1) unless the plan provides that--
(i) coverage for emergency department services will be
provided without imposing any requirement under the plan
for prior authorization of services or any limitation on
coverage where the provider of services does not have a
contractual relationship with the plan for the providing of
services that is more restrictive than the requirements or
limitations that apply to emergency department services
received from providers who do have such a contractual
relationship with the plan; and
(ii) if such services are provided out-of-network, the
cost-sharing requirement (expressed as a copayment amount
or coinsurance rate) is the same requirement that would
apply if such services were provided in-network;
(F) provide that if a plan described in section
1311(b)(2)(B)(ii) (relating to stand-alone dental benefits
plans) is offered through an Exchange, another health plan
offered through such Exchange shall not fail to be treated as a
qualified health plan solely because the plan does not offer
coverage of benefits offered through the stand-alone plan that
are otherwise required under paragraph (1)(J); and
(G) periodically review the essential health benefits under
paragraph (1), and provide a report to Congress and the public
that contains--
(i) an assessment of whether enrollees are facing any
difficulty accessing needed services for reasons of
coverage or cost;
(ii) an assessment of whether the essential health
benefits needs to be modified or updated to account for
changes in medical evidence or scientific advancement;
(iii) information on how the essential health benefits
will be modified to address any such gaps in access or
changes in the evidence base;
(iv) an assessment of the potential of additional or
expanded benefits to increase costs and the interactions
between the addition or expansion of benefits and
reductions in existing benefits to meet actuarial
limitations described in paragraph (2); and
(H) periodically update the essential health benefits under
paragraph (1) to address any gaps in access to coverage or
changes in the evidence base the Secretary identifies in the
review conducted under subparagraph (G).
(5) Rule of construction.--Nothing in this title shall be
construed to prohibit a health plan from providing benefits in
excess of the essential health benefits described in this
subsection.
(c) Requirements Relating to Cost-Sharing.--
(1) Annual limitation on cost-sharing.--
(A) 2014.--The cost-sharing incurred under a health plan
with respect to self-only coverage or coverage other than self-
only coverage for a plan year beginning in 2014 shall not
exceed the dollar amounts in effect under section
223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-
only and family coverage, respectively, for taxable years
beginning in 2014.
(B) 2015 and later.--In the case of any plan year beginning
in a calendar year after 2014, the limitation under this
paragraph shall--
(i) in the case of self-only coverage, be equal to the
dollar amount under subparagraph (A) for self-only coverage
for plan years beginning in 2014, increased by an amount
equal to the product of that amount and the premium
adjustment percentage under paragraph (4) for the calendar
year; and
(ii) in the case of other coverage, twice the amount in
effect under clause (i).
If the amount of any increase under clause (i) is not a
multiple of $50, such increase shall be rounded to the next
lowest multiple of $50.
(2) Annual limitation on deductibles for employer-sponsored
plans.--
(A) In general.--In the case of a health plan offered in
the small group market, the deductible under the plan shall not
exceed--
(i) $2,000 in the case of a plan covering a single
individual; and
(ii) $4,000 in the case of any other plan.
The amounts under clauses (i) and (ii) may be increased by the
maximum amount of reimbursement which is reasonably available
to a participant under a flexible spending arrangement
described in section 106(c)(2) of the Internal Revenue Code of
1986 (determined without regard to any salary reduction
arrangement).
(B) Indexing of limits.--In the case of any plan year
beginning in a calendar year after 2014--
(i) the dollar amount under subparagraph (A)(i) shall
be increased by an amount equal to the product of that
amount and the premium adjustment percentage under
paragraph (4) for the calendar year; and
(ii) the dollar amount under subparagraph (A)(ii) shall
be increased to an amount equal to twice the amount in
effect under subparagraph (A)(i) for plan years beginning
in the calendar year, determined after application of
clause (i).
(C) Actuarial value.--The limitation under this paragraph
shall be applied in such a manner so as to not affect the
actuarial value of any health plan, including a plan in the
bronze level.
(D) Coordination with preventive limits.--Nothing in this
paragraph shall be construed to allow a plan to have a
deductible under the plan apply to benefits described in
section 2713 of the Public Health Service Act.
(3) Cost-sharing.--In this title--
(A) In general.--The term ``cost-sharing'' includes--
(i) deductibles, coinsurance, copayments, or similar
charges; and
(ii) any other expenditure required of an insured
individual which is a qualified medical expense (within the
meaning of section 223(d)(2) of the Internal Revenue Code
of 1986) with respect to essential health benefits covered
under the plan.
(B) Exceptions.--Such term does not include premiums,
balance billing amounts for non-network providers, or spending
for non-covered services.
(4) Premium adjustment percentage.--For purposes of paragraphs
(1)(B)(i) and (2)(B)(i), the premium adjustment percentage for any
calendar year is the percentage (if any) by which the average per
capita premium for health insurance coverage in the United States
for the preceding calendar year (as estimated by the Secretary no
later than October 1 of such preceding calendar year) exceeds such
average per capita premium for 2013 (as determined by the
Secretary).
(d) Levels of Coverage.--
(1) Levels of coverage defined.--The levels of coverage
described in this subsection are as follows:
(A) Bronze level.--A plan in the bronze level shall provide
a level of coverage that is designed to provide benefits that
are actuarially equivalent to 60 percent of the full actuarial
value of the benefits provided under the plan.
(B) Silver level.--A plan in the silver level shall provide
(C) Gold level.--A plan in the gold level shall provide a
level of coverage that is designed to provide benefits that are
actuarially equivalent to 80 percent of the full actuarial
(D) Platinum level.--A plan in the platinum level shall
provide a level of coverage that is designed to provide
benefits that are actuarially equivalent to 90 percent of the
full actuarial value of the benefits provided under the plan.
(2) Actuarial value.--
(A) In general.--Under regulations issued by the Secretary,
the level of coverage of a plan shall be determined on the
basis that the essential health benefits described in
subsection (b) shall be provided to a standard population (and
without regard to the population the plan may actually provide
benefits to).
(B) Employer contributions.--The Secretary may issue
regulations under which employer contributions to a health
savings account (within the meaning of section 223 of the
Internal Revenue Code of 1986) may be taken into account in
determining the level of coverage for a plan of the employer.
(C) Application.--In determining under this title, the
Public Health Service Act, or the Internal Revenue Code of 1986
the percentage of the total allowed costs of benefits provided
under a group health plan or health insurance coverage that are
provided by such plan or coverage, the rules contained in the
regulations under this paragraph shall apply.
(3) Allowable variance.--The Secretary shall develop guidelines
to provide for a de minimis variation in the actuarial valuations
used in determining the level of coverage of a plan to account for
differences in actuarial estimates.
(4) Plan reference.--In this title, any reference to a bronze,
silver, gold, or platinum plan shall be treated as a reference to a
qualified health plan providing a bronze, silver, gold, or platinum
level of coverage, as the case may be.
(e) Catastrophic Plan.--
(1) In general.--A health plan not providing a bronze, silver,
gold, or platinum level of coverage shall be treated as meeting the
requirements of subsection (d) with respect to any plan year if--
(A) the only individuals who are eligible to enroll in the
plan are individuals described in paragraph (2); and
(B) the plan provides--
(i) except as provided in clause (ii), the essential
health benefits determined under subsection (b), except
that the plan provides no benefits for any plan year until
the individual has incurred cost-sharing expenses in an
amount equal to the annual limitation in effect under
subsection (c)(1) for the plan year (except as provided for
in section 2713); and
(ii) coverage for at least three primary care visits.
(2) Individuals eligible for enrollment.--An individual is
described in this paragraph for any plan year if the individual--
(A) has not attained the age of 30 before the beginning of
the plan year; or
(B) has a certification in effect for any plan year under
this title that the individual is exempt from the requirement
under section 5000A of the Internal Revenue Code of 1986 by
reason of--
(i) section 5000A(e)(1) of such Code (relating to
individuals without affordable coverage); or
(ii) section 5000A(e)(5) of such Code (relating to
individuals with hardships).
(3) Restriction to individual market.--If a health insurance
issuer offers a health plan described in this subsection, the
issuer may only offer the plan in the individual market.
(f) Child-only Plans.--If a qualified health plan is offered
through the Exchange in any level of coverage specified under
subsection (d), the issuer shall also offer that plan through the
Exchange in that level as a plan in which the only enrollees are
individuals who, as of the beginning of a plan year, have not attained
the age of 21, and such plan shall be treated as a qualified health
(a) Special Rules Relating to Coverage of Abortion Services.--
(1) Voluntary choice of coverage of abortion services.--
(A) In general.--Notwithstanding any other provision of
this title (or any amendment made by this title), and subject
to subparagraphs (C) and (D)--
(i) nothing in this title (or any amendment made by
this title), shall be construed to require a qualified
health plan to provide coverage of services described in
subparagraph (B)(i) or (B)(ii) as part of its essential
health benefits for any plan year; and
(ii) the issuer of a qualified health plan shall
determine whether or not the plan provides coverage of
services described in subparagraph (B)(i) or (B)(ii) as
part of such benefits for the plan year.
(B) Abortion services.--
(i) Abortions for which public funding is prohibited.--
The services described in this clause are abortions for
which the expenditure of Federal funds appropriated for the
Department of Health and Human Services is not permitted,
based on the law as in effect as of the date that is 6
months before the beginning of the plan year involved.
(ii) Abortions for which public funding is allowed.--
Department of Health and Human Services is permitted, based
on the law as in effect as of the date that is 6 months
before the beginning of the plan year involved.
(C) Prohibition on federal funds for abortion services in
community health insurance option.--
(i) Determination by secretary.--The Secretary may not
determine, in accordance with subparagraph (A)(ii), that
the community health insurance option established under
section 1323 shall provide coverage of services described
in subparagraph (B)(i) as part of benefits for the plan
year unless the Secretary--
(I) assures compliance with the requirements of
(II) assures, in accordance with applicable
provisions of generally accepted accounting
requirements, circulars on funds management of the
Office of Management and Budget, and guidance on
accounting of the Government Accountability Office,
that no Federal funds are used for such coverage; and
(III) notwithstanding section 1323(e)(1)(C) or any
other provision of this title, takes all necessary
steps to assure that the United States does not bear
the insurance risk for a community health insurance
option's coverage of services described in subparagraph
(B)(i).
(ii) State requirement.--If a State requires, in
addition to the essential health benefits required under
section 1323(b)(3) (A), coverage of services described in
subparagraph (B)(i) for enrollees of a community health
insurance option offered in such State, the State shall
assure that no funds flowing through or from the community
health insurance option, and no other Federal funds, pay or
defray the cost of providing coverage of services described
in subparagraph (B)(i). The United States shall not bear
the insurance risk for a State's required coverage of
services described in subparagraph (B)(i).
(iii) Exceptions.--Nothing in this subparagraph shall
apply to coverage of services described in subparagraph
(B)(ii) by the community health insurance option. Services
described in subparagraph (B)(ii) shall be covered to the
same extent as such services are covered under title XIX of
the Social Security Act.
(D) Assured availability of varied coverage through
exchanges.--
(i) In general.--The Secretary shall assure that with
respect to qualified health plans offered in any Exchange
established pursuant to this title--
(I) there is at least one such plan that provides
coverage of services described in clauses (i) and (ii)
of subparagraph (B); and
(II) there is at least one such plan that does not
provide coverage of services described in subparagraph
(ii) Special rules.--For purposes of clause (i)--
(I) a plan shall be treated as described in clause
(i)(II) if the plan does not provide coverage of
services described in either subparagraph (B)(i) or
(B)(ii); and
(II) if a State has one Exchange covering more than
1 insurance market, the Secretary shall meet the
requirements of clause (i) separately with respect to
each such market.
(2) Prohibition on the use of federal funds.--
(A) In general.--If a qualified health plan provides
coverage of services described in paragraph (1)(B)(i), the
issuer of the plan shall not use any amount attributable to any
of the following for purposes of paying for such services:
(i) The credit under section 36B of the Internal
Revenue Code of 1986 (and the amount (if any) of the
advance payment of the credit under section 1412 of the
Patient Protection and Affordable Care Act).
(ii) Any cost-sharing reduction under section 1402 of
thePatient Protection and Affordable Care Act (and the
amount (if any) of the advance payment of the reduction
Care Act).
(B) Segregation of funds.--In the case of a plan to which
subparagraph (A) applies, the issuer of the plan shall, out of
amounts not described in subparagraph (A), segregate an amount
equal to the actuarial amounts determined under subparagraph
(C) for all enrollees from the amounts described in
subparagraph (A).
(C) Actuarial value of optional service coverage.--
(i) In general.--The Secretary shall estimate the basic
per enrollee, per month cost, determined on an average
actuarial basis, for including coverage under a qualified
health plan of the services described in paragraph
(1)(B)(i).
(ii) Considerations.--In making such estimate, the
Secretary--
(I) may take into account the impact on overall
costs of the inclusion of such coverage, but may not
take into account any cost reduction estimated to
result from such services, including prenatal care,
delivery, or postnatal care;
(II) shall estimate such costs as if such coverage
were included for the entire population covered; and
(III) may not estimate such a cost at less than $1
per enrollee, per month.
(3) Provider conscience protections.--No individual health care
provider or health care facility may be discriminated against
because of a willingness or an unwillingness, if doing so is
contrary to the religious or moral beliefs of the provider or
facility, to provide, pay for, provide coverage of, or refer for
abortions.
(b) Application of State and Federal Laws Regarding Abortion.--
(1) No preemption of state laws regarding abortion.--Nothing in
this Act shall be construed to preempt or otherwise have any effect
on State laws regarding the prohibition of (or requirement of)
coverage, funding, or procedural requirements on abortions,
including parental notification or consent for the performance of
an abortion on a minor.
(2) No effect on federal laws regarding abortion.--
(A) In general.--Nothing in this Act shall be construed to
have any effect on Federal laws regarding--
(i) conscience protection;
(ii) willingness or refusal to provide abortion; and
(iii) discrimination on the basis of the willingness or
refusal to provide, pay for, cover, or refer for abortion
or to provide or participate in training to provide
(3) No effect on federal civil rights law.--Nothing in this
subsection shall alter the rights and obligations of employees and
employers under title VII of the Civil Rights Act of 1964.
(c) Application of Emergency Services Laws.--Nothing in this Act
shall be construed to relieve any health care provider from providing
emergency services as required by State or Federal law, including
section 1867 of the Social Security Act (popularly known as
``EMTALA'').
(a) Definitions Relating to Markets.--In this title:
(1) Group market.--The term ``group market'' means the health
insurance market under which individuals obtain health insurance
coverage (directly or through any arrangement) on behalf of
themselves (and their dependents) through a group health plan
maintained by an employer.
(2) Individual market.--The term ``individual market'' means
the market for health insurance coverage offered to individuals
other than in connection with a group health plan.
(3) Large and small group markets.--The terms ``large group
market'' and ``small group market'' mean the health insurance
market under which individuals obtain health insurance coverage
(directly or through any arrangement) on behalf of themselves (and
their dependents) through a group health plan maintained by a large
employer (as defined in subsection (b)(1)) or by a small employer
(as defined in subsection (b)(2)), respectively.
(b) Employers.--In this title:
(1) Large employer.--The term ``large employer'' means, in
connection with a group health plan with respect to a calendar year
and a plan year, an employer who employed an average of at least
101 employees on business days during the preceding calendar year
and who employs at least 1 employee on the first day of the plan
(2) Small employer.--The term ``small employer'' means, in
and a plan year, an employer who employed an average of at least 1
but not more than 100 employees on business days during the
preceding calendar year and who employs at least 1 employee on the
first day of the plan year.
(3) State option to treat 50 employees as small.--In the case
of plan years beginning before January 1, 2016, a State may elect
to apply this subsection by substituting ``51 employees'' for ``101
employees'' in paragraph (1) and by substituting ``50 employees''
for ``100 employees'' in paragraph (2).
(4) Rules for determining employer size.--For purposes of this
subsection--
(A) Application of aggregation rule for employers.--All
persons treated as a single employer under subsection (b), (c),
(m), or (o) of section 414 of the Internal Revenue Code of 1986
shall be treated as 1 employer.
(B) Employers not in existence in preceding year.--In the
case of an employer which was not in existence throughout the
preceding calendar year, the determination of whether such
employer is a small or large employer shall be based on the
average number of employees that it is reasonably expected such
employer will employ on business days in the current calendar
(C) Predecessors.--Any reference in this subsection to an
employer shall include a reference to any predecessor of such
employer.
(D) Continuation of participation for growing small
employers.--If--
(i) a qualified employer that is a small employer makes
enrollment in qualified health plans offered in the small
group market available to its employees through an
Exchange; and
(ii) the employer ceases to be a small employer by
reason of an increase in the number of employees of such
employer;
the employer shall continue to be treated as a small employer
for purposes of this subtitle for the period beginning with the
increase and ending with the first day on which the employer
does not make such enrollment available to its employees.
(c) Secretary.--In this title, the term ``Secretary'' means the
Secretary of Health and Human Services.
(d) State.--In this title, the term ``State'' means each of the 50
States and the District of Columbia.
(a) Assistance to States to Establish American Health Benefit
(1) Planning and establishment grants.--There shall be
appropriated to the Secretary, out of any moneys in the Treasury
not otherwise appropriated, an amount necessary to enable the
Secretary to make awards, not later than 1 year after the date of
enactment of this Act, to States in the amount specified in
paragraph (2) for the uses described in paragraph (3).
(2) Amount specified.--For each fiscal year, the Secretary
shall determine the total amount that the Secretary will make
available to each State for grants under this subsection.
(3) Use of funds.--A State shall use amounts awarded under this
subsection for activities (including planning activities) related
to establishing an American Health Benefit Exchange, as described
in subsection (b).
(4) Renewability of grant.--
(A) In general.--Subject to subsection (d)(4), the
Secretary may renew a grant awarded under paragraph (1) if the
State recipient of such grant--
(i) is making progress, as determined by the Secretary,
toward--
(I) establishing an Exchange; and
(II) implementing the reforms described in
subtitles A and C (and the amendments made by such
subtitles); and
(ii) is meeting such other benchmarks as the Secretary
may establish.
(B) Limitation.--No grant shall be awarded under this
subsection after January 1, 2015.
(5) Technical assistance to facilitate participation in shop
exchanges.--The Secretary shall provide technical assistance to
States to facilitate the participation of qualified small
businesses in such States in SHOP Exchanges.
(b) American Health Benefit Exchanges.--
(1) In general.--Each State shall, not later than January 1,
2014, establish an American Health Benefit Exchange (referred to in
this title as an ``Exchange'') for the State that--
(A) facilitates the purchase of qualified health plans;
(B) provides for the establishment of a Small Business
Health Options Program (in this title referred to as a ``SHOP
Exchange'') that is designed to assist qualified employers in
the State who are small employers in facilitating the
enrollment of their employees in qualified health plans offered
in the small group market in the State; and
(C) meets the requirements of subsection (d).
(2) Merger of individual and shop exchanges.--A State may elect
to provide only one Exchange in the State for providing both
Exchange and SHOP Exchange services to both qualified individuals
and qualified small employers, but only if the Exchange has
adequate resources to assist such individuals and employers.
(c) Responsibilities of the Secretary.--
(1) In general.--The Secretary shall, by regulation, establish
criteria for the certification of health plans as qualified health
plans. Such criteria shall require that, to be certified, a plan
shall, at a minimum--
(A) meet marketing requirements, and not employ marketing
practices or benefit designs that have the effect of
discouraging the enrollment in such plan by individuals with
significant health needs;
(B) ensure a sufficient choice of providers (in a manner
consistent with applicable network adequacy provisions under
section 2702(c) of the Public Health Service Act), and provide
information to enrollees and prospective enrollees on the
availability of in-network and out-of-network providers;
(C) include within health insurance plan networks those
essential community providers, where available, that serve
predominately low-income, medically-underserved individuals,
such as health care providers defined in section 340B(a)(4) of
the Public Health Service Act and providers described in
section 1927(c)(1)(D)(i)(IV) of the Social Security Act as set
forth by section 221 of Public Law 111-8, except that nothing
in this subparagraph shall be construed to require any health
plan to provide coverage for any specific medical procedure;
(D)(i) be accredited with respect to local performance on
clinical quality measures such as the Healthcare Effectiveness
Data and Information Set, patient experience ratings on a
standardized Consumer Assessment of Healthcare Providers and
Systems survey, as well as consumer access, utilization
management, quality assurance, provider credentialing,
complaints and appeals, network adequacy and access, and
patient information programs by any entity recognized by the
Secretary for the accreditation of health insurance issuers or
plans (so long as any such entity has transparent and rigorous
methodological and scoring criteria); or
(ii) receive such accreditation within a period established
by an Exchange for such accreditation that is applicable to all
qualified health plans;
(E) implement a quality improvement strategy described in
subsection (g)(1);
(F) utilize a uniform enrollment form that qualified
individuals and qualified employers may use (either
electronically or on paper) in enrolling in qualified health
plans offered through such Exchange, and that takes into
account criteria that the National Association of Insurance
Commissioners develops and submits to the Secretary;
(G) utilize the standard format established for presenting
health benefits plan options; and
(H) provide information to enrollees and prospective
enrollees, and to each Exchange in which the plan is offered,
on any quality measures for health plan performance endorsed
under section 399JJ of the Public Health Service Act, as
(2) Rule of construction.--Nothing in paragraph (1)(C) shall be
construed to require a qualified health plan to contract with a
provider described in such paragraph if such provider refuses to
accept the generally applicable payment rates of such plan.
(3) Rating system.--The Secretary shall develop a rating system
that would rate qualified health plans offered through an Exchange
in each benefits level on the basis of the relative quality and
price. The Exchange shall include the quality rating in the
information provided to individuals and employers through the
Internet portal established under paragraph (4).
(4) Enrollee satisfaction system.--The Secretary shall develop
an enrollee satisfaction survey system that would evaluate the
level of enrollee satisfaction with qualified health plans offered
through an Exchange, for each such qualified health plan that had
more than 500 enrollees in the previous year. The Exchange shall
include enrollee satisfaction information in the information
provided to individuals and employers through the Internet portal
established under paragraph (5) in a manner that allows individuals
to easily compare enrollee satisfaction levels between comparable
(5) Internet portals.--The Secretary shall--
(A) continue to operate, maintain, and update the Internet
portal developed under section 1103(a) and to assist States in
developing and maintaining their own such portal; and
(B) make available for use by Exchanges a model template
for an Internet portal that may be used to direct qualified
individuals and qualified employers to qualified health plans,
to assist such individuals and employers in determining whether
they are eligible to participate in an Exchange or eligible for
a premium tax credit or cost-sharing reduction, and to present
standardized information (including quality ratings) regarding
qualified health plans offered through an Exchange to assist
consumers in making easy health insurance choices.
Such template shall include, with respect to each qualified health
plan offered through the Exchange in each rating area, access to
the uniform outline of coverage the plan is required to provide
under section 2716 of the Public Health Service Act and to a copy
of the plan's written policy.
(6) Enrollment periods.--The Secretary shall require an
Exchange to provide for--
(A) an initial open enrollment, as determined by the
Secretary (such determination to be made not later than July 1,
2012);
(B) annual open enrollment periods, as determined by the
Secretary for calendar years after the initial enrollment
period;
(C) special enrollment periods specified in section 9801 of
the Internal Revenue Code of 1986 and other special enrollment
periods under circumstances similar to such periods under part
D of title XVIII of the Social Security Act; and
(D) special monthly enrollment periods for Indians (as
defined in section 4 of the Indian Health Care Improvement
Act).
(d) Requirements.--
(1) In general.--An Exchange shall be a governmental agency or
nonprofit entity that is established by a State.
(2) Offering of coverage.--
(A) In general.--An Exchange shall make available qualified
health plans to qualified individuals and qualified employers.
(B) Limitation.--
(i) In general.--An Exchange may not make available any
health plan that is not a qualified health plan.
(ii) Offering of stand-alone dental benefits.--Each
Exchange within a State shall allow an issuer of a plan
that only provides limited scope dental benefits meeting
the requirements of section 9832(c)(2)(A) of the Internal
Revenue Code of 1986 to offer the plan through the Exchange
(either separately or in conjunction with a qualified
health plan) if the plan provides pediatric dental benefits
meeting the requirements of section 1302(b)(1)(J)).
(3) Rules relating to additional required benefits.--
(A) In general.--Except as provided in subparagraph (B), an
Exchange may make available a qualified health plan
notwithstanding any provision of law that may require benefits
other than the essential health benefits specified under
section 1302(b).
(B) States may require additional benefits.--
(i) In general.--Subject to the requirements of clause
(ii), a State may require that a qualified health plan
offered in such State offer benefits in addition to the
essential health benefits specified under section 1302(b).
(ii) State must assume cost.--A State shall make
payments to or on behalf of an individual eligible for the
premium tax credit under section 36B of the Internal
Revenue Code of 1986 and any cost-sharing reduction under
section 1402 to defray the cost to the individual of any
additional benefits described in clause (i) which are not
eligible for such credit or reduction under section
36B(b)(3)(D) of such Code and section 1402(c)(4).
(4) Functions.--An Exchange shall, at a minimum--
(A) implement procedures for the certification,
recertification, and decertification, consistent with
guidelines developed by the Secretary under subsection (c), of
health plans as qualified health plans;
(B) provide for the operation of a toll-free telephone
hotline to respond to requests for assistance;
(C) maintain an Internet website through which enrollees
and prospective enrollees of qualified health plans may obtain
standardized comparative information on such plans;
(D) assign a rating to each qualified health plan offered
through such Exchange in accordance with the criteria developed
by the Secretary under subsection (c)(3);
(E) utilize a standardized format for presenting health
benefits plan options in the Exchange, including the use of the
uniform outline of coverage established under section 2715 of
the Public Health Service Act;
(F) in accordance with section 1413, inform individuals of
eligibility requirements for the medicaid program under title
XIX of the Social Security Act, the CHIP program under title
XXI of such Act, or any applicable State or local public
program and if through screening of the application by the
Exchange, the Exchange determines that such individuals are
eligible for any such program, enroll such individuals in such
program;
(G) establish and make available by electronic means a
calculator to determine the actual cost of coverage after the
application of any premium tax credit under section 36B of the
Internal Revenue Code of 1986 and any cost-sharing reduction
under section 1402;
(H) subject to section 1411, grant a certification
attesting that, for purposes of the individual responsibility
penalty under section 5000A of the Internal Revenue Code of
1986, an individual is exempt from the individual requirement
or from the penalty imposed by such section because--
(i) there is no affordable qualified health plan
available through the Exchange, or the individual's
employer, covering the individual; or
(ii) the individual meets the requirements for any
other such exemption from the individual responsibility
requirement or penalty;
(I) transfer to the Secretary of the Treasury--
(i) a list of the individuals who are issued a
certification under subparagraph (H), including the name
and taxpayer identification number of each individual;
(ii) the name and taxpayer identification number of
each individual who was an employee of an employer but who
was determined to be eligible for the premium tax credit
under section 36B of the Internal Revenue Code of 1986
because--
(I) the employer did not provide minimum essential
(II) the employer provided such minimum essential
coverage but it was determined under section
36B(c)(2)(C) of such Code to either be unaffordable to
the employee or not provide the required minimum
actuarial value; and
(iii) the name and taxpayer identification number of
each individual who notifies the Exchange under section
1411(b)(4) that they have changed employers and of each
individual who ceases coverage under a qualified health
plan during a plan year (and the effective date of such
cessation);
(J) provide to each employer the name of each employee of
the employer described in subparagraph (I)(ii) who ceases
coverage under a qualified health plan during a plan year (and
the effective date of such cessation); and
(K) establish the Navigator program described in subsection
(i).
(5) Funding limitations.--
(A) No federal funds for continued operations.--In
establishing an Exchange under this section, the State shall
ensure that such Exchange is self-sustaining beginning on
January 1, 2015, including allowing the Exchange to charge
assessments or user fees to participating health insurance
issuers, or to otherwise generate funding, to support its
(B) Prohibiting wasteful use of funds.--In carrying out
activities under this subsection, an Exchange shall not utilize
any funds intended for the administrative and operational
expenses of the Exchange for staff retreats, promotional
giveaways, excessive executive compensation, or promotion of
Federal or State legislative and regulatory modifications.
(6) Consultation.--An Exchange shall consult with stakeholders
relevant to carrying out the activities under this section,
(A) health care consumers who are enrollees in qualified
health plans;
(B) individuals and entities with experience in
facilitating enrollment in qualified health plans;
(C) representatives of small businesses and self-employed
individuals;
(D) State Medicaid offices; and
(E) advocates for enrolling hard to reach populations.
(7) Publication of costs.--An Exchange shall publish the
average costs of licensing, regulatory fees, and any other payments
required by the Exchange, and the administrative costs of such
Exchange, on an Internet website to educate consumers on such
costs. Such information shall also include monies lost to waste,
fraud, and abuse.
(e) Certification.--
(1) In general.--An Exchange may certify a health plan as a
qualified health plan if--
(A) such health plan meets the requirements for
certification as promulgated by the Secretary under subsection
(c)(1); and
(B) the Exchange determines that making available such
health plan through such Exchange is in the interests of
qualified individuals and qualified employers in the State or
States in which such Exchange operates, except that the
Exchange may not exclude a health plan--
(i) on the basis that such plan is a fee-for-service
plan;
(ii) through the imposition of premium price controls;
(iii) on the basis that the plan provides treatments
necessary to prevent patients' deaths in circumstances the
Exchange determines are inappropriate or too costly.
(2) Premium considerations.--The Exchange shall require health
plans seeking certification as qualified health plans to submit a
justification for any premium increase prior to implementation of
the increase. Such plans shall prominently post such information on
their websites. The Exchange may take this information, and the
information and the recommendations provided to the Exchange by the
State under section 2794(b)(1) of the Public Health Service Act
(relating to patterns or practices of excessive or unjustified
premium increases), into consideration when determining whether to
make such health plan available through the Exchange. The Exchange
shall take into account any excess of premium growth outside the
Exchange, including information reported by the States.
(f) Flexibility.--
(1) Regional or other interstate exchanges.--An Exchange may
operate in more than one State if--
(A) each State in which such Exchange operates permits such
operation; and
(B) the Secretary approves such regional or interstate
(2) Subsidiary exchanges.--A State may establish one or more
subsidiary Exchanges if--
(A) each such Exchange serves a geographically distinct
area; and
(B) the area served by each such Exchange is at least as
large as a rating area described in section 2701(a) of the
Public Health Service Act.
(3) Authority to contract.--
(A) In general.--A State may elect to authorize an Exchange
established by the State under this section to enter into an
agreement with an eligible entity to carry out 1 or more
responsibilities of the Exchange.
(B) Eligible entity.--In this paragraph, the term
``eligible entity'' means--
(i) a person--
(I) incorporated under, and subject to the laws of,
1 or more States;
(II) that has demonstrated experience on a State or
regional basis in the individual and small group health
insurance markets and in benefits coverage; and
(III) that is not a health insurance issuer or that
is treated under subsection (a) or (b) of section 52 of
the Internal Revenue Code of 1986 as a member of the
same controlled group of corporations (or under common
control with) as a health insurance issuer; or
(ii) the State medicaid agency under title XIX of the
Social Security Act.
(g) Rewarding Quality Through Market-Based Incentives.--
(1) Strategy described.--A strategy described in this paragraph
is a payment structure that provides increased reimbursement or
other incentives for--
(A) improving health outcomes through the implementation of
activities that shall include quality reporting, effective case
management, care coordination, chronic disease management,
the use of the medical home model, for treatment or services
under the plan or coverage;
(B) the implementation of activities to prevent hospital
readmissions through a comprehensive program for hospital
discharge that includes patient-centered education and
counseling, comprehensive discharge planning, and post
discharge reinforcement by an appropriate health care
professional;
(C) the implementation of activities to improve patient
safety and reduce medical errors through the appropriate use of
best clinical practices, evidence based medicine, and health
(D) the implementation of wellness and health promotion
(2) Guidelines.--The Secretary, in consultation with experts in
health care quality and stakeholders, shall develop guidelines
concerning the matters described in paragraph (1).
(3) Requirements.--The guidelines developed under paragraph (2)
shall require the periodic reporting to the applicable Exchange of
the activities that a qualified health plan has conducted to
implement a strategy described in paragraph (1).
(h) Quality Improvement.--
(1) Enhancing patient safety.--Beginning on January 1, 2015, a
qualified health plan may contract with--
(A) a hospital with greater than 50 beds only if such
hospital--
(i) utilizes a patient safety evaluation system as
described in part C of title IX of the Public Health
Service Act; and
(ii) implements a mechanism to ensure that each patient
receives a comprehensive program for hospital discharge
that includes patient-centered education and counseling,
(B) a health care provider only if such provider implements
such mechanisms to improve health care quality as the Secretary
may by regulation require.
(2) Exceptions.--The Secretary may establish reasonable
exceptions to the requirements described in paragraph (1).
(3) Adjustment.--The Secretary may by regulation adjust the
number of beds described in paragraph (1)(A).
(i) Navigators.--
(1) In general.--An Exchange shall establish a program under
which it awards grants to entities described in paragraph (2) to
carry out the duties described in paragraph (3).
(2) Eligibility.--
(A) In general.--To be eligible to receive a grant under
paragraph (1), an entity shall demonstrate to the Exchange
involved that the entity has existing relationships, or could
readily establish relationships, with employers and employees,
consumers (including uninsured and underinsured consumers), or
self-employed individuals likely to be qualified to enroll in a
qualified health plan.
(B) Types.--Entities described in subparagraph (A) may
include trade, industry, and professional associations,
commercial fishing industry organizations, ranching and farming
organizations, community and consumer-focused nonprofit groups,
chambers of commerce, unions, small business development
centers, other licensed insurance agents and brokers, and other
entities that--
(i) are capable of carrying out the duties described in
(ii) meet the standards described in paragraph (4); and
(iii) provide information consistent with the standards
developed under paragraph (5).
(3) Duties.--An entity that serves as a navigator under a grant
under this subsection shall--
(A) conduct public education activities to raise awareness
of the availability of qualified health plans;
(B) distribute fair and impartial information concerning
enrollment in qualified health plans, and the availability of
premium tax credits under section 36B of the Internal Revenue
Code of 1986 and cost-sharing reductions under section 1402;
(C) facilitate enrollment in qualified health plans;
(D) provide referrals to any applicable office of health
insurance consumer assistance or health insurance ombudsman
established under section 2793 of the Public Health Service
Act, or any other appropriate State agency or agencies, for any
enrollee with a grievance, complaint, or question regarding
their health plan, coverage, or a determination under such plan
or coverage; and
(E) provide information in a manner that is culturally and
linguistically appropriate to the needs of the population being
served by the Exchange or Exchanges.
(4) Standards.--
(A) In general.--The Secretary shall establish standards
for navigators under this subsection, including provisions to
ensure that any private or public entity that is selected as a
navigator is qualified, and licensed if appropriate, to engage
in the navigator activities described in this subsection and to
avoid conflicts of interest. Under such standards, a navigator
shall not--
(i) be a health insurance issuer; or
(ii) receive any consideration directly or indirectly
from any health insurance issuer in connection with the
enrollment of any qualified individuals or employees of a
qualified employer in a qualified health plan.
(5) Fair and impartial information and services.--The
Secretary, in collaboration with States, shall develop standards to
ensure that information made available by navigators is fair,
accurate, and impartial.
(6) Funding.--Grants under this subsection shall be made from
the operational funds of the Exchange and not Federal funds
received by the State to establish the Exchange.
(j) Applicability of Mental Health Parity.--Section 2726 of the
Public Health Service Act shall apply to qualified health plans in the
same manner and to the same extent as such section applies to health
insurance issuers and group health plans.
(k) Conflict.--An Exchange may not establish rules that conflict
with or prevent the application of regulations promulgated by the
Secretary under this subtitle.
(a) Choice.--
(1) Qualified individuals.--A qualified individual may enroll
in any qualified health plan available to such individual.
(2) Qualified employers.--
(A) Employer may specify level.--A qualified employer may
provide support for coverage of employees under a qualified
health plan by selecting any level of coverage under section
1302(d) to be made available to employees through an Exchange.
(B) Employee may choose plans within a level.--Each
employee of a qualified employer that elects a level of
coverage under subparagraph (A) may choose to enroll in a
qualified health plan that offers coverage at that level.
(b) Payment of Premiums by Qualified Individuals.--A qualified
individual enrolled in any qualified health plan may pay any applicable
premium owed by such individual to the health insurance issuer issuing
such qualified health plan.
(c) Single Risk Pool.--
(1) Individual market.--A health insurance issuer shall
consider all enrollees in all health plans (other than
grandfathered health plans) offered by such issuer in the
individual market, including those enrollees who do not enroll in
such plans through the Exchange, to be members of a single risk
(2) Small group market.--A health insurance issuer shall
grandfathered health plans) offered by such issuer in the small
group market, including those enrollees who do not enroll in such
plans through the Exchange, to be members of a single risk pool.
(3) Merger of markets.--A State may require the individual and
small group insurance markets within a State to be merged if the
State determines appropriate.
(4) State law.--A State law requiring grandfathered health
plans to be included in a pool described in paragraph (1) or (2)
shall not apply.
(d) Empowering Consumer Choice.--
(1) Continued operation of market outside exchanges.--Nothing
in this title shall be construed to prohibit--
(A) a health insurance issuer from offering outside of an
Exchange a health plan to a qualified individual or qualified
employer; and
(B) a qualified individual from enrolling in, or a
qualified employer from selecting for its employees, a health
plan offered outside of an Exchange.
(2) Continued operation of state benefit requirements.--Nothing
in this title shall be construed to terminate, abridge, or limit
the operation of any requirement under State law with respect to
any policy or plan that is offered outside of an Exchange to offer
(3) Voluntary nature of an exchange.--
(A) Choice to enroll or not to enroll.--Nothing in this
title shall be construed to restrict the choice of a qualified
individual to enroll or not to enroll in a qualified health
plan or to participate in an Exchange.
(B) Prohibition against compelled enrollment.--Nothing in
this title shall be construed to compel an individual to enroll
in a qualified health plan or to participate in an Exchange.
(C) Individuals allowed to enroll in any plan.--A qualified
individual may enroll in any qualified health plan, except that
in the case of a catastrophic plan described in section
1302(e), a qualified individual may enroll in the plan only if
the individual is eligible to enroll in the plan under section
1302(e)(2).
(D) Members of congress in the exchange.--
(i) Requirement.--Notwithstanding any other provision
of law, after the effective date of this subtitle, the only
health plans that the Federal Government may make available
to Members of Congress and congressional staff with respect
to their service as a Member of Congress or congressional
staff shall be health plans that are--
(I) created under this Act (or an amendment made by
this Act); or
(II) offered through an Exchange established under
this Act (or an amendment made by this Act).
(ii) Definitions.--In this section:
(I) Member of congress.--The term ``Member of
Congress'' means any member of the House of
Representatives or the Senate.
(II) Congressional staff.--The term ``congressional
staff'' means all full-time and part-time employees
employed by the official office of a Member of
Congress, whether in Washington, DC or outside of
(4) No penalty for transferring to minimum essential coverage
outside exchange.--An Exchange, or a qualified health plan offered
through an Exchange, shall not impose any penalty or other fee on
an individual who cancels enrollment in a plan because the
individual becomes eligible for minimum essential coverage (as
defined in section 5000A(f) of the Internal Revenue Code of 1986
without regard to paragraph (1)(C) or (D) thereof) or such coverage
becomes affordable (within the meaning of section 36B(c)(2)(C) of
such Code).
(e) Enrollment Through Agents or Brokers.--The Secretary shall
establish procedures under which a State may allow agents or brokers--
(1) to enroll individuals in any qualified health plans in the
individual or small group market as soon as the plan is offered
through an Exchange in the State; and
(2) to assist individuals in applying for premium tax credits
and cost-sharing reductions for plans sold through an Exchange.
Such procedures may include the establishment of rate schedules for
broker commissions paid by health benefits plans offered through an
(f) Qualified Individuals and Employers; Access Limited to Citizens
and Lawful Residents.--
(1) Qualified individuals.--In this title:
(A) In general.--The term ``qualified individual'' means,
with respect to an Exchange, an individual who--
(i) is seeking to enroll in a qualified health plan in
the individual market offered through the Exchange; and
(ii) resides in the State that established the Exchange
(except with respect to territorial agreements under
section 1312(f)).
(B) Incarcerated individuals excluded.--An individual shall
not be treated as a qualified individual if, at the time of
enrollment, the individual is incarcerated, other than
incarceration pending the disposition of charges.
(2) Qualified employer.--In this title:
(A) In general.--The term ``qualified employer'' means a
small employer that elects to make all full-time employees of
such employer eligible for 1 or more qualified health plans
offered in the small group market through an Exchange that
offers qualified health plans.
(B) Extension to large groups.--
(i) In general.--Beginning in 2017, each State may
allow issuers of health insurance coverage in the large
group market in the State to offer qualified health plans
in such market through an Exchange. Nothing in this
subparagraph shall be construed as requiring the issuer to
offer such plans through an Exchange.
(ii) Large employers eligible.--If a State under clause
(i) allows issuers to offer qualified health plans in the
large group market through an Exchange, the term
``qualified employer'' shall include a large employer that
elects to make all full-time employees of such employer
eligible for 1 or more qualified health plans offered in
the large group market through the Exchange.
(3) Access limited to lawful residents.--If an individual is
not, or is not reasonably expected to be for the entire period for
which enrollment is sought, a citizen or national of the United
States or an alien lawfully present in the United States, the
individual shall not be treated as a qualified individual and may
not be covered under a qualified health plan in the individual
market that is offered through an Exchange.
(a) Accounting for Expenditures.--
(1) In general.--An Exchange shall keep an accurate accounting
of all activities, receipts, and expenditures and shall annually
submit to the Secretary a report concerning such accountings.
(2) Investigations.--The Secretary, in coordination with the
Inspector General of the Department of Health and Human Services,
may investigate the affairs of an Exchange, may examine the
properties and records of an Exchange, and may require periodic
reports in relation to activities undertaken by an Exchange. An
Exchange shall fully cooperate in any investigation conducted under
(3) Audits.--An Exchange shall be subject to annual audits by
(4) Pattern of abuse.--If the Secretary determines that an
Exchange or a State has engaged in serious misconduct with respect
to compliance with the requirements of, or carrying out of
activities required under, this title, the Secretary may rescind
from payments otherwise due to such State involved under this or
any other Act administered by the Secretary an amount not to exceed
1 percent of such payments per year until corrective actions are
taken by the State that are determined to be adequate by the
(5) Protections against fraud and abuse.--With respect to
activities carried out under this title, the Secretary shall
provide for the efficient and non-discriminatory administration of
Exchange activities and implement any measure or procedure that--
(A) the Secretary determines is appropriate to reduce fraud
and abuse in the administration of this title; and
(B) the Secretary has authority to implement under this
title or any other Act.
(6) Application of the false claims act.--
(A) In general.--Payments made by, through, or in
connection with an Exchange are subject to the False Claims Act
(31 U.S.C. 3729 et seq.) if those payments include any Federal
funds. Compliance with the requirements of this Act concerning
eligibility for a health insurance issuer to participate in the
Exchange shall be a material condition of an issuer's
entitlement to receive payments, including payments of premium
tax credits and cost-sharing reductions, through the Exchange.
(B) Damages.--Notwithstanding paragraph (1) of section
3729(a) of title 31, United States Code, and subject to
paragraph (2) of such section, the civil penalty assessed under
the False Claims Act on any person found liable under such Act
as described in subparagraph (A) shall be increased by not less
than 3 times and not more than 6 times the amount of damages
which the Government sustains because of the act of that
(b) GAO Oversight.--Not later than 5 years after the first date on
which Exchanges are required to be operational under this title, the
Comptroller General shall conduct an ongoing study of Exchange
activities and the enrollees in qualified health plans offered through
Exchanges. Such study shall review--
(1) the operations and administration of Exchanges, including
surveys and reports of qualified health plans offered through
Exchanges and on the experience of such plans (including data on
enrollees in Exchanges and individuals purchasing health insurance
coverage outside of Exchanges), the expenses of Exchanges, claims
statistics relating to qualified health plans, complaints data
relating to such plans, and the manner in which Exchanges meet
their goals;
(2) any significant observations regarding the utilization and
adoption of Exchanges;
(3) where appropriate, recommendations for improvements in the
operations or policies of Exchanges; and
(4) how many physicians, by area and specialty, are not taking
or accepting new patients enrolled in Federal Government health
care programs, and the adequacy of provider networks of Federal
Government health care programs.
(a) Establishment of Standards.--
(1) In general.--The Secretary shall, as soon as practicable
after the date of enactment of this Act, issue regulations setting
standards for meeting the requirements under this title, and the
amendments made by this title, with respect to--
(A) the establishment and operation of Exchanges (including
SHOP Exchanges);
(B) the offering of qualified health plans through such
Exchanges;
(C) the establishment of the reinsurance and risk
adjustment programs under part V; and
(D) such other requirements as the Secretary determines
appropriate.
The preceding sentence shall not apply to standards for
requirements under subtitles A and C (and the amendments made by
such subtitles) for which the Secretary issues regulations under
the Public Health Service Act.
(2) Consultation.--In issuing the regulations under paragraph
(1), the Secretary shall consult with the National Association of
Insurance Commissioners and its members and with health insurance
issuers, consumer organizations, and such other individuals as the
Secretary selects in a manner designed to ensure balanced
representation among interested parties.
(b) State Action.--Each State that elects, at such time and in such
manner as the Secretary may prescribe, to apply the requirements
described in subsection (a) shall, not later than January 1, 2014,
adopt and have in effect--
(1) the Federal standards established under subsection (a); or
(2) a State law or regulation that the Secretary determines
implements the standards within the State.
(c) Failure To Establish Exchange or Implement Requirements.--
(1) In general.--If--
(A) a State is not an electing State under subsection (b);
(B) the Secretary determines, on or before January 1, 2013,
that an electing State--
(i) will not have any required Exchange operational by
January 1, 2014; or
(ii) has not taken the actions the Secretary determines
necessary to implement--
(I) the other requirements set forth in the
standards under subsection (a); or
(II) the requirements set forth in subtitles A and
C and the amendments made by such subtitles;
the Secretary shall (directly or through agreement with a not-for-
profit entity) establish and operate such Exchange within the State
and the Secretary shall take such actions as are necessary to
implement such other requirements.
(2) Enforcement authority.--The provisions of section 2736(b)
of the Public Health Services Act shall apply to the enforcement
under paragraph (1) of requirements of subsection (a)(1) (without
regard to any limitation on the application of those provisions to
group health plans).
(d) No Interference With State Regulatory Authority.--Nothing in
this title shall be construed to preempt any State law that does not
prevent the application of the provisions of this title.
(e) Presumption for Certain State-Operated Exchanges.--
(1) In general.--In the case of a State operating an Exchange
before January 1, 2010, and which has insured a percentage of its
population not less than the percentage of the population projected
to be covered nationally after the implementation of this Act, that
seeks to operate an Exchange under this section, the Secretary
shall presume that such Exchange meets the standards under this
section unless the Secretary determines, after completion of the
process established under paragraph (2), that the Exchange does not
comply with such standards.
(2) Process.--The Secretary shall establish a process to work
with a State described in paragraph (1) to provide assistance
necessary to assist the State's Exchange in coming into compliance
with the standards for approval under this section.
(a) Establishment of Program.--
(1) In general.--The Secretary shall establish a program to
carry out the purposes of this section to be known as the Consumer
Operated and Oriented Plan (CO-OP) program.
(2) Purpose.--It is the purpose of the CO-OP program to foster
the creation of qualified nonprofit health insurance issuers to
offer qualified health plans in the individual and small group
markets in the States in which the issuers are licensed to offer
such plans.
(b) Loans and Grants Under the CO-OP Program.--
(1) In general.--The Secretary shall provide through the CO-OP
program for the awarding to persons applying to become qualified
nonprofit health insurance issuers of--
(A) loans to provide assistance to such person in meeting
its start-up costs; and
(B) grants to provide assistance to such person in meeting
any solvency requirements of States in which the person seeks
to be licensed to issue qualified health plans.
(2) Requirements for awarding loans and grants.--
(A) In general.--In awarding loans and grants under the CO-
OP program, the Secretary shall--
(i) take into account the recommendations of the
advisory board established under paragraph (3);
(ii) give priority to applicants that will offer
qualified health plans on a Statewide basis, will utilize
integrated care models, and have significant private
support; and
(iii) ensure that there is sufficient funding to
establish at least 1 qualified nonprofit health insurance
issuer in each State, except that nothing in this clause
shall prohibit the Secretary from funding the establishment
of multiple qualified nonprofit health insurance issuers in
any State if the funding is sufficient to do so.
(B) States without issuers in program.--If no health
insurance issuer applies to be a qualified nonprofit health
insurance issuer within a State, the Secretary may use amounts
appropriated under this section for the awarding of grants to
encourage the establishment of a qualified nonprofit health
insurance issuer within the State or the expansion of a
qualified nonprofit health insurance issuer from another State
to the State.
(C) Agreement.--
(i) In general.--The Secretary shall require any person
receiving a loan or grant under the CO-OP program to enter
into an agreement with the Secretary which requires such
person to meet (and to continue to meet)--
(I) any requirement under this section for such
person to be treated as a qualified nonprofit health
insurance issuer; and
(II) any requirements contained in the agreement
for such person to receive such loan or grant.
(ii) Restrictions on use of federal funds.--The
agreement shall include a requirement that no portion of
the funds made available by any loan or grant under this
section may be used--
(I) for carrying on propaganda, or otherwise
attempting, to influence legislation; or
(II) for marketing.
Nothing in this clause shall be construed to allow a person
to take any action prohibited by section 501(c)(29) of the
Internal Revenue Code of 1986.
(iii) Failure to meet requirements.--If the Secretary
determines that a person has failed to meet any requirement
described in clause (i) or (ii) and has failed to correct
such failure within a reasonable period of time of when the
person first knows (or reasonably should have known) of
such failure, such person shall repay to the Secretary an
amount equal to the sum of--
(I) 110 percent of the aggregate amount of loans
and grants received under this section; plus
(II) interest on the aggregate amount of loans and
grants received under this section for the period the
loans or grants were outstanding.
The Secretary shall notify the Secretary of the Treasury of
any determination under this section of a failure that
results in the termination of an issuer's tax-exempt status
under section 501(c)(29) of such Code.
(D) Time for awarding loans and grants.--The Secretary
shall not later than July 1, 2013, award the loans and grants
under the CO-OP program and begin the distribution of amounts
awarded under such loans and grants.
(3) Advisory board.--
(A) In general.--The advisory board under this paragraph
shall consist of 15 members appointed by the Comptroller
General of the United States from among individuals with
qualifications described in section 1805(c)(2) of the Social
(B) Rules relating to appointments.--
(i) Standards.--Any individual appointed under
subparagraph (A) shall meet ethics and conflict of interest
standards protecting against insurance industry involvement
and interference.
(ii) Original appointments.--The original appointment
of board members under subparagraph (A)(ii) shall be made
no later than 3 months after the date of enactment of this
(C) Vacancy.--Any vacancy on the advisory board shall be
filled in the same manner as the original appointment.
(D) Pay and reimbursement.--
(i) No compensation for members of advisory board.--
Except as provided in clause (ii), a member of the advisory
board may not receive pay, allowances, or benefits by
reason of their service on the board.
(ii) Travel expenses.--Each member shall receive travel
expenses, including per diem in lieu of subsistence under
subchapter I of chapter 57 of title 5, United States Code.
(E) Application of faca.--The Federal Advisory Committee
Act (5 U.S.C. App.) shall apply to the advisory board, except
that section 14 of such Act shall not apply.
(F) Termination.--The advisory board shall terminate on the
earlier of the date that it completes its duties under this
section or December 31, 2015.
(c) Qualified Nonprofit Health Insurance Issuer.--For purposes of
this section--
(1) In general.--The term ``qualified nonprofit health
insurance issuer'' means a health insurance issuer that is an
organization--
(A) that is organized under State law as a nonprofit,
member corporation;
(B) substantially all of the activities of which consist of
the issuance of qualified health plans in the individual and
small group markets in each State in which it is licensed to
issue such plans; and
(C) that meets the other requirements of this subsection.
(2) Certain organizations prohibited.--An organization shall
not be treated as a qualified nonprofit health insurance issuer
if--
(A) the organization or a related entity (or any
predecessor of either) was a health insurance issuer on July
16, 2009; or
(B) the organization is sponsored by a State or local
government, any political subdivision thereof, or any
instrumentality of such government or political subdivision.
(3) Governance requirements.--An organization shall not be
treated as a qualified nonprofit health insurance issuer unless--
(A) the governance of the organization is subject to a
majority vote of its members;
(B) its governing documents incorporate ethics and conflict
of interest standards protecting against insurance industry
involvement and interference; and
(C) as provided in regulations promulgated by the
Secretary, the organization is required to operate with a
strong consumer focus, including timeliness, responsiveness,
and accountability to members.
(4) Profits inure to benefit of members.--An organization shall
unless any profits made by the organization are required to be used
to lower premiums, to improve benefits, or for other programs
intended to improve the quality of health care delivered to its
(5) Compliance with state insurance laws.--An organization
shall not be treated as a qualified nonprofit health insurance
issuer unless the organization meets all the requirements that
other issuers of qualified health plans are required to meet in any
State where the issuer offers a qualified health plan, including
solvency and licensure requirements, rules on payments to
providers, and compliance with network adequacy rules, rate and
form filing rules, any applicable State premium assessments and any
other State law described in section 1324(b).
(6) Coordination with state insurance reforms.--An organization
issuer unless the organization does not offer a health plan in a
State until that State has in effect (or the Secretary has
implemented for the State) the market reforms required by part A of
title XXVII of the Public Health Service Act (as amended by
subtitles A and C of this Act).
(d) Establishment of Private Purchasing Council.--
(1) In general.--Qualified nonprofit health insurance issuers
participating in the CO-OP program under this section may establish
a private purchasing council to enter into collective purchasing
arrangements for items and services that increase administrative
and other cost efficiencies, including claims administration,
administrative services, health information technology, and
actuarial services.
(2) Council may not set payment rates.--The private purchasing
council established under paragraph (1) shall not set payment rates
for health care facilities or providers participating in health
insurance coverage provided by qualified nonprofit health insurance
issuers.
(3) Continued application of antitrust laws.--
(A) In general.--Nothing in this section shall be construed
to limit the application of the antitrust laws to any private
purchasing council (whether or not established under this
subsection) or to any qualified nonprofit health insurance
issuer participating in such a council.
(B) Antitrust laws.--For purposes of this subparagraph, the
term ``antitrust laws'' has the meaning given the term in
subsection (a) of the first section of the Clayton Act (15
U.S.C. 12(a)). Such term also includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent that such
section 5 applies to unfair methods of competition.
(e) Limitation on Participation.--No representative of any Federal,
State, or local government (or of any political subdivision or
instrumentality thereof), and no representative of a person described
in subsection (c)(2)(A), may serve on the board of directors of a
qualified nonprofit health insurance issuer or with a private
purchasing council established under subsection (d).
(f) Limitations on Secretary.--
(1) In general.--The Secretary shall not--
(A) participate in any negotiations between 1 or more
qualified nonprofit health insurance issuers (or a private
purchasing council established under subsection (d)) and any
health care facilities or providers, including any drug
manufacturer, pharmacy, or hospital; and
(B) establish or maintain a price structure for
reimbursement of any health benefits covered by such issuers.
(2) Competition.--Nothing in this section shall be construed as
authorizing the Secretary to interfere with the competitive nature
of providing health benefits through qualified nonprofit health
insurance issuers.
(g) Appropriations.--There are hereby appropriated, out of any
funds in the Treasury not otherwise appropriated, $6,000,000,000 to
carry out this section.
(h) Tax Exemption for Qualified Nonprofit Health Insurance
Issuer.--
(1) In general.--Section 501(c) of the Internal Revenue Code of
1986 (relating to list of exempt organizations) is amended by
``(29) CO-OP health insurance issuers.--
``(A) In general.--A qualified nonprofit health insurance
issuer (within the meaning of section 1322 of the Patient
Protection and Affordable Care Act) which has received a loan
or grant under the CO-OP program under such section, but only
with respect to periods for which the issuer is in compliance
with the requirements of such section and any agreement with
respect to the loan or grant.
``(B) Conditions for exemption.--Subparagraph (A) shall
apply to an organization only if--
``(i) the organization has given notice to the
Secretary, in such manner as the Secretary may by
regulations prescribe, that it is applying for recognition
of its status under this paragraph,
``(ii) except as provided in section 1322(c)(4) of the
Patient Protection and Affordable Care Act, no part of the
net earnings of which inures to the benefit of any private
shareholder or individual,
``(iii) no substantial part of the activities of which
is carrying on propaganda, or otherwise attempting, to
influence legislation, and
``(iv) the organization does not participate in, or
intervene in (including the publishing or distributing of
statements), any political campaign on behalf of (or in
opposition to) any candidate for public office.''.
(2) Additional reporting requirement.--Section 6033 of such
Code (relating to returns by exempt organizations) is amended by
redesignating subsection (m) as subsection (n) and by inserting
after subsection (l) the following:
``(m) Additional Information Required From CO-OP Insurers.--An
organization described in section 501(c)(29) shall include on the
return required under subsection (a) the following information:
``(1) The amount of the reserves required by each State in
which the organization is licensed to issue qualified health plans.
``(2) The amount of reserves on hand.''.
(3) Application of tax on excess benefit transactions.--Section
4958(e)(1) of such Code (defining applicable tax-exempt
organization) is amended by striking ``paragraph (3) or (4)'' and
inserting ``paragraph (3), (4), or (29)''.
(i) GAO Study and Report.--
(1) Study.--The Comptroller General of the General
Accountability Office shall conduct an ongoing study on competition
and market concentration in the health insurance market in the
United States after the implementation of the reforms in such
market under the provisions of, and the amendments made by, this
Act. Such study shall include an analysis of new issuers of health
insurance in such market.
(2) Report.--The Comptroller General shall, not later than
December 31 of each even-numbered year (beginning with 2014),
report to the appropriate committees of the Congress the results of
the study conducted under paragraph (1), including any
recommendations for administrative or legislative changes the
Comptroller General determines necessary or appropriate to increase
competition in the health insurance market.
(a) Voluntary Nature.--
(1) No requirement for health care providers to participate.--
Nothing in this section shall be construed to require a health care
provider to participate in a community health insurance option, or
to impose any penalty for non-participation.
(2) No requirement for individuals to join.--Nothing in this
section shall be construed to require an individual to participate
in a community health insurance option, or to impose any penalty
for non-participation.
(3) State opt out.--
(A) In general.--A State may elect to prohibit Exchanges in
such State from offering a community health insurance option if
such State enacts a law to provide for such prohibition.
(B) Termination of opt out.--A State may repeal a law
described in subparagraph (A) and provide for the offering of
such an option through the Exchange.
(b) Establishment of Community Health Insurance Option.--
(1) Establishment.--The Secretary shall establish a community
health insurance option to offer, through the Exchanges established
under this title (other than Exchanges in States that elect to opt
out as provided for in subsection (a)(3)), health care coverage
that provides value, choice, competition, and stability of
affordable, high quality coverage throughout the United States.
(2) Community health insurance option.--In this section, the
term ``community health insurance option'' means health insurance
coverage that--
(A) except as specifically provided for in this section,
complies with the requirements for being a qualified health
(B) provides high value for the premium charged;
(C) reduces administrative costs and promotes
administrative simplification for beneficiaries;
(D) promotes high quality clinical care;
(E) provides high quality customer service to
beneficiaries;
(F) offers a sufficient choice of providers; and
(G) complies with State laws (if any), except as otherwise
provided for in this title, relating to the laws described in
(3) Essential health benefits.--
(A) General rule.--Except as provided in subparagraph (B),
a community health insurance option offered under this section
shall provide coverage only for the essential health benefits
described in section 1302(b).
(B) States may offer additional benefits.--Nothing in this
section shall preclude a State from requiring that benefits in
subparagraph (A) be provided to enrollees of a community health
insurance option offered in such State.
(C) Credits.--
(i) In general.--An individual enrolled in a community
health insurance option under this section shall be
eligible for credits under section 36B of the Internal
Revenue Code of 1986 in the same manner as an individual
who is enrolled in a qualified health plan.
(ii) No additional federal cost.--A requirement by a
State under subparagraph (B) that benefits in addition to
the essential health benefits required under subparagraph
(A) be provided to enrollees of a community health
insurance option shall not affect the amount of a premium
tax credit provided under section 36B of the Internal
Revenue Code of 1986 with respect to such plan.
(D) State must assume cost.--A State shall make payments to
or on behalf of an eligible individual to defray the cost of
any additional benefits described in subparagraph (B).
(E) Ensuring access to all services.--Nothing in this Act
shall prohibit an individual enrolled in a community health
insurance option from paying out-of-pocket the full cost of any
item or service not included as an essential health benefit or
otherwise covered as a benefit by a health plan. Nothing in
subparagraph (B) shall prohibit any type of medical provider
from accepting an out-of-pocket payment from an individual
enrolled in a community health insurance option for a service
otherwise not included as an essential health benefit.
(F) Protecting access to end of life care.--A community
health insurance option offered under this section shall be
prohibited from limiting access to end of life care.
(4) Cost sharing.--A community health insurance option shall
offer coverage at each of the levels of coverage described in
section 1302(d).
(5) Premiums.--
(A) Premiums sufficient to cover costs.--The Secretary
shall establish geographically adjusted premium rates in an
amount sufficient to cover expected costs (including claims and
administrative costs) using methods in general use by qualified
(B) Applicable rules.--The provisions of title XXVII of the
Public Health Service Act relating to premiums shall apply to
community health insurance options under this section,
including modified community rating provisions under section
2701 of such Act.
(C) Collection of data.--The Secretary shall collect data
as necessary to set premium rates under subparagraph (A).
(D) National pooling.--Notwithstanding any other provision
of law, the Secretary may treat all enrollees in community
health insurance options as members of a single pool.
(E) Contingency margin.--In establishing premium rates
under subparagraph (A), the Secretary shall include an
appropriate amount for a contingency margin.
(6) Reimbursement rates.--
(A) Negotiated rates.--The Secretary shall negotiate rates
for the reimbursement of health care providers for benefits
covered under a community health insurance option.
(B) Limitation.--The rates described in subparagraph (A)
shall not be higher, in aggregate, than the average
reimbursement rates paid by health insurance issuers offering
qualified health plans through the Exchange.
(C) Innovation.--Subject to the limits contained in
subparagraph (A), a State Advisory Council established or
designated under subsection (d) may develop or encourage the
use of innovative payment policies that promote quality,
efficiency and savings to consumers.
(7) Solvency and consumer protection.--
(A) Solvency.--The Secretary shall establish a Federal
solvency standard to be applied with respect to a community
health insurance option. A community health insurance option
shall also be subject to the solvency standard of each State in
which such community health insurance option is offered.
(B) Minimum required.--In establishing the standard
described under subparagraph (A), the Secretary shall require a
reserve fund that shall be equal to at least the dollar value
of the incurred but not reported claims of a community health
insurance option.
(C) Consumer protections.--The consumer protection laws of
a State shall apply to a community health insurance option.
(8) Requirements established in partnership with insurance
commissioners.--
(A) In general.--The Secretary, in collaboration with the
National Association of Insurance Commissioners (in this
paragraph referred to as the ``NAIC''), may promulgate
regulations to establish additional requirements for a
community health insurance option.
(B) Applicability.--Any requirement promulgated under
subparagraph (A) shall be applicable to such option beginning
90 days after the date on which the regulation involved becomes
final.
(c) Start-up Fund.--
(1) Establishment of fund.--
(A) In general.--There is established in the Treasury of
the United States a trust fund to be known as the ``Health
Benefit Plan Start-Up Fund'' (referred to in this section as
the ``Start-Up Fund''), that shall consist of such amounts as
may be appropriated or credited to the Start-Up Fund as
provided for in this subsection to provide loans for the
initial operations of a community health insurance option. Such
amounts shall remain available until expended.
(B) Funding.--There is hereby appropriated to the Start-Up
Fund, out of any moneys in the Treasury not otherwise
appropriated an amount requested by the Secretary of Health and
Human Services as necessary to--
(i) pay the start-up costs associated with the initial
operations of a community health insurance option; and
(ii) pay the costs of making payments on claims
submitted during the period that is not more than 90 days
from the date on which such option is offered.
(2) Use of start-up fund.--The Secretary shall use amounts
contained in the Start-Up Fund to make payments (subject to the
repayment requirements in paragraph (4)) for the purposes described
in paragraph (1)(B).
(3) Pass through of rebates.--The Secretary may establish
procedures for reducing the amount of payments to a contracting
administrator to take into account any rebates or price
concessions.
(4) Repayment.--
(A) In general.--A community health insurance option shall
be required to repay the Secretary of the Treasury (on such
terms as the Secretary may require) for any payments made under
paragraph (1)(B) by the date that is not later than 9 years
after the date on which the payment is made. The Secretary may
require the payment of interest with respect to such repayments
at rates that do not exceed the market interest rate (as
determined by the Secretary).
(B) Sanctions in case of for-profit conversion.--In any
case in which the Secretary enters into a contract with a
qualified entity for the offering of a community health
insurance option and such entity is determined to be a for-
profit entity by the Secretary, such entity shall be--
(i) immediately liable to the Secretary for any
payments received by such entity from the Start-Up Fund;
(ii) permanently ineligible to offer a qualified health
(d) State Advisory Council.--
(1) Establishment.--A State (other than a State that elects to
opt out as provided for in subsection (a)(3)) shall establish or
designate a public or non-profit private entity to serve as the
State Advisory Council to provide recommendations to the Secretary
on the operations and policies of a community health insurance
option in the State. Such Council shall provide recommendations on
at least the following:
(A) policies and procedures to integrate quality
improvement and cost containment mechanisms into the health
care delivery system;
(B) mechanisms to facilitate public awareness of the
availability of a community health insurance option; and
(C) alternative payment structures under a community health
insurance option for health care providers that encourage
quality improvement and cost control.
(2) Members.--The members of the State Advisory Council shall
be representatives of the public and shall include health care
consumers and providers.
(3) Applicability of recommendations.--The Secretary may apply
the recommendations of a State Advisory Council to a community
health insurance option in that State, in any other State, or in
all States.
(e) Authority To Contract; Terms of Contract.--
(1) Authority.--
(A) In general.--The Secretary may enter into a contract or
contracts with one or more qualified entities for the purpose
of performing administrative functions (including functions
described in subsection (a)(4) of section 1874A of the Social
Security Act) with respect to a community health insurance
option in the same manner as the Secretary may enter into
contracts under subsection (a)(1) of such section. The
Secretary shall have the same authority with respect to a
community health insurance option under this section as the
Secretary has under subsections (a)(1) and (b) of section 1874A
of the Social Security Act with respect to title XVIII of such
(B) Requirements apply.--If the Secretary enters into a
contract with a qualified entity to offer a community health
insurance option, under such contract such entity--
(i) shall meet the criteria established under paragraph
(2); and
(ii) shall receive an administrative fee under
(C) Limitation.--Contracts under this subsection shall not
involve the transfer of insurance risk to the contracting
(D) Reference.--An entity with which the Secretary has
entered into a contract under this paragraph shall be referred
to as a ``contracting administrator''.
(2) Qualified entity.--To be qualified to be selected by the
Secretary to offer a community health insurance option, an entity
(A) meet the criteria established under section 1874A(a)(2)
of the Social Security Act;
(B) be a nonprofit entity for purposes of offering such
option;
(C) meet the solvency standards applicable under subsection
(b)(7);
(D) be eligible to offer health insurance or health
benefits coverage;
(E) meet quality standards specified by the Secretary;
(F) have in place effective procedures to control fraud,
abuse, and waste; and
(G) meet such other requirements as the Secretary may
impose.
Procedures described under subparagraph (F) shall include the
implementation of procedures to use beneficiary identifiers to
identify individuals entitled to benefits so that such an
individual's social security account number is not used, and shall
also include procedures for the use of technology (including front-
end, prepayment intelligent data-matching technology similar to
that used by hedge funds, investment funds, and banks) to provide
real-time data analysis of claims for payment under this title to
identify and investigate unusual billing or order practices under
this title that could indicate fraud or abuse.
(3) Term.--A contract provided for under paragraph (1) shall be
for a term of at least 5 years but not more than 10 years, as
determined by the Secretary. At the end of each such term, the
Secretary shall conduct a competitive bidding process for the
purposes of renewing existing contracts or selecting new qualified
entities with which to enter into contracts under such paragraph.
(4) Limitation.--A contract may not be renewed under this
subsection unless the Secretary determines that the contracting
administrator has met performance requirements established by the
Secretary in the areas described in paragraph (7)(B).
(5) Audits.--The Inspector General shall conduct periodic
audits with respect to contracting administrators under this
subsection to ensure that the administrator involved is in
compliance with this section.
(6) Revocation.--A contract awarded under this subsection shall
be revoked by the Secretary, upon the recommendation of the
Inspector General, only after notice to the contracting
administrator involved and an opportunity for a hearing. The
Secretary may revoke such contract if the Secretary determines that
such administrator has engaged in fraud, deception, waste, abuse of
power, negligence, mismanagement of taxpayer dollars, or gross
mismanagement. An entity that has had a contract revoked under this
paragraph shall not be qualified to enter into a subsequent
contract under this subsection.
(7) Fee for administration.--
(A) In general.--The Secretary shall pay the contracting
administrator a fee for the management, administration, and
delivery of the benefits under this section.
(B) Requirement for high quality administration.--The
Secretary may increase the fee described in subparagraph (A) by
not more than 10 percent, or reduce the fee described in
subparagraph (A) by not more than 50 percent, based on the
extent to which the contracting administrator, in the
determination of the Secretary, meets performance requirements
established by the Secretary, in at least the following areas:
(i) Maintaining low premium costs and low cost sharing
requirements, provided that such requirements are
consistent with section 1302.
(ii) Reducing administrative costs and promoting
administrative simplification for beneficiaries.
(iii) Promoting high quality clinical care.
(iv) Providing high quality customer service to
(C) Non-renewal.--The Secretary may not renew a contract to
offer a community health insurance option under this section
with any contracting entity that has been assessed more than
one reduction under subparagraph (B) during the contract
(8) Limitation.--Notwithstanding the terms of a contract under
this subsection, the Secretary shall negotiate the reimbursement
rates for purposes of subsection (b)(6).
(f) Report by HHS and Insolvency Warnings.--
(1) In general.--On an annual basis, the Secretary shall
conduct a study on the solvency of a community health insurance
option and submit to Congress a report describing the results of
such study.
(2) Result.--If, in any year, the result of the study under
paragraph (1) is that a community health insurance option is
insolvent, such result shall be treated as a community health
insurance option solvency warning.
(3) Submission of plan and procedure.--
(A) In general.--If there is a community health insurance
option solvency warning under paragraph (2) made in a year, the
President shall submit to Congress, within the 15-day period
beginning on the date of the budget submission to Congress
under section 1105(a) of title 31, United States Code, for the
succeeding year, proposed legislation to respond to such
warning.
(B) Procedure.--In the case of a legislative proposal
submitted by the President pursuant to subparagraph (A), such
proposal shall be considered by Congress using the same
procedures described under sections 803 and 804 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
that shall be used for a medicare funding warning.
(g) Marketing Parity.--In a facility controlled by the Federal
Government, or by a State, where marketing or promotional materials
related to a community health insurance option are made available to
the public, making available marketing or promotional materials
relating to private health insurance plans shall not be prohibited.
Such materials include informational pamphlets, guidebooks, enrollment
forms, or other materials determined reasonable for display.
(h) Authorization of Appropriations.--There is authorized to be
appropriated such sums as may be necessary to carry out this section.
(a) In General.--Notwithstanding any other provision of law, any
health insurance coverage offered by a private health insurance issuer
shall not be subject to any Federal or State law described in
subsection (b) if a qualified health plan offered under the Consumer
Operated and Oriented Plan program under section 1322, a community
health insurance option under section 1323, or a nationwide qualified
health plan under section 1333(b), is not subject to such law.
(b) Laws Described.--The Federal and State laws described in this
subsection are those Federal and State laws relating to--
(1) guaranteed renewal;
(2) rating;
(3) preexisting conditions;
(4) non-discrimination;
(5) quality improvement and reporting;
(6) fraud and abuse;
(7) solvency and financial requirements;
(8) market conduct;
(9) prompt payment;
(10) appeals and grievances;
(11) privacy and confidentiality;
(12) licensure; and
(13) benefit plan material or information.
SEC. 1331. STATE FLEXIBILITY TO ESTABLISH BASIC HEALTH PROGRAMS FOR
LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID.
(1) In general.--The Secretary shall establish a basic health
program meeting the requirements of this section under which a
State may enter into contracts to offer 1 or more standard health
plans providing at least the essential health benefits described in
section 1302(b) to eligible individuals in lieu of offering such
individuals coverage through an Exchange.
(2) Certifications as to benefit coverage and costs.--Such
program shall provide that a State may not establish a basic health
program under this section unless the State establishes to the
satisfaction of the Secretary, and the Secretary certifies, that--
(A) in the case of an eligible individual enrolled in a
standard health plan offered through the program, the State
provides--
(i) that the amount of the monthly premium an eligible
individual is required to pay for coverage under the
standard health plan for the individual and the
individual's dependents does not exceed the amount of the
monthly premium that the eligible individual would have
been required to pay (in the rating area in which the
individual resides) if the individual had enrolled in the
applicable second lowest cost silver plan (as defined in
section 36B(b)(3)(B) of the Internal Revenue Code of 1986)
offered to the individual through an Exchange; and
(ii) that the cost-sharing an eligible individual is
required to pay under the standard health plan does not
(I) the cost-sharing required under a platinum plan
in the case of an eligible individual with household
income not in excess of 150 percent of the poverty line
for the size of the family involved; and
(II) the cost-sharing required under a gold plan in
the case of an eligible individual not described in
subclause (I); and
(B) the benefits provided under the standard health plans
offered through the program cover at least the essential health
benefits described in section 1302(b).
For purposes of subparagraph (A)(i), the amount of the monthly
premium an individual is required to pay under either the standard
health plan or the applicable second lowest cost silver plan shall
be determined after reduction for any premium tax credits and cost-
sharing reductions allowable with respect to either plan.
(b) Standard Health Plan.--In this section, the term ``standard
heath plan'' means a health benefits plan that the State contracts with
under this section--
(1) under which the only individuals eligible to enroll are
eligible individuals;
(2) that provides at least the essential health benefits
described in section 1302(b); and
(3) in the case of a plan that provides health insurance
coverage offered by a health insurance issuer, that has a medical
loss ratio of at least 85 percent.
(c) Contracting Process.--
(1) In general.--A State basic health program shall establish a
competitive process for entering into contracts with standard
health plans under subsection (a), including negotiation of
premiums and cost-sharing and negotiation of benefits in addition
to the essential health benefits described in section 1302(b).
(2) Specific items to be considered.--A State shall, as part of
its competitive process under paragraph (1), include at least the
(A) Innovation.--Negotiation with offerors of a standard
health plan for the inclusion of innovative features in the
plan, including--
(i) care coordination and care management for
enrollees, especially for those with chronic health
(ii) incentives for use of preventive services; and
(iii) the establishment of relationships between
providers and patients that maximize patient involvement in
health care decision-making, including providing incentives
for appropriate utilization under the plan.
(B) Health and resource differences.--Consideration of, and
the making of suitable allowances for, differences in health
care needs of enrollees and differences in local availability
of, and access to, health care providers. Nothing in this
subparagraph shall be construed as allowing discrimination on
the basis of pre-existing conditions or other health status-
related factors.
(C) Managed care.--Contracting with managed care systems,
or with systems that offer as many of the attributes of managed
care as are feasible in the local health care market.
(D) Performance measures.--Establishing specific
performance measures and standards for issuers of standard
health plans that focus on quality of care and improved health
outcomes, requiring such plans to report to the State with
respect to the measures and standards, and making the
performance and quality information available to enrollees in a
useful form.
(3) Enhanced availability.--
(A) Multiple plans.--A State shall, to the maximum extent
feasible, seek to make multiple standard health plans available
to eligible individuals within a State to ensure individuals
have a choice of such plans.
(B) Regional compacts.--A State may negotiate a regional
compact with other States to include coverage of eligible
individuals in all such States in agreements with issuers of
standard health plans.
(4) Coordination with other state programs.--A State shall seek
to coordinate the administration of, and provision of benefits
under, its program under this section with the State medicaid
program under title XIX of the Social Security Act, the State child
health plan under title XXI of such Act, and other State-
administered health programs to maximize the efficiency of such
programs and to improve the continuity of care.
(d) Transfer of Funds to States.--
(1) In general.--If the Secretary determines that a State
electing the application of this section meets the requirements of
the program established under subsection (a), the Secretary shall
transfer to the State for each fiscal year for which 1 or more
standard health plans are operating within the State the amount
determined under paragraph (3).
(2) Use of funds.--A State shall establish a trust for the
deposit of the amounts received under paragraph (1) and amounts in
the trust fund shall only be used to reduce the premiums and cost-
sharing of, or to provide additional benefits for, eligible
individuals enrolled in standard health plans within the State.
Amounts in the trust fund, and expenditures of such amounts, shall
not be included in determining the amount of any non-Federal funds
for purposes of meeting any matching or expenditure requirement of
any federally-funded program.
(3) Amount of payment.--
(A) Secretarial determination.--
(i) In general.--The amount determined under this
paragraph for any fiscal year is the amount the Secretary
determines is equal to 85 percent of the premium tax
credits under section 36B of the Internal Revenue Code of
1986, and the cost-sharing reductions under section 1402,
that would have been provided for the fiscal year to
eligible individuals enrolled in standard health plans in
the State if such eligible individuals were allowed to
enroll in qualified health plans through an Exchange
established under this subtitle.
(ii) Specific requirements.--The Secretary shall make
the determination under clause (i) on a per enrollee basis
and shall take into account all relevant factors necessary
to determine the value of the premium tax credits and cost-
sharing reductions that would have been provided to
eligible individuals described in clause (i), including the
age and income of the enrollee, whether the enrollment is
for self-only or family coverage, geographic differences in
average spending for health care across rating areas, the
health status of the enrollee for purposes of determining
risk adjustment payments and reinsurance payments that
would have been made if the enrollee had enrolled in a
qualified health plan through an Exchange, and whether any
reconciliation of the credit or cost-sharing reductions
would have occurred if the enrollee had been so enrolled.
This determination shall take into consideration the
experience of other States with respect to participation in
an Exchange and such credits and reductions provided to
residents of the other States, with a special focus on
enrollees with income below 200 percent of poverty.
(iii) Certification.--The Chief Actuary of the Centers
for Medicare & Medicaid Services, in consultation with the
Office of Tax Analysis of the Department of the Treasury,
shall certify whether the methodology used to make
determinations under this subparagraph, and such
determinations, meet the requirements of clause (ii). Such
certifications shall be based on sufficient data from the
State and from comparable States about their experience
with programs created by this Act.
(B) Corrections.--The Secretary shall adjust the payment
for any fiscal year to reflect any error in the determinations
under subparagraph (A) for any preceding fiscal year.
(4) Application of special rules.--The provisions of section
1303 shall apply to a State basic health program, and to standard
health plans offered through such program, in the same manner as
such rules apply to qualified health plans.
(e) Eligible Individual.--
(1) In general.--In this section, the term ``eligible
individual'' means, with respect to any State, an individual--
(A) who a resident of the State who is not eligible to
enroll in the State's medicaid program under title XIX of the
Social Security Act for benefits that at a minimum consist of
the essential health benefits described in section 1302(b);
(B) whose household income exceeds 133 percent but does not
exceed 200 percent of the poverty line for the size of the
family involved;
(C) who is not eligible for minimum essential coverage (as
defined in section 5000A(f) of the Internal Revenue Code of
1986) or is eligible for an employer-sponsored plan that is not
affordable coverage (as determined under section 5000A(e)(2) of
such Code); and
(D) who has not attained age 65 as of the beginning of the
plan year.
Such term shall not include any individual who is not a qualified
individual under section 1312 who is eligible to be covered by a
qualified health plan offered through an Exchange.
(2) Eligible individuals may not use exchange.--An eligible
individual shall not be treated as a qualified individual under
section 1312 eligible for enrollment in a qualified health plan
offered through an Exchange established under section 1311.
(f) Secretarial Oversight.--The Secretary shall each year conduct a
review of each State program to ensure compliance with the requirements
of this section, including ensuring that the State program meets--
(1) eligibility verification requirements for participation in
the program;
(2) the requirements for use of Federal funds received by the
program; and
(3) the quality and performance standards under this section.
(g) Standard Health Plan Offerors.--A State may provide that
persons eligible to offer standard health plans under a basic health
program established under this section may include a licensed health
maintenance organization, a licensed health insurance insurer, or a
network of health care providers established to offer services under
the program.
(h) Definitions.--Any term used in this section which is also used
in section 36B of the Internal Revenue Code of 1986 shall have the
meaning given such term by such section.
(a) Application.--
(1) In general.--A State may apply to the Secretary for the
waiver of all or any requirements described in paragraph (2) with
respect to health insurance coverage within that State for plan
years beginning on or after January 1, 2017. Such application
(A) be filed at such time and in such manner as the
Secretary may require;
(B) contain such information as the Secretary may require,
(i) a comprehensive description of the State
legislation and program to implement a plan meeting the
requirements for a waiver under this section; and
(ii) a 10-year budget plan for such plan that is budget
neutral for the Federal Government; and
(C) provide an assurance that the State has enacted the law
described in subsection (b)(2).
(2) Requirements.--The requirements described in this paragraph
with respect to health insurance coverage within the State for plan
years beginning on or after January 1, 2014, are as follows:
(A) Part I of subtitle D.
(B) Part II of subtitle D.
(C) Section 1402.
(D) Sections 36B, 4980H, and 5000A of the Internal Revenue
Code of 1986.
(3) Pass through of funding.--With respect to a State waiver
under paragraph (1), under which, due to the structure of the State
plan, individuals and small employers in the State would not
qualify for the premium tax credits, cost-sharing reductions, or
small business credits under sections 36B of the Internal Revenue
Code of 1986 or under part I of subtitle E for which they would
otherwise be eligible, the Secretary shall provide for an
alternative means by which the aggregate amount of such credits or
reductions that would have been paid on behalf of participants in
the Exchanges established under this title had the State not
received such waiver, shall be paid to the State for purposes of
implementing the State plan under the waiver. Such amount shall be
determined annually by the Secretary, taking into consideration the
experience of other States with respect to participation in an
Exchange and credits and reductions provided under such provisions
to residents of the other States.
(4) Waiver consideration and transparency.--
(A) In general.--An application for a waiver under this
section shall be considered by the Secretary in accordance with
the regulations described in subparagraph (B).
(B) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall promulgate
regulations relating to waivers under this section that
provide--
(i) a process for public notice and comment at the
State level, including public hearings, sufficient to
ensure a meaningful level of public input;
(ii) a process for the submission of an application
that ensures the disclosure of--
(I) the provisions of law that the State involved
seeks to waive; and
(II) the specific plans of the State to ensure that
the waiver will be in compliance with subsection (b);
(iii) a process for providing public notice and comment
after the application is received by the Secretary, that is
sufficient to ensure a meaningful level of public input and
that does not impose requirements that are in addition to,
or duplicative of, requirements imposed under the
Administrative Procedures Act, or requirements that are
unreasonable or unnecessarily burdensome with respect to
State compliance;
(iv) a process for the submission to the Secretary of
periodic reports by the State concerning the implementation
of the program under the waiver; and
(v) a process for the periodic evaluation by the
Secretary of the program under the waiver.
(C) Report.--The Secretary shall annually report to
Congress concerning actions taken by the Secretary with respect
to applications for waivers under this section.
(5) Coordinated waiver process.--The Secretary shall develop a
process for coordinating and consolidating the State waiver
processes applicable under the provisions of this section, and the
existing waiver processes applicable under titles XVIII, XIX, and
XXI of the Social Security Act, and any other Federal law relating
to the provision of health care items or services. Such process
shall permit a State to submit a single application for a waiver
under any or all of such provisions.
(6) Definition.--In this section, the term ``Secretary''
means--
(A) the Secretary of Health and Human Services with respect
to waivers relating to the provisions described in subparagraph
(A) through (C) of paragraph (2); and
(B) the Secretary of the Treasury with respect to waivers
relating to the provisions described in paragraph (2)(D).
(b) Granting of Waivers.--
(1) In general.--The Secretary may grant a request for a waiver
under subsection (a)(1) only if the Secretary determines that the
State plan--
(A) will provide coverage that is at least as comprehensive
as the coverage defined in section 1302(b) and offered through
Exchanges established under this title as certified by Office
of the Actuary of the Centers for Medicare & Medicaid Services
based on sufficient data from the State and from comparable
States about their experience with programs created by this Act
and the provisions of this Act that would be waived;
(B) will provide coverage and cost sharing protections
against excessive out-of-pocket spending that are at least as
affordable as the provisions of this title would provide;
(C) will provide coverage to at least a comparable number
of its residents as the provisions of this title would provide;
(D) will not increase the Federal deficit.
(2) Requirement to enact a law.--
(A) In general.--A law described in this paragraph is a
State law that provides for State actions under a waiver under
this section, including the implementation of the State plan
under subsection (a)(1)(B).
described in subparagraph (A) and terminate the authority
provided under the waiver with respect to the State.
(c) Scope of Waiver.--
(1) In general.--The Secretary shall determine the scope of a
waiver of a requirement described in subsection (a)(2) granted to a
State under subsection (a)(1).
(2) Limitation.--The Secretary may not waive under this section
any Federal law or requirement that is not within the authority of
(d) Determinations by Secretary.--
(1) Time for determination.--The Secretary shall make a
determination under subsection (a)(1) not later than 180 days after
the receipt of an application from a State under such subsection.
(2) Effect of determination.--
(A) Granting of waivers.--If the Secretary determines to
grant a waiver under subsection (a)(1), the Secretary shall
notify the State involved of such determination and the terms
and effectiveness of such waiver.
(B) Denial of waiver.--If the Secretary determines a waiver
should not be granted under subsection (a)(1), the Secretary
shall notify the State involved, and the appropriate committees
of Congress of such determination and the reasons therefore.
(e) Term of Waiver.--No waiver under this section may extend over a
period of longer than 5 years unless the State requests continuation of
such waiver, and such request shall be deemed granted unless the
Secretary, within 90 days after the date of its submission to the
Secretary, either denies such request in writing or informs the State
in writing with respect to any additional information which is needed
in order to make a final determination with respect to the request.
(a) Health Care Choice Compacts.--
(1) In general.--Not later than July 1, 2013, the Secretary
shall, in consultation with the National Association of Insurance
Commissioners, issue regulations for the creation of health care
choice compacts under which 2 or more States may enter into an
agreement under which--
(A) 1 or more qualified health plans could be offered in
the individual markets in all such States but, except as
provided in subparagraph (B), only be subject to the laws and
regulations of the State in which the plan was written or
issued;
(B) the issuer of any qualified health plan to which the
compact applies--
(i) would continue to be subject to market conduct,
unfair trade practices, network adequacy, and consumer
protection standards (including standards relating to
rating), including addressing disputes as to the
performance of the contract, of the State in which the
purchaser resides;
(ii) would be required to be licensed in each State in
which it offers the plan under the compact or to submit to
the jurisdiction of each such State with regard to the
standards described in clause (i) (including allowing
access to records as if the insurer were licensed in the
State); and
(iii) must clearly notify consumers that the policy may
not be subject to all the laws and regulations of the State
in which the purchaser resides.
(2) State authority.--A State may not enter into an agreement
under this subsection unless the State enacts a law after the date
of the enactment of this title that specifically authorizes the
State to enter into such agreements.
(3) Approval of compacts.--The Secretary may approve interstate
health care choice compacts under paragraph (1) only if the
Secretary determines that such health care choice compact--
Exchanges established under this title;
(D) will not increase the Federal deficit; and
(E) will not weaken enforcement of laws and regulations
described in paragraph (1)(B)(i) in any State that is included
in such compact.
(4) Effective date.--A health care choice compact described in
paragraph (1) shall not take effect before January 1, 2016.
(b) Authority for Nationwide Plans.--
(1) In general.--Except as provided in paragraph (2), if an
issuer (including a group of health insurance issuers affiliated
either by common ownership and control or by the common use of a
nationally licensed service mark) of a qualified health plan in the
individual or small group market meets the requirements of this
subsection (in this subsection a ``nationwide qualified health
plan'')--
(A) the issuer of the plan may offer the nationwide
qualified health plan in the individual or small group market
in more than 1 State; and
(B) with respect to State laws mandating benefit coverage
by a health plan, only the State laws of the State in which
such plan is written or issued shall apply to the nationwide
(2) State opt-out.--A State may, by specific reference in a law
enacted after the date of enactment of this title, provide that
this subsection shall not apply to that State. Such opt-out shall
be effective until such time as the State by law revokes it.
(3) Plan requirements.--An issuer meets the requirements of
this subsection with respect to a nationwide qualified health plan
if, in the determination of the Secretary--
(A) the plan offers a benefits package that is uniform in
each State in which the plan is offered and meets the
requirements set forth in paragraphs (4) through (6);
(B) the issuer is licensed in each State in which it offers
the plan and is subject to all requirements of State law not
inconsistent with this section, including but not limited to,
the standards and requirements that a State imposes that do not
prevent the application of a requirement of part A of title
XXVII of the Public Health Service Act or a requirement of this
(C) the issuer meets all requirements of this title with
respect to a qualified health plan, including the requirement
to offer the silver and gold levels of the plan in each
Exchange in the State for the market in which the plan is
(D) the issuer determines the premiums for the plan in any
State on the basis of the rating rules in effect in that State
for the rating areas in which it is offered;
(E) the issuer offers the nationwide qualified health plan
in at least 60 percent of the participating States in the first
year in which the plan is offered, 65 percent of such States in
the second year, 70 percent of such States in the third year,
75 percent of such States in the fourth year, and 80 percent of
such States in the fifth and subsequent years;
(F) the issuer shall offer the plan in participating States
across the country, in all geographic regions, and in all
States that have adopted adjusted community rating before the
date of enactment of this Act; and
(G) the issuer clearly notifies consumers that the policy
may not contain some benefits otherwise mandated for plans in
the State in which the purchaser resides and provides a
detailed statement of the benefits offered and the benefit
differences in that State, in accordance with rules promulgated
by the Secretary.
(4) Form review for nationwide plans.--Notwithstanding any
contrary provision of State law, at least 3 months before any
nationwide qualified health plan is offered, the issuer shall file
all nationwide qualified health plan forms with the regulator in
each participating State in which the plan will be offered. An
issuer may appeal the disapproval of a nationwide qualified health
plan form to the Secretary.
(5) Applicable rules.--The Secretary shall, in consultation
with the National Association of Insurance Commissioners, issue
rules for the offering of nationwide qualified health plans under
this subsection. Nationwide qualified health plans may be offered
only after such rules have taken effect.
(6) Coverage.--The Secretary shall provide that the health
benefits coverage provided to an individual through a nationwide
qualified health plan under this subsection shall include at least
the essential benefits package described in section 1302.
(7) State law mandating benefit coverage by a health benefits
plan.--For the purposes of this subsection, a State law mandating
benefit coverage by a health plan is a law that mandates health
insurance coverage or the offer of health insurance coverage for
specific health services or specific diseases. A law that mandates
health insurance coverage or reimbursement for services provided by
certain classes of providers of health care services, or a law that
mandates that certain classes of individuals must be covered as a
group or as dependents, is not a State law mandating benefit
coverage by a health benefits plan.
(a) In General.--Each State shall, not later than January 1, 2014--
(1) include in the Federal standards or State law or regulation
the State adopts and has in effect under section 1321(b) the
provisions described in subsection (b); and
(2) establish (or enter into a contract with) 1 or more
applicable reinsurance entities to carry out the reinsurance
program under this section.
(b) Model Regulation.--
(1) In general.--In establishing the Federal standards under
section 1321(a), the Secretary, in consultation with the National
Association of Insurance Commissioners (the ``NAIC''), shall
include provisions that enable States to establish and maintain a
program under which--
(A) health insurance issuers, and third party
administrators on behalf of group health plans, are required to
make payments to an applicable reinsurance entity for any plan
year beginning in the 3-year period beginning January 1, 2014
(as specified in paragraph (3); and
(B) the applicable reinsurance entity collects payments
under subparagraph (A) and uses amounts so collected to make
reinsurance payments to health insurance issuers described in
subparagraph (A) that cover high risk individuals in the
individual market (excluding grandfathered health plans) for
any plan year beginning in such 3-year period.
(2) High-risk individual; payment amounts.--The Secretary shall
include the following in the provisions under paragraph (1):
(A) Determination of high-risk individuals.--The method by
which individuals will be identified as high risk individuals
for purposes of the reinsurance program established under this
section. Such method shall provide for identification of
individuals as high-risk individuals on the basis of--
(i) a list of at least 50 but not more than 100 medical
conditions that are identified as high-risk conditions and
that may be based on the identification of diagnostic and
procedure codes that are indicative of individuals with
pre-existing, high-risk conditions; or
(ii) any other comparable objective method of
identification recommended by the American Academy of
Actuaries.
(B) Payment amount.--The formula for determining the amount
of payments that will be paid to health insurance issuers
described in paragraph (1)(A) that insure high-risk
individuals. Such formula shall provide for the equitable
allocation of available funds through reconciliation and may be
designed--
(i) to provide a schedule of payments that specifies
the amount that will be paid for each of the conditions
identified under subparagraph (A); or
(ii) to use any other comparable method for determining
payment amounts that is recommended by the American Academy
of Actuaries and that encourages the use of care
coordination and care management programs for high risk
(3) Determination of required contributions.--
(A) In general.--The Secretary shall include in the
provisions under paragraph (1) the method for determining the
amount each health insurance issuer and group health plan
described in paragraph (1)(A) contributing to the reinsurance
program under this section is required to contribute under such
paragraph for each plan year beginning in the 36-month period
beginning January 1, 2014. The contribution amount for any plan
year may be based on the percentage of revenue of each issuer
and the total costs of providing benefits to enrollees in self-
insured plans or on a specified amount per enrollee and may be
required to be paid in advance or periodically throughout the
(B) Specific requirements.--The method under this paragraph
shall be designed so that--
(i) the contribution amount for each issuer
proportionally reflects each issuer's fully insured
commercial book of business for all major medical products
and the total value of all fees charged by the issuer and
the costs of coverage administered by the issuer as a third
party administrator;
(ii) the contribution amount can include an additional
amount to fund the administrative expenses of the
applicable reinsurance entity;
(iii) the aggregate contribution amounts for all States
shall, based on the best estimates of the NAIC and without
regard to amounts described in clause (ii), equal
$10,000,000,000 for plan years beginning in 2014,
$6,000,000,000 for plan years beginning 2015, and
$4,000,000,000 for plan years beginning in 2016; and
(iv) in addition to the aggregate contribution amounts
under clause (iii), each issuer's contribution amount for
any calendar year under clause (iii) reflects its
proportionate share of an additional $2,000,000,000 for
2014, an additional $2,000,000,000 for 2015, and an
additional $1,000,000,000 for 2016.
Nothing in this subparagraph shall be construed to preclude a
State from collecting additional amounts from issuers on a
voluntary basis.
(4) Expenditure of funds.--The provisions under paragraph (1)
shall provide that--
(A) the contribution amounts collected for any calendar
year may be allocated and used in any of the three calendar
years for which amounts are collected based on the reinsurance
needs of a particular period or to reflect experience in a
prior period; and
(B) amounts remaining unexpended as of December, 2016, may
be used to make payments under any reinsurance program of a
State in the individual market in effect in the 2-year period
beginning on January 1, 2017.
Notwithstanding the preceding sentence, any contribution amounts
described in paragraph (3)(B)(iv) shall be deposited into the
general fund of the Treasury of the United States and may not be
used for the program established under this section.
(c) Applicable Reinsurance Entity.--For purposes of this section--
(1) In general.--The term ``applicable reinsurance entity''
means a not-for-profit organization--
(A) the purpose of which is to help stabilize premiums for
coverage in the individual and small group markets in a State
during the first 3 years of operation of an Exchange for such
markets within the State when the risk of adverse selection
related to new rating rules and market changes is greatest; and
(B) the duties of which shall be to carry out the
reinsurance program under this section by coordinating the
funding and operation of the risk-spreading mechanisms designed
to implement the reinsurance program.
(2) State discretion.--A State may have more than 1 applicable
reinsurance entity to carry out the reinsurance program under this
section within the State and 2 or more States may enter into
agreements to provide for an applicable reinsurance entity to carry
out such program in all such States.
(3) Entities are tax-exempt.--An applicable reinsurance entity
established under this section shall be exempt from taxation under
chapter 1 of the Internal Revenue Code of 1986. The preceding
sentence shall not apply to the tax imposed by section 511 such
Code (relating to tax on unrelated business taxable income of an
exempt organization).
(d) Coordination With State High-risk Pools.--The State shall
eliminate or modify any State high-risk pool to the extent necessary to
carry out the reinsurance program established under this section. The
State may coordinate the State high-risk pool with such program to the
extent not inconsistent with the provisions of this section.
(a) In General.--The Secretary shall establish and administer a
program of risk corridors for calendar years 2014, 2015, and 2016 under
which a qualified health plan offered in the individual or small group
market shall participate in a payment adjustment system based on the
ratio of the allowable costs of the plan to the plan's aggregate
premiums. Such program shall be based on the program for regional
participating provider organizations under part D of title XVIII of the
(b) Payment Methodology.--
(1) Payments out.--The Secretary shall provide under the
program established under subsection (a) that if--
(A) a participating plan's allowable costs for any plan
year are more than 103 percent but not more than 108 percent of
the target amount, the Secretary shall pay to the plan an
amount equal to 50 percent of the target amount in excess of
103 percent of the target amount; and
(B) a participating plan's allowable costs for any plan
year are more than 108 percent of the target amount, the
Secretary shall pay to the plan an amount equal to the sum of
2.5 percent of the target amount plus 80 percent of allowable
costs in excess of 108 percent of the target amount.
(2) Payments in.--The Secretary shall provide under the program
established under subsection (a) that if--
year are less than 97 percent but not less than 92 percent of
the target amount, the plan shall pay to the Secretary an
amount equal to 50 percent of the excess of 97 percent of the
target amount over the allowable costs; and
year are less than 92 percent of the target amount, the plan
shall pay to the Secretary an amount equal to the sum of 2.5
percent of the target amount plus 80 percent of the excess of
92 percent of the target amount over the allowable costs.
(c) Definitions.--In this section:
(1) Allowable costs.--
(A) In general.--The amount of allowable costs of a plan
for any year is an amount equal to the total costs (other than
administrative costs) of the plan in providing benefits covered
by the plan.
(B) Reduction for risk adjustment and reinsurance
payments.--Allowable costs shall reduced by any risk adjustment
and reinsurance payments received under section 1341 and 1343.
(2) Target amount.--The target amount of a plan for any year is
an amount equal to the total premiums (including any premium
subsidies under any governmental program), reduced by the
administrative costs of the plan.
(a) In General.--
(1) Low actuarial risk plans.--Using the criteria and methods
developed under subsection (b), each State shall assess a charge on
health plans and health insurance issuers (with respect to health
insurance coverage) described in subsection (c) if the actuarial
risk of the enrollees of such plans or coverage for a year is less
than the average actuarial risk of all enrollees in all plans or
coverage in such State for such year that are not self-insured
group health plans (which are subject to the provisions of the
Employee Retirement Income Security Act of 1974).
(2) High actuarial risk plans.--Using the criteria and methods
developed under subsection (b), each State shall provide a payment
to health plans and health insurance issuers (with respect to
health insurance coverage) described in subsection (c) if the
actuarial risk of the enrollees of such plans or coverage for a
year is greater than the average actuarial risk of all enrollees in
all plans and coverage in such State for such year that are not
self-insured group health plans (which are subject to the
provisions of the Employee Retirement Income Security Act of 1974).
(b) Criteria and Methods.--The Secretary, in consultation with
States, shall establish criteria and methods to be used in carrying out
the risk adjustment activities under this section. The Secretary may
utilize criteria and methods similar to the criteria and methods
utilized under part C or D of title XVIII of the Social Security Act.
Such criteria and methods shall be included in the standards and
requirements the Secretary prescribes under section 1321.
(c) Scope.--A health plan or a health insurance issuer is described
in this subsection if such health plan or health insurance issuer
provides coverage in the individual or small group market within the
State. This subsection shall not apply to a grandfathered health plan
or the issuer of a grandfathered health plan with respect to that plan.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by inserting after section 36A the following new section:
``SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH
``(a) In General.--In the case of an applicable taxpayer, there
shall be allowed as a credit against the tax imposed by this subtitle
for any taxable year an amount equal to the premium assistance credit
amount of the taxpayer for the taxable year.
``(b) Premium Assistance Credit Amount.--For purposes of this
section--
``(1) In general.--The term `premium assistance credit amount'
means, with respect to any taxable year, the sum of the premium
assistance amounts determined under paragraph (2) with respect to
all coverage months of the taxpayer occurring during the taxable
``(2) Premium assistance amount.--The premium assistance amount
determined under this subsection with respect to any coverage month
is the amount equal to the lesser of--
``(A) the monthly premiums for such month for 1 or more
qualified health plans offered in the individual market within
a State which cover the taxpayer, the taxpayer's spouse, or any
dependent (as defined in section 152) of the taxpayer and which
were enrolled in through an Exchange established by the State
under 1311 of the Patient Protection and Affordable Care Act,
``(B) the excess (if any) of--
``(i) the adjusted monthly premium for such month for
the applicable second lowest cost silver plan with respect
to the taxpayer, over
``(ii) an amount equal to 1/12 of the product of the
applicable percentage and the taxpayer's household income
for the taxable year.
``(3) Other terms and rules relating to premium assistance
amounts.--For purposes of paragraph (2)--
``(A) Applicable percentage.--
``(i) In general.--Except as provided in clause (ii),
the applicable percentage with respect to any taxpayer for
any taxable year is equal to 2.8 percent, increased by the
number of percentage points (not greater than 7) which
bears the same ratio to 7 percentage points as--
``(I) the taxpayer's household income for the
taxable year in excess of 100 percent of the poverty
line for a family of the size involved, bears to
``(II) an amount equal to 200 percent of the
poverty line for a family of the size involved.
``(ii) Special rule for taxpayers under 133 percent of
poverty line.--If a taxpayer's household income for the
taxable year is in excess of 100 percent, but not more than
133 percent, of the poverty line for a family of the size
involved, the taxpayer's applicable percentage shall be 2
``(iii) Indexing.--In the case of taxable years
beginning in any calendar year after 2014, the Secretary
shall adjust the initial and final applicable percentages
under clause (i), and the 2 percent under clause (ii), for
the calendar year to reflect the excess of the rate of
premium growth between the preceding calendar year and 2013
over the rate of income growth for such period.
``(B) Applicable second lowest cost silver plan.--The
applicable second lowest cost silver plan with respect to any
applicable taxpayer is the second lowest cost silver plan of
the individual market in the rating area in which the taxpayer
resides which--
``(i) is offered through the same Exchange through
which the qualified health plans taken into account under
paragraph (2)(A) were offered, and
``(ii) provides--
``(I) self-only coverage in the case of an
applicable taxpayer--
``(aa) whose tax for the taxable year is
determined under section 1(c) (relating to
unmarried individuals other than surviving spouses
and heads of households) and who is not allowed a
deduction under section 151 for the taxable year
with respect to a dependent, or
``(bb) who is not described in item (aa) but
who purchases only self-only coverage, and
``(II) family coverage in the case of any other
applicable taxpayer.
If a taxpayer files a joint return and no credit is allowed
under this section with respect to 1 of the spouses by reason
of subsection (e), the taxpayer shall be treated as described
in clause (ii)(I) unless a deduction is allowed under section
151 for the taxable year with respect to a dependent other than
either spouse and subsection (e) does not apply to the
dependent.
``(C) Adjusted monthly premium.--The adjusted monthly
premium for an applicable second lowest cost silver plan is the
monthly premium which would have been charged (for the rating
area with respect to which the premiums under paragraph (2)(A)
were determined) for the plan if each individual covered under
a qualified health plan taken into account under paragraph
(2)(A) were covered by such silver plan and the premium was
adjusted only for the age of each such individual in the manner
allowed under section 2701 of the Public Health Service Act. In
the case of a State participating in the wellness discount
demonstration project under section 2705(d) of the Public
Health Service Act, the adjusted monthly premium shall be
determined without regard to any premium discount or rebate
under such project.
``(D) Additional benefits.--If--
``(i) a qualified health plan under section 1302(b)(5)
of the Patient Protection and Affordable Care Act offers
benefits in addition to the essential health benefits
required to be provided by the plan, or
``(ii) a State requires a qualified health plan under
section 1311(d)(3)(B) of such Act to cover benefits in
addition to the essential health benefits required to be
provided by the plan,
the portion of the premium for the plan properly allocable
(under rules prescribed by the Secretary of Health and Human
Services) to such additional benefits shall not be taken into
account in determining either the monthly premium or the
adjusted monthly premium under paragraph (2).
``(E) Special rule for pediatric dental coverage.--For
purposes of determining the amount of any monthly premium, if
an individual enrolls in both a qualified health plan and a
plan described in section 1311(d)(2)(B)(ii)(I) of the Patient
Protection and Affordable Care Act for any plan year, the
portion of the premium for the plan described in such section
that (under regulations prescribed by the Secretary) is
properly allocable to pediatric dental benefits which are
included in the essential health benefits required to be
provided by a qualified health plan under section 1302(b)(1)(J)
of such Act shall be treated as a premium payable for a
``(c) Definition and Rules Relating to Applicable Taxpayers,
Coverage Months, and Qualified Health Plan.--For purposes of this
``(1) Applicable taxpayer.--
``(A) In general.--The term `applicable taxpayer' means,
with respect to any taxable year, a taxpayer whose household
income for the taxable year exceeds 100 percent but does not
exceed 400 percent of an amount equal to the poverty line for a
family of the size involved.
``(B) Special rule for certain individuals lawfully present
in the united states.--If--
``(i) a taxpayer has a household income which is not
greater than 100 percent of an amount equal to the poverty
line for a family of the size involved, and
``(ii) the taxpayer is an alien lawfully present in the
United States, but is not eligible for the medicaid program
under title XIX of the Social Security Act by reason of
such alien status,
the taxpayer shall, for purposes of the credit under this
section, be treated as an applicable taxpayer with a household
income which is equal to 100 percent of the poverty line for a
``(C) Married couples must file joint return.--If the
taxpayer is married (within the meaning of section 7703) at the
close of the taxable year, the taxpayer shall be treated as an
applicable taxpayer only if the taxpayer and the taxpayer's
spouse file a joint return for the taxable year.
``(D) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(2) Coverage month.--For purposes of this subsection--
``(A) In general.--The term `coverage month' means, with
respect to an applicable taxpayer, any month if--
``(i) as of the first day of such month the taxpayer,
the taxpayer's spouse, or any dependent of the taxpayer is
covered by a qualified health plan described in subsection
(b)(2)(A) that was enrolled in through an Exchange
established by the State under section 1311 of the Patient
Protection and Affordable Care Act, and
``(ii) the premium for coverage under such plan for
such month is paid by the taxpayer (or through advance
payment of the credit under subsection (a) under section
1412 of the Patient Protection and Affordable Care Act).
``(B) Exception for minimum essential coverage.--
``(i) In general.--The term `coverage month' shall not
include any month with respect to an individual if for such
month the individual is eligible for minimum essential
coverage other than eligibility for coverage described in
section 5000A(f)(1)(C) (relating to coverage in the
individual market).
``(ii) Minimum essential coverage.--The term `minimum
essential coverage' has the meaning given such term by
section 5000A(f).
``(C) Special rule for employer-sponsored minimum essential
coverage.--For purposes of subparagraph (B)--
``(i) Coverage must be affordable.--Except as provided
in clause (iii), an employee shall not be treated as
eligible for minimum essential coverage if such coverage--
``(I) consists of an eligible employer-sponsored
plan (as defined in section 5000A(f)(2)), and
``(II) the employee's required contribution (within
the meaning of section 5000A(e)(1)(B)) with respect to
the plan exceeds 9.8 percent of the applicable
taxpayer's household income.
This clause shall also apply to an individual who is
eligible to enroll in the plan by reason of a relationship
the individual bears to the employee.
``(ii) Coverage must provide minimum value.--Except as
provided in clause (iii), an employee shall not be treated
as eligible for minimum essential coverage if such coverage
consists of an eligible employer-sponsored plan (as defined
in section 5000A(f)(2)) and the plan's share of the total
allowed costs of benefits provided under the plan is less
than 60 percent of such costs.
``(iii) Employee or family must not be covered under
employer plan.--Clauses (i) and (ii) shall not apply if the
employee (or any individual described in the last sentence
of clause (i)) is covered under the eligible employer-
sponsored plan or the grandfathered health plan.
``(iv) Indexing.--In the case of plan years beginning
in any calendar year after 2014, the Secretary shall adjust
the 9.8 percent under clause (i)(II) in the same manner as
the percentages are adjusted under subsection
(b)(3)(A)(ii).
``(3) Definitions and other rules.--
``(A) Qualified health plan.--The term `qualified health
plan' has the meaning given such term by section 1301(a) of the
Patient Protection and Affordable Care Act, except that such
term shall not include a qualified health plan which is a
catastrophic plan described in section 1302(e) of such Act.
``(B) Grandfathered health plan.--The term `grandfathered
health plan' has the meaning given such term by section 1251 of
the Patient Protection and Affordable Care Act.
``(d) Terms Relating to Income and Families.--For purposes of this
``(1) Family size.--The family size involved with respect to
any taxpayer shall be equal to the number of individuals for whom
the taxpayer is allowed a deduction under section 151 (relating to
allowance of deduction for personal exemptions) for the taxable
``(2) Household income.--
``(A) Household income.--The term `household income' means,
with respect to any taxpayer, an amount equal to the sum of--
``(i) the modified gross income of the taxpayer, plus
``(ii) the aggregate modified gross incomes of all
other individuals who--
``(I) were taken into account in determining the
taxpayer's family size under paragraph (1), and
``(II) were required to file a return of tax
imposed by section 1 for the taxable year.
``(B) Modified gross income.--The term `modified gross
income' means gross income--
``(i) decreased by the amount of any deduction
allowable under paragraph (1), (3), (4), or (10) of section
62(a),
``(ii) increased by the amount of interest received or
accrued during the taxable year which is exempt from tax
imposed by this chapter, and
``(iii) determined without regard to sections 911, 931,
and 933.
``(3) Poverty line.--
``(A) In general.--The term `poverty line' has the meaning
given that term in section 2110(c)(5) of the Social Security
Act (42 U.S.C. 1397jj(c)(5)).
``(B) Poverty line used.--In the case of any qualified
health plan offered through an Exchange for coverage during a
taxable year beginning in a calendar year, the poverty line
used shall be the most recently published poverty line as of
the 1st day of the regular enrollment period for coverage
during such calendar year.
``(e) Rules for Individuals Not Lawfully Present.--
``(1) In general.--If 1 or more individuals for whom a taxpayer
is allowed a deduction under section 151 (relating to allowance of
deduction for personal exemptions) for the taxable year (including
the taxpayer or his spouse) are individuals who are not lawfully
present--
``(A) the aggregate amount of premiums otherwise taken into
account under clauses (i) and (ii) of subsection (b)(2)(A)
shall be reduced by the portion (if any) of such premiums which
is attributable to such individuals, and
``(B) for purposes of applying this section, the
determination as to what percentage a taxpayer's household
income bears to the poverty level for a family of the size
involved shall be made under one of the following methods:
``(i) A method under which--
``(I) the taxpayer's family size is determined by
not taking such individuals into account, and
``(II) the taxpayer's household income is equal to
the product of the taxpayer's household income
(determined without regard to this subsection) and a
fraction--
``(aa) the numerator of which is the poverty
line for the taxpayer's family size determined
after application of subclause (I), and
``(bb) the denominator of which is the poverty
without regard to subclause (I).
``(ii) A comparable method reaching the same result as
the method under clause (i).
``(2) Lawfully present.--For purposes of this section, an
individual shall be treated as lawfully present only if the
individual is, and is reasonably expected to be for the entire
period of enrollment for which the credit under this section is
being claimed, a citizen or national of the United States or an
alien lawfully present in the United States.
``(3) Secretarial authority.--The Secretary of Health and Human
Services, in consultation with the Secretary, shall prescribe rules
setting forth the methods by which calculations of family size and
household income are made for purposes of this subsection. Such
rules shall be designed to ensure that the least burden is placed
on individuals enrolling in qualified health plans through an
Exchange and taxpayers eligible for the credit allowable under this
``(f) Reconciliation of Credit and Advance Credit.--
``(1) In general.--The amount of the credit allowed under this
section for any taxable year shall be reduced (but not below zero)
by the amount of any advance payment of such credit under section
1412 of the Patient Protection and Affordable Care Act.
``(2) Excess advance payments.--
``(A) In general.--If the advance payments to a taxpayer
Care Act for a taxable year exceed the credit allowed by this
section (determined without regard to paragraph (1)), the tax
imposed by this chapter for the taxable year shall be increased
by the amount of such excess.
``(B) Limitation on increase where income less than 400
percent of poverty line.--
``(i) In general.--In the case of an applicable
taxpayer whose household income is less than 400 percent of
the poverty line for the size of the family involved for
the taxable year, the amount of the increase under
subparagraph (A) shall in no event exceed $400 ($250 in the
case of a taxpayer whose tax is determined under section
1(c) for the taxable year).
``(ii) Indexing of amount.--In the case of any calendar
year beginning after 2014, each of the dollar amounts under
clause (i) shall be increased by an amount equal to--
``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year, determined
by substituting `calendar year 2013' for `calendar year
1992' in subparagraph (B) thereof.
``(g) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the provisions of this section,
including regulations which provide for--
``(1) the coordination of the credit allowed under this section
with the program for advance payment of the credit under section
1412 of the Patient Protection and Affordable Care Act, and
``(2) the application of subsection (f) where the filing status
of the taxpayer for a taxable year is different from such status
used for determining the advance payment of the credit.''.
(b) Disallowance of Deduction.--Section 280C of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subsection:
``(g) Credit for Health Insurance Premiums.--No deduction shall be
allowed for the portion of the premiums paid by the taxpayer for
coverage of 1 or more individuals under a qualified health plan which
is equal to the amount of the credit determined for the taxable year
under section 36B(a) with respect to such premiums.''.
(c) Study on Affordable Coverage.--
(1) Study and report.--
(A) In general.--Not later than 5 years after the date of
the enactment of this Act, the Comptroller General shall
conduct a study on the affordability of health insurance
coverage, including--
(i) the impact of the tax credit for qualified health
insurance coverage of individuals under section 36B of the
Internal Revenue Code of 1986 and the tax credit for
employee health insurance expenses of small employers under
section 45R of such Code on maintaining and expanding the
health insurance coverage of individuals;
(ii) the availability of affordable health benefits
plans, including a study of whether the percentage of
household income used for purposes of section 36B(c)(2)(C)
of the Internal Revenue Code of 1986 (as added by this
section) is the appropriate level for determining whether
employer-provided coverage is affordable for an employee
and whether such level may be lowered without significantly
increasing the costs to the Federal Government and reducing
employer-provided coverage; and
(iii) the ability of individuals to maintain essential
health benefits coverage (as defined in section 5000A(f) of
the Internal Revenue Code of 1986).
(B) Report.--The Comptroller General shall submit to the
appropriate committees of Congress a report on the study
conducted under subparagraph (A), together with legislative
recommendations relating to the matters studied under such
subparagraph.
(2) Appropriate committees of congress.--In this subsection,
the term ``appropriate committees of Congress'' means the Committee
on Ways and Means, the Committee on Education and Labor, and the
Committee on Energy and Commerce of the House of Representatives
and the Committee on Finance and the Committee on Health,
Education, Labor and Pensions of the Senate.
(d) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United States
Code, is amended by inserting ``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to section 36A the
following new item:
plan.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2013.
(a) In General.--In the case of an eligible insured enrolled in a
qualified health plan--
(1) the Secretary shall notify the issuer of the plan of such
eligibility; and
(2) the issuer shall reduce the cost-sharing under the plan at
the level and in the manner specified in subsection (c).
(b) Eligible Insured.--In this section, the term ``eligible
insured'' means an individual--
(1) who enrolls in a qualified health plan in the silver level
of coverage in the individual market offered through an Exchange;
(2) whose household income exceeds 100 percent but does not
exceed 400 percent of the poverty line for a family of the size
involved.
In the case of an individual described in section 36B(c)(1)(B) of the
Internal Revenue Code of 1986, the individual shall be treated as
having household income equal to 100 percent for purposes of applying
(c) Determination of Reduction in Cost-sharing.--
(1) Reduction in out-of-pocket limit.--
(A) In general.--The reduction in cost-sharing under this
subsection shall first be achieved by reducing the applicable
out-of pocket limit under section 1302(c)(1) in the case of--
(i) an eligible insured whose household income is more
than 100 percent but not more than 200 percent of the
poverty line for a family of the size involved, by two-
thirds;
(ii) an eligible insured whose household income is more
poverty line for a family of the size involved, by one-
half; and
(iii) an eligible insured whose household income is
more than 300 percent but not more than 400 percent of the
third.
(B) Coordination with actuarial value limits.--
(i) In general.--The Secretary shall ensure the
reduction under this paragraph shall not result in an
increase in the plan's share of the total allowed costs of
benefits provided under the plan above--
(I) 90 percent in the case of an eligible insured
described in paragraph (2)(A);
(II) 80 percent in the case of an eligible insured
described in paragraph (2)(B); and
(III) 70 percent in the case of an eligible insured
described in clause (ii) or (iii) of subparagraph (A).
(ii) Adjustment.--The Secretary shall adjust the out-of
pocket limits under paragraph (1) if necessary to ensure
that such limits do not cause the respective actuarial
values to exceed the levels specified in clause (i).
(2) Additional reduction for lower income insureds.--The
Secretary shall establish procedures under which the issuer of a
qualified health plan to which this section applies shall further
reduce cost-sharing under the plan in a manner sufficient to--
(A) in the case of an eligible insured whose household
income is not less than 100 percent but not more than 150
percent of the poverty line for a family of the size involved,
increase the plan's share of the total allowed costs of
benefits provided under the plan to 90 percent of such costs;
(B) in the case of an eligible insured whose household
income is more than 150 percent but not more than 200 percent
of the poverty line for a family of the size involved, increase
the plan's share of the total allowed costs of benefits
provided under the plan to 80 percent of such costs.
(3) Methods for reducing cost-sharing.--
(A) In general.--An issuer of a qualified health plan
making reductions under this subsection shall notify the
Secretary of such reductions and the Secretary shall make
periodic and timely payments to the issuer equal to the value
of the reductions.
(B) Capitated payments.--The Secretary may establish a
capitated payment system to carry out the payment of cost-
sharing reductions under this section. Any such system shall
take into account the value of the reductions and make
appropriate risk adjustments to such payments.
(4) Additional benefits.--If a qualified health plan under
section 1302(b)(5) offers benefits in addition to the essential
health benefits required to be provided by the plan, or a State
requires a qualified health plan under section 1311(d)(3)(B) to
cover benefits in addition to the essential health benefits
required to be provided by the plan, the reductions in cost-sharing
under this section shall not apply to such additional benefits.
(5) Special rule for pediatric dental plans.--If an individual
enrolls in both a qualified health plan and a plan described in
section 1311(d)(2)(B)(ii)(I) for any plan year, subsection (a)
shall not apply to that portion of any reduction in cost-sharing
under subsection (c) that (under regulations prescribed by the
Secretary) is properly allocable to pediatric dental benefits which
are included in the essential health benefits required to be
provided by a qualified health plan under section 1302(b)(1)(J).
(d) Special Rules for Indians.--
(1) Indians under 300 percent of poverty.--If an individual
enrolled in any qualified health plan in the individual market
through an Exchange is an Indian (as defined in section 4(d) of the
Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b(d))) whose household income is not more than 300 percent of
the poverty line for a family of the size involved, then, for
purposes of this section--
(A) such individual shall be treated as an eligible
insured; and
(B) the issuer of the plan shall eliminate any cost-sharing
(2) Items or services furnished through indian health
providers.--If an Indian (as so defined) enrolled in a qualified
health plan is furnished an item or service directly by the Indian
Health Service, an Indian Tribe, Tribal Organization, or Urban
Indian Organization or through referral under contract health
services--
(A) no cost-sharing under the plan shall be imposed under
the plan for such item or service; and
(B) the issuer of the plan shall not reduce the payment to
any such entity for such item or service by the amount of any
cost-sharing that would be due from the Indian but for
(3) Payment.--The Secretary shall pay to the issuer of a
qualified health plan the amount necessary to reflect the increase
in actuarial value of the plan required by reason of this
(e) Rules for Individuals Not Lawfully Present.--
(1) In general.--If an individual who is an eligible insured is
not lawfully present--
(A) no cost-sharing reduction under this section shall
apply with respect to the individual; and
(B) for purposes of applying this section, the
(i) A method under which--
(I) the taxpayer's family size is determined by not
taking such individuals into account, and
(II) the taxpayer's household income is equal to
(aa) the numerator of which is the poverty line
for the taxpayer's family size determined after
application of subclause (I), and
(bb) the denominator of which is the poverty
(ii) A comparable method reaching the same result as
(2) Lawfully present.--For purposes of this section, an
period of enrollment for which the cost-sharing reduction under
this section is being claimed, a citizen or national of the United
States or an alien lawfully present in the United States.
(3) Secretarial authority.--The Secretary, in consultation with
the Secretary of the Treasury, shall prescribe rules setting forth
the methods by which calculations of family size and household
income are made for purposes of this subsection. Such rules shall
be designed to ensure that the least burden is placed on
individuals enrolling in qualified health plans through an Exchange
and taxpayers eligible for the credit allowable under this section.
(f) Definitions and Special Rules.--In this section:
(1) In general.--Any term used in this section which is also
used in section 36B of the Internal Revenue Code of 1986 shall have
the meaning given such term by such section.
(2) Limitations on reduction.--No cost-sharing reduction shall
be allowed under this section with respect to coverage for any
month unless the month is a coverage month with respect to which a
credit is allowed to the insured (or an applicable taxpayer on
behalf of the insured) under section 36B of such Code.
(3) Data used for eligibility.--Any determination under this
section shall be made on the basis of the taxable year for which
the advance determination is made under section 1412 and not the
taxable year for which the credit under section 36B of such Code is
allowed.
PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED COST-
SHARING, AND INDIVIDUAL RESPONSIBILITY EXEMPTIONS.
(a) Establishment of Program.--The Secretary shall establish a
program meeting the requirements of this section for determining--
(1) whether an individual who is to be covered in the
individual market by a qualified health plan offered through an
Exchange, or who is claiming a premium tax credit or reduced cost-
sharing, meets the requirements of sections 1312(f)(3), 1402(e),
and 1412(d) of this title and section 36B(e) of the Internal
Revenue Code of 1986 that the individual be a citizen or national
of the United States or an alien lawfully present in the United
States;
(2) in the case of an individual claiming a premium tax credit
or reduced cost-sharing under section 36B of such Code or section
1402--
(A) whether the individual meets the income and coverage
requirements of such sections; and
(B) the amount of the tax credit or reduced cost-sharing;
(3) whether an individual's coverage under an employer-
sponsored health benefits plan is treated as unaffordable under
sections 36B(c)(2)(C) and 5000A(e)(2); and
(4) whether to grant a certification under section
1311(d)(4)(H) attesting that, for purposes of the individual
responsibility requirement under section 5000A of the Internal
Revenue Code of 1986, an individual is entitled to an exemption
from either the individual responsibility requirement or the
penalty imposed by such section.
(b) Information Required To Be Provided by Applicants.--
(1) In general.--An applicant for enrollment in a qualified
health plan offered through an Exchange in the individual market
shall provide--
(A) the name, address, and date of birth of each individual
who is to be covered by the plan (in this subsection referred
to as an ``enrollee''); and
(B) the information required by any of the following
paragraphs that is applicable to an enrollee.
(2) Citizenship or immigration status.--The following
information shall be provided with respect to every enrollee:
(A) In the case of an enrollee whose eligibility is based
on an attestation of citizenship of the enrollee, the
enrollee's social security number.
(B) In the case of an individual whose eligibility is based
on an attestation of the enrollee's immigration status, the
enrollee's social security number (if applicable) and such
identifying information with respect to the enrollee's
immigration status as the Secretary, after consultation with
the Secretary of Homeland Security, determines appropriate.
(3) Eligibility and amount of tax credit or reduced cost-
sharing.--In the case of an enrollee with respect to whom a premium
tax credit or reduced cost-sharing under section 36B of such Code
or section 1402 is being claimed, the following information:
(A) Information regarding income and family size.--The
information described in section 6103(l)(21) for the taxable
year ending with or within the second calendar year preceding
the calendar year in which the plan year begins.
(B) Changes in circumstances.--The information described in
section 1412(b)(2), including information with respect to
individuals who were not required to file an income tax return
for the taxable year described in subparagraph (A) or
individuals who experienced changes in marital status or family
size or significant reductions in income.
(4) Employer-sponsored coverage.--In the case of an enrollee
with respect to whom eligibility for a premium tax credit under
section 36B of such Code or cost-sharing reduction under section
1402 is being established on the basis that the enrollee's (or
related individual's) employer is not treated under section
36B(c)(2)(C) of such Code as providing minimum essential coverage
or affordable minimum essential coverage, the following
(A) The name, address, and employer identification number
(if available) of the employer.
(B) Whether the enrollee or individual is a full-time
employee and whether the employer provides such minimum
essential coverage.
(C) If the employer provides such minimum essential
coverage, the lowest cost option for the enrollee's or
individual's enrollment status and the enrollee's or
individual's required contribution (within the meaning of
section 5000A(e)(1)(B) of such Code) under the employer-
sponsored plan.
(D) If an enrollee claims an employer's minimum essential
coverage is unaffordable, the information described in
If an enrollee changes employment or obtains additional employment
while enrolled in a qualified health plan for which such credit or
reduction is allowed, the enrollee shall notify the Exchange of
such change or additional employment and provide the information
described in this paragraph with respect to the new employer.
(5) Exemptions from individual responsibility requirements.--In
the case of an individual who is seeking an exemption certificate
under section 1311(d)(4)(H) from any requirement or penalty imposed
by section 5000A, the following information:
(A) In the case of an individual seeking exemption based on
the individual's status as a member of an exempt religious sect
or division, as a member of a health care sharing ministry, as
an Indian, or as an individual eligible for a hardship
exemption, such information as the Secretary shall prescribe.
(B) In the case of an individual seeking exemption based on
the lack of affordable coverage or the individual's status as a
taxpayer with household income less than 100 percent of the
poverty line, the information described in paragraphs (3) and
(4), as applicable.
(c) Verification of Information Contained in Records of Specific
Federal Officials.--
(1) Information transferred to secretary.--An Exchange shall
submit the information provided by an applicant under subsection
(b) to the Secretary for verification in accordance with the
requirements of this subsection and subsection (d).
(2) Citizenship or immigration status.--
(A) Commissioner of social security.--The Secretary shall
submit to the Commissioner of Social Security the following
information for a determination as to whether the information
provided is consistent with the information in the records of
the Commissioner:
(i) The name, date of birth, and social security number
of each individual for whom such information was provided
under subsection (b)(2).
(ii) The attestation of an individual that the
individual is a citizen.
(B) Secretary of homeland security.--
(i) In general.--In the case of an individual--
(I) who attests that the individual is an alien
lawfully present in the United States; or
(II) who attests that the individual is a citizen
but with respect to whom the Commissioner of Social
Security has notified the Secretary under subsection
(e)(3) that the attestation is inconsistent with
information in the records maintained by the
Commissioner;
the Secretary shall submit to the Secretary of Homeland
Security the information described in clause (ii) for a
determination as to whether the information provided is
consistent with the information in the records of the
Secretary of Homeland Security.
(ii) Information.--The information described in clause
(ii) is the following:
(I) The name, date of birth, and any identifying
information with respect to the individual's
immigration status provided under subsection (b)(2).
(II) The attestation that the individual is an
alien lawfully present in the United States or in the
case of an individual described in clause (i)(II), the
attestation that the individual is a citizen.
(3) Eligibility for tax credit and cost-sharing reduction.--The
Secretary shall submit the information described in subsection
(b)(3)(A) provided under paragraph (3), (4), or (5) of subsection
(b) to the Secretary of the Treasury for verification of household
income and family size for purposes of eligibility.
(4) Methods.--
(A) In general.--The Secretary, in consultation with the
Secretary of the Treasury, the Secretary of Homeland Security,
and the Commissioner of Social Security, shall provide that
verifications and determinations under this subsection shall be
done--
(i) through use of an on-line system or otherwise for
the electronic submission of, and response to, the
information submitted under this subsection with respect to
an applicant; or
(ii) by determining the consistency of the information
submitted with the information maintained in the records of
the Secretary of the Treasury, the Secretary of Homeland
Security, or the Commissioner of Social Security through
such other method as is approved by the Secretary.
(B) Flexibility.--The Secretary may modify the methods used
under the program established by this section for the Exchange
and verification of information if the Secretary determines
such modifications would reduce the administrative costs and
burdens on the applicant, including allowing an applicant to
request the Secretary of the Treasury to provide the
information described in paragraph (3) directly to the Exchange
or to the Secretary. The Secretary shall not make any such
modification unless the Secretary determines that any
applicable requirements under this section and section 6103 of
the Internal Revenue Code of 1986 with respect to the
confidentiality, disclosure, maintenance, or use of information
will be met.
(d) Verification by Secretary.--In the case of information provided
under subsection (b) that is not required under subsection (c) to be
submitted to another person for verification, the Secretary shall
verify the accuracy of such information in such manner as the Secretary
determines appropriate, including delegating responsibility for
verification to the Exchange.
(e) Actions Relating to Verification.--
(1) In general.--Each person to whom the Secretary provided
information under subsection (c) shall report to the Secretary
under the method established under subsection (c)(4) the results of
its verification and the Secretary shall notify the Exchange of
such results. Each person to whom the Secretary provided
information under subsection (d) shall report to the Secretary in
such manner as the Secretary determines appropriate.
(2) Verification.--
(A) Eligibility for enrollment and premium tax credits and
cost-sharing reductions.--If information provided by an
applicant under paragraphs (1), (2), (3), and (4) of subsection
(b) is verified under subsections (c) and (d)--
(i) the individual's eligibility to enroll through the
Exchange and to apply for premium tax credits and cost-
sharing reductions shall be satisfied; and
(ii) the Secretary shall, if applicable, notify the
Secretary of the Treasury under section 1412(c) of the
amount of any advance payment to be made.
(B) Exemption from individual responsibility.--If
information provided by an applicant under subsection (b)(5) is
verified under subsections (c) and (d), the Secretary shall
issue the certification of exemption described in section
1311(d)(4)(H).
(3) Inconsistencies involving attestation of citizenship or
lawful presence.--If the information provided by any applicant
under subsection (b)(2) is inconsistent with information in the
records maintained by the Commissioner of Social Security or
Secretary of Homeland Security, whichever is applicable, the
applicant's eligibility will be determined in the same manner as an
individual's eligibility under the medicaid program is determined
under section 1902(ee) of the Social Security Act (as in effect on
January 1, 2010).
(4) Inconsistencies involving other information.--
(A) In general.--If the information provided by an
applicant under subsection (b) (other than subsection (b)(2))
is inconsistent with information in the records maintained by
persons under subsection (c) or is not verified under
subsection (d), the Secretary shall notify the Exchange and the
Exchange shall take the following actions:
(i) Reasonable effort.--The Exchange shall make a
reasonable effort to identify and address the causes of
such inconsistency, including through typographical or
other clerical errors, by contacting the applicant to
confirm the accuracy of the information, and by taking such
additional actions as the Secretary, through regulation or
other guidance, may identify.
(ii) Notice and opportunity to correct.--In the case
the inconsistency or inability to verify is not resolved
under subparagraph (A), the Exchange shall--
(I) notify the applicant of such fact;
(II) provide the applicant an opportunity to either
present satisfactory documentary evidence or resolve
the inconsistency with the person verifying the
information under subsection (c) or (d) during the 90-
day period beginning the date on which the notice
required under subclause (I) is sent to the applicant.
The Secretary may extend the 90-day period under subclause
(II) for enrollments occurring during 2014.
(B) Specific actions not involving citizenship or lawful
presence.--
(i) In general.--Except as provided in paragraph (3),
the Exchange shall, during any period before the close of
the period under subparagraph (A)(ii)(II), make any
determination under paragraphs (2), (3), and (4) of
subsection (a) on the basis of the information contained on
the application.
(ii) Eligibility or amount of credit or reduction.--If
an inconsistency involving the eligibility for, or amount
of, any premium tax credit or cost-sharing reduction is
unresolved under this subsection as of the close of the
period under subparagraph (A)(ii)(II), the Exchange shall
notify the applicant of the amount (if any) of the credit
or reduction that is determined on the basis of the records
maintained by persons under subsection (c).
(iii) Employer affordability.--If the Secretary
notifies an Exchange that an enrollee is eligible for a
premium tax credit under section 36B of such Code or cost-
sharing reduction under section 1402 because the enrollee's
(or related individual's) employer does not provide minimum
essential coverage through an employer-sponsored plan or
that the employer does provide that coverage but it is not
affordable coverage, the Exchange shall notify the employer
of such fact and that the employer may be liable for the
payment assessed under section 4980H of such Code.
(iv) Exemption.--In any case where the inconsistency
involving, or inability to verify, information provided
under subsection (b)(5) is not resolved as of the close of
the period under subparagraph (A)(ii)(II), the Exchange
shall notify an applicant that no certification of
exemption from any requirement or payment under section
5000A of such Code will be issued.
(C) Appeals process.--The Exchange shall also notify each
person receiving notice under this paragraph of the appeals
processes established under subsection (f).
(f) Appeals and Redeterminations.--
(1) In general.--The Secretary, in consultation with the
Secretary of the Treasury, the Secretary of Homeland Security, and
the Commissioner of Social Security, shall establish procedures by
which the Secretary or one of such other Federal officers--
(A) hears and makes decisions with respect to appeals of
any determination under subsection (e); and
(B) redetermines eligibility on a periodic basis in
appropriate circumstances.
(2) Employer liability.--
(A) In general.--The Secretary shall establish a separate
appeals process for employers who are notified under subsection
(e)(4)(C) that the employer may be liable for a tax imposed by
section 4980H of the Internal Revenue Code of 1986 with respect
to an employee because of a determination that the employer
does not provide minimum essential coverage through an
employer-sponsored plan or that the employer does provide that
coverage but it is not affordable coverage with respect to an
employee. Such process shall provide an employer the
opportunity to--
(i) present information to the Exchange for review of
the determination either by the Exchange or the person
making the determination, including evidence of the
employer-sponsored plan and employer contributions to the
plan; and
(ii) have access to the data used to make the
determination to the extent allowable by law.
Such process shall be in addition to any rights of appeal the
employer may have under subtitle F of such Code.
(B) Confidentiality.--Notwithstanding any provision of this
title (or the amendments made by this title) or section 6103 of
the Internal Revenue Code of 1986, an employer shall not be
entitled to any taxpayer return information with respect to an
employee for purposes of determining whether the employer is
subject to the penalty under section 4980H of such Code with
respect to the employee, except that--
(i) the employer may be notified as to the name of an
employee and whether or not the employee's income is above
or below the threshold by which the affordability of an
employer's health insurance coverage is measured; and
(ii) this subparagraph shall not apply to an employee
who provides a waiver (at such time and in such manner as
the Secretary may prescribe) authorizing an employer to
have access to the employee's taxpayer return information.
(g) Confidentiality of Applicant Information.--
(1) In general.--An applicant for insurance coverage or for a
premium tax credit or cost-sharing reduction shall be required to
provide only the information strictly necessary to authenticate
identity, determine eligibility, and determine the amount of the
credit or reduction.
(2) Receipt of information.--Any person who receives
information provided by an applicant under subsection (b) (whether
directly or by another person at the request of the applicant), or
receives information from a Federal agency under subsection (c),
(d), or (e), shall--
(A) use the information only for the purposes of, and to
the extent necessary in, ensuring the efficient operation of
the Exchange, including verifying the eligibility of an
individual to enroll through an Exchange or to claim a premium
tax credit or cost-sharing reduction or the amount of the
credit or reduction; and
(B) not disclose the information to any other person except
as provided in this section.
(h) Penalties.--
(1) False or fraudulent information.--
(A) Civil penalty.--
(i) In general.--If--
(I) any person fails to provides correct
information under subsection (b); and
(II) such failure is attributable to negligence or
disregard of any rules or regulations of the Secretary,
such person shall be subject, in addition to any other
penalties that may be prescribed by law, to a civil penalty
of not more than $25,000 with respect to any failures
involving an application for a plan year. For purposes of
this subparagraph, the terms ``negligence'' and
``disregard'' shall have the same meanings as when used in
section 6662 of the Internal Revenue Code of 1986.
(ii) Reasonable cause exception.--No penalty shall be
imposed under clause (i) if the Secretary determines that
there was a reasonable cause for the failure and that the
person acted in good faith.
(B) Knowing and willful violations.--Any person who
knowingly and willfully provides false or fraudulent
information under subsection (b) shall be subject, in addition
to any other penalties that may be prescribed by law, to a
civil penalty of not more than $250,000.
(2) Improper use or disclosure of information.--Any person who
knowingly and willfully uses or discloses information in violation
of subsection (g) shall be subject, in addition to any other
penalties that may be prescribed by law, to a civil penalty of not
more than $25,000.
(3) Limitations on liens and levies.--The Secretary (or, if
applicable, the Attorney General of the United States) shall not--
(A) file notice of lien with respect to any property of a
person by reason of any failure to pay the penalty imposed by
this subsection; or
(B) levy on any such property with respect to such failure.
(i) Study of Administration of Employer Responsibility.--
(1) In general.--The Secretary of Health and Human Services
shall, in consultation with the Secretary of the Treasury, conduct
a study of the procedures that are necessary to ensure that in the
administration of this title and section 4980H of the Internal
Revenue Code of 1986 (as added by section 1513) that the following
rights are protected:
(A) The rights of employees to preserve their right to
confidentiality of their taxpayer return information and their
right to enroll in a qualified health plan through an Exchange
if an employer does not provide affordable coverage.
(B) The rights of employers to adequate due process and
access to information necessary to accurately determine any
payment assessed on employers.
(2) Report.--Not later than January 1, 2013, the Secretary of
Health and Human Services shall report the results of the study
conducted under paragraph (1), including any recommendations for
legislative changes, to the Committees on Finance and Health,
Education, Labor and Pensions of the Senate and the Committees of
Education and Labor and Ways and Means of the House of
Representatives.
(a) In General.--The Secretary, in consultation with the Secretary
of the Treasury, shall establish a program under which--
(1) upon request of an Exchange, advance determinations are
made under section 1411 with respect to the income eligibility of
individuals enrolling in a qualified health plan in the individual
market through the Exchange for the premium tax credit allowable
under section 36B of the Internal Revenue Code of 1986 and the
cost-sharing reductions under section 1402;
(2) the Secretary notifies--
(A) the Exchange and the Secretary of the Treasury of the
advance determinations; and
(B) the Secretary of the Treasury of the name and employer
identification number of each employer with respect to whom 1
or more employee of the employer were determined to be eligible
for the premium tax credit under section 36B of the Internal
Revenue Code of 1986 and the cost-sharing reductions under
section 1402 because--
coverage but it was determined under section 36B(c)(2)(C)
of such Code to either be unaffordable to the employee or
not provide the required minimum actuarial value; and
(3) the Secretary of the Treasury makes advance payments of
such credit or reductions to the issuers of the qualified health
plans in order to reduce the premiums payable by individuals
eligible for such credit.
(b) Advance Determinations.--
(1) In general.--The Secretary shall provide under the program
established under subsection (a) that advance determination of
eligibility with respect to any individual shall be made--
(A) during the annual open enrollment period applicable to
the individual (or such other enrollment period as may be
specified by the Secretary); and
(B) on the basis of the individual's household income for
the most recent taxable year for which the Secretary, after
consultation with the Secretary of the Treasury, determines
information is available.
(2) Changes in circumstances.--The Secretary shall provide
procedures for making advance determinations on the basis of
information other than that described in paragraph (1)(B) in cases
where information included with an application form demonstrates
substantial changes in income, changes in family size or other
household circumstances, change in filing status, the filing of an
application for unemployment benefits, or other significant changes
affecting eligibility, including--
(A) allowing an individual claiming a decrease of 20
percent or more in income, or filing an application for
unemployment benefits, to have eligibility for the credit
determined on the basis of household income for a later period
or on the basis of the individual's estimate of such income for
the taxable year; and
(B) the determination of household income in cases where
the taxpayer was not required to file a return of tax imposed
by this chapter for the second preceding taxable year.
(c) Payment of Premium Tax Credits and Cost-sharing Reductions.--
(1) In general.--The Secretary shall notify the Secretary of
the Treasury and the Exchange through which the individual is
enrolling of the advance determination under section 1411.
(2) Premium tax credit.--
(A) In general.--The Secretary of the Treasury shall make
the advance payment under this section of any premium tax
credit allowed under section 36B of the Internal Revenue Code
of 1986 to the issuer of a qualified health plan on a monthly
basis (or such other periodic basis as the Secretary may
provide).
(B) Issuer responsibilities.--An issuer of a qualified
health plan receiving an advance payment with respect to an
individual enrolled in the plan shall--
(i) reduce the premium charged the insured for any
period by the amount of the advance payment for the period;
(ii) notify the Exchange and the Secretary of such
reduction;
(iii) include with each billing statement the amount by
which the premium for the plan has been reduced by reason
of the advance payment; and
(iv) in the case of any nonpayment of premiums by the
insured--
(I) notify the Secretary of such nonpayment; and
(II) allow a 3-month grace period for nonpayment of
premiums before discontinuing coverage.
(3) Cost-sharing reductions.--The Secretary shall also notify
the Secretary of the Treasury and the Exchange under paragraph (1)
if an advance payment of the cost-sharing reductions under section
1402 is to be made to the issuer of any qualified health plan with
respect to any individual enrolled in the plan. The Secretary of
the Treasury shall make such advance payment at such time and in
such amount as the Secretary specifies in the notice.
(d) No Federal Payments for Individuals Not Lawfully Present.--
Nothing in this subtitle or the amendments made by this subtitle allows
Federal payments, credits, or cost-sharing reductions for individuals
who are not lawfully present in the United States.
(e) State Flexibility.--Nothing in this subtitle or the amendments
made by this subtitle shall be construed to prohibit a State from
making payments to or on behalf of an individual for coverage under a
qualified health plan offered through an Exchange that are in addition
to any credits or cost-sharing reductions allowable to the individual
under this subtitle and such amendments.
SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH AN
EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY
(a) In General.--The Secretary shall establish a system meeting the
requirements of this section under which residents of each State may
apply for enrollment in, receive a determination of eligibility for
participation in, and continue participation in, applicable State
health subsidy programs. Such system shall ensure that if an individual
applying to an Exchange is found through screening to be eligible for
medical assistance under the State medicaid plan under title XIX, or
eligible for enrollment under a State children's health insurance
program (CHIP) under title XXI of such Act, the individual is enrolled
for assistance under such plan or program.
(b) Requirements Relating to Forms and Notice.--
(1) Requirements relating to forms.--
(A) In general.--The Secretary shall develop and provide to
each State a single, streamlined form that--
(i) may be used to apply for all applicable State
health subsidy programs within the State;
(ii) may be filed online, in person, by mail, or by
telephone;
(iii) may be filed with an Exchange or with State
officials operating one of the other applicable State
health subsidy programs; and
(iv) is structured to maximize an applicant's ability
to complete the form satisfactorily, taking into account
the characteristics of individuals who qualify for
applicable State health subsidy programs.
(B) State authority to establish form.--A State may develop
and use its own single, streamlined form as an alternative to
the form developed under subparagraph (A) if the alternative
form is consistent with standards promulgated by the Secretary
(C) Supplemental eligibility forms.--The Secretary may
allow a State to use a supplemental or alternative form in the
case of individuals who apply for eligibility that is not
determined on the basis of the household income (as defined in
section 36B of the Internal Revenue Code of 1986).
(2) Notice.--The Secretary shall provide that an applicant
filing a form under paragraph (1) shall receive notice of
eligibility for an applicable State health subsidy program without
any need to provide additional information or paperwork unless such
information or paperwork is specifically required by law when
information provided on the form is inconsistent with data used for
the electronic verification under paragraph (3) or is otherwise
insufficient to determine eligibility.
(c) Requirements Relating to Eligibility Based on Data Exchanges.--
(1) Development of secure interfaces.--Each State shall develop
for all applicable State health subsidy programs a secure,
electronic interface allowing an exchange of data (including
information contained in the application forms described in
subsection (b)) that allows a determination of eligibility for all
such programs based on a single application. Such interface shall
be compatible with the method established for data verification
under section 1411(c)(4).
(2) Data matching program.--Each applicable State health
subsidy program shall participate in a data matching arrangement
for determining eligibility for participation in the program under
paragraph (3) that--
(A) provides access to data described in paragraph (3);
(B) applies only to individuals who--
(i) receive assistance from an applicable State health
subsidy program; or
(ii) apply for such assistance--
(I) by filing a form described in subsection (b);
(II) by requesting a determination of eligibility
and authorizing disclosure of the information described
in paragraph (3) to applicable State health coverage
subsidy programs for purposes of determining and
establishing eligibility; and
(C) consistent with standards promulgated by the Secretary,
including the privacy and data security safeguards described in
section 1942 of the Social Security Act or that are otherwise
applicable to such programs.
(3) Determination of eligibility.--
(A) In general.--Each applicable State health subsidy
program shall, to the maximum extent practicable--
(i) establish, verify, and update eligibility for
participation in the program using the data matching
arrangement under paragraph (2); and
(ii) determine such eligibility on the basis of
reliable, third party data, including information described
in sections 1137, 453(i), and 1942(a) of the Social
Security Act, obtained through such arrangement.
(B) Exception.--This paragraph shall not apply in
circumstances with respect to which the Secretary determines
that the administrative and other costs of use of the data
matching arrangement under paragraph (2) outweigh its expected
gains in accuracy, efficiency, and program participation.
(4) Secretarial standards.--The Secretary shall, after
consultation with persons in possession of the data to be matched
and representatives of applicable State health subsidy programs,
promulgate standards governing the timing, contents, and procedures
for data matching described in this subsection. Such standards
shall take into account administrative and other costs and the
value of data matching to the establishment, verification, and
updating of eligibility for applicable State health subsidy
(d) Administrative Authority.--
(1) Agreements.--Subject to section 1411 and section
6103(l)(21) of the Internal Revenue Code of 1986 and any other
requirement providing safeguards of privacy and data integrity, the
Secretary may establish model agreements, and enter into
agreements, for the sharing of data under this section.
(2) Authority of exchange to contract out.--Nothing in this
section shall be construed to--
(A) prohibit contractual arrangements through which a State
medicaid agency determines eligibility for all applicable State
health subsidy programs, but only if such agency complies with
the Secretary's requirements ensuring reduced administrative
costs, eligibility errors, and disruptions in coverage; or
(B) change any requirement under title XIX that eligibility
for participation in a State's medicaid program must be
determined by a public agency.
(e) Applicable State Health Subsidy Program.--In this section, the
term ``applicable State health subsidy program'' means--
(1) the program under this title for the enrollment in
qualified health plans offered through an Exchange, including the
premium tax credits under section 36B of the Internal Revenue Code
of 1986 and cost-sharing reductions under section 1402;
(2) a State medicaid program under title XIX of the Social
Security Act;
(3) a State children's health insurance program (CHIP) under
title XXI of such Act; and
(4) a State program under section 1331 establishing qualified
basic health plans.
SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR
CERTAIN PROGRAMS.
(a) Disclosure of Taxpayer Return Information and Social Security
Numbers.--
(1) Taxpayer return information.--Subsection (l) of section
6103 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
``(21) Disclosure of return information to carry out
eligibility requirements for certain programs.--
``(A) In general.--The Secretary, upon written request from
the Secretary of Health and Human Services, shall disclose to
officers, employees, and contractors of the Department of
Health and Human Services return information of any taxpayer
whose income is relevant in determining any premium tax credit
under section 36B or any cost-sharing reduction under section
1402 of the Patient Protection and Affordable Care Act or
eligibility for participation in a State medicaid program under
title XIX of the Social Security Act, a State's children's
health insurance program under title XXI of the Social Security
Act, or a basic health program under section 1331 of Patient
Protection and Affordable Care Act. Such return information
shall be limited to--
``(i) taxpayer identity information with respect to
such taxpayer,
``(ii) the filing status of such taxpayer,
``(iii) the number of individuals for whom a deduction
is allowed under section 151 with respect to the taxpayer
(including the taxpayer and the taxpayer's spouse),
``(iv) the modified gross income (as defined in section
36B) of such taxpayer and each of the other individuals
included under clause (iii) who are required to file a
return of tax imposed by chapter 1 for the taxable year,
``(v) such other information as is prescribed by the
Secretary by regulation as might indicate whether the
taxpayer is eligible for such credit or reduction (and the
amount thereof), and
``(vi) the taxable year with respect to which the
preceding information relates or, if applicable, the fact
that such information is not available.
``(B) Information to exchange and state agencies.--The
Secretary of Health and Human Services may disclose to an
Exchange established under the Patient Protection and
Affordable Care Act or its contractors, or to a State agency
administering a State program described in subparagraph (A) or
its contractors, any inconsistency between the information
provided by the Exchange or State agency to the Secretary and
the information provided to the Secretary under subparagraph
(A).
``(C) Restriction on use of disclosed information.--Return
information disclosed under subparagraph (A) or (B) may be used
by officers, employees, and contractors of the Department of
Health and Human Services, an Exchange, or a State agency only
for the purposes of, and to the extent necessary in--
``(i) establishing eligibility for participation in the
Exchange, and verifying the appropriate amount of, any
credit or reduction described in subparagraph (A),
``(ii) determining eligibility for participation in the
State programs described in subparagraph (A).''.
(2) Social security numbers.--Section 205(c)(2)(C) of the
Social Security Act is amended by adding at the end the following
new clause:
``(x) The Secretary of Health and Human Services, and
the Exchanges established under section 1311 of the Patient
Protection and Affordable Care Act, are authorized to
collect and use the names and social security account
numbers of individuals as required to administer the
provisions of, and the amendments made by, the such Act.''.
(b) Confidentiality and Disclosure.--Paragraph (3) of section
6103(a) of such Code is amended by striking ``or (20)'' and inserting
``(20), or (21)''.
(c) Procedures and Recordkeeping Related to Disclosures.--Paragraph
(4) of section 6103(p) of such Code is amended--
(1) by inserting ``, or any entity described in subsection
(l)(21),'' after ``or (20)'' in the matter preceding subparagraph
(A),
(2) by inserting ``or any entity described in subsection
(l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
(l)(21),'' after ``or (20)'' both places it appears in the matter
after subparagraph (F).
(d) Unauthorized Disclosure or Inspection.--Paragraph (2) of
section 7213(a) of such Code is amended by striking ``or (20)'' and
inserting ``(20), or (21)''.
For purposes of determining the eligibility of any individual for
benefits or assistance, or the amount or extent of benefits or
assistance, under any Federal program or under any State or local
program financed in whole or in part with Federal funds--
(1) any credit or refund allowed or made to any individual by
reason of section 36B of the Internal Revenue Code of 1986 (as
added by section 1401) shall not be taken into account as income
and shall not be taken into account as resources for the month of
receipt and the following 2 months; and
(2) any cost-sharing reduction payment or advance payment of
the credit allowed under such section 36B that is made under
section 1402 or 1412 shall be treated as made to the qualified
health plan in which an individual is enrolled and not to that
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by inserting after section 45Q the following:
``SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.
``(a) General Rule.--For purposes of section 38, in the case of an
eligible small employer, the small employer health insurance credit
determined under this section for any taxable year in the credit period
is the amount determined under subsection (b).
``(b) Health Insurance Credit Amount.--Subject to subsection (c),
the amount determined under this subsection with respect to any
eligible small employer is equal to 50 percent (35 percent in the case
of a tax-exempt eligible small employer) of the lesser of--
``(1) the aggregate amount of nonelective contributions the
employer made on behalf of its employees during the taxable year
under the arrangement described in subsection (d)(4) for premiums
for qualified health plans offered by the employer to its employees
through an Exchange, or
``(2) the aggregate amount of nonelective contributions which
the employer would have made during the taxable year under the
arrangement if each employee taken into account under paragraph (1)
had enrolled in a qualified health plan which had a premium equal
to the average premium (as determined by the Secretary of Health
and Human Services) for the small group market in the rating area
in which the employee enrolls for coverage.
``(c) Phaseout of Credit Amount Based on Number of Employees and
Average Wages.--The amount of the credit determined under subsection
(b) without regard to this subsection shall be reduced (but not below
zero) by the sum of the following amounts:
``(1) Such amount multiplied by a fraction the numerator of
which is the total number of full-time equivalent employees of the
employer in excess of 10 and the denominator of which is 15.
which is the average annual wages of the employer in excess of the
dollar amount in effect under subsection (d)(3)(B) and the
denominator of which is such dollar amount.
``(d) Eligible Small Employer.--For purposes of this section--
``(1) In general.--The term `eligible small employer' means,
with respect to any taxable year, an employer--
``(A) which has no more than 25 full-time equivalent
employees for the taxable year,
``(B) the average annual wages of which do not exceed an
amount equal to twice the dollar amount in effect under
paragraph (3)(B) for the taxable year, and
``(C) which has in effect an arrangement described in
``(2) Full-time equivalent employees.--
``(A) In general.--The term `full-time equivalent
employees' means a number of employees equal to the number
determined by dividing--
``(i) the total number of hours of service for which
wages were paid by the employer to employees during the
taxable year, by
``(ii) 2,080.
Such number shall be rounded to the next lowest whole number if
not otherwise a whole number.
``(B) Excess hours not counted.--If an employee works in
excess of 2,080 hours of service during any taxable year, such
excess shall not be taken into account under subparagraph (A).
``(C) Hours of service.--The Secretary, in consultation
with the Secretary of Labor, shall prescribe such regulations,
rules, and guidance as may be necessary to determine the hours
of service of an employee, including rules for the application
of this paragraph to employees who are not compensated on an
hourly basis.
``(3) Average annual wages.--
``(A) In general.--The average annual wages of an eligible
small employer for any taxable year is the amount determined by
dividing--
``(i) the aggregate amount of wages which were paid by
the employer to employees during the taxable year, by
``(ii) the number of full-time equivalent employees of
the employee determined under paragraph (2) for the taxable
Such amount shall be rounded to the next lowest multiple of
$1,000 if not otherwise such a multiple.
``(B) Dollar amount.--For purposes of paragraph (1)(B)--
``(i) 2011, 2012, and 2013.--The dollar amount in
effect under this paragraph for taxable years beginning in
2011, 2012, or 2013 is $20,000.
``(ii) Subsequent years.--In the case of a taxable year
beginning in a calendar year after 2013, the dollar amount
in effect under this paragraph shall be equal to $20,000,
multiplied by the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2012' for `calendar year 1992'
in subparagraph (B) thereof.
``(4) Contribution arrangement.--An arrangement is described in
this paragraph if it requires an eligible small employer to make a
nonelective contribution on behalf of each employee who enrolls in
a qualified health plan offered to employees by the employer
through an exchange in an amount equal to a uniform percentage (not
less than 50 percent) of the premium cost of the qualified health
``(5) Seasonal worker hours and wages not counted.--For
purposes of this subsection--
``(A) In general.--The number of hours of service worked
by, and wages paid to, a seasonal worker of an employer shall
not be taken into account in determining the full-time
equivalent employees and average annual wages of the employer
unless the worker works for the employer on more than 120 days
during the taxable year.
``(B) Definition of seasonal worker.--The term `seasonal
worker' means a worker who performs labor or services on a
seasonal basis as defined by the Secretary of Labor, including
workers covered by section 500.20(s)(1) of title 29, Code of
Federal Regulations and retail workers employed exclusively
during holiday seasons.
``(e) Other Rules and Definitions.--For purposes of this section--
``(1) Employee.--
``(A) Certain employees excluded.--The term `employee'
shall not include--
``(i) an employee within the meaning of section
401(c)(1),
``(ii) any 2-percent shareholder (as defined in section
1372(b)) of an eligible small business which is an S
corporation,
``(iii) any 5-percent owner (as defined in section
416(i)(1)(B)(i)) of an eligible small business, or
``(iv) any individual who bears any of the
relationships described in subparagraphs (A) through (G) of
section 152(d)(2) to, or is a dependent described in
section 152(d)(2)(H) of, an individual described in clause
(i), (ii), or (iii).
``(B) Leased employees.--The term `employee' shall include
a leased employee within the meaning of section 414(n).
``(2) Credit period.--The term `credit period' means, with
respect to any eligible small employer, the 2-consecutive-taxable
year period beginning with the 1st taxable year in which the
employer (or any predecessor) offers 1 or more qualified health
plans to its employees through an Exchange.
``(3) Nonelective contribution.--The term `nonelective
contribution' means an employer contribution other than an employer
contribution pursuant to a salary reduction arrangement.
``(4) Wages.--The term `wages' has the meaning given such term
by section 3121(a) (determined without regard to any dollar
limitation contained in such section).
``(5) Aggregation and other rules made applicable.--
``(A) Aggregation rules.--All employers treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
shall be treated as a single employer for purposes of this
``(B) Other rules.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
``(f) Credit Made Available to Tax-exempt Eligible Small
Employers.--
``(1) In general.--In the case of a tax-exempt eligible small
employer, there shall be treated as a credit allowable under
subpart C (and not allowable under this subpart) the lesser of--
``(A) the amount of the credit determined under this
section with respect to such employer, or
``(B) the amount of the payroll taxes of the employer
during the calendar year in which the taxable year begins.
``(2) Tax-exempt eligible small employer.--For purposes of this
section, the term `tax-exempt eligible small employer' means an
eligible small employer which is any organization described in
section 501(c) which is exempt from taxation under section 501(a).
``(3) Payroll taxes.--For purposes of this subsection--
``(A) In general.--The term `payroll taxes' means--
``(i) amounts required to be withheld from the
employees of the tax-exempt eligible small employer under
section 3401(a),
``(ii) amounts required to be withheld from such
employees under section 3101(b), and
``(iii) amounts of the taxes imposed on the tax-exempt
eligible small employer under section 3111(b).
``(B) Special rule.--A rule similar to the rule of section
24(d)(2)(C) shall apply for purposes of subparagraph (A).
``(g) Application of Section for Calendar Years 2011, 2012, and
2013.--In the case of any taxable year beginning in 2011, 2012, or
2013, the following modifications to this section shall apply in
determining the amount of the credit under subsection (a):
``(1) No credit period required.--The credit shall be
determined without regard to whether the taxable year is in a
credit period and for purposes of applying this section to taxable
years beginning after 2013, no credit period shall be treated as
beginning with a taxable year beginning before 2014.
``(2) Amount of credit.--The amount of the credit determined
under subsection (b) shall be determined--
``(A) by substituting `35 percent (25 percent in the case
of a tax-exempt eligible small employer)' for `50 percent (35
percent in the case of a tax-exempt eligible small employer)',
``(B) by reference to an eligible small employer's
nonelective contributions for premiums paid for health
insurance coverage (within the meaning of section 9832(b)(1))
of an employee, and
``(C) by substituting for the average premium determined
under subsection (b)(2) the amount the Secretary of Health and
Human Services determines is the average premium for the small
group market in the State in which the employer is offering
health insurance coverage (or for such area within the State as
is specified by the Secretary).
``(3) Contribution arrangement.--An arrangement shall not fail
to meet the requirements of subsection (d)(4) solely because it
provides for the offering of insurance outside of an Exchange.
``(h) Insurance Definitions.--Any term used in this section which
is also used in the Public Health Service Act or subtitle A of title I
of the Patient Protection and Affordable Care Act shall have the
meaning given such term by such Act or subtitle.
``(i) Regulations.--The Secretary shall prescribe such regulations
including regulations to prevent the avoidance of the 2-year limit on
the credit period through the use of successor entities and the
avoidance of the limitations under subsection (c) through the use of
multiple entities.''.
(b) Credit To Be Part of General Business Credit.--Section 38(b) of
the Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (34),
by striking the period at the end of paragraph (35) and inserting ``,
plus'', and by inserting after paragraph (35) the following:
``(36) the small employer health insurance credit determined
under section 45R.''.
(c) Credit Allowed Against Alternative Minimum Tax.--Section
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified
credits) is amended by redesignating clauses (vi), (vii), and (viii) as
clauses (vii), (viii), and (ix), respectively, and by inserting after
clause (v) the following new clause:
``(vi) the credit determined under section 45R,''.
(d) Disallowance of Deduction for Certain Expenses for Which Credit
Allowed.--
(1) In general.--Section 280C of the Internal Revenue Code of
1986 (relating to disallowance of deduction for certain expenses
for which credit allowed), as amended by section 1401(b), is
amended by adding at the end the following new subsection:
``(h) Credit for Employee Health Insurance Expenses of Small
Employers.--No deduction shall be allowed for that portion of the
premiums for qualified health plans (as defined in section 1301(a) of
the Patient Protection and Affordable Care Act), or for health
insurance coverage in the case of taxable years beginning in 2011,
2012, or 2013, paid by an employer which is equal to the amount of the
credit determined under section 45R(a) with respect to the premiums.''.
(2) Deduction for expiring credits.--Section 196(c) of such
Code is amended by striking ``and'' at the end of paragraph (12),
by striking the period at the end of paragraph (13) and inserting
``, and'', and by adding at the end the following new paragraph:
under section 45R(a).''.
(e) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``Sec. 45R. Employee health insurance expenses of small employers.''.
(f) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
(2) Minimum tax.--The amendments made by subsection (c) shall
apply to credits determined under section 45R of the Internal
Revenue Code of 1986 in taxable years beginning after December 31,
2010, and to carrybacks of such credits.
(a) Findings.--Congress makes the following findings:
(1) In general.--The individual responsibility requirement
provided for in this section (in this subsection referred to as the
``requirement'') is commercial and economic in nature, and
substantially affects interstate commerce, as a result of the
effects described in paragraph (2).
(2) Effects on the national economy and interstate commerce.--
The effects described in this paragraph are the following:
(A) The requirement regulates activity that is commercial
and economic in nature: economic and financial decisions about
how and when health care is paid for, and when health insurance
is purchased.
(B) Health insurance and health care services are a
significant part of the national economy. National health
spending is projected to increase from $2,500,000,000,000, or
17.6 percent of the economy, in 2009 to $4,700,000,000,000 in
2019. Private health insurance spending is projected to be
$854,000,000,000 in 2009, and pays for medical supplies, drugs,
and equipment that are shipped in interstate commerce. Since
most health insurance is sold by national or regional health
insurance companies, health insurance is sold in interstate
commerce and claims payments flow through interstate commerce.
(C) The requirement, together with the other provisions of
this Act, will add millions of new consumers to the health
insurance market, increasing the supply of, and demand for,
health care services. According to the Congressional Budget
Office, the requirement will increase the number and share of
Americans who are insured.
(D) The requirement achieves near-universal coverage by
building upon and strengthening the private employer-based
health insurance system, which covers 176,000,000 Americans
nationwide. In Massachusetts, a similar requirement has
strengthened private employer-based coverage: despite the
economic downturn, the number of workers offered employer-based
coverage has actually increased.
(E) Half of all personal bankruptcies are caused in part by
medical expenses. By significantly increasing health insurance
coverage, the requirement, together with the other provisions
of this Act, will improve financial security for families.
(F) Under the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act
(42 U.S.C. 201 et seq.), and this Act, the Federal Government
has a significant role in regulating health insurance which is
in interstate commerce.
(G) Under sections 2704 and 2705 of the Public Health
Service Act (as added by section 1201 of this Act), if there
were no requirement, many individuals would wait to purchase
health insurance until they needed care. By significantly
increasing health insurance coverage, the requirement, together
with the other provisions of this Act, will minimize this
adverse selection and broaden the health insurance risk pool to
include healthy individuals, which will lower health insurance
premiums. The requirement is essential to creating effective
health insurance markets in which improved health insurance
products that are guaranteed issue and do not exclude coverage
of pre-existing conditions can be sold.
(H) Administrative costs for private health insurance,
which were $90,000,000,000 in 2006, are 26 to 30 percent of
premiums in the current individual and small group markets. By
significantly increasing health insurance coverage and the size
of purchasing pools, which will increase economies of scale,
the requirement, together with the other provisions of this
Act, will significantly reduce administrative costs and lower
health insurance premiums. The requirement is essential to
creating effective health insurance markets that do not require
underwriting and eliminate its associated administrative costs.
(3) Supreme court ruling.--In United States v. South-Eastern
Underwriters Association (322 U.S. 533 (1944)), the Supreme Court
of the United States ruled that insurance is interstate commerce
subject to Federal regulation.
(b) In General.--Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
``Sec. 5000A. Requirement to maintain minimum essential coverage.
``(a) Requirement To Maintain Minimum Essential Coverage.--An
applicable individual shall for each month beginning after 2013 ensure
that the individual, and any dependent of the individual who is an
applicable individual, is covered under minimum essential coverage for
such month.
``(b) Shared Responsibility Payment.--
``(1) In general.--If an applicable individual fails to meet
the requirement of subsection (a) for 1 or more months during any
calendar year beginning after 2013, then, except as provided in
subsection (d), there is hereby imposed a penalty with respect to
the individual in the amount determined under subsection (c).
``(2) Inclusion with return.--Any penalty imposed by this
section with respect to any month shall be included with a
taxpayer's return under chapter 1 for the taxable year which
includes such month.
``(3) Payment of penalty.--If an individual with respect to
whom a penalty is imposed by this section for any month--
``(A) is a dependent (as defined in section 152) of another
taxpayer for the other taxpayer's taxable year including such
month, such other taxpayer shall be liable for such penalty, or
``(B) files a joint return for the taxable year including
such month, such individual and the spouse of such individual
shall be jointly liable for such penalty.
``(c) Amount of Penalty.--
``(1) In general.--The penalty determined under this subsection
for any month with respect to any individual is an amount equal to
\1/12\ of the applicable dollar amount for the calendar year.
``(2) Dollar limitation.--The amount of the penalty imposed by
this section on any taxpayer for any taxable year with respect to
all individuals for whom the taxpayer is liable under subsection
(b)(3) shall not exceed an amount equal to 300 percent the
applicable dollar amount (determined without regard to paragraph
(3)(C)) for the calendar year with or within which the taxable year
``(3) Applicable dollar amount.--For purposes of paragraph
(1)--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), the applicable dollar amount is $750.
``(B) Phase in.--The applicable dollar amount is $95 for
2014 and $350 for 2015.
``(C) Special rule for individuals under age 18.--If an
applicable individual has not attained the age of 18 as of the
beginning of a month, the applicable dollar amount with respect
to such individual for the month shall be equal to one-half of
the applicable dollar amount for the calendar year in which the
month occurs.
``(D) Indexing of amount.--In the case of any calendar year
beginning after 2016, the applicable dollar amount shall be
equal to $750, increased by an amount equal to--
``(i) $750, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
``(4) Terms relating to income and families.--For purposes of
``(A) Family size.--The family size involved with respect
to any taxpayer shall be equal to the number of individuals for
whom the taxpayer is allowed a deduction under section 151
(relating to allowance of deduction for personal exemptions)
``(B) Household income.--The term `household income' means,
with respect to any taxpayer for any taxable year, an amount
equal to the sum of--
``(C) Modified gross income.--The term `modified gross
``(D) Poverty line.--
``(i) In general.--The term `poverty line' has the
meaning given that term in section 2110(c)(5) of the Social
Security Act (42 U.S.C. 1397jj(c)(5)).
``(ii) Poverty line used.--In the case of any taxable
year ending with or within a calendar year, the poverty
line used shall be the most recently published poverty line
as of the 1st day of such calendar year.
``(d) Applicable Individual.--For purposes of this section--
``(1) In general.--The term `applicable individual' means, with
respect to any month, an individual other than an individual
described in paragraph (2), (3), or (4).
``(2) Religious exemptions.--
``(A) Religious conscience exemption.--Such term shall not
include any individual for any month if such individual has in
effect an exemption under section 1311(d)(4)(H) of the Patient
Protection and Affordable Care Act which certifies that such
individual is a member of a recognized religious sect or
division thereof described in section 1402(g)(1) and an
adherent of established tenets or teachings of such sect or
division as described in such section.
``(B) Health care sharing ministry.--
``(i) In general.--Such term shall not include any
individual for any month if such individual is a member of
a health care sharing ministry for the month.
``(ii) Health care sharing ministry.--The term `health
care sharing ministry' means an organization--
``(I) which is described in section 501(c)(3) and
is exempt from taxation under section 501(a),
``(II) members of which share a common set of
ethical or religious beliefs and share medical expenses
among members in accordance with those beliefs and
without regard to the State in which a member resides
or is employed,
``(III) members of which retain membership even
after they develop a medical condition,
``(IV) which (or a predecessor of which) has been
in existence at all times since December 31, 1999, and
medical expenses of its members have been shared
continuously and without interruption since at least
December 31, 1999, and
``(V) which conducts an annual audit which is
performed by an independent certified public accounting
firm in accordance with generally accepted accounting
principles and which is made available to the public
``(3) Individuals not lawfully present.--Such term shall not
include an individual for any month if for the month the individual
is not a citizen or national of the United States or an alien
lawfully present in the United States.
``(4) Incarcerated individuals.--Such term shall not include an
individual for any month if for the month the individual is
incarcerated, other than incarceration pending the disposition of
``(e) Exemptions.--No penalty shall be imposed under subsection (a)
with respect to--
``(1) Individuals who cannot afford coverage.--
``(A) In general.--Any applicable individual for any month
if the applicable individual's required contribution
(determined on an annual basis) for coverage for the month
exceeds 8 percent of such individual's household income for the
taxable year described in section 1412(b)(1)(B) of the Patient
Protection and Affordable Care Act. For purposes of applying
this subparagraph, the taxpayer's household income shall be
increased by any exclusion from gross income for any portion of
the required contribution made through a salary reduction
``(B) Required contribution.--For purposes of this
paragraph, the term `required contribution' means--
``(i) in the case of an individual eligible to purchase
minimum essential coverage consisting of coverage through
an eligible-employer-sponsored plan, the portion of the
annual premium which would be paid by the individual
(without regard to whether paid through salary reduction or
otherwise) for self-only coverage, or
``(ii) in the case of an individual eligible only to
purchase minimum essential coverage described in subsection
(f)(1)(C), the annual premium for the lowest cost bronze
plan available in the individual market through the
Exchange in the State in the rating area in which the
individual resides (without regard to whether the
individual purchased a qualified health plan through the
Exchange), reduced by the amount of the credit allowable
under section 36B for the taxable year (determined as if
the individual was covered by a qualified health plan
offered through the Exchange for the entire taxable year).
``(C) Special rules for individuals related to employees.--
For purposes of subparagraph (B)(i), if an applicable
individual is eligible for minimum essential coverage through
an employer by reason of a relationship to an employee, the
determination shall be made by reference to the affordability
of the coverage to the employee.
``(D) Indexing.--In the case of plan years beginning in any
calendar year after 2014, subparagraph (A) shall be applied by
substituting for `8 percent' the percentage the Secretary of
Health and Human Services determines reflects the excess of the
rate of premium growth between the preceding calendar year and
2013 over the rate of income growth for such period.
``(2) Taxpayers with income under 100 percent of poverty
line.--Any applicable individual for any month during a calendar
year if the individual's household income for the taxable year
described in section 1412(b)(1)(B) of the Patient Protection and
Affordable Care Act is less than 100 percent of the poverty line
for the size of the family involved (determined in the same manner
as under subsection (b)(4)).
``(3) Members of indian tribes.--Any applicable individual for
any month during which the individual is a member of an Indian
tribe (as defined in section 45A(c)(6)).
``(4) Months during short coverage gaps.--
``(A) In general.--Any month the last day of which occurred
during a period in which the applicable individual was not
covered by minimum essential coverage for a continuous period
of less than 3 months.
``(B) Special rules.--For purposes of applying this
paragraph--
``(i) the length of a continuous period shall be
determined without regard to the calendar years in which
months in such period occur,
``(ii) if a continuous period is greater than the
period allowed under subparagraph (A), no exception shall
be provided under this paragraph for any month in the
period, and
``(iii) if there is more than 1 continuous period
described in subparagraph (A) covering months in a calendar
year, the exception provided by this paragraph shall only
apply to months in the first of such periods.
The Secretary shall prescribe rules for the collection of the
penalty imposed by this section in cases where continuous
periods include months in more than 1 taxable year.
``(5) Hardships.--Any applicable individual who for any month
is determined by the Secretary of Health and Human Services under
section 1311(d)(4)(H) to have suffered a hardship with respect to
the capability to obtain coverage under a qualified health plan.
``(f) Minimum Essential Coverage.--For purposes of this section--
``(1) In general.--The term `minimum essential coverage' means
any of the following:
``(A) Government sponsored programs.--Coverage under--
``(i) the Medicare program under part A of title XVIII
of the Social Security Act,
``(ii) the Medicaid program under title XIX of the
Social Security Act,
``(iii) the CHIP program under title XXI of the Social
Security Act,
``(iv) the TRICARE for Life program,
``(v) the veteran's health care program under chapter
17 of title 38, United States Code, or
``(vi) a health plan under section 2504(e) of title 22,
United States Code (relating to Peace Corps volunteers).
``(B) Employer-sponsored plan.--Coverage under an eligible
employer-sponsored plan.
``(C) Plans in the individual market.--Coverage under a
health plan offered in the individual market within a State.
``(D) Grandfathered health plan.--Coverage under a
grandfathered health plan.
``(E) Other coverage.--Such other health benefits coverage,
such as a State health benefits risk pool, as the Secretary of
Health and Human Services, in coordination with the Secretary,
recognizes for purposes of this subsection.
``(2) Eligible employer-sponsored plan.--The term `eligible
employer-sponsored plan' means, with respect to any employee, a
group health plan or group health insurance coverage offered by an
employer to the employee which is--
``(A) a governmental plan (within the meaning of section
2791(d)(8) of the Public Health Service Act), or
``(B) any other plan or coverage offered in the small or
large group market within a State.
Such term shall include a grandfathered health plan described in
paragraph (1)(D) offered in a group market.
``(3) Excepted benefits not treated as minimum essential
coverage.--The term `minimum essential coverage' shall not include
health insurance coverage which consists of coverage of excepted
benefits--
``(A) described in paragraph (1) of subsection (c) of
section 2791 of the Public Health Service Act; or
``(B) described in paragraph (2), (3), or (4) of such
subsection if the benefits are provided under a separate
policy, certificate, or contract of insurance.
``(4) Individuals residing outside united states or residents
of territories.--Any applicable individual shall be treated as
having minimum essential coverage for any month--
``(A) if such month occurs during any period described in
subparagraph (A) or (B) of section 911(d)(1) which is
applicable to the individual, or
``(B) if such individual is a bona fide resident of any
possession of the United States (as determined under section
937(a)) for such month.
``(5) Insurance-related terms.--Any term used in this section
which is also used in title I of the Patient Protection and
Affordable Care Act shall have the same meaning as when used in
such title.
``(g) Administration and Procedure.--
``(1) In general.--The penalty provided by this section shall
be paid upon notice and demand by the Secretary, and except as
provided in paragraph (2), shall be assessed and collected in the
same manner as an assessable penalty under subchapter B of chapter
``(2) Special rules.--Notwithstanding any other provision of
law--
``(A) Waiver of criminal penalties.--In the case of any
failure by a taxpayer to timely pay any penalty imposed by this
section, such taxpayer shall not be subject to any criminal
prosecution or penalty with respect to such failure.
``(B) Limitations on liens and levies.--The Secretary shall
not--
``(i) file notice of lien with respect to any property
of a taxpayer by reason of any failure to pay the penalty
imposed by this section, or
``(ii) levy on any such property with respect to such
failure.''.
(c) Clerical Amendment.--The table of chapters for subtitle D of
the Internal Revenue Code of 1986 is amended by inserting after the
item relating to chapter 47 the following new item:
``Chapter 48--Maintenance of Minimum Essential Coverage.''.
(d) Effective Date.--The amendments made by this section shall
(a) In General.--Part III of subchapter A of chapter 61 of the
Internal Revenue Code of 1986 is amended by inserting after subpart C
the following new subpart:
``Subpart D--Information Regarding Health Insurance Coverage
``Sec. 6055. Reporting of health insurance coverage.
``(a) In General.--Every person who provides minimum essential
coverage to an individual during a calendar year shall, at such time as
the Secretary may prescribe, make a return described in subsection (b).
``(b) Form and Manner of Return.--
``(1) In general.--A return is described in this subsection if
such return--
``(A) is in such form as the Secretary may prescribe, and
``(B) contains--
``(i) the name, address and TIN of the primary insured
and the name and TIN of each other individual obtaining
coverage under the policy,
``(ii) the dates during which such individual was
covered under minimum essential coverage during the
calendar year,
``(iii) in the case of minimum essential coverage which
consists of health insurance coverage, information
concerning--
``(I) whether or not the coverage is a qualified
health plan offered through an Exchange established
under section 1311 of the Patient Protection and
Affordable Care Act, and
``(II) in the case of a qualified health plan, the
amount (if any) of any advance payment under section
1412 of the Patient Protection and Affordable Care Act
of any cost-sharing reduction under section 1402 of
such Act or of any premium tax credit under section 36B
with respect to such coverage, and
``(iv) such other information as the Secretary may
require.
``(2) Information relating to employer-provided coverage.--If
minimum essential coverage provided to an individual under
subsection (a) consists of health insurance coverage of a health
insurance issuer provided through a group health plan of an
employer, a return described in this subsection shall include--
``(A) the name, address, and employer identification number
of the employer maintaining the plan,
``(B) the portion of the premium (if any) required to be
paid by the employer, and
``(C) if the health insurance coverage is a qualified
health plan in the small group market offered through an
Exchange, such other information as the Secretary may require
for administration of the credit under section 45R (relating to
credit for employee health insurance expenses of small
employers).
``(c) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Reported.--
``(1) In general.--Every person required to make a return under
subsection (a) shall furnish to each individual whose name is
required to be set forth in such return a written statement
showing--
``(A) the name and address of the person required to make
such return and the phone number of the information contact for
such person, and
``(B) the information required to be shown on the return
with respect to such individual.
``(2) Time for furnishing statements.--The written statement
required under paragraph (1) shall be furnished on or before
January 31 of the year following the calendar year for which the
return under subsection (a) was required to be made.
``(d) Coverage Provided by Governmental Units.--In the case of
coverage provided by any governmental unit or any agency or
instrumentality thereof, the officer or employee who enters into the
agreement to provide such coverage (or the person appropriately
designated for purposes of this section) shall make the returns and
statements required by this section.
``(e) Minimum Essential Coverage.--For purposes of this section,
the term `minimum essential coverage' has the meaning given such term
by section 5000A(f).''.
(b) Assessable Penalties.--
(1) Subparagraph (B) of section 6724(d)(1) of the Internal
Revenue Code of 1986 (relating to definitions) is amended by
striking ``or'' at the end of clause (xxii), by striking ``and'' at
the end of clause (xxiii) and inserting ``or'', and by inserting
after clause (xxiii) the following new clause:
``(xxiv) section 6055 (relating to returns relating to
information regarding health insurance coverage), and''.
(2) Paragraph (2) of section 6724(d) of such Code is amended by
striking ``or'' at the end of subparagraph (EE), by striking the
period at the end of subparagraph (FF) and inserting ``, or'' and
by inserting after subparagraph (FF) the following new
subparagraph:
``(GG) section 6055(c) (relating to statements relating to
information regarding health insurance coverage).''.
(c) Notification of Nonenrollment.--Not later than June 30 of each
year, the Secretary of the Treasury, acting through the Internal
Revenue Service and in consultation with the Secretary of Health and
Human Services, shall send a notification to each individual who files
an individual income tax return and who is not enrolled in minimum
essential coverage (as defined in section 5000A of the Internal Revenue
Code of 1986). Such notification shall contain information on the
services available through the Exchange operating in the State in which
such individual resides.
(d) Conforming Amendment.--The table of subparts for part III of
subchapter A of chapter 61 of such Code is amended by inserting after
the item relating to subpart C the following new item:
``subpart d--information regarding health insurance coverage''.
apply to calendar years beginning after 2013.
The Fair Labor Standards Act of 1938 is amended by inserting after
section 18 (29 U.S.C. 218) the following:
``SEC. 18A. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.
``In accordance with regulations promulgated by the Secretary, an
employer to which this Act applies that has more than 200 full-time
employees and that offers employees enrollment in 1 or more health
benefits plans shall automatically enroll new full-time employees in
one of the plans offered (subject to any waiting period authorized by
law) and to continue the enrollment of current employees in a health
benefits plan offered through the employer. Any automatic enrollment
program shall include adequate notice and the opportunity for an
employee to opt out of any coverage the individual or employee were
automatically enrolled in. Nothing in this section shall be construed
to supersede any State law which establishes, implements, or continues
in effect any standard or requirement relating to employers in
connection with payroll except to the extent that such standard or
requirement prevents an employer from instituting the automatic
enrollment program under this section.''.
SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE
section 18A (as added by section 1513) the following:
``SEC. 18B. NOTICE TO EMPLOYEES.
``(a) In General.--In accordance with regulations promulgated by
the Secretary, an employer to which this Act applies, shall provide to
each employee at the time of hiring (or with respect to current
employees, not later than March 1, 2013), written notice--
``(1) informing the employee of the existence of an Exchange,
including a description of the services provided by such Exchange,
and the manner in which the employee may contact the Exchange to
request assistance;
``(2) if the employer plan's share of the total allowed costs
of benefits provided under the plan is less than 60 percent of such
costs, that the employee may be eligible for a premium tax credit
under section 36B of the Internal Revenue Code of 1986 and a cost
sharing reduction under section 1402 of the Patient Protection and
Affordable Care Act if the employee purchases a qualified health
plan through the Exchange; and
``(3) if the employee purchases a qualified health plan through
the Exchange, the employee will lose the employer contribution (if
any) to any health benefits plan offered by the employer and that
all or a portion of such contribution may be excludable from income
for Federal income tax purposes.
``(b) Effective Date.--Subsection (a) shall take effect with
respect to employers in a State beginning on March 1, 2013.''.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH
COVERAGE.
``(a) Large Employers Not Offering Health Coverage.--If--
``(1) any applicable large employer fails to offer to its full-
time employees (and their dependents) the opportunity to enroll in
minimum essential coverage under an eligible employer-sponsored
plan (as defined in section 5000A(f)(2)) for any month, and
``(2) at least one full-time employee of the applicable large
employer has been certified to the employer under section 1411 of
the Patient Protection and Affordable Care Act as having enrolled
for such month in a qualified health plan with respect to which an
applicable premium tax credit or cost-sharing reduction is allowed
or paid with respect to the employee,
then there is hereby imposed on the employer an assessable payment
equal to the product of the applicable payment amount and the number of
individuals employed by the employer as full-time employees during such
month.
``(b) Large Employers With Waiting Periods Exceeding 30 Days.--
``(1) In general.--In the case of any applicable large employer
which requires an extended waiting period to enroll in any minimum
essential coverage under an employer-sponsored plan (as defined in
section 5000A(f)(2)), there is hereby imposed on the employer an
assessable payment, in the amount specified in paragraph (2), for
each full-time employee of the employer to whom the extended
waiting period applies.
``(2) Amount.--For purposes of paragraph (1), the amount
specified in this paragraph for a full-time employee is--
``(A) in the case of an extended waiting period which
exceeds 30 days but does not exceed 60 days, $400, and
``(B) in the case of an extended waiting period which
exceeds 60 days, $600.
``(3) Extended waiting period.--The term `extended waiting
period' means any waiting period (as defined in section 2701(b)(4)
of the Public Health Service Act) which exceeds 30 days.
``(c) Large Employers Offering Coverage With Employees Who Qualify
for Premium Tax Credits or Cost-sharing Reductions.--
``(1) In general.--If--
``(A) an applicable large employer offers to its full-time
employees (and their dependents) the opportunity to enroll in
``(B) 1 or more full-time employees of the applicable large
employer has been certified to the employer under section 1411
of the Patient Protection and Affordable Care Act as having
enrolled for such month in a qualified health plan with respect
to which an applicable premium tax credit or cost-sharing
reduction is allowed or paid with respect to the employee,
equal to the product of the number of full-time employees of the
applicable large employer described in subparagraph (B) for such
month and 400 percent of the applicable payment amount.
``(2) Overall limitation.--The aggregate amount of tax
determined under paragraph (1) with respect to all employees of an
applicable large employer for any month shall not exceed the
product of the applicable payment amount and the number of
individuals employed by the employer as full-time employees during
``(d) Definitions and Special Rules.--For purposes of this
``(1) Applicable payment amount.--The term `applicable payment
amount' means, with respect to any month, \1/12\ of $750.
``(2) Applicable large employer.--
``(A) In general.--The term `applicable large employer'
means, with respect to a calendar year, an employer who
employed an average of at least 50 full-time employees on
business days during the preceding calendar year.
``(B) Exemption for certain employers.--
``(i) In general.--An employer shall not be considered
to employ more than 50 full-time employees if--
``(I) the employer's workforce exceeds 50 full-time
employees for 120 days or fewer during the calendar
year, and
``(II) the employees in excess of 50 employed
during such 120-day period were seasonal workers.
``(ii) Definition of seasonal workers.--The term
`seasonal worker' means a worker who performs labor or
services on a seasonal basis as defined by the Secretary of
Labor, including workers covered by section 500.20(s)(1) of
title 29, Code of Federal Regulations and retail workers
employed exclusively during holiday seasons.
``(C) Rules for determining employer size.--For purposes of
this paragraph--
``(i) Application of aggregation rule for employers.--
All persons treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986 shall be treated as 1 employer.
``(ii) Employers not in existence in preceding year.--
In the case of an employer which was not in existence
throughout the preceding calendar year, the determination
of whether such employer is an applicable large employer
shall be based on the average number of employees that it
is reasonably expected such employer will employ on
business days in the current calendar year.
``(iii) Predecessors.--Any reference in this subsection
to an employer shall include a reference to any predecessor
of such employer.
``(3) Applicable premium tax credit and cost-sharing
reduction.--The term `applicable premium tax credit and cost-
sharing reduction' means--
``(A) any premium tax credit allowed under section 36B,
``(B) any cost-sharing reduction under section 1402 of the
Patient Protection and Affordable Care Act, and
``(C) any advance payment of such credit or reduction under
section 1412 of such Act.
``(4) Full-time employee.--
``(A) In general.--The term `full-time employee' means an
employee who is employed on average at least 30 hours of
service per week.
``(B) Hours of service.--The Secretary, in consultation
``(5) Inflation adjustment.--
``(A) In general.--In the case of any calendar year after
2014, each of the dollar amounts in subsection (b)(2) and
(d)(1) shall be increased by an amount equal to the product
of--
``(i) such dollar amount, and
``(ii) the premium adjustment percentage (as defined in
section 1302(c)(4) of the Patient Protection and Affordable
Care Act) for the calendar year.
``(B) Rounding.--If the amount of any increase under
subparagraph (A) is not a multiple of $10, such increase shall
be rounded to the next lowest multiple of $10.
``(6) Other definitions.--Any term used in this section which
is also used in the Patient Protection and Affordable Care Act
shall have the same meaning as when used in such Act.
``(7) Tax nondeductible.--For denial of deduction for the tax
imposed by this section, see section 275(a)(6).
``(e) Administration and Procedure.--
``(1) In general.--Any assessable payment provided by this
section shall be paid upon notice and demand by the Secretary, and
shall be assessed and collected in the same manner as an assessable
penalty under subchapter B of chapter 68.
``(2) Time for payment.--The Secretary may provide for the
payment of any assessable payment provided by this section on an
annual, monthly, or other periodic basis as the Secretary may
prescribe.
``(3) Coordination with credits, etc..--The Secretary shall
prescribe rules, regulations, or guidance for the repayment of any
assessable payment (including interest) if such payment is based on
the allowance or payment of an applicable premium tax credit or
cost-sharing reduction with respect to an employee, such allowance
or payment is subsequently disallowed, and the assessable payment
would not have been required to be made but for such allowance or
payment.''.
(b) Clerical Amendment.--The table of sections for chapter 43 of
such Code is amended by adding at the end the following new item:
coverage.''.
(c) Study and Report of Effect of Tax on Workers' Wages.--
(1) In general.--The Secretary of Labor shall conduct a study
to determine whether employees' wages are reduced by reason of the
application of the assessable payments under section 4980H of the
Internal Revenue Code of 1986 (as added by the amendments made by
this section). The Secretary shall make such determination on the
basis of the National Compensation Survey published by the Bureau
of Labor Statistics.
(2) Report.--The Secretary shall report the results of the
study under paragraph (1) to the Committee on Ways and Means of the
House of Representatives and to the Committee on Finance of the
apply to months beginning after December 31, 2013.
(a) In General.--Subpart D of part III of subchapter A of chapter
61 of the Internal Revenue Code of 1986, as added by section 1502, is
amended by inserting after section 6055 the following new section:
``SEC. 6056. LARGE EMPLOYERS REQUIRED TO REPORT ON HEALTH INSURANCE
``(a) In General.--Every applicable large employer required to meet
the requirements of section 4980H with respect to its full-time
employees during a calendar year shall, at such time as the Secretary
may prescribe, make a return described in subsection (b).
``(b) Form and Manner of Return.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, date, and employer identification number of
the employer,
``(B) a certification as to whether the employer offers to
its full-time employees (and their dependents) the opportunity
to enroll in minimum essential coverage under an eligible
employer-sponsored plan (as defined in section 5000A(f)(2)),
``(C) if the employer certifies that the employer did offer
to its full-time employees (and their dependents) the
opportunity to so enroll--
``(i) the length of any waiting period (as defined in
section 2701(b)(4) of the Public Health Service Act) with
respect to such coverage,
``(ii) the months during the calendar year for which
coverage under the plan was available,
``(iii) the monthly premium for the lowest cost option
in each of the enrollment categories under the plan, and
``(iv) the applicable large employer's share of the
total allowed costs of benefits provided under the plan,
``(D) the number of full-time employees for each month
during the calendar year,
``(E) the name, address, and TIN of each full-time employee
during the calendar year and the months (if any) during which
such employee (and any dependents) were covered under any such
health benefits plans, and
``(F) such other information as the Secretary may require.
subsection (a) shall furnish to each full-time employee whose name
is required to be set forth in such return under subsection
(b)(2)(E) a written statement showing--
``(d) Coordination With Other Requirements.--To the maximum extent
feasible, the Secretary may provide that--
``(1) any return or statement required to be provided under
this section may be provided as part of any return or statement
required under section 6051 or 6055, and
``(2) in the case of an applicable large employer offering
health insurance coverage of a health insurance issuer, the
employer may enter into an agreement with the issuer to include
information required under this section with the return and
statement required to be provided by the issuer under section 6055.
``(e) Coverage Provided by Governmental Units.--In the case of any
applicable large employer which is a governmental unit or any agency or
instrumentality thereof, the person appropriately designated for
purposes of this section shall make the returns and statements required
by this section.
``(f) Definitions.--For purposes of this section, any term used in
this section which is also used in section 4980H shall have the meaning
given such term by section 4980H.''.
Revenue Code of 1986 (relating to definitions), as amended by
section 1502, is amended by striking ``or'' at the end of clause
(xxiii), by striking ``and'' at the end of clause (xxiv) and
inserting ``or'', and by inserting after clause (xxiv) the
following new clause:
``(xxv) section 6056 (relating to returns relating to
large employers required to report on health insurance
coverage), and''.
(2) Paragraph (2) of section 6724(d) of such Code, as so
amended, is amended by striking ``or'' at the end of subparagraph
(FF), by striking the period at the end of subparagraph (GG) and
inserting ``, or'' and by inserting after subparagraph (GG) the
``(HH) section 6056(c) (relating to statements relating to
coverage).''.
(c) Conforming Amendment.--The table of sections for subpart D of
part III of subchapter A of chapter 61 of such Code, as added by
section 1502, is amended by adding at the end the following new item:
apply to periods beginning after December 31, 2013.
(a) In General.--Subsection (f) of section 125 of the Internal
``(3) Certain exchange-participating qualified health plans not
qualified.--
``(A) In general.--The term `qualified benefit' shall not
include any qualified health plan (as defined in section
1301(a) of the Patient Protection and Affordable Care Act)
offered through an Exchange established under section 1311 of
such Act.
``(B) Exception for exchange-eligible employers.--
Subparagraph (A) shall not apply with respect to any employee
if such employee's employer is a qualified employer (as defined
in section 1312(f)(2) of the Patient Protection and Affordable
Care Act) offering the employee the opportunity to enroll
through such an Exchange in a qualified health plan in a group
market.''.
(b) Conforming Amendments.--Subsection (f) of section 125 of such
Code is amended--
(1) by striking ``For purposes of this section, the term'' and
inserting ``For purposes of this section--
``(1) In General.--The term'', and
(2) by striking ``Such term shall not include'' and inserting
the following:
``(2) Long-term care insurance not qualified.--The term
`qualified benefit' shall not include''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2013.
Unless specifically provided for otherwise, the definitions
contained in section 2791 of the Public Health Service Act (42 U.S.C.
300gg-91) shall apply with respect to this title.
Not later than 30 days after the date of enactment of this Act, the
Secretary of Health and Human Services shall publish on the Internet
website of the Department of Health and Human Services, a list of all
of the authorities provided to the Secretary under this Act (and the
amendments made by this Act).
(a) In General.--The Federal Government, and any State or local
government or health care provider that receives Federal financial
assistance under this Act (or under an amendment made by this Act) or
any health plan created under this Act (or under an amendment made by
this Act), may not subject an individual or institutional health care
entity to discrimination on the basis that the entity does not provide
any health care item or service furnished for the purpose of causing,
or for the purpose of assisting in causing, the death of any
individual, such as by assisted suicide, euthanasia, or mercy killing.
(b) Definition.--In this section, the term ``health care entity''
includes an individual physician or other health care professional, a
hospital, a provider-sponsored organization, a health maintenance
organization, a health insurance plan, or any other kind of health care
facility, organization, or plan.
(c) Construction and Treatment of Certain Services.--Nothing in
subsection (a) shall be construed to apply to, or to affect, any
limitation relating to--
(1) the withholding or withdrawing of medical treatment or
medical care;
(2) the withholding or withdrawing of nutrition or hydration;
(3) abortion; or
(4) the use of an item, good, benefit, or service furnished for
the purpose of alleviating pain or discomfort, even if such use may
increase the risk of death, so long as such item, good, benefit, or
service is not also furnished for the purpose of causing, or the
purpose of assisting in causing, death, for any reason.
(d) Administration.--The Office for Civil Rights of the Department
of Health and Human Services is designated to receive complaints of
discrimination based on this section.
Notwithstanding any other provision of this Act, the Secretary of
Health and Human Services shall not promulgate any regulation that--
(1) creates any unreasonable barriers to the ability of
individuals to obtain appropriate medical care;
(2) impedes timely access to health care services;
(3) interferes with communications regarding a full range of
treatment options between the patient and the provider;
(4) restricts the ability of health care providers to provide
full disclosure of all relevant information to patients making
health care decisions;
(5) violates the principles of informed consent and the ethical
standards of health care professionals; or
(6) limits the availability of health care treatment for the
full duration of a patient's medical needs.
No individual, company, business, nonprofit entity, or health
insurance issuer offering group or individual health insurance coverage
shall be required to participate in any Federal health insurance
program created under this Act (or any amendments made by this Act), or
in any Federal health insurance program expanded by this Act (or any
such amendments), and there shall be no penalty or fine imposed upon
any such issuer for choosing not to participate in such programs.
(a) Rebuttable Presumption.--Section 411(c)(4) of the Black Lung
Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last
sentence.
(b) Continuation of Benefits.--Section 422(l) of the Black Lung
Benefits Act (30 U.S.C. 932(l)) is amended by striking ``, except with
respect to a claim filed under this part on or after the effective date
of the Black Lung Benefits Amendments of 1981''.
apply with respect to claims filed under part B or part C of the Black
Lung Benefits Act (30 U.S.C. 921 et seq., 931 et seq.) after January 1,
2005, that are pending on or after the date of enactment of this Act.
(a) In General.--Except as otherwise provided for in this title (or
an amendment made by this title), an individual shall not, on the
ground prohibited under title VI of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), title IX of the Education Amendments of 1972 (20
U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C.
6101 et seq.), or section 504 of the Rehabilitation Act of 1973 (29
U.S.C. 794), be excluded from participation in, be denied the benefits
of, or be subjected to discrimination under, any health program or
activity, any part of which is receiving Federal financial assistance,
including credits, subsidies, or contracts of insurance, or under any
program or activity that is administered by an Executive Agency or any
entity established under this title (or amendments). The enforcement
mechanisms provided for and available under such title VI, title IX,
section 504, or such Age Discrimination Act shall apply for purposes of
violations of this subsection.
(b) Continued Application of Laws.--Nothing in this title (or an
amendment made by this title) shall be construed to invalidate or limit
the rights, remedies, procedures, or legal standards available to
individuals aggrieved under title VI of the Civil Rights Act of 1964
(42 U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964
(42 U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972
(20 U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611
et seq.), or to supersede State laws that provide additional
protections against discrimination on any basis described in subsection
(c) Regulations.--The Secretary may promulgate regulations to
implement this section.
section 18B (as added by section 1512) the following:
``SEC. 18C. PROTECTIONS FOR EMPLOYEES.
``(a) Prohibition.--No employer shall discharge or in any manner
discriminate against any employee with respect to his or her
compensation, terms, conditions, or other privileges of employment
because the employee (or an individual acting at the request of the
employee) has--
``(1) received a credit under section 36B of the Internal
Revenue Code of 1986 or a subsidy under section 1402 of this Act;
``(2) provided, caused to be provided, or is about to provide
or cause to be provided to the employer, the Federal Government, or
the attorney general of a State information relating to any
violation of, or any act or omission the employee reasonably
believes to be a violation of, any provision of this title (or an
amendment made by this title);
``(3) testified or is about to testify in a proceeding
concerning such violation;
``(4) assisted or participated, or is about to assist or
participate, in such a proceeding; or
``(5) objected to, or refused to participate in, any activity,
policy, practice, or assigned task that the employee (or other such
person) reasonably believed to be in violation of any provision of
this title (or amendment), or any order, rule, regulation,
standard, or ban under this title (or amendment).
``(b) Complaint Procedure.--
``(1) In general.--An employee who believes that he or she has
been discharged or otherwise discriminated against by any employer
in violation of this section may seek relief in accordance with the
procedures, notifications, burdens of proof, remedies, and statutes
of limitation set forth in section 2087(b) of title 15, United
States Code.
``(2) No limitation on rights.--Nothing in this section shall
be deemed to diminish the rights, privileges, or remedies of any
employee under any Federal or State law or under any collective
bargaining agreement. The rights and remedies in this section may
not be waived by any agreement, policy, form, or condition of
employment.''.
The Inspector General of the Department of Health and Human
Services shall have oversight authority with respect to the
administration and implementation of this title as it relates to such
(a) No Effect on Antitrust Laws.--Nothing in this title (or an
amendment made by this title) shall be construed to modify, impair, or
supersede the operation of any of the antitrust laws. For the purposes
of this section, the term ``antitrust laws'' has the meaning given such
term in subsection (a) of the first section of the Clayton Act, except
that such term includes section 5 of the Federal Trade Commission Act
to the extent that such section 5 applies to unfair methods of
(b) Rule of Construction Regarding Hawaii's Prepaid Health Care
Act.--Nothing in this title (or an amendment made by this title) shall
be construed to modify or limit the application of the exemption for
Hawaii's Prepaid Health Care Act (Haw. Rev. Stat. Sec. Sec.  393-1 et
seq.) as provided for under section 514(b)(5) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(5)).
(c) Student Health Insurance Plans.--Nothing in this title (or an
amendment made by this title) shall be construed to prohibit an
institution of higher education (as such term is defined for purposes
of the Higher Education Act of 1965) from offering a student health
insurance plan, to the extent that such requirement is otherwise
permitted under applicable Federal, State or local law.
(d) No Effect on Existing Requirements.--Nothing in this title (or
an amendment made by this title, unless specified by direct statutory
reference) shall be construed to modify any existing Federal
requirement concerning the State agency responsible for determining
eligibility for programs identified in section 1413.
Title XXX of the Public Health Service Act (42 U.S.C. 300jj et
seq.) is amended by adding at the end the following:
``Subtitle C--Other Provisions
``SEC. 3021. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND
``(a) In General.--
``(1) Standards and protocols.--Not later than 180 days after
the date of enactment of this title, the Secretary, in consultation
with the HIT Policy Committee and the HIT Standards Committee,
shall develop interoperable and secure standards and protocols that
facilitate enrollment of individuals in Federal and State health
and human services programs, as determined by the Secretary.
``(2) Methods.--The Secretary shall facilitate enrollment in
such programs through methods determined appropriate by the
Secretary, which shall include providing individuals and third
parties authorized by such individuals and their designees
notification of eligibility and verification of eligibility
required under such programs.
``(b) Content.--The standards and protocols for electronic
enrollment in the Federal and State programs described in subsection
(a) shall allow for the following:
``(1) Electronic matching against existing Federal and State
data, including vital records, employment history, enrollment
systems, tax records, and other data determined appropriate by the
Secretary to serve as evidence of eligibility and in lieu of paper-
based documentation.
``(2) Simplification and submission of electronic
documentation, digitization of documents, and systems verification
of eligibility.
``(3) Reuse of stored eligibility information (including
documentation) to assist with retention of eligible individuals.
``(4) Capability for individuals to apply, recertify and manage
their eligibility information online, including at home, at points
of service, and other community-based locations.
``(5) Ability to expand the enrollment system to integrate new
programs, rules, and functionalities, to operate at increased
volume, and to apply streamlined verification and eligibility
processes to other Federal and State programs, as appropriate.
``(6) Notification of eligibility, recertification, and other
needed communication regarding eligibility, which may include
communication via email and cellular phones.
``(7) Other functionalities necessary to provide eligibles with
streamlined enrollment process.
``(c) Approval and Notification.--With respect to any standard or
protocol developed under subsection (a) that has been approved by the
HIT Policy Committee and the HIT Standards Committee, the Secretary--
``(1) shall notify States of such standards or protocols; and
``(2) may require, as a condition of receiving Federal funds
for the health information technology investments, that States or
other entities incorporate such standards and protocols into such
``(d) Grants for Implementation of Appropriate Enrollment HIT.--
``(1) In general.--The Secretary shall award grant to eligible
entities to develop new, and adapt existing, technology systems to
implement the HIT enrollment standards and protocols developed
under subsection (a) (referred to in this subsection as
`appropriate HIT technology').
``(2) Eligible entities.--To be eligible for a grant under this
subsection, an entity shall--
``(A) be a State, political subdivision of a State, or a
local governmental entity; and
``(B) submit to the Secretary an application at such time,
in such manner, and containing--
``(i) a plan to adopt and implement appropriate
enrollment technology that includes--
``(I) proposed reduction in maintenance costs of
technology systems;
``(II) elimination or updating of legacy systems;
``(III) demonstrated collaboration with other
entities that may receive a grant under this section
that are located in the same State, political
subdivision, or locality;
``(ii) an assurance that the entity will share such
appropriate enrollment technology in accordance with
``(iii) such other information as the Secretary may
``(3) Sharing.--
``(A) In general.--The Secretary shall ensure that
appropriate enrollment HIT adopted under grants under this
subsection is made available to other qualified State,
qualified political subdivisions of a State, or other
appropriate qualified entities (as described in subparagraph
(B)) at no cost.
``(B) Qualified entities.--The Secretary shall determine
what entities are qualified to receive enrollment HIT under
subparagraph (A), taking into consideration the recommendations
of the HIT Policy Committee and the HIT Standards Committee.''.
(a) Applicability.--Section 2735 of the Public Health Service Act
(42 U.S.C. 300gg-21), as so redesignated by section 1001(4), is
(1) by striking subsection (a);
(2) in subsection (b)--
(A) in paragraph (1), by striking ``1 through 3'' and
inserting ``1 and 2''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ``subparagraph
(D)'' and inserting ``subparagraph (D) or (E)'';
(ii) by striking ``1 through 3'' and inserting ``1 and
2''; and
(iii) by adding at the end the following:
``(E) Election not applicable.--The election described in
subparagraph (A) shall not be available with respect to the
provisions of subpart 1.'';
(3) in subsection (c), by striking ``1 through 3 shall not
apply to any group'' and inserting ``1 and 2 shall not apply to any
individual coverage or any group''; and
(4) in subsection (d)--
(A) in paragraph (1), by striking ``1 through 3 shall not
apply to any group'' and inserting ``1 and 2 shall not apply to
any individual coverage or any group'';
(i) in the matter preceding subparagraph (A), by
striking ``1 through 3 shall not apply to any group'' and
inserting ``1 and 2 shall not apply to any individual
coverage or any group''; and
(ii) in subparagraph (C), by inserting ``or, with
respect to individual coverage, under any health insurance
coverage maintained by the same health insurance issuer'';
(C) in paragraph (3), by striking ``any group'' and
inserting ``any individual coverage or any group''.
(b) Definitions.--Section 2791(d) of the Public Health Service Act
(42 U.S.C. 300gg-91(d)) is amended by adding at the end the following:
``(20) Qualified health plan.--The term `qualified health plan'
has the meaning given such term in section 1301(a) of the Patient
Protection and Affordable Care Act.
``(21) Exchange.--The term `Exchange' means an American Health
Benefit Exchange established under section 1311 of the Patient
Protection and Affordable Care Act.''.
(c) Technical and Conforming Amendments.--Title XXVII of the Public
Health Service Act (42 U.S.C. 300gg et seq.) is amended--
(1) in section 2704 (42 U.S.C. 300gg), as so redesignated by
section 1201(2)--
(A) in subsection (c)--
(i) in paragraph (2), by striking ``group health plan''
each place that such term appears and inserting ``group or
individual health plan''; and
(ii) in paragraph (3)--
(I) by striking ``group health insurance'' each
place that such term appears and inserting ``group or
individual health insurance''; and
(II) in subparagraph (D), by striking ``small or
large'' and inserting ``individual or group'';
(B) in subsection (d), by striking ``group health
insurance'' each place that such term appears and inserting
``group or individual health insurance''; and
(C) in subsection (e)(1)(A), by striking ``group health
insurance'' and inserting ``group or individual health
insurance'';
(2) by striking the second heading for subpart 2 of part A
(relating to other requirements);
(3) in section 2725 (42 U.S.C. 300gg-4), as so redesignated by
(A) in subsection (a), by striking ``health insurance
issuer offering group health insurance coverage'' and inserting
``health insurance issuer offering group or individual health
insurance coverage'';
(B) in subsection (b)--
group health insurance coverage in connection with a group
health plan'' in the matter preceding paragraph (1) and
inserting ``health insurance issuer offering group or
individual health insurance coverage''; and
(ii) in paragraph (1), by striking ``plan'' and
inserting ``plan or coverage'';
(C) in subsection (c)--
(i) in paragraph (2), by striking ``group health
insurance coverage offered by a health insurance issuer''
and inserting ``health insurance issuer offering group or
(ii) in paragraph (3), by striking ``issuer'' and
inserting ``health insurance issuer''; and
(D) in subsection (e), by striking ``health insurance
(A) in subsection (a), by striking ``(or health insurance
coverage offered in connection with such a plan)'' each place
that such term appears and inserting ``or a health insurance
issuer offering group or individual health insurance
coverage'';
(B) in subsection (b), by striking ``(or health insurance
coverage''; and
(i) in paragraph (1), by striking ``(and group health
insurance coverage offered in connection with a group
health plan)'' and inserting ``and a health insurance
(ii) in paragraph (2), by striking ``(or health
insurance coverage offered in connection with such a
plan)'' each place that such term appears and inserting
``or a health insurance issuer offering group or individual
health insurance coverage'';
section 1001(2), by striking ``health insurance issuers providing
health insurance coverage in connection with group health plans''
and inserting ``and health insurance issuers offering group or
individual health insurance coverage'';
coverage offered in connection with such plan'' and inserting
``individual health insurance coverage'';
(i) in paragraph (1), by striking ``or a health
insurance issuer that provides health insurance coverage in
connection with a group health plan'' and inserting ``or a
health insurance issuer that offers group or individual
(ii) in paragraph (2), by striking ``health insurance
coverage offered in connection with the plan'' and
inserting ``individual health insurance coverage''; and
(iii) in paragraph (3), by striking ``health insurance
coverage offered by an issuer in connection with such
plan'' and inserting ``individual health insurance
(C) in subsection (c), by striking ``health insurance
issuer providing health insurance coverage in connection with a
group health plan'' and inserting ``health insurance issuer
that offers group or individual health insurance coverage'';
(D) in subsection (e)(1), by striking ``health insurance
coverage offered in connection with such a plan'' and inserting
(7) by striking the heading for subpart 3;
(8) in section 2731 (42 U.S.C. 300gg-11), as so redesignated by
(A) by striking the section heading and all that follows
through subsection (b);
(B) in subsection (c)--
(i) in paragraph (1)--
striking ``small group'' and inserting ``group and
individual''; and
(II) in subparagraph (B)--
(aa) in the matter preceding clause (i), by
inserting ``and individuals'' after ``employers'';
(bb) in clause (i), by inserting ``or any
additional individuals'' after ``additional
groups''; and
(cc) in clause (ii), by striking ``without
regard to the claims experience of those employers
and their employees (and their dependents) or any
health status-related factor relating to such'' and
inserting ``and individuals without regard to the
claims experience of those individuals, employers
health status-related factor relating to such
individuals''; and
(ii) in paragraph (2), by striking ``small group'' and
inserting ``group or individual'';
(C) in subsection (d)--
(i) by striking ``small group'' each place that such
appears and inserting ``group or individual''; and
(ii) in paragraph (1)(B)--
(I) by striking ``all employers'' and inserting
``all employers and individuals'';
(II) by striking ``those employers'' and inserting
``those individuals, employers''; and
(III) by striking ``such employees'' and inserting
``such individuals, employees'';
(D) by striking subsection (e);
(E) by striking subsection (f); and
(F) by transferring such section (as amended by this
paragraph) to appear at the end of section 2702 (as added by
section 1001(4));
(i) in the matter preceding paragraph (1), by striking
``group health plan in the small or large group market''
and inserting ``health insurance coverage offered in the
group or individual market'';
(ii) in paragraph (1), by inserting ``, or individual,
as applicable,'' after ``plan sponsor'';
(iii) in paragraph (2), by inserting ``, or individual,
as applicable,'' after ``plan sponsor''; and
(iv) by striking paragraph (3) and inserting the
``(3) Violation of participation or contribution rates.--In the
case of a group health plan, the plan sponsor has failed to comply
with a material plan provision relating to employer contribution or
group participation rules, pursuant to applicable State law.'';
striking ``group health insurance coverage offered in
the small or large group market'' and inserting ``group
or individual health insurance coverage'';
(II) in subparagraph (A), by inserting ``or
individual, as applicable,'' after ``plan sponsor'';
(III) in subparagraph (B)--
(aa) by inserting ``or individual, as
applicable,'' after ``plan sponsor''; and
(bb) by inserting ``or individual health
(IV) in subparagraph (C), by inserting ``or
individuals, as applicable,'' after ``those sponsors'';
(I) in the matter preceding clause (i), by striking
``small group market or the large group market, or both
markets,'' and inserting ``individual or group market,
or all markets,''; and
(II) in clause (i), by inserting ``or individual,
(D) by transferring such section (as amended by this
(10) in section 2733 (42 U.S.C. 300gg-13), as so redesignated
by section 1001(4)--
(A) in subsection (a)--
``small employer'' and inserting ``small employer or an
individual'';
as applicable,'' after ``employer'' each place that such
appears; and
(iii) in paragraph (2), by striking ``small employer''
and inserting ``employer, or individual, as applicable,'';
striking ``small employer'' and inserting ``employer,
or individual, as applicable,'';
(II) in subparagraph (A), by adding ``and'' at the
(III) by striking subparagraphs (B) and (C); and
(IV) in subparagraph (D)--
(aa) by inserting ``, or individual, as
applicable,'' after ``employer''; and
(bb) by redesignating such subparagraph as
subparagraph (B);
(I) by striking ``small employers'' each place that
such term appears and inserting ``employers, or
individuals, as applicable,''; and
(II) by striking ``small employer'' and inserting
``employer, or individual, as applicable,''; and
(C) by redesignating such section (as amended by this
paragraph) as section 2709 and transferring such section to
appear after section 2708 (as added by section 1001(5));
(11) by redesignating subpart 4 as subpart 2;
(A) by striking subsection (a);
(B) by striking ``subparts 1 through 3'' each place that
such appears and inserting ``subpart 1'';
(C) by redesignating subsections (b) through (e) as
subsections (a) through (d), respectively; and
(D) by redesignating such section (as amended by this
paragraph) as section 2722;
(i) in paragraph (1), by striking ``small or large
group markets'' and inserting ``individual or group
market''; and
(ii) in paragraph (2), by inserting ``or individual
health insurance coverage'' after ``group health plans'';
(B) in subsection (b)(1)(B), by inserting ``individual
health insurance coverage or'' after ``respect to''; and
(14) in section 2737(a)(1) (42 U.S.C. 300gg-23), as so
redesignated by section 1001(4)--
(A) by inserting ``individual or'' before ``group health
insurance''; and
(B) by redesignating such section(as amended by this
(15) in section 2762 (42 U.S.C. 300gg-62)--
(A) in the section heading by inserting ``and application''
before the period; and
(B) by adding at the end the following:
``(c) Application of Part A Provisions.--
``(1) In general.--The provisions of part A shall apply to
health insurance issuers providing health insurance coverage in the
individual market in a State as provided for in such part.
``(2) Clarification.--To the extent that any provision of this
part conflicts with a provision of part A with respect to health
insurance issuers providing health insurance coverage in the
individual market in a State, the provisions of such part A shall
apply.''; and
(16) in section 2791(e) (42 U.S.C. 300gg-91(e))--
(A) in paragraph (2), by striking ``51'' and inserting
``101''; and
(i) by striking ``at least 2'' each place that such
appears and inserting ``at least 1''; and
(ii) by striking ``50'' and inserting ``100''.
(d) Application.--Notwithstanding any other provision of the
Patient Protection and Affordable Care Act, nothing in such Act (or an
amendment made by such Act) shall be construed to--
(1) prohibit (or authorize the Secretary of Health and Human
Services to promulgate regulations that prohibit) a group health
plan or health insurance issuer from carrying out utilization
management techniques that are commonly used as of the date of
enactment of this Act; or
(2) restrict the application of the amendments made by this
subtitle.
(e) Technical Amendment to the Employee Retirement Income Security
Act of 1974.--Subpart B of part 7 of subtitle A of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et.
seq.) is amended, by adding at the end the following:
``SEC. 715. ADDITIONAL MARKET REFORMS.
``(a) General Rule.--Except as provided in subsection (b)--
``(1) the provisions of part A of title XXVII of the Public
Health Service Act (as amended by the Patient Protection and
Affordable Care Act) shall apply to group health plans, and health
insurance issuers providing health insurance coverage in connection
with group health plans, as if included in this subpart; and
``(2) to the extent that any provision of this part conflicts
with a provision of such part A with respect to group health plans,
or health insurance issuers providing health insurance coverage in
connection with group health plans, the provisions of such part A
``(b) Exception.--Notwithstanding subsection (a), the provisions of
sections 2716 and 2718 of title XXVII of the Public Health Service Act
(as amended by the Patient Protection and Affordable Care Act) shall
not apply with respect to self-insured group health plans, and the
provisions of this part shall continue to apply to such plans as if
such sections of the Public Health Service Act (as so amended) had not
been enacted.''.
(f) Technical Amendment to the Internal Revenue Code of 1986.--
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is
``SEC. 9815. ADDITIONAL MARKET REFORMS.
with group health plans, as if included in this subchapter; and
``(2) to the extent that any provision of this subchapter
conflicts with a provision of such part A with respect to group
health plans, or health insurance issuers providing health
insurance coverage in connection with group health plans, the
provisions of such part A shall apply.
provisions of this subchapter shall continue to apply to such plans as
if such sections of the Public Health Service Act (as so amended) had
not been enacted.''.
(a) Findings.--The Senate makes the following findings:
(1) Based on Congressional Budget Office (CBO) estimates, this
Act will reduce the Federal deficit between 2010 and 2019.
(2) CBO projects this Act will continue to reduce budget
deficits after 2019.
(3) Based on CBO estimates, this Act will extend the solvency
of the Medicare HI Trust Fund.
(4) This Act will increase the surplus in the Social Security
Trust Fund, which should be reserved to strengthen the finances of
Social Security.
(5) The initial net savings generated by the Community Living
Assistance Services and Supports (CLASS) program are necessary to
ensure the long-term solvency of that program.
(b) Sense of the Senate.--It is the sense of the Senate that--
(1) the additional surplus in the Social Security Trust Fund
generated by this Act should be reserved for Social Security and
not spent in this Act for other purposes; and
(2) the net savings generated by the CLASS program should be
reserved for the CLASS program and not spent in this Act for other
purposes.
(a) Coverage for Individuals With Income at or Below 133 Percent of
the Poverty Line.--
(1) Beginning 2014.--Section 1902(a)(10)(A)(i) of the Social
Security Act (42 U.S.C. 1396a) is amended--
(A) by striking ``or'' at the end of subclause (VI);
(B) by adding ``or'' at the end of subclause (VII); and
(C) by inserting after subclause (VII) the following:
``(VIII) beginning January 1, 2014, who are under
65 years of age, not pregnant, not entitled to, or
enrolled for, benefits under part A of title XVIII, or
enrolled for benefits under part B of title XVIII, and
are not described in a previous subclause of this
clause, and whose income (as determined under
subsection (e)(14)) does not exceed 133 percent of the
poverty line (as defined in section 2110(c)(5))
applicable to a family of the size involved, subject to
subsection (k);''.
(2) Provision of at least minimum essential coverage.--
(A) In general.--Section 1902 of such Act (42 U.S.C. 1396a)
is amended by inserting after subsection (j) the following:
``(k)(1) The medical assistance provided to an individual described
in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of
benchmark coverage described in section 1937(b)(1) or benchmark
equivalent coverage described in section 1937(b)(2). Such medical
assistance shall be provided subject to the requirements of section
1937, without regard to whether a State otherwise has elected the
option to provide medical assistance through coverage under that
section, unless an individual described in subclause (VIII) of
subsection (a)(10)(A)(i) is also an individual for whom, under
subparagraph (B) of section 1937(a)(2), the State may not require
enrollment in benchmark coverage described in subsection (b)(1) of
section 1937 or benchmark equivalent coverage described in subsection
(b)(2) of that section.''.
(B) Conforming amendment.--Section 1903(i) of the Social
Security Act, as amended by section 6402(c), is amended--
(i) in paragraph (24), by striking ``or'' at the end;
(ii) in paragraph (25), by striking the period and
inserting ``; or''; and
``(26) with respect to any amounts expended for medical
assistance for individuals described in subclause (VIII) of
subsection (a)(10)(A)(i) other than medical assistance provided
through benchmark coverage described in section 1937(b)(1) or
benchmark equivalent coverage described in section 1937(b)(2).''.
(3) Federal funding for cost of covering newly eligible
individuals.--Section 1905 of the Social Security Act (42 U.S.C.
1396d), is amended--
(A) in subsection (b), in the first sentence, by inserting
``subsection (y) and'' before ``section 1933(d)''; and
(B) by adding at the end the following new subsection:
``(y) Increased FMAP for Medical Assistance for Newly Eligible
Mandatory Individuals.--
``(1) Amount of increase.--
``(A) 100 percent fmap.--During the period that begins on
January 1, 2014, and ends on December 31, 2016, notwithstanding
subsection (b), the Federal medical assistance percentage
determined for a State that is one of the 50 States or the
District of Columbia for each fiscal year occurring during that
period with respect to amounts expended for medical assistance
for newly eligible individuals described in subclause (VIII) of
section 1902(a)(10)(A)(i) shall be equal to 100 percent.
``(B) 2017 and 2018.--
``(i) In general.--During the period that begins on
January 1, 2017, and ends on December 31, 2018,
notwithstanding subsection (b) and subject to subparagraph
(D), the Federal medical assistance percentage determined
for a State that is one of the 50 States or the District of
Columbia for each fiscal year occurring during that period
with respect to amounts expended for medical assistance for
newly eligible individuals described in subclause (VIII) of
section 1902(a)(10)(A)(i), shall be increased by the
applicable percentage point increase specified in clause
(ii) for the quarter and the State.
``(ii) Applicable percentage point increase.--
``(I) In general.--For purposes of clause (i), the
applicable percentage point increase for a quarter is
If the State is an    If the State is not an
``For any fiscal year     expansion State, the    expansion State, the
quarter occurring in    applicable percentage    applicable percentage
the calendar year:       point increase is:      point increase is:
2017                     30.3                     34.3
``(II) Expansion state defined.--For purposes of
the table in subclause (I), a State is an expansion
State if, on the date of the enactment of the Patient
Protection and Affordable Care Act, the State offers
health benefits coverage statewide to parents and
nonpregnant, childless adults whose income is at least
100 percent of the poverty line, that is not dependent
on access to employer coverage, employer contribution,
or employment and is not limited to premium assistance,
hospital-only benefits, a high deductible health plan,
or alternative benefits under a demonstration program
authorized under section 1938. A State that offers
health benefits coverage to only parents or only
nonpregnant childless adults described in the preceding
sentence shall not be considered to be an expansion
``(C) 2019 and succeeding years.--Beginning January 1,
2019, notwithstanding subsection (b) but subject to
subparagraph (D), the Federal medical assistance percentage
District of Columbia for each fiscal year quarter occurring
during that period with respect to amounts expended for medical
assistance for newly eligible individuals described in
subclause (VIII) of section 1902(a)(10)(A)(i), shall be
increased by 32.3 percentage points.
``(D) Limitation.--The Federal medical assistance
percentage determined for a State under subparagraph (B) or (C)
shall in no case be more than 95 percent.
``(2) Definitions.--In this subsection:
``(A) Newly eligible.--The term `newly eligible' means,
with respect to an individual described in subclause (VIII) of
section 1902(a)(10)(A)(i), an individual who is not under 19
years of age (or such higher age as the State may have elected)
and who, on the date of enactment of the Patient Protection and
Affordable Care Act, is not eligible under the State plan or
under a waiver of the plan for full benefits or for benchmark
coverage described in subparagraph (A), (B), or (C) of section
1937(b)(1) or benchmark equivalent coverage described in
section 1937(b)(2) that has an aggregate actuarial value that
is at least actuarially equivalent to benchmark coverage
described in subparagraph (A), (B), or (C) of section
1937(b)(1), or is eligible but not enrolled (or is on a waiting
list) for such benefits or coverage through a waiver under the
plan that has a capped or limited enrollment that is full.
``(B) Full benefits.--The term `full benefits' means, with
respect to an individual, medical assistance for all services
covered under the State plan under this title that is not less
in amount, duration, or scope, or is determined by the
Secretary to be substantially equivalent, to the medical
assistance available for an individual described in section
1902(a)(10)(A)(i).''.
(4) State options to offer coverage earlier and presumptive
eligibility; children required to have coverage for parents to be
eligible.--
(A) In general.--Subsection (k) of section 1902 of the
Social Security Act (as added by paragraph (2)), is amended by
inserting after paragraph (1) the following:
``(2) Beginning with the first day of any fiscal year quarter that
begins on or after January 1, 2011, and before January 1, 2014, a State
may elect through a State plan amendment to provide medical assistance
to individuals who would be described in subclause (VIII) of subsection
(a)(10)(A)(i) if that subclause were effective before January 1, 2014.
A State may elect to phase-in the extension of eligibility for medical
assistance to such individuals based on income, so long as the State
does not extend such eligibility to individuals described in such
subclause with higher income before making individuals described in
such subclause with lower income eligible for medical assistance.
``(3) If an individual described in subclause (VIII) of subsection
(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or
such higher age as the State may have elected) who is eligible for
medical assistance under the State plan or under a waiver of such plan
(under that subclause or under a State plan amendment under paragraph
(2), the individual may not be enrolled under the State plan unless the
individual's child is enrolled under the State plan or under a waiver
of the plan or is enrolled in other health insurance coverage. For
purposes of the preceding sentence, the term `parent' includes an
individual treated as a caretaker relative for purposes of carrying out
section 1931.''.
(B) Presumptive eligibility.--Section 1920 of the Social
Security Act (42 U.S.C. 1396r-1) is amended by adding at the
end the following:
``(e) If the State has elected the option to provide a presumptive
eligibility period under this section or section 1920A, the State may
elect to provide a presumptive eligibility period (as defined in
subsection (b)(1)) for individuals who are eligible for medical
assistance under clause (i)(VIII) of subsection (a)(10)(A) or section
1931 in the same manner as the State provides for such a period under
this section or section 1920A, subject to such guidance as the
Secretary shall establish.''.
(5) Conforming amendments.--
(A) Section 1902(a)(10) of such Act (42 U.S.C.
1396a(a)(10)) is amended in the matter following subparagraph
(G), by striking ``and (XIV)'' and inserting ``(XIV)'' and by
inserting ``and (XV) the medical assistance made available to
an individual described in subparagraph (A)(i)(VIII) shall be
limited to medical assistance described in subsection (k)(1)''
before the semicolon.
(B) Section 1902(l)(2)(C) of such Act (42 U.S.C.
1396a(l)(2)(C)) is amended by striking ``100'' and inserting
``133''.
(C) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is
amended in the matter preceding paragraph (1)--
(i) by striking ``or'' at the end of clause (xii);
(ii) by inserting ``or'' at the end of clause (xiii);
(iii) by inserting after clause (xiii) the following:
``(xiv) individuals described in section
1902(a)(10)(A)(i)(VIII),''.
(D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4))
is amended by inserting ``1902(a)(10)(A)(i)(VIII),'' after
``1902(a)(10)(A)(i)(VII),''.
(E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u-
7(a)(1)(B)) is amended by inserting ``subclause (VIII) of
section 1902(a)(10)(A)(i) or under'' after ``eligible under''.
(b) Maintenance of Medicaid Income Eligibility.--Section 1902 of
the Social Security Act (42 U.S.C. 1396a) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (72);
(B) by striking the period at the end of paragraph (73) and
inserting ``; and''; and
(C) by inserting after paragraph (73) the following new
``(74) provide for maintenance of effort under the State plan
or under any waiver of the plan in accordance with subsection
(gg).''; and
(2) by adding at the end the following new subsection:
``(gg) Maintenance of Effort.--
``(1) General requirement to maintain eligibility standards
until state exchange is fully operational.--Subject to the
succeeding paragraphs of this subsection, during the period that
begins on the date of enactment of the Patient Protection and
Affordable Care Act and ends on the date on which the Secretary
determines that an Exchange established by the State under section
1311 of the Patient Protection and Affordable Care Act is fully
operational, as a condition for receiving any Federal payments
under section 1903(a) for calendar quarters occurring during such
period, a State shall not have in effect eligibility standards,
methodologies, or procedures under the State plan under this title
or under any waiver of such plan that is in effect during that
period, that are more restrictive than the eligibility standards,
methodologies, or procedures, respectively, under the plan or
waiver that are in effect on the date of enactment of the Patient
``(2) Continuation of eligibility standards for children until
october 1, 2019.--The requirement under paragraph (1) shall
continue to apply to a State through September 30, 2019, with
respect to the eligibility standards, methodologies, and procedures
under the State plan under this title or under any waiver of such
plan that are applicable to determining the eligibility for medical
assistance of any child who is under 19 years of age (or such
higher age as the State may have elected).
``(3) Nonapplication.--During the period that begins on January
1, 2011, and ends on December 31, 2013, the requirement under
paragraph (1) shall not apply to a State with respect to
nonpregnant, nondisabled adults who are eligible for medical
assistance under the State plan or under a waiver of the plan at
the option of the State and whose income exceeds 133 percent of the
poverty line (as defined in section 2110(c)(5)) applicable to a
family of the size involved if, on or after December 31, 2010, the
State certifies to the Secretary that, with respect to the State
fiscal year during which the certification is made, the State has a
budget deficit, or with respect to the succeeding State fiscal
year, the State is projected to have a budget deficit. Upon
submission of such a certification to the Secretary, the
requirement under paragraph (1) shall not apply to the State with
respect to any remaining portion of the period described in the
preceding sentence.
``(4) Determination of compliance.--
``(A) States shall apply modified gross income.--A State's
determination of income in accordance with subsection (e)(14)
shall not be considered to be eligibility standards,
methodologies, or procedures that are more restrictive than the
standards, methodologies, or procedures in effect under the
State plan or under a waiver of the plan on the date of
enactment of the Patient Protection and Affordable Care Act for
purposes of determining compliance with the requirements of
paragraph (1), (2), or (3).
``(B) States may expand eligibility or move waivered
populations into coverage under the state plan.--With respect
to any period applicable under paragraph (1), (2), or (3), a
State that applies eligibility standards, methodologies, or
procedures under the State plan under this title or under any
waiver of the plan that are less restrictive than the
eligibility standards, methodologies, or procedures, applied
under the State plan or under a waiver of the plan on the date
of enactment of the Patient Protection and Affordable Care Act,
or that makes individuals who, on such date of enactment, are
eligible for medical assistance under a waiver of the State
plan, after such date of enactment eligible for medical
assistance through a State plan amendment with an income
eligibility level that is not less than the income eligibility
level that applied under the waiver, or as a result of the
application of subclause (VIII) of section 1902(a)(10)(A)(i),
shall not be considered to have in effect eligibility
standards, methodologies, or procedures that are more
restrictive than the standards, methodologies, or procedures in
effect under the State plan or under a waiver of the plan on
the date of enactment of the Patient Protection and Affordable
Care Act for purposes of determining compliance with the
requirements of paragraph (1), (2), or (3).''.
(c) Medicaid Benchmark Benefits Must Consist of at Least Minimum
Essential Coverage.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b))
is amended--
(1) in paragraph (1), in the matter preceding subparagraph (A),
by inserting ``subject to paragraphs (5) and (6),'' before
``each'';
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A), by inserting
``subject to paragraphs (5) and (6)'' after ``subsection
(a)(1),'';
(B) in subparagraph (A)--
(i) by redesignating clauses (iv) and (v) as clauses
(vi) and (vii), respectively; and
(ii) by inserting after clause (iii), the following:
``(iv) Coverage of prescription drugs.
``(v) Mental health services.''; and
(C) in subparagraph (C)--
(i) by striking clauses (i) and (ii); and
(ii) by redesignating clauses (iii) and (iv) as clauses
(i) and (ii), respectively; and
(3) by adding at the end the following new paragraphs:
``(5) Minimum standards.--Effective January 1, 2014, any
benchmark benefit package under paragraph (1) or benchmark
equivalent coverage under paragraph (2) must provide at least
essential health benefits as described in section 1302(b) of the
Patient Protection and Affordable Care Act.
``(6) Mental health services parity.--
``(A) In general.--In the case of any benchmark benefit
package under paragraph (1) or benchmark equivalent coverage
under paragraph (2) that is offered by an entity that is not a
medicaid managed care organization and that provides both
medical and surgical benefits and mental health or substance
use disorder benefits, the entity shall ensure that the
financial requirements and treatment limitations applicable to
such mental health or substance use disorder benefits comply
with the requirements of section 2705(a) of the Public Health
Service Act in the same manner as such requirements apply to a
group health plan.
``(B) Deemed compliance.--Coverage provided with respect to
an individual described in section 1905(a)(4)(B) and covered
under the State plan under section 1902(a)(10)(A) of the
services described in section 1905(a)(4)(B) (relating to early
and periodic screening, diagnostic, and treatment services
defined in section 1905(r)) and provided in accordance with
section 1902(a)(43), shall be deemed to satisfy the
requirements of subparagraph (A).''.
(d) Annual Reports on Medicaid Enrollment.--
(1) State reports.--Section 1902(a) of the Social Security Act
(42 U.S.C. 1396a(a)), as amended by subsection (b), is amended--
``(75) provide that, beginning January 2015, and annually
thereafter, the State shall submit a report to the Secretary that
contains--
``(A) the total number of enrolled and newly enrolled
individuals in the State plan or under a waiver of the plan for
the fiscal year ending on September 30 of the preceding
calendar year, disaggregated by population, including children,
parents, nonpregnant childless adults, disabled individuals,
elderly individuals, and such other categories or sub-
categories of individuals eligible for medical assistance under
the State plan or under a waiver of the plan as the Secretary
may require;
``(B) a description, which may be specified by population,
of the outreach and enrollment processes used by the State
during such fiscal year; and
``(C) any other data reporting determined necessary by the
Secretary to monitor enrollment and retention of individuals
eligible for medical assistance under the State plan or under a
waiver of the plan.''.
(2) Reports to congress.--Beginning April 2015, and annually
thereafter, the Secretary of Health and Human Services shall submit
a report to the appropriate committees of Congress on the total
enrollment and new enrollment in Medicaid for the fiscal year
ending on September 30 of the preceding calendar year on a national
and State-by-State basis, and shall include in each such report
such recommendations for administrative or legislative changes to
improve enrollment in the Medicaid program as the Secretary
determines appropriate.
(e) State Option for Coverage for Individuals With Income That
Exceeds 133 Percent of the Poverty Line.--
(1) Coverage as optional categorically needy group.--Section
1902 of the Social Security Act (42 U.S.C. 1396a) is amended--
(A) in subsection (a)(10)(A)(ii)--
(i) in subclause (XVIII), by striking ``or'' at the
(ii) in subclause (XIX), by adding ``or'' at the end;
(iii) by adding at the end the following new subclause:
``(XX) beginning January 1, 2014, who are under 65
years of age and are not described in or enrolled under
a previous subclause of this clause, and whose income
(as determined under subsection (e)(14)) exceeds 133
percent of the poverty line (as defined in section
2110(c)(5)) applicable to a family of the size involved
but does not exceed the highest income eligibility
level established under the State plan or under a
waiver of the plan, subject to subsection (hh);'' and
``(hh)(1) A State may elect to phase-in the extension of
eligibility for medical assistance to individuals described in
subclause (XX) of subsection (a)(10)(A)(ii) based on the categorical
group (including nonpregnant childless adults) or income, so long as
the State does not extend such eligibility to individuals described in
such subclause with higher income before making individuals described
in such subclause with lower income eligible for medical assistance.
``(2) If an individual described in subclause (XX) of subsection
(a)(10)(A)(ii) is the parent of a child who is under 19 years of age
(or such higher age as the State may have elected) who is eligible for
medical assistance under the State plan or under a waiver of such plan,
the individual may not be enrolled under the State plan unless the
(A) Section 1905(a) of such Act (42 U.S.C. 1396d(a)), as
amended by subsection (a)(5)(C), is amended in the matter
preceding paragraph (1)--
(i) by striking ``or'' at the end of clause (xiii);
(ii) by inserting ``or'' at the end of clause (xiv);
(iii) by inserting after clause (xiv) the following:
``(xv) individuals described in section
1902(a)(10)(A)(ii)(XX),''.
(B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4))
is amended by inserting ``1902(a)(10)(A)(ii)(XX),'' after
``1902(a)(10)(A)(ii)(XIX),''.
(C) Section 1920(e) of such Act (42 U.S.C. 1396r-1(e)), as
added by subsection (a)(4)(B), is amended by inserting ``or
clause (ii)(XX)'' after ``clause (i)(VIII)''.
(a) In General.--Section 1902(e) of the Social Security Act (42
U.S.C. 1396a(e)) is amended by adding at the end the following:
``(14) Income determined using modified gross income.--
``(A) In general.--Notwithstanding subsection (r) or any
other provision of this title, except as provided in
subparagraph (D), for purposes of determining income
eligibility for medical assistance under the State plan or
under any waiver of such plan and for any other purpose
applicable under the plan or waiver for which a determination
of income is required, including with respect to the imposition
of premiums and cost-sharing, a State shall use the modified
gross income of an individual and, in the case of an individual
in a family greater than 1, the household income of such
family. A State shall establish income eligibility thresholds
for populations to be eligible for medical assistance under the
State plan or a waiver of the plan using modified gross income
and household income that are not less than the effective
income eligibility levels that applied under the State plan or
waiver on the date of enactment of the Patient Protection and
Affordable Care Act. For purposes of complying with the
maintenance of effort requirements under subsection (gg) during
the transition to modified gross income and household income, a
State shall, working with the Secretary, establish an
equivalent income test that ensures individuals eligible for
medical assistance under the State plan or under a waiver of
the plan on the date of enactment of the Patient Protection and
Affordable Care Act, do not lose coverage under the State plan
or under a waiver of the plan. The Secretary may waive such
provisions of this title and title XXI as are necessary to
ensure that States establish income and eligibility
determination systems that protect beneficiaries.
``(B) No income or expense disregards.--No type of expense,
block, or other income disregard shall be applied by a State to
determine income eligibility for medical assistance under the
State plan or under any waiver of such plan or for any other
purpose applicable under the plan or waiver for which a
determination of income is required.
``(C) No assets test.--A State shall not apply any assets
or resources test for purposes of determining eligibility for
the plan.
``(D) Exceptions.--
``(i) Individuals eligible because of other aid or
assistance, elderly individuals, medically needy
individuals, and individuals eligible for medicare cost-
sharing.--Subparagraphs (A), (B), and (C) shall not apply
to the determination of eligibility under the State plan or
under a waiver for medical assistance for the following:
``(I) Individuals who are eligible for medical
assistance under the State plan or under a waiver of
the plan on a basis that does not require a
determination of income by the State agency
administering the State plan or waiver, including as a
result of eligibility for, or receipt of, other Federal
or State aid or assistance, individuals who are
eligible on the basis of receiving (or being treated as
if receiving) supplemental security income benefits
under title XVI, and individuals who are eligible as a
result of being or being deemed to be a child in foster
care under the responsibility of the State.
``(II) Individuals who have attained age 65.
``(III) Individuals who qualify for medical
assistance under the State plan or under any waiver of
such plan on the basis of being blind or disabled (or
being treated as being blind or disabled) without
regard to whether the individual is eligible for
supplemental security income benefits under title XVI
on the basis of being blind or disabled and including
an individual who is eligible for medical assistance on
the basis of section 1902(e)(3).
``(IV) Individuals described in subsection
(a)(10)(C).
``(V) Individuals described in any clause of
subsection (a)(10)(E).
``(ii) Express lane agency findings.--In the case of a
State that elects the Express Lane option under paragraph
(13), notwithstanding subparagraphs (A), (B), and (C), the
State may rely on a finding made by an Express Lane agency
in accordance with that paragraph relating to the income of
an individual for purposes of determining the individual's
under a waiver of the plan.
``(iii) Medicare prescription drug subsidies
determinations.--Subparagraphs (A), (B), and (C) shall not
apply to any determinations of eligibility for premium and
cost-sharing subsidies under and in accordance with section
1860D-14 made by the State pursuant to section 1935(a)(2).
``(iv) Long-term care.--Subparagraphs (A), (B), and (C)
shall not apply to any determinations of eligibility of
individuals for purposes of medical assistance for nursing
facility services, a level of care in any institution
equivalent to that of nursing facility services, home or
community-based services furnished under a waiver or State
plan amendment under section 1915 or a waiver under section
1115, and services described in section 1917(c)(1)(C)(ii).
``(v) Grandfather of current enrollees until date of
next regular redetermination.--An individual who, on
January 1, 2014, is enrolled in the State plan or under a
waiver of the plan and who would be determined ineligible
for medical assistance solely because of the application of
the modified gross income or household income standard
described in subparagraph (A), shall remain eligible for
medical assistance under the State plan or waiver (and
subject to the same premiums and cost-sharing as applied to
the individual on that date) through March 31, 2014, or the
date on which the individual's next regularly scheduled
redetermination of eligibility is to occur, whichever is
``(E) Transition planning and oversight.--Each State shall
submit to the Secretary for the Secretary's approval the income
eligibility thresholds proposed to be established using
modified gross income and household income, the methodologies
and procedures to be used to determine income eligibility using
modified gross income and household income and, if applicable,
a State plan amendment establishing an optional eligibility
category under subsection (a)(10)(A)(ii)(XX). To the extent
practicable, the State shall use the same methodologies and
procedures for purposes of making such determinations as the
State used on the date of enactment of the Patient Protection
and Affordable Care Act. The Secretary shall ensure that the
income eligibility thresholds proposed to be established using
modified gross income and household income, including under the
eligibility category established under subsection
(a)(10)(A)(ii)(XX), and the methodologies and procedures
proposed to be used to determine income eligibility, will not
result in children who would have been eligible for medical
assistance under the State plan or under a waiver of the plan
on the date of enactment of the Patient Protection and
Affordable Care Act no longer being eligible for such
``(F) Limitation on secretarial authority.--The Secretary
shall not waive compliance with the requirements of this
paragraph except to the extent necessary to permit a State to
coordinate eligibility requirements for dual eligible
individuals (as defined in section 1915(h)(2)(B)) under the
State plan or under a waiver of the plan and under title XVIII
and individuals who require the level of care provided in a
hospital, a nursing facility, or an intermediate care facility
for the mentally retarded.
``(G) Definitions of modified gross income and household
income.--In this paragraph, the terms `modified gross income'
and `household income' have the meanings given such terms in
section 36B(d)(2) of the Internal Revenue Code of 1986.
``(H) Continued application of medicaid rules regarding
point-in-time income and sources of income.--The requirement
under this paragraph for States to use modified gross income
and household income to determine income eligibility for
medical assistance under the State plan or under any waiver of
such plan and for any other purpose applicable under the plan
or waiver for which a determination of income is required shall
not be construed as affecting or limiting the application of--
``(i) the requirement under this title and under the
State plan or a waiver of the plan to determine an
individual's income as of the point in time at which an
application for medical assistance under the State plan or
a waiver of the plan is processed; or
``(ii) any rules established under this title or under
the State plan or a waiver of the plan regarding sources of
countable income.''.
(b) Conforming Amendment.--Section 1902(a)(17) of such Act (42
U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before
``(l)(3)''.
(c) Effective Date.--The amendments made by subsections (a) and (b)
take effect on January 1, 2014.
(a) In General.--Section 1906A of such Act (42 U.S.C. 1396e-1) is
(A) by striking ``may elect to'' and inserting ``shall'';
(B) by striking ``under age 19''; and
(C) by inserting ``, in the case of an individual under age
19,'' after ``(and'';
(2) in subsection (c), in the first sentence, by striking
``under age 19''; and
(A) in paragraph (2)--
(i) in the first sentence, by striking ``under age
19''; and
(ii) by striking the third sentence and inserting ``A
State may not require, as a condition of an individual (or
the individual's parent) being or remaining eligible for
medical assistance under this title, that the individual
(or the individual's parent) apply for enrollment in
qualified employer-sponsored coverage under this
section.''; and
(B) in paragraph (3), by striking ``the parent of an
individual under age 19'' and inserting ``an individual (or the
parent of an individual)''; and
(4) in subsection (e), by striking ``under age 19'' each place
(b) Conforming Amendment.--The heading for section 1906A of such
Act (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
(c) Effective Date.--The amendments made by this section take
effect on January 1, 2014.
(a) In General.--Section 1902(a)(10)(A)(i) of the Social Security
Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended--
(1) by striking ``or'' at the end of subclause (VII);
(2) by adding ``or'' at the end of subclause (VIII); and
(3) by inserting after subclause (VIII) the following:
``(IX) who were in foster care under the
responsibility of a State for more than 6 months
(whether or not consecutive) but are no longer in such
care, who are not described in any of subclauses (I)
through (VII) of this clause, and who are under 25
years of age;''.
(b) Option To Provide Presumptive Eligibility.--Section 1920(e) of
such Act (42 U.S.C. 1396r-1(e)), as added by section 2001(a)(4)(B) and
amended by section 2001(e)(2)(C), is amended by inserting ``, clause
(i)(IX),'' after ``clause (i)(VIII)''.
(c) Conforming Amendments.--
(1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), as
amended by section 2001(a)(5)(D), is amended by inserting
``1902(a)(10)(A)(i)(IX),'' after ``1902(a)(10)(A)(i)(VIII),''.
(2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 1396u-
7(a)(2)(B)(viii)) is amended by inserting ``, or the individual
qualifies for medical assistance on the basis of section
1902(a)(10)(A)(i)(IX)'' before the period.
(d) Effective Date.--The amendments made by this section take
(a) Increase in Limit on Payments.--Section 1108(g) of the Social
Security Act (42 U.S.C. 1308(g)) is amended--
by striking ``paragraph (3)'' and inserting ``paragraphs (3) and
(5)'';
(2) in paragraph (4), by striking ``and (3)'' and inserting
``(3), and (4)''; and
(3) by adding at the end the following paragraph:
``(5) Fiscal year 2011 and thereafter.--The amounts otherwise
determined under this subsection for Puerto Rico, the Virgin
Islands, Guam, the Northern Mariana Islands, and American Samoa for
the second, third, and fourth quarters of fiscal year 2011, and for
each fiscal year after fiscal year 2011 (after the application of
subsection (f) and the preceding paragraphs of this subsection),
shall be increased by 30 percent.''.
(b) Disregard of Payments for Mandatory Expanded Enrollment.--
Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)(4)) is amended--
(1) by striking ``to fiscal years beginning'' and inserting
``to--
``(A) fiscal years beginning'';
(2) by striking the period at the end and inserting ``; and'';
(3) by adding at the end the following:
``(B) fiscal years beginning with fiscal year 2014,
payments made to Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands, or American Samoa with respect to
amounts expended for medical assistance for newly eligible (as
defined in section 1905(y)(2)) nonpregnant childless adults who
are eligible under subclause (VIII) of section
1902(a)(10)(A)(i) and whose income (as determined under section
1902(e)(14)) does not exceed (in the case of each such
commonwealth and territory respectively) the income eligibility
level in effect for that population under title XIX or under a
Affordable Care Act, shall not be taken into account in
applying subsection (f) (as increased in accordance with
paragraphs (1), (2), (3), and (5) of this subsection) to such
commonwealth or territory for such fiscal year.''.
(c) Increased FMAP.--
(1) In general.--The first sentence of section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)) is amended by striking
``shall be 50 per centum'' and inserting ``shall be 55 percent''.
(2) Effective date.--The amendment made by paragraph (1) takes
Section 1905 of the Social Security Act (42 U.S.C. 1396d), as
amended by sections 2001(a)(3) and 2001(b)(2), is amended--
(1) in subsection (b), in the first sentence, by striking
``subsection (y)'' and inserting ``subsections (y) and (aa)''; and
``(aa)(1) Notwithstanding subsection (b), beginning January 1,
2011, the Federal medical assistance percentage for a fiscal year for a
disaster-recovery FMAP adjustment State shall be equal to the
``(A) In the case of the first fiscal year (or part of a fiscal
year) for which this subsection applies to the State, the Federal
medical assistance percentage determined for the fiscal year
without regard to this subsection and subsection (y), increased by
50 percent of the number of percentage points by which the Federal
medical assistance percentage determined for the State for the
fiscal year without regard to this subsection and subsection (y),
is less than the Federal medical assistance percentage determined
for the State for the preceding fiscal year after the application
of only subsection (a) of section 5001 of Public Law 111-5 (if
applicable to the preceding fiscal year) and without regard to this
subsection, subsection (y), and subsections (b) and (c) of section
5001 of Public Law 111-5.
``(B) In the case of the second or any succeeding fiscal year
for which this subsection applies to the State, the Federal medical
assistance percentage determined for the preceding fiscal year
under this subsection for the State, increased by 25 percent of the
number of percentage points by which the Federal medical assistance
percentage determined for the State for the fiscal year without
regard to this subsection and subsection (y), is less than the
Federal medical assistance percentage determined for the State for
the preceding fiscal year under this subsection.
``(2) In this subsection, the term `disaster-recovery FMAP
adjustment State' means a State that is one of the 50 States or the
District of Columbia, for which, at any time during the preceding 7
fiscal years, the President has declared a major disaster under section
401 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act and determined as a result of such disaster that every county or
parish in the State warrant individual and public assistance or public
assistance from the Federal Government under such Act and for which--
5001 of Public Law 111-5, by at least 3 percentage points; and
assistance percentage determined for the State for the fiscal year
without regard to this subsection and subsection (y), is less than
the Federal medical assistance percentage determined for the State
for the preceding fiscal year under this subsection by at least 3
percentage points.
``(3) The Federal medical assistance percentage determined for a
disaster-recovery FMAP adjustment State under paragraph (1) shall apply
for purposes of this title (other than with respect to disproportionate
share hospital payments described in section 1923 and payments under
this title that are based on the enhanced FMAP described in 2105(b))
and shall not apply with respect to payments under title IV (other than
under part E of title IV) or payments under title XXI.''.
(a) Rescission.--Any amounts available to the Medicaid Improvement
Fund established under section 1941 of the Social Security Act (42
U.S.C. 1396w-1) for any of fiscal years 2014 through 2018 that are
available for expenditure from the Fund and that are not so obligated
as of the date of the enactment of this Act are rescinded.
(b) Conforming Amendments.--Section 1941(b)(1) of the Social
Security Act (42 U.S.C. 1396w-1(b)(1)) is amended--
(1) in subparagraph (A), by striking ``$100,000,000'' and
inserting ``$0''; and
(2) in subparagraph (B), by striking ``$150,000,000'' and
inserting ``$0''.
Subtitle B--Enhanced Support for the Children's Health Insurance
(a) In General.--Section 2105(b) of the Social Security Act (42
U.S.C. 1397ee(b)) is amended by adding at the end the following:
``Notwithstanding the preceding sentence, during the period that begins
on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP
determined for a State for a fiscal year (or for any portion of a
fiscal year occurring during such period) shall be increased by 23
percentage points, but in no case shall exceed 100 percent. The
increase in the enhanced FMAP under the preceding sentence shall not
apply with respect to determining the payment to a State under
subsection (a)(1) for expenditures described in subparagraph (D)(iv),
paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first
sentence of section 1905(b).''.
(b) Maintenance of Effort.--
(1) In general.--Section 2105(d) of the Social Security Act (42
U.S.C. 1397ee(d)) is amended by adding at the end the following:
october 1, 2019.--
``(A) In general.--During the period that begins on the
date of enactment of the Patient Protection and Affordable Care
Act and ends on September 30, 2019, a State shall not have in
effect eligibility standards, methodologies, or procedures
under its State child health plan (including any waiver under
such plan) for children (including children provided medical
assistance for which payment is made under section
2105(a)(1)(A)) that are more restrictive than the eligibility
standards, methodologies, or procedures, respectively, under
such plan (or waiver) as in effect on the date of enactment of
that Act. The preceding sentence shall not be construed as
preventing a State during such period from--
``(i) applying eligibility standards, methodologies, or
procedures for children under the State child health plan
or under any waiver of the plan that are less restrictive
than the eligibility standards, methodologies, or
procedures, respectively, for children under the plan or
waiver that are in effect on the date of enactment of such
Act; or
``(ii) imposing a limitation described in section
2112(b)(7) for a fiscal year in order to limit expenditures
under the State child health plan to those for which
Federal financial participation is available under this
section for the fiscal year.
``(B) Assurance of exchange coverage for targeted low-
income children unable to be provided child health assistance
as a result of funding shortfalls.--In the event that
allotments provided under section 2104 are insufficient to
provide coverage to all children who are eligible to be
targeted low-income children under the State child health plan
under this title, a State shall establish procedures to ensure
that such children are provided coverage through an Exchange
(2) Conforming amendment to title xxi medicaid maintenance of
effort.--Section 2105(d)(1) of the Social Security Act (42 U.S.C.
1397ee(d)(1)) is amended by adding before the period ``, except as
required under section 1902(e)(14)''.
(c) No Enrollment Bonus Payments for Children Enrolled After Fiscal
Year 2013.--Section 2105(a)(3)(F)(iii) of the Social Security Act (42
U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ``or any children
enrolled on or after October 1, 2013'' before the period.
(d) Income Eligibility Determined Using Modified Gross Income.--
(1) State plan requirement.--Section 2102(b)(1)(B) of the
Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
(A) in clause (iii), by striking ``and'' after the
semicolon;
(B) in clause (iv), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(v) shall, beginning January 1, 2014, use modified
gross income and household income (as defined in section
36B(d)(2) of the Internal Revenue Code of 1986) to
determine eligibility for child health assistance under the
State child health plan or under any waiver of such plan
and for any other purpose applicable under the plan or
waiver for which a determination of income is required,
including with respect to the imposition of premiums and
cost-sharing, consistent with section 1902(e)(14).''.
(2) Conforming amendment.--Section 2107(e)(1) of the Social
Security Act (42 U.S.C. 1397gg(e)(1)) is amended--
(A) by redesignating subparagraphs (E) through (L) as
subparagraphs (F) through (M), respectively; and
(B) by inserting after subparagraph (D), the following:
``(E) Section 1902(e)(14) (relating to income determined
using modified gross income and household income).''.
(e) Application of Streamlined Enrollment System.--Section
2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as
amended by subsection (d)(2), is amended by adding at the end the
``(N) Section 1943(b) (relating to coordination with State
Exchanges and the State Medicaid agency).''.
(f) CHIP Eligibility for Children Ineligible for Medicaid as a
Result of Elimination of Disregards.--Notwithstanding any other
provision of law, a State shall treat any child who is determined to be
ineligible for medical assistance under the State Medicaid plan or
under a waiver of the plan as a result of the elimination of the
application of an income disregard based on expense or type of income,
as required under section 1902(e)(14) of the Social Security Act (as
added by this Act), as a targeted low-income child under section
2110(b) (unless the child is excluded under paragraph (2) of that
section) and shall provide child health assistance to the child under
the State child health plan (whether implemented under title XIX or
XXI, or both, of the Social Security Act).
(a) CHIPRA.--Effective as if included in the enactment of the
Children's Health Insurance Program Reauthorization Act of 2009 (Public
Law 111-3) (in this section referred to as ``CHIPRA''):
(1) Section 2104(m) of the Social Security Act, as added by
section 102 of CHIPRA, is amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6), the following:
``(7) Adjustment of fiscal year 2010 allotments to account for
changes in projected spending for certain previously approved
expansion programs.--For purposes of recalculating the fiscal year
2010 allotment, in the case of one of the 50 States or the District
of Columbia that has an approved State plan amendment effective
January 1, 2006, to provide child health assistance through the
provision of benefits under the State plan under title XIX for
children from birth through age 5 whose family income does not
exceed 200 percent of the poverty line, the Secretary shall
increase the allotment by an amount that would be equal to the
Federal share of expenditures that would have been claimed at the
enhanced FMAP rate rather than the Federal medical assistance
percentage matching rate for such population.''.
(2) Section 605 of CHIPRA is amended by striking ``legal
residents'' and insert ``lawfully residing in the United States''.
(3) Subclauses (I) and (II) of paragraph (3)(C)(i) of section
2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)), as
added by section 104 of CHIPRA, are each amended by striking ``,
respectively''.
(4) Section 2105(a)(3)(E)(ii) of the Social Security Act (42
U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA, is
amended by striking subclause (IV).
(5) Section 2105(c)(9)(B) of the Social Security Act (42 U.S.C.
1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA, is
amended by striking ``section 1903(a)(3)(F)'' and inserting
``section 1903(a)(3)(G)''.
(6) Section 2109(b)(2)(B) of the Social Security Act (42 U.S.C.
1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is amended by
striking ``the child population growth factor under section
2104(m)(5)(B)'' and inserting ``a high-performing State under
section 2111(b)(3)(B)''.
(7) Section 2110(c)(9)(B)(v) of the Social Security Act (42
U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of CHIPRA,
is amended by striking ``school or school system'' and inserting
``local educational agency (as defined under section 9101 of the
Elementary and Secondary Education Act of 1965''.
(8) Section 211(a)(1)(B) of CHIPRA is amended--
(A) by striking ``is amended'' and all that follows through
``adding'' and inserting ``is amended by adding''; and
(B) by redesignating the new subparagraph to be added by
such section to section 1903(a)(3) of the Social Security Act
as a new subparagraph (H).
(b) ARRA.--Effective as if included in the enactment of section
5006(a) of division B of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5), the second sentence of section 1916A(a)(1) of
the Social Security Act (42 U.S.C. 1396o-1(a)(1)) is amended by
striking ``or (i)'' and inserting ``, (i), or (j)''.
Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is
``SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE
HEALTH INSURANCE EXCHANGES.
``(a) Condition for Participation in Medicaid.--As a condition of
the State plan under this title and receipt of any Federal financial
assistance under section 1903(a) for calendar quarters beginning after
January 1, 2014, a State shall ensure that the requirements of
subsection (b) is met.
``(b) Enrollment Simplification and Coordination With State Health
Insurance Exchanges and Chip.--
``(1) In general.--A State shall establish procedures for--
``(A) enabling individuals, through an Internet website
that meets the requirements of paragraph (4), to apply for
the plan, to be enrolled in the State plan or waiver, to renew
their enrollment in the plan or waiver, and to consent to
enrollment or reenrollment in the State plan through electronic
signature;
``(B) enrolling, without any further determination by the
State and through such website, individuals who are identified
by an Exchange established by the State under section 1311 of
the Patient Protection and Affordable Care Act as being
eligible for--
``(i) medical assistance under the State plan or under
a waiver of the plan; or
``(ii) child health assistance under the State child
health plan under title XXI;
``(C) ensuring that individuals who apply for but are
determined to be ineligible for medical assistance under the
State plan or a waiver or ineligible for child health
assistance under the State child health plan under title XXI,
are screened for eligibility for enrollment in qualified health
plans offered through such an Exchange and, if applicable,
premium assistance for the purchase of a qualified health plan
under section 36B of the Internal Revenue Code of 1986 (and, if
applicable, advance payment of such assistance under section
1412 of the Patient Protection and Affordable Care Act), and,
if eligible, enrolled in such a plan without having to submit
an additional or separate application, and that such
individuals receive information regarding reduced cost-sharing
for eligible individuals under section 1402 of the Patient
Protection and Affordable Care Act, and any other assistance or
subsidies available for coverage obtained through the Exchange;
``(D) ensuring that the State agency responsible for
administering the State plan under this title (in this section
referred to as the `State Medicaid agency'), the State agency
responsible for administering the State child health plan under
title XXI (in this section referred to as the `State CHIP
agency') and an Exchange established by the State under section
1311 of the Patient Protection and Affordable Care Act utilize
a secure electronic interface sufficient to allow for a
determination of an individual's eligibility for such medical
assistance, child health assistance, or premium assistance, and
enrollment in the State plan under this title, title XXI, or a
qualified health plan, as appropriate;
``(E) coordinating, for individuals who are enrolled in the
State plan or under a waiver of the plan and who are also
enrolled in a qualified health plan offered through such an
Exchange, and for individuals who are enrolled in the State
child health plan under title XXI and who are also enrolled in
a qualified health plan, the provision of medical assistance or
child health assistance to such individuals with the coverage
provided under the qualified health plan in which they are
enrolled, including services described in section 1905(a)(4)(B)
(relating to early and periodic screening, diagnostic, and
treatment services defined in section 1905(r)) and provided in
accordance with the requirements of section 1902(a)(43); and
``(F) conducting outreach to and enrolling vulnerable and
underserved populations eligible for medical assistance under
this title XIX or for child health assistance under title XXI,
including children, unaccompanied homeless youth, children and
youth with special health care needs, pregnant women, racial
and ethnic minorities, rural populations, victims of abuse or
trauma, individuals with mental health or substance-related
disorders, and individuals with HIV/AIDS.
``(2) Agreements with state health insurance exchanges.--The
State Medicaid agency and the State CHIP agency may enter into an
agreement with an Exchange established by the State under section
1311 of the Patient Protection and Affordable Care Act under which
the State Medicaid agency or State CHIP agency may determine
whether a State resident is eligible for premium assistance for the
purchase of a qualified health plan under section 36B of the
Internal Revenue Code of 1986 (and, if applicable, advance payment
of such assistance under section 1412 of the Patient Protection and
Affordable Care Act), so long as the agreement meets such
conditions and requirements as the Secretary of the Treasury may
prescribe to reduce administrative costs and the likelihood of
eligibility errors and disruptions in coverage.
``(3) Streamlined enrollment system.--The State Medicaid agency
and State CHIP agency shall participate in and comply with the
requirements for the system established under section 1413 of the
Patient Protection and Affordable Care Act (relating to streamlined
procedures for enrollment through an Exchange, Medicaid, and CHIP).
``(4) Enrollment website requirements.--The procedures
established by State under paragraph (1) shall include establishing
and having in operation, not later than January 1, 2014, an
Internet website that is linked to any website of an Exchange
Protection and Affordable Care Act and to the State CHIP agency (if
different from the State Medicaid agency) and allows an individual
who is eligible for medical assistance under the State plan or
under a waiver of the plan and who is eligible to receive premium
credit assistance for the purchase of a qualified health plan under
section 36B of the Internal Revenue Code of 1986 to compare the
benefits, premiums, and cost-sharing applicable to the individual
under the State plan or waiver with the benefits, premiums, and
cost-sharing available to the individual under a qualified health
plan offered through such an Exchange, including, in the case of a
child, the coverage that would be provided for the child through
the State plan or waiver with the coverage that would be provided
to the child through enrollment in family coverage under that plan
and as supplemental coverage by the State under the State plan or
waiver.
``(5) Continued need for assessment for home and community-
based services.--Nothing in paragraph (1) shall limit or modify the
requirement that the State assess an individual for purposes of
providing home and community-based services under the State plan or
under any waiver of such plan for individuals described in
subsection (a)(10)(A)(ii)(VI).''.
(a) In General.--Section 1902(a)(47) of the Social Security Act (42
U.S.C. 1396a(a)(47)) is amended--
(1) by striking ``at the option of the State, provide'' and
inserting ``provide--
``(A) at the option of the State,'';
(2) by inserting ``and'' after the semicolon; and
``(B) that any hospital that is a participating provider
under the State plan may elect to be a qualified entity for
purposes of determining, on the basis of preliminary
information, whether any individual is eligible for medical
for purposes of providing the individual with medical
assistance during a presumptive eligibility period, in the same
manner, and subject to the same requirements, as apply to the
State options with respect to populations described in section
1920, 1920A, or 1920B (but without regard to whether the State
has elected to provide for a presumptive eligibility period
under any such sections), subject to such guidance as the
Secretary shall establish;''.
(b) Conforming Amendment.--Section 1903(u)(1)(D)(v) of such Act (42
U.S.C. 1396b(u)(1)(D)v)) is amended--
(1) by striking ``or for'' and inserting ``for''; and
(2) by inserting before the period at the end the following:
``, or for medical assistance provided to an individual during a
presumptive eligibility period resulting from a determination of
presumptive eligibility made by a hospital that elects under
section 1902(a)(47)(B) to be a qualified entity for such purpose''.
effect on January 1, 2014, and apply to services furnished on or after
that date.
(a) In General.--Section 1905 of the Social Security Act (42 U.S.C.
(A) in paragraph (27), by striking ``and'' at the end;
(B) by redesignating paragraph (28) as paragraph (29); and
``(28) freestanding birth center services (as defined in
subsection (l)(3)(A)) and other ambulatory services that are
offered by a freestanding birth center (as defined in subsection
(l)(3)(B)) and that are otherwise included in the plan; and''; and
(2) in subsection (l), by adding at the end the following new
``(3)(A) The term `freestanding birth center services' means
services furnished to an individual at a freestanding birth center (as
defined in subparagraph (B)) at such center.
``(B) The term `freestanding birth center' means a health
facility--
``(i) that is not a hospital;
``(ii) where childbirth is planned to occur away from the
pregnant woman's residence;
``(iii) that is licensed or otherwise approved by the State to
provide prenatal labor and delivery or postpartum care and other
ambulatory services that are included in the plan; and
``(iv) that complies with such other requirements relating to
the health and safety of individuals furnished services by the
facility as the State shall establish.
``(C) A State shall provide separate payments to providers
administering prenatal labor and delivery or postpartum care in a
freestanding birth center (as defined in subparagraph (B)), such as
nurse midwives and other providers of services such as birth attendants
recognized under State law, as determined appropriate by the Secretary.
For purposes of the preceding sentence, the term `birth attendant'
means an individual who is recognized or registered by the State
involved to provide health care at childbirth and who provides such
care within the scope of practice under which the individual is legally
authorized to perform such care under State law (or the State
regulatory mechanism provided by State law), regardless of whether the
individual is under the supervision of, or associated with, a physician
or other health care provider. Nothing in this subparagraph shall be
construed as changing State law requirements applicable to a birth
attendant.''.
(b) Conforming Amendment.--Section 1902(a)(10)(A) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter
preceding clause (i) by striking ``and (21)'' and inserting ``, (21),
and (28)''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date of
the enactment of this Act and shall apply to services furnished on
or after such date.
(2) Exception if state legislation required.--In the case of a
State plan for medical assistance under title XIX of the Social
Security Act which the Secretary of Health and Human Services
determines requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirement imposed by the amendments made by this section, the
State plan shall not be regarded as failing to comply with the
requirements of such title solely on the basis of its failure to
meet this additional requirement before the first day of the first
calendar quarter beginning after the close of the first regular
session of the State legislature that begins after the date of the
enactment of this Act. For purposes of the previous sentence, in
the case of a State that has a 2-year legislative session, each
year of such session shall be deemed to be a separate regular
session of the State legislature.
(a) In General.--Section 1905(o)(1) of the Social Security Act (42
U.S.C. 1396d(o)(1)) is amended--
(1) in subparagraph (A), by striking ``subparagraph (B)'' and
inserting ``subparagraphs (B) and (C)''; and
(2) by adding at the end the following new subparagraph:
``(C) A voluntary election to have payment made for hospice care
for a child (as defined by the State) shall not constitute a waiver of
any rights of the child to be provided with, or to have payment made
under this title for, services that are related to the treatment of the
child's condition for which a diagnosis of terminal illness has been
made.''.
(b) Application to CHIP.--Section 2110(a)(23) of the Social
Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting
``(concurrent, in the case of an individual who is a child, with care
related to the treatment of the child's condition with respect to which
a diagnosis of terminal illness has been made'' after ``hospice care''.
(a) Coverage as Optional Categorically Needy Group.--
(1) In general.--Section 1902(a)(10)(A)(ii) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section
2001(e), is amended--
(A) in subclause (XIX), by striking ``or'' at the end;
(B) in subclause (XX), by adding ``or'' at the end; and
(C) by adding at the end the following new subclause:
``(XXI) who are described in subsection (ii)
(relating to individuals who meet certain income
standards);''.
(2) Group described.--Section 1902 of such Act (42 U.S.C.
1396a), as amended by section 2001(d), is amended by adding at the
end the following new subsection:
``(ii)(1) Individuals described in this subsection are
individuals--
``(A) whose income does not exceed an income eligibility
level established by the State that does not exceed the highest
income eligibility level established under the State plan under
this title (or under its State child health plan under title
XXI) for pregnant women; and
``(B) who are not pregnant.
``(2) At the option of a State, individuals described in this
subsection may include individuals who, had individuals applied on
or before January 1, 2007, would have been made eligible pursuant
to the standards and processes imposed by that State for benefits
described in clause (XV) of the matter following subparagraph (G)
of section subsection (a)(10) pursuant to a waiver granted under
section 1115.
``(3) At the option of a State, for purposes of subsection
(a)(17)(B), in determining eligibility for services under this
subsection, the State may consider only the income of the applicant
or recipient.''.
(3) Limitation on benefits.--Section 1902(a)(10) of the Social
Security Act (42 U.S.C. 1396a(a)(10)), as amended by section
2001(a)(5)(A), is amended in the matter following subparagraph
(G)--
(A) by striking ``and (XV)'' and inserting ``(XV)''; and
(B) by inserting ``, and (XVI) the medical assistance made
available to an individual described in subsection (ii) shall
be limited to family planning services and supplies described
in section 1905(a)(4)(C) including medical diagnosis and
treatment services that are provided pursuant to a family
planning service in a family planning setting'' before the
semicolon.
(A) Section 1905(a) of the Social Security Act (42 U.S.C.
1396d(a)), as amended by section 2001(e)(2)(A), is amended in
the matter preceding paragraph (1)--
(i) in clause (xiv), by striking ``or'' at the end;
(ii) in clause (xv), by adding ``or'' at the end; and
(iii) by inserting after clause (xv) the following:
``(xvi) individuals described in section 1902(ii),''.
(B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)),
as amended by section 2001(e)(2)(B), is amended by inserting
``1902(a)(10)(A)(ii)(XXI),'' after ``1902(a)(10)(A)(ii)(XX),''.
(b) Presumptive Eligibility.--
(1) In general.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended by inserting after section 1920B
``presumptive eligibility for family planning services
``Sec. 1920C.  (a) State Option.--State plan approved under section
1902 may provide for making medical assistance available to an
individual described in section 1902(ii) (relating to individuals who
meet certain income eligibility standard) during a presumptive
eligibility period. In the case of an individual described in section
1902(ii), such medical assistance shall be limited to family planning
services and supplies described in 1905(a)(4)(C) and, at the State's
option, medical diagnosis and treatment services that are provided in
conjunction with a family planning service in a family planning
``(b) Definitions.--For purposes of this section:
``(1) Presumptive eligibility period.--The term `presumptive
eligibility period' means, with respect to an individual described
in subsection (a), the period that--
``(A) begins with the date on which a qualified entity
determines, on the basis of preliminary information, that the
individual is described in section 1902(ii); and
``(B) ends with (and includes) the earlier of--
``(i) the day on which a determination is made with
respect to the eligibility of such individual for services
under the State plan; or
``(ii) in the case of such an individual who does not
file an application by the last day of the month following
the month during which the entity makes the determination
referred to in subparagraph (A), such last day.
``(2) Qualified entity.--
``(A) In general.--Subject to subparagraph (B), the term
`qualified entity' means any entity that--
``(i) is eligible for payments under a State plan
approved under this title; and
``(ii) is determined by the State agency to be capable
of making determinations of the type described in paragraph
(1)(A).
``(B) Rule of construction.--Nothing in this paragraph
shall be construed as preventing a State from limiting the
classes of entities that may become qualified entities in order
to prevent fraud and abuse.
``(c) Administration.--
``(1) In general.--The State agency shall provide qualified
entities with--
``(A) such forms as are necessary for an application to be
made by an individual described in subsection (a) for medical
assistance under the State plan; and
``(B) information on how to assist such individuals in
completing and filing such forms.
``(2) Notification requirements.--A qualified entity that
determines under subsection (b)(1)(A) that an individual described
in subsection (a) is presumptively eligible for medical assistance
under a State plan shall--
``(A) notify the State agency of the determination within 5
working days after the date on which determination is made; and
``(B) inform such individual at the time the determination
is made that an application for medical assistance is required
to be made by not later than the last day of the month
following the month during which the determination is made.
``(3) Application for medical assistance.--In the case of an
individual described in subsection (a) who is determined by a
qualified entity to be presumptively eligible for medical
assistance under a State plan, the individual shall apply for
medical assistance by not later than the last day of the month
``(d) Payment.--Notwithstanding any other provision of law, medical
assistance that--
``(1) is furnished to an individual described in subsection
(a)--
``(A) during a presumptive eligibility period; and
``(B) by a entity that is eligible for payments under the
State plan; and
``(2) is included in the care and services covered by the State
plan,
shall be treated as medical assistance provided by such plan for
purposes of clause (4) of the first sentence of section 1905(b).''.
(A) Section 1902(a)(47) of the Social Security Act (42
U.S.C. 1396a(a)(47)), as amended by section 2202(a), is
(i) in subparagraph (A), by inserting before the
semicolon at the end the following: ``and provide for
making medical assistance available to individuals
described in subsection (a) of section 1920C during a
presumptive eligibility period in accordance with such
section''; and
(ii) in subparagraph (B), by striking ``or 1920B'' and
inserting ``1920B, or 1920C''.
(B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.
1396b(u)(1)(D)(v)), as amended by section 2202(b), is amended
by inserting ``or for medical assistance provided to an
individual described in subsection (a) of section 1920C during
a presumptive eligibility period under such section,'' after
``1920B during a presumptive eligibility period under such
section,''.
(c) Clarification of Coverage of Family Planning Services and
Supplies.--Section 1937(b) of the Social Security Act (42 U.S.C. 1396u-
7(b)), as amended by section 2001(c), is amended by adding at the end
``(7) Coverage of family planning services and supplies.--
Notwithstanding the previous provisions of this section, a State
may not provide for medical assistance through enrollment of an
individual with benchmark coverage or benchmark-equivalent coverage
under this section unless such coverage includes for any individual
described in section 1905(a)(4)(C), medical assistance for family
planning services and supplies in accordance with such section.''.
effect on the date of the enactment of this Act and shall apply to
items and services furnished on or after such date.
Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is
amended by inserting ``or the care and services themselves, or both''
before ``(if provided in or after''.
Section 1915 of the Social Security Act (42 U.S.C. 1396n) is
``(k) State Plan Option To Provide Home and Community-based
Attendant Services and Supports.--
``(1) In general.--Subject to the succeeding provisions of this
subsection, beginning October 1, 2010, a State may provide through
a State plan amendment for the provision of medical assistance for
home and community-based attendant services and supports for
individuals who are eligible for medical assistance under the State
plan whose income does not exceed 150 percent of the poverty line
(as defined in section 2110(c)(5)) or, if greater, the income level
applicable for an individual who has been determined to require an
institutional level of care to be eligible for nursing facility
services under the State plan and with respect to whom there has
been a determination that, but for the provision of such services,
the individuals would require the level of care provided in a
hospital, a nursing facility, an intermediate care facility for the
mentally retarded, or an institution for mental diseases, the cost
of which could be reimbursed under the State plan, but only if the
individual chooses to receive such home and community-based
attendant services and supports, and only if the State meets the
following requirements:
``(A) Availability.--The State shall make available home
and community-based attendant services and supports to eligible
individuals, as needed, to assist in accomplishing activities
of daily living, instrumental activities of daily living, and
health-related tasks through hands-on assistance, supervision,
or cueing--
``(i) under a person-centered plan of services and
supports that is based on an assessment of functional need
and that is agreed to in writing by the individual or, as
appropriate, the individual's representative;
``(ii) in a home or community setting, which does not
include a nursing facility, institution for mental
diseases, or an intermediate care facility for the mentally
retarded;
``(iii) under an agency-provider model or other model
(as defined in paragraph (6)(C )); and
``(iv) the furnishing of which--
``(I) is selected, managed, and dismissed by the
individual, or, as appropriate, with assistance from
the individual's representative;
``(II) is controlled, to the maximum extent
possible, by the individual or where appropriate, the
individual's representative, regardless of who may act
as the employer of record; and
``(III) provided by an individual who is qualified
to provide such services, including family members (as
defined by the Secretary).
``(B) Included services and supports.--In addition to
assistance in accomplishing activities of daily living,
instrumental activities of daily living, and health related
tasks, the home and community-based attendant services and
supports made available include--
``(i) the acquisition, maintenance, and enhancement of
skills necessary for the individual to accomplish
activities of daily living, instrumental activities of
daily living, and health related tasks;
``(ii) back-up systems or mechanisms (such as the use
of beepers or other electronic devices) to ensure
continuity of services and supports; and
``(iii) voluntary training on how to select, manage,
and dismiss attendants.
``(C) Excluded services and supports.--Subject to
subparagraph (D), the home and community-based attendant
services and supports made available do not include--
``(i) room and board costs for the individual;
``(ii) special education and related services provided
under the Individuals with Disabilities Education Act and
vocational rehabilitation services provided under the
Rehabilitation Act of 1973;
``(iii) assistive technology devices and assistive
technology services other than those under (1)(B)(ii);
``(iv) medical supplies and equipment; or
``(v) home modifications.
``(D) Permissible services and supports.--The home and
community-based attendant services and supports may include--
``(i) expenditures for transition costs such as rent
and utility deposits, first month's rent and utilities,
bedding, basic kitchen supplies, and other necessities
required for an individual to make the transition from a
nursing facility, institution for mental diseases, or
intermediate care facility for the mentally retarded to a
community-based home setting where the individual resides;
``(ii) expenditures relating to a need identified in an
individual's person-centered plan of services that increase
independence or substitute for human assistance, to the
extent that expenditures would otherwise be made for the
human assistance.
``(2) Increased federal financial participation.--For purposes
of payments to a State under section 1903(a)(1), with respect to
amounts expended by the State to provide medical assistance under
the State plan for home and community-based attendant services and
supports to eligible individuals in accordance with this subsection
during a fiscal year quarter occurring during the period described
in paragraph (1), the Federal medical assistance percentage
applicable to the State (as determined under section 1905(b)) shall
be increased by 6 percentage points.
``(3) State requirements.--In order for a State plan amendment
to be approved under this subsection, the State shall--
``(A) develop and implement such amendment in collaboration
with a Development and Implementation Council established by
the State that includes a majority of members with
disabilities, elderly individuals, and their representatives
and consults and collaborates with such individuals;
``(B) provide consumer controlled home and community-based
attendant services and supports to individuals on a statewide
basis, in a manner that provides such services and supports in
the most integrated setting appropriate to the individual's
needs, and without regard to the individual's age, type or
nature of disability, severity of disability, or the form of
home and community-based attendant services and supports that
the individual requires in order to lead an independent life;
``(C) with respect to expenditures during the first full
fiscal year in which the State plan amendment is implemented,
maintain or exceed the level of State expenditures for medical
assistance that is provided under section 1905(a), section
1915, section 1115, or otherwise to individuals with
disabilities or elderly individuals attributable to the
preceding fiscal year;
``(D) establish and maintain a comprehensive, continuous
quality assurance system with respect to community- based
attendant services and supports that--
``(i) includes standards for agency-based and other
delivery models with respect to training, appeals for
denials and reconsideration procedures of an individual
plan, and other factors as determined by the Secretary;
``(ii) incorporates feedback from consumers and their
representatives, disability organizations, providers,
families of disabled or elderly individuals, members of the
community, and others and maximizes consumer independence
and consumer control;
``(iii) monitors the health and well-being of each
individual who receives home and community-based attendant
services and supports, including a process for the
mandatory reporting, investigation, and resolution of
allegations of neglect, abuse, or exploitation in
connection with the provision of such services and
supports; and
``(iv) provides information about the provisions of the
quality assurance required under clauses (i) through (iii)
to each individual receiving such services; and
``(E) collect and report information, as determined
necessary by the Secretary, for the purposes of approving the
State plan amendment, providing Federal oversight, and
conducting an evaluation under paragraph (5)(A), including data
regarding how the State provides home and community-based
attendant services and supports and other home and community-
based services, the cost of such services and supports, and how
the State provides individuals with disabilities who otherwise
qualify for institutional care under the State plan or under a
waiver the choice to instead receive home and community-based
services in lieu of institutional care.
``(4) Compliance with certain laws.--A State shall ensure that,
regardless of whether the State uses an agency-provider model or
other models to provide home and community-based attendant services
and supports under a State plan amendment under this subsection,
such services and supports are provided in accordance with the
requirements of the Fair Labor Standards Act of 1938 and applicable
Federal and State laws regarding--
``(A) withholding and payment of Federal and State income
and payroll taxes;
``(B) the provision of unemployment and workers
compensation insurance;
``(C) maintenance of general liability insurance; and
``(D) occupational health and safety.
``(5) Evaluation, data collection, and report to congress.--
``(A) Evaluation.--The Secretary shall conduct an
evaluation of the provision of home and community-based
attendant services and supports under this subsection in order
to determine the effectiveness of the provision of such
services and supports in allowing the individuals receiving
such services and supports to lead an independent life to the
maximum extent possible; the impact on the physical and
emotional health of the individuals who receive such services;
and an comparative analysis of the costs of services provided
under the State plan amendment under this subsection and those
provided under institutional care in a nursing facility,
institution for mental diseases, or an intermediate care
facility for the mentally retarded.
``(B) Data collection.--The State shall provide the
Secretary with the following information regarding the
provision of home and community-based attendant services and
supports under this subsection for each fiscal year for which
such services and supports are provided:
``(i) The number of individuals who are estimated to
receive home and community-based attendant services and
supports under this subsection during the fiscal year.
``(ii) The number of individuals that received such
services and supports during the preceding fiscal year.
``(iii) The specific number of individuals served by
type of disability, age, gender, education level, and
employment status.
``(iv) Whether the specific individuals have been
previously served under any other home and community based
services program under the State plan or under a waiver.
``(C) Reports.--Not later than--
``(i) December 31, 2013, the Secretary shall submit to
Congress and make available to the public an interim report
on the findings of the evaluation under subparagraph (A);
``(ii) December 31, 2015, the Secretary shall submit to
Congress and make available to the public a final report on
the findings of the evaluation under subparagraph (A).
``(A) Activities of daily living.--The term `activities of
daily living' includes tasks such as eating, toileting,
grooming, dressing, bathing, and transferring.
``(B) Consumer controlled.--The term `consumer controlled'
means a method of selecting and providing services and supports
that allow the individual, or where appropriate, the
individual's representative, maximum control of the home and
community-based attendant services and supports, regardless of
who acts as the employer of record.
``(C) Delivery models.--
``(i) Agency-provider model.--The term `agency-provider
model' means, with respect to the provision of home and
community-based attendant services and supports for an
individual, subject to paragraph (4), a method of providing
consumer controlled services and supports under which
entities contract for the provision of such services and
supports.
``(ii) Other models.--The term `other models' means,
subject to paragraph (4), methods, other than an agency-
provider model, for the provision of consumer controlled
services and supports. Such models may include the
provision of vouchers, direct cash payments, or use of a
fiscal agent to assist in obtaining services.
``(D) Health-related tasks.--The term `health-related
tasks' means specific tasks related to the needs of an
individual, which can be delegated or assigned by licensed
health-care professionals under State law to be performed by an
attendant.
``(E) Individual's representative.--The term `individual's
representative' means a parent, family member, guardian,
advocate, or other authorized representative of an individual
``(F) Instrumental activities of daily living.--The term
`instrumental activities of daily living' includes (but is not
limited to) meal planning and preparation, managing finances,
shopping for food, clothing, and other essential items,
performing essential household chores, communicating by phone
or other media, and traveling around and participating in the
community.''.
(a) Oversight and Assessment of the Administration of Home and
Community-based Services.--The Secretary of Health and Human Services
shall promulgate regulations to ensure that all States develop service
systems that are designed to--
(1) allocate resources for services in a manner that is
responsive to the changing needs and choices of beneficiaries
receiving non-institutionally-based long-term services and supports
(including such services and supports that are provided under
programs other the State Medicaid program), and that provides
strategies for beneficiaries receiving such services to maximize
their independence, including through the use of client-employed
providers;
(2) provide the support and coordination needed for a
beneficiary in need of such services (and their family caregivers
or representative, if applicable) to design an individualized,
self-directed, community-supported life; and
(3) improve coordination among, and the regulation of, all
providers of such services under federally and State-funded
programs in order to--
(A) achieve a more consistent administration of policies
and procedures across programs in relation to the provision of
such services; and
(B) oversee and monitor all service system functions to
assure--
(i) coordination of, and effectiveness of, eligibility
determinations and individual assessments;
(ii) development and service monitoring of a complaint
system, a management system, a system to qualify and
monitor providers, and systems for role-setting and
individual budget determinations; and
(iii) an adequate number of qualified direct care
workers to provide self-directed personal assistance
(b) Additional State Options.--Section 1915(i) of the Social
Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the
following new paragraphs:
``(6) State option to provide home and community-based services
to individuals eligible for services under a waiver.--
``(A) In general.--A State that provides home and
community-based services in accordance with this subsection to
individuals who satisfy the needs-based criteria for the
receipt of such services established under paragraph (1)(A)
may, in addition to continuing to provide such services to such
individuals, elect to provide home and community-based services
in accordance with the requirements of this paragraph to
individuals who are eligible for home and community-based
services under a waiver approved for the State under subsection
(c), (d), or (e) or under section 1115 to provide such
services, but only for those individuals whose income does not
exceed 300 percent of the supplemental security income benefit
rate established by section 1611(b)(1).
``(B) Application of same requirements for individuals
satisfying needs-based criteria.--Subject to subparagraph (C),
a State shall provide home and community-based services to
individuals under this paragraph in the same manner and subject
to the same requirements as apply under the other paragraphs of
this subsection to the provision of home and community-based
services to individuals who satisfy the needs-based criteria
established under paragraph (1)(A).
``(C) Authority to offer different type, amount, duration,
or scope of home and community-based services.--A State may
offer home and community-based services to individuals under
this paragraph that differ in type, amount, duration, or scope
from the home and community-based services offered for
individuals who satisfy the needs-based criteria established
under paragraph (1)(A), so long as such services are within the
scope of services described in paragraph (4)(B) of subsection
(c) for which the Secretary has the authority to approve a
waiver and do not include room or board.
``(7) State option to offer home and community-based services
to specific, targeted populations.--
``(A) In general.--A State may elect in a State plan
amendment under this subsection to target the provision of home
and community-based services under this subsection to specific
populations and to differ the type, amount, duration, or scope
of such services to such specific populations.
``(B) 5-year term.--
``(i) In general.--An election by a State under this
paragraph shall be for a period of 5 years.
``(ii) Phase-in of services and eligibility permitted
during initial 5-year period.--A State making an election
under this paragraph may, during the first 5-year period
for which the election is made, phase-in the enrollment of
eligible individuals, or the provision of services to such
individuals, or both, so long as all eligible individuals
in the State for such services are enrolled, and all such
services are provided, before the end of the initial 5-year
``(C) Renewal.--An election by a State under this paragraph
may be renewed for additional 5-year terms if the Secretary
determines, prior to beginning of each such renewal period,
that the State has--
``(i) adhered to the requirements of this subsection
and paragraph in providing services under such an election;
``(ii) met the State's objectives with respect to
quality improvement and beneficiary outcomes.''.
(c) Removal of Limitation on Scope of Services.--Paragraph (1) of
section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as
amended by subsection (a), is amended by striking ``or such other
services requested by the State as the Secretary may approve''.
(d) Optional Eligibility Category To Provide Full Medicaid Benefits
to Individuals Receiving Home and Community-based Services Under a
State Plan Amendment.--
2304(a)(1), is amended--
(A) in subclause (XX), by striking ``or'' at the end;
(B) in subclause (XXI), by adding ``or'' at the end; and
(C) by inserting after subclause (XXI), the following new
subclause:
``(XXII) who are eligible for home and community-
based services under needs-based criteria established
under paragraph (1)(A) of section 1915(i), or who are
eligible for home and community-based services under
paragraph (6) of such section, and who will receive
home and community-based services pursuant to a State
plan amendment under such subsection;''.
(A) Section 1903(f)(4) of the Social Security Act (42
U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B), is
amended in the matter preceding subparagraph (A), by inserting
``1902(a)(10)(A)(ii)(XXII),'' after
``1902(a)(10)(A)(ii)(XXI),''.
(B) Section 1905(a) of the Social Security Act (42 U.S.C.
1396d(a)), as so amended, is amended in the matter preceding
paragraph (1)--
(i) in clause (xv), by striking ``or'' at the end;
(ii) in clause (xvi), by adding ``or'' at the end; and
(iii) by inserting after clause (xvi) the following new
clause:
``(xvii) individuals who are eligible for home and community-
based services under needs-based criteria established under
paragraph (1)(A) of section 1915(i), or who are eligible for home
and community-based services under paragraph (6) of such section,
and who will receive home and community-based services pursuant to
a State plan amendment under such subsection,''.
(e) Elimination of Option To Limit Number of Eligible Individuals
or Length of Period for Grandfathered Individuals if Eligibility
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42
U.S.C. 1396n(i)) is amended--
(1) by striking subparagraph (C) and inserting the following:
``(C) Projection of number of individuals to be provided
home and community-based services.--The State submits to the
Secretary, in such form and manner, and upon such frequency as
the Secretary shall specify, the projected number of
individuals to be provided home and community-based
services.''; and
(2) in subclause (II) of subparagraph (D)(ii), by striking ``to
be eligible for such services for a period of at least 12 months
beginning on the date the individual first received medical
assistance for such services'' and inserting ``to continue to be
eligible for such services after the effective date of the
modification and until such time as the individual no longer meets
the standard for receipt of such services under such pre-modified
criteria''.
(f) Elimination of Option To Waive Statewideness; Addition of
Option To Waive Comparability.--Paragraph (3) of section 1915(i) of
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1)
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating
to comparability)''.
(g) Effective Date.--The amendments made by subsections (b) through
(f) take effect on the first day of the first fiscal year quarter that
begins after the date of enactment of this Act.
(a) Extension of Demonstration.--
(1) In general.--Section 6071(h) of the Deficit Reduction Act
of 2005 (42 U.S.C. 1396a note) is amended--
(A) in paragraph (1)(E), by striking ``fiscal year 2011''
and inserting ``each of fiscal years 2011 through 2016''; and
(B) in paragraph (2), by striking ``2011'' and inserting
``2016''.
(2) Evaluation.--Paragraphs (2) and (3) of section 6071(g) of
such Act is amended are each amended by striking ``2011'' and
inserting ``2016''.
(b) Reduction of Institutional Residency Period.--
(1) In general.--Section 6071(b)(2) of the Deficit Reduction
Act of 2005 (42 U.S.C. 1396a note) is amended--
(A) in subparagraph (A)(i), by striking ``, for a period of
not less than 6 months or for such longer minimum period, not
to exceed 2 years, as may be specified by the State'' and
inserting ``for a period of not less than 90 consecutive
days''; and
``Any days that an individual resides in an institution on the
basis of having been admitted solely for purposes of receiving
short-term rehabilitative services for a period for which payment
for such services is limited under title XVIII shall not be taken
into account for purposes of determining the 90-day period required
under subparagraph (A)(i).''.
(2) Effective date.--The amendments made by this subsection
take effect 30 days after the date of enactment of this Act.
During the 5-year period that begins on January 1, 2014, section
1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r-5(h)(1)(A))
shall be applied as though ``is eligible for medical assistance for
home and community-based services provided under subsection (c), (d),
or (i) of section 1915, under a waiver approved under section 1115, or
who is eligible for such medical assistance by reason of being
determined eligible under section 1902(a)(10)(C) or by reason of
section 1902(f) or otherwise on the basis of a reduction of income
based on costs incurred for medical or other remedial care, or who is
eligible for medical assistance for home and community-based attendant
services and supports under section 1915(k)'' were substituted in such
section for ``(at the option of the State) is described in section
1902(a)(10)(A)(ii)(VI)''.
Out of any funds in the Treasury not otherwise appropriated, there
is appropriated to the Secretary of Health and Human Services, acting
through the Assistant Secretary for Aging, $10,000,000 for each of
fiscal years 2010 through 2014, to carry out subsections
(a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of
1965 (42 U.S.C. 3012).
(1) Nearly 2 decades have passed since Congress seriously
considered long-term care reform. The United States Bipartisan
Commission on Comprehensive Health Care, also know as the ``Pepper
Commission'', released its ``Call for Action'' blueprint for health
reform in September 1990. In the 20 years since those
recommendations were made, Congress has never acted on the report.
(2) In 1999, under the United States Supreme Court's decision
in Olmstead v. L.C., 527 U.S. 581 (1999), individuals with
disabilities have the right to choose to receive their long-term
services and supports in the community, rather than in an
institutional setting.
(3) Despite the Pepper Commission and Olmstead decision, the
long-term care provided to our Nation's elderly and disabled has
not improved. In fact, for many, it has gotten far worse.
(4) In 2007, 69 percent of Medicaid long-term care spending for
elderly individuals and adults with physical disabilities paid for
institutional services. Only 6 states spent 50 percent or more of
their Medicaid long-term care dollars on home and community-based
services for elderly individuals and adults with physical
disabilities while \1/2\ of the States spent less than 25 percent.
This disparity continues even though, on average, it is estimated
that Medicaid dollars can support nearly 3 elderly individuals and
adults with physical disabilities in home and community-based
services for every individual in a nursing home. Although every
State has chosen to provide certain services under home and
community-based waivers, these services are unevenly available
within and across States, and reach a small percentage of eligible
(1) during the 111th session of Congress, Congress should
address long-term services and supports in a comprehensive way that
guarantees elderly and disabled individuals the care they need; and
(2) long term services and supports should be made available in
the community in addition to in institutions.
(a) Increase in Minimum Rebate Percentage for Single Source Drugs
and Innovator Multiple Source Drugs.--
(1) In general.--Section 1927(c)(1)(B) of the Social Security
Act (42 U.S.C. 1396r-8(c)(1)(B)) is amended--
(A) in clause (i)--
(i) in subclause (IV), by striking ``and'' at the end;
(ii) in subclause (V)--
(I) by inserting ``and before January 1, 2010''
after ``December 31, 1995,''; and
(II) by striking the period at the end and
``(VI) except as provided in clause (iii), after
December 31, 2009, 23.1 percent.''; and
(B) by adding at the end the following new clause:
``(iii) Minimum rebate percentage for certain drugs.--
``(I) In general.--In the case of a single source
drug or an innovator multiple source drug described in
subclause (II), the minimum rebate percentage for
rebate periods specified in clause (i)(VI) is 17.1
``(II) Drug described.--For purposes of subclause
(I), a single source drug or an innovator multiple
source drug described in this subclause is any of the
following drugs:
``(aa) A clotting factor for which a separate
furnishing payment is made under section 1842(o)(5)
and which is included on a list of such factors
specified and updated regularly by the Secretary.
``(bb) A drug approved by the Food and Drug
Administration exclusively for pediatric
indications.''.
(2) Recapture of total savings due to increase.--Section
1927(b)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended by
adding at the end the following new subparagraph:
``(C) Special rule for increased minimum rebate
percentage.--
``(i) In general.--In addition to the amounts applied
as a reduction under subparagraph (B), for rebate periods
beginning on or after January 1, 2010, during a fiscal
year, the Secretary shall reduce payments to a State under
section 1903(a) in the manner specified in clause (ii), in
an amount equal to the product of--
``(I) 100 percent minus the Federal medical
assistance percentage applicable to the rebate period
for the State; and
``(II) the amounts received by the State under such
subparagraph that are attributable (as estimated by the
Secretary based on utilization and other data) to the
increase in the minimum rebate percentage effected by
the amendments made by subsections (a)(1), (b), and (d)
of section 2501 of the Patient Protection and
Affordable Care Act, taking into account the additional
drugs included under the amendments made by subsection
(c) of section 2501 of such Act.
The Secretary shall adjust such payment reduction for a
calendar quarter to the extent the Secretary determines,
based upon subsequent utilization and other data, that the
reduction for such quarter was greater or less than the
amount of payment reduction that should have been made.
``(ii) Manner of payment reduction.--The amount of the
payment reduction under clause (i) for a State for a
quarter shall be deemed an overpayment to the State under
this title to be disallowed against the State's regular
quarterly draw for all Medicaid spending under section
1903(d)(2). Such a disallowance is not subject to a
reconsideration under section 1116(d).''.
(b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of
such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii)--
(A) by inserting ``and before January 1, 2010,'' after
``December 31, 1993,''; and
(B) by striking the period and inserting ``; and''; and
(3) by adding at the end the following new clause:
``(iii) after December 31, 2009, is 13 percent.''.
(c) Extension of Prescription Drug Discounts to Enrollees of
Medicaid Managed Care Organizations.--
(1) In general.--Section 1903(m)(2)(A) of such Act (42 U.S.C.
1396b(m)(2)(A)) is amended--
(A) in clause (xi), by striking ``and'' at the end;
(B) in clause (xii), by striking the period at the end and
``(xiii) such contract provides that (I) covered
outpatient drugs dispensed to individuals eligible for
medical assistance who are enrolled with the entity shall
be subject to the same rebate required by the agreement
entered into under section 1927 as the State is subject to
and that the State shall collect such rebates from
manufacturers, (II) capitation rates paid to the entity
shall be based on actual cost experience related to rebates
and subject to the Federal regulations requiring
actuarially sound rates, and (III) the entity shall report
to the State, on such timely and periodic basis as
specified by the Secretary in order to include in the
information submitted by the State to a manufacturer and
the Secretary under section 1927(b)(2)(A), information on
the total number of units of each dosage form and strength
and package size by National Drug Code of each covered
outpatient drug dispensed to individuals eligible for
medical assistance who are enrolled with the entity and for
which the entity is responsible for coverage of such drug
under this subsection (other than covered outpatient drugs
that under subsection (j)(1) of section 1927 are not
subject to the requirements of that section) and such other
data as the Secretary determines necessary to carry out
this subsection.''.
(2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-8) is
(A) in subsection (b)--
(i) in paragraph (1)(A), in the first sentence, by
inserting ``, including such drugs dispensed to individuals
enrolled with a medicaid managed care organization if the
organization is responsible for coverage of such drugs''
(ii) in paragraph (2)(A), by inserting ``including such
information reported by each medicaid managed care
organization,'' after ``for which payment was made under
the plan during the period,''; and
(B) in subsection (j), by striking paragraph (1) and
inserting the following:
``(1) Covered outpatient drugs are not subject to the
requirements of this section if such drugs are--
``(A) dispensed by health maintenance organizations,
including Medicaid managed care organizations that contract
under section 1903(m); and
``(B) subject to discounts under section 340B of the Public
Health Service Act.''.
(d) Additional Rebate for New Formulations of Existing Drugs.--
(1) In general.--Section 1927(c)(2) of the Social Security Act
(42 U.S.C. 1396r-8(c)(2)) is amended by adding at the end the
``(C) Treatment of new formulations.--
in the case of a drug that is a new formulation, such as an
extended-release formulation, of a single source drug or an
innovator multiple source drug, the rebate obligation with
respect to the drug under this section shall be the amount
computed under this section for the new formulation of the
drug or, if greater, the product of--
``(I) the average manufacturer price for each
dosage form and strength of the new formulation of the
single source drug or innovator multiple source drug;
``(II) the highest additional rebate (calculated as
a percentage of average manufacturer price) under this
section for any strength of the original single source
drug or innovator multiple source drug; and
``(III) the total number of units of each dosage
form and strength of the new formulation paid for under
the State plan in the rebate period (as reported by the
State).
``(ii) No application to new formulations of orphan
drugs.--Clause (i) shall not apply to a new formulation of
a covered outpatient drug that is or has been designated
under section 526 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360bb) for a rare disease or condition,
without regard to whether the period of market exclusivity
for the drug under section 527 of such Act has expired or
the specific indication for use of the drug.''.
(2) Effective date.--The amendment made by paragraph (1) shall
apply to drugs that are paid for by a State after December 31,
(e) Maximum Rebate Amount.--Section 1927(c)(2) of such Act (42
U.S.C. 1396r-8(c)(2)), as amended by subsection (d), is amended by
``(D) Maximum rebate amount.--In no case shall the sum of
the amounts applied under paragraph (1)(A)(ii) and this
paragraph with respect to each dosage form and strength of a
single source drug or an innovator multiple source drug for a
rebate period beginning after December 31, 2009, exceed 100
percent of the average manufacturer price of the drug.''.
(f) Conforming Amendments.--
(1) In general.--Section 340B of the Public Health Service Act
(42 U.S.C. 256b) is amended--
(A) in subsection (a)(2)(B)(i), by striking ``1927(c)(4)''
and inserting ``1927(c)(3)''; and
(B) by striking subsection (c); and
(C) redesignating subsection (d) as subsection (c).
(a) In General.--Section 1927(d) of the Social Security Act (42
U.S.C. 1397r-8(d)) is amended--
(A) by striking subparagraphs (E), (I), and (J),
respectively; and
(B) by redesignating subparagraphs (F), (G), (H), and (K)
as subparagraphs (E), (F), (G), and (H), respectively; and
(2) by adding at the end the following new paragraph:
``(7) Non-excludable drugs.--The following drugs or classes of
drugs, or their medical uses, shall not be excluded from coverage:
``(A) Agents when used to promote smoking cessation,
including agents approved by the Food and Drug Administration
under the over-the-counter monograph process for purposes of
promoting, and when used to promote, tobacco cessation.
``(B) Barbiturates.
``(C) Benzodiazepines.''.
(b) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2014.
(a) Pharmacy Reimbursement Limits.--
(1) In general.--Section 1927(e) of the Social Security Act (42
U.S.C. 1396r-8(e)) is amended--
(A) in paragraph (4), by striking ``(or, effective January
1, 2007, two or more)''; and
(B) by striking paragraph (5) and inserting the following:
``(5) Use of amp in upper payment limits.--The Secretary shall
calculate the Federal upper reimbursement limit established under
paragraph (4) as no less than 175 percent of the weighted average
(determined on the basis of utilization) of the most recently
reported monthly average manufacturer prices for pharmaceutically
and therapeutically equivalent multiple source drug products that
are available for purchase by retail community pharmacies on a
nationwide basis. The Secretary shall implement a smoothing process
for average manufacturer prices. Such process shall be similar to
the smoothing process used in determining the average sales price
of a drug or biological under section 1847A.''.
(2) Definition of amp.--Section 1927(k)(1) of such Act (42
U.S.C. 1396r-8(k)(1)) is amended--
(A) in subparagraph (A), by striking ``by'' and all that
follows through the period and inserting ``by--
``(i) wholesalers for drugs distributed to retail
community pharmacies; and
``(ii) retail community pharmacies that purchase drugs
directly from the manufacturer.''; and
(B) by striking subparagraph (B) and inserting the
``(B) Exclusion of customary prompt pay discounts and other
``(i) In general.--The average manufacturer price for a
covered outpatient drug shall exclude--
``(I) customary prompt pay discounts extended to
wholesalers;
``(II) bona fide service fees paid by manufacturers
to wholesalers or retail community pharmacies,
including (but not limited to) distribution service
fees, inventory management fees, product stocking
allowances, and fees associated with administrative
services agreements and patient care programs (such as
medication compliance programs and patient education
programs);
``(III) reimbursement by manufacturers for
recalled, damaged, expired, or otherwise unsalable
returned goods, including (but not limited to)
reimbursement for the cost of the goods and any
reimbursement of costs associated with return goods
handling and processing, reverse logistics, and drug
destruction; and
``(IV) payments received from, and rebates or
discounts provided to, pharmacy benefit managers,
managed care organizations, health maintenance
organizations, insurers, hospitals, clinics, mail order
pharmacies, long term care providers, manufacturers, or
any other entity that does not conduct business as a
wholesaler or a retail community pharmacy.
``(ii) Inclusion of other discounts and payments.--
Notwithstanding clause (i), any other discounts, rebates,
payments, or other financial transactions that are received
by, paid by, or passed through to, retail community
pharmacies shall be included in the average manufacturer
price for a covered outpatient drug.''; and
(C) in subparagraph (C), by striking ``the retail pharmacy
class of trade'' and inserting ``retail community pharmacies''.
(3) Definition of multiple source drug.--Section 1927(k)(7) of
such Act (42 U.S.C. 1396r-8(k)(7)) is amended--
(A) in subparagraph (A)(i)(III), by striking ``the State''
and inserting ``the United States''; and
(B) in subparagraph (C)--
(i) in clause (i), by inserting ``and'' after the
(ii) in clause (ii), by striking ``; and'' and
inserting a period; and
(iii) by striking clause (iii).
(4) Definitions of retail community pharmacy; wholesaler.--
Section 1927(k) of such Act (42 U.S.C. 1396r-8(k)) is amended by
adding at the end the following new paragraphs:
``(10) Retail community pharmacy.--The term `retail community
pharmacy' means an independent pharmacy, a chain pharmacy, a
supermarket pharmacy, or a mass merchandiser pharmacy that is
licensed as a pharmacy by the State and that dispenses medications
to the general public at retail prices. Such term does not include
a pharmacy that dispenses prescription medications to patients
primarily through the mail, nursing home pharmacies, long-term care
facility pharmacies, hospital pharmacies, clinics, charitable or
not-for-profit pharmacies, government pharmacies, or pharmacy
benefit managers.
``(11) Wholesaler.--The term `wholesaler' means a drug
wholesaler that is engaged in wholesale distribution of
prescription drugs to retail community pharmacies, including (but
not limited to) manufacturers, repackers, distributors, own-label
distributors, private-label distributors, jobbers, brokers,
warehouses (including manufacturer's and distributor's warehouses,
chain drug warehouses, and wholesale drug warehouses) independent
wholesale drug traders, and retail community pharmacies that
conduct wholesale distributions.''.
(b) Disclosure of Price Information to the Public.--Section
1927(b)(3) of such Act (42 U.S.C. 1396r-8(b)(3)) is amended--
(1) in subparagraph (A)--
(A) in the first sentence, by inserting after clause (iii)
``(iv) not later than 30 days after the last day of
each month of a rebate period under the agreement, on the
manufacturer's total number of units that are used to
calculate the monthly average manufacturer price for each
covered outpatient drug;''; and
(B) in the second sentence, by inserting ``(relating to the
weighted average of the most recently reported monthly average
manufacturer prices)'' after ``(D)(v)''; and
(2) in subparagraph (D)(v), by striking ``average manufacturer
prices'' and inserting ``the weighted average of the most recently
reported monthly average manufacturer prices and the average retail
survey price determined for each multiple source drug in accordance
with subsection (f)''.
(c) Clarification of Application of Survey of Retail Prices.--
Section 1927(f)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended--
(1) in subparagraph (A)(i), by inserting ``with respect to a
retail community pharmacy,'' before ``the determination''; and
(2) in subparagraph (C)(ii), by striking ``retail pharmacies''
and inserting ``retail community pharmacies''.
(d) Effective Date.--The amendments made by this section shall take
effect on the first day of the first calendar year quarter that begins
at least 180 days after the date of enactment of this Act, without
regard to whether or not final regulations to carry out such amendments
have been promulgated by such date.
(a) In General.--Section 1923(f) of the Social Security Act (42
U.S.C. 1396r-4(f)) is amended--
(1) in paragraph (1), by striking ``and (3)'' and inserting ``,
(3), and (7)'';
(2) in paragraph (3)(A), by striking ``paragraph (6)'' and
inserting ``paragraphs (6) and (7)'';
(3) by redesignating paragraph (7) as paragraph (8); and
(4) by inserting after paragraph (6) the following new
``(7) Reduction of state dsh allotments once reduction in
uninsured threshold reached.--
``(A) In general.--Subject to subparagraph (E), the DSH
allotment for a State for fiscal years beginning with the
fiscal year described in subparagraph (C) (with respect to the
State), is equal to--
``(i) in the case of the first fiscal year described in
subparagraph (C) with respect to a State, the DSH allotment
that would be determined under this subsection for the
State for the fiscal year without application of this
paragraph (but after the application of subparagraph (D)),
reduced by the applicable percentage determined for the
State for the fiscal year under subparagraph (B)(i); and
``(ii) in the case of any subsequent fiscal year with
respect to the State, the DSH allotment determined under
this paragraph for the State for the preceding fiscal year,
State for the fiscal year under subparagraph (B)(ii).
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage for a State for a fiscal year is
``(i) Uninsured reduction threshold fiscal year.--In
the case of the first fiscal year described in subparagraph
(C) with respect to the State--
``(I) if the State is a low DSH State described in
paragraph (5)(B), the applicable percentage is equal to
25 percent; and
``(II) if the State is any other State, the
applicable percentage is 50 percent.
``(ii) Subsequent fiscal years in which the percentage
of uninsured decreases.--In the case of any fiscal year
after the first fiscal year described in subparagraph (C)
with respect to a State, if the Secretary determines on the
basis of the most recent American Community Survey of the
Bureau of the Census, that the percentage of uncovered
individuals residing in the State is less than the
percentage of such individuals determined for the State for
the preceding fiscal year--
the product of the percentage reduction in uncovered
individuals for the fiscal year from the preceding
fiscal year and 25 percent; and
applicable percentage is equal to the product of the
percentage reduction in uncovered individuals for the
fiscal year from the preceding fiscal year and 50
``(C) Fiscal year described.--For purposes of subparagraph
(A), the fiscal year described in this subparagraph with
respect to a State is the first fiscal year that occurs after
fiscal year 2012 for which the Secretary determines, on the
individuals residing in the State is at least 45 percent less
than the percentage of such individuals determined for the
State for fiscal year 2009.
``(D) Exclusion of portions diverted for coverage
expansions.--For purposes of applying the applicable percentage
reduction under subparagraph (A) to the DSH allotment for a
State for a fiscal year, the DSH allotment for a State that
would be determined under this subsection for the State for the
fiscal year without the application of this paragraph (and
prior to any such reduction) shall not include any portion of
the allotment for which the Secretary has approved the State's
diversion to the costs of providing medical assistance or other
health benefits coverage under a waiver that is in effect on
July 2009.
``(E) Minimum allotment.--In no event shall the DSH
allotment determined for a State in accordance with this
paragraph for fiscal year 2013 or any succeeding fiscal year be
less than the amount equal to 35 percent of the DSH allotment
determined for the State for fiscal year 2012 under this
subsection (and after the application of this paragraph, if
applicable), increased by the percentage change in the consumer
price index for all urban consumers (all items, U.S. city
average) for each previous fiscal year occurring before the
``(F) Uncovered individuals.--In this paragraph, the term
`uncovered individuals' means individuals with no health
insurance coverage at any time during a year (as determined by
the Secretary based on the most recent data available).''.
(b) Effective Date.--The amendments made by subsection (a) take
effect on October 1, 2011.
(a) In General.--Section 1915(h) of the Social Security Act (42
U.S.C. 1396n(h)) is amended--
(1) by inserting ``(1)'' after ``(h)'';
(2) by inserting ``, or a waiver described in paragraph (2)''
after ``(e)''; and
``(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any waiver
under subsection (b), (c), or (d), or a waiver under section 1115, that
provides medical assistance for dual eligible individuals (including
any such waivers under which non dual eligible individuals may be
enrolled in addition to dual eligible individuals) may be conducted for
a period of 5 years and, upon the request of the State, may be extended
for additional 5-year periods unless the Secretary determines that for
the previous waiver period the conditions for the waiver have not been
met or it would no longer be cost-effective and efficient, or
consistent with the purposes of this title, to extend the waiver.
``(B) In this paragraph, the term `dual eligible individual' means
an individual who is entitled to, or enrolled for, benefits under part
A of title XVIII, or enrolled for benefits under part B of title XVIII,
and is eligible for medical assistance under the State plan under this
title or under a waiver of such plan.''.
(b) Conforming Amendments.--
(1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
(A) in subsection (b), by adding at the end the following
new sentence: ``Subsection (h)(2) shall apply to a waiver under
this subsection.'';
(B) in subsection (c)(3), in the second sentence, by
inserting ``(other than a waiver described in subsection
(h)(2))'' after ``A waiver under this subsection'';
(C) in subsection (d)(3), in the second sentence, by
(h)(2))'' after ``A waiver under this subsection''.
(2) Section 1115 of such Act (42 U.S.C. 1315) is amended--
(A) in subsection (e)(2), by inserting ``(5 years, in the
case of a waiver described in section 1915(h)(2))'' after ``3
years''; and
(B) in subsection (f)(6), by inserting ``(5 years, in the
years''.
(a) Establishment of Federal Coordinated Health Care Office.--
(1) In general.--Not later than March 1, 2010, the Secretary of
Health and Human Services (in this section referred to as the
``Secretary'') shall establish a Federal Coordinated Health Care
(2) Establishment and reporting to cms administrator.--The
Federal Coordinated Health Care Office--
(A) shall be established within the Centers for Medicare &
Medicaid Services; and
(B) have as the Office a Director who shall be appointed
by, and be in direct line of authority to, the Administrator of
the Centers for Medicare & Medicaid Services.
(b) Purpose.--The purpose of the Federal Coordinated Health Care
Office is to bring together officers and employees of the Medicare and
Medicaid programs at the Centers for Medicare & Medicaid Services in
order to--
(1) more effectively integrate benefits under the Medicare
program under title XVIII of the Social Security Act and the
Medicaid program under title XIX of such Act; and
(2) improve the coordination between the Federal Government and
States for individuals eligible for benefits under both such
programs in order to ensure that such individuals get full access
to the items and services to which they are entitled under titles
XVIII and XIX of the Social Security Act.
(c) Goals.--The goals of the Federal Coordinated Health Care Office
are as follows:
(1) Providing dual eligible individuals full access to the
benefits to which such individuals are entitled under the Medicare
and Medicaid programs.
(2) Simplifying the processes for dual eligible individuals to
access the items and services they are entitled to under the
Medicare and Medicaid programs.
(3) Improving the quality of health care and long-term services
for dual eligible individuals.
(4) Increasing dual eligible individuals' understanding of and
satisfaction with coverage under the Medicare and Medicaid
(5) Eliminating regulatory conflicts between rules under the
(6) Improving care continuity and ensuring safe and effective
care transitions for dual eligible individuals.
(7) Eliminating cost-shifting between the Medicare and Medicaid
program and among related health care providers.
(8) Improving the quality of performance of providers of
services and suppliers under the Medicare and Medicaid programs.
(d) Specific Responsibilities.--The specific responsibilities of
the Federal Coordinated Health Care Office are as follows:
(1) Providing States, specialized MA plans for special needs
individuals (as defined in section 1859(b)(6) of the Social
Security Act (42 U.S.C. 1395w-28(b)(6))), physicians and other
relevant entities or individuals with the education and tools
necessary for developing programs that align benefits under the
Medicare and Medicaid programs for dual eligible individuals.
(2) Supporting State efforts to coordinate and align acute care
and long-term care services for dual eligible individuals with
other items and services furnished under the Medicare program.
(3) Providing support for coordination of contracting and
oversight by States and the Centers for Medicare & Medicaid
Services with respect to the integration of the Medicare and
Medicaid programs in a manner that is supportive of the goals
described in paragraph (3).
(4) To consult and coordinate with the Medicare Payment
Advisory Commission established under section 1805 of the Social
Security Act (42 U.S.C. 1395b-6) and the Medicaid and CHIP Payment
and Access Commission established under section 1900 of such Act
(42 U.S.C. 1396) with respect to policies relating to the
enrollment in, and provision of, benefits to dual eligible
individuals under the Medicare program under title XVIII of the
Social Security Act and the Medicaid program under title XIX of
(5) To study the provision of drug coverage for new full-
benefit dual eligible individuals (as defined in section 1935(c)(6)
of the Social Security Act (42 U.S.C. 1396u-5(c)(6)), as well as to
monitor and report annual total expenditures, health outcomes, and
access to benefits for all dual eligible individuals.
(e) Report.--The Secretary shall, as part of the budget transmitted
under section 1105(a) of title 31, United States Code, submit to
Congress an annual report containing recommendations for legislation
that would improve care coordination and benefits for dual eligible
(f) Dual Eligible Defined.--In this section, the term ``dual
eligible individual'' means an individual who is entitled to, or
enrolled for, benefits under part A of title XVIII of the Social
Security Act, or enrolled for benefits under part B of title XVIII of
such Act, and is eligible for medical assistance under a State plan
under title XIX of such Act or under a waiver of such plan.
Subtitle I--Improving the Quality of Medicaid for Patients and
Title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as
amended by section 401 of the Children's Health Insurance Program
Reauthorization Act of 2009 (Public Law 111-3), is amended by inserting
after section 1139A the following new section:
``SEC. 1139B. ADULT HEALTH QUALITY MEASURES.
``(a) Development of Core Set of Health Care Quality Measures for
Adults Eligible for Benefits Under Medicaid.--The Secretary shall
identify and publish a recommended core set of adult health quality
measures for Medicaid eligible adults in the same manner as the
Secretary identifies and publishes a core set of child health quality
measures under section 1139A, including with respect to identifying and
publishing existing adult health quality measures that are in use under
public and privately sponsored health care coverage arrangements, or
that are part of reporting systems that measure both the presence and
duration of health insurance coverage over time, that may be applicable
to Medicaid eligible adults.
``(b) Deadlines.--
``(1) Recommended measures.--Not later than January 1, 2011,
the Secretary shall identify and publish for comment a recommended
core set of adult health quality measures for Medicaid eligible
``(2) Dissemination.--Not later than January 1, 2012, the
Secretary shall publish an initial core set of adult health quality
measures that are applicable to Medicaid eligible adults.
``(3) Standardized reporting.--Not later than January 1, 2013,
the Secretary, in consultation with States, shall develop a
standardized format for reporting information based on the initial
core set of adult health quality measures and create procedures to
encourage States to use such measures to voluntarily report
information regarding the quality of health care for Medicaid
eligible adults.
``(4) Reports to congress.--Not later than January 1, 2014, and
every 3 years thereafter, the Secretary shall include in the report
to Congress required under section 1139A(a)(6) information similar
to the information required under that section with respect to the
measures established under this section.
``(5) Establishment of medicaid quality measurement program.--
``(A) In general.--Not later than 12 months after the
release of the recommended core set of adult health quality
measures under paragraph (1)), the Secretary shall establish a
Medicaid Quality Measurement Program in the same manner as the
Secretary establishes the pediatric quality measures program
under section 1139A(b). The aggregate amount awarded by the
Secretary for grants and contracts for the development,
testing, and validation of emerging and innovative evidence-
based measures under such program shall equal the aggregate
amount awarded by the Secretary for grants under section
1139A(b)(4)(A)
``(B) Revising, strengthening, and improving initial core
measures.--Beginning not later than 24 months after the
establishment of the Medicaid Quality Measurement Program, and
annually thereafter, the Secretary shall publish recommended
changes to the initial core set of adult health quality
measures that shall reflect the results of the testing,
validation, and consensus process for the development of adult
health quality measures.
``(c) Construction.--Nothing in this section shall be construed as
supporting the restriction of coverage, under title XIX or XXI or
otherwise, to only those services that are evidence-based, or in anyway
limiting available services.
``(d) Annual State Reports Regarding State-Specific Quality of Care
Measures Applied Under Medicaid.--
``(1) Annual state reports.--Each State with a State plan or
waiver approved under title XIX shall annually report (separately
or as part of the annual report required under section 1139A(c)),
to the Secretary on the--
``(A) State-specific adult health quality measures applied
by the State under the such plan, including measures described
in subsection (a)(5); and
``(B) State-specific information on the quality of health
care furnished to Medicaid eligible adults under such plan,
including information collected through external quality
reviews of managed care organizations under section 1932 and
benchmark plans under section 1937.
``(2) Publication.--Not later than September 30, 2014, and
annually thereafter, the Secretary shall collect, analyze, and make
publicly available the information reported by States under
``(e) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated for each of fiscal years
2010 through 2014, $60,000,000 for the purpose of carrying out this
section. Funds appropriated under this subsection shall remain
available until expended.''.
(a) In General.--The Secretary of Health and Human Services (in
this subsection referred to as the ``Secretary'') shall identify
current State practices that prohibit payment for health care-acquired
conditions and shall incorporate the practices identified, or elements
of such practices, which the Secretary determines appropriate for
application to the Medicaid program in regulations. Such regulations
shall be effective as of July 1, 2011, and shall prohibit payments to
States under section 1903 of the Social Security Act for any amounts
expended for providing medical assistance for health care-acquired
conditions specified in the regulations. The regulations shall ensure
that the prohibition on payment for health care-acquired conditions
shall not result in a loss of access to care or services for Medicaid
(b) Health Care-Acquired Condition.--In this section. the term
``health care-acquired condition'' means a medical condition for which
an individual was diagnosed that could be identified by a secondary
diagnostic code described in section 1886(d)(4)(D)(iv) of the Social
Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)).
(c) Medicare Provisions.--In carrying out this section, the
Secretary shall apply to State plans (or waivers) under title XIX of
the Social Security Act the regulations promulgated pursuant to section
1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relating to the
prohibition of payments based on the presence of a secondary diagnosis
code specified by the Secretary in such regulations, as appropriate for
the Medicaid program. The Secretary may exclude certain conditions
identified under title XVIII of the Social Security Act for non-payment
under title XIX of such Act when the Secretary finds the inclusion of
such conditions to be inapplicable to beneficiaries under title XIX.
(a) State Plan Amendment.--Title XIX of the Social Security Act (42
U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended
by adding at the end the following new section:
``Sec. 1945. State Option To Provide Coordinated Care Through a
Health Home for Individuals With Chronic Conditions.--
``(a) In General.--Notwithstanding section 1902(a)(1) (relating to
statewideness), section 1902(a)(10)(B) (relating to comparability), and
any other provision of this title for which the Secretary determines it
is necessary to waive in order to implement this section, beginning
January 1, 2011, a State, at its option as a State plan amendment, may
provide for medical assistance under this title to eligible individuals
with chronic conditions who select a designated provider (as described
under subsection (h)(5)), a team of health care professionals (as
described under subsection (h)(6)) operating with such a provider, or a
health team (as described under subsection (h)(7)) as the individual's
health home for purposes of providing the individual with health home
``(b) Health Home Qualification Standards.--The Secretary shall
establish standards for qualification as a designated provider for the
purpose of being eligible to be a health home for purposes of this
``(c) Payments.--
``(1) In general.--A State shall provide a designated provider,
a team of health care professionals operating with such a provider,
or a health team with payments for the provision of health home
services to each eligible individual with chronic conditions that
selects such provider, team of health care professionals, or health
team as the individual's health home. Payments made to a designated
provider, a team of health care professionals operating with such a
provider, or a health team for such services shall be treated as
medical assistance for purposes of section 1903(a), except that,
during the first 8 fiscal year quarters that the State plan
amendment is in effect, the Federal medical assistance percentage
applicable to such payments shall be equal to 90 percent.
``(2) Methodology.--
``(A) In general.--The State shall specify in the State
plan amendment the methodology the State will use for
determining payment for the provision of health home services.
Such methodology for determining payment--
``(i) may be tiered to reflect, with respect to each
eligible individual with chronic conditions provided such
services by a designated provider, a team of health care
professionals operating with such a provider, or a health
team, as well as the severity or number of each such
individual's chronic conditions or the specific
capabilities of the provider, team of health care
professionals, or health team; and
``(ii) shall be established consistent with section
1902(a)(30)(A).
``(B) Alternate models of payment.--The methodology for
determining payment for provision of health home services under
this section shall not be limited to a per-member per-month
basis and may provide (as proposed by the State and subject to
approval by the Secretary) for alternate models of payment.
``(3) Planning grants.--
``(A) In general.--Beginning January 1, 2011, the Secretary
may award planning grants to States for purposes of developing
a State plan amendment under this section. A planning grant
awarded to a State under this paragraph shall remain available
until expended.
``(B) State contribution.--A State awarded a planning grant
shall contribute an amount equal to the State percentage
determined under section 1905(b) (without regard to section
5001 of Public Law 111-5) for each fiscal year for which the
grant is awarded.
``(C) Limitation.--The total amount of payments made to
States under this paragraph shall not exceed $25,000,000.
``(d) Hospital Referrals.--A State shall include in the State plan
amendment a requirement for hospitals that are participating providers
under the State plan or a waiver of such plan to establish procedures
for referring any eligible individuals with chronic conditions who seek
or need treatment in a hospital emergency department to designated
``(e) Coordination.--A State shall consult and coordinate, as
appropriate, with the Substance Abuse and Mental Health Services
Administration in addressing issues regarding the prevention and
treatment of mental illness and substance abuse among eligible
individuals with chronic conditions.
``(f) Monitoring.--A State shall include in the State plan
amendment--
``(1) a methodology for tracking avoidable hospital
readmissions and calculating savings that result from improved
chronic care coordination and management under this section; and
``(2) a proposal for use of health information technology in
providing health home services under this section and improving
service delivery and coordination across the care continuum
(including the use of wireless patient technology to improve
coordination and management of care and patient adherence to
recommendations made by their provider).
``(g) Report on Quality Measures.--As a condition for receiving
payment for health home services provided to an eligible individual
with chronic conditions, a designated provider shall report to the
State, in accordance with such requirements as the Secretary shall
specify, on all applicable measures for determining the quality of such
services. When appropriate and feasible, a designated provider shall
use health information technology in providing the State with such
``(h) Definitions.--In this section:
``(1) Eligible individual with chronic conditions.--
`eligible individual with chronic conditions' means an
individual who--
``(i) is eligible for medical assistance under the
State plan or under a waiver of such plan; and
``(ii) has at least--
``(I) 2 chronic conditions;
``(II) 1 chronic condition and is at risk of having
a second chronic condition; or
``(III) 1 serious and persistent mental health
condition.
shall prevent the Secretary from establishing higher levels as
to the number or severity of chronic or mental health
conditions for purposes of determining eligibility for receipt
of health home services under this section.
``(2) Chronic condition.--The term `chronic condition' has the
meaning given that term by the Secretary and shall include, but is
not limited to, the following:
``(A) A mental health condition.
``(B) Substance use disorder.
``(C) Asthma.
``(D) Diabetes.
``(E) Heart disease.
``(F) Being overweight, as evidenced by having a Body Mass
Index (BMI) over 25.
``(3) Health home.--The term `health home' means a designated
provider (including a provider that operates in coordination with a
team of health care professionals) or a health team selected by an
eligible individual with chronic conditions to provide health home
``(4) Health home services.--
``(A) In general.--The term `health home services' means
comprehensive and timely high-quality services described in
subparagraph (B) that are provided by a designated provider, a
team of health care professionals operating with such a
provider, or a health team.
``(B) Services described.--The services described in this
subparagraph are--
``(i) comprehensive care management;
``(ii) care coordination and health promotion;
``(iii) comprehensive transitional care, including
appropriate follow-up, from inpatient to other settings;
``(iv) patient and family support (including authorized
representatives);
``(v) referral to community and social support
services, if relevant; and
``(vi) use of health information technology to link
services, as feasible and appropriate.
``(5) Designated provider.--The term `designated provider'
means a physician, clinical practice or clinical group practice,
rural clinic, community health center, community mental health
center, home health agency, or any other entity or provider
(including pediatricians, gynecologists, and obstetricians) that is
determined by the State and approved by the Secretary to be
qualified to be a health home for eligible individuals with chronic
conditions on the basis of documentation evidencing that the
physician, practice, or clinic--
``(A) has the systems and infrastructure in place to
provide health home services; and
``(B) satisfies the qualification standards established by
the Secretary under subsection (b).
``(6) Team of health care professionals.--The term `team of
health care professionals' means a team of health professionals (as
described in the State plan amendment) that may--
``(A) include physicians and other professionals, such as a
nurse care coordinator, nutritionist, social worker, behavioral
health professional, or any professionals deemed appropriate by
the State; and
``(B) be free standing, virtual, or based at a hospital,
community health center, community mental health center, rural
clinic, clinical practice or clinical group practice, academic
health center, or any entity deemed appropriate by the State
and approved by the Secretary.
``(7) Health team.--The term `health team' has the meaning
given such term for purposes of section 3502 of the Patient
(b) Evaluation.--
(1) Independent evaluation.--
(A) In general.--The Secretary shall enter into a contract
with an independent entity or organization to conduct an
evaluation and assessment of the States that have elected the
option to provide coordinated care through a health home for
Medicaid beneficiaries with chronic conditions under section
1945 of the Social Security Act (as added by subsection (a))
for the purpose of determining the effect of such option on
reducing hospital admissions, emergency room visits, and
admissions to skilled nursing facilities.
(B) Evaluation report.--Not later than January 1, 2017, the
Secretary shall report to Congress on the evaluation and
assessment conducted under subparagraph (A).
(2) Survey and interim report.--
(A) In general.--Not later than January 1, 2014, the
Secretary of Health and Human Services shall survey States that
have elected the option under section 1945 of the Social
Security Act (as added by subsection (a)) and report to
Congress on the nature, extent, and use of such option,
particularly as it pertains to--
(i) hospital admission rates;
(ii) chronic disease management;
(iii) coordination of care for individuals with chronic
(iv) assessment of program implementation;
(v) processes and lessons learned (as described in
subparagraph (B));
(vi) assessment of quality improvements and clinical
outcomes under such option; and
(vii) estimates of cost savings.
(B)  Implementation reporting.--A State that has elected
the option under section 1945 of the Social Security Act (as
added by subsection (a)) shall report to the Secretary, as
necessary, on processes that have been developed and lessons
learned regarding provision of coordinated care through a
health home for Medicaid beneficiaries with chronic conditions
under such option.
(a) Authority To Conduct Project.--
(1) In general.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish a
demonstration project under title XIX of the Social Security Act to
evaluate the use of bundled payments for the provision of
integrated care for a Medicaid beneficiary--
(A) with respect to an episode of care that includes a
hospitalization; and
(B) for concurrent physicians services provided during a
(2) Duration.--The demonstration project shall begin on January
1, 2012, and shall end on December 31, 2016.
(b) Requirements.--The demonstration project shall be conducted in
accordance with the following:
(1) The demonstration project shall be conducted in up to 8
States, determined by the Secretary based on consideration of the
potential to lower costs under the Medicaid program while improving
care for Medicaid beneficiaries. A State selected to participate in
the demonstration project may target the demonstration project to
particular categories of beneficiaries, beneficiaries with
particular diagnoses, or particular geographic regions of the
State, but the Secretary shall insure that, as a whole, the
demonstration project is, to the greatest extent possible,
representative of the demographic and geographic composition of
Medicaid beneficiaries nationally.
(2) The demonstration project shall focus on conditions where
there is evidence of an opportunity for providers of services and
suppliers to improve the quality of care furnished to Medicaid
beneficiaries while reducing total expenditures under the State
Medicaid programs selected to participate, as determined by the
(3) A State selected to participate in the demonstration
project shall specify the 1 or more episodes of care the State
proposes to address in the project, the services to be included in
the bundled payments, and the rationale for the selection of such
episodes of care and services. The Secretary may modify the
episodes of care as well as the services to be included in the
bundled payments prior to or after approving the project. The
Secretary may also vary such factors among the different States
participating in the demonstration project.
(4) The Secretary shall ensure that payments made under the
demonstration project are adjusted for severity of illness and
other characteristics of Medicaid beneficiaries within a category
or having a diagnosis targeted as part of the demonstration
project. States shall ensure that Medicaid beneficiaries are not
liable for any additional cost sharing than if their care had not
been subject to payment under the demonstration project.
(5) Hospitals participating in the demonstration project shall
have or establish robust discharge planning programs to ensure that
Medicaid beneficiaries requiring post-acute care are appropriately
placed in, or have ready access to, post-acute care settings.
(6) The Secretary and each State selected to participate in the
demonstration project shall ensure that the demonstration project
does not result in the Medicaid beneficiaries whose care is subject
to payment under the demonstration project being provided with less
items and services for which medical assistance is provided under
the State Medicaid program than the items and services for which
medical assistance would have been provided to such beneficiaries
under the State Medicaid program in the absence of the
demonstration project.
(c) Waiver of Provisions.--Notwithstanding section 1115(a) of the
Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such
provisions of titles XIX, XVIII, and XI of that Act as may be necessary
to accomplish the goals of the demonstration, ensure beneficiary access
to acute and post-acute care, and maintain quality of care.
(d) Evaluation and Report.--
(1) Data.--Each State selected to participate in the
demonstration project under this section shall provide to the
Secretary, in such form and manner as the Secretary shall specify,
relevant data necessary to monitor outcomes, costs, and quality,
and evaluate the rationales for selection of the episodes of care
and services specified by States under subsection (b)(3).
(2) Report.--Not later than 1 year after the conclusion of the
demonstration project, the Secretary shall submit a report to
Congress on the results of the demonstration project.
(a) In General.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall, in
coordination with the Center for Medicare and Medicaid Innovation (as
established under section 1115A of the Social Security Act, as added by
section 3021 of this Act), establish the Medicaid Global Payment System
Demonstration Project under which a participating State shall adjust
the payments made to an eligible safety net hospital system or network
from a fee-for-service payment structure to a global capitated payment
(b) Duration and Scope.--The demonstration project conducted under
this section shall operate during a period of fiscal years 2010 through
2012. The Secretary shall select not more than 5 States to participate
in the demonstration project.
(c) Eligible Safety Net Hospital System or Network.--For purposes
of this section, the term ``eligible safety net hospital system or
network'' means a large, safety net hospital system or network (as
defined by the Secretary) that operates within a State selected by the
Secretary under subsection (b).
(d) Evaluation.--
(1) Testing.--The Innovation Center shall test and evaluate the
demonstration project conducted under this section to examine any
changes in health care quality outcomes and spending by the
eligible safety net hospital systems or networks.
(2) Budget neutrality.--During the testing period under
paragraph (1), any budget neutrality requirements under section
1115A(b)(3) of the Social Security Act (as so added) shall not be
(3) Modification.--During the testing period under paragraph
(1), the Secretary may, in the Secretary's discretion, modify or
terminate the demonstration project conducted under this section.
(e) Report.--Not later than 12 months after the date of completion
of the demonstration project under this section, the Secretary shall
submit to Congress a report containing the results of the evaluation
and testing conducted under subsection (d), together with
recommendations for such legislation and administrative action as the
Secretary determines appropriate.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
(a) Authority To Conduct Demonstration.--
(referred to in this section as the ``Secretary'') shall establish
the Pediatric Accountable Care Organization Demonstration Project
to authorize a participating State to allow pediatric medical
providers that meet specified requirements to be recognized as an
accountable care organization for purposes of receiving incentive
payments (as described under subsection (d)), in the same manner as
an accountable care organization is recognized and provided with
incentive payments under section 1899 of the Social Security Act
(as added by section 3022).
(b) Application.--A State that desires to participate in the
demonstration project under this section shall submit to the Secretary
an application at such time, in such manner, and containing such
information as the Secretary may require.
(c) Requirements.--
(1) Performance guidelines.--The Secretary, in consultation
with the States and pediatric providers, shall establish guidelines
to ensure that the quality of care delivered to individuals by a
provider recognized as an accountable care organization under this
section is not less than the quality of care that would have
otherwise been provided to such individuals.
(2) Savings requirement.--A participating State, in
consultation with the Secretary, shall establish an annual minimal
level of savings in expenditures for items and services covered
under the Medicaid program under title XIX of the Social Security
Act and the CHIP program under title XXI of such Act that must be
reached by an accountable care organization in order for such
organization to receive an incentive payment under subsection (d).
(3) Minimum participation period.--A provider desiring to be
recognized as an accountable care organization under the
demonstration project shall enter into an agreement with the State
to participate in the project for not less than a 3-year period.
(d) Incentive Payment.--An accountable care organization that meets
the performance guidelines established by the Secretary under
subsection (c)(1) and achieves savings greater than the annual minimal
savings level established by the State under subsection (c)(2) shall
receive an incentive payment for such year equal to a portion (as
determined appropriate by the Secretary) of the amount of such excess
savings. The Secretary may establish an annual cap on incentive
payments for an accountable care organization.
(e) Authorization of Appropriations.--There are authorized to be
(a) Authority To Conduct Demonstration Project.--The Secretary of
``Secretary'') shall establish a demonstration project under which an
eligible State (as described in subsection (c)) shall provide payment
under the State Medicaid plan under title XIX of the Social Security
Act to an institution for mental diseases that is not publicly owned or
operated and that is subject to the requirements of section 1867 of the
Social Security Act (42 U.S.C. 1395dd) for the provision of medical
assistance available under such plan to individuals who--
(1) have attained age 21, but have not attained age 65;
(2) are eligible for medical assistance under such plan; and
(3) require such medical assistance to stabilize an emergency
medical condition.
(b) Stabilization Review.--A State shall specify in its application
described in subsection (c)(1) establish a mechanism for how it will
ensure that institutions participating in the demonstration will
determine whether or not such individuals have been stabilized (as
defined in subsection (h)(5)). This mechanism shall commence before the
third day of the inpatient stay. States participating in the
demonstration project may manage the provision of services for the
stabilization of medical emergency conditions through utilization
review, authorization, or management practices, or the application of
medical necessity and appropriateness criteria applicable to behavioral
(c) Eligible State Defined.--
(1) In general.--An eligible State is a State that has made an
application and has been selected pursuant to paragraphs (2) and
(2) Application.--A State seeking to participate in the
demonstration project under this section shall submit to the
Secretary, at such time and in such format as the Secretary
requires, an application that includes such information,
provisions, and assurances, as the Secretary may require.
(3) Selection.--A State shall be determined eligible for the
demonstration by the Secretary on a competitive basis among States
with applications meeting the requirements of paragraph (1). In
selecting State applications for the demonstration project, the
Secretary shall seek to achieve an appropriate national balance in
the geographic distribution of such projects.
(d) Length of Demonstration Project.--The demonstration project
established under this section shall be conducted for a period of 3
consecutive years.
(e) Limitations on Federal Funding.--
(1) Appropriation.--
(A) In general.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to carry out this
section, $75,000,000 for fiscal year 2011.
(B) Budget authority.--Subparagraph (A) constitutes budget
authority in advance of appropriations Act and represents the
obligation of the Federal Government to provide for the payment
of the amounts appropriated under that subparagraph.
(2) 5-year availability.--Funds appropriated under paragraph
(1) shall remain available for obligation through December 31,
(3) Limitation on payments.--In no case may--
(A) the aggregate amount of payments made by the Secretary
to eligible States under this section exceed $75,000,000; or
(B) payments be provided by the Secretary under this
section after December 31, 2015.
(4) Funds allocated to states.--Funds shall be allocated to
eligible States on the basis of criteria, including a State's
application and the availability of funds, as determined by the
(5) Payments to states.--The Secretary shall pay to each
eligible State, from its allocation under paragraph (4), an amount
each quarter equal to the Federal medical assistance percentage of
expenditures in the quarter for medical assistance described in
subsection (a). As a condition of receiving payment, a State shall
collect and report information, as determined necessary by the
Secretary, for the purposes of providing Federal oversight and
conducting an evaluation under subsection (f)(1).
(f) Evaluation and Report to Congress.--
(1) Evaluation.--The Secretary shall conduct an evaluation of
the demonstration project in order to determine the impact on the
functioning of the health and mental health service system and on
individuals enrolled in the Medicaid program and shall include the
(A) An assessment of access to inpatient mental health
services under the Medicaid program; average lengths of
inpatient stays; and emergency room visits.
(B) An assessment of discharge planning by participating
(C) An assessment of the impact of the demonstration
project on the costs of the full range of mental health
services (including inpatient, emergency and ambulatory care).
(D) An analysis of the percentage of consumers with
Medicaid coverage who are admitted to inpatient facilities as a
result of the demonstration project as compared to those
admitted to these same facilities through other means.
(E) A recommendation regarding whether the demonstration
project should be continued after December 31, 2013, and
expanded on a national basis.
(2) Report.--Not later than December 31, 2013, the Secretary
shall submit to Congress and make available to the public a report
on the findings of the evaluation under paragraph (1).
(g) Waiver Authority.--
(1) In general.--The Secretary shall waive the limitation of
subdivision (B) following paragraph (28) of section 1905(a) of the
Social Security Act (42 U.S.C. 1396d(a)) (relating to limitations
on payments for care or services for individuals under 65 years of
age who are patients in an institution for mental diseases) for
purposes of carrying out the demonstration project under this
(2) Limited other waiver authority.--The Secretary may waive
other requirements of titles XI and XIX of the Social Security Act
(including the requirements of sections 1902(a)(1) (relating to
statewideness) and 1902(1)(10)(B) (relating to comparability)) only
to extent necessary to carry out the demonstration project under
(h) Definitions.--In this section:
(1) Emergency medical condition.--The term ``emergency medical
condition'' means, with respect to an individual, an individual who
expresses suicidal or homicidal thoughts or gestures, if determined
dangerous to self or others.
(2) Federal medical assistance percentage.--The term ``Federal
medical assistance percentage'' has the meaning given that term
with respect to a State under section 1905(b) of the Social
Security Act (42 U.S.C. 1396d(b)).
(3) Institution for mental diseases.--The term ``institution
for mental diseases'' has the meaning given to that term in section
1905(i) of the Social Security Act (42 U.S.C. 1396d(i)).
(4) Medical assistance.--The term ``medical assistance'' has
the meaning given that term in section 1905(a) of the Social
Security Act (42 U.S.C. 1396d(a)).
(5) Stabilized.--The term ``stabilized'' means, with respect to
an individual, that the emergency medical condition no longer
exists with respect to the individual and the individual is no
longer dangerous to self or others.
(6) State.--The term ``State'' has the meaning given that term
for purposes of title XIX of the Social Security Act (42 U.S.C.
1396 et seq.).
1396) is amended--
(i) in the paragraph heading, by inserting ``for all
states'' before ``and annual''; and
(ii) in subparagraph (A), by striking ``children's'';
(iii) in subparagraph (B), by inserting ``, the
Secretary, and States'' after ``Congress'';
(iv) in subparagraph (C), by striking ``March 1'' and
inserting ``March 15''; and
(v) in subparagraph (D), by striking ``June 1'' and
inserting ``June 15'';
(i) in subparagraph (A)--
(I) in clause (i)--
(aa) by inserting ``the efficient provision
of'' after ``expenditures for''; and
(bb) by striking ``hospital, skilled nursing
facility, physician, Federally-qualified health
center, rural health center, and other fees'' and
inserting ``payments to medical, dental, and health
professionals, hospitals, residential and long-term
care providers, providers of home and community
based services, Federally-qualified health centers
and rural health clinics, managed care entities,
and providers of other covered items and
services''; and
(II) in clause (iii), by inserting ``(including how
such factors and methodologies enable such
beneficiaries to obtain the services for which they are
eligible, affect provider supply, and affect providers
that serve a disproportionate share of low-income and
other vulnerable populations)'' after
``beneficiaries'';
(ii) by redesignating subparagraphs (B) and (C) as
subparagraphs (F) and (H), respectively;
(iii) by inserting after subparagraph (A), the
``(B) Eligibility policies.--Medicaid and CHIP eligibility
policies, including a determination of the degree to which
Federal and State policies provide health care coverage to
needy populations.
``(C) Enrollment and retention processes.--Medicaid and
CHIP enrollment and retention processes, including a
determination of the degree to which Federal and State policies
encourage the enrollment of individuals who are eligible for
such programs and screen out individuals who are ineligible,
while minimizing the share of program expenses devoted to such
``(D) Coverage policies.--Medicaid and CHIP benefit and
coverage policies, including a determination of the degree to
which Federal and State policies provide access to the services
enrollees require to improve and maintain their health and
functional status.
``(E) Quality of care.--Medicaid and CHIP policies as they
relate to the quality of care provided under those programs,
including a determination of the degree to which Federal and
State policies achieve their stated goals and interact with
similar goals established by other purchasers of health care
services.'';
(iv) by inserting after subparagraph (F) (as
redesignated by clause (ii) of this subparagraph), the
``(G) Interactions with medicare and medicaid.--Consistent
with paragraph (11), the interaction of policies under Medicaid
and the Medicare program under title XVIII, including with
respect to how such interactions affect access to services,
payments, and dual eligible individuals.'' and
(v) in subparagraph (H) (as so redesignated), by
inserting ``and preventive, acute, and long-term services
and supports'' after ``barriers'';
(C) by redesignating paragraphs (3) through (9) as
paragraphs (4) through (10), respectively;
(D) by inserting after paragraph (2), the following new
``(3) Recommendations and reports of state-specific data.--
MACPAC shall--
``(A) review national and State-specific Medicaid and CHIP
data; and
``(B) submit reports and recommendations to Congress, the
Secretary, and States based on such reviews.'';
(E) in paragraph (4), as redesignated by subparagraph (C),
by striking ``or any other problems'' and all that follows
through the period and inserting ``, as well as other factors
that adversely affect, or have the potential to adversely
affect, access to care by, or the health care status of,
Medicaid and CHIP beneficiaries. MACPAC shall include in the
annual report required under paragraph (1)(D) a description of
all such areas or problems identified with respect to the
period addressed in the report.'';
(F) in paragraph (5), as so redesignated,--
(i) in the paragraph heading, by inserting ``and
regulations'' after ``reports''; and
(ii) by striking ``If'' and inserting the following:
``(A) Certain secretarial reports.--If''; and
(iii) in the second sentence, by inserting ``and the
Secretary'' after ``appropriate committees of Congress'';
(iv) by adding at the end the following:
``(B) Regulations.--MACPAC shall review Medicaid and CHIP
regulations and may comment through submission of a report to
the appropriate committees of Congress and the Secretary, on
any such regulations that affect access, quality, or efficiency
of health care.'';
(G) in paragraph (10), as so redesignated, by inserting ``,
and shall submit with any recommendations, a report on the
Federal and State-specific budget consequences of the
recommendations'' before the period; and
(H) by adding at the end the following:
``(11) Consultation and coordination with medpac.--
``(A) In general.--MACPAC shall consult with the Medicare
Payment Advisory Commission (in this paragraph referred to as
`MedPAC') established under section 1805 in carrying out its
duties under this section, as appropriate and particularly with
respect to the issues specified in paragraph (2) as they relate
to those Medicaid beneficiaries who are dually eligible for
Medicaid and the Medicare program under title XVIII, adult
Medicaid beneficiaries (who are not dually eligible for
Medicare), and beneficiaries under Medicare. Responsibility for
analysis of and recommendations to change Medicare policy
regarding Medicare beneficiaries, including Medicare
beneficiaries who are dually eligible for Medicare and
Medicaid, shall rest with MedPAC.
``(B) Information sharing.--MACPAC and MedPAC shall have
access to deliberations and records of the other such entity,
respectively, upon the request of the other such entity.
``(12) Consultation with states.--MACPAC shall regularly
consult with States in carrying out its duties under this section,
including with respect to developing processes for carrying out
such duties, and shall ensure that input from States is taken into
account and represented in MACPAC's recommendations and reports.
``(13) Coordinate and consult with the federal coordinated
health care office.--MACPAC shall coordinate and consult with the
Federal Coordinated Health Care Office established under section
2081 of the Patient Protection and Affordable Care Act before
making any recommendations regarding dual eligible individuals.
``(14) Programmatic oversight vested in the secretary.--
MACPAC's authority to make recommendations in accordance with this
section shall not affect, or be considered to duplicate, the
Secretary's authority to carry out Federal responsibilities with
respect to Medicaid and CHIP.'';
(2) in subsection (c)(2)--
(A) by striking subparagraphs (A) and (B) and inserting the
``(A) In general.--The membership of MACPAC shall include
individuals who have had direct experience as enrollees or
parents or caregivers of enrollees in Medicaid or CHIP and
individuals with national recognition for their expertise in
Federal safety net health programs, health finance and
economics, actuarial science, health plans and integrated
delivery systems, reimbursement for health care, health
information technology, and other providers of health services,
public health, and other related fields, who provide a mix of
different professions, broad geographic representation, and a
balance between urban and rural representation.
``(B) Inclusion.--The membership of MACPAC shall include
(but not be limited to) physicians, dentists, and other health
professionals, employers, third-party payers, and individuals
with expertise in the delivery of health services. Such
membership shall also include representatives of children,
pregnant women, the elderly, individuals with disabilities,
caregivers, and dual eligible individuals, current or former
representatives of State agencies responsible for administering
Medicaid, and current or former representatives of State
agencies responsible for administering CHIP.''.
(3) in subsection (d)(2), by inserting ``and State'' after
``Federal'';
(4) in subsection (e)(1), in the first sentence, by inserting
``and, as a condition for receiving payments under sections 1903(a)
and 2105(a), from any State agency responsible for administering
Medicaid or CHIP,'' after ``United States''; and
(5) in subsection (f)--
(A) in the subsection heading, by striking ``Authorization
of Appropriations'' and inserting ``Funding'';
(B) in paragraph (1), by inserting ``(other than for fiscal
year 2010)'' before ``in the same manner''; and
``(3) Funding for fiscal year 2010.--
``(A) In general.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to MACPAC to
carry out the provisions of this section for fiscal year 2010,
$9,000,000.
``(B) Transfer of funds.--Notwithstanding section
2104(a)(13), from the amounts appropriated in such section for
fiscal year 2010, $2,000,000 is hereby transferred and made
available in such fiscal year to MACPAC to carry out the
provisions of this section.
``(4) Availability.--Amounts made available under paragraphs
(2) and (3) to MACPAC to carry out the provisions of this section
shall remain available until expended.''.
(b) Conforming MedPAC Amendments.--Section 1805(b) of the Social
Security Act (42 U.S.C. 1395b-6(b)), is amended--
(1) in paragraph (1)(C), by striking ``March 1 of each year
(beginning with 1998)'' and inserting ``March 15'';
(2) in paragraph (1)(D), by inserting ``, and (beginning with
2012) containing an examination of the topics described in
paragraph (9), to the extent feasible'' before the period; and
``(9) Review and annual report on medicaid and commercial
trends.--The Commission shall review and report on aggregate trends
in spending, utilization, and financial performance under the
Medicaid program under title XIX and the private market for health
care services with respect to providers for which, on an aggregate
national basis, a significant portion of revenue or services is
associated with the Medicaid program. Where appropriate, the
Commission shall conduct such review in consultation with the
Medicaid and CHIP Payment and Access Commission established under
section 1900 (in this section referred to as `MACPAC').
health care office.--The Commission shall coordinate and consult
with the Federal Coordinated Health Care Office established under
section 2081 of the Patient Protection and Affordable Care Act
before making any recommendations regarding dual eligible
``(11) Interaction of medicaid and medicare.--The Commission
shall consult with MACPAC in carrying out its duties under this
section, as appropriate. Responsibility for analysis of and
recommendations to change Medicare policy regarding Medicare
beneficiaries, including Medicare beneficiaries who are dually
eligible for Medicare and Medicaid, shall rest with the Commission.
Responsibility for analysis of and recommendations to change
Medicaid policy regarding Medicaid beneficiaries, including
Medicaid beneficiaries who are dually eligible for Medicare and
Medicaid, shall rest with MACPAC.''.
(a) No Cost-sharing for Indians With Income at or Below 300 Percent
of Poverty Enrolled in Coverage Through a State Exchange.--For
provisions prohibiting cost sharing for Indians enrolled in any
qualified health plan in the individual market through an Exchange, see
section 1402(d) of the Patient Protection and Affordable Care Act.
(b) Payer of Last Resort.--Health programs operated by the Indian
Health Service, Indian tribes, tribal organizations, and Urban Indian
organizations (as those terms are defined in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of
last resort for services provided by such Service, tribes, or
organizations to individuals eligible for services through such
programs, notwithstanding any Federal, State, or local law to the
contrary.
(c) Facilitating Enrollment of Indians Under the Express Lane
Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42
U.S.C. 1396a(e)(13)(F)(ii)) is amended--
(1) in the clause heading, by inserting ``and indian tribes and
tribal organizations'' after ``agencies''; and
``(IV) The Indian Health Service, an Indian Tribe,
Tribal Organization, or Urban Indian Organization (as
defined in section 1139(c)).''.
(d) Technical Corrections.--Section 1139(c) of the Social Security
Act (42 U.S.C. 1320b-9(c)) is amended by striking ``In this section''
and inserting ``For purposes of this section, title XIX, and title
XXI''.
SEC. 2902. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL MEDICARE
PART B SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS AND
CLINICS.
(a) Reimbursement for All Medicare Part B Services Furnished by
Certain Indian Hospitals and Clinics.--Section 1880(e)(1)(A) of the
Social Security Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by striking
``during the 5-year period beginning on'' and inserting ``on or
after''.
apply to items or services furnished on or after January 1, 2010.
SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING
Title V of the Social Security Act (42 U.S.C. 701 et seq.) is
amended by adding at the end the following new section:
``SEC. 511. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING
``(a) Purposes.--The purposes of this section are--
``(1) to strengthen and improve the programs and activities
carried out under this title;
``(2) to improve coordination of services for at risk
communities; and
``(3) to identify and provide comprehensive services to improve
outcomes for families who reside in at risk communities.
``(b) Requirement for All States To Assess Statewide Needs and
Identify at Risk Communities.--
``(1) In general.--Not later than 6 months after the date of
enactment of this section, each State shall, as a condition of
receiving payments from an allotment for the State under section
502 for fiscal year 2011, conduct a statewide needs assessment
(which shall be separate from the statewide needs assessment
required under section 505(a)) that identifies--
``(A) communities with concentrations of--
``(i) premature birth, low-birth weight infants, and
infant mortality, including infant death due to neglect, or
other indicators of at-risk prenatal, maternal, newborn, or
child health;
``(ii) poverty;
``(iii) crime;
``(iv) domestic violence;
``(v) high rates of high-school drop-outs;
``(vi) substance abuse;
``(vii) unemployment; or
``(viii) child maltreatment;
``(B) the quality and capacity of existing programs or
initiatives for early childhood home visitation in the State
``(i) the number and types of individuals and families
who are receiving services under such programs or
initiatives;
``(ii) the gaps in early childhood home visitation in
``(iii) the extent to which such programs or
initiatives are meeting the needs of eligible families
described in subsection (k)(2); and
``(C) the State's capacity for providing substance abuse
treatment and counseling services to individuals and families
in need of such treatment or services.
``(2) Coordination with other assessments.--In conducting the
statewide needs assessment required under paragraph (1), the State
shall coordinate with, and take into account, other appropriate
needs assessments conducted by the State, as determined by the
Secretary, including the needs assessment required under section
505(a) (both the most recently completed assessment and any such
assessment in progress), the communitywide strategic planning and
needs assessments conducted in accordance with section 640(g)(1)(C)
of the Head Start Act, and the inventory of current unmet needs and
current community-based and prevention-focused programs and
activities to prevent child abuse and neglect, and other family
resource services operating in the State required under section
205(3) of the Child Abuse Prevention and Treatment Act.
``(3) Submission to the secretary.--Each State shall submit to
the Secretary, in such form and manner as the Secretary shall
require--
``(A) the results of the statewide needs assessment
required under paragraph (1); and
``(B) a description of how the State intends to address
needs identified by the assessment, particularly with respect
to communities identified under paragraph (1)(A), which may
include applying for a grant to conduct an early childhood home
visitation program in accordance with the requirements of this
``(c) Grants for Early Childhood Home Visitation Programs.--
``(1) Authority to make grants.--In addition to any other
payments made under this title to a State, the Secretary shall make
grants to eligible entities to enable the entities to deliver
services under early childhood home visitation programs that
satisfy the requirements of subsection (d) to eligible families in
order to promote improvements in maternal and prenatal health,
infant health, child health and development, parenting related to
child development outcomes, school readiness, and the socioeconomic
status of such families, and reductions in child abuse, neglect,
and injuries.
``(2) Authority to use initial grant funds for planning or
implementation.--An eligible entity that receives a grant under
paragraph (1) may use a portion of the funds made available to the
entity during the first 6 months of the period for which the grant
is made for planning or implementation activities to assist with
the establishment of early childhood home visitation programs that
satisfy the requirements of subsection (d).
``(3) Grant duration.--The Secretary shall determine the period
of years for which a grant is made to an eligible entity under
``(4) Technical assistance.--The Secretary shall provide an
eligible entity that receives a grant under paragraph (1) with
technical assistance in administering programs or activities
conducted in whole or in part with grant funds.
``(d) Requirements.--The requirements of this subsection for an
early childhood home visitation program conducted with a grant made
under this section are as follows:
``(1) Quantifiable, measurable improvement in benchmark
areas.--
``(A) In general.--The eligible entity establishes, subject
to the approval of the Secretary, quantifiable, measurable 3-
and 5-year benchmarks for demonstrating that the program
results in improvements for the eligible families participating
in the program in each of the following areas:
``(i) Improved maternal and newborn health.
``(ii) Prevention of child injuries, child abuse,
neglect, or maltreatment, and reduction of emergency
department visits.
``(iii) Improvement in school readiness and
achievement.
``(iv) Reduction in crime or domestic violence.
``(v) Improvements in family economic self-sufficiency.
``(vi) Improvements in the coordination and referrals
for other community resources and supports.
``(B) Demonstration of improvements after 3 years.--
``(i) Report to the secretary.--Not later than 30 days
after the end of the 3rd year in which the eligible entity
conducts the program, the entity submits to the Secretary a
report demonstrating improvement in at least 4 of the areas
specified in subparagraph (A).
``(ii) Corrective action plan.--If the report submitted
by the eligible entity under clause (i) fails to
demonstrate improvement in at least 4 of the areas
specified in subparagraph (A), the entity shall develop and
implement a plan to improve outcomes in each of the areas
specified in subparagraph (A), subject to approval by the
Secretary. The plan shall include provisions for the
Secretary to monitor implementation of the plan and conduct
continued oversight of the program, including through
submission by the entity of regular reports to the
``(iii) Technical assistance.--
``(I) In general.--The Secretary shall provide an
eligible entity required to develop and implement an
improvement plan under clause (ii) with technical
assistance to develop and implement the plan. The
Secretary may provide the technical assistance directly
or through grants, contracts, or cooperative
``(II) Advisory panel.--The Secretary shall
establish an advisory panel for purposes of obtaining
recommendations regarding the technical assistance
provided to entities in accordance with subclause (I).
``(iv) No improvement or failure to submit report.--If
the Secretary determines after a period of time specified
by the Secretary that an eligible entity implementing an
improvement plan under clause (ii) has failed to
demonstrate any improvement in the areas specified in
subparagraph (A), or if the Secretary determines that an
eligible entity has failed to submit the report required
under clause (i), the Secretary shall terminate the
entity's grant and may include any unexpended grant funds
in grants made to nonprofit organizations under subsection
(h)(2)(B).
``(C) Final report.--Not later than December 31, 2015, the
eligible entity shall submit a report to the Secretary
demonstrating improvements (if any) in each of the areas
``(2) Improvements in outcomes for individual families.--
``(A) In general.--The program is designed, with respect to
an eligible family participating in the program, to result in
the participant outcomes described in subparagraph (B) that the
eligible entity identifies on the basis of an individualized
assessment of the family, are relevant for that family.
``(B) Participant outcomes.--The participant outcomes
described in this subparagraph are the following:
``(i) Improvements in prenatal, maternal, and newborn
health, including improved pregnancy outcomes
``(ii) Improvements in child health and development,
including the prevention of child injuries and maltreatment
and improvements in cognitive, language, social-emotional,
and physical developmental indicators.
``(iii) Improvements in parenting skills.
``(iv) Improvements in school readiness and child
academic achievement.
``(v) Reductions in crime or domestic violence.
``(vi) Improvements in family economic self-
sufficiency.
``(vii) Improvements in the coordination of referrals
for, and the provision of, other community resources and
supports for eligible families, consistent with State child
welfare agency training.
``(3) Core components.--The program includes the following core
``(A) Service delivery model or models.--
``(i) In general.--Subject to clause (ii), the program
is conducted using 1 or more of the service delivery models
described in item (aa) or (bb) of subclause (I) or in
subclause (II) selected by the eligible entity:
``(I) The model conforms to a clear consistent home
visitation model that has been in existence for at
least 3 years and is research-based, grounded in
relevant empirically-based knowledge, linked to program
determined outcomes, associated with a national
organization or institution of higher education that
has comprehensive home visitation program standards
that ensure high quality service delivery and
continuous program quality improvement, and has
demonstrated significant, (and in the case of the
service delivery model described in item (aa),
sustained) positive outcomes, as described in the
benchmark areas specified in paragraph (1)(A) and the
participant outcomes described in paragraph (2)(B),
when evaluated using well-designed and rigorous--
``(aa) randomized controlled research designs,
and the evaluation results have been published in a
peer-reviewed journal; or
``(bb) quasi-experimental research designs.
``(II) The model conforms to a promising and new
approach to achieving the benchmark areas specified in
paragraph (1)(A) and the participant outcomes described
in paragraph (2)(B), has been developed or identified
by a national organization or institution of higher
education, and will be evaluated through well-designed
and rigorous process.
``(ii) Majority of grant funds used for evidence-based
models.--An eligible entity shall use not more than 25
percent of the amount of the grant paid to the entity for a
fiscal year for purposes of conducting a program using the
service delivery model described in clause (i)(II).
``(iii) Criteria for evidence of effectiveness of
models.--The Secretary shall establish criteria for
evidence of effectiveness of the service delivery models
and shall ensure that the process for establishing the
criteria is transparent and provides the opportunity for
public comment.
``(B) Additional requirements.--
``(i) The program adheres to a clear, consistent model
that satisfies the requirements of being grounded in
empirically-based knowledge related to home visiting and
linked to the benchmark areas specified in paragraph (1)(A)
and the participant outcomes described in paragraph (2)(B)
related to the purposes of the program.
``(ii) The program employs well-trained and competent
staff, as demonstrated by education or training, such as
nurses, social workers, educators, child development
specialists, or other well-trained and competent staff, and
provides ongoing and specific training on the model being
``(iii) The program maintains high quality supervision
to establish home visitor competencies.
``(iv) The program demonstrates strong organizational
capacity to implement the activities involved.
``(v) The program establishes appropriate linkages and
referral networks to other community resources and supports
for eligible families.
``(vi) The program monitors the fidelity of program
implementation to ensure that services are delivered
pursuant to the specified model.
``(4) Priority for serving high-risk populations.--The eligible
entity gives priority to providing services under the program to
``(A) Eligible families who reside in communities in need
of such services, as identified in the statewide needs
assessment required under subsection (b)(1)(A).
``(B) Low-income eligible families.
``(C) Eligible families who are pregnant women who have not
attained age 21.
``(D) Eligible families that have a history of child abuse
or neglect or have had interactions with child welfare
``(E) Eligible families that have a history of substance
abuse or need substance abuse treatment.
``(F) Eligible families that have users of tobacco products
in the home.
``(G) Eligible families that are or have children with low
student achievement.
``(H) Eligible families with children with developmental
delays or disabilities.
``(I) Eligible families who, or that include individuals
who, are serving or formerly served in the Armed Forces,
including such families that have members of the Armed Forces
who have had multiple deployments outside of the United States.
``(e) Application Requirements.--An eligible entity desiring a
grant under this section shall submit an application to the Secretary
for approval, in such manner as the Secretary may require, that
``(1) A description of the populations to be served by the
entity, including specific information regarding how the entity
will serve high risk populations described in subsection (d)(4).
``(2) An assurance that the entity will give priority to
serving low-income eligible families and eligible families who
reside in at risk communities identified in the statewide needs
``(3) The service delivery model or models described in
subsection (d)(3)(A) that the entity will use under the program and
the basis for the selection of the model or models.
``(4) A statement identifying how the selection of the
populations to be served and the service delivery model or models
that the entity will use under the program for such populations is
consistent with the results of the statewide needs assessment
conducted under subsection (b).
``(5) The quantifiable, measurable benchmarks established by
the State to demonstrate that the program contributes to
improvements in the areas specified in subsection (d)(1)(A).
``(6) An assurance that the entity will obtain and submit
documentation or other appropriate evidence from the organization
or entity that developed the service delivery model or models used
under the program to verify that the program is implemented and
services are delivered according to the model specifications.
``(7) Assurances that the entity will establish procedures to
ensure that--
``(A) the participation of each eligible family in the
program is voluntary; and
``(B) services are provided to an eligible family in
accordance with the individual assessment for that family.
``(8) Assurances that the entity will--
``(A) submit annual reports to the Secretary regarding the
program and activities carried out under the program that
include such information and data as the Secretary shall
require; and
``(B) participate in, and cooperate with, data and
information collection necessary for the evaluation required
under subsection (g)(2) and other research and evaluation
activities carried out under subsection (h)(3).
``(9) A description of other State programs that include home
visitation services, including, if applicable to the State, other
programs carried out under this title with funds made available
from allotments under section 502(c), programs funded under title
IV, title II of the Child Abuse Prevention and Treatment Act
(relating to community-based grants for the prevention of child
abuse and neglect), and section 645A of the Head Start Act
(relating to Early Head Start programs).
``(10) Other information as required by the Secretary.
``(f) Maintenance of Effort.--Funds provided to an eligible entity
receiving a grant under this section shall supplement, and not
supplant, funds from other sources for early childhood home visitation
programs or initiatives.
``(g) Evaluation.--
``(1) Independent, expert advisory panel.--The Secretary, in
accordance with subsection (h)(1)(A), shall appoint an independent
advisory panel consisting of experts in program evaluation and
research, education, and early childhood development--
``(A) to review, and make recommendations on, the design
and plan for the evaluation required under paragraph (2) within
1 year after the date of enactment of this section;
``(B) to maintain and advise the Secretary regarding the
progress of the evaluation; and
``(C) to comment, if the panel so desires, on the report
submitted under paragraph (3).
``(2) Authority to conduct evaluation.--On the basis of the
recommendations of the advisory panel under paragraph (1), the
Secretary shall, by grant, contract, or interagency agreement,
conduct an evaluation of the statewide needs assessments submitted
under subsection (b) and the grants made under subsections (c) and
(h)(3)(B). The evaluation shall include--
``(A) an analysis, on a State-by-State basis, of the
results of such assessments, including indicators of maternal
and prenatal health and infant health and mortality, and State
actions in response to the assessments; and
``(B) an assessment of--
``(i) the effect of early childhood home visitation
programs on child and parent outcomes, including with
respect to each of the benchmark areas specified in
subsection (d)(1)(A) and the participant outcomes described
in subsection (d)(2)(B);
``(ii) the effectiveness of such programs on different
populations, including the extent to which the ability of
programs to improve participant outcomes varies across
programs and populations; and
``(iii) the potential for the activities conducted
under such programs, if scaled broadly, to improve health
care practices, eliminate health disparities, and improve
health care system quality, efficiencies, and reduce costs.
``(3) Report.--Not later than March 31, 2015, the Secretary
shall submit a report to Congress on the results of the evaluation
conducted under paragraph (2) and shall make the report publicly
``(h) Other Provisions.--
``(1) Intra-agency collaboration.--The Secretary shall ensure
that the Maternal and Child Health Bureau and the Administration
for Children and Families collaborate with respect to carrying out
this section, including with respect to--
``(A) reviewing and analyzing the statewide needs
assessments required under subsection (b), the awarding and
oversight of grants awarded under this section, the
establishment of the advisory panels required under subsections
(d)(1)(B)(iii)(II) and (g)(1), and the evaluation and report
required under subsection (g); and
``(B) consulting with other Federal agencies with
responsibility for administering or evaluating programs that
serve eligible families to coordinate and collaborate with
respect to research related to such programs and families,
including the Office of the Assistant Secretary for Planning
and Evaluation of the Department of Health and Human Services,
the Centers for Disease Control and Prevention, the National
Institute of Child Health and Human Development of the National
Institutes of Health, the Office of Juvenile Justice and
Delinquency Prevention of the Department of Justice, and the
Institute of Education Sciences of the Department of Education.
``(2) Grants to eligible entities that are not states.--
``(A) Indian tribes, tribal organizations, or urban indian
organizations.--The Secretary shall specify requirements for
eligible entities that are Indian Tribes (or a consortium of
Indian Tribes), Tribal Organizations, or Urban Indian
Organizations to apply for and conduct an early childhood home
visitation program with a grant under this section. Such
requirements shall, to the greatest extent practicable, be
consistent with the requirements applicable to eligible
entities that are States and shall require an Indian Tribe (or
consortium), Tribal Organization, or Urban Indian Organization
to--
``(i) conduct a needs assessment similar to the
assessment required for all States under subsection (b);
``(ii) establish quantifiable, measurable 3- and 5-year
benchmarks consistent with subsection (d)(1)(A).
``(B) Nonprofit organizations.--If, as of the beginning of
fiscal year 2012, a State has not applied or been approved for
a grant under this section, the Secretary may use amounts
appropriated under paragraph (1) of subsection (j) that are
available for expenditure under paragraph (3) of that
subsection to make a grant to an eligible entity that is a
nonprofit organization described in subsection (k)(1)(B) to
conduct an early childhood home visitation program in the
State. The Secretary shall specify the requirements for such an
organization to apply for and conduct the program which shall,
to the greatest extent practicable, be consistent with the
requirements applicable to eligible entities that are States
and shall require the organization to--
``(i) carry out the program based on the needs
assessment conducted by the State under subsection (b); and
``(3) Research and other evaluation activities.--
``(A) In general.--The Secretary shall carry out a
continuous program of research and evaluation activities in
order to increase knowledge about the implementation and
effectiveness of home visiting programs, using random
assignment designs to the maximum extent feasible. The
Secretary may carry out such activities directly, or through
grants, cooperative agreements, or contracts.
``(B) Requirements.--The Secretary shall ensure that--
``(i) evaluation of a specific program or project is
conducted by persons or individuals not directly involved
in the operation of such program or project; and
``(ii) the conduct of research and evaluation
activities includes consultation with independent
researchers, State officials, and developers and providers
of home visiting programs on topics including research
design and administrative data matching.
``(4) Report and recommendation.--Not later than December 31,
2015, the Secretary shall submit a report to Congress regarding the
programs conducted with grants under this section. The report
required under this paragraph shall include--
``(A) information regarding the extent to which eligible
entities receiving grants under this section demonstrated
improvements in each of the areas specified in subsection
(d)(1)(A);
``(B) information regarding any technical assistance
provided under subsection (d)(1)(B)(iii)(I), including the type
of any such assistance provided; and
``(C) recommendations for such legislative or
administrative action as the Secretary determines appropriate.
``(i) Application of Other Provisions of Title.--
``(1) In general.--Except as provided in paragraph (2), the
other provisions of this title shall not apply to a grant made
``(2) Exceptions.--The following provisions of this title shall
apply to a grant made under this section to the same extent and in
the same manner as such provisions apply to allotments made under
section 502(c):
``(A) Section 504(b)(6) (relating to prohibition on
payments to excluded individuals and entities).
``(B) Section 504(c) (relating to the use of funds for the
purchase of technical assistance).
``(C) Section 504(d) (relating to a limitation on
administrative expenditures).
``(D) Section 506 (relating to reports and audits), but
only to the extent determined by the Secretary to be
appropriate for grants made under this section.
``(E) Section 507 (relating to penalties for false
statements).
``(F) Section 508 (relating to nondiscrimination).
``(G) Section 509(a) (relating to the administration of the
grant program).
``(j) Appropriations.--
``(1) In general.--Out of any funds in the Treasury not
otherwise appropriated, there are appropriated to the Secretary to
carry out this section--
``(A) $100,000,000 for fiscal year 2010;
``(B) $250,000,000 for fiscal year 2011;
``(C) $350,000,000 for fiscal year 2012;
``(D) $400,000,000 for fiscal year 2013; and
``(E) $400,000,000 for fiscal year 2014.
``(2) Reservations.--Of the amount appropriated under this
subsection for a fiscal year, the Secretary shall reserve--
``(A) 3 percent of such amount for purposes of making
grants to eligible entities that are Indian Tribes (or a
consortium of Indian Tribes), Tribal Organizations, or Urban
Indian Organizations; and
``(B) 3 percent of such amount for purposes of carrying out
subsections (d)(1)(B)(iii), (g), and (h)(3).
``(3) Availability.--Funds made available to an eligible entity
under this section for a fiscal year shall remain available for
expenditure by the eligible entity through the end of the second
succeeding fiscal year after award. Any funds that are not expended
by the eligible entity during the period in which the funds are
available under the preceding sentence may be used for grants to
nonprofit organizations under subsection (h)(2)(B).
``(k) Definitions.--In this section:
``(1) Eligible entity.--
``(A) In general.--The term `eligible entity' means a
State, an Indian Tribe, Tribal Organization, or Urban Indian
Organization, Puerto Rico, Guam, the Virgin Islands, the
Northern Mariana Islands, and American Samoa.
``(B) Nonprofit organizations.--Only for purposes of
awarding grants under subsection (h)(2)(B), such term shall
include a nonprofit organization with an established record of
providing early childhood home visitation programs or
initiatives in a State or several States.
``(2) Eligible family.--The term `eligible family' means--
``(A) a woman who is pregnant, and the father of the child
if the father is available; or
``(B) a parent or primary caregiver of a child, including
grandparents or other relatives of the child, and foster
parents, who are serving as the child's primary caregiver from
birth to kindergarten entry, and including a noncustodial
parent who has an ongoing relationship with, and at times
provides physical care for, the child.
``(3) Indian tribe; tribal organization.--The terms `Indian
Tribe' and `Tribal Organization', and `Urban Indian Organization'
have the meanings given such terms in section 4 of the Indian
Health Care Improvement Act.''.
(a) Research on Postpartum Conditions.--
(1) Expansion and intensification of activities.--The Secretary
of Health and Human Services (in this subsection and subsection (c)
referred to as the ``Secretary'') is encouraged to continue
activities on postpartum depression or postpartum psychosis (in
this subsection and subsection (c) referred to as ``postpartum
conditions''), including research to expand the understanding of
the causes of, and treatments for, postpartum conditions.
Activities under this paragraph shall include conducting and
supporting the following:
(A) Basic research concerning the etiology and causes of
the conditions.
(B) Epidemiological studies to address the frequency and
natural history of the conditions and the differences among
racial and ethnic groups with respect to the conditions.
(C) The development of improved screening and diagnostic
techniques.
(D) Clinical research for the development and evaluation of
new treatments.
(E) Information and education programs for health care
professionals and the public, which may include a coordinated
national campaign to increase the awareness and knowledge of
postpartum conditions. Activities under such a national
campaign may--
(i) include public service announcements through
television, radio, and other means; and
(ii) focus on--
(I) raising awareness about screening;
(II) educating new mothers and their families about
postpartum conditions to promote earlier diagnosis and
treatment; and
(III) ensuring that such education includes
complete information concerning postpartum conditions,
including its symptoms, methods of coping with the
illness, and treatment resources.
(2) Sense of congress regarding longitudinal study of relative
mental health consequences for women of resolving a pregnancy.--
(A) Sense of congress.--It is the sense of Congress that
the Director of the National Institute of Mental Health may
conduct a nationally representative longitudinal study (during
the period of fiscal years 2010 through 2019) of the relative
mental health consequences for women of resolving a pregnancy
(intended and unintended) in various ways, including carrying
the pregnancy to term and parenting the child, carrying the
pregnancy to term and placing the child for adoption,
miscarriage, and having an abortion. This study may assess the
incidence, timing, magnitude, and duration of the immediate and
long-term mental health consequences (positive or negative) of
these pregnancy outcomes.
(B) Report.--Subject to the completion of the study under
subsection (a), beginning not later than 5 years after the date
of the enactment of this Act, and periodically thereafter for
the duration of the study, such Director may prepare and submit
to the Congress reports on the findings of the study.
(b) Grants To Provide Services to Individuals With a Postpartum
Condition and Their Families.--Title V of the Social Security Act (42
U.S.C. 701 et seq.), as amended by section 2951, is amended by adding
at the end the following new section:
``SEC. 512. SERVICES TO INDIVIDUALS WITH A POSTPARTUM CONDITION AND
THEIR FAMILIES.
``(a) In General.--In addition to any other payments made under
this title to a State, the Secretary may make grants to eligible
entities for projects for the establishment, operation, and
coordination of effective and cost-efficient systems for the delivery
of essential services to individuals with or at risk for postpartum
conditions and their families.
``(b) Certain Activities.--To the extent practicable and
appropriate, the Secretary shall ensure that projects funded under
subsection (a) provide education and services with respect to the
diagnosis and management of postpartum conditions for individuals with
or at risk for postpartum conditions and their families. The Secretary
may allow such projects to include the following:
``(1) Delivering or enhancing outpatient and home-based health
and support services, including case management and comprehensive
treatment services.
``(2) Delivering or enhancing inpatient care management
services that ensure the well-being of the mother and family and
the future development of the infant.
``(3) Improving the quality, availability, and organization of
health care and support services (including transportation
services, attendant care, homemaker services, day or respite care,
and providing counseling on financial assistance and insurance).
``(4) Providing education about postpartum conditions to
promote earlier diagnosis and treatment. Such education may
include--
``(A) providing complete information on postpartum
conditions, symptoms, methods of coping with the illness, and
treatment resources; and
``(B) in the case of a grantee that is a State, hospital,
or birthing facility--
``(i) providing education to new mothers and fathers,
and other family members as appropriate, concerning
postpartum conditions before new mothers leave the health
facility; and
``(ii) ensuring that training programs regarding such
education are carried out at the health facility.
``(c) Integration With Other Programs.--To the extent practicable
and appropriate, the Secretary may integrate the grant program under
this section with other grant programs carried out by the Secretary,
including the program under section 330 of the Public Health Service
``(d) Requirements.--The Secretary shall establish requirements for
grants made under this section that include a limit on the amount of
grants funds that may be used for administration, accounting,
reporting, or program oversight functions and a requirement for each
eligible entity that receives a grant to submit, for each grant period,
a report to the Secretary that describes how grant funds were used
during such period.
``(e) Technical Assistance.--The Secretary may provide technical
assistance to entities seeking a grant under this section in order to
assist such entities in complying with the requirements of this
``(f) Application of Other Provisions of Title.--
``(g) Definitions.--In this section:
``(1) The term `eligible entity'--
``(A) means a public or nonprofit private entity; and
``(B) includes a State or local government, public-private
partnership, recipient of a grant under section 330H of the
Public Health Service Act (relating to the Healthy Start
Initiative), public or nonprofit private hospital, community-
based organization, hospice, ambulatory care facility,
community health center, migrant health center, public housing
primary care center, or homeless health center.
``(2) The term `postpartum condition' means postpartum
depression or postpartum psychosis.''.
(c) General Provisions.--
(1) Authorization of appropriations.--To carry out this section
and the amendment made by subsection (b), there are authorized to
be appropriated, in addition to such other sums as may be available
for such purpose--
(A) $3,000,000 for fiscal year 2010; and
(B) such sums as may be necessary for fiscal years 2011 and
(2) Report by the secretary.--
(A) Study.--The Secretary shall conduct a study on the
benefits of screening for postpartum conditions.
(B) Report.--Not later than 2 years after the date of the
enactment of this Act, the Secretary shall complete the study
required by subparagraph (A) and submit a report to the
Congress on the results of such study.
Title V of the Social Security Act (42 U.S.C. 701 et seq.), as
amended by sections 2951 and 2952(c), is amended by adding at the end
``SEC. 513. PERSONAL RESPONSIBILITY EDUCATION.
``(a) Allotments to States.--
``(1) Amount.--
``(A) In general.--For the purpose described in subsection
(b), subject to the succeeding provisions of this section, for
each of fiscal years 2010 through 2014, the Secretary shall
allot to each State an amount equal to the product of--
``(i) the amount appropriated under subsection (f) for
the fiscal year and available for allotments to States
after the application of subsection (c); and
``(ii) the State youth population percentage determined
``(B) Minimum allotment.--
``(i) In general.--Each State allotment under this
paragraph for a fiscal year shall be at least $250,000.
``(ii) Pro rata adjustments.--The Secretary shall
adjust on a pro rata basis the amount of the State
allotments determined under this paragraph for a fiscal
year to the extent necessary to comply with clause (i).
``(C) Application required to access allotments.--
``(i) In general.--A State shall not be paid from its
allotment for a fiscal year unless the State submits an
application to the Secretary for the fiscal year and the
Secretary approves the application (or requires changes to
the application that the State satisfies) and meets such
additional requirements as the Secretary may specify.
``(ii) Requirements.--The State application shall
contain an assurance that the State has complied with the
requirements of this section in preparing and submitting
the application and shall include the following as well as
such additional information as the Secretary may require:
``(I) Based on data from the Centers for Disease
Control and Prevention National Center for Health
Statistics, the most recent pregnancy rates for the
State for youth ages 10 to 14 and youth ages 15 to 19
for which data are available, the most recent birth
rates for such youth populations in the State for which
data are available, and trends in those rates for the
most recently preceding 5-year period for which such
data are available.
``(II) State-established goals for reducing the
pregnancy rates and birth rates for such youth
populations.
``(III) A description of the State's plan for using
the State allotments provided under this section to
achieve such goals, especially among youth populations
that are the most high-risk or vulnerable for
pregnancies or otherwise have special circumstances,
including youth in foster care, homeless youth, youth
with HIV/AIDS, pregnant youth who are under 21 years of
age, mothers who are under 21 years of age, and youth
residing in areas with high birth rates for youth.
``(2) State youth population percentage.--
``(A) In general.--For purposes of paragraph (1)(A)(ii),
the State youth population percentage is, with respect to a
State, the proportion (expressed as a percentage) of--
``(i) the number of individuals who have attained age
10 but not attained age 20 in the State; to
``(ii) the number of such individuals in all States.
``(B) Determination of number of youth.--The number of
individuals described in clauses (i) and (ii) of subparagraph
(A) in a State shall be determined on the basis of the most
recent Bureau of the Census data.
``(3) Availability of state allotments.--Subject to paragraph
(4)(A), amounts allotted to a State pursuant to this subsection for
a fiscal year shall remain available for expenditure by the State
through the end of the second succeeding fiscal year.
``(4) Authority to award grants from state allotments to local
organizations and entities in nonparticipating states.--
``(A) Grants from unexpended allotments.--If a State does
not submit an application under this section for fiscal year
2010 or 2011, the State shall no longer be eligible to submit
an application to receive funds from the amounts allotted for
the State for each of fiscal years 2010 through 2014 and such
amounts shall be used by the Secretary to award grants under
this paragraph for each of fiscal years 2012 through 2014. The
Secretary also shall use any amounts from the allotments of
States that submit applications under this section for a fiscal
year that remain unexpended as of the end of the period in
which the allotments are available for expenditure under
paragraph (3) for awarding grants under this paragraph.
``(B) 3-year grants.--
``(i) In general.--The Secretary shall solicit
applications to award 3-year grants in each of fiscal years
2012, 2013, and 2014 to local organizations and entities to
conduct, consistent with subsection (b), programs and
activities in States that do not submit an application for
an allotment under this section for fiscal year 2010 or
``(ii) Faith-based organizations or consortia.--The
Secretary may solicit and award grants under this paragraph
to faith-based organizations or consortia.
``(C) Evaluation.--An organization or entity awarded a
grant under this paragraph shall agree to participate in a
rigorous Federal evaluation.
``(5) Maintenance of effort.--No payment shall be made to a
State from the allotment determined for the State under this
subsection or to a local organization or entity awarded a grant
under paragraph (4), if the expenditure of non-federal funds by the
State, organization, or entity for activities, programs, or
initiatives for which amounts from allotments and grants under this
subsection may be expended is less than the amount expended by the
State, organization, or entity for such programs or initiatives for
fiscal year 2009.
``(6) Data collection and reporting.--A State or local
organization or entity receiving funds under this section shall
cooperate with such requirements relating to the collection of data
and information and reporting on outcomes regarding the programs
and activities carried out with such funds, as the Secretary shall
specify.
``(b) Purpose.--
``(1) In general.--The purpose of an allotment under subsection
(a)(1) to a State is to enable the State (or, in the case of grants
made under subsection (a)(4)(B), to enable a local organization or
entity) to carry out personal responsibility education programs
consistent with this subsection.
``(2) Personal responsibility education programs.--
``(A) In general.--In this section, the term `personal
responsibility education program' means a program that is
designed to educate adolescents on--
``(i) both abstinence and contraception for the
prevention of pregnancy and sexually transmitted
infections, including HIV/AIDS, consistent with the
requirements of subparagraph (B); and
``(ii) at least 3 of the adulthood preparation subjects
described in subparagraph (C).
``(B) Requirements.--The requirements of this subparagraph
are the following:
``(i) The program replicates evidence-based effective
programs or substantially incorporates elements of
effective programs that have been proven on the basis of
rigorous scientific research to change behavior, which
means delaying sexual activity, increasing condom or
contraceptive use for sexually active youth, or reducing
pregnancy among youth.
``(ii) The program is medically-accurate and complete.
``(iii) The program includes activities to educate
youth who are sexually active regarding responsible sexual
behavior with respect to both abstinence and the use of
contraception.
``(iv) The program places substantial emphasis on both
abstinence and contraception for the prevention of
pregnancy among youth and sexually transmitted infections.
``(v) The program provides age-appropriate information
and activities.
``(vi) The information and activities carried out under
the program are provided in the cultural context that is
most appropriate for individuals in the particular
population group to which they are directed.
``(C) Adulthood preparation subjects.--The adulthood
preparation subjects described in this subparagraph are the
``(i) Healthy relationships, such as positive self-
esteem and relationship dynamics, friendships, dating,
romantic involvement, marriage, and family interactions.
``(ii) Adolescent development, such as the development
of healthy attitudes and values about adolescent growth and
development, body image, racial and ethnic diversity, and
other related subjects.
``(iii) Financial literacy.
``(iv) Parent-child communication.
``(v) Educational and career success, such as
developing skills for employment preparation, job seeking,
independent living, financial self-sufficiency, and
workplace productivity.
``(vi) Healthy life skills, such as goal-setting,
decision making, negotiation, communication and
interpersonal skills, and stress management.
``(c) Reservations of Funds.--
``(1) Grants to implement innovative strategies.--From the
amount appropriated under subsection (f) for the fiscal year, the
Secretary shall reserve $10,000,000 of such amount for purposes of
awarding grants to entities to implement innovative youth pregnancy
prevention strategies and target services to high-risk, vulnerable,
and culturally under-represented youth populations, including youth
in foster care, homeless youth, youth with HIV/AIDS, pregnant women
who are under 21 years of age and their partners, mothers who are
under 21 years of age and their partners, and youth residing in
areas with high birth rates for youth. An entity awarded a grant
under this paragraph shall agree to participate in a rigorous
Federal evaluation of the activities carried out with grant funds.
``(2) Other reservations.--From the amount appropriated under
subsection (f) for the fiscal year that remains after the
application of paragraph (1), the Secretary shall reserve the
following amounts:
``(A) Grants for indian tribes or tribal organizations.--
The Secretary shall reserve 5 percent of such remainder for
purposes of awarding grants to Indian tribes and tribal
organizations in such manner, and subject to such requirements,
as the Secretary, in consultation with Indian tribes and tribal
organizations, determines appropriate.
``(B) Secretarial responsibilities.--
``(i) Reservation of funds.--The Secretary shall
reserve 10 percent of such remainder for expenditures by
the Secretary for the activities described in clauses (ii)
and (iii).
``(ii) Program support.--The Secretary shall provide,
directly or through a competitive grant process, research,
training and technical assistance, including dissemination
of research and information regarding effective and
promising practices, providing consultation and resources
on a broad array of teen pregnancy prevention strategies,
including abstinence and contraception, and developing
resources and materials to support the activities of
recipients of grants and other State, tribal, and community
organizations working to reduce teen pregnancy. In carrying
out such functions, the Secretary shall collaborate with a
variety of entities that have expertise in the prevention
of teen pregnancy, HIV and sexually transmitted infections,
healthy relationships, financial literacy, and other topics
addressed through the personal responsibility education
``(iii) Evaluation.--The Secretary shall evaluate the
programs and activities carried out with funds made
available through allotments or grants under this section.
``(d) Administration.--
``(1) In general.--The Secretary shall administer this section
through the Assistant Secretary for the Administration for Children
and Families within the Department of Health and Human Services.
``(2) Application of other provisions of title.--
``(A) In general.--Except as provided in subparagraph (B),
the other provisions of this title shall not apply to
allotments or grants made under this section.
``(B) Exceptions.--The following provisions of this title
shall apply to allotments and grants made under this section to
the same extent and in the same manner as such provisions apply
to allotments made under section 502(c):
``(i) Section 504(b)(6) (relating to prohibition on
``(ii) Section 504(c) (relating to the use of funds for
the purchase of technical assistance).
``(iii) Section 504(d) (relating to a limitation on
``(iv) Section 506 (relating to reports and audits),
but only to the extent determined by the Secretary to be
``(v) Section 507 (relating to penalties for false
``(vi) Section 508 (relating to nondiscrimination).
``(e) Definitions.--In this section:
``(1) Age-appropriate.--The term `age-appropriate', with
respect to the information in pregnancy prevention, means topics,
messages, and teaching methods suitable to particular ages or age
groups of children and adolescents, based on developing cognitive,
emotional, and behavioral capacity typical for the age or age
group.
``(2) Medically accurate and complete.--The term `medically
accurate and complete' means verified or supported by the weight of
research conducted in compliance with accepted scientific methods
and--
``(A) published in peer-reviewed journals, where
applicable; or
``(B) comprising information that leading professional
organizations and agencies with relevant expertise in the field
recognize as accurate, objective, and complete.
``(3) Indian tribes; tribal organizations.--The terms `Indian
tribe' and `Tribal organization' have the meanings given such terms
in section 4 of the Indian Health Care Improvement Act (25 U.S.C.
1603)).
``(4) Youth.--The term `youth' means an individual who has
attained age 10 but has not attained age 20.
``(f) Appropriation.--For the purpose of carrying out this section,
there is appropriated, out of any money in the Treasury not otherwise
appropriated, $75,000,000 for each of fiscal years 2010 through 2014.
Amounts appropriated under this subsection shall remain available until
expended.''.
Section 510 of the Social Security Act (42 U.S.C. 710) is amended--
(1) in subsection (a), by striking ``fiscal year 1998 and each
subsequent fiscal year'' and inserting ``each of fiscal years 2010
through 2014''; and
(A) in the first sentence, by striking ``1998 through
2003'' and inserting ``2010 through 2014''; and
(B) in the second sentence, by inserting ``(except that
such appropriation shall be made on the date of enactment of
the Patient Protection and Affordable Care Act in the case of
fiscal year 2010)'' before the period.
(a) Transition Planning.--Section 475(5)(H) of the Social Security
Act (42 U.S.C. 675(5)(H)) is amended by inserting ``includes
information about the importance of designating another individual to
make health care treatment decisions on behalf of the child if the
child becomes unable to participate in such decisions and the child
does not have, or does not want, a relative who would otherwise be
authorized under State law to make such decisions, and provides the
child with the option to execute a health care power of attorney,
health care proxy, or other similar document recognized under State
law,'' after ``employment services,''.
(b) Independent Living Education.--Section 477(b)(3) of such Act
(42 U.S.C. 677(b)(3)) is amended by adding at the end the following:
``(K) A certification by the chief executive officer of the
State that the State will ensure that an adolescent
participating in the program under this section are provided
with education about the importance of designating another
individual to make health care treatment decisions on behalf of
the adolescent if the adolescent becomes unable to participate
in such decisions and the adolescent does not have, or does not
want, a relative who would otherwise be authorized under State
law to make such decisions, whether a health care power of
attorney, health care proxy, or other similar document is
recognized under State law, and how to execute such a document
if the adolescent wants to do so.''.
(c) Health Oversight and Coordination Plan.--Section 422(b)(15)(A)
of such Act (42 U.S.C. 622(b)(15)(A)) is amended--
(1) in clause (v), by striking ``and'' at the end; and
``(vii) steps to ensure that the components of the
transition plan development process required under section
475(5)(H) that relate to the health care needs of children
aging out of foster care, including the requirements to
include options for health insurance, information about a
health care power of attorney, health care proxy, or other
similar document recognized under State law, and to provide
the child with the option to execute such a document, are
met; and''.
(a) Program.--
(1) In general.--Section 1886 of the Social Security Act (42
U.S.C. 1395ww), as amended by section 4102(a) of the HITECH Act
(Public Law 111-5), is amended by adding at the end the following
new subsection:
``(o) Hospital Value-Based Purchasing Program.--
``(1) Establishment.--
``(A) In general.--Subject to the succeeding provisions of
this subsection, the Secretary shall establish a hospital
value-based purchasing program (in this subsection referred to
as the `Program') under which value-based incentive payments
are made in a fiscal year to hospitals that meet the
performance standards under paragraph (3) for the performance
period for such fiscal year (as established under paragraph
(4)).
``(B) Program to begin in fiscal year 2013.--The Program
shall apply to payments for discharges occurring on or after
``(C) Applicability of program to hospitals.--
``(i) In general.--For purposes of this subsection,
subject to clause (ii), the term `hospital' means a
subsection (d) hospital (as defined in subsection
(d)(1)(B)).
``(ii) Exclusions.--The term `hospital' shall not
include, with respect to a fiscal year, a hospital--
``(I) that is subject to the payment reduction
under subsection (b)(3)(B)(viii)(I) for such fiscal
year;
``(II) for which, during the performance period for
such fiscal year, the Secretary has cited deficiencies
that pose immediate jeopardy to the health or safety of
patients;
``(III) for which there are not a minimum number
(as determined by the Secretary) of measures that apply
to the hospital for the performance period for such
fiscal year; or
``(IV) for which there are not a minimum number (as
determined by the Secretary) of cases for the measures
that apply to the hospital for the performance period
for such fiscal year.
``(iii) Independent analysis.--For purposes of
determining the minimum numbers under subclauses (III) and
(IV) of clause (ii), the Secretary shall have conducted an
independent analysis of what numbers are appropriate.
``(iv) Exemption.--In the case of a hospital that is
paid under section 1814(b)(3), the Secretary may exempt
such hospital from the application of this subsection if
the State which is paid under such section submits an
annual report to the Secretary describing how a similar
program in the State for a participating hospital or
hospitals achieves or surpasses the measured results in
terms of patient health outcomes and cost savings
established under this subsection.
``(2) Measures.--
``(A) In general.--The Secretary shall select measures for
purposes of the Program. Such measures shall be selected from
the measures specified under subsection (b)(3)(B)(viii).
``(B) Requirements.--
``(i) For fiscal year 2013.--For value-based incentive
payments made with respect to discharges occurring during
fiscal year 2013, the Secretary shall ensure the following:
``(I) Conditions or procedures.--Measures are
selected under subparagraph (A) that cover at least the
following 5 specific conditions or procedures:
``(aa) Acute myocardial infarction (AMI).
``(bb) Heart failure.
``(cc) Pneumonia.
``(dd) Surgeries, as measured by the Surgical
Care Improvement Project (formerly referred to as
`Surgical Infection Prevention' for discharges
occurring before July 2006).
``(ee) Healthcare-associated infections, as
measured by the prevention metrics and targets
established in the HHS Action Plan to Prevent
Healthcare-Associated Infections (or any successor
plan) of the Department of Health and Human
``(II) HCAHPS.--Measures selected under
subparagraph (A) shall be related to the Hospital
Consumer Assessment of Healthcare Providers and Systems
survey (HCAHPS).
``(ii) Inclusion of efficiency measures.--For value-
based incentive payments made with respect to discharges
occurring during fiscal year 2014 or a subsequent fiscal
year, the Secretary shall ensure that measures selected
under subparagraph (A) include efficiency measures,
including measures of `Medicare spending per beneficiary'.
Such measures shall be adjusted for factors such as age,
sex, race, severity of illness, and other factors that the
``(C) Limitations.--
``(i) Time requirement for prior reporting and
notice.--The Secretary may not select a measure under
subparagraph (A) for use under the Program with respect to
a performance period for a fiscal year (as established
under paragraph (4)) unless such measure has been specified
under subsection (b)(3)(B)(viii) and included on the
Hospital Compare Internet website for at least 1 year prior
to the beginning of such performance period.
``(ii) Measure not applicable unless hospital furnishes
services appropriate to the measure.--A measure selected
under subparagraph (A) shall not apply to a hospital if
such hospital does not furnish services appropriate to such
measure.
``(D) Replacing measures.--Subclause (VI) of subsection
(b)(3)(B)(viii) shall apply to measures selected under
subparagraph (A) in the same manner as such subclause applies
to measures selected under such subsection.
``(3) Performance standards.--
``(A) Establishment.--The Secretary shall establish
performance standards with respect to measures selected under
paragraph (2) for a performance period for a fiscal year (as
established under paragraph (4)).
``(B) Achievement and improvement.--The performance
standards established under subparagraph (A) shall include
levels of achievement and improvement.
``(C) Timing.--The Secretary shall establish and announce
the performance standards under subparagraph (A) not later than
60 days prior to the beginning of the performance period for
the fiscal year involved.
``(D) Considerations in establishing standards.--In
establishing performance standards with respect to measures
under this paragraph, the Secretary shall take into account
appropriate factors, such as--
``(i) practical experience with the measures involved,
including whether a significant proportion of hospitals
failed to meet the performance standard during previous
performance periods;
``(ii) historical performance standards;
``(iii) improvement rates; and
``(iv) the opportunity for continued improvement.
``(4) Performance period.--For purposes of the Program, the
Secretary shall establish the performance period for a fiscal year.
Such performance period shall begin and end prior to the beginning
of such fiscal year.
``(5) Hospital performance score.--
``(A) In general.--Subject to subparagraph (B), the
Secretary shall develop a methodology for assessing the total
performance of each hospital based on performance standards
with respect to the measures selected under paragraph (2) for a
performance period (as established under paragraph (4)). Using
such methodology, the Secretary shall provide for an assessment
(in this subsection referred to as the `hospital performance
score') for each hospital for each performance period.
``(B) Application.--
``(i) Appropriate distribution.--The Secretary shall
ensure that the application of the methodology developed
under subparagraph (A) results in an appropriate
distribution of value-based incentive payments under
paragraph (6) among hospitals achieving different levels of
hospital performance scores, with hospitals achieving the
highest hospital performance scores receiving the largest
value-based incentive payments.
``(ii) Higher of achievement or improvement.--The
methodology developed under subparagraph (A) shall provide
that the hospital performance score is determined using the
higher of its achievement or improvement score for each
``(iii) Weights.--The methodology developed under
subparagraph (A) shall provide for the assignment of
weights for categories of measures as the Secretary
``(iv) No minimum performance standard.--The Secretary
shall not set a minimum performance standard in determining
the hospital performance score for any hospital.
``(v) Reflection of measures applicable to the
hospital.--The hospital performance score for a hospital
shall reflect the measures that apply to the hospital.
``(6) Calculation of value-based incentive payments.--
``(A) In general.--In the case of a hospital that the
Secretary determines meets (or exceeds) the performance
standards under paragraph (3) for the performance period for a
fiscal year (as established under paragraph (4)), the Secretary
shall increase the base operating DRG payment amount (as
defined in paragraph (7)(D)), as determined after application
of paragraph (7)(B)(i), for a hospital for each discharge
occurring in such fiscal year by the value-based incentive
payment amount.
``(B) Value-based incentive payment amount.--The value-
based incentive payment amount for each discharge of a hospital
in a fiscal year shall be equal to the product of--
``(i) the base operating DRG payment amount (as defined
in paragraph (7)(D)) for the discharge for the hospital for
such fiscal year; and
``(ii) the value-based incentive payment percentage
specified under subparagraph (C) for the hospital for such
``(C) Value-based incentive payment percentage.--
``(i) In general.--The Secretary shall specify a value-
based incentive payment percentage for a hospital for a
``(ii) Requirements.--In specifying the value-based
incentive payment percentage for each hospital for a fiscal
year under clause (i), the Secretary shall ensure that--
``(I) such percentage is based on the hospital
performance score of the hospital under paragraph (5);
``(II) the total amount of value-based incentive
payments under this paragraph to all hospitals in such
fiscal year is equal to the total amount available for
value-based incentive payments for such fiscal year
under paragraph (7)(A), as estimated by the Secretary.
``(7) Funding for value-based incentive payments.--
``(A) Amount.--The total amount available for value-based
incentive payments under paragraph (6) for all hospitals for a
fiscal year shall be equal to the total amount of reduced
payments for all hospitals under subparagraph (B) for such
fiscal year, as estimated by the Secretary.
``(B) Adjustment to payments.--
``(i) In general.--The Secretary shall reduce the base
operating DRG payment amount (as defined in subparagraph
(D)) for a hospital for each discharge in a fiscal year
(beginning with fiscal year 2013) by an amount equal to the
applicable percent (as defined in subparagraph (C)) of the
base operating DRG payment amount for the discharge for the
hospital for such fiscal year. The Secretary shall make
such reductions for all hospitals in the fiscal year
involved, regardless of whether or not the hospital has
been determined by the Secretary to have earned a value-
based incentive payment under paragraph (6) for such fiscal
``(ii) No effect on other payments.--Payments described
in items (aa) and (bb) of subparagraph (D)(i)(II) for a
hospital shall be determined as if this subsection had not
been enacted.
``(C) Applicable percent defined.--For purposes of
subparagraph (B), the term `applicable percent' means--
``(i) with respect to fiscal year 2013, 1.0 percent;
``(ii) with respect to fiscal year 2014, 1.25 percent;
``(iii) with respect to fiscal year 2015, 1.5 percent;
``(iv) with respect to fiscal year 2016, 1.75 percent;
``(v) with respect to fiscal year 2017 and succeeding
fiscal years, 2 percent.
``(D) Base operating drg payment amount defined.--
in this subsection, the term `base operating DRG payment
amount' means, with respect to a hospital for a fiscal
year--
``(I) the payment amount that would otherwise be
made under subsection (d) (determined without regard to
subsection (q)) for a discharge if this subsection did
not apply; reduced by
``(II) any portion of such payment amount that is
attributable to--
``(aa) payments under paragraphs (5)(A),
(5)(B), (5)(F), and (12) of subsection (d); and
``(bb) such other payments under subsection (d)
determined appropriate by the Secretary.
``(ii) Special rules for certain hospitals.--
``(I) Sole community hospitals and medicare-
dependent, small rural hospitals.--In the case of a
medicare-dependent, small rural hospital (with respect
to discharges occurring during fiscal year 2012 and
2013) or a sole community hospital, in applying
subparagraph (A)(i), the payment amount that would
otherwise be made under subsection (d) shall be
determined without regard to subparagraphs (I) and (L)
of subsection (b)(3) and subparagraphs (D) and (G) of
subsection (d)(5).
``(II) Hospitals paid under section 1814.--In the
case of a hospital that is paid under section
1814(b)(3), the term `base operating DRG payment
amount' means the payment amount under such section.
``(8) Announcement of net result of adjustments.--Under the
Program, the Secretary shall, not later than 60 days prior to the
fiscal year involved, inform each hospital of the adjustments to
payments to the hospital for discharges occurring in such fiscal
year under paragraphs (6) and (7)(B)(i).
``(9) No effect in subsequent fiscal years.--The value-based
incentive payment under paragraph (6) and the payment reduction
under paragraph (7)(B)(i) shall each apply only with respect to the
fiscal year involved, and the Secretary shall not take into account
such value-based incentive payment or payment reduction in making
payments to a hospital under this section in a subsequent fiscal
``(10) Public reporting.--
``(A) Hospital specific information.--
``(i) In general.--The Secretary shall make information
available to the public regarding the performance of
individual hospitals under the Program, including--
``(I) the performance of the hospital with respect
to each measure that applies to the hospital;
``(II) the performance of the hospital with respect
to each condition or procedure; and
``(III) the hospital performance score assessing
the total performance of the hospital.
``(ii) Opportunity to review and submit corrections.--
The Secretary shall ensure that a hospital has the
opportunity to review, and submit corrections for, the
information to be made public with respect to the hospital
under clause (i) prior to such information being made
``(iii) Website.--Such information shall be posted on
the Hospital Compare Internet website in an easily
understandable format.
``(B) Aggregate information.--The Secretary shall
periodically post on the Hospital Compare Internet website
aggregate information on the Program, including--
``(i) the number of hospitals receiving value-based
incentive payments under paragraph (6) and the range and
total amount of such value-based incentive payments; and
``(ii) the number of hospitals receiving less than the
maximum value-based incentive payment available to the
hospital for the fiscal year involved and the range and
amount of such payments.
``(11) Implementation.--
``(A) Appeals.--The Secretary shall establish a process by
which hospitals may appeal the calculation of a hospital's
performance assessment with respect to the performance
standards established under paragraph (3)(A) and the hospital
performance score under paragraph (5). The Secretary shall
ensure that such process provides for resolution of such
appeals in a timely manner.
``(B) Limitation on review.--Except as provided in
subparagraph (A), there shall be no administrative or judicial
review under section 1869, section 1878, or otherwise of the
``(i) The methodology used to determine the amount of
the value-based incentive payment under paragraph (6) and
the determination of such amount.
``(ii) The determination of the amount of funding
available for such value-based incentive payments under
paragraph (7)(A) and the payment reduction under paragraph
``(iii) The establishment of the performance standards
under paragraph (3) and the performance period under
``(iv) The measures specified under subsection
(b)(3)(B)(viii) and the measures selected under paragraph
``(v) The methodology developed under paragraph (5)
that is used to calculate hospital performance scores and
the calculation of such scores.
``(vi) The validation methodology specified in
subsection (b)(3)(B)(viii)(XI).
``(C) Consultation with small hospitals.--The Secretary
shall consult with small rural and urban hospitals on the
application of the Program to such hospitals.
``(12) Promulgation of regulations.--The Secretary shall
promulgate regulations to carry out the Program, including the
selection of measures under paragraph (2), the methodology
developed under paragraph (5) that is used to calculate hospital
performance scores, and the methodology used to determine the
amount of value-based incentive payments under paragraph (6).''.
(2) Amendments for reporting of hospital quality information.--
Section 1886(b)(3)(B)(viii) of the Social Security Act (42 U.S.C.
1395ww(b)(3)(B)(viii)) is amended--
(A) in subclause (II), by adding at the end the following
sentence: ``The Secretary may require hospitals to submit data
on measures that are not used for the determination of value-
based incentive payments under subsection (o).'';
(B) in subclause (V), by striking ``beginning with fiscal
year 2008'' and inserting ``for fiscal years 2008 through
2012'';
(C) in subclause (VII), in the first sentence, by striking
``data submitted'' and inserting ``information regarding
measures submitted''; and
(D) by adding at the end the following new subclauses:
``(VIII) Effective for payments beginning with fiscal year 2013,
with respect to quality measures for outcomes of care, the Secretary
shall provide for such risk adjustment as the Secretary determines to
be appropriate to maintain incentives for hospitals to treat patients
with severe illnesses or conditions.
``(IX)(aa) Subject to item (bb), effective for payments beginning
with fiscal year 2013, each measure specified by the Secretary under
this clause shall be endorsed by the entity with a contract under
section 1890(a).
``(bb) In the case of a specified area or medical topic determined
appropriate by the Secretary for which a feasible and practical measure
has not been endorsed by the entity with a contract under section
1890(a), the Secretary may specify a measure that is not so endorsed as
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.
``(X) To the extent practicable, the Secretary shall, with input
from consensus organizations and other stakeholders, take steps to
ensure that the measures specified by the Secretary under this clause
are coordinated and aligned with quality measures applicable to--
``(aa) physicians under section 1848(k); and
``(bb) other providers of services and suppliers under this
title.
``(XI) The Secretary shall establish a process to validate measures
specified under this clause as appropriate. Such process shall include
the auditing of a number of randomly selected hospitals sufficient to
ensure validity of the reporting program under this clause as a whole
and shall provide a hospital with an opportunity to appeal the
validation of measures reported by such hospital.''.
(3) Website improvements.--Section 1886(b)(3)(B) of the Social
Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section
4102(b) of the HITECH Act (Public Law 111-5), is amended by adding
at the end the following new clause:
``(x)(I) The Secretary shall develop standard Internet website
reports tailored to meet the needs of various stakeholders such as
hospitals, patients, researchers, and policymakers. The Secretary shall
seek input from such stakeholders in determining the type of
information that is useful and the formats that best facilitate the use
of the information.
``(II) The Secretary shall modify the Hospital Compare Internet
website to make the use and navigation of that website readily
available to individuals accessing it.''.
(4) GAO study and report.--
(A) Study.--The Comptroller General of the United States
shall conduct a study on the performance of the hospital value-
based purchasing program established under section 1886(o) of
the Social Security Act, as added by paragraph (1). Such study
shall include an analysis of the impact of such program on--
(i) the quality of care furnished to Medicare
beneficiaries, including diverse Medicare beneficiary
populations (such as diverse in terms of race, ethnicity,
and socioeconomic status);
(ii) expenditures under the Medicare program, including
any reduced expenditures under Part A of title XVIII of
such Act that are attributable to the improvement in the
delivery of inpatient hospital services by reason of such
hospital value-based purchasing program;
(iii) the quality performance among safety net
hospitals and any barriers such hospitals face in meeting
the performance standards applicable under such hospital
value-based purchasing program; and
(iv) the quality performance among small rural and
small urban hospitals and any barriers such hospitals face
in meeting the performance standards applicable under such
hospital value-based purchasing program.
(B) Reports.--
(i) Interim report.--Not later than October 1, 2015,
the Comptroller General of the United States shall submit
to Congress an interim report containing the results of the
study conducted under subparagraph (A), together with
recommendations for such legislation and administrative
action as the Comptroller General determines appropriate.
(ii) Final report.--Not later than July 1, 2017, the
Comptroller General of the United States shall submit to
Congress a report containing the results of the study
conducted under subparagraph (A), together with
(5) HHS study and report.--
(A) Study.--The Secretary of Health and Human Services
shall include an analysis--
(i) of ways to improve the hospital value-based
purchasing program and ways to address any unintended
consequences that may occur as a result of such program;
(ii) of whether the hospital value-based purchasing
program resulted in lower spending under the Medicare
program under title XVIII of such Act or other financial
savings to hospitals;
(iii) the appropriateness of the Medicare program
sharing in any savings generated through the hospital
(iv) any other area determined appropriate by the
(B) Report.--Not later than January 1, 2016, the Secretary
of Health and Human Services shall submit to Congress a report
containing the results of the study conducted under
subparagraph (A), together with recommendations for such
legislation and administrative action as the Secretary
(b) Value-Based Purchasing Demonstration Programs.--
(1) Value-based purchasing demonstration program for inpatient
critical access hospitals.--
(A) Establishment.--
(i) In general.--Not later than 2 years after the date
of enactment of this Act, the Secretary of Health and Human
Services (in this subsection referred to as the
``Secretary'') shall establish a demonstration program
under which the Secretary establishes a value-based
purchasing program under the Medicare program under title
XVIII of the Social Security Act for critical access
hospitals (as defined in paragraph (1) of section 1861(mm)
of such Act (42 U.S.C. 1395x(mm))) with respect to
inpatient critical access hospital services (as defined in
paragraph (2) of such section) in order to test innovative
methods of measuring and rewarding quality and efficient
health care furnished by such hospitals.
(ii) Duration.--The demonstration program under this
paragraph shall be conducted for a 3-year period.
(iii) Sites.--The Secretary shall conduct the
demonstration program under this paragraph at an
appropriate number (as determined by the Secretary) of
critical access hospitals. The Secretary shall ensure that
such hospitals are representative of the spectrum of such
hospitals that participate in the Medicare program.
(B) Waiver authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social Security Act
as may be necessary to carry out the demonstration program
under this paragraph.
(C) Budget neutrality requirement.--In conducting the
demonstration program under this section, the Secretary shall
ensure that the aggregate payments made by the Secretary do not
exceed the amount which the Secretary would have paid if the
demonstration program under this section was not implemented.
(D) Report.--Not later than 18 months after the completion
of the demonstration program under this paragraph, the
Secretary shall submit to Congress a report on the
demonstration program together with--
(i) recommendations on the establishment of a permanent
value-based purchasing program under the Medicare program
for critical access hospitals with respect to inpatient
critical access hospital services; and
(ii) recommendations for such other legislation and
administrative action as the Secretary determines
(2) Value-based purchasing demonstration program for hospitals
excluded from hospital value-based purchasing program as a result
of insufficient numbers of measures and cases.--
of enactment of this Act, the Secretary shall establish a
demonstration program under which the Secretary establishes
a value-based purchasing program under the Medicare program
under title XVIII of the Social Security Act for applicable
hospitals (as defined in clause (ii)) with respect to
inpatient hospital services (as defined in section 1861(b)
of the Social Security Act (42 U.S.C. 1395x(b))) in order
to test innovative methods of measuring and rewarding
quality and efficient health care furnished by such
(ii) Applicable hospital defined.--For purposes of this
paragraph, the term ``applicable hospital'' means a
hospital described in subclause (III) or (IV) of section
1886(o)(1)(C)(ii) of the Social Security Act, as added by
subsection (a)(1).
(iii) Duration.--The demonstration program under this
(iv) Sites.--The Secretary shall conduct the
applicable hospitals. The Secretary shall ensure that such
hospitals are representative of the spectrum of such
for applicable hospitals with respect to inpatient hospital
services; and
(a) Extension.--Section 1848(m) of the Social Security Act (42
U.S.C. 1395w-4(m)) is amended--
(A) in subparagraph (A), in the matter preceding clause
(i), by striking ``2010'' and inserting ``2014''; and
(B) in subparagraph (B)--
(i) in clause (i), by striking ``and'' at the end;
(ii) in clause (ii), by striking the period at the end
and inserting a semicolon; and
(iii) by adding at the end the following new clauses:
``(iii) for 2011, 1.0 percent; and
``(iv) for 2012, 2013, and 2014, 0.5 percent.'';
(i), by inserting ``(or, for purposes of subsection (a)(8), for
the quality reporting period for the year)'' after ``reporting
period''; and
(B) in subparagraph (C)(i), by inserting ``, or, for
purposes of subsection (a)(8), for a quality reporting period
for the year'' after ``(a)(5), for a reporting period for a
year'';
(3) in paragraph (5)(E)(iv), by striking ``subsection
(a)(5)(A)'' and inserting ``paragraphs (5)(A) and (8)(A) of
subsection (a)''; and
(4) in paragraph (6)(C)--
(A) in clause (i)(II), by striking ``, 2009, 2010, and
2011'' and inserting ``and subsequent years''; and
(B) in clause (iii)--
(i) by inserting ``(a)(8)'' after ``(a)(5)''; and
(ii) by striking ``under subparagraph (D)(iii) of such
subsection'' and inserting ``under subsection
(a)(5)(D)(iii) or the quality reporting period under
subsection (a)(8)(D)(iii), respectively''.
(b) Incentive Payment Adjustment for Quality Reporting.--Section
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)) is amended by
adding at the end the following new paragraph:
``(8) Incentives for quality reporting.--
``(A) Adjustment.--
``(i) In general.--With respect to covered professional
services furnished by an eligible professional during 2015
or any subsequent year, if the eligible professional does
not satisfactorily submit data on quality measures for
covered professional services for the quality reporting
period for the year (as determined under subsection
(m)(3)(A)), the fee schedule amount for such services
furnished by such professional during the year (including
the fee schedule amount for purposes of determining a
payment based on such amount) shall be equal to the
applicable percent of the fee schedule amount that would
otherwise apply to such services under this subsection
(determined after application of paragraphs (3), (5), and
(7), but without regard to this paragraph).
``(ii) Applicable percent.--For purposes of clause (i),
the term `applicable percent' means--
``(I) for 2015, 98.5 percent; and
``(II) for 2016 and each subsequent year, 98
``(i) Physician reporting system rules.--Paragraphs
(5), (6), and (8) of subsection (k) shall apply for
purposes of this paragraph in the same manner as they apply
for purposes of such subsection.
``(ii) Incentive payment validation rules.--Clauses
(ii) and (iii) of subsection (m)(5)(D) shall apply for
purposes of this paragraph in a similar manner as they
apply for purposes of such subsection.
``(C) Definitions.--For purposes of this paragraph:
``(i) Eligible professional; covered professional
services.--The terms `eligible professional' and `covered
professional services' have the meanings given such terms
in subsection (k)(3).
``(ii) Physician reporting system.--The term `physician
reporting system' means the system established under
subsection (k).
``(iii) Quality reporting period.--The term `quality
reporting period' means, with respect to a year, a period
specified by the Secretary.''.
(c) Maintenance of Certification Programs.--
(1) In general.--Section 1848(k)(4) of the Social Security Act
(42 U.S.C. 1395w-4(k)(4)) is amended by inserting ``or through a
Maintenance of Certification program operated by a specialty body
of the American Board of Medical Specialties that meets the
criteria for such a registry'' after ``Database)''.
apply for years after 2010.
(d) Integration of Physician Quality Reporting and EHR Reporting.--
Section 1848(m) of the Social Security Act (42 U.S.C. 1395w-4(m)) is
amended by adding at the end the following new paragraph:
``(7) Integration of physician quality reporting and ehr
reporting.--Not later than January 1, 2012, the Secretary shall
develop a plan to integrate reporting on quality measures under
this subsection with reporting requirements under subsection (o)
relating to the meaningful use of electronic health records. Such
integration shall consist of the following:
``(A) The selection of measures, the reporting of which
would both demonstrate--
``(i) meaningful use of an electronic health record for
purposes of subsection (o); and
``(ii) quality of care furnished to an individual.
``(B) Such other activities as specified by the
Secretary.''.
(e) Feedback.--Section 1848(m)(5) of the Social Security Act (42
U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following new
``(H) Feedback.--The Secretary shall provide timely
feedback to eligible professionals on the performance of the
eligible professional with respect to satisfactorily submitting
data on quality measures under this subsection.''.
(f) Appeals.--Such section is further amended--
(1) in subparagraph (E), by striking ``There shall'' and
inserting ``Except as provided in subparagraph (I), there shall'';
``(I) Informal appeals process.--The Secretary shall, by
not later than January 1, 2011, establish and have in place an
informal process for eligible professionals to seek a review of
the determination that an eligible professional did not
satisfactorily submit data on quality measures under this
subsection.''.
(a) In General.--Section 1848(n) of the Social Security Act (42
U.S.C. 1395w-4(n)) is amended--
(A) in subparagraph (A)--
(i) by striking ``general.--The Secretary'' and
inserting ``general.--
``(i) Establishment.--The Secretary'';
(ii) in clause (i), as added by clause (i), by striking
``the `Program')'' and all that follows through the period
at the end of the second sentence and inserting ``the
`Program').''; and
``(ii) Reports on resources.--The Secretary shall use
claims data under this title (and may use other data) to
provide confidential reports to physicians (and, as
determined appropriate by the Secretary, to groups of
physicians) that measure the resources involved in
furnishing care to individuals under this title.
``(iii) Inclusion of certain information.--If
determined appropriate by the Secretary, the Secretary may
include information on the quality of care furnished to
individuals under this title by the physician (or group of
physicians) in such reports.''; and
(B) in subparagraph (B), by striking ``subparagraph (A)''
and inserting ``subparagraph (A)(ii)'';
(A) in the heading, by inserting ``initial'' after
``focus''; and
(B) in the matter preceding subparagraph (A), by inserting
``initial'' after ``focus the'';
(3) in paragraph (6), by adding at the end the following new
sentence: ``For adjustments for reports on utilization under
paragraph (9), see subparagraph (D) of such paragraph.''; and
``(9) Reports on utilization.--
``(A) Development of episode grouper.--
``(i) In general.--The Secretary shall develop an
episode grouper that combines separate but clinically
related items and services into an episode of care for an
individual, as appropriate.
``(ii) Timeline for development.--The episode grouper
described in subparagraph (A) shall be developed by not
later than January 1, 2012.
``(iii) Public availability.--The Secretary shall make
the details of the episode grouper described in
subparagraph (A) available to the public.
``(iv) Endorsement.--The Secretary shall seek
endorsement of the episode grouper described in
subparagraph (A) by the entity with a contract under
``(B) Reports on utilization.--Effective beginning with
2012, the Secretary shall provide reports to physicians that
compare, as determined appropriate by the Secretary, patterns
of resource use of the individual physician to such patterns of
other physicians.
``(C) Analysis of data.--The Secretary shall, for purposes
of preparing reports under this paragraph, establish
methodologies as appropriate, such as to--
``(i) attribute episodes of care, in whole or in part,
to physicians;
``(ii) identify appropriate physicians for purposes of
comparison under subparagraph (B); and
``(iii) aggregate episodes of care attributed to a
physician under clause (i) into a composite measure per
``(D) Data adjustment.--In preparing reports under this
paragraph, the Secretary shall make appropriate adjustments,
including adjustments--
``(i) to account for differences in socioeconomic and
demographic characteristics, ethnicity, and health status
of individuals (such as to recognize that less healthy
individuals may require more intensive interventions); and
``(ii) to eliminate the effect of geographic
adjustments in payment rates (as described in subsection
(e)).
``(E) Public availability of methodology.--The Secretary
shall make available to the public--
``(i) the methodologies established under subparagraph
(C);
``(ii) information regarding any adjustments made to
data under subparagraph (D); and
``(iii) aggregate reports with respect to physicians.
``(F) Definition of physician.--In this paragraph:
``(i) In general.--The term `physician' has the meaning
given that term in section 1861(r)(1).
``(ii) Treatment of groups.--Such term includes, as the
Secretary determines appropriate, a group of physicians.
``(G) Limitations on review.--There shall be no
administrative or judicial review under section 1869, section
1878, or otherwise of the establishment of the methodology
under subparagraph (C), including the determination of an
episode of care under such methodology.
``(10) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the Program with the
value-based payment modifier established under subsection (p) and,
as the Secretary determines appropriate, other similar provisions
of this title.''.
(b) Conforming Amendment.--Section 1890(b) of the Social Security
Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the
following new paragraph:
``(6) Review and endorsement of episode grouper under the
physician feedback program.--The entity shall provide for the
review and, as appropriate, the endorsement of the episode grouper
developed by the Secretary under section 1848(n)(9)(A). Such review
shall be conducted on an expedited basis.''.
(a) Long-term Care Hospitals.--Section 1886(m) of the Social
Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is
``(5) Quality reporting.--
``(A) Reduction in update for failure to report.--
``(i) In general.--Under the system described in
paragraph (1), for rate year 2014 and each subsequent rate
year, in the case of a long-term care hospital that does
not submit data to the Secretary in accordance with
subparagraph (C) with respect to such a rate year, any
annual update to a standard Federal rate for discharges for
the hospital during the rate year, and after application of
paragraph (3), shall be reduced by 2 percentage points.
``(ii) Special rule.--The application of this
subparagraph may result in such annual update being less
than 0.0 for a rate year, and may result in payment rates
under the system described in paragraph (1) for a rate year
being less than such payment rates for the preceding rate
``(B) Noncumulative application.--Any reduction under
subparagraph (A) shall apply only with respect to the rate year
involved and the Secretary shall not take into account such
reduction in computing the payment amount under the system
described in paragraph (1) for a subsequent rate year.
``(C) Submission of quality data.--For rate year 2014 and
each subsequent rate year, each long-term care hospital shall
submit to the Secretary data on quality measures specified
under subparagraph (D). Such data shall be submitted in a form
and manner, and at a time, specified by the Secretary for
purposes of this subparagraph.
``(D) Quality measures.--
``(i) In general.--Subject to clause (ii), any measure
specified by the Secretary under this subparagraph must
have been endorsed by the entity with a contract under
``(ii) Exception.--In the case of a specified area or
medical topic determined appropriate by the Secretary for
which a feasible and practical measure has not been
endorsed by the entity with a contract under section
1890(a), the Secretary may specify a measure that is not so
endorsed as long as due consideration is given to measures
that have been endorsed or adopted by a consensus
organization identified by the Secretary.
``(iii) Time frame.--Not later than October 1, 2012,
the Secretary shall publish the measures selected under
this subparagraph that will be applicable with respect to
rate year 2014.
``(E) Public availability of data submitted.--The Secretary
shall establish procedures for making data submitted under
subparagraph (C) available to the public. Such procedures shall
ensure that a long-term care hospital has the opportunity to
review the data that is to be made public with respect to the
hospital prior to such data being made public. The Secretary
shall report quality measures that relate to services furnished
in inpatient settings in long-term care hospitals on the
Internet website of the Centers for Medicare & Medicaid
Services.''.
(b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the
Social Security Act (42 U.S.C. 1395ww(j)) is amended--
``(i) In general.--For purposes of fiscal year 2014 and
each subsequent fiscal year, in the case of a
rehabilitation facility that does not submit data to the
Secretary in accordance with subparagraph (C) with respect
to such a fiscal year, after determining the increase
factor described in paragraph (3)(C), and after application
of paragraph (3)(D), the Secretary shall reduce such
increase factor for payments for discharges occurring
during such fiscal year by 2 percentage points.
subparagraph may result in the increase factor described in
paragraph (3)(C) being less than 0.0 for a fiscal year, and
may result in payment rates under this subsection for a
fiscal year being less than such payment rates for the
preceding fiscal year.
subparagraph (A) shall apply only with respect to the fiscal
year involved and the Secretary shall not take into account
such reduction in computing the payment amount under this
subsection for a subsequent fiscal year.
``(C) Submission of quality data.--For fiscal year 2014 and
each subsequent rate year, each rehabilitation facility shall
ensure that a rehabilitation facility has the opportunity to
facility prior to such data being made public. The Secretary
in inpatient settings in rehabilitation facilities on the
(c) Hospice Programs.--Section 1814(i) of the Social Security Act
(42 U.S.C. 1395f(i)) is amended--
each subsequent fiscal year, in the case of a hospice
program that does not submit data to the Secretary in
accordance with subparagraph (C) with respect to such a
fiscal year, after determining the market basket percentage
increase under paragraph (1)(C)(ii)(VII) or paragraph
(1)(C)(iii), as applicable, and after application of
paragraph (1)(C)(iv), with respect to the fiscal year, the
Secretary shall reduce such market basket percentage
increase by 2 percentage points.
subparagraph may result in the market basket percentage
(1)(C)(iii), as applicable, being less than 0.0 for a
fiscal year, and may result in payment rates under this
subsection for a fiscal year being less than such payment
rates for the preceding fiscal year.
each subsequent fiscal year, each hospice program shall submit
to the Secretary data on quality measures specified under
subparagraph (D). Such data shall be submitted in a form and
manner, and at a time, specified by the Secretary for purposes
of this subparagraph.
ensure that a hospice program has the opportunity to review the
data that is to be made public with respect to the hospice
program prior to such data being made public. The Secretary
shall report quality measures that relate to hospice care
provided by hospice programs on the Internet website of the
Centers for Medicare & Medicaid Services.''.
Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is
(1) in subsection (a)(1)--
(A) in subparagraph (U), by striking ``and'' at the end;
(B) in subparagraph (V), by striking the period at the end
and inserting ``, and''; and
(C) by adding at the end the following new subparagraph:
``(W) in the case of a hospital described in section
1886(d)(1)(B)(v), to report quality data to the Secretary in
accordance with subsection (k).''; and
``(k) Quality Reporting by Cancer Hospitals.--
``(1) In general.--For purposes of fiscal year 2014 and each
subsequent fiscal year, a hospital described in section
1886(d)(1)(B)(v) shall submit data to the Secretary in accordance
with paragraph (2) with respect to such a fiscal year.
``(2) Submission of quality data.--For fiscal year 2014 and
each subsequent fiscal year, each hospital described in such
section shall submit to the Secretary data on quality measures
specified under paragraph (3). Such data shall be submitted in a
form and manner, and at a time, specified by the Secretary for
``(3) Quality measures.--
``(A) In general.--Subject to subparagraph (B), any measure
specified by the Secretary under this paragraph must have been
endorsed by the entity with a contract under section 1890(a).
``(B) Exception.--In the case of a specified area or
medical topic determined appropriate by the Secretary for which
a feasible and practical measure has not been endorsed by the
entity with a contract under section 1890(a), the Secretary may
specify a measure that is not so endorsed as long as due
consideration is given to measures that have been endorsed or
adopted by a consensus organization identified by the
``(C) Time frame.--Not later than October 1, 2012, the
Secretary shall publish the measures selected under this
paragraph that will be applicable with respect to fiscal year
``(4) Public availability of data submitted.--The Secretary
paragraph (4) available to the public. Such procedures shall ensure
that a hospital described in section 1886(d)(1)(B)(v) has the
opportunity to review the data that is to be made public with
respect to the hospital prior to such data being made public. The
Secretary shall report quality measures of process, structure,
outcome, patients' perspective on care, efficiency, and costs of
care that relate to services furnished in such hospitals on the
(a) Skilled Nursing Facilities.--
this section referred to as the ``Secretary'') shall develop a plan
to implement a value-based purchasing program for payments under
the Medicare program under title XVIII of the Social Security Act
for skilled nursing facilities (as defined in section 1819(a) of
such Act (42 U.S.C. 1395i-3(a))).
(2) Details.--In developing the plan under paragraph (1), the
Secretary shall consider the following issues:
(A) The ongoing development, selection, and modification
process for measures (including under section 1890 of the
Social Security Act (42 U.S.C. 1395aaa) and section 1890A such
Act, as added by section 3014), to the extent feasible and
practicable, of all dimensions of quality and efficiency in
skilled nursing facilities.
(i) In general.--Subject to clause (ii), any measure
specified by the Secretary under subparagraph (A)(iii) must
(ii) Exception.--In the case of a specified area or
(B) The reporting, collection, and validation of quality
(C) The structure of value-based payment adjustments,
including the determination of thresholds or improvements in
quality that would substantiate a payment adjustment, the size
of such payments, and the sources of funding for the value-
based bonus payments.
(D) Methods for the public disclosure of information on the
performance of skilled nursing facilities.
(E) Any other issues determined appropriate by the
(3) Consultation.--In developing the plan under paragraph (1),
the Secretary shall--
(A) consult with relevant affected parties; and
(B) consider experience with such demonstrations that the
Secretary determines are relevant to the value-based purchasing
program described in paragraph (1).
(4) Report to congress.--Not later than October 1, 2011, the
Secretary shall submit to Congress a report containing the plan
(b) Home Health Agencies.--
for home health agencies (as defined in section 1861(o) of such Act
(42 U.S.C. 1395x(o))).
home health agencies.
performance of home health agencies.
Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
(1) in subsection (b)(1), by inserting ``subject to subsection
(p),'' after ``1998,''; and
``(p) Establishment of Value-based Payment Modifier.--
``(1) In general.--The Secretary shall establish a payment
modifier that provides for differential payment to a physician or a
group of physicians under the fee schedule established under
subsection (b) based upon the quality of care furnished compared to
cost (as determined under paragraphs (2) and (3), respectively)
during a performance period. Such payment modifier shall be
separate from the geographic adjustment factors established under
subsection (e).
``(2) Quality.--
``(A) In general.--For purposes of paragraph (1), quality
of care shall be evaluated, to the extent practicable, based on
a composite of measures of the quality of care furnished (as
established by the Secretary under subparagraph (B)).
``(B) Measures.--
``(i) The Secretary shall establish appropriate
measures of the quality of care furnished by a physician or
group of physicians to individuals enrolled under this
part, such as measures that reflect health outcomes. Such
measures shall be risk adjusted as determined appropriate
``(ii) The Secretary shall seek endorsement of the
measures established under this subparagraph by the entity
with a contract under section 1890(a).
``(3) Costs.--For purposes of paragraph (1), costs shall be
evaluated, to the extent practicable, based on a composite of
appropriate measures of costs established by the Secretary (such as
the composite measure under the methodology established under
subsection (n)(9)(C)(iii)) that eliminate the effect of geographic
adjustments in payment rates (as described in subsection (e)), and
take into account risk factors (such as socioeconomic and
demographic characteristics, ethnicity, and health status of
individuals (such as to recognize that less healthy individuals may
require more intensive interventions) and other factors determined
``(A) Publication of measures, dates of implementation,
performance period.--Not later than January 1, 2012, the
Secretary shall publish the following:
``(i) The measures of quality of care and costs
established under paragraphs (2) and (3), respectively.
``(ii) The dates for implementation of the payment
modifier (as determined under subparagraph (B)).
``(iii) The initial performance period (as specified
under subparagraph (B)(ii)).
``(B) Deadlines for implementation.--
``(i) Initial implementation.--Subject to the preceding
provisions of this subparagraph, the Secretary shall begin
implementing the payment modifier established under this
subsection through the rulemaking process during 2013 for
the physician fee schedule established under subsection
(b).
``(ii) Initial performance period.--
``(I) In general.--The Secretary shall specify an
initial performance period for application of the
payment modifier established under this subsection with
respect to 2015.
``(II) Provision of information during initial
performance period.--During the initial performance
period, the Secretary shall, to the extent practicable,
provide information to physicians and groups of
physicians about the quality of care furnished by the
physician or group of physicians to individuals
enrolled under this part compared to cost (as
determined under paragraphs (2) and (3), respectively)
with respect to the performance period.
``(iii) Application.--The Secretary shall apply the
payment modifier established under this subsection for
items and services furnished--
``(I) beginning on January 1, 2015, with respect to
specific physicians and groups of physicians the
Secretary determines appropriate; and
``(II) beginning not later than January 1, 2017,
with respect to all physicians and groups of
physicians.
``(C) Budget neutrality.--The payment modifier established
under this subsection shall be implemented in a budget neutral
``(5) Systems-based care.--The Secretary shall, as appropriate,
apply the payment modifier established under this subsection in a
manner that promotes systems-based care.
``(6) Consideration of special circumstances of certain
providers.--In applying the payment modifier under this subsection,
the Secretary shall, as appropriate, take into account the special
circumstances of physicians or groups of physicians in rural areas
and other underserved communities.
``(7) Application.--For purposes of the initial application of
the payment modifier established under this subsection during the
period beginning on January 1, 2015, and ending on December 31,
2016, the term `physician' has the meaning given such term in
section 1861(r). On or after January 1, 2017, the Secretary may
apply this subsection to eligible professionals (as defined in
subsection (k)(3)(B)) as the Secretary determines appropriate.
``(8) Definitions.--For purposes of this subsection:
``(A) Costs.--The term `costs' means expenditures per
individual as determined appropriate by the Secretary. In
making the determination under the preceding sentence, the
Secretary may take into account the amount of growth in
expenditures per individual for a physician compared to the
amount of such growth for other physicians.
``(B) Performance period.--The term `performance period'
means a period specified by the Secretary.
``(9) Coordination with other value-based purchasing reforms.--
The Secretary shall coordinate the value-based payment modifier
established under this subsection with the Physician Feedback
Program under subsection (n) and, as the Secretary determines
appropriate, other similar provisions of this title.
``(10) Limitations on review.--There shall be no administrative
or judicial review under section 1869, section 1878, or otherwise
``(A) the establishment of the value-based payment modifier
under this subsection;
``(B) the evaluation of quality of care under paragraph
(2), including the establishment of appropriate measures of the
quality of care under paragraph (2)(B);
``(C) the evaluation of costs under paragraph (3),
including the establishment of appropriate measures of costs
under such paragraph;
``(D) the dates for implementation of the value-based
payment modifier;
``(E) the specification of the initial performance period
and any other performance period under paragraphs (4)(B)(ii)
and (8)(B), respectively;
``(F) the application of the value-based payment modifier
under paragraph (7); and
``(G) the determination of costs under paragraph (8)(A).''.
1395ww), as amended by section 3001, is amended by adding at the end
the following new subsection:
``(p) Adjustment to Hospital Payments for Hospital Acquired
Conditions.--
``(1) In general.--In order to provide an incentive for
applicable hospitals to reduce hospital acquired conditions under
this title, with respect to discharges from an applicable hospital
occurring during fiscal year 2015 or a subsequent fiscal year, the
amount of payment under this section or section 1814(b)(3), as
applicable, for such discharges during the fiscal year shall be
equal to 99 percent of the amount of payment that would otherwise
apply to such discharges under this section or section 1814(b)(3)
(determined after the application of subsections (o) and (q) and
section 1814(l)(4) but without regard to this subsection).
``(2) Applicable hospitals.--
``(A) In general.--For purposes of this subsection, the
term `applicable hospital' means a subsection (d) hospital that
meets the criteria described in subparagraph (B).
``(B) Criteria described.--
``(i) In general.--The criteria described in this
subparagraph, with respect to a subsection (d) hospital, is
that the subsection (d) hospital is in the top quartile of
all subsection (d) hospitals, relative to the national
average, of hospital acquired conditions during the
applicable period, as determined by the Secretary.
``(ii) Risk adjustment.--In carrying out clause (i),
the Secretary shall establish and apply an appropriate risk
adjustment methodology.
``(C) Exemption.--In the case of a hospital that is paid
under section 1814(b)(3), the Secretary may exempt such
hospital from the application of this subsection if the State
which is paid under such section submits an annual report to
the Secretary describing how a similar program in the State for
a participating hospital or hospitals achieves or surpasses the
measured results in terms of patient health outcomes and cost
savings established under this subsection.
``(3) Hospital acquired conditions.--For purposes of this
subsection, the term `hospital acquired condition' means a
condition identified for purposes of subsection (d)(4)(D)(iv) and
any other condition determined appropriate by the Secretary that an
individual acquires during a stay in an applicable hospital, as
determined by the Secretary.
``(4) Applicable period.--In this subsection, the term
`applicable period' means, with respect to a fiscal year, a period
specified by the Secretary.
``(5) Reporting to hospitals.--Prior to fiscal year 2015 and
each subsequent fiscal year, the Secretary shall provide
confidential reports to applicable hospitals with respect to
hospital acquired conditions of the applicable hospital during the
applicable period.
``(6) Reporting hospital specific information.--
``(A) In general.--The Secretary shall make information
available to the public regarding hospital acquired conditions
of each applicable hospital.
``(B) Opportunity to review and submit corrections.--The
Secretary shall ensure that an applicable hospital has the
under subparagraph (A) prior to such information being made
``(C) Website.--Such information shall be posted on the
Hospital Compare Internet website in an easily understandable
``(7) Limitations on review.--There shall be no administrative
of the following:
``(A) The criteria described in paragraph (2)(A).
``(B) The specification of hospital acquired conditions
``(C) The specification of the applicable period under
``(D) The provision of reports to applicable hospitals
under paragraph (5) and the information made available to the
public under paragraph (6).''.
(b) Study and Report on Expansion of Healthcare Acquired Conditions
Policy to Other Providers.--
(1) Study.--The Secretary of Health and Human Services shall
conduct a study on expanding the healthcare acquired conditions
policy under subsection (d)(4)(D) of section 1886 of the Social
Security Act (42 U.S.C. 1395ww) to payments made to other
facilities under the Medicare program under title XVIII of the
Social Security Act, including such payments made to inpatient
rehabilitation facilities, long-term care hospitals (as described
in subsection(d)(1)(B)(iv) of such section), hospital outpatient
departments, and other hospitals excluded from the inpatient
prospective payment system under such section, skilled nursing
facilities, ambulatory surgical centers, and health clinics. Such
study shall include an analysis of how such policies could impact
quality of patient care, patient safety, and spending under the
Medicare program.
(2) Report.--Not later than January 1, 2012, the Secretary
shall submit to Congress a report containing the results of the
study conducted under paragraph (1), together with recommendations
for such legislation and administrative action as the Secretary
Title III of the Public Health Service Act (42 U.S.C. 241 et seq.)
is amended by adding at the end the following:
``PART S--HEALTH CARE QUALITY PROGRAMS
``Subpart I--National Strategy for Quality Improvement in Health Care
``SEC. 399HH. NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN HEALTH CARE.
``(a) Establishment of National Strategy and Priorities.--
``(1) National strategy.--The Secretary, through a transparent
collaborative process, shall establish a national strategy to
improve the delivery of health care services, patient health
outcomes, and population health.
``(2) Identification of priorities.--
``(A) In general.--The Secretary shall identify national
priorities for improvement in developing the strategy under
``(B) Requirements.--The Secretary shall ensure that
priorities identified under subparagraph (A) will--
``(i) have the greatest potential for improving the
health outcomes, efficiency, and patient-centeredness of
health care for all populations, including children and
vulnerable populations;
``(ii) identify areas in the delivery of health care
services that have the potential for rapid improvement in
the quality and efficiency of patient care;
``(iii) address gaps in quality, efficiency,
comparative effectiveness information, and health outcomes
measures and data aggregation techniques;
``(iv) improve Federal payment policy to emphasize
quality and efficiency;
``(v) enhance the use of health care data to improve
quality, efficiency, transparency, and outcomes;
``(vi) address the health care provided to patients
with high-cost chronic diseases;
``(vii) improve research and dissemination of
strategies and best practices to improve patient safety and
reduce medical errors, preventable admissions and
readmissions, and health care-associated infections;
``(viii) reduce health disparities across health
disparity populations (as defined in section 485E) and
geographic areas; and
``(ix) address other areas as determined appropriate by
``(C) Considerations.--In identifying priorities under
subparagraph (A), the Secretary shall take into consideration
the recommendations submitted by the entity with a contract
under section 1890(a) of the Social Security Act and other
stakeholders.
``(D) Coordination with state agencies.--The Secretary
shall collaborate, coordinate, and consult with State agencies
responsible for administering the Medicaid program under title
XIX of the Social Security Act and the Children's Health
Insurance Program under title XXI of such Act with respect to
developing and disseminating strategies, goals, models, and
timetables that are consistent with the national priorities
identified under subparagraph (A).
``(b) Strategic Plan.--
``(1) In general.--The national strategy shall include a
comprehensive strategic plan to achieve the priorities described in
``(2) Requirements.--The strategic plan shall include
provisions for addressing, at a minimum, the following:
``(A) Coordination among agencies within the Department,
which shall include steps to minimize duplication of efforts
and utilization of common quality measures, where available.
Such common quality measures shall be measures identified by
the Secretary under section 1139A or 1139B of the Social
Security Act or endorsed under section 1890 of such Act.
``(B) Agency-specific strategic plans to achieve national
``(C) Establishment of annual benchmarks for each relevant
agency to achieve national priorities.
``(D) A process for regular reporting by the agencies to
the Secretary on the implementation of the strategic plan.
``(E) Strategies to align public and private payers with
regard to quality and patient safety efforts.
``(F) Incorporating quality improvement and measurement in
the strategic plan for health information technology required
by the American Recovery and Reinvestment Act of 2009 (Public
Law 111-5).
``(c) Periodic Update of National Strategy.--The Secretary shall
update the national strategy not less than annually. Any such update
shall include a review of short- and long-term goals.
``(d) Submission and Availability of National Strategy and
Updates.--
``(1) Deadline for initial submission of national strategy.--
Not later than January 1, 2011, the Secretary shall submit to the
relevant committees of Congress the national strategy described in
``(2) Updates.--
``(A) In general.--The Secretary shall submit to the
relevant committees of Congress an annual update to the
strategy described in paragraph (1).
``(B) Information submitted.--Each update submitted under
subparagraph (A) shall include--
``(i) a review of the short- and long-term goals of the
national strategy and any gaps in such strategy;
``(ii) an analysis of the progress, or lack of
progress, in meeting such goals and any barriers to such
progress;
``(iii) the information reported under section 1139A of
the Social Security Act, consistent with the reporting
requirements of such section; and
``(iv) in the case of an update required to be
submitted on or after January 1, 2014, the information
reported under section 1139B(b)(4) of the Social Security
Act, consistent with the reporting requirements of such
``(C) Satisfaction of other reporting requirements.--
Compliance with the requirements of clauses (iii) and (iv) of
subparagraph (B) shall satisfy the reporting requirements under
sections 1139A(a)(6) and 1139B(b)(4), respectively, of the
``(e) Health Care Quality Internet Website.--Not later than January
1, 2011, the Secretary shall create an Internet website to make public
information regarding--
``(1) the national priorities for health care quality
improvement established under subsection (a)(2);
``(2) the agency-specific strategic plans for health care
quality described in subsection (b)(2)(B); and
``(3) other information, as the Secretary determines to be
appropriate.''.
(a) In General.--The President shall convene a working group to be
known as the Interagency Working Group on Health Care Quality (referred
to in this section as the ``Working Group'').
(b) Goals.--The goals of the Working Group shall be to achieve the
(1) Collaboration, cooperation, and consultation between
Federal departments and agencies with respect to developing and
disseminating strategies, goals, models, and timetables that are
consistent with the national priorities identified under section
399HH(a)(2) of the Public Health Service Act (as added by section
(2) Avoidance of inefficient duplication of quality improvement
efforts and resources, where practicable, and a streamlined process
for quality reporting and compliance requirements.
(3) Assess alignment of quality efforts in the public sector
with private sector initiatives.
(c) Composition.--
(1) In general.--The Working Group shall be composed of senior
level representatives of--
(A) the Department of Health and Human Services;
(B) the Centers for Medicare & Medicaid Services;
(C) the National Institutes of Health;
(D) the Centers for Disease Control and Prevention;
(E) the Food and Drug Administration;
(F) the Health Resources and Services Administration;
(G) the Agency for Healthcare Research and Quality;
(H) the Office of the National Coordinator for Health
Information Technology;
(I) the Substance Abuse and Mental Health Services
Administration;
(J) the Administration for Children and Families;
(K) the Department of Commerce;
(L) the Office of Management and Budget;
(M) the United States Coast Guard;
(N) the Federal Bureau of Prisons;
(O) the National Highway Traffic Safety Administration;
(P) the Federal Trade Commission;
(Q) the Social Security Administration;
(R) the Department of Labor;
(S) the United States Office of Personnel Management;
(T) the Department of Defense;
(U) the Department of Education;
(V) the Department of Veterans Affairs;
(W) the Veterans Health Administration; and
(X) any other Federal agencies and departments with
activities relating to improving health care quality and
safety, as determined by the President.
(2) Chair and vice-chair.--
(A) Chair.--The Working Group shall be chaired by the
(B) Vice chair.--Members of the Working Group, other than
the Secretary of Health and Human Services, shall serve as Vice
Chair of the Group on a rotating basis, as determined by the
(d) Report to Congress.--Not later than December 31, 2010, and
annually thereafter, the Working Group shall submit to the relevant
Committees of Congress, and make public on an Internet website, a
report describing the progress and recommendations of the Working Group
in meeting the goals described in subsection (b).
(a) Public Health Service Act.--Title IX of the Public Health
Service Act (42 U.S.C. 299 et seq.) is amended--
(1) by redesignating part D as part E;
(2) by redesignating sections 931 through 938 as sections 941
through 948, respectively;
(3) in section 948(1), as so redesignated, by striking ``931''
and inserting ``941''; and
(4) by inserting after section 926 the following:
``PART D--HEALTH CARE QUALITY IMPROVEMENT
``Subpart I--Quality Measure Development
``SEC. 931. QUALITY MEASURE DEVELOPMENT.
``(a) Quality Measure.--In this subpart, the term `quality measure'
means a standard for measuring the performance and improvement of
population health or of health plans, providers of services, and other
clinicians in the delivery of health care services.
``(b) Identification of Quality Measures.--
``(1) Identification.--The Secretary, in consultation with the
Director of the Agency for Healthcare Research and Quality and the
Administrator of the Centers for Medicare & Medicaid Services,
shall identify, not less often than triennially, gaps where no
quality measures exist and existing quality measures that need
improvement, updating, or expansion, consistent with the national
strategy under section 399HH, to the extent available, for use in
Federal health programs. In identifying such gaps and existing
quality measures that need improvement, the Secretary shall take
into consideration--
``(A) the gaps identified by the entity with a contract
stakeholders;
``(B) quality measures identified by the pediatric quality
measures program under section 1139A of the Social Security
Act; and
``(C) quality measures identified through the Medicaid
Quality Measurement Program under section 1139B of the Social
``(2) Publication.--The Secretary shall make available to the
public on an Internet website a report on any gaps identified under
paragraph (1) and the process used to make such identification.
``(c) Grants or Contracts for Quality Measure Development.--
``(1) In general.--The Secretary shall award grants, contracts,
or intergovernmental agreements to eligible entities for purposes
of developing, improving, updating, or expanding quality measures
identified under subsection (b).
``(2) Prioritization in the development of quality measures.--
In awarding grants, contracts, or agreements under this subsection,
the Secretary shall give priority to the development of quality
measures that allow the assessment of--
``(A) health outcomes and functional status of patients;
``(B) the management and coordination of health care across
episodes of care and care transitions for patients across the
continuum of providers, health care settings, and health plans;
``(C) the experience, quality, and use of information
provided to and used by patients, caregivers, and authorized
representatives to inform decisionmaking about treatment
options, including the use of shared decisionmaking tools and
preference sensitive care (as defined in section 936);
``(D) the meaningful use of health information technology;
``(E) the safety, effectiveness, patient-centeredness,
appropriateness, and timeliness of care;
``(F) the efficiency of care;
``(G) the equity of health services and health disparities
across health disparity populations (as defined in section
485E) and geographic areas;
``(H) patient experience and satisfaction;
``(I) the use of innovative strategies and methodologies
identified under section 933; and
``(J) other areas determined appropriate by the Secretary.
``(3) Eligible entities.--To be eligible for a grant or
contract under this subsection, an entity shall--
``(A) have demonstrated expertise and capacity in the
development and evaluation of quality measures;
``(B) have adopted procedures to include in the quality
measure development process--
``(i) the views of those providers or payers whose
performance will be assessed by the measure; and
``(ii) the views of other parties who also will use the
quality measures (such as patients, consumers, and health
care purchasers);
``(C) collaborate with the entity with a contract under
section 1890(a) of the Social Security Act and other
stakeholders, as practicable, and the Secretary so that quality
measures developed by the eligible entity will meet the
requirements to be considered for endorsement by the entity
with a contract under such section 1890(a);
``(D) have transparent policies regarding governance and
conflicts of interest; and
``(E) submit an application to the Secretary at such time
and in such manner, as the Secretary may require.
``(4) Use of funds.--An entity that receives a grant, contract,
or agreement under this subsection shall use such award to develop
quality measures that meet the following requirements:
``(A) Such measures support measures required to be
reported under the Social Security Act, where applicable, and
in support of gaps and existing quality measures that need
improvement, as described in subsection (b)(1)(A).
``(B) Such measures support measures developed under
section 1139A of the Social Security Act and the Medicaid
Quality Measurement Program under section 1139B of such Act,
where applicable.
``(C) To the extent practicable, data on such quality
measures is able to be collected using health information
``(D) Each quality measure is free of charge to users of
such measure.
``(E) Each quality measure is publicly available on an
Internet website.
``(d) Other Activities by the Secretary.--The Secretary may use
amounts available under this section to update and test, where
applicable, quality measures endorsed by the entity with a contract
under section 1890(a) of the Social Security Act or adopted by the
``(e) Coordination of Grants.--The Secretary shall ensure that
grants or contracts awarded under this section are coordinated with
grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of
the Social Security Act.''.
(b) Social Security Act.--Section 1890A of the Social Security Act,
as added by section 3014(b), is amended by adding at the end the
following new subsection:
``(e) Development of Quality Measures.--The Administrator of the
Center for Medicare & Medicaid Services shall through contracts develop
quality measures (as determined appropriate by the Administrator) for
use under this Act. In developing such measures, the Administrator
shall consult with the Director of the Agency for Healthcare Research
and Quality.''.
(c) Funding.--There are authorized to be appropriated to the
Secretary of Health and Human Services to carry out this section,
$75,000,000 for each of fiscal years 2010 through 2014. Of the amounts
appropriated under the preceding sentence in a fiscal year, not less
than 50 percent of such amounts shall be used pursuant to subsection
(e) of section 1890A of the Social Security Act, as added by subsection
(b), with respect to programs under such Act. Amounts appropriated
under this subsection for a fiscal year shall remain available until
expended.
(a) New Duties for Consensus-based Entity.--
(1) Multi-stakeholder group input.--Section 1890(b) of the
Social Security Act (42 U.S.C. 1395aaa(b)), as amended by section
3003, is amended by adding at the end the following new paragraphs:
``(7) Convening multi-stakeholder groups.--
``(A) In general.--The entity shall convene multi-
stakeholder groups to provide input on--
``(i) the selection of quality measures described in
subparagraph (B), from among--
``(I) such measures that have been endorsed by the
entity; and
``(II) such measures that have not been considered
for endorsement by such entity but are used or proposed
to be used by the Secretary for the collection or
reporting of quality measures; and
``(ii) national priorities (as identified under section
399HH of the Public Health Service Act) for improvement in
population health and in the delivery of health care
services for consideration under the national strategy
established under section 399HH of the Public Health
``(B) Quality measures.--
``(i) In general.--Subject to clause (ii), the quality
measures described in this subparagraph are quality
measures--
``(I) for use pursuant to sections 1814(i)(5)(D),
1833(i)(7), 1833(t)(17), 1848(k)(2)(C), 1866(k)(3),
1881(h)(2)(A)(iii), 1886(b)(3)(B)(viii), 1886(j)(7)(D),
1886(m)(5)(D), 1886(o)(2), and 1895(b)(3)(B)(v);
``(II) for use in reporting performance information
to the public; and
``(III) for use in health care programs other than
for use under this Act.
``(ii) Exclusion.--Data sets (such as the outcome and
assessment information set for home health services and the
minimum data set for skilled nursing facility services)
that are used for purposes of classification systems used
in establishing payment rates under this title shall not be
quality measures described in this subparagraph.
``(C) Requirement for transparency in process.--
``(i) In general.--In convening multi-stakeholder
groups under subparagraph (A) with respect to the selection
of quality measures, the entity shall provide for an open
and transparent process for the activities conducted
pursuant to such convening.
``(ii) Selection of organizations participating in
multi-stakeholder groups.--The process described in clause
(i) shall ensure that the selection of representatives
comprising such groups provides for public nominations for,
and the opportunity for public comment on, such selection.
``(D) Multi-stakeholder group defined.--In this paragraph,
the term `multi-stakeholder group' means, with respect to a
quality measure, a voluntary collaborative of organizations
representing a broad group of stakeholders interested in or
affected by the use of such quality measure.
``(8) Transmission of multi-stakeholder input.--Not later than
February 1 of each year (beginning with 2012), the entity shall
transmit to the Secretary the input of multi-stakeholder groups
provided under paragraph (7).''.
(2) Annual report.--Section 1890(b)(5)(A) of the Social
Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended--
(A) in clause (ii), by striking ``and'' at the end;
(B) in clause (iii), by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following new clauses:
``(iv) gaps in endorsed quality measures, which shall
include measures that are within priority areas identified
by the Secretary under the national strategy established
under section 399HH of the Public Health Service Act, and
where quality measures are unavailable or inadequate to
identify or address such gaps;
``(v) areas in which evidence is insufficient to
support endorsement of quality measures in priority areas
identified by the Secretary under the national strategy
Service Act and where targeted research may address such
gaps; and
``(vi) the matters described in clauses (i) and (ii) of
paragraph (7)(A).''.
(b) Multi-stakeholder Group Input Into Selection of Quality
Measures.--Title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) is amended by inserting after section 1890 the following:
``quality measurement
``Sec. 1890A.  (a) Multi-stakeholder Group Input Into Selection of
Quality Measures.--The Secretary shall establish a pre-rulemaking
process under which the following steps occur with respect to the
selection of quality measures described in section 1890(b)(7)(B):
``(1) Input.--Pursuant to section 1890(b)(7), the entity with a
contract under section 1890 shall convene multi-stakeholder groups
to provide input to the Secretary on the selection of quality
measures described in subparagraph (B) of such paragraph.
``(2) Public availability of measures considered for
selection.--Not later than December 1 of each year (beginning with
2011), the Secretary shall make available to the public a list of
quality measures described in section 1890(b)(7)(B) that the
Secretary is considering under this title.
``(3) Transmission of multi-stakeholder input.--Pursuant to
section 1890(b)(8), not later than February 1 of each year
(beginning with 2012), the entity shall transmit to the Secretary
the input of multi-stakeholder groups described in paragraph (1).
``(4) Consideration of multi-stakeholder input.--The Secretary
shall take into consideration the input from multi-stakeholder
groups described in paragraph (1) in selecting quality measures
described in section 1890(b)(7)(B) that have been endorsed by the
entity with a contract under section 1890 and measures that have
not been endorsed by such entity.
``(5) Rationale for use of quality measures.--The Secretary
shall publish in the Federal Register the rationale for the use of
any quality measure described in section 1890(b)(7)(B) that has not
been endorsed by the entity with a contract under section 1890.
``(6) Assessment of impact.--Not later than March 1, 2012, and
at least once every three years thereafter, the Secretary shall--
``(A) conduct an assessment of the quality impact of the
use of endorsed measures described in section 1890(b)(7)(B);
``(B) make such assessment available to the public.
``(b) Process for Dissemination of Measures Used by the
Secretary.--
``(1) In general.--The Secretary shall establish a process for
disseminating quality measures used by the Secretary. Such process
shall include the following:
``(A) The incorporation of such measures, where applicable,
in workforce programs, training curricula, and any other means
of dissemination determined appropriate by the Secretary.
``(B) The dissemination of such quality measures through
the national strategy developed under section 399HH of the
``(2) Existing methods.--To the extent practicable, the
Secretary shall utilize and expand existing dissemination methods
in disseminating quality measures under the process established
``(c) Review of Quality Measures Used by the Secretary.--
``(1) In general.--The Secretary shall--
``(A) periodically (but in no case less often than once
every 3 years) review quality measures described in section
1890(b)(7)(B); and
``(B) with respect to each such measure, determine whether
``(i) maintain the use of such measure; or
``(ii) phase out such measure.
``(2) Considerations.--In conducting the review under paragraph
(1), the Secretary shall take steps to--
``(A) seek to avoid duplication of measures used; and
``(B) take into consideration current innovative
methodologies and strategies for quality improvement practices
in the delivery of health care services that represent best
practices for such quality improvement and measures endorsed by
the entity with a contract under section 1890 since the
previous review by the Secretary.
``(d) Rule of Construction.--Nothing in this section shall preclude
a State from using the quality measures identified under sections 1139A
and 1139B.''.
(c) Funding.--For purposes of carrying out the amendments made by
this section, the Secretary shall provide for the transfer, from the
Federal Hospital Insurance Trust Fund under section 1817 of the Social
Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical
Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t),
in such proportion as the Secretary determines appropriate, of
$20,000,000, to the Centers for Medicare & Medicaid Services Program
Management Account for each of fiscal years 2010 through 2014. Amounts
transferred under the preceding sentence shall remain available until
Title III of the Public Health Service Act (42 U.S.C. 241 et seq.),
as amended by section 3011, is further amended by adding at the end the
``SEC. 399II. COLLECTION AND ANALYSIS OF DATA FOR QUALITY AND RESOURCE
USE MEASURES.
``(a) In General.--The Secretary shall collect and aggregate
consistent data on quality and resource use measures from information
systems used to support health care delivery to implement the public
reporting of performance information, as described in section 399JJ,
and may award grants or contracts for this purpose. The Secretary shall
ensure that such collection, aggregation, and analysis systems span an
increasingly broad range of patient populations, providers, and
geographic areas over time.
``(b) Grants or Contracts for Data Collection.--
``(1) In general.--The Secretary may award grants or contracts
to eligible entities to support new, or improve existing, efforts
to collect and aggregate quality and resource use measures
described under subsection (c).
``(A) be--
``(i) a multi-stakeholder entity that coordinates the
development of methods and implementation plans for the
consistent reporting of summary quality and cost
``(ii) an entity capable of submitting such summary
data for a particular population and providers, such as a
disease registry, regional collaboration, health plan
collaboration, or other population-wide source; or
``(iii) a Federal Indian Health Service program or a
health program operated by an Indian tribe (as defined in
section 4 of the Indian Health Care Improvement Act);
``(B) promote the use of the systems that provide data to
improve and coordinate patient care;
``(C) support the provision of timely, consistent quality
and resource use information to health care providers, and
other groups and organizations as appropriate, with an
opportunity for providers to correct inaccurate measures; and
``(D) agree to report, as determined by the Secretary,
measures on quality and resource use to the public in
accordance with the public reporting process established under
section 399JJ.
``(c) Consistent Data Aggregation.--The Secretary may award grants
or contracts under this section only to entities that enable summary
data that can be integrated and compared across multiple sources. The
Secretary shall provide standards for the protection of the security
and privacy of patient data.
``(d) Matching Funds.--The Secretary may not award a grant or
contract under this section to an entity unless the entity agrees that
it will make available (directly or through contributions from other
public or private entities) non-Federal contributions toward the
activities to be carried out under the grant or contract in an amount
equal to $1 for each $5 of Federal funds provided under the grant or
contract. Such non-Federal matching funds may be provided directly or
through donations from public or private entities and may be in cash or
in-kind, fairly evaluated, including plant, equipment, or services.
``(e) Authorization of Appropriations.--To carry out this section,
there are authorized to be appropriated such sums as may be necessary
for fiscal years 2010 through 2014.
``SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE INFORMATION.
``(a) Development of Performance Websites.--The Secretary shall
make available to the public, through standardized Internet websites,
performance information summarizing data on quality measures. Such
information shall be tailored to respond to the differing needs of
hospitals and other institutional health care providers, physicians and
other clinicians, patients, consumers, researchers, policymakers,
States, and other stakeholders, as the Secretary may specify.
``(b) Information on Conditions.--The performance information made
publicly available on an Internet website, as described in subsection
(a), shall include information regarding clinical conditions to the
extent such information is available, and the information shall, where
appropriate, be provider-specific and sufficiently disaggregated and
specific to meet the needs of patients with different clinical
``(c) Consultation.--
``(1) In general.--In carrying out this section, the Secretary
shall consult with the entity with a contract under section 1890(a)
of the Social Security Act, and other entities, as appropriate, to
determine the type of information that is useful to stakeholders
and the format that best facilitates use of the reports and of
performance reporting Internet websites.
``(2) Consultation with stakeholders.--The entity with a
contract under section 1890(a) of the Social Security Act shall
convene multi-stakeholder groups, as described in such section, to
review the design and format of each Internet website made
available under subsection (a) and shall transmit to the Secretary
the views of such multi-stakeholder groups with respect to each
such design and format.
``(d) Coordination.--Where appropriate, the Secretary shall
coordinate the manner in which data are presented through Internet
websites described in subsection (a) and for public reporting of other
quality measures by the Secretary, including such quality measures
under title XVIII of the Social Security Act.
for fiscal years 2010 through 2014.''.
(a) In General.--Title XI of the Social Security Act is amended by
inserting after section 1115 the following new section:
``center for medicare and medicaid innovation
``Sec. 1115A.  (a) Center for Medicare and Medicaid Innovation
Established.--
``(1) In general.--There is created within the Centers for
Medicare & Medicaid Services a Center for Medicare and Medicaid
Innovation (in this section referred to as the `CMI') to carry out
the duties described in this section. The purpose of the CMI is to
test innovative payment and service delivery models to reduce
program expenditures under the applicable titles while preserving
or enhancing the quality of care furnished to individuals under
such titles. In selecting such models, the Secretary shall give
preference to models that also improve the coordination, quality,
and efficiency of health care services furnished to applicable
individuals defined in paragraph (4)(A).
``(2) Deadline.--The Secretary shall ensure that the CMI is
carrying out the duties described in this section by not later than
``(3) Consultation.--In carrying out the duties under this
section, the CMI shall consult representatives of relevant Federal
agencies, and clinical and analytical experts with expertise in
medicine and health care management. The CMI shall use open door
forums or other mechanisms to seek input from interested parties.
``(4) Definitions.--In this section:
``(A) Applicable individual.--The term `applicable
individual' means--
``(i) an individual who is entitled to, or enrolled
for, benefits under part A of title XVIII or enrolled for
benefits under part B of such title;
``(ii) an individual who is eligible for medical
assistance under title XIX, under a State plan or waiver;
``(iii) an individual who meets the criteria of both
clauses (i) and (ii).
``(B) Applicable title.--The term `applicable title' means
title XVIII, title XIX, or both.
``(b) Testing of Models (Phase I).--
``(1) In general.--The CMI shall test payment and service
delivery models in accordance with selection criteria under
paragraph (2) to determine the effect of applying such models under
the applicable title (as defined in subsection (a)(4)(B)) on
program expenditures under such titles and the quality of care
received by individuals receiving benefits under such title.
``(2) Selection of models to be tested.--
``(A) In general.--The Secretary shall select models to be
tested from models where the Secretary determines that there is
evidence that the model addresses a defined population for
which there are deficits in care leading to poor clinical
outcomes or potentially avoidable expenditures. The models
selected under the preceding sentence may include the models
described in subparagraph (B).
``(B) Opportunities.--The models described in this
subparagraph are the following models:
``(i) Promoting broad payment and practice reform in
primary care, including patient-centered medical home
models for high-need applicable individuals, medical homes
that address women's unique health care needs, and models
that transition primary care practices away from fee-for-
service based reimbursement and toward comprehensive
payment or salary-based payment.
``(ii) Contracting directly with groups of providers of
services and suppliers to promote innovative care delivery
models, such as through risk-based comprehensive payment or
salary-based payment.
``(iii) Utilizing geriatric assessments and
comprehensive care plans to coordinate the care (including
through interdisciplinary teams) of applicable individuals
with multiple chronic conditions and at least one of the
``(I) An inability to perform 2 or more activities
of daily living.
``(II) Cognitive impairment, including dementia.
``(iv) Promote care coordination between providers of
services and suppliers that transition health care
providers away from fee-for-service based reimbursement and
toward salary-based payment.
``(v) Supporting care coordination for chronically-ill
applicable individuals at high risk of hospitalization
through a health information technology-enabled provider
network that includes care coordinators, a chronic disease
registry, and home tele-health technology.
``(vi) Varying payment to physicians who order advanced
diagnostic imaging services (as defined in section
1834(e)(1)(B)) according to the physician's adherence to
appropriateness criteria for the ordering of such services,
as determined in consultation with physician specialty
groups and other relevant stakeholders.
``(vii) Utilizing medication therapy management
services, such as those described in section 935 of the
``(viii) Establishing community-based health teams to
support small-practice medical homes by assisting the
primary care practitioner in chronic care management,
including patient self-management, activities.
``(ix) Assisting applicable individuals in making
informed health care choices by paying providers of
services and suppliers for using patient decision-support
tools, including tools that meet the standards developed
and identified under section 936(c)(2)(A) of the Public
Health Service Act, that improve applicable individual and
caregiver understanding of medical treatment options.
``(x) Allowing States to test and evaluate fully
integrating care for dual eligible individuals in the
State, including the management and oversight of all funds
under the applicable titles with respect to such
``(xi) Allowing States to test and evaluate systems of
all-payer payment reform for the medical care of residents
of the State, including dual eligible individuals.
``(xii) Aligning nationally recognized, evidence-based
guidelines of cancer care with payment incentives under
title XVIII in the areas of treatment planning and follow-
up care planning for applicable individuals described in
clause (i) or (iii) of subsection (a)(4)(A) with cancer,
including the identification of gaps in applicable quality
measures.
``(xiii) Improving post-acute care through continuing
care hospitals that offer inpatient rehabilitation, long-
term care hospitals, and home health or skilled nursing
care during an inpatient stay and the 30 days immediately
following discharge.
``(xiv) Funding home health providers who offer chronic
care management services to applicable individuals in
cooperation with interdisciplinary teams.
``(xv) Promoting improved quality and reduced cost by
developing a collaborative of high-quality, low-cost health
care institutions that is responsible for--
``(I) developing, documenting, and disseminating
best practices and proven care methods;
``(II) implementing such best practices and proven
care methods within such institutions to demonstrate
further improvements in quality and efficiency; and
``(III) providing assistance to other health care
institutions on how best to employ such best practices
and proven care methods to improve health care quality
and lower costs.
``(xvi) Facilitate inpatient care, including intensive
care, of hospitalized applicable individuals at their local
hospital through the use of electronic monitoring by
specialists, including intensivists and critical care
specialists, based at integrated health systems.
``(xvii) Promoting greater efficiencies and timely
access to outpatient services (such as outpatient physical
therapy services) through models that do not require a
physician or other health professional to refer the service
or be involved in establishing the plan of care for the
service, when such service is furnished by a health
professional who has the authority to furnish the service
under existing State law.
``(xviii) Establishing comprehensive payments to
Healthcare Innovation Zones, consisting of groups of
providers that include a teaching hospital, physicians, and
other clinical entities, that, through their structure,
operations, and joint-activity deliver a full spectrum of
integrated and comprehensive health care services to
applicable individuals while also incorporating innovative
methods for the clinical training of future health care
``(C) Additional factors for consideration.--In selecting
models for testing under subparagraph (A), the CMI may consider
the following additional factors:
``(i) Whether the model includes a regular process for
monitoring and updating patient care plans in a manner that
is consistent with the needs and preferences of applicable
``(ii) Whether the model places the applicable
individual, including family members and other informal
caregivers of the applicable individual, at the center of
the care team of the applicable individual.
``(iii) Whether the model provides for in-person
contact with applicable individuals.
``(iv) Whether the model utilizes technology, such as
electronic health records and patient-based remote
monitoring systems, to coordinate care over time and across
``(v) Whether the model provides for the maintenance of
a close relationship between care coordinators, primary
care practitioners, specialist physicians, community-based
organizations, and other providers of services and
``(vi) Whether the model relies on a team-based
approach to interventions, such as comprehensive care
assessments, care planning, and self-management coaching.
``(vii) Whether, under the model, providers of services
and suppliers are able to share information with patients,
caregivers, and other providers of services and suppliers
on a real time basis.
``(3) Budget neutrality.--
``(A) Initial period.--The Secretary shall not require, as
a condition for testing a model under paragraph (1), that the
design of such model ensure that such model is budget neutral
initially with respect to expenditures under the applicable
``(B) Termination or modification.--The Secretary shall
terminate or modify the design and implementation of a model
unless the Secretary determines (and the Chief Actuary of the
Centers for Medicare & Medicaid Services, with respect to
program spending under the applicable title, certifies), after
testing has begun, that the model is expected to--
``(i) improve the quality of care (as determined by the
Administrator of the Centers for Medicare & Medicaid
Services) without increasing spending under the applicable
``(ii) reduce spending under the applicable title
without reducing the quality of care; or
``(iii) improve the quality of care and reduce
spending.
Such termination may occur at any time after such testing has
begun and before completion of the testing.
``(4) Evaluation.--
``(A) In general.--The Secretary shall conduct an
evaluation of each model tested under this subsection. Such
evaluation shall include an analysis of--
``(i) the quality of care furnished under the model,
including the measurement of patient-level outcomes and
patient-centeredness criteria determined appropriate by the
``(ii) the changes in spending under the applicable
titles by reason of the model.
``(B) Information.--The Secretary shall make the results of
each evaluation under this paragraph available to the public in
a timely fashion and may establish requirements for States and
other entities participating in the testing of models under
this section to collect and report information that the
Secretary determines is necessary to monitor and evaluate such
``(c) Expansion of Models (Phase II).--Taking into account the
evaluation under subsection (b)(4), the Secretary may, through
rulemaking, expand (including implementation on a nationwide basis) the
duration and the scope of a model that is being tested under subsection
(b) or a demonstration project under section 1866C, to the extent
determined appropriate by the Secretary, if--
``(1) the Secretary determines that such expansion is expected
``(A) reduce spending under applicable title without
reducing the quality of care; or
``(B) improve the quality of care and reduce spending; and
``(2) the Chief Actuary of the Centers for Medicare & Medicaid
Services certifies that such expansion would reduce program
spending under applicable titles.
``(d) Implementation.--
``(1) Waiver authority.--The Secretary may waive such
requirements of titles XI and XVIII and of sections 1902(a)(1),
1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely for
purposes of carrying out this section with respect to testing
models described in subsection (b).
``(A) the selection of models for testing or expansion
under this section;
``(B) the selection of organizations, sites, or
participants to test those models selected;
``(C) the elements, parameters, scope, and duration of such
models for testing or dissemination;
``(D) determinations regarding budget neutrality under
subsection (b)(3);
``(E) the termination or modification of the design and
implementation of a model under subsection (b)(3)(B); and
``(F) determinations about expansion of the duration and
scope of a model under subsection (c), including the
determination that a model is not expected to meet criteria
described in paragraph (1) or (2) of such subsection.
``(3) Administration.--Chapter 35 of title 44, United States
Code, shall not apply to the testing and evaluation of models or
expansion of such models under this section.
``(e) Application to CHIP.--The Center may carry out activities
under this section with respect to title XXI in the same manner as
provided under this section with respect to the program under the
applicable titles.
``(f) Funding.--
``(1) In general.--There are appropriated, from amounts in the
Treasury not otherwise appropriated--
``(A) $5,000,000 for the design, implementation, and
evaluation of models under subsection (b) for fiscal year 2010;
``(B) $10,000,000,000 for the activities initiated under
this section for the period of fiscal years 2011 through 2019;
``(C) the amount described in subparagraph (B) for the
activities initiated under this section for each subsequent 10-
year fiscal period (beginning with the 10-year fiscal period
beginning with fiscal year 2020).
Amounts appropriated under the preceding sentence shall remain
available until expended.
``(2) Use of certain funds.--Out of amounts appropriated under
subparagraphs (B) and (C) of paragraph (1), not less than
$25,000,000 shall be made available each such fiscal year to
design, implement, and evaluate models under subsection (b).
``(g) Report to Congress.--Beginning in 2012, and not less than
once every other year thereafter, the Secretary shall submit to
Congress a report on activities under this section. Each such report
shall describe the models tested under subsection (b), including the
number of individuals described in subsection (a)(4)(A)(i) and of
individuals described in subsection (a)(4)(A)(ii) participating in such
models and payments made under applicable titles for services on behalf
of such individuals, any models chosen for expansion under subsection
(c), and the results from evaluations under subsection (b)(4). In
addition, each such report shall provide such recommendations as the
Secretary determines are appropriate for legislative action to
facilitate the development and expansion of successful payment
models.''.
(b) Medicaid Conforming Amendment.--Section 1902(a) of the Social
Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is
(1) in paragraph (81), by striking ``and'' at the end;
(2) in paragraph (82), by striking the period at the end and
``(83) provide for implementation of the payment models
specified by the Secretary under section 1115A(c) for
implementation on a nationwide basis unless the State demonstrates
to the satisfaction of the Secretary that implementation would not
be administratively feasible or appropriate to the health care
delivery system of the State.''.
(c) Revisions to Health Care Quality Demonstration Program.--
Subsections (b) and (f) of section 1866C of the Social Security Act (42
U.S.C. 1395cc-3) are amended by striking ``5-year'' each place it
appears.
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is
``shared savings program
``Sec. 1899.  (a) Establishment.--
``(1) In general.--Not later than January 1, 2012, the
Secretary shall establish a shared savings program (in this section
referred to as the `program') that promotes accountability for a
patient population and coordinates items and services under parts A
and B, and encourages investment in infrastructure and redesigned
care processes for high quality and efficient service delivery.
Under such program--
``(A) groups of providers of services and suppliers meeting
criteria specified by the Secretary may work together to manage
and coordinate care for Medicare fee-for-service beneficiaries
through an accountable care organization (referred to in this
section as an `ACO'); and
``(B) ACOs that meet quality performance standards
established by the Secretary are eligible to receive payments
for shared savings under subsection (d)(2).
``(b) Eligible ACOs.--
subsection, as determined appropriate by the Secretary, the
following groups of providers of services and suppliers which have
established a mechanism for shared governance are eligible to
participate as ACOs under the program under this section:
``(A) ACO professionals in group practice arrangements.
``(B) Networks of individual practices of ACO
``(C) Partnerships or joint venture arrangements between
hospitals and ACO professionals.
``(D) Hospitals employing ACO professionals.
``(E) Such other groups of providers of services and
suppliers as the Secretary determines appropriate.
``(2) Requirements.--An ACO shall meet the following
``(A) The ACO shall be willing to become accountable for
the quality, cost, and overall care of the Medicare fee-for-
service beneficiaries assigned to it.
``(B) The ACO shall enter into an agreement with the
Secretary to participate in the program for not less than a 3-
year period (referred to in this section as the `agreement
period').
``(C) The ACO shall have a formal legal structure that
would allow the organization to receive and distribute payments
for shared savings under subsection (d)(2) to participating
providers of services and suppliers.
``(D) The ACO shall include primary care ACO professionals
that are sufficient for the number of Medicare fee-for-service
beneficiaries assigned to the ACO under subsection (c). At a
minimum, the ACO shall have at least 5,000 such beneficiaries
assigned to it under subsection (c) in order to be eligible to
participate in the ACO program.
``(E) The ACO shall provide the Secretary with such
information regarding ACO professionals participating in the
ACO as the Secretary determines necessary to support the
assignment of Medicare fee-for-service beneficiaries to an ACO,
the implementation of quality and other reporting requirements
under paragraph (3), and the determination of payments for
shared savings under subsection (d)(2).
``(F) The ACO shall have in place a leadership and
management structure that includes clinical and administrative
``(G) The ACO shall define processes to promote evidence-
based medicine and patient engagement, report on quality and
cost measures, and coordinate care, such as through the use of
telehealth, remote patient monitoring, and other such enabling
``(H) The ACO shall demonstrate to the Secretary that it
meets patient-centeredness criteria specified by the Secretary,
such as the use of patient and caregiver assessments or the use
of individualized care plans.
``(3) Quality and other reporting requirements.--
``(A) In general.--The Secretary shall determine
appropriate measures to assess the quality of care furnished by
the ACO, such as measures of--
``(i) clinical processes and outcomes;
``(ii) patient and, where practicable, caregiver
experience of care; and
``(iii) utilization (such as rates of hospital
admissions for ambulatory care sensitive conditions).
``(B) Reporting requirements.--An ACO shall submit data in
a form and manner specified by the Secretary on measures the
Secretary determines necessary for the ACO to report in order
to evaluate the quality of care furnished by the ACO. Such data
may include care transitions across health care settings,
including hospital discharge planning and post-hospital
discharge follow-up by ACO professionals, as the Secretary
``(C) Quality performance standards.--The Secretary shall
establish quality performance standards to assess the quality
of care furnished by ACOs. The Secretary shall seek to improve
the quality of care furnished by ACOs over time by specifying
higher standards, new measures, or both for purposes of
assessing such quality of care.
``(D) Other reporting requirements.--The Secretary may, as
the Secretary determines appropriate, incorporate reporting
requirements and incentive payments related to the physician
quality reporting initiative (PQRI) under section 1848,
including such requirements and such payments related to
electronic prescribing, electronic health records, and other
similar initiatives under section 1848, and may use alternative
criteria than would otherwise apply under such section for
determining whether to make such payments. The incentive
payments described in the preceding sentence shall not be taken
into consideration when calculating any payments otherwise made
under subsection (d).
``(4) No duplication in participation in shared savings
programs.--A provider of services or supplier that participates in
any of the following shall not be eligible to participate in an ACO
under this section:
``(A) A model tested or expanded under section 1115A that
involves shared savings under this title, or any other program
or demonstration project that involves such shared savings.
``(B) The independence at home medical practice pilot
program under section 1866E.
``(c) Assignment of Medicare Fee-for-service Beneficiaries to
ACOs.--The Secretary shall determine an appropriate method to assign
Medicare fee-for-service beneficiaries to an ACO based on their
utilization of primary care services provided under this title by an
ACO professional described in subsection (h)(1)(A).
``(d) Payments and Treatment of Savings.--
``(1) Payments.--
``(A) In general.--Under the program, subject to paragraph
(3), payments shall continue to be made to providers of
services and suppliers participating in an ACO under the
original Medicare fee-for-service program under parts A and B
in the same manner as they would otherwise be made except that
a participating ACO is eligible to receive payment for shared
savings under paragraph (2) if--
``(i) the ACO meets quality performance standards
established by the Secretary under subsection (b)(3); and
``(ii) the ACO meets the requirement under subparagraph
``(B) Savings requirement and benchmark.--
``(i) Determining savings.--In each year of the
agreement period, an ACO shall be eligible to receive
payment for shared savings under paragraph (2) only if the
estimated average per capita Medicare expenditures under
the ACO for Medicare fee-for-service beneficiaries for
parts A and B services, adjusted for beneficiary
characteristics, is at least the percent specified by the
Secretary below the applicable benchmark under clause (ii).
The Secretary shall determine the appropriate percent
described in the preceding sentence to account for normal
variation in expenditures under this title, based upon the
number of Medicare fee-for-service beneficiaries assigned
to an ACO.
``(ii) Establish and update benchmark.--The Secretary
shall estimate a benchmark for each agreement period for
each ACO using the most recent available 3 years of per-
beneficiary expenditures for parts A and B services for
Medicare fee-for-service beneficiaries assigned to the ACO.
Such benchmark shall be adjusted for beneficiary
characteristics and such other factors as the Secretary
determines appropriate and updated by the projected
absolute amount of growth in national per capita
expenditures for parts A and B services under the original
Medicare fee-for-service program, as estimated by the
Secretary. Such benchmark shall be reset at the start of
each agreement period.
``(2) Payments for shared savings.--Subject to performance with
respect to the quality performance standards established by the
Secretary under subsection (b)(3), if an ACO meets the requirements
under paragraph (1), a percent (as determined appropriate by the
Secretary) of the difference between such estimated average per
capita Medicare expenditures in a year, adjusted for beneficiary
characteristics, under the ACO and such benchmark for the ACO may
be paid to the ACO as shared savings and the remainder of such
difference shall be retained by the program under this title. The
Secretary shall establish limits on the total amount of shared
savings that may be paid to an ACO under this paragraph.
``(3) Monitoring avoidance of at-risk patients.--If the
Secretary determines that an ACO has taken steps to avoid patients
at risk in order to reduce the likelihood of increasing costs to
the ACO the Secretary may impose an appropriate sanction on the
ACO, including termination from the program.
``(4) Termination.--The Secretary may terminate an agreement
with an ACO if it does not meet the quality performance standards
established by the Secretary under subsection (b)(3).
``(e) Administration.--Chapter 35 of title 44, United States Code,
shall not apply to the program.
``(f) Waiver Authority.--The Secretary may waive such requirements
of sections 1128A and 1128B and title XVIII of this Act as may be
necessary to carry out the provisions of this section.
``(g) Limitations on Review.--There shall be no administrative or
judicial review under section 1869, section 1878, or otherwise of--
``(1) the specification of criteria under subsection (a)(1)(B);
``(2) the assessment of the quality of care furnished by an ACO
and the establishment of performance standards under subsection
``(3) the assignment of Medicare fee-for-service beneficiaries
to an ACO under subsection (c);
``(4) the determination of whether an ACO is eligible for
shared savings under subsection (d)(2) and the amount of such
shared savings, including the determination of the estimated
average per capita Medicare expenditures under the ACO for Medicare
fee-for-service beneficiaries assigned to the ACO and the average
benchmark for the ACO under subsection (d)(1)(B);
``(5) the percent of shared savings specified by the Secretary
under subsection (d)(2) and any limit on the total amount of shared
savings established by the Secretary under such subsection; and
``(6) the termination of an ACO under subsection (d)(4).
``(1) ACO professional.--The term `ACO professional' means--
``(A) a physician (as defined in section 1861(r)(1)); and
``(B) a practitioner described in section
1842(b)(18)(C)(i).
``(2) Hospital.--The term `hospital' means a subsection (d)
hospital (as defined in section 1886(d)(1)(B)).
``(3) Medicare fee-for-service beneficiary.--The term `Medicare
fee-for-service beneficiary' means an individual who is enrolled in
the original Medicare fee-for-service program under parts A and B
and is not enrolled in an MA plan under part C, an eligible
organization under section 1876, or a PACE program under section
1894.''.
Title XVIII of the Social Security Act, as amended by section 3021,
is amended by inserting after section 1886C the following new section:
``national pilot program on payment bundling
``Sec. 1866D.  (a) Implementation.--
``(1) In general.--The Secretary shall establish a pilot
program for integrated care during an episode of care provided to
an applicable beneficiary around a hospitalization in order to
improve the coordination, quality, and efficiency of health care
services under this title.
``(A) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who--
``(i) is entitled to, or enrolled for, benefits under
part A and enrolled for benefits under part B of such
title, but not enrolled under part C or a PACE program
under section 1894; and
``(ii) is admitted to a hospital for an applicable
``(B) Applicable condition.--The term `applicable
condition' means 1 or more of 8 conditions selected by the
Secretary. In selecting conditions under the preceding
sentence, the Secretary shall take into consideration the
following factors:
``(i) Whether the conditions selected include a mix of
chronic and acute conditions.
``(ii) Whether the conditions selected include a mix of
surgical and medical conditions.
``(iii) Whether a condition is one for which there is
evidence of an opportunity for providers of services and
suppliers to improve the quality of care furnished while
reducing total expenditures under this title.
``(iv) Whether a condition has significant variation
in--
``(I) the number of readmissions; and
``(II) the amount of expenditures for post-acute
care spending under this title.
``(v) Whether a condition is high-volume and has high
post-acute care expenditures under this title.
``(vi) Which conditions the Secretary determines are
most amenable to bundling across the spectrum of care given
practice patterns under this title.
``(C) Applicable services.--The term `applicable services'
means the following:
``(i) Acute care inpatient services.
``(ii) Physicians' services delivered in and outside of
an acute care hospital setting.
``(iii) Outpatient hospital services, including
emergency department services.
``(iv) Post-acute care services, including home health
services, skilled nursing services, inpatient
rehabilitation services, and inpatient hospital services
furnished by a long-term care hospital.
``(v) Other services the Secretary determines
``(D) Episode of care.--
``(i) In general.--Subject to clause (ii), the term
`episode of care' means, with respect to an applicable
condition and an applicable beneficiary, the period that
includes--
``(I) the 3 days prior to the admission of the
applicable beneficiary to a hospital for the applicable
condition;
``(II) the length of stay of the applicable
beneficiary in such hospital; and
``(III) the 30 days following the discharge of the
applicable beneficiary from such hospital.
``(ii) Establishment of period by the secretary.--The
Secretary, as appropriate, may establish a period (other
than the period described in clause (i)) for an episode of
care under the pilot program.
``(E) Physicians' services.--The term `physicians'
services' has the meaning given such term in section 1861(q).
``(F) Pilot program.--The term `pilot program' means the
pilot program under this section.
``(G) Provider of services.--The term `provider of
services' has the meaning given such term in section 1861(u).
``(H) Readmission.--The term `readmission' has the meaning
given such term in section 1886(q)(5)(E).
``(I) Supplier.--The term `supplier' has the meaning given
such term in section 1861(d).
``(3) Deadline for implementation.--The Secretary shall
establish the pilot program not later than January 1, 2013.
``(b) Developmental Phase.--
``(1) Determination of patient assessment instrument.--The
Secretary shall determine which patient assessment instrument (such
as the Continuity Assessment Record and Evaluation (CARE) tool)
shall be used under the pilot program to evaluate the applicable
condition of an applicable beneficiary for purposes of determining
the most clinically appropriate site for the provision of post-
acute care to the applicable beneficiary.
``(2) Development of quality measures for an episode of care
and for post-acute care.--
``(A) In general.--The Secretary, in consultation with the
Agency for Healthcare Research and Quality and the entity with
a contract under section 1890(a) of the Social Security Act,
shall develop quality measures for use in the pilot program--
``(i) for episodes of care; and
``(ii) for post-acute care.
``(B) Site-neutral post-acute care quality measures.--Any
quality measures developed under subparagraph (A)(ii) shall be
site-neutral.
``(C) Coordination with quality measure development and
endorsement procedures.--The Secretary shall ensure that the
development of quality measures under subparagraph (A) is done
in a manner that is consistent with the measures developed and
endorsed under section 1890 and 1890A that are applicable to
all post-acute care settings.
``(c) Details.--
``(1) Duration.--
``(A) In general.--Subject to subparagraph (B), the pilot
program shall be conducted for a period of 5 years.
``(B) Extension.--The Secretary may extend the duration of
the pilot program for providers of services and suppliers
participating in the pilot program as of the day before the end
of the 5-year period described in subparagraph (A), for a
period determined appropriate by the Secretary, if the
Secretary determines that such extension will result in
improving or not reducing the quality of patient care and
reducing spending under this title.
``(2) Participating providers of services and suppliers.--
``(A) In general.--An entity comprised of providers of
services and suppliers, including a hospital, a physician
group, a skilled nursing facility, and a home health agency,
who are otherwise participating under this title, may submit an
application to the Secretary to provide applicable services to
applicable individuals under this section.
``(B) Requirements.--The Secretary shall develop
requirements for entities to participate in the pilot program
under this section. Such requirements shall ensure that
applicable beneficiaries have an adequate choice of providers
of services and suppliers under the pilot program.
``(3) Payment methodology.--
``(i) Establishment of payment methods.--The Secretary
shall develop payment methods for the pilot program for
entities participating in the pilot program. Such payment
methods may include bundled payments and bids from entities
for episodes of care. The Secretary shall make payments to
the entity for services covered under this section.
``(ii) No additional program expenditures.--Payments
under this section for applicable items and services under
this title (including payment for services described in
subparagraph (B)) for applicable beneficiaries for a year
shall be established in a manner that does not result in
spending more for such entity for such beneficiaries than
would otherwise be expended for such entity for such
beneficiaries for such year if the pilot program were not
implemented, as estimated by the Secretary.
``(B) Inclusion of certain services.--A payment methodology
tested under the pilot program shall include payment for the
furnishing of applicable services and other appropriate
services, such as care coordination, medication reconciliation,
discharge planning, transitional care services, and other
patient-centered activities as determined appropriate by the
``(C) Bundled payments.--
``(i) In general.--A bundled payment under the pilot
program shall--
``(I) be comprehensive, covering the costs of
applicable services and other appropriate services
furnished to an individual during an episode of care
(as determined by the Secretary); and
``(II) be made to the entity which is participating
in the pilot program.
``(ii) Requirement for provision of applicable services
and other appropriate services.--Applicable services and
other appropriate services for which payment is made under
this subparagraph shall be furnished or directed by the
entity which is participating in the pilot program.
``(D) Payment for post-acute care services after the
episode of care.--The Secretary shall establish procedures, in
the case where an applicable beneficiary requires continued
post-acute care services after the last day of the episode of
care, under which payment for such services shall be made.
``(A) In general.--The Secretary shall establish quality
measures (including quality measures of process, outcome, and
structure) related to care provided by entities participating
in the pilot program. Quality measures established under the
preceding sentence shall include measures of the following:
``(i) Functional status improvement.
``(ii) Reducing rates of avoidable hospital
readmissions.
``(iii) Rates of discharge to the community.
``(iv) Rates of admission to an emergency room after a
``(v) Incidence of health care acquired infections.
``(vi) Efficiency measures.
``(vii) Measures of patient-centeredness of care.
``(viii) Measures of patient perception of care.
``(ix) Other measures, including measures of patient
outcomes, determined appropriate by the Secretary.
``(B) Reporting on quality measures.--
``(i) In general.--A entity shall submit data to the
Secretary on quality measures established under
subparagraph (A) during each year of the pilot program (in
a form and manner, subject to clause (iii), specified by
the Secretary).
``(ii) Submission of data through electronic health
record.--To the extent practicable, the Secretary shall
specify that data on measures be submitted under clause (i)
through the use of an qualified electronic health record
(as defined in section 3000(13) of the Public Health
Service Act (42 U.S.C. 300jj-11(13)) in a manner specified
``(d) Waiver.--The Secretary may waive such provisions of this
title and title XI as may be necessary to carry out the pilot program.
``(e) Independent Evaluation and Reports on Pilot Program.--
``(1) Independent evaluation.--The Secretary shall conduct an
independent evaluation of the pilot program, including the extent
to which the pilot program has--
``(A) improved quality measures established under
subsection (c)(4)(A);
``(B) improved health outcomes;
``(C) improved applicable beneficiary access to care; and
``(D) reduced spending under this title.
``(2) Reports.--
``(A) Interim report.--Not later than 2 years after the
implementation of the pilot program, the Secretary shall submit
to Congress a report on the initial results of the independent
evaluation conducted under paragraph (1).
``(B) Final report.--Not later than 3 years after the
to Congress a report on the final results of the independent
``(f) Consultation.--The Secretary shall consult with
representatives of small rural hospitals, including critical access
hospitals (as defined in section 1861(mm)(1)), regarding their
participation in the pilot program. Such consultation shall include
consideration of innovative methods of implementing bundled payments in
hospitals described in the preceding sentence, taking into
consideration any difficulties in doing so as a result of the low
volume of services provided by such hospitals.
``(g) Implementation Plan.--
Secretary shall submit a plan for the implementation of an
expansion of the pilot program if the Secretary determines that
such expansion will result in improving or not reducing the quality
of patient care and reducing spending under this title.
``(h) Administration.--Chapter 35 of title 44, United States Code,
shall not apply to the selection, testing, and evaluation of models or
the expansion of such models under this section.''.
Title XVIII of the Social Security Act is amended by inserting
after section 1866D, as inserted by section 3023, the following new
``independence at home medical practice demonstration program
``Sec. 1866D.  (a) Establishment.--
``(1) In general.--The Secretary shall conduct a demonstration
program (in this section referred to as the `demonstration
program') to test a payment incentive and service delivery model
that utilizes physician and nurse practitioner directed home-based
primary care teams designed to reduce expenditures and improve
health outcomes in the provision of items and services under this
title to applicable beneficiaries (as defined in subsection (d)).
``(2) Requirement.--The demonstration program shall test
whether a model described in paragraph (1), which is accountable
for providing comprehensive, coordinated, continuous, and
accessible care to high-need populations at home and coordinating
health care across all treatment settings, results in--
``(A) reducing preventable hospitalizations;
``(B) preventing hospital readmissions;
``(C) reducing emergency room visits;
``(D) improving health outcomes commensurate with the
beneficiaries' stage of chronic illness;
``(E) improving the efficiency of care, such as by reducing
duplicative diagnostic and laboratory tests;
``(F) reducing the cost of health care services covered
under this title; and
``(G) achieving beneficiary and family caregiver
``(b) Independence at Home Medical Practice.--
``(1) Independence at home medical practice defined.--In this
``(A) In general.--The term `independence at home medical
practice' means a legal entity that--
``(i) is comprised of an individual physician or nurse
practitioner or group of physicians and nurse practitioners
that provides care as part of a team that includes
physicians, nurses, physician assistants, pharmacists, and
other health and social services staff as appropriate who
have experience providing home-based primary care to
applicable beneficiaries, make in-home visits, and are
available 24 hours per day, 7 days per week to carry out
plans of care that are tailored to the individual
beneficiary's chronic conditions and designed to achieve
the results in subsection (a);
``(ii) is organized at least in part for the purpose of
providing physicians' services;
``(iii) has documented experience in providing home-
based primary care services to high-cost chronically ill
beneficiaries, as determined appropriate by the Secretary;
``(iv) furnishes services to at least 200 applicable
beneficiaries (as defined in subsection (d)) during each
year of the demonstration program;
``(v) has entered into an agreement with the Secretary;
``(vi) uses electronic health information systems,
remote monitoring, and mobile diagnostic technology; and
``(vii) meets such other criteria as the Secretary
determines to be appropriate to participate in the
The entity shall report on quality measures (in such form,
manner, and frequency as specified by the Secretary, which may
be for the group, for providers of services and suppliers, or
both) and report to the Secretary (in a form, manner, and
frequency as specified by the Secretary) such data as the
Secretary determines appropriate to monitor and evaluate the
``(B) Physician.--The term `physician' includes, except as
the Secretary may otherwise provide, any individual who
furnishes services for which payment may be made as physicians'
services and has the medical training or experience to fulfill
the physician's role described in subparagraph (A)(i).
``(2) Participation of nurse practitioners and physician
assistants.--Nothing in this section shall be construed to prevent
a nurse practitioner or physician assistant from participating in,
or leading, a home-based primary care team as part of an
independence at home medical practice if--
``(A) all the requirements of this section are met;
``(B) the nurse practitioner or physician assistant, as the
case may be, is acting consistent with State law; and
``(C) the nurse practitioner or physician assistant has the
medical training or experience to fulfill the nurse
practitioner or physician assistant role described in paragraph
(1)(A)(i).
``(3) Inclusion of providers and practitioners.--Nothing in
this subsection shall be construed as preventing an independence at
home medical practice from including a provider of services or a
participating practitioner described in section 1842(b)(18)(C) that
is affiliated with the practice under an arrangement structured so
that such provider of services or practitioner participates in the
demonstration program and shares in any savings under the
``(4) Quality and performance standards.--The Secretary shall
develop quality performance standards for independence at home
medical practices participating in the demonstration program.
``(c) Payment Methodology.--
``(1) Establishment of target spending level.--The Secretary
shall establish an estimated annual spending target, for the amount
the Secretary estimates would have been spent in the absence of the
demonstration, for items and services covered under parts A and B
furnished to applicable beneficiaries for each qualifying
independence at home medical practice under this section. Such
spending targets shall be determined on a per capita basis. Such
spending targets shall include a risk corridor that takes into
account normal variation in expenditures for items and services
covered under parts A and B furnished to such beneficiaries with
the size of the corridor being related to the number of applicable
beneficiaries furnished services by each independence at home
medical practice. The spending targets may also be adjusted for
other factors as the Secretary determines appropriate.
``(2) Incentive payments.--Subject to performance on quality
measures, a qualifying independence at home medical practice is
eligible to receive an incentive payment under this section if
actual expenditures for a year for the applicable beneficiaries it
enrolls are less than the estimated spending target established
under paragraph (1) for such year. An incentive payment for such
year shall be equal to a portion (as determined by the Secretary)
of the amount by which actual expenditures (including incentive
payments under this paragraph) for applicable beneficiaries under
parts A and B for such year are estimated to be less than 5 percent
less than the estimated spending target for such year, as
``(d) Applicable Beneficiaries.--
``(1) Definition.--In this section, the term `applicable
beneficiary' means, with respect to a qualifying independence at
home medical practice, an individual who the practice has
determined--
``(A) is entitled to benefits under part A and enrolled for
benefits under part B;
``(B) is not enrolled in a Medicare Advantage plan under
part C or a PACE program under section 1894;
``(C) has 2 or more chronic illnesses, such as congestive
heart failure, diabetes, other dementias designated by the
Secretary, chronic obstructive pulmonary disease, ischemic
heart disease, stroke, Alzheimer's Disease and
neurodegenerative diseases, and other diseases and conditions
designated by the Secretary which result in high costs under
this title;
``(D) within the past 12 months has had a nonelective
hospital admission;
``(E) within the past 12 months has received acute or
subacute rehabilitation services;
``(F) has 2 or more functional dependencies requiring the
assistance of another person (such as bathing, dressing,
toileting, walking, or feeding); and
``(G) meets such other criteria as the Secretary determines
``(2) Patient election to participate.--The Secretary shall
determine an appropriate method of ensuring that applicable
beneficiaries have agreed to enroll in an independence at home
medical practice under the demonstration program. Enrollment in the
demonstration program shall be voluntary.
``(3) Beneficiary access to services.--Nothing in this section
shall be construed as encouraging physicians or nurse practitioners
to limit applicable beneficiary access to services covered under
this title and applicable beneficiaries shall not be required to
relinquish access to any benefit under this title as a condition of
receiving services from an independence at home medical practice.
``(e) Implementation.--
``(1) Starting date.--The demonstration program shall begin no
later than January 1, 2012. An agreement with an independence at
home medical practice under the demonstration program may cover not
more than a 3-year period.
``(2) No physician duplication in demonstration
participation.--The Secretary shall not pay an independence at home
medical practice under this section that participates in section
``(3) No beneficiary duplication in demonstration
participation.--The Secretary shall ensure that no applicable
beneficiary enrolled in an independence at home medical practice
under this section is participating in the programs under section
``(4) Preference.--In approving an independence at home medical
practice, the Secretary shall give preference to practices that
are--
``(A) located in high-cost areas of the country;
``(B) have experience in furnishing health care services to
applicable beneficiaries in the home; and
``(C) use electronic medical records, health information
technology, and individualized plans of care.
``(5) Limitation on number of practices.--In selecting
qualified independence at home medical practices to participate
under the demonstration program, the Secretary shall limit the
number of such practices so that the number of applicable
beneficiaries that may participate in the demonstration program
does not exceed 10,000.
``(6) Waiver.--The Secretary may waive such provisions of this
title and title XI as the Secretary determines necessary in order
to implement the demonstration program.
Code, shall not apply to this section.
``(f) Evaluation and Monitoring.--
``(1) In general.--The Secretary shall evaluate each
independence at home medical practice under the demonstration
program to assess whether the practice achieved the results
described in subsection (a).
``(2) Monitoring applicable beneficiaries.--The Secretary may
monitor data on expenditures and quality of services under this
title after an applicable beneficiary discontinues receiving
services under this title through a qualifying independence at home
medical practice.
``(g) Reports to Congress.--The Secretary shall conduct an
independent evaluation of the demonstration program and submit to
Congress a final report, including best practices under the
demonstration program. Such report shall include an analysis of the
demonstration program on coordination of care, expenditures under this
title, applicable beneficiary access to services, and the quality of
health care services provided to applicable beneficiaries.
``(h) Funding.--For purposes of administering and carrying out the
demonstration program, other than for payments for items and services
furnished under this title and incentive payments under subsection (c),
in addition to funds otherwise appropriated, there shall be transferred
to the Secretary for the Center for Medicare & Medicaid Services
Program Management Account from the Federal Hospital Insurance Trust
Fund under section 1817 and the Federal Supplementary Medical Insurance
Trust Fund under section 1841 (in proportions determined appropriate by
the Secretary) $5,000,000 for each of fiscal years 2010 through 2015.
Amounts transferred under this subsection for a fiscal year shall be
``(i) Termination.--
``(1) Mandatory termination.--The Secretary shall terminate an
agreement with an independence at home medical practice if--
``(A) the Secretary estimates or determines that such
practice will not receive an incentive payment for the second
of 2 consecutive years under the demonstration program; or
``(B) such practice fails to meet quality standards during
any year of the demonstration program.
``(2) Permissive termination.--The Secretary may terminate an
agreement with an independence at home medical practice for such
other reasons determined appropriate by the Secretary.''.
1395ww), as amended by sections 3001 and 3008, is amended by adding at
the end the following new subsection:
``(q) Hospital Readmissions Reduction Program.--
``(1) In general.--With respect to payment for discharges from
an applicable hospital (as defined in paragraph (5)(C)) occurring
during a fiscal year beginning on or after October 1, 2012, in
order to account for excess readmissions in the hospital, the
Secretary shall reduce the payments that would otherwise be made to
such hospital under subsection (d) (or section 1814(b)(3), as the
case may be) for such a discharge by an amount equal to the product
``(A) the base operating DRG payment amount (as defined in
paragraph (2)) for the discharge; and
``(B) the adjustment factor (described in paragraph (3)(A))
for the hospital for the fiscal year.
``(2) Base operating drg payment amount defined.--
amount' means, with respect to a hospital for a fiscal year--
``(i) the payment amount that would otherwise be made
under subsection (d) (determined without regard to
subsection (o)) for a discharge if this subsection did not
apply; reduced by
attributable to payments under paragraphs (5)(A), (5)(B),
(5)(F), and (12) of subsection (d).
``(B) Special rules for certain hospitals.--
``(i) Sole community hospitals and medicare-dependent,
small rural hospitals.--In the case of a medicare-
dependent, small rural hospital (with respect to discharges
occurring during fiscal years 2012 and 2013) or a sole
community hospital, in applying subparagraph (A)(i), the
payment amount that would otherwise be made under
subsection (d) shall be determined without regard to
subparagraphs (I) and (L) of subsection (b)(3) and
subparagraphs (D) and (G) of subsection (d)(5).
``(ii) Hospitals paid under section 1814.--In the case
of a hospital that is paid under section 1814(b)(3), the
Secretary may exempt such hospitals provided that States
paid under such section submit an annual report to the
Secretary describing how a similar program in the State for
a participating hospital or hospitals achieves or surpasses
the measured results in terms of patient health outcomes
and cost savings established herein with respect to this
``(3) Adjustment factor.--
``(A) In general.--For purposes of paragraph (1), the
adjustment factor under this paragraph for an applicable
hospital for a fiscal year is equal to the greater of--
``(i) the ratio described in subparagraph (B) for the
hospital for the applicable period (as defined in paragraph
(5)(D)) for such fiscal year; or
``(ii) the floor adjustment factor specified in
subparagraph (C).
``(B) Ratio.--The ratio described in this subparagraph for
a hospital for an applicable period is equal to 1 minus the
ratio of--
``(i) the aggregate payments for excess readmissions
(as defined in paragraph (4)(A)) with respect to an
applicable hospital for the applicable period; and
``(ii) the aggregate payments for all discharges (as
defined in paragraph (4)(B)) with respect to such
applicable hospital for such applicable period.
``(C) Floor adjustment factor.--For purposes of
subparagraph (A), the floor adjustment factor specified in this
subparagraph for--
``(i) fiscal year 2013 is 0.99;
``(ii) fiscal year 2014 is 0.98; or
``(iii) fiscal year 2015 and subsequent fiscal years is
``(4) Aggregate payments, excess readmission ratio defined.--
For purposes of this subsection:
``(A) Aggregate payments for excess readmissions.--The term
`aggregate payments for excess readmissions' means, for a
hospital for an applicable period, the sum, for applicable
conditions (as defined in paragraph (5)(A)), of the product,
for each applicable condition, of--
``(i) the base operating DRG payment amount for such
hospital for such applicable period for such condition;
``(ii) the number of admissions for such condition for
such hospital for such applicable period; and
``(iii) the excess readmissions ratio (as defined in
subparagraph (C)) for such hospital for such applicable
period minus 1.
``(B) Aggregate payments for all discharges.--The term
`aggregate payments for all discharges' means, for a hospital
for an applicable period, the sum of the base operating DRG
payment amounts for all discharges for all conditions from such
hospital for such applicable period.
``(C) Excess readmission ratio.--
`excess readmissions ratio' means, with respect to an
applicable condition for a hospital for an applicable
period, the ratio (but not less than 1.0) of--
``(I) the risk adjusted readmissions based on
actual readmissions, as determined consistent with a
readmission measure methodology that has been endorsed
under paragraph (5)(A)(ii)(I), for an applicable
hospital for such condition with respect to such
applicable period; to
``(II) the risk adjusted expected readmissions (as
determined consistent with such a methodology) for such
``(ii) Exclusion of certain readmissions.--For purposes
of clause (i), with respect to a hospital, excess
readmissions shall not include readmissions for an
applicable condition for which there are fewer than a
minimum number (as determined by the Secretary) of
discharges for such applicable condition for the applicable
period and such hospital.
``(A) Applicable condition.--The term `applicable
condition' means, subject to subparagraph (B), a condition or
procedure selected by the Secretary among conditions and
procedures for which--
``(i) readmissions (as defined in subparagraph (E))
that represent conditions or procedures that are high
volume or high expenditures under this title (or other
criteria specified by the Secretary); and
``(ii) measures of such readmissions--
``(I) have been endorsed by the entity with a
contract under section 1890(a); and
``(II) such endorsed measures have exclusions for
readmissions that are unrelated to the prior discharge
(such as a planned readmission or transfer to another
applicable hospital).
``(B) Expansion of applicable conditions.--Beginning with
fiscal year 2015, the Secretary shall, to the extent
practicable, expand the applicable conditions beyond the 3
conditions for which measures have been endorsed as described
in subparagraph (A)(ii)(I) as of the date of the enactment of
this subsection to the additional 4 conditions that have been
identified by the Medicare Payment Advisory Commission in its
report to Congress in June 2007 and to other conditions and
procedures as determined appropriate by the Secretary. In
expanding such applicable conditions, the Secretary shall seek
the endorsement described in subparagraph (A)(ii)(I) but may
apply such measures without such an endorsement in the case of
a specified area or medical topic determined appropriate by the
Secretary for which a feasible and practical measure has not
been endorsed by the entity with a contract under section
1890(a) as long as due consideration is given to measures that
have been endorsed or adopted by a consensus organization
identified by the Secretary.
``(C) Applicable hospital.--The term `applicable hospital'
means a subsection (d) hospital or a hospital that is paid
under section 1814(b)(3), as the case may be.
``(D) Applicable period.--The term `applicable period'
means, with respect to a fiscal year, such period as the
Secretary shall specify.
``(E) Readmission.--The term `readmission' means, in the
case of an individual who is discharged from an applicable
hospital, the admission of the individual to the same or
another applicable hospital within a time period specified by
the Secretary from the date of such discharge. Insofar as the
discharge relates to an applicable condition for which there is
an endorsed measure described in subparagraph (A)(ii)(I), such
time period (such as 30 days) shall be consistent with the time
period specified for such measure.
available to the public regarding readmission rates of each
subsection (d) hospital under the program.
Secretary shall ensure that a subsection (d) hospital has the
``(A) The determination of base operating DRG payment
amounts.
``(B) The methodology for determining the adjustment factor
under paragraph (3), including excess readmissions ratio under
paragraph (4)(C), aggregate payments for excess readmissions
under paragraph (4)(A), and aggregate payments for all
discharges under paragraph (4)(B), and applicable periods and
applicable conditions under paragraph (5).
``(C) The measures of readmissions as described in
paragraph (5)(A)(ii).
``(8) Readmission rates for all patients.--
``(A) Calculation of readmission.--The Secretary shall
calculate readmission rates for all patients (as defined in
subparagraph (D)) for a specified hospital (as defined in
subparagraph (D)(ii)) for an applicable condition (as defined
in paragraph (5)(B)) and other conditions deemed appropriate by
the Secretary for an applicable period (as defined in paragraph
(5)(D)) in the same manner as used to calculate such
readmission rates for hospitals with respect to this title and
posted on the CMS Hospital Compare website.
``(B) Posting of hospital specific all patient readmission
rates.--The Secretary shall make information on all patient
readmission rates calculated under subparagraph (A) available
on the CMS Hospital Compare website in a form and manner
determined appropriate by the Secretary. The Secretary may also
make other information determined appropriate by the Secretary
available on such website.
``(C) Hospital submission of all patient data.--
``(i) Except as provided for in clause (ii), each
specified hospital (as defined in subparagraph (D)(ii))
shall submit to the Secretary, in a form, manner and time
specified by the Secretary, data and information determined
necessary by the Secretary for the Secretary to calculate
the all patient readmission rates described in subparagraph
``(ii) Instead of a specified hospital submitting to
the Secretary the data and information described in clause
(i), such data and information may be submitted to the
Secretary, on behalf of such a specified hospital, by a
state or an entity determined appropriate by the Secretary.
``(D) Definitions.--For purposes of this paragraph:
``(i) The term `all patients' means patients who are
treated on an inpatient basis and discharged from a
specified hospital (as defined in clause (ii)).
``(ii) The term `specified hospital' means a subsection
(d) hospital, hospitals described in clauses (i) through
(v) of subsection (d)(1)(B) and, as determined feasible and
appropriate by the Secretary, other hospitals not otherwise
described in this subparagraph.''.
(b) Quality Improvement.--Part S of title III of the Public Health
Service Act, as amended by section 3015, is further amended by adding
at the end the following:
``SEC. 399KK. QUALITY IMPROVEMENT PROGRAM FOR HOSPITALS WITH A HIGH
SEVERITY ADJUSTED READMISSION RATE.
``(a) Establishment.--
enactment of this section, the Secretary shall make available a
program for eligible hospitals to improve their readmission rates
through the use of patient safety organizations (as defined in
section 921(4)).
``(2) Eligible hospital defined.--In this subsection, the term
`eligible hospital' means a hospital that the Secretary determines
has a high rate of risk adjusted readmissions for the conditions
described in section 1886(q)(8)(A) of the Social Security Act and
has not taken appropriate steps to reduce such readmissions and
improve patient safety as evidenced through historically high rates
of readmissions, as determined by the Secretary.
``(3) Risk adjustment.--The Secretary shall utilize appropriate
risk adjustment measures to determine eligible hospitals.
``(b) Report to the Secretary.--As determined appropriate by the
Secretary, eligible hospitals and patient safety organizations working
with those hospitals shall report to the Secretary on the processes
employed by the hospital to improve readmission rates and the impact of
such processes on readmission rates.''.
(a) In General.--The Secretary shall establish a Community-Based
Care Transitions Program under which the Secretary provides funding to
eligible entities that furnish improved care transition services to
high-risk Medicare beneficiaries.
(b) Definitions.--In this section:
(1) Eligible entity.--The term ``eligible entity'' means the
(A) A subsection (d) hospital (as defined in section
1886(d)(1)(B) of the Social Security Act (42 U.S.C.
1395ww(d)(1)(B))) identified by the Secretary as having a high
readmission rate, such as under section 1886(q) of the Social
Security Act, as added by section 3025.
(B) An appropriate community-based organization that
provides care transition services under this section across a
continuum of care through arrangements with subsection (d)
hospitals (as so defined) to furnish the services described in
subsection (c)(2)(B)(i) and whose governing body includes
sufficient representation of multiple health care stakeholders
(including consumers).
(2) High-risk medicare beneficiary.--The term ``high-risk
Medicare beneficiary'' means a Medicare beneficiary who has
attained a minimum hierarchical condition category score, as
determined by the Secretary, based on a diagnosis of multiple
chronic conditions or other risk factors associated with a hospital
readmission or substandard transition into post-hospitalization
care, which may include 1 or more of the following:
(A) Cognitive impairment.
(B) Depression.
(C) A history of multiple readmissions.
(D) Any other chronic disease or risk factor as determined
(3) Medicare beneficiary.--The term ``Medicare beneficiary''
means an individual who is entitled to benefits under part A of
title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and
enrolled under part B of such title, but not enrolled under part C
of such title.
(4) Program.--The term ``program'' means the program conducted
(5) Readmission.--The term ``readmission'' has the meaning
given such term in section 1886(q)(5)(E) of the Social Security
Act, as added by section 3025.
(6) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
(1) Duration.--
(A) In general.--The program shall be conducted for a 5-
year period, beginning January 1, 2011.
(B) Expansion.--The Secretary may expand the duration and
the scope of the program, to the extent determined appropriate
by the Secretary, if the Secretary determines (and the Chief
Actuary of the Centers for Medicare & Medicaid Services, with
respect to spending under this title, certifies) that such
expansion would reduce spending under this title without
reducing quality.
(2) Application; participation.--
(i) Application.--An eligible entity seeking to
participate in the program shall submit an application to
the Secretary at such time, in such manner, and containing
such information as the Secretary may require.
(ii) Partnership.--If an eligible entity is a hospital,
such hospital shall enter into a partnership with a
community-based organization to participate in the program.
(B) Intervention proposal.--Subject to subparagraph (C), an
application submitted under subparagraph (A)(i) shall include a
detailed proposal for at least 1 care transition intervention,
which may include the following:
(i) Initiating care transition services for a high-risk
Medicare beneficiary not later than 24 hours prior to the
discharge of the beneficiary from the eligible entity.
(ii) Arranging timely post-discharge follow-up services
to the high-risk Medicare beneficiary to provide the
beneficiary (and, as appropriate, the primary caregiver of
the beneficiary) with information regarding responding to
symptoms that may indicate additional health problems or a
deteriorating condition.
(iii) Providing the high-risk Medicare beneficiary
(and, as appropriate, the primary caregiver of the
beneficiary) with assistance to ensure productive and
timely interactions between patients and post-acute and
outpatient providers.
(iv) Assessing and actively engaging with a high-risk
Medicare beneficiary (and, as appropriate, the primary
caregiver of the beneficiary) through the provision of
self-management support and relevant information that is
specific to the beneficiary's condition.
(v) Conducting comprehensive medication review and
management (including, if appropriate, counseling and self-
management support).
(C) Limitation.--A care transition intervention proposed
under subparagraph (B) may not include payment for services
required under the discharge planning process described in
section 1861(ee) of the Social Security Act (42 U.S.C.
1395x(ee)).
(3) Selection.--In selecting eligible entities to participate
in the program, the Secretary shall give priority to eligible
(A) participate in a program administered by the
Administration on Aging to provide concurrent care transitions
interventions with multiple hospitals and practitioners; or
(B) provide services to medically underserved populations,
small communities, and rural areas.
(d) Implementation.--Notwithstanding any other provision of law,
the Secretary may implement the provisions of this section by program
instruction or otherwise.
(e) Waiver Authority.--The Secretary may waive such requirements of
titles XI and XVIII of the Social Security Act as may be necessary to
carry out the program.
(f) Funding.--For purposes of carrying out this section, the
Secretary of Health and Human Services shall provide for the transfer,
from the Federal Hospital Insurance Trust Fund under section 1817 of
the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary
Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C.
1395t), in such proportion as the Secretary determines appropriate, of
$500,000,000, to the Centers for Medicare & Medicaid Services Program
Management Account for the period of fiscal years 2011 through 2015.
Amounts transferred under the preceding sentence shall remain available
(a) In General.--Subsection (d)(3) of section 5007 of the Deficit
Reduction Act of 2005 (Public Law 109-171) is amended by inserting
``(or September 30, 2011, in the case of a demonstration project in
operation as of October 1, 2008)'' after ``December 31, 2009''.
(b) Funding.--
(1) In general.--Subsection (f)(1) of such section is amended
by inserting ``and for fiscal year 2010, $1,600,000,'' after
``$6,000,000,''.
(2) Availability.--Subsection (f)(2) of such section is amended
by striking ``2010'' and inserting ``2014 or until expended''.
(c) Reports.--
(1) Quality improvement and savings.--Subsection (e)(3) of such
section is amended by striking ``December 1, 2008'' and inserting
``March 31, 2011''.
(2) Final report.--Subsection (e)(4) of such section is amended
by striking ``May 1, 2010'' and inserting ``March 31, 2013''.
PART I--ENSURING BENEFICIARY ACCESS TO PHYSICIAN CARE AND OTHER
Section 1848(d) of the Social Security Act (42 U.S.C. 1395w-4(d))
is amended by adding at the end the following new paragraph:
``(10) Update for 2010.--
``(A) In general.--Subject to paragraphs (7)(B), (8)(B),
and (9)(B), in lieu of the update to the single conversion
factor established in paragraph (1)(C) that would otherwise
apply for 2010, the update to the single conversion factor
shall be 0.5 percent.
``(B) No effect on computation of conversion factor for
2011 and subsequent years.--The conversion factor under this
subsection shall be computed under paragraph (1)(A) for 2011
and subsequent years as if subparagraph (A) had never
applied.''.
SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR AND REVISIONS
TO THE PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT UNDER THE
MEDICARE PHYSICIAN FEE SCHEDULE.
(a) Extension of Work GPCI Floor.--Section 1848(e)(1)(E) of the
Social Security Act (42 U.S.C. 1395w-4(e)(1)(E)) is amended by striking
``before January 1, 2010'' and inserting ``before January 1, 2011''.
(b) Practice Expense Geographic Adjustment for 2010 and Subsequent
Years.--Section 1848(e)(1) of the Social Security Act (42 U.S.C.
1395w4(e)(1)) is amended--
(1) in subparagraph (A), by striking ``and (G)'' and inserting
``(G), and (H)''; and
``(H) Practice expense geographic adjustment for 2010 and
subsequent years.--
``(i) For 2010.--Subject to clause (iii), for services
furnished during 2010, the employee wage and rent portions
of the practice expense geographic index described in
subparagraph (A)(i) shall reflect \3/4\ of the difference
between the relative costs of employee wages and rents in
each of the different fee schedule areas and the national
average of such employee wages and rents.
``(ii) For 2011.--Subject to clause (iii), for services
``(iii) Hold harmless.--The practice expense portion of
the geographic adjustment factor applied in a fee schedule
area for services furnished in 2010 or 2011 shall not, as a
result of the application of clause (i) or (ii), be reduced
below the practice expense portion of the geographic
adjustment factor under subparagraph (A)(i) (as calculated
prior to the application of such clause (i) or (ii),
respectively) for such area for such year.
``(iv) Analysis.--The Secretary shall analyze current
methods of establishing practice expense geographic
adjustments under subparagraph (A)(i) and evaluate data
that fairly and reliably establishes distinctions in the
costs of operating a medical practice in the different fee
schedule areas. Such analysis shall include an evaluation
``(I) The feasibility of using actual data or
reliable survey data developed by medical organizations
on the costs of operating a medical practice, including
office rents and non-physician staff wages, in
different fee schedule areas.
``(II) The office expense portion of the practice
expense geographic adjustment described in subparagraph
(A)(i), including the extent to which types of office
expenses are determined in local markets instead of
national markets.
``(III) The weights assigned to each of the
categories within the practice expense geographic
adjustment described in subparagraph (A)(i).
``(v) Revision for 2012 and subsequent years.--As a
result of the analysis described in clause (iv), the
Secretary shall, not later than January 1, 2012, make
appropriate adjustments to the practice expense geographic
adjustment described in subparagraph (A)(i) to ensure
accurate geographic adjustments across fee schedule areas,
``(I) basing the office rents component and its
weight on office expenses that vary among fee schedule
areas; and
``(II) considering a representative range of
professional and non-professional personnel employed in
a medical office based on the use of the American
Community Survey data or other reliable data for wage
adjustments.
Such adjustments shall be made without regard to
adjustments made pursuant to clauses (i) and (ii) and shall
be made in a budget neutral manner.''.
Section 1833(g)(5) of the Social Security Act (42 U.S.C.
1395l(g)(5)) is amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (as enacted into law by section
1(a)(6) of Public Law 106-554), as amended by section 732 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law
110-173), and section 136 of the Medicare Improvements for Patients and
Providers Act of 2008 (Public Law 110-275), is amended by striking
``and 2009'' and inserting ``2009, and 2010''.
(a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended--
(1) in the matter preceding clause (i)--
(A) by striking ``2007, and for'' and inserting ``2007,
for''; and
(B) by striking ``2010'' and inserting ``2010, and for such
services furnished on or after April 1, 2010, and before
January 1, 2011,''; and
(2) in each of clauses (i) and (ii), by inserting ``, and on or
after April 1, 2010, and before January 1, 2011'' after ``January
1, 2010'' each place it appears.
(b) Air Ambulance.--Section 146(b)(1) of the Medicare Improvements
for Patients and Providers Act of 2008 (Public Law 110-275) is amended
by striking ``December 31, 2009'' and inserting ``December 31, 2009,
and during the period beginning on April 1, 2010, and ending on January
1, 2011''.
(c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social
Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking
``2010'' and inserting ``2010, and on or after April 1, 2010, and
before January 1, 2011''.
HOSPITAL SERVICES AND OF MORATORIUM ON THE ESTABLISHMENT
OF CERTAIN HOSPITALS AND FACILITIES.
(a) Extension of Certain Payment Rules.--Section 114(c) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww
note), as amended by section 4302(a) of the American Recovery and
Reinvestment Act (Public Law 111-5), is further amended by striking
``3-year period'' each place it appears and inserting ``4-year
period''.
(b) Extension of Moratorium.--Section 114(d)(1) of such Act (42
U.S.C. 1395ww note), in the matter preceding subparagraph (A), is
amended by striking ``3-year period'' and inserting ``4-year period''.
Section 138(a)(1) of the Medicare Improvements for Patients and
Providers Act of 2008 (Public Law 110-275) is amended by striking
``December 31, 2009'' and inserting ``December 31, 2010''.
(a) Ordering Post-Hospital Extended Care Services.--
(1) In general.--Section 1814(a)(2) of the Social Security Act
(42 U.S.C. 1395f(a)(2)), in the matter preceding subparagraph (A),
is amended by striking ``or clinical nurse specialist'' and
inserting ``, a clinical nurse specialist, or a physician assistant
(as those terms are defined in section 1861(aa)(5))'' after ``nurse
practitioner''.
(2) Conforming amendment.--Section 1814(a) of the Social
Security Act (42 U.S.C. 1395f(a)) is amended, in the second
sentence, by striking ``or clinical nurse specialist'' and
inserting ``clinical nurse specialist, or physician assistant''
after ``nurse practitioner,''.
apply to items and services furnished on or after January 1, 2011.
U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare
Improvements for Patients and Providers Act of 2008 (Public Law 100-
275), is amended--
(1) in subparagraph (F)(i)--
(A) by inserting ``and subparagraph (G)'' after ``clause
(ii)''; and
(B) by inserting ``, except that the Secretary shall not
require a pharmacy to have submitted to the Secretary such
evidence of accreditation prior to January 1, 2011'' before the
semicolon at the end; and
``(G) Application of accreditation requirement to certain
pharmacies.--
``(i) In general.--With respect to items and services
furnished on or after January 1, 2011, in implementing
quality standards under this paragraph--
``(I) subject to subclause (II), in applying such
standards and the accreditation requirement of
subparagraph (F)(i) with respect to pharmacies
described in clause (ii) furnishing such items and
services, such standards and accreditation requirement
shall not apply to such pharmacies; and
``(II) the Secretary may apply to such pharmacies
an alternative accreditation requirement established by
the Secretary if the Secretary determines such
alternative accreditation requirement is more
appropriate for such pharmacies.
``(ii) Pharmacies described.--A pharmacy described in
this clause is a pharmacy that meets each of the following
``(I) The total billings by the pharmacy for such
items and services under this title are less than 5
percent of total pharmacy sales, as determined based on
the average total pharmacy sales for the previous 3
calendar years, 3 fiscal years, or other yearly period
``(II) The pharmacy has been enrolled under section
1866(j) as a supplier of durable medical equipment,
prosthetics, orthotics, and supplies, has been issued
(which may include the renewal of) a provider number
for at least 5 years, and for which a final adverse
action (as defined in section 424.57(a) of title 42,
Code of Federal Regulations) has not been imposed in
the past 5 years.
``(III) The pharmacy submits to the Secretary an
attestation, in a form and manner, and at a time,
specified by the Secretary, that the pharmacy meets the
criteria described in subclauses (I) and (II). Such
attestation shall be subject to section 1001 of title
18, United States Code.
``(IV) The pharmacy agrees to submit materials as
requested by the Secretary, or during the course of an
audit conducted on a random sample of pharmacies
selected annually, to verify that the pharmacy meets
the criteria described in subclauses (I) and (II).
Materials submitted under the preceding sentence shall
include a certification by an accountant on behalf of
the pharmacy or the submission of tax returns filed by
the pharmacy during the relevant periods, as requested
by the Secretary.''.
(b) Administration.--Notwithstanding any other provision of law,
the Secretary may implement the amendments made by subsection (a) by
program instruction or otherwise.
(c) Rule of Construction.--Nothing in the provisions of or
amendments made by this section shall be construed as affecting the
application of an accreditation requirement for pharmacies to qualify
for bidding in a competitive acquisition area under section 1847 of the
Social Security Act (42 U.S.C. 1395w-3).
U.S.C. 1395p) is amended by adding at the end the following new
``(l)(1) In the case of any individual who is a covered beneficiary
(as defined in section 1072(5) of title 10, United States Code) at the
time the individual is entitled to part A under section 226(b) or
section 226A and who is eligible to enroll but who has elected not to
enroll (or to be deemed enrolled) during the individual's initial
enrollment period, there shall be a special enrollment period described
in paragraph (2).
``(2) The special enrollment period described in this paragraph,
with respect to an individual, is the 12-month period beginning on the
day after the last day of the initial enrollment period of the
individual or, if later, the 12-month period beginning with the month
the individual is notified of enrollment under this section.
``(3) In the case of an individual who enrolls during the special
enrollment period provided under paragraph (1), the coverage period
under this part shall begin on the first day of the month in which the
individual enrolls, or, at the option of the individual, the first
month after the end of the individual's initial enrollment period.
``(4) An individual may only enroll during the special enrollment
period provided under paragraph (1) one time during the individual's
``(5) The Secretary shall ensure that the materials relating to
coverage under this part that are provided to an individual described
in paragraph (1) prior to the individual's initial enrollment period
contain information concerning the impact of not enrolling under this
part, including the impact on health care benefits under the TRICARE
program under chapter 55 of title 10, United States Code.
``(6) The Secretary of Defense shall collaborate with the Secretary
of Health and Human Services and the Commissioner of Social Security to
provide for the accurate identification of individuals described in
paragraph (1). The Secretary of Defense shall provide such individuals
with notification with respect to this subsection. The Secretary of
Defense shall collaborate with the Secretary of Health and Human
Services and the Commissioner of Social Security to ensure appropriate
follow up pursuant to any notification provided under the preceding
sentence.''.
apply to elections made with respect to initial enrollment periods
that end after the date of the enactment of this Act.
(b) Waiver of Increase of Premium.--Section 1839(b) of the Social
Security Act (42 U.S.C. 1395r(b)) is amended by striking ``section
1837(i)(4)'' and inserting ``subsection (i)(4) or (l) of section
1837''.
(a) Payment.--
U.S.C. 1395w-4) is amended--
(i) in paragraph (4)(B), by inserting ``, and for 2010
and 2011, dual-energy x-ray absorptiometry services (as
described in paragraph (6))'' before the period at the end;
(ii) by adding at the end the following new paragraph:
``(6) Treatment of bone mass scans.--For dual-energy x-ray
absorptiometry services (identified in 2006 by HCPCS codes 76075
and 76077 (and any succeeding codes)) furnished during 2010 and
2011, instead of the payment amount that would otherwise be
determined under this section for such years, the payment amount
shall be equal to 70 percent of the product of--
``(A) the relative value for the service (as determined in
subsection (c)(2)) for 2006;
``(B) the conversion factor (established under subsection
(d)) for 2006; and
``(C) the geographic adjustment factor (established under
subsection (e)(2)) for the service for the fee schedule area
for 2010 and 2011, respectively.''; and
(B) in subsection (c)(2)(B)(iv)--
(i) in subclause (II), by striking ``and'' at the end;
(ii) in subclause (III), by striking the period at the
end and inserting ``; and''; and
``(IV) subsection (b)(6) shall not be taken into
account in applying clause (ii)(II) for 2010 or
(2) Implementation.--Notwithstanding any other provision of
law, the Secretary may implement the amendments made by paragraph
(1) by program instruction or otherwise.
(b) Study and Report by the Institute of Medicine.--
(1) In general.--The Secretary of Health and Human Services is
authorized to enter into an agreement with the Institute of
Medicine of the National Academies to conduct a study on the
ramifications of Medicare payment reductions for dual-energy x-ray
absorptiometry (as described in section 1848(b)(6) of the Social
Security Act, as added by subsection (a)(1)) during 2007, 2008, and
2009 on beneficiary access to bone mass density tests.
(2) Report.--An agreement entered into under paragraph (1)
shall provide for the Institute of Medicine to submit to the
Secretary and to Congress a report containing the results of the
study conducted under such paragraph.
Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C.
1395iii) is amended by striking ``$22,290,000,000'' and inserting
``$0''.
(a) Demonstration Project.--
this section referred to as the ``Secretary'') shall conduct a
demonstration project under part B title XVIII of the Social
Security Act under which separate payments are made under such part
for complex diagnostic laboratory tests provided to individuals
under such part. Under the demonstration project, the Secretary
shall establish appropriate payment rates for such tests.
(2) Covered complex diagnostic laboratory test defined.--In
this section, the term ``complex diagnostic laboratory test'' means
a diagnostic laboratory test--
(A) that is an analysis of gene protein expression,
topographic genotyping, or a cancer chemotherapy sensitivity
assay;
(B) that is determined by the Secretary to be a laboratory
test for which there is not an alternative test having
equivalent performance characteristics;
(C) which is billed using a Health Care Procedure Coding
System (HCPCS) code other than a not otherwise classified code
under such Coding System;
(D) which is approved or cleared by the Food and Drug
Administration or is covered under title XVIII of the Social
Security Act; and
(E) is described in section 1861(s)(3) of the Social
Security Act (42 U.S.C. 1395x(s)(3)).
(3) Separate payment defined.--In this section, the term
``separate payment'' means direct payment to a laboratory
(including a hospital-based or independent laboratory) that
performs a complex diagnostic laboratory test with respect to a
specimen collected from an individual during a period in which the
individual is a patient of a hospital if the test is performed
after such period of hospitalization and if separate payment would
not otherwise be made under title XVIII of the Social Security Act
by reason of sections 1862(a)(14) and 1866(a)(1)(H)(i) of the such
Act (42 U.S.C. 1395y(a)(14); 42 U.S.C. 1395cc(a)(1)(H)(i)).
(b) Duration.--Subject to subsection (c)(2), the Secretary shall
conduct the demonstration project under this section for the 2-year
period beginning on July 1, 2011.
(c) Payments and Limitation.--Payments under the demonstration
project under this section shall--
(1) be made from the Federal Supplemental Medical Insurance
Trust Fund under section 1841 of the Social Security Act (42 U.S.C.
1395t); and
(2) may not exceed $100,000,000.
(d) Report.--Not later than 2 years after the completion of the
demonstration project under this section, the Secretary shall submit to
Congress a report on the project. Such report shall include--
(1) an assessment of the impact of the demonstration project on
access to care, quality of care, health outcomes, and expenditures
under title XVIII of the Social Security Act (including any savings
under such title); and
(2) such recommendations as the Secretary determines
(e) Implementation Funding.--For purposes of administering this
section (including preparing and submitting the report under subsection
(d)), the Secretary shall provide for the transfer, from the Federal
Supplemental Medical Insurance Trust Fund under section 1841 of the
Social Security Act (42 U.S.C. 1395t), to the Centers for Medicare &
Medicaid Services Program Management Account, of $5,000,000. Amounts
Section 1833(a)(1)(K) of the Social Security Act (42 U.S.C.
1395l(a)(1)(K)) is amended by inserting ``(or 100 percent for services
furnished on or after January 1, 2011)'' after ``1992, 65 percent''.
(a) In General.--Section 1833(t)(7)(D)(i) of the Social Security
Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended--
(1) in subclause (II)--
(A) in the first sentence, by striking ``2010''and
inserting ``2011''; and
(B) in the second sentence, by striking ``or 2009'' and
inserting ``, 2009, or 2010''; and
(2) in subclause (III), by striking ``January 1, 2010'' and
inserting ``January 1, 2011''.
(b) Permitting All Sole Community Hospitals To Be Eligible for Hold
Harmless.--Section 1833(t)(7)(D)(i)(III) of the Social Security Act (42
U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at the end the
following new sentence: ``In the case of covered OPD services furnished
on or after January 1, 2010, and before January 1, 2011, the preceding
sentence shall be applied without regard to the 100-bed limitation.''.
CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO
HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.
Section 416(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section
105 of division B of the Tax Relief and Health Care Act of 2006 (42
U.S.C. 1395l note) and section 107 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (42 U.S.C. 1395l note), is amended by inserting
``or during the 1-year period beginning on July 1, 2010'' before the
(a) One-year Extension.--Section 410A of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173;
117 Stat. 2272) is amended by adding at the end the following new
``(g) One-Year Extension of Demonstration Program.--
subsection, the Secretary shall conduct the demonstration program
under this section for an additional 1-year period (in this section
referred to as the `1-year extension period') that begins on the
date immediately following the last day of the initial 5-year
period under subsection (a)(5).
``(2) Expansion of demonstration states.--Notwithstanding
subsection (a)(2), during the 1-year extension period, the
Secretary shall expand the number of States with low population
densities determined by the Secretary under such subsection to 20.
In determining which States to include in such expansion, the
Secretary shall use the same criteria and data that the Secretary
used to determine the States under such subsection for purposes of
the initial 5-year period.
``(3) Increase in maximum number of hospitals participating in
the demonstration program.--Notwithstanding subsection (a)(4),
during the 1-year extension period, not more than 30 rural
community hospitals may participate in the demonstration program
``(4) No affect on hospitals in demonstration program on date
of enactment.--In the case of a rural community hospital that is
participating in the demonstration program under this section as of
the last day of the initial 5-year period, the Secretary shall
provide for the continued participation of such rural community
hospital in the demonstration program during the 1-year extension
period unless the rural community hospital makes an election, in
such form and manner as the Secretary may specify, to discontinue
such participation.''.
(b) Conforming Amendments.--Subsection (a)(5) of section 410A of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Public Law 108-173; 117 Stat. 2272) is amended by inserting ``(in
this section referred to as the `initial 5-year period') and, as
provided in subsection (g), for the 1-year extension period'' after
``5-year period''.
(c) Technical Amendments.--
(1) Subsection (b) of section 410A of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-
173; 117 Stat. 2272) is amended--
(A) in paragraph (1)(B)(ii), by striking ``2)'' and
inserting ``2))''; and
(B) in paragraph (2), by inserting ``cost'' before
``reporting period'' the first place such term appears in each
of subparagraphs (A) and (B).
(2) Subsection (f)(1) of section 410A of the Medicare
(Public Law 108-173; 117 Stat. 2272) is amended--
(A) in subparagraph (A)(ii), by striking ``paragraph (2)''
and inserting ``subparagraph (B)''; and
(B) in subparagraph (B), by striking ``paragraph (1)(B)''
and inserting ``subparagraph (A)(ii)''.
(a) Extension of Payment Methodology.--Section 1886(d)(5)(G) of the
Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
(1) in clause (i), by striking ``October 1, 2011'' and
inserting ``October 1, 2012''; and
(2) in clause (ii)(II), by striking ``October 1, 2011'' and
inserting ``October 1, 2012''.
(1) Extension of target amount.--Section 1886(b)(3)(D) of the
Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended--
(A) in the matter preceding clause (i), by striking
``October 1, 2011'' and inserting ``October 1, 2012''; and
(B) in clause (iv), by striking ``through fiscal year
2011'' and inserting ``through fiscal year 2012''.
(2) Permitting hospitals to decline reclassification.--Section
13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42
U.S.C. 1395ww note) is amended by striking ``through fiscal year
Section 1886(d)(12) of the Social Security Act (42 U.S.C.
1395ww(d)(12)) is amended--
(1) in subparagraph (A), by inserting ``or (D)'' after
``subparagraph (B)'';
(2) in subparagraph (B), in the matter preceding clause (i), by
striking ``The Secretary'' and inserting ``For discharges occurring
in fiscal years 2005 through 2010 and for discharges occurring in
fiscal year 2013 and subsequent fiscal years, the Secretary'';
(3) in subparagraph (C)(i)--
(A) by inserting ``(or, with respect to fiscal years 2011
and 2012, 15 road miles)'' after ``25 road miles''; and
(B) by inserting ``(or, with respect to fiscal years 2011
and 2012, 1,500 discharges of individuals entitled to, or
enrolled for, benefits under part A)'' after ``800
discharges''; and
``(D) Temporary applicable percentage increase.--For
discharges occurring in fiscal years 2011 and 2012, the
Secretary shall determine an applicable percentage increase for
purposes of subparagraph (A) using a continuous linear sliding
scale ranging from 25 percent for low-volume hospitals with 200
or fewer discharges of individuals entitled to, or enrolled
for, benefits under part A in the fiscal year to 0 percent for
low-volume hospitals with greater than 1,500 discharges of such
individuals in the fiscal year.''.
SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION PROJECT ON COMMUNITY
HEALTH INTEGRATION MODELS IN CERTAIN RURAL COUNTIES.
(a) Removal of Limitation on Number of Eligible Counties
Selected.--Subsection (d)(3) of section 123 of the Medicare
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395i-4
note) is amended by striking ``not more than 6''.
(b) Removal of References to Rural Health Clinic Services and
Inclusion of Physicians' Services in Scope of Demonstration Project.--
Such section 123 is amended--
(1) in subsection (d)(4)(B)(i)(3), by striking subclause (III);
(2) in subsection (j)--
(A) in paragraph (8), by striking subparagraph (B) and
``(B) Physicians' services (as defined in section 1861(q)
of the Social Security Act (42 U.S.C. 1395x(q)).'';
(B) by striking paragraph (9); and
(C) by redesignating paragraph (10) as paragraph (9).
SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE PAYMENTS FOR HEALTH
CARE PROVIDERS SERVING IN RURAL AREAS.
(a) Study.--The Medicare Payment Advisory Commission shall conduct
a study on the adequacy of payments for items and services furnished by
providers of services and suppliers in rural areas under the Medicare
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.). Such study shall include an analysis of--
(1) any adjustments in payments to providers of services and
suppliers that furnish items and services in rural areas;
(2) access by Medicare beneficiaries to items and services in
rural areas;
(3) the adequacy of payments to providers of services and
suppliers that furnish items and services in rural areas; and
(4) the quality of care furnished in rural areas.
(b) Report.--Not later than January 1, 2011, the Medicare Payment
Advisory Commission shall submit to Congress a report containing the
results of the study conducted under subsection (a). Such report shall
include recommendations on appropriate modifications to any adjustments
in payments to providers of services and suppliers that furnish items
and services in rural areas, together with recommendations for such
legislation and administrative action as the Medicare Payment Advisory
Commission determines appropriate.
(a) In General.--Subsections (g)(2)(A) and (l)(8) of section 1834
of the Social Security Act (42 U.S.C. 1395m) are each amended by
inserting ``101 percent of'' before ``the reasonable costs''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect as if included in the enactment of section 405(a) of the
(Public Law 108-173; 117 Stat. 2266).
(a) Authorization.--Section 1820(j) of the Social Security Act (42
U.S.C. 1395i-4(j)) is amended--
(1) by striking ``2010, and for'' and inserting ``2010, for'';
(2) by inserting ``and for making grants to all States under
subsection (g), such sums as may be necessary in each of fiscal
years 2011 and 2012, to remain available until expended'' before
the period at the end.
(b) Use of Funds.--Section 1820(g)(3) of the Social Security Act
(42 U.S.C. 1395i-4(g)(3)) is amended--
(1) in subparagraph (A), by inserting ``and to assist such
hospitals in participating in delivery system reforms under the
provisions of and amendments made by the Patient Protection and
Affordable Care Act, such as value-based purchasing programs,
accountable care organizations under section 1899, the National
pilot program on payment bundling under section 1866D, and other
delivery system reform programs determined appropriate by the
Secretary'' before the period at the end; and
(2) in subparagraph (E)--
(A) by striking ``, and to offset'' and inserting ``, to
offset''; and
(B) by inserting ``and to participate in delivery system
reforms under the provisions of and amendments made by the
Patient Protection and Affordable Care Act, such as value-based
purchasing programs, accountable care organizations under
section 1899, the National pilot program on payment bundling
under section 1866D, and other delivery system reform programs
determined appropriate by the Secretary'' before the period at
apply to grants made on or after January 1, 2010.
(a) Rebasing Home Health Prospective Payment Amount.--
(1) In general.--Section 1895(b)(3)(A) of the Social Security
Act (42 U.S.C. 1395fff(b)(3)(A)) is amended--
(A) in clause (i)(III), by striking ``For periods'' and
inserting ``Subject to clause (iii), for periods''; and
``(iii) Adjustment for 2013 and subsequent years.--
``(I) In general.--Subject to subclause (II), for
2013 and subsequent years, the amount (or amounts) that
would otherwise be applicable under clause (i)(III)
shall be adjusted by a percentage determined
appropriate by the Secretary to reflect such factors as
changes in the number of visits in an episode, the mix
of services in an episode, the level of intensity of
services in an episode, the average cost of providing
care per episode, and other factors that the Secretary
considers to be relevant. In conducting the analysis
under the preceding sentence, the Secretary may
consider differences between hospital-based and
freestanding agencies, between for-profit and nonprofit
agencies, and between the resource costs of urban and
rural agencies. Such adjustment shall be made before
the update under subparagraph (B) is applied for the
``(II) Transition.--The Secretary shall provide for
a 4-year phase-in (in equal increments) of the
adjustment under subclause (I), with such adjustment
being fully implemented for 2016. During each year of
such phase-in, the amount of any adjustment under
subclause (I) for the year may not exceed 3.5 percent
of the amount (or amounts) applicable under clause
(i)(III) as of the date of enactment of the Patient
(2) MedPAC study and report.--
(A) Study.--The Medicare Payment Advisory Commission shall
conduct a study on the implementation of the amendments made by
paragraph (1). Such study shall include an analysis of the
impact of such amendments on--
(i) access to care;
(ii) quality outcomes;
(iii) the number of home health agencies; and
(iv) rural agencies, urban agencies, for-profit
agencies, and nonprofit agencies.
(B) Report.--Not later than January 1, 2015, the Medicare
Payment Advisory Commission shall submit to Congress a report
on the study conducted under subparagraph (A), together with
recommendations for such legislation and administrative action
as the Commission determines appropriate.
(b) Program-specific Outlier Cap.--Section 1895(b) of the Social
Security Act (42 U.S.C. 1395fff(b)) is amended--
(1) in paragraph (3)(C), by striking ``the aggregate'' and all
that follows through the period at the end and inserting ``5
percent of the total payments estimated to be made based on the
prospective payment system under this subsection for the period.'';
(A) by striking ``Outliers.--The Secretary'' and inserting
the following: ``Outliers.--
Secretary'';
(B) in subparagraph (A), as added by subparagraph (A), by
striking ``5 percent'' and inserting ``2.5 percent''; and
``(B) Program specific outlier cap.--The estimated total
amount of additional payments or payment adjustments made under
subparagraph (A) with respect to a home health agency for a
year (beginning with 2011) may not exceed an amount equal to 10
percent of the estimated total amount of payments made under
this section (without regard to this paragraph) with respect to
the home health agency for the year.''.
(c) Application of the Medicare Rural Home Health Add-on Policy.--
Section 421 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283), as
amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public
Law 109-171; 120 Stat. 46), is amended--
(1) in the section heading, by striking ``one-year'' and
inserting ``temporary''; and
(A) by striking ``, and episodes'' and inserting ``,
episodes'';
(B) by inserting ``and episodes and visits ending on or
after April 1, 2010, and before January 1, 2016,'' after
``January 1, 2007,''; and
(C) by inserting ``(or, in the case of episodes and visits
ending on or after April 1, 2010, and before January 1, 2016, 3
percent)'' before the period at the end.
(d) Study and Report on the Development of Home Health Payment
Reforms in Order To Ensure Access to Care and Quality Services.--
study to evaluate the costs and quality of care among efficient
home health agencies relative to other such agencies in providing
ongoing access to care and in treating Medicare beneficiaries with
varying severity levels of illness. Such study shall include an
analysis of the following:
(A) Methods to revise the home health prospective payment
system under section 1895 of the Social Security Act (42 U.S.C.
1395fff) to more accurately account for the costs related to
patient severity of illness or to improving beneficiary access
to care, including--
(i) payment adjustments for services that may be under-
or over-valued;
(ii) necessary changes to reflect the resource use
relative to providing home health services to low-income
Medicare beneficiaries or Medicare beneficiaries living in
medically underserved areas;
(iii) ways the outlier payment may be improved to more
accurately reflect the cost of treating Medicare
beneficiaries with high severity levels of illness;
(iv) the role of quality of care incentives and
penalties in driving provider and patient behavior;
(v) improvements in the application of a wage index;
(vi) other areas determined appropriate by the
(B) The validity and reliability of responses on the OASIS
instrument with particular emphasis on questions that relate to
higher payment under the home health prospective payment system
and higher outcome scores under Home Care Compare.
(C) Additional research or payment revisions under the home
health prospective payment system that may be necessary to set
the payment rates for home health services based on costs of
high-quality and efficient home health agencies or to improve
Medicare beneficiary access to care.
(D) A timetable for implementation of any appropriate
changes based on the analysis of the matters described in
subparagraphs (A), (B), and (C).
(E) Other areas determined appropriate by the Secretary.
(2) Considerations.--In conducting the study under paragraph
(1), the Secretary shall consider whether certain factors should be
used to measure patient severity of illness and access to care,
such as--
(A) population density and relative patient access to care;
(B) variations in service costs for providing care to
individuals who are dually eligible under the Medicare and
Medicaid programs;
(C) the presence of severe or chronic diseases, as
evidenced by multiple, discontinuous home health episodes;
(D) poverty status, as evidenced by the receipt of
Supplemental Security Income under title XVI of the Social
(E) the absence of caregivers;
(F) language barriers;
(G) atypical transportation costs;
(H) security costs; and
(I) other factors determined appropriate by the Secretary.
(3) Report.--Not later than March 1, 2011, the Secretary shall
submit to Congress a report on the study conducted under paragraph
(1), together with recommendations for such legislation and
(4) Consultations.--In conducting the study under paragraph (1)
and preparing the report under paragraph (3), the Secretary shall
consult with--
(A) stakeholders representing home health agencies;
(B) groups representing Medicare beneficiaries;
(C) the Medicare Payment Advisory Commission;
(D) the Inspector General of the Department of Health and
Human Services; and
(E) the Comptroller General of the United States.
(a) Hospice Care Payment Reforms.--
(1) In general.--Section 1814(i) of the Social Security Act (42
U.S.C. 1395f(i)), as amended by section 3004(c), is amended--
(B) by inserting after paragraph (5) the following new
``(6)(A) The Secretary shall collect additional data and
information as the Secretary determines appropriate to revise
payments for hospice care under this subsection pursuant to
subparagraph (D) and for other purposes as determined appropriate
by the Secretary. The Secretary shall begin to collect such data by
``(B) The additional data and information to be collected under
subparagraph (A) may include data and information on--
``(i) charges and payments;
``(ii) the number of days of hospice care which are
attributable to individuals who are entitled to, or enrolled
for, benefits under part A; and
``(iii) with respect to each type of service included in
hospice care--
``(I) the number of days of hospice care attributable
to the type of service;
``(II) the cost of the type of service; and
``(III) the amount of payment for the type of service;
``(iv) charitable contributions and other revenue of the
hospice program;
``(v) the number of hospice visits;
``(vi) the type of practitioner providing the visit; and
``(vii) the length of the visit and other basic information
with respect to the visit.
``(C) The Secretary may collect the additional data and
information under subparagraph (A) on cost reports, claims, or
other mechanisms as the Secretary determines to be appropriate.
``(D)(i) Notwithstanding the preceding paragraphs of this
subsection, not earlier than October 1, 2013, the Secretary shall,
by regulation, implement revisions to the methodology for
determining the payment rates for routine home care and other
services included in hospice care under this part, as the Secretary
determines to be appropriate. Such revisions may be based on an
analysis of data and information collected under subparagraph (A).
Such revisions may include adjustments to per diem payments that
reflect changes in resource intensity in providing such care and
services during the course of the entire episode of hospice care.
``(ii) Revisions in payment implemented pursuant to clause (i)
shall result in the same estimated amount of aggregate expenditures
under this title for hospice care furnished in the fiscal year in
which such revisions in payment are implemented as would have been
made under this title for such care in such fiscal year if such
revisions had not been implemented.
``(E) The Secretary shall consult with hospice programs and the
Medicare Payment Advisory Commission regarding the additional data
and information to be collected under subparagraph (A) and the
payment revisions under subparagraph (D).''.
(2) Conforming amendments.--Section 1814(i)(1)(C) of the Social
Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
(A) in clause (ii)--
(i) in the matter preceding subclause (I), by inserting
``(before the first fiscal year in which the payment
revisions described in paragraph (6)(D) are implemented)''
after ``subsequent fiscal year''; and
(ii) in subclause (VII), by inserting ``(before the
first fiscal year in which the payment revisions described
in paragraph (6)(D) are implemented), subject to clause
(iv),'' after ``subsequent fiscal year''; and
``(iii) With respect to routine home care and other
services included in hospice care furnished during fiscal
years subsequent to the first fiscal year in which payment
revisions described in paragraph (6)(D) are implemented,
the payment rates for such care and services shall be the
payment rates in effect under this clause during the
preceding fiscal year increased by, subject to clause (iv),
the market basket percentage increase (as defined in
section 1886(b)(3)(B)(iii)) for the fiscal year.''.
(b) Adoption of MedPAC Hospice Program Eligibility Recertification
Recommendations.--Section 1814(a)(7) of the Social Security Act (42
U.S.C. 1395f(a)(7)) is amended--
(1) in subparagraph (B), by striking ``and'' at the end; and
``(D) on and after January 1, 2011--
``(i) a hospice physician or nurse practitioner has a
face-to-face encounter with the individual to determine
continued eligibility of the individual for hospice care
prior to the 180th-day recertification and each subsequent
recertification under subparagraph (A)(ii) and attests that
such visit took place (in accordance with procedures
established by the Secretary); and
``(ii) in the case of hospice care provided an
individual for more than 180 days by a hospice program for
which the number of such cases for such program comprises
more than a percent (specified by the Secretary) of the
total number of such cases for all programs under this
title, the hospice care provided to such individual is
medically reviewed (in accordance with procedures
established by the Secretary); and''.
SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPORTIONATE SHARE HOSPITAL
(DSH) PAYMENTS.
Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as
amended by sections 3001, 3008, and 3025, is amended--
(1) in subsection (d)(5)(F)(i), by striking ``For'' and
inserting ``Subject to subsection (r), for''; and
``(r) Adjustments to Medicare DSH Payments.--
``(1) Empirically justified dsh payments.--For fiscal year 2015
and each subsequent fiscal year, instead of the amount of
disproportionate share hospital payment that would otherwise be
made under subsection (d)(5)(F) to a subsection (d) hospital for
the fiscal year, the Secretary shall pay to the subsection (d)
hospital 25 percent of such amount (which represents the
empirically justified amount for such payment, as determined by the
Medicare Payment Advisory Commission in its March 2007 Report to
the Congress).
``(2) Additional payment.--In addition to the payment made to a
subsection (d) hospital under paragraph (1), for fiscal year 2015
and each subsequent fiscal year, the Secretary shall pay to such
subsection (d) hospitals an additional amount equal to the product
of the following factors:
``(A) Factor one.--A factor equal to the difference
between--
``(i) the aggregate amount of payments that would be
made to subsection (d) hospitals under subsection (d)(5)(F)
if this subsection did not apply for such fiscal year (as
estimated by the Secretary); and
``(ii) the aggregate amount of payments that are made
to subsection (d) hospitals under paragraph (1) for such
fiscal year (as so estimated).
``(B) Factor two.--
``(i) Fiscal years 2015, 2016, and 2017.--For each of
fiscal years 2015, 2016, and 2017, a factor equal to 1
minus the percent change (divided by 100) in the percent of
individuals under the age of 65 who are uninsured, as
determined by comparing the percent of such individuals--
``(I) who are uninsured in 2012, the last year
before coverage expansion under the Patient Protection
and Affordable Care Act (as calculated by the Secretary
based on the most recent estimates available from the
Director of the Congressional Budget Office before a
vote in either House on such Act that, if determined in
the affirmative, would clear such Act for enrollment);
``(II) who are uninsured in the most recent period
for which data is available (as so calculated).
``(ii) 2018 and subsequent years.--For fiscal year 2018
and each subsequent fiscal year, a factor equal to 1 minus
the percent change (divided by 100) in the percent of
individuals who are uninsured, as determined by comparing
the percent of individuals--
``(I) who are uninsured in 2012 (as estimated by
the Secretary, based on data from the Census Bureau or
other sources the Secretary determines appropriate, and
certified by the Chief Actuary of the Centers for
Medicare & Medicaid Services); and
for which data is available (as so estimated and
certified).
``(C) Factor three.--A factor equal to the percent, for
each subsection (d) hospital, that represents the quotient of--
``(i) the amount of uncompensated care for such
hospital for a period selected by the Secretary (as
estimated by the Secretary, based on appropriate data
(including, in the case where the Secretary determines that
alternative data is available which is a better proxy for
the costs of subsection (d) hospitals for treating the
uninsured, the use of such alternative data)); and
``(ii) the aggregate amount of uncompensated care for
all subsection (d) hospitals that receive a payment under
this subsection for such period (as so estimated, based on
such data).
``(A) Any estimate of the Secretary for purposes of
determining the factors described in paragraph (2).
``(B) Any period selected by the Secretary for such
purposes.''.
(a) In General.--Section 1848(c)(2) of the Social Security Act (42
U.S.C. 1395w-4(c)(2)) is amended by adding at the end the following new
subparagraphs:
``(K) Potentially misvalued codes.--
``(i) In general.--The Secretary shall--
``(I) periodically identify services as being
potentially misvalued using criteria specified in
clause (ii); and
``(II) review and make appropriate adjustments to
the relative values established under this paragraph
for services identified as being potentially misvalued
under subclause (I).
``(ii) Identification of potentially misvalued codes.--
For purposes of identifying potentially misvalued services
pursuant to clause (i)(I), the Secretary shall examine (as
the Secretary determines to be appropriate) codes (and
families of codes as appropriate) for which there has been
the fastest growth; codes (and families of codes as
appropriate) that have experienced substantial changes in
practice expenses; codes for new technologies or services
within an appropriate period (such as 3 years) after the
relative values are initially established for such codes;
multiple codes that are frequently billed in conjunction
with furnishing a single service; codes with low relative
values, particularly those that are often billed multiple
times for a single treatment; codes which have not been
subject to review since the implementation of the RBRVS
(the so-called `Harvard-valued codes'); and such other
codes determined to be appropriate by the Secretary.
``(iii) Review and adjustments.--
``(I) The Secretary may use existing processes to
receive recommendations on the review and appropriate
adjustment of potentially misvalued services described
in clause (i)(II).
``(II) The Secretary may conduct surveys, other
data collection activities, studies, or other analyses
as the Secretary determines to be appropriate to
facilitate the review and appropriate adjustment
described in clause (i)(II).
``(III) The Secretary may use analytic contractors
to identify and analyze services identified under
clause (i)(I), conduct surveys or collect data, and
make recommendations on the review and appropriate
adjustment of services described in clause (i)(II).
``(IV) The Secretary may coordinate the review and
appropriate adjustment described in clause (i)(II) with
the periodic review described in subparagraph (B).
``(V) As part of the review and adjustment
described in clause (i)(II), including with respect to
codes with low relative values described in clause
(ii), the Secretary may make appropriate coding
revisions (including using existing processes for
consideration of coding changes) which may include
consolidation of individual services into bundled codes
for payment under the fee schedule under subsection
``(VI) The provisions of subparagraph (B)(ii)(II)
shall apply to adjustments to relative value units made
pursuant to this subparagraph in the same manner as
such provisions apply to adjustments under subparagraph
(B)(ii)(II).
``(L) Validating relative value units.--
``(i) In general.--The Secretary shall establish a
process to validate relative value units under the fee
schedule under subsection (b).
``(ii) Components and elements of work.--The process
described in clause (i) may include validation of work
elements (such as time, mental effort and professional
judgment, technical skill and physical effort, and stress
due to risk) involved with furnishing a service and may
include validation of the pre-, post-, and intra-service
components of work.
``(iii) Scope of codes.--The validation of work
relative value units shall include a sampling of codes for
services that is the same as the codes listed under
subparagraph (K)(ii).
``(iv) Methods.--The Secretary may conduct the
validation under this subparagraph using methods described
in subclauses (I) through (V) of subparagraph (K)(iii) as
the Secretary determines to be appropriate.
``(v) Adjustments.--The Secretary shall make
appropriate adjustments to the work relative value units
under the fee schedule under subsection (b). The provisions
of subparagraph (B)(ii)(II) shall apply to adjustments to
relative value units made pursuant to this subparagraph in
the same manner as such provisions apply to adjustments
under subparagraph (B)(ii)(II).''.
(b) Implementation.--
(1) Administration.--
(A) Chapter 35 of title 44, United States Code and the
provisions of the Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to this section or the amendment made by
(B) Notwithstanding any other provision of law, the
Secretary may implement subparagraphs (K) and (L) of 1848(c)(2)
of the Social Security Act, as added by subsection (a), by
(C) Section 4505(d) of the Balanced Budget Act of 1997 is
(D) Except for provisions related to confidentiality of
information, the provisions of the Federal Acquisition
Regulation shall not apply to this section or the amendment
made by this section.
(2) Focusing cms resources on potentially overvalued codes.--
Section 1868(a) of the Social Security Act (42 U.S.C. 1395ee(a)) is
(a) Adjustment in Practice Expense To Reflect Higher Presumed
Utilization.--Section 1848 of the Social Security Act (42 U.S.C. 1395w-
4) is amended--
(1) in subsection (b)(4)--
(A) in subparagraph (B), by striking ``subparagraph (A)''
and inserting ``this paragraph''; and
(B) by adding at the end the following new subparagraph:
``(C) Adjustment in practice expense to reflect higher
presumed utilization.--Consistent with the methodology for
computing the number of practice expense relative value units
under subsection (c)(2)(C)(ii) with respect to advanced
1834(e)(1)(B)) furnished on or after January 1, 2010, the
Secretary shall adjust such number of units so it reflects--
``(i) in the case of services furnished on or after
January 1, 2010, and before January 1, 2013, a 65 percent
(rather than 50 percent) presumed rate of utilization of
imaging equipment;
``(ii) in the case of services furnished on or after
imaging equipment; and
``(iii) in the case of services furnished on or after
January 1, 2014, a 75 percent (rather than 50 percent)
presumed rate of utilization of imaging equipment.''; and
(2) in subsection (c)(2)(B)(v), by adding at the end the
following new subclauses:
``(III) Change in presumed utilization level of
certain advanced diagnostic imaging services for 2010
through 2012.--Effective for fee schedules established
beginning with 2010 and ending with 2012, reduced
expenditures attributable to the presumed rate of
utilization of imaging equipment of 65 percent under
subsection (b)(4)(C)(i) instead of a presumed rate of
utilization of such equipment of 50 percent.
``(IV) Change in presumed utilization level of
certain advanced diagnostic imaging services for
2013.--Effective for fee schedules established for
2013, reduced expenditures attributable to the presumed
rate of utilization of imaging equipment of 70 percent
under subsection (b)(4)(C)(ii) instead of a presumed
rate of utilization of such equipment of 50 percent.
``(V) Change in presumed utilization level of
and subsequent years.--Effective for fee schedules
established beginning with 2014, reduced expenditures
attributable to the presumed rate of utilization of
imaging equipment of 75 percent under subsection
(b)(4)(C)(iii) instead of a presumed rate of
utilization of such equipment of 50 percent.''.
(b) Adjustment in Technical Component ``discount'' on Single-
session Imaging to Consecutive Body Parts.--Section 1848 of the Social
Security Act (42 U.S.C. 1395w-4), as amended by subsection (a), is
(1) in subsection (b)(4), by adding at the end the following
new subparagraph:
``(D) Adjustment in technical component discount on single-
session imaging involving consecutive body parts.--For services
furnished on or after July 1, 2010, the Secretary shall
increase the reduction in payments attributable to the multiple
procedure payment reduction applicable to the technical
component for imaging under the final rule published by the
Secretary in the Federal Register on November 21, 2005 (part
405 of title 42, Code of Federal Regulations) from 25 percent
to 50 percent.''; and
following new subclause:
``(VI) Additional reduced payment for multiple
imaging procedures.--Effective for fee schedules
established beginning with 2010 (but not applied for
services furnished prior to July 1, 2010), reduced
expenditures attributable to the increase in the
multiple procedure payment reduction from 25 to 50
percent (as described in subsection (b)(4)(D)).''.
(c) Analysis by the Chief Actuary of the Centers for Medicare &
Medicaid Services.--Not later than January 1, 2013, the Chief Actuary
of the Centers for Medicare & Medicaid Services shall make publicly
available an analysis of whether, for the period of 2010 through 2019,
the cumulative expenditure reductions under title XVIII of the Social
Security Act that are attributable to the adjustments under the
amendments made by this section are projected to exceed $3,000,000,000.
(a) In General.--Section 1834(a)(7)(A) of the Social Security Act
(42 U.S.C. 1395m(a)(7)(A)) is amended--
(1) in clause (i)--
(A) in subclause (II), by inserting ``subclause (III) and''
after ``Subject to''; and
(B) by adding at the end the following new subclause:
``(III) Special rule for power-driven
wheelchairs.--For purposes of payment for power-driven
wheelchairs, subclause (II) shall be applied by
substituting `15 percent' and `6 percent' for `10
percent' and `7.5 percent', respectively.''; and
(2) in clause (iii)--
(A) in the heading, by inserting ``complex,
rehabilitative'' before ``power-driven''; and
(B) by inserting ``complex, rehabilitative'' before
``power-driven''.
(b) Technical Amendment.--Section 1834(a)(7)(C)(ii)(II) of the
Social Security Act (42 U.S.C. 1395m(a)(7)(C)(ii)(II)) is amended by
striking ``(A)(ii) or''.
(1) In general.--Subject to paragraph (2), the amendments made
by subsection (a) shall take effect on January 1, 2011, and shall
apply to power-driven wheelchairs furnished on or after such date.
(2) Application to competitive bidding.--The amendments made by
subsection (a) shall not apply to payment made for items and
services furnished pursuant to contracts entered into under section
1847 of the Social Security Act (42 U.S.C. 1395w-3) prior to
January 1, 2011, pursuant to the implementation of subsection
(a)(1)(B)(i)(I) of such section 1847.
(a) Extension of Section 508 Hospital Reclassifications.--
(1) In general.--Subsection (a) of section 106 of division B of
the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note),
as amended by section 117 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (Public Law 110-173) and section 124 of the
Medicare Improvements for Patients and Providers Act of 2008
(Public Law 110-275), is amended by striking ``September 30, 2009''
and inserting ``September 30, 2010''.
(2) Use of particular wage index in fiscal year 2010.--For
purposes of implementation of the amendment made by this subsection
during fiscal year 2010, the Secretary shall use the hospital wage
index that was promulgated by the Secretary in the Federal Register
on August 27, 2009 (74 Fed. Reg. 43754), and any subsequent
corrections.
(b) Plan for Reforming the Medicare Hospital Wage Index System.--
(1) In general.--Not later than December 31, 2011, the
Secretary of Health and Human Services (in this section referred to
as the ``Secretary'') shall submit to Congress a report that
includes a plan to reform the hospital wage index system under
section 1886 of the Social Security Act.
Secretary shall take into account the goals for reforming such
system set forth in the Medicare Payment Advisory Commission June
2007 report entitled ``Report to Congress: Promoting Greater
Efficiency in Medicare'', including establishing a new hospital
compensation index system that--
(A) uses Bureau of Labor Statistics data, or other data or
methodologies, to calculate relative wages for each geographic
area involved;
(B) minimizes wage index adjustments between and within
metropolitan statistical areas and statewide rural areas;
(C) includes methods to minimize the volatility of wage
index adjustments that result from implementation of policy,
while maintaining budget neutrality in applying such
adjustments;
(D) takes into account the effect that implementation of
the system would have on health care providers and on each
region of the country;
(E) addresses issues related to occupational mix, such as
staffing practices and ratios, and any evidence on the effect
on quality of care or patient safety as a result of the
implementation of the system; and
(F) provides for a transition.
the Secretary shall consult with relevant affected parties.
(c) Use of Particular Criteria for Determining Reclassifications.--
Notwithstanding any other provision of law, in making decisions on
applications for reclassification of a subsection (d) hospital (as
defined in paragraph (1)(B) of section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)) for the purposes described in paragraph
(10)(D)(v) of such section for fiscal year 2011 and each subsequent
fiscal year (until the first fiscal year beginning on or after the date
that is 1 year after the Secretary of Health and Human Services submits
the report to Congress under subsection (b)), the Geographic
Classification Review Board established under paragraph (10) of such
section shall use the average hourly wage comparison criteria used in
making such decisions as of September 30, 2008. The preceding sentence
shall be effected in a budget neutral manner.
Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is
``(18) Authorization of adjustment for cancer hospitals.--
``(A) Study.--The Secretary shall conduct a study to
determine if, under the system under this subsection, costs
incurred by hospitals described in section 1886(d)(1)(B)(v)
with respect to ambulatory payment classification groups exceed
those costs incurred by other hospitals furnishing services
under this subsection (as determined appropriate by the
Secretary). In conducting the study under this subparagraph,
the Secretary shall take into consideration the cost of drugs
and biologicals incurred by such hospitals.
``(B) Authorization of adjustment.--Insofar as the
Secretary determines under subparagraph (A) that costs incurred
by hospitals described in section 1886(d)(1)(B)(v) exceed those
costs incurred by other hospitals furnishing services under
this subsection, the Secretary shall provide for an appropriate
adjustment under paragraph (2)(E) to reflect those higher costs
effective for services furnished on or after January 1,
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a) is amended--
(i) in subparagraph (A), by striking ``or'' at the end;
(ii) in subparagraph (B), by striking the period at the
end and inserting ``; or''; and
(iii) by adding at the end the following new
``(C) in the case of a biosimilar biological product (as
defined in subsection (c)(6)(H)), the amount determined under
paragraph (8).''; and
(B) by adding at the end the following new paragraph:
``(8) Biosimilar biological product.--The amount specified in
this paragraph for a biosimilar biological product described in
paragraph (1)(C) is the sum of--
``(A) the average sales price as determined using the
methodology described under paragraph (6) applied to a
biosimilar biological product for all National Drug Codes
assigned to such product in the same manner as such paragraph
is applied to drugs described in such paragraph; and
``(B) 6 percent of the amount determined under paragraph
(4) for the reference biological product (as defined in
subsection (c)(6)(I)).''; and
(2) in subsection (c)(6), by adding at the end the following
``(H) Biosimilar biological product.--The term `biosimilar
biological product' means a biological product approved under
an abbreviated application for a license of a biological
product that relies in part on data or information in an
application for another biological product licensed under
section 351 of the Public Health Service Act.
``(I) Reference biological product.--The term `reference
biological product' means the biological product licensed under
such section 351 that is referred to in the application
described in subparagraph (H) of the biosimilar biological
product.''.
apply to payments for biosimilar biological products beginning with the
first day of the second calendar quarter after enactment of legislation
providing for a biosimilar pathway (as determined by the Secretary).
Medicare Hospice Concurrent Care demonstration program at
participating hospice programs under which Medicare beneficiaries
are furnished, during the same period, hospice care and any other
items or services covered under title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) from funds otherwise paid under such
title to such hospice programs.
(2) Duration.--The demonstration program under this section
shall be conducted for a 3-year period.
(3) Sites.--The Secretary shall select not more than 15 hospice
programs at which the demonstration program under this section
shall be conducted. Such hospice programs shall be located in urban
and rural areas.
(b) Independent Evaluation and Reports.--
(1) Independent evaluation.--The Secretary shall provide for
the conduct of an independent evaluation of the demonstration
program under this section. Such independent evaluation shall
determine whether the demonstration program has improved patient
care, quality of life, and cost-effectiveness for Medicare
beneficiaries participating in the demonstration program.
(2) Reports.--The Secretary shall submit to Congress a report
containing the results of the evaluation conducted under paragraph
(1), together with such recommendations as the Secretary determines
(c) Budget Neutrality.--With respect to the 3-year period of the
demonstration program under this section, the Secretary shall ensure
that the aggregate expenditures under title XVIII for such period shall
not exceed the aggregate expenditures that would have been expended
under such title if the demonstration program under this section had
not been implemented.
In the case of discharges occurring on or after October 1, 2010,
for purposes of applying section 4410 of the Balanced Budget Act of
1997 (42 U.S.C. 1395ww note) and paragraph (h)(4) of section 412.64 of
title 42, Code of Federal Regulations, the Secretary of Health and
Human Services shall administer subsection (b) of such section 4410 and
paragraph (e) of such section 412.64 in the same manner as the
Secretary administered such subsection (b) and paragraph (e) for
discharges occurring during fiscal year 2008 (through a uniform,
national adjustment to the area wage index).
(a) Study.--
study on the need for an additional payment for urban Medicare-
dependent hospitals for inpatient hospital services under section
1886 of the Social Security Act (42 U.S.C. 1395ww). Such study
shall include an analysis of--
(A) the Medicare inpatient margins of urban Medicare-
dependent hospitals, as compared to other hospitals which
receive 1 or more additional payments or adjustments under such
section (including those payments or adjustments described in
paragraph (2)(A)); and
(B) whether payments to medicare-dependent, small rural
hospitals under subsection (d)(5)(G) of such section should be
applied to urban Medicare-dependent hospitals.
(2) Urban medicare-dependent hospital defined.--For purposes of
this section, the term ``urban Medicare-dependent hospital'' means
a subsection (d) hospital (as defined in subsection (d)(1)(B) of
such section) that--
(A) does not receive any additional payment or adjustment
under such section, such as payments for indirect medical
education costs under subsection (d)(5)(B) of such section,
disproportionate share payments under subsection (d)(5)(A) of
such section, payments to a rural referral center under
subsection (d)(5)(C) of such section, payments to a critical
access hospital under section 1814(l) of such Act (42 U.S.C.
1395f(l)), payments to a sole community hospital under
subsection (d)(5)(D) of such section 1886, or payments to a
medicare-dependent, small rural hospital under subsection
(d)(5)(G) of such section 1886; and
(B) for which more than 60 percent of its inpatient days or
discharges during 2 of the 3 most recently audited cost
reporting periods for which the Secretary has a settled cost
report were attributable to inpatients entitled to benefits
under part A of title XVIII of such Act.
(b) Report.--Not later than 9 months after the date of enactment of
this Act, the Secretary shall submit to Congress a report containing
the results of the study conducted under subsection (a), together with
Nothing in the provisions of, or amendments made by, this Act shall
result in the reduction of guaranteed home health benefits under title
XVIII of the Social Security Act.
(a) MA Benchmark Based on Plan's Competitive Bids.--
(1) In general.--Section 1853(j) of the Social Security Act (42
U.S.C. 1395w-23(j)) is amended--
(A) by striking ``Amounts.--For purposes'' and inserting
``Amounts.--
``(1) In general.--For purposes'';
(B) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and indenting the
subparagraphs appropriately;
(C) in subparagraph (A), as redesignated by subparagraph
(B)--
(i) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively, and indenting the
clauses appropriately; and
(ii) in clause (i), as redesignated by clause (i), by
striking ``an amount equal to'' and all that follows
through the end and inserting ``an amount equal to--
``(I) for years before 2007, \1/12\ of the annual
MA capitation rate under section 1853(c)(1) for the
area for the year, adjusted as appropriate for the
purpose of risk adjustment;
``(II) for 2007 through 2011, \1/12\ of the
applicable amount determined under subsection (k)(1)
for the area for the year;
``(III) for 2012, the sum of--
``(aa) \2/3\ of the quotient of--
``(AA) the applicable amount determined
under subsection (k)(1) for the area for the
``(BB) 12; and
``(bb) \1/3\ of the MA competitive benchmark
amount (determined under paragraph (2)) for the
area for the month;
``(IV) for 2013, the sum of--
amount (as so determined) for the area for the
month;
``(V) for 2014, the MA competitive benchmark amount
for the area for a month in 2013 (as so determined),
increased by the national per capita MA growth
percentage, described in subsection (c)(6) for 2014,
but not taking into account any adjustment under
subparagraph (C) of such subsection for a year before
2004; and
``(VI) for 2015 and each subsequent year, the MA
competitive benchmark amount (as so determined) for the